Types of Taxes
1. National Taxes
2. Local Taxes
1. Capital Gains Tax
• Capital Gains Tax is a tax imposed on gains that may
have been realized by a seller from the sale, exchange,
or other disposition of capital assets located in the
Philippines, including pacto de retro sales (a sale with
a condition for repurchase) and other forms of
conditional sale.
2. Documentary Stamp Tax
• Documentary Stamp Tax is a tax on documents,
instruments, loan agreements, and papers evidencing
the acceptance, assignment, sale, or transfer of an
obligation, rights, or property incident thereto.
Documentary stamp taxes are evident on documents
like bank promissory notes, deed of sale, and deed of
assignment on transfer of shares of corporate stock
ownership.
3. Donor's Tax
• Donor's Tax is a tax on a donation or gift. It is also a
tax imposed on the gratuitous transfer of property
between two or more persons who are living at the
time of the transfer. It shall apply whether the transfer
is in trust or otherwise, whether the gift is direct or
indirect, and whether the property is real or personal,
tangible or intangible. A donor's tax is based on a
graduated schedule of tax rate.
4. Estate Tax
• Estate Tax is a tax on the right of the deceased person to
transmit his/her estate to lawful heirs and beneficiaries at
the time of death and on certain transfers which are made by
law as equivalent to testamentary disposition. It is not a tax
on property. It is a tax imposed on the privilege of
transmitting property upon the death of the owner. The
estate tax is based on the laws in force at the time of death
notwithstanding the postponement of the actual possession
or enjoyment of the estate by the beneficiary.
5. Income Tax
• Income Tax is a tax on all annual profits made from property
ownership, profession, trades or offices. It is also a tax on a
person's income, emoluments, profits and the like. Self-
employed individuals and corporate tax rate. taxpayers pay
quarterly income taxes from the first quarter to the third
quarter. And instead of filing quarterly income tax on the fourth
quarter, they file and pay their annual income tax return for the
taxable year. Individual income tax is based on graduated
schedule of tax rate, while corporate income tax in based on a
fixed rate prescribed by the tax law or special law.
6. Percentage Tax
• Percentage Tax is a business tax imposed on persons or
entities who sell or lease goods, properties, or services in
the course of trade or business whose gross annual sales
or receipts do not exceed the amount required to
register as VAT-registered taxpayers. Percentage taxes are
usually based on a fixed rate. They are usually pare
monthly by businesses or professionals. However, some
special industries and transactions pay percentage tax on
a quarterly basis.
7. Value-Added
• Value-Added Tax is a business tax imposed and collected from
the seller in the course of trade or business on every sale of
properties (real or personal), lease of goods or properties (real
or personal), or vendors of services. It is an indirect tax, thus, it
can be passed on to the buyer, causing the increase of prices of
most goods and services bought and paid by consumers. VAT
returns are usually filed and paid monthly and quarterly. The
latest law on Taxation is RA 9337 signed on May 24, 2005 by
President Gloria Arroyo is known as the "expanded value-
added tax" or the "E-VAT" law.
8. Excise Tax
•Excise Tax is a tax imposed on goods
manufactured or produced in the
Philippines for domestic sale or
consumption or any other disposition.
It is also imposed on things that are
imported.
9. Withholding Tax
• Withholding Tax on Compensation is the tax
withheld from individuals receiving purely
compensation income arising from an employer-
employee relationship. This tax is what employers
withheld in their employees' compensation
income and remit to the government through the
BIR or authorized accrediting agent.
10. Expanded Withholding Tax
• Expanded Withholding Tax is prescribed only for
certain payors like those withheld on rental
income and professional income. It is creditable
against the income tax due of the payee for the
taxable quarter year.
11. Final Withholding Tax
• Final Withholding Tax is a kind of withholding
tax which is prescribed only for certain payors
and is not creditable against the income tax due
of the payee for the taxable year. An example of
final withholding tax is the tax withheld by banks
on the interest income earned on bank deposits.
12. Withholding Tax
• Withholding Tax on Government Money
Payments is the withholding tax withheld by
government offices including government-
owned or -controlled corporations and local
government units, before making any payments
corporations, partnerships and/or associations.
