Income taxation and tax rates in the Philippines

What are the allowable personal and additional exemptions? Individuals who are earning compensation income, engaged in business or deriving income from the practice of profession are entitled to the following Personal Exemptions: For single individual or married individual judicially decreed as legally separated with no qualified dependents P50,000 For head of family P50,000 For each married individual P50,000 (to be claimed only by the spouse deriving gross income) Taxpayers may also claim an Additional Exemption of P25,000 for each qualified dependents, up to four (4) dependents. How is income tax payable computed? The formula to compute the income tax payable is: Gross Income Less: Allowable Deductions (Itemized or Optional) Net Income Less: Personal & Additional Exemptions Net Taxable Income Applicable Tax Rate (see Tax Rate Table below) Income Tax Due Less: Tax Withheld Income Tax Payable What is the income tax rate in the Philippines? For individuals earning purely compensation income and those engaged in business and practice of profession, the applicable tax rate table is as follows:

Taxable More than 0 P10,000 P30,000 P70,000 P140,000 P250,000 P500,000

Income But less than P10,000 P30,000 P70,000 P140,000 P250,000 P500,000

Tax Rate 5% P500 + 10% of the Excess over P10,000 P2,500 + 15% of the Excess over P30,000 P8,500 + 20% of the Excess over P70,000 P22,500 + 25% of the Excess over P140,000 P50,000 + 30% of the Excess over P250,000 P125,000 + 32% of the Excess over P500,000 in 2000 and onward

For domestic corporations, the corporate tax rate is 30% of the Net taxable income from all sources starting January 1, 2009. For proprietary educational institutions and non-stock, non-profit hospitals, the tax rate is 10% of the Net taxable income, provided that the gross income from unrelated trade, business or other activity does not exceed 50% of the total gross income. For GOCCs, agencies & instrumentalities, the tax rate is 32% of the Net taxable income from all sources. For all taxable partnerships, the tax rate is also 32% of the Net taxable income from all sources. International Carriers are taxed 2.5% on their Gross Philippine Billings. For Regional Operating Headquarters (ROHQ), the tax rate is 10% of Taxable Income.