Business/in the course of trade or business o Tobacco Products

o Cigarettes
Should be business all the time o Cigars
o Automobiles
- Regular conduct
o Manufactured fuel oils
- Pursuit of a commercial or economic activity o Mineral Products
- Including transactions incidental thereto o Non-essential products
The activity should be a commercial or
economic activity *not all people are subject it only those manufacturers
o Purpose is profit or income or importers handling the 10 things mentions above.
o Completed a business cycle Should be movable.
There should be regularity in the activity
- Value Added Tax
o Regularity
o Sale of goods or properties
Repetition
o Sale of services
Continuity
o Importation of goods or properties
More than 1 isolated
- Percentage Tax
transaction
o 3% on sale of goods, properties or
*you should pay business tax even without conducting services
business o Common Carriers Tax (intrnl or
domestic)
- Importation of good whether personal or for business o Franchise Tax
(VAT) o Overseas Communication Tax
o Tax on banks and non-bank financial
- Overseas Communication even if it is private
intermediaries performing quasi
(percentage tax: Overseas communication tax)
banking fuctions and others
- services rendered by a foreigner in the Philippines o Tax on insurance companies
Considered as in the course of business o Tax on agents of intrnl insurance
companies
*Some isolated transactions are business taxable o Amusment Tax
o Tax on winnings
- Importation of goods for personal use
o Stock transaction tax
- Single overseas communication
*those that did not exceed 1,500,000 the preceding
- winnings in a horse race or jai-alai year is exempted from VAT but subject to percentage
tax of 3% (this is optional) however, cant be change in
- Single sale of shares of stock of a domestic corporation the middle of the year.
thru a local stock exchange by one who is not a dealer
in securities is subject to a percentage tax. * those that pay excise tax either pay Vat of percentage
tax depending on their sales.
3 major business taxes in the NIRC
* if you are already subject to another tax in the
- Excise Tax percentage tax the 3% does not apply nor does VAT.
o Specific
o Ad Valorem *one may be subject to percentage tax because of
exemption in VAT a to v.
Imposed on: Manufacturers and Importers of:
- VAT registers at the BIR P500 for very separate and
o Distilled Spirits
distinct establishments including facilities where
o Wines
o Fermented Liquors
business is conducted.
- Percentage and excise tax registers at BIR P500 for
every separate and distinct establishment where
business is conducted.
- if you are not a VAT tax payer you have to register as a
non-VAT taxpayer.
Mandatory Registration those in the course of trade
or business, sells, barters or exchange of goods,
properties or exchange of services. IF.
- Gross receipts for the last 12 months exceed
1.5m
- Reasonable grounds to believe that he will sell
more than 1.5 in the next 12 months
Optional Registration
- Those that are not required but opt to.
Cancellation of registration
- If he does not plan to commence business
anymore in the next 12 months
- If he makes a a written apliction and can
demonstrate that he does not expect his gross
sales receipt to exceed 1.5m in the next
12months.
- This will take from the 1st day of the following
month.
** the receipts should indicate that he is a Vat tax
payer
Exemptions from VAT section 109 of the NIRC.
- Sale or importation of agricultural and marine
food are their original state, includes poultry
and livestock, simple processing of preparation
or preservation for the market is considered in
original form (e.g. freezing, salting, roasting,
broiling, smoking, or striping)
- Sale or importation of fertilizers, feeds, seeds,
seedlings, and ingredients to make the
feedsexcept those special feeds for pets.
- Importation of personal and household effects
from those residents returning from abroad and
those resettling in the Philippines provided that
they are exempt from custom duties.
- Importations of those who come to settle in the
Philippines provided that it come within 90 days
from arrival.
- Services subject to percentage tax
- Services by agricultural contract growers and
milling for other palay, corn into grits and sugar
cane into sugar.
- Medical, dental, venery cervices except those
rendered by those professionals
- Educational services by private institution that
are accredited by deped ched tesda and
government educational institution
- Services under employer-employee relationship
- Services by mtinational corporations that onot
derive income in the Philippines
- Transaction exempted becaus of international
agreements if the PH is a member and special
laws except those under PD 529
- L
- M
- N
- Exports to a non vat registered
- Lease of residential unit with a monthly rental
not exceeding P10,000
- Sale, importation of printing and publication of
books new papers, magazines review or bulletin
which appears at regular intervals at fixed
prices for subscription and sale and not
principally made for the publication of
advertisements.
- Sale, importation or lease of passenger or cargo
vessels and aircrafts, including engine,
equipment and spare parts for domestic or
international operations
- Importation of fuel, goods and supplies by
persons engaged in international shipping or air
transport operations
- Serviced by banks, non-banks financial
intermediaries performing quasi-judicial
functions and other non bank intermediaries
- Gross sales does not exceed 1.5m
*exempt transactions Basic Commodities
* 0% rated exporters
Goods and Properties tangible or intangible capable of
monetary estimation
Goods movable
Property includes real property
G&P includes the ff:
- Real property for primarily for sale/lease in the
ordinary course of business
- Right previleges to use intellectual property,
patent etc.
- The right/privilege to use industrial commercial,
scientific equipment
- The right to use films, tapes, disc
- Radio television satellite transmission and cable
transmission time.
Sale the transfer of ownership of property in
consideration of money.
Transactions deemed sale
- Transfer, use or consumption not in the
ordinary course of business that is ordinarily
intended to be sold.
- Distribution or transfer of inventory to
sharesholders or investors for their shares in
the profits of a Vat registered person.
- Distribution or transfer of inventory to creditors
in payment of debt
- Consignment of goods if goods were not sold 60
days after consignment.
- Retirement of cessation
*those real property not primarily held for sale/lease
but used as low cost socializing housing that is worth
more than 1.5m and other dwelling worth mre than
2.5m are subject to VAT if they are covered by RA7279.
Tax base gross selling price exclude vat include excise.
- Everything that the buyer pays the seller except
the VAT shifted to the buyer.
- Gross selling price is not gross sales
VAT rates:
12% gross selling price
0%
- export sale
- foreign currency dominated sale
- sales to persons or entities whose exemption under
special laws
*foreign currency dominated goods are those sold in
consideration of foreign currency recognized in the
Philippines except for automobiles and n-essential
goods subject to excise tax.
If output > input VAT PAYABLE (liability in BS)
If input < output deferred input tax in assets
Presumptive Input Tax
- 4% on gross value of primary agricultural
products by (e.g. sardine, mackerel, etc.)
pasteurization, canning and activities which
physical or chemical processes alter the exterior
texture or form the inner substance of a
product in such a manner as to prepare it for
special use to which could not have been put in
its original form and condition.
Sale of service
- Must be rendered in the Philippines
- All kinds of service except for those that have
employer and employee relationship
- There is a fee remuneration or consideration
-