TAX BRACKET
For Individuals Earning Purely Compensation Income and Individuals Engaged in
Business and Practice of Profession
Over But Not Over Rate
P10,000 5%
P10,000 P30,000 P500 + 10% of the Excess over P10,000
P30,000 P70,000 P2,500 + 15% of the Excess over P30,000
P70,000 P140,000 P8,500 + 20% of the Excess over P70,000
P140,000 P250,000 P22,500 + 25% of the Excess over P140,000
P250,000 P500,000 P50,000 + 30% of the Excess over P250,000
P500,000 P125,000 + 34% of the Excess over P500,000 in 1998
Note: Effective January 1, 1999, the maximum rate shall be thirty-three percent (33%) and
thirty-two percent (32%) on January 1, 2000.
Note: When the tax due exceeds P2,000.00, the taxpayer may elect to pay in two equal
installments, the first installment to be paid at the time the return is filed and the second
installment on or before July 15 of the same year at the Authorized Agent Bank (AAB) within the
jurisdiction of the Revenue District Office (RDO) where the taxpayer is registered.
Tax Rate Taxable Base
1. Domestic Corporations:
Taxable income from all
a. In General 32%
sources
b. Minimum Corporate Income
2% Gross Income
Tax*
c. Improperly Accumulated Improperly Accumulated
10%
Earnings Taxable Income
2. Proprietary Educational Taxable income from all
10%
Institution sources
3. Non-stock, Non-profit Taxable income from all
10%
Hospitals sources
4. GOCC, Agencies &
Instrumentalities
Taxable income from all
a. In General 32%
sources
b. Minimum Corporate Income
2% Gross Income
Tax*
c. Improperly Accumulated Improperly Accumulated
10%
Earnings Taxable Income
5. National Gov’t. & LGUs
Taxable income from all
a. In General 32%
sources
b. Minimum Corporate Income
2% Gross Income
Tax*
c. Improperly Accumulated Improperly Accumulated
10%
Earnings Taxable Income
6. Taxable Partnerships
Taxable income from all
a. In General 32%
sources
b. Minimum Corporate Income
2% Gross Income
Tax*
c. Improperly Accumulated Improperly Accumulated
10%
Earnings Taxable Income
7. Exempt Corporation
a. On Exempt Activities 0%
Taxable income from all
b. On Taxable Activities 32%
sources
8. General Professional
0%
Partnerships
9. Corporation covered by Rate specified under the
Special Laws respective special laws
Taxable income from all
a. In General 32%
sources
b. Minimum Corporate Income
2% Gross Income
Tax*
c. Improperly Accumulated Improperly Accumulated
10%
Earnings Taxable Income
*Beginning on the 4th year immediately following the year in which such corporation
commenced its business operations, when the minimum corporate income tax is greater than the
tax computed using the normal income tax.
Tax Rate Taxable Base
10. International Carriers 2.5% Gross Philippine Billings
11. Regional Operating Head 10% Taxable Income
12. Offshore Banking Units Gross Taxable Income On Foreign Currency
10%
(OBUs) Transaction
On Taxable Income other than Foreign
32%
Currency Transaction
13. Foreign Currency Deposit Gross Taxable Income On Foreign Currency
10%
Units (FCDU) Transaction
On Taxable Income other than Foreign
32%
Currency Transaction
In General
But Not
Over
Over
P10,000 5%
P10,000 P30,000 P500 + 10% of the Excess over P10,000
P30,000 P70,000 P2,500 + 15% of the Excess over P30,000
P70,000 P140,000 P8,500 + 20% of the Excess over P70,000
P140,000 P250,000 P22,500 + 25% of the Excess over P140,000
P250,000 P500,000 P50,000 + 30% of the Excess over P250,000
P125,000 + 34%* of the Excess over
P500,000
P500,000 in 1998.
Note: Effective January 1, 1999, the maximum rate shall be thirty-three percent (33%) and
thirty-two percent (32%) on January 1, 2000.
Passive Income
1. Interest on any peso bank deposit 20%
2. Royalties (except on books as well as literary & musical composition - 10%) 20%
3. Prizes (except prizes amounting to P10,000 or less -5%) 20%
4. Winnings (except from PCSO and lotto) 20%
5. Interest Income of Foreign Currency Deposit 7.5%
6. Interest from long-term deposit
Holding Period
- Four (4) years to less than five (5) years 5%
- Three (3) years to less than four (4) years 12%
- Less than three (3) years 20%
7. Cash and/or Property Dividends
Beginning January 1, 1998 6%
Beginning January 1, 1999 8%
Beginning January 1, 2000 & thereafter 10%
8. On capital gains presumed to have been realized from sale, exchange or other
6%
disposition of real property (capital asset)
9. On capital gains for shares of stock not traded in the stock exchange
- Not over P100,000 5%
- Any amount in excess of P100,000 10%
B. For Non-Resident Aliens Engaged in Trade or Business
1. On Certain Passive Income* 20%
2. Interest Income from long time deposits
Holding Period
-Four (4) years to less than five (5) years 5%
-Three (3) years to less than four (4) years 12%
-Less than three (3) years 20%
3. On capital gains presumed to have been realized from the sale, exchange or other
6%
disposition of real property
4. On capital gains for shares of stock not traded in the Stock Exchange
- Not over P100,000 5%
- Any amount in excess of P100,000 10%
*Cash and/or Property Dividends, Share in the distributable net income of the partnership,
Interest on any bank deposits, Royalties (except on books as well as literary works and musical
composition), Prizes (except prizes amounting to P10,000 or less), Winnings
C) For Non-Resident Aliens Not Engaged in Trade or Business
1. On the gross amount of income derived from all sources within the
25%
Philippines
2. On capital gains presumed to have been realized from the exchange
6%
or other disposition of real property located in the Phils.
D) Aliens Employed by Regional Headquarters (RHQ), Regional
Operating (ROH), Offshore Banking Units (OBU), Petroleum 15%
Service Contractors and Subcontractors
E) General Professional Partnerships 0%
F) Domestic Corporations
1) a. In General 32%
b. Minimum Corporate Income Tax 2%
c. Improperly Accumulated Earnings 10%
2) Proprietary Educational Institution 10%
3) Non-stock, Non-profit Hospitals 10%
4) GOCC, Agencies & Instrumentalities
a. In General 32%
b. Minimum Corporate Income Tax 2%
c. Improperly Accumulated Earnings 10%
5) National Gov’t & LGUs
a. In General 32%
b. Minimum Corporate Income Tax 2%
c. Improperly Accumulated Earnings 10%
6) Taxable Partnerships
a. In General 32%
b. Minimum Corporate Income Tax 2%
c. Improperly Accumulated Earnings 10%
7) Exempt Corporation
a. On Exempt Activities 0%
b. On Taxable Activities 32%
Rate specified under
8) Corporation covered by Special Laws the respective special
laws
G) Resident Foreign Corporation
1)a. In General 32%
b. Minimum Corporate Income Tax 2%
c. Improperly Accumulated Earnings 10%
2) International Carriers 25%
3) Regional Operating Headquarters 10%
4) Corporation Covered by Special Laws Rate specified under the respective special laws
5) Offshore Banking Units (OBUs) 10%
6) Foreign Currency Deposit Units (FCDU) 10%
