Quarterly filing of Percentage Tax Return

This Tax Alert is issued to inform all concerned on the status of the filing and payment deadline for remittance of percentage tax pursuant to TRAIN Law.

Under the TRAIN Law (RA No. 10963), the percentage tax return shall be due quarterly within 25 days from the close of the taxable quarter (TQ).

Hence, following the TRAIN Law, filing and payment of percentage tax returns of the following taxpayers should already be on a quarterly basis from the previous monthly filing and remittance:

  1. VAT-exempt taxpayers with annual revenues not exceeding P3M;
  2. domestic carriers and keepers of garages, international air/shipping carriers;
  3. franchisees of gas or water utilities, franchisees of radio and/or TV broadcasting with revenues not exceeding P10M;
  4. banks, non-bank financial intermediaries and finance companies, life insurance companies; and
  5. agent of foreign insurance companies.

We note that the BIR recently posted an advisory requiring VAT-exempt taxpayers with annual revenues not exceeding P3M (Section 116 of the Tax Code) to pay percentage tax on a quarterly basis using BIR Form No. 2551Q. However, the advisory did not mention the other percentage taxpayers such as the banks. Also, the advisory has been taken down from the BIR’s website. Thus, pending BIR’s advisory, it shall be conservative to still follow the old monthly filing and payment deadlines until the BIR issues the implementing rules and regulations on the quarterly filing and payment of the percentage tax returns.