RR No. 09-2004: Implements certain provisions of Republic Act No. 9238, re-imposing the gross receipts tax on banks and non-bank financial intermediaries performing quasi-banking functions and other non-bank financial intermediaries beginning January 1, 2004

Key points

1. Rates for banks and quasi-banking intermediaries. Tax on gross receipts from Philippine sources is 5% on interest, commissions, discounts and financial leasing income with remaining maturity of 5 years or less, and 1% if more than 5 years. Dividends and equity shares in subsidiaries’ net income are 0%, while royalties, rentals, exchange profit and other Section 32 gross income items, and net trading gains, are 5%.
2. Net trading gain reporting. The monthly GRT return reports the cumulative net trading gain or loss since the first month of the taxable year, less figures already reflected in earlier months. A net trading loss may be deducted only from net trading gain, not from other gross receipts.
3. Other non-bank financial intermediaries. Those not performing quasi-banking functions pay 5% on interest, commissions, discounts and other gross income items. Lending and financial leasing income is 5% for maturity of 5 years or less and 1% for more than 5 years.
4. Leases. For financial leasing, taxable gross receipts are only interest income, while operating lease gross receipts are the gross rental amount. Whether a lease is finance or operating depends on the substance of the agreement, not the form.
5. Basis of computation. Generally accepted accounting principles prescribed by the Bangko Sentral ng Pilipinas (banks and quasi-banking intermediaries) or the Securities and Exchange Commission (other non-bank intermediaries) are the basis. The financial statements used must also follow those principles.
6. Pre-termination. If the maturity period is shortened by pre-termination, it ends on the date of pre-termination for classifying the transaction and applying the rate. Any tax adjustment appears as a separate item in the GRT return for the month of the pre-termination.

Who is affected

• Banks
• Non-bank financial intermediaries performing quasi-banking functions
• Other non-bank financial intermediaries

Deadlines and effectivity

• GRT re-imposed beginning January 1, 2004