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Tax Review - - Coggle Diagram
Tax Review -
Sources of Income -
- Compensation income;
- Fringe benefits;
- Professional income;
- Income from business;
- Income from dealings in property;
- Passive investment income;
- Annuities, proceeds from life insurance or
other types of insurance;
- Prizes and awards;
- Pensions, retirement benefits, or
separation pay.
- Income from any
Interest Income (Individuals) -
- Currency Bank Deposit
- Depository bank under Expanded FCDU
- Long Term Deposit
- Pre-Terminated
- Other Interest Income within
- Other income without
Currency Bank Deposit (FT) -
- GR - All 20%, FT
- XCPN - except non-resident alien, not engaged - 25%
Depository Bank FCDU - Only resident citizens/aliens, 15% FT
Long term - Only Non-resident alien not engaged is taxed, 25% FT
Pre-Terminated
- GR - 5-12-20% Less than 3 years, 20%, 3-4 12, 4-5, 5
- XCPN - Non-resident alien not engaged - 25%
Other Interest Income
Within PH
- Citizens (Inc. resident alien)- Tax bracket or, 8%
- Aliens -
2a. If engaged, 20% FT
2b. Not engaged - 25% FT
Without - Only resident citizens, 8% or tax bracket
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Royalties -
- In General
- Books/Literary Works/Musical compositions
- Cinematographic films and similar Works
In General -
- GR 20%
- XCPN - NRNETB, 25%
Books -
- GR - 10%
- XPCN - NRNETB 25%
Cinematographic
- GR - 20%
- XCPN - 25% for Non-resident aliens
Prizes & Winnings -
- More than 10k
- Less than 10k
- PCSO lotto Winnings
- Other Prizes/Winnings
10k -
More than -
- GR - 20%
- XCPN - NRNETB 25%
Less than -
- GR - Tax Bracket or 8%
- XCPN - NRNETB 25%
PCSO Lotto & Winnings -
- Less than 10k - Exempt
- More than 10k - 20%
2a. XCPN - NRNETB 25%
Without PH -
- GR - Exempt
- XCPN - Resident Citizen, tax bracket or 8%
Special Rewards
- Cash reward for discovery of violations of NIRC and discovery of smuggled goods → 10% tax
- Informer’s reward → 10%
Dividends -
- Dividends from a domestic corp/share in partnership except GPP
- Other Dividends from foreign corp
- Other dividends from foreign corp in PH
Cash/Property/Share in distriutable net income -
- GR - 10%
- XCPN - Non-resident aliens.
2a. Engaged - 20%
2b. ~Engaged - 25%
Other Dividends
Foreign Corp in PH -
- GR - Tax Bracket or 8%
- XCPN - NRNETB - 25%
Foreign corp outside PH -
- Citizens -RT/8%
- Aliens - Exempt
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Capital Gains Stuff
Gains derived from dealing in property -
- In General
- Sold to Government
- Sold to acquire new/principal residence
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Acquire new Principal Residence - Once every 10 tears only, with proceeds to be used within 18 months from date of disposition
- GR - Exempt
- XCPN - Non-resident aliens, 6%
Shares of Stock -
- Traded through stock exchange (ordinary assets) - 6/10 of 1%
- Not Traded through stock exchange (Capital Assets) - 15%
Corporations
Tax Rate in General Under CREATE Law - Can avail of this OR MCIT, under proper circumstances. Net taxable Income.
- GR - 25%
- XCPN - For domestic, 20% if both: (a) net taxable income P5M or less and; (b) total assets P100M or less
- XCPN 2 - Non-Resident Foreign Corp - 25% of Gross
Tax Rate prior to Create -
- 34% in 1998
- 33% in 1999
- 32% in 2000-2005
- 35 % in 2006-2008
- 30% in 2009 & thereafter
Special Corporations
Domestic
Private Schools/Non-profit Hospitals =
- Proprietary Stock/Non-Profit - 10% Income tax (Now 1% under CREATE)
- Proprietary Non-Stock/Profit OR Stock/Profit - 30% (Now 25% under CREATE)
Exempt -
- Govt Educational institution
- non-Stock-Non-Profit - Exempt IF actually, directly, exclusively related with educ purpose.
GOCCs/Instrumentalities
- Instrumentalities - exempt
- GOCCs - Exempt if, GSIS, SSS, PHIC, HDMF, LWD, otherwise 30%
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MCIT - Not available to NRFC
- 1% (July 1 2020 - June 30, 2023) --> becomes 2% any other time.
BPRT - Applies only to resident-foreign,
- 15% IF remitted connected to business OR applicable tax treaty
- Otherwise, 25% regular taxation
Passive Income -
- Royalties
- Interest Income
- Dividends
- Capital Gains
- MCIT
- BPRT
Interest Income -
- Int. on any currency bank deposit/similar arrangements
- Interest FROM FCDU
- Interest from Foreign Loans
- Interest received by FCDU
- Interest Received by OBU
Currency Bank Deposit/Any other monetary benefit from deposit substitutes -
- GR - 20%
- XCPN - NRFC, 25% Gross
From FCDU -
- Domestic - 15%
- Resident Foreign - 15% (2021) / 7.5 FT prior
Foreign Loans - Only NRFC, 25% Gross
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Royalties -
- GR - 20% FT
- XCPN - Non-resident 30-34 (1998-2009) or, 25% General Rate
Dividends
Domestic Sourced -
- GR - Exempt
- XCPN - Non-resident, General rate 25% effective Jan 1 2021 OR 15% FT
Foreign-Sourced
- GR - Domestic - 0-34 (1998-2009) or, regular rate
- XCPN - Exempt if RR-5-2021
RR-5-2021
- Domestic corporation must own at least 20% of the foreign corporation abroad for at least 2 years at the time of distribution → EXEMPT
- If foreign corporation has been in existence for less than 2 years, 20% since its existence
- Foreign Dividend na 10m pumasok 2021, dapat magamit ko by 2022 as reinvestment in the domestic corporation → EXEMPT
- If di ko magamit, TAXABLE IN YEAR OF RECEIPT 2021 → may penalty na.
Capital Gains
Stock
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Capital Assets -
- GR - 15%, effective April 11 2021
- XCPN - prior to 2021, 5/10%
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Individuals - For compensation income/SEP - Assume FT unless tax bracket
- Tax Bracket - 0-35%
- Optional - 8% on gross sales/receipts IF over P250K and under P3M (No 8% if NRNEB)
2a. If 8% and purely SEP, can claim deduction of P250k. If mixed, no deduction.
Fringe Benefit -
- GMV 35%
- GMV = FMV/0.65
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