(National Internal Revenue Code)
SEC. 24. Income Tax Rates.
(A) Rates of Income Tax on Individual Citizen and Individual Resident Alien of the Philippines.
(b) On the taxable income defined in Section 31 of this Code, other than income subject to tax under Subsections (B), (C) and (D) of this Section, derived for each taxable year from all sources within the Philippines by an individual citizen of the Philippines who is residing outside of the Philippines including overseas contract workers referred to in Subsection(C) of Section 23 hereof; and
(c) On the taxable income defined in Section 31 of this Code, other than income subject to tax under Subsections (b), (C) and (D) of this Section, derived for each taxable year from all sources within the Philippines by an individual alien who is a resident of the Philippines.
The tax shall be computed
in accordance with and at the rates established in the following schedule:
Over P10,000 but not over P30,000……………… P500+10% of the excess over P10,000
Over P30,000 but not over P70,000……………… P2,500+15% of the excess over P30,000
Over P70,000 but not over P140,000……..……… P8,500+20% of the excess over P70,000
Over P140,000 but not over P250,000…………… P22,500+25% of the excess over P140,000
Over P250,000 but not over P500,000…………… P50,000+30% of the excess over P250,000
Over P500,000 …………………………………… P125,000+34% of the excess over P500,000 in 1998.
For married individuals, the husband and wife, subject to the provision of Section 51 (D) hereof, shall compute separately their individual income tax based on their respective total taxable income: Provided, That if any income cannot be definitely attributed to or identified as income exclusively earned or realized by either of the spouses, the same shall be divided equally between the spouses for the purpose of determining their respective taxable income.
Three (3) years to less than (4) years - 12%; and
Less than three (3) years - 20%
Eight percent (8%) beginning January 1, 1999;
Ten percent (10% beginning January 1, 2000.
On any amount in excess of P100,000………… 10%
(2) Exception. - The provisions of paragraph (1) of this Subsection to the contrary notwithstanding, capital gains presumed to have been realized from the sale or disposition of their principal residence by natural persons, the proceeds of which is fully utilized in acquiring or constructing a new principal residence within eighteen (18) calendar months from the date of sale or disposition, shall be exempt from the capital gains tax imposed under this Subsection: Provided, That the historical cost or adjusted basis of the real property sold or disposed shall be carried over to the new principal residence built or acquired: Provided, further, That the Commissioner shall have been duly notified by the taxpayer within thirty (30) days from the date of sale or disposition through a prescribed return of his intention to avail of the tax exemption herein mentioned: Provided, still further, That the said tax exemption can only be availed of once every ten (10) years: Provided, finally, that if there is no full utilization of the proceeds of sale or disposition, the portion of the gain presumed to have been realized from the sale or disposition shall be subject to capital gains tax. For this purpose, the gross selling price or fair market value at the time of sale, whichever is higher, shall be multiplied by a fraction which the unutilized amount bears to the gross selling price in order to determine the taxable portion and the tax prescribed under paragraph (1) of this Subsection shall be imposed thereon.
(A) Nonresident Alien Engaged in trade or Business Within the Philippines. -
(2) Cash and/or Property
Dividends from a Domestic Corporation or Joint Stock Company, or Insurance
or Mutual Fund Company or Regional Operating Headquarter or Multinational
Company, or Share in the Distributable Net Income of a Partnership (Except
a General Professional Partnership), Joint Account, Joint Venture Taxable
as a Corporation or Association., Interests, Royalties, Prizes, and
Other Winnings. - Cash and/or property dividends from a domestic corporation,
or from a joint stock company, or from an insurance or mutual fund company
or from a regional operating headquarter of multinational company, or
the share of a nonresident alien individual in the distributable net
income after tax of a partnership (except a general professional partnership)
of which he is a partner, or the share of a nonresident alien individual
in the net income after tax of an association, a joint account, or a
joint venture taxable as a corporation of which he is a member or a
co-venturer; interests; royalties (in any form); and prizes (except
prizes amounting to Ten thousand pesos (P10,000) or less which shall
be subject to tax under Subsection (B)(1) of Section 24) and other winnings
(except Philippine Charity Sweepstakes and Lotto winnings); shall be
subject to an income tax of twenty percent (20%) on the total amount
thereof: Provided, however, that royalties on books as well as other
literary works, and royalties on musical compositions shall be subject
to a final tax of ten percent (10%) on the total amount thereof: Provided,
further, That cinematographic films and similar works shall be subject
to the tax provided under Section 28 of this Code: Provided,
furthermore, That interest income from long-term deposit or investment
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 Bangko Sentral ng Pilipinas (BSP) shall
be exempt from the tax imposed under this Subsection: Provided,
finally, that should the holder of the certificate pre-terminate the
deposit or investment before the fifth (5th) year, a final
tax shall be imposed on the entire income and shall be deducted and
withheld by the depository bank from the proceeds of the long-term deposit
or investment certificate based on the remaining maturity thereof:
Three (3) years to less than four (4) years - 12%; and
Less than three (3) years - 20%.
(C) Alien Individual Employed by Regional or Area Headquarters and Regional Operating Headquarters of Multinational Companies. - There shall be levied, collected and paid for each taxable year upon the gross income received by every alien individual employed by regional or area headquarters and regional operating headquarters established in the Philippines by multinational companies as salaries, wages, annuities, compensation, remuneration and other emoluments, such as honoraria and allowances, from such regional or area headquarters and regional operating headquarters, a tax equal to fifteen percent (15%) of such gross income: Provided, however, That the same tax treatment shall apply to Filipinos employed and occupying the same position as those of aliens employed by these multinational companies. For purposes of this Chapter, the term 'multinational company' means a foreign firm or entity engaged in international trade with affiliates or subsidiaries or branch offices in the Asia-Pacific Region and other foreign markets.
(D) Alien Individual Employed by Offshore Banking Units. - There shall be levied, collected and paid for each taxable year upon the gross income received by every alien individual employed by offshore banking units established in the Philippines as salaries, wages, annuities, compensation, remuneration and other emoluments, such as honoraria and allowances, from such off-shore banking units, a tax equal to fifteen percent (15%) of such gross income: Provided, however, That the same tax treatment shall apply to Filipinos employed and occupying the same positions as those of aliens employed by these offshore banking units.
(E) Alien Individual Employed by Petroleum Service Contractor and Subcontractor. - An Alien individual who is a permanent resident of a foreign country but who is employed and assigned in the Philippines by a foreign service contractor or by a foreign service subcontractor engaged in petroleum operations in the Philippines shall be liable to a tax of fifteen percent (15%) of the salaries, wages, annuities, compensation, remuneration and other emoluments, such as honoraria and allowances, received from such contractor or subcontractor: Provided, however, That the same tax treatment shall apply to a Filipino employed and occupying the same position as an alien employed by petroleum service contractor and subcontractor.
Any income earned from all other sources within the Philippines by the alien employees referred to under Subsections (C), (D) and (E) hereof shall be subject to the pertinent income tax, as the case may be, imposed under this Code.
For purposes of computing the distributive share of the partners, the net income of the partnership shall be computed in the same manner as a corporation.
Each partner shall report as gross income his distributive share, actually or constructively received, in the net income of the partnership.