Taxation Bir Website

Description
Capital Gains Tax is a tax imposed on the gains presumed to have been realized by the
seller from the sale, exchange, or other disposition of capital assets located in the
Philippines, including pacto de retro sales and other forms of conditional sale.
[return to index]
Final Capital Gains Tax for Onerous Transfer of Real Property Classified as Capital
Assets (Taxable and Exempt)
Tax Form
BIR Form 1706 Final Capital Gains Tax Return (For Onerous Transfer of Real Property
Classified as Capital Assets -Taxable and Exempt)
Documentary Requirements
1) One original copy and one photocopy of the Notarized Deed of Sale or Exchange
2) Photocopy of the Original Certificate of Title; Transfer Certificate of Title; or
Condominium Certificate of Title in case of a condo unit
3) Certified True Copy of the tax declaration on the lot and/or improvement during
nearest time of sale
4) Certificate of No Improvement issued by the Assessors office where the property
has no declared improvement, if applicable or Sworn Declaration/Affidavit of No
Improvement by at least one (1) of the transferees
5) Copy of BIR Ruling for tax exemption confirmed by BIR, if applicable
6) Duly approved Tax Debit Memo, if applicable
7) Sworn Declaration of Intent as prescribed under Revenue Regulations 13-99, if the
transaction is tax-exempt
8) Documents supporting the exemption
Additional requirements may be requested for presentation during audit of the tax case
depending upon existing audit procedures.
Procedures
File the Capital Gains Tax return in triplicate (two copies for the BIR and one copy for
the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue District where the
property is located. In places where there are no AAB, the return will be filed directly
with the Revenue Collection Officer or Authorized City or Municipal Treasurer.
One-Time Transaction (ONETT) taxpayers shall mandatorily use the eBIRForms in filing all of their tax
returns. They may opt to submit their tax returns manually using the eBIRForms Offline Package in the
RDO where the property is located or electronically through the use of the Online eBIRForms System.
(Sec. 3(2) RR No. 6-2014)
Tax Rates
For real property - 6%.
Deadline
Within 30 days after each sale, exchange, transfer or other disposition of real property.
[return to index]
Capital Gains Tax for Onerous Transfer of Shares of Stocks Not Traded Through
the Local Stock Exchange
Tax Form
BIR Form 1707 - Capital Gains Tax Return (For Onerous Transfer of Shares of Stocks
Not Traded Through the Local Stock Exchange)
1) One original copy and one photocopy of the Notarized Deed of Sale/ Exchange of
shares of stock
2) Photocopy of the Deed of Acquisition or proof of cost/ fair market value of the stocks
at the time of acquisition
3) Photocopy of certificate of shares of stock
4) Photocopy of evidences of expenses related to sale
5) Photocopy of Audited Financial Statements duly certified by an independent certified
public accountant with computation of fair market value per share at the time of sale.
Procedures
seller or transferor of stocks is registered. In places where there are no AAB, the return
will be filed directly with the Revenue Collection Officer or Authorized City or
Municipal Treasurer.
RDO where the seller or transferor of stocks is registered or electronically through the use of the Online
eBIRForms System. (Sec. 3(2) RR No. 6-2014)
Tax Rates
For Shares of Stocks Not Traded in the Stock Exchange
Not
over
- Any amount in excess of P100,000 - 10%
P100,000
5%
Deadline
Within 30 days after each sale or disposition of shares of stocks or real property. In case
of installment sale, the return shall be filed within 30 days following the receipt of the
first down payment and within 30 days following the subsequent installment payments.
Only one return shall be filed for multiple transactions within the day.
[return to index]
Annual Capital Gains Tax for Onerous Transfer of Shares of Stocks Not Traded
Through the Local Stock Exchange
Tax Form
BIR Form 1707A - Annual Capital Gains Tax Return (For Onerous Transfer of Shares of
Stocks Not Traded Through the Local Stock Exchange)
Procedures
seller or transferor of stocks is registered. In places where there are no AAB, the return
will be filed directly with the Revenue Collection Officer or Authorized City or
Municipal Treasurer.
Tax Rates
For Shares of Stocks Not Traded in the Stock Exchange
Not
over
P100,000
5%
Deadline
Individual Taxpayers On or before April 15 of each year covering all stock transactions
of the preceding taxable year
Corporate Taxpayers On or before the fifteenth (15) day of the fourth (4) month
following the close of the taxable year covering all transactions of the preceding taxable
year
Note: For onerous transfer of real property other than capital asset (including taxable and
exempt), a creditable withholding tax based on the gross selling price/total amount of
consideration or the fair market value determined in accordance with Section 6(E) of the
Code, whichever is higher, paid to the seller/owner for the sale, transfer or exchange of
real property, other than capital asset, shall be imposed upon the withholding agent/buyer.
(sec. 3 (j), RR NO. 6-2001)
[return to index]
Related Revenue Issuances

Revenue Regulations (RR) Nos. 2-1998, 8-1998, 4-1999, 13-1999, 7-2003, 17-2003, 302003, 4-2008, 6-2008, 5-2009, 6-2013, 6-2014
Revenue Memorandum Order (RMO) No. 15-2003
Revenue Memorandum Circular (RMC) No. 50-2003
[return to index]
Codal Reference
Sec. 24C, Sec. 24D, Sec. 27D(2), Sec. 27D(5), Sec. 28(A)(7)(c), Sec. 28(B)(5)(c) and
Sec. 39A of the National Internal Revenue Code (NIRC)
[return to index]
Frequently Asked Questions

1) What is meant by capital asset?
Capital asset means property held by the taxpayer (whether or not connected with his
trade or business), but does not include
a) stock in trade of the taxpayer or other property of a kind which would properly
be included in the inventory of the taxpayer if on hand at the close of the taxable
year;
or
b) property held by the taxpayer primarily for sale to customers in the ordinary
course
of
his
trade
or
business;
or
c) property used in the trade or business of a character which is subject to the
allowance for depreciation provided in subsection (F) of Sec. 34 of the Code; or
d) real property used in trade or business of the taxpayer.
2) What is meant by ordinary asset?
Ordinary asset refers to all properties specifically excluded from the definition of capital
assets under Sec. 39 (A)(1) of the NIRC.
3.) What is meant by "Stock classified as Capital Asset"? (Sec 2(a) of RR 6-2008)
This refers to stocks and securities held by taxpayers other than dealers in securities.
4.) What is meant by "Dealer in Securities"? (Sec 2(b) of RR 6-2008)
Dealer in Securities refers to a merchant of stocks or securities, whether an individual,
partnership or corporation, with an established place of business, regularly engaged in the
purchase of securities and the resale thereof to customers; that is one, who as merchant
buys securities and re-sells them to customers with a view to the gains and profits that
may be derived therefrom. "Dealer in securities" means any person who buys and sells
securities for his/her own account in the ordinary course of business (Sec. 3.4, SRC).
5.) What is meant by real property?
Real property shall have the same meaning attributed to that term under Article 415 of
Republic Act No. 386, otherwise known as the Civil Code of the Philippines.
6.) What does a real estate dealer refer to?

A real estate dealer refers to any person engaged in the business of buying and selling or
exchanging real properties on his own account as a principal and holding himself out as a
full or part-time dealer in real estate.
7.) What does a real estate developer refer to?
Real estate developer refers to any person engaged in the business of developing real
properties into subdivisions, or building houses on subdivided lots, or constructing
residential or commercial units, townhouses and other similar units for his own account
and offering them for sale or lease.
8.)What does a real estate lessor refer to?
Real estate lessor refers to any person engaged in the business of leasing or renting real
properties on his own account as a principal and holding himself out as a lessor of real
properties being rented out or offered for rent.
9.) Who are considered engaged in the real estate business?
Taxpayers who are considered engaged in the real estate business refer collectively to real
estate dealers, real estate developers and/or real estate lessors. A taxpayer whose primary
purpose of engaging in business, or whose Articles of Incorporation states that its primary
purpose is to engage in the real estate business shall be deemed to be engaged in the real
estate business.
10.) Who are considered not engaged in the real estate business?
Taxpayers who are considered not engaged in the real estate business refer to persons
other than real estate dealers, real estate developers and/or real estate lessors.
11.) Who are considered habitually engaged in the real estate business?
Real estate dealers or real estate developers who are registered with the Housing and
Land Use Regulatory Board (HULRB) or HUDCC
12.) How can you determine whether a particular real property is a capital asset or an
ordinary asset?
a) Real properties shall be classified with respect to taxpayers engaged in the real estate
business as follows:
i) All real properties acquired by the real estate dealer shall be considered as
ordinary assets.
ii) All real properties acquired by the real estate developer, whether developed or
undeveloped as of the time of acquisition, and all real properties which are held by
the real estate developer primarily for sale or for lease to customers in the ordinary
course of his trade or business or which would properly be included in the
inventory of the taxpayer if on hand at the close of the taxable year and all real
properties used in the trade or business, whether in the form of land, building, or
other improvements, shall be considered as ordinary assets.
iii) All real properties of the real estate lessor, whether land, building and/or
improvements, which are for lease/rent or being offered for lease/rent, or otherwise
for use or being used in the trade or business shall likewise be considered as
ordinary assets.
iv) All real properties acquired in the course of trade or business by a taxpayer
habitually engaged in the sale of real property shall be considered as ordinary
assets.
Note: Registration with the HLURB or HUDCC as a real estate dealer or developer
shall be sufficient for a taxpayer to be considered as habitually engaged in the sale
of real estate.
If the taxpayer is not registered with the HLURB or HUDCC as a real estate dealer
or developer, he/it may nevertheless be deemed to be engaged in the real estate
business through the establishment of substantial relevant evidence (such as
consummation during the preceding year of at least six (6) taxable real estate sale
transactions, regardless of amount; registration as habitually engaged in real estate
business with the Local Government Unit or the Bureau of Internal Revenue, etc.
A property purchased for future use in the business, even though this purpose is
later thwarted by circumstances beyond the taxpayers control, does not lose its
character as an ordinary asset. Nor does a mere discontinuance of the active use of
the property change its character previously established as a business property. (Sec
3(a)(4)of RR 7-2003)
b) In the case of taxpayer not engaged in the real estate business, real properties, whether
land, building, or other improvements, which are used or being used or have been
previously used in trade or business of the taxpayer shall be considered as ordinary
assets.
c) In the case of taxpayers who changed its real estate business to a non-real estate
business, real properties held by these taxpayer shall remain to be treated as ordinary
assets.
d) In the case of taxpayers who originally registered to be engaged in the real estate
business but failed to subsequently operate, all real properties acquired by them shall
continue to be treated as ordinary assets.
e) Real properties formerly forming part of the stock in trade of a taxpayer engaged in the
real estate business, or formerly being used in the trade or business of a taxpayer engaged
or not engaged in the real estate business, which were later on abandoned and became
idle, shall continue to be treated as ordinary assets. Provided however, that properties
classified as ordinary assets for being used in business by a taxpayer engaged in business
other than real estate business are automatically converted into capital assets upon
showing proof that the same have not been used in business for more than two years prior
to the consummation of the taxable transactions involving said properties
f) Real properties classified as capital or ordinary asset in the hands of the
seller/transferor may change their character in the hands of the buyer/transferee. The
classification of such property in the hands of the buyer/transferee shall be determined in
accordance with the following rules:
i) Real property transferred through succession or donation to the heir or donee
who is not engaged in the real estate business with respect to the real property
inherited or donated, and who does not subsequently use such property in trade or
business, shall be considered as a capital asset in the hands of the heir or donee.
ii) Real property received as dividend by the stockholders who are not engaged in
the real estate business and who do not subsequently use such property in trade or
business, shall be considered as a capital asset in the hands of the recipients even if
the corporation which declared the real property dividends is engaged in real estate
business.
iii) The real property received in an exchange shall be treated as ordinary asset in
the hands of the case of a tax-free exchange by taxpayer not engaged in real estate
business to a taxpayer who is engaged in real estate business, or to a taxpayer who,
even if not engaged in real estate business, will use in business the property
received in exchange.
g) In the case of involuntary transfers of real properties, including expropriations or
foreclosure sale, the involuntariness of such sale shall have no effect on the classification
of such real property in the hands of the involuntary seller, either as capital asset or
ordinary asset as the case may be.
13.) What is the basis in the valuation of property?
The value of the real property will be based on the selling price, fair market value as
determined by the Commissioner (zonal value) or the fair market value as shown in the
schedule of values of the Provincial or City Assessor, whichever is higher.
If there is no zonal value, the taxable base is whichever is higher of the gross selling price
per sales documents or the fair market value that appears in the latest tax declaration.
If there is an improvement, the FMV per latest tax declaration at the time of the sale or
disposition, duly certified by the City/Municipal Assessor shall be used. No adjustments
shall be added on the said value, provided that the tax declaration bears the upgraded fair
market value of the said property pursuant to Section 219 of R.A. No. 7160, otherwise
known as the Local Government Code of 1991 and the last paragraph of the Local
Assessment Regulations No. 1-92 dated October 6, 1992.
In case the tax declaration being presented was issued three (3) or more years prior to the
date of sale or disposition of the real property, the seller/transferor shall be required to
submit a certification from the City/Municipal Assessor whether or not the same is still
the latest tax declaration covering the said real property. Otherwise, the taxpayer shall
secure its latest tax declaration and shall submit a copy thereof duly certified by the said
Assessor. (RAMO 1-2001)
For shares of stocks, it will be based on the net capital gains realized from the sale, barter,
exchange or other disposition of shares of stocks in a domestic corporation, considered as
capital assets not traded through the local stock exchange.
14.) What is meant by "Net Capital Gains"? (Sec 2(o) of RR 6-2008)
"Net Capital Gain" means the excess of the gains from sales or exchanges of capital
assets over the losses from such sales or exchanges.
15.) What are the rules for the determination of amount and recognition of gain or loss in
the sale, barter, or exchange of shares of stock not traded through the Local Stock
exchange? (Sec 7(c ) of RR 6-2008)
(A.) Determination of Selling Price. In determining the selling price, the following
rules shall apply:
(a.1) In the case of cash sale, the selling price shall be the total consideration per
deed
of
sale.
(a.2) If the total consideration of the sale or disposition consists partly in money
and partly in kind, the selling price shall be sum of money and the fair market
value
of
the
property
received.
(a.3) In the case of exchange, the selling price shall be the fair market value of the
property
received.
(a.4) In case the fair market value of the shares of stock sold, bartered, or
exchanged is greater than the amount of money and/or fair market value of the
property received, the excess of the fair market value of the shares of stock sold,
bartered or exchanged over the amount of money and the fair market value of the
property, if any, received as consideration shall be deemed a gift subject to the
donor's tax under sec. 100 of the Tax Code, as amended.
(B.) Definition of "fair market value" of the Shares of Stock.
(b.1) In the case of listed shares which were sold, transferred or exchanged outside
of the trading system and/or facilities of the Local Stock Exchange, the closing
price on the day when the shares are sold, transferred, or exchanged. When no sale
is made in the Local Stock Exchange on the day when the Listed shares are sold,
transferred, or exchanged, the closing price on the day nearest to the date of sale,
transfer or exchange of the shares shall be the fair market value. Sec 2 of RR 62013
(b.2) In the case of shares of stock not listed and traded in the local stock
exchanges, the value of the shares of stock at the time of sale shall be the fair
market value. In determining the value of the shares, the Adjusted Net Asset
Method shall be used whereby all assets and liabilities are adjusted to fair market
values. The net of adjusted asset minus the liability values is the indicated value of
the equity.
The appraised value of real property at the time of sale shall be the higher of
(1) The fair market value as determined by the Commissioner, or
(2) The fair market value as shown in the schedule of valued fixed by
the Provincial
and
City
Assessors,
or
(3) The fair market value as determined by Independent Appraiser.
(b.3) In the case of a unit of participation in any association, recreation or
amusement club (such as golf, polo, or similar clubs), the fair market value thereof
shall be its selling price or the bid price nearest published in any newspaper or
publication of general circulation, whichever is higher.
(C.) Determination of Gain or Loss from Sale or Disposition of Shares of Stock. The
gain from the sale or other disposition Stock. The gain from the sale or other
disposition of shares of stock shall be the excess of the amount realized therefrom over
the basis or adjusted basis for determining gain, and the loss shall be the excess of the
basis or adjusted basis for determining loss over the amount realized. The amount
realized from the sale or other disposition of property shall be the sum of money received
plus the fair market value of the property (other than money) received, if any.
16.) What are the applicable tax rates of Capital Gains Tax under the National Internal
Revenue Code of 1997?
a) Real Properties - 6 %
b) For Shares of Stocks not Traded in the Stock Exchange, on the net Capital Gains
Not
over
P100,000
17.) Who are required to file the Final Capital Gains Tax return?
5%
Every person, whether natural or juridical, resident or non-resident, including estates and
trusts, who sells, transfers, exchanges or disposes real properties located in the
Philippines classified as capital assets, including pacto de retro sales and other forms of
conditional sales or shares of stocks in domestic corporations not traded through the local
stock exchange classified as capital assets.
18.) What is the procedure in the filing of Final Capital Gains Tax return?
File the Final Capital Gains Tax return in triplicate (two copies for the BIR and one copy
for the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue District where
the seller or transferor is registered, for shares of stocks or where the property is located,
for real property. In places where there are no AAB, the return will be filed directly with
the Revenue Collection Officer or Authorized City or Municipal Treasurer.
19.) Who/what are considered exempt from the payment of Final Capital Gains Tax?
Dealer in securities, regularly engaged in the buying and selling of

securities
An entity exempt from the payment of income tax under existing
investment incentives and other special laws
An individual or non-individual exchanging real property solely for shares
of stocks resulting in corporate control
A government entity or government-owned or controlled corporation
selling real property
If the disposition of the real property is gratuitous in nature
Where the disposition is pursuant to the CARP law
20.) Who are conditionally exempt from the payment of Final Capital Gains Tax?
Natural persons who dispose their principal residence, provided that the following criteria
are met:
The proceeds of the sale of the principal residence have been fully utilized
in acquiring or constructing new principal residence within eighteen (18)
calendar months from the date of sale or disposition;
The historical cost or adjusted basis of the real property sold or disposed
will be carried over to the new principal residence built or acquired;
The Commissioner has been duly notified, through a prescribed return,
within thirty (30) days from the date of sale or disposition of the persons
intention to avail of the tax exemption;
Exemption was availed only once every ten (10) years; and
There is no full utilization of the proceeds of sale or disposition. The
portion of the gain presumed to have been realized from the sale or
disposition will be subject to Capital Gains Tax.
In case of sale/transfer of principal residence, the Buyer/Transferee shall

withhold from the seller and shall deduct from the agreed selling
price/consideration the 6% capital gains tax which shall be deposited in
cash or managers check in interest-bearing account with an Authorized
Agent Bank (AAB) under an Escrow Agreement between the concerned
Revenue District Officer, the Seller and the Transferee, and the AAB to the
effect that the amount so deposited, including its interest yield, shall only
be released to such Transferor upon certification by the said RDO that the
proceeds of the sale/disposition thereof has, in fact, been utilized in the
acquisition or construction of the Seller/Transferors new principal
residence within eighteen (18) calendar months from date of the said sale
or disposition. The date of sale or disposition of a property refers to the
date of notarization of the document evidencing the transfer of said
property. In general, the term Escrow means a scroll, writing or deed,
delivered by the grantor, promisor or obligor into the hands of a third
person, to be held by the latter until the happening of a contingency or
performance of a condition, and then by him delivered to the grantee,
promise or obligee.
21.) What is a Certificate Authorizing Registration?

Certificate Authorizing Registration (CAR) is a certification issued by the Commissioner
or his duly authorized representative attesting that the transfer and conveyance of land,
buildings/improvements or shares of stock arising from sale, barter or exchange have
been reported and the taxes due inclusive of the documentary stamp tax, have been fully
paid.
With the implementation of the Electronic Certificate Authorizing Registration (eCAR)
System, the CAR shall now be electronically generated.
22.) What is eCAR System?
eCAR stands for Electronic Certificate Authorizing Registration. A web-based facility
that automates the generation of CAR with barcode, eCAR will also enable electronic
linkage between the BIR and the Land Registration Authority. (Participant Guide)
eCARs shall have a validity of one (1) year from date of issue. For other manually issued
CARs that are outstanding and not yet presented to the Register of Deeds, i.e., CARs
more than one (1) year from the date of issuance which are due for revalidation and
expired CARs which are more than two (2) years from the date of issuance, are not
anymore valid for presentation to the Registry of Deeds. The said CARs shall be replaced
with an eCAR by the concerned Revenue District Offices or Large Taxpayers Divisions.
A certification fee shall be charged for each released eCAR issued/reprinted after
affixture of P15.00 Documentary Stamp Tax on Certificates (Sec 188 of the NIRC of
1997) and the prescribed Certification Fee of One Hundred Pesos (P100.00) under
Executive Order No. 197 to the taxpayer/authorized representative.
23.) How do we determine the fair market value of shares of stocks not traded through the Local Stock
Exchange?
In determining the value of the shares, the Adjusted Net Asset Method shall be used whereby all assets
and liabilities are adjusted to fair market values. The net of adjusted asset minus the adjusted liability
value is the indicated value of the equity.
For purposes of this item, the appraised value of real property at the time of sale shall be the highest
among the following:
(a) The fair market value as determined by the Commissioner, or
(b) The fair market value as shown in the schedule of values fixed by the Provincial and City
Assessors, or
(c) The fair market value as determined by Independent Appraiser. (RR NO. 6-2013)
[return to index]
Description
Documentary Stamp Tax is a tax on documents, instruments, loan agreements and papers
evidencing the acceptance, assignment, sale or transfer of an obligation, right or property
incident thereto.
[return to index]
Tax Forms
BIR Form 2000 (Documentary Stamp Tax Declaration Return);
BIR Form 2000-OT Documentary Stamp Tax Declaration Return (ONE- TIME
TRANSACTIONS)
[return to index]
1) Photocopy of document(s) to which the documentary stamp shall be affixed, in case of
constructive affixture of Documentary Stamp Tax
2) Proof of exemption under special law, if applicable
4) Proof of payment of documentary stamp tax paid upon the original issue of the stock,
if applicable.
[return to index]
Tax Rates
Tax
Code
Section
174
Document
Original Issue of Shares of

Stock with par value
Original Issue of Shares of
Stock without par value
Taxable Unit
P200.00 or fraction
thereof
P200.00 or fraction
thereof
Tax Due Per

Unit
1.00
1.00
% of
Unit
.5%
.5%
Taxable Ba
Par value of shares

stocks
Actual consideratio
issuance of shares
Actual value repres

each share
Stock Dividend
175
Sales, Agreements to Sell,

Memoranda of Sales,
Deliveries or Transfer of
Shares or Certificates of
Stock
P200.00 or fraction
thereof
1.00
.5%
P200.00 or fraction
thereof
.75
3.75% Par value of such s
Stock without par value

25%
DST paid upon the

issuance of said sto
176
Bonds, Debentures,
P200.00 or fraction
Certificate of Stock or
thereof
Indebtedness issued in foreign
Countries
.75
3.75% Par value of such b

debentures, Certifi
Stock or Indebtedn
177
Certificate of Profits or
Interest in Property or
Accumulation
P200.00 or fraction
thereof
.50
.25%
178
Bank Checks, Drafts,

Certificate of Deposit not
bearing interest and other
On each Document
1.50
Face value of such

certificate / memor
Instruments
179
All Debt Instruments
P200.00 or fraction
thereof
1.00
.5%
Issue price of any s

instruments
180
All Bills of Exchange or

Drafts
P200.00 or fraction
thereof
.30
.15%
Face value of any s

of exchange or dra
181
Acceptance of Bills of
P200.00 or fraction
Exchange or order for the
thereof
payment of money purporting
to be drawn in a foreign
country but payable in the
Philippines
.30
.15%
Face value of such

exchange or order
Philippine equiva
such value, if expre
foreign currency
182
Foreign Bills of Exchange

and Letters of Credit
P200.00 or fraction
thereof
.30
.15%
Face value of such

exchange or letter o
or the Philippine eq
of such value, if ex
in foreign currenc
183
Life Insurance Policies
If the amount of
insurance does not
exceed P100,000.00
exempt
If the amount of
insurance exceeds
10.00
P100,000.00 but does
not exceed
P300,000.00
Amount of Insuran
Amount of Insuran
Amount of Insuran
If the amount of
insurance exceeds
25.00
not exceed
P500,000.00
If the amount of
insurance exceeds
50.00
not exceed
P750,000.00
If the amount of
insurance exceeds
75.00
not exceed
P1,000,000.00
Amount of Insuran
Amount of Insuran
Amount of Insuran
If the amount of
insurance exceeds
P1,000,000.00
100.00
184
Policies Of Insurance upon

Property
P4.00 premium or
fraction thereof
.50
12.5% Premium charged
185
Fidelity Bonds and other

Insurance Policies
P4.00 premium or
fraction thereof
.50
12.5% Premium charged
186
Policies of Annuities or other P200.00 or fraction

instruments
thereof
.50
.25%
Premium or install
payment or contrac
collected
Premium or contrib
collected
Pre-Need Plans
P200.00 or fraction
thereof
.20
.10%
P4.00 or fraction
thereof
.30
7.5%
Premium charged
10%
Cost of the ticket
187
Indemnity Bonds
188
Certificates of Damage or
Each Certificate
otherwise and Certificate or
document issued by any
customs officers, marine
surveyor, notary public and
certificate required by law or
by rules and regulations of a
public office
15.00
189
Warehouse Receipts (except if Each Receipt

value does not exceed
P200.00)
15.00
190
Jai-alai, Horse Race Tickets,

lotto or Other Authorized
Number Games
.10
P1.00 cost of ticket
Cost of the ticket

Additional P0.10 on
every P1.00 or fraction
thereof if cost of
ticket exceeds P1.00
191
Bills of Lading or
If the value of such
1.00
Receipts(except charter party) goods exceeds
P100.00 and does not
exceed P1,000.00
Value of such good
If the value exceeds

P1,000.00
Value of such good

10.00
Freight tickets
covering goods,
merchandise or effects Exempt
carried as
accompanied baggage
of passengers on land
and water carriers
primarily engaged in
the transportation of
passengers
192
Proxies(except proxies issued Each proxy

affecting the affairs of
associations or corporations,
organized for religious,
charitable or literary
purposes)
15.00
193
Powers of Attorney(except
Each Document
acts connected with the
collection of claims due from
or accruing to the
Government of the Republic
of the Philippines, or the
government of any province,
city or Municipality)
5.00
194
Lease and other Hiring

agreements or memorandum
or contract for hire, use or
rent of any land or tenements
or portions thereof
195
196
First 2,000 or
3.00
fractional part thereof
For every P1,000 or
fractional part thereof 1.00
in excess of the first
P2,000 for each year
of the term of the said
contract or agreement
.15%
.1%
Mortgages Pledges of lands, First 5,000

20.00
estate, or property and Deeds
of Trust
On each P5,000 or
10.00
fractional part thereof
in excess of 5,000
.4%
Deed of Sale, instrument or
1.5%
First 1,000
15.00
Amount Secured
Amount Secured
.2%
Consideration or F
writing and Conveyances of

Real Property (except grants,
patents or original certificate
of the government)
197
Charter parties and Similar

Instruments
Market Value, whic

higher (if governm
party, basis shall be
consideration)
For each additional

P1,000 or fractional
part thereof in excess
of P1,000
15.00
1,000 tons and below
P500.00 for the

first 6 months
Plus P50 each
month or
fraction thereof
in excess of 6
months
1,001 to 10,000 tons
Over 10,000 tons
198
Stamp Tax on Assignments

and Renewals or Continuance
of Certain Instruments
[return to index]
P1,000 for the

first 6
months Plus
P100 each
month or
fraction thereof
in excess of 6
months
P1,500 for the
first 6
months Plus
P150 each
month or
fraction thereof
in excess of 6
months
At the same rate
as that imposed
on the original
instrument.
1.5%
Consideration or F
Market Value, whic
higher (if governm
party, basis shall be
consideration)
Registered gross to
Registered gross to
Registered gross to
Procedures
File BIR Form No. 2000 or BIR Form No. 2000-OT in triplicate (two copies for the BIR
and one copy for the taxpayer) with the Authorized Agent Bank (AAB) in the Revenue
District where the seller or transferor is registered, for shares of stocks or where the
property is located, for real property. In places where there are no AAB, the return will be
filed directly with the Revenue Collection Officer or Authorized City or Municipal
Treasurer.
RDO where the seller or transferor is registered, for shares of stocks or where the property is located, for
real property or electronically through the use of the Online eBIRForms System. (Sec. 3(2) RR No. 62014)
Submit all documentary requirements and proof of payment to the Revenue District
Office having jurisdiction over the place of residence of the seller.
[return to index]
Deadlines
The Documentary Stamp Tax return (BIR Form 2000) shall be filed in triplicate (two
copies for the BIR and one copy for the taxpayer) within five (5) days after the close of
the month when the taxable document was made signed, issued, accepted or transferred;
upon remittance by Collection Agents of collection from sale of loose stamps. The
Documentary Stamp Tax shall be paid upon filing of the return.
[return to index]

Revenue Regulations (RR) Nos. 9-2000, 6-2001, 13-2004, 7-2009, 6-2014
Revenue Memorandum Order (RMO) Nos. 8-1998, 15-2001, 13-2008, 14-2008
Revenue Memorandum Circular (RMC) Nos. 1-2010, 24-2010, 51-2010, 24-2011, 462014
[return to index]
Codal Reference
Sec. 173 to Sec. 201 of the National Internal Revenue Code
[return to index]

1) Who are required to file Documentary Stamp Tax Declaration Return?
a) In case of constructive affixture of documentary stamps, by the persons making,
signing, issuing, accepting or transferring documents, instruments, loan agreements and
papers, acceptances, assignments, sales and conveyances of the obligation, right or
property incident thereto wherever the document is made, signed, issued, accepted or
transferred when the obligation or right arises from Philippine sources or the property is
situated in the Philippines at the same time such act is done or transaction had;
b) By using the web-based Electronic Documentary Stamp Tax (eDST) System in the
payment/remittance of its/his/her DST liabilities and the affixture of the prescribed
documentary stamp on taxable documents; and
c) By Revenue Collection Agent, for remittance of sold loose documentary stamps.
Note: Wherever one party to the taxable document enjoys exemption from the tax
imposed, the other party who is not exempt will be the one directly liable to file
Documentary Stamp Tax Declaration and pay the applicable stamp tax.
2) Where is the Documentary Stamp Tax Declaration Return filed?
In the Authorized Agent Bank (AAB) within the territorial jurisdiction of the RDO which
has jurisdiction over the residence or principal place of business of the taxpayer or where
the property is located in case of sale of real property or where the Collection Agent is
assigned. In places where there is no Authorized Agent Bank, the return will be filed with
the Revenue Collection Officer or duly authorized City or Municipal Treasurer where the
taxpayer's residence or principal place of business is located or where the property is
located in case of sale of real property or where the Collection Agent is assigned.
3) What are the documents/papers not subject to Documentary Stamp Tax? (sec. 9, RR
No. 13-2004)
Policies of insurance or annuities made or granted by a fraternal or beneficiary

society, order, association or cooperative company, operated on the lodge system
or local cooperation plan and organized and conducted solely by the members
thereof for the exclusive benefit of each member and not for profit
Certificates of oaths administered by any government official in his official

capacity or acknowledgement by any government official in performance of his
official duty
Written appearance in any court by any government official in his official
capacity
Certificates of the administration of oaths to any person as to the authenticity of
any paper required to be filed in court by any person or party thereto, whether the
proceedings be civil or criminal
Papers and documents filed in court by or for the national, provincial, city or
municipal governments
Affidavits of poor persons for the purpose of proving poverty
Statements and other compulsory information required of persons or corporations
by the rules and regulations of the national, provincial, city or municipal
government exclusively for statistical purposes and which are wholly for the use
of the Bureau or office in which they are filed, and not at the instance or for the
use or benefit of the person filing them
Certified copies and other certificates placed upon documents, instruments and
papers for the national, provincial, city or municipal governments made at the
instance and for the sole use of some other branch of the national, provincial, city
or municipal governments
Certificates of the assessed value of lands, not exceeding P200 in value assessed,
furnished by the provincial, city or municipal Treasurer to applicants for
registration of title to land
Borrowing and lending of securities executed under the Securities Borrowing and
Lending Program of a registered exchange, or in accordance with regulations
prescribed by the appropriate regulatory authority: Provided, however, That any
borrowing or lending of securities agreement as contemplated hereof shall be duly
covered by a master securities borrowing and lending agreement acceptable to the
appropriate regulatory authority, and which agreement is duly registered and
approved by the Bureau of Internal Revenue (BIR)
Loan agreements or promissory notes, the aggregate of which does not exceed
Two hundred fifty thousand pesos (P250,000), or any such amount as may be
determined by the Secretary of Finance, executed by an individual for his
purchase on installment for his personal use or that of his family and not for
business or resale, barter or hire of a house, lot, motor vehicle, appliance or
furniture: Provided, however, That the amount to be set by the Secretary of
Finance shall be in accordance with a relevant price index but not to exceed ten
percent (10%) of the current amount and shall remain in force at least for three (3)
years
Sale, barter or exchange of shares of stock listed and traded through the local
stock exchange (R.A 9648)
Assignment or transfer of any mortgage, lease or policy of insurance, or the
renewal or continuance of any agreement, contract, charter, or any evidence of
obligation or indebtedness, if there is no change in the maturity date or remaining
period of coverage from that of the original instrument.
Fixed income and other securities traded in the secondary market or through an
exchange.
Derivatives: Provided, That for purposes of this exemption, repurchase
agreements and reverse repurchase agreements shall be treated similarly as
derivatives
Interbranch or interdepartmental advances within the same legal entity
All forebearances arising from sales or service contracts including credit card and
trade receivables: Provided, That the exemption be limited to those executed by
the seller or service provider itself.
Bank deposit accounts without a fixed term or maturity
All contracts, deeds, documents and transactions related to the conduct of
business of the Bangko Sentral ng Pilipinas
Transfer of property pursuant to Section 40(C)(2) of the National Internal
Revenue Code of 1997, as amended
Interbank call loans with maturity of not more than seven (7) days to cover
deficiency in reserves against deposit liabilities, including those between or
among banks and quasi-banks
4) What are the implications of failure to stamp taxable documents?
The untaxed document will not be recorded, nor will it or any copy thereof or any
record of transfer of the same be admitted or used in evidence in court until the
requisite stamp or stamps have been affixed thereto and cancelled
No notary public or other officer authorized to administer oaths will add his jurat
or acknowledgment to any document subject to Documentary Stamp Tax unless
the proper documentary stamps are affixed thereto and cancelled.
5) What is Electronic Documentary Stamp Tax (eDST) System? (sec. 5 (1), RR No. 72009)
The eDST is a web-based application created for taxpayers and the BIR that is capable of
affixing a secured documentary stamp on the taxable documents as defined under the
appropriate provisions under Title VII of the National Internal Revenue Code of 1997, as
amended, thru the use of a computer unit, any laser printer with at least 1200 dpi
resolution, and Internet Explorer 7.0 It is also capable of providing a 3-layer watermark
on stamps for added security.
6) Is DST Law applicable on Electronic Documents? (sec. 10, RR No. 13-2004)
The DST rates as imposed under the Code, as amended by R.A. 9243 shall be applicable
on all documents not otherwise expressly exempted by the said law, notwithstanding the
fact that they are in electronic form. As provided for by R.A. 8792, otherwise known as
the Electronic Commerce Act, electronic documents are the functional equivalent of a
written document under existing laws, and the issuance thereof is therefore tantamount to
the issuance of a written document, and therefore subject to DST.
7) What are the inclusions of a debt instrument? (sec. 5, RR No. 13-2004)

Debt Instrument shall mean instruments representing borrowing and lending
transaction including but not limited to:
debentures,
certificates of indebtedness,
due bills,
bonds,
loan agreements, including those signed abroad wherein the object of the
contract is located or used in the Philippines,
instruments and securities issued by the government or any of its
instrumentalities,
deposit substitute debt instruments,
certificates or other evidences of deposits that are drawing
instrument significantly higher than the regular savings deposit taking into
consideration the size of the deposit and the risks involved,
certificates or other evidences of deposits that are drawing interest and
having a specific maturity date,
promissory notes, whether negotiable or non-negotiable, except bank
notes issued for circulation.
8) Is any document, transaction or arrangement entered into under Financial Lease

subject to Documentary Stamp Tax? (RMC No. 46-2014)
Financial lease is akin to a debt rather than a lease. A nature of an obligation than a lease
of personal property. The mere act of extending credit is already a means of facilitating
an obligation or advancing in behalf of the lessee certain property in lieu of cash in
exchange for a definitive amortization to be paid to the lessor with profit margin
included. Section 179 of the NIRC, as amended, covers all debt instruments. Therefore,
being a nature of an obligation, any document, transaction or arrangement entered into
under financial lease is subject to DST under such Section of the NIRC, as amended.
Description
Donors Tax is a tax on a donation or gift, and is imposed on the gratuitous transfer of
property between two or more persons who are living at the time of the transfer. It shall
apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect
and whether the property is real or personal, tangible or intangible.
[return to index]
Tax Form
BIR Form 1800 Donors Tax Return

[return to index]
The following requirements must be submitted upon field or office audit of the tax case
before the Tax Clearance Certificate/Certificate Authorizing Registration can be released:
1. Deed of Donation
2. Sworn Statement of the relationship of the donor to the donee
3. Proof of tax credit, if applicable
4. Certified true copy(ies) of the Original/Transfer/Condominium Certificate of Title
(front and back) of lot and/or improvement donated, if applicable
5. Certified true copy(ies) of the latest Tax Declaration (front and back pages) of lot
and/or improvement, if applicable
6. Certificate of No Improvement issued by the Assessors office where the properties
have no declared improvement, if applicable
7. Proof of valuation of shares of stocks at the time of donation, if applicable
For listed stocks - newspaper clippings or certification issued by the Stock Exchange as to the par
value per share
For unlisted stocks - Audited Financial Statements duly certified by an independent certified public
accountant with computation of fair market value per share at the time of donation.
8. Proof of valuation of other types of personal properties, if applicable

9. Proof of claimed deductions, if applicable
10. Copy of Tax Debit Memo used as payment, if applicable
Additional requirements may be requested for presentation during audit of the tax case depending upon
existing audit procedures.
[return to index]
Tax Rates
Effective January 1, 1998 to present (Republic Act No. 8424)

Net Gift Over
But not Over
The Tax Shall be
Plus
Of the Excess Over
100,000.00
exempt
100,000.00
200,000.00
2%
100,000.00
200,000.00
500,000.00
P 2,000.00
4%
200,000.00
500,000.00
1,000,000.00
14,000.00
6%
500,000.00
1,000,000.00
3,000,000.00
44,000.00
8%
1,000,000.00
3,000,000.00
5,000,000.00
204,000.00
10%
3,000,000.00
5,000,000.00
10,000,000.00
404,000.00
12%
5,000,000.00
10,000,000.00
and over
1,004,000.00
15%
10,000,000.00
Notes:
1. Rate applicable shall be based on the law prevailing at the time of donation.
2. When the gifts are made during the same calendar year but on different dates, the
donor's tax shall be computed based on the total net gifts during the year.
Donation made to a stranger is subject to 30% of the net gift. A stranger is a person
who is not a:
brother, sister (whether by whole or half blood), spouse, ancestor

and lineal descendants; or
relative by consanguinity in the collateral line within the fourth
degree of relationship.
Effective July 28, 1992 to December 31, 1997 (Republic Act No. 7499)
Net Gift Over
But not Over
The Tax Shall be
50,000.00
exempt
50,000.00
100,000.00
1.5%
100,000.00
200,000.00
P 750.00
Plus
Of the Excess Over
50,000.00
3%
100,000.00
200,000.00
500,000.00
3,750.00
5%
200,000.00
500,000.00
1,000,000.00
18,750.00
8%
500,000.00
1,000,000.00
3,000,000.00
58,750.00
10%
1,000,000.00
3,000,000.00
5,000,000.00
258,750.00
15%
3,000,000.00
5,000,000.00
and over
558,750.00
20%
5,000,000.00
Donation made to a stranger is subject to 10% of the net gift. A stranger is a person who
is not a:
brother, sister (whether by whole or half blood), spouse, ancestor and

lineal descendants; or
relative by consanguinity in the collateral line within the fourth degree of
relationship.
Effective January 16, 1981 to July 27, 1992 (Presidential Decree No. 1773)
Net Gift Over
But not Over
The Tax Shall be
Plus
Of the Excess Over
1,000.00
exempt
1,000.00
50,000.00
1.5%
50,000.00
75,000.00
P 735.00
2.5%
50,000.00
75,000.00
100,000.00
1,360.00
3%
75,000.00
100,000.00
150,000.00
2,110.00
6%
100,000.00
150,000.00
200,000.00
5,110.00
9%
150,000.00
200,000.00
300,000.00
9,610.00
12%
200,000.00
300,000.00
400,000.00
21,610.00
15%
300,000.00
400,000.00
500,000.00
36,610.00
18%
400,000.00
500,000.00
625,000.00
54,610.00
21%
500,000.00
625,000.00
750,000.00
80,860.00
24%
625,000.00
750,000.00
875,000.00
110,860.00
28%
750,000.00
875,000.00
1,000,000.00
145,860.00
32%
875,000.00
1,000.00
1,000,000.00
2,000,000.00
185,860.00
36%
1,000,000.00
2,000,000.00
3,000,000.00
545,860.00
38%
2,000,000.00
925,860.00
40%
3,000,000.00
3,000,000.00
Donation made to a stranger shall be either the amount computed in accordance with the
preceding schedule or twenty percent (20%) of the net gifts, whichever is higher. A
stranger is a person who is not a:
brother, sister (whether by whole or half blood), spouse, ancestor and

lineal descendant; or
relative by consanguinity in the collateral line within the fourth degree of
relationship.
Please note that the donors tax rates will vary depending on the law applicable at the
time of the gift. The pertinent laws are as follow:
Commonwealth Act. No. 466 effective July 1, 1939 to September 14,

1950
Republic Act No. 579 effective September 15, 1950 to August 3, 1969
Republic Act No. 6110 effective August 4, 1969 to December 31, 1972
Presidential Decree No. 69 effective January 1, 1973 to January 15, 1981
Presidential Decree No. 1773 effective January 16, 1981 to July 27,
1992
Republic Act No. 7499 effective July 28, 1992 to December 31, 1997
Republic Act No. 8424 effective January 1, 1998 to present
[return to index]
Procedures
File the return in triplicate (two copies for the BIR and one copy for the taxpayer) with
any Authorized Agent Bank (AAB) of the RDO having jurisdiction over the place of the
domicile of the donor at the time of the transfer. In places where there are no AAB, the
return will be filed directly with the Revenue Collection Officer or duly Authorized City
or Municipal Treasurer where the donor was domiciled at the time of the transfer, or if
there is no legal residence in the Philippines, with Revenue District No. 39 - South
Quezon City.
In the case of gifts made by a non-resident alien, the return may be filed with Revenue
District No. 39 - South Quezon City, or with the Philippine Embassy or Consulate in the
country where donor is domiciled at the time of the transfer.
Submit all documentary requirements and proof of payment to the Revenue District
Office having jurisdiction over the place of residence of the donor.
One-Time Transaction (ONETT) taxpayers shall mandatorily use the eBIRForms in filing all of
their tax returns. They may opt to submit their tax returns manually using the eBIRForms
Offline Package in the RDO having jurisdiction over the place of the domicile of the donor at
the time of the transfer or electronically through the use of the Online eBIRForms System.
(Sec. 3(2) RR No. 6-2014)
Please note that the time of filing and payment will vary depending on the law applicable
at the time of gift.
[return to index]
Deadlines
Within thirty days (30) after the date the gift (donation) is made. A separate return will be
filed for each gift (donation) made on the different dates during the year reflecting therein
any previous net gifts made during the same calendar year.
If the gift (donation) involves conjugal/community/property, each spouse will file
separate returns corresponding to his/ her respective share in the conjugal/community
property. This rule will also apply in the case of co-ownership over the property.
[return to index]

Revenue Regulations Nos. 2-2003, 6-2013, 6-2014
Revenue Memorandum Circular Nos. 63-2009 and 53-2013
[return to index]
Codal Reference
Related Laws
Republic Act Nos. 579, 3062, 3676, 3850, 6110, 7499, 8424, 9159, 9275, 9500, 9647,
10066, 10072, 10073, 10083, 10174, 10390, 10618
Presidential Decree Nos. 69, 181, 205, 292, 294, 1773
Executive Order No. 419
Commonwealth Act No. 466
[return to index]

1. Who are required to file the Donors Tax Return?
Every person, whether natural or juridical, resident or non-resident, who transfers or
causes to transfer property by gift, whether in trust or otherwise, whether the gift is direct
or indirect and whether the property is real or personal, tangible or intangible.
2. What donations are tax exempt?
A. In the Case of Gifts made by a Resident (Sec. 101 (A), NIRC as amended)
Dowries or donations made on account of marriage before its celebration

or within one year thereafter, by parents to each of their legitimate,
recognized natural, or adopted children to the extent of the first P10,000
Gifts made to or for the use of the National Government or any entity
created by any of its agencies which is not conducted for profit, or to any
political subdivision of the said Government
Gifts in favor of an educational and/or charitable, religious, cultural or
social welfare corporation, institution, accredited non-government
organization, trust or philantrophic organization or research institution or
organization, provided not more than 30% of said gifts will be used by
such donee for administration purposes
B. In the Case of Gifts Made by a Nonresident not a Citizen of the Philippines (Sec. 101
(B), NIRC as amended)
Gifts made to or for the use of the National Government or any entity
created by any of its agencies which is not conducted for profit, or to any
political subdivision of the said Government
Gifts in favor of an educational and/or charitable, religious, cultural or
social welfare corporation, institution, accredited non-government
organization, trust or philantrophic organization or research institution or
organization, provided not more than 30% of said gifts will be used by
such donee for administration purposes
C. Tax Credit for Donor's Taxes Paid to a Foreign Country (Sec. 101 (C), NIRC as
amended)
In General. - The tax imposed by this Title upon a donor who was a citizen
or a resident at the time of donation shall be credited with the amount of
any donor's tax of any character and description imposed by the authority
of a foreign country.
Limitations on Credit. - The amount of the credit taken under this Section
shall be subject to each of the following limitations:
- The amount of the credit in respect to the tax paid to any country shall not
exceed the same proportion of the tax against which such credit is taken,
which the net gifts situated within such country taxable under this Title bears
to
his
entire
net
gifts;
and
- The total amount of the credit shall not exceed the same proportion of the
tax against which such credit is taken, which the donor's net gifts situated
outside the Philippines taxable under this title bears to his entire net gifts.
3. What are the bases in the valuation of property?

If the gift is made in property, the fair market value at that time will be considered the
amount of gift.
In case of real property, the taxable base is the fair market value as determined by the
Commissioner of Internal Revenue (Zonal Value) or fair market value as shown in the
latest schedule of values fixed by the provincial and city assessor (MV per Tax
Declaration), whichever is higher. (Sec. 88 and 102, NIRC as amended)
If there is no zonal value, the taxable base is the fair market value that appears in the tax
declaration at the time of the gift
4. For purposes of Donors Tax, what does the term Net Gift mean?
For purposes of the donors tax, NET GIFT shall mean the net economic benefit from
the transfer that accrues to the donee. Accordingly, if a mortgaged property is transferred
as a gift, but imposing upon the donee the obligation to pay the mortgage liability, then
the net gift is measured by deducting from the fair market value of the property the
amount of mortgage assumed. (sec. 11, RR No. 2-2003)
5. Under R.A. No. 7166, any contribution in cash or in kind to any candidate or political
party or coalition of parties for campaign purposes shall not be subject to the payment of
any gift tax. What instance will it be subject to Donors Tax?
Those contributions in cash or in kind NOT duly reported to the Commission on
Elections (COMELEC) shall not be subject to donors tax.
Section 99 (C) of the Tax Code, as amended, provides that any contribution in cash or in
kind for campaign purposes shall be governed by R.A. No. 7166 or the Election Code.
Section 13 of the R.A. No. 7166 specifically states that any provision of law to the
contrary notwithstanding any contribution in cash or kind to any candidate or political
party or coalition of parties for campaign purposes, duly reported to the Commission
shall not be subject to the payment of any gift tax (donors tax). Accordingly, the BIR can
impose donors tax on contributions of this nature. (Q-14, RMC No. 63-2009)
6. For purposes of Donors Tax, is a legally adopted child considered stranger?
A legally adopted child is entitled to all the rights and obligations provided by law to
legitimate children, and therefore, donation to him shall not be considered as donation
made to stranger. (sec. 10, RR No. 2-2003)
7. For purposes of Donors Tax, are donations between businesses considered donations
made between strangers?
Donation made between business organizations and those made between an individual
and a business organization shall be considered as donation made to a stranger. (sec. 10,
RR No. 2-2003)
8. Are gratuitous donations to Homeowners Associations subject to Donors Tax?
Gifts, donations, and other contributions received by the Homeowners Associations
(Associations) are subject to the payment of donors tax pursuant to Section 98 and 99 of
the Tax Code, as amended. Endowment or gifts received by such associations are not
exempt from donors tax considering that gifts to Associations are not qualified for
exemption under Section 101(A)(3) of the Tax Code. (II, RMC No. 53-2013)
9. Is an onerous donation or donation in exchange for goods, services or use or lease of
properties to Homeowners Association subject to Donors Tax?
Pursuant to RMC No. 9-2013, Associations are subject to the corresponding internal
revenue taxes imposed under the Tax Code of 1997 on their income of whatever kind and
character. In this regard, contributions to associations in exchange for goods, services and
use of properties constitute as other assessments/charges from activity in exchange for the
performance of a service, use of properties or delivery of an object. As such, these fees
are income on the part of the associations that are subject to income tax under Section 27
of the Tax Code, as amended. (III, RMC No. 53-2013)
10. What is the proper treatment for transactions involving transfer of property other than
real property referred to in Section 24 (D) for less than adequate and full consideration?
Where property, other than real property referred to in Section 24 (D) of the NIRC, as
amended, is transferred for less than adequate and full consideration in money or moneys
worth, then the amount by which the fair market value of the property exceeded the value
of the consideration shall, for the purpose of Donors Tax, be deemed a gift, and shall be
included in computing the amount of gifts made during the calendar year. (Sec. 100,
NIRC, as amended)
11. What entities are considered exempted from Donors Tax under special laws?
The list below consists of entities considered Donors Tax exempt under special laws
including, but not limited to the following:
Rural Farm School (Sec. 14, R.A. No. 10618)

Peoples Television Network, Incorporated (Sec. 15, R.A. No. 10390)
Peoples Survival Fund (Sec. 13, R.A. No. 10174)
Aurora Pacific Economic Zone and Freeport Authority (Sec. 7, R.A. No.
10083)
Girl Scouts of the Philippines (Sec. 11, R.A. No. 10073)
Philippine Red Cross (Sec. 5, R.A. No. 10072)
Tubbataha Reefs Natural Park (Sec. 17, R.A. No. 10067)
National Commission for Culture and the Arts (Sec. 35, R.A. No. 10066)
Philippine Normal University (Sec. 7, R.A. No. 9647)
University of the Philippines (Sec. 25, R.A. No. 9500)
National Water Quality Management Fund (Sec. 9, R.A. No. 9275)
Philippine Investors Commission (Sec. 9, R.A. No. 3850)
Ramon Magsaysay Award Foundation (Sec. 2, R.A. 3676)
Philippine-American Cultural Foundation (Sec. 4, P.D. 3062)
International Rice Research Institute (Art. 5(2), PD 1620)
Task Force on Human Settlements (Sec. 3(b)(8), E.O. 419)
National Social Action Council (Sec. 4, P.D. 294)
Aquaculture Department of the Southeast Asian Fisheries Development
Center (Sec. 2, P.D. 292)
Development Academy of the Philippines (Sec. 12, PD 205)
Integrated Bar of the Philippines (Sec. 3, PD 181)
12. How do we determine the fair market value of the unlisted stocks?
In determining the value of the shares, the Adjusted Net Asset Method
shall be used whereby all assets and liabilities are adjusted to fair
market values. The net of adjusted asset minus the adjusted liability
For purposes of this item, the appraised value of real property at the
time of sale shall be the highest among the following:
(b) The fair market value as shown in the schedule of values fixed by
the Provincial and City Assessors, or
(c) The fair market value as determined by Independent Appraiser. (RR
NO. 6-2013) (Annex U)
Description
Estate Tax is a tax on the right of the deceased person to transmit his/her estate to his/her
lawful heirs and beneficiaries at the time of death and on certain transfers, which are
made by law as equivalent to testamentary disposition. It is not a tax on property. It is a
tax imposed on the privilege of transmitting property upon the death of the owner. The
Estate Tax is based on the laws in force at the time of death notwithstanding the
postponement of the actual possession or enjoyment of the estate by the beneficiary.
[return to index]
Tax Form
BIR Form 1801 - Estate Tax Return
[return to index]
1. Notice of Death duly received by the BIR, if gross estate exceeds P20,000 for deaths
occurring on or after Jan. 1, 1998; or if the gross estate exceeds P3,000 for deaths
occurring prior to January 1, 1998
2. Certified true copy of the Death Certificate
3. Deed of Extra-Judicial Settlement of the Estate, if the estate is settled extra judicially
4. Court Orders/Decision, if the estate is settled judicially;

5. Affidavit of Self-Adjudication and Sworn Declaration of all properties of the Estate
6. A certified true copy of the schedule of partition of the estate and the order of the court
approving the same, if applicable
7. Certified true copy(ies) of the Transfer/Original/Condominium Certificate of Title(s) of
real property(ies) (front and back pages), if applicable
8. Certified true copy of the latest Tax Declaration of real properties at the time of death,
if applicable
9. "Certificate of No Improvement" issued by the Assessor's Office declared properties
have no declared improvement or Sworn Declaration/Affidavit of No Improvement by at
least one (1) of the transferees
10. Certificate of Deposit/Investment/Indebtedness owned by the decedent and the
surviving spouse, if applicable
11. Photo copy of Certificate of Registration of vehicles and other proofs showing the
correct value of the same, if applicable
12. Photo copy of certificate of stocks, if applicable
13. Proof of valuation of shares of stocks at the time of death, if applicable
For listed stocks - newspaper clippings or certification from the Stock Exchange
For unlisted stocks - Audited Financial Statements duly certified by an
independent certified public accountant with computation of fair market value per
share at the time of death
14. Proof of valuation of other types of personal property, if applicable

15. Proof of claimed tax credit, if applicable
16. CPA Statement on the itemized assets of the decedent, itemized deductions from gross
estate and the amount due if the gross value of the estate exceeds two million pesos, if
applicable
17. Certification of Barangay Captain for claimed Family Home
18. Duly notarized Promissory Note for "Claims against the Estate" arising from Contract
of Loan
19. Accounting of the proceeds of loan contracted within three (3) years prior to death of
the decedent
20. Proof of the claimed "Property Previously Taxed"
21. Proof of claimed "Transfer for Public Use"
22. Copy of Tax Debit Memo used as payment, if applicable
[return to index]
Tax Rates
Effective January 1, 1998 up to Present
If the Net Estate is
Over
But not Over

P 200,000.00
The Tax Shall be
Plus
Of the Excess Over
Exempt
P 200,000.00
500,000.00
0 5%
P 200,000.00
500,000.00
2,000,000.00
P 15,000.00 8 %
500,000.00
2,000,000.00
5,000,000.00
135,000.00 11 %
2,000,000.00
5,000,000.00
10,000,000.00
465,000.00 15 %
5,000,000.00
1,215,000.00 20 %
10,000,000.00
10,000,000.00
Effective July 28, 1992 up to December 31, 1997 (Section 77 of the NIRC, as
amended (Republic Act No. 7499)
Over
But not Over

P 200,000.00
P 200,000.00
500,000.00
500,000.00
2,000,000.00
The Tax Shall be
Plus
Of the Excess Over
Exempt
P 15,000.00
5%
P 200,000.00
8%
500,000.00
2,000,000.00
5,000,000.00
5,000,000.00
10,000,000.00
10,000,000.00
135,000.00 12 %
2,000,000.00
495,000.00
21%
5,000,000.00
1,545,000.00 35 %
10,000,000.00
Effective January 1, 1973 to July 27, 1992 (Section 85 of the NIRC, as amended
(Presidential Decree No. 69)
Over
But not Over
The Tax Shall be
Plus
Of the Excess Over
P 10,000.00
Exempt
P 10,000.00
50,000.00
3%
P 10,000.00
50,000.00
75,000.00
P 1,200.00
4%
50,000.00
75,000.00
100,000.00
2,200.00
5%
75,000.00
100,000.00
150,000.00
3,450.00
10%
100,000.00
150,000.00
200,000.00
8,450.00 15 %
150,000.00
200,000.00
300,000.00
15,950.00
20%
200,000.00
300,000.00
400,000.00
35,950.00
25%
300,000.00
400,000.00
500,000.00
60,950.00
30%
400,000.00
500,000.00
625,000.00
90,950.00
35%
500,000.00
625,000.00
750,000.00
134,700.00
40%
625,000.00
750,000.00
875,000.00
184,700.00
45%
750,000.00
875,000.00
1,000,000.00
240,950.00
50%
875,000.00
1,000,000.00
2,000,000.00
303,450.00
53%
1,000,000.00
2,000,000.00
3,000,000.00
833,450.00
56%
2,000,000.00
3,000,000.00
1,393,450.00
60%
3,000,000.00
Effective September 15, 1950 to December 31, 1972 (Section 85 of the NIRC, as
amended (Republic Act No. 579)
Estate and Inheritance Tax
Over
But not Over
ESTATE
INHERITANCE
5,000.00
Exempt
Exempt
5,000.00
12,000.00
1.0%
2%
12,000.00
30,000.00
2.0%
4%
30,000.00
50,000.00
2.5%
6%
50,000.00
70,000.00
3.0%
8%
70,000.00
100,000.00
5.0%
12%
100,000.00
150,000.00
7.0%
14%
150,000.00
250,000.00
9.0%
16%
250,000.00
500,000.00
11.0%
18%
500,000.00
1,000,000.00
13%
20%
15%
22%
1,000,000.00
Effective July 1, 1939 to September 14, 1950 (Section 85 of the NIRC, as amended
(Commonwealth Act No. 466)
Estate and Inheritance Tax
Over
But not Over
ESTATE
INHERITANCE
Exempt
1.0%
3000.00
3,000.00
10,000.00
1.0%
10,000.00
30,000.00
1.5%
2.0%
30,000.00
50,000.00
2.0%
3.0%
50,000.00
80,000.00
2.5%
4.0%
80,000.00
110,000.00
3.0%
5.0%
110,000.00
150,000.00
3.5%
6.0%
150,000.00
190,000.00
4.0%
7.0%
190,000.00
240,000.00
4.5%
8.0%
240,000.00
290,000.00
5.0%
9.0%
290,000.00
350,000.00
5.5%
10.0%
350,000.00
420,000.00
6.0%
11.0%
420,000.00
500,000.00
6.5%
12.0%
500,000.00
600,000.00
7.0%
13.0%
600,000.00
720,000.00
7.5%
14.0%
720,000.00
850,000.00
8.0%
15.0%
850,000.00
1,000,000.00
8.5%
16.0%
1,000,000.00
1,200,000.00
9.0%
17.0%
1,200,000.00
1,500,000.00
9.5%
17.0%
10.0%
17.0%
1,500,000.00
[return to index]
Procedures
The heirs/authorized representative/administrator/executor shall file the estate tax return
(BIR Form 1801) and pay the corresponding estate tax with the Authorized Agent Bank
(AAB), Revenue Collection Officer (RCO) or duly authorized Treasurer of the city or
municipality in the Revenue District Office having jurisdiction over the place of domicile
of the decedent at the time of his death, pursuant to Section 90(D) of the Tax Code, as
amended.
In case of a non-resident decedent, with executor or administrator in the Philippines, the
estate tax return shall be filed with the AAB of the RDO where such
executor/administrator is registered or is domiciled, if not yet registered with the BIR.
For non-resident decedent with no executor or administrator in the Philippines, the estate
tax return shall be filed with the AAB under the jurisdiction of RDO No. 39 South
Quezon City.
The heir/authorized representative/administrator/executor shall submit all the applicable
documentary requirements as prescribed in Annexes A-6 and A-6.1 of Revenue
Memorandum Order (RMO) No. 15-2003 and proof of payment to the RDO having
jurisdiction over the place of residence of the decedent or the RDO where the executor or
administrator is registered, or RDO No. 39 South, Quezon City, whichever is
applicable. (part II, par.(4)of RMC No. 34-2013)
Payment of Estate Tax by installment - In case the available cash of the estate is not
sufficient to pay its total estate tax liability, the estate may be allowed to pay the tax by
installment and a clearance shall be released only with respect to the property, the
corresponding/computed tax on which has been paid. (Section 9(F) of RR 2-2003)
Revenue District Office having jurisdiction over the place of domicile of the decedent at the time of his
death or electronically through the use of the Online eBIRForms System. (Sec. 3(2) RR No. 6-2014)
Please note that the time of payment will vary depending on the law applicable at the
time of the decedents death.
[return to index]
Deadlines
File the return within six (6) months from decedent's death. However, the Commissioner
may, in meritorious cases, grant extension not exceeding thirty (30) days.
The Estate Tax imposed shall be paid at the time the return is filed by the executor or
administrator or the heirs. However, when the Commissioner finds that payment on the
due date of the Estate Tax or of any part thereof would impose undue hardship upon the
estate or any of the heirs, he may extend the time for payment of such tax or any part
thereof not to exceed five (5) years, in case the estate is settled through the courts or two
(2) years in case the estate is settled extra-judicially.
In all cases of transfers subject to tax, or where, though exempt from tax, the gross value
of the estate exceeds Twenty Thousand Pesos (P 20,000), Section 89 of the National
Internal Revenue Code of 1997 (Tax Code), as amended, provides that the executor,
administrator or any of the legal heirs, shall send a written notice of death to the
Commissioner within two (2) months after the decedents death or within a like period
after an executor or administrator qualify as such. (part II, par.(1)of RMC No. 34-2013)
Please note that the time of filing will vary depending on the law applicable at the time of
the decedents death.
Extension of Time of Filing:
When the Commissioner finds that the payment of the estate tax or of any part thereof
would imposed undue hardship upon the estate or any of the heirs, he may extend the
time for payment of such tax or any part thereof not to exceed five (5) years in case the
estate is settled through the courts, or two (2) years in case it settled extra-judicially.
Where the request for extension is by reason of negligence, intentional disregard of rules
and regulations, or fraud on the part of the taxpayer, no extension will be granted by the
Commissioner.
If an extension is granted, the Commissioner or his duly authorized representative may

require the executor, or administrator, or beneficiary, as the case may be, to furnish a
bond in such amount, not exceeding double the amount, not exceeding double the amount
of tax and with such sureties as the Commissioner deems necessary, conditioned upon the
payment of the said tax in accordance in the terms of extension.
The request for extension shall be filed with the Revenue District Officer (RDO) where
the estate is required to secure its TIN and file the estate tax return. The application shall
be approved by the Commissioner or his duly authorized representative.
[return to index]

Revenue Regulations (RR) No. 2-2003, 6-2013, 6-2014
Revenue Memorandum Order (RMO) Nos. 26-82, 31-82, 15-2003
Revenue Memorandum Circular (RMC) Nos. 1-98, 34-2013
Related Laws
Commonwealth Act No. 466 effective July 1, 1939
Republic Act No. 579 effective September 15, 1950
Republic Act No. 6110 effective August 4, 1969
Presidential Decree No. 69 effective January 1, 1973
Republic Act No. 7499 effective July 28, 1992
Republic Act No. 8424 effective January 1, 1998
[return to index]
Codal Reference

[return to index]

1. Who are required to file the Estate Tax return?
a) The executor or administrator or any of the legal heirs of the decedent or non-resident
of the Philippines under any of the following situation:
- In all cases of transfer subject to Estate Tax;
- Where though exempt from Estate Tax, the gross value of the estate exceeds two
hundred thousand P 200,000.00; and
- Where regardless of the gross value, the estate consists of registered or registrable
property such as real property, motor vehicle, share of stocks or other similar
property for which a clearance from the Bureau of Internal Revenue (BIR) is
required as a prerequisite for the transfer of ownership thereof in the name of the
transferee. (part II par.(1.#3) of RMC No. 34-2013)
b) Where there is no executor or administrator appointed, qualified and acting within the
Philippines, then any person in actual or constructive possession of any property of the
decedent must file the return.
c) The Estate Tax imposed under the Tax Code shall be paid by the executor or
administrator before the delivery of the distributive share in the inheritance to any heir or
beneficiary. Where there are two or more executors or administrators, all of them are
severally liable for the payment of the tax. The estate tax clearance issued by the
Commissioner or the Revenue District Officer (RDO) having jurisdiction over the estate,
will serve as the authority to distribute the remaining/distributable properties/share in the
inheritance to the heir or beneficiary.
d) The executor or administrator of an estate has the primary obligation to pay the estate
tax but the heir or beneficiary has subsidiary liability for the payment of that portion of
the estate which his distributive share bears to the value of the total net estate. The extent
of his liability, however, shall in no case exceed the value of his share in the inheritance.
2. What are included in gross estate?
For resident alien decedents/citizens:

a) Real or immovable property, wherever located
b) Tangible personal property, wherever located

c) Intangible personal property, wherever located
For non-resident decedent/non-citizens:

a) Real or immovable property located in the Philippines
b) Tangible personal property located in the Philippines
c) Intangible personal property - with a situs in the Philippines such as:
- Franchise which must be exercised in the Philippines
- Shares, obligations or bonds issued by corporations organized or
constituted
in
the
Philippines
- Shares, obligations or bonds issued by a foreign corporation 85% of the
business
of
which
is
located
in
the
Philippines
- Shares, obligations or bonds issued by a foreign corporation if such shares,
obligations or bonds have acquired a business situs in the Philippines ( i. e.
they are used in the furtherance of its business in the Philippines)
- Shares, rights in any partnership, business or industry established in the
Philippines
3. What are excluded from gross estate?
GSIS proceeds/ benefits

Accruals from SSS
Proceeds of life insurance where the beneficiary is irrevocably appointed
Proceeds of life insurance under a group insurance taken by employer (not taken
out upon his life)
War damage payments
Transfer by way of bona fide sales
Transfer of property to the National Government or to any of its political
subdivisions
Separate property of the surviving spouse
Merger of usufruct in the owner of the naked title
Properties held in trust by the decedent
Acquisition and/or transfer expressly declared as not taxable
4. What will be used as basis in the valuation of property?
The properties subject to Estate Tax shall be appraised based on its fair market
value at the time of the decedent's death.
The appraised value of the real estate shall be whichever is higher of the fair
market value, as determined by the Commissioner (zonal value) or the fair market
value, as shown in the schedule of values fixed by the Provincial or City Assessor.
If there is no zonal value, the taxable base is the fair market value that appears in
the latest tax declaration.
If there is an improvement, the value of improvement is the construction cost per
building permit or the fair market value per latest tax declaration.
5. What are the allowable deductions for Estate Tax Purposes?

Applicable for deaths occurring after the effectivity of RA 8424 which is January 1, 1998
For a citizen or resident alien
A. Expenses, losses, indebtedness and taxes
(1) Actual funeral expenses (whether paid or unpaid) up to the time of interment, or
an amount equal to five percent (5%) of the gross estate, whichever is lower, but in
no case to exceed P200,000.
(2) Judicial expenses of the testamentary or intestate proceedings.
(3) Claims against the estate.
(4) Claims of the deceased against insolvent persons where the value of the
decedents interest therein is included in the value of the gross estate; and,
(5) Unpaid mortgages, taxes and casualty losses
B. Property previously taxed (Vanishing Deduction) (Section 86(2) of the NIRC as
amended by Republic Act No. 8424)
An amount equal to the value specified below of any property forming a part of the
gross estate situated in the Philippines of any person who died within five (5) years
prior to the death of the decedent, or transferred to the decedent by gift within five
(5) years prior to his death, where such property can be identified as having been
received by the decedent from the donor by gift, or from such prior decedent by
gift, bequest, devise or inheritance, or which can be identified as having been
acquired in exchange for property so received:
One hundred percent (100%) of the value, if the prior decedent died within
one (1) year prior to the death of the decedent, or if the property was
transferred to him by gift within the same period prior to his death;
Eighty percent (80%) of the value, if the prior decedent died more than one
(1) year but not more than two (2) years prior to the death of the decedent, or
if the property was transferred to him by gift within the same period prior to
his death;
Sixty percent (60%) of the value, if the prior decedent died more than two
(2) years but not more than three (3) years prior to the death of the decedent,
or if the property was transferred to him by gift within the same period prior
to his death;
Forty percent (40%) of the value, if the prior decedent died more than three
(3) years but not more than four (4) years prior to the death of the decedent,
to his death; and
Twenty percent (20%) of the value, if the prior decedent died more than four
(4) years but not more than five (5) years prior to the death of the decedent,
to his death;
These deductions shall be allowed only where a donors tax or estate tax imposed
was finally determined and paid by or on behalf of such donor, or the estate of such
prior decedent, as the case may be, and only in the amount finally determined as
the value of such property in determining the value of the gift, or the gross estate of
such prior decedent, and only to the extent that the value of such property is
included in the decedents gross estate, and only if in determining the value of the
estate of the prior decedent, no Property Previously Taxed or Vanishing Deduction
was allowable in respect of the property or properties given in exchange therefor.
(Section 6 & 7 of RR 2-2003)
C. Transfers for public use
D. The family home - fair market value but not to exceed P1,000,000.00
The family home refers to the dwelling house, including the land on which it is
situated, where the husband and wife, or a head of the family, and members of their
family reside, as certified to by the Barangay Captain of the locality. The family
home is deemed constituted on the house and lot from the time it is actually
occupied as a family residence and is considered as such for as long as any of its
beneficiaries actually resides therein. (Arts. 152 and 153, Family Code)
E. Standard deduction A deduction in the amount of One Million Pesos (P1,000,000.00)
shall be allowed as an additional deduction without need of substantiation.
F. Medical expenses All medical expenses (cost of medicines, hospital bills, doctors
fees, etc.) incurred (whether paid or unpaid) within one (1) year before the death of the
decedent shall be allowed as a deduction provided that the same are duly substantiated
with official receipts. For services rendered by the decedents attending physicians,
invoices, statements of account duly certified by the hospital, and such other documents
in support thereof and provided, further, that the total amount thereof, whether paid or
unpaid, does not exceed Five Hundred Thousand Pesos (P500,000).
G. Amount received by heirs under Republic Act No. 4917-Any amount received by the
heirs from the decedents employer as a consequence of the death of the decedentemployee in accordance with Republic Act No. 4917 is allowed as a deduction provided
that the amount of the separation benefit is included as part of the gross estate of the
decedent.
H. Net share of the surviving spouse in the conjugal partnership or community property
For a non-resident alien
A. Expenses, losses, indebtedness and taxes
B. Property previously taxed
C. Transfers for public use
D. Net share of the surviving spouse in the conjugal partnership or
community property
No deduction shall be allowed in the case of a non-resident decedent not a citizen
of the Philippines, unless the executor, administrator, or anyone of the heirs, as the
case may be, includes in the return required to be filed in the Section 90 of the
Code the value at the time of the decedents death of that part of his gross estate not
situated in the Philippines.
Please note that the allowable deductions will vary depending on the law applicable
at the time of the decedents death.
6. What does the term "Funeral Expenses" include? (Sec 6 (A)(1) of RR 2-2003)
The term "FUNERAL EXPENSES" is not confined to its ordinary or usual meaning.
They include:
(a) The mourning apparel of the surviving spouse and unmarried minor children of
the deceased bought and used on the occasion of the burial;
(b) Expenses for the deceaseds wake, including food and drinks;
(c) Publication charges for death notices;
(d) Telecommunication expenses incurred in informing relatives of the deceased;
(e) Cost of burial plot, tombstones, monument or mausoleum but not their upkeep.
In case the deceased owns a family estate or several burial lots, only the value
corresponding to the plot where he is buried is deductible;
(f) Interment and/or cremation fees and charges; and

(g) All other expenses incurred for the performance of the rites and ceremonies
incident to interment.
Expenses incurred after the interment, such as for prayers, masses, entertainment,
or the like are not deductible. Any portion of the funeral and burial expenses borne
or defrayed by relatives and friends of the deceased are not deductible. Actual
funeral expenses shall mean those which are actually incurred in connection with
the interment or burial of the deceased. The expenses must be duly supported by
official receipts or invoices or other evidence to show that they were actually
incurred.
7. What does the term "Judicial Expenses" include? (Sec 6 (A)(2) of RR 2-2003)
Expenses allowed as deduction under this category are those incurred in the inventorytaking of a assets comprising the gross estate, their administration, the payment of debts
of the estate, as well as the distribution of the estate among the heirs. In short, these
deductible items are expenses incurred during the settlement of the estate but not beyond
the last day prescribed by law, or the extension thereof, for the filing of the estate tax
return. Judicial expenses may include:
(a) Fees of executor or administrator;
(b) Attorneys fees;
(c) Court fees;
(d) Accountants fees;
(e) Appraisers fees;
(f) Clerk hire;
(g) Costs of preserving and distributing the estate;
(h) Costs of storing or maintaining property of the estate; and
(i) Brokerage fees for selling property of the estate.
Any unpaid amount for the aforementioned cost and expenses claimed under Judicial
Expenses should be supported by a sworn statement of account issued and signed by the
creditor.
8. What are the requisites for deductibility of claims against the Estate? (Sec 6(A)(3) of
RR 2-2003)
(a) The liability represents a personal obligation of the deceased existing at the time of his
death except unpaid obligations incurred incident to his death such as unpaid funeral
expenses (i.e., expenses incurred up to the time of interment) and unpaid medical
expenses which are classified under a different category of deductions pursuant to these
Regulations;
(b) The liability was contracted in good faith and for adequate and full consideration in
money or moneys worth;
(c) The claim must be a debt or claim which is valid in law and enforceable in court;
(d) The indebtedness must not have been condoned by the creditor or the action to collect
from the decedent must not have prescribed.
9. How do we determine the fair market value of the unlisted stocks? (RR NO. 6-2013) (Annex U)
In determining the value of the shares, the Adjusted Net Asset Method shall be used whereby all assets
and liabilities are adjusted to fair market values. The net of adjusted asset minus the adjusted liability
For purposes of this item, the appraised value of real property at the time of sale shall be the highest
among the following:
(b) The fair market value as shown in the schedule of values fixed by the Provincial and City
Assessors, or
(c) The fair market value as determined by Independent Appraiser.
Description
Income Tax is a tax on a person's income, emoluments, profits arising from property,
practice of profession, conduct of trade or business or on the pertinent items of gross
income specified in the Tax Code of 1997 (Tax Code), as amended, less the deductions
and/or personal and additional exemptions, if any, authorized for such types of income,
by the Tax Code, as amended, or other special laws.
[return to index]
Who Are Required To File Income Tax Returns

Individuals
Resident citizens receiving income from sources within or outside the Philippines
o employees deriving purely compensation income from 2 or more
employers, concurrently or successively at anytime during the taxable year
o employees deriving purely compensation income regardless of the
amount, whether from a single or several employers during the calendar
year, the income tax of which has not been withheld correctly (i.e. tax due
is not equal to the tax withheld) resulting to collectible or refundable
return
o self-employed individuals receiving income from the conduct of trade or
business and/or practice of profession
o individuals deriving mixed income, i.e., compensation income and income
from the conduct of trade or business and/or practice of profession
o individuals deriving other non-business, non-professional related income
in addition to compensation income not otherwise subject to a final tax
o individuals receiving purely compensation income from a single employer,
although the income of which has been correctly withheld, but whose
spouse is not entitled to substituted filing
o marginal income earners
Non-resident citizens receiving income from sources within the Philippines
Aliens, whether resident or not, receiving income from sources within the
Philippines
Corporation shall include partnerships, no matter how created or organized.
Domestic corporations receiving income from sources within and outside the
Philippines
Foreign corporations receiving income from sources within the Philippines
Estates and trusts engaged in trade or business
[return to index]
Annual Income Tax For Individuals Earning Purely Compensation Income

(Including Non-Business/Non-Profession Related Income) and For Marginal Income
Earners
Tax Form
BIR Form 1700 - Annual Income Tax Return (For Individual Earning Purely
Compensation Income Including Non-Business/Non-Profession Related Income)
1. Certificate of Income Tax Withheld on Compensation (BIR Form 2316)
2. Waiver of the Husbands right to claim additional exemption, if applicable
3. Duly approved Tax Debit Memo, if applicable

4. Proof of Foreign Tax Credits, if applicable
5. Income Tax Return previously filed and proof of payment, if filing an amended
return for the same taxable year
Procedures
1. Fill-up BIR Form 1700 in triplicate.
2. If there is payment:
Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue
District Office where you are registered and present the duly accomplished
BIR Form 1700, together with the required attachments and your payment.
In places where there are no AABs, proceed to the Revenue Collection
Officer or duly Authorized City or Municipal Treasurer located within the
Revenue District Office where you are registered and present the duly
accomplished BIR Form 1700, together with the required attachments and
your payment.
Receive your copy of the duly stamped and validated form from the teller
of the AABs/Revenue Collection Officer/duly Authorized City or Municipal
Treasurer.
3. For "No Payment" Returns including refundable returns, and for tax returns
qualified for second installment:
Proceed to the Revenue District Office where you are registered or to any
Tax Filing Center established by the BIR and present the duly accomplished
BIR Form 1700, together with the required attachments.
Receive your copy of the duly stamped and validated form from the
RDO/Tax Filing Center representative.
Deadline
On or before the 15th day of April of each year covering taxable income for the
preceding taxable year
[return to index]
Annual Income Tax For Self-Employed Individuals, Estates And Trusts (Including
Those With Mixed Income,i.e., Compensation Income and Income from Business
and/or Practice of Profession )
Tax Form
BIR Form 1701 - Annual Income Tax Return (For Self-Employed Individuals,
Estates and Trusts Including Those With Both Business and Compensation Income)
1. Certificate of Income Tax Withheld on Compensation (BIR Form 2316), if
applicable
2. Certificate of Income Payments not Subjected to Withholding Tax (BIR Form
2304) if applicable
3. Certificate of Creditable Tax Withheld at Source (BIR Form 2307), if applicable
4. Waiver of the Husbands right to claim additional exemption, if applicable
7. Income Tax Return previously filed and proof of payment, if filing an amended
return for the same year
8. Account Information Form (AIF) or the Certificate of the independent
CPA with Audited Financial Statements if the gross quarterly sales, earnings,
receipts or output exceed P 150,000.00
9. Proof of prior years excess tax credits, if applicable
Procedures
1. Fill-up BIR Form 1701 in triplicate copies.
accomplished BIR Form 1701, together with the required attachments and
your payment.
Treasurer
3. For "No Payment" including refundable/ creditable returns, returns with excess
tax credit carry over, and returns qualified for second installment:
established Tax Filing Centers established by the BIR and present the duly
accomplished BIR Form 1701, together with the required attachments.
Deadline
Final Adjustment Return or Annual Income Tax Return - On or before the 15th day
of April of each year covering income for the preceding year
[return to index]
Account Information Form For Self-Employed Individuals, Estates And Trusts

(Including Those With Mixed Income , I.E., Compensation Income and Income
from Business and/or Practice of Profession)
Tax Form
BIR Form 1701 AIF - Account Information Form For Self-Employed Individuals,
Estates and Trusts (Including those with Mixed Income, i.e., Compensation Income
and Income from Business and/or Practice of Profession) and Estates and Trusts
(Engaged in Trade or Business)
NOTE: Pursuant to Revenue Memorandum Circular No. 6 2001, corporations,
companies or persons whose gross quarterly sales, earnings, receipts or output
exceed P 150,000.00 may not accomplish this form. In lieu thereof, they may file
their annual income tax returns accompanied by balance sheets, profit and loss
statement, schedules listing income-producing properties and the corresponding
income therefrom, and other relevant statements duly certified by an independent
CPA.
None
Procedures
1. Accomplish BIR Form 1701 AIF in triplicate.
2. Attach the same to BIR Form 1701.
Deadline
Same deadline as BIR Form 1701 - On or before the 15th day of April of each year
covering taxable income for the preceding year
[return to index]
Quarterly Income Tax For Self-Employed Individuals, Estates And Trusts

(Including Those With Mixed Income, I.E., Compensation Income and Income from
Business and/or Practice of Profession)
Tax Form
BIR Form 1701Q - Quarterly Income Tax Return For Self-Employed Individuals,
Estates and Trusts (Including those with both Business and Compensation Income)
1. Certificate of Income Tax Withheld at Source (BIR Form 2307), if applicable
2304) if applicable
4. Previously filed return, if an amended return is filed for the same quarter
Procedures
1. Fill-up BIR Form 1701Q in triplicate.

District Office where you registered and present the duly accomplished BIR
Form 1701 Q, together with the required attachments and your payment.
accomplished BIR Form 1701Q, together with the required attachments and
your payment.
Treasurer.
3. For "No Payment" Returns including refundable/ creditable returns with excess
tax credit carry over and returns qualified for second installment:
Tax Filing Center established by the BIR and present the duly accomplished
BIR Form 1701Q, together with the required attachments.
Deadlines
April 15 for the first quarter
August 15 for the second quarter
November 15 for the third quarter
[return to index]
Annual Income Tax For Corporations And Partnerships

Tax Form
BIR Form 1702 - Annual Income Tax Return (For Corporations and Partnerships)
2304), if applicable
2. Certificate of Creditable Tax Withheld at Source (BIR Form 2307), if applicable

5. Income tax return previously filed and proof of payment, if amended return is
filed for the same taxable year
6. Account Information Form (AIF) and/or the Certificate of the independent
CPA with Audited Financial Statements, if the gross quarterly sales, earnings,
receipts or output exceed P150,000.00
7. Proof of prior years excess tax credits, if applicable
Procedures
accomplished BIR Form 1702 with the required attachments and your
payments.
Treasurer.
3. For "No Payment" Returns including refundable/ creditable returns and returns
with excess tax credit carry over:
Tax Filing Center established by BIR and present the duly accomplished BIR
Form 1702, together with the required attachments.
RDO/Tax Filing Center representative
Deadline
Final Adjustment Return or Annual Income Tax Return - On or before the 15th day
of the fourth month following the close of the taxpayers taxable year
[return to index]
Account Information Form For Corporations And Partnerships

Tax Form
BIR Form 1702 AIF - Account Information Form (For Corporations and
Partnerships)
NOTE: Pursuant to Revenue Memorandum Circular No. 6 2001, corporations,
companies or persons whose gross quarterly sales, earnings, receipts or output
exceed P 150,000.00 may not accomplish this form. In lieu thereof, they may file
their annual income tax returns accompanied by balance sheets, profit and loss
statement, schedules listing income-producing properties and the corresponding
income therefrom, and other relevant statements duly certified by an independent
CPA.
None
Procedures
1. Accomplish BIR Form 1702 AIF in triplicate.
2. Attach the same to BIR Form 1702.
Deadline
Same deadline as BIR Form 1702 - On or before the 15th day of the fourth month
following the close of the taxpayers taxable year
[return to index]
Quarterly Income Tax For Corporations And Partnerships

Tax Form
BIR Form 1702 Q - Quarterly Income Tax Return (For Corporations and
Partnerships)
1. Certificate of Income Tax Withheld at Source (BIR Form 2307), if applicable
4. Previously filed return, if an amended return is filed for the same quarter
Procedures
1. Fill-up BIR Form 1702 Q in triplicate.
BIR Form 1702 Q, together with the required attachments and your payment.
accomplished BIR Form 1702 Q.
Treasurer.
3. For Refundable Returns and for those returns with second installment:
Proceed to the Revenue District Office where you are registered and
present the duly accomplished BIR Form 1702 Q, together with the required
attachments.
Receive your copy of the duly stamped and validated form from the RDO
representative.
Deadline
Corporate Quarterly Declaration or Quarterly Income Tax Return - On or before
the 60th day following the close of each of the quarters of the taxable year
[return to index]
Improperly Accumulated Earnings Tax For Corporations

Tax Form
BIR Form 1704 - Improperly Accumulated Earnings Tax Return (For Corporations)
1. Photocopy of Annual Income Tax Return (BIR Form 1702) with Audited
Financial Statements and/or Account Information Form of the covered taxable year
duly received by the BIR; and
2. Sworn declaration as to dividends declared taken from the covered year's
earnings and the corresponding tax withheld, if any
Procedures
accomplished BIR Form 1704
Treasurer.
3. If there is no payment:
Proceed to the Revenue District Office where you are registered and
present the duly accomplished BIR Form 1704, together with the required
attachments.
Receive your copy of the duly stamped and validated form from the RDO
representative
Deadline
Within fifteen (15) days after the close of the taxable year
[return to index]
Annual Income Information Form for General Professional Partnerships

Sec. 55. Returns of General Professional Partnership (Tax Code of 1997, as amended)
Every general professional partnership shall file, in duplicate, a return of its income,
except income exempt under Section 32 (B) of this Title, setting forth the items of gross
income and of deductions allowed by this Title, and the names, Taxpayer Identification
Numbers (TIN),addresses and shares of each of the partners.
[return to index]
Tax Rate
A. For Individuals Earning Purely Compensation Income and Individuals Engaged
in Business and Practice of Profession
Amount of Net Taxable
Income
Over
Rate
But Not Over

P10,000
5%
P10,000
P30,000
P500 + 10% of the Excess over P10,000
P30,000
P70,000
P2,500 + 15% of the Excess over P30,000
P70,000
P140,000
P140,000
P250,000
P250,000
P500,000
P500,000
P125,000 + 32% of the Excess over P500,000 in 2000 and

onward
Note: When the tax due exceeds P2,000.00, the taxpayer may elect to pay in two equal
installments, the first installment to be paid at the time the return is filed and the second
installment 15 of the same year at on or before July the Authorized Agent Bank (AAB)
within the jurisdiction of the Revenue District Office (RDO) where the taxpayer is
registered.
Tax Rate
Taxable Base
1. Domestic Corporations:
a. In General
30% (effective Net taxable income from all

Jan. 1, 2009) sources
b. Minimum Corporate Income

Tax*
2%
Gross Income
c. Improperly Accumulated
Earnings
10%
Improperly Accumulated Taxable

Income
2. Proprietary Educational
Institution
10%
Net taxable income provided that

the gross income from unrelated
trade, business or other activity
does not exceed 50% of the total
gross income
3. Non-stock, Non-profit Hospitals
10%
Net taxable income provided that

the gross income from unrelated
trade, business or other activity
does not exceed 50% of the total
gross income
a. In General
30%
Net taxable income from all

sources

Tax*
2%
Gross Income
Earnings
10%

Income
a. In General
30%

sources

Tax*
2%
Gross Income
Earnings
10%

Income
4. GOCC, Agencies &

Instrumentalities
5. National Gov't. & LGUs
6. Taxable Partnerships
a. In General
30%

sources

Tax*
2%
Gross Income
Earnings
10%

Income
7. Exempt Corporation
a. On Exempt Activities
0%
b. On Taxable Activities
30%
8. General Professional
Partnerships
0%
9. Corporation covered by Special

Laws

sources
Rate specified
under the
respective
special laws
10. International Carriers
2.5%
Gross Philippine Billings
11. Regional Operating Head
10%
Taxable Income
12. Offshore Banking Units

(OBUs)
10%
Gross Taxable Income On Foreign

Currency Transaction
30%
On Taxable Income other than

Foreign Currency Transaction
10%
Gross Taxable Income On Foreign

Currency Transaction
30%
On Taxable Income other than

Foreign Currency Transaction
13. Foreign Currency Deposit

Units (FCDU)
*Beginning on the 4th year immediately following the year in which such corporation
commenced its business operations, when the minimum corporate income tax is greater
than the tax computed using the normal income tax.
Passive Income
1. Interest from currency deposits, trust funds and deposit substitutes
20%
2. Royalties (on books as well as literary & musical composition)
10%
- In general
20%
3. Prizes (P10,000 or less )
5%
- In excess of P10,000
20%
4. Winnings (except from PCSO and lotto)
20%
5. Interest Income of Foreign Currency Deposit
7.5%
6. Cash and Property Dividends

- To individuals from Domestic Corporations
10 %
- To Domestic Corporations from Another Domestic Corporations
0%
7. On capital gains presumed to have been realized from sale, exchange

or other disposition of real property (capital asset)
6%
8. On capital gains for shares of stock not traded in the stock exchange
- Not over P100,000
5%
- Any amount in excess of P100,000
10%
9. Interest Income from long-term deposit or investment in the form of

savings, common or individual trust funds, deposit substitutes,
investment management accounts and other investments evidenced by
certificates
Upon pretermination before the fifth year , there should be imposed on
the entire income from the proceeds of the long-term deposit based on
the remaining maturity thereof:
Holding Period
Exempt
- Four (4) years to less than five (5) years
5%
- Three (3) years to less than four (4) years
12%
- Less than three (3) years
20%
B. For Non-Resident Aliens Engaged in Trade or Business

1. Interest from currency deposits, trust funds and deposit substitutes
2. Interest Income from long-term deposit or investment in the form of
savings, common or individual trust funds, deposit substitutes,
investment management accounts and other investments evidenced by
certificatesUpon pretermination before the fifth year, there should be
imposed on the entire income from the proceeds of the long-term
deposit based on the remaining maturity thereof:Holding Period:
20%
Exempt
-Four (4) years to less than five (5) years
5%
-Three (3) years to less than four (4) years
12%
-Less than three (3) years
20%
3. On capital gains presumed to have been realized from the sale,

exchange or other disposition of real property
6%
4. On capital gains for shares of stock not traded in the Stock Exchange
- Not over P100,000
5%
10%
C) For Non-Resident Aliens Not Engaged in Trade or Business

1. On the gross amount of income derived from all sources within the
Philippines
25%
2. On capital gains presumed to have been realized from the exchange

or other disposition of real property located in the Phils.
6%
3. On capital gains for shares of stock not traded in the Stock Exchange
- Not Over P100,000
5%
10%
D) On the gross income in the Philippines of Aliens Employed by Regional

Headquarters (RHQ) or Area Headquarters and Regional Operating Headquarters
(ROH), Offshore Banking Units (OBUs), Petroleum Service Contractor and
Subcontractor
On the gross income in the Philippines of Aliens Employed by
Regional Headquarters (RHQ) or Area Headquarters and Regional
Operating Headquarters (ROH), Offshore Banking Units (OBUs),
Petroleum Service Contractor and Subcontractor
15%
E) General Professional Partnerships

General Professional Partnerships
0%
F) Domestic Corporations
1) a. In General on net taxable income
b. Minimum Corporate Income Tax on gross income
30%
2%
c. Improperly Accumulated Earnings on improperly accumulated

taxable income
10%
2) Proprietary Educational Institution and Non-profit Hospitals
10%
- In general (on net taxable income)

- If the gross income from unrelated trade, business or other activity
exceeds 50% of the total gross income from all sources
10%
30%
4) GOCC, Agencies & Instrumentalities

a. In General - on net taxable income
30%
2%

taxable income
10%
5) Taxable Partnerships
a. In General on net taxable income
30%
2%

taxable income
10%
6) Exempt Corporation
a. On Exempt Activities
0%
b. On Taxable Activities
30%
8) Corporation covered by Special Laws
Rate specified
under the
respective
special laws
G) Resident Foreign Corporation

1) a. In General on net taxable income
taxable income
30%
2%
10%
2) International Carriers on gross Philippine billings
2.50%
3) Regional Operating Headquarters on gross income
10%
4) Corporation Covered by Special Laws
5) Offshore Banking Units (OBUs) on gross income
Rate specified
under the
respective
special laws
10%
6) Foreign Currency Deposit Units (FCDU) on gross income
10%
[return to index]

RR No. 4-95, RR No. 4-96, RR No. 5-97, RR No. 1-98, RA 9337, RR 14-2002, RR 122007
[return to index]
Codal Reference
Sections 23-59, 67-73 and 74-77 of the National Internal Revenue Code
[return to index]

1) What is income?
Income means all wealth, which flows into the taxpayer other than as a mere return of
capital.
2) What is Taxable Income?
Taxable income means the pertinent items of gross income specified in the Tax Code as
amended, less the deductions and/or personal and additional exemptions, if any,
authorized for such types of income, by the Tax Code or other special laws.
3) What is Gross Income?
Gross income means all income derived from whatever source.
4) What comprises gross income?
Gross income includes, but is not limited to the following:
Compensation for services, in whatever form paid, including but not

limited to fees, salaries, wages, commissions and similar item
Gross income derived from the conduct of trade or business or the exercise
of profession
Gains derived from dealings in property
Interest
Rents
Royalties
Dividends
Annuities
Prizes and winnings
Pensions
Partner's distributive share from the net income of the general professional
partnerships
5) What are some of the exclusions from gross income?

o
Life insurance
Amount received by insured as return of premium
Gifts, bequests and devises
Compensation for injuries or sickness
Income exempt under treaty
Retirement benefits, pensions, gratuities, etc.
Miscellaneous items
income derived by foreign government
income derived by the government or its political subdivision
prizes and awards in sport competition
prizes and awards which met the conditions set in the Tax Code
13th month pay and other benefits
GSIS, SSS, Medicare and other contributions
gain from the sale of bonds, debentures or other certificate of

indebtedness
gain from redemption of shares in mutual fund
6) What are the allowable deductions from gross income?

Except for taxpayers earning compensation income arising from personal services
rendered under an employer-employee relationships where the only deduction provided
that the gross family income does not exceed P250,000 per family is the premium
payment on health and/or hospitalization insurance, a taxpayer may opt to avail any of
the following allowable deductions from gross income:
a)Optional Standard Deduction - an amount not exceeding 40% of the net sales for
individuals and gross income for corporations; or
b) Itemized Deductions which include the following:
Expenses
Interest
Taxes
Losses
Bad Debts
Depreciation
Depletion of Oil and Gas Wells and Mines
Charitable Contributions and Other Contributions
Research and Development
Pension Trusts
In addition, individuals who are either earning compensation income, engaged in

business or deriving income from the practice of profession are entitled to personal and
additional exemptions as follows:
Personal Exemptions:
For single individual or married individual judicially decreed as legally separated
with no qualified dependentsP 50,000.00
For head of familyP 50,000.00
For each married individual *P 50,000.00
Note: In case of married individuals where only one of the spouses is deriving
gross income, only such spouse will be allowed to claim the personal exemption.
Additional Exemptions:
For each qualified dependent, an P25,000 additional exemption can be

claimed but only up to 4 qualified dependents
The additional exemption can be claimed by the following:
The husband who is deemed the head of the family unless he explicitly
waives his right in favor of his wife
The spouse who has custody of the child or children in case of legally
separated spouses. Provided, that the total amount of additional
exemptions that may be claimed by both shall not exceed the maximum
additional exemptions allowed by the Tax Code.
The individuals considered as Head of the Family supporting a qualified

dependent
The maximum amount of P 2,400 premium payments on health and/or hospitalization

insurance can be claimed if:
Family gross income yearly should not be more than P 250,000

For married individuals, the spouse claiming the additional exemptions for
the qualified dependents shall be entitled to this deduction
7) Who are required to file the Income Tax returns?
Individuals
Resident citizens receiving income from sources within or outside the
Philippines
employees deriving purely compensation income from 2 or more

employers, concurrently or successively at anytime during the
taxable year
employees deriving purely compensation income regardless of the

amount, whether from a single or several employers during the
calendar year, the income tax of which has not been withheld
correctly (i.e. tax due is not equal to the tax withheld) resulting to
collectible or refundable return
self-employed individuals receiving income from the conduct of

trade or business and/or practice of profession
individuals deriving mixed income, i.e., compensation income and

income from the conduct of trade or business and/or practice of
profession
individuals deriving other non-business, non-professional related

income in addition to compensation income not otherwise subject to
a final tax
individuals receiving purely compensation income from a single

employer, although the income of which has been correctly
withheld, but whose spouse is not entitled to substituted filing
marginal income earners
Non-resident citizens receiving income from sources within the

Philippines
Aliens, whether resident or not, receiving income from sources within the
Philippines
Corporations no matter how created or organized including partnerships
domestic corporations receiving income from sources within and

outside the Philippines
foreign corporations receiving income from sources within the

Philippines
taxable partnerships
Estates and trusts engaged in trade or business
8) Who are not required to file Income Tax returns?

a. An individual who is a minimum wage earner
b. An individual whose gross income does not exceed his total personal and additional
exemptions
c. An individual whose compensation income derived from one employer does not
exceed P 60,000 and the income tax on which has been correctly withheld
d. An individual whose income has been subjected to final withholding tax (alien
employee as well as Filipino employee occupying the same position as that of the alien
employee of regional headquarters and regional operating headquarters of multinational
companies, petroleum service contractors and sub-contractors and offshore-banking units,
non-resident aliens not engaged in trade or business)
e. Those who are qualified under substituted filing. However, substituted filing applies
only if all of the following requirements are present :
the employee received purely compensation income (regardless of

amount) during the taxable year
the employee received the income from only one employer in the
Philippines during the taxable year
the amount of tax due from the employee at the end of the year equals the
amount of tax withheld by the employer
the employees spouse also complies with all 3 conditions stated above
the employer files the annual information return (BIR Form No. 1604-CF)
the employer issues BIR Form No. 2316 (Oct 2002 ENCS version ) to
each employee.
9) Who are exempt from Income Tax?
Non-resident citizen who is:

a) A citizen of the Philippines who establishes to the satisfaction of the
Commissioner the fact of his physical presence abroad with a definite intention to
reside therein
b) A citizen of the Philippines who leaves the Philippines during the taxable year to
reside abroad, either as an immigrant or for employment on a permanent basis
c) A citizen of the Philippines who works and derives income from abroad and
whose employment thereat requires him to be physically present abroad most of the
time during the taxable year
d) A citizen who has been previously considered as a non-resident citizen and who
arrives in the Philippines at any time during the year to reside permanently in the
Philippines will likewise be treated as a non-resident citizen during the taxable year
in which he arrives in the Philippines, with respect to his income derived from
sources abroad until the date of his arrival in the Philippines.
Overseas Filipino Worker, including overseas seaman

An individual citizen of the Philippines who is working and deriving income from
abroad as an overseas Filipino worker is taxable only on income from sources
within the Philippines; provided, that a seaman who is a citizen of the Philippines
and who receives compensation for services rendered abroad as a member of the
complement of a vessel engaged exclusively in international trade will be treated as
an overseas Filipino worker.
NOTE: A Filipino employed as Philippine Embassy/Consulate service personnel of
the Philippine Embassy/consulate is not treated as a non-resident citizen, hence his
income is taxable.
10) What are the procedures in filing Income Tax returns (ITRs)?
For with payment ITRs (BIR Form Nos. 1700 / 1701 / 1701Q / 1702 / 1702Q /
1704)
File the return in triplicate (two copies for the BIR and one copy for the taxpayer)
with the Authorized Agent Bank (AAB) of the place where taxpayer is registered or
required to be registered. In places where there are no AABs, the return will be
filed directly with the Revenue Collection Officer or duly Authorized Treasurer of
the city or municipality in which such person has his legal residence or principal
place of business in the Philippines, or if there is none, filing of the return will be at
the Office of the Commissioner.
For no payment ITRs -- refundable, break-even, exempt and no

operation/transaction, including returns to be paid on 2nd installment and returns
paid through a Tax Debit Memo(TDM)
File the return with the concerned Revenue District Office (RDO) where the
taxpayer is registered. However, "no payment" returns filed late shall be accepted
by the RDO but instead shall be filed with an Authorized Agent Bank (AAB) or
Collection Officer/Deputized Municipal Treasurer (in places where there are no
AABs), for payment of necessary penalties.
11) How is Income Tax payable of individuals (resident citizens and non-resident
citizens)computed?
Gross Income
P ___________
Less: Allowable Deductions (Itemized or Optional)
___________
Net Income
P ___________
Less: Personal & Additional Exemptions
___________
Net Taxable Income
P ___________
Multiply by Tax Rate (5 to 32%)
____________
Income Tax Due: Tax withheld (per BIR From 2316/2304)
P ___________
Income tax payable
P____________
12) How is Income Tax paid?
Through withholding
o
o
o
Generally 10% or 15% if the gross annual business or professional

income exceeds P720,000 per year
20% - Fees paid to directors who are not employees and 20% of
professional fees paid to non-individuals
Other withholding tax rates
Pay the balance as you file the tax return, computed as follows:
Income Tax Due
P ___________
Less: Withholding Tax
___________
Net Income Tax Due
P ___________
13) Is the Minimum Corporate Income Tax (MCIT) an addition to the regular or normal
income tax?
No, the MCIT is not an additional tax. An MCIT of 2% of the gross income as of the end
of taxable year (whether calendar or fiscal year, depending on the accounting period
employed) is imposed on a corporation taxable under Title II of the Tax Code, as
amended, beginning on the 4th taxable year immediately following the taxable year in
which such corporation commenced its business operations when the MCIT is greater
than the regular income tax. The MCIT is compared with the regular income tax, which
is due from a corporation. If the regular income is higher than the MCIT, then the
corporation does not pay the MCIT but the amount of the regular income tax.
Notwithstanding the above provision, however, the computation and the payment of
MCIT, shall likewise apply at the time of filing the quarterly corporate income tax as
prescribed under Section 75 and Section 77 of the Tax Code, as amended. Thus, in the
computation of the tax due for the taxable quarter, if the computed quarterly MCIT is
higher than that quarterly normal income tax, the tax due to be paid for such taxable
quarter at the time of filing the quarterly income tax return shall be the MCIT which is
two percent (2%) of the gross income as of the end of the taxable quarter. In the payment
of said quarterly MCIT, excess MCIT from the previous taxable year/s shall not be
allowed to be credited. Expanded withholding tax, quarterly corporate income tax
payments under the normal income tax, and the MCIT paid in the previous taxable
quarter/s are allowed to be applied against the quarterly MCIT due.
14) Who are covered by MCIT?
The MCIT covers domestic and resident foreign corporations which are subject to the
regular income tax. The term regular income tax refers to the regular income tax rates
under the Tax Code. Thus, corporations which are subject to a special corporate tax
system do not fall within the coverage of the MCIT.
For corporations whose operations or activities are partly covered by the regular income
tax and partly covered by the preferential rate under special law, the MCIT shall apply on
operations by the regular income tax rate. Newly established corporations or firms which
are on their first 3 years of operations are not covered by the MCIT.
15) When does a corporation start to be covered by the MCIT?
A corporation starts to be covered by the MCIT on the 4th year of its business operations.
The period of reckoning which is the start of its business operations is the year when the
corporation was registered with the BIR. This rule will apply regardless of whether the
corporation is using the calendar year or fiscal year as its taxable year.
16) When is the MCIT reported and paid? Is it quarterly?

The MCIT is paid on an annual basis and quarterly basis. The rules are governed by
Revenue Regulations No. 12-2007.
17) How is MCIT computed?
The MCIT is 2% of the gross income of the corporation at the end of the year.
Gross income means gross sales less sales returns, discounts and cost of goods sold.
Passive income, which have been subject to a final tax at source do not form part of gross
income for purposes of the MCIT.
Cost of goods sold includes all business expenses directly incurred to produce the
merchandise to bring them to their present location and use.
For trading or merchandising concern, cost of goods sold means the invoice cost of goods
sold, plus import duties, freight in transporting the goods to the place where the goods are
actually sold, including insurance while the goods are in transit.
For a manufacturing concern, cost of goods manufactured and sold means all costs of
production of finished goods such as raw materials used, direct labor and manufacturing
overhead, freight cost, insurance premiums and other costs incurred to bring the raw
materials to the factory or warehouse.
For sale of services, gross income means gross receipts less sales returns, allowances,
discounts and cost of services which cover all direct costs and expenses necessarily
incurred to provide the services required by the customers and clients including:
o
Salaries and employees benefits of personnel, consultants and specialists

directly rendering the service;
Cost of facilities directly utilized in providing the service such as
depreciation or rental of equipment used;
Cost of supplies
Interest Expense is not included as part of cost of service, except in the case of banks and
other financial institutions.
Gross Receipts means amounts actually or constructively received during the taxable
year. However, for taxpayers employing the accrual basis of accounting, it means
amounts earned as gross income.
18) What is the carry forward provision under the MCIT?
Any excess of the MCIT over the normal income tax may be carried forward on an
annual basis and be credited against the normal income tax for 3 immediately succeeding
taxable years.
19) How would the MCIT be recorded for accounting purposes?
Any amount paid as excess minimum corporate income tax should be recorded in the
corporations books as an asset under account title Deferred charges-MCIT
20) How long can we amend our income tax return?
There is no prescription period for amending the return. When the taxpayer has been
issued a Letter of Authority, he can no longer amend the return.
21) Can a benefactor of a senior citizen claim him/her as additional dependent in addition
to his/her 3 qualified dependent children at P 25,000 each?
No, pursuant to Revenue Regulations 2-94, the benefactor of a senior citizen cannot
claim the additional exemption.
22) What is a tax treaty?
A tax treaty formally known as convention or agreement for the avoidance of double
taxation and the prevention of fiscal evasion with respect to taxes on income (and on
capital) could be defined in terms of its purpose. First, a tax treaty is intended to promote
international trade and investment in several ways, the most important of which is by
allocating taxing jurisdiction between the Contracting States so as to eliminate or mitigate
double taxation of income. Second, a tax treaty is intended to permit the Contracting
States to better enforce their domestic laws so as to reduce tax evasion. These purposes
are in fact incorporated in the title and the preamble.
23) What are the effective Philippine tax treaties?
The Philippines has thirty-seven (37) effective tax treaties. The following tax treaties and
their dates of effectivity as as follows:
Effective Philippine Tax Treaties (as of June 2010)
Country
Date of
Effectivity
Date and Venue of

Signature
1. Australia
January 1, 1980 May 11, 1979, Manila,

Philippines
2. Austria
January 1, 1983 April 4, 1981, Vienna, Austria
3. Bahrain
January 1, 2004 November 7, 2001, Manila,
Philippines
4. Bangladesh
January 1, 2004 September 8, 1997, Manila,

Philippines
5. Belgium
January 1, 1981 October 2, 1976, Manila,

Philippines
6. Brazil
January 1, 1992 Sept. 29, 1983, Brasilia,

Brazil
7. Canada
January 1, 1977 March 11, 1976, Manila,

Philippines
8. China
January 1, 2002 November 18, 1999, Beijing,

China
9. Czech

Philippines
10. Denmark (Renegotiated)
January 1, 1998 June 30, 1995, Copenhagen,

Denmark
11. Finland

Philippines
12. France
January 1, 1978 January 9, 1976, Kingston,

Jamaica
13. Germany
January 1, 1985 July 22, 1983, Manila,

Philippines
14. Hungary
January 1, 1998 June 13, 1997, Budapest,

Hungary
15. India
January 1, 1995 February 12, 1990, Manila,

Philippines
16. Indonesia
January 1, 1983 June 18, 1981, Manila,

Philippines
17. Israel

Philippines
18. Italy
January 1, 1990 December 5, 1980, Rome,

Italy
19. Japan
January 1, 1981 February 13, 1980, Tokyo,

Japan
20. Korea
January 1, 1987 February 21, 1984, Seoul,

Korea
21. Malaysia
January 1, 1985 April 27, 1982, Manila,
Philippines
22. Netherlands

Philippines
23. New Zealand

Philippines
24. Norway

Philippines
25. Pakistan
January 1, 1979 February 22, 1980, Manila,

Philippines
26. Poland
January 1, 1998 September 9, 1992, Manila,

Philippines
27. Romania
January 1, 1998 May 18, 1994, Bucharest,

Romania
28. Russia

Philippines
29. Singapore
January 1, 1977 August 1, 1977, Manila,

Philippines
30. Spain

Philippines
31. Sweden (Renegotiated)

Philippines
32. Switzerland

Philippines
33. Thailand

Philippines
34. United Arab Emirates
January 1, 2009 September 21, 2003, Dubai,

UAE
35. United Kingdom of Great Britain and January 1, 1979 June 10, 1976, London,
Northern Ireland
United Kingdom
36. United States of America

Philippines
37. Vietnam

Philippines
24) What office can we inquire about the said tax treaties?
The International Tax Affairs Division (ITAD).
25) What taxes are covered by Philippine tax treaties?

Income taxes imposed by the domestic laws of the Contracting States, including
substantially similar taxes that may be imposed later, in addition to, or in place, are
covered by the tax treaties. In the Philippines, this is generally limited to Title II (Tax on
Income) of the National Internal Revenue Code of 1997, as amended.
26) How is business income treated under our tax treaties?
The business profits of a resident of a Contracting State shall not be taxable in the
Philippines unless that enterprise of a resident of a Contracting State carries on business
in the Philippines through a permanent establishment.
27) What is the concept of permanent establishment (PE) as used in tax treaties?
PE is defined as a fixed place of business through which the business of the enterprise is
wholly or partly carried on. The concept of permanent establishment is used to determine
the rights of a Contracting State to tax the business profits of enterprises of the other
Contracting State. Under this concept, profits of an enterprise of a Contracting State are
not taxable by the other Contracting State, unless the enterprise carries on business
through a permanent establishment situated in the other Contracting State.
A list of places, circumstances, and activities which constitute a permanent establishment
is provided under the different tax treaties which the Philippines has with other countries.
28) What is the Most-Favored-Nation clause (MFN)?
The appearance of the MFN clause in the tax treaty means that a Contracting State will
grant to a resident of the other Contracting State the same lower rate of tax or exemption
the former has granted to a resident of a third State.
29) What is the tax treatment on immovable property?
Income from an immovable property is taxable in the Contracting State where the
property is situated. This term is generally defined under the domestic laws of the
Contracting States. However, this is further defined in the tax treaties.
30) How are capital gains taxed under our tax treaties?
Gains from the alienation of immovable property or movable property forming part of the
business property of a permanent establishment or pertaining to a fixed base are taxed in
the Philippines if the immovable property or permanent establishment or fixed base is
located here.
Description
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
d.
radio and/or television broadcasting whose gross annual receipts for the preceding year d
not exceed Php 10,000,000.00 and did not opt to register as VAT taxpayers
gas and water utilities

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 news 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
k.
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 chage 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

Telephone and communication companies on their overseas dispatch, message or
conversation originating and transmitted from the Philippines
2.
[return to index]
Monthly Percentage Tax

Tax Form
BIR Form 2551M - Monthly Percentage Tax Return
1. Duly issued Certificate of Creditable Tax Withheld at Source (BIR Form 2307), 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.
shall be paid at the time the return is filed by the taxpayer.
The Percentage Tax
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 of business 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 link (https://efps.bir.gov.ph) for the Job Aid in filing and payment thru said
system.
3. I there is no payment:
Proceed to the RDO where the taxpayer is registered or with the concerned RCO and
present the duly accomplished BIR
attachments.
Receive the taxpayer's copy of BIR
representative.
Form 2551M, together with the required

Form 2551M duly stamp-received by the RDO
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

1. Duly issued Certificate of Creditable Tax Withheld at Source (BIR Form 2307), 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.
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

AAB/RCO/authorized City or Municipal Treasurer.
For eFPS filers, you may click this link

thru said system
2551Q duly validated/stamp-received by the
(https://efps.bir.gov.ph) for the
Job Aid in filing and 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
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 Offering
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
4. Previously filed return and proof of payment, for amended return
Procedures
1. Fill-up BIR Form 2552 in triplicate copies.
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
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
[return to index]
Tax Rates
Coverage
Basis
Tax Rate
Persons exempt from VAT under Sec. Gross Sales or Receipts

116
3%
Domestic carriers and keepers of

garages
Gross Receipts
3%
Gross Receipts
3%
Gross Receipts
2%
Radio and television broadcasting

Gross Receipts
companies whose annual gross
receipts of the preceding year do not
exceed P 10,000,000 and did not opt
3%
International Carriers:
International air/shipping carriers
doing business in the Philippines
Franchise Grantees:
Electric , gas and water utilities
to register asVAT taxpayer

Banks and non-bank financing
intermediaries
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) 5%
Medium term maturity (over 2 years
but not over 4 years)
3%
Long term maturity

1%
Over 4 years but not
over 7 years
0%
Over 7 years
Finance Companies
On Dividends
0%
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
5%
On interest, discounts and other items

of gross income paid to finance
companies and other financial
intermediaries not performing quasi
banking functions
5%
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%
Medium term (over 2 years but not
over 4 years)
3%
Long Term Maturity
Life Insurance Companies (except
Over 4 years but not over 7 years
1%
Over 7 years
0%
Total premiums collected
5%
purely cooperative companies or

associations)
Agents of foreign insurance
companies: (except reinsurance
premium)
Total premium collected
10%
Total premium collected
5%
Cockpits
Gross receipts
18%
Cabarets, Night or Day Clubs
Gross receipts
18%
Boxing exhibitions
Gross receipts
10%
Professional basketball games
Gross receipts
15%
Jai-alai and race track (operators

shall withheld tax on winnings)
Gross receipts
30%
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
Gross selling price or gross value in

money of shares of stocks sold,
bartered, exchanged or otherwise
disposed
of 1%
A corporate issuer/stock 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
Gross selling price or gross 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
Proprietors, lessee or operator of the

following:
Up to 25 %
4%
Over 25% but not over 33 1/3%
2%
Over 33 1/3 %
1%
[return to index]
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
[return to index]
Codal Reference
Sections 116 to 128 of the National Internal Revenue Code
[return to index]
DESCRIPTION
Value-Added Tax is a form of sales tax. It is a tax on consumption levied on the sale,
barter, exchange or lease of goods or properties and services in the Philippines and on
importation of goods into the Philippines. It is an indirect tax, which may be shifted or
passed on to the buyer, transferee or lessee of goods, properties or services.
[return to index]
WHO ARE REQUIRED TO FILE VAT RETURNS
Any person or entity who, in the course of his trade or business, sells, barters,
exchanges, leases goods or properties and renders services subject to VAT, if the
aggregate amount of actual gross sales or receipts exceed One Million Nine
Hundred Nineteen Thousand Five Hundred Pesos (P1,919,500.00).
A person required to register as VAT taxpayer but failed to register
Any person, whether or not made in the course of his trade or business, who
imports goods
[return to index]
MONTHLY VAT DECLARATIONS

Tax Form
BIR Form 2550M - Monthly Value-Added Tax Declaration (February 2007 ENCS)
1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form No.
2. Summary Alphalist of Withholding Agents of Income Payments Subjected to
Withholding Tax At Source (SAWT), if applicable
4. Duly approved Tax Credit Certificate, if applicable
5. Authorization letter, if return is filed by authorized representative.
Procedures
1. Fill-up BIR Form No. 2550M in triplicate copies (two copies for the BIR and
one copy for the taxpayer)
File the Monthly VAT declaration, together with the required

attachments, and pay the VAT due thereon with any Authorized
Agent Bank (AAB) under the jurisdiction of the Revenue District
Office (RDO)/Large Taxpayers District Office (LTDO) where the
taxpayer (head office of the business establishment) is registered or
required to be registered.
The taxpayer must accomplish and submit BIR-prescribed deposit

slip, which the bank teller shall machine validate as evidence that
payment was received by the AAB. The AAB receiving the tax
return shall stamp mark the word "Received" on the return and
machine validate the return as proof of filing the return and payment
of the tax.
In places where there are no duly accredited agent banks, file the
Monthly VAT declaration, together with the required attachments
and pay the VAT due with the Revenue Collection Officer (RCO) or
duly authorized Treasurer of the Municipality where such taxpayer
(head office of the business establishment) is registered or required
to be registered.
The RCO or duly authorized Municipal/City Treasurer shall issue a

Revenue Official Receipt upon payment of the tax.
File the Monthly VAT Declaration, together with the required

attachments with the RDO/LTDO/Large Taxpayers Assistance
Division, Collection Agent or duly authorized Municipal/ City
Treasurer of Municipality/City where the taxpayer (head office of
the business establishment) is registered or required to be registered.
Deadline
Manual Filing
Not later than the 20th day following the end of each month
Through Electronic Filing and Payment System (eFPS):

Business Industry
Group A
Insurance and Pension
Funding
Activities Auxiliary to Financial Intermediation
Construction
Water Transport
Hotels and Restaurants
Land Transport
Period for filing Monthly VAT

Declarations
25 days following the end of the
month
Group B
Manufacture and Repair of Furniture
Manufacture of Basic Metals
month
Manufacture of Chemicals and Chemical Products
Manufacture of Coke, Refined Petroleum & Fuel
Products
Manufacture of Electrical Machinery & Apparatus
N.E.C.
Manufacture of Fabricated Metal Products
Manufacture of Food, Products & Beverages
Manufacture of Machinery & Equipment NEC
Manufacture of Medical, Precision, Optical Instruments
Manufacture of Motor Vehicles, Trailer & Semi-Trailers
Manufacture of Office, Accounting & Computing

Machinery
Manufacture of Other Non-Metallic Mineral Products
Manufacture of Other Transport Equipment
Manufacture of Other Wearing Apparel
Manufacture of Paper and Paper Products
Manufacture of Radio, TV & Communication
Equipment/ Apparatus
Manufacture of Rubber & Plastic Products
Manufacture of Textiles
Manufacture of Tobacco Products
Manufacture of Wood & Wood Products
Manufacturing N.E.C.
Metallic Ore Mining
Non-Metallic Mining & Quarrying
Group C
Retail Sale
Wholesale Trade and Commission Trade
Sale, Maintenance, Repair of Motor Vehicle, Sale of
Automotive Fuel
Collection, Purification and Distribution of Water
Computer and Related Activities
Real Estate Activities

month
Group D
Air Transport
Electricity, Gas, Steam & Hot Water Supply
month
Postal & Telecommunications
Publishing, Printing & Reproduction of Recorded Media
Recreational, Cultural & Sporting Activities
Recycling
Renting of Goods & Equipment
Supporting & Auxiliary Transport Services
Group E
Activities of Membership Organizations, Inc.
Health and Social Work
Public Admin & Defense Compulsory Social Security
Research and Development
Agricultural, Hunting, and Forestry
Farming of Animals
Fishing
Other Service Activities
Miscellaneous Business Activities
Unclassified

month
[return to index]
QUARTERLY VALUE-ADDED TAX RETURN

Tax Form
BIR Form No. 2550Q - Quarterly Value-Added Tax Return (February 2007 ENCS)
Attachments to the Return
1. Duly issued Certificate of Creditable VAT Withheld at Source (BIR Form 2307),
if applicable
2. Summary Alphalist of Withholding Agents of Income Payments Subjected to
Withholding Tax At Source (SAWT), if applicable
4. Duly approved Tax Credit Certificate, if applicable
5. Previously filed return and proof of payment, for amended return
6. Authorization letter, if return is filed by authorized representative
Procedures
1. Fill-up BIR Form 2550Q in triplicate copies (two copies for the BIR and one
copy for the taxpayer)
File the Quarterly VAT Return, together with the required

attachments, and pay the VAT due thereon with any AAB under the
jurisdiction of the RDO/LTDO where the taxpayer (head office of
The taxpayer must accomplish and submit BIR- prescribed deposit

slip, which the bank teller shall machine validate as evidence that
payment was received by the AAB. The AAB receiving the tax
return shall stamp mark the word "Received" on the return and
machine validate that return as proof of filing the return and
payment of the tax.
In places where there are no duly accredited agent banks, file the
Quarterly VAT Return, together with the required attachments and
pay the VAT due with the Revenue Collection Officer (RCO) or
duly authorized Treasurer of the Municipality where such taxpayer
(head office of the business establishment) is registered or required
to be registered.
The RCO or duly authorized Municipal/City Treasurer shall issue a Revenue

Official Receipt upon payment of the tax.
File the Quarterly VAT Return, together with the required

attachments with the RDO/LTDO/Large Taxpayers Assistance
Division, Collection Agent or duly authorized Municipal/City
Treasurer of Municipality/City where the taxpayer (head office of
Reminders:
1. Only one consolidated Monthly VAT Declaration/Quarterly VAT Return
shall be filed covering the results of operation of the head office as well as
the branches for all lines of business subject to VAT.
2. The Quarterly List of Sales and Purchases shall be submitted in magnetic
form using 3.5-inch floppy diskette following the format provided under
Section 4.114-3(g) of RR No. 16-2005.
3. The Quarterly List of Sales and Purchases shall be submitted through
electronic filing facility for taxpayers under the jurisdiction of the Large
Taxpayers Service (LTS) and those enrolled under the eFPS.
Deadline
Within twenty five (25) days following the close of taxable quarter.
[return to index]
TAX RATES
On sale of goods and properties - twelve percent (12%) of the gross selling price
or gross value in money of the goods or properties sold, bartered or exchanged
On sale of services and use or lease of properties - twelve percent (12%) of gross
receipts derived from the sale or exchange of services, including the use or lease
of properties
On importation of goods - twelve percent (12%) based on the total value used by
the Bureau of Customs in determining tariff and customs duties, plus customs
duties, excise taxes, if any, and other charges, such as tax to be paid by the
importer prior to the release of such goods from customs custody; provided, that
where the customs duties are determined on the basis of quantity or volume of the
goods, the VAT shall be based on the landed cost plus excise taxes, if any.
On export sales and other zero-rated sales - 0%
[return to index]
RELATED REVENUE ISSUANCES

REVENUE REGULATIONS (RRs)
Issuance No.
RR No. 13-2008
Subject Matter
Consolidated Regulations on Advance Value-Added Tax on the Sale of
Refined Sugar; Amending and/or Revoking All Revenue Issuances
Issued to this Effect, and for Other Related Purposed
Date of Issue
September 9,
2008
(published in Philippine Star on October 7, 2008)

Digest | Full Text | Annex A-B, E-J | Annex C |
Annex D
RR No. 13-2007
Prescribing the Rules on the Advance Payment of Value-Added

Tax/Percentage Tax on the Transport of Naturally Grown Planted
Timber
Products
(published in Philippine Daily Inquirer on December 7, 2007)
Digest | Full Text | Annex A
RR No. 11-2007 Suspension of the Implementation of Revenue

Regulations
No.
6-2007
(published in Manila Bulletin on August 29, 2007)
Digest | Full Text
RR No. 6-2007 Consolidated Regulations on Advance Value-Added
Tax on the Sale of Refined Sugar, Amending and/or
Revoking all Revenue Issuances Issued to this Effect,
and
for
Other
Related
Purposes
(published in Manila Bulletin on May 11, 2007)
Digest | Full Text | Annex A-E | Annex F-J
RR No. 4-2007 Amending Certain Provisions of RR No. 16-2005, 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. 2-2007 Amending Certain Provisions of RR No. 16-2005, As
December 5,
2007
August 28,
2007
May 9, 2007
March 20,
2007
January 11,
Amended, Otherwise Known as the Consolidated

2007
Value-Added
Tax
Regulations
of
2005
(published in Manila Bulletin on January 12, 2007)
Digest | Full Text
RR No. 16-2005 Consolidated Value-Added Tax Regulations of 2005 October 19,
(published in Manila Times on October 21, 2005)
2005
Digest | Full Text
RR No. 7-2004 Implementing Sec. 109(bb) and (cc) of the National May 21, 2004
Internal Revenue Code, as Amended by RA 9238,
Excluding Services Rendered by Doctors of Medicine
duly Registered with the Professional Regulatory
Commission (PRC), and Services Rendered by
Lawyers Duly Registered with the Integrated Bar of
the Philippines (IBP) from the Coverage of ValueAdded
Tax
(published in Philippine Star on May 28, 2004)
Digest | Full Text
RR No. 4-2004 Supplementing the Rules on the Advance Payment of Value-Added Tax
March 26,
on Sale of Refined Sugar as Provided for in RR 2-2004
2004
(published in Taliba on March 31, 2004)
Digest | Full Text
RR No. 2-2004 Further Enhancing the Rules on the Advance February 26,
Payment of Value-Added Tax on Sale of Refined
2004
Sugar, Amending RR 7-89 and 29-2002
(published in Manila Standard on February 28,
2004)
Digest | Full Text
RR No. 29-2003 Advance Payment of VAT on the Sale of Flour December 1,
(published in Manila Times on December 2, 2003)
2003
Digest | Full Text
RR No. 28-2003 Amending Further Pertinent Provisions of RR 2-98 as November 20,
Amended, Relative to the Issuance of Certificate of
2003
Value-Added Tax Withheld at Source, Thereby
Amending RR 4-2002; and For the Purpose
(published in Manila Times on November 25, 2003)
Digest | Full Text
RR No. 27-2003 Regulations Further Amending the Transitory
October 9,
Provisions of RR 18-99 as Amended by RR 12-2003,
2003
Pertaining to the Deadline for the Usage of Properly
Stamped Unused Non-VAT Invoices or Receipts
(published in Manila Times on October 10, 2003)
Digest | Full Text
RR No. 5-2003 Rules and Regulations To Implement The Remittance February 4,
of the Following: (a) 70% Share of the ARMM in the
2003
Withholding Tax Payments of National Government
Agencies (NGAs) and in the National Collections

from Taxpayers Other Than NGAs Provided for
Under Section 9, Article IX of RA 9054, Amending
Therein Certain Sections of RR 4-98; (b)Allotment to
the Regional Government (RG) of the 30% Share of
the National Government (NG) of all Current Year
Collections of Internal Revenue Taxes Within ARMM
for a Period of Five (5) Years as may be Provided in
the Annual Appropriations Act as Provided for Under
Section 15, Article IX of RA 9054; and c) 50% of the
80% Share of the NG from the Yearly Incremental
Revenue From VAT Collections Within ARMM
Received by the Central Government as Provided for
Under Section 15, in Relation to Section 9, both of
Article IX of RA 9054 As Well As in Relation to
Section 283 of the National Internal Revenue Code
(NIRC)
of
1997
Digest | Full Text
RR No. 29-2002 Enhancing the Rules on the Advance Payment of December 20,
Value- Added Tax on the Sale of Refined Sugar,
2002
thereby Amending RR 7-89, and Other Purposes
(published
in
Philippine
Star
on
December
22,
2002)
Digest | Full Text

RR No. 8-2002 Amending Further Pertinent Provisions of RR 7-95,
June 24,
as Amended , With Respect to the Time of Filing of
2002
Quarterly VAT Returns; Contents and Submission of
Quarterly Total of Monthly Sales and Purchases Per
Supplier or Customer, and Providing for the Penalties
and Effect of Non-Submission Thereof; and
Clarifying Further the Mode of Remittance of VAT
Due
From
Non-Residents
(published in Philippine Daily Inquirer on June 27,
2002)
Digest | Full Text | Attachment 2550 (front) |
Attachment 2550 (back)
RR No. 2-98
Implementing Republic Act No. 8424, "An Act May 17, 1998
Amending the National 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 ORDERS (RMOs)
Issuance No.
Subject Matter
Date of Issue
RMO No. 32009
RMO No. 62008
RMO No. 162007
RMO No. 72006
RMO No. 262005
RMO No. 222004
RMO No. 52004
RMO No. 35-
Amendment and Consolidation of the Guidelines in January 23,

the Conduct of Surveillance and Stock-Taking
2009
Activities, and the Implementation of the
Administrative Sanction of Suspension and
Temporary
Closure
of
Business
Digest | Full Text | Annex A | Annex B | Annex D |
Annex E | Annex F | Excel File Annexes
Prescribing the Guidelines and Procedures in the February 20,
Printing, Requisition, Reporting, Issuance and
2008
Distribution of Certificate of Advance Payment of
Value-Added Tax/ Percentage Tax on the Transport of
Naturally Grown and Planted Timber Products as
Prescribed in RR No. 13-2007 Dated October 15,
2007
Digest | Full Text | Annex A | Annex B-F
Prescribing Additional Procedures in the Audit of
July 23,
Input Taxes Claimed in the VAT Returns by Revenue
2007
Officers and Amending "Annex B" of RMO No. 5398 With Respect to the Checklist of Documents to be
Submitted by a Taxpayer Upon Audit of his/its VAT
Liabilities as well as the Mandatory Reporting
Requirements to be Prepared by the Assigned
Revenue Officer/s Relative Thereto, All of Which
Shall Form an Integral Part of the Docket
Digest | Full Text
Prescribing the guidelines and procedures in the February 28,
processing of applications for zero-rating of
2006
effectively zero-rated transactions for Value-Added
Tax
purposes
Digest | Full Text | Annex A | Annex B-B2 | Annex CD
Suspension of issuance of assessments for deficiency October 21,
Value-Added
Tax
against
cinema/theater
2005
operators/owners
Digest | Full Text
Value-Added Tax (VAT) Exemption Certificate/ May 24, 2004
Identification Card Issued to qualified foreign
embassies and their qualified personnel Amending/
Modifying
RMO
No.
81-99
Digest | Full Text
Prescribing the guidelines and procedures in the February 4,
implementation of RR No. 29-2003 on the advance
2004
payment of Value-Added Tax on the sale of flour
Prescribing the guidelines and procedures in the December 11,
2002
processing and issuance of Authority to Release

Imported Goods (ATRIG) for Excise and ValueAdded
Tax
Purposes
Digest | Full Text | Annex A | Annex B | Annex C |
Annex D | Flowchart
RMO No. 9Tax treatment of sales of goods, properties and
2000
services made by VAT- registered suppliers to BOIregistered manufacturers-exporters with 100% export
sales
Digest
RMO No. 81-99 Issuance of Value-Added Tax (VAT) Exemption
Certificate to all qualified embassies and their
personnel
Digest
RMO No. 40-94 Prescribing the Modified Procedures on the
Processing of Claims for VAT Credit/ Refund
2002
March 29,
2000
November 5,
1999
REVENUE MEMORANDUM CIRCULARS (RMCs)
Issuance No.
Subject Matter
Date of Issue
RMC No. 77Taxability of Directors Fees Received By Directors December 3,
2008
Who are not Employees of the Corporation for VAT
2008
or Percentage Tax Purposes as Espoused Under
Revenue Memorandum Circular No. 34-2008
Digest | Full Text
RMC No. 46Clarification of Issues Concerning Common Carriers
June 20,
2008
by Air and Their Agents Relative to the Revenue and
2008
Receipt
from
Transport
of
Passengers,
Goods/Cargoes and Mail, and from Excess Baggage
Digest | Full Text
RMC No. 34Tax Treatment of Directors Fees for Income Tax and
April 18,
2008
Business
Tax
Purposes
2008
Digest | Full Text
RMC No. 59Clarifying the Effect of Suspension of RR No. 6- September 14,
2007
2007, Otherwise Known As the "Consolidated
2007
Regulations on Advance Value-Added Tax on the
Sale of Refined Sugar, Amending and/or Revoking
All Revenue Issuances Issued to this Effect and for
Other
Related
Purposes"
Digest | Full Text
RMC No. 53Reiteration of the Amendment Made by RA No. 9337
August 7,
2007
Imposing VAT on the Sale of Non-Food Agricultural
2007
Products, Marine and Forest Products and on the Sale
of Cotton and Cotton Seeds in their Original State
Digest | Full Text
RMC No. 39Clarifying the Income Tax and VAT Treatment of
June 13,
2007
Agency Fees/Gross Receipts of Security Agencies

2007
Including the Withholding of Taxes Due Thereon
RMC No. 35Clarifying the Proper VAT and EWT Treatment of
June 30,
2006
Freight and Other Incidental Charges Billed by
2006
Freight
Forwarders
Digest | Full Text
RMC No. 31Value Added Tax (VAT) on the Construction or
May 30,
2006
Renovation of Official Buildings or Properties of the
2006
United
States
of
America
Embassy
RMC No. 30Prescribing the Submission of a Narrative
May 22,
2006
Memorandum Report to Accompany the VAT Credit
2006
Evaluation Report and Requiring the Attachment of
Certain Documents Prior to Approval of the Tax
Credit Certificate (TCC) Recommended by the Tax
and Revenue Group (TRG), Department of Finance
One-Stop Shop Inter-Agency Tax Credit and Duty
Drawback
Center
(DOF-OSS)
Digest | Full Text
RMC No. 22Clarifying certain issues relating to the April 6, 2006
2006
implementation of the increase in the Value-Added
Tax rate from 10% to 12% on the sale of goods
pursuant
to
Republic
Act
No.
9337
Digest | Full Text
RMC No. 21Clarification of Issues on How to Fill-up the new April 6, 2006
2006
Version of VAT Forms (September, 2005 Version) and
other
Related
Issues
Digest | Full Text
RMC No. 8-2006Clarifying certain issues relating to the February 1,
implementation of the increase in the VAT rate from
2006
10% to 12% pursuant to Republic Act No. 9337
Digest | Full Text
RMC No. 5-2006Prescribing the use of the Government Money January 20,
Payment Chart Implementing Sections 2.57.2, 4.114
2006
and 5.116 of Revenue Regulations No. 2-98 as
amended by Revenue Regulations No. 16-2005 in
relation to Sections 57 (B), 114 (C) and 116 to 123 of
Republic Act No. 8424 as amended by Republic Act
No.
9337
RMC No. 72Transition procedures for all Electronic Filing and December 22,
2005
Payment System filers (Large Taxpayers/Top 10,000
2005
Corporations) in filing tax returns affected by the new
VAT
Law
(R.A.
9337)
Digest | Full Text
RMC No. 68Enhanced VAT forms BIR Form No. 2550M December 8,
2005
(Monthly Value-Added Tax Declaration) and BIR
2005
Form No. 2550Q (Quarterly Value-Added Tax
Return)
September
2005
version
Digest | Full Text | Annex A-1 | Annex A-2 | Annex
B-1 | Annex B-2
RMC No. 62Revised guidelines in the registration and invoicing November 3,
2005
requirements including clarification on common
2005
issues affecting Value-Added Tax (VAT) taxpayers
Pursuant to RA No. 9337 (An Act Amending Sections
27, 28, 34, 106, 108, 109, 110, 111, 112, 113, 114,
116, 117, 119, 121, 148, 151, 236, 237 and 288 of the
National Internal Revenue Code of 1997, as
Amended,
and
for
other
Purposes)
Digest | Full Text
RMC No. 57Attachments to the quarterly VAT return to be filed October 20,
2005
starting
October
25,
2005
2005
Digest | Full Text
RMC No. 52Value-Added Tax (VAT) Liability of the Tollway
October 3,
2005
Industry
2005
Digest | Full Text
RMC No. 29Clarifying the provisions of Republic Act No. 9337
July 1,
2005
(VAT Law of 2005) applicable to the petroleum
2005
industry
Digest | Full Text
RMC No. 70Clarification on proper determination of amount of
November 23,
2004
Value-Added Tax on VAT invoices or VAT official
2004
receipts
Digest | Full Text
RMC No. 60Clarification regarding the withholding of creditable September 23,
2004
Value-Added Tax by government offices for
2004
purchases of P1,000.00 and below
Digest | Full Text
RMC No. 37Settlement of the Value-Added Tax liabilities of
June 16,
2004
pawnshops for taxable years 1996 to 2002
2004
Digest | Full Text | Annex A | Annex 1 | Annex 2
RMC No. 9-2004Guidelines and Policies Applicable to the Business
February 20,
Tax Applicable to Banks and Non-Bank Financial
2004
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, byExcluding Several Services from the
Coverage of the Value-Added Tax and Re-Imposing
the Gross Receipts Tax on Banks and Non-Bank
Financial IntermediariesPerforming Quasi-Banking
Functions and Other Non-Bank Financial
Intermediaries Beginning January 1, 2004
Digest | Full Text | RA No. 9238
RMC No. 2-2004Clarifying
the Issues on VAT Taxable

Transactions of Philippine Ports Authority
Amending Revenue Memorandum Circular No.
20-88, Pursuant to Republic Act No. 7716 as
Implemented by Revenue Regulations No. 795
Digest | Full Text
January 7,
2004
RMC No. 6-2003Clarifying Certain Issues Relative to the Services January 22,
Rendered by Individual Professional Practitioners,
2003
General Professional Partnerships, Entertainers, and
Professional Athletes Who Are Subject to the ValueAdded Tax or Percentage Tax, Whichever is
Applicable,
Beginning
January
1,
2003
RMC No. 61Issuance of VAT Invoices/Receipt for NonOctober 8,
2003
VAT/Exempt Sale of Goods, Properties or Services
2003
Digest | Full Text
RMC No. 49Amending Answer to Question Number 17 of August 27,
2003
Revenue Memorandum Circular No. 42-2003 and
2003
Providing Additional Guidelines on Issues Relative to
the Processing of Claims for Value-Added Tax (VAT)
Credit/Refund, Including Those Filed with the Tax
and Revenue Group, One-Stop Shop Inter-Agency
Tax Credit and Duty Drawback Center, Department
of Finance (OSS-DOF) by Direct Exporters
Digest | Full Text
RMC No. 42Clarifying certain issues raised relative to the
July 23,
2003
processing of claims for Value-Added Tax (VAT)
2003
credit/refund, including those filed with the Tax and
Revenue Group, One-Stop Shop Inter-Agency Tax
Credit and Duty Drawback Center, Department of
Finance
(OSS-DOF)
by
Direct
Exporters
Digest | Full Text
RMC No. 30Clarification of Paragraph 1-Q of Revenue
May 21,
2003
Memorandum
Circular
No.
28-2003
2003
Digest | Full Text
RMC No. 56Taxability of Health Maintenance Organizations December 18,
2002
(HMOs)
for
VAT
purposes
Digest
Taxability of Pawnshop Operators for VAT Purposes
RMC No. 452001

RMC No. 28Taxability of Movie/Cinema House Operators for
2001
VAT Purposes
RMC No. 25-99 Disseminating the Ruling of the Commissioner of
Internal Revenue on the Non-eligibility for VAT
Zero-Rating of Automobile Sales to Entities
Registered with PEZA, SBMA and Clark
Development Authority
RMC No. 32-99 Japanese
Contractors
undertaking
Overseas
Economic Cooperation Fund of Japan (OECF)
Funded Project are Exempt from the eight and one
half percent (8.5%) creditable VAT imposed under
Section 114(C) of the Tax Code of 1997 and to the
One Percent (1%) Expanded Withholding Tax (EWT)
imposed under Section 2.57.2(E) of RR No. 2-98
implementing Section 57(B) of the Tax Code of 1997
2002
October 12,
2001
July 2,
2001
March 18,
1999
May 3,
1999
[return to index]
CODAL REFERENCE
Title IV, Sections 105 to 115 of the National Internal Revenue Code of 1997, as amended
[return to index]
FREQUENTLY ASKED QUESTIONS

I. General VAT Queries
Who are liable to register as VAT taxpayers?
Any person who, in the course of trade or business, sells, barters or exchanges
goods or properties or engages in the sale or exchange of services shall be liable to
register if:
a. His gross sales or receipts for the past twelve (12) months, other than
those that are exempt under Section 109 (A) to (U), have exceeded One
Million Five Hundred Thousand Pesos (P1,500,000.00): or
b. There are reasonable grounds to believe that his gross sales or receipts for
the next twelve (12) months, other than those that are exempt under Section
109 (A) to (U), will exceed One Million Five Hundred Thousand Pesos
(P1,500,000.00).
When is a new VAT taxpayer required to apply for registration and pay the
registration fee?
New VAT taxpayers shall apply for registration as VAT Taxpayers and pay the
corresponding registration fee of five hundred pesos (P500.00) using BIR Form
No. 0605 for every separate or distinct establishment or place of business before
the start of their business following existing issuances on registration.
Thereafter, taxpayers are required to pay the annual registration fee of five hundred
pesos (P500.00) not later than January 31, every year.
What compliance activities should a VAT taxpayer, after registration as such, do
promptly or periodically?
The following compliance activities must be performed by a VAT-registered
taxpayer:
a. Pay the annual registration fee of P500.00 for every place of business or
establishment that generates sales;
b. Register the books of accounts of the business/occupation/calling,
including practice of profession, before using the same;
c. Register the sales invoices and official receipts as VAT-invoices or VAT
official receipts for use on transactions subject to VAT. (If there are other
transaction not subject to VAT, a separate set of non-VAT invoices or nonVAT official receipts need to be registered for use on transactions not subject
to VAT);
d. Filing of the Monthly Value-added Tax Declaration on or before the 20th
day following the end of the taxable month (for manual filers)/on or before
the prescribed due dates enunciated in RR No. 16-2005 (for e-filers) using
BIR Form No. 2550M and of the Quarterly VAT Return on or before the 25th
day following the end of the taxable quarter using BIR Form No. 2550Q,
reflecting therein gross receipts (for seller of service)/ gross sales (for seller
of goods) and output tax (VAT on sales); purchases of goods and services
made in the course of trade or business/exercise of profession and input tax
(VAT on purchases), other allowable tax credits as in the case of advance
VAT payment and VAT withheld by government payors, and VAT payable or
excess input VAT, whichever is applicable, with the accredited agent banks
(AABs) of the BIR or Revenue Collection Officers (RCOs) of the BIR (in
areas without AAB), for returns with payment, or with the RDO/LTDO
having jurisdiction over the taxpayer (home RDO/LTDO), for returns
without payment. (The monthly VAT Declaration and the Quarterly VAT
Return shall reflect the consolidated total for all the taxable lines of activity
and all the establishments - head office and branches);
e. Submit with the RDO/LTDO having jurisdiction over the taxpayer, on or
before the deadline set in the filing of the Quarterly VAT Return, the soft
copy of the Quarterly Schedule of Monthly Sales and Output Tax (if the
quarterly sales exceed P2,500,000.00), and the soft copy of the Quarterly
Schedule of Monthly Domestic Purchases and Input Tax/ the soft copy of the
Schedule of Transactional/Individual Importation ( if the quarterly total
purchases exceed P1,000,000.00), reflecting therein the required data
prescribed under existing revenue issuances.
How do we determine the main or principal business of a taxpayer who is engaged
in mixed business activities?
In determining the main or principal business of a taxpayer, we apply the
predominance test. Under this test, if more than fifty (50%) of its gross sales and/or
gross receipts comes from its business/es subject to VAT, its main/principal
business falls within the VAT system making its status as a VAT person. Otherwise,
he can not be considered as a VAT person eligible for the election provided for
under Section 109(2) of the Tax Code.
What is the liability of a taxpayer becoming liable to VAT and did not register as
such?
Any person who becomes liable to VAT and fails to register as such shall be liable
to pay the output tax as if he is a VAT-registered person, but without the benefit of
input tax credits for the period in which he was not properly registered.
Who may opt to register as VAT and what will be his liability?
1. Any person who is VAT-exempt under Sec. 4.109-1 (B) (1) (V) not required to
register for VAT may, in relation to Sec. 4.109-2, elect to be VAT-registered by
registering with the RDO that has jurisdiction over the head office of that person,
and pay the annual registration fee of P500.00 for every separate and distinct
establishment.
2. Any person who is VAT-registered but enters into transactions which are exempt
from VAT (mixed transactions) may opt that the VAT apply to his transactions
which would have been exempt under Section 109(1) of the Tax Code, as amended
[Sec. 109(2)].
3. Franchise grantees of radio and/or television broadcasting whose annual gross

receipts of the preceding year do not exceed ten million pesos (P10,000,000.00)
derived from the business covered by the law granting the franchise may opt for
VAT registration. This option, once exercised, shall be irrevocable. (Sec. 119, Tax
Code).
4. Any person who elects to register under optional registration shall not be allowed
to cancel his registration for the next three (3) years.
The above-stated taxpayers may apply for VAT registration not later than ten (10)
days before the beginning of the calendar quarter and shall pay the registration fee
unless they have already paid at the beginning of the year. In any case, the
Commissioner of Internal Revenue may, for administrative reason deny any
application for registration. Once registered as a VAT person, the taxpayer shall be
liable to output tax and be entitled to input tax credit beginning on the first day of
the month following registration.
What are the instances when a VAT-registered person may cancel his VAT
registration?
1. If he makes a written application and can demonstrate to the commissioner's
satisfaction that his gross sales or receipts for the following twelve (12) months,
other than those that are exempt under Section 109 (A) to (U), will not exceed one
million five hundred thousand pesos (P1,500,000.00); or
2. If he has ceased to carry on his trade or business, and does not expect to
recommence any trade or business within the next twelve (12) months.
When will the cancellation for registration be effective?
The cancellation for registration will be effective from the first day of the following
month the cancellation was approved.
What is the invoicing/ receipt requirement of a VAT-registered person?
A VAT registered person shall issue :
1. A VAT invoice for every sale, barter or exchange of goods or properties;
and
2. A VAT official receipt for every lease of goods or properties and for every
sale, barter or exchange of services.
May a VAT-registered person issue a single invoice/ receipt involving VAT and NonVAT transactions?
Yes. He may issue a single invoice/ receipt involving VAT and non-VAT
transactions provided that the invoice or receipt shall clearly indicate the breakdown of the sales price between its taxable, exempt and zero-rated components and
the calculation of the Value-Added Tax on each portion of the sale shall be shown
on the invoice or receipt.
May a VAT- registered person issue separate invoices/ receipts involving VAT and
Non-VAT transactions?
Yes. A VAT registered person may issue separate invoices/ receipts for the taxable,
exempt, and zero-rated component of its sales provided that if the sales is exempt
from value-added tax, the term "VAT-EXEMPT SALE" shall be written or printed
prominently on the invoice or receipt and if the sale is subject to zero percent (0%)
VAT, the term "ZERO-RATED SALE" shall be written or printed prominently on
the invoice or receipt.
How is the Value-Added Tax presented in the receipt/ invoice?
The amount of the tax shall be shown as a separate item in the invoice or receipt.
Sample:
Sales
Price
VAT
Invoice Amount
P
100,000.
00
12,000.00
112,000.00
What is the information that must be contained in the VAT invoice or VAT official
receipt?
1. Name of Seller
2. Business Style of the Seller
3. Business Address of the Seller
4. Statement that the seller is a VAT-registered person, followed by his TIN
5. Name of Buyer
6. Business Style of Buyer
7. Address of Buyer
8. TIN of buyer, if VAT- registered and amount exceed P1,000.00
9. Date of transaction
10. Quantity
11. Unit cost
12. Description of the goods or properties or nature of the service
13. Purchase price plus the VAT, provided that:
The amount of tax shall be shown as a separate item in the invoice

or receipt;
If the sale is exempt from VAT, the term "VAT-EXEMPT SALE"
shall be written or printed prominently on the invoice or receipt;
If the sale is subject to zero percent (0%) VAT, the term "ZERORATED SALE" shall be written or printed prominently on the
invoice receipt; and
If the sale involves goods, properties or services some of which are
subject to and some of which are zero-rated or exempt from VAT,
the invoice or receipt shall clearly indicate the breakdown of the
sales price between its taxable, exempt and zero-rated components,
and the calculation of the VAT on each portion of the sale shall be
shown on the invoice or receipt.
14. Authority to Print Receipt Number at the lower left corner of the invoice or
receipt.
What is the liability of a taxpayer not registered as VAT and issues a VAT invoice/
receipt?
The non-VAT registered person shall, in addition to paying the percentage tax
applicable to his transactions, be liable to VAT imposed in Section 106 or 108 of
the Tax Code without the benefit of any input tax credit plus 50% surcharge on the
VAT payable (output tax). If the invoice/ receipts contain the required information,
purchaser shall be allowed to recognize an input tax credit.
What is the liability of a VAT-registered person in the issuance of a VAT invoice/
receipt for VAT-exempt transactions?
If a VAT-registered person issues a VAT invoice or VAT official receipt for a VATexempt transaction but fails to display prominently on the invoice or receipt the
words "VAT-EXEMPT SALE", the transaction shall become taxable and the issuer
shall be liable to pay the VAT thereon. The purchaser shall be entitled to claim an
input tax credit on his purchase.
What is "output tax"?

Output tax means the VAT due on the sale, lease or exchange of taxable goods or
properties or services by any person registered or required to register under Section
236 of the Tax Code.
What is "input tax"?
Input tax means the VAT due on or paid by a VAT-registered on importation of
goods or local purchase of goods, properties or services, including lease or use of
property in the course of his trade or business. It shall also include the transitional
input tax determined in accordance with Section 111 of the Tax Code, presumptive
input tax and deferred input tax from previous period.
What comprises "goods or properties"?
The term "goods or properties" shall mean all tangible and intangible objects,
which are capable of pecuniary estimation and shall include, among others:
a. Real properties held primarily for sale to customers or held for lease in the
ordinary
course
of
trade
or
business;
b. The right or the privilege to use patent, copyright, design or model, plan,
secret formula or process, goodwill, trademark, trade brand or other like
property
or
right;
c. The right or privilege to use in the Philippines of any industrial,
commercial
or
scientific
equipment;
d. The right or the privilege to use motion picture films, films, tapes and
discs;
and
e. Radio, television, satellite transmission and cable television time.
What comprises "sale or exchange of services"?
The term "sale or exchange of services" means the performance of all kinds of
services in the Philippines for others for a fee, remuneration or consideration,
whether in kind or in cash, including those performed or rendered by the following:
a. Construction and service contractors;
b. Stock, real estate, commercial, customs and immigration brokers;
c. Lessors of property, whether personal or real;
d. Persons engaged in warehousing services;
e. Lessors or distributors of cinematographic films;
f. Persons engaged in milling, processing, manufacturing or repacking goods

for others;
g. Proprietors, operators or keepers of hotels, motels, rest houses, pension
houses, inns, resorts, theatres, and movie houses;
h. Proprietors or operators of restaurants, refreshment parlors, cafes, and
other eating places, including clubs and caterers;
i. Dealers in securities;
j. Lending investors;
k. Transportation contractors on their transport of goods or cargoes,
including persons who transport goods or cargoes for hire and other domestic
common carriers by land relative to their transport of goods or cargoes;
l. Common carriers by air and sea relative to their transport of passengers,
goods or cargoes from one place in the Philippines to another place in the
Philippines;
m. Sales of electricity by generation, transmission, and/or distribution
companies;
n. Franchise grantees of electric utilities, telephone and telegraph, radio
and/or television broadcasting and all other franchise grantees, except
franchise grantees of radio and/or television broadcasting whose annual
gross receipts of the preceding year do not exceed Ten Million Pesos
(P10,000,000.00), and franchise grantees of gas and water utilities;
o. Non-life insurance companies (except their crop insurances), including
surety, fidelity, indemnity and bonding companies; and
p. Similar services regardless of whether or not the performance thereof
calls for the exercise of use of the physical or mental faculties.
The phrase "sale or exchange of services" shall likewise include:
a. The lease of use of or the right or privilege to use any copyright, patent,
design or model, plan, secret formula or process, goodwill, trademark, trade
brand or other like property or right;
b. The lease or the use of, or the right to use of any industrial, commercial or
scientific equipment;
c. The supply of scientific, technical, industrial or commercial knowledge or

information;
d. The supply of any assistance that is ancillary and subsidiary to and is
furnished as a means of enabling the application or enjoyment of any such
property, or right or any such knowledge or information;
e. The supply of services by a nonresident person or his employee in
connection with the use of property or rights belonging to, or the installation
or operation of any brand, machinery or other apparatus purchased from such
non-resident person;
f. The supply of technical advice, assistance or services rendered in
connection with technical management or administration of any scientific,
industrial or commercial undertaking, venture, project or scheme;
g. The lease of motion picture films, films, tapes and discs; and
h. The lease or the use of or the right to use radio, television, satellite
transmission and cable television time.
What is a zero-rated sale?
It is a sale, barter or exchange of goods, properties and/or services subject to 0%
VAT pursuant to Sections 106 (A) (2) and 108 (B) of the Tax Code. It is a taxable
transaction for VAT purposes, but shall not result in any output tax. However, the
input tax on purchases of goods, properties or services, related to such zero-rated
sales, shall be available as tax credit or refund in accordance with RR No. 16-2005.
What transactions are considered as zero-rated sales?
The following services performed in the Philippines by VAT-registered person shall
be subject to zero percent (0%) rate:
a. Processing, manufacturing or repacking goods for other persons doing
business outside the Philippines which goods are subsequently exported
where the services are paid for in acceptable foreign currency and accounted
for in accordance with the rules and regulations of the Bangko Sentral ng
Pilipinas (BSP);
b. Services other than processing, manufacturing or repacking rendered to a
person engaged in business conducted outside the Philippines or to a nonresident person engaged in business who is outside the Philippines when the
services are performed, the consideration for which is paid for in acceptable
foreign currency and accounted for in accordance with the rules and
regulations of the Bangko Sentral ng Pilipinas (BSP);
c. Services rendered to persons or entities whose exemption under special

laws or international agreements to which the Philippines is a signatory
effectively subjects the supply of such services to zero percent (0%) rate;
d. Services rendered to persons engaged in international shipping or air
transport operations, including leases of property for use thereof; Provided,
however, that the services referred to herein shall not pertain to those made
to common carriers by air and sea relative to their transport of passengers,
goods or cargoes from one place in the Philippines to another place in the
Philippines, the same being subject to twelve percent (12%) VAT under Sec.
108 of the Tax Code starting Feb. 1, 2006;
e. Services performed by subcontractors and/or contractors in processing,
converting, or manufacturing goods for an enterprise whose export sales
exceeds seventy percent (70%) of total annual production;
f. Transport of passengers and cargo by domestic air or sea carriers from the
Philippines to a foreign country. Gross receipts of international air carriers
doing business in the Philippines and international sea carriers doing
business in the Philippines are still liable to a percentage tax of three percent
(3%) based on their gross receipts as provided for in Sec. 118 of the Tax
Code but shall not be liable to VAT; and
g. Sale of power or fuel generated through renewable sources of energy such
as, but not limited to, biomass, solar, wind, hydropower, geothermal and
steam, ocean energy, and other shipping sources using technologies such as
fuel cells and hydrogen fuels; Provided, however that zero-rating shall apply
strictly to the sale of power or fuel generated through renewable sources of
energy, and shall not extend to the sale of services related to the maintenance
or operation of plants generating said power .
The following sales by VAT-registered persons shall be subject to zero percent
(0%) rate:
a. Export sales
The sale and actual shipment of goods from the Philippines to

a foreign country, irrespective of any shipping arrangement
that may be agreed upon which may influence or determine
the transfer of ownership of the goods so exported, paid in
acceptable foreign currency or its equivalent in goods or
services, and accounted for in accordance with the rules and
regulations of the Bangko Sentral ng Pilipinas (BSP);
The sale of raw materials or packaging materials to a nonresident buyer for delivery to as resident local export-oriented
enterprise to be used in manufacturing, processing, packing or

repacking in the Philippines of the said buyer's goods, paid for
in acceptable foreign currency, and accounted for in
accordance with the rules and regulations of the BSP;
The sale of raw materials or packaging materials to an exportoriented enterprise whose export sales exceed seventy percent
(70%) of total annual production;
Sale of gold to the BSP;
Transactions considered export sales under Executive Order
No. 226, otherwise known as the Omnibus Investments Code
of 1987, and other special laws; and
The sale of goods, supplies, equipment and fuel to persons
engaged in international shipping or international air transport
operations; Provided, that the same is limited to goods,
supplies, equipment and fuel pertaining to or attributable to
the transport of goods and passengers from a port in the
Philippines directly to a foreign port, or vice-versa without
docking or stopping at any other port in the Philippines unless
the docking or stopping at any other Philippine port is for the
purpose of unloading passengers and/or cargoes that
originated from abroad, or to load passengers and/or cargoes
bound for abroad; Provided, further, that if any portion of
such fuel, goods or supplies is used for purposes other than
the mentioned in this paragraph, such portion of fuel, goods
and supplies shall be subject to twelve percent (12%) output
VAT.
b. Foreign Currency Denominated Sales

The sale to a non-resident of goods, except those mentioned in
Sections 149 and 150 of the Tax Code, assembled or manufactured in
the Philippines for delivery to a resident in the Philippines, paid for in
acceptable foreign currency and accounted for in accordance with the
rules and regulations of the BSP.
c. Sales to Persons or Entities Deemed Tax-exempt under Special Law or
International Agreement
Sale of goods or property to persons or entities who are tax-exempt
under special laws or international agreements to which the
Philippines is a signatory, such as, Asian Development Bank (ADB),
International Rice Research Institute (IRRI), etc.
Where will taxpayers file their applications for VAT zero-rating?
Taxpayers shall file their application directly with the Audit Information, Tax
Exemption and Incentives Division (AITEID) under the Assessment Service, or
with the LTAID I and II, BIR National Office, as the case may be.
What is a Contractor's Final Payment Release Certificate and where should
taxpayers file their application for this?
The Contractor's Final Payment Release Certificate is issued by the BIR before a
government contractor is fully paid for his contract with the government.
Taxpayers may file their application at the BIR National Office at the Audit
Information, Tax Exemption and Incentives Division (AITEID)
What transactions are considered deemed sales?
The following transactions are considered as deemed sales:
a. Transfer, use or consumption, not in the course of business, of goods or
properties originally intended for sale or for use in the course of business.
Transfer of goods or properties not in the course of business can take place
when VAT-registered person withdraws goods from his business for his
personal use;
b. Distribution or transfer to:
Shareholders or investors as share in the profits of the VATregistered person; or

Creditors in payment of debt or obligation
c. Consignment of goods if actual sale is not made within sixty (60) days
following the date such goods were consigned. Consigned goods returned by
the consignee within the 60-day period are not deemed sold;
d. Retirement from or cessation of business, with respect to all goods on
hand, whether capital goods, stock-in-trade, supplies or materials as of the
date of such retirement or cessation, whether or not the business is continued
by the new owner or successor. The following circumstances shall, among
others, give rise to transactions "deemed sale";
Change of ownership of the business. There is a change in the

ownership of the business when a single proprietorship
incorporated; or the proprietor of a single proprietorship sells
his entire business.
Dissolution of a partnership and creation of a new partnership
which takes over the business.
What is VAT-exempt sale?

It is a sale of goods, properties or service and the use or lease of properties which is
not subject to output tax and whereby the buyer is not allowed any tax credit or
input tax related to such exempt sale.
What are the VAT-exempt transactions?
a. Sale or importation of agricultural and marine food products in their original
state, livestock and poultry of a kind generally used as, or yielding or producing
foods for human consumption; and breeding stock and genetic materials therefore;
b. Sale or importation of fertilizers; seeds, seedlings and fingerlings; fish, prawn,
livestock and poultry feeds, including ingredients, whether locally produced or
imported, used in the manufacture of finished feeds (except specialty feeds for race
horses, fighting cocks, aquarium fish, zoo animals and other animals considered as
pets);
c. Importation of personal and household effects belonging to residents of the
Philippines returning from abroad and non-resident citizens coming to resettle in
the Philippines; Provided, that such goods are exempt from custom duties under the
Tariff and Customs Code of the Philippines;
d. Importation of professional instruments and implements, wearing apparel,
domestic animals, and personal household effects (except any vehicle, vessel,
aircraft, machinery and other goods for use in the manufacture and merchandise of
any kind in commercial quantity) belonging to persons coming to settle in the
Philippines, for their own use and not for sale, barter or exchange, accompanying
such persons, or arriving within ninety (90) days before or after their arrival, upon
the production of evidence satisfactory to the Commissioner of Internal Revenue,
that such persons are actually coming to settle in the Philippines and that the
change of residence is bonafide;
e. Services subject to percentage tax under Title V of the Code, as amended;
f. Services by agricultural contract growers and milling for others of palay into
rice, corn into grits, and sugar cane into raw sugar;
g. Medical, dental, hospital and veterinary services except those rendered by
professionals;
h. Educational services rendered by private educational institutions duly accredited
by the Department of Education (DepED), the Commission on Higher Education
(CHED) and the Technical Education and Skills Development Authority (TESDA)
and those rendered by the government educational institutions;
i. Services rendered by individuals pursuant to an employer-employee relationship;

j. Services rendered by regional or area headquarters established in the Philippines
by multinational corporations which act as supervisory, communications and
coordinating centers for their affiliates, subsidiaries or branches in the Asia-Pacific
Region and do not earn or derive income from the Philippines;
k. Transactions which are exempt under international agreements to which the
Philippines is a signatory or under special laws except those granted under P.D. No.
529 - Petroleum Exploration Concessionaires under the Petroleum Act of 1949;
l. Sales by agricultural cooperatives duly registered and in good standing with the
Cooperative Development Authority (CDA) to their members, as well as of their
produce, whether in its original state or processed form, to non-members, their
importation of direct farm inputs, machineries and equipment, including spare parts
thereof, to be used directly and exclusively in the production and/or processing of
their produce;
m. Gross receipts from lending activities by credit or multi-purpose cooperatives
duly registered and in good standing with the Cooperative Development Authority;
n. Sales by non-agricultural, non-electric and non-credit cooperatives duly
registered with and in good standing with CDA; Provided, that the share capital
contribution of each member does not exceed Fifteen Thousand Pesos (P15,000.00)
and regardless of the aggregate capital and net surplus ratably distributed among
the members;
o. Export sales by persons who are not VAT-registered;
p. The following sales of real properties are exempt from VAT, namely:
1. Sale of real properties not primarily held for sale to customers or held for
lease in the ordinary course of trade or business;
2. Sale of real properties utilized for low-cost housing as defined by RA No.
7279, otherwise known as the "Urban Development and Housing Act of
1992" and other related laws, such as RA No. 7835 and RA No. 8763;
3. Sale of real properties utilized for specialized housing as defined under
RA No. 7279, and other related laws, such as RA No. 7835 and RA No.
8763, wherein price ceiling per unit is P225,000.00 or as may from time to
time be determined by the HUDCC and the NEDA and other related laws;
4. Sale of residential lot valued at One Million Five Hundred Thousand
Pesos (P1,500,000.00) and below, or house and lot and other residential
dwellings valued at Two Million Five Hundred Thousand Pesos
(P2,500,000.00) and below where the instrument of sale/ transfer/ disposition

was executed on or after July 1, 2005; Provided, that not later than January
31, 2009 and every three (3) years thereafter, the amounts stated herein shall
be adjusted to its present value using the Consumer Price Index, as published
by the National Statistics Office (NSO); Provided, further, that such
adjustment shall be published through revenue regulations to be issued not
later than March 31 of each year.
q. Lease of residential units with a monthly rental per unit not exceeding Ten
Thousand Pesos (P10,000.00), regardless of the amount of aggregate rentals
received by the lessor during the year; Provided, that not later than January 31,
2009 and every three (3) years thereafter, the amount of P10,000.00 shall be
adjusted to its present value using the Consumer Price Index, as published by the
NSO;
r. Sale, importation, printing or publication of books and any newspaper,
magazine, review or bulletin which appears at regular intervals with fixed prices
for subscription and sale and which is not devoted principally to the publication of
paid advertisements;
s. Sale, importation or lease of passenger or cargo vessels and aircraft, including
engine equipment and spare parts thereof for domestic or international transport
operations; Provided, that the exemption from VAT on the importation and local
purchase of passenger and/or cargo vessels shall be limited to those of one hundred
fifty (150) tons and above, including engine and spare parts of said vessels;
Provided, further, that the vessels to be imported shall comply with the age limit
requirement, at the time of acquisition counted from the date of the vessel's original
commissioning, as follows: (a) for passenger and/or cargo vessel, the age limit is
fifteen (15) years old, (b) for tankers, the age limit is ten (10) year old, and (c) for
high-speed passengers crafts, the age limit is five (5) years old; Provided, finally,
that exemption shall be subject to the provisions of Section 4 of Republic Act No.
9295, otherwise known as "The Domestic Shipping Development Act of 2004";
t. Importation of life-saving equipment, safety and rescue equipment and
communication and navigational safety equipment, steel plates and other metal
plates including marine-grade aluminum plates, used for shipping transport
operations; Provided, that the exemption shall be subject to the provisions of
Section 4 of Republic Act No. 9295, otherwise known as "The Domestic Shipping
Development Act of 2004".
u. Importation of capital equipment, machinery, spare parts, life-saving and
navigational equipment, steel plates and other metal plates including marine-grade
aluminum plates to be used in the construction, repair, renovation or alteration of
any merchant marine vessel operated or to be operated in the domestic trade.
Provided, that the exemption shall be subject to the provisions of Section 19 of
Republic Act No. 9295, otherwise known as the "The Domestic Shipping
Development Act of 2004".
v. Importation of fuel, goods and supplies engaged in international shipping or air
transport operations; Provided, that the said fuel, goods and supplies shall be used
exclusively or shall pertain to the transport of goods and/or passenger from a port
in the Philippines directly to a foreign port, or vice-versa, without docking or
stopping at any other port in the Philippines unless the docking or stopping at any
other Philippine port is for the purpose of unloading passengers and/or cargoes that
originated form abroad, or to load passengers and/or cargoes bound for abroad;
Provided, further, that if any portion of such fuel, goods or supplies is used for
purposes other that the mentioned in the paragraph, such portion of fuel, goods and
supplies shall be subject to 12% VAT;
w. Services of banks, non-bank financial intermediaries performing quasi-banking
functions, and other non-bank financial intermediaries, such as money changers
and pawnshops, subject to percentage tax under Sections 121 and 122, respectively
of the Tax Code; and
x. Sale or lease of goods or properties or the performance of services other than
the transactions mentioned in the preceding paragraphs, the gross annual sales
and/or receipts do not exceed the amount of One Million Five Hundred Thousand
Pesos (P1,500,000.00). Provided, that not later than January 31, 2009 and every
three (3) years thereafter, the amount of P1,500,000.00 shall be adjusted to its
present value after using the Consumer Price Index, as published by the NSO.
What are the previously exempt transactions that are now subject to VAT?
Medical services such as dental & veterinary services rendered by professionals;

Legal services;
Non-food agricultural products;
Marine and forest products;
Cotton and cotton seeds;
Coal and natural gas;
Petroleum products;
Passenger cargo vessels of more than 5,000 tons;
Work of art, literary works, musical composition;
Generation, transmission and distribution of electricity including that of electric

cooperatives;
Sale of residential lot valued at more than P1,500,000.00;
Sale of residential house & lot/dwellings valued at more than P2,500,000.00;
Lease of residential unit with a monthly rental of more than P10,000;
II. RELIEF-Related Queries

What is "RELIEF"?
RELIEF means Reconciliation of Listing for Enforcement. It supports the third
party information program of the Bureau through the cross referencing of third
party information from the taxpayers' Summary Lists of Sales and Purchases
prescribed to be submitted on a quarterly basis.
Who are required to submit Summary List of Sales?
VAT taxpayers with quarterly total sales/receipts (net of VAT), exceeding Two
Million Five Hundred Thousand Pesos (P2,500,000.00) are required to submit a
Summary List of Sales.
Who are required to submit Summary List of Purchases?
VAT taxpayers with quarterly total purchases (net of VAT) of goods and services,
including importation exceeding One Million Pesos (P1,000,000.00) are required to
submit Summary List of Purchases.
What are the Summary Lists required to be submitted?
Quarterly Summary List of Sales to Regular Buyers/ Customers Casual

Buyers/ Customers and Output Tax
Quarterly Summary of List of Local Purchases and Input tax; and
Quarterly Summary List of Importation.
When is the deadline for submission of the above Summary Lists?

The Summary List of Sales/Purchases, whichever is applicable, shall be submitted
on or before the twney-fifth (25th) day of the month following the close of the
taxable quarter -- calendar quarter or fiscal quarter.
What are the penalties for failure to submit the Summary Lists?
For failure to file, keep or supply a statement, list or information required

on the date prescribed shall pay and administrative penalty of One
Thousand Pesos (P1,000.00) for each such failure, unless it is shown that
such failure is due to reasonable cause and not to willful neglect; and
An aggregate amount to be imposed for all such failures during a taxable
year shall not exceed Twenty-Five Thousand Pesos (P25,000.00).
III. What is the treatment for Withholding of VAT on Government Money

Payments?
The goverment or any of its political subdivisions, instrumentalities or

agencies, including government-owned or controlled corporations
(GOCCs) shall, before making payment on account of each purchase of
goods and/or services taxed at twelve percent (12%) VAT pursuant to
Sections 106 and 108 of the Tax Code, deduct and withhold a Final VAT
due at the rate of five percent (5%) of the gross payment.
The five percent (5%) final VAT withholding rate shall represent the net VAT
payable of the seller. The remaining seven percent (7%) effectively accounts for the
standard input VAT for sales of goods or services to government or any of its
political subdivisions, instrumentalities or agencies including GOCCs in lieu of the
actual input VAT directly attributable or ratably apportioned to such sales. Should
actual input VAT attributable to sales to government exceeds seven percent (7%) of
gross payments, the excess may form part of the sellers' expense or cost. On the
other hand, if actual input VAT attributable to sale to government is less than seven
percent (7%) of gross payment, the difference must be closed to expense or cost.
The government or any of its political subdivisions, instrumentalities or

agencies including GOCCs, as well as private corporation, individuals,
estates and trusts, whether large or non-large taxpayers, shall withhold
twelve percent (12%) VAT with respect to the following payments:
1. Lease or use of properties or property rights owned by non-residents; and
2. Other services rendered in the Philippines by non-residents.
IV. In what grounds can the Commissioner of Internal Revenue suspend the
business operations of a taxpayer?
The Commissioner or his authorized representative is empowered to suspend the
business operations and temporarily close the business establishment of any person
for any of the following violations:
(a) In the case of a VAT-registered Person:
Failure to issue receipts or invoices;

Failure to file a value-added-tax return as required under
Section 114; or
Understatement of taxable sales or receipts by thirty percent
(30%) or more of his correct taxable sales or receipts for the
taxable quarter.
(b) Failure to any Person to Register as Required under Section 236
The temporary closure of the establishment shall be for the

duration of not less than five (5) days and shall be lifted only
upon compliance with whatever requirements prescribed by
the Commissioner in the closure order.
[return to index]
Description
Withholding Tax on Compensation is the tax withheld from income payments to
individuals arising from an employer-employee relationship.
Expanded Withholding Tax is a kind of withholding tax which is prescribed on
certain income payments and is creditable against the income tax due of the payee
for the taxable quarter/year in which the particular income was earned.
Final Withholding Tax is a kind of withholding tax which is prescribed on certain
income payments and is not creditable against the income tax due of the payee on
other income subject to regular rates of tax for the taxable year. Income Tax
withheld constitutes the full and final payment of the Income Tax due from the
payee on the particular income subjected to final withholding tax.
Withholding Tax on Government Money Payments (GMP) - Percentage Taxes
- is the tax withheld by National Government Agencies (NGAs) and
instrumentalities, including government-owned and controlled corporations
(GOCCs) and local government units (LGUs), before making any payments to nonVAT registered taxpayers/suppliers/payees
Withholding Tax on GMP - Value Added Taxes (GVAT) - is the tax withheld by
National Government Agencies (NGAs) and instrumentalities, including
government-owned and controlled corporations (GOCCs) and local government
units (LGUs), before making any payments to VAT registered
taxpayers/suppliers/payees on account of their purchases of goods and services.
[return to index]
Codal Reference
Republic Act Nos. 8424, 9337, 9442, 9504
Sections 57 to 58 and 78 to 83 of the National Internal Revenue Code (NIRC)
[return to index]
Monthly Remittance of Taxes Withheld on Compensation

Tax Form
BIR Form 1601-C : Monthly Remittance Return of Income Taxes Withheld on
Compensation
Who Are Required To File
Every registered withholding agent on compensation, which includes, but not
limited to the following:
1) Individuals engaged in business or practice of profession with employees
subject to income tax
2) All Juridical persons (e.g., Corporations, general partnerships,
associations, etc.) whether or not engaged in business.
3) Government Agencies and Instrumentalities (e.g.,NGAs, GOCCs, etc.),
including local government units (LGUs)
Documentary Requirements/Attachments to the tax return:
1) For amended return, proof of remittance and the return previously filed.
2) For those with advance payments, BIR Form No. 0605
3) For Private Sector, copy of the list of MWEs who received hazard pay submitted
to the DOLE Regional/Provincial Offices-Operations Division/Unit, for the return
period March, June, September and December, if applicable.
4) For Public Sector, copy of Department of Budget and Management (DBM)
circular/s or equivalent on MWEs allowed to receive hazard pay, for the return
period March, June, September and December, if applicable.
5) Electronic Tax Remittance Advice (eTRA) previously Tax Remittance Advice
(TRA) for National Government Agencies (NGAs) as required under DOF-DBM
Joint Circular No. 1-2000A and RR 1-2013.
Procedures for Filing and Payment
1. Read instructions indicated in the tax return.
2. Accomplish correctly BIR Form No. 1601-C in triplicate copies.
3. If there is tax required to be remitted:
- Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue
District Office (RDO) where you are registered or withholding agent is
registered and present the duly accomplished BIR Form No. 1601-C,
together with the required attachments (if applicable) and your payment.
- In places where there are no AABs, proceed to the Revenue Collection
Revenue District Office where you are registered or withholding agent is
registered and present the duly accomplished BIR Form No. 1601- C,
together with the required attachments (if applicable) and your payment.
- Receive your copy of the duly stamped and validated form from the teller
of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal
Treasurer.
4. If there is no tax required to be remitted:
- Proceed to the Revenue District Office where you are registered or where
the withholding agent is registered and present the duly accomplished BIR
Form No. 1601-C, together with the required attachments.
- Receive your copy of the duly stamped and validated BIR Form from the
RDO.
Deadline
Filing Via EFPS
Group A - Fifteen (15) days following end of the
Group B - Fourteen (14) days following end of the
Group C - Thirteen (13) days following end of the
Group D - Twelve (12) days following end of the
Group E - Eleven (11) days following end of the month
month
month
month
month
Note: The staggered manner of filing is only allowed to taxpayers using the
Electronic Filing and Payment System (EFPS) based on the industry classification
groupings per RR No. 26-2002.
However, the staggered filing of returns allowed for withholding agents/taxpayers
enrolled in the EFPS facility of the Bureau shall not apply in the case of the
NGAs per RR 1-2013.
Payment Via EFPS
On or before the fifteenth (15th) day of the month following the month withholding
was made, except for taxes withheld for the month of December which shall be
paid on or before January 20 of the succeeding year.
Provided however that, in the case of NGAs, all returns must be electronically filed
(e-filed) and payment of the tax due must also be made on the same day the return
is e-filed which shall be on or before the 10th day following the month in which
withholding was made, except for taxes withheld for the month of December of
each year, which shall be filed on or before January 15 of the succeeding year.
Manual Filing and Payment
On or before the tenth (10th) day of the month following the month the
withholding was made, except for taxes withheld for the month of December which
shall be filed and paid on or before January 15 of the succeeding year
Tax Rates
REVISED WITHHOLDING TAX TABLES
Effective January 1, 2009
DAILY
Exemption
0.00
0.00
1.65
8.25
28.05
74.26
165.02
412.54
Status
(000P) +0% over +5% over +10% over +15% over +20% over +25% over +30% over +32% over
A. Table for employees without qualified dependent
1. Z
0.0
1
0
33
99
231
462
825
1,650
2. S/ME
50.0
1
165
198
264
396
627
990
1,815
B. Table for single/married employee with qualified dependent child(ren)
1. ME1 / S1
75.0
1
248
281
347
479
710
1,073
1,898
2. ME2 / S2
100.0
1
330
363
429
561
792
1,155
1,980
3. ME3 / S3
125.0
1
413
446
512
644
875
1,238
2,063
4. ME4 / S4
150.0
1
495
528
594
726
957
1,320
2,145
WEEKLY
Exemption
0.00
0.00
9.62
48.08
163.46
432.69
961.54
2,403.85
Status
+0% over +5% over +10% over +15% over +20% over +25% over +30% over +32% over

1. Z
0.0
1
0
192
577
2. S/ME
50.0
1
962
1,154
1,538
1. ME1 / S1
75.0
1
1,442
1,635
2,019
2. ME2 / S2
100.0
1
1,923
2,115
2,500
3. ME3 / S3
125.0
1
2,404
2,596
2,981
4. ME4 / S4
150.0
1
2,885
3,077
3,462
SEMI-MONTHLY
Exemption
Status
1,346
2,308
2,692
3,654
4,808
5,769
9,615
10,577
2,788
3,269
3,750
4,231
4,135
4,615
5,096
5,577
6,250
6,731
7,212
7,692
11,058
11,538
12,019
12,500
0.00
0.00
20.83
104.17
354.17
937.50
2,083.33
5,208.33

1. Z
0.0
1
0
417
1,250
2. S/ME
50.0
1
2,083
2,500
3,333
1. ME1 / S1
75.0
1
3,125
3,542
4,375
2. ME2 / S2
100.0
1
4,167
4,583
5,417
3. ME3 / S3
125.0
1
5,208
5,625
6,458
4. ME4 / S4
150.0
1
6,250
6,667
7,500
2,917
5,000
5,833
7,917
10,417
12,500
20,833
22,917
6,042
7,083
8,125
9,167
8,958
10,000
11,042
12,083
13,542
14,583
15,625
16,667
23,958
25,000
26,042
27,083
MONTHLY
Exemption
0.00
0.00
41.67
208.33
708.33
1,875.00
4,166.67
10,416.67
Status

1. Z
0.0
1
0
833
2,500
2. S/ME
50.0
1
4,167
5,000
6,667
1. ME1 / S1
75.0
1
6,250
7,083
8,750
2. ME2 / S2
100.0
1
8,333
9,167
10,833
3. ME3 / S3
125.0
1
10,417
11,250
12,917
4. ME4 / S4
150.0
1
12,500
13,333
15,000
5,833
10,000
11,667
15,833
20,833
25,000
41,667
45,833
12,083
14,167
16,250
18,333
17,917
20,000
22,083
24,167
27,083
29,167
31,250
33,333
47,917
50,000
52,083
54,167
Legend: Z-Zero exemption S-Single ME-Married Employee 1;2;3;4-Number of qualified

dependent children
S/ME = P50,000 EACH WORKING EMPLOYEE Qualified Dependent Child = P25,000
each but not exceeding four (4) children
USE TABLE A FOR SINGLE/MARRIED EMPLOYEES WITH NO QUALIFIED
DEPENDENT
1. Married Employee (Husband or Wife) whose spouse is unemployed.
2. Married Employee (Husband or Wife) whose spouse is a non-resident citizen
receiving income from foreign sources
3. Married Employee (Husband or Wife) whose spouse is engaged in business
4. Single
6. Zero Exemption for employees with multiple employers for their 2nd,
3rd..employers (main employer claims personal & additional exemption
7. Zero Exemption for those who failed to file Application for Registration
USE TABLE B FOR THE FOLLOWING SINGLE/MARRIED EMPLOYEES WITH
QUALIFIED DEPENDENT
1. Employed husband and husband claims exemptions of children
2. Employed wife whose husband is also employed or engaged in business;
husband waived claim for dependent children in favor of the employed wife
3. Single with qualified dependent children
[return to index]
Monthly Remittance Of Income Taxes Withheld (Expanded) [Except for

Transactions Involving Onerous Transfer of Real Property Classified as Ordinary
Asset]
Tax Form
BIR Form No. 1601-E : Monthly Remittance Return of Income Taxes Withheld
(Expanded) [Except for Transactions Involving Onerous Transfer of Real Property
Classified as Ordinary Asset]
Every registered withholding agent on Expanded Withholding Tax, which may
include, but not limited to the following:
1) In general, any juridical person, whether or not engaged in trade or

business
2) An individual, with respect to payments made in connection with his trade
or business. However, insofar as taxable sale, exchange or transfer of real
property is concerned, individual buyers who are not engaged in trade or
business are also constituted as withholding agents.
3) Government agencies and instrumentalities (e.g., National Government
Agencies, Government-Owned or Controlled Corporations, Local
Government Units, etc.)
4) All individuals, juridical persons and political parties, with respect to their
income payments made as campaign expenditures and/or purchase of goods
and services intended as campaign contributions.
1. Return previously filed and proof of remittance, if amended return
2. Monthly Alphalist of Payees (MAP), except income payments made by political
parties, candidates and income payments made by individual or juridical person on
the purchase of goods and services as campaign contributions to political parties
and candidates
3. For advance payment, BIR Form No. 0605
4. Electronic Tax Remittance Advice (eTRA) previously Tax Remittance Advice
(TRA) for National Government Agencies (NGAs) as required under DOF- DBM
Joint Circular No. 1-2000A and RR 1-2013
2. Accomplish BIR Form No. 1601-E in triplicate copies.
District Office where you are registered or taxpayer concerned is registered
and present the duly accomplished BIR Form No. 1601- E, together with the
required attachments and your payment.
Revenue District Office where you are registered or taxpayer concerned is

registered and present the duly accomplished BIR Form 1601-E, together
with the required attachments and your payment
Treasurer.
- Proceed to the Revenue District Office where you are registered and
present the duly accomplished BIR Form 1601-E, together with the required
attachments.
- Receive your copy of the duly stamped and validated form from the RDO
representative.
Deadline
Filing Via EFPS
Group A - Fifteen (15) days following
Group B - Fourteen (14) days following
Group C - Thirteen (13) days following
Group D - Twelve (12) days following
end
end
end
end
of
of
of
of
the
the
the
the
month
month
month
month
enrolled in the EFPS facility of the Bureau shall not apply in the case of the NGAs
per RR 1-2013.
Payment Via EFPS
paid on or before January 20th of the succeeding year.

Tax Rates
BIR FORM
TAX TYPE
BIR FORM NO. 1601-E
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
DESCRIPTION
MONTHLY REMITTANCE RETURN OF
CREDITABLE INCOME TAXES WITHHELD
(EXPANDED)
Professionals (lawyers, CPAs, engineers, etc.),
talent fees paid to individuals - If the current
years gross income is P720,000 and below
Professionals (lawyers, CPAs, engineers, etc.),
talent fees paid to individuals - If the current
years gross income exceeds P 720,000
Professionals/ talent fees paid to juridical persons
- If the current years gross income is P720,000
and below
Professionals/ talent fees paid to juridical persons
- If the current years gross income exceeds P
720,000
Professional entertainers, such as, but not limited
to, actors and actresses, singers, lyricist,
composers, emcees - If the current years gross
income is P 720,000 and below
Professional entertainers, such as, but not limited
to, actors and actresses, singers, lyricist,
composers, emcees - If the current years gross
income exceeds P 720,000
Professional athletes, including basketball players,
pelotaris and jockeys - If the current years gross
Professional athletes including basketball players,
pelotaris and jockeys - If the current years gross
income exceeds P720,000
Movie, stage, radio, television and musical
directors and producers - If the current years
gross income is P720,000 and below
Movie, stage, radio, television and musical
directors and producers - If the current years
gross income exceeds P 720,000
Management and technical consultants paid to
individuals. If the current years gross income is P
720,000 and below
individuals - If the current years gross income
exceeds P 720,000
juridical person - If the current years gross
ATC
TAX RATES
WI010
10%
WI011
15%
WC010
10%
WC011
15%
WI020
10%
WI021
15%
WI030
10%
WI031
15%
WI040
10%
WI041
15%
WI050
10%
WI051
15%
WC050
10%
WC051
15%
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
1601-E/2307
WE
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
juridical person - If the currents years gross

income exceeds P720,000
Business and bookkeeping agents and agencies If the current years gross income is P 720,000
and below
Business and bookkeeping agents and agencies If the current years gross income exceeds P
720,000
Insurance agents and insurance adjusters - If the
current years gross income is P 720,000 and
below
Insurance agents and insurance adjusters - If the
current years gross income exceeds P 720,000
Other recipients of talent fees - If the current
years gross income is P 720,000 and below
Other recipients of talent fees - If the current
years gross income exceeds P 720,000
Fees of directors who are not employees of the
company - If the current years gross income is P
720,000 and below
Fees of directors who are not employees of the
company - If the current years gross income
exceeds P 720,000
Rentals- real/personal properties, poles, satellites
& transmission facilities, billboards - Individual
Rentals- real/personal properties, poles, satellites
& transmission facilities, billboards - Corporate
Cinematographic film rentals - Individual
Cinematographic film rentals - Corporate
Income payments to prime contractors/subcontractors - Individual
Income payments to prime contractors/subcontractors - Corporate
Income distribution to beneficiaries of estates and
trusts
Gross commission or service fees of custom,
insurance, stock, real estate, immigration and
commercial brokers & fees of agents of
professional entertainers - Individual
Gross commission or service fees of custom,
insurance, stock, real estate, immigration and
commercial brokers & fees of agents of
professional entertainers - Corporate
Payments to medical practitioners by a duly
registered professional partnership for the practice
of the medical profession - If the currents year's
income payments to the medical practitioner is
P720,000 and below
Payments to medical practitioners by a duly
registered professional partnership for the practice
of the medical profession - If the currents year's
income payments to the medical practitioner
exceeds P720,000
Payments for medical/dental/veterinary services
thru Hospitals/ Clinics/Health Maintenance
WI060
10%
WI061
15%
WI070
10%
WI071
15%
WI080
10%
WI081
15%
WI090
10%
WI091
15%
WI100
5%
WC100
5%
WI110
WC110
5%
5%
WI120
2%
WC120
2%
WI130
15%
WI140
10%
WC140
10%
WI141
10%
WI142
15%
WI150
15%
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
1601-E/2307
WE
WE
Organizations, including direct payments to

service providers - If the current year's income
payments for the medical/dental/veterinary
services exceeds P 720,000
Payments for medical/dental/veterinary services
thru Hospitals/ Clinics/Health Maintenance
Organizations, including direct payments to
service providers - If the current year's income
payments for the medical/dental/veterinary
services is P 720,000 and below
Payment by the general professional partnerships
GPP) to its partners - If the current year's income
payments to the partners is P 720,000 and below
Payment by the general professional partnerships
GPP) to its partners - If the current year's income
payments to the partners exceeds P 720,000
Payments made by credit card companies Individual
Payments made by credit card companies Corporate
Income payments made by the government to its
local/resident suppliers of goods - Individual
local/resident suppliers of goods - Corporate
local/resident suppliers of service - Individual
local/resident suppliers of services - Corporate
Income payments made by top 20,000 private
corporations to their local/resident suppliers of
goods - Individual
goods - Corporate
services - Individual
services - Corporate
Additional payments to government personnel
from importers, shipping and airline companies or
their agents for overtime services
Commission, rebates, discounts and other similar
considerations paid/granted to independent &
exclusive distributors, medical/technical & sales
representatives & marketing agents & sub-agents
of multi-level marketing companies - Individual
Commission, rebates, discounts and other similar
considerations paid/granted to independent &
exclusive distributors, medical/technical & sales
representatives & marketing agents and subagents of multi-level marketing companies Corporate
Gross payments to embalmers by funeral parlors
Payments made by pre-need companies to funeral
WI151
10%
WI152
10%
WI153
15%
WI156
1% of 1/2
WC156
1% of 1/2
WI640
1%
WC640
1%
WI157
2%
WC157
2%
WI158
1%
WC158
1%
WI160
2%
WC160
2%
WI159
15%
WI515
10%
WC515
10%
WI530
WI535
1%
1%
1601-E/2307
WE
1601-E/2307
1601-E/2307
WE
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
parlors - Individual
Payments made by pre-need companies to funeral
parlors - Corporate
Tolling fee paid to refineries - Individual
Tolling fee paid to refineries - Corporate
Income payments made to suppliers of
Agricultural products - Individual
Income payments made to suppliers of
Agricultural products - Corporate
Income payments on purchases of minerals,
mineral products & quarry resources - Individual
Income payments on purchases of minerals,
mineral products & quarry resources - Corporate
Income payments on purchases of gold by
Bangko Sentral ng Pilipinas (BSP) from gold
miners/suppliers under PD 1899, as amended by
RA No. 7076- Individual
Income payments on purchases of gold by
Bangko Sentral ng Pilipinas (BSP) from gold
miners/suppliers under PD 1899, as amended by
RA No. 7076 - Corporate
On gross amount of refund given by Meralco to
customers with active contracts as classified by
Meralco - Individual
customers with active contracts as classified by
Meralco - Corporate
customers with terminated contracts as classified
by Meralco - Individual
customers with terminated contracts as classified
by Meralco - Corporate
Withholding on gross amount of interest on the
refund of meter deposit whether paid directly to
the customers or applied against customer's
billing - Residential and General Service
customers whose monthly electricity consumption
exceeds 200 kwh as classified by MERALCO Individual
exceeds 200 kwh as classified by MERALCO Corporate
billing - Non-Residential customers whose
monthly electricity consumption exceeds 200 kwh
as classified by MERALCO - Individual
WC535
1%
WI540
WC540
5%
5%
WI610
1%
WC610
1%
WI630
5%
WC630
5%
WI632
5%
WC632
5%
WI650
25%
WC650
25%
WI651
32%
WC651
32%
WI660
10%
WC660
10%
WI661
10%
WC661
10%
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE

as classified by MERALCO - Corporate
exceeds 200 kwh as classified by other electric
Distribution Utilities (DU) - Individual
exceeds 200 kwh as classified by other electric
Distribution Utilities (DU) - Corporate
as classified by other electric Distribution Utilities
(DU) - Individual
as classified by other electric Distribution Utilities
(DU) - Corporate
Income payments made by the top five thousand
(5,000) individual taxpayers to their local/resident
suppliers of goods other than those covered by
other rates of withholding tax - Individual
suppliers of goods other than those covered by
other rates of withholding tax - Corporation
suppliers of services other than those covered by
other rates of withholding tax - i) Individual
suppliers of services other than those covered by
other rates of withholding tax - ii) Corporation
Income payments made by political parties and
candidates of local and national elections of all
their purchase of goods and services as campaign
expenditures, and income payments made by
individuals or juridical persons for their purchases
of goods and services intended to be given as
campaign contribution to political parties and
candidates - Individual
Income payments made by political parties and
candidates of local and national elections of all
their purchase of goods and services as campaign
WI662
10%
WC662
10%
WI663
20%
WC663
20%
WI670
1%
WC670
1%
WI672
2%
WC672
2%
WI680
5%
WC680
5%
1601-E/2307
WE
1601-E/2307
WE
1601-E/2307
WE
expenditures, and income payments made by

individuals or juridical persons for their purchases
of goods and services intended to be given as
campaign contribution to political parties and
candidates - Corporation
Income payments received by Real Estate
Investment Trust (REIT)
Interest income derived from any other debt
instruments not within the coverage of deposit
substitutes and Revenue Regulations No. 14-2012
subject to Creditable/ Expanded Withholding Tax
- Individual
Interest income derived from any other debt
instruments not within the coverage of deposit
substitutes and Revenue Regulations No. 14-2012
subject to Creditable/ Expanded Withholding Tax
- Corporate
WC690
1%
WI710
20%
WC710
20%
[return to index]
Monthly Remittance Of Value-Added Taxes And Other Percentage Taxes Withheld

Tax Form
BIR Form No. 1600 - Monthly Remittance Return of Value-Added Taxes and Other
Percentage Taxes Withheld
1. All government offices, bureaus, agencies or instrumentalities, local government
units, government owned and controlled corporation on money payments made to
private individuals, corporations, partnerships, associations and other
judicial/artificial entities as required under RA Nos. 1051, 7649, 8241, 8424 and
9337.
2. Payors of income subject to Value-Added Tax to Non-residents.
3. Payors of income to persons, natural or juridical, who opted to remit his/its VAT
or percentage tax through the withholding and remittance of the same by the
withholding agent/payor which option is manifested by filing the Notice of
Availment of the option to Pay the Tax through the Withholding Process, copy
furnished the withholding agent-payor and the revenue district offices of both the
payor and payee.
1. Alphabetical list of payees (MAP) indicating the following:
Month
TIN
of
Name
of
TIN
Nature
Name
Amount
- Tax Required to be Withheld
and
withholding
Withholding
of
Year
agent
Agent
Payee
ATC
of
Payment
of
of
Tax
Payee
Payment
Rate
2. Return previously filed and proof of tax payments, if amended return

3. Certificate of Tax Treaty Relief, if applicable
4. Authorization Letter, if the return is filed by the authorized representative
6. BIR Form 0605, for advance payment.
1. Read instructions indicated at the back of the tax return.
2. Accomplish BIR No. Form 1600 in triplicate copies.
- Proceed to the nearest Authorized Agents Banks (AABs) of the Revenue
and present the duly accomplished BIR Form No.1600, together with the
registered and present the duly accomplished BIR Form No. 1600, together
with the required attachments and your payment.
of the AABs /Revenue Collection Officer/duly authorized City or Municipal
Treasurer.

present the duly accomplished BIR Form No. 1600, together with the
required attachments.
representative.
Deadline
withholding was made, whether EFPS or manual filing and payment.
Tax Rates
BIR FORM
TAX TYPE
BIR FORM NO. 1600

1600/2306
1600/2306
WG
WG
1600/2306
WG
1600/2306
WG
1600/2306
WG
1600/2306
WG
1600/2307
1600/2307
WG
WG
1600/2307
WG
1600/2307
WG
1600/2307
WG
1600/2307
WG
1600/2307
WG
1600/2307
WG
DESCRIPTION
VALUE-ADDED TAX AND OTHER
PERCENTAGE TAXES WITHHELD
FWVAT on payments for purchases of Goods
FWVAT on payments for purchases of Services
Lease or use of properties or property rights
owned by non-residents (Government
Withholding Agent)
Lease or use of properties or property rights
owned by non-residents (Private Withholding
Agent)
Other services rendered in the Philippines by nonresidents (Government Withholding Agent)
Other services rendered in the Philippines by nonresidents (Private Withholding Agent)
Tax on carriers and keepers of garages
Franchise Tax on Gas and Water Utilities
Franchise Tax on radio & TV broadcasting
companies whose annual gross receipts does not
exceed P10M & who are not VAT registered
taxpayers
Tax on life insurance premiums
Persons exempt from VAT under Sec. 109(v)
(creditable)-Government Withholding Agent
Tax on overseas dispatch, message or
conversation originating from the Philippines
Tax on Banks and Non-Bank Financial
Intermediaries Performing Quasi-Banking
Functions. On interest, commissions and
discounts from lending activities as well as
income from financial leasing, on the basis of
remaining maturities of instruments from which
such receipts are derived:
- Maturity period is five years or less
ATC
TAX RATES
WV010
WV020
5%
5%
WV040
12%
WV050
12%
WV060
12%
WV070
12%
WB030
WB040
3%
2%
WB050
3%
WB070
2%
WB080
3%
WB090
10%
WB301
5%
WB303
1%
1600/2307
WG
1600/2307
WG
1600/2307
WG
1600/2307
WG
1600/2307
WG
1600/2307
WG
1600/2307
WG
1600/2307
WG
1600/2307
1600/2307
WG
WG
1600/2307
WG
1600/2307
1600/2307
1600/2307
1600/2307
WG
WG
WG
WG

Functions. On interest, commissions and
discounts from lending activities as well as
income from financial leasing, on the basis of
remaining maturities of instruments from which
such receipts are derived:
- Maturity period is more than five years
Functions. On dividends and equity shares and net
income of subsidiaries
Functions. On royalties, rentals of property, real
or personal, profits from exchange and all other
items treated as gross income under the Code
Functions. On net trading gains within the taxable
year on foreign currency, debt securities,
derivatives, and other similar financial
instruments
Tax on Other Non-Banks Financial Intermediaries
Not Performing Quasi-Banking Functions. On
interest, commissions and discounts from lending
activities as well as income from financial
leasing, on the basis of the remaining maturities
of instrument from which such receipts are
derived:
- Maturity period is five years or less
Not Performing Quasi-Banking Functions. On
interest, commissions and discounts from lending
activities as well as income from financial
leasing, on the basis of the remaining maturities
of instrument from which such receipts are
derived:
- Maturity period is more than five years
Not Performing Quasi-Banking Functions. On all
other items treated as gross income under the
Code
Business Tax on Agents of foreign insurance co. insurance agents
Business Tax on Agents of foreign insurance co. owner of the property
Tax on International Carriers
Tax on cockpits
Tax on amusement places, such as cabaret, night
or day clubs, videoke bars, karaoke bars, karaoke
television, karaoke boxes, music lounges and
other similar establishments
Tax on boxing exhibitions
Tax on professional basketball games
Tax on jai-alai & race tracks
Tax on sale, barter or exchange of shares of stocks
listed and traded through the Local Stock
WB102
0%
WB103
7%
WB104
7%
WB108
5%
WB109
1%
WB110
5%
WB120
4%
WB121
5%
WB130
WB140
3%
18%
WB150
18%
WB160
WB170
WB180
WB200
10%
15%
30%
1/2 of 1%
1600/2307
WG
1600/2307
WG
1600/2307
WG
1600/2307
WG
1600/2306
WG
1600/2307
WG
1600/2306
WG
1600/2307
WG
1600/2306
WG
Exchange
Tax on shares of stock sold or exchanged through
initial and secondary public offering - Not over
25%
initial and secondary public offering - Over 25%
but not exceeding 33 1/3%
initial and secondary public offering - Over 33
1/3%
VAT Withholding on Purchase of Goods (with
waiver of privilege to claim input tax credit
(creditable)
Vat Withholding on Purchase of Goods (with
waiver of privilege to claim input tax credit (final)
VAT Withholding on Purchase of Services (with
waiver of privilege to claim input tax credit
(creditable)
VAT Withholding on Purchase of Services (with
waiver of privilege to claim input tax credit (final)
Persons exempt from VAT under Section 109v
(creditable) - Private Withholding Agent
Persons exempt from VAT under Section 109v
(final)
WB201
4%
WB202
2%
WB203
1%
WV012
12%
WV014
12%
WV022
12%
WV024
12%
WB082
3%
WB084
3%
[return to index]
Monthly Remittance of Final Income Taxes Withheld

Tax Form
BIR Form 1601-F : Monthly Remittance Return of Final Income Taxes Withheld
Every withholding agent/payor who is either an individual or non-individual
required to deduct and withhold taxes on income payments subject to Final
Withholding Taxes
1. Return previously filed and proof of remittance, if amended return
2. Monthly Alphalist of Payees (MAP)
3. For advance payment, BIR Form No. 0605

(TRA) for National Government Agencies (NGAs) as required under DOF-DBM
2. Accomplish BIR Form No. 1601-F in triplicate copies.
and present the duly accomplished BIR Form No. 1601F, together with the
- In places where there are no AAB, the return shall be filed and the tax paid
with the Revenue Collection Officer or duly Authorized City or Municipal
Treasurer within the Revenue District Office where the withholding agents
place of business/office is located who will issue a Revenue Official Receipt
(BIR Form No. 2524) therefor;
present the duly accomplished BIR Form 1601-F, together with the required
attachments.
representative.
Deadlines
Filing Via EFPS
Group A - Fifteen (15) days following
Group B - Fourteen (14) days following
Group C - Thirteen (13) days following
Group D - Twelve (12) days following
end
end
end
end
of
of
of
of
the
the
the
the
month
month
month
month

enrolled in the EFPS facility of the Bureau shall not apply in the case of the NGAs
per RR 1-2013.
Payment Via EFPS
paid on or before January 20 of the succeeding year.
Tax Rates
BIR FORM
TAX TYPE
BIR FORM NO. 1601-F
DESCRIPTION
FINAL INCOME TAXES WITHHELD
Interest on foreign loans payable to non-resident
foreign corporations (NRFCs)
Interest and other income payments on foreign
currency transactions/loans payable to OBUs
Interest and other income payments on foreign
currency transactions/loans payable to FCDUs
Cash dividend payments by domestic corporation
to citizens and resident aliens
Property dividend payments by domestic
corporation to citizens and resident aliens
ATC
TAX RATES
WC180
20%
WC190
10%
WC191
10%
WI202
10%
WI203
10%
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
Cash dividend payment by domestic corporation

to Non-Resident Foreign Corporations
WC212
30% Effective Jan.

1, 2009
1601-F/2306
WF
Property dividend payment by domestic

corporation to Non-Resident Foreign Corporations
WC213
30% Effective Jan.

1, 2009
1601-F/2306
WF
WC222
15%
1601-F/2306
WF
WC223
15%

to Non-Resident Foreign Corporations whose
countries allow tax deemed paid credit (subject to
tax sparing rule)
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
corporation to Non-Resident Foreign Corporations

whose countries allowed tax deemed paid credit
(subject to tax sparing rule)
to non-resident alien engaged in trade or business
(NRAETB)
corporation to non-resident alien engaged in trade
or business (NRAETB)
Share of a NRAETB in the distributable net
income after tax of a partnership (except GPP) of
which he is a partner, or share in the net income
after tax of an association, joint account, or a joint
venture taxable as a corporation of which he is a
member or a co-venturer
On other payments to non-resident foreign
corporations (NRFCs)
Distributive share of individual partners in a
taxable partnerships, association, joint account, or
joint venture or consortium
All kinds of royalty payments to citizens, resident
aliens and non-resident aliens engaged in trade or
business (other than WI 380 and WI 341)
All kinds of royalty payments to domestic and
resident foreign corporation
On prizes exceeding P10,000 and other winnings
paid to individuals
Branch profit remittances by all corporations
except PEZA/SBMA/CDA registered
On gross rentals, lease and charter fees derived by
non-resident owner or lessor of foreign vessels
On the gross rentals, lease and charter fees derived
by non-resident lessor of aircraft, machineries and
other equipment
On payments to oil exploration service contractors
and subcontractors (OESS) - Individual
(NRAETB)
On payments to oil exploration service contractors
and subcontractors (OESS) - Corporate (nonresident foreign corporation engage in trade or
business)
Payments to Filipinos or alien individuals
employed by Foreign Petroleum Service
Contractors/Subcontractors, Offshore Banking
Units and Regional or Area Headquarters and
Regional Operating Headquarters of Multinational
Companies occupying executive/managerial and
technical positions
Payments to NRANETB except on sale of shares
in domestic corporation and real property
On payments to non-resident individual
cinematographic film owners, lessors or
distributors
On payments to foreign corporate
WI224
20%
WI225
20%
WI226
20%
WC230
30% Effective Jan.

1, 2009
WI240
10%
WI250
20%
WC250
20%
WI260
20%
WC280
15%
WC290
4.5%
WC300
7.5%
WI310
8%
WC310
8%
WI320
15%
WI330
25%
WI340
25%
WC340
25%
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
WF
1601-F/2306
1601-F/2306
WF
WF
1601-F/2306
WF
1601-F/2306
WF
cinematographic film owners, lessors or

distributors
Royalties paid to NRAETB on cinematographic
films and similar works
Final tax on interest or other payments upon taxfree covenant bonds, mortgages, deeds of trust or
other obligations under Sec. 57C of the NIRC of
1997
Royalties paid to citizens, resident aliens and
NRAETB on books, other literary works and
musical composition
Informer's cash reward paid to individuals
Informer's cash reward paid to juridical persons
Cash or property dividends paid by a Real Estate
Investment Trust (REIT) to individuals
Cash or property dividends paid by a Real Estate
Investment Trust (REIT) to corporations
WI341
25%
WI 350
30%
WI380
10%
WI410
WC410
10%
10%
WI700
10%
WC700
10%
[return to index]
Remittance Return of Percentage Tax On Winnings And Prizes Withheld By Race

Track Operators
Tax Form
BIR Form No. 1600-WP : Remittance Return of Percentage Tax on Winnings and
Prizes Withheld by Race Track Operators
- Operators of race tracks
1. Alphalist of Payees indicating the following:
Tax
Year
TIN
of
Name
of
TIN
Name
Nature
Amount
- Tax Required to be Withheld
and
withholding
Withholding
of
of
of
of
Tax
Month
agent
Agent
Payee
Payee
ATC
Payment
Payment
Rate
2. Return previously filed and proof of tax payments, if amended return

Procedures for Manual Filing and Payment
1. Accomplish BIR Form 1600-WP in triplicate copies.
and present the duly accomplished BIR Form No. 1600-WP, together with
the required attachments and your payment.
- In places where there are no AAB, proceed to the Revenue Collection
registered and present the duly accomplished BIR Form No. 1600-WP,
together with the required attachments and your payment
Treasurer.
- Proceed to the Revenue District Office where you are registered or taxpayer
concerned is registered and present the duly accomplished BIR Form No.
1600-WP, together with the required attachments.
representative
Deadline
Within twenty (20) days from the date the tax was deducted and withheld
Tax Rates
BIR FORM
TAX TYPE
BIR FORM NO. 1600-WP
1600-WP/2306
WW
1600-WP/2306
WW
DESCRIPTION
REMITTANCE RETURN OF PERCENTAGE
TAX ON WINNINGS AND PRIZES
WITHHELD BY RACE TRACK OPERATORS
Tax on Winnings from double, forecast/quinella
and trifecta bets on horse races paid by
government withholding agent
Tax on Winnings or prizes paid to winners of
winning horse race tickets other than double,
forecast/quinella and trifecta bets; and owners of
ATC
TAX RATES
WB191
4%
WB192
10%
1600-WP/2306
WW
1600-WP/2306
WW
winning race horses paid by government

withholding agent
Tax on Winnings from double, forecast/quinella
and trifecta bets on horse races paid by private
withholding agent
Tax on Winnings or prizes paid to winners of
winning horse race tickets other than double,
forecast/quinella and trifecta bets; and owners of
winning race horses paid by private withholding
agent
WB193
4%
WB194
10%
[return to index]
Quarterly Remittance Of Final Income Taxes Withheld On Fringe Benefits Paid To

Employees Other Than Rank And File
Tax Form
BIR Form No. 1603 - Quarterly Remittance Return of Final Income Taxes
Withheld on Fringe Benefits Paid to Employees Other than Rank and File
required to deduct and withhold taxes on fringe benefits furnished to employees
other than rank and file employees subject to Final Withholding Tax
1. Return previously filed and proof of tax payments , if amended return
2. Accomplish BIR Form No. 1603 in triplicate copies.
and present the duly accomplished BIR Form No. 1603, together with the
registered and present the duly accomplished BIR Form No. 1603, together
with the required attachments and your payment.
Treasurer.
representative
Deadline
Filing and Payment Via EFPS
On or before the fifteenth (15th) day of the month following the end of the
calendar quarter in which the fringe benefits were granted to the
recipient.Provided however that, in the case of NGAs, it shall be e-filed and
paid on or before the 10th day of the month following the quarter.
On or before the tenth (10th) day of the month following the end of the
calendar quarter in which the fringe benefits were granted to the recipient.
Tax Rates
BIR FORM
TAX TYPE
BIR FORM NO. 1603
1603/2306
WR
1603/2306
WR
DESCRIPTION
QUARTERLY REMITTANCE RETURN OF
Alien & Filipino employed & occupying the
same position as those of aliens employed in
selected multinational companies
Payment of fringe benefits to Non-Resident Alien
Not Engaged in Trade or Business (NRAETB)
ATC
WF320
WF330
TAX RATES
15%
Percentage
Divisor
- 85%
25%
Percentage
Divisisor
1603/2306
WR
Employees other than rank and file (Fringe

Benefit Tax) based on the grossed up monetary
value
WF360
- 75%
32%
Percentage
Divisisor
- 68%
[return to index]
Monthly Remittance Of Final Income Taxes Withheld On Interest Paid And Yield
On Deposit Substitutes, Trust, Etc.
Tax Form
BIR Form No. 1602 - Monthly Remittance Return of Final Income Taxes Withheld
on Interest Paid and Yield on Deposit Substitutes/Trust/Etc.
Banks, non-bank financial intermediaries, finance corporations, investment and
trust companies and other institutions required to withhold final income tax on
interest paid/accrued on deposit and yield or any other monetary benefit from
deposits substitutes and from trust fund and similar arrangements.
Return previously filed and proof of tax payments, if amended return
Procedures (for Manual filing of tax returns)
1. Accomplish BIR Form No. 1602 in triplicate copies.
and present the duly accomplished BIR FormNo. 1602, together with the
Officer or duly Authorized City or Municipal Treasurer within the Revenue
District Office where the withholding agents place of business/office is
located and present the duly accomplished BIR Form No. 1602, together
with the required attachments and your payment who will issue a Revenue
Official Receipt (BIR Form No. 2524) therefor.
of the AAB's/Revenue Collection Officer/duly Authorized City or Municipal
Treasurer.
Deadline
Filing Via EFPS
On or before the fifteenth (15th) day of the month following the month
withholding was made
Payment Via EFPS
On or before the fifteenth (15th) day of the month following the month
withholding was made, except for taxes withheld for the month of December
which shall be paid on or before January 20th of the succeeding year
withholding was made, except for taxes withheld for the month of December
which shall be filed and paid on or before January 15 of the succeeding year.
Tax Rates
BIR FORM
TAX TYPE
BIR FORM NO. 1602

1602/2306
1602/2306
WB
WB
1602/2306
WB
1602/2306
WB
1602/2306
WB
1602/2306
WB
1602/2306
WB
1602/2306
WB
DESCRIPTION
From bank deposits - Savings/Time - Individual
From bank deposits - Savings/Time - Corporate
From Treasury Bills and Other Government
Securities - Individual
From Treasury Bills and Other Government
Securities - Corporate
From deposit substitutes, trusts funds and other
similar arrangements - Individual
From deposit substitutes, trusts funds and other
similar arrangements - Corporate
On foreign currency deposits Resident Individual
On foreign currency deposits Resident Corporate
ATC
TAX RATES
WI161
WC161
20%
20%
WI162
20%
WC162
20%
WI163
20%
WC163
20%
WI170
7.5%
WC170
7.5%
1602/2306
WB
1602/2306
WB
1602/2306
WB
1602/2306
WB
1602/2306
WB
Interest payments to taxpayers enjoying

preferential tax rates (i.e. PEZA Registered
Enterprises)
On interest income from long-term deposit in the
form of savings trust funds, deposit substitutes
which was pre-terminated by the holder before the
5th year - individual (Less than 3 years)
5th year - individual (3 years to less than 4 years)
5th year - individual ( 4 years to less than 5 years)
5th year - corporate
WC390
5%
WI440
20%
WI441
12%
WI442
5%
WC440
20%
Taxes
Withheld
[return to index]
Annual Information Return On Creditable Income

(Expanded)/Income Payments Exempt From Withholding Tax
Tax Form
BIR Form No. 1604-E : Annual Information Return of Creditable Income Taxes
Withheld (Expanded)/Income Payments Exempt from Withholding Tax
required to deduct and withhold taxes on income payments subject to
Expanded/Creditable Withholding Taxes
1. Alphalist of Payees subjected to Expanded Withholding Tax
2. Alphalist of Other Payees Whose Income Payments Are Exempt from
Withholding Tax but subject to Income Tax
3. Return previously filed and proof of tax payment for amended return
Note: Above alphalists are to be submitted in accordance with RR 1-2014 as
amended.
Procedures for Manual Filing

1. Accomplish BIR Form No. 1604-E in triplicate copies.
2. Proceed to the Revenue District Office where you are registered and present the
duly accomplished BIR Form No. 1604-E, together with the required attachments.
3. Receive your copy of the duly stamped and validated form from the RDO
representative
Deadline
On or before March 1 of the year following the calendar year in which the income
payments subjected to expanded withholding taxes or exempt from withholding tax
were paid.
[return to index]
Annual Information On Income Taxes Withheld On Compensation And Final

Withholding Taxes
Tax Form
BIR Form No. 1604-CF : Annual Information Return of Income Taxes Withheld on
Compensation and Final Withholding taxes.
required to deduct and withhold taxes on:
- compensation paid to employees
- income payments subject to Final Withholding Taxes
1. Alphalist of Employees as of December 31 With no Previous Employer within
the year
2. Alphalist of Employees as of December 31 with Previous Employer/s within the
year
3. Alphalist of Employees Terminated Before December 31
4. Alphalist of Employees Whose Compensation Income Are Exempt from

Withholding Tax But Subject to Income Tax
5. Alphalist of Minimum Wage Earners
6. Alphalist of Employees other than Rank and File Who Were Given Fringe
Benefits During the Year
7. Alphalist of Payees Subjected to Final Withholding Tax
8. Return previously filed and proof of tax payment for amended return
Note: Above alphalists are to be submitted in accordance with RR 1-2014 as
amended.
Procedures
1. Accomplish BIR Form No. 1604-CF in triplicate copies and attach the necessary
schedules in prescribed form (hard and soft copy)
2. Proceed to the Revenue District Office where you are registered and present the
duly accomplished BIR Form No. 1604-CF, together with the required attachments.
3. Receive your copy of the duly stamped and validated form from the RDO
representative.
Deadline
On or before January 31 following the calendar year in which the compensation
payment and other income payments subjected to final withholding taxes were paid
or accrued.
[return to index]

RR No. 2-98, RR No. 3-98, RR No. 8-98, RR No. 10-98, RR No. 12-98, RR No. 3-99,
RR No. 8-2000, RR No. 10-2000, RR No. 6-2001, RR No. 12-2001, RR No. 9-2001, RR
No. 3-2002, RR No. 4-2002, RR No. 14-2002, RR No. 19-2002, RR No. 26-2002, RR
No. 14-2003, RR No. 16-2003, RR No. 17-2003, RR No. 30-2003, RR 1-2004, RR 32004, RR No. 5-2004, RR No. 8-2005, RR 1-2006, RR 2-2006, RR 4-2006, RR 4-2007,
RR 4-2008, RR 5-2008, RR 6-2008, RR 7-2008, RR 14-2008, RR No. 10-2008, RR 12009, RR 2-2009, RR 3-2009, RR 5-2009, RR 6-2009, RR 8-2009, RR 10-2009, RR No.
11-2010, RR No. 5-2011, RR No. 7-2011, RR No. 13-2011, RR No. 3-2012, RR No. 6-
2012, RR No. 8-2012, RR No. 14-2012, RR No. 16-2012, RR No. 1-2013, RR No. 102013, RR No. 11-2013
[return to index]

1) What are the types of Withholding Taxes?
There are two main classifications or types of withholding tax. These are:
a) Creditable Withholding Tax
Withholding
Tax
on
Expanded
Withholding
- Withholding of Business Tax (VAT and Percentage)
Compensation
Tax
b) Final Withholding Tax

2) What is compensation?
It means any remuneration received for services performed by an employee from
his employer under an employee-employer relationship.
3) What are the different kinds of compensation?
a) Regular compensation - includes basic salary, fixed allowances for
representation, transportation and others paid to an employee
b) Supplemental compensation - includes payments to an employee in addition to
the regular compensation such as but not limited to the following:
Overtime
Pay
Fees,
including
director's
fees
Commission
Profit
Sharing
Monetized
Vacation
and
Sick
Leave
Fringe
benefits
received
by
rank
&
file
employees
Hazard
Pay
Taxable
13th
month
pay
and
other
benefits
- Other remunerations received from an employee-employer relationship
4) What are exempted from Withholding Tax on Compensation?
1. Remuneration as an incident of employment, such as the following:

a. Retirement benefits received under RA 7641
b. Any amount received by an official or employee or by his heirs from the
employer due to death, sickness or other physical disability or for any cause
beyond the control of the said official or employee such as retrenchment,
redundancy or cessation of business
c. Social security benefits, retirement gratuities, pensions and other similar
benefits
d. Payment of benefits due or to become due to any person residing in the
Philippines under the law of the US administered by the US Veterans
Administration
e. Payment of benefits made under the SSS Act of 1954, as amended
f. Benefits received from the GSIS Act of 1937, as amended, and the
retirement gratuity received by the government official and employees
2. Remuneration paid for agricultural labor and paid entirely in products of the
farm where the labor is performed
3. Remuneration for domestic services
4. Remuneration for casual labor not in the course of an employer's trade or
business
5. Compensation for services by a citizen or resident of the Philippines for a
foreign government or an international organization
6. Payment for damages
7. Proceeds of Life Insurance
8. Amount received by the insured as a return of premium
9. Compensation for injuries or sickness
10. Income exempt under Treaty
11. Thirteenth (13th) month pay and other benefits (not to exceed P 30,000)
12. GSIS, SSS, Medicare and other contributions
13. Compensation Income of Minimum Wage Earners (MWEs) with respect to

their Statutory Minimum Wage (SMW) as fixed by Regional Tripartite Wage and
Productivity Board (RTWPB)/National Wage and Productivity Commission
(NWPC), including overtime pay, holiday pay, night shift differential and hazard
pay, applicable to the place where he/she is assigned.
14. Compensation Income of employees in the public sector if the same is
equivalent to or not more than the SMW in the non-agricultural sector, as fixed by
RTWPB/NWPC, including overtime pay, holiday pay, night shift differential and
hazard pay, applicable to the place where he/she is assigned.
5) What are De Minimis Benefits?
- These are facilities and privileges of relatively small value and are offered or
furnished by the employer to his employees merely as means of promoting their
health, goodwill, contentment or efficiency. The following shall be considered "De
Minimis" benefits not subject to income tax, hence not subject to withholding tax
on compensation income of both managerial and rank and file employees:
Monetized unused vacation leave credits of private employees not
exceeding ten (10) days during the year;
Monetized value of vacation and sick leave credits paid to government
officials and employees.
Medical cash allowance to dependents of employees, not exceeding
P750.00 per employee per semester or P125.00 per month;
Rice subsidy of P1,500 or one (1) sack of 50 kg. rice per month amounting
to not more than P1,500;
Uniform and clothing allowance not exceeding P5,000 per annum;
Actual medical assistance, e.g. medical allowance to cover medical and
healthcare needs, annual medical/executive check-up, maternity assistance,
and routine consultations, not exceeding P10,000 per annum;
Laundry allowance not exceeding P300.00 per month;
Employees achievement awards, e.g., for length of service or safety
achievement, which must be in the form of a tangible personal property other
than cash or gift certificate, with an annual monetary value not exceeding
P10,000 received by the employee under an established written plan which
does not discriminate in favor of highly paid employees;
Gifts given during Christmas and major anniversary celebration not

exceeding P5,000.00 per employee perannum;
Daily meal allowance for overtime work and night/graveyard shift not
exceeding twenty-five percent (25%) of the basic minimum wage on a per
region basis;
6) What is substituted Filing of income tax returns (ITR)?
Substituted Filing of ITR is the manner by which declaration of income of
individuals receiving purely compensation income the taxes of which have been
withheld correctly by their employers. Instead of the filing of Individual Income
Tax Return (BIR Form 1700), the employers annual information return (BIR Form
No. 1604-CF) duly stamped received by the BIR may be considered as the
substitute Income Tax Return (ITR) of the employee, inasmuch as the
information provided therein are exactly the same information required to be
provided in his income tax return (BIR Form No. 1700). However, said employees
may still file ITR at his/her option.
7) Who are qualified to avail of the substituted filing of ITR?
Employees who satisfies all of the following conditions:
a. Receiving purely compensation income regardless of amount;
b. Working for only one employer in the Philippines for the calendar year;
c. Tax has been withheld correctly by the employer (tax due equals tax
withheld);
d. The employees spouse also complies with all three (3) conditions stated
above.
e. The employer files the annual information return (BIR Form No. 1604CF)
f. The employer issues BIR Form No. 2316 to each employee.
Note: For those employees qualified under the substituted filing, the employer
8) What income payments are subject to Expanded Withholding Tax?
a) Professional fees / talent fees for services rendered by the following:
- Those individually engaged in the practice of professions or callings such
as lawyers; certified public accountants; doctors of medicine; architects;
civil, electrical, chemical, mechanical, structural, industrial, mining, sanitary,

metallurgical and geodetic engineers; marine surveyors; doctors of veterinary
science; dentist; professional appraisers; connoisseurs of tobacco; actuaries;
interior decorators, designers, real estate service practitioners (RESPs), (i. e.
real estate consultants, real estate appraisers and real estate brokers)
requiring government licensure examination given by the Real Estate Service
pursuant to Republic Act No. 9646 and all other profession requiring
government licensure examinations and/or regulated by the Professional
Regulations Commission, Supreme Court, etc.
- Professional entertainers such as but not limited to actors and actresses,
singers, lyricist, composers and emcees
- Professional athletes including basketball players, pelotaris and jockeys
- Directors and producers involved in movies, stage, radio, television and
musical productions
- Insurance agents and insurance adjusters
- Management and technical consultants
- Bookkeeping agents and agencies
- Other recipient of talent fees
- Fees of directors who are not employees of the company paying such fees
whose duties are confined to attendance at and participation in the meetings
of the Board of Directors
b) Professional fees, talent fees, etc for services of taxable juridical persons
c) Rentals:
- Rental of real property used in business
- Rental of personal properties in excess of P 10,000 annually
- Rental of poles, satellites and transmission facilities
- Rental of billboards
d) Cinematographic film rentals and other payments
e) Income payments to certain contractors
- General engineering contractors

- General building contractors
- Specialty contractors
- Other contractors like:
1. Filling, demolition and salvage work contractors and operators of
mine drilling apparatus
2. Operators of dockyards
3. Persons engaged in the installation of water system, and gas or
electric light, heat or power
4. Operators of stevedoring, warehousing or forwarding establishments
5. Transportation Contractors
6. Printers, bookbinders, lithographers and publishers, except those
principally engaged in the publication or printing of any newspaper,
magazine, review or bulletin which appears at regular intervals, with
fixed prices for subscription and sale
7. Advertising agencies, exclusive of payments to media
8. Messengerial, janitorial, security, private detective, credit and/or
collection agenciesand other business agencies
9. Independent producers of television, radio and stage performances
or shows
10. Independent producers of "jingles"
11. Labor recruiting agencies and/or labor-only contractors
12. Persons engaged in the installation of elevators, central air
conditioning units, computer machines and other equipment and
machineries and the maintenance services thereon
13. Persons engaged in the sale of computer services, computer
programmers, software developer/designer, etc.
14. Persons engaged in landscaping services
15. Persons engaged in the collection and disposal of garbage

16. TV and radio station operators on sale of TV and radio airtime, and
17. TV and radio blocktimers on sale of TV and radio commercial
spots
f) Income distribution to the beneficiaries of estates and trusts
g) Gross commissions of customs, insurance, stock, immigration and commercial
brokers, fees of agents of professional entertainers and real estate service
practitioners (RESPs), (i. e. real estate consultants, real estate appraisers and real
estate brokers) who failed or did not take up the licensure examination given by
and not registered with the Real Estate Service under the Professional Regulations
Commission
h) Income payments to partners of general professional partnerships
i) Payments made to medical practitioners
j) Gross selling price or total amount of consideration or its equivalent paid to the
seller/owner for the sale, exchange or transfer of real property classified as
ordinary asset
k) Additional income payments to government personnel from importers, shipping
and airline companies or their agents
l) Certain income payments made by credit card companies
m) Income payments made by the top 20,000 private corporations to their purchase
of goods and services from local/resident suppliers other than those covered by
other rates of withholding
n) Income payments by government offices on their purchase of goods and
services, from local/resident suppliers other than those covered by other rates of
withholding
o) Commission, rebates, discounts and other similar considerations paid/granted to
independent and exclusive distributors, medical/technical and sales representatives
and marketing agents and sub-agents of multi level marketing companies.
p) Tolling fees paid to refineries
q) Payments made by pre-need companies to funeral parlors
r) Payments made to embalmers by funeral parlors
s) Income payments made to suppliers of agricultural products (suspended per RR

3-2004)
t) Income payments on purchases of mineral, mineral products and quarry
resources
u) On gross amount of refund given by MERALCO to customers with active
contracts as classified by MERALCO;
v) Interest income on the refund paid through direct payment or application against
customers' billing by other electric Distribution Utilities in accordance with the
rules embodied in ERC Resolution No. 8 series of 2008 dated June 4, 2008
governing the refund of meter deposits which was approved and adopted by ERC
in compliance with the mandate of Article 8 of the Magna Carta for Residential
Electricity Consumers and Article 3.4.2 of DSOAR exempting all electricity
consumers, whether residential or non-residential from the payment of meter
deposit.
w) Income payments made by the top 5,000 individual taxpayers to their purchase
of goods and services from their local/resident suppliers other than those covered
by other rates of withholding
x) Income payments made by political parties and candidates of local and national
elections of all their campaign expenditures, and income payments made by
individuals or juridical persons for their purchases of goods and services intended
to be given as campaign contribution to political parties and candidates
y) Interest Income derived from any other debt instruments not within the coverage
of deposit substitutes and RR No. 14-2012
z) Income payments subject to Withholding Tax received by Real Estate
Investment Trust (REIT) (Sec.12 of RR No. 13-2011)
9) What income payments are subject to Final Withholding Tax?
a) Income Payments to a Citizen or to a Resident Alien Individual:
Interest
on
any
peso
bank
deposit
Royalties
- Prizes [except prizes amounting to P10,000 or less which is subject to tax
under
Sec.
24(A)(1)
of
the
Tax
Code]
- Winnings (except winnings from Philippine Charity Sweepstake Office and
Lotto)
Interest
income
on
foreign
currency
deposit
- Interest income from long term deposit (except those with term of five
years
or
more)
Cash
and/or
property
dividends
- Capital Gains presumed to have been realized from the sale, exchange or
other disposition of real property
b) Income Payments to a Non-Resident Alien Engaged in Trade or Business in the
Philippines
On
Certain
Passive
Income
cash
and/or
property
dividend
- Share in the distributable net income of a partnership
Interest
on
any
bank
deposits
Royalties
- Prizes (except prizes amounting to P10,000 or less which is subject to tax
under
Sec.
25(A)(1)
of
the
Tax
Code.
- Winnings (except from Philippine Charity Sweepstake Office and Lotto)
- Interest on Long Term Deposits (except those with term of five years or
more)
- Capital Gains presumed to have been realized from the sale, exchange or
other disposition of real property
c) Income Derived from All Sources Within the Philippines by a Non-Resident
Alien Individual Not Engaged in Trade or Business
- On gross amount of income derived from all sources within the Philippines
- On Capital Gains presumed to have been realized from the sale, exchange
or disposition of real property located in the Philippines
d) Income Derived by Alien Individual Employed by a Regional or Area
Headquarters and Regional Operating Headquarters of Multinational Companies,
Income Derived by Alien Individual Employed by Offshore Banking Units and
Income of Aliens Employed by Foreign Petroleum Service Contractors and
Subcontractors
e) Income Payment to a Domestic Corporation
- Interest from any currency bank deposits and yield or any other monetary
benefit from deposit substitutes and from trust fund and similar arrangements
derived from sources within the Philippines
- Royalties derived from sources within the Philippines
- Interest income derived from a depository bank under the Expanded
Foreign Currency Deposit (FCDU) System
- Income derived by a depository bank under the FCDU from foreign

transactions with local commercial banks
- On capital gains presumed to have been realized from the sale, exchange or
other disposition of real property located in the Philippines classified as
capital assets, including pacto de retro sales and other forms of conditional
sales based on the gross selling price or fair market value as determined in
accordance with Sec. 6(E) of the NIRC, whichever is higher
f) Income Payments to a Resident Foreign Corporation
- Offshore Banking Units
- Tax on branch Profit Remittances
- Interest on any currency bank deposits and yield or any other monetary
benefit from deposit substitute and from trust funds and similar arrangements
and royalties derived from sources within the Philippines
- Interest income on FCDU
- Income derived by a depository bank under the expanded foreign currency
deposits system from foreign currency transactions with local commercial
banks
g) Income Derived from all Sources Within the Philippines by a Non-Resident
Foreign Corporation
- Gross income from all sources within the Philippines such as interest,
dividends, rents, royalties, salaries, premiums (except re-insurance
premiums), annuities, emoluments or other fixed determinable annual,
periodic or casual gains, profits and income or capital gains;
- Gross income from all sources within the Philippines derived by a nonresident cinematographic film owner, lessor and distributor
- On the gross rentals, lease and charter fees derived by a non-resident owner
or lessor of vessels from leases or charters to Filipino citizens or corporations
as approved by the Maritime Industry Authority
- On the gross rentals, charter and other fees derived by a non-resident lessor
of aircraft, machineries and other equipment
- Interest on foreign loans contracted on or after August 1, 1986
h) Fringe Benefits Granted to the Employee (except Rank and File)
- Goods, services or other benefits furnished or granted in cash or in kind by

an employer to an individual employee (except rank and file) such as but not
limited to the following:
Housing
Vehicle
of
any
kind
Interest
on
loans
Expenses
for
foreign
travel
Holiday
and
vacation
expenses
- Educational assistance to employees or his dependents
- Membership fees, dues and other expense in social and athletic clubs
or
other
similar
organizations
- Health insurance
i) Informers Reward
j) Cash or property dividends paid by a Real Estate Investment Trust (REIT)
pursuant to Section 13 of RR 13-2011
10) Aside from the required withholding of income tax by government agencies and
instrumentalities on their payments to their suppliers of goods and services, what other
tax types must be withheld by them.
a) Value Added Tax on all income payments subject to VAT
b) Percentage Tax on all payments subject to percentage tax such as payments to
the following:
- Any person engaged in business whose gross sales or receipts do not
exceed P1,919,500 (RR 3-2012) and who are not VAT-registered persons.
(Persons exempt from VAT under Sec. 109V 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 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 of the preceding year do not exceed Ten Million
(P10,000,000.00) Pesos and did not opt to register as VAT Taxpayers
- Communication providers with regards to overseas dispatch, messages or
conversation from the Philippines
- Banks and non-bank financial intermediaries and finance companies

- Life insurance companies
- Agents of foreign insurance companies
- Proprietor, lessee, or operator of cockpits, cabarets, night or day clubs,
videoke/karaoke bars, karaoke television, karaoke boxes, music lounges and
other similar establishments, boxing exhibitions, professional basketball
games, jai-alai and race tracks
- Winners in horse races or owner of winning race horses
- 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 broker, whether domestic or 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
11) Who is a withholding agent?
A withholding agent is any person or entity who is required to deduct and remit the
taxes withheld to the government.
12) What are the duties and obligations of the withholding agent?
The following are the duties and obligations of the withholding agent:
a) To Register - withholding agent is required to register within ten (10) days
after acquiring such status with the Revenue District office having
jurisdiction over the place where the business is located
b) To Deduct and Withhold - withholding agent is required to deduct tax
from all money payments subject to withholding tax
c) To Remit the Tax Withheld - withholding agent is required to remit tax
withheld at the time prescribed by law and regulations
d) To File Annual Return - withholding agent is required to file the
corresponding Annual Information Return at the time prescribed by law and
regulations
e) To Issue Withholding Tax Certificates - withholding agent shall furnish

Withholding Tax Certificates to recipient of income payments subject to
withholding
13) Who are considered TOP 20,000 Corporate Taxpayers?
Top twenty thousand (20,000) private corporations shall include a corporate
taxpayer who has been determined and notified by the Bureau of Internal Revenue
(BIR) as having satisfied any of the following criteria:
a) Classified and duly notified by the Commissioner as a large taxpayer
under Revenue Regulation No. 1-98, as amended, or belonging to the top
five thousand (5,000) private corporations under RR 12-94, or to the top ten
thousand (10,000) private corporations under RR 17-2003, unless previously
de-classified as such or had already ceased business operations (automatic
inclusion);
b) VAT payment or payable whichever is higher, of at least P100,000 for the
preceding year;
c) Annual income tax due of at least P200,000 for the preceding year;
d) Total percentage tax paid of at least P100,000 for the preceding year;
e) Gross sales of P10,000,000 and above for the preceding year;
f) Gross purchases of P5,000,000 and above for the preceding year;
g) Total excise tax payment of at least P100,000 for the preceding year.
14) What are the obligations of Top 20,000 Corporate Taxpayers?
a) In addition to the above responsibilities of a withholding agent, Top 20,000
private corporations shall withhold the one percent (1%) creditable expanded
withholding tax on the purchase of goods and two percent (2%) on the purchase of
services (other than those covered by other withholding tax rates) from local
suppliers where it regularly makes purchases. However, casual purchase of goods
shall not be subject to withholding tax unless the amount of purchase at any one
time involves P10,000 or more, in which case, it shall then be required to withhold
the tax. The same rule apply to local/resident supplier of services other than those
covered by separate rates of withholding tax. Provided, however, that for purchases
involving agricultural products in their original state, the tax required to be
withheld shall only apply to purchases in excess of the cumulative amount of
P300,000 within the same taxable year. For this purpose, agricultural products in
their original state shall only include corn, coconut, copra, palay, rice cassava,
sugar cane, coffee, fruits, vegetables, marine food products, poultry and livestocks.
b) Taxes withheld shall be remitted using BIR Form 1601-E on a monthly basis
thru the use of the Electronic Filing and Payment System (EFPS) on the dates
prescribed for e-filers. Filing shall be done on a staggered basis provided under RR
26-2002 and payment shall be made every 15th day following the end of the month
for Jan-Nov and Jan. 20 of the following year for the month of December.
c) Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) shall be
issued to the payees within twenty (20) days following the close of such payees
taxable quarter or upon demand of the payees;
d) A list of regular supplier of goods and/or services shall be submitted on a
semestral basis through e-submission facility or as an attachment under Electronic
Filing and Payment System (EFPS). Deadline for submission of the list is not later
than July 31 and January 31 of each year. However, initial list of regular suppliers
should be submitted within fifteen (15) days from actual receipt hereof.
15) Who are considered TOP 5,000 Individual Taxpayers?
Top 5,000 Individual Taxpayers shall refer to individual taxpayers engaged in trade
or business or exercise of profession who have been determined and notified by the
Bureau of Internal Revenue (BIR) as having satisfied any of the following criteria:
a) VAT payment or payable whichever is higher, of at least P100,000 for the
preceding year;
b) Annual income tax due of at least P200,000 for the preceding year;
c) Total percentage tax paid of at least P100,000 for the preceding year;
d) Gross sales of P10,000,000 and above for the preceding year;
e) Gross purchases of P5,000,000 and above for the preceding year;
f) Total excise tax payment of at least P100,000 for the preceding year.
16) What are the obligations of Top 5,000 Individual Taxpayers?
a) In addition to the obligations of a withholding agent, Top 5,000 Individual
Taxpayers shall withhold the one percent (1%) creditable expanded withholding on
the purchase of goods and two percent (2%) on the purchase of services (other than
those covered by other withholding tax rates) from local suppliers where it
regularly makes purchases. However, casual purchase of goods shall not be subject
to withholding tax unless the amount of purchase at any one time involves P10,000
or more, in which case, it shall then be required to withhold the tax. The same rule
apply to local/resident supplier of services other than those covered by separate
rates of withholding tax. Provided, however, that for purchases involving
agricultural products in their original state, the tax required to be withheld shall
only apply to purchases in excess of the cumulative amount of P300,000 within the
same taxable year. For this purpose, agricultural products in their original state
shall only include corn, coconut, copra, palay, rice cassava, sugar cane, coffee,
fruits, vegetables, marine food products, poultry and livestocks.
b) Taxes withheld shall be remitted under BIR Form 1601-E on a monthly basis
thru the Electronic Filing and Payment System (EFPS) facility within the
prescribed period.
c) Certificate of Creditable Tax Withheld at Source (BIR Form No. 2307) shall be
issued to the payees within twenty (20) days following the close of such payees
taxable quarter or upon demand of the payees;
d) A list of regular supplier of goods and/or services shall be submitted on a
semestral basis through e-submission facility or as an attachment under Electronic
Filing and Payment System (EFPS). Deadline for submission of the list is not later
than July 31 and January 31 of each year. However, initial list of regular suppliers
should be submitted within fifteen (15) days from actual receipt hereof.
17) Who are the responsible officials in the government offices charged with the duty to
deduct, withhold and remit withholding taxes?
The following officials are duty bound to deduct, withhold and remit taxes:
a) For Office of the Provincial Government-province- the Chief Accountant,
Provincial Treasurer and the Governor;
b) For Office of the City Government-cities- the Chief Accountant, City
Treasurer and the City Mayor;
c) For Office of the Municipal Government-municipalities- the Chief
Accountant, Municipal Treasurer and the Mayor;
d) Office of the Barangay-Barangay Treasurer and Barangay Captain
e) For NGAs, GOCCs and other Government Offices, the Chief Accountant
and the Head of Office or the Official holding the highest position.
[return to index]
BASIC CONCEPT:
Excise Tax is a tax on the production, sale or consumption of a commodity in a

country.
APPLICABILITY:
On goods manufactured or produced in the Philippines for domestic sale or

consumption or for any other disposition; and
On goods imported.
TYPES OF EXCISE TAX:
Specific Tax refers to the excise tax imposed which is based on weight or
volume capacity or any other physical unit of measurement
Ad Valorem Tax refers to the excise tax which is based on selling price or other
specified value of the goods/articles
MANNER OF COMPUTATION:
Specific Tax = No. of Units/other measurements x Specific Tax Rate

Ad Valorem Tax = No. of Units/other measurements x Selling Price of any
specific value per unit x Ad Valorem Tax Rate
MAJOR CLASSIFICATION OF EXCISABLE ARTICLES AND RELATED

CODAL SECTION:
1. Alcohol Products (Sections 141-143)
a.
Distilled
Spirits
b.
Wines
c. Fermented Liquors (Section 143)
(Section
(Section
141)
142)
2. Tobacco Products (Sections 144-146)

a.
Tobacco
Products
b.
Cigars
&
Cigarettes
c. Inspection Fee (Section 146)
(Section
(Section
144)
145)
3. Petroleum Products (Section 148)

4. Miscellaneous Articles (Section 149-150)
a.
Automobiles
b. Non-essential Goods (Section 150)
5. Mineral Products (Sections 151)
PERSONS LIABLE TO EXCISE TAX:
In General:
(Section
149)
a. On Domestic or Local Articles
Manufacturer
Producer
Owner or person having possession of articles removed from the
place of production without the payment of the tax
b. On Imported Articles
Importer
Owner
Person who is found in possession of articles which are exempt
from excise taxes other than those legally entitled to exemption
Others:
On Indigenous Petroleum
Local Sale, Barter or Transfer
First buyer, purchaser or transferee
Exportation
Owner, lessee, concessionaire or operator of the mining

claim
TIME OF PAYMENT:
In General
o
On domestic products
Before removal from the place of production
On imported products
Before release from the customs' custody

[return to index]
EXCISE TAX RATES:

A. ALCOHOL PRODUCTS
PARTICULARS
NEW TAX RATES based on Republic Act No. 10351 Remarks

2018
2013
2014
2015
2016
2017
onwards
A. DISTILLED SPIRITS, AD VALOREM & SPECIFIC TAX

1) AD VALOREM
TAX RATE - Based
on the Net Retail
Price (NRP) per
proof (excluding the
excise and valueadded
taxes);
and
2) SPECIFIC TAX Per proof liter
15%
Php20
15%
Php20
20%
Php20
20%
Php20.80
20%
20%
Effective
1/1/2016,
the
specific
tax rate
Php21.63
shall be
increased
by 4%
every year
thereafter
B. WINES, per liter of volume capacity

1) Sparkling wines/
champagnes, where
the NRP (excluding
the excise and VAT)
per bottle of 750ml
volume
capacity,
Effective
1/1/2014,
the
specific
tax rate
shall be
regardless of proof
is:
Php500.00 or less
Php250
Php260 Php270.40 Php281.22 Php292.47
More than
Php500.00
Php700
Php728 Php757.12 Php787.40 Php818.90
2) Still wines and

carbonated
wines
containing 14% of Php30.00 Php31.20 Php32.45
alcohol by volume
or less
Php33.75
3) Still wines and

carbonated
wines
containing
more
than
14%
(of Php60.00 Php62.40 Php64.90
alcohol by volume)
but not more 25% of
alcohol by volume
Php67.50
4) Fortified wines
containing
more
than 25% of alcohol
by volume
Php35.10
increased
by 4%
every year
thereafter
Php70.20
Taxed as distilled spirits
C. FERMENTED LIQUORS , per liter of volume capacity

1) If the NRP
(excluding
excise
and VAT) per liter of
volume capacity is:
Php 50.60 and
below
Php15.00 Php17.00 Php19.00
Php21.00
More than Php

50.60
Php20.00 Php21.00 Php22.00
Php23.00
Effective
1/1/2018,
the
specific
tax rate
shall be
Php23.50
increased
by 4%
every year
Php23.50 thereafter
2) If brewed and Php28.00 Php29.12 Php30.28

sold
at
microbreweries or
small establishments
such as pubs and
restaurants,
regardless of the
NRP
Php31.50
Php32.76
Effective
1/1/2014,
the
specific
tax rate
shall be
increased
by 4%
every year
thereafter
NOTE:
IN CASE OF FERMENTED LIQUORS AFFECTED BY THE "NO DOWNWARD
RECLASSIFICATION " PROVISION, THE 4% INCREASE SHALL APPLY TO THEIR
RESPECTIVE APPLICABLE TAX RATES
B. TOBACCO PRODUCTS
PARTICULARS
NEW TAX RATES based on Republic Act No.

10351
2013
2014
2015
2016
2017
Php1.89
Php1.97
Php2.05
Remarks
2018
onwards
A. TOBACCO PRODUCTS, per kilogram

1. Tobacco Products
(a) Tobacco twisted by
hand or reduced into a
condition
to
be
consumed
in
any Php1.75
manner other than the
ordinary
mode
of
drying and curing;
Php1.82
(b) Tobacco prepared

or partially prepared
with or without the use
of any machine or Php1.75
instrument or without
being
pressed
or
sweetened; and
Php1.82
Php1.89
Php1.97
(c) Fine-cut shorts and

refuse,
scraps,
clippings,
cuttings, Php1.75
stems, midribs and
sweepings of tobacco;
Php1.82
Php1.89
Php1.97
Php2.05
2. Chewing tobacco
unsuitable for use in Php1.50
any other manner
Php1.56
Php1.62
Php1.68
Php1.75
Effective
1/1/2014,
the specific
tax rate
shall be
Php2.05 increased
by 4%
every year
thereafter
B. CIGARS, per cigar

3. Cigars
(a) Based on the NRP
per cigar (excluding
20%
20%
20%
20%
20%
Effective
1/1/2014,
the specific
the excise and valueadded taxes), and

(b) Per cigar
Php5.00
Php5.20
Php5.41
Php5.62
Php5.85
tax rate
shall be
increased
C. CIGARETTES , per pack

Effective
1/1/2018,
the specific
tax rate
1. Cigarettes packed by
Php12.00 Php15.00 Php18.00 Php21.00 Php30.00 shall be
hand
increased
by 4%
every year
thereafter
2. Cigarettes packed by
machine, where the
NRP (excluding excise
and VAT) per pack is:
(a) Php11.50 and
below
Php12.00 Php17.00 Php21.00 Php25.00 Php30.00
(b) More than

Php11.50
Php25.00 Php27.00 Php28.00 Php29.00 Php30.00
INSPECTION FEE - There shall be collected inspection fees on leaf tobacco, scrap,
cigars, Cigarettes and other manufactured tobacco and tobacco products as follows:
PRODUCT TYPE
INSPECTION FEE
(1) Cigars
P 0.50 per thousand pieces or fraction thereof
(2) Cigarettes
P 0.10 per thousand sticks or fraction thereof
(3) Leaf Tobacco
P 0.02 per kilogram or fraction thereof
(4) Scrap and other manufactured tobacco P 0.03 per kilogram or fraction thereof
C. PETROLEUM PRODUCTS
PRODUCT TYPE
TAX RATES
Lubricating oils and greases, including but not limited to

base stock for lube oils and greases, high vacuum
P 4.50 per liter
distillates, aromatic extracts and other similar preparations,

and additives for lubricating oils and greases, whether such
additives are petroleum based or not
Processed gas
P 0.05 per liter
Waxes and petrolatum
P 3.50 per kilogram
Denatured alcohol, if used for motive power [i.e. one

hundred eighty (180) proof ninety percent (90%) absolute
alcohol]. Provided, that unless otherwise provided by
special laws, if the denatured alcohol is mixed with
gasoline, the excise tax which has already been paid, only
the alcohol content shall be subject to tax
P 0.05 per liter
Naphtha, regular gasoline and other similar products of

distillation
P 4.35 per liter
Naphtha used as raw material in the production of

petrochemical products or as replacement fuel for natural
gas-fired combined cycle power plant, in lieu of locallyextracted natural gas during the non-availability thereof
P 0.00 per liter
Leaded premium gasoline
P 5.35 per liter
Unleaded premium gasoline
P 4.35 per liter
Aviation turbo jet fuel
P 3.67 per liter
Kerosene
P 0.00 per liter
Kerosene used as aviation fuel
P 3.67 per liter
Diesel fuel oil, and on similar fuel oils having more or less
the same generating power
P 0.00 per liter
Liquefied Petroleum Gas ; Provided, that if used for motive

power, it shall be taxed at the equivalent rate as the Excise
Tax on diesel fuel oil
P 0.00 per liter
Asphalt
P 0.56 per kilogram
Bunker fuel oil, and on similar fuel oils having more or less
the same generating power
P 0.00 per liter
D. MINERALS AND MINERAL PRODUCTS

PRODUCT TYPE
TAX RATES
On coal and coke
Ten Pesos (P10.00) per metric ton
All mineral and mineral products (non-
Two percent (2%) bases on the actual
metallic), quarry resources
market value, in the case of those locallyextracted or produced; and, in the case of
importation or the value used by the
Bureau of Customs in determining tariff
and customs duties, net of Excise Tax
and Value-Added Tax.
On locally-extracted natural gas and liquefied

natural gas
P0.00
On indigenous petroleum
Three percent (3%) of the fair

international market price thereof
NOTE:
In the case of mineral concentrates not traded in commodity exchanges in the Philippines
or abroad, such as copper concentrate, the actual market value shall be the world price
quotations of the refined mineral products content thereof prevailing in the said
commodity exchanges, after deducting the smelting, refining and other charges incurred
in the process of converting the mineral concentrates into refined metal traded in those
commodity exchanges.
On minerals and mineral products sold or consigned abroad, the actual cost of ocean
freight and insurance shall be deducted from the tax base.
E. AUTOMOBILES AND OTHER MOTOR VEHICLES
OVER
UP TO
RATE
P 600,000
2%
P600,000
P 1,100,000
P 12,000 + 20% in excess of P 600,000
P1,100,000
P2,100,000
P112,000+ 40% in excess of P1,100,000
P2,100,000
over
P512,000 + 60% in excess of P2,100,000
F. NON-ESSENTIAL GOODS
Twenty percent (20%) based on the wholesale price or the value of

importation used by the Bureau of Customs in determining Tariff and
Customs Duties, net of Excise and Value-Added taxes
[return to index]
I. RELATED REVENUE ISSUANCES
A. ALCOHOL PRODUCTS
RMC 18-2013 Further Clarifying the Taxability of Distilled Spirits Provided under
Revenue Memorandum Circular No. 3-2013
RMC 3-2013
Clarifying Certain Provisions of Revenue Regulations No. 17-2012

Implementing the Provisions of Republic Act No. 10351 as well as the
Provisions of Revenue Memorandum Circular No. 90-2012 Providing the
Initial Tax Classifications of Alcohol and Tobacco Products
RMC 90-2012 Revised Tax Rates of Alcohol and Tobacco Products Under Republic Act
No. 10351
RR 17-2012
Prescribing the Implementing Guidelines on the Revised Tax Rates on

Alcohol and Tobacco Products Pursuant to the Provisions of Existing
Revenue Regulations
RR 2-97
Revenue Regulations Governing Excise Taxation on Distilled Spirits,

Wines and Fermented Liquors
RR 3-2006

Alcohol and Tobacco Products pursuant to the Provisions of Republic Act
No. 9334, and Clarifying Certain Provisions of Existing Revenue
Regulations Relative Thereto
B. TOBACCO PRODUCTS
RMO 23-2013 Guidelines and Procedures for the Implementation of the Electronic
Official Register Book (eORB) System
RR 3-2013
Prescribing the Use of Electronic Official Register Book for

Manufacturers of Tobacco Products and Regulated Raw Materials
RMC 3-2013
Clarifying Certain Provisions of Revenue Regulations No. 17-2012

Implementing the Provisions of Republic Act No. 10351 as well as the
Provisions of Revenue Memorandum Circular No. 90-2012 Providing the
Initial Tax Classifications of Alcohol and Tobacco Products
RMC 90-2012 Revised Tax Rates of Alcohol and Tobacco Products Under Republic Act
No. 10351
RR 17-2012

Alcohol and Tobacco Products Pursuant to the Provisions of Existing
Revenue Regulations
RR 3-2006

Alcohol and Tobacco Products pursuant to the Provisions of Republic Act
No. 9334, and Clarifying Certain Provisions of Existing Revenue
Regulations Relative Thereto
RR 1-97
Revenue Regulations Governing the Excise Taxation of Cigars and

Cigarettes
C. Petroleum Products
RMC 50-2014 Reiteration and Clarification on the Requirement of Issuance of
Withdrawal Certificate for Every Removal of Petroleum or Petroleum
Products
RR 2-2012
Tax Administration Treatment of Petroleum and Petroleum Products

Imported into the Philippines Including those Coming in Through
Freeport Zones and Economic Zones and Registration of All Storage
Tanks, Facilities, Depots and Terminals
RR 8-2006
Prescribing the Implementing Guidelines on the Taxation and Monitoring

of the Raw Materials Used and the Bioethanol-Blended Gasoline (EGasoline) Produced under the Fuel Bioethanol Program of the Department
of Energy (DOE)
RR 8-96
An Act Restructuring the Excise Tax on Petroleum Products,

Reclassifying Natural Gas and Liquefied Natural Gas under Non-Metallic
Mineral and Quarry Resources and Reducing the Excise Tax on
Indigenous Petroleum
RR 13-77
Petroleum Products Regulation
D. Miscellaneous Articles
D.1 automobiles:
RMO 21-2013 Amending the Provisions of Revenue Memorandum Order (RMO) No.
35-2002, as Amended by RMO No. 20-2006 Prescribing the Guidelines
and Procedures in the Processing and Issuance of Authority to Release
Imported Goods (ATRIG) for Excise Tax Purposes
RMO 20-2006 Amendment to Certain Sections of RMO No. 35-2002
RMC 60-2003 Clarifying Certain Issues Raised Relative to the Implementation of
Revenue Regulations No. 25-2003 Governing the Imposition of Excise
Tax on Automobiles Pursuant to Republic Act No. 9224
RR 25-2003
Amended Revenue Regulations Governing the Imposition of Excise Tax

on Automobiles pursuant to the Provisions of Republic Act No. 9224, an
Act Rationalizing the Excise Tax on Automobiles, Amending for the
Purpose the NIRC of 1997, and for Other Purposes
RR 4-2003
Amending Certain Section of Revenue Regulations No. 14-97, as

Amended by Revenue Regulations No. 14-99, Otherwise Known as the
Revenue Regulations Governing the Imposition of Excise Tax on

Automobiles
RR 14-99
Amending Section 2 of Revenue Regulations No. 14-97 Otherwise known

as Revenue Regulations Governing the Imposition of Excise Taxes on
Automobiles and Other Motor Vehicles
RR 14-97
Revenue Regulations Governing the Imposition of Excise Tax on

Automobiles and Other Motor Vehicles
D.2 NON-ESSENTIAL GOODS:

RMC 33-2004 Revised Rules and Regulations Implementing Republic Act No. 8502,
Otherwise Known As The Jewelry Industry Development Act Of 1998
RMC 17-2002 Green Cross Baby Cologne and All Other Cologne Products
RR 1-99
Rules and Regulations Implementing the Tax Incentives Provided under

Section 3 (b) and (d) of Republic Act No. 8502 Otherwise known as the
Jewelry Industry Development Act of 1998
RR 8-84
Cosmetic Products Regulations
E. MINERAL PRODUCTS
RR 7-2008 Taxation on the Sale to the Bangko Sentral ng Pilipinas of Gold and Other
Metallic Mineral Products Extracted or Produced by Small-scale Miners and
further Amending Section 2.57.2 (t) of Revenue Regulations No. 2-98, as
amended
RR 13-94
Revenue Regulations Governing the Imposition of Excise Tax on Minerals

and Mineral Products
F. OTHERS (COMMON ISSUANCES FOR ALL EXCISABLE PRODUCTS)

RMO 14-2014 Guidelines and Procedures for the Processing and Issuance of An
Electronic Authority to Release Imported Goods (eATRIG) for Excise Tax
Purposes
RMC 10-2013 Transition Procedures for all Electronic Filing and Payment System
(eFPS) Filers in Filing Tax Returns Affected by the Revised Tax Rates on
Alcohol and Tobacco Products Pursuant to the provisions of Republic Act
No. 10351, An Act Restructuring the Excise Tax on Alcohol and Tobacco
Products by Amending Sections 141, 142, 143, 144, 145, 8, 131 and 288
of Republic Act No. 8424, Otherwise Known as the National Internal
Revenue Code of 1997, as Amended by republic Act No. 9334, and for
Other Purposes
RMO 38-2003 Prescribing Uniform Guidelines and Procedures in the Processing of

Various Permits for Excise Tax Purposes
RMO 35-2002 Prescribing the Guidelines and Procedures in the Processing and Issuance
of Authority to Release Imported Goods (ATRIG) for Excise and ValueAdded Tax Purposes
[return to index]
II. CODAL REFERENCE:

PARTICULAR
SECTION IN THE NIRC OF 1997,

AS AMENDED
ALCOHOL PRODUCTS
141-143
TOBACCO PRODUCTS
144-147
PETROLEUM PRODUCTS
148
MISCELLANEOUS ARTICLES
149-150
MINERAL PRODUCTS
151
[return to index]

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Description

Related Revenue Issuances

Frequently Asked Questions

6.) What does a real estate dealer refer to?

Dealer in securities, regularly engaged in the buying and selling of

In case of sale/transfer of principal residence, the Buyer/Transferee shall

21.) What is a Certificate Authorizing Registration?

Original Issue of Shares of

Tax Due Per

Par value of shares

Actual value repres

Sales, Agreements to Sell,

3.75% Par value of such s

Stock without par value

DST paid upon the

3.75% Par value of such b

Bank Checks, Drafts,

Face value of such

All Debt Instruments

Issue price of any s

All Bills of Exchange or

Face value of any s

Face value of such

Foreign Bills of Exchange

Face value of such

Life Insurance Policies

Policies Of Insurance upon

12.5% Premium charged

Fidelity Bonds and other

12.5% Premium charged

Policies of Annuities or other P200.00 or fraction

Cost of the ticket

Warehouse Receipts (except if Each Receipt

Jai-alai, Horse Race Tickets,

P1.00 cost of ticket

Cost of the ticket

Value of such good

If the value exceeds

Value of such good

Proxies(except proxies issued Each proxy

Lease and other Hiring

Mortgages Pledges of lands, First 5,000

Deed of Sale, instrument or

writing and Conveyances of

Charter parties and Similar

Market Value, whic

For each additional

1,000 tons and below

P500.00 for the

1,001 to 10,000 tons

Over 10,000 tons

Stamp Tax on Assignments

P1,000 for the

Related Revenue Issuances

Frequently Asked Questions

Policies of insurance or annuities made or granted by a fraternal or beneficiary

Certificates of oaths administered by any government official in his official

4) What are the implications of failure to stamp taxable documents?

7) What are the inclusions of a debt instrument? (sec. 5, RR No. 13-2004)

8) Is any document, transaction or arrangement entered into under Financial Lease

BIR Form 1800 Donors Tax Return

8. Proof of valuation of other types of personal properties, if applicable

Effective January 1, 1998 to present (Republic Act No. 8424)