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RTDG - ausl estate, donors, VAT, excise, percentage, doc stamp tax reviewer

ESTATE TAX
1. What transfer is subject to estate tax?
The transfer of the net estate of every decedent,
whether a resident or non-resident is subject to estate tax.
2. When does the estate tax accrue?
Estate tax accrues at the time of death of the
decedent.
3. Define estate tax
Estate tax is a graduated tax on the privilege of a
decedent to transmit property at death, and is based on the
entire net estate regardless of the number of heirs and
relation to the decedent.
4. When are properties and rights transferred to
successors?
The properties and rights are transferred to the
successor at the time of death of the decedent. (Art. 777,
CC).
However, despite the transfer of properties and rights
at the time of death, the executor or administrator shall not
deliver any distributive shares to any party interested on the
estate unless there is a certificate issued by the CIR that the
estate tax has been paid.
5. Who are the taxpayers liable to pay estate tax?
(1) resident citizen
(2) non-resident citizen
(3) resident alien
(4) non-resident alien
6. Distinguish Gross Estate from Net Estate
Gross Estate is the value of all the properties, real or
personal, tangible or intangible wherever situated, while Net
Estate shall include all the properties less the ordinary and
special deductions.
7. How is gross estate determined?
For Resident Citizen / Non-Resident Citizen /
Resident Alien Decedent, the gross estate is determined by
all the properties, real or personal, tangible or intangible
wherever situated.
For Non-Resident Alien Decedent, only those
properties situated in the Philippines, provided that in the
case of intangible personal property, its inclusion on the gross
estate is subject to the rule of reciprocity under Section 104 of
the Tax Code.
8. What is the rule in determining the situs of intangible
personal property for estate tax purposes?
As a general rule, the intangible property is taxed
based on the domicile of the owner. However, Section 104 of
the Tax Code provides that certain intangibles be deemed
located in the Philippines namely:
(1) Franchise exercised in the PH.
(2) Shares, obligations or bonds issued by a
domestic corporation or partnership, or business or industry
located in the PH.
(3) Shares, obligations or bonds issued by a foreign
corporation where 85% of its business is located in the PH.

(4) All intangible property of residents.

9. What is meant by reciprocity as applied to
intangibles of a non-resident alien for estate tax
purposes?
As provided in Section 104 of the Tax Code, there is
reciprocity if the foreign country in which the decedent is a
citizen or resident of that foreign country at the time of death:
(1) Did not imposed estate tax; or
(2) Allowed a similar exemption of estate tax with
respect to intangible personal property owned by a Filipino
citizen not residing in that foreign country.
10. How is net estate determined?
Net estate less ordinary deductions & special
deductions.
11. How do you value the estate for estate tax purpose?
Estate tax is determined by the fair market value as
of the time of death, whichever is higher.
12. What items/transfers should be included in the gross
estate?
(1) Decedents interest at the time of death
(2) Transfers in contemplation of death
(3) Revocable transfers
(4) Property under the general power of appointment
(5) Proceeds of life insurance taken out by the
decedent upon its own life, where the beneficiary is the
estate, executor or administrator, or any beneficiary
designated as revocable
(6) Transfers for insufficient consideration
13. Enumerate the deductions from gross estate.
Ordinary: Expenses, Losses, Indebtedness, Taxes
Special: Family home, Standard deduction, Medical
expenses, Amount received by heir under RA 4917
14. What are the exclusion from the gross estate?
Exclusive property of the surviving spouse, GSIS
benefits, SSS, war damage payments, etc.
15. Who may avail of tax credit?
(1) Citizen
(2) Resident Alien
16. What is the amount allowable as a Tax Credit?
The tax imposed by the Philippines shall be credited
with the amounts of an estate tax imposed by the authority of
a foreign country.
17. When is an estate tax return required?
It is required when the estate is subject to estate tax.
It is required when the gross value of the estate
exceeds 200,000
18. When should the estate tax return be filed?
General Rule: within 6 months from the death of the
decedent.
However, the CIR in meritorious cases, grant an
extension not exceeding 30 days for filing the return.

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RTDG - ausl estate, donors, VAT, excise, percentage, doc stamp tax reviewer

19. Who is liable for the payment of the estate tax?

The estate tax imposed under the Tax Code shall be
paid by the executor or administrator, before the delivery of
the distributive share in the inheritance to the any heirs or
beneficiary.

DONORS TAX
1. What donations are covered by the donors tax?
The donors tax is imposed only on donation inter
vivos.
2. When is donors tax imposed?
Donors tax is imposed upon the transfer by any
person, resident or non-resident, of any property by gift.
3. What is a donors tax?
Donors tax is an excise tax imposed on the privilege
to transfer property by way of donation inter vivos.
4. What are the requisites of a valid donation?
(1) Capacity to donate
(2) Intent to donate
(3) Delivery, either actual or constructive
(4) Acceptance by the donee
(5) Form prescribed by law
5. What are considered donations for tax purposes?
(1) Sale, exchanges and other transfers of property
for less than an adequate and full consideration in money or
moneys worth
Exception: if the property is the capital asset then it is
subject to 6% capital gains tax.
(2) Condonation or remission of debt where the
debtor did not render service in favor of the creditor.
6. When is there a transfer for less than an adequate
and full consideration in money or moneys worth?
The fair market value of the property exceeded the
value of the consideration be deemed as a gift.
7. Who are liable to pay donors tax?
(1) Resident Citizen
(2) Non-Resident Citizen
(3) Resident Alien
(4) Non-Resident Alien
(5) Domestic Corporation
(6) Foreign Corporation
8. Enumerate the exemptions from donors tax
(1) Donations made on account of marriage
(2) Donations made to educational, religious,
charitable institution provided not more than 30% of said gifts
will be used for administrative purpose
(3) Donations made to or for the use of the
government not conducted for profit
9. Who are liable for donors tax?
The donor is liable to pay donors tax

10. What is the basis in computing donors tax?

The tax shall be computed on the basis of the total
net gifts made during the calendar year in accordance with
the graduated donors tax rates.
11. What are the rates of the tax payable by donors?
Subject to 30% donors tax on donations made to
stranger

VALUE-ADDED TAX (VAT)

1. Define VAT
VAT is a tax assessed, levied and collected on every
importation of goods, whether or not in the course of trade or
business, or imposed on each sale, barter, exchange or lease
of goods or properties or on each rendition of services in the
course of trade or business.
2. What is the current VAT rate?
12%
3. What are VAT-taxable transactions?
Vatable transactions are transactions which is subject
to VAT, either 12% or 0% and the seller shall be entitled to a
tax credit for the VAT paid on purchases or leases of goods,
properties or services.
4. What is Input Tax (input vat)?
Input Tax is the value-added tax paid by a VATregistered person/entity in the course of his/its trade or
business on the importation of goods or local purchases of
goods or services from a VAT-registered person. (Expenses)
5. What is Output Tax (output vat)?
Output Tax is the value-added tax on the sale of
taxable goods or services by any person registered or require
to register under the Tax Code. (Sale)
6. What is the tax credit method?
Under the credit method, an entity can credit against
or subtract from the VAT charged on its sales or outputs the
VAT paid on its purchases, inputs and imports.
7. What are Zero-Rated transactions?
Zero-rated Sales of Goods or Properties is a
taxable transaction for VAT purposes, but shall not result in
any output tax. However, the input tax on purchases of
goods, properties or services, related to such zero-rated sale,
shall be available as tax credit or refund.
8. What are VAT-Exempt transactions?
VAT-Exempt Transactions refer to the sale of goods
or properties and/or services and the use or lease of
properties that is NOT subject to output tax and the seller is
NOT allowed any tax credit of input tax on purchases.
9. Enumerate the zero-rated sales of services
(1) Export Sales
(2) Foreign currency denominated sale (sale to a
non-resident)

RTDG - ausl estate, donors, VAT, excise, percentage, doc stamp tax reviewer

(3) Sales to persons or entities whose exemption

under special laws and international agreement
10. Enumerate the exempt transactions
Section 109 (A) to (V)
11. Who are required to file VAT?
(1) Every person or entity who in the course of his
trade or business, sells or leases goods, properties and
services subject to VAT if the aggregate amount of actual
gross sales or receipts exceed P1,919,500 for any 12 month
period.
(2) A person required to register as a VAT taxpayer
but failed to register.
(3) Any person who imports goods.
(4) Professional practitioners whose gross
professional fees exceed the threshold for any 12 month
period.
12. What are the rules regarding the time for filing the
return and payment of the tax?
(1) The monthly VAT declarations of taxpayers
whether large or not shall be filed and the taxes paid not later
than the 20th day following the end of each month.
(2) A quarterly VAT return of the amount of his gross
sales or receipts within 25 days after the close of each
taxable quarter prescribed for each taxpayer.

VAT-taxable Sale

Zero-rated Sale of
Service

1. There is an actual or
deemed sale, barter,
exchange of goods or
properties for a
valuable.

1. The service is
performed in the
Philippines.

2. Sale is in the course

of trade or business or
exercise of profession
in the Philippines.

2. The service falls

under any of the
categories provided in
Section 108(B).

3. The goods or
properties are located
within the Philippines.

3. It is paid for in
acceptable foreign
currency in accordance
with the regulations of
the BSP.

4. The transaction
should not be a VAT
zero-rated or a VATexempt transaction.

4. The recipient of
such services is doing
business outside the
Philippines.

VAT-Exempt
Transactions

PERCENTAGE TAX
1. Define Percentage Tax
Percentage Tax is a tax imposed at every stage of
the distribution process on the sale, barter, or exchange or
lease of goods or properties and on the performance of
service in the course of trade or business or on the
importation of goods, whether for business or non-business.
2. What is the current Non-Vat rate?
3%

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3. What are subject to Percentage Tax?

(1) Domestic Carriers and Keepers of Garages (land
transportation) - 3%
(2) International Carriers (air/shipping doing business
in PH) - 3%
(3) Franchise (radio/tv broadcasting annual gross
receipts do not exceed 10M) - 3% / Gas/Water Utilities - 2%
(4) Overseas Dispatch, Message or Conversation
originating from the PH (telecommunication) - 10%
Exemptions: Government / Diplomatic Services / International
Organizations / News Services
(5) Other Non-Bank Finance Intermediaries
(Pawnshops) - 5%
(6) Life Insurance Premiums - 5%
(7) Amusement Taxes
cockpits - 18%
cabarets, clubs - 18%
boxing exhibitions - 10%
(World or Oriental Championship, 1
of the contender Filipino citizen, promoted by Philippines)
EXEMPT from percentage tax
professional basketball games - 15%
jai-alai and racetracks - 30%
(8) Winnings (horse race/owners of winning race
horse) - 10%
(9) Sale, Barter or Exchange of Shares of Stock listed
and traded through the Local Stock Exchange - 1/2 of 1%
4. When is the returns and payments of Percentage tax?
A quarterly return of the amount of his gross sales,
receipts or earnings shall be paid within 25 days after the end
of each taxable quarter.

EXCISE TAX
1. Define Excise Tax
Excise Tax is a tax on the privilege of engaging in the
business of selling goods or services or in the importation of
goods.
2. What are subject to Excise Tax?
(1) Excise Tax on Alcohol Products
(Distilled Spirits/Wines/Fermented Liquor)
(2) Excise Tax on Tobacco Products
(Tobacco/Cigars/Cigarettes)
(3) Excise Tax on Petroleum Products
(Manufactured OIls and other Fuels)
(4) Excise Tax on Miscellaneous Articles
(Automobiles/Non-essential Goods such as
jewellery, perfumes, yachts and other vessels intended for
pleasure or sports)
(5) Excise Tax on Mineral Products

DOCUMENTARY STAMP TAX

1. Define Documentary Stamp Tax
2. What are subject to Documentary Stamp Tax?
3. What is the purpose of Documentary Stamp Tax?
4. What is the effect of failure to Stamp Taxable Document?