ESS oS Neti oe A ul ei (SRR ESD GMA

Ai
MMR

H. No. 5636
S. No. 1592

Republic of the Philippines

Congress of the Philippines
Metro Manila
Seventeenth Congress
Second Regular Session

Begun and held in Metro Manila, on Monday, twenty-fourth

day of July, two thousand seventeen.

[ REPUBLIC ACT No. 10963]

AN ACT AMENDING SECTIONS 5, 6, 24, 25, 27, 31, 32, 33, 34,
51, 52, 56, 57, 58, 74, 79, 84, 86, 90, 91, 97, 99, 100, 101,
106, 107, 108, 109, 110, 112, 114, 116, 127, 128, 129, 145,
148, 149, 151, 155, 171, 174, 175, 177, 178, 179, 180, 181,
182, 183, 186, 188, 189, 190, 191, 192, 193, 194, 195, 196,
197, 232, 236, 237, 249, 254, 264, 269, AND 288; CREATING
NEW SECTIONS 51-A, 148-A, 150-A, 150-B, 237-A,
264-A, 264-B, AND 265-A; AND REPEALING SECTIONS
35, 62, AND 89; ALL UNDER REPUBLIC ACT NO. 8424,
OTHERWISE KNOWN AS THE NATIONAL INTERNAL
REVENUE CODE OF 1997, AS AMENDED, AND FOR
OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the

Philippines in Congress assembled:
 ea PERE wd
3
SECTION 1. Title. — This Act shall be known as the “Tax
Reform for Acceleration and Inclusion (TRAIN)”. addresses, and financial statements of corporations
,
mutual fund companies, insurance
SEC. 2. Declaration of Policy. — Itis hereby declared the companies,
regional operating headquarters of multinational
policy of the State: :
companies, joint accounts, associations, joint
ventures
(a) Toenhance the progressivity of the tax system through or consortia and registered partnerships, and their
the rationalization of the Philippine internal revenue tax system, members: Provided, That the

ays
Cooperative
thereby promoting sustainable and inclusive economic growth; Development Authority shall submit to the Burea
ua
tax incentive report, which shall include inform
ation
(b) To provide, as much as possible, an equitable relief to a on the income tax, value-added tax, and
other tax
greater number of taxpayers and their families in order to improve incentives availed of by cooperatives registered
levels of disposable income and increase economic activity; and and
enjoying incentives under Republic Act No. 6938,
as
amended: Provided, further, That the informatio
(c) Toensure that the governmentis able to provide for the n
needs of those under its jurisdiction and care through the provision. submitted by the Cooperative Development Author
ity
to the Bureau shall be submitted to the Department
of better infrastructure, health, education, jobs, and social
of Finance and shall be included in the databa
protection for the people. se
created under Republic Act No. 10708, otherwise
SEC. 3. Section 5 of the National Internal Revenue Code of known as ‘The Tax Incentives Management
A and
1997 (NIRC), as amended, is hereby further amended to read as x: Transparency Act (TIMTAY.
follows: 2
»
¥ “Xxx.”
“SEC. 5. Power of the Commissioner to Obtain

BES
Information, and to Summon, SEC. 4. Section 6 of the NIRC, as amended, is hereby
Examine, and Take
further amended to read as follows:

ceaieei: RASS hel x.

Testimony of Persons. — In ascertaining the
correctness of any return, or in making a return when
none has been made, or in determining the liability “SEC. 6. Power of the Commissioner to
Seen * Make Assessments and Prescribe Additional
of any person for any internal revenue tax, or in
collecting any such liability, or in evaluating tax Requirements for Tax Administration and
Enforcement. —
compliance, the Commissioner is authorized:

“A) Examination of Returns and

EGIL

“A) xxx
Determination of Tax Due. — After a return has
been filed as required under the provisions of this
“@) To obtain on a regular basis from any
ylaua3t a2

Code, the Commissioner or his duly authorized

person other than the person whose internal representative may authorize the examination ofany
revenue tax liability is subject to audit or
taxpayer and the assessment of the correct amount
eh

investigation, or from any office or officer of the of tax, notwithstanding any law requiring the prior
national and local governments, government agencies
RE GAY

authorization of any government agency

and instrumentalities, including the Bangko Sentral or
instrumentality: Provided, however, That failure
ng Pilipinas and government-owned or -controlled to
8% SES AY ERS

file a return shall not prevent the Commissioner from

corporations, any information such as, but not limited authorizing the examination of any taxpayer.
to, costs and volume of production, receipts or sales
and gross incomes of taxpayers, and the names, «“.
Q

XXX
SRA
 Sy
«,
XXX SEC. 5. Section 24 of the NIRC, as amend
ed, is hereby
further amended to read as follows:
“B) xxx

gh aS
“SEC. 24. Income Tax Rates. —
“C) xxx
“@) Rates of Income Tax on Individual Citizen

emt
“O) xxx and Individual Resident Alien of the Philippines.
—

“@) Authority of the Commissioner to “Q) Anincome tax is hereby imposed:

Prescribe Real Property Values. — The Commissioner
is hereby authorized to divide the Philippines into “(@) On the taxable income defined in Section

ARONS
different zones or areas and shall, upon mandatory 31 of this Code, other than income subject to
consultation with competent appraisers both from the tax

PR
under Subsections (B), (C), and (D) of this
private and public sectors, and with prior notice to Section,
derived for each taxable year from all sources
affected taxpayers, determine the fair market value within
and without the Philippines by every indivi
of real properties located in each zone or area, subject dual
citizen of the Philippines residing therein;
to automatic adjustment once every three (3) years

ih
through rules and regulations issued by the Secretary
“®) On the taxable income defined in Section

he i ape
of Finance based on the current Philippine valuation 31 of this Code, other than income subject
standards: Provided, That no adjustment in zonal to tax
under Subsections (B), (C), and (D) of this Section
valuation shall be valid unless published in a ,
derived for each taxable year from all sources
within

peter saaiat tN
newspaper of general circulation in the province, city the Philippines by an individual citizen
or municipality concerned, or in the absence thereof, of the
Philippines who is residing outside of the Philipp
shall be posted in the provincial capitol, city or ines
including overseas contract workers referred to
municipal hall and in two (2) other conspicuous public in
Subsection (C) of Section 23 hereof; and
places therein: Provided, further, That the basis of
any valuation, including the records of consultations
“© On the taxable income defined in Section.
done, shall be public records open to the inquiry of
31 of this Code, other than income subject
any taxpayer. For purposes of computing any internal to tax
under Subsections (B), (C), and (D) of this Sectio
revenue tax, the value of the property shall be, n,
derived for each taxable year from all sources
whichever is the higher of: within
the Philippines by an individual alien who
is a
resident of the Philippines.
“© the fair market value as determined by the
Commissioner; or
en

“@) Rates of Tax on Taxable Income of

Individuals. — The tax shall be computed
in
inate car

“() the fair market value as shown in the

‘SA aR Leh

accordance with and at the rates established

schedule of values of the Provincial and City in the
following schedule:
Assessors.”
 “(a) Tax Schedule Effective J anuary 1, 2018
until December 31, 2022: pay received by such minimum wage earners shall
likewise be exempt from income tax.
“Not over P250,000 ..........sescsesssseeceser
ssssessene O%
“Over P250,000 but not over P400,000 .........
20% of the excess “(b) Rate of Tax on: Income of Purely
over P250,000 Self-employed Individuals and/or Professionals
“Over P400,000 but not over P800,000 .......... P80,000 Whose Gross Sales or Gross Receipts and Other
+ 25% of the
excess over P400,000 Non-operating Income Does Not Exceed
“Over P800,000 but not over P2,000,000 ....... the
P130,000 + 80% of the Value-added Tax (VAT) Threshold as Provided
in
excess over P800,000 Section 109(BB). — Self-employed individuals
“Over P2,000,000 but not over P8,000,000...,.
_P490,000 + 32% of the and/or professionals shall have the option to avail of
excess over P2,000,000
an eight percent (8%) tax on gross sales or gross
“Over P8,000,000 ........:.ccsesecsee sos sovsseese sess P2,410,000 + 35% of the receipts and other non-operating income in excess
excess over P8,000,000 of
Two hundred fifty thousand pesos (P250,000) in lieu

eee
“Tax Schedule Effective J anuary 1, 2023 and of the graduated income tax rates under Subsection
onwards:

er
“Not over P250,000 .........csesssssecssces
cos sassesee
(A)(2)(a) of this Section and the percentage tax under
0%
Section 116 of this Code.
“Over P250,000 but not over P400,000 ......... 15% of the excess
over P250,000
“Over P400,000 but not over P800,000 ..........
P22,500 + 20% of the “© Rate of Tax for Mixed Income Earners.
excess over P400,000 — Taxpayers earning both compensation income
and
“Over P800,000 but not over P2,000,000 ....... P102,500
+ 25% of the
income from business or practice of profession shall
excess over P800,000 be subject to the following taxes:
“Over P2,000,000 but not over P8,000,000..... P402,500 + 80% of the
excess over P2,000,000 “Q) All Income from Compensation
“Over P8,000,000 .........seecceseeeee sitters
— The
P2,202,500+ 35% of the rates prescribed under Subsection (A)(2)(a)
of this
excess over P8,000,000 Section.
BAAN
“For married individuals, the husband and
Ie SANAOEEE

wife, subject to the provision of Section 51(D) hereof, “@) All Income from Business or Practice of
shall compute separately their individual income Profession — :
tax
based on their respective total taxable income
:
Provided, That if any income cannot be definitely “(a) IfTotal Gross Sales and/or Gross Receipts
attributed to or identified as income exclusively and Other Non-operating Income Do Not Exceed the
earned or realized by either of the spouses, the VAT Threshold as Provided in Section 109(BB)
same of this
shall be divided equally between the spouses for Code. — The rates prescribed under Subsection
the
purpose of determining their respective taxable (A)(2)(a) of this Section on taxable income, or eight
income. percent (8%) income tax based on gross sales or
; gross
receipts and other non-operating income in lieu of
“Provided, That minimum wage earners as
the graduated income tax rates under Subsection
defined in Section 22(HH) of this Code shall be exempt (A)(2)(a) of this Section and the percentage tax
under
from the payment of income tax on their taxabl Section 116 of this Code.
e
income: Provided, further, That the holida
y pay,
overtime pay, night shift differential pay, and
hazard
 9

“(b) IfTotal Gross Sales and/or Gross Receipts the long-term deposit or investment certificate
and Other Non-operating Income Exceeds the based
on the remaining maturity thereof:
VAT Threshold as Provided in Section 109(BB) of this
Code. — The rates prescribed under Subsection «, ”
(A)(2)(a) of this Section. xXxXxX.

“B) Rate of Tax on Certain Passive “(2) Cash and/or Property Dividends.
— A
Income: — final tax at the rate of ten percent (10%) shall
be
imposed upon the cash and/or property divide
nds
actually or constructively received by an indivi
“) Interests, Royalties, Prizes, and Other dual
from a domestic corporation or from a joint
Winnings. — A final tax at the rate of twenty percent stock
company, insurance or mutual fund companies
(20%) is hereby imposed upon the amount of interest and
regional operating headquarters of multin
from any currency bank deposit and yield or any other ational
companies, or on the share of an individual
monetary benefit from deposit substitutes and from in the
distributable net income after tax of a partne
trust funds and similar arrangements; royalties, rship
(except a general professional partnership) of
except on books, as well as other literary works and which
he is a partner, or on the share of an indivi
musical compositions, which shall be imposed a final dual in
the net income after tax of an association, a
tax of ten percent (10%); prizes (except prizes joint
account, or a joint venture or consortium
amounting to Ten thousand pesos (P10,000) or less taxable as
a corporation of which he is a member or co-venturer.
which shall be subject to tax under Subsection (A) of
Section 24; and other winnings (except winnings
amounting to Ten thousand pesos (P10,000) or less “(©) Capital Gains from Sale of Shares of Stock
not Traded in the Stock Exchange. — The provis
from Philippine Charity Sweepstakes and Lotto which ions
of Section 39(B) notwithstanding, a final tax at
shall be exempt), derived from sources within the the
rate of fifteen percent (15%) is hereby impose
Philippines: Provided, however, That interest income d upon
the net capital gains realized during the taxable
received by an individual taxpayer (except a year
from the sale, barter, exchange or other dispos
nonresident individual) from a depository bank under ition
of shares of stock in a domestic corporation, except
the expanded foreign currency deposit system shall
shares sold, or disposed of through the
be subject to a final income tax at the rate of fifteen stock
exchange.
percent (15%) of such interest income: Provided,
further, That interest income from long-term deposit «, »
XXX.
or investment in the form of savings, common or
individual trust funds, deposit substitutes, investment SEC. 6. Section 25 of the NIRC, as amended, is hereby
management accounts and other investments further amended to read as follows:
evidenced by certificates in such form prescribed by
the Bangko Sentral ng Pilipinas (BSP) shall be exempt “SEC. 25. Tax on Nonresident Alien
from the tax imposed under this Subsection: Individual.-
Provided, finally, That should the holder of the
certificate pre-terminate the deposit or investment ; “(A) Nonresident Alien Engaged in Trade or
before the fifth (5) year, a final tax shall be imposed Business Within the Philippines. —
on the entire income and shall be deducted and «
withheld by the depository bank from the proceeds of XxKK
 10
11

“B) Nonresident Alien Individual Not

Engaged in Trade or Business Within the “&) Alien Individual Employed by Petroleum
Philippines. — Service Contractor and Subcontractor. — An alien
individual who is a permanent resident of a foreign
«,
XXX country but who is employed and assigned in the
Philippines by a foreign service contractor or by a
foreign service subcontractor engaged in petroleum
“(C) Alien Individual Employed by Regional or
operations in the Philippines shall be liable to a tax
Area Headquarters and Regional Operating
Headquarters of Multinational Companies. — There of fifteen percent (15%) of the salaries, wages,
shall be levied, collected and paid for each taxable annuities, compensation, remuneration and other
year upon the gross income received by every alien emoluments, such as honoraria and allowances,
individual employed by regional or area headquarters received from such contractor or subcontractor:
and regional operating headquarters established in Provided, however, That the same tax treatment shall
the Philippines by multinational companies as apply to a Filipino employed and occupying the same
salaries, wages, annuities, compensation,
position as an alien employed by petroleum service
remuneration and other emoluments, such as contractor and subcontractor.
honoraria and allowances, from such regional or area
headquarters and regional operating headquarters, “Any income earned from all other sources
a tax equal to fifteen percent (15%) of such gross within the Philippines by the alien employees referred
income: Provided, however, That the same tax to under Subsections (C), (D), and (E) hereof shall be
treatment shall apply to Filipinos employed and subject to the pertinent income tax, as the case may
occupying the same position as those of aliens be, imposed under this Code.
employed by these multinational companies. For
purposes of this Chapter, the term ‘multinational “@) The preferential tax treatment provided in
company’ means a foreign firm or entity engaged in Subsections (C), (D), and (E) of this Section shall not
international trade with affiliates or subsidiaries or be applicable to regional headquarters (RHQs),
branch offices in the Asia-Pacific Region and other regional operating headquarters (ROHQs), offshore
foreign markets. banking units (OBUs) or petroleum service contractors
and subcontractors registering with the Securities
“() Alien Individual Employed by Offshore and Exchange Commission (SEC) after
Banking Units. — There shall be levied, collected January 1, 2018: Provided, however, That existing
and paid for each taxable year upon the gross RHQs/ROHQs, OBUs or petroleum service
income received by every alien individual employed contractors and subcontractors presently availing of
by offshore banking units established in the preferential tax rates for qualified employees shall
Philippines as salaries, wages, annuities, continue to be entitled to avail of the preferential tax
compensation, remuneration and other emoluments, rate for present and future qualified employees.”
such as honoraria and allowances, from such offshore
banking units, a tax equal to fifteen percent (15%) of SEC. 7. Section 27 of the NIRC, as amended, is hereby
such gross income: Provided, however, That the same further amended to read as follows:
tax treatment shall apply to Filipinos employed and
occupying the same position as those of aliens “SEC. 27. Rates of Income Tax on Domestic
employed by these offshore banking units. Corporations. —
 12 13

“(A) In General. -x xx of stock in a domestic corporation excep

t shares sold
or disposed of through the stock exch
ange,
«,
XXX
«. ”
XXX.

“(C) Government-owned or -Controlled

Corporations, Agencies or Instrumentalities. — The SEC. 8. Section 31 of the NIRC, as amended, is h
further amended to read as follows:
provisions of existing special or general laws to the ofp ee
contrary notwithstanding, all corporations, agencies,
or instrumentalities owned or controlled by the _SEe. 31. Taxable Income Defined. — The
Government, except the Government Service term taxable income’ means the perti
nent items of
Insurance System (GSIS), the Social Security System gross Income specified in this Code, less
deductions,
(SSS), the Philippine Health Insurance Corporation if any, authorized for such types
of income by this
(PHIC), and the local water districts shall pay such Code or other special laws.”
rate of tax upon their taxable income as are imposed
by this Section upon corporations or associations SEC. 9. Section 32 of the NIRC, as amended,
further amended to read as follows: is hereb:
engaged in a similar business, industry, or activity.
_-

“(D) Rates of Tax on Certain Passive “SEC. 32. Gross Income. —

Incomes. —
“(A) General Definition. — x x x
“(1) Interest from Deposits and Yield or any
other Monetary Benefit from Deposit Substitutes and «, (B) Exclusions
.
from Gross Income. — xxx
from Trust Funds and Similar Arrangements, and
Royalties. — A final tax at the rate of twenty percent o “1) xxx
(20%) is hereby imposed upon the amount of interest
on currency bank deposit and yield or any other
monetary benefit from deposit substitutes and from “(7) Miscellaneous Items. —
trust funds and similar arrangements received by
domestic corporations, and royalties, derived from “@) xxx
sources within the Philippines: Provided, however,
Thatinterest income derived by a domestic corporation “(e) 13 Month Pay and Other Benefits.
-
from a depository bank under the expanded foreign Gross benefits received by officials and emplo
yees of
currency deposit system shall be subject to a final public and private entities: Provided,
however, That
income tax at the rate of fifteen percent (15%) of su the total exclusion under this subparagraph
shall not
interest income. “ exceed Ninety thousand pesos (P90,000)
which shall
cover:
“2) Capital Gains from the Sale of Shares of
Stock Not Traded in the Stock Exchange. — A final “@ Benefits received by officials and emplo
yees
tax at the rate of fifteen percent (15%) shall be imposed of the national and local government
pursuant to
on net capital gains realized during the taxable year Republic Act No. 6686;
from the sale, exchange or other disposition of shares
 14
15

“@) Benefits received by employees pursuant

value of the fringe benefit by the diffe
to Presidential Decree No. 851, as amended by rence between
one hundred percent (100%) and
Memorandum Order No. 28, dated August 13, 1986; the applicable rates
of income tax under Subsections (B),
(C), (D), and (E)
of Section 25.
“Gi) Benefits received by officials and
employees not covered by Presidential Decree No. 851, «, ”
XXX.
as amended by Memorandum Order No. 28, dated
August 13, 1986; and
SEC. 11. Section 34 of the NIRC, as
amended, is hereby
further amended to read as follows:
“Gv) Other benefits such as productivity
incentives and Christmas bonus.” .
“SEC. 34. Deductions from Gross Incom
e. —
Except for taxpayers earning compensa
SEC. 10. Section 33 of the NIRC, as amended, is hereby tion income
arising from personal services rendered
further amended to read as follows: under an
employer-employee relationship where
no deductions
shall be allowed under this Section,
“SEC. 33. Special
in computing
Treatment of Fringe taxable income subject to income
tax under Sections
Benefit. — 24(A); 25(A); 26; 27(A), (B), and (C); and
28(A)(1), there
shall be allowed the following deductions
from gross
“A) Imposition of Tax. — Effective income:
January 1, 2018 and onwards, a final tax of
thirty-five percent (35%) is hereby imposed on the
“(A) Expenses. —
grossed-up monetary value of fringe benefit furnished
or granted to the employee (except rank and file
“@) Ordinary and Necessary Trade, Busin
employees as defined herein) by the employer, whether or Professional Expenses, —
ess
an individual or a corporation (unless the fringe
benefit is required by the nature of, or necessary to
the trade, business or profession of the employer, or “(a) In General. — xxx
when the fringe benefit is for the convenience or
«,
advantage of the employer). The tax herein imposed XXX
is payable by the employer which tax shall be paid in
the same manner as provided for under Section 57(A) “) Optional Standard Deduction (OSD)
. —
of this Code. The grossed-up monetary value of the In lieu of the deductions allowed under
the preceding
fringe benefit shall be determined by dividing the Subsections, an individual subject
to tax under
actual monetary value of the fringe benefit by sixty- Section 24, other than a nonresident alien,
may elect
five percent (65%) effective January 1, 2018 and astandard deduction in an amount not
exceeding forty
onwards: Provided, however, That fringe benefit percent (40%) of his gross sales or
gross receipts, as
- furnished to employees and taxable under Subsections the case may be. In the case of a corpo
ration subject
(B), (C), (D), and &) of Section 25 shall be taxed at to tax under Sections 27(A) and 28(A)
(1), it may elect
the applicable rates imposed thereat: Provided, astandard deduction in an amount not
exceeding forty
further, That the grossed-up value of the fringe benefit percent (40%) of its gross income as defin
ed in Section
shall be determined by dividing the actual monetary 32 of this Code. Unless the taxpayer signi
fies in his
return his intention to elect the optional
standard
 16 17

deduction, he shall be considered as having availed “@) The following individuals shall not be
himself of the deductions allowed in the preceding required to file an income tax return:
Subsections. Such election when made in the return
shall be irrevocable for the taxable year for which “@) An individual whose taxable income does
the return is made: Provided, That an individual not exceed Two hundred fifty thousand pesos
who is entitled to and claimed for the optional standard (P250,000) under Section 24(A)(2)(a): Provided, That
deduction shall not be required to submit with his a citizen of the Philippines and any alien individual
tax return such financial statements otherwise engaged in business or practice of profession within
required under this Code: Provided, further, That a the Philippines shall file an income tax return,
general professional partnership and the partners regardless of the amount of gross income:
comprising such partnership may avail of the optional
standard deduction only once, either by the general «
xXx
professional partnership or the partners comprising
the partnership: Provided, finally, That except when
the Commissioner otherwise permits, the said “(5) The income tax return (ITR) shall consist
individual shall keep such records pertaining to his of a maximum of four (4) pages in paper form or
gross sales or gross receipts, or the said corporation electronic form, and shall only contain the following
shall keep such records pertaining to his gross income information:
as defined in Section 32 of this Code during the taxable
year, as may be required by the rules and regulations “(A) Personal profile and information;
promulgated by the Secretary of Finance, upon
recommendation of the Commissioner. “@) Total gross sales, receipts or income from
compensation for services rendered, conduct of trade
“Notwithstanding the provisions of the or business or the exercise of a profession, except
preceding Subsections, x x x.” income subject to final tax as provided under this
Code;
SEC. 12. Section 35 of the NIRC, as amended, is hereby
repealed. “(C) Allowable deductions under this Code;

SEC. 13. Section 51 of the NIRC, as amended, is hereby “(D) Taxable income as defined in Section 31 of
further amended to read as follows: this Code; and

“(E) Income tax due and payable.

“SEC. 51. Individual Returns. —
“ec. ”
XXX.
“(A) xxx
SEC. 14. A new section designated as Section 51-A of the
NIRC, as amended, is hereby inserted to read as follows:
“Q) xxx
“SEC. 51-A. Substituted Filing of Income Tax
«
xxx
Returns by Employees Receiving Purely
Compensation Income. — Individual taxpayers
receiving purely compensation income, regardless of
amount, from only one employer in the Philippines
 18
19
for the calendar year, the income tax of which has tps . i
been withheld correctly by the said employer (tax due sil ae ae a it Lest ge provisions shall
equals tax withheld) shall not be required to file an No. 10708 or TIMTA 1on of Republic Act
annual income tax return. The certificate of , ;
withholding filed by the respective employers, duly « »
stamped ‘received’ by the BIR, shall be tantamount EE
to the substituted filing of income tax returns by said
employees.” SEC. 16. Section 56 of the NIRC
, as amended, is hereby
further amended to read as follows:
SEC. 15. Section 52 of the NIRC, as amended, is hereby
7 “SEC. 56, Payment and Assessme
further amended to read as follows: nt of Income
Tax for Individuais and Corporat
ions, —
“SEC. 52. Corporation Returns. —
“A) Payment of Tax. —

“(A) Requirements. — Every corporation

“Q) xxx
subject to the tax herein imposed, except foreign
corporations not engaged in trade or business in the
Philippines, shall render, in duplicate, a true and “(2) Installment of Payment. —
When a tax
due is in excess of Two thousand pesos
accurate quarterly income tax return and final or (P2,000), the
taxpayer other than a corporation,
adjustment return in accordance with the provisions may elect to pay
the tax in two (2) equal installments
of Chapter XII of this Title. The income tax return , in which case
the first installment shall be paid
shall consist of a maximum of four (4) pages in paper at the time the
return is filed and the second installm
form or electronic form, be filed by the president, vice- ent on or before
October 15 following the close of the cale
president or other principal officer, shall be sworn to ndar year, if
any installment is not paid on or befor
by such officer and by the treasurer or assistant e the date fixed
for its payment, the whole amount
treasurer, and shall only contain the following of the tax unpaid
becomes due and payable toge
information: ther with the
delinquency penalties.”

“(1) Corporate profile and information; SEC. 17. Section 57 of the NIRC, as amended, is h
further amended to read as follows:
ee
“(2) Gross sales, receipts or income from
services rendered, or conduct of trade or business, “SEC. 57. Withholding of Tax at Source. —
except income subject to final tax as provided under
this Code; “A) xxx

“(8) Allowable deductions under this Code; “®) Withholding of Creditable Tax
at Source.
— The Secretary of Finance may,
upon the
“(4) Taxable income as defined in Section 31 recommendation of the Commissioner
, require the
of this Code; and withholding of a tax on the items
of income payable
to natural or juridical persons,
residing in the
“() Income tax due and payable. Philippines, by payor-corporatio
n/persons as
provided for by law, at the rate
of not less than
 20
21

one percent (1%) but not more than thirty-two percent

taxable year on or before May 15 of the
(32%) thereof, which shall be credited against the same taxable
year. xxx
income tax liability of the taxpayer for the taxable
year: Provided, That, beginning January 1, 2019,
the rate of withholding shall not be less than one “B) Return and Payment of Estimate
d Inco
me
percent (1%) but not more than fifteen percent (15%) Tax by Individuals. — The amou
nt of estimated
of the income payment. income as defined in Subsection (C)
with respect to
which a declaration is required unde
r Subsection (A)
shall be paid in four (4) installm
“C) xxx.” ents. The first
installment shall be paid at the time
of declaration
and the second and third shall he paid
SEC. 18. Section 58 of the NIRC, as amended, is hereby on August 15
and November 15 of the current year,
further amended to read as follows: respectively.
The fourth installment shall be paid on
or before May
15 of the following calendar year
“SEC. 58. Return and Payment of Taxes when the final
Withheld at Source. — adjusted income tax return is due
to be filed.

“(A) Xxx “(C) xxx.”

«, SEC. 21. Section 79 of the NIRC, as amended,

XXX
further amended to read as follows: is hi
ety
“The return for final and creditable withholding
taxes shall be filed and the payment made not later “SEC. 79. Income Tax Collected at Sourc
e. —
than the last day of the month following the close of
«,
the quarter during which withholding was made.” XXX

Sec. 19. Section 62 of the NIRC, as amended, is hereby “©) Refunds or Credits, —
repealed.

SEC. 20. Section 74 of the NIRC, as amended, is hereby “Q) Employer. — xxx
further amended to read as follows:
“(2) Employees. ~ xxx
“SEC. 74. Declaration of Income Tax for
Individuals. — “«.
XXX

“(A) In General. — Except as otherwise “O) Withholding on Basis of Average

provided in this Section, every individual subject to Wages. — xxx
income tax under Sections 24 and 25(A) of this Title,
who is receiving self-employment income, whether it “Q) xxx
constitutes the sole source of his income or in
combination with salaries, wages and other fixed or
determinable income, shall make and file a “2) xxx:and
declaration of his estimated income for the current
“(8) xxx.
 22
23

“) Nonresident Aliens. —- xx x
decedent's interest therein is included in the
value of
the gross estate.
“) Year-end Adjustment. — x x x.”

“(4) For unpaid mortgages upon, or any

SEC. 22. Section 84 of the NIRC, as amended, is hereby indebtedness in respect to, property where the
further amended to read as follows: value
of decedent's interest therein, undiminished
by such
mortgage or indebtedness, is included in
the value of
“SEC. 84. Rate of Estate Tax. ~ There shall the gross estate, but not including any
income tax
be levied, assessed, collected and paid upon the upon income received after the death of the
decedent,
transfer of the net estate as determined in accordance or property taxes not accrued before his
death, or any
with Sections 85 and 86 of every decedent, whether estate tax. The deduction herein allowed in
the case
resident or nonresident of the Philippines, a tax at of claims against the estate, unpaid mortgages
or any
the rate of six percent (6%) based on the value of such indebtedness shall, when founded upon a promis
net estate.”
e or
agreement, be limited to the extent that they
were
contracted bona fide and for an adequate
and full
SEC. 23. Section 86 of the NIRC, as amended, is hereby consideration in money or money's worth.
There shall
further amended to read as follows: also be deducted losses incurred during the settle
ment
of the estate arising from fires, storms,
shipwreck,
“SEC. 86. Computation of Net Estate. — For or other casualties, or from robber
y, theft or
the purpose of the tax imposed in this Chapter, the embezzlement, when such losses are not
compensated
value of the net estate shall be determined: for by insurance or otherwise, and if at the time
of
the filing of the return such losses have not
been
claimed as a deduction for the income tax
“(A) Deductions Allowed to the Estate of a purposes
in an income tax return, and provided
Citizen or a Resident. — In the case of a citizen or that such
losses were incurred not later than the last day
resident of the Philippines, by deducting from the for
the payment of the estate tax as prescribed
value of the gross estate — in
Subsection (A) of Section 91,

“(l) Standard Deduction. — An amount

“(®) Property Previously Taxed, — An amount
equivalent to Five million pesos (P5,000,000).
equal to the value specified below of any proper
ty
forming part of the gross estate situated
“(2) For claims against the estate: Provided, in the
Philippines of any person who died within five
That at the time the indebtedness was incurred the (5)
years prior to the death of the decedent,
or transferred
debt instrument was duly notarized and, if the loan to the decedent by gift within five (5) years
was contracted within three (3) years before the death prior to
his death, where such property can be identi
of the decedent, the administrator or executor shall fied as
having been received by the decedent from the
submit a statement showing the disposition of the donor
by gift, or from such prior decedent by gift,
proceeds of the loan. bequest,
devise or inheritance, or which can be identified
as
having been acquired in exchange for proper
ty so
“(8) For claims of the deceased against received:
insolvent persons where the value of
 24
25

“One hundred percent (100%) of the value, if

allowable under paragraph (5) in respect of the
the prior decedent died within one (1) year prior to
property or properties given in exchange therefor.
the death of the decedent, or if the property was
Where a deduction was allowed of any mortgage or
transferred to him by gift, within the same period
other lien in determining the donor's tax, or the estate
prior to his death;
tax of the prior decedent, which was paid in whole or
im part prior to the decedent’s death, then the
“Eighty percent (80%) of the value, if the prior deduction allowable under said Subsection shall be
decedent died more than one (1) year but not more reduced by the amount so paid. Such deduction
than two (2) years prior to the death of the decedent, allowable shall be reduced by an amount which bears
or if the property was transferred to him by gift within the same ratio to the amounts allowed as deductions
the same period prior to his death; under paragraphs (2), (3), (4), and (6) of this
Subsection as the amount otherwise deductible under
“Sixty percent (60%) of the value, if the prior said paragraph (5) bears to the value of the decedent’s
decedent died more than two (2) years but not more estate. Where the property referred to consists of two
than three (3) years prior to the death of the decedent, or more items, the aggregate value of such items shall
or ifthe property was transferred to him by gift within be used for the purpose of computing the deduction.
the same period prior to his death;
“6) Transfers for Public Use. — The amount
“Forty percent (40%) of the value, if the prior of all bequests, legacies, devises or transfers to or for
decedent died more than three (3) years but not more the use of the Government of the Republic of the
than four (4) years prior to the death of the decedent, Philippines, or any political subdivision thereof, for
or if the property was transferred to him by gift within exclusively public purposes.
the same period prior to his death; and
“(7) The Family Home. — An amount
“Twenty percent (20%) of the value, if the prior equivalent to the current fair market value of the
decedent died more than four (4) years but not more decedent’s family home: Provided, however, That if
than five (5) years prior to the death of the decedent, the said current fair market value exceeds Ten million
or if the property was transferred to him by gift within pesos (P10,000,000), the excess shall be subject to
the same period prior to his death. estate tax.

“These deductions shall be allowed only where “(8) Amount Received by Heirs Under Republic
a donor’s tax, or estate tax imposed under this Title Act No. 4917. — Any amount received by the heirs
was finally determined and paid by or on behalf of from the decedent’s employee as a consequence of the
such donor, or the estate of such prior decedent, as death of the decedent-employee in accordance with
the case may be, and only in the amount finally Republic Act No. 4917: Provided, That such amount
determined as the value of such property in is included in the gross estate of the decedent.
determining the value of the gift, or the gross estate
of such prior decedent, and only to the extent that “®@) Deductions Allowed to Nonresident
the value of such property is included in the decedent’s Estates. — In the case of a nonresident not a citizen
gross estate, and only ifin determining the value of of the Philippines, by deducting from the value of
the estate of the prior decedent, no deduction was
 26
27

that part of his gross estate which at the time of his

death is situated in the Philippines: “(a) The amount of the credit in respect to the
tax paid to any country shall not exceed the same
“(1) Standard Deduction. — An amount proportion of the tax against which such credit is
equivalent to Five hundred thousand pesos (P500,000); taken, which the decedent's net estate situated within
such country taxable under this Title bears to his
entire net estate; and
“(2) That proportion of the deductions specified
in paragraphs (2), (3), and (4) of Subsection (A) of
this Section which the value of such part bears to the “(&) The total amount of the credit shall not
value of his entire gross estate wherever situated; exceed the same proportion of the tax against which
such credit is taken, which the decedent’s net estate
situated outside the Philippines taxable under this
“(3) Property Previously Taxed. — xxx
Title bears to his entire net estate.”

“(4) Transfers for Public Use. — The amount

SEC. 24. Section 89 of the NIRC, as amended, is hereby
of all bequests, legacies, devises or transfers to or for
repealed.
the use of the Government of the Republic of the
Philippines or any political subdivision thereof, for
exclusively public purposes. SEC. 25. Section 90 of the NIRC, as amended, is hereby
further amended to read as follows:
“(C) Share in the Conjugal Property. — The
net share of the surviving spouse in the conjugal “SEC. 90. Estate Tax Returns. —
partnership property as diminished by the obligations
properly chargeable to such property shall, for the “A) Requirements. — In all cases of transfers
purpose of this Section, be deducted from the net subject to the tax imposed herein, or regardless of
estate of the decedent. the gross value of the estate, where the said estate
consists of registered or registrable property such as
“(D) Tax Credit for Estate Taxes Paid to a real property, motor vehicle, shares of stock or other
Foreign Country. — similar property for which a clearance from the
Bureau of Internal Revenue is required as a condition
precedent for the transfer of ownership thereof in the
“(1) In General. — The tax imposed by this name of the transferee, the executor, or the
Title shall be credited with the amounts of any estate administrator, or any of the legal heirs, as the case
tax imposed by the authority of a foreign country. may be, shall file a return under oath in duplicate,
setting forth:
“(2) Limitations on Credit. — The amount of
the credit taken under this Section shall be subject
“Q) xxx
to each of the following limitations:
“(2) xxx
 28 29

“(3) Such part of such information as may at SEC. 27. Section 97 of the NIRC, as amended, is hereby
the time be ascertainable and such supplemental data further amended to read as follows:
as may be necessary to establish the correct taxes.
“SEC. 97. Payment of Tax Antecedent to the
“Provided, however, That estate tax returns Transfer of Shares, Bonds or Rights. — xxx.
showing a gross value exceeding Five million pesos
(P5,000,000) shall be supported with a statement duly “If a bank has knowledge of the death of a
certified to by a Certified Public Accountant person, who maintained a bank deposit account alone,
containing the following: or jointly with another, it shall allow any withdrawal
from the said deposit account, subject to a final
«.
XXX withholding tax of six percent (6%). For this purpose,
all withdrawal slips shall contain a statement to the
“(B) Time for Filing. — For the purpose of effect that all of the joint depositors are still living at
determining the estate tax provided for in Section 84 the time of withdrawal by any one of the joint
of this Code, the estate tax return required under the depositors and such statement shall be under oath
preceding Subsection (A) shall be filed within one (1) by the said depositors.”
year from the decedent's death.
SEC. 28. Section 99 of the NIRC, as amended, is hereby
further amended to read as follows:

SEc. 26. Section 91 of the NIRC, as amended, is hereby “SEC. 99. Rate of Tax Payable by Donor. —
further amended to read as follows:
“(A) In General. — The tax for each calendar
“SEC. 91. Payment of Tax. — Z year shall be six percent (6%) computed on the basis
of the total gifts in excess of Two hundred fifty
“(A) Time of Payment. — x x x thousand pesos (P250,000) exempt gift made during
the calendar year.
“(B) Extension of Time. -xx x
“@) Any contribution in cash or in kind to any
«“.
xxx
candidate, political party or coalition of parties for
campaign purposes shall be governed by the Election
“(C) Payment by Installment. — In case the Code, as amended.”
available cash of the estate is insufficient to pay the
total estate tax due, payment by installment shall be SEC. 29. Section 100 of the NIRC, as amended, is hereby
allowed within two (2) years from the statutory date further amended to read as follows:
for its payment without civil penalty and interest.
“SEC. 100. Transfer for Less Than Adequate
“(D) Liability for Payment. — xxx and Full Consideration. — Where property, other
than real property referred to in Section 24(D),
 30 31

is transferred for less than an adequate and full charitable corporation, accredited nongovernment
consideration in money or money’s worth, then the organization, trust or philanthropic organization and/
amount by which the fair market value of the property or research institution or organization, incorporated
exceeded the value of the consideration shall, for the as a nonstock entity, paying no dividends, governed
purpose of the tax imposed by this Chapter, be deemed by trustees who receive no compensation, and devoting
a gift, and shall be included in computing the amount allits income, whether students’ fees or gifts, donation,
of gifts made during the calendar year: Provided, subsidies or other forms of philanthropy, to the
however, That a sale, exchange, or other transfer of accomplishment and promotion of the purposes
property made in the ordinary course of business enumerated in its Articles of Incorporation.
(a transaction which is a bona fide, at arm’s length,
and free from any donative intent), will be considered «,
XXX.
”

as made for an adequate and full consideration in

money or money’s worth.”
SEC. 31. Section 106 of the NIRC, as amended, is hereby
further amended to read as follows:
SEc. 30. Section 101 of the NIRC, as amended, is hereby
further amended to read as follows:
“SEC. 106. Value-added Tax on Sale of Goods
or Properties. —
“SEC. 101. Exemption of Certain Gifts. — The
following gifts or donations shall be exempt from the “(A) Rate and Base of Tax. — There shall be
tax provided for in this Chapter: levied, assessed and collected on every sale, barter or
exchange of goods or properties, a value-added tax
“(A) In the Case of Gifts Made by a Resident. — equivalent to twelve percent (12%) of the gross selling
price or gross value in money of the goods or properties
“(1) Gifts made to or for the use of the National sold, bartered or exchanged, such tax to be paid by
Government or any entity created by any of its the seller or transferor.
agencies which is not conducted for profit, or to any
political subdivision of the said Government; and “Q) xxx

“(2) Gifts in favor of an educational and/or “(2) The following sales by VAT-registered
charitable, religious, cultural or social welfare persons shall be subject to zero percent (0%) rate:
corporation, institution, accredited nongovernment
organization, trust or philanthropic organization or
research institution or organization: Provided, “(a) Export Sales. — The term ‘export sales’
however, That not more than thirty percent (30%) of means:
said gifts shall be used by such donee for
administration purposes. For the purpose of this “@)_ The sale and actual shipment of goods from
exemption, a ‘non-profit educational and/or charitable the Philippines to a foreign country, irrespective of
corporation, institution, accredited nongovernment any shipping arrangement that may be agreed upon
organization, trust or philanthropic organization which may influence or determine the transfer of
and/or research institution or organization’ ownership of the goods so exported and paid for in
is a school, college or university and/or acceptable foreign currency or its equivalent in goods
'
 32
33

or services, and accounted for in accordance with the

“Provided, That subparagraphs (3), (4), and (5)
rules and regulations of the Bangko Sentral ng
hereof shall be subject to the twelve percent (12%)
Pilipinas (BSP);
value-added tax and no longer be considered export
sales subject to zero percent (0%) VAT rate upon
“(2) Sale and delivery of goods to: satisfaction of the following conditions:

“@) Registered enterprises within a separate “) The successful establishment and

customs territory as provided under special laws; and implementation of an enhanced VAT refund system
that grants refunds of creditable input tax within
“Gi) Registered enterprises within tourism ninety (90) days from the filing of the VAT refund
enterprise zones as declared by the Tourism application with the Bureau: Provided, That, to
Infrastructure and Enterprise Zone Authority (TIEZA) determine the effectivity of item no. 1, all applications
subject to the provisions under Republic Act No. 9593 filed from January 1, 2018 shall be processed
and
or The Tourism Act of 2009. must be decided within ninety (90) days from the filing
of the VAT refund application; and
“(3) Sale of raw materials or packaging
materials to a nonresident buyer for delivery to a “(2) All pending VAT refund claims as of
resident local export-oriented enterprise to be used in December 31, 2017 shall be fully paid in cash by
manufacturing, processing, packing or repacking in December 31, 2019.
the Philippines of the said buyer’s goods and paid for
in acceptable foreign currency and accounted for in “Provided, That the Department of Finance
accordance with the rules and regulations of the shall establish a VAT refund center in the Bureau of
Bangko Sentral ng Pilipinas (BSP); Internal Revenue (BIR) and in the Bureau ofCustoms
(BOC) that will handle the processing and granting
“(4) Sale of raw materials or packaging of cash refunds of creditable input tax.
materials to export-oriented enterprise whose export
sales exceed seventy percent (70%) of total annual “An amount equivalent to five percent (5%) of
production; the total VAT collection of the BIR and the BOC from
the immediately preceding year shall be automatically
“(5) Those considered export sales under appropriated annually and shall be treated as a
Executive Order No. 226, otherwise known as the special account in the General Fund or as trust
Omnibus Investment Code of 1987, and other special receipts for the purpose of funding claims for VAT
laws; and refund: Provided, That any unused fund, at the end
of the year shall revert to the General Fund.
“(6) The sale of goods, supplies, equipment and
fuel to persons engaged in international shipping or “Provided, further, That the BIR and the BOC
international air transport operations: Provided, shall be required to submit to the Congressional
That the goods, supplies, equipment and fuel shall be Oversight Committee on the Comprehensive Tax
used for international shipping or air transport Reform Program (COCCTRP) a quarterly report of
operations. all pending claims for refund and any unused fund.
 34 35

“(p) Sales to persons or entities whose exemption “The phrase ‘sale or exchange of
under special laws or international agreements to services’ means the performance of all kinds of
which the Philippines is a signatory effectively services in the Philippines for others for a fee,
subjects such sales to zero rate. remuneration or consideration, including those
performed or rendered by construction and service
contractors; stock, real estate, commercial, customs
and immigration brokers; lessors of property, whether
personal or real; warehousing services; lessors or
Src. 32. Section 107 of the NIRC, as amended, is hereby
distributors of cinematographic films; persons
further amended to read as follows:
engaged in milling, processing, manufacturing or
repacking goods for others; proprietors, operators or
“SEC. 107. Value-added Tax on Importation
keepers of hotels, motels, resthouses, pension houses,
of Goods. — inns, resorts; proprietors or operators of restaurants,
refreshment parlors, cafes and other eating places,
“(A) In General. — There shall be levied, including clubs and caterers; dealers in securities:
assessed and collected on every importation of goods lending investors; transportation contractors on their
a value-added tax equivalent to twelve percent (12%) transport of goods or cargoes, including persons who
based on the total value used by the Bureau of Customs transport goods or cargoes for hire and other domestic
in determining tariff and customs duties, plus common carriers by land relative to their transport
customs duties, excise taxes, if any, and other of goods or cargoes; common carriers by air and sea
charges, such tax to be paid by the importer prior to relative to their transport of passengers, goods or
the release of such goods from customs custody: cargoes from one place in the Philippines to another
Provided, That where the customs duties are place in the Philippines; sales of electricity by
determined on the basis of the quantity or volume of generation companies, transmission by any entity,
the goods, the value-added tax shall be based on the and distribution companies, including electric
landed cost plus excise taxes, if any. cooperatives; services of franchise grantees of electric
utilities, telephone and telegraph, radio and television
“B) Transfer of Goods by Tax-exempt broadcasting and all other franchise grantees except
Persons. — XXX.” ; those under Section 119 of this Code and non-life
insurance companies (except their crop insurances),
SEC, 33. Section 108 of the NIRC, as amended, is hereby including surety, fidelity, indemnity and bonding
companies; and similar services regardless of whether
further amended to read as follows:
or not the performance thereof calls for the exercise
Value-added Tax on Sale of or use of the physical or mental faculties. The
“Sac. 108. phrase ‘sale or exchange of services’ shall likewise
Services and Use or Lease of Properties. — .
include:

“(A) Rate and Base of Tax. — There shall be

“() The lease or the use of or the right or
levied, assessed and collected, a value-added tax
privilege to use any copyright, patent, design or
equivalento t twelve percent (12%) of gross receipts
model, plan, secret formula or process, goodwill,
derived from the sale or exchange of services,
trademark, trade brand or other like property or right;
including the use or lease of properties.
 36 37

“(2) The lease or the use of, or the right to use rental or royalty, including the amount charged for
of any industrial, commercial or scientific equipment; materials supplied with the services and deposits and
advanced payments actually or constructively received
“(3) The supply of scientific, technical, during the taxable quarter for the services performed
industrial or commercial knowledge or information; or to be performed for another person, excluding
value-added tax.
“(4) The supply of any assistance that is
ancillary and subsidiary to and is furnished as a “@) Transactions Subject to Zero Percent (0%)
means of enabling the application or enjoyment of Rate. — The following services performed in the
any such property, or right as is mentioned in Philippines by VAT-registered persons shall be subject
subparagraph (2) or any such knowledge or to zero percent (0%) rate:
information as is mentioned in subparagraph (3);
“Q) Processing, manufacturing or repacking
“(5) The supply of services by a nonresident goods for other persons doing business outside the
person or his employee in connection with the use of Philippines which goods are subsequently exported,
property or rights belonging to, or the installation or where the services are paid for in acceptable foreign
operation of any brand, machinery or other apparatus currency and accounted for in accordance with the
purchased from such nonresident person; rules and regulations of the Bangko Sentral ng
Pilipinas (BSP);
“(6) The supply of technical advice, assistance
or services rendered in connection with technical “) Services other than those mentioned in the
management or administration of any scientific, preceding paragraph, rendered to a person engaged
industrial or commercial undertaking, venture, in business conducted outside the Philippines or toa
project or scheme; nonresident person not engaged in business who is
outside the Philippines when the services are
“(1) The lease of motion picture films, films, performed, the consideration for which is paid for in
tapes and discs; and acceptable foreign currency and accounted for in
accordance with the rules and regulations of the
Bangko Sentral ng Pilipinas (BSP);
“(8) The lease or the use of or-the right to use
radio, television, satellite transmission and cable
television time. “(3) Services rendered to persons or entities
whose exemption under special laws or international
agreements to which the Philippines is a signatory
“Lease of properties shall be subject to the tax
effectively subjects the supply of such services to zero
herein imposed irrespective of the place where the
percent (0%) rate;
contract of lease or licensing agreement was executed
if the property is leased or used in the Philippines.
“@) Services rendered to persons engaged in
international shipping or international air transport
“The term ‘gross receipts’ means the total
operations, including leases of property for use thereof:
amount of money or its equivalent representing
Provided, That these services shall be exclusive for
the contract price, compensation, service fee,
international shipping or air transport operations;
’
 38
39

“(6) Services performed by subcontractors

must be decided within ninety (90) days from the filing
and/or contractors in processing, converting, or
of the VAT refund application: and
manufacturing goods for an enterprise whose export
sales exceed seventy percent (70%) of total annual
production; “@) All pending VAT refund claims as of
December 31, 2017 shall be fully paid in cash by
December 31, 2019.
“(6) Transport of passengers and cargo by
domestic air or sea vessels from the Philippines to a
foreign country; and “Provided, That the Department of Finance
shall establish a VAT refund center in the Bureau of
Internal Revenue (BIR) and in the Bureau of Custom
“(71) Sale of power or fuel generated through s
(BOC) that will handle the processing and granting
renewable sources of energy such as, but not limited of cash refunds of creditable input tax.
to, biomass, solar, wind, hydropower, geothermal,
ocean energy, and other emerging energy sources
using technologies such as fuel cells and hydrogen “An amount equivalent to five percent (5%) of
the total value-added tax collection of the BIR and
fuels.
the BOC from the immediately preceding year shall
be automatically appropriated annually and shall be
“(8) Services rendered to: treated as a special account in the General Fund or
as trust receipts for the purpose of funding claims for
“G) Registered enterprises within a separate VAT Refund: Provided, That any unused fund, at
customs territory as provided under special law; and the end of the year shall revert to the General Fund.

“Gi) Registered enterprises within tourism “Provided, further, That the BIR and the BOC
enterprise zones as declared by the TIEZA subject to shall be required to submit to the COCCTRP a
the provisions under Republic Act No. 9593 or quarterly report of all pending claims for refund and
The Tourism Act of 2009. any unused fund.”

“Provided, That subparagraphs (B)(1) and SEC. 34. Section 109 of the NIRG, as amended, is hereby
(B)(5) hereof shall be subject to the-twelve percent further amended to read as follows:
(12%) value-added tax and no longer be subject to
zero percent (0%) VAT rate upon satisfaction of the “SEC.109. Exempt Transactions. —
following conditions: (1) Subject to the provisions of Subsection (2) hereof,
the following transactions shall be exempt from the
“) The successful establishment and value-added tax:
implementation of an enhanced VAT refund system
that grants refunds of creditable input tax within “(A) xxx
ninety (90) days from the filing of the VAT refund
application with the Bureau: Provided, That, to
“B) xxx
determine the effectivity ofitem no. 1, all applications
filed from January 1, 2018 shall be processed and
“©) xxx
 40 41

(D) Importation of professional instruments “© Services rendered by individuals pursuant

and implements, tools of trade, occupation or to an employer-employee relationship;
employment, wearing apparel, domestic animals, and
personal and household effects belonging to persons
“@) Services rendered by regional or area
coming to settle in the Philippines or Filipinos or their headquarters established in the Philippines by
families and descendants who are now residents or multinational corporations which act as supervisory,
citizens of other countries, such parties hereinafter communications and coordinating centers for their
referred to as overseas Filipinos, in quantities and of affiliates, subsidiaries or branches in the Asia-Pacific
the class suitable to the profession, rank or position Region and do not earn or derive income from the
of the persons importing said items, for their own Philippines;
use and not for barter or sale, accompanying such
persons, or arriving within a reasonable time:
“@® Transactions which are exempt under
Provided, That the Bureau of Customs may, upon
international agreements to which the Philippines is
the production of satisfactory evidence that such
a signatory or under special laws, except those under
persons are actually coming to settle in the
Presidential Decree No. 529:
Philippines and that the goods are brought from their
former place of abode, exempt such goods from
payment of duties and taxes: Provided, further, That “(L) Sales by agricultural cooperatives duly
vehicles, vessels, aircrafts, machineries and other registered with the Cooperative Development
similar goods for use in manufacture, shall not fall Authority to their members as well as sale of their
within this classification and shall therefore be subject produce, whether in its original state or process
ed.
to duties, taxes and other charges; form, to non-members; their importation of direct
farm inputs, machineries and equipment, including
spare parts thereof, to be used directly and exclusively
“(E) Services subject to percentage tax under
in the production and/or processing of their produce;
Title V;

“(@) Gross receipts from lending activities by

“@) Services by agricultural contract growers
credit or multi-purpose cooperatives duly registered
and milling for others of palay into rice, corn into
with the Cooperative Development Authority;
grits and sugar cane into raw sugar;

“(@) Sales by non-agricultural, non-electric and

“(G) Medical, dental, hospital and veterinary
non-credit cooperatives duly registered with the
services except those rendered by professionals;
Cooperative Development Authority: Provided, That
the share capital contribution of each member does
“(A) Educational services rendered by private not exceed Fifteen thousand pesos (P15,000) and
educational institutions, duly accredited by the regardless of the aggregate capital and net surplus
Department of Education (DepEd), the Commission ratably distributed among the members;
on Higher Education (CHED), the Technical
Education and Skills Development Authority
“() Export sales by persons who are not
(TESDA) and those rendered by government
VAT-registered;
educational institutions;
 42
43

“@) Sale of real properties not primarily held “(Q) Importation of fuel, goods and supplies by
for sale to customers or held for lease in the ordinary persons engaged in international shipping or
course of trade or business or real property utilized air
transport operations: Provided, That the fuel, goods,
for low-cost and socialized housing as defined by and supplies shall be used for international shipping
Republic Act No. 7279, otherwise known as the Urban or air transport operations;
Development and Housing Act of 1992, and other
related laws, residential lot valued at One million
“(V) Services of bank, non-bank financial
five hundred thousand pesos (P1,500,000) and below,
intermediaries performing quasi-banking functions,
house and lot, and other residential dwellings valued
and other non-bank financial intermediaries;
at Two million five hundred thousand pesos
(P2,500,000) and below: Provided, That beginnning
January 1, 2021, the VAT exemption shall only apply “(W) Sale or lease of goods and services to senior
to sale of real properties not primarily held for sale to citizens and persons with disability, as provided under
customers or held for lease in the ordinary course of Republic Act Nos. 9994 (Expanded Senior Citize
ns
trade or business, sale of real property utilized for Act of 2010) and 10754 (An Act Expanding the Benefits
socialized housing as defined by Republic Act and Privileges of Persons With Disability),
No. 7279, sale of house and lot, and other residential respectively;
dwellings with selling price of not more than
Two million pesos (P2,000,000): Provided, “(X) Transfer of property pursuant to
further, That every three (3) years thereafter, the Section 40(C)(2) of the NIRG, asamended;
amount herein stated shall be adjusted to its present
value using the Consumer Price Index, as published “(Y) Association dues, membership fees, and
by the Philippine Statistics Authority (PSA); other assessments and charges collected by
homeowners associations and condominium
“Q) Lease ofa residential unit with a monthly corporations;
rental not exceeding Fifteen thousand pesos (P15,000);
“@Sale of gold to the Bangko Sentral ng
“) Sale, importation, printing or publication Pilipinas (BSP);
of books and any newspaper, magazine, review or
bulletin which appears at regular intervals with fixed “(AA) Sale of drugs and medicines prescribed
prices or subscription and sale and which is not for diabetes, high cholesterol, and hypertension
devoted principally to the publication of paid beginning January 1, 2019; and
advertisements;
“@B) Sale or lease of goods or properties or the
“(S) Transport of passengers by international performance of services other than the transactions
carriers; © mentioned in the preceding paragraphs, the gross
annual sales and/or receipts do not exceed the amount
“(1) Sale, importation or lease of passenger or of Three million pesos (P3,000,000).
cargo vessels and aircraft, including engine,
equipment and spare parts thereof for domestic or
international transport operations;
 44
45

SEC. 35. Section 110 of the NIRC, as amended, is hereby SEC. 36. Section 112 of the NIRC, as amended, is hereby
further amended to read as follows: further amended to read as follows:

“SEC. 110. Tax Credits. — “SEC. 112. Refunds or Tax Credits of Input
Tax. —
“(A) Creditable Input Tax. —
“A) xxx
“) xxx
“B) xxx
“(2) xxx
“©) Period within which Refund of Input
“(a) XXX Taxes shall be Made. — In proper cases, the
Commissioner shall grant a refund for creditable input
“(b) xxx taxes within ninety (90) days from the date of
submission of the official receipts or invoices and other
“Provided, That the input tax on goods documents in support of the application filed in
purchased or imported in a calendar month for use accordance with Subsections (A) and (B) hereof:
in trade or business for which deduction for Provided, That should the Commissioner find that
depreciation is allowed under this Code shall be the grant of refund is not proper, the Commissioner
spread evenly over the month of acquisition and the must state in writing the legal and factual basis for
fifty-nine (59) succeeding months if the aggregate the denial.
acquisition cost for such goods, excluding the VAT
component thereof, exceeds One million pesos “Tn case of full or partial denial of the claim for
(P 1,000,000): Provided, however, That if the tax refund, the taxpayer affected may, within thirty
estimated useful life of the capital good is less than (30) days from the receipt of the decision denying the
five (5) years, as used for depreciation purposes, then claim, appeal the decision with the Court of Tax
the input VAT shall be spread over such a shorter Appeals: Provided, however, That failure on the part
period: Provided, further, That the amortization of of any official, agent, or employee of the BIR to act on
the input VAT shall only be allowed wintil December the application within the ninety (90)-day period shall
31, 2021 after which taxpayers with unutilized input be punishable under Section 269 of this Code.
VAT on capital goods purchased or imported shall be
«. ”
allowed to apply the same as scheduled until fully XXX.
utilized: Provided, finally, That in the case of
purchase of services, lease or use of properties, the SEC. 37. Section 114 of the NIRC, as amended, is hereby
input tax shall be creditable to the purchaser, lessee further amended to read as follows:
or licensee upon payment of the compensation, rental,
royalty or fee.
“SEC. 114. Return and Payment of
“. » Value-added Tax. —
XXX.

“(A) In General. ~ Every person liable to pay

the value-added tax imposed under this Title shall
 46 47

file a quarterly return of the amount of his gross sales SEC. 38. Section 116 of the NIRC, as amended, is hereby
or receipts within twenty-five (25) days following the further amended to read as follows:
close of each taxable quarter prescribed for each
taxpayer: Provided, however, That VAT-registered “SEC. 116. Tax on Persons Exempt from
persons shall pay the value-added tax on a monthly Value-added Tax (VAT). — Any person whose sales
basis: Provided, finally, That beginning January 1, or receipts are exempt under Section 109 (BB) of this
2023, the filing and payment required under this Code from the payment of value-added tax and whois
Subsection shall be done within twenty-five (25) days not a VAT-registered person shall pay a tax equivalent
following the close of each taxable quarter. to three percent (3%) of his gross quarterly sales or
receipts: Provided, That cooperatives, and beginning
«,
xxx January 1, 2019, self-employed and professionals with
total annual gross sales and/or gross receipts not
“B) xxx exceeding Five hundred thousand pesos (P500,000)
shall be exempt from the three percent (3%) gross
receipts tax herein imposed.”
“(C) Withholding of Value-added Tax. — The
Government or any of its political subdivisions,
SEC. 89. Section 127 of the NIRC, as amended, is hereby
instrumentalities or agencies, including
further amended to read as follows:
government-owned or -controlled corporations
(GOCCs) shall, before making payment on account of
each purchase of goods and services which are subject “SEC. 127. Tax on Sale, Barter or Exchange
to the value-added tax imposed in Sections 106 and of Shares of Stock Listed and Traded through the
108 of this Code, deduct and withhold the value-added Local Stock Exchange or through Initial Public
tax imposed in Sections 106 and 108 of this Code, Offering. —
deduct and withhold a final value-added tax at the
rate of five percent (5%) of the gross payment thereof: “A) Tax on Sale, Barter or Exchange of
Provided, That beginning January 1, 2021, the VAT Shares of Stock Listed and Traded through the Local
witholding system under this Subsection shall shift Stock Exchange. — There shall be levied, assessed
from final to a creditable system: Provided, further, and collected on every sale, barter, exchange or other
That the payment for lease or use of properties or disposition of shares of stock listed and traded through
property rights to nonresident owners shall be subject the local stock exchange other than the sale by a
to twelve percent (12%) withholding tax at the time dealer in securities, a tax at the rate of six-tenths of
of payment: Provided, finally, That payments for one percent (6/10 of 1%) of the gross selling price or
purchases of goods and services arising from projects gross value in money of the shares of stock sold,
funded by Official Development Assistance (ODA) as bartered, exchanged or otherwise disposed which shall
defined under Republic Act No. 8182, otherwise be paid by the seller or transferor.
known as the ‘Official Development Assistance Act of
“. »
1996’, as amended, shall not be subject to the final xXx,
withholding tax system as imposed in this Subsection.
For purposes of this Section, the payor or person in
control of the payment shall be considered as the
withholding agent.
“ by
 48
49

SEC. 40. Section 128 of the NIRC, as amended, is hereby SEC. 42. Section 145 of the NIRC, as amended, is hereby
further amended to read as follows: further amended to read as follows:
“SEC. 145. Cigars and Cigarettes. —
“SEC. 128. Returns and Payment of
Percentage Taxes. — “(A) Cigars. - xxx

“(A) xxx “(B) Cigarettes Packed by Hand. - There

shall be levied, assessed and collected on cigarettes
“d) xxx packed by hand an excise tax based on the following
schedules:
“(2) Persons Retiring from Business. ~ xxx
“Effective on January 1, 2018 until
June 30, 2018, Thirty-two pesos and fifty centavos
“(3) Determination of Correct Sales or
(P32.50) per pack;
Receipts. — x x x

«, ” “Effective on July 1, 2018 until

XXX.
December 31, 2019, Thirty-five pesos (P35.00) per
pack;
SEC. 41. Section 129, Chapter 1 of Title VI of the NIRC,
as amended, is hereby further amended to read as follows: “Effective on January 1, 2020 until
December 31, 2021, Thirty-seven pesos and fifty
“TITLE VI - EXCISE TAXES ON CERTAIN centavos (P37.50) per pack; and
GOODS AND SERVICES
“CHAPTER 1- GENERAL PROVISIONS “Effective on January 1, 2022 until
December 31, 2023, Forty pesos (P40.00) per pack.
“SEC. 129. Goods and Services Subject to
Excise Taxes. — Excise taxes apply to goods “The rates of tax imposed under this subsection
manufactured or produced in the Philippines for shall be increased by four percent (4%) every year
domestic sales or consumption or for any other effective on January 1, 2024, through revenue
disposition and to things imported as well as services regulations issued by the Secretary of Finance.
performed in the Philippines. The excise tax imposed
herein shall be in addition to the value-added tax
“Duly registered cigarettes packed by hand
imposed under Title IV.
shall only be packed in twenties and other packaging
combinations of not more than twenty.
“For purposes of this Title, excise taxes herein
imposed and based on weight or volume capacity or
“Cigarettes packed by hand’ shall refer to the
any other physical unit of measurement shall be
manner of packaging of cigarette sticks using an
referred to as ‘specific tax’ and an excise tax herein
individual person’s hands and not through any other
imposed and based on selling price or other specified
means such as a mechanical device, machine or
value of the good or service performed shall be referred
equipment.
to as ‘ad valorem tax.’”
’
 50
51

“(C) Cigarettes Packed by Machine. - There “Effective January 1, 2018

shall be levied, assessed and collected on cigarettes
packed by machine a tax at the rates prescribed below:
“(@) Lubricating oils and greases, including but
not limited to, basestock for lube oils and greases,
“Effective on January 1, 2018 until high vacuum distillates, aromatic extracts and other
June 30, 2018, the tax on all cigarettes packed by similar preparations, and additives for lubricating
machine shall be Thirty-two pesos and fifty centavos oils and greases, whether such additives are petroleum
(P32.50) per pack; based or not, per liter and kilogram, respectively, of
volume capacity or weight, Eight pesos (P8.00):
“Effective on July 1, 2018 until Provided, That lubricating oils and greases produced
December 31, 2019, the tax on all cigarettes packed from basestocks and additives on which the excise
by machine shall be Thirty-five pesos (P35.00) per tax has already been paid shall no longer be subject
pack; to excise tax: Provided, further, That locally produced
or imported oils previously taxed as such but are
“Effective on January 1, 2020 until subsequently reprocessed, refined or recycled shall
December 31, 2021, the tax on all cigarettes packed likewise be subject to the tax imposed under this
by machine shall be Thirty-seven pesos and fifty Subsection;
centavos (P37.50) per pack; and
; “(b) Processed gas, per liter of volume capacity,
“Effective on January 1, 2022 until Hight pesos (P8.00);
December 31, 2023, the tax on all cigarettes packed
by machine shall be Forty pesos (P40.00) per pack. “©) Waxes and petrolatum, per kilogram,
Eight pesos (P8.00);
“The rates of tax imposed under this Subsection
shall be increased by four percent (4%) every year “@) On denatured alcohol to be used for motive
thereafter effective on January 1, 2024, through power, per liter of volume capacity, Eight pesos
revenue regulations issued by the Secretary of (P8.00): Provided, That unless otherwise provided
Fimance.” by special laws, if the denatured alcohol is mixed with
gasoline, the excise tax on which has already been
: SEC. 43. Section 148 of the NIRC, as amended, is paid, only the alcohol content shall be subject to the
hereby further amended to read as follows: tax herein prescribed. For purposes of this
Subsection, the removal of denatured alcohol of not
less than one hundred eighty degrees (180°) proof
“SEC. 148. Manufactured Oils and Other
(ninety percent (90%) absolute alcohol) shall be
Fuels. — There shall be collected on refined and
deemed to have been removed for motive power, unless
manufactured mineral oils and motor fuels, the
shown otherwise;
following excise taxes which shall attach to the goods
hereunder enumerated as soon as they are in existence
as such: “© Naphtha, regular gasoline, pyrolysis
gasoline and other similar products of distillation,
per liter of volume capacity, Seven pesos
(P7.00): Provided, however, That naphtha and
 52
53

pyrolysis gasoline, when used as a raw material in

per liter of volume capacity, Two pesos and fifty
the production of petrochemical products, or in the
centavos (P2.50);
refining of petroleum products, or as replacement fuel
for natural-gas-fired-combined cycle power plant in
lieu of locally-extracted natural gas during the “@ Liquefied petroleum gas, per kilogram,
non-availability thereof, subject to the rules and One peso (P1.00): Provided, That liquefied petroleum
regulations to be promulgated by the Secretary of gas when used as raw material in the production of
Finance, per liter of volume capacity, zero (P0.00): petrochemical products, subject to the rules and
Provided, further, That the production of petroleum regulations to be promulgated by the Secretary of
products, whether or not they are classified as Finance, shall be taxed zero (P0.00) per kilogram:
products of distillation and for use solely forthe
production of gasoline shall be exempt from excise “Provided, finally, That liquefied petroleum gas
tax: Provided, finally, That the by-product including used for motive power shall be taxed at the equivalent
fuel oil, diesel fuel, kerosene, pyrolysis gasoline, rate as the excise tax on diesel fuel oil;
liquefied petroleum gases, and similar oils having
more or less the same generating power, which are “&) Asphalts, per kilogram, Eight pesos (P8.00);
produced in the processing of naphtha into
petrochemical products shall be subject to the “® Bunker fuel oil, and on similar fuel oils
applicable excise tax specified in this Section, except having more or less the same generating power, per
when such by-products are transferred to any of the liter of volume capacity, Two pesos and fifty centavos
local oil refineries through sale, barter or exchange, (P2.50): Provided, however, That the excise taxes
for the purpose of further processing or blending into paid on the purchased basestock (bunker) used in the
finished products which are subject to excise tax under manufacture of excisable articles and forming part
this Section; thereof shall be credited against the excise tax due
therefrom; and
“® Unleaded premium gasoline, per liter of
volume capacity, Seven pesos (P7.00); “@n) Petroleum coke, per metric ton, Two pesos
and fifty centavos (P2.50): Provided, however, That,
“(g) Aviation turbo jet fuel, aviation gas, per petroleum coke, when used as feedstock to any power
liter of volume capacity, Four pesos (P4.00); generating facility, per metric ton, zero (P0.00).

“(a) Kerosene, per liter of volume capacity, “Effective January 1, 2019

Three pesos (P3.00): Provided, That kerosene, when
used as aviation fuel, shall be subject to the same tax “(@) Lubricating oils and greases, including but
on aviation turbo jet fuel under the preceding not limited to, basestock for lube oils and greases,
paragraph. (g), such tax to be assessed on the user high vacuum distillates, aromatic extracts and other
thereof; similar preparations, and additives for lubricating oils
and greases, whether such additives are petroleum
“@ Diesel fuel oil, and on similar fuel oils based or not, per liter and kilogram, respectively, of
having more or less the same generating power, volume capacity or weight, Nine pesos (P9.00):
Provided, That lubricating oils and greases produced
 54
55

from basestocks and additives on which the excise

production of gasoline shall be exempt from excise
tax has already been paid shall no longer be subject
tax: Provided, finally, That the by-product including
to excise tax: Provided, further, That locally produced
fuel oil, diesel fuel, kerosene, pyrolysis gasoline,
or imported oils previously taxed as such but are
liquefied petroleum gases and similar oils having
subsequently reprocessed, rerefined or recycled shall
more or less the same generating power, which are
likewise be subject to the tax imposed under this
produced in the processing of naphtha into

eet
Subsection.
petrochemical products shall be subject to the

feet
applicable excise tax specified in this Section, except
“(b) Processed gas, per liter of volume capacity, when such by-products are transferred to any of the
Nine pesos (P9.00); local oil refineries through sale, barter or exchange,
for the purpose of further processing or blending into
“© Waxes and petrolatum, per kilogram, finished products which are subject to excise tax under
Nine pesos (P9.00); this Section;

“@) Ondenatured alcohol to be used for motive “® Unleaded premium gasoline, per liter of
power, per liter of volume capacity, Nine pesos (P9.00): volume capacity, Nine pesos (P9.00);
Provided, That unless otherwise provided by special
laws, if the denatured alcohol is mixed with gasoline, “g) Aviation turbo jet fuel, aviation gas, per
the excise tax on which has already been paid, only liter of volume capacity, Four pesos (P4.00);
the alcohol content shall be subject to the tax herein
prescribed. For purposes of this Subsection, the
“(h) Kerosene, per liter of volume capacity,
removal of denatured alcohol of not less than one
Four pesos (P4.00): Provided, That kerosene, when
hundred eighty degrees (180°) proof (ninety percent
used as aviation fuel, shall be subject to the same tax
(90%) absolute alcohol) shall be deemed to have been
on aviation turbo jet fuel under the preceding
removed for motive power, unless shown otherwise;
paragraph (g), such tax to be assessed on the user
thereof;
“e) Naphtha, regular gasoline, pyrolysis
gasoline, and other similar products of distillation,
“@_ Diesel fuel oil, and on similar fuel oils
per liter of volume capacity, Nine pesos (P9.00):
having more or less the same generating power, per
Provided, however, That naphtha and pyrolysis
liter of volume capacity, Four pesos and fifty centavos
gasoline, when used as a raw material in the (P4.50);
production of petrochemical products, or in the
refining of petroleum products, or as replacement fuel
for natural-gas-fired-combined cycle power plant in “@) Liquefied petroleum gas, per kilogram,
lieu of locally-extracted natural gas during the Two pesos (P2.00): Provided, That liquefied petroleum
non-availability thereof, subject to the rules and gas when used as raw material in the production of
regulations to be promulgated by the Secretary of petrochemical products, subject to the rules and
Finance, per liter of volume capacity, zero (P0.00): regulations to be promulgated by the Secretary
Provided, further, That the production of petroleum of Finance, per kilogram, zero (P0.00): Provided,
products, whether or not they are classified as finally, That liquefied petroleum gas used for motive
products of distillation and for use solely for the power shall be taxed at the equivalent rate as the
excise tax on diesel fuel oil;
 56
57

“(&) Asphalts, per kilogram, Nine pesos (P9.00); “@ _ On denatured alcohol to be used for motive
power, per liter of volume capacity, Ten pesos
“® Bunker fuel oil, and on similar fuel oils (P10.00): Provided, That unless otherwise provided
having more or less the same generating power, per by special laws, if the denatured alcohol is mixed with
liter of volume capacity, Four pesos and fifty centavos gasoline, the excise tax on which has already been
(P4.50): Provided, however, That the excise taxes paid, only the alcohol content shall be subject to the
paid on the purchased basestock (bunker) used in the tax herein prescribed. For purposes of this
manufacture of excisable articles and forming part Subsection, the removal of denatured alcohol of not
thereof shall be credited against the excise tax due less than one hundred eighty degrees (180°) proof
therefrom; and (ninety percent (90%) absolute alcohol) shall be
deemed to have been removed for motive power, unless
“(m) Petroleum coke, per metric ton, Four pesos shown otherwise;
and fifty centavos (P4.50): Provided, however, That,
petroleum coke, when used as feedstock to any power “e) Naphtha, regular gasoline, pyrolysis
generating facility, per metric ton, zero (P0.00). gasoline and other similar products of distillation,
per liter of volume capacity, Ten pesos (P10.00):
“Effective January 1, 2020 Provided, however, That naphtha and pyrolysis
gasoline, when used as a raw material in the
“(a) Lubricating oils and greases, including but production of petrochemical products, or in the
not limited to, basestock for lube oils and greases, refining of petroleum products or as replacement fuel
high vacuum distillates, aromatic extracts and other for natural-gas-fired-combined cycle power plant in
similar preparations, and additives for lubricating lieu of locally-extracted natural gas during the
oils and greases, whether such additives are petroleum non-availability thereof, subject to the rules and
based or not, per liter and kilogram, respectively, of regulations to be promulgated by the Secretary of
volume capacity or weight, Ten pesos (P10.00): _ Finance, per liter of volume capacity, zero (P0.00):
Provided, That lubricating oils and greases produced Provided, further, That the production of petroleum
from basestocks and additives on which the excise products, whether or not they are classified as
tax has already been paid shall no longer be subject products of distillation and for use solely for the
to excise tax: Provided, further, That locally produced production of gasoline shall be exempt from excise
or imported oils previously taxed as such but are tax: Provided, finally, That the by-product including
subsequently reprocessed, rerefined or recycled shall fuel oil, diesel fuel, kerosene, pyrolysis gasoline,
likewise be subject to the tax imposed under this liquefied petroleum gases and similar oils having
Subsection. more or less the same generating power, which are
produced in the processing of naphtha into
“(b) Processed gas, per liter of volume capacity, petrochemical products shall be subject to the
Ten pesos (P10.00); applicable excise tax specified in this Section, except
when such by-products are transferred to any of the
local oil refineries through sale, barter or exchange,
“© Waxes and petrolatum, per kilogram, Ten
for the purpose of further processing or blending into
pesos (P10.00);
finished products which are subject to excise tax under
this Section;
 58
59

“@® Unleaded premium gasoline, per liter of

volume capacity, Ten pesos (P10.00); “Petroleum products, including naphtha, LPG,
petroleum coke, refinery fuel and other products of
distillation, when used as input, feedstock or as raw
“(g) Aviation turbo jet fuel, aviation gas, per
material in the manufacturing of petrochemical
liter of volume capacity, Four pesos (P4.00);
products, or in the refining of petroleum products, or
as replacement fuel for natural-gas-fired-combined
“G) Kerosene, per liter of volume capacity, cycle power plant in lieu of locally-extracted natural
Five pesos (P5.00): Provided, That kerosene, when gas during the non-availability thereof, subject to the
used as aviation fuel, shall be subject to the same tax rules and regulations to be promulgated by the
on aviation turbo jet fuel under the preceding Secretary of Finance, per liter of volume capacity,
paragraph (g), such tax to be assessed on the user zero (P0.00): Provided, That the by-product including
thereof; fuel oil, diesel fuel, kerosene, pyrolysis gasoline,
liquefied petroleum gases, and similar oils having
“@ Diesel fuel oil, and on similar fuel oils more or less the same generating power, which are
having more or less the same generating power, per produced in the processing of naphtha into
liter of volume capacity, Six pesos (P6.00); petrochemical products shall be subject to the
applicable excise tax specified in this Section, except
“@) Liquefied petroleum gas, per kilogram, when such by-products are transferred to any of the
Three pesos (P3.00): Provided, That liquefied local oil refineries through sale, barter or exchange,
petroleum gas when used as raw material in the for the purpose of further processing or blending into
production of petrochemical products, subject to the finished products which are subject to excise tax under
rules and regulations to be promulgated by the this Section.
Secretary of Finance, per kilogram, zero (P0.00):
Provided, finally, That liquefied petroleum gas used “For the period covering 2018 to 2020, the
for motive power shall be taxed at the equivalent rate scheduled increase in the excise tax on fuel as imposed
as the excise tax on diesel fuel oil; in this Section shall be suspended when the average
Dubai crude oil price based on Mean of Platts
“&) Asphalts, per kilogram, Ten pesos Singapore (MOPS) for three (3) months prior to the
(P10.00); scheduled increase of the month reaches or exceeds
Eighty dollars (USD 80) per barrel.
“@ Bunker fuel oil, and on similar fuel oils
having more or less the same generating power, per “Provided, That the Department of Finance
liter of volume capacity, Six pesos (P6.00): Provided, shall perform an annual review of the implementation
however, That the excise taxes paid on the purchased of the excise tax on fuel and shall, based on projections
basestock (bunker) used in the manufacture of provided and recommendations of the Development
excisable articles and forming part thereof shall be Budget Coordination Committee, as reconciled from
credited against the excise tax due therefrom; and the conditions as provided above, recommend the
implementation or suspension of the excise tax on
“@n) Petroleum coke, per metric ton, Six pesos fuel: Provided, further, That the recommendation
(P6.00): Provided, however, That, petroleum coke, shall be given on a yearly basis: Provided, finally,
when used as feedstock to any power generating That any suspension of the increase in excise tax shall
facility, per metric ton, zero (P0.00). not result in any reduction of the excise tax being
imposed at the time of the suspension.”
 60
61

SEC. 44. A new section designat

ed as Section 148-A
under Chapter V of the NIRC, “@ Absence of Official or Dilution of the
as amended, is hereby inserted
to read as follows: Official Marker; Presumptions. — In the event
that
the petroleum products which do not contai
n the
“SEC. 148-A. Mandatory Marking official marker or which contain the official marke
of All r
Petroleum Products. — In acco but are diluted beyond the acceptable perce
rdance with rules ntage
and regulations to be issued by approved by the Secretary of Finance are found
the Secretary of in
Finance, in consultation with the the domestic market or in the possession of anyone
Commissioner of ,
Internal Revenue and Commissioner or under any situation where said petroleum produc
of Customs and ts
in coordination with the Secretar are subject to duties and taxes, it shall be presumed
y of Energy, the that the same were withdrawn with the intention
Secretary of Finance shall requi to
re the use of an evade the payment of the taxes and duties due thereo
offic ial fuel marking or similar tech n;
nology on
petroleum products that are refin
ed, manufactured,
or imported into the Philippines, “@) The use of fraudulent marker on the
and that are subject
to the payment of taxes and dutie petroleum products shall be considered Prima facie
s, such as but not
limited to, unleaded premium gasol evidence that the same have been withdrawn or
ine, kerosene, and
diesel fuel oil after the taxes and imported without the payment of taxes and duties
duties thereon have
been paid. The mandatory marking due thereon;
of all petroleum
products shall be in accordance
with the following:
“@) Engagement of Fuel Marking Provider.
“@) Official Markers, — There ~The government shall engage only one fuel marki
shall be a list ng
of chemical additives and correspo provider who shall, under the supervision and
nding quantitative
ratio as identified by the Secr direction of the Commissioners of Internal Revenue
etary of Finance as
official fuel markers. The official and Customs, be responsible for providing,
fuel markers shall
be distinct and, to the greatest monitoring, and administering the fuel markers,
degree possible,
impossible to imitate or repli provide equipment and devices, conduct field and
cate: Provided,That
the official fuel marker must confirmatory tests, and perform such other
be unique to the acts
Philippines and that its chemical incidental or necessary to the proper implementation
composition and
quantitative ratio must persist of the provisions of this Act: Pro vided, That the
for at least three (3) fuel
years from their application or admi marking provider shall provide an end-to-end solutio
nistration to the n
unmarked fuel; to the Government, including the establishment and
operation of testing facilities that are certified
to
“(&) The person, entity, or taxpayer ISO 17025;
who owns
or enters the petroleum products
into the country, or
the person to whom the petroleu “(@) Allcosts pertaining to the procurement of
m products are
consigned shall cause and accommod the official fuel markers shall be borne by the refiner,
ate the marking
of the petroleum products with manufacturer or importer, of petroleum product
the official marking s,
agent; as the case may be: Provided, That the government
may subsidize the cost of official fuel markers in the
“(C) Internal revenue or customs offic first year of implementation;
ers shall
be on site to administer the decl
aration of the tax
and duties imposed on the petroleu
m products and to
oversee the application of the fuel
marking:
 62
63
“h) Fuel Marking Program Fund
s. — In
addition to any appropriation automobiles based on the manufacturer’s or
to implement this
Section and the last paragraph of importer’s selling price, net of excise and value-added
Section 171 of this
Act, fees or charges collected in tax, in accordance with the following schedule:
relation to the fuel
marking program may be recorded
as trust receipts
of the implementing agencies, and shall “Effective January 1, 2018
be exclusively
disbursed to defray the cost of servi
ces or equipment “Net manufacturer’s price/
required to fully implement the said Rate
program, subject importer’s selling price
to rules and regulations to
be issued by the “Up to Six hundred thousand
DOF -DBM-COA permanent comm
ittee; pesos (P600,000) Four percent (4%)
“Over Six hundred thousand pesos
“@ The marking of petroleum prod
ucts shall (P600,000) to One million
be mandatory within five (5) years
from the effectivity pesos (P 1,000,000) Ten percent (10%)
of this Act; and
“Over One million pesos (P1,000,000)
to Four million pesos (P4,000,000) Twenty percent (20%)
“@) The term ‘random field test’ shall
refer to
periodic random inspections and “Over Four million pesos (P4,000,000) Fifty percent (50%)
tests performed to
establish qualitative and quantitati
ve positive result
of fuel trafficking, which are conducte
d on fuels found “Provided, That hybrid vehicles shall be
in warehouses, storage tanks, gas stati
ons and other subject to fifty percent (50%) of the applicable excise
retail outlets, and in such othe
r properties or tax rates on automobiles under this Section:
equipment, including mechanisms
of transportation, Provided, further, That purely electric vehicles and
of persons engaged in the sale, deliv
ery, trading, pick-ups shall be exempt from excise tax on
transportation, distribution, or
importation of fuel automobiles.
intended for domestic market.

“As used in this Section —

“The term ‘confirmatory tests’ shall
refer to the
accurate and precise analytical test
of the tested “(a) Automobile shall mean any four (4) or
unmarked, adulterated, or diluted
fuel using a device, more wheeled motor vehicle regardless of seating
tool or equipment which will valid
ate and confirm capacity, which is propelled by gasoline, diesel,
the result of the field test, that
is immediately electricity or any other motive power: Provided, That
conducted in an accredited testing
facility that is for purposes of this Act, buses, trucks, cargo vans,
certified to ISO 17025.”
t
jeepneys/jeepney substitutes, single cab chassis, and
SEC. 45. special-purpose vehicles shall not be considered as
Section
i 149, Chapter 6 of Title
i VI of the NIRC,
as amended, is hereby further amended to read ii automobiles.
as follows: ' “() ‘Trudkloargo van shall mean @ moter
“CHAPTER VI - EXCISE TAX ON MIS
CELLANEOUS ‘ vehicle of any configuration that is exclusively
ARTICLES designed for the carriage of goods and with any number
i
“SEC. 149. Automobiles, — Ther of wheels and axles: Provided, That pick-ups shall
e shall be
levied, assessed and collected an be considered as trucks.
ad valorem tax on
1
 64

eemmermneneneme
65

“() Jeepney/jeepney substitutes

shall mean as
‘Philippine jeep or jeepney’ which SEc. 46. Anew section designated as Section 150-A
are of the jitney under

IE ERE
eT enone rate
type locally designed and manufactured Chapter VI, Title VI of the NIRC, as amended, is
generally from hereby inserted
surplus parts and components, It shall to read as follows:
also include
jeepney substitutes that are manu
factured from
brand-new single cab chassis or

ESS
cowl chassis and “SEC. 150-A. Non-essential Services. — There
locally customized rear body that shall be levied, assessed, and collected a tax
has continuous equivalent
sideway row seats with open rear to five percent (5%) based on the gross receipts derive
door and without d
retractable glass windows. from the performance of services, net of
excise tax
and value-added tax, on invasive cosmetic proced

NAO ANS
ures,
“@ Bus shall mean a motor vehicle of surgeries, and body enhancements directed solely
configuration with gross vehicle weig
any towards improving, altering, or enhancing
ht of 4.0 tons or the
more with any number of wheels and patient’s appearance and do not meaningfully promot
axles, whichis e
generally accepted and specially desi the proper function of the body or prevent or treat
gned for mass or
public transportation, illness or disease: Provided, That this tax shall
not
apply to procedures necessary to ameliorate a
“@) Single cab chassis shall mean deformity arising from, or directly related to,
a motor a
vehicle with complete engine power congenital or developmental defect or abnormality,
train and chassis a
equipped with a cab that has a max personal injury resulting from an accident ortraum
imum of two (2) a,
doors and only one (1) row of seats. or disfiguring disease, tumor, virus or infecti
on:
Provided, further, That cases or treatments
covered
by the National Health Insurance Program shall
“© Special purpose vehicle shall not
mean a motor be subject to this tax.”
vehicle designed for specific applicat
ions such as
cement mixer, fire truck, boom
truck, ambulance SEc. 47. Anew section designated as Section 150-B under
and/or medical unit, and off-road vehicles
for heavy Chapter VI, Title VI of the NIRG, as amended,
industries and not for recreational activ is hereby inserted
ities. to read as follows:
“(g) Hybrid electric vehicle shall mean
a motor “SEC. 150-B. Sweetened Beverages.
vehicle powered by electric energy, with —
or without
provision for off-vehicle charging, in comb
ination with
gasoline, diesel or any other motive power “A) Rate and Base of Tax. — Effective January
: Provided,
That, for purposes of this Act, a hybrid 1, 2018:
electric vehicle
must be able to propel itself from
a stationary
condition using solely electric motor. “Q) A tax of Six pesos (P6.00) per liter of
volume capacity shall be levied. assessed, and
“Provided, That in the case of imported collected on sweetened beverages using purely caloric
automobiles
not for sale, the tax imposed herein shall sweeteners, and purely non-caloric sweeteners, or
a
be based on
the total landed value, including tran mix of caloric and non-caloric sweeteners: Provided,
saction value,
customs duty and all other charges. That this tax rate shall not apply to sweetened
beverages using high fructose corn syrup: Provided,
“Automobiles used exclusively further, That sweetened beverages using purely
within the coconut sap sugar and purely steviol glycosides shall
freeport zone shall be exempt from excis
e tax.” be exempt from this tax; and
 66
67
“2) A tax of Twelve pesos (P12.00)
volume
per liter of
capacity shall be levied, asse “(2) Caloric sweetener refers to a substance
ssed, and
collected on sweetened beverage that is sweet and includes sucrose, fructose, and
s using purely high
fructose corn syrup or in comb glucose that produces a certain sweetness;
ination with any caloric
or non-caloric sweetener,
“(8) High fructose corn syrup refers to a sweet
“@) Definition of Terms. — As used in this saccharide mixture containing fructose and glucose
which is derived from corn and added to provide
sweetness to beverages, and which includes other
“() Sweetened beverages similar fructose syrup preparations: and
(SBs) refer to
non-alcoholic beverages of
any constitution (liquid,
powder, or concentrates) that “(4) Non-caloric sweetener refers to a substance
are pre-packaged and
sealed in accordance with that are artificially or chemically processed that
the Food and Drug
Administration (FDA) standard produces a certain sweetness. These are substances
s, that contain caloric
and/or non-caloric Sweete which can be directly added to beverages, such as
ners added by the
manufacturers, and shall incl aspartame, sucralose, saccharin, acesulfame
ude, but not be limited
to the following, as described potassium, neotame, cyclamates and other
in the Food Category
System from Codex Alimen non-nutritive sweeteners approved by the Codex
tarius Food Category
Descriptors (Codex Stan 192- Alimentarius and adopted by the FDA.
1995, Rev, 2017 or the
latest) as adopted by the FDA
:
“©) Exclusions. — The following products, as
“(@) Sweetened juice drinks; described in the food category system from Codex
Alimentarius Food Category Descriptors (Codex Stan
“(@) Sweetened tea; 192-1995, Rev. 2017 or the latest) as adopted by the
FDA, are excluded from the scope of this Act:

SN ZA IAC RP ee
“© Allcarbonated beverages;
“Q) All milk products, including plain milk,
“@ Flavored water; infant formula milk, follow-on milk, growing up milk,
powdered milk, ready-to-drink milk and flavored milk,
fermented milk, soymilk, and flavored soymilk;
“@)
RRR

Energy and sports drinks:

“O Other powdered drinks “(2) One Hundred Percent (100%) Natural

not classified as Fruit Juices — Original liquid resulting from the
milk, juice, tea, and coffee;
SOR

pressing of fruit, the liquid resulting from the

reconstitution of natural fruit juice concentrate, or
-“@) Cerealand grain beverages; and the liquid resulting from the restoration of water to
dehydrated natural fruit juice that do not have added
“(h) Other non-alcoholic beve sugar or caloric sweetener;
rages that contain
added sugar.
“(8) One Hundred Percent (100%) Natural
Vegetable Juices — Original liquid resulting from
the pressing of vegetables, the liquid resulting from
 ssainsioemvit roast natives
68
69

the reconstitution of natural vege

table juice
concentrate, or the liquid resulting this Section shall be fined treble the amount of
from the
restoration of water to dehydrated deficiency taxes, surcharges, and interest which may
natural vegetable
juice that do not have added be assessed pursuant to this Section.
sugar or caloric
sweetener;
“Any person liable for any of the acts or
“(4) Meal Replacement and Medically Indic omissions prohibited under this Section shall be

UTS TENN ERT WS HEIN ne

ated criminally liable and penalized under Section 254 of
Beverages ~ Any liquid or powder drink
/product for
oral nutritional therapy for persons who the NIRC, as amended. Any person who willfully
cannot absorb
or metabolize dietary nutrients from food aids or abets in the commission of any such act or
or beverages,
or as a source of necessary nutrition omission shall be criminally liable in the same
used due toa
medical condition and an oral elect
rolyte solution for
manner as the principal.
infants and children formulated
to prevent
dehydration due to illness; and “If not a citizen of the Philippines, the offender
shall be deported immediately after serving the
“(6) Ground coffee, instant soluble coffee sentence without further proceedings for deportation.
, and
pre-packaged powdered coffee products.
“E) Specific Responsibility of the Food
“O) Filing of Return and Payment and Drug Administration (FDA). — Starting
of Excise
Tax and Penalty. — June 1, 2018, the FDA shall require all

TES RANE
manufacturers and importers of sweetened beverages
“Q) Filing of Return and Payment of covered by this Act to indicate on the label the type of
Excise sweetener used, and on sweetened
Tax on Domestic and Imported Sweetened beverages in
Beverages, powder form to indicate on the label the equivalent of
— The provision of Sections 130 and
131 of the NIRC, each serving per liter of volume capacity.
as appropriate, shall apply to sweetene

ARR INR
d beverages.

“@) Penalty. — Upon final findings “The FDA shall also conduct post-
by the marketing surveillance of the sweetened beverages on
NOE TST OT ARLES

Commissioner of Internal Revenue and/o

r Customs display in supermarkets, groceries or retail stores
that any manufacturer or importer, in viola
tion of anWor inspection of manufacturing sites to determine
this Section, misdeclares or misreprese
nts in the compliance with the requirements of this Section.
sworn statement provided in Section 130(¢)
of the Violations of the provisions of this Act, including but
NIRC, as amended, any pertinent data orinfor
ROL

mation, not limited to, mislabeling or misbranding, shall, to

the penalty of summary cancellation or with
drawal the extent applicable, be punishable under existing
of the permit to engage in business as manu
MOET ONS

facturer laws.
or importer of sweetened beverages as provi
ded under
Section 268 of the NIRC, as amended,
shall be
imposed. “F) Duty of the Commissioner to Ensure
Payment of Taxes. — It shall be the duty of the
cremate: se meen Soa

“Any corporation, association or partnershi Commissioner, among other things, to prescribe a

p materially unique, secure and nonremovable
liable for any of the acts or omissions in violat
ion of identification, such as codes, stamps or other
markings, to be firmly and conspicuously affixed on
and form part of the label of all excisable sweetened
beverages.
 70
a

“For this purpose, the abovem

entioned control
measure shall be caused by the time of removal, in the case of those locally
the Commissioner to be
printed with adequate secu
rity features to ensure the
extracted or produced; or the value used by the
payment of excise tax on swe
etened beverages.
Bureau of Customs in determining tariff and customs
duties, net of excise tax and value-added tax in the
“G@) Review of Implement case of importation.
ation of the
Sweetened Beverage Tax.
— At the start of the “
implementation of the Sugar XXX:
sweetened beverage tax
and every year thereafter, the
Department of Health,
Department of Science “(a) Copper and other metallic minerals,
and Technology, and
Department of Finance shall revi four percent (4%); and
ew the impact of these
provisions on its health objectives with
making recommendations on the view to
the tax rate on these “(b) Gold and chromite, four percent (4%).
beverages.”

“(4) On indigenous petroleum, a tax of

SEC. 48. Section 151 of the NIRC,
as amended, is hereby six percent: (6%) of the fair international market price
further amended to read as
follows: thereof, on the first taxable sale, barter, exchange or
such similar transaction, such tax to be paid by the
“SEC. 151. Mineral Products. buyer or purchaser before removal from the place of
—
production. x x x.
«
(A) Rates of Tax. — There
shall be levied,
assessed and collected on mine «, ”
rals, mineral products XXX.
and quarry resources, excise
tax as follows:
SEC. 49. Section 155 of the NIRC, as amended, is hereby
“Q) On domestic or imported further amended to read as follows:
coal and coke,
notwithstanding any incentiv
es granted in any law
or special law:
“SEC. 155. Manufacturers and/or Importers
to Provide Themselves with Counting or Metering
“Effective J anuary 1, 2018, Fift Devices to Determine Volume of Production and
y pesos (P50.00)
per metric ton; Importation. - Manufacturers ofcigarettes, alcoholic
products, oil products, and other articles subject to
“Effective J. anuary 1, 2019,
One hundred pesos
excise tax that can be similarly measured shall
(P100.00) per metric ton; and provide themselves with such necessary number of
suitable counting or metering devices to determine
._ “Effective January 1, 2020, One hundred as accurately as possible the volume, quantity or
pesos (P150.00) per metric ton. fifty number of the articles produced by them under rules
and regulations promulgated by the Secretary of
“@) Finance, upon recommendation of the Commissioner:
On all nonm
etallic minerals and quarry
resources, a tax of four Provided, That the Department of Finance shall
percent (4%) based on the
actual mar ket value of the gross output maintain a registry of all petroleum manufacturers
thereof at and/or importers and the articles being manufactured
 72
73
and/or imported by them: Provided, further, That
the Department of Finance shall mandate “a) Random field testing shall be conducted
the creation
of a real-time inventory of petroleum articl in the presence of revenue or customs officers
, fuel
es being
manufactured, imported or found in storag marking provider, and the authorized representative
e depots of
such petroleum manufacturers and/or of the owner of the fuel to be tested: Provided, That
importers:
Provided, finally, That importers an employee assigned or working at the place where
of finished
petroleum products shall also provide thems the random field test is conducted shall be deemed
elves with an
Bureau-accredited metering devices to authorized representative of the owner;
determine as
accurately as possible the volume
of petroleum
products imported by them. “(&) All field tests shall be properly filmed or
video-taped, and documented; and
“This requirement shall be complied with
before
commencement of operations.” “© Asample of the randomly tested fuel shall
be immediately obtained by the revenue or customs
SEC. 50. Section 171 of the NIRG, as officer upon discovering that the same is unmarked,
amended, is hereby
further amended to read as follows: adulterated, or diluted:

“SEC. 171. Authority of Internal Reve “Provided, further, That confirmatory fuel test
nue
Officer in Searching for and Testing Taxab certificates issued by fuel testing facilities shall be
le Articles,
— Any internal revenue officer may, in the valid for any legal purpose from the date of issue,
discharge
of his official duties, enter any house, build and shall constitute admissible and conclusive
ing or place
where articles subject to tax under this evidence before any court.”
Title are
produced or kept, or are believed by
him upon
reasonable grounds to be produced or kept, Src. 51. Section 174 of the NIRC, as amended, is hereby
so far as
may be necessary to examine, test, discover further amended to read as follows:
or seize
the same. ae

“SEC. 174. Stamp Tax on Original Issue of

“He may also stop and search any vehic Shares of Stock. — On every original issue, whether
le or
other means of transportation when upon on organization, reorganization or for any lawful
reasonable
grounds he believes that the samé carries purpose, of shares of stock by any association,
any article
on which the excise tax has not been company, or corporation, there shall be collected a
paid.
documentary stamp tax of Two pesos (P2.00) on each
“Subject to rules and regulations to be issued Two hundred pesos (P200), or fractional part thereof,
by the Secretary of Finance, the Commission of the par value, of such shares of stock: Provided,
er of
Internal Revenue or his authorized repre That in the case of the original issue of shares of
sentatives
may conduct periodic random field stock without par value, the amount
tests and of the
confirmatory tests on fuel required to be marke documentary stamp tax herein prescribed shall be
d under
Section 148-A found in warehouses,
storage tanks,
based upon the actual consideration for the issuance
gas stations and other retail outlets, and in of such shares of stock: Provided, further, That
such other in
properties of persons engaged in the sale, the case of stock dividends, on the actual value
delivery,
trading, transportation, distribution, or represented by each share.”
importation
of fuel intended for the domestic market:
Provided,
the following shall be complied with:
 74 75

SEC. 52. Section 175 of the NIRC, as amended, is

hereby stamp tax of One peso (P1.00) on each Two hundred
further amended to read as follows:
pesos (P200), or fractional part thereof, of the face
value of such certificates or memorandum.”
“SEC. 175. Stamp Tax on Sales, Agreements
to Sell, Memoranda of Sales, Deliveries or
Transfer Skc. 54. Section 178 of the NIRC, as amended, is hereby
of Shares or Certificates of Stock. — On all
sales, or further amended to read as follows:
agreements to sell, or memoranda of sales,
or
deliveries, or transfer of shares or certificates of
stock “SEC.178. Stamp Tax on Bank Checks,
in any association, company, or corporation,
or Drafts, Certificates of Deposit not Bearing Interest,
transfer of such securities by assignment in
blank, and Other Instruments. — On each bank check,
or by delivery, or by any paper or agreement,
or draft, or certificate of deposit not drawing interest,
memorandum or other evidences of transfer
or sale or order for the payment of any sum of money drawn
whether entitling the holder in any manner
to the upon or issued by any bank, trust company, or any
benefit of such stock, or to secure the future payme
nt person or persons, companies or corporations, at sight
of money, or for the future transfer of any
stock, or on demand, there shall be collected a documentary
there shall be collected a documentary stamp
tax of stamp tax of Three pesos (P3.00).”
One peso and fifty centavos (P1.50) on each
Two
hundred pesos (P200), or fractional part thereof,
of
the par value of such stock: Provided, That only SEC. 55. Section 179 of the NIRC, as amended, is hereby
one
tax shall be collected on each sale or transfer of stock further amended to read as follows:
from one person to another, regardless of whether
or
not a certificate of stock is issued, indorsed, “SEC.179. Stamp Tax on All Debt
or
delivered in pursuance of such sale or transfer: Instruments. — On every original issue of debt
and
Provided, further, That in the case of stock withou instruments, there shall be collected a documentary
t
par value the amount of the documentary stamp stamp tax of One peso and fifty centavos (P1.50) on
tax
herein prescribed shall be equivalent to fifty percen each Two hundred pesos (P200), or fractional part
t
(50%) of the documentary stamp tax paid upon thereof, of the issue price of any such debt
the
original issue of said stock.” instruments: Provided, That for such debt
instruments with terms of less than one (1) year, the
SEC. 53. Section 177 of the NIRC, as amended, is documentary stamp tax to be collected shall be of a
hereby
further amended to read as follows: proportional amount in accordance with the ratio of
its term in number of days to three hundred
“SEC. 177. Stamp Tax on Certificates of sixty-five (365) days: Provided, further, That only
Profits or Interest in Property or Accumulations. one documentary stamp tax shall be imposed on either
— loan agreement, or promissory notes issued to secure
On all certificates of profits, or any certificate
or such loan.
memorandum showing interest in the property
or
accumulations of any association, company
or
corporation, and on all transfers of such certifi “<x x"
cates
or memoranda, there shall be collected a docum
entary
 716
77

SEC. 56. Section 180 of the NIRC, as amended, is

hereby SEC. 59. Section 183 of the NIRC, as amended, is hereby
further amended to read as follows:
further amended to read as follows:

“SEC. 180. Stamp Tax on All Bills of

“SEC. 183. Stamp Tax on Life Insurance
Exchange or Drafts. — On all bills of exchange
Policies. — On all policies of insurance or other
(between points within the Philippines) or drafts,
instruments by whatever name the same may be
there shall be collected a documentary stamp tax
of called, whereby any insurance shall be made or
Sixty centavos (P0.60) on each Two hundred pesos
renewed upon any life or lives, there shall be collected
(P200), or fractional part thereof, of the face value
of a one-time documentary stamp tax at the following
any such bill of exchange or draft.”
rates:
SEC. 57. Section 181 of the NIRC, as amended,
is hereby a
further amended to read as follows: ETD eet Th ene Exempt
‘
“SEC, 181. Stamp Tax Upon Accep tance “Tf the amount of insurance exceeds
of P100,000 but does not exceed P300,000 P20.00
Bills of Exchange and Others. — Upon
any
acceptance or payment of any bill of exchange or order “Tf the amount of insurance exceeds
P300,000 but does not exceed P500,000 P50.00
for the payment of money purporting to be drawn in
“If the amount of insurance exceeds
aoe country but payable in the Philippines, there
shall be collected a documentary stamp tax of Sixty P500,000 but does not exceed P750,000 P100.00
centavos (P0.60) on each Two hundred pesos (P200),
or fractional part thereof, of the face value of any
“I the amount of insurance exceeds
P750,000 but does not exceed P1,000,000 P150.00
such bill of exchange, or order, or the Philip
pine
equivalent of such value, if expressed in foreign “Tf the amount of insurance exceeds
currency.” P 1,000,000 P200.00”

“SEC. 60. Section 186 of the NIRC, as amended, is hereby

SEC. 58. Section 182 of the NIRC, as amended, is hereby
further amended to read as follows: further amended to read as follows:

“SEC. 186. Stamp Taxon Policies of Annuities

“SEC. 182. Stamp Tax on Foreign Bills of and Pre-Need Plans. — On all policies ofannuities,
Exchange and Letters of Credit. — On all foreign
or other instruments by whatever name the same
bills of exchange and letter of credit (including orders,
may be called, whereby an annuity may be made,
by telegraph or otherwise, for the payment of money
transferred or redeemed, there shall be collected a
issued by express or steamship companies or by
any documentary stamp tax of One peso (P1.00) on each
person or persons) drawn in but payable out of the
Two hundred pesos (P200), or fractional part thereof,
Philippines in a set of three (3) or more according to
of the premium or installment payment on contract
the custom of merchants and bankers, there shall be
price collected. On pre-need plans, the documentary
collected a documentary stamp tax of Sixty centavos
stamp tax shall be Forty centavos (P0.40) on each
(P0.60) on each Two hundred pesos (P200), or
Two hundred pesos (P200), or fractional part thereof,
fractional part thereof, of the face value of any such
of the premium or contribution collected.”
bill of exchange or letter of credit, or the Philippine
equivalent of such face value, if expressed in foreign
currency.”
 78
79

SEC. 61. Section 188 of the NIRC, as amended, is hereby

further amended to read as follows: SEC. 64. Section 191 of the same Code, as amended, is
hereby further amended to read as follows:
“SEC. 188. Stamp Tax on Certificates. —
On each certificate of damage or otherwise, and on “SEC. 191. Stamp Tax on Bills of Lading or
every other certificate or document issued by Receipts. — On each set of bills of lading or receipts
any (except charter party) for any goods, merchandise or
customs officer, marine surveyor, or other person
acting as such, and on each certificate issued effects shipped from one port or place in the
by a Philippines (except on ferries across rivers), or to any
notary public, and on each certificate of
any foreign port, there shall be collected a documentary
description required by law or by rules or regulations
of a public office, or which is issued for the purpose stamp tax of Two pesos (P2.00), if the value of such
of goods exceeds One hundred pesos (P100) and does not
giving information, or establishing proof of a
fact, exceed One thousand pesos (P1,000); Twenty pesos
and not otherwise specified herein, there shall be
collected a documentary stamp tax of Thirty pesos (P20.00), if the value exceeds One thousand pesos
(P30.00).” (P1,000): Provided, however, That freight tickets
covering goods, merchandise or effects carried as
SEC. 62. accompanied baggage of passengers on land and water
Section 189 of the NIRC, as amended, is hereby
further amended to read as follows: i carriers primarily engaged in the transportation of
passengers are hereby exempt.”
“SEC.189. Stamp Tax on Warehouse SEC. 65. Section 192 of the NIRC, as amended, is hereby

RSI
Receipts. — On each warehouse receipt for property
held in storage in a public or private warehouse further amended to read as follows:
or
yard for any person other than the proprietor of such

RE
warehouse or yard, there shall be collected
“SEC. 192. Stamp Taxon Proxies. — On each
a
documentary stamp tax of Thirty pesos (P30.00): proxy for voting at any election of officers of any
Provided, That no tax shall be collected on each ~ company or association, or for any other purpose,
REPT
warehouse receipt issued to any one person in any except proxies issued affecting the affairs of
one calendar month covering property the value of associations or corporations organized for religious,
RMT

which does not exceed Two hundred pesos (P200).” charitable or literary purposes, there shall be collected
adocumentary stamp tax of Thirty pesos (P30.00).”
SEC. 63. Section 190 of the NIRC, as amended, is hereby
further ame
tonde
read as follows:
d . 6. ion 193 of the NIRC, ded, is hereb
furtherSec. 66, Seckian (atthe
keg ABATE RENNES T=

amended to read as follows: eo ee

“SEC. 190. Stamp Tax on Jai-alai, Horse
Race, Tickets, Lotto or Other Authorized Numbers “SEC. 193. Stamp Tax on Powers of Attorney.
Games. — On each jai-alai, horse race ticket, lotto, — On each power of attorney to perform any act
or other authorized numbers games, there whatsoever, except acts connected with the collection
shall be
collected a documentary stamp tax of Twenty centavos of claims due from or accruing to the Government of
(P0.20): Provided, That if the cost of the ticket exceed the Republic of the Philippines, or the government of
One peso (P1.00), an additional tax of Twenty centavo any province, city or municipality, there shall be
s
(P0.20) on every One peso (P1.00), or fractional part collected a documentary stamp tax of Ten pesos
thereof, shall be collected.” (P10.00).”
4
 80
81

furtherSEC. 67. Section 194 of the NIRC, as

amended to read as follow: amended, is hereby
SEC. . 69. 69. Section
i 196 of the NIRC,
RC, as amended,
ded, i is hereby
further amended to read as follows:
“SEC. 194. Stamp Tax on Leases and
Other
Hiring Agreements, — On each lease “SEC. 196. Stamp Tax on Deeds of Sale,
, agreement,
memorandum, or contract for hire,
use or rent ofany
Conveyances and Donation of Real Property. —
lands or tenements, or portions there On all conveyances, donations, deeds, instruments,
of, there shall
be collected a documentary stamp tax or writings, other than grants, patents or original
of Six pesos
(P6.00) for the first Two thousand pesos certificates of adjudication issued by theGovernment,
(P2,000), or
fractional part thereof, and an additional whereby any land, tenement, or other realty sold shall
Two pesos
(P2.00) for every One thousand pesos be granted, assigned, transferred, donated or
(P1,000) or
fractional part thereof, in excess otherwise conveyed to the purchaser, or purchasers,
of the first Two
thousand pesos (P2,000) for each year or to any other person or persons designated by such
of the term of
said contract or agreement,” purchaser or purchasers, or donee, there shall be
collected a documentary stamp tax, at the rates
SEC. 68. Section 195 of the NIRC, herein below prescribed, based on the consideration
as amended, is hereby
further amended to read as follows: contracted to be paid for such realty or on its fair
market value determined in accordance with
Section 6(E) of this Code, whichever is higher:
“SEC. 195. Stamp Tax on Morigage
s, Pledges Provided, That when one of the contracting parties
and Deeds of Trust. — On every mort
gage or pledge is the Government, the tax herein imposed shall be
of lands, estate, or property, real or perso
nal, heritable based on the actual consideration:
or movable, whatsoever, where the
same shall be made
as a security for the payment of any
definite and
certain sum of money lent at the time “(a) When the consideration, or value received
or previously or contracted to be paid for such realty, after making
due and owing or forborne to be paid,
being payable,
and on any conveyance of land, estat proper allowance of any encumbrance, does not exceed
e, or property
whatsoever, in trust or to be sold, or otherwis One thousand pesos (P1,000), Fifteen pesos (P15.00).
e
converted into money which shall be
and intended
only as security, either by express stipu “(&) For each additional One thousand pesos
lation or
otherwise, there shall be collected a (P1,000), or fractional part thereof in excess of One
documentary
stamp tax at the following rates: thousand pesos (P1,000) of such consideration or
value, Fifteen pesos (P15.00).
“@) When the amount secured does not excee
d
Five thousand pesos (P5,000), Forty “Transfers exempt from donor’s tax under
pesos (P40.00).
Section 101(a) and (b) of this Code shall be exempt
““b) On each Five thousand pesos (P5,0 from the tax imposed under this Section.
00), or
fractional part thereof in excess of Five thous
and pesos
(P5,000), an additional tax of Twenty “When it appears that the amount of the
pesos (P20.00).
documentary stamp tax payable hereunder has been
“xxx.” reduced by an incorrect statement of the consideration
in any conveyance, deed, instrument or writing
subject to such tax the Commissioner, provincial or
 82 83

city Treasurer, or other revenue officer shall, from Three thousand pesos (P3,000); and for each month
the assessment rolls or other reliable source or fraction of a month in excess of six (6) months, an
of
information, assess the property of its true market additional tax of Three hundred pesos (P300) shall
value and collect the proper tax thereon.” be paid.”

SEC. 70. Section 197 of the NIRC, as amended, is hereby SEC. 71. Section 232 of the NIRC, as amended, is hereby
further amended to read as follows: further amended to read as follows:

“SEC. 197. Stamp Tax on Charter Parties and “SEC. 232. Keeping of Books of Accounts. —
Similar Instruments. — On every charter party,
contract or agreement for the charter of any ship, “) Corporations, Companies, Partnerships
vessel or streamer, or any letter or memorand or Persons Required to Keep Books of Accounts. —
um or
other writing between the captain, master or owner, All corporations, companies, partnerships or persons
or other person acting as agent of any ship, vessel required by law to pay internal revenue taxes shall
or
steamer, and any other person or persons for or keep and use relevant and appropriate set of
relating to the charter of any such ship, vessel bookkeeping records duly authorized by the Secretary
or
streamer, and on any renewal or transfer of such of Finance wherein all transactions and results of
charter, contract, agreement, letter ormemorand

TNE ATC
um, operations are shown and from which all taxes due

28 CRATE
there shall be collected a documentary stamp tax the Government may readily and accurately be
at
the following rates: ascertained and determined any time of the year:
Provided, That corporations, companies, partnerships
“(a) Ifthe registered gross tonnage of the ship, or persons whose gross annual sales, earnings,
vessel or steamer does not exceed one thous receipts or output exceed Three million pesos
and
(1,000) tons, and the duration of the charter or (P3,000,000), shall have their books of accounts
contract does not exceed six (6) months, One thousand audited and examined yearly by independent Certified
pesos (P1,000); and for each month or fraction Public Accountants and their income tax returns
of a
month in excess of six (6) months, an additional accompanied with a duly accomplished Account
tax
of One hundred pesos (P100) shall be paid. Information Form (AIF) which shall contain, among
others, information lifted from certified balance
“(o) Ifthe registered gross tonnage exceeds one sheets, profit and loss statements, schedules listing
thousand (1,000) tons and does not exceed income-producing properties and the corresponding
ten
thousand (10,000) tons, and the duration of the income therefrom and other relevant statements.
charter or contract does not exceed six (6) months
,
Two thousand pesos (P2,000); and for each month or
fraction of a month in excess of six (6) months, an
additional tax of Two hundred pesos (P200) shall be SEC. 72. Section 236 of the NIRC, as amended, is hereby
paid. further amended to read as follows:

“(©) Ifthe registered gross tonnage exceeds ten “SEC. 236. Registration Requirements. —
thousand (10,000) tons and the duration of
the
charter or contract does not exceed six (6) months “(A) Requirements. — x x x
,
«.
XXX
 84
85

“The registration shall contain the taxpayer’s “Provided, That any person taxed under
name, style, place of residence, business,
and such Section 24(A)(2)(b) and 24(A)(2)(c)(2)(a) of the NIRC
other information as may be required by the who elected to pay the eight percent (8%) tax on gross
Commissioner in the form prescribed therefor: sales or receipts shall not be allowed to avail of this
Provided, That the Commissioner shall simpli
fy the option.
business registration and tax compl
iance
requirements of self-employed individuals and/or
professionals. “For purposes of Title IV of this Code, any
person who has registered value-added tax as a tax
«, type in accordance with the provisions of Subsection
XXX
(C) hereof shall be referred to as a ‘VAT-registered
person’ who shall be assigned only one Taxpayer
“(G) Persons Required to Register for Identification Number (TIN).
Value-Added Tax. —
« ”
xXx.
“1 xxx
SEC. 73. Section 237 of the NIRG, as amended, is hereby

ene
“(a) His gross sales or receipts for the past further amended to read as follows:
twelve (12) months, other than those that are exemp
t
under Section 109(A) to (BB), have exceeded
Three “SEC. 237. Issuance of Receipts or Sales or
million pesos (P3,000,000); or
Commercial Invoices. —

“(b) There are reasonable grounds to believe

“(A) Issuance. — All persons subject to an
that his gross sales or receipts for the next
twelve internal revenue tax shall, at the point of each sale

Popes
(12) months, other than those that are exempt under
and transfer of merchandise or for services rendered
Section 109(A) to (BB), willexceed Three million pesos
valued at One hundred pesos (P100) or more, issue
(P3,000,000).
duly registered receipts or sale or commercial
«.
invoices, showing the date of transaction, quantity,
XXX unit cost and description of merchandise or nature
of service: Provided, however, That where the receipt
“@) Optional Registration for Value-Added is issued to cover payment made as rentals,
Tax of Exempt Person. — (1) Any person who commissions, compensation or fees, receipts or
is not
required to register for value-added tax under invoices shall be issued which shall show the name,
Subsection (G) hereof may elect to register for business style, if any, and address of the purchaser,
value-added tax by registering with the Reven customer or client: Provided, further, That where
ue
District Office that has jurisdiction over the head the purchaser is a VAT-registered person, in addition
office of that person, and paying the annua to the information herein required, the invoice or
l
registration fee in Subsection (B) hereof. receipt shall further show the Taxpayer Identification
Number (TIN) of the purchaser.
“@) Any person who elects to register under
this Subsection shall not be entitled to cancel
his
registration under Subsection (F)(2) for the next three
(3) years.
 86 87

“Within five (5) years from the effectivity of this of this Act and upon the establishment of a system
Act and upon the establishment of a system capabl capable of storing and processing the required data,
e
of storing and processing the required data, the the Bureau shall require taxpayers engaged in the
Bureau shall require taxpayers engaged in the export export of goods and services, and taxpayers under
of goods and services, taxpayers engaged in the jurisdiction of the Large Taxpayers Service to
e-commerce, and taxpayers under the jurisdiction of electronically report their sales data to the Bureau
the Large Taxpayers Service to issue electr through the use of electronic point of sales systems,
onic
receipts or sales or commercial invoices in lieu subject to rules and regulations to be issued by the
of
manual receipts or sales or commercial invoices, Secretary of Finance as recommended by the
subject to rules and regulations to be issued by
the Commissioner of Internal Revenue: Provided, That
Secretary of Finance upon recommendation of the machines, fiscal devices, and fiscal memory
the
Commissioner and after a public hearing shall have
devices shall be at the expense of the taxpayers.
been held for this purpose: Provided, That taxpayers
not covered by the mandate of this provision may
issue electronic receipts or, sales or commercial “The data processing of sales and purchase data
invoices, in lieu of manual receipts, and sales and shall comply with the provisions of Republic Act
commercial invoices. No. 10173, otherwise known as the “Data Privacy
Act” and Section 270 of the NIRC, as amended, on

FATALITIES perce
unlawful divulgence of taxpayer information and such
“The original of each receipt or invoice shall be other laws relating to the confidentiality of
issued to the purchaser, customer or client at the
information.
time the transaction is effected, who, if engaged
in
business or in the exercise of profession, shall
keep “The Bureau shall also establish policies, risk
and preserve the same in his place of business for
a management approaches, actions, trainings, and
period of three (3) years from the close of the taxable
year in which such invoice or receipt was issued, technologies to protect the cyber environment,
while organization, and data in compliance with Republic
the duplicate shall be kept and preserved by the issuer,
also in his place of business, for a like period: Act No. 10175 or the “Cybercrime Prevention Act of
Provided, That in case of electronic receipts or sales 2012.”
or commercial invoices, the digital records of the
same
shall be kept by the purchaser, customer or client SEC. 75. Section 249 of the NIRC, as amended, is hereby
and the issuer for the same period above stated. further amended to read as follows:

“The Commissioner may, in meritorious cases, “SEC. 249. Interest. —

exempt any person subject to internal revenue tax
from compliance with the provisions of this Section.” “(A) In General. — There shall be assessed
and collected on any unpaid amount of tax, interest
SEc.'74. Anew section designated as Section 237-A under at the rate of double the legal interest rate for loans
Chapter II, Title IX of the NIRC, as amended, is hereby or forbearance of any money in the absence of an
inserted
to read as follows: express stipulation as set by the Bangko Sentral ng
renee Seen

Pilipinas from the date prescribed for payment until

“SEC. 237-A. Electronic Sales Reporting the amount is fully paid: Provided, That in no case
System. — Within five (5) years from the effectivity shall the deficiency and the delinquency interest
prescribed under Subsections (B) and (C) hereof, be
s imposed simultaneously.
Sera
 88
89

“@) Deficiency Interest. — Any deficiency in

the tax due, of not less than Five hundred thousand pesos
as the term is defined in this Code,
shall be subject to the interest prescribed (P500,000) but not more than Ten million pesos
in (P10,000,000), and imprisonment of not less than six
Subsection (A) hereof, which interest shall be assess
ed (6) years but not more than ten (10) years:
and collected from the date prescribed for its paymen
t
until the full payment thereof, or upon issuance
of a
notice and demand by the Commissioner of Intern “@) =x
al
Revenue, whichever comes earlier.
“2) xxx:
“©) Delinquency Interest. ~ xxx
“(8) XX Xj or

“@) Printing of other fraudulent receipts or

SEC. 76. Section 254 of the NIRC, as
amended, is hereby
sales or commercial invoices.”
further amended to read as follows:
i SEC. 78. Anew section designated as Section 264-A under
“SEC. 254. Attempt to Evade or Defeat Tax. Chapter II, Title X of the NIRC, as amended, is hereby inserted
~ Any person who willfully attempts in any manne as follows:
r
to evade or defeat any tax imposed under this Code
or
the payment thereof shall, in addition to other “SEC. 264-A. Failure to Transmit Sales Data
penalties provided by law, upon conviction thereo Entered on Cash Register Machine (CRM)/Point of
f,
be punished with a fine of not less than Five hundr Sales System (POS) Machines to the BIR’s
ed
thousand pesos (P500,000) but not more than Electronic Sales Reporting System. — Any taxpayer
Ten
million pesos (P10,000,000), and imprisonment of required to transmit sales data to the Bureau’s
not
less than six (6) years but not more than ten (10) electronic sales reporting system but fails to do so,
years: Provided, That the conviction or acquittal shall pay, for each day of violation, a penalty
obtained under this Section shall not be a bar to amounting to one-tenth of one percent (1/10 of 1%)
the
filing of a civil suit for the collection of taxes.” of the annual net income as reflected in the
taxpayer's audited financial statement for the second
SEC. 77. Section 264 of the NIRC, as amended, year preceding the current taxable year for each day
is hereby
further amended to read as follows: of violation or Ten thousand pesos (P10,000),
whichever is higher: Provided, That should the
“SEC. 264. Failure or Refusal to Issue aggregate number of days of violation exceed
ATURE MRER SE NHCP Nn

Receipts or Sales or Commercial Invoices, Violations one hundred eighty (180) days within a taxable year,
Related to the Printing of such Receipts or Invoices an additional penalty of permanent closure of the
and Other Violations. — taxpayer shall be imposed: Provided, further, That
if the failure to transmit is due to force majeure or
ce

any causes beyond the control of the taxpayer the

“a) xxx
penalty shall not apply.”
peer RT STARR
eren

“(b) Any person who commits any of the acts

enumerated hereunder shall be penalized with a
fine
 90
91

SEC. 79. A new section designated

Chapter II, Title X of the NIRC, as amen
as Sect ion 264-B under
ded, is hereby inserted of unmarked fuel in commercial
to read as follows: domestic use or mercha quantity a for
ndise shall, upon convicti on,
suffer the penalties of:
“SEC. 264-B. Purchase, Use, Poss
ession, Sale
or Offer to Sell, Installment, “) For the first offense, a fine of Two million
Transfer,
Update,
Upgrade, Keeping or Mai five hundred thousand pesos (P2,500,000);
ntaining of Sales
Suppression Devices, — Any
person who shall
purchase, use, possess, sell “(2) For the second offense, a fine of Five million
or offer to sell, install,
transfer, update, upgrade, keep pesos (P5,000,000); and
, or maintain any
software or device designed
for, or is capable
of: (a) suppressing the creation
of electronic records “(8) For the third offense, a fine of Ten million
of sale transactions that a taxp pesos (P10,000,000) and revocation of license to engage
ayer is required to
keep under existing tax laws and/ in any trade or business.
or regulations; or
(b) modifying, hiding, or deleting
electronic records
of sales transactions and providin
g a ready means of “(b) Any person who causes the removal of the
access to them, shall be punished
by a fine of not less official fuel marking agent from marked fuel, and
than Five hundred thousand
pesos (P500,000) but the adulteration or dilution of fuel intended for sale
not more than Ten million peso
s (P10,000,000), and to the domestic market, or the knowing possession,
suffer imprisonment of not less
than two (2) years storage, transfer or offer for sale of fuel obtained as a
but not more than four (4) years:
Provided, That a result of such removal, adulteration or dilution shall
cumulati ve suppression of electronic
sales record in be penalized in the same manner and extent as
excess of the amount of Fift
y million pesos provided for in the preceding Subsection.
(P50,000,000) shall be considered
as economic sabotage
and shall be punished in the
maximum penalty
provided for under this provisio “© Any person who commits any of the acts
n.” enumerated hereunder shall, upon conviction, be
SEC. 80. Anew section designated as Section 265-A punished by a fine of not less than One million pesos
under 1,000,000) but no t tee thanwa Five million
Chapter II, Title
i X of the NIRC, as amended, is; hereby inserted
: (P5,000,0 00), and
Satine pesos Bon
fous suffermoredha
imprison
n ment
to read as follows: :
Gf) years buinnt eight of (8)not years:
less

Marking.
Pe “Q) Making, importing, selling, using or
— All offe
oe ee
nses relating to fuelemarking possessing fuel markers without express authority;
shall, in addition to the penaltie
s imposed under
Title X of the NIRC, as amended,
Section 1401 of
Republic Act No. 10863, othe “(2) Making, importing, selling, using or
rwise known as the
‘Customs Modernization and Tarif possessing counterfeit fuel markers;
f Act (CMTAY, and
other relevant laws, be punishab
le as follows:
“(8) Causing another person or entity to
“@) Any person who is found to be commit any of the two (2) preceeding acts; or
engaged in
the sale, trade, delivery, distribution ortransportation
 92
93

“(4) Causing the sale, distribution, supply or

transport of legitimately imported, in-tra SEC. 81. Section 269 of the NIRC, as amended, is hereby
nsit,
manufactured or procured controlled precursors further amended to read as follows:
and
essential chemicals, in diluted, mixtures or in
concentrated form, to any person or entity penali “SEC. 269. Violations
zed Committed by
in Subsections (a), (b), or (c) hereof, including Government Enforcement Officers. —xx x
but not
limited to, packaging, repackaging, labeli
ng,
relabeling or concealment of such transaction
through “(a) Xxx;
fraud, destruction of documents, fraudulent
use of
permits, misdeclaration, use of front compa
nies or “.
XXX
mail fraud.

“@) Any person who willfully inserts, places “(b) Having knowledge or information of any
, violation of this Code or of any fraud committed on
adds or attaches directly or indirectly, throu
gh any the revenues collectible by the Bureau of Internal
overt or covert act, whatever quantity
of any Revenue, failure to report such knowledge or
unmarked fuel, counterfeit additive
or chemical in information to their superior officer, or failure to
the person, house, effects, inventory,
or in the report as otherwise required by law;
immediate vicinity of an innocent individual
for the
purpose of implicating, incriminating or imput
ing the
commission of any violation of this Act “@ xxx:and
shall, upon
conviction, be punished by a fine of not
less than
Five million pesos (P5,000,000) but not more “@) Deliberate failure to act on the application
than
Ten million pesos (P 10,000,000), and for refunds within the prescribed period provided
suffer
imprisonment of not less than four (4) years under Section 112 of this Act.
but not
more than eight (8) years.
“Provided, That the provisions of the foregoing
“@) Any person whois authorized, licensed or paragraph notwithstanding, any internal revenue
accredited under this Act and its implementing rules officer for which a prima facie case of grave
to conduct fuel tests, who issues false or fraud misconduct has been established shall, after due notice
ulent
fuel test results knowingly, willfully or throu and hearing of the administrative case and subject to
gh gross
negligence, shall suffer the additional penal Civil Service Laws, be dismissed from the revenue
ty of
imprisonment ranging from one (1) year and service: Provided, further, That the term ‘grave
one (1)
day to two (2) years and six (6) months. misconduct’, as defined in the Civil Service Law, shall
include the issuance of fake letters of authority and
“The additional penalties of revocation of receipts, forgery of signature, usurpation of authority
the and habitual issuance of unreasonable assessments.”
license to practice his profession in case
of a
practitioner, and the closure of the fuel testin
g facility,
may also be imposed at the instance of the court. SEC. 82. Section 288 of the NIRC, as amended, is hereby
”
further amended to read as follows:

“SEC. 288. Disposition of Incremental

Revenue. —

“A) xxx
 94
95

“@) xxx
“©) A social welfare and benefits program
where qualified beneficiaries shall be provided with
“© xxx
a social benefits card to avail of the following social
benefits:
“O) xxx
“@ Unconditional cash transfer to households
“@ xxx in the first to seventh income deciles of the National
Household Targeting System for Poverty Reduction
“@) Incremental Revenues from the Tax (NHTS-PR), Pantawid Pamilyang Pilipino Program,
Reform for Acceleration and Inclusion (TRAI and the social pension program for a period of three
N). -
For five (5) years from the effectivity of this (3) years from the effectivity of this Act: Provided,
Act, the
yearly incremental revenues generated shall That the unconditional cash transfer shall be Two
be
automatically appropriated as follows: hundred pesos (P200.00) per month for the first year
and Three hundred pesos (P300.00) per month for
“@) Not more than seventy percent (70%) to the second year and third year, to be implemented by
fund infrastructure projects such as, but the Department of Social Welfare and Development
not limited
to, the Build, Build, Build Program and provid (DSWD);
e
infrastructure programs to address congestion
through mass transport and new road netwo “@) Fuel vouchers to qualified franchise holders
rks,
military infrastructure, sports facilities for of Public Utility Jeepneys (PUJs):
public
schools, and potable drinking water supply in
all
public places; and
“Gii) For minimum wage earners, unemployed,
and the poorest fifty percent (50%) of the population:
“@) Notmore than thirty percent (30%) to fund:
“(1) Fare discount from all public utility
“(a) Programs under Republic Act No. 10659, vehicles (except trucks for hire and school transport
otherwise known as ‘Sugarcane Industry Developmen
t service) in the amount equivalent to ten percent (10%)
Act of 2015’, to advance the self-reliance of
sugar of the authorized fare;
farmers that will increase productivity, provid
e
livelihood opportunities, develop alternative
farming “(2) Discounted purchase of National Food
systems and ultimately enhance farmers’
income; Authority (NFA) rice from accredited retail stores in
the amount equivalent to ten percent (10%) of the net
“() Social mitigating measures and retail prices, up to a maximum of twenty (20) kilos
investments in: (i) education, (ii) health, targe
ted per month; and
PT oe

nutrition, and anti-hunger programs for mothe

rs,
infants, and young children, (iii) social protection,
“(3) Free skills training under a program
EEE aAR ENNELY U Nem

(iv) employment, and (v) housing that prioritize and

directly benefit both the poor and near-poor implemented by the Technical Skills and Development
households; Authority (TESDA).

“Provided, That benefits or grants contained

in this Subsection shall not be availed in addition to
any other discounts.
Serta
 96

97
“@v) Other social benefits programs
to be
developed and implemented by the gover
nment. “At the end of five (5) years from the effectivity
of this Act, all earmarking provisions under
“Notwithstanding any provisions herein
to the Subsection (F), shall cease to exist and all incremental
contrary, the incremental revenues from
the tobacco revenues derived under this Act shall accrue to the
taxes under this Act shall be subject
to Section 3 of General Fund of the government.”
Republic Act No. 7171, otherwise know
n as ‘An Act
to Promote the Development of the
Farmer in SEC. 83. Reportorial Requirements. — The interagency
the Virginia Tobacco Producing Provi
nces’, and committee created and the concerned departments/agencies/
Section 8 of Republic Act No. 8240, other
wise known beneficiaries under Section 82 of this Act shall submit to the
as ‘An Act Amending Sections 138, 139,
140 and 142 President of the Senate of the Philippines, the Speaker of the
of the National Internal Revenue Code,
asAmended, House of Representatives, the Senate Committee on Finance and
and for Other Purposes’.
the House Committee on Appropriations a detailed report on the
expenditure of the amounts earmarked hereon copy furnished
“An interagency committee, chaired by
the the Chairpersons of the Committee on Ways and Means of both
Department of Budget and Management
(DBM) and Houses of Congress. The report shall likewise be posted on the
co-chaired by DOF and DSWD, and compr
ised of the official website of the agencies concerned,
National Economic and Development
Authority
(NEDA), Department of Transportation
(DOTy), SEC. 84. Implementing Rules and Regulations. — Within
Department of Education (DepEd), Depa
rtment of thirty (30) days from the effectivity of this Act, the Secretary of
Health (DOH), Department of Labor and Empl
oyment Finance shall, upon the recommendation of the Commissioner of
(DOLE), National Housing Authority (NHA)
, Sugar Internal Revenue, promulgate the necessary rules and regulations
Regulatory Administration (SRA), Department
of the for its effective implementation.
Interior and Local Government (DILG
), Department
of Energy (DOE), NFA, and TESDA, is
hereby created
to oversee the identification of qualified benef SEC. 85. Separability Clause. — If any provision of this
iciaries
and the implementation of these proje Ackis subsequently declared invalid or unconstitutional, the other
cts and
programs: Provided, That qualified benef provisions hereof which are not affected thereby shall remain in
iciaries
under Subsection (c) hereof shall be ident full force and effect.
ified using
the National ID System which may be
enacted by
Congress. SEC. 86. Repealing Clause. — The following laws or
provisions of laws are hereby repealed and the persons and/or
“Within sixty (60) days from the end of transactions affected herein are made subject to the VAT provision
the
three (3)-year period from the effectivity of of Title IV of the NIRC, as amended:
this Act,
the interagency committee and respe
ctive
implementing agencies for the above programs (a) Section 3 of Presidential Decree (P.D.)
shall
submit corresponding program assessment 1972, s. 1985, as amended, Sections 4 and 5 of
s to the
COCCTRP. The National Expenditure Progr Executive Order No. (E.0.) 1057, s. 1985, and
am from
2019 onwards shall provide line items that corre Section 4 of H.0. 1064, s. 1985, insofar as the VAT
spond
to the allocations mandated in the provisions tax exemption and tax credit is concerned;
above.
 98 99

(b) Section 10, insofar as VAT exemption is @) Section 21, insofar as VAT exemption is
concerned, of Republic Act No. (R.A.) 6807 or An Act concerned, of R.A. 7356 or the Law Creating the
Converting the Mati Community College into a State National Commission for Culture and the Arts;
College to be known as the Davao Oriental State
College of Science and Technology, Providing for a G) Section 7(f), insofar as VAT exemption is
Charter for this Purpose, Expanding its Curricular concerned, of R.A. 7371 or An Act Converting the
Offerings, Redirecting its Objectives, and Aklan Agricultural College into Aklan State College
Appropriating Funds Therefor; of Agriculture, and Appropriating Funds Therefor;

(ec) Sections 18 and 19, insofar as VAT (k) Section 12, second sentence, insofar as VAT
exemption is concerned, of R.A. 6847 or The Philippine exemption is concerned, of R.A. 7373 or An Act
Sports Commission Act; Establishing the Eastern Visayas Science High
School;
() Section 8(d), last paragraph, insofar as
VAT exemption is concerned, of R.A. 7278 or An Act @) Section 114), insofar as VAT exemption is
Amending Commonwealth Act No. 111, as Amended concerned, of R.A. 7605 or the Charter of the Philippine
by P.D. 460, entitled An Act to Create a Public State College of Aeronautics;
Corporation to be Known as the Boy Scouts of the
Philippines, and to Define its Powers and Purposes, (m) Section 126, insofar as VAT exemption is
by Strengthening the Volunteer and Democratic concerned, of R.A. 7653 or The New Central Bank
Character of the Boy Scouts of the Philippines and Act;
for Other Purposes;
(n) Section 14, insofar as VAT exemption is

ec tmccreameycetnesem ties taeiiion a:

@) Section 1, insofar as VAT exemption is concerned, of R.A. 7875 or the National Health
concerned, of R.A. 7291 or An Act Restoring the Tax Insurance Act of 1995;
and Duty Incentives Previously Enjoyed by the
Veterans Federation of the Philippines under Republic
(0.) Section 18, insofar as VAT exemption is
Act Numbered Twenty-Six Hundred and Forty;
concerned, and Section 18, last paragraph of R.A. 7884
or the National Dairy Development Act of 1995;
() Section 21, insofar as VAT exemption is
concerned, of R.A. 7306 or the Charter of the People’s
(p) Section 8, insofar as VAT exemption is
Television Network, Inc.; concerned, R.A. 8160 or An Act Granting the
University of the Philippines a Franchise to
(g) Section 14, insofar as VAT exemption is Construct, Install, Operate and Maintain for
concerned, of R.A. 7354 or the Postal Service Act of Educational and Other Related Purposes, Radio and
ee

1992; Television Broadcasting Stations Within the

University of the Philippines and in Such Other Areas
(h) Section 9(c), insofar as VAT exemption is Within the Scope of its Operation;
concerned, of R.A. 7355 or the Manlilikha ng Bayan
Act;
 100
101

(q) Sections 2 and 16, insofar as VAT exemption

is concerned, of R.A. 8282 or The Social Securi (y) Section 13, insofar as VAT exemption is
ty Act concerned, of R.A. 9083 or An Act Establishing the
of 1997;
Sta. Rosa Science and Technology High School in
Sta. Rosa, Laguna;
(1) Section 39, insofar as VAT exemption is
concerned, of R.A 8291 or The Government Servic
e (2) Section 7(c) and (f), insofar as VAT
Insurance System Act of 1997;
exemption is concerned, of R.A. 9138 or An Act
Establishing the Guimaras State College;
(8) Section 4(c) and (f), insofar as VAT
exemption is concerned, of R.A. 8292 or
the Higher (aa) Section 7(c), insofar as VAT exemption is
Education Modernization Act of 1997; . concerned, of R.A. 9141 or An Act Converting the
Negros Occidental Agricultural College into State
(t) Section 25, insofar as VAT exemption College to be known as the Negros Occidental
is
concerned, of R.A. 8492 or the National Museum Agricultural College:
Act
of 1998;

(bb) Section 16, insofar as VAT exemption is

(u) Section 3(h), insofar as VAT exemption is concerned, of R.A. 9497 or The Civil Aviation Authority
concerned, of R.A. 8502 or the Jewelry Industry Act of 2008;
Development Act of 1998;

(cc) Section 25(b) and (c), insofar as VAT

(v) Article 65, insofar as VAT exemption and exemption is concerned, and (d), insofar as VAT zero-
zero rating is concerned, of regional or area
rating is concerned, of R.A. 9500 or the University of
headquarters and zero-rating of the sale or lease of the Philippines Charter of 2008;
goods and property and the rendition of services
to
regional or area headquarters, and Article 67 , insofar
as VAT exemption is concerned, of R.A. 8756; (dd) Section 25(b) and (c), insofar as VAT
Provided, That existing RHQs and ROHQs enjoying exemption is concerned, and (d) insofar as VAT
VAT exemption and zero-rating at the time of the zero-rating is concerned, of R.A. 9519 or An Act
effectivity of TRAIN shall not be affected; Converting Mindanao Polytechnic State College into
a State University to be Known as the Mindanao
University of Science and Technology;
(w) Section 7(c), insofar as VAT exemption
is
concerned, of R.A. 9045 or An Act Creating
the (ee) Section 17(c), insofar as VAT exemption is
Batangas State University;
concerned, of R.A. 3591, otherwise known as the PDIC
Charter, as amended by Section 8 of R.A. 9576,
(x) Section 7(c), insofar as VAT exemption is
otherwise known as An Act Increasing the Maximum
concerned, of R.A. 9055 or An Act Converting the
Deposit Insurance Coverage, and in Connection
Aklan State College of Agriculture into the Aklan
Therewith, to Strengthen the Regulatory and
State University;
Administrative Authority, and Financial Capability
of the Philippine Deposit Insurance Corporation
(PDIC), Amending for this Purpose Republic Act
 102
103

Numbered Three Thousand Five Hundred

Ninety-One, as Amended, Otherwise Known as the (an) Section 35 (b)(c), with respect to VAT,
of
PDIC Charter, and for Other Purposes; R.A. 8550 or The Philippine Fisheries
Code of 1998;

(f) Sections 2 and 19, insofar as VAT (C0) Section 13, second paragraph, with
respect
exemption is concerned, of R.A. 9679 or An Act to VAT, of R.A. 10817 or the Philippine Halal
Export
Further Strengthening the Home Development Development and Promotion Act of 2016;
Mutual Fund, and for Other Purposes;
(pp) Section 9(3), (4), and (8), with respe
ct to
(gg) Section 23, insofar as VAT exemption is VAT, of R.A. 8479 or the Downstream Oil
Industry
concerned of the National Historical Commission of Deregulation Act of 1998;
the Philippines, of R.A. 10086, or the Strengthening
Peoples’ Nationalism Through Philippine History Act; (qq) Section 6(c) and (4), with respect to
VAT,
of R.A. 7103 or the Iron and Steel Indus
try Act;
(bh) Section 7(b) and (c), insofar as VAT
exemption is concerned, and (d), insofar as VAT (rr) Section 10, with respect to VAT, of
zero-rating is concerned, of R.A. 9647 or the Philippine R.A. 7718 or An Act Amending R.A. No. 6957;
Normal University Modernization Act of 2009;
(ss) Section 26(B)(3), with respect to VAT, of
Gi) Section 17, insofar as VAT exemption is R.A. 9275 or the Philippine Clean Water
Act of 2004;
concerned, of R.A. 7898, as amended by
R.A. 10349, Establishing the Revised AFP (tt) Section 20(d)(3) of R.A. 7279 or the Urban
Modernization Program and for Other Purposes; Development and Housing Act of 1992:

Gi) Section 56, insofar as VAT exemption is (uu) Section 20(d)(3) of R.A. 10884 or An
concerned, of R.A. 10801 or the Overseas Workers Act
Strengthening the Balanced Housing Devel
opment
Welfare Administration Act; Program, Amending for the Purpose R.A. 7279,
as
Amended, Otherwise Known as the
Urban
(kk) Section 9 (e)(2) and (j), with respect to VAT, Development and Housing Act of 1992;
of R.A. 7900 or the High-Value Crops Development
Act of 1995; (vv) Section 14, with respect to VAT,
of
R.A. 8423 or the Traditional and Alternative
Medicine
(l) Section 24(e) of R.A. 10068 or the Organic Act (TAMA) of 1997;
Agriculture Act of 2010;
(ww) Section 22(b) of R.A. 10747 or the Rare
(mm) Section 14(b), with respect to VAT, Diseases of the Philippines;
R.A. 7308 or the Seed Industry Development Act
of
1992; (xx) Section 45(a), (b), and (c), with respect to
VAT, of R.A. 9003 or the Ecological Solid
Waste
Management Act of 2000;
 104
105
(vy) Section 5(b), with respect to VAT, of
R.A. 10771 or the Philippine Green Jobs Act of 2016; (©) Section 4 of R.A. 1169 or An Act Providing
for Charity Sweepstakes, Horse Races and Lotteries:
@z) Section 6, with respect to VAT, of R.A.
7459 or the Investors and Inventions Incentives Act “SEC. 4. Holding of sweepstakes. — The Office
of the Philippines; shall hold charity horse race sweepstakes under such
regulations as shall be promulgated by the Board in
(aaa) Section 24, insofar as VAT exemption accordance with Republic Act Numbered Three
of foundations for scientific advancements is hundred and nine: Provided, however, That when
concerned, of R.A. 2067, as amended, or the Science the holding of a sweepstakes race to determine prizes
Act of 1958; and is impossible due to war, public calamity, or other
unforeseen or fortuitous event or when there is no
(bbb) Section 9, with respect to VAT, of sufficient number of horses to determine the major
R.A. 9511 or the National Grid Corporation of the prizes, the Board of Directors may determine the
Philippines Act. procedure to be followed in the distribution of prizes
in the most just, equitable and expeditious manner.
Provided, That the VAT obligations of government- The horse races and the sale of tickets in the said
owned and -controlled corporations, state universities sweepstakes shall be exempt from all taxes, except
and colleges, and other government instrumentalities that each ticket shall bear a twelve-centavo internal
whose VAT exemption has been repealed under this revenue stamp. The tickets shall be printed by the
Act shall be chargeable to the Tax Expenditure Fund Government and shall be considered government
(TEF) securities for the purposes of penalizing forgery or
provided for in the annual General
Appropriations Act: Provided, further, That VAT alteration.”
exemption, VAT zero-rating, and VAT credit granted
to state universities and colleges on their purchases d) Section 5 of R.A. 8756 or An Act Providing
and importations are hereby repealed and the for the Terms, Conditions and Licensing
transactions affected herein are made subject to the Requirements of Regional or Area Headquarters,
VAT provisions of Title IV of the NIRC, as amended. Regional Operating Headquarters, and Regional
Warehouses of Multinational Companies, Amending
for the Purpose Certain Provisions of Executive Order
Provided, That, with réspect to income tax,
No. 226 or The Omnibus Investments Code of 1987:
the following laws or provisions of laws are hereby
Provided, That existing Regional or Area
repealed or amended:
Headquarters, Regional Operating Headquarters, and
Regional Warehouses of Multinational Companies
(a) Section 33(A) of R.A. 7277, as amended by enjoying the preferential income tax rate at the time
R.A. 10754 or the Magna Carta for Persons with of the effectivity of the TRAIN shall not be affected;
Disability;
©) Section 2 of P.D. 1354, s. 1978 or Imposing
(b) Section 22(B) of R.A. 10165 or the Foster Final Income Tax on Subcontractors and Alien
Care Act of 2012; Employees of Service Contractors and Subcontractors
Engaged in Petroleum Operations in the Philippines
under Presidential Decree No. 87: Provided, That
 106

service contractors and subcontractors enjoying the

preferential income tax rate at the time of the
effectivity of the TRAIN shall not be affected; and

() 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.

SEc. 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.

Approved,

AN
Q (nana)
O“KOKO” 5
PIMENTELID + Dwi
PANTALEON D. Z,
President of the Senate Speaker of the Ho
of Representgtives

This Act which is a consolidation of House Bill No. 5636

and Senate Bill No. 1592 was passed by the House of
Representatives and the Senate on December 13, 2017.

LUTGARDO B. BARBO
Zo
CESAR STRAIT PAREJA
Secretary of the Senate Secretary General
House of Representatives

Approved: BEG 19 2017

REPUBLIC OF THE PHILIPPINES

PRRD 2016 - 006774

Office of the President

MALACANANG RECORDS OFFICE

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