Income Tax Matrix for Resident Citizens and Nonresident Aliens Engaged in a Phil. Trade or Business

As discussed in Session 3, see income tax matrix for citizens and resident aliens (here) and nonresident aliens engaged in a Philippine trade or business (here).

Note that there are three general categories of income subject to income tax:

Category A: Other income subject to the graduated rates of 5% - 32% (consisting of compensation income, business and professional income, capital gains not subject to final tax, and passive income not subject to final tax). The computation of the income tax is made in the annual income tax return.

Category B: Passive income subject to final withholding tax. The tax is withheld at source and no longer reported in the annual income tax return.

Category C: Capital gains subject to capital gains tax. For sale of shares in a domestic company, the tax is due within 30 days from the date of sale; for sale of Philippine realty, the tax is withheld at source.