Percentage tax is a business tax imposed on persons

or entities/transactions:
a.
1. Who sell or lease goods, properties or services in
the course of trade or business and are exempt
from value-added tax (VAT) under Section 109
(w) of the National Internal Revenue Code, as
amended, whose gross annual sales and/or
receipts do not exceed Php 1,919,500 and who
are not VAT-registered; and
2. 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 of
passengers by land (except 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 –


 radio and/or television broadcasting

whose gross annual receipts for the
 preceding year do not exceed Php
10,000,000.00 and did not opt to
register as VAT taxpayers
 gas and water utilities
d. Overseas dispatch, message or conversation
transmitted from the Philippines, except those transmitted
by the Philippine government, any embassy
and consular offices of a foreign government, public
international organizations enjoying exemptions pursuant
to an international agreement and new
messages to a bona fide correspondent furnishing
general news service
e. Banks and non-bank financial intermediaries performing
quasi-banking functions
f. Other non-bank financial intermediaries (including
pawnshops)
g. Person, company or corporation (except purely
cooperative companies or associations) doing life
insurance business
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
j. Winnings in horse races
h. Sale, barter or exchange of shares of stock listed and
traded through the local stock exchange or through initial
public offering

[return to index]

Who are required to file Percentage Tax

Returns monthly?
Every person/entity subject to percentage tax as
enumerated in items 1, 2.a, 2.b, 2.c, 2.e, 2.f, 2.g and
2.h above
Who are required to file Percentage Tax
Returns quarterly?
1.
1. Operator, manager or person in charge of:
 cockpits,

 cabarets, day or night clubs, videoke bars,

karaoke bars, karaoke televisions, karaoke

boxes and music lounges
 boxing exhibitions

 professional basketball games

 Jai-alai and race tracks

2. Telephone and communication companies on

their overseas dispatch, message or
 conversation originating and transmitted from the
Philippines
[return to index]

Monthly Percentage Tax

Tax Form
BIR Form 2551M - Monthly Percentage Tax Return
Documentary Requirements
1. Duly issued Certificate of Creditable Tax Withheld at
Source (BIR Form 2307), if applicable
2. Duly approved Tax Debit Memo, if applicable
3. For amended return, proof of payment and the return
previously filed
4. Authorization letter, if filed by an authorized
representative
Procedures
1. Fill-up BIR Form 2551M in triplicate copies
2. If there is payment:


 Proceed to any Authorized Agent Bank (AAB)

located within the territorial jurisdiction of the
Revenue District Office (RDO) where the
taxpayer is registered and present the duly
accomplished BIR Form 2551M, together with the
 required attachments and payment. The
Percentage Tax shall be paid at the time the
return is filed by the taxpayer.
 In places where there are no AABs, the duly
accomplished BIR Form 2551M, together with the
required attachments and payment, shall be
filed/paid with the Revenue Collection Officer
(RCO) or duly authorized Treasurer of the city or
municipality where said business or principal
place is located.
 Receive the taxpayer's copy of BIR Form 2551M
duly validated/stamp-received by the
AAB/RCO/authorized City or Municipal
Treasurer.
For eFPS filers, you may click this Job Aid in filling
and payment thru said system.
1. If there is no payment:


 Proceed to the RDO where the taxpayer is

registered or with the concerned RCO and
present the duly accomplished BIR Form 2551M,
together with the required attachments.
 Receive the taxpayer's copy of BIR Form
2551M duly stamp-received by the RDO
representative.
Note: "No payment" returns filed late shall be imposed
the necessary penalties by the RDO, which shall be paid
at the concerned AAB.
When to File/Pay
 Manual Filing
Within twenty (20) days following the end of each month
 Electronic Filing
For taxpayers enrolled with the Electronic Filing and
Payment System (eFPS), in accordance with the schedule
set forth in RR No. 26-2002 as follows:
 Group A : Twenty five (25) days following the
end of the month
 Group B : Twenty four (24) days following the
end of the month
 Group C : Twenty three (23) days following the
end of the month
 Group D : Twenty two (22) days following end
the of the month
 Group E : Twenty one (21) days following the
end of the month
[return to index]

Quarterly Percentage Tax

Tax Form
BIR Form 2551Q - Quarterly Percentage Tax Return
Documentary Requirements
 1. Duly issued Certificate of Creditable Tax Withheld at
Source (BIR Form 2307), if applicable
2. Duly approved Tax Debit Memo, if applicable
3. For amended return, proof of payment and the return
previously filed
4. Authorization letter, if filed by an authorized representative
Procedures
1. Fill-up BIR Form 2551Q in triplicate copies.
2. If there is payment:
 Proceed to any AAB located within the territorial

jurisdiction of the RDO where the taxpayer is

registered and present the duly
accomplished BIR Form 2551Q, together with the
required attachments and payment. The
Percentage Tax shall be paid at the time the
return is filed by the taxpayer.
 In places where there are no AABs, the duly

accomplished BIR Form 2551Q, together with the

required attachments and payment, shall be
filed/paid with the RCO or duly Authorized
Treasurer of the city or municipality where said
business or principal place of business is located.

 Receive the taxpayer's copy of BIR Form

2551Q duly validated/stamp-received by the
AAB/RCO/authorized City or Municipal
Treasurer.
For eFPS filers, you may click this Job Aid in filing
and payment thru said system
 3. If there is no payment:
 Proceed to the Revenue District Office where the

taxpayer is registered or with the concerned RCO and

present the duly accomplished BIR Form 2551Q,
together with the required attachments.


 Receive the taxpayer's copy of BIR Form 2551Q duly

stamp-received by the RDO representative.
Note: "No payment" returns filed late shall be imposed the
necessary penalties by the RDO, which shall be paid at the
concerned AAB.

When to File/Pay
 Manual Filing
Within twenty (20) days after the end of each taxable
quarter
 Electronic Filing
Within twenty (20) days after the end of each
taxable quarter

[return to index]

Percentage Tax Return For Transactions Involving Shares

of Stocks Listed and Traded Through the Local Stocks
Exchange or Through Initial and/or Secondary Offering
Tax Form
BIR Form 2552 - Percentage Tax Return for Transactions
Involving Shares of Stocks Listed and Traded Through the
Local Stocks Exchange or Through Initial and/or Secondary
Public Offering
Documentary Requirements
1. Duly issued Certificate of Creditable Tax Withheld at Source
(BIR Form 2307), if applicable
2. Proof of Exemption for transactions not subject to tax, 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
Procedures
1. Fill-up BIR Form 2552 in triplicate copies.
2. If there is payment:


 Proceed to any AAB located within the territorial

jurisdiction of the RDO where the local stock
exchange is located and present the duly
accomplished BIR Form 2552, together with the
required attachments and payment. The Percentage
 Tax shall be paid at the time the return is filed by the
taxpayer.
 Receive the BIR Form 2552 taxpayer's copy duly

validated and stamp-received by the teller of the AAB

 For eFPS filers, you may click this Job Aid in filing
and payment thru said system.
3. If there is no payment:


 Proceed to the RDO having jurisdiction over the local

stock exchange and present the duly
accomplished BIR Form 2552, together with the
required attachments.
 Receive the BIR Form 2552 taxpayer's copy duly
stamp received by the RDO representative.
Note: "No payment" returns filed late shall be imposed the
necessary penalties by the RDO, which shall be paid at the
concerned AAB.
When to File/Pay
 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
 For tax on shares of stocks sold or exchanged through
primary offering - within 30 days from the date of listing in
the LSE
 For tax on shares of stocks sold or exchanged through
secondary public offering - within five (5) banking days
from the date of collection
 [return to index]

Tax Rates

Coverage Basis Tax Rate

Persons exempt from Gross Receipts on sale or 3%
VAT under Section 109 lease of goods, properties
(W) or services
Domestic carriers and Gross Receipts on 3%
keepers of garages transport of passengers by
land (except those thru
animal drawn two-
wheeled vehicles)
International
Carriers:
International air/shipping Gross Receipts from 3%
carriers doing business in transpot of cargo from the
the Philippines Philippines to another
country
Franchise Grantees:
Gas and water utilities Gross Receipts 2%
Radio and television Gross Receipts 3%
broadcasting companies
whose annual gross
receipts of the preceding
year do not exceed P
10,000,000 and did not
opt to register as VAT
taxpayer
Overseas dispatch, Gross Receipts 10%
message or conversation
originating from the
Philippines
Banks and non-bank On interest, commissions and
financing intermediaries discounts from lending activities as
performing quasi- well as income from financial leasing,
banking functions on the basis of remaining maturities
of instruments maturities of
instruments from which recipts are
derived:
• Maturity period is five 5%
years or less
• Maturity period is more 1%
than five years
On dividends and equity 0%
shares and net income of
subsidiaries
On royalties, rentals of 7%
property, real or personal,
profits from exchange and
all other items treated as
gross income under Sec.
32 of the Tax Code, as
amended
On net trading gains 7%
 within the taxable year of
foreign currency, debt
securities, derivatives and
other similar financial
instruments
Other non-bank financial Interest, commissions and 5%
intermediaries discounts and all other
items treated as gross
income under the Tax
Code, as amended
Interest, commissions and
discounts from lending activities, as
well as income from financial leasing
on the basis of remaining maturities
of instruments:
• Maturity period is 5%
five years or less
• Maturity period is more 1%
than five years
Life Insurance Total premiums collected 2%
Companies (except
purely cooperative
companies or
associations)
Agents of foreign insurance companies (except reinsurance
premium):
Insurance agents Total premiums collected 4%
authorized under the
Insurance Code to
procure policies of
insurance for companies
not authorized to transact
business in the
Philippines
Owners of property Total premiums paid 5%
obtaining insurance
directly with foreign
insurance companies
Proprietor, lessee or operator of the following:
Cockpits Gross receipts 18%
Cabarets, Night or Day Gross receipts 18%
Clubs videoke bars,
karaoke bars, karaoke
televisions, karaoke
boxes and music lounges
Boxing exhibitions Gross receipts 10%
Professional basketball Gross receipts 15%
games
Jai-alai and race track Gross receipts 30%
(operators shall withheld
tax on winnings)
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 of Shares of Stock Listed and Trased
through the Local Stock Exchange or Through Initial Public
Offering
Sale, barter, exchange or Gross selling price or ½ of 1%
other disposition of gross value in money
shares of stock listed and
traded through the Local
Stock Exchange other
than the sale by a dealer
of securities [Sec. 127
(A)]
Sale, barter or exchange Gross selling price or gross value in
or other disposition money
through initial public
offering (IPO) of shares Proportion of disposed shares to total
of stock in closely-held outstanding shares after the listing in
corporations [Sec. 127 the local stock exchange:
(B)]  Up to 25% 4%
 Over 25% but not 2%
over 33 1/3%
 Over 33 1/3% 1%

[return to index]
Related Revenue Issuances

REVENUE REGULATIONS (RRs)

Issuance Subject Date of
No. Issue
RR No. Supplementing Revenue Regulations August
8-2008 No. 9-2004, as Amended by Revenue 29, 2008
Regulations No. 10-2004, Clarifying
that the Transactions of the Bangko
Sentral ng Pilipinas (BSP) Entered
into the Exercise of its
Governmental/Regulatory Authority
are outside of the Coverage of the
Gross Receipts Tax Imposed Under
Sections 121 and 122 of the 1997
National Internal Revenue Code, as
Last Amended by Republic Act No.
9337
(published in Philippine Star on
August 30, 2008)
Digest | Full Text

RR No. Consolidated Regulations Prescribing May 2,

6-2008 the Rules on the Taxation of Sale, 2008
Barter, Exchange or Other Disposition
of Shares of Stock Held as Capital
Assets
(published in Manila Bulletin on
May 5, 2008)
Digest | Full Text
RR No. Prescribing the Rules on the Advance December
13-2007 Payment of Value-Added 5, 2007
Tax/Percentage Tax on the Transport
of Naturally Grown Planted Timber
Products
(published in Philippine Daily
Inquirer on Dec. 7, 2007)
Digest | Full Text | Annex A

RR No. Prescribing the Updated Minimum August 1,

9-2007 Monthly/Quarterly Gross Receipts in 2007
Computing the Percentage Tax of
Domestic Carriers and Keepers of
Garages
(published in Philippine Daily
inquirer on August 3, 2007)
Digest | Full Text

RR No Amending Certain Provisions of March 20,

4-2007 Revenue Regulations No. 16-2005, 2007
As Amended, Otherwise Known as
the Consolidated Value-Added Tax
Regulations of 2005
(published in Manila Bulletin on
March 22, 2007)
Digest | Full Text

RR No. To Further Implement the Provisions November

10-2004 of Section 4 of Republic Act No. 23, 2004
9238 Re-Imposing the Gross Receipts
 Tax on Other Non-Bank Financial
Intermediaries Beginning January 1,
2004 and hereby Amending for the
Purpose of Section 4 of Revenue
Regulations No. 9-2004 by Including
Pawnshops under the Classification of
Other Non-Bank Financial
Intermediaries
(published in Manila Standardon
Nov. 25, 2004)
Digest | Full Text

RR No. Implementing Certain Provisions of June 25,

9-2004 Republic Act No. 9238, Re-Imposing 2004
the Gross Receipts Tax on Banks and
Non-Bank Financial Intermediaries
Performing Quasi-Banking Functions
and Other Non-Bank Financial
Intermediaries Beginning January 1,
2004
(published in Manila Standard on
July 1, 2004)
Digest | Full Text

RR No. Amending Certain Provisions of June 27,

20-2003 Revenue Regulations No. 18-99, as 2003
amended by RR No. 12-2003,
Implementing Section 5 of Republic
Act No. 8424, Otherwise Known as
the Tax Reform Act of 1997, and
Other Pertinent Provisions of the
 National Internal Revenue Code of
1997 Imposing VAT in Services of
Banks, Non-Bank Financial
Intermediaries and Finance
Companies Beginning January 1,
2003 Pursuant to Section 1 of
Republic Act No. 9010
(published in Manila Bulletin on
June 28, 2003)
Digest | Full Text

RR No. Implementing the Provisions of April 29,

16-2003 Sections 6, 244 and 245 in Relation to 2003
Sections 24, 25, 27, 28, 51, 52, 106,
108, 114, 116 and 128 of the National
Internal Revenue Code of 1997 (Tax
Code), Imposing Advance Payment of
Value-Added Tax or Percentage Tax
and of Income Tax on "Privilege-
Store" and Prescribing and Reiterating
the Obligations of Organizer or
Exhibitor of Space of the Operation of
"Privilege-Store", as well as of the
"Privilege-Store" Operators
(published in Philippine Star on
April 30, 2003)
Digest | Full Text

RR No. Amending Revenue Regulations No. April 3,

14-2003 2-98, as amended, in order to Simplify 2003
 the Collection of Tax, Through
Withholding at the Source, on Sales
of Goods or Services Subject to the
3% Percentage Tax Under Section
116 of the Code, and/or to the Value-
Added Tax (VAT) Under Sections
106 and 108 of the Tax Code
(published in Manila Bulletin on
April 4, 2003)
Digest | Full Text | Annex A | Annex
B | Annex C | Annex D | Annex
E | Annex F

RR No. Amending Certain Provisions of March 11,

12-2003 Revenue Regulation No. 18-99 2003
Implementing Section 5 of Republic
Act No. 8424, Otherwise Known as
the Tax Reform Act of 1997, and
Other Pertinent Provisions of the
National Internal Revenue Code of
1997 Imposing VAT on Services of
Banks, Non-Bank Financial
Intermediaries and Finance
Companies, Beginning January 1,
2003 Pursuant to Section 1 of
Republic Act No. 9010
(published in Manila Bulletin on
March 12, 2003)
Digest | Full Text
RR No. Amending Further Revenue December
26-2002 Regulations No. 9-2001, as Amended 19, 2002
by Revenue Regulations No. 2-2002
and Revenue Regulations No. 9-2002,
Providing for the Staggered Filing of
Returns of Taxpayers Enrolled in the
Electronic Filing and Payment System
(eFPS) Based on Industry
Classification
(published in Manila Bulletin on
Dec. 20, 2002)
Digest | Full Text

RR No. Revenue Regulations Governing the October 7,

15-2002 Imposition of Income Tax on the 2002
Gross Philippine Billings, other
income of International Air Carriers
and Common Carrier's Tas, as well as
the Manner of Claiming Deductions
on Travel Expenses and Freight
Charges Incurred
(published in Manila Bulletin on
Oct. 11, 2002)
Digest | Full Text

RR No. Amending the Due Dates for the April 5,

4-2002 Filing/Issuance of Certain BIR Tax 2002
Returns/Forms, Clarifying the Form
type to be Used on Certain
 Transactions and Prescribing Certain
Attachments to Returns Filed
(published in Manila Bulletin on
April 7, 2002)
Digest | Full Text

RR No. Amendment to the Pertinent September

12-2001 Provisions of Revenue Regulations 10, 2001
No. 1-98, as Amended, Revenue
Regulations No. 2-98, as Amended,
and Revenue Regulations No. 6-2001,
Relative to the Revision of
Withholding Tax Rates on Certain
Income Payments Subject to
withholding Tax, the Deferment of the
New Deadline Dates for Filing
Selected Tax Returns, the Reporting
Requirements for Recipients of Talent
Fees, and for Other Purposes
Full Text

RR No. Amending Pertinent Provisions of August 1,

6-2001 Revenue Regulations Nos. 1-98, 2-98, 2001
as Amended and 7-95, as Amended,
and Revenue Memorandum Circular
No. 1-98 Relative to the Inclusion of
Additional Taxpayers to be Subject to
Final Withholding Tax, Revision of
the Withholding Tax Rates on Certain
Income Payments Subject to
 Creditable Withholding Tax, Time for
Filing of Various Tax Returns and
Payment of the Taxes Due Thereon
and Others
Full Text

RR No. Implementing Republic Act No. 8424, May 17,

2-1998 "An Act Amending the National 1998
Internal Revenue Code (NIRC), as
Amended" Relative to the
Withholding on Income Subject to the
Expanded Withholding Tax and Final
Withholding Tax, Withholding of
Income Tax on Compensation,
Withholding of Creditable VAT and
Other Percentage Taxes
Digest

REVENUE MEMORANDUM CIRCULARS (RMCs)

RMC Further Amending Certain Protions of June 7,
No. 49- RMC No. 30-2008, as Amended by 2010
2010 RMC No. 59-2008, on the Subject of
the Taxability of Insurance
Companies for Minimum Corporate
Income Tax (MCIT), Business Tax
and Documentary Stamp Tax
Purposes
Digest | Full Text
RMC Clarifies the Coverage and Taxability March 8,
No. 18- of Amusement Places under Section 2010
2010 125(b) of the National Internal
Revenue Code of 1997, as Amended
Digest | Full Text

RMC Clarifying the Instruments Embraced March 17,

No. 16- by the Term "Deposit Substitutes" 2009
2009 Under Revenue Regulations No. 8-
2008
Digest | Full Text

RMC Amends Certain Portions of RMC No. August 27,

No. 59- 30-2008 on the Taxability of 2008
2008 Insurance Companies for Minimum
Corporate Income Tax, Business Tax
and Documentary Stamp Tax
Purposes
Digest | Full Text

RMC Clarification of Issues Concerning June 20,

No. 46- Common Carriers by Air and Their 2008
2008 Agents Relative to the Revenu and
Receipt from Transport of Passengers,
Goods/Cargoes and Mail, and From
Excess Baggage
Digest | Full Text

RMC Clarifies the Taxability of Insurance April 8,

No. 30- companies for Minimum Corporate 2008
2008 Income Tax, Business Tas and
Documentary Stamp Tax Purposes
Digest | Full Text

RMC Guidelines and Policies Applicable to November

No. 73- the Business Tax Applicable to 26, 2004
2004 Pawnshops as a Result of the Issuance
of Revenue Regulations No. 10-2004,
Including Pawnshops Under the
Classification of Other Non-Bank
Financial Intermediaries in
Accordance with the Power Granted
the Commissioner of Internal
Revenue Under Section 4 of Republic
Act No. 9238
Digest | Full Text

RMC Settlement of the Value-Added Tax June 16,

No. 37- Liabilities of Pawnshops for Taxable 2004
2004 Years 1996 to 2002
Digest | Full Text | Annex A | Annex
1 | Annex 2

RMC Guidelines and Policies to February

No. 10- Supplement RMC No. 9-2004 issued 23, 2004
2004 in Relation to the Implementation of
Republic Act No. 9238 for Banks and
Non-Bank Financial Intermediaries,
 Specifically for the Re-imposition of
Gross Receipts Tax
Digest | Full Text

RMC Guidelines and Policies February

No. 9- Applicable to the Business Tax 19, 2004
2004 Applicable to Banks and Non-
Bank Financial Intermediaries
Performing Quasi-Banking
Functions and other Non-Bank
Financial Intermediaries as a
Result of the Enactment and
Effectivity of Republic Act No.
9238, An Act Amending
Certain Provisions of the
National Internal Revenue
Code of 1997, as amended,
by Excluding Several Services
from the Coverage of the
Value-Added Tax and Re-
Imposing the Gross Receipts
Tax on Banks and Non-Bank
Financial Intermediaries
Performing Quasi-Banking
Functions and Other Non-
Bank Financial Intermediaries
Beginning January 1, 2004
Digest | Full Text | RA No. 9238
RMO Clarifying the Tax Base for October
No. 69- Purposes of the Percentage 22, 2003
2003 (Gross Receipts ) Tax
Imposed under Sections 121
and 122 of the Tax Code
Digest | Full Text

RMC Waiver of Penalties on March 26,

No. 14- Persons Engaged in the 2003
2003 Practice of Profession or
Calling and Professional
Services Rendered by General
Professional Partnerships;
Services Rendered by Actors,
Actresses, Talents, Singers
and Emcees, Radio and
Television Broadcasters and
Choreographers, Musical,
Radio, Movie, Television and
Stage Directors, and
Professional Athletes; and,
Services Rendered by
Customs, Real Estate, Stock,
Immigration and Commercial
Brokers Becoming Liable to
VAT or Percentage Tax,
Whichever is Applicable,
Beginning January 1, 2003
 Who Failed to File Their
VAT/Percentage Tax Returns
for the Months of January and
February on the Due Dates
Specified Under Revenue
Regulations No. 1-2003, as
amended by Revenue
Regulations Nos. 3-2003 and
11-2003
Digest | Full Text
RMC Clarifying Certain Issues January
No. 6- Relative to the Services 22, 2003
2003 Rendered by Individual
Professional Practitioners,
General Professional
Partnerships, Entertainers,
and Professional Athletes Who
are Subject to the Value-
Added Tax or Percentage Tax,
Whichever is Applicable,
Beginning January 1, 2003
Digest | Full Text | Annex A

RMC Imposition of the Gross November

No. 51- Receipts Tax Under Sections 15, 2002
2002 121 and 122 of the Tax Code
on Items of Gross Income
Subject to Final Withholding
 Tax and Clarifying the Tax
Base thereof
Digest

[return to index]

Codal Reference
Sections 116 to 128 of the National Internal Revenue Code