Professional Documents
Culture Documents
Over PhP250,000 but not over 20% of the excess over 15% of the excess over
PhP400,000 PhP250,000 PhP250,000
Over PhP400,000 but not over PhP30,000 + 25% of the excess PhP22,500 + 20% of the excess
PhP800,000 over PhP400,000 over PhP400,000
Over PhP800,000 but not over PhP130,000 + 30% of the excess PhP102,500 + 25% of the excess
PhP2M over PhP800,000 over PhP800,000
Over PhP2M but not over PhP8M PhP490,000 + 32% of the excess PhP402,500 + 30% of the excess
over PhP2M over PhP2M
3. Non-vat tax payer but during the year, his gross sale or receipt exceeded the threshold (he should now be registered
as a VAT tax payer, all payments made with the 8% will be treated as a tax credit);
4. Tax payers who are subject to other percentage tax except Sec 116;
5. Partners of a general professional partnership (the general partnership shall not be taxed, only the general partners
with respect to their distributive shares;
PhP250,000 or below 0%
FOR EXAMPLE:
Q: X is a lawyer engaged in the profession, apart from that, he is also engaged in the business of a laundry shop. His
gross income for the profession is 1.5m and for the laundry shop is 500k.
A: X shall be considered as S-EMP. Therefore, he has the option to either be taxed at 8% (since his gross sales or
receipts does not exceed the 3m threshold; or he can follow the graduated income tax rates by choosing the option in
the first ITR.
Q: X is a lawyer engaged in the profession, apart from that, he is also engaged in the business of a laundry shop. His
gross income for the profession is 3m and for the laundry shop is 1.5m.
A: The option of 8% is not an available option because more than 3m. Therefore, graduated income tax rate shall
apply.
• For income from business and/or practice of profession, they have the option to be subject to 8% tax or based
on personal income tax table if their gross sales or gross receipts and other non-operating income do not exceed
the VAT threshold of PhP3M.
• Otherwise, there is no option to avail of the 8% rate and all income shall be subject to personal income tax table.
FOR EXAMPLE:
Q: X is a lawyer engaged in the profession but he is employed in a company as the VP for legal affairs and he receives
3m as salary gross compensation, apart from that, he is also engaged in the business of a laundry shop with a gross
receipt of 2m.
A: For his compensation income, graduated income tax rates (since more than 3m). For business income, option of 8%
or graduated income tax rates (since below 3m).