SUMMARY OF FEATURES OF REPUBLIC ACT NO.

10963 (TRAIN Law)

I. Individual Income Tax RA 10963

1. Revised income tax rates 1. Restructures the income tax rates for individual taxpayers by replacing the existing 5%-32% graduated
tax rates with 0%-35% progressive tax rates, with the number of tax brackets reduced from seven to
six, and thresholds for each tax bands adjusted.

(A) Tax schedule effective 1 January 2018 until 31 December 2022:

Not over P250,000 0%

Over P250,000 but not over P400,000
Over P400,000 but not over P800,000
Over P800,000 but not over P2,000,000
Over P2,000,000 but not over P8,000,000
Over P8,000,000
20% of the excess over P250,000
P30,000 plus 25% of the excess over P400,000
P130,000 plus 30% of the excess over P800,000
P490,000 + 32% of the excess over P2,000,000
P2,410,000 + 35% of the excess over P8,000,000

(B) Tax Schedule effective 1 January 2023 and onwards

Not over P250,000 0%

2. Tax-exempt 13th month pay and
other bonuses
3. Personal and additional exemption
allowances
4. Deductibility of premium payments
on health and hospitalization
insurance
5. Fringe benefit tax
Over P250,000 but not over P400,000 15% of the excess over P250,000
Over P400,000 but not over P800,000 P22,500 plus 20% of the excess over P400,000
Over P800,000 but not over P2,000,000 P102,500 plus 25% of the excess over P800,000
Over P2,000,000 but not over P8,000,000 P402,500 plus 30% of the excess over P2,000,000
Over P8,000,000 P2,202,500 plus 35% of the excess over P8,000,000
Increases the amount of tax-exempt 13th month pay and other benefits from P82,000 to P90,000
Eliminates the personal and additional exemption allowances, which means that fixed-income earners or
compensation-income earners will be uniformly taxed on gross basis, without regard to their circumstances
Removes the deductibility of premium payments on health and/or hospitalization insurance in the amount of
P2,400 per family or P200 a month from gross income of individual taxpayers
Increases the fringe benefit tax (FBT) rate from 32% to 35%, effective 1 January 2018
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6. Applicable tax on income of self- 1. Income of purely self-employed individuals and/or professionals - Self-employed individuals and/or
employed individuals and professionals may, at their option, be subject to either 8% on gross sales or gross receipts and other non-
professionals operating income in excess of P250,000 or regular individual income tax rates. The 8% tax shall be in lieu of
graduated income tax rates and percentage tax.

2. Income of mixed income earners –

a. On compensation income - They shall be subject to graduated income tax rates for compensation income.
b. On income from business and/or practice of profession

1. Those whose gross sales or gross receipts and other non-operating income do not exceed the VAT
threshold – They shall have the option to be subject to 8% tax based on gross sales or receipts and
other non-operating income from business or practice of profession or graduated income tax rates.

2. Those whose gross sales or gross receipts and other non-operating income exceed the VAT threshold
– No option available. They shall be subject to the graduated income tax rates.

7. Option to elect optional standard Allows general professional partnerships (GPPs) and the partners comprising the partnership to avail of the
deduction (OSD) - general optional standard deduction (OSD) only once; the option shall be exercised either by the GPP or the partners
professional partnerships and comprising the partnership.
partners
8. Fifteen percent (15%) preferential Removes the privilege to avail of the 15% preferential tax rate on gross income of employees of ROHQs/RHQs,
tax rate on aliens employed by OBUs, and Petroleum Contractors and Subcontractors. (Per veto message of the President)
ROHQs/RHQs, OBUs, and
Petroleum Contractors and
Subcontractors

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II. Tax on Passive Income
Applicable tax on passive incomes
III. Corporate Income Tax
Tax treatment of government-owned
and –controlled corporations
RA 10963
1. PCSO and Lotto Winnings – Subjects to 20% final withholding tax PCSO and Lotto winnings amounting to
more than P10,000. PCSO and Lotto winnings amounting to P10,000 or less are tax exempt.
2. Interest income on foreign currency bank deposits – Increases the tax rate on interest income (whether
received by an individual taxpayer or corporation) from foreign currency bank deposits from 7.5% to 15%.
3. Capital gains tax on sale of shares of stock – Replaces the two-tiered rate of 5% and 10% tax on the sale,
transfer, or exchange of shares of stock with a fixed rate of 15%.
Excludes the Philippine Charity Sweepstakes Office (PCSO) from the list of tax-exempt government-owned or –
controlled corporations, agencies, or instrumentalities
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IV. Filing of Tax Returns
1. Filing of income tax returns
2. Range of creditable tax that the
Secretary of Finance may impose
on income received by taxpayers
3. Filing and payment of final and
creditable withholding tax return
4. Filing of quarterly income tax
return for individual taxpayers
5. Due date for paying second
installment of individual taxpayers
availing of option to pay tax due in
two equal installments
RA 10963
1. Exempts individual taxpayers whose taxable income does not exceed P250,000 from the requirement to file
income tax return
2. Mandates that the individual income tax return shall consist of only four pages and shall contain the personal
profile; gross sales or income from compensation or trade or business, or exercise of profession; allowable
deductions; taxable income; and tax due and payable of individual taxpayers
3. Provides that individual taxpayers receiving purely compensation income from only one employer whose
income tax has been correctly withheld by their employer shall not be required to file an income tax return and
that the certificate of withholding filed by their employer, which is duly stamped “received” by the BIR, shall be
tantamount to substituted filing of income tax return
4. Requires that the corporate income tax return shall consist of a maximum of four pages and shall contain the
corporate profile; gross sales or income from services or conduct of trade or business; allowable deductions;
taxable income; and income tax due and payable of corporations
Limits the rate of withholding tax that the Secretary of Finance may impose on the income payable to natural or
juridical persons from 1%-32% to 1%-15%
Removes the provision requiring the filing and payment of final withholding tax within 25 days from the close of
calendar quarter, and filing and payment of creditable withholding tax not later than the last day of the month
following the close of quarter
Moves the date of filing the first quarter tax return for individual taxpayers engaged in business or practice of
profession from 15 April to 15 May of each year
Moves the due date for paying the second installment from 15 July to 15 October in case of individual taxpayers
with tax due in excess of P2,000 and availing of the option to pay their tax due in two equal installments
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 V. Estate Tax RA 10963
1. Estate Tax Rate Replaces the current graduated estate tax rates with a fixed estate tax rate of 6% based on the value of net
estate
2. Deductions allowed to the estate 1. Removes the deduction for funeral expenses, judicial expenses, family home, and medical expenses incurred
by decedent in arriving at the net estate subject to estate tax
2. Increases the standard deduction from P1 million to P5 million
3. Increases the fair market value of family home, which is exempt from estate tax, from P1 million to P10
million
4. Deletes the provision requiring the certification from the barangay captain for decedent’s home to be
considered a family home for estate tax purposes
5. Introduces a standard deduction of P500,000 against the gross estate of nonresidents
6. Deletes the provision allowing deductions to be made against the gross estate of nonresident under the
condition that the executor, administrator, or heirs include in the estate tax return the value of the gross
estate of the nonresident, which are situated abroad
3. Filing of estate tax return and 1. Eliminates the requirement to file an estate tax return for gross estate exceeding P200,000 although exempt
payment of tax from estate tax
2. Increases the threshold value of estate from P2 million to P5 million where the estate tax return to be filed
should be supported by a statement duly certified by a certified public accountant (CPA)
3. Extends the period to file estate tax return from six months to one year
4. Allows payment by installment of estate tax due within two years from statutory date for payment of tax in
case the cash of the estate is insufficient to pay the total estate tax due

4.Withdrawal of bank deposits of the Relaxes the rule on the amount, which can be withdrawn from the deceased’s bank deposits. Allows withdrawal
deceased of bank deposits of the deceased subject to the imposition of 6% final withholding tax

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VI. Donor’s Tax
1. Donor’s tax rate
2. Transfer for less than adequate
and full consideration
3. Exempt gifts
RA 10963
Imposes a uniform 6% donor’s tax, in lieu of the graduated estate tax rates and 30% donor’s tax on donations
made to strangers. The 6% donor’s tax shall be based on total gifts in excess of P250,000 exempt gifts.
The sale, exchange, or other transfer of property made in the ordinary course of business (bona fide transaction
and at arm’s length) shall be considered made for adequate and full consideration in money and money’s worth,
hence, not subject to donor’s tax.
Removes the first P10,000 exemption from donor’s tax of dowries or gifts made on account of marriage. Hence,
regardless of the amount, such gifts shall be subject to donor’s tax.
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VII. Value-Added Tax and
Percentage Tax
1. VAT zero-rated sale of goods
2. VAT zero-rated sale of services
RA 10963
1. Treats as VAT zero-rated the sale and delivery of goods to registered enterprises within separate customs
territories as provided under special law, and registered enterprises within tourism enterprise zones as
declared by the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) – Vetoed by the President.
2. Removes the VAT zero-rating on sale of gold to the Bangko Sentral ng Pilipinas (BSP). Sale of gold to BSP shall
be treated instead as a VAT-exempt transaction.
3. Clarifies that the VAT zero rating of sale of goods, supplies and equipment, and fuel to persons engaged in
international shipping or international airport operations shall be limited to those used for international
shipping or air transport operations.
4. Sale of raw materials or packaging materials to a nonresident for delivery to a resident, sale of raw materials
to export-oriented enterprises whose export sales exceed 70%, and export sales under Executive Order No.
226 (Omnibus Investment Code) and other special laws shall no longer be treated as zero-rated sale upon
successful establishment and implementation of enhanced VAT refund system.
5. Mandates the payment in cash by 31 December 2019 of all pending VAT refund claims as of 31 December
2017.
6. Establishes a VAT refund center in the BIR and Bureau of Customs, which will handle the processing of
application for VAT refund.
7. Mandates the automatic appropriation of 5% of total VAT collections of the BIR and Bureau of Customs from
the immediately preceding year to fund claims for VAT refund.
8. Removes the VAT zero rating of foreign currency denominated sales, i.e., sale to a non-resident of goods
assembled or manufactured in the Philippines for delivery to a resident in the Philippines, paid for in acceptable
foreign currency and accounted with the BSP rules and regulations.
1. Includes sales of electricity, transmission, and distribution by electric cooperatives in the definition of phrase
“sale or exchange of services” for VAT purposes.
2. Limits the VAT zero rating of sale of services to persons engaged in international shipping or international
airport operations to services exclusively for international shipping or air transport operations.
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 3. For clarity, provides that transport of passengers and cargo by “domestic” air or sea vessels from the
Philippines to a foreign country is a VAT zero rated transaction

4. Treats as VAT zero rated the sale and delivery of goods to registered enterprises within the separate customs
territory/ies as provided under special law, and registered enterprises within tourism enterprise zones as
declared by the TIEZA – vetoed by the President

5. The processing, manufacturing, or repacking of 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 BSP and services performed by
subcontractors and/or contractors in processing, converting, or manufacturing goods for an enterprise whose
export sales exceed 70% of total annual production shall no longer be treated as VAT zero-rated sale upon
successful establishment and implementation of enhanced VAT refund system.

6. Mandates the payment in cash by 31 December 2019 of all pending VAT refund claims as of 31 December 2017

7. Establishes a VAT refund center in the BIR and Bureau of Customs that will handle the processing of application
for VAT refund

8. Mandates the automatic appropriation of 5% of total VAT collections of the BIR and Bureau of Customs from
the immediately preceding year to fund claims for VAT refund

3. VAT-exempt transactions 1. Clarifies that persons coming to settle in the Philippines or Filipinos or their families who are considered
residents or citizens of other countries such as OFWs may import certain VAT-free goods including their
personal and household effects in quantities and of class suitable to the profession, rank, or position of the
person importing said items, for their own use and not for barter or sale, or arriving within a reasonable time

2. Beginning 1 January 2021, the coverage of VAT exemption on sale of real properties shall be limited to the
following:

a. Sale of real properties not primarily held for sale to customers or held for lease in the ordinary course of
trade or business
b. Sale of real property for socialized housing as defined under Republic Act No. 7279
c. Sale of house and lot and other residential dwellings with selling price of not more than P2 million

3. Increases the threshold VAT-exempt lease of residential unit from P10,000 to P15,000 per month

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 4. Limits the VAT exemption on importation of fuel, goods, and supplies by persons engaged in international
shipping or international airport operations to those used exclusively for international shipping or air transport
operations

5. Incorporates the provision of Expanded Senior Citizen’s Act (RA 9954) and Persons with Disability Act (RA
10754) exempting from VAT the sale or lease of goods and services to senior citizens and persons with
disabilities

6. Exempts from VAT the transfer of property pursuant to Section 40(C)(2) of the Tax Code

7. Exempts from VAT association dues, membership fees, and other assessments and charges collected by
homeowners’ associations and condominium corporations

8. Treats sale of gold to the BSP as VAT exempt instead of VAT zero-rated

9. Exempts from VAT the sale to final consumers of drugs and medicines prescribed for diabetes, high cholesterol,
and hypertension starting 1 January 2019

10. Increases the VAT-exempt threshold on sale or lease of goods or properties or the performance of services
from P1.5 million gross annual sales and/or receipts to P3 million

3. Input VAT credit Eliminates the requirement to amortize input VAT on capital goods purchased and imported by VAT taxpayers
starting 31 December 2021. VAT taxpayers with unutilized input VAT on capital goods as of 31 December 2021
shall be allowed to apply the same as scheduled until fully utilized.

4. Refund of VAT 1. Reduces the period within which a claim for refund of excess unutilized input VAT should be made by the BIR
from 120 days to 90 days from the date of submission of the official receipts or invoices and other documents

2. Imposes penalty on the official, agent, or employee of the BIR who fails to act on the application for tax refund
within 90 days

5. Return and payment of VAT and 1. Filing and payment of VAT returns beginning 1 January 2023 shall be made within 25 days from the close of
transactions subject to 12% final the taxable quarter.
withholding VAT
2. Replaces the 5% final withholding VAT on sales to government to creditable VAT beginning 1 January 2021

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6. Persons exempt from VAT
7. Tax on sale, barter, or exchange
of shares of stock listed and traded
through the local stock exchange
or through initial public offering
8. Returns and payment of
percentage taxes
3. Excludes payments for purchases of goods and services arising from projects funded by Official Development
Assistance (ODA) among the transactions subject to 12% final withholding VAT
1. Exempts from VAT self-employed individuals and professionals whose gross sales or gross receipts do not
exceed the VAT threshold and who opt to pay the 8% tax
2. Self-employed individuals and/or professionals, together with cooperatives, are exempt from 3% gross receipts
tax on their first P500,000 annual gross sales or gross receipts beginning 1 January 2019 – Vetoed by the
President.
Increases the stock transaction tax from 1/2 of 1% to 6/10 of 1% of the gross selling price or gross value in
money of the shares of listed stocks sold, bartered, exchange through the local stock exchange or through initial
public offering
Removes the authority given to the Commissioner of Internal Revenue to prescribe the time for filing of the
percentage tax return at intervals other than the time prescribed under Section 128(A)(a) of the Tax Code
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VIII. Excise Tax
1. General provisions
2. Cigarettes
3. Petroleum products
RA 10963
Clarifies that excise tax covers not only goods manufactured or produced in the Philippines for domestic sales or
consumption but also services performed in the Philippines
Increases the excise tax on cigarettes from P30 to P32.50 per pack from 1 January 2018 to 30 June 2018, P35
from 1 July 2018 to 31 December 2019, P37.50 from 1 January 2020 to 31 December 2021, and P40 from 1
January 2022 to 31 December 2023
1. Increases the excise tax on petroleum products as follows:

Petroleum product Current Proposed Excise Tax Rates

rates 2018 2019 2020
Lubricating oils and greases P4.50 P8.00 P9.00 P10.00
Processed gas P0.05 P8.00 P9.00 P10.00
Waxes and petrolatum P3.50 P8.00 P9.00 P10.00
Denatured alcohol for motive P0.05 P8.00 P9.00 P10.00
power
Naptha, regular gasoline, P4.35 P7.00 P9.00 P10.00
pyrolysis gasoline
Leaded premium gasoline P5.35 P7.00 P9.00 P10.00
Unleaded premium gasoline P4.35 P7.00 P9.00 P10.00
Aviation turbo jet fuel P3.67 P4.00 P4.00 P4.00
Kerosene P0.00 P3.00 P4.00 P5.00
Diesel fuel P0.00 P2.50 P4.50 P6.00
Liquefied petroleum gas P0.00 P1.00 P2.00 P3.00
Asphalts P0.56 P8.00 P9.00 P10.00
Bunker fuel P0.00 P2.50 P4.50 P6.00
Petroleum coke P0.00 P2.50 P4.50 P6.00

2. Exempts from excise tax petroleum products when used as input, feedstock, or as raw material in the
manufacture of petrochemical products, or in refining petroleum products, or as replacement fuel for natural
gas-fired combined cycle power plants – Vetoed by the President.

4. Marking of petroleum products Mandates the use of fuel markings or similar technology on petroleum products that are refined, manufactured,
or imported into the Philippines that are subject to payment of taxes and duties

5. Automobiles 1. Effective 1 January 2018, the following shall be the excise tax rates for automobiles:

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6. Non-essentials (cosmetic
procedures)
7. Sweetened beverages
Net manufacturing price/Importer’s 2018 and onwards
selling price
Up to P600,000 4%
Over P600,000 to P1 million 10%
Over P1 million to P4 million 20%
Over P4 million 50%
2. Subjects hybrid vehicles to only 50% of applicable excise tax rates on automobiles
3. Exempts purely electric vehicles and pick-ups from excise tax on automobiles
4. Removes the requirement to index the manufacturer’s price or importer’s selling price considering the
exchange rate of Philippines peso to US dollars for purposes of excise tax on automobiles
5. Classifies pick-ups as trucks/cargo van for excise tax purposes
6. Provides definition of the term “hybrid electric vehicles” for purposes of excise tax on automobiles
Imposes a 5% excise tax based on the gross sales/receipts derived from the performance of cosmetic
procedures, surgeries, and body enhancements undertaken for aesthetic reasons (excluding procedures to
ameliorate deformities arising from or directly related to congenital or developmental defect or abnormality,
personal injury from accident or trauma or disfiguring disease, tumor, virus or infection) except cases or
treatments covered by the National Health Insurance Program
1. Imposes the following rates on excise tax on sweetened beverages:
Type of Sweetened Beverage Tax
Sweetened beverages using purely caloric and non-caloric P6.00 per liter of volume capacity
sweeteners or mix of caloric and non-caloric sweeteners
Sweetened beverages using purely coconut sap sugar and Exempt
purely steviol glycosides
Sweetened beverages using purely high-fructose corn P12.00
syrup or in combination with any caloric or non-caloric
sweetener
2. Exempts plain milk, infant formula, growing up milk, powdered milk and flavored milk, ready to drink milk,
fermented milk, soymilk, flavored soymilk, 100% natural fruit juices, 100% natural vegetable juices, meal
replacement and medically indicated beverages, ground coffee, instant soluble coffee, and pre-packaged
powdered coffee products from the excise tax
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8. Mineral products Increases the excise tax on mineral products, as follows:
Mineral Product/
Current Rate
Coal and Coke – P10.00
Nonmetallic minerals and quarry
resources (copper and other metallic
products and gold and chromite) –
2%
Indigenous petroleum – 3%
New Tax Rate/s
P50 per metric ton effective 1 January 2018; P100
effective 1 January 2019; and P150 effective 1
January 2020
4% based on actual market value of gross output
at the time of removal for locally extracted or
produced, or the value used in determining tariff
and customs duties (net of excise tax and VAT) in
case of importation
6% of the fair international market price
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IX. Documentary Stamp Tax
1. Original issuance of shares of stock
2. Sales, agreements to sell,
memoranda of sales or
agreements or transfer of shares
or certificates of stocks
3. Certificate of profits or interest in
property or accumulations
4. Bank checks, drafts, or certificate
of deposits not drawing interest, or
order for the payment of any sum
of money drawn upon or issued by
any bank, trust company, or any
person or persons, companies or
corporations
5. Debt instruments
6. Bills of exchange or drafts
7. Acceptance of bills of exchange
and others
8. Foreign bills of exchange and
letters of credit
9. Life insurance policies
10. Policies of annuities and pre-need
plans
11. Certificates
12. Warehouse receipts
13. Jai-alai, horse race tickets, lotto
or other authorized numbers
games
14. Bills of lading or receipts
15. Proxies
16. Powers of attorney
17. Leases and other hiring
agreements
RA 10963
Increases the DST on original issue of shares of stock from P1.00 to P2.00 on each P200 of the par value of the
shares of stock
Increases the DST on sales, agreements to sell, memoranda of sales or agreements or transfer of shares or
certificates of stocks from P0.75 to P1.50 on each P200, or fractional part thereof, of the par value of such stock.
The DST rate applicable in the case of stock without par value is also increased from 25% to 50% of the amount
of the DST paid upon the original issue of the stock
Increases the DST on certificates of profits or certificate or memorandum showing the interest in the property or
accumulations from P0.50 to P1.00 on each P200 of the face value of the certificates or memorandum
Increases the DST on bank checks, drafts, or certificate of deposits not drawing interest, or order for the
payment of any sum of money drawn upon or issued by any bank, trust company, or any person or persons,
companies or corporations from P1.50 to P3.00
Increases the DST on debt instruments from P1.00 to P1.50 on each P200 of the issue price of the debt
instrument
Increases the DST on bills of exchange or drafts from P0.30 to P0.60
Increases the DST upon acceptance of bills of exchange and others from P0.30 to P0.60
Increases the DST on foreign bills of exchange and letters of credit from P0.30 to P0.60
Increases by 100% the DST on life insurance policies
Increased the DST on policies of annuities from P0.50 to P1.00, and from P0.20 to P0.40 for pre-need plans
Increases the DST on certificates from P15.00 to P30.00
Increases the DST on warehouse receipts from P15.00 to P30.00
Increases the DST on jai-alai, horse race tickets, lotto, or other authorized numbers games from P0.10 to P0.20
for the basic DST, and additional DST collected if the cost of ticket exceeds P1.00
Increases the DST on bills of lading or receipts from of P1.00 to P2.00 if the value of goods exceeds P100 but
does not exceed P1,000, and from P10.00 to P20.00 in case the value exceeds P1,000
Increases the DST on proxies from P15.00 to P30.00
Increases the DST on powers of attorney from P5.00 to P10.00
Increases the DST on leases and other hiring agreements from P3.00 to P6.00
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18.Mortgages, pledges, and deeds of
trust
19.Deeds of sale and conveyances of
real property
20.Charter parties and similar
instruments
Increases the DST on mortgages, pledges, and deeds of trust from P20.00 to P40.00 when the amount secured
does not exceed P5,000, and from P10.00 to P20.00 for the additional DST on each P5,000 in excess of P5,000
Subjects donations of real property to the same rate of DST on deeds of sale and conveyances of real property at
P15.00 for each P1,000, with the exception of donations or transfers of real property exempt from donor’s tax
under Section 101 (A) and (B), such as gifts made to qualified non-stock, non-profit organizations, which shall be
exempt from DST
Increases the DST on charter parties and similar instruments, as follows:
Gross Tonnage Current Rate New Rate
1,000 tons and less and P500 and for each month or P1,000 and for each month or
duration of contract does not fraction of a month in excess of six fraction of a month in excess of
exceed six months months, additional P50 six months, additional P100
More than 1,000 tons but does P1,000 and for each month or P2,000 and for each month or
not exceeds 10,000 tons and fraction of a month in excess of six fraction of a month in excess of
duration of contract does not months, additional P100 six months, P200
exceed six months
More than 10,000 and P1,500 and for each month or P3,000 and for each month or
duration of contract does not fraction of a month in excess of six fraction of a month in excess of
exceed six months months, P150 six months, P300
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X. Administrative and
Compliance Reform Measures
1. Power of the commissioner to
obtain information, and to
summon, examine, and take
testimony of persons
2. Power of the commissioner to
make assessments and prescribe
additional requirements for tax
administration and enforcement
3. Authority to prescribe real
property values
4. Keeping of books of accounts
5. Registration Requirements
6. Issuance of receipts or sales or
commercial invoices
RA 10963
Mandates the Cooperative Development Authority (CDA) to submit to the BIR a tax incentive report that shall
contain information such as income tax, VAT, and other tax incentives enjoyed by cooperatives registered under
Republic Act No. 6983
Provides authority to the BIR to make an examination of a taxpayer’s record notwithstanding any provision in
other laws requiring the prior authorization or requirement to obtain approval of concerned government agency or
instrumentality in the conduct of tax audit or examination of taxpayers
1. Makes it mandatory for the BIR to consult competent appraisers in determining the fair market values of real
properties. Prior notification of affected taxpayers also mandated in determining the fair market values of
properties
2. Requires publication of revised zonal values in a newspaper of general circulation in concerned local
government unit or its posting in the provincial capitol, city, or municipal hall and in two other conspicuous
public places
3. Automatic adjustment of fair market values once every three years subject to rules and regulations to be
issued by the Secretary of Finance based on Philippine valuation standards
1. Eliminates the option granted to taxpayers with P50,000 and below quarterly sales, earnings, receipts or
output of taxpayers to use simplified set of bookkeeping records
2. Increases the threshold amount of gross quarterly sales, earnings, receipts, or output from P150,000 to P3
million of taxpayers who are required to have their books of accounts audited and examined by independent
CPAs
1. Mandates the Commissioner to simplify business registration and compliance requirements of self-employed
individuals and/or professionals
2. Increases the threshold amount of annual gross sales/receipts of taxpayers required to register under VAT
from P1.5 million to P3 million
3. Disqualifies self-employed individuals and/or professionals who elected to pay 8% tax from availing of the
optional VAT registration
1. Increases from P25 to P100 the threshold amount of sale, transfer of merchandise, or sale of service that is
required to be issued a duly-registered receipt or sale or commercial invoice
2. Makes it mandatory for taxpayers engaged in export of goods and services, e-commerce, and large taxpayers
to issue electronic receipts or sales or commercial invoices, in lieu of manual receipts or sales or commercial
invoices, within five years from the effectivity of the law and upon establishment by the BIR of a system
capable of successfully storing and processing the data collected from the receipts and/or invoices of
taxpayers required to issue electronic receipts. Taxpayers not mandated by this provision may opt to issue
electronic receipts and invoices.
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7. Electronic Sales Reporting System
8. Interest penalty rate
9. Penalty on attempt to evade tax
10. Penalty on various violations
involving printing of receipts
11. 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
12. Purchase, use, possession, sale
or offer to update, upgrade,
keeping or maintaining of sales
suppression devices
3. Requires taxpayers to keep and preserve the digital records of electronic invoices and receipts for three years
in the taxpayers’ place of business
1. Requires taxpayers engaged in export of goods and services and large taxpayers to report electronically their
sales data to the BIR through the use of electronic point of sales system. The machines and other devices to
be used for this purpose shall be at the expense of the taxpayer
2. Mandates that the data processing of sales and purchase data needs to comply with the provision of Republic
Act No. 10173 (Data Privacy Act) and Section 270 of the NIRC, as amended
1. Interest that may be imposed on unpaid amount of tax shall be twice the legal rate for loans or forbearance as
set by the BSP instead of current 20% interest rate.
2. Deficiency and delinquency interest may no longer be imposed simultaneously.
3. Deficiency interest shall be assessed and collected from the date prescribed for its payment until the full
payment or upon issuance of a notice and demand by the Commissioner, whichever comes earlier.
Increases the fine imposed on persons who willfully attempt to evade or defeat tax to P500,000 but not more
than P10 million and imprisonment of not less than six years but not more than 10 years. The current penalty
imposed is a fine of not less than P30,000 but not more than P100,000 and imprisonment of not less than two
years but not more than four years.
Increases the administrative fine to not less than P500,000 up to P10 million and imprisonment of not less than
six years but not more than 10 years imposed on persons who: (a) print invoices or receipts without authority
from the BIR, (b) print double or multiple sets of invoices or receipts, (c) print unnumbered invoices or receipts
not bearing the name, business style, TIN, and business address of the taxpayer, or (d) print other fraudulent
invoices or receipts
Imposes a penalty amounting to 1/10 of 1% of 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 P3,000, whichever
is higher, in case of failure of a taxpayer to transmit sales and purchase data entered in CRM/POS machines to
the BIR electronic sales reporting system
In case the aggregate days of violation exceed 180 days, an additional penalty of permanent closure of the
taxpayer’s business shall be imposed. Such penalty shall not apply in case the failure is due to force majeure or
for causes beyond the control of the taxpayer.
Provides that any person who uses, purchases, and offers a device that is capable of suppressing the creation of
electronic records of sales transaction in which the taxpayer is required to maintain and the modification, hiding,
or deletion of such and providing a ready means of access to them shall be punished by a fine of not less than
P500,000 but not more than P5 million with imprisonment of two to four years. However, a cumulative repression
of electronic sales record in excess of P50 million shall be considered economic sabotage and be punished with
the maximum penalty under this provision.
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13. Offenses relating to fuel marking Imposes the following penalties, in addition to the penalties imposed under applicable laws, in case of offenses
related to fuel marking:

1. Any person engaged in the sale, trade, delivery, distribution, or transportation of unmarked fuel in commercial
quantity held for domestic use or merchandise shall be punished as follows:

(a) For the first offense, a fine of P2.5 million

(b) For the second offense, a fine of P5 million
(c) For the third offense, a fine of P10 million and revocation of license to engage in any trade or business

2. 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.

3. Any person who commits any of the acts enumerated hereunder shall be punished by a fine of not less than
P1 million but not more than P5 million, and suffer imprisonment of not less than four years but not more
than eight years:

(a) making, importing, selling, using, or possessing fuel markers without authority
(b) making, importing, selling, using or possessing counterfeit fuel markers
(c) causing another person or entity to commit any of the two preceding acts
(d) 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

4. 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 be punished by a fine of not less than P5 million but
not more than P10 million, and suffer imprisonment of not less than four years but not more than eight years.

5. 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,

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14. Violations Committed by
Government Enforcement Officers
15. Disposition of incremental
revenue
shall suffer the additional penalty of imprisonment ranging from one year and one day to two years and six
months.
The additional penalties of revocation of the license to practice his/her profession in case of a practitioner,
and the closure of the fuel testing facility, may also be imposed at the instance of the court.
Includes failure of any BIR officer to act on the application for VAT refunds within the prescribed period under
Section 112.
1. Includes a new provision on the appropriation of incremental revenues derived from TRAIN. At the end of five
years from the effectivity of the TRAIN Law, all earmarking provisions shall cease to exist and all incremental
revenues to be derived shall accrue to the general fund of the government.
2. Incremental revenues from tobacco taxes shall be subject to Section 3 of Republic Act No. 7171 and Republic
Act No. 8240 – Vetoed by the President.
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