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
Slide2Legal Basis
RA 7432 / RR 2-94RA 9257 / RR 4-2006RA 9994
RMC 45-2010 RR 7-2010 RR 8-20102
Slide3PRIVILEGES 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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Slide4PRIVILEGES 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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Slide5PRIVILEGES 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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Slide6PRIVILEGES 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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Slide7PRIVILEGES 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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Slide8PRIVILEGES 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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Slide9Special 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
Slide10Special 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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Slide11Special Features
SC can avail of the promotional discount or the discount provided herein, whichever is higher
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Slide12Tax 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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Slide13Tax 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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Slide14Tax 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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Slide15Tax 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
Slide16Tax 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
Slide17Tax 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
Slide18Tax 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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Slide19Conditions 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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Slide20Conditions 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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Slide21Conditions 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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Slide22Conditions 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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Slide23Exemption 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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Slide24Exemption 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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Slide25Illustration
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Slide26VAT Payable
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Slide27Taxable Income
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Slide28Income 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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Slide29Income 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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Slide30Income 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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Slide31Income 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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Slide32TAXES ON PASSIVE INCOME
20% final withholding tax on interest income; royalties; prizes and other winnings
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Slide33TAXES 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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Slide34TAXES 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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Slide35TAXES ON PASSIVE INCOME
10% final withholding tax on cash and/or property dividends
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Slide36TAXES 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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Slide37LIABILITY 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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Slide38Availment 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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Slide39Availment 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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Slide40Availment 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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Slide41Availment 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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Slide42Additional 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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Slide43Additional 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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Slide44Penalties 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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Slide45Penalties 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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Slide46Penalties 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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Slide47Penalties 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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BENEFITS AND PRIVILEGES OF SENIOR CITIZEN
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