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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RA 8424: Title II, Chapter II – General Principles

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CHAPTER II General Principles  SECTION 23.    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 only on income derived from sources within the Philippines; (C) An individual citizen of the Philippines who is working and deriving income from abroad as an overseas contract worker is taxable only on income from sources within the Philippines: Provided, That a seaman who is a citizen of the Philippines and who receives compensation for services rendered abroad as a member of the complement of a vessel engaged exclusively in international trade shall be treated as an overseas contract worker; (D) An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources within

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RA 8424: Title I – Organization and Function of the BIR

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REPUBLIC ACT NO. 8424 (Approved December 11, 1997, Effective January 1, 1998) AN ACT AMENDING THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES (As last amended by RA No. 11976 – Ease of Paying Taxes Act, January 2024) TITLE I Organization and Function of the Bureau of Internal Revenue SECTION 1.    Title of the Code. – This Code shall be known as the National Internal Revenue Code of 1997. SECTION 2.    Powers and Duties of the Bureau of Internal Revenue. -The Bureau of Internal Revenue shall be under the supervision and control of the Department of Finance and its powers and duties shall comprehend the assessment and collection of all national internal revenue taxes, fees, and charges, and the enforcement of all forfeitures, penalties, and fines connected therewith, including the execution of judgments in all cases decided in its favor by the Court of Tax Appeals and

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RA 8424: Title II, Chapter I – Definitions

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CHAPTER I Definitions SECTION 22. Definitions. – When used in this Title: (A) The term ‘person‘ means an individual, a trust, estate, or corporation. (B) The term ‘corporation’ shall include one person corporation, partnerships, no matter how created or organized, joint-stock companies, joint accounts (cuentas en participación), associations, or insurance companies, but does not include general professional partnerships and a joint venture or consortium formed for the purpose of undertaking construction projects or engaging in petroleum, coal, geothermal and other energy operations pursuant to an operating or consortium agreement under a service contract with the Government. ‘General professional partnerships’ are partnerships formed by persons for the sole purpose of exercising their common profession, no part of the income of which is derived from engaging in any trade or business. (As amended by RA 11534 CREATE, March 26, 2021) (C) The term ‘domestic,’ when applied to a corporation, means a corporation, means

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