March 21, 2016

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List of Taxes in the Philippines (Defined & Explained)

The information below contains the list of kinds of taxes here in the Philippines. Some of these taxes are subdivided into other kinds of minor and major taxes. All data were gathered from the official website of the Bureau of Internal Revenue or BIR. Please refer to the list below for more details.


List of Taxes in the Philippines (Defined & Explained)

List of Taxes in the Philippines (Defined & Explained)

1. CAPITAL GAINS TAX

Capital Gains Tax is a tax imposed on the gains presumed to have been realized by the seller from the sale, exchange, or other disposition of capital assets located in the Philippines, including pacto de retro sales and other forms of conditional sale.

2. DOCUMENTARY STAMP TAX

Documentary Stamp Tax is a tax on documents, instruments, loan agreements and papers evidencing the acceptance, assignment, sale or transfer of an obligation, right or property incident thereto.

3. DONOR'S TAX

Donor’s Tax is a tax on a donation or gift, and is imposed on the gratuitous transfer of property between two or more persons who are living at the time of the transfer. It shall apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect and whether the property is real or personal, tangible or intangible.

4. ESTATE TAX

Estate Tax is a tax on the right of the deceased person to transmit his/her estate to his/her lawful heirs and beneficiaries at the time of death and on certain transfers, which are made by law as equivalent to testamentary disposition. It is not a tax on property. It is a tax imposed on the privilege of transmitting property upon the death of the owner. The Estate Tax is based on the laws in force at the time of death notwithstanding the postponement of the actual possession or enjoyment of the estate by the beneficiary.

5. INCOME TAX

Income Tax is a tax on a person's income, emoluments, profits arising from property, practice of profession, conduct of trade or business or on the pertinent items of gross income specified in the Tax Code of 1997 (Tax Code), as amended, less the deductions and/or personal and additional exemptions, if any, authorized for such types of income, by the Tax Code, as amended, or other special laws.

6. PERCENTAGE TAX

Percentage tax is a business tax imposed on persons or entities/transactions:

Who sell or lease goods, properties or services in the course of trade or business and are exempt from value-added tax (VAT) under Section 109 (w) of the National Internal Revenue Code, as amended, whose gross annual sales and/or receipts do not exceed Php 1,919,500 and who are not VAT-registered; and

Engaged in the following industries/ transactions:

a. Cars for rent or hire driven by the lessee, transportation contractors, including persons who transport passengers for hire, and other domestic carriers of passengers by land (except owners of animal-drawn two-wheeled vehicle) and keepers of garages

b.   International air/shipping carriers doing business in the Philippines on their gross receipts derived from transport of cargo from the Philippines to another country

c.   Franchise grantees of;

  • radio and/or television broadcasting whose gross annual receipts for the preceding year do not exceed Php 10,000,000.00 and did not opt to register as VAT taxpayers
  • gas and water utilities

d. Overseas dispatch, message or conversation transmitted from the Philippines, except those transmitted by the Philippine government, any embassy and consular offices of a foreign government, public international organizations enjoying exemptions pursuant to an international agreement and new messages to a bona fide correspondent furnishing general news service

e. Banks and non-bank financial intermediaries performing quasi-banking functions

f.  Other non-bank financial intermediaries (including pawnshops)

g. Person, company or corporation (except purely cooperative companies or associations) doing life insurance business

h. Fire, marine or miscellaneous agents of foreign insurance companies

i. Proprietor, lessee or operator of cockpits, cabarets, night or day clubs, boxing exhibitions, professional basketball games, Jai-Alai and racetracks, including videoke bars, karaoke bars, karaoke televisions, karaoke boxes and music lounges

 j. Winnings in horse races

k. Sale, barter or exchange of shares of stock listed and traded through the local stock exchange or through initial public offering.

7. VALUE-ADDED TAX (VAT)

Value-Added Tax is a form of sales tax. It is a tax on consumption levied on the sale, barter, exchange or lease of goods or properties and services in the Philippines and on importation of goods into the Philippines. It is an indirect tax, which may be shifted or passed on to the buyer, transferee or lessee of goods, properties or services.

8. WITHHOLDING TAX

Withholding Tax on Compensation is the tax withheld from income payments to individuals arising from an employer-employee relationship.

Expanded Withholding Tax is a kind of withholding tax which is prescribed on certain income payments and is creditable against the income tax due of the payee for the taxable quarter/year in which the particular income was earned.

Final Withholding Tax is a kind of withholding tax which is prescribed on certain income payments and is not creditable against the income tax due of the payee on other income subject to regular rates of tax for the taxable year. Income Tax withheld constitutes the full and final payment of the Income Tax due from the payee on the particular income subjected to final withholding tax.

Withholding Tax on Government Money Payments (GMP) - Percentage Taxes - is the tax withheld by National Government Agencies (NGAs) and instrumentalities, including government-owned and controlled corporations (GOCCs) and local government units (LGUs), before making any payments to non-VAT registered taxpayers/suppliers/payees

Withholding Tax on GMP - Value Added Taxes (GVAT) - is the tax withheld by National Government Agencies (NGAs) and instrumentalities, including government-owned and controlled corporations (GOCCs) and local government units (LGUs), before making any payments to VAT registered taxpayers/suppliers/payees on account of their purchases of goods and services.

9. EXCISE TAX

Excise Tax is a tax on the production, sale or consumption of a commodity in a country.

Applicability:

  • On goods manufactured or produced in the Philippines for domestic sale or consumption or for any other disposition; and
  • On goods imported.

Types:

  • Specific Tax – refers to the excise tax imposed which is based on weight or volume capacity or any other physical unit of measurement
  • Ad Valorem Tax – refers to the excise tax which is based on selling price or other specified value of the goods/articles
source: bir.gov.ph

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