Download - Business taxes
BUSINESS TAXES
Topics:
• Nature and Concept• Types• Classifications
NATURE AND CONCEPT
Business tax is a tax imposed on the onerous
transfer of product, property, and service. Onerous
transfer means there is a monetary consideration
involved in transfer of goods or services between
the owner and the buyer. However, if the transfer
of goods or services without consideration (i.e., for
free) , the transfer is said to be gratuitous.
Transfer of Goods or Services
Onerous Transfer Subject
to Business Taxes
1.Value-added Taxes
2.Percentage Taxes
3.Excise Taxes
Gratuitous Transfer
Subject to Transfer Taxes
1. Estate Taxes
2. Donor's Taxes
TYPES OF BUSINESS TAXES
The business taxes named in the National Internal Revenue
Code (NIRC) or R.A. No.8424 , as amended, of the Philippines
are:
1.Value-added Taxes
Is a business tax imposed and collected from the seller
in the course of trade or business on every sale of properties
(real or personal) lease of goods or properties (real or
personal) or vendors of services. It is an indirect tax, thus, it
can be passed on to the buyer.
Value-Added Tax is imposed in the following:
• Sale of goods or properties in the ordinary
course of business.
• Sale of services and use or lease of properties
in the ordinary course of business.
• Importation of goods or properties whether or
not in the course of business or trade.
2. Percentage Taxes
Is a business tax imposed on persons or
entities who sell or lease goods, properties or
services in the course of trade or business
whose gross annual sales or receipts do not
exceed P750,000 and are not VAT-registered.
Percentage Tax is imposed in the following:
• Tax on domestic carriers and keepers of garages
• Tax on international carriers
• Tax on franchises
• Overseas communication tax
• Tax on banks and non-banks financial intermediaries
• Tax on finance companies
• Tax on life insurance premiums
• Tax on agents of foreign insurance companies
• Amusement taxes
• Tax on winnings
• Every stock broker who effected a sale, barter, exchange or
other disposition of shares of stock listed and traded through
the Local Stock Exchange (LSE) other than the sale by a
dealer in securities
• Corporate issuer / stock broker, whether domestic of foreign,
engaged in the sale, barter, exchange or other disposition
through Initial Public Offering (IPO) seller in secondary public
offering of shares of stock in closely held corporations
3. Excise Taxes
Is a tax imposed on goods manufactured
or produced in the Philippines for domestic
sale or consumption or any other
disposition. It is also imposed on things
that are import.
Excise tax is imposed in the following:
• Alcohol Products
Distilled Spirits (produced from sap of nipa, coconut, cassava,
camote, buri palm or sugarcane and other raw materials)
Wines (sparkling wine, champagne, still wines, fortified wines)
Fermented Liquors ( beer, lager beer, ale, porter, and other
fermented liquors except tuba, basi, tapuy and similar fermented
liquors)
• Automobiles ( whether engine or gasoline fed , 1600 cc up to over
3001 cc engine displacement)
• Non Essential Products
Jewelry, pearls, precious and semi-precious, whether real or
immitation
Perfumes and toilet waters
Yachts and other vessels for pleasure or sports
• Mineral products
Gold and Chromite
Copper
• Indigenous Petroleum
• Tobacco Products
CLASSIFICATIONS OF BUSINESS TAXES