LECTURE 7: OTHER PERCENTAGE TAXES

I. Percentage Taxes

Summary rules on Other Percentage Taxes (OPT) under R.A. 8424, as last amended by R.A. 9337

Section Tax Base Tax Rate

Tax on persons exempt from VAT (except

116 Cooperatives) and not liable to pay the other Monthly gross sales or receipts 3%
percentage taxes below.

Tax on franchises:
1. On gas and water utilities Monthly gross receipts 2%

119 2. On radio and/or television broadcasting Monthly gross receipts or pay 3%

companies with annual GR of not more than VAT at their option. Once
P10,000,000 exercised, it becomes
irrevocable.

125 Amusement taxes from operators of:

1. Boxing exhibitions Quarterly gross receipts 10%
(Exempt, if a World or Oriental championship in any division is at stake, promoted
by a Filipino citizen or Corporation, at least 60% Filipino owned, and one of the
contenders is a Filipino citizen)
2. Professional basketball games Quarterly gross receipts 15%
3. Cockpits Quarterly gross receipts 18%
4. Cabarets, night or day clubs Quarterly gross receipts 18%
5. Jai-alai and race tracks Quarterly gross receipts 30%

For the purpose of the amusement tax, the term “gross receipts” embraces all the receipts of the
proprietor, lessee or operator of the amusement place. Said gross receipts also include income
from television, radio, and motion picture rights, if any.

126 Tax on winnings  Winner of the prizes in double
forecast/quinella & trifecta bets
 Person winning not in double
forecast/quinella & trifecta bets
 Owners of winning race horses
4% of the net prize
10% of the net prize
10% of the prize

123 Tax on life insurance premium, except purely Insurance premiums collected 5%
cooperative companies or associations

124  Owners of property who obtain insurance On premiums paid 5%

directly with foreign companies
 Agents of foreign insurance companies Insurance premiums collected 10%
(fire, marine or miscellaneous insurance
agents)

127-A Tax on sale, barter or exchange of shares of stock listed and traded through the local stock
exchange (LSE), other than sale by a dealer in securities – ½ of 1% of gross selling price or gross
value in money of the shares of stock sold, bartered, exchanged or otherwise disposed of.
LECTURE 7: OTHER PERCENTAGE TAXES

127-B Tax on shares of stock sold or exchanged through the LSE in an initial public offering of shares of
stock of a closely held corporation in accordance with the proportion of shares of stock sold,
bartered or exchanged or disposed of to the total outstanding shares of stock after the listing in the
LSE:
Up to 25% 4% of GSP
Over 25% to 33 1/3% 2% of GSP
Over 33 1/3% 1% of GSP
117 Percentage tax on domestic common carriers Monthly gross receipts 3%
by land for the transport of passengers and
keepers of garages, except owners of bancas
and animal-drawn two-wheeled vehicles.

The following shall be considered per unit minimum quarterly gross receipts (for Sec. 117 only):

Manila and other Provincial

Cities
 Jeepney for hire P2,400 P1,200
 Public utility bus:

Not exceeding 30 passengers 3,600 3,600

Exceeding 30 but not exceeding 50 6,000 6,000
Exceeding 50 7,200 7,200
 Taxis 3,600 2,400
 Car for hire (with chauffeur) 3,000 3,000
 Car for hire (w/o chauffeur) 1,800 1,800

118 OPT on international carriers (air & shipping) Monthly gross receipts 3%
for the transport of both passengers & cargoes

120 Tax on overseas dispatch, message or Quarterly gross receipts from

conversation originating from the Philippines such services 10%

Exempted from Sec. 120 are: (DING)

 Diplomatic services
 International organizations
 News services
 Government

121 Tax on banks and non-bank financial Monthly gross receipts

intermediaries performing quasi-banking
functions:
a. On interests, commissions and discounts from lending activities as well as
income from financial leasing, based on remaining maturities of the instruments,
as follows:
Maturity period of more than 5 years 1%
Maturity period of 5 years or less 5%
Note: In case of pretermination, the maturity period shall be reckoned to end as
of the date of pretermination for purposes of classifying the transaction and
applying the correct rate of tax.
b. On royalties, rental of property (real or personal), profit from exchange and all
other items treated as gross income under Section 32 of the tax code. 7%
c. On trading gains within a taxable month on foreign currency, debt securities,
derivations and other similar financial instruments. 7%
d. On dividends and equity shares in the net income of subsidiaries. 0%

122 Tax on other non-bank financial intermediaries, Monthly gross receipts

LECTURE 7: OTHER PERCENTAGE TAXES

including finance companies, money changers

and pawnshops:
a. On interests, commissions and discounts from lending activities as well as
income from financial leasing, based on remaining maturities of the instruments,
as follows:
Maturity period of more than 5 years 1%
Maturity period of 5 years or less 5%
Note: In case of pretermination, the maturity period shall be reckoned to end as
of the date of pretermination for purposes of classifying the transaction and
applying the correct rate of tax.
b. On royalties, rental of property (real or personal), profit from exchange and all
other items treated as gross income under Section 32 of the tax code. 7%
c. On dividends and equity shares in the net income of subsidiaries. 0%

Return and payment of other percentage taxes

a. General rule: Every person liable to pay percentage taxes shall file a monthly return of the amount of his
gross sales, receipts or earnings and pay the tax thereon within twenty (20) days after the end of each taxable
month. The taxpayer may file a separate return for each branch or place of business, or a consolidated return
for all branches or places of business with the authorized agent bank, Revenue District Officer, Collection
Agent or duly authorized Treasurer of the City or Municipality where said business or principal place of
business is located, as the case maybe.

b. Exceptions:

 The tax on overseas dispatch, message or conversation originating from the Philippines shall be paid by
the person rendering the service within twenty (20) days after the end of each quarter.
 Amusement taxes shall be paid by the proprietor, lessee, operator or any party liable within twenty (20)
days after the end of each quarter.
 The tax on winnings shall be deducted and withheld by the operator, manager or person in charge of the
horse races and remitted to the Bureau of Internal Revenue within twenty (20) days from the date the tax
was deducted and withheld.
 The stock transaction tax of 1/2 of 1%, shall be collected by the stock broker and remitted to the Bureau
of Internal Revenue within five (5) banking days from the date of collection.
 The stock transaction tax of 4%, 2% and 1%, in case of primary offering, shall be paid by the corporation
within thirty (30) days from the date of listing of the shares of stock in the local stock exchange. In case
of secondary offering, the tax shall be collected by the stockbroker and remitted to the Bureau of Internal
Revenue within five (5) banking days from the date of collection.
 Any person retiring from a business subject to percentage tax shall notify the nearest internal revenue
officer, file his return and pay the tax due thereon within twenty (20) days after closing his business.