INCOME TAXATION OF INDIVIDUALS: ALIENS ALIENS NON-RESIDENT ALIEN ENGAGED IN NOT ENGAGED BUSINESS IN BUSINESS

Sec 22 (G) / Sec 25 (A)(1) An individual whose residence is not within the Philippines and who is not a citizen thereof but stays in the Philippines for an aggregate period of more than 180 days during any calendar year Sec 25 (A) taxable income earned from all sources within the Philippines 5% - 34 % in 1998 5% - 33% in 1999 5% - 32% in 2000 5% - 32% thereafter Sec 22 (G) An individual whose residence is not within the Philippines and who is not a citizen thereof but stays in the Philippines for an aggregate period of or less than 180 days during any calendar year Sec 25 (B) gross income from all sources within the Philippines 25%FT

RESIDENT ALIEN
Definition Sec 22 (F) An individual whose residence is within the Philippines and who is not a citizen thereof.

Tax Code Reference Tax Base

Sec 24 taxable income earned from all sources within the Philippines 5% - 34 % in 1998 5% - 33% in 1999 5% - 32% in 2000 5% - 32% thereafter

Tax Rates - In general

Tax Rates - On Passive Income (subject to Final Tax [FT]) Interest on currency bank deposit and yield or 20% FT any other monetary benefit from deposit substitutes and from trust fund and similar arragements Interest from a depository bank under the 7.5% FT expanded foreign currency deposit system

20% FT

25% FT

EXEMPT Sec 27(D)(3) Sec 2.27(c)RR 10-98 EXEMPT

EXEMPT Sec 27(D)(3) RR 10-98 25% FT

Interest on long term deposit or investment [Sec 22(FF)] in the form of savings, common or individual trust funds, deposit substitutes, investment management accounts and other investments evidenced by certificates in such form prescribed by the BSP Pre-terminated long term investment (should actually based on expired term)

EXEMPT

4 yrs to < 5 years -- 5% 5 yrs to < 5 years -3 years to < 4 years -- 5% 3 12% years to < 4 years -Less than 3 years -12% 20% Less than 3 years -20%

25% FT

INCOME TAXATION OF INDIVIDUALS: ALIENS ALIENS NON-RESIDENT ALIEN ENGAGED IN NOT ENGAGED BUSINESS IN BUSINESS
20%FT EXEMPT 20% FT 10% FT 25% FT 20% FT 5% - 34%, 33%, 32% EXEMPT 25% FT EXEMPT 25% FT 25% FT 25% FT 25% FT 25% FT EXEMPT Sec 27(D)(3) RR 10-98 25% FT EXEMPT 25% FT

RESIDENT ALIEN
Other interest income derived within the Philippines Other interest income derived outside the Philippines Royalties - in general Royalties on books, other literary works and musical compositions Royalties on cinematographic films and similar works [Sec 28(B)(2)] Prizes - more than P10,000 Prizes - P10,000 or less Prizes - PCSO and Lotto winnings 5% - 34%, 33%, 32% EXEMPT 20% FT 10% FT 20% FT 20% FT 5% - 34%, 33%, 32% EXEMPT

Other prizes or winnings within the Philippines

20% FT

20% FT

Other prizes or winnings outside the EXEMPT EXEMPT Philippines Cash and/or Property Dividends from a 6% FT beginning Jan 1, 20% FT domestic corp or share in distributable net 1998 income after tax of a partnership (except a 8% FT beginning Jan 1, general professional partnership), association, 1999 10% FT joint account, or joint venture or consortium beginning Jan 1, 2000 taxable as corporation Other Cash and/or Property Dividends (e.g. 5% - 34%, 33%, 32% 5% - 34%, 33%, 32% from a foreign corp in the Philippines) Other Cash and/or Property Dividends (e.g. from a foreign corp NOT in the Philippines) On domestic shares of stock not traded through local stock exchange (based on net capital gains) On shares of stock traded through local stock exchange (based on gross selling price) [Sec 127(A) & (D)] On real property (based on gross selling price or FMV whichever is higher) - In general On real property sold to the government - subj to option On real property sold to acquire or construct new principal residence
Atty. Marissa O. Cabreors (Ateneo School of Law)

25%FT

EXEMPT

EXEMPT

EXEMPT

5% / 10% FT

5% / 10% FT

5% / 10% FT

1/2 of 1% FT (Percentage Tax) 6% FT

1/2 of 1% FT (Percentage Tax) 6% FT

1/2 of 1% FT (Percentage Tax) 6% FT

6% FT or 5% - 34% 33%, 32% EXEMPT subj to certain conditions

6% FT or 6% FT or 5% - 34% 33%, 32% 5% - 34% 33%, 32% N/A RR 13-99 N/A RR 13-99