The Tax Reform for Acceleration and Inclusion Law (Republic Act No.

10963)

The Tax Reform for Acceleration and Inclusion (TRAIN), otherwise known as RA 10963, is the
first package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP)
which seeks to propose major changes in the Philippine tax system. It was signed into law by
President Rodrigo Duterte last Dec. 19 and implemented on Jan. 1 of this year.

BEFORE AFTER

 Below Php 10,000 – 5%  Below Php 250,000 – 0%

 Over Php 500,000 – 32%
 Exclusions/Deductions- Personal
Exemption of Php 50,000 and
Php 25,000/dependent
 13th month pay and other
Personal bonuses worth – Php 82,000
Income  Employees of RHQ, ROHQ, OBU,
and Petroleum Service
Contractors – 15% (For
Businesses registered before
2018)
 Deadline for 1st Quarter and
Annual ITR – April 15
 Deadline for 2nd installment of
Annual Income Tax Due – July 15
 FBT rate – 32%
 Over Php 8M – 35% 
(OPTIONAL: On gross revenues for
self-employed below Php 3M)
 Exclusions/Deductions- No
Personal/Additional Exemption
 13th month pay and other bonuses
worth – Php 90,000
 Employees of RHQ, ROHQ, OBU,
and Petroleum Service Contractors
registered by Jan. 1, 2018 – 0%-
35%
 Deadline for 1st Quarter and Annual
ITR – May 15
 Deadline for 2nd installment of
Annual Income Tax Due – Oct 15
 FBT rate – 35%

 PCSO & Lotto Winnings – Exempt
 Interest on FCDU deposits – 7.5%
Passive  CGT on unlisted shares – 5% or
Income 10%
 SIT on listed shares – 0.50 of 1%
 PCSO & Lotto Winnings – Taxable
above Php 10,000
 FCDU deposits – 15%
 CGT on unlisted shares sold by
individuals and domestic
corporations – 35%
 SIT on listed shares – 0.60 of 1%

 Using caloric & non-caloric

sweeteners – Php 6.00/liter
Sweetened None  Using high-fructose corn syrup –
Beverages Php 12.00/liter
 Fuels  Diesel – Php 0.00 per liter
 Unleaded & Premium
Gasoline – Php 4.35 per liter
 Progressive rates – 5% of
20%
Estate  Exemption of Family Home –
Php 1M
 Standard deduction – Php 1M
 Deadline – within 6 months
 Final Withholding tax – non
 2%-15% on donations to
relatives
Donations  30% on donations to
strangers (hereby referred by
law as donations of
corporations and other
juridical entities)
Documentar Documentary stamp tax on various
y Stamp
 2% for up to Php 600,000
 Php 12,000 + 20% of excess
over Php 600,000
 Php 112,000 + 40% of excess
Automobiles over Php 1.1M
 Php 512,000 + 60% of excess
over Php 2.1M
 Excise tax of Php 31.20 per
 Diesel
o Php 2.50 – 2018
o Php 4.50 – 2019
o Php 6.00 – 2020
 Gasoline
o Php 7.00 – 2018
o Php 9.00 – 2019
o Php 10.00 – 2020
 A flat rate of – 6%
 Exemption of Family Home –
Php 10M
 Standard deduction – Php 5M
 Deadline – within 1 year
 Final Withholding tax on bank
withdrawals – 6%
A single tax rate of 6% of net donations
for gifts above Php 250,000 yearly
regardless of relationship to donor.
100% increase in rate, except for:
 DST loans, from Php 1.00 to
Php 1.50 per Php 200
 No increase on sale of real
property and certain insurance
policies
 4% for up to Php 600,000
 10% for over Php 600,000 to
Php 1M
 20% for over Php 1M to Php
4M
 50% for over Php 4M
 Php 32.50 – Jan 2018
 Tobacco  Php 35.00 – Jan 2019
Products pack  Php 37.50 – Jan 2020
 4% annual increase  Php 40.00 – Jan 2022

Coal  Excise tax of Php 10.00 per  Php 50.00 – Jan 2018
Minerals metric ton of coal  Php 100.00 – Jan 2019
 Various rates on other  Php 150.00 – Jan 2020
minerals  100% increase in rate of other
minerals

Cosmetic None 5% on cosmetic procedures for

Procedures aesthetics reasons

Tax Filing Monthly filing of Quarterly filing of withholding (except

withholding/percentage tax returns compensation)/percentage tax returns

Value-Added  Threshold – Php 1,919,200

Tax  Sales of Medicines – 12%
 Association dues – 12%
 Amortization of input VAT on
capital goods
 Transfer under 40(c)(2) –
12%
 VAT-exempt sale of
residential lot – not more than
Php 1,919,200; house and lot
– not more than Php
3,199,200
 Sales of goods to PEZA – 0%
 Threshold – Php 3M
 Sales of Medicines for diabetes,
high cholesterol, and hyper-
tension – VAT-exempt
 Association dues – VAT-
exempt
 Amortization of input VAT on
capital goods – repealed by
2022
 Transfer under 40(c)(2) – VAT-
exempt
 VAT-exempt sale of residential
lot – not more than Php 1.5M;
house and lot – not more than
Php 2.5M (By 2021, only house
and lot – not more than Php
2M)
 Sales of goods to PEZA – 12%
upon implementation of
enhanced VAT refund system

Penalty 20% Per annum Double the legal interest rate per
Interest annum 6%x 2 = 12%