10 ‘INDIVIDUAL’

FOCUS FROM
T-R-A-I-N LAW
Mark Chito D. Fajiculay, CPA, MBA
Managing Director, Powerhouseconsultants Company (PHC)
Resource Speaker, Philippine Institute of Certified Public Accountants (PICPA)
Resident Resource Person, Inquirer Academy of Philippine Daily Inquirer
CPA Reviewer, Batangas CPA Review Center
1: THE ONLY PHP 250,000 REDUCTION
The Fact About PHP 250,000 Reduction

❑The ONLY Reduction to Gross Sales or Receipts

and Other Non-Operating Income availing 8%
optional income tax regime

❑Applicable to Self-Employed Individuals &

Professionals (SEPs) ONLY

❑NOT applicable to Mixed Income Earners (MIEs)

❑If qualified, must be reflected in BIR Form 170-Q

mathematically or procedurally and must be
considered in BIR Form 1701
2: THE INCOME TAX RATES FOR INDIVIDUALS
The Original and The ‘Incentive’ Rate
3: SIGNIFICANT CHANGES FOR SMALL THINGS
Three (3) Changes in De Minimis Benefits

❑Medical cash allowance to dependents

of employees for P1,500 per employee per
semester or P250 per month;

❑Rice subsidy of P2,000 or one sack of 50-

kilogram rice per month amounting to not
more than ₱2,000; and

❑Uniform and clothing allowance not

exceeding P6,000 per annum
4: FOUR (4) INCOME TAX EXPOSURES FOR INDIVIDUALS
Compensation Earners / Self-Employed Earners / Mixed Earners

A. Personal Income Tax for Compensation Income Earners

 4: FOUR (4) INCOME TAX EXPOSURES FOR INDIVIDUALS
Compensation Earners / Self-Employed Earners / Mixed Earners

B. Personal Income Tax for Purely Self-Employed & Professionals

I. If gross sales or receipts & other non-operating income < PHP 3M VAT threshold
 4: FOUR (4) INCOME TAX EXPOSURES FOR INDIVIDUALS
Compensation Earners / Self-Employed Earners / Mixed Earners

B. Personal Income Tax for Purely Self-Employed & Professionals

II. If gross sales or receipts & other non-operating income > PHP 3M VAT threshold
 4: FOUR (4) INCOME TAX EXPOSURES FOR INDIVIDUALS
Compensation Earners / Self-Employed Earners / Mixed Earners

C. Personal Income Tax for Mixed Income Earners

COMPENSATION INCOME BUSINESS INCOME
< PHP 3M VAT threshold

+ > PHP 3M VAT threshold

 5: THE ‘HOW’ OF AVAILING 8% INCOME TAX RATE
Five (5) Possibilities to Avail 8% Optional Income Tax Regime

NEW
❑BIR Form No. 1901 (Percentage Tax
type shall still be registered but shall
be suspended or end-dated in the BIR
tax system)
❑Initial Quarterly Percentage Tax Return
or Income Tax Return after the
commencement of new business or
practice of profession
EXISTING
❑BIR Form No. 1905
❑1ST Quarterly Percentage Tax Return
or BIR Form No. 2551-Q version 2018 as
revised
❑1ST Quarterly Income Tax Return or BIR
Form No. 1701-Q version 2018 as
revised
6: Six (6) Individuals Disqualified for 8% Income Tax
E---Va---NoVa---P---O---T

> PHP 3M
VAT
threshold
7: FAST FACTS ABOUT RR No. 11 FOR WITHHOLDING
The Seven-Eleven (7-11) Quick Guide

❑ Former 8% Withholding Tax Rate for Professionals is Superseded

❑ Summarized General Rules for Withholding Tax of Professionals
The 5% & 10% Guide on Withholding Taxes
7: FAST FACTS ABOUT RR No. 11 FOR WITHHOLDING
The Seven-Eleven (7-11) Quick Guide

❑ Submission Requirement of Sworn Declaration & COR (SD/COR)

for Professionals pursuant to 5% or 10% Withholding Tax Rates

Payee or Withholding
Income
Recipient
Agent or
Payor
BIR
❖ On or before January 15 of each year
❖ At least before payment of Professional Fee
❖ On or before January 31 of each year
❖ 15 days following the month of submission
of SD/COR of new income recipient
7: FAST FACTS ABOUT RR No. 11 FOR WITHHOLDING
The Seven-Eleven (7-11) Quick Guide

❑ Transitory Provision on Submission of Sworn Declaration & COR

(SD/COR) for Professionals for 5% or 10% Withholding Tax Rates

Payee or Withholding
Income
Recipient
Agent or
Payor
BIR
❖ On or before April 06 of this year
❖ Revised to on or before April 20

❖ On or before April 20 of this year

❖ Revised to on or before April 30
7: FAST FACTS ABOUT RR No. 11 FOR WITHHOLDING
The Seven-Eleven (7-11) Quick Guide

❑ TOP WITHHOLDING AGENTS PURSUANT TO RR No. 11-2018

i. Large Taxpayers under Revenue Regulations No. 1-98
ii. Top 20,000 corporations under Revenue Regulations No. 6-2009
iii. Top 5,000 individuals under Revenue Regulations No. 6-2009
iv. Medium Taxpayers
v. Those under Taxpayer Account Management Program (TAMP)

❑ BIR FORMS 1601-EQ, 1601-FQ, 1602 & 1603 AND PAYMENT OF TAXES
WITHHELD AT SOURCE SHALL BE MADE NOT LATER THAN THE LAST DAY
OF THE MONTH FOLLOWING THE CLOSE OF THE QUARTER

❑ QUARTERLY ALPHALIST OF PAYEES (Q-A-P) FROM MONTHLY ALPHALIST

OF PAYEES (M-A-P)
8: EVERYTHING ABOUT 8% INCOME TAX REGIME
Guide on 8% and Graduated Income Tax Regimes
8: EVERYTHING ABOUT 8% INCOME TAX REGIME
Guide on 8% and Graduated Income Tax Regimes
9: Taxpayers under Other Percentage Taxes
B-I-C-A-P F-L-O-W (Sections 117 to 127)

❑ Taxpayers Specifically Subject to Other Percentage Taxes under

Title V of the Tax Code, as amended

➢ Sec. 117 - Domestic carriers and keepers of garages

➢ Sec. 118 - International carriers
➢ Sec. 119 - Tax on Franchises
➢ Sec. 120 - Tax on overseas dispatch, message or conversation
originating from the Philippines
➢ Sec. 121 – Tax on banks and non-bank financial intermediaries
performing quasi-banking functions
➢ Sec. 122 - Tax on other non-bank financial intermediaries
9: Taxpayers under Other Percentage Taxes
B-I-C-A-P F-L-O-W (Sections 117 to 127)

❑ Taxpayers Specifically Subject to Other Percentage Taxes under

Title V of the Tax Code, as amended

➢ Sec. 123 - Tax on life insurance premiums

➢ Sec. 124 - Tax on agents of foreign insurance companies
➢ Sec. 125 - Amusement taxes
➢ Sec. 126 - Tax on Winnings
➢ 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
9: Taxpayers under Other Percentage Taxes
B-I-C-A-P F-L-O-W (Sections 117 to 127)

❑ Taxpayers Specifically Subject to Other Percentage Taxes under Title V

of the Tax Code, as amended
❖ B – Banks
❖ I – International Carriers
❖ C – Common carries by land
❖ A – Amusement taxes
❖ P – PSE sales or those listed and traded through LSE or IPO
❖ F – Franchises
❖ L – Life Insurance Premiums
❖ O – Overseas Communications
❖ W - Winnings
10: 10 FOR P10,000 RELATED TO PCSO WINNINGS
B-I-C-A-P F-L-O-W (Sections 117 to 127)

❑ PCSO and Lotto Winnings

are subject to 20% Final Tax
in Excess of PHP 10,000.
 THE END
- - - Thank You - - -
 Quezon City | Valenzuela City

Website: powerhouseconsultants.me.pn
Email: powerhouseconsultants21@gmail.com
mcdfcpa@gmail.com [MDF]

Landline: +63 2 432 2384

Mobile: +63 936 677 6241 [MDF]

Quality Solutions, Delivered.