REPUBLIC ACT No.

8424
December 11, 1997
Tax Reform Act of 1997
Ca!ter II " #ENERAL PRINCIPLE$
$ect%o& 2'. General principles of income taxation in the Philippines. Except when
otherwise provided in this Code:
A. A citizen of the Philippines residing therein is taxable on all income derived from sources
within and without the Philippines;
B. A nonresident citizen is taxable onl on income derived from sources within the
Philippines;
C. An individual citizen of the Philippines who is wor!ing and deriving income from abroad as
an overseas contract wor!er is taxable onl on income derived from sources within the
Philippines: Provided" #hat a seaman who is a citizen of the Philippines and who receives
compensation from services rendered abroad as a member of the complement of the
vessel engaged exclusivel in international trade shall be treated as an overseas contract
wor!er;
$. An alien individual" whether a resident or not of the Philippines" is taxable onl on income
derived from the sources within the Philippines;
E. A domestic corporation is taxable on all income derived from sources within and without
the Philippines; and
%. A foreign corporation" whether engaged or not in trade and business in the Philippines" is
taxable onl on income derived from sources within the Philippines.
&ection '(. )ncome #ax *ates.
A. *ates of income tax on individual citizen and individual resident alien of the Philippines.
+, An income tax is hereb imposed:
a. -n the taxable income de.ned in &ection/+ of this Code" other than
income sub0ect to tax under &ubsections B" C and $ of this &ection" derived
for each taxable ear from all sources within and without the Philippines b
ever individual citizen of the Philippines residing therein;
b. -n the taxable income de.ned in &ection /+ of this Code" other than
income sub0ect to tax under subsections B" C and $ of this &ection" derived
for each taxable ear from all sources within the Philippines b an
individual citizen of the Philippines who is residing outside of the Philippines
including overseas contract wor!ers referred to in subsection C of &ection
'/ hereof; and
c.-n the taxable income de.ned in &ection /+ of this Code" other than
income sub0ect to tax under &ubsections B" C and $ of this &ection" derived
from each taxable ear from all sources within the Philippines b an
individual alien who is a resident of the Philippines.
#he tax shall be computed in accordance with and at the rates established in the
following schedule:
1ot over P+2"2223333333333 45
-ver P+2"222 but not over P/2"22233 P422 6+25 of the excess over
P+2"222
-ver P/2"222 but not over P72"22233 P'"422 6 +45 of the excess
over P/2"222