Editor’s note: This article was first published on Jan. 21, 2018. It has been revamped to make sure the contents are up to date.
Also, if you are viewing this from a mobile device, please make sure your handset is in landscape orientation.
We know you have a lot of questions regarding the tax changes for 2018 and the period hereafter. There are a lot of articles published discussing these changes; however, they are usually on different posts. You can always open several tabs at a time, but who has time for that?
So we scoured the web for as much information about changes in tax policies as we can and combined all of what we gathered in one comprehensive list. And here it is.
| Before | After | |
Reduced taxes |
||
Personal Income Tax |
5% to 32% | 20% to 35% (beyond 250, 000) |
| With 50, 000 personal exemption, 25, 000 exemption per dependent child, and 2, 400 premium for health insurance and hospitalization | No additional exemptions | |
13th month exemption |
82, 000 | 90, 000 |
self-employed |
Graduated income tax rate | 8% or follow the tax table (250, 000 to 3, 000, 000); personal income tax table (beyond 3, 000, 000) |
Mixed income earners |
|
Less than 3M:
8% of Gross Sales/Receipts and other income + graduated income tax rates of 0% to 35% on compensation income or graduated income tax rates of 0% to 35% on total net taxable business income and taxable compensation income + 3% Percentage Tax on business income More than 3M: Compensation income and net taxable income from business subject to graduated income tax rates of 0% to 35% + VAT |
Estate tax |
5% to 32% | 6% |
Standard deduction |
1, 000, 000 | 5, 000, 000 |
Family home |
1, 000, 000 | 10, 000, 000 |
Donor’s tax |
2% to 15% (if the donor and the donee are related); 30% (if not) | 6% |
Value-added tax |
||
VAT threshold |
1, 919, 500 | 3, 000, 000 |
For lease residential unit exemption |
12, 800 | 15, 000 |
Drugs and medicines (diabetes, high cholesterol, and hypertension) |
VATable | VAT exempt |
Charges collected by homeowners associations and condominium corporations |
VATable | VAT exempt |
Increased tax |
||
Passive income |
||
Foreign currency deposit (interest) |
7.5% | 15% |
Pre-terminated long-term deposits |
5.20% | 20% |
PCSO winnings |
Tax exempt | 20% (more than 10, 000) |
Sale of shares of unlisted stock (local) |
5-10% | 15% |
Sale of shares of listed stock (local) |
Half of 1% | 6/10 of 10% |
Excise tax |
||
cigarettes |
PhP30 | PhP32 (until June 30, 2018)
PhP35 (until Dec. 31, 2019) PhP37 (until Dec. 31, 2021) PhP40 (until Dec. 31, 2023) |
Manufactured oil |
||
Per liter/kilo |
||
Lubricating oil and greases |
PhP4.50 | PhP8.00 |
Processed gas |
PhP0.50 | PhP8.00 |
Waxes and petrolatum |
PhP3.50 | PhP8.00 |
Denatured alcohol for motive power |
PhP0.50 | PhP8.00 |
Naphtha, regular gasoline, and similar products |
PhP4.35 | PhP7.00 |
Unleaded premium gasoline |
PhP5.35 | PhP7.00 |
Aviation turbo jet fuel |
PhP3.67 | PhP4.00 |
Kerosene |
PhP0.00 | PhP3.00 |
Diesel fuel oil |
PhP0.00 | PhP2.50 |
LPG |
PhP0.00 | PhP1.00 |
Asphalts |
PhP0.56 | PhP8.00 |
Petroleum coke (per metric tone) |
— | PhP2.50 |
Mineral products |
||
Coal and coke |
PhP10.00 | PhP50.00 per M/T |
Nonmetallic minerals and quarry resources |
2% | 4% |
Copper and other metallic minerals |
2% | 4% |
Gold and chromite |
2% | 4% |
Indigenous petroleum |
3% | 6% |
Automobiles |
||
Up to PhP600, 000 |
2% | 4% |
Over PhP600, 000 up to PhP1.1M |
PhP12, 000 + 20% of value in excess of PhP 600, 000 | 10% (Over PhP600, 000 up to PhP1M) |
Over PhP1.1M up to PhP2.1 M |
PhP112, 000 + 40% of value in excess of PhP1.1M | 20% (Over PhP1M up to PhP 4M) |
Over PhP2.1 M |
PhP512, 000 + 60% of value in excess of PhP2.1M | 50% (Over PhP4M) |
Hybrid vehicles |
50% of applicable tax rates | |
Electric vehicles |
exempted | |
Documentary stamp tax |
||
Original issue of Shares of Stock |
PhP1.00 of PhP200 of the par value | PhP2.00 of PhP200 of the par value |
Sales, Agreements to Sell, Memoranda of Sales, Deliveries or Transfer of Due-bills, Certificates of Obligation, or Shares of Certificates of Stock |
PhP0.75 per PhP200 of the par value | PhP1.50 per PhP200 of the par value |
Stamp Tax on Certificates of Profits or Interest in Property or Accumulations |
PhP0.50 per PhP200 of the par value | PhP1.00 per PhP200 of the par value |
Bank Checks, Drafts, Certificates of Profits or Interest in Property or Accumulations |
PhP1.50 | PhP3.00 |
Debt Instruments |
PhP1.00/PhP200.00 | PhP1.50/PhP200.00 |
BIlls of Exchange or Drafts |
PhP0.30/PhP200.00 | PhP0.60/PhP200.00 |
Acceptance of Bills of Exchange |
PhP0.30/PhP200.00 | PhP0.60/PhP200.00 |
Foreign Bills of Exchange and Letters of Credit |
PhP0.30/PhP200.00 | PhP0.60/PhP200.00 |
Life Insurance Policies |
PhP10.00-PhP100.00 | PhP20.00-PhP200.00 |
Policies of Annuities |
PhP0.50/PhP200.00 | PhP1.00 |
Pre-need Plans |
PhP0.20/PhP200.00 | PhP0.30/PhP200.00 |
Certificates |
PhP15.00 | PhP30.00 |
Warehouse receipts |
PhP15.00 | PhP15.00 |
Jai-Alai, Horse Racing Tickets, Lotto or other authorized numbers games |
PhP0.10/PhP1.00 | PhP0.20/PhP1.00 |
Bills of Lading or Receipts |
PhP1.00-PhP10.00 | PhP2.00-PhP20.00 |
Proxies |
PhP15.00 | PhP30.00 |
Powers of Attorney |
PhP5.00 | PhP10.00 |
Lease and Other Hiring Agreements |
PhP3.00 for the first PhP2, 000.00 and PhP1.00 for every PhP1, 000.00 in excess of PhP2, 000.00 | PhP6.00 for the first PhP2, 000.00 and PhP2.00 for every PhP1, 000.00 in excess of PhP2, 000.00 |
Mortgages, Pledges, and Deeds of Trust |
PhP20.00 for the first PhP5, 000.00 and PhP10.00 for every PhP5, 000.00 in excess of PhP5, 000.00 | PhP6.00 for the first PhP2, 000.00 and PhP2.00 for every PhP1, 000.00 in excess of PhP2, 000.00 |
Deeds of Sale and Conveyances of Real Property |
PhP15.00/PhP1, 000 (does not include donation) | No increase but donation is subject to tax |
Charter parties and similar instruments |
PhP50.00-PhP150.00 | PhP100.00-PhP300.00 |
New taxes |
||
Sweetened beverages |
||
Using purely caloric sweeteners and purely non-caloric sweeteners or a mix of the two |
PhP6.00/liter | |
Using purely high fructose corn syrup or in combination with any caloric or non-caloric sweetener |
PhP12.00/liter | |
| Exempted from these are milk, 3-in-1 coffee, 100% natural fruit or vegetable juice, medically indicated beverages, and drinks that use natural sweeteners | ||
Non-essential services |
||
Invasive cosmetic procedures directed solely towards improving, altering, or enhancing the patient’s appearance |
5% | |
PCSO winnings |
Tax exempt | 20% final withholding tax if more than PhP10, 000 |
Deadline changes |
||
Filing of tax return for final and creditable withholding taxes |
monthly | Quarterly (last day of the month following the closing quarter) |
Filing of the First Quarterly Income Tax Return for Self-employed Individuals and professionals (BIR Form 1701Q |
April 15 | May 15 |
Option for installment payment of Annual Income Tax in excess of P2,000 (2nd installment) |
July 15 | October 15 |
Forms 1601E, 1601F, 1602, 1606, 1603 |
Monthly filing | Quarterly filing and payment on or before the last day of the month following the close of the calendar quarter
(Implementation is still pending since the BIR is yet to issue its implementing rules and regulations on the filing and payment deadlines and the new forms.) Update as of April 10, 2018: According to BIR, Taxpayers registered with the old forms types–1601E and 1601F–will automatically be registered with the new forms namely, 1601EQ, 0619E, 1601FQ, and 0619F. |
Form 2551M |
Filing and Payment (Non-eFPS)
January to December returns – 20th day after the end of each month Filing (eFPS) January to December returns – 21st to 25th day after the end of each month Payment (eFPS) January to December returns – 25th day after the end of each month |
Quarterly filing and payment on or before the 25th day of the month following the close of the taxable quarter
(Implementation is still pending since the BIR is yet to issue its implementing rules and regulations on the filing and payment deadlines and the new forms.) Update as of April 10, 2018: According to BIR, Taxpayers registered with the old forms types 2551M/2551 will automatically be registered with the new form 2551Q. |
Filing of estate tax return |
6 months from death | 1 year from death |
Other changes |
||
ITR number of pages |
|
ITR shall not be more than 4 pages |
Estate tax |
funeral expenses (up to P200,000) and medical expenses (up to P500,000) | standard deduction (wherein no substantiation is required) from P1,000,000 to P5,000,000 |
Notice of death |
required | no longer required |
Installment payment of estate tax due |
No option | allowed in case available cash is insufficient to pay total estate tax due (within 2 years) |
CPA certification |
required if the gross estate is PhP2,000,000 | required if the gross estate is PhP5,000,000 |
Bank deposits left by the decedent |
Requires a certification from the BIR that estate tax has been paid | Subject to 6% withholding tax |
Application for VAT Refund |
BIR should act on it within 90 days; otherwise, they will be criminally liable. | |
Audit by independent CPAs |
Required if the gross annual sales, earnings, receipts, or output exceeded PhP150, 000 | Required if the gross annual sales, earnings, receipts, or output exceeded PhP3, 000, 000 |
Ceiling of EWT rates |
1% | 15% (Starting Jan. 1, 2019) |
Reduction of EWT rates |
8% | 10% and/or 15%* |
Keeping of Books of Accounts |
Simplified bookkeeping allowed
for those with quarterly sales/receipts exceeding PhP50, 000 |
|
Issuance of receipts/invoice |
|
|
Electronic Sales Reporting |
Mandatory for taxpayers using CRM/POS and/or other sales machines | Mandatory for large taxpayers and taxpayers engaged in export of goods and services (within 5 years from the effectivity of the Act and establishment of a BIR system) |
Penalty interest |
20% per annum | Double the legal interest rate per annum |
Attempt to evade or defeat tax |
Fine of P30K to P100K and imprisonment of 2 to 4 years | Fine of P30K to P100K and imprisonment of 2 to 4 years |
Offenses on the printing of receipts/invoices |
Fine of P1K to P50K and
imprisonment of 2 to 4 years |
|
**a.) Professional fees, talent fees, commissions, etc. for services rendered by individuals, b.) Income distribution to beneficiaries of estates and trusts, c.) Income payment to certain brokers and agents, d.) Income payments to partners of general professional partnerships, e.) Professional fees paid to medical practitioners and f.) Commission of independent and/or exclusive sales representatives, and marketing agents of companies.
https://www.rappler.com/thought-leaders/192873-train-tax-reform-law-what-does-it-change-explainer
https://www.bir.gov.ph/index.php/rulings-and-legal-matters/rulings/2018-bir-rulings.html
https://www.pinoymoneytalk.com/philippine-tax-reform-list-of-new-taxes/
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