TARLAC STATE UNIVERSITY - COLLEGE OF BUSINESS AND ACCOUNTANCY
2ND SEMESTER ACADEMIC YEAR 2021-2022
TAX 3 – SPECIAL TAXATION
SENIOR CITIZENS LAW Grants of Discounts to Senior Citizens
A. 20% discount from all establishments supplying
Senior Citizen – refers to any Filipino who is a resident
certain goods and services for the exclusive use
of the Philippines and who is 60 years old and above.
and enjoyment or availment of the senior citizen.
It may apply to senior citizens with “dual citizenship”
status provided they prove their Filipino citizenship and B. 5% discount on the monthly utilization of water
have at least 6 months residency in the Philippines. and electricity supplied by public utilities to the
senior citizen provided that;
Minimum Wage Earner senior citizen shall be exempt ✓ Individual meters are registered in the name of
from the payment of individual income tax and shall the senior citizen residing therein.
not be required to file an income tax return if the
returnable income is in the nature of compensation ✓ Monthly consumption does not exceed one
income. hundred kilowatt hours (100kWh) of electricity
and thirty cubic meters (30m3) of water.
Requirements for Exemption from Income Tax:
Note: the privilege is granted per household
✓ Must first be qualified as such by the CIR or his regardless of the number of senior citizens
duly representative (RDO having jurisdiction over residing therein.
the place where the senior citizen resides) by
submitting a certified true copy of his/her Senior C. 50% discount on the consumption of water,
Citizen Identification Card (OSCA ID) issued by the electricity and telephone supplied by public
OSCA of the City or Municipality where the senior utilities to Senior Citizen Center and Residential
citizen resides; Care/Group/Homes administered by the
Government or domestic NGOs organized and
✓ Must file a Sworn Statement on or before January operated primarily for the purpose of promoting
31 of every year that his annual taxable income for the well-being of abandoned, neglected,
the previous year does not exceed the poverty unattached or homeless senior citizens, subject to
level as determined by the NEDA through the the guidelines formulated by the DSWD.
NSCB; and
✓ If qualified, his/her name shall be recorded by the In the purchase of goods and services which have
RDO in the Master List of Tax Exempt Senior promotional discount, the senior citizen can avail of the
Citizens for that particular year, which the RDO is promotional discount or the senior citizen discount
mandatorily required to keep. whichever is higher.
A senior citizen who is also a PWD can claim only one
A senior citizen, however, shall be subject to the final
discount.
income taxes on his/her passive income, including the
capital gains taxes from sale of shares of stocks not Discounts granted to senior citizens by the seller of
traded in the local stock exchange and from sale of real qualified goods and services shall be treated as an
property, classified as capital asset except capital gains ordinary and necessary expenses deductible from the
presumed to have been realized from sale of principal gross income of the seller falling under the category of
residence. itemized Deductions, and can only be claimed if the
seller does not opt to claim the OSD during the taxable
A senior citizen shall also be liable for other internal quarter/year.
revenue taxes, such as:
a. VAT or Percentage Tax (If self-employed or Private establishments employing senior citizens shall
engaged in business or practice of profession) be entitled to additional deduction from their gross
b. Donor’s Tax income equivalent to fifteen percent (15%) of the total
c. Estate Tax amount paid as salaries and wages to senior citizens
d. Excise Tax on certain goods provided the employment shall have to continue for a
e. Documentary Stamp Tax period of at least six (6) months and the annual taxable
income of the senior citizen does not exceed the
poverty level as determined by the NEDA through the
NSCB.
TARLAC STATE UNIVERSITY - COLLEGE OF BUSINESS AND ACCOUNTANCY
2ND SEMESTER ACADEMIC YEAR 2021-2022
TAX 3 – SPECIAL TAXATION
Sale or lease of the goods and services to senior citizens
is now VAT-exempt transaction under RA 10963 or the
TRAIN LAW:
a. Medicines;
b. Professional fees of attending physicians and
licensed health workers;
c. Medical and dental services, diagnostic and
laboratory fees;
d. Actual fare for land transport travel, air
transport services, and sea shipping vessels;
e. Utilization of services in hotels and similar
lodging places;
f. Restaurants and recreation centers;
g. Theatre admission fees, concert halls, cruises,
carnivals, cinema houses and other similar
places;
h. Funeral and burial services for the death of
senior citizen.
