TRAIN Law

Title

Section 1. Title. - This Act shall be known as the "Tax Reform for Acceleration and Inclusion (TRAIN)".

Declaration of Policy

Section 2. Declaration of Policy. - It is hereby declared the policy of the State:

(a) To enhance the progressivity of the tax system through the rationalization of the Philippine internal revenue tax system, thereby promoting sustainable and inclusive economic growth;

(b) To provide, as much as possible, an equitable relief to a greater number of taxpayers and their families in order to improve levels of disposable income and increase economic activity; and

(c) To ensure that the government is able to provide for the needs of those under its jurisdiction and care through the provision of better infrastructure, health, education, jobs, and social protection for the people.

Power of the Commissioner to Obtain Information, and to Summon, Examine, and Take Testimony of Persons

Sec. 5. Power of the Commissioner to Obtain Information, and to Summon, Examine, and Take Testimony of Persons. - In ascertaining the correctness of any return, or in making a return when none has been made, or in determining the liability of any person for any internal revenue tax, or in collecting any such liability, or in evaluating tax compliance, the Commissioner is authorized:

"(A) x x x

"(B) To obtain on a regular basis from any person other than the person whose internal revenue tax liability is subject to audit or investigation, or from any office or officer of the national and local governments, government agencies and instrumentalities, including the Bangko Sentral ng Pilipinas and government-owned or -controlled corporations, any information such as, but not limited to, costs and volume of production, receipts or sales and gross incomes of taxpayers, and the names, addresses, and financial statements of corporations, mutual fund companies, insurance companies, regional operating headquarters of multinational companies, joint accounts, associations, joint ventures or consortia and registered partnerships, and their members: Provided, That the Cooperative Development Authority shall submit to the Bureau a tax incentive report, which shall include information on the income tax, value-added tax, and other tax incentives availed of by cooperatives registered and enjoying incentives under Republic Act No. 6938, as amended: Provided, further, That the information submitted by the Cooperative Development Authority to the Bureau shall be submitted to the Department of Finance and shall be included in the database created under Republic Act No. 10708, otherwise known as 'The Tax Incentives Management and Transparency Act (TIMTA)'.

"x x x."

Section 4. Section 6 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 6. Power of the Commissioner to Make Assessments and Prescribe Additional Requirements for Tax Administration and Enforcement -

Rates of Income Tax on Individual Citizen and Individual, Resident Alien of the Philippines

Sec. 24(A)(1) An income tax is hereby imposed:

"(a) On the taxable income defined in Section 31 of this Code, other than income subject to tax under Subsections (B), (C), and (D) of this Section, derived for each taxable year from all sources within and without the Philippines by every individual citizen of the Philippines residing therein;

"(b) On the taxable income defined in Section 31 of this Code, other than income subject to tax under Subsections (B), (C), and (D) of this Section, derived for each taxable year from all sources within the Philippines by an individual citizen of the Philippines who is residing outside of the Philippines including overseas contract workers referred to in Subsection (C) of Section 23 hereof; and

"(c) On the taxable income defined in Section 31 of this Code, other than income subject to tax under Subsections (B), (C), and (D) of this Section, derived for each taxable year from all sources within the Philippines by an individual alien who is a resident of the Philippines.

Rates of Tax on Taxable Income of Individuals

Sec. 24(A)(2) The tax shall be computed in accordance with and at the rates established in the following schedule:

"(a) Tax Schedule Effective January 1, 2018 until December 31, 2022:

"Not over ₱250,000

0%

"Over ₱250,000 but not over ₱400,000

20% of the excess over ₱250,000

"Over ₱400,000 but not over ₱800,000

₱30,000 + 25% of the excess over ₱400,000

"Over ₱800,000 but not over ₱2,000,000

₱130,000 + 30% of the excess over ₱800,000

"Over ₱2,000,000 but not over ₱5,000,000

₱490,000 + 32% of the excess over ₱2,000,000

"Over ₱8,000,000

₱2,410,000 + 35% of the excess over ₱8,000,000

"Tax Schedule Effective January 1, 2023 and onwards:

"Not over ₱250,000

0%

Tax Schedule Effective January 1, 2023 and onwards

Tax Schedule Effective January 1, 2023 and onwards:

"Not over ₱250,000

0%

"Over ₱250,000 but not over ₱400,000

15% of the excess over ₱250,000

"Over ₱400,000 but not over ₱800,000

₱22,500 + 20% of the excess over ₱400,000

"Over ₱800,000 but not over ₱2,000,000

₱102,500 + 25% of the excess over ₱800,000

"Over ₱2,000,000 but not over ₱8,000,000

₱402,500 + 30% of the excess over ₱2,000,000

"Over ₱8,000,000

₱2,202,500 + 35% of the excess over ₱8,000,000

Rate of Tax on Income of Purely Self-employed Individuals and/or Professionals Whose Gross Sales or Gross Receipts and Other Non-operating Income Does Not Exceed the Value-added Tax (VAT) Threshold

Sec. (b) Rate of Tax on Income of "Purely Self-employed Individuals and/ or Professionals Whose Gross Sales or Gross Receipts and Other Non-operating Income Does Not Exceed the Value-added Tax (VAT) Threshold as Provided in Section 109(BB)." Self-employed individuals and/or professionals shall have the option to avail of an eight percent (8%) tax on gross sales or gross receipts and other non-operating income in excess of Two hundred fifty thousand pesos (₱250,000) in lieu of the graduated income tax rates under Subsection (A)(2)(a) of this Section and the percentage tax under Section 116 of this Code.

Rate of Tax for Mixed Income Earners

Sec. (c) Rate of Tax for Mixed Income Earners.— Taxpayers earning both compensation income and income from business or practice of profession shall be subject to the following taxes:

"(1) All Income from Compensation — The rates prescribed under Subsection (A)(2)(a) of this Section.

"(2) All Income from Business or Practice of Profession —

"(a) If Total Gross Sales and/or Gross Receipts and Other Non-operating Income Do Not Exceed the VAT Threshold as Provided in Section 109(BB) of this Code.— The rates prescribed under Subsection (A)(2)(a) of this Section on taxable income, or eight percent (8%) income tax based on gross sales or gross receipts and other non-operating income in lieu of the graduated income tax rates under Subsection (A)(2)(a) of this Section and the percentage tax under Section 116 of this Code.

"(b) If Total Gross Sales and/or Gross Receipts and Other Non-operating Income Exceeds the VAT Threshold as Provided in Section 109(BB) of this Code.— The rates prescribed under Subsection (A)(2)(a) of this Section.

Rate of Tax on Certain Passive Income

Sec. (B) Rate of Tax on Certain Passive Income.—

"(1) Interests, Royalties, Prizes, and Other Winnings.— A final tax at the rate of twenty percent (20%) is hereby imposed upon the amount of interest from any currency bank deposit and yield or any other monetary benefit from deposit substitutes and from trust funds and. similar arrangements; royalties, except on books, as well as other literary works and musical compositions, which shall be imposed a final tax of ten percent (10%); prizes (except prizes amounting to Ten thousand pesos (₱10,000) or less which shall be subject to tax under Subsection (A) of Section 24; and other winnings (except winnings amounting to Ten thousand pesos (₱10,000) or less from Philippine Charity Sweepstakes and Lotto which shall be exempt), derived from sources within the Philippines: Provided,

Interest from Deposits and Yield or any other Monetary Benefit from Deposit Substitutes and from Trust Funds and Similar Arrangements, and Royalties

Sec. 27(D)(1) Interest from Deposits and Yield or any other Monetary Benefit from Deposit Substitutes and from Trust Funds and Similar Arrangements, and Royalties. - A final tax at the rate of twenty percent (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 trust funds and similar arrangements received by domestic corporations, and royalties, derived from sources within the Philippines: Provided, however, That interest income derived by a domestic corporation from a depository bank under the expanded foreign currency deposit system shall be subject to a final income tax at the rate of fifteen percent (15%) of such interest income.

Capital Gains from the Sale of Shares of Stock Not Traded in the Stock Exchange

Sec. 27(D)(2) Capital Gains from the Sale of Shares of Stock Not Traded in the Stock Exchange.

Individual Returns

Sec. 51. Individual Returns -

"(A) x x x

"(1) x x x

"x x x

"(2) The following individuals shall not be required to file an income tax return:

"(a) An individual whose taxable income does not exceed Two hundred fifty thousand pesos (₱250,000) under Section 24(A)(2)(a): Provided, That a citizen of the Philippines and any alien individual engaged in business or practice of profession within the Philippines shall file an income tax return, regardless of the amount of gross income;

"x x x

"(5) The income tax return (ITR) shall consist of a maximum of four (4) pages in paper form or electronic form, and shall only contain the following information:

"(A) Personal profile and information;

"(B) Total gross sales, receipts or income from compensation for services rendered, conduct of trade or business or the exercise of a profession, except income subject to final tax as provided under this Code;

"(C) Allowable deductions under this Code;

"(D) Taxable income as defined in Section 31 of this Code; and

"(E) Income tax due and payable.

"x x x."

Substituted Filing of Income Tax Returns by Employees Receiving Purely Compensation Income

Sec. 51-A. Substituted Filing of Income Tax Returns by Employees Receiving Purely Compensation Income

Section 15. Section 52 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 52. Corporation Returns -

"(A) Requirements. - Every corporation 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 accurate quarterly income tax return and final or adjustment return in accordance with the provisions of Chapter XII of this Title. The income tax return shall consist of a maximum of four (4) pages in paper form or electronic form, be filed by the president, vice president or other principal officer, shall be sworn to by such officer and by the treasurer or assistant treasurer, and shall only contain the following information:

"(1) Corporate profile and information;

"(2) Gross sales, receipts or income from services rendered, or conduct of trade or business, except income subject to final tax as provided under this Code;

"(3) Allowable deductions under this Code; "(4) Taxable income as defined in Section 31 of this Code; and

"(5) Income tax due and payable.

Provided, That the foregoing provisions shall not affect the implementation of Republic Act No. 10708 or TIMTA.

"x x x."

Section 16. Section 56 of the NIRC, as amended. is hereby further amended to read as follows:

"Sec. 56. Payment and Assessment of Income Tax for Individuals and Corporations -

"(A) Payment of Tax -

"(1) x x -

"(2) Installment of Payment. - When a tax due is in excess of Two thousand pesos (₱2,000), the taxpayer other than a corporation, may elect to pay the tax in two (2) equal installments, in which case, the first installment shall be paid at the time the return is filed and the second installment on or before October 15 following the close of the calendar year, if any installment is not paid on or before the date fixed for its payment, the whole amount of the tax unpaid becomes due and payable together with the delinquency penalties."

Section 17. Section 57 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 57. Withholding of Tax at Source. -

"(A) x x -

"(B) Withholding of Creditable Tax at Source. - The Secretary of Finance may, upon the recommendation of the Commissioner, require the withholding of a tax on the items of income payable to natural or juridical persons, residing in the Philippines, by payor-corporation/persons as provided for by law, at the rate of not less than one percent (1%) but not more than thirty-two percent (32%) thereof, which shall be credited against the income tax liability of the taxpayer for the taxable year: Provided, That, beginning January 1, 2019, the rate of withholding shall not be less than one percent (1%) but not more than fifteen percent (15%) of the income payment.

"(C) x x - "

Section 18. Section 58 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 58. Return and Payment of Taxes Withheld at Source. -

"(A) x x x

"x x x

"The return for final and creditable withholding taxes shall be filed and the payment made not later than the last day of the month following the close of the quarter during which withholding was made."

Section 19. Section 62 of the NIRC, as amended, is hereby repealed.

Section 20. Section 74 of the NIRC, as amended. is hereby further amended to read as follows:

"Sec. 74. Declaration of Income Tax for Individuals. -

"(A) In General

Declaration of Income Tax for Individuals

Sec. 74. Declaration of Income Tax for Individuals. - "(A) In General - Except as otherwise provided in this Section, every individual subject to income tax under Sections 24 and 25(A) of this Title, who is receiving self-employment income, whether it constitutes the sole source of his income or in combination with salaries, wages and other fixed or determinable income, shall make and file a declaration of his estimated income for the current taxable year on or before May 15 of the same taxable year. x x x "(B) Return and Payment of Estimated Income Tax by Individuals - The amount of estimated income as defined in Subsection (C) with respect to which a declaration is required under Subsection (A) shall be paid in four (4) installments. The first installment shall be paid at the time of declaration and the second and third shall be paid on August 15 and November 15 of the current year, respectively. The fourth installment shall be paid on or before May 15 of the following calendar year when the final adjusted income tax return is due to be filed. "(C) x x -"

Income Tax Collected at Source

Sec. 79. Income Tax Collected at Source. - "x x x "(C) Refunds or Credits. - "(1) Employer. - x x x "(2) Employees. - x x x "x x x "(D) Withholding on Basis of Average Wages. - x x x "(1) x x x "(2) x x x; and "(3) x x x. "(E) Nonresident Aliens - x x x "(F) Year-end Adjustment. - x x x."

Rate of Estate Tax

Sec. 84. Rate of Estate Tax. - There shall be levied, assessed, collected and paid upon the transfer of the net estate as determined in accordance with Sections 85 and 86 of every decedent, whether resident or nonresident of the Philippines, a tax at the rate of six percent (6%) based on the value of such net estate.

Computation of Net Estate

Sec. 86. Computation of Net Estate. For the purpose of the tax imposed in this Chapter, the value of the net estate shall be determined: "(A) Deductions Allowed to the Estate of a Citizen or a Resident - In the case of a citizen or resident of the Philippines, by deducting from the value of the gross estate– "(1) Standard Deduction - An amount equivalent to Five million pesos (₱5,000,000). "(2) For claims against the estate: Provided, That at the time the indebtedness was incurred the debt instrument was duly notarized and, if the loan was contracted within three (3) years before the death of the decedent, the administrator or executor shall submit a statement showing the disposition of the proceeds of the loan. "(3) For claims of the deceased against insolvent persons where the value of decedent's interest therein is included in the value of the gross estate.

Property Previously Taxed

"(5) Property Previously Taxed. - An amount equal to the value specified below of any property forming part of the gross estate situated in the Philippines of any person who died within five (5) years prior to the death of the decedent, or transferred to the decedent by gift within five (5) years prior to his death, where such property can be identified as having been received by the decedent from the donor by gift, or from such prior decedent by gift, bequest, devise or inheritance, or which can be identified as having been acquired in exchange for property so received:

"One hundred percent (100%) of the value, if the prior decedent died within one (1) year prior to the death of the decedent, or if the property was transferred to him by gift, within the same period prior to his death;

"Eighty percent (80%) of the value, if the prior decedent died more than one (1) year but not more than two (2) years prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death;

"Sixty percent (60%) of the value, if the prior decedent died more than two (2) years but not more than three (3) years prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death;

"Forty percent (40%) of the value, if the prior decedent died more than three (3) years but not more than four (4) years prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death; and

"Twenty percent (20%) of the value, if the prior decedent died more than four (4) years but not more than five (5) years prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death.

"These deductions shall be allowed only where a donor's tax, or estate tax imposed under this Title was finally determined and paid by or on behalf of such donor, or the estate of such prior decedent, as the case may be, and only in the amount finally determined as the value of such property in determining the value of the gift, or the gross estate of such prior decedent, and only to the extent that the value of such property is included in the decedent's gross estate, and only if in determining the value of the estate of the prior decedent, no deduction was allowable under paragraph (5) in respect of the property or properties given in exchange therefor. Where a deduction was allowed of any mortgage or other lien in determining the donor's tax, or the estate tax of the prior decedent, which was paid in whole or in part prior to the decedent's death, then the deduction allowable under said Subsection shall be reduced by the amount so paid. Such deduction allowable shall be reduced by an amount which bears the same ratio to the amounts allowed as deductions under paragraphs (2), (3), (4), and (6) of this Subsection as the amount otherwise deductible under said paragraph (5) bears to the value of the decedent's estate. Where the property referred to consists of two or more items, the aggregate value of such items shall be used for the purpose of computing the deduction.

Transfers for Public Use

"(6) Transfers for Public Use - The amount of all bequests, legacies, devises or transfers to or for the use of the Government of the Republic of the Philippines, or any political subdivision thereof for exclusively public purposes.

The Family Home

"(7) The Family Home. - An amount equivalent to the current fair market value of the decedent's family home: Provided,

Estate Tax Returns

Sec. 90. Estate Tax Returns. -

"(A) Requirements. - In all cases of transfers subject to the tax imposed herein, or regardless of the gross value of the estate, where the said estate consists of registered or registrable property such as real property, motor vehicle, shares of stock or other 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 name of the transferee, the executor, or the administrator, or any of the legal heirs, as the case may be, shall file a return under oath in duplicate, setting forth:

"(1) x x x

"(2) x x x

"(3) Such part of such information as may at the time be ascertainable and such supplemental data as may be necessary to establish the correct taxes.

" Provided, however, That estate tax returns showing a gross value exceeding Five million pesos (₱5,000,000) shall be supported with a statement duly certified to by a Certified Public Accountant containing the following:

"x x x

"(B) Time for Filing

Section 26. Section 91 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 91. Payment of Tax. -

"(A) Time of Payment - x x x

"(B) Extension of Time - x x x

"x x x

"(C) Payment by Installment - In case the available cash of the estate is insufficient to pay the total estate tax due, payment by installment shall be allowed within two (2) years from the statutory date for its payment without civil penalty and interest.

"(D) Liability for Payment - x x x

"x x x

Section 27. Section 97 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 97. Payment of Tax Antecedent to the Transfer of Shares, Bonds or Rights - x x x.

"If a bank has knowledge of the death of a person, who maintained a bank deposit account alone, or jointly with another, it shall allow any withdrawal from the said deposit account, subject to a final withholding tax of six percent (6%). For this purpose, all withdrawal slips shall contain a statement to the effect that all of the joint depositors are still living at the time of withdrawal by any one of the joint depositors and such statement shall be under oath by the said depositors."

Section 28. Section 99 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 99. Rate of Tax Payable by Donor -

"(A) In General. - The tax for each calendar year shall be six percent (6%) computed on the basis of the total gifts in excess of Two hundred fifty thousand pesos (₱250,000) exempt gift made during the calendar year.

"(B) Any contribution in cash or in kind to any candidate, political party or coalition of parties for campaign purposes shall be governed by the Election Code, as amended."

Section 29. Section 100 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 100. Transfer for Less Than Adequate and Full Consideration - Where property, other than real property referred to in Section 24(D), is transferred for less than an adequate and full consideration in money or money's worth, then the amount by which the fair market value of the property exceeded the value of the consideration shall, for the purpose of the tax imposed by this Chapter, be deemed a gift, and shall be included in computing the amount of gifts made during the calendar year: Provided, however, That a sale, exchange, or other transfer of property made in the ordinary course of business (a transaction which is a bona fide, at arm's length, and free from any donative intent), will be considered as made for an adequate and full consideration in money or money's worth."

Section 30. Section 101 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 101. Exemption of Certain Gifts - The following gifts or donations shall be exempt from the tax provided for in this Chapter:

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

"(1) Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government; and

"(2) Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation, institution, accredited nongovernment organization, trust or philanthropic organization or research institution or organization: Provided,

Section 31. Section 106 of the NIRC, as amended, is hereby further amended to read as follows:

Value-added Tax on Sale of Goods or Properties

Sec. 106. Value-added Tax on Sale of Goods or Properties -

"(A) Rate and Base of Tax - There shall be levied, assessed and collected on every sale, barter or exchange of goods or properties, a value-added tax equivalent to twelve percent (12%) of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged, such tax to be paid by the seller or transferor.

"(1) x x x

"(2) The following sales by VAT-registered persons shall be subject to zero percent (0%) rate:

"(a) Export Sales - The term "export sales" means:

"(1) The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported and paid for in acceptable foreign currency or its equivalent in goods or services, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);

"(2) Sale and delivery of goods to:

"(i) Registered enterprises within a separate customs territory as provided under special laws; and

"(ii) Registered enterprises within tourism enterprise zones as declared by the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) subject to the provisions under Republic Act No. 9593 or The Tourism Act of 2009.

"(3) Sale of raw materials or packaging materials to a nonresident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods and paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);

"(4) Sale of raw materials or packaging materials to export-oriented enterprise whose export sales exceed seventy percent (70%) of total annual production;

"(5) Those considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investment Code of 1987, and other special laws; and

"(6) The sale of goods, supplies, equipment and fuel to persons engaged in international shipping or international air transport operations: Provided, That the goods, supplies, equipment and fuel shall be used for international shipping or air transport operations.

"Provided, That subparagraphs (3), (4), and (5) hereof shall be subject to the twelve percent (12%) value-added tax and no longer be considered export sales subject to zero percent (0%) VAT rate upon satisfaction of the following conditions:

"(1) The successful establishment and implementation of an enhanced VAT refund system that grants refunds of creditable input tax within ninety (90) days from the filing of the VAT refund application with the Bureau: Provided,

Section 32. Section 107 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 107. Value-added Tax on Importation of Goods. - "(A) In General. - There shall be levied, assessed and collected on every importation of goods a value-added tax equivalent to twelve percent (12%) based on the total value used by the Bureau of Customs in determining tariff and customs duties, plus customs duties, excise taxes, if any, and other charges, such tax to be paid by the importer prior to the release of such goods from customs custody: Provided, That where the customs duties are determined on the basis of the quantity or volume of the goods, the value-added tax shall be based on the landed cost plus excise taxes, if any.

"(B) Transfer of Goods by Tax-exempt Persons. - x x x."

Section 33. Section 108 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 108. Value-added Tax on Sale of Services and Use or Lease of Properties.

"(A) Rate and Base of Tax. - There shall be levied, assessed and collected, a value-added tax equivalent to twelve percent (12%) of gross receipts derived from the sale or exchange of services, including the use or lease of properties.

Transactions Subject to Zero Percent (0%) Rate

Sec. 108(B) Transactions Subject to Zero Percent (0%) Rate. - The following services performed in the Philippines by VAT registered persons shall be subject to zero percent (0%) rate:

"(1) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);

"(2) Services other than those mentioned in the preceding paragraph, rendered to a person engaged in business conducted outside the Philippines or to a nonresident person not engaged in business who is outside the Philippines when the services are performed, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);

"(3) Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate;

Exempt Transactions

Sec. 109. Exempt Transactions. - (1) Subject to the provisions of Subsection (2) hereof, the following transactions shall be exempt from the value-added tax:

"(A) x x x

"(B) x x x

"(C) x x x

"(D) Importation of professional instruments and implements, tools of trade, occupation or employment, wearing apparel, domestic animals, and personal and household effects belonging to persons coming to settle in the Philippines or Filipinos or their families and descendants who are now residents or citizens of other countries, such parties hereinafter referred to as overseas Filipinos, in quantities and of the class suitable to the profession, rank or position of the persons importing said items, for their own use and not for barter or sale, accompanying such persons, or arriving within a reasonable time: Provided,

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

"Sec. 110. Tax Credits. - "(A) Creditable Input Tax. - "(1) x x x

"(2) x x x

"(a) x x x

"(b) x x x

" Provided, That the input tax on goods purchased or imported in a calendar month for use in trade or business for which deduction for depreciation is allowed under this Code shall be spread evenly over the month of acquisition and the fifty-nine (59) succeeding months if the aggregate acquisition cost for such goods, excluding the VAT component thereof, exceeds One million pesos (₱1,000,000): Provided, however, That if the estimated useful life of the capital good is less than five (5) years, as used for depreciation purposes, then the input VAT shall be spread over such a shorter period: Provided, further, That the amortization of the input VAT shall only be allowed until December 31, 2021 after which taxpayers with unutilized input VAT on capital goods purchased or imported shall be allowed to apply the same as scheduled until fully utilized: Provided, finally, That in the case of purchase of services, lease or use of properties, the input tax shall be creditable to the purchaser, lessee or licensee upon payment of the compensation, rental, royalty or fee.

"x x x."

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

"Sec. 112. Refunds or Tax Credits of Input Tax -

"(A) x x x

"(B) x x x

"(C) Period within which Refund of Input Taxes shall be Made. In proper cases, the Commissioner shall grant a refund for creditable input taxes within ninety (90) days from the date of submission of the official receipts or invoices and other documents in support of the application filed in accordance with Subsections (A) and (B) hereof: Provided,

Return and Payment of Value-added Tax

Sec. 114. Return and Payment of Value-added Tax. - "(A) In General. - Every person liable to pay the value-added tax imposed under this Title shall file a quarterly return of the amount of his gross sales or receipts within twenty-five (25) days following the close of each taxable quarter prescribed for each taxpayer: Provided, however, That VAT-registered persons shall pay the value-added tax on a monthly basis: Provided, finally, That beginning January 1, 2023, the filing and payment required under this Subsection shall be done within twenty-five (25) days following the close of each taxable quarter.

Withholding of Value-added Tax

Sec. 114(C). Withholding of Value-added Tax. - The Government or any of its political subdivisions, instrumentalities or agencies, including government-owned or -controlled corporations (GOCCs) shall, before making payment on account of each purchase of goods and services which are subject to the value-added tax imposed in Sections 106 and 108 of this Code, deduct and withhold the value-added tax imposed in Sections 106 and 108 of this Code, deduct and withhold a final value-added tax at the rate of five percent (5%) of the gross payment thereof: Provided, That beginning January 1, 2021, the VAT witholding system under this Subsection shall shift from final to a creditable system: Provided, further, That the payment for lease or use of properties or property rights to nonresident owners shall be subject to twelve percent (12%) withholding tax at the time of payment: Provided, finally, That payments for purchases of goods and services arising from projects funded by Official Development Assistance (ODA) as defined under Republic Act No. 8182, otherwise known as the 'Official Development Assistance Act of 1996', as amended, shall not be subject to the final withholding tax system as imposed in this Subsection. For purposes of this Section, the payor or person in control of the payment shall be considered as the withholding agent.

Tax on Persons Exempt from Value-added Tax (VAT)

Sec. 116. Tax on Persons Exempt from Value-added Tax (VAT). - Any person whose sales or receipts are exempt under Section 109(BB) of this Code from the payment of value-added tax and who is not a VAT-registered person shall pay a tax equivalent to three percent (3%) of his gross quarterly sales or receipts: Provided, That cooperatives, and beginning January 1, 2019, self-employed and professionals with total annual gross sales and/or gross receipts not exceeding Five hundred thousand pesos (₱500,000) shall be exempt from the three percent (3%) gross receipts tax herein imposed.

Tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded through the Local Stock Exchange or through Initial Public Offering

Sec. 127. Tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded through the Local Stock Exchange or through Initial Public Offering -

Returns and Payment of Percentage Taxes

Sec. 128. Returns and Payment of Percentage Taxes - "(A) x x x "(1) x x x "(2) Persons Retiring from Business." x x x "(3) Determination of Correct Sales or Receipts." x x x "x x x."

Goods and Services Subject to Excise Taxes

Sec. 129. Goods and Services Subject to Excise Taxes. - Excise taxes apply to goods manufactured or produced in the Philippines for domestic sales or consumption or for any other disposition and to things imported as well as services performed in the Philippines. The excise tax imposed herein shall be in addition to the value-added tax imposed under Title IV. "For purposes of this Title, excise taxes herein imposed and based on weight or volume capacity or any other physical unit of measurement shall be referred to as "specific tax" and an excise tax herein imposed and based on selling price or other specified value of the good or service performed shall be referred to as "ad valorem tax."

Cigars and Cigarettes

Sec. 145. Cigars and Cigarettes - "(A) Cigars." x x x "(B) Cigarettes Packed by Hand." There shall be levied, assessed and collected on cigarettes packed by hand an excise tax based on the following schedules: "Effective on January 1, 2018 until June 30, 2018, Thirty-two pesos and fifty centavos (₱32.50) per pack; "Effective on July 1, 2018 until December 31, 2019, Thirty-five pesos (₱35.00) per pack; "Effective on January 1, 2020 until December 31, 2021, Thirty-seven pesos and fifty centavos (₱37.50) per pack; and "Effective on January 1, 2022 until December 31, 2023, Forty pesos (₱40.00)per "The rates of tax imposed under this subsection shall be increased by four percent (4%) every year effective on January 1, 2024, through revenue regulations issued by the Secretary of Finance. "Duly registered cigarettes packed by hand shall only be packed in twenties and other packaging combinations of not more than twenty. "'Cigarettes packed by hand' shall refer to the manner of packaging of cigarette sticks using an individual person's hands and not through any other means such as a mechanical device, machine or equipment. "(C) Cigarettes Packed by Machine. – There shall be levied, assessed and collected on cigarettes packed by machine a tax at the rates prescribed below: "Effective on January 1, 2018 until June 30, 2018, the tax on all cigarettes packed by machine shall be Thirty-two pesos and fifty centavos (₱32.50) per pack; "Effective on July 1, 2018 until December 31, 2019, the tax on all cigarettes packed by machine shall be Thirty-five pesos (₱35.00) per pack; "Effective on January 1, 2020 until December 31, 2021, the tax on all cigarettes packed by machine shall be Thirty-seven pesos and fifty centavos (₱37.50) per pack; and "Effective on January 1, 2022 until December 31, 2023, the tax on all cigarettes packed by machine shall be Forty pesos (₱40.00) per pack.

Manufactured Oils and Other Fuels

Sec. 148. Manufactured Oils and Other Fuels. - There shall be collected on refined and manufactured mineral oils and motor fuels, the following excise taxes which shall attach to the goods hereunder enumerated as soon as they are in existence as such:

"Effective January 1, 2018

"(a) Lubricating oils and greases, including but not limited to, basestock for lube oils and greases, high vacuum distillates, aromatic extracts and other similar preparations, and additives for lubricating oils and greases, whether such additives are petroleum based or not, per liter and kilogram, respectively, of volume capacity or weight, Eight pesos (₱8.00): Provided, That lubricating oils and greases produced from basestocks and additives on which the excise tax has already been paid shall no longer be subject to excise tax: Provided, further, That locally produced or imported oils previously taxed as such but are subsequently reprocessed, refined or recycled shall likewise be subject to the tax imposed under this Subsection;

"(b) Processed gas, per liter of volume capacity, Eight pesos (₱8.00);

"(c) Waxes and petrolatum, per kilogram, Eight pesos (₱8.00);

"(d) On denatured alcohol to be used for motive power, per liter of volume capacity, Eight pesos (₱8.00): Provided, That unless otherwise provided by special laws, if the denatured alcohol is mixed with gasoline, the excise tax on which has already been paid, only the alcohol content shall be subject to the tax herein prescribed. For purposes of this Subsection, the removal of denatured alcohol of not less than one hundred eighty degrees (180°) proof (ninety percent (90%) absolute alcohol) shall be deemed to have been removed for motive power, unless shown otherwise;

"(e) Naphtha, regular gasoline, pyrolysis gasoline and other similar products of distillation, per liter of volume capacity, Seven pesos (₱7.00): Provided, however, That naphtha and pyrolysis gasoline, when used as a raw material in the production of petrochemical products, or in the 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 non-availability thereof, subject to the rules and regulations to be promulgated by the Secretary of Finance, per liter of volume capacity, zero (₱0.00): Provided, further, That the production of petroleum products, whether or not they are classified as products of distillation and for use solely for the production of gasoline shall be exempt from excise tax: Provided, finally, That the by-product including fuel oil, diesel fuel, kerosene, pyrolysis gasoline, liquefied petroleum gases and similar oils having more or less the same generating power, which are produced in the processing of naphtha into petrochemical products shall be subject to the 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, for the purpose of further processing or blending into finished products which are subject to excise tax under this Section;

"(f) Unleaded premium gasoline, per liter of volume capacity, Seven pesos (₱7.00);

"(g) Aviation turbo jet fuel, aviation gas, per liter of volume capacity, Four pesos (₱4.00);

"(h) Kerosene, per liter of volume capacity, Three pesos (₱3.00): Provided,

Sec. 144(f) Unleaded premium gasoline, per liter of volume capacity, Nine pesos (₱9.00);

Sec. 144(g) Aviation turbo jet fuel, aviation gas, per liter of volume capacity, Four pesos (₱4.00);

Sec. 144(h) Kerosene, per liter of volume capacity, Four pesos (₱4.00): Provided, That kerosene, when used as aviation fuel, shall be subject to the same tax on aviation turbo jet fuel under the preceding paragraph (g), such tax to be assessed on the user thereof;

Sec. 144(i) Diesel fuel oil, and on similar fuel oils having more or less the same generating power, per liter of volume capacity, Four pesos and fifty centavos (₱4.50);

Sec. 144(j) Liquefied petroleum gas, per kilogram, Two pesos(₱2.00): Provided, That liquefied petroleum gas when used as raw material in the production of petrochemical products, subject to the rules and regulations to be promulgated by the Secretary of Finance, per kilogram, zero (₱0.00): Provided, finally, That liquefied petroleum gas used for motive power shall be taxed at the equivalent rate as the excise tax on diesel fuel oil;

Sec. 144(k) Asphalts, per kilogram, Nine pesos (₱9.00);

Sec. 144(l) Bunker fuel oil, and on similar fuel oils having more or less the same generating power, per liter of volume capacity, Four pesos and fifty centavos (₱4.50): Provided, however, That the excise taxes paid on the purchased basestock (bunker) used in the manufacture of excisable articles and forming part thereof shall be credited against the excise tax due therefrom; and

Sec. 144(m) Petroleum coke, per metric ton, Four pesos and fifty centavos (₱4.50): Provided, however, That, petroleum coke, when used as feedstock to any power generating facility, per metric ton, zero (₱0.00).

Sec. 145(a) Lubricating oils and greases, including but not limited to, basestock for lube oils and greases, high vacuum distillates, aromatic extracts and other similar preparations, and additives for lubricating oils and greases, whether such additives are petroleum based or not, per liter and kilogram, respectively, of volume capacity or weight, Ten pesos (₱10.00): Provided, That lubricating oils and greases produced from basestocks and additives on which the excise tax has already been paid shall no longer be subject to excise tax: Provided, further, That locally produced or imported oils previously taxed as such but are subsequently reprocessed, rerefined or recycled shall likewise be subject to the tax imposed under this Subsection.

Sec. 145(b) Processed gas, per liter of volume capacity, Ten pesos (₱10.00);

Sec. 145(c) Waxes and petrolatum, per kilogram, Ten pesos (₱10.00);

Sec. 145(d) On denatured alcohol to be used for motive power, per liter of volume capacity, Ten pesos (₱10.00): Provided, That unless otherwise provided by special laws, if the denatured alcohol is mixed with gasoline, the excise tax on which has already been paid, only the alcohol content shall be subject to the tax herein prescribed. For purposes of this Subsection, the removal of denatured alcohol of not less than one hundred eighty degrees (180°) proof (ninety percent (90%) absolute alcohol) shall be deemed to have been removed for motive power, unless shown otherwise;

(e) Naphtha, regular gasoline, pyrolysis gasoline and other similar products of distillation, per liter of volume capacity, Ten pesos (₱10.00): Provided, however, That naphtha and pyrolysis gasoline, when used as a raw material in the production of petrochemical products, or in the 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 non-availability thereof, subject to the rules and regulations to be promulgated by the Secretary of Finance, per liter of volume capacity, zero (₱0.00): Provided, further, That the production of petroleum products, whether or not they are classified as products of distillation and for use solely for the production of gasoline shall be exempt from excise tax: Provided, finally, That the by-product including fuel oil, diesel fuel, kerosene, pyrolysis gasoline, liquefied petroleum gases and similar oils having more or less the same generating power, which are produced in the processing of naphtha into petrochemical products shall be subject to the 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, for the purpose of further processing or blending into finished products which are subject to excise tax under this Section;

(f) Unleaded premium gasoline, per liter of volume capacity, Ten pesos (₱10.00);

(g) Aviation turbojet fuel, aviation gas, per liter of volume capacity, Four pesos (₱4.00);

(h) Kerosene, per liter of volume capacity, Five pesos (₱5.00): Provided, That kerosene, when used as aviation fuel, shall be subject to the same tax on aviation turbo jet fuel under the preceding paragraph (g), such tax to be assessed on the user thereof;

(i) Diesel fuel oil, and on similar fuel oils having more or less the same generating power, per liter of volume capacity, Six pesos (₱6.00);

(j) Liquefied petroleum gas, per kilogram, Three pesos (₱3.00): Provided, That liquefied petroleum gas when used as raw material in the production of petrochemical products, subject to the rules and regulations to be promulgated by the Secretary of Finance, per kilogram, zero (₱0.00): Provided, finally, That liquefied petroleum gas used for motive power shall be taxed at the equivalent rate as the excise tax on diesel fuel oil;

(k) Asphalts, per kilogram, Ten pesos (₱10.00);

(l) Bunker fuel oil, and on similar fuel oils having more or less the same generating power, per liter of volume capacity, Six pesos (₱6.00): Provided, however, That the excise taxes paid on the purchased basestock (bunker) used in the manufacture of excisable articles and forming part thereof shall be credited against the excise tax due therefrom; and

(m) Petroleum coke, per metric ton, Six pesos (₱6.00): Provided, however, That, petroleum coke, when used as feedstock to any power generating facility, per metric ton, zero (₱0.00).

Mandatory Marking of All Petroleum Products

Sec. 148-A. Mandatory Marking of All Petroleum Products. - In accordance with rules and regulations to be issued by the Secretary of Finance, in consultation with the Commissioner of Internal Revenue and Commissioner of Customs and in coordination with the Secretary of Energy, the Secretary of Finance shall require the use of an official fuel marking or similar technology on petroleum products that are refined, manufactured, or imported into the Philippines, and that are subject to the payment of taxes and duties, such as but not limited to, unleaded premium gasoline, kerosene, and diesel fuel oil after the taxes and duties thereon have been paid. The mandatory marking of all petroleum products shall be in accordance with the following:

"(a) Official Markers. - There shall be a list of chemical additives and corresponding quantitative ratio as identified by the Secretary of Finance as official fuel markers. The official fuel markers shall be .distinct and, to the greatest degree possible, impossible to imitate or replicate: Provided, That the official fuel marker must be unique to the Philippines and that its chemical composition and quantitative ratio must persist for at least three (3) years from their application or administration to the unmarked fuel;

"(b) The person, entity, or taxpayer who owns or enters the petroleum products into the country, or the person to whom the petroleum products are consigned shall cause and accommodate the marking of the petroleum products with the official marking agent;

"(c) Internal revenue or customs officers shall be on site to administer the declaration of the tax and duties imposed on the petroleum products and to oversee the application of the fuel marking;

Section 45. Section 149, Chapter 6 of Title VI of the NIRC, as amended, is hereby further amended to read as follows:

"CHAPTER VI – EXCISE TAX ON MISCELLANEOUS ARTICLES

"Sec. 149. Automobiles. - There shall be levied, assessed and collected an ad valorem tax on automobiles based on the manufacturer's or importer's selling price, net of excise and value-added tax, in accordance with the following schedule:

"Effective January 1, 2018

"Net manufacturer's price/importer's selling price

Rate

"Up to Six hundred thousand pesos (₱600,000)

Four percent (4%)

"Over Six hundred thousand pesos (₱600,000) to One million pesos (₱1,000,000)

Ten percent (10%)

"Over One million pesos (₱1,000,000) to Four million pesos (₱4,000,000)

Twenty percent(20%)

"Over Four million pesos (₱4,000,000)

Fifty percent (50%)

"Provided, That hybrid vehicles shall be subject to fifty percent (50%) of the applicable excise tax rates on automobiles under this Section: Provided, further,

Non-essential Services

Sec. 150-A. Non-essential Services.— There shall be levied, assessed, and collect a tax equivalent to five percent (5%) based on the gross receipts derived from the performance of services, net of excise tax and value-added tax, on invasive cosmetic procedures, surgeries, and body enhancements directed solely towards improving, altering, or enhancing the patient's appearance and do not meaning fully promote the proper function of the body or prevent or treat illness or disease: Provided, That this tax shall not apply to procedures necessary to ameliorate a deformity arising from, or directly related to, a congenital or developmental defect or abnormality, a personal injury resulting from an accident or trauma, or disfiguring disease, tumor, virus or infection: Provided, further, That cases or treatments covered by the National Health Insurance Program shall not be subject to this tax.

Sweetened Beverages

Sec. 150-B. Sweetened Beverages -

"(A) Rate and Base of Tax. - Effective January 1, 2018:

Mineral Products

Sec. 151. Mineral Products -

"(A) Rates of Tax.

Manufacturers and/or Importers to Provide Themselves with Counting or Metering Devices to Determine Volume of Production and Importation

Sec. 155. Manufacturers and/or Importers to Provide Themselves with Counting or Metering Devices to Determine Volume of Production and Importation. - Manufacturers of cigarettes, alcoholic products, oil products, and other articles subject to excise tax that can be similarly measured shall provide themselves with such necessary number of suitable counting or metering devices to determine as accurately as possible the volume, quantity or number of the articles produced by them under rules and regulations promulgated by the Secretary of Finance, upon recommendation of the Commissioner: Provided, That the Department of Finance shall maintain a registry of all petroleum manufacturers and/or importers and the articles being manufactured and/or imported by them: Provided, further, That the Department of Finance shall mandate the creation of a real-time inventory of petroleum articles being manufactured, imported or found in storage depots of such petroleum manufacturers and/or importers: Provided, finally, That importers of finished petroleum products shall also provide themselves with Bureau-accredited metering devices to determine as accurately as possible the volume of petroleum products imported by them.

This requirement shall be complied with before commencement of operations.

Authority of Internal Revenue Officer in Searching for and Testing Taxable Articles

Sec. 171. Authority of Internal Revenue Officer in Searching for and Testing Taxable Articles. - Any internal revenue officer may, in the discharge of his official duties, enter any house, building or place where articles subject to tax under this Title are produced or kept, or are believed by him upon reasonable grounds to be produced or kept, so far as may be necessary to examine, test, discover or seize the same.

"He may also stop and search any vehicle or other means of transportation when upon reasonable grounds he believes that the same carries any article on which the excise tax has not been paid.

Section 51. Section 174 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 174. Stamp Tax on Original Issue of Shares of Stock. - On every original issue, whether on organization, reorganization or for any lawful purpose, of shares of stock by any association, company, or corporation; there shall be collected a documentary stamp tax of Two pesos (₱2.00) on each Two hundred pesos (₱200), or fractional part thereof, of the par value, of such shares of stock: Provided, That in the case of the original issue of shares of stock without par value, the amount of the documentary stamp tax herein prescribed shall be based upon the actual consideration for the issuance of such shares of stock: Provided, further, That in the case of stock dividends, on the actual value represented by each share."

Section 52. Section 175 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 175. Stamp Tax on Sales, Agreements to Sell, Memoranda of Sales, Deliveries or Transfer of Shares or Certificates of Stock - On all sales, or agreements to sell, or memoranda of sales, or deliveries, or transfer of shares or certificates of stock in any association, company, or corporation, or transfer of such securities by assignment in blank, or by delivery, or by any paper or agreement, or memorandum or other evidences of transfer or sale whether entitling the holder in any manner to the benefit of such stock, or to secure the future payment of money, or for the future transfer of any stock, there shall be collected a documentary stamp tax of One peso and fifty centavos (₱1.50) on each Two hundred pesos (₱200), or fractional part thereof, of the par value of such stock: Provided, That only one tax shall be collected on each sale or transfer of stock from one person to another, regardless of whether or not a certificate of stock is issued, indorsed, or delivered in pursuance of such sale or transfer: and Provided, further, That in the case of stock without par value the amount of the documentary stamp tax herein prescribed shall be equivalent to fifty percent (50%) of the documentary stamp tax paid upon the original issue of said stock."

Section 53. Section 177 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 177. Stamp Tax on Certificates of Profits or Interest in Property or Accumulations. - On all certificates of profits, or any certificate or memorandum showing interest in the property or accumulations of any association, company or corporation, and on all transfers of such certificates or memoranda, there shall be collected a documentary stamp tax of One peso (₱1.00) on each Two hundred pesos (₱200), or fractional part thereof, of the face value of such certificates or memorandum."

Section 54.

Section 55. Section 179 of the NIRC, as amended. is hereby further amended to read as follows:

"Sec. 179. Stamp Tax on All Debt Instruments. - On every original issue of debt instruments, there shall be collected a documentary stamp-tax of One peso and fifty centavos (₱1.50) on each Two hundred pesos (₱200), or fractional part thereof, of the issue price of any such debt instruments: Provided, That for such debt instruments with terms of less than one (1) year, the documentary stamp tax to be collected shall be of a proportional amount in accordance with the ratio of its term in number of days to three hundred sixty-five (365) days: Provided, further, That only one documentary stamp tax shall be imposed on either loan agreement, or promissory notes issued to secure such loan.

"x x x."

Section 56. Section 180 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 180. Stamp Tax on All Bills of Exchange or Drafts. - On all bills of exchange (between points within the Philippines) or drafts, there shall be collected a documentary stamp tax of Sixty centavos (₱0.60) on each Two hundred pesos (₱200), or fractional part thereof, of the face value of any such bill of exchange or draft."

Section 57. Section 181 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 180. Stamp Tax Upon Acceptance of Bills of Exchange and Others. - Upon any acceptance or payment of any bill of exchange or order for the payment of money purporting to be drawn in a foreign country but payable in the Philippines, there shall be collected a documentary stamp tax of Sixty centavos (₱0.60) on each Two hundred pesos (₱200), or fractional part thereof, of the face value of any such bill of exchange, or order, or the Philippine equivalent of such value, if expressed in foreign currency."

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

"Sec. 182. Stamp Tax on Foreign Bills of Exchange and Letters of Credit. - On all foreign bills of exchange and letter of credit (including orders, by telegraph or otherwise, for the payment of money issued by express or steamship companies or by any person or persons) drawn in but payable out of the Philippines in a set of three (3) or more according to the custom of merchants and bankers, there shall be collected a documentary stamp tax of Sixty centavos (₱0.60) on each Two hundred pesos (₱200), or fractional part thereof, of the face value of any such bill of exchange or letter of credit, or the Philippine equivalent of such face value, if expressed in foreign

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

"Sec. 183. Stamp Tax on Life Insurance Policies. On all policies of insurance or other instruments by whatever name the same may be called, whereby any insurance shall be made or renewed upon any life or lives, there shall be collected a one-time documentary stamp tax at the following rates:

"If the amount of insurance does not exceed ₱100,000

Exempt

"If the amount of Insurance exceeds ₱100,000 but does not exceed ₱300,000

₱20.00

Section 60. Section 186 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 186. Stamp Tax on Policies of Annuities and Pre-Need Plans. - On all policies of annuities, or other instruments by whatever name the same may be called, whereby an annuity may be made, transferred or redeemed, there shall be collected a documentary stamp tax of One peso (₱1.00) on each Two hundred pesos (₱200), or fractional part thereof, of the premium or installment payment on contract price collected. On pre-need plans, the documentary stamp tax shall be Forty centavos (₱0.40) on each Two hundred pesos (₱200), or fractional part thereof of the premium or contribution collected."

Section 61. Section 188 of the NIRC, 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 every other certificate or document issued by any customs officer, marine surveyor, or other person acting as such, and on each certificate issued by a notary public, and on each certificate of any description required by law or by rules or regulations of a public office, or which is issued for the purpose of giving information, or establishing proof of a fact, and not otherwise specified herein, there shall be collected a documentary stamp tax of Thirty pesos (₱30.00)."

Section 62. Section 189 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 189. Stamp Tax on Warehouse Receipts. - On each warehouse receipt for property held in storage in a public or private warehouse or yard for any person other than the proprietor of such warehouse or yard, there shall be collected a documentary stamp tax of Thirty pesos (₱30.00): Provided, That no tax shall be collected on each warehouse receipt issued to any one person in any one calendar month covering property the value of which does not exceed Two hundred pesos (₱200)."

Section 63. Section 190 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 190. Stamp Tax on Jai-alai, Horse Race, Tickets, Lotto or Other Authorized Numbers Games. - On each jai-alai, horse race ticket, lotto, or other authorized numbers games, there shall be collected a documentary stamp tax of Twenty centavos (₱0.20): Provided, That if the cost of the ticket exceed One peso (₱1.00), an additional tax of Twenty centavos (₱0.20) on every One peso (₱1.00), or fractional part thereof, shall be collected."

Section 64. Section 191 of the same Code, as amended, is hereby further amended to read as follows:

"Sec. 191. Stamp Tax on Bills of Lading or Receipts. - On each set of bills of lading or receipts (except charter party) for any goods, merchandise or effects shipped from one port or place in the Philippines (except on ferries across rivers), or to any foreign port, there shall be collected a documentary stamp tax of Two pesos (₱2.00), if the value of such goods exceeds One hundred pesos (₱100) and does not exceed One thousand pesos (₱1,000); Twenty pesos (₱20.00), if the value exceeds One thousand pesos (₱1,000): Provided, however, That freight tickets covering goods, merchandise or effects carried as accompanied baggage of passengers on land and water carriers primarily engaged in the transportation of passengers are hereby exempt."

Section 65. Section 192 of the NIRC, as amended, is hereby further amended to read as follows:

Section 66. Section 193 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 193. Stamp Tax on Powers of Attorney. - On each power of attorney to perform any act whatsoever, except acts connected with the collection of claims due from or accruing to the Government of the Republic of the Philippines, or the government of any province, city or municipality, there shall be collected a documentary stamp tax of Ten pesos (₱10.00)."

Section 67. Section 194 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 194. Stamp Tax on Leases and Other Hiring Agreements. - On each lease, agreement, memorandum, or contract for hire, use or rent of any lands or tenements, or portions thereof, there shall be collected a documentary stamp tax of Six pesos (₱6.00) for the first Two thousand pesos (₱2,000), or fractional part thereof, and an additional Two pesos (₱2.00) for every One thousand pesos (₱1,000) or fractional part thereof, in excess of the first Two thousand pesos (₱2,000) for each year of the term of said contract or agreement."

Section 68. Section 195 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 195. Stamp Tax on Mortgages, Pledges and Deeds of Trust. - On every mortgage or pledge of lands, estate, or property, real or personal, heritable 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 or previously due and owing or forborne to be paid, being payable, and on any conveyance of land, estate, or property whatsoever, in trust or to be sold, or otherwise converted into money which shall be and intended only as security, either by express stipulation or otherwise, there shall be collected a documentary stamp tax at the following rates:

"(a) When the amount secured does not exceed Five thousand pesos (₱5,000), Forty pesos (₱40.00).

"(b) On each Five thousand pesos (₱5,000), or fractional part thereof in excess of Five thousand pesos (₱5,000), an additional tax of Twenty pesos (₱20.00).

"x x x."

Section 69. Section 196 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 196. Stamp Tax on Deeds of Sale, Conveyances and Donation of Real Property. - On all conveyances, donations, deeds, instruments, or writings, other than grants, patents or original certificates of adjudication issued by the Government, whereby any land, tenement, or other realty sold shall be granted, assigned, transferred, donated or otherwise conveyed to the purchaser, or purchasers, or to any other person or persons designated by such purchaser or purchasers, or donee, there shall be collected a documentary stamp tax, at the rates herein below prescribed, based on the consideration 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: Provided, That when one of the contracting parties is the Government, the tax herein imposed shall be based on the actual consideration:

"(a) When the consideration, or value received or contracted to be paid for such realty, after making proper allowance of any encumbrance, does not exceed One thousand pesos (₱1,000), Fifteen pesos (₱15.00).

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

"Sec. 197. Stamp Tax on Charter Parties and Similar Instruments. - On every charter party, contract or agreement for the charter of any ship, vessel or streamer, or any letter or memorandum or other writing between the captain, master or owner or other person acting as agent of any ship, vessel or steamer, and any other person or persons for relating to the charter of any such ship, vessel or streamer, and on any renewal or transfer of such charter, contract, agreement, letter or memorandum there shall be collected a documentary stamp tax the following rates:

"(a) If the registered gross tonnage of the ship, vessel or steamer does not exceed one thousand (1,000) tons, and the duration of the charter or contract does not exceed six (6) months, One thousand pesos (₱1,000); and for each month or fraction of a month in excess of six (6) months, an additional tax of One hundred pesos (₱100) shall be paid.

"(b) If the registered gross tonnage exceeds one thousand (1,000) tons and does not exceed ten thousand (10,000) tons, and the duration of the charter or contract does not exceed six (6) months, Two thousand pesos (₱2,000); and for each month or fraction of a month in excess of six (6) months, an additional tax of Two hundred pesos (₱200) shall be paid.

"(c) If the registered gross tonnage exceeds ten thousand (10,000) tons and the duration of the charter or contract does not exceed six (6) months, Three thousand pesos (₱3,000); and for each month or fraction of a month in excess of six (6) months, an additional tax of Three hundred pesos (₱300) shall be paid."

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

"Sec. 232. Keeping of Books of Accounts.—

"(A) Corporations, Companies, Partnerships or Persons Required to Keep Books of Accounts.— All corporations, companies, partnerships or persons required by law to pay internal revenue taxes shall keep and use relevant and appropriate set of bookkeeping records duly authorized by the Secretary of Finance wherein all transactions and results of operations are shown and from which all taxes due the Government may readily and accurately be ascertained and determined any time of the year: Provided, That corporations, companies, partnerships or persons whose gross annual sales, earnings, receipts or output exceed Three million pesos (₱3,000,000), shall have their books of accounts audited and examined yearly by independent Certified Public Accountants and their income tax returns accompanied with a duly accomplished Account Information Form (AIF) which shall contain, among others, information lifted from certified balance sheets, profit and loss statements, schedules listing income-producing properties and the corresponding income therefrom and other relevant statements.

"x x x."

Section 72.

Section 73. Section 237 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 237. Issuance of Receipts or Sales or Commercial Invoices. -

"(A) Issuance. - All persons subject to an internal revenue tax shall, at the point of each sale and transfer of merchandise or for services rendered valued at One hundred pesos (₱100) or more, issue duly registered receipts or sale or commercial invoices, showing the date of transaction, quantity, unit cost and description of merchandise or nature of service: Provided, however, That where the receipt is issued to cover payment made as rentals, commissions, compensation or fees, receipts or invoices shall be issued which shall show the name, business style, if any, and address of the purchaser, customer or client: Provided, further, That where the purchaser is a VAT-registered person, in addition to the information herein required, the invoice or receipt shall further show the Taxpayer Identification Number (TIN) of the purchaser.

"Within five (5) years from the effectivity of this Act and upon the establishment of a system capable of storing and processing the required data, the Bureau shall require taxpayers engaged in the export of goods and services, taxpayers engaged in e-commerce, and taxpayers under the jurisdiction of the Large Taxpayers Service to issue electronic receipts or sales or commercial invoices in lieu of manual receipts or sales or commercial invoices subject to rules and regulations to be issued by the Secretary of Finance upon recommendation of the Commissioner and after a public hearing shall have been held for this purpose: Provided,

Section 74. A new section designated as Section 237-A under Chapter II, Title IX of the NIRC, as amended, is hereby inserted to read as follows:

"Sec. 237-A. Electronic Sales Reporting System. — Within five (5) years from the effectivity of this Act and upon the establishment of a system capable of storing and processing the required data, the Bureau shall require taxpayers engaged in the export of goods and services, and taxpayers under the jurisdiction of the Large Taxpayers Service to electronically report their sales data to the Bureau through the use of electronic point of sales systems, subject to rules and regulations to be issued by the Secretary of Finance as recommended by the Commissioner of Internal Revenue: Provided, That the machines, fiscal devices, and fiscal memory devices shall be at the expense of the taxpayers.

"The data processing of sales and purchase data shall comply with the provisions of Republic Act No. 10173, otherwise known as the "Data Privacy Act" and Section 270 of the NIRC, as amended, on unlawful divulgence of taxpayer information and such other laws relating to the confidentiality of information.

"The Bureau shall also establish policies, risk management approaches, actions, trainings, and technologies to protect the cyber environment, organization, and data in compliance with Republic Act No. 10175 or the "Cybercrime Prevention Act of 2012."

Section 75. Section 249 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 249. Interest -

"(A) In General. - There shall be assessed and collected on any unpaid amount of tax, interest at the rate of double the legal interest rate for loans or forbearance of any money in the absence of an express stipulation as set by the Bangko Sentral ng Pilipinas from the date prescribed for payment until the amount is fully paid: Provided, That in no case shall the deficiency and the delinquency interest prescribed under Subsections (B) and (C) hereof, be imposed simultaneously.

"(B) Deficiency Interest - Any deficiency in the tax due, as the term is defined in this Code, shall be subject to the interest prescribed in Subsection (A) hereof, which interest shall be assessed and collected from the date prescribed for its payment until the full payment thereof, or upon issuance of a notice and demand by the Commissioner of Internal Revenue, whichever comes earlier.

"(C) Delinquency Interest. - x x x

"x x x."

Section 76. Section 254 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 254. Attempt to Evade or Defeat Tax.

Section 77. Section 264 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 264. Failure or Refusal to Issue Receipts or Sales or Commercial Invoices, Violations Related to the Printing of such Receipts or Invoices and Other Violations -

"(a) x x x

"(b) Any person who commits any of the acts enumerated hereunder shall be penalized with a fine of not less than Five hundred thousand pesos (₱500,000) but not more than Ten million pesos (₱10,000,000), and imprisonment of not less than six (6) years but not more than ten (10) years:

"(1) x x x;

"(2) x x x;

"(3) x x x; or

"(4) Printing of other fraudulent receipts or sales or commercial invoices.""

Section 78. A new section designated as Section 264-A under Chapter II, Title X of the NIRC, as amended, is hereby inserted as follows:

"Sec. 264-A. Failure to Transmit Sales Data Entered on Cash Register Machine (CRM)/Point of Sales System (POS) Machines to the BIR's Electronic Sales Reporting System. - Any taxpayer required to transmit sales data to the Bureau's electronic sales reporting system but fails to do so, shall pay, for each day of violation, a penalty amounting to one-tenth of one percent (1⁄10 of 1%) of the annual net income as reflected in the taxpayer's audited financial statement for the second year preceding the current taxable year for each day of violation or Ten thousand pesos (₱10,000), whichever is higher: Provided, That should the aggregate number of days of violation exceed one hundred eighty (180) days within a taxable year, an additional penalty of permanent closure of the taxpayer shall be imposed: Provided, further, That if the failure to transmit is due to force majeure or any causes beyond the control of the taxpayer the penalty shall not apply."

Section 79. A new section designated as Section 264-B under Chapter II, Title X of the NIRC, as amended, is hereby inserted to read as follows:

"Sec. 264-B. Purchase, Use, Possession, Sale or Offer to Sell, Installment, Transfer, Update, Upgrade, Keeping or Maintaining of Sales Suppression Devices. – Any person who shall purchase, use, possess, sell or offer to sell, install, transfer, update, upgrade, keep, or maintain any software or device designed for, or is capable of: (a) suppressing the creation of electronic records of sale transactions that a taxpayer is required to keep under existing tax laws and/or regulations; or (b) modifying, hiding, or deleting electronic records of sales transactions and providing a ready means of access to them, shall be punished by a fine of not less than Five hundred thousand pesos (₱500,000) but not more than Ten million pesos (₱10,000,000), and suffer imprisonment of not less than two (2) years but not more than four (4) years: Provided, That a cumulative suppression of electronic sales record in excess of the amount of Fifty million pesos (₱50,000,000) shall be considered as economic sabotage and shall be punished in the maximum penalty provided for under this provision."

Section 80. A new section designated as Section 265-A under Chapter II, Title X of the NIRC, as amended, is hereby inserted to read as follows:

"Sec. 265-A. Offenses Relating to Fuel Marking.

Offenses Relating to Fuel Marking

Sec. 265-A. Offenses Relating to Fuel Marking. – All offenses relating to fuel marking shall, in addition to the penalties imposed under Title X of the NIRC, as amended, Section 1401 of Republic Act No. 10863, otherwise known as the "Customs Modernization and Tariff Act (CMTA)",and other relevant laws, be punishable as follows:

"(a) Any person who is found to be engaged in the sale, trade, delivery, distribution or transportation of unmarked fuel in commercial quantity held for domestic use or merchandise shall, upon conviction, suffer the penalties of:

"(1) For the first offense, a fine of Two million five hundred thousand pesos (₱2,500,000);

"(2) For the second offense, a fine of Five million pesos (₱5,000,000); and

"(3) For the third offense,a fine of Ten million pesos (₱10,000,000)and revocation of license to engage in any trade or business.

"(b) Any person who causes the removal of the official fuel marking agent from marked fuel, and the adulteration or dilution of fuel intended for sale to the domestic market, or the knowing possession, storage, transfer or offer for sale of fuel obtained as a result of such removal, adulteration or dilution shall be penalized in the same manner and extent as provided for in the preceding Subsection.

"(c) Any person who commits any of the acts enumerated hereunder shall, upon conviction, be punished by a fine of not less than One million pesos (₱1,000,000) but not more than Five million pesos (₱5,000,000), and suffer imprisonment of not less than four (4) years but not more than eight (8) years:

"(1) Making, importing, selling, using or possessing fuel markers without express authority;

"(2) Making, importing, selling, using or possessing counterfeit fuel markers;

"(3) Causing another person or entity to commit any of the two (2) preceding acts; or

"(4) Causing the sale, distribution, supply or transport of legitimately imported, in-transit, manufactured or procured controlled precursors and essential chemicals, in diluted, mixtures or in concentrated form, to any person or entity penalized in Subsections (a), (b), or (c) hereof, including but not limited to, packaging, repackaging, labeling, relabeling or concealment of such transaction through fraud, destruction of documents, fraudulent use of permits, misdeclaration, use of front companies or mail fraud.

"(d) Any person who willfully inserts, places, adds or attaches directly or indirectly, through any overt or covert. act, whatever quantity of any unmarked fuel, counterfeit additive or chemical in the person, house, effects, inventory, or in the immediate vicinity of an innocent individual for the purpose of implicating, incriminating or imputing the commission of any violation of this Act shall, upon conviction, be punished by a fine of not less than Five million pesos (₱5,000,000) but not more than Ten million pesos (₱10,000,000), and suffer imprisonment of not less than four (4) years but not more than eight (8) years.

"(e) Any person who is authorized, licensed or accredited under this Act and its implementing rules to conduct fuel tests, who issues false or fraudulent fuel test results knowingly, willfully or through gross negligence, shall suffer the additional penalty of imprisonment ranging from one (1) year and one (1) day to two (2) years and six (6) months.

"The additional penalties of revocation of the license to practice his profession in case of a practitioner, and the closure of the fuel testing facility, may also be imposed at the instance of the court."

Violations Committed by Government Enforcement Officers

Sec. 269. Violations Committed by Government Enforcement Officers. - x x x

"(a) x x x;

"x x x

Section 81. Section 269 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 269. Violations Committed by Government Enforcement Officers. - x x x

"(a) x x x;

"x x x

"(h) Having knowledge or information of any violation of this Code or of any fraud committed on the revenues collectible by the Bureau of Internal Revenue, failure to report such knowledge or information to then superior officer, or failure to report as otherwise required by law;

"(i) x x x; and

"(j) Deliberate failure to act on the application for refunds within the prescribed period provided under Section 112 of this Act.

"Provided, That the provisions of the foregoing paragraph notwithstanding, any internal revenue officer for which a prima facie case of grave misconduct has been established shall, after due notice and hearing of the administrative case and subject to Civil Service Laws, be dismissed from the revenue service: Provided, further, That the term 'grave misconduct', as defined in the Civil Service Law, shall include the issuance of fake letters of authority and receipts, forgery of signature, usurpation of authority and habitual issuance of unreasonable assessments.

Section 82. Section 288 of the NIRC, as amended, is hereby further amended to read as follows:

"Sec. 288. Disposition of Incremental Revenue -

"(A) x x x

"(B) x x x

"(C) x x x

"(D) x x x

"(E) x x x

"(F) Incremental Revenues from the Tax Reform for Acceleration and Inclusion (TRAIN). - For five (5) years from the effectivity of this Act, the yearly incremental revenues generated shall be automatically appropriated as follows:

"(1) Not more than-seventy percent (70%) to fund infrastructure projects such as, but not limited to, the Build, Build, Build Program and provide infrastructure programs to address congestion through mass transport and new road networks military infrastructure, sports facilities for public schools, and potable drinking water supply in all public places; and

"(2) Not more than thirty percent (30%) to fund:

"(a) Programs under Republic Act No. 10659 otherwise known as 'Sugarcane Industry Development Act of 2015', to advance the self-reliance of sugar farmers that will increase productivity, provide livelihood opportunities, develop alternative farming systems and ultimately enhance farmers' income;

"(b) Social mitigating measures and investments in: (i) education, (ii) health, targeted nutrition, and anti-hunger programs for mothers infants, and young children, (iii) social protection, (iv) employment, and (v) housing that prioritize and directly benefit both the poor and near-poor households;

"(c) A social welfare and benefits program where qualified beneficiaries shall be provided with a social benefits card to avail of the following social benefits:

"(i) Unconditional cash transfer to households in the first to seventh income deciles of the National Household Targeting System for Poverty Reduction (NHTS-PR), Pantawid Pamilyang Pilipino Program, and the social pension program for a period of three (3) years from the effectivity of this Act: Provided, That the unconditional cash transfer shall be Two hundred pesos (₱200.00) per month for the first year and Three hundred pesos (₱300.00) per month for the second year and third-year, to be implemented by the Department of Social Welfare and Development (DSWD);

"(ii) Fuel vouchers to qualified franchise holders of Public Utility Jeepneys (PUJs);

"(iii) For minimum wage earners, unemployed, and the poorest fifty percent (50%) of the population:

"(1) Fare discount from all public utility vehicles (except trucks for hire and school transport service) in the amount equivalent to ten percent (10%) of the authorized fare;

"(2) Discounted purchase of National Food Authority (NFA) rice from accredited retail stores in the amount equivalent to ten percent (10%) of the net retail prices, up to a maximum of twenty (20) kilos per month; and

Reportorial Requirements

Section 83. Reportorial Requirements. - The interagency committee created and the concerned departments/agencies/beneficiaries under Section 82 of this Act shall submit to the President of the Senate of the Philippines, the Speaker of the House of Representatives, the Senate Committee on Finance and the House Committee on Appropriations a detailed report on the expenditure of the amounts earmarked hereon copy furnished the Chairpersons of the Committee on Ways and Means of both Houses of Congress. The report shall likewise be posted on the official website of the agencies concerned.

Implementing Rules and Regulations

Section 84. Implementing Rules and Regulations. - Within thirty (30) days from the effectivity of this Act, the Secretary of Finance shall. upon the recommendation of the Commissioner of Internal Revenue, promulgate the necessary rules and regulations for its effective implementation.

Separability Clause

Section 85. Separability Clause. - If any provision of this Act is subsequently declared invalid or unconstitutional, the other provisions hereof which are n~t affected thereby shall remain in full force and effect.

Repealing Clause

Section 86. Repealing Clause. - The following laws or provisions of laws are hereby repealed and the persons and/or transactions affected herein are made subject to the VAT provision of Title IV of the NIRC, as amended:

Effectivity

Section 87. Effectivity. - This Act shall take effect on January 1, 2018 following its complete publication in the Official Gazette or in at least one (1) newspaper of general circulation.