Passive Income

Aiyoo! That last post was really sad, so I have to make it up now D:

Passive income

Passive income is subject to a separate and final tax at fixed rates. It is not included in the computation of taxable income from compensation or business income.

Passive income for resident citizens, non-resident citizens, and resident aliens

Interest 

• interest from any bank deposit : 20%
• interest income from depository bank under FCDS :  7.5%, except NRC
• interest from long term deposit : 20%

Royalties

• royalties on books, literary works and musical composition : 10%
• other royalties : 20%

Prizes and winnings

• prizes amounting to less than 10,000PhP are subject to the graduated income tax schedule 
• PCSO and lotto winnings are tax exempt
• prizes and winnings in general : 20%

Cash and/or property dividends 

• dividends received from locally operating company or domestic corporation :  10%
• share of an individual in the distributable net income after tax of a taxable partnership : 10%
• share of an individual in the net income after tax of  an asociation and the likes: 10%

Passive income for Non-Resident Alien Engaged in Trade or Business in the Philippines 

everything mentioned above are taxed 20% noting the following:

• royalties on books, literary works and musical composition : 10%
• prizes amounting to 10,000PhP and below are also taxed at 20%

Passive income for Non-Resident Alien NOT Engaged in Trade or Business in the Philippines

everything is subject to 25% final tax.