UNIVERSITY OF THE EAST

College of Business Administration

Income RC NRC RA NRAETB NRANETB

1) Sale, exchange, or other
disposition of real property Final Tax : 6%
located in the Philippines On Gross Selling Price or Fair Market Value, whichever is higher
held as capital asset
2) Sale, barter or exchange or
other disposition of shares of
On Net Capital Gain (selling price less cost)
stock of a domestic
Not over P 100,000.00 : 5%
corporation, not disposed
On amount in excess of P 100,000 : 10%
through a local stock exchange
(NOTE A)
3) Interest from any peso bank
deposit, and yield or any other
monetary substitute and from Final Tax : 20%
trust fund and similar
arrangements. Final tax : 25%
4) Royalties Final Tax : 20% (Gross
5) Royalties on books, literary Income)
Final Tax : 10%
works, musical compositions
6) Prizes > P 10,000.00 Final Tax : 20%
7) Prizes < P 10,000.00 Graduated Rates
8) Other winnings Final Tax : 20%
9) PCSO & Lotto winnings Exempt
10) Interest income, foreign
depositary bank under Final Tax : Final Tax :
Exempt Exempt
Foreign Currency Deposit 7.5% 7.5%
System (FCDU)
11) Interest income, long-term
deposit or investment in banks
Exempt
with maturity of 5 years or
more
12) Interest income, long-term
deposit or investment in the
form of savings, common or
individual trust funds, deposit
substitutes, investment Holding Period Final Tax Rate
management accounts and 4 years to less than 5 years : 5%
other investments evidenced by 3 years to less than 4 years : 12%
certificates in such forms Less than 3 years : 20%
prescribed by the Bangko
Sentral which was
preterminated by the
holder before the 5th year
13) Cash and/or property
Final tax : 25%
dividends received from
(Gross
a) Domestic Corp.
Income)
b) Joint stock company
c) Insurance or Mutual fund
companies
d) Share of partner in
distributable net income after Final Tax :
Final tax : 10%
tax of a partnership (except 20%
general professional
partnership)
e) Share in net income after tax
of an association, a joint
account or joint venture or
consortium of which he is a
member or co-venturer
14) Inside PH: other not in 1 to
13, except 7, + business, Graduated Rates
profession, or compensation Graduated (Taxable Income)
income Rates
15) Outside PH: other items of (Taxable
income, including from Income)
Not taxable
business, profession or
compensation income

BTX 112 - TAXATION OF INDIVIDUALS | Atty. F. R. Soriano

 UNIVERSITY OF THE EAST
College of Business Administration

NOTES:
(A) If shares disposed through stock exchange: transaction not subject to income tax, BUT to stock
transaction tax of ½ of 1% of Gross Selling Price. Stock Transaction Tax is a percentage tax.
(B) Final tax for every transaction, and subject to adjustment at yearend for all transactions during the
year, i.e., compute the capital gains tax for the total net capital gain during the year and deduct
therefrom the capital gains tax to determine the capital gains tax still due or refundable.
(C) Prizes : Recipient exerts effort
Winnings : Game of chance
(D) Taxable Income = Gross Income - Allowable Deductions & Exemptions

BTX 112 - TAXATION OF INDIVIDUALS | Atty. F. R. Soriano