TAXATION LAW 1
 Atty. Vicente V. Cañoneo
 AMENDMENTS
 AMENDMENTS ON R.A. No. 8424 OR THE NATIONAL
NATIONAL INTERNAL
INTERNAL REVENUE
REVENUE CODE
OF 1997 AND IMPOSITION OF NEW TAXES ACCORDING TO R.A. No. 10963 OR
THE TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) LAW OF 2018
I.  Amendments
SUBJECT MATTER NIRC
Personal Income  An individual employee or self-
employed taxpayer would
normally have to pay income
tax at the rate of 5% to 32%
depending on one’s bracket.
The deductible 13th month pay
and other benefits amount to
P82,000.
Personal exemption of P50,000,
and additional exemption of
P25,000 per dependent child,
and the premium for health and
hospitalization insurance of
P2,400 per year.
Estate 5% to 32% of the net estate.
Deductions from gross estate
includes: P1,000,000 as
standard deduction, and
P1,000,000 for family home.
Donation Donor’s tax is 2-15% if the
donor and donee are related;
30% if not.
Donation of real property is not
subject to Documentary Stamp
Tax.
 Value-Added Tax  VAT threshold of P1,919,500.
(VAT)  VAT is imposed on the sale of
drugs and medicines for
diabetes, high cholesterol, and
hypertension.
 VAT exemption of residential
unit amounts to P12,800.
 VAT is imposed on association
dues, membership fees, and
other assessments and charges
collected by homeowners
GEMMA F. TIAMA
2nd Sem SY 2017-18, Sunday Class 9:00AM-12:00PM
Page 1 of 3
CODE
TRAIN
 An individual with a taxable
income of P250,000 or less is
exempted from income tax.
Those with taxable income of
above P250,000 will be subject
to the rate of 20% to 35%
effective 2018, and 15% to
35% effective 2023.
The deductible 13 th month pay
and other benefits amount to
P90,000.
Personal exemption of P50,000,
and additional exemption of
P25,000 per dependent child,
and the premium for health and
hospitalization insurance of
P2,400 per year are no longer
available.
Flat rate of 6%.
Deductions from gross estate
includes: P5,000,000 as
standard deduction, and
P10,000,000 for family home.
Single rate of 6% regardless of
the relationship between the
donor and the donee.
Donation of real property is
subject to Documentary Stamp
Tax of P15 for every P1,000.
VAT threshold of P3,000,000.
By 2019, sale of drugs and
medicines for diabetes, high
cholesterol, and hypertension
will be VAT-exempt.
 VAT exemption of residential
unit amounts to P15,000.
 Association dues, membership
fees, and other assessments
and charges collected by
homeowners associations and
 TAXATION LAW 1
 Atty. Vicente V. Cañoneo
associations and condominium
corporations.
Passive Income Interest income from foreign
currency deposits is 7.5%.
Interest income from pre-
terminated long-term deposits
is 5.20%.
PCSO winnings are exempted.
Sale of Shares of Sale of shares of stock not
Stock traded through stock exchange
is taxed by 5-10%.
Sale of shares of stock listed
and traded through Local Stock
Exchange is taxed by 1/2 of
1%.
Excise Tax
Hybrid vehicles, electric
vehicles, and pick-ups are
subject to exemption from
excise tax.
Documentary
Stamp Tax (DST)
GEMMA F. TIAMA
2nd Sem SY 2017-18, Sunday Class 9:00AM-12:00PM
Page 2 of 3
condominium corporations are
expressly VAT-exempt.
Interest income from foreign
currency deposits is 15%.
Interest income from pre-
terminated long-term deposits
is 20%.
PCSO winnings are taxed by
20% if more than P10,000.
Sale of shares of stock not
traded through stock exchange
is taxed by 15%.
Sale of shares of stock listed
and traded through Local Stock
Exchange is taxed by 6/10 of
1%.
Imposition of higher excise tax
on cigarettes, manufactured
oils (petroleum products),
mineral products and
automobiles.
Hybrid vehicles is subject to
50% of the applicable excise
tax rates. Purely electric
vehicles and pick-ups are
exempted from excise tax.
Increased DST on the following
taxable documents: original
issue of shares of stock; sales
agreement to sell, memoranda
of sales, deliveries or transfer
of due-bills, certificate of
obligation, or shares of
certificate of stock; stamp tax
on certificates of profits or
interest in property or
accumulations; bank checks,
drafts, certificates of profits or
interest in property or
accumulations; debt
instruments; bills of exchange
or drafts; acceptance of bills of
exchange; foreign bills of
exchange and letters of credit;
life insurance policies; policies
of annuities; pre-need plans;
certifications; warehouse
receipts; Jai-Alai, horse racing
tickets, lotto, or other
authenticated numbers of
 TAXATION LAW 1
 Atty. Vicente V. Cañoneo

games; bills of ladings or

receipts; proxies; powers of
attorney; lease or other hiring
agreements; mortgages,
pledges, and deeds of trust;
deeds of sale and conveyance
of real property; and charter
parties and similar instruments.

II. New Tax Provisions

SUBJECT MATTER TRAIN

Excise tax on P6.00 per liter on the use of purely caloric sweeteners, and purely
sweetened non-caloric sweeteners, or a mix of the two sweeteners.
beverages P12.00 per liter on the use of purely high fructose corn syrup or
in combination with any caloric or non-caloric sweetener.
Non-essential Excise tax of 5% is imposed on invasive cosmetic procedures
services (invasive directed solely towards improving, altering, or enhancing the
cosmetic patient’s appearance.
procedures)
Simplified tax Income Tax Returns (ITR) shall not be more than four (4) pages.
compliance The Tax Return for final and creditable withholding taxes shall be
filed quarterly instead of monthly.
Some measures for estate tax were adopted to simplify the
computation and payment which includes the following:
a. Standard deduction on actual funeral and medical
expenses were increased from P1,000,000 to P5,000,000.
b. Notice of death is no longer required.
c. CPA certification is now required only if the gross estate is
above P5,000,000 (up from P2,000,000).
d. Deadline from filing of estate tax return is now one year
from death (before, 6 months from death)
e. Bank deposits left by the decedent may be withdrawn by
the heirs subject only to 6% withholding tax. Before
certification from the BIR that estate tax has been paid
was required.
f. Beginning January 01, 2023, the filing of VAT Return and
payment of tax shall be done quarterly instead of monthly.
g. The BIR is required to act on application for VAT refund
within 90 days. Otherwise, the BIR official, agent, or
employee will be criminally liable.
h. The Financial Statements of a taxpayer should be audited
if the gross annual sales, earnings, receipts, or output
exceed P3,000,000 (up from P150,000,000).

GEMMA F. TIAMA
2nd Sem SY 2017-18, Sunday Class 9:00AM-12:00PM
Page 3 of 3