Tax Rate For Individuals Earning Purely Compensation Income and Individuals Engaged in Business and Practice of Profession

Amount of Net Taxable Income Over P10,000 P30,000 P70,000 P140,000 P250,000 P500,000 But Not Over P10,000 P30,000 P70,000 P140,000 P250,000 P500,000 5% P500 + 10% of the Excess over P10,000 P2,500 + 15% of the Excess over P30,000 P8,500 + 20% of the Excess over P70,000 P22,500 + 25% of the Excess over P140,000 P50,000 + 30% of the Excess over P250,000 P125,000 + 32% of the Excess over P500,000 in 2000 and onward Rate

Note: When the tax due exceeds P2,000.00, the taxpayer may elect to pay in two equal installments, the first installment to be paid at the time the return is filed and the second installment 15 of the same year at on or before July the Authorized Agent Bank (AAB) within the jurisdiction of the Revenue District Office (RDO) where the taxpayer is registered.

Tax Rate 1. Domestic Corporations: a. In General b. Minimum Corporate Income Tax* c. Improperly Accumulated Earnings 2. Proprietary Educational Institution 30% (effective Jan. 1, 2009) 2% 10%

Taxable Base Net taxable income from all sources Gross Income Improperly Accumulated Taxable Income Net taxable income provided that the gross income from unrelated trade, business or other activity does not exceed 50% of the total gross income Net taxable income provided that the gross income from unrelated trade, business or other activity does not exceed 50% of the total gross income

10%

3. Non-stock, Non-profit Hospitals 4. GOCC, Agencies & Instrumentalities a. In General

10%

30%

Net taxable income from all sources

b. Minimum Corporate Income Tax* c. Improperly Accumulated Earnings 5. National Gov't. & LGUs a. In General b. Minimum Corporate Income Tax* c. Improperly Accumulated Earnings 6. Taxable Partnerships a. In General b. Minimum Corporate Income Tax* c. Improperly Accumulated Earnings

2% 10%

Gross Income Improperly Accumulated Taxable Income Net taxable income from all sources Gross Income Improperly Accumulated Taxable Income Net taxable income from all sources Gross Income Improperly Accumulated Taxable Income

30% 2% 10%

30% 2% 10%

7. Exempt Corporation a. On Exempt Activities b. On Taxable Activities 8. General Professional Partnerships 9. Corporation covered by Special Laws 10. International Carriers 11. Regional Operating Head 12. Offshore Banking Units (OBUs) 0% 30% 0% Rate specified under the respective special laws 2.5% 10% 10% 30% 13. Foreign Currency Deposit 10% Units (FCDU) 30% Gross Philippine Billings Taxable Income Gross Taxable Income On Foreign Currency Transaction On Taxable Income other than Foreign Currency Transaction Gross Taxable Income On Foreign Currency Transaction On Taxable Income other than Foreign Currency Transaction Net taxable income from all sources

*Beginning on the 4th year immediately following the year in which such corporation commenced its business operations, when the minimum corporate income tax is greater than the tax computed using the normal income tax.

Passive Income 1. Interest from currency deposits, trust funds and deposit substitutes - In general 3. Prizes (P10,000 or less ) - In excess of P10,000 4. Winnings (except from PCSO and lotto) 5. Interest Income of Foreign Currency Deposit 6. Cash and Property Dividends - To individuals from Domestic Corporations - To Domestic Corporations from Another Domestic Corporations 7. On capital gains presumed to have been realized from sale, exchange or other disposition of real property (capital asset) 8. On capital gains for shares of stock not traded in the stock exchange - Not over P100,000 - Any amount in excess of P100,000 5% 10% 10 % 0% 6% 20%

2. Royalties (on books as well as literary & musical composition) 10% 20% 5% 20% 20% 7.5%

9. Interest Income from long-term deposit or investment in the Exempt form of savings, common or individual trust funds, deposit substitutes, investment management accounts and other investments evidenced by certificates Upon pretermination before the fifth year , there should be imposed on the entire income from the proceeds of the longterm deposit based on the remaining maturity thereof: Holding Period Four (4) years to less than five (5) years Three (3) years to less than four (4) years Less than three (3) years 5% 12% 20%

B. For Non-Resident Aliens Engaged in Trade or Business 1. Interest from currency deposits, trust funds and deposit substitutes 20%

2. Interest Income from long-term deposit or investment in the form of savings, common or individual trust funds, deposit Exempt substitutes, investment management accounts and other investments evidenced by certificates Upon pretermination before the fifth year, there should be imposed on the entire income from the proceeds of the long-

term deposit based on the remaining maturity thereof: Holding Period: -Four (4) years to less than five (5) years -Three (3) years to less than four (4) years -Less than three (3) years 3. On capital gains presumed to have been realized from the sale, exchange or other disposition of real property 4. On capital gains for shares of stock not traded in the Stock Exchange - Not over P100,000 - Any amount in excess of P100,000 C) For Non-Resident Aliens Not Engaged in Trade or Business 1. On the gross amount of income derived from all sources within the Philippines 2. On capital gains presumed to have been realized from the exchange or other disposition of real property located in the Phils. 3. On capital gains for shares of stock not traded in the Stock Exchange Not Over P100,000 Any amount in excess of P100,000 5% 10% 25% 6% 5% 10% 5% 12% 20% 6%

D) On the gross income in the Philippines of Aliens Employed by Regional Headquarters (RHQ) or Area Headquarters and Regional Operating Headquarters (ROH), Offshore Banking Units (OBUs), Petroleum Service Contractor and Subcontractor E) General Professional Partnerships F) Domestic Corporations 1) a. In General on net taxable income b. Minimum Corporate Income Tax on gross income c. Improperly Accumulated Earnings on improperly accumulated taxable income 2) Proprietary Educational Institution and Non-profit Hospitals - In general (on net taxable income) - If the gross income from unrelated trade, business or other activity exceeds 50% of the total gross income from all sources 4) GOCC, Agencies & Instrumentalities a. In General - on net taxable income

15%

0% 30% 2% 10% 10% 10% 30%

30% 2% 10%

b. Minimum Corporate Income Tax on gross income c. Improperly Accumulated Earnings on improperly accumulated taxable income 5) Taxable Partnerships

a. In General on net taxable income b. Minimum Corporate Income Tax on gross income c. Improperly Accumulated Earnings on improperly accumulated taxable income 6) Exempt Corporation a. On Exempt Activities b. On Taxable Activities 8) Corporation covered by Special Laws

30% 2% 10%

0% 30% Rate specified under the respective special laws

G) Resident Foreign Corporation 1)a. In General on net taxable income b. Minimum Corporate Income Tax on gross income c. Improperly Accumulated Earnings on improperly accumulated taxable income 2) International Carriers on gross Philippine billings 3) Regional Operating Headquarters on gross income 4) Corporation Covered by Special Laws 5) Offshore Banking Units (OBUs) on gross income 6) Foreign Currency Deposit Units (FCDU) on gross income 30% 2% 10% 2.50% 10% Rate specified under the respective special laws 10% 10%