other percentage taxes

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Other Percentage Taxes Roxas, Edwin G. Valencia and Gregorio F. Transfer and Business Taxation: Principles and Laws with Accounting Applications. 6th. Vol. 1. Baguio: Valencia Educational Supply, 2013. 1 vols.

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Page 1: Other Percentage Taxes

Other Percentage Taxes

Roxas, Edwin G. Valencia and Gregorio F. Transfer and Business Taxation: Principles and Laws with Accounting Applications. 6th. Vol. 1. Baguio: Valencia Educational Supply, 2013. 1 vols. 

Page 2: Other Percentage Taxes

DEFINITIONThese are general consumption taxes imposed to Non-VAT registered business.

Page 3: Other Percentage Taxes

Is the business VAT-registered?

Yes No

Gross Receipts or sales subject to 12% output VAT and a benefit of

Input VAT on purchases

Does the annual gross receipts or sales exceed 1,919, 500?

Yes No

Gross Receipts or sales subject to 12% output VAT but no benefit of

Input VAT

Gross Receipts or sales subject to 3% percentage tax and no input tax

allowed

Page 4: Other Percentage Taxes

Businesses subject to OPT: loafbands

Page 5: Other Percentage Taxes

Life insurance companies

Amusement Places

Overseas dispatch or message from the Philippines.

Franchise

Page 6: Other Percentage Taxes

Bank and non-bank financial

institution.

Non – VAT businesses with annual sales of 1, 919, 500 and below

Domestic Carriers and keepers of

garages.Sale of shares of stock in local stock exchange

Page 7: Other Percentage Taxes

Life Insurance

Page 8: Other Percentage Taxes

A percentage tax of 5% of the total premium collected shall be imposed on collection from every person.

Life Insurance

1. The life insurance premium is refunded within 6 months.

2. Premiums collected outside the Philippines from nonresident persons.

EXEPTIONS

EXEPTIONS

Page 9: Other Percentage Taxes

Overseas dispatch or message from the Philippines.

Page 10: Other Percentage Taxes

Overseas Dispatch or Message from the Philippines

Subject to 10% TAX

BY telephone, telegraph, telewriter, exchange, and other communication equipment services

It is the expense of the caller to be withheld by the service provider.

Required to be collected and paid by the person rendering the services within 20 days after the end of each quarter

Page 11: Other Percentage Taxes

Overseas Dispatch or Message from the Philippines

Exemptions

BY telephone, telegraph, telewriter, exchange, and other communication equipment services

Government

Amt. paid for messages transmitted by the Gov’t. of the Phil or any of its

political subdivisions or instrumentalities.

Page 12: Other Percentage Taxes

Overseas Dispatch or Message from the Philippines

Exemptions

BY telephone, telegraph, telewriter, exchange, and other communication equipment services

Diplomatic Services

Amt. paid for messages transmitted by any embassy and consular offices

of a foreign government.

Page 13: Other Percentage Taxes

Overseas Dispatch or Message from the Philippines

Exemptions

BY telephone, telegraph, telewriter, exchange, and other communication equipment services

International Organizations

Amt. paid for messages transmitted by a public international organization or any of its agencies

based in the Philippines enjoying privileges, exemptions, and immunities w/c the Gov’t. of the

Philippines granted.

Page 14: Other Percentage Taxes

Overseas Dispatch or Message from the Philippines

Exemptions

BY telephone, telegraph, telewriter, exchange, and other communication equipment services

News Services

Amt. paid for messages fro any newspaper, press association, radio or television news, broadcasting agency, or news stickers services, to any other newspaper, radio or television newspaper, to a bonafide correspondent, which messages deal exclusively with the collection of news item for the dissemination of news item through public press, radio or television broadcasting or a news sticker service furnishing a general news service similar to that of the public press.

Page 15: Other Percentage Taxes

Amusement

Page 16: Other Percentage Taxes

Section 125, NIRC.

Amusement Activities OPT

Jai – alai and race tracts 30%

Cabarets, night or day clubs 18%

Cockpits 18%

Professional basketball games 15%

Boxing Exhibitions 10%

Page 17: Other Percentage Taxes

Boxing Exemption

One of the contenders for the World or Oriental Championship is

a citizen of the Philippines.

The promoter of the said boxing exhibition is a Filipino citizen. If the promoter is a corporation or association, at least 60% of its capital is owned by a Filipino

citizen.

Page 18: Other Percentage Taxes

Horse Race Winnings

10 %

Winnings or dividends derived from horse races based on the actual amount paid to person for every winning ticket after deducting the cost of the ticket.

4 %Winning from double, forcastiquinella

and trifecta bets.

Page 19: Other Percentage Taxes

Formula:

Item

Prize

Less: Cost of Ticket

Net Winnings

Multiply by amusement tax rate

Amusement Tax

Amount

P20,000

200

19,200

10%

P1,980

Page 20: Other Percentage Taxes

Franchises

Page 21: Other Percentage Taxes

Gas and

Water Franchi

se

A percentage tax of 2% on gross receipts derived from the

business covered by the law granting franchise

on gas and water utilities.

Page 22: Other Percentage Taxes

Radio and/or

Television Broadcastin

g Companies

Subject to 3% tax if gross receipts do not exceed P10,000,000.00• May opt to register as VAT

Taxpayer. • Registration is irrevocable

Gross receipts exceed the threshold. • RTBCs are mandated to register as VAT

taxpayers w/in 30 days from the end of the taxable year.

Page 23: Other Percentage Taxes

OtherFranchi

se

Subject to 12% Value Added Tax

Page 24: Other Percentage Taxes

Bank and Non-Bank Financial

Institution

Page 25: Other Percentage Taxes

Gross Receipts on Banks and Quasi – Banks

Maturity of 5 years or less 5%

More than 5 years 1%

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:

On dividends and equity shares in the net income of subsidiaries:

0%

Page 26: Other Percentage Taxes

Gross Receipts on Banks and Quasi – Banks

On royalties , rentals of real or personal property, profit from exchange and all other items treated as

gross income under Section 32 of the Code:

On net trading gains within the taxable year on foreign currency, debt securities, derivatives and other similar financial instruments

7%

7%

Page 27: Other Percentage Taxes

Gross Receipts on Other Non – Banks

From interest, commissions, discounts and all other items treated as income under the code:

Maturity of 5 years or less 5%

More than 5 years 1%

5%

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:

Page 28: Other Percentage Taxes

The maturity period shall be reckoned to the end as of the date of pre – termination for purposes of classifying the transaction and applying the correct rate of tax.

Pre – Termination

Page 29: Other Percentage Taxes

Non – VAT Business

Page 30: Other Percentage Taxes

Non – VAT Business

A non – VAT business with annual gross sales or gross receipts of P1,919,500 and below is subject to 3% OPT on its transactions.

Page 31: Other Percentage Taxes

Sales to Government by Non – VAT Business

Withholding percentage tax of 3%

• Seller is Non – VAT

Creditable withholding income taxes (CWIT) of

• 1% on purchases of goods• 2% on purchases of services

Page 32: Other Percentage Taxes

Domestic Carriers and Keepers of

Garages

Page 33: Other Percentage Taxes

Domestic Carriers

and Keepers of

GaragesCars for rent or hire driven by the lessee .

• except owners of bancas and owner of animal-drawn two wheeled vehicle

Transportation contractors persons who transport passengers for hire,

Domestic carriers by land for the transport of passengers

Keepers of garages.

Page 34: Other Percentage Taxes

International Air and

Shipping Carriers

(IASC)

Subject to a tax of 3% of their quarterly gross receipts.

International Carriers of foreign registry

Page 35: Other Percentage Taxes

subject to VAT on their domestic transport of both passengers and cargo

International Carriers of Philippine Registry

zero rated on their transport of passengers and cargo from the Philippine port to a foreign port.

International Air and

Shipping Carriers

(IASC)

Page 36: Other Percentage Taxes

Sale of shares of stock

Page 37: Other Percentage Taxes

IPO Percent of IPO to Outstanding Shares Tax Rate

Up to 25% 4%

Over 25% but not over 33 1/3% 2%

Over 33 1/3% 1%

Tax BaseHigher between the Gross Selling Price or Gross Value in money of the shares of stock sold, bartered or exchanged.

Page 38: Other Percentage Taxes

Sale through Local Stock Exchange

Subject to an percentage tax of ½ of 1% of the GSP or Gross Value in money.

Page 39: Other Percentage Taxes

In general, every person subject to the percentage tax shall file a quarterly return of the amount of his gross receipts, sales, or earnings and pay the tax due thereon w/in 25 days after the end of each taxable quarter.

Reminder:

Page 40: Other Percentage Taxes

Congratulations ! ! !