Train Law Ra 10953

TRAIN LAW (January 1 2018)
REPUBLIC ACT No. 10963 members: Provided, That the Cooperative

Development Authority shall submit to the
An Act Amending Sections 5, 6, 24, 25, 27, 31, 32, 33, 34, 51, 52, Bureau a tax incentive report, which shall
56, 57, 58, 74, 79, 84, 86, 90, 91, 97, 99, 100, 101, 106, 107, 108, include information on the income tax, value-
109, 110, 112, 114, 116, 127, 128, 129, 145, 148, 149, 151, 155, added tax, and other tax incentives availed of
171, 174, 175, 177, 178, 179, 180, 181, 182, 183, 186, 188, 189, by cooperatives registered and enjoying
190, 191, 192, 193, 194, 195, 196, 197, 232, 236, 237, 249, 254, incentives under Republic Act No. 6938, as
264, 269, and 288; Creating New Sections 51-A, 148-A, 150-A, amended: Provided, further, That the
150-B, 237-A, 264-A, 264-B, and 265-A; and Repealing Sections information submitted by the Cooperative
35, 62, And 89; All Under Republic Act No. 8424, Otherwise Development Authority to the Bureau shall be
Known as the National Internal Revenue Code of 1997, as submitted to the Department of Finance and
Amended, and for Other Purposes shall be included in the database created
under Republic Act No. 10708, otherwise
Be it enacted by the Senate and House of Representatives of the known as ‘The Tax Incentives Management
Philippine Congress Assembled: and Transparency Act (TIMTA)’.
Section 1. Title. - This Act shall be known as the "Tax Reform for "x x x."
Acceleration and Inclusion (TRAIN)".
Section 4. Section 6 of the NIRC, as amended, is hereby further
Section 2. Declaration of Policy. - It is hereby declared the policy amended to read as follows:
of the State:
"Sec. 6. Power of the Commissioner to Make Assessments and
(a) To enhance the progressivity of the tax system Prescribe Additional Requirements for Tax Administration and
through the rationalization of the Philippine internal Enforcement -
revenue tax system, thereby promoting sustainable
and inclusive economic growth; "(A) Examination of Returns and
Determination of Tax Due.— After a return
(b) To provide, as much as possible, an equitable relief has been filed as required under the
to a greater number of taxpayers and their families in provisions of this Code, the Commissioner or
order to improve levels of disposable income and his duly authorized representative may
increase economic activity; and authorize the examination of any taxpayer and
the assessment of the correct amount of tax,
notwithstanding any law requiring the prior
(c) To ensure that the government is able to provide for
authorization of any government agency or
the needs of those under its jurisdiction and care
instrumentality: Provided, however, That
through the provision of better infrastructure, health,
failure to file a return shall not prevent the
education, jobs, and social protection for the people.
Commissioner from authorizing the
examination of any taxpayer.
Section 3. Section 5 of the National Internal Revenue Code of
1997 (NIRC), as amended, is hereby further amended to read as
"x x x
follows:
"x x x
"Sec. 5. Power of the Commissioner to Obtain Information, and
to Summon, Examine, and Take Testimony of Persons. - In
ascertaining the correctness of any return, or in making a return "(B) x x x
when none has been made, or in determining the liability of any
person for any internal revenue tax, or in collecting any such "(C) x x x
liability, or in evaluating tax compliance, the Commissioner is
authorized: "(D) x x x
"(A) x x x "(E) Authority of the Commissioner to

Prescribe Real Property Values.— The
"(B) To obtain on a regular basis from any Commissioner is hereby -authorized to divide
person other than the person whose internal the Philippines into different zones or areas
revenue tax liability is subject to audit or and shall, upon mandatory consultation with
investigation, or from any office or officer of competent appraisers both from the private
the national and local governments, and public sectors, and with prior notice to
government agencies and instrumentalities, affected taxpayers, determine the fair market
including the Bangko Sentral ng Pilipinas and value af real properties located in each zone
government-owned or -controlled or area, subject to automatic adjustment once
corporations, any information such as, but not every three (3) years through rules and
limited to, costs and volume of production, regulations issued by the Secretary of Finance
receipts or sales and gross incomes of based on the current Philippine valuation
taxpayers, and the names, addresses, and standards: Provided, That no adjustment in
financial statements of corporations, mutual zonal valuation shall be valid unless published
fund companies, insurance companies, in a newspaper of general circulation in the
regional operating headquarters of province, city or municipality concerned, or in
multinational companies, joint accounts, the absence thereof, shall be posted in the
associations, joint ventures or consortia and provincial capitol, city or municipal hall and in
registered partnerships, and their two (2) other conspicuous public places
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therein: Provided, further, That the basis of "Over ₱400,000 but not over ₱30,000 + 25% of the
any valuation, including the records of ₱800,000 excess over ₱400,000
consultations done, shall be public records
open to the inquiry of any taxpayer. For "Over ₱800,000 but not over ₱130,000 + 30% of the
purposes of computing any internal revenue ₱2,000,000 excess over ₱800,000
tax, the value of the property shall be, "Over ₱2,000,000 but not over ₱490,000 + 32% of the
whichever is the higher of: ₱5,000,000 excess over ₱2,000,000
"Over ₱8,000,000 ₱2,410,000 + 35% of the
"(1) the fair market value as
excess over ₱8,000,000
determined by the Commissioner; or
"(2) the fair market value as shown in "Tax Schedule Effective January 1, 2023 and
the schedule of values of the onwards:
Provincial and City Assessors."
"Not over ₱250,000 0%
"Over ₱250,000 but not over 15% of the excess over
amended to read as follows:
₱400,000 ₱250,000
"Sec. 24. Income Tax Rates. - "Over ₱400,000 but not over ₱22,500 + 20% of the excess
₱800,000 over ₱400,000
"(A) Rates of Income Tax on Individual Citizen and Individual, "Over ₱800,000 but not over ₱102,500 + 25% of the
Resident Alien of the Philippines - ₱2,000,000 excess over ₱800,000
"(1) An income tax is hereby imposed: "Over ₱2,000,000 but not over ₱402,500 + 30% of the
₱8,000,000 excess over ₱2,000,000
"(a) On the taxable income defined in "Over ₱8,000,000 ₱2,202,500 + 35% of the
Section 31 of this Code, other than excess over ₱8,000,000
income subject to tax under
Subsections (B), (C), and (D) of this "For married individuals, the husband and
Section, derived for each taxable wife, subject to the provision of Section 51(D)
year from all sources within and hereof, shall compute separately their
without the Philippines by every individual income tax based on their
individual citizen of the Philippines respective total taxable
residing therein; income: Provided, That if any income cannot
be definitely attributed to or identified as
"(b) On the taxable income defined in income exclusively earned or realized by
Section 31 of this Code, other than either of the spouses, the same shall be
income subject to tax under divided equally between the spouses for the
Subsections (B), (C), and (D) of this purpose of determining their respective
Section, derived for each taxable taxable income.
year from all sources within the
Philippines by an individual citizen of "Provided, That minimum wage earners as
the Philippines who is residing defined in Section 22(HH) of this Code shall be
outside of the Philippines including exempt from the payment of income tax on
overseas contract workers referred their taxable income: Provided, further, That
to in Subsection (C) of Section 23 the holiday pay, pay received by such
hereof; and minimum wage earners shall likewise be
exempt from income tax.
"(c) On the taxable income defined in
Section 31 of this Code, other than "(b) Rate of Tax on Income of "Purely
income subject to tax under Self-employed Individuals and/ or
Subsections (B), (C), and (D) of this Professionals Whose Gross Sales or
Section, derived for each taxable Gross Receipts and Other Non-
year from all sources within the operating Income Does Not Exceed
Philippines by an individual alien who the Value-added Tax (VAT) Threshold
is a resident of the Philippines. as Provided in Section 109(BB).—
Self-employed individuals and/or
"(2) Rates of Tax on Taxable Income of professionals shall have the option to
Individuals. - The tax shall be computed in avail of an eight percent (8%) tax on
accordance with and at the rates established gross sales or gross receipts and
in the following schedule: other non-operating income in
excess of Two hundred fifty thousand
"(a) Tax Schedule Effective January 1, pesos (₱250,000) in lieu of the
2018 until December 31, 2022: graduated income tax rates under
Subsection (A)(2)(a) of this Section
"Not over ₱250,000 0% and the percentage tax under
Section 116 of this Code.
"Over ₱250,000 but not over 20% of the excess over
₱400,000 ₱250,000
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"(c) Rate of Tax for Mixed Income should the holder of the certificate pre-
Earners.— Taxpayers earning both terminate the deposit or investment before
compensation income and income the fifth (5th) year, a final tax shall be imposed
from business or practice of on the entire income and shall be deducted
profession shall be subject to the and withheld by the depository bank from the
following taxes: proceeds of the long-term deposit or
investment certificate based on the remaining
"(1) All Income from Compensation – The maturity thereof:
rates prescribed under Subsection (A)(2)(a) of
this Section. "x x x."
"(2) All Income from Business or Practice of "(2) Cash and/or Property Dividends. - A final
Profession – tax at the rate of ten percent (10%) shall be
imposed upon the cash and/or property
"(a) If Total Gross Sales and/or Gross Receipts dividends actually or constructively received
and Other Non-operating Income Do Not by an individual from a domestic corporation
Exceed the VAT Threshold as Provided in or from a joint stock company, insurance or
Section 109(BB) of this Code.— The rates mutual fund companies and regional
prescribed under Subsection (A)(2)(a) of this operating headquarters of multinational
Section on taxable income, or eight percent companies, or on the share of an individual in
(8%) income tax based on gross sales or gross the distributable net income after tax of a
receipts and other non-operating income in partnership (except a general professional
lieu of the graduated income tax rates under partnership) of which he is a partner, or on the
Subsection (A)(2)(a) of this Section and the share of an individual in the net income after
percentage tax under Section 116 of this tax of an association, a joint account, or a joint
Code. venture or consortium taxable as a
corporation of which he is a member or co-
"(b) If Total Gross Sales and/or Gross Receipts venturer.
and Other Non-operating Income Exceeds the
VAT Threshold as Provided in Section 109(BB) "(C) Capital Gains from Sale of Shares of Stock not Traded in the
of this Code.— The rates prescribed under Stock Exchange. - The provisions of Section 39(B)
Subsection (A)(2)(a) of this Section. notwithstanding, a final tax at the rate of fifteen percent (15%)
is hereby imposed upon the net capital gains realized during the
"(B) Rate of Tax on Certain Passive Income.— taxable year from the sale, barter, exchange or other disposition
of shares of stock in a domestic corporation, except shares sold,
or disposed of through the stock exchange.
"(1) Interests, Royalties, Prizes, and Other
Winnings.— A final tax at the rate of twenty
percent (20%) is hereby imposed upon the "x x x."
amount of interest from any currency bank
deposit and yield or any other monetary Section 6. Section 25 of the NIRC, as amended, is hereby further
benefit from deposit substitutes and from am.ended to read as follows:
trust funds and. similar arrangements;
royalties, except on books, as well as other "Sec. 25. Tax on Nonresident Alien Individual -
literary works and musical compositions,
which shall be imposed a final tax of ten "(A) Nonresident Alien Engaged in Trade or
percent (10%); prizes (except prizes Business Within the Philippines. - "x x x
amounting to Ten thousand pesos (₱10,000)
or less which shall be subject to tax under "(B) Nonresident Alien Individual Not Engaged
Subsection (A) of Section 24; and other in Trade or Business Within the Philippines. - "x
winnings (except winnings amounting to Ten xx
thousand pesos (₱10,000) or less from
Philippine Charity Sweepstakes and Lotto
"(C) Alien Individual Employed by Regional or
which shall be exempt), derived from sources
Area Headquarters and Regional Operating
within the Philippines: Provided, however,
Headquarters of Multinational Companies. -
That interest income received by an individual
There shall be levied, collected and paid for
taxpayer (except a nonresident individual)
each taxable year upon the gross income
from a depository bank under the expanded
received by every alien individual employed by
foreign currency deposit system shall be
regional or area headquarters and regional
subject to a final income tax at the rate of
operating headquarters established in the
fifteen percent (15%) of such interest
Philippines by multinational companies as
income: Provided, further, That interest
salaries, wages, annuities, compensation,
income from long-term deposit or investment
remuneration and other emoluments, such as
in the form of savings, common or individual
honoraria and allowances, from such regional
trust funds, deposit substitutes, investment
or area headquarters and regional operating
management accounts and other investments
headquarters, a tax equal to fifteen percent
evidenced by certificates in such form
(15%) of such gross
prescribed by the Bangko Sentral ng Pilipinas
income: Provided, however, That the same tax
(BSP) shall be exempt from the tax imposed
treatment shall apply to Filipinos employed
under this Subsection: Provided, finally, That
and occupying the same position as those of
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aliens employed by these multinational "Sec. 27. Rates of Income Tax on Domestic Corporations -
companies. For purposes of this Chapter, the
term ‘multinational company’ means a foreign "(A) In General.— x x x
firm or entity engaged in international trade
with affiliates or subsidiaries or branch offices "x x x
in the Asia-Pacific Region and other foreign
markets.
"(C) Government-owned or -Controlled
Corporations, Agencies or Instrumentalities -
"(D) Alien Individual Employed by Offshore The provisions of existing special or general
Banking Units. - There shall be levied, laws to the contrary notwithstanding, all
collected and paid for each taxable year upon corporations, agencies, or instrumentalities
the gross income received by every alien owned or controlled by the Government,
individual employed by offshore banking units except the Government Service Insurance
established in the Philippines as salaries, System (GSIS), the Social Security System
wages, annuities, compensation, (SSS), the Philippine Health Insurance
remuneration and other emoluments such as Corporation (PHIC), and the local water
honoraria and allowances, from such offshore districts shall pay such rate of tax upon their
banking units, a tax equal to fifteen percent taxable income as are imposed by this Section
(15%) of such gross upon corporations or associations engaged in
income: Provided, however, That the same tax similar business, industry, or activity.
treatment shall apply to Filipinos employed
and occupying the same position as those of
"(D) Rates of Tax on Certain Passive Incomes -
aliens employed by these offshore banking
units.
"(1) Interest from Deposits and Yield
or any other Monetary Benefit from
"(E) Alien Individual Employed by Petroleum
Deposit Substitutes and from Trust
Service Contractor and Subcontractor. - An
Funds and Similar Arrangements, and
alien individual who is a permanent resident
Royalties. - A final tax at the rate of
of a foreign country but who is employed and
twenty percent (20%) is hereby
assigned in the Philippines by a foreign service
imposed upon the amount of interest
contractor or by a foreign service
on currency bank deposit and yield or
subcontractor engaged in petroleum
any other monetary benefit from
operations in the Philippines shall be liable to
deposit substitutes and from trust
a tax of fifteen percent (15%) of the salaries,
funds and similar arrangements
wages, annuities, compensation,
received by domestic corporations,
remuneration and other emoluments, such as
and royalties, derived from sources
honoraria and allowances, received from such
within the
contractor or
Philippines: Provided, however, That
subcontractor: Provided, however, That the
interest income derived by a
same tax treatment shall apply to a Filipino
domestic corporation from a
employed and occupying the same position as
depository bank under the expanded
an alien employed by petroleum service
foreign currency deposit system shall
contractor and subcontractor.
be subject to a final income tax at the
rate of fifteen percent (15%) of such
"Any income earned from all other sources interest income.
within the Philippines by the alien employees
referred to under Subsections (C), (D), and (E)
"(2) Capital Gains from the Sale of
hereof shall be subject to the pertinent
Shares of Stock Not Traded in the
income tax, as the case may be, imposed
Stock Exchange. - A final tax at the
under this Code.
rate of fifteen percent (15%) shall be
imposed on net capital gains realized
"(F) The preferential tax treatment provided in during the taxable year from the sale,
Subsections (C), (D), and (E) of this Section exchange or other disposition of
shall not be applicable to regional shares of stock in a domestic
headquarters (RHQs), regional operating corporation except shares sold or
headquarters (ROHQs), offshore banking units disposed of through the stock
(OBUs) or petroleum service contractors and exchange.
subcontractors registering with the Securities
and Exchange Commission (SEC) after January
"x x x"
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 "Sec. 31. Taxable Income Defined. - The term ‘taxable income’
and future qualified employees." means the pertinent items of gross income specified in this
Code, less deductions, if any, authorized for such types of
income by this Code or other special laws."
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Section 9. Section 32 of the NIRC, as amended, is hereby further of income tax under Subsections (B), (C), (D), and (E) of
amended to read as follows: Section 25.
"Sec. 32. Gross Income - "x x x."
"(A) General Definition - x x x Section 11. Section 34 of the NIRC, as amended, is hereby further
"(B) Exclusions from Gross Income. - x x x
"Sec. 34. Deductions from Gross Income. - Except for taxpayers
"(1) x x x earning compensation income arising from personal services
rendered under an employer-employee relationship where no
"(7) Miscellaneous Items - deductions shall be allowed under this Section, in computing
taxable income subject to income tax under Sections 24(A);
25(A); 26; 27(A), (B), and (C); and 28(A)(1), there shall be allowed
"(a) x x x
the following deductions from gross income:
"(e) 13th Month Pay and Other Benefits. - Gross
"(A) Expenses.—
benefits received by officials and employees of public
and private entities: Provided, however, That the total
exclusion under this subparagraph shall not exceed "(1) Ordinary and Necessary Trade,
Ninety thousand pesos (₱90,000) which shall cover: Business or Professional Expenses -
"(i) Benefits received by officials and "(a) In General - x x x

employees of the national and local
government pursuant to Republic Act No. "x x x
6686;
"(L) Optional Standard Deduction (OSD) - In
"(ii) Benefits received by employees pursuant lieu of the deductions allowed under the
to Presidential Decree No. 851, as amended by preceding Subsections, an individual subject
Memorandum Order No. 28, dated August 13, to tax under Section 24, other than a
1986; nonresident alien, may elect a standard
deduction in an amount not exceeding forty
"(iii) Benefits received by officials and percent (40%) of his gross sales or gross
employees not covered by Presidential Decree receipts, as the case may be. In the case of a
No. 851, as amended by Memorandum Order corporation subject to tax under Sections
No. 28, dated August 13,1986; and 27(A) and 28(A)(l), it may elect a standard
deduction in an amount not exceeding forty
percent (40%) of its gross income as defined in
"(iv) Other benefits such as productivity
Section 32 of this Code. Unless the taxpayer
incentives and Christmas bonus."
signifies in his return his intention to elect the
optional standard deduction, he shall be
considered as having availed himself of the
deductions allowed in the preceding
Subsections. Such election when made in the
"Sec. 33. Special Treatment of Fringe Benefit. - return shall be irrevocable for the taxable year
for which the return is made: Provided, That
(a) Imposition of Tax. - Effective January 1, 2018 and an individual who is entitled to and claimed for
onwards, a final tax of thirty-five percent (35%) is the optional standard deduction shall not be
hereby imposed on the grossed-up monetary value of required to submit with his tax return such
fringe benefit furnished or granted to the employee financial statements otherwise required
(except rank and file employees as defined herein) by under this Code: Provided, further, That a
the employer, whether an individual or a corporation general professional partnership and the
(unless the fringe benefit is required by the nature of, partners comprising such partnership may
or necessary to the trade, business or profession of the avail of the optional standard deduction only
employer, or when the fringe benefit is for the once, either by the general professional
convenience or advantage of the employer). The tax partnership or the partners comprising the
herein imposed is payable by the employer which tax partnership: Provided, finally, That except
shall be paid in the same manner as provided for under when the Commissioner otherwise permits,
Section 57(A) of this Code. The grossed-up monetary the said individual shall keep such records
value of the fringe benefit shall be determined by pertaining to his gross sales or gross receipts,
dividing the actual monetary value of the fringe benefit the said corporation shall keep such records
by sixty five percent (65%) effective January 1, 2018 pertaining to his gross income as defined in
and onwards: Provided, however, That fringe benefit Section 32 of this Code during the taxable
furnished to employees and taxable under Subsections year, as may be required by the rules and
(B), (C), (D), and (E) of Section 25 shall be taxed at the regulations promulgated by the Secretary of
applicable rates imposed thereat: Provided, Finance, upon recommendation of the
further, That the grossed-up value of the fringe benefit Commissioner.
shall be determined by dividing the actual monetary
value of the fringe benefit by the difference between "Notwithstanding the provisions of the preceding Subsections, x
one hundred percent (100%) and the applicable rates x x."
5
Section 12. Section 35 of the NIRC, as amended, is hereby business in the Philippines, shall render, in duplicate, a true and
repealed. accurate quarterly income tax return and final or adjustment
return in accordance with the provisions of Chapter XII of this
Section 13. Section 51 of the NIRC, as amended, is hereby further Title. The income tax return shall consist of a maximum of four
amended to read as follows: (4) pages in paper form or electronic form, be filed by the
president, vice president or other principal officer, shall be
"Sec. 51. Individual Returns - sworn to by such officer and by the treasurer or assistant
treasurer, and shall only contain the following information:
"(A) x x x
"(1) Corporate profile and information;
"(1) x x x
"(2) Gross sales, receipts or income from
services rendered, or conduct of trade or
"(2) The following individuals shall not be required to
business, except income subject to final tax as
file an income tax return:
provided under this Code;
"(a) An individual whose taxable income does not
"(3) Allowable deductions under this Code;
exceed Two hundred fifty thousand pesos (₱250,000)
"(4) Taxable income as defined in Section 31
under Section 24(A)(2)(a): Provided, That a citizen of
of this Code; and
the Philippines and any alien individual engaged in
business or practice of profession within the Philippines
shall file an income tax return, regardless of the amount "(5) Income tax due and payable.
of gross income;
Provided, That the foregoing provisions shall not affect the
"x x x implementation of Republic Act No. 10708 or TIMTA.
"(5) The income tax return (ITR) shall consist of a "x x x."
maximum of four (4) pages in paper form or electronic
form, and shall only contain the following information: Section 16. Section 56 of the NIRC, as amended. is hereby further
"(A) Personal profile and information;
"Sec. 56. Payment and Assessment of Income Tax for Individuals
"(B) Total gross sales, receipts or income from and Corporations -
compensation for services rendered, conduct of
trade or business or the exercise of a profession, "(A) Payment of Tax -
except income subject to final tax as provided
under this Code; "(1) x x -
"(C) Allowable deductions under this Code; "(2) Installment of Payment. - When a tax due is in excess
of Two thousand pesos (₱2,000), the taxpayer other than
"(D) Taxable income as defined in Section 31 of a corporation, may elect to pay the tax in two (2) equal
this Code; and installments, in which case, the first installment shall be
paid at the time the return is filed and the second
"(E) Income tax due and payable. installment on or before October 15 following the close
of the calendar year, if any installment is not paid on or
before the date fixed for its payment, the whole amount
"x x x."
of the tax unpaid becomes due and payable together with
the delinquency penalties."
Section 14. A new section designated as Section 51-A of the
NIRC, as amended, is hereby inserted to read as follows:
"Sec. 51-A. Substituted Filing of Income Tax Returns by
Employees Receiving Purely Compensation Income - Individual
"Sec. 57. Withholding of Tax at Source. -
taxpayers receiving purely compensation income, regardless of
amount, from only one employer in the Philippines for the
calendar year, the income tax of which has been withheld "(A) x x -
correctly by the said employer (tax due equals tax withheld) shall
not be required to file an annual income tax return. The "(B) Withholding of Creditable Tax at Source. - The
certificate of withholding filed by the respective employers, duly Secretary of Finance may, upon the recommendation of
stamped ‘received’ by the BIR, shall be tantamount to the the Commissioner, require the withholding of a tax on the
substituted filing of income tax returns by said employees." items of income payable to natural or juridical persons,
residing in the Philippines, by payor-corporation/persons
Section 15. Section 52 of the NIRC, as amended, is hereby further as provided for by law, at the rate of not less than one
amended to read as follows: percent (1%) but not more than thirty-two percent (32%)
thereof, which shall be credited against the income tax
liability of the taxpayer for the taxable
"Sec. 52. Corporation Returns -
year: Provided, That, beginning January 1, 2019, the rate
of withholding shall not be less than one percent (1%) but
"(A) Requirements. - Every corporation subject to the tax herein
not more than fifteen percent (15%) of the income
imposed, except foreign corporations not engaged in trade or
payment.
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"(C) x x - " "(2) x x x; and
Section 18. Section 58 of the NIRC, as amended, is hereby further "(3) x x x.

"(E) Nonresident Aliens - x x x
"Sec. 58. Return and Payment of Taxes Withheld at Source. -
"(F) Year-end Adjustment. - x x x."
"(A) x x x
"x x x amended to read as follows:
"The return for final and creditable withholding taxes shall be "Sec. 84. Rate of Estate Tax. - There shall be levied, assessed,
filed and the payment made not later than the last day of the collected and paid upon the transfer of the net estate as
month following the close of the quarter during which determined in accordance with Sections 85 and 86 of every
withholding was made." decedent, whether resident or nonresident of the Philippines, a
tax at the rate of six percent (6%) based on the value of such net
Section 19. Section 62 of the NIRC, as amended, is hereby estate."
repealed.
Section 20. Section 74 of the NIRC, as amended. is hereby further amended to read as follows:
"Sec. 86. Computation of Net Estate.— For the purpose of the
"Sec. 74. Declaration of Income Tax for Individuals. - tax imposed in this Chapter, the value of the net estate shall be
determined:
"(A) In General - Except as otherwise provided in this
Section, every individual subject to income tax under "(A) Deductions Allowed to the Estate of a Citizen or a Resident -
Sections 24 and 25(A) of this Title, who is receiving self- In the case of a citizen or resident of the Philippines, by
employment income, whether it constitutes the sole deducting from the value of the gross estate—
source of his income or in combination with salaries,
wages and other fixed or determinable income, shall "(1) Standard Deduction - An amount equivalent to Five
make and file a declaration of his estimated income for million pesos (₱5,000,000).
the current taxable year on or before May 15 of the
same taxable year. x x x "(2) For claims against the estate: Provided, That at the
time the indebtedness was incurred the debt instrument
"(B) Return and Payment of Estimated Income Tax by was duly notarized and, if the loan was contracted within
Individuals - The amount of estimated income as three (3) years before the death of the decedent, the
defined in Subsection (C) with respect to which a administrator or executor shall submit a statement
declaration is required under Subsection (A) shall be showing the disposition of the proceeds of the loan.
paid in four (4) installments. The first installment shall
be paid at the time of declaration and the second and "(3) For claims of the deceased against insolvent persons
third shall be paid on August 15 and November 15 of where the value of decedent’s interest therein is included
the current year, respectively. The fourth installment in the value of the gross estate.
shall be paid on or before May 15 of the following
calendar year when the final adjusted income tax "(4) For unpaid mortgages upon, or any indebtedness in
return is due to be filed. respect to, property where the value of decedent’s
interest therein, undiminished by such mortgage or
"(C) x x - " indebtedness, is included in the value of the gross estate,
but not including any income tax upon income received
Section 21. Section 79 of the NIRC, as amended. is hereby further after the death of the decedent, or property taxes not
amended to read as follows: accrued before his death, or any estate tax. The
deduction herein allowed in the case of claims against the
"Sec. 79. Income Tax Collected at Source. - estate, unpaid mortgages or any indebtedness shall,
when founded upon a promise or agreement, be limited
"x x x to the extent that they were contracted bona fide and for
an adequate and full consideration in money or money’s
worth. There shall also be deducted losses incurred
"(C) Refunds or Credits. -
during the settlement of the estate arising from fires,
storms, shipwreck, or other casualties, or from robbery,
"(1) Employer. - x x x
theft or embezzlement, when such losses are not
compensated for by insurance or otherwise, and if at the
"(2) Employees. - x x x time of the filing of the return such losses have not been
claimed as a deduction for the income tax purposes in an
"x x x income tax return, and provided that such losses were
incurred not later than the last day for the payment of
"(D) Withholding on Basis of Average Wages. - x x x the estate tax as prescribed in Subsection (A) of Section
91.
"(1) x x x
7
"(5) Property Previously Taxed. - An amount equal to the items shall be used for the purpose of computing
value specified below of any property forming part of the the deduction.
gross estate situated in the Philippines of any person who
died within five (5) years prior to the death of the "(6) Transfers for Public Use - The amount of all bequests,
decedent, or transferred to the decedent by gift within legacies, devises or transfers to or for the use of the
five (5) years prior to his death, where such property can Government of the Republic of the Philippines, or any
be identified as having been received by the decedent political subdivision thereof for exclusively public
from the donor by gift, or from such prior decedent by purposes.
gift, bequest, devise or inheritance, or which can be
identified as having been acquired in exchange for "(7) The Family Home. - An amount equivalent to the
property so received: current fair market value of the decedent’s family
home: Provided, however, That if the said current fair
"One hundred percent (100%) of the value, if the market value exceeds Ten million pesos (₱10,000,000),
prior decedent died within one (1) year prior to the the excess shall be subject to estate tax.
death of the decedent, or if the property was
transferred to him by gift, within the same period "(8) Amount Received by Heirs Under Republic Act No.
prior to his death; 4917 - Any amount received by the heirs from the
decedent’s employee as a consequence of the death of
"Eighty percent (80%) of the value, if the prior the decedent-employee in accordance with Republic Act
decedent died more than one (1) year but not more No. 4917: Provided, That such amount is included in the
than two (2) years prior to the death of the gross estate of the decedent.
decedent, or if the property was transferred to him
by gift within the same period prior to his death; "(B) Deductions Allowed to Nonresident Estates - In the case of a
nonresident not a citizen of the Philippines, by deducting from
"Sixty percent (60%) of the value, if the prior the value of that part of his gross estate which at the time of his
decedent died more than two (2) years but not death is situated in the Philippines:
more than three (3) years prior to the death of the
decedent, or if the property was transferred to him "(1) Standard Deduction - An amount equivalent to Five
by gift within the same period prior to his death; hundred thousand pesos (₱500,000);
"Forty percent (40%) of the value, if the prior "(2) That proportion of the deductions specified in
decedent died more than three (3) years but not paragraphs (2), (3), and (4) of Subsection (A) of this
more than four (4) years prior to the death of the Section which the value of such part bears to the value of
decedent, or if the property was transferred to him his entire gross estate wherever situated;
by gift within the same period prior to his death; and
"(3) Property Previously Taxed - x x x
"Twenty percent (20%) of the value, if the prior
decedent died more than four (4) years but not
"(4) Transfers for Public Use - The amount of all bequests,
more than five (5) years prior to the death of the
legacies, devises or transfers to or for the use of the GRPh
decedent, or if the property was transferred to him
or any political subdivision thereof, for exclusively public
by gift within the same period prior to his death.
purposes.
"These deductions shall be allowed only where a

"(C) Share in the Conjugal Property - The net share of the
donor’s tax, or estate tax imposed under this Title
surviving spouse in the conjugal partnership property as
was finally determined and paid by or on behalf of
diminished by the obligations properly chargeable to such
such donor, or the estate of such prior decedent, as
property shall, for the purpose of this Section, be deducted from
the case may be, and only in the amount finally
the net estate of the decedent.
determined as the value of such property in
determining the value of the gift, or the gross estate
"(D) Tax Credit for Estate Taxes Paid to a Foreign Country -
of such prior decedent, and only to the extent that
the value of such property is included in the
decedent’s gross estate, and only if in determining "(1) In General - The tax imposed by this Title shall be
the value of the estate of the prior decedent, no credited with the amounts of any estate tax imposed
deduction was allowable under paragraph (5) in by the authority of a foreign country.
respect of the property or properties given in
exchange therefor. Where a deduction was allowed "(2) Limitations on Credit. - The amount of the credit
of any mortgage or other lien in determining the taken under this Section shall be subject to each of
donor’s tax, or the estate tax of the prior decedent, the following limitations:
which was paid in whole or in part prior to the
decedent’s death, then the deduction allowable "(a) The amount of the credit in respect to the tax
under said Subsection shall be reduced by the paid to any country shall not exceed the same
amount so paid. Such deduction allowable shall be proportion of the tax against which such credit is
reduced by an amount which bears the same ratio taken, which the decedent’s net estate situated
to the amounts allowed as deductions under within such country taxable under this Title bears
paragraphs (2), (3), (4), and (6) of this Subsection as to his entire net estate; and
the amount otherwise deductible under said
paragraph (5) bears to the value of the decedent’s "(b) The total amount of the credit shall not
estate. Where the property referred to consists of exceed the same proportion of the tax against
two or more items, the aggregate value of such which such credit is taken, which the decedent’s
8
net estate situated outside the Philippines taxable Section 27. Section 97 of the NIRC, as amended, is hereby further
under this Title bears to his entire net estate." amended to read as follows:
Section 24. Section 89 of the NIRC, as amended, is hereby "Sec. 97. Payment of Tax Antecedent to the Transfer of Shares,
repealed. Bonds or Rights - x x x.
Section 25. Section 90 of the NIRC, as amended, is hereby further "If a bank has knowledge of the death of a person, who
amended to read as follows: maintained a bank deposit account alone, or jointly with
another, it shall allow any withdrawal from the said deposit
"Sec. 90. Estate Tax Returns. - account, subject to a final withholding tax of six percent (6%).
For this purpose, all withdrawal slips shall contain a statement
"(A) Requirements. - In all cases of transfers subject to the tax to the effect that all of the joint depositors are still living at the
imposed herein, or regardless of the gross value of the estate, time of withdrawal by any one of the joint depositors and such
where the said estate consists of registered or registrable statement shall be under oath by the said depositors."
property such as real property, motor vehicle, shares of stock or
other similar property for which a clearance from the Bureau of Section 28. Section 99 of the NIRC, as amended, is hereby further
Internal Revenue is required as a condition precedent for the amended to read as follows:
transfer of ownership thereof in the name of the transferee, the
executor, or the administrator, or any of the legal heirs, as the "Sec. 99. Rate of Tax Payable by Donor -
case may be, shall file a return under oath in duplicate, setting
forth: "(A) In General. - The tax for each calendar
year shall be six percent (6%) computed on the
"(1) x x x basis of the total gifts in excess of Two
hundred fifty thousand pesos (₱250,000)
"(2) x x x exempt gift made during the calendar year.
"(3) Such part of such information as may at "(B) Any contribution in cash or in kind to any
the time be ascertainable and such candidate, political party or coalition of parties
supplemental data as may be necessary to for campaign purposes shall be governed by
establish the correct taxes. the Election Code, as amended."
"Provided, however, That estate tax returns showing a gross Section 29. Section 100 of the NIRC, as amended, is hereby
value exceeding Five million pesos (₱5,000,000) shall be further amended to read as follows:
supported with a statement duly certified to by a Certified Public
Accountant containing the following: "Sec. 100. Transfer for Less Than Adequate and Full
Consideration - Where property, other than real property
"x x x referred to in Section 24(D), is transferred for less than an
adequate and full consideration in money or money’s worth,
"(B) Time for Filing - For the purpose of determining the estate then the amount by which the fair market value of the property
tax provided for in Section 84 of this Code, the estate tax return exceeded the value of the consideration shall, for the purpose of
required under the preceding Subsection (A) shall be filed within the tax imposed by this Chapter, be deemed a gift, and shall be
one (1) year from the decedent’s death. included in computing the amount of gifts made during the
calendar year: Provided, however, That a sale, exchange, or
other transfer of property made in the ordinary course of
"x x x."
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."
Section 30. Section 101 of the NIRC, as amended, is hereby
"Sec. 91. Payment of Tax. -
further amended to read as follows:
"(A) Time of Payment - x x x

"Sec. 101. Exemption of Certain Gifts - The following gifts or
donations shall be exempt from the tax provided for in this
"(B) Extension of Time - x x x Chapter:
"x x x "(A) In the Case of Gifts Made by a Resident -
"(C) Payment by Installment - In case the "(1) Gifts made to or for the use of the
available cash of the estate is insufficient to National Government or any entity created by
pay the total estate tax due, payment by any of its agencies which is not conducted for
installment shall be allowed within two (2) profit, or to any political subdivision of the said
years from the statutory date for its payment Government; and
without civil penalty and interest.
"(2) Gifts in favor of an educational and/or
"(D) Liability for Payment - x x x charitable, religious, cultural or social welfare
corporation, institution, accredited
"x x x nongovernment organization, trust or
philanthropic organization or research
9
institution or Tourism Infrastructure and

organization: Provided, however, That not Enterprise Zone Authority
more than thirty percent (30%) of said gifts (TIEZA) subject to the
shall be used by such donee for administration provisions under Republic
purposes. For the purpose of this exemption, Act No. 9593 or The
a ‘non-profit educational and/or charitable Tourism Act of 2009.
corporation, institution, accredited
nongovernment organization, trust or "(3) Sale of raw materials or packaging
philanthropic organization and/or research materials to a nonresident buyer for delivery
institution or organization’ is a school, college to a resident local export-oriented enterprise
or university and/or charitable corporation, to be used in manufacturing, processing,
accredited nongovernment organization, trust packing or repacking in the Philippines of the
or philanthropic organization and/ or research said buyer’s goods and paid for in acceptable
institution or organization, incorporated as a foreign currency and accounted for in
nonstock entity, paying no dividends, accordance with the rules and regulations of
governed by trustees who receive no the Bangko Sentral ng Pilipinas (BSP);
compensation, and devoting all its income,
whether students’ fees or gifts, donation, "(4) Sale of raw materials or packaging
subsidies or other forms of philanthropy, to materials to export-oriented enterprise whose
the accomplishment and promotion of the export sales exceed seventy percent (70%) of
purposes enumerated in its Articles of total annual production;
Incorporation.
"(5) Those considered export sales under
"x x x." Executive Order No. 226, otherwise known as
the Omnibus Investment Code of 1987, and
Section 31. Section 106 of the NIRC, as amended, is hereby other special laws; and
"(6) The sale of goods, supplies, equipment
"Sec. 106. Value-added Tax on Sale of Goods or Properties - and fuel to persons engaged in international
shipping or international air transport
"(A) Rate and Base of Tax - There shall be levied, assessed and operations: Provided, That the goods,
collected on every sale, barter or exchange of goods or supplies, equipment and fuel shall be used for
properties, a value-added tax equivalent to twelve percent international shipping or air transport
(12%) of the gross selling price or gross value in money of the operations.
goods or properties sold, bartered or exchanged, such tax to be
paid by the seller or transferor. "Provided, That subparagraphs (3), (4), and (5) hereof shall be
subject to the twelve percent (12%) value-added tax and no
"(1) x x x longer be considered export sales subject to zero percent (0%)
VAT rate upon satisfaction of the following conditions:
"(2) The following sales by VAT-registered
persons shall be subject to zero percent (0%) "(1) The successful establishment and
rate: implementation of an enhanced VAT refund
system that grants refunds of creditable input
"(a) Export Sales - The term ‘export tax within ninety (90) days from the filing of
sales’ means: the VAT refund application with the
Bureau: Provided, That, to determine the
"(1) The sale and actual shipment of effectivity of item no. 1, all applications filed
goods from the Philippines to a from January 1, 2018 shall be processed and
foreign country, irrespective of any must be decided within ninety (90) days from
shipping arrangement that may be the filing of the VAT refund application; and
agreed upon which may influence or
determine the transfer of ownership "(2) All pending VAT refund claims as of
of the goods so exported and paid for December 31, 2017 shall be fully paid in cash
in acceptable foreign currency or its by December 31, 2019.
equivalent in goods or services, and
accounted for in accordance with the "Provided, That the Department of Finance shall establish a VAT
rules and regulations of the Bangko refund center in the Bureau of Internal Revenue (BIR) and in the
Sentral ng Pilipinas (BSP); Bureau of Customs (BOC) that will handle the processing and
granting of cash refunds of creditable input tax.
"(2) Sale and delivery of goods to:
"An amount equivalent to five percent (5%) of the total VAT
"(i) Registered enterprises collection of the BIR and the BOC from the immediately
within a separate customs preceding year shall be automatically appropriated annually and
territory as provided under shall be treated as a special account in the General Fund or as
special laws; and trust receipts for the purpose of funding claims for VAT
refund: Provided, That any unused fund, at the end of the year
"(ii) Registered enterprises shall revert to the General Fund.
within tourism enterprise
zones as declared by the
10
"Provided, further, That the BIR and the BOC shall be required to "(1) The lease or the use of or the right or
submit to the Congressional Oversight Committee on the privilege to use any copyright, patent, design
Comprehensive Tax Reform Program (COCCTRP) a quarterly or model, plan, secret formula or process,
report of all pending claims for refund and any unused fund. goodwill, trademark, trade brand or other like
property or right;
"(b) Sales to persons or entities whose exemption under special
laws or international agreements to which the Philippines is a "(2) The lease or the use of, or the right to use
signatory effectively subjects such sales to zero rate. of any industrial, commercial or scientific
equipment;
"x x x."
"(3) The supply of scientific, technical
Section 32. Section 107 of the NIRC, as amended, is hereby industrial or commercial knowledge or
further amended to read as follows: information;
"Sec. 107. Value-added Tax on Importation of Goods. - "(A) In "(4) The supply of any assistance that is
General. - There shall be levied, assessed and collected on every ancillary and subsidiary to and is furnished as
importation of goods a value-added tax equivalent to twelve a means of enabling the application or
percent (12%) based on the total value used by the Bureau of enjoyment of any such property, or right as is
Customs in determining tariff and customs duties, plus customs mentioned in subparagraph (2) or any such
duties, excise taxes, if any, and other charges, such tax to be paid knowledge or information as is mentioned in
by the importer prior to the release of such goods from customs subparagraph (3);
custody: Provided, That where the customs duties are
determined on the basis of the quantity or volume of the goods, "(5) The supply of services by a nonresident
the value-added tax shall be based on the landed cost plus excise person or his employee in connection with the
taxes, if any. use of property or rights belonging to, or the
installation or operation of any brand,
"(B) Transfer of Goods by Tax-exempt Persons. - x x x." machinery or other apparatus purchased from
such nonresident person;
further amended to read as follows: "(6) The supply of technical advice, assistance
or services rendered in connection with
"Sec. 108. Value-added Tax on Sale of Services and Use or Lease technical management or administration of
of Properties.— any scientific industrial or commercial
undertaking, venture, projector scheme;
"(A) Rate and Base of Tax. - There shall be levied, assessed and
collected, a value-added tax equivalent to twelve percent (12%) "(7) The lease of motion picture films, -films,
of gross receipts derived from the sale or exchange of services, tapes and discs; and
including the use or lease of properties.
"(8) The lease or the use of or the right to use
"The phrase ‘sale or exchange of services’ means the radio, television, satellite transmission and
performance of all kinds of services in the Philippines for others cable television time.
for a fee, remuneration or consideration, including those
performed or rendered by construction and service contractors; "Lease of properties shall be subject to the tax herein imposed
stock, real estate, commercial, customs and immigration irrespective of the place where the contract of lease or licensing
brokers; lessors of property, whether personal or real; agreement was executed if the property is leased or used in the
warehousing services; lessors or distributors of cinematographic Philippines.
films; persons engaged in milling, processing, manufacturing or
repacking goods for others; proprietors, operators or keepers of "The term ‘gross receipts’ means the total amount of money or
hotels, motels, resthouses, pension houses, inns, resorts; its equivalent representing the contract price, compensation,
proprietors or operators of restaurants, refreshment parlors, service fee, rental or royalty, including the amount charged for
cafes and other eating places, including clubs and caterers; materials supplied with the services and deposits and advanced
dealers in securities; lending investors; transportation payments actually or constructively received during the taxable
contractors on their transport of goods or cargoes, including quarter for the services performed or to be performed for
persons who transport goods or cargoes for hire and other another person, excluding value-added tax.
domestic common carriers by land relative to their transport of
goods or cargoes; common carriers by air and sea relative to "(B) Transactions Subject to Zero Percent (0%) Rate. - The
their transport of passengers, goods or cargoes from one place following services performed in the Philippines by VAT
in the Philippines to another place in the Philippines; sales of registered persons shall be subject to zero percent (0%) rate:
electricity by generation companies, transmission by any entity,
and distribution companies, including electric cooperatives; "(1) Processing, manufacturing or repacking
services of franchise grantees of electric utilities, telephone and goods for other persons doing business
telegraph, radio and television broadcasting and all other outside the Philippines which goods are
franchise grantees except those under Section 119 of this Code subsequently exported, where the services
and non-life insurance companies (except their crop insurances), are paid for in acceptable foreign currency and
including surety, fidelity, indemnity and bonding companies; and accounted for in accordance with the rules
similar services regardless of whether or not the performance and regulations of the Bangko Sentral ng
thereof calls for the exercise or use of the physical or mental Pilipinas (BSP);
faculties. The phrase ‘sale or exchange of services’ shall likewise
include:
11
"(2) Services other than those mentioned in must be decided within ninety (90) days from
the preceding paragraph, rendered to a the filing of the VAT refund application; and
person engaged in business conducted
outside the Philippines or to a nonresident "(2) All pending VAT refund claims as of
person not engaged in business who is outside December 31, 2017 shall be fully paid in cash
the Philippines when the services are by December 31, 2019.
performed, the consideration for which is paid
for in acceptable foreign currency and "Provided, That the Department of Finance shall establish a VAT
accounted for in accordance with the rules refund center in the Bureau of Internal Revenue (BIR) and in the
and regulations of the Bangko Sentral ng Bureau of Customs (BOC) that will handle the processing and
Pilipinas (BSP); granting of cash refunds of creditable input tax.
"(3) Services rendered to persons or entities "An amount equivalent to five percent (5%) of the total value-
whose exemption under special laws or added tax collection of the BIR and the BOC from the
international agreements to which the immediately preceding year shall be automatically appropriated
Philippines is a signatory effectively subjects annually and shall be treated as a special account in the General
the supply of such services to zero percent Fund or as trust receipts for the purpose of funding claims for
(0%) rate; VAT Refund: Provided, That any unused fund, at the end of the
year shall revert to the General Fund.
"(4) Services rendered to persons engaged in
international shipping or international air "Provided, further, That the BIR and the BOC shall be required to
transport operations, including leases of submit to the COCCTRP a quarterly report of all pending claims
property for use thereof: Provided, That these for refund and any unused fund."
services shall be exclusive for international
shipping or air transport operations;
"(5) Services performed by subcontractors
and/or contractors in processing, converting,
"Sec. 109. Exempt Transactions. - (1) Subject to the provisions of
or manufacturing goods for an enterprise
Subsection (2) hereof, the following transactions shall be exempt
whose export sales exceed seventy percent
from the value-added tax:
(70%) of total annual production;
"(A) x x x
"(6) Transport of passengers and cargo by
domestic air or sea vessels from the
"(B) x x x
Philippines to a foreign country; and
"(C) x x x
"(7) Sale of power or fuel generated through
renewable sources of energy such as, but not
limited to, biomass, solar, wind, hydropower, "(D) Importation of professional instruments
geothermal, ocean energy, and other and implements, tools of trade, occupation or
emerging energy sources using technologies employment, wearing apparel, domestic
such as fuel cells and hydrogen fuels. animals, and personal and household effects
belonging to persons coming to settle in the
Philippines or Filipinos or their families and
"(8) Services rendered to:
descendants who are now residents or
citizens of other countries, such parties
"(i) Registered enterprises within a
hereinafter referred to as overseas Filipinos, in
separate customs territory as
quantities and of the class suitable to the
provided under special law; and
profession, rank or position of the persons
importing said items, for their own use and
"(ii) Registered enterprises within not for barter or sale, accompanying such
tourism enterprise zones as declared persons, or arriving within a reasonable
by the TIEZA subject to the provisions time: Provided, That the Bureau of Customs
under Republic Act No. 9593 or The may, upon the production of satisfactory
Tourism Act of 2009. evidence that such persons are actually
coming to settle in the Philippines and that the
"Provided, That subparagraphs (B)(1) and (B)(5) hereof shall be goods are brought from their former place of
subject to the twelve percent (12%) value-added tax and no abode, exempt such goods from payment of
longer be subject to zero percent (0%) VAT rate upon duties and taxes: Provided, further, That
satisfaction of the following conditions: vehicles, vessels, aircrafts, machineries and
other similar goods for use in manufacture,
"(1) The successful establishment and shall not fall within this classification and shall
implementation of an enhanced VAT refund therefore be subject to duties, taxes and other
system that grants refunds of creditable input charges;
tax within ninety (90) days from the filing of
the VAT refund application with the "(E) Services subject to percentage tax under
Bureau: Provided, That, to determine the Title V;
effectivity of item no. 1, all applications filed
from January 1, 2018 shall be processed and
12
"(F) Services by agricultural contract growers and Housing Act of 1992, and other related
and milling for others of palay into rice, corn laws, residential lot valued at One million five
into grits and sugar cane into raw sugar; hundred thousand pesos (₱1,500,000) and
below, house and lot, and other residential
"(G) Medical, dental, hospital and veterinary dwellings valued at Two million five hundred
services except those rendered by thousand pesos (₱2,500,000) and
professionals; below: Provided, That beginning January 1,
2021, the VAT exemption shall only apply to
"(H) Educational services rendered by private sale of real properties not primarily held for
educational institutions, duly accredited by sale to customers or held for lease in the
the Department of Education (DepEd), the ordinary course of trade or business, sale of
Commission on Higher Education (CHED), the real property utilized for socialized housing as
Technical Education and Skills Development defined by Republic Act No. 7279, sale of
Authority (TESDA) and those rendered by house and lot, and other residential dwellings
government educational institutions; with selling price of not more than Two million
pesos (₱2,000,000): Provided, further, That
every three (3) years thereafter, the amount
"(I) Services rendered by individuals pursuant
herein stated shall be adjusted to its present
to an employer-employee relationship;
value using the Consumer Price Index, as
published by the Philippine Statistics Authority
"(J) Services rendered by regional or area
(PSA);
headquarters established in the Philippines by
multinational corporations which act as
"(Q) Lease of a residential unit with a monthly
supervisory, communications and
rental not exceeding Fifteen thousand pesos
coordinating centers for their affiliates,
(₱15,000);
subsidiaries or branches in the Asia-Pacific
Region and do not earn or derive income from
the Philippines; "(R) Sale, importation, printing or publication
of books and any newspaper, magazine,
review or bulletin which appears at regular
"(K) Transactions which are exempt under
intervals with fixed prices or subscription and
international agreements to which the
sale and which is not devoted principally to
Philippines is a signatory or under special laws,
the publication of paid advertisements;
except those under Presidential Decree No.
529;
"(S) Transport of passengers by international
carriers;
"(L) Sales by agricultural cooperatives duly
registered with the Cooperative Development
Authority to their members as well as sale of "(T) Sale, importation or lease of passenger or
their produce, whether in its original state or cargo vessels and aircraft, including engine,
processed form, to non-members; their equipment and spare parts thereof for
importation of direct farm inputs, machineries domestic or international transport
and equipment, including spare parts thereof, operations;
to be used directly and exclusively in the
production and/or processing of their "(U) Importation of fuel, goods and supplies by
produce; persons engaged in international shipping or
air transport operations: Provided, That the
"(M) Gross receipts from lending activities by fuel, goods, and supplies shall be used for
credit or multi-purpose cooperatives duly international shipping or air transport
registered with the Cooperative Development operations;
Authority;
"(V) Services of bank, non-bank financial
"(N) Sales by non-agricultural, non-electric intermediaries performing quasi-banking
and non-credit cooperatives duly registered functions, and other non-bank financial
with the Cooperative Development intermediaries;
Authority: Provided, That the share capital
contribution of each member does not exceed "(W) Sale or lease of goods and services to
Fifteen thousand pesos (₱15,000) and senior citizens and persons with disability, as
regardless of the aggregate capital and net provided under Republic Act Nos. 9994
surplus ratably distributed among the (Expanded Senior Citizens Act of 2010) and
members; 10754 (An Act Expanding the Benefits and
Privileges of Persons With Disability),
"(O) Export sales by persons who are not VAT- respectively;
registered;
"(X) Transfer of property pursuant to Section
"(P) Sale of real properties not primarily held 40(C)(2) of the NIRC, as amended;
for sale to customers or held for lease in the
ordinary course of trade or business or real "(Y) Association dues, membership fees, and
property utilized for low-cost and socialized other assessments and charges collected by
housing as defined by Republic Act No. 7279, homeowners associations and condominium
otherwise known as the Urban Development corporations;
13
"(Z) Sale of gold to the Bangko Sentral ng "In case of full or partial denial of the claim for tax refund, the
Pilipinas (BSP); taxpayer affected may, within thirty (30) days from the receipt
of the decision denying the claim, appeal the decision with the
"(AA) Sale of drugs and medicines prescribed Court of Tax Appeals: Provided, however, That failure on the part
for diabetes, high cholesterol, and of any official, agent, or employee of the BIR to act on the
hypertension beginning January 1, 2019; and application within the ninety (90)-day period shall be punishable
under Section 269 of this Code.
"(BB) Sale or lease of goods or properties or
the performance of services other than the "x x x."
transactions mentioned in the preceding
paragraphs, the gross annual sales and/or Section 37. Section 114 of the NIRC, as amended, is hereby
receipts do not exceed the amount of Three further amended to read as follows:
million pesos (₱3,000,000).
"Sec. 114. Return and Payment of Value-added Tax. - "(A) In
Section 35. Section 110 of the NIRC, as amended, is hereby General. - Every person liable to pay the value-added tax
further amended to read as follows: imposed under this Title shall file a quarterly return of the
amount of his gross sales or receipts within twenty-five (25) days
"Sec. 110. Tax Credits. - "(A) Creditable Input Tax. - "(1) x x x following the close of each taxable quarter prescribed for each
taxpayer: Provided, however, That VAT-registered persons shall
"(2) x x x pay the value-added tax on a monthly basis: Provided,
finally, That beginning January 1, 2023, the filing and payment
required under this Subsection shall be done within twenty-five
"(a) x x x
(25) days following the close of each taxable quarter.
"(b) x x x
"x x x
"Provided, That the input tax on goods purchased or imported in
"(B) x x x
a calendar month for use in trade or business for which
deduction for depreciation is allowed under this Code shall be
spread evenly over the month of acquisition and the fifty-nine "(C) Withholding of Value-added Tax. - The Government or any
(59) succeeding months if the aggregate acquisition cost for such of its political subdivisions, instrumentalities or agencies,
goods, excluding the VAT component thereof, exceeds One including government-owned or -controlled corporations
million pesos (₱1,000,000): Provided, however, That if the (GOCCs) shall, before making payment on account of each
estimated useful life of the capital good is less than five (5) years, purchase of goods and services which are subject to the value-
as used for depreciation purposes, then the input VAT shall be added tax imposed in Sections 106 and 108 of this Code, deduct
spread over such a shorter period: Provided, further, That the and withhold the value-added tax imposed in Sections 106 and
amortization of the input VAT shall only be allowed until 108 of this Code, deduct and withhold a final value-added tax at
December 31, 2021 after which taxpayers with unutilized input the rate of five percent (5%) of the gross payment
VAT on capital goods purchased or imported shall be allowed to thereof: Provided, That beginning January 1, 2021, the VAT
apply the same as scheduled until fully utilized: Provided, witholding system under this Subsection shall shift from final to
finally, That in the case of purchase of services, lease or use of a creditable system: Provided, further, That the payment for
properties, the input tax shall be creditable to the purchaser, lease or use of properties or property rights to nonresident
lessee or licensee upon payment of the compensation, rental, owners shall be subject to twelve percent (12%) withholding tax
royalty or fee. at the time of payment: Provided, finally, That payments for
purchases of goods and services arising from projects funded by
Official Development Assistance (ODA) as defined under
"x x x."
Republic Act No. 8182, otherwise known as the ‘Official
Development Assistance Act of 1996’, as amended, shall not be
subject to the final withholding tax system as imposed in this
further amended to read as follows: Subsection. For purposes of this Section, the payor or person in
control of the payment shall be considered as the withholding
"Sec. 112. Refunds or Tax Credits of Input Tax - agent.
"(A) x x x Section 38. Section 116 of the NIRC, as amended, is hereby

"(B) x x x
"Sec. 116. Tax on Persons Exempt from Value-added Tax (VAT). -
"(C) Period within which Refund of Input Taxes Any person whose sales or receipts are exempt under Section
shall be Made.— In proper cases, the 109(BB) of this Code from the payment of value-added tax and
Commissioner shall grant a refund for who is not a VAT-registered person shall pay a tax equivalent to
creditable input taxes within ninety (90) days three percent (3%) of his gross quarterly sales or
from the date of submission of the official receipts: Provided, That cooperatives, and beginning January 1,
receipts or invoices and other documents in 2019, self-employed and professionals with total annual gross
support of the application filed in accordance sales and/or gross receipts not exceeding Five hundred
with Subsections (A) and (B) thousand pesos (₱500,000) shall be exempt from the three
hereof: Provided, That should the percent (3%) gross receipts tax herein imposed."
Commissioner find that the grant of refund is
not proper, the Commissioner must state in Section 39. Section 127 of the NIRC, as amended, is hereby
writing the legal and factual basis for the further amended to read as follows:
denial.
14
"Sec. 127. Tax on Sale, Barter or Exchange of Shares of Stock "Effective on January 1, 2018 until June 30,
Listed and Traded through the Local Stock Exchange or through 2018, Thirty-two pesos and fifty centavos
Initial Public Offering - (₱32.50) per pack;
"(A) Tax on Sale, Barter or Exchange of Shares of Stock Listed and "Effective on July 1, 2018 until December 31,
Traded through the Local Stock Exchange.— There shall be 2019, Thirty-five pesos (₱35.00) per pack;
levied, assessed and collected on every sale, barter, exchange or
other disposition of shares of stock listed and traded through the "Effective on January 1, 2020 until December
local stock exchange other than the sale by a dealer in securities, 31, 2021, Thirty-seven pesos and fifty
a tax at the rate of six-tenths of one percent (6⁄10 of 1%) of the centavos (₱37.50) per pack; and
gross selling price or gross value in money of the shares of stock
sold, bartered, exchanged or otherwise disposed which shall be "Effective on January 1, 2022 until December
paid by the seller or transferor. 31, 2023, Forty pesos (₱40.00)per
pack.1âwphi1
"x x x."
"The rates of tax imposed under this
Section 40. Section 128 of the NIRC, as amended, is hereby subsection shall be increased by four percent
further amended to read as follows: (4%) every year effective on January 1, 2024,
through revenue regulations issued by the
"Sec. 128. Returns and Payment of Percentage Taxes - Secretary of Finance.
"(A) x x x "Duly registered cigarettes packed by hand

shall only be packed in twenties and other
"(1) x x x packaging combinations of not more than
twenty.
"(2) Persons Retiring from Business.— x x x
"‘Cigarettes packed by hand’ shall refer to the
"(3) Determination of Correct Sales or manner of packaging of cigarette sticks using
Receipts.— x x x an individual person’s hands and not through
any other means such as a mechanical device,
machine or equipment.
"x x x."
"(C) Cigarettes Packed by Machine. — There

Section 41. Section 129, Chapter 1 of Title VI of the NIRC, as
shall be levied, assessed and collected on
amended, is hereby further amended to read as follows:
cigarettes packed by machine a tax at the
rates prescribed below:
"TITLE VI–EXCISE TAXES ON CERTAIN GOODS AND SERVICES
"Effective on January 1, 2018 until June 30,
"CHAPTER 1—GENERAL PROVISIONS
2018, the tax on all cigarettes packed by
machine shall be Thirty-two pesos and fifty
"Sec. 129. Goods and Services Subject to Excise Taxes. - Excise centavos (₱32.50) per pack;
taxes apply to goods manufactured or produced in the
Philippines for domestic sales or consumption or for any other
"Effective on July 1, 2018 until December 31,
disposition and to things imported as well as services performed
2019, the tax on all cigarettes packed by
in the Philippines. The excise tax imposed herein shall be in
machine shall be Thirty-five pesos (₱35.00)
addition to the value-added tax imposed under Title IV.
per pack;
"For purposes of this Title, excise taxes herein imposed and

"Effective on January 1, 2020 until December
based on weight or volume capacity or any other physical unit of
31, 2021, the tax on all cigarettes packed by
measurement shall be referred to as ‘specific tax’ and an excise
machine shall be Thirty-seven pesos and fifty
tax herein imposed and based on selling price or other specified
centavos (₱37.50) per pack; and
value of the good or service performed shall be referred to as
‘ad valorem tax.’"
"Effective on January 1, 2022 until December
31, 2023, the tax on all cigarettes packed by
machine shall be Forty pesos (₱40.00) per
pack.
"Sec. 145. Cigars and Cigarettes -

"The rates of tax imposed under this Subsection shall be
increased by four percent (4%) every year thereafter effective
"(A) Cigars.— x x x on January 1, 2024, through revenue regulations issued by the
Secretary of Finance."
"(B) Cigarettes Packed by Hand.— There shall
be levied, assessed and collected on cigarettes Section 43. Section 148 of the NIRC, as amended, is hereby
packed by hand an excise tax based on the further amended to read as follows:
following schedules:
"Sec. 148. Manufactured Oils and Other Fuels. - There shall be
collected on refined and manufactured mineral oils and motor
15
fuels, the following excise taxes which shall attach to the goods applicable excise tax specified in this Section,
hereunder enumerated as soon as they are in existence as such: except when such by-products are transferred
to any of the local oil refineries through sale,
"Effective January 1, 2018 barter or exchange, for the purpose of further
processing or blending into finished products
"(a) Lubricating oils and greases, including but which are subject to excise tax under this
not limited to, basestock for lube oils and Section;
greases, high vacuum distillates, aromatic
extracts and other similar preparations, and "(f) Unleaded premium gasoline, per liter of
additives for lubricating oils and greases, volume capacity, Seven pesos (₱7.00);
whether such additives are petroleum based
or not, per liter and kilogram, respectively, of "(g) Aviation turbo jet fuel, aviation gas, per
volume capacity or weight, Eight pesos liter of volume capacity, Four pesos (₱4.00);
(₱8.00): Provided, That lubricating oils and
greases produced from basestocks and "(h) Kerosene, per liter of volume capacity,
additives on which the excise tax has already Three pesos (₱3.00): Provided, That kerosene,
been paid shall no longer be subject to excise when used as aviation fuel, shall be subject to
tax: Provided, further, That locally produced the same tax on aviation turbo jet fuel under
or imported oils previously taxed as such but the preceding paragraph (g), such tax to be
are subsequently reprocessed, refined or assessed on the user thereof;
recycled shall likewise be subject to the tax
imposed under this Subsection; "(i) Diesel fuel oil, and on similar fuel oils
having more or less the same generating
"(b) Processed gas, per liter of volume power, per liter of volume capacity, Two pesos
capacity, Eight pesos (₱8.00); and fifty centavos (₱2.50);
"(c) Waxes and petrolatum, per kilogram, "(j) Liquefied petroleum gas, per kilogram,
Eight pesos (₱8.00); One peso (₱1.00): Provided, That liquefied
petroleum gas when used as raw material in
"(d) On denatured alcohol to be used for the production of petrochemical products,
motive power, per liter of volume capacity, subject to the rules and regulations to be
Eight pesos (₱8.00): Provided, That unless promulgated by the Secretary of Finance, shall
otherwise provided by special laws, if the be taxed zero (₱0.00) per kilogram:
denatured alcohol is mixed with gasoline, the
excise tax on which has already been paid, "Provided, finally, That liquefied petroleum
only the alcohol content shall be subject to the gas used for motive power shall be taxed at
tax herein prescribed. For purposes of this the equivalent rate as the excise tax on diesel
Subsection, the removal of denatured alcohol fuel oil;
of not less than one hundred eighty degrees
(180°) proof (ninety percent (90%) absolute "(k) Asphalts, per kilogram, Eight pesos
alcohol) shall be deemed to have been (₱8.00);
removed for motive power, unless shown
otherwise;
"(l) Bunker fuel oil, and on similar fuel oils
having more or less the same generating
"(e) Naphtha, regular gasoline, pyrolysis power, per liter of volume capacity, Two pesos
gasoline and other similar products of and fifty centavos (₱2.50): Provided, however,
distillation, per liter of volume capacity, Seven That the excise taxes paid on the purchased
pesos (₱7.00): Provided, however, That basestock (bunker) used in the manufacture
naphtha and pyrolysis gasoline, when used as of excisable articles and forming part thereof
a raw material in the production of shall be credited against the excise tax due
petrochemical products, or in the refining of therefrom; and
petroleum products, or as replacement fuel
for natural-gas-fired-combined cycle power
"(m) Petroleum coke, per metric ton, Two
plant in lieu of locally-extracted natural gas
pesos and fifty
during the non-availability thereof, subject to
centavos.(₱2.50): Provided, however, That,
the rules and regulations to be promulgated
petroleum coke, when used as feedstock to
by the Secretary of Finance, per liter of volume
any power generating facility, per metric ton,
capacity, zero (₱0.00): Provided, further, That
zero (₱0.00).
the production of petroleum products,
whether or not they are classified as products
"Effective January 1, 2019
of distillation and for use solely for the
production of gasoline shall be exempt from
excise tax: Provided, finally, That the by- "(a) Lubricating oils and greases, including but
product including fuel oil, diesel fuel, not limited to, basestock for lube oils and
kerosene, pyrolysis gasoline, liquefied greases, high vacuum distillates, aromatic
petroleum gases and similar oils having more extracts and other similar preparations, and
or less the same generating power, which are additives for lubricating oils and greases,
produced in the processing of naphtha into whether such additives are petroleum based
petrochemical products shall be subject to the or not, per liter and kilogram, respectively, of
volume capacity or weight, Nine pesos
16
(₱9.00): Provided, That lubricating oils and "(h) Kerosene, per liter of volume capacity,
greases produced from basestocks and Four pesos (₱4.00): Provided, That kerosene,
additives on which the excise tax has already when used as aviation fuel, shall be subject to
been paid shall no longer be subject to excise the same tax on aviation turbo jet fuel under
tax: Provided, further, That locally produced the preceding paragraph (g), such tax to be
or imported oils previously taxed as such but assessed on the user thereof;
are subsequently reprocessed, rerefined or
recycled shall likewise be subject to the tax "(i) Diesel fuel oil, and on similar fuel oils
imposed under this Subsection. having more or less the same generating
power, per liter of volume capacity, Four
"(b) Processed gas, per liter of volume pesos and fifty centavos (₱4.50);
capacity, Nine pesos (₱9.00);
"(j) Liquefied petroleum gas, per kilogram,
"(c) Waxes and petrolatum, per kilogram, Nine Two pesos(₱2.00): Provided, That liquefied
pesos (₱9.00); petroleum gas when used as raw material in
the production of petrochemical products,
"(d) On denatured alcohol to be used for subject to the rules and regulations to be
motive power, per liter of volume capacity, promulgated by the Secretary of Finance, per
Nine pesos (₱9.00): Provided, That unless kilogram, zero (₱0.00): Provided, finally, That
otherwise provided by special laws, if the liquefied petroleum gas used for motive
denatured alcohol is mixed with gasoline, the power shall be taxed at the equivalent rate as
excise tax on which has already been paid, the excise tax on diesel fuel oil;
only the alcohol content shall be subject to the
tax herein prescribed. For purposes of this "(k) Asphalts, per kilogram, Nine pesos
Subsection, the removal of denatured alcohol (₱9.00);
of not less than one hundred eighty degrees
(180°) proof (ninety percent (90%) absolute "(l) Bunker fuel oil, and on similar fuel oils
alcohol) shall be deemed to have been having more or less the same generating
removed for motive power, unless shown power, per liter of volume capacity, Four
otherwise; pesos and fifty centavos
(₱4.50): Provided, however, That the excise
"(e) Naphtha, regular gasoline, pyrolysis taxes paid on the purchased basestock
gasoline, and other similar products of (bunker) used in the manufacture of excisable
distillation, per liter of volume capacity, Nine articles and forming part thereof shall be
pesos (₱9.00): Provided, however, That credited against the excise tax due therefrom;
naphtha and pyrolysis gasoline, when used as and
a raw material in the production of
petrochemical products, or in the refining of "(m) Petroleum coke, per metric ton, Four
petroleum products, or as replacement fuel pesos and fifty centavos
for natural-gas-fired-combined cyclepower (₱4.50): Provided, however, That, petroleum
plant in lieu of locally-extracted natural gas coke, when used as feedstock to any power
during the non-availability thereof, subject to generating facility, per metric ton, zero
the rules and regulations to be promulgated (₱0.00).
by the Secretary of Finance, per liter of volume
capacity, zero (₱0.00): Provided, further, That "Effective January 1, 2020
"(a) Lubricating oils and greases, including but
not limited to, basestock for lube oils and
greases, high vacuum distillates, aromatic
excise tax: Provided, finally, That the by-
extracts and other similar preparations, and
product including fuel oil, diesel fuel,
additives for lubricating oils and greases,
kerosene, pyrolysis gasoline, liquefied
whether such additives are petroleum based
petroleum, gases and similar oils having more
or not, per liter and kilogram, respectively, of
or less the same generating power, which are
volume capacity or weight, Ten pesos
produced in the processing of naphtha into
(₱10.00): Provided, That lubricating oils and
petrochemical products shall be subject to the
greases produced from basestocks and
applicable excise tax specified in this Section,
additives on which the excise tax has already
except when such by-products are transferred
been paid shall no longer be subject to excise
tax: Provided, further, That locally produced
barter or exchange, for the purpose of further
or imported oils previously taxed as such but
are subsequently reprocessed, rerefined or
which are subject to excise tax under this
recycled shall likewise be subject to the tax
Section;
imposed under this Subsection.
"(f) Unleaded premium gasoline, per liter of

"(b) Processed gas, per liter of volume
volume capacity, Nine pesos (₱9.00);
capacity, Ten pesos (₱10.00);
"(g) Aviation turbo jet fuel, aviation gas, per

"(c) Waxes and petrolatum, per kilogram, Ten
liter of volume capacity, Four pesos (₱4.00);
pesos (₱10.00);
17
"(d) On denatured alcohol to be used for the production of petrochemical products,

motive power, per liter of volume capacity, subject to the rules and regulations to be
Ten pesos (₱10.00): Provided, That unless promulgated by the Secretary of Finance, per
otherwise provided by special laws, if the kilogram, zero (₱0.00): Provided, finally, That
denatured alcohol is mixed with gasoline, the liquefied petroleum gas used for motive
excise tax on which has already been paid, power shall be taxed at the equivalent rate as
only the alcohol content shall be subject to the the excise tax on diesel fuel oil;
tax herein prescribed. For purposes of this
Subsection, the removal of denatured alcohol "(k) Asphalts, per kilogram, Ten pesos
of not less than one hundred eighty degrees (₱10.00);
(180°) proof (ninety percent (90%) absolute
alcohol) shall be deemed to have been "(l) Bunker fuel oil, and on similar fuel oils
removed for motive power, unless shown having more or less the same generating
otherwise; power, per liter of volume capacity, Six pesos
(₱6.00): Provided, however, That the excise
"(e) Naphtha, regular gasoline, pyrolysis taxes paid on the purchased basestock
gasoline and other similar products of (bunker) used in the manufacture of excisable
distillation, per liter of volume capacity, Ten articles and forming part thereof shall be
pesos (₱10.00): Provided, however, That credited against the excise tax due therefrom;
naphtha and pyrolysis gasoline, when used as and
a raw material in the production of
petrochemical products, or in the refining of "(m) Petroleum coke, per metric ton, Six pesos
petroleum products or as replacement fuel for (₱6.00): Provided, however, That, petroleum
natural-gas-fired-combined cycle power plant coke, when used as feedstock to any power
in lieu of locally-extracted natural gas during generating facility, per metric ton, zero
the non-availability thereof, subject to the (₱0.00).
rules and regulations to be promulgated by
the Secretary of Finance, per liter of volume
"Petroleum products, including naphtha, LPG, petroleum coke,
capacity, zero (₱0.00): Provided, further, That
refinery fuel and other products of distillation, 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
cyclepower plant in lieu of locally-extracted natural gas during
excise tax: Provided, finally, That the by-
the non-availability thereof, subject to the rules and regulations
product including fuel oil, diesel fuel,
to be promulgated by the Secretary of Finance, per liter of
kerosene, pyrolysis gasoline, liquefied
volume capacity, zero (₱0.00): Provided, That the by-product
petroleum gases and similar oils having more
including fuel oil, diesel fuel, kerosene, pyrolysis gasoline,
or less the same generating power, which are
liquefied petroleum gases, and similar oils having more or less
produced in the processing of naphtha into
the same generating power, which are produced in the
petrochemical products shall be subject to the
processing of naphtha into petrochemical products shall be
applicable excise tax specified in this Section,
subject to the applicable excise tax specified in this Section,
except when such by-products are transferred
except when such by-products are transferred to any of the local
oil refineries through sale, barter or exchange, for the purpose
barter or exchange, for the purpose of further
of further processing or blending into finished products which
are subject to excise tax under this Section.
which are subject to excise tax under this
Section;
"For the period covering 2018 to 2020, the scheduled increase
in the excise tax on fuel as imposed in this Section shall be
"(f) Unleaded premium gasoline, per liter of
suspended when the average Dubai crude oil price based on
volume capacity, Ten pesos (₱10.00);
Mean of Platts Singapore (MOPS)for three (3) months prior to
the scheduled increase of the month reaches or exceeds Eighty
"(g) Aviation turbojet fuel, aviation gas, per dollars (USD 80) per barrel.
liter of volume capacity, Four pesos (₱4.00);
"Provided, That the Department of Finance shall perform an
"(h) Kerosene, per liter of volume capacity, annual review of the implementation of the excise tax on fuel
Five pesos (₱5.00): Provided, That kerosene, and shall, based on projections provided and recommendations
when used as aviation fuel, shall be subject to of the Development Budget Coordination Committee, as
the same tax on aviation turbo jet fuel under reconciled from the conditions as provided above, recommend
the preceding paragraph (g), such tax to be the implementation or suspension of the excise tax on
assessed on the user thereof; fuel: Provided, further, That the recommendation shall be given
on a yearly basis: Provided, finally, That any suspension of the
"(i) Diesel fuel oil, and on similar fuel oils increase in excise tax shall not result in any reduction of the
having more or less the same generating excise tax being imposed at the time of the suspension."
power, per liter of volume capacity, Six pesos
(₱6.00); Section 44. A new section designated as Section 148-A under
Chapter V of the NIRC, as amended, is hereby inserted to read
"(j) Liquefied petroleum gas, per kilogram, as follows:
Three pesos (₱3.00): Provided, That liquefied
petroleum gas when used as raw material in
18
"Sec. 148-A. Mandatory Marking of All Petroleum Products. - In conduct field and confirmatory tests, and
accordance with rules and regulations to be issued by the perform such other acts incidental or
Secretary of Finance, in consultation with the Commissioner of necessary to the proper implementation of
Internal Revenue and Commissioner of Customs and in the provisions of this Act: Provided, That the
coordination with the Secretary of Energy, the Secretary of fuel marking provider shall provide an end-to-
Finance shall require the use of an official fuel marking or similar end solution to the Government, including the
technology on petroleum products that are refined, establishment and operation of testing
manufactured, or imported into the Philippines, and that are facilities that are certified to ISO 17025;
subject to the payment of taxes and duties, such as but not
limited to, unleaded premium gasoline, kerosene, and diesel fuel "(g) All costs pertaining to the procurement of
oil after the taxes and duties thereon have been paid. The the official fuel markers shall be borne by the
mandatory marking of all petroleum products shall be in refiner, manufacturer or importer, of
accordance with the following: petroleum products, as the case may
be: Provided, That the government may
"(a) Official Markers. - There shall be a list of subsidize the cost of official fuel markers in the
chemical additives and corresponding first year of implementation;
quantitative ratio as identified by the
Secretary of Finance as official fuel markers. "(h) Fuel Marking Program Funds. - In addition
The official fuel markers shall be .distinct and, to any appropriation to implement this
to the greatest degree possible, impossible to Section and the last paragraph of Section 171
imitate or replicate: Provided, That the official of this Act, fees or charges collected in relation
fuel marker must be unique to the Philippines to the fuel marking program may be recorded
and that its chemical composition and as trust receipts of the implementing
quantitative ratio must persist for at least agencies, and shall be exclusively disbursed to
three (3) years from their application or defray the cost of services or equipment
administration to the unmarked fuel; required to fully implement the said program,
subject to rules and regulations to be issued
"(b) The person, entity, or taxpayer who owns by the DOF-DBM-COA permanent committee;
or enters the petroleum products into the
country, or the person to whom the "(i) The marking of petroleum products shall
petroleum products are consigned shall cause be mandatory within five (5) years from the
and accommodate the marking of the effectivity of this Act; and
petroleum products with the official marking
agent; "(j) The term ‘random field test’ shall refer to
periodic random inspections and tests
"(c) Internal revenue or customs officers shall performed to establish qualitative and
be on site to administer the declaration of the quantitative positive result of fuel trafficking,
tax and duties imposed on the petroleum which are conducted on fuels found in
products and to oversee the application of the warehouses, storage tanks, gas stations and
fuel marking; other retail outlets, and in such other
properties or equipment, including
"(d) Absence of Official or Dilution of the mechanisms of transportation, of persons
Official Marker; Presumptions.— In the event engaged in the sale, delivery, trading,
that the petroleum products which do not transportation, distribution, or importation of
contain the official marker or which contain fuel intended for domestic market.
the official marker but are diluted beyond the
acceptable percentage approved by the "The term ‘confirmatory tests’ shall refer to the accurate and
Secretary of Finance are found in the domestic precise analytical test of the tested unmarked, adulterated, or
market or in the possession of anyone, or diluted fuel using a device, tool or equipment which will validate
under any situation where said petroleum and confirm the result of the field test, that is immediately
products are subject to duties and taxes, it conducted in an accredited testing facility that is certified to ISO
shall be presumed that the same were 17025."
withdrawn with the intention to evade the
payment of the taxes and duties due thereon; Section 45. Section 149, Chapter 6 of Title VI of the NIRC, as
amended, is hereby further amended to read as follows:
"(e) The use of fraudulent marker on the
petroleum products shall be considered prima "CHAPTER VI – EXCISE TAX ON MISCELLANEOUS ARTICLES
facie evidence that the same have been
withdrawn or imported without the payment
"Sec. 149. Automobiles. - There shall be levied, assessed and
of taxes and duties due thereon;
collected an ad valorem tax on automobiles based on the
manufacturer’s or importer’s selling price, net of excise and
"(f) Engagement of Fuel Marking Provider.— value-added tax, in accordance with the following schedule:
The government shall engage only one fuel
marking provider who shall, under the
"Effective January 1, 2018
supervision and direction of the
Commissioners of Internal Revenue and
Customs, be responsible for providing, "Net manufacturer’s price/importer‘s selling price Rate
monitoring, and administering the fuel
markers, provide equipment and devices, "Up to Six hundred thousand pesos (₱600,000) Four
19
"Over Six hundred thousand pesos (₱600,000) to One million Ten percent (10%) to propel itself from a stationary condition
pesos (₱1,000,000) using solely electric motor.
"Over One million pesos (₱1,000,000) to Four million pesos Twenty "Provided, That in the case of imported automobiles not for sale,
(₱4,000,000) percent(20%)
the tax imposed herein shall be based on the total landed value,
including transaction value, customs duty and all other charges.
"Over Four million pesos (₱4,000,000) Fifty percent
(50%)
"Automobiles used exclusively within the freeoort zone shall be
exempt from. excise tax."
"Provided, That hybrid vehicles shall be subject to fifty percent
(50%) of the applicable excise tax rates on automobiles under Section 46. A new section designated as Section 150-A under
this Section: Provided, further, That purely electric vehicles and Chapter VI, Title VI of the NIRC, as amended, is hereby inserted
pick-ups shall be exempt from excise tax on automobiles. to read as follows:
"As used in this Section— "Sec. 150-A. Non-essential Services.— There shall be levied,
assessed, and collect a tax equivalent to five percent (5%) based
"(a) Automobile shall mean any four (4) or on the gross receipts derived from the performance of services,
more wheeled motor vehicle regardless of net of excise tax and value-added tax, on invasive cosmetic
seating capacity, which is propelled by procedures, surgeries, and body enhancements directed solely
gasoline, diesel, electricity or any other motive towards improving, altering, or enhancing the patient’s
power: Provided, That for purposes of this Act, appearance and do not meaning fully promote the proper
buses, trucks, cargo vans, jeepneys/jeepney function of the body or prevent or treat illness or
substitutes, single cab chassis, and special- disease: Provided, That this tax shall not apply to procedures
purpose vehicles shall not be considered as necessary to ameliorate a deformity arising from, or directly
automobiles. related to, a congenital or developmental defect or abnormality,
a personal injury resulting from an accident or trauma, or
"(b) Truck/cargo van shall mean a motor disfiguring disease, tumor, virus or infection: Provided,
vehicle of any configuration that is exclusively further, That cases or treatments covered by the National Health
designed for the carriage of goods and with Insurance Program shall not be subject to this tax."
any number of wheels and
axles: Provided, That pick-ups shall be Section 47. A new section designated as Section 150-B under
considered as trucks. Chapter VI, Title VI of the NIRC, as amended, is hereby inserted
to read as follows:
"(c) Jeepney/jeepney substitutes shall mean
as ‘Philippine jeep or jeepney’ which are of the "Sec. 150-B. Sweetened Beverages -
jitney type Jocally designed and manufactured
generally from surplus parts and components. "(A) Rate and Base of Tax. - Effective January 1, 2018:
It shall also include jeepney substitutes that
are manufactured from brand-new single cab "(1) A tax of Six pesos (₱6.00) per liter of
chassis or cowl chassis and locally customized volume capacity shall be levied, assessed, and
rear body that has continuous sideway row collected on sweetened beverages using
seats with open rear door and without purely caloric sweeteners, and purely non-
retractable glass windows. caloric sweeteners, or a mix of caloric and
non-caloric sweeteners: Provided, That this
"(d) Bus shall mean a motor vehicle of any tax rate shall not apply to sweetened
configuration with gross vehicle weight of 4.0 beverages using high fructose corn
tons or more with any number of wheels and syrup: Provided, further, That sweetened
axles, which is generally accepted and beverages using purely coconut sap sugar and
specially designed for or public transportation. purely steviol glycosides shall be exempt from
this tax; and
"(e) Single cab chassis shall mean a motor
vehicle with complete engine power train and "(2) A tax of Twelve pesos (₱12.00) per liter of
chassis equipped with a cab that has a volume capacity shall be levied, assessed, and
maximum of two (2) doors and only one (1) collected on sweetened beverages using
row of seats. purely high fructose corn syrup or in
combination with any caloric or non-caloric
"(f) Special purpose vehicle shall mean a sweetener.
motor vehicle designed for specific
applications such as cement mixer, fire truck, "(B) Definition of Terms. - As used in this Act:
boom truck, ambulance and/or medical unit,
and off-road vehicles for heavy industries and "(1) Sweetened beverages (SBs) refer to non-
not for recreational activities. alcoholic beverages of any constitution (liquid,
powder, or concentrates) that are pre-
"(g) Hybrid electric vehicle shall mean a motor packaged and sealed in accordance with the
vehicle powered by electric energy, with or Food and Drug Administration (FDA)
without provision for off-vehicle charging, in standards, that contain caloric and/or non-
combination with gasoline, diesel or any other caloric sweeteners added by the
motive power: Provided, That, for purposes of manufacturers, and shall include, but not be
this Act, a hybrid electric vehicle must be able limited to the following, as described in the
20
Food Category System from Codex from the pressing of vegetables, the liquid
Alimentarius Food Category Descriptors resulting from the reconstitution of natural
(Codex Stan 192-1995, Rev. 2017 or the latest) vegetable juice concentrate, or the liquid
as adopted by the FDA: resulting from the restoration of water to
dehydrated natural vegetable juice that do
"(a) Sweetened juice drinks; not have added sugar or caloric sweetener;
"(b) Sweetened tea; "(4) Meal Replacement and Medically

Indicated Beverages - Any liquid or powder
"(c) All carbonated beverages; drink/product for oral nutritional therapy for
persons who cannot absorb or metabolize
dietary nutrients from food or beverages, or
"(d) Flavored water;
as a source of necessary nutrition used due to
a medical condition and an oral electrolyte
"(e) Energy and sports drinks;
solution for infants and children formulated to
prevent dehydration due to illness; and
"(f) Other powdered drinks not
classified as milk, juice, tea, and
"(5) Ground coffee, instant soluble coffee, and
coffee;
pre-packaged powdered coffee products.
"(g) Cereal and grain beverages; and

"(D) Filing of Return and Payment of Excise Tax and Penalty -
"(h) Other non-alcoholic beverages

"(1) Filing of Return and Payment of Excise Tax
that contain added sugar.
on Domestic and Imported Sweetened
Beverages. - The provision of Sections 130 and
"(2) Caloric sweetener refers to a substance 131 of the NIRC, as appropriate, shall apply to
that is sweet and includes sucrose, fructose, sweetened beverages.
and glucose that produces a certain
sweetness;
"(2) Penalty. - Upon final findings by the
Commissioner of Internal Revenue and/or
"(3) High fructose corn syrup refers to a sweet Customs that any manufacturer or importer,
saccharide mixture containing fructose and in violation of this Section, misdeclares or
glucose which is derived from corn and added misrepresents in the sworn statement
to provide sweetness to beverages, and which provided in Section 130(c) of the NIRC, as
includes other similar fructose syrup amended, any pertinent data or information,
preparations; and the penalty of summary cancellation or
withdrawal of the permit to engage in
"(4) Non-caloric sweetener refers to a business as manufacturer or importer of
substance that are artificially or chemically sweetened beverages as provided under
processed that produces a certain sweetness. Section 268 of the NIRC, as amended, shall be
These are substances which can be directly imposed.
added to beverages, such as aspartame,
sucralose, saccharin, acesulfame, potassium, "Any corporation, association or partnership liable for any of the
neotame, cyclamates and other non-nutritive acts or omissions in violation of this Section shall be fined treble
sweeteners approved by the Codex the amount of deficiency taxes, surcharges, and interest which
Alimentarius and adopted by the FDA. may be assessed pursuant to this Section.
"(C) Exclusions. - The following products, as described in the "Any person liable for any of the acts or omissions prohibited
food category system from Codex Alimentarius Food Category under this Section. shall be crirninal1y liable and penalized under
Descriptors (Codex Stan 192-1995, Rev. 2017 or the latest) as Section 254 of the NIRC, as amended. Any person who willfully
adopted by the FDA, are excluded from the scope of this Act: aids or abets in the commission of any such act or omission shall
be criminally liable in the same manner as the principal.
"(1) All milk products, including plain milk,
infant formula milk, follow-on milk, growing "If not a citizen of the Philippines, the offender shall be deported
up milk, powdered milk, ready-to-drink milk immediately after serving the sentence without further
and flavored milk, fermented milk, soymilk, proceedings for deportation.
and flavored soymilk;
"(E) Specific Responsibility of the Food and Drug Administration
"(2) One Hundred Percent (100%) Natural Fruit (FDA). - Starting June 1, 2018, the FDA shall require all
Juices - Original liquid resulting from the manufacturers and importers of sweetened beverages covered
pressing of fruit, the liquid resulting from the by this Act to indicate on the label the type of sweetener used,
reconstitution of natural fruit juice and on sweetened beverages in powder form to indicate on the
concentrate, or the liquid resulting from the label the equivalent of each serving per liter of volume capacity.
restoration of water to dehydrated natural
fruit juice that do not have added sugar or
"The FDA shall also conduct post marketing surveillance of the
caloric sweetener;
sweetened beverages on display in supermarkets, groceries or
retail stores and/or inspection of manufacturing sites to
"(3) One Hundred Percent (100%) Natural determine compliance with the requirements of this Section.
Vegetable Juices - Original liquid resulting Violations of the provisions of this Act, including but not limited
21
to, mislabeling or misbranding, shall, to the extent applicable, be "(b) Gold and chromite, four
punishable under existing laws. percent (4%).
"(F) Duty of the Commissioner to Ensure Payment of Taxes. - It "(4) On indigenous petroleum, a tax
shall be the duty of the Commissioner, among other things, to of six percent (6%) of the fair
prescribe a materially unique, secure and non removable international market price thereof,
identification, such as codes, stamps or other markings, to be on the first taxable sale, barter,
firmly and conspicuously affixed on and form part of the label of exchange or such similar transaction,
all excisable sweetened beverages. such tax to be paid by the buyer or
purchaser before removal from the
"For this purpose, the above mentioned control measure shall place of production. x x x.
be caused by the Commissioner to be printed with adequate
security features to ensure the payment of excise tax on "x x x."
sweetened beverages.
"(G) Review of Implementation of the Sweetened Beverage Tax. - further amended to read as follows:
At the start of the implementation of the sugar sweetened
beverage tax and every year thereafter, the Department of "Sec. 155. Manufacturers and/or Importers to Provide
Health, Department of Science and Technology, and Department Themselves with Counting or Metering Devices to Determine
of Finance shall review the impact of these provisions on its Volume of Production and Importation. - Manufacturers of
health objectives with the view to making recommendations on cigarettes, alcoholic products, oil products, and other articles
the tax rate on these beverages." subject to excise tax that can be similarly measured shall provide
themselves with such necessary number of suitable counting or
Section 48. Section 151 of the NIRC, as amended,is hereby metering devices to determine as accurately as possible the
further amended to read as follows: volume, quantity or number of the articles produced by them
under rules and regulations promulgated by the Secretary of
"Sec. 151. Mineral Products - Finance, upon recommendation of the
Commissioner: Provided, That the Department of Finance shall
"(A) Rates of Tax. - There shall be levied, maintain a registry of all petroleum manufacturers and/or
assessed and collected on minerals, mineral importers and the articles being manufactured and/or imported
products and quarry resources, excise tax as by them: Provided, further, That the Department of Finance shall
follows: mandate the creation of a real-time inventory of petroleum
articles being manufactured, imported or found in storage
depots of such petroleum manufacturers and/or
"(1) On domestic or imported coal
importers: Provided, finally, That importers of finished
and coke, notwithstanding any
petroleum products shall also provide themselves with Bureau-
incentives granted in any law or
accredited metering devices to determine as accurately as
special law:
possible the volume of petroleum products imported by them.
"Effective January 1, 2018, Fifty
This requirement shall be complied with before commencement
pesos (₱50.00) per metric ton;
of operations."
"Effective January 1, 2019, One
hundred pesos (₱100.00) per metric
ton; and
"Sec. 171. Authority of Internal Revenue Officer in Searching for

"Effective January 1, 2020, One
and Testing Taxable Articles. - Any internal revenue officer may,
hundred fifty pesos {₱150.00) per
in the discharge of his official duties, enter any house, building
metric ton.
or place where articles subject to tax under this Title are
produced or kept, or are believed by him upon reasonable
"(2) On all nonmetallic minerals and
grounds to be produced or kept, so far as may be necessary to
quarry resources, a tax of four
examine, test, discover or seize the same.
percent (4%) based on the actual
market value of the gross output
"He may also stop and search any vehicle or other means of
thereof at the time of removal, in the
transportation when upon reasonable grounds he believes that
case of those locally extracted or
the same carries any article on which the excise tax has not been
produced; or the value used by the
paid.
Bureau of Customs in determining
tariff and customs duties, net of
excise tax and value-added tax in the "Subject to rules and regulations to be issued by the Secretary of
case of importation. Finance, the Commissioner of Internal Revenue or his authorized
representatives may conduct periodic random field tests and
confirmatory tests on fuel required to be marked under Section
"x x x:
148-A found in warehouses, storage tanks, gas stations and
other retail outlets, and in such other properties of persons
"(a) Copper and other
engaged in the sale, delivery, trading, transportation,
metallic minerals, four
distribution, or importation of fuel intended for the domestic
percent (4%); and
market: Provided, "(a) Random field testing shall be conducted
in the presence of revenue or customs officers, fuel marking
provider, and the authorized representative of the owner of the
22
fuel to be tested: Provided, That an employee assigned or Section 54. Section 178 of the NIRC, as amended, is hereby
working at the place where the random field tests conducted further amended to read as follows:
shall be deemed an authorized representative of the owner;
"Sec. 178. Stamp Tax on Bank Checks, Drafts, Certificates of
"(b) All field tests shall be properly filmed or Deposit not Bearing Interest, and Other Instruments. - On each
video taped, and documented; and bank check, draft, or certificate of deposit not drawing interest,
or order for the payment of any sum of money drawn upon or
"(c) A sample of the randomly tested fuel shall issued by any bank, trust company, for any person or persons,
be immediately obtained by the revenue or companies or corporations, at sight or on demand there shall be
customs officer upon discovering that the collected a documentary stamp tax of Three pesos (₱3.00)."
same unmarked, adulterated, or diluted:
Section 55. Section 179 of the NIRC, as amended. is hereby
"Provided, further, That confirmatory fuel test certificates issued further amended to read as follows:
by fuel testing facilities shall be valid for any legal purpose from
the date of issue, and shall constitute admissible and conclusive "Sec. 179. Stamp Tax on All Debt Instruments. - On every original
evidence before any court." issue of debt instruments, there shall be collected a
documentary stamp-tax of One peso and fifty centavos (₱1.50)
Section 51. Section 174 of the NIRC, as amended, is hereby on each Two hundred pesos (₱200), or fractional part thereof,
further amended to read as follows: of the issue price of any such debt instruments: Provided, That
for such debt instruments with terms of less than one (1) year,
"Sec. 174. Stamp Tax on Original Issue of Shares of Stock. - On the documentary stamp tax to be collected shall be of a
every original issue, whether on organization, reorganization or proportional amount in accordance with the ratio of its term in
for any lawful purpose, of shares of stock by any association, number of days to three hundred sixty-five (365) days: Provided,
company, or corporation; there shall be collected a further, That only one documentary stamp tax shall be imposed
documentary stamp tax of Two pesos (₱2.00) on each Two on either loan agreement, or promissory notes issued to secure
hundred pesos (₱200), or fractional part thereof, of the par such loan.
value, of such shares of stock: Provided, That in the case of the
original issue of shares of stock without par value, the amount "x x x."
of the documentary stamp tax herein prescribed shall be based
upon the actual consideration for the issuance of such shares of Section 56. Section 180 of the NIRC, as amended, is hereby
stock: Provided, further, That in the case of stock dividends, on further amended to read as follows:
the actual value represented by each share."
"Sec. 180. Stamp Tax on All Bills of Exchange or Drafts. - On all
Section 52. Section 175 of the NIRC, as amended, is hereby bills of exchange (between points within the Philippines) or
further amended to read as follows: drafts, there shall be collected a documentary stamp tax of Sixty
centavos (₱0.60) on each Two hundred pesos (₱200), or
"Sec. 175. Stamp Tax on Sales, Agreements to Sell, Memoranda fractional part thereof, of the face value of any such bill of
of Sales, Deliveries or Transfer of Shares or Certificates of Stock - exchange or draft."
On all sales, or agreements to sell, or memoranda of sales, or
deliveries, or transfer of shares or certificates of stock in any Section 57. Section 181 of the NIRC, as amended, is hereby
association, company, or corporation, or transfer of such further amended to read as follows:
securities by assignment in blank, or by delivery, or by any paper
or agreement, or memorandum or other evidences of transfer "Sec. 180. Stamp Tax Upon Acceptance of Bills of Exchange and
or sale whether entitling the holder in any manner to the benefit Others. - Upon any acceptance or payment of any bill of
of such stock, or to secure the future payment of money, or for exchange or order for the payment of money purporting to be
the future transfer of any stock, there shall be collected a drawn in a foreign country but payable in the Philippines, there
documentary stamp tax of One peso and fifty centavos (₱1.50) shall be collected a documentary stamp tax of Sixty centavos
on each Two hundred pesos (₱200), or fractional part thereof, (₱0.60) on each Two hundred pesos (₱200), or fractional part
of the par value of such stock: Provided, That only one tax shall thereof, of the face value of any such bill of exchange, or order,
be collected on each sale or transfer of stock from one person or the Philippine equivalent of such value, if expressed in foreign
to another, regardless of whether or not a certificate of stock is currency."
issued, indorsed, or delivered in pursuance of such sale or
transfer: and Provided, further, That in the case of stock without Section 58. Section 182 of the NIRC, as amended, is hereby
par value the amount of the documentary stamp tax herein further amended to read as follows:
prescribed shall be equivalent to fifty percent (50%) of the
documentary stamp tax paid upon the original issue of said
"Sec. 182. Stamp Tax on Foreign Bills of Exchange and Letters of
stock."
Credit. - On all foreign bills of exchange and letter of credit
(including orders, by telegraph or otherwise, for the payment of
Section 53. Section 177 of the NIRC, as amended, is hereby money issued by express or steamship companies or by any
further amended to read as follows: person or persons) drawn in but payable out of the Philippines
in a set of three (3) or more according to the custom of
"Sec. 177. Stamp Tax on Certificates of Profits or Interest in merchants and bankers, there shall be collected a documentary
Property or Accumulations. - On all certificates of profits, or any stamp tax of Sixty centavos (₱0.60) on each Two hundred pesos
certificate or memorandum showing interest in the property or (₱200), or fractional part thereof, of the face value of any such
accumulations of any association, company or corporation, and bill of exchange or letter of credit, or the Philippine equivalent
on all transfers of such certificates or memoranda, there shall be of such face value, if expressed in foreign
collected a documentary stamp tax of One peso (₱1.00) on each
Two hundred pesos (₱200), or fractional part thereof, of the face Section 59. Section 183 of the NIRC, as amended, is hereby
value of such certificates or memorandum." further amended to read as follows:
23
"Sec. 183. Stamp Tax on Life Insurance Policies.— On all policies (₱1.00), an additional tax of Twenty centavos (₱0.20) on every
of insurance or other instruments by whatever name the same One peso (₱1.00), or fractional part thereof, shall be collected."
may be called, whereby any insurance shall be made or renewed
upon any life or lives, there shall be collected a one-time Section 64. Section 191 of the same Code, as amended, is hereby
documentary stamp tax at the following rates: further amended to read as follows:
"If the amount of insurance does not exceed ₱100,000 "Sec. 191. Stamp Tax on Bills of Lading or Receipts. - On each set
Exempt
of bills of lading or receipts (except charter party) for any goods,
"If the amount of Insurance exceeds ₱100,000 but does not exceed merchandise or effects shipped from one port or place in the
₱20.00
₱300,000 Philippines (except on ferries across rivers), or to any foreign
port, there shall be collected a documentary stamp tax of Two
"If the amount of insurance exceeds ₱300,000 but does not exceed
pesos (₱2.00), if the value of such goods exceeds One hundred
₱50.00
₱500,000
pesos (₱100) and does not exceed One thousand pesos
"If the amount of insurance exceeds ₱500,000 but does not exceed (₱1,000); Twenty pesos (₱20.00), if the value exceeds One
₱100.00
thousand pesos (₱1,000): Provided, however, That freight
₱750,000
tickets covering goods, merchandise or effects carried as
"If the amount of insurance exceeds ₱750,000 but does not exceed accompanied baggage of passengers on land and water carriers
₱150.00
₱1,000,000 primarily engaged in the transportation of passengers are
hereby exempt."
"If the amount of insurance exceeds ₱1,000,000 ₱200.00"
Section 60. Section 186 of the NIRC, as amended, is hereby further amended to read as follows:
"Sec. 192. Stamp Tax on Proms. - On each proxy for voting at any
"Sec. 186. Stamp Tax on Policies ofAnnuities and Pre-Need election of officers of any company or association, or for any
Plans. - On all policies of annuities, or other instruments by other purpose, except proxies issued affecting the affairs of
whatever name the same may be called, whereby an annuity associations or corporations organized for religious, charitable
may be made, transferred or redeemed, there shall be collected or literary purposes, there shall be collected a documentary
a documentary stamp tax of One peso (₱1.00) on each Two stamp tax of Thirty pesos (₱30.00)."
hundred pesos (₱200), or fractional part thereof, of the
premium or installment payment on contract price collected. On Section 66. Section 193 of the NIRC, as amended, is hereby
pre-need plans, the documentary stamp tax shall be Forty further amended to read as follows:
centavos (₱0.40) on each Two hundred pesos (₱200), or
fractional part thereof of the premium or contribution "Sec. 193. Stamp Tax on Powers of Attorney. - On each power of
collected." attorney to perform any act whatsoever, except acts connected
with the collection of claims due from or accruing to the
Section 61. Section 188 of the NIRC, as amended, is hereby Government of the Republic of the Philippines, or the
further amended to read as follows: government of any province, city or municipality, there shall be
collected a documentary stamp tax of Ten pesos (₱10.00)."
"Sec. 188. Stamp Tax on Certificates. - On each certificate of
damage or otherwise, and on every other certificate or Section 67. Section 194 of the NIRC, as amended, is hereby
document issued by any customs officer, marine surveyor, or further amended to read as follows:
other person acting as such, and on each certificate issued by a
notary public, and on each certificate of any description required "Sec. 194. Stamp Tax on Leases and Other Hiring Agreements. -
by law or by rules or regulations of a public office, or which is On each lease, agreement, memorandum, or contract for hire,
issued for the purpose of giving information, or establishing use or rent of any lands or tenements, or portions thereof, there
proof of a fact, and not otherwise specified herein, there shall shall be collected a documentary stamp tax of Six pesos (₱6.00)
be collected a documentary stamp tax of Thirty pesos (₱30.00)." for the first Two thousand pesos (₱2,000), or fractional part
thereof, and an additional Two pesos (₱2.00) for every One
Section 62. Section 189 of the NIRC, as amended, is hereby thousand pesos (₱1,000) or fractional part thereof, in excess of
further amended to read as follows: the first Two thousand pesos (₱2,000) for each year of the term
of said contract or agreement."
"Sec. 189. Stamp Tax on Warehouse Receipts. - On each
warehouse receipt for property held in storage in a public or Section 68. Section 195 of the NIRC, as amended, is hereby
private warehouse or yard for any person other than the further amended to read as follows:
proprietor of such warehouse or yard, there shall be collected a
documentary stamp tax of Thirty pesos (₱30.00): Provided, That "Sec. 195. Stamp Tax on Mortgages, Pledges and Deeds of
no tax shall be collected on each warehouse receipt issued to Trust. - On every mortgage or pledge of lands, estate, or
any one person in any one calendar month covering property the property, real or personal, heritable or movable, whatsoever,
value of which does not exceed Two hundred pesos (₱200)." where the same shall be made as a security for the payment of
any definite and certain sum of money lent at the time or
Section 63. Section 190 of the NIRC, as amended, is hereby previously due and owing or forborne to be paid, being payable,
further amended to read as follows: and on any conveyance of land, estate, or property whatsoever,
in trust or to be sold, or otherwise converted into money which
"Sec. 190. Stamp Tax on Jai-alai, Horse Race, Tickets, Lotto or shall be and intended only as security, either by express
Other Authorized Numbers Games. - On each jai-alai, horse race stipulation or otherwise, there shall be collected a documentary
ticket, lotto, or other authorized numbers games, there shall be stamp tax at the following rates:
collected a documentary stamp tax of Twenty centavos
(₱0.20): Provided, That if the cost of the ticket exceed One peso
24
"(a) When the amount secured does not exceed Five thousand charter or contract does not exceed six (6)
pesos (₱5,000), Forty pesos (₱40.00). months, One thousand pesos (₱1,000); and
for each month or fraction of a month in
"(b) On each Five thousand pesos (₱5,000), or fractional part excess of six (6) months, an additional tax of
thereof in excess of Five thousand pesos (₱5,000), an additional One hundred pesos (₱100) shall be paid.
tax of Twenty pesos (₱20.00).
"(b) If the registered gross tonnage exceeds
"x x x." one thousand (1,000) tons and does not
exceed ten thousand (10,000) tons, and the
Section 69. Section 196 of the NIRC, as amended, is hereby duration of the charter or contract does not
further amended to read as follows: exceed six (6) months, Two thousand pesos
(₱2,000); and for each month or fraction of a
month in excess of six (6) months, an
"Sec. 196. Stamp Tax on Deeds of Sale, Conveyances and
additional tax of Two hundred pesos (₱200)
Donation of Real Property. - On all conveyances, donations,
shall be paid.
deeds, instruments, or writings, other than grants, patents or
original certificates of adjudication issued by the Government,
whereby any land, tenement, or other realty sold shall be "(c) If the registered gross tonnage exceeds
granted, assigned, transferred, donated or otherwise conveyed ten thousand (10,000) tons and the duration
to the purchaser, or purchasers, or to any other person or of the charter or contract does not exceed six
persons designated by such purchaser or purchasers, or donee, (6) months, Three thousand pesos (₱3,000);
there shall be collected a documentary stamp tax, at the rates and for each month or fraction of a month in
herein below prescribed, based on the consideration contracted excess of six (6) months, an additional tax of
to be paid for such realty or on its fair market value determined Three hundred pesos (₱300) shall be paid."
in accordance with Section 6(E) of this Code, whichever is
higher: Provided, That when one of the contracting parties is the Section 71. Section 232 of the NIRC, as amended, is hereby
Government, the tax herein imposed shall be based on the further amended to read as follows:
actual consideration:
"Sec. 232. Keeping of Books of Accounts.—
"(a) When the consideration, or value received
or contracted to be paid for such realty, after "(A) Corporations, Companies, Partnerships or Persons Required
making proper allowance of any to Keep Books of Accounts.— All corporations, companies,
encumbrance, does not exceed One thousand partnerships or persons required by law to pay internal revenue
pesos (₱1,000), Fifteen pesos (₱15.00). taxes shall keep and use relevant and appropriate set of
bookkeeping records duly authorized by the Secretary of
"(b) For each additional One thousand pesos Finance wherein all transactions and results of operations are
(₱1,000), or fractional part thereof in excess of shown and from which all taxes due the Government may readily
One thousand pesos (₱1,000) of such and accurately be ascertained and determined any time of the
consideration or value, Fifteen pesos (₱15.00). year: Provided, That corporations, companies, partnerships or
persons whose gross annual sales, earnings, receipts or output
"Transfers exempt from donor’s tax under Section 101(a) and (b) exceed Three million pesos (₱3,000,000), shall have their books
of this Code shall be exempt from the tax imposed under this of accounts audited and examined yearly by independent
Section. Certified Public Accountants and their income tax returns
accompanied with a duly accomplished Account Information
Form (AIF) which shall contain, among others, information lifted
"When it appears that the amount of the documentary stamp
from certified balance sheets, profit and loss statements,
tax payable hereunder has been reduced by an incorrect
schedules listing income-producing properties and the
statement of the consideration in any conveyance, deed,
corresponding income therefrom and other relevant
instrument or writing subject to such tax the Commissioner,
statements.
provincial or city Treasurer, or other revenue officer shall. from
the assessment rolls or other reliable source of information,
assess the property of its true market value and collect the "x x x."
proper tax thereon."
Section 70. Section 197 of the NIRC, as amended, is hereby further amended to read as follows:
"Sec. 236. Registration Requirements -
"Sec. 197. Stamp Tax on Charter Parties and Similar
Instruments. - On every charter party, contract or agreement for "(A) Requirements. - x x x
the charter of any ship, vessel or streamer, or any letter or
memorandum or other writing between the captain, master or "x x x
owner or other person acting as agent of any ship, vessel or
steamer, and any other person or persons for relating to the "The registration shall contain the taxpayer’s name, style,
charter of any such ship, vessel or streamer, and on any renewal place of residence, business, and such other information as
or transfer of such charter, contract, agreement, letter or may be required by the Commissioner in the form
memorandum there shall be collected a documentary stamp tax prescribed therefor: Provided, That the Commissioner shall
the following rates: simplify the business registration and tax compliance
requirements of self-employed individuals and/or
"(a) If the registered gross tonnage of the ship, professionals.
vessel or steamer does not exceed one
thousand (1,000) tons, and the duration of the "x x x
25
"(G) Persons Required to Register for Value-Added Tax - and taxpayers under the jurisdiction of the Large Taxpayers
Service to issue electronic receipts or sales or commercial
"(1) x x x invoices in lieu of manual receipts or sales or commercial
invoices subject to rules and regulations to be issued by th;
"(a) His gross sales or receipts for the past twelve Secretary of Finance upon recommendation of the
(12) months, other than those that are exempt Commissioner and after a public hearing shall have been held for
under Section 109(A) to (BB), have exceeded this purpose: Provided, That taxpayers not covered by the
Three million pesos (₱3,000,000); or mandate of this provision may issue electronic receipts or, sales
or commercial invoices, in lieu of manual receipts, and sales and
commercial invoices.
"(b) There are reasonable grounds to believe that
his gross sales or receipts for the next twelve (12)
months, other than those that are exempt under "The original of each receipt or invoice shall be issued to the
Section 109(A) to (BB), will exceed Three million purchaser, customer or client at the time the transaction is
pesos (₱3,000,000). effected, who, if engaged in business or in the exercise of
profession, shall keep and preserve the same in his place of
business for a period of three (3) years from the close of the
"x x x
taxable year in which such invoice or receipt was issued, while
the duplicate shall be kept and preserved by the issuer, also in
"(H) Optional Registration for Value-Added Tax of Exempt
his place of business, for a like period: Provided, That in case of
Person. - (1) Any person who is not required to register
electronic receipts or sales or commercial invoices, the digital
for value-added tax under Subsection (G) hereof may
records of the same shall be kept by the purchaser, customer or
elect to register for value-added tax by registering with
client and the issuer for the same period above stated.
the Revenue District Office that has jurisdiction over the
head office of that person, and paying the annual
"The Commissioner may, in meritorious cases, exempt any
registration fee in Subsection (B) hereof.
person subject to internal revenue tax from compliance with the
provisions of this Section."
"(2) Any person who elects to register under this
Subsection shall not be entitled to cancel his
Section 74. A new section designated as Section 237-A under
registration under Subsection (F)(2) for the next three
Chapter II, Title IX of the NIRC, as amended, is hereby inserted
(3) years.
to read as follows:
"Provided, That any person taxed under Section 24(A)(2)(b) and
"Sec. 237-A. Electronic Sales Reporting System.— Within five (5)
24(A)(2)(c)(2)(a) of the NIRC who elected to pay the eight
years from the effectivity of this Act and upon the establishment
percent (8%) tax on gross sales or receipts shall not be allowed
of a system capable of storing and processing the required data,
to avail of this option.
the Bureau shall require taxpayers engaged in the export of
goods and services, and taxpayers under the jurisdiction of the
"For purposes of Title IV of this Code, any person who has
Large Taxpayers Service to electronically report their sales data
registered value-added tax as a tax type in accordance with the
to the Bureau through the use of electronic point of sales
provisions of Subsection (C) hereof shall be referred to as a ‘VAT-
systems, subject to rules and regulations to be issued by the
registered person’ who shall be assigned only one Taxpayer
Secretary of Finance as recommended by the Commissioner of
Identification Number (TIN).
Internal Revenue: Provided, That the machines, fiscal devices,
and fiscal memory devices shall be at the expense of the
"x x x." taxpayers.
Section 73. Section 237 of the NIRC, as amended, is hereby "The data processing of sales and purchase data shall comply
further amended to read as follows: with the provisions of Republic Act No. 10173, otherwise known
as the "Data Privacy Act" and Section 270 of the NIRC, as
"Sec. 237. Issuance of Receipts or Sales or Commercial amended, on unlawful divulgence of taxpayer information and
Invoices.— such other laws relating to the confidentiality of information.
"(A) Issuance. - All persons subject to an internal revenue tax "The Bureau shall also establish policies, risk management
shall, at the point of each sale and transfer of merchandise or for approaches, actions, trainings, and technologies to protect the
services rendered valued at One hundred pesos (₱100) or more, cyber environment, organization, and data in compliance with
issue duly registered receipts or sale or commercial invoices, Republic Act No. 10175 or the "Cybercrime Prevention Act of
showing the date of transaction, quantity, unit cost and 2012."
description of merchandise or nature of
service: Provided, however, That where the receipt is issued to Section 75. Section 249 of the NIRC, as amended, is hereby
cover payment made as rentals, commissions, compensation or further amended to read as follows:
fees, receipts or invoices shall be issued which shall show the
name, business style, if any, and address of the purchaser,
"Sec. 249. Interest -
customer or client: Provided, further, That where the purchaser
is a VAT-registered person, in addition to the information herein
"(A) In General. - There shall be assessed and
required, the invoice or receipt shall further show the Taxpayer
collected on any unpaid amount of tax,
Identification Number (TIN) of the purchaser.
interest at the rate of double the legal interest
rate for loans or forbearance of any money in
"Within five (5)years from the effectivity of this Act and upon the
the absence of an express stipulation as set by
establishment of a system capable of storing and processing the
the Bangko Sentral ng Pilipinas from the date
required data. the Bureau shall require taxpayers engaged in the
prescribed for payment until the amount is
export of goods and services, taxpayers engaged in e-commerce,
fully paid: Provided, That in no case shall the
26
deficiency and the delinquency interest current taxable year for each day of violation or Ten thousand
prescribed under Subsections (B) and (C) pesos (₱10,000), whichever is higher: Provided, That should the
hereof, be imposed simultaneously. aggregate number of days of violation exceed one hundred
eighty (180) days within a taxable year, an additional penalty of
"(B) Deficiency Interest - Any deficiency in the permanent closure of the taxpayer shall be imposed: Provided,
tax due, as the term is defined in this Code, further, That if the failure to transmit is due to force majeure or
shall be subject to the interest prescribed in any causes beyond the control of the taxpayer the penalty shall
Subsection (A) hereof, which interest shall be not apply."
assessed and collected from the date
prescribed for its payment until the full Section 79. A new section designated as Section 264-B under
payment thereof, or upon issuance of a notice Chapter II, Title X of the NIRC, as amended, is hereby inserted to
and demand by the Commissioner of Internal read as follows:
Revenue, whichever comes earlier.
"Sec. 264-B. Purchase, Use, Possession, Sale or Offer to Sell,
"(C) Delinquency Interest. - x x x Installment, Transfer, Update, Upgrade, Keeping or Maintaining
of Sales Suppression Devices.— Any person who shall purchase,
"x x x." use, possess, sell or offer to sell, install, transfer, update,
upgrade, keep, or maintain any software or device designed for,
Section 76. Section 254 of the NIRC, as amended, is hereby or is capable of: (a) suppressing the creation of electronic
further amended to read as follows: records of sale transactions that a taxpayer is required to keep
under existing tax laws and/or regulations; or (b) modifying,
hiding, or deleting electronic records of sales transactions and
"Sec. 254. Attempt to Evade or Defeat Tax. - Any person who
providing a ready means of access to them, shall be punished by
willfully attempts in any manner to evade or defeat any tax
a fine of not less than Five hundred thousand pesos (₱500,000)
imposed under this Code or the payment thereof shall, in
but not more than Ten million pesos (₱10,000,000), and suffer
addition to other penalties provided by law, upon conviction
imprisonment of not less than two (2) years but not more than
thereof, be punished with a fine of not less than Five hundred
four (4) years: Provided, That a cumulative suppression of
thousand pesos (₱500,000) but not more than Ten million pesos
electronic sales record in excess of the amount of Fifty million
(₱10,000,000), and imprisonment of not less than six (6) years
pesos (₱50,000,000) shall be considered as economic sabotage
but not more than ten (10) years: Provided, That the conviction
and shall be punished in the maximum penalty provided for
or acquittal obtained under this Section shall not be a bar to the
under this provision."
filing of a civil suit for the collection of taxes."
Section 80. A new section designated as Section 265-A under

Chapter II, Title X of the NIRC, as amended, is hereby inserted to
read as follows:
"Sec. 264. Failure or Refusal to Issue Receipts or Sales or
"Sec. 265-A. Offenses Relating to Fuel Marking.— All offenses
Commercial Invoices, Violations Related to the Printing of such
relating to fuel marking shall, in addition to the penalties
Receipts or Invoices and Other Violations -
imposed under Title X of the NIRC, as amended, Section 1401 of
Republic Act No. 10863, otherwise known as the ‘Customs
"(a) x x x
Modernization and Tariff Act (CMTA)’,and other relevant laws,
be punishable as follows:
"(b) Any person who commits any of the acts enumerated
hereunder shall be penalized with a fine of not less than Five
"(a) Any person who is found to be engaged in the sale,
hundred thousand pesos (₱500,000) but not more than Ten
trade, delivery, distribution or transportation of
million pesos (₱10,000,000), and imprisonment of not less than
unmarked fuel in commercial quantity held for
six (6) years but not more than ten (10) years:
domestic use or merchandise shall, upon conviction,
suffer the penalties of:
"(1) x x x;
"(1) For the first offense, a fine of Two million
"(2) x x x; five hundred thousand pesos (₱2,500,000);
"(3) x x x; or "(2) For the second offense, a fine of Five

million pesos (₱5,000,000); and
"(4) Printing of other fraudulent receipts or
sales or commercial invoices." "(3) For the third offense,a fine of Ten million
pesos (₱10,000,000)and revocation of license
Section 78. A new section designated as Section 264-A under to engage in any trade or business.
Chapter II, Title X of the NIRC, as amended, is hereby inserted as
follows: "(b) Any person who causes the removal of the official
fuel marking agent from marked fuel, and the
"Sec. 264-A. Failure to Transmit Sales Data Entered on Cash adulteration or dilution of fuel intended for sale to the
Register Machine (CRM)/Point of Sales System (POS) Machines domestic market, or the knowing possession, storage,
to the BIR’s Electronic Sales Reporting System. - Any taxpayer transfer or offer for sale of fuel obtained as a result of
required to transmit sales data to the Bureau’s electronic sales such removal, adulteration or dilution shall be
reporting system but fails to do so, shall pay, for each day of penalized in the same manner and extent as provided
violation, a penalty amounting to one-tenth of one percent (1⁄10 for in the preceding Subsection.
of 1%) of the annual net income as reflected in the taxpayer’s
audited financial statement for the second year preceding the
27
"(c) Any person who commits any of the acts report such knowledge or information to then superior
enumerated hereunder shall, upon conviction, be officer, or failure to report as otherwise required by law;
punished by a fine of not less than One million pesos
(₱1,000,000) but not more than Five million pesos "(i) x x x; and
(₱5,000,000), and suffer imprisonment of not less than
four (4) years but not more than eight (8) years: "(j) Deliberate failure to act on the application for refunds
within the prescribed period provided under Section 112 of
"(1) Making, importing, selling, using or possessing this Act.
fuel markers without express authority;
"Provided, That the provisions of the foregoing paragraph
"(2) Making, importing, selling, using or possessing notwithstanding, any internal revenue officer for which a prima
counterfeit fuel markers; facie case of grave misconduct has been established shall, after
due notice and hearing of the administrative case and subject to
"(3) Causing another person or entity to commit Civil Service Laws, be dismissed from the revenue
any of the two (2) preceding acts; or service: Provided, further, That the term ‘grave misconduct’, as
defined in the Civil Service Law, shall include the issuance of fake
"(4) Causing the sale, distribution, supply or letters of authority and receipts, forgery of signature, usurpation
transport of legitimately imported, in-transit, of authority and habitual issuance of unreasonable assessments.
manufactured or procured controlled precursors
and essential chemicals, in diluted, mixtures or in Section 82. Section 288 of the NIRC, as amended, is hereby
concentrated form, to any person or entity further amended to read as follows:
penalized in Subsections (a), (b), or (c) hereof,
including but not limited to, packaging, "Sec. 288. Disposition of Incremental Revenue -
repackaging, labeling, relabeling or concealment
of such transaction through fraud, destruction of "(A) x x x
documents, fraudulent use of permits, "(B) x x x
misdeclaration, use of front companies or mail "(C) x x x
fraud. "(D) x x x
"(E) x x x
"(d) Any person who willfully inserts, places, adds or
attaches directly or indirectly, through any overt or "(F) Incremental Revenues from the Tax Reform for Acceleration
covert. act, whatever quantity of any unmarked fuel, and Inclusion (TRAIN). - For five (5) years from the effectivity of
counterfeit additive or chemical in the person, house, this Act, the yearly incremental revenues generated shall be
effects, inventory, or in the immediate vicinity of an automatically appropriated as follows:
innocent individual for the purpose of implicating,
incriminating or imputing the commission of any
"(1) Not more than-seventy percent (70%) to fund
violation of this Act shall, upon conviction, be punished
infrastructure projects such as, but not limited to, the
by a fine of not less than Five million pesos (₱5,000,000)
Build, Build, Build Program and provide infrastructure
but not more than Ten million pesos (₱10,000,000), and
programs to address congestion through mass transport
suffer imprisonment of not less than four (4) years but
and new road networks military infrastructure, sports
not more than eight (8) years.
facilities for public schools, and potable drinking water
supply in all public places; and
"(e) Any person who is authorized, licensed or
accredited under this Act and its implementing rules to
"(2) Not more than thirty percent (30%) to fund:
conduct fuel tests, who issues false or fraudulent fuel
test results knowingly, willfully or through gross
"(a) Programs under Republic Act No. 10659 otherwise
negligence, shall suffer the additional penalty of
known as ‘Sugarcane Industry Development Act of
imprisonment ranging from one (1) year and one (1)
day to two (2) years and six (6) months. 2015’, to advance the self-reliance of sugar farmers
that will increase productivity, provide livelihood
opportunities, develop alternative farming systems and
"The additional penalties of revocation of the license to practice
ultimately enhance farmers’ income;
his profession in case of a practitioner, and the closure of the
fuel testing facility, may also be imposed at the instance of the
"(b) Social mitigating measures and investments in: (i)
court."
education, (ii) health, targeted nutrition, and anti-
hunger programs for mothers infants, and young
children, (iii) social protection, (iv) employment, and (v)
housing that prioritize and directly benefit both the
poor and near-poor households;
"Sec. 269. Violations Committed by Government Enforcement
Officers. - x x x
"(c) A social welfare and benefits program where
qualified beneficiaries shall be provided with a social
"(a) x x x; benefits card to avail of the following social benefits:
"x x x "(i) Unconditional cash transfer to households in the

first to seventh income deciles of the National
"(h) Having knowledge or information of any violation of Household Targeting System for Poverty Reduction
this Code or of any fraud committed on the revenues (NHTS-PR), Pantawid Pamilyang Pilipino Program,
collectible by the Bureau of Internal Revenue, failure to and the social pension program for a period of three
28
(3) years from the effectivity of this "At the end of five (5) years from the effectivity of this Act, all
Act: Provided, That the unconditional cash transfer earmarking provisions under Subsection (F), shall cease to exist
shall be Two hundred pesos (₱200.00) per month and all incremental revenues derived under this Act shall accrue
for the first year and Three hundred pesos to the General Fund of the government."
(₱300.00) per month for the second year and third-
year, to be implemented by the Department of Section 83. Reportorial Requirements. - The interagency
Social Welfare and Development (DSWD); committee created and the concerned
departments/agencies/beneficiaries under Section 82 of this Act
"(ii) Fuel vouchers to qualified franchise holders of shall submit to the President of the Senate of th Philippines, the
Public Utility Jeepneys (PUJs); Speaker of the House of Representatives, the Senate Committee
on Finance and the House Committee on Appropriations a
"(iii)For minimum wage earners, unemployed, and detailed report on the expenditure of the amounts earmarked
the poorest fifty percent (50%) of the population: hereon copy furnished the Chairpersons of the Committee on
Ways and Means of both Houses of Congress. The report shall
"(1) Fare discount from all public utility vehicles likewise be posted on the official website of the agencies
(except trucks for hire and school transport concerned.
service) in the amount equivalent to ten percent
(10%) of the authorized fare; Section 84. Implementing Rules and Regulations. - Within thirty
(30) days from the effectivity of this Act, the Secretary of Finance
"(2) Discounted purchase of National Food shall. upon the recommendation of the Commissioner of
Authority (NFA) rice from accredited retail Internal Revenue, promulgate the necessary rules and
stores in the amount equivalent to ten percent regulations for its effective implementation.
(10%) of the net retail prices, up to a maximum
of twenty (20) kilos per month; and Section 85. Separability Clause. - If any provision of this Act is
subsequently declared invalid or unconstitutional, the other
"(3) Free skills training under a program provisions hereof which are n~t affected thereby shall remain in
implemented by the Technical Skills and full force and effect.
Development Authority (TESDA).
Section 86. Repealing Clause. - The following laws or provisions
"Provided, That benefits or grants contained in of laws are hereby repealed and the persons and/or transactions
this Subsection shall not be availed in addition to affected herein are made subject to the VAT provision of Title IV
any other discounts. of the NIRC, as amended:
"(iv) Other social benefits programs to be developed (a) Section 3 of Presidential Decree (P.D.). 1972, s.
and implemented by the government. 1985, as amended, Sections 4 and 5 of Executive Order
No. (E.O.) 1057, s. 1985, and Section 4 of E.O. 1064, s.
1985, insofar as the VAT tax exemption and tax credit is
"Notwithstanding any provisions herein to the contrary, the
concerned;
incremental revenues from the tobacco taxes under this Act
shall be subject to Section 3 of Republic Act No. 7171, otherwise
known as ‘An Act to Promote the Development of the Farmer in (b) Section 10, insofar as VAT exemption is concerned,
the Virginia Tobacco Producing Provinces’, and Section 8 of of Republic Act No. (R.A.) 6807 or An Act Converting the
Republic Act No. 8240, otherwise known as ‘An Act Amending Mati Community College into a State College to be
Sections 138, 139, 140 and 142 of the National Internal Revenue known as the Davao Oriental State College of Science
Code, as Amended, and for Other Purposes’. and Technology, Providing for a Charter for this
Purpose, Expanding its Curricular Offerings, Redirecting
its Objectives, and Appropriating Funds Therefor;
"An interagency committee, chaired by the Department of
Budget and Management (DBM) and co-chaired by DOF and
DSWD, and comprised of the National Economic and (c) Sections 18 and 19, insofar as VAT exemption is
Development Authority (NEDA), Department of Transportation concerned, of R.A. 6847 or The Philippine Sports
(DOTr), Department of Education (DepEd), Department of Commission Act;
Health (DOH), Department of Labor and Employment (DOLE),
National Housing Authority (NHA), Sugar Regulatory (d) Section 8(d), last paragraph, insofar as VAT
Administration (SRA), Department of the Interior and Local exemption is concerned, of R.A. 7278 or An Act
Government (DILG), Department of Energy (DOE), NFA, and Amending Commonwealth Act No. 111, as Amended by
TESDA, is hereby created to oversee the identification of P.D. 460, entitled An Act to Create a Public Corporation
qualified beneficiaries and the implementation of these projects to be Known as the Boy Scouts of the Philippines, and
and programs: Provided, That qualified beneficiaries under to Define its Powers and Purposes, by Strengthening
Subsection (c) hereof shall be identified using the National ID the Volunteer and Democratic Character of the Boy
System which may be enacted by Congress. Scouts of the Philippines and for Other Purposes;
"Within sixty (60) days from the end of the three (3)-year period (e) Section 1, insofar as VAT exemption is concerned, of
from the effectivity of this Act, the interagency committee and R.A. 7291 or An Act Restoring the Tax and Duty
respective implementing agencies for the above programs shall Incentives Previously Enjoyed by the Veterans
submit corresponding program assessments to the COCCTRP. Federation of the Philippines under Republic Act
The National Expenditure Program from 2019 onwards shall Numbered Twenty-Six Hundred and Forty;
provide line items that correspond to the allocations mandated
in the provisions above. (f) Section 21, insofar as VAT exemption is concerned,
of R.A. 7306 or the Charter of the People’s Television
Network, Inc.;
29
(g) Section 14, insofar as VAT exemption is concerned, rating at the time of the effectivity of TRAIN shall not be
of R.A. 7354 or the Postal Service Act of 1992; affected;
(h) Section 9(c), insofar as VAT exemption is concerned, (w) Section 7(c), insofar as VAT exemption is
of R.A. 7355 or the Manlilikha ng Bayan Act; concerned, of R.A. 9045 or An Act Creating the
Batangas State University;
(i) Section 21, insofar as VAT exemption is concerned.
of RA 7366 or the Law Creating the National (x) Section 7(c), insofar as VAT exemption is concerned,
Commission for Culture and the Arts; of R.A. 9055 or An Act Converting the A1tlan State
College of Agriculture into the Aldan State University;
(j) Section 7(f), insofar as VAT exemption is concerned,
of R.A. 7371 or An Act Converting the Aklan Agricultural (y) Section 13, insofar as VAT exemption is concerned
College into Ak1an State College of Agriculture, and of R.A. 9083 or An Act Establishing the Sta. Rosa Science
Appropriating Funds Therefor; and Technology High School in Sta. Rosa Laguna;
(k) Section 12, second sentence, insofar as VAT (z) Section 7(c) and (f), insofar as VAT exemption is
exemption is concerned, of R.A. 7373 or An Act concerned, of RA 9138 or An Act Establishing the
Establishing the Eastern Visayas Science High School; Guimaras State College;
(l) Section 11(j), insofar as VAT exemption is concerned, (aa) Section 7(c), insofar as VAT exemption is
of R.A. 7605 or the Charter of the Philippine State concerned, of R.A. 9141 or An Act Converting the
College of Aeronautics; Negros Occidental Agricultural College into State
College to be known as the Negros Occidental
(m) Section 126, insofar as VAT exemption is Agricultural College;
concerned, of R.A. 7653 or The New Central Bank Act;
(bb) Section 16, insofar as VAT exemption is concerned,
(n) Section 14, insofar as VAT exemption is concerned, of R.A. 9497 or The Civil Aviation Authority Act of 2008;
of R.A. 7875 or the National Health Insurance Act of
1995; (cc) Section 25(b) and (c), insofar as VAT exemption is
concerned, and (d), insofar as VAT zero rating is
(o) Section 18, insofar as VAT exemption is concerned, concerned, of R.A. 9500 or the University of the
and Section 18, last paragraph of R.A. 7884 or the Philippines Charter of 2008;
National Dairy Development Act of 1995;
(dd) Section 25(b) and (c), insofar as VAT exemption is
(p) Section 8, insofar as VAT exemption is concerned, concerned, and (d) insofar as VAT zero-rating is
R.A. 8160 or An Act Granting the University of the concerned, of R.A. 9519 or An Act Converting
Philippines a Franchise to Construct, Install, Operate Mindanao Polytechnic State College into a State
and Maintain for Educational and Other Related University to be Known as the Mindanao University of
Purposes, Radio and Television Broadcasting Stations Science and Technology;
Within the University of the Philippines and in Such
Other Areas Within the Scope of its Operation; (ee) Section 17(c), insofar as VAT exemption is
concerned, of R.A. 3591, otherwise known as the PDIC
(q) Sections 2 and 16, insofar as VAT exemption is Charter, as amended by Section 8 of R.A. 9576,
concerned, of R.A. 8282 or The Social Security Act of otherwise known as An Act Increasing the Maximum
1997; Deposit Insurance Coverage, and in Connection
Therewith, to Strengthen the Regulatory and
(r) Section 39, insofar as VAT exemption is concerned, Administrative Authority, and Financial Capability of
of R.A. 8291 or The Government Service Insurance the Philippine Deposit Insurance Corporation (PDIC),
System Act of 1997; Amending for this Purpose Republic Act Numbered
Three Thousand Five Hundred Ninety-One, as
Amended, Otherwise Known as the PDIC Charter, and
(s) Section 4(c) and (f), insofar as VAT exemption is
for Other Purposes;
concerned, of R.A. 8292 or the Higher Education
Modernization Act of 1997;
(ff) Sections 2 and 19, insofar as VAT exemption is
concerned, of R.A. 9679 or An Act Further
(t) Section 25, insofar as VAT exemption is concerned,
Strengthening the Home Development Mutual Fund,
of R.A. 8492 or the National Museum Act of 1998;
and for Other Purposes;
(u) Section 3(h), insofar as VAT exemption is concerned,
(gg) Section 23, insofar as VAT exemption is concerned
of R.A. 8502 or the Jewelry Industry Development Act
of the National Historical Commission of the
of 1998;
Philippines, of R.A. 10086, or the Strengthening
Peoples’ Nationalism Through Philippine History Act;
(v) Article 65, insofar as VAT exemption and zero rating
is concerned, of regional or area headquarters and
(hh) Section 7(b) and (c), insofar as VAT exemption is
zero-rating of the sale or lease of goods and property
concerned, and (d), insofar as VAT zero-rating is
and the rendition of services to regional or area
concerned, of R.A. 9647 or the Philippine Normal
headquarters, and Article 67, insofar as VAT exemption
University Modernization Act of 2009;
is concerned, of R.A. 8756; Provided, That existing
RHQs and ROHQs enjoying VAT exemption and zero-
30
(ii) Section 17, insofar as VAT exemption is concerned, of R.A. 2067, as amended, or the Science Act of 1958;
of R.A. 7898, as amended by R.A. 10349, Establishing and
the Revised AFP Modernization Program and for Other
Purposes; (bbb) Section 9, with respect to VAT, of R.A. 9511 or the
National Grid Corporation of the Philippines Act.
(jj) Section 56, insofar as VAT exemption is concerned,
of R.A. 10801 or the Overseas Workers Welfare Provided, That the VAT obligations of government owned and-
Administration Act; controlled corporations, state universities and colleges, and
other government instrumentalities whose VAT exemption has
(kk) Section 9(e)(2) and (j), with respect to VAT, of R.A. been repealed under this Act shall be chargeable to the Tax
7900 or the High-Value Crops Development Act of Expenditure Fund (TEF) provided for in the annual General
1995; Appropriations Act: Provided, further, That VAT exemption, VAT
zero-rating, and VAT credit granted to state universities and
(ll) Section 24(e) of R.A. 10068 or the Organic colleges on their purchases and importations are hereby
Agriculture Act of 2010; repealed and the transactions affected herein are made subject
to the VAT provisions of Title IV of the NIRC, as amended.
(mm) Section 14(b), with respect to VAT, R.A. 7308 or
the Seed Industry Development Act of 1992; Provided, That, with respect to income tax, the following laws or
provisions of laws are hereby repealed or amended:
(nn) Section 35 (b)(c), with respect to VAT, of R.A. 8550
or The Philippine Fisheries Code of 1998; (a) Section 33(A) of R.A. 7277, as amended by R.A.
10754 or the Magna Carta for Persons with Disability;
(oo) Section 13, second paragraph, with respect to VAT,
of R.A. 10817 or the Philippine Halal Export (b) Section 22(B) of R.A. 10165 or the Foster Care Act of
Development and Promotion Act of 2016; 2012;
(pp) Section 9(3), (4), and (8), with respect to VAT, of (c) Section 4 of R.A. 1169 or An Act Providing for Charity
R.A. 8479 or the Downstream Oil Industry Deregulation Sweepstakes, Horse Races and Lotteries:
Act of 1998;
"Sec. 4. Holding of sweepstakes.— The Office shall bold
(qq) Section 6(c) and (d), with respect to VAT, of R.A. charity horse race sweepstakes under such regulations
7103 or the Iron and Steel Industry Act; as shall be promulgated by the Board in accordance
with Republic Act Numbered Three hundred and
(rr) Section 10, with respect to VAT, of R.A. 7718 or An nine: Provided, however, That when the holding of a
Act Amending R.A. No. 6957; sweepstakes race to determine prizes is impossible due
to war, public calamity, or other unforeseen or
fortuitous event or when there is no sufficient number
(ss) Section 26(B)(3), with respect to VAT, of R.A. 9275
of horses to determine the major prizes, the Board of
or the Philippine Clean Water Act of 2004;
Directors may determine the procedure to be followed
in the distribution of prizes in the most just, equitable
(tt) Section 20(d)(3) of R.A. 7279 or the Urban
and expeditious manner. The horse races and the sale
Development and Housing Act of 1992;
of tickets in the said sweepstakes shall be exempt from
all taxes, except that each ticket shall bear a twelve-
(uu) Section 20(d)(3) of R.A. 10884 or An Act centavo internal revenue stamp. The tickets shall be
Strengthening the Balanced Housing Development printed by the Government and shall be considered
Program, Amending for the Purpose RA 7279, as government securities for the purposes of penalizing
Amended, Otherwise Known as the Urban forgery or alteration."
Development and Housing Act of 1992;
(d) Section 5 of R.A. 8756 or An Act Providing for the
(vv) Section 14, with respect to VAT, of R.A. 8423 or the Terms, Conditions and Licensing Requirements of
Traditional and Alternative Medicine Act (TAMA) of Regional or Area Headquarters, Regional Operating
1997; Headquarters, and Regional Warehouses of
Multinational Companies, An;tending for the Purpose
(ww) Section 22(b) of R.A. 10747 or the Rare Diseases Certain Provisions of Executive Order No. 226 or The
of the Philippines; Omnibus Investments Code of 1987: Provided, That
existing Regional or Area Headquarters, Regional
(xx) Section 45(a), (b), and (c), with respect to VAT, of Operating Headquarters, and Regional Warehouses of
R.A. 9003 or the Ecological Solid Waste Management Multinational Companies enjoying the preferential
Act of 2000; income tax rate at the time of the effectivity of the
TRAIN shall not be affected;
(yy) Section 5(b), with respect to VAT, of R.A. 10771 or
the Philippine Green Jobs Act of 2016; (e) Section 2 of P.D. 1354, s. 1978 or Imposing Final
Income Tax on Subcontractors and Alien Employees of
(zz) Section 6, with respect to VAT, of R.A. 7459 or the Service Contractors and Subcontractors Engaged in
Investors and Inventions Incentives Act of the Petroleum Operations in the Philippines under
Philippines; Presidential Decree No. 87: Provided, That service
contractors and subcontractors enjoying the
(aaa) Section 24, insofar as VAT exemption of preferential income tax rate at the time of the
foundations for scientific advancements is concerned, effectivity of the TRAIN shall not be affected; and
31
(f) Section 7 of P.D. 1034, s. 1976, or Authorizing the

Establishment of an Offshore Banking System in the
Philippines: Provided, That service contractors and
subcontractors enjoying the preferential income tax
rate at the time of the effectivity of the TRAIN shall not
be affected.
Section 87. Effectivity. - This Act shall take effect on January 1,

2018 following its complete publication in the Official Gazette or
in at least one (1) newspaper of general circulation.
32

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TRAIN LAW (January 1 2018)

REPUBLIC ACT No. 10963 members: Provided, That the Cooperative

"(A) x x x "(E) Authority of the Commissioner to

"Sec. 32. Gross Income - "x x x."

"(i) Benefits received by officials and "(a) In General - x x x

"(C) x x - " "(2) x x x; and

Section 18. Section 58 of the NIRC, as amended, is hereby further "(3) x x x.

"These deductions shall be allowed only where a

"(A) Time of Payment - x x x

"x x x "(A) In the Case of Gifts Made by a Resident -

institution or Tourism Infrastructure and

"(A) x x x Section 38. Section 116 of the NIRC, as amended, is hereby

"(A) x x x "Duly registered cigarettes packed by hand

"(C) Cigarettes Packed by Machine. — There

"For purposes of this Title, excise taxes herein imposed and

"Sec. 145. Cigars and Cigarettes -

"(f) Unleaded premium gasoline, per liter of

"(g) Aviation turbo jet fuel, aviation gas, per

"(d) On denatured alcohol to be used for the production of petrochemical products,

"(b) Sweetened tea; "(4) Meal Replacement and Medically

"(g) Cereal and grain beverages; and

"(h) Other non-alcoholic beverages

"Sec. 171. Authority of Internal Revenue Officer in Searching for

Section 80. A new section designated as Section 265-A under

"(3) x x x; or "(2) For the second offense, a fine of Five

"x x x "(i) Unconditional cash transfer to households in the

(f) Section 7 of P.D. 1034, s. 1976, or Authorizing the

Section 87. Effectivity. - This Act shall take effect on January 1,

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