Republic of the Philippines

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

COLLEGE OF ACCOUNTANCY & FINANCE Taxation 2: LML / VGL / GSJ

MODULE 3: OTHER PERCENTAGE TAXES

OVERVIEW:

Companies are subject to different types of taxes imposed by the Government.

These taxes are governed by the National Internal Revenue Code and the amendments to that
law. Taxes imposed by the government maybe either national or local taxes. National taxes are
those taxes imposed by national government, enforced by or through the Bureau of Internal
Revenue or BIR. Taxes imposed and paid to BIR includes income taxes and business taxes.
Generally, income taxes are imposed to a person when there is an income while, business tax is
imposed when there is a business transaction such as sale or exchange of goods or services. In
the Philippines, there are generally three types of business taxes: namely, Other Percentage
Taxes (or Percentage Tax), Value Added Tax (VAT) and Excise Taxes.

On this module, we will discuss the provisions of Tax Code related to Other
Percentage Taxes or Percentage Taxes.

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.

MODULE DURATION:
• December 1-30, 2020 Synchronous Meeting and Asynchronous Learning.
• For asynchronous learning inquiries, you may reach me through messenger
group/personal message.

MODULE OBJECTIVES:

After successful Completion of this module, you should be able to:

1. To be able to apply the Administrative Provisions and the Practical Provisions on

Percentage taxes:
2. Learn When and Where to file and pay percentage taxes.
3. Know who are liable to pay the percentage taxes.
4. Know the statutory penalties for noncompliance.
5. To be able to identify what business activities are subjected to percentage taxes
and their respective applicable percentage tax rates under Section 116 to 127 of
Tax Code.
6. To know the basis is in computing the percentage tax (net or gross).

COURSE MATERIALS:

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Under this module, the topic Other Percentage Taxes is subdivided into four (4)
lessons as follows:

Lesson 1; Administrative Provisions and Fundamental Concepts of Other Percentage Taxes

Lesson 2: Laws / Rules on Other Percentage Taxes from Section 116 to 122

Lesson 3: Laws / Rules on Other Percentage Taxes from Section 123 to 127

Lesson 4: Laws / Rules on Percentage Tax Credits

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POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
COLLEGE OF ACCOUNTANCY & FINANCE Taxation 2: LML / VGL / GSJ

MODULE 3: OTHER PERCENTAGE TAXES

Lesson 1: Administrative Provisions

and Fundamental Concepts of Other Percentage Taxes

Overview:

Business taxes are collected from sale of goods or services. Business taxes
imposed by the government in the Philippines are Value Added Tax or VAT, Other Percentage
Taxes (OPT) or excise taxes. Companies shall file and pay the business tax applicable to their
business. In general, a person who is a VAT registered taxpayer shall pay the VAT payable only
and will not be subject to OPT and vice versa. However, a VAT registered taxpayer may be subject
to VAT and to Excise Tax or, a NON-VAT registered taxpayer may pay both percentage taxes
and excise tax.

On this module, we will discuss the provisions of the Philippine Tax Code and
fundamental concepts of Other Percentage Taxes (OPT). Percentage Tax is a business tax that
is regulated in the Philippines which is imposed on individuals or businesses that sell/lease goods
and services with annual sales not exceeding PHP 3 Million and is not VAT registered. Included
in this module the date and place of filing and payment of percentage taxes, percentage tax return
to be filed by businesses, procedures in filing, and different kinds of percentage taxes as provided
by Sec 116 to sec 127 of the Tax Code.

Module Objectives:

After successful Completion of this module, you should be able to:

1. Learn the compliance requirements of BIR to all businesses and the registration of
persons subject to business taxes.
2. Understand the kinds of business taxes in the Philippines.
3. Know the person required to register as Non-VAT registered persons and the Optional
registration of VAT exempt persons
4. To know when and where to file percentage tax return.
5. To learn the penalty / additions to basic assessed tax or deficiency tax

Course Materials:

ADMINISTRATIVE PROVISIONS:

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.

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COLLEGE OF ACCOUNTANCY & FINANCE Taxation 2: LML / VGL / GSJ

Compliance Requirements:

Any merchant or business organization in whatever form or nature, if liable for any national tax as
provided by the Tax Code, are mandated to comply with the following requirements:

a. Registration with BIR

b. Keeping of accounting records and books
c. Issuance of sales invoice and official receipts
d. Filing of tax returns and payment of related taxes
e. Withholding of taxes on specified payment to suppliers-sellers.

Annual Registration Fee for Persons Subject to Percentage Tax

Non-VAT registered persons shall pay the applicable registration fee of P 500 for every separate
distinct establishment or place of business and every year thereafter on or before January 31.

The P 500 registration fee shall be paid to any accredited bank where each place of business or
branch is situated. In areas where there is no accredited bank, such person shall pay the
registration fee with the Revenue District officer, revenue Collection Agent or authorized
Treasurer of the City where said business or principal of office is located as the case maybe.

However, at the options of the taxpayer, payments may be made on a semiannual basis in the
amount of P 250 payable on or before Jan 31 for the first semester and on or before the 20th day
of the 1st succeeding semester.

Contents of the Non-VAT registration Certificate:

The registration shall contain:

1. Business name / owner
2. Business style
3. Place of residence / business
4. Place where such business is carried on
5. Other information as required by BIR Commissioner

Persons 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.

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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 new
sticker 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

Filing and Payment of Taxes:

Documentary Requirements
1. BIR Form 2551Q - Quarterly Percentage Tax Return Form

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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

When to File/Pay

Within twenty-five (25) days after the end of each taxable quarter. Please see
Lesson 2 and Lesson 3 for details of filing of Percentage Tax Returns

Extension of Filing the Percentage Tax Returns:

There shall be no granting of extension for filing of the percentage tax returns.

Preservation of Books:

All accounting records and book of accounts shall be preserved for a period beginning
from the last entry in each book until the last day prescribed by Section 203 of NIRC within which
the BIR Commissioner is authorized to make an assessment (either 3 years or 10 years.)

FUNDAMENTAL CONCEPTS:

A business is defined as an organization or enterprising entity engaged in

commercial, industrial, or professional activities. ... The term "business" also refers to the
organized efforts and activities of individuals to produce and sell goods and services for profit.

All businesses must adopt some legal configuration that defines the rights and
liabilities of participants in the business’s ownership, control, personal liability, lifespan and
financial structure. The form of business determines which income tax return form to file and the
company’s and owners legal liabilities.

Forms of Business Organizations:

1. Sole proprietorship- Most small businesses start out as sole proprietorships. These
businesses are owned by one person, usually, the individual who has day-to-day
responsibility for running the business. Sole proprietors can be independent
contractors, freelancers or home-based businesses.
2. Partnerships. In a Partnership, two or more people share ownership of a single
business. Like proprietorships, the law does not distinguish between the business and
its owners. The partners should have a legal agreement that sets forth how decisions
will be made, profits will be shared, disputes will be resolved, how future partners will

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COLLEGE OF ACCOUNTANCY & FINANCE Taxation 2: LML / VGL / GSJ
be admitted to the partnership, how partners can be bought out or what steps will be
taken to dissolve the partnership when needed.
3. Corporations. A corporation is considered by law to be a unique entity, separate from
those who own it. A corporation can be taxed, sued and enter into contractual
agreements. The corporation has a life of its own and does not dissolve when
ownership changes.

Business Taxes:

The following are the national taxes imposed upon businesses specified in the Tax Code / NIRC:

1. 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.
2. 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.
3. Excise Tax is a tax on the production, sale or consumption of a commodity in a
country.
4. 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.

Classification of Percentage Taxes

1. Excise tax- also known as privilege tax

2. Ad valorem tax- tax is computed by applying a rate based on a property’s value.
3. Indirect tax- the burden of payment of tax is allowed bylaw to be shifted to other persons
4. National tax
5. Single rate or flat rate tax

Classification of merchants / Businesses

1. Person subject to VAT
2. Persons subject to OPT
3. Persons subject to both VAT and OPT
4. Person exempted from both VAT and OPT
5. Persons subject to both VAT and Excise Tax
6. Persons subject to both OPT and Excise tax

Marginal income earner (MIE)

A marginal income earner (MIE) is an individual not deriving compensation as an

employee under an employer-employee relationship but who is self-employed and
deriving gross sales or receipts not exceeding P100,000 in any 12-month period.

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MIE refers to an individual not deriving compensation as an employee under an
employer-employee relationship but who is self-employed and deriving gross sales or
receipts not exceeding P100,000 in any 12-month period. Moreover, the activities of such
MIE should be principally for subsistence or livelihood. The term includes, but not limited
to, agricultural growers/producers (farmers/fishermen) selling directly or indirectly to
ultimate consumers, small sari-sari stores, small carinderias or “turo-turos”,
drivers/operators of a single unit tricycle, and such, but shall not include licensed
professionals, consultants, artists, sales agents, brokers and others similarly situated,
including all others whose income have been subjected to withholding tax.

MIE are exempted from annual registration fees and business taxes. However, if
their yearly gross sales / receipts do exceed P 100,000 but not exceeding the turnover
amount of P 3,000,000, then hey are subject to OPT under Sec 116; If however, their
yearly gross sales / receipts do exceed P 3,000,000, they are subject to 12% VAT.

Options of Merchants on Percentage Taxes:

1. The merchant absorb or pay the percentage tax on sales or

2. The merchant shift the percentage on sales to its customers.

Non-Vat registered persons may not be adversely affected by the percentage taxes on
their taxable sales, though they are the ones directly liable to pay the percentage taxes, the same
however can be charged to their client or customers.

In the Course of Trade or Business;

It means the regular conduct or pursuit of a commercial economic activity, including

transactions incidental thereto, by any person regardless of whether or not the persons engaged
therein is non stock, non profit organization or government entity.

Penalty / Additions to the Basic Assessed tax or Deficiency tax

1.Surcharge of 25% in cases of:
a. Failure to file any tax return and pay the tax due on the required date as prescribed
b. Unless otherwise authorized by BIR Commissioner, filing a tax return with internal revenue
officer other than those whom the return is required to be filed.
c. Failure to pay the deficiency tax within the time prescribed for its payment in the notice of
assessment and demand.
d. Failure to pay the full or part of amount of tax shown on nay tax return required to be filed.

2.Surcharge of 50% in cases of;

a. In case of willful neglect to file tax return within the period prescribed by law and regulations.
b. In case of false or fraudulent tax return is willfully made.
3. Interest of 20% per annum (Old tax law) / 12% per annum under the NEW tax Code.

Illustration:

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COLLEGE OF ACCOUNTANCY & FINANCE Taxation 2: LML / VGL / GSJ
Computations to determine the penalties / additions to tax:
Case 1; In 2016; Correct tax due is P 150,000 while the Payment of tax made is P 100,000 only.
The unpaid tax is overdue for 3 months. Assuming there is no fraud nor willful neglect to file and
pay the correct tax due.
Delinquent tax is 50,000 (150,000 less 100,000)
Surcharge is 25% of P 50,000 or 12,500*
Interest** is 20% of 50,000 for 3 months OR 2,500 (50,000x .2 x 3/12)
Total amount due per BIR demand will be: 65,000 (50,000+ 12,500+2,500)
*Use 50% surcharge when there is fraud or willful neglect to file and pay the tax due.
**Use 12% rate per annum starting Jan 1, 2018 and so on.

Watch:
https://www.youtube.com/watch?v=ynrD8tEljbM
https://www.youtube.com/watch?v=t5zdOHFQ8qo
Read:
https://www.bir.gov.ph/index.php/tax-information/percentage-tax.html

Codal Reference:

Sections 116 to 127 of the National Internal Revenue Code of 1997 (also known as Tax
Code), as amended

Activities/Assessments:

True or False (1 point each)

1. In general, every person- merchant other than those required to be registered as VAT persons
engaged in any business, trade or exercise of profession shall register as Non vat registered
person with RDO concerned on or after the commencement of his business.
2. Whenever a person transfer to another revenue district, he must register his business as a non
vat registered person within 30 days from date of transfer.
3. Registration fee of Non vat registered person is P 500 for every distinct establishment or place
of business and every year thereafter on or before December 31.
4. Non Vat registration Certificate contains the name of owner, place of residence, business
name, place where business is carried on and the description of the product sold or services
offered.
5. Attachments to Non vat Registration Application / certificate includes sketch of the owner's
residence, TIN and photocopy of mayors permit and articles of partnership if it is a partnership.
6. VAT exempt persons in Sec 109 of NIRC whose gross sales or receipts does not exceeds P
3M for any 12-month period, may, at his option, to apply for VAT registration. However, they shall
not be allowed to cancel the registration for next 3 years. Of course, that person will not be VAT
exempt.

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7. Franchise grantees of radio and television broadcast station or companies may opt to apply for
VAT registration provided that the gross sales or receipts of the company does not exceed P 10M,
however, the application as VAT registered person will not be irrevocable.
8. All corporations, companies, partnership or persons required by law to pay internal revenue
taxes shall keep a journal, ledger, trial balance and worksheet representing the company's
accounting records.
9. The accounting books of the company shall be written in native language, English, Spanish or
Chinese, if necessary and to make the records understandable and easy for BIR audit.
10. In keeping accounting records, those persons with quarterly sales or receipts which does not
exceed 100,000 shall keep and use simplified set of bookkeeping records duly authorized by
secretary of finance.
11. Corporations whose quarterly sales or receipts exceeds P 150,000 shall their books of
accounts audited and examined quarterly by CPA and their Income tax returns accompanied by
duly accomplished AIF (Account Information Form)
12. The accounting records and book of accounts shall be preserve by the company until the last
day prescribed by Section 203 of NIRC. BIR can make assessment of the books of accounts
within 3 years from last date of filing or if late filing, from the date of filing of tax return. But, it
should be preserved for 10 years for BIR assessment when the return was found to be fraudulent.
13. In general, Percentage tax returns prior to 2018 shall be filed in a monthly basis, that is 20
days after the end of each taxable month. In 2018 and so on, percentage tax returns shall be filed
in a quarterly basis, file in triplicate, within 25 days after the end of each taxable quarters.
14. Quarterly percentage tax returns for Amusements places, winners in horse and dog races,
and from Overseas Communications from Philippines shall be filed within 20 days.
15. Percentage tax due shall be paid within 25 days from the date of filing.
16. Every person liable to pay percentage tax returns must file a consolidated percentage tax
return for all of them (all branches).
17. The percentage tax return originally filed maybe amended within 5 years from the prescribed
date provided that no notice for audit and examination has been actually served to taxpayer.
18. If the person failed to issue receipts or invoices to customers, the BIR Commissioner after
taking into account the sales and other taxable base of other person engaged in similar business
and under similar situations may prescribed a minimum amount of gross receipts for purpose of
computing the tax liabilities of such person.
19. Percentage tax is generally shouldered by the seller, while VAT are shouldered or collected
from buyers. Thus, business taxes, except percentage tax, is an indirect tax.
20. A person ,who is not VAT exempt registered, who issues a vat invoices shall be liable to both
percentage tax and VAT .
21. ABC Corp's place of business is in Manila. The company has a branch in Cebu. The
stockholders lived in Basilan. Thus, the company may file its percentage tax return in Cebu.
22. ABC Corp's place of business is in Manila. The company has a branch in Cebu. The
stockholders lived in Basilan. Thus, the company must pay to concerned RDO a total of P 1,000
as payment of annual registration fee.
23. Marginal Income Earner refers to person with gross receipts or gross sales that does not
exceeds P 100,000; thus exempt from both VAT and percentage taxes but shall register as vat
registered without paying the P 500 registration fee.

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24. NON vat registered persons are not allowed to charged or shift the percentage tax to
customers because percentage taxes are shouldered by the seller.
25. In application to percentage tax, gross receipts shall mean the total amount of money or its
equivalent which the purchaser pays or obligated to pay to seller in consideration of sale of goods
which also include "other charges" such as percentage taxes, if billed to customers, and excise
tax.
26. Domestic common carriers by air or sea for transport of passengers are subject to percentage
tax of 3% of gross receipts.
27. Domestic common carriers by land for transport of cargoes/ goods are subject to percentage
tax of 3% of gross receipts.
28. International carriers by air or water for transport of passengers is not taxable or not subject
to business tax.
29. International carriers by air or water for transport of cargoes / goods from abroad to Philippines
is not taxable or not subject to business tax.
30. International carriers by air or water for transport of cargoes / goods from Philippines to abroad
is subject to 12% VAT.
31. International carriers by air or water for transport of cargoes / goods from abroad to Philippines
is subject to 12% VAT.
32. Franchise grantees of water and gas utilities are subject to 2% percentage tax based on gross
receipts ,regardless of threshold.
33. Dealers and distributors of gas and water utilities are subject to 3% percentage tax based on
gross receipts .
34. Other franchise holders like electricity are subject to 12% VAT instead of percentage tax.
35. Receipts or collections on business activities not covered by franchise grant by the govt are
subject to 10% tax.
36. The minimum standard quarterly gross receipts per unit for domestic land common carriers is
P 1,200 for jeepneys for hire operating in Manila.
37. The minimum standard quarterly gross receipts per unit for domestic land common carriers is
P 3,000 for taxi operating in Manila.
38. Cebu Pacific Airlines is subject to 3% percentage tax.
39. Pasig Catholic Cooperative, nonprofit organization is subject to percentage tax.
40. Exempted from overseas communication tax under Sec 120(B) are as follows: Government,
diplomatic services and news services.
_____________________________THANKYOU!!___________________________
1. 11 21. 31.
2. 12 22. 32.
3. 13 23. 33.
4. 14 24. 34.
5. 15 25. 35.
6. 16 26. 36.
7. 17 27. 37.
8. 18 28. 38.
9. 19 29. 39.
10. 20 30. 40.

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MODULE 3: OTHER PERCENTAGE TAXES

Lesson 2: Other Percentage Taxes on Non-VAT registered Taxpayers

Under NIRC, as amended Section 116,117,118,119,120, 121 and 122

Overview:

Non-VAT Registered Persons refers to a person, natural or juridical, whose

transactions are not liable to VAT and did not registered as VAT person.

For small businesses with gross annual sales and receipts that do not exceed P
3,000,000 (P1,919,500 in the Old Tax Code), and are not VAT-registered, percentage tax is
imposed for sold or leased goods, properties or services. The percentage tax rate varies
depending on the nature of business. The usual rate is 3% of gross sales or receipts but it could
go as high as 30%, for gross receipts of Jai-Alai and racetrack operators for instance.

On this module, we will discuss the percentage tax rates provided by Tax Code
under section 116 to Section 122 which includes the following businesses: Seller of goods and
services, Domestic common carriers by land and Keepers of garage for services rendered;
International common carriers, Franchise Grantees. Overseas communication originating from
the Philippines to abroad and Banks, Non-bank Financial Intermediaries

Module Objectives:

After successful Completion of this module, you should be able to:

1. To know the Administrative Provisions and the Practical Provisions on Percentage
taxes (From Section 116 to Section 122 of Tax Code).
2. To be able to identify what business activities are subjected to percentage taxes under
Sec 116, 117, 118, 119, 120, 121 and 122.
3. Who are liable to pay the percentage taxes under Sec 116, 117, 118, 119, 120, 121
and 122.
4. When and Where to file and pay percentage taxes provide under Sec 116, 117, 118,
119, 120, 121 and 122.
5. To know the basis in computing the percentage tax (net or gross) under Sec 116, 117,
118, 119, 120, 121 and 122.
6. Statutory Penalties for noncompliance.

Course Materials:

Quarterly Percentage Tax Rates Table from Section 116 to 121:

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COLLEGE OF ACCOUNTANCY & FINANCE Taxation 2: LML / VGL / GSJ

Coverage Taxable Base Tax Rate

Non-VAT registered persons under Gross sales or receipts 3%
Section 109 (BB)
Domestic carriers and keepers of Gross receipts 3%
garages
International air/shipping carriers doing Gross receipts on transport of 3%
business in the Philippines cargo from the Philippines to
a foreign country
Franchise grantees: 2%
Gas and water utilities
3%
Radio and television broadcasting
Gross receipts
companies whose annual gross receipts
of the preceding year do not exceed
Php10,000,000 and did not opt to register Gross receipts
as VAT taxpayer
Overseas dispatch, message or Amount paid for the service 10%
conversation originating from the
Philippines
Banks and non-bank financial
intermediaries performing quasi-banking
functions

Interest, commissions and discounts from

lending 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 5%
years or less

• If maturity period is more 1%

than five years
Dividends and equity shares 0%
and net income of
subsidiaries
Royalties, rentals of property, 7%
real or 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 7%
taxable year of foreign

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currency, debt securities,
derivatives and other similar
financial instruments
Other non-bank financial intermediaries Interest, commissions, 5%
discounts and all 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 5%
years or less
• If maturity period is more 1%
than five years

SEC. 116. Tax on Persons Exempt from Value-Added Tax (VAT). –

Any person whose sales or receipts are exempt under Section 109(V) of this Code
from the payment of value-added tax and who is not a VAT-registered person shall pay a tax
equivalent to three percent (3%) of his gross quarterly sales or receipts: Provided, That
cooperatives shall be exempt from the three percent (3%) gross receipts tax herein imposed.

Requisites in order to be subject to Sec 116 of tax Code:

1. Annual gross sales or receipts does not exceed P 3M
2. Not VAT registered
3. Not VAT exempt under Section 109 (A) to 109 (AA) – Please RA 8424 for the details
of Sec 109
4. Not subject to OPT under Sections 117 to 127

PERCENTAGE TAX ON SELLER OF GOODS OR SERVICES:

Tax Base Gross Sales price or Net Sales price of goods* / Gross receipts or net
receipts on Sale of Services
Tax Source Within the Philippines
Tax rate 3% rate
Tax Formula Gross Sales price or Net Sales price of Goods / Gross receipts / Net receipts
on services sold x 3% tax rate = Percentage Tax

Sales returns and allowances and Discounts are deducted from gross sales / gross receipts to
arrive at modified tax base known as Net Sales price/ Net receipt which shall be the amount
subject to 3% tax rate.

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COLLEGE OF ACCOUNTANCY & FINANCE Taxation 2: LML / VGL / GSJ

Illustration:
Case 1 (OPT shouldered Case 2 (OPT shouldered by
by Seller) Buyer)
Sales price 80,000 80,000
Percentage Tax (3%) 0 2,400
Gross Sales Price 80,000 82,400
Less; Sales return / discounts 0 1,500
Net Sales Price 80,000 80,900
Percentage Tax Rate 3% 3%
Percentage Tax Due 2,400 2,427

SEC. 117. Percentage Tax on Domestic Carriers and Keepers of Garages. –

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 shall pay a tax equivalent to three percent (3%) of their quarterly gross receipts.

The gross receipts of common carriers derived from their incoming and outgoing freight
shall not be subjected to the local taxes imposed under Republic Act No. 7160, otherwise known
as the Local Government Code of 1991.

In computing the percentage tax provided in this Section, the following shall be considered
the minimum quarterly gross receipts in each particular case:
Jeepney for hire -

1.Manila and other Cities P 2,400

2. Provincial 1,200

Public utility bus -

P 3,600
Not exceeding 30 passengers 6,000
Exceeding 30 but not exceeding 50 passengers 7,200
Exceeding 50 passengers
Taxis -

1. Manila and other Cities P 3,600

2. Provincial 2,400

Car for hire (with chauffer) P 3,000

Car for hire (without chauffer) 1,800

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A Common carrier refers to a private or public entity that transport goods or people from one place
to another for a fee.

Two Types of Common Carriers: Domestic common carrier- refers to domestic /local companies
while; International common carrier refers to resident foreign corporations.

Requisites in order to be subject to Sec 117 of tax Code;

1. Taxpayer is classified as domestic carrier
2. Transport by land only
3. Domestic carrier for transport of passengers only
4. 3% percentage tax rate regardless whether their yearly gross receipts exceed or do
not exceed the threshold of P 3M

3% Tax rate applied on quarterly gross receipts of 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), including
keepers of garages.

The tax base, quarterly gross receipts, will be equal to the Actual gross receipts per
quarter or the assigned minimum quarterly gross receipts whichever is higher. Other
domestic common carrier by land, on their transport of passengers, without designated
minimum quarterly receipts shall be subject to 3% OPT based on actual gross receipts
on passenger fees.

Illustration:
On transport of passengers:

Quarterly Gross Receipts Higher

Actual Minimum
Taxi, in Manila 75,000 98,600 98,600
Jeepney in 35,100 32,900 35,100
province
Bus, seats over 169,000 197,100 197,100
50
Car for hire (with 57,200 82,100 82,100
driver
TOTAL 412,900
Tax rate 3%
Percentage Tax 12,387
Due

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SEC. 118 Percentage Tax on International Carriers. -

(A) International air carriers doing; business in the Philippines on their gross receipts
derived from transport of cargo from the Philippines to another country shall pay a tax of three
percent (3%) of their quarterly gross receipts.

(B) International shipping carriers doing business in the Philippines on their gross receipts
derived from transport of cargo from the Philippines to another country shall pay a tax equivalent
to three percent (3%) of their quarterly gross receipts.

PERCENTAGE TAX ON INTERNATIONAL AIR/SEA CARRIER

Tax Base Actual Gross Receipts derived from transport of cargo from the Philippines
to another country
Tax Source From Philippines to Abroad
Tax rate 3% rate
Tax Formula Actual Gross receipts x 3%

Illustration:

International Common carrier:

Cargo from Phil to Passenger from Phil to Cargo or passengers
Abroad Abroad from Abroad to Phil
Gross receipts 100,000 100,000 100,000
Percentage 3% None None
Tax (3%)
Percentage 3,000 None / Exempt Excluded /Beyond the
Tax Due (OPT) scope of our Tax laws

SEC. 119. Tax on Franchises. –

Any provision of general or special law to the contrary notwithstanding, there shall be
levied, assessed and collected in respect to all franchises on radio and/or television broadcasting
companies whose annual gross receipts of the preceding year do not exceed Ten million pesos
(P10,000.00), subject to Section 236 of this Code, a tax of three percent (3%) and on gas and
water utilities, a tax of two percent (2%) on the gross receipts derived from the business covered
by the law granting the franchise: Provided, however, That radio and television broadcasting
companies referred to in this Section shall have an option to be registered as a value-added
taxpayer and pay the tax due thereon: Provided, further, That once the option is exercised, said
option shall not be irrevocable.

The grantee shall file the return with, and pay the tax due thereon to the Commissioner or
his duly authorized representative, in accordance with the provisions of Section 128 of this Code,
and the return shall be subject to audit by the Bureau of Internal Revenue, any provision of any
existing law to the contrary notwithstanding.

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PERCENTAGE TAX ON GAS AND WATER UTILITIES
Tax Base Actual Gross Receipts on business income covered by Franchise authority
granted by the Government; Gross Collections on sale of water and gas*
Regardless of whether their yearly gross receipts exceed or not exceed the
threshold of P 3M
Tax Source Within the Philippines
Tax rate 2% rate
Tax Formula Actual Gross receipts x 2%

*Producers and sellers of electricity shall be subject to 12% VAT. Collections or receipts
on business activities not covered by the law grating the franchise are subject to 12% VAT.

PERCENTAGE TAX ON RADIO / TELEVISION BROADCASTING STATION**

Tax Base Actual Gross Receipts on business income covered by Franchise authority
granted by the Government; Gross Collections on sales of services: airtime
and similar items; Gross receipts does not exceed P 10M.
Tax Source Within the Philippines
Tax rate 3% rate
Tax Formula Actual Gross Receipts x 3%

**Radio / television companies with gross receipts not exceeding P 10M, have an option
to be registered as a value-added taxpayer and pay the tax due thereon: Provided, further, that
once the option is exercised, said option shall not be irrevocable.

**Radio / television companies with gross receipts of the preceding year exceeding P 10M
shall be subject to Value Added Tax (VAT)

SEC. 120. Tax on Overseas Dispatch, Message or Conversation Originating from the Philippines. -

(A) Persons Liable. - There shall be collected upon every overseas dispatch, message or
conversation transmitted from the Philippines by telephone, telegraph, telewriter exchange,
wireless and other communication equipment service, a tax of ten percent (10%) on the amount
paid for such services. The tax imposed in this Section shall be payable by the person paying for
the services rendered and shall be paid to the person rendering the services who is required to
collect and pay the tax within twenty (20) days after the end of each quarter.

(B) Exemptions. - The tax imposed by this Section shall not apply to:
(1) Government. - Amounts paid for messages transmitted by the Government of the
Republic of the Philippines or any of its political subdivisions or instrumentalities;
(2) Diplomatic Services. - Amounts paid for messages transmitted by any embassy and
consular offices of a foreign government;
(3) International Organizations. - Amounts paid for messages transmitted by a public
international organization or any of its agencies based in the Philippines enjoying privileges,
exemptions and immunities which the Government of the Philippines is committed to recognize
pursuant to an international agreement; and

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(4) News Services. - Amounts paid for messages from any newspaper, press association,
radio or television newspaper, broadcasting agency, or newstickers services, to any other
newspaper, press association, radio or television newspaper broadcasting agency, or newsticker
service or to a bona fide correspondent, which messages 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.

PERCENTAGE TAX ON OVERSEAS COMMNICATION TAX:

Tax Base Gross payments on Sale of Services – overseas communications /
messages*
Regardless of whether their yearly gross receipts exceed or not exceed the
threshold of P 3M
Tax Source Originating from the Philippines to Abroad
Tax rate 10% rate
Tax Formula Actual Gross Receipts x 10% tax rate

The owner or operator of the communication service equipment / facilities, however, shall
be liable to the 12% VAT on its taxable gross receipts on domestic or local communication
services sold / rendered within the Philippines, bit not to the amount received for overseas
communications originating from the Philippines to Abroad.

Illustrations:

Communication/ From Phil to Abroad Within the Phil / Local From Abroad to Phil
Messages communications
Gross payment 100,000 100,000 100,000
Percentage Tax 10% None None
(10%)
Percentage Tax 10,000 None (Subject to VAT) Excluded /Beyond the
Due (OPT) scope of our Tax laws

SEC. 121. Tax on Banks and Non-Bank Financial Intermediaries Performing Quasi- Banking
Functions. -

There shall be collected a tax on a gross receipt derived from sources within the Philippines by
all banks and non-bank financial intermediaries in accordance with the following schedule:
(a) On interest, commissions and discounts from lending activities as well as income from
(b) financial leasing, on the basis of remaining maturities of instruments from
which such receipts are derived:
Maturity period is five
Maturity period is more than five years

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(b) On dividends and equity shares and net income of subsidiaries

(c) On royalties, rentals of property, real or personal, profits, from exchange and all

other items treated as gross income under Section 32 of this Code

(d) On net trading gains within the taxable year on foreign currency, debt securities,

derivatives, and other similar financial instruments.

Provided, however, That in case the maturity period referred to in paragraph (a) is
shortened thru pre-termination, then the maturity period shall be reckoned to end as of the date
of pre-termination for purposes of classifying the transaction and the correct rate of tax shall be
applied accordingly.

Provided, finally, That the generally accepted accounting principles as may be prescribed
by the Bangko Sentral ng Pilipinas for the bank or nonbank financial intermediary performing
quasi-banking functions shall likewise be the basis for the calculation of gross receipts.

Nothing in this Code shall preclude the Commissioner from imposing the same tax herein
provided on persons performing similar banking activities.

Definitions:

Banks – shall refer to those entities as defined under Sec 3 of RA 8791, otherwise known as
General banking Law 2000 or more specifically, to entities engaged in lending of funds obtained
in the form of deposits. (Sec 3.1, RR8-2008)

Non-Bank Financial Intermediaries (NBFI)- Shall refer to persons or entities whose principal
function include the lending, investing or placement of funds or evidence of indebtedness or
equity deposited with them, acquired by them or otherwise cursed through them, either for their
own account or in account of others. (Sec 3.2, RR8-2008)

Quasi banking Functions – shall refer to NBFI s engaged in borrowing of funds from 20 or more
persons or corporate lenders at any one time, through issuance , endorsement or acceptance of
debt instruments of any kind , other than deposits, for borrowers own account or thru issuance of
certificate of assignment or similar instruments , with recourse, or repurchase agreement for
purpose of relending or purchasing receivables or other similar obligations. (Sec 3.3, RR8-2008)

SEC 121- GROSS RECEIPTS TAX; TAX ON BANKS AND NON-BANK FINANCIAL
INTERMEDIARIES PERFORMING QUASI-BANKING OPERATIONS.

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There shall be collected a tax on gross receipt derived from sources within the Philippines
by all banks and non-bank financial intermediaries in accordance with the following schedules;
Kind of Income Tax rate
Interest, commissions and discounts from lending 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 income of subsidiaries 0%

Royalties, rentals of property, real or personal, profits from exchange and 7%

all other items treated as gross income under Sec. 32 of the Tax Code,
as amended

Net trading gains within the taxable year of foreign currency, debt 7%
securities, derivatives and other similar financial instruments

GRT is a form of percentage tax, which is defined as a business tax imposed on persons
or on entities that sell or lease goods or services in the course of trade or business in the
Philippines. Pursuant to Section 121 of the National Internal Revenue Code (Tax Code), as
amended, GRT is imposed on banks and non-bank financial intermediaries (NBFIs) performing
quasi-banking functions, and on persons performing similar banking activities. Section 122 of the
Tax Code, as amended, also imposes GRT on other NBFIs or financing companies, and on
persons performing similar financing activities. On several occasions, the BIR has ruled that
although GRT is a direct tax, banks and NBFIs may shift to their clients and borrowers the GRT
due on transactions covered under Sections 121 and 122 of the Tax Code.

The GRT that is “passed on” to clients and borrowers should form part of the tax base of
the banks and NBFIs performing quasi-banking functions. The concept of GRT is based on the
definition of “gross receipts,” that is, based on “actual or constructive receipt of income.”
Accordingly, as these entities are directly liable for GRT on gross receipts derived by them from
business operations, the “passed-on” GRT is considered as receipt of gross income, as specified
under Section 32(A) of the Tax Code, as amended. Consequently, these shall form part of the tax
base subject to 7% GRT under Section 121(c) of the Tax Code, as amended. In case the
recipients of the “passed-on” GRT are NBFIs not performing quasi-banking functions, the
“passed-on” GRT shall form part of the tax base subject to 5% GRT under Section 122.
Illustrations:

All banks and non-bank financial intermediaries:

Income Dividends Other income Interest Not over Interest over 5
5 yrs yrs
Gross receipts 60,000 100,000 100,000 100,000
Tax rate 0% 7% 5% 1%

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Percentage Tax P 0 7,000 5,000 1,000

SEC. 122. Tax on Other Non-Bank Financial Intermediaries. –

There shall be collected a tax of five percent (5%) on the gross receipts derived
by other non-bank financial intermediaries doing business in the Philippines, from interests,
commissions, discounts and all other items treated as gross income under this code.: Provided,
That interests, commissions and discounts from lending activities, as well as income from financial
leasing, shall be taxed on the basis of the remaining maturities of the instruments from which such
receipts are derived, in accordance with the following schedule:

Maturity period is five years or less 5%

Maturity period is more than five years 1%

Provided, however, That in case the maturity period is shortened thru pre-termination, then the
maturity period shall be reckoned to end as of the date of pre-termination for purposes of
classifying the transaction and the correct rate of tax shall be applied accordingly.

Provided, finally, That the generally accepted accounting principles as may be prescribed by the
Securities and Exchange Commission for other non-bank financial intermediaries shall likewise
be the basis for the calculation of gross receipts.

Nothing in this Code shall preclude the Commissioner from imposing the same tax herein provided
on persons performing similar financing activities.

SEC 122- GROSS RECEIPTS TAX; TAX ON NON-BANK FINANCIAL INTERMEDIARIES NOT
PERFORMING QUASI-BANKING OPERATIONS.

There shall be collected a tax on gross receipt derived from sources within the Philippines
by non-bank financial intermediaries in accordance with the following schedules;
Kind of Income Tax rate
Interest, commissions and discounts from lending 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, Royalties, rentals of property, real or personal, profits from 5%

exchange and all other items treated as gross income under Sec. 32 of
the Tax Code, as amended

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Watch:
https://www.youtube.com/watch?v=NkKtVMwkV2M
Read:
https://www.bir.gov.ph/index.php/tax-code.html#title5
Codal Reference:
RA 8424 National Internal Revenue Code (NIRC); Sec 116 to 122

Activities/Assessments:

Multiple Choice ( 1 point each)

1. Which of the following is subject to 3% OPT under Sec 116 (seller of goods and services) of
the tax code?

a. seller of goods with gross sales of P 100,000 per year.

b. seller of goods and services with gross sales of P 3.1M
c. A jeepney operator with gross receipts of P 2.1M only
d. a fruit dealer whose gross receipts amounted to P 2M only
e. None of the above

2. A domestic carrier by land is engaged in transport of goods. It is not VAT registered and annual
gross receipts does not exceed P 3M. Thus, it is subject to:

a. 12% VAT
b. 3% OPT under sec 116
c. 3% common carriers tax under sec 117
d. not subject to business tax

3. A domestic carrier by sea is engaged in transport of goods, passengers and cargoes. It is not
VAT registered and annual gross receipts exceeds P 3M. Thus, it is subject to:

a. 12% VAT
b. 3% OPT under sec 116
c. 3% common carriers tax under sec 117
d. not subject to business tax

4. A domestic carrier by land is engaged in transport of passengers . It is not VAT registered and
annual gross receipts exceeds P 3M. Thus, it is subject to:

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a. 12% VAT
b. 3% OPT under sec 116
c. 3% common carriers tax under sec 117
d. not subject to business tax

5. It is a pool of land transportation vehicles whose accessibility to the riding pubic is facilitated
through the use of common point of contact which may be in the form of text, telephone and
cellular, email or mobile applications or by other means.

a. Domestic common carrier

b. International common carrier
c. Grab taxi and UBER taxi
d. Transportation Network vehicle services (TNVS)

6. Which of the following is not replaced by VAT?

a. Sales tax on original sales
b. Contractors tax
c. Common carriers tax
d. Compensating tax

7. Which of the following establishments are / is subject to OPT?

I. PAL II OSANG Night Club III. Far Eastern University (FEU) IV. ABC Cooperatives V.
Metrobank

a. I, II and IV
b. I, II, III and V
c. II, III, V
d. II and V

8. All of the following, except one, are not subject to common carriers tax?
a. owner of parking lot
b. rent a car companies
c. common carriers by land engaged in carriage of cargo
d. domestic airlines

9. Which of the following is not subject to OPT?

a. BDO
b. Operator of cockpits
c. MERALCO

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d. Operator or owner of race tracks

10. Exempt from overseas communication tax are as follows, except:

a. Public service and for general welfare

b. International organizations
c. News agencies
d. Government

Answer Sheet

1 6
2 7
3 8
4 9
5 10

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COLLEGE OF ACCOUNTANCY & FINANCE Taxation 2: LML / VGL / GSJ

MODULE 3: OTHER PERCENTAGE TAXES

Lesson 3: Other Percentage Taxes on Non-VAT registered Taxpayers

Under NIRC Sections 123, 124, 125, 126 and 127

Overview:

Percentage Tax – is a business tax imposed on persons or entities who sell or

lease goods, properties or services during trade or business whose gross annual sales or receipts
do not exceed the amount required to register as VAT-registered taxpayers. Percentage taxes
are usually based on a fixed rate

Businesses with gross annual sales and receipts that do not exceed P 3,000,000
(P1,919,500 in the Old Tax Code), and are not VAT-registered, percentage tax is imposed for
sold or leased goods, properties or services. The percentage tax rate varies depending on the
nature of business. The usual rate is 3% of gross sales or receipts but it could go as high as 30%,
for gross receipts of Jai-Alai and racetrack operators for instance.

On this module, we will discuss the percentage tax rates provided by Tax Code
under section 123 to Section 127 which includes the following businesses: Life Insurance
companies, Agents of foreign Insurance Companies; Amusement places such as boxing and
professional basketball, winners of horse races and seller of stocks.

Module Objectives:

After successful Completion of this module, you should be able to:

7. To know the Administrative Provisions and the Practical Provisions on Percentage
taxes (From Section 123 to Section 127 of Tax Code).
8. To be able to identify what business activities are subjected to percentage taxes under
Section 123, 124, 125, 126 and 127.
9. Who are liable to pay the percentage taxes under Section 123, 124, 125, 126 and 127.
10. When and Where to file and pay percentage taxes provide under Section 123, 124,
125, 126 and 127.
11. To know the tax basis and tax rates in computing the percentage tax (net or gross)
under Section 123, 124, 125, 126 and 127.

Course Materials:

Quarterly Percentage Tax Rates Table from Section 123 to 127:

Coverage Taxable Base Tax Rate

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Life Insurance Company/Agent/Corporation (except Total premiums 2%
purely cooperative companies or associations) collected
Agents of foreign insurance companies (except reinsurance premium):
Insurance agents authorized under the Insurance Code Total premiums 4%
to procure policies of insurance for companies not collected
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 10%
'dividends'
Winnings from 4%
Double forecast
/quinella and
trifecta bets
Prizes of owners of 10%
winning race
horses
Sale, barter, exchange or other disposition of shares of Gross selling price or 6/10 of 1%
stock listed and traded through the Local Stock gross value in money
Exchange other than the sale by a dealer of securities
Sale, barter or exchange or other disposition through: Gross selling price or gross value
• Initial Public Offering (IPO) – the issuing in money
corporation shall pay the imposed tax
Proportion of disposed shares to
• Secondary Public Offering – the seller shall pay
total outstanding shares after the
the imposed tax
listing in the local stock exchange:
• Up to 25% 4%

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• Over 25% 2%
but not over
33 1/3%
• Over 33 1%
1/3%

SEC. 123. Tax on Life Insurance Premiums. –

There shall be collected from every person, company or corporation (except purely
cooperative companies or associations) doing life insurance business of any sort in the
Philippines a tax of two percent (2%) of the total premium collected, whether such premiums are
paid in money, notes, credits or any substitute for money;

'Cooperative companies or associations' are such as are conducted by the members

thereof with the money collected from among themselves and solely for their own protection and
not for profit.

A life insurance premium - is a payment made to the life insurance company, to pay for a life
insurance policy including health, accident and any insurance premiums appertaining thereto or
connected therewith.

Exempt Life Insurance Premiums:

1. Premiums refunded within six (6) months after payment on account of

rejection of risk or returned for other reason to a person insured shall not
be included in the taxable receipts.
2. Reinsurance premiums; no tax be paid upon reinsurance by a company
that has already paid the tax.
3. Not included in taxable receipts; upon doing business outside the
Philippines on account of any life insurance of the insured who is a
nonresident, if any tax on such premium is imposed by the foreign country
where the branch is established nor upon premiums collected or received
on account of any reinsurance , if the insured, in case of personal
insurance, resides outside the Philippines, if any tax on such premiums is
imposed by the foreign country where the original insurance has been
issued or perfected;
4. Not included in taxable receipts; upon that portion of the premiums
collected or received by the insurance companies on variable contracts (as
defined in Section 232(2) of Presidential Decree No. 612), in excess of the
amounts necessary to insure the lives of the variable contract workers.

Under the Insurance Code of the Philippines,

• Insurance are deemed non-life insurance only if written by Non-Life Insurance company
• Insurance are deemed life insurance only if written by Life Insurance company
• If data is silent, then consider them as life insurance

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SECTION 123: PERCENTAGE TAX ON LIFE INSURANCE PREMIUMS
Tax base Gross receipts on Sale of Services – Life Insurance Premiums
Tax Source Within the Philippines
Tax rate 2%
Tax Formula Gross receipts on Life Insurance Premiums X 2%

Formulas / Computations:
Total Receipts on Life Insurance Premiums 120,000
Less; Exempt from Life insurance premiums 20,000
Gross receipts 100,000
Tax rate 2%
Percentage Tax due 2,000

SEC. 124. Tax on Agents of Foreign Insurance Companies. –

Every fire, marine or miscellaneous insurance agent authorized under the Insurance Code
to procure policies of insurance as he may have previously been legally authorized to transact on
risks located in the Philippines for companies not authorized to transact business in the
Philippines shall pay a tax equal to twice the tax imposed in Section 123:

Provided, That the provision of this Section shall not apply to reinsurance: Provided,
however, That the provisions of this Section shall not affect the right of an owner of property to
apply for and obtain for himself policies in foreign companies in cases where said owner does not
make use of the services of any agent, company or corporation residing or doing business in the
Philippines. In all cases where owners of property obtain insurance directly with foreign
companies, it shall be the duty of said owners to report to the Insurance Commissioner and to the
Commissioner each case where insurance has been so effected, and shall pay the tax of five
percent (5%) on premiums paid, in the manner required by Section 123.

Non-Life Insurance premiums are insurance premiums on insurance of property or rights or any
insurance appertaining thereto or connected therewith.

SEC. 125. Amusement Taxes. –

There shall be collected from the proprietor, lessee or operator of cockpits, cabarets, night or day
clubs, boxing exhibitions, professional basketball games, Jai-Alai and racetracks, a tax equivalent
to:

(a) Eighteen percent (18%) in the case of cockpits;

(b) Eighteen percent (18%) in the case of cabarets, night or day clubs;

(c) Ten percent (10%) in the case of boxing exhibitions: Provided, however, That boxing
exhibitions wherein World or Oriental Championships in any division is at stake shall be exempt

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from amusement tax: Provided, further, That at least one of the contenders for World or Oriental
Championship is a citizen[s] of the Philippines and said exhibitions are promoted by a citizen/s of
the Philippines or by a corporation or association at least sixty percent (60%) of the capital of
which is owned by such citizens;

(d) Fifteen percent (15%) in the case of professional basketball games as envisioned in
Presidential Decree No. 871: Provided, however, That the tax herein shall be in lieu of all other
percentage taxes of whatever nature and description; and

(e) Thirty percent (30%) in the case of Jai-Alai and racetracks - of their gross receipts,
irrespective, of whether or not any amount is charged for admission.

For the purpose of the amusement tax, the term 'gross receipts' embraces all the receipts
of the proprietor, lessee or operator of the amusement place. Said gross receipts also include
income from television, radio and motion picture rights, if any. A person or entity or association
conducting any activity subject to the tax herein imposed shall be similarly liable for said tax with
respect to such portion of the receipts derived by him or it.

The taxes imposed herein shall be payable at the end of each quarter and it shall be the
duty of the proprietor, lessee or operator concerned, as well as any party liable, within twenty (20)
days after the end of each quarter, to make a true and complete return of the amount of the gross
receipts derived during the preceding quarter and pay the tax due thereon.

SECTION 125: PERCENTAGE TAX ON AMUSEMENT PLACES

Tax base Gross receipts on Sale of Services – income
Tax Source Within the Philippines
Tax rate 0%, 10%, 15%, 18%, 30%
Tax Formula Gross receipts on Income X 2%

Formulas / Computations: Professional Professional Cabarets,

Boxing Basketball Cockpits
Total Receipts on 100,000 100,000 1,000,000
Tax rate 10% 15% 18%
Percentage Tax due 10,000 15,000 180,000

SEC. 126. Tax on Winnings. -

Every person who wins in horse races shall pay a tax equivalent to ten percent (10%) of his
winnings or 'dividends', the tax to be based on the actual amount paid to him for every winning
ticket after deducting the cost of the ticket: Provided, That in the case of winnings from double,
forecast/quinella and trifecta bets, the tax shall be four percent (4%). In the case of owners of
winning race horses, the tax shall be ten percent (10%) of the prizes.

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The tax herein prescribed shall be deducted from the 'dividends' corresponding to each
winning ticket or the 'prize' of each winning race horse owner and withheld by the operator,
manager or person in charge of the horse races before paying the dividends or prizes to the
persons entitled thereto.

The operator, manager or person in charge of horse races shall, within twenty (20) days
from the date the tax was deducted and withheld in accordance with the second paragraph hereof,
file a true and correct return with the Commissioner in the manner or form to be prescribed by the
Secretary of Finance, and pay within the same period the total amount of tax so deducted and
withheld.
SECTION 125: PERCENTAGE TAX ON WINNINGS
Owners of Winning Horses Bettors, on winning bets
Tax base Gross winnings / prizes before Gross winnings / prizes after cost
percentage tax of ticket, before tax
Tax Within the Philippines Within the Philippines
Source
Tax rate 0%, 10%, 15%, 18%, 30% • 4% tax rate for winnings
from double,
forecast/quinella and
trifecta bets,
• 10% tax rate for other
winnings bets such as win
bets, place bets

Formulas / Computations: Owners of Winning Winning

Winning Horse Bettors - bettors-Place
Double bets
Gross Winnings 100,000 100,000 100,000
Less Cost of Ticket 0 10,000 10,000
Net winnings 100,000 90,000 90,000
Tax rate 10% 4% 10%
Percentage Tax due 10,000 3,600 9,000

SEC. 127. Tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded through
the Local Stock Exchange or through Initial Public Offering. -

(A) Tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded through
the Local Stock Exchange.- There shall be levied, assessed and collected on every sale, barter,
exchange, or other disposition of shares of stock listed and traded through the local stock
exchange other than the sale by a dealer in securities, a tax at the rate of one-half of one percent
(1/2 of 1%) of the gross selling price or gross value in money of the shares of stock sold, bartered,
exchanged or otherwise disposed which shall be paid by the seller or transferor (Old Tax Code)

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Under the New tax Code (after TRAIN law), the rate is 6/10 of 1% of the of the gross selling
price or gross value in money of the shares of stock sold, bartered, exchanged or otherwise
disposed which shall be paid by the seller or transferor.

Under the TRAIN law, Section 127 provides the following:

Sec. 127. Tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded through
the Local Stock Exchange or through Initial Public Offering -

"(A) Tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded through the
Local Stock Exchange.— There shall be levied, assessed and collected on every sale, barter,
exchange or other disposition of shares of stock listed and traded through the local stock
exchange other than the sale by a dealer in securities, a tax at the rate of six-tenths of one percent
(6⁄10 of 1%) of the gross selling price or gross value in money of the shares of stock sold, bartered,
exchanged or otherwise disposed which shall be paid by the seller or transferor.

(B) Tax on Shares of Stock Sold or Exchanged Through Initial Public Offering. -
There shall be levied, assessed and collected on every sale, barter, exchange or other disposition
through initial public offering of shares of stock in closely held corporations, as defined herein, a
tax at the rates provided hereunder based on the gross selling price or gross value in money of
the shares of stock sold, bartered, exchanged or otherwise disposed in accordance with the
proportion of shares of stock sold, bartered, exchanged or otherwise disposed to the total
outstanding shares of stock after the listing in the local stock exchange:
Up to twenty-five percent (25%)
4%
Over twenty-five percent (25%) but not over thirty-three and one third
2%
percent (33 1/3%)
1%
Over thirty-three and one third percent (33 1/3%)

The tax herein imposed shall be paid by the issuing corporation in primary offering or by
the seller in secondary offering.

For purposes of this Section, the term 'closely held corporation' means any corporation
at least fifty percent (50%) in value of outstanding capital stock or at least fifty percent (50%) of
the total combined voting power of all classes of stock entitled to vote is owned directly or indirectly
by or for not more than twenty (20) individuals.

For purposes of determining whether the corporation is a closely held corporation, insofar
as such determination is based on stock ownership, the following rules shall be applied:

(1) Stock Not Owned by Individuals. - Stock owned directly or indirectly by or for a
corporation, partnership, estate or trust shall be considered as being owned proportionately by its
shareholders, partners or beneficiaries.

(2) Family and Partnership Ownerships. - An individual shall be considered as owning

the stock owned, directly or indirectly, by or for his family, or by or for his partner. For purposes

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of the paragraph, the 'family of an individual' includes only his brothers and sisters (whether by
whole or half-blood), spouse, ancestors and lineal descendants.

(3) Option. - If any person has an option acquire stock, such stock shall be considered as
owned by such person. For purposes of this paragraph, an option to acquire such an option and
each one of a series of options shall be considered as an option to acquire such stock.

(4) Constructive Ownership as Actual Ownership. - Stock constructively owned by

reason of the application of paragraph (1) or (3) hereof shall, for purposes of applying paragraph
(1) or (2), be treated as actually owned by such person; but stock constructively owned by the
individual by reason of the application of paragraph (2) hereof shall not be treated as owned by
him for purposes of again applying such paragraph in order to make another the constructive
owner of such stock.

(C) Return on Capital Gains Realized from Sale of Shares of Stocks. -

(1) Return on Capital Gains Realized from Sale of Shares of Stock Listed and Traded
in the Local Stock Exchange. - It shall be the duty of every stock broker who effected the sale
subject to the tax imposed herein to collect the tax and remit the same to the Bureau of Internal
Revenue within five (5) banking days from the date of collection thereof and to submit on Mondays
of each week to the secretary of the stock exchange, of which he is a member, a true and complete
return which shall contain a declaration of all the transactions effected through him during the
preceding week and of taxes collected by him and turned over to the Bureau Of Internal Revenue.

(2) Return on Public Offerings of Shares of Stock. - In case of primary offering, the
corporate issuer shall file the return and pay the corresponding tax within thirty (30) days from the
date of listing of the shares of stock in the local stock exchange. In the case of secondary offering,
the provision of Subsection (C) (1) of this Section shall apply as to the time and manner of the
payment of the tax.

(D) Common Provisions. - any gain derived from the sale, barter, exchange or other
disposition of shares of stock under this Section shall be exempt from the tax imposed in Sections
24(C), 27(D)(2), 28(A)(8)(c), and 28(B)(5)(c) of this Code and from the regular individual or
corporate income tax. Tax paid under this Section shall not be deductible for income tax purposes.
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

Persons required to file:

1. Every stockbroker 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

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3. A stock broker who effected a sale, exchange or other disposition through secondary
public offering of shares of stock in closely-held corporations

Filing and Payment:

Documentary Requirements
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
4. Duly approved Tax Debit Memo, 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 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).

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.

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Watch:
https://www.youtube.com/watch?v=61WtqMzJinU

Read:
https://www.bir.gov.ph/index.php/tax-information/percentage-tax.html
Codal Reference:

RA 8424, as amended (sections 123 to 127)

RA 10963 TRAIN (Tax Reform for Acceleration and Inclusion ) Law

Activities/Assessments:

True or False (1 point each)

1. I. A seller of agricultural food products is vat exempt. If that seller's annual gross sales in 2018
amounted to P 3M, thus, that seller is subject to 3% business tax.
II. A taxpayer who is subject to OPT, will also subject to income tax on his net income.

2. I. The 3% common carriers tax is based on the actual quarterly gross receipts or minimum
quarterly receipt whichever is lower.
II. Percentage tax is a business tax on sale of services.

3. I. A VAT registered transportation contractor is engaged in transport of passengers, thus he is

liable to 12% VAT on gross receipts from transport of goods and 3% common carriers tax on
gross receipts from transport of passengers.
II. 8% optional tax based on net income is in lieu of income tax and OPT (OPT under sec 116)

4. I. Operators of transport facilities are subject to VAT on gross sales from transporting cargoes
or goods.
II. Operators of transport facilities are subject to VAT on gross receipts from renting out its
transport facilities.

5. I. Partners or owners of TNVS without valid Certificate of Public Convenience is subject to

12% VAT.
II. Domestic airlines such as Cebu Pacific is subject to 3% common carriers tax under sec 117.

6. I. All vat exempt taxpayers shall be subject to OPT

II. Generally, OPT can be imposed together with VAT.

7.I. OPT is a transfer tax because OPT may be transfer to buyer or consumer same as VAT,
since both are considered indirect taxes and both a national tax.
II. OPT is an ad valorem, not progressive and a business tax.

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8. I. Banks are subject to VAT for their interest income earned from lending activities. Examples
are BDO and Metro bank.
II. Principle of reciprocity is applicable to Sec 118 (Tax on International common carrier)

9. I. Radio broadcasting companies whose Gross receipts in previous year did not exceeds the
threshold (P 10M)shall have the option to register as VAT, but it's not irrevocable.
II. Airlines are subject to VAT
10. I. Rent a car is not subject to common carriers tax.
II. Aggregate rule is applied when a person has more than one business for purpose of threshold
excluding VAT exempt business.

11.I. Cargo trucks are subject to OPT.

II. Pedicabs in PUP are not subject to OPT because they are considered Margin of Income
Earners or MIE.
12. I. Overseas communication tax is imposed on owner of communication facilities.
II. Domestic calls are subject to OPT.
13. I. Banks, credit corporations, money changers, pawnshops and registered credit cooperatives
are subject to Gross receipt tax.
II. The gross receipt tax for rent income of banks is 7% of gross rental receipts (gross of
withholding tax of 5%)
14. I. The threshold before 2018 is P 1,919,500. IN 2018, the threshold was increased by P
3,000,000.
II. Pawnshops are subject to 5% GRT on gross receipts from interest income.
15. I. Cabarets and Clubs are subject to 18% amusement tax based on gross receipts in the
Philippines.
II. Comedy bar are subject to 12% VAT

Answer Sheet
1 11
2 12
3 13
4 14
5 15
6
7
8
9
10

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MODULE 3: OTHER PERCENTAGE TAXES

Lesson 4: Percentage Tax Credits

Overview:

Percentage Tax is a business tax imposed on persons or entities who sell or lease
goods, properties or services during trade or business whose gross annual sales or receipts do
not exceed P 3,000,000 (P1,919,500 under the Old Tax Code), and are not VAT-registered.
Percentage tax is computed based on a fixed rate depending on the nature of business of a
person ranging from 0% to 30% as discussed from Sections 116 to 127 of the Tax Code of
Philippines. By multiplying the tax base to tax rate, we can derive the percentage tax due of a
person. Same with other taxes, there is a percentage tax credit that can be deducted directly from
the Percentage Tax Due to arrive at Percentage tax Still Due.

On this module, we will discuss the percentage tax credit available to taxable
person. Percentage tax still due or payable is computed by deducting the percentage tax credit
from the computed percentage tax due. Percentage tax credit varies depending on the nature of
business transactions of a person and the corresponding Withholding Percentage tax rates. The
withholding percentage tax rates ranges from 0% to 30%.

Module Objectives:

After successful Completion of this module, you should be able to:

12. To learn the revenue regulations on withholding percentage tax rates.
13. To be able to identify the business activities / transactions subject to withholding tax
and the corresponding rates.
14. To compute the percentage tax due and still due / payable.

Course Materials:

Percentage Tax credit refers to the amounts of percentage tax imposed by the authority of the
government of the Philippines that are allowed by law to directly reduce / deduct from the
percentage tax due computed under Sections 116 to 127 to arrive at percentage tax payable.

BIR Revenue Regulation No 298: Withholding Percentage Tax rates:

Bureaus, offices, and instrumentalities of the government, including government owned controlled
corporations as well as their subsidiaries, provinces, cities and municipalities making payment to
a private individuals, corporations, partnership and or associations are required to deduct and
withhold the following percentage tax rate due from the payees on account of such payments:

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NIRC NON VAT registered person / Business / Merchant Withholding

Percentage tax rates
Sec 116 VAT exempt person in Sec 109 (V)
Seller of goods 3%
Seller of services 3%
Sec 117 Domestic Common carriers 3%
Sec 118 International Common carrier 3%
Sec 119 Franchise Grantees
Water and Gas 2%
Radio, television Stations 3%
Sec 120 Overseas communication originating from Phil 10%
Sec 121 Bank and Non banks Financial Intermediaries 0%, 1%5% and 7%
Sec 122 Other Non banks Financial Intermediaries 1%, 5%
Sec 123 Life Insurance Company 5%
Sec 124 Agents of Foreign Insurance Companies
Indirect insurance through agents 10%,
Direct insurance through agents 5%
Sec 125 Amusement Places
Boxing 10%
Professional Basketball 15%
Clubs , cabarets 18%
Jai Alai 30%
Sec 126 Winner in horse races
Owners of Horse 10%
Bettors 4%, 10%
Sec 127 Seller or transferor of stocks
Through Local Stock Exchange 6/10 of 1%
Through IPO 1%,2%,4%
Through secondary Public Offerings 6/10 of 1%

Components of Percentage Tax credits

Percentage taxes
1. Percentage Tax paid in the original Percentage Paid within the
Tax return (in case of amended return) Philippines, include in
percentage Tax Credit
2. Percentage Tax withheld by customer- Paid within the
withholding tax agents Philippines, include in
percentage Tax Credit

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FORMULA:
Gross receipts 100,000
Tax rate 3%
Percentage tax due 3,000
Less:
Percentage tax paid inn original returns 1,000
Percentage tax withheld 500
Percentage tax Still due / Payable 1,500

Watch:
https://www.youtube.com/watch?v=61WtqMzJinU

Read:
https://www.bir.gov.ph/index.php/tax-information/percentage-tax.html
Codal Reference:

RA 8424, as amended (sections 123 to 127)

RA 10963 TRAIN (Tax Reform for Acceleration and Inclusion ) Law

Activities/Assessments:

True or False (1 point each)

1. All VAT exempt taxpayers shall be subject to OPT.

2. OPT may be imposed together with excise tax
3. Percentage tax is a transfer tax
4. An isolated transactions not in the course of business will not result to a liability for a percentage
tax.
5. Common carriers refers to person, corporations, firms or associations engaged in business of
carrying of transporting passengers or goods or both by land, water and air for compensation,
offering their services to the public and shall include transportation contractors.
6. Keepers of garage is a person whose business is to keep automobiles for hire or keep them
stored for use or for order.
7. Owners of common carriers by air relative to transport of cargoes is subject to 3% OPT.
8. Owner of parking lot for domestic carriers is subject to VAT

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9. Partners or owners of Grab taxi and Uber taxi with valid Certificate of Public Convenience is
subject to 3% OPT common carriers under 117.
10. Aggregate rule is applied when person has more than one business for purpose of
determining threshold excluding VAT exempt business under sec 109.
11. Airlines are subject to VAT.
12. Rent a Car is not subject to common carriers tax.
13. Pedicab operators is not subject to both OPT and VAT because the law considered them as
minimum wage earners.
14. Gross revenues earned by franchise grantees of water and gas is subject to 2% OPT.
15. Taxpayers registered under sec 116 is liable to OPT of 3% of gross receipts regardless when
it is earned and recognized in IS.

Problem Solving (2 points)

1. A is a non-VAT registered tax payer with a grocery store. The following data are available for
2018:

Sales of non food items is P 300,000

Sales of processed food items is P 400,000
Purchases from VAT registered person is P 250,000
Salaries of employees is P 150,000

What is the percentage tax due (net of applicable taxes)?

2. A, keepers of garage, whose gross receipts in year 2017 totaled P 3,050,000. In year 2018, the
total receipts of A amounted to P 4,000,000 with disbursements of operating expenses of P
2,000,000. What is the common carriers tax due from A?

3. A domestic carrier by land is engaged in transport of passengers. It's annual gross receipts
exceeds P 3M. Gross revenues is P 3,500,000; cost of services is P 2,000,000; cost of gas and
salaries is P 500,000; Receivable, end is P 200,000. What is the OPT under sec 117?

4. SAN JOSE Airlines, a domestic carrier had the following gross receipts for the month of July
2018: carriage of passenger is P 5,000,000; carriage of cargo is P 6,000,000 and carriage of other
goods is P 2,000,000. What is the amount of OPT due from SAN JOSE?

5. SAN JOSE, an operator of 10 buses with provincial operations from Manila- San Mateo. It has
also 5 cargo trucks. For 2018, the gross receipts from bus operations is P 1,300,000 and gross
receipts from cargo truck is P 1,200,000. SAN JOSE is a non-VAT registered tax payer. How
much is the total business taxes due?

6. ABC, VAT registered person has the following gross receipts for year 2018:

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• Red Bus has total receipts of P 200,000 (includes receipts from carriage of goods of P
10,00)
• Blue Bus has total receipts of P 300,000 (excludes receipts from carriage of goods of P
10,00)
• Taxi- receipts of P 40,000
• Jeepney has total receipts of P 70,000.
• Cargo trucks has total receipts of P 100,000
• Sea vessel has total receipts of P 300,000

What is the total business taxes due from ABC?

7. SAN JOSE, operator of transportation vehicles, has the following data for the 1st quarter 2018:

Jeep 1 (Manila) with gross receipts of P 4,000

Jeep 2 (Manila) with gross revenue of P 2,200 ( P 200 is still collectible from passenger X)
Payment for meals and allowance of employees totaled P 2,200
Jeep 3 (Provincial) with gross receipts of P 2,000
Taxi in manila with gross receipts of P 2,000
Gross receipts of SANJOSE's taxi driver as their salaries, totaled P 1,000
Payment of P 2,000 for gas consumption (VAT-registered supplier)

What is the percentage tax due from San Jose?

8. SAN JOSE Company, non vat registered subject to 3% OPT under sec 116, had the following
data in the first quarter of 2018:
Accounts receivable, beginning 12,500.00
Accounts receivable, ending 8,000.00
Trade payable-purchases, beg 4,000.00
Trade payable-purchases, end 6,500.00
Cash Purchases at list price 40,000.00
(Trade discounts given: 10%;20%)
Purchase discount not taken from Cash Purchases 1,000.00
Payments to Trade Suppliers 36,300.00
Beginning Inventory 9,500.00
Inventory decreased by-------------- 2,800.00
Operating expenses paid 18,700.00
Gross Profit rate is 30% based on cost
What is the percentage tax due?

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9. Based on number 8, ASSUMING that SAN JOSE is a service provider, what will be the
percentage tax due?

10. ABC Company is an operator of service equipments for overseas communications / calls.
During the 3rd quarter of the year 2018, SAN JOSE, an international news services agency, made
calls originating from Philippines to CANADA and paid to ABC the total gross payment for sale of
services amounting to P 110,000, inclusive of all charges and taxes, if any. How much will be paid
by ABC as percentage tax due for the 3rd quarter?

______________________THANK YOU!!_______________________

ANSWER SHEET

1. 6. 11.
2. 7. 12.
3. 8. 13.
4. 9. 14.
5. 10. 15.

1. 6.
2. 7.
3. 8.
4. 9.
5. 10.

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