Professional Documents
Culture Documents
CITIZENS
A. RESIDENT CITIZENS (RC)
(n) A citizen of the Philippines residing therein, unless he qualifies as a nonresident citizen
under Section 22 (E) of the NIRC.
He is a citizen of the Philippines who stays in the Philippines without the intention of
transferring his physical presence abroad, whether to stay permanently or temporarily as
an overseas contract worker (DOMONDON, Taxation Vol. II (2009))
Applicable Taxes:
1. Taxable Income;
2. Final Withholding tax on Passive Income subject to final tax; or
3. Capital Gains Tax on capital assets subject to capital gains tax.
TAXABLE INCOME
RESIDENT CITIZEN
Rate
5%
P10,000
P30,000
P30,000
P70,000
P70,000
P140,000
P140,000
P250,000
P250,000
P500,000
1.
2.
3.
4.
5.
Compensation Income;
Business and Professional Income;
Capital Gains not subject to final tax;
Passive income not subject to final tax; and
Other income.
RESIDENT CITIZEN
Interest Income
LIQUIDATIN
G
DIVIDENDS
Liquidating
gain is
subject to:
Graduated
Rates of 5%-
Royalties
A. Yield from
Deposit
Substitutes,
Turst, Frunds &
Other similar
arrangments:
20%
B. Net Income
From Expanded
Foreign
Currency
Deposit System:
7.5%
Prizes &
Winnings
A. Use and
exhaustion of
property such as
earnings from
copyrights,
patents,
trademarks,
formulas and
natural
resources under
B. Royalties
from books,
literary works
and musical
compositions:
10%
C. Interest
Income from
Local Bank
Deposits:
20%
NOTES:
1. It covers both
payments made:
- Under license; and
- Under Compensation
which a person would
be obliged to pay for
fraudulently copying
or infringing the right.
2. Royalties must be
derived from sources
within the Philippines
to be considered as
passive income.
3. If it is derived from
sources outside the
Philippines, the
Dividends
A. Prizes (except
P10,000 or less)
& Winnings
(regardless of
the amount):
20%
XPN: PCSO and
lotto winnings
are not subject
NOTES:
1. Prizes amounting to
P10,000 or less,
although exempt from
final tax, are to be
included in gross
income and subject to
the graduated rates.
2. Prizes and
Winnings from
sources without the
PH are included in the
Gross Income of a
Resident Citizen.
CASH &
PROPERTY
DIVIDENDS
1. On:
a. Cash &/or
Property
Dividends
from
domestic
corporation
or from a
joint stock
company,
etc.
b. Share in
the
distributable
net income
after tax of a
taxable or
business
partnership;
and
c. Share in
the net
income after
tax of an
association, a
joint account,
or a joint
venture or
consortium
taxable as a
corporation
of w/c he is a
member or
co-venturer:
10%
2. On cash
and/or
property
STOCK
DIVIDENDS
GR: A stock
dividend
representing the
transfer of
surplus to
capital account
shall not be
taxable. (Sec 73,
B, NIRC)
Exceptions:
1. It gives the
shareholder an
interest
different from
that which his
former stock
represented;
2. Different
classes of stocks
were issued;
3. Stock
dividend is table
to Usufructuary;
4. When there is
redemption or
cancellation
essentially
equivalent to
the distribution
of taxable
dividends;
5. The recipient
is either than
the shareholder;
and
6. Dividends
CAPITAL ASSETS
ORDINARY ASSETS
1. Stocks in Trade of the
taxpayer or other properties of a
kind which would properly be
included in the inventory of the
taxpayer if on hand at the close
of the taxable year.
B.
1st P100,000.00 5%
In excess of
P100,000.00 10%
Sale or Other Disposition of
Real Property subject to
CGT:
6% on the gross selling
price or zonal values of
the provincial and city
assessors, whichever is
the highest
Ordinary Gains
included in the gross
income.
2.
Ordinary Losses
deductible from gross
income.
2.
Tax Base:
Net Capital Gains on a per
transaction basis.
XPNS:
- Sale of Principal Residence
- Buyer is the Government or
any of its political
subdivisions
- Sale subject to right of
redemption
-NOT SUBJECT TO CGT
Fringe
Benefits
Holding Period
(NIRC, Sec 29 B)
Loss Limitation Rule
(NIRC, Sec 29 C)
NELCO (NIRC, Sec 29
D)
Notes:
Similar fringe benefits granted to
managerial or supervisory employees
which are subject to FBT may
likewise be given to R&F employees.
The monetary value of the fringe
benefits given to R&F employees,
although not subject to FBT, shall be
SUPERVISORY /
Fringe Benefits Subject to FBT:
1. Housing
2. Expense Account
3. Vehicle of Any Kind
4. Household Expenses
5. Interest on loan less than the market rate to
the extent of the difference between the market
rate and actual rate granted
6. Membership fees, dues and other expenses in
social and athletic club
7. Holiday and Vacation Expenses
8. Expenses for Foreign Travel
9. Educational Assistance to employee or his
dependents
Gross
Income of a Resident Citizen subject to
Income Tax
All
RENT
S
COMPENSATI
GAINS FROM
DEALINGS IN
PROPERTY
ROYALTI
ES
ANNUITI
ES
GROSS
PENSIO
DIVIDEN
DS
INTERES
TS
GROSS INCOME
FROM
PROFESSION,
TRADE OR
PRIZES AND
WINNINGS
3. Cancellation of the
taxpayers indebtedness
on account of service
rendered;
4. Payment of usurious
interest;
Source
5. Illegal gains;
income
under
7. Subsidy; and
1988)
8. Unutilized or excess of
the campaign funds,
which is in excess of
campaign contributions
over the candidates
Income received or earned but is not included in the determination of gross income
and thus not taxable either because:
1.
2.
3.
4.
EXEMPTION
Refers to the
removal
of
otherwise
taxable
items
from the reach
of taxation
Refers
to
an
immunity
or
privilege,
freedom
from
charge
or
burden to which
other
persons
are subject to
tax
(PLDT v Laguna, G.R. No. 151899, August 16, 2005)
1. PROCEEDS OF LIFE INSURANCE
CONDITION: The life insurance proceeds must be paid to the heirs or beneficiaries by reason of
death of the insured, whether in a single sum or installment.
2. RETURN OF INSURANCE PREMIUM
ITEMS OF
EXCLUSI
ONS
CONDITION: The amounts must be received as a return of premiums paid by him under life
insurance, endowment or annuity contracts.
3. GIFT, BEQUEST, DEVISE OR DESCENT
CONDITION: Only donated property is excluded from gross income.
ITEMIZED
DEDUCTION
PERSONAL
OPTIONAL
EXEMPTIONS STANDARD
DEDUCTIONS
PREMIUM
PAYMENTS ON
HEALTH AND/OR
HOSPITALIZATION
INSURANCE
3 TYPES OF NON-RESIDENT
CITIZENS
IMMIGRANTS
Citizens of the
Philippines who
leave the
Philippines during
the taxable year
to reside abroad,
either as
immigrants or for
employment on a
permanent basis.
EMPLOYEES OF
A FOREIGN
ENTITY ON A
PERMANENT
BASIS
OFWs
Citizens of the
Philippines who
are working and
deriving income
from abroad as
overseas contract
workers.
Citizens of the
Philippines who
work and derive
income from
abroad and
whose
employment
thereat requires
them to be
physically
Applicable Taxes:
present abroad
most of the time
1. Taxable Income;
during the
2. Final Withholding tax on Passive Income subject to final tax; or
taxable year.
3. Capital Gains Tax on capital assets subject to capital gains tax.
TAXABLE INCOME
TAX BASE: Income derived
Tax Rates: Taxable Net
during a taxable yearNON-RESIDENT
from all
Income
subject to graduated
CITIZEN
sources, within the
rate of 5%-32%.
Philippines.
Rate
5%
P10,000
P30,000
P30,000
P70,000
P70,000
P140,000
P140,000
P250,000
P250,000
P500,000
Compensation Income;
Business and Professional Income;
Capital Gains not subject to final tax;
Passive income not subject to final tax; and
Other income.
1. On:
b. Share in
the
distributable
net income
after tax of a
taxable or
business
partnership;
and
B. Royalties
from books,
literary works
and musical
NON-RESIDENT
CITIZEN
compositions:
10%
Interest Income
LIQUIDATIN
G
DIVIDENDS
Liquidating
gain is
subject to:
Graduated
Rates of 5%-
Royalties
A. Interest
C.
B.
Net
YieldIncome
from
Income
From
Deposit
Expanded
from
Local Bank
Foreign
Substitutes,
Deposits:
Currency
Turst,
Frunds &
Deposit
Other
similar
System:
20%
arrangments:
7.5%
20%
EXCEPT OCW
AND SEAMEN
Prizes &
NOTES:
1. It covers both
Winnings
payments made:
- Under license; and
A. Use and
- Under Compensation
exhaustion
of
which
a person would
be
obliged tosuch
pay for
property
as
fraudulently copying
earnings
or
infringing from
the right.
2.
Royalties must be
copyrights,
derived from sources
patents,
within the Philippines
to
be considered as
trademarks,
passive income.
formulas
and
3. If it is derived from
natural
sources
outside the
Philippines, the
a. Cash &/or
Property
Dividends
from
domestic
corporation
or from a
joint stock
company,
etc.
NOTES:
Dividends
1. Prizes amounting to
P10,000 or less,
A.
Prizes
(except
although
exempt
from
final tax, are
be
P10,000
ortoless)
included in gross
&
Winnings
income and subject to
(regardless
of
the graduated rates.
the amount):
2. Prizes and
Winnings from
20%
sources without the
PH are NOT included
XPN:
PCSO
and of
in the Gross
Income
a Non-Resident
lotto
winnings
Citizen.
c. Share in
the net
income after
tax of an
association, a
joint account,
or a joint
venture or
consortium
taxable as a
corporation
CASH &
ofPROPERTY
w/c he is a
member
or
DIVIDENDS
co-venturer:
GR: A stock
dividend
representing the
transfer of
surplus to
capital account
shall not be
taxable. (Sec 73,
B, NIRC)
Exceptions:
1. It gives the
shareholder an
interest
different from
that which his
former stock
represented;
2. Different
classes of stocks
were issued;
3. Stock
dividend is table
to Usufructuary;
4. When there is
redemption or
cancellation
essentially
STOCK
equivalent
to
DIVIDENDS
the distribution
of taxable
dividends;
10%
2. On cash
and/or
property
dividends
from a
5. The recipient
is either than
the shareholder;
and
CAPITAL ASSETS
All properties not classified as
ordinary asset.
-SUBJECT TO CGTA.
CAPITAL
1st P100,000.00 5%
In excess of P100,000.00
ON 10%
CAPITAL GAINS AND
GAINS TAX
RULES
LOSSES
of a NON-RESIDENT CITIZEN
B.
ORDINARY ASSETS
1. Stocks in Trade of the
taxpayer or other properties of a
kind which would properly be
included in the inventory of the
taxpayer if on hand at the close
of the taxable year.
1.
XPNS:
2.
Ordinary Gains
included in the gross
income.
2.
Ordinary Losses
deductible from gross
income.
Holding Period
(NIRC, Sec 29 B)
Loss Limitation Rule
(NIRC, Sec 29 C)
NELCO (NIRC, Sec 29
D)
Fringe Benefits
SUPERVISORY /
32%
XPNS:
- DE MINIMIS BENEFITS
- BENEFITS PROVIDED FOR THE
CONVENIENCE OF THE EMPLOYER
1. Housing
2. Expense Account
3. Vehicle of Any Kind
4. Household Expenses
5. Interest on loan less than the market rate to
the extent of the difference between the market
rate and actual rate granted
6. Membership fees, dues and other expenses in
social and athletic club
7. Holiday and Vacation Expenses
8. Expenses for Foreign Travel
9. Educational Assistance to employee or his
dependents
Gross
Income of a Non-Resident Citizen subject
to Income Tax
All
RENT
S
COMPENSATI
GAINS FROM
DEALINGS IN
PROPERTY
ROYALTI
ES
PRIZES AND
WINNINGS
ANNUITI
ES
GROSS
GROSS INCOME
FROM
PROFESSION,
TRADE OR
1. Treasure found or
PENSIO
punitive
damages
representing profits lost;
2. Amount received by
mistake;
DIVIDEN
DS
3. Cancellation
of the
taxpayers indebtedness
INTERES
on account
of service
TS
rendered;
4. Payment of usurious
interest;
5. Illegal gains;
6. Tax refunds and bad
debts recovered;
7. Subsidy; and
8. Unutilized or excess of
the campaign funds,
which is in excess of
campaign contributions
over the candidates
EXEMPTION
Refers to the
removal
of
otherwise
taxable
items
from the reach
of taxation
Refers
to
an
immunity
or
privilege,
freedom
from
charge
or
burden to which
other
persons
are subject to
tax
(PLDT v Laguna, G.R. No. 151899, August 16, 2005)
1. PROCEEDS OF LIFE INSURANCE
CONDITION: The life insurance proceeds must be paid to the heirs or beneficiaries by reason of
death of the insured, whether in a single sum or installment.
2. RETURN OF INSURANCE PREMIUM
ITEMS OF
EXCLUSI
ONS
CONDITION: The amounts must be received as a return of premiums paid by him under life
insurance, endowment or annuity contracts.
3. GIFT, BEQUEST, DEVISE OR DESCENT
CONDITION: Only donated property is excluded from gross income.
ITEMIZED
DEDUCTION
PERSONAL
OPTIONAL
EXEMPTIONS STANDARD
DEDUCTIONS
PREMIUM
PAYMENTS ON
HEALTH AND/OR
HOSPITALIZATION
INSURANCE
alien
An alien is considered a
resident of the Philippines
for income tax purposes if:
TAXABLE INCOME
RESIDENT ALIEN
TAX BASE: Income derived
Tax Rates: Taxable Net
during a taxable year from all
Income subject to graduated
sources, within the
rate of 5%-32%.
Philippines.
Rate
5%
P10,000
P30,000
P30,000
P70,000
P70,000
P140,000
P140,000
P250,000
P250,000
P500,000
1.
2.
3.
4.
5.
Compensation Income;
Business and Professional Income;
Capital Gains not subject to final tax;
Passive income not subject to final tax; and
Other income.
Interest Income
LIQUIDATIN
G
DIVIDENDS
Liquidating
gain is
subject to:
Graduated
Rates of 5%-
Royalties
A. Yield from
Deposit
Substitutes,
Turst, Frunds &
Other similar
arrangments:
20%
B. Net Income
From Expanded
Foreign
Currency
Deposit System:
7.5%
Prizes &
Winnings
A. Use and
exhaustion of
property such as
earnings from
copyrights,
patents,
trademarks,
formulas and
natural
resources under
B. Royalties
from books,
literary works
and musical
compositions:
10%
C. Interest
Income from
Local Bank
Deposits:
20%
NOTES:
1. It covers both
payments made:
- Under license; and
- Under Compensation
which a person would
be obliged to pay for
fraudulently copying
or infringing the right.
2. Royalties must be
derived from sources
within the Philippines
to be considered as
passive income.
3. If it is derived from
sources outside the
Philippines, the
Dividends
A. Prizes (except
P10,000 or less)
& Winnings
(regardless of
the amount):
20%
XPN: PCSO and
lotto winnings
are not subject
NOTES:
1. Prizes amounting to
P10,000 or less,
although exempt from
final tax, are to be
included in gross
income and subject to
the graduated rates.
2. Prizes and
Winnings from
sources without the
PH are NOT included
in the Gross Income of
a Resident Alien.
CASH &
PROPERTY
DIVIDENDS
1. On:
a. Cash &/or
Property
Dividends
from
domestic
corporation
or from a
joint stock
company,
etc.
b. Share in
the
distributable
net income
after tax of a
taxable or
business
partnership;
and
c. Share in
the net
income after
tax of an
association, a
joint account,
or a joint
venture or
consortium
taxable as a
corporation
of w/c he is a
member or
co-venturer:
10%
2. On cash
and/or
property
dividends
from a
STOCK
DIVIDENDS
GR: A stock
dividend
representing the
transfer of
surplus to
capital account
shall not be
taxable. (Sec 73,
B, NIRC)
Exceptions:
1. It gives the
shareholder an
interest
different from
that which his
former stock
represented;
2. Different
classes of stocks
were issued;
3. Stock
dividend is table
to Usufructuary;
4. When there is
redemption or
cancellation
essentially
equivalent to
the distribution
of taxable
dividends;
5. The recipient
is either than
the shareholder;
and
6. Dividends
ORDINARY ASSETS
1. Stocks in Trade of the
taxpayer or other properties of a
kind which would properly be
included in the inventory of the
taxpayer if on hand at the close
of the taxable year.
B.
2.
Ordinary Gains
included in the gross
income.
Ordinary Losses
deductible from gross
income.
Tax Base:
Net Capital Gains on a per
transaction basis.
XPNS:
- Sale of Principal Residence
- Buyer is the Government or
any of its political
subdivisions
- Sale subject to right of
redemption
-NOT SUBJECT TO CGT
Holding Period
(NIRC, Sec 29 B)
Loss Limitation Rule
(NIRC, Sec 29 C)
NELCO (NIRC, Sec 29
D)
2.
Fringe Benefits
SUPERVISORY /
32%
XPNS:
- DE MINIMIS BENEFITS
- BENEFITS PROVIDED FOR THE
CONVENIENCE OF THE EMPLOYER
1. Housing
2. Expense Account
3. Vehicle of Any Kind
4. Household Expenses
5. Interest on loan less than the market rate to
the extent of the difference between the market
rate and actual rate granted
6. Membership fees, dues and other expenses in
social and athletic club
7. Holiday and Vacation Expenses
8. Expenses for Foreign Travel
9. Educational Assistance to employee or his
dependents
Gross
Income of a Resident Alien subject to
Income Tax
All
RENT
S
COMPENSATI
GAINS FROM
DEALINGS IN
PROPERTY
ROYALTI
ES
ANNUITI
ES
GROSS
PENSIO
DIVIDEN
DS
INTERES
TS
GROSS INCOME
FROM
PROFESSION,
TRADE OR
PRIZES AND
WINNINGS
3. Cancellation of the
taxpayers indebtedness
on account of service
rendered;
4. Payment of usurious
interest;
Source
5. Illegal gains;
income
under
7. Subsidy; and
1988)
8. Unutilized or excess of
the campaign funds,
which is in excess of
campaign contributions
over the candidates
EXEMPTION
Refers to the
removal
of
otherwise
taxable
items
from the reach
of taxation
Refers
to
an
immunity
or
privilege,
freedom
from
charge
or
burden to which
other
persons
are subject to
tax
(PLDT v Laguna, G.R. No. 151899, August 16, 2005)
1. PROCEEDS OF LIFE INSURANCE
CONDITION: The life insurance proceeds must be paid to the heirs or beneficiaries by reason of
death of the insured, whether in a single sum or installment.
2. RETURN OF INSURANCE PREMIUM
ITEMS OF
EXCLUSI
ONS
CONDITION: The amounts must be received as a return of premiums paid by him under life
insurance, endowment or annuity contracts.
3. GIFT, BEQUEST, DEVISE OR DESCENT
CONDITION: Only donated property is excluded from gross income.
7. MISCELLANEOUS ITEMS
- PASSIVE INCOME
- INCOME DERIVED BY THE PHILIPPINE GOVERNMENT OR ITS POLITICAL SUBDIVISION
- PRIZES AND AWARDS
- PRIZES AND AWARDS GRANTED TO ATHLETES IN SPORTS COMPETITIONS LOCALLY OR ABROAD AND
SANCTIONED BY THEIR NATIONAL SPORTS ASSOCIATION
- 13TH MONTH PAY AND OTHER BENEFITS UP TO P30,000.00
- GSIS, SSS, MEDICARE (NOW PHILHEALTH) AND PAG-IBIG CONTRIBUTIONS AND UNION DUES OF
INDIVIDUALS
- GAINS DERIVED FROM SALE OR EXCHANGE OF BONDS, DEBENTURES, OR OTHER CERTIFICATE OF
INDEBTEDNESS WITH A MATURITY OF MORE THAN 5 YEARS
- GAINS FROM REDEMPTION OF SHARES IN MUTUAL FUNDS
ITEMIZED
DEDUCTION
B.
PERSONAL
OPTIONAL
EXEMPTIONS STANDARD
DEDUCTIONS
ALIENS (NRA)
(n) An individual whose residence is not
and who is not a citizen thereof.
PREMIUM
PAYMENTS ON
HEALTH AND/OR
HOSPITALIZATION
INSURANCE
NON-RESIDENT
within the Philippines
*The term trade or business includes the performance of services by the taxpayer
as an employee. The term has also been expanded to include the exercise of
profession.
Applicable Taxes:
1. Taxable Income;
2. Final Withholding tax on Passive Income subject to final tax; or
3. Capital Gains Tax on capital assets subject to capital gains tax.
5%
P10,000
P30,000
P30,000
P70,000
P70,000
P140,000
P140,000
P250,000
P250,000
P500,000
1.
2.
3.
4.
5.
Compensation Income;
Business and Professional Income;
Capital Gains not subject to final tax;
Passive income not subject to final tax; and
Other income.
LIQUIDATIN
G
DIVIDENDS
Liquidating
gain is
subject to:
Graduated
Rates of 5%-
Royalties
A. Yield from
Deposit
Substitutes,
Turst, Frunds &
Other similar
arrangments:
20%
B. Net Income
From Expanded
Foreign
Currency
Deposit System:
N/A
Prizes &
Winnings
A. Use and
exhaustion of
property such as
earnings from
copyrights,
patents,
trademarks,
formulas and
natural
resources under
B. Royalties
from books,
literary works
and musical
compositions:
10%
C. Interest
Income from
Local Bank
Deposits:
20%
NOTES:
1. It covers both
payments made:
- Under license; and
- Under Compensation
which a person would
be obliged to pay for
fraudulently copying
or infringing the right.
2. Royalties must be
derived from sources
within the Philippines
to be considered as
passive income.
3. If it is derived from
sources outside the
Philippines, the
Dividends
A. Prizes (except
P10,000 or less)
& Winnings
(regardless of
the amount):
20%
XPN: PCSO and
lotto winnings
are not subject
NOTES:
1. Prizes amounting to
P10,000 or less,
although exempt from
final tax, are to be
included in gross
income and subject to
the graduated rates.
2. Prizes and
Winnings from
sources without the
PH are NOT included
in the Gross Income of
a Non-Resident Alien
Engaged in Trade or
Business.
CASH &
PROPERTY
DIVIDENDS
1. On:
a. Cash &/or
Property
Dividends
from
domestic
corporation
or from a
joint stock
company,
etc.
b. Share in
the
distributable
net income
after tax of a
taxable or
business
partnership;
and
c. Share in
the net
income after
tax of an
association, a
joint account,
or a joint
venture or
consortium
taxable as a
STOCK
DIVIDENDS
GR: A stock
dividend
representing the
transfer of
surplus to
capital account
shall not be
taxable. (Sec 73,
B, NIRC)
Exceptions:
1. It gives the
shareholder an
interest
different from
that which his
former stock
represented;
2. Different
classes of stocks
were issued;
3. Stock
dividend is table
to Usufructuary;
4. When there is
redemption or
cancellation
essentially
equivalent to
the distribution
of taxable
dividends;
5. The recipient
is either than
the shareholder;
and
6. Dividends
ORDINARY ASSETS
1. Stocks in Trade of the
taxpayer or other properties of a
kind which would properly be
included in the inventory of the
taxpayer if on hand at the close
of the taxable year.
B.
Ordinary Gains
included in the gross
income.
2.
Ordinary Losses
deductible from gross
income.
2.
Tax Base:
Net Capital Gains on a per
transaction basis.
XPNS:
- Buyer is the Government or
any of its political
subdivisions
- Sale subject to right of
redemption
A NRA is not entitled to the
exemption of payment of
CGT in case of sale of
Principal Residence.
-NOT SUBJECT TO CGT
Fringe
Benefits
RANK AND FILE
Holding Period
(NIRC, Sec 29 B)
Loss Limitation Rule
(NIRC, Sec 29 C)
NELCOSubject
(NIRC, Sec
29
to Withholding
Tax on
D)
WAGES
Notes:
Similar fringe benefits granted to
managerial or supervisory employees
which are subject to FBT may
likewise be given to R&F employees.
The monetary value of the fringe
benefits given to R&F employees,
although not subject to FBT, shall be
SUPERVISORY /
Subject to Fringe Benefit Tax Rate
Fringe Benefits Subject to FBT:
32%
1. Housing
2. Expense Account
3. Vehicle of Any Kind
4. Household Expenses
5. Interest on loan less than the market rate to
the extent of the difference between the market
rate and actual rate granted
6. Membership fees, dues and other expenses in
social and athletic club
7. Holiday and Vacation Expenses
8. Expenses for Foreign Travel
9. Educational Assistance to employee or his
dependents
XPNS:
- DE MINIMIS BENEFITS
- BENEFITS PROVIDED FOR THE
CONVENIENCE OF THE EMPLOYER
Tax Base: Grossed-up Monetary Value
(GMV) of Fringe Benefits
Determination of GMV: by dividing
the monetary value of the fringe
benefit by 68%
Gross
RENT
S
COMPENSATI
GAINS FROM
DEALINGS IN
PROPERTY
ROYALTI
ES
ANNUITI
ES
GROSS
PENSIO
DIVIDEN
DS
INTERES
TS
GROSS INCOME
FROM
PROFESSION,
TRADE OR
PRIZES AND
WINNINGS
3. Cancellation of the
taxpayers indebtedness
on account of service
rendered;
4. Payment of usurious
interest;
Source
5. Illegal gains;
income
under
7. Subsidy; and
1988)
8. Unutilized or excess of
the campaign funds,
which is in excess of
campaign contributions
over the candidates
EXEMPTION
Refers to the
removal
of
otherwise
taxable
items
from the reach
of taxation
Refers
to
an
immunity
or
privilege,
freedom
from
charge
or
burden to which
other
persons
are subject to
tax
(PLDT v Laguna, G.R. No. 151899, August 16, 2005)
1. PROCEEDS OF LIFE INSURANCE
CONDITION: The life insurance proceeds must be paid to the heirs or beneficiaries by reason of
death of the insured, whether in a single sum or installment.
2. RETURN OF INSURANCE PREMIUM
ITEMS OF
EXCLUSI
ONS
CONDITION: The amounts must be received as a return of premiums paid by him under life
insurance, endowment or annuity contracts.
3. GIFT, BEQUEST, DEVISE OR DESCENT
CONDITION: Only donated property is excluded from gross income.
PERSONAL
EXEMPTIONS
PREMIUM
PAYMENTS ON
HEALTH AND/OR
HOSPITALIZATION
INSURANCE
LIQUIDATIN
G
DIVIDENDS
Liquidating
gain is
subject to:
Royalties
A. Yield from
Deposit
Substitutes,
Turst, Frunds &
Other similar
arrangments:
25%
25%
B. Net Income
From Expanded
Foreign
Currency
Deposit System:
N/A
Prizes &
Winnings
A. Use and
exhaustion of
property such as
earnings from
copyrights,
patents,
trademarks,
formulas and
natural
resources under
B. Royalties
from books,
literary works
and musical
compositions:
25%
C. Interest
Income from
Local Bank
Deposits:
25%
NOTES:
1. It covers both
payments made:
- Under license; and
- Under Compensation
which a person would
be obliged to pay for
fraudulently copying
or infringing the right.
2. Royalties must be
derived from sources
within the Philippines
to be considered as
passive income.
3. If it is derived from
sources outside the
Philippines, the
Dividends
A. Prizes &
Winnings
(regardless of
the amount):
25%
XPN: PCSO and
lotto winnings
are not subject
to final tax.
NOTES:
1. Prizes and
Winnings from
sources without the
PH are NOT included
in the Gross Income of
a Non-Resident Alien
NOT Engaged in Trade
or Business.
CASH &
PROPERTY
DIVIDENDS
1. On:
a. Cash &/or
Property
Dividends
from
domestic
corporation
or from a
joint stock
company,
etc.
b. Share in
the
distributable
net income
after tax of a
taxable or
business
partnership;
and
c. Share in
the net
income after
tax of an
association, a
joint account,
or a joint
venture or
consortium
taxable as a
STOCK
DIVIDENDS
GR: A stock
dividend
representing the
transfer of
surplus to
capital account
shall not be
taxable. (Sec 73,
B, NIRC)
Exceptions:
1. It gives the
shareholder an
interest
different from
that which his
former stock
represented;
2. Different
classes of stocks
were issued;
3. Stock
dividend is table
to Usufructuary;
4. When there is
redemption or
cancellation
essentially
equivalent to
the distribution
of taxable
dividends;
5. The recipient
is either than
the shareholder;
and
6. Dividends
ORDINARY ASSETS
1. Stocks in Trade of the
taxpayer or other properties of a
kind which would properly be
included in the inventory of the
taxpayer if on hand at the close
of the taxable year.
2. Property held by the taxpayer
primarily for sale to customers in
the ORDINARY COURSE OF
BUSINESS.
B.
Sale or Other
Disposition of Real Property
subject to CGT:
Ordinary Gains
included in the gross
income.
2.
Ordinary Losses
deductible from gross
income.
2.
1st P100,000.00 5%
In excess of P100,000.00
10%
Tax Base:
Net Capital Gains on a per
transaction basis.
XPNS:
- Buyer is the Government or
any of its political
subdivisions
- Sale subject to right of
redemption
A NRA is not entitled to the
exemption of payment of
CGT in case of sale of
Principal Residence.
-NOT SUBJECT TO CGT
Fringe
Benefits
Holding Period
(NIRC, Sec 29 B)
Loss Limitation Rule
(NIRC,Subject
Sec 29 C)
to Withholding Tax on
NELCOWAGES
(NIRC, Sec 29
Notes:
SUPERVISORY /
Fringe Benefits Subject to FBT:
1. Housing
2. Expense Account
3. Vehicle of Any Kind
4. Household Expenses
5. Interest on loan less than the market rate to
the extent of the difference between the market
rate and actual rate granted
6. Membership fees, dues and other expenses in
social and athletic club
7. Holiday and Vacation Expenses
8. Expenses for Foreign Travel
9. Educational Assistance to employee or his
dependents
RENT
S
COMPENSATI
GAINS FROM
DEALINGS IN
PROPERTY
ROYALTI
ES
ANNUITI
ES
GROSS
PENSIO
DIVIDEN
DS
INTERES
TS
GROSS INCOME
FROM
PROFESSION,
TRADE OR
PRIZES AND
WINNINGS
3. Cancellation of the
taxpayers indebtedness
on account of service
rendered;
4. Payment of usurious
interest;
Source
5. Illegal gains;
income
under
7. Subsidy; and
1988)
8. Unutilized or excess of
the campaign funds,
which is in excess of
campaign contributions
over the candidates
EXEMPTION
Refers to the
removal
of
otherwise
taxable
items
from the reach
of taxation
Refers
to
an
immunity
or
privilege,
freedom
from
charge
or
burden to which
other
persons
are subject to
tax
(PLDT v Laguna, G.R. No. 151899, August 16, 2005)
1. PROCEEDS OF LIFE INSURANCE
CONDITION: The life insurance proceeds must be paid to the heirs or beneficiaries by reason of
death of the insured, whether in a single sum or installment.
2. RETURN OF INSURANCE PREMIUM
ITEMS OF
EXCLUSI
ONS
CONDITION: The amounts must be received as a return of premiums paid by him under life
insurance, endowment or annuity contracts.
3. GIFT, BEQUEST, DEVISE OR DESCENT
CONDITION: Only donated property is excluded from gross income.
MINIMUM WAGE
MWEs shall be exempt from
the payment of income tax
and withholding tax. The
holiday pay, overtime pay,
nightshift differential and
hazard pay received by such
minimum wage earners shall
likewise be exempt from
income tax.
Option
1:
Final
income
tax of:
15%
Filipinos
must be
holding a
manageri
al or
superviso
ry
position
though
there are
no aliens
holding
the same
position.
Option 2:
Graduate
d Rates
on
taxable
compensa
tion
income:
5%-32%
Foreign Service
contractors or subcontractors engaged in
petroleum operations
in the Philippines.
Filipinos
must be
holding a
manageri
al or
superviso
ry
position
AND
there are
aliens
holding
the same
Option 2:
Graduate
d Rates
on
taxable
compensa
tion
income:
5%-32%
Option 2:
Graduate
d Rates
on
taxable
compensa
tion
income:
5%-32%
Notes:
Similar fringe benefits granted to
managerial or supervisory employees
which are subject to FBT may
likewise be given to R&F employees.
The monetary value of the fringe
benefits given to R&F employees,
although not subject to FBT, shall be
SUPERVISORY /
Fringe Benefits Subject to FBT:
1. Housing
2. Expense Account
3. Vehicle of Any Kind
4. Household Expenses
5. Interest on loan less than the market rate to
the extent of the difference between the market
rate and actual rate granted
6. Membership fees, dues and other expenses in
social and athletic club
7. Holiday and Vacation Expenses
8. Expenses for Foreign Travel
9. Educational Assistance to employee or his
dependents
EXEMPTION
Refers to the
removal
of
otherwise
taxable
items
from the reach
of taxation
Refers
to
an
immunity
or
privilege,
freedom
from
charge
or
burden to which
other
persons
are subject to
tax
(PLDT v Laguna, G.R. No. 151899, August 16, 2005)
1. PROCEEDS OF LIFE INSURANCE
CONDITION: The life insurance proceeds must be paid to the heirs or beneficiaries by reason of
death of the insured, whether in a single sum or installment.
2. RETURN OF INSURANCE PREMIUM
ITEMS OF
EXCLUSI
ONS
CONDITION: The amounts must be received as a return of premiums paid by him under life
insurance, endowment or annuity contracts.
3. GIFT, BEQUEST, DEVISE OR DESCENT
CONDITION: Only donated property is excluded from gross income.