NATIONAL

TAXATION
SYSTEM
CAPITAL GAIN TAX
is the government fee on the profit or loss you earned or made from investment of your capital
asset. Like a rental property, stocks, or house.

For example: You buy 200 shares of a stock at 800php a share and pay 200php for commissions.
Your cost basis will be 200*800php the cost of the stock + 200php the cost for commissions it
equals to 160,200. After that, you sell the stock two years later for 950php and pay again 200php
for comissions. Your net selling price is 200*950 the selling price of the stock + 200php for
commissions equals to 190,200. Your capital gain will be 190,200 – 160,200 equals to 30,000.
You may owe taxes on that 30,000php gain.
DOCUMENTARY STAMP TAX
 It is a kind of tax imposed on different transactions on the execution of transaction documents
which is called as DST for short. The DST commonly applies to issuance and sale of stocks, As
well as different loan, debt agreements, sale and transferring of property. As the DST value is
based off the overall value of different transactions and thus will have implications for
accounting, bookkeeping and tax compliances for different businesses within the Philippines.

An example of Documentary Stamp Tax is: An Investor wishes to purchase 100,000 different
shares of stock in the Philippine entity at their par value of P100 per share. The computation for
the original issuance of stock in a company is computed on the basis of P2.00 for every P200, or
otherwise, 1% of the value.
DONOR’S TAX
Donor’s tax in the Philippines is imposed upon gratuitous transfers of property from one
person to another during their lifetime. Gratuitous means that the property is given away for free
or that the recipient does not have to pay for it when they receive it from the donor or the giver.
One of the stated reasons for the application of a donor's tax is to close the gap between the rich
and the poor by reducing the amount that the more affluent will give or donate.
ESTATE TAX
When we say, “Estate tax”, it is a tax on the rights of the deceased person to transmit his or her
estate to his or her lawful beneficiary at the time of death and on certain transfers. It is not a tax
on property. This tax is imposed on the privilege of transferring or transmitting property upon the
death of the owner. Example: if the inherited estate's net share is PHP 2.5 million, the estate tax is
PHP 135,000 plus 11% of PHP 500,000 or PHP 55,000. Thus, the tax due is PHP 190,000.
INCOME TAX
To fund government responsibilities, provide public services, and distribute orders to citizens as
well, we call these kinds of control as INCOME TAX. From the word itself, this is a type of tax
that will be lessened from individuals’ income with their authority. It is also the primary or major
source of governments revenue. Only a certain percentage of the salary will be reduced and be
given to the official tax payee.

Example: If an employee is earning ₱25,000 per month they may pay 5% of their income
compared to those earning ₱50,000 with 10% payable income tax.
PERCENTAGE TAX
In the Philippines, percentage tax is a business tax that is needed to be paid by businesses that
sells supplies, offers services, or professionals who are earning less than ₱3,000,00 in a year.
Deadline for quarterly percentage tax is every 25th day following the end of the quarter. This
means that an individual or businesses will pay every three months. Second quarter will resume
after the 25th day of the end of the first quarter. Percentage tax is calculated by multiplying the
gross sales to 3% rate. Let's say that a business who sells goods earned gross sales of ₱400,000
this quarter. Multiplying ₱400,000 and 3% will give a total of ₱12,000.
VALUE ADDED TAX
VAT (Value Added Tax) is a type of sales tax. It is a consumption tax imposed on the sale, trade,
exchange, or lease of products, properties that are owned by Filipinos, and services that are being
offered in the Philippines, as well as on goods imported into the country. A rate ranging from 0 to 12
percent of Value Added Tax were being added by the government to the cost of services and goods
sold depending on the operations of the firms. It is an indirect tax that can be passed into the
purchaser, transferee or lessee of commodities, assets and services. In the Philippines, the Value
Added Tax is a tax that every business owner should be aware of. All Filipinos should be aware of it.

For example: in the case of Value Added Tax the tax is included in the cost of the product. When you
purchase goods or services the value of VAT will be indicated or listed on the bill or receipt. It means
that the consumer or buyer is responsible for paying the Value Added Tax but the seller or the
merchant is accountable and obligated for remitting it to the BIR or Bureau of Internal Revenue.
WITHHOLDING TAX
Withholding tax is the money an employer deducts from an employee's gross wages and pays
directly to the government. The amount withheld is a credit against the income taxes the
employee must pay during the year. Withholding tax is a set amount of income tax that an
employer withholds from an employee’s paycheck and pays directly to the government in the
employee's name. The money taken is a credit against the employee’s annual income tax bill. If
too much money is withheld, an employee will receive a tax refund; if not enough is withheld, an
employee will have additional taxes due
EXCISE TAX
A tax on the manufacture, sale, or consumption of an item in a country is known as excise tax. It
applies to items made or produced in the Philippines for domestic sale, consumption, or any other
purpose, as well as imported goods. Excise taxes are mostly paid by enterprises. The expense of
excise taxes may or may not be visible to consumers. Merchants pay a large portion of excise
taxes, which they then pass on to consumers in the form of higher pricing. Merchants pay excise
taxes to wholesalers and factor them into product pricing, raising the entire retail price.
NATIONAL
TAXATION
SYSTEM
PRESENTED BY:
PADUA, Jeanelle Angel S.
AGUILAR, Michael Angelo T.
PEREZ, Anne Ariane M.
CORONADO, Dominic
MAGHIRANG, Franz Viktoria
B.
BELEN, John Gerald C.
BUENO, Maria Lalezka D.
BELARMINO, Rovic Baron