Professional Documents
Culture Documents
Title V, NIRC, as amended by RAs 7716, 7717, 8241, 8424 9238 and 9337.
Adjusted from P550,000 to P1.5 million with the imposition of RA No. 9337. As required
by the same Act, it should be adjusted to present value using the CPI published by the NSO not later
than January 31, 2009 and every three (3) years thereafter.
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Domestic transport of passengers by air and water is now subject to VAT under RA No.
9337.
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The gross receipts of common carriers derived from their incoming and
outgoing freight shall not be subject to the local taxes imposed under RA No. 7160,
otherwise known as the Local Government Code of 1991.
The following shall be considered the minimum quarterly gross receipts in
each particular case:7
Jeepney for hire:
Manila and other cities
Provincial
P2,400
P1,200
P3,600
P6,000
P7,200
Taxi:
Manila and other cities
Provincial
P3,600
P2,400
P3,000
P1,800
It is noted that the BIR had issued RR No. 9-2007 on 4 July 2007, prescribing the updated
minimum monthly/quarterly gross receipts in computing the percentage tax of domestic carriers and
keepers of garages. However, Senate Committee Report No. 37 (dated 11 February 2008)
recommended for the suspension of RR No. 9-2007 based on the following grounds:
a)
Public consultation with all the sectors purportedly affected by the proposed increase in
the minimum quarterly gross receipts must first be undertaken before the imposition of
the same be recommended. It is necessary that, although taxes have always been defined
as the lifeblood of a government"," fundamental guidelines limiting the exercise of the
taxing and revenue-raising powers of the government such as the principles of "taxation
must always be based on the ability of the taxpayers to pay", and "no taxation without
representation" be essentially adhered to.
b) The power to amend, modify or repeal any provision of the National Internal Revenue
Code is lodged exclusively In the legislative department, therefore the BIR and/or the
DOF should not depart from the ambit of the authority merely delegated upon them by
Congress.
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D. FRANCHISE TAX9
On the annual gross receipts derived by the franchise grantees of:
1. Gas and water utilities from the business covered by the law granting the
franchise 2%10
2. Radio and/or television broadcasting companies whose annual gross
receipts of the preceding year do not exceed P10 million 3%11. Said
company may opt to be registered as a VAT taxpayer. The option, once
exercised, cannot be revoked.
3. National Grid Corporation on all its gross receipts derived from its
operation covered by the law granting the franchise 3%12
E. OVERSEAS COMMUNICATION TAX13
On the amount paid on every overseas dispatch, message or conversation
transmitted from the Philippines by telephone, telegraph, telewriter exchange,
wireless and other communication equipment services 10%
The tax 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.
The tax does not apply to the amounts paid for messages transmitted by:
1. The Government, its political subdivisions or instrumentalities;
2. Diplomatic services;
3. Public international organizations or any of their agencies based in the
Philippines; and
4. News services.
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11
Companies whose annual gross receipts of the preceding year exceed P10 million are
subject to VAT.
12
13
5%
1%
0%
7%
7%
Note: Income or revenue realized by the BSP from its transactions undertaken in pursuit of its
legally-mandated functions are exempt from the GRT imposed on banks and non-bank
financial intermediaries performing quasi-banking functions under Sec. 121 of the Code. [Sec.
5, RR No. 8-2008]
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Banks or banking institutions shall refer to those entities as defined under Section 3 of
Republic Act No. 8791, otherwise known as the General Banking Law of 2000, or more specifically, to
entities engaged in the lending of funds obtained in the form of deposits. The term banks or
banking institutions are synonymous and interchangeable and specifically include universal banks,
commercial banks, thrift banks (savings and mortgage banks, stock savings and loan associations, and
private development banks), cooperative banks, rural banks, Islamic banks and other classifications of
banks as may be determined by the Monetary Board of the BSP. [Sec. 3.1, RR No. 8-2008]
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Quasi-banking functions shall refer to the borrowing of funds from twenty (20) or more
personal or corporate lenders at any one time, through the issuance, endorsement or acceptance of debt
instruments of any kind, other than deposits, for the borrowers own account or through the issuance of
certificates of assignment or similar instruments, with recourse, or of repurchase agreements for
purposes of relending or purchasing receivables or other similar obligations. Provided, however, that
commercial, industrial and other non-financial companies, which borrows funds through any of these
means for the limited purpose of financing their own needs or the needs of their agents or dealers, shall
not be considered as performing quasi-banking functions. [Sec. 3.3, RR No. 8-2008]
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Rates
5%
1%
Note: Income or revenue realized by the BSP from its transactions undertaken in pursuit of its
legally-mandated functions are exempt from the GRT imposed on other non-bank financial
intermediaries under Sec. 122 of the Code. [Sec. 5, RR No. 8-2008]
18%
Boxing exhibitions23
10%
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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. In the case of jai-alai and race tracks, the tax shall be based on gross receipts
irrespective of whether or not any amount is charged for admission.
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15%
30%
J. TAX ON WINNINGS24
On dividends or winnings in horse races
10%
4%
10%
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Shares of stock shall include shares of stock of a corporation; warrants and/or options to
purchase shares of stock; as well as units of participation in a partnership (except general professional
partnerships), joint stock companies, joint accounts, joint ventures taxable as corporations,
associations, and recreation or amusement clubs (such as golf, polo or similar clubs); and mutual fund
certificates. [Sec. 2 (c), RR No. 6-2008]
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Gross selling price refers to the total amount of money or its equivalent which the
purchaser pays the seller as consideration for the shares of stock. [Sec. 2 (h), RR No. 6-2008]
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4%
2%
Over 33 1/3%
1%
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Gross value in money means the fair market value. In the case of shares traded thru
the stock exchange, fair market value shall consist of the actual selling price at which the transaction
was executed in the trading system and/or facilities of the Local Stock Exchange. [Sec. 2 (i), RR No.
6-2008]
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Stockbroker includes all persons whose business t is, for other brokers, to negotiate
purchases or sales of stocks, or engaged in the business of effecting transactions in securities for the
account of others but does not include a bank or underwriters for one or more investment companies as
defined in the Investment Company Act. [Sec. 2 (f), RR No. 6-2008]
32
Initial public offering (IPO) refers to public offering of shares of stock made for the first
time in the Local Stock Exchange. [Sec. 2 (j), RR No. 6-2008]
33
Primary offering refers to the original sale made to the investing public by the issuer
corporation of its unissued Shares of Stock. [Sec. 2 (k), RR No. 6-2008]
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Any gain derived from the disposition of shares of stock subject to the
aforementioned tax shall be exempt from the tax imposed under Sec. 24(C),
Sec. 27(D)(2), Sec. 28(A)(8)(c) and Sec. 28(B)(5)(c) and from the regular
individual or corporate income tax. The tax paid shall not be deductible for
income tax purposes.
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Secondary offering refers to an offer for sale to the investing public by the existing
shareholders of their securities which is conducted during an IPO or a follow-on/follow-through
offering. [Sec. 2 (l), RR No. 6-2008]
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