Question & AnswerQ&A (Republic Act No. 3841)
Republic Act No. 3841 is an act to amend certain sections of Commonwealth Act No. 466, also known as the National Internal Revenue Code, as amended. Its main purpose is to revise the tax provisions relating to non-resident aliens and foreign corporations not engaged in trade or business in the Philippines.
Non-resident aliens under this Act are individuals who are not engaged in trade or business within the Philippines but receive income from sources within the Philippines.
A tax equal to twenty percent (20%) is levied on the entire income received from all sources within the Philippines by every non-resident alien individual not engaged in trade or business.
If the total income received by such a non-resident alien individual from all sources within the Philippines exceeds twenty-three thousand eight hundred pesos, the rates established in Section 21 of the National Internal Revenue Code shall apply, but the tax under this subsection shall not be less than twenty percent (20%) of the total income.
Income subject to tax includes interest, dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, other fixed or determinable annual or periodical or casual gains, profits and income, and capital gains.
A tax equal to thirty percent (30%) is levied on the amount received by every foreign corporation not engaged in trade or business within the Philippines from all sources within the Philippines.
The tax on foreign corporations not engaged in trade or business within the Philippines is thirty percent (30%) of the income received, which is higher than the twenty percent (20%) rate imposed on non-resident alien individuals.
The types of income subject to taxation are similar to those for non-resident aliens and include interest, dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, other fixed or determinable gains, profits, income, and capital gains derived from sources within the Philippines.
This Act took effect upon its approval on June 22, 1963.
No. The tax provisions in this Act specifically apply to non-resident aliens and foreign corporations not engaged in trade or business within the Philippines.