TAXATION OF INDIVIDUALS
A. INDIVIDUAL
GEOGRAPHICAL SOURCES
Within the Philippines
Without the Philippines
1. Resident Citizen


2. Nonresident Citizen (Sec. 22 E)


3. Resident Alien


4. Overseas Contract Worker/ International Seaman


5. Minimum Wage Earner


6. Nonresident Alien
 Engaged in the trade or business (Sec. 25 A)














8. General Professional Partnership (Foreign)


9. Estate and Trust (Philippines) (Sec. 60)


10.


 Not engaged in the trade or business (Sec. 25 B)
 Special alien individuals working
 Multinational Companies (Sec. 25 C)
 Offshore Banking (Sec. 25 D)
 Petroleum Service (Sec. 25 E)
7. General Professional Partnership (Philippines)
Estate and Trust (Foreign) (Sec. 60)
B. SECTION 24: TAX RATES OF RC, NRC, RA, OCW, IS, MWE
SOURCE
TAX RATE
TAX BASE
SEC. 24 A
SEC. 24 B
SEC. 24 C
SEC. 24 D
Within and Without of the
Philippines
GRADUATED RATES 5% 32%
INCOME (not covered by Sec.
24 B, C, and D): MWE on
compensation income, ay pay,
overtime pay, night shift
deferential pay, and hazard
pay.
Within the Philippines
Within the Philippines
Within the Philippines
Tax Base:
Taxable Income
Legend:
RC – Resident Citizen
NRC – Nonresident Citizen
RA – Resident Alien
1. PASSIVE INCOME 20%
 Interest – bank deposits
 Royalties
Except: books, literary
works
&
musical
compositions (10%)
 Prizes
Except: P10,000 or less
(Sec 24 A)
 Winnings
2. FOREIGN
CURRENCY
DEPOSIT
3. LONG – TERM DEPOSIT
 4 yrs – less 5 yrs = 5%
 3 yrs – less 4 yrs = 12%
 Less than 3 yrs = 20%
4. DIVIDENDS 10% (Cash or
Property)
Tax Base:
Gross Income
CAPITAL GAINS FROM SALE CAPITAL GAINS FROM SALE
OF SHARE OF STOCK:
OF REAL PROPERTY 6%
1. IF NOT TRADED IN THE TAX AVOIDANCE 6% OR
STOCK EXCHANGE
SEC.24 A IF SOLD TO
GOVERNMENT.
 Not over 100k = 5%
 On any amount in
 SALE OF PRINCIPLE
excess of 100k = 10%
RESIDENCE RULE
 CLASSIFY THE REAL
2. IF TRADED = Sec. 127
PROPERTY WHETHER
CAPITAL ASSET OR
ORDINARY
ASSET
(Sec.39)
 ARTICLE
415
C.C.
Enumerates the real
properties
Tax Base:
Gross Income
Tax Base:
Gross Selling Price or Fair
Market Value or the Zonal
Value (whichever is higher)
Taxable Income – means Gross Income less Allowable Deductions
OCW – Overseas Contract Workers
IS – International Seaman
MWE - Minimum Wage Earner
C. SECTION 25: NONRESIDENT ALIENS
PASSIVE INCOME
NRA – EB (180 SEC. 25 A(1)
SEC. 25 A(2)
days rule)
TAXABLE INCOME apply SEC. 20% or 10% GROSS INCOME
24 A
NRA – NEB
SEC. 25 B

25% GROSS INCOME
SPECIAL ALIEN 15% GROSS COMPENSATION

INDIVIDUALS
INCOME
 OTHER
NONEMPLOYMENT INCOME
*observe the Same Position Tax
Treatment Rule
CAPITAL GAINS SHARES OF
STOCK
SEC 24(C) GROSS INCOME
CAPITAL GAINS OF REAL
PROPERTY 6%
SEC
24(D)
GSP/FMV/ZV
whichever is higher
SEC 24(C) GROSS INCOME
SEC
24(D)
GSP/FMV/ZV
whichever is higher
SEC
24(D)
GSP/FMV/ZV
whichever is higher
SEC 24(C) GROSS INCOME
D. SECTION 26: GENERAL PROFESSIONAL PARTNERSHIP
- JURIDICAL ENTITY IS EXEMPT
- INDIVIDUAL PARTNERS TAXABLE THE SAME WITH THE INDIVIDUALS
Legend:
NRA – EB
NRA – NEB
GSP
FMV
ZV
=
=
=
=
=
NON RESIDENT ALIEN ENGAGED IN BUSINESS
NONRESIDENT ALIEN NOT ENGAGED IN BUSINESS
Gross Selling Price
Fair Market Value
Zonal Value
 Depends whether the Special Alien individuals is NRA – EB or NRA - NEB