TITLE VOTHER
PERCENTAGE
TAXES
SEC.
116. Tax on Persons Exempt From Value-Added Tax (VAT).
- Any person whose sales or receipts are exempt under Section 109(z) of
this Code from the payment of value-added tax and who is not a
VAT-registered
person shall pay a tax equivalent to three percent (3%) of his gross
quarterly
sales or receipts: Provided, That cooperatives shall be exempt from the
three percent (3%)gross receipts tax herein imposed.
SEC.
117. Percentage Tax on Domestic Carriers and Keepers of Garages.
- Cars for rent or hire driven by the lessee, transportation
contractors,
including persons who transport passengers for hire, and other domestic
carriers by land, air or water, for the transport of passengers, except
owners of bancas and owner of animal-drawn two wheeled vehicle, and
keepers
of garages shall pay a tax equivalent to three percent (3%) of their
quarterly
gross receipts.cralaw:red
The gross receipts of
common carriers derived from their incoming and outgoing freight shall
not be subjected to the local taxes imposed under Republic Act No.
7160,
otherwise known as the Local Government Code of 1991.cralaw:red
In computing the percentage
tax provided in this Section, the following shall be considered the
minimum
quarterly gross receipts in each particular case:
Jeepney for
hire
-
1. Manila
and
other
cities
P 2,400
2.
Provincial
1,200
Public utility bus -
Not exceeding 30
passengers
3,600
Exceeding 30 but not
exceeding 50
passengers 6,000
Exceeding 50
passengers
7,200
Taxis -
1. Manila
and
other
cities
P 3,600
2.
Provincial
2,400
Car for hire (with
chauffer)
3,000
Car for hire (without
chauffer)
1,800
SEC.
118. Percentage Tax on International Carriers.
-
(A) International air
carriers doing business in the Philippines shall pay a tax of three
percent
(3%) of their quarterly gross receipts.cralaw:red
(B) International shipping
carriers doing business in the Philippines shall pay a tax equivalent
to
three percent (3%) of their quarterly gross receipts.cralaw:red
SEC.
119. Tax on Franchises.
- Any provision of general or special law to the contrary
notwithstanding,
there shall be levied, assessed and collected in respect to all
franchises
on radio and/or television broadcasting companies whose annual gross
receipts
of the preceding year does not exceed Ten million pesos (P10,000.00),
subject
to Section 236 of this Code, a tax of three percent (3%) and on
electric,
gas and water utilities, a tax of two percent (2%) on the gross
receipts
derived from the business covered by the law granting the franchise:
Provided,
however, That radio and television broadcasting companies referred to
in
this Section shall have an option to be registered as a value-added
taxpayer
and pay the tax due thereon: Provided, further, That once the option is
exercised, it shall not be revoked.cralaw:red
The grantee shall file
the return with, and pay the tax due thereon to the Commissioner or his
duly authorized representative, in accordance with the provisions of
Section
128 of this Code, and the return shall be subject to audit by the
Bureau
of Internal Revenue, any provision of any existing law to the contrary
notwithstanding.cralaw:red
SEC.
120. Tax on Overseas Dispatch, Message or Conversation Originating
from
the Philippines.
-
(A) Persons Liable.
- There shall be collected upon every overseas dispatch, message or
conversation
transmitted from the Philippines by telephone, telegraph, telewriter
exchange,
wireless and other communication equipment service, a tax of ten
percent
(10%) on the amount paid for such services. The tax imposed in this
Section
shall be payable by the person paying for the services rendered and
shall
be paid to the person rendering the services who is required to collect
and pay the tax within twenty (20) days after the end of each quarter.cralaw:red
(B) Exemptions.
- The tax imposed by this Section shall not apply to:
(1) Government.
- Amounts paid for messages transmitted by the Government of the
Republic
of the Philippines or any of its political subdivisions or
instrumentalities;
(2) Diplomatic
Services. - Amounts paid for messages transmitted by any embassy
and
consular offices of a foreign government;
(3) International
Organizations. - Amounts paid for messages transmitted by a public
international organization or any of its agencies based in the
Philippines
enjoying privileges, exemptions and immunities which the Government of
the Philippines is committed to recognize pursuant to an international
agreement; and
(4) News
Services.
- Amounts paid for messages from any newspaper, press association,
radio
or television newspaper, broadcasting agency, or newstickers services,
to any other newspaper, press association, radio or television
newspaper
broadcasting agency, or newsticker service or to a bona fide
correspondent,
which messages deal exclusively with the collection of news items for,
or the dissemination of news item through, public press, radio or
television
broadcasting or a newsticker service furnishing a general news service
similar to that of the public press.
SEC.
121. Tax on Banks and Non-Bank Financial Intermediaries.
- There shall be a collected tax on gross receipts derived from sources
within the Philippines by all banks and non-bank financial
intermediaries
in accordance with the following schedule:
(a) 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:
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%
(b) On
dividends
0%
(c) On royalties,
rentals of property, real or personal, profits,
from exchange and all
other items treated as gross income
under Section 32 of
this
Code
5%Provided, however,
That in case the maturity period referred to in paragraph (a) is
shortened
thru pretermination, then the maturity period shall be reckoned to end
as of the date of pretermination for purposes of classifying the
transaction
as short, medium or long-term and the correct rate of tax shall be
applied
accordingly.
Nothing in this Code
shall preclude the Commissioner from imposing the same tax herein
provided
on persons performing similar banking activities.cralaw:red
SEC.
122. Tax on Finance Companies.-
There shall be collected a tax of five percent (5%) on the gross
receipts
derived by all finance companies, as well as by other financial
intermediaries
not performing quasi-banking functions dong business in the
Philippines,
from interest, discounts and all other items treated as gross income
under
this Code: Provided, That interests, commissions and discounts
from
lending activities, as well as income from financial leasing, shall be
taxed on the basis of the remaining maturities of the instruments from
which such receipts are derived, in accordance with the following
schedule:
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)
1%
(2) Over seven
(7)
years
0%Provided, however,
That in case the maturity period is shortened thru pretermination, then
the maturity period shall be reckoned to end as of the date of
pretermination
for purposes of classifying the transaction as short, medium or
long-term
and the correct rate of tax shall be applied accordingly.
Nothing in this Code
shall preclude the Commissioner from imposing the same tax herein
provided
on persons performing similar financing activities.cralaw:red
SEC.
123. Tax on Life Insurance Premiums.
- There shall be collected from every person, company or corporation
(except
purely cooperative companies or associations) doing life insurance
business
of any sort in the Philippines a tax of five percent (5%) of the total
premium collected, whether such premiums are paid in money, notes,
credits
or any substitute for money; but premiums refunded within six (6)
months
after payment on account of rejection of risk or returned for other
reason
to a person insured shall not be included in the taxable receipts; nor
shall any tax be paid upon reinsurance by a company that has already
paid
the tax; nor upon doing business outside the Philippines on account of
any life insurance of the insured who is a nonresident, if any tax on
such
premium is imposed by the foreign country where the branch is
established
nor upon premiums collected or received on account of any reinsurance ,
if the insured, in case of personal insurance, resides outside the
Philippines,
if any tax on such premiums is imposed by the foreign country where the
original insurance has been issued or perfected; nor upon that portion
of the premiums collected or received by the insurance companies on
variable
contracts (as defined in section 232(2) of Presidential Decree No.
612),
in excess of the amounts necessary to insure the lives of the variable
contract workers.cralaw:red
Cooperative companies
or associations are such as are conducted by the members thereof with
the
money collected from among themselves and solely for their own
protection
and not for profit.cralaw:red
SEC.
124. Tax on Agents of Foreign Insurance Companies.
- Every fire, marine or miscellaneous insurance agent authorized under
the Insurance Code to procure policies of insurance as he may have
previously
been legally authorized to transact on risks located in the Philippines
for companies not authorized to transact business in the Philippines
shall
pay a tax equal to twice the tax imposed in Section 123: Provided,
That the provision of this Section shall not apply to reinsurance: Provided,
however, That the provisions of this Section shall not affect the
right
of an owner of property to apply for and obtain for himself policies in
foreign companies in cases where said owner does not make use of the
services
of any agent, company or corporation residing or doing business in the
Philippines. In all cases where owners of property obtain insurance
directly
with foreign companies, it shall be the duty of said owners to report
to
the Insurance Commissioner and to the Commissioner each case where
insurance
has been so effected, and shall pay the tax of five percent (5%) on
premiums
paid, in the manner required by Section 123.cralaw:red
SEC.
125. Amusement Taxes.
- There shall be collected from the proprietor, lessee or operator of
cockpits,
cabarets, night or day clubs, boxing exhibitions, professional
basketball
games, Jai-Alai and racetracks, a tax equivalent to:
(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: Provided, however, That
boxing
exhibitions wherein World or Oriental Championships in any division is
at stake shall be exempt from amusement tax: Provided, further, That at
least one of the contenders for World or Oriental Championship is a
citizen
of the Philippines and said exhibitions are promoted by a citizen/s of
the Philippines or by a corporation or association at least sixty
percent
(60%) of the capital of which is owned by such citizens;
(d) Fifteen percent
(15%) in the case of professional basketball games as envisioned in
Presidential
Decree No. 871: Provided, however, That the tax herein shall be
in lieu of all other percentage taxes of whatever nature and
description;
and
(e) Thirty percent
(30%) in the case of Jai-Alai and racetracks of their gross receipts,
irrespective,
of whether or not any amount is charged for admission.
For the purpose of the
amusement tax, the term "gross receipts" embraces all the
receipts
of the proprietor, lessee or operator of the amusement place. Said
gross
receipts also include income from television, radio and motion picture
rights, if any. A person or entity or association conducting any
activity
subject to the tax herein imposed shall be similarly liable for said
tax
with respect to such portion of the receipts derived by him or it.
The taxes imposed herein
shall be payable at the end of each quarter and it shall be the duty of
the proprietor, lessee or operator concerned, as well as any party
liable,
within twenty (20) days after the end of each quarter, to make a true
and
complete return of the amount of the gross receipts derived during the
preceding quarter and pay the tax due thereon.cralaw:red
SEC.
126. Tax on Winnings.
- Every person who wins in horse races shall pay a tax equivalent to
ten
percent (10%) of his winnings or 'dividends', the tax to be based on
the
actual amount paid to him for every winning ticket after deducting the
cost of the ticket: Provided, That in the case of winnings from
double, forecast/quinella and trifecta bets, the tax shall be four
percent
(4%). In the case of owners of winning race horses, the tax shall be
ten
percent (10%) of the prizes.cralaw:red
The tax herein prescribed
shall be deducted from the 'dividends' corresponding to each winning
ticket
or the "prize" of each winning race horse owner and withheld by
the operator, manager or person in charge of the horse races before
paying
the dividends or prizes to the persons entitled thereto.cralaw:red
The operator, manager
or person in charge of horse races shall, within twenty (20) days from
the date the tax was deducted and withheld in accordance with the
second
paragraph hereof, file a true and correct return with the Commissioner
in the manner or form to be prescribed by the Secretary of Finance, and
pay within the same period the total amount of tax so deducted and
withheld.cralaw:red
SEC.
127. Tax on Sale, Barter or Exchange of Shares of Stock Listed and
Traded
Through the Local Stock Exchange or Through Initial Public Offering.
-
(A) Tax on Sale,
Barter or Exchange of Shares of Stock Listed and Traded Through the
Local
Stock Exchange.-
There shall be levied, assessed and collected on every sale, barter,
exchange,
or other disposition of shares of stock listed and traded through the
local
stock exchange other than the sale by a dealer in securities, a tax at
the rate of one-half of one percent (1/2 of 1%) of the gross selling
price
or gross value in money of the shares of stock sold, bartered,
exchanged
or otherwise disposed which shall be paid by the seller or transferor.cralaw:red
(B) Tax on Shares
of Stock Sold or Exchanged Through Initial Public Offering.
- There shall be levied, assessed and collected on every sale, barter,
exchange or other disposition through initial public offering of shares
of stock in closely held corporations, as defined herein, a tax at the
rates provided hereunder based on the gross selling price or gross
value
in money of the shares of stock sold, bartered, exchanged or otherwise
disposed in accordance with the proportion of shares of stock sold,
bartered,
exchanged or otherwise disposed to the total outstanding shares of
stock
after the listing in the local stock exchange:
Up to twenty-five
percent
(25%)
4%
Over twenty-five
percent
(25%) but not over thirty-three
and one third percent (33
1/3%)
2%
Over thirty-three
and one third percent (33
1/3%)
1%The tax herein imposed
shall be paid by the issuing corporation in primary offering or by the
seller in secondary offering.
For purposes of this
Section, the term "closely held corporation" means any
corporation
at least fifty percent (50%) in value of outstanding capital stock or
at
least fifty percent (505) of the total combined voting power of all
classes
of stock entitled to vote is owned directly or indirectly by or for not
more than twenty (20) individuals.cralaw:red
For purposes of determining
whether the corporation is a closely held corporation, insofar as such
determination is based on stock ownership, the following rules shall be
applied:
(1) Stock Not
Owned
by Individuals. - Stock owned directly or indirectly by or for a
corporation,
partnership, estate or trust shall be considered as being owned
proportionately
by its shareholders, partners or beneficiaries.
(2) Family and
Partnership Ownerships. - An individual shall be considered as
owning
the stock owned, directly or indirectly, by or for his family, or by or
for his partner. For purposes of the paragraph, the 'family of an
individual'
includes only his brothers and sisters (whether by whole or
half-blood),
spouse, ancestors and lineal descendants.
(3) Option.
- If any person has an option acquire stock, such stock shall be
considered
as owned by such person. For purposes of this paragraph, an option to
acquire
such an option and each one of a series of options shall be considered
as an option to acquire such stock.
(4) Constructive
Ownership as Actual Ownership. - Stock constructively owned by
reason
of the application of paragraph (1) or (3) hereof shall, for purposes
of
applying paragraph (1) or (2), be treated as actually owned by such
person;
but stock constructively owned by the individual by reason of the
application
of paragraph (2) hereof shall not be treated as owned by him for
purposes
of again applying such paragraph in order to make another the
constructive
owner of such stock.(C) Return on
Capital
Gains Realized from Sale of Shares of Stocks. -
(1) Return on
Capital
Gains Realized from Sale of Shares of Stock Listed and Traded in the
Local
Stock Exchange.- It shall be the duty of every stock
broker
who effected the sale subject to the tax imposed herein to collect the
tax and remit the same to the Bureau of Internal Revenue within five
(5)
banking days from the date of collection thereof and to submit on
Mondays
of each week to the secretary of the stock exchange, of which he is a
member,
a true and complete return which shall contain a declaration of all the
transactions effected through him during the preceding week and of
taxes
collected by him and turned over to the Bureau Of Internal Revenue.
(2) Return on
Public
Offerings of Share Stock. - In case of primary offering, the
corporate
issuer shall file the return and pay the corresponding tax within
thirty
(30) days from the date of listing of the shares of stock in the local
stock exchange. In the case of secondary offering, the provision of
Subsection
(C)(1) of this Section shall apply as to the time and manner of the
payment
of the tax.
(D) Common
Provisions.
- Any gain derived from the sale, barter, exchange or other disposition
of shares of stock under this Section shall be exempt from the tax
imposed
in Sections 24(C), 27(D)(2), 28(A)(8)(c), and 28(B)(5)(c) of this Code
and from the regular individual or corporate income tax. Tax paid under
this Section shall not be deductible for income tax purposes.
SEC.
128. Returns and Payment of Percentage Taxes. -
(A) Returns of
Gross Sales, Receipts or Earnings and Payment of Tax. -
(1) Persons
Liable
to Pay Percentage Taxes. - Every person subject to the percentage
taxes
imposed under this Title shall file a quarterly return of the amount of
his gross sales, receipts or earnings and pay the tax due thereon
within
twenty-five (25) days after the end of each taxable quarter: Provided,
That in the case of a person whose VAT registration is cancelled
and
who becomes liable to the tax imposed in Section 116 of this Code, the
tax shall accrue from the date of cancellation and shall be paid in
accordance
with the provisions of this Section.
(2) Person
Retiring
from Business. - Any person retiring from a business subject to
percentage
tax shall notify the nearest internal revenue officer, file his return
and pay the tax due thereon within twenty (20) days after closing his
business.
(3) Exceptions.
- The Commissioner may, by rules and regulations, prescribe:
(a) The time for
filing
the return at intervals other than the time prescribed in the preceding
paragraphs for a particular class or classes of taxpayers after
considering
such factors as volume of sales, financial condition, adequate measures
of security, and such other relevant information required to be
submitted
under the pertinent provisions of this Code; and
(b) The manner and
time
of payment of percentage taxes other than as hereinabove prescribed,
including
a scheme of tax prepayment.
(4) Determination
of
Correct Sales or Receipts. - When it is found that a person has
failed
to issue receipts or invoices, or when no return is filed, or when
there
is reason to believe that the books of accounts or other records do not
correctly reflect the declarations made or to be made in a return
required
to be filed under the provisions of this Code, the Commissioner, after
taking into account the sales, receipts or other taxable base of other
persons engaged in similar businesses under similar situations or
circumstances,
or after considering other relevant information may prescribe a minimum
amount of such gross receipts, sales and taxable base and such amount
so
prescribed shall be prima facie correct for purposes of determining the
internal revenue tax liabilities of such person.(B) Where to
File.
- Except as the Commissioner otherwise permits, every person liable to
the percentage tax under this Title may, at his option, file a separate
return for each branch or place of business, or a consolidated return
for
all branches or places of business with the authorized agent bank,
Revenue
District Officer, Collection Agent or duly authorized Treasurer of the
city or municipality where said business or principal place of business
is located, as the case may be.