Train Law Powerpoint
Train Law Powerpoint
Train Law Powerpoint
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
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
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
ITR TRAIN
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.
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.
Section 74 Every individual subject to income tax The deadline for filing of declaration
Declaration of shall make and file a declaration of his estimated income for the current taxable year
Income tax for estimated income for the current taxable is on or before May15 of the same taxable
individuals year on or before April 15 of the same year. (1701Q)
taxable year.
The amount of estimated income with The payment of the four installments shall be:
respect to which a declaration is required First – May 15
shall be paid in four (4) installments: Second – August 15
First – at time of declaration Third – November 15
Second – August 15 Fourth – on or before May 15 of the
Third – November 15 following calendar year when the final
Fourth – on or before April 15 of the adjusted income tax return is due to be
following calendar year when the final filed.
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.
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 The following are the allowable
Allowable resident or citizen is deductions from the gross estate
deductions from determined by deducting the of a resident or citizen:
the gross estate following from the gross 1. Standard deduction of
of a estate: ₱5,000,000;
citizen/resident 1. Standard deduction of 2. Claims against the estate
₱1,000,000; 3. Claims against insolvent
2. Expenses, losses, persons;
indebtedness, and taxes 4. Unpaid mortgage or
a.Funeral expenses indebtedness on property;
b.Judicial expenses
c. Claims against insolvent
persons
d.Unpaid mortgages
Section 86 (A) 3. Property previously taxed; 5. Property previously taxed;
Allowable 4. Transfers for public use; 6. Transfers for public use;
deductions from 5. Family home in the amount 7. Family home, in the increased
the gross estate of ₱1,000,000; amount of ₱10,000,000;
of a 6. Medical expenses, not 8. Amounts received by heirs
citizen/resident exceeding ₱500,000; RA No. 4917 (Retirement
7. Amount received by heirs benefits of private firm
under RA No. 4917 employees)
(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
TRAIN • Repealed
NIRC Provision NIRC TRAIN
Section 106 (A)(2) The following are entitled to VAT The following sales by VAT
Zero-rated Sale of zerorating: registered persons shall be
Goods or Properties subject to zero percent 0% rate:
1. The sale and actual shipment of
goods from the Philippines to a 1. The sale and actual shipment
foreign country, irrespective of of goods from the Philippines
any shipping arrangement that to a foreign country,
may be agreed upon which may irrespective of any shipping
influence or determine the arrangement, paid for in
transfer of ownership of the acceptable foreign currency or
goods so exported and paid for its equivalent in goods or
in acceptable foreign currency or services, and accounted for in
its equivalent in goods or accordance with the rules and
services, and accounted for in regulations of the Bangko
accordance with the rules and Sentral ng Pilipinas (BSP).
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
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
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