FINAL INCOME TAXATION
PASSIVE INCOME
INDIVIDUALS
CITIZEN
RESIDENT
INTEREST:
Interest or yield on local currency
deposit
1. Bank deposit (saving, time)
2. Deposit substitute
3. Money market placements
4. Trust funds (CTF, UITF, IMA)
Interest income from long-term:
1. Deposit
2. Investments in the form of
saving
3. Common or Individual Trust
Funds
4. Investment Management
Accounts
5. Deposit Substitute
6. Other investments evidenced by
certificates prescribed by the BSP
Pre-termination of long-term deposit or
investment:
1. Less than 3 years held
2. 3 years to less than 4 years held
3. 4 years to less than 5 years held
Interest income on FCDU Deposit from
a depositary banks
Interest income by FCDU Depositary
banks
DIVIDENDS (Cash or Property):
1. From a Domestic Corporation
CORPORATIONS
ALIEN
NON-RESIDENT
ENGAGED
NOT
ENGAGED
DOMESTIC
RESIDENT
NONRESIDENT
RESIDENT
NONRESIDENT
20%
20%
20%
20%
25%
20%
20%
30%
EXEMPT
EXEMPT
EXEMPT
EXEMPT
25%
20%
20%
30%
20%
12%
5%
15%
20%
12%
5%
EXEMPT
20%
12%
5%
15%
20%
12%
5%
EXEMPT
25%
20%
20%
30%
EXEMPT
7.5%
7.5%
EXEMPT
10%
10%
N/A
EXEMPT
EXEMPT
30% - w/o
tax sparing
rule
N/A
10%
10%
10%
20%
25%
15% - w/
FINAL INCOME TAXATION
tax sparing
rule
2. From a Foreign Corporation (RFC
REGULAR INCOME TAX RULES APPLY
and NRFC)
NOTE: Business Partnerships are taxable similar to corporations. Partners share in the net income of business partnership is SUBJECT TO 10%
FINAL WITHHOLDING TAX.
PASSIVE INCOME
INDIVIDUALS
CITIZEN
RESIDENT
ROYALTIES:
1. In general
2. From books, literary works and
musical compositions
RESIDENT
NONRESIDENT
20%
10%
20%
10%
20%
10%
CORPORATIONS
ALIEN
NON-RESIDENT
ENGAGED
NOT
ENGAGED
20%
10%
25%
25%
PRIZES (Taxable):
1. P 10,000 and below
2. Above P 10,000
Regular (Progressive) Income Tax rules apply.
20%
20%
20%
20%
25%
WINNINGS
1. In general
20%
2. PCSO and lotto winnings
INFORMER’S TAX REWARD
20%
20%
20%
25%
DOMESTIC
RESIDENT
NONRESIDENT
20%
20%
30%
REGULAR INCOME TAXATION (the
general rule) would apply since there
is no similar provision imposing final
tax.
REGULAR INCOME TAXATION (the
general rule) would apply since there
is no similar provision imposing final
tax.
Up to P 10,000 – EXEMPT; Above P 10,000 – 20%, except NRA-NETB (25%) and NRFC (30%).
Note that NRA-ETB is EXEMPT.
10%