th Comprehensive Tax Reform Program (CTRP)

Final Tax on Passive Income of Domestic and Resident Foreign Corporations

The CTRP provided for a uniform treatment of passive incomes received by domestic and resident foreign corporations and by individuals (Sec. 27 (D).

Interest income from bank deposits, deposit substitutes, trust funds and similar arrangements is subject to a twenty percent (20%) final withholding tax at source

Interest income from FCDU deposits is subject to a seven and one-half percent (71/2%) final withholding tax at source

Capital gains from the sale of stocks which are not traded in the stock market are taxed at five percent (5%) if they are below P100,000 and the amount above this benchmark is subject to ten percent (10%)

Capital gains from stocks which are traded in the stock exchange are subject to a stock transaction tax of one-half of one percent ( ½ of 1 %)

Intercorporate dividends or dividends received by a domestic corporation from another domestic corporation is exempt from the income tax.

Capital gains realized from the sale, exchange, or disposition of lands or buildings which are not actually used in business are treated as capital assets and are imposed a final tax of 6 percent based on the gross selling price or fair market value.

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