TAXATION LAW (Cluster) | TAXATION 1 | Atty. Rizalina V.

Lumbera

ii. Compensation + trade or

business (T/B)
TAXATION I iii. Compensation + exercise of
profession + trade or business
TAXATION
Atty. Rizalina V. Lumbera 2. Corporation
a. Partnership
i. General Professional Partnership
NATIONAL TAXATION (GPP) – established for the
purpose of exercising the
INCOME TAX common profession of all the
partners and no part of its
income is derived from trade or
BASIC RULES IN INCOME TAX
business
1. Income – anything that flows into the wealth of the
1. The GPP is not subject
taxpayer other than the return of capital or
to corporate income tax,
anything that increases the net worth of a
but the individual
taxpayer other than the return of capital
partners will be
2. Income must be actually realized or constructively
subjected to income tax
received depending on the accounting method
as individuals
used
ii. General Co-Partnership (GCP) –
3. Taxable Period – 12 months
those that are not GPPs
a. Calendar Year – January 1 – December
31
CLASSIFICATION OF TAXPAYERS
b. Fiscal Year – beginning any month and
1. Individual
ending after the 12-month period; must
a. Resident Citizen – a citizen of the
always start on the first day of the month
Republic of the Philippines who resides in
4. Income Cycle
the Philippines
a. Revenue-Expense Cycle
b. Non-resident Citizen
b. When you have revenue, you also spend.
i. A citizen of the Philippines who
Your expense creates revenue for another
establishes to the satisfaction of
person who will also spend, and so on.
the Commissioner the fact of
5. Income is considered income regardless if it is
his physical presence abroad
from a legal or illegal sources and regardless if it is
with a definite intention to reside
in cash or in kind
therein.
6. Determining if income is taxable
ii. A citizen of the Philippines who
a. Did you receive anything?
leaves the Philippines during the
b. Is it income?
taxable year to reside abroad,
c. Is it taxable?
either as an immigrant or for
i. Kinds of taxpayer
employment on a permanent
ii. Source of income
basis.
iii. Inclusions/exclusions/exemptions
iii. A citizen of the Philippines who
iv. Capital gain/capital loss
works and derives income from
v. Ordinary gain/ordinary loss
abroad and whose employment
vi. Deductions
thereat requires him to be
d. What kind of income tax is imposed and
physically present abroad most
what rate is applied?
of the time during the taxable
year.
KINDS OF TAXPAYERS
iv. A citizen who has been
1. Individual
previously considered as
a. Purely compensation income earner (CEI)
nonresident citizen and who
– individual who renders service pursuant
arrives in the Philippines at any
to an employer-employee relationship
time during the taxable year to
b. Self-employed professional or individual
reside permanently in the
(SEP/SEI) – engaged in exercise of
Philippines shall likewise be
profession or in trade/business
treated as a nonresident citizen
c. Mixed-income earner (MEI)
for the taxable year in which he
i. Compensation + exercise of
arrives in the Philippines with
profession (EP)
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TAXATION LAW (Cluster) | TAXATION 1 | Atty. Rizalina V. Lumbera

respect to his income derived b. If the debtor a non-resident of PH, all

from sources abroad until the interest on loans paid by the debtor to the
date of his arrival in the creditor is considered as without.
Philippines. 6. Dividends
c. Resident Alien - an individual whose a. Corporation which issued the dividends is
residence is within the Philippines and a domestic corporation – within
who is not a citizen thereof b. Corporation which issued the dividends is
d. Non-resident Alien engaged in trade or a foreign corporation – within, as a
business – an individual whose residence general rule
is not within the Philippines and who is i. Exception: If the gross income of
not a citizen thereof but engaged in trade such foreign corporation for the
or business: three-year period ending with the
i. the alien stays in the Philippines close of its taxable year
for an aggregate period of 180 preceding the declaration of such
days or more; dividends is less than fifty
ii. the alien engages in commercial percent (50%) – only the portion
transactions on a more or less of the income of the foreign
regular basis corporation derived from
iii. the alien appoints agents in the Philippine sources will be
Philippines considered within
iv. the alien establishes a branch in
the Philippines KINDS OF INCOME (FOR INDIVIDUAL TAXPAYER)
v. the alien hires employees in the A. All Income other than [B], [C], and [D]
Philippines B. Passive Income derived from Philippine sources
e. Non-resident Alien not engaged in trade a. If the passive income is derived from
or business - an individual whose outside the Philippines, it falls under [A].
residence is not within the Philippines and b. What are included:
who is not a citizen thereof but not i. Interest on bank deposits
engaged in trade or business, which ii. Royalties
includes aliens employed in OBU, OPSC, iii. Prizes and Winnings
and MNC iv. Dividends
f. Estate and Trust 1. General Rule: 10%
2. Corporation 2. Exception: 20% for
a. Domestic Corporation – incorporated in non-resident alien
accordance with Philippine law engaged in trade or
b. Resident Foreign Corporation – business
incorporated in accordance with foreign C. Capital gains on sales of shares of stocks
law and engaged in trade or business in a. Requirement: Shares of stocks in a
the Philippines domestic corporation sold, untraded
c. Non-resident Foreign Corporation - b. If the shares of stocks are traded, apply
incorporated in accordance with foreign Sec. 127 – percentage tax of 0.6 of 1%
law and not engaged in trade or business of the gross selling price (GSP)
in the Philippines c. The shares must be a capital asset
d. FWT – 15%
SOURCES OF INCOME D. Capital gains on sales of real property located in
How to Determine if the source is within or without: the Philippines
1. Compensation – where the service is rendered a. The real property sold must be a capital
2. Real Property and Tangible Personal Property – asset located in the Philippines.
where the property is located b. If the real property is an ordinary asset, it
3. Royalties, Rentals – where the property is located falls under [A].
4. Interest on Bank Deposits – where the bank that c. If the real property is a capital asset
issued the interest on bank deposits is located located outside the Philippines, it falls
5. Interest on loans – under [A].
a. If the debtor is a resident of PH, all d. FWT – 6% based on the FMV or GSP,
interest on loans paid by the debtor to the whichever is higher
creditor is considered as within. e. Exemption from 6%: When you sell actual
principal residence:

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TAXATION LAW (Cluster) | TAXATION 1 | Atty. Rizalina V. Lumbera

i. You sell actual principal on the difference between the FMV of the asset and the
residence located in the consideration.
Philippines
ii. Within 30 days from the sale, you KINDS OF INCOME (FOR CORPORATE TAXPAYERS)
inform the BIR that you are A. All Income other than [B], [C], and [D]
availing of the exemption B. Passive Income derived from Philippine sources
iii. Within 18 months from the sale, a. What are included:
you buy or build another actual i. Interest on bank deposits
principal residence in lieu of the ii. Royalties
one that you sold C. Capital gains on sales of shares of stocks
iv. You avail of the exemption once D. Capital gains on sales of real property located in
every 10 years the Philippines
v. The historical cost is considered E. Intercorporate Dividends Tax (ICDT)
in determining how much will be F. Minimum Corporate Income Tax (MCIT)
subjected to income tax or will be a. This is in lieu of the 30% NIT
exempted from tax b. MCIT is 2% of the gross income (GI)
f. When capital asset is sold in favor of the beginning the 4th year following the
government, the taxpayer has the option commencement of its operations,
to choose between two kinds of taxes: provided that the 2% of the GI is higher
i. CGT of 6% or than the NIT
ii. NIT under [A] G. Improperly Accumulated Earnings Tax (IAET)
a. This is an additional tax paid if there are
Capital Asset Ordinary Asset improperly accumulated earnings, which
Those not enumerated in Under Sec. 39, ordinary refer to earnings of a corporation retained
Sec. 39 (A)(1) are capital assets include the beyond reasonable business needs.
assets. following: H. Branch Profit Remittance Tax (BPRT)
1. stock in trade of the a. 15% on the amount applied for
taxpayer or other property remittance regardless of the amount
of a kind which would actually remitted.
properly be included in the b. Applicable only to resident foreign
inventory of the taxpayer if corporation
on hand at the close of the
taxable year;
2. property held by the
taxpayer primarily for sale
to customers in the
ordinary course of his
trade or business
3. property used in the
trade or business, of a
character which is subject
to the allowance for
depreciation provided in
Subsection (F) of Section
34;
4. real property used in
trade or business of the
taxpayer

How to determine if there is gain or loss in selling assets:

1. If the consideration is more than the FMV at the
time of sale = gain
2. If the consideration is less than the FMV at the
time of sale = loss

Take note of Sec. 100. When assets are sold for

insufficient consideration, you will be subject to donor’s tax
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TAXATION LAW (Cluster) | TAXATION 1 | Atty. Rizalina V. Lumbera

A. Tax on Individual Taxpayers

Kinds of Source of Income Kinds of Income and Taxes

Taxpayers W/IN W/OUT [A] [B] [C] [D]

All Income other than Passive Capital Capital

[B], [C], [D] Income Gains on Gains on
Sales of Sale of
Shares of Real
Stocks (not Property
traded) located in
the
Philippines
RC ✔ ✔ 1. CIE: NIT FWT FWT FWT

2.a. SEP/SEI with

GS/GR not more than
3M: NIT or 8% of
GS/GR in excess of
Php 250,000 at the
option of the taxpayer

2.b. SEP/SEI with

GS/GS more than 3M:
NIT

3.a. MIE on CI: NIT

3.b. MIE on income

from T/B or EP with
GS/GR not more than
3M: NIT or 8% of
GS/GR at the option of
the taxpayer

3.c. MIE with GS/GS

more than 3M: NIT
NRC ✔ 🗶 Same as RC FWT FWT FWT
RA ✔ 🗶 Same as RC FWT FWT FWT
NRAETB ✔ 🗶 Same as RC FWT FWT FWT
NRANETB ✔ 🗶 GIT of 25% FWT FWT
Except those employed in OBU,
OPSC, MNC who are subject to NIT

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TAXATION LAW (Cluster) | TAXATION 1 | Atty. Rizalina V. Lumbera

B. Tax on Corporate Taxpayers

Kinds of Source of Income Kinds of Income and Taxes

Taxpayers W/IN W/OUT [A] [B] [C] [D]

All Income other than Passive Capital Capital

[B], [C], [D] Income Gains on Gains on
Sales of Sale of
Shares of Real
Stocks (not Property
traded) located in
the
Philippines
DC ✔ ✔ NIT (30%) FWT FWT FWT
RFC ✔ 🗶 NIT (30%) FWT FWT N/A
NRFC ✔ 🗶 GIT (30%) FWT N/A

C. Additional Taxes for Corporate Taxpayer

ICDT MCIT IAET BPRT

DC DC – DC: Exempt 2% of GI 10% FWT N/A
RFC DC – RFC: Exempt 2% of GI N/A 15% FWT
NRFC DC – NRFC: 15% N/A N/A N/A
FWT

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TAXATION LAW (Cluster) | TAXATION 1 | Atty. Rizalina V. Lumbera

EXEMPTIONS FROM TAX ON CORPORATIONS (Sec. 30) ● Tax exemption under the Constitution:
● Non-stock, non-profit organizations i. RPT
● Their income “as such” shall be exempt from tax, ii. Revenues and assets actually,
meaning they will not pay the 30% NIT directly, and exclusively for
● Income as such: income derived pursuant to the educational purposes
primary purpose for which the organization was ● Tax exemption under Sec. 30: income as
created such 🡪 this is contrary to the Constitution
● Exception: The income of whatever kind and ● CIR v. De La Salle University: Sec. 30,
character of the foregoing organizations from any insofar as non-stock, non-profit
of their properties, real or personal, or from any of educational institutions are concerned, is
their activities conducted for profit regardless of unconstitutional because it runs contrary
the disposition made of such income, shall be to the provision of the Constitution.
subject to tax. i. Effect: As long as revenues are
actually, directly, and exclusively
CONSTITUTIONAL LIMITATIONS IN RELATION TO SEC. for educational purposes, it is
30, NIRC exempt from tax. The
1. Charitable Institutions Constitution should be used.
● Charitable institutions, churches and Sec. 30 does not apply.
parsonages or convents appurtenant 4. Proprietary Educational Institution
thereto, mosques, non-profit cemeteries, ● Proprietary educational institutions,
and all lands, buildings, and including those cooperatively owned, may
improvements, actually, directly, and likewise be entitled to such exemptions
exclusively used for religious, charitable, subject to the limitations provided by law
or educational purposes shall be exempt including restrictions on dividends and
from taxation. [Sec. 28 (3), Art. VI] provisions for reinvestment. [Sec. 4(1),
● Tax exemption under the Constitution: Art. XIV]
real property tax (RPT) ● Sec. 27 (B), NIRC: 10% NIT will apply if
● Tax exemption under Sec. 30: income as the income from unrelated trade or
such activity does not exceed 50% of its total
● Not exempted under Sec. 30: rental income. 30% NIT will apply if it exceeds
income (30% NIT), interest earnings (20% 50%.
FWT) of charitable/religious institutions 5. Government educational institutions
● Gifts/donations to charitable/religious ● There is no Constitutional provision
organizations are not subject to donor’s applicable. Sec. 30, NIRC applies
tax/estate tax, provided not more than ● RPT is exempted under Sec. 234, LGC of
thirty percent (30%) of the amount shall 1991
be used by such institutions for 6. Government of the Philippines
administration purposes. ● There is no Constitutional provision
● Gifts to charitable/religious organizations applicable.
are also not taxable income because it is ● RPT is exempted under Sec. 234, LGC of
an item of exclusion under Sec. 32 (B)(3). 1991
2. Religious Institutions ● Income derived from the exercise of any
● Same as charitable institutions essential governmental function accruing
3. Non-stock, non-profit educational institutions to the Government of the Philippines or to
● Charitable institutions, churches and any political subdivision thereof is exempt
parsonages or convents appurtenant from tax as provided under Sec. 32
thereto, mosques, non-profit cemeteries, (B)(7)(b), NIRC.
and all lands, buildings, and ● However, the income of the government
improvements, actually, directly, and from the exercise of a proprietary function
exclusively used for religious, charitable, is subject to tax.
or educational purposes shall be exempt ● Donation in favor of the government is not
from taxation. [Sec. 28 (3), Art. VI] taxable under Sec. 32(B)(3).
● All revenues and assets of non-stock, 7. Charitable Hospitals
non-profit educational institutions used ● Same as charitable institutions
actually, directly, and exclusively for 8. Proprietary Hospitals
educational purposes shall be exempt ● Same as Proprietary Educational
from taxes and duties. [Sec. 4(1), Art. XIV] Institution

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TAXATION LAW (Cluster) | TAXATION 1 | Atty. Rizalina V. Lumbera

SUMMARY OF EXEMPTIONS OF SPECIAL CORPORATIONS

Charitable Non-stock, Proprietary Government Government

Institutions/ Non-Profit Educational Educational
Religious Educational Institution/ Institution
Institutions/ Institution Proprietary
Charitable Hospital Hospital
RPT Exempt, provided Exempt, Exempt, Exempt, Exempt,
actually, directly, provided provided unless unless
exclusively used for actually, directly, actually, directly, beneficial use beneficial use
charitable, religious, exclusively used exclusively used pertains to pertains to
educational purpose for charitable, for charitable, non-exempt non-exempt
religious, religious, entity entity
educational educational
purpose purpose
IT Exempt: income as Exempt: Income 10% NIT if Exempt: Exempt:
such ADE used for income from income as Income from
educational unrelated trade such exercise of
Not exempt: income purposes or activity does governmental
from properties or not exceed 50% Not exempt: functions
from activity of its total
income from
conducted for profit income. properties or
regardless of from activity
disposition shall be 30% NIT if conducted for
subject to tax income from profit
unrelated trade regardless of
or activity disposition
exceeds 50%. shall be
subject to tax
Gifts/donations received are not subject to income tax as an item of exclusion from GI
ET/DT Exempt, provided Exempt, Exempt, Exempt Exempt
not more than 30% provided not provided not
of the gift is used for more than 30% more than 30%
administration of the gift is used of the gift is used
purposes for administration for administration
purposes purposes

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TAXATION LAW (Cluster) | TAXATION 1 | Atty. Rizalina V. Lumbera

INCLUSIONS o Election contributions is excluded from GI

● The items listed under Sec. 32(A), NIRC are provided that the following requisites are
taxable. met:
● Basic rule: All income is subject to tax unless ▪ It is received for campaign
exempted by law or excluded from the purposes during campaign
computation of the gross income period
● Gross income: all income derived from whatever ▪ It is fully utilized for authorized
source, including (but not limited to) the following campaign expenditures as
items: (CG2DIR2AP3) provided by the COMELEC Rules
1. Compensation for services in whatever ▪ SOCE is filed
form paid, including, but not limited to ▪ CWT of 5% was withheld and
fees, salaries, wages, commissions, and remitted to BIR
similar items; ● (4) Income exempt under treaty
● There is an employer-employee ● (5) Damages – compensation for sickness or
relationship. death
2. Gross income derived from the conduct o Any payment for reparation of damage is
of trade or business or the exercise of a excluded
profession; ● (6) Retirement Benefits
● There is no employer-employee o Private retirement plan to be excluded:
relationship. ▪ 50 years of age
3. Gains derived from dealings in property; ▪ 10 years of continuous service
4. Interests; ▪ The plan is approved by the BIR
5. Rents; ▪ No part of the fund is used for
6. Royalties; any purpose other than for the
7. Dividends; benefit of the employees
8. Annuities; o No private retirement plan:
9. Prizes and winnings; ▪ 60 years of age
10. Pensions; and ▪ 20 years of service
11. Partner's distributive share from the net o Government sector
income of the general professional ▪ All retirement benefits are
partnership. excluded
o Separation pay is not taxable because
EXCLUSIONS FROM GROSS INCOME that is for a cause beyond the control of
● The items listed under Sec. 32(B), NIRC are not the employee.
subject to tax. o If an employee dies, whatever is received
● (1) Proceeds of Life Insurance Policies by the heirs by reason of the employee’s
● Proceeds is excluded death is not taxable.
● Return of premium is excluded ● (7) Miscellaneous Items
● Interest on premium is included o Prizes and winnings in sports
● (2) Return of Premium competitions sanctioned by the National
● (3) Gifts, Bequests, Devices Sports Competition
o If the property received realizes income, o Prizes and awards made primarily in
then the income from the property forms recognition of religious, charitable,
part of the gross income of the taxpayer. scientific, educational, artistic, literary, or
o Donation to a friend is excluded from GI civic achievement, provided:
▪ But subject to donor’s/estate tax ▪ The recipient was selected
o Donation to without any action on his part to
charitable/religious/educational institution enter the contest or proceeding;
is excluded from GI and
▪ Not subject to donor’s/estate ▪ The recipient is not required to
tax, provided not more than thirty render substantial future services
percent (30%) of the amount as a condition to receiving the
shall be used by such institutions prize or award.
for administration purposes. o 13th month pay and other benefits
o Donation to government is excluded from ▪ Not more than Php 90,000
GI
▪ Not subject to donor’s/estate tax

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TAXATION LAW (Cluster) | TAXATION 1 | Atty. Rizalina V. Lumbera

o
Income Derived by the Government or its o Income Derived by Foreign Government
Political Subdivisions from exercise of
governmental functions
TAX TREATMENT OF EMPLOYEE BENEFITS

Kinds of Employees Basic Pay DMB Other Benefits

Within limits Excess Within 90k limit Excess

Managerial/Supervisory C - NIT Exempt Excess will be C - NIT FBT – 35%

transferred to other
Rank and File C - NIT Exempt benefits Exempt C - NIT

Minimum Wage Earner SMW - Exempt Exempt Exempt C - NIT

Exception: The benefit shall not be considered as income a. Not exceeding Php 300/month
(so the table above will not apply) if the benefit is either: 8. Achievement Awards
1. furnished for the convenience of the employer OR a. Not exceeding Php 10,000/year
2. necessary to the trade or business of the 9. Gifts given during Christmas/major anniversary
employer. celebrations
a. Not exceeding Php 5,000/year
Fringe Benefits: any goods, service or other benefit 10. Daily meal allowance
furnished or granted in cash or in kind by an employer to a. Not exceeding 25% of basic minimum
an individual employee (except rank and file employees) 11. Benefits received by an employee pursuant to a
● These are benefits extended by an employer to an CBA and productivity incentive scheme
employee on top of the basic pay, de minimis a. Not exceeding Php 10,000/year
benefits, 13th month pay, and other benefits.
● These are normally given to DEDUCTIONS FROM GROSS INCOME
managerial/supervisory employees.
● Tax rate is 35% Rule: Only income subject to NIT is allowed to claim
● This is withheld by the employer. deductions.
● Examples:
o Housing privileges Kind of Taxpayer Subject to deduction?
o Motor vehicles
o Equipment RC Yes - [A] - NIT
o Membership in clubs
NRC Yes - [A] - NIT
o Plane tickets
RA Yes - [A] - NIT
De Minimis Benefits (DMB): Privileges of small value NRAETB Yes - [A] - NIT
provided by the employer to an employee NRANETB No
1. Monetized unused vacation leave (private sector) DC Yes - [A] - NIT
a. Not exceeding 10 days RFC Yes - [A] - NIT
2. Monetized vacation leave or sick leave NRFC No
(government)
a. No limit
For compensation income earners, the only deductions
3. Medical cash allowance to dependents of
allowed that are not considered deductions from gross
employees
income are the following:
a. Not exceeding Php 1,500/semester (6
1. PAG-IBIG
months)
2. PhilHealth
4. Rice Subsidy
3. SSS
a. Not exceeding Php 2,000/month
4. GSIS
5. Uniform/clothing allowance
5. Union dues
a. Not exceeding Php 6,000/year
6. 13th month pay and other benefits not exceeding
6. Actual medical assistance
Php 90,000
a. Not exceeding Php 10,000/year
7. Laundry Allowance
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Optional Standard Deduction (OSD) interest paid is being claimed as a

● 40% of gross income or gross receipts/gross deduction.
sales c. Tax arbitrage – The amount of interest
● If this option is chosen, the taxpayer will never expense allowed as a deduction shall be
incur any loss because 60% of income is subject further reduced by 33% of any interest
to tax. income subjected to final withholding tax.
● No documentation is needed. 3. Bad Debts
a. Bad debt expense – The taxpayer
Itemized Deductions (ID) claiming deduction is the creditor and the
● Supporting documents are needed to prove the whole debt including the interest is being
expense. claimed as a deduction.
● Itemized deductions must be necessary in the b. Tax benefit rule – When bad debt was
trade or business of the taxpayer. previously claimed as a form of deduction
o These must be incurred in connection by the creditor and subsequently the debt
with the trade or business. was paid by the debtor, then the creditor
o The expense must be related to the kind shall consider the amount paid for the
of business you are engaged in. indebtedness recovered as forming part
● They must be actually paid or incurred by the of his gross income in the year of
taxpayer in the year for which the tax due is being recovery. On the part of the debtor, he
computed. can claim the interest expense as a
● Reasonable in amount deduction on the year that he paid.
4. Taxes
Note: The taxpayer must choose between OSD and ID at a. Only taxes previously paid may be
the start of the taxable period upon filing of the first deducted.
quarterly return. If the taxpayer fails to choose, the default b. The taxes must be in connection with
is ID. The choice is irrevocable until the end of the taxable taxpayer’s trade/business.
period. The choice is made every taxable year. c. Tax benefit rule – The amount of taxes
claimed as deduction and subsequently
Items of Exclusions Items of Deductions refunded to the taxpayer shall form part
These are items of income These are items of of the gross income of such taxpayer in
but the law specifically expenditures. the year of recovery.
provides that they should 5. Casualty Loss
not be considered in a. Tax benefit rule also applies when the
computing your gross taxpayer recovered the lost property after
income. The effect is no claiming the casualty loss as a deduction.
tax due. 6. Depreciation
Both have the effect of reducing the tax due and so a. Depreciation period for real properties
they are strictly construed against the taxpayers. ranges from 15 to 25 years depending on
the economic or useful life of the asset.
ITEMIZED DEDUCTIONS under Sec. 34, NIRC b. Depreciation period for personal
(EITLBD2CPR) properties is 5 years.
7. Charitable Contributions
1. Business Expenses a. Individual – 10%
a. Legitimate business expenses are b. Corporation – 5%
deductible 8. Pensions
b. Capital expenditures are not deductible 9. Research and Development
but in lieu thereof, depreciation expense
is allowed to be deducted
2. Interest on Loans
a. The amount of interest paid or incurred
within a taxable year on indebtedness in
connection with the taxpayer's
profession, trade or business shall be
allowed as deduction from gross income.
b. Interest expense – The taxpayer claiming
deduction is the debtor and only the

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Summary of Taxpayers, Type of Income, Taxes, and Allowable Deductions

Kind of Type of Taxes Deductions

Taxpayer Income
CIE CI NIT No VAT No Percentage No deduction
Tax
SEP/SEI With GS/GR 8% of GR/GS No VAT No Percentage No deduction
not more than in excess of P Tax
3M: at the 250,000.00
option of the NIT No VAT 3% Percentage OSD or ID
taxpayer Tax
(option must be
chosen in Q1;
otherwise,
default is NIT)
With GS/GR NIT 12% VAT No Percentage OSD or ID
more than 3M Tax
MEI On CI NIT No VAT No Percentage No deduction
Tax
On income 8% of GS/GR No VAT No Percentage No deduction
from T/B or EP Tax
w/ GS/GSR NIT No VAT 3% Percentage OSD or ID
not more than Tax
3M: at the
option of the
taxpayer
(option must be
chosen in Q1;
otherwise,
default is NIT)
On GS/GR NIT 12% VAT No Percentage OSD or ID
more than 3M Tax
Corporation T/B not more NIT (30%) No VAT Percentage Tax OSD or ID
3M
T/B more than NIT (30%) 12% VAT No Percentage OSD or ID
3M Tax

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