Exempt from tax

5% Final tax on the

entire income
12%
20%
10% Final Tax

Exempt from tax

5% Final tax on
the entire income
12%
20%
10% Final Tax

Schedular rate

Schedular rate
exempt
exempt

Final Tax of 10%

Final Tax of 10%

exempt
7.5% Final Tax

RATE FOR NONRESIDENT CITIZEN

(INCL. OCW)
20% Final Tax

TAX RATE FOR

RESIDENT
CITIZEN
20% Final Tax

TAX LAW REVIEWER

Winnings from PCSO & Lotto

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;
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

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
Prizes < P10,000

TYPE OF INCOME

5% Final tax on the

entire income
12%
20%
20% Final Tax

Exempt from tax

Exempt
Exempt

Schedular rate

Final Tax of 10%

NON-RESIDENT ALIEN
ENGAGED IN TRADE /
BUSINESS
20% Final Tax

Page 155 of 165

5% Final tax on the

entire income
12%
20%
10% Final Tax

Exempt from tax

Exempt
7.5% Final Tax

Schedular rate

Final Tax of 10%

20% Final Tax

TAX RATE FOR

RESIDENT ALIEN

N/A
N/A
25% Final tax

N/A

25% Final tax

25% Final tax

Exempt

25% Final tax

25% Final tax

NON-RESIDENT ALIEN
NOT ENGAGED IN
TRADE / BUSINESS
25% Final tax

TAX ON INDIVIDUALS
**a nonresident alien engaged in trade or business is an individual who shall come to the Philippines & stay therein for an aggregate period of more than 180 days during any calendar
year

Exempt from CG
tax

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

10%

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

TAX RATE FOR

RESIDENT
CITIZEN

TAX LAW REVIEWER

CG from sale/disposition of principal residence by

natural 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

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

For the first P100,000

On any amount in excess of P100,000

of an assn., a joint account or a joint venture or

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

TYPE OF INCOME

Exempt from CG tax

6% Final Tax on the

gross selling price
or
current
fair
market value or
zonal
value
whichever is higher

10%

5% Final tax on net

capital gains
realized during the
taxable yr:

RATE FOR NONRESIDENT CITIZEN

(INCL. OCW)

Exempt from CG tax

6% Final Tax on the

gross selling price or
current fair market
value or zonal value
whichever is higher

10%

5% Final tax on net

capital gains realized
during the taxable yr:

NON-RESIDENT ALIEN
ENGAGED IN TRADE /
BUSINESS

Page 156 of 165

Exempt from CG tax

6% Final Tax on the

gross selling price or
current fair market
value or zonal value
whichever is higher

10%

5% Final tax on net

capital gains realized
during the taxable yr:

TAX RATE FOR

RESIDENT ALIEN

Exempt from CG tax

6% Final Tax on the

gross selling price or
current fair market
value or zonal value
whichever is higher

10%

5% Final tax on net

capital gains realized
during the taxable yr:

NON-RESIDENT ALIEN
NOT ENGAGED IN
TRADE / BUSINESS

5% Final tax on net capital

gains realized during the
taxable yr:
10%
Exempt from Final tax Part
of gross income subject to
35%/30% corp. income tax
(RA 9294)
10% Final Tax
Exempt from tax

5% Final tax on net capital

gains realized during the
taxable yr:
10%
Exempt from Final tax Part
of gross income subject to
35%/30% corp. income tax
(RA 9294)
10% Final Tax
Exempt from tax

6% Final tax on gross selling

price or FMV or zonal value,
whichever is higher

CG from sale, exchange or other disposition of lands and/or buildings

which are not used in the business of a corp. & are treated as capital
assets

TAX LAW REVIEWER

7.5% Final Tax

7.5% Final Tax

Page 157 of 165

35%/30% income tax

RESIDENT FOREIGN CORP

20% Final Tax

DOMESTIC CORP
20% Final Tax

TYPE OF INCOME
Interest on currency bank deposits & yield or any other monetary
benefit from 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)
CG from sale, barter, exchange or other disposition of shares of stock
(of domestic corp.) not traded in the stock exchange
For the first P100,000
On any amount in excess of P100,000
Income derived by depositary bank under the EFCDS from foreign
currency transactions with non-residents, offshore banking unites in
the Philippines, 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
Interest income from foreign currency loans granted by such
depository banks under said EFCDS to RESIDENTS
Inter-corporate dividends (from a domestic corp.)

TAX ON CORPORATIONS

15% Final Tax

* subject to the rule on tax
credit for tax actually paid
and tax deemed paid.
Otherwise,
subject
to
regular income tax rate of
35%/30%
35%/30% income tax

N/A

5% Final tax on net cap.l

gains realized during the
taxable yr:
10%
N/A

Exempt from tax

NON-RESIDENT FOREIGN
35%/30% Income Tax

TAX LAW REVIEWER

10% of taxable income

Exempt from tax

Final Tax of 10% on gross income from

transactions with residents
15% on branch profits remittance

TAX RATE
2 % on Gross Phil Billings

Page 158 of 165

Regional Operating Headquarters of Multinational Companies = engaged in any of the following services:
a. General Administration & planning
j. Technical support & maintenance
b. Business planning & coordination
k. Data processing & communication
c. Sourcing & procurement of raw materials & components
l. Business development
d. Corporate finance advisory services
e. Marketing control & sales promotion
f. Training & personnel mgt.
g. Logistic services
h. Research & development
i. Services & product development

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 the PEZA-registered)
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

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

TYPE OF CORPORATE TAXPAYER

International Air Carrier
Gross Phil. Billings = amount of gross revenue derived from carriage of persons, excess baggage, cargo & mail
originating from 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
         nt 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

Subject to regular graduated tax

rate

Subject to regular graduated tax

rate

Subject to regular graduated tax

rate

TAX RATE FOR ALIEN INDIVIDUAL EMPLOYED BY

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

25% of gross income

4.5% of gross rentals, lease or charter fees
7.5% of gross rentals or fees

TAX RATE

TAX LAW REVIEWER

Page 159 of 165

** Multinational company = a foreign firm/entity engaged in international trade with affiliates/subsidiaries/branch offices in the Asia Pacific Region & other foreign markets.

Gross Income = Salaries, Wages, Annuities,

Compensation, Remuneration and 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
Other income (that is income other than compensation
from being employed by a RHQ/ROHQ, OBU or
Petroleum Service Contractor & Subcontractor)

TYPE OF INCOME

TYPE OF TAXPAYER
Nonresident cinematographic film owner, lessor or distributor (NOTE: Even to individuals)
Nonresident owner or lessor of vessels chartered by the Phil. Nationals
Nonresident owner or lessor of aircraft, machineries & other equipment