BENEFITS AND PRIVILEGES OF SENIOR CITIZEN

BENEFITS AND PRIVILEGES OF SENIOR CITIZEN BENEFITS AND PRIVILEGES OF SENIOR CITIZEN - Start

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BENEFITS AND PRIVILEGES OF SENIOR CITIZEN - Description

1. Presented by:. Miss Cynthia E. . Omeres. Revenue Officer. Assessment Division. Legal Basis. RA 7432 / RR 2-94. RA 9257 / RR 4-2006. RA 9994 . RMC 45-2010 . RR 7-2010. RR 8-2010. 2. PRIVILEGES for the SENIOR CITIZENS. ID: 723398 Download Presentation

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BENEFITS AND PRIVILEGES OF SENIOR CITIZEN




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Presentations text content in BENEFITS AND PRIVILEGES OF SENIOR CITIZEN

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BENEFITS AND PRIVILEGES OF SENIOR CITIZEN

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Presented by:

Miss Cynthia E.

Omeres

Revenue Officer

Assessment Division

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Legal Basis

RA 7432 / RR 2-94RA 9257 / RR 4-2006RA 9994

RMC 45-2010 RR 7-2010 RR 8-20102

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PRIVILEGES for the SENIOR CITIZENS

The grant of twenty percent (20%) discount and exemption from the value added tax (VAT) on the sale of the following goods and services:

on the purchase of medicines

on the professional fees of attending physician/s

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PRIVILEGES for the SENIOR CITIZENS

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n the professional fees of licensed professional health providing home health care serviceson medical and dental services, diagnostic and laboratory fees

in actual fare for land transportation travel

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n actual transportation fare for domestic air transport services and sea shipping vessels and the like

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PRIVILEGES for the SENIOR CITIZENS

on the utilization of services in hotels and similar lodging establishments, restaurants and recreation centers

on admission fees charged by theaters, cinema houses and concert halls, leisure and amusementon funeral and burial services for the death of senior citizens

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PRIVILEGES for the SENIOR CITIZENS

Example: Total Selling Price (inclusive of VAT)

199.95 Less: 12% VAT 21.42 Total Selling Price (net of VAT) 178.53 Less: 20% discount 35.71

Amount Payable by the Senior Citizen

142.82

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PRIVILEGES for the SENIOR CITIZENS

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xemption from the payment of individual income taxes of senior citizens who are considered to be minimum wage earners in accordance with Republic Act No. 9504

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PRIVILEGES for the SENIOR CITIZENS

the grant of a minimum of five percent (5%) discount relative to the monthly utilization of water and electricity supplied by the public utilities

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Special Features

The granting of exemptions and discounts shall be for the exclusive use and enjoyment or availment

of the senior citizen on the purchase of goods and services enumerated in this Act.9

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Special Features

In the availment of the privileges, the senior citizen or his/her duly authorized representative, may submit any of the ff:

OSCA ID (being honored nationwide)PassportOther docs to establish that SC is citizen of the Republic and at least 60 years of age

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Special Features

SC can avail of the promotional discount or the discount provided herein, whichever is higher

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Tax Treatment of the Discount Granted to SC

Establishments granting the discount may claim the discounts granted as a tax deduction based on the undiscounted SP of the goods sold or services rendered.

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Tax Treatment of the Discount Granted to SC

The selling price to be charged by the seller must be net of VAT because SC is exempt from VAT

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Tax Treatment of the Discount Granted to SC

The cost of discount shall be allowed as a deduction from the gross income for the same taxable year

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Tax Treatment of the Discount

Granted to SCThe discount granted by the seller of qualified goods and services, i.e., the promotional discount, 20% discount, 5% discount on water and electricity and 50% discount of utilities for SC

Centers15

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Tax Treatment of the Discount Granted to SC

Cont.

shall be treated as an ordinary and necessary expense under the category of itemized deduction and can only be claimed if the seller does not opt the OSD.16

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Tax Treatment of the Discount Granted to SC

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Example: Total Selling Price (inclusive of VAT) 199.95

Less: 12% VAT 21.42

Total Selling Price

(net of VAT)

178.53

Less: 20% discount 35.71

Amount Payable by the Senior Citizen

142.82

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Tax Treatment of the Discount

Granted to SCThe entry to record the transaction in the books of the seller:

Debit Credit Cash 142.82Senior Citizen Discount Expense 35.71

Sales 178.53

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Conditions in claiming the discount granted as an additional item of deduction:

The discount can only be allowed as a deduction from gross income for the same taxable year that the discount is granted;

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Conditions in claiming the discount granted as an additional item of deduction:

Required to keep accurate record of sales Name of SC

OSCA IDGross Sales/ReceiptsSales discount granted Date of transactionInvoice No. of every transaction

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Conditions in claiming the discount granted as an additional item of deduction:

Only that portion of the gross sales exclusively used, consumed or enjoyed by the SC shall be eligible for the deductible sales discount;

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Conditions in claiming the discount granted as an additional item of deduction:

The gross selling price and the sales discount must be separately indicated in the OR or SI

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Exemption from VAT

The seller must follow the invoicing requirement (RR 16-2005). If using POS, the machine tape must segregate exempt sales from taxable sales;

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Exemption from VAT

The input tax attributable to the exempt sale shall not be allowed as input tax credit and must be closed to cost or expense account.The exemption shall not cover indirect taxes

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Illustration

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VAT Payable

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Taxable Income

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Income Tax of Senior Citizen

Generally, qualified SC deriving returnable income, whether from compensation or otherwise, are required to file and pay income tax;

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Income Tax of Senior Citizen

If qualifies as Minimum Wage EarnerExempt from income tax subject to the provisions of RR 10-2008

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Income Tax of Senior Citizen

If aggregate amount of gross income do not exceed the personal (basic and additional) Exempt from Income TaxNot required to file ITR

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Income Tax of Senior Citizen

The exemption of SC will not extend to all types of income earned during the taxable year.

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TAXES ON PASSIVE INCOME

20% final withholding tax on interest income; royalties; prizes and other winnings

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TAXES ON PASSIVE INCOME

7.5 % final withholding tax on interest income from a depositary bank under the expanded foreign currency deposit system

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TAXES ON PASSIVE INCOME

Withholding taxes on interest income on pre-terminated long term deposit:

less than 3 years = 20 % 3 years to less than 4 years = 12 %

4 years to less than 5

years =

5

%

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TAXES ON PASSIVE INCOME

10% final withholding tax on cash and/or property dividends

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TAXES ON PASSIVE INCOME

Capital gains tax from sales of shares of stock not traded in the stock exchange

6% final withholding tax on presumed capital gains from the sale of real property

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LIABILITY FOR OTHER INTERNAL REVENUE TAXES

VAT or other percentage taxes

Donor’s taxEstate tax

Excise tax on certain goods and

Documentary stamp tax

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Availment of Income Tax Exemption of SC

A SC who is MWE, or whose income does not exceed his personal exemption, will be exempt from income tax upon compliance with the ff:

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Availment of Income Tax Exemption of SC

A SC must first be qualified by submitting a certified true copy of OSCA ID CardMust file a sworn statement on or before Jan. 31 of every year that his taxable income of the previous year does not exceed the poverty level

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Availment of Income Tax Exemption of SC

If qualified, his name shall be recorded by the RDO in the Master List of Tax-Exempt SC for that particular year

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Availment of Income Tax Exemption of SC

A senior citizen who is entitled to substituted filing is not required to file ITR pursuant to RR 2-98 as amended.

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Additional Deduction for those Employing Senior Citizen

Private establishments are entitled to additional deduction of 15% of total amount paid as salaries and wages

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Additional Deduction for those Employing Senior Citizen

The employment shall have to continue for a period of at least six (6) monthsThe annual taxable income of SC does not exceed the poverty level. The SC shall submit sworn certification.

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Penalties and Sanctions

1st offense – Penalty of not less than P50K but not more than P100k and imprisonment of not less than 2 yrs and not more than 6 yrs.

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Penalties and Sanctions

Subsequent violation - Penalty of not less than P100K but not more than P200k and imprisonment of not less than 2 yrs and not more than 6 yrs.

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Penalties and Sanctions

Any person who abuses the privileges shall be punished with a fine of not less than P50K and not more than P100K and imprisonment of not less than 6 months

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Penalties and Sanctions

For alien or foreigner – may suffer deportationIf the offender is a corporation/organization, the official/s directly involved shall be liable.

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Thank you!!!

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