tax i basic chart

8/20/2019 Tax I Basic Chart

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INCOME TAXATION OF INDIVIDUALS: CITIZENS

CITIZENS

RESIDENT NON-RESIDENTS

Definition Sec 22 (E)

1. A citizen of the Philippines who establishes tothe satisfaction of the Commissioner that factof his physical presences abroad with definiteintention to reside therein.

2. A citizen of the Philippines who leaves thePhilippines during the taxable year to resideabroad, either as an immigrant or foremployment of a permanent basis.

3. A citizen of the Philippines who works andderives income from abroad and whoseemployment thereat requires him to bephysically present abroad most of the timeduring the taxable year.

4. A citizen who has been previously consideredas non-resident citizen who arrives in thePhilippines at any time during the taxable yeato reside permanently in the Philippines shalllikewise be treated as non-resident citizen forthe taxable year in which he arrives in thePhilippines with respect to his income derivedfrom sources abroad until the date of hisarrival in the Philippines.

Tax Code Reference Sec 24 Sec 24 (income w/in the Philippines)

Sec 23 (income outside Philippines)Tax Base Taxable income earned from

all sources within and without the Philippines

Taxable income from all sources wi th in thePhilippines

Tax Rates – In general 5% - 34% in 19985% - 33% in 19995% - 32% in 2000

5% - 32% thereafter

5% - 34% in 1998 (for income w/in the Phils)5% - 33% in 1999 (for income w/in the Phils)5% - 32% in 2000 (for income w/in the Phils)

5% - 32% thereafter (for income w/in the Phils)EXEMPT (for income w/out the Phils)

Tax Rates – On Passive Incomes (subject to Final Taxes[FT])

Interest on any currency bank deposit and yield or any othermonetary benefit from deposit substitutes [Sec 22(Y)] andfrom trust fund and similar arrangements

20% FT 20% FT

Interest from a depository bank under the expanded foreigncurrency deposit system [RR 10-98]

7.5% FT EXEMPT [Sec 2.24 RR 10-98]

Interest on long term deposit or investment [Sec 22 (FF)] inthe form of savings, common or individual trust funds, depositsubstitutes, investment management accounts and otherinvestments evidenced by certificates in such form prescribedby the BSP

EXEMPT EXEMPT

Pre-terminated long term investment (should actually basedon expired term)

4 years to < 5 years – 5% FT3 years to < 4 years – 12% FTLess than 3 years – 20% FT

4 years to < 5 years – 5% FT3 years to < 4 years – 12% FTLess than 3 years – 20% FT

Other interest income derived within the Philippines 5% - 34%, 33%, 32% 5% - 34%, 33%, 32%

Other interest income derived outside the Philippines 5% - 34%, 33%, 32% EXEMPT

Royalties – in general 20% FT 20% FT

Royalties on books, other literary works and musicalcompositions

10% FT 10% FT

Prizes - more than P10,000 20% FT 20% FT

Prizes – P10,000 or less 5% - 34%, 33%, 32% 5% - 34%, 33%, 32%

Prizes – PCSO & Lotto winnings EXEMPT EXEMPT

Other prizes or winnings within the Philippines 20% FT 20% FT

Other prizes or winnings outside the Philippines 5% - 34%, 33%, 32% EXEMPT

Cash and/or Property Dividends from a domestic corp orshare in distributable net income after tax of a partnership(except general professional partnership), association, jointaccount, or joint venture or consortium taxable as corporation

6% FT beginning Jan 1, 19988% FT beginning Jan 1, 199910% FT beginning Jan 1, 2000

6% FT beginning Jan 1, 19988% FT beginning Jan 1, 1999

10% FT beginning Jan 1, 2000

Other Cash and/or Property Dividends (e.g. from a foreigncorp)

5% - 34%, 33%, 32% 5% - 34%, 33%, 32%

On domestic shares of stock not traded through local stockexchange (based on net capital gains)

5% / 10% FT 5% / 10% FT

On shares of stock traded through local stock exchange(based on gross selling price) [Sec 127(A) & (D)]

1/2% of 1% FT (PercentageTax)

½% of 1% FT (Percentage Tax)

On real property (based on gross selling price or FMVwhichever is higher) – in general

6% FT 6% FT

On real property sold to the government – subj to option 6% FT or 5% - 34%, 33%, 32% 6% FT or 5% - 34%, 33%, 32%

On real property sold to acquire or construct new principalresidence

EXEMPT subj to certainconditions

EXEMPT subj to certain conditions



INCOME TAXATION OF INDIVIDUALS: ALIENS

ALIEN

RESIDENT ALIENNON-RESIDENT ALIEN

ENGAGED IN BUSINESS NOT ENGAGED INBUSINESS

Definition Sec 22 (F)

An individual whoseresidence is within thePhilippines and who is not acitizen thereof

Sec 22 (G) / Sec 25 (A)(1)

An individual whoseresidence is not within thePhilippines and who is not acitizen thereof but stays in thePhilippines for an aggregateperiod of more than 180 daysduring any calendar year

Sec 22 (G)

An individual whoseresidence is not within thePhilippines and who is not acitizen thereof but stays in thePhilippines for an aggregateperiod of more than 180 daysduring any calendar year

Tax Code Reference Sec 24 Sec 25 (A) Sec 25 (B)

Tax Base Taxable income earned fromall sources within

thePhilippines

Taxable income earned fromall sources wi th in

thePhilippines

gross income from allsources within

thePhilippines

Tax Rates – In general 5% - 34% in 19985% - 33% in 19995% - 32% in 2000

5% - 32% thereafter

5% - 34% in 19985% - 33% in 19995% - 32% in 2000

5% - 32% thereafter

25% FT

Tax Rates – On Passive Incomes (subject to Final Taxes[FT])

Interest on any currency bank deposit and yield orany other monetary benefit from deposit substitutesand from trust fund and similar arrangements

20% FT 20% FT 25% FT

Interest from a depository bank under the expandedforeign currency deposit system

7.5% FT EXEMPTSec 27 (D)(3)

Sec 2.27 (c) RR 10-98

EXEMPTSec 27 (D)(3)

RR 10-98Interest on long term deposit or investment [Sec 22(FF)] in the form of savings, common or individualtrust funds, deposit substitutes, investmentmanagement accounts and other investmentsevidenced by certificates in such form prescribed bythe BSP

EXEMPT EXEMPT 25% FT

Pre-terminated long term investment (shouldactually based on expired term)

4 years to < 5 years – 5%3 years to < 4 years – 12%Less than 3 years – 20%

5 years to < 5 years – 5%3 years to < 4 years – 12%Less than 3 years – 20%

25% FT

Other interest income derived within the Philippines 5% - 34%, 33%, 32% 20% FT 25% FT

Other interest income derived outside thePhilippines

EXEMPT EXEMPT EXEMPT

Royalties – in general 20% FT 20% FT 25% FT

Royalties on books, other literary works and musicalcompositions

10% FT 10% FT 25% FT

Royalties on cinematographic films and similarworks [Sec 28 (B)(2)]

20% FT 25% FT 25% FT

Prizes - more than P10,000 20% FT 20% FT 25% FT

Prizes – P10,000 or less 5% - 34%, 33%, 32% 5% - 34%, 33%, 32% 25% FT

Prizes – PCSO & Lotto winnings EXEMPT EXEMPT EXEMPTSec 27 (D)(3)

RR 10-98

Other prizes or winnings within the Philippines 20% FT 20% FT 25% FT

Other prizes or winnings outside the Philippines EXEMPT EXEMPT EXEMPT

Cash and/or Property Dividends from a domesticcorp or share in distributable net income after tax ofa partnership (except general professionalpartnership), association, joint account, or jointventure or consortium taxable as corporation

6% FT beginning Jan 1, 19988% FT beginning Jan 1, 1999

10% FT beginning Jan 1,2000

20% FT 25% FT

Other Cash and/or Property Dividends (e.g. from aforeign corp in the Philippines)

5% - 34%, 33%, 32% 5% - 34%, 33%, 32% 25% FT

Other Cash and/or Property Dividends (e.g. from aforeign corp NOT in the Philippines) EXEMPT EXEMPT EXEMPT

On domestic shares of stock not traded throughlocal stock exchange (based on net capital gains)

5% / 10% FT 5% / 10% FT 5% / 10% FT

On shares of stock traded through local stockexchange (based on gross selling price) [Sec127(A) & (D)]




On real property (based on gross selling price orFMV whichever is higher) – in general

6% FT 6% FT 6% FT

On real property sold to the government – subj tooption

6% FT or 5% - 34%, 33%,32%

6% FT or 5% - 34%, 33%,32%

6% FT or 5% - 34%, 33%,32%

On real property sold to acquire or construct newprincipal residence

EXEMPT subj to certainconditions

N/ARR 13-99

N/ARR 13-99



INCOME TAXATION: SPECIAL RULES

SPECIAL RATES FOR CERTAIN ALIEN INDIVIDUALS

Alien Employed by Regional or Area Headquartersand Regional Operating Headquarters ofMultinational Companies [Sec 25 (C)]

15% on gross income, onsalaries, wages, annuities,

compensation, remuneration andother emoluments such ashonoraria and allowances

5% - 43%, 33%, 32% [regulartax rate] or FT rate for any

other income earned from allother sources within the

Philippines Alien Individual Employed by Offshore Banking Units[Sec (D)]

Alien Individual Employed by Petroleum ServiceContractor and Subcontractor [Sec 25 (E)]

SPECIAL RATES FOR CORPORATIONS

DOMESTIC CORPORATION

Proprietary Educational Institutionsand Hospitals

10% On taxable income

35% On entire taxable income, if total grossincome from unrelated trade,business, or activity exceed 50% oftotal income

GOCC, Agencies and Instrumentalities 32% Same tax rate upon their taxableincome in a similar business, industryor activity

GSIS / SSS / PHIC / PCSO EXEMPT

Depository Banks 10% On interest income from foreign

currency transactions includinginterest income from foreign loans

RESIDENT FOREIGN CORPORATION

International Air Carriers 2 1/2% On Gross Philippine Billings

International Shipping 2 1/2% On Gross Philippine Billings

Offshore Banking Units 10% Any interest income derived fromforeign currency loans granted toresidents other than offshore bankingunits or local commercial banks,including local branches of foreignbanks that may be authorized by theBSP to transact business with offshore

banking unitsEXEMPT Income derived by offshore banking

units authorized by the Bangko Sentrang Pilipinas (BSP), from foreigncurrency transactions withnonresidents, other offshore bankingunits, local commercial banks,including branches of foreign banksthat may be authorized by the BangkoSentral ng PIlipinas (BSP) to transactbusiness with offshore banking units

Regional or Area Headquarters EXEMPT

Regional Operating Headquarters 10% On taxable income

NON RESIDENT FOREIGN CORPORATION

Cinematographic Film Owner, Lessoror Distributor

25% On Gross Income

Owner or Lessor of Vessel Charted byPhilippine Nationals

4.5% On Gross Rentals

Owner or Lessor of Aircraft,Machineries and Other Equipment

7.5% On Gross Rentals



INCOME TAXATION OF CORPORATIONS

CORPORATIONS

DOMESTIC RESIDENT FOREIGNERS NON-RESIDENTFOREIGNERS

Definition Sec 22 (B) & (C)

Applies to corporationcreated or organized in thePhilippines or under its laws

Sec 22 (H)

Applies to foreigncorporation engaged in tradeor business within thePhilippines

Sec 22 (I)

Applies to a foreigncorporation not engaged intrade or business within thePhilippines

Tax Code Reference Sec 27 Sec 28 (A) Sec 28 (B)

Tax Base Taxable income from allsources within and without

the Philippines

Taxable income from allsources wi th in the

Philippines

gross income from allsources within the

Philippines

Tax Rates – in general 34% in 199833% in 1999

32% in 2000-200535% in 2006-2008

30% in 2009 & thereafter

34% in 199833% in 1999

32% in 2000-200535% in 2006-2008


34% in 199833% in 1999

32% in 2000-200535% in 2006-2008


Tax Rates – on Passive Income (Subject to Final Tax[FT])

Interest on any currency bank deposit and yield or anyother monetary benefit from deposit substitutes andfrom trust funds and similar arrangements

20% FT 20% FT 34% in 199833% in 1999

32% in 2000-200535% in 2006-2008


Interest on foreign currency deposit system 7.5% FT 7.5% FT EXEMPT

Interest Income on Foreign Loans contracted on or

after August 1, 1986

N/A N/A 20% FT

Interest Income received by a FCDU

Income derived by a depository bank under theexpanded foreign currency deposit system from foreigncurrency transactions with nonr esidents, offshore

banking units in the Phi l ippines, local comm ercia l

banks including b ranches of foreign banks that maybe authorized by the Bangko Sentral ng Pilipinas (BSP)to transact business with foreign currency depositsystem

EXEMPT [RA No. 9294] EXEMPT [RA No. 9294] N/A

Interest income from foreign currency loans granted bysuch depository banks under said expanded system to

residents other than offshore banking units in the

Phi l ippines or other depository banks under the

expanded system

10% FT 10% FT N/A

Interest Income received by an OBU

Income derived by a depository bank under theexpanded foreign currency deposit system from foreigncurrency transactions with nonr esidents, offshore

banking units in the Phi l ippines, local comm ercia l

banks including b ranches of foreign banks that maybe authorized by the Bangko Sentral ng Pilipinas (BSP)to transact business with foreign currency depositsystem

N/A EXEMPT [RA No. 9294] N/A

Interest income from foreign currency loans granted to

residents other than offshore banking units or loc al

comm ercia l banks, including local branches of

foreign banks that may be author ized by BSP to

transact with offshore banking units

N/A 10% FT N/A

Royalties 20% FT 20% FT 34% in 199833% in 1999

32% in 2000-200535% in 2006-2008

30% in 2009 & thereafterDividends EXEMPT EXEMPT 15% FT (conditional)

Tax Rates – on capital gains

On shares of stock not traded (based on net capitalgains)

5% / 10% FT 5% / 10% FT 5% / 10% FT

On Land or Buildings (classified as capital assets) 6% FTbased on gross selling priceor FMV whichever is higher

34% in 199833% in 1999

32% in 2000-200535% in 2006-2008


34% in 199833% in 1999

32% in 2000-200535% in 2006-2008


Tax Rate – Minimum Corporate Income Tax (MCIT) 2% 2% N/A

Tax Rate – Branch Profit Remittance Tax (BPRT) N/A 15% N/A

Tax Rate – Improperly Accumulated Earnings Tax (Sec29)

10% 10% N/A

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