Tax Rates on Income

7/31/2019 Tax Rates on Income

1/5

Tax Rate

For Individuals Earning Purely Compensation Income and Individuals Engaged in Business and Practiceof Profession

Amount of Net Taxable Income Rate

Over But Not OverP10,000 5%

P10,000 P30,000 P500 + 10% of the Excess over P10,000

P30,000 P70,000 P2,500 + 15% of the Excess over P30,000




P500,000 P125,000 + 32% of the Excess over P500,000 in 2000 and onward

Note: When the tax due exceeds P2,000.00, the taxpayer may elect to pay in two equal installments, the firstinstallment to be paid at the time the

return is filed and the second installment 15 of the same year at on or before July the Authorized Agent Bank(AAB) within the jurisdiction of theRevenue District Office (RDO) where the taxpayer is registered.

Tax Rate Taxable Base1. Domestic Corporations:

a. In General 30% (effective Jan. 1,2009) Net taxable income from all sources

b. Minimum Corporate Income Tax* 2% Gross Income

c. Improperly Accumulated Earnings 10% Improperly Accumulated Taxable Income

2. Proprietary Educational Institution 10%

Net taxable income provided that the grossincome from unrelated trade, business or

other activity does not exceed 50% of thetotal gross income

3. Non-stock, Non-profit Hospitals 10%

Net taxable income provided that the grossincome from unrelated trade, business orother activity does not exceed 50% of thetotal gross income

4. GOCC, Agencies & Instrumentalities

a. In General 30% Net taxable income from all sourcesb. Minimum Corporate Income Tax* 2% Gross Income


5. National Gov't. & LGUsa. In General 30% Net taxable income from all sourcesb. Minimum Corporate Income Tax* 2% Gross Income


6. Taxable Partnershipsa. In General 30% Net taxable income from all sourcesb. Minimum Corporate Income Tax* 2% Gross Income


7. Exempt Corporation


2/5

a. On Exempt Activities 0%b. On Taxable Activities 30% Net taxable income from all sources8. General Professional Partnerships 0%

9. Corporation covered by Special LawsRate specified underthe respective speciallaws

10. International Carriers 2.5% Gross Philippine Billings11. Regional Operating Head 10% Taxable Income

12. Offshore Banking Units (OBUs) 10% Gross Taxable Income On Foreign CurrencyTransaction

30% On Taxable Income other than ForeignCurrency Transaction

13. Foreign Currency Deposit Units(FCDU) 10%

Gross Taxable Income On Foreign CurrencyTransaction

30% On Taxable Income other than ForeignCurrency Transaction

*Beginning on the 4th year immediately following the year in which such corporation commenced its businessoperations, when the minimumcorporate income tax is greater than the tax computed using the normal income tax.

Passive Income1. Interest from currency deposits, trust funds and deposit substitutes 20%2. Royalties (on books as well as literary & musical composition) 10%

- In general 20%3. Prizes (P10,000 or less ) 5%

- In excess of P10,000 20%4. Winnings (except from PCSO and lotto) 20%5. Interest Income of Foreign Currency Deposit 7.5%

6. Cash and Property Dividends- To individuals from Domestic Corporations 10 %- To Domestic Corporations from Another Domestic Corporations 0%

7. On capital gains presumed to have been realized from sale, exchange orother disposition of real property (capital asset) 6%

8. On capital gains for shares of stock not traded in the stock exchange- Not over P100,000 5%- Any amount in excess of P100,000 10%9. Interest Income from long-term deposit or investment in the form of savings,common or individual trust funds, deposit substitutes, investment managementaccounts and other investments evidenced by certificates

Exempt

Upon pretermination before the fifth year , there should be imposed on theentire income from the proceeds of the long-term deposit based on theremaining maturity thereof:

Holding Period- Four (4) years to less than five (5) years 5%- Three (3) years to less than four (4) years 12%- Less than three (3) years 20%


3/5

B. For Non-Resident Aliens Engaged in Trade or Business

1. Interest from currency deposits, trust funds and deposit substitutes 20%2. Interest Income from long-term deposit or investment in the form of savings,common or individual trust funds, deposit substitutes, investment managementaccounts and other investments evidenced by certificates

Exempt

Upon pretermination before the fifth year, there should be imposed on theentire income from the proceeds of the long-term deposit based on theremaining maturity thereof:

Holding Period:

-Four (4) years to less than five (5) years 5%-Three (3) years to less than four (4) years 12%-Less than three (3) years 20%3. On capital gains presumed to have been realized from the sale, exchange orother disposition of real property 6%

4. On capital gains for shares of stock not traded in the Stock Exchange- Not over P100,000 5%- Any amount in excess of P100,000 10%

C) For Non-Resident Aliens Not Engaged in Trade or Business1. On the gross amount of income derived from all sources within the Philippines25%2. On capital gains presumed to have been realized from the exchange or otherdisposition of real property located in the Phils. 6%

3. On capital gains for shares of stock not traded in the Stock Exchange- Not Over P100,000 5%- Any amount in excess of P100,000 10%

D) On the gross income in the Philippines of Aliens Employed byRegional Headquarters (RHQ) or Area Headquarters and RegionalOperating Headquarters (ROH), Offshore Banking Units (OBUs),Petroleum Service Contractor and Subcontractor

15%

E) General Professional Partnerships 0%F) Domestic Corporations1) a. In General on net taxable income 30%

b. Minimum Corporate Income Tax on gross income 2%c. Improperly Accumulated Earnings on improperly accumulated taxable

income 10%

2) Proprietary Educational Institution and Non-profit Hospitals 10%- In general (on net taxable income) 10%- If the gross income from unrelated trade, business or other activity exceeds

50% of the total gross income from all sources 30%

4) GOCC, Agencies & Instrumentalitiesa. In General - on net taxable income 30%b. Minimum Corporate Income Tax on gross income

2%

c. Improperly Accumulated Earnings on improperly accumulated taxableincome 10%

5) Taxable Partnershipsa. In General on net taxable income 30%b. Minimum Corporate Income Tax on gross income 2%c. Improperly Accumulated Earnings on improperly accumulated taxable

income 10%

6) Exempt Corporation


4/5

a. On Exempt Activities 0%b. On Taxable Activities 30%

8) Corporation covered by Special Laws

Rate specifiedunder therespective speciallaws

G) Resident Foreign Corporation1)a. In General on net taxable income 30%

b. Minimum Corporate Income Tax on gross income 2%c. Improperly Accumulated Earnings on improperly accumulated taxable

income 10%

2) International Carriers on gross Philippine billings 2.50%3) Regional Operating Headquarters on gross income 10%

4) Corporation Covered by Special Laws

Rate specifiedunder therespective special

laws5) Offshore Banking Units (OBUs) on gross income 10%6) Foreign Currency Deposit Units (FCDU) on gross income 10%

Final Capital Gains Tax for Onerous Transfer of Real Property Classified as Capital Assets

(Taxable and Exempt)

Tax RatesFor real property - 6%.

Capital Gains Tax for Onerous Transfer of Shares of Stocks Not Traded Through the

Local Stock Exchange

Tax RatesFor Shares of Stocks Not Traded in the Stock Exchange

- Not over P100,000 - 5%

- Any amount in excess of P100,000 - 10%

Annual Capital Gains Tax for Onerous Transfer of Shares of Stocks Not Traded Throughthe Local Stock Exchange

Tax Rates

For Shares of Stocks Not Traded in the Stock Exchange

- Not over P100,000 - 5%


5/5

- Any amount in excess of P100,000 - 10%

Documents

Tax Rates on Income