Notes: ORGANIZATION AND FUNCTINS OF BIR

1. Commissioner-chief of BIR
2. The Commissioner has 4 Deputy Commissioners-assistant chief

Notes: NIRC CODE OF THE PHILIPPINES

CHAPTER I

DEFINITIONS

1. PERSONS- may be individual, trust, estate or a corporation

2. CORPORATION
a. PARTNERSHIP (excludes general professional partnership)
b. JOINT STOCK COMPANIES
c. JOINT ACCOUNTS
d. INSURANCE COMPANIES

Note: General professional partnership- is not considered as corporation

Joint venture or consortium instituted for purposes of construction projects or engaging in

petroleum, coal, geothermal and other energy operations pursuant to an operating consortium
agreement under service contract with the GOVERNMENT.

3. FIDUCIARY- guardian, trustee, guarantor, executor, administrator, conservator etc.

TAX ON INDIVIDUALS

20% Final tax rate to INTEREST FROM ANY CURRENCY DEPOSIT AND YIELD OR ANY
MONETARY BENEFIT FROM DEPOSIT.

7 ½ Final tax rate to INTEREST INCOME RECEIVED FROM DEPOSITARY BANK UNDER
EXPANDED FOREIGN CURRENCY DEPOSIT SYSTEM.

IN GENERAL INTEREST INCOME FROM LONG TERM DEPOSIT OR INVESTMENT

EVIDENCED BY CERTIFICATES IN SUCH FORM PRESCRIBED BY BSP SHALL BE EXEMPT
FROM INCOME TAX; PROVIDED THAT IT IS NOT TERMINATED BEFORE 5 YEARS OF TERM

5% ON INTEREST INCOME DERIVED FROM LONG TERM DEPOSIT OR INVESTMENT

WHICH WAS TERMINATED LESS THAN 5 YEARS BUT NOT LESS THAN FOUR YEARS FROM
THE DATE OF ACQUISITION

12% ON INTEREST INCOME DERIVED FROM LONG TERM DEPOSIT OR INVESTMENT

WHICH WAS TERMINATED LESS THAN 4 YEARS BUT NOT LESS THAN 3 YEARS FROM
THE DATE OF ACQUISITION

20% ON INTEREST INCOME DERIVED FROM LONG TERM DEPOSIT OR INVESTMENT

WHICH WAS TERMINATED LESS THAN 3 YEARS FROM THE DATE OF ACQUISITION

20% Final tax rate to ROYALTIES (except on books, literary works and musical
composition of which 10% is applied)

20% Final tax rate to WINNINGS/PRIZES (except prize of 10k or less, to be subjected to
taxable other income and PCSO winnings are exempted

10% Final tax rate to CASH OR PROPERTY DIVIDENDS.

10% Final tax rate to CAPITAL GAINS FROM SALE OF SHARES OF STOCK NOT TRADED IN
THE STOCK EXCHANGE IN EXCESS OF 100,000

5% Final tax rate to CAPITAL GAINS FROM SALE OF SHARES OF STOCK NOT TRADED IN
THE STOCK EXCHANGE NOT OVER OF 100,000

6% Final tax rate on GROSS SELLING PRICE OR CURRENT FAIR MARKET VALUE
WHICHEVER IS HIGHER IN SALE OF REAL PROPERTY CLASSIFIED AS CAPITAL ASSET
INCLUDING PACTO DE RECTO SALES / CONDITIONAL SALE.

Provided that, the sale or disposition of their principal residence and the proceeds of
which is fully utilized in acquiring or construction a new principal residence within 18 months
after the date of sale. The Comissioner shall have been duly notified within 30 days from the
date of sale.

Provided that the historical cost or adjusted basis of the real property sold shall b carried
over to the new principal.

Therefore, in all compliance of the above italics text, sale of real property / residence is
exempt from final tax of 6%.

The said tax exemption can only be availed once every 10 years.

In any case, if the proceeds from sale of residence property was not fully utilized, the
unutilized proceeds shall be treated in the following manner,

[UNUTILIZED PORTION/GROSS SELLING PRIZE)*FV OF PROPERTY OR GP WHICEVER IS

HIGHER]*6%

Bestida 2 atbp.
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