QuestionsQuestions (Commonwealth Act No. 465)
Every inhabitant of the Philippines over eighteen years of age who (1) has been regularly employed on a wage or salary basis for at least thirty consecutive working days in any calendar year at not less than fifty centavos a day; or (2) is engaged in business or occupation; or (3) owns real property with an aggregate assessed value of one thousand pesos or more; or (4) is required by law to file an income tax return.
The annual residence tax is fifty centavos. The annual additional tax is based on a schedule: (a) for each five thousand pesos worth of real property owned during the preceding year—one peso; (b) for each five thousand pesos of gross receipts or earnings from business during the preceding year—one peso; and (c) for each one thousand pesos of salaries or gross receipts/earnings from any profession or occupation during the preceding year—one peso. The additional tax cannot exceed five hundred pesos.
No. Dividends received by the taxpayer from any corporation shall not be considered part of the taxpayer’s gross receipts or earnings for purposes of the additional tax.
It is based on the total property owned by them, or upon the total gross receipts or earnings derived by them.
Every corporation, domestic or resident foreign, engaged in or doing business in the Philippines.
Corporations must pay an annual residence tax of five pesos and an annual additional tax that shall not exceed one thousand pesos.
For each five thousand pesos worth of real property owned during the preceding year—one peso (based on the municipality’s assessment rolls); and for each five thousand pesos of gross receipts or earnings derived from business during the preceding year—one peso.
No. Dividends received by a corporation from another corporation are not considered part of its gross receipts or earnings for purposes of the additional tax.
“Corporation” includes joint-stock company, partnership, joint account (cuenta en participdeion), association, or insurance company, regardless of how created or organized. “Resident foreign” means a foreign corporation engaged in trade or business within the Philippines or having an office or place of business therein.
Exempt are: (1) the United States High Commissioner and members of his staff; (2) commissioned officers of the U.S. Army and Navy; (3) enlisted soldiers, sailors and marines of the U.S. Army and Navy; (4) civilian employees of the military or naval branches of the U.S. Government who came to the Philippines under orders from the U.S. Government; (5) diplomatic and consular representatives and officers of foreign powers; and (6) transient visitors whose stay does not exceed three months.
Liability accrues on January 1 of each year for persons then resident and liable. Delinquency occurs if unpaid on or before the last day of April. Special rules apply to those who arrive to reside on or before June 30 or those who turn eighteen or lose exemption by that date.
If arriving or becoming liable on or before the tenth day of April, delinquency occurs if unpaid by the last day of April. If arriving or becoming liable after the tenth day of April, they have twenty days to pay without becoming delinquent.
There is a surcharge of five percentum every month or fractional part thereof on the unpaid amount. The total surcharge cannot exceed twenty-five percentum.
No. Persons who come to reside in the Philippines or arrive at age eighteen (or otherwise lose exemption) on or after July 1 are not subject to the taxes for that year.
For corporations established or organized on or before June 30, liability attaches for that year; if becoming liable on or before April 10, delinquency occurs if unpaid by April 30 (last day of April). If becoming liable after April 10, they have twenty days to pay without delinquency. Corporations established or organized on or after July 1 are not subject to tax for that year.
When a person liable to the taxes acknowledges documents, takes an oath of office, receives a license/certificate/permit, pays taxes/fees, receives money from public funds, transacts official business, or receives salary/wages, the other party/office dealing with the person must require exhibition of the current residence certificate showing payment of residence taxes. Exception: presentation is not required for voter registration.