Non-Resident person not
engaged in trade or business
NRA-NETB
NRFC
Interest Income or Yield
General Final Tax
Rate
25%
30%
Recipient
Individuals
Corporations
20%
20%
Source of Int. Income
Short term deposits
(less than 5 years)
Long Term deposits/
Exempt*
20%
investment certificates
(not less than 5 years)
Note: * exemption does not include NRA-NATB
Tax on pre-termination of long-term deposits of
individuals
Holding Period
Final Tax
Less than 3 years
20%
3 yrs less than 4 yrs
12%
4 yrs less than 5 yrs
5%
5 years or more
0%
Note: Savings or TDs in cooperatives are not subject to
final tax
Other applications of the final tax on interest
1. Deposit substitute
2. Government Securities
3. Money market placements
4. Trust funds
5.other invstmnts evidenced by cert. Prescribed by BSP
Foreign currency deposit with foreign currency deposit
banks
Taxpayer
Residents
Individuals
15%
Non-residents
Exempt
Corporations
15%
Exempt
Joint account on forex deposits
A. 15% final tax. B. 50% x 15% final tax C. Exempt (own)
Dividend Tax Rules
Source of dividends
Domestic Corp
Recipient
Individuals
Corpo
10% final tax*
Exempt**
Foreign Corp
Regular
Regular
Note:
1. * A NRA_ETB is subject to 20% final tax on dividend,
but NRA-NETB is subject to 25% final tax
2. ** A NRFC, is not subject to the 30% gftr. 15%
dividends tax when tax sparing apply.
Exempt Dividends
1. Inter-corporate dividends
2. Dividends from cooperatives


Entities considered corporations under the
NIRC and special laws are subject to 10% Final
Tax
Improperly Accumulated Earnings Tax 10%
Royalties
Recipient
Individuals
Corporations
Source of passive
royalties
Books, literary works
10%
20%
and musical
compositions
Other sources
20%*
20%*
Note:
1. Under the regulations, 10% preferential royalty final
tax on books and literary works pertain to printed
literatures. Royalties on books sold on e-copies or CDs
such as e-books are subject to 20% final tax
2. Royalties on cinematographic films, similar works
paid to NRA-ETBs, NRA-NETBs or NRFCs is subject to
25% final tax.
3. Royalties, active or passive, earned from sources
abroad are subject to regular income tax.