Attorneys of the Philippines Legal News

Welcome to our legal news pages. Here is where we provide updates about what's happening in Philippines legal news, and publish helpful articles and tips for Pinoys researching legal matters.

Who Are Exempted From Filing Taxes?

Death is certain and so is tax. This is why it is important to know what should be taxed and what should not. The following are considered exempted from taxes:

  • All revenues, income, assets of non-stock and non-profit educational institutions used directly, actually and exclusively for all grants and educational purposes, donations, contributions, endowments used directly, exclusively for educational purposes as stated on Article 14 Section 4. 

  • Charitable institutions, convents, mosques, churches, non-profit lands, buildings, cemeteries and improvements exclusively, actually, and directly used for charitable, educational and religious purposes.

Basic Personal and Additional Tax Exemptions According to R.A 7167

(l) Personal exemptions allowable to individuals. — (1) Basic personal exemption. — For the purpose of determining the tax provided in Section 21(a) of this Title, there shall be allowed a basic personal exemption as follows:  

"For single individual or married individual judicially decreed as legally separated with no qualified dependents P9,000

"For head of a family P12,000

"For married individual P18,000

Provided, That husband and wife electing to compute their income tax separately shall be entitled to a personal exemption of P9,000 each." 

Sec. 2. The first paragraph of item (2)(A), paragraph (l) of Section 29 of the same Code, as amended, is hereby further amended to read as follows: 

"(2) Additional exemption  

"(A) Taxpayers with dependents. — A married individual or a head of family shall be allowed an additional exemption of Five thousand pesos (P5,000) for each dependent: Provided, That the total number of dependents for which additional exemptions may be claimed shall not exceed four dependents: Provided, further, That an additional exemption of One thousand pesos (P1,000) shall be allowed for each child who otherwise qualified as dependent prior to January 1, 1980: Provided, finally, That the additional exemption for dependents shall be claimed by only one of the spouses in the case of married individuals electing to compute their income tax liabilities separately.

For additional information about filing for tax exemption, visit Bureau of Internal Revenue's website

Get To Know The Types Of Taxes When Doing Business In The Philippines

Being familiar with business tax in the Philippines is an important part of starting a business. You don’t necessarily have to be an expert, but you need to gain some basic knowledge about the tax so mistakes in tax payment can be prevented. Some business owners leave this matter to their accountant or bookkeeper but when problems arise, they are the ones who are liable. Once you are aware of the business taxes in the Philippines, you are taking a great step to avoiding tax violations. 

Two kinds of taxes:

1. National Taxes – This type of tax refers to the tax you pay to the government. The tax is remitted to the Bureau of Internal Revenue (BIR). Some examples of national taxes are Value Added Tax (VAT), income tax, percentage tax, excise tax, capital gains tax and many others. 

2. Local Taxes – These are taxes that you pay through the local government units (LGU). These government units include cities, barangays, municipalities and provinces. Examples of local taxes include community tax, professional tax, amusement tax and other taxes that fall under the local taxes category. 

Business Taxes 

• Value Added Tax (VAT) - This type of business tax is considered an indirect tax. This is the reason it can be passed on to the buyer, lessee or transferee. This is collected from the seller when properties or goods are sold. Whether it is trade or business, Value Added Tax will be imposed. The amount you are going to pay will be based on the value you added to the product cost. Whether or not you earn net profit, you are still required to pay value added tax. However, when projected sales are deemed lower than required, the company is already considered exempted from paying the tax. 

• Excise Tax – This type of business tax is in additional to the value-added tax. This will be imposed for goods that are produced in the Philippines. Excise taxes are applied when these goods are intended for consumption or domestic sales. 

• Percentage Tax – When gross annual receipts and sales do not exceed the required amount, the percentage tax will be imposed on entities or individuals. Persons and entities are required to file percentage tax return not later than the 20th days following the end of each month. When a person subject to percentage taxes decides to retire from a business, the Revenue District Office must be notified within 20 days after the business closes.