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    Inbound 2168611759498459938

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    Marielle
    This document summarizes tax rates for different types of passive income in the Philippines. It outlines tax rates for interest income, royalties, prizes, winnings, dividends, and share of partnership income. Tax rates vary depending on residency classification and income amount. The document also provides definitions and procedures related to final withholding tax, including that the payor is responsible for withholding and remitting the tax to the BIR.

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    Inbound 2168611759498459938

    Uploaded by

    Marielle
    18 views2 pages
    This document summarizes tax rates for different types of passive income in the Philippines. It outlines tax rates for interest income, royalties, prizes, winnings, dividends, and share of partnership income. Tax rates vary depending on residency classification and income amount. The document also provides definitions and procedures related to final withholding tax, including that the payor is responsible for withholding and remitting the tax to the BIR.

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    This document summarizes tax rates for different types of passive income in the Philippines. It outlines tax rates for interest income, royalties, prizes, winnings, dividends, and share of partnership income. Tax rates vary depending on residency classification and income amount. The document also provides definitions and procedures related to final withholding tax, including that the payor is responsible for withholding and remitting the tax to the BIR.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    18 views2 pages

    Inbound 2168611759498459938

    Uploaded by

    Marielle
    This document summarizes tax rates for different types of passive income in the Philippines. It outlines tax rates for interest income, royalties, prizes, winnings, dividends, and share of partnership income. Tax rates vary depending on residency classification and income amount. The document also provides definitions and procedures related to final withholding tax, including that the payor is responsible for withholding and remitting the tax to the BIR.

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    of 2

    TAXATION: 1st CLUSTER Part 4 of 4

    PASSIVE INCOME
    Reviewer: Noelen Monarca Carreon, CPA, MBA

    Passive Income RC/NRC/RA NRA-ETB NRA-NETB


    1. Interest from currency deposits, trust funds and deposit substitutes 20% 20% 25%
    2. Interest Income from a Depository Bank under the Expanded RC - 15%
    Foreign Currency Deposit System NRC - EXEMPT 25%
    EXEMPT
    RA - 15%
    3. Interest Income from long-term deposit or investment in the form of
    savings, common or individual trust funds, deposit substitutes,
    investment management accounts and other investments evidenced by Exempt Exempt 25%
    certificates in such form prescribed by the Bangko Sentral ng
    Pilipinas (BSP)
    * Upon pre-termination before the fifth year, there should be imposed
    on the entire income from the proceeds of the long-term deposit based
    on the remaining maturity thereof:
    Holding Period.
    - Four (4) years to less than five (5) years 5% 5% 25%
    - Three (3) years to less than four (4) years 12% 12% 25%
    - Less than three (3) years 20% 20% 25%
    4. Royalties
    A. In general 20% 20% 25%
    B. Books, Literary, and Musical Composition 10% 10% 25%
    5. Prizes
    A. P10,000 or less BASIC BASIC 25%
    INCOME TAX INCOME TAX
    B. Over P10,000 20% 20% 25%
    4. Winnings
    A. PCSO and Lotto Winnings
    i. Amount ≤ P10,000 EXEMPT EXEMPT 25%
    ii. Amount > P10,000 20% 20% 25%

    B. Other winning (regardless of amount) 20% 20% 25%


    6. Cash and/or Property Dividends actually/constructively received by
    an individual from a domestic corporation/ joint stock company/ 10% 20% 25%
    insurance or mutual fund companies/ Regional Operating Headquarter
    of multinational companies
    7. Share of an individual in the distributable net income after tax of a
    partnership (except GPPs)/ association, a joint account, a joint venture 10% 20% 25%
    or consortium taxable as corporation of which he is a member or co-
    venture

    1. WHAT IS A FINAL WITHHOLDING TAX?


    It is a kind of tax which is prescribed on certain income such as passive income that are derived from the
    Philippine sources.
    income tax to be paid to the government by the payor of the income rather than by the recipient of the income.
    The tax is thus withheld or deducted from the income due to the recipient.
    2. IS FINAL WITHHOLDING TAX CREDITABLE AGAINST INCOME TAX DUE OF PAYEE ON
    INCOME SUBJECT TO REGULAR RATES OF TAX FOR THE TAXABLE YEAR?
    NO.
    3. WHO WITHHOLDS THE FINAL WITHHOLDIN TAX (FWT) UNDER A FINAL WITHHOLDING
    TAX SYSTEM?
    Payor.
    4. WHO IS THE WITHHOLDING TAX AGENT?
    Payor.
    5. WHO SHALL REMIT THE CORRESPONDING TAX WITHHELD TO THE BIR?
    Payor.
    6. IS PAYEE REQUIRED TO FILE AN INCOME TAX RETURN TO THOSE INCOME SUBJECT TO
    FINAL WITTHOLDING TAX?
    NO.
    7. WILL PASSIVE INCOME FORM PART OF THE PAYEE’S TAXABLE INCOME SUBJECT TO
    BASIC INCOME TAX RATES?
    NO.
    8. WHAT IS THE BIR FORM USED FOR THE MONTHLY REMITTANCE OF FINAL INCOME
    TAXES WITHHELD?
    BIR FORM 0619-FQ.
    9. EVERY WHEN IS THE FILING OF THE BIR FORM 0619-FQ?
    Every 10th day of the following month at which the withholding was made.
    10. WHAT IS THE CERTIFICATE USED FOR FINAL TAX WITHHELD AT SOURCE?
    BIR FORM 2306
    11. WHO IS REQUIRED TO ISSUE THE FINAL WITTHOLDING TAX CERTIFICATES TO THE
    PAYEE?
    PAYOR
    12. IS PAYOR REQUIRED TO FILE A QUARTERLY RETURN FOR FINAL INCOME TAXES
    WITHHELD?
    YES.
    13. WHAT IS THE BIR FORM USED FOR THE QUARTERLY REMITTANCE RETURN OF FINAL
    INCOME TAXES WITHHELD
    BIR FORM 1601-FQ
    14. EVERY WHEN IS THE FILING OF BIR FORM 1601-FQ?
    This quarterly withholding tax remittance return shall be filed and the tax paid/remitted not later than the 30th day
    of the month following the close of the quarter during which withholding was made.

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