TAXABLE INCOME SUBJECT TO BASIC TAX

A. PURE COMPENSATION INCOME EARNER

Gross Compensation income P xxx
Tax Due (Graduated Tax Rate) xxx
Less: Credible Withholding Tax on Com. Income (xxx)
Income Tax Payable P xxx

B. PURE BUSINESS INCOME EARNER

Gross sales / Revenue P xxx
Less: Cost of Sales / Cost of direct services (xxx)
Gross business / professional income P xxx
Less: Operating expenses (xxx)
Taxable net income P xxx

Income Tax Due (Graduated Tax Rate) P xxx

Less: Credible Withholding Tax
Prior year’s excess credit P xxx
Tax payments for the previous quarter(s) xxx
Tax withheld at source xxx
Foreign income tax credit xxx (xxx)
Income Tax Payable P xxx

C. MIXED INCOME EARNER

Gross Compensation Income P xxx
Gross Sales / Receipts P xxx
Less: Cost of Sales / Cost of direct services (xxx)
Gross business / professional income xxx
Less: Allowable business expense (xxx) xxx
Taxable net income P xxx

Income Tax Due (Graduated Tax Rate) P xxx

Less: Credible Withholding Taxes
Credible Withholding Tax on Com. income P xxx
Prior year’s excess credit xxx
Tax payments for the previous quarter(s) xxx
Tax withheld at source xxx
Foreign income tax credit xxx (xxx)
Income Tax Payable P xxx
 CREDIBLE WITHHOLDING TAX

Gross Compensation Income P xxx

Gross business / professional income xxx
Less: Allowable business / professional expenses (xxx)
Taxable net income P xxx

Income Tax Due (Graduated Tax Rate) P xxx

Less: Credible Withholding Taxes:
CWTx on Compensation income P xxx
CWTx on withheld at source xxx
Other tax credits:
Tax payments for the previous quarter(s) xxx
Tax withheld at source xxx
Foreign income tax credit xxx (xxx)
Income Tax Payable P xxx

Creditable Withholding Tax Rates

Professional fees
a. Individual payee 5%
o If gross income for the current year < P3M 10%
o If gross income for the current year > P3M
b. Non-individual payee
10%
o If gross income for the current year < P720k
15%
o If gross income for the current year > P720k
Rentals 5%
Goods 1%
Services 2%
Income payments to beneficiaries of estates/trusts 15%
Income payments to partners of GPPs
o If gross income for the current year < P720k 10%
o If gross income for the current year > P720k 15%
Certain income payments made by credit card companies 1%
 QUARTERLY TAX RETURNS
Q1 Q2 Q3 Annual
Gross income (CA) P xxx P xxx P xxx P xxx
Business expenses (CA) (xxx) (xxx) (xxx) (xxx)
Taxable Net income P xxx P xxx P xxx P xxx

Basic income tax due P xxx P xxx P xxx P xxx

Less: CW Taxes:
Prior year’s excess credit (xxx) (xxx) (xxx) (xxx)
Quarterly withholding taxes (xxx) (xxx) (xxx) (xxx)
Quarterly tax payments - (xxx) (xxx) (xxx)
Foreign tax Credit (xxx) (xxx) (xxx) (xxx)
Income tax payable P xxx P xxx P xxx P xxx
 GRADUATED TAX RATE

AMOUNT OF INCOME TAX (2018-2022) TAX (BEG. 2023)

Not over P250,000 Exempt Exempt
Over P250,000 but not over 20% of excess over 15% of excess over
P400,000 P250,000 P250,000
Over P400,000 but not over P30,000 + 25% excess of P22,000 + 20% excess of
P800,000 P400,000 P400,000
Over P800,000 but not over P130,000 + 30% excess of P102,500 + 25% excess of
P2,000,000 P800,000 P800,000
Over P2,000,000 but not P490,000 + 32% excess of P402,500 + 30% excess of
over P8,000,000 P2,000,000 P2,000,000
Over P8,000,000 P2,410,000 + 35% in excess P2,202,500 + 35% in excess
of P8,000,000 of P8,000,000

CAPITAL GAINS TAX

Citizens and NRA-ETB NRA-NETB

Residents
A. Capital gains tax 15% 15% 15%
from sale of shares
of stock of a
domestic corporation
not traded in the
local stock exchange

Basis: Capital gain

B. Sale of real property 6% 6% 6%
located in the
Philippines

Tax base: Selling price

or FMV, whichever is
higher
 FINAL WITHHOLDING TAX

Citizen and NRA-ETB NRA-NETB

Resident
INTEREST
a. Interest from any currency 20% 20% 25%
bank deposit
b. Yield or any other monetary 20% 20% 25%
benefit from deposit
substitute
c. Yield or any other monetary 20% 20% 25%
benefit from trust funds and
similar arrangements
d. Interest income received 15% Exempt Exempt
from a depository bank NRC - exempt
under foreign currency
deposit system
e. Interest income from long- Exempt Exempt 25%
term deposit or investment
o 4 years to less than 5 5% 5% 25%
years
o 3 years to less than 4 12% 12% 25%
years
20% 20% 25%
o Less than 3 years
ROYALTIES
a. Royalties, in general 20% 20% 25%
b. Royalties on books, literary 10% 10% 25%
works and musical
compositions
PRIZES
a. Prizes exceeding P10,000 20% 20% 25%
Note: Prizes < P10,000 are subject
to basic tax exempt those received
by NRA-NETB which are subject
to 25% FWT
OTHER WINNINGS
a. UNDER TRAIN LAW - 20% 20% 25%
Other winnings regardless
of amount

PSCO Winnings
o Amount < P10,000 Exempt Exempt 25%
 o Amount > P10,000 20% Exempt 25%
b. UNDER CREATE Act – 20% 20% 25%
Other winnings regardless
of amount

PSCO Winnings
o A Amount < P10,000 Exempt Exempt 25%
o Amount > P10,000 20% 20% 25%
CASH and/or PROPERTY
DIVIDEND
a. Cash and/or property 10% 20% 25%
dividends received from a
joint stcok co.
b. Share of an individual in the 10% 20% 25%
distributable net income
after tax of a
partnership(other than GPP)
c. Share of an individual in the 10% 20% 25%
net income after tax of an
Association, a Joint account,
or a Joint Venture
 SUMMARY OF INCOME AND THE APPLICABLE INCOME TAX

TYPE OF INCOME APPLICABLE TAX

Regular income Graduated rate
Passive income Final withholding tax
Capital gains (Subj. To CGT) Capital Gains Tax