CLASSIFICATION OF INDIVIDUAL
derived from sources within and
TAXPAYERS
Individual taxpayers are natural persons with
income derived from within the territorial
jurisdiction of a taxing authority. Under the
NIRC, individual taxpayers are classified as
follows:
 
Individual taxpayers can be classified into
two major categories – citizens and aliens.
A Filipino Citizen, as defined under Section
1 Article III of the Philippine Constitution,
is a natural person who is/has (a) born (by
birth) with father and/or mother as Filipino
Citizens; (b) born before January 17, 1973
of Filipino mother who elects Philippine
citizenship upon reaching the age of
majority; and (c) acquired Philippine
citizenship after birth (naturalized) in
accordance with Philippine Laws.
An Alien, for Philippine taxation purposes,
is a foreign-born individual from countries
other than the Philippines and is not
qualified to acquire or have not acquired
Philippine Citizenship by birth or even after
birth.
Classification of Citizens
1. A Resident Citizen (RC) is a
Filipino Citizen permanently residing in the
Philippines or is temporarily staying outside
the Philippines for less than 183 days during
the taxable year.
RCs are taxable for all income
without the Philippines.
2. A Non-Resident Citizen (NRC) is a
Filipino Citizen described under Sec. 22 (e)
of the NIRC as someone who have stayed
outside the Philippines for one hundred
eighty-three days (183) or more during the
taxable year (in aggregate) and has
established proof to the CIR’s satisfaction of
his intention to permanently reside abroad as
an immigrant or employee.
Overseas Contract Workers (OCWs)
or commonly referred to as Overseas
Filipino Workers (OFWs) are
classified as nonresident citizens for
tax purposes as they are employed in
foreign countries and are physically
present in that foreign country
because of such employment. This
also covers seafarers or seaman,
Filipino citizens, who receive
compensation for services rendered
abroad as a member of the
complement of a vessel engaged
exclusively for international trade.
NRCs are taxable only for income
derived from sources within the
Philippines.       
If a non-resident citizen arrives in the
Philippines at any time during the
taxable year to reside permanently in
the Philippines, that NRC is
considered a nonresident citizen with
respect to income earned from
sources abroad until the date of his
arrival in the Philippines. [Section
22(e)(4) NIRC].
 1. Non-resident alien not
engaged in trade or
The same rule shall apply to a
business (NRAne) is an
resident citizen who leaves the
NRA who stayed in the
Philippines anytime during the year
Philippines for only 180 days
as an immigrant or employee for
or less, and he is not deriving
more than 183 days.
business income in the
Philippines.
Aliens, whether resident or not of the
Philippines, is taxable only for
income derived from sources within
the Philippines.
Classification of Aliens

1. A Resident Alien (RA) is an

individual who is not a citizen of the
Philippines but whose residence is within
the Philippines. RAs also include foreign
individuals who have stayed in the
Philippines for more than one (1) year upon
date of arrival or who is required to stay for
an extended period for the accomplishment
of a purpose or project making a temporary
home in the Philippines. A foreigner with no
definite intention as to his stay is also
considered a resident alien.
2. A Non-resident Alien (NRA) is an
individual who is not a citizen and a resident
in the Philippines. They are aliens who come
to the Philippines for a definite purpose,
which in its nature may be promptly
accomplished.
Under Sec 22 (g) of the NIRC,
NRAs are further classified as
follows:

1. Non-resident alien engaged

in trade or business
(NRAe) is an NRA who
derives business income in
the Philippines and is staying
in the Philippines for an
aggregate period or more
than 180 days during the
taxable year but less than a
year. 
 as either ordinary or capital asset. (RR 2
Sec. 56)
CLASSIFICATION OF INCOME
Income as to Territorial Source
It is important to know the territorial source
of income for tax purposes. There are two
major income classification as to territorial
source namely - income derived from within
and income derived outside (without) the
Philippines. Income from sources within
comprises of earnings from within the
Philippine territory.
As a rule, if income is derived within the
Philippines, it is taxable within.
Income without the Philippines refers to
income earned outside the Philippines or
income derived from foreign countries.
Income derived outside the Philippines is
taxable only if the taxpayer is a Resident
Citizen or Domestic Corporation.
As discussed, each individual taxpayer is
taxed on their income within and without as
follows:

Taxable Income
Individual Taxpayer
Source Income as to taxability
RC Within & Without Income can also be taxable and non-taxable.
NRC, RA, NRAe, Taxable income refers to all pertinent items
Within only of gross income specified in the tax code.
NRAne
Non- taxable income is the income
mandated by the constitution, general or
special laws and international agreements to
  be exempted from tax.
Income as to source
Gross income (GI) refers to income from
whatever source, derived within or without
the Philippines, legal or illegal. Income
refers to all earnings derived from service
rendered (labor), from capital (business or
investment), or both, including gain derived
from sale or exchange of personal property
APPLICABLE TAXES AND TAX RATES
In a broad sense, income tax due for individuals is computed as:

The applicable income tax rate differs depending on the classification of individual taxpayers
and the classification of income based on source, whether it is an ordinary income, passive
income, or capital gains.
 
ORDINARY INCOME
Ordinary or regular income are subject to graduated tax table (also known as basic or normal tax)
as provided for under Section 24(A) of the Tax Code. The revised graduated tax rate is
summarized in Table 1-1.
 TABLE 1.1 GRADUATED TAX RATES

TRAIN LAW – TAXABLE YR 2018 - 2020 2023 Onwards

Amount of Income Tax Tax
Not over P250,000                   Exempt Exempt

Over P250,000 but not over

20% of excess over P250,000       15% of excess over P250,000
P400,000      

Over P400,000 but not over P30,000 + 25% in excess of P22,500 + 20% in excess of
P800,000   P400,000           P400,000

Over P800,000 but not over P130,000 + 30% in excess of P102,500 + 25% in excess of
P2,000,000     P800,000         P800,000

Over P2,000,000 but not over P490,000 + 32% in excess of P402,500 + 30% in excess of
P8,000,000   P2,000,000         P2,000,000

P2,410,000 + 35% in excess P2,202,500 + 35% in excess of

         Over P8,000,000                  
P8,000,000       P8,000,000
 PASSIVE INCOME
Passive income from sources within the Philippines are subject to final withholding taxes as
enumerated under Section 24(B) of the Tax Code. These passive incomes are not subject to
graduated tax rate or basic tax presented in Table 1-1 but to specific final withholding tax rates
as summarized in Table 1-2.
Final taxes are “constituted as full and final payment” of the income tax due thus it is not
creditable against any tax of the payee on income subject to regular rates of tax for the taxable
year. Because it is not subject to basic income tax rates, income subjected to final tax is not
included in the income tax return.

The liability for remittance of final taxes rests with the income payor as a withholding agent. In
the case where the income payor fails to withhold the tax or in case of under withholding, the
deficiency tax shall be collected from the payor/withholding agent and the expense associated
with the payment may not be allowed as deduction in the computation of income tax.
Passive incomes derived abroad are subject to basic income tax, therefore, included in the
income tax return of resident citizen taxpayers.
TABLE 1.2 PASSIVE INCOME FROM PHILIPPINE SOURCES SUBJECT TO FWT

Passive Income Citizens & Residents NRAe NRAne

Interest      

Interest from any currency bank deposit       20% 20% 25%

Yield or any other monetary benefit from Deposit Substitutes 20% 20% 25%

Yield or any other monetary benefit from trusts funds and

20% 20% 25%
similar agreements  

Interest incomes received from a Depository bank under eFCDS 15% except NRC-
Exempt Exempt
(Beginning 2018) Exempt

Interest income from long-term deposit or investment Exempt Exempt Exempt

If pre-terminated before fifth year, a final tax      

shall be imposed based on remaining maturity      
as follows:      
                 4 years to less than 5 years 5% 5% 5%
                 3 years to less than 4 years 12% 12% 25%
                 Less than 3 years 20% 20% 25%

Royalties      

Royalties on books, as well as other literary works and musical

10% 10% 25%
compositions        

Royalties, in general 20% 20% 25%

Prizes      

Prizes exceeding 10,000* 20% 20% 25%

Winnings      

Other winning regardless of amount 20% 20% 25%

PCSO/Lotto Winnings      

                 Amount is 10,000 or less Exempt Exempt 25%

                 Amount is more than 10,000 20% Exempt 25%

Dividends      

From domestic corporation or from a joint stock co., insurance,

10% 20% 25%
or mutual fund companies & ROHQ of multinational companies

Net income after tax of a partnership (except a GPP) 10% 20% 25%

Share of an individual in the net income after tax of an

association, a joint account, or a Joint Venture or Consortium
10% 20% 25%
taxable as a corporation, which he is a member or a co-
venturer    
 Prizes less than 10,000 are subject to basic tax except those received by NRANETB which are
subject to 25% FWT.
 
CAPITAL GAINS
Capital gains refer to income from the sale of capital assets. Capital assets are assets not used or
for sale in the ordinary course of business. Income from sale of capital assets subject to capital
gains tax (CGT) under Table 1-3. Capital asset transactions subject to CGT are as follows:

1. Sale of shares of stocks of a domestic corporation not listed in the local stock
exchange
2. Sale of real properties located in the Philippines
 
If capital gains arise from transactions other than those described these should be treated as
ordinary income and subject to graduated income tax. Ordinary assets, on the other hand, subject
to graduated income tax includes:

1. Stock in trade of the taxpayer or other property of a kind which would properly be
included in the inventory of the taxpayer if on hand at the close of taxable year.
2. Property used in trade or business subject to depreciation.
3. Real property held by the taxpayer primarily for sale to customers in the ordinary
course of trade or business.
4. Real property used in trade or business of the taxpayer
There are also capital gains not subject to CGT. These includes:

1. Sale of shares and foreign corporations

2. Sale of real properties located abroad
3. Sale of other personal assets other than shares of stock of domestic corporations such as
cars, jewelries, and the like.
 
TABLE 1.3 CAPITAL GAINS SUBJECT TO CAPITAL GAINS TAX (CGT)
 

(1) Capital gain from sale of shares of stock of a domestic Citizens &
NRAe NRAne
corporation not traded in the local stock exchange (LSE) Residents
Beginning January 1, 2018
15% 15% 15%
Tax Base: Capital Gain
Prior to 2018      
On 1st Php100,000 capital gain 5% 5% 5%
In excess of Php100,000 capital gain 10% 10% 10%
(2) Capital gain on sale of real property located in the
Philippines 6% 6% 6%
Tax Base: Selling Price or FMV, whichever is higher

Sale of Share of Stock of a Domestic Corporation not traded in the LSE

Capital gain or loss is computed as fair market value less cost. According to RR 20-2020
amending RR 6-2008, the fair market value of a stock of a domestic corporation not sold through
the local exchange shall be as follows:
 

Book value (BV) based on the latest available FS duly certified by

Common Stock (CS) an independent CPA prior to date of sale but not earlier than the
immediately preceding taxable year.
Liquidation value (LV) , which is equal to the redemption price as
Preferred Stock (PS) of balance sheet date nearest to the transaction date, including any
premium and cumulative preferred dividends in arrears.

Corporation has both BV per CS = (Total Equity – LV of PS) / Total Outstanding CS

common and preferred All values to be used is as of balance sheet date nearest to the
stocks transaction date.  

No CGT shall be due if the transaction resulted to a capital loss.

 
Sale of Real Property classified as Capital Asset within the Philippines
FMV or fair market value refers to the higher of
1. Assessed value as provided by City or Provincial assessors as reflected in the tax
declaration for real property tax purposes; and
 

2. Zonal value as provided by the Commissioner of Internal Revenue (CIR) which can be
checked in BIR website.
If the real property classified as capital asset is sold to the government, the individual taxpayer
shall have the option to be taxed at 6% CGT or basic income tax using the graduated tax rate.
If the real property sold is classified as principal residence, it may be exempt from CGT provided
the requisites for exemption are met

1. The proceeds are fully utilized in acquiring or constructing a new principal residence
within 18 months from the date of sale. If there is no full utilization, the unutilized
portion of the gain shall be subject to CGT computed as follows:
Taxable Amount = (Unutilized Portion/ Gross Selling Price)
x GSP or FMV at time of sale, whichever is higher

2. The historical cost or adjusted basis of the real property sold shall be carried over to the
new principal residence built or acquired.
3. The BIR shall have been duly notified by the taxpayer within 30 days from the date of
sale through a prescribed return of his intention to avail of tax exemption.
4. The tax exemption can only be availed of once every 10 years.
Principal residence is where the individual taxpayer permanently resides or whenever absent,
wherein the said individual intends to return (RR 142000) and is considered is family home. It
should be certified by the Barangay Chairman over the place, or the Building Administrator if
the residence is a condominium or the individual taxpayer’s address as indicated in his latest tax
return.
 
SUMMARY

TYPE OF INCOME APPLICABLE TAX REFER TO

Regular Income Graduated Tax Table 1-1
Passive Income Final Withholding Tax Table 1-2
Capital Gains Capital Gains Tax Table 1-3

Note that income not subject to FWT or CGT are classified as ordinary income and are subject to
graduated tax rate unless otherwise, exempt under the law.
Interest income from bank deposit abroad, for instance, is not included in the list of income
subject to FWT nor CGT. Hence, such income is subject to basic tax or graduated tax rate.
 
Other Stock Transaction
Sale of shares of stock of a corporation listed in the local stock exchange is not subject to income
tax but to other percentage tax which is further discussed under Tax 2 Business and Transfer
Taxes. The applicable business tax for this type of transaction is known as "stock transaction
tax".
The tax rate is based on gross selling price; thus, stock transaction tax is computed regardless of
whether the transaction resulted to a gain or loss.
 
Stock transaction tax (STT) is computed as follows:
              Prior to 2018               =         ½ of 1% of Gross Selling Price
               Beginning 2018         =         6/10 of 1% of Gross Selling Price
 COMPUTATION OF INCOME TAX DUE AND PAYABLE
In a broad sense, computing for income tax due is as easy as
           

   
Gross taxable income or Tax Base Php xx.xx
Tax Rate xx%
Income Tax Due Php xx.xx
Less: Tax Credits (xx.xx)
Income Tax Due and Payable Php xx.xx
 
We are done with determining the taxable income and applicable tax rate. Let us now compute
for the tax due.
Types of Individual Taxpayers according to Type of Income Earned

1. Purely Compensation Income Earner – individuals earning income from an employer-

employee relationship which may be a minimum wage or non-minimum wage earner.
Taxable Compensation Income (TCI) Php xx.xx
Tax Due (TCI*Graduated Tax Rate per Table 1.1) xx.xx
Less: Creditable withholding tax on compensation income (xx.xx)
Income Tax Payable Php xx.xx
 
Compensation income encompasses all remuneration for services performed by an employee for
his employer whether paid in cash or in kind. (RR 2-98, as amended) Taxable compensation
income excludes non-taxable compensation/ exclusions from total compensation income.
Total compensation income
This may include payments by employer such as but not limited to
 Salaries and Wages
 Emoluments
 Honoraria
 Bonuses
 Allowances (transportation, representation, and entertainment)
 Paid Vacation and Sick Leaves
  Fees
 Fringe Benefits
 Pensions and Retirement Pay
 Commission of Sales Personnel
 Profit Sharing as compensation for service
 Any other income payment arising from an employee-employer relationship
 
Exclusions
Exclusions are flow of wealth to the taxpayer considered not part of income due to

1. Exemption under law

2. It does not come within the definition of income for income tax purposes.
The following are considered non-taxable compensation and thus, are excluded in computing
for the taxable compensation:
 SSS/ GSIS, PHIC, HDMF and union dues
 Compensation for Sickness and Injuries – amounts received by the employee through
an Accident and Health Insurance or Workmen’s Compensation Act as compensation
for injuries and sickness
 Retirement Benefits, pensions, and gratuities
 13th month pay and other benefits – benefits received by employees provided that the
exclusion shall not exceed Php90,000 (beginning January 1, 2018), 13 th month pay
and other benefits and bonuses in excess of Php90,000 shall form part of the taxable
income.
o Benefits received pursuant to RA 6686 “An Act Authorizing
Annual Christmas Bonus to National and Local Government
Officials and Employees
o Benefits received pursuant to PD 851 “13th Month Pay Law”
o Benefits received not covered by PD 851
o Other benefits such as productivity bonuses and incentives and
Christmas Bonus
 De Minimis Benefits – privileges of relatively small value offered by employers to
employees. These are not considered as compensation subject to income tax and
consequently, to withholding tax.
o Monetized unused vacation leave credits of private employees not
exceeding 10 days during the year.
o Monetized value of vacation and sick leave credits paid to
government officials and employees.
 o Medical cash allowance to employee dependents not exceeding
Php1,500 per semester or Php250 a month
o Rice subsidy of not more than Php2,000 per month or 1 sack
(50kg) of rice per month
o Uniforms not exceeding Php6,000
o Actual medical assistance given not exceeding Php10,000 per
annum
o Laundry allowance not exceeding Php300 a month
o Employee achievement awards in form of tangible property other
than cash or GCs with a value not exceeding Php10,000 per annum
under a well-established written plan
o Gifts given during Christmas not exceeding Php5,000 per annum
o Daily meal allowance for overtime work and night-/ graveyard
shift not exceeding 25% of the basic minimum wage
o Benefits received under a CBA
 
 Statutory Minimum Wage Earners
 
Statutory Minimum Wage Earner (SMWE)
RA 9504, SMWE refers to workers paid the statutory minimum wage rate as set by the
Regional Tripartite Wage and Productivity Board. The statutory minimum wage rate is
identified for each region based on established criteria and shall be the basis of exemption
from income tax.
SMWEs are exempt from tax on the following compensation income

1. Minimum Wage
2. Holiday Pay
3. Hazard Pay – given to those working in hazardous workplaces by nature of work.
4. Overtime Pay
5. Night Shift Differential
 Types of MWEs and applicable taxes

Creditable Withholding
Taxpayer Income Tax
Tax
Purely MWE Exempt Exempt
MWE with additional
“benefits” from the employer
Still treated as MWE, hence Still treated as MWE, hence
not exceeding tax- exempt
exempt exempt
thresholds such as the
Php90,000 limit
MW – Exempt MW – Exempt
MWE with additional
business income Business Income = subject to Business Income = subject to
basic graduated tax creditable tax
 
Under RA 10963 (TRAIN Law), NO DEDUCTION is allowed for pure compensation
income earners beginners Jan. 1, 2018.

2. Purely Business/ Professional Income Earner [Self Employed and Professionals (SEP)]
Self- employed individual, as defined under RA 10963 (TRAIN Law), is a sole proprietor or an
independent contractor who reports income earned from self-employment. A purely self-
employed individual is not earning compensation income from an employee-employer
relationship. Income derived from self-employment is considered as income derived from trade
or business, thus classified under ordinary or regular income.
A professional, on the other hand, is a person belonging to a specific profession formally
certified by a professional body. Professionals included in this classification are those who derive
their income purely from the practice of profession and not under an employer - employee
relationship.
Both income from self-employment and practice of profession are treated as ordinary income are
subject to graduated tax rate in Table 1.1.
RA 10963 (TRAIN Law) provided an option to Self-employed/ Professionals having gross
receipts of less than Php3,000,000 (revised VAT threshold) and with net taxable income to
Php250,000 in a taxable year to pay 8% tax on its gross receipts instead of the graduated income
tax on net taxable income.
To avail of the 8% preferential tax rate in lieu of income and business tax, the Self-employed/
Professional shall satisfy the following conditions:

1. Gross Receipts/ Sales + Other Non-Operating Income < Php3,000,000; Php3M is the
revised VAT threshold.
2. Self-employed/ Professional shall be non-VAT registered.
3. The gross/receipts were not derived from vat-exempt sales and transaction.
4. Self-employed/ Professional is not subject to Percentage Tax other than Section 116; and
5. The SEP signifies his/her intention to elect the 8% income tax.
Intention to avail of the preferential 8% tax in lieu of income and business tax must be signified
in the taxpayer’s 1st Quarter return of the taxable year as provided under RR 8-2018. Failure to
signify intention means that the taxpayer is considered as availing the regular graduated rates and
it should be irrevocable for the entire year.
If during the year, the Self-employed/ Professional exceeded the Php3M VAT threshold, RR 8-
2018 provides that the taxpayer will be automatically subjected to the graduated rates with
previous payments under the 8% preferential rate be allowed as tax credit.
 

Gross sales/ receipts (GI) Php xx.xx

Less: Cost of Sales/ Cost of direct
(xx.xx)
services                                  
Gross business/ professional income xx.xx
Less: Allowable business expense (xx.xx)
Taxable net income (NI) Php xx.xx
  

Income Tax Due (NI*Graduated Tax Rate per Table 1.1) Php xx.xx
Less: Creditable withholding Taxes  
         Prior years excess credit xx.xx  
         Tax Payments for the Previous Quarter xx.xx  
         Tax Withheld at Source xx.xx  
           Foreign Income Tax Credit xx.xx (xx.xx)
Income Tax Payable Php xx.xx
 
Not all business expenses may be allowed as a deduction in computing for taxable net income.
An individual taxpayer has the option to avail of either itemized deduction or optional standard
deduction (OSD).
Itemized Deduction
Unless otherwise elected by the taxpayer to avail of OSD, itemized deduction should be applied.
Under this category, all expenses, substantiated and related to performance of business/
profession during the year, can be deducted from the gross receipts.
The following are allowed deductions from gross business/ professional income

1. Ordinary and Necessary business or professional expenses which may include

1. Salaries, wages, allowances
2. Travel Expenses
3. Rentals
4. Representation Expenses
2. Taxes
3. Interest
4. Losses
5. Bad Debts
6. Depreciation
7. Charitable Contributions
 
Optional Standard Deduction
OSD is elected at the option of the taxpayer. The election to avail OSD should be signified by
the taxpayer in the return and should be irrevocable for the taxable year such return is made.
Optional Standard Deduction is
 In lieu of Itemized Deduction
 40% Flat Rate
 o For individual taxpayers – 40% of Gross Sales less Sales Returns and allowances
and sales discounts
 

Gross sales/ receipts (GI) Php xx.xx

Less: OSD (GI*40%) (xx.xx)
Taxable net income (NI) Php xx.xx
 
 No substantiation requirement
 

1. Mixed Income Earners – are individuals earning both business/ self -employment and
compensation income.

The 8% preferential tax is applicable only to income from self-employment/ practice of

profession. Compensation income of a mixed income earner is still subject to graduated tax rate.

Gross Compensation Income Php xx.xx

Gross Sales/ Receipts xx.xx  
Less: Cost of Sales/ Cost of direct services (xx.xx)  
Gross business/ professional income xx.xx  
Less: Allowable business expense (xx.xx) xx.xx
Taxable net income (NI)   Php xx.xx
  
 
 
 

Income Tax Due (NI*Graduated Tax Rate per Table 1.1) Php xx.xx
Less: Creditable withholding Taxes  
           Creditable withholding taxes on
xx.xx  
compensation
           Prior years excess credit xx.xx  
           Tax Payments for the Previous Quarter xx.xx  
           Tax Withheld at Source xx.xx  
           Foreign Income Tax Credit xx.xx (xx.xx)
Income Tax Payable Php xx.xx
 
CREDITABLE WITHHOLDING TAX (CWT)
Creditable withholding tax (CWT) is not a form of tax but rather a method of collecting taxes in
advance. The income payor, which acts as a withholding agent of the government, collects the
tax from the recipient of income and remits the same to the government. Unlike final
withholding taxes on passive income, the recipient of income subjected to CWT is still required
to report such income in its income tax return whether the amount of CWT already equal the tax
due on the income.
Creditable means the tax is deductible from the tax due. Creditable withholding taxes includes
the following:
 Withholding tax on Wages / Compensation (WTW) - tax withheld by an employer from
the compensation income of an employee.
 Expanded Withholding Tax (EWT) - taxes withheld at source by the payor (other than
employer) such as creditable withholding taxes for the purchase of goods, services, and rentals.
 Foreign income tax credit – this is applicable to resident citizens with income earned
outside the Philippines and was subjected to income tax by the country where the income was
derived. The purpose of this is to lessen effect of indirect double taxation.
Statutory formula for the computation of the tax credit:
INCOME TAX PREPARATION AND FILING

SUMMARY OF TAX FORMS AND FILING DATES

Income Type Tax Type Tax Return Deadline

1700 Annual Income Tax Return for This return is filed on or before April 15 of each
Purely Compensation
Income Income Tax Individuals Earning Purely year covering income for the preceding taxable

Compensation Income year.

Purely Business/ 1701A Annual Income Tax Return This return is filed on or before April 15 of each
Professional Income
Income Tax for Individuals Earning Income year covering income for the preceding taxable
 
PURELY from Business/Profession year.

This return is filed on or before April 15 of each

year covering income for the preceding taxable

year.
1701 Annual Income Tax Return for

Individuals (including MIXED  

Mixed Business/
Income Earner), Estates and Trusts
Professional Income On or before May 15 -
Income Tax
  st
  1 Quarter                                  

1701Q Quarterly Income Tax Return On or before August 15 (45 days after end of

for Individuals, Estates and Trusts Quarter) - 2nd Quarter

On or before November 15 (45 days after end of

Quarter) - 3rd Quarter

Passive Income
Final Tax 0619-F Monthly Remittance Form In accordance with the schedule set forth in RR

for Final Income Taxes Withheld No. 26-2002

   
 1601-FQ Quarterly Remittance The return shall be filed and paid not later than the

Return of Final Income Taxes last day of the month following the close of the

Withheld taxable quarter

 
 
Capital Gains within 30 days after each transaction
1707 Capital Gains Tax Return for
Shares of Stock
Onerous Transfer of Shares of  
Ordinary Return
Stocks Not Traded Through the
   
  Local Stock Exchange
 
Final Consolidated
Return  
 
 
1707- A For individual taxpayers,
  on or before April 15 of the following year
this final consolidated return is filed
Capital Gains Tax
 
on or before April 15 of each year  
 
covering all stock transactions of the
   
preceding taxable year.
 
 
Real Property  
 
 
1706 Capital Gains Tax Return for
 

  Onerous Transfer of Real Property  

Classified as Capital Asset (both

within 30 days following each sale or other
Taxable and Exempt)
disposition.

Substituted filing of income tax returns (ITR)

Under RA 9504 and RR 10-2008, Individual taxpayers may no longer file income tax return on
or before April 15of the following taxable year provided the taxpayer is/has (all the requirements
must be satisfied):

1. Receiving purely compensation income, regardless of amount.

2. The amount of income tax withheld by the employer is correct
(Tax due = Tax withheld)

2. Only one employer during the taxable year.

Persons Required to file Income Tax Return

1. Regardless of result of operation, individuals engaged in business and/or practice of

profession.
 2. Individuals deriving compensation from two or more employers concurrently or
successively at any time during the taxable year.
3. Employees deriving compensation income, regardless of the amount, whether from a
single or several employers during the calendar year, the income tax of which has not been
withheld correctly (i.e. tax due is not equal to the tax withheld) resulting to collectible or
refundable return.
4. Individual deriving other non-business, non-profession-related income in addition to
compensation income not otherwise subject to final tax.
5. Individuals receiving purely compensation income from a single employer, although the
income tax of which has been correctly withheld, but whose spouse is required to file
income tax return.
6. NRAe deriving purely compensation income, or compensation income and other non-
business, non-professional-related income.
 
Persons not Required to file income Tax Return (RR 8-2018)

1. An individual earning purely compensation income whose taxable income does not
exceed P250,000.
2. An individual whose income tax has been correctly withheld by his employer, provided
that such individual has only one employer for the taxable year - the Certificate of
Withholding filed by the respective employers, duly stamped "Received" by the bureau,
shall be tantamount to the substituted filing of income tax returns by said employees.
3. An individual whose sole income has been subjected to final withholding tax.
4. Minimum wage earners.