Normal Corporate Income Tax

Kind of Corporation Source Tax Rate Taxable Base Notes

GR: All Taxable
Domestic Corporations income
means:
Except: the pertinent
Proprietary Educational, items of gross
Non Profit Hospital, income
SSS, PHIC, LWD & PCSO specified in
Depository Bank (FDCU) this Code, less
Sec. 30 Within and Without the 30% Taxable Income the
BSP Philippines deductions
PEZA(Philippine and/or
Economic Zone personal and
Authority) registered additional
companies granted with exemptions, if
tax incentives, any,
Brgy. Microbusiness authorized for
Enterprise, such types of
BCDA (Bases Conversion income by this
and Development Code or other
Authority) registered special laws.
companies granted with
tax incentives e.g. SBMA
(Subic Bay Metropolitan
Authority),
Registered with the
Board of Investments
GR: Resident Foreign BRANCH OF A
Corporation FOREIGN
CORPORATION
EX: Within the Philippines 30% Taxable Income IN THE
International Carriers, PHILIPPINES
Offshore Banking Units and is duly
Regional Area registered
Headquarters, with the SEC
Regional Operating
Headquarters,
Foreign Currency Deposit
System,
PEZA,
CDC,
SBMA,
Those which entered into
government petroleum
contracts

Gross income
GR: Non resident Foreign Within the Philippines 30% Gross Income meaning:
Corporation (without deductions) Except when
otherwise
1
 provided in
this Title,
gross income
means all
income
derived from
whatever
source
Owner of
Special NFRC vessels
Gross Income meaning:
Cinematographic Owners Within the Philippines 1. Registered
25% in MARINA

2. Chartered
4.5 % Gross Rentals by Philippine
Owner of Vessels Nationals
Chartered by Filipinos
Owner of
7.5% Gross Rentals Equipment:
Owner of Aircrafts, -need not be
equipment or machine related to
aircraft
machineries

INTERCORPORATE DIVIDENDS
Kind of Corporation Source Tax Rate Taxable Base Notes
Domestic Corporations Within and without Received from Amount of dividends
Philippines Domestic
Corporations:
Exempt

Received from Foreign

Corporation:
30%

Resident Foreign Within the Philippines If received from DC: Amount of dividends
Corporation Exempt

If received from FC:

Exempt

(Reason: it is income

2
without PH)

3
Non Resident Foreign Within Philippines If received from DC: Amount of dividends
Corporation 15% (if Tax Sparing
Rule applies)

30% (If not)

20% (in case of

Foreign Loan)

If received from FC:

Exempt

ROYALTIES, PRIZES
Kind of Corporation Source Tax Rate Taxable Base Notes
Domestic Corporation Within and Without From Domestic
Philippines Royalties: Gross Income
GR: 20%

From Foreign
Royalties:
30%

Prizes:
30%
Resident Foreign Within Philippines From Domestic Gross Income
Corporation Royalties:
GR: 20%

From Foreign
Royalties:
Exempt

Prizes:
30%
NRFC Within Philippines From Domestic Gross Income
Royalties:
GR: 30%

From Foreign
Royalties:
Exempt

Prizes:
30%

4
 INTERESTS ON BANK DEPOSITS, DEPOSIT SUBSTITUTES, LTDIC, LOAN ETC.
Kind of Corporation Source Tax Rate Taxable Base Notes

Bank deposits: Amount of interest

Domestic Corporation Within and Without
Philippines In PH currency:

20%

In Foreign currency:

7.5%

Long Term Deposit

Investment
Certificate:
20%

Loan:
30%
Bank deposits:

Resident Foreign In PH currency: Amount of interest

Corporation Within Philippines
20%

In Foreign currency:

7.5%

Long Term Deposit

Investment
Certificate:
20%

Loan:
30%
Bank deposits:

Non resident Foreign Within Philippines In PH currency: Amount of interest

Corporation 30%

In Foreign Currency:
Exempt
(Reason: Non
Resident)

Long Term Deposit

Investment
5
 Certificate:
30%

Interest on Foreign
Loan:
20%

CAPITAL GAINS TAX

SALE OFLAND AND/OR BUILDING
Kind of Corporation Source Tax Rate Taxable Base Notes

FMV =
assessor’s
Domestic Corporation Within and Without Of lands or buildings: value or zonal
Philippines 6% Gross Selling Price or value
Fair market value,
whichever is higher Rules on
Presumed
Gain
1. In case of
Shares of
Stock

If selling price
is less than
FMV =
deemed
donation

2. In case of
Land and or
building
If selling price
is less FMV=
not deemed
donation
(reason: tax
base is always
the higher
between the
two)
Resident Foreign n/a N/A (reason: they NOTE: Based
Corporation cannot own a land) on recit, Atty
Bravo believes
that they are
subject to 6%
CGT???
Non resident foreign n/a N/A NOTE: Based
Corporation (reason: they cannot on recit, Atty
6
 own a land) Bravo believes
that they are
subject to 6%
CGT???
SALE OF SHARES OF STOCK
Kind of Corporation Source Tax Rate Taxable Base Notes
Domestic Corporations Within and without DC
Philippines (In Shares of Stock 1)
not listed in Stock
exchange or 2)listed in
Stock exchange but Net Capital Gains Net Capital
not traded in the Gains
stock exchange) = Gross Selling
price – cost
5%= not over 100,000

10%= over 100,000

(In Shares of Stock

traded in the Stock Stock
exchange:) Transaction
Gross Selling Price Tax (not part
½ of 1% of the
syllabus)
FC: Include net capital
30% gains in Taxable
Income

Resident Foreign Within Philippines DC:

Corporation Net Capital Gains
(In Shares of Stock 1)
not listed in Stock
exchange or 2)listed in
Stock exchange but
not traded in the
stock exchange)

5%= if not over

100,000

10%= if over 100,000

(In Shares of Stock

traded in the Stock
exchange:) Gross Selling Price

½ of 1%

7
Non Resident Foreign Within Philippines DC: Net Capital Gains
Corporation
(In Shares of Stock 1)
not listed in Stock
exchange or 2)listed in
Stock exchange but
not traded in the
stock exchange)

5%= not over 100,000

10%=over 100,000

PREFERENTIAL TAX RATE

Kind of Corporation Source Tax Rate Taxable Base Notes
Domestic Corporation Within and Without Ph 30%

Proprietary stock/ non If unrelated activity

profit Educational does not exceed 50%: Net Taxable Income
10%

If unrelated activity
exceeds 50%:
30%
Non Profit Hospital If unrelated activity
does not exceed 50%:
10%

If unrelated activity
exceeds 50%:
30%
GOCCs (SSS, PHIC, LWD & Exempt
PCSO)

Depository Bank (FDCU) Transactions with:

Amount of interest
Nonresidents, OBUs in
the Ph, local
commercial banks
including branches of
foreign banks and
other depositary
banks under the
8
 EFCDS= exempt

Residents other than

depositary banks
under the EFCDS=
10%
Resident Foreign 30% Taxable income
Corporation
Special RFC Reason: not
Within Philippines Exempt engaged in
RHQ business here
ROHQ 15% Taxable income
OBU Transactions with
non-residents = Income from Foreign
exempt Currency Transactions
(FCT)
Transactions with
residents = 10%
FCDU Transactions with
non-residents = Income from Foreign
exempt Currency Transactions
(FCT)
Transactions with
residents = 10%
International Carrier GR: 2.5% Gross Philippine
Ex: depending on type Billings There must be
of IC, some portions actual
are exempt Offline Carrier=aliquot “carriage”
portion of leg flown
from Ph to point of Gross
transshipment Philippine
Billings refers
Online Carrier- always to the amount
taxable of gross
revenue
derived from
carriage of
persons,
excess
baggage,
cargo and mail
originating
from the
Philippines in
a continuous
and
uninterrupted
flight,
irrespective of
the place of
sale or issue
9
and the place
of payment of
the ticket or
passage
document:
Provided, That
tickets
revalidated,
exchanged
and/or
indorsed to
another
international
airline form
part of the
Gross
Philippine
Billings if the
passenger
boards a plane
in a port or
point in the
Philippines:
Provided,
further, That
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 Gross
10
 Philippine
Billings.
International Shipping GR: 2.5% Gross Philippine "Gross
Ex: depending on type Billings Philippine
of IC, some portions Billings"
are exempt means gross
Outbound = subject to revenue
tax whether for
passenger,
Inbound = exempt, as cargo or mail
a rule originating
from the
Philippines up
to final
destination,
regardless of
the place of
sale or
payments of
the passage or
freight
documents.

Lacking (not fully discussed)

MCIT

BRPT

IAET

11