Passive Income (Final Tax)

  This is subject to final withholding income tax as follows:    
    Citizen/Res. Alien NRA EB
1. Interest savings deposit (Phil. currency) 20% 20%
2. Interest time deposit (Phil. currency) 20% 20%
3. Yield from deposit substitute or MM placement (Phil. 20% 20%
4. Yield from trust funds or similar arrangements (Phil. 20% 20%
5. Royalties on:    
  a. Books, other literary works and musical compositions   10%


b. All others 10% 20%
6. Prizes, except prizes amounting to P10,000 or less which 20%  
shall be subject to tax as passive income in the AITR. 20% 20%
7. Winnings, except PCS and Lotto winnings. 20% 20%


  1. Interest income from depository bank under the expanded foreign currency deposit system, received by a resident


individual but not by a non-resident individual.                                   7½%                               Exempt

  1. Interest income from long-term deposit or long-term investment in banks (Phil. currency) pre-terminated or


Less than 3 years 20% 20%
3 years to less than 4 years 12% 12%
4 years to less than 5 years 5% 5%
5 years and over Exempt Exempt
  1. Cash and/or property dividend from domestic corporation and distributive share in the net income after income tax of taxable partnership, effective:
    6% 20%
January 1, 1998      
January 1, 1999   8% 20%
January 1, 2000   10% 20%
Tax on dividend shall apply only on income earned by the  
investee  domestic  corporation  on  or  after  January  1,  
11. Income from cinematographic film and similar works   25%

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CPA Mentor,



About Jonathan Ruiz CPA

Entrepreneur, CPA Mentor, Stock market Newbie Mentor, Influential Author and Master's Degree in International Business graduate in Hult International Business School, UK. A father of two lovely daughters.
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