Percentage tax is a 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 and/or receipts do not exceed Peso 750,000 and who are not Value Added Tax (VAT)-registered.
Who are required to File Percentage Tax Returns
- Any person who is not a VAT-registered person (persons exempt from VAT under Sec. 109z of the Tax Code).
- Domestic carriers and keepers of garages, except owners of bancas and owners of animal drawn two- wheeled vehicle.
- Operators of international air and shipping carriers doing business in the Philippines.
- Franchise grantees of electric, gas or water utilities.
- Franchise grantees of radio and/or television broadcasting companies whose gross annual receipts for the preceding year do not exceed Ten Million Pesos (P 10,000,000.00) and did not opt to register as VAT taxpayers.
- Operators of communication equipment sending overseas dispatch, messages, or conversations from the Philippines, except on services involving the following.
- Government of the Philippines - for messages transmitted by the Government of the Republic of the Philippines or any of its political subdivisions and instrumentalities.
- Diplomatic services - for messages transmitted by any embassy and consular offices of a foreign government.
- International organizations - for messages transmitted by a public international organization or any of its agencies based in the Philippines enjoying privileges, exemptions and immunities which the government of the Philippine is committed to recognize pursuant to an international agreement.
- News Services - for messages from any newspaper, press association, radio or television newspaper broadcasting agency, or new sticker services to any other newspaper, press association, radio or television, newspaper, broadcasting agency or new sticker services, or to bonafide correspondents, which messages deal exclusively with the collection of news items for, or the dissemination of news items through public press, radio or television broadcasting or a new sticker service furnishing a general news service similar to that of the public press.
- Banks and non-bank financial intermediaries and finance companies.
- Life insurance premiums.
- Agents of foreign insurance companies.
- Proprietor, lessee, or operator of cockpits, cabarets, night or day clubs, boxing exhibitions, professional basketball games, jai-alai and race tracks.
- Every stock broker who effected a sale, barter, exchange or other disposition of shares of stock listed and traded through the Local Stock Exchange (LSE) other than the sale by a dealer in securities.
- Corporate issuer / stock broker, whether domestic of foreign, engaged in the sale, barter, exchange or other disposition through Initial Public Offering (IPO) seller in secondary public offering of shares of stock in closely held corporations.
Last Updated on: 15-02-2010
