ANNEX A INDIVIDUALS

CITIZENS ALIENS
Non-resident
Non-resident not
Non-resident incldg engaged in trade
Resident Resident engaged in trade or
OFWs or business
business (NRANETB)
(NRERB)
Self-Employed /
INCOME Compensation Professionals
<P3M

§24(A)(1)(b), §24(A)(1)(c) §25(A)(1) §25(B)

Within & Without the
Source §23(C)
PH§24(A)(1)(a)
Within Within Within Within

§24(A)(1)(a)
§24(A)(1)(b) §24(A)(1)(b) §25(B)
§24(A)(1)(c) §25(A)(1)
Tax Base Taxable
Income B/P < P3M Taxable Gross Income
Taxable Income Taxable Income
Gross Income Income “Entire Income”

§24(A)(2)
§24(A)(1)(b)&(c) §24(A)(2) §24(A)(2) §25(A)(1)
§25(B)
Rate
0-35%
B/P <P3M 0-35% 0-35% 0-35%
25%
8%
PASSIVE INCOME
Interest from
Peso Bank
§24(B)(1) §24(B)(1) §24(B)(1) §25(A)(2) §25(B)
deposits
20% 20% 20% 20% 25%

Page | 1
 ANNEX A INDIVIDUALS
CITIZENS ALIENS
Non-resident
Non-resident not
Non-resident incldg engaged in trade
Resident Resident engaged in trade or
OFWs or business
business (NRANETB)
(NRERB)
Interest from

§24(B)(1) §24(B)(1) §24(B)(1)

§24(B)(1) §24(B)(1)
§27(D)(3) §27(D)(3) §27(D)(3)
FCDU/OBU §28(A)(7)(b) §28(A)(7)(b) §28(A)(7)(b)
1st (7.5%) 15%
EXEMPT EXEMPT EXEMPT

§25(B)
Long-Term §24(B)(1) §24(B)(1) §24(B)(1) §25(A)(2)
Deposit §22 (FF)
25%
EXEMPT EXEMPT EXEMPT EXEMPT

§24(B)(1) §24(B)(1) §24(B)(1) §25(A)(2) §25(B)

Royalties
10-20% 10-20% 10-20% 10-20% 25%

§24(B)(1)
§24(B)(1) §24(B)(1) §24(B)(1) §25(B)
Prizes & Winnings
20%
20% 20% 20% 25%
PCSO <PHP10K - EXEMPT

Cash/Property §24(B)(2) §24(B)(2) §24(B)(2) §25(A)(2) §25(B)

Dividends
10% 10% 10% 20% 25%

TAXATION I
COURSE OUTLINE SY 2018-2019
ATTY. KATHYRN A. ZARATE
Page 2
 ANNEX A INDIVIDUALS
CITIZENS ALIENS
Non-resident
Non-resident not
Non-resident incldg engaged in trade
Resident Resident engaged in trade or
OFWs or business
business (NRANETB)
(NRERB)

CAPITAL GAINS TAX

§24(D)(1) & (2)

Real Property §24(D)(1) §24(D)(1) §24(D)(1) §25(B)
in relation to
Classified as Capital §24(D)(2) §24(D)(2) §24(D)(2)
§25(A)(1)
Asset
6% 6% 6% 6%
6%

§24(C) in
§25(B)
Shares of Stock not §24(C) §24(C) §24(C) relation to
listed/traded in PSE §25(A)(2)
15% 15% 15%
15%
15%
SPECIAL ALIENS
Aliens employed by:
Regional or area See §25(F) in
headquarters relation to
Offshore banking See §25(F) in relation to §25(C) §25(C) and
units and VETO; VETO;
Petroleum service §4 RR 8-2018 §4 RR 8-2018
contractors

TAXATION I
COURSE OUTLINE SY 2018-2019
ATTY. KATHYRN A. ZARATE
Page 3
 CORPORATION
FOREIGN CORPORATIONS
Domestic Resident Non-resident
TAXABLE INCOME

Source §27(A) §28(A)(1) §28(B)

Within and Without Within Within

§27(A) §28(A)(1)
Tax Base §27(E)(1) §28(A)(2) §28(B)
Taxable Income Taxable Income Gross Income
MCIT – 2% of Gross Income Gross Income

§27(A) §28(A)(1)
§28(B)
Rate §27(E)(1) §28(A)(2)
30% 30%
30%
MCIT – 2% of Gross Income MCIT – 2% of Gross Income
PASSIVE INCOME
Interest from

§27(D)(1) §28(A)(7)(a) §28(B)

Bank deposits (Peso)
20% 20% 30%

§27(D)(3)
§27(D)(1) §28(A)(7)(a)
FCDU/OBU §28(A)(7)(b)
15% 7½%
EXEMPT

TAXATION I
COURSE OUTLINE SY 2018-2019
ATTY. KATHYRN A. ZARATE
Page 4
 CORPORATION
FOREIGN CORPORATIONS
Domestic Resident Non-resident

§27(D)(1) §28(A)(7)(a) §28(B)

Long-Term Deposit §22 (FF)
20% 20% 30%

§28(B)(5)(a) (subject to
Foreign Loans NA NA preferential tax treaty rates)

20%

§28(B) (subject to preferential tax

§27(D)(1) §28(A)(1)
Royalties treaty rates)
20% 20%
30%

§28(B) (subject to preferential tax

§27(A) §28(A)(1)
Prizes & Winnings treaty rates)
30% 30%
30%

§28(B)
§28(B)(5)(b)
§27(A) §28(A)(7)(d)
Cash/Property Dividends (subject to preferential tax treaty
rates)
EXEMPT EXEMPT
30%

TAXATION I
COURSE OUTLINE SY 2018-2019
ATTY. KATHYRN A. ZARATE
Page 5
 CORPORATION
FOREIGN CORPORATIONS
Domestic Resident Non-resident
CAPITAL GAINS TAX

Real Property Classified as §27(D)(5) §28(A)(1) §28(B)

Capital Asset
6% 30% 30%

Shares of Stock not §27(D)(2) §28(A)(7)(c) §28(B)(5)(c)

listed/traded in PSE
15% 5-10% 5-10-%

BRANCH PROFIT §28(A)(5)

NA NA
REMITTANCE TAX (BPRT)
15%
IMPROPERLY
§29(A)
ACCUMULATED EARNINGS NA NA
TAX (IAET)
10%

SPECIAL CORPORATIONS

International Carriers (Air or §28(A)(3)

Sea) 2 ½% ON ITS GROSS PHIL.
BILLINGS

TAXATION I
COURSE OUTLINE SY 2018-2019
ATTY. KATHYRN A. ZARATE
Page 6
 CORPORATION
FOREIGN CORPORATIONS
Domestic Resident Non-resident

§28(A)(4)
Offshore Banking Units
EXEMPT

Regional or Area §28(A)(6)(a)

Headquarters §22(DD)
EXEMPT

Regional Operating §28(A)(6)(b)

Headquarters §22(EE)
10%
Non-resident
§28(B)(2)
cinematographic film owner,
lessor or distributor
25%

Non-resident owner or lessor §28(B)(3)

of vessels
4 ½%
Non-resident owner or lessor §28(B)(4)
of aircraft, machineries and
equipment 7 ½%
Proprietary Educational
Institutions and nonprofit §27(B)
hospitals 10%

TAXATION I
COURSE OUTLINE SY 2018-2019
ATTY. KATHYRN A. ZARATE
Page 7