INCOME TAX RATES FOR INDIVIDUAL TAXPAYERS

Kind of taxpayer Source Tax Rate Deductions Scope

Resident Citizen Within and 5%-32% (Graduated Allowed Compensation Income,
without the Income tax rate) Business Income
Philippines
Non resident Within 5%-32% Allowed Compensation Income,
citizen Business Income
Resident Alien Within 5&-32% Allowed Compensation Income,
Business Income
Non Resident Within 5%-32% Allowed Compensation Income,
Alien (ETB) Business Income
Non Resident Within 25% Not GR: ALL INCOME
Alien (NETB) EX: Sale of shares of stock in
a domestic corporation and
real property

Special Classes It depends. not Compensation Income

1. employed by 15% preferential tax rate
ROHQ/RHQ If Resident
2. employed in Citizen: Provided,
OBU Within and
3.employed by Without 1. Position and
petroleum Function test:
service If Others: must be holding
contractor and WITHIN ONLY managerial and
sub contractor technical position
2. Compensation
Threshold Test: at
least 975 000
3. Exclusivity Test:
not a mere
consultant

NO PAIN, NO GAIN, NO TAX!

Kind of PASSSIVE INCOME (Sec 24, B (1) )
taxpayer Interest in Interest in Long term Royalties Royalties Prizes Prizes not Other
Bank Expanded Deposit (meaning, on books, exceeding exceeding Winnings
deposits, Foreign Substitutes income literary 10, 000 10, 000 (except
Deposit Currency not pre- from use works and PCSO and
Substitutes Deposit terminated of musical Lotto=
, System within 5 property) Compositio exempt)
trust funds years n
or similar
arrangeme
nts (not
loan)
Resident 20% 7.5% exempt 20% 10% 20% 5%-32% 20%
Citizen
Non 20% exempt exempt 20% 10% 20% 5%-32% 20%
resident
citizen
Resident 20% 7.5% exempt 20% 10% 20% 5%-32% 20%
Alien
Non 20% exempt exempt 20% 10% 20% 5%-32% 20%
Resident
Alien (ETB)
Non 25% exempt 25% 25% 25% 25% 25% 25%
Resident
Alien
(NETB)
Special It depends. It depends. It depends. It depends. It depends. It It It
Classes depends. depends. depends.
1. If Resident If Resident If Resident If Resident If Resident
employed Citizen, Citizen, Citizen, Citizen, Citizen,
If Resident If Resident If Resident
by Non citizen, Non Non Non Citizen, Citizen, Citizen,
ROHQ/RH resident resident resident resident resident
Non Non Non
Q citizen, alien : 7.5% citizen, citizen, citizen,
resident resident resident
2. resident resident resident resident
citizen, citizen, citizen,
employed alien, non If non- alien (ETB): alien, Non alien, non
resident resident resident
in OBU resident resident Exempt resident resident
alien, non alien, non alien, non
3.employe alien (ETB): citizen/alie alien (ETB): alien, resident resident resident
d by 20% n: exempt If Non 20% (ETB): 10%
alien alien alien
petroleum Resident (ETB): (ETB): 5%- (ETB): 20%
service If Non Alien If Non If Non 20% 32%
contractor Resident (NETB) Resident Resident If Non
and sub Alien Alien Alien If Non If Non Resident
contractor (NETB) 25% (NETB) (NETB) Resident Resident Alien
25% 25% 25% Alien Alien (NETB)
(NETB) (NETB) 25%
25% 25%

NO PAIN, NO GAIN, NO TAX!

Kind of taxpayer DIVIDENDS (income from investment)
Cash and/or Property Stock Dividend Liquidating Dividend
dividends
Resident Citizen 10% exempt 5%-32%
Non resident 10% Exempt 5%-32%
citizen
Resident Alien 10% Exempt 5%-32%
Non Resident Alien 20% Exempt 5%-32%
(ETB)
Non Resident Alien 25% Exempt 25%
(NETB)
Special Classes It depends. Exempt It depends.
1. employed by
ROHQ/RHQ If Resident Citizen, Non If Resident Citizen, Non
2. employed in OBU resident citizen, resident resident citizen, resident
3.employed by alien: 10% alien, non resident alien
petroleum service (ETB): 5%-32%
contractor and sub If non resident alien (ETB):
contractor 20% If Non Resident Alien (NETB)
25%
If Non Resident Alien (NETB)
25%

Kind of Taxpayer CAPITAL GAINS (INCOME FROM INVESTMENT ASSET)

Capital Gains from Shares of Capital Gains from Sale of Real Other Capital Gains from
Stock NOT traded in the Property (Provided it is located in bonds, debentures etc.
Stock Exchange the Philippines and classified as
capital asset)

Resident Citizen 5%-32%

Non resident 5%-32%
citizen
Resident Alien 5%-32%
Non Resident Alien Not over 100,000 = 5% 5%-32%
(ETB)
Non Resident Alien Over 100,000 = 10% 6% (on gross income) 25%
(NETB)
Special Classes (on net capital gains) It depends.
1. employed by
ROHQ/RHQ If Resident Citizen, Non
2. employed in OBU resident citizen, resident
3.employed by alien, non resident alien
petroleum service (ETB): 5%-32%
contractor and sub
contractor If Non Resident Alien (NETB)
25%

NO PAIN, NO GAIN, NO TAX!

NO PAIN, NO GAIN, NO TAX!