Tax 102
Internal Revenue Taxes
Excise tax- is a tax on the production, sale or consumption of a commodity
in a country. It applies to goods manufactured or produced in the
Philippines for domestic sale or consumption for a ay other disposition and
to imported goods.
Types of excise tax:
*Specific Tax- refers to the excise tax imposed which is based on weight or
volume capacity or any other physical unit of measurement.
* Ad Valorem Tax- refers To the excise tax which is based on selling price
or other specified value of the goods/articles.
Excitable articles
- Alcohol products
- Tobacco products
- Petroleum products
- Mineral Products
- Non-essential goods, services
- Sweetened Beverages
- invasive cosmetic procedures
Time of payment
*Domestic products- before removal fro the place of production.
*Imported Good- before release from the Customs custody.
TAX ON TRANSFER IN THE CONDUCT OF BUSINESS
Value-Added Tax- is a business tax imposed and collected from the
seller in the course of business on every sale of properties(real or personal)
lease of goods or properties( real or personal) or vendors of services.
It is an indirect tax, thus it can be passed on to the buyer.
12% on Sales
Gross Sales Threshold Amount, 3,000,000/year Importation
2250Q - required to be filed with in 25 DAYS FOLLOWING THE CLOSE
OF EACH TAXABLE QUARTER prescribed for each taxpayer.
Percentage Tax- is a business tax imposed on person or entities who sell or
lease goods, properties or services in the course of trade or business
whose gross annual sales or receipt DO NOT EXCEEDS 550,000 AND
NON VAT-REGISTER.
Person who engaged in the following industries/transactions.
1. Common carriers
2. International air/shipping carriers.
3.Franchise grantees of — Radios/TV broadcast, gas and water
utilities.
4.overseas dispatch
5.Banks, non-bank financial intermediaries
6. Life insurance business in the PH.
7. Non-life insurance companies.
8.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
2251Q- Required to be filed Within twenty-five (25) days after the end of
each taxable quarter
Income Tax -is a tax on a person's income, emoluments, profits arising from
property, practice of profession, conduct of trade or business or on the
pertinent items of gross income specified in the Tax Code
*BIR Form 1700 - Annual Income Tax For Individuals Earning Purely
Compensation Income (Including Non- Business/Non-Profession Related
Income)
Deadline, On or before the 15th day of April of each year
*BIR Form 1701Q - Quarterly Income Tax Return For Individuals, Estates
and Trusts Deadlines
•May 15 of the current taxable year– for the first quarter
•August 15 of the current taxable year – for the second quarter
•November 15 of the current taxable year – for the third quarter
*BIR Form 1701 - Annual Income Tax Return for self employed Individuals,
Estates and Trusts Deadline, On or before the 15th day of April of each
year
*BIR Form No. 1702Q Quarterly Income Tax Return for Corporations,
Partnerships and Other Non-Individual
-Filing Date
The corporate quarterly income tax return shall be filed with or without
payment within sixty (60) days following the close of each of the first three
(3) quarters of the taxable year whether calendar or fiscal year.
*BIR Form 1702 - Annual Income Tax Return (For Corporations and
Partnerships)
-Deadline, On or before the 15th day of the fourth month following the close
of the taxpayer’s taxable year
Capital Gains Tax - is a tax imposed on the gains presumed to have been
realized by the seller from the sale, exchange, or other disposition of capital
assets located in the Philippines, including pacto de retro sales and other
forms of conditional sale.
*BIR Form 1706 – Final Capital Gains Tax Return (For Onerous Transfer of
Real Property Classified as Capital Assets -Taxable and Exempt)
-DEADLINE, shall be filed and paid within thirty (30) days following the
sale, exchange or disposition of real property, with any Authorized Agent
Bank (AAB) or Revenue Collection Officer (RCO) of the Revenue District
Office (RDO) having jurisdiction over the place where the property being
transferred is located.
*BIR Form 1707 - Capital Gains Tax Return (For Onerous Transfer of
Shares of Stocks Not Traded Through the Local Stock Exchange)
-DEADLINE, shall be filed and paid within thirty (30) days after each sale,
barter, exchange or other disposition of shares
of stock not traded through the local stock exchange with any Authorized
Agent Bank (AAB) under the jurisdiction of the Revenue District Office
(RDO) where the seller/transferor is required to register.
Donor’s Tax - is a tax on a donation or gift, and is imposed on the
gratuitous transfer of property between two or more persons who are living
at the time of the transfer. It shall apply whether the transfer is in trust or
otherwise, whether the gift is direct or indirect and whether the property is
real or personal, tangible or intangible.
*BIR Form 1800 – Donor’s Tax Return
-shall be filed within thirty (30) days after the date the gift (donation) is
made.
Estate Tax- is a tax on the right of the deceased person to transmit his/her
estate to his/her lawful heirs and beneficiaries at the time of death and on
certain transfers, which are made by law as equivalent to testamentary
disposition. It is not a tax on property. It is a tax imposed on the privilege of
transmitting property upon the death of the owner. The Estate Tax is based
on the laws in force at the time of death notwithstanding the postponement
of the actual possession or enjoyment of the estate by the beneficiary.
*BIR Form 1801 - Estate Tax Return
-shall be filed within one (1) year from the decedent's death. In meritorious
cases, the Commissioner shall have the authority to grant a reasonable
extension not exceeding thirty (30) days for filing the return.
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.
*BIR Form 2000 (Documentary Stamp Tax Declaration Return)
-shall be filed within five (5) days after the close of the month when the
taxable document was made, signed, issued, accepted or transferred or
upon remittance by revenue collection agents of collection from the sale of
loose documentary stamps.
WITHHOLDING TAXES
Final Withholding Tax - is a kind of withholding tax which is prescribed on
certain income payments and is not creditable against the income tax due
of the payee on other income subject to regular rates of tax for the taxable
year. Income Tax withheld constitutes the full and final payment of the
Income Tax due from the payee on the particular income subjected to final
withholding tax.
*0619 F Monthly Remittance Form for Final Income Taxes Withheld
Description
-This monthly remittance form shall be filed in triplicate by every
withholding agent/payor required to deduct and withhold taxes on income
payments subject to Final Withholding Taxes.
Filing Date
-shall be filed and the tax remitted on or before the 10th day following the
month in which withholding was made.
*1601 FQ Quarterly Remittance Return of Final Income Taxes Withheld,
-shall be filed and the tax paid/remitted not later than the last day of the
month following the close of the quarter during which withholding was
made.
*1604 F Annual Information Return of Income Payments Subjected to Final
Withholding Taxes
-Shall be filed n or before January 31 of the year following the calendar
year in which the income payments subject to final withholding taxes were
paid or accrued.
Creditable Withholding Tax - on Compensation Income is based on
graduated withholding tax rates ranging from 0% to 35% and will be based
on net taxable compensation of a particular employee. The BIR has
developed and issued a Withholding Tax table which is available on the BIR
website.
*BIR Form No. 1601-C Monthly Remittance Return of Income Taxes
Withheld on Compensation
-On or before the tenth (10th) day of the following month in which
withholding was made
*BIR Form No. 1604-C Annual Information Return of Income Taxes
Withheld on Compensation ,
-shall be filed On or before January 31 of the year following the calendar
year in which the compensation payment and other income payments were
paid or accrued.
*Certificate of Compensation Payment / Tax Withheld For Compensation
Payment With or Without Tax Withheld
-To be issued to payee on or before January 31 of the succeeding year in
which the compensation was paid, or in cases where there is termination of
employment, it is issued on the same day the last payment of wages is
made.
EXPANDED WITHHOLDING TAX
-The Withholding of Creditable Tax at Source or simply called Expanded
Withholding Tax is a tax imposed and prescribed on the items of income
payable to natural or juridical persons, residing in the Philippines, by a
payor-corporation/person which shall be credited against the income tax
liability of the taxpayer for the taxable year.
*BIR Form No. 0619-E Monthly Remittance Form for Creditable Income
Taxes Withheld (Expanded)
-shall be filed and the tax remitted on or before the 10th day following the
month in which withholding was made. This shall be filed for the first two (2)
months of each calendar quarter.
*BIR Form No. 1601-EQ
-Filing Date
This quarterly withholding tax remittance return shall be filed and the tax
paid/remitted not later than the last day of the month following the close of
the quarter during which withholding was made.
*BIR Form No. 1604-E Annual Information Return of Creditable Income
Taxes Withheld (Expanded)/ Income Payments Exempt from Withholding
-Tax Filing Date
On or before March 1 of the year following the calendar year in which the
income payments subject to expanded withholding taxes or exempt from
withholding tax were paid or accrued.
*BIR Form No. 2307 Certificate of Creditable Tax Withheld at Source
-Filing Date
For EWT - To be issued to payee on or before the 20th day of the month
following the close of the taxable quarter. Upon request of the payee,
however, the payor must furnish such statement to the payee
simultaneously with the income payment .
Donor’s Tax - is a tax on a donation or gift, and is imposed on the
gratuitous transfer of property between two or more persons who are living
at the time of the transfer. It shall apply whether the transfer is in trust or
otherwise, whether the gift is direct or indirect and whether the property is
real or personal, tangible or intangible.
*BIR Form No. 1800 Donor’s Tax Return
-The return shall be filed within thirty (30) days after the gift (donation) is
made. A separate return is filed for each gift (donation) made on different
dates during the year reflecting therein any previous net gifts made in the
same calendar year.
-Only one return shall be filed for several gifts (donations) by the donor to
the different donees on the same date.
-If the gift (donation) involves conjugal/community property, each spouse
shall file separate return corresponding to his/her respective share in the
conjugal/community property. This shall likewise apply in the case of co-
ownership over the property being donated.
ESTATE TAX Estate Tax - is a tax on the right of the deceased person to
transmit his/her estate to his/her lawful heirs and beneficiaries at the time of
death and on certain transfers, which are made by law as equivalent to
testamentary disposition. It is not a tax on property. It is a tax imposed on
the privilege of transmitting property upon the death of the owner. The
Estate Tax is based on the laws in force at the time of death
notwithstanding the postponement of the actual possession or enjoyment of
the estate by the beneficiary.
*BIR Form No. 1801 Estate Tax Return Filing Date
-The return shall be filed within one (1) year from the decedent's death.
-To be filed by the executor, or administrator, or any of the legal heirs of the
decedent, whether resident or non-resident of the Philippines.
TAXPAYERS
Citizens of the Philippines
a. Those whose fathers or mothers are Filipino citizens at the time of their
birth; and
b. Those born before January 17, 1973, of Filipino mothers, who elect
Philippine citizenship upon reaching the age of majority.
Resident citizen - is a citizen of the Philippines who has a permanent home
or place of abode in the Philippines to which he/she intends
Nonresident citizen - is a citizen of the Philippines who:
(a) establishes the fact of his/her physical presence abroad with the definite
intention to reside therein;
(b) leaves the country to reside abroad, either as an immigrant or for
employment on a permanent basis;
(c) works and derives income from abroad and whose employment thereat
requires him to be physically present abroad most of the time during the
taxable year;
Resident alien - is an individual who is not a citizen of the Philippines but
whose residence is within the Philippines.
A national of another country and who lives in the Philippines with no
definite intention as to length of stay, but who is not a mere transient or
sojourner.
Nonresident alien - is an individual who is not a citizen of the Philippines
and whose residence is not within the Philippines.
Nonresident alien engaged in trade in the Philippines (NRAETB)
A nonresident alien is deemed engaged in trade or business in the
Philippines if he/she has stayed in the Philippines for an aggregate period
of more than 180 days during any calendar year.
Nonresident alien not engaged in trade in the Philippines (NRANETB)
An alien who stays in the Philippines for an aggregate period of 180 days
or less, the individual is considered a non-resident alien not engaged in
trade or business.
The term 'taxable year' means
the calendar year, means an accounting period of twelve (12) months
ending on the last
December.
or
the fiscal year, means an accounting period of twelve (12) months ending
on the last day of any other than December.
day of month
Taxable Year of Corporation. - A corporation may employ either calendar
year or fiscal year as a basis for filing its annual income tax return
