Briefing on RA 10963: Tax

Reform for Acceleration and

Inclusion (TRAIN) – Income
Tax
NIRC Provision NIRC TRAIN

Section 24 Taxable income of individuals are subject to the Revised personal income tax
Income tax rates following graduated rates: brackets of 2018-2022:
on individual Tax Schedule Tax Schedule effective January 1,
citizen and 2018 to December 31, 2022
individual Not over P10,000 5%
resident alien of Not over 0%
Over P10,000 but not P500 + 10% of the
the Philippines over P30,000 excess over P10,000
P250,000
Over P30,000 but not P2,500 + 15% of the
over P70,000 excess over P30,000

Over P70,000 but not P8,500 + 20% of the

over P140,000 excess over P70,000
Over P140,000 but not P22,500 + 25% of the
over P250,000 excess over P140,000

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
 NIRC NIRC TRAIN
Provision
Section 24 Taxable income of individuals are Revised personal income tax brackets of 2018-
Income tax subject to the following graduated rates: 2022:
rates on Tax Schedule Tax Schedule effective January 1, 2018 to
individual December 31, 2022
citizen and Over P250,000 but P50,000 + 30% of Over P250,000 but 20% of the excess over
individual not over P500,000 the excess over not over P400000 P250,000
resident alien of P250,000 Over P400,000 but P30,000 + 20% of the
the Philippines Over P500,000 P125,000 + 32% not over P800,000 excess over P400,000
of the excess over Over P800,000 but P130,000 + 30% of the
P500,000 not over P2million excess over P800,000

Over P2Million but P490,000 + 32% of the

not over P8Million excess over P2Million
Over P8Million P2,410,000 + 35% of the
excess over P8Million

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
NIRC Provision NIRC TRAIN

Section 24 For 2023 onwards:

Income tax rates Tax Schedule effective January 1, 2018 to
on individual December 31, 2022
citizen and Not over P250,000 0%
individual
Over P250,000 but 15% of the excess over
resident alien of not over P400,000 P250,000
the Philippines
Over P400,000 but P22,500 +20% of the
not over P800,000 excess over P400,000
Over P800,000 but P102,500 + 25% of the
not over P2,000,000 excess over P800,000
Over P2Million but P402,500 + 30% of the
not over P8Million excess over P2Million
Over P8Million P2,202,500 + 35% of the
excess over P2Million

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
NIRC Provision NIRC TRAIN

Section 24 Refer to Revenue Memorandum Circular (RMC)

Income tax rates Nos. 105-2017 and 1-2018, Revised Withholding
on individual citizen Tax on Compensation Table
and individual
resident alien of the
Philippines
Section 24 Taxable income is subject to the For purely self-employed and/or professionals
Income tax of self- same graduated rates whose gross sales/receipt and other non-
employed and/or operational income do not exceed the VAT
professionals threshold of P3Million, the tax shall be, at the
taxpayer’s option, either:
1. 8% income tax on gross sales or gross
receipts in excess of P250,000 in lieu of the
graduated income tax rates and the other
percentage tax; OR
2. Income tax based on the graduated income
tax rates for individuals

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
NIRC Provision NIRC TRAIN

Section 24 Taxable income is subject For mixed income earners (earning both
Income tax of to the same graduated compensation income and income from business or
mixed income rates practice of profession, their income taxes shall be:
earners 1. For income from compensation – Graduated
income tax rates for individuals, AND
2. For income from business or practice of
profession:
a. Gross sales/receipts which do not exceed
the VAT threshold of P3Million – 8% income
tax on gross sales/receipts and other non-
operating income OR graduated income tax
rates on taxable income, at the taxpayer’s
option
b. Gross sales/receipts and other non-operating
income which exceeds the VAT threshold of
P3Million – graduated income tax rates for
individuals

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
 Illustration 1: Mr. CSO, works for G.O.D., Inc. He is not engaged in business
nor has any other source of income other than his employment. For 2018, Mr.
CSO earned a total taxable compensation income of ₱1,060,000.00.

Compute for the Income Tax Due of Mr. CSO.

His income tax liability will be computed as follows:

Taxable Compensation Income ₱
1,060,000.00
Tax Due:
On P800,000.00
₱ 130,000.00
On excess (P1,060,000.00 - P800,000.00) x 30% 78,000.00
Tax Due
₱ 208,000.00

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
 Illustration 2: Ms. EBQ operates a convenience store while she offers bookkeeping
services to her clients. In 2018, her gross sales amounted to P800,000.00, in addition
to her receipts from bookkeeping services of ₱300,000.00. She already signified her
intention to be taxed at 8% income tax rate in her 1st quarter return.

Her income tax liability for the year will be computed as follows:
Gross Sales – Convenience Store ₱
800,000.00
Gross Receipts – Bookkeeping
300,000.00
Total Sales/Receipts
₱ 1,100,000.00
Less: Amount allowed as deduction under Sec. 24(A)(2)(b) 250,000.00
Taxable Income
₱ total
* The 850,000.00
of gross sales and gross receipts is below the VAT threshold of ₱3,000,000.00.
Tax Due:
* Income tax imposed herein is based on the total of gross sales and gross receipts.
8% of tax
* Income P850,000.00
payment is in lieu of the graduated income tax rates under subsection (A) hereof and percentage
₱ 68,000.00
tax due, by express provision of law.

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
 Illustration 3: Ms. EBQ above, failed to signify her intention to be taxed at 8% income
tax rate on gross sales in her 1st Quarter Income Tax Return, and she incurred cost
of sales and operating expenses amounting to ₱600,000.00 and ₱200,000.00,
respectively, or a total of ₱800,000.00, the income tax shall be computed as follows:

Gross Sales/Receipts ₱
1,100,000.00
Less: Cost of Sales
600,000.00
Gross Income
₱ 500,000.00
Less: Operating Expenses 200,000.00
Taxable Income
₱ 300,000.00
Tax Due:
* Aside from income
On excess tax, Ms.
(P300,000 EBQ is likewise
- P250,000) x 20% liable to pay business tax. ₱ 10,000.00

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
 Illustration 4: Mr. JMLH signified her intention to be taxed at 8% income tax rate on
gross sales in her 1st Quarter Income Tax Return. However, her gross sales during the
taxable year has exceeded the VAT threshold.
Q1 Q2
Q3 Q4
(8% Rate) (8% Rate) (8% Rate)

Total Sales ₱ 500,000.00 ₱ 500,000.00 ₱ 2,000,000.00 ₱

3,000,000.00
Less: Cost of Sales 300,000.00 300,000.00 1,200,000.00 1,200,000.00
Gross Income ₱ 200,000.00 ₱ 200,000.00 ₱ 800,000.00 ₱
1,800,000.00
Less: Operating
Expenses 120,000.00 120,000.00 480,000.00
720,000.00
Taxable Income ₱ 80,000.00 ₱ 80,000.00 ₱ 320,000.00 ₱ 1,080,000.00

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
 Tax due shall be computed as follows:
Total Sales
₱ 6,000,000.00
Less: Cost of Sales
3,000,000.00
Gross Income
₱ 3,000,000.00
Less: Operating Expenses
1,440,000.00
Taxable Income
₱ 1,560,000.00
* The gross
Incomereceipts exceeded the VAT threshold of P3,000,000.00. Taxpayer shall be liable to pay income tax under
Tax Due
graduated
Tax rates pursuant
Due under thetograduated
Section 24(A)(2)(a)
rates of the Tax Code, as amended. ₱
* Taxpayer shall be allowed an income tax credit of quarterly payments initially made under the 8% income tax
358,000.00
option.Less: 8% income tax previously paid (Q1 to Q3) 220,000.00
* Taxpayer is likewise liable for
Annual Income Tax Payable business tax(es), in addition to income tax. A percentage tax pursuant ₱
to Section 116
of the 138,000.00
Tax Code, as amended, shall be imposed on the first P3,000,000.00. The excess of the threshold shall be
subject to VAT.
*Percentage tax due on the P3,000,000.00 shall be collected without penalty, if timely paid on the due date
immediately following the month the threshold was breached.
TRAIN Briefing – Income Tax
VER 1.0 – January 2018
 Illustration 5: Ms. RPSV, a prominent independent contractor who offers architectural
and engineering services. Since her career flourished, her total gross receipts
amounted to ₱4,250,000.00 for taxable year 2018. Her recorded cost of service and
operating expenses were ₱2,150,000.00 and ₱1,000,000.00, respectively.

Her income tax liability will be computed as follows:

Gross Receipts – (Arch. and Eng’g Services) ₱ 4,250,000.00
Less: Cost of Service
2,150,000.00
Gross Income
₱ 2,100,000.00
Less: Operating Expenses
1,000,000.00
Taxable Income
₱ 1,100,000.00
Tax Due:
On ₱800,000.00
* The gross receipts exceeded the VAT threshold of P3,000,000.00. She is liable for
₱ 130,000.00
business tax/es, in addition to income tax.
On excess (P1,100,000.00 - P800,000.00) X 30% 90,000.00
Income Tax Due
₱TRAIN220,000.00
Briefing – Income Tax
VER 1.0 – January 2018
Illustration 6: In 2018, Mr. GCC owns a nightclub and videoke bar, with gross
sales/receipts of ₱2,500,000.00. His cost of sales and operating expenses are
₱1,000,000.00 and ₱600,000.00, respectively, and with non-operating income of ₱100,000.00.
His tax due for 2018 shall be computed as follows:
Taxable Income from Business:
Gross Sales
₱ 2,500,000.00
Less: Cost of Sales
1,000,000.00
Gross Income
₱ 1,500,000.00
Less: Operating Expenses
600,000.00
Net Income from Operation ₱
900,000.00
Add: Non-operating Income
100,000.00
* The taxpayer has no option to avail of the 8% income tax rate on his income from business since his business income is subject to
Taxable Income
Other Percentage Tax under Section 125 of the Tax Code, as amended.
₱ 1,000,000.00tax, taxpayer is liable to pay the prescribed business tax.
* Aside from income
Tax Due:
TRAIN Briefing – Income Tax
On ₱800,000.00
VER 1.0 – January 2018
Illustration 7: In 2018, Mr. MAG, a Financial Comptroller of JAB Company, earned
annual compensation of ₱1,500,000.00, inclusive of 13th month and other benefits in
the amount of ₱120,000.00 but net of mandatory contributions to SSS and
Philhealth. Aside from employment income, he owns a convenience store, with gross
sales of ₱2,400,000. His cost of sales and operating expenses are ₱1,000,000.00 and
₱600,000.00, respectively, and with non-operating income of ₱100,000.00.

a. His tax due for 2018 shall be computed as follows if he opted to be taxed at eight percent (8%)
income tax rate of his gross sales for his income from business:

Total compensation income ₱

1,500,000.00
Less: Non-taxable 13th month pay and other benefits ____ 90,000.00
Taxable Compensation Income ₱
1,410,000.00
Tax due:
1. On Compensation:
On ₱800,000.00
₱ 130,000.00
On excess (P1,410,000 – P800,000) x 30% 183,000.00
TRAIN
Tax dueBriefing – Income Tax Income
on Compensation ₱
VER 1.0 – January 2018
313,000.00
2. On Business Income:
Gross Sales
₱ 2,400,000.00
Add: non-operating income of
100,000.00
Taxable Business Income ₱
2,500,000.00
Multiplied by income tax rate 8%
TaxofDue
* The option on Business
8% income tax rateIncome
is applicable only to taxpayer’s income from ₱
200,000.00
business and the same is in lieu of the income tax under the graduated income
Total
tax rates and theIncome Tax tax
percentage Dueunder
(Compensation and
Section 116 of theBusiness)
Tax Code, as ₱ 513,000.00
amended.
* The amount of ₱250,000.00 allowed as deduction under the law for taxpayers
earning solely from self-employment/practice of profession, is not applicable
for mixed income earner under the 8% income tax rate option.

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
b. His tax due for 2018 shall be computed as follows if he did not opt for the eight percent (8%) income
tax based on gross sales/receipts and other nonoperating income:
Total compensation income
₱ 1,500,000.00
Less: Non-taxable 13th month pay and other benefits 90,000.00
Taxable Compensation Income
₱ 1,410,000.00
Add: Taxable Income from Business –
Gross Sales
₱ 2,400,000.00
Less: Cost of Sales
1,000,000.00
Gross Income
₱ 1,400,000.00
Less: Operating Expenses
600,000.00
Net *Income from Operation
The taxable income from both compensation and business shall be combined for purposes of computing the income tax due if the taxpayer chose to
₱ be 800,000.00
subject under the graduated income tax rates.
* In addition to the income tax, Mr. MAG is likewise liable to pay percentage tax of ₱72,000.00, which is 3% of ₱2,400,000.00
Add: Non-operating Income
100,000.00
TRAIN
Total Briefing –Income
Taxable Income Tax
₱VER 1.0 – January 2018
2,310,000.00
Illustration 8: In 2018. Mr. WBV, an officer of AMBS International Corp. earned annual compensation of
₱1,200,000.00, inclusive of 13 th month and other benefits in the amount of ₱120,000.00. Aside from employment
income, he owns a farm, with gross sales of ₱3,500,000. His cost of sales and operating expenses are ₱1,000,000.00
and ₱600,000.00, respectively, and with non-operating income of ₱100,000.00.

His tax due for 2018 shall be computed as follows:

Total compensation income ₱
1,200,000.00
Less: Non-taxable 13th month pay and other benefits (max) 90,000.00
Taxable Compensation Income
₱ 1,110,000.00
Add: Taxable Income from Business –
Gross Sales ₱
3,500,000.00
Less: Cost of Sales
1,000,000.00
Gross Income ₱
2,500,000.00
Less: Operating Expenses 600,000.00
Net Income from Operation ₱ 1,900,000.00
Add: Non-operating Income 100,000.00
TRAIN Briefing – Income Tax
2,000,000.00
VER 1.0 – January
Total Taxable 2018
Income
Illustration 9: Ms. RPSV is a prominent independent contractor who offers architectural and engineering services.
Since her career flourished, her total gross receipts amounted to ₱4,250,000.00 for taxable year 2018. Her recorded
cost of service and operating expenses were ₱2,150,000.00 and ₱1,000,000.00, respectively.

OSD will be computed as follows:

Gross Receipts – Architectural and Engineering Services ₱ 4,250,000.00
Multiply by Rate 40%
Optional Standard Deduction
₱ 1,700,000.00

Her Net Taxable Income will be computed as follows:

Gross Receipts – Architectural and Engineering Services ₱ 4,250,000.00
Less: OSD
1,700,000.00
Net Taxable Income
₱ 2,550,000.00
Her income tax liability
* The individualwill be computed
taxpayer elected OSD inas
thefollows:
computation of her income tax and the election is irrevocable for the taxable year
On ₱2,000,000.00
for which the return was made.
* Taxpayer is not required to submit his financial statements with his tax return.
₱ 490,000.00 * The gross receipts exceeded the VAT threshold of ₱3,000,000.00, thus, the taxpayer is subject under the graduated
On Excess (₱2,550,000.00
income tax rates – ₱2,000,000.00)
and liable for businessxtax,
32%
in addition to income tax.
176,000.00
TRAIN
IncomeBriefing
Tax Due – Income Tax
VER
₱ 1.0 – January 2018
666,000.00
NIRC Provision NIRC TRAIN

Section 24 (B) (1) Philippine Charity Sweepstakes Philippine Charity Sweepstakes and
Final tax on and Lotto winnings – exempt Lotto winnings in excess of P10,000
winnings from the 20% final tax shall be subject to the 20% final tax

Section 24 (B) (1) Interest income received by an The rate of final tax on interest
Final tax on individual taxpayer (except a income received by resident
interest on foreign non-resident individual) from a individual taxpayer under the
currency deposit depository bank under the expanded foreign currency deposit
expanded foreign currency system increased from 7.5% to 15%
deposit (EFCD) system is final tax
subject to 7.5% final tax

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
NIRC Provision NIRC TRAIN

Section 24 (C) The capital gains tax on net The final tax rate for net capital gains
Capital gains tax capital gains realized from sale, tax on the sale, barter, exchange or
on sale of shares barter, or exchange or other other disposition of shares of stock in
not traded disposition of shares of stock in a domestic corporation no traded
through the a domestic corporation not through the stock exchange is
stock exchange traded through the stock increased from 5/10% CGT to a flat
exchange is: rate of 15% CGT

Not over P100,000 – 5%

On any amount in excess of

P100,000 – 10%

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
 NIRC NIRC TRAIN
Provision
Section 25 (C) Alien individuals and qualified Additional provision [Subsection (F)]
(D) (E) Filipino employees employed by The 15% preferential tax rate
Preferential tax 1. Regional or area and Regional provided in Subsection (C), (D) and
rate for Operating headquarters or (E) shall not be applicable to RHQs.
individuals multinational companies ROHQs, OBUs or Petroleum service
employed by (RHQs and ROHQs) contractor and subcontractor
RHQ, ROHQ, OBU [Subsection (C)] registering with the SEC after
and Petroleum 2. Offshore banking units (OBUs) January 1, 2018
Contractors [Subsection (D)]
Capital and 3. Petroleum Service contractor But existing RHQs, ROHQs, OBUs or
subcontractors and subcontractor [Subsection Petroleum service contractor and
(E)] subcontractor shall continuously be
are subject to a preferential tax of entitled to avail of the preferential
15% final withholding tax on gross tax treatment for their present and
compensation income. future qualified employees.

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
 NIRC NIRC TRAIN
Provision
Section 24 (C) Presidential Veto:
(D) (E) The President vetoed this line item under
Preferential tax Subsection (F)
rate for “But existing RHQs, ROHQs, OBUs or
individuals Petroleum service contractor and
employed by subcontractor shall continuously be entitled to
RHQ, ROHQ, OBU avail of the preferential tax treatment for their
and Petroleum present and future qualified employees.”
Contractors
for being violative of equal protection
Capital and
subcontractors The President stated in his letter that, “given
the significant reduction in the personal
income tax, the employees of these firms
should follow the regular tax rates applicable
to other individual taxpayers.”
TRAIN Briefing – Income Tax
VER 1.0 – January 2018
NIRC Provision NIRC TRAIN

Section 31 Means the pertinent items of The phrase “and/or personal and
Definition of gross income specified in this additional exemptions” is removed in
Taxable Income Code, less the deductions and/or the definition.
personal and additional
exemptions, if any, authorized for
such types of income by this
Code or other special laws
Section 35 Individual taxpayers are entitled The Basic Personal and Additional
Personal to: Exemptions of individual taxpayers
Exemptions Basic Personal Exemption – are removed.
P50,000
The related provision on furnishing
and exemption certificate is likewise
Additional Exemption – P25,000 removed.
per qualified dependent child
TRAIN Briefing – Income Tax
VER 1.0 – January 2018
NIRC Provision NIRC
Section 32 (B) The amount of tax-exempt 13th
Tax exempt 13th month pay and other benefits is
month pay P82,000.
Section 33 (A) ✓ Fringe benefits given to non-
Tax on fringe rank and file employees are
benefits given to subject to 32% final tax
non-rank and file ✓ The grossed up monetary
employees value of the fringe benefit
given to non-rank and file
employees shall be
determined by dividing the
actual monetary value by 68%
TRAIN Briefing – Income Tax
VER 1.0 – January 2018
TRAIN
The amount of tax-exempt 13th
month pay and other benefits is
increased to P90,000.
✓ The Fringe Benefits Tax is
increased to 35% effective
January 1, 2018
✓ The grossed up monetary value of
the fringe benefit given to non-
rank and file employees shall be
determined by dividing the actual
monetary value by 65%
NIRC Provision NIRC TRAIN

Section 34 (M) The allowable deduction for Allowable deduction for premium
Allowable premium payments on health payments on health and/or
deduction for and/or hospitalization insurance hospitalization insurance of an
premium of an individual taxpayer is individual taxpayer is removed.
payments on P2400 per year or P200 per
health and/or month, subject to a gross family
hospitalization income threshold of P250,000.
insurance
Section 51 An individual whose gross Individual taxpayers whose taxable
Filing of income does not exceed his total income is subject to zero percent
individual income personal and additional under the new graduated tax table
tax return exemptions for dependents are (i.e., does not exceed P250,000) shall
not required to file income tax not be required to file an income tax
return (ITR). return.

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
NIRC Provision NIRC TRAIN

Additional provision:
The ITR shall consist of a maximum
of four (4) pages in paper OR
electronic form. It shall only contain
the following information:
✓ Personal profile and information
✓ Gross sales receipts or income
from compensation, from
business, or from exercise of
profession (except income
subject to final tax)
✓ Allowable deductions
✓ Taxable income
✓ Income tax due and payable

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
NIRC Provision NIRC TRAIN

Section 51-A No provision Substituted filing or ITRs is available

Substituted Filing for:
of income tax ✓ Individual taxpayers
returns by ✓ Receiving purely compensation
employees income, regardless of amount
receiving purely ✓ From only one employer in the
compensation Philippines for he calendar year
income from only ✓ The income tax of which has been
one employer in correctly withheld by the employer
the Philippines (i.e., tax due = tax withheld)
The Certificate of Withholding field by
the employers duly stamped “receive”
by the BIR shall be the substituted
filing by such employers

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
 NIRC Provision NIRC TRAIN
Section 56 (A) (2) When tax due exceeds ₱2,000, the The new deadline of payment of
Installment taxpayer (other than a corporation) second installment is October 15
Payment of tax may elect to pay the tax in two following the close of the calendar
due for individuals equal installments. Payment of year.
and corporations installments:
✓ First installment – time of filing
of return
✓ Second installment – on or
before July 15 following the
close of the calendar year.
Section 62 There is allowed personal The exemption for estates and
Exemption for exemption of ₱50,000 from the trusts is removed.
estates and trusts income of the estate or trust.

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
 NIRC Provision NIRC
Section 74 Every individual subject to income
Declaration of tax shall make and file a declaration
Income tax for of his estimated income for the
individuals current taxable year on or before
April 15 of the same taxable year.
The amount of estimated income
with respect to which a declaration
is required shall be paid in four (4)
installments:
✓ First – at time of declaration
✓ Second – August 15
✓ Third – November 15
✓ Fourth – on or before April 15 of
the following calendar year when
the final adjusted income tax
return is due to be filed.
TRAIN Briefing – Income Tax
VER 1.0 – January 2018
TRAIN
The deadline for filing of declaration
estimated income for the current
taxable year is on or before May15 of
the same taxable year.
The payment of the four installments
shall be:
✓ First – May 15
✓ Second – August 15
✓ Third – November 15
✓ Fourth – on or before May 15 of
the following calendar year when
the final adjusted income tax return
is due to be filed.
 NIRC Provision NIRC
Section 34 (L) Individual taxpayers (except non-
Optional Standard resident alien) and corporations
Deduction may elect a standard deduction not
exceeding 40% of gross sales/
receipts or of gross income, as the
case may be, in lieu of itemized
allowable deductions.
Section 57 The rate of withholding tax on items
Withholding of of income payable by payor-
creditable tax at corporations/persons shall be not
source less than one percent (1%) but not
more than thirty-two percent (32%).
TRAIN
For GPPs and the partners comprising
them, OSD may be availed only once,
i.e., either by the GPP itself or by the
partners comprising the GPP.
Beginning January 1, 2019, the rate of
withholding tax shall be not less than
one percent (1%) but not more than
fifteen percent (15%).

The tax withheld shall be credited

against the income tax liability of
the taxpayer.

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
 NIRC Provision NIRC TRAIN
Section 27 (C) The Philippine Charity PCSO is not anymore exempt from
Exemption Sweepstakes Office (PCSO) is payment of corporate income tax.
Government-owned among the list GOCCs, agencies,
or – Controlled or instrumentalities that are
Corporations, exempt from payment of
Agencies or corporate income tax.
Instrumentalities
Section 27 (D) (1) Interest income received by a The rate of final tax on interest
Final Tax on domestic corporation from a income received by domestic
interest on foreign depository bank under the corporation under the expanded
currency deposit expanded foreign currency deposit foreign currency deposit system
(EFCD) system is subject to 7.5% increased from 7.5% to 15% final tax.
final tax.

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
 NIRC Provision NIRC
Section 27 (D) (2) The capital gains tax on net
Capital gains tax capital gains realized from sale,
on sale of shares barter, or exchange or other
not traded through disposition of shares of stock in a
the stock exchange domestic corporation nor traded
through the stock exchange is:
Not over ₱100,000 – 5%
On any amount in excess of
₱100,000 – 10%
TRAIN Briefing – Income Tax
VER 1.0 – January 2018
TRAIN
The final tax rate for net capital
gains tax on the sale, barter,
exchange or other disposition of
shares of stock in a domestic
corporation not traded through the
stock exchange is increased from
the 5/10% CGT to a flat rate of 15%
CGT.
Final Withholding Tax and Expanded Withholding Tax Returns
NIRC Provision NIRC TRAIN
Section 58 The return for FWT and the return FWT and EWT returns shall be filed
Return and for creditable withholding taxes and the payment made not later than
payments of taxes (EWT returns) shall be filed within the last day of the month following
withheld at source ten (10) days after the end of each the close of the quarter during which
month [Sec. 2.58 of RR No. 2-98] the withholding was made.

The provision that the Commissioner

may require the payment of the
taxes withheld at more frequent
intervals is removed.

TRAIN Briefing – Income Tax

VER 1.0 – January 2018
 NIRC Provision NIRC
Section 52 Every corporation subject to tax,
Filing of corporate except foreign corporations not
income tax return engaged in trade or business in
the Philippines, shall render in
duplicate, a true and accurate
✓ Quarterly income tax return;
AND
✓ Final or adjustment return
TRAIN Briefing – Income Tax
VER 1.0 – January 2018
TRAIN
Additional provision:
The ITR shall consist a maximum of
four (4) pages in paper OR electronic
form.
It shall also only contain the
information as required in ITRs of
individual taxpayers.
These requirements shall not affect
the implementation of TIMTA.