TYPE OF TAXES INCOM E TAX

COUNTRIES PHILIPPINES Income of the residents of the Philippines is taxed progressively up to the rate of 32% Taxable Income Tax Rate PhP 0 - PhP 10,000: 5% PhP 10,000 - PhP 30,000: PhP 500 10% PhP 30,000 - PhP 70,000: PhP 2,500 15% PhP 70,000 - PhP 140,000: PhP 8,500 20% PhP 140,000 - PhP 250,000: PhP 22,500 25% PhP 250,000 - PhP 500,000: PhP 50,000 30% Over PhP 500,000: PhP 125,000 32% The above rates also apply to individuals who derive income from business (including capital gains from the sale transfer or exchange of shares in a foreign corporation) or from the practice of a profession. Individuals occupying managerial and highly CHINA Income of the residents of the CHINA is taxed progressively up to the rate of 32% CHINA INDIVIDUAL INCOME TAX(montly) Taxable Income Tax Rate % CNY 0-500 5% CNY 501-2,000 10% CNY 2,001-5,000 15% CNY 5,001-20,000 20% CNY 20,001-40,000 25% CNY 40,001-60,000 30% CNY 60,001-80,000 35% CNY 80,001-100,000 40% Above CNY 100,000 45% THAILAND INDIVIDUAL INCOME TAX(annual) Taxable Income (Baht) 0 - 150,000 150,001 - 500,000 500,001 - 1,000,000 1,000,001 4,000,000 4,000,001 and over Tax Rate Exempt 10% 20% 30% 37% VIETNAM THAILAND

VIETNAM INDIVIDUAL INCOME TAX Tax Taxable Income per year (VND) rate 5 VND 0 - 60,000,000 VND 60,000,000 - 120,000,000 % 10%

VND 120,000,000 - 216,000,000

15%

* Monthly taxable income = salaries/wages/allowances fixed monthly deduction. * Monthly tax payable = [(taxable income tax rate) quick calculation deduction]. * Personal fixed monthly deduction to individual Chinese taxpayer is Rmb 2,000 (Rmb 1,600 before 1 March 2008). * Those taxpayers who are not domiciled in China but derive wages and salaries from

VND 216,000,000 - 384,000,000 VND 384,000,000 - 624,000,000 VND 624,000,000 - 960,000,000 Above VND 960,000,000

20% 25% 30% 35%

Residents - Other tax rates on resident individuals Income from capital investment,

Basis Thailand residents and nonresidents are taxed on their Thailand-source income. Thai residents are taxed on their foreignsource income only if the income is brought into Thailand in the year it is derived (repatriation in later years is exempt from personal income tax).

technical positions employed by RHQs, ROHQs, multinational companies, offshore business units and petroleum service contractors/subcontractors are taxed at 15% on their gross income. TAXABLE INCOME RESIDENT CITIZENS Resident citizens of the Philippines are taxed on all their net income derived from sources within and without the Philippines. ALIEN INDIVIDUALS An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources within the Philippines. Resident aliens are taxed in the same manner as resident citizens on income sourced within the Philippines. Tax is generally withheld in sufficient amounts from salary and wages to satisfy the final tax liability. If not, then the balance must be paid when filing the return, which is required on or before 15 April of the year following the year of income. In some cases, income tax liability may be paid in two equal installments. Basis Resident citizens are taxed on worldwide income; resident aliens and nonresidents pay tax only on Philippine

sources in China are entitled to a total statutory deduction of Rmb 4,800 per month BUSINESS INCOME Net income derived from production and business operations by industrial or commercial households (i.e. annual gross income less business costs, expenses and losses) shall be taxable at the following rates: Annual taxable income (Rmb) (%) 0 5,000 5,001 10,000 10,001 30,000 30,001 50,000 50,001 or above Tax rate 5 10 20 30 35

copyright and franchise activities 5% Income from transfer of capital 20% Income from transfer of real estate 25% Non-residents - Other tax rates on nonresident individuals Income from business and production of goods 1% Income from business and production of services 5% Manufacturing, construction, transport and other activities 2% Salary and wages 20% Income from capital investment 5% Transfer of capital 0.1% Transfer of real estate 2%

Residence An individual is resident in Thailand for personal income tax purposes if present for 180 days or more in a given (calendar) tax year. Tax Filing status A married couple may opt for a joint or separate assessment on employment income. If the wife derives passive income, it must be included in the husband's return even if the couple elects to file separately. Taxable income Employment income, including most employmentrelated benefits, is subject to personal income tax. Profits derived from the carrying on of a trade or profession generally are taxed under the personal income tax regime. Dividends and interest are taxed at source at a rate of 10% and 15%, respectively. An individual can elect not to report such investment income on the annual personal income tax return for the tax year. Basis Thailand residents and nonresidents are taxed on their Thailand-source income. Thai residents are taxed on their foreignsource income only if the

OTHER TAXABLE INCOME FOR IIT PURPOSE (a) Net income derived from royalties, remuneration for labour services or manuscripts, and income from letting property. That is: (i) Where the income from a single payment does not exceed Rmb 4,000 (ii) Net income = Gross income Rmb 800

source income. However, foreign individuals (iii) Where the income from a single can avail themselves of preferential tax payment exceeds Rmb 4,000 treatment or may be exempt from income (iv) Net income = Gross income 80%. tax under applicable tax treaties, subject to a (b) Net income derived from the assignment confirmatory ruling from the BIR. of property (i.e. the gain from assignment less the original value of the property and Residence All citizens are ordinarily reasonable expenses). considered resident unless they meet the (c) Gross income derived from interest, requirements to be deemed nonresident. dividends and bonuses, or contingency The residence of foreign workers is generally income and other income. Such income is established when the aggregate length of taxed at a flat rate of 20%. stay in any calendar year exceeds 180 days. Tax Filing status Married couples in the Philippines who do not derive income purely from compensation always must file a joint income tax return. Taxable income Taxable personal income is all income less allowable deductions and personal exemptions. It includes compensation, business income, capital gains (arising from the sale of real property and share transactions), dividends, interest, rents, royalties, annuities, pensions and a partner's distributive share of the net income of general professional partnerships. Minimum wage earners (MWEs) are exempt from the payment of income tax on their taxable income. Holiday pay, overtime pay, night shift differential pay and hazard pay received by such MWEs also is exempt.

Copyright and franchise activities 5% Lottery wins, inheritance and gifts which are securities, capital or assets 10% All residents and non-residents are subject to Personal Income Tax in Vietnam.

income is brought into Thailand in the year it is derived (repatriation in later years is exempt from personal income tax). Residence An individual is resident in Thailand for personal income tax purposes if present for 180 days or more in a given (calendar) tax year. Tax Filing status A married couple may opt for a joint or separate assessment on employment income. If the wife derives passive income, it must be included in the husband's return even if the couple elects to file separately. Taxable income Employment income, including most employmentrelated benefits, is subject to personal income tax. Profits derived from the carrying on of a trade or profession generally are taxed under the personal income tax regime. Dividends and interest are taxed at source at a rate of 10% and 15%, respectively. An individual can elect not to report such investment income on the annual personal income tax return for the tax year.

A resident is liable to pay tax on income sourced in Vietnam as well as on the Basis A resident individual, i.e. an portion of income from foreign sources individual "domiciled" in the Chinese (except for non-taxable income, Mainland, is subject to individual income tax including on his/her worldwide income. Most income from real estate transferred nonresidents or residents of less than 1 year between a husband, wife and bloodare subject to personal tax only on income relations, sourced in China. Non-domiciled individuals scholarships, and overseas staying in China for more than 1 year but remittances). less than 5 consecutive full tax years are subject to individual income tax on Deductions are available for family Chinasource income, plus foreign income considerations for residents, comprising actually borne by Chinese entities or children establishments. under 18, unemployed spouses and elderly and unemployed parents. Non-domiciled individuals staying in China for more than 5 consecutive full tax years Individuals are responsible for selfare taxed on worldwide income. declaration and payment of tax. Residence The test for residence in China Tax Basis Vietnamese residents are

is whether an individual is usually or habitually residing in China due to household, family or economic involvement. Filing status Each individual must file a separate return; joint filing is not permitted. All individuals, except for PRC nationals, generally must register with the Chinese tax authorities as soon as they become liable to individual income tax. Taxable income Taxable income comprises employment income; production and business income; income derived from contracting for, or leasing operations of, enterprises or institutions; dividends and bonuses; interest income (except interest from bank deposits); royalty income; income from leasing property; income from the assignment or transfer of property; contingency income; unemployment insurance premiums paid by an enterprise in excess of the premium rates specified by law; and other income specified as taxable by the finance department of the State Council

taxed on their worldwide income; nonresidents are taxed only on Vietnamese-source income. Residence An individual is resident if he/she: (1) spends 183 days or more in the aggregate in a 12-month period in Vietnam starting from the date the individual arrives in Vietnam; (2) maintains a residence in Vietnam; or (3) has leased a residence for 90 days or more in a tax year. Tax Filing status Individuals must file separate tax returns; joint tax filing is not permitted. Taxable income Employment income, including most employment benefits, is taxable. As from 1 January 2009, dividends (except for government bonds), interest (except for bank deposits and life insurance), capital gains from securities trading, private business income and other income from franchising, inheritance, the transfer of land use rights, and gifts/winnings or prizes are taxable in Vietnam. Profits derived from the carrying on of a trade or profession generally are taxed in the same way as profits derived by companies.

Corpor ate Tax

Philippines Corporate Tax

China Corporate Tax

Vietnam Corporate Taxation

Thailand Corporate Tax Rates

Corporate income tax rate both for domestic The standard corporate income tax rate in and resident foreign corporations in China is 25%. A special tax rate Philippines is 30%. of 20% applies to small-scale enterprises, also a special 15% tax rate applies to Company tax is payable by domestic state-encouraged new high-technology companies on all income derived from enterprises. sources within and without the Philippines. Foreign corporations, whether resident or nonresident, are taxable only on income FEDERAL TAXES AND LEVIES derived from sources within the Philippines. ENTERPRISE INCOME TAX (EIT) However, non-resident foreign corporations are, in certain circumstances, subject to a The passage of the Unified Corporate final withholding tax on passive (investment) Income Tax Law ('the New Law') on 16 incomes at rates generally higher than the March 2007 unified the income tax rate for applicable tax rates applying to domestic and domestic enterprises and foreign invested resident foreign corporations. Resident enterprises (FIEs) and streamlined tax companies are those that are created or incentives effective from 1 January 2008. All organised under the laws of the Philippines FIEs (i.e. sino-foreign joint ventures and or foreign companies duly licensed to wholly owned foreign enterprises) and engage in trade or business in the foreign enterprises (FEs) with or without Philippines. establishments in China are now taxed at the same as domestic enterprises. The corporate income tax rate both for Enterprise Income Tax is charged at the domestic and resident foreign corporations is rate 25% on taxable profits in a calendar 30% based on net taxable income. Excluded year. from the income tax are dividends received from domestic corporations; interest on Subject to a preferential tax rate of 20% for Philippine currency bank deposit and yield or qualified enterprises with small profits, both any other monetary benefit from deposit domestic companies and foreign invested

The general corporate income tax rate Thailand corporate tax rate in Vietnam is 25%. is 30% for net taxable profits. Tax rate for enterprises operating in the oil and gas and other precious natural resources sectors ranges from 32% to 50%, depending on the project. In 2009, small and medium sized enterprises (with charter capital of less than VND10 billion or fewer than 300 employees) were entitled to a reduction of 30% of their Corporate Income Tax. Other exemptions or reductions in Corporate Income Tax are as stipulated in the relevant legal documents. Certain public limited companies and small and medium-size limited companies are subject to lower progressive rates up to a certain amount of net taxable profits:

Small company tax rates: - Net profit not exceeding 1 million baht 15% - Net profit over 1 million baht but not exceeding 3 million baht 25% - Net profit exceeding 3 million Residence "Residence" is not defined, baht but a corporation is generally 30% understood to be resident if it is incorporated in Vietnam. Companies listed in Stock Exchange of Thailand (SET) Tax Basis Residents are taxed on - Net profit for first 300 million worldwide income; nonresidents are baht taxed only on Vietnamese-source 25% income. Foreign-source income derived - Net profit for the amount by residents is subject to corporation exceeding 300 million tax in the same way as Vietnamese- baht 30% source income. Companies newly listed in Stock

substitutes and from trust funds and similar enterprises will be assessed at a unified tax arrangements; and other passive income rate of 25%. All FIEs (and those foreign previously subject to final taxes. enterprises having their head offices in China) are subject to Enterprise Income Tax Interest income derived from the expanded on their worldwide profits. Foreign foreign currency deposit is subject to a final enterprises which have their permanent tax of 7.5%. All other interest earned by establishments (PEs) in China are subject to domestic and resident foreign corporations is Enterprise Income Tax on profits derived subject to a 20% final withholding tax. from the permanent establishments. Foreign enterprises without any permanent Regional operating headquarters are taxed establishment in China are subject to at 10% on taxable income. Enterprise Income Tax on China-source income only. Special economic zone enterprises duly registered with the Philippines Economic The New Law introduces a wider concept of Zone Authority are taxed at the rate of 5% management in determining tax residency. on gross income in lieu of national and local A company will be recognised as a China tax taxes, except real property tax. The term resident if it is incorporated in China or its 'gross income' refers to gross sales or gross place of effective control and management revenue derived from the business activity is in China. The tax year in China is the within the Ecozone, net of sales discount, calendar year (i.e. year ended 31 sales returns and allowances, less the cost of December). sales or direct costs but before deduction is made for administrative expenses and incidental losses during the taxable period. Philippines tax year runs for the calendar year although approval of the Commissioner of Internal Revenue can be obtained for the adoption of a fiscal year. Tax is payable in four quarterly instalments, with every corporation filing quarterly income tax

Taxable income Tax is imposed on a company's profits, to include the profits of affiliates and branches (dependent units). Taxable revenue includes income from the sale of products, the provision of services, the leasing or sale of assets, the transfer of shares, joint venture operations with other economic entities and financial operations.

Exchange Profit

of

Thailand

(SET) Net 25%

Company newly listed in Market for Alternative Investment (MAI) Net Profit for first 5 accounting 20% Taxation of dividends Dividends paid - Net Profit after first 5 accounting by a company in Vietnam to its periods corporate shareholders are not subject 30% to tax. Bank deriving profits from Capital gains tax There is no separate International Banking Facilities (IBF) capital gains tax; gains are taxed at the Net standard corporate tax rate of 25%. Profit The transfer value is based on the 10% actual price according to the transfer contract. A deemed fair market value Foreign company engaging in will be used if no contract price is international transportation available or if the price stated in the Gross contract is deemed to be not at arm's receipts length. 3% Foreign company not carrying on business in Thailand receiving dividends from Thailand Gross receipts 10%

returns for the first three quarters and tax being payable 60 days following the end of each quarter. A final return covering the full year is required to be lodged 105 days after year end at which time the balance of tax, after deducting the prior three instalments and creditable withholding tax, is payable. Any excess is refundable or can be claimed as tax credit against future tax payments. MINIMUM CORPORATE INCOME TAX

Foreign company not carrying on business in Thailand receiving other types of income apart from dividend from Thailand Gross receipts 15% Foreign company disposing profit out of Thailand Amount disposed 10% Profitable association and foundation Gross receipts 2% or 10%

A minimum corporate income tax of 2% based on the gross income is imposed beginning on the fourth taxable year immediately following the commencement of the business operation of the corporation. Any excess of the minimum corporate income tax over the normal income tax may be carried forward and credited against the normal income tax for the three taxable years immediately succeeding. The computation and the payment of MCIT shall likewise apply at the time of filing of the quarterly corporate income tax. The term 'gross income' for the purpose of applying the minimum corporate income tax shall mean the gross sales less sales returns, discounts and allowances and cost of goods sold.

Residence A limited company is considered resident if it is incorporated in Thailand or registered as a partnership with the Ministry of Commerce. Basis Residents are taxed on worldwide income; nonresidents are taxed only on Thailand-source

The Secretary of Finance, however, may suspend the imposition of the minimum corporate income tax on any corporation which suffers losses on account of prolonged labour dispute, or because of force majeure or because of legitimate business reverses. CAPITAL GAINS TAX ON SHARES OF STOCK The net capital gains from the sale of shares of stock of a domestic corporation not listed and traded through the Philippine Stock Exchange are taxed on a per transaction basis at the rate of 5% on the first PhP 100,000 and 10% in excess of said amount. On the other hand, the sale of shares of stock of a domestic corporation through the Philippine Stock Exchange or through the initial public offering is subject to a percentage tax on the transaction at the rate of 1/2 of 1% of the selling price. Any gain or loss from said transaction is not considered for income tax purposes. CAPITAL GAINS TAX ON SALE OF REAL PROPERTY The sale of land, building and other real properties classified as capital asset is subject to 6% final capital gains tax based

income. Foreign-source income derived by resident taxpayers is subject to corporate income tax in the same manner as Thailandsource income. Registered foreign branches and partnerships are taxed, but only on Thailand-source income. Non-registered entities with a taxable presence in Thailand also are taxed in the same manner as limited companies on Thailandsource income. Taxable income Corporate income tax is imposed on an entity's net profits, which normally consist of business/trading income, passive income and capital gains/losses. Expenses that relate specifically to generating profits for the business or the business itself may be deducted in determining net taxable profits. Taxation of dividends Dividends paid by a limited company to another limited company may be exempt from corporate income tax if certain conditions are satisfied. Otherwise, 50% of the dividends are subject to corporate income tax at the normal rate. Any tax withheld on

on the gross selling price, current fair market value or zonal value at the time of sale, whichever is higher. IMPROPERLY TAX ACCUMULATED EARNINGS

the payment of the dividends may be used to offset the final corporate income tax due for the company in the relevant tax year. In certain cases, dividends received from a foreign affiliate are exempt from further corporate income tax in Thailand.

The 10% improperly accumulated earnings tax (IAET) is imposed on improperly accumulated taxable income earned by closely-held corporations. The term 'closelyheld corporation' refers to corporations where at least 50% of the capital stock or voting power is owned directly or indirectly by or for not more than 20 individuals. The tax base of the 10% IAET is the taxable income of the current year plus income exempt from tax, income excluded from gross income, income subject to final tax, and the amount of net operating loss carryover deducted. It is reduced by income tax paid for the current year, dividends actually or constructively paid, and amount reserved for the reasonable needs of the business. The IAET does not apply to the following corporations: (a) Banks and other nonbank financial intermediaries

(b) Insurance companies (c) Publicly-held corporations (d) Taxable partnerships (e) General professional partnerships (f) Non-taxable joint ventures, (g) Duly registered enterprises located within the special economic zones declared by law which enjoy payment of special tax rate on their registered operations or activities in lieu of other taxes, national or local. Sales taxes / Value Added Tax (VAT) A 12% value added tax (VAT) of the gross selling price or gross value in money of the goods is imposed to all importation, sale, barter, exchange or lease of goods or properties and sale of services. China Value Added Tax Rates - The VAT standard rate is 17%, with a lower rate of 13% applying to certain foods, goods, books and utilities. As from 1 January 2010, a 3% rate applies under the smallscale taxpayer scheme (reduced from 6% or 4%). Lower rates apply to certain transactions involving used goods. Exports are generally zero-rated. As from 1 January 2009, input VAT incurred on the purchase/construction of fixed assets may be credited against output VAT. Vietnam vat (Value Added Tax) Thailand vat (Value Added Tax) Rates Rates The general rate of VAT in Vietnam The standard VAT rate in Thailand which applies to goods and services is 7%. A 0% rate applies to is 10%. A reduced rate of 5% also exported goods and services. applies to certain goods and services. At the Sept 22 annual symposium of Other than Value Added Tax, Vietnam the Bank of Thailand, a proposal also levies a Special Sales Tax (SCT) was made to raise the VAT from 7% which is applicable to goods and to 10%, in order to increase tax services classified as luxury. The rates revenues. This could be postponed are from 10% to 70% for SCT (refer to depending on economic 'Special Sales Tax' section above). circumstances. The VAT rate is calculated based on the Taxable transactions VAT is levied selling price (exclusive of tax). on the sale of goods and the provision of services. Taxable transactions VAT and Special Consumption Tax (SCT) are levied on VAT Registration The registration

VAT

'Gross selling price' means the total amount of money or its equivalent that the purchaser pays or is obligated to pay to the seller in consideration of the sale, barter or exchange of the goods or properties, excluding the value added tax. The excise tax, if any, on such goods or properties shall form part of Registration A company is required to the gross selling price register with the local tax authorities at the time of incorporation to have its status recognised. If the taxpayer's status is approved, VAT taxpayers (other than smallscale VAT taxpayers) must register for VAT

purposes with the tax authorities. A non- the sale of goods and the provision of Chinese resident company is not allowed to services. register for VAT. Registration All organisations and Filing and payment VAT returns must be individuals carrying on the production or filed each calendar month and submitted trading of taxable goods and services in before the 15th of the following month Vietnam must register for VAT. Each Taxpayers importing goods must pay tax branch or outlet of an enterprise must within 15 days after the issuance of the tax register separately and declare tax on payment certificate by Customs. its own activities. Transfers of goods between branches may be subject to Other China imposes 2 other notable VAT. Registration for tax payment is indirect taxes: the Business Tax and the required within 10 days of a Consumption Tax. The Business Tax is a corporation's establishment date. VAT non-recoverable turnover tax imposed on payable by a corporation is calculated the provision of certain services, the by the tax credit method or calculated assignment of intangible assets and the sale directly on the basis of added value. of immovable property within China. Tax Rates are 3%-5% withheld at source for Filing and payment Monthly filing and most services, although a 20% rate applies payment of outstanding VAT must be to entertainment. made on or before the 20th of the following month. Once the taxpayer's tax status has been approved by the tax authorities, the company should register as a Business Tax payer. Returns must be filed each calendar month and submitted before the 15th of the following month. The Consumption Tax applies to alcohol,

revenue threshold for VAT must exceed THB 1.8 million for any given tax period. Nonresident suppliers that are carrying on business on more than a temporary basis must register. Filing and VAT payment VAT is payable by the 15th of the month following that in which it is collected. In cases in which a self assessment of VAT output is required on the payment of certain income to nonresidents (primarily services or royalties on rights used in Thailand), the VAT is payable on the 7th of the month following the month when the actual payment occurred.

cosmetics, diesel fuel, fireworks, jewellery, motorcycles, motor vehicles, petrol, luxury watches, tobacco, tires, golf equipment, yachts, etc., at rates ranging from 3%-45% of the value of the goods. Once the taxpayer's tax status has been approved by the tax authorities, the vendor should register as a Consumption Tax payer. Returns must be filed each calendar month and submitted before the 15th of the following month. WITH HOLDI NG TAX WITHHOLDING TAX NON-RESIDENT FOREIGN CORPORATIONS Interests on foreign loans, royalties and dividends paid to non-resident foreign corporations are subject to withholding tax at source at the time of their accrual in the taxpayer's books. The only exemption to this rule is when, at the time of the accrual of the income, there is a governmental restriction which prevents the actual remittances of the income due to the nonresident. DIVIDENDS Dividends received by non-resident foreign corporations from domestic corporations are subject to a final tax of 30%. However, tax is withheld at the reduced rate of 15% in Withholding tax: Dividends A 10% withholding tax is imposed on dividends paid to a nonresident company unless the rate is reduced under a tax treaty. Interest A 10% withholding tax applies to interest paid to nonresidents unless the rate is reduced under a tax treaty. A 5% business tax also may be imposed. Royalties A 10% withholding tax applies to royalties paid to a nonresident unless the rate is reduced under a tax treaty. A 5% business tax is also applicable, but may be waived when royalties are paid for the transfer of technology. Withholding tax: Dividends No tax is imposed on dividends remitted overseas unless paid to individuals, where a 5% withholding tax is imposed. Interest Interest paid to nonresidents is subject to a 10% withholding tax unless the rate is reduced under an applicable tax treaty. Royalties Royalties paid to nonresidents are subject to a 10% withholding tax unless the rate is reduced under an applicable tax treaty. Branch remittance tax No Withholding tax: Dividends Dividends paid to another Thailand company are subject to a 10% withholding tax or exempt if certain requirements are met. Dividends paid to nonresident companies are subject to a 10% withholding tax. Dividends paid to resident or nonresident individuals are taxed at a 10% rate that can be considered final. Resident individuals can obtain a dividend tax credit, so they may choose to include the dividends in their taxable income for the relevant tax year. Interest Interest paid to another Thailand company that is not considered a financial institution is

certain circumstances. INTEREST Interest received by non-resident foreign corporations is subject to the following final withholding tax: (a) 20% on interest paid or accrued from foreign loans contracted on or after 1 August 1986 (b) 30% on other interest. ROYALTIES Royalties received by non-resident foreign corporations are subject to a final withholding tax of 30%. However, said tax rate may be reduced under applicable tax treaties. TECHNICAL ASSISTANCE AND SERVICE FEES Technical assistance and service fees received by non-resident foreign corporations are subject to the final withholding tax of 30%. RENTAL AND LEASING INCOME Rental and leasing income received by nonresident foreign corporations is subject to the following final withholding tax: - 25% of the gross amount on film rentals from sources within the Philippines

subject to a 1% advance withholding tax, which may be used as a credit against the final corporate income tax due for the accounting period. Interest paid to a nonresident company is subject to a 15% final withholding tax unless the rate is reduced under an applicable tax treaty. Interest paid to a resident or nonresident individual is subject to a 15% withholding tax and can be considered a final tax in both instances. Royalties Royalties paid to another Thailand company are subject to a 3% advance withholding tax, which may be used as a credit against the final corporate income tax due for the accounting period. Royalties paid to a nonresident are subject to a 15% final withholding tax unless the rate is reduced under a tax treaty.

- 4.5% of the gross amount on charter feer or rentals in respect of foreign vessels - 7.5% of the gross amount on rentals and other fees in respect of aircraft, machinery and other equipment. NON-RESIDENT ALIENS The following income received by nonresident aliens (not engaged in trade or business in the Philippines) are subject to a final withholding tax of 25% of the gross amount of: (a) Dividends, interest and royalties (b) Technical assistance and service fees (no tax is withheld in certain circumstances) (c) Rental and leasing income (d) Capital gains (special rules apply to residents of double tax treaty states). FINAL WITHHOLDING TAX The following income received by Philippine citizens and resident aliens are subject to a final withholding tax of 20% of the gross amount of: (a) Interest (b) Royalties, except royalties on books, literary works and musical compositions which are subject to 10% (c) Technical assistance and service fees.

STAMP TAX

Stamp Tax is levied on various contracts including purchase and sale contracts, property leasing, loan contracts, documents for the transfer of property rights, RATES- .10%-10% engineering and design contracts, construction and installation, commodity transportation, storage, property insurance contracts, etc. Tax rates range from 0.005% to 0.1%. A fixed amount of Rmb 5 is charged on certificates evidencing rights and licenses. Inherit Inheritance/estate tax Tax is imposed on Inheritance/estate tax Inheritances and ance/e the net estate of both residents and gifts are subject to income tax at special state nonresidents at rates between 5% and 20%. rates tax Net wealth/net worth tax No

DOCUMENTARY STAMP TAX Documentary stamp tax is imposed on certain documents including shares certificates, bank cheques, bonds, sales documents of real properties and mortgages.

STAMP TAX (ST)

Stamp duty Rates of 0.5%-15% apply on the transfer of property.

Stamp duty Stamp duty generally applies at a rate of 0.1% to leases, the hire of work, the transfer of shares/debentures, loans (capped at THB 10,000), etc.

Inheritance/estate tax Inheritances and gifts are subject to income tax at special rates

no

TYPE OF TAXES Philippines -VAT 12% China 17%

COUNTRIES Vietnam 10% Thailand 7%

REMARKS

IT ONLY IMPLIES THAT CHINA RELIES CHIEFLY ON VAT,VAT HAS THE HIGHEST REVENUE INCOME IN PRC. PRC&VIETNAM HAS LOW RATE FOR IT ENCOURAGE MORE INVESTMENTS COMPARED TO THE OTHER COUNTRIES, PRC HAS THE HIGHEST RATE HAVING 8-10% AHEAD ALL THE OTHER COUNTRIES HAVE INCLUDED THEIR E.T&I.T IN THEIR INCOME TAX. EXCEPT FOR PH. PH. HAS THE HIGHEST RATE DEPENDING ON THE DOCUMENT

-Enterprise Income Tax/corporate income tax -Individual Income Tax

30%

25%

25%

30%

5%-32%

5%-45%

5%-35%

5-37%

Estate tax

5-20%

Subject to income subject to income tax at a tax special rate 0.005%-0.4% 3%-5%(depends on the location of the property) 0-270% (Imports) 20-70% (Exports) 0%-5% 1%(Land use right registration fee)

n/a

-Stamp -Deed

.10%-10% 6%

0.1%

-Customs Duties

3%-505%

150%(of the PR rate)

0-100%

LESSER TAX FOR THOSE WHO ARE PART OF PREFERENTIAL TRADE AGREEMENT. THE DIFFERENT EXCISE RATE WILL ALLOW PRODUCERS TO LOWER PRODUCTION COST AND REDUSE TAXABLE VALUES OF THE
COUNTRY INTENDED CONSUMPTION

Excise tax

1% - 45%

10%-75%

GROUP REPORT IN PA 207 COMPARATIVE ANALYSIS OF TAXES (PHILIPPINES, CHINA, VIETNAM, THAILAND) GROUP 2
LEI MADELINE MOHAMMAD ALLEN REBOLLOS VENICE JANE LLEDO AIVEL AIZON

PRESENTED TO: Dr. LOYDA A. BANGAHAN