Taxation in the Philippines PDF

TAXATION IN THE PHILIPPINES  TAXATION Laying a tax through which the government generates income. It is a way to raise funds for government programs and services that benefit Filipino citizens. A tax is enforced as a contribution but it is proportion...

TAXATION IN THE PHILIPPINES  TAXATION Laying a tax through which the government generates income. It is a way to raise funds for government programs and services that benefit Filipino citizens. A tax is enforced as a contribution but it is proportionate to the citizen's ability to pay. It is levied on persons (who actually pay with money) and property as well as on business transactions, privileges, and benefits.  TYPES OF TAXES National Taxes – are the ones paid to the government through the Bureau of Internal Revenue. The national taxation system is based on the National Internal Revenue Code of 1997 or the Republic Act No. 8424 otherwise known as the Tax Reform Act of 1997, as amended.  TYPES OF TAXES Local Taxes – based on the local government taxation in the Philippines as stated in Republic Act 7160 or the Local Government Code of 1991, as amended. These taxes, fees, or charges are imposed by the local government units, such as provinces, cities, municipalities, and barangays.  TYPES OF NATIONAL TAXES CAPITAL GAINS TAX - is a tax imposed on gains that may have been realized by a seller from the sale, exchange, or other disposition of capital assets located in the Philippines. DOCUMENTARY STAMP TAX - tax on documents, instruments, loan agreements, and papers evidencing the acceptance, assignment, sale, or transfer of an obligation, rights, or property incident thereto. ESTATE TAX - tax on the right of the deceased person to transmit his/her estate to lawful heirs and beneficiaries at the time of death and on certain transfers which are made by law as equivalent to testamentary disposition. DONOR’S TAX - It is also a tax imposed on the gratuitous transfer of property between two or more persons who are living at the time of the transfer. INCOME TAX - tax on all annual profits made from property ownership, profession, trades or offices. It is also a tax on a person's income, emoluments, profits and the like. EXCISE TAX - 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 imported. VALUE-ADDED TAX - 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. PERCENTAGE TAX - 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 the amount required to register as VAT registered taxpayers.  TYPES OF LOCAL TAXES TRANSFER TAX - is imposed on the sale, donation, barter, or on any other mode of transferring ownership of real property. AMUSEMENT TAX - is a tax collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement. PROFESSIONAL TAX - an annual tax on each person engaged in the exercise or practice of his or her profession. TAX ON BUSINESS - imposed by cities or municipalities on businesses before they will be issued a business license or permit to start operations based on the schedule of rates prescribed by the local government code, as amended. COMMUNITY TAX - tax levied by cities or municipalities to every Filipino or alien living in the Philippines: 1. eighteen (18) years of age or over 2. who has been regularly employed on a wage or salary basis for at least thirty (30) consecutive working days during any calendar year, or who is engaged in business or occupation 3. who owns real property with an aggregate assessed value of one thousand pesos (P1,000.00) or more 4. who is required by law to file an income tax return BARANGAY CLEARANCE - collected by barangays upon issuance of barangay clearance, a document required for many government transactions. SERVICE FEES OR CHARGES - fees or charges collected by the barangays for services rendered in connection with the regulation or the use of barangay-owned properties or service facilities.