Question

what are the two types of taxpayers who are subject to final tax rates on all income derived within the philippines? indicate the applicable tax rates to each

Answer 1

two types of taxpayers who are subject to final tax rates on all income derived within the philippines are INDIVIDUAL AND CORPORATES

1. INDIVIDUAL TAX RATES APPLICABLE

(1) Citizen

(a) Resident21 - on taxable compensation and business income (i.e., gross compensation and/or business income less deductions and personal and additional exemptions)received from all sources within and without the Philippines, the following tax schedule22 shall apply:

(b) Nonresident

On taxable compensation and business income received from all sources within the Philippines - same rates as for resident citizens.

(c) Filipinos employed and occupying the same position as those aliens employed by regional or area headquarters and regional operating headquarters, offshore banking units, petroleum service contractors and subcontractors - same as the rate for resident citizens or 15% of gross compensation income received therefrom.

2. CORPORATE TAX RATES APPLICABLE

a. Corporate Income

(1) Domestic Corporations

(a) In general - 30% upon the taxable income derived during each taxable year from all sources within and without the Philippines by every corporation, organized in, or existing under the laws of the Philippines.

(b) Proprietary Educational Institutions and Hospitals which are nonprofit - 10% on their taxable income from the operation of the educational institution and hospital but if their gross income from unrelated trade, business or other activity exceeds 50% of the total gross income then the regular corporate income tax shall apply

(c) Government-owned or controlled corporations, agencies or instrumentalities, except Government Service Insurance System (GSIS), Social Security System (SSS), Philippine Health Insurance Corporation (PHIC), Local Water Districts (LWD), and Philippine Charity Sweepstakes Office (PCSO) - 30% upon their taxable income derived during each taxable year.

(d) Tax on income derived under the Expanded Foreign Currency Deposit System

Income derived by a depository bank under the expanded foreign currency deposit system from foreign currency transactions with nonresidents, offshore banking units in the Philippines, local commercial banks including branches of foreign banks that may be authorized by the Bangko Sentral ng Pilipinas (BSP) to transact business with foreign currency deposit system units under the EFCDS, except net income from such transactions as may be specified by the Secretary of Finance - exempt.

Interest income from foreign currency loans granted by such depository banks under said expanded system to residents other than offshore banking units in the Philippines or other depository banks under the expanded system - 10% final tax

Income of nonresidents, whether individuals or corporations, from transactions with depository banks under the expanded system - exempt.

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