How to compute Percentage Tax in the Philippines

This article aims to guide businessmen and professionals in computing their percentage tax payable to the BIR. Your humble friend here is also subject to percentage tax. Accordingly, I’m also paying percentage tax every month aside from quarterly and annual income tax payables. Percentage tax, like Value Added Tax (VAT), is also considered as a business tax rather than an income tax. This means that whether you generate income or incur a loss, as long as you have sales or revenue, you must pay a percentage tax. This is because business taxes are taxes based on gross sales or receipts rather than based on net income (before income tax). Read more