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Basic Income Tax

This document summarizes basic income tax rules in the Philippines, including: 1) Income is subject to graduated tax rates ranging from 15-35% depending on income level, with the first 250k exempt. 2) Self-employed individuals and professionals pay regular income tax or an 8% tax on gross sales up to 3M, and regular income tax above 3M. 3) Minimum wage earners are exempt from income tax on minimum wage and certain other payments.

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55 views2 pages

Basic Income Tax

This document summarizes basic income tax rules in the Philippines, including: 1) Income is subject to graduated tax rates ranging from 15-35% depending on income level, with the first 250k exempt. 2) Self-employed individuals and professionals pay regular income tax or an 8% tax on gross sales up to 3M, and regular income tax above 3M. 3) Minimum wage earners are exempt from income tax on minimum wage and certain other payments.

Uploaded by

joven umandap
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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BASIC INCOME TAX

- Use the graduated tax rate


- Subject to Basic tax
a. Ordinary income
b. Passive income derived abroad by RC
c. Capital gains not subject to CGT
- Payee who has responsibility to file the return and pay applicable tax

GRADUATED TAX RATE under the Train LAW Taxable year 2023
onwards
Income Taxable year 2018-2020
Not over 250,000 exempt exempt
Over 250,000 but not over 400,000 20% of excess over 250,000 15% of excess over
250K
Over 400,000 but not 800,000 30K + 25% in excess of 400K 22.5K + 20% in
excess of 400k
Over 800K but not over 2M 130K + 30% in excess of 800k 102,500 + 25% in
excess of 800k
Over 2M but not over 8M 490,000 + 32% in excess of 2M 4022.5K +30% in
excess of 2M
Over 8M 2,410,000 + 35% in excess 8M 2,202,500 + 35% in
excess of 8M
After 2022 adjusted every 5years

SELF EMPLOYED AND PROFESSIONALS

Purely SEP

With Gros sales 3M below Regular income tax or 8% tax on gross sales or Receipts and other non-
operating income in excess of 250K.

- Above 3M RIT

MIXED Income Earner

- Compensation – RIT
- Business/professional Income
a. 3M and below – RIT or 8% tax on gross sales or receipts
b. Above 3M – RIT

Minimum wage earners

- Are exempt from income taxes on


a. Minimum wage
b. Holiday pay
c. Overtime pays
d. Night shift differential
e. Hazard pays

Basic income tax of married individuals

- Are required by LAW to file a consolidated ITR, but they shall compute separately their Income
tax individually
- If cannot be identified as income exclusively earned divide Equally
- If no legal separation still required to file ITR because they are jointly and severally liable

Income tax return of Senior citizens and PWD

- For income taxation same manner as, ordinary individual

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