Beruflich Dokumente
Kultur Dokumente
7. Personal Exemptions
a. Basic Personal Exemptions – 50,000 for each individual taxpayer
b. Additional Exemption – 25,000 for each legitimate, illegitimate or legally adopted and maximum
of 4 dependents
Requisites:
- Chiefly dependent upon the taxpayer
- Living with the taxpayer – custody rule
- Not more than 21 years old – incapacitated – mentally challenge
- Unmarried
- Not gainfully employed
8. Tax Rates
a. Compensation and Business/ Profession Income
SUMARRY OF TAX BASE AND TAX RATES ON COMPENSATION INCOME AND
BUSINESS INCOME OF INDIVIDUAL TAYPAYERS
Taxpayers Tax Base Tax Rate
Resident Citizen TCI or TBI 5% - 32%
RC - RAH, ROH TGCI 15% or 5% - 32%
RC - OBU TGCI 15%
RC – Petroleum Contractor TGCI 15%
Nonresident Citizen TCI or TBI 5% - 32%
Resident Alien TCI or TBI 5% - 32%
RA - RAH, ROH TGCI 15%
RA - OBU TGCI 15%
RA – Petroleum Contractor TGCI 15%
Nonresident Alien Taxable Gross Income 25%
Minimum Wage Earner – exempt from the payment of income tax
TCI – Taxable Compensation Income
TBI – Taxable Business Income
TGCI – Taxable Gross Compensation Income
SUMMARY OF WITHHOLDING TAX RATES FOR INDIVIDUALS
Type of Income Resident Citizen NRA - ETB NRA - NETB
or Alien
Dividends from a domestic 10% final 20% final 25% final
corporation
Royalties 20% final 20% final 25% final
Royalties on books, literary works, 10% final 10% final 25% final
and musical composition
Interest income from Philippine 20% final 20% final 25% final
currency bank deposits and deposit
substitute
Interest income on long-term
deposits
4 years to less than 5 years 5% final 5% final
3 years to less than 4 years 12% final 12% final
Less than 3 years 20% final 20% final
Interest income on foreign currency 7.5% final EXEMPT EXEMPT
bank deposit
Prizes exceeding 10,000 & 20% final 20% final 25% final
Winnings (except PCSO and Lotto
Winnings)
Cash or Property Dividends 10% final 20% final 25% final
Gains from sales of shares of stock 25% final
not traded in stock exchange
Not over 100,000 5% final 5% final
On any amount in excess of 100,000 10% final 10% final
Gains from sale of real property 6% final 6% final 6% final
classified as capital asset
Informer’s Reward 10% final
Prizes and Winnings – international (whole), 10,000 or less, PCSO and lotto winnings – graduated tax
Capital Gains – gains from sale or exchange of capital asset (property held by taxpayer) –graduated tax
Not including:
Stock in trade of taxpayer
Property included in the inventory of taxpayer
Property held primarily for sale to customer
Property used in business subject to depreciation
Real Property used in business
Informer’s Reward – 10% of the revenues, fine or penalty imposed or 1,000,000, whichever is lower
Withholding Tax – Creditable – credited against taxpayer final tax and adjusted; Final – no tax credit
and adjustment
9. Filling of Returns
a. Persons required to file income tax return
i) Every Filipino citizen
Except:
Person not required
Gross income does not exceed BPE and AE
Minimum wage earners
Income subject to final withholding tax
Subject to substituted filling
Receiving purely compensation from one employer
ii) Every NRC, RA, NRAETB, on income from sources within the Philippines
b. E-filling and Payment System – must register to BIR – Integrated Tax System. Large taxpayer must
go to Authorized Agent Bank
13. Penalties
a. Imposition of fine and/or imprisonment
b. Imposition of surcharge of 50% or 25%
c. Imposition of interest on any unpaid amount of tax at 20% annually
d. Deportation of the taxpayer, if an alien
Tax Reform for Acceleration and Inclusion (TRAIN) Law
INDIVIDUAL INCOME TAX
1. RA 10963
2. Definition of Terms
a. Compensation Income – services performed by an employee for his employer (employer-employee
relationship)
b. Employee – individual performing services under employer-employee relationship, including
employees appointed by Government
c. Employer – any person for whom an individual performs services
d. Fringe Benefits – any good, services or other benefit granted in cash by an employer to employee
(except rank and file employee)
Housing, Expense Account, Vehicle, Household Personnel, Interest on Loan, Membership Fees at
social or athletic clubs, Expenses for Foreign Travel, Holiday and Vacation Expenses, Education
Assistance, Life or Health Insurance
e. Gross Receipts – total amount of money or equivalents representing the contract price,
compensation, rental, including the amount charged for materials supplied with the services and
deposits and advance payments received during taxable year except returnable security deposits
f. Gross Sales – total sales transactions net of VAT, reported during the period, without any other
deduction. However, gross sales subject to 8% shall deduct the following: sales return and
allowances and sales discount
g. Minimum Wage Earner – worker in private sector who is paid with statutory minimum wage
(SMW) rates, or worker in public sector with compensation not more than the SMW rates. Exempt
from income tax including the holiday pay, hazard pay, overtime pay, and night shift differential
pay
h. Rank and File Employee – employee holding neither managerial nor supervisory position
i. Self-employed – sole proprietor or an independent contractor who reports income from self-
employment
j. VAT Threshold – ceiling fixed by law to determine VAT registrable, 3,000,000