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OTHER

PERCENTAGE
TAXES
TITLE V OF THE TAX CODE,
SECTIONS 117 TO 127
OTHER PERCENTAGE TAX (OPT)
Other Percentage Taxes (OPT) also called
“Non-VAT” is a business tax imposed with
varying rates (from 0% to 30%) on business
transactions specifically identified by law.
Generally imposed on sale of services.
SCOPE OF OPT

Below VAT threshold.


VAT Threshold exception – TV and
Radio franchise grantees.
Specific OPT – Section 117 to 127.
SALES TO GOVERNMENT BY
NON-VAT BUSINESS
The sale to government by a non-VAT business is
subject to the following withholding taxes by the
government:
1.Withholding percentage tax of 3%.
2.Creditable withholding income taxes (CWIT) of
a.1% on purchase of goods, or
b.2% on purchase of services
SALES TO GOVERNMENT BY
NON-VAT BUSINESS
The City of Manila obtained the following statement
of accounts from PC Works, a non-VAT business:
Purchase of 5 computers P100,000
Computer repairs 30,000

How much is the net proceeds to be received by


PC Works?
COMMON CARRIERS
Domestic carrier
1.By Air or Sea – VATable whether passengers or
cargoes
2.By Land
Transport of cargoes (forwarders or freight
companies) – VATable
Transport of passengers (PUJ, PUB, Taxi, Owners of
Garage) – Minimum Quarterly Gross Receipts or
Actual gross receipts whichever is higher multiplied
by 3% (Sec. 117, R. A. 8424)
COMMON CARRIERS
QUARTERLY MONTHLY
a. Jeepney for hire:
Manila and other cities P 2,400 P 800
Provincial 1,200 400
b. Public Utility bus:
Not exceeding 30 passengers 3,600 1,200
Exceeding 30 but not exceeding 50 6,000 2,000
Exceeding 50 passengers 7,200 2,400
c. Tax Cab:
Manila and other cities 3,600 1,200
Provincial 2,400 800
d. Car for hire:
With chauffeur 3,000 1,000
Without chauffeur 1,800 600
COMMON CARRIERS
A jeepney operator in Davao City, with two units, has the
following gross receipts for the period:

Unit 1 Unit 2
January P700 P1,500
February 800 1,000
March 400 2,500
April 2,000 0

Compute the percentage tax for the first quarter.


COMMON CARRIERS
International Air and Shipping Carrier
1.IC with Foreign Registry (Philippine origin)
Transport of passengers – VAT exempt
Transport of cargoes – 3% OPT
2.IC with Philippine Registry
Domestic transport – 12% VAT
International transport – zero rated VAT on gross
receipts
FRANCHISES
1.Gas and Water Utilities
Franchising services – 2% of gross receipts
Non-franchising - depends upon the threshold
2.Radio and TV Broadcasting Companies
Annual GR of preceding year exceeds P10M – vatable
Not exceeding P10M – subject to OPT unless registered
as Vatable; option irrevocable
3.Others - Vatable
OVERSEAS DISPATCH, MESSAGE
OR CONVERSATION
Originating from the Philippines is subject to 10% OPT on
peso value services; expense of the caller, withheld by the
service provider except:
1. Diplomatic services
2. International organizations
3. News services
4. Government
Domestic calls are subject to VAT.
BANKS & NON-BANK FINANCIAL
INTERMEDIARIES PERFORMING
QUASI-BANKING FUNCTIONS
1. On interest, commissions and discounts from lending
activities as well as income from financial leasing
 5 year rule – 5% on gross receipts
 Beyond 5 year rule – 1% on gross receipts
2. On dividends and equity share – 0%
3. Trading gains– 7% on net gain or loss
4. Other income – 7% on gross receipts
NON-BANK FINANCIAL INTERMEDIARIES NOT
PERFORMING QUASI-BANKING FUNCTIONS

1. On interest, commissions and discounts from


lending activities as well as income from financial
leasing
 5 year rule – 5% on gross receipts
 Beyond 5 year rule – 1% on gross receipts
2. On all other items treated as gross income under
the Tax Code – 5% on gross receipts
LIFE INSURANCE COMPANIES

1. Related services income – 2% of total premiums


collected
2. Unrelated services income – 12% VAT
3. Investment income
 Exempt if fund used is from insurance premiums
 7% GRT if funds used is from solicited or borrowed
funds
INSURANCE ACQUIRED FROM FOREIGN
COMPANIES NOT AUTHORIZED TO TRANSACT
BUSINESS IN THE PHILIPPINES

1. Through an agent – 4% of premium collected


2. Direct purchase by property owner – 2% on the
premium paid

Note: As amended by RA 10001


AMUSEMENT TAXES
 shall be collected from the gross receipts within of the
proprietor lessee or operator of the following amusement
activities irrespective whether or not any amount is charged
for admission:
1. Boxing – 10% on a tournament basis except exhibitions in any
division if contender and promoter are Filipinos (if
corporation, 60% are Filipino investors)
2. Professional Basketball – 15% per game
3. Cockpits/Cabarets/Clubs – 18% (including hotel discos and
KTVs)
4. Jai-alai and Race Tracks – 30% (including off track betting)
Note: Separate registration to avoid higher taxes.
HORSE RACE WINNINGS

1. Owners of winning horses – 10% of prize


2. Wagerers/Bettors:
 Ordinary – 10% on net winnings
 Special – 4% on net winnings; shall include double,
forcastiquinella and trifecta

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