PERCENTAGE TAX Description Percentage tax is a business tax imposed on persons or entities who sell or lease goods, properties

or services in the course of trade or business whose gross annual sales and/or receipts do not exceed P750,000 and who are not VAT-registered.

Who Are Required To File Percentage Tax Returns Any person who is not a VAT-registered person (persons exempt from VAT under Sec. 109z of the Tax Code)

Domestic carriers and keepers of garages, except owners of bancas and owners of animal drawn two- wheeled vehicle

Operators of international air and shipping carriers doing business in the Philippines Franchise grantees of electric, gas or water utilities

Franchise grantees of radio and/or television broadcasting companies whose gross annual receipts for the preceding year do not exceed Ten Million Pesos (P 10,000,000.00) and did not opt to register as VAT taxpayers

Operators of communication equipment sending overseas dispatch, messages, or conversations from the Philippines, except on services involving the following: o Government of the Philippines - for messages transmitted by the Government of the Republic of the Philippines or any of its political subdivisions and instrumentalities

Diplomatic services - for messages transmitted by any embassy and consular offices of a foreign government

International organizations - for messages transmitted by a public international organization or any of its agencies based in the Philippines enjoying privileges, exemptions and immunities which the government of the Philippine is committed to recognize pursuant to an international agreement

News Services - for messages from any newspaper, press association, radio or television newspaper broadcasting agency, or newsticker services to any other newspaper, press association, radio or television, newspaper, broadcasting agency or newsticker services, or to bonafide correspondents, which messages deal exclusively with the collection of news items for, or the dissemination of news items through public press, radio or television broadcasting or a newsticker service furnishing a general news service similar to that of the public press Banks and non-bank financial intermediaries and finance companies

Life insurance premiums

Agents of foreign insurance companies

Proprietor, lessee, or operator of cockpits, cabarets, night or day clubs, boxing exhibitions, professional basketball games, jai-alai and race tracks

Every stock broker who effected a sale, barter, exchange or other disposition of shares of stock listed and traded through the Local Stock Exchange (LSE) other than the sale by a dealer in securities

Corporate issuer / stock broker, whether domestic of foreign, engaged in the sale, barter, exchange or other disposition through Initial Public Offering (IPO) seller in secondary public offering of shares of stock in closely held corporations

Monthly Percentage Tax Tax Form BIR Form 2551 M - 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.

Copy of Certificate of Registration issued by Cooperative Development Authority for cooperatives and from the National Electrification Administration for electric cooperatives

4.

Previously filed return and proof of payment, for amended return

Procedures 1. Fill-up BIR Form 2551 M in triplicate copies 2. If there is payment: Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue District Office where taxpayer is required to register and present the duly accomplished BIR Form 2551 M, together with the required attachments and payment. (The Percentage Tax imposed 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 2551 M, together with the required attachments and payment, shall be filed/paid with the Revenue Collection Officer or duly Authorized Treasurer of the city or municipality where said business or principal place of business is located.

Receive taxpayer's copy of the duly stamped and validated form from the teller of the AAB/Revenue Collection Officer/duly Authorized City or

Municipal Treasurer. If there is no payment: Proceed to the Revenue District Office where taxpayer is required to register and present the duly accomplished BIR Form 2551M, together with the required attachments. Receive taxpayer's copy of the duly stamped and validated form from 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. Deadline

Manual Filing Not later than 20th day following the end of each month

Filing Through Electronic Filing and Payment System (eFPS) 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 the end of the month Group E - Twenty-One (21) days following the end of the month

Quarterly Percentage Tax Tax Form BIR Form 2551 Q - 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.

Copy of Certificate of Registration issued by Cooperative Development Authority for cooperatives and from the National Electrification Administration for electric cooperatives

4.

Previously filed return and proof of payment, for amended return

Procedures

1.

Fill-up BIR Form 2551 Q in triplicate copies.

2.

If there is payment:

Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue District Office where taxpayer is required to register and present the duly accomplished BIR Form 2551Q, together with the required attachments and payment. (The Percentage Tax imposed shall be paid at the time the return is filed by the taxpayer.)

In places where there are no AABs, the accomplished BIR Form 2551 Q, together with the required attachments and payment, shall be filed/paid with the Revenue Collection Officer or duly Authorized Treasurer of the city or municipality where said business or principal place of business is located.

Receive taxpayer's copy of the duly stamped and validated form from the teller of the AAB/Revenue Collection Officer/duly Authorized City or Municipal Treasurer. If there is no payment:

3.

Proceed to the Revenue District Office where taxpayer is required to register and present the duly accomplished BIR Form 2551Q, together with the required attachments. Receive taxpayer's copy of the duly stamped and validated form from

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. Deadline Manual Filing Not later than 20th day following the end of each quarter Filing Through Electronic Filing and Payment System (eFPS) Not later than the 20th day following the end of the quarter

Percentage Tax For Transactions Involving Shares of Stocks Listed and Traded Through the Local Stock 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 Stock Exchange or Through Initial and/or Secondary 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.

Previously filed return and proof of payment, for amended return

Procedures

1.

Fill-up BIR Form 2552 in triplicate copies.

2.

If there is payment: Proceed to the nearest Authorized Agents Banks (AABs) of the Revenue District Office 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 imposed shall be paid at the time the return is filed by the taxpayer.)

Receive taxpayer's copy of the duly stamped and validated form from the teller of the AAB

If there is no payment: Proceed to the Revenue District Office where the local stock exchange is located and present the duly accomplished BIR Form 2552, together with the required attachments.

Receive taxpayer's copy of the duly stamped and validated form from 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.

Deadline

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

Tax Rates

Coverage Persons exempt from VAT under Sec. 116 Domestic carriers and keepers of garages International Carriers: International air/shipping carriers doing business in the Philippines Franchise Grantees: Electric , gas and water utilities Radio and television broadcasting companies whose annual gross receipts of the preceding year do not exceed P 10,000,000 and did not opt to register asVAT taxpayer Banks and non-bank financing intermediaries

Basis Gross Sales or Receipts Gross Receipts

Tax Rate 3% 3%

Gross Receipts

3%

Gross Receipts Gross Receipts

2% 3%

Interest, commissions and discounts from lending activities as well as income from leasing on the basis of remaining maturities of

instruments:

Short term maturity (not over 2 years) Medium term (over 2 years but not over 4 years) Long Term Maturity
o

5%

3%

Over 4 years but not over 7 years Over 7 years

1%

0% 0%

On Dividends On royalties, rentals of properties, real or personal, profits from exchange and all other items treated as gross income under Sec. 32 of the Code On interest, discounts and other items of gross income paid to finance companies and other financial intermediaries not performing quasi banking functions Interest, commissions and discounts paid from their loan transactions from finance companies as well as income from financial leasing shall be taxed based on the remaining maturities of instruments: Short term maturity (not over 2 years)

5%

Finance Companies

5%

5%

Medium term (over 2 years but not over 4 years)

3%

Long Term Maturity

o

Over 4 years but not over 7 years Over 7 years

1%

0% 5%

Life Insurance Companies (except purely cooperative companies or associations) Agents of foreign insurance companies: (except reinsurance premium) Insurance agents authorized under the Insurance Code to procure policies of insurance for companies not authorized to transact business in the Phils. Owners of property obtaining insurance directly with foreign insurance companies Proprietors, lessee or operator of the following: Cockpits Cabarets, Night or Day Clubs Boxing exhibitions Professional basketball games Jai-alai and race track (operators shall withheld tax on winnings) Every stock broker who effected a sale, barter, exchange or other disposition of shares of stock listed and traded through the Local Stock Exchange (LSE) other than the sale by a dealer in securities A corporate issuer/stock

Total premiums collected

Total premium collected

10 %

Total premium collected

5%

Gross receipts Gross receipts Gross receipts Gross receipts Gross receipts

18% 18% 10% 15% 30%

Gross selling price or gross value in money of shares of stocks sold, bartered, exchanged or otherwise disposed Gross selling price or gross

of 1 %

broker, whether domestic of foreign, engaged in the sale, barter, exchange or other disposition through Initial Public Offering (IPO)/secondary public offering of shares of stock in closely held corporations

value of in money of shares of stocks sold, bartered, exchanged or otherwise disposed in accordance with the proportion of stocks sold, bartered or exchanged or after listing in the stock exchange Up to 25 % Over 25% but not over 33 1/3% Over 33 1/3 %

4% 2% 1%

Related Revenue Issuances RR No. 4-95, RR 7-95, RR No. 5-97, RR No. 2-98, RR No. 7-95, RR No. 6-2001, RR No. 12-2001, RR No. 4-2002, RR No. 26-2002, RR No. 14-2003, RR No. 9-2004, RR No. 10-2004, RMC No. 6-2003, RMC No. 73-2004 Codal Reference Sections 116 to 128 of the National Internal Revenue Code