PERCENTAGE TAX

PERCENTAGE TAX

After this chapter, you will master

• The scope of the 3% percentage tax
• The list of services specially subject to percentage tax
• The various tax rates and exceptions on services specifically subject to percentage tax

Percentage tax

• A national tax measured by a certain percentage of the gross selling price
• or gross value in money or goods sold or bartred
• or the gross receipts derived in the sale of services

SCOPE

• Services specifically subject to percentage tax

SCOPE

• All other sales of goods, services or lease of properties other than exempt sales, provided that the seller:
• did not exceed the VAT threshold
• and is non-VAT registered

SPECIFIC PERCENTAGE TAX

• various percentage tax rates ranging from 1/2 of 1% to 30% gross receipts.
• Applies for both VAT-registered and non-VAT registered taxpayer.

SPECIFIC PERCENTAGE TAX

• Common carriers on their transport of passengers by land and keepers of garage
• International carriers on their transport of cargoes, excess baggage and mails only

SPECIFIC PERCENTAGE TAX

• Certain franchise grantees
• Telephone companies on overseas communication

SPECIFIC PERCENTAGE TAX

• Banks and non-banks financial intermediaries
• Life insurance companies
• Agents of foreign insurance companies

SPECIFIC PERCENTAGE TAX

• Certain amusement places
• Jai-Alai and cockpit operators on winnings
• Brokers in effecting sales of stocks through PSE and corporations or shareholders on initial public offerins

DOMESTIC CARRIERS

COmmon carrier

• any person, corporation, firm or association engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public.

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TAX ON BANKS AND NON-BANK

Banks

• entities engaged in the lending of funds obtained in the form of deposits

non-bank financial intermediaries

• refers to persons or entities whose principal function include the lending, investing or placement of funds