Republic of the Philippines Congress of the Philippines Metro Manila Fourteenth Congress First Regular Session

Begun and held in Metro Manila, on Monday, the twenty-third day of July, two thousand seven. Republic Act No. 9504 Amending RA 8424 June 1 ! "00#

AN AC$ A%&N'(N) S&C$(*N ""! "4! +4! +5! 51! AN' 9 *F R&P,-.(C AC$ N*. #4"4! AS A%&N'&' *$/&R0(S& 1N*0N AS $/& NA$(*NA. (N$&RNA. R&2&N,& *F 199 Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:: S&C$(*N 1. e!tion 22 of Re"u#li! A!t $o. 8424, as amended, otherwise %nown as the $ational &nternal Revenue 'ode of ())*, is here#y further amended #y adding the following definition after u#se!tion +,,- to read as follows: . /'. 22. Definitions. - when used in this 0itle: .+A- 1 1 1. .1 1 1 .+,,- 1 1 1. .+22- the term 3statutory minimum wage3 earner shall refer to rate fi1ed #y the Regional 0ri"artite 4age and 5rodu!tivity Board, as defined #y the Bureau of 6a#or and /m"loyment tatisti!s +B6/ - of the 7e"artment of 6a#or and /m"loyment +786/.+99- the term 3minimum wage earner3 shall refer to a wor%er in the "rivate se!tor "aid the statutory minimum wage, or to an em"loyee in the "u#li! se!tor with !om"ensation in!ome of not more than the statutory minimum wage in the non-agri!ultural se!tor where he:she is assigned.. S&C. ". e!tion 24+A- of Re"u#li! A!t $o. 8424, as amended, otherwise %nown as the $ational &nternal Revenue 'ode of ())*, is here#y further amended to read as follows: . /'. 24. Income Ta Rates. .+A- Rates of Income Ta on Individual Citi!en and Individual Resident "lien of the Philippines# .+(- 1 1 1: .1 1 1; and .+!- 8n the ta1a#le in!ome defined in e!tion <( of this !ode, other than in!ome su#=e!t to ta1 under u#se!tions +B-, +'- and +7- of this e!tion, derived for ea!h ta1a#le year from all sour!es within the 5hili""ines #y an individual alien who is a resident of the 5hili""ines.

.+2- Rates of 0a1 on 0a1a#le &n!ome of &ndividuals. - 0he ta1 shall #e !om"uted in a!!ordan!e with and at the rates esta#lished in the following s!hedule: .$ot over 5(>,>>> .8ver 5(>,>>> #ut not over 5<>,>>> .8ver 5<>,>>> #ut not over 5*>,>>> .8ver 5*>,>>> #ut not over 5(4>,>>> .8ver 5(4>,>>> #ut not over 52?>,>>> .8ver 52?>,>>> #ut not over 5?>>,>>> .8ver 5?>>>,>>> ........ ........ ........ ........ ........ ........ ........ ?@ 5?>>A(>@ of the e1!ess over 5(>,>>> 52,?>>A(?@ of the e1!ess over 5<>,>>> 58,?>>A2>@ of the e1!ess over 5*>,>>> 522,?>>A2?@ of the e1!ess over 5(4>,>>> 5?>,>>>A<>@ of the e1!ess over 52?>,>>> 5(2?,>>>A<2@ of the e1!ess over 5?>>,>>>

.,or married individuals, the hus#and and wife, su#=e!t to the "rovision of e!tion ?( +7- hereof, shall !om"ute se"arately their individual in!ome ta1 #ased on their res"e!tive total ta1a#le in!ome: Provided, that if any in!ome !annot #e definitely attri#uted to or identified as in!ome e1!lusively earned or realiBed #y either of the s"ouses, the same shall #e divided eCually #etween the s"ouses for the "ur"ose of determining their res"e!tive ta1a#le in!ome. .Provided, 0hat minimum wage earners as defined in e!tion 22 +99- of this 'ode shall #e e1em"t from the "ayment of in!ome ta1 on their ta1a#le in!ome: Provided, further, 0hat the holiday "ay, overtime "ay, night shift differential "ay and haBard "ay re!eived #y su!h minimum wage earners shall li%ewise #e e1em"t from in!ome ta1. .1 1 1.. S&C. +. e!tion <4+6- of Re"u#li! A!t $o. 8424, as amended, otherwise %nown as the $ational &nternal Revenue 'ode of ())*, is here#y amended to read as follows: . /'. <4. Deductions from $ross Income. - /1!e"t for ta1"ayers earning !om"ensation in!ome arising from "ersonal servi!es rendered under an em"loyer-em"loyee relationshi" where no dedu!tions shall #e allowed under this e!tion other than under u#se!tion +M-hereof, in !om"uting ta1a#le in!ome su#=e!t to in!ome ta1 under e!tions 24+A-; 2?+A-; 2D; 2*+A-, +B-, +'-; and 28+A-+(-, there shall #e allowed the following dedu!tions from the gross in!ome: .+A- % penses. .1 1 1. .+6- &ptional Standard Deduction. - &n lieu of the dedu!tions allowed under the "re!eding u#se!tions, an individual su#=e!t to ta1 under e!tion 24, other than a nonresident alien, may ele!t a standard dedu!tion in an amount not e1!eeding forty "er!ent +4>@- of his gross sales or gross re!ei"ts, as the !ase may #e. &n the !ase of a !or"oration su#=e!t to ta1 under se!tion 2*+A- and 28+A-+(-, it may ele!t a standard dedu!tion in an amount not e1!eeding forty "er!ent +4>@- of it gross in!ome as defined in e!tion <2 of this 'ode. Enless the ta1"ayer signifies in his return his intention to ele!t the o"tional standard dedu!tion, he shall #e !onsidered as having availed himself of the dedu!tions allowed in the "re!eding u#se!tions. u!h ele!tion when made in the return shall #e irrevo!a#le for the ta1a#le year for whi!h the return is made: Provided, 0hat an individual who is entitled to and !laimed for the o"tional standard shall not #e reCuired to su#mit with his ta1 return su!h finan!ial statements otherwise reCuired under this 'ode: Provided, further, 0hat e1!e"t when the 'ommissioner otherwise "ermits, the said individual shall %ee" su!h re!ords "ertaining to his gross sales or gross re!ei"ts, or the said !or"oration shall %ee" su!h re!ords "ertaining to his gross in!ome as defined in e!tion <2 of this 'ode during the ta1a#le year, as may #e reCuired #y the rules and regulations "romulgated #y the e!retary of ,inan!e, u"on re!ommendation of the 'ommissioner. .+M- 1 1 1.. .1 1 1..

S&C. 4. e!tion <?+A- and +B- of Re"u#li! A!t $o. 8424, as amended, otherwise %nown as the $ational &nternal Revenue 'ode of ())*, is here#y amended to read as follows: . /'. <?. "llo'ance of Personal % emption for Individual Ta payer. .+A- In $eneral. - ,or "ur"oses of determining the ta1 "rovided in e!tion 24+A- of this title, there shall #e allowed a #asi! "ersonal e1em"tion amounting to ,ifty thousand "esos +5?>,>>>- for ea!h individual ta1"ayer. .&n the !ase of married individual where only one of the s"ouses is deriving gross in!ome, only su!h s"ouse shall #e allowed the "ersonal e1em"tion. .+B- "dditional % emption for Dependents. - 0here shall #e allowed an additional e1em"tion of 0wenty-five thousand "esos +2?,>>>- for ea!h de"endent not e1!eeding four +4-. .0he additional e1em"tion for de"endents shall #e !laimed #y only one of the s"ouses in the !ase of married individuals. .&n the !ase of legally se"arated s"ouses, additional e1em"tions may #e !laimed only #y the s"ouse who has !ustody of the !hild or !hildren: Provided, 0hat the total amount of additional e1em"tions that may #e !laimed #y #oth shall not e1!eed the ma1imum additional e1em"tions herein allowed. .,or "ur"oses of this u#se!tion, a .de"endent. means a legitimate, illegitimate or legally ado"ted !hild !hiefly de"endent u"on and living with the ta1"ayer if su!h de"endent is not more than twenty-one +2(years of age, unmarried and not gainfully em"loyed or if su!h de"endent, regardless of age, is in!a"a#le of self-su""ort #e!ause of mental or "hysi!al defe!t. .1 1 1.. S&C. 5. e!tion ?( +A-+2- of Re"u#li! A!t $o, 8424, as amended, otherwise %nown as the $ational &nternal revenue 'ode of ())*, is here#y further amended to read as follows: . /'. ?(. Individual Return. .+A- Re(uirements. .+(- /1!e"t as "rovided in "aragra"h +2- of this u#se!tion, the following individuals are reCuired to file an in!ome ta1 return: .+a- 1 1 1; .1 1 1. .+2- 0he following individuals shall not #e reCuired to file an in!ome ta1 return: .+a- 1 1 1; .+#- An individual with res"e!t to "ure !om"ensation in!ome, as defined in e!tion <2+A-+(-, derived from su!h sour!es within the 5hili""ines, the in!ome ta1 on whi!h has #een !orre!tly withheld under the "rovisions of e!tion *) of this 'ode: Provided, 0hat an individual deriving !om"ensation !on!urrently from two or more em"loyers at any time during the ta1a#le year shall file an in!ome ta1 return; .+!- 1 1 1; and

.+d- A minimum wage earner as defined in e!tion 22+99- of this 'ode or an individual who is e1em"t from in!ome ta1 "ursuant to the "rovisions of this 'ode and other laws, general or s"e!ial. .1 1 1.. S&C 3. e!tion *)+A- of Re"u#li! A!t $o. 8424, as amended, otherwise %nown as the $ational &nternal Revenue 'ode of ())*, is here#y further amended to read as follows: . e!tion *). Income Ta Collected at Source. .+A- Re(uirement of )ithholding. - /1!e"t in the !ase of a minimum wage earner as defined in e!tion 22+99- of this !ode, every em"loyer ma%ing "ayment of wages shall dedu!t and withhold u"on su!h wages a ta1 determined in a!!ordan!e with the rules and regulations to #e "res!ri#ed #y the e!retary of ,inan!e, u"on re!ommendation of the 'ommissioner: .1 1 1.. S&C. . Separability Clause. - &f any "rovision of this A!t is de!lared invalid or un!onstitutional, other "rovisions hereof whi!h are not affe!ted there#y shall !ontinue to #e in full for!e and effe!t. S&C. #. Repealing Clause. - Any law, "residential de!ree or issuan!e, e1e!utive order, letter of instru!tion, administrative order, rule or regulation !ontrary to or in!onsistent with any "rovision of this A!t as here#y amended or modified a!!ordingly. S&C. 9. Effectivity Clause. - 0his A!t shall ta%e fifteen +(?- days following its "u#li!ation in the official $a!ette or in at least two +2- news"a"er of general !ir!ulation. A""roved, + gd.- PR*SP&R* C. N*)RA.&S "ea%er of the 9ouse of Re"resentatives + gd.- %ANN4 2(..AR 5resident of the enate

0his A!t whi!h is a !onsolidation of 9ouse Bill <)*( and enate Bill $o. 22)< was finally "assed #y the 9ouse of Re"resentatives and the enate on May 28, 2>>8 and May 2*, 2>>8 res"e!tively. + gd.- %AR(.4N -. -AR,A54AP e!retary 2eneral 9ouse of Re"resenatives A""roved: June 1 ! "00# + gd.- ).*R(A %ACAPA)A.5ARR*4* President of the Philippines + gd.- &%%A .(R(*5R&4&S e!retary of enate