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    Trabaho Bill

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    The TRABAHO bill aims to attract more investments and improve tax incentives. It lowers the corporate income tax rate from 30% to 20% over 10 years. It also rationalizes tax incentives to make them performance-based, targeted, time-bound, and transparent. The bill updates rules for other taxes and incentives like optional standard deductions. It establishes a single incentive menu focusing on income tax holidays, duty exemptions, and VAT benefits for registered exporters. The bill also clarifies rules around improperly accumulated earnings tax exemptions.

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    Trabaho Bill

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    106 views14 pages
    The TRABAHO bill aims to attract more investments and improve tax incentives. It lowers the corporate income tax rate from 30% to 20% over 10 years. It also rationalizes tax incentives to make them performance-based, targeted, time-bound, and transparent. The bill updates rules for other taxes and incentives like optional standard deductions. It establishes a single incentive menu focusing on income tax holidays, duty exemptions, and VAT benefits for registered exporters. The bill also clarifies rules around improperly accumulated earnings tax exemptions.

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    TRABAHO BILL PPT

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    The TRABAHO bill aims to attract more investments and improve tax incentives. It lowers the corporate income tax rate from 30% to 20% over 10 years. It also rationalizes tax incentives to make them performance-based, targeted, time-bound, and transparent. The bill updates rules for other taxes and incentives like optional standard deductions. It establishes a single incentive menu focusing on income tax holidays, duty exemptions, and VAT benefits for registered exporters. The bill also clarifies rules around improperly accumulated earnings tax exemptions.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    106 views14 pages

    Trabaho Bill

    Uploaded by

    Avia Color
    The TRABAHO bill aims to attract more investments and improve tax incentives. It lowers the corporate income tax rate from 30% to 20% over 10 years. It also rationalizes tax incentives to make them performance-based, targeted, time-bound, and transparent. The bill updates rules for other taxes and incentives like optional standard deductions. It establishes a single incentive menu focusing on income tax holidays, duty exemptions, and VAT benefits for registered exporters. The bill also clarifies rules around improperly accumulated earnings tax exemptions.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 14

    Tax Reform for Attracting Better and

    High-quality Opportunities

    TRABAHO BILL
    TRABAHO Bill

    In September 2018, the House of


    Representatives approved House
    B i l l 8 0 8 3 o r Ta x R e f o r m f o r
    Attracting Better and High-quality
    Opportunities — the TRABAHO bill
    in short.
    TWO PRIMARY OBJECTIVES:
    1) to bring in more investments by lowering
    the tax rate for businesses, otherwise known as
    the corporate income tax rate (CIT)

    2) to update the rules on tax incentives


    given to corporations to make it more fair,
    competitive, and to increase tax revenue
    TRAIN 1 TRABAHO Bill

     focused on personal taxes  to incentivize corporate


    of individuals (personal investments in the country.
    income tax, value added The rationalization of the tax
    tax, and others) incentives by making them
    performance-based, targeted,
    time-bound, and transparent.
    CORPORATE INCOME TAX (CIT)
    JANUARY JANUARY
    2019 2029

    30% 20%
    2% EVERY
    TWO YEARS
    The reduction of the corporate
    income tax rate will take effect
    starting 2021
    "Ina-adjust natin 'yung CIT kasi
    it is a clear and present danger
    to the competitiveness of the
    Philippines. Other countries have
    been bringing down their
    corporate income tax,"

    -Albay Rep. Joey Salceda


    Changes in some of the provision of
    the Tax code
    • The 15% gross income will no longer be available
    starting 2019.

    • The availment of the 10% preferential income tax rate


    that is enjoyed by Proprietary educational institutions and
    hospitals, will be subject to compliance by the CHED,
    DepEd, and DOH.
    Changes in some of the provision of
    the Tax code
    • The 40% OSD rate and base will be uniform for
    individual and corporate taxpayers at 40% of gross
    income.
    • For corporations, availment of OSD will be limited to
    those classified as micro, small, and medium-sized
    enterprises as determined by the Department of Trade
    and Industry.
    Rationalization of tax incentives
    Strategic Investments Priority Plan
    1. Substantial amount of investments:
    2. Considerable generation of employment:
    3. Adoption of inclusive business activities and value-added production by
    MSMEs;
    4. Use of modern or new technology;
    5. Adoption of adequate environmental protection systems;
    6. Addressing missing gaps in the supply/value chain or moving up the
    value chain or product ladder;
    7. Promotion of market competitiveness
    Single Incentive Menu
    • Income tax incentives
    Income Tax Holiday (ITH)
    - The ITH shall be granted for a period not
    exceeding 3 years: provided, that after the expiration of the ITH, the
    other income tax incentives may be applied for a period not exceeding
    5 years, which includes the period of ITH availment.
    Customs duty incentives
    - Exemption from customs duty on importation of capital
    equipment and raw materials directly and exclusively used in the
    registered activity for a period not exceeding 5 years.
    Single Incentive Menu

    • VAT incentives
    Registered export enterprise whose export sales meet the
    90% threshold and are located within an ecozone, freeport, or those
    utilizing customs bonded manufacturing warehouse may be given
    VAT zero-rating on export sales, or on importation or domestic
    purchases of capital equipment and raw materials used in the
    manufacture and processing of products.
    Related to Corporation Taxes

    Improperly Accumulated Earnings Tax (IAET)

    The criteria to determine the liability for the IAET is the purpose
    of the accumulation of the income and not the consequences of
    the accumulation. That is, if a company allows its earnings or
    profits to accumulate within its reasonable needs, then it would not
    be subject to the tax unless proven to the contrary.
    EXEMPTED FROM IAET
     banks and other nonbank financial intermediaries
     insurance companies
     publicly-held corporations
     taxable partnerships
     general professional partnerships
     non-taxable joint ventures
     duly registered enterprises located within the special economic zones
    declared by law which enjoy payment of special tax rate on their
    registered operations or activities in lieu of other taxes, national or local.
    E N D

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