unit 12 session 4

8/3/2019 Unit 12 Session 4

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UNIT 12TAXATION

Session 4


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Topics

Review of Last session

Test of baseline knowledge

The National Internal Revenue Code

Tax Procedure in the Philippines

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Review of Last session


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Test of baseline knowledge


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The National Internal Revenue Code

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REPUBLIC ACT NO. 8424

TAX REFORM ACT OF 1997


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ORGANIZATION AND FUNCTION OF THE

BUREAU OF INTERNAL REVENUE

Chief Officials of the Bureau of Internal

Revenue.

Chief to be known as Commissioner of InternalRevenue,

Four (4) assistant chiefs to be known as Deputy

Commissioners.


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ORGANIZATION AND FUNCTION OF THE

BUREAU OF INTERNAL REVENUE


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BIR Commissioner

Power of the Commissioner to Interpret Tax Laws and to

Decide Tax Cases.

Power of the Commissioner to Obtain Information, and to

Summon, Examine, and Take Testimony ofP

ersons.

Power of the Commissioner to Make assessments and

Prescribe additional Requirements for Tax Administration

and Enforcement.

Authority of the Commissioner to Delegate Power.

Duty of the Commissioner to Ensure the Provision and

Distribution of forms, Receipts, Certificates, and Appliances,

and the Acknowledgment ofPayment of Taxes.


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Agents and Deputies for Collection of

National Internal Revenue Taxes

(a) The Commissioner of Customs and his subordinates with

respect to the collection of national internal revenue taxes

on imported goods;

(b) The head of the appropriate government office and hissubordinates with respect to the collection of energy tax;

(c) Banks duly accredited by the Commissioner with respect to

receipt of payments internal revenue taxes authorized to be

made thru bank.

(d) Any officer or employee of an authorized agent bank

assigned to receive internal revenue tax payments and

transmit tax returns or documents to the Bureau of Internal

Revenue shall be subject to the same sanctions and penalties

prescribed in Sections 269 and 270 of this Code.


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Authority of Officers

Authority of Officers to Administer Oaths and Take

Testimony.

Authority of Internal Revenue Officers to Make Arrests and

Seizures.

Assignment of Internal Revenue Officers Involved in Excise

Tax Functions to Establishments Where Articles subject to

Excise Tax are Produced or Kept.

Assignment of Internal Revenue Officers and Other

Employees to Other Duties.


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Sources of Revenue considered as

National(a) Income tax;

(b) Estate and donor's taxes;

(c) Value-added tax;(d) Other percentage taxes;

(e) Excise taxes;

(f) Documentary stamp taxes; and(g) Such other taxes as are or hereafter may be

imposed and collected by the Bureau of

Internal Revenue.


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TAX ON INCOME

TAX ON INDIVIDUALSTAX ON INDIVIDUALS

TAX ON CORPORATIONSTAX ON CORPORATIONS

ESTATES AND TRUSTSESTATES AND TRUSTS


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Computations

COMPUTATION OF TAXABLE INCOME

COMPUTATION OF GROSS INCOME


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Allowable Deductions

ExpensesExpenses

LossesLosses

DepreciationDepreciation

Other Expenses associated with BusinessOther Expenses associated with Business

Donations to GovernmentDonations to Government

Donations to CharitiesDonations to Charities


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Disallowed Expenses

Personal, living or family expenses;

Any amount paid out for new buildings or for permanent

improvements, or betterments made to increase the value of

any property or estate; Any amount expended in restoring property or in making

good the exhaustion thereof for which an allowance is or has

been made; or

Premiums paid on any life insurance policy covering the life of

any officer or employee, or of any person financially

interested in any trade or business carried on by the taxpayer,

individual or corporate, when the taxpayer is directly or

indirectly a beneficiary under such policy.

Disallowed Losses from Sale of Capital Assets


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Other Topics

ACCOUNTING PERIODS AND METHODS OF

ACCOUNTING

RETURNS ANDP

AYMENT OF TAX OTHER INCOME TAX REQUIREMENTS

QUARTERLY CORPORATE INCOME TAX

ANNUAL DECLARATION AND QUARTERLYPAYMENTS OF INCOME TAXES

WITHHOLDING ON WAGES


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ESTATE TAXES

Over But Not Over The Tax shall be Plus Of the Excess

Over

P 200,000 Exempt

P 200,000 550,000 0 5% P 200,000

500,000 2,000,000 P 15,000 8% 500,000

2,000,000 5,000,000 135,000 11% 2,000,000

5,000,000 10,000,000 465,000 15% 5,000,000

10,000,000 And Over 1,215,000 20% 10,000,000


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DONORS TAX


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VALUE- ADDED TAX

Tax Imposition

Transactions with 0% rate

Transactions computed at 1/11 of totaltransaction

Exempt Transactions

Requirements


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OTHER PERCENTAGE TAXES

Tax on Persons Exempt from Value-Added Tax (VAT). = 3%

Percentage Tax on Domestic Carriers and Keepers of Garages. - =(3%)

Percentage Tax on International Carriers.= 3%

Tax on Overseas Dispatch, Message or Conversation Originating from the

Philippines. - (10%)

Tax on Life Insurance Premiums. - = 5%

Tax on Agents of Foreign Insurance Companies. - =5%

Tax on Winnings. =10%

Tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded

through the Local Stock Exchange or through Initial Public Offering.

Tiered

Tax on Franchises.

does not exceed Ten million pesos (P10,000.00),= three percent (3%)

on electric, gas and water utilities, a tax of two percent (2%)


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Tax on Banks and Non-bank Financial

Intermediaries.

On interest

Short-term maturity (non in excess of two (2) years) 5%

Medium-term maturity (over two (2) years

but not exceeding four (4) years) 3%

Long-term maturity -(1) Over four (4) years but not exceeding seven (7) years 1%

(2) Over seven (7) years 0%

On dividends 0%

On royalties, rentals of property, 5%


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Tax on Finance Companies

Short-term maturity (non in excess of two (2)

years) 5%

Medium-term maturity (over two (2) years

but not exceeding four (4) years) 3% Long-term maturity -

(1) Over four (4) years but not

exceeding seven (7) years 1%

(2) Over seven (7) years 0%


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Amusement Taxes

(a) Eighteen percent (18%) in the case of cockpits;

(b) Eighteen percent (18%) in the case of cabarets, night or day

clubs;

(c) Ten percent (10%) in the case of boxing exhibitions(d) Fifteen percent (15%) in the case of professional basketball

games as envisioned in

(e) Thirty percent (30%) in the case of Jai-Alai and racetracks of

their gross receipts, irrespective, of whether or not anyamount is charged for admission.


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EXCISE TAXES ON CERTAIN GOODS

Excise taxes apply to goods manufactured or

produced in the Philippines for domestic sales

or consumption or for any other disposition

and to things imported. The excise tax

imposed herein shall be in addition to the

value-added tax imposed


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Products subject to special excise

Tax Cigars and cigarettes,

Distilled spirits and wines

Petroleum Products

Mineral Products


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DOCUMENTARY STAMP TAX

Documentary Stamp Tax is a tax on

documents, instruments, loan agreements

and papers evidencing the acceptance,

assignment, sale or transfer of an obligation,

right or property incident thereto.

BIR form 2000BIR form 2000 -- Documentary Stamp Tax

Declaration Return


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Documentary stamp taxDocumentary stamp tax

Tax CodeSection Document TaxableUnit Tax DuePer Unit % of Unit Taxable Base

174

Debentures andCertificates ofIndebtedness

P200.00 orfractionthereof P1.50 0.75%

Face value ofDocument

175Original Issue ofShares of Stock withpar value

P200.00 orfractionthereof 2 1%

Par value ofshares of stocksactual

considerationfor the issuanceof shares ofstocks

176

Sales, Agreementsto Sell, Memorandaof Sales, Deliveriesor Transfer of Due-

bills, Certificate ofObligation, orShares orCertificates of Stock

P200.00 orfractionthereof 1.5 0.75%

Par value of

such due-bills,certificate ofobligation orstocks

179

Bank Checks, Drafts,Certificate ofDeposit not bearinginterest and otherInstruments

On eachDocument 1.5


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Documentary stamp taxDocumentary stamp tax

Tax CodeSection Document Taxable Unit

Tax DuePer Unit % of Unit Taxable Base

180

Bonds, LoanAgreements, PromissoryNotes, Bills ofExchange, Drafts,Instruments andSecurities Issued by the

Government or any ofits Instrumentalities,Deposit SubstitutesDebt Instrument,Certificates of Depositbearing interest andothers not payable on

sight or demand (except

loan agreement orpromissory notesexceeding P250,000.00for personal use orfamily use)


Face value of theinstrument/document

186 Pre-Need Plans


Value or amountof the Plan


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REMEDIES

Compromise Arrangement

Outright Payment

Distraint of Personal Property.

Levy on Real Property.

Payment within one year


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COMPLIANCE REQUIREMENTS

Maintenance and registration ofBooks of

Accounts

Registration

Prior to operation

Annual Registration

Official Receipts and Invoices

Expense Documents


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STATUTORY OFFENSES AND PENALTIES

Civil Penalties

Interest

Criminal Penalty

Other Tax Related Penalty


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ALLOTMENT OF INTERNAL REVENUE

Sharing of Taxes

Municipal

Local

National


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OVERSIGHT COMMITTEE

A Congressional Oversight Committee,

hereinafter referred to as the Committee, is

hereby constituted in accordance with the

provisions of this Code. The Committee shall

be composed of the Chairmen of theCommittee on Ways and Means of the Senate

and House Representatives and four (4)

additional members from each house, to be

designated by the Speaker of the House of

Representatives and the Senate President


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Functions of the Committee

(1) Monitor and ensure the proper implementation of

Republic Act No. 8240;

(2) Determine that the power of the Commissioner to

compromise and abate is reasonably exercised;

(3) Review the collection performance of the Bureau of

Internal Revenue; and

(4) Review the implementation of the programs of theBureau of Internal Revenue.


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Tax Procedure in thePhilippines

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Procedure/ Transactions with BIR

RegistrationRegistration InitialInitial

AnnualAnnual

Submission of ReportSubmission of Report

MonthlyMonthly

QuarterlyQuarterly

AnnualAnnual

AssessmentAssessment

StandardStandard

For ComputationFor Computation

Payment of TaxPayment of Tax

Filing of Tax FormsFiling of Tax Forms

For Business registration (RDO)For Business registration (RDO)

For tax requirementFor tax requirement


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Topics for Research

Sources of Income of an individual

CashIn- kind

Trading

Investment/ Savings

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Required

Identify the relevant income,

expenses, and allowances

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