K.J.

CULAJARA, CPA, JD

FINAL WITHHOLDING TAX TABLE

(with TRAIN Law amendments)

INCOME SOURCE INDIVIDUAL INCOME EARNERS CORPORATE INCOME EARNERS

Resident Citizen Non-Resident Resident Alien Non-Resident Alien Non-Resident Alien Domestic Resident Foreign Non-Resident
Citizen Engaged in Trade or Not Engaged in Corporation Corporation Foreign
Business (NRA-ETB) Trade or Business Corporation
(NRA-NETB)
Interest under expanded 15% EXEMPT 15% EXEMPT EXEMPT 15% 7.5% EXEMPT
foreign currency deposit
system
Royalty from books, 10% 10% 10% 10% 25% TAX ON GROSS 20% 20% 30% FWT
literary works, and INCOME
musical compositions
Other royalties 20% 20% 20% 20% 25% TAX ON GROSS 20% 20% 30% FWT
INCOME
Note: Royalties from Note: Royalties
abroad is taxed at the from abroad is
regular corporate EXEMPT.
rate of 30%.
Interest on any current 20% 20% 20% 20% 25% TAX ON GROSS 20% 20% 30% FWT
bank deposit, yield or INCOME
other monetary benefits Note: Interest on
from deposit substitute, foreign loans (i.e.
trust fund and similar foreign non-
arrangement resident lends to a
domestic
corporation) is
subject to 20%
final tax.
Winnings (except PCSO 20% 20% 20% 20% 25% TAX ON GROSS REGULAR 30% REGULAR 30% 30% FWT
and Lotto winnings INCOME CORPORATE TAX CORPORATE TAX
amounting to P10,000 or RATE RATE
less)

Note: PCSO and lotto

winnings amounting to
P10,000 or less are
EXEMPT.
Dividend from: 10% 10% 10% 20% 25% TAX ON GROSS EXEMPT EXEMPT 15%
- Domestic INCOME
K.J. CULAJARA, CPA, JD

corporation
- Joint stock
company
- Insurance or
mutual fund
company
- ROHQ of multi-
national
company
- Share in the
distributive net
income after
tax of a
partnership
(except GPP)
- Joint stock or
joint venture or
consortium
taxable as a
corporation
Dividend from foreign GRADUATED TAX EXEMPT EXEMPT EXEMPT EXEMPT REGULAR 30% EXEMPT EXEMPT
corporation RATE (see Tax Table CORPORATE TAX
in Sec. 24[a]) RATE
Interest on long-term EXEMPT EXEMPT EXEMPT EXEMPT 25% TAX ON GROSS REGULAR 30% REGULAR 30% 30% FWT
deposit or investment in INCOME CORPORATE TAX CORPORATE TAX
banks (with maturity of 5 Note: Should the RATE RATE
years or more) holder of the
certificate pre-
terminate the
deposit or
investment before
th
the 5 year, final tax
shall be imposed on
the entire income
and shall be
deducted and
withheld based on
the remaining
maturity:
- 4 years to
less than 5
years – 5%
K.J. CULAJARA, CPA, JD

- 3 years to
less than 4
years –
12%
- Less than 3
years –
20%

Income tax on the following non-resident Foreign Corporations

 Cinematographic film owner, lessor, distributor – 25% of gross income from all sources within the Philippines
 Lessor of vessels chartered by Philippine Nationals – 4.5% of gross rentals, lease or charter fees from leases or charters to Filipino citizens or corporations
 Lessor of aircraft, machineries and other equipment –7.5% of gross rentals or fees

Special rules for special corporations

 International carriers – 2.5% of gross Philippine billings
 Offshore banking units – 10% final tax
 Regional or area headquarters – exempt
 Regional operating headquarters – 10% tax on taxable income
 Proprietary educational institution – 10%
 Non-profit hospitals – 10%