Impose upon onerous transfers such as sale, barter, exchange, and importation.

Taxes on gratuitous transfer

2 Types of Donations

Transfers with consideration

Transfer without consideration

Effectivity: During the lifetime of the donor and the donee Tax: Donor's Tax

Effectivity: Upon death of the donor Tax: Estate Tax

The regular conduct or pursuit of a commercial or an economic activity, including transactions incidental thereto, by any person, regardless of whether or not person engaged therein is a non-stock, non-profit private organization or government entity.

Generally not considered in the ordinary course of trade or business, hence, not subject to business tax.

Under RR 16-2005 Services rendered in the Philippines by a non-resident foreign person shall be considered as being rendered in the course of trade or business even if the performance is not regular.

When we say, In the ordinary course of trade, it means that it is not regular conduct and isolated transaction.

You are a cars dealer, You sell an equipment of your company because its old. Even it's not regularly do it, It is subject to business tax because it involve to the business.

PLDT want to improve its service, PLDT decided to avail the service of Mr. Jay Ijo, An american resident person. PLDT contract Mr. Jay Ijo to render a service only in a couple of weeks. So it's considered as isolated transaction but even it's isolated transaction, under our Tax Code, it is subject to business tax.

ABS-CBN Foundation is an non-stock and non-profit entity but ABS-CBN Foundation always like to sell shirts but even it's a non-stock and non-profit entity, selling shirts is in the ordinary course of trade or business.

UST is a non-stock and nonprofit educational institution, under Section 30. Except corporation, however the moment that corporation engaged in transaction. UST have a big rental income and VAT registered.

For the person to be subjected to any business tax, it is not necessary that he is regularly engaged in the conduct or pursuit of an economic activity

A non-resident foreign person performing isolated transaction in the Philippines shall not be liable to VAT

Nonstock and Non-profit private organizations which sell exclusively to their members in the regular conduct or pursuit of commercial or economic activity are exempt from Value added tax

Government entities engaged in commercial or economic activity are generally exempt from VAT

Pinas Energy Corp. have contract in the government to engaged in this particular business. Pinas sold its old vehicle and even it's not its business,it subject to business tax. What term it will fall?

Those individuals whose business do not realize a gross sales or receipts exceeding P100,000 in any twelve-month period.

An individual not deriving compensation as an employee under an employer-employee relationship but self employed. Their activities should be principally for subsistence or livelihood.

MIE shall include but not limited to:

3 Types of Business Taxes

As a rule, sale of goods or services made in the normal course of trade or business are subject to VAT unless exempt.

If the sale is exempt from VAT, it may be subject to other percentage taxes except those transactions that exempt from business taxes such but not limited to those made for subsistence or livelihood.

Sale or lease of goods or properties or the performance of services other than the transactions mentioned in the preceding paragraph, the gross annual sales and/or receipts do not exceed the amount of P3,000,000.

If your sales/gross receipts were not exceeded 3,000,000 in one year, that is VAT exempt but subject to Percentage tax.

How many percent is value added tax?

How many percent is Percentage Tax?

How much does Marginal Income Earners should not exceed in anything twelve-month period?

How much sales/gross receipts should not exceed to be VAT exempt but subject to Percentage Tax?

His business is Laptop selling, Generally, his business is subject to VAT unless his sales not exceed 3,000,000 and he's not VAT registered. His business is VAT exempt but subject to 3% percentage tax under section 116.

The moment that you are VAT-registered regardless of your sales in one year, you are subject to VAT because you are registered under the VAT system.

Pertain to taxes on sin products

Products that subject to Excise Tax

Excise Tax are imposed to who? (Only for Sin products, Non-essential goods and services)

What Business Tax subject this scenario? You are San Miguel Corporation and you produced San Mig Light. Your company is the one who produce and sell alcoholic products.

The moment that the transaction is subject to VAT, it can also subject to Percentage Tax.

If we're pertaining to sin products and non-essential goods including medical surgery under the TRAIN LAW. It is allowed to subject to VAT and Excise Tax or Percentage Tax and Excise only

Although some transaction should not be subjected both VAT and Percentage Tax, but when it comes to Tax Payers, they can be subject to both if they are engaged in mixed transactions.

What kind of transactions of Tax payers that can subject to both VAT and percentage tax.

Exempt From Business Tax VAT exempt sale under Sec. 109(A) Sale or Importation of:

Aling Nena engaged in buy and sell of vegetables, obviously vegetables is considered agricultural food product in their original state.

The moment that you sell agricultural and marine "food products in their original state" that is VAT Exempt regardless of the gross sales you earn.

Even you are the only vendor of agricultural and marine food products in their original state who have the biggest sales in the market. You're still exempt from VAT because of the the nature of the item that you sold.

3 Kinds of VAT

Who's the person liable to VAT?

Who's the person burden to VAT?

Persons liable to VAT

In the case of importation of taxable goods, the importer, whether an individual or corporation and whether or not made in the ordinary course of trade or business, shall be liable to VAT imposed in Section 107 of the Tax Code

Transfer made by a tax-exempt person/entity, not enjoying indirect tax exemption, shall not be subject to VAT. The none-exempt transferee shall not be considered as the importer and shall not be liable for the unpaid VAT pursuant to RA No. 9224 as implemented by RR. No. 25-03.

All importation are not vatable unless it is exempt under law.

Agricultural Cooperative is not VAT exempt in importing machineries and equipment.

Transfer made by a tax-exempt entity to none-tax exempt entity. Agricultural Cooperative imported machinery for their agricultural operations but after their importation, they gave the machinery to one person that not exempt.

Commodities/Service subject to Excise Tax

One of the reasons of excise tax is to discourage consumers to buy these products

Only producers/manufacturers and importers of these products are only subject to excise tax

How many percent of excise tax Medical Surgery (Non-essential Service)?

Example of cosmetic surgery procedures that fall under Excise Tax

2 kinds of Excise Tax (as to amount)

Refers to the excise tax which is based on selling price or other specified value of the goods/articles.

Refers to the excise tax imposed which is based on weight or volume capacity or any other physical unit of measurement.

Characteristics of VAT

Business taxes are direct tax

Types of Registration

What kind of Registration is this? Any person or entity who, in the course of his trade or business, sells, barters, exchange, leases, goods or properties and renders services subject to VAT. There are reasons to believe that the gross sales or receipts for the next 12 months will exceed 3,000,000.

Ratio or Television broadcasting companies whose annual gross receipts of the preceding year exceeds ________ is mandatory for registration.

ABT FM radio station, their gross receipt is not exceed 10,000,000 so they are not required to register under VAT system. What is kind of Tax shall be applied to this? and How many percent?

To consider that the Radio and Television broadcasting company is required to Register under VAT system, their gross receipts should exceed 10,000,000 in one year.

Any person who is VAT-exempt or not required to register for VAT.

Any person who elects to register under optional registration shall not be allowed to cancel his registration for the? How many years?

A tax payer whose annual gross receipts or sales exceed 3,000,000 shall pay VAT even if not VAT registered.

A tax payer whose annual receipts or sales do not exceed 3,000,000 but who is a VAT registered shall pay VAT.

A non-resident lessor or foreign licensor who is not VAT-registered is subject to VAT

An individual taxpayer whose gross sales or receipts do not exceed 100,000 is exempt from VAT provided he pays the 3% other percentage tax.

If a radio and television broadcasting company who is not mandatory required to register under VAT system chose to be a VAT taxpayer.