Prior to Train Law

Compensation Income 2,500,000.00

Personal Exemption 50,000.00
Additional Exemption 100,000.00 -150,000.00
Taxable Income 2,350,000.00

on the first 500,000 125,000.00

32% on excess of 500,000 592,000.00
Tax Due (a) 717,000.00

on the first 2,000,000

32% on excess of 2,000,000
Tax Due (a)

With Fringe Benefit of 1,200,000

Grossed-up Monetary value 1,764,705.88
Fringe Benefit Tax Due 564,705.88

Total Tax due (b) 1,281,705.88

I would advise company that the 1,200,000 should be given to the employee in the form of Compensation Income instead of Fringe Benefit. This will be a
Company because of the lesser amount of tax to be paid. Instead of the 35% FBT, the 1.2M will only be subjected to 32% tax

Prior to Train Law

Six percent (6%) beginning January 1, 1998;
Eight percent (8%) beginning January 1, 1999;
Cash and/or property dividends
Ten percent (10% beginning January 1, 2000

Interest from Depositary bank under EFCDS 7.50%

PCSO Winnings Exempt

Not over Php100,000 - 5%

Capital Gains from sale of shares of stocks not
traded through local stock exchange
On any amount in excess of Php100,000- 10%
Fringe Benefits 32% on the grossed up monetary value of FB
Tax on Alien Individuals employed by RHQs,
15% final withholding tax on gross compensation
ROHQs, OBUs, or Petroleum Service Contractors or
income
Subcontractors
 TRAIN LAW

2,500,000.00

0.00
2,500,000.00

490,000.00
160,000.00
650,000.00

1,846,153.85
646,153.85

1,296,153.85

ome instead of Fringe Benefit. This will be advantageous for the

cted to 32% tax

TRAIN LAW

1000%

15%
Winnings in excess of Php10,000 shall be subject
to 20% final tax

15%

35% on the grossed up monetary value of FB

The Preferential Tax Treatment provided in
Subsections (C), (D), and (E) of this Section shall
not be applicable to Regional Headquarters
(RHQS), Regional Operating Headquarters
(ROHQS), Offshore Banking Units (OBUS) or
Petroleum Service Contractors and Subcontractors
registering with the Securities and Exchange
Commission (SEC) after January 1, 2018:
Provided, however, that existing RHQS/ROHQS,
OBUS or Petroleum Service Contractors and
Subcontractors presently availing of Preferential
Tax Rate for present and future qualified
employees.

The italicized part has been vetoed by the

President effectively maintaining the special tax
rate of 15% of gross income for the
aforementioned employees, as it is said to be
violative of the Equal Protection Clause under
Section 1, Article III of the 1987 Constitution as
well as the rule of equity and uniformity in the
application of the burden of taxation.

Employees of the aforementioned firms should

follow the regular tax rates applicable to
other individual taxpayers.