04.1 Other Percentages Taxes PDF

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TAXATION4. Other Percentage tax Page 1 of 15FAR EASTERN UNIVERSITY – MANILAOTHER PERCENTAGE TAXES (401)**A. Sec. 116- Tax on Persons Exempt from VAT under Section 109 (bb) Persons subject to tax** a. Persons whose annual sales or receipts does not exceed P3,000, b. Person who are not VAT registered ...

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TAXATION FAR EASTERN UNIVERSITY – MANILA

OTHER PERCENTAGE TAXES (401) A. Sec. 116- Tax on Persons Exempt from VAT under Section 109 (bb) 1. Persons subject to tax a. Persons whose annual sales or receipts does not exceed P3,000,000 b. Person who are not VAT registered (Sec. 109 (bb)) 2. Tax base a. Gross monthly sales or receipts 1)Seller of goods  Gross sales 2)Seller of services  Gross receipts 3. Tax rate a. The tax rate is 3% 4. Optional VAT registration a. Persons subject to the above tax may apply for registration as VAT subject persons not later than ten (10) days before the beginning of the taxable quarter 5. Cancellation of VAT Registration a. Any person exempt from VAT under Sec. 109 (1) (bb) who elects to register under the VAT system shall not be allowed to cancel his registration for the next three (3) years 5. Person exempt from gross receipt tax a. Cooperatives are exempt from the 3% gross receipts tax imposed under sec. 116  However, cooperatives who transact business with their members and non-members and with accumulated reserves and undivided net savings of more than P10,000,000 shall be subject to the percentage tax on all sales of goods and/or other services to non-members. b. Fees, per diems, allowances and other income received by corporate directors whether employee or not employee. c. Marginal income earners. 1) Marginal income earners shall refer to those individual whose business do not realize gross sales or receipts exceeding P100,000 in any 12month period. d. VAT-registered persons regardless of level of sales. e. VAT-registrablepersons.

B. Sec. 117 – Percentage Tax on Domestic Carriers and Keepers of Garage (Common Carrier’s Tax) 1. Common carrier defined Persons, corporations, firms or associations engaged in the business of carrying or transporting passenger or goods or both, by land, water, or air, for compensation, offering their services to the public and shall include transportation contractors. 2. Persons subject to common carrier’s tax a. Cars for rent or hire driven by the lessee b. Transportation contractors, including persons who transport passenger for hire c. Other domestic carriers by land for the transport of passengers d. Keepers of garage (garage is a closed shelter for automobiles; a business establishment where automobiles are repaired, stored, maintained, tuned-up, cared etc.) 3. Other common carriers subject to 3% percentage tax a. Taxicabs b. Cars for hire owned by rent-a-car companies c. Tourist buses used for the transport of passengers 4. Persons not subject to the 3% common carrier’s tax a. Owners of banca b. Owners of animal-drawn two-wheeled vehicle 5. Tax base a. Actual quarterly gross receipts b. minimum quarterly gross receipt

Minimum Quarterly Gross Receipts 1. Jeepney for hire 2. Public Utility Bus Not exceeding 30 passengers Exceeding 30 but not exceeding 50 passengers Exceeding 50 passengers 3. Taxis

4. Other Percentage tax

Manila and other cities P2,400 P3,600 P6,000 P7,200 P3,600

Provinces P1,200 P3,600 P6,000 P7,200 P2,400

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4. Car for hire with chauffeur 5. Car for hire without chauffeur 

P3,000 P1,800

P3,000 P1,800

whichever is higher between a. and b. above.

6. Tax rate a. The tax rate is 3%. 7. Exemption from local taxes a. The gross receipts of common carriers derived from their incoming and outgoing freight shall not be subject to the local taxes imposed under R.A. No. 7160, otherwise known as the Local Government Code of 1991. 8. Transportation contractors and common carriers subject to VAT a. Transportation contractors on their transport of goods or cargoes. b. Persons who transport goods or cargoes for hire. c. Other domestic carriers by land relative to their transport of goods or cargoes. d. Common carrier by air and sea relative to their transport of passengers, goods or cargoes from one place in the Philippines to another place in the Philippines 9. RMC 70-2015 (Transportation Network Companies) a. Transportation Network Companies (TNC) TNC is a pool of land transportation vehicles whose accessibility to the riding public is facilitated through the use of common point of contract which may be in the form of text, telephone, and/or cellular calls, email, mobile applications or by other means. The vehicle used in transporting passengers and/or goods in the TNC may be owned by other people and/or entities other than the TNC, and shall be referred herein as “Partners”. 

3% common carrier tax TNCs/Partner with valid “Certificate of Public Convenience (CPC)” engaged in the transport of passengers are subject to 3% common carrier tax under Section 117 of the Tax Code.



12% VAT or 3% OPT TNCs/Partner without valid CPC are classified as land transportation contractor subject to either 12% VAT or 3% OPT under Section 116 of the Tax Code.

C. Sec. 118 – Percentage Tax on International Carriers (Air and Shipping) 1. Persons subject to tax a. International air carriers doing business in the Philippines b. International shipping carriers doing business in the Philippines 2. Tax base a. Monthly gross receipts 3. Gross Receipts Defined (Revenue Regulation 11-2011)

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4. Other Percentage Tax

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international carriers doing business in the Philippines shall be exempt from VATpursuant to Sections 109(1)(E) of the NIRC, as amended by RA No. 10378, as the same is subject to Common Carrier's Tax (Percentage Tax on International Carriers) under Section 118 of the N1RC, as amended. International carriers exempt under Sections 109(1)(S) and 109(1)(E) of the NIRC, as amended, shall not be allowed to register for VAT purposes.

D. Sec. 119 – Tax on Franchises 1. Persons subject to tax a. Franchises on radio/or television broadcasting companies whose annual gross receipts of the preceding year does not exceed P10,000,000 b. Franchises on gas and water utilities 2. Tax base a. Gross receipts derived from the business covered by the law granting the franchise 3. Tax rates a. Franchise on radio and/or TV broadcasting – 3% or pay VAT at their option b. Franchise on gas and water utilities – 2% c. Franchise Tax on PAGCOR - 5% Excerpt from RMC 33-2013: PAGCOR is subject to a franchise tax of five percent (5%) of the gross revenue or earnings it derives from its operations and licensing of gambling casinos, gaming clubs and other similar recreation or amusement places, gaming pools, and other related operations. 4. Optional VAT registration a. Radio and TV broadcasting companies whose annual gross receipts of the preceding year does not exceed P10,000,000 shall have the option to be registered within 10 days before the beginning of the calendar quarter as VAT taxpayer and pay VAT thereon b. Once the option is exercised, it shall not be revoked 5. Franchise grantees subject to VAT a. Telephone and telegraph b. Radio and/or television broadcasting c. Toll road operations d. All other franchisees, other than those covered by Sec. 119 of the Tax Code, regardless of how their franchise may have been granted Summary of Business Taxes for Franchise Grantees Grantor Type of Franchise 1. Government Radio/TV Broadcasting Co. Gas and water utilities PAGCOR All other types of franchises 2. Private Co.’s

All type of franchises

Business Tax 3%OPT or 12% VAT if VAT reg. or if gross receipts >P10M for the preceding year 2% OPT regardless of gross receipts 5% OPT on gross revenue or earnings (PD 1869/RMC 22-2013) 12% VAT or 3% OPT if non-vat reg. and gross receipts < P3,000,000 12% VAT or 3% OPT if non-vat reg. and gross receipts...