INCOME TAX ON CORPS
1. Income tax of domestic corps 30%
2. Proprietary educational institutions 10% (income from related activity should not
and hospitals which are nonprofit
3. GOCC’s exempt from tax:
GSIS,SSS,PHIC,LWD
RATES OF TAX ON PASSIVE INCOME RECEIVED BY DOMESTIC CORPORATION
1. Interest/yield from deposits,
depositary substitutes, from trust
funds & royalties
2. Interest income derived from
depositary bank under Expanded
Foreign Currency Deposit System
(EFCDS)
3. Capital gains from sale of Shares of 15%
stock (SOS) not traded in stock
exchange (NTSE)
1. Income derived by depositary bank
under EFCDS from foreign currency
transactions with non residents,
OBU, Local commercial banks
Interest income from foreign
currency loans under EFCDS
Income of nonresident
cops/individuals from transactions w/
depositary banks under EFCDS
2. Intercorporate dividends
3. Capital gains from sale,exchange,
disposition of land/buildings not used
in the business
INCOME TAX ON RESIDENT FOREIGN CORPS
4. Tax on resident foreign corps
engaged in business w/in PH
Exception: Corporations may be allowed to
be taxed 15% of gross income after the ff are
complied with:
1. Tax ratio of 20% of gross national
product (GNP)
2. A ratio of 40% of income tax
collection to total tax revenues
3. A VAT tax effort of 4% of GNP
4. A 0.9% ratio of the Consolidated
Public Sector Financial Position
(CPSFP) to GNP
exceed 50%)
Exception: If gross income on unrelated
trade, business & other activity exceeds 50%
of total gross income = income tax 30%
Exempt from tax
Exception: income derived from activity
conducted for profit & from real or personal
property
20%
Final income tax 15%
Tax exempt except for net income from such
transactions
10%
Tax exempt
Tax exempt
6%
30%
Exception: Corporations may be allowed to
be taxed 15% of gross income after the ff are
complied with:
1. Tax ratio of 20% of gross national
product (GNP)
2. A ratio of 40% of income tax
collection to total tax revenues

5. Interest/yield on deposits/deposit
substitutes/from trust
funds/royalties
6. Tax on branch profits remittances
7. Dividends received by nonresident
foreign corp from a domestic corp
8. Income derived by OBU’s authorized
by BSP from foreign currency
transactions w/ nonresidents, other
OBU’s, LCB, Branches of foreign
banks.
3. A VAT tax effort of 4% of GNP
A 0.9% ratio of the Consolidated Public Sector
Financial Position (CPSFP) to GNP
20%
15%
15% withholding tax provided national law of
the nonresident foreign corp allows taxpayer
clause.
Tax exempt except for net income

Interest income derived from foreign 10%

currency loans granted to residents
other than OBU’s/LCB

Income of nonresident corps/indv Tax exempt

from transactions w/ said OBU

9. Income derived by depositary bank Tax exempt except net income

under EFCDS from foreign currency
transactions w/ NR,OBU’s,LCB,
Branches of foreign banks.

Interest income from foreign 10%

currency loans under EFCDS

10. Income of nonresident Tax exempt

cops/individuals from transactions w/
depositary banks under EFCDS
11. Dividends dividends received by a Tax exempt
domestic corp from another
domestic corp
12. Regional/Area HQ Tax exempt
13. Intercorporate dividends-dividends Tax exempt
received by a resident foreign
corporation from a domestic corp.
14. ROHQ 10%
15. Capital gains from sale of SOS NTSE
Over P100,000 10%
Not over P100,000 5%

16. International carrier 2 ½% on its Gross Philippine Billings

TAX ON NONRESIDENT FOREIGN CORP
17. Tax on nonresident foreign corp not 30%
engaged on T or B in the PH
18. Nonresident cinematographic film 25% of gross income within the PH
owner/lessor/distributor
19. Interest on foreign loans 20%
20. Dividends received by a nonresident 15% withholding tax provided national law of
foreign corp from a domestic corp the nonresident foreign corp allows taxpayer
clause.
21. Intercorporate dividends received 15%
from domestic corps
22. Capital gains from sale of sos ntse
Over P100,000 10%
Not over P100,000 5%

23. Nonresident owner/lessor of vessels 4 ½% of gross rentals/lease/charter fees from

chartered by PH nationals leases or charters to Filipinos or corps
approved by Maritime Industry Authority