Bir Tax

Income Tax Description
Income Tax is a tax on a person's income, emoluments, profits arising from property, practice of profession, conduct of trade or business or on the pertinent items of
gross income specified in the Tax Code of 1997 (Tax Code), as amended, less the deductions if any, authorized for such types of income, by the Tax Code, as amended, or
other special laws.
Who are required to File Income Tax Returns?
Individuals
 Resident citizens receiving income from sources within or outside the Philippines
o Employees deriving purely compensation income from two or more employers, concurrently or successively at any time during the taxable year
o Employees deriving purely compensation income regardless of the amount, whether from a single or several employers during the calendar year, the
income tax of which has not been withheld correctly (i.e. tax due is not equal to the tax withheld) resulting to collectible or refundable return
o Self-employed individuals receiving income from the conduct of trade or business and/or practice of profession
o Individuals deriving mixed income, i.e., compensation income and income from the conduct of trade or business and/or practice of profession
o Individuals deriving other non-business, non-professional related income in addition to compensation income not otherwise subject to a final tax
o Individuals receiving purely compensation income from a single employer, although the income of which has been correctly withheld, but whose spouse
is not entitled to substituted filing
 Non-resident citizens receiving income from sources within the Philippines
 Aliens, whether resident or not, receiving income from sources within the Philippines
Non-Individuals
 Corporations including partnerships, no matter how created or organized.

 Domestic corporations receiving income from sources within and outside the Philippines
 Foreign corporations receiving income from sources within the Philippines
 Estates and trusts engaged in trade or business
Annual Income Tax For Individuals Earning Purely Compensation Income (Including Non-Business/Non-Profession Related Income)
BIR Form 1700 - Annual Income Tax For Individuals Earning Purely Compensation Income (Including Non-Business/Non-Profession Related Income)
Deadline
On or before the 15th day of April of each year covering taxable income for calendar year 2018 and thereafter
Annual Income Tax For Individuals, Estates, and Trusts
BIR Form 1701 - Annual Income Tax Return Individuals, Estates and Trusts
Deadline
Final Adjustment Return or Annual Income Tax Return - On or before the 15th day of April of each year covering income for calendar year 2018 and thereafter
Account Information Form For Self-Employed Individuals, Estates And Trusts (Including Those With Mixed Income, i.e., Compensation Income and Income
from Business and/or Practice of Profession)
BIR Form 1701 AIF - Account Information Form for Self-Employed Individuals, Estates and Trusts (Including those with Mixed Income, i.e., Compensation Income and
Income from Business and/or Practice of Profession) and Estates and Trusts (Engaged in Trade or Business)
NOTE: Pursuant to Sec. 71 of RA 10963, otherwise known as Tax Reform Acceleration and Inclusion Act, amending Sec. 232 of the Tax Code, as amended, in relation to
Revenue Memorandum Circular No. 6 – 2001, corporations, companies or persons whose gross annual sales, earnings, receipts or output exceed P3,000,000 may not
accomplish this form. In lieu thereof, they may file their annual income tax returns accompanied by balance sheets, profit and loss statement, schedules listing income-
producing properties and the corresponding income therefrom, and other relevant statements duly certified by an independent CPA.
Deadline
Same deadline as BIR Form 1701 - On or before the 15th day of April of each year covering taxable income for calendar year 2018 and thereafte
Quarterly Income Tax For Individuals, Estates And Trusts Including Those With Mixed Income, i.e., Compensation Income and Income from Business and/or
Practice of Profession
BIR Form 1701Q - Quarterly Income Tax Return For Individuals, Estates and Trusts
Deadlines
 May 15 of the current taxable year– for the first quarter

 August 15 of the current taxable year – for the second quarter
 November 15 of the current taxable year – for the third quarter
Annual Income Tax For Corporations And Partnerships

BIR Form 1702 - Annual Income Tax Return (For Corporations and Partnerships)
Deadline
Final Adjustment Return or Annual Income Tax Return - On or before the 15th day of the fourth month following the close of the taxpayer’s taxable year
Account Information Form For Corporations And Partnerships
BIR Form 1702 AIF - Account Information Form (For Corporations and Partnerships)
NOTE: Pursuant to Sec. 71 of RA 10963, otherwise known as Tax Reform Acceleration and Inclusion Act, amending Sec. 232 of the Tax Code, as amended, in relation
toRevenue Memorandum Circular No. 6 – 2001, corporations, companies or persons whose gross annual sales, earnings, receipts or output exceed P3,000,000 may not
accomplish this form. In lieu thereof, they may file their annual income tax returns accompanied by balance sheets, profit and loss statement, schedules listing income-
producing properties and the corresponding income therefrom, and other relevant statements duly certified by an independent CPA.
Deadline
Same deadline as BIR Form 1702 - On or before the 15th day of the fourth month following the close of the taxpayer’s taxable year
Quarterly Income Tax For Corporations And Partnerships
BIR Form 1702Q - Quarterly Income Tax Return (For Corporations and Partnerships)
Deadline
Corporate Quarterly Declaration or Quarterly Income Tax Return - On or before the 60th day following the close of each of the quarters of the taxable year
Improperly Accumulated Earnings Tax For Corporations
BIR Form 1704 - Improperly Accumulated Earnings Tax Return (For Corporations)
Deadline
Within fifteen (15) days after the close of the taxable year
Annual Income Information Form for General Professional Partnerships
Sec. 55. Returns of General Professional Partnership (Tax Code of 1997, as amended)
Every general professional partnership shall file, in duplicate, a return of its income, except income exempt under Section 32 (B) of this Title, setting forth the items of
gross income and of deductions allowed by this Title, and the names, Taxpayer Identification Numbers (TIN), addresses and shares of each of the partners.
Income Tax Rates
I. For Individual Citizens and Resident Aliens Earning Purely Compensation Income and Individuals Engaged in Business and Practice of Profession
A. Graduated Income Tax Rates under Section 24(A)(2) of the Tax Code of 1997, as amended by Republic Act No. 10963
Amount of Net Taxable Income Rate

Over But Not Over
- P250,000 0%
P250,000 P400,000 20% of the excess over P250,000
P400,000 P800,000 P30,000 + 25% of the excess over P400,000
P800,000 P2,000,000 P130,000 + 30% of the excess over P800,000
P2,000,000 P8,000,000 P490,000 + 32% of the excess over P2,000,000
P8,000,000 P2,410,000 + 35% of the excess over P8,000,000
B. For Purely Self-Employed Individuals and/or Professionals Whose Gross Sales/Receipts and Other Non-Operating Income Do Not Exceed the VAT
Threshold of P3,000,000, the tax shall be, at the taxpayer’s option:
1. 8% Income Tax on Gross Sales or Gross Receipts in Excess of P250,000 in Lieu of the Graduated Income Tax Rates and the Percentage Tax;
Or
2. Income Tax Based on the Graduated Income Tax Rates
C. For Individuals Earning Both Compensation Income and Income from Business and/or Practice of Profession, their income taxes shall be:
1. For Income from Compensation: Based on Graduated Income Tax Rates; and
2. For Income from Business and/or Practice of Profession:
a. If the total Gross Sales/Receipts Do Not Exceed VAT Threshold of P3,000,000, the Individual Taxpayer May Opt to Avail:
i. 8% Income Tax on Gross Sales/Receipts and Other Non-Operating Income in Lieu of the Graduated Income Tax Rates and
the Percentage Tax; Or
ii. Income Tax Based on Graduated Income Tax Rates
b. If the total Gross Sales/Receipts Exceed VAT Threshold of P3,000,000
i. Income Tax Based on Graduated Income Tax Rates
D. On Certain Passive Income of Individual Citizens and Resident Aliens
Passive Income Tax Rate
1. Interest from currency deposits, trust funds and deposit substitutes 20%
2. Royalties (on books as well as literary & musical compositions) 10%
- In general 20%
3. Prizes (P10,000 or less ) Graduated Income Tax Rates
- Over P10,000 20%
4. Winnings (except from PCSO and Lotto amounting to P10,000 or less ) 20%
- From PCSO and Lotto amounting to P10,000 or less exempt
5. Interest Income from a Depository Bank under the Expanded Foreign Currency Deposit System 15%
6. Cash and/or Property Dividends received by an individual from a domestic corporation/ joint stock company/ insurance or 10%
mutual fund companies/ Regional Operating Headquarter of multinational companies
7. Share of an individual in the distributable net income after tax of a partnership (except GPPs)/ association, a joint 10%
account, a joint venture or consortium taxable as corporation of which he is a member or co-venture
8. Capital gains from sale, exchange or other disposition of real property located in the Philippines, classified as capital asset 6%
9. Net Capital gains from sale of shares of stock not traded in the stock exchange 15%
10. Interest Income from long-term deposit or investment in the form of savings, common or individual trust funds, deposit Exempt
substitutes, investment management accounts and other investments evidenced by certificates in such form prescribed by the
Bangko Sentral ng Pilipinas (BSP)
Upon pre-termination before the fifth year, there should be imposed on the entire income from the proceeds of the long-
term deposit based on the remaining maturity thereof:
Holding Period
- Four (4) years to less than five (5) years 5%
- Three (3) years to less than four (4) years 12%
- Less than three (3) years 20%
II. For Non-Resident Aliens Not Engaged in Trade or Business
A. Tax Rate in General – on taxable income from all sources within the Philippines same manner as individual citizen and
resident alien individual
B. Certain Passive Income Tax Rates
1. Interest from currency deposits, trust funds and deposit substitutes 20%
2. Royalties (on books as well as literary & musical compositions) 10%
- In general 20%
3. Prizes (P10,000 or less ) Graduated Income Tax Rates
- Over P10,000 20%
4. Winnings (except from PCSO and Lotto) 20%
- From PCSO and Lotto exempt
5. Cash and/or Property Dividends received from a domestic corporation/ joint stock company/ 20%
insurance/ mutual fund companies/ Regional Operating Headquarter of multinational companies
6. Share of a non-resident alien individual in the distributable net income after tax of a partnership 20%
(except GPPs) of which he is a partner or from an association, a joint account, a joint venture or
consortium taxable as corporation of which he is a member or co-venture
7. Interest Income from long-term deposit or investment in the form of savings, common or Exempt
individual trust funds, deposit substitutes, investment management accounts and other investments
evidenced by certificates in such form prescribed by the Bangko Sentral ng Pilipinas (BSP)
Upon pre-termination before the fifth year, there should be imposed on the entire income from the
proceeds of the long-term deposit based on the remaining maturity thereof:
Holding Period
- Four (4) years to less than five (5) years 5%
- Three (3) years to less than four (4) years 12%
- Less than three (3) years 20%
8. Capital from the sale, exchange or other disposition of real property located in the Philippines 6%
classified as capital asset
9. Net Capital gains from sale of shares of stock not traded in the Stock Exchange
- Not over P100,000 5%
- Any amount in excess of P100,000 10%
III. For Non-resident Aliens Not Engaged in Trade or Business
1. Gross amount of income derived from all sources within the Philippines 25%
2. Capital gains from the exchange or other disposition of real property located in the Philippines 6%
3. Net Capital gains from the sale of shares of stock not traded in the Stock Exchange
- Not Over P100,000 5%
- Any amount in excess of P100,000 10%
IV. For Alien Individuals Employed by Regional Headquarters (RHQ) or Area Headquarters and Regional Operating Headquarters (ROH) of Multinational
Companies, Offshore Banking Units (OBUs), Petroleum Service Contractor and Subcontractor
On the gross income consisting of salaries, wages, annuities, compensation, Graduated Income
remuneration and other emoluments, such as honoraria and emoluments derived from Tax Rates
the Philippines
V. For General Professional Partnerships
Net Income of the Partnerships 0%
VI. For Domestic Corporations
Rates of Tax on Certain Passive Income of Corporations Tax Rate
1. Interest from currency deposits, trust funds, deposit substitutes and similar arrangements received by domestic 20%
corporations
2. Royalties from sources within the Philippines 20%
3. Interest Income from a Depository Bank under Expanded Foreign Currency Deposit System 15%
4. Cash and Property Dividends received by a domestic corporation from another domestic corporation 0%
5. Capital gains from the sale, exchange or other disposition of lands and/or building 6%
6. Net Capital gains from sale of shares of stock not traded in the stock exchange 15%
VII. *Beginning on the 4th year immediately following the year in which such corporation commenced its business operations, when the minimum corporate income
tax is greater than the tax computed using the normal income tax.
VIII. For Resident Foreign Corporation
1) a. In General – on taxable income derived from sources within the Philippines 30%
b. Minimum Corporate Income Tax – on gross income 2%
c. Improperly Accumulated Earnings – on improperly accumulated taxable income 10%
2) International Carriers – on gross Philippine billings 2½%
3) Regional Operating Headquarters of Multinational Companies– on taxable income 10%
4.) Regional or Area Headquarters of Multinational Companies exempt
5) Corporation Covered by Special Laws Rate specified under the
respective special laws
6) Offshore Banking Units (OBUs) 10%
In general – Income derived by OBUs from foreign currency transactions with non-residents, other OBUs, local Exempt
commercial banks and branches of foreign banks authorized by BSP
On interest income derived from foreign currency loans granted to residents other than offshore banking units or 10%
local commercial banks, local branches of foreign banks authorized by BSP to transact business with OBUs
7) Income derived under the Expanded Foreign Currency Deposit System
Interest income derived by a depository bank under the expanded foreign currency deposit system. 7½%
On Income derived by depository banks under the expanded foreign currency deposit systems from foreign currency exempt
transactions with non-residents, OBUs in the Philippines, local commercial banks including branches of foreign banks
that may be authorized by BSP
On interest income derived from foreign currency loans granted by depository banks under the expanded foreign 10%
currency deposit systems to residents other than offshore banking units in the Philippines or other depository banks
under the expanded system
8.) Branch Profit Remittances – on total profits applied or earmarked for remittance without any deduction for the tax 15%
component thereof (except those activities which are registered with the Philippines Economic Zone Authority)
9.) Interest from currency deposits, trust funds, deposit substitutes and similar arrangements 20%
10. Royalties derived from sources within the Philippines 20%
Related Revenue Issuances
RMO No. 23-2018, RR No. 8-2018, RA No. 10963, RR No. 12-2007, RR No. 14-2002, RA No. 9337, RR No. 9-98, RR No. 1-98, RR No. 5-97, RR No. 4-96
Frequently Asked Questions
1) What is income?
Income means all wealth which flows into the taxpayer other than as a mere return of capital.
2) What is Taxable Income?
Taxable income means the pertinent items of gross income specified in the Tax Code as amended, less the deductions, if any, authorized for such types of income, by the
Tax Code or other special laws.
3) What is Gross Income?
Gross income means all income derived from whatever source.
4) What comprises gross income?

Gross income includes, but is not limited to the following:
 Compensation for services, in whatever form paid, including but not limited to fees, salaries, wages, commissions and similar items
 Gross income derived from the conduct of trade or business or the exercise of profession
 Gains derived from dealings in property
 Interest
 Rents
 Royalties
 Dividends
 Annuities
 Prizes and winnings
 Pensions
 Partner's distributive share from the net income of the general professional partnerships
5) What are some of the exclusions from gross income?
o Life insurance
o Amount received by insured as return of premium
o Gifts, bequests and devises
o Compensation for injuries or sickness
o Income exempt under treaty
o Retirement benefits, pensions, gratuities, etc.
o Miscellaneous items
 Income derived by foreign government
 Income derived by the government or its political subdivision
 Prizes and awards in sport competition
 Prizes and awards which met the conditions set in the Tax Code
 13th month pay and other benefits not exceeding P90,000
 GSIS, SSS, Medicare and other contributions
 Gains from the sale of bonds, debentures or other certificate of indebtedness with a maturity of more than five (5) years
 Gains from redemption of shares in mutual fund
6) What are the allowable deductions from gross income?
a) *Optional Standard Deduction - an amount not exceeding 40% of the gross sales/receipts for individuals and gross income for corporations; or
b) Itemized Deductions which include the following:
- Expenses
- Interest
- Taxes
- Losses
- Bad Debts
- Depreciation
- Depletion of Oil and Gas Wells and Mines
- Charitable Contributions and Other Contributions- Research and Development
- Pension Trusts
* Not allowed to non-resident alien individual
* A General Professional Partnership (GPP) may avail of the OSD only once, either by the GPP or the partners comprising the partnership
7) Who are not required to file Income Tax returns?
a. An individual earning purely compensation income whose taxable income does not exceed P250,000.00
b. An individual whose income tax has been withheld correctly by his employer, provided that such individual has only one employer for the taxable year
c. An individual whose sole income has been subjected to final withholding tax or who is exempt from income tax pursuant to the Tax Code and other special
laws.
d. An individual who is a minimum wage earner
e. Those who are qualified under “substituted filing”. However, substituted filing applies only if all of the following requirements are present:
- the employee received purely compensation income (regardless of amount) during the taxable year;
- the employee received the income from only one employer in the Philippines during the taxable year;
- the amount of tax due from the employee at the end of the year equals the amount of tax withheld by the employer;
- the employee’s spouse also complies with all 3 conditions stated above;
- the employer files the annual information return (BIR Form No. 1604-CF); and
- the employer issues BIR Form No. 2316 (Oct 2002 ENCS version) to each employee.
8.) Who are exempt from Income Tax?

a. Income from abroad of a non-resident citizen who is:
i. A citizen of the Philippines who establishes to the satisfaction of the Commissioner the fact of his physical presence abroad with a definite intention to reside
therein
ii. A citizen of the Philippines who leaves the Philippines during the taxable year to reside abroad, either as an immigrant or for employment on a permanent
basis
iii. A citizen of the Philippines who works and derives income from abroad and whose employment thereat requires him to be physically present abroad most of
the time during the taxable year
iv. A citizen who has been previously considered as a non-resident citizen and who arrives in the Philippines at any time during the year to reside permanently in
the Philippines will likewise be treated as a non-resident citizen during the taxable year in which he arrives in the Philippines, with respect to his income derived
from sources abroad until the date of his arrival in the Philippines.
b. Overseas Filipino Worker, including overseas seaman
An individual citizen of the Philippines who is working and deriving income from abroad as an overseas Filipino worker is taxable only on income from sources
within the Philippines; provided, that a seaman who is a citizen of the Philippines and who receives compensation for services rendered abroad as a member of
the complement of a vessel engaged exclusively in international trade will be treated as an overseas Filipino worker.
NOTE: A Filipino employed as Philippine Embassy/Consulate service personnel of the Philippine Embassy/consulate is not treated as a non-resident citizen;
hence, his income is taxable.
c. General Professional Partnership
d. Government Service Insurance System (GSIS)
e. Social Security System (SSS)
f. Philippine Health Insurance Corporation (PHIC)
g. Local Water Districts (LWD)
9) What are the procedures in filing Income Tax returns (ITRs)?

a. For “with payment” ITRs (BIR Form Nos. 1700 / 1701 / 1701Q / 1702 / 1702Q / 1704)
File the return in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) of the place where taxpayer is
registered or required to be registered. In places where there are no AABs, file the return directly with the Revenue Collection Officer or duly Authorized
Treasurer of the city or municipality in which such person has his legal residence or principal place of business in the Philippines, or if there is none, filing of the
return will be at the Office of the Commissioner.
b. For “no payment” ITRs -- refundable, break-even, exempt and no operation/transaction, including returns to be paid on 2nd installment and returns paid through a Tax
Debit Memo(TDM)
File the return with the concerned Revenue District Office (RDO) where the taxpayer is registered. However, "no payment" returns filed late shall not be
accepted by the RDO but instead, they shall be filed with an Authorized Agent Bank (AAB) or Collection Officer/Deputized Municipal Treasurer (in places
where there are no AABs), for collection of necessary penalties.
10) How is Income Tax payable of individuals (resident citizens and non-resident citizens) computed?
A. Based on Graduated Income Tax Rate
Gross Income P ___________

Less: Allowable Deductions (Itemized or Optional) ___________
Net Taxable Income P ___________
Multiply by Tax Rate (0% to 35%) ____________
Income Tax Due P ___________
Less: Tax Withheld (per BIR From 2316) ____________
Income Tax Payable P____________
B. Based on Preferential Tax Rate of 8%
i. Taxpayers source of income is purely from self-employment
Gross Sales/Receipts P ___________

Add: Non-operating Income ____________
Gross Taxable Income P ___________
Less: Amount allowed as deduction under Sec. 24 (A)(2)(b) of NIRC, as amended 250,000.00
Net Taxable Income P ___________
Multiply by Tax Rate 8%
Tax Withheld (per BIR From 2307) ____________
Income Tax Payable P ___________
ii. Mixed Income Earner
On Compensation
Total Compensation Income P ___________
Less: Non-taxable Income ____________
13th month pay and other benefits (max) 90,000.00
Taxable Compensation Income P ----------------
Multiply by Tax Rate (0% to 35%) ____________
Tax Due on Compensation P ___________
On Business Income
Gross Sales/Receipts P ___________
Add: Non-operating Income ____________
Taxable Business Income P ___________
Multiply by Tax Rate 8%
Tax Due on Business Income P ___________
Total Income Tax Due (Compensation + Business) P ___________
Tax Withheld (per BIR From 2316/2307) ____________
Income Tax Payable P ___________
11) How is Income Tax Paid?
A. Through withholding
a. Individual Payee: Rate

If the gross annual business or professional income did not exceed 5%
P3,000,000.00
If the gross annual business or professional income is more than P3,000,000.00 10%
b. Non-individual Payee Rate
If the gross annual business or professional income did not exceed P720,000.00 10%
If the gross annual business or professional income is more than P720,000.00 15%
B. Pay the balance as you file the tax return, computed as follows:

Less: Withholding Tax ___________
Net Income Tax Due* P ___________
*Note: When the tax due exceeds P2,000.00, the taxpayer may elect to pay in two equal installments, the first installment to shall be paid at the time the return is filed and
the second installment on or before October 15 following the close of the calendar year to the Authorized Agent Bank (AAB) within the jurisdiction of the Revenue
District Office (RDO) where the taxpayer is registered
12) Is the Minimum Corporate Income Tax (MCIT) an addition to the regular or normal income tax?
No, the MCIT is not an additional tax. An MCIT of 2% of the gross income as of the end of taxable year (whether calendar or fiscal year, depending on the
accounting period employed) is imposed on a corporation taxable under Title II of the Tax Code, as amended, beginning on the 4th taxable year immediately
following the taxable year in which such corporation commenced its business operations when the MCIT is greater than the regular income tax. The MCIT is
compared with the regular income tax, which is due from a corporation. If the regular income is higher than the MCIT, then the corporation does not pay the
MCIT but the amount of the regular income tax.
13) Who are covered by MCIT?
The MCIT covers domestic and resident foreign corporations which are subject to the regular income tax. The term “regular income tax” refers to the regular
income tax rates under the Tax Code. Thus, corporations which are subject to a special corporate tax or to preferential rates under special laws do not fall within
the coverage of the MCIT.
For corporations whose operations or activities are partly covered by the regular income tax and partly covered by the preferential rate under special law, the
MCIT shall apply the regular income tax rate on its operations not covered by the tax incentives. Newly established corporations or firms which are on their first
3 years of operations are not covered by the MCIT.
14) When does a corporation start to be covered by the MCIT?
A corporation starts to be covered by the MCIT on the 4th year following the year of the commencement of its business operations. The period of reckoning
which is the start of its business operations is the year when the corporation was registered with the BIR. This rule will apply regardless of whether the
corporation is using the calendar year or fiscal year as its taxable year.
15) When is the MCIT reported and paid? Is it quarterly?
The MCIT is paid on an annual basis and quarterly basis. The rules are governed by Revenue Regulations No. 12-2007.
16) How is MCIT computed?
The MCIT is 2% of the gross income of the corporation at the end of the taxable year.
The computation and the payment of MCIT, shall likewise apply at the time of filing the quarterly corporate income tax as prescribed under Section 75 and
Section 77 of the Tax Code, as amended. Thus, in the computation of the tax due for the taxable quarter, if the computed quarterly MCIT is higher than the
quarterly normal income tax, the tax due to be paid for such taxable quarter at the time of filing the quarterly income tax return shall be the MCIT which is two
percent (2%) of the gross income as of the end of the taxable quarter.
“Gross income” means gross sales less sales returns, discounts and cost of goods sold. Passive income, which have been subject to a final tax at source do not
form part of gross income for purposes of computing the MCIT.
Cost of goods sold includes all business expenses directly incurred to produce the merchandise to bring them to their present location and use.
For trading or merchandising concern, cost of goods sold means the invoice cost of goods sold, plus import duties, freight in transporting the goods to the place
where the goods are actually sold, including insurance while the goods are in transit.
For a manufacturing concern, cost of goods manufactured and sold means all costs of production of finished goods such as raw materials used, direct labor and
manufacturing overhead, freight cost, insurance premiums and other costs incurred to bring the raw materials to the factory or warehouse.
For sale of services, gross income means gross receipts less discounts and cost of services which cover all direct costs and expenses necessarily incurred to
provide the services required by the customers and clients including:
o Salaries and employees benefits of personnel, consultants and specialists directly rendering the service;
o Cost of facilities directly utilized in providing the service such as depreciation or rental of equipment used;
o Cost of supplies
Interest Expense is not included as part of cost of service, except in the case of banks and other financial institutions.
“Gross Receipts” means amounts actually or constructively received during the taxable year. However, for taxpayers employing the accrual basis of accounting,
it means amounts earned as gross income.
17) What is the carry forward provision under the MCIT?
Any excess of the MCIT over the normal income tax may be carried forward and credited against the normal income tax for the three (3) immediately succeeding
taxable years.
18) How would the MCIT be recorded for accounting purposes?
Any amount paid as excess minimum corporate income tax should be recorded in the corporation’s books as an asset under account title “Deferred charges-
MCIT”
19) How long can we amend our income tax return?

There is no prescription period for amending the return. When the taxpayer has been issued a Letter of Authority, he can no longer amend the return.
20) Can a benefactor of a senior citizen claim him/her as additional dependent in addition to his/her 3 qualified dependent children at Php25,000 each?
No, pursuant to Revenue Regulations 2-94, the benefactor of a senior citizen cannot claim the additional exemption. Further, additional exemptions of individual
taxpayers are removed under RA 10963 (Tax Reform for Acceleration and Inclusion).
DESCRIPTION
Capital Gains Tax is a tax imposed on the gains presumed to have been realized by the seller from the sale, exchange, or other disposition of capital assets located in the
Philippines, including pacto de retro sales and other forms of conditional sale.
[return to index]
CAPITAL GAINS TAX FOR ONEROUS TRANSFER OF REAL PROPERTY CLASSIFIED AS CAPITAL ASSETS (TAXABLE AND EXEMPT)
Tax Form
BIR Form 1706 – Final Capital Gains Tax Return (For Onerous Transfer of Real Property Classified as Capital Assets -Taxable and Exempt)
Documentary Requirements
Processing and Issuance of Approved ONETT Computation Sheet (OCS) of Tax Due On Sale of Real Property
and
Processing and Issuance of Electronic Certificate Authorizing Registration (eCAR) for Sale of Real Property/Shares of Stock
(Where Applicant Computed its Own Tax Due)
Mandatory Requirements:
 TIN of Seller/s and Buyer/s ;(One (1) original copy for presentation only)
 Notarized Deed of Absolute Sale/ Deed of Transfer but only photocopied documents shall be retained by BIR; (One (1) original copy and two (2) photocopies)
 Certified True Copy/ies of the Tax Declaration at the time or nearest to the date of the transaction issued by the Local Assessor’s Office for land and
improvement; (One (1) original copy and two (2) photocopies)
 Certified True Copy/ies of Original/ Transfer/ Condominium Certificate/s of Title (OCT/TCT/CCT); (One (1) original copy and two (2) photocopies)
 Duly notarized Special Power of Attorney (SPA) from the transacting party/ies if the person signing is not one of the parties to the Deed of Transfer; (One (1)
original copy and two (2) photocopies)
 Sworn Declaration of No Improvement by at least one (1) of the transferees or Certificate of No Improvement issued by the Assessor’s Office, if applicable;
(One (1) original copy and two (2) photocopies)
 Official Receipt/Deposit Slip and duly validated return as proofs of payment of taxes; (One (1) original copy and two (2) photocopies)
 Secretary’s Certificate or Board Resolution, approving the sale/transfer of the real property and indicating the name and position of the authorized signatory to
the Deed of Sale/Assignment, if the seller/transferor is a corporation. (One (1) original copy and two (2) photocopies)
Other Additional Requirements, if applicable:
 Special Power of Attorney (SPA), if the person transacting/processing the transfer is not a party to the transaction; (One (1) original copy and two (2)
photocopies)
 Certification from the Philippine Consulate or Hague Apostille Convention (if executed abroad); (One (1) original copy and two (2) photocopies)
 Location Plan/Vicinity map if zonal value cannot be readily determined from the documents submitted; (One (1) original copy and two (2) photocopies)
 Certificate of Exemption/BIR Ruling issued by the Commissioner of Internal Revenue or his authorized representative, if tax exempt; (One (1) original copy and
two (2) photocopies)
 Such other documents as may be required by law/rulings/regulations/etc. (One (1) original copy and two (2) photocopies)
For Antedated Sales
 Certified True Copy of Deed of Sale / Assignment / Exchange issued by the Clerk of Court of City/ Municipality or Regional Trial Court (RTC) or the Office of
the Executive Judge of the City/Municipality where the Notary Public is registered or certification of notarization from the National Archives Office. (One (1)
Processing and Issuance of Electronic Certificate Authorizing Registration (eCAR) for Sale of Real Property
(Where Tax Paid is Based on the Approved ONETT Computation Sheet)
Mandatory Requirements for Simple Transactions:
 Tax Returns filed with proof of payment [Revenue Official Receipt or Duly Validated Bank Deposit Slip with Certification from the Authorized Agent Bank
(AAB) which received the tax payment] or Certificate of Tax Exemption; (One (1) original copy and two (2) photocopies)
 ONETT Computation Sheet of Tax Due duly approved by the authorized Revenue Officer; (One (1) original copy and two (2) photocopies)
 Any of the following applicable document if the person presenting is not among the parties to the transaction: (One (1) original copy and two (2) photocopies)
a. Notarized Special Power of Attorney;
b. Secretary's Certificate or Board Resolution;
c. Certification from the Philippine Consulate or Hague Apostille Convention (if executed abroad).
Procedures
 Who shall file

The Capital Gains Tax Return (BIR Form No. 1706) shall be filed in triplicate copies by the Seller/Transferor who are natural or juridical whether resident or non-resident,
including Estates and Trusts, who sell, exchange, or dispose of a real property located in the Philippines classified as capital asset as defined under Sec. 39 (A) (1) of RA
No. 8424. The term “sale” includes pacto de retro sale and other forms of conditional sales. The transaction may be taxable or exempt.
Taxpayers who are filing BIR Form No. 1706 are excluded in the mandatory coverage from using the eBIRForms (Section 2 of RR No. 9-2016)
 When and Where to File and Pay
The Capital Gains Tax Return (BIR Form No. 1706) shall be filed and paid within thirty (30) days following the sale, exchange or disposition of real property, with any
Authorized Agent Bank (AAB) or Revenue Collection Officer (RCO) of the Revenue District Office (RDO) having jurisdiction over the place where the property being
transferred is located.
When the return is filed with an AAB, taxpayer must accomplish and submit BIR-prescribed deposit slip, which the bank teller shall machine validate as evidence that
payment was received by the AAB. The AAB receiving the tax return shall stamp mark the word “Received” on the return and also machine validate the return as proof of
filing the return and payment of the tax by the taxpayer, respectively. The machine validation shall reflect the date of payment, amount paid and transactions code, the
name of the bank, branch code, teller’s code and teller’s initial. Bank debit memo number and date should be indicated in the return for taxpayers paying under the bank
debit system.
Filing and payment may also be made using the electronic filing and payment facilities of the BIR (i.e., EFPS/eBIRForms and G-cash, credit, debit card/prepaid card)
For transactions covered by one (1) Deed of Sale/Exchange/Donation involving one (1) to three (3) properties, the taxpayer can avail of the ‘fast lane’ pursuant to
Revenue Memorandum Circular (RMC) No. 43-2018, as amended by RMC No. 107-2018. Payments amounting to twenty thousand pesos (P 20,000.00) and below shall
be paid in cash while payments above twenty thousand pesos (P 20,000.00) shall be made through Manager’s Check or Cashier’s Check to the RCO of the RDO having
jurisdiction over the place where the property being transferred is located.
Tax Rate
For real property - 6%.
[return to index]
CAPITAL GAINS TAX FOR ONEROUS TRANSFER OF SHARES OF STOCKS NOT TRADED THROUGH THE LOCAL STOCK EXCHANGE
Tax Form
BIR Form 1707 - Capital Gains Tax Return (For Onerous Transfer of Shares of Stocks Not Traded Through the Local Stock Exchange)
Processing and Issuance of Approved ONETT Computation Sheet (OCS) of Tax Due On Sale of Shares of Stocks
and
Processing and Issuance of Electronic Certificate Authorizing Registration (eCAR) for Sale of Shares of Stock
 TIN of Seller/s and Buyer/s; One (1) original copy for presentation only)
 Notarized Deed of Absolute Sale/Document of Transfer but only photocopied documents shall be retained by BIR; (One (1) original copy and two (2)
photocopies)
 Photocopy of stock certificate; (One (1) original copy and two (2) photocopies)
 Proof of acquisition cost (i.e. Deed of Sale; FMV at the time of acquisition); (One (1) original copy and two (2) photocopies)
 Official Receipt/Deposit Slip and duly validated return as proof of payment; (One (1) original copy and two (2) photocopies)
 Duly Notarized Special Power of Attorney (SPA) for the transacting party if the latter is not one of the parties to the Deed of Transfer; (One (1) original copy and
 Secretary’s Certificate or Board Resolution, approving the sale/transfer of the shares of stocks and indicating the name and position of the authorized signatory to
the Deed of Sale/Assignment, if the seller/transferor is a corporation. (One (1) original copy and two (2) photocopies)
 For claiming expenses of sale - Proof of claimed deductions such as official receipt and/or invoices; (One (1) original copy and two (2) photocopies)
 For shares of stocks not listed/not traded - Latest Audited Financial Statement of the issuing corporation with computation of the book value per share; (One (1)
 For shares of stocks listed/traded - Price index from the PSE/latest FMV published in the newspaper at the time of transaction; (One (1) original copy and two (2)
photocopies)
 For club shares - Price published in newspapers on the transaction date or nearest to the transaction date; (One (1) original copy and two (2) photocopies)
photocopies)
Processing and Issuance of Electronic Certificate Authorizing Registration (eCAR) for Sale of Shares of Stocks
Procedures
 Who shall file
The Capital Gains Tax Return (BIR Form No. 1707) shall be filed in triplicate by every natural or juridical person, resident or non-resident, for sale, barter, exchange or
other onerous disposition of shares of stock in a domestic corporation, classified as capital assets, not traded through the local stock exchange.
Taxpayers who are filing BIR Form No. 1707 are excluded in the mandatory coverage from using the eBIRForms (Section 2 of RR No. 9-2016).
The Capital Gains Tax Return (BIR Form No. 1707) shall be filed and paid within thirty (30) days after each sale, barter, exchange or other disposition of shares of stock
not traded through the local stock exchange with any Authorized Agent Bank (AAB) under the jurisdiction of the Revenue District Office (RDO) where the
seller/transferor is required to register.
debit system.
Filing and payment may also be made using the electronic filing and payment facilities of the BIR (i.e., EFPS/eBIRForms and G-cash, credit, debit card/prepaid card)
Tax Rates
Current rate
Taxpayer type Tax rate Legal basis Effectivity date

Individual 15% R.A. No. 10963 or TRAIN Law January 1, 2018 to present
Domestic Corporation
Foreign Corporation 15% R.A. No. 11534 or CREATE Law April 11, 2021 to present
Old rate
Individual Not R.A. No. 8424 or NIRC of 1997 January 1, 1998 to
over ₱100,000.0 December 31, 2017
Domestic Corporation 0 - 5%
On any amount in
excess of
Foreign Corporation ₱100,000.00 - January 1, 1998 to April 10,
10% 2021
[return to index]
ANNUAL CAPITAL GAINS TAX FOR ONEROUS TRANSFER OF SHARES OF STOCKS NOT TRADED THROUGH THE LOCAL STOCK EXCHANGE
Tax Form
BIR Form 1707A - Annual Capital Gains Tax Return (For Onerous Transfer of Shares of Stocks Not Traded Through the Local Stock Exchange)
Procedures
File the Capital Gains Tax return in triplicate (two copies for the BIR and one copy for the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue District
where the seller or transferor of stocks is registered. In places where there are no AAB, the return will be filed directly with the Revenue Collection Officer or Authorized
City or Municipal Treasurer.
Tax Rates
Current rate
Individual 15% R.A. No. 10963 or TRAIN Law January 1, 2018 to present
Foreign Corporation 15% R.A. No. 11534 or CREATE Law April 11, 2021 to present
Old rate
Individual Not R.A. No. 8424 or NIRC of 1997 January 1, 1998 to
over ₱100,000.0 December 31, 2017
On any amount in
excess of
Foreign Corporation ₱100,000.00 - January 1, 1998 to April 10,
10% 2021
Deadline
 For Individual Taxpayers - On or before April 15 of each year covering all stock transactions of the preceding taxable year
 For Corporate Taxpayers - On or before the fifteenth (15) day of the fourth (4th) month following the close of the taxable year covering all transactions of the
preceding taxable year
[return to index]
RELATED REVENUE ISSUANCES
Revenue Regulations (RR) Nos. 2-1998, 8-1998, 4-1999, 13-1999, 7-2003, 17-2003, 30-2003, 4-2008, 6-2008, 5-2009, 6-2013, 6-2014, 11-2018, 2-2021, 5-2021
Revenue Memorandum Order (RMO) No. 15-2003

Revenue Memorandum Circular (RMC) No. 50-2003, 43-2018, 107-2018
OPM-AS-APMD 2017-06-06
[return to index]
CODAL REFERENCE
o Section 7 of Republic Act (RA) No. 11534 or Corporate Recovery and Tax Incentives for Enterprises Act (CREATE Law) amending Section 28 of the National
Internal Revenue Code (NIRC) of 1997, as amended
o Sections 5 and 7 of Republic Act (RA) No. 10963 (Tax Reform Acceleration and Inclusion (TRAIN) Law), amending Sections 24 (C) and 27 (D) (2) of National
Internal Revenue Code (NIRC) of 1997, respectively
o Sec. 24 (C), Sec. 24 (D), Sec. 27 (D) (2), Sec. 27 (D) (5), Sec. 28 (A) (7) (c), Sec. 28 (B) (5) (c) and Sec. 39 (A) of the NIRC of 1997
[return to index]
FREQUENTLY ASKED QUESTIONS
1.) What is meant by capital asset?
Capital assets shall refer to all real properties held by a taxpayer, whether or not connected with his trade or business, and which are not included among the real
properties considered as ordinary assets under Sec. 39(A)(1) of the Code. [Sec. 2(a) of RR No. 7-2003]
2.) What is meant by ordinary asset?
Ordinary assets shall refer to all real properties specifically excluded from the definition of capital assets under Sec. 39(A)(1) of the Code, namely:
1. Stock in trade of a taxpayer or other real property of a kind which would properly be included in the inventory of the taxpayer if on hand at the close of the
taxable year; or
2. Real property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business; or
3. Real property used in trade or business (i.e., buildings and/or improvements) of a character which is subject to the allowance for depreciation provided for under
Sec. 34(F) of the Code; or
4. Real property used in trade or business of the taxpayer.
Real properties acquired by banks through foreclosure sales are considered as ordinary assets. [Sec. 2(b) of RR No. 7-2003]
3.) What is meant by "Stock classified as Capital Asset"?
“Stock Classified as “Capital Asset” means all stocks and securities held by taxpayers other than dealers in securities. [Sec. 2(a) of RR No. 6-2008]
4.) What is meant by "Dealer in Securities"?
“Dealer in Securities” refers to a merchant of stocks or securities, whether an individual, partnership or corporation, with an established place of business, regularly
engaged in the purchase of securities and the resale thereof to customers; that is one, who as merchant buys securities and re-sells them to customers with a view to the
gains and profits that may be derived therefrom. "Dealer in securities" means any person who buys and sells securities for his/her own account in the ordinary course of
business (Sec. 3.4, SRC). [Sec. 2(b) of RR No. 6-2008]
5.) What is meant by real property?
Real property shall have the same meaning attributed to that term under Article 415 of Republic Act No. 386, otherwise known as the Civil Code of the Philippines. [Sec.
2(c) of RR No. 7-2003]
6.) What does a real estate dealer refer to?
A real estate dealer shall refer to any person engaged in the business of buying and selling or exchanging real properties on his own account as a principal and holding
himself out as a full or part-time dealer in real estate. [Sec. 2(d) of RR No. 7-2003]
7.) What does a real estate developer refer to?
Real estate developer shall refer to any person engaged in the business of developing real properties into subdivisions, or building houses on subdivided lots, or
constructing residential or commercial units, townhouses and other similar units for his own account and offering them for sale or lease. [Sec. 2(e) of RR No. 7-2003]
8.) What does a real estate lessor refer to?

Real estate lessor shall refer to any person engaged in the business of leasing or renting real properties on his own account as a principal and holding himself out as a
lessor of real properties being rented out or offered for rent. [Sec. 2(f) of RR No. 7-2003]
9.) Who are considered engaged in the real estate business?
Taxpayers who are considered engaged in the real estate business shall refer collectively to real estate dealers, real estate developers and/or real estate lessors. A taxpayer
whose primary purpose of engaging in business, or whose Articles of Incorporation states that its primary purpose is to engage in the real estate business shall be deemed
to be engaged in the real estate business. [Sec. 2(g) of RR No. 7-2003]
10.) Who are considered not engaged in the real estate business?
“Taxpayers not engaged in the real estate business” refer to persons other than real estate dealers, real estate developers and/or real estate lessors. [Sec. 2(g) of RR No. 7-
2003]
11.) Who are considered habitually engaged in the real estate business?
Real estate dealers or real estate developers who are registered with the Housing and Land Use Regulatory Board (HLURB) or HUDCC. If the taxpayer is not registered
with the HLURB or HUDCC as a real estate dealer or developer, he/it may nevertheless be deemed to be engaged in the real estate business through the establishment of
substantial relevant evidence (such as consummation during the preceding year of at least six (6) taxable real estate sale transactions, regardless of amount; registration as
habitually engaged in real estate business with the Local Government Unit or the Bureau of Internal Revenue, etc.). However, banks shall not be considered as habitually
engaged in the real estate business for purposes of determining the applicable rate of withholding tax imposed under Sec. 2.57.2(J) of RR No. 2-98, as amended. [Sec. 3(a)
(4) of RR No. 7-2003]
12.) How can you determine whether a particular real property is a capital asset or an ordinary asset?
a) “Real properties shall be classified with respect to taxpayers engaged in the real estate business as follows:
i) All real properties acquired by the real estate dealer shall be considered as ordinary assets.
ii) All real properties acquired by the real estate developer, whether developed or undeveloped as of the time of acquisition, and all real properties which are held by the
real estate developer primarily for sale or for lease to customers in the ordinary course of his trade or business or which would properly be included in the inventory of the
taxpayer if on hand at the close of the taxable year and all real properties used in the trade or business, whether in the form of land, building, or other improvements, shall
be considered as ordinary assets.
iii) All real properties of the real estate lessor, whether land, building and/or improvements, which are for lease/rent or being offered for lease/rent, or otherwise for use or
being used in the trade or business shall likewise be considered as ordinary assets.
iv) All real properties acquired in the course of trade or business by a taxpayer habitually engaged in the sale of real property shall be considered as ordinary assets. A
property purchased for future use in the business, even though this purpose is later thwarted by circumstances beyond the taxpayer’s control, does not lose its character as
an ordinary asset. Nor does a mere discontinuance of the active use of the property change its character previously established as a business property.” [Sec. 3(a) of RR
No. 7-2003]
b) In the case of taxpayer not engaged in the real estate business, real properties, whether land, building, or other improvements, which are used or being used or have
been previously used in trade or business of the taxpayer shall be considered as ordinary assets. [Sec. 3(b) of RR No. 7-2003]
c) In the case of taxpayers who changed its real estate business to a non-real estate business, real properties held by these taxpayers shall remain to be treated as ordinary
assets. [Sec. 3(c) of RR No. 7-2003]
d) In the case of taxpayers who originally registered to be engaged in the real estate business but failed to subsequently operate, all real properties acquired by them shall
continue to be treated as ordinary assets. [Sec. 3(d) of RR No. 7-2003]
e) Real properties formerly forming part of the stock in trade of a taxpayer engaged in the real estate business, or formerly being used in the trade or business of a taxpayer
engaged or not engaged in the real estate business, which were later on abandoned and became idle, shall continue to be treated as ordinary assets. Provided however, that
properties classified as ordinary assets for being used in business by a taxpayer engaged in business other than real estate business are automatically converted into capital
assets upon showing of proof that the same have not been used in business for more than two (2) years prior to the consummation of the taxable transactions involving
said properties. [Sec. 3(e) of RR No. 7-2003]
f) “Real properties classified as capital or ordinary asset in the hands of the seller/transferor may change their character in the hands of the buyer/transferee. The
classification of such property in the hands of the buyer/transferee shall be determined in accordance with the following rules:
i) Real property transferred through succession or donation to the heir or donee who is not engaged in the real estate business with respect to the real property inherited or
donated, and who does not subsequently use such property in trade or business, shall be considered as a capital asset in the hands of the heir or donee.
ii) Real property received as dividend by the stockholders who are not engaged in the real estate business and who do not subsequently use such real property in trade or
business, shall be treated as a capital asset in the hands of the recipients even if the corporation which declared the real property dividends is engaged in real estate
business.
iii)The real property received in an exchange shall be treated as ordinary asset in the hands of the transferee in the case of a tax-free exchange by taxpayer not engaged in
real estate business to a taxpayer who is engaged in real estate business, or to a taxpayer who, even if not engaged in real estate business, will use in business the property
received in the exchange.” [Sec. 3(f) of RR No. 7-2003]
g) In the case of involuntary transfers of real properties, including expropriations or foreclosure sale, the involuntariness of such sale shall have no effect on the
classification of such real property in the hands of the involuntary seller, either as capital asset or ordinary asset as the case may be. [Sec. 3(g) of RR No. 7-2003]
13.) What is the basis in the valuation of real property?
The value of the real property will be based on the selling price, fair market value or zonal value as determined by the Commissioner of Internal Revenue or the fair
market value as shown in the schedule of values of the Provincial or City Assessor, whichever is higher.
If there is no zonal value, the taxable base shall be the gross selling price per sales documents or the fair market value that appears in the latest tax declaration, whichever
is higher.
If there is an improvement, the FMV, based on the latest tax declaration at the time of the sale or disposition, duly certified by the City/Municipal Assessor shall be used.
No adjustments shall be added on the said value, provided that the tax declaration bears the upgraded fair market value of the said property pursuant to Section 219 of
Republic Act No. 7160, otherwise known as the Local Government Code of 1991 and the last paragraph of the Local Assessment Regulations No. 1-92 dated October 6,
1992.
However, in case the tax declaration presented was issued three (3) or more years prior to the date of sale or disposition of the real property, the seller/transferor shall be
required to submit a certification from the City/Municipal Assessor whether or not the same is still the latest tax declaration covering the said real property. Otherwise, the
taxpayer shall secure its latest tax declaration and shall submit a copy thereof duly certified by the said Assessor. (RAMO 1-2001)
14.) What is meant by "Net Capital Gains"?
"Net Capital Gains" means the excess of the gains from sales or exchanges of capital assets over the losses from such sales or exchanges. [Sec 2(o) of RR 6-2008]
15.) What are the rules for the determination of amount and recognition of gain or loss in the sale, barter, or exchange of shares of stock not traded through the
Local Stock exchange?
A. “Determination of Selling Price. — In determining the selling price, the following rules shall apply:
a.1) In the case of cash sale, the selling price shall be the total consideration per deed of sale.
a.2) If the total consideration of the sale or disposition consists partly in money and partly in kind, the selling price shall be sum of money and the fair market value of the
property received.
a.3) In the case of exchange, the selling price shall be the fair market value of the property received.” [Sec. 7 (c) (c.1) RR No. 6-2008]
a.4) “Where property, other than real property referred to in Section 24(D), is transferred for less than an adequate and full consideration in money or money's worth, then
the amount by which the fair market value of the property exceeded the value of the consideration shall be deemed a gift, and shall be included in computing the amount
of gifts made during the calendar year: Provided, however, that a sale, exchange, or other transfer of property made in the ordinary course of business (a transaction which
is a bona fide, at arm’s length, and free from any donative intent) will be considered as made for an adequate and full consideration in money’s worth.” (Sec. 16, RR No.
12-2018)
B.) Definition of "fair market value" of the Shares of Stock.
b.1) “In the case of listed shares which were sold, transferred or exchanged outside of the trading system and/or facilities of the Local Stock Exchange, the closing price
on the day when the shares are sold, transferred, or exchanged. When no sale is made in the Local Stock Exchange on the day when the Listed shares are sold, transferred,
or exchanged, the closing price on the day nearest to the date of sale, transfer or exchange of the shares shall be the fair market value.” [Sec. 7 (c.2.1) RR No. 6-2008]
b.2) “In the case of shares of stock not listed and traded in the local stock exchanges, the value of the shares of stock at the time of sale shall be the fair market value. In
determining the value of the shares, the Adjusted Net Asset Method shall be used whereby all assets and liabilities are adjusted to fair market values. The net of adjusted
asset minus the liability values is the indicated value of the equity.
The appraised value of real property at the time of sale shall be the higher of –
1. The fair market value as determined by the Commissioner of Internal Revenue, or

2. The fair market value as shown in the schedule of valued fixed by the Provincial and City Assessors, or
3. The fair market value as determined by Independent Appraiser.” (Sec. 2, RR No. 6-2013)
b.3) In the case of a unit of participation in any association, recreation or amusement club (such as golf, polo, or similar clubs), the fair market value thereof shall be its
selling price or the bid price nearest published in any newspaper or publication of general circulation, whichever is higher. [Sec. 7 (c.2.3) RR No. 6-2008]
C.) Determination of Gain or Loss from Sale or Disposition of Shares of Stock. — The gain from the sale or other disposition of Shares of Stock. — The gain from the
sale or other disposition of shares of stock shall be the excess of the amount realized therefrom over the basis or adjusted basis for determining gain, and the loss shall be
the excess of the basis or adjusted basis for determining loss over the amount realized. The amount realized from the sale or other disposition of property shall be the sum
of money received plus the fair market value of the property (other than money) received, if any. [Sec. 7 (c.3) RR No. 6-2008]
16.) What are the applicable tax rates of Capital Gains Tax (CGT) under the National Internal Revenue Code of 1997, as amended by Republic Act No. 10963/
TRAIN Law?
A. For Real Properties – Six percent (6%)
B. For Shares of Stocks Not Traded in the Stock Exchange:

Current rate
Individual 15% R.A. No. 10963 or January 1, 2018 to present
TRAIN Law
Foreign Corporation 15% R.A. No. 11534 or April 11, 2021 to present
CREATE Law
Old rate
Individual Not R.A. No. 8424 or January 1, 1998 to
over ₱100,000.0 NIRC of 1997 December 31, 2017
On any amount in
Foreign Corporation excess of January 1, 1998 to April
₱100,000.00 - 10, 2021
10%
17.) Who/what are considered exempt from the payment of Final Capital Gains Tax?
 Dealer in securities, regularly engaged in the buying and selling of securities

 An entity exempts from the payment of income tax under existing investment incentives and other special laws
 An individual or non-individual exchanging real property solely for shares of stocks resulting in corporate control
 A government entity or government-owned or controlled corporation selling real property
 If the disposition of the real property is gratuitous in nature
 Where the disposition is pursuant to the CARP law
18.) Who are conditionally exempt from the payment of Final Capital Gains Tax?
Natural persons who dispose their principal residence, provided that the following criteria are met:
 The proceeds of the sale of the principal residence have been fully utilized in acquiring or constructing new principal residence within eighteen (18) calendar
months from the date of sale or disposition;
 The historical cost or adjusted basis of the real property sold or disposed will be carried over to the new principal residence built or acquired;
 The Commissioner of Internal Revenue has been duly notified, through a prescribed return, within thirty (30) days from the date of sale or disposition of the
person’s intention to avail of the tax exemption;
 Exemption was availed only once every ten (10) years;
 In case there is no full utilization of the proceeds of sale or disposition, the portion of the gain presumed to have been realized from the sale or disposition will be
subject to Capital Gains Tax.
 In case of sale/transfer of principal residence, the Buyer/Transferee shall withhold from the seller and shall deduct from the agreed selling price/consideration the
6% capital gains tax which shall be deposited in cash or manager’s check in interest-bearing account with an Authorized Agent Bank (AAB) under an Escrow
Agreement between the concerned Revenue District Officer, the Seller and the Transferee, and the AAB to the effect that the amount so deposited, including its
interest yield, shall only be released to such Transferor upon certification by the said RDO that the proceeds of the sale/disposition thereof has, in fact, been
utilized in the acquisition or construction of the Seller/Transferor’s new principal residence within eighteen (18) calendar months from date of the said sale or
disposition. The date of sale or disposition of a property refers to the date of notarization of the document evidencing the transfer of said property. In general, the
term “Escrow” means a scroll, writing or deed, delivered by the grantor, promisor or obligor into the hands of a third person, to be held by the latter until the
happening of a contingency or performance of a condition, and then by him delivered to the grantee, promise or obligee.
19.) What is an Electronic Certificate Authorizing Registration (eCAR)?
The eCAR is an electronically generated Certificate Authorizing Registration issued by the Commissioner or his duly authorized representative attesting that the transfer
and conveyance of land, buildings/improvements or shares of stock arising from sale, barter or exchange have been reported and the taxes due inclusive of the
documentary stamp tax, have been fully paid.
20.) What is Electronic Certificate Authorizing Registration System (eCAR System)?
The eCAR System is a stand-alone system developed and owned by the BIR for the automated creation of eCAR which is the basis for transferring the real and personal
properties from the transferor to the transferee after payment of the correct taxes and other dues that allows monitoring through audit trails and generated reports.
21.) Are manually issued Certificate Authorizing Registration (CAR) that are outstanding and not yet presented to the Registry of Deeds (RD) still valid?
All manually issued CARs that are outstanding and not yet presented to the RD are no longer valid. The said CARs shall be replaced with an eCAR by the concerned
Revenue District Offices or Large Taxpayers Divisions. For CAR involving multiple properties in which some of the properties are already transferred in RD, only those
untransferred property/ies shall be issued with an eCAR.
A certification fee shall be charged for each released eCAR issued/reprinted after affixture of Thirty Pesos (P30.00) Documentary Stamp Tax (DST) on Certificates (RA
10963 or TRAIN Law) and the prescribed Certification Fee of One Hundred Pesos (P100.00) under Executive Order No. 197 to the taxpayer/authorized representative.
Description
Documentary Stamp Tax is a tax on documents, instruments, loan agreements and papers evidencing the acceptance, assignment, sale or transfer of an obligation, right or
property incident thereto.
[return to index]
Tax Forms
BIR Form 2000 (Documentary Stamp Tax Declaration Return);
BIR Form 2000-OT Documentary Stamp Tax Declaration Return (One- Time Transactions)
[return to index]
Mandatory
1. Photocopy of the document to which the documentary stamp shall be affixed

2. Proof of exemption under special laws, if applicable;
3. Proof of payment of documentary stamp tax paid upon the original issue of the stock, if applicable.
[return to index]
Tax Rates
Tax Document Taxable Unit Tax Due Per Unit % of Unit Taxable Base
Code
Section
174 Original Issue of Shares P200.00 or fraction 2.00 1% Par value of shares of
of Stock with par value thereof stocks
Original Issue of Shares 2.00 Actual consideration for the issuance of

of Stock without par P200.00 or fraction thereof 1% shares of stocks
value Actual value
2.00 represented by each share
Stock Dividend
P200.00 or fraction thereof 1%
175 Sales, Agreements to P200.00 or fraction 1.50 0.75% Par value of such stock
Sell, Memoranda of thereof
Sales, Deliveries 50%
or Transfer of Shares
or Certificates of
Stock
DST paid upon the original issuance of
said stock.
Stock without par value

176 Bonds, Debentures, P200.00 or fraction thereof .75 .375% Par value of such bonds, debentures,
Certificate of Stock or Certificate of Stock or Indebtedness
Indebtedness issued in
foreign Countries
177 Certificate of Profits or P200.00 or fraction thereof 1.00 .5% Face value of such certificates /
Interest in Property or memorandum
Accumulation
178 Bank Checks, Drafts, On each Document 3.00
Certificate of Deposit
not bearing interest and
other Instruments
179 All Debt Instruments P200.00 or fraction thereof 1.50 .75% Issue price of any such debt instruments
or a fraction of 365 days for instrument
with term of less than 1 year
180 All Bills of Exchange or P200.00 or fraction thereof .60 .3% Face value of any such bill of exchange or
Drafts draft
181 Acceptance of Bills of P200.00 or fraction thereof .60 .3% Face value of such bill of exchange or
Exchange or order for order or the Philippine equivalent of such
the payment of money value, if expressed in foreign currency
purporting to be drawn
in a foreign country
but payable in the
Philippines
182 Foreign Bills of P200.00 or fraction thereof .60 .3% Face value of such bill of exchange or
Exchange and Letters of letter of credit or the Philippine
Credit equivalent of such value, if expressed in
foreign currency
183 Life Insurance Policies If the amount of insurance exempt Amount of Insurance
does not exceed P100,000.00
If the amount of insurance 20.00 Amount of Insurance

exceeds P100,000.00 but does
not exceed P300,000.00



not exceed P1,000,000.00
exceeds P1,000,000.00
184 Policies Of Insurance P4.00 premium or fraction .50 12.5% Premium charged
upon Property thereof
185 Fidelity Bonds and other P4.00 premium or fraction .50 12.5% Premium charged
Insurance Policies thereof
186 Policies of Annuities or P200.00 or fraction thereof 1.00 .5% Premium or installment payment or
other instruments contract price collected
P200.00 or fraction thereof .40 .20% Premium or contribution collected

Pre-Need Plans
187 Indemnity Bonds P4.00 or fraction thereof .30 7.5% Premium charged
188 Certificates of Damage Each Certificate 30.00
or otherwise and
Certificate or
document issued by
any customs officers,
marine surveyor, notary
public and certificate
required by law or by
rules and regulations of
a public office
189 Warehouse Receipts Each Receipt 30.00
(except if value does not
exceed P200.00)
190 Jai-alai, Horse Race P1.00 and below cost of .20 20% Cost of the ticket
Tickets, lotto or Other ticket
Authorized
Number Games Cost of the ticket
Additional P0.20 on every
P1.00 or fraction thereof if
cost of ticket exceeds P1.00
191 Bills of Lading or If the value of such goods 2.00 Value of such goods
Receipts(except charter exceeds P100.00 and does not
party) exceed P1,000.00
20.00 Value of such goods

If the value exceeds
P1,000.00
Exempt
Freight tickets covering
goods, merchandise or effects
carried as accompanied
baggage of passengers on
land and water carriers
primarily engaged in the
transportation of passengers
192 Proxies (except proxies Each proxy 30.00
issued affecting the
affairs of associations
or corporations,
organized for religious,
charitable or literary
purposes)
193 Powers of Attorney Each Document 10.00
(except acts connected
with the collection of
claims due from or
accruing to the
Government of
the Republic of the
Philippines, or the
government of any
province, city or
Municipality)
194 Leases and other Hiring First 2,000 or fractional part 6.00 .3%
agreements or thereof
memorandum or
contract for hire, use or
rent of any lands or 2.00 .2%
tenements or portions For every P1,000 or fractional
thereof part thereof in excess of
the first P2,000 for each
year of the term of the said
contract or agreement
195 Mortgage or Pledge of First 5,000 40.00 .8% Amount Secured
lands, estate, or property
and Deeds of Trust
On each P5,000 or fractional 20.00 .4% Amount Secured
part thereof in excess of
5,000
196 Deed of Sale, First 1,000 15.00 1.5% Consideration or Fair Market Value,
Conveyances, whichever is higher (if government is a
Donations of party, basis shall be the consideration)
Real Property (except
grants, patents or
original certificate of Consideration or Fair Market Value,
adjudication issued by For each additional P1,000 or 15.00 1.5% whichever is higher (if government is a
the government) fractional part thereof in party, basis shall be the consideration)
excess of P1,000
197 Charter parties and Charter parties and similar
Similar Instruments instruments if gross tonnage
of the ship, vessel or steamer
is:
1st 6 months P1,000.00 Registered gross tonnage
1,000 tons and below In excess + P 100.00
1st 6 months P2,000.00

In excess + P200.00 Registered gross tonnage
1,001 to 10,000 tons
1st 6 months P3,000

In excess + 300
Registered gross tonnage

Over 10,000 tons
198 Stamp Tax on At the same rate as that
Assignments and imposed on the original
Renewals or instrument.
Continuance of
Certain Instruments
[return to index]
Procedures
 BIR FORM 2000 - (DOCUMENTARY STAMP TAX DECLARATION RETURN)
Who Shall File
The return shall be filed in triplicate by the following:
1. In the case of constructive affixture of documentary stamps, by the person making, signing, issuing, accepting, or transferring documents, instruments, loan agreements
and papers, acceptances, assignments, sales and conveyances of the obligation, right or property incident thereto wherever the document is made, signed, issued, accepted
or transferred when the obligation or right arises from Philippine sources or the property is situated in the Philippines at the same time such act is done or transaction had;
2. In the case of Electronic Documentary Stamp Tax (eDST) System user, by the taxpayers belonging to the industries mandated to use the web-based eDST System in the
payment/remittance of DST liabilities and the affixture of the prescribed documentary stamp on taxable documents and taxpayers who, at their option, choose to pay the
DST liabilities thru the eDST System pursuant to Revenue Regulations (RR) No. 7-2009; and
3. By a revenue collection agent for remittance of sold loose documentary stamps.

Whenever one party to the taxable document enjoys exemption from the tax herein imposed, the other party thereto who is not exempt shall be the one directly liable for
the tax.
When and Where to File
The return shall be filed within five (5) days after the close of the month when the taxable document was made, signed, issued, accepted or transferred or upon remittance
by revenue collection agents of collection from the sale of loose documentary stamps.
The return shall be filed with the Authorized Agent Bank (AAB) within the territorial jurisdiction of the Revenue District Office where the residence or place of business
of the taxpayer is located or where the collection agent is assigned. In places where there are no AABs, the return shall be filed directly with the Revenue Collection
Officer (RCO) within the Revenue District Office which has jurisdiction over the residence or place of business of the taxpayer or where the collection agent is assigned.
When and Where to Pay
Upon filing of this return, the total amount payable shall be paid to the AAB where the return is filed within five (5) days after the close of the month when the taxable
document was made. In places where there are no AABs, the tax shall be paid with the Revenue Collection Officer who shall issue an Electronic Revenue Official Receipt
(eROR) therefor.
debit system.
For eDST System User
Prior to the enrollment in the eDST System, taxpayers availing thereof, whether on the mandatory or optional basis, shall be duly enrolled under the BIR Electronic Filing
and Payment System (eFPS). In paying the DST liabilities, BIR Form No. 2000 shall be filed and the amount due thereon shall be paid thru the eFPS for taxpayers and
PhilPass Facility of the Bangko Sentral ng Pilipinas for banks (AABs and non-AABs).
For eFPS Taxpayer
The deadline for electronically filing and paying the taxes due thereon shall be in accordance with the provisions of existing applicable revenue issuances.
 BIR FORM 2000-OT DOCUMENTARY STAMP TAX DECLARATION RETURN (ONE-TIME TRANSACTIONS)
Who Shall File
The return shall be filed in triplicate by the person making, signing, issuing, accepting or transferring the document or facility evidencing transaction pertaining to the
following:
1. Sales, or agreements to sell, or memoranda of sale, or deliveries, or transfer of shares or certificates of stock in any association, company, or corporation, or transfer of
such securities by assignment in blank, or by delivery, or by any paper or agreement, or memorandum or other evidences of transfer or sale whether entitling the holder in
any manner to the benefit of such stock, or to secure the future payment of money, or for the future transfer of any stock, there shall be collected a documentary stamp tax
of One peso and fifty centavos (P1.50) on each Two hundred pesos (P200) or fractional part thereof, of the par value of such due-bill, certificate of obligation or stock;
Provided, That only one tax shall be collected on each sale or transfer of stock from one person to another, regardless of whether or not a certificate of stock is issued,
indorsed, or delivered in pursuance of such sale or transfer: and Provided, further, That in the case of stock without par value the amount of documentary stamp tax herein
prescribed shall be equivalent to fifty percent (50%) of the documentary stamp tax paid upon the original issue of said stock.
2. Conveyances, donations, deeds, instruments, or writings, other than grants, patents or original certificates of adjudication issued by the Government, whereby any land,
tenement, or other realty sold shall be granted, assigned, transferred, donated or otherwise conveyed to the purchaser, or purchasers, or to any other person or persons
designated by such purchaser or purchasers or donee, there shall be collected a documentary stamp tax, at the rates herein below prescribed, based on the consideration
contracted to be paid for such realty or on its fair market value determined in accordance with Section 6(E) of this Code, whichever is higher: Provided, That when one of
the contracting parties is the Government, the tax herein imposed shall be based on the actual consideration.
Whenever one party to the taxable document enjoys exemption from the tax herein imposed, the other party thereto who is not exempt shall be the one directly
liable for the tax.
When and Where to File and Pay
The return shall be filed and the tax paid within five (5) days after the close of the month when the taxable document was made, signed, issued, accepted or transferred.
The return shall be filed with and the tax paid to the Authorized Agent Bank (AAB) within the territorial jurisdiction of Revenue District Office (RDO) where the
seller/transferor/donor is required to be registered or where the property is located in case of sale of real property.
filing the return and payment of the tax by the taxpayer, respectively.
The machine validation shall reflect the date of payment, amount paid and transactions code, the name of the bank, branch code, teller’s code and teller’s initial. Bank
debit memo number and date should be indicated in the return for taxpayers paying under the bank debit system.
Payments may also be made thru the epayment channels of AABs or online facility, credit/debit/prepaid cards, and mobile payments.
Payments amounting to twenty thousand pesos (P 20,000.00) and below shall be paid in cash while payments above twenty thousand pesos (P 20,000.00) shall be made
through Manager’s Check or Cashier’s Check to the Revenue Collection Officer of the RDO concerned.
[return to index]
Revenue Regulations (RR) Nos. 9-2000, 6-2001, 13-2004, 7-2009, 6-2014, 4-2018
Revenue Memorandum Order (RMO) Nos. 8-1998, 15-2001, 13-2008, 14-2008
Revenue Memorandum Circular (RMC) Nos. 1-2010, 24-2010, 51-2010, 24-2011, 46-2014, 3-2018
[return to index]
Codal Reference
Secs. 51 to 70 of Republic Act No. 10963 of the Tax Reform for Acceleration and Inclusion (TRAIN) Law
Sec. 173 to Sec. 201 of the National Internal Revenue Code (NIRC)
[return to index]
1) What are the documents/ papers not subject to Documentary Stamp Tax?
Under Section 9 of Revenue Regulations No. 13-2004, the following documents and papers are not subject to DST:
 Policies of insurance or annuities made or granted by a fraternal or beneficiary society, order, association or cooperative company, operated on the lodge system
or local cooperation plan and organized and conducted solely by the members thereof for the exclusive benefit of each member and not for profit
 Certificates of oaths administered by any government official in his official capacity or acknowledgement by any government official in performance of his
official duty
 Written appearance in any court by any government official in his official capacity
 Certificates of the administration of oaths to any person as to the authenticity of any paper required to be filed in court by any person or party thereto, whether the
proceedings be civil or criminal
 Papers and documents filed in court by or for the national, provincial, city or municipal governments
 Affidavits of poor persons for the purpose of proving poverty
 Statements and other compulsory information required of persons or corporations by the rules and regulations of the national, provincial, city or municipal
government exclusively for statistical purposes and which are wholly for the use of the Bureau or office in which they are filed, and not at the instance or for the
use or benefit of the person filing them
 Certified copies and other certificates placed upon documents, instruments and papers for the national, provincial, city or municipal governments made at the
instance and for the sole use of some other branch of the national, provincial, city or municipal governments
 Certificates of the assessed value of lands, not exceeding P200 in value assessed, furnished by the provincial, city or municipal Treasurer to applicants for
registration of title to land
 Borrowing and lending of securities executed under the Securities Borrowing and Lending Program of a registered exchange, or in accordance with regulations
prescribed by the appropriate regulatory authority: Provided, however, That any borrowing or lending of securities agreement as contemplated hereof shall be
duly covered by a master securities borrowing and lending agreement acceptable to the appropriate regulatory authority, and which agreement is duly registered
and approved by the Bureau of Internal Revenue (BIR)
 Loan agreements or promissory notes, the aggregate of which does not exceed Two hundred fifty thousand pesos (P250,000), or any such amount as may be
determined by the Secretary of Finance, executed by an individual for his purchase on installment for his personal use or that of his family and not for business or
resale, barter or hire of a house, lot, motor vehicle, appliance or furniture: Provided, however, That the amount to be set by the Secretary of Finance shall be in
accordance with a relevant price index but not to exceed ten percent (10%) of the current amount and shall remain in force at least for three (3) years
 Sale, barter or exchange of shares of stock listed and traded through the local stock exchange (R.A 9648)
 Assignment or transfer of any mortgage, lease or policy of insurance, or the renewal or continuance of any agreement, contract, charter, or any evidence of
obligation or indebtedness, if there is no change in the maturity date or remaining period of coverage from that of the original instrument.
 Fixed income and other securities traded in the secondary market or through an exchange.
 Derivatives: Provided, that for purposes of this exemption, repurchase agreements and reverse repurchase agreements shall be treated similarly as derivatives
 Inter-branch or interdepartmental advances within the same legal entity
 All forbearances arising from sales or service contracts including credit card and trade receivables: Provided, That the exemption be limited to those executed by
the seller or service provider itself.
 Bank deposit accounts without a fixed term or maturity
 All contracts, deeds, documents and transactions related to the conduct of business of the Bangko Sentral ng Pilipinas
 Transfer of property pursuant to Section 40(C)(2) of the National Internal Revenue Code of 1997, as amended
 Inter-bank call loans with maturity of not more than seven (7) days to cover deficiency in reserves against deposit liabilities, including those between or among
banks and quasi-banks
Further, Section 20 of RR No. 4-2018 exempts from DST the following donations or gifts that are exempt from donor’s tax:
a. Gifts Made by a Resident:
 Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political
subdivision of the said Government; and
 Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited nongovernment organization, trust or
philanthropic organization or research institution or organization: Provided, however, that not more than thirty percent (30%) of said gifts shall be used by such
donee for administration purposes. For the purpose of this exemption, a 'non-profit educational and/or charitable corporation, institution, accredited
nongovernment organization, trust or philanthropic organization and/or research institution or organization' is a school, college or university and/or charitable
corporation, accredited nongovernment organization, trust or philanthropic organization and/or research institution or organization, incorporated as a non-stock
entity, paying no dividends, governed by trustees who receive no compensation, and devoting all its income, whether students' fees or gifts, donation, subsidies
or other forms of philanthropy, to the accomplishment and promotion of the purposes enumerated in its Articles of Incorporation.
b. Gifts Made by a Non-resident not a Citizen of the Philippines:
 Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political
subdivision of the said Government; and
 Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited nongovernment organization, trust or
philanthropic organization or research institution or organization: Provided, however, that not more than thirty percent (30%) of said gifts shall be used by such
donee for administration purposes.
2) Where is the Documentary Stamp Tax Declaration Return filed?
In the Authorized Agent Bank (AAB) within the territorial jurisdiction of the RDO which has jurisdiction over the residence or principal place of business of the taxpayer
or where the property is located in case of sale of real property or where the Collection Agent is assigned. In places where there is no Authorized Agent Bank, the return
will be filed with the Revenue Collection Officer or duly authorized City or Municipal Treasurer where the taxpayer's residence or principal place of business is located or
where the property is located in case of sale of real property or where the Collection Agent is assigned.
3) What are the documents/papers not subject to Documentary Stamp Tax?
 Policies of insurance or annuities made or granted by a fraternal or beneficiary society, order, association or cooperative company, operated on the lodge system
or local cooperation plan and organized and conducted solely by the members thereof for the exclusive benefit of each member and not for profit
 Certificates of oaths administered by any government official in his official capacity or acknowledgement by any government official in performance of his
official duty
 Written appearance in any court by any government official in his official capacity
 Certificates of the administration of oaths to any person as to the authenticity of any paper required to be filed in court by any person or party thereto, whether the
proceedings be civil or criminal
 Papers and documents filed in court by or for the national, provincial, city or municipal governments
 Affidavits of poor persons for the purpose of proving poverty
 Statements and other compulsory information required of persons or corporations by the rules and regulations of the national, provincial, city or municipal
government exclusively for statistical purposes and which are wholly for the use of the Bureau or office in which they are filed, and not at the instance or for the
use or benefit of the person filing them
 Certified copies and other certificates placed upon documents, instruments and papers for the national, provincial, city or municipal governments made at the
instance and for the sole use of some other branch of the national, provincial, city or municipal governments
 Certificates of the assessed value of lands, not exceeding P200 in value assessed, furnished by the provincial, city or municipal Treasurer to applicants for
registration of title to land
 Borrowing and lending of securities executed under the Securities Borrowing and Lending Program of a registered exchange, or in accordance with regulations
prescribed by the appropriate regulatory authority: Provided, however, That any borrowing or lending of securities agreement as contemplated hereof shall be
duly covered by a master securities borrowing and lending agreement acceptable to the appropriate regulatory authority, and which agreement is duly registered
and approved by the Bureau of Internal Revenue (BIR)
 Loan agreements or promissory notes, the aggregate of which does not exceed Two hundred fifty thousand pesos (P250,000), or any such amount as may be
determined by the Secretary of Finance, executed by an individual for his purchase on installment for his personal use or that of his family and not for business or
resale, barter or hire of a house, lot, motor vehicle, appliance or furniture: Provided, however, That the amount to be set by the Secretary of Finance shall be in
accordance with a relevant price index but not to exceed ten percent (10%) of the current amount and shall remain in force at least for three (3) years
 Sale, barter or exchange of shares of stock listed and traded through the local stock exchange (R.A 9648)
 Assignment or transfer of any mortgage, lease or policy of insurance, or the renewal or continuance of any agreement, contract, charter, or any evidence of
obligation or indebtedness, if there is no change in the maturity date or remaining period of coverage from that of the original instrument.
 Fixed income and other securities traded in the secondary market or through an exchange.
 Derivatives: Provided, That for purposes of this exemption, repurchase agreements and reverse repurchase agreements shall be treated similarly as derivatives
 Interbranch or interdepartmental advances within the same legal entity
 All forebearances arising from sales or service contracts including credit card and trade receivables: Provided, That the exemption be limited to those executed
by the seller or service provider itself.
 Bank deposit accounts without a fixed term or maturity
 All contracts, deeds, documents and transactions related to the conduct of business of the Bangko Sentral ng Pilipinas
 Transfer of property pursuant to Section 40(C)(2) of the National Internal Revenue Code of 1997, as amended
 Interbank call loans with maturity of not more than seven (7) days to cover deficiency in reserves against deposit liabilities, including those between or among
banks and quasi-banks (sec. 9, RR No. 13-2004)
4) What are the implications of failure to stamp taxable documents?
An instrument, document, or paper which is required by law to be stamped and which has been signed, issued, accepted or transferred without being duly stamped, shall
not be recorded, nor shall it or any copy thereof or any record of transfer of the same be admitted or used in evidence in any court until the requisite stamp or stamps shall
have been affixed thereto and cancelled.
No notary public or other officer authorized to administer oaths shall add his jurat or acknowledgment to any document subject to documentary stamp tax unless the
proper documentary stamps are affixed thereto and cancelled.
5) What is Electronic Documentary Stamp Tax (eDST) System?
The eDST is a web-based application created for taxpayers and the BIR that is capable of affixing a secured documentary stamp on the taxable documents as defined
under the appropriate provisions under Title VII of the National Internal Revenue Code of 1997, as amended, thru the use of a computer unit, any laser printer with at least
1200 dpi resolution, and Internet Explorer 7.0 It is also capable of providing a 3-layer watermark on stamps for added security. (Sec. 5 (1), RR No. 7-2009)
6) Is DST Law applicable on Electronic Documents?
The DST rates as imposed under the Code, as amended by R.A. 9243 and further amended by R.A. 10963 shall be applicable on all documents not otherwise expressly
exempted by the said law, notwithstanding the fact that they are in electronic form. As provided for by R.A. 8792, otherwise known as the Electronic Commerce Act,
electronic documents are the functional equivalent of a written document under existing laws, and the issuance thereof is therefore tantamount to the issuance of a written
document, and therefore subject to DST. (Sec. 10, RR No. 13-2004 as amended by RR No. 4-2018)
7) What are the inclusions of a debt instrument?
“Debt Instrument” shall mean instruments representing borrowing and lending transaction including but not limited to:
 debentures
 certificates of indebtedness
 due bills
 bonds
 loan agreements, including those signed abroad wherein the object of the contract is located or used in the Philippines
 instruments and securities issued by the government or any of its instrumentalities
 deposit substitute debt instruments
 certificates or other evidences of deposits that are drawing instrument significantly higher than the regular savings deposit taking into consideration the size of
the deposit and the risks involved
 certificates or other evidences of deposits that are drawing interest and having a specific maturity date
 promissory notes, whether negotiable or non-negotiable, except bank notes issued for circulation (Sec. 5, RR No. 13-2004)
8) Is any document, transaction or arrangement entered into under Financial Lease subject to Documentary Stamp Tax?
Financial lease is akin to a debt rather than a lease. A nature of an obligation than a lease of personal property. The mere act of extending credit is already a means of
facilitating an obligation or advancing in behalf of the lessee certain property in lieu of cash in exchange for a definitive amortization to be paid to the lessor with profit
margin included. Section 179 of the NIRC, as amended, covers all debt instruments. Therefore, being a nature of an obligation, any document, transaction or arrangement
entered into under financial lease is subject to DST under such Section of the NIRC, as amended. (RMC No. 46-2014)
Description
Donor’s Tax is a tax on a donation or gift, and is imposed on the gratuitous transfer of property between two or more persons who are living at the time of the transfer. It
shall apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect and whether the property is real or personal, tangible or intangible.
[return to index]
Tax Form
BIR Form 1800 – Donor’s Tax Return
[return to index]
Processing and Issuance of Approved ONETT Computation Sheet (OCS) of Tax Due On Donation of Property/ies
and
Processing and Issuance of Electronic Certificate Authorizing Registration (eCAR) for Donation of Properties
 Notarized Deed of Donation but only photocopied documents shall be retained by BIR; (One (1) original copy and two (2) photocopies)
 TIN of Donor and Donee/s; One (1) original copy for presentation only)
 Proof of claimed tax credit, if applicable; (One (1) original copy and two (2) photocopies)
 Duly Notarized Special Power of Attorney (SPA) for the transacting party if the latter is not one of the parties to the Deed of Donation; (One (1) original copy
and two (2) photocopies)
 Official Receipt/Deposit Slip and duly validated return as proof of payment; (One (1) original copy and two (2) photocopies)
 Copy of Tax Debit Memo used as payment, if applicable. (One (1) original copy and two (2) photocopies)
For Real Properties:
 Certified True Copy/ies of the Original/Transfer/ Condominium Certificate/s of Title (front and back pages) of the donated property, if applicable; (One (1)
 Certified True Copy/ies of the Tax Declaration at the time or nearest to the date of the transaction issued by the Local Assessor’s Office for land and
improvement, if applicable; (One (1) original copy and two (2) photocopies)
 Sworn Declaration of No Improvement by at least one (1) of the transferees or Certificate of No Improvement issued by the Assessor’s Office, if applicable. (One
(1) original copy and two (2) photocopies)
For Personal Properties:
 Proof of valuation of shares of stock at the time of donation, if applicable: (One (1) original copy and two (2) photocopies)
a. For shares of stocks not listed/not traded - Latest Audited Financial Statement of the issuing corporation with computation of the book value per share;
b. For shares of stocks listed/traded - Price index from the PSE/latest FMV published in the newspaper at the time of transaction;
c. For club shares - Price published in newspapers on the transaction date or nearest to the transaction date.
 Photocopy of stock certificate; (One (1) original copy and two (2) photocopies)
 Proof of valuation of other types of personal properties, if applicable; (One (1) original copy and two (2) photocopies)
 Proof of claimed deductions, if applicable; (One (1) original copy and two (2) photocopies)
 Certificate of deposit/ investment/ indebtedness/ stocks for donated cash or securities; (One (1) original copy and two (2) photocopies)
 Certificate of registration of motor vehicle, if any. (One (1) original copy and two (2) photocopies)

photocopies)
Processing and Issuance of Electronic Certificate Authorizing Registration (eCAR) for Donation of Properties
 Donor’s Tax Returns filed with proof of payment [Revenue Official Receipt or Duly Validated Bank Deposit Slip with Certification from the Authorized Agent
Bank (AAB) which received the tax payment] or Certificate of Tax Exemption; (One (1) original copy and two (2) photocopies)
[return to index]
Tax Rates
(The rate applicable shall be based on the law prevailing at the time of donation)
· Effective January 1, 2018 and onwards (Republic Act (RA) No. 10963/TRAIN)
Rate - The donor’s tax for each calendar year shall be six percent (6%) computed on the basis of the total gifts in excess of Two Hundred Fifty Thousand Pesos (P250,000)
exempt gift made during the calendar year.
Notes:
1. When the gifts are made during the same calendar year but on different dates, the donor's tax shall be computed based on the total net gifts during the year.
2. The relationship between the donor and the donee(s) shall not be considered. Republic Act No. 10963 (TRAIN Law) does not distinguish donations made to relatives,
or donations made to strangers.
· Effective January 1, 1998 to December 31, 2017 (RA No. 8424)
Net Gift Over But not Over The Tax Shall be Plus Of the Exces
100,000.00 exempt
100,000.00 200,000.00 0 2% 100,000.00
200,000.00 500,000.00 P 2,000.00 4% 200,000.00
500,000.00 1,000,000.00 14,000.00 6% 500,000.00
1,000,000.00 3,000,000.00 44,000.00 8% 1,000,000.00
3,000,000.00 5,000,000.00 204,000.00 10% 3,000,000.00
5,000,000.00 10,000,000.00 404,000.00 12% 5,000,000.00
10,000,000.00 and over 1,004,000.00 15% 10,000,000.00
Notes:
1. When the gifts are made during the same calendar year but on different dates, the donor's tax shall be computed based on the total net gifts during the year.
2. Donation made to a stranger is subject to 30% of the net gift. A stranger is a person who is not a:
· brother, sister (whether by whole or half-blood), spouse, ancestor and lineal descendants; or
· relative by consanguinity in the collateral line within the fourth degree of relationship.
· Effective July 28, 1992 to December 31, 1997 (RA No. 7499)
Net Gift Over But not Over The Tax Shall be Plus Of the Excess Over
50,000.00 exempt
50,000.00 100,000.00 1.50% 50,000.00
100,000.00 200,000.00 P 750.00 3% 100,000.00
200,000.00 500,000.00 3,750.00 5% 200,000.00
500,000.00 1,000,000.00 18,750.00 8% 500,000.00
1,000,000.00 3,000,000.00 58,750.00 10% 1,000,000.00
3,000,000.00 5,000,000.00 258,750.00 15% 3,000,000.00
5,000,000.00 and over 558,750.00 20% 5,000,000.00
Note:
1. Donation made to a stranger is subject to 10% of the net gift. A stranger is a person who is not a:
· brother, sister (whether by whole or half-blood), spouse, ancestor and lineal descendants; or
· Effective January 16, 1981 to July 27, 1992 (Presidential Decree No. 1773)
Net Gift Over But not Over The Tax Shall be Plus Of the Exces
1,000.00 exempt
1,000.00 50,000.00 1.50% 1,000.00

50,000.00 75,000.00 P 735.00 2.50% 50,000.00
75,000.00 100,000.00 1,360.00 3% 75,000.00
100,000.00 150,000.00 2,110.00 6% 100,000.00
150,000.00 200,000.00 5,110.00 9% 150,000.00
200,000.00 300,000.00 9,610.00 12% 200,000.00
300,000.00 400,000.00 21,610.00 15% 300,000.00
400,000.00 500,000.00 36,610.00 18% 400,000.00
500,000.00 625,000.00 54,610.00 21% 500,000.00
625,000.00 750,000.00 80,860.00 24% 625,000.00
750,000.00 875,000.00 110,860.00 28% 750,000.00
875,000.00 1,000,000.00 145,860.00 32% 875,000.00
1,000,000.00 2,000,000.00 185,860.00 36% 1,000,000.00
2,000,000.00 3,000,000.00 545,860.00 38% 2,000,000.00
3,000,000.00 925,860.00 40% 3,000,000.00
Note:
1. Donation made to a stranger shall be either the amount computed in accordance with the preceding schedule or twenty percent (20%) of the net gifts, whichever is
higher. A stranger is a person who is not a:
· brother, sister (whether by whole or half-blood), spouse, ancestor and lineal descendant; or
Pertinent laws:
· Commonwealth Act. No. 466 – effective July 1, 1939 to September 14, 1950
· Republic Act No. 579 – effective September 15, 1950 to August 3, 1969
· Republic Act No. 6110 – effective August 4, 1969 to December 31, 1972
· Presidential Decree No. 69 – effective January 1, 1973 to January 15, 1981
· Presidential Decree No. 1773 – effective January 16, 1981 to July 27, 1992
· Republic Act No. 7499 – effective July 28, 1992 to December 31, 1997
· Republic Act No. 8424 – effective January 1, 1998 to December 31, 2017
· Republic Act No. 10963 (TRAIN Law)– effective January 1, 2018 to present
[return to index]
Procedures
· Who Shall File
The Donor’s Tax Return (BIR Form No. 1800) shall be filed in triplicate by any person, natural or juridical, resident or non-resident, who transfers or causes to transfer
property by gift, whether in trust or otherwise, whether the gift is direct or indirect and whether the property is real or personal, tangible or intangible.
Taxpayers who are filing BIR Form no. 1800 are excluded in the mandatory coverage from using the eBlRForms (Section 2 of RR No. 9-2016).
· When and Where to File and Pay
The Donor’s Tax Return (BIR Form No. 1800) shall be filed within thirty (30) days after the date the gift (donation) is made.
The return shall be filed with any Authorized Agent Bank (AAB) of the Revenue District Office having jurisdiction over the place of domicile of the donor at the time of
the donation, or if there is no legal residence in the Philippines, with the Office of the Commissioner of Internal Revenue, (Revenue District Office No. 39, South Quezon
City). In case of gifts made by a non-resident alien, the return may be filed with RDO No. 39, or with the Philippine Embassy or Consulate in the country where he is
domiciled at the time of donation.
A separate return shall be filed by each donor for each gift (donation) made on different dates during the year reflecting therein any previous net gifts made in the same
calendar year. Only one return shall be filed for several gifts (donations) by a donor to the different donees on the same date.
If the gift (donation) involves conjugal/community property, each spouse shall file separate return corresponding to his/her respective share in the conjugal/community
property donated. This rule shall likewise apply in the case of co-ownership over the property being donated.
debit system.
Payments may also be made thru the epayment channels of AABs thru either their online facility, credit/debit/prepaid cards, and mobile payments.
For transactions covered by one (1) Deed of Sale/Exchange/Donation involving one (1) to three (3) properties, the taxpayer can avail of the fast lane pursuant to Revenue
Memorandum Circular (RMC) No. 43-2018, as amended by RMC No. 107-2018. Payments amounting to twenty thousand pesos (P 20,000.00) and below shall be paid in
cash while payments above twenty thousand pesos (P 20,000.00) shall be made through Manager’s Check or Cashier’s Check to the Revenue Collection Officer of the
RDO concerned.
The time of filing and payment vary depending on the law applicable at the time of donation.
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Revenue Regulations (RR) Nos. 2-2003, 6-2013, 6-2014

Revenue Memorandum Circular (RMC) Nos. 63-2009, 53-2013, 43-2018, 107-2018; 94-2021
Revenue Memorandum Order (RMO) No. 35-2018
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Codal Reference
· Sections 28, 29 and 30 of the Tax Reform Acceleration and Inclusion (TRAIN) Law), amending Sections 99, 100 and 101 of National Internal Revenue Code (NIRC) of
1997, respectively
· Sections 98 to 104 of the NIRC of 1997
Related Laws
· Republic Act Nos. 579, 3062, 3676, 3850, 6110, 7499, 8424, 9159, 9275, 9500, 9647, 10066, 10072, 10073, 10083, 10174, 10390, 10618, 10963 (TRAIN Law)
· Presidential Decree Nos. 69, 181, 205, 292, 294, 1773
· Executive Order No. 419
· Commonwealth Act No. 466
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1. What donations are tax exempt?
A. “In the Case of Gifts made by a Resident

· Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of
the said Government; and
· Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited non-government organization, trust or
philanthropic organization or research institution or organization: Provided, however, not more than 30% of said gifts will be used by such donee for administration
purposes. For the purpose of this exemption, a ‘non-profit educational and/or charitable corporation, institution, accredited nongovernment organization, trust or
philanthropic organization and/or research institution or organization’ is a school, college or university and/or charitable corporation, accredited nongovernment
organization, trust or philanthropic organization and/ or research institution or organization, incorporated as a nonstock entity, paying no dividends, governed by
trustees who receive no compensation, and devoting all its income, whether students’ fees or gifts, donation, subsidies or other forms of philanthropy, to the
accomplishment and promotion of the purposes enumerated in its Articles of Incorporation.” (Sec. 17 of RR No. 12-2018)
B. In the Case of Gifts Made by a Nonresident not a Citizen of the Philippines
· Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of
the said Government.
· Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, foundation, trust or philanthropic organization or research
institution or organization: Provided, however, that not more than thirty percent (30%) of said gifts shall be used by such donee for administration purposes. (Sec. 101 (B)
of NIRC, as amended)
2. What are the bases in the valuation of property?
The properties comprising the gift/donation shall be valued based on their fair market value as of the time of donation.
If the property is a real property, the fair market value thereof as of the time of donation shall be, whichever is the higher of –
1. The fair market value as determined by the Commissioner, or

2. The fair market value as shown in the schedule of values fixed by the provincial and city assessors.
In the case of shares of stocks, the fair market value shall depend on whether the shares are listed or unlisted in the stock exchanges. Unlisted common shares are valued
based on their book value while unlisted preferred shares are valued at par value. In determining the book value of common shares, appraisal surplus shall not be
considered as well as the value assigned to preferred shares, if there are any. On this note, the valuation of unlisted shares shall be exempt from the provisions of RR No.
6-2013, as amended.
For shares which are listed in the stock exchanges, the fair market value shall be the arithmetic mean between the highest and lowest quotation at a date nearest the date of
donation, if none is available on the date of donation.
The fair market value of units of participation in any association, recreation or amusement club (such as golf, polo, or similar clubs), shall be the bid price nearest the date
of donation published in any newspaper or publication of general circulation.
To determine the value of the right to usufruct, use or habitation, as well as that of annuity, there shall be taken into account the probable life of the beneficiary in
accordance with the latest basic standard mortality table, to be approved by the Secretary of Finance, upon recommendation of the Insurance Commissioner. (Sec. 2, RR
No. 17-2018 and Sec. 5 of RR No. 12-2018)
3. For purposes of Donor’s Tax, what does the term “Net Gift” mean?
For purposes of the donor’s tax, “net gift” shall mean the net economic benefit from the transfer that accrues to the donee. Accordingly, if a mortgaged property is
transferred as a gift, but imposing upon the donee the obligation to pay the mortgage liability, then the net gift is measured by deducting from the fair market value of the
property the amount of mortgage assumed. (Sec. 12 of RR No. 12-2018)
4. Under R.A. No.10963 (TRAIN Law), is any contribution in cash or in kind to any candidate or political party or coalition of parties for campaign purposes
subject to the payment of donor’s tax?
Sec. 28 (B) of RA No. 10963 (TRAIN Law) states that any contribution in cash or in kind to any candidate, political party or coalition of parties for campaign purposes
shall be governed by the Election Code, as amended.”
5. For purposes of Donor’s Tax, is a legally adopted child considered stranger?
A legally adopted child is entitled to all the rights and obligations provided by law to legitimate children, and therefore, donation to him shall not be considered as
donation made to stranger. (Sec. 10, RR No. 2-2003). However, with the passage of RA No. 10963 (TRAIN Law), effective on January 1, 2018, the relationship between
the donor and donee(s) is no longer considered in the computation of donor’s tax.
6. For purposes of Donor’s Tax, are donations between businesses considered donations made between strangers?
Donation made between business organizations and those made between an individual and a business organization shall be considered as donation made to a
stranger. (sec. 10, RR No. 2-2003). However, with the passage of RA No. 10963 (TRAIN Law), effective on January 1, 2018, the relationship between the donor and
donee(s) is no longer considered in in the computation of donor’s tax.
7. Are gratuitous donations to Homeowners’ Associations subject to Donor’s Tax?
Gifts, donations, and other contributions received by the Homeowners’ Associations (Associations) are subject to the payment of donor’s tax pursuant to Section 98, and
99 of the NIRC, as amended by Sec. 28 of RA 10963 (TRAIN Law). Endowment or gifts received by such associations are not exempt from donor’s tax considering that
gifts to Associations are not qualified for exemption under Section 101(A)(2) of the TRAIN Law. (Section II, RMC No. 53-2013)
8. Is an onerous donation or donation in exchange for goods, services or use or lease of properties to Homeowners’ Association subject to Donor’s Tax?
Pursuant to RMC No. 9-2013, associations are subject to the corresponding internal revenue taxes imposed under the Tax Code of 1997 on their income of whatever kind
and character. In this regard, contributions to associations in exchange for goods, services and use of properties constitute as other assessments/charges from activity in
exchange for the performance of a service, use of properties or delivery of an object. As such, these fees are income on the part of the associations that are subject to
income tax under Section 27 of the Tax Code, as amended. (Section III, RMC No. 53-2013)
9. What is the proper treatment for transactions involving transfer of property other than real property referred to in Section 24 (D) for less than adequate and
full consideration?
Where property, other than real property referred to in Section 24(D) of the NIRC, as amended, is transferred for less than an adequate and full consideration in money or
money's worth, then the amount by which the fair market value of the property exceeded the value of the consideration shall, for the purpose of the tax imposed by this
Chapter (Donor’s Tax), be deemed a gift, and shall be included in computing the amount of gifts made during the calendar year: Provided, however, that a sale, exchange,
or other transfer of property made in the ordinary course of business (a transaction which is a bona fide, at arm’s length, and free from any donative intent) will be
considered as made for an adequate and full consideration in money or money’s worth. (Sec. 16, RR No. 12-2018)
10. What entities are considered exempted from Donor’s Tax under special laws?
The list below consists of entities considered Donor’s Tax exempt under special laws including, but not limited to the following:
· Rural Farm School (Sec. 14, R.A. No. 10618)

· People’s Television Network, Incorporated (Sec. 15, R.A. No. 10390)
· People’s Survival Fund (Sec. 13, R.A. No. 10174)
· Aurora Pacific Economic Zone and Freeport Authority (Sec. 7, R.A. No. 10083)
· Girl Scouts of the Philippines (Sec. 11, R.A. No. 10073)
· Philippine Red Cross (Sec. 5, R.A. No. 10072)
· Tubbataha Reefs Natural Park (Sec. 17, R.A. No. 10067)
· National Commission for Culture and the Arts (Sec. 35, R.A. No. 10066)
· Philippine Normal University (Sec. 7, R.A. No. 9647)
· University of the Philippines (Sec. 25, R.A. No. 9500)
· National Water Quality Management Fund (Sec. 9, R.A. No. 9275)
· Philippine Investors Commission (Sec. 9, R.A. No. 3850)
· Ramon Magsaysay Award Foundation (Sec. 2, R.A. 3676)
· Philippine-American Cultural Foundation (Sec. 4, P.D. 3062)
· International Rice Research Institute (Art. 5(2), PD 1620)
· Task Force on Human Settlements (Sec. 3(b)(8), E.O. 419)
· National Social Action Council (Sec. 4, P.D. 294)
· Aquaculture Department of the Southeast Asian Fisheries Development Center (Sec. 2, P.D. 292)
· Development Academy of the Philippines (Sec. 12, PD 205)
· Integrated Bar of the Philippines (Sec. 3, PD 181)
11. Is waiver/renunciation of an heir on his/her share from the inheritance subject to a Donor’s Tax?
General renunciation of an heir on his/her share from the inheritance is not subject to Donor's Tax. However, there are instances where in the settlement of the
estate of the decedent, instead of all the heirs receiving their respective shares in all the properties of the decedent, the heirs will agree among themselves for a specific
property that each one of them will receive. In this scenario, there will definitely be an heir who will receive a share lower or higher than the value of what should have
been his rightful share in all the properties of the decedent. In this case, there is actually a partial renunciation of inheritance since the heir is waiving his share to only
identified properties but not to the entire properties of the decedent. Hence, donor's tax shall be imposed on the value forgone as a result of such waiver/renunciation.
(RMC No. 94-2021)
Description
Estate Tax is a tax on the right of the deceased person to transmit his/her estate to his/her lawful heirs and beneficiaries at the time of death and on certain transfers, which
are made by law as equivalent to testamentary disposition. It is not a tax on property. It is a tax imposed on the privilege of transmitting property upon the death of the
owner. The Estate Tax is based on the laws in force at the time of death notwithstanding the postponement of the actual possession or enjoyment of the estate by the
beneficiary.
[return to index]
Tax Form
BIR Form 1801 - Estate Tax Return
Guidelines
[return to index]
Processing and Issuance of Approved ONETT Computation Sheet of Tax Due On Estate with No Other Tax Liabilities
and
Processing and Issuance of Electronic Certificate Authorizing Registration (eCAR) for Estate of the Decedent
(Without Other Tax Liabilities/ Business and Where Applicant Computed its Own Tax Due)
 Certified true copy of the Death Certificate; (One (1) original copy and two (2) photocopies)
 TIN of decedent and heir/s; One (1) original copy for presentation only)
 Any of the following: (One (1) original copy and two (2) photocopies)
a) Affidavit of Self Adjudication;
b) Deed of Extra-Judicial Settlement of the Estate, if the estate has been settled extra judicially;
c) Court order if settled judicially;
d) Sworn Declaration of all properties of the Estate;
 A certified copy of the schedule of partition and the order of the court approving the same within thirty (30) days after the promulgation of such order, in case of
judicial settlement. (One (1) original copy and two (2) photocopies)
 Proof of Claimed Tax Credit, if applicable; (One (1) original copy and two (2) photocopies)
 CPA Statement on the itemized assets of the decedent, itemized deductions from gross estate and the amount due if the gross value of the estate exceeds five
million pesos (P5,000,000) for decedent’s death on or after January 1, 2018 or two million pesos (P2,000,000) for decedent’s death from January 1, 1998 to
December 31, 2017. (One (1) original copy and two (2) photocopies)
 Certification of the Barangay Captain for the claimed Family Home (If the family home is conjugal property and does not exceed Php10 Million, the allowable
deduction is one-half (1/2) of the amount only); (One (1) original copy and two (2) photocopies)
 Duly notarized Promissory Note for "Claims Against the Estate" arising from Contract of Loan; (One (1) original copy and two (2) photocopies)
 Accounting of the proceeds of loan contracted within three (3) years prior to death of the decedent; (One (1) original copy and two (2) photocopies)
 Proof of the claimed "Property Previously Taxed"; (One (1) original copy and two (2) photocopies)
 Proof of the claimed "Transfer for Public Use"; (One (1) original copy and two (2) photocopies)
 Copy of Tax Debit Memo used as payment, if applicable. (One (1) original copy and two (2) photocopies)
For Real Properties:
 Certified true copy/ies of the Transfer/Original/ Condominium Certificate/s of Title of real property/ies (front and back pages), if applicable; (One (1) original
copy and two (2) photocopies)
 Certified true copy of the Tax Declaration of real properties at the time of death, if applicable; (One (1) original copy and two (2) photocopies)
 Certificate of No Improvement issued by the Assessor's Office where declared properties have no improvement. (One (1) original copy and two (2) photocopies)
For Personal Properties:
 Certificate of Deposit/ Investment/ Indebtedness owned by the decedent and the surviving spouse, if applicable; (One (1) original copy and two (2) photocopies)
 Photocopy of Certificate of Registration of vehicles and other proofs showing the correct value of the same, if applicable; (One (1) original copy and two (2)
photocopies)
 Proof of valuation of shares of stock at the time of death, if applicable: (One (1) original copy and two (2) photocopies)
a. For shares of stocks not listed/not traded - Latest Audited Financial Statement of the issuing corporation with computation of the book value per share;
b. For shares of stocks listed/traded - Price index from the PSE/latest FMV published in the newspaper at the time of transaction;
c. For club shares - Price published in newspapers on the transaction date or nearest to the transaction date.
 Photocopy of certificate of stocks, if applicable; (One (1) original copy and two (2) photocopies)
 Proof of valuation of other types of personal property, if applicable. (One (1) original copy and two (2) photocopies)
 Special Power of Attorney (SPA), if the person transacting/processing the transfer is not a party to the transaction and/or Sworn Statement if one of the heirs is
designated as executor/administrator; (One (1) original copy and two (2) photocopies)
 BIR-approved request for installment payment of Estate tax due; (One (1) original copy and two (2) photocopies)
 BIR-approved request for partial disposition of Estate; (One (1) original copy and two (2) photocopies)
Processing and Issuance of Electronic Certificate Authorizing Registration (eCAR) for Estate of the Decedent
(Without Other Tax Liabilities/ Business and Where Tax Paid is Based on the Approved ONETT Computation Sheet)
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Tax Rates
(The rate applicable shall be based on the law prevailing at the time of decedent’s death)
 Effective January 1, 2018 to present [Republic Act (RA) No. 10963]
There shall be an imposed rate of six percent (6%) based on the value of such NET ESTATE determined as of the time of death of decedent composed of all properties,
real or personal, tangible or intangible less allowable deductions.
 Effective January 1, 1998 up to December 31, 2017 (RA No. 8424)
If the Net Estate is

Over But not Over The Tax Shall be Plus Of the Exces
P 200,000.00 Exempt
P 200,000.00 500,000.00 0 5% P 200,000.00
500,000.00 2,000,000.00 P 15,000.00 8% 500,000.00
2,000,000.00 5,000,000.00 135,000.00 11% 2,000,000.00
5,000,000.00 10,000,000.00 465,000.00 15% 5,000,000.00
10,000,000.00 1,215,000.00 20% 10,000,000.00
 Effective July 28, 1992 up to December 31, 1997 (Section 77 of the NIRC, as amended (RA No. 7499)
P 200,000.00 Exempt
P 200,000.00 500,000.00 5% P 200,000.00
500,000.00 2,000,000.00 P 15,000.00 8% 500,000.00
2,000,000.00 5,000,000.00 135,000.00 12% 2,000,000.00
5,000,000.00 10,000,000.00 495,000.00 21% 5,000,000.00
10,000,000.00 1,545,000.00 35% 10,000,000.00
 Effective January 1, 1973 to July 27, 1992 (Section 85 of the NIRC, as amended (Presidential Decree No. 69)
P 10,000.00 Exempt - -
P 10,000.00 50,000.00 3% - P 10,000.00
50,000.00 75,000.00 P 1,200.00 4% 50,000.00
75,000.00 100,000.00 2,200.00 5% 75,000.00
100,000.00 150,000.00 3,450.00 10% 100,000.00
150,000.00 200,000.00 8,450.00 15% 150,000.00
200,000.00 300,000.00 15,950.00 20% 200,000.00
300,000.00 400,000.00 35,950.00 25% 300,000.00
400,000.00 500,000.00 60,950.00 30% 400,000.00
500,000.00 625,000.00 90,950.00 35% 500,000.00
625,000.00 750,000.00 134,700.00 40% 625,000.00
750,000.00 875,000.00 184,700.00 45% 750,000.00
875,000.00 1,000,000.00 240,950.00 50% 875,000.00
1,000,000.00 2,000,000.00 303,450.00 53% 1,000,000.00
2,000,000.00 3,000,000.00 833,450.00 56% 2,000,000.00
3,000,000.00 - 1,393,450.00 60% 3,000,000.00
 Effective September 15, 1950 to December 31, 1972 (Section 85 of the NIRC, as amended (RA No. 579)
Estate and Inheritance Tax
Over But not Over ESTATE INHERITAN

0 5,000.00 Exempt Exempt
5,000.00 12,000.00 1.00% 2%
12,000.00 30,000.00 2.00% 4%
30,000.00 50,000.00 2.50% 6%
50,000.00 70,000.00 3.00% 8%
70,000.00 100,000.00 5.00% 12%
100,000.00 150,000.00 7.00% 14%
150,000.00 250,000.00 9.00% 16%
250,000.00 500,000.00 11.00% 18%
500,000.00 1,000,000.00 13% 20%
1,000,000.00 15% 22%
 Effective July 1, 1939 to September 14, 1950 (Section 85 of the NIRC, as amended (Commonwealth Act No. 466)
Estate and Inheritance Tax
Over But not Over ESTATE INHERITAN

0 3000 Exempt
1.00%
3,000.00 10,000.00 1.00%
10,000.00 30,000.00 1.50% 2.00%
30,000.00 50,000.00 2.00% 3.00%
50,000.00 80,000.00 2.50% 4.00%
80,000.00 110,000.00 3.00% 5.00%
110,000.00 150,000.00 3.50% 6.00%
150,000.00 190,000.00 4.00% 7.00%
190,000.00 240,000.00 4.50% 8.00%
240,000.00 290,000.00 5.00% 9.00%
290,000.00 350,000.00 5.50% 10.00%
350,000.00 420,000.00 6.00% 11.00%
420,000.00 500,000.00 6.50% 12.00%
500,000.00 600,000.00 7.00% 13.00%
600,000.00 720,000.00 7.50% 14.00%
720,000.00 850,000.00 8.00% 15.00%
850,000.00 1,000,000.00 8.50% 16.00%
1,000,000.00 1,200,000.00 9.00% 17.00%
1,200,000.00 1,500,000.00 9.50% 17.00%
1,500,000.00 10.00% 17.00%
[return to index]
Procedures
 Who Shall File
The Estate Tax Return (BIR Form 1801) shall be filed in triplicate by:
1. The executor, or administrator, or any of the legal heir/s of the decedent, whether resident or non-resident of the Philippines, under any of the following situations:
a. In all cases of transfers subject to estate tax;

b. Regardless of the gross value of the estate, where the said estate consists of registered or registrable property such as real property, motor vehicle, shares of stock or
other similar property for which a clearance from the BIR is required as a condition precedent for the transfer of ownership thereof in the name of the transferee; or
2. If there is no executor or administrator appointed, qualified, and acting within the Philippines, then any person in actual or constructive possession of any property of
the decedent.
Taxpayers who are filing BIR Form 1801 are excluded in the mandatory coverage from using the eBlRForms (Section 2 of RR No. 9-2016)
The Estate Tax Return (BIR Form 1801) shall be filed within one (1) year from the decedent's death. In meritorious cases, the Commissioner shall have the authority to
grant a reasonable extension not exceeding thirty (30) days for filing the return.
The return shall be filed with any Authorized Agent Bank (AAB) of the Revenue District Office (RDO) having jurisdiction over the place of domicile of the decedent at
the time of his death. If the decedent has no legal residence in the Philippines, the return shall be filed with the Office of the Commissioner (RDO No. 39, South Quezon
City).
In case of a non-resident decedent with executor or administrator in the Philippines, the return shall be filed with the AAB of the RDO where such executor/administrator
is registered or is domiciled, if not yet registered with the BIR.
payment was received by the AAB. The AAB receiving the tax return shall stamp mark the word “Received’’ on the return and also machine validate the return as proof
of filing the return and payment of the tax by the taxpayer, respectively. The machine validation shall reflect the date of payment, amount paid and transaction code, the
debit system.
Payments may also be made thru the epayment channels of AABs thru either their online facility, credit/debit/prepaid cards, and mobile payments.
In case the available cash of the estate is insufficient to pay the total estate tax due, payment by installment shall be allowed within two (2) years from the statutory date
for its payment without civil penalty and interest upon approved by the concerned BIR Official.
The due date on filing and payment of the return/tax shall depend on the applicable law at the time of the decedent’s death.
 Extension to File and Pay
When the Commissioner of Internal Revenue finds that the payment on the due date of the estate tax or of any part thereof would impose undue hardship upon the estate
or any of the heirs, he may extend the time for payment of such tax or any part thereof not to exceed five (5) years, in case the estate is settled through the courts, or two (2)
years in case the estate is settled extra-judicially. In such case, the amount in respect of which the extension is granted shall be paid on or before the date of the expiration
of the period of the extension, and the running of the Statute of Limitations for assessment as provided in Section 203 of the National Internal Revenue Code shall be
suspended for the period of any such extension.
Where the taxes are assessed by reason of negligence, intentional disregard of rules and regulations, or fraud on the part of the taxpayer, no extension will be granted by
the Commissioner.
If an extension is granted, the Commissioner of Internal Revenue or his duly authorized representative may require the executor, or administrator, or beneficiary, as the
case may be, to furnish a bond in such amount, not exceeding double the amount of tax and with such sureties as the Commissioner deems necessary, conditioned upon
the payment of the said tax in accordance in the terms of extension.
The application for extension of time to file the estate tax return must be filed with the Revenue District Officer (RDO) where the estate is required to secure its Taxpayer
Identification Number (TIN) and file the tax returns of the estate. The application shall be approved by the Commissioner or his duly authorized representative.
[return to index]
Revenue Regulations (RR) Nos. 2-2003, 6-2013, 6-2014; 12-2018

Revenue Memorandum Order (RMO) Nos. 26-82, 31-82, 15-2003; 35-2018
Revenue Memorandum Circular (RMC) Nos. 1-98, 34-2013
Related Laws
Commonwealth Act No. 466 – effective July 1, 1939

Republic Act No. 579 – effective September 15, 1950
Republic Act No. 6110 – effective August 4, 1969
Presidential Decree No. 69 – effective January 1, 1973
Republic Act No. 7499 – effective July 28, 1992|
Republic Act No. 8424 – effective January 1, 1998
Republic Act No. 10963 – effective January 1, 2018
[return to index]
Codal Reference
Sec. 22 to 27 of the Tax Reform Acceleration and Inclusion Act (TRAIN Law)
Sec. 84 to Sec. 97 of the National Internal Revenue Code (NIRC) of 1997
[return to index]
1. What are included in gross estate?
A. For resident alien decedents/citizens:
 Real or immovable property, wherever located

 Tangible personal property, wherever located
 Intangible personal property, wherever located
B. For non-resident decedent/non-citizens:
 Real or immovable property located in the Philippines

 Tangible personal property located in the Philippines
 Intangible personal property - with a situs in the Philippines such as:
 Franchise which must be exercised in the Philippines
 Shares, obligations or bonds issued by corporations organized or constituted in the Philippines
 Shares, obligations or bonds issued by a foreign corporation 85% of the business of which is located in the Philippines
 Shares, obligations or bonds issued by a foreign corporation if such shares, obligations or bonds have acquired a business situs in the Philippines (i.e. they are
used in the furtherance of its business in the Philippines)
 Shares, rights in any partnership, business or industry established in the Philippines
2. What are excluded from gross estate?
 GSIS proceeds/ benefits

 Accruals from SSS
 Proceeds of life insurance where the beneficiary is irrevocably appointed
 Proceeds of life insurance under a group insurance taken by employer (not taken out upon his life)
 War damage payments
 Transfer by way of bona fide sales
 Transfer of property to the National Government or to any of its political subdivisions
 Separate property of the surviving spouse
 Merger of usufruct in the owner of the naked title
 Properties held in trust by the decedent
 Acquisition and/or transfer expressly declared as not taxable
3. What will be used as basis in the valuation of property?
The properties comprising the gross estate shall be valued based on their fair market value as of the time of decedent’s death.
If the property is a real property, the appraised value thereof as of the time of death shall be, whichever is the higher of –
1. The fair market value as determined by the Commissioner, or

2. The fair market value as shown in the schedule of values fixed by the provincial and city assessors.
In the case of shares of stocks, the fair market value shall depend on whether the shares are listed or unlisted in the stock exchanges. Unlisted common shares are valued
based on their book value while unlisted preferred shares are valued at par value. In determining the book value of common shares, appraisal surplus shall not be
considered as well as the value assigned to preferred shares, if there are any. On this note, the valuation of unlisted shares shall be exempt from the provisions of RR No.
6-2013, as amended.
For shares which are listed in the stock exchanges, the fair market value shall be the arithmetic mean between the highest and lowest quotation at a date nearest the date of
death, if none is available on the date of death itself.
The fair market value of units of participation in any association, recreation or amusement club (such as golf, polo, or similar clubs), shall be the bid price nearest the date
of death published in any newspaper or publication of general circulation.
To determine the value of the right to usufruct, use or habitation, as well as that of annuity, there shall be taken into account the probable life of the beneficiary in
accordance with the latest basic standard mortality table, to be approved by the Secretary of Finance, upon recommendation of the Insurance Commissioner.(Sec. 5, RR
No. 12-2018)
4. What are the allowable deductions for Estate Tax Purposes?
(Please note that the allowable deductions will vary depending on the law applicable at the time of the decedent’s death)
 For dates of deaths occurring January 1, 2018 to present (RA No. 10963/TRAIN Law)
A. For a citizen or resident alien:
1. Standard Deduction — An amount equivalent to Five million pesos (₱5,000,000.00)

2. Claims against the estate -
Requisites for Deductibility of Claims against the Estate –
 The liability represents a personal obligation of the deceased existing at the time of death;
 The liability was contracted in good faith and for adequate and full consideration in money’s worth;
 The claim must be a debt or claim which is valid in law and enforceable in court; and
 The indebtedness must not have been condoned by the creditor or the action to collect from the decedent must not have prescribed.
3. Claims of the deceased against insolvent persons where the value of the decedent’s interest therein is included in the value of the gross estate
4. Unpaid mortgages, taxes and casualty losses
5. Property previously taxed - An amount equal to the value specified below of any property forming part of the gross estate situated in the Philippines of any person
who died within five (5) years prior to the death of the decedent, or transferred to the decedent by gift within five (5) years prior to his death, where such property can be
identified as having been received by the decedent from the donor by gift, or from such prior decedent by gift, bequest, devise or inheritance, or which can be identified as
having been acquired in exchange for property so received:
“One hundred percent (100%) of the value, if the prior decedent died within one (1) year prior to the death of the decedent, or if the property was transferred to him by gift,
within the same period prior to his death;
“Eighty percent (80%) of the value, if the prior decedent died more than one (1) year but not more than two (2) years prior to the death of the decedent, or if the property
was transferred to him by gift within the same period prior to his death;
“Sixty percent (60%) of the value, if the prior decedent died more than two (2) years but not more than three (3) years prior to the death of the decedent, or if the property
“Forty percent (40%) of the value, if the prior decedent died more than three (3) years but not more than four (4) years prior to the death of the decedent, or if the property
was transferred to him by gift within the same period prior to his death; and
“Twenty percent (20%) of the value, if the prior decedent died more than four (4) years but not more than five (5) years prior to the death of the decedent, or if the
property was transferred to him by gift within the same period prior to his death.
“These deductions shall be allowed only where a donor’s tax, or estate tax imposed under Title III of NIRC was finally determined and paid by or on behalf of such donor,
or the estate of such prior decedent, as the case may be, and only in the amount finally determined as the value of such property in determining the value of the gift, or the
gross estate of such prior decedent, and only to the extent that the value of such property is included in the decedent’s gross estate, and only if in determining the value of
the estate of the prior decedent, no deduction was allowable under this item in respect of the property or properties given in exchange therefor. Where a deduction was
allowed of any mortgage or other lien in determining the donor’s tax, or the estate tax of the prior decedent, which was paid in whole or in part prior to the decedent’s
death, then the deduction allowable this item shall be reduced by the amount so paid. Such deduction allowable shall be reduced by an amount which bears the same ratio
to the amounts allowed as deductions under items (2), (3), (4), and (6) of this Subsection as the amount otherwise deductible under this item bears to the value of the
decedent’s estate. Where the property referred to consists of two or more items, the aggregate value of such items shall be used for the purpose of computing the
deduction.
6. Transfers for Public Use
7. The Family Home - An amount equivalent to the current fair market value of the decedent’s family home: Provided, however, that if the said current fair market value
exceeds Ten million pesos (₱10,000,000.00), the excess shall be subject to estate tax
If the family home is conjugal property and does not exceed (₱10,000,000.00), the allowable deduction is one-half (1/2) of the amount only.
8. Amount Received by Heirs Under Republic Act No. 4917
Any amount received by the heirs from the decedent’s employer as a consequence of the death of the decedent-employee in accordance with Republic Act No.
4917: Provided, that such amount is included in the gross estate of the decedent.
9. Net share of the surviving spouse in the conjugal partnership or community property
B. For a non-resident alien:
1. Standard Deduction – An amount equivalent to Five hundred thousand pesos (₱500,000)
2. Losses and indebtedness -
2.1. Claims against the estate

2.2. Claims of the deceased against insolvent persons where the value of the decedent’s interest therein is included in the value of the gross estate
2.3. Unpaid mortgages, taxes and casualty losses
3. Property previously taxed
4. Transfers for Public Use
 For deaths occurring January 1, 1998 to December 31, 2017 (RA No. 8424/NIRC of 1997)
A. For a citizen or resident alien:
1. Expenses, Losses, Indebtedness, and Taxes:
1. Actual funeral expenses (whether paid or unpaid) up to the time of interment, or an amount equal to five percent (5%) of the gross estate, whichever is lower, but
in no case to exceed P200,000.
2. Judicial expenses of the testamentary or intestate proceedings.
3. Claims against the estate.
4. Claims of the deceased against insolvent persons where the value of the decedent’s interest therein is included in the value of the gross estate; and,
5. Unpaid mortgages, taxes and casualty losses
2. Property previously taxed (Vanishing Deduction) (Section 86 (2) of the NIRC as amended by RA No. 8424) - An amount equal to the value specified below of any
property forming a part of the gross estate situated in the Philippines of any person who died within five (5) years prior to the death of the decedent, or transferred to the
decedent by gift within five (5) years prior to his death, where such property can be identified as having been received by the decedent from the donor by gift, or from
such prior decedent by gift, bequest, devise or inheritance, or which can be identified as having been acquired in exchange for property so received:
One hundred percent (100%) of the value, if the prior decedent died within one (1) year prior to the death of the decedent, or if the property was transferred to him by gift
within the same period prior to his death;
Eighty percent (80%) of the value, if the prior decedent died more than one (1) year but not more than two (2) years prior to the death of the decedent, or if the property
Sixty percent (60%) of the value, if the prior decedent died more than two (2) years but not more than three (3) years prior to the death of the decedent, or if the property
Forty percent (40%) of the value, if the prior decedent died more than three (3) years but not more than four (4) years prior to the death of the decedent, or if the property
was transferred to him by gift within the same period prior to his death; and
Twenty percent (20%) of the value, if the prior decedent died more than four (4) years but not more than five (5) years prior to the death of the decedent, or if the property
These deductions shall be allowed only where a donor’s tax or estate tax imposed was finally determined and paid by or on behalf of such donor, or the estate of such
prior decedent, as the case may be, and only in the amount finally determined as the value of such property in determining the value of the gift, or the gross estate of such
prior decedent, and only to the extent that the value of such property is included in the decedent’s gross estate, and only if in determining the value of the estate of the
prior decedent, no Property Previously Taxed or Vanishing Deduction was allowable in respect of the property or properties given in exchange therefor. (Section 6 & 7 of
RR No. 2-2003)
3. Transfers for public use
4. The family home - fair market value but not to exceed P1,000,000.00
The family home refers to the dwelling house, including the land on which it is situated, where the husband and wife, or a head of the family, and members of their family
reside, as certified to by the Barangay Captain of the locality. The family home is deemed constituted on the house and lot from the time it is actually occupied as a family
residence and is considered as such for as long as any of its beneficiaries actually resides therein. (Arts. 152 and 153, Family Code)
5. Standard deduction – A deduction in the amount of One Million Pesos (P1,000,000.00) shall be allowed as an additional deduction without need of substantiation.
6. Medical expenses – All medical expenses (cost of medicines, hospital bills, doctor’s fees, etc.) incurred (whether paid or unpaid) within one (1) year before the death of
the decedent shall be allowed as a deduction provided that the same are duly substantiated with official receipts. For services rendered by the decedent’s attending
physicians, invoices, statements of account duly certified by the hospital, and such other documents in support thereof and provided, further, that the total amount thereof,
whether paid or unpaid, does not exceed Five Hundred Thousand Pesos (P500,000).
7. Amount received by heirs under RA No. 4917 - Any amount received by the heirs from the decedent’s employer as a consequence of the death of the decedent-
employee in accordance with Republic Act No. 4917 is allowed as a deduction provided that the amount of the separation benefit is included as part of the gross estate of
the decedent.
B. For a non-resident alien:
1. Expenses, losses, indebtedness and taxes
2. Property previously taxed
3. Transfers for public use
No deduction shall be allowed in the case of a non-resident decedent not a citizen of the Philippines, unless the executor, administrator, or anyone of the heirs, as the case
may be, includes in the return required to be filed in the Section 90 of the Code the value at the time of the decedent’s death of that part of his gross estate not situated in
the Philippines.
5. What does the term "Funeral Expenses" include?
The term "FUNERAL EXPENSES" is not confined to its ordinary or usual meaning. They include:
1. The mourning apparel of the surviving spouse and unmarried minor children of the deceased bought and used on the occasion of the burial;
2. Expenses for the deceased’s wake, including food and drinks;
3. Publication charges for death notices;
4. Telecommunication expenses incurred in informing relatives of the deceased;
5. Cost of burial plot, tombstones, monument or mausoleum but not their upkeep. In case the deceased owns a family estate or several burial lots, only the value
corresponding to the plot where he is buried is deductible;
6. Interment and/or cremation fees and charges; and
7. All other expenses incurred for the performance of the rites and ceremonies incident to interment.
Expenses incurred after the interment, such as for prayers, masses, entertainment, or the like are not deductible. Any portion of the funeral and burial expenses borne or
defrayed by relatives and friends of the deceased are not deductible. Actual funeral expenses shall mean those which are actually incurred in connection with the interment
or burial of the deceased. The expenses must be duly supported by official receipts or invoices or other evidence to show that they were actually incurred. (Sec 6 (A)(1) of
RR 2-2003)
6. What does the term "Judicial Expenses" include?
Expenses allowed as deduction under this category are those incurred in the inventory-taking of assets comprising the gross estate, their administration, the payment of
debts of the estate, as well as the distribution of the estate among the heirs. In short, these deductible items are expenses incurred during the settlement of the estate but not
beyond the last day prescribed by law, or the extension thereof, for the filing of the estate tax return. Judicial expenses may include:
1. Fees of executor or administrator;

2. Attorney’s fees;
3. Court fees;
4. Accountant’s fees;
5. Appraiser’s fees;
6. Clerk hire;
7. Costs of preserving and distributing the estate;
8. Costs of storing or maintaining property of the estate; and
9. Brokerage fees for selling property of the estate.
Any unpaid amount for the aforementioned cost and expenses claimed under “Judicial Expenses” should be supported by a sworn statement of account issued and signed
by the creditor. (Sec 6 (A)(2) of RR 2-2003)
[return to index]
BASIC CONCEPT:
 Excise Tax is a tax on the production, sale or consumption of a commodity in a country.

APPLICABILITY:
 On goods manufactured or produced in the Philippines for domestic sale or consumption or for any other disposition; and
 On goods imported.
TYPES OF EXCISE TAX:
 Specific Tax – refers to the excise tax imposed which is based on weight or volume capacity or any other physical unit of measurement
 Ad Valorem Tax – refers to the excise tax which is based on selling price or other specified value of the goods/articles
MANNER OF COMPUTATION:
 Specific Tax = No. of Units/other measurements x Specific Tax Rate

 Ad Valorem Tax = No. of Units/other measurements x Selling Price of any specific value per unit x Ad Valorem Tax Rate
MAJOR CLASSIFICATION OF EXCISABLE ARTICLES AND RELATED CODAL SECTION:
1. Alcohol Products (Sections 141-143)
a. Distilled Spirits (Section 141)

b. Wines (Section 142)
c. Fermented Liquors (Section 143)
2. Tobacco Products (Sections 144-146)
a. Tobacco Products (Section 144)

b. Cigars & Cigarettes (Section 145)
c. Inspection Fee (Section 146)
3. Petroleum Products (Section 148)
4. Miscellaneous Articles (Section 149-150)
a. Automobiles (Section 149)

b. Non-essential Goods (Section 150)
c. Non-essential Service (Section 150-A) - RA 10963 [TRAIN Law))
d. Sweetened Beverages (Section 150-B)-(RA 10963 [TRAIN Law])
5. Mineral Products (Sections 151)
PERSONS LIABLE TO EXCISE TAX:
In General:
a. On Domestic or Local Articles


 Manufacturer
 Producer
 Owner or person having possession of articles removed from the place of production without the payment of the tax
b. On Imported Articles


 Importer
 Owner
 Person who is found in possession of articles which are exempt from excise taxes other than those legally entitled to exemption
Others:
On Indigenous Petroleum


 Local Sale, Barter or Transfer
o
o First buyer, purchaser or transferee
 Exportation
o
o Owner, lessee, concessionaire or operator of the mining claim
TIME OF PAYMENT:
In General
o

 On domestic products
o
o Before removal from the place of production
 On imported products
o
o Before release from the customs' custody
[return to index]
EXCISE TAX RATES:
A. ALCOHOL PRODUCTS
NEW TAX RATES based on Republic Act No. 10351 Re

PARTICULARS 20
2013 2014 2015 2016 2017
on
A. DISTILLED SPIRITS, AD VALOREM & SPECIFIC TAX
1) AD VALOREM TAX RATE - Based on the Net Retail Price
(NRP) per proof (excluding the excise and value-added taxes);15% 15% 20% 20% 20% 20
and
Ef
2) SPECIFIC TAX - Per proof liter Php20 Php20 Php20 Php20.80 Php21.63 sh
the
B. WINES, per liter of volume capacity
1) Sparkling wines/ champagnes, where the NRP (excluding the Ef
excise and VAT) per bottle of 750ml volume capacity, regardless sh
of proof is: the
Php500.00 or less Php250 Php260 Php270.40 Php281.22 Php292.47
More than Php500.00 Php700 Php728 Php757.12 Php787.40 Php818.90
2) Still wines and carbonated wines containing 14% of alcohol by
Php30.00 Php31.20 Php32.45 Php33.75 Php35.10
volume or less
3) Still wines and carbonated wines containing more than 14% (of
alcohol by volume) but not more 25% of alcohol by volume
4) Fortified wines containing more than 25% of alcohol by
Taxed as distilled spirits
volume
C. FERMENTED LIQUORS , per liter of volume capacity
1) If the NRP (excluding excise and VAT) per liter of volume
capacity is: Ef
sh
Php 50.60 and below Php15.00 Php17.00 Php19.00 Php21.00 Php23.50
the
More than Php 50.60 Php20.00 Php21.00 Php22.00 Php23.00 Php23.50
Ef
2) If brewed and sold at microbreweries or small establishments
Php28.00 Php29.12 Php30.28 Php31.50 Php32.76 sh
such as pubs and restaurants, regardless of the NRP
the
NOTE:
IN CASE OF FERMENTED LIQUORS AFFECTED BY THE "NO DOWNWARD RECLASSIFICATION " PROVISION, THE 4% INCREASE SHALL APPLY TO TH
RATES
B. TOBACCO PRODUCTS
NEW TAX RATES based on Republic Act No. 10351

PARTICULARS R
2013 2014 2015 2016 2017
A. TOBACCO PRODUCTS, per kilogram
1. Tobacco Products
(a) Tobacco twisted by hand or reduced into a condition to be consumed in any manner other than the
ordinary mode of drying and curing; Ef
(b) Tobacco prepared or partially prepared with or without the use of any machine or instrument or without sh
being pressed or sweetened; and th
(c) Fine-cut shorts and refuse, scraps, clippings, cuttings, stems, midribs and sweepings of tobacco; Php1.75 Php1.82 Php1.89 Php1.97 Php2.05
2. Chewing tobacco unsuitable for use in any other manner Php1.50 Php1.56 Php1.62 Php1.68 Php1.75
B. CIGARS, per cigar
3. Cigars Ef
(a) Based on the NRP per cigar (excluding the excise and value-added taxes), and 20% 20% 20% 20% 20% sh
(b) Per cigar Php5.00 Php5.20 Php5.41 Php5.62 Php5.85 th
C. CIGARETTES , per pack
NEW TAX RATES based on RA No. 10963 (TRAIN Law)
January 1, July 1, 2018 January 1, January 1,
PARTICULARS 2018 until until 2020 until 2022 until
January 1,
June 30, December December 31, December
2018 31, 2019 2021 31,2023
1. Cigarettes packed by hand Php32.50 Php35.00 Php37.50 Php40.00
Effective
increased b
2. Cigarettes packed by machine Php32.50 Php35.00 Php37.50 Php40.00
INSPECTION FEE - There shall be collected inspection fees on leaf tobacco, scrap, cigars, Cigarettes and other manufactured tobacco and tobacco products as follows:
PRODUCT TYPE INSPECTION FEE

(1) Cigars P 0.50 per thousand pieces or fraction thereof
(2) Cigarettes P 0.10 per thousand sticks or fraction thereof
(3) Leaf Tobacco P 0.02 per kilogram or fraction thereof
(4) Scrap and other manufactured tobacco P 0.03 per kilogram or fraction thereof
C. PETROLEUM PRODUCTS
EFFECTIVITY (RA 10963-TRAIN Law)

PRODUCT TYPE
January 1, 2018 January 1, 2019
(a) Lubricating oils and greases, including but not limited to base stock for lube oils and greases, high vacuum Php9.00
distillates, aromatic extracts and other similar preparations, and additives for lubricating oils and greases, whether such
additives are petroleum based or not,per liter and kilogram respectively, of volume capacity or weight
(a.1) Locally produced or imported oils previously taxed but are subsequently reprocessed, re-refined or recycled, per
liter and kilogram of volume capacity or weight.
(b)Processed gas, per liter of volume capacity
Php8.00
(c)Waxes and petrolatum, per kilogram
(d)Denatured alcohol to be used for motive power , per liter of volume capacity
(e)Asphalt, per kilogram
(f)Naphtha, regular gasoline, pyrolysis gasoline and other similar products of distillation, per liter of volume capacity Php9.00
(g)Unleaded premium gasoline, per liter of volume capacity
Php7.00
(h)Kerosene, per liter of volume capacity Php3.00 Php4.00

(i)Aviation turbo jet fuel,aviation gas, per liter of volume capacity Php4.00 Php4.00
(j)Kerosene when used as aviation fuel, per liter of volume capacity
(k)Diesel fuel oil, and on similar fuel oils having more or less the same generating power, per liter of volume capacity Php4.50
(l)Liquified petroleum gas used for motive power, per kilogram
(m)Bunker fuel oil, and on similar oils having more or less the same generating power, per liter of volume capacity
Php2.50
(n)Petroleum coke, per metric ton
(o)Liquified petroleum gas, per kilogram Php1.00 Php2.00

(p)Naphtha and pyrolysis gasoline, when used as raw material in the production of petrochemical products or in the Php0.00
refining of petroleum products, or as replacement fuel for natural-gas-fired-combined cycle power plant, in lieu of
lacally-extracted natural gas during the non-availability thereof, per liter of volume capacity
(q)Liquified petroleum gas, when used as raw material in the production of petrochemical products, per kilogram
Php0.00
(r)Petroleum coke when used as feedstock to any power generating facility, per metric ton
D. MINERALS AND MINERAL PRODUCTS
PRODUCT TYPE TAX RATES (RA 10963-TRAIN Law)
Coal and coke (Domestic and Imported) January 1, 2018 - Php50.00

January 1, 2019 - Php100.00
January 1, 2020 - Php150.00
and onwards
Nonmetallic Minerals and Quarry Reources (Locally extracted or produced) Four percent (4%) based on the actual market value of the gross outp
Nonmetallic Minerals and Quarry Resources (Imported) Four percent (4%) based on the value used by the Bureau of Cu
customs duties, net of excise tax and value-added tax
Locally-extracted natural gas and liquefied natural gas Exempt
All Metallic Minerals (locally extracted or produced copper, gold, chromite and other metallic minerals) Four percent (4%) based on the actual market value of the gross outp
Imported copper, gold, chromite and other metallic minerals Four percent (4%) based on the value used by BOC in determining
tax and value added tax
On indigenous petroleum Six percent (6%) of the fair international market price thereof, on t
such similar transaction, such tax to be paid by the buyer or purc
production. The phrase “first taxable sales, barter, exchange or sim
indigenous petroleum in its original, state to a first taxable transfe
shall be determined in consultation with appropriate government agen
For the purpose of this Subsection, “indigenous petroleum” sh

hydrocarbon gas, bitumen, crude asphalt. mineral gas and all other s
with the exception of coal, peat, bituminous shale and/or stratified mi
NOTE:
In the case of mineral concentrates not traded in commodity exchanges in the Philippines or abroad, such as copper concentrate, the actual market value shall be the world price q
content thereof prevailing in the said commodity exchanges, after deducting the smelting, refining and other charges incurred in the process of converting the mineral concen
commodity exchanges.
On minerals and mineral products sold or consigned abroad, the actual cost of ocean freight and insurance shall be deducted from the tax base.
E. AUTOMOBILES AND OTHER MOTOR VEHICLES
NET MANUFACTURER'S PRICE/IMPORTER'S SELLING PRICE TAX RATES (RA 10963 (TRAIN Law)
OVER UP TO RATE
0 Php600,000 4%
Php600,000 Php1,000,000 10%
Php1,100,000 Php4,000,000 20%
Php4,000,000 over 50%
F. NON-ESSENTIAL GOODS

 Twenty percent (20%) based on the wholesale price or the value of importation used by the Bureau of Customs in determining Tariff and Customs
Duties, net of Excise and Value-Added taxes
G. SWEETENED BEVERAGES (RA 10963-TRAIN Law)
PRODUCT TAX RATE

Per Liter of Volume Capacity
Using purely caloric sweeteners, and purely non-caloric sweeteners, or a mix of caloric and non-caloric sweeteners Php6.00
Using purely high fructose corn syrup or in combination with any caloric or non-caloric sweetener Php12.00
Using purely coconut sap sugar and purely steviol glycosides Exempt
H. INVASIVE COSMETIC PROCEDURES - (RA 10963-TRAIN Law)
SERVICE Tax Rate

Performance of Services on Invasive Cosmetic Procedures 5%
[return to index]
REVENUE ISSUANCES ON EXCISE TAXES
A. ALCOHOLPRODUCTS
RMO No. 1-2016 Implements the centralized processing of Authority to Release Imported Goods (ATRIG) for excisable products
RMO NO. 14-2014 Guidelines and procedures for the Processing and Issuance of An Electronic Authority to Release Imported Goods (eATRIG
RMC NO. 18-2013 Further Clarifying the Taxability of Distilled Spirits Provided under Revenue Memorandum Circular No. 3-2013
RMC NO. 10-2013 Transition Procedures for all Electronic Filing and Payment System (eFPS) Filers in Filing Tax returns Affected by the Re
Products Pursuant to the provisions of Republic Act No. 10351, “An Act Restructuring the Excise Tax on Alcohol and Toba
142, 143, 144, 145, 8, 131 and 288 of Republic Act No. 8424, Otherwise Known as the National Internal Revenue Code o
9334, and for Other Purposes
RMC NO. 3-2013 Clarifying Certain Provisions of Revenue Regulations No. 17-2012 Implementing the Provisions of Republic Act No. 103
Memorandum Circular No. 90-2012 Providing the Initial Tax Classifications of Alcohol and Tobacco Products
RMC NO. 90-2012 Revised Tax Rates of Alcohol and Tobacco Products Under Republic Act No. 10351
RR NO. 17-2012 Prescribing the Implementing Guidelines on the Revised Tax Rates on Alcohol and Tobacco Products Pursuant to the Provis
RMC NO. 26-2006 Clarifying Certain Provisions of Revenue Regulations (RR) No. 3- 2006, More Particularly on the Printing Requirements of
RR NO. 3-2006 Prescribing the Implementing Guidelines on the Revised Tax Rates on Alcohol and Tobacco Products pursuant to the P
Clarifying Certain Provisions of Existing Revenue Regulations Relative Thereto
RMO NO. 38-2003 Prescribing Uniform Guidelines and Procedures in the Processing of Various Permits for Excise Tax Purposes
RMO NO. 35-2002 Prescribing the Guidelines and procedures in the Processing and Issuance of Authority to Release Imported Goods (A
Purposes
RR NO. 2-97 Revenue Regulations Governing Excise Taxation on Distilled Spirits, Wines and Fermented Liquors
B. TOBACCO PRODUCTS
RR NO. 3-2018 Providing for the Revised Tax Rates on Tobacco Products Pursuant to the Provisions of Republic Act No. 10963, otherwise
and Inclusion (TRAIN) Law"', Amending for the Purpose Revenue Regulations No. 17-2012
RR NO. 6-2017 Amending Certain Provisions of Revenue Regulations No. 7-2014 Prescribing the Affixture of Internal Revenue Stamps
Cigarettes and the Use of the Internal Revenue Stamp Integrated System (IRSIS) for the Ordering, Distribution and Monitori
RMC NO. 1-2017 Clarification on Section 2(c) of Revenue Regulations (RR) No.7-2014 On the Colors of Cigarette Tax Stamps Relative to
Tax Rate under RR No. 17-2012
RMO No. 33-2016 Prescribes the uniform procedures for the implementation of Internal Revenue Stamp Integrated System (IRSIS)
RMO No. 30-2016 Prescribes the guidelines, policies and procedures for replacement of spoiled/bad order and factory defected internal rev
Stamps Integrated System (IRSIS)
RMC NO. 51-2016 Availability of Mobile Application to Authenticate Internal Revenue Stamps on Cigarettes
RMC No. 23-2016 Publishes the full text of Implementing Rules and Regulations of Republic Act No. 10643 entitled "An Act to Effective
Graphic Health Warnings on Tobacco Products"
RMC No. 68-2016 Informs all taxpayers and others concerned of the new and upgraded internal revenue stamp design for cigarette products
RR No. 9-2015 Amends Section 9 of RR No. 7-2014 relative to the affixture of internal revenue stamps on imported and locally-manufact
Revenue Stamp Integrated System (IRSIS)
RMO NO. 14-2014 Guidelines and procedures for the Processing and Issuance of An Electronic Authority to Release Imported Goods (eATRIG
RMC No. 89-2014 Clarifies the implementation of the increase in Excise Tax rates on locally-manufactured cigarettes effective January 1, 201
Stamps
RR NO. No. 9-2014 Further amends the provisions of RR No. 7-2014, specifically the deadlines prescribed under Section 13 thereof
RR No. 8-2014 Amends the provisions of RR No. 7-2014, specifically the deadlines prescribed under Section 13 thereof
RR No. 7-2014 Prescribes the affixture of Internal Revenue Stamps on imported and locally manufactured cigarettes and the use of the In
(IRSIS) for the ordering, distribution and monitoring thereof
RMO NO. 23-2013 Guidelines and Procedures for the Implementation of the Electronic Official Register Book (eORB) System
RMC NO. 10-2013 Transition Procedures for all Electronic Filing and Payment System (eFPS) Filers in Filing Tax returns Affected by the Re
Products Pursuant to the provisions of Republic Act No. 10351, “An Act Restructuring the Excise Tax on Alcohol and Toba
142, 143, 144, 145, 8, 131 and 288 of Republic Act No. 8424, Otherwise Known as the National Internal Revenue Code o
9334, and for Other Purposes
RR NO. 3-2013 Prescribing the Use of Electronic Official Register Book for Manufacturers of Tobacco Products and Regulated Raw Materia
RMC NO. 3-2013 Clarifying Certain Provisions of Revenue Regulations No. 17-2012 Implementing the Provisions of Republic Act No. 103
Memorandum Circular No. 90-2012 Providing the Initial Tax Classifications of Alcohol and Tobacco Products
RMCNO. 90-2012 Revised Tax Rates of Alcohol and Tobacco Products Under Republic Act No. 10351
RR NO. 17-2012 Prescribing the Implementing Guidelines on the Revised Tax Rates on Alcohol and Tobacco Products Pursuant to the Prov
Clarify Certain Provisions of Existing Revenue Regulations.
RMC NO. 26-2006 Clarifying Certain Provisions of Revenue Regulations (RR) No. 3- 2006, More Particularly on the Printing Requirements of
RR NO. 3-2006 Prescribing the Implementing Guidelines on the Revised Tax Rates on Alcohol and Tobacco Products pursuant to the P
clarifying certain provisions of existing Revenue Regulations thereto.
RMO NO. 35-2002 Prescribing the Guidelines and Procedures in the Processing and Issuance of Authority to Release Imported Goods (A
Purposes
RR NO. 1-97 Revenue Regulations governing the Excise Taxation of Cigars and Cigarettes
C. PETROLEUM PRODUCTS
RR NO. 2-2018 Providing for the Revised Tax Rates and other Implementing Guidelines on Petroleum Products Pursuant to Republic Act.
Reform for Acceleration and Inclusion (TRAIN) Law”
RMC NO. 38-2017 Circularizing the Full Text of the Decision of the Supreme Court dated November 29, 2016 in the case of Secretary of Fina
of Internal Revenue Kim S. Jacinto-Henares Vs. Representative Carmelo F. Lazatin and Ecozone Plastic Enterprises Corpora
RMC NO. 50-2014 Reiteration and Clarification on the Requirement of Issuance of Withdrawal Certificate for Every Removal of Petroleum or P
RMO NO.14-2014 Guidelines and procedures for the Processing and Issuance of An Electronic Authority to Release Imported Goods (eATRIG
RR NO. 2-2012 Tax Administration Treatment of Petroleum and Petroleum Products Imported into the Philippines Including those Coming
Zones and Registration of All Storage Tanks, Facilities, Depots and Terminals
RR NO. 3-2008 Amending Certain Provisions of Existing Revenue Regulations on the Granting of Outright Excise Tax Exemption on Re
Export or Sale/Delivery to International Carriers or to Tax-Exempt Entities/Agencies and Prescribing the Provisions for Ava
RR NO. 8-2006 Prescribing the Implementing Guidelines on the Taxation and Monitoring of the Raw Materials Used and the Bioethanol-
under the Fuel Bioethanol Program of the Department of Energy (DOE)
RMO 38-2003 Prescribing Uniform Guidelines and Procedures in the Processing of Various Permits for Excise Tax Purposes
RMO 35-2002 Prescribing the Guidelines and procedures in the Processing and Issuance of Authority to Release Imported Goods (A
Purposes
RR NO. 8-96 An Act Restructuring the Excise Tax on Petroleum Products, Reclassifying Natural Gas and Liquefied Natural Gas
Resources and Reducing the Excise Tax on Indigenous Petroleum
RR NO. 13-77 Petroleum Products Regulations
D. MISCELLANEOUS ARTICLES
D.1 AUTOMOBILES
RR NO. 24-2018 Further Amending Section 9 of Revenue Regulations No. 25-2003 Relative to the Determination by the Department of En
Excise Tax Exemption are Hybrid or Purely Electric Vehicles pursuant to the Provisions of Republic Act No. 10963, O
Acceleration and Inclusion (TRAIN) Law
RR NO. 5-2018 Revenue Regulations Implementing the Adjustment of Rates on the Excise Tax on Automobiles pursuant to the Provisio
known as the “Tax Reform for Acceleration and Inclusion (TRAIN) Law" Amending for the Purpose Revenue Regulations N
RR NO. 4-2017 Amending Certain Provisions of Revenue Regulations No. 2-2016
RR No. 2-2016 Prescribes the guidelines and procedures in the issuance of Authority to Release Imported Goods (ATRIGs) for imported a
custody
RR No. 4-2016 Extends the deadline for the issuance of Authority to Release Imported Goods (ATRIGs) for automobiles already released fro
RMO No. 12-2016 Prescribes the policies, guidelines and procedures in the manual issuance of Authority to Release Imported Goods (A
released from the custody of Bureau of Customs pursuant to RR No. 2-2016
RMO NO. 14-2014 Guidelines and Procedures for the Processing and Issuance of An Electronic Authority to Release Imported Goods (eATRIG
RMO NO. 21-2013 Amending the Provisions of Revenue Memorandum Order (RMO) No. 35-2002, as Amended by RMO No. 20-2006 Prescri
Processing and Issuance of Authority to Release Imported Goods (ATRIG) for Excise Tax Purposes
RMO NO. 20-2006 Amendment to Certain Sections of RMO No. 35-2002
RMC NO. 60-2003 Clarifying Certain Issues Raised Relative to the Implementation of Revenue Regulations No. 25-2003 Governing the Im
Pursuant to Republic Act No. 9224
RR NO. 25-2003 Amended Revenue Regulations Governing the Imposition of Excise Tax on Automobiles pursuant to the Provisions of Rep
the Excise Tax on Automobiles, Amending for the Purpose the NIRC of 1997, and for Other Purposes
RR NO. 4-2003 Amending Certain Section of Revenue Regulations No. 14-97, as Amended by Revenue Regulations No. 14-99, Otherw
Governing the Imposition of Excise Tax on Automobiles
RMO NO. 35-2002 Prescribing the Guidelines and Procedures in the Processing and Issuance of AUTHORITY TO RELEASE IMPORTED
Added Tax Purposes
RR NO. 14-99 Amending Section 2 of Revenue Regulations No. 14-97 Otherwise known as Revenue Regulations Governing the Imposit
Other Motor Vehicles
RR NO. 14-97 Revenue Regulations Governing the Imposition of Excise Tax on Automobiles and Other Motor Vehicles
D2. NON ESSENTIAL GOODS (Jewelries, Perfumes and Toilet Waters, Yachts and Other Vessels for Pleasure and Sports
RMC NO. 33-2004 Revised Rules and Regulations Implementing Republic Act No. 8502, Otherwise Known As, The “Jewelry Industry Develop
Purposes
RMC NO. 17-2002 Green Cross Baby Cologne and all Other Cologne Products
RR NO. 1-99 Rules and Regulations implementing the Tax Incentives Provided under Section 3 (b) and (d) of Republic Act No. 8502 o
Development Act of 1998”
RR NO. 8-84 Cosmetic Products Regulations
D.3 SWEETENED BEVERAGES
RR NO. 20-2018 Prescribing the Implementing Rules and Guidelines on the Imposition of Excise Tax on Sweetened Beverages Pursuant to Section
47 of Republic Act No. 10963 otherwise known as the “Tax Reform Acceleration and Inclusion (TRAIN) Law”.
D.4 NON-ESSENTIAL SERVICES
RR No. 2-2019 Rules and Regulations Implementing the Imposition of Excise Tax on Non-Essential Services Introduced by Republic Act
No. 10963, otherwise known as the Tax Reform for Acceleration and Inclusion (TRAIN) Law
E. MINERAL PRODUCTS
RMC No. 6-2019 Clarifying the Provisions of Revenue Memorandum Circular No. 105-2018 Pertaining to the submission of Alphabetical
Produced Coal from Whom Excise Taxes Due on Coal Were Collected by the Producer Acting as Collecting Agent For Rem
(BlR)
RR NO. 1-2018 Providing for the Revised Tax Rates on Mineral Products pursuant to the Provisions of Republic Act No. 10963, ot
Acceleration and Inclusion (TRAIN) Law" Amending for the Purpose Revenue Regulations No. 13-94
RR NO. 7-2008 Taxation on the Sale to the Bangko Sentral ng Pilipinas of Gold and Other Metallic Mineral Products Extracted or Pro
Amending Section 2.57.2 (t) of Revenue Regulations No. 2-98, as amended
Purposes
RR NO. 8-96 An Act Restructuring the Excise Tax on Petroleum Products, Reclassifying Natural Gas and Liquefied Natural Gas
Resources and Reducing the Excise Tax on Indigenous Petroleum
RR NO. 13-94 Revenue Regulations Governing the Imposition of Excise Tax on Minerals and Mineral Products
F. OTHER ISSUANCES FOR EXCISABLE PRODUCTS
RMO No. 4-2019 Creation of Alphanumeric Tax Code (ATC) for Selected Excise Taxes on Exports Paid through Payment Form – BIR Form N
OM2018-01-03/Annex A/Annex B1/Annex Transitory guidelines relative to the implementation of TRAIN Law governing Excise Tax on petroleum products, automobi
B2/Annex B3/Annex C1/Annex C2/Annex issuance of the Implementing Rules and Regulations.
C3/Annex D
RMO NO. 16-2018 Modification of Alphanumeric Tax Code (ATC) for Sweetened Beverages
RMO NO. 1-2018 Creation of Alphanumeric Tax Code (ATC) for Sweetened Beverages
RMC NO. 4-2018 Transition Procedures for All Electronic Filing and Payment System (eFPS) Filers in Filing Tax Return Affected by the
Pursuant to the Provisions of Republic Act (RA) No. 10963, Otherwise Known as the Tax Reform for Acceleration and
42,43, 45, 46, 47, and 48 thereof, governing excise tax on Cigars and Cigarettes, Petroleum Products, Automobiles, No
Procedures), Sweetened Beverages, and Mineral Products, respectively
RMC No. 104-2017 Circularizes the copy of RA No. 10963 (Tax Reform for Acceleration and Inclusion [TRAIN] Act) and President Duterte's V
RMO No. 16-2017 Amends certain provisions of RMO No. 5-2004 particularly on the application, processing and issuance of ATRIG on im
relative to the advance payment of Value-Added Tax on the sale of flour
RMC No. 2-2015 Informs taxpayers relative to the availability of certain Annual Income Tax and Excise Tax Returns in Offline eBIRForms
the eFPS
RMC No. 74-2014 Announces the availability of BIR Form Nos. 2200-A (Excise Tax Return for Alcohol Products) and 2200-T (Excise Tax R
Filing and Payment System and Electronic Bureau of Internal Revenue Forms Offline Package
RR No. 10-2014 Amends further Section 3 of RR No. 9-2001, as amended, expanding the coverage of taxpayers required to file and pay
Payment System (eFPS)
RMO No. 17-2013 Creates, modifies and drops Alphanumeric Tax Code on Excise Tax pursuant to Republic Act No. 10351, “An Act Rest
Tobacco Products” as Implemented by Revenue Regulations No. 17-2012
G. TAX ADVISORIES ON EXCISE TAXES

DATE PARTICULARS
May 18, 2018 Please be advised that starting May 18,2018, all concerned excise taxpayers who will be paying excise tax on Invasive Cos
0605 - Payment Form indicating therein-ATC Code "XC010" and Tax Type “XC". Accordingly, the BIR Form No. 1620-X
Invasive Cosmetic Procedures together with the assigned Alphanumeric Tax Code (ATC) of "WI800" for individual and "W
Revenue Memorandum Order No. 9-2018 dated January 4, 2018 will be replaced with BIR Form No. 2200-C - Excise
separate advisory on this effect shall be issued as soon as BIR Form No. 2200-C - Excise Tax on Cosmetic Procedures is
issued to amend Memorandum dated January 5, 2018 and Revenue Memorandum Circular No. 4-2018 dated January 8,201
Final Withholding of Excise Tax on Invasive Cosmetic Procedures.
Advisory on dedicated e-mail account for attachment to Excise Tax Return BIR Form No. 2200-S (for sweetened beve
cosmetic procedures)
OM No. 2018-01-01 Taxpayers subject to Excise Tax and using eFPS are mandated to e-file and e-pay the corresponding Excise Taxes due on rem
OM No. 2017-12-06 Payment Form for Excise Tax due on sweetened beverages.
RMO No. 29-2018 Creation of Alphanumeric Tax Code (ATC) for Selected Excise Taxes under Republic Act (RA) No. 10963, otherwise kn
Inclusion (TRAIN) Act
[return to index]
H. CODAL REFERENCE:
PARTICULAR SECTION IN THE NIRC OF 1997, AS AMENDED

ALCOHOL PRODUCTS 141-143
TOBACCO PRODUCTS 144-147
PETROLEUM PRODUCTS 148
MISCELLANEOUS ARTICLES 149-150
MINERAL PRODUCTS 151
SWEETENED BEVERAGES 150(B)-TRAIN LAW
INVASIVE COSMETIC PROCEDURES 150(A)-TRAIN LAW
[return to index]
Percentage Tax Description
Percentage tax is a business tax imposed on persons, entities, or transactions specified under Sections 116 to 127 of the National Internal Revenue Code of 1997 (also
known as Tax Code), as amended, and as required under special laws.
Quarterly Percentage Tax under Sections 116 to 126 of the Tax Code, as amended
BIR Form 2551Q - Quarterly Percentage Tax Return
Who are required to file?
Persons refer to individuals and non-individuals, which include, but are not limited to, estates, trusts, partnerships, and corporations.
1. Persons, who are not VAT-registered, who sell goods, properties or services, whose annual gross sales and/or receipts do not exceed three million pesos
(Php3,000,000.00) and are exempt from value-added tax (VAT) under Section 109 (BB) of the National Internal Revenue Code, as amended by Republic Act
(RA) No. 10963.
2. Persons who lease residential units where the monthly rental per unit exceeds fifteen thousand pesos (Php15,000.00) but the aggregate of such rentals of the
lessor during the year does not exceed three million pesos (Php3,000,000.00)
3. Persons engaged in the following industries/transactions:
a. Cars for rent or hire driven by the lessee, transportation contractors, including persons who transport passengers for hire, and other domestic carriers by
land for the transport of passengers (except owners of bancas and owners of animal-drawn two-wheeled vehicle) and keepers of garages
b. International air/shipping carriers doing business in the Philippines on their gross receipts derived from transport of cargo from the Philippines to
another country
c. Franchise grantees of –
i. radio and/or television broadcasting companies whose annual gross receipts for the preceding year do not exceed Php 10,000,000.00 and did
not opt to register as VAT taxpayers, and
ii. gas and water utilities.
d. Overseas dispatch, message or conversation transmitted from the Philippines by telephone, telegraph, tele-writer exchange, wireless and other
communication equipment services, except those transmitted by:
i. The Philippine Government or any of its political subdivisions or instrumentalities;

ii. Diplomatic services;
iii. Public international organizations or any of their agencies based in the Philippines enjoying privileges, exemptions and immunities which the
Philippine Government is committed to recognize pursuant to international agreement; and
iv. News services for messages which deal exclusively with the collection of news items for, or the dissemination of news item through,
public press, radio or television broadcasting or a newsticker service furnishing a general news service similar to that of the public press.
e. Banks, non-bank financial intermediaries performing quasi-banking functions
f. Other non-bank financial intermediaries (including pawnshops as clarified under Revenue Regulations [RR] No. 10 – 2004)
g. Person, company or corporation (except purely cooperative companies or associations) doing life insurance business in the Philippines
h. Fire, marine or miscellaneous agents of foreign insurance companies
i. Proprietor, lessee or operator of cockpits, cabarets, night or day clubs, boxing exhibitions, professional basketball games, Jai-Alai and
racetracks, including videoke bars, karaoke bars, karaoke televisions, karaoke boxes and music lounges as clarified under Revenue Memorandum
Circular (RMC) No. 18 – 2010
j. Winnings or 'dividends' in horse races
How to file/pay?
1. BIR Form 2551Q - Quarterly Percentage Tax Return Form

2. Duly issued Certificate of Creditable Tax Withheld at Source (BIR Form 2307), if applicable
3. Duly approved Tax Debit Memo, if applicable
4. For amended return, proof of payment and the return previously filed
5. Authorization letter, if filed by an authorized representative
6. Copy of Certificate of Registration issued by Cooperative Development Authority for cooperatives, and from the National Electrification Administration for
electric cooperatives
Procedures
1. For Manual filing and/or payment:

a. Download the newly-revised BIR Form 2551Q pdf file format under the BIR Forms-VAT/Percentage Tax Returns section of the BIR website.
b. Properly fill-up BIR Form 2551Q in triplicate copies.
c. Proceed to any Authorized Agent Bank (AAB)located within the territorial jurisdiction of the Revenue District Office (RDO) where the taxpayer is
registered and present the duly accomplished BIR Form 2551Q and other requirements. If paying manually, present the aforementioned documents
together with BIR-prescribed deposit slip, and payment to the respective AAB. The Quarterly Percentage Tax shall be paid at the time the return is filed
by the taxpayer.
d. In places where there are no AABs, the duly accomplished BIR Form 2551Q, together with the required attachments and payment, shall be filed/paid
with the Revenue Collection Officer (RCO), thru the Mobile Revenue Collection Officers System (MRCOS) facility, or duly Authorized Treasurer of
the city or municipality where said business or principal place of business / where the taxpayer is registered, who will issue an Electronic Revenue
Official Receipt (eROR).
e. Receive copy of BIR Form 2551Q duly validated/stamp-received by the AAB/RCO/authorized City or Municipal Treasurer.
f. Manual Filers who want to pay online can pay through GCash Mobile Payment, LandBank of the Philippines (LBP) Linkbiz Portal (for taxpayers who
have ATM account with LBP/Bancnet ATM or Debit Card), or DBP Tax Online (for holders of VISA/Master Credit Card/Bancnet ATM or Debit Card).
2. For eFPS filing and/or payment:
a. Use the existing and enhanced old BIR Form 2551Q in the eFPS system which contains all the alphanumeric tax codes (ATCs) enumerated in the said
form in filing the return.
b. Taxable amount to be indicated in the quarterly percentage return shall be the total gross sales/receipts for the quarter.
c. In case percentage taxes for the first, second and/or third month of the quarter had been paid, payment/s made are to be reflected in BIR Form 2551Q in
Item No. 20A-Creditable Percentage Tax Withheld per BIR Form 2307.
d. After e-filing, proceed to online payment by clicking the proceed to payment button and pay the quarterly percentage tax due.
3. For eBIRForms filing and/or payment:
a. Use the existing enhanced old BIR Form 2551Q in Offline eBIRForms Package V7, which contained all the alphanumeric tax codes (ATCs) enumerated
in BIR Form 2551M in filing the return.
b. Taxable amount to be indicated in the quarterly percentage return shall be the total gross sales/receipts for the quarter.
c. In case percentage taxes for the first, second and/or third month of the quarter had been paid, payment/s made are to be reflected in BIR Form 2551Q in
Item No. 20A-Creditable Percentage Tax Withheld per BIR Form 2307.
d. Proceed to any AAB located within the territorial jurisdiction of the RDO where the taxpayer is registered and present the duly accomplished BIR Form
2551Q and other requirements. If there is payment that will be done manually, present the aforementioned documents together with BIR-prescribed
deposit slip, and payment to the respective AAB. The Percentage Tax shall be paid at the time the return is filed by the taxpayer.
e. In places where there are no AABs, the duly accomplished BIR Form 2551Q, together with the required attachments and payment, shall be filed/paid
with the RCO, thru the MRCOS facility, or duly Authorized Treasurer of the city or municipality where said business or principal place of business /
where the taxpayer is registered, who will issue an Electronic Revenue Official Receipt (eROR).
f. eBIRForms Filers who want to pay online can pay through GCash Mobile Payment, LandBank of the Philippines (LBP) Linkbiz Portal (for taxpayers
who have ATM account with LBP/Bancnet ATM or Debit Card), or DBP Tax Online (for holders of VISA/Master Credit Card/Bancnet ATM or Debit
Card).
Note: "No payment" returns filed late will result on imposition by the RDO of penalties, which shall be paid at the concerned AAB.
When to File/Pay
· Within twenty-five (25) days after the end of each taxable quarter
Quarterly Percentage Tax Rates Table
Coverage Taxable Base Tax Rate
Non-VAT registered persons under Section 109 (BB) Gross sales or receipts 3%
Domestic carriers and keepers of garages Gross receipts 3%
International air/shipping carriers doing business in the Gross receipts on transport of cargo from 3%
Philippines the Philippines to a foreign country
Franchise grantees: 2%
Gas and water utilities

3%
Radio and television broadcasting companies whose Gross receipts
annual gross receipts of the preceding year do not
exceed Php10,000,000 and did not opt to register as Gross receipts
VAT taxpayer
Overseas dispatch, message or conversation originating Amount paid for the service 10%
from the Philippines
Banks and non-bank financial intermediaries Interest, commissions and discounts from lending
performing quasi-banking functions activities as well as income from financial leasing, on
the basis of remaining maturities of instruments from
which receipts are derived:
• If maturity period is five years or less 5%
• If maturity period is more than five years 1%
Dividends and equity shares and net 0%

income of subsidiaries
Royalties, rentals of property, real or 7%

personal, profits from exchange and all
other items treated as gross income under
Sec. 32 of the Tax Code, as amended
Net trading gains within the taxable year of 7%

foreign currency, debt securities,
derivatives and other similar financial
instruments
Other non-bank financial intermediaries Interest, commissions, discounts and all 5%

other items treated as gross income under
the Tax Code, as amended
Interest, commissions, discounts from lending

activities, as well as income from financial leasing on
the basis of remaining maturities of instruments from
which such receipts are derived:
• If maturity period is five years or less 5%
• If maturity period is more than five years 1%
Life Insurance Company/Agent/Corporation (except Total premiums collected 2%

purely cooperative companies or associations)
Agents of foreign insurance companies (except reinsurance premium):
Insurance agents authorized under the Insurance Code Total premiums collected 4%
to procure policies of insurance for companies not
authorized to transact business in the Philippines
Owners of property obtaining insurance directly with Total premiums paid 5%

foreign insurance companies
Proprietor, lessee or operator of the following:
Cockpits Gross receipts 18%

Cabarets, Night or Day Clubs, videoke bars, karaoke Gross receipts 18%
bars, karaoke televisions, karaoke boxes and music
lounges
Boxing exhibitions (except when the World or Oriental Gross receipts 10%
Championship is at stake in any division, provided
further that at least one of the contenders for World
Championship is a citizen of the Philippines and said
exhibitions are promoted by a citizen/s of the
Philippines or by a corporation/ association at least
60% of the capital of which is owned by said citizen/s)
Professional basketball games (in lieu of all other Gross receipts 15%
percentage taxes of whatever nature and description)
Jai-alai and race track Gross receipts 30%
Winnings on horse races · Winnings or 'dividends' 10%
· Winnings from double 4%

forecast/quinella and trifecta bets
· Prizes of owners of winning race 10%

horses
[return to index]
Percentage Tax for Transactions Involving Shares of Stocks under Section 127 of the Tax Code, as amended
BIR Form 2552 - Percentage Tax Return for Transactions Involving Shares of Stocks Listed and Traded Through The Local Stock Exchange or Through Initial and/or
Secondary Public Offering
Who are required to file?

1. Every stock broker who effected a sale, barter or exchange of shares of stock listed and traded through the local stock exchange other than the sale by a dealer in
securities, which tax shall be paid by the seller/transferor
2. A corporate issuer, engaged in the sale, exchange or other disposition through Initial Public Offering (IPO) of shares of stock in closely-held corporations
3. A stock broker who effected a sale, exchange or other disposition through secondary public offering of shares of stock in closely-held corporations
How to file/pay?
1. BIR Form 2552 - Percentage Tax Return for Transactions Involving Shares of Stocks
2. Duly issued Certificate of Creditable Tax Withheld at Source (BIR Form 2307), if applicable
3. Proof of Exemption for transactions not subject to tax, if applicable
5. For amended return, proof of payment and the return previously filed
6. Authorization letter, if filed by an authorized representative
Procedures
1. For Manual filing and/or payment:

a. Properly fill-up the existing old BIR Form 2552 in triplicate copies using the new tax rate then compute the tax due thereon.
b. Proceed to any AAB located within the territorial jurisdiction of the RDO where the where the broker or corporate issuer is registered, and present the
duly accomplished old BIR Form 2552, together with the required attachments.
c. If paying manually, present the aforementioned documents together with BIR-prescribed deposit slip, and payment to the respective AAB. The
Percentage Tax Involving Shares of Stocks shall be paid at the time the return is filed by the taxpayer.
d. Receive the BIR Form 2552 taxpayer's copy duly validated and stamp-received by the teller of the AAB.
e. Manual Filers who want to pay online can pay through GCash Mobile Payment, LandBank of the Philippines (LBP) Linkbiz Portal (for taxpayers who
2. For eFPS filing and/or payment;
a. File online using the existing BIR Form 2552 in the eFPS and pay online the corresponding taxes due thereon by proceeding to payment. The result of
this transaction is deficiency tax.
b. To cover the deficiency tax, eFPS filers shall likewise file and pay online the deficiency tax using BIR Form No. 0605 and fill in the corresponding
information in the Tax Type (ST Percentage Tax – Stocks) and ATC field (ATC MC 031 – Deficiency Tax) in lieu of the correct BIR form that should
have been used.
c. eFPS filers who want to pay online can pay through GCash Mobile Payment, LandBank of the Philippines (LBP) Linkbiz Portal (for taxpayers who
d. Note: Once the enhanced version of the BIR Form 2552 is available in eFPS, there will be a notification/announcement through a Revenue
Memorandum Circular (RMC). Guidelines shall be issued accordingly if there is a necessity whether or not to amend the previously filed returns in
eFPS.
3. For eBIRForms filing and payment:
a. File online using the existing BIR Form 2552 in the eBIRForms Package and pay the corresponding tax dues via over-the-counter (OTC) of AAB under
the jurisdiction of the RDO where the taxpayer is registered.
b. For eBIRForms filers who want to pay online, you can pay thru GCash Mobile Payment, LandBank of the Philippines (LBP) Linkbiz Portal (for
taxpayers who have ATM account with LBP/Bancnet ATM or Debit Card), or DBP Tax Online (for holders of VISA/Master Credit Card/Bancnet ATM
or Debit Card).
c. The result of this transaction thru eBIRForms is deficiency tax.
d. To cover the resulting deficiency tax, eBIRForms filers shall likewise file and pay online the deficiency tax using BIR Form No. 0605 and fill in the
corresponding information in the Tax Type (ST Percentage Tax – Stocks) and ATC field (ATC MC 031 – Deficiency Tax) in lieu of the BIR Form 2552
that should have been used.
Note: "No payment" returns filed late will result on penalties that will be imposed by the RDO, which shall be paid at the concerned AAB.
When to File/Pay
1. For tax on sale of shares of stocks listed and traded through the local stock exchange (LSE) – within five (5) banking days from the date of collection
2. For tax on shares of stocks sold or exchanged through primary offering - within 30 days from the date of listing in the LSE
3. For tax on shares of stocks sold or exchanged through secondary public offering - within five (5) banking days from the date of collection
Note: Aside from BIR Form No. 2552, a stockbroker or corporate issuer is also required to submit a true and complete return to the Secretary of the Stock Exchange of
which he is a member. The said return shall contain a declaration of all transactions effected through him during the preceding week and of taxes collected by him and
turned over to the BIR.
Percentage Tax for Transactions Involving Shares Rates Table
Coverage Basis Tax Rate
Sale, barter, exchange or other disposition of shares of stock listed and traded through the Local Gross selling price or gross value in money 6/10 of 1%
Stock Exchange other than the sale by a dealer of securities
Sale, barter or exchange or other disposition through: Gross selling price or gross value in money
 Initial Public Offering (IPO) – the issuing corporation shall pay the imposed tax
 Secondary Public Offering – the seller shall pay the imposed tax Proportion of disposed shares to total outstanding shares after the
listing in the local stock exchange:
 Up to 25% 4%
 Over 25% but not over 33 1/3% 2%
 Over 33 1/3% 1%
[return to index]
LIST OF RELEVANT REVENUE ISSUANCES
REVENUE REGULATIONS (RRs)
Issuance No. Subject Date of Issue
RR No. 9-2018 Prescribes the rules and regulations implementing the increase in the Stock February 26,
Transfer Tax pursuant to RA No. 10963 (TRAIN Law) 2018
(Published in Manila Bulletin on February 28, 2018)
Digest| Full Text
RR No. 8-2015 Amends RR No. 6-2015 on the definition of raw cane sugar for purposes of May 27, 2015
the imposition of advance business tax (Value-Added Tax or Percentage
Tax) and for other related purposes
(Published in Manila Bulletin on May 28, 2015)
Digest|Full Text
RR No. 6-2015 Implements regulations imposing advance Business Tax (VAT or March 31, 2015
Percentage Tax) payments on sugar and for other related purposes
(Published in Manila Bulletin on April 1, 2015)

Digest|Full Text
RR No. 8-2008 Supplementing Revenue Regulations No. 9-2004, as Amended by Revenue August 29, 2008
Regulations No. 10-2004, Clarifying that the Transactions of the Bangko
Sentral ng Pilipinas (BSP) Entered into the Exercise of its
Governmental/Regulatory Authority are outside of the Coverage of the
Gross Receipts Tax Imposed Under Sections 121 and 122 of the 1997
National Internal Revenue Code, as Last Amended by Republic Act No.
9337
(published in Philippine Star on August 30, 2008)
Digest|Full Text
RR No. 9-2007 Prescribing the Updated Minimum Monthly/Quarterly Gross Receipts in August 1, 2007
Computing the Percentage Tax of Domestic Carriers and Keepers of
Garages.
Digest | Full Text
RR No. 9-2004 Implements certain provisions of Republic Act No. 9238, re-imposing the June 25, 2004
gross receipts tax on banks and non-bank financial intermediaries
performing quasi-banking functions and other non-bank financial
intermediaries beginning January 1, 2004
(published in Manila Standard on July 1, 2004)
Digest | Full Text
RR No. 15-2002 Governs the imposition of Income Tax on the Gross Philippine Billings, October 7, 2002
other income of International Air Carriers and Common Carrier's Tax, as
well as the manner of claiming deductions on travel expenses and freight
charges incurred.
(published in Manila Bulletin on Oct. 11, 2002)
Digest|Full Text
RR No. 1-2003 Implementing Section 5 of Republic Act No. 8424, Otherwise Known as January 7, 2003
the Tax Reform Act of 1997, and Other Pertinent Provisions of the National
Internal Revenue Code of 1997, as last Amended by Republic Act No.
9010, Imposing Value-Added Tax (VAT) on Sale of Services by Persons
Engaged in the Practice of Profession or Calling and Professional Services
Rendered by General Professional Partnerships; Services Rendered by
Actors, Actresses, Talents, Singers and Emcees; Radio and Television
Broadcasters and Choreographers; Musical, Radio, Movie, Television and
Stage Directors; and Professional Athletes, as Well as Services Rendered
by Customs, Real Estate, Stock, Immigration and Commercial Brokers,
beginning January 1, 2003.
(published in Phil. Daily Inquirer on Jan. 8, 2003)
Digest|Full Text
RR No. 3-1995 Implementing Republic Act No. 7717, An Act Imposing a Tax on the Sale, February 7, 1995
Barter or Exchange of Shares of Stock Listed and Traded Through the
Local Stock Exchange or Through Initial Public Offering, Amending for
the Purpose the National Internal Revenue Code, as Amended, by Inserting
a New Section and Repealing Certain Subsections Thereof
REVENUE MEMORANDUM CIRCULARs (RMCs)
Issuance No. Subject Date of Issue
RMC No. 26- Circularizing the Revised BIR Form No. 2551Q (Quarterly Percentage April 25, 2018
2018 Tax Return) January 2018 (ENCS)Full Text | Annex A | Guidelines
RMC No. 2- Provides the transition procedures for all taxpayers filing tax returns January 8, 2018
2018 affected by the revised tax rates pursuant to the provisions of RA No.
10963 (Tax Reform for Acceleration and Inclusion or TRAIN Law)
Digest|Full Text
RMC No. 104- Circularizes the copy of RA No. 10963 (Tax Reform for Acceleration December 29,
2017 and Inclusion [TRAIN] Act) and President Duterte’s VETO message to 2017
the TRAIN Act
Digest|Full Text|VETO|RA 10963
RMC No. 62- Clarification on proper tax treatment of passed-on Gross Receipts Tax June 14, 2016
2016
Digest|Full Text
RMC No. 71- Allows taxpayers who are mandated to file their tax returns thru October 30, 2015
2015 Electronic Filing and Payment System and Electronic BIR Forms in
areas affected by Typhoon Lando to temporarily file their tax returns
and pay their taxes manually
Digest|Full Text
RMC No. 40- Clarifying the Nature and Extent of the Agricultural Cooperative Being July 15, 2015
2015 the Producer of Sugar for Exemption from Advance VAT and
Percentage Tax Purposes Pursuant to Section 5(b)(c) of Revenue
Regulations (RR) No. 8-2015; in relation to Section 4(a) of RR No. 13-
2008, and in line with Section 8(b.2.1.2) of the Joint Rules and
Regulations Implementing Articles 60, 61 and 144 of Republic Act
(RA) No. 9520, or the Cooperative Code of 2008.
Digest|Full Text
RMC No. 25- Clarifies pertinent provisions of RR No. 6-2015 more particularly on May 6, 2015
2015 the imposition of advance business tax (Value-Added Tax or Percentage
Tax) on raw cane sugar and refined sugar
Digest|Full Text
RMC No. 24- Clarifies pertinent provisions of Revenue Regulations No. 2-2015 more May 6, 2015
2015 particularly on the submission of scanned copies of BIR Form Nos.
2307 and 2316
Digest|Full Text
RMC No. 21- Provides alternative modes in the filing of BIR Form Nos. 2551M, April 20, 2015
2015 2551Q, 2550M and 2550Q using the electronic platforms of BIR
Digest|Full Text
RMC No. 9- Clarifying the taxability of association dues, membership fees and other January 30, 2013
2013 assessments/charges collected by homeowners’ associations
Digest | Full Text
RMC No. 49- Further Amending Certain Portions of RMC No. 30-2008, as Amended June 7, 2010
2010 by RMC No. 59-2008, on the Subject of the Taxability of Insurance
Companies for Minimum Corporate Income Tax (MCIT), Business Tax
and Documentary Stamp Tax Purposes
Digest|Full Text
RMC No. 18- Clarification on the Coverage and Taxability of Amusement Places March 8, 2010
2010 under Section 125(b) of the National Internal Revenue Code of 1997, as
Amended
Digest|Full Text
RMC No. 16- Clarifying the Instruments Embraced by the Term "Deposit Substitutes" March 17, 2009
2009 Under Revenue Regulations No. 8-2008
Digest|Full Text
RMC No. 59- Amending Certain Portions of RMC No. 30-2008 on the Subject of the August 27, 2008
2008 Taxability of Insurance Companies for Minimum Corporate Income
Tax, Business Tax and Documentary Stamp Tax Purposes
Digest|Full Text
RMC No. 46- Clarification of Issues Concerning Common Carriers by Air and Their June 20, 2008
2008 Agents Relative to the Revenue and Receipt from Transport of
Passengers, Goods/Cargoes and Mail, and from Excess Baggage
Digest|Full Text
RMC No. 30- Clarifies the Taxability of Insurance companies for Minimum Corporate April 8, 2008
2008 Income Tax, Business Tax and Documentary Stamp Tax Purposes
Digest|Full Text
RMC No. 73- Guidelines and Policies Applicable to the Business Tax Applicable to November 26,
2004 Pawnshops as a Result of the Issuance of Revenue Regulations No. 10- 2004
2004, Including Pawnshops Under the Classification of Other Non-
Bank Financial Intermediaries in Accordance with the Power Granted
the Commissioner of Internal Revenue Under Section 4 of Republic Act
No. 9238
Digest|Full Text
RMC No. 37- Settlement of the Value-Added Tax Liabilities of Pawnshops for June 16, 2004
2004 Taxable Years 1996 to 2002
Digest|Full Text|Annex A|Annex 1|Annex 2
RMC No. 10- Guidelines and Policies to Supplement RMC No. 9-2004 issued in February 23, 2004
2004 Relation to the Implementation of Republic Act No. 9238 for Banks and
Non-Bank Financial Intermediaries, Specifically for the Re-imposition
of Gross Receipts Tax
Digest|Full Text
RMC No. 9- Guidelines and Policies Applicable to the Business Tax Applicable to February 19, 2004
2004 Banks and Non-Bank Financial Intermediaries Performing Quasi-
Banking Functions and other Non-Bank Financial Intermediaries as a
Result of the Enactment and Effectivity of Republic Act No. 9238, An
Act Amending Certain Provisions of the National Internal Revenue
Code of 1997, as amended, by Excluding Several Services from the
Coverage of the Value-Added Tax and Re-Imposing the Gross Receipts
Tax on Banks and Non-Bank Financial Intermediaries Performing
Quasi-Banking Functions and Other Non-Bank Financial Intermediaries
Beginning January 1, 2004
Digest|Full Text | RA 9238
RMO No. 69- Clarifying the Tax Base for Purposes of the Percentage (Gross October 22, 2003
2003 Receipts) Tax Imposed under Sections 121 and 122 of the Tax Code
Digest|Full Text
RMC No. 14- Waiver of Penalties on Persons Engaged in the Practice of Profession or March 26, 2003
2003 Calling and Professional Services Rendered by General Professional
Partnerships; Services Rendered by Actors, Actresses, Talents, Singers
and Emcees, Radio and Television Broadcasters and Choreographers,
Musical, Radio, Movie, Television and Stage Directors, and
Professional Athletes; and, Services Rendered by Customs, Real Estate,
Stock, Immigration and Commercial Brokers Becoming Liable to VAT
or Percentage Tax, Whichever is Applicable, Beginning January 1,
2003 Who Failed to File Their VAT/Percentage Tax Returns for the
Months of January and February on the Due Dates Specified Under
Revenue Regulations No. 1-2003, as amended by Revenue Regulations
Nos. 3-2003 and 11-2003
Digest|Full Text
RMC No. 6- Clarifying Certain Issues Relative to the Services Rendered by January 22, 2003
2003 Individual Professional Practitioners, General Professional Partnerships,
Entertainers, and Professional Athletes who are subject to the Value-
Added Tax or Percentage Tax, whichever is Applicable, Beginning
January 1, 2003
Digest|Full Text|Annex A
RMC No. 51- Imposition of the Gross Receipts Tax Under Sections 121 and 122 of November 15,
2002 the Tax Code on Items of Gross Income Subject to Final Withholding 2002
Tax and Clarifying the Tax Base thereof
Digest
[return to index]
Value-Added Tax Description
Value-Added Tax (VAT) is a form of sales tax. It is a tax on consumption levied on the sale, barter, exchange or lease of goods or properties and services in the
Philippines and on importation of goods into the Philippines. It is an indirect tax, which may be shifted or passed on to the buyer, transferee or lessee of goods, properties
or services.
[return to index]
Who are Required to File VAT Returns?
 Any person or entity who, in the course of his trade or business, sells, barters, exchanges, leases goods or properties and renders services subject to VAT, if the
aggregate amount of actual gross sales or receipts exceed Three Million Pesos (Php3,000,000.00)
 A person required to register as VAT taxpayer but failed to register
 Any person, whether or not made in the course of his trade or business, who imports goods
[return to index]
Monthly VAT Declarations
BIR Form 2550M - Monthly Value-Added Tax Declaration (February 2007 ENCS)
1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form No. 2307), if applicable
2. Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax at Source (SAWT), if applicable
4. Duly approved Tax Credit Certificate, if applicable
5. Authorization letter, if return is filed by authorized representative.
Procedures
1. Fill-up BIR Form No. 2550M in triplicate copies (two copies for the BIR and one copy for the taxpayer).
2. If there is payment:
o File the Monthly VAT declaration, together with the required attachments, and pay the VAT due thereon with any Authorized Agent Bank (AAB) under
the jurisdiction of the Revenue District Office (RDO)/Large Taxpayers District Office (LTDO) where the taxpayer (head office of the business
establishment) is registered.
o Accomplish and submit BIR-prescribed deposit slip, which the bank teller shall machine validate as evidence that payment was received by the AAB.
The AAB receiving the tax return shall stamp mark the word "Received" on the return and machine validate the return as proof of filing the return and
payment of the tax.
o In places where there are no AAB, file the Monthly VAT declaration, together with the required attachments and pay the VAT due with the Revenue
Collection Officer (RCO)
o The RCO shall issue a Revenue Official Receipt upon payment of the tax.
3. If there is no payment:
o File the Monthly VAT Declaration, together with the required attachments, with the RDO/LTDO/Large Taxpayers Assistance Division, Collection
Agent having jurisdiction over the registered address of the taxpayer (head office of the business establishment).
Deadline
 Manual Filing - Not later than the 20th day following the end of each month
 Through Electronic Filing and Payment System (eFPS):
Business Industry Period for filing Monthly VAT

Declarations
Group A
Insurance and Pension 25 days following the end of the
Funding month
Activities Auxiliary to Financial Intermediation
Construction
Water Transport
Hotels and Restaurants
Land Transport
Group B
Manufacture and Repair of Furniture 24 days following the end of the
Manufacture of Basic Metals month
Manufacture of Chemicals and Chemical Products
Manufacture of Coke, Refined Petroleum & Fuel Products
Manufacture of Electrical Machinery & Apparatus N.E.C.
Manufacture of Fabricated Metal Products
Manufacture of Food, Products & Beverages
Manufacture of Machinery & Equipment NEC
Manufacture of Medical, Precision, Optical Instruments
Manufacture of Motor Vehicles, Trailer & Semi-Trailers
Manufacture of Office, Accounting & Computing
Machinery
Manufacture of Other Non-Metallic Mineral Products
Manufacture of Other Transport Equipment
Manufacture of Other Wearing Apparel
Manufacture of Paper and Paper Products
Manufacture of Radio, TV & Communication Equipment/
Apparatus
Manufacture of Rubber & Plastic Products
Manufacture of Textiles
Manufacture of Tobacco Products
Manufacture of Wood & Wood Products
Manufacturing N.E.C.
Metallic Ore Mining
Non-Metallic Mining & Quarrying
Group C
Retail Sale 23 days following the end of the
Wholesale Trade and Commission Trade month
Sale, Maintenance, Repair of Motor Vehicle, Sale of
Automotive Fuel
Collection, Purification and Distribution of Water
Computer and Related Activities
Real Estate Activities
Group D
Air Transport 22 days following the end of the
Electricity, Gas, Steam & Hot Water Supply month
Postal & Telecommunications
Publishing, Printing & Reproduction of Recorded Media
Recreational, Cultural & Sporting Activities
Recycling
Renting of Goods & Equipment
Supporting & Auxiliary Transport Services
Group E
Activities of Membership Organizations, Inc. 21 days following the end of the
Health and Social Work month
Public Admin & Defense Compulsory Social Security
Research and Development
Agricultural, Hunting, and Forestry
Farming of Animals
Fishing
Other Service Activities
Miscellaneous Business Activities
Unclassified
[return to index]
Quarterly Value-Added Tax Return
BIR Form No. 2550Q - Quarterly Value-Added Tax Return (February 2007 ENCS)
1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form 2307), if applicable
2. Summary Alphalist of Withholding Agents of Income Payments Subjected to Withholding Tax at Source (SAWT), if applicable
4. Duly approved Tax Credit Certificate, if applicable
5. Previously filed return and proof of payment, for amended return
6. Authorization letter, if return is filed by authorized representative
Procedures
Fill-up BIR Form 2550Q in triplicate copies (two copies for the BIR and one copy for the taxpayer)
1. If there is payment:
o File the Monthly VAT declaration, together with the required attachments, and pay the VAT due thereon with any Authorized Agent Bank (AAB) under
the jurisdiction of the Revenue District Office (RDO)/Large Taxpayers District Office (LTDO) where the taxpayer (head office of the business
establishment) is registered.
o Accomplish and submit BIR-prescribed deposit slip, which the bank teller shall machine validate as evidence that payment was received by the AAB.
The AAB receiving the tax return shall stamp mark the word "Received" on the return and machine validate the return as proof of filing the return and
payment of the tax.
o In places where there are no AAB, file the Monthly VAT declaration, together with the required attachments and pay the VAT due with the Revenue
Collection Officer (RCO)
o The RCO shall issue a Revenue Official Receipt upon payment of the tax.
2. If there is no payment:
o File the Quarterly VAT Return, together with the required attachments with the RDO/LTDO/Large Taxpayers Assistance Division, Collection Agent
having jurisdiction over the registered address of the taxpayer (head office of the business establishment).
Reminders:
 Only one consolidated Monthly VAT Declaration/Quarterly VAT Return shall be filed covering the results of operation of the head office as well as the branches
for all lines of business subject to VAT.
 The Quarterly Summary Lists of Sales and Purchases shall be submitted in Compact Disk-Recordable (CDR) following the format provided under Section
4.114-3(g) of RR No. 16-2005, as amended by RR No. 1-2012.
 The Quarterly Summary Lists of Sales and Purchases shall be submitted through electronic filing facility for taxpayers under the jurisdiction of the Large
Taxpayers Service (LTS) and those enrolled under the eFPS.
Deadline
Within twenty five (25) days following the close of the taxable quarter.
[return to index]
Value-Added Tax Rates
 On sale of goods and properties - twelve percent (12%) of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged
 On sale of services and use or lease of properties - twelve percent (12%) of gross receipts derived from the sale or exchange of services, including the use or
lease of properties
 On importation of goods - twelve percent (12%) based on the total value used by the Bureau of Customs in determining tariff and customs duties, plus customs
duties, excise taxes, if any, and other charges, such as tax to be paid by the importer prior to the release of such goods from customs custody; provided, that
where the customs duties are determined on the basis of quantity or volume of the goods, the VAT shall be based on the landed cost plus excise taxes, if any.
 On export sales and other zero-rated sales - 0%
[return to index]
REVENUE REGULATIONS (RRs)

Issuance No. Subject Matter Date of Issue
RR No. 15-2018 Amends RR No. 8-2018 particularly on the due date for the April 5, 2018
updating of registration from VAT to Non-VAT (Published in
Manila Bulletin on April 7, 2018) Digest| Full Text
RR No. 13-2018 Prescribes the Regulations implementing the Value-Added Tax March 15, 2018
(VAT) provisions under RA No. 10963 (TRAIN Law), which
further amends RR No. 16-2005 (Consolidated VAT
Regulations of 2005), as amended (Published in Manila Bulletin
on March 19, 2018) Digest| Full Text
RR No. 8-2018 Implements the amended provisions on Income Tax pursuant to February 20, 2018
RA No. 10963 (TRAIN Law)
(Published in Manila Bulletin on February 22,
2018) Digest|Full Text
RR No. 1-2017 Prescribes the regulations governing applications for Value- January 18, 2017
Added Tax (VAT) credit/refund filed under Section 112 of the
Tax Code, as amended, prior to the effectivity of RMC No. 54-
2014
(Published in Manila Bulletin on January 20, 2017)
Digest|Full Text
RR No. 5-2016 Amends Revenue Regulations No. 15-2012 by providing June 1, 2016
additional criteria in the accreditation of printers engaged in
printing services of official receipts, sales invoices and other
commercial receipts and/or invoices (Published in Manila
Bulletin on June 2, 2016) Digest|Full Text|Annex A
RR No. 15-2015 Amends Sections 4.109-1(B)(1)(s), (t) and (u) of RR No. 16- December 28,
2005, as amended, relative to sale, importation or lease of 2015
passenger or cargo vessels and aircraft, including engine,
equipment and spare parts thereof for domestic or international
transport operations
(Published in Manila Bulletin on December 29, 2015)
Digest|Full Text
RR No. 8-2015 Amends RR No. 6-2015 on the definition of raw cane sugar for May 27, 2015
purposes of the imposition of advance business tax (Value-
Added Tax or Percentage Tax) and for other related purposes
(Published in Manila Bulletin on May 28, 2015) Digest|Full
Text
RR No. 6-2015 Implements regulations imposing advance Business Tax (VAT March 31, 2015
or Percentage Tax) payments on sugar and for other related
purposes
(Published in Manila Bulletin on April 1, 2015) Digest|Full
Text
RR No. 5-2015 Amends RR No. 6-2014 and imposes penalties to taxpayers March 17, 2015
mandatorily covered by eFPS or eBIRForms who failed to file
tax returns under the electronic systems of the BIR
(Published in Manila Bulletin on March 19, 2015) Digest|Full
Text|Annex A
RR No. 4-2014 Prescribes the policies and guidelines in the monitoring of March 20, 2014
service fees of professionals
(Published in Manila Bulletin on March 21, 2014)
Digest|Full Text
RR No. 17-2013 Prescribes the guidelines on the preservation of books of September 27,
accounts and other accounting records 2013
(Published in Manila Bulletin and Philippine Daily Inquirer on
September 28, 2013)
Digest | Full text
RR No. 13-2013 Amends Section 2 (b) of Revenue Regulations No. 13-08 September 20,
relative to the definition of raw sugar for Value-Added Tax 2013
purposes
(Published in Manila Bulletin on September 24, 2013)
Digest | Full Text
RR No. 5-2013 Prescribes the tax treatment of sale of jewelry, gold and other April 22, 2013
metallic minerals to a non-resident alien individual not engaged
in trade or business within the Philippines or to a non-resident
foreign corporation
Digest | Full Text
RR No. 1-2013 Further expands the coverage of taxpayers required to file tax January 23, 2013
returns and pay taxes through the Electronic Filing and Payment
System to include National Government Agencies mandatorily
required to use the Electronic Tax Remittance Advice
(Published in Manila Bulletin on January 25, 2013)
Digest | Full Text | Annex A | Annex B
RR No. 15-2012 Prescribes the regulations on the accreditation of printers as a December 5, 2012
prerequisite to the printing services of official receipts, sales
invoices and other commercial receipts and/or invoices
(Published in Manila Bulletin on December 7, 2012)
Digest | Full Text | Annex A
RR No. 13-2012 Prescribes the VAT treatment on sale of adjacent residential October 12, 2012
lots, house and lots or other residential dwellings, thereby
amending certain provisions of RR No. 16-2005, as amended
(Published in Manila Bulletin on October 17, 2012)
Digest | Full Text
RR No. 6-2012 Clarifies the taxation on the sale of gold and other metallic April 2, 2012
minerals to Bangko Sentral ng Pilipinas and other persons or
entities
Digest | Full Text
RR No. 3-2012 Prescribes the effectivity of threshold amounts for sale of February 20, 2012
residential lot, sale of house and lot, lease of residential unit and
sale or lease of goods or properties or performance of services
covered by Section 109 (P), (Q) and (V) of the Tax Code of
1997, as amended
Digest | Full Text
RR No. 1-2012 Requires the mandatory submission of Quarterly Summary List February 20, 2012
of Sales and Purchases by all VAT registered taxpayers
Digest | Full Text
RR No. 18-2011 Provides the penalties for violation of the requirement that November 21,
Output Tax on the sale of goods and services should be 2011
separately indicated in the sales invoice or official receipt
(Published in Manila Bulletin on November 23, 2011)
Digest | Full Text
RR No. 16-2011 Increases the amount of threshold amounts for sale of residential October 28, 2011
lot, sale of house and lot, lease of residential unit and sale or
lease of goods or properties or performance of services covered
by Section 109 (P), (Q) and (V) of the Tax Code of 1997, as
amended, thereby amending certain provisions of RR No. 16-
2005, as amended, otherwise known as the “Consolidated VAT
Regulations of 2005”
(Published in Manila Bulletin on November 2, 2011)
Digest | Full Text
RR No. 10-2011 Amends certain provision of RR No. 16-2005, as amended by July 7, 2011
RR No. 4-2007, otherwise known as the "Consolidated Value-
Added Tax Regulations of 2005", as amended
(Published in Manila Bulletin on July 9, 2011)
Digest | Full Text
RR No. 9-2011 Amends RR No. 3-2011 relative to the policies, guidelines and June 29, 2011
procedures on the application for change in accounting period
(Published in Manila Bulletin on July 1, 2011)
Digest | Full Text
RR No. 3-2011 Provides the policies, guidelines and procedures on the March 7, 2011
application for change in accounting period
(Published in Manila Bulletin on March 9, 2011)
Digest | Full Text | Annex A | Annex B | Annex C |Annex
D | Annex E | Annex F
RR No. 9-2009 Promulgates the requirements for the maintenance, retention December 29,
and submission of electronic records 2009
(published in Manila Bulletin on December 31, 2009)
Digest | Full Text
RR No. 13-2008 Consolidated Regulations on Advance Value-Added Tax on the September 9,
Sale of Refined Sugar; Amending and/or Revoking All Revenue 2008
Issuances Issued to this Effect, and for Other Related Purposed
(published in Philippine Star on October 7, 2008)Digest | Full
Text | Annex A-B, E-J | Annex C | Annex D
RR No. 13-2007 Prescribing the Rules on the Advance Payment of Value-Added December 5,
Tax/Percentage Tax on the Transport of Naturally Grown 2007
Planted Timber Products (published in Philippine Daily
Inquirer on December 7, 2007)
RR No. 11-2007 Suspension of the Implementation of Revenue Regulations No. August 28,
6-2007 2007
(published in Manila Bulletin on August 29, 2007) Digest | Full
Text
RR No. 6-2007 Consolidated Regulations on Advance Value-Added Tax on the May 9, 2007
Sale of Refined Sugar, Amending and/or Revoking all Revenue
Issuances Issued to this Effect, and for Other Related Purposes
(published in Manila Bulletin on May 11, 2007) Digest | Full
Text | Annex A-E | Annex F-J
RR No. 4-2007 Amending Certain Provisions of RR No. 16-2005, As Amended, March 20,
Otherwise Known as the Consolidated Value-Added Tax 2007
Regulations of 2005
(published in Manila Bulletin on March 22, 2007) Digest | Full
Text
RR No. 2-2007 Amending Certain Provisions of RR No. 16-2005, As Amended, January 11,
Otherwise Known as the Consolidated Value-Added Tax 2007
Regulations of 2005
(published in Manila Bulletin on January 12, 2007) Digest | Full
Text
RR No. 16-2005 Consolidated Value-Added Tax Regulations of 2005 October 19,
(published in Manila Times on October 21, 2005) 2005
Digest | Full Text
RR No. 7-2004 Implementing Sec. 109(bb) and (cc) of the National Internal May 21, 2004
Revenue Code, as Amended by RA 9238, Excluding Services
Rendered by Doctors of Medicine Duly Registered with the
Professional Regulatory Commission (PRC), and Services
Rendered by Lawyers Duly Registered with the Integrated Bar
of the Philippines (IBP) from the Coverage of Value-Added Tax
(published in Philippine Star on May 28, 2004) Digest | Full
Text
RR No. 4-2004 Supplementing the Rules on the Advance Payment of Value- March 26,
Added Tax on Sale of Refined Sugar as Provided for in RR 2- 2004
2004
(published in Taliba on March 31, 2004) Digest | Full Text
RR No. 2-2004 Further Enhancing the Rules on the Advance Payment of Value- February 26,
Added Tax on Sale of Refined Sugar, Amending RR 7-89 and 2004
29-2002
(published in Manila Standard on February 28,
2004) Digest | Full Text
RR No. 29-2003 Advance Payment of VAT on the Sale of Flour December 1,
(published in Manila Times on December 2, 2003) 2003
Digest | Full Text
RR No. 28-2003 Amending Further Pertinent Provisions of RR 2-98 as November 20,
Amended, Relative to the Issuance of Certificate of Value- 2003
Added Tax Withheld at Source, Thereby Amending RR 4-2002;
and for the Purpose
(published in Manila Times on November 25,
RR No. 27-2003 Regulations Further Amending the Transitory Provisions of RR October 9,
18-99 as Amended by RR 12-2003, Pertaining to the Deadline 2003
for the Usage of Properly Stamped Unused Non-VAT Invoices
or Receipts
(published in Manila Times on October 10, 2003) Digest | Full
Text
RR No. 5-2003 Rules and Regulations To Implement The Remittance of the February 4,
Following: (a) 70% Share of the ARMM in the Withholding 2003
Tax Payments of National Government Agencies (NGAs) and
in the National Collections from Taxpayers Other Than NGAs
Provided for Under Section 9, Article IX of RA 9054,
Amending Therein Certain Sections of RR 4-98; (b)Allotment
to the Regional Government (RG) of the 30% Share of the
National Government (NG) of all Current Year Collections of
Internal Revenue Taxes Within ARMM for a Period of Five (5)
Years as may be Provided in the Annual Appropriations Act as
Provided for Under Section 15, Article IX of RA 9054;
and c) 50% of the 80% Share of the NG from the Yearly
Incremental Revenue From VAT Collections Within ARMM
Received by the Central Government as Provided for Under
Section 15, in Relation to Section 9, both of Article IX of RA
9054 As Well As in Relation to Section 283 of the National
Internal Revenue Code (NIRC) of 1997
Digest | Full Text
RR No. 29-2002 Enhancing the Rules on the Advance Payment of Value- Added December 20,
Tax on the Sale of Refined Sugar, thereby Amending RR 7-89, 2002
and Other Purposes
(published in Philippine Star on December 22,
RR No.26-2002 Amends further RR No. 9-2001, as amended, by providing for December 19,
the staggered filing of returns of taxpayers enrolled in the 2002
Electronic Filing and Payment System based on industry
classification
(published in Manila Bulletin on Dec. 20, 2002)
Digest|Full Text
RR No. 8-2002 Amending Further Pertinent Provisions of RR 7-95, as June 24,
Amended, With Respect to the Time of Filing of Quarterly VAT 2002
Returns; Contents and Submission of Quarterly Total of
Monthly Sales and Purchases Per Supplier or Customer, and
Providing for the Penalties and Effect of Non-Submission
Thereof; and Clarifying Further the Mode of Remittance of
VAT Due from Non-Residents
(published in Philippine Daily Inquirer on June 27,
2002) Digest | Full Text | Attachment 2550 (front) | Attachment
2550 (back)
RR No. 2-98 Implementing Republic Act No. 8424, "An Act Amending the May 17, 1998
National Internal Revenue Code (NIRC) as Amended" relative
to the Withholding on Income Subject to the Expanded
Withholding Tax and Final Withholding Tax, Withholding of
Income Tax on Compensation, Withholding of Creditable VAT
and other Percentage Taxes
Digest
REVENUE MEMORANDUM ORDERS (RMOs)
RMO No. 20- Prescribes the revised policies and procedures on the processing May 3, 2018
2018 of Tax Credit Certificates (TCCs) for cash conversion
Full Text
RMO No. 16- Amends certain provisions of RMO No. 5-2004 particularly on July 21, 2017
2017 the application, processing and issuance of ATRIG on
importation of wheat by millers and traders relative to the
advance payment of Value-Added Tax on the sale of flour
Digest|Full Text
RMO No. 16- Amends RMO No. 19-2012 re: Value-Added Tax Audit August 14, 2015
2015 Program of the Large Taxpayers Service
Digest|Full Text|Annex A
RMO No. 16- Reiterates and prescribes certain policies relative to the VAT April 3,
2014 Audit Program 2014
Digest|Full Text
RMO No. 27- Amends the 2012 Value-Added Tax (VAT) Audit Program October 11, 2013
2013 Digest | Full Text
RMO No. 5-2013 Prescribes the procedures and guidelines on the redemption of March 21, 2013
Notice of Payment Schedule relative to the implementation of
the VAT TCC Monetization Program
Digest | Full Text
RMO No. 21- Prescribes the policies, guidelines and procedures in the September 10,
2012 acceptance, processing, evaluation, approval of applications for 2012
monetization and issuance of Notice of Payment Schedule of
outstanding VAT Tax Credit Certificates solely issued by the
BIR and jointly issued by the One-Stop-Shop Inter-Agency Tax
Credit and Duty Drawback Center of the Department of Finance
and the BIR
Digest | Full Text | Annex A-J | Annex K | Annex L |Annex M
RMO No. 20- Prescribes the policies and procedures for the implementation of September 5,
2012 the 2012 Value-Added Tax Audit Program 2012
Digest | Full Text | Annex A | Annex B | Annex C |Annex
D | Annex E
RMO No. 19- Prescribes the policies and procedures in the Value-Added Tax August 31, 2012
2012 Audit Program for Large Taxpayers Service
Digest | Full Text | Annex A | Annex B | Annex B-1 |Annex
C | Annex C-1
RMO No. 12- Enjoins the strict implementation of the penalty provisions April 30, 2009
2009 for non-submission of Quarterly Summary Lists of Sales and
Purchases
Digest | Full Text
RMO No. 3-2009 Amendment and Consolidation of the Guidelines in the Conduct January 23,
of Surveillance and Stock-Taking Activities, and the 2009
Implementation of the Administrative Sanction of Suspension
and Temporary Closure of Business
Digest | Full Text | Annex A | Annex B | Annex D | Annex
E | Annex F | Excel File Annexes
RMO No. 6-2008 Prescribing the Guidelines and Procedures in the Printing, February 20,
Requisition, Reporting, Issuance and Distribution of Certificate 2008
of Advance Payment of Value-Added Tax/ Percentage Tax on
the Transport of Naturally Grown and Planted Timber Products
as Prescribed in RR No. 13-2007 Dated October 15, 2007
Digest | Full Text | Annex A | Annex B-F
RMO No. 16- Prescribing Additional Procedures in the Audit of Input Taxes July 23,
2007 Claimed in the VAT Returns by Revenue Officers and 2007
Amending "Annex B" of RMO No. 53-98 With Respect to the
Checklist of Documents to be Submitted by a Taxpayer Upon
Audit of his/its VAT Liabilities as well as the Mandatory
Reporting Requirements to be Prepared by the Assigned
Revenue Officer/s Relative Thereto, All of Which Shall Form
an Integral Part of the Docket
Digest | Full Text
RMO No. 7-2006 Prescribing the guidelines and procedures in the processing of February 28,
applications for zero-rating of effectively zero-rated transactions 2006
for Value-Added Tax purposes
Digest | Full Text | Annex A | Annex B-B2 | Annex C-D
RMO No. 26-
Suspension of issuance of assessments for deficiency Value- October 21,
2005 Added Tax against cinema/theater operators/owners 2005
Digest | Full Text
RMO No. 22- Value-Added Tax (VAT) Exemption Certificate/ Identification May 24, 2004
2004 Card Issued to qualified foreign embassies and their qualified
personnel Amending/ Modifying RMO No. 81-99
Digest | Full Text
RMO No. 5-2004 Prescribing the guidelines and procedures in the implementation February 4,
of RR No. 29-2003 on the advance payment of Value-Added 2004
Tax on the sale of flour
RMO No. 35- Prescribing the guidelines and procedures in the processing and December 11,
2002 issuance of Authority to Release Imported Goods (ATRIG) for 2002
Excise and Value-Added Tax Purposes
Digest | Full Text | Annex A | Annex B | Annex C | Annex
D | Flowchart
RMO No. 9-2000 Tax treatment of sales of goods, properties and services made March 29,
by VAT- registered suppliers to BOI-registered manufacturers- 2000
exporters with 100% export sales
Digest
RMO No. 81-99 Issuance of Value-Added Tax (VAT) Exemption Certificate to November 5,
all qualified embassies and their personnel 1999
Digest
RMO No. 40-94 Prescribing the Modified Procedures on the Processing of
Claims for VAT Credit/ Refund
REVENUE MEMORANDUM CIRCULARS (RMCs)
RMC No. 17- Amends certain provisions of RMC Nos. 89-2017 and 54-2014 March 8, 2018
2018 on the processing of claims for issuance of Tax Refund/Tax
Credit Certificate in relation to amendments made in the NIRC
of 1997, as amended by RA No. 10963 (TRAIN Law)
Digest|Full Text|Annex A.1|Annex A.1.1| Annex A.1.2-
1.12|Annex A.2|Annex B|Annex C|Annex D|Annex E|Annex F
RMC No. 89- Amends RMC No. 51-2007 relative to the processing of claims October 24, 2017
2017 for issuance of tax refund/Tax Credit Certificate (TCC) and the
revenue officials authorized to approve and/or issue the tax
refund/TCC
Digest|Full Text
RMC No. 23- Prescribes the new template of Value-Added Tax Exemption March 7, 2017
2017 Identification Card issued to qualified diplomats, officials and
dependents of the US Embassy
Digest|Full Text|Annex A|Annex B
RMC No. 19- Amends Question and Answer to No. 12 of RMC No. 80-2010 March 2, 2017
2017 regarding the issuance of Electronic Letters of Authority for
Value-Added Tax credit/refund claims filed by direct exporters
Digest|Full Text
RMC No. 82- Publishes the full text of Joint Circular No. 002.2014 of the December 2,
2014 DOF, DBM, BOC and BIR, providing for the establishment of a 2014
mechanism for qualified VAT-registered persons to receive the
cash equivalent of their outstanding VAT Tax Credit
Certificates
Digest|Full Text |Joint Circular
RMC No. 55- Clarifies the livestock and poultry feeds or ingredients used in June 27,
2014 the manufacture of finished feeds to be exempt from VAT 2014
Digest|Full Text
RMC No. 54- Clarifies the issues relative to the application for Value-Added June 17,
2014 Tax (VAT) refund/credit under Section 112 of the Tax Code, as 2014
amended
Digest|Full Text|Annex A|Annex B
RMC No. 57- Circularizes BIR Ruling No. 123-2013 re: recovery of August 29, 2013
2013 unutilized creditable input taxes attributable to VAT zero-rated
sales
Digest | Full Text
RMC No. 8-2013 Publishes the full text of Joint Circular No. 6-2012 entitled January 25, 2013
“Joint Guidelines Implementing the Special Provision of the
General Appropriations Act on Value-Added Tax (VAT)
Refunds”
RMC No. 5-2013 Publishes the full text of Joint Circular No. 5-2012 entitled January 18, 2013
"Joint Guidelines Implementing the Special Provision of the
General Appropriations Act on VAT Refunds on Importation"
RMC No. 75- Clarifies Section 109(1)(R) of the National Internal Revenue November 23,
2012 Code of 1997, as amended, on the VAT exemption of the sale, 2012
importation, printing or publication of books, newspapers,
magazines, reviews or bulletins
Digest | Full Text
RMC No. 58- Reiterates the requirement on the submission of Quarterly September 27,
2012 Value-Added Tax (VAT) Report per city/municipality 2012
Digest | Full Text
RMC No. 51- Amends the deadline for the filing of Applications for Value- September 3,
2012 Added Tax (VAT) Tax Credit Certificates (TCCs) Monetization 2012
Digest | Full Text
RMC No. 47- Prescribes the guidelines in the filing of application for August 22, 2012
2012 enrollment in the Value-Added Tax (VAT) Tax Credit
Certificates (TCCs) Monetization Program
RMC No. 21- Circularizes the full text of Executive Order No. 68 entitled May 3, 2012
2012 “Monetization Program of Outstanding Value-Added Tax
(VAT) Tax Credit Certificates (TCCs)”
Digest | Full Text
RMC No. 54- Circularizes the En Banc Resolution of the Supreme Court November 8,
2011 denying with finality the Motion for Reconsideration on G.R. 2011
No. 193007 upholding the validity of imposition of VAT on
Toll Fees
Digest | Full Text
RMC No. 49- Further clarifies RMC No. 38-2011 on Expanded Withholding October 11, 2011
2011 Tax obligation of Philippine Health Insurance Corporation
(PHIC), including the Income Tax withholding obligation of
hospitals/clinics on case rates of PHIC and the matter of 5%
Final Withholding VAT for government money payments
Digest | Full Text
RMC No. 63- Imposes the Value-Added Tax on Tollway Operators July 20, 2010
2010 Digest | Full Text
RMC No. 60- Clarifies the coverage of RMO No. 56-2010 relative to the use July 13, 2010
2010 of updated medium for submitting the Summary List of Sales
and Purchases (SLSP)
Digest | Full Text
RMC No. 56- Disseminates the most recent policies on the audit of all internal June 29, 2010
2010 revenue tax liabilities for the year 2009
Digest | Full Text
RMC No. 39- Directs the Revenue District Offices to verify the VAT May 21, 2010
2010 Compliance of Health Maintenance Organizations
Digest | Full Text
RMC No. 30- Clarifies Revenue Memorandum Circular No. 72-2009, which March 26, 2010
2010 reiterated the imposition of the Value-Added Tax on Tollway
Operators
Digest | Full Text
RMC No. 51- Clarifies the Requirement for the Submission of Summary Lists September 16,
2009 of Sales (SLS)/Summary Lists of Purchases (SLP); the 2009
imposition of penalties for their non-submission; the issuance of
Subpoena Duces Tecum; and the imposition of penalties for
failure to obey summons
Digest | Full Text
RMC No. 77- Taxability of Director’s Fees Received By Directors Who are December 3,
2008 not Employees of the Corporation for VAT or Percentage Tax 2008
Purposes as Espoused Under Revenue Memorandum Circular
No. 34-2008
Digest | Full Text
RMC No. 46- Clarification of Issues Concerning Common Carriers by Air and June 20,
2008 Their Agents Relative to the Revenue and Receipt from 2008
Transport of Passengers, Goods/Cargoes and Mail, and from
Excess Baggage
Digest | Full Text
RMC No. 34- Tax Treatment of Director’s Fees for Income Tax and Business April 18,
2008 Tax Purposes 2008
Digest | Full Text
RMC No. 59- Clarifying the Effect of Suspension of RR No. 6-2007, September 14,
2007 Otherwise Known As the "Consolidated Regulations on 2007
Advance Value-Added Tax on the Sale of Refined Sugar,
Amending and/or Revoking All Revenue Issuances Issued to
this Effect and for Other Related Purposes"
Digest | Full Text
RMC No. 53- Reiteration of the Amendment Made by RA No. 9337 Imposing August 7,
2007 VAT on the Sale of Non-Food Agricultural Products, Marine 2007
and Forest Products and on the Sale of Cotton and Cotton Seeds
in their Original State
Digest | Full Text
RMC No. 39- Clarifying the Income Tax and VAT Treatment of Agency June 13,
2007 Fees/Gross Receipts of Security Agencies Including the 2007
Withholding of Taxes Due Thereon
RMC No. 35- Clarifying the Proper VAT and EWT Treatment of Freight and June 30,
2006 Other Incidental Charges Billed by Freight Forwarders 2006
Digest | Full Text
RMC No. 31- Value Added Tax (VAT) on the Construction or Renovation of May 30,
2006 Official Buildings or Properties of the United States of America 2006
Embassy
RMC No. 30- Prescribing the Submission of a Narrative Memorandum Report May 22,
2006 to Accompany the VAT Credit Evaluation Report and 2006
Requiring the Attachment of Certain Documents Prior to
Approval of the Tax Credit Certificate (TCC) Recommended by
the Tax and Revenue Group (TRG), Department of Finance
One-Stop Shop Inter-Agency Tax Credit and Duty Drawback
Center (DOF-OSS)
Digest |Full Text
RMC No. 22- Clarifying certain issues relating to the implementation of the April 6, 2006
2006 increase in the Value-Added Tax rate from 10% to 12% on the
sale of goods pursuant to Republic Act No. 9337
Digest | Full Text
RMC No. 21- Clarification of Issues on How to Fill-up the new Version of April 6, 2006
2006 VAT Forms (September, 2005 Version) and other Related
Issues
Digest | Full Text
RMC No. 8-2006 Clarifying certain issues relating to the implementation of the February 1,
increase in the VAT rate from 10% to 12% pursuant to Republic 2006
Act No. 9337
Digest | Full Text
RMC No. 5-2006 Prescribing the use of the Government Money Payment Chart January 20,
Implementing Sections 2.57.2, 4.114 and 5.116 of Revenue 2006
Regulations No. 2-98 as amended by Revenue Regulations No.
16-2005 in relation to Sections 57 (B), 114 (C) and 116 to 123
of Republic Act No. 8424 as amended by Republic Act No.
9337
RMC No. 72- Transition procedures for all Electronic Filing and Payment December 22,
2005 System filers (Large Taxpayers/Top 10,000 Corporations) in 2005
filing tax returns affected by the new VAT Law (R.A. 9337)
Digest | Full Text
RMC No. 68- Enhanced VAT forms – BIR Form No. 2550M (Monthly Value- December 8,
2005 Added Tax Declaration) and BIR Form No. 2550Q (Quarterly 2005
Value-Added Tax Return) – September 2005 version
Digest | Full Text | Annex A-1 | Annex A-2 | Annex B-1 |Annex
B-2
RMC No. 62- Revised guidelines in the registration and invoicing November 3,
2005 requirements including clarification on common issues affecting 2005
Value-Added Tax (VAT) taxpayers Pursuant to RA No. 9337
(An Act Amending Sections 27, 28, 34, 106, 108, 109, 110, 111,
112, 113, 114, 116, 117, 119, 121, 148, 151, 236, 237 and 288
of the National Internal Revenue Code of 1997, as Amended,
and for other Purposes)
Digest | Full Text
RMC No. 57- Attachments to the quarterly VAT return to be filed starting October 20,
2005 October 25, 2005 2005
Digest | Full Text
RMC No. 52- Value-Added Tax (VAT) Liability of the Tollway Industry October 3,
2005 Digest | Full Text 2005
RMC No. 29- Clarifying the provisions of Republic Act No. 9337 (VAT Law July 1,
2005 of 2005) applicable to the petroleum industry 2005
Digest | Full Text
RMC No. 70- Clarification on proper determination of amount of Value- November 23,
2004 Added Tax on VAT invoices or VAT official receipts 2004
Digest | Full Text
RMC No. 60- Clarification regarding the withholding of creditable Value- September 23,
2004 Added Tax by government offices for purchases of P1,000.00 2004
and below
Digest | Full Text
RMC No. 37- Settlement of the Value-Added Tax liabilities of pawnshops for June 16,
2004 taxable years 1996 to 2002 2004
Digest | Full Text | Annex A | Annex 1 | Annex 2
RMC No. 9-2004 Guidelines and Policies Applicable to the Business Tax February 20,
Applicable to Banks and Non-Bank Financial Intermediaries 2004
Performing Quasi-Banking Functions and other Non-Bank
Financial Intermediaries As A Result of the Enactment and
Effectivity of Republic Act No. 9238, An Act Amending
Certain Provisions of the National Internal Revenue Code of
1997, As Amended, byExcluding Several Services from the
Coverage of the Value-Added Tax and Re-Imposing the Gross
Receipts Tax on Banks and Non-Bank Financial
IntermediariesPerforming Quasi-Banking Functions and Other
Non-Bank Financial Intermediaries Beginning January 1, 2004
Digest | Full Text | RA No. 9238
RMC No. 2-2004 Clarifying the Issues on VAT Taxable Transactions of January 7,
Philippine Ports Authority Amending Revenue Memorandum 2004
Circular No. 20-88, Pursuant to Republic Act No. 7716 as
Implemented by Revenue Regulations No. 7-95
Digest | Full Text
RMC No. 6-2003 Clarifying Certain Issues Relative to the Services Rendered by January 22,
Individual Professional Practitioners, General Professional 2003
Partnerships, Entertainers, and Professional Athletes Who Are
Subject to the Value-Added Tax or Percentage Tax, whichever
is Applicable, Beginning January 1, 2003
Digest | Full Text| Annex A
RMC No. 61- Issuance of VAT Invoices/Receipt for Non-VAT/Exempt Sale October 8,
2003 of Goods, Properties or Services 2003
Digest | Full Text
RMC No. 49- Amending Answer to Question Number 17 of Revenue August 27,
2003 Memorandum Circular No. 42-2003 and Providing Additional 2003
Guidelines on Issues Relative to the Processing of Claims for
Value-Added Tax (VAT) Credit/Refund, Including Those Filed
with the Tax and Revenue Group, One-Stop Shop Inter-Agency
Tax Credit and Duty Drawback Center, Department of Finance
(OSS-DOF) by Direct Exporters
Digest | Full Text
RMC No. 42- Clarifying certain issues raised relative to the processing of July 23,
2003 claims for Value-Added Tax (VAT) credit/refund, including 2003
those filed with the Tax and Revenue Group, One-Stop Shop
Inter-Agency Tax Credit and Duty Drawback Center,
Department of Finance (OSS-DOF) by Direct Exporters
Digest | Full Text
RMC No. 30- Clarification of Paragraph 1-Q of Revenue Memorandum May 21,
2003 Circular No. 28-2003 2003
Digest | Full Text
RMC No. 56- Taxability of Health Maintenance Organizations (HMOs) for December 18,
2002 VAT purposes 2002
Digest
RMC No. 45- Taxability of Pawnshop Operators for VAT Purposes October 12,
2001 2001
RMC No. 28- Taxability of Movie/Cinema House Operators for VAT July 2,
2001 Purposes 2001
RMC No. 25-99 Disseminating the Ruling of the Commissioner of Internal March 18,
Revenue on the Non-eligibility for VAT Zero-Rating of 1999
Automobile Sales to Entities Registered with PEZA, SBMA and
Clark Development Authority
RMC No. 32-99 Japanese Contractors undertaking Overseas Economic May 3,
Cooperation Fund of Japan (OECF) Funded Project are Exempt 1999
from the eight and one half percent (8.5%) creditable VAT
imposed under Section 114(C) of the Tax Code of 1997 and to
the One Percent (1%) Expanded Withholding Tax (EWT)
imposed under Section 2.57.2(E) of RR No. 2-98 implementing
Section 57(B) of the Tax Code of 1997
[return to index]
Codal Reference
Title IV, Sections 105 to 115 of the National Internal Revenue Code of 1997, as amended
[return to index]
FREQUENTLY ASKED QUESTIONS
I. General VAT Queries

Who are liable to register as VAT taxpayers?
Any person who, in the course of trade or business, sells, barters or exchanges goods or properties or engages in the sale or exchange of services shall be liable to register
if:
a. His gross sales or receipts for the past twelve (12) months, other than those that are exempt under Section 109 (A) to (U), have exceeded Three Million Pesos
(P3,000,000.00): or
b. There are reasonable grounds to believe that his gross sales or receipts for the next twelve (12) months, other than those that are exempt under Section 109 (A) to
(U), will exceed Three Million Pesos (P3,000,000.00).
When is a new VAT taxpayer required to apply for registration and pay the registration fee?
New VAT taxpayers shall apply for registration as VAT Taxpayers and pay the corresponding registration fee of five hundred pesos (P500.00) using BIR Form No.
0605 for every separate or distinct establishment or place of business before the start of their business following existing issuances on registration.
Thereafter, taxpayers are required to pay the annual registration fee of five hundred pesos (P500.00) not later than January 31, every year.
What compliance activities should a VAT taxpayer, after registration as such, do promptly or periodically?
The following compliance activities must be performed by a VAT-registered taxpayer:
a. Pay the annual registration fee of P500.00 for every place of business or establishment that generates sales;
b. Register the books of accounts of the business/occupation/calling, including practice of profession, before using the same;
c. Register the sales invoices and official receipts as VAT-invoices or VAT official receipts for use on transactions subject to VAT. (If there are other transactions
not subject to VAT, a separate set of non-VAT invoices or non-VAT official receipts need to be registered for use on transactions not subject to VAT);
d. Filing of the Monthly Value-added Tax Declaration on or before the 20th day following the end of the taxable month (for manual filers)/on or before the
prescribed due dates enunciated in RR No. 16-2005 (for e-filers) using BIR Form No. 2550M and of the Quarterly VAT Return on or before the 25th day
following the end of the taxable quarter using BIR Form No. 2550Q, reflecting therein gross receipts (for seller of service)/ gross sales (for seller of goods) and
output tax (VAT on sales); purchases of goods and services made in the course of trade or business/exercise of profession and input tax (VAT on purchases),
other allowable tax credits as in the case of advance VAT payment and VAT withheld by government payors, and VAT payable or excess input VAT, whichever
is applicable, with the accredited agent banks (AABs) of the BIR or Revenue Collection Officers (RCOs) of the BIR (in areas without AAB), for returns with
payment, or with the RDO/LTDO having jurisdiction over the taxpayer (home RDO/LTDO), for returns without payment. (The monthly VAT Declaration and
the Quarterly VAT Return shall reflect the consolidated total for all the taxable lines of activity and all the establishments - head office and branches);
e. Submit with the RDO/LTDO having jurisdiction over the taxpayer, on or before the deadline set in the filing of the Quarterly VAT Return, the soft copy of the
Quarterly Schedule of Monthly Sales and Output Tax (if the quarterly sales exceed P2,500,000.00), and the soft copy of the Quarterly Schedule of Monthly
Domestic Purchases and Input Tax/ the soft copy of the Schedule of Transactional/Individual Importation ( if the quarterly total purchases exceed P1,000,000.00),
reflecting therein the required data prescribed under existing revenue issuances.
What is the liability of a taxpayer becoming liable to VAT and did not register as such?
Any person who becomes liable to VAT and fails to register as such shall be liable to pay the output tax as if he is a VAT-registered person, but without the benefit of
input tax credits for the period in which he was not properly registered.
Who may opt to register as VAT and what will be his liability?
a. Any person who is VAT-exempt under Sec. 109 of the Tax Code, as amended, may, in relation to Sec. 109 (2) of the same Code, elect to be VAT-registered by
registering with the RDO that has jurisdiction over the head office of that person, and pay the annual registration fee of P500.00 for every separate and distinct
establishment.
b. Any person who is VAT-registered but enters into transactions which are exempt from VAT (mixed transactions) may opt that the VAT apply to his transactions
which would have been exempt under Section 109 of the Tax Code, as amended.
c. Franchise grantees of radio and/or television broadcasting whose annual gross receipts of the preceding year do not exceed ten million pesos (P10,000,000.00)
derived from the business covered by the law granting the franchise may opt for VAT registration. This option, once exercised, shall be irrevocable. (Sec. 119,
Tax Code).
d. Any person who elects to register under optional registration shall not be allowed to cancel his registration for the next three (3) years.
The above-stated taxpayers may apply for VAT registration not later than ten (10) days before the beginning of the calendar quarter and shall pay the registration fee
unless they have already paid at the beginning of the year. In any case, the Commissioner of Internal Revenue may, for administrative reason deny any application for
registration. Once registered as a VAT person, the taxpayer shall be liable to output tax and be entitled to input tax credit beginning on the first day of the month following
registration.
What are the instances when a VAT-registered person may cancel his VAT registration?
a. If he makes a written application and can demonstrate to the commissioner's satisfaction that his gross sales or receipts for the following twelve (12) months,
other than those that are exempt under Section 109 (A) to (U), will not exceed Three Million Pesos (P3,000,000.00); or
b. If he has ceased to carry on his trade or business, and does not expect to recommence any trade or business within the next twelve (12) months.
When will the cancellation for registration be effective?
The cancellation for registration will be effective from the first day of the following month the cancellation was approved.
What is the invoicing/receipt requirement of a VAT-registered person?
A VAT registered person shall issue :

a. A VAT invoice for every sale, barter or exchange of goods or properties; and
b. A VAT official receipt for every lease of goods or properties and for every sale, barter or exchange of services.
May a VAT-registered person issue a single invoice/ receipt involving VAT and Non-VAT transactions?
Yes. He may issue a single invoice/ receipt involving VAT and non-VAT transactions provided that the invoice or receipt shall clearly indicate the break-down of the
sales price between its taxable, exempt and zero-rated components and the calculation of the Value-Added Tax on each portion of the sale shall be shown on the invoice
or receipt.
May a VAT- registered person issue separate invoices/ receipts involving VAT and Non-VAT transactions?
Yes. A VAT registered person may issue separate invoices/ receipts for the taxable, exempt, and zero-rated component of its sales provided that if the sales is exempt
from value-added tax, the term "VAT-EXEMPT SALE" shall be written or printed prominently on the invoice or receipt and if the sale is subject to zero percent (0%)
VAT, the term "ZERO-RATED SALE" shall be written or printed prominently on the invoice or receipt.
How is the Value-Added Tax presented in the receipt/ invoice?
The amount of the tax shall be shown as a separate item in the invoice or receipt.
Sample:
Sales Price P 100,000.00

VAT 12,000.00
Invoice Amount 112,000.00
What is the information that must be contained in the VAT invoice or VAT official receipt?
1. Name of Seller
2. Description of the goods or properties or nature of the service
3. Unit cost
4. Quantity
5. Date of transaction
6. TIN of buyer, if VAT- registered and amount exceeds P1,000.00
7. Address of Buyer
8. Business Style of Buyer
9. Name of Buyer
10. Statement that the seller is a VAT-registered person, followed by his TIN
11. Business Address of the Seller
12. Business Style of the Seller
13. Purchase price plus the VAT, provided that
o The amount of tax shall be shown as a separate item in the invoice or receipt;
o If the sale is exempt from VAT, the term "VAT-EXEMPT SALE" shall be written or printed prominently on the invoice or receipt;
o If the sale is subject to zero percent (0%) VAT, the term "ZERO-RATED SALE" shall be written or printed prominently on the invoice receipt; and
o If the sale involves goods, properties or services some of which are subject to and some of which are zero-rated or exempt from VAT, the invoice or
receipt shall clearly indicate the breakdown of the sales price between its taxable, exempt and zero-rated components, and the calculation of the VAT on
each portion of the sale shall be shown on the invoice or receipt.
14. Authority to Print Receipt Number at the lower left corner of the invoice or receipt.
What is the liability of a VAT-registered person in the issuance of a VAT invoice/ receipt for VAT-exempt transactions?
If a VAT-registered person issues a VAT invoice or VAT official receipt for a VAT-exempt transaction but fails to display prominently on the invoice or receipt the
words "VAT-EXEMPT SALE", the transaction shall become taxable and the issuer shall be liable to pay the VAT thereon. The purchaser shall be entitled to claim an
input tax credit on his purchase.
What is "output tax"?
Output tax means the VAT due on the sale, lease or exchange of taxable goods or properties or services by any person registered or required to register under Section 236
of the Tax Code.
What is "input tax"?
Input tax means the VAT due on or paid by a VAT-registered on importation of goods or local purchase of goods, properties or services, including lease or use of property
in the course of his trade or business. It shall also include the transitional input tax determined in accordance with Section 111 of the Tax Code, presumptive input tax and
deferred input tax from previous period.
Does amortization of input VAT still allowable?
Yes , but is only allowed until December 31, 2021 after which taxpayers with unutilized input VAT on capital goods purchased or imported shall be allowed to apply the
same as scheduled until fully utilized: Provided, That in the case of purchase of services, lease or use of properties, the input tax shall be creditable to the purchaser, lessee
or licensee upon payment of the compensation, rental, royalty or fee.
What will be the basis of the date of cancellation?

It is the date of issuance of tax clearance by the BIR, after full settlement of all tax liabilities relative to cessation of business or change of status of concerned taxpayer
What comprises "goods or properties"?
The term "goods or properties" shall mean all tangible and intangible objects, which are capable of pecuniary estimation and shall include, among others:
a. Real properties held primarily for sale to customers or held for lease in the ordinary course of trade or business;
b. The right or the privilege to use patent, copyright, design or model, plan, secret formula or process, goodwill, trademark, trade brand or other like property or
right;
c. The right or privilege to use in the Philippines of any industrial, commercial or scientific equipment;
d. The right or the privilege to use motion picture films, films, tapes and discs; and
e. Radio, television, satellite transmission and cable television time.
What comprises "sale or exchange of services"?
The term "sale or exchange of services" means the performance of all kinds of services in the Philippines for others for a fee, remuneration or consideration, whether in
kind or in cash, including those performed or rendered by the following:
a. Construction and service contractors;

b. Stock, real estate, commercial, customs and immigration brokers;
c. Lessors of property, whether personal or real;
d. Persons engaged in warehousing services;
e. Lessors or distributors of cinematographic films;
f. Persons engaged in milling, processing, manufacturing or repacking goods for others;
g. Proprietors, operators or keepers of hotels, motels, rest houses, pension houses, inns, resorts, theatres, and movie houses;
h. Proprietors or operators of restaurants, refreshment parlors, cafes, and other eating places, including clubs and caterers;
i. Dealers in securities;
j. Lending investors;
k. Transportation contractors on their transport of goods or cargoes, including persons who transport goods or cargoes for hire and other domestic common carriers
by land relative to their transport of goods or cargoes;
l. Common carriers by air and sea relative to their transport of passengers, goods or cargoes from one place in the Philippines to another place in the Philippines;
m. Sale of electricity by generating, transmission by any entity including the National Grid Corporation of the Philippines (NGCP), and distribution companies
including electric cooperatives shall be subject to twelve percent (12%) VAT on their gross receipts.;
n. Franchise grantees of electric utilities, telephone and telegraph, radio and/or television broadcasting and all other franchise grantees, except franchise grantees of
radio and/or television broadcasting whose annual gross receipts of the preceding year do not exceed Ten Million Pesos (P10,000,000.00), and franchise grantees
of gas and water utilities;
o. Non-life insurance companies (except their crop insurances), including surety, fidelity, indemnity and bonding companies; and
p. Similar services regardless of whether or not the performance thereof calls for the exercise of use of the physical or mental faculties.
The phrase "sale or exchange of services" shall likewise include:
a. The lease of use of or the right or privilege to use any copyright, patent, design or model, plan, secret formula or process, goodwill, trademark, trade brand or
other like property or right;
b. The lease or the use of, or the right to use of any industrial, commercial or scientific equipment;
c. The supply of scientific, technical, industrial or commercial knowledge or information;
d. The supply of any assistance that is ancillary and subsidiary to and is furnished as a means of enabling the application or enjoyment of any such property, or right
or any such knowledge or information;
e. The supply of services by a nonresident person or his employee in connection with the use of property or rights belonging to, or the installation or operation of
any brand, machinery or other apparatus purchased from such non-resident person;
f. The supply of technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or
commercial undertaking, venture, project or scheme;
g. The lease of motion picture films, films, tapes and discs; and
h. The lease or the use of or the right to use radio, television, satellite transmission and cable television time.
What is a zero-rated sale?
It is a sale, barter or exchange of goods, properties and/or services subject to 0% VAT pursuant to Sections 106 (A) (2) and 108 (B) of the Tax Code. It is a taxable
transaction for VAT purposes, but shall not result in any output tax. However, the input tax on purchases of goods, properties or services, related to such zero-rated sales,
shall be available as tax credit or refund in accordance with existing regulations.
What transactions are considered as zero-rated sales?
The following services performed in the Philippines by VAT-registered person shall be subject to zero percent (0%) rate:
a. Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported where the services
are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);
b. Services other than processing, manufacturing or repacking rendered to a person engaged in business conducted outside the Philippines or to a non-resident
person engaged in business who is outside the Philippines when the services are performed, the consideration for which is paid for in acceptable foreign currency
and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);
c. Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively
subjects the supply of such services to zero percent (0%) rate;
d. Services rendered to persons engaged in international shipping or air transport operations, including leases of property for use thereof; Provided, that these
services shall be exclusively for international shipping or air transport operations. (Thus, the services referred to herein shall not pertain to those made to
common carriers by air and sea relative to their transport of passengers, goods or cargoes from one place in the Philippines to another place in the Philippines, the
same being subject to twelve percent (12%) VAT under Sec. 108 of the Tax Code, as amended);
e. Services performed by subcontractors and/or contractors in processing, converting, or manufacturing goods for an enterprise whose export sales exceeds seventy
percent (70%) of total annual production;
f. Transport of passengers and cargo by domestic air or sea carriers from the Philippines to a foreign country. (Gross receipts of international air carriers and
international sea carriers doing business in the Philippines derived from transport of passengers and cargo from the Philippines to another country shall be
exempt from VAT; however they are still liable to a percentage tax of three percent (3%) based on their gross receipts derived from transport of cargo from the
Philippines to another country as provided for in Sec. 118 of the Tax Code, as amended); and
g. Sale of power or fuel generated through renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal and steam, ocean
energy, and other shipping sources using technologies such as fuel cells and hydrogen fuels; Provided, however that zero-rating shall apply strictly to the sale of
power or fuel generated through renewable sources of energy, and shall not extend to the sale of services related to the maintenance or operation of plants
generating said power.
The following sales by VAT-registered persons shall be subject to zero percent (0%) rate:
a. Export sales
1. The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon
which may influence or determine the transfer of ownership of the goods so exported, paid in acceptable foreign currency or its equivalent in goods or
services, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);
2. The sale of raw materials or packaging materials to a non-resident buyer for delivery to as a resident local export-oriented enterprise to be used in
manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods, paid for in acceptable foreign currency, and accounted for
in accordance with the rules and regulations of the BSP;
3. The sale of raw materials or packaging materials to an export-oriented enterprise whose export sales exceed seventy percent (70%) of total annual
production;
4. Transactions considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special
laws; and
5. The sale of goods, supplies, equipment and fuel to persons engaged in international shipping or international air transport operations; Provided, That the
goods, supplies, equipment, and fuel shall be used exclusively for international shipping or air transport operations; Provided, that the same is limited to
goods, supplies, equipment and fuel that shall be used in the transport of goods and passengers from a port in the Philippines directly to a foreign port,
or vice-versa without docking or stopping at any other port in the Philippines unless the docking or stopping at any other Philippine port is for the
purpose of unloading passengers and/or cargoes that originated from abroad, or to load passengers and/or cargoes bound for abroad;Provided, further,
that if any portion of such fuel, goods or supplies is used for purposes other than the mentioned in this paragraph, such portion of fuel, goods and
supplies shall be subject to twelve percent (12%) output VAT.
b. Sales to Persons or Entities Deemed Tax-exempt under Special Law or International Agreement
Sale of goods or property to persons or entities who are tax-exempt under special laws or international agreements to which the Philippines is a signatory, such as, Asian
Development Bank (ADB), International Rice Research Institute (IRRI), subject such sales to zero rate.
What are the transactions which are no longer subject to zero-percent (0%)?
1. Sale of gold to BSP

2. Foreign-currency denominated sales
Upon the successful establishment and implementation of an enhanced VAT refund system by the Department of Finance (DOF), what are the transactions that will now
be subject to twelve percent (12%) and no longer be subject to zero percent (0%)?
1. The sale of raw materials or packaging materials to a non-resident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing,
processing, packing or repacking in the Philippines of the said buyer's goods, paid for in acceptable foreign currency, and accounted for in accordance with the
rules and regulations of the BSP;
2. The sale of raw materials or packaging materials to an export-oriented enterprise whose export sales exceed seventy percent (70%) of total annual production;
3. Transactions considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special laws
4. Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported where the services
are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); and
5. Services performed by subcontractors and/or contractors in processing, converting, or manufacturing goods for an enterprise whose export sales exceeds seventy
percent (70%) of total annual production.
What transactions are considered deemed sales?
The following transactions are considered as deemed sales:
Transfer, use or consumption, not in the course of business, of goods or properties originally intended for sale or for use in the course of business. Transfer of goods or
properties not in the course of business can take place when VAT-registered person withdraws goods from his business for his personal use;
a. Distribution or transfer to:

o Shareholders or investors as share in the profits of the VAT-registered person; or
o Creditors in payment of debt or obligation
b. Consignment of goods if actual sale is not made within sixty (60) days following the date such goods were consigned. Consigned goods returned by the
consignee within the 60-day period are not deemed sold;
c. Retirement from or cessation of business, with respect to all goods on hand, whether capital goods, stock-in-trade, supplies or materials as of the date of such
retirement or cessation, whether or not the business is continued by the new owner or successor. The following circumstances shall, among others, give rise to
transactions "deemed sale";
o Change of ownership of the business. There is a change in the ownership of the business when a single proprietorship incorporated; or the proprietor of
a single proprietorship sells his entire business
o Dissolution of a partnership and creation of a new partnership which takes over the business.
What is VAT-exempt sale?
It is a sale of goods, properties or service and the use or lease of properties which is not subject to output tax and whereby the buyer is not allowed any tax credit or input
tax related to such exempt sale.
What are the VAT-exempt transactions?
a. Sale or importation of agricultural and marine food products in their original state, livestock and poultry of a kind generally used as, or yielding or producing
foods for human consumption; and breeding stock and genetic materials therefore;
b. Sale or importation of fertilizers; seeds, seedlings and fingerlings; fish, prawn, livestock and poultry feeds, including ingredients, whether locally produced or
imported, used in the manufacture of finished feeds (except specialty feeds for race horses, fighting cocks, aquarium fish, zoo animals and other animals
considered as pets);
c. Importation of personal and household effects belonging to residents of the Philippines returning from abroad and non-resident citizens coming to resettle in the
Philippines; Provided, that such goods are exempt from custom duties under the Tariff and Customs Code of the Philippines;
d. Importation of professional instruments and implements, tools of trade, occupation or employment, wearing apparel, domestic animals, and personal and
household effects ( except vehicles, vessels, aircrafts machineries and other similar goods for use in manufacture which are subject to duties, taxes and other
charges) belonging to persons coming to settle in the Philippines or Filipinos or their families and descendants who are now residents or citizens of other
countries, such parties hereinafter referred to as overseas Filipinos, in quantities and of the class suitable to the profession, rank or position of the persons
importing said items, for their own use and not barter or sale, accompanying such persons, or arriving within a reasonable time; Provided, That the Bureau of
Customs may, upon the production of satisfactorily evidence that such persons are actually coming to settle in the Philippines and that the goods are brought
from their place of residence, exempt such goods from payment of duties and taxes.
e. Services subject to percentage tax under Title V of the Tax Code, as amended;
f. Services by agricultural contract growers and milling for others of palay into rice, corn into grits, and sugar cane into raw sugar;
g. Medical, dental, hospital and veterinary services except those rendered by professionals;
h. Educational services rendered by private educational institutions duly accredited by the Department of Education (DepED), the Commission on Higher
Education (CHED) and the Technical Education and Skills Development Authority (TESDA) and those rendered by the government educational institutions;
i. Services rendered by individuals pursuant to an employer-employee relationship;
j. Services rendered by regional or area headquarters established in the Philippines by multinational corporations which act as supervisory, communications and
coordinating centers for their affiliates, subsidiaries or branches in the Asia-Pacific Region and do not earn or derive income from the Philippines;
k. Transactions which are exempt under international agreements to which the Philippines is a signatory or under special laws except those granted under P.D. No.
529 - Petroleum Exploration Concessionaires under the Petroleum Act of 1949;
l. Sales by agricultural cooperatives duly registered and in good standing with the Cooperative Development Authority (CDA) to their members, as well as of their
produce, whether in its original state or processed form, to non-members, their importation of direct farm inputs, machineries and equipment, including spare
parts thereof, to be used directly and exclusively in the production and/or processing of their produce;
m. Gross receipts from lending activities by credit or multi-purpose cooperatives duly registered and in good standing with the Cooperative Development Authority;
n. Sales by non-agricultural, non-electric and non-credit cooperatives duly registered with and in good standing with CDA; Provided, that the share capital
contribution of each member does not exceed Fifteen Thousand Pesos (P15,000.00) and regardless of the aggregate capital and net surplus ratably distributed
among the members;
o. Export sales by persons who are not VAT-registered;
p. The following sales of real properties:
i. Sale of real properties not primarily held for sale to customers or held for lease in the ordinary course of trade or business.
ii. Sale of real properties utilized for low-cost housing as defined by RA No. 7279, otherwise known as the "Urban Development and Housing Act of
1992" and other related laws, such as RA No. 7835 and RA No. 8763;
iii. Sale of real properties utilized for specialized housing as defined under RA No. 7279, and other related laws, such as RA No. 7835 and RA No. 8763,
wherein price ceiling per unit is Php 450,000.00 or as may from time to time be determined by the HUDCC and the NEDA and other related laws;
iv. Sale of residential lot valued at One Million Five Hundred Thousand Pesos (P1,500,000.00) and below, or house and lot and other residential dwellings
valued at Two Million Five Hundred Thousand Pesos (P2,500,000.00) and below, as adjusted using latest Consumer Price Index values. (If two or
more adjacent lots are sold or disposed in favor of one buyer, for the purpose of utilizing the lots as one residential lot, the sale shall be exempt from
VAT only if the aggregate value of the lots do not exceed One Million Five Hundred Thousand Pesos (P1,500,000.00). Adjacent residential lots,
although covered by separate titles and/or separate tax declarations, when sold or disposed to one and the same buyer, whether covered by one or
separate Deed of Conveyance, shall be presumed as a sale of one residential lot.)
q. Lease of residential units with a monthly rental per unit not exceeding Fifteen Thousand Pesos (P15,000.00), regardless of the amount of aggregate rentals
received by the lessor during the year; Provided, that not later than January 31, 2009 and every three (3) years thereafter, the amount of P10,000.00 shall be
adjusted to its present value using the Consumer Price Index, as published by the Philippine Statistics Authority (Formerly known as NSO);
r. Sale, importation, printing or publication of books and any newspaper, magazine, review or bulletin which appears at regular intervals with fixed prices for
subscription and sale and which is not devoted principally to the publication of paid advertisements;
s. Transport of passengers by international carriers;
t. Sale, importation or lease of passenger or cargo vessels and aircraft, including engine equipment and spare parts thereof for domestic or international transport
perations; Provided, that the exemption from VAT on the importation and local purchase of passenger and/or cargo vessels shall be subject to the requirements
on restriction on vessel importation and mandatory vessel retirement program of Maritime Industry Authority (MARINA);
u. Importation of fuel, goods and supplies by persons engaged in international shipping or air transport operations; Provided, that the said fuel, goods and supplies
shall be used exclusively or shall pertain to the transport of goods and/or passenger from a port in the Philippines directly to a foreign port, or vice-versa, without
docking or stopping at any other port in the Philippines unless the docking or stopping at any other Philippine port is for the purpose of unloading passengers
and/or cargoes that originated form abroad, or to load passengers and/or cargoes bound for abroad; Provided, further, that if any portion of such fuel, goods or
supplies is used for purposes other that the mentioned in the paragraph, such portion of fuel, goods and supplies shall be subject to 12% VAT;
v. Services of banks, non-bank financial intermediaries performing quasi-banking functions, and other non-bank financial intermediaries, such as money changers
and pawnshops, subject to percentage tax under Sections 121 and 122, respectively of the Tax Code; and
w. Sale or lease of goods and services to senior citizens and persons with disabilities, as provided under Republic Act Nos. 9994 (Expanded Senior Citizens Act of
2010) and 10754 (An Act Expanding the Benefits and Privileges of Persons with Disability), respectively;
x. Transfer of property in merger or consolidation (pursuant to Section 40(C)(2) of the Tax Code, as amended);
y. Association dues, membership fees, and other assessments and charges collected on a purely reimbursement basis by homeowners’ associations and
condominium established under Republic Act No. 9904 (Magna Carta for Homeowners and Homeowner’s Association) and Republic Act No. 4726 (The
Condominium Act), respectively;
z. Sale of gold to the Banko Sentral ng Pilipinasn (BSP) (previously zero-rated transaction);
aa. Sale of drugs and medicines prescribed for diabetes, high cholesterol, and hypertension (beginning on January 1, 2019 as determined by the Department of
Health); and
ab. Sale or lease of goods or properties or the performance of services other than the transactions mentioned in the preceding paragraphs, the gross annual sales
and/or receipts do not exceed the amount of Three Million Pesos (Php 3,000,000.00). Note: Self-employed individuals and professionals availing of the 8% on
gross sales and/or receipts and other non-operating income, under Sections 24 (A)(2)(b) and 24 (A)(2)(c)(2) of the NIRC shall also be exempt from the payment
of twelve (12%) VAT.
What is the difference between a low-cost and a socialized housing?
“Low-cost housing” refers to housing projects intended for homeless low-income family beneficiaries, undertaken by the Government or private developers, which may
either be a subdivision or a condominium registered and licensed by the Housing and Land Use Regulatory Board/Housing (HLURB) under BP Blg. 220, PD No. 957 or
any other similar law, wherein the unit selling price is within the selling price per unit as set by the Housing and Urban Development Coordinating Council (HUDCC)
pursuant to RA No. 7279 otherwise known as the “Urban Development and Housing Act of 1992” and other laws.
“Socialized housing” refers to housing programs and projects covering houses and lots or home lots only undertaken by the Government or private sector for the
underprivileged and homeless citizens which shall include sites and services development, long-term financing, liberated terms on interest payments, and such other
benefits in accordance with the provision or RA No. 7279, otherwise known as the “Urban Development and Housing Act of 1992” and RA No. 7835 and RA No.
8763. It shall also refer to projects intended for the underprivileged and homeless wherein the housing package selling price is within the lowest interest rates under the
Unified Lending Program (UHLP) or any equivalent housing program of the Government, the private sector or non-government organizations.
II. RELIEF-Related Queries
What is "RELIEF"?
RELIEF means Reconciliation of Listing for Enforcement. It supports the third party information program of the Bureau through the cross referencing of third party
information from the taxpayers' Summary Lists of Sales and Purchases prescribed to be submitted on a quarterly basis.
Who are required to submit Summary List of Sales?
VAT taxpayers with quarterly total sales/receipts (net of VAT), exceeding Two Million Five Hundred Thousand Pesos (P2,500,000.00) are required to submit a Summary
List of Sales.
Who are required to submit Summary List of Purchases?
VAT taxpayers with quarterly total purchases (net of VAT) of goods and services, including importation exceeding One Million Pesos (P1,000,000.00) are required to
submit Summary List of Purchases.
What are the Summary Lists required to be submitted?
 Quarterly Summary List of Sales to Regular Buyers/ Customers Casual Buyers/ Customers and Output Tax
 Quarterly Summary of List of Local Purchases and Input tax; and
 Quarterly Summary List of Importation.
When is the deadline for submission of the above Summary Lists?
The Summary List of Sales/Purchases, whichever is applicable, shall be submitted on or before the twenty-fifth (25th) day of the month following the close of the taxable
quarter -- calendar quarter or fiscal quarter.
What are the penalties for failure to submit the Summary Lists?
 For failure to file, keep or supply a statement, list or information required on the date prescribed shall pay and administrative penalty of One Thousand Pesos
(P1,000.00) for each such failure, unless it is shown that such failure is due to reasonable cause and not to willful neglect; and
 An aggregate amount to be imposed for all such failures during a taxable year shall not exceed Twenty-Five Thousand Pesos (P25,000.00).
III. What is the treatment for Withholding of VAT on Government Money Payments?
The government or any of its political subdivisions, instrumentalities or agencies, including government-owned or controlled corporations (GOCCs) shall, before making
payment on account of each purchase of goods and/or services taxed at twelve percent (12%) VAT pursuant to Sections 106 and 108 of the Tax Code, deduct and
withhold a Final VAT due at the rate of five percent (5%) of the gross payment.
The five percent (5%) final VAT withholding rate shall represent the net VAT payable of the seller. The remaining seven percent (7%) effectively accounts for the
standard input VAT for sales of goods or services to government or any of its political subdivisions, instrumentalities or agencies including GOCCs in lieu of the actual
input VAT directly attributable or ratably apportioned to such sales. Should actual input VAT attributable to sales to government exceed seven percent (7%) of gross
payments, the excess may form part of the sellers' expense or cost. On the other hand, if actual input VAT attributable to sale to government is less than seven percent (7%)
of gross payment, the difference must be closed to expense or cost.
The government or any of its political subdivisions, instrumentalities or agencies including GOCCs, as well as private corporation, individuals, estates and trusts, whether
large or non-large taxpayers, shall withhold twelve percent (12%) VAT with respect to the following payments:
Lease or use of properties or property rights owned by non-residents; and
Other services rendered in the Philippines by non-residents.

IV. In what grounds can the Commissioner of Internal Revenue suspend the business operations of a taxpayer?
The Commissioner or his authorized representative is empowered to suspend the business operations and temporarily close the business establishment of any person for
any of the following violations:
a. In the case of a VAT-registered Person:

o Failure to issue receipts or invoices;
o Failure to file a value-added-tax return as required under Section 114; or
o Understatement of taxable sales or receipts by thirty percent (30%) or more of his correct taxable sales or receipts for the taxable quarter.
b. Failure to any Person to Register as Required under Section 236
o The temporary closure of the establishment shall be for the duration of not less than five (5) days and shall be lifted only upon compliance with
whatever requirements prescribed by the Commissioner in the closure order.
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CODAL REFERENCE AND RELATED ISSUANCES
Republic Act Nos. 8424, 9337, 9442, 9504, 10963
Sections 57 to 58 and 78 to 83 of the National Internal Revenue Code (NIRC)
Revenue Regulation Nos. 2-98, 17-2003, 30-2003, 10-2008, 11-2018
Revenue Memorandum Circular Nos. 72-2004, 91-2010, 50-2018, 51-2018

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IMPORTANCE OF WITHHOLDING TAX SYSTEM
It is considered as an effective tool in the collection of taxes for the following reasons:
 It encourages voluntary compliance;

 It reduces cost of collection effort;
 It prevents delinquencies and revenue loss; and
 It prevents dry spell in the fiscal conditions of the government by providing revenues throughout the taxable year.
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PERSONS REQUIRED TO WITHHOLD WITHHOLDING TAXES
 Individuals engaged in business or practiced of profession

 Non-individuals (corporations, associations, partnertship, cooperatives) whether engaged in business or not
 Government agencies and its instrumentalities (National Government Agentcies (NGAs), Government-owned or Controlled Corporations (GOCCs), Local
Government Units including Baranggays (LGUs
A WITHHOLDING AGENT - is any person or entity who is in control of the payment subject to withholding tax and therefore is required to deduct and remit taxes
withheld to the government.
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CLASSIFICATION OF WITHHOLDING TAXES
 Creditable withholding tax

a. Compensation - is the tax withheld from income payments to individuals arising from an employer-employee relationship.
b. Expanded - is a kind of withholding tax which is prescribed on certain income payments and is creditable against the income tax due of the payee for the taxable
quarter/year in which the particular income was earned.
c. Withholding Tax on GMP - Value Added Taxes (GVAT) - is the tax withheld by National Government Agencies (NGAs) and instrumentalities, including
government-owned and controlled corporations (GOCCs) and local government units (LGUs), before making any payments to VAT registered
taxpayers/suppliers/payees on account of their purchases of goods and services.
d. Withholding Tax on Government Money Payments (GMP) - Percentage Taxes - is the tax withheld by National Government Agencies (NGAs)
and instrumentalities, including government-owned and controlled corporations (GOCCs) and local government units (LGUs), before making any payments to
non-VAT registered taxpayers/suppliers/payees
 Final Withholding Tax is a kind of withholding tax which is prescribed on certain income payments and is not creditable against the income tax due of the
payee on other income subject to regular rates of tax for the taxable year. Income Tax withheld constitutes the full and final payment of the Income Tax due from
the payee on the particular income subjected to final withholding tax.
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WITHHOLDING TAX ON COMPENSATION
Compensation or Wages - refers to all remuneration for services performed by an employee for his employer under an employee-employer relationships unless exempted
by the NIRC and pertinent laws.
KINDS OF COMPENSATION
 Regular
a. Basic Salary
b. Fixed allowances
 Supplmentary
a. Commission
b. Overtime pay
c. Fees, including directors fees
d. Profit sharing
e. Monetized vacation leave in excess of ten (10) days
f. Sick leave
g. Fringe benefits received by rank and file employees
h. Hazard pay
i. Taxable 13th month pay and other benefits
j. Other remuneration received from an employee-employer relationships
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RESPONSIBILITIES OF THE EMPLOYER
 Submit the duly accomplished BIR Form Nos. 1902 and/or 1905 to the RDO within thirty (30) days from receipt;
 Withhold the tax due from the employees following the prescribed manner;
 Remit the amount of tax withheld from the employee within the prescribed due dates;
 Do the year-end adjustment;
 Submit Annual Information return (BIR Form 1604-C, 1604-F and 1604-E), including the required alphabetical list of employees/payees on or before January 31
following the close of the calendar year;
 Issue the Certificate of Compensation Payment/Tax Withheld (BIR Form No. 2316) to the employees; and
 Refund excess tax withheld.
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EXEMPTIONS AND EXCLUSIONS FROM GROSS INCOME
a. Remuneration received as an incident of employment (RA 7641; those with approved reasonable private retirement plan; Social Security Act of 1954, as
amended; GSIS Act of 1937, as amended; and etc.
b. Remuneration paid for agricultural labor;
c. Remuneration for domestic services;
d. Remuneration for casual labor not in the course of an employer's trade or business;
e. Compensation for services by a citizen or a resident of the Philippines for a foreign government or international organization;
f. Damages (Actual, moral, exemplary and nominal);
g. Life insurance;
h. Amounts received by the insured as a return of premium;
i. Compensation for injuries or sickness;
j. Income exempt under treaty
k. 13th Month pay and other benefits
l. GSIS, SSS, Medicare and other contributions (employee's share only)
m. Compensation income of minimum wage earners (MWEs) who work in the private sector and being paid the Statutory Minimum Wage (SMW), as fixed by the
Regional Tripartite Wage and Productivity Board (RTWPB)/National Wages Productivity Commission (NWPC), applicable to the place where he/she is assigned;
n. Compensation income of employees in the public sector with compensation income of not more the the SMW in the non-agricultural sector as fixed by the
RTWPB?NWPC applicable to the place where he/she is assigned.
o. De Minimis benefits
p. Fringe benefits given to employees other than rank and file and subjected to Fringe Benefit Tax (FBT);
q. Personnel Economic Relief Allowance (PERA) given to government employees; and Representation and transportation allowance (RATA granted to public
officers and employees under the General Appropriations Act.
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MINIMUM WAGE EARNERS
No withholding tax shall be required on the Statutory Minimum Wage (SMW) of the Minimum Wage earner in the private/public sectors as defined in RR 2-98, as
amended by RR 11-2018, including:
 Holiday pay
 Overtime pay
 Night shift differential
 Hazard pay
of Minimum Wage earners in the private/public sectors as defined by these Regulations.
[return to index]
DE MINIMIS BENEFITS NOT SUBJECT TO WITHHOLDING TAX
a. Monetized unused vacation leave credits to employees not exceeding ten (10) days during the year;
b. Monetized value of vacation and sick leave credits paid to government officials and employees;
c. Medical cash allowance to dependents of employees, not exceeding P1,500 per employee per semester of P250 per month;
d. Rice subsidy of P2,000 or one sack of 50kg rice per month amounting to not more than P2,000;
e. Uniform and clothing allowance not exceeding P6,000 per annum;
f. Actual medical assistance, e.g. medical allowance to cover medical and healthcare needs, annual medical/executive check-up, maternity assistance, and routine
consultations, not exceeding P10,000.00 per annum;
g. Laundry allowance not exceeding P300 per month;
h. Employees achievement awards, e.g. for length of service or safety achievement, which in the form of a tangible personal property other than cash or gift
certificate, with an annual monetary value not exceeding P10,000 received by the employee under an established written plan which does not discriminate in
favor of highly paid employees;
i. Gifts given during Christmas and major anniversary celebrations not exceeding P5,000 per employee per annum;
j. Daily meal allowance for overtime work not exceeding twenty five percent (25%) of the basic minimum wage;
k. Benefits received by an employee by virtue of a collective bargaining agreement (CBA) and productivity incentive schemes provided that the total annual
monetary value received from both CBA and productivity incentive schemes combined do not exceed ten thousand pesos (Php 10,000.00)per employee per
taxable year;
[return to index]
WITHHOLDING TAX TABLE
REVISED WITHHOLDING TAX TABLE

Effective January 1, 2018 to December 31, 2022
DAILY 1 2 3 4 5 6
Compensation Range P685 and below P685 -P1,095 P1,096 - P2,191 P2,192 - P5,478 P5,479 - P21,917 P21,918 and above
Prescribed Withholding 0.00 +20% over P82.19 +25% over P356.16 +30% over P1,342.47 +32% over P6,602.74 +35% over
0.00
Tax P685 P1,096 P2,192 P5,479 P21,918
WEEKLY 1 2 3 4 5 6
P4,808 and
Compensation Range P4,808 - P7,691 P7,692 - P15,384 P15,385 - P38,461 P38,462 - P153,845 P153,846 and above
below
Prescribed Withholding 0.00 +20% over P576.92 +25% over P2,500.00 +30% over P9,423.08 +32% over P46,346.15 +35% over
0.00
Tax P4,808 p7,692 p15,385 P38,462 P153,846
SEMI-MONTHLY 1 2 3 4 5 6
P10,417 and
below
Prescribed Withholding 0.00 +20% over P1,250.00 +25% over P5,416.67 +30% over P20,416.67 +32% over P100,416.67 +35% over
0.00
Tax P10,417 P16,667 P33,333 P83,333 P333,333
MONTHLY 1 2 3 4 5 6
P20,833 and
below
0.00
Tax P20,833 33,333 P66,667 P166,667 P666,667
REVISED WITHHOLDING TAX TABLE
Effective January 1, 2023 and onwards
DAILY 1 2 3 4 5 6
Compensation Range P685 and below P685 -P1,095 P1,096 - P2,191 P2,192 - P5,478 P5,479 - P21,917 P21,918 and above
Prescribed Withholding 0.00 +15% over P82.19 +20% over P356.16 +25% over P1,342.47 +30% over P6,602.74 +35% over
0.00
Tax P685 P1,096 P2,192 P5,479 P21,918
WEEKLY 1 2 3 4 5 6
Compensation Range P4,808 and P4,808 - P7,691 P7,692 - P15,384 P15,385 - P38,461 P38,462 - P153,845 P153,846 and above
below
Prescribed Withholding 0.00 +15% over P576.92 +20% over P2,500.00 +25% over P9,423.08 +30% over P46,346.15 +35% over
0.00
Tax P4,808 p7,692 p15,385 P38,462 P153,846
SEMI-MONTHLY 1 2 3 4 5 6
P10,417 and
below
0.00
Tax P10,417 P16,667 P33,333 P83,333 P333,333
MONTHLY 1 2 3 4 5 6
P20,833 and
below
0.00
Tax P20,833 33,333 P66,667 P166,667 P666,667
[return to index]
ANNUAL TAX TABLE
EFFECTIVE DATE JANUARY 1, 2018 to DECEMBER 31, 2022

Not over P250,000 0%
Over P250,000 but not over P400,000 20% of the excess over P250,000
Over P400,000 but not over P800,000 P30,000 + 25% of the excess over P400,000
Over P800,000 but not over P2,000,000 P130,000 + 30% of the excess over P800,000
Over P2,000,000 but not over P8,000,000 P490,000 + 32% of the excess over P2,000,000
Over P8,000,000 P2,410,000 + 35% of the excess over P8,000,000
EFFECTIVE DATE JANUARY 1, 2023
Not over P250,000 0%
Over P250,000 but not over P400,000 15% of the excess over P250,000
Over P400,000 but not over P800,000 P22,500 + 20% of the excess over P400,000
Over P800,000 but not over P2,000,000 P102,500 + 25% of the excess over P800,000
Over P2,000,000 but not over P8,000,000 P402,500 + 30% of the excess over P2,000,000
Over P8,000,000 P2,202,500 + 35% of the excess over P8,000,000
[return to index]
YEAR-END-ADJUSTMENT
On or before the calendar year and prior to the payment of the compensation for last payroll period, the employer shall determine the sum of the taxable regular and
supplementary compensation paid to each employee for the whole year and must ensure that the tax due is equal to tax withheld.
ANNUALIZED WITHHOLDING TAX FORMULA
Gross Compensation Income (present + previous employer) Px x x x
Less: Non-Taxable/Exempt Compensation Income
1. 13th month pay and other benefits P90,000.00

2. SSS, GSIS, PHIC, HDMF and union dues (employee share) xxxxxx
3. Other Non-Taxable salaries (P250,000) xxxxxx xxxx
Taxable Compensation Income Px x x x
Tax Due Pxxxx
Less: Tax Withheld (January to November/termination date) Pxxxx
Tax to be withheld for December/last payroll period Px x x x
Collectible : Tax Due> tax withheld - collect before payment of last salary
Refund: Tax Due< tax withheld - refund on or before January 25th of the year/ last payment of salary
Break even: Tax due = tax withheld - no more withholding for December salary
[return to index]
WITHHOLDING TAX FORMS
WITHHOLDING TAX FORMS DESCRIPTION

REGISTRATION FORM
BIR FORM NO. 1901 Application for Registration for Self-Employed and Mixed Income Individuals, Estates and Trusts
BIR FORM NO. 1902 Application for Registration for Individuals Earning Purely Compensation Income and Non-Residnet Citizens/Resident Alien Employee
BIR FORM NO. 1903 Application for Registration for Corporations/Partnerships (Taxable/Non-Taxable), including GAIs and LGUs
BIR FORM NO. 1904 Application for Registration for One-time Taxpayer and Persons Registering under E.O. 98 (Securing a TIN to be able to transact with any go
BIR FORM NO. 1905 Application for Information Update
PAYMENT FORM
BIR FORM NO. 0605 Payment form
BIR FORM NO. 0619-E Monthly Remittance Form of Creditable Income Taxes Withheld (Expanded)
BIR FORM NO. 0619-F Monthly Remittance Form of Final Income Taxes Withheld
REMITTANCE FORM
BIR FORM NO. 1600-VT Monthly Remittance Return of Value-Added Tax
BIR FORM No. 1600-PT Monthly Remittance Return of Percentage Tax
BIR FORM NO. 1600WP Remittance Return of Percentage Tax on Winnings and Prizes Withheld by Race Track Operators
BIR FORM NO. 1601-C Monthly Remittance Return of Income Taxes Withheld on Comnpensation
BIR FORM NO. 1601-EQ Quarterly Remittance Return of Creditable Income Taxes withheld (Expanded)
BIR FORM NO. 1601-FQ Quarterly Remittance Return of Final Income Taxes Withheld
BIR FORM NO. 1602-Q Quarterly Remittance Return of Final Taxes Withheld on Interest Paid on Deposits and Deposits Substitutes/Trusts/Etc.
BIR FORM NO. 1603-Q Quarterly Remittance Return of Final Income Taxes Withheld on Fringe benefits Paid to Employees Other Than Rank and File
CERTIFICATES
BIR FORM NO. 2304 Certificate of Income Payment Not Subject to Withholding Tax (Excluding Compensation Income)
BIR FORM NO. 2306 Certificate of Final Tax Withheld at Source
BIR FORM NO. 2307 Certificate of Creditable Tax Withheld at Source
BIR FORM NO. 2316 Certificate of Compensation Payment/Tax Withheld
[return to index]
MODE OF FILING AND PAYMENT
DUE DATE
WITHHOLDING TAX FORMS
eFPS Manual/EBIRForms
PAYMENT FORM
BIR FORM NO. 0605
BIR FORM NO. 0619-E Filing - see Schedule in RR 26-2002
on or before the tenth (10th) day f
BIR FORM NO. 0619-F
Payment - on or before the fiftenth (15th) day of the following month
REMITTANCE FORM
BIR FORM NO. 1600-VT
BIR FORM NO. 1600-PT on or before the tenth (10th) day following the close of the month
BIR FORM NO. 1600WP
on or before the tenth (10th) day f
Filing - see Schedule in RR 26-2002
BIR FORM NO. 1601-C
Payment - on or before the fiftenth (15th) day of the following month
BIR FORM NO. 1601-EQ
BIR FORM NO. 1601-FQ
last day of the month following the close of the quarter last day of the month following th
BIR FORM NO. 1602-Q
BIR FORM NO. 1603-Q
SCHEDULE OF STAGGERED FILING
Filing via eFPS

Group A - Fifteen (15) days following the end of the month
Group B - Fourteen (14) days following the end of the month
Group C - Thirteen (13) days following the end of the month
Group D - Twelve (12) days following the end of the month
Group E - Eleven (11) days following the end of the month
Note: The staggered manner of filing is only allowed to taxpayers using the Electronic Filing and Payment System (EFPS) based on the industry classification groupings
per RR No. 26-2002.
However, the staggered filing of returns allowed for withholding agents/taxpayers enrolled in the EFPS facility of the Bureau shall not apply in the case of the NGAs per
RR 1-2013.
[return to index]
SUBSTITUTED FILING
An individual taxpayer will no longer have to personally file his own Income Tax Return (BIR Form 1700) but instead the employer's Annual Information Return on
Income Taxes Withheld (BIR Form No. 1604-C) filed will be considered as the "substitute" ITR of the employee.
REQUISITES FOR INDIVIDUALS QUALIFIED FOR SUBSTITUTED FILING OF BIR FORM NO. 1700
1. Receives purely compensation income regardless of amount;

2. Compensation from only one employer in the Philippines for the calendar year;
3. Income tax has been withheld correctly by the employer (tax due equals tax withheld);
4. the employee's spouse also complies with all the three conditions stated above;
5. Employer files the BIR Form No. 1604-C; and
6. The employer issues each employee BIR Form No. 2316 (latest version)
NOTE:
All the above requisites must be present. The annual Information Return of Income Taxes Withheld on Compensation (BIR Form No. 1604-C) filed by their respective
employers filed their respective employers duly submitted to the eSubmission facility of the BIR.
REQUISITES FOR INDIVIDUALS NOT QUALIFIED FOR SUBSTITUTED FILING OF BIR FORM NO. 1700
1. Individuals with two or more employers concurrently and/or successively at anytime during the taxable year.
2. Employees whose income tax have not been withheld correctly resulting to collectible or refundable return.
3. Individuals deriving other non-business, non-profession-related income in addition to compensation income not otherwise subject to final tax.
4. Individuals receiving purely compensation income from a single employer whose income tax has been correctly withheld but whose spouse does not qualify tor
substituted filing.
5. Non-resident aliens engaged in trade or business in the Philippines deriving purely compensation income or compensation income and other non-related business,
non-profession-related income.
SUBMISSION OF BIR FORM NO. 2316
The employer are required to submit the duplicate original copy of BIR Form No. 2316 to the Revenue District Office where they are registered on or before February 28
For Large Taxpayer or other Non-LT Taxpayers who opted to submit thru the Digital Versatile Disk (DVD) prescribed under RR2-2015 shall use Universal Storage BUS
(USB) memory stick or other similar storage devices may be used in the absence or unavailability of the DVD's provided that the scanned copies of the said forms shall be
made uneditable format.
For Large Taxpayer or Non-LT taxpayers shall use the prescribed format (Annex F) in RR 11-2018 for the preparation of the Certified List of Employees Qualified for
Substituted Filing of ITR.
[return to index]
EXPANDED WITHHOLDING TAX
The Withholding of Creditable Tax at Source or simply called Expanded Withholding Tax is a tax imposed and prescribed on the items of income payable to natural or
juridical persons, residing in the Philippines, by a payor-corporation/person which shall be credited against the income tax liability of the taxpayer for the taxable year.
Tax Rates
ATC
TAX TYPE DESCRIPTION TAX RATE
IND CORP
WE Professional fees (Lawyers, CPA's, Engineers, etc.)
- if the gross income for the current year did not exceed P3M 5% WI010
- if gross income is more than 3M or VAT registered regardlessof amount 10% WI011
WE Professional fees (Lawyers, CPA's, Engineers, etc.)
- if gross income for the current year did not exceed P720,000 10% WC010
- if gross income exceeds P720,000 15% WC011
WE Professional entertainer such as, but not limited to actors and actresses, singers, lyricist, composers, emcees
- if gross income is more than 3M or VAT registered regardless of amount 10% WI021
WE Professional entertainer such as, but not limited to actors and actresses, singers, lyricist, composers, emcees
WE Professional athletes including basketball players, pelotaris and jockeys
WE Professional athletes including basketball players, pelotaris and jockeys
WE All directors and producers involved in movies, stage, television and musical productions
WE All directors and producers involved in movies, stage, television and musical productions
WE Management and technical consultants
WE Management and technical consultants
WE Business and Bookkeeping agents and agencies
WE Business and Bookkeeping agents and agencies
WE Insurance agents and insurance adjusters
WE Insurance agents and insurance adjusters
WE Other Recipients of Talent Fees
WE Other Recipients of Talent Fees
WE Fees of Director who are not employees of the company
Rentals Oon gross rental or lease for the continued use or possession of personal property in excess of P10,000
WE annually and real property used in business which the payor or obligor has not taken title or is not taking title, or5% WI100 WC100
in which has no equity; poles, satellites, transmission facilities and billboards
Cinemathographic film rentals and other payments to resident indivduals and corporate cinematographic film
WE 5% WI110 WC110
owners, lessors and distributors
WE Income payments to certain contractors 2% WI120 WC120
WE Income distribution to the beneficiaries of estate and trusts 15% WI130
Gross Commission of service fees of customs, insurance, stock, immigration and commercial brokers, fees of agents
WE of professional entertainers and real estate service practitioners (RESPs)(i.e. real estate consultants, real estate
appraisers and real estate brokers
Gross Commission of service fees of customs, insurance, stock, immigration and commercial brokers, fees of agents
WE of professional entertainers and real estate service practitioners (RESPs)(i.e. real estate consultants, real estate
appraisers and real estate brokers
Professional fees paid to medical practitioners (includes doctors of medicine, doctors of veterinary science &
WE
dentist) by hospitals & clinics or paid directly by HMO and/or other semilar establishments
WE Professional fees paid to medical practitioners (includes doctors of medicine, doctors of veterinary science &
dentist) by hospitals & clinics or paid directly by HMO and/or other semilar establishments
WE Payment by the General Professional Partnership (GPPs) to its partners
- if gross income for the current year did not exceed P720,000 10% WI152
- if gross income exceeds P720,000 15% WI153
1% OF 1/2 of
WE Income payments made by credit card companies WI158 WC158
gross amount
Additional Income Payments to govt personnel from importers, shipping and airline companies or their agents for
WE 15% WI159
overtime services
Income Payment made by NGAs, LGU, & etc to its local/resident suppliers of goods other than those covered by
WE 1% WI640 WC640
other rates of withholding tax
Income Payment made by NGAs, LGU, & etc to its local/resident suppliers of services other than those covered by
WE 2% WI157 WC157
other rates of withholding tax
Income Payment made by top withholding agents to their local/resident suppliers of goods other than those covered
WE 1% WI158 WC158
by other rates of withholding tax
Income Payment made by top withholding agents to their local/resident suppliers of services other than those
WE 2% WI160 WC160
covered by other rates of withholding tax
Commissions, rebates, discounts and other similar considerations paid/granted to independent and/or exclusive
WE sales representatives and marketing agents and sub-agents of companies, including multi-level marketing
companies
- if the gross income for the current year did not exceed P3M 5% WI515 WC515
- if the gross income is more than P3M or VAT registered regardless of amount 10% WI516 WC516
WE Gross payments to embalmers by funeral parlors 1% WI530
WE Payments made by pre-need companies to funeral parlors 1% WI535 WC535
WE Tolling fees paid to refineries 5% WI540 WC540
Income payments made to suppliers of agricultural supplier products in excess of cumulative amount of P300,000
WE 1% WI610 WC610
within the same taxable year
Income payments on purchases of minerals, mineral products and quarry resources, such as but not limited to
WE silver, gold, granite, gravel, sand, boulders and other mineral products except purchases by Bangko Sentral ng5% WI630 WC630
Pilipinas
Income payments on purchases of minerals, mineral products and quarry resources by Bangko Sentral ng
WE 1% WI632 WC632
Pilipinas ((BSP) from gold miners/suppliers under PD 1899, as amended by RA No. 7076
WE On gross amount of refund given by MERALCO to customers with active contracts as classified by MERALCO 15% WI650 WC650
On gross amount of refund given by MERALCO to customers with terminated contracts as classified by
WE 15% WI651 WC651
MERALCO
On gross amount of interest on the refund of meter deposits whether paid directly to the customers or applied
WE against customer's billings of Residential and General Service customers whose monthly electricity consumption10% WI660 WC660
exceeds 200 kwh as classified by MERALCO
On gross amount of interest on the refund of meter deposits whether paid directly to the customers or applied
WE against customer's billings of Non-Residential customers whose monthly electricity consumption exceeds 200 kwh10% WI661 WC661
as classified by MERALCO
On gross amount of interest on the refund of meter deposits whether paid directly to the customers or applied against
WE customer's billings of Residential and General Service customers whose monthly electricity consumption exceeds 20010% WI662 WC662
kwh as classified by other by other electric Distribution Utilities (DU)
On gross amount of interest on the refund of meter deposits whether paid directly to the customers or applied against
WE customer's billings of Non-Residential customers whose monthly electricity consumption exceeds 200 kwh as classified10% WI663 WC663
by other electric Distribution Utilities (DU)
Income payments made by political parties and candidates of local and national elections on all their purchases of goods
WE and services relkated to campaign expenditures, and income payments made by individuals or juridical persons for their5% WI680 WC680
purchases of goods and services intented to be given as campaign contribution to political parties and candidates
WE Income payments received by Real Estate Investment Trust (REIT) 1% WC690
Interest income denied from any other debt instruments not within the coverage of deposit substitutes and Revenue
WE 15% WI710 WC710
Regulations 14-2012
WE Income payments on locally produced raw sugar 1% WI720 WC720
[return to index]
FINAL WITHHOLDING TAX
The amount of income tax withheld by the withholding agent is constituted as a full and final payment of income tax due from the payee of the said income.
The liability for payment of tax rests primari;y on the payor as a withholding agent. Failure to withhold the tax or in case of under withholding, the deficiency tax
shall be collected from payor/withholding agent.
The payee is not required to file an income tax return for the particular income.
TAX ATC
TAX TYPE DESCRIPTION
RATE IND CORP
WF Interest on Foreign loans payable to Non-Resident Foreign Corporation (NRFCs) 20% WC180
WF Interest and other income payments on foreign currency transactions/loans payable of Offshore Banking Units (OBUs) 10% WC190
Interest and other income payments on foreign currency transactions/loans payable of Foreign Currency Deposits Units
WF 10% WC191
(FCDUs)
10% W1202
WF Cash dividend payment by domestic corporation to citizens ans residents aliens/NRFCs
30% WC212
10% WI203
WF Property dividend payment by domestic corporation to citizens and resident aliens/NRFCs
30% WC213
Cash dividend payment by domestic corporation to NFRCs whose countries allowed tax deemed paid credit (subject to tax
WF 15% WC222
sparing rule)
Property dividend payment by domestic corporation to NFRCs whose countries allowed tax deemed paid credit (subject to tax
15% WC223
sparing rule)
Cash dividend payment by domestic corporation to non-resident alien engaged in Trade or Business within the Philippines
WF 20% WI224
(NRAETB)
WF Property dividend payment by domestic corporation to NRAETB 20% WI225
Share of NRAETB in the distributable net income after tax of a partnership (except GPPs) of which he is a partner, or share in
WF the net income after tax of an association, joint account or a joint venture taxable as a corporation of which he is a member or a20% WI226
co-venturer
WF On other payments to NRFCs 30% WC230
WF Distributive share of individual partners in a taxable partnership, association, joint account or joint venture or consortium 10% WI240
All kinds of royalty payments to citizens, resident aliens and NRAETB (other than WI380 and WI341), domestic and resident
WF 20% WI250 WC250
foreign corporations
WF On prizes exceeding P10,000 and other winnings paid to individuals 20% WI260
WF Branch profit remittance by all corporations except PEZA/SBMA/CDA registered 15% WC280
WF On the gross rentals, lease and charter fees derived by non-resident owner or lessor of foreign vessels 4.5% WC290
WF On gross rentals, charter and other fees derived by non-resident lessor or aircraft, machineries and equipment 7.5% WC300
WF On payments to oil exploration service contractors/sub-contractors 8% WI310 WC310
Payments to non-resident alien not engage in trade or business within the Philippines (NRANETB) except on sale of shares in
WF 25% WI330
domestic corporation and real property
WF On payments to non-residnet individual/foreign corporate cinematographic film owners, lessors or distributors 25% WI340 WC340
WF Royalties paid to NRAETB on cinematographic films and similar works 25% WI341
Final tax on interest or other payments upon tax-free covenant bonds, mortgages, deeds of trust or other obligations under Sec.
WF 30% WI350
57C of the NIRC of 1997, as amended
WF Royalties paid to citizens, resident aliens and nraetb on books, other literary works and musical compositions 10% WI380
WF Informers cash reward to individuals/juridical persons 10% WI410 WC410
WF Cash on property dividend paid by a Real Estate Investment Trust 10% WI700 WC700
[return to index]
FRINGE BENEFITS GRANTED TO EMPLOYEES (EXCEPT RANK AND FILE EMPLOYEES)
Fringe Benefit means any good, service or other benefits furnished or granted in cash or in kind by an employer to an individual employee (except rank and file) such as
but not limited to the following:
a. Housing
b. Expense account
c. Vehicle of any kind
d. Household personnel (maid, driver and others)
e. Interest on loan at less than market rate to the extent of the difference between the market rate and actual rate granted
f. membership fees, dues and other expenses borne by the employer for the employee in social and athletic clubs or other similar organizations
g. Expenses for foreign travel
h. Holiday and vacation expenses
i. Educational assistance to employee or his dependents; and
j. Life or health insurance and other non-life insurance premiums or similar amounts in excess of what the law allows.
[return to index]
WITHHOLDING TAX ON GOVERNMENT MONEY PAYMENTS (GMP) - PERCENTAGE TAXES
Withholding Tax on Government Money Payments (GMP) - Percentage Taxes - is the tax withheld by National Government Agencies (NGAs) and instrumentalities,
including government-owned and controlled corporations (GOCCs) and local government units (LGUs), before making any payments to non-VAT registered
taxpayers/suppliers/payees.
TAX
DESCRIPTION RATE ATC
TYPE
Applicable to Government Withholding Agent Only
WV VAT withholding on Purchase of Goods 5% WV010
WV VAT Withholding on Purchase of Services 5% WV020
Applicable to Both Government and Private Withholding Agents
WV VAT Withholding from non-residents (Government Withholding Agents) 12% WV040
WV VAT Withholding from non-residents (Private Withholding Agents) 12% WV050
WV VAT Withholding on Purchases of Goods (with waiver of privilege to claim tax credit) creditable 12% WV012
WV VAT Withholding on Purchases of Goods (with waiver of privilege to claim input tax credit) final 12% WV014
WV VAT Withholding on Purchases of Services (with waiver of privilege to claim input tax credit) creditable 12% WV022
WV VAT Withholding on Purchases of Services (with waiver of privilege to claim input tax credit) final 12% WV024
Applicable to Government Withholding Agent Only
WB Tax on Carriers and Keepers of Garages 3% WB030
WB Franchise Tax on Gas and Utilities 2% WB040
Franchise tax on radio & TV broadcasting companies whose annual gross receipts do not exceed P10M & who are not-VAT registered
WB 3% WB050
taxpayer
WB Tax on Life insurance premiums 2% WB070
WB Tax on Overseas Dispatch, Message or Conversation from the Philippines 10% WB090
WB Business tax on Agents of Foreign Insurance companies - Insurance Agents 4% WB120
WB Business tax on Agents of Foreign Insurance companies - owner of the property 5% WB121
WB Tax on international carriers 3% WB130
WB Tax on Cockpits 18% WB140
Tax on amusement places, such as cabarets, night and day clubs, videoke bars, karaoke bars, karaoke televion, karaoke boxes, music
WB 18% WB150
lounges and other similar establishments
WB Taxes on Boxing exhibitions 10% WB160
WB Taxes on professional basketball games 15% WB170
WB Tax on jai-alai and race tracks 30% WB180
6/10 of
WB Tax on sale barter or exchange of stocks listed and traded through Local Stock Exchange WB200
1%
WB201
Tax on shares of stocks sold or exchanged through initial and secondary public offering - Not over 25% - Over 25% but not4% 2%
WB WB202
exceeding 33 1/3% - Over 33 1/3% 1%
WB203
WB Tax on Banks and Non-banks Financial Intermediaries Performing Quasi Banking Dunctions
A. On interest, commissions and discounts from lending activities as well as income from financial leasing on the basis of the
WB301
remaining maturities of instruments from which receipts are derived - Maturity period is five years or less - Maturity period 5% 1%
WB302
is more than five years
B. On dividends and equity shares and net income of subsidiaries 0% WB102
C. On royalties, rentals of property, real or personal, profits from exchange and all other items treated as gross income under the
7% WB103
Code
D. On net trading gains within the taxable year on foreign currency, debt securities, derivatives and other similar financial
7% WB104
instruments
WB Tax on Other Non-Banks Financial Intermediaries nor performing Quasi-Banking Functions
A. On interest, commissions and discounts from lending activities as well as income from financial leasing on the basis of the
5% WB108
remaining maturities of instruments from which such receipts are derived - Maturity period is five years or less - Maturity
1% WB109
period is more than five years
B. On all other items treated as gross income under the Code 5% WB110
APPLICABLE TO BOTH GOVERNMENT AND PRIVATE WITHHOLDING AGENTS
Persons exempt from VAT under Sec. 108BB (creditable) Government Withholding Agent 3% WB080
Persons exempt from VAT under Sec. 108BB (creditable) Private Withholding Agent 3% WB082
Persons exempt from VAT under Section 109BB (Section 116 applies) 3% WB084
[return to index]

Bir Tax

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Income Tax Description

Who are required to File Income Tax Returns?

 Corporations including partnerships, no matter how created or organized.

 May 15 of the current taxable year– for the first quarter

Annual Income Tax For Corporations And Partnerships

Account Information Form For Corporations And Partnerships

Quarterly Income Tax For Corporations And Partnerships

Improperly Accumulated Earnings Tax For Corporations

Income Tax Rates

Amount of Net Taxable Income Rate

II. For Non-Resident Aliens Not Engaged in Trade or Business

III. For Non-resident Aliens Not Engaged in Trade or Business

V. For General Professional Partnerships

Net Income of the Partnerships 0%

VI. For Domestic Corporations

Rates of Tax on Certain Passive Income of Corporations Tax Rate

Related Revenue Issuances

Frequently Asked Questions

2) What is Taxable Income?

3) What is Gross Income?

Gross income means all income derived from whatever source.

4) What comprises gross income?

5) What are some of the exclusions from gross income?

6) What are the allowable deductions from gross income?

7) Who are not required to file Income Tax returns?

d. An individual who is a minimum wage earner

8.) Who are exempt from Income Tax?

b. Overseas Filipino Worker, including overseas seaman

c. General Professional Partnership

d. Government Service Insurance System (GSIS)

e. Social Security System (SSS)

f. Philippine Health Insurance Corporation (PHIC)

g. Local Water Districts (LWD)

9) What are the procedures in filing Income Tax returns (ITRs)?

A. Based on Graduated Income Tax Rate

Gross Income P ___________

Less: Tax Withheld (per BIR From 2316) ____________

Income Tax Payable P____________

B. Based on Preferential Tax Rate of 8%

i. Taxpayers source of income is purely from self-employment

Gross Sales/Receipts P ___________

Tax Withheld (per BIR From 2307) ____________

Income Tax Payable P ___________

ii. Mixed Income Earner

Tax Withheld (per BIR From 2316/2307) ____________

Income Tax Payable P ___________

11) How is Income Tax Paid?

a. Individual Payee: Rate

Income Tax Due P ___________

13) Who are covered by MCIT?

14) When does a corporation start to be covered by the MCIT?

15) When is the MCIT reported and paid? Is it quarterly?

16) How is MCIT computed?

17) What is the carry forward provision under the MCIT?

18) How would the MCIT be recorded for accounting purposes?

19) How long can we amend our income tax return?

 Who shall file

 When and Where to File and Pay

For real property - 6%.

 Who shall file

 When and Where to File and Pay

Taxpayer type Tax rate Legal basis Effectivity date

RELATED REVENUE ISSUANCES