EIGHT (8) ITEMS IN THE TAX REFORM FOR ACCELERATION AND INCLUSION (TRAIN) LAW THAT YOU PROBABLY DIDN’T KNOW

1. Deadline for filing of annual Income Tax Return (ITR)

Before: April 15 (both for the 1st Quarterly ITR and Annual ITR)

Now: May 15 – for the 1st Quarterly ITR of self-employed individuals and professionals (BIR 1701Q). The deadline for the Annual ITR remains the same which is April 15 of every year.

For authorized substituted filing, the deadline for the filing and submission of BIR 2316 remains the same.

Additional Info: GMA News TV

2. Personal and additional exemptions have been removed

Before: personal exemption of P50,000 and additional exemption of P25,000 per qualified dependent.

Now: No more personal and additional exemption can be claimed.

Additional Info: ABS-CBN News

3. Tax on lotto winnings and PCSO prizes

Before: Lotto winnings and all PCSO prizes are tax-exempt.

Now: All PCSO and lotto prizes are taxed 20% if the amount of the prize or winnings is above ten thousand pesos (P10,000).

Additional Info: Manila Times

4. Tax on stock transactions

Sale of stocks not traded in the Philippine Stock Exchange (PSE)

Before: Tax Rate is 5-10%.

Now: Tax Rate is 15%.

Sale of stocks that are traded in the PSE

Before: Tax Rate is 0.5% of the gross trade amount

Now: Tax Rate is 0.6% of the gross trade amount

Additional Info: Inquirer.Net

5. Documentary Stamps (Doc Stamps) Tax

DST On original issue of shares of stocks:

Before: P1.00 on each P200

After: P2.00 on each P200

DST On Sale, Agreements to Sell, Memoranda of Sales, Deliveries and Transfer of Sales, or Certificates of Stocks

Before: P0.75 on each P200

After: P1.50 on each P200

DST on Certificate of Profits or Interest in Property or Accumulations

Before: P0.50 on each P200

After: P1.00 on each P200

More DST rates in Revenue Regulation No. 4-2018 dated December 19, 2017

Additional Info: Port Calls

6. Donor’s Tax

Before: The donor’s tax was 2% to 15% if the donor and donee are related, and 30% if the donation was to a stranger.

Now: The donor’s tax was revised to a flat rate of 6% regardless of the relationship between the donor and the donee.

Donations or gifts below P250,000 are tax-exempt. Donations with value of at least P250,000 are taxed using the new rate of 6% on the amount in excess of P250,000.

Additional Info: Pinoy Money Talk

7. Estate Tax

Before: Under current tax laws, only family homes worth P1 million are tax-exempt.

Now: The estate tax is now a flat 6% rate on the amount in excess of P5 million. Estates with a net value of P5 million and below will be tax-exempt. Family homes that are valued at no more than P10 million will also be exempted.

Additional Info: Business Mirror

8. Tax Exempt on 13th Month Pay and Other Benefits

Before: ₱82,000

Now: ₱90,000

Additional Info: The Corpus Juris

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Photo Credit: ABS-CBN News