Nonresident Alien

Resident Nonresident Resident

Income Not
Citizen Citizen Alien Engaged
Engaged
Final Tax
1. Taxable Income Graduated Tax Rate under Sec. 24 (A) under TRAIN Law
25%
2. Passive Income
a. In general,
interest, royalties, Final Tax
20% 20%
prizes and other 25%
winnings
b. Cash and/or Final Tax
6%; 8%; 10% 20%
Property Dividends 25%
3. CAPITAL GAINS
a. Sale of SOS not
15% 25%
traded in SE
b. Sale of Real
6% 6%
Property

DESCRIPTION TAX TAX BASE

Domestic Corporation RATE
1.
a) In general 30% Taxable Income from ALL SOURCES
b) MCIT 2% Gross Income
c) IAET 10% Improperly Accumulated Taxable
Income
2. Proprietary 10% Taxable Income from ALL SOURCES
3. Non-Stock, Non-Profit 10%
Hospital
4. GOCC, agencies, 1a – 1c
instrumentalities
5. National Government, LGUs 1a – 1c
6. Taxable Partnership 1a – 1c
7. Exempt Corporation
a) On Exempt Activities 0%
b) On Taxable Activities 1a Taxable Income
8. GPP Exempt
9. Corporations Covered by Rate Specified Under Special Laws
Special Laws

Nonresident Alien
Resident Nonresident Resident
Income Not
Citizen Citizen Alien Engaged
Engaged
Final Tax
1. Taxable Income Graduated Tax Rate under Sec. 24 (A) under TRAIN Law
25%
2. Passive Income
a. In general,
interest, royalties, Final Tax
20% 20%
prizes and other 25%
winnings
b. Cash and/or Final Tax
6%; 8%; 10% 20%
Property Dividends 25%
3. CAPITAL GAINS
a. Sale of SOS
not traded in 15% 25%
SE
b. Sale of Real
6% 6%
Property
Domestic Corporation

DESCRIPTION TAX RATE TAX BASE

Domestic Corporation
1.
a) In general 30% Taxable Income from ALL SOURCES
b) MCIT 2% Gross Income
c) IAET 10% Improperly Accumulated Taxable Income
2. Proprietary 10% Taxable Income from ALL SOURCES
3. Non-Stock, Non-Profit Hospital 10%
4. GOCC, agencies, 1a – 1c
instrumentalities
5. National Government, LGUs 1a – 1c
6. Taxable Partnership 1a – 1c
7. Exempt Corporation
a) On Exempt Activities 0%
b) On Taxable Activities 1a Taxable Income
8. GPP Exempt
9. Corporations Covered by Special Rate Specified Under Special Laws
Laws

RESIDENT FOREIN CORPORATION

DESCRIPTION TAX RATE TAX BASE

Resident Foreign Corporation
1.
a) In general 30% Taxable Income WITHIN the Philippines
b) MCIT 2% Gross Income
c) IAET 10% Improperly Accumulated Taxable Income

2. International Carriers 2.5% Gross Philippine Billings

3. Regional Operating 10% Taxable Income
Headquarters
4. Corporation covered by Special Rate Specified Under Special Laws
Laws
5. Offshore banking units 10% Gross Taxable Income – FCT
30% Taxable Income other than FCT
6. FCDU 10% Gross Taxable Income – FCT
30% Taxable Income other than FCT

ON PASSIVE INCOME

ON PASSIVE INCOME DOMESTIC RESIDENT FOREIGN

1. Interest Income – Deposits and Deposit 20% 20%
Substitutes
2. Interest Income – Expanded Foreign 15% 15%
Currency Deposit System (EFCDS)
3. Interest Income – EFCDS from foreign 10% 10%
currency transactions
4. Royalties 20% 20%
5. Dividends – Domestic/Resident Corporation Exempt Exempt
from Domestic Corporation
6. Capital Gains Stocks 15% 5%
10%
7. Capital Gains – Real Property 6% ----
RESIDENT FOREIN CORPORATION

DESCRIPTION TAX RATE TAX BASE

1.
a) In general 30% Taxable Income WITHIN the Philippines
b) MCIT 2% Gross Income
c) IAET 10% Improperly Accumulated Taxable Income

2. International Carriers 2.5% Gross Philippine Billings

3. Regional Operating 10% Taxable Income
Headquarters
4. Corporation covered by Special Rate Specified Under Special Laws
Laws
5. Offshore banking units 10% Gross Taxable Income – FCT
30% Taxable Income other than FCT
6. 10% Gross Taxable Income – FCT
30% Taxable Income other than FCT

ON PASSIVE INCOME DOMESTIC RESIDENT

FOREIGN
1. Interest Income – Deposits 20% 20%
and Deposit Substitutes
2. Interest Income – Expanded 15% 15%
Foreign Currency Deposit
System (EFCDS)
3. Interest Income – EFCDS 10% 10%
from foreign currency
transactions
4. Royalties 20% 20%
5. Dividends – Exempt Exempt
Domestic/Resident Corporation
from Domestic Corporation
6. Capital Gains Stocks 15% 5%
10%
7. Capital Gains – Real Property 6% ----
GR 195909

GR 195960 2012

How to be exempted from income tax

1. Non-stock corp
2. Exclusive for charitable purposes based on the primary purpose
3. Must be operated exclusively for charitable
4. No part of its --- inure to the benefit

Not exempt but subject to 10% preferential tax rate

SECTION 30 last paragraph

Notwithstanding the provisions in the preceding paragraphs, the income of whatever kind and character of the
foregoing organizations from any of their properties, real or personal, or from any of their activities conducted for profit
regardless of the disposition made of such income, shall be subject to tax imposed under this Code.

How to answer?

SGB is subject to the regular income tax rate of 30% because under the law, if the proprietary educational institution
gross income from unrelated or activity of exceeds 50% of the total gross income from all sources, then the regular rate
for income tax applies. Therefore in this case, the gross income of unrelated activities is equal to 9 million which is 60%
of the total gross income from all source of 15M, then the preferential tax rate shall not apply. – discuss the facts in
answering –