5 Passive Income 1

Passive Income (Final Withholding Tax)

Interest Income
FCDS Interest from Deposits and Yield or any other Monetary Benefit from
Deposit Substitutes

20% FWT - from any currency deposit
(time deposit to banks) and yield or
Income Taxpayer other monetary benefit from deposit
substitute and from trust funds and
similar arrangements. (NOT FCDS)
7.5% FWT from a depositary bank under the expanded Foreign Currency
Deposit System (FCDS) and an Offshore Banking Unit (OBU) [Income of Debtor]
20% FWT -
Interest Income From Long Term Deposit
Interest
NOTE: Tax Rate of (DC) Banks on Income derived under FCDS: [Income of
or Investment (from banks only and not
on Foreign
Creditor Bank] from any individual) = (FWT)
a) EXEMPT - Income derived by a (DC) depositary bank from foreign currency
Loans - Sec
a) Held for 5 years or more = EXEMPT
transactions with NON RESIDENTS (NRC, NRAETB, NRANETB, NRFC) and Offshore 28 B 5a
Banking Units, etc.
b) More than 4 years less than 5 = 5%
(ex: NRFC
b) 10% FWT - Interest income from foreign currency loans granted by a (DC) c) More than 3 years less than 4 = 12%
bank to RESIDENTS other than OBUs
lends to a
d) Less than 3 years = 20%
DC)
NOTE: Income of NON-RESIDENTS (NRC, NRAETB, NRANETB, NRFC) from
transactions with depositary banks under the expanded FCDS are EXEMPT from
Income Tax

INDIVIDUAL TAXPAYER
RC YES YES YES N/A
NRC (OCW) YES EXEMPT YES N/A
RA YES YES YES N/A
NRAETB YES EXEMPT YES N/A
NRANETB 25% GIT EXEMPT 25% GIT N/A
CORPORATE TAXPAYER

DC YES YES N/A N/A

RFC YES YES N/A N/A

NRFC 30% GIT EXEMPT N/A YES


20% FWT - from any currency deposit
(time deposit to banks) and yield or
Income Taxpayer other monetary benefit from deposit
substitute and from trust funds and
similar arrangements. (NOT FCDS)
Passive Income (Final Withholding Tax) Passive Income (Final Withholding Tax) Passive Income (Final Withholding Tax) Passive Income (Final Withholding Tax) Passive Income
Interest Income Royalties Prizes and Winnings 1. CASH and/or PROPERTY DIVIDENDS (NOT STOCK Cash and/or Property DIVIDENDS from a
FCDS Interest from Deposits and Yield or any other Monetary Benefit from 20% FWT - on Prizes exceeding P10K; Winnings DIVIDEND) from a DOMESTIC Corporation FOREIGN Corporation
Deposit Substitutes
not subject to 10K limitation 2. Share in the Distributable Net Income after tax
7.5% FWT from a depositary bank under the expanded Foreign Currency EXP: PCSO and Lotto winnings are not subject to of a taxable or business Partnership NOTE: for NRC and RA - If Considered as
Deposit System (FCDS) and an Offshore Banking Unit (OBU) [Income of Debtor]
20% FWT -
Interest Income From Long Term Deposit FWT (EXEMPT) 3. Share in the Net Income after tax of an from source within - Graduated Rates
Interest 10% FWT - Royalties
NOTE: Tax Rate of (DC) Banks on Income derived under FCDS: [Income of
or Investment (from banks only and not NOTE: Prizes 10K or less, although exempt from association, a joint account, or a joint venture (NIT) otherwise NOT taxable since from
on Foreign from 20% FWT - Other
Creditor Bank] from any individual) = (FWT) FWT are to be included in Gross Income and taxable as a corporation of which he is a member sources W/O Cinematographic Films and
a) EXEMPT - Income derived by a (DC) depositary bank from foreign currency
Loans - Sec 20% FWT - Royalties in a) Books Winnings other than
a) Held for 5 years or more = EXEMPT subject to graduated rates. NIT or a co-venturer Similar Works
transactions with NON RESIDENTS (NRC, NRAETB, NRANETB, NRFC) and Offshore 28 B 5a General b) Literary Works from PCSO and
Banking Units, etc.
b) More than 4 years less than 5 = 5%
(ex: NRFC c) Musical Lotto
b) 10% FWT - Interest income from foreign currency loans granted by a (DC) c) More than 3 years less than 4 = 12%
bank to RESIDENTS other than OBUs
lends to a Compositions
d) Less than 3 years = 20%
DC)
NOTE: Income of NON-RESIDENTS (NRC, NRAETB, NRANETB, NRFC) from
transactions with depositary banks under the expanded FCDS are EXEMPT from
Income Tax

INDIVIDUAL TAXPAYER
RC YES YES YES N/A YES YES YES YES 10% FWT Graduated Rates - NIT Graduated Rates - NIT
NRC (OCW) YES EXEMPT YES N/A YES YES YES YES 10% FWT If Sources W/N - Graduated Rates Graduated Rates - NIT
RA YES YES YES N/A YES YES YES YES 10% FWT If Sources W/N - Graduated Rates Graduated Rates - NIT
NRAETB YES EXEMPT YES N/A YES YES YES YES 20% FWT If Sources W/N - Graduated Rates 25% GIT
NRANETB 25% GIT EXEMPT 25% GIT N/A 25% GIT 25% GIT 25% GIT 25% GIT 25% GIT If Sources W/N - Graduated Rates 25% GIT
CORPORATE TAXPAYER
20% FWT if W/N;
DC YES YES N/A N/A If W/O enters the taxable N/A N/A N/A EXEMPT 30% NCIT 30% NCIT
income 30% NCIT

20% FWT if W/N; If Sources W/N , 30% otherwise

RFC YES YES N/A N/A N/A N/A N/A EXEMPT If Sources W/N , 30% otherwise Exempt
If W/O - EXEMPT Exempt

30% GIT if W/N; 15% - With Tax Sparing; 30% - Without Tax Sparing
NRFC 30% GIT EXEMPT N/A YES N/A N/A N/A If Sources W/N , 30% otherwise Exempt 25% GIT
If W/O EXEMPT (Spare)
5 Passive Income 2

Passive Income (Final Withholding Tax) Passive Income (Final Withholding Tax) Passive Income (Final Withholding Tax) Passive Income
Royalties Prizes and Winnings 1. CASH and/or PROPERTY DIVIDENDS (NOT STOCK Cash and/or Property DIVIDENDS from a
20% FWT - on Prizes exceeding P10K; Winnings DIVIDEND) from a DOMESTIC Corporation FOREIGN Corporation
not subject to 10K limitation 2. Share in the Distributable Net Income after tax
EXP: PCSO and Lotto winnings are not subject to of a taxable or business Partnership NOTE: for NRC and RA - If Considered as
FWT (EXEMPT) 3. Share in the Net Income after tax of an from source within - Graduated Rates
10% FWT - Royalties
NOTE: Prizes 10K or less, although exempt from association, a joint account, or a joint venture (NIT) otherwise NOT taxable since from
from 20% FWT - Other
FWT are to be included in Gross Income and taxable as a corporation of which he is a member sources W/O Cinematographic Films and
20% FWT - Royalties in a) Books Winnings other than
Income Taxpayer subject to graduated rates. NIT or a co-venturer Similar Works
General b) Literary Works from PCSO and
c) Musical Lotto
Compositions

INDIVIDUAL TAXPAYER
RC YES YES YES YES 10% FWT Graduated Rates - NIT Graduated Rates - NIT
NRC (OCW) YES YES YES YES 10% FWT If Sources W/N - Graduated Rates Graduated Rates - NIT
RA YES YES YES YES 10% FWT If Sources W/N - Graduated Rates Graduated Rates - NIT
NRAETB YES YES YES YES 20% FWT If Sources W/N - Graduated Rates 25% GIT
NRANETB 25% GIT 25% GIT 25% GIT 25% GIT 25% GIT If Sources W/N - Graduated Rates 25% GIT
CORPORATE TAXPAYER
20% FWT if W/N;
DC If W/O enters the taxable N/A N/A N/A EXEMPT 30% NCIT 30% NCIT
income 30% NCIT

20% FWT if W/N; If Sources W/N , 30% otherwise

RFC N/A N/A N/A EXEMPT If Sources W/N , 30% otherwise Exempt
If W/O - EXEMPT Exempt

30% GIT if W/N; 15% - With Tax Sparing; 30% - Without Tax Sparing
NRFC N/A N/A N/A If Sources W/N , 30% otherwise Exempt 25% GIT
If W/O EXEMPT (Spare)