On Power and Authority granted to the

Commissioner of Internal Revenue

Power to obtain information, and to summon, examine, and take testimony of
persons

NIRC of 1997
• Sec 5 (B)Commissioner’s power to obtain information from any person other than the person
whose internal revenue tax liability is subject to audit or investigation or from any office or
officer of the national and local governments, government agencies and instrumentalities.

RA 10963
• Additional provision
• - Submission of a tax incentive report by Cooperatives Development Authority to the BIR and the
DOF which includes information on the income tax, VAT and other incentives availed of. The tax
incentive report shall be included in the database created under the Tax Incentives Management
and Transparency Act (TIMTA).
EXAMINATION OF RETURNS AND DETERMINATION
OF TAX DUE
NIRC OF 1997
• Sec. 6 (A) The Commissioner or his duly authorized representative may
authorize the examination of any taxpayer and the assessment of the correct
amount of tax after a return has been filed.

TRAIN
• The Commissioner or his duly authorized representative shall have the said
authority notwithstanding any law requiring the prior authorization of any
government agency or instrumentality.
AUTHORITY TO PRESCRIBE REAL PROPERTY
VALUES
NIRC
• Sec. 6 (E) The Commissioner is authorized to determine the fair market value
of real properties.

TRAIN
• There is an automatic adjustment of the zonal valuation once every three
years through issuance of regulations by the Secretary of Finance. No
adjustment in zonal valuation shall be valid unless published or posted. The
basis of valuation, as well as records of consultation, shall be public records
available for inquiry of any taxpayer
 A. For compensation income earners
– use the Tax Table as amended

B. For Purely Self-Employed and

Professionals
ADDITIONAL • If gross sales/receipts and other non-
AMENDMENTS operating income do not exceed P3M VAT
threshold, taxpayer may opt to be taxed at:
• 1. 8% of gross sales/receipts and other non-
operating income in excess of P250,000 in
lieu of graduated rates and percentage tax ;
or
• 2. Graduated rates for compensation income
earner
C. Mixed income earners
On their compensation income – at graduated rates (Tax Table)
On their income from the conduct of trade or business or the practice of
profession :
1. If exceeding the VAT threshold – at graduated rates
2. If below the VAT threshold – (2.a)either 8% of gross sales/receipts and
other non-operating income in excess of P250,000 in lieu of the graduated rates and
percentage tax or (2.b) use the graduated rates, at the option of the taxpayer
ILLUSTRATION
Donald Mouse has the following annual income:
From his salary as CFO of Disney Co P 1,200,000
From the practice of his profession as CPA 600,000
Required: a. Compute for his income tax due:
For his compensation income = P 800,000 = P 130,000
P 400,000 x 30% = 120,000
Tax due from CI = P 250,000

For his business income = (P 600,000 ) x 8% 48,000

or from practice of profession -------------
TOTAL P 298,000
===========
Note: No need to pay Percentage Tax
PROVISIONS FOR EXCLUSIONS
AND DEDUCTIONS

Tax 13th month and other benefits amounting

to P82,000 is excluded from computation
Code of gross income

TRAIN Exemption is increased to P 90,000

This Photo by Unknown Author is licensed under CC BY-NC-SA

NIRC Provision NIRC TRAIN

Section 31 The phrase “and/or personal additional

Definition of Means the pertinent items of gross income exemptions” is removed from the
Taxable Income specified in this Code, less the deductions definition.
and/or personal and additional
exemptions, if any, authorized for such
types of income by this Code or other
special laws

Section 35 Individual taxpayers are entitled to: The Basic Personal and Exemptions of
Personal Basic Personal Exemption – individual are removed.
Exemptions
P50,000 and
The related provision on exemption
Additional Exemption – P25,000 per
certificate is removed.
qualified dependent child
PROVISIONS FOR EXCLUSIONS AND
DEDUCTIONS

Tax Code of 1997 TRAIN

• Sec. 34 (M) allowed • REPEALED

deduction of P2,400 per
year or P200 per month
on premium payments on
health insurance
• Sec 35 and 79 (D)
granted Basic Personal • REPEALED
Exemptions of P50K and
P25K as APE for each
qualified dependent
children
 PROVISIONS
FOR NIRC 1997 TRAIN
EXCLUSIONS
AND
DEDUCTIONS Sec 33 (A) FB given to
non-rank and file
Effective Jan 1, 2018,
FB given to non-rank
and file employees are
employees are subject
to 32% final tax rate. subject to 35% final tax
The grossed monetary rate. The grossed
value is determined by monetary value is
dividing the actual determined by dividing
monetary value by 68%. the actual monetary
value by 65%.

his Photo by Unknown Author is licensed under CC BY

 NIRC 1997
PASSIVE INCOME • Sec 24(B)(1) PCSO and lotto winnings are
ADJUSTMENTS exempt from the 20% final tax
• Interest income from a depository bank under
the expanded foreign currency deposit system
is subject to a final tax of 7.5%
TRAIN
• PCSO and lotto winnings exceeding P10,000
would be subject to the 20% final tax.
• Interest income from a depository bank under
the expanded foreign currency deposit system
is subject to a final tax of 15%
This Photo by Unknown Author is licensed under CC BY-NC
ADJUSTMENTS IN CORPORATE
INCOME TAX PROVISIONS
 NIRC TRAIN
NIRC Provision

Section 25 (C) Alien individuals and qualified Additional provision [Subsection (F)]
(D) (E) Filipino employees employed by The 15% preferential tax rate provided in
Preferential tax 1. Regional or area and Regional Subsection (C), (D) and (E) shall not be
rate for Operating headquarters or applicable to RHQs. ROHQs, OBUs or
individuals multinational companies (RHQs and Petroleum service contractor and
employed by RHQ, ROHQs) [Subsection (C)] subcontractor registering with the SEC after
ROHQ, OBU and 2. Offshore banking units (OBUs) January 1, 2018
Petroleum [Subsection (D)]
Contractors Capital 3. Petroleum Service contractor and But existing RHQs, ROHQs, OBUs or
and subcontractors subcontractor [Subsection (E)] Petroleum service contractor and
are subject to a preferential tax of 15% subcontractor shall continuously be entitled
final withholding tax on gross to avail of the preferential tax treatment
compensation income. for their present and future qualified
employees.
 NIRC TRAIN
NIRC Provision

Section 24 (C) Presidential Veto:

(D) (E) The President vetoed this line item under Subsection (F)
Preferential tax “But existing RHQs, ROHQs, OBUs or
rate for
Petroleum service contractor and subcontractor shall
individuals
continuously be entitled to avail of the preferential
employed by RHQ,
ROHQ, tax treatment for their present and future qualified
OBU and employees.” for being violative of equal protection
Petroleum
The President stated in his letter that, “given the
Contractors Capital
significant reduction in the personal income tax, the
and subcontractors
employees of these firms should follow the regular tax
rates applicable to other individual taxpayers.”
NIRC 1997
• Sec 27( C ) GSIS, SSS, PHIC, local water
districts and PCSO are exempt from
corporate income tax being GOCCs
• Interest income from bank under the EFCDS –
final tax of 7.5%
• CGT on S, E or D of shares not traded in
local stock exchange – 5% on first P 100,000
10% in excess
TRAIN
• Corporate income taxation of PCSO was
removed.
• Increased from 7.5% to 15%
• Increased to a flat rate of 15%.
ADMINISTRATIVE PROVISIONS/FILING
 NIRC 1997

• Sec. 51 (A) and Sec. 52 (A)

ITR TRAIN

• The ITR shall consist of a

maximum of four pages in
paper or electronic form
PAYMENT AND NIRC 1997
ASSESSMENT OF • Sec. 56 (A) (2) When a tax due is in excess
of PHP2,000, the taxpayer other than a
INCOME TAX corporation may elect to pay the tax due in
two equal installments; the first installment
FOR paid at the time the return is filed and the
second installment on or before 15 July
INDIVIDUALS following the close of the calendar year.

AND TRAIN
CORPORATIONS • The second installment of the tax due to be
paid on or before 15 October following the
close of the calendar year.
 NIRC 1997
• Sec. 58 The return for final withholding tax shall be
ON RETURN AND filed and the payment made within 25 days from the
close of each calendar quarter.

PAYMENT OF • The return for creditable withholding taxes shall be

filed and payment made not later than the last day
of the month following the close of the quarter
TAXES during which the withholding taxes was made.

WITHHELD AT TRAIN
SOURCE
• The return for both final and creditable withholding
taxes shall be filed and the payment made not later
than the last day of the month following the close of
the quarter during which the withholding was made.
ON RETURN AND PAYMENT OF TAXES WITHHELD
AT SOURCE • Sec. 58 xxxx
• The Commissioner, with the approval of the Secretary of
Finance, may require the withholding agents to pay or
deposit the taxes deducted or withheld at more frequent
NIRC 1997 intervals when necessary to protect the interest of the
government.

• The provision allowing the Commissioner of Internal

TRAIN Revenue to adjust the withholding of tax at more frequent
intervals is removed.
NIRC Provision NIRC
Section 74 Every individual subject to income tax
Declaration of shall make and file a declaration of his
Income tax for estimated income for the current taxable
individuals year on or before April 15 of the same
taxable year.
The amount of estimated income with
respect to which a declaration is required
shall be paid in four (4) installments:
 First – at time of declaration
 Second – August 15
 Third – November 15
 Fourth – on or before April 15 of the
following calendar year when the final
adjusted income tax return is due to be
filed.
TRAIN
The deadline for filing of declaration
estimated income for the current taxable year
is on or before May15 of the same taxable
year. (1701Q)
The payment of the four installments shall be:
 First – May 15
 Second – August 15
 Third – November 15
 Fourth – on or before May 15 of the
following calendar year when the final
adjusted income tax return is due to be
filed.
 NIRC Provision NIRC TRAIN
Section 34 (L) Individual taxpayers (except nonresident alien) and For GPPs and the partners comprising them, OSD may be
Optional Standard corporations may elect a standard deduction not availed only once, i.e., either by the GPP itself or by the
Deduction exceeding 40% of gross sales/ receipts or of gross partners comprising the GPP.
income, as the case may be, in lieu of itemized
allowable deductions.

Section 57 Beginning January 1, 2019, the rate of withholding tax shall

Withholding of be not less than one percent (1%) but not more than fifteen
creditable tax at percent (15%).
source

The rate of withholding tax on items of income payable

by payorcorporations/persons shall be not less than one
percent (1%) but not more than thirty-two percent (32%).

The tax withheld shall be credited against the income

tax liability of the taxpayer.
ON ESTATE TAX RATES

NIRC 1997 Sec. 84 TRAIN

Estate tax rate is fixed at

6%
 NIRC 1997
• Sec. 90 (A) (1) All transfers subject to estate tax or
those, though exempt from tax, have gross values
FILING OF exceeding PHP200,000, or regardless of the gross
value of the estate where the said estate consists of
RETURN AND registered or registrable property shall file an
estate tax return.
CPA • Certification needed for gross estate with value
exceeding P 2M.

CERTIFICATION TRAIN
OF GROSS • All transfers subject to estate tax, or regardless of
ESTATE the gross value of the estate where the said estate
consists of registered or registrable property shall
file an estate tax return.
Estate tax returns showing a gross value exceeding
PHP5m must be certified by a CPA.
Section 86 (A) The value of the net estate of a
Allowable resident or citizen is
deductions from determined by deducting the
the gross estate following from the gross
of a estate:
citizen/resident 1. Standard deduction of
₱1,000,000;
2. Expenses, losses,
indebtedness, and taxes
a.Funeral expenses
b.Judicial expenses
c. Claims against insolvent
persons
d.Unpaid mortgages
The following are the allowable
deductions from the gross estate
of a resident or citizen:
1. Standard deduction of
₱5,000,000;
2. Claims against the estate
3. Claims against insolvent
persons;
4. Unpaid mortgage or
indebtedness on property;
Section 86 (A) 3. Property previously taxed;
Allowable 4. Transfers for public use;
deductions from 5. Family home in the amount
the gross estate of ₱1,000,000;
of a 6. Medical expenses, not
citizen/resident exceeding ₱500,000;
7. Amount received by heirs
under RA No. 4917
(Retirement benefits of
private firm employees)
5. Property previously taxed;
6. Transfers for public use;
7. Family home, in the increased
amount of ₱10,000,000;
8. Amounts received by heirs
RA No. 4917 (Retirement
benefits of private firm
employees)
Section 86 (B) The value of the net estate of For Non-residents:
Allowable a non-resident is determined 1. Standard deduction in the
deductions from by deducting the following amount of ₱500,000;
the gross estate from the gross estate: 2. Value of
of a non- 1. Expenses, losses,  Claims against the estate
resident alien indebtedness, and taxes  Claims against the
in proportion to the value insolvent person
of entire gross estate  Unpaid mortgages
situated in the Philippines; In proportion to the value of
2. Property previously taxed;
the entire gross estate
3. Transfers for public use
situated in the Philippines
1. Property previously taxed;
2. Transfers for public use
 ALLOWABLE DEDUCTIONS
Section 86 (D) No deduction shall be allowed Miscellaneous provision is
Miscellaneous in the case of a non-resident deleted.
provision for not a citizen of the Philippines,
nonresidents unless the executor,
administrator, or anyone of the
heirs, as the case may be,
includes in the return required
to be filed under the Section 90
the value at the time of his
death of that part of the gross
estate of the non-resident not
situated in the Philippines.
 NIRC 1997
• Sec. 89 Written notice of death required
for gross estates exceeding PHP20,000

WRITTEN • Sec. 91 Payment of estate tax

NOTICE OF TRAIN
DEATH, • REPEALED
PAYMENT • Additional provision: An estate with
insufficient cash is allowed to pay the
estate tax due by installment within two
years from the statutory date for its
payment without civil penalty and interest.
PERIOD TO FILE GROSS ESTATE

NIRC • Sec. 90 (B) The estate tax return

1997 must be filed within six months
from the decedent’s death.
• The estate tax return must be
TRAIN filed within one year from the
LAW decedent’s death.
PAYMENT OF TAX ANTECEDENT TO THE TRANSFER
OF SHARES, BONDS, OR RIGHTS
• Sec. 97 A bank shall not allow withdrawal from a
decedent’s bank account without the Commissioner
certifying that taxes imposed thereon have already been
paid.
NIRC 1997 • The administrator of the estate or any one of the heirs
may, when authorized by the Commissioner, withdraw an
amount not exceeding PHP20,000 even without the
certification from the Commissioner that the estate taxes
have been paid.

• Banks, which has knowledge of the death of the person,

TRAIN shall allow withdrawals from a decedent’s deposit account
subject to a 6% final withholding tax.
TRANSFER FOR LESS THAN ADEQUATE AND FULL
CONSIDERATION

• Sec. 100 The amount by which the fair market

value exceeded the value of the consideration in a
NIRC 1997 transfer of property shall be deemed a gift.

• Additional provision: A sale, exchange, or other

transfer made in the ordinary course of business
TRAIN (i.e., bona fide transaction, at arm’s length, and
free from donative intent) shall be considered as
made for an adequate and full consideration.
DONOR’S TAX

• Sec. 101 (A) PHP10,000

amount of dowries or gifts
NIRC made on account of marriage
1997 are exempt from donor’s tax.

TRAIN • Repealed
 NIRC Provision NIRC
Section 106 (A)(2) The following are entitled to VAT
Zero-rated Sale of zerorating:
Goods or Properties
1. The sale and actual shipment of
goods from the Philippines to a
foreign country, irrespective of
any shipping arrangement that
may be agreed upon which may
influence or determine the
transfer of ownership of the
goods so exported and paid for
in acceptable foreign currency or
its equivalent in goods or
services, and accounted for in
accordance with the rules and
regulations of the Bangko
Sentral ng Pilipinas (BSP).
TRAIN
The following sales by VAT
registered persons shall be
subject to zero percent 0% rate:
1. The sale and actual shipment
of goods from the Philippines
to a foreign country,
irrespective of any shipping
arrangement, paid for in
acceptable foreign currency or
its equivalent in goods or
services, and accounted for in
accordance with the rules and
regulations of the Bangko
Sentral ng Pilipinas (BSP).
 NIRC Provision NIRC TRAIN
Section 106 (A)(2) 2. Sale and delivery of goods to:
Zero-rated Sale of
Goods or Properties Registered enterprises within a
separate customs territory

Registered enterprises within tourism

enterprise zones

(The above provision was vetoed by

President Duterte because this go against
the principle of limiting the VAT zero-rating
to direct exporters.)
 NIRC Provision NIRC TRAIN
Section 106 (A)(2) 2. Sale of raw materials or 3. Sale of raw materials or packaging
Zero-rated Sale of packaging materials to a materials to a nonresident buyer
Goods or Properties nonresident buyer for for delivery to a resident local
delivery to a resident local export-oriented enterprise to be
export-oriented enterprise to used in manufacturing,
be used in manufacturing, processing, packing or repacking
processing, packing or and paid for in acceptable foreign
repacking in the Philippines currency and accounted for in
of the said buyer's goods and accordance with the rules and
paid for in acceptable foreign regulations of the Bangko Sentral
currency and accounted for ng Pilipinas (BSP).
in accordance with the rules
and regulations of the
Bangko Sentral ng Pilipinas
(BSP).
 NIRC Provision NIRC TRAIN
Section 106 (A)(2) 3. Sale of raw materials or 4. Sale of raw materials or
Zero-rated Sale of packaging materials to packaging materials to
Goods or export-oriented export-oriented enterprise
Properties enterprise whose export whose export sales exceed
sales exceed seventy seventy percent (70%) of
total annual production.
percent (70%) of total
annual production.

4. Sale of gold to BSP.

 NIRC Provision NIRC TRAIN
Section 106 (A)(2) 5. Those considered export 5. Those considered export sales
Zero-rated Sale of sales under Executive Order under Executive Order No. 226,
Goods or Properties NO. 226, otherwise known otherwise known as the “Omnibus
as the “Omnibus Investment Investment Code of 1987”, and
Code of 1987”, and other other special laws; and
special laws.
6. The sale of goods, supplies,
6. The sale of goods, supplies, equipment and fuel to persons
equipment and fuel to engaged in international shipping or
persons engaged in international air transport; provided,
international shipping or that the goods, supplies, equipment
international air transport and fuel have been sold and used
operations. for international shipping or air
transport operations.
 NIRC Provision NIRC TRAIN
Section 106 (A)(2) Additional provision:
Zero-rated Sale of Items 3, 4, and 5 shall be subject to the 12% VAT and no
Goods or Properties longer be considered export sales subject to 0% VAT upon
satisfaction of the following conditions:
 There is a successful establishment and implementation
of an enhanced VAT refund system that grants refunds
of creditable input tax within 90 days from the filing of the
VAT refund application with the Bureau.

 All pending VAT refund claims as of December 31, 2017

shall be fully paid in cash by December 31, 2019.
 NIRC Provision NIRC TRAIN
Section 106 (A)(2)
Deleted provision:
Zero-rated Sale of
Goods or Properties The following shall no longer be subject to 0% VAT:

1. Sale of gold to BSP

2. Foreign-currency denominated sales

Section 108 (A) Sale or exchange of services include “sale of

Sale or exchange of
Definition of Sale or electricity by generation companies, transmission by
services include
Exchange of Services any entity including the National Grid Corporations
“sale of electricity by
of the Philippines [NGCP], and distribution
generation companies, including electric Cooperatives”.
companies,
transmission, and
distribution
companies”
 NIRC NIRC TRAIN
Provision
Section 108 5. Services performed by 5. Services performed by
(B) Zero-rated subcontractors and/or subcontractors and/or
Sale of contractors in processing, contractors in processing,
Services converting, or manufacturing converting, or manufacturing
goods for an enterprise
goods for an enterprise
whose export sales exceed
whose export sales exceed
seventy percent (70%) of total
seventy percent (70%) of
annual production are no
total annual production;
longer entitled to VAT zero-
rating.
 NIRC NIRC
Provision
Section 109 The following transactions, among others,
VAT-exempt are exempt from value-added tax:
Transactions (D) Importation of professional
instruments and implements, wearing
apparel, domestic animals, and personal
household effects (except any vehicle,
vessel, aircraft, machinery other goods
for use in the manufacture and
merchandise of any kind in commercial
quantity) belonging to persons coming to
settle in the Philippines, for their own use
and not for sale, barter or exchange,
accompanying such persons, or arriving
within ninety (90) days before or after
their arrival,
TRAIN
The following are the changes on
VAT-exempt transactions:
(D) Importation of professional
instruments and implements, tools
of trade, occupation or employment,
wearing apparel, domestic animals,
and personal and household effects
belonging to persons coming to
settle in the Philippines or Filipinos
or their families and descendants
who are now residents or citizens of
other countries, such parties
hereinafter referred to as overseas
Filipinos, in quantities and of the
class suitable to the profession,
rank or position of the persons
importing said items,
 NIRC NIRC
Provision
Section 109 Sale of real properties not
VAT-exempt primarily held for sale to
Transactions customers or held for lease
in the ordinary course of
trade or business or real
property utilized for lowcost
and socialized housing,
residential lot valued at
P1,919,500.00 and below;
house and lot, and other
residential dwellings valued
at
P3,199,200.00 and below.
TRAIN
Sale of real properties not primarily held for sale to
customers or held for lease in the ordinary course of
trade or business or real property utilized for
lowcost and socialized housing, residential lot
valued at P1,500,000.00 and below; house and lot,
and other residential dwellings valued at
P2,500,000.00 and below.
Beginning January 1, 2021:
 The VAT exemption shall not anymore apply to:
 Sale of low-cast housing
 Sale of residential lot
 The threshold selling price amount for sale of
house and lot, and other residential dwellings
shall be P2,000,000.00
NIRC Provision NIRC TRAIN
Section 109 Every 3 years, the threshold amount shall be adjusted
VAT-exempt Every 3 years, the threshold amount
to its present value using the
Transactions shall be adjusted to its present Consumer Price Index, as published by the Philippine
value using the Consumer Price Statistics Authority (PSA).
Index, as published by the National
Statistics Office.

Section 109 (Q) Lease of a residential unit with a monthly rental

VAT-exempt (Q) Lease of a residential unit with
not exceeding P15,000.00.
Transactions a monthly rental not exceeding
P12,800.00.
(U) Additional provision:
(U) Importation of fuel, goods and
supplies by persons engaged in
Xxx Provided, That the fuel, goods, and supplies shall
international shipping or air
be used for international shipping or air transport
transport operations.
operations.
NIRC Provision NIRC TRAIN
Section 109 Additional exempt transactions:
VAT-exempt
Transactions (W)Sale or lease of goods and
services to senior citizens and
person with disabilities.

(X)Transfer of property in merger or

consolidation [under Section
40(C)(2) of the NIRC/tax-free
exchange].

(Y)Association dues, membership

fees, and other assessments
and charges collected by
homeowners associations and
condominium corporations.
 NIRC Provision NIRC TRAIN

Section 109 (W) Sale or lease of goods (Z)Sale of gold to the BSP.
VAT-exempt or properties or the
Transactions performance of services (AA)Sale of drugs and medicines prescribed
other than the transactions for diabetes, high cholesterol, and
specifically mentioned as hypertension beginning January 1, 2019.
VAT-exempt, the gross
annual sales and/or receipts Now (BB) Sale or lease of goods or properties
do not exceed the amount of or the performance of services other than the
P1,919,500.00 (as transactions mentioned in the preceding
amended). paragraphs, the gross annual sales and/or
receipts do not exceed the amount of
P3,000,000.
 NIRC Provision NIRC TRAIN

Section 110 The input tax on the Amortization of input VAT shall only
(A)(2)(b) purchase of capital goods allowed until December 31, 2021.
Amortization of with a cost
Input VAT from exceeding After such date, taxpayers with unutilized
Purchases of P1,000,000.00 shall be input VAT on capital goods purchased or
Capital Goods amortized based on its useful imported shall be allowed to apply the
life or 60 months, whichever same as scheduled until fully utilized.
is shorter.
 NIRC Provision NIRC TRAIN

Section 112 The Commissioner shall  The period of granting by the

Refunds or Tax grant a refund or issue a Commissioner of refunds is decreased to
Credit of Input VAT tax credit certificate for 90 days (from 120 days) from the date of
creditable input taxes submission of complete documents in
within 120 days from the support of the application.
date of submission of
complete documents.  The granting of tax credit instead of refund
is removed.

Additional provision:
Should the Commissioner find that the grant
of refund is not proper, the Commissioner
must sate in writing the legal and factual basis
for denial.
 NIRC NIRC TRAIN
Provision
Section 112 Failure on the part The deemed denial of failure to act
Refunds orTax of the on the application is removed.
Credit of Input Commissioner to
VAT act on the Additional provision:
application within
the period Failure on the part of any official,
prescribed shall be agent, or employee of the BIR to act
deemed a denial of on the application within the ninety
the application. (90) – day period shall be punishable
under Section 269 of the Tax Code
(administrative fine and
imprisonment).
 NIRC Provision NIRC TRAIN

Section 114 (A) VAT taxpayers shall Beginning January 1, 2023, the
Return and file quarterly return filing and payment shall be done
Payment of VAT within 25 days within 25 days following the close of
following the close of each taxable quarter.
each taxable quarter,
while payment of the
VAT shall be made
on a monthly basis
upon filing of monthly
VAT declaration.
 NIRC NIRC TRAIN
Provision
Section 127 Sale, barter or exchange of shares The rate of the stock transaction
Stock of stock listed and traded through tax is increased to 6/10 of 1%
transaction tax the local stock exchange shall be
subject to a tax of ½ of 1% of the
gross selling price or gross value in
money of the shares of stock sold,
bartered, exchanged or otherwise
disposed
Hybrid Electric Vehicle – refer to a motor vehicle powered by
electric energy, with or without provision for off-vehicle
charging, in combination with gasoline, diesel or any other
motive power: provided, that, for purposes of this Act, a Hybrid
Electric Vehicle must be able to propel itself from a stationary
condition using solely electric motor.
Provided, that Hybrid Vehicles shall be taxed at fifty percent
(50%) of the applicable excise tax rates on automobiles subject
to the conditions in Section 9(E) of this regulation: Provided,
further, that in the case of imported automobiles not for sale,
the tax imposed herein shall be based on the total landed
value, including transaction value, customs duty and all other
charges.
EXEMPTION FROM EXCISE TAX
Purely electric vehicles shall be exempt from the excise tax on automobiles. Hybrid
vehicles shall be subject to fifty percent (50%) of the applicable excise tax rates on
automobiles. Prior to the removal of the automobiles from the manufacturing plant or
customs custody, the department of energy (DOE) shall determine whether the
automobiles are hybrid vehicles or purely electric vehicles, and furnish the
Commissioner of Internal Revenue, Attention: Chief, Excise Large Taxpayers
Regulatory Division (ELTRD), certified copies of the results of such examination or
indorsement to that effect.
Pick-ups
SWEETENED BEVERAGES (SBS)
-refer to non-alcoholic beverages of any
constitution (liquid, powder, or concentrates),
that are prepackaged and sealed in
accordance with the Food and Drug
Administration (FDA) standards, that contain
High Fructose Corn Syrup (HFCS) and other
caloric and/or non-caloric sweeteners added
by the manufacturers.
TYPES OF SWEETENERS
Caloric Sweetener - refers to a substance that is sweet and includes
sucrose, fructose, and glucose that produces a certain sweetness.
High Fructose Corn Syrup – refers to a sweet saccharide mixture
containing fructose and glucose which is derived from corn and added to
provide sweetness to beverages, and which includes other similar
fructose syrup preparations.
Non-Caloric Sweetener - refers to a substance that is artificially or
chemically processed that produces a certain sweetness. These are
substances which can be directly added to beverages, such as
aspartame, sucralose, saccharin, acesulfame potassium, neotame,
cyclamates and other nonnutritive sweeteners approved by the codex
alimentarius and adopted by the FDA.
 SUBJECT TO EXCISE TAX
Sweetened juice drinks;
Sweetened tea;
All carbonated beverages;
Flavored water;
Energy and sports drinks;
Other powdered drinks not classified as milk, juice, tea, and
coffee;
Cereal and grain beverages; and
Other non-alcoholic beverages that contain added sugar
NOT SUBJECT TO EXCISE TAX
All milk products
One Hundred Percent (100%) natural fruit juices w/o added
sugar/ caloric sweetener
One Hundred Percent (100%) natural vegetable juices w/o added
sugar/ caloric sweetener
Meal replacement and medically indicated beverages for oral
nutritional therapy
Ground, instant soluble and pre-packaged powdered coffee
products.
COMPUTATION OF EXCISE TAX DUE
Number of Liters
EXCISE TAX DUE = X
(Specific Tax) Excise Tax Rate
ILLUSTRATION: COMPUTATION OF EXCISE TAX

1. Carbonated Beverages
Dulce Manufacturing Corp. will remove 100 cases of
Super Cola using HFCS and non-caloric sweetener from
place of production. Each case contains 6 bottles of 1.5
liters each.
Compute for the excise tax.
SOLUTION: COMPUTATION OF EXCISE TAX
No. of Cases 100
Multiplied by no. of bottles per case x6
Total no. of bottles 600
Multiplied by contents per bottle x 1.5L
Total Volume in Liters 900L
Multiplied by Specific Tax Rate x P12.00
Total Excise Tax Due P10,800.00
Cosmetic Surgery - refers to a type of plastic surgery that aims
to improve a person’s appearance, through invasive cosmetic
procedures, surgeries, and body enhancements directed solely on
improving, altering, or enhancing the person’s appearance and
do not necessarily promote the proper functions of the body or
prevent or treat illness or disease.
 Invasive Cosmetic Procedure - refers to a
surgery that is carried out by entering the
body through the skin or through a body
cavity or anatomical opening, but with the
smallest damage possible to these
structures. Invasive Cosmetic Procedures
shall include, but not be limited to the
following:
1.Liposuction
2.Mammoplasty
3.Breastlift
4.Buccal Fat Reduction
5.Buttocks Augmentation
6.Chin Augmentation
7.Facelift/Necklift
8.Thread Lift
9.Hair Restoration/ Transplantation
10.Eyelid Surgery