A.

For Individuals Earning Purely Compensation Income and

Individuals Engaged in Business and Practice of Profession

Amount of Net Taxable

Rate
Income
Over But Not Over
P10,000 5%
P10,000 P30,000 P500 + 10% of the Excess over P10,000
P30,000 P70,000 P2,500 + 15% of the Excess over P30,000
P70,000 P140,000 P8,500 + 20% of the Excess over P70,000
P140,000 P250,000 P22,500 + 25% of the Excess over P140,000
P250,000 P500,000 P50,000 + 30% of the Excess over P250,000
P500,000 P125,000 + 32% of the Excess over P500,000
 Tax Rate Taxable Base
1. Domestic Corporations:
a. In General 30% Net taxable income from all sources
b. MCIT* 2% Gross Income
c. IAET 10% Improperly Accumulated Taxable Income
Net taxable income provided that the
2. Proprietary Educational gross income from unrelated trade,
10%
Institution business or other activity does not
exceed 50% of the total gross income
Net taxable income provided that the
3. Non-stock, Non-profit gross income from unrelated trade,
10%
Hospitals business or other activity does not
exceed 50% of the total gross income
4. GOCC, Agencies & Instrumentalities
a. In General 30% Net taxable income from all sources
b. MCIT* 2% Gross Income
c. IAET 10% Improperly Accumulated Taxable Income
 Tax Rate Taxable Base
5. National Gov't. & LGUs
a. In General 30% Net taxable income from all sources
b. MCIT* 2% Gross Income
c. IAET 10% Improperly Accumulated Taxable Income
6. Taxable Partnerships
a. In General 30% Net taxable income from all sources
b. MCIT* 2% Gross Income
c. IAET 10% Improperly Accumulated Taxable Income
7. Exempt Corporation
a. On Exempt Activities 0%
b. On Taxable Activities 30% Net taxable income from all sources
8. GPP 0%
Rate
specified
9. Corporation covered by
under the
Special Laws
respective
special laws
 Tax Rate Taxable Base
10. International Carriers 2.5% Gross Philippine Billings
11. Reg’l Operating Head 10% Taxable Income
Gross Taxable Income On Foreign
12. OBUs 10%
Currency Transaction
On Taxable Income other than Foreign
30%
Currency Transaction
13. Foreign Currency Gross Taxable Income On Foreign
10%
Deposit Units (FCDU) Currency Transaction
On Taxable Income other than Foreign
30%
Currency Transaction

*Beginning on the 4th year immediately following the year in which such
corporation commenced its business operations, when the minimum
corporate income tax is greater than the tax computed using the normal
income tax.
 Passive Income Rates

1. Interest from currency deposits, trust funds and deposit substitutes 20%

2. Royalties (on books as well as literary & musical composition) 10%

- In general 20%
3. Prizes (P10,000 or less ) 5%
- In excess of P10,000 20%
4. Winnings (except from PCSO and lotto) 20%
5. Interest Income of Foreign Currency Deposit 7.5%
6. Cash and Property Dividends
- To individuals from Domestic Corporations 10 %

- To Domestic Corporations from Another Domestic Corporations 0%

7. On capital gains presumed to have been realized from sale, exchange

6%
or other disposition of real property (capital asset)

8. On capital gains for shares of stock not traded in the stock exchange

- Not over P100,000 5%

 Passive Income Rates

8. On capital gains for shares of stock not traded in the stock exchange

- Not over P100,000 5%

- Any amount in excess of P100,000 10%
9. Interest Income from long-term deposit or investment in the form of
Exempt
savings, common or individual trust funds, deposit substitutes,
investment management accounts and other investments evidenced by
certificates

Upon pretermination before the fifth year , there should be imposed on

the entire income from the proceeds of the long-term deposit based on
the remaining maturity thereof:

Holding Period
- Four (4) years to less than five (5) years 5%
- Three (3) years to less than four (4) years 12%
- Less than three (3) years 20%
B. For Non-Resident Aliens Engaged in Trade or Business
1. Interest from currency deposits, trust funds and deposit substitutes 20%

2. Interest Income from long-term deposit or investment in the form of

savings, common or individual trust funds, deposit substitutes, investment Exempt
management accounts and other investments evidenced by certificates
Upon pretermination before the fifth year, there should be imposed on the
entire income from the proceeds of the long-term deposit based on the
remaining maturity thereof:
Holding Period:
-Four (4) years to less than five (5) years 5%
-Three (3) years to less than four (4) years 12%
-Less than three (3) years 20%
3. On capital gains presumed to have been realized from the sale, exchange or
6%
other disposition of real property
4. On capital gains for shares of stock not traded in the Stock Exchange
- Not over P100,000 5%
- Any amount in excess of P100,000 10%
C. For Non-Resident Aliens Not Engaged in Trade or Business

1. On the gross amount of income derived from all sources within the
25%
Philippines
2. On capital gains presumed to have been realized from the exchange
6%
or other disposition of real property located in the Phils.
3. On capital gains for shares of stock not traded in the Stock Exchange
- Not Over P100,000 5%
- Any amount in excess of P100,000 10%
D. On the gross income in the Philippines of Aliens Employed by
Regional Headquarters (RHQ) or Area Headquarters and Regional
15%
Operating Headquarters (ROH), Offshore Banking Units (OBUs),
Petroleum Service Contractor and Subcontractor
E. General Professional Partnerships 0%
F. Domestic Corporations
1) a. In General – on net taxable income 30%
b. Minimum Corporate Income Tax – on gross income 2%
c. IAET – on improperly accumulated taxable income 10%
2) Proprietary Educational Institution and Non-profit Hospitals 10%
- In general (on net taxable income) 10%
- If the gross income from unrelated trade, business or other activity exceeds
30%
50% of the total gross income from all sources
4) GOCC, Agencies & Instrumentalities
a. In General - on net taxable income 30%
b. Minimum Corporate Income Tax – on gross income 2%
c. IAET – on improperly accumulated taxable income 10%
5) Taxable Partnerships
a. In General – on net taxable income 30%
b. Minimum Corporate Income Tax – on gross income 2%
c. IAET – on improperly accumulated taxable income 10%
6) Exempt Corporation
a. On Exempt Activities 0%
b. On Taxable Activities 30%
G. Resident Foreign Corporation

1)a. In General – on net taxable income 30%

b. Minimum Corporate Income Tax – on gross income 2%
c. IAET – on improperly accumulated taxable income 10%
2) International Carriers – on gross Philippine billings 2.50%
3) Regional Operating Headquarters on gross income 10%
5) Offshore Banking Units (OBUs) on gross income 10%
6) Foreign Currency Deposit Units (FCDU) on gross income 10%
Related Revenue Issuances
RR No. 4-95, RR No. 4-96, RR No. 5-97, RR No. 1-98, RA
9337, RR 14-2002, RR 12-2007

Codal Reference
Sections 23-59, 67-73 and 74-77 of the National Internal
Revenue Code