Train Law PDF

REPUBLIC ACT NO.
10963
TAX REFORM FOR

ACCELERATION AND INCLUSION
(TRAIN LAW)
Atty. Arnold A. Apdua, CPA

Resource Person
FROM THE DEPARTMENT OF FINANCE:

FROM THE DEPARTMENT OF FINANCE:

ARTICLE VI
THE LEGISLATIVE DEPARTMENT
SECTION 24. All appropriation, revenue

or tariff bills, bills authorizing increase of
the public debt, bills of local application,
and private bills shall originate
exclusively in the House of
Representatives, but the Senate may
propose or concur with amendments.

Sources of the TRAIN LAW
House Bill No. 5636 and

Senate Bill No. 1592

ARTICLE VI
THE LEGISLATIVE DEPARTMENT
SECTION 27. (1) Every bill passed by the Congress shall, before it
becomes a law, be presented to the President. If he approves the same,
he shall sign it; otherwise, he shall veto it and return the same with his
objections to the House where it originated, which shall enter the
objections at large in its Journal and proceed to reconsider it. If, after such
reconsideration, two-thirds of all the Members of such House shall agree
to pass the bill, it shall be sent, together with the objections, to the other
House by which it shall likewise be reconsidered, and if approved by two-
thirds of all the Members of that House, it shall become a law. In all such
cases, the votes of each House shall be determined by yeas or nays, and
the names of the Members voting for or against shall be entered in its
Journal. The President shall communicate his veto of any bill to the House
where it originated within thirty days after the date of receipt thereof;
otherwise, it shall become a law as if he had signed it.

(2) The President shall have the power to veto
any particular item or items in an
appropriation, revenue, or tariff bill, but the
veto shall not affect the item or items to which
he does not object.

President Duterte has vetoed certain provisions of the TRAIN.
The vetoed five line items are the following provisions:
1. Reduced income tax rate of employees of Regional

Headquarters (RHQs), Regional Operating Headquarters
(ROHQs), Offshore Banking Units (OBUs), and Petroleum
Service Contractors and Subcontractors;
2. Zero-rating of sales of goods and services to separate

customs territory and tourism enterprise zones;
3. Exemption from percentage tax of gross sales/receipts not

exceeding five hundred thousand pesos (P500,000.00);

4. Exemption of various petroleum products from
excise tax when used as input, feedstock, or as raw
material in the manufacturing of petrochemical
products, or in the refining of petroleum products, or
as replacement fuel for natural gas fired combined
cycle power plants; and
5. Earmarking of incremental tobacco taxes.

AMENDED
PROVISIONS UNDER
THE TRAIN LAW

Section 5. Power of the Commissioner to
Obtain Information and to Summon,
Examine and Take Testimony of Persons.
-The Cooperative Development Authority

shall submit to the BIR a report on tax
incentives availed of by cooperatives and to
be submitted to the Department of Finance
as database under Tax Incentives
Management and Transparency Act.

Section 6. Power of the Commissioner to
Make Assessments and Prescribe
Additional Requirements for Tax
Administration and Enforcement:
-The power of the Commissioner or his duly

authorized representative may authorize the
examination of any taxpayer and the
assessment of the correct amount of tax,
notwithstanding requiring the prior
authorization of any government agency
or instrumentality.

Authority of the Commissioner to
prescribe real property values subject
mandatory consultation with competent
appraisers both from the private and
public sectors, and with prior notice to
affected taxpayers and subject to
automatic adjustment once every three
(3) years.

Sec 24. Income Tax Rates
A. Rates of Tax on Taxable Income of
Individuals
a) Tax Schedule Effective January 1, 2018 until
December 31, 2022:
Not over P250,000 0%
Over P250,000 but not over P400,000 20% of the excess over P250,000
Over P400,000 but not over P800,000 P30,000 + 25% of the excess over
P400,000
Over P800,000 but not over P2,000,000 P130,000 + 30% of the excess over
P800,000
Over P2,000,000 but not over P8,000,000 P490,000 + 32% of the excess over
P2,000,000
Over P8,000,000 P2,410,000 + 35% of the excess over
P8,000,000

A. Rates of Tax on Taxable Income of
Individuals
a) Tax Schedule Effective January 1, 2023 and
onwards:
Not over P250,000 0%
Over P250,000 but not over 15% of the excess over P250,000
P400,000
Over P400,000 but notover P22,500 + 20% of the excess over
P800,000 P400,000
Over P800,000 but not over P102,500 + 25% of the excess
P2,000,000 over P800,000
Over P2,000,000 but not over P402,500 + 30% of the excess
P8,000,000 over P2,000,000
Over P8,000,000 P2,202,500 + 35% of the excess
over P8,000,000

b) Rate of Tax on Income of Purely Self-employed

Individuals and/or Professionals Whose Gross Sales
or Gross Receipts and Other Non-operating Income
Does Not Exceed the Value-added Tax (VAT) Threshold
as Provided in Section 109(BB). – Self-employed
individuals and/or professionals shall have the option to
avail of an eight percent (8%) tax on gross sales or gross
receipts and other non-operating income in excess of Two
hundred fifty thousand pesos (P250,000) in lieu of the
graduated income tax rates under Subsection (A)(2)(a) of
this Section and the percentage tax under Section 116 of
this Code.

(c) Rate of Tax for Mixed Income Earners. –
Taxpayers earning both compensation income
and income from business or practice of
profession shall be subject to the following
taxes:
(1) All Income from Compensation – The rates

prescribed under Subsection (A)(2)(a) of this
Section.

(c) Rate of Tax for Mixed Income Earners. –
(2) All Income from Business or Practice of Profession

–
(a) If Total Gross Sales and/or Gross receipts and

Other Non-operating Income Do Not Exceed the VAT
Threshold as Provided in Section 109(BB) of this
Code. – The rates prescribed under Subsection
(A)(2)(a) of this section on taxable income, or eight
percent (8%) income tax based on gross sales or
gross receipts and other non-operating income in lieu
of the graduated income tax rates under Subsection
(A)(2)(a) of this Section and the percentage tax under
Section 116 of this Code.

(c) Rate of Tax for Mixed Income
Earners. –
(2) All Income from Business or

Practice of Profession –
(b) If Total Gross Sales and/or Gross

Receipts and Other Non-operating
Income Exceeds the VAT Threshold as
Provided in Section 109(BB) of this
Code. – The rates prescribed under
Subsection (A)(2)(a) of this Section.

Sec 24 (B) Rate of Tax on Certain
Passive Income
Other winnings (except winnings

amounting to Ten Thousand pesos
(P10,000) or less from Philippine Charity
Sweepstakes and Lotto which shall be
exempt) which shall be imposed a final
tax of twenty percent (20%).

Sec 24 (B) Rate of Tax on Certain
Passive Income
Interest income received by an individual

taxpayer (except a nonresident
individual) from a depository bank under
the expanded foreign currency deposit
system shall be subject to a final income
tax at the rate of fifteen percent (15%) of
such interest income

Sec 24 (C) Capital Gains from Sale of
Shares of Stock not Traded in the Stock
Exchange
The provisions of Section 39(B)

notwithstanding, a final tax at the rate of
fifteen percent (15%) is hereby imposed
upon the net capital gains.

Sec 25. Tax on Nonresident Alien Individual
(F) The preferential tax treatment provided in
Subsections (C), (D), and (E) of this Section
shall not be applicable to regional headquarters
(RHQs), regional operating headquarters
(ROHQs), offshore banking units (OBUs) or
petroleum service contractors and
subcontractors registering with the Securities
and Exchange Commission (SEC) after January
1, 2018: Provided, however, That existing
RHQs/ROHQs, OBUs or petroleum service
contractors and subcontractors presently
availing of preferential tax rates for qualified
employees shall continue to be entitled to avail
of the preferential tax rate for present and future
qualified employees.
Sec 27. Rates of Income tax on Domestic
Corporations
(C) Government-owned or -Controlled

Corporations, Agencies or
Instrumentalities. - Corporate income tax
exemption of PCSO was removed.

Corporations
(D) Rates of Tax on Certain Passive

Incomes. - Interest income derived by a
domestic corporation from a depository
bank under the expanded foreign currency
deposit system shall be subject to a final
income tax at the rate of fifteen percent
(15%) of such interest income.

Corporations
(D) Rates of Tax on Certain Passive

Incomes. -
Capital Gains from the Sale of Shares of
Stock Not Traded in the Stock Exchange. -
A final tax at the rates of fifteen percent
(15%) shall be imposed on net capital gains
realized during the taxable year from the
sale
Sec 32. Gross Income
(e) 13th Month Pay and Other Benefits. – Gross

benefits received by officials and employees of
public and private entities: Provided, however,
That the total exclusion under this subparagraph
shall not exceed NINETY thousand pesos
(P90,000)

Sec 33. Special Treatment of
Fringe Benefit
(A) Imposition of Tax. – Effective January 1,
2018 and onwards, a final tax of thirty-five
percent (35%), is hereby imposed on the
grossed-up monetary value of fringe benefit.
The grossed-up monetary value of the fringe
benefit shall be determined by dividing the
actual monetary value of the fringe benefit by
sixty-five percent (65%) effective January 1,
2018 and onwards

Sec 34. Deductions from Gross
Income
(L) Optional Standard Deduction (OSD). – a

general professional partnership and the
partners comprising such partnership may avail
of the optional standard deduction only once,
either by the general professional partnership or
the partners comprising the partnership

Sec 34. Deductions from Gross
Income
(M) Premium Payments on Health and/or

Hospitalization Insurance of an Individual
Taxpayer – REPEALED.

Sec 35. Allowance of Personal
Exemption for Individual
Taxpayer - REPEALED

Sec 51. Individual Return
(2) The following individuals shall not be

required to file an income tax return:
(a) An individual whose taxable income

does not exceed Two hundred fifty
thousand pesos (P250,000) under Section
24(A)(2)(a)

(5) The income tax return (ITR) shall consist of a
maximum of four (4) pages in paper form or
electronic form, and shall only contain the
following information:
(A) Personal profile and information;
(B) Total gross sales, receipts or income from
compensation for services rendered, conduct
of trade or business or the exercise of
profession, except income subject to final tax
as provided under this Code;

(5) The income tax return (ITR) shall consist of a

maximum of four (4) pages in paper form or
electronic form, and shall only contain the
following information:
(C) Allowable deductions under this Code;
(D) Taxable income as defined in Section 31 of
this Code; and
(E) Income tax due and payable.

Sec 51-A. Substituted Filing of Income
Tax Returns by Employees Receiving
Purely Compensation Income
Individual taxpayers receiving purely compensation
income, regardless of amount, from only the employer
in the Philippines for the calendar year, the income tax
of which has been withheld correctly by the said
employer (tax due equals tax withheld) shall not be
required to file an annual income tax return. The
certificate of withholding filed by the respective
employers, duly stamped ‘received’ by the BIR, shall
be tantamount to the substituted filing of income tax
returns by said employees.

Sec 52. Corporate Returns
The income tax return shall consist of a maximum of
four (4) pages in paper form or electronic form. And
shall only contain the following information:
1. Corporate profile and information;
2. Gross sales, receipts or income from services
rendered, or conduct of trade or business,
except income subject to final tax as provided
under this Code;
3. Allowable deductions under this Code;

Sec 52. Corporate Returns
The income tax return shall consist of a maximum of
four (4) pages in paper form or electronic form. And
shall only contain the following information:
3. Taxable income as defined in Section 31 of this

Code; and
4. Income tax due and payable.
Provided, That the foregoing provisions shall not

affect the implementation of Republic Act No. 10708
or TIMTA.

Sec 56. Payment and
Assessment of Income Tax for
Individuals and Corporations
(2) Installment of Payment. - the second installment,

on or before October 15 following the close of the
calendar year.

Sec 57. Withholding of Tax at
Source
(B) Withholding of Creditable Tax at Source- That,

beginning January 1, 2019, the rate of withholding
shall not be less than one percent (1%) but not more
than fifteen percent (15%) of the income payment.

Sec 58. Returns and Payment of
Taxes Withheld at Source -
(A)Quarterly Returns and Payments of Taxes

Withheld. -
The return for final and creditable withholding
taxes shall be filed and the payment made not
later than the last day of the month following
the close of the quarter during which
withholding was made.

Sec 62. Exemption Allowed to
Estates and Trusts. - REPEALED

Sec 74. Declaration of Income Tax
for Individuals. -
(A) In General. - Except as otherwise provided in this

Section, every individual subject to income tax
under Sections 24 and 25(A) of this Title, who is
receiving self-employment income, whether it
constitutes the sole source of his income or in
combination with salaries, wages and other fixed
or determinable income, shall make and file a
declaration of his estimated income for the
current taxable year on or before May 15 of the
same taxable year

Sec 74. Declaration of Income
Tax for Individuals. -
(B) Return and Payment of Estimated Income Tax by

Individuals. - The fourth installment shall be
paid on or before May 15 of the following
calendar year when the final adjusted income tax
return is due to be filed.

Sec 84. Rates of Estate Tax. -
A tax at the rate of six percent (6%) based

on the value of such net estate.

Sec 86. Computation of Net
Estate. -
(A)Deductions Allowed to the Estate of Citizen or

a Resident. –
(1) Standard Deduction. – An amount equivalent

to Five million pesos (P5,000,000).

Sec 86. Computation of Net
Estate. -
(A)Deductions Allowed to the Estate of Citizen or

a Resident. –
(7) The Family Home - An amount equivalent to
the current fair market value of the decedent's
family home: Provided, however, That if the
said current fair market value exceeds Ten
Million pesos (P10,000,000), the excess shall
be subject to estate tax.

(B) Deductions Allowed to Non-resident
Estates
1) Standard Deduction
an amount equivalent to five hundred
thousand pesos (P500,000).

Estate Tax Returns
Requirements, Time of Filing,

and Payment

Requirements
In all cases of transfers subject to the tax

imposed herein, or regardless of the gross
value of the estate, for which a clearance from
the BIR is required as a condition precedent for
the transfer of ownership thereof in the name of
the transferee, the executor, or the
administrator, or any of the legal heirs, as the
case may be, shall file a return under oath in
duplicate

Time for Filing
The Estate Tax Return shall be filed

within one (1) year from the decedent’s
death

Payment by Installment
In case the available cash of the estate is

insufficient to pay the total estate tax due,
payment by installment shall be allowed within
two (2) years from the statutory date for its
payment without civil penalty and interest.

Payment of Tax Antecedent to the
Transfer of Shares, Bonds or Rights
If a bank has knowledge of the death of a

person, who maintained a bank deposit account
alone, or jointly with another, it shall allow any
withdrawal from the said deposit account,
subject to a final withholding tax of six
percent (6%).

Payment of Tax Antecedent to the
Transfer of Shares, Bonds or Rights
For this purpose, all withdrawal slips shall
contain a statement to the effect that all of the
joint depositors are still living at the time of
withdrawal by any one of the joint depositors
and such statement shall be under oath by the
said depositors.

Donor’s Tax
Tax Rate

Donor’s Tax
The tax for each calendar year shall be

six percent (6%) computed on the basis of the
total gifts in excess of two hundred fifty
thousand pesos (P250,000) exempt gift made
during the calendar year.

Transfer for Less Than Adequate
and Full Consideration
The amount by which the fair market
value of the property exceeded the value of the
consideration shall, for the purpose of the tax
imposed by this Chapter, be deemed a gift, and
shall be included in computing the amount of
gifts made during the calendar year.

Transfer for Less Than Adequate
and Full Consideration
Provided, however, that a sale, exchange,
or other transfer of property made in the
ordinary course of business (a transaction
which is a bona fide, at arm’s length, and free
from any donative intent), will be considered as
made for an adequate and full consideration in
money or money’s worth.

Value-added Tax on Sale of
Goods or Properties
Tax Rate

VAT
Twelve percent (12%) of the gross selling

price or gross value in money of the goods or
properties sold, bartered or exchanged, such
tax to be paid by the seller or transferor

VAT
Zero percent (0%) rate
a) Export Sales
2. Sale and delivery of goods to:
I. Registered enterprises within a
separate customs territory as provided
under special law

VAT
a) Export Sales
2) Sale and delivery of goods to:
II. Registered enterprises within tourism
enterprise zones as declared by the
Tourism Infrastructure and
Enterprise Zone Authority (TIEZA)
subject to the provisions under
Republic Act No. 9593 or the Tourism
Act of 2009.

VAT
a) Export Sales
6) The sale of goods, supplies, equipment
and fuel to persons engaged in
international shipping or international air
transport operations:

VAT
a) Export Sales
6) Provided, that the goods, supplies,
equipment and fuel shall be used for
international shipping or air transport
operations.

VAT
a) Export Sales
6) Provided, that subparagraphs (3), (4),
and (5) hereof shall be subject to the
twelve percent (12%) value-added tax
and no longer be considered export sales
subject to zero percent (0%) vat rate
upon satisfaction of the following
conditions:

VAT
a) Export Sales
6)
I. The successful establishment and
implementation of an enhanced vat
refund system that grants refunds of
creditable input tax within ninety (90)
days from the filing of the vat refund
application with the Bureau:

VAT
a) Export Sales
6)
I. Provided, that, to determine the
effectivity of item no. 1, all applications
filed from January 1, 2018 shall be
processed and must be decided within
ninety (90) days from the filing of the
vat refund application

VAT
a) Export Sales
6)
II. All pending vat refund claims as of
December 31, 2017 shall be fully paid
in cash by December 31, 2019.

VAT
a) Export Sales
6)
II. Provided, that the Department Of
Finance shall establish a Vat Refund
Center in the Bureau of Internal
Revenue (BIR) and in the Bureau Of
Customs (BOC) that will handle the
processing and granting of cash
refunds of creditable input tax.

VAT
a) Export Sales
6)
II. An amount equivalent to five percent
(5%) of the total value-added tax
collection of the BIR and the BOC
from the immediately preceding year
shall be automatically appropriated
annually and shall be treated as a
special account in the general fund or

VAT
a) Export Sales
6)
II. as trust receipts for the purpose of
funding claims for vat refund:
Provided, that any unused fund, at the

end of the year shall revert to the
general fund.

VAT
a) Export Sales
6)
II. Provided, further, that the BIR AND
BOC shall be required to submit to the
Congressional Oversight Committee
On The Comprehensive Tax Reform
Program (COCCTRP) a quarterly
report of all pending claims for refund
and any unused fund.

Value-added Tax on
Importation of Goods
Tax Rate

VAT
Twelve percent (12%) based on the total

value used by the Bureau of Customs in
determining tariff and customs duties, plus
customs duties, excise taxes, if any, and other
charges, such tax to be paid by the importer
prior to the release of such goods from customs
custody

Value-added Tax on Sale of
Services and Use or Lease of
Properties
Tax Rate

VAT
Twelve percent (12%) of gross receipts

derived from the sale or exchange of services,
including the use or lease of properties

VAT
…sales of electricity by generation

companies, transmission BY ANY ENTITY, and
distribution companies, INCLUDING
ELECTRIC COOPERATIVES;

VAT
4) Services rendered to persons engaged in
international shipping or international air
transport operations, including leases of
property for use thereof: Provided, that
these services shall be exclusively for
operation.

VAT
6) Transport of passengers and cargo by
DOMESTIC air or sea vessels from the
Philippines to a foreign country

VAT
8) Services Rendered to:
i. Registered enterprises within a separate
customs territory as provided under
special law
ii. Registered enterprises within tourism
enterprise zones as declared by the
TIEZA subject to the provisions under
Republic Act No. 9593 or the Tourism Act
of 2009

VAT
Provided, that subparagraphs (b)(1) and
(b)(5) hereof shall be subject to the
twelve percent (12%) value-added tax
and no longer be subject to zero percent
(0%) vat rate upon satisfaction of the
following conditions:

VAT
1. The successful establishment and
implementation of an enhanced vat
refund system that grants refunds of
creditable input tax within ninety (90)
days from the filing of the vat refund
application with the bureau

VAT
1. Provided, that, to determine the effectivity
of item no. 1, all applications filed from
January 1, 2018 shall be processed and
must be decided within ninety (90) days
from the filing of the vat refund application

VAT
2. All pending vat refund claims as of
December 31, 2017 shall be fully paid in
cash by December 31, 2019.

VAT
2. Provided, that the Department of Finance
shall establish a VAT Refund Center in
the Bureau of Internal Revenue (BIR) and
in the Bureau of Customs (BOC) that will
handle the processing and granting of
cash refunds of creditable input tax.

VAT
2. An amount equivalent to five percent
(5%) of the total VAT collection of the BIR
and the BOC from the immediately
preceding year shall be automatically
appropriated annually and shall be
treated as a special account in the
general fund or as trust receipts for the
purpose of funding claims for VAT refund

VAT
2. Provided, that any unused fund, at the
end of the year shall revert to the general
fund.

VAT
2. Provided, further, that the BIR and BOC
shall be required to submit to the
COCCTRP a quarterly report of all
pending claims for refund and any
unused fund.

Exempt Transactions
Transactions Exempt from

Value-Added Tax

Exempt Transactions
D. Importation of professional instruments and
implements, tools of trade, occupation or
employment, wearing apparel, domestic
animals, and personal and household effects
belonging to persons coming to settle in the
Philippines or Filipinos or their families and
descendants who are now residents or
citizens of other countries, such parties
hereinafter referred to as overseas Filipinos

Exempt Transactions
D. in quantities and of the class suitable to the
profession, rank or position of the persons
importing said items, for their own use and
not for barter or sale, accompanying such
persons, or arriving within a reasonable
time:

Exempt Transactions
D. Provided, that the Bureau of Customs may,

upon the production of satisfactory evidence
that such persons are actually coming to
settle in the Philippines and that the goods
are brought from their former place of
abode, exempt such goods from payment of
duties and taxes:

Exempt Transactions
D. Provided, further, that vehicles, vessels,

aircrafts, machineries and other similar
goods for use in manufacture, shall not fall
within this classification and shall therefore
be subject to duties, taxes and other
charges

Exempt Transactions
P. …Provided, that beginning January 1, 2021,
the VAT exemption shall only apply to sale of
real properties not primarily held for sale to
customers or held for lease in the ordinary
course of trade or business, sale of real
property utilized for socialized housing as
defined by Republic Act No. 7279, sale of
house and lot, and other residential
dwellings with selling price of not more than
two million pesos (P2,000,000)

Exempt Transactions
P. Provided, further, That every three (3) years

thereafter, the amount herein stated shall be
adjusted to its present value using the
Consumer Price Index, as published by the
PHILIPPINE STATISTICS AUTHORITY
(PSA);

Exempt Transactions
Q. Lease of a residential unit with a monthly

rental not exceeding fifteen thousand
pesos (P15,000)

Exempt Transactions
U. Importation of fuel, goods and supplies by

persons engaged in international shipping or
air transport operations: Provided, that the
fuel, goods, and supplies shall be used for
operations.

Exempt Transactions
W. Sale or lease of goods and services to

senior citizens and persons with
disabilities, as provided under Republic Act
Nos. 9994 (Expanded Senior Citizens Act of
2010) and 10754 (An Act Expanding the
Benefits and Privileges of Persons with
Disability), respectively;

Exempt Transactions
X. Transfer of property pursuant to section

40(c)(2) of the NIRC, as amended
Y. Association dues, membership fees, and

other assessments and charges collected by
homeowners associations and condominium
corporations

Exempt Transactions
Z. Sale of gold to the Bangko Sentral ng

Pilipinas
AA.Sale of drugs and medicines prescribed for

diabetes, high cholesterol, and
hypertension beginning January 1, 2019

Exempt Transactions
BB.Sale or lease of goods or properties or the

performance of services other than the
transactions mentioned in the preceding
paragraphs, the gross annual sales and/or
receipts do not exceed the amount of three
million pesos (P3,000,000)

Tax Credit
Creditable Input Tax

Creditable Input Tax
…Provided, further, that the amortization of the

input vat shall only be allowed until December
31, 2021 after which taxpayers with unutilized
input VAT on capital goods purchased or
imported shall be allowed to apply the same as
scheduled until fully utilized:

Refunds or Tax Credits of Input Tax
Period within which Refund of Input Taxes

shall be Made
Ninety (90) days from the date of submission

of the official receipts or invoices and other
documents

Period within which Refund of Input Taxes

shall be Made
Provided, that should the Commissioner find

that the grant of refund is not proper, the
Commissioner must state in writing the legal
and factual basis for the denial.

In case of full or partial denial of the claim for

tax refund the taxpayer affected may, within
thirty (30) days from the receipt of the decision
denying the claim appeal the decision with the
Court of Tax Appeals:

Provided, however, that failure on the part of

any official, agent, or employee of the BIR to act
on the application within the ninety (90)-day
period shall be punishable under Section 269 of
this Code.

VAT Return
Payment

VAT
Provided, finally, that beginning January 1,

2023, the filing and payment required under this
subsection shall be done within twenty-five
(25) days following the close of each taxable
quarter.

Withholding of VAT
Provided, that beginning January 1, 2021, the

VAT Withholding System under this subsection
shall shift from Final to a Creditable System:

Withholding of VAT
Provided, further, that the payment for lease or

use of properties or property rights to
nonresident owners shall be subject to twelve
percent (12%) withholding tax at the time of
payment.

Tax on Persons Exempt from VAT
Provided, that, cooperatives and beginning

January 1, 2019, self-employed and
professionals with total annual gross sales
and/or gross receipts not exceeding five
hundred thousand pesos (P500,000) shall be
exempt from the three percent (3%) gross
receipts tax herein imposed

Tax on Sale, Barter or
Exchange of Shares of Stock
Listed and Traded through the
Local Stock Exchange or
through Initial Public Offering
Tax Rate

There shall be levied, assessed and collected
on every sale, barter, exchange, or other
disposition of shares of stock listed and traded
through the local stock exchange other than the
sale by a dealer in securities, a tax at the rate of
six-tenths of one percent (6/10 of 1%) of the
gross selling price or gross value in money of
the shares of stock sold, bartered, exchanged
or otherwise disposed which shall be paid by
the seller or transferor.

Contact Details:
Email: arnoldapdua@gmail.com
Address: Unit 78 Zeta Building
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REPUBLIC ACT NO.

TAX REFORM FOR

Atty. Arnold A. Apdua, CPA

Atty. Arnold A. Apdua, CPA

Atty. Arnold A. Apdua, CPA

SECTION 24. All appropriation, revenue

Atty. Arnold A. Apdua, CPA

House Bill No. 5636 and

Atty. Arnold A. Apdua, CPA

Atty. Arnold A. Apdua, CPA

Atty. Arnold A. Apdua, CPA

1. Reduced income tax rate of employees of Regional

2. Zero-rating of sales of goods and services to separate

3. Exemption from percentage tax of gross sales/receipts not

Atty. Arnold A. Apdua, CPA

5. Earmarking of incremental tobacco taxes.

Atty. Arnold A. Apdua, CPA

Atty. Arnold A. Apdua, CPA

-The Cooperative Development Authority

Atty. Arnold A. Apdua, CPA

-The power of the Commissioner or his duly

Atty. Arnold A. Apdua, CPA

Atty. Arnold A. Apdua, CPA

Atty. Arnold A. Apdua, CPA

Atty. Arnold A. Apdua, CPA

b) Rate of Tax on Income of Purely Self-employed

Atty. Arnold A. Apdua, CPA

(1) All Income from Compensation – The rates

Atty. Arnold A. Apdua, CPA

(2) All Income from Business or Practice of Profession

(a) If Total Gross Sales and/or Gross receipts and

Atty. Arnold A. Apdua, CPA

(2) All Income from Business or

(b) If Total Gross Sales and/or Gross

Atty. Arnold A. Apdua, CPA

Other winnings (except winnings

Atty. Arnold A. Apdua, CPA

Interest income received by an individual

Atty. Arnold A. Apdua, CPA

The provisions of Section 39(B)

Atty. Arnold A. Apdua, CPA

(C) Government-owned or -Controlled

Atty. Arnold A. Apdua, CPA

(D) Rates of Tax on Certain Passive

Atty. Arnold A. Apdua, CPA

(D) Rates of Tax on Certain Passive

(e) 13th Month Pay and Other Benefits. – Gross

Atty. Arnold A. Apdua, CPA

Atty. Arnold A. Apdua, CPA

(L) Optional Standard Deduction (OSD). – a

Atty. Arnold A. Apdua, CPA

(M) Premium Payments on Health and/or

Atty. Arnold A. Apdua, CPA

Atty. Arnold A. Apdua, CPA

(2) The following individuals shall not be

(a) An individual whose taxable income

Atty. Arnold A. Apdua, CPA

Atty. Arnold A. Apdua, CPA

(5) The income tax return (ITR) shall consist of a