INCOME TAXATION OF INDIVIDUALS: ALIENS

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

Tax Rates - In general

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 - 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

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

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 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 (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 25 (B)
gross income from
all sources within
the Philippines

20% FT

25% FT

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

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

EXEMPT

25% FT

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

25% FT

INCOME TAXATION OF INDIVIDUALS: ALIENS

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

Other prizes or winnings within the Philippines

ALIENS
NON-RESIDENT ALIEN
ENGAGED IN
NOT ENGAGED
BUSINESS
IN BUSINESS

5% - 34%, 33%, 32%

20%FT

25% FT

EXEMPT

EXEMPT

EXEMPT

20% FT
10% FT

20% FT
10% FT

25% FT
25% FT

20% FT

25% FT

25% FT

20% FT
5% - 34%, 33%, 32%

20% FT
5% - 34%, 33%, 32%

25% FT
25% FT

EXEMPT

EXEMPT

20% FT

20% FT

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

EXEMPT

Other Cash and/or Property Dividends (e.g.

from a foreign corp NOT in the Philippines)

25% FT

25%FT

EXEMPT

EXEMPT

EXEMPT

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

5% / 10% FT

5% / 10% FT

5% / 10% FT

1/2 of 1% FT
(Percentage Tax)

1/2 of 1% FT
(Percentage Tax)

1/2 of 1% FT
(Percentage Tax)

6% FT

6% FT

6% FT

On real property sold to the government - subj

to option

6% FT or
5% - 34% 33%, 32%

On real property sold to acquire or construct

new principal residence
Atty. Marissa O. Cabreors (Ateneo School of Law)

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