TAXABLE BASES IN APPLYING EXCISE TAX FOR AUTOMOBILES
- The BIR clarifies the provision of Section 5 of RMC No. 063-22 pertaining to the application of the three (3) primary taxable bases in applying the excise tax rates for automobiles RMC No. 32-2023
- Taxable basis in applying the excise tax rates for automobiles:
- Declared manufacturer’s or importer’s selling price, net of excise and VAT;
- Based on the 80% actual dealer’s price, net of excise and VAT;
- Based on the total cost of importation and expenses divided by 90% – applies in cases where the net importer’s selling price is lower than the cost of importation and expenses
DIVIDEND INCOME RECEIVED BY RESIDENT ALIEN IS SUBJECT TO 10% FINAL TAX.
- The Dividend income of the considered resident alien is subject to the 10% final tax, for the purposes of his income tax liability in the Philippines considering his residence is within the Philippines and he is not a citizen of the Philippines. (BIR Ruling No: OT-315-2022)
REVERSION OF PROPERTY FROM TRUSTEE TO TRUSTOR IS NOT SUBJECT TO INCOME TAX, VAT AND DOCUMENTARY STAMP TAX.
- The transfer or reversion of the Club floors, subject matter of the trust arrangement by the trustee to the trustors, is not subject to income tax and consequently to withholding tax and the corresponding documentary stamp tax.
- The properties subject matter of the trust arrangement between the trustee and the trustors are not held primarily for sale to customers or for lease in the ordinary course of trustee’s business, since the trustee merely holds or manages the said properties for the benefit of the trustor-beneficiary. Consequently, the transfer or return by the trustee to the trustor-beneficiary of the properties held in trust is not subject to 12% VAT.
- The transfer or return by the trustee to the trustor-beneficiary of the properties which are founded solely on the termination of the trust agreement is not subject to donor’s tax. (BIR Ruling No: OT-316-2022)
JOINT VENTURE FORMED FOR THE PURPOSE OF UNDERTAKING CONSTRUCTION PROJECTS IS NOT SUBJECT TO INCOME TAX.
- Joint ventures or consortium formed for the purpose of undertaking construction projects or engaging in petroleum, coal, geothermal and other energy operations pursuant to an operating or consortium agreement under a service contract with the government is not taxable as a corporation for complying with the conditions:
- The Joint Venture is for the undertaking of construction project;
- The Joint Venture involves joining or pooling of resources by licensed local contractors (licensed as general contractor by the PCAB);
- The local contractors are engaged in construction business;
- The Joint Venture itself is duly licensed by the PCAB; and therefore not subject to the corporate income tax.
- Moreover, the gross payments are likewise not subject to the two percent (2%) creditable withholding tax, and being exempt from corporate income tax, is not required to file quarterly and final adjustment returns.
- However, the co-ventures are separately subject to the regular corporate income tax imposed on their taxable income during each taxable year derived by the constructions project and the net income of the co-ventures derived from is subject to the creditable withholding tax imposed.
- Finally, the co-ventures are required to enroll themselves to the Bureau of Internal Revenue’s Electronic Filing and Payment System (eFPS). The enrollment should be done at the Revenue District Office (RDO) where they are registered as taxpayers. (BIR Ruling No: JV-317-2022)