The tax on cash and property dividends shall only be imposed on dividends which are declared from profits of corporations made after December 31, 1997. (5) Cash and/or property dividends actually or constructively received from a domestic corporation, joint stock company, insurance or mutual fund companies or on the share of an individual partner in the distributable net income after tax of a partnership (except general professional partnership) or on the share of an individual in the net income after tax of an association, a joint account or a joint venture or consortium of which he is a member or a co-venturer. Three (3) years to less than four (4) years 12% (4) Interest income from long-term deposit or investment in the form of savings, common or individual trust funds, deposit substitutes, investment management accounts and other investments evidenced by certificates in such form prescribed by the Bangko Sentral ng Pilipinas which was pre-terminated by the holder before the fifth (5th) year at the rates herein prescribed to be deducted and withheld from the proceeds thereof based on the length of time that the instrument was held by the taxpayer -įour (4) years to less than five (5) years 5% (3) Interest income received by a resident individual taxpayer from a depository bank under the Foreign Currency Deposit System - Seven and one-half percent (7.5%). (2) Royalties on books, as well as other literary works and musical compositions - Ten percent (10%). 24 (A) of the Code) and other winnings (except Philippine Charity Sweepstakes winnings and lotto winnings) derived from sources within the Philippines - Twenty percent (20%). (1) Interest from any peso bank deposit, and yield or any other monetary benefit from deposit substitutes and from trust funds and similar arrangements royalties (except on books as well as other literary works and musical compositions), prizes (except prizes amounting to ten thousand pesos (P10,000.00) or less which shall be subject to tax under Sec. (A) Income payments to a citizen or to a resident alien individual The following forms of income shall be subject to final withholding tax at the rates herein specified Income Payments Subject to Final Withholding Tax. 2.78 also of these regulations) are creditable in nature. 2.57.2 of these regulations) and compensation income (referred to in Sec. Taxes withheld on income payments covered by the expanded withholding tax (referred to in Sec. 52 of the NIRC, as amended, to report the income and/or pay the difference between the tax withheld and the tax due on the income. The income recipient is still required to file an income tax return, as prescribed in Sec. Under the creditable withholding tax system, taxes withheld on certain income payments are intended to equal or at least approximate the tax due of the payee on said income. For example, if a bank receives income subject to final withholding tax, the same shall be subject to a percentage tax. It does not extend to the payee's other tax liability on said income, such as when the said income is further subject to a percentage tax. The finality of the withholding tax is limited only to the payee's income tax liability on the particular income. The payee is not required to file an income tax return for the particular income. Thus, in case of his failure to withhold the tax or in case of under withholding, the deficiency tax shall be collected from the payor/withholding agent. The liability for payment of the tax rests primarily on the payor as a withholding agent. Under the final withholding tax system the amount of income tax withheld by the withholding agent is constituted as a full and final payment of the income tax due from the payee on the said income. 244 of the National Internal Revenue Code, as amended, in relation to Sections 57 to 59, Sections 78 to 83, Section 114(C) and Sections, 116 to 127 of Republic Act 8424, these regulations are hereby promulgated which shall govern the collection at source on income paid on or after Januand prescribing the Revised Withholding Tax Tables on compensation. TO : All Internal Revenue Officers and Others Concerned 8424, "An Act Amending The National Internal Revenue Code, as Amended" Relative to the Withholding on Income Subject to the Expanded Withholding Tax and Final Withholding Tax, Withholding of Income Tax on Compensation, Withholding of Creditable Value-Added Tax and Other Percentage Taxes
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