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Who ultimately bears the burden of tax?
Who ultimately bears the burden of tax?
What happens when a taxpayer is subject to percentage tax on their gross receipts?
What happens when a taxpayer is subject to percentage tax on their gross receipts?
What is the status of a non-VAT registered taxpayer whose sales for the year exceeded P3,000,000?
What is the status of a non-VAT registered taxpayer whose sales for the year exceeded P3,000,000?
What type of tax is the percentage tax?
What type of tax is the percentage tax?
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What is the relationship between the percentage tax and the value-added tax?
What is the relationship between the percentage tax and the value-added tax?
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What is the characteristic of other percentage taxes?
What is the characteristic of other percentage taxes?
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What is the tax burden shifted to?
What is the tax burden shifted to?
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What happens when a taxpayer is subject to VAT?
What happens when a taxpayer is subject to VAT?
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What is the result of a non-VAT registered taxpayer exceeding the sales threshold?
What is the result of a non-VAT registered taxpayer exceeding the sales threshold?
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What is the characteristic of the percentage tax?
What is the characteristic of the percentage tax?
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Study Notes
Percentage Tax
- Non-VAT registered taxpayers are subject to percentage tax, which is a tax on sales of services and goods.
- Gross receipts from sales and payments on purchases from VAT registered suppliers are included in the calculation of percentage tax.
JJ's Convenience Store
- JJ's sales of processed food items: 280,000
- JJ's sales of non-food items: 220,000
- JJ's purchases of processed food items: 100,000
- JJ's purchases of non-food items: 80,000
- JJ's salaries of helpers: 48,000
- JJ's percentage tax due for the year: unknown
Second Quarter of 2018
- Accounts receivable, beginning: 50,000
- Sales on account: 100,000
- Accounts receivable, end: 75,000
- Purchase of supplies: 11,200
- Percentage tax due: unknown
VAT Registration
- If the taxpayer is VAT-registered, the VAT due is unknown
- VAT registration affects the percentage tax due
Tax Code
- Section 116 of the Tax Code as amended under the TRAIN Law: subject to 3% percentage tax
- Fruit dealer with gross receipts of 2,500,000 is subject to 3% percentage tax
- Individual taxpayer with gross sales of 100,000 is not subject to 3% percentage tax
- School bus operator with gross receipts of 3,000,000 is subject to 3% percentage tax
Percentage Tax Characteristics
- Paid on a monthly or quarterly basis
- Not allowed by law to be shifted to customers or clients
- Isolated transactions not in the course of business will not result in a liability for a percentage tax
Binay's Sales
- Sale of fresh fruits: 500,000
- Sale of fresh vegetables: 500,000
- Sale of dried fish: 500,000
- Sale of refined sugar: 500,000
- Sale of cooking oil: 500,000
- Only 50% of the above sales were collected
- Percentage tax for the year 2018: unknown
VAT and Percentage Tax
- The "burden of tax" is borne by the final consumers
- Tax burden is transferred or shifted to the consumers
- VAT-exempt taxpayers are not subject to other percentage taxes
- Taxpayer subject to percentage tax on gross receipts will also be subject to income tax on net income
Tax Classification
- Percentage tax is a business tax
- Not a transfer tax, ad valorem tax, or progressive tax
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Description
Calculate the percentage tax due for a non-VAT registered taxpayer who operates a convenience store. Given sales and purchases of processed food and non-food items, and salaries of helpers.
