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Repco ipa Gongeoss ofthe Philippines Ses Sais Ser Gongs Set ReprSesae ‘Begun and Fld in Metro Manila, er Monday, twenty-fourth "dy of ly, two thousand eeventon, (Repusuic Act No. 10963] ‘ANAT AMINDING SECTIONS 5,6, 4, 25,27, 81, 82, 38,24 ‘1, 52,56 87, 8, 74,78, 84, 86,80, 91, 97, 99, 10,101, 106,107,108, 109,10, 112,114, 16,127,128, 129,145, 248, Lao, 154,155,171, 174,175,177, 178, 79,180,181, 182 182, 16,188,189, 190,191, 192 199, 14 198,166 17,288 256, 27,249,254, 264,209, AND 28% CREATING [NEW SECTIONS 51-4, 148-4, 160-A, 150-B, 237-4, 254-8, 248, AND 265A: AND REPEATING SECTIONS 85,62, AND 89, ALL UNDER REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS THE NATIONALINTERNAL [REVENUE CODE OF 1997, AS AMENDED, AND POR (OTHIERPURPOSES ‘Be enacted y the Senate and Hous of Representatives ofthe ‘Philipines Conga asad [SHCTION 1. Tide. hia Aet shale knowns the “Tas Reform for Acloation and Incusion (TRAIN) ‘82.2, Declaration ofPolioy.— Ttiehershy declared the alia the State (@) Toeahanc the proreciity fhe tax estan hroegh (he ralionalsation ofthe Phitppine internal reveaar tx eye, ‘heoby promoting sustainaleendiaslasve somone grow (©) Toprovide, ac much ae pus, anouitable ee toa greier numberof expayers and User amis none time Iivelsof disposable income and incraseeconemic activity an needs thon under itsuraieton and ear Uaough ie provisca, of bottor infrastructure, health, education, jabs, an soil protectin forbs peopl, ‘Se, 3. Socton ofthe National Internal Revenue Ca of 1807 (MIRC), as amended in ore further amended to ead ox low "800.5. Power ofthe Commissioner a Obtain Information, and to Summon Ezamine, ond Take Testimony of Persons. ~ In ascertaining the coretones ofan atu, crinmaking msm sh ‘oe iss been made, or in dstrminng te aise (t any poroon for any internal revent tax i collecting any such Lebilty, or im evaluating ta ‘ompliane, the Commissions ie authoriaed “Wass "W)To obtain on a regular basi fom any person other than the pemon whore internal revenue tax liability e subject to audit ‘investigation, or from any efice or ocr ofthe ‘atonal anol goveraments, govoraman agen fandinsiumentaltes,incding the Bargho Seatral ‘hg Plipine and government-owned or -contelled ‘Srporations animation ach am hin iia {o, costsand volume ofproducton, reper sale sand rose incomes of taxpayers, and the names, aareccs and Gonna ettement of ooportins, ‘mutual fend companies, ineurance compaaien, ‘gion operating headquarters of multsationl ‘companies joint assum, aboot, ant ventures br eamorta and registered partnerships, nd het Saembers: Provided, Taat the Cooperative Enowa at ‘The Tax Incentives Management aad ‘Teanepreney Ac (UIMTAY: sexe See. 4. Section 6 of tho NIRC, et amended, is hotehy farthor amend to ea allows: "$00. 6. Power of the Commissioner to Moke Assessments and Preseribe Additional Requirements for Tox Administration ond Bryorcement— “W) Beomination of Returns and Determination of Tox Due. ~ Afr a retara haa ‘oon Med a required under the provisions of this Code, the Commissioner or his daly eutherized _spretnttivemay authors te examination ofan {taxpayer and the anssemont ofthe sores mount ott rittndine any lon eit re Suthousation of any government ayoncy oF instrumentality: Provided, however, Tote los eur ball act prevent te Commoner fo, suthorsing the examination af any taxpayer wax om ‘Dex some ‘wars “0 Authority of the Commissioner to ‘private and publi secors and wit prior note to ‘Minctd taxpayers dotrmine the fair market aloe (real prperticeoatd i eachone or ea cujoct “Rewepaperof general oaltioniath proviny, ty ‘rmumiapalty concered, one abownce there, Shall be ported in the provincial capitol ety or ‘napa al andin we other enepicwnts public places therein: Provided, further, That te basis say auton, including the rsd of consultations ‘done, aball be publierecards open to te ingiy of ‘sy tapayer, Forpurone afcomputing any ints ‘even tax te valve of the property shall be, ‘whichever iste higher of *() the fir market value an determined by the Ccomnietioner ae “te fais markat value as shown in the schoiala of vals of the Provincial and City Kasco” 19) Onthe taxable inoome dined in Section 1 of thie Code ther than ince subject ta ‘under Subsections (8, (C), and () of his Section, deve foreach taxable year from al saree within ‘he Philippines by an individual alien who is 2 residertofthePuilppines. °W Rotes of Tax on Taxable Income of Individuals. ~ The tax shall be computed in ‘stcordnce with nd st the rates eataliabed in the ‘ollewingachelus “() Tax Schedule Rfptire January 1, 2018 ‘until Deomber SI, 2022; spn aa stn “Tex Schedule Esective January 1, 2023 and ona: een Some attributed to or ientied as income exclusively ‘arned or realised by either ofthe spose, the same ‘Sal bedvided equally between the spouses forthe purpose of determining thos weepoctive taxable “Provided, hat minimus wage earners 28 einodn Section 20H) of ae Cade shal boat ‘rom the peymont ef come ta on their taxable {eome Provided, farther, That the boiday ey, py nceive by ouch minimim wag earners ball kewie be exempt fom ince ta. “) Rate of Tax on Income of Partly ‘Saifenployed Indtiduale and/or Professionals Whose Grose Soles or Gross Becipts and Other Non-operating Income Does Not Exceed the Valuecdad Tax (VAT) Threshold as Provided in ‘Sectlen 1090BB). — Self-employed individasle andlor profesional abll have the option aval ‘an elehtperoent (9%) tax on rose sles or gress ‘cis and ther non operating nome excel! ‘Two handed fit thousand pos (P250,000) ina ofthe zadustod income tax rates under Shootin (GO) ofthis Socton end percentage eset Section 116of this Code “© Rote of Tx for Mized Income Barnes, a) [Total Gro Sales andlor Grose Resins snd Othe Nonaperating Income Do Not sod the ‘VA Tireshali as Provided in ection 109(85) of s Cos, ~The ratar prvcribed under Subeecton (AGS of this Seton an taxable income, o eit ‘percent ncome texbasd on gro talo or som ‘ceipt and other non-operating income in ow ot the gratuetod iscome tax rates under Subsection (GG of thin Seton end the percentage tartar Section! ofthis Cade ‘Busca compositions which sballbsimpored x nal in a i pron COM); ple niet ‘amounting to Ten thousand pas ress ‘which shall bo sabjct tax under Subsection (A) Section 24 and other winnings (excapt winnings ‘amounting ten thousand peso (P10000 or lose ‘Esa Philippine Charity Swonptnkar nd Lat which ‘ll be examp!, derived fram sources within the hippies: Provided, however, That interest income received by an individual texpayer (except Desubjocttoa final nonme txt the rte of fifteen ‘pereat (15%) of such interet income: Provided, urther, Tat otoree income om lng er dept ‘or javestment in tho form of sings, common or ‘dividual rast fds, depos bites invent ‘management accounts end other investments ‘videnced by certificates in such farm preaarbed by {hengtarm depositor investment certificate based ‘nth romalniog maturity here sere! {Gash and/or Property Dividends. — & final ax athe rte of ta perent (10%) abl be {imposed upon the cash andlor property dividends sctualy or constrocival recived by anindivdal ‘ram ¢ dameatie corporation or from a nt stack iste nee income after tox of pertnerhip, (crcp:2 general yrteeional partnership) of which, ‘beisepartaer or onthe share of an individual in ‘he ne income after tax ofan ansccation a joint scons or aint venture or consrsua eta ns ‘cxrperatio f whch ho ios member oronetce =O) Capt! Gain fram Sale of Sharsof Stock sat Treded inthe Stock Rachange. ~The provisions ‘Sectin 388) aotwitetending, a nal axe the ‘aero Rao porent Gat) iaheby impesedpen ‘henetcaital pins reali! Surng the axle year ‘ium the ale barter, exchange or other dipositon fchare of toc in domes corporation, except hares sald, or ‘xchange, sxx! Spc. 6. Section 25 of tho NIRC, as amended is herby ‘trthoramenied toreedafillows: “sxc. 25. Tax on Nonresident Alien Indio. “W) Nonresident Alin Begnged in Trade or Pasiness Within the Philippines, sax “@) Nonresident Alien Individual Not Engaged in Trade or Business Within the Palippine. cexx {O Aienndividuat Bmplayed by Regionalor Area Headquarters and Regional Operating “Heniquartersf tutnational Companies. ~ There femuneration and other emoluments, euch ac ‘honoraria end allowances fem suchroginal or area ‘hesquarier and regina] operating headquarore, ‘tax equal w fiteen percent (15%) of such gene fncome: Provided, however That the seme tax ‘restment hall eply to Flpinos emplayed and tompying the eame postion aa thooo of aliens ‘ployed. by these multinational ompanios. Por Dusposee ofthis Chater, te term ‘mallnatonal Soave nmr Soci an wong engegedn {nterntionl todo with flats o oubaiiricor branch office is Uh Asia-Pasfi Repion and other {bron markt "D) Alion Individual Bmplayed by Offshore Barking Unita. — Thor shall be levied, alloctad tnd paid foreach taxable yoar upon tho grose ‘nome received iy every alien individual employed by offshore banking nite established in the Philippines as salaries, wage fmplyed by then ollshore banking unt “G5 Aion IndidualBimplayed by Petroleum Serves Contractor and Subcontractor. An alien individual wh ie apermanont resident of foreign tounty bot whois employed and aosigned inthe Philipines ty foreign serie contactor or ty 8 foreign ervin robootrator engaged in petro ‘peration inthe Philippines shall be ible toa tax ‘of fifteen percent (15%) ofthe salaries, wages, ‘mules, compensation, remuneration and other fmokinesta, such ae honoraria and allowances, {ecined from eich contractor or cubeontractor: ‘Prathe, oweoer, That the sme tx teatment call ‘gpply'oa Filipino employed aad ceupying the same ‘ostienatan allen employed by petroleum service ‘Srarastor and suboatrator. “Any income earned from all other sourese ‘ithinthe Philplncs by tr aon employes refered {ovunder Subsocions (Q),(D), and hereat elle tubjer tothe pertinent income tax, asthe se may ‘imposed der th Code, “Gh The peerentaltxtreatment provided in Subecions (C.D) and this Setion shal not be aplicable £9 rogional beadguartere (KG), ‘eon operating beadguartare (LOH) cso ‘enki OBL) orpetreum orice contractors sd sboatractoe registering with the Securities find Exchange Commission (SEO) after Sianuay 1, 2018 Provided, however, That existing RHQUROHQs, OBUs or petroloum vervice Centretore and eabcotractors resent availing preferential ax ratea for qualified employers all ‘eatin abe ened tavalf the preferential tax ‘ate forpresent end future quid employees” ‘8. 7, Section 27 of the NIRC, ab amended is hereby further amended treed ex fllowe: “880,27 Rats of Income Taxon Domestic: corporations. ~ Corporations, Agencies or the provisions of exiting epoca cr generallawa tothe ‘near ntwithetanding, all age, ‘roma depository banc under the expanded freien ‘currency dopetteyatem aball be rubies oa final ‘nomo tara the rate af Eeen percent (10%) ouch “@ Capital Goins from the Sale of Share of Stock Not Traded inthe Stock change. ~ A nal taxal the rata ffifoon pect (1599 able ipod ‘oonetcspital gain realized during the taraie year ‘fom totale, exchange or other ipoion of chars sta na domestic corporation ecapt share ld ‘or dipoced of tarough te eack exchange, set ‘S002. Section 81 ofthe NIRC, oa amended, hereby {further amended to read asfllome: “Ske. 31. Tasable Income Defined. ~ The term table incom’ means the pertinent tame rosincome specified in this Code, oe dations, ‘any, authori for such type of ncome iy thie Coe wrote pect ewrs”™ Ste. Section 52 ofthe NIRC, ae amend, i hereby fetes amends to eed flows: "3822. Ge Fcome.— “W GenrDfion— x2 “© tas rom Ort home. ~ 132 wer ") Mists tems wen “1 aanth Pay and ter Boi. — aeadpetat entre ote” fat ‘he tot exclusion under this eabparagraph shal not exceed Ninety thousand pesos (0,000 whieh sall “0 Bonet esived by ofc nd mplyoce ofthe rational and local government parent Republi Act No 6686, "0 Boneitsrecived by employees pureuant 4 Presidential Deere No. 851, an amended by Memorandum Onder No.2 dated Aug 12,1888, “i Bonofite received by officals and ‘employna not avery Presidential Dose. 85, {Ss amended by Memorandum Order No 23, dated ‘gat 13, 1986; and “(s) Othor benefits such a8 productivity ‘ncantves and Christmas boos” ‘te, 10. Section 3 ofthe NIRG, as amended, ishereby furtheramended to read ee fllone: suc. 88. Spécial Treatment of Fringe Benefit. ~ “Wy imposition of Tas. ~ Bffecti January 1, 2018 and omwards, © Saal tax {hiry-Sve percent (15%) is hereby imposed onthe Sve percnt (0%) effective January 1, 2018 and aware: Provided, however That Hage benefit ‘rahe to employee and excl under Subsections (@) (©), and @) of Section 25 shal be taxed at ‘he applicable rates imposed thereat: Provided, [ithe Tot te growed-up valu ofthe ings benefit ‘Salle determined y dividing the actual monetary ‘alu ofthe fing benefit hy the diffrence bebreen ‘Spo unred penn (1008) and ho spplicale rat ‘inane tax under Subsections (3, (C(), 204 ‘Secon 25. sa ‘5. 11, Soction 84 of th NIRO, as amended, i hereby furtberamended read ae flee: "BHC. 84. Deductions from Gross Income. — ‘Except iaxpayers earning compensation income ‘sng Som poroonal service dered undor an deduction, he dalle considered aa ving availed Iaimoaf ofthe dedoesons allowed inthe ‘Subsections, Sch elation whan made in he retura shall be trevocable fr the table year for which the return i mado: Provided, Tat on individ whois ented to and aimed rth optional tancard eduction shall net be required to cub with his ‘ax return such financial statewents etherwise roquied under this Code: Provided, further, Thats ‘the Commissioner otherwise permit, the sald {individual hall kop auch rend pertaining to hie ron sales or grossrecept, ortho auld operation ‘hallkep euch records pertaining thin gros acome ‘8 defined in Soon Sal thi Code during the able ar stay be ei hares ropltne ‘romulgated by the Secretary of Financo, upon, ‘ecommendation ofthe Gomiasoner. “Notwithstanding the provisions of the proceding Subsetiona. 22" ‘Sc. 12. Section 86 ofthe NIRC, as amended ie herey ‘tc 18, Section 61 of the NIRC, es amended, ie hareby fuer amend to read ae folows: "BHC 81 Individual Returns. — Ware ‘ware sxx — sexx (The income tax retara IT) shall consist of masimum of four (4) page in paper frm or ‘leetonieform, and shall onlyentsin the lling inhraston: "Go Pereonal profile and inforation; { Toal gros eal roeipts rine fom compensation fr erics rendered conduc ote ‘or Dukes or the exercise ofa pofecio, ease ‘come eujot to inal tras provided und Ss Coe “© Allowable deductions under this Coe: “DyTaxable income as doin in Seton af ‘hie Caan “Ww ame taxdue and payable sexx? ‘Sec. 14. Anew stction dosignated ae Section SLA ofthe ‘IRC, as amended, is hereby inverted tread aa fall: “S¥e.S1-A Subtitted Fling of Income Tox Returns by Employees Receiving Purely Compessation Income. — Individual taxpayers ‘eeiveg purely compensation income, rgardena ct ‘amount fom only one employer inthe Philippines ‘or he calor your, the income tax of which as ‘been itbld corey bythe ad employer ax dos cua tax withhold bal not berequired to Me an, ‘nual income sax return. The certificate of ‘ithblding Bled by te sopectie employers duly ‘amped secoivedby the BIR, shallbe tantamount tothe oubatitated ling ofincme taxreteas by eit cemplees” Ste. 18. Section $2 othe NIRC, ss amended, i hereby further amended treed flows: “Suc. 82, Corporation Returns, ~ (A) Requirements, — very corporation cubjct to the tax hoe. impose, exept foreign Corporations not engaged in tad or business inthe Phtipines, ball render, in duit, a true and scouts quartecy income tax return end final or ‘justment return in cordance withthe provisions of Chapter XI of this Tite. The inne tax return Shullconsist of amasimam of four (pages in paper ‘ormor electronic form, te ley the president, vim ‘prowdent or othr principal ofc, allberwara'o 1 cach oller and by the treasurer o sistant ‘wossuer, and shall only contain the ‘aly ‘allowing 0) Corporate profile and information; "2) Groce sales, ecsipte or income from servis rendered or conduct of trade o business, except income wubject final texas provided under ‘hia Codes "@) Allowable deductions under this Code; "Q) Taxable name as dafined in Section 31 thie Code; and " Tocome tax due and payable “Provided, Tht tne foegsing provisions ball not afect the implementation of Hepublie Act No-10T08 oe TINTA text ‘60.18, Section 56 ofthe NTRC, as amended, i heraby ‘farther meted treed afilowe: “Suc 8, Payment and Asecoment of Income ‘Tos for Individuals and Corporations. ~ A) Poymontof Tox. — Sp xxx 9 nstallmen of Payment. ~ When stax lucie in exzee of Two thousand peace (2,000), the taxpayer other than scorporstion, may lot pay ‘ho tarin two) equal inealment,iawhich ones, ‘ho fire installment abal be paid at the time Che ‘turned and the ocnd instanton before Octsber 5 fallowing the cw of be calendar year, ‘ny insallnent nu puid on or befor the dn Se {eritepayment, the whole amount ofthe trend ‘becomes duo and pavable together with the lingua penaltion” ‘800.1, Section 87 of the NIRO, as amend, is herby ‘farthoramenied read as fllows “BHO 61, Wibholding of Toxo Sour. — 0) xxx "@) Witbolaing of Creditabe Tat Soures. = The Secretary of Finance may, upon the ‘acommandation a the Comminsoner, rq the ‘wtbllingefatax on the items of income payable to natural or juridical poreons, residing in the Philippines, by payor-corporation/persone ae Ta, atthe rate of ot lee than Ou ‘3B 18, Section 58 of the NIRC as smended, ie herehy ‘further amended read allows: "Ske, 58. Return and Payment of Tasee Witield af Source. ~ “iyexx next “Thoretur or fina and eitable withing taxes shallbe fied and tho payment mate nctater ‘Un ts ast day of Ue mon folowing the los of ‘the quarter during which wittblding was ands” ‘860,18, Seetion 62 of the NIRC, ac amended, i hereby repeal ‘850.20. Section 74 ofthe NIRC, ex amended, ie hereby ‘fortor amended read at follows: *38c. 4. Declaration of Insome Tas for Individuals. (8) General. — Except as otherwise provdod inthis Seedoncvoryindividual eubject 0 {noome ax under Scone 14 and 5(A) ohio ite, ‘whois receiving selfemploymentincome,whotherit Conattutes the sole abunce of his income or in ‘combination with alarie wage and other Sed cr determinable income, shall make and fle = ‘oclavation of his catimated come fr th curtent ‘saxabisyearon or before May 16cfthe sam taxable "@) Return ond Payment Eatinated come ‘Tax by Individvole — "Toe amount of eainated ‘income a defined in Subsection (C) with rrpectt> ‘which deleratonis required under Saboocton (A) shall be paid in four (6) installments, The fest indtaiment thal be pid tthe time ofdedaratian snd the econd and did abl be paid on Angut 15 and November 16 ofthe current ear, respectively. ‘Thefowthinstallment shale pron cr bebe Ma 15 of he following calendar year when the fal adjusted income tas seturs edo tobe led xxx Ste. 21. Section 7 of the NIRG, ax amended thereby urtersmended tose asllowe "880,79, Income Toe Collected at Sears, ~ nexx “0) Refunds or Credits, ~ °D Emplger. — x3 "W Employees. — 22% sxx °D) Withholding on Bosie of Average Wages. x33 “w xxx "@ rxxand ‘Ore "0 Nonresident Aims, — xxx $0 Year-end Adjustment. — x2" ‘Sec 2. Section #4 of the NURC, as amended, is erehy farther amended reed afelows: "S00. 84. Rate of Etat Tas. ~ There shall be levied, assed, calletod and paid upon the transier athe net estte as determine in acerdancs ‘with Sections 85 and 8 af every deosden, whether Tsdent or nonresident f th Plipine, ut at ‘heratofeipercent (0% based onthe val aeach etestta. ‘Sec. 25, Section 86 of te NIRC, a8 aménded, i ershy ‘farther amended ead flows (3108, Comoe of ete, — Bor ‘the purpose ofthe tax imposed in tia Chaptr, the ‘valus of to et atte shal be dtermined. A) Deductions Allowed tothe Bette of Citizen or a Rasident.~ Tn tha cae faction oe "sident of the Philippines, by deducting from the ‘eluoaf the gros ertaba "Q) Siondard Deduction. — An amount ‘suivant to Five milion pose (5,000,000, 0) Fordlaims against the eta: Proided, ‘Thatat tho tine the indbeedaees wae incarred the debt instrament was duly notarized and ifthe loan, ‘roa contaced within thro (9 yearabefae the death of the decedent, tho edministratr or exter shall ‘submit a statement chowing the disporition of the proces the ean. “® For claima of the decens Insolvent persons where the val against of