Question & AnswerQ&A (Republic Act No. 10001)
The tax rate imposed on life insurance premiums is two percent (2%) of the total premium collected.
No, premiums refunded within six (6) months after payment on account of rejection of risk or returned for other reason to the person insured are not included in the taxable receipts and are exempt from the tax.
No, premiums received from reinsurance by a company that has already paid the tax are exempt from the life insurance premium tax.
No, premiums collected by any branch of a domestic corporation doing business outside the Philippines on account of any life insurance of a nonresident insured are not subject to tax if the foreign country imposes tax on such premiums.
Cooperative companies or associations are those conducted by their members with money collected among themselves solely for their own protection and not for profit.
The new tax rate applies only to insurance policies issued after the effectivity of Republic Act No. 10001.
The new tax rate of two percent (2%) applies only to the remaining balance of premiums and the remaining years after the act's effectivity.
The documentary stamp tax rates are: Exempt if amount does not exceed Php 100,000; Php 10 if amount exceeds Php 100,000 but does not exceed Php 300,000; Php 25 if amount exceeds Php 300,000 but does not exceed Php 500,000; Php 50 if amount exceeds Php 500,000 but does not exceed Php 750,000; Php 75 if amount exceeds Php 750,000 but does not exceed Php 1,000,000; Php 100 if amount exceeds Php 1,000,000.
Five years after the effectivity of the Code, no tax on life insurance premiums shall be collected, and all life insurance policies shall be exempt from documentary stamp tax.
The Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, shall promulgate the necessary rules and regulations for effective implementation.
If any provision is held unconstitutional or invalid, the other provisions not affected shall remain valid and effective as per the separability clause.
The Act takes effect fifteen (15) days following its publication in the Official Gazette or a newspaper of general circulation in the Philippines.