TAXATION LAW EXHIBITS

Type of Income

Interest from any currency bank

deposit & yield or any other
monetary benefit from deposit
substitutes & from trust funds &
similar arrangements
Royalties (except on books &
other literary works & musical
compositions)
Prizes > P10,000
Other winnings except PCSO &
Lotto
Royalties on books & other
literary
works
&
musical
compositions
Interest Income received by an
individual (except a nonresident
individual) from a depositary bank
under the expanded foreign
currency deposit system
Interest income from long term
deposit or investment in the form
of savings, common or individual
trust fund, deposit substitutes,
investment management accounts
& other investments evidenced by
certification
in
such
form
prescribed by the BSP
Pre-termination of such certificate
before the 5th year (i.e. 4 years to
less than 5 years)
3 years to less than 4 years
less than 3 years
Cash and/or Property Dividends
from a domestic corp. or from a
joint stock co., insurance or
mutual fund companies & regional
operating
headquarters
of
multinational companies(tax on
dividends shall apply only on
income earned on/after 1/1/98)
Share of an individual in the
distributable net income after tax
of a partnership (except GPP)
Share of an individual in the net
income after tax of an assn., a joint
account or a joint venture or

Tax Rate For Rate

For
Resident
Non-Resident
Citizen
Citizen (Incl.
OCW)
Final Tax of Final Tax of
20%
20%

Tax Rate For Non-Resident

Resident
Alien engaged
Alien
in trade /
business
Final Tax of Income Tax of
20%
20%

Final
10%

Tax

of Final Tax of Final Tax of Final Tax

10%
10%
10%

Final
7.5%

Tax

of

Exempt
tax

Final Tax of N/A

7.5%

from Exempt
tax

Final tax on the

entire income
5%
12%
20%
Final Tax on
amount actually
received:
Beginning
1/1/98
6%;
Beginning
1/1/99
8%;
Beginning
1/1/00 10%

of

from Exempt from Exempt

tax
tax

Final tax on
the
entire
income 5%
12%
20%
Final Tax on
amount
actually
received:
Beginning
1/1/98
6%;
Beginning
1/1/99
8%;
Beginning
1/1/00 10%

Final tax on
the
entire
income 5%
12%
20%
Final Tax on
amount
actually
received:
Beginning
1/1/98
6%;
Beginning
1/1/99
8%;
Beginning
1/1/00 10%

from

Final tax on
the
entire
income 5%
12%
20%
Income Tax of
20%

TAXATION LAW EXHIBITS

consortium taxable as a corp. of

w/c he is a member/co-venturer
Capital gains from sale, barter,
exchange or other disposition of
shares of stock (of domestic corp.)
not traded in the stock exchange

Final tax on net

capital gains
realized during
taxable year

Not over P100,000

On any amount in excess of
P100,000
Capital gains from sale, exchange
or other disposition of real
property located in Philippines,
classified as capital assets,
including pacto de retro sales &
other forms of conditional sales

5%
10%

Final
net
gains
during
year
5%
10%

tax on
capital
realized
taxable

Final tax on
net
capital
gains realized
during
taxable year
5%
10%

Final tax on
net
CG
realized during
the year

Final Tax on the

gross
selling
price
or
current
fair
market value
whichever
is
higher - 6%

Final Tax on
the
gross
selling price
or current fair
market value
whichever is
higher - 6%

Final Tax on
the
gross
selling price
or
current
fair market
value w/cever
is higher 6%
from Exempt from
CG tax

Final Tax on
the
gross
selling price
or current fair
market value
w/cever
is
higher - 6%

5%
10%

CG from sale/disposition of Exempt

from Exempt
principal residence by natural CG tax
CG tax
persons, the proceeds of which is
fully
utilized
in
acquiring/constructing a new
principal residence w/in 18 mos.
from date of sale, provided
historical cost/adjusted basis of
sold prop be carried to the new
principal residence built/acquired
Commissioner. Duly notified w/in
30 days from sale Tax exemption
can only be availed once every 10
years If no full utilization of
proceeds of sale, such portion
shall be subject to CG tax
Income of Nonresident Alien NOT
25% on gross
engaged in Trade or Business
income
except CG on shares and real
property
**a nonresident alien is an individual who shall come to the Philippines & stay therein for an
aggregate period of 180 days during any calendar year
Type of Income
Interest on currency bank deposits & yield or any
other monetary benefit form deposit substitutes &
from trust funds & similar arrangement
Royalties (similar within the Philippines)
Interest income from a depositary bank under the
expanded foreign currency deposit system (EFCDS)

Domestic
Corp
Final tax
20%

Resident
Non-Resident
Foreign Corp
Foreign
of Final tax of
20%

Final tax of 7.5 Final tax of 7.5 Exempt from

%
%
tax

TAXATION LAW EXHIBITS

CG from sale, barter, exchange or other disposition

of shares of stock (of domestic corp.) not traded in
the stock exchange
Not over P100,000

Final tax on
net
capital
gains realized
during
the
taxable yr: 5%
On any amount in excess of P100,000
10%
Income derived by depositary bank under the Final Tax of
EFCDS from foreign currency transactions with 10%
local commercial banks including branches of
foreign banks that may be authorized by the BSP to
transact business with FCDS units & other
depositary banks under the EFCDS, including
interest income form foreign currency loans
granted by such depository banks under said
EFCDS
Inter-corporate dividends (from another domestic Exempt form
corp.)
tax
CG from sale, exchange or other disposition of Final tax on
lands and/or buildings which are not used in the gross selling
business of a corp. & are treated as capital assets
price or FMV,
whichever
is
higher - 6%
Interest on foreign loans contracted on or before
1/1/86
Intercorporate dividends (cash/prop dividends
from a domestic corporation) provided, that the
country in which the nonresident foreign
corporation is domiciled shall allow a credit against
the tax due from the nonresident foreign corporation
taxes deemed to have been paid in the Philippines
equivalent to: 20% for 1997; 19% for 1998; 18%
for 1999; 17% for 2000; representing the difference
between
the
15%
tax
&
the
35%/34%/33%/32% income tax, respectively

Final tax on
net
capital
gains realized
during
the
taxable yr: 5%
10%
Final Tax of
10%

Final tax on
net
capital
gains realized
during
the
taxable yr: 5%
10%

Exempt form
tax
Final tax on
gross selling
price or FMV,
whichever
is
higher - 6%

Type of Income
International Air Carrier
Gross Phil. Billings = amount of gross revenue derived from carriage of persons,
excess baggage, cargo & mail originating form the Philippines in a continuous &
uninterrupted flight, irrespective of the place of sale/issue & the place of payment
of the ticket or passage document; Includes tickets revalidated, exchanges &/or
indorsed to another intl airline if the passenger boards a plane in a port/point in
the Philippines. For a flight which originates from the Philippines but
transshipment of passenger takes place at any port outside the Philippines on
another airline, only the aliquot portion of the cost of the ticket corresponding to
the leg flown from the Philippines to the point of transshipment shall form part of
the GPB

Final Tax of
20%
Final Tax of
15%

Tax Rate
2 % on Gross Phil
Billings

TAXATION LAW EXHIBITS

International Shipping
Gross Phil Billings = gross revenue whether for passenger, cargo or mail
originating from the Philippines. up to final destination, regardless of the place of
sale/ payments of passage of freight documents
Offshore Banking Units

Branch
Profits remitted (connected with the conduct of its trade/business in the
Philippines.) = based on the total profits applied/earmarked for remittance without
any deduction for the tax component thereof (except those registered with the
PEZA)
Regional/Area Headquarters of Multinational Cos. = do not earn/derive income
from the Philippines. & w/c act as supervisory, communication & coordinating
center for their affiliates, subsidiaries or branches in the Asia-Pacific Region &
other foreign markets

Final Tax of 10% on

gross income from
transactions
with
residents
15% on branch
profits remittance

Exempt from tax

Regional Operating Headquarters of Multinational Companies = engaged in any 10% of

of the following services:
income
a. General Administration & planning
b. Business planning & coordination
c. Sourcing & procurement of raw materials & components
d. Corporate finance advisory services
e. Marketing control & sales promotion
f. Training & personnel mgt.
g. Logistic services
h. Research & development
i. Services & product development
j. Technical support & maintenance
k. Data processing & communication
l. Business development
Type of Income
Nonresident cinematographic film owner, lessor or distributor
Nonresident owner or lessor of vessels chartered by the Phil. Nationals
Nonresident owner or lessor of aircraft, machineries & other equipment

Type of Income

Gross Income
Wages,

Salaries,
Annuities,

taxable

Tax Rate
25% of gross income
4.5% of gross rentals, lease
or charter fees
7.5% of gross rentals or
fees

Tax Rate For Alien Individual Employed By

Regional Or Area Offshore
Banking
Headquarters
& Units
Regional Operating
Headquarters
of
Multinational Cos.
15% of gross income 15% of gross income

Petroleum Service
Contractor
&
Subcontractor
15% of gross income

TAXATION LAW EXHIBITS

Compensation, Remuneration,
Other
Emoluments
(i.e.
honoraria
&
allowances)
received from such cos.
Provided, same tax treatment
shall apply to Filipinos abroad
employed & occupying same
positions in these companies
** Multinational company = a foreign firm/entity engaged in international
affiliates/subsidiaries/branch offices in the Asia Pacific Region & other foreign markets

trade with