END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

A. INCOME TAX, FINAL WITHHOLDING TAX AND FRINGE BENEFITS TAX (FBT):

1. Increase in the authority of the Commissioner to audit and examine books of taxpayers
NOTWITHSTANDING ANY LAW REQUIRING THE PRIOR AUTHORIZATION OF ANY
GOVERNMENT AGENCY.

2. MANDATORY NOTICE TO AFFECTED TAXPAYERS in case the Commissioner INCREASE

THE FAIR MARKET VALUE OF REAL PROPERTIES.

3. AUTOMATIC ADJUSTMENT OF FAIR VALUE OF REAL PROPERTIES IN THE PHILS.

EVERY 3 YEARS THROUGH THE RULES AND REGULATIONS ISSUED BY THE
SECRETARY OF FINANCE BASED ON THE CURRENT VALUATION STANDARDS.
PROVIDED, THAT NO ADJUSTMENT IN ZONAL VALUATION SHALL BE VALID UNLESS
PUBLISHED IN A NEWSPAPER OF GENERAL CIRCULATION IN THE PROVINCE, CITY
OR MUNICIPALITY CONCERNED, OR IN THE ABSENCE THEREOF, SHALL BE POSTED
IN THE PROVINCIAL CAPITOL, CITY OR MUNICIPAL HALL ANDIN TWO (2) OTHER
CONSPICUOUS PUBLIC PLACES THEREIN: PROVIDED, FURTHER, THAT THE BASIS
OF ANY VALUATION, INCLUDING THE RECORDS OF CONSULTATIONS DONE, SHALL
BE PUBLIC RECORDS OPEN TO THE INQUIRY OF ANY TAXPAYER.

4. Individual employees whose annual taxable income does not exceed P250,000 shall now be
exempt from income tax. New tax rates will now range from 0% up to 35%, depending on the
income level of the said employee.

5. SELF EMPLOYED INDIVIDUALS AND/OR PROFESSIONALS SHALL HAVE THE OPTION

TO AVAIL OF AN 8% TAX ON GROSS SALES OR RECEIPTS AND OTHER OPERATING
INCOME IN EXCESS OF P250,000 IN LIEU OF THE GRADUATED TAX RATES.

6. CHANGING THE RATE OF TAX FOR MIXED INCOME EARNERS. ALL INCOME FROM
COMPENSATION SHALL BE SUBJECT TO THE TAX PRESCRIBED UNDER SEC. 24(A).
ALL INCOME FROM BUSINESS AND/OR PROFESSION SHALL BE SUBJECT TO THE
GRADUATED TAX RATES AS PRESCRIBED UNDER SEC. 24(A) OR 8% TAX ON GROSS
SALES OR RECEIPTS AND OTHER OPERATING INCOME IN LIEU OF THE GRADUATED
TAX RATES AND PERCENTAGE TAX.

7. GROSS SALES OR GROSS RECEIPTS AND OTHER NON-OPERATING INCOME WHICH

EXCEEDS THE VAT THRESHOLD (NEW THRESHOLD IS MORE THAN P3,000,000)
SHALL BE SUBJECT TO SEC. 24(A) OF THE CODE.

8. WINNINGS AMOUNTING TO MORE THAN P10,000 FROM PCSO AND LOTTO SHALL
NOW BE SUBJECT TO THE 20% FINAL WITHHOLDING TAX.

9. INCREASE IN THE FINAL WITHHOLDING TAX ON INTEREST INCOME FROM FOREIGN

CURRENCY DEPOSIT SYSTEM FROM 7.5% TO 15%.

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)
 END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

10. CAPITAL GAINS FROM SALE OF SHARES OF STOCK NOT TRADED IN THE STOCK
EXCHANGE SHALL NOW BE SUBJECT TO THE 15% FINAL WITHHOLDING TAX.

11. Preferential tax treatment of 15% shall not be applicable to the employees of REGIONAL
HEADQUARTERS (RHQS), REGIONAL OPERATING HEADQUARTERS (ROHQS),
OFFSHORE BANKING UNITS (OBUS) OR PETROLEUM SERVICE CONTRACTORS AND
SUBCONTRACTORS REGISTERING WITH THE SECURITIES AND EXCHANGE
COMMISSION (SEC) AFTER JANUARY 1, 2018.

12. EXPRESS EXCLUSION OF THE PHILIPPINE CHARITY SWEEPSTAKES OFFICE (PCSO)

FROM ENTITITES EXEMPT FROM TAX.

13. NON-TAXABLE 13TH MONTH PAY WAS INCREASED FROM P82,000.00 TO P90,000.

14. INCREASE IN FRINGE BENEFITS TAX FROM 32% TO 35%.

15. IN CASE OF A GENERAL PROFESSIONAL PARTNERSHIP (GPP), OPTIONAL

STANDARD DEDUCTION (OSD) OF 40% MAY ONLY BE AVAILED ONCE, EITHER BY THE
GENERAL PROFESSIONAL PARTNERSHIP OR PARTNERS COMPRISING THE
PARTNERSHIP.

16. AN INDIVIDUAL, WHO IS NOT ENGAGED IN BUSINESS OR PRACTICE OF PROFESSION,

WHOSE TAXABLE INCOME IS SUBJECT TO 0% SHALL NOT BE REQUIRED TO FILE AN
INCOME TAX RETURN.

17. PERSONAL AND ADDITIONAL PERSONAL EXEMPTIONS ARE NOW REPEALED.

18. REDUCTION OF THE INCOME TAX RETURN TO A MAXIMUM OF FOUR (4) PAGES.

19. 2ND INSTALLMENT OF THE PAYMENT OF INCOME TAX WILL NOW BE DUE ON OR
BEFORE OCTOBER 15.

20. BEGINNING JANUARY 1, 2019, THE RATE OF CREDITABLE WITHHOLDING TAX SHALL
NOT BE LESS THAN 1% BUT NOT MORE THAN 15% OF THE INCOME PAYMENT.

21. THE RETURN FOR FINAL AND CREDITABLE WITHHOLDING TAXES SHALL BE FILED
AND PAID NOT LATER THAN THE LAST DAY OF THE MONTH FOLLOWING THE CLOSE
OF THE QUARTER DURING WHICH THE WITHHOLDING WAS MADE. THE POWER OF
THE SECRETARY OF FINANCE TO REQUIRE WITHHOLDING AGENTS TO PAY OR
DEPOSIT TAXES DEDUCTED OR WITHHELD AT MORE FREQUENT INTERVALS IS NOW
REPEALED.

22. EVERY INDIVIDUAL SUBJECT TO INCOME TAX UNDER SECTIONS 24 AND 25(A) OF
THE TAX CODE SHALL FILE HIS INCOME TAX RETURN ON OR BEFORE MAY 15.

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)
 END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

23. FINAL Tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded through the
Local Stock Exchange will increase from 1/2 of 1% to 6/10 of 1%.

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)
 END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

B. ESTATE TAX:

1. EXEMPTIONS ALLOWED TO ESTATES AND TRUSTS AMOUNTING TO P20,000 IS NOW

REPEALED.

2. The rate for ESTATE TAX IS REDUCED TO A FLAT RATE OF 6% BASED ON THE VALUE
OF THE NET ESTATE.

3. STANDARD DEDUCTION, FOR PURPOSES OF COMPUTING THE NET ESTATE, WAS

INCREASED FROM P1,000,000 TO P5,000,000.

4. IF THE CURRENT FAIR MARKET VALUE OF THE DECEDENT’S FAMILY HOME IS MORE
THAN P10,000,000, THE EXCESS SHALL AUTOMATICALLY BE SUBJECT TO ESTATE
TAX.

5. MEDICAL EXPENSES, FOR PURPOSES OF COMPUTING THE NET ESTATE, IS NOW

REPEALED.

6. Non-Resident Alien decedent is now entitled to a STANDARD DEDUCTION amounting to

P500,000

7. NON-RESIDENT ALIEN DECEDENT CAN NOW AVAIL THE DEDUCTION PROVIDED FOR
UNDER THE LAW EVEN IF THE RETURN DOES NOT INCLUDE HIS GROSS ESTATE NOT
SITUATED IN THE PHILIPPINES.

8. By express repeal of Sec. 89 of the NIRC, Notice of Death is no longer needed to be filed with
the Commissioner.

9. Timing of filing of the estate tax return shall now be filed within 1 year from the decedent’s
death.

10. IN CASE THE AVAILABLE CASH OF THE ESTATE IS INSUFFICIENT TO PAY THE TOTAL
ESTATE TAX DUE, PAYMENT BY INSTALLMENT SHALL BE ALLOWED WITHIN TWO (2)
YEARS FROM THE STATUTORY DATE FOR ITS PAYMENT WITHOUT CIVIL PENALTY
AND INTEREST.

11. Withdrawal to the Bank Deposit of the decedent is now allowed subject to the FINAL
WITHHOLDING TAX OF 6%.

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)
 END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

C. DONOR’S TAX:

1. DONOR’S TAX is now reduced to 6%, regardless whether the donee is a stranger or not.

2. Sale, exchange or transfer of PROPERTY made in the ORDINARY COURSE OF BUSINESS

(A TRANSACTION WHICH IS BONA FIDE, AT ARM’S LENGTH, AND FREE FROM ANY
DONATIVE INTENT), will be considered as MADE FOR AN ADEQUATE AND FULL
CONSIDERATION IN MONEY OR MONEY’S WORTH.

3. Dowries or gifts made on account of marriage by parents to their children is now subject to
DONOR’S TAX.

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)
 END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

D. VALUE-ADDED TAX:

1. Sale of raw materials or packaging to nonresident buyer, export oriented enterprise, and those
considered as export sales under EO 226, shall be subject to the 12% VAT and no longer be
considered as Export Sale Subject to 0% upon satisfaction of the following:

a. SUCCESSFUL ESTABLISHMENT AND IMPLEMENTATION OF AN ENHANCED VAT

REFUND SYSTEM THAT GRANTS REFUNDS OF CREDITABLE INPUT TAX WITHIN
NINETY (90) DAYS FROM THE FILING OF THE VAT REFUND APPLICATION WITH
THE BUREAU; AND
b. ALL PENDING VAT REFUND CLAIMS AS OF DECEMBER 31, 2017 SHALL BE FULLY
PAID IN CASH BY DECEMBER 31, 2019.

2. Deletion of the “Foreign Currency Denominated Sale” provision.

3. Electric Cooperatives are now subject to VAT;

4. Services rendered to persons engaged in international shipping or international air transport

operations, including leases of property for use thereof SHALL BE SUBJECT TO 0% VAT
ONLY IF SUCH SERVICES SHALL BE EXCLUSIVELY FOR INTERNATIONAL SHIPPING
OR AIR TRANSPORT OPERATIONS.

5. Processing, manufacturing or repacking goods for other persons doing business outside the
Philippines which goods are subsequently exported and Services performed by
subcontractors and/or contractors in processing, converting, or manufacturing goods for an
enterprise whose export sales exceed seventy percent (70%) of total annual production WILL
BE SUBJECT TO VAT AND NO LNGER BE SUBJECT TO 0% VAT RATE UPON
SATISFACTION OF THE FOLLOWING CONDITIONS:

a. SUCCESSFUL ESTABLISHMENT AND IMPLEMENTATION OF AN ENHANCED VAT

REFUND SYSTEM THAT GRANTS REFUNDS OF CREDITABLE INPUT TAX WITHIN
NINETY (90) DAYS FROM THE FILING OF THE VAT REFUND APPLICATION WITH
THE BUREAU; AND
b. ALL PENDING VAT REFUND CLAIMS AS OF DECEMBER 31, 2017 SHALL BE FULLY
PAID IN CASH BY DECEMBER 31, 2019.

6. Transport of passengers and cargo by FOREIGN air or sea vessels from the Philippines to
a foreign country is now subject to VAT.

7. FILIPINOS OR THEIR FAMILIES AND DESCENDANTS WHO ARE NOW RESIDENTS OR

CITIZENS OF OTHER COUNTRIES will now be exempt from VAT on their IMPORTATION
OF PROFESSIONAL INSTRUMENTS AND IMPLEMENTS, TOOLS OF TRADE,
OCCUPATION OR EMPLOYMENT, WEARING APPAREL, DOMESTIC ANIMALS, AND
PERSONAL AND HOUSEHOLD EFFECTS IN QUANTITIES AND OF THE CLASS
SUITABLE TO THE PROFESSION, RANK OR POSITION OF THE PERSONS IMPORTING

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)
 END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

SAID ITEMS, FOR THEIR OWN USE AND NOT FOR BARTER OR SALE,
ACCOMPANYING SUCH PERSONS, OR ARRIVING WITHIN A REASONABLE TIME.

8. BEGINNNING JANUARY 1, 2021, THE VAT EXEMPTION SHALL ONLY APPLY TO SALE
OF REAL PROPERTIES NOT PRIMARILY HELD FOR SALE TO CUSTOMERS OR HELD
FOR LEASE IN THE ORDINARY COURSE OF TRADE OR BUSINESS, SALE OF REAL
PROPERTY UTILIZED FOR SOCIALIZED HOUSING AS DEFINED BY REPUBLIC ACT NO.
7279, SALE OF HOUSE AND LOT, AND OTHER RESIDENTIAL DWELLINGS WITH
SELLING PRICE OF NOT MORE THAN TWO MILLION PESOS (P2,000,000).

9. Lease of a residential unit EXEMPT from VAT is increased to P15,000/month.

10. Importation of fuel, goods and supplies by persons engaged in international shipping or air
transport operations shall be EXEPT FROM VAT PROVIDED, THAT THE FUEL, GOODS,
AND SUPPLIES SHALL BE USED FOR INTERNATIONAL SHIPPING OR AIR TRANSPORT
OPERATIONS.

11. SALE OR LEASE OF GOODS AND SERVICES TO SENIOR CITIZENS AND PERSONS
WITH DISABILITIES shall be EXEMPT from VAT.

12. TRANSFER OF PROPERTY PURSUANT TO SECTION 40(C)(2) [MERGER OR

CONSOLIDATION] shall be EXEMPT FROM VAT.

13. ASSOCIATION DUES, MEMBERSHIP FEES, AND OTHER ASSESSMENTS AND

CHARGES COLLECTED BY HOMEOWNERS ASSOCIATIONS AND CONDOMINIUM
CORPORATIONS shall be EXEMPT FROM VAT.

14. SALE OF GOLD TO THE BANGKO SENTRAL NG PILIPINAS shall be EXEMPT FROM VAT.

15. BEGINNING JANUARY 1, 2019, SALE OF DRUGS AND MEDICINES PRESCRIBED FOR
DIABETES, HIGH CHOLESTEROL, AND HYPERTENSION shall be EXEMPT FROM VAT.

16. Sale or lease of goods or properties or the performance of services with gross annual sales
and/or receipts not EXCEEDING P3,000,000.00 shall be EXEMPT FROM VAT.

17. Amortization of Input VAT on Capital Goods shall only be allowed UNTIL DECEMBER 31,
2021 AFTER WHICH TAXPAYERS WITH UNUTILIZED INPUT VAT ON CAPITAL GOODS
PURCHASED OR IMPORTED SHALL BE ALLOWED TO APPLY THE SAME AS
SCHEDULED UNTIL FULLY UTILIZED.

18. The Commissioner shall grant a refund for creditable input taxes within NINETY (90) days
from the date of submission of THE OFFICIAL RECEIPTS OR INVOICES AND OTHER
DOCUMENTS. PROVIDED, THAT SHOULD THE COMMISSIONER FIND THAT THE
GRANT OF REFUND IS NOT PROPER, THE COMMISSIONER MUST STATE IN WRITING
THE LEGAL AND FACTUAL BASIS FOR THE DENIAL. PROVIDED, HOWEVER, THAT
FAILURE ON THE PART OF ANY OFFICIAL, AGENT, OR EMPLOYEE OF THE BIR TO ACT

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)
 END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

ON THE APPLICATION WITHIN THE NINETY (90)-DAY PERIOD SHALL BE PUNISHABLE

UNDER SECTION 269 OF THIS CODE.

19. BEGINNING JANUARY 1, 2023, THE FILING AND PAYMENT OF VAT SHALL BE DONE
WITHIN TWENTY-FIVE (25) DAYS FOLLOWING THE CLOSE OF EACH TAXABLE
QUARTER.

20. BEGINNING JANUARY 1, 2021, THE VAT WITHOLDING SYSTEM imposed upon the
Government or any of its political subdivisions, instrumentalities or agencies, including
government-owned or controlled corporations (GOCCs) shall SHIFT FROM FINAL TO A
CREDITABLE SYSTEM.

21. PAYMENTS FOR PURCHASES OF GOODS AND SERVICES ARISING FROM PROJECTS
FUNDED BY OFFICIAL DEVELOPMENT ASSISTANCE (ODA) AS DEFINED UNDER
REPUBLIC ACT NO. 8182, OTHERWISE KNOWN AS THE “OFFICIAL DEVELOPMENT
ASSISTANCE ACT OF 1996”, AS AMENDED, SHALL NOT BE SUBJECT TO THE FINAL
WITHHOLDING TAX SYSTEM.

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)
 END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

E. EXCISE TAX:

1. SERVICES PERFORMED IN THE PHILIPPINES (PERTAINING TO COSMETIC

PROCEDURES, SURGERIES, AND BODY ENHANCEMENTS) shall now be SUBJECT TO
EXCISE TAX.

2. GRADUATED INCREASE OF EXCISE TAX IMPOSED ON CIGARETTES PACKED BY

HAND.

3. GRADUATED INCREASE OF EXCISE TAX IMPOSED ON CIGARETTES PACKED BY

MACHINE.

4. EXCISE TAX ON Lubricating oils and greases, including but not limited to, basestock for lube
oils and greases, high vacuum distillates, aromatic extracts and other similar preparations,
and additives for lubricating oils and greases, whether such additives are petroleum based or
not, per liter and kilogram, respectively, of volume capacity or weight, shall increase from
P4.50 to P8.00 (2018), P9.00 (2019) and P10.00 (2020).

5. EXCISE TAX ON Processed gas, per liter of volume capacity shall increase from P0.05 to
P8.00 (2018), P9.00 (2019) and P10.00 (2020).

6. EXCISE TAX ON Waxes and petrolatum, per kilogram, shall increase from P3.50 to P8.00
(2018), P9.00 (2019) and P10.00 (2020).

7. EXCISE TAX ON denatured alcohol to be used for motive power, per liter of volume capacity,
shall increase from P0.05 to P8.00 (2018), P9.00 (2019) and P10.00 (2020).

8. EXCISE TAX ON Naphtha, regular gasoline, PYROLYSIS GASOLINE and other similar
products of distillation, per liter of volume capacity, shall increase from P4.35 to P7.00 (2018),
P9.00 (2019) and P10.00 (2020).

9. Naphtha AND PYROLYSIS GASOLINE shall be subject to the excise tax of P0.00 when used
as a raw material in the production of petrochemical products, OR IN THE REFINING OF
PETROLEUM PRODUCTS, or as replacement fuel for natural-gas-fired-combined cycle
power plant in lieu of locally-extracted natural gas during the non-availability thereof, subject
to the rules and regulations to be promulgated by the Secretary of Finance. Provided, further,
That THE PRODUCTION OF PETROLEUM PRODUCTS, WHETHER OR NOT THEY ARE
CLASSIFIED AS PRODUCTS OF DISTILLATION AND FOR USE SOLELY FOR THE
PRODUCTION OF GASOLINE SHALL BE EXEMPT FROM EXCISE TAX.

10. EXCISE TAX ON Unleaded premium gasoline, per liter of volume capacity, shall increase
from P4.35 to P7.00 (2018), P9.00 (2019) and P10.00 (2020).

11. EXCISE TAX ON Aviation turbo jet fuel, AVIATION GAS, per liter of volume capacity, shall
increase from P3.67 to P4.00.

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)
 END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

12. EXCISE TAX ON Kerosene, per liter of volume capacity, shall increase from P0.00 to P3.00
(2018), P4.00 (2019) and P5.00 (2020).

13. EXCISE TAX ON Diesel fuel oil, and on similar fuel oils having more or less the same
generating power, per liter of volume capacity, shall increase from P0.00 to P2.50 (2018),
P4.50 (2019) and P6.00 (2020).

14. EXCISE TAX ON Liquefied petroleum gas, per KILOGRAM, shall increase from P0.00 to
P1.00 (2018), P2.00 (2019) and P3.00 (2020). PROVIDED, THAT LIQUEFIED PETROLEUM
GAS WHEN USED AS RAW MATERIAL IN THE PRODUCTION OF PETROCHEMICAL
PRODUCTS, SUBJECT TO THE RULES AND REGULATIONS TO BE PROMULGATED BY
THE SECRETARY OF FINANCE, SHALL BE TAXED ZERO (P0.00) PER KILOGRAM.

15. EXCISE TAX ON Asphalts, per kilogram, shall increase from P0.56 to P8.00 (2018), P9.00
(2019) and P10.00 (2020).

16. EXCISE TAX ON Bunker fuel oil, and on similar fuel oils having more or less the same
generating power, per liter of volume capacity, shall increase from P0.00 to P2.50 (2018),
P4.50 (2019) and P6.00 (2020). PROVIDED, HOWEVER, THAT THE EXCISE TAXES PAID
ON THE PURCHASED BASESTOCK (BUNKER) USED IN THE MANUFACTURE OF
EXCISABLE ARTICLES AND FORMING PART THERE OF SHALL BE CREDITED AGAINST
THE EXCISE TAX DUE THEREFROM.

17. PETROLEUM COKE, PER METRIC TON, shall now be subject to the EXCISE TAX of P2.50
(2018), P4.50 (2019) and P6.00 (2020). PROVIDED, HOWEVER, THAT, PETROLEUM
COKE, WHEN USED AS FEEDSTOCK TO ANY POWER GENERATING FACILITY, PER
METRIC TON, ZERO (P0.00).

18. FOR THE PERIOD COVERING 2018 TO 2020, THE SCHEDULED INCREASE IN THE
EXCISE TAX ON FUEL AS IMPOSED IN THIS SECTION SHALL BE SUSPENDED WHEN
THE AVERAGE DUBAI CRUDE OIL PRICE BASED ON MEAN OF PLATTS SINGAPORE
(MOPS) FOR THREE (3) MONTHS PRIOR TO THE SCHEDULED INCREASE OF THE
MONTH REACHES OR EXCEEDS EIGHTY DOLLARS (USD 80) PER BARREL.

19. THE SECRETARY OF FINANCE SHALL REQUIRE THE USE OF AN OFFICIAL FUEL
MARKING OR SIMILAR TECHNOLOGY ON PETROLEUM PRODUCTS THAT ARE
REFINED, MANUFACTURED, OR IMPORTED INTO THE PHILIPPINES, AND THAT ARE
SUBJECT TO THE PAYMENT OF TAXES AND DUTIES, SUCH AS BUT NOT LIMITED TO
UNLEADED PREMIUM GASOLINE, KEROSENE, AND DIESEL FUEL OIL AFTER THE
TAXES AND DUTIES THEREON HAVE BEEN PAID.

20. INCREASE in the Excise tax rate ranging from 4% to 50% of the NET MANUFACTURER’S
PRICE/IMPORTER’S SELLING PRICE.

21. HYBRID VEHICLES SHALL BE SUBJECT TO FIFTY PERCENT (50%) OF THE

APPLICABLE EXCISE TAX RATES ON AUTOMOBILES. PROVIDED, FURTHER, PURELY

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)
 END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

ELECTRIC VEHICLES AND PICK-UPS SHALL BE EXEMPT FROM EXCISE TAX ON

AUTOMOBILES.

22. THERE SHALL BE LEVIED, ASSESSED AND COLLECTED A TAX EQUIVALENT TO FIVE
PERCENT (5%) BASED ON THE GROSS RECEIPTS DERIVED FROM THE
PERFORMANCE OF SERVICES, NET OF EXCISE TAX AND VALUE-ADDED TAX, ON
INVASIVE COSMETIC PROCEDURES, SURGERIES, AND BODY ENHANCEMENTS
DIRECTED SOLELY TOWARDS IMPROVING, ALTERING, OR ENHANCING THE
PATIENT‟S APPEARANCE AND DO NOT MEANINGFULLY PROMOTE THE PROPER
FUNCTION OF THE BODY OR PREVENT OR TREAT ILLNESS OR DISEASE. PROVIDED,
THAT THIS TAX SHALL NOT APPLY TO PROCEDURES NECESSARY TO AMELIORATE
A DEFORMITY ARISING FROM, OR DIRECTLY RELATED TO, A CONGENITAL OR
DEVELOPMENTAL DEFECT OR ABNORMALITY, A PERSONAL INJURY RESULTING
FROM AN ACCIDENT OR TRAUMA, OR DISFIGURING DISEASE, TUMOR, VIRUS OR
INFECTION: PROVIDED, FINALLY, THAT CASES OR TREATMENTS COVERED BY THE
NATIONAL HEALTH INSURANCE PROGRAM SHALL NOT BE SUBJECT TO THIS TAX.

23. A TAX OF SIX PESOS (P6.00) PER LITER OF VOLUME CAPACITY SHALL BE LEVIED,
ASSESSED, AND COLLECTED ON SWEETENED BEVERAGES USING PURELY
CALORIC SWEETENERS, AND PURELY NON-CALORIC SWEETENERS, OR A MIX OF
CALORIC AND NON-CALORIC SWEETENERS.

24. A TAX OF TWELVE PESOS (P12.00) PER LITER OF VOLUME CAPACITY SHALL BE
LEVIED, ASSESSED, AND COLLECTED ON SWEETENED BEVERAGES USING PURELY
HIGH FRUCTOSE CORN SYRUP OR IN COMBINATION WITH ANY CALORIC OR NON-
CALORIC SWEETENER.

25. DOMESTIC OR IMPORTED coal and coke, NOTWITHSTANDING ANY INCENTIVES

GRANTED IN ANY LAW OR SPECIAL LAW, shall be subject to the EXCISE TAX of
P50.00/Metric Ton (2018), P100.00/Metric Ton (2019) and P150.00/Metric Ton (2020).

26. EXCISE TAX on all nonmetallic minerals and quarry resources, shall increase from 2% to 4%
based on the actual market value of the gross output thereof at the tie of removal, in the case
of those locally extracted or produced.

27. EXCISE TAX on Copper and other metallic minerals shall increase from 2% to 4%.

28. EXCISE TAX on Gold and chromite shall increase from 2% to 4%.

29. EXCISE TAX on indigenous petroleum shall increase from 3% to 6%.

30. Manufacturers AND/OR IMPORTERS are REQUIRED to Provide Themselves with Counting
or Metering Devices to Determine VOLUME OF Production AND IMPORTATION.

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)
 END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

F. DOCUMENTARY STAMP TAX (DST):

1. DST on Original Issue of Shares of Stock shall increase from P1.00 on each P200.00 to P2.00
on each P200.00, or fractional part thereof, of the par value, of such shares of stock.

2. DST on Sales, Agreements to Sell, Memoranda of Sales, Deliveries or Transfer of Shares or

Certificates of Stock shall increase from P0.75 on each P200.00 to P1.50 on each P200.00,
or fractional part thereof, of the par value, of such shares of stock.

3. DST on Certificates of Profits or Interest in Property or Accumulations shall increase from

P0.50 on each P200.00 to P1.00 on each P200.00, or fractional part thereof, of the face value
of such certificates or memorandum.

4. DST on Bank Checks, Drafts, Certificates of Deposit not Bearing Interest, and Other
Instruments shall increase from P1.50 to P3.00.

5. DST on All Debt Instruments shall increase from P1.00 on each P200.00 to P1.50 on each
P200.00, or fractional part thereof, of the issue price of any such debt instruments.

6. DST on All Bills of Exchange or Drafts shall increase from P0.30 on each P200.00 to P0.60
on each P200.00, or fractional part thereof, of the face value of any such bill of exchange or
draft.

7. DST Upon Acceptance of Bills of Exchange and Others shall increase from P0.30 on each
P200.00 to P0.60 on each P200.00, or fractional part thereof, of the face value of any such
bill of exchange, or order, or the Philippine equivalent of such value, if expressed in foreign
currency.

8. DST on Foreign Bills of Exchange and Letters of Credit shall increase from P0.30 on each
P200.00 to P0.60 on each P200.00, or fractional part thereof, of the face value of any such
bill of exchange or letter of credit, or the Philippine equivalent of such face value, if expressed
in foreign currency.

9. DST on Life Insurance Policies will increase ranging from P20.00 to P200.00 depending on
the amount of insurance.

10. DST on all policies of annuities, or other instruments by whatever name the same may be
called, whereby an annuity may be made, transferred or redeemed, shall increase from P0.50
on each P200.00 to P1.00 on each P200.00, or fractional part thereof, of the premium or
installment payment on contract price collected.

11. DST on pre-need plans shall increase from P0.20 on each P200.00 to P0.40 on each
P200.00, or fractional part thereof, of the premium or contribution collected.

12. DST on Certificates shall increase from P15.00 to P30.00.

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)
 END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

13. DST on Warehouse Receipts shall increase from P15.00 to P30.00.

14. DST on each jai-alai, horse race ticket, lotto, or other authorized numbers games, shall
increase from P0.10 to P0.20. Provided, that if the cost of the ticket exceed One peso (P1.00),
an additional tax of P0.20 on every P1.00, or fractional part thereof, shall be collected.

15. DST on Bills of Lading or Receipts shall increase from P1.00 to P2.00, if the value of such
goods exceeds One hundred pesos (P100) and does not exceed One thousand pesos
(P1,000); P20.00 if the value exceeds One thousand pesos (P1,000).

16. DST on each proxy for voting at any election of officers of any company or association shall
increase from P15.00 to P30.00.

17. DST on Powers of Attorney shall increase from P5.00 to P10.00.

18. DST on Leases and Other Hiring Agreements shall increase from P3.00 to P6.00 for the 1st
P2,000.00, or fractional part thereof, and an additional P2.00 for every P1,000.00 or
fractional part thereof, in excess of the first Two thousand pesos (P2,000) for each year of
the term of said contract or agreement.

19. DST on Mortgages, Pledges, and Deeds of Trust shall increase as follows:

a. When the amount secured does not exceed Five thousand pesos (P5,000), P40.00.

b. On each Five thousand pesos (P5,000), or fractional part thereof in excess of Five
thousand pesos (P5,000), an additional tax of P20.00.

20. Donation of Real Property shall now be subject to DST pursuant to the following computation:

a. When the consideration, or value received or contracted to be paid for such realty, after
making proper allowance of any encumbrance, does not exceed One thousand pesos
(P1,000), Fifteen pesos (P15.00).

b. For each additional One thousand pesos (P1,000) or fractional part thereof in excess of
One thousand pesos (P1,000) of such consideration or value, Fifteen pesos (P15.00).

21. DST on Charter Parties and Similar Instruments shall increase as follows:

a. If the registered gross tonnage of the ship, vessel or steamer does not exceed one
thousand (1,000) tons, and the duration of the charter or contract does not exceed six (6)
months, from P500.00 to P1,000.00; and for each month or fraction of a month in excess
of six (6) months, an additional tax of P100.00, shall be paid.

b. If the registered gross tonnage exceeds one thousand (1,000) tons and does not exceed
ten thousand (10,000) tons, and the duration of the charter or contract does not exceed

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)
 END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

six (6) months, from P1,000.00 to P2,000.00; and for each month or fraction of a month in
excess of six (6) months, an additional tax of P200.00 shall be paid.

c. If the registered gross tonnage exceeds ten thousand (10,000) tons and the duration of
the charter or contract does not exceed six (6) months, from P1,500.00 to P3,000.00; and
for each month or fraction of a month in excess of six (6) months, an additional tax of P300
shall be paid.

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)
 END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

G. BOOKKEEPING AND OTHER COMPLIANCE REQUIREMENTS:

1. Corporations, companies, partnerships or persons whose gross ANNUAL sales, earnings,

receipts or output exceed THREE MILLION (P3,000,000), shall have their books of accounts
audited and examined yearly by independent Certified Public Accountants and their income
tax returns accompanied with a duly accomplished Account Information Form (AIF) which
shall contain, among others, information lifted from certified balance sheets, profit and loss
statements, schedules listing income-producing properties and the corresponding income
therefrom and other relevant statements.

2. THE COMMISSIONER SHALL SIMPLIFY THE BUSINESS REGISTRATION AND TAX

COMPLIANCE REQUIREMENTS OF SELF-EMPLOYED INDIVIDUALS AND/OR
PROFESSIONALS.

3. Persons required to register for Value-Added Tax:

a. His gross sales or receipts for the past twelve (12) months, other than those that are
exempt under Section 109(A) to (BB), have exceeded P3,000,000.00.

b. There are reasonable grounds to believe that his gross sales or receipts for the next twelve
(12) months, other than those that are exempt under Section 109(A) to (BB), will exceed
P3,000,000.00.

4. ANY PERSON TAXED UNDER SECTION 24(A)(2)(B) AND 24(A)(2)(C)(2)(A) OF THE NIRC
WHO ELECTED TO PAY THE EIGHT PERCENT (8%) TAX ON GROSS SALES OR
RECEIPTS SHALL NOT BE ALLOWED TO AVAIL the Optional Registration for Value-Added
Tax of Exempt Person.

5. All persons subject to an internal revenue tax shall, AT THE POINT OF each sale and transfer
of merchandise or for services rendered valued at P100.00 or more, issue duly registered
receipts or sale or commercial invoices.

6. INTEREST RATE THAT SHALL BE ASSESSED AND COLLECTED ON ANY UNPAID

AMOUNT OF TAX, WAS REDUCED FROM 20% TO 12% (THE RATE OF DOUBLE THE
LEGAL INTEREST RATE FOR LOANS OR FORBEARANCE OF ANY MONEY IN THE
ABSENCE OF AN EXPRESS STIPULATION AS SET BY BANKKO SENTRAL NG PILIPINAS
– please refer to BSP Circular No. 799, Series of 2013).

7. WITHIN FIVE (5) YEARS FROM THE EFFECTIVITY OF RA 10963 AND UPON THE
ESTABLISHMENT OF A SYSTEM CAPABLE OF STORING AND PROCESSING THE
REQUIRED DATA, THE BUREAU SHALL REQUIRE TAXPAYERS ENGAGED IN THE
EXPORT OF GOODS AND SERVICES, TAXPAYERS ENGAGED IN E-COMMERCE, AND
TAXPAYERS UNDER THE JURISDICTION OF THE LARGE TAXPAYERS SERVICE TO
ISSUE ELECTRONIC RECEIPTS OR SALES OR COMMERCIAL INVOICES IN LIEU OF
MANUAL RECEIPTS OR SALES OR COMMERCIAL INVOICES, SUBJECT TO RULES AND
REGULATIONS TO BE ISSUED BY THE SECRETARY OF FINANCE UPON

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)
 END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

RECOMMENDATION OF THE COMMISSIONER AND AFTER A PUBLIC HEARING SHALL

HAVE BEEN HELD FOR THIS PURPOSE: PROVIDED, THAT TAXPAYERS NOT
COVERED BY THE MANDATE OF THIS PROVISION MAY ISSUE ELECTRONIC
RECEIPTS OR, SALES OR COMMERCIAL INVOICES, IN LIEU OF MANUAL RECEIPTS,
AND SALES AND COMMERCIAL INVOICES.

8. DEFICIENCY AND THE DELINQUENCY INTEREST WILL NOT BE IMPOSED

SIMULTANEOUSLY.

9. Penalty imposed to those who Attempt to Evade or Defeat Tax was increased to A FINE OF
NOT LESS THAN FIVE HUNDRED THOUSAND PESOS (P500,000) BUT NOT MORE THAN
TEN MILLION PESOS (P10,000,000), AND IMPRISONMENT OF NOT LESS THAN SIX (6)
YEARS BUT NOT MORE THAN TEN (10) YEARS.

10. Penalty imposed to those who fail or refuse to Issue Receipts or Sales or Commercial
Invoices, Violations Related to the Printing of such Receipts or Invoices and Other Violations
was increased to A FINE OF NOT LESS THAN FIVE HUNDRED THOUSAND PESOS
(P500,000) BUT NOT MORE THAN TEN MILLION PESOS (P10,000,000), AND
IMPRISONMENT OF NOT LESS THAN SIX (6) YEARS BUT NOT MORE THAN TEN (10)
YEARS.

11. ANY TAXPAYER REQUIRED TO TRANSMIT SALES DATA TO THE BUREAU‟S

ELECTRONIC SALES REPORTING SYSTEM BUT FAILS TO DO SO, SHALL PAY, FOR
EACH DAY OF VIOLATION, A PENALTY AMOUNTING TO ONE-TENTH OF ONE
PERCENT (1/10 OF 1%) OF THE ANNUAL NET INCOME AS REFLECTED IN THE
TAXPAYER‟S AUDITED FINANCIAL STATEMENT FOR THE SECOND YEAR PRECEDING
THE CURRENT TAXABLE YEAR FOR EACH DAY OF VIOLATION OR TEN THOUSAND
PESOS (P10,000), WHICHEVER IS HIGHER.

12. PURCHASE, USE, POSSESSION, SALE OR OFFER TO SELL, INSTALLMENT,

TRANSFER, UPDATE, UPGRADE, KEEPING OR MAINTAINING OF SALES
SUPPRESSION DEVICES IS NOW PUNISHABLE BY A FINE OF NOT LESS THAN FIVE
HUNDRED THOUSAND PESOS (P500,000) BUT NOT MORE THAN TEN MILLION PESOS
(P10,000,000), AND SUFFER IMPRISONMENT OF NOT LESS THAN TWO (2) YEARS BUT
NOT MORE THAN FOUR (4) YEARS.

13. OFFENSES RELATING TO FUEL MARKING SHALL NOW BE PUNISHED AS FOLLOWS:

a. FOR THE FIRST OFFENSE, A FINE OF TWO MILLION FIVE HUNDRED THOUSAND
PESOS (P2,500,000);

b. FOR THE SECOND OFFENSE, A FINE OF FIVE MILLION PESOS (P5,000,000); AND

c. FOR THE THIRD OFFENSE, A FINE OF TEN MILLION PESOS (P10,000,000) AND
REVOCATION OF LICENSE TO ENGAGE IN ANY TRADE OR BUSINESS.

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)
 END Tax Advisory

Salient Features of Republic Act No. 10963

TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) ACT
By: Ernesto N. Dayao, Jr.

14. DELIBERATE FAILURE TO ACT ON THE APPLICATION FOR REFUNDS WITHIN THE
PRESCRIBED PERIOD PROVIDED UNDER SEC. 112 is now considered as VIOLATION OF
SEC. 269 OF THE NIRC.

Whatever you do, work at it with all your heart, as working for the Lord, not for men.
(Colossians 3:23)