INCOME TAX SYSTEMS

1. Global Tax System – all incomes regardless of classification

2. Schedular Tax System – different types of income are subject to different sets of income tax rates
(graduated or flat). The basis may be gross income (without deductions) or net income (gross
income less allowable deductions).
3. Semi-Schedular or Semi-Global Tax System – regular or ordinary income including passive income
and capital gain not subjected to final ta are lumped or added together and after deducting
allowable deductions, the taxable income is subjected to tax in accordance with tax rules.

Note: Philippines adopts the Semi-Schedular or Semi-Global System.