Save
Business Tax
VAT
Save
Share
Learn
Content
Leaderboard
Learn
Created by
Katrina Vizconde
Visit profile
Cards (42)
BUSINESS TAX
those imposed upon onerous transfers such as sale, barter, exchange, and importation
tax on a business
Business
habitual commercial activity
Gratuitous transfers
not subject to business tax but subject to transfer taxes
Onerous Transfer
In the ordinary course of trade or business including incidental transactions
Types of Business
Tax
Value-added Tax
Other percentage taxes or simply Percentage Tax
Excise Tax
Threshold amount
more than 3,000,000 per annum
Indirect tax
sellers can pass the burden to pay tax to buyers
Subject to 0% Rate
Export Sales
Zero rated sales of services
Effectively Zero Rated Sales of Goods and Property
Destination Principle
Goods and services are taxed only in the country where these are consumed.
Cross border principle
No VAT shall be imposed to form part of the cost of goods destined for consumption outside of the territorial border of the taxing authority.
exports are
zero-rate
while imports are
taxed
Input tax
VAT due from or paid by a VAT-registered person in the course of his trade or business on importation of goods or local purchase of goods or services.
Output Tax
VAT due on the sale or lease of taxable goods or required to register under the section 236 of the Tax Code.
Impact of Tax
on the
statutory taxpayer
, the one from whom the government collects
on the
seller
upon whom the tax has been imposed
Incidence of Tax
on the one who bears the
burden of taxation
on the
final consumer
Transitional Input Tax
2%
of beginning inventory
Presumptive Input Tax
4
% of the gross value in money of their purchases of primary agricultural products.
Tax Credit Method
refers to the manner by which the VAT of a taxpayer is computed.
If output tax is more than input tax, the excess has to be
paid.
If input tax is more than output tax, the excess shall be
carried over
to the succeeding quarter/s.
Lease of Residential Units
If the lease payments if more than 15,000 monthly and the annual rentals are less than 3,000,000 =
VAT Exempt
,
Subject to 3% Percentage Tax
If the lease payments if less than 15,000 monthly =
VAT Exempt
,
not subject to 3% Percentage Tax
If the lease payments if more than 15,000 monthly and the annual rentals are more than 3,000,000 =
Subject to 12% VAT
,
Subject to 3% Percentage Tax
The
seller
is directly liable to pay VAT
The rate of VAT is
12%
and
0%
Transaction deemed sale
not actually sales because of the absence of actual exchange between the buyer and the seller, are considered or included in the term "sale"
Zero rated sale of service
Foreign currency
Foreign client
Service must be done within the Philippines
Transactions Deemed Sale
Transfer
,
use
or
consumption
not in the course of business of goods or properties originally intended for sale or for use in the course of business;
Distribution or transfer
to: (a)
Shareholders
or
investors
as share in the profits of the VAT-registered persons; or(b)
Creditors
in payment of debt;
Consignment of goods
if actual sale is not made within
sixty (60
) days following the date such goods were consigned; and
Retirement
from or
cessation
of business, with respect to inventories of taxable goods existing as of such retirement or cessation.
Domestic Carriers and Keepers of Garage -
Gross Receipts
-
3%
International air and shipping carriers -
gross receipts
-
3%
Radio and/or television broadcasting -
gross receipts of not exceeding 10 million
-
3%
Gas and water utilities -
Gross receipts not exceeding 10 million
-
2%
Life Insurance -
Premium
-
2%
Agents of Foreign Insurance Company -
Premium
-
4%
Life Insurance directly taken from Foreign Insurance Companies -
Premiums
-
5%
Winnings in horse races -
winnings after deducting the cost of the ticket
-
10%
Winnings in double, forecast/quinella and trifecta bets -
winnings after deducting the cost of the ticket
-
4%
Owners of winning race horses -
10%
gaming tax -
entire gross gaming revenue
-
5
%
Maturity period
5 years or less -
5
%
More than 5 years -
1
%
Pre-termination
If maturity is shortened, the tax rate applied based on the
new maturity period
Dividend and Equity Shares
Net income of subsidiaries -
0%
Other income sources
Royalties
Rentals (real or personal property)
Profits from exchange and other gross income items under Sec. 32 -
7%
See all 42 cards