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8 TRAIN Tax Reform Items that You Probably Didn’t Know

1. Deadline for filing of annual Income Tax Return (ITR)

Before: April 15
Now: May 15

2. Personal and additional exemptions have been removed

Before: personal exemption of P50,000 and additional exemption of P25,000 per qualified dependent

Now: None

3. Tax on lotto winnings and PCSO prizes

Before: Lotto winnings and all PCSO prizes are tax-exempt

Now: all PCSO and lotto prizes are taxed 20% if the amount of the prize or winnings is above ten thousand pesos (P10,000).

4. Tax on stock transactions

Sale of stocks not traded in the Philippine Stock Exchange (PSE)

Before: Tax Rate is 5-10%.
Now: Tax Rate is 15%.

Sale of stocks that are traded in the PSE

Before: Tax Rate is 0.5% of the gross trade amount
Now: Tax Rate is 0.6% of the gross trade amount

5. Documentary Stamps (Doc Stamps) Tax

Before: DST is from ₱0.75 to ₱1.50
Now: DST is doubled at ₱1.50 to ₱3.00

6. Donor’s Tax

Before: The donor’s tax was 2% to 15% if the donor and donee are related, and 30% if the donation was to a stranger.

Now: The donor’s tax was revised to a flat rate of 6% regardless of the relationship between the donor and the donee.

Donations or gifts below P250,000 are tax-exempt. Donations with value of at least P250,000 are taxed using the new rate of 6% on the amount in excess of P250,000.

7. Estate Tax

Before: Under current tax laws, only family homes worth P1 million are tax-exempt.

Now: The estate tax is now a flat 6% rate on the amount in excess of P5 million. Estates with a net value of P5 million and below will be tax-exempt. Family homes that are valued at no more than P10 million will also be exempted.

8. Tax Exempt on 13th Month Pay and Other Benefits

Before: ₱82,000
Now: ₱90,000

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