TSN (2nd Meeting)

Case:

COMMISSIONER OF INTERNAL REVENUE vs. AICHI FORGING COMPANY OF ASIA, INC.,

G.R. No. 184823 October 6, 2010

FACTS:

Aichi forging, a VAT entity filed a claim for refund of input VAT for its zero-rated sales with the Dept. of
Finance One-Stop Inter-Agency Tax Credit and Duty Drawback Center on Sept 30, 2004. On the same
day, Aichi Forging filed a Petition for Review with the CTA for the same action. The BIR disputed the claim
and alleged that the same was filed beyond the two-year period given that 2004 was a leap year and thus
the claim should have been filed on September 29, 2004. The CIR also raised issues related to the
reckoning of the 2-year period and the simultaneous filing of the administrative and judicial claims.

● CTA partially granted the refund by reducing the leaseless claims.

● CIR filed a Motion for Reconsideration insisting that they were filed beyond the
prescriptive period in accordance to Article 13 that: 1 year = 365 days and that filing an
administrative claim is a condition precedent before a judicial claim can be filed with the CTA.

● CTA and CTA En Banc denied petition. Petitioner’s Contention:It maintains that
respondent’s (AFCAI) administrative and judicial claims for tax refund/credit were filed in violation
of Sections 112(A) and 229 of the NIRC. He posits that pursuant to Article 13 of the Civil Code,
since the year 2004 was a leap year, the filing of the claim for tax refund/credit on September 30,
2004 was beyond the two-year period, which expired on September 29, 2004. They also contend
that CTA En Banc erred in applying Section 114(A) of the NIRC in determining the start of the
two-year period as the said provision pertains to the compliance requirements in the payment of
VAT. Respondent’s Argument:Respondent claims that it is entitled to a refund/credit of its
unutilized input VAT for the period July 1, 2002 to September 30, 2002 as a matter of right
because it has

substantially complied with all the requirements provided by law.

Respondent likewise defends the CTA En Banc in applying Section 114(A) of the NIRC in computing the
prescriptive period for the claim for tax refund/credit. Respondent believes that Section 112(A) of the
NIRC must be read together with Section 114(A) of the same Code.

ISSUE:

Whether respondent’s judicial and administrative claims for tax refund/credit were filed within the two-year
prescriptive period provided in Sections 112(A) and 229 of the NIRC.

HELD:

YES, the administrative claim for tax refund/credit was filed on time because under the law, unutilized
input VAT must be claimed within 2 years after the close of the taxable quarter when the sales were
made. However, the judicial claim was prematurely filed.

In computing the two-year prescriptive period for claiming a refund/credit of unutilized input VAT, the
Second Division of the CTA applied Section 112(A) of the NIRC, which states:

SEC. 112. Refunds or Tax Credits of Input Tax. –(A) Zero-rated or Effectively Zero-rated Sales – Any VAT-
registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the
close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or
refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the
extent that such input tax has not been applied against output tax: Provided, however, That in the case of
zero-rated sales under Section 106(A)(2)(a)(1), (2) and (B) and Section 108 (B)(1) and (2), the acceptable
foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules
and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is
engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods or
properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely
attributed to any one of the transactions, it shall

be allocated proportionately on the basis of the volume of sales.Sec. 204 (c) and 229 are applied only in
instances of erroneous payment and illegal collection. In this case, the applicable law is Section 112 (A) of
NIRC. The phrase “within two (2) years x x x apply for the issuance of a tax credit certificate or refund”
under Subsection (A) of Section 112 of the NIRC refers to applications for refund/credit filed with the CIR
and not to appeals made to the CTA.

As ruled in the case of Commissioner of Internal Revenue v. Mirant Pagbilao Corporation (G.R. No.
172129, September 12, 2008) , the two-year period should be reckoned from the close of the taxable
quarter when the sales were made. In Commissioner of Internal Revenue v. Primetown Property Group,
Inc (G.R. No. 162155, August 28, 2007, 531 SCRA 436) , we said that as between the Civil Code, which
provides that a year is equivalent to 365 days, and the Administrative Code of 1987, which states that a
year is composed of 12 calendar months, it is the latter that must prevail being the more recent law,
following the legal maxim, Lex posteriori derogat priori .

Thus, applying this to the present case, the two-year period to file a claim for tax refund/credit for the
period July 1, 2002 to September 30, 2002 expired on September 30, 2004. Hence, respondent’s
administrative claim was timely filed. However, since the respondent simultaneously filed the judicial claim
with the administrative claim and did not wait for the decision of the CIR or lapse of the 120-day period.
Thus, the Court find the filing of the judicial claim premature. The premature filing of claim for refund/credit
of input VAT before the CTA warrants a dismissal in as much as no jurisdiction was acquired by the CTA.

Doctrines:

– The CIR has 120 days, from the date of the submission of the complete documents within which to
grant or deny the claim for refund/credit of input vat. In case of full or partial denial by the CIR, the
taxpayer’s recourse is to file an appeal before the CTA within 30 days from receipt of the decision of the
CIR. However, if after the 120-day period the CIR fails to act on the application for tax refund/credit, the
remedy of the taxpayer is to appeal the inaction of the CIR to CTA within 30 days.

– A taxpayer is entitled to a refund either by authority of a statute expressly granting such right, privilege,
or incentive in his favor, or under the principle of solutio indebiti requiring the return of taxes erroneously
or illegally collected. In both cases, a taxpayer must prove not only his entitlement to a refund but also his
compliance with the procedural due process.

– As between the Civil Code and the AdministrativeCode of 1987, it is the latter that must prevail being
the more recent law, following the legal maxim, Lex

posteriori derogat priori .

– The phrase “within two (2) years x x x apply for the issuance of a tax credit certificate or refund” under
Subsection (A) of Section 112 of the NIRC refers to applications for refund/credit filed with the CIR and
not to appeals made to the CTA.

Q: What’s the issue?

A: Whether or not AICHI FORGING COMPANY OF ASIA, INC., is entitled for tax credit/refund?

HELD: NO.

Q: Was the administrative claim filed on time on CIR?

A: Yes.

Q: How do you compute or reckon for two years?

A: The Administrative Code of 1987, which states that a year is composed of 12 calendar months, it is the
latter that must prevail being the more recent law, following the legal maxim, Lex posteriori derogat
priori.

Note:

Computation of a year under the:

New Civil Code = day by day, so 1 year is 365 days

Revised Administrative Code= by month, so 1 year is 12 months

Case Scenario:

Claim for Tax credit was filed on September 30, 2004. BIR contended that it was already lapsed because
it should be filed last September 29, 2004.

Held: BIR is incorrect. Following the Revised Administrative Code which is a more recent law, a year
should be computed by month, so 12 months. Thus, the claim was filed on time.

The only problem in this case because when they file at the CIR level, they also filed a Petition for Review
at the CTA. That’s why it was denied. They prematurely filed their CTA case, they did not wait for the
decision of the BIR.

Case:

Commissioner of Internal Revenue v, Benguet Corporation, G.R. Nos, 134587 and 134588, July 8,
2005

FACTS:

The transactions in question occurred during the period between 1988 and 1991. Under Sec. 99 of the
NIRC, as amended by EO No. 273 s. 1987, then in effect, any person who, in the course of trade or
business, sells, barters or exchanges goods, renders services, or engages in similar transactions and any
person who imports goods is liable for output VAT at rates of either 10% or 0% (zero-rated) depending on
the classification of the transaction under Sec. 100 of the NIRC. Persons registered under the VAT system
are allowed to recognize input VAT, or the VAT due from or paid by it in the course of its trade or business
on importation of goods or local purchases of goods or service, including lease or use of properties, from
a VAT-registered person.

On January, 1988- Benguet Corp applied for and was granted by the BIR zero-rated status on its sale of
gold to Central Bank. On August 28, 1988, BIR issued VAT Ruling No. 3788-88, which provides:

[t]he sale of gold to Central Bank is considered as export sale subject to zero-rate pursuant to
Section 100 of the Tax Code, as amended by Executive Order No. 273.

The BIR came out with at least six (6) other issuances reiterating the zero-rating of sale of gold to the
Central Bank, the latest of which is VAT Ruling No. 036-90 dated 14 February 1990. Relying on its zero-
rated status and the above issuances, Benguet Corp sold gold to the Central Bank during the period of 1
August 1989 to 31 July 1991 and entered into transactions that resulted in input VAT incurred in relation to
the subject sales of gold. It filed applications for tax refunds/credits corresponding to input VAT but their
application were either unacted upon or expressly disallowed by CIR. The express disallowance of
respondents application for refunds/credits and the issuance of deficiency assessments against it were
based on a BIR VAT Ruling No. 008-92 dated 23 January 1992 that was issued subsequent to the
consummation of the subject sales of gold to the Central Bank which provides that sales of gold to the
Central Bank shall not be considered as export sales and thus, shall be subject to 10% VAT. In
addition, BIR VAT Ruling No. 008-92 withdrew, modified, and superseded all inconsistent BIR issuances.
The relevant portions of the ruling provides, thus:

1. In general, for purposes of the term export sales only direct export sales and foreign currency
denominated sales, shall be qualified for zero-rating.

4. Local sales of goods, which by fiction of law are considered export sales (e.g., the Export Duty
Law considers sales of gold to the Central Bank of the Philippines, as export sale). This transaction
shall not be considered as export sale for VAT purposes.

....
[A]ll Orders and Memoranda issued by this Office inconsistent herewith are considered withdrawn,
modified or superseded. (Emphasis supplied)

The BIR also issued VAT Ruling No. 059-92 dated 28 April 1992 and Revenue Memorandum Order No.
22-92 which decreed that the revocation of VAT Ruling No. 3788-88 by VAT Ruling No. 008-92 would not
unduly prejudice mining companies and, thus, could be applied retroactively.
Benguet Corp’s contention: A retroactive application of BIR VAT Ruling No. 008-92 would violate Sec. 246
of the NIRC, which mandates the non-retroactivity of rulings or circulars issued by the Commissioner of
Internal Revenue that would operate to prejudice the taxpayer.

CIR’s contention:
 BIR VAT Ruling No. 008-92 may validly be given retroactive effect since it was not prejudicial to
respondent.
 The deficiency 10% that may be assessable will only be equal to 1/11 th of the amount billed to
the [Central Bank] rather than 10% thereof. In short, [respondent] may only be charged based on
the tax amount actually and technically passed on to the [Central Bank] as part of the invoiced
price.

CA Ruling:
 Respondent suffered financial damage equivalent to the sum of the disapproved claims. Had
respondent known that such sales were subject to 10% VAT, which rate was not the prevailing
rate at the time of the transactions, respondent would have passed on the cost of the input taxes
to the Central Bank.
 BIR VAT Ruling No. 008-92 cannot be given retroactive effect

ISSUE:
Whether or not Benguet Corporation’s application for refund should be granted?

HELD:
YES.

The case of ABS-CBN Broadcasting Corporation v. Court of Tax Appeals [48] involved a similar

factual milieu. There the Commissioner of Internal Revenue issued Memorandum Circular No. 4-71

revoking an earlier circular for being erroneous for lack of legal basis. When the prior circular was still in

effect, petitioner therein relied on it and consummated its transactions on the basis thereof. We held, thus:

. . . .Petitioner was no longer in a position to withhold taxes due from foreign corporations
because it had already remitted all film rentals and no longer had any control over them
when the new Circular was issued. . . .

At the time when the subject transactions were consummated, the prevailing BIR regulations relied upon

by respondent ordained that gold sales to the Central Bank were zero-rated. Respondent, in this case,

has similarly been put on the receiving end of a grossly unfair deal. Before respondent was entitled to tax

refunds or credits based on petitioners own issuances. Then suddenly, it found itself instead being made

to pay deficiency taxes with petitioners’ retroactive change in the VAT categorization of respondents’

transactions with the Central Bank. This is the sort of unjust treatment of a taxpayer which the law in Sec.

246 of the NIRC abhors and forbids.

Case: Commissioner of Internal Revenue v. SM Prime Holdings, Inc, et al, G.R, No.183505,
February 26, 2010

Facts:

In various cases, BIR sent formal demand letters to SM Prime Holdings Inc. and First Asia, for VAT
deficiency on cinema ticket sales for various years.

CIR’s contention:
 The enumeration of services subject to VAT in Section 108 of the NIRC is not exhaustive because
it covers all sales of services unless exempted by law
 The exhibition of movies by cinema operators or proprietors to the paying public, being a sale of
service, is subject to VAT.

SM Prime Holdings, Inc et al contention:

 A plain reading of Section 108 of the NIRC of 1997 shows that the gross receipts of proprietors or
operators of cinemas/theaters derived from public admission are not among the services subject
to VAT
 gross receipts from cinema/theater admission tickets were never intended to be subject to any tax
imposed by the national government

Issue: Whether gross receipts derived from admission tickets by cinema/theater operators or proprietors
are subject to 10% VAT.
Held: NO, it is not subject to VAT because a cursory reading of the foregoing provision (Section 108,
NIRC) clearly shows that the enumeration of the sale or exchange of services subject to VAT is not
exhaustive. The words, including, similar services, and shall likewise include, indicate that the
enumeration is by way of example only.

Since the activity of showing motion pictures, films or movies by cinema/ theater operators or proprietors
is not included in the enumeration, it is incumbent upon the court to the determine whether such activity
falls under the phrase similar services. The intent of the legislature must therefore be ascertained.

End of discussion in VAT. xxx

OTHER PERCENTAGE TAX (OPT)

The rule here is, if you are subject to OPT, you can never be subject to VAT.

Hindi pwedeng dalawa na, you are OPT and you are VAT.

Sec. 116. Tax on Persons Exempt from Value-added Tax (VAT).— Any person whose sales or receipts
are exempt under Section 109(BB) of this Code from the payment of value-added tax and who is not a
VAT-registered person shall pay a tax equivalent to three percent (3%) of his gross quarterly sales or
receipts: Provided, That cooperatives, and beginning January 1, 2019, self-employed and professionals
with total annual gross sales and/or gross receipts not exceeding Five hundred thousand pesos
(₱500,000) shall be exempt from the three percent (3%) gross receipts tax herein imposed.

Ito yung sinasabi kong the 3 Million threshold. Ito yun, pag hindi ka aabot ng 3 Million, 3% percentage tax.

You have to classify percentage tax into two:

1. General Rule, hindi ka aabot ng 3 million

2. Pertains to Specific Establishments or businesses that has specific rate of percentage tax, now if
na belong ka dito, you are not subject to VAT also.

Please remember, hindi ka pwedeng subjected to VAT and percentage tax. You can only either be subject
to VAT or percentage tax.

Section 117 the common carriers tax, example of common carriers (taxi, jeepney, bus), shall pay a tax
equivalent to three percent (3%) of their quarterly gross receipts.

SEC. 117. Percentage Tax on Domestic Carriers and Keepers of Garages. - Cars for rent or hire driven by
the lessee, transportation contractors, including persons who transport passengers for hire, and other
domestic carriers by land, [81] for the transport of passengers [except owners of bancas] and owners of
animal-drawn two wheeled vehicle), and keepers of garages shall pay a tax equivalent to three percent
(3%) of their quarterly gross receipts.

The gross receipts of common carriers derived from their incoming and outgoing freight shall not be
subjected to the local taxes imposed under Republic Act No. 7160, otherwise known as the Local
Government Code of 1991.

Section 118, ito yung mga international carrier.

International carrier from the Philippines to Abroad, it is VAT- Exempt, but subject to percentage tax, ito na
yun Section 118.

SEC. 118 Percentage Tax on International Carriers. - [82]

(A) International air carriers doing; business in the Philippines on their gross receipts derived from
transport of cargo from the Philippines to another country shall pay a tax of three percent (3%) of their
quarterly gross receipts.

(B) International shipping carriers doing business in the Philippines on their gross receipts derived from
transport of cargo from the Philippines to another country shall pay a tax equivalent to three percent (3%)
of their quarterly gross receipts.

Again, these are VAT-exempt pag subject to percentage tax.

Pero pag hindi ka international carrier, domestic carrier ka, tapos Philippines to abroad, you are ZERO-
RATED.

Pero if Manila-Davao, you are VAT.

Section 119, these are your tax in franchise.

SEC. 119. Tax on Franchises. - Any provision of general or special law to the contrary notwithstanding,
there shall be levied, assessed and collected in respect to all franchises on radio and/or television
broadcasting companies whose annual gross receipts of the preceding year do not exceed Ten million
pesos (P10,000.00), subject to Section 236 of this Code, a tax of three percent (3%) and on gas and
water utilities, a tax of two percent (2%) on the gross receipts derived from the business covered by the
law granting the franchise: Provided, however, That radio and television broadcasting companies referred
to in this Section shall have an option to be registered as a value-added taxpayer and pay the tax due
thereon: Provided, further, That once the option is exercised, said option shall not be irrevocable. [83]

The grantee shall file the return with, and pay the tax due thereon to the Commissioner or his duly
authorized representative, in accordance with the provisions of Section 128 of this Code, and the return
shall be subject to audit by the Bureau of Internal Revenue, any provision of any existing law to the
contrary notwithstanding.

Please take note of the rates:

a. Radio and/or television broadcasting companies whose annual gross receipts of the preceding
year do not exceed Ten million pesos (P10,000.00) – 3%
b. on gas and water utilities – 2%

Section 120 is your communication’s tax, meron pa to ngayon, like long distance.

SEC. 120. Tax on Overseas Dispatch, Message or Conversation Originating from the Philippines. -

(A) Persons Liable. - There shall be collected upon every overseas dispatch, message or conversation
transmitted from the Philippines by telephone, telegraph, telewriter exchange, wireless and other
communication equipment service, a tax of ten percent (10%) on the amount paid for such services. The
tax imposed in this Section shall be payable by the person paying for the services rendered and shall be
paid to the person rendering the services who is required to collect and pay the tax within twenty (20)
days after the end of each quarter.

(B) Exemptions. - The tax imposed by this Section shall not apply to:

(1) Government. - Amounts paid for messages transmitted by the Government of the Republic of
the Philippines or any of its political subdivisions or instrumentalities;

(2) Diplomatic Services. - Amounts paid for messages transmitted by any embassy and consular
offices of a foreign government;

(3) International Organizations. - Amounts paid for messages transmitted by a public international
organization or any of its agencies based in the Philippines enjoying privileges, exemptions and
immunities which the Government of the Philippines is committed to recognize pursuant to an
international agreement; and

(4) News Services. - Amounts paid for messages from any newspaper, press association, radio or
television newspaper, broadcasting agency, or newstickers services, to any other newspaper,
press association, radio or television newspaper broadcasting agency, or newsticker service or to
a bona fide correspondent, which messages deal exclusively with the collection of news items for,
or the dissemination of news item through, public press, radio or television broadcasting or a
newsticker service furnishing a general news service similar to that of the public press.

Section 121 very important, tax on bank

SEC. 121. Tax on Banks and Non-Bank Financial Intermediaries Performing Quasi- Banking
Functions. - There shall be collected a tax on a gross receipt derived from sources within the Philippines
by all banks and non-bank financial intermediaries in accordance with the following schedule:

(a) On interest, commissions and discounts from lending activities as well as income from
financial leasing, on the basis of remaining maturities of instruments from which such receipts
are derived:
5
Maturity period is five years or less %
Maturity period is more than five years 1
 %
(b) On dividends and equity shares and net income of subsidiaries
0
%
(c) On royalties, rentals of property, real or personal, profits, from exchange and all other
items treated as gross income under Section 32 of this Code

7
(a) On interest, commissions and discounts from lending activities as well as income from %
financial leasing, on the basis of remaining maturities of instruments from which such receipts
are derived:
7
Maturity period is five years or less %
Maturity period is more than five years

(b) On dividends and equity shares and net income of subsidiaries

(c) On royalties, rentals of property, real or personal, profits, from exchange and all other
items treated as gross income under Section 32 of this Code

(d) On net trading gains within the taxable year on foreign currency, debt securities,
derivatives, and other similar financial instruments.

Provided, however, That in case the maturity period referred to in paragraph (a) is shortened
thru pre-termination, then the maturity period shall be reckoned to end as of the date of pre-
termination for purposes of classifying the transaction and the correct rate of tax shall be
applied accordingly.

Provided, finally, That the generally accepted accounting principles as may be prescribed by
the Bangko Sentral ng Pilipinas for the bank or non0bank financial intermediary performing
quasi-banking functions shall likewise be the basis for the calculation of gross receipts. [84]

Nothing in this Code shall preclude the Commissioner from imposing the same tax herein
provided on persons performing similar banking activities

So itong mga bangko, nao ba nag mode of income natin, syempre, ang interest, like in loans.
This is not subject to VAT, but subject to percentage tax under Section 121.

SEC. 122. Tax on Other Non-Bank Financial Intermediaries. [85] - There shall be collected a tax of five
percent (5%) on the gross receipts derived by other non-bank financial intermediaries doing business in
the Philippines, from interests, commissions, discounts and all other items treated as gross income under
this code.: Provided, That interests, commissions and discounts from lending activities, as well as income
from financial leasing, shall be taxed on the basis of the remaining maturities of the instruments from
which such receipts are derived, in accordance with the following schedule:

Maturity period is five years or

less 5%

Maturity period is more than 1%

five years

Provided, however, That in case the maturity period is shortened thru pre-termination, then the maturity
period shall be reckoned to end as of the date of pre-termination for purposes of classifying the
transaction and the correct rate of tax shall be applied accordingly.

Provided, finally, That the generally accepted accounting principles as may be prescribed by the
Securities and Exchange Commission for other non-bank financial intermediaries shall likewise be the
basis for the calculation of gross receipts. [86]

Nothing in this Code shall preclude the Commissioner from imposing the same tax herein provided on
persons performing similar financing activities.
SEC. 123. Tax on Life Insurance Premiums. - There shall be collected from every person, company or
corporation (except purely cooperative companies or associations) doing life insurance business of any
sort in the Philippines a tax of two percent (2%) [87] of the total premium collected, whether such premiums
are paid in money, notes, credits or any substitute for money; but premiums refunded within six (6)
months after payment on account of rejection of risk or returned for other reason to a person insured shall
not be included in the taxable receipts; nor shall any tax be paid upon reinsurance by a company that has
already paid the tax; nor upon doing business outside the Philippines on account of any life insurance of
the insured who is a nonresident, if any tax on such premium is imposed by the foreign country where the
branch is established nor upon premiums collected or received on account of any reinsurance , if the
insured, in case of personal insurance, resides outside the Philippines, if any tax on such premiums is
imposed by the foreign country where the original insurance has been issued or perfected; nor upon that
portion of the premiums collected or received by the insurance companies on variable contracts (as
defined in Section 232(2) of Presidential Decree No. 612), in excess of the amounts necessary to insure
the lives of the variable contract workers.

'Cooperative companies or associations' are such as are conducted by the members thereof with the
money collected from among themselves and solely for their own protection and not for profit.

Life insurance is not subject to VAT but they are subject to percentage tax.

SEC. 124. Tax on Agents of Foreign Insurance Companies. - Every fire, marine or miscellaneous
insurance agent authorized under the Insurance Code to procure policies of insurance as he may have
previously been legally authorized to transact on risks located in the Philippines for companies not
authorized to transact business in the Philippines shall pay a tax equal to twice the tax imposed in Section
123: Provided, That the provision of this Section shall not apply to reinsurance: Provided, however, That
the provisions of this Section shall not affect the right of an owner of property to apply for and obtain for
himself policies in foreign companies in cases where said owner does not make use of the services of any
agent, company or corporation residing or doing business in the Philippines. In all cases where owners of
property obtain insurance directly with foreign companies, it shall be the duty of said owners to report to
the Insurance Commissioner and to the Commissioner each case where insurance has been so effected,
and shall pay the tax of five percent (5%)on premiums paid, in the manner required by Section 123.

SEC. 125. Amusement Taxes. - There shall be collected from the proprietor, lessee or operator of
cockpits, cabarets, night or day clubs, boxing exhibitions, professional basketball games, Jai-Alai
and racetracks, a tax equivalent to:

(a) Eighteen percent (18%) in the case of cockpits;

(b) Eighteen percent (18%) in the case of cabarets, night or day clubs;

(c) Ten percent (10%) in the case of boxing exhibitions: Provided, however, That boxing
exhibitions wherein World or Oriental Championships in any division is at stake shall be
exempt from amusement tax: Provided, further, That at least one of the contenders for
World or Oriental Championship is a citizen[s] of the Philippines and said exhibitions are
promoted by a citizen/s of the Philippines or by a corporation or association at least sixty
percent (60%) of the capital of which is owned by such citizens;

(d) Fifteen percent (15%) in the case of professional basketball games as envisioned in
Presidential Decree No. 871: Provided, however, That the tax herein shall be in lieu of all
other percentage taxes of whatever nature and description; and

(e) Thirty percent (30%) in the case of Jai-Alai and racetracks - of their gross receipts,
irrespective, of whether or not any amount is charged for admission.

For the purpose of the amusement tax, the term 'gross receipts' embraces all the receipts of the
proprietor, lessee or operator of the amusement place. Said gross receipts also include income from
television, radio and motion picture rights, if any. A person or entity or association conducting any activity
subject to the tax herein imposed shall be similarly liable for said tax with respect to such portion of the
receipts derived by him or it.

The taxes imposed herein shall be payable at the end of each quarter and it shall be the duty of the
proprietor, lessee or operator concerned, as well as any party liable, within twenty (20) days after the end
of each quarter, to make a true and complete return of the amount of the gross receipts derived during the
preceding quarter and pay the tax due thereon.

Take note of the rate, it is higher than the VAT.

Take note, that boxing exhibitions wherein World or Oriental Championships in any division is
EXEMPT from amusement tax if:

a. That at least one of the contenders for World or Oriental Championship is a citizen[s] of
the Philippines
 b. and said exhibitions are promoted by a citizen/s of the Philippines or by a corporation or
association at least sixty percent (60%) of the capital of which is owned by such citizens;

So you need to have the two condition, in order to avail the exemption.

SEC. 126. Tax on Winnings. - Every person who wins in horse races shall pay a tax equivalent to ten
percent (10%) of his winnings or 'dividends', the tax to be based on the actual amount paid to him for
every winning ticket after deducting the cost of the ticket: Provided, That in the case of winnings from
double, forecast/quinella and trifecta bets, the tax shall be four percent (4%). In the case of owners of
winning race horses, the tax shall be ten percent (10%) of the prizes.

The tax herein prescribed shall be deducted from the 'dividends' corresponding to each winning ticket or
the 'prize' of each winning race horse owner and withheld by the operator, manager or person in charge of
the horse races before paying the dividends or prizes to the persons entitled thereto.

The operator, manager or person in charge of horse races shall, within twenty (20) days from the date
the tax was deducted and withheld in accordance with the second paragraph hereof, file a true and
correct return with the Commissioner in the manner or form to be prescribed by the Secretary of
Finance, and pay within the same period the total amount of tax so deducted and withheld.

Sec. 127. Tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded through the Local Stock
Exchange or through Initial Public Offering.—

“(A) Tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded through the Local Stock
Exchange.— There shall be levied, assessed and collected on every sale, barter, exchange or other
disposition of shares of stock listed and traded through the local stock exchange other than the sale by a
dealer in securities, a tax at the rate of six-tenths of one percent (6⁄10 of 1%) of the gross selling price or
gross value in money of the shares of stock sold, bartered, exchanged or otherwise disposed which shall
be paid by the seller or transferor.

* Tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded through the Local Stock
Exchange - a tax at the rate of six-tenths of one percent (6⁄10 of 1%) of the gross selling price. (before, it
is ½ of 1%)

Therefore, pa ang shares are traded in the stock exchange, it is not actually a transfer tax but a business
tax, a percentage tax or a stock transaction tax.