Question & AnswerQ&A (Commonwealth Act No. 465)
Every inhabitant of the Philippines over eighteen years of age who has been regularly employed on a wage or salary basis for at least thirty consecutive working days during any calendar year at the rate of not less than fifty centavos a day, is engaged in business or occupation, owns real property with an aggregate assessed value of one thousand pesos or more, or is required by law to file an income tax return.
An annual residence tax of fifty centavos plus an annual additional tax which shall not exceed five hundred pesos based on real property, gross receipts, or earnings as defined in the schedule in the Act.
One peso for every five thousand pesos worth of real property owned, one peso for every five thousand pesos of gross receipts or earnings derived from business in the Philippines, and one peso for every one thousand pesos of salaries, gross receipts, or earnings from exercise of any profession or occupation during the preceding year.
No, dividends received from any corporation are not considered part of gross receipts or earnings for the purpose of computing the additional tax.
Every corporation, domestic or resident foreign, engaged in or doing business in the Philippines shall pay an annual residence tax of five pesos and an additional tax which shall not exceed one thousand pesos calculated similarly based on real property owned and gross receipts or earnings from business in the Philippines.
The term 'corporation' includes joint-stock companies, partnerships, joint accounts (cuenta en participación), associations, or insurance companies, regardless of how they are created or organized.
Exemptions include the United States High Commissioner and staff, commissioned officers and enlisted personnel of the US Army and Navy, civilian employees under US orders, diplomatic and consular representatives of foreign powers, and transient visitors staying not more than three months.
Liability accrues on January 1 for residents and on the day of arrival or ceasing exemption for others within specified dates. Delinquent tax payments incur a 5% monthly surcharge up to 25% total.
The residence certificate evidences payment of the residence tax and must be presented when acknowledging documents before a notary, taking government oaths, receiving licenses or permits, paying taxes or fees, receiving public funds, conducting official business, or receiving salaries or wages.
Using or possessing a certificate to defraud may result in a fine up to 200 pesos or imprisonment up to six months. Falsifying or counterfeiting a certificate can incur fines from 200 to 5000 pesos and imprisonment from two months to five years or both.