TAXATION LAW EXHIBITS

Type of Income

NonResident Alien engaged in trade / business Interest from any currency Final Tax of Final Tax of Final Tax of Income Tax bank deposit & yield or any 20% 20% 20% of 20% other monetary benefit from deposit substitutes & from trust funds & similar arrangements Royalties (except on books & other literary works & musical compositions) Prizes > P10,000 Other winnings except PCSO & Lotto Royalties on books & other Final Tax of Final Tax of Final Tax of Final Tax of literary works & musical 10% 10% 10% 10% compositions Interest Income received by Final Tax of Final Tax of N/A an individual (except a 7.5% 7.5% nonresident individual) from a depositary bank under the expanded foreign currency deposit system Interest income from long Exempt from Exempt from Exempt from Exempt from term deposit or investment in tax tax tax tax the form of savings, common or individual trust fund, deposit substitutes, investment management accounts & other investments evidenced by certification in such form prescribed by the BSP Pre-termination of such Final tax on Final tax on Final tax on Final tax on certificate before the 5th year the entire the entire the entire the entire (i.e. 4 years to less than 5 income 5% income 5% income 5% income 5% years) 3 years to less than 4 years 12% 12% 12% 12% less than 3 years 20% 20% 20% 20% Cash and/or Property Final Tax on Final Tax on Final Tax on Income Tax Dividends from a domestic amount amount amount of 20% corp. or from a joint stock co., actually actually actually insurance or mutual fund received: received: received: companies & regional Beginning Beginning Beginning operating headquarters of 1/1/98 6%; 1/1/98 6%; 1/1/98 6%; multinational companies(tax on Beginning Beginning Beginning dividends shall apply only on 1/1/99 8%; 1/1/99 8%; 1/1/99 8%; income earned on/after 1/1/98) Beginning Beginning Beginning Share of an individual in the 1/1/00 10% 1/1/00 10% 1/1/00 10% distributable net income after tax of a partnership (except GPP) Share of an individual in the net income after tax of an assn., a joint account or a joint venture or consortium taxable as a corp. of w/c he is a member/co-venturer

Tax Rate For Rate For Resident NonCitizen Resident Citizen (Incl. OCW)

Tax Rate For Resident Alien

TAXATION LAW EXHIBITS

Capital gains from sale, barter, exchange or other disposition of shares of stock (of domestic corp.) not traded in the stock exchange Not over P100,000 On any amount in excess of P100,000 Capital gains from sale, exchange or other disposition of real property located in Philippines, classified as capital assets, including pacto de retro sales & other forms of conditional sales

Final tax on net capital gains realized during taxable year 5% 10% Final Tax on the gross selling price or current fair market value whichever is higher - 6%

Final tax on net capital gains realized during taxable year 5% 10% Final Tax on the gross selling price or current fair market value whichever is higher - 6%

Final tax on net capital gains realized during taxable year 5% 10%

Final tax on net CG realized during the year 5% 10% Final Tax on the gross selling price or current fair market value w/cever is higher - 6%

CG from sale/disposition of Exempt principal residence by natural CG tax persons, the proceeds of which is fully utilized in acquiring/constructing a new principal residence w/in 18 mos. from date of sale, provided historical cost/adjusted basis of sold prop be carried to the new principal residence built/acquired Commissioner. Duly notified w/in 30 days from sale Tax exemption can only be availed once every 10 years If no full utilization of proceeds of sale, such portion shall be subject to CG tax Income of Nonresident Alien 25% on gross NOT engaged in Trade or income Business except CG on shares and real property **a nonresident alien is an individual who shall come to the Philippines & stay therein for an aggregate period of 180 days during any calendar year

Final Tax on the gross selling price or current fair market value w/cever is higher - 6% from Exempt from Exempt from CG tax CG tax

Type of Income Interest on currency bank deposits & yield or any other monetary benefit form deposit substitutes & from trust funds & similar arrangement Royalties (similar within the Philippines) Interest income from a depositary bank under the expanded foreign currency deposit system (EFCDS)

Domestic Corp Final 20% tax

Resident Foreign Corp of Final 20% tax of

NonResident Foreign

Final tax 7.5 %

of Final tax 7.5 %

of Exempt from tax

TAXATION LAW EXHIBITS

CG from sale, barter, exchange or other disposition of shares of stock (of domestic corp.) not traded in the stock exchange Not over P100,000

Final tax on net capital gains realized during the taxable yr: 5% On any amount in excess of P100,000 10% Income derived by depositary bank under the Final Tax of EFCDS from foreign currency transactions with 10% local commercial banks including branches of foreign banks that may be authorized by the BSP to transact business with FCDS units & other depositary banks under the EFCDS, including interest income form foreign currency loans granted by such depository banks under said EFCDS Inter-corporate dividends (from another Exempt form domestic corp.) tax CG from sale, exchange or other disposition of Final tax on lands and/or buildings which are not used in gross selling the business of a corp. & are treated as capital price or FMV, assets whichever is higher - 6% Interest on foreign loans contracted on or before 1/1/86 Intercorporate dividends (cash/prop dividends from a domestic corporation) provided, that the country in which the nonresident foreign corporation is domiciled shall allow a credit against the tax due from the nonresident foreign corporation taxes deemed to have been paid in the Philippines equivalent to: 20% for 1997; 19% for 1998; 18% for 1999; 17% for 2000; representing the difference between the 15% tax & the 35%/34%/33%/32% income tax, respectively

Final tax on net capital gains realized during the taxable yr: 5% 10% Final Tax of 10%

Final tax on net capital gains realized during the

taxable yr: 5%

10%

Exempt form tax Final tax on gross selling price or FMV, whichever is higher - 6% Final Tax of 20% Final Tax of 15%

Type of Income Tax Rate International Air Carrier 2 % on Gross Gross Phil. Billings = amount of gross revenue derived from carriage of Phil Billings persons, excess baggage, cargo & mail originating form the Philippines in a continuous & uninterrupted flight, irrespective of the place of sale/issue & the place of payment of the ticket or passage document; Includes tickets revalidated, exchanges &/or indorsed to another intl airline if the passenger boards a plane in a port/point in the Philippines. For a flight which originates from the Philippines but transshipment of passenger takes place at any port outside the Philippines on another airline, only the aliquot portion of the cost of the ticket corresponding to the leg flown from the Philippines to the point of transshipment shall form part of the GPB International Shipping Gross Phil Billings = gross revenue whether for passenger, cargo or mail originating from the Philippines. up to final destination, regardless of the place of sale/ payments of passage of freight documents Offshore Banking Units

Final Tax of 10% on gross income from transactions with residents

TAXATION LAW EXHIBITS

Branch 15% on branch Profits remitted (connected with the conduct of its trade/business in the profits remittance Philippines.) = based on the total profits applied/earmarked for remittance without any deduction for the tax component thereof (except those registered with the PEZA) Regional/Area Headquarters of Multinational Cos. = do not earn/derive Exempt from tax income from the Philippines. & w/c act as supervisory, communication & coordinating center for their affiliates, subsidiaries or branches in the AsiaPacific Region & other foreign markets Regional Operating Headquarters of Multinational Companies = engaged 10% of in any of the following services: income a. General Administration & planning b. Business planning & coordination c. Sourcing & procurement of raw materials & components d. Corporate finance advisory services e. Marketing control & sales promotion f. Training & personnel mgt. g. Logistic services h. Research & development i. Services & product development j. Technical support & maintenance k. Data processing & communication l. Business development taxable

Type of Income Nonresident cinematographic film owner, lessor or distributor Nonresident owner or lessor of vessels chartered by the Phil. Nationals Nonresident owner or lessor of aircraft, machineries & other equipment

Tax Rate 25% of gross income 4.5% of gross rentals, lease or charter fees 7.5% of gross rentals or fees

Type of Income

Gross Income = Salaries, Wages, Annuities, Compensation, Remuneration, Other Emoluments (i.e. honoraria & allowances) received from such cos. Provided, same tax treatment shall apply to Filipinos abroad employed & occupying same positions in these companies ** Multinational company = a foreign firm/entity engaged in international trade with affiliates/subsidiaries/branch offices in the Asia Pacific Region & other foreign markets

Tax Rate For Alien Individual Employed By Regional Or Area Offshore Banking Petroleum Service Headquarters & Units Contractor & Regional Subcontractor Operating Headquarters of Multinational Cos. 15% of gross 15% of gross 15% of gross income income income