Amendment on Life Insurance Income Tax

Life insurance companies, domestic or foreign, authorized to do business in the Philippines are subject to a tax of 6.5% on total investment income.
Investment income includes interest, dividends, and rents from all sources, both domestic and foreign.
Purely cooperative life insurance companies or associations are exempt from this tax.
Foreign life insurance companies not doing business in the Philippines are taxed only on investment income derived from the Philippines as other foreign corporations.
Domestic life insurers calculate net investment income by deducting real estate expenses, depreciation, interest on indebtedness (except for exempt obligations), and ordinary and necessary investment expenses from gross investment income.
Foreign life insurers allocate net investment income proportionally based on their Philippine reserves relative to world reserves.

Insurance companies, other than life insurance companies, may deduct net additions to reserve funds and sums paid on policy and annuity contracts (other than dividends) from gross income.
Released reserves are recognized as income in the year they are released.

Mutual fire, employers liability, workmen's compensation, and casualty insurance companies do not report returned premium deposits to policyholders as income.
These mutual companies include income from other sources plus retained portions of premium deposits not used for losses, expenses, or reinsurance reserve.

Gross premiums collected less reinsurance costs are reported as income.
Premium repayments to policyholders and interest between ascertainment and payment are deductible.

Sums deposited with the Philippine government as additions to guarantee or reserve funds are treated as required payments to reserves.