Tax Particulars National Internal Revenue Code of 1997 R. A. No.

10963
Tax on Persons exempt from VAT
Percentage tax Sec. 116 Any person whose sales or receipts are exempt from VAT [ITEM VETOED] Effective 1 January 2019, self-
and who is not a VAT-registered person shall pay a tax equivalent to employed and professionals with total annual gross
3% of his gross quarterly sales or receipts. sales and/or gross receipts not exceeding PHP500,000
shall be exempt from 3% gross receipts tax.
Disposition of Shares Sec. 127 (A) There shall be levied, assessed, and collected on every The tax rate imposed is increased to 6/10 of 1%.
of Stock Listed and sale, barter, exchange or disposition of shares of stock listed and
Traded through Local traded through local stock exchange other than the sale by a dealer
Stock Exchange or in securities, a tax rate of ½ of 1% of the gross selling price or gross
through IPO value in money of the shares of stock.
Returns and Payment Sec. 128 The Commissioner may prescribe the time for filing the Repealed
of Percentage Taxes return as well as the manner and time of payment, including a scheme
of tax prepayment of other percentage taxes.
Excise taxes
Imposition of excise Sec. 129 Excise taxes apply to goods manufactured or produced in Excise taxes also apply to services performed in the
tax the Philippines for domestic sales or consumption or for any other Philippines.
disposition and to things imported.
On cigars and Sec. 145 (B) and (C) Excise tax on cigarettes packed by hand shall be Imposes excise tax on both cigarettes packed by hand
cigarettes based on the following schedule: and packed by machines at the following schedule:

Effective 1 Jan. 2013 PHP12/pack Effective 1 Jan. 2018 P32.50/pack

1 Jan. 2014 15/pack 1 Jul. 2018 35/pack
1 Jan. 2015 18/pack 1 Jan. 2020 37.50/pack
1 Jan. 2016 21/pack 1 Jan. 2022 40/pack
1 Jan. 2017 30/pack

Excise tax on cigarettes packed by machine shall be based on the The rate of tax imposed shall be increased by 4% every
following schedule: year effective on 1 January 2024, through revenue
regulations issued by the Secretary of Finance.
Net retail price

Effective PHP11.50 and below More than PHP12.00

1 Jan. 2013 PHP12.00/pack PHP25.00/pack
1 Jan. 2014 PHP17.00/pack PHP27.00/pack
1 Jan. 2015 PHP21.00/pack PHP28.00/pack
1 Jan. 2016 PHP25.00/pack PHP29.00/pack
1 Jan. 2017 PHP30.00/pack PHP30.00/pack

Isla Lipana & Co./PwC Philippines | Tax Alert No. 34 | Republic Act No. 10963 14
Tax Particulars National Internal Revenue Code of 1997 R. A. No. 10963
Mandatory fuel No existing provision Sec. 148-A The Secretary of Finance shall require the
markings use of an official fuel marking or similar technology on
petroleum products refined, manufactured or imported
in the Philippines, and that are subject to the payment of
taxes and duties.
On excise tax on Sec. 149 Excise tax imposed on automobiles are as follows: Amended the schedule to read as follows:
automobiles
Automobiles Excise tax rate
Over Up to Excise tax rate Not over P600,000 4%
0 PHP600,000 2% Over 600,000 to 1,000,000 10%
600,000 1,100,000 12,000 + 20% in excess of Over 1,000,000 to 4,000,000 20%
600,000
Over 4,000,000 50%
1,100,000 2,100,000 112,000+ 40% in excess of
1,100,000
2,100,000 512,000 + 60% in excess of
2,100,000

Indexation of brackets by the Secretary of Finance every two years Hybrid vehicles shall be subject to 50% of the applicable
is pegged on a percentage of the change in the exchange rate of the excise tax rates on automobiles. Purely electric vehicles
Philippine peso against the United States dollar. and pick-ups shall be exempt from excise tax on
automobiles.

Jeeps are considered automobiles. Pick-ups are

considered as trucks (and as such are not considered
automobiles).

Indexation of brackets by the Secretary of Finance is

removed.
On non-essential No existing provision Sec. 150-A Imposes a 5% tax on gross receipts, net of
services excise tax and VAT derived from performance of invasive
cosmetic surgeries, procedures, and body enhancements
for aesthetic purposes.

Excise tax exempt are the following:

• Procedures necessary to ameliorate a deformity arising
from, or directly related to a congenital or developmental
defect or abnormality, a personal injury resulting from an
accident or trauma, or disfiguring disease, tumor, virus
or infection; and
• Cases or treatments covered by the National Health
Insurance Program.

Isla Lipana & Co./PwC Philippines | Tax Alert No. 34 | Republic Act No. 10963 17
Tax Particulars
Adjustments in DST
Stamp Taxes Secs. 174-175, 177-182, 186,188-195 The following are the
corresponding DSTs:
Isla Lipana & Co./PwC Philippines | Tax Alert No. 34 | Republic Act No. 10963
National Internal Revenue Code of 1997
Original issuance of shares
Sales, agreements to sell, memoranda of sales,
deliveries or transfer of shares
Certificate of profits or interest in property or ac-
cumulations
Bank checks, drafts, certificates of deposit not bearing
interest, and other instruments
Debt Instruments
Bills of exchange or drafts
Acceptance of bills of exchange and others
Foreign bills of exchange and letters of credit
Policies of annuities or other instruments
Pre-need plans
Certificates
Warehouse receipts
Jai-alai, horse race tickets, lotto, or other authorized
number games
Bills of lading or receipts
Proxies
Powers of attorney
Leases and other hiring agreements
Mortgages, pledges, and deeds of trust
PHP1.00 on each 200 of the par value or
actual consideration for no-par shares
0.75 on each 200 of the par value; or 25%
of the DST paid upon original issuance of
no-par shares
0.50 on each 200 of the face value
1.50 on each instrument
1.00 on each 200 of the issue price
0.30 on each 200 of the face value
0.30 on each 200 of the face value
0.30 on each 200 of the face value
0.50 on each 200 of premium or install-
ment payment
0.20 on each 200 of the premium or
contribution collected
15.00 per certificate
15.00 per warehouse receipt (valued at
200 or more)
0.10 on every 1.00 cost of the ticket
Exempt if bill/receipts not exceeding 100;
1.00 for bill/receipts not exceeding 1,000;
or 10.00 for bill/receipts exceeding 1,000
15.00 on each proxy of voting
5.00 on each power of attorney; except for
acts connected with claims due to/from the
government
3.00 for the first 2,000 +1.00 for every
1,000 thereafter
20.00 for the first 5,000 + 10.00 on every
5,000 thereafter
R. A. No. 10963
Increased the rates for the following transactions:
Original issuance of shares
Sales, agreements to sell, memoranda of
sales, deliveries or transfer of shares
Certificate of profits or interest in property or
accumulations
Bank checks, drafts, certificates of deposit
not bearing interest, and other instruments
Debt Instruments
Bills of exchange or drafts
Acceptance of bills of exchange and others
Foreign bills of exchange and letters of credit
Policies of annuities or other instruments
Pre-need plans
Certificates
Warehouse receipts
Jai-alai, horse race tickets, lotto, or other
authorized number games
Bills of lading or receipts
Proxies
Powers of attorney
Leases and other hiring agreements
Mortgages, pledges, and deeds of trust
PHP2.00 on each 200 of the par
value or actual consideration for
no-par shares
1.50 on each 200 of the par value;
or 50% of the DST paid upon origi-
nal issuance of no-par shares
1.00 on each 200 of the face value
3.00 on each instrument
1.50 on each 200 of the issue price
0.60 on each 200 of the face value
0.60 on each 200 of the face value
0.60 on each 200 of the face value
1.00 on each 200 of premium or
installment payment
0.40 on each 200 of the premium
or contribution collected
30.00 per certificate
30.00 per warehouse receipt
(valued at 200 or more)
0.20 on every 1.00 cost of the
ticket
Exempt if bill/receipts not exceed-
ing 100; 2.00 for bill/receipts not
exceeding 1,000; or 20.00 for bill/
receipts exceeding 1,000
30.00 on each proxy of voting
10.00 on each power of attorney;
except acts connected with claims
due to/from the government
6.00 for the first 2,000 + 2.00 for
every 1,000 thereafter
40.00 for the first 5,000 + 20.00
on every 5,000 thereafter
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Tax Particulars National Internal Revenue Code of 1997 R. A. No. 10963
Stamp Taxes Sec. 183 Policies of insurance or other instruments are subjected to DST rates on life insurance policies are increased to:
the following DST rates:

Does not exceed PHP100,000 Exempt Does not exceed PHP100,000 Exempt
Exceeds 100,000 but does not exceed 300,000 PHP10.00 Exceeds 100,000 but does not exceed 300,000 PHP20.00
Exceeds 300,000 but does not exceed 500,000 25.00 Exceeds 300,000 but does not exceed 500,000 50.00
Exceeds 500,000 but does not exceed 750,000 50.00 Exceeds 500,000 but does not exceed 750,000 100.00
Exceeds 750,000 but does not exceed 1,000,000 75.00 Exceeds 750,000 but does not exceed 1,000,000 150.00
Exceeds 1,000,000 100.00 Exceeds 1,000,000 200.00

Sec. 196 DST is collected on deeds of sale and conveyances of real DST collected on deeds of sale, conveyances and
property only. donations of real property. Transfers exempt from donor’s
tax are exempted from DST.
Sec. 197 Every charter party and similar instrument shall be collected Every charter party and similar instrument shall be
a DST at the following rates: collected a DST at the following rates:

Registered tonnage DST rate Registered tonnage DST rate

Does not exceed 1,000 tons
Exceeds 1,000 tons and does not
exceed 10,000 tons
Exceeds 10,000 tons
PHP500 + an additional tax of PHP50 for each month or
fraction of a month in excess of 6 months.
1, 000 + an additional tax of 100 for each month or
fraction of a month in excess of 6 months.
1, 500 + an additional tax of 150 for each month or
fraction of a month in excess of 6 months.
Does not exceed 1,000 tons
Exceeds 1,000 tons and does
not exceed 10,000 tons
Exceeds 10,000 tons
PHP1,000 + an additional tax of PHP100 for
each month or fraction of a month in excess of
6 months.
2,000 + an additional tax of 200 for each month
or fraction of a month in excess of 6 months.
3,000 + an additional tax of 300 for each month
or fraction of a month in excess of 6 months.

On compliance requirements
Keeping of books of Sec. 232 All that are required by law to pay internal revenue taxes
accounts shall keep a journal and a ledger or their equivalents.
Those whose quarterly sales, earnings, receipts, or output do not
exceed PHP50,000 shall keep and use simplified set of bookkeeping
records.
Books of accounts with gross quarterly sales, earnings, receipts or
output exceeding PHP150,000 must be audited by a CPA.
All that are required by law to pay internal revenue
taxes shall keep and use relevant and appropriate set of
bookkeeping records.
Books of accounts with gross annual sales, earnings,
receipts or output exceeding PHP3m must be audited by
a CPA.

Isla Lipana & Co./PwC Philippines | Tax Alert No. 34 | Republic Act No. 10963 21
Tax Particulars National Internal Revenue Code of 1997
Issuance of No existing provision
receipts or sales or
commercial invoices
Other tax provisions
Interest Sec. 249 Interest of 20% per annum on any unpaid amount of tax.
Deficiency interest is due from the date prescribed for its payment
until full payment thereof.
Penalty provisions Sec. 254 Fine of not less than PHP30,000 but not more than
PHP100,000 and imprisonment of not less than two years but not
more than four years for attempt to evade or defeat any tax.
Sec. 264 Fine of not less than PHP1,000 but not more than
PHP50,000 and imprisonment of not less than two years but not more
than four years for the following:
• Printing of receipts or sales or commercial invoices without authority
from the BIR; or
• Printing of double or multiple sets of invoices or receipts; or
• Printing of unnumbered receipts or sales or commercial invoices,
not bearing the name, business style, Taxpayer Identification
Number, and business address of the person or entity
Isla Lipana & Co./PwC Philippines | Tax Alert No. 34 | Republic Act No. 10963
R. A. No. 10963
Sec. 237-A. Within 5 years from the effectivity of the Act
and upon establishment of a system capable of storing
and processing the required data, taxpayers engaged
in the export of goods and services, and under the
jurisdiction of the large taxpayers service are required to
electronically report their sales data to the BIR through the
use of electronic point of sales systems.
Machines, fiscal devices and fiscal memory devices shall
be at the expense of the taxpayer.
The data processing of sales and purchase data shall
comply with the provisions of R.A. No. 10173 or the
Data Privacy Act, the unlawful divulgence of taxpayer
information under the Tax Code and other laws relating to
the confidentiality of information.
Policies, risk management approaches, actions, trainings,
and technologies to protect the cyber environment,
organization, and data shall be established in compliance
with R.A. No. 10175 or the Cybercrime Prevention Act.
Interest imposed shall be double the legal interest rate
for loans or forbearance of any money in the absence
of an express stipulation as set by BSP. Delinquency
and deficiency interest shall in no case be imposed
simultaneously.
Increased the fine to not less than PHP500,000 but not
more than PHP10m and imprisonment of not less than six
years but not more than ten years.
Increased the fine to not less than PHP500,000 but not
more than PHP10m and imprisonment of not less than six
years but not more than ten years.
Included printing of fraudulent receipts to the list of
offenses.
23
Tax Particulars National Internal Revenue Code of 1997
Penalty provisions No existing penalty provisions in case of failure to transmit data
entered on Cash Register Machine (CRM)/ Point of Sales System
(POS) machines to BIR’s electronic sales reporting system.
No existing penalty provisions in case of purchase, use, possession,
sale or offer to sell, installment, transfer, update, upgrade, keeping or
maintaining of sales suppression devices.
No existing penalty provisions for offenses relating to fuel marking.
Isla Lipana & Co./PwC Philippines | Tax Alert No. 34 | Republic Act No. 10963
R. A. No. 10963
Sec. 264-A Imposes a penalty of 1/10 of 1% of annual net
income reflected in the audited financial statements for
the 2nd year preceding the current taxable year for each
day of violation or PHP10,000 whichever is higher, except
if failure to transmit is due to force majeure or causes
beyond the control of the taxpayer.
If the aggregate number of days of violation exceed
180 days within a taxable year, an additional penalty of
permanent closure of the taxpayer shall be imposed.
Sec. 264-B Imposes a fine of not less than PHP500,000
but not more than PHP10m, and imprisonment of not less
than two years but not more than four years.
Cumulative suppression of electronic sales record in
excess of PHP50m shall be considered as economic
sabotage and shall be punished in the maximum penalty.
Sec. 265-A Any person found to be engaged in the sale,
trade, delivery, distribution or transportation of unmarked
fuel in commercial quantity held for domestic use or
merchandise and any person who causes the removal
of the official fuel marking agent from marked fuel, and
the adulteration or dilution of fuel intended for sale to the
domestic market, or the knowing possession, storage,
transfer or offer for sale of fuel obtained as a result of such
removal, adulteration or dilution shall be penalized as
follows:
• 1st offense: a fine of PHP2.5m
• 2nd offense: a fine of PHP5m
• 3rd offense: a fine of PHP10m and revocation of license
to engage in any trade or business
Any person who commits any of the following acts
shall, upon conviction, be punished by a fine of not
less than PHP1m but not more than PHP5m and suffer
imprisonment of not less than four years but not more
than eight years:
1. making, importing, selling, using or possessing fuel
markers without express authority;
2. making, importing, selling, using or possessing
counterfeit fuel markers;
24