REO: Income Taxation –Final Withholding Tax Table H0-04.

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FINAL TAX RATES ON CERTAIN PASSIVE INCOME (Sec. 24 B, 25 A (2), 27 D, 28 A (7); 28 B (5), NIRC)

Individual
PASSIVE INCOME Alien Corporations
Citizen Non-resident

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Non- Resident Not Domestic Resident Non-
Resident resident Engaged engaged resident
INTEREST:

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Interest or yield on local currency
deposit:
1. Bank deposit (savings, time) 20% 20% 20% 20% 25% 20% 20% 25%

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2. Deposit substitute
3. Money market placements
4. Trusts funds (CTF, UITF, IMA)
Interest income from long term: 20% 20%
1. Deposit (RIT for (RIT for

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2. Investments in the form of savings deposit deposit
3. Common or Individual Trust Funds substitute substitute
4. Investment Management Accounts Exempt Exempt Exempt Exempt 25% issued by issued by 25%
5. Deposit substitute non- non-

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6. Other investments evidenced by banks) banks)
certificates prescribed by the BSP
Pre-termination of long-term deposit or
investment: 20% 20% 20% 20% 25%
1. Less than 3 years held 12% 12% 12% 12% 20% 20% 25%
2. 3 years to less than 4 years held 5% 5% 5% 5%
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3. 4 years to less than 5 years held
Interest Income on FCDU Deposit from a 15% Exempt 15% Exempt Exempt 15% 15% Exempt
depositary bank
Interest Income by FCDU banks N/A 10% 10% N/A
Interest Income on foreign loans N/A 20%
EO

DIVIDENDS (Cash or Property):

1. From a Domestic Corporation
- January 1, 1998 earnings 6% 6% 6%
- January 1, 1999 earnings 8% 8% 8% 20% 25% Exempt Exempt 15%*
- January 1, 2000 earnings 10% 10% 10%
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2. From a Foreign Corporation Regular Income Tax rules apply.

(resident and non-resident)
Note: Business partnerships are taxable similar to corporations. Partners share in the net income of business partnership is subject to 10% final
withholding tax. (NOTE SECTION 42 A(2) on Dividends)

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REO for Effectiveness, Efficiency and Convenience! TAX by Rex B. Banggawan, CPA, MBA TAX –H04.1
 REO: Income Taxation –Final Withholding Tax Table H0-04.1
Individual
PASSIVE INCOME Alien Corporations
Citizen Non-resident
Non- Resident Not Domestic Resident Non-
Resident resident Engaged engaged resident
ROYALTIES:

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1. In general 20% 20% 20% 20% 25%
2. From books, literary works and 10% 10% 10% 10% 25% 20% 20% 25%
musical compositions

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PRIZES (Taxable):
1. P10,000 and below Regular (Progressive) Income Tax rules apply. 25% RIT RIT 25%
2. Above P10,000 20% 20% 20% 20% 25% RIT RIT 25%

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WINNINGS
1. Winnings, in general 20% 20% 20% 20% 25% RIT RIT 25%
2. PCSO and lotto winnings

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a. P10,000 and below in amount Exempt Exempt Exempt Exempt 25% Exempt Exempt 25%
b. More than P10,000 20% 20% 20% 20% 25% 20% 20% 25%
INFORMER’S TAX REWARD 10% regardless of the taxpayer

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*Subject to the tax sparing rule, the country of the NRFC must credit a 10% deemed paid tax against its tax on said dividends.

Requisites on cash informer’s reward

1. Definite sworn information which is not yet in the possession of the BIR.
2. The same lead to the discovery of fraud upon internal revenue laws or provisions thereof.
3. Enforcement results in recovery of revenues, surcharges and fees and or conviction of the guilty party or imposition of any fine or penalty
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4. The informer is other than a/an:
a. Internal Revenue officials or employees
b. Other public officials or employees
c. Relatives of those in a. and b. within the 6 degree of consanguinity
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Cash Reward – Whichever is the lower of the following per case:

1. 10% of revenues, surcharges or fees recovered and or fine or penalty imposed and collected or
2. P1,000,000
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REO for Effectiveness, Efficiency and Convenience! TAX by Rex B. Banggawan, CPA, MBA TAX –H04.1