A.

ADMINISTRATIVE
OLD TAX CODE AMENDMENTS INTRODUCED BY TRAIN LAW
 No TIMTA yet at the time of the enactment of 1997 Tax Code  Power of the Commissioner to obtain information to include data supplied by
Cooperative Development Authority in compliance with “The Tax Incentives
Management & Transparency Act (TIMTA)”

 Presence of counterpart restrictions  Power of the Commissioner to make assessments notwithstanding any law requiring
prior authorization of any government agency or instrumentality

 Authority of the Commissioner to prescribe real property values subject to automatic

adjustment once every three (3) years
 No period is provided
B. INDIVIDUAL INCOME & RETURNS & PAYMENT
 Below Php 10,000.00 taxed at 5%  Below Php 250,000.00 no tax
 Over Php 500,000.00 taxed at 32%  Over Php 8M taxed at 35%
 No counter-part provision  Optional for self-employed & professionals to be taxed at 8% for gross revenues
below Php 3M or the new VAT threshold
 Personal exemption-Php 50,000.00  No more personal and additional exemptions
 Additional exemption-Php 25,000.00 per child
 No counter-part provision  Minimum wage earners receiving holiday pay still exempt from income tax
 Tax exempt 13th Month Pay & Other Benefits including  Php 90,000.00
Productivity Incentives & Christmas Bonus-Php 82,000.00
 Employees of RHQ, ROHQ, OBU, & Petroleum Service  Preferential tax treatment of 15% shall not apply anymore to registrants after January
Contractors taxed at 15% 1, 2018
 Fringe Benefit Tax-32%  35%
 None  Returns to consist of maximum of 4 pages showing personal profile & information,
gross revenues, allowable deductions, taxable income, income tax due & payable
 Deadline for 1st Quarter & Annual ITR-April 15  May 15
 Deadline for 2nd Installment of Annual Income Tax Due-July
15  October 15
C. PASSIVE INCOME
 PCSO & Lotto Winnings-exempt  Taxable above Php 10,000.00
 Interest income on foreign currency denominated units-7.5%  15% whether recipient is individual or domestic corporation
 Capital gains tax on unlisted shares-5% for 1st Php 100,000.00  15%
net capital gains realized and 10% in excess of Php 100,000.00
D. ESTATE
 Progressive at 5% to 20%  Flat rate of 6%
 Standard deduction at Php 1M  Php 5M
 Family home Php 1M  Php 10M
 CPA Certification needed at Php 2M  Php 5M
 None  Final withholding tax at 6% on withdrawals on deposits of decedent
 Estate tax return filing deadline-within 6 months from the date  1 year
of death
 No counterpart provisions  Payment by installment in 2 years in case of insufficient cash without civil penalty
& interest
E. DONATION
 0%-15% & 30% on donations to strangers  6% in excess of Php 250,000.00
F. VAT
 VAT threshold-Php 1,919,500.00  Php 3M
 Sale of goods to PEZA-0%  Subject to 12% upon implementation of enhanced VAT refund system
 Php 1.5M
 VAT exempt sale of residential lot-not more than Php
1,919,200.00  Php 2.5M, by 2021 Php 2M
 VAT exempt sale of residential house & lot-Php 3,199,200.00
 VAT exempt lease of residential unit-Php 10,000.00
 Association dues, membership fees & other assessments &  Php 15,000.00
charges of homeowner’s association & condominium
corporation-vatable
 Transfer property pursuant to Section 40 (C) (2) of the Tax  VAT exempt
Code on tax-free exchange-vatable
 Sale of medicines-12% VAT
 VAT exempt

 VAT exempt Transfer of Sale of drugs and medicines for diabetes, high cholesterol
& hypertension-VAT exempt effective January 1, 2019

 Amortization of input VAT on capital goods  Repealed by 2022

 120-day period within which to refund reckoned from the  90 days reckoned from the date of submission of official receipts & invoices
complete submission of documents
 In case of inaction, appeal to CTA after the expiration of 120-
day period  BIR officer may be punished
 Monthly & quarterly VAT filing  Effective 2023 only quarterly VAT filing
G. PERCENTAGE TAX
 Cooperatives are exempt from 3% gross receipts tax  Beginning January 1, 2019 , annual gross receipts not exceeding Php 500,000.0
 shall be exempt from 3%
 Self-employed & professionals with gross receipts of Php  Exempt effective January 1, 2019 if annual gross receipts not exceeding Php
1,919,500.00 and less-subject to 3% 500,000.00
 Stock transaction tax on listed shares-0.50 of 1%  0.60 of 1%
H. EXCISE TAX
 Php 31.20 per pack with 4% increase annually  Php 32.50-January 2018
Php 35.00-January 2019
Php 37.50-January 2020
Php 40.00-January 2022
4% annual increase
 Diesel-Php 0.00 per liter  Php 2.50 per liter-2018
Php 4.50 per liter-2019
Php 6.00 per liter-2020
 Unleaded & premium gasoline-Php 4.35 per liter
 Php 7.00 per liter-2018
Php 9.00 per liter-2019
Php 10.00 per liter-2020
 No counterpart provisions  Mandatory marking of all fuel products
 2% for up to Php 600,000.00  4%
 Php 12,000.00 + 20% in excess of Php 600,00.00  10% for over Php 600,000.00-Php 1M
 Php 112,000.00 + 40% in excess over Php 1.1M
 Php 512,000.00 + 60% of excess over Php 2.1M

 20% for over Php 1M-Php 4M

 50% for over Php 4M

 Cosmetic procedures for aesthetic reasons-none  5%
 Sweetened beverages-none  Php 6.00 per liter using caloric & non-caloric sweeteners
 Php 12.00 per liter using high-fructose corn syrup
 Php 10.00.00 per metric ton of coal  Php 50.00-2018
Php 100.00-2019
Php 150.00-2020
 Various rates for other minerals
100% increase in rate for other minerals
I. DOCUMENTARY STAMP TAX
 Various transactions subject to different rates & amounts  100% increase in rate except DST on loans from Php 1.00 to Php 1.50 per Php
200.00 & no increase in sale of real property & insurance policies

J. COMPLIANCE REQUIREMENTS
 Php 600,000.00 threshold for keeping of books of accounts for  Php 3M
entities
K. ADMINISTRATIVE PROVISIONS
 Php 25.00 sale required to issue official receipt/invoice  Php 100.00.0
 Electronic sales reporting-none except the current Quarterly  Enhanced electronic point of sales reporting by taxpayers engaged in export of
Summary List of Sales & Purchases & List of Importation, e- goods & services & Large Taxpayerswithin 5 years from enactment of TRAIN
Sales Reporting
 Monthly filing of withholding tax & percentage tax/VAT  Quarterly filing of withholding tax except compensation & VAT/percentage
 Deficiency interest-20%  Double the legal interest rate per annum
 Penalty for failure to transmit sales data entered on Cash  1/10 of 1% of the annual net income for the 2nd year preceding the current taxable
Register Machine/Point of Sales Machine to the BIR’s Electronic year for each day of violation or Php 10,000 whichever is higher & permanent closure
Sales Reporting System-administrative penalty if violation exceeds 180 days

B. BIR ISSUANCE
The BIR has issued Revenue Memorandum Circular (RMC) No. 1-2018 dated January 4, 2018 which prescribes the procedures on the use
of withholding tax table on compensation income and advises the application of 8% creditable withholding tax rate on income payments
to self-employed individuals or professionals.

If you are interested to get a copy of the RMC, please e-mail us.

C. TAX NEWS

1. PEZA suspends SSI, NCCC

2. BIR to streamline documentary requirements for MSMEs