Donors And vat

What is Business?

Business OR in the course of trade or business means. . .

the regular conduct or pursuit of a commercial or economic activity, including transactions incidental thereto, by any person or government entity

Business taxes are excise taxes imposed on onerous transfers of goods, property or services done in the normal course of business.

These are sometimes referred to as transaction taxes.

These are also taxes on production/importation of “sin” products.

1. The activity should be a commercial or economic activity, but with exceptions like: (not an economic activity, but there is a business tax)

Requisites of business to be subjected to business tax:

A commercial or economic activity is an activity where the purpose is PROFIT or INCOME.

atty. cleo d. sabado-andrada, cpa, mba

1. The activity should be a commercial or economic activity, but with exceptions like: (not an economic activity,

but there is a business tax)

A. An importation of goods for personal use is subject to the value-added-tax. VAT is a business tax.

B. An overseas communication, even if not related to business, is subject to the percentage tax called Overseas Communications Tax. Percentage tax is

a business tax.



2. There should be regularity in the activity, but with exceptions like: (not a regular activity, but there is business tax)


A regular activity is an activity involving more than one isolated transaction. It requires repetition and continuity of action.


2. There should be regularity in the activity, but with exceptions like: (not a regular activity,

but there is business tax)

A. Services rendered in the Philippines by non- resident foreign persons shall be considered as being rendered in the course of trade or business;B. Isolated transactions may be subjected to VAT or

percentage tax.


Value-Added Tax

Percentage Tax or General Consumption Tax

Excise Tax

THREE (3) MAJOR BUSINESS TAXES IN THE NATIONAL INTERNAL REVENUE CODE


Excise tax is on the production or importation of “sin” products,

while Value Added Tax (VAT) and/or

Other Percentage Taxes (OPT) are on the transfer of goods or services in the conduct of

business.

A value-added tax is an indirect tax imposed on the gross selling price or gross receipt derived from sale, barter or exchange of goods, properties and services, or the lease of goods and properties in the course of trade or business, and on importations (Sec. 105 to 108).

BAR QUESTION/S

1998 BAR Exam

State whether the following transactions are:

a.VAT Exemptb.VAT at 10% (now 12%) c.Subject to VAT at 0%?


BAR QUESTION/S

1998 BAR Exam

State whether the following transactions are: a) VAT Exempt ; b) VAT at 10%; (now 12%) c) Subject to VAT at 0%?

1.Sale of fresh vegetables by Aling Ining at the Pamilihang Bayan ng Trece Martirez.2.Services rendered by Jake’s Construction Company, a contractor to the World Health Organization in the renovation of its offices in Manila.3.Sale of tractors and other agricultural implements by Bungkal Incorporated to local farmers.4.Sale of RTW by Cely’s Boutique, a Filipino Dress designer, in her dress shop and other outlets.5.Fees for lodging paid by students to Bahay-Bahayan Dormitory, a private entity operating a student dormitory (monhtly fee P1,500)

BUSINESSES THAT ARE EXEMPTED FROM VAT OR PERCENTAGE TAXES

(regardless of annual gross sales or receipts)

As provided for by Section 109 of the NIRC

A. Sale or importation of AGRICULTURAL and MARINE FOOD products in their ORIGINAL STATE, livestock and poultry of a kind generally used as, or yielding or producing foods for human consumption; and breeding stock and genetic materials therefore;Products classified under this paragraph shall be considered in their original state even if they have undergone the simple processes or preparation or preservation for the market, such as freezing, drying, salting, broiling, roasting, smoking or stripping. Polished and/or husked rice, corn grits, raw cane sugar and molasses, and ordinary salt and copra shall be considered in their original state.





B. Sale or importation of fertilizers, seeds, seedlings and fingerlings, fish, prawn, livestock and poultry feeds, including ingredients, whether locally produced or imported, used in the manufacture of finished feeds, except: specialty feeds for race horses, fighting cocks, aquarium fish, zoo animals and other animals generally considered as pets.





C. Importation of personal and household effects belonging to the residents of the Philippines returning from abroad and non resident citizens coming to resettle in the Philippines; provided that such goods are exempt from customs duties under the Tariff and Customs Code of the Philippines;




As provided for by Section 109 of the NIRCD. Importation of professional instruments and implements, wearing apparel, domestic animals, and personal household effects (except any vehicle, vessel, aircraft, machinery, other goods for use in the manufacture and merchandise of any kind of commercial quantity) belonging to persons coming to settle in the Philippines, for their own use and not for sale, barter, exchange, accompanying such persons, or arriving within ninety (90) days before or after their arrival, upon production of evidence of satisfactory to the Commissioner, that such persons are actually coming to settle in the Philippines, and that the change of residence is bona fide.





E. Services subject to percentage tax.

F. Services by agricultural contract growers and milling for others of palay into rice, corn into grits and sugar cane into sugar.


H. Educational services rendered by private educational institutions, duly accredited by the DepEd, CHED, TESDA and those rendered by government educational institutions;




G. Medical, dental, hospital and veterinary services, except those rendered by professionals;




As provided for by Section 109 of the NIRCI. Services rendered by individuals pursuant to an employer-employee relationship;

J. Services rendered by regional or area headquarters established in the Philippines by multinational corporations which act as supervisory, communications and coordinating centers for their affiliates, subsidiaries or branches in the Asia-Pacific Region and do not earn or derive income from the Philippines;




K. Transactions which are exempt under international agreements to which the Philippines is a signatory or under special laws, except those under Presidential Decree No. 529;





L. Sales by agricultural cooperatives duly registered with the Cooperative Development Authority to their members as well as sale of their products, whether in its original state or processed form, to non members; their importation of direct farm inputs, machineries and equipment, including spare parts thereof, to be used directly and exclusively in the production and/or processing of their produce;





M. Gross receipts from lending activities by credit or multi-purpose cooperatives duly registered with the Cooperative Development Authority whose lending operation is limited to their members;





N. Sales of non-agricultural non electric and non-credit cooperatives duly registered with the Cooperative Development Authority: Provided, that the share capital contribution of each member does not exceed P15,000 and regardless of the aggregate capital and net surplus ratably distributed among the members;Export sales by persons who are not VAT registered;



As provided for by Section 109 of the NIRCO. Export sales by persons who are not VAT registered;

P. Sale of real property not primarily held for sale to customers or held for lease in the ordinary course of trade or business or real property utilized for low-cost and socialized housing as defined by R.A. 7279, otherwise known as the Urban Development and Housing Act of 1992, and other related laws, residential lot valued at P 1,919,500.00 and below, house and lot and other residential dwellings valued at P3,199,200.00

REVENUE REGULATION NO. 3-2012 dated February 20, 2012.

EFFECTIVITY OF TRESHOLD AMOUNTS FOR SALE OF

RESIDENTIAL LOT, SALE OF HOUSE AND LOT, LEASE OF RESIDENTIAL

UNIT AND SALE OR LEASE OF GOODS OR PROPERTIES OR

PERFORMANCE OF SERVICES COVERED BY SECTION 109 (p), (q) and (v) of the Tax code of 1997, as

amended.EFFECTIVITY: JANUARY 1, 2012



A s provided for by Section 109 of the NIRC

Q. Lease of residential unit with a monthly rental not exceeding P12,800

R. Sale, importation, printing or publication of books and any newspaper, magazine, review or bulletin which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of paid advertisements;




As provided for by Section 109 of the NIRCS. Sale, importation or lease of passenger or cargo vessels and aircraft, including engine, equipment and spare parts thereof for domestic or international transport operations;

T. Importation of fuel, goods and supplies by persons engaged in international shipping or air transport operations;




U. Services of banks, non bank financial intermediaries performing quasi-judicial functions, and other non-bank financial intermediaries;



As provided for by Section 109 of the NIRCV. Sale or lease of goods or properties or the performance of services other than the transactions in the preceding paragraphs, the gross annual sales and/or receipts do not exceed the amount of P1,919,500.00-(EXEMPT from VAT but subject to 3% percentage tax.)Not later than January 31, 2009 and every three (3) years after, the amount of P1,500,000.00 shall be adjusted o its present value using the Consumer Price Index as published by the National Statistics Office.


REVENUE REGULATION NO. 3-2012 dated February 20, 2012.

EFFECTIVITY OF TRESHOLD AMOUNTS FOR SALE OF

RESIDENTIAL LOT, SALE OF HOUSE AND LOT, LEASE OF RESIDENTIAL

UNIT AND SALE OR LEASE OF GOODS OR PROPERTIES OR

PERFORMANCE OF SERVICES COVERED BY SECTION 109 (p), (q) and (v) of the Tax code of 1997, as

amended.EFFECTIVITY: JANUARY 1, 2012

Amount in Pesos (2005) ADJUSTED TRESHOLD

Sale of Residential Lot 1,500,000 1,919,500

Sale of Residential House and Lot 2,500,000 3,199,200

Lease of Residential Unit 10,000 12,800

Sale or Lease of Goods or Properties or Performance of Services (VAT Threshold)1,500,000 1,919,500

Using the Consumer Price Index as published by the NSO, the threshold amounts has been adjusted as follows :

BAR QUESTION/S

1998 BAR Exam


a.VAT Exemptb.VAT at 10% (now 12%)c.Subject to VAT at 0%?


BAR QUESTION/S

1998 BAR Exam

State whether the following transactions are: a) VAT Exempt ; b) VAT at 10% (now 12%) ; c) Subject to VAT at 0%?


RULES IN BUSINESS TAXES

Businesses NOT expressly mentioned in letter A to U of Section 109 of NIRC which have gross sales not exceeding One Million Five Hundred Thousand Pesos (P1,919,500.00) shall be:

- exempt from the value added tax, BUT. . . . . .- subject to the 3% percentage tax, EXCEPT if:

i. a different percentage tax applies ii. taxpayer opted to be a value-added

tax payer.



Manufacturers or importers who are subject to the excise taxes also pays either:

Value Added tax; or

The 3% percentage tax ( if the sales did not exceed P1,919,500.00)



Excise Taxes are imposed on:

1. Manufacturers or2. Importers of any of the following categories of goods or articles:

-Distilled spirits - Automobiles-Wines - Manufactured fuel oils-Fermented liquors - Mineral Products-Tobacco products - Non-essential goods-Cigars - Cigarettes


Value-Added Tax

Percentage Tax or General Consumption Tax

Excise Tax

THREE (3) MAJOR BUSINESS TAXES IN THE NATIONAL INTERNAL REVENUE CODE


A value-added tax is an indirect tax imposed on the gross selling price or gross receipt derived from sale, barter or exchange of goods, properties and services, or the lease of goods and properties in the course of trade or business, and on importations (Sec. 105 to 108).

BAR QUESTION/S

1996 BAR Exam

What are the characteristics of the Value –Added Tax?

NATURE AND CHARACTERISTICS OF THE VALUE ADDED TAX

1.Value added tax is a tax on consumption

2. Levied on the sale, barter exchange or lease of goods or properties and services in the Philippines and the importation of goods into the Philippines.

3. Seller is the one statutorily liable for the payment of tax, but the amount of tax may be shifted or passed on to the buyer, transferee or lessee of the goods or properties or services.


Implementing the Tax Privileges Provisions of Republic Act No. 9994, Otherwise Know as the “Expanded Senior Citizens Act of 2010”, and Prescribing the Guidelines for the Availment Thereof


Income tax exemption of Senior Citizens:

1)The valued-added tax exemption privileges granted to VAT-registered taxpayers selling goods and services identified in the Act to Senior Citizens;2)The tax privileges granted to establishments giving discount on their sale of goods and services to Senior Citizens;3)The tax implication of taking care and supporting senior citizens by their benefactors; and4)The tax privileges granted to private entities who engage Senior Citizens as their employees.


Will not extend to20% final withholding tax on interest income7.5% final withholding tax on interest income

Final withholding tax-Long Term Investments•Four years to less than five years – 5%•Three years to less than four years – 12%; and•Less than three years – 20%

Capital gains tax6% final withholding tax


Availment of Income Tax Exemption of Senior Citizens. – A Senior who is a minimum wage earner, or whose taxable income during the year does not exceed his personal exemptions, will be exempt from income tax upon compliance.


A Benefactor of a Senior Citizen shall be entitled to claim the basic personal exemption of fifty thousand pesos (P50,000.00)Will not entitle (P25,000.00)

Additional Deduction from Gross Income of Private Establishments for Compensation Paid to Senior Citizens – Private establishments employing Senior Citizens shall be entitled to additional deduction from their gross income equivalent to fifteen percent (15%) of the total amount paid as salaries and wages to Senior Citizens subject to the provisions.


Circularizing Sections 4 and 5 of Republic Act No. 9994, An Act Granting Additional Benefits and Privileges to Senior Citizens, Further Amending Republic Act No. 7432, as amended, otherwise known as “An Act to Maximize the Contribution of Senior Citizens to Nation Building, Grant Benefits and Special Privileges and For Other Purposes”


SEC. 4. Privileges for the Senior Citizens

The senior citizens shall be entitled to the following:

(a) The grant of twenty percent (20%) discount and exemption from the value-added tax (VAT), if applicable, on the sale of the following goods and services from all establishments, for the exclusive used and enjoyment or availment of the senior citizens


(1) on the purchase of medicines, including the purchase of influenza and pnuemococcal vaccines, and such other essential medical supplies, accessories and equipment to be determined by the Department of Health (DOH)


(2) on the professional fees of attending physician/s in all private hospitals, medical facilities, outpatient clinics and home health care services;

(3) on the professional fees of licensed professional health providing home health care services as endorsed by private hospitals or employed through home health care employment agencies;


(2)on medical and dental services, diagnostic and laboratory fees in all private hospitals, medical facilities, outpatient clinics, and home health care services;

(5) in actual fare for land transportation travel in public utility buses (PUBs), public utility jeepneys (PUJs), taxis, Asian utility vehicles (AUVs), shuttle services and public railways, including Light Rail Transit (LRT), Mass Rail Transit (MRT), and Philippine National Railways (PNR);

(6) in actual transportation fare for domestic air transport services and sea shipping vessels and the like, based on the actual fare and advanced booking;

(5)On the utilization of services in hotels and similar lodging establishments, restaurants and recreation centers;

(6)On admission fees charged by theaters, cinema houses and concert halls, concert halls, leisure and amusement; and


(9) on funeral and burial services for the death of senior citizens;

(b) exemption from the payment of individual income taxes of senior citizens who are considered to be minimum wage earners in accordance with Republic Act No. 9504;

(c) the grant of a minimum of five percent (5%) discount relative to the monthly utilization of water and electricity supplied by the public utilities: Provided, That the individual meters for the foregoing utilities are registered in the name of the senior citizen residing therein: Provided, further, That the monthly consumption does not exceed one hundred kilowatt hours (100 kWh) of electricity and thirty cubic meters (30m3) of water: That the privilege is granted per household regardless of the number of senior citizens residing therein.

BAR QUESTION/S

1996 BAR Exam

Who are liable for the payment of Value-Added Tax?


Who are subject to the value-added tax?

Any person who:

A. sells, barters or exchanges goods or properties in the course of trade or business; or

B. sells services in the course of trade or business; or

C. imports goods, whether or not in the course of trade or business


Registration of Business

Every taxpayer subject to the Value Added Tax must register with the Bureau of Internal Revenue as a VAT taxpayer.

Pay the Annual registration fee of P 500.00 for every separate and distinct establishment, including facility types (sales outlet, places of production, warehouses and storage places) where the business is conducted.

For VAT exempt persons, they must also register as a non-VAT taxpayers.


Registration for Value Added Tax

MANDATORY REGISTRATION

OPTIONAL REGISTRATION

Section 236 (G)

Section 236 (H)



MANDATORY REGISTRATION

When the business gross sales or receipts for the past 12 months, other than those exempt under Section 109 of NIRC letter A to U, HAVE EXCEEDED P 1,500,000.00.

When there are reasonable grounds to believe that his gross sales or receipts for the next 12 months will exceed P 1,500,000.00.



OPTIONAL REGISTRATION

Any person who is not required to register as a VAT taxpayer because his sales in a 12 month period do not, shall not exceed P1,919,500,00, may register for the Value Added Tax.


Invoices and Receipts

A taxpayer who is in business should have his invoices and receipts registered with the BIR.

If the taxpayer is a VAT taxpayer, the invoices and receipts shall clearly show that he is a VAT taxpayer.


Any person intending to engage in business shall determine whether he has to register his business as VAT or non-VAT.

His registration for VAT business becomes compulsory when his expected annual gross sales or receipts exceed P1,919,500,000. (R.A. 9337 and RR No. 3-2012)

A VAT-registered business is subject to 12% business tax while a non-VAT business is generally subject to 3% business tax on gross receipts/sales.

But….

Persons whose taxable transactions do not exceed P1,919,500, per year may register as non-VAT person or may elect under certain conditions to register as VAT-registered person, which shall be irrevocable for 3 years. (R. A. 9337)

BAR QUESTION/S

1996 BAR Exam

What is the basis of the Value-Added Tax on taxable sales of real property?

BAR QUESTION/S

1998 BAR Exam


a.VAT Exemptb.VAT at 10% (now 12%)c.Subject to VAT at 0%?

BAR QUESTION/S

1998 BAR Exam

State whether the following transactions are: a) VAT Exempt ; b) VAT at 10% (now 12%) ; c) Subject to VAT at 0%?


VALUE-ADDED TAX ON SALE OF GOODS and PROPERTIES

TAX BASE GROSS SELLING PRICE

Section 106(1)[a to e]

Section 106(1)[par. 2]



A. Twelve percent (12%) of the gross selling price;

TAX RATES



TAX RATES

B. Zero percent (0%) of the gross selling price if:

a. Export Sale (Section 106[2]{a})


B. Zero percent (0%) of the gross selling price if:

b. Foreign Currency Denominated Sale (Section 106[2]{b})


TAX RATES

sale to non residents of goods (except automobiles and non essential goods subject to excise taxes) assembled and manufactured in the Philippines, for delivery to residents in the Philippines, and paid in acceptable foreign currency and accounted for in accordance with the rules and regulations of the BSP.

VALUE-ADDED TAX ON SALE OF GOODS and PROPETIES

TAX RATES

B. Zero percent (0%) of the gross selling price if:c. Sales to persons or entities whose exemption

under special laws or international agreements to which the Philippines is a signatory effectively subjects to zero rate. (Section 106[2]{c})

Sale to SBMA and Clark Development , IRRI and ADB.



TAX RATESTAX BASE

GROSS SELLING PRICE

12% OR 0%

VAT Output/Output Tax

Section 110 (A)[3]{b, 3rd paragraph)


Output tax (Output VAT) is the value-added tax due on the sale or lease of taxable goods or properties or services by any registered person or any person required to register under Sec. 236.

The amount is reduced by input tax (if any) to arrive at the net VAT payable.

If there is no creditable input tax, the entire amount of the output tax becomes the VAT payable.

BAR QUESTION/S

1997 BAR Exam

Under the Value-Added Tax (VAT), the tax is imposed on sales, barter, or exchange of goods and services. The VAT is also imposed on certain transactions “deemed sales”. What are these so-called transactions “deemed sales”?


TRANSACTIONS DEEMED SLE

1. Consumption of Inventory

Goods originally intended for sale, but used or consumed for personal use by the taxpayer is considered deemed sales. (Sec. 106 B (1), NIRC)




2. Distribution to Stockholders

Transfer of inventory to shareholders as share in the profits of a VAT-registered person is considered as transactions deemed sale. (Sec. 106 B (2), NIRC)




3. Distribution to Creditors

Transfers of inventory in payment of debts constitute transactions deemed sale. (Sec. 106B, NIRC)




4. Consignment of Goods

Consignment of goods is considered transaction deemed sales if actual sale is not made within 60 days following the date such goods were consigned.



5. Retirement from Business

The merchandise inventory left at the retirement of business is deemed sold for VAT purposes

VALUE-ADDED TAX ON IMPORTATION OF GOODS

all importation of goods in the Philippines are subject to VAT, even if such goods are not intended to be sold or used for business activities,

. . . except those mentioned under Section 109 of NIRC.


value used by the Bureau of Custom in determining the tariff and custom duties, plus custom duties and excise taxes, if any, and other charges, paid by the importer prior to the release of such goods from the custody of the BOC.

TAX BASE and TAX RATESection 107A, NIRC


12%


Section 110 (A)[3]{b, 3rd paragraph)atty. cleo d. sabado-andrada, cpa, mba


Transfer of Goods by Tax-Exempt Persons (In cases of Tax-Free

Importation)

Sale or exchange of tax-free goods to non-exempt person in the Philippines is taxable with Internal Revenue Taxes against the purchaser, transferee or recipient who shall be considered as importer thereof.

(Sec. 107B, NIRC)


VALUE-ADDED TAX ON SALE OF SERVICES and USE/LEASE OF PROPERTIES

Requirements for Value-Added Taxability of Service Transactions

•The service must be performed or is to be performed in the course of business in the Philippines.

•The service is rendered for valuable consideration actually or constructively received.

•The service rendered is not exempt from VAT under the Tax Code, other special laws or international agreement.


TAX BASE GROSS RECEIPTS

Section 108(A)

Section 108(A) [last par.]



A. Twelve percent (12%) of the gross receipts;

TAX RATES



TAX RATES

B. Zero percent (0%) of the gross receipts on the following sale or exchange of services:

(Section 108)[B]{1 to 7} of the NIRC




all kinds of services performed in the Philippines are subject to VAT at rate of 12%, except those which are classified and qualified as Zero-rated or VAT-exempt transactions. (Sec.108, NIRC)



Common Carriers by Air and Sea

Common carriers by air and sea relative to the transport of passengers and cargoes within the Philippines is subject to 12% VAT.

But in Section 108(B)(6), as added by R.A. No. 9337---transport of passengers and cargo by air or sea vessels from the Philippines to a foreign country shall be subject to zero (0%) rate.



VAT on Professional Fees

As a rule, earnings from a practice of profession (including services rendered by doctors of medicine and lawyers) will

be subject to a 12% VAT if: •The professional is a VAT-registered person, or•Not VAT-registered but his total gross receipts

exceed P1,919,500 per year. (R. A. 9337)

TAX RATESTAX BASE

GROSS RECEIPTS

12% OR 0%



Section 110 (A)[3]{b, 3rd paragraph)


TAX CREDITS

CREDITABLE INPUT TAX or VAT INPUTSection 110(A)

Section 110 (A)[3]{b, 2nd paragraph)


Input tax (Input VAT) is the value-added tax due paid by a VAT-registered person in the course of his trade or business on importation of goods or local purchases of goods or services, including lease or use of property from VAT-registered person.

If paid by the VAT registered person in the conduct of his business, it is allowed as tax credit against his output VAT.

If paid by non-VAT person, it is part of his expense (capitalized if pertaining to capital goods).

If the input tax exceeds the output tax, the excess shall be carried over to the succeeding quarter or quarters.

TAX CREDITS

CREDITABLE INPUT TAX or VAT INPUT

WHAT ARE THE INPUT TAXES?

Input Taxes are the value added taxes paid on local purchases and importation of goods FOR:

1. sale2. conversion into or intended to form part of a

finished product for sale, including packaging materials


TAX CREDITS



Input Taxes are the value added taxes paid on local purchases and importation of goods FOR:

3. use as supplies4. use in trade or business, for which depreciation or amortization is allowed for income tax purposes, except automobiles, aircrafts and yachts.


TAX CREDITS


And, input taxes also includes value added taxes paid on the following:

5. purchases of real property;6. purchases of services7. Presumptive Input Input Tax8. Transitional Input Tax



TAX RATESTAX BASE

VALUE PAID on PURCHASES and IMPORTATION of

GOODS

12%

VAT Input/Input Tax


Section 110 (A)[3]{b, 2nd paragraph)


TAX CREDITS


What is a presumptive Input Tax?

Persons or firms engaged in processing sardines, mackerel, and milk, and in manufacturing refined sugar and cooking oil, and packed noodle-based instant meals, shall be allowed a PRESUMPTIVE INPUT TAX, equivalent to four percent (4%) of the goods value in money of their purchases of PRIMARY AGRICULTURAL PRODUCTS which are used as inputs to their production.

TAX CREDITS


What is a transitional input tax?

A taxpayer not subject to the value added tax BECOMES SUBJECT to the value added tax because:

-the gross sales of the preceding year exceeded P1,500,000.00 or

- the taxpayer being exempt from the VAT system, he was qualified, and opted to be, registered under the value added tax system.


TAX CREDITS


What is a transitional input tax?

Then, he shall be allowed an input tax on his inventory on the transition date, of goods, materials and supplies equivalent to two (2%) of the inventory value, OR the value added tax actually paid on it, WHICHEVER IS HIGHER, excluding goods that are VAT exempt.

The inventory on the transition date should be reported to the Bureau of Internal Revenue.


TAX CREDITS


THE VALUE ADDED TAX IN THE SALES INVOICE

As a general rule, the VALUE-ADDED TAX should be shown as a separate item in the sales invoice. If the invoice shows only a total, the value added tax component on the total shown in the invoice is determined by multiplying the total by the fraction of 12/112.


TAX CREDITS


THE VALUE ADDED TAX IN THE SALES INVOICE

Example: If the total invoice is amounting to P 120,000.00, vat included.

So, the VALUE ADDED TAX is computed as:

120,000 x 12/112 P 12,857.14NET AMOUNT (120,000-12,857.14) P107,142.86

TOTAL AMOUNT IN THE INVOICE P120,000.00


TAX CREDITS


Mr. DEE LAH TAH purchases sardines from fishermen and processes them into canned sardines called “ BUBOY SARDINES”. Going to processing in a certain taxable period were the following purchases, value added tax not included:Fish from fishermen P 100,000.00Tin Cans P 20,000.00Tomato paste in cans P 5,000.00Olive oil in plastic bottles P 2,500,00Pepper from farmers P 1,800.00Paper labels from printers P 500.00Sales during the period, value added tax not included, amounted to P400,000.00.


TAX CREDITS


Determine the VAT Output or Output Tax.Determine the VAT Input or Input Tax.

Output Tax (400,000 x 12%) P 48,000.00Input Taxes:Fish from fishermen ( 100,000.00 x 0%) P 0Tin Cans ( 20,000.00 x 12%) P 2,400.00Tomato paste in cans ( 5,000.00 x 12%) P 600.00Olive oil in plastic bottles ( 2,500,00 x 12%) P 300.00Pepper from farmers ( 1,800.00 x 4%) P 72.00Paper labels from printers ( 500.00 x 12%) P 60.00

TOTAL INPUT TAXES P 3,432.00


TAX CREDITS

RULES in VALUE ADDED TAX

An Input VAT is usually creditable against an Output VAT if the related goods or service from which it arises are used in the conduct of business.

At the end of any taxable period, if the Output VAT exceeds the Input VAT, only such excess amount is payable by the taxpayer to the BIR.

Section 110 (B)atty. cleo d. sabado-andrada, cpa, mba

TAX CREDITS


VAT formula:


Less : VAT Input/Input Tax

VAT Payable to the BIR

Section 110 (B)atty. cleo d. sabado-andrada, cpa, mba

TAX CREDITS


Output Tax (400,000 x 12%) P 48,000.00Input Taxes:Fish from fishermen ( 100,000.00 x 0%) P 0Tin Cans ( 20,000.00 x 12%) P 2,400.00Tomato paste in cans ( 5,000.00 x 12%) P 600.00Olive oil in plastic bottles( 2,500,00 x 12%) P 300.00Pepper from farmers ( 1,800.00 x 4%) P 72.00Paper labels from printers( 500.00 x 12%) P 60.00

TOTAL INPUT TAXES P 3,432.00

VAT PAYABLE P 44,568.00


TAX CREDITS


If the Input VAT, inclusive of input tax carried over from the previous quarter(s) exceeds the Output VAT, the excess Input VAT shall be carried over to the succeeding quarter or quarters.

Output VAT from sales P100,000Less: Input VAT from: Purchases P60,000 Carry-over from last quarter 50,000 P110,000

Excess Input VAT (P10,000)

Note: The excess input VAT can be claimed as a VAT credit in the succeeding quarters.

Section 110 (C)

TAX CREDITS


Any Input VAT attributable to the zero-rated sales by a VAT-registered person may, at his option and WITHIN TWO (2) YEARS, after the close of the taxable quarter when the sales were made, be refunded or applied for a tax credit certificate which may be used in the payment of internal revenue taxes, EXCEPT transitional input tax, to the extent that such input tax has not been applied against output tax.

Section 112 (A)atty. cleo d. sabado-andrada, cpa, mba

Under RR No. 5-2000 July 29, 2011, it says that:

“ALL TAX CREDIT CERTIFICATES (TCC’S) ISSUED BY THE BIR SHALL NOT BE ALLOWED TO BE TRANSFERRED OR ASSIGNED TO ANY PERSON.”

1.EXECUTIVE ORDER NO. 68: “MONETIZATION PROGRAM OF OUTSTANDING VALUE-ADDED TAX (VAT) TAX CREDIT CERTIFICATES (TCCs)

In order to give qualified VAT-registered taxpayers the cash equivalent of their outstanding TCCs.

For revalidated and unexpired TCCs issued in the years 2002 and 2003, THE MONETIZATION WILL BE FROM JULY 17, 2012 TO SEPTEMBER 1, 2012.

For revalidated and unexpired TCCs issued in the years 2004 to April 11, 2012, THE MONETIZATION WILL BE FROM JULY 17, 2012 TO OCTOBER 17, 2012.

TAX CREDITS


Section 236 (F)

Cancellation of registration as a VAT taxpayer

The registration of any person as a value added taxpayer may be cancelled if:•He makes a written application and can demonstrate to the Commisioner’s satisfaction that his gross sales for the following 12 months will not exceed P1,500,000.00.•He has ceased to carry on his trade or business and does not expect to recommence any trade or business within the next 12 months.


TAX CREDITS


Section 112 (B)(C)

Cancellation of registration as a VAT taxpayer

WITHIN TWO (2) YEARS FROM THE DATE OF CANCELLATION, apply for issuance of a tax credit certificate for any UNUSED INPUT TAX which may be used in payment of his other internal revenue taxes.

BIR will grant a refund or issue tax credit certificate within 120 days from submission of complete documents in support of the application.


TAX CREDITS


Section 114 (A)(B)

MONTHLY DECLARATION AND QUARTERLY RETURN

Within the twenty five (25) days after the end of the quarter, there shall be a Quarterly VAT return. Payment of VAT shall be on a monthly basis. Filing anf payment shall be made to an authorized agent bank, Revenue Collection Officer or duly authorized city or municpal Treasurer in he Philippines located within the Revenue District where the taxpayer is registered.

TAX CREDITS


Section 114 (C)

WITHHOLDING OF VALUE-ADDED TAXThe Government , or any of its political subdivisions, instrumentalities or agencies, including GOCC’s, shall, before making payment on account of its purchase of goods from sellers who are subject to the value-added tax, deduct and withhold a final value-added tax at the rate of 5% of the gross payment, to be remitted within ten (10) days following the end of the month the withholding was made. But for lease or use of properties or property rights to non-resident owners shall be subject to 12% withholding tax a the time of payment.

TAX CREDITS


Section 115

The Commissioner of Internal Revenue has the power to suspend the business operations of

taxpayer in the following cases:

1.Failure to issue receipts or invoices;2.Failure to file VAT return3.Understatement of taxable receipts or sales by 30% or more of his correct taxable sale or receipts for the taxable quarter.

DIAZ v. Secretary of Finance G.R. No. 193007 promulgated July 19, 2011

TOLL FEES ARE SUBJECT TO VALUE-ADDED TAX (VAT)

The Court held that the law imposes VAT on all kind of services rendered in the Philippines for a fee. When a tollway operator takes a toll fee from a motorist, the fee is in effect for the latter’s use of the tollway facilities over which the operator enjoys private propriety rights that its contract and the law recognize.

Tollway operators also come under specific class described in Sec. 108 of the NIRC of 1997 as “all other franchise grantees” that are subject to VAT.

Under Sections 116 to 127 of the NIRC the percentage taxes are:

a.3% percentage tax on persons exempt from the value added tax because their gross annual sales do not exceed one million five hundred thousand pesos (P1,500,000.00), and who are not required to pay a percentage tax under any of (b) to (l) , below;



b. Tax on domestic carriers;c. ax on international carriers;d. Franchise tax;e. Overseas Communications tax;f. Tax on banks and non-bank financial intermediaries performing quasi-banking functions;



g. Tax on other non-bank financial intermediaries;h. Tax on life insurance companies;i. Tax on agents of foreign insurance companies;j. Amusement Tax;k. Tax on winnings;l. Tax on stock transactions.


TAX BASE OF PERCENTAGE TAXES

Percentage taxes are based on gross receipts. Payable by the sellers of the services, except the overseas communications tax, which is payable by the user of the facilities of the seller.Gross Receipts are cash actually or constructively received. Receivables are not yet taxable although an income is already earned thereon. There are no deductions from gross receipts, except Sales Returns and Allowances and Sales Discounts, to arrive at the taxable gross receipts.


A. 3% percentage tax based on gross quarterly sales on persons exempt from the value added tax because their gross annual sales do not exceed one million five hundred thousand pesos (P1,919,500.00),

Take Note of the BUSINESSES THAT ARE EXEMPTED FROM VAT OR PERCENTAGE TAXES (regardless of annual gross sales or receipts) , as provided for by Section 109 of the National Internal Revenue Code (NIRC)

TAX RATES


TAX RATES

B. Tax on Domestic Carriers

There are common carrier’s that can be subjected to Percentage Tax known as “common carriers tax. and there are also common carriers that can be subjected to Value Added Tax.


TAX RATESCOMMON CARRIER BY LAND:

1. Transporting goods or cargoes 12% Value Added Tax2. Transporting passengers 3% Common Carriers Tax3. Cars for rent or hire driven by the lessee 3% Common Carriers Tax4. Carriers Transportation Contractors, including persons who transport passengers for hire 3% Common Carriers Tax5. Other domestic carriers by land for transport of passengers, except owners of animal-drawn two wheeled vehicles 3% Common Carriers 6. Keepers of garages 3% Common Carriers Tax

The percentage tax/common carriers tax of 3% is based on quarterly gross receipts

TAX RATES

How does one determine the actual gross receipts of a jeepney or taxi on which to apply the 3% percentage tax?

The law provides statutory minimum quarterly gross receipts:


TAX RATES

Quarterly MonthlyJeepney for hire:

Manila and other cities P 2,400 P 800Provincial P 1,200 P 400

Public Utility Bus:Not exceeding 30 passengersP 3,600 P 1,200Exceeding 30 but not 50 pax P 6,000 P 2,000Exceeding 50 passengers P 7,200 P 2,400

Taxis:Manila and other cities P 3,600 P 1,200Provincial P 2,400 P 800

Car for hire:With chauffeur P 3,000 P 1,000Without chauffeur P 1,800 P 600


TAX RATES

COMMON CARRIER BY AIR or SEA

From one point in the Philippines to another point in the Philippines

Transporting goods or cargoes 12% VATTransporting passengers 12% VAT

From one point in the Philippines to apoint outside the Philippines

Transporting goods or cargoes 0% Value Added TaxTransporting passengers 0% Value Added Tax


TAX RATES

C. INTERNATIONAL CARRIERS

International air carriers and international shipping carriers doing business in the Philippines shall pay a tax equivalent to 3% of their quarterly gross receipts from shipping outgoing from the Philippines.


TAX RATES

D. FRANCHISE TAX

Franchise is a law. It authorizes a certain person, natural or juridical persons, to operate a public utility. Certain franchise grantees are subject to percentage tax and also known as franchise tax .

However, there are also other franchise grantees that shall be subject to the value added tax.


TAX RATES

FRANCHISE TAX IS:

On Gross Receipts covered by the law granting the franchise;

1. for radio and/or television broadcasting companieswhose annual gross receipts of the preceding year did not exceed P10,000,000.00 3%

2. on gas and water utilities 2%


TAX RATES

F. Tax ON BANKS AND NON-BANK FINANCIAL INTERMEDIARIES PERFORMING QUASI-BANKING FUNCTIONS. TAX BASE:

Gross receipts from sources WITHIN the Philippines.


TAX RATES

Note: On radio and/ or television broadcasting company whose annual gross receipts of the preceding year exceeded P 10,000,000 shall be subject to the value added tax.

However, those whose gross receipts did not exceed P10,000,000.00 may opt to be registered under the value added tax system. But once the option is exercised, (as a VAT registered) the option is IRREVOCABLE.


TAX RATES

E. OVERSEAS COMMUNICATIONS TAX

AMOUNTS RECEIVED FOR OVERSEAS DISPATCH MESSAGE OR CONVERSATION ORIGINATING FROM THE PHILIPPINES (outgoing message) SHALL BE SUBJECTED TO A PERCENTAGE TAX KNOWN AS THE OVERSEAS COMMUNICATIONS TAX.

Tax Base – on the amount paid by the user to the provider of the communication facility.

Tax Rate- 10% of the amount paid.

TAX RATES




TAX RATES

But, the overseas communications tax shall not apply to :

1.Government

2. Diplomatic Services

3. International Organization

4. News services


TAX RATES




TAX RATES




TAX RATESF. Tax ON BANKS AND NON-BANK FINANCIAL INTERMEDIARIES PERFORMING QUASI-BANKING FUNCTIONS. TAX RATES:

1.On interest, commissions and discounts from lending activities as well as income from financial leasing on the basis of the remaining maturities of instruments from which such receipts were derived:

Maturity period is five years or less 5%Maturity period is more than five years 1%


TAX RATESF. Tax ON BANKS AND NON-BANK FINANCIAL INTERMEDIARIES PERFORMING QUASI-BANKING FUNCTIONS. TAX RATES:

2. On dividends and equity shares in net income subsidiaries 0%3. On royalties, rentals of property, real or personal, profits

from exchange and all other items treated as gross income under the income tax law and on net trading gains on foreign currency, debt instruments, derivatives and other similar financial instruments 7%

TAX RATESG. Tax ON OTHER NON-BANK FINANCIAL INTERMEDIARIES

TAX BASE:Gross receipts from sources WITHIN the Philippines.

TAX RATES:1.On interest, commissions and discounts from lending activities as well as income from financial leasing on the basis of the remaining maturities of instruments from which such receipts were derived:

Maturity period is five years or less 5%Maturity period is more than five years 1%

2. On interest, commissions, discounts and all other items treated as gross income under the income tax law. 5%

TAX RATES

H. Tax ON INSURANCE COMPANIES.

Insurance companies may be divided into two classes:A.Non-life insurance companies; andB.Life insurance companies.

Note: NON-LIFE INSURANCE COMPANIES ARE SUBJECT TO THE VALUE ADDED TAX.

LIFE INSURANCE COMPANIES ARE SUBJECT TO A PERCENTAGE TAX, called PREMIUM

TAX.

TAX RATES

H. Tax ON INSURANCE COMPANIES.

Tax Base: Total life insurance premiums collected (gross receipts), whether in money, notes, credits, or any substitute for money;

Tax Rate: Five percent (5%)


TAX RATES

Exemptions:

1. Premiums refunded within six (6) months after payment on account of rejection of risk or returned for other reasons to a person insured;2. Reinsurance premiums paid by a company that has already paid a tax;3. Premiums collected or received by any branch of a domestic corporation, firm or association doing business in the Philippines on account of any life insurance of an insured who is a non resident , if any tax on such premiums is imposed by the foreign country where the branch is established;

TAX RATES

Exemptions:

4. Reinsurance premiums, if the insured of personal insurance resides outside the Philippines, if ay tax on such premium is imposed by the foreign country where the original has been issued or perfected.5. Portion of the premiums collected or received by insurance companies on variable contracts in excess of the amount necessary to insure the lives of variable contract owners.


TAX RATES

I. Tax ON AGENTS OF FOREIGN INSURANCE COMPANIES.

Every fire, marine or miscellaneous insurance agent authorized under the Insurance Code to procure insurance as he may have previously been authorized to transact on risks located in the Philippines, for those companies not authorize to transact business in the Philippines, SHALL PAY A TAX EQUAL TO TWICE THE TAX IMPOSED ON LIFE INSURANCE COMPANIES-hence, ten percent (10%).

TAX RATES

I. Tax ON AGENTS OF FOREIGN INSURANCE COMPANIES.

BUT, An owner of property can obtain directly for himself policies in foreign companies but he must report to the Insurance Commissioner and to the Commissioner of Internal Revenue such case, and pay a tax of five percent (5%) on premiums paid.


TAX RATES

J. AMUSEMENT TAX

Amusement Tax on admissions to theaters, cinematographs, concert halls, circuses and other places of amusement is a local tax.

The Tax Base of amusement tax is the GROSS RECEIPTS of the proprietor, lessee or operator of the amusement place. It includes income from television, radio and motion picture rights, if any.


TAX RATES

Amusement Places NOT ALL ARE SUBJECT TO THE AMUSEMENT TAXES.

Amusement Activities- NOT ALL ARE SUBJECT TO AMUSEMENT TAXES.

Amusement Places subject to percentage tax called amusement tax:

Place for boxing exhibition 10%Place for professional basketball 15%Cockpits, cabarets, night or day clubs 18%Jai-alai and race tracks 30%


TAX RATES

J. AMUSEMENT TAX

Exemption:

Boxing exhibitions where World or Oriental Championships in any division is at stake shall be exempt from amusement tax, IF ONE OF THE CONTENDERS is a citizen of the Philippines and said exhibitions are promoted by citizens of the Philippines or a by a corporation or association at least sixty percent (60%) of the capital of which is owned by such citizens.

TAX RATESK. TAX ON WINNINGS.

The tax is on winnings of:1. person who wins in horse races and jai-alai. Tax must

be based on his WINNINGS .10%

But if winnings is from double, forecast, quinella and trifecta bets 4%

2. Owner of winning race horses, based on the prize.

10%

Note: The tax shall be withheld from the winnings or prize by the operator, manager, or person in charge of the horse races or jai alai.atty. cleo d. sabado-andrada, cpa, mba

TAX RATES

L. TAX ON STOCK TRANSACTIONS

On sale, barter, exchange or other disposition of shares listed and traded thru a local stock exchange, other than by a dealer in securities:

½ of 1 percent based on the gross selling price or gross value in money of the shares sold.


TAX RATES

L.TAX ON STOCK TRANSACTIONS

On sale, barter, exchange or other disposition of shares thru initial public offering of shares of stock in a closely held corporation, in accordance with the proportion of the shares sold, bartered, exchanged, or otherwise disposed of to the total outstanding shares of stock after listing in the local stock exchange, as follows:

Up to 25% 4%Over 25%, but not over 33 and 1/3% 2%Over 33-1/3% 1%


TAX RATESRETURN AND PAYMENT OF PERCENTAGE TAXES

The taxpayer may file a separate return for each branch or place of business, or a consolidated return for all.

As a general rule:Every person liable to pay a percentage tax shall file a quarterly return of the amount of his gross receipts and pay the tax thereon, within twenty five (25) days after the end of each taxable month.

Exceptions: When the BIR Commissioner may, by rules and regulations, prescribe the time for filing the returns.

A national internal revenue tax to which only:

•Manufacturers; or

•Importers

may be subjected to excise tax.


TWO (2) KINDS OF EXCISE TAXES

SPECIFIC TAX AD VALOREM

TAXan excise tax imposed and based on weight or volume or capacity or any other physical unit of measurement.

an excise tax imposed and based on selling

price or other specified value of the article.


•To curtail consumption of certain commodities which are considered harmful to the individual as well as the community as a whole;

•To protect domestic industries from competition caused by similar imported products;

•To distribute the tax burden in proportion to benefit derived from a particular government service;

•To raise revenue.

PURPOSES OF EXCISE TAX


ARTICLES SUBJECT TO EXCISE TAX

Alcohol

productsTOBACCO PRODUCTS

PETROLEUM PRODUCTS

ARTICLES SUBJECT TO EXCISE TAX

Mineral

products AUTOMOBILES

NON-ESSENTIAL GOODS


Alcohol Products-Distilled Spirits

Distilled Spirits

substance known as ethyl alcohol and ethanol including all dilutions, purification and mixtures thereof, from whatever source, by whatever process produced, and shall include whisky, brandy, rum, gin and vodka and other similar products or mixtures.


Retail Price – it is the amount of money or prices which an ultimate consumer or end user pays for the product.

If the Retail Price: Excise Tax would be:Less than P250 per 750 ml. P 75 per proof literP250 to P675 per 750 ml. P 150 per proof literMore than P675 per 750 ml. P 300 per proof liter

How to determine Proof Liter:1 liter = 1,000 mlPercent of proof = degree of proof per 100%Proof liter = percent of proof liter x volume in

liter


But, if the alcohol products is produced from sap of nipa, coconut, cassava, camote, buri palm or from juice or syrup of sugar cane, the excise tax would be as follows:

Excise TaxSmall-scale production (not more than 100 liters/day) P 4 per proof literCommercial production(more than 100 liters/day) P 8 per proof liter



Alcohol Products-Wines

Wines

alcoholic beverages produced by fermentation without distillation from juice of any kind of fruit.


Retail Price /Liter Tax per Liter(exclusive of VAT & Excise Tax)

•Sparkling wine/Champagne, regardless of proof liter: P500 and less P 100More than P500 P 300

•Wine containing 14% alcohol or less P 12•Wine containing more than 14% alcohol but not

more than 25% alcohol by volume P 24

•Fortified wines produced by mixture of distilledspirits with water and other substance suchas flavoring extracts and coloring materialsin such portion that the resultant mixture contains Same mannermore than 25% of alcohol by volume as in distilled

spirits.

Alcohol Products-Wines

Alcohol Products-Fermented Liquors

Fermented liquors

alcoholic beverages produced by fermentation without distillation of grains or malt, which include beer, lager, ale porter and other similar products but excluding tuba, basi, tapoy and other similar domestic fermented liquor.

Retail Price /Liter Tax per Liter(exclusive of VAT & Excise Tax)Less than P 14.50 P 6.15P 14.50 up to P 22.00 P 9.15More than P 22.00 P 12.15


Tobacco Products

1. P 0.75/KILO of the following tobacco products:

•Tobacco twisted by hand or reduced into a condition to be consumed in any manner other than the ordinary mode of drying and curing;

•Tobacco prepared or partially prepared with or without the use of any machine or instrument or without being pressed or sweetened;

•Fine-cut shorts and refuse, scraps, clippings, cuttings, stems and sweepings of tobacco.

Tobacco Products

2. P 0.60/KILO of tobacco specially prepared for chewing and not suitable for use in any other manner;

3. P 1.00 per piece on cigar (cigar means all rolls of tobacco or any substitute thereof, wrapped in leaf tobacco)

4. P0.40 per pack on cigarettes packed by hand (cigarette means all rolls of finely cut leaf tobacco or any substitute thereof, wrapped in paper or in any other similar materials).

Tobacco Products

5. Cigarette packed by machine:

Retail price/pack Excise Tax per pack(excluding VAT & Excise Tax)

Below P 5.00 P 1.00P5.00 to P6.50 P 5.00

Over P6.50 but not over P10 P 8.00Over 10 P12.00


Petroleum Products

1. P 4.50/LITER of volume or P4.50/KILO of lubricating oil and greases.2. P 0.05/LITER on processed gas3. P 3.50/KILO on waxes and petroleum4. P0.05/LITER on denatured alcohol used for or

motive power.5. P4.50/LITER on Naptha, regular gasoline and

other similar products of distillation.6. P5.35/LITER on leaded premium gasoline

Petroleum Products

7. P3.67/LITER on aviation turbo jet fuel8. P0.60/LITER on kerosene9. P1.63/LITER of diesel fuel oil10. ZERO on liquefied petroleum gas11. P.056/KILO of asphalt12. P.030/LITER of bunker fuel oil-But if other petroleum product will be produce from the banker oil, the excise which have been levied shall be credited with excise taxes paid in the produced petroleum products.


Mineral Products

1. P10 per metric ton on coal and coke;2. On all non metallic minerals and quarry resources – 2% based on actual market value of gross output thereof at the time of removal.3. On all metallic minerals –based on actual market value of the gross output at the time of removal thereof; for:

- Copper and other metallic resources minerals: 1% on the 1st 3 years of effectivity of RA 7729

1 ½% on the 4th and 5th year2% on the 6th year and thereafter

- Gold and Chromite – 2%- On indigenous petroleum- 3% on the fair

international market price on the first taxable sale, barter, exchange or such similar transaction.

AUTOMOBILES

TAX BASE

1.If locally manufactured or if imported for re-sale domestically, the tax base shall be the manufacturer or importer’s selling price net of excise and value added tax.

2. If the importation is not intended for re-sale domestically, the tax base shall be the total value used by the Bureau of customs in determining tariff and custom duties, including custom duty and all other charges, plus 10% of the total thereof.


AUTOMOBILES

TAX RATE Engine Displacement in cubic centimeter:

Gasoline Driven Diesel Driven Tax Rate

Up to 1600cc Up to 1800 cc 15%1601 to 2000cc 1801 to 2300cc 35%2001 to 2700cc 2301 to 3000cc 50%2701cc and over 3001cc or over 100%


Non-ESSENTIAL GOODS

Non essential goods include the following:

All goods commonly or commercially known as Jewelry, whether real or imitation, pearls, precious and semi-precious stoned and imitations thereof;

Perfumes and toilet waters;

Yachts and other vessels intended for pleasure or sports.

Non-ESSENTIAL GOODS

EXCISE TAX BASE and RATE

20% of the wholesale price or the value of importation used by the Bureau of Customs in determining the tariff and custom duties, net of excise tax and value added tax.


Return shall be filed and Excise tax shall be paid:

•By the manufacturer or producer before removal of the products from the place of production. A separate return for each place of production shall be filed by every liable person.

PLACE and TIME FOR FILING OF RETURN and PAYMENT OF TAX


•By the importer before removal of the importation from the custom warehouse to be paid to the Custom Officers under the regulation of the Department of Finance.




With respect to the excise tax on locally produced or extracted metallic mineral or mineral products, the person liable shall file a return and pay the tax within 15 days after the end of the calendar quarter when such products were removed subject to such conditions as may be prescribed by rules and regulations to be promulgated by the Secretary of Finance upon recommendation of the BIR.




The return shall be filed with and the tax paid to any authorized agent bank or Revenue Collection Officer, or duly authorized City or Municipal Treasurer in the Philippines.



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