CAPITAL ITEMS WITH INFINITE VALUE INCOME SITUS RULES

1. Life TYPES OF TRANSFERS TYPES OF INCOME SITUS

2. Health Bilateral Income Tax 1. Interest Income Debtor's Residence
2. Royalties Where the intangible is employed
3. Human Reputation Unilateral Transfer Tax
3. Rent Income Location of the Property
ITEMS OF INCOME EXEMPTED BY LAW IN TAXATION 4. Service Income Place where the service is rendered.
5. Gain on Sale of Properties
1. Income of qualified employee trust fund.
1. Personal Property
2. Revenues of non-profit non-stock educational institutions.
Domestic Securities PH
3. SSS, GSIS, Pag-ibig or Philhealth Benefits Others earned in the place where the property is sold.
4. Salaries and Wages of MWE and qualified senior citizens 2. Real Property Where the Property is located.
5. BMBEs 6. Dividend Income from
6. Income of foreign government and foreign government owned and controlled corps. 1. Domestic PH
7. Income of international missions and orgs with income tax immunity. 2. Foreign Corporation
a. Resident Foreign Pre-dominance Test
GENERAL RULES IN INCOME TAXATION Deadline of ITR b. Non-resident Abroad
INDIVIDUAL TAX PAYER WITHIN WITHOUT 4th month + 15 days 7. Merchandising Income earned where the property is sold.
Resident Citizen / / 8. Manufacturing Income earned where the goods are manufactured and sold.
Non-resident Citizen PENALTIES / FOR LATE FILING OR PAYMENT OF TAX
1. Surcharge
Resident Alien /
a. 25% of the basic tax for failure to file or pay deficiency tax on time.
Non-resident Alien /
b. 50% for willful neglect to file and pay taxes.
CORPORATE TAXPAYER
2. Interest
Domestic NIRC until/ Dec.31, 2017 / 20%
TRAIN
Resident Foreign /2018 12%
Non-resident foreign /
 INDIVIDUAL TAXPAYER CORPORATION EXEMPT DIVIDENDS
1. INTER-CORPORATE DIVIDENDS
PASSIVE INCOME SUBJECT TO FINAL TAX RC NRC RA NRA-ETB NRA-NETB D RF NRF
2. DIVIDENDS FROM COOPERATIVES

AMOUNT OF CASH REWARD FOR TAX INFORMER

INTEREST INCOME OR YIELD LOWER OF
LOCAL CURRENCY DEPOSIT 1. 10% OF REVENUES, SURCHARGES OR FEES RECOVERED
from Short-term deposits 20 25 20 30 2. 1,000,000
from long-term deposits/investment certs 25 20 30
PRE-TERMINATION
less than 3 years 20 25 20 30
3 to less than 4 years 12 25 20 30
4 to less than 5 years 5 25 20 30

FOREIGN CURRENCY DEPOSIT

from FCDUs/OBU depositary banks 15 15 15 15
from EFCDU/OBU banks 10 10 10 10
on Foreign Loans NOT APPLICABLE 20%
DIVIDEND INCOME
FROM DOMESTIC CORPORATIONS, in general
Jan. 1 1998 earnings 6 20 25 15
Jan. 1 1999 earnings 8 20 25 15
Jan. 1 2000 earnings and thereafter 10 20 25 15
FROM FOREIGN CORPORATION REGULAR INCOME TAX
ROYALTIES (SOURCES WITHIN THE PH)
in general 20 25 20 30
from Books, literary works, and musical compositions 10 25 20 30
from cinematographic films and similar works 20 25 25 20
Active Royalties REGULAR INCOME TAX 25 REGULAR 30
TAXABLE PRIZES
EXCEEDING 10,000 REGULAR INCOME TAX 25 REGULAR 30
NOT EXCEEDING 10, 000 20 25 REGULAR 30
WINNINGS
In general 20 25 REGULAR 30
PCSO and LOTTO Winnings > 10, 000 20 25 20 30
PCSO and LOTTO Winnings ≤ 10, 000 25 30
INFORMER'S TAX REWARD 10 25 10 30
 FRINGE BENEFIT TAX RATES
TYPES OF GAIN TAXATION SCHEME
EMPLOYEES
Ordinary Gains Regular Income Tax Year
RESIDENTS OR CITIZENS NON-RESIDENT ALIENS
Capital Gains General Rule: Income Tax
1998 34%
Exception Rule: Capital Gains Tax
1999 33%
25%
CAPITAL GAINS subject to Capital Gains Tax (TRAIN) 2000 to 2017 32%
2018 and thereafter 35%
Gain on the sale, exchange and other
disposition of domestic stocks directly to the 15% capital gains tax GROSSED-UP MONETARY VALUE
buyer. EMPLOYEES
Year
RESIDENTS OR CITIZENS NON-RESIDENT ALIENS
Sale, exchange, and other disposition of real 1998 66%
6% capital gains tax
property in PH. 1999 67%
75%
CAPITAL GAINS TAX RATE FOR DOMESTIC STOCKS (DIRECTLY TO BUYER) 2000 to 2017 68%
NIRC TRAIN 2018 and thereafter 65%
Net gain up to 100,000 5%
15%
Excess net gain above 100, 000 10%
* 5% and 10% tax structure is still applicable for foreign corporation.

SCOPE AND APPLICABILITY OF THE 6% CAPITAL GAINS TAX

TAXPAYERS
LOCATION OF THE PROPERTY INDIVIDUALS CORPORATIONS
within the Philippines All Individuals Domestic Corporation only
Outside the Philippines Not Applicable Not applicable

COMPARISON OF THE 6% CGT AND 15%CGT

6% 15%
Tax Object Gain on Real Property Gain on the sale of stocks
Basis of Tax Presumed Gain actual gain
Nature of Tax Final Tax self-assessed tax
Frequency of Payment Per Transaction Transactional and annual tax