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Opt extensive and overview of excise tax. dst and ctc.feb.2011

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Opt extensive and overview of excise tax. dst and ctc.feb.2011

  1. 2. <ul><li>A business tax based on given ratio between gross sales or receipts and burden imposed upon the taxpayer. (City of Manila vs. Inter-island Gas, 99 Phil. 847) </li></ul><ul><li>Business tax based on a set ratio between volume of sales and amount of the tax (Pepsi Cola vs. Mun. of Tanauan) </li></ul>(Courtesy: www.philtaxation.blogspotcom )
  2. 3. <ul><li>OPT is a direct and business tax, save those under certain instances </li></ul><ul><li>OPT by nature or OPT by VAT P1.5M threshold </li></ul><ul><li>OPT & VAT cannot apply simultaneously, not like VAT and Excise taxes </li></ul><ul><li>OPT rates & filing dates vary based on type of transaction </li></ul>(Courtesy: www.philtaxation.blogspotcom )
  3. 4. <ul><li>Small business enterprises </li></ul><ul><li>Domestic carrier & keepers of garages </li></ul><ul><li>International carriers </li></ul><ul><li>Tax on franchises </li></ul><ul><li>Payors of overseas communications services </li></ul><ul><li>Banks, non-bank financial intermediaries, & other non-bank financial intermediaries </li></ul>(Courtesy: www.philtaxation.blogspotcom )
  4. 5. <ul><li>Life insurance and agents of foreign insurance </li></ul><ul><li>Proprietors, lessees or operators of amusement places </li></ul><ul><li>Horse race winners and operators </li></ul><ul><li>Sellers of listed shares and initial public offerings of non-listed shares </li></ul>(Courtesy: www.philtaxation.blogspotcom )
  5. 6. <ul><li>Any non-VAT registered person whose sales/receipts are exempt from VAT because it did exceed P1.5M VAT threshold - 3% OPT </li></ul><ul><li>Exceptions: </li></ul><ul><ul><li>Cooperatives under CDA </li></ul></ul><ul><ul><li>Small business with gross sales/receipts not exceeding P100k – LGU jurisdiction </li></ul></ul>(Courtesy: www.philtaxation.blogspotcom )
  6. 7. <ul><li>Related topics </li></ul><ul><ul><li>Mandatory VAT registration upon reaching VAT threshold and penalties, </li></ul></ul><ul><ul><li>VAT exemptions on cooperatives, </li></ul></ul><ul><ul><li>Barangay Micro Business Enterprises (BMBEs under RA No. 9178) </li></ul></ul><ul><ul><ul><li>Assets not more than P3m, excluding land </li></ul></ul></ul><ul><ul><ul><li>Income tax exemption and reduction on other taxes </li></ul></ul></ul><ul><ul><ul><li>Registration with the City/Mun. Treasurer’s Office </li></ul></ul></ul>(Courtesy: www.philtaxation.blogspotcom )
  7. 8. <ul><ul><li>Common carrier – a 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. (Section 1732, New Civil Code) </li></ul></ul><ul><ul><li>Domestic carriers vs. International carriers </li></ul></ul><ul><ul><li>Carriers by land vs. by sea or air </li></ul></ul>(Courtesy: www.pinoytaxation.com )
  8. 9. <ul><ul><li>I. Domestic carriers – 3% of quarterly gross receipts </li></ul></ul><ul><ul><ul><li>Cars for rent or hire driven by lessee </li></ul></ul></ul><ul><ul><ul><li>Transportation contractors, including persons who transport passengers for hire, </li></ul></ul></ul><ul><ul><ul><li>Other domestic carriers by land for transport of passengers, except owners of bancas and animal-drawn two-wheeled vehicles </li></ul></ul></ul><ul><ul><ul><li>Keepers of garages </li></ul></ul></ul>(Courtesy: www.pinoytaxation.com )
  9. 10. <ul><ul><li>Application: </li></ul></ul><ul><ul><ul><li>3% of quarterly gross receipts on passengers by land; </li></ul></ul></ul><ul><ul><ul><li>12% VAT on passengers by sea or air; and </li></ul></ul></ul><ul><ul><ul><li>12% VAT on cargoes </li></ul></ul></ul><ul><ul><li>Tax Base = actual/constructive gross or minimum gross receipts, whichever is HIGHER </li></ul></ul><ul><ul><li>Gross receipts of common carriers from freight not subject to local taxes under the Local Government Code of 1991, RA No. 7160. </li></ul></ul>(Courtesy: www.pinoytaxation.com )
  10. 11. <ul><ul><li>Minimum gross receipts (RR No. 9-07 suspended) </li></ul></ul>(Courtesy: www.philtaxation.blogspotcom ) Minimum Jeepney for hire (PUJ) a. Manila & other cities PhP 2,400 b. Provincial 1,200 Public utility buses (PUB) a.Not exceeding 30 passengers 3,600 b. 30 to 50 passengers 6,000 c. Exceeding 50 passengers 7,200 Taxis a. Manila & other cities 3,600 b. Provincial 2,400
  11. 12. <ul><ul><li>II. International carriers – 3% of quarterly gross receipts </li></ul></ul><ul><ul><ul><li>International air carriers doing business in the Philippines </li></ul></ul></ul><ul><ul><ul><li>International shipping carriers doing business in the Philippines </li></ul></ul></ul><ul><ul><ul><li>Notes </li></ul></ul></ul><ul><ul><ul><ul><li>3% OPT vs. 2.5% income tax (IT) on gross receipts of NRFC international carriers & transshipment rules of IT/VAT) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Meaning of “doing business in the Phils.” </li></ul></ul></ul></ul><ul><ul><ul><ul><li>No such thing as international LAND carrier </li></ul></ul></ul></ul>(Courtesy: www.philtaxation.blogspotcom )
  12. 13. <ul><ul><li>Franchise – a special privilege or right granted by the State trough the legislature to operate a public utility such as radio/television, gas and water. </li></ul></ul><ul><ul><ul><li>3% - Non-VAT registered radio and/or TV broadcasting with annual gross receipts of the preceeding year does not exceed P10M. ( Optional VAT - Indefinite irrevocability vs. 3-year irrevocability) </li></ul></ul></ul><ul><ul><ul><li>2% - Gas and water utilities </li></ul></ul></ul><ul><ul><ul><li>12% VAT on all other franchises, unless otherwise stated. </li></ul></ul></ul>(Courtesy: www.philtaxation.blogspotcom )
  13. 14. <ul><ul><li>Overseas communication – overseas dispatch, message or conversation transmitted from the Phils. By telephone, telegraph, telewrite exchange, wireless and other communication equipment services. </li></ul></ul><ul><ul><ul><li>Rate – 10% of the amount paid </li></ul></ul></ul><ul><ul><ul><li>Person liable – PAYOR of the services </li></ul></ul></ul><ul><ul><ul><li>Obligation of the company – collect and pay to BIR within 20 days from end of quarter </li></ul></ul></ul><ul><ul><ul><li>( Query – Is text(SMS) messaging overseas covered?) </li></ul></ul></ul>(Courtesy: www.philtaxation.blogspotcom )
  14. 15. <ul><ul><ul><li>Exemptions: </li></ul></ul></ul><ul><ul><ul><li>Government or any of its political subdivisions – for the effective performance of the government </li></ul></ul></ul><ul><ul><ul><li>Diplomatic services - by virtue of international comity </li></ul></ul></ul><ul><ul><ul><li>International organizations – by virtue of treaties and reciprocity </li></ul></ul></ul><ul><ul><ul><li>News services – relative to press freedom </li></ul></ul></ul>(Courtesy: www.philtaxation.blogspotcom )
  15. 16. <ul><ul><ul><li>Basic concepts: </li></ul></ul></ul><ul><ul><ul><li>Banks – engaged in lending of funds obtained in the form of deposits. Universal; commercial; thrift-savings& loan, mortgage; rural; cooperative; & Islamic banks. </li></ul></ul></ul><ul><ul><ul><li>Quasi-banks – borrowing funds thru deposit substitutes </li></ul></ul></ul><ul><ul><ul><li>Non-bank financial intermediary </li></ul></ul></ul><ul><ul><ul><li>Other non-bank financial intermediary </li></ul></ul></ul><ul><ul><ul><li>Deposit substitutes – financing from 19 or < persons </li></ul></ul></ul><ul><ul><ul><li>Pawnshops and lending investors subject to 12% VAT </li></ul></ul></ul>(Courtesy: www.philtaxation.blogspotcom )
  16. 17. <ul><ul><ul><li>Banks and Non-bank financial intermediary(NBFI) performing quasi-banking functions – 3% of gross receipts from within the Phils. </li></ul></ul></ul><ul><ul><ul><li>Interest, commissions & discounts from lending, income from financial leasing - 5% (5 years or less maturity) / 1% - more than 5 years maturity </li></ul></ul></ul><ul><ul><ul><li>Dividend & equity shares and net income of subsidiary – 0% </li></ul></ul></ul><ul><ul><ul><li>Royalties, rental income, & other items of gross income – 7% </li></ul></ul></ul><ul><ul><ul><li>Net trading gains – 7% </li></ul></ul></ul><ul><ul><ul><li>Rule on pre-termination </li></ul></ul></ul>(Courtesy: www.philtaxation.blogspotcom )
  17. 18. <ul><ul><ul><li>Insurance – contract whereby an insurer undertakes for a consideration to indemnify insured against loss, damage or liability arising from an unknown or contingent event. (Sec. 2, Insurance Code-PD#612) </li></ul></ul></ul><ul><ul><ul><li>5% of total premiums collected – domestic/foreign life insurance doing business </li></ul></ul></ul><ul><ul><ul><li>10% of total premiums collected – authorized agent of fire, marine & miscellaneous </li></ul></ul></ul><ul><ul><ul><li>(Net premium=gross premiums - returns/reinsurance) </li></ul></ul></ul><ul><ul><ul><li>5% of premiums paid - direct property insurance </li></ul></ul></ul>(Courtesy: www.philtaxation.blogspotcom )
  18. 19. <ul><ul><ul><li>Premiums exempt from tax: </li></ul></ul></ul><ul><ul><ul><li>Refunded w/n 6mos. on account of rejection of risk or returned for other reasons; </li></ul></ul></ul><ul><ul><ul><li>Re-insurance premiums w/r tax already paid </li></ul></ul></ul><ul><ul><ul><li>Collected by a branch outside Phils. from non-resident insured, if foreign country imposed such tax on it </li></ul></ul></ul><ul><ul><ul><li>Premiums on reinsurance of insured outside Phils. w/r foreign country imposed such tax on it </li></ul></ul></ul><ul><ul><ul><li>Portions of premiums on variable contracts in excess of amounts necessary to insure lives of variable contract owners </li></ul></ul></ul>(Courtesy: www.philtaxation.blogspotcom )
  19. 20. <ul><ul><ul><li>Collected from the proprietor (if operating the same), or from operators or lessee: Quarterly gross receipts of CNBC-PBA/Jai </li></ul></ul></ul><ul><ul><ul><li>Cockpits – 18% </li></ul></ul></ul><ul><ul><ul><li>Night or day clubs – 18% </li></ul></ul></ul><ul><ul><ul><li>Boxing exhibitions – 10%. If one contender Pinoy and promoter domestic coy. w/ at least 60% Fil. equity </li></ul></ul></ul><ul><ul><ul><li>Cabarets – 18% </li></ul></ul></ul><ul><ul><ul><li>Phil. Basketball Assoc. – 15% in lieu of all OPTs of whatever nature & description (e.g. that of LGU) </li></ul></ul></ul><ul><ul><ul><li>Jai-alai & racetrack – 30%, even if no admission fees charged </li></ul></ul></ul>(Courtesy: www.philtaxation.blogspotcom )
  20. 21. <ul><ul><ul><li>Collected from the proprietor (if operating the same), or from operators or lessee: Quarterly gross receipts of CNBC-PBA/Jai </li></ul></ul></ul><ul><ul><ul><li>Cockpits – 18% </li></ul></ul></ul><ul><ul><ul><li>Night or day clubs – 18% </li></ul></ul></ul><ul><ul><ul><li>Boxing exhibitions – 10%, except if contender Pinoy and promoter domestic coy. w/ at least 60% Fil. </li></ul></ul></ul><ul><ul><ul><li>Cabarets – 18% </li></ul></ul></ul><ul><ul><ul><li>Phil. Basketball Assoc. – 15% in lieu of all OPTs of whatever nature & description (e.g. that of LGU) </li></ul></ul></ul><ul><ul><ul><li>Jai-alai & racetrack – 30%, even if no admission fees charged </li></ul></ul></ul>(Courtesy: www.philtaxation.blogspotcom )
  21. 22. <ul><ul><ul><li>Race horse winner: </li></ul></ul></ul><ul><ul><ul><li>10% of winnings or dividends for every winning ticket after deducting cost of ticket except from: </li></ul></ul></ul><ul><ul><ul><ul><li>Double, forecast/quinella and trifecta bets – 4% </li></ul></ul></ul></ul><ul><ul><ul><li>Winning horse owner: </li></ul></ul></ul><ul><ul><ul><li>10% of the prize </li></ul></ul></ul><ul><ul><ul><li>Manner of collection </li></ul></ul></ul><ul><ul><ul><li>Deducted and withheld by the operation/manager or person in charge before paying dividends/price </li></ul></ul></ul>(Courtesy: www.philtaxation.blogspotcom )
  22. 23. <ul><ul><ul><li>Barter, exchange, sale or other disposition (BESO) of listed shares thru the local stock exchange </li></ul></ul></ul><ul><ul><ul><li>½ of 1% of the gross selling price or gross value in money of consideration </li></ul></ul></ul><ul><ul><ul><li>Dealers in securities subject to NCIT </li></ul></ul></ul><ul><ul><ul><li>If unlisted shares, CGT applies </li></ul></ul></ul>(Courtesy: www.philtaxation.blogspotcom )
  23. 24. <ul><ul><ul><li>B. Initial public offering (IPO) – first public offering of shares of a closely held corp. (corp. at least 50% held by not more that 20 individual stockholders, directly or indirectly) with the LSE. </li></ul></ul></ul><ul><ul><ul><li>Rates based on proportion of shares BESO to the outstanding after IPO (Formula : IPO shares / outstanding + IPO shares) </li></ul></ul></ul><ul><ul><ul><ul><li>Up to 25% - 4% </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Over 25% & up to 33.33% - 2% </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Over 33.33% - 1% </li></ul></ul></ul></ul>(Courtesy: www.philtaxation.blogspotcom )
  24. 25. <ul><ul><ul><li>Constructive ownership for determining closely-held corp. </li></ul></ul></ul><ul><ul><ul><ul><li>Stock not owned by individuals – as being owned proportionately by its shareholders, partners or beneficiaries; </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Family and partnership ownership – as owned by family of an individual. Family includes sis/bro (half or whole) & SAD (spouse, ascendant, descendant) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Options – as if exercised and owned by option holder </li></ul></ul></ul></ul>(Courtesy: www.philtaxation.blogspotcom )
  25. 26. <ul><li>Excise taxes </li></ul><ul><li>Documentary stamp taxes (DST) </li></ul><ul><li>Community tax certificates (CTC) </li></ul>(Courtesy: www.philtaxation.blogspotcom )
  26. 27. <ul><li>Applies to goods manufacture or produced in the Phils. & those imported (e.g. sin taxes, minerals, non-essential goods, etc.) </li></ul><ul><li>In addition to VAT </li></ul><ul><li>Imposed as specific tax or ad valorem </li></ul><ul><li>Payable upon removal or production </li></ul><ul><li>Refund of excise tax on goods actually exported </li></ul><ul><li>If unpaid, a lien to goods </li></ul><ul><li>If tax-free importation is sold to non-exempt, latter becomes liable </li></ul>(Courtesy: www.philtaxation.blogspotcom )
  27. 28. <ul><li>A tax on exercise of certain rights or privileges manifested by documents evidencing such exercise, thus, not a tax on document though some may require only specific document as proof (e.g. DST on debt agreements) </li></ul><ul><li>Nonpayment of DST does not affect validity, but document inadmissible in evidence unless paid </li></ul><ul><li>Either of the parties are liable, thus, if one exempt, other held liable </li></ul><ul><li>Payment: stamp affixture, DST return & eDST </li></ul>(Courtesy: www.philtaxation.blogspotcom )
  28. 29. <ul><li>Local tax imposed by cities & municipalities on specific individuals or juridical persons domiciled in their respective area of jurisdiction. </li></ul><ul><li>Non-imprisonment for nonpayment, but fraudulent violation may imprison </li></ul><ul><li>Individual:P5.00 basic + P1.00 for every P1,000 income but not to exceed P5,000. Up to P5,005. </li></ul><ul><li>Juridical:P500 basic + P2.00 for every P5,000 worth of real property in Phils but not to exceed P10,000. Up to P10,500. </li></ul>(Courtesy: www.philtaxation.blogspotcom )
  29. 30. <ul><li>“ Taxes affects lives, care for taxes and save lives” (Courtesy:philtaxation.blogspot.com) </li></ul><ul><li>End of slides </li></ul><ul><li>Thank you! </li></ul>

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