FINAL WITHHOLDING TAXES

Final withholding taxes is a kind of tax, which is prescribed on “certain income” derived from the
Philippine sources.
PASSIVE INCOME DERIVED FROM PHILIPPINE SOURCES SUBJECT TO FINAL WITHHOLDING TAXES
1.INTEREST Citizens and NRA-ETB NRA-NETB
Residents
a. Interest from any currency bank deposit 20% 20% 25%
b. Yield or any other monetary benefit from deposit 20% 20% 25%
substitutes
c. Yield or any other monetary benefit from trust 20% 20% 25%
funds and similar arrangements
d. Interest income received from a depositary bank RC: 15% Exempt Exempt
under expanded foreign currency deposit system NRC: exempt
NOTE: Only residents are subject to this type of
tax. Nonresident taxpayers are exempt from tax on
this particular income
e. Interest income from long-term deposit or Exempt Exempt 25%
investment
If pre-terminated before fifth year, a final tax
shall be imposed based on remaining maturity as
follows:
5% 5% 25%
● 4 years to less than 5 years
12% 12% 25%
● 3 years to less than 4 years 20% 20% 25%

● Less than 3 years

II. ROYALTIES
a. Royalties, in general (other than royalties 20% 20% 25%
described in letter B)
b. Royalties on books, as well as other literary 10% 10% 25%
works and musical compositions
III. PRIZES
a. Prizes (except prizes amounting to P10,000 or 20% 20% 25%
less which shall be subject to regular tax)
b. Other winnings 20% 20% 25%
c. PCSO and/or Lotto winnings in the Philippines Exempt Exempt 25%
amounting to P10,000 or less
d. PCSO and/or Lotto winnings in the Philippines 20% Exempt 25%
amounting to more than P10,000
IV. DIVIDENDS
a. Cash and/or property dividends actually or 10% 20% 25%
constructively received from:
● Domestic corporation

● Joint stock company

● Insurance or mutual fund companies

● Regional operating headquarters of

multinational companies
● On the share of an individual partner in the
distributable net income after tax of
partnership (except GPP)
● On the share of an individual in the net
income after tax of an association, a joint
account, or a joint venture or consortium of
which he is a member or co-venturer

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