Other Percentage Tax

Diso, Hafisah B.
Mr. Christopher De Guzman, CPA ACT 205
Assignment – Other Percentage Tax
Sec. 123 – Life Insurance Premiums Tax; Sec. 124 – Insurance Agents
1. Pro-Life Insurance is engaged in business. It also serves as an agent of a marine

foreign insurance company. It has the following data for the current month:
Total premium collected as an agent of a foreign insurance company
2,000,000
Total premium collected from non-life insurance business
500,000
Purchase of supplies for use in non-life business
300,000
How much is the tax for total premiums collected as an agent of a foreign
insurance company?
 Tax on Agents of Foreign Insurance Co. = P2,000,000 x4% = P80,000
2. Using the same data in the preceding problem, how much is the VAT payable?
 Output vat (P500 000x1200) P60,000
Less: Input vat (P300.000 * 129) (36, 000)
Vat payable 24,000
3. A domestic insurance company has the following data for 2018:

Premiums collected on life insurance policies 2,000,000
Premiums returned within 6 mos. After the payment on
account of rejection of risk (part of the total
premiums collected) 500,000
Reinsurance premium (tax has already been paid) 200,000
Premiums collected by branch doing business outside
the Philippines from nonresident policy holders
300,000
How much is the tax on life insurance premiums?

 Premium collected on life insurances policies P2,000,000
Multiply: Tax Rate 2%
Premium Tax Payable P40,000
Sec. 125 – Amusement Tax
Mr. Talion operates a cockpit. Result of operations for 2018 were provided as follows:
Gross receipts:
Cockpit operations 4,000,000
Restaurant operations 1,850,000
Purchases:
Supplies for cockpit operations (net of VAT) 750,000
Supplies for restaurant operations (invoice amount) 224,000
Required: Determine the following:
4. Total business tax due of Mr. Talion.

 Gross receipts P5,850,000
Multiply: Tax rate 18 %
Total business tax due P1,053,000
5. Amusement tax due of Mr. Talion assuming the restaurant is operated by GJ

Company, a non-VAT registered entity whose annual gross receipts is lower
than the vat threshold.
 Cockpit operations P4,000,000
Multiply: Tax rate 18 %
Total business tax due P720,000
6. Using the assumption in the preceding number, how much is the business tax
due of GJ Company.
 Restaurant operations P1,850,000
Multiply: Tax rate 3%
Total business tax due 55,500
7. Assuming GJ is a VAT registered entity, how much is its VAT payable for the
year?
 Output tax 222,000
Input tax (24,000)
Vat payable 198,000
Sec. 126 – Tax on Winnings
8. A racetrack bettor won the following bets:
 On double, a bet of P 400 and dividend of P 400 per P 40 ticket.

 On winner take all, a bet of P 1,000 and a dividend of P 2,000 per P 100
ticket.
 On forecast, a bet of P 2,000 and dividend of P 200 per P 20 ticket.
The total percentage tax due from the winnings is:

 P 200/20 x P 200 = 2,000 –200 = 1800 x 4% = 72
P 500/50 x P 1,000 = 10,000 –500 = 9,500 x 10% = 950
P 1000/20x P 100= 5,000 –1,000 = 4,000 x 4% = 160
Total taxes = 72+950+160 = P1,182
Sec. 127 – Stocks Transactions Tax and IPO Tax
Determine the applicable business tax due of the following:

9. Juan invested 10,000 shares for P 400,000 in the shares of stock of Panatag
Corporation, a closely held corporation. During the year, Juan sold 50% of his
shares to Pedro for P 50 per share.
10.Mark invested 5,000 shares for P 250,000 in the shares of stock of Amscor
Corporation, a closely held corporation. During the year, Mark sold all his
shares to Villar for P35 per share.
11.Assume that the same data in (a) except that Juan is a registered dealer of
securities. P1,500
12.George is the shareholder of GJ Corporation, a listed entity. During 2018, he
sold his 5,000 shareholdings for P 120,000 which he purchased for P20 per
share. P120
13. Assume that same data in the preceding number except that George sold
the shares for P 18 per share. P540
Dreamland Company, a closely held corporation, has an authorized capital of P

1,000,000 with par value of P 10 per share. As of December 31, 2017, outstanding
shares amounted to P 250,000. The company offered its share to the public for the
first time on June 30, 2018. 10,000 shares were sold at initial public offering for P
150,000. On October 2018 Leomar (existing shareholder) sold his 1,000 shares for P
20,000.
Determine the following:
14.Business tax due on June 30, 2018

 Initial Public Offering P150,000
Business tax due P3,000
15.Business tax due in October 2018.

 Existing shareholders sold P20,000
Business tax due P1,200

Other Percentage Tax

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Diso, Hafisah B.

Mr. Christopher De Guzman, CPA ACT 205

Assignment – Other Percentage Tax

1. Pro-Life Insurance is engaged in business. It also serves as an agent of a marine

3. A domestic insurance company has the following data for 2018:

How much is the tax on life insurance premiums?

Sec. 125 – Amusement Tax

Required: Determine the following:

4. Total business tax due of Mr. Talion.

5. Amusement tax due of Mr. Talion assuming the restaurant is operated by GJ

Sec. 126 – Tax on Winnings

8. A racetrack bettor won the following bets:

 On double, a bet of P 400 and dividend of P 400 per P 40 ticket.

The total percentage tax due from the winnings is:

Sec. 127 – Stocks Transactions Tax and IPO Tax

Determine the applicable business tax due of the following:

Dreamland Company, a closely held corporation, has an authorized capital of P

Determine the following:

14.Business tax due on June 30, 2018

15.Business tax due in October 2018.

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