Article 11p. 11

NATIONAL INTERNAL REVENUE CODE TAXATION, TARIFF and CUSTOMS LAWS

multinational companies, or on the share of an individual

in the distributable net income after tax of a partnership

(except a general professional partnership) of which he is

a partner, 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 taxable as a corporation of

which he is a member or co-venturer.

(C) Capital Gains from Sale of Shares of Stock not

Traded in the Stock Exchange . — The provisions of

Section 39(B) notwithstanding, a final tax at the rate of

fifteen percent (15%) is hereby imposed upon the net

capital gains realized during the taxable year from the

sale, barter, exchange or other disposition of shares of

stock in a domestic corporation, except shares sold, or

disposed of through the stock exchange.

Not over P 100,000

On any amount in excess of P 100,000

5%

10%

(as amended by RA No 10963)

(D) Capital Gains from Sale of Real Property. -

(1) In General. - The provisions of Section 39(B)

notwithstanding, a final tax of six percent (6%) based

on the gross selling price or current fair market value

as determined in accordance with Section 6(E) of

this Code, whichever is higher, is hereby imposed

upon capital gains presumed to have been realized

from the sale, exchange, or other disposition of real

property located in the Philippines, classified as

capital assets, including pacto de retro sales and

other

forms of conditional sales, by individuals,

including estates and trusts: Provided, That the tax

liability,

if

any,

on

gains

from

sales

or

other

dispositions of real property to the government or

any of its political subdivisions or agencies or to

government-owned or controlled corporations shall

be determined either under Section 24 (A) or under

this Subsection, at the option of the taxpayer;

(2) Exception. - The provisions of paragraph (1) of

this Subsection to the contrary notwithstanding,

capital gains presumed to have been realized from

the sale or disposition of their principal residence by

natural

persons, the proceeds of which is fully

utilized in acquiring or constructing a new principal

residence within eighteen (18) calendar months

from the date of sale or disposition, shall be exempt

from the capital gains tax imposed under this

Subsection: Provided, That the historical cost or

adjusted basis of the real property sold or disposed

shall be carried over to the new principal residence

built

or

acquired:

Provided,

further,

That

the

Commissioner shall have been duly notified by the

taxpayer within thirty (30) days from the date of sale

or disposition through a prescribed return of his

intention

to

avail

of

the

tax exemption herein

mentioned: Provided, still further, That the said tax

exemption can only be availed of once every ten (10)

years:

Provided,

finally,

That

if

there is no full

utilization of the proceeds of sale or disposition, the

portion of the gain presumed to have been realized

from the sale or disposition shall be subject to

capital gains tax. For this purpose, the gross selling

price or fair market value at the time of sale,

whichever is higher, shall be multiplied by a fraction

which the unutilized amount bears to the gross

selling price in order to determine the taxable

portion and the tax prescribed under paragraph (1)

of this Subsection shall be imposed thereon.

SEC. 25. Tax on Nonresident Alien Individual. -

(A) Nonresident Alien Engaged in trade or Business

Within the Philippines. -

(1) In General. - A nonresident alien individual

engaged in trade or business in the Philippines shall

be subject to an income tax in the same manner as

an individual citizen and a resident alien individual,

on taxable income received from all sources within

the Philippines. A nonresident alien individual who

shall come to the Philippines and stay therein for an

aggregate period of more than one hundred eighty

(180) days during any calendar year shall be deemed

a

'nonresident

alien

doing

business

in

the

Philippines'.

Section

22

(G)

of

this

Code

notwithstanding.

(2)

Cash

and/or

Property

Dividends

from

a

Domestic Corporation or Joint Stock Company, or

Insurance or Mutual Fund Company or Regional

Operating

Headquarter

or

Multinational

Company,

or

Share

in

the

Distributable

Net

Income

of

a

Partnership

(Except

a

General

Professional

Partnership), Joint Account, Joint

Venture Taxable as a Corporation or Association.,

Interests, Royalties, Prizes, and Other Winnings. -

Cash and/or property dividends from a domestic

corporation, or from a joint stock company, or from

an insurance or mutual fund company or from a

regional

operating

headquarter

of multinational

company,

or

the

share

of

a

nonresident

alien

individual in the distributable net income after tax of

a

partnership

(except

a

general

professional

partnership) of which he is a partner, or the share of

a nonresident alien individual in the net income

after tax of an association, a joint account, or a joint

venture taxable as a corporation of which he is a

member or a co-venturer; interests; royalties (in any

form); and prizes (except prizes amounting to Ten

thousand pesos (P10,000) or less which shall be

subject to tax under Subsection (B)(1) of Section 24)

and

other

winnings

(except

Philippine

Charity

Sweepstakes and Lotto winnings); shall be subject to

an income tax of twenty percent (20%) on the total

amount thereof: Provided, however, that royalties on

books as well as other literary works, and royalties on

musical compositions shall be subject to a final tax

of ten percent (10%) on the total amount thereof:

Provided, further, That cinematographic films and

similar works shall be subject to the tax provided

under

Section

28

of

this

Code:

Provided,

furthermore, That 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

(BSP) shall be exempt from the tax imposed under

this Subsection: Provided, finally, that should the

holder of the certificate pre-terminate the deposit or

investment before the fifth (5 th ) year, a final tax shall

be imposed on the entire income and shall be

deducted and withheld by the depository bank from

the proceeds of the long-term deposit or investment

certificate based on the remaining maturity thereof:

Four (4) years to less than five (5) years - 5%;

Three (3) years to less than four (4) years - 12%;

and

Less than three (3) years - 20%.

(3) Capital Gains. - Capital gains realized from sale,

barter or exchange of shares of stock in domestic

corporations not traded through the local stock

exchange, and real properties shall be subject to the

tax prescribed under Subsections (C) and (D) of

Section 24.

(B) Nonresident Alien Individual Not Engaged in Trade

or Business Within the Philippines. - There shall be

levied, collected and paid for each taxable year upon the

entire

income

received

from

all sources within the

Philippines by every nonresident alien individual not

engaged in trade or business within the Philippines as

interest, cash and/or property dividends, rents, salaries,

wages,

premiums,

annuities,

compensation,

remuneration,

emoluments,

or

other

fixed

or

determinable annual or periodic or casual gains, profits,

and income, and capital gains, a tax equal to twenty-five

© Compiled by RGL

11 of 201