RA 8424: Title III, Chapter I – Estate Tax

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TITLE III – ESTATE & DONOR’S TAX, CHAPTER I – Estate Tax SEC. 84. Rate of Estate Tax. – There shall be levied, assessed, collected and paid upon the transfer of the net estate as determined in accordance with Sections 85 and 86 of every decedent, whether resident or nonresident of the Philippines, a tax at the rate of six percent (6%) based on the value of such net estate. (As amended by RA No. 10963 (December 19, 2017)). SECTION 85.  Gross Estate. – The value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated: Provided, however, That in the case of a nonresident decedent who at the time of his death was not a citizen of the Philippines, only that part of the entire gross estate which

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RA 8424: Title II, Chapter XII – Quarterly Corporate Income Tax Annual Declaration and Quarterly Payments of Income Taxes

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Title II – Income Taxation, CHAPTER XII – Quarterly Corporate Income Tax Annual Declaration and Quarterly Payments of Income Taxes SECTION 74. Declaration of Income Tax for Individuals. – (A) In General. – Except as otherwise provided in this Section, every individual subject to income tax under Sections 24 and 25(A) of this Title, who is receiving self-employment income, whether it constitutes the sole source of his income or in combination with salaries, wages, and other fixed or determinable income, shall make and file a declaration of his estimated income for the current taxable year on or before May 15 of the same taxable year. In general, self-employment income consists of the earnings derived by the individual from the practice of profession or conduct of trade or business carried on by him as a sole proprietor or by a partnership of which he is a member.  Nonresident Filipino citizens, with respect

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RA 8424: Title II, Chapter XI – Other Income Tax Requirements

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Title II – Income Taxation, CHAPTER XI – Other Income Tax Requirements SECTION 67. Collection of Foreign Payments. – All persons, corporations, duly registered general co-partnerships (companias colectivas) undertaking for profit or otherwise the collection of foreign payments of interests or dividends by means of coupons, checks or bills of exchange shall obtain a license from the Commissioner, and shall be subject to such rules and regulations enabling the government to obtain the information required under this Title, as the Secretary of Finance, upon recommendation of the Commissioner, shall prescribe. SECTION 68. Information at Source as to Income Payments. – All persons, corporations or duly registered co-partnerships (companias colectivas), in whatever capacity acting, including lessees or mortgagors of real or personal property, trustees, acting in any trust capacity, executors, administrators, receivers, conservators and employees making payment to another person, corporation or duly registered general co-partnership (compania colectiva), of interests, rents,

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RA 8424: Title II, Chapter X – Estates and Trusts

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Title II – Income Taxation, CHAPTER X – Estates and Trusts SECTION 60. Imposition of Tax. – (A) Application of Tax. – The tax imposed by this Title upon individuals shall apply to the income of estates or of any kind of property held in trust, including: (1) Income accumulated in trust for the benefit of unborn or unascertained person or persons with contingent interests, and income accumulated or held for future distribution under the terms of the will or trust; (2) Income which is to be distributed currently by the fiduciary to the beneficiaries, and income collected by a guardian of an infant which is to be held or distributed as the court may direct; (3) Income received by estates of deceased persons during the period of administration or settlement of the estate; and (4) Income which, in the discretion of the fiduciary, may be either distributed to the beneficiaries or accumulated.

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RA 8424: Title II, Chapter IX – Returns and Payment of Tax

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Title II – Income Taxation, CHAPTER IX – Returns and Payment of Tax SECTION 51.  Individual Return. – (A)       Requirements. – (1)        Except as provided in paragraph (2) of this Subsection, the following individuals are required to file an income tax return: (2)        The following individuals shall not be required to file an income tax return: (3)        The foregoing notwithstanding, any individual not required to file an income tax return may nevertheless be required to file an information return pursuant to rules and regulations prescribed by the Secretary of Finance, upon recommendation of the Commissioner. (4)        The income tax return shall be filed in duplicate by the following persons: (5)        The income tax return (ITR) shall consist of a maximum of four (4) pages in paper form or electronic form, and shall only contain the following information: (B)       Where to File. – Except in cases where the Commissioner otherwise permits,

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RA 8424: Title II, Chapter VIII – Accounting Periods and Methods of Accounting

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Title II – Income Taxation, CHAPTER VIII – Accounting Periods and Methods of Accounting SECTION 43.  General Rule. – The taxable income shall be computed upon the basis of the taxpayer’s annual accounting period (fiscal year or calendar year, as the case may be) in accordance with the method of accounting regularly employed in keeping the books of such taxpayer; but if no such method of accounting has been so employed, or if the method employed does not clearly reflect the income, the computation shall be made in accordance with such method as in the opinion of the Commissioner clearly reflects the income. If the taxpayer’s annual accounting period is other than a fiscal year, as defined in Section 22(Q), or if the taxpayer has no annual accounting period, or does not keep books, or if the taxpayer is an individual, the taxable income shall be computed on the basis

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RA 8424: Title II, Chapter VI – Computation of Gross Income

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Title II – Income Taxation, CHAPTER VI – Computation of Gross Income SECTION 32. Gross Income. – (A) General Definition. – Except when otherwise provided in this Title, gross income means all income derived from whatever source, including (but not limited to) the following items: (B) Exclusions from Gross Income. – The following items shall not be included in gross income and shall be exempt from taxation under this Title: (1) Life Insurance. – The proceeds of life insurance policies paid to the heirs or beneficiaries upon the death of the insured, whether in a single sum or otherwise, but if such amounts are held by the insurer under an agreement to pay interest thereon, the interest payments shall be included in gross income. (2) Amount Received by Insured as Return of Premium. – The amount received by the insured, as a return of premiums paid by him under life

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RA 8424: Title II, Chapter V – Computation of Taxable Income

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Title II – Income Taxation, CHAPTER V – Computation of Taxable Income SEC. 31. Taxable Income Defined. – The term ‘taxable income‘ means the pertinent items of gross income specified in this Code, less deductions, if any, authorized for such types of income by this Code or other special laws. (As amended by RA No. 10963 (December 19, 2017)). (Manual encoding credits: Jacky Margaret Adriano)

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RA 8424: Title II, Chapter IV – Tax on Corporations

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Title II – Income Taxation, CHAPTER IV – Tax on Corporations  SECTION 27.  Rates of Income Tax on Domestic Corporation. – (A) In General. – Except as otherwise provided in this Code, an income tax rate of twenty five percent (25%) effective July 1, 2020, is hereby imposed upon the taxable income derived during each taxable year from all sources within and without the Philippines by every corporation, as defined in Section 22(B) of this Code and taxable under this Title as a corporation, organized in, or existing under the laws of the Philippines. Provided, that corporations with net taxable income not exceeding Five million pesos (P5,000,000.00) and with total assets not exceeding One hundred million pesos (P100,000,000.00), excluding land on which the particular business entity’s office, plants, and equipment are situated during the taxable year for which the tax is imposed, shall be taxed at twenty percent (20%). In

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RA 8424: Title II, Chapter III – Tax on Individuals

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Title II – Income Taxation, CHAPTER III – Tax on Individuals SECTION 24.    Income Tax Rates. – (A) Rates of Income Tax on Individual Citizen and Individual Resident Alien of the Philippines.  (1)  An income tax is hereby imposed: (2) Rates of Tax on Taxable income of individuals. -The tax shall be computed in accordance with and at the rates established in the following schedule: (a) Tax Schedule Effective January 1, 2018 until December 31, 2022: Not over P250,000      0% Over P250,000 but not over P400,000           20% of the excess over P250,000 Over P400,000 but not over P800,000          P30,000 + 25% of the excess over P400,000 Over P800,000 but not over P2,000,000        P130,000 + 30% of the excess over P800,000 Over P2,000,000 but not over P8,000,000     P490,000 + 32% of the excess over P2,000,000 Over P8,000,000         P2,410,000 + 35% of the excess over P8,000,000 Tax Schedule Effective January

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