ACYTAXN: Other Percentage Taxes - LECPA Review

Cooperatives and Self-Employed Individuals Availing of the 8% Tax

Entities who are exempt from OPT.

3%

The OPT tax rate for Common Carriers Tax (CCT).

Common Carriers

Refers to persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods, or both, by land, water, and air, for compensation, offering their services to the public, and shall include transportation contractors.

Actual Gross Receipts or Minimum Gross Receipts (Whichever is higher)

The tax base of the 3% CCT.

Zero rated vat

The tax imposed on the foreign transport of domestic common carriers of passengers/cargoes, whether land or sea, from the Philippines to a foreign country.

Domestic Transport of Passengers by Land

The only form of domestic carrier activity subject to 3% CCT.

International Air Carriers and International Shipping Carriers

Subject to 3% CCT on International Carriers on their transport of cargo (excluding passengers).

3%

The tax rate on CCT on international carriers.

2%

The tax rate on the tax on franchises of gas and water utilities.

3%

The tax rate on the tax on radio and/or television broadcasting companies.

Requisites for franchises on Radio and/or Television Broadcasting Companies

1. Not a VAT registered person.

2. Annual gross receipts of the preceding year do not exceed P10m.

10%

The tax rate of Overseas Communication Tax (OCT).

User of the facility

The person liable for overseas communication tax.

5%

The Gross Receipts Tax of bank and non-bank financial intermediaries on interest, commissions, and discounts from Lending and Financial leasing with a remaining maturity period in 5 years or less.

1%

The Gross Receipts Tax of bank and non-bank financial intermediaries on interest, commissions, and discounts from Lending and Financial leasing with a remaining maturity period of more than 5 years.

0%

The Gross receipts tax of banks and non-bank financial intermediaries on dividends, and equity shares in net income of subsidiaries.

7%

The Gross receipts tax of banks and non-bank financial intermediaries on royalties, rentals of property, real or personal, profits from exchange and all other items treated as gross income under the Tax Code.

7%

The Gross receipts tax of banks and non-bank financial intermediaries on net trading gains within the taxable year on foreign currency, debt securities, derivatives and other similar financial instruments.

5%

The Gross receipts tax of other non-bank financial intermediaries not performing quasi-banking functions on interest, commissions, discounts, and all other items treated as gross income under the tax code.

5%

The Gross receipts tax of other non-bank financial intermediaries not performing quasi-banking functions on interest, commissions, and discounts from lending activities and financial leasing with a remaining period of 5 years or less.

1%

The Gross receipts tax of other non-bank financial intermediaries not performing quasi-banking functions on interest, commissions, and discounts from lending activities and financial leasing with a period of more than 5 years.

2%

The tax rate on Premiums Tax or the tax on life insurance premiums.

Premiums refund within 6 months after payment

The time period wherein premiums tax are not imposed.

4%

The premiums tax rate of fire, marine, or miscellaneous agents of nonresident foreign insurance companies engaged in insurance business but not authorized to transact business in the Philippines

5%

The premiums tax rate of owners of property directly obtaining insurance from non-resident foreign corporations engaged in insurance business not authorized to transact business in the Philippines.

18%

The amusement tax rate of cockpits.

18%

The amusement tax rate of cabarets, nights or day clubs.

10%

The amusement tax rates of boxing exhibitions.

15%

The amusement tax rate of professional basketball games.

30%

The amusement tax rate of Jai-Alai and racetracks

60%

The required ratio of a corporation who promotes boxing exhibitions so that there will be an exemption of the 10% amusement tax.

5% of Gross Gaming Revenue or 5% of the Agreed Pre-determined Minimum Monthly Revenue from Gaming Operations (Whichever is higher)

The percentage tax rate of gaming tax on services rendered by Offshore Gaming Licensees (OGLs).

10%

The applicable percentage tax rate of the owner of a winning horse.

10% on net winnings

The applicable percentage tax rate of a bettor in a horse race on ordinary winnings.

4% on net winnings

The applicable percentage tax rate of a bettor in a horse race in case of winnings from double, forecast/quinella and trifecta bets (special winnings).

60% of 1%

The applicable tax rate of the Stock Transaction Tax.

BIR Form 2551Q

The applicable quarterly return of other percentage taxes.

Before the 25th day following the end of the quarter

The period of when to file and pay other percentage taxes.

Person not Liable of Other Percentage Tax

Persons, who are not VAT-registered, who sell goods, properties or services, whose annual gross sales and/or receipts do not exceed three million pesos (P3,000,000) and are exempt from value-added tax (VAT).

Person not Liable of VAT but liable to OPT

Persons who lease residential units where the monthly rental per unit exceeds fifteen thousand pesos (Php 15,000) but the aggregate of such rentals of the lessor during the year does not exceed three million pesos (P3,000,000).

Gross Sales

The tax base of other percentage taxes on sale of goods.

Gross Receipts

The tax base of other percentage taxes on sale of services.

3%

OPT Rate prior to July 1, 2020.

1%

OPT Rate from July 1, 2020 to June 30, 2023.

3%

OPT Rate beginning July 1, 2023.

Domestic Carriers and Keepers of Garages

Businesses who have cars for rent or hire driven by the lessee; transportation contractors, including persons who transport passengers for hire, and other domestic carries by land for the transport of passengers (except owners of bancas and owners of animal-drawn two wheeled vehicle), and keepers of garages.

Shall pay a tax equivalent to three percent (3%) of their quarterly gross receipts.

Annual Gross Receipts or Minimum Gross Receipts (Whichever is Higher)

It is the tax base of Common Carrier's Tax.

VAT

The applicable business tax on transport of goods/cargoes by land, if gross receipts exceed P3,000,000.

OPT Under Sec. 116

The applicable business tax on transport of goods/cargoes by land, if gross receipts do not exceed P3,000,000.

VAT

The applicable business tax on transport of goods/cargoes by air, if gross receipts exceed P3,000,000.

OPT Under Sec. 116

The applicable business tax on transport of goods/cargoes by air, if gross receipts do not exceed P3,000,000.

Gross Receipts of International Air Carriers/Shipping Carriers

Shall include, but shall not be limited to, the total amount of money or its equivalent representing the contract, freight/cargo fees, mail fees, deposits applied as payments, advance payments and other service charges and fees actually or constructively received during the taxable quarter from CARGO AND/OR MAIL, ORIGINATING FROM THE PHILIPPINES in a continuous and uninterrupted flight, irrespective of the place of sale or issue and the place of payment of the passage documents.

Exempt

The applicable tax of international carriers that transport passengers, whether by air or sea, from the Philippines to a Foreign Country.

CCT on International Carriers (Resident Foreign Corporations)

The applicable tax of international carriers that transport goods or cargoes, whether by air or sea, from the Philippines to a Foreign Country.

Franchises on Radio and/or Television Broadcasting Companies whose Annual Gross Receipts of the PRECEDING YEAR do not Exceed Ten Million Pesos (P10,000,000) and Franchises on Gas and Water Utilities

These are franchises that are subject to the Franchise Percentage Tax.

True

(True or False) The Ten Million Peso threshold shall only be applicable to franchises on radio and/or television broadcasting companies.

True

(True or False) The tax imposed on the tax on overseas dispatch, message or conversation originating from the Philippines 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.

Within Twenty (20) Days After the End of Each Quarter

The number of days the person paying for the overseas dispatch, message or conversation, shall pay to the service provider, so that the latter shall collect and pay the tax.

True

(True or False) There is an overseas dispatch, message or conversation transmitted from the Philippines by telephone, telegraph, tele-writer exchange, wireless and other communication equipment services.

Exempted from the Overseas Communication Tax

These are the persons exempted:

a. The Philippine government or any of its political subdivisions or instrumentalities.

b. Diplomatic Services. Amounts paid for messages transmitted by any embassy and consular offices of a foreign government.

c. International Organizations. Amounts paid for messages transmitted by a public international organization or any of tis agencies based in the Philippines enjoying privileges and immunities which the Government of the Philippines is committed to recognize pursuant to an international agreement.

d. News Agencies.

Banks or Banking Institutions

Refer to those entities as defined under Section 3 of Republic Act No. 8791, otherwise known as the General Banking Law of 2000, or more specifically, to entities engaged in the lending of funds obtained in the form of deposits. They specifically include universal banks, commercial banks, thrift banks (savings and mortgage banks, stock savings, and loan associations, and private development banks), cooperative banks, rural banks, islamic banks and other classifications of banks as may be determined by the Monetary Board).

Non-Bank Financial Intermediaries

Refer to persons or entities whose principal function include the lending, investing, or placement of funds or evidences of indebtedness or equity deposited with them, acquired by them, or otherwise coursed through them, either for their own account or for the account of others. This includes all entities regularly engaged in the lending of funds or purchasing of receivables or other obligations with funds obtained from the public through the issuance, endorsement or acceptance of debt instruments of any kind for their own account, or through the issuance of certificates, or of repurchase agreements, whether any of these means of obtaining funds from the public is done on a regular basis or only occasionally.

Quasi-Banking Functions

Shall refer to the borrowing of funds from twenty (20) or more personal or corporate lenders at any one time, through the issuance, endorsement or acceptance of debt instruments of any kind, other than deposits, for the borrower's own account or through the issuance of certificates of assignment or similar instruments, with recourse, or of repurchase agreements for purposes of relending or purchasing receivables or other similar obligations. Provided, however, that commercial, industrial and other non-financial companies, which borrows funds through any of these means for the limited purpose of financing their own needs or the needs if their agents or dealers, shall not be considered as performing quasi-banking functions.

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 two (2%) percent 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.

Exempted from Premiums Tax

The following premiums are exempted from tax:

1) Premiums refund within six (6) months after payment on account of rejection of risk or returned for other reason to a person paid the tax.

2) Premiums paid upon re-issuance by a company that has already paid the tax

3) Premiums collected or received by any branch of a domestic corporation, firm, or association doing business outside the Philippines on account of any life insurance of the insured who is a non-resident, if any tax on such premium is imposed, by the foreign country where the branch is established.

4) Premiums collected are 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;

5) Portion of the premiums collected or received by the insurance companies or variable contracts in excess of the amounts necessary to insure the lives of the variable contract workers (as defined in Sec. 232(2) of Presidential Decree No. 612).

6) Premium collected by a purely cooperative company or association.

Tax on Agents of Foreign Insurance Companies

Also known as Premiums Tax on agents of nonresident 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.

Persons Liable for Tax on Agents of Foreign Insurance Companies

Persons Liable:

a. Fire, Marine, or Miscellaneous Agents of Non-Resident Foreign Corporations engaged in insurance business not authorized to transact business in the Philippines.

b. Owners of property directly obtaining insurance from Non-Resident Foreign Corporations engaged in insurance business but not authorized to transact business in the Philippines.

Gross Receipts

Embrace all the receipts of the proprietor, lessee or operator of the amusement place. It also include income from television, radio, and motion picture rights.

Within Twenty (20) Days

The number of days a proprietor, lessee, or operator, as well as any party liable, shall pay Amusement taxes.

Persons Liable for Amusement Taxes

Proprietor, lessee or operator of cockpits, cabarets, night or day clubs, boxing exhibitions, professional basketball games, Jai-Alai, and racetracks.

Requisites for Exemption of Boxing Exhibitions

Such requisites for exemption include:

a. World or Oriental Championships is at stake.

b. One of the contenders is a citizen of the Philippines.

c. Promoted by citizens of the Philippines or by a corporation or association at least sixty-percent (60%) of the capital of which is owned by such citizen.

Persons Liable for Tax on Winnings

Persons Liable:

a. Owners of the winning horse.

b. Bettor in a horse race or jai-alai.

True

(True or False) The cost of winning tickets is not applicable to owners of winning horses. Accordingly, the percentage tax shall be based on gross winnings or prizes.

Tax on Winnings of Owners of a Winning Horse

Prize/Winnings x 10%

Tax on Ordinary Winnings of a Bettor in a Horse Race

Gross Winnings or Dividends - Cost of Winning Ticket = Net Winnings x 10%

Tax on Special Winnings (Double/Forecast or Quinella/ Trifecta Bets)

Gross Winnings or Dividends - Cost of Winning Ticket = Net Winnings x 4%

Within Twenty (20) Days

The number of days an operator, manager or person in charge of horse races shall file a true and correct return with the BIR, and pay the within the same period the total amount of tax so deducted and withheld.

True

(True or False) To be subject to Stock Transaction Tax, the seller must not be a dealer in securities and the shares sold must be listed and traded through the local stock exchange.

True

(True or False) The provision of the Tax Code to pertaining to tax imposed on Initial Public Offering was repealed by RA 111494, also known as the Bayanihan to Recover as One Act, effective September 15, 2020. Consequently, every sale, barter, exchange or other disposition through IPO of shares of stock in closely held corporations shall no longer be subject to tax.

Within Five (5) Banking Days from the Date of Collection

The number of days a stock broker who effected the sale subject to the STT imposed therein to collect the tax and remit the same to the Bureau of Internal Revenue. Submission shall be made on Mondays of each week to the secretary of the stock exchange.

On or Before the 25th Day following the End of the Quarter

The deadline for the filing and payment of the quarterly percentage tax due.

BIR Form No. 2551Q

The BIR tax return to be filed for the quarterly payments of other percentage taxes.

True

(True or False) In the case of a person whose VAT registration is cancelled and who becomes liable to the tax imposed, as amended, the percentage tax shall accrue from the date of cancellation and shall be paid on a quarterly basis which should be filed and paid on or before the 25th day following the end of the quarter using BIR Form No. 2551Q.

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.

True

(True or False) The tax base for the CWT excludes the VAT and the excise tax.