In Come Tax Tables Annex B
In Come Tax Tables Annex B
In Come Tax Tables Annex B
GENERAL CATEGORIES
PERIOD OF STAY
SOURCES OF INCOME
NATURE OF INCOME
Compensation,
Business,
Trade,
Profession (including casual gains,
profits, income, and capital gains, prizes
of P10,000 or less). Not included are
items of income subject to final tax and
or special tax treatment
Interest from any currency bank deposit
and yield or any other monetary benefit
from deposit substitute and from trust
funds and similar arrangements,
royalties, prizes (except amounting to
P10,000 or less) and other winnings
except PCSO and lotto winnings)
Royalties on books, as well as either
literary works and musical composition
Page B-1
CITIZENS
RESIDENTS
NON-RESIDENTS
PERMANENTLY STAYED STAYED OUTSIDE THE
IN THE PHIL OR MAY PHIL. 183 DAYS
OR
HAVE STAYED OUTSIDE MORE
THE PHIL. LESS THAN 183
DAYS
RESIDENTS
STAYED WITHIN THE
PHIL. FOR MORE THAN
12 MONTHS FROM
DATE OF ARRIVAL
ALL SOURCES
ALIENS
NRAEBT
STAYED
WITHIN
THE
PHIL. MORE THAN 180
DAYS
NRANEBT
STAYED IN THE PHIL. 180
DAYS OR LESS
GENERAL CATEGORIES
Interest income from depository bank
under the expanded foreign currency
deposit system (FCDS)
Page B-2
CITIZENS
RESIDENTS
NON-RESIDENTS
Any
income
from
transaction with depositary
banks under the expanded
FCDS
or
OBU
-Exempt
[Sec27(D)(3)]
[Sec.28(A)(4)]
Gross income(within)
7.5% FWT
ALIENS
NRAEBT
RESIDENTS
Exempt
5%
12%
20%
NRANEBT
Year
1998
1999
2000
Gross Income (within) 20%
FWT
GENERAL CATEGORIES
CITIZENS
ALIENS
RESIDENTS
NON-RESIDENTS
RESIDENTS
NRAEBT
NRANEBT
b. The commissioner is notified within 30 days from the date of disposition of the taxpayers intention to avail of the tax exemption.
c. Tax exemption can only be availed of once every 10 years.
d. Unutilized portions of the proceeds is subject to capital gains tax to be computed proportionately. The tax on the unutilized portion shall be
paid within 30 days after the expiration of the 18-month period.
educational
institution/
Page B-3
Tax Rate
Grossed Up Divisor
34% FWT
33% FWT
32% FWT
66%
67%
68%
Year
1998
1999
2000
N.A.
In the case of aliens, the tax rates to be applied on fringe benefit shall be as follows:
1. NRANEBT 25%
2. Aliens employed by regional HO 15 %
3. Aliens employed by OBU 15%
4. Aliens employed by Petroleum Service
5. Contractors and Subcontractors
Gross up divisor is the difference between 100% and the applicable rates.
GENERAL CATEGORIES
CITIZENS
RESIDENTS
NON-RESIDENTS
dependents; and
10. Life or health insurance and other non-lire insurance
premiums or similar amounts on excess of what the
law allows.
C. The following fringe benefits are not taxable under Sec.
33 Fringe Benefit Tax:
1. Fringe Benefits which are authorized and exempted
under special laws. The 13th month Pay and Other
Benefits with the ceiling of P30,000 may be increased
through rules and regulations issued by the Secretary
of Finance considering the effect on the same of the
inflation rate at the end of the taxable year;
2. Contributions of the lawyer for the benefit of the
employee to retirement, insurance and hospitalization
benefit plans;
3. Benefits given to the Rank and File Employees,
whether granted under a collective bargaining
agreement or not; and
4. The De minimis benefits benefits which are relatively
small in value offered by the employer as a means of
promoting goodwill, contentment, efficiency of
Employees
D. The term Rank and File Employees shall mean all
employees who are holding neither managerial nor
supervisory position as defined in the Labor Code
E.
Page B-4
RESIDENTS
ALIENS
NRAEBT
NRANEBT
TABLE 2
GENERAL
CATEGORIES
SOURCE OF INCOME
A.
15%
Final
Withholding Income
Tax (FWIT)
CITIZENS
RESIDENTS
ALL SOURCES
NON-RESIDENTS
WITHIN THE PHIL.
RESIDENTS
WITHIN THE PHIL.
ALIENS
NRAEBT
WITHIN THE PHIL.
A1. A tax rate is imposed on gross income (salaries, wages, annuition, compensation ,remuneration,
other emoluments such as honoraria and allowances)
a. Regional or area Headquarters
b. Regional Operating Headquarters
c. Offshore Banking Units (OBUs) established in the Phil.
d. Foreign petroleum service contractor or subcontractor engaged in Petroleum Operations in the Phil.
C. Foreign
Source
Compensation.
Income
is
not
subject to income
tax
Page B-5
NRANEBT
WITHIN THE PHIL.
NOT TAXABLE
TABLE 3
GENERAL CATEGOTIES
SOURCES OF INCOME
NATURE OF INCOME
In General
Page B-6
DOMESTIC CORPORATIONS
IN GENERAL, INCLUDING GOCCs, AGENCIES OR
INSTRUMENTALITIES (EXCEPT GSIS, SSS, PHIC, PCSO AND
PAGCOR) ENGAGED IN A SIMILAR BUSINESS INDUSTRY OR
ACTIVITIES
ALL SOURCES
FOREIGN CORPORATIONS
RESIDENT
FOREIGN
CORPORATIONS NON-RESIDENT CORPORATIONS (NOT
(EXISTING UNDER THE LAWS OF FOREIGN ENGAGED IN TRADE OR BUSINESS IN THE
COUNTRY, ENGAGED IN TRADE OR PHIL.)
BUSINESS WITHIN THE PHIL.)
WITHIN THE PHIL.
WITHIN THE PHIL.
TAXABLE BASE/RATE
TAX INCOME
35%(Normal Domestic Rate)
34% - 1998
33% - 1999
32% - 2000
A. Transition Period
1. For Corp. Adopting fiscal year accounting period, income and
expenses shall be deemed to have been earned and spent
equally for each month of the period.
2. Taxable Income x No. of Mos. Covered x Tax Rate
12 Mos.
by the tax rate
B. Optional Corporate Tax Rate of 15% of Gross Income
1. The President upon recommendation of the Secretary of
Finance, may, effective January 1, 2000 allow corporations
the option to be taxed at 15% of the gross income subject to
certain conditions.
C. Government or its Political Subdivision.
1. Income derived from any public utility or from the exercise of
any essential government function accruing to the
Government of the Phil. Or to any political subdivision thereof
is excluded from gross income[Sec. 32(B)(7)(b)]
TAXABLE INCOME
Same as Normal Domestic Rate and with the
same option of 15% tax on gross income
effective Jan. 1,2000.
GROSS INCOME
Same as Normal Domestic Rate but without
option to pay the 15% tax on gross income.
GENERAL CATEGOTIES
DOMESTIC CORPORATIONS
FOREIGN CORPORATIONS
IN GENERAL, INCLUDING GOCCs, AGENCIES OR
RESIDENT
FOREIGN
CORPORATIONS NON-RESIDENT CORPORATIONS (NOT
INSTRUMENTALITIES (EXCEPT GSIS, SSS, PHIC, PCSO AND (EXISTING UNDER THE LAWS OF FOREIGN ENGAGED IN TRADE OR BUSINESS IN THE
PAGCOR) ENGAGED IN A SIMILAR BUSINESS INDUSTRY OR COUNTRY, ENGAGED IN TRADE OR PHIL.)
ACTIVITIES
BUSINESS WITHIN THE PHIL.)
1. Gross interest income derived by a domestic corporation and a resident foreign corporation from a depositary
1. Any income from transaction with
bank 7.5% FWT.
depository banks under FCDS shall be exempt
2. Income derived by a depository bank from foreign currency transactions with local commercial banks including
from income tax
branches of foreign banks, other depositary banks, and residents 10% Final Tax.
Dividends received by a domestic corporation from another
Dividends received from a domestic corporation Dividend received from a domestic corp.
domestic corporation shall not be subject to tax.
not subject to tax.
15% FWT, Provided foreign law allows
taxpayer clause, otherwise it will be subject to
the normal domestic rate
Net Capital Gain
Not over P100,000 5%
Excess of P100,000 10%
Gross Selling Price or FMV whatever is higher 6% Final Tax
1. Gross Income
2% MCIT beginning on the fourth taxable year immediately following the year in which such corporation
commenced its business operation.
2. Carry Forward of Excess MCIT- to be carried forward and provided against the normal income tax [as computed
under Sec. 27(A) for the (three(3) succeeding taxable years
3. The Secretary of Finance is authorized to suspend MCIT on a corporation which suffers losses on account ofA. Prolonged dispute; or
B. Force majeure
C. Legitimate business reverses; or
4. A Gross Income = Gross Sales Sales Returns, Discounts, and allowances Cost of Goods
(Trading or Manufacturing Concern)
- Cost of Goods and shall include all business expenses directly incurred to produce the merchandise to bring
them to their present location and use.
- For trading or merchandising , cost of goods sold shall include
a. Invoice cost
b. Import duties
c. Freight
d. Assurance while goods are in transit
Page B-7
N.A.
GENERAL CATEGOTIES
DOMESTIC CORPORATIONS
FOREIGN CORPORATIONS
IN GENERAL, INCLUDING GOCCs, AGENCIES OR
RESIDENT
FOREIGN
CORPORATIONS NON-RESIDENT CORPORATIONS (NOT
INSTRUMENTALITIES (EXCEPT GSIS, SSS, PHIC, PCSO AND (EXISTING UNDER THE LAWS OF FOREIGN ENGAGED IN TRADE OR BUSINESS IN THE
PAGCOR) ENGAGED IN A SIMILAR BUSINESS INDUSTRY OR COUNTRY, ENGAGED IN TRADE OR PHIL.)
ACTIVITIES
BUSINESS WITHIN THE PHIL.)
For manufacturing: cost of goods manufactured and sold shall include all cost of production of farmer goods
such as
a. Raw materials used
b. Direct labor
c. Manufacturing overhead
d. Freight cost
e. Insurance premium
f. other cost to bring the raw materials to the factory or warehouse
B. Gross Income = Gross Receipt Sales Return; allowances, discount cost of Service(Service)
1. Cost of service shall mean all direct cost and expenses necessarily incurred to provide the service including
a. Salaries and employee benefits of personnel, consultants and specials directly utilized in providing the
service such as depreciation or rental of equipment used and cost of supplies.
2. In the case of banks, cost of service shall include interest expense
Improperly Accumulated
Taxable Income means
taxable income adjusted
by:
1. Income exempt from
tax
2. Income excluded
from gross income
3. Income subject to
final tax
4. The amount of net
operating loss carryover deducted.
And reduced by the sum
of:
1. Dividends actually or
constructively paid;
and
2. Income tax paid for
the taxable year
Page B-8
1. Improperly Accumulated Taxable Income 10% tax in addition to other income taxes
2. The improperly accumulated earnings tax shall not apply to:
a. Publicly held corporations
b. Banks and other non-banks Financial intermediaries
c. Insurance companies
3. The fact that any corporation is a mere holding company or investment company shall be prima facie evidence
of a purpose to avoid the tax upon its shareholders or members
4. The fact that the earnings or profits of a corporation are permitted to accumulate beyond the reasonable needs
of the business shall be determinative of the purpose to avoid the tax upon its shareholders or members unless
the corporation, by the clear preponderance of evidence, shall prove the contrary.
5. For corporations using the calendar basis the accumulated earnings tax shall not apply on improperly
accumulated income as of Dec. 31,1997. For fiscal year basis, the tax shall not apply to the 12 month period of
fiscal year 1997-1998. Improperly accumulated earnings as of the end of a calendar or fiscal year period on or
after Dec. 31, 1998 shall be subject to the 10% tax on such improperly accumulated earnings.
N.A.
Cafeteria/canteen
Dormitories
Bookstores
School Bus
Hospitals
Pharmacies or Drugstores and from banks deposits subject to
certain condition.
3.
4.
Page B-9
FOREIGN CORPORATIONS
RESIDENT FOREIGN CORPORATION
NON-RESIDENT FOREIGN CORP.
International Carrier (within) Gross Phil. Billings
N.A.
N.A.