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Tax Rate Summary

This document summarizes tax rates for different types of passive income received by various taxpayer classifications in the Philippines. Key points include: - Interest income is generally taxed at 20-25% for most taxpayers, except for certain long-term deposits which are exempt. - Royalties and prizes are usually subject to a 20-25% tax rate. - Dividends paid to resident citizens face a 10% tax, while those to non-resident foreign corporations are taxed at 30%. - Certain government institutions and some domestic corporations are fully or partially exempt from income taxes on dividends.

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Pamela Jean Cuya
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58 views3 pages

Tax Rate Summary

This document summarizes tax rates for different types of passive income received by various taxpayer classifications in the Philippines. Key points include: - Interest income is generally taxed at 20-25% for most taxpayers, except for certain long-term deposits which are exempt. - Royalties and prizes are usually subject to a 20-25% tax rate. - Dividends paid to resident citizens face a 10% tax, while those to non-resident foreign corporations are taxed at 30%. - Certain government institutions and some domestic corporations are fully or partially exempt from income taxes on dividends.

Uploaded by

Pamela Jean Cuya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Resident Non-resident Non-Resident

Citizen alien engaged in Alien not


Passive Income On Individual Non-resident trade/ business engaged in Domestic Resident Non-
Citizen trade/business Corporation Foreign resident
Resident Alien Foreign
Interest Passive
Income
Interest from any currency bank deposit
and yield/ monetary from deposit 20% 20% 25% 20% 20%
substitutes and from trusts funds and
similar arrangement
Interest income from a depository bank;
Expanded Foreign Currency Deposit 15% Exempt Exempt If not issued by banks
subject to 20% WT and
System (FCDS), general RCIT 30%

EXEMPT
Before Train Law 7.5% 7.5%
Under Train Law 15% 15%
Under CREATE 15% 15%
Interest income from long-term deposit
or investment in the form of savings,
common or individual trust funds, deposit
substitute, investment management
accounts (IMA) and other investments
evidenced by certificates in such form
prescribed by the BSP with five-year term
Exempt Exempt - - - -
or longer. If deposit is pre-terminated
before the fifth year, the
corresponding final tax shall be:

4 years to less than 5 years


3 years to less than 4 years
Less than 3 years 5% 5%
12% 12%
20% 20%
Income derived by a depository banks
under the FCDU with local commercial
banks, branches of foreign banks - - - 10% 10%
including interest income from currency
of loans.
Royalties

Royalties, in general 20% 20% 25% 20% 20%


-
Royalties on books, literary works and
musical composition 10% 10% 25%
Prizes

Prizes, in general Prizes amounting to 20% 20% 25%


P10,000 or less are subject to the - - -
graduated income tax schedule in Sec.
24(A).
Winnings

Winnings, in general 20% 20% 25%


Resident Citizen
Filipino Non-resident foreign corporation
Dividends Payments to
Philippines Central Depository 10% 30%
(PCD) Nominees
Domestic Corporation
Micro, small, medium
enterprise

Net Taxable not exceeding P5M 20%


and total assets not exceeding
P100M excluding land, effective
July 1,2020
Non-stock and non-profit 10% (Final tax)
educational and government 1% (July 1,2020)
institution are both exempt from Condition: Unrelated trade, business or other activity exceeds 50% of
INCOME TAX. But is not relieved the total gross income derived from all sources= RCIT
to final tax.
1. GSIS
2. SSS
3. PHIC EXEMPT from Income Tax
4. HMDF (effective only April
11,2021)
5. Local water district

1
Dividends be exempted in Foreign Sourced, all should be met:

1. Dividends received by domestic corp are reinvested In the business operations within the next taxable year.
2. Used to fund capital requirement
3. Domestic corporation holds at least 20% outstanding shares of the foreign corporation.

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