tax second sem

Gross Receipts

– refer to the total amount of money or its equivalent representing the contract price, compensation, service fee, rental or royalty, including the amount charged for materials supplied with services, and deposit and advances payment actually or constructively received during the taxable period for the service performed  or to be performed for another person,

Taxable year

- means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the net income is computed.

fiscal year

-  means an accounting period of twelve (12) months ending on the last day of any month other than December.

Calendar year

-  means an accounting period of twelve (12) months starting on first day of January ending on the last

Basic Tax Overview for Business

 

 

Aside from income tax, individual engaged in business or exercise of a profession are also required to pay a business tax which is either a 3% percentage tax or a 12% value added tax (VAT).

Exempt from businesses

not subject to Vat or percentage tax (Ex. Seller of agri product, contract grower, book publisher or bookstore)

Business subject to Other percentage tax

(Ex. Common carrier by land, operator of cockpits, cabaret, clubs, jai alai or horse race track)

Vatable businesses

(Vat registered business regardless of gross sales/receipt)

SELF-EMPLOYED/PROFESSIONALS

Individual earnings income purely from self-employment and/or practice of profession whose gross sales/receipt and other non-operating income does not exceed the value added tax (VAT) threshold of 3 million as provided under Section 109 (BB) of the Tax Code, as amended, shall have the option to avail