What is TRAIN?

Tax Reform
for Acceleration
and Inclusion
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Lowering the Personal Income Tax (PIT)
How much?
Under TRAIN, those with annual taxable
income below P250,000 are exempt from
paying PIT.
In addition, the first P90,000 of the 13th
month pay and other bonuses will be
exempt from income tax.
Other Updates:
Self-employed and professionals (SEPs) with
gross sales below the VAT threshold now have
the option to pay a simpler 8% flat tax in lieu
of income and percentage tax, while those
above the VAT threshold will follow the PIT
schedule.
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Passive Income Taxes

Before: Effective
▸ PCSO & Lotto Winnings – Exempt ▸ PCSO & Lotto Winnings – Taxable
above Php 10,000

▸ Interest on FCDU deposits – 7.5% ▸ FCDU deposits – 15%

▸ CGT on unlisted shares – 5% or 10% ▸ CGT on unlisted shares sold by

individuals and domestic corporations –
35%
▸ STT on listed shares – 0.50 of 1% ▸ STT on listed shares – 0.60 of 1%
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Increasing the Tax of Sugar-Sweetened Beverages

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Increasing the Excise Tax of Petroleum Products

Diesel Gasoline
The excise tax on diesel is now P2.50 per liter. The excise tax on gasoline is now P7.00 per
liter.
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Simplifying the Estate and Donor's Tax
Estate Tax
TRAIN reduces and restructures the estate tax
to a low and single tax rate of 6% based on the
net value of the estate with a standard
deduction of P5 million and exemption for the
first P10 million for the family home.
Donor Tax
TRAIN also simplifies the payment of donor’s
taxes to a single tax rate of 6% of net
donations is imposed for gifts above P250,000
yearly regardless of relationship to the donor.
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Expanding the Value-Added Tax (VAT)
New threshold
The VAT threshold is increased from P1.9
million to P3 million of gross annual sales
and/or receipts.
Vat-exempt
Under TRAIN, VAT exempt taxpayers will have
the following options:
● PIT schedule with 40% OSD on gross receipts
or gross sales plus 3% percentage tax
● PIT schedule with itemized deductions plus
3% percentage tax, or
● Flat tax of 8% on gross sales or gross
revenues in lieu of percentage tax and personal
income tax.
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Increasing the Excise Tax of Automobiles

Automobiles
TRAIN simplifies the excise tax on automobiles, but lower-priced cars
continue to be taxed at lower rates while more expensive cars are taxed at
higher rates.
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Other Changes
Sources

▸ https://www.pinoymoneytalk.com/
▸ http://www.dof.gov.ph/taxreform/index.php/
▸ https://kittelsoncarpo.com/