Chapter 7

BUSINESS TAXES

BUSINESS
As defined by the Local
Government Code (LGC) of
1991, it pertains to trade or
commercial activity regularly
engaged in as a means of
livelihood or with a viewpoint
of obtaining profit.

TRANSACTION SUBJ.
TO TAX:
1. Commercial Activity
-sales of goods and
services
2. By a nonresident
foreign person
-without the rule of

SOME NON-BUSINESS
1. Sales of stocks in Stock
Exchange
-subj. To .5% or 1% of
other percentage tax (OPT)
2. Overseas dispatch subj. to
10% OPT
3. Horse-race winning subj.

CASUAL
SALE
Not subject to business tax but
subject to income tax
Example:
-sale of house as capital asset
-sale of personal car
-employment services

BUSINESS
TAXES
Impositions collected by the
National Government

BUSINESS TAXES
Value-Added Tax (VAT)
12% add. tax on sales price of
goods/services
Other Percentage Taxes
(OPT)
-3% based on gross
sales/receipts
Excise Taxes taxes

Business
Registration

Noncompliance to business
registration
will lead the business illegal

REGISTRATION
PROCEDURES
INITIAL

ANNUAL

-Application Forms
-a person will be
issued with only
one Taxpayers
Identification
Number (TIN), two
TIN will result to
criminal

-P500.00 upon
registration, and
every year on or
before the 31st
day of January
-each payment for
branch,
warehouse, and

EXEMPTION FROM
REGISTRATION FEE
1.
2.
3. SelfIndividua Overseas employe
ls
workers
d
earning
and
individua
purely
Cooperat
ls, not
compens
ives
exceedin
ation
g
income.
P100,000

VAT or NON-VAT
REGISTRATION
Value-Added Tax (VAT) 12%
tax
Non-VAT 3% Other
Percentage Tax

VAT OR NON-VAT
REGISTRATION

Mandat
ory

Option
al

Non-VAT

P1, 919,
500

When annual gross sales

are exceeded, husband
and wife shall be
considered separate

INVOICES AND
RECEIPTS
The taxpayer shall apply for Authority to
Print with the BIR

PROPRIETOR
S BUSINESS
NAME &
ADDRESS

VAT OR
NONVAT
NUMB
ER

AMOUNT
AND DATE
OF
TRANSACTI
ON

Lets review some concepts

Yellow

Blue

Red

Is the color of gold,

butter and ripe lemons.
In the spectrum of visible
light, yellow is found
between green and
orange.

Is the colour of the clear

sky and the deep sea. It
is located between violet
and green on the optical
spectrum.

Is the color of blood, and

because of this it has
historically been
associated with sacrifice,
danger and courage.

Yellow

Blue

Red

Is the color of gold,

butter and ripe lemons.
In the spectrum of visible
light, yellow is found
between green and
orange.

Is the colour of the clear

sky and the deep sea. It
is located between violet
and green on the optical
spectrum.

Is the color of blood, and

because of this it has
historically been
associated with sacrifice,
danger and courage.

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