unit 12 session 4
TRANSCRIPT
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UNIT 12TAXATION
Session 4
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Topics
Review of Last session
Test of baseline knowledge
The National Internal Revenue Code
Tax Procedure in the Philippines
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Review of Last session
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Test of baseline knowledge
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The National Internal Revenue Code
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REPUBLIC ACT NO. 8424
TAX REFORM ACT OF 1997
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ORGANIZATION AND FUNCTION OF THE
BUREAU OF INTERNAL REVENUE
Chief Officials of the Bureau of Internal
Revenue.
Chief to be known as Commissioner of InternalRevenue,
Four (4) assistant chiefs to be known as Deputy
Commissioners.
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ORGANIZATION AND FUNCTION OF THE
BUREAU OF INTERNAL REVENUE
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BIR Commissioner
Power of the Commissioner to Interpret Tax Laws and to
Decide Tax Cases.
Power of the Commissioner to Obtain Information, and to
Summon, Examine, and Take Testimony ofP
ersons.
Power of the Commissioner to Make assessments and
Prescribe additional Requirements for Tax Administration
and Enforcement.
Authority of the Commissioner to Delegate Power.
Duty of the Commissioner to Ensure the Provision and
Distribution of forms, Receipts, Certificates, and Appliances,
and the Acknowledgment ofPayment of Taxes.
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Agents and Deputies for Collection of
National Internal Revenue Taxes
(a) The Commissioner of Customs and his subordinates with
respect to the collection of national internal revenue taxes
on imported goods;
(b) The head of the appropriate government office and hissubordinates with respect to the collection of energy tax;
(c) Banks duly accredited by the Commissioner with respect to
receipt of payments internal revenue taxes authorized to be
made thru bank.
(d) Any officer or employee of an authorized agent bank
assigned to receive internal revenue tax payments and
transmit tax returns or documents to the Bureau of Internal
Revenue shall be subject to the same sanctions and penalties
prescribed in Sections 269 and 270 of this Code.
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Authority of Officers
Authority of Officers to Administer Oaths and Take
Testimony.
Authority of Internal Revenue Officers to Make Arrests and
Seizures.
Assignment of Internal Revenue Officers Involved in Excise
Tax Functions to Establishments Where Articles subject to
Excise Tax are Produced or Kept.
Assignment of Internal Revenue Officers and Other
Employees to Other Duties.
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Sources of Revenue considered as
National(a) Income tax;
(b) Estate and donor's taxes;
(c) Value-added tax;(d) Other percentage taxes;
(e) Excise taxes;
(f) Documentary stamp taxes; and(g) Such other taxes as are or hereafter may be
imposed and collected by the Bureau of
Internal Revenue.
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TAX ON INCOME
TAX ON INDIVIDUALSTAX ON INDIVIDUALS
TAX ON CORPORATIONSTAX ON CORPORATIONS
ESTATES AND TRUSTSESTATES AND TRUSTS
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Computations
COMPUTATION OF TAXABLE INCOME
COMPUTATION OF GROSS INCOME
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Allowable Deductions
ExpensesExpenses
LossesLosses
DepreciationDepreciation
Other Expenses associated with BusinessOther Expenses associated with Business
Donations to GovernmentDonations to Government
Donations to CharitiesDonations to Charities
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Disallowed Expenses
Personal, living or family expenses;
Any amount paid out for new buildings or for permanent
improvements, or betterments made to increase the value of
any property or estate; Any amount expended in restoring property or in making
good the exhaustion thereof for which an allowance is or has
been made; or
Premiums paid on any life insurance policy covering the life of
any officer or employee, or of any person financially
interested in any trade or business carried on by the taxpayer,
individual or corporate, when the taxpayer is directly or
indirectly a beneficiary under such policy.
Disallowed Losses from Sale of Capital Assets
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Other Topics
ACCOUNTING PERIODS AND METHODS OF
ACCOUNTING
RETURNS ANDP
AYMENT OF TAX OTHER INCOME TAX REQUIREMENTS
QUARTERLY CORPORATE INCOME TAX
ANNUAL DECLARATION AND QUARTERLYPAYMENTS OF INCOME TAXES
WITHHOLDING ON WAGES
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ESTATE TAXES
Over But Not Over The Tax shall be Plus Of the Excess
Over
P 200,000 Exempt
P 200,000 550,000 0 5% P 200,000
500,000 2,000,000 P 15,000 8% 500,000
2,000,000 5,000,000 135,000 11% 2,000,000
5,000,000 10,000,000 465,000 15% 5,000,000
10,000,000 And Over 1,215,000 20% 10,000,000
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DONORS TAX
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VALUE- ADDED TAX
Tax Imposition
Transactions with 0% rate
Transactions computed at 1/11 of totaltransaction
Exempt Transactions
Requirements
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OTHER PERCENTAGE TAXES
Tax on Persons Exempt from Value-Added Tax (VAT). = 3%
Percentage Tax on Domestic Carriers and Keepers of Garages. - =(3%)
Percentage Tax on International Carriers.= 3%
Tax on Overseas Dispatch, Message or Conversation Originating from the
Philippines. - (10%)
Tax on Life Insurance Premiums. - = 5%
Tax on Agents of Foreign Insurance Companies. - =5%
Tax on Winnings. =10%
Tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded
through the Local Stock Exchange or through Initial Public Offering.
Tiered
Tax on Franchises.
does not exceed Ten million pesos (P10,000.00),= three percent (3%)
on electric, gas and water utilities, a tax of two percent (2%)
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Tax on Banks and Non-bank Financial
Intermediaries.
On interest
Short-term maturity (non in excess of two (2) years) 5%
Medium-term maturity (over two (2) years
but not exceeding four (4) years) 3%
Long-term maturity -(1) Over four (4) years but not exceeding seven (7) years 1%
(2) Over seven (7) years 0%
On dividends 0%
On royalties, rentals of property, 5%
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Tax on Finance Companies
Short-term maturity (non in excess of two (2)
years) 5%
Medium-term maturity (over two (2) years
but not exceeding four (4) years) 3% Long-term maturity -
(1) Over four (4) years but not
exceeding seven (7) years 1%
(2) Over seven (7) years 0%
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Amusement Taxes
(a) Eighteen percent (18%) in the case of cockpits;
(b) Eighteen percent (18%) in the case of cabarets, night or day
clubs;
(c) Ten percent (10%) in the case of boxing exhibitions(d) Fifteen percent (15%) in the case of professional basketball
games as envisioned in
(e) Thirty percent (30%) in the case of Jai-Alai and racetracks of
their gross receipts, irrespective, of whether or not anyamount is charged for admission.
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EXCISE TAXES ON CERTAIN GOODS
Excise taxes apply to goods manufactured or
produced in the Philippines for domestic sales
or consumption or for any other disposition
and to things imported. The excise tax
imposed herein shall be in addition to the
value-added tax imposed
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Products subject to special excise
Tax Cigars and cigarettes,
Distilled spirits and wines
Petroleum Products
Mineral Products
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DOCUMENTARY STAMP TAX
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.
BIR form 2000BIR form 2000 -- Documentary Stamp Tax
Declaration Return
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Documentary stamp taxDocumentary stamp tax
Tax CodeSection Document TaxableUnit Tax DuePer Unit % of Unit Taxable Base
174
Debentures andCertificates ofIndebtedness
P200.00 orfractionthereof P1.50 0.75%
Face value ofDocument
175Original Issue ofShares of Stock withpar value
P200.00 orfractionthereof 2 1%
Par value ofshares of stocksactual
considerationfor the issuanceof shares ofstocks
176
Sales, Agreementsto Sell, Memorandaof Sales, Deliveriesor Transfer of Due-
bills, Certificate ofObligation, orShares orCertificates of Stock
P200.00 orfractionthereof 1.5 0.75%
Par value of
such due-bills,certificate ofobligation orstocks
179
Bank Checks, Drafts,Certificate ofDeposit not bearinginterest and otherInstruments
On eachDocument 1.5
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Documentary stamp taxDocumentary stamp tax
Tax CodeSection Document Taxable Unit
Tax DuePer Unit % of Unit Taxable Base
180
Bonds, LoanAgreements, PromissoryNotes, Bills ofExchange, Drafts,Instruments andSecurities Issued by the
Government or any ofits Instrumentalities,Deposit SubstitutesDebt Instrument,Certificates of Depositbearing interest andothers not payable on
sight or demand (except
loan agreement orpromissory notesexceeding P250,000.00for personal use orfamily use)
P200.00 orfractionthereof 0.3 0.15%
Face value of theinstrument/document
186 Pre-Need Plans
P500.00 orfractionthereof 0.5 0.10%
Value or amountof the Plan
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REMEDIES
Compromise Arrangement
Outright Payment
Distraint of Personal Property.
Levy on Real Property.
Payment within one year
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COMPLIANCE REQUIREMENTS
Maintenance and registration ofBooks of
Accounts
Registration
Prior to operation
Annual Registration
Official Receipts and Invoices
Expense Documents
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STATUTORY OFFENSES AND PENALTIES
Civil Penalties
Interest
Criminal Penalty
Other Tax Related Penalty
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ALLOTMENT OF INTERNAL REVENUE
Sharing of Taxes
Municipal
Local
National
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OVERSIGHT COMMITTEE
A Congressional Oversight Committee,
hereinafter referred to as the Committee, is
hereby constituted in accordance with the
provisions of this Code. The Committee shall
be composed of the Chairmen of theCommittee on Ways and Means of the Senate
and House Representatives and four (4)
additional members from each house, to be
designated by the Speaker of the House of
Representatives and the Senate President
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Functions of the Committee
(1) Monitor and ensure the proper implementation of
Republic Act No. 8240;
(2) Determine that the power of the Commissioner to
compromise and abate is reasonably exercised;
(3) Review the collection performance of the Bureau of
Internal Revenue; and
(4) Review the implementation of the programs of theBureau of Internal Revenue.
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Tax Procedure in thePhilippines
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Procedure/ Transactions with BIR
RegistrationRegistration InitialInitial
AnnualAnnual
Submission of ReportSubmission of Report
MonthlyMonthly
QuarterlyQuarterly
AnnualAnnual
AssessmentAssessment
StandardStandard
For ComputationFor Computation
Payment of TaxPayment of Tax
Filing of Tax FormsFiling of Tax Forms
For Business registration (RDO)For Business registration (RDO)
For tax requirementFor tax requirement
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Topics for Research
Sources of Income of an individual
CashIn- kind
Trading
Investment/ Savings
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Required
Identify the relevant income,
expenses, and allowances
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