NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
)
SENATE
S. No. 900
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■22 JUL27 P2:03
RiiCEiV&O BV.
Introduced by Senator PIA S. CAYETANO
AN ACT
AMENDING SECTIONS 22, 24, 25, 27, 28, 32, 34, 37, 38, 39, 42, 51, 52, 54, 
56, 57, 73, 108, 121, 122, 123, 174, 176, 179, 181, 182, 183, 184, 185, 186,
187, 195, 198, AND 199; AND REPEALING SECTIONS 175, 177, 178, 180,
188, 192, AND 193; ALL UNDER REPUBLIC ACT NO. 8424, OTHERWISE 
KNOWN AS THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS 
AMENDED, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
The Comprehensive Tax Reform Program (CTRP) of the previous administration 
has made significant progress to boost government revenues, especially to fund 
flagship infrastructure projects and the universal health care program. Through the 
implementation of those tax reform programs, the government collected P575.8 billion 
in incremental revenues from 2018 to 2021 particularly on Republic Act No. 10963 or 
the "Tax Reform for Acceleration and Inclusion (TRAIN) Law," Republic Act No. 11467 
or the "Sin Tax Reform Act of 2020," and tax amnesty program.1
In the 2022 State of the Nation Address2 of President Ferdinand Marcos, Jr., he 
made mention that his administration will continue to push for the passage of the 
remaining tax reforms under the CTRP, which includes the fourth package or the
1 Rosales, E. (2022, June). Government generates P576 billion from various tax reforms. 
philstar.com/business/2022/06/01/2185088/government-generates-p576-billion-various-tax- 
reforms#:~:text=Finance%20Undersecretary%20Valery%20Brion%20yesterday,laws%20and%20tax 
%20amnesty%20program.
2 Gita-Carlos, R. (July 2022).PBBM urges Congress to pass admin's 19 priority measures. 
https://www.pna.gov.ph/articles/1179709


proposed Passive Income and Financial Intermediary Taxation Act (PIFITA). The 
undersigned, as Chairperson of the Senate Committee on Ways and Means in the 18th 
Congress, conducted hearings on the said tax measure.
This proposed PIFITA bill complements the TRAIN Law by making passive 
income and financial intermediary taxes fairer, more efficient, and competitive 
regionally. It will greatly simplify the taxation of passive income, financial services, 
and transactions. This bill will reduce the number of tax rates and will also harmonize 
the tax rates on interest, dividends, and capital gains, and the business taxes imposed 
on financial intermediaries.3 PIFITA will provide a window of opportunity to achieve 
much-needed tax reform in the financial sector, which is vital in the movement of 
capital to where they are most needed, so that higher, sustainable, and more inclusive 
growth can be achieved.
In view of the foregoing, the approval of this bill is earnestly sought.
PIA S. CAY^ANO/^
3 DOF. Package 4: Passive Income and Financial Intermediary Taxation Act (PIFITA) 
https://taxreform.dof.gov.ph/tax-reform-packages/p4-passive-income-and-financiaI-taxes/


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
)
SENATE
S. No. 900
'j gscaate
(©flU'f of £'1'
'22 JUL27 P2:03
' BY.
Introduced by Senator PIA S. CAYETANO
AN ACT
AMENDING SECTIONS 22, 24, 25, 27, 28, 32, 34, 37, 38, 39, 42, 51, 52, 54, 
56, 57, 73, 108, 121, 122, 123, 174, 176, 179, 181, 182, 183, 184, 185, 186,
187, 195, 198, AND 199; AND REPEALING SECTIONS 175, 177, 178, 180,
188, 192, AND 193; ALL UNDER REPUBLIC ACT NO. 8424, OTHERWISE 
KNOWN AS THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS 
AMENDED, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assem bled:
SECTION. 1. Tide. - This Act shall be known as the Passive Income and 
Financial Intermediary Taxation Act”
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SEC. 2. Declaration of Policy. -The financial sector plays a significant role in
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the long-term growth of the national economy. A key policy consideration is to allow
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the capital market to develop as efficiently as possible, with the least intervention. The
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optimal taxation of capital markets, and the products and transactions that come with
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them, is an essential element in developing the capital market. Towards this end, the
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State recognizes the necessity of a simpler, fairer, more efficient, and regionally more
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competitive tax system for passive income and financial intermediation to encourage
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savings and develop as well as deepen the capital markets. Accordingly, the State
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adopts the following policies:
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1. The State shall promote and develop a tax system that provides
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neutrality in the tax treatment across financial institutions and financial
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instruments.
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2. The State shall endeavor to simplify an otherwise complex tax system
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for easy compliance.
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3. The State shall ensure that the taxation of passive income and financial
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transactions is equitable across all stakeholders and discourages
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arbitrage opportunities.
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4. The State shall promote capital market development and tax
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competitiveness within the context of globalization, increased capital
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mobility, and financial inclusion.
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SEC. 3. Section 22 of the National Internal Revenue Code of 1997, as amended,
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is hereby amended to read as follows:
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SEC. 22. Definitions - When used in this Title:
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(A) XXX
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XXX XXX XXX
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(L) The term 'shares of stock'shd\\\\nc\u6e\ REFERTO shares
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of stock of a corporation, warrants and/or options [to purchase shares
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Of Stock], WHETHER TO BUY OR SELL SECURITIES, FUTURES
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CONTRACTS, AND SUCH OTHER DERIVATIVE SECURITIES
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LISTED AND TRADED IN A LOCAL EXCHANGE OR AN
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ORGANIZED MARKETPLACE, as well as units of participation in a
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partnership (except general professional partnerships), joint stock
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companies, joint accounts, COLLECTIVE INVESTMENT SCHEMES,
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joint ventures taxable as corporations, associations, and recreation or
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amusement clubs (such as golf, polo or similar clubs), and mutual fund
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certificates.
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(M) The term xshareholder shall [include] REFER TO holders
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of a share/s of stock, warrant/s and/or option/s [to purchase shares of
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Stock of a corporation], WHETHER TO BUY OR SELL SECURITIES,
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FUTURES CONTRACTS, AND SUCH OTHER DERIVATIVE
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SECURITIES LISTED AND TRADED IN A LOCAL EXCHANGE OR
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AN ORGANIZED MARKETPLACE, as well as a holder of a unit of
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participation in a partnership (except general professional partnerships).


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in a joint stock company, a joint account, A COLLECTIVE 
INVESTMENT SCHEME, a taxable joint venture, a member of an 
association, recreation or amusement club (such as golf, polo, or similar 
clubs), and a holder of a mutual fund certificate, a member in an 
association, joint-stock company, or insurance company.
XXX XXX XXX
(T) The term securities'SHALL REFER TO [shares 
of stock in a corporation and rights to subscribe for or to receive such 
shares. The term includes bonds, debentures, notes or certificates, or 
other evidence of indebtedness, issued by any corporation, including 
those issued by a government or political subdivision thereof, with 
interest coupons or in registered formC.], SHARES, 
PARTICIPATION, OR INTERESTS IN A CORPORATION OR IN A 
COMMERCIAL ENTERPRISE OR PROFIT-MAKING VENTURE 
EVIDENCED BY A CERTIFICATE, CONTRACT, INSTRUMENTS, 
WHETHER WRITTEN OR ELECTRONIC IN CHARACTER. THESE 
INCLUDE:
(1) 
SHARES OF STOCK, BONDS, DEBENTURES, NOTES, 
EVIDENCES OF INDEBTEDNESS, ASSET-BACKED 
SECURITIES;
(2) 
INVESTMENT 
CONTRACTS, CERTIFICATES OF
INTEREST, OR PARTICIPATION IN A PROFIT SHARING 
AGREEMENT SUCH AS COLLECTIVE INVESTMENT SCHEMES 
OR CERTIFICATE OF DEPOSIT FOR A FUTURE 
SUBSCRIPTION;
(3) 
FRACTIONAL UNDIVIDED INTERESTS IN OIL, GAS, 
OR OTHER MINERAL RIGHTS;
(4) 
CERTIFICATES OF ASSIGNMENTS, CERTIFICATES
OF PARTICIPATION, TRUST CERTIFICATES, VOTING TRUST 
CERTIFICATES, OR SIMILAR INSTRUMENTS;
(5) 
PROPRIETARY 
OR NON-PROPRIETARY
MEMBERSHIP CERTIFICATES IN CORPORATIONS; AND


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(6) OTHER INSTRUMENTS AS MAY BE DETERMINED BY 
THE SECURITIES AND EXCHANGE COMMISSION.
XXX XXX XXX
(V) The term ,i&a/7/r,[means every banking institution, as defined 
in Section 2 Republic Act No. 337, as amended, otherwise known as the 
"General Banking Act." A bank may either be, a commercial bank, a 
thrift bank, a development bank, a rural bank or specialized government 
bank] SHALL REFER TO ENTITIES ENGAGED IN THE LENDING 
OF FUNDS OBTAINED IN THE FORM OF DEPOSITS. BANKS 
SHALL BE CLASSIFIED INTO UNIVERSAL BANKS, COMMERCIAL 
BANKS, AND THRIFT BANKS COMPOSED OF: (A) SAVINGS AND 
MORTGAGE BANKS; AND (B) STOCK SAVINGS AND LOAN 
ASSOCIATIONS; AND (C) PRIVATE DEVELOPMENT BANKS, AS 
DEFINED IN REPUBLIC ACT NO. 7906, OR THE THRIFT BANKS 
ACT; RURAL BANKS, AS DEFINED IN REPUBLIC ACT NO. 7353 
OF THE RURAL BANKS ACT; ISLAMIC BANKS AS DEFINED IN 
REPUBLIC ACT NO. 6848, OR THE CHARTER OF AL AMANAH 
ISLAMIC INVESTMENT BANK OF THE PHILIPPINES; AND 
OTHER CLASSIFICATIONS OF BANKS AS DETERMINED BY THE 
MONETARY BOARD OF THE BANGKO SENTRAL NG PILIPINAS.
(W) The term 'non-bank financial intermediary' [means] 
SHALL REFER TO [a financial intermediary, as defined in Section 
2(D)(C) of Republic Act No. 337, as amended, otherwise known as the 
"General Banking Act," authorized by the Bangko Sentral ng Pilipinas 
(BSP) to perform quasi-banking activities] PERSONS OR ENTITIES 
ENGAGED IN THE BORROWING OF FUNDS, FOR THE 
BORROWER'S OWN ACCOUNT, THROUGH THE ISSUANCE, 
ENDORSEMENT, OR ACCEPTANCE OF DEBT INSTRUMENTS OF 
ANY KIND OTHER THAN DEPOSITS, OR THROUGH THE 
ISSUANCE OF CERTIFICATES OF PARTICIPATIONS, 
CERTIFICATES OF ASSIGNMENT, OR SIMILAR INSTRUMENTS 
WITH RECOURSE, TRUST CERTIFICATES, OR OF REPURCHASE


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AGREEMENTS, FROM TWENTY (20) OR MORE LENDERS AT ANY 
ONE TIME, FOR PURPOSES OF RELENDING OR PURCHASING OF 
RECEIVABLES AND OTHER OBLIGATIONS, BUT DOES NOT 
INCLUDE COMMERCIAL, INDUSTRIAL, AND OTHER NON- 
FINANCIAL COMPANIES, WHICH BORROW FUNDS THROUGH 
ANY OF THESE MEANS FOR THE LIMITED PURPOSE OF 
FINANCING THEIR OWN NEEDS OR THE NEEDS OF THEIR 
AGENTS OR DEALERS.
(X) THE TERM "QUASI-BANK'SHALL REFER TO ENTITIES 
ENGAGED IN THE BORROWING OF FUNDS THROUGH THE 
ISSUANCE, ENDORSEMENT OR ASSIGNMENT WITH RECOURSE 
OR ACCEPTANCE OF DEPOSIT SUBSTITUTES, AS DEFINED IN 
SUBSECTION (Z) HEREOF FOR PURPOSES OF RELENDING OR 
PURCHASING OF RECEIVABLES AND OTHER OBLIGATIONS.
[(X)] (Y) The term "QUASI-BANKING ACTIVITIES'[means] 
SHALL REFER TO borrowing funds from twenty (20) or more 
[personal] INDIVIDUALS or corporate lenders at any one time through 
the issuance, endorsement, or acceptance of debt instruments of any 
kind other than deposits for the borrower's own account, or through the 
issuance of certificates of assignment or similar instruments, with 
recourse, or of repurchase agreements for purposes of relending or 
purchasing receivables and other similar obligations: Provided, however, 
That commercial, industrial and other non-financial companies, which 
borrow funds through any of these means for the limited purpose of 
financing their own needs or the needs of their agents or dealers, shall 
not be considered as performing quasi-banking functions. PROVIDED, 
FURTHER, THAT IF THE INTENTION IS FOR THE DEBT 
INSTRUMENTS TO BE HELD BY MORE THAN NINETEEN (19) 
HOLDERS DURING THE ENTIRE TERM OF THE DEBT 
INSTRUMENT AND IF THE TENOR AND DENOMINATION ARE 
SUCH THAT THEY CAN BE HELD BY MORE THAN NINETEEN (19)


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LENDERS, THEN THE INSTRUMENT SHALL BE CONSIDERED 
DEPOSIT SUBSTITUTES.
[(Y)] (Z) The term 'deposit substitutesr s h a 11 [mean] REFER 
TO an alternative form of obtaining funds from the public (the term 
'public' means borrowing from twenty (20) or more individual or 
corporate lenders at any one time) other than deposits, through the 
issuance, endorsement, or acceptance of debt instruments for the 
borrowers own account, for the purpose of relending or purchasing of 
receivables and other obligations, or financing their own needs or the 
needs of their agent or dealer. These instruments may include, but need 
not be limited to bankers' acceptances, promissory notes, repurchase 
agreements, [including] EXCLUDING reverse repurchase agreements 
entered into by and between the Bangko Sentral ng Pilipinas (BSP) and 
any authorized agent bank, certificates of assignment or participation 
and similar instruments with recourse. DEBT INSTRUMENTS ISSUED 
BY THE GOVERNMENT AND ANY OF ITS AGENCIES AND 
INSTRUMENTALITIES, INCLUDING GOVERNMENT FINANCIAL 
INSTITUTIONS SHALL BE DEEMED ISSUED TO THE PUBLIC AND 
CONSIDERED DEPOSIT SUBSTITUTES. Provided, however, That 
debt instruments issued for interbank call loans with maturity of not 
more than five (5) days to cover deficiency in reserves against deposit 
liabilities, including those between or among banks and quasi-banks, 
shall not be considered as deposit substitute debt instruments.
[(Z)] (AA) The term 'ordinary income' xxx xxx
XXX
[(AA)] (BB) The term 'rank and fiie employees' xxx
xxx xxx
[(BB)] (CC) The term 'mutual fund company' shaW [mean] 
REFER TO ANY INVESTMENT COMPANY WHICH IS OR HOLDS 
ITSELF OUT AS BEING ENGAGED PRIMARILY, OR PROPOSES TO 
ENGAGE PRIMARILY IN THE BUSINESS OF POOLING 
TOGETHER MONEY FROM VARIOUS INVESTORS AND INVESTS,


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REINVESTS, OR TRADES THE SAME IN SECURITIES, WHETHER 
IN STOCKS, BONDS, MONEY MARKET INSTRUMENTS, OTHER 
SECURITIES, CASH, OR ANY OTHER ASSET, OR an open-end and 
close-end investment company as defined under REPUBLIC ACT NO. 
2629, ALSO KNOWN AS the Investment Company Act OF THE 
PHILIPPINES.
[(CC)] (DD) The term 'trade, business or profession' xxx
XXX xxx
[(DD)] (EE) The term 'regional or area headquarters' xxx
xxx xxx
[(EE)] (FF) The term 'regional operating headquarters' xxx
xxx xxx
[(FF)] (GG) The term ['long-term deposit or investment 
certificate' shall refer to certificate of time deposit or investment in the 
form of savings, common or individual trust funds, deposit substitutes, 
investment management accounts and other investments with a 
maturity period of not less than five (5) years, the form of which shall 
be prescribed by the Bangko Sentral ng Pilipinas (BSP) and issued by 
banks only (not by non-bank financial intermediaries and finance 
companies) to individuals in denominations of Ten thousand pesos 
(P10,000) and other denominations as may be prescribed by the 
BSP.] FINANCIAL INSTITUTIONS' OR FINANCIAL 
INTERMEDIARIES' SHALL REFER TO PERSONS OR ENTITIES 
WHOSE PRINCIPAL FUNCTIONS INCLUDE THE BUSINESS OF 
LENDING, FINANCING, INVESTING, OR PLACEMENT OF FUNDS 
OR EVIDENCES OF INDEBTEDNESS OR EQUITY DEPOSITED 
WITH THEM, ACQUIRED BY THEM, OR OTHERWISE COURSED 
THROUGH THEM, EITHER FOR THEIR OWN ACCOUNT OR FOR 
THE ACCOUNT OF OTHERS, AND ARE AUTHORIZED BY THE 
BANGKO SENTRAL NG PILIPINAS OR BY THE SECURITIES AND 
EXCHANGE COMMISSION DEPENDING ON THE GOVERNMENT 
AGENCY AUTHORIZED TO REGULATE THEM. THESE SHALL


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INCLUDE BANKS, QUASI-BANKS, TRUST ENTITIES, 
PAWNSHOPS, FOREIGN EXCHANGE DEALERS, MONEY 
BROKERS, FINANCING COMPANIES, FINANCE LEASING 
COMPANIES, INVESTMENT COMPANIES, AND OTHER ENTITIES 
ENGAGED IN COLLECTIVE INVESTMENT SCHEMES, 
INVESTMENT HOUSES, LENDING INVESTORS OR ENTITIES 
ENGAGED IN FINANCIAL INTERMEDIATION ACTIVITIES, AND 
OTHER TYPES OF BUSINESS THAT MAY BE CLASSIFIED BY THE 
BANGKO SENTRAL NG PILIPINAS OR THE SECURITIES AND 
EXCHANGE COMMISSION AS FINANCIAL INSTITUTIONS.
LIFE AND NON-LIFE INSURANCE COMPANIES, PRE-NEED 
COMPANIES AND HEALTH MAINTENANCE ORGANIZATIONS 
ARE ALSO CONSIDERED FINANCIAL INSTITUTIONS UNDER 
THE SUPERVISION OF THE INSURANCE COMMISSION.
[(GG)] (HH) The term 'statutory minimum wage'xxx xxx
XXX
[(HH)] (II) The term 'minimum wage earner'xxx xxx xxx
(3J) THE TERM 'COLLECTIVE INVESTMENT SCHEMES'OR 
CJS'SHALL REFER TO ANY ARRANGEMENT WHEREBY FUNDS 
ARE SOLICITED FROM THE INVESTING PUBLIC AND POOLED 
TOGETHER FOR THE PURPOSE OF INVESTING, RE-INVESTING, 
OR TRADING IN SECURITIES OR OTHER ASSETS OR DIFFERENT 
CLASSES THEREOF AS ALLOWED UNDER THE LAW, WHICH MAY 
EITHER HAVE A CORPORATE STRUCTURE, SUCH AS AN 
INVESTMENT COMPANY, OR A CONTRACTUAL STRUCTURE, 
SUCH AS A UNIT INVESTMENT TRUST FUND OR SIMILAR 
SCHEME HELD BY A TRUST CORPORATION OR A SEPARATE 
ACCOUNT FUND ESTABLISHED PURSUANT TO A VARIABLE 
UNIT LINKED LIFE INSURANCE POLICY ISSUED BY AN 
INSURANCE COMPANY, AND SUCH OTHER FORMS OF
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COLLECTIVE INVESTMENT SCHEMES AS MAY BE DETERMINED 
BY THE APPROPRIATE GOVERNMENT REGULATORY AGENCIES 
SUCH AS THE BANGKO SENTRAL NG PILIPINAS, THE 
SECURITIES AND EXCHANGE COMMISSION AND THE 
INSURANCE COMMISSION. A CIS MAY EITHER BE OPEN-END 
OR CLOSED-END, DEFINED AS FOLLOWS:
'OPEN-END CIS' SHALL REFER TO A CIS WHERE 
SECURITIES ARE OFFERED AND ARE ALWAYS REDEEMABLE BY 
THE CIS; AND
'CLOSED-END CIS' SHALL REFER TO A CIS WHERE A 
FIXED NUMBER OF SECURITIES ARE OFFERED IN AN INITIAL 
PUBLIC OFFERING AND THEREAFTER MAY BE TRADED IN AN 
ORGANIZED MARKETPLACE AS DETERMINED BY THE 
SECURITIES AND EXCHANGE COMMISSION, BUT MAY NOT BE 
REDEEMED BY THE CIS. A CLOSED-END CIS SHALL NOT BE 
ALLOWED TO INCREASE ITS NUMBER OF SECURITIES.
(KK) THE TERM 'UNIT LINKED INVESTMENT 
INSTRUMENT' SHALL REFER TO A CONTRACTUAL CIS 
ORGANIZED PURSUANT TO A CONTRACT, SUCH AS TRUST 
INDENTURE, OR AS AN INVESTMENT COMPONENT OF AN 
INSURANCE CONTRACT, ENGAGED OR HOLDS ITSELF OUT AS 
BEING ENGAGED, OR PROPOSES TO ENGAGE, IN THE BUSINESS 
OF INVESTING, REINVESTING, OR TRADING IN SECURITIES 
OR OTHER INVESTMENT ASSETS, AND ISSUES UNITS OF 
PARTICIPATION, EACH OF WHICH REPRESENTS AN 
UNDIVIDED INTEREST IN A POOL OF INVESTMENT ASSETS.
(LL) THE TERM 'HOLDING COMPANY'SHML REFER TO 
ANY CORPORATION ORGANIZED TO HOLD THE STOCK OF 
ANOTHER OR OTHER CORPORATIONS, AND OTHER FORMS OF 
HOLDING COMPANIES AS MAY BE DETERMINED BY 
APPROPRIATE GOVERNMENT REGULATORY AGENCIES.


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(MM) THE TERM lDEBT INSTRUMENT SHALL REFER TO 
INSTRUMENTS REPRESENTING BORROWING AND LENDING 
TRANSACTIONS INCLUDING BUT NOT LIMITED TO 
DEBENTURES, CERTIFICATES OF INDEBTEDNESS, DUE BILLS, 
BONDS, LOAN AGREEMENTS, INSTRUMENTS, AND SECURITIES 
ISSUED BY THE GOVERNMENT OR ANY OF ITS 
INSTRUMENTALITIES, DEPOSIT SUBSTITUTES, CERTIFICATES 
OR OTHER EVIDENCES OF DEPOSITS, PROMISSORY NOTES, 
WHETHER NEGOTIABLE OR NON-NEGOTIABLE, OTHER 
SIMILAR INSTRUMENTS, AND OTHER INSTRUMENTS AS MAY 
BE DETERMINED BY APPROPRIATE GOVERNMENT AGENCIES.
(NN) THE TERM 'ORGANIZED MARKETPLACE' SHALL 
REFER TO AN EXCHANGE, AN OVER-THE-COUNTER MARKET, OR 
AN ALTERNATIVE TRADING SYSTEM RECOGNIZED AS SUCH BY 
THE SECURITIES AND EXCHANGE COMMISSION AS AN 
EXCHANGE UNDER REPUBLIC ACT NO. 8799, AS AMENDED, 
AND GOVERNED BY, AMONG OTHERS, TRANSPARENT AND 
BINDING RULES AND MARKET CONVENTIONS ON 
MEMBERSHIP, TRADING, PRICE TRANSPARENCY, TRADE 
REPORTING, MARKET MONITORING AND ORDERLY CONDUCT 
OF THE MARKET WHICH ARE ENFORCEABLE ON THE MEMBERS 
AND PARTICIPANTS.
(00) THE TERM HEALTH INSURANCE PRODUCTS SHALL 
REFER TO THOSE THAT ARE BEING OFFERED AND SOLD BY 
INSURANCE COMPANIES, EITHER LIFE OR NON-LIFE, 
WHEREIN THERE IS A LIST OF COVERED ILLNESSES OF WHICH 
THE COMPANIES ASSUME RISKS AND INDEMNIFY LOSSES 
BROUGHT BY THE SAID COVERED ILLNESSES.
(PP) THE TERM HEALTH MAINTENANCE ORGANIZATION 
(HMO) PRODUCTS SHALL REFER TO PRE-AGREED OR 
DESIGNATED HEALTH CARE SERVICES TO THE ENROLLED 
MEMBERS FOR A FIXED PRE-PAID FEE FOR A SPECIFIED
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PERIOD OF TIME THROUGH THE USE OF SELECTED NETWORK 
OF HEALTH CARE PROVIDERS. HMO PRODUCTS PROVIDE A 
WIDE ARRAY OF MEDICAL, SURGICAL AND HOSPITAL 
SERVICES THAT INCLUDE PREVENTIVE CARE AND WELLNESS 
PROGRAMS AND GENERALLY HAVE NO CASH-OUT 
TRANSACTION.
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SEC. 4. Section 24 (B) and (C) of the National Internal Revenue Code of 1997,
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as amended, is hereby amended to read as follows:
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SEC. 24. Income Tax Rates, -
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(A) Rates of Income Tax on Individual Citizen and Individual
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Resident Alien of the Philippines. -
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XXX XXX XXX
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(B) Rate of Tax on Certain Passive Income: -
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(1) Interests[/ Royaltiesf Prizesf and Other Winnings.^ - A final
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tax at the rate of [twenty percent (20%)] FIFTEEN PERCENT (15%) is
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hereby imposed upon the amount of interest [from any currency bank deposit,
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and yield or any other monetary benefit from deposit substitutes, and from
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trust funds and similar arrangements; royalties, except on books, as well as
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other literary works and musical compositions, which shall be imposed a final
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tax of ten percent (10%); prizes (except prizes amounting to Ten thousand
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pesos (P10,000) or less which shall be subject to tax under Subsection (A) of
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Section 24; and other winnings (except winnings amounting to Ten Thousand
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pesos (P10,000) or less from Philippine Charity Sweepstakes and Lotto which
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shall be exempt), derived from sources within the Philippines:] YIELD, OR
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ANY OTHER MONETARY BENEFIT EARNED OR RECEIVED FROM BANK
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DEPOSIT, DEPOSIT SUBSTITUTE, TRUST FUND, AND SIMILAR
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ARRANGEMENTS. \_Providedf however, That interest income received by an
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• individual taxpayer (except a non-resident individual) from a depository bank
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under the expanded foreign currency deposit system shall be subject to a final
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income tax at the rate of fifteen percent (15%) of such interest income:
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Provided^ further, That interest income from long-term deposit or investment
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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 (5th) 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 (4) years - 12%; and
Less than three (3) years - 20%.]
(2) Cash and/or Property Dividends. - A final tax at the rate of 
[ten percent (10%)] FIFTEEN PERCENT (15%) shall be imposed upon the 
cash and/or property dividends actually or constructively received by an 
individual from a domestic corporation or from a joint stock company, insurance 
or mutual fund companies, ENTITIES ENGAGED IN COLLECTIVE 
INVESTMENT SCHEMES, and regional operating headquarters of 
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] ONE 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] ONE is a member or co­
venturer: PROVIDED, HOWEVER, THAT THE FIFTEEN PERCENT (15%) 
TAX ON DIVIDENDS SHALL APPLY ONLY ON INCOME EARNED ON OR 
AFTER JANUARY 1, 2023. INCOME FORMING PART OF RETAINED 
EARNINGS AS OF DECEMBER 31, 2022, EVEN IF DECLARED OR 
DISTRIBUTED ON OR AFTER JANUARY 1, 2023, SHALL BE SUBJECT 
TO TEN PERCENT (10%) TAX.
LIQUIDATING DIVIDEND SHALL BE SUBJECT TO SECTION 
24(A) BASED ON NET GAIN.
[(C)] (3) Capital Gains from THE Sale, EXCHANGE, BARTER, OR 
DISPOSITION of Shares of Stock not Traded in the Stock Exchange 
OR ORGANIZED MARKETPLACE. - [The provisions of Section 39(B) 
notwithstanding, a] 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
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sale, barter, exchange or other disposition of shares of stock in a domestic 
corporation, except shares sold, or disposed of through A LOCAL [the] stock 
exchange[.] OR AN ORGANIZED MARKETPLACE.
(4) PRESUMPTIVE CAPITAL GAINS FROM THE SALE, 
EXCHANGE, BARTER, OR DISPOSITION OF SHARES OF STOCK 
TRADED IN THE STOCK EXCHANGE OR AN ORGANIZED 
MARKETPLACE. - A FINAL TAX AT THE RATE OF SIX-TENTH OF ONE 
PERCENT (6/10 OF 1%) SHALL BE LEVIED, ASSESSED AND 
COLLECTED ON EVERY SALE, BARTER, EXCHANGE, OR ANY OTHER 
MODE OF DISPOSITION OF SHARES OF STOCK LISTED AND TRADED 
THROUGH A LOCAL STOCK EXCHANGE OR AN ORGANIZED 
MARKETPLACE, AND SHALL BE REDUCED ACCORDING TO THE 
FOLLOWING SCHEDULE:
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JANUARY 1, 2023: FIVE-TENTH OF ONE PERCENT (5/10 OF
1%),
JANUARY 1, 2024: FOUR-TENTH OF ONE PERCENT (4/10 OF
1%),
JANUARY 1, 2025: THREE-TENTH OF ONE PERCENT (3/10 OF
1%),
JANUARY 1, 2026: TWO-TENTH OF ONE PERCENT (2/10 OF
lo/o),
JANUARY 1, 2027: ONE-TENTH OF ONE PERCENT (1/10 OF 1%).
THE TAX SHALL BE BASED ON THE GROSS SELLING PRICE OR 
GROSS VALUE IN MONEY OF THE SHARES OF STOCK SOLD, 
BARTERED, EXCHANGED, OR OTHERWISE DISPOSED OF, TO BE PAID 
BY THE SELLER OR TRANSFEROR: PROVIDED, THAT EFFECTIVE 
JANUARY 1, 2028, EVERY SALE, BARTER, EXCHANGE, OR ANY OTHER 
MODE OF DISPOSITION OF SHARES OF STOCK LISTED AND TRADED 
THROUGH A LOCAL STOCK EXCHANGE OR AN ORGANIZED 
MARKETPLACE SHALL NOT BE SUBJECT TO TAX UNDER SECTION 24 
OF THIS CODE.
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ANY GAIN EARNED FROM SHARES OF STOCK IN A DOMESTIC 
CORPORATION TRADED IN A FOREIGN EXCHANGE, SHALL BE TAXED 
UNDER SUBSECTION (A) OF THIS SECTION.
ANY GAIN REALIZED FROM THE SALE, EXCHANGE, BARTER, OR 
DISPOSITION OF SHARES OF STOCK, LISTED OR UNLISTED, BY A 
DEALER IN SECURITIES LICENSED BY THE APPROPRIATE 
GOVERNMENT REGULATORY AGENCIES TO BUY AND SELL IN 
SECURITIES, FOR THE DEALER'S OWN ACCOUNT IN THE ORDINARY 
COURSE OF BUSINESS, SHALL NOT BE SUBJECT TO TAX UNDER THIS 
SUBSECTION BUT SUBSECTION (A) AS AN ORDINARY INCOME.
(5) 
CAPITAL GAINS FROM SALE, EXCHANGE, TRANSFER, 
BARTER, DISPOSITION OF NON-LISTED AND NON-TRADED DEBT 
INSTRUMENTS AND OTHER SECURITIES NOT INCLUDED IN SECTION 
24(B)(3) AND (4). - A FINAL TAX AT THE RATE OF FIFTEEN PERCENT 
(15%) SHALL BE IMPOSED ON THE NET CAPITAL GAIN EARNED 
FROM A DEBT INSTRUMENT AND OTHER SECURITIES NOT INCLUDED 
IN SUBSECTIONS (B)(3) AND (4), ISSUED BY A CITIZEN OR 
RESIDENT ALIEN, OR BY A DOMESTIC CORPORATION, OR A 
RESIDENT FOREIGN CORPORATION, OR BY THE GOVERNMENT OR 
ANY OF ITS AGENCIES OR INSTRUMENTALITIES.
(6) PRESUMPTIVE CAPITAL GAINS ON LISTED AND TRADED 
DEBT INSTRUMENTS AND OTHER SECURITIES NOT INCLUDED IN 
SECTION 24(B)(3) AND (4) - A FINAL TAX AT THE RATE OF ONE- 
TENTH OF ONE PERCENT (1/10 OF 1%) OF THE GROSS SELLING 
PRICE OR GROSS VALUE IN MONEY OF THE DEBT INSTRUMENT OR 
SECURITIES SOLD, BARTERED, EXCHANGED, OR OTHERWISE 
DISPOSED SHALL BE LEVIED, ASSESSED, AND COLLECTED ON EVERY 
SALE, BARTER, EXCHANGE, OR OTHER DISPOSITION OF DEBT 
INSTRUMENTS AND OTHER SECURITIES, LISTED AND TRADED 
THROUGH A LOCAL STOCK EXCHANGE OR A LICENSED ORGANIZED 
MARKETPLACE, AND SHALL BE PAID BY THE SELLER OR 
TRANSFEROR: PROVIDED, THAT EFFECTIVE JANUARY 1, 2026, EVERY
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SALE, BARTER, EXCHANGE, OR OTHER DISPOSITION OF DEBT 
INSTRUMENTS AND OTHER SECURITIES, LISTED AND TRADED 
THROUGH A LOCAL STOCK EXCHANGE OR A LICENSED ORGANIZED 
MARKETPLACE SHALL NOT BE SUBJECT TO TAX UNDER SECTION 24 
OF THIS CODE. IF TRADED IN A FOREIGN EXCHANGE, THE GAIN 
SHALL BE SUBJECT TO TAX UNDER SUBSECTION (A) HEREOF.
ANY GAIN REALIZED FROM THE SALE, EXCHANGE, BARTER OR 
DISPOSITION OF DEBT INSTRUMENTS AND OTHER SECURITIES, 
LISTED OR UNLISTED, BY A DEALER IN SECURITIES OR OTHER 
ENTITIES LICENSED BY THE APPROPRIATE GOVERNMENT 
REGULATORY AGENCY TO BUY AND SELL IN DEBT INSTRUMENTS 
AND OTHER SECURITIES FOR THE DEALER'S OWN ACCOUNT IN THE 
ORDINARY COURSE OF BUSINESS, SHALL NOT BE SUBJECT TO TAX 
UNDER THIS SUBSECTION BUT TO SECTION 24(A) AS AN ORDINARY 
INCOME.
[(D)](7) Capital Gains from Sale of Real Property. -
[(1)] (a) In General. - [The provisions of Section 39(B) 
notwithstanding, a] 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)] (b) Exception. - xxx xxx xxx
(C) ROYALTIES, PRIZES, AND OTHER WINNINGS - A FINAL TAX 
AT THE RATE OF TWENTY PERCENT (20%) IS HEREBY IMPOSED ON 
THE FOLLOWING INCOME DERIVED FROM SOURCES WITHIN THE
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PHILIPPINES: (1) ROYALTIES EARNED AS PASSIVE INCOME, EXCEPT 
ROYALTIES FROM BOOKS, AS WELL AS OTHER LITERARY WORKS 
AND MUSICAL COMPOSITIONS WHICH SHALL BE SUBJECT TO A 
FINAL TAX OF TEN PERCENT (10%); (2) PRIZES (EXCEPT PRIZES 
AMOUNTING TO TEN THOUSAND PESOS (P10,000) OR LESS) WHICH 
SHALL BE SUBJECT TO TAX UNDER SECTION 24 (A); AND (3) OTHER 
WINNINGS (EXCEPT WINNINGS AMOUNTING TO TEN THOUSAND 
PESOS (P10,000) OR LESS FROM PHILIPPINE CHARITY 
SWEEPSTAKES AND LOTTO WHICH SHALL BE EXEMPT).
10 
SEC. 5. Section 25 (A) and (B) of the National Internal Revenue Code of 1997,
11 
as amended, is hereby amended to read as follows:
12 
SEC. 25. Tax on Nonresident Alien Individual. -
13 
(A) Nonresident Alien Engaged in Trade or Business Within the
14 
Philippines.—
15 
[(1) In General. - ]A nonresident alien individual engaged in trade or
16 
business in the Philippines shall be subject to [an] income tax UNDER
17 
SECTION 24 OF THIS CODE[, in the same manner as an individual citizen
18 
and a resident alien individual,] on taxable income received from all sources
19 
within the Philippines. A nonresident alien individual who shall come to the
20 
Philippines and stay therein for an aggregate period of more than [one hundred
21 
eighty (180)] ONE HUNDRED EIGHTY-THREE (183) days during any
22 
calendar year shall be deemed a 'nonresident alien doing business in the
23 
Philippines', Section 22(G) of this Code notwithstanding.
24 
[(2) Cash and/or Property Dividends from a Domestic Corporation or
25 
Joint Stock Company, or Insurance or Mutual Fund Company or Regional
26 
Operating Headquarter or Multinational Company, or Share in the Distributable
27 
Net Income of a Partnership (Except a General Professional Partnership), Joint
28 
Account, Joint Venture Taxable as a Corporation or Association, Interests,
29 
Royalties, Prizes, and Other Winnings. - Cash and/or property dividends
30 
from a domestic corporation, or from a joint stock company, or from an
31 
insurance or mutual fund company or from a regional operating headquarter of
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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 winnings 
amounting to Ten thousand pesos (P10,000.00) or less from Philippine Charity 
Sweepstakes Office (PCSO) games which shall be exempt); 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, finaiiy. That should the holder of the certificate pre-terminate the 
deposit or investment before the fifth (5th) 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) CapitaiGains. - 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.]
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(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 FINAL tax equal to twenty five 
percent (25%) of such income. Capital gains realized by a nonresident alien 
individual not engaged in trade or business in the Philippines from the sale of 
[shares of stock in any domestic corporation and] real property shall be subject 
to the income tax prescribed under Subsection[s (C) and (D) ] (B) (7) of 
Section 24.
INTEREST, DIVIDENDS AND CAPITAL GAINS ON SALE OF 
SHARES OF STOCK, DEBT INSTRUMENTS, AND OTHER SECURITIES 
SHALL BE SUBJECT TO TAX PRESCRIBED UNDER SECTION 24 (B), OR 
TO THE PROVISIONS OF APPLICABLE TAX TREATY.
XXX XXX XXX
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SEC. 6. Section 27 (D) of the National Internal Revenue Code of 1997, as
20 
amended, is hereby amended to read as follows:
21 
SEC. 27. Rates of Income Tax on Domestic Corporations. —
22 
(A) In General. - Except as otherwise provided in this Code, an
23 
income tax rate of twenty-five percent (25%) effective July 1, 2020, is hereby
24 
imposed upon the taxable income derived during each taxable year from all
25 
sources within and without the Philippines by every corporation, as defined in
26 
Section 22(B) of this Code and taxable under this Title as a corporation,
27 
organized in, or existing under the laws of the Philippines.
28 
XXX XXX XXX
29 
(D) Rates of Tax on Certain Passive Incomes.
30 
[(1) Interest from Deposits and Yield or any other Monetary
31 
Benefit from Deposit Substitutes and from Trust Funds and Similar
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Arrangements, and Royalties. - A final tax at the rate of twenty percent 
(20%) is hereby imposed upon the amount of interest on currency bank deposit 
and yield or any other monetary benefit from deposit substitutes and from trust 
funds and similar arrangements received by domestic corporations, and 
royalties, derived from sources within the Philippines: Provided, however, That 
interest income derived by a domestic corporation from a depository bank 
under the expanded foreign currency deposit system shall be subject to a final 
income tax at the rate of fifteen percent (15%) of such interest income.]
[(2) Capital Gains from the Sale of Shares of Stock Not Traded 
in the Stock Exchange. - A final tax at the rate of fifteen percent (15%) 
shall be imposed on net capital gains realized during the taxable year from the 
sale, exchange or other disposition of shares of stock in a domestic corporation 
except shares sold or disposed of through the stock exchange.]
[(3) Tax on Income Derived under the Expanded Foreign 
Currency Deposit System. - Income derived by a depository bank under 
the expanded foreign currency deposit system from foreign currency 
transactions with nonresidents, offshore banking units in the Philippines, local 
commercial banks including branches of foreign banks that may be authorized 
by the Bangko Sentral ng Pilipinas (BSP) to transact business with foreign 
currency deposit system units and other depository banks under the expanded 
foreign currency deposit system shall be exempt from all taxes, except net 
income from such transactions as may be specified by the Secretary of Finance, 
upon recommendation by the Monetary Board to be subject to the regular 
income tax payable by banks: Provided, however. That interest income from 
foreign currency loans granted by such depository banks under said expanded 
system to residents other than offshore banking units in the Philippines or other 
depository banks under the expanded system shall be subject to a final tax at 
the rate of ten percent (10%).]
[Any income of nonresidents, whether individuals or corporations, from 
transactions with depository banks under the expanded system shall be exempt 
from Income tax.]
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[(4) Intercorporate Dividends. - Dividends received by a domestic 
corporation shall not be subject to tax under this Title: Provided, That for 
foreign-sourced dividends to be exempt, the funds from such dividends actually 
received or remitted into the Philippines are reinvested in the business 
operations of the domestic corporation in the Philippines within the next taxable 
year from the time the foreign-sourced dividends were received and shall be 
limited to funding the working capital requirements, capital expenditures, 
dividend payments, investment in domestic subsidiaries, and infrastructure 
project: Provided, further. That the domestic corporation holds directly at least 
twenty percent (20%) of the outstanding shares of the foreign corporation and 
has held the shareholdings for a minimum of two (2) years at the time of the 
dividends distribution. ]
1) INTERESTS. - A FINAL TAX AT THE RATE OF FIFTEEN 
PERCENT (15%) IS HEREBY IMPOSED UPON THE AMOUNT OF 
INTEREST, YIELD, OR OTHER MONETARY BENEFIT EARNED OR 
RECEIVED FROM A BANK DEPOSIT, DEPOSIT SUBSTITUTE, TRUST 
FUND, AND SIMILAR ARRANGEMENTS.
(2) CASH AND/OR PROPERTY DIVIDENDS, - INTERCORPORATE 
DIVIDENDS OR DIVIDENDS RECEIVED FROM A DOMESTIC 
CORPORATION SHALL NOT BE SUBJECT TO TAX IMPOSED UNDER 
THIS SUBSECTION: PROVIDED, THAT NINETY-FIVE PERCENT (95%) 
OF DIVIDENDS RECEIVED BY A DOMESTIC CORPORATION FROM 
SUBSIDIARY COMPANIES LOCATED OUTSIDE THE PHILIPPINES 
SHALL NOT BE SUBJECT TO TAX: PROVIDED, FURTHER, THAT THE 
DOMESTIC CORPORATION HOLDS DIRECTLY OR INDIRECTLY AT 
LEAST TWENTY PERCENT (20%) SHAREHOLDINGS OF THE 
SUBSIDIARY COMPANY AND HAS HELD THE SHAREHOLDINGS FOR A 
MINIMUM OF TWO (2) YEARS AT THE TIME OF THE DIVIDENDS 
DISTRIBUTION: 
PROVIDED, FURTHERMORE, THAT, THE
SUBSIDIARY OPERATING COMPANY IS SUBJECT TO AT LEAST TEN 
PERCENT (10%) INCOME TAX AND TO WITHHOLDING TAX ON THE 
DIVIDENDS DISTRIBUTED TO THE DOMESTIC CORPORATION,
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UNLESS OTHERWISE EXEMPT UNDER ITS LOCAL LAWS: PROVIDED^ 
FINALLY, THAT, THE LIMITATIONS UNDER SECTION 34(C ) SHALL 
NOT BE OBSERVED IN CONNECTION WITH ANY TAXES PAID OR 
ACCRUED IN ANY FOREIGN COUNTRY IN RESPECT TO SUCH 
DIVIDEND.
LIQUIDATING DIVIDENDS SHALL BE SUBJECT TO SECTION 
27(A) AND BASED ON NET GAIN.
(3) CAPITAL GAINS FROM THE SALE, EXCHANGE, BARTER OR 
DISPOSITION OF SHARES OF STOCK NOT TRADED IN THE STOCK 
EXCHANGE OR AN ORGANIZED MARKETPLACE - 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 MODES OF DISPOSITION 
OF SHARES OF STOCK IN A DOMESTIC CORPORATION, EXCEPT 
SHARES SOLD, OR DISPOSED OF THROUGH A LOCAL STOCK 
EXCHANGE OR AN ORGANIZED MARKETPLACE.
(4) 
PRESUMPTIVE CAPITAL GAINS FROM THE SALE, 
EXCHANGE, BARTER OR DISPOSITION OF SHARES OF STOCK TRADED 
IN THE STOCK EXCHANGE OR AN ORGANIZED MARKETPLACE. - A 
FINAL TAX AT THE RATE OF SIX-TENTH OF ONE PERCENT (6/10 OF 
1%) SHALL BE LEVIED, ASSESSED AND COLLECTED ON EVERY SALE, 
BARTER, EXCHANGE, OR OTHER DISPOSITION OF SHARES OF STOCK 
LISTED AND TRADED THROUGH A LOCAL STOCK EXCHANGE OR AN 
ORGANIZED MARKETPLACE, AND SHALL BE REDUCED ACCORDING 
TO THE FOLLOWING SCHEDULE:
JANUARY 1, 2023: FIVE-TENTH OF ONE PERCENT (5/10 OF
1%);
JANUARY 1, 2024: FOUR-TENTH OF ONE PERCENT (4/10 OF
lo/o),
JANUARY 1, 2025: THREE-TENTH OF ONE PERCENT(3/10 OF
1%),
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JANUARY 1, 2026: TWO-TENTH OF ONE PERCENT (2/10 OF
1%),
JANUARY 1, 2027: ONE-TENTH OF ONE PERCENT (1/10 OF
1%).
THE TAX SHALL BE BASED ON THE GROSS SELLING PRICE OR 
GROSS VALUE IN MONEY OF THE SHARES OF STOCK SOLD, 
BARTERED, EXCHANGED, OR OTHERWISE DISPOSED OF, TO BE PAID 
BY THE SELLER OR TRANSFEROR: PROVIDED, THAT EFFECTIVE 
JANUARY 1, 2028, EVERY SALE, BARTER, EXCHANGE, OR ANY OTHER 
MODE OF DISPOSITION OF SHARES OF STOCK LISTED AND TRADED 
THROUGH A LOCAL STOCK EXCHANGE OR AN ORGANIZED 
MARKETPLACE SHALL NOT BE SUBJECT TO TAX UNDER SECTION 27 
OF THIS CODE.
ANY GAIN EARNED FROM SHARES OF STOCK IN A DOMESTIC 
CORPORATION TRADED IN A FOREIGN EXCHANGE, SHALL BE TAXED 
UNDER SECTION 27 (A) HEREOF.
ANY GAIN REALIZED FROM THE SALE, EXCHANGE, BARTER, OR 
DISPOSITION OF SHARES OF STOCK, LISTED OR UNLISTED, BY A 
DEALER IN SECURITIES LICENSED BY THE APPROPRIATE 
GOVERNMENT REGULATORY AGENCIES TO BUY AND SELL IN 
SECURITIES, FOR HIS OWN ACCOUNT IN THE ORDINARY COURSE OF 
BUSINESS, SHALL NOT BE SUBJECT TO TAX UNDER THIS 
SUBSECTION BUT TO SECTION 27(A) AS AN ORDINARY INCOME.
(5) CAPITAL GAINS FROM SALE, EXCHANGE, TRANSFER, 
BARTER, DISPOSITION OF NON-LISTED AND NON-TRADED DEBT 
INSTRUMENTS AND OTHER SECURITIES NOT INCLUDED IN SECTION 
27(D)(3) AND (4). - A FINAL TAX AT THE RATE OF FIFTEEN PERCENT 
(15%) SHALL BE IMPOSED ON NET CAPITAL GAINS EARNED FROM 
DEBT INSTRUMENT AND OTHER SECURITIES NOT INCLUDED IN 
SECTION 27(D)(3) AND (4), ISSUED BY A CITIZEN OR RESIDENT 
ALIEN, OR BY A DOMESTIC CORPORATION, OR A RESIDENT FOREIGN
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CORPORATION, OR BY THE GOVERNMENT OR ANY OF ITS AGENCIES 
OR INSTRUMENTALITIES.
(6) PRESUMPTIVE CAPITAL GAINS ON LISTED AND TRADED 
DEBT INSTRUMENTS AND OTHER SECURITIES NOT INCLUDED IN 
SECTION 27(D)(3) AND (4)- A FINAL TAX AT THE RATE OF ONE- 
TENTH OF ONE PERCENT (1/10 OF 1%) OF THE GROSS SELLING 
PRICE OR GROSS VALUE IN MONEY OF THE DEBT INSTRUMENT OR 
SECURITIES SOLD, BARTERED, EXCHANGED, OR OTHERWISE 
DISPOSED SHALL BE LEVIED, ASSESSED, AND COLLECTED ON EVERY 
SALE, BARTER, EXCHANGE, OR OTHER DISPOSITION OF DEBT 
INSTRUMENTS AND OTHER SECURITIES, LISTED AND TRADED 
THROUGH A LOCAL EXCHANGE OR AN ORGANIZED MARKETPLACE, 
AND SHALL BE PAID BY THE SELLER OR TRANSFEROR: PROVIDED, 
THAT EFFECTIVE JANUARY 1, 
2028, EVERY SALE, BARTER,
EXCHANGE, OR OTHER DISPOSITION OF DEBT INSTRUMENTS AND 
OTHER SECURITIES, LISTED AND TRADED THROUGH A LOCAL STOCK 
EXCHANGE OR A LICENSED ORGANIZED MARKETPLACE SHALL NOT 
BE SUBJECT TO TAX UNDER SECTION 27 OF THIS CODE. IF TRADED 
IN A FOREIGN EXCHANGE, THE GAIN SHALL BE SUBJECT TO TAX 
UNDER SECTION 27 (A) HEREOF.
ANY GAIN REALIZED FROM THE SALE, EXCHANGE, BARTER, OR 
DISPOSITION OF DEBT INSTRUMENTS AND OTHER SECURITIES, 
LISTED OR UNLISTED, BY A DEALER IN SECURITIES OR OTHER 
ENTITIES LICENSED BY THE APPROPRIATE GOVERNMENT 
REGULATORY AGENCIES TO BUY AND SELL IN DEBT INSTRUMENTS 
AND OTHER SECURITIES, FOR THE DEALER'S OWN ACCOUNT IN THE 
ORDINARY COURSE OF BUSINESS, SHALL NOT BE SUBJECT TO TAX 
UNDER THIS SUBSECTION BUT TO SECTION 27(A) AS AN ORDINARY 
INCOME.
[(5)] (7) Capital Gains Realized from the Sale, Exchange or 
Disposition of Lands and/or Buildings. - A final tax of six percent (6%) is 
hereby imposed on the gain presumed to have been realized on the sale,
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exchange or disposition of lands and/or buildings which are not actually used 
in the business of a corporation and are treated as capital assets, based on the 
gross selling price or fair market value as determined in accordance with 
Section 6(E) of this Code, whichever is higher, of such lands and/or buildings.
(E) ROYALTIES - A FINAL TAX AT THE RATE OF TWENTY 
PERCENT (20%) IS HEREBY IMPOSED ON ROYALTIES EARNED AS 
PASSIVE INCOME.
[(E](F) Minimum Corporate Income Tax on Domestic 
Corporations—
(1) Imposition of Tax. - x x x
(2) Carry Forward of Excess Minimum Tax. — x x x
(3) Relief from the Minimum Corporate Income Tax under
Certain Conditions. - x x x
(4) Gross Income Defined. - x x x
XXX XXX XXX
In the case of taxpayers engaged in the sale of service, 'gross income' 
means gross receipts less sales returns, allowances, discounts and cost of 
services. 'Cost of services' shall mean all direct costs and expenses 
necessarily incurred to provide the services required by the customers and 
clients including (A) salaries and employee benefits of personnel, consultants 
and specialists directly rendering the service and (B) cost of facilities directly 
utilized in providing the service such as depreciation or rental of equipment 
used and cost of supplies: Provided, however, That in the case of banks AND 
OTHER FINANCIAL INTERMEDIARIES, cost of services' shall include 
interest expense.
26 
SEC. 7. Section 28 (A) and (B) of the National Internal Revenue Code of 1997,
27 
as amended, is hereby amended to read as follows:
28 
SEC. 28. Rates of Income Tax on Foreign Corporations. -
29 
(A) Tax on Resident Foreign Corporations. —
30 
(1) In General. - Except as otherwise provided in this Code, a
31 
corporation organized, authorized, or existing under the laws of any foreign
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country, engaged in trade or business within the Philippines, shall be subject 
to an income tax equivalent to twenty-five percent (25%) of the taxable income 
derived in the preceding taxable year from all sources within the Philippines 
effective July 1, 2020.
XXX XXX XXX
(2) 
Minimum Corporate Income Tax on Resident Foreign 
Corporations. — A minimum corporate income tax of two percent (2%) of 
gross income, as prescribed under Section 27[E](F) of this Code, shall be 
imposed, under the same conditions, on a resident foreign corporation taxable 
under paragraph (1) of this Subsection: Provided, That effective July 1, 2020 
until June 30, 2023 the rate shall be one percent (1%).
(3) International Carrier - x x x
[(4) Offshore Banking Units. - The provisions of any law to the contrary 
notwithstanding, income derived by offshore banking units authorized by the 
Bangko Sentral ng Pilipinas (BSP), from foreign currency transactions with 
nonresidents, other offshore banking units, local commercial banks, including 
branches of foreign banks that may be authorized by the Bangko Sentral ng 
Pilipinas (BSP) to transact business with offshore banking units shall be exempt 
from all taxes except net income from such transactions as may be specified 
by the Secretary of Finance, upon recommendation of the Monetary Board 
which shall be subject to the regular income tax payable by banks: Provided, 
however. That any interest income derived from foreign currency loans granted 
to residents other than offshore banking units or local commercial banks, 
including local branches of foreign banks that may be authorized by the BSP to 
transact business with offshore banking units, shall be subject only to a final 
tax at the rate of ten percent (10%).]
[Any income of nonresidents, whether individuals or corporations, from 
transactions with said offshore banking units shall be exempt from income tax.]
[(5)] (4) Taxon Branch Profits Remittances. - Any profit remitted 
by a branch to its head office shall be subject to a tax of fifteen percent (15%) 
which shall be based on the total profits applied or earmarked for remittance
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without any deduction for the tax component thereof, [(except those activities 
which are registered with the Philippine Economic Zone Authority)] The tax 
shall be collected and paid in the same manner as provided in Sections 57 and 
58 of this Code: Provided, That interests, dividends, rents, royalties, including 
remuneration for technical services, salaries, wages, premiums, annuities, 
emoluments or other fixed or determinable annual, periodic or casual gains, 
profits, income and capital gains received by a foreign corporation during each 
taxable year from all sources within the Philippines shall not be treated as 
branch profits unless the same are effectively connected with the conduct of 
its trade or business in the Philippines.
[(6)1(5) Regional or Area Headquarters and Regional Operating 
Headquarters of Multinational Companies. - x x x
[(7) Tax on Certain Incomes Received by a Resident Foreign 
Corporation. - ]
[(a) Interest from Deposits and Yieid or any other Monetary Benefit from 
Deposit Substitutes, Trust Funds and Similar Arrangements and Royalties. - 
Interest from any currency bank deposit and yield or any other monetary 
benefit from deposit substitutes and from trust funds and similar arrangements 
and royalties derived from sources within the Philippines shall be subject to a 
final income tax at the rate of twenty percent (20%) of such interest. Provided, 
however. That interest income derived by a resident foreign corporation from 
a depository bank under the expanded foreign currency deposit system shall 
be subject to a final income tax at the rate of fifteen percent (15%) of such 
interest income.]
[(b) Income Derived under the Expanded Foreign Currency Deposit 
System. - Income derived by a depository bank under the expanded foreign 
currency deposit system from foreign currency transactions with nonresidents, 
offshore banking units in the Philippines, local commercial banks including 
branches of foreign banks that may be authorized by the Bangko Sentral ng 
Pilipinas (BSP) to transact business with foreign currency deposit system units 
and other depository banks under the expanded foreign currency deposit 
system shall be exempt from all taxes, except net income from such
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transactions as may be specified by the Secretary of Finance, upon 
recommendation by the Monetary Board to be subject to the regular income 
tax payable by banks. Provided, however, That interest income from foreign 
currency loans granted by such depository banks under said expanded system 
to residents other than offshore banking units in the Philippines or other 
depository banks under the expanded system shall be subject to a final tax at 
the rate of ten percent (10%).]
[Any income of nonresidents, whether individuals or corporations, from 
transactions with depository banks under the expanded system shall be exempt 
from income tax.]
[(c) Capital Gains from Sale of Shares of Stock Not Traded in the Stock 
Exchange. - A final tax 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.]
[(d) Intercorporate Dividends. - Dividends received by a resident foreign 
corporation from a domestic corporation liable to tax under this Code shall not 
be subject to tax under this Title.]
(B) Tax on Nonresident Foreign Corporation. - 
(1) In General. - Except as otherwise provided in this Code, a foreign 
corporation not engaged in trade or business in the Philippines, effective 
January 1, 2021 shall pay a tax equal to twenty-five percent (25%) of the 
gross income received during each taxable year from all sources within the 
Philippines, such as [interests, dividends,] rents, royalties, salaries, premiums 
(except reinsurance premiums), annuities, emoluments or other fixed or 
determinable annual, periodic or casual gains, profits and income, and capital 
gains, except capital gains subject to tax under subparagraph 5 [(c)].
XXX XXX XXX
29
30
(5) Tax on Certain Incomes Received by a Nonresident Foreign 
Corporation.
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[(a) Interest on Foreign Loans. - A final withholding tax at the rate 
of twenty percent (20%) is hereby imposed on the amount of interest on 
foreign loans contracted on or after August 1, 1986;]
[(b) Intercorporate Dividends. - A final withholding tax at the rate 
of fifteen percent (15%) is hereby imposed on the amount of cash and/or 
property dividends received from a domestic corporation, which shall be 
collected and paid as provided in Section 57(A) of this Code, subject to the 
condition that the country in which the nonresident foreign corporation is 
domiciled, shall allow a credit against the tax due from the nonresident foreign 
corporation taxes deemed to have been paid in the Philippines equivalent to 
fifteen percent (15%), which represents the difference between the regular 
income tax and the fifteen percent (15%) tax on dividends as provided in this 
subparagraph: Provided, That effective July 1, 2020, the credit against the tax 
due shall be equivalent to the difference between the regular income tax rate 
provided in Section 28(B)(1) of this Code and the fifteen percent (15%) tax on 
dividends; ]
[(c) Capitai Gains from Saie of Shares of Stock not Traded in the 
Stock Exchange. - A final tax at the rate of fifteen percent (15%) is hereby 
imposed upon the net capitai gains realized during the taxable year from the 
saie, barter, exchange or other disposition of shares of stock in a domestic 
corporation, except shares sold, or disposed of through the stock exchange.] 
INTERESTS AND CAPITAL GAINS FROM SALE, TRANSFER, 
BARTER, OR DISPOSITION OF SHARES OF STOCK, DEBT 
INSTRUMENTS, DEPOSIT SUBSTITUTES, AND OTHER SECURITIES 
SHALL BE SUBJECT TO TAX UNDER SECTION 27(D)(1), (3), (4), (5) 
AND (6) OF THIS CODE, OR TO THE PROVISIONS OF THE APPLICABLE 
TAX TREATY.
CASH AND/OR PROPERTY DIVIDENDS RECEIVED FROM A 
DOMESTIC CORPORATION SHALL BE SUBJECT TO A FINAL TAX OF 
FIFTEEN PERCENT (15%) OR TO THE PROVISIONS OF THE 
APPLICABLE TAX TREATY.
28


1 
XXX XXX XXX
2 
SEC. 8. Section 32(B)(7)(g) and (h) of the National Internal Revenue Code of
3 
1997, as amended, is hereby amended to read as follows:
4 
SEC. 32. Gross Income. — xxx
5 
(B) Exclusions from Gross Income. - The following items shall not
6 
be included in gross income and shall be exempt from taxation under this Title:
7 
xxx 
xxx 
xxx
8 
(7) Miscellaneous Items. -
9 
xxx 
xxx 
xxx
10 
[(g) Gains from the Sale of Bonds, Debentures or other
11 
Certificate of Indebtedness. - Gains realized from the same or exchange
12 
or retirement of bonds, debentures or other certificate of indebtedness with a
13 
maturity of more than five (5) years.]
14 
(G) INTEREST INCOME FROM, AND GAINS FROM THE SALE,
15 
TRANSFER, OR DISPOSITION OF, PROJECT SPECIFIC BONDS THAT
16 
ARE ISSUED BY THE REPUBLIC OF THE PHILIPPINES OR ANY OF ITS
17 
INSTRUMENTALITIES TO FINANCE CAPITAL EXPENDITURES OR
18 
PROGRAMS COVERED BY THE PHILIPPINE DEVELOPMENT PLAN OR
19 
ITS EQUIVALENT AND OTHER GOVERNMENT PROGRAMS
20 
CONSIDERED TO BE OF HIGH-LEVEL PRIORITY OF THE COUNTRY:
21 
PROVIDED, THAT, THE EXEMPTION SHALL BE UPON THE APPROVAL
22 
BY THE SECRETARY OF FINANCE.
23 
(h) Gains from Redemption of Shares OR UNITS OF
24 
PARTICIPATION in [Mutual Fund.l COLLECTIVE INVESTMENT
25 
SCHEMES - Gains realized by the investor upon redemption of shares of stock
26 
[in a mutual fund company] OR UNITS OF PARTICIPATION IN A
27 
COLLECTIVE INVESTMENT SCHEME as defined [in] UNDER Section 22
28 
[BB] (JJ) of this Code.
29 
xxx 
xxx 
xxx
30 
SEC. 9. Section 34(A), (B), (C) and (E) of the National Internal Revenue Code
31 
of 1997, as amended, is hereby further amended to read as follows:
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SEC. 34. Deductions from Gross Income. - Except for taxpayers 
earning compensation income arising from personal services rendered under 
an employer-employee relationship where no deductions shall be allowed under 
this Section, in computing taxable income subject to income tax under Sections 
24(A); 25(A); 26; 27(A), (B), and (C); and 28(A)(1)[1], there shall be allowed 
the following deductions from gross income;
(A) Expenses. -
(1) Ordinary and Necessary Trade/ Business or Professionai
Expenses. -
(a) 
In General - There shall be allowed as deduction from 
gross income all the ordinary and necessary expenses paid or incurred during 
the taxable year in carrying on or which are directly attributable to, the 
development, management, operation and/or conduct of the trade, business or 
exercise of a profession, including:
XXX XXX XXX
(b) Substantiation Requirements. - No deduction from gross 
income shall be allowed under Subsection (A) hereof unless the taxpayer shall 
substantiate with sufficient evidence, such as official receipts or other adequate 
records: (i) the amount of the expense being deducted, and (ii) the direct 
connection or relation of the expense being deducted to the development, 
management, operation and/or conduct of the trade, business or profession of 
the taxpayer.
(c) Bribes, Kickbacks and Other Simiiar Payments. - No
deduction from gross income shall be allowed under Subsection (A) hereof for 
any payment made, directly or indirectly, to an official or employee of the 
national government, or to an official or employee of any local government unit, 
or to an official or employee of a government-owned or -controlled corporation, 
or to an official or employee or representative of a foreign government, or to a 
private corporation, general professional partnership, or a similar entity, if the 
payment constitutes a bribe or kickback.
XXX XXX XXX
(B) Interest. -
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(1) 
In General. - The amount of interest paid or incurred 
within a taxable year on indebtedness in connection with the taxpayer's 
profession, trade or business shall be allowed as deduction from gross income: 
Provided, however, That the taxpayer's otherwise allowable deduction for 
interest expense shall be reduced by twenty percent (20%) of the interest 
income subjected to final tax: Provided, finaiiy. That if the interest income tax 
is adjusted in the future, the interest expense reduction rate shall be adjusted 
accordingly based on the prescribed standard formula as defined in the rules 
and regulations to be promulgated by the Secretary of Finance, upon 
recommendation of the Commissioner of Internal Revenue: PROVIDED 
FURTHER, THAT EFFECTIVE JANUARY 1, 2023, THE PERCENTAGE 
SHALL BE FIFTY PERCENT (50%).
(2) Exceptions. - No deduction shall be allowed in respect of interest 
under the succeeding subparagraphs:
(a) If within the taxable year an individual taxpayer reporting income on 
the cash basis incurs an indebtedness on which an interest is paid In advance 
through discount or otherwise: Provided, That such interest shall be allowed as 
a deduction in the year the indebtedness is paid: Provided, further, That if the 
indebtedness is payable in periodic amortizations, the amount of interest which 
corresponds to the amount of the principal amortized or paid during the year 
shall be allowed as deduction in such taxable year;
(b) If both the taxpayer and the person to whom the payment has been 
made or is to be made are persons specified under Section 36(B); or
[(c) If the indebtedness is incurred to finance petroleum exploration.]
(3) [Optional] Treatment of Interest Expense RELATED TO 
ACQUISITION OF ASSET - [At the option of the taxpayer, interest] 
INTEREST EXPENSE incurred to acquire property used in trade, 
business or exercise of a profession THAT WILL BENEFIT THE 
BUSINESS LONGER THAN ONE YEAR [may be allowed as a deduction 
or treated as a capital expenditure] SHALL BE CAPITALIZED AND 
THEREAFTER AMORTIZED OR DEPRECIATED AS PART OF THE COST 
OF THE ASSET.
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(E) Bad Debts. -
(1) In General. - xxx
(2) Securities Becoming Worthless. - If securities, as defined in 
Section 22(T) , are ascertained to be worthless and charged off within the 
taxable year and are capital assets, the loss resulting therefrom shall, [in the 
case of a taxpayer other than a bank or trust company incorporated under the 
laws of the Philippines a substantial part of whose business is the receipt of 
deposits, for the purpose of this Title,] be considered as a loss from the sale or 
exchange, OF CAPITAL ASSETS, on the last day of such taxable year[, of 
capital assets]. SECURITIES HELD BY A DEALER IN SECURITIES OR AN 
ENTITY LICENSED BY THE APPROPRIATE GOVERNMENT 
REGULATORY AGENCIES TO BUY AND SELL IN SECURITIES 
INCLUDING BANKS, AND OTHER FINANCIAL INTERMEDIARIES, 
SHALL BE CONSIDERED ORDINARY ASSETS, AND SECURITIES HELD 
THAT ARE ASCERTAINED TO BE WORTHLESS SHALL BE CONSIDERED 
ORDINARY LOSSES THAT ARE ALLOWED AS DEDUCTION FROM 
TAXABLE INCOME.
19 
XXX xxx xxx
20 
SEC. 10. Section 37 (A) and (B) of the National Internal Revenue Code of 1997,
21 
as amended, is hereby amended to read as follows:
22 
SEC. 37. Special Provisions Regarding Income and Deductions
23 
of Insurance Companies^ Whether Domestic or Foreign. -
24 
(A) Special Deductions Allowed to Insurance Companies,^ PRE-
25 
NEED COMPANIES, AND PENSION FUNDS. ~ In the case of insurance
26 
companies, PRE-NEED COMPANIES, AND PENSION FUNDS, whether
27 
domestic or foreign doing business in the Philippines, the net additions, if any,
28 
required by law to be made within the year to reserve funds and the sums other
29 
than dividends paid within the year on policy and annuity contracts may be
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deducted from their gross income. Provided, however, That the released 
reserve be treated as income for the year of release.
(B) Mutual Insurance Companies. - In the case of MUTUAL LIFE, 
mutual fire and mutual employers' liability and mutual workmen's compensation 
and mutual casualty insurance companies requiring their members to make 
premium deposits to provide for losses and expenses, said companies shall not 
INCLUDE [return] as income any portion of the premium deposits returned to 
their policyholders, but shall INCLUDE [return] as taxable income all income 
received by them from all other sources plus such portion of the premium 
deposits as are retained by the companies for purposes other than the payment 
of losses and expenses and reinsurance reserves.
XXX XXX XXX
13 
SEC. 11. Section 38 (A) of the National Internal Revenue Code of 1997, as
14 
amended, is hereby amended to read as follows:
15 
SEC. 38. Losses from Wash Sales of Stock or Securities. -
16 
(A) In the case of any loss claimed to have been sustained from any sale
17 
or other disposition of shares of stock or securities where it appears that within
18 
a period beginning thirty (30) days before the date of such sale or disposition
19 
and ending thirty (30) days after such date, the taxpayer has acquired (by
20 
purchase or by exchange upon which the entire amount of gain or loss was
21 
recognized by law), or has entered into a [contact] CONTRACT or option so
22 
AS to acquire, substantially identical stock or securities, then no deduction for
23 
the loss shall be allowed under Section 34 unless the claim is made by a dealer
24 
in stock or securities OR BY ANY ENTITY OR FINANCIAL INTERMEDIARY
25 
DULY LICENSED BY THE APPROPRIATE GOVERNMENT REGULATORY
26 
AGENCIES TO BUY AND SELL IN SECURITIES EITHER FOR THE
27 
ENTITY'S OWN ACCOUNT OR FOR THE ACCOUNT OF OTHERS and with
28 
respect to a transaction made in the ordinary course of the business of such
29 
dealer.
30 
XXX XXX XXX
33


1 
SEC. 12. Section 39 of the National Internal Revenue Code of 1997, as
2 
amended, is hereby amended to read as follows:
3 
SEC. 39. Capital Gains and Losses. -
4 
(A) Definitions. - As used in this Title -
5 
XXX XXX XXX
6 
[(B) Percentage Taken Into Account. - In the case of a taxpayer,
7 
other than a corporation, only the following percentages of the gain or loss
8 
recognized upon the sale or exchange of a capital asset shall be taken into
9 
account in computing net capital gain, net capital loss, and net income:]
10 
[(1) One hundred percent (100%) if the capital asset has been held for
11 
not more than twelve (12) months; and]
12 
[(2) Fifty percent (50%) if the capital asset has been held for more than
13 
twelve (12) months;]
14 
[(C)] (B) Limitation on Capital Losses. - Losses from sales or
15 
exchanges of capital assets shall be allowed only to the extent of the gains from
16 
such sales or exchanges. If a [bank or trust company incorporated under the
17 
loss of the Philippines, a substantial part of whose business is the receipt of
18 
deposits,] DEALER IN SECURITIES OR OTHER ENTITIES OR FINANCIAL
19 
INTERMEDIARIES DULY LICENSED BY THE APPROPRIATE
20 
GOVERNMENT REGULATORY AGENCIES TO TRADE IN SECURITIES,
21 
sells any bond, debenture, note, or certificate or other evidence of indebtedness
22 
issued by any corporation[ (], including one issued by a government or political
23 
subdivision thereof[)], with interest coupons or in registered form, any loss
24 
resulting from such sale shall not be subject to the foregoing limitation and
25 
shall not be included in determining the applicability of such limitation to other
26 
losses.
27 
[(D) Net Capita! Loss Carry-over. - If any taxpayer, other than a
28 
corporation, sustains in any taxable year a net capital loss, such 
loss (in an
29 
amount not in excess of the net income for such year) shall be treated 
in the
30 
succeeding taxable year as a loss from the sale or exchange of a capital asset
31 
held for not more than twelve (12) months.]
32 
[(E)](C) Retirement of Bonds, etc. - x x x
34


[(F) Gains or Losses from Short Sales, Etc, - For purposes of this
Title -
(1) Gains or losses from short sales of property shall be considered as 
gains or losses from sales or exchanges of capital assets; and
(2) Gains or losses attributable to the failure to exercise privileges or 
options to buy or sell property shall be considered as capital gains or losses.]
7 
SEC. 13. Section 42(A)(1), (2) and (B)(2) of the National Internal Revenue
8 
Code of 1997, as amended, is hereby amended to read as follows:
9 
SEC. 42. Income from Sources Within the Philippines. -
10 
(A) Gross Income from Sources Within the Philippines. - The
11 
following items of gross income shall be treated as gross income from sources
12 
within the Philippines:
13 
(1) Interests. - Interests AND YIELD [derived from sources within
14 
the Philippines, and interests on] FROM DEBT INSTRUMENTS, BANK
15 
DEPOSITS, DEPOSIT SUBSTITUTES, TRUST FUNDS, AND SIMILAR
16 
ARRANGEMENTS SUCH AS bonds, notes or other interest-bearing
17 
obligations of residents, corporate or otherwise[;], INCLUDING DEBT
18 
INSTRUMENTS OR DEBT SECURITIES ISSUED BY THE GOVERNMENT
19 
OR ANY OF ITS AGENCIES OR INSTRUMENTALITIES;
20 
(2) Dividends. - The amount received as dividends:
21 
(a) From a domestic corporation; and
22 
(b) From a foreign corporation, [ unless less ] WITH AT LEAST [than]
23 
fifty percent (50%) of the gross income of such foreign corporation for the
24 
three-year period ending with the close of its taxable year preceding the
25 
declaration of such dividends (or for such part of such period as the corporation
26 
has been in existence) was derived from sources within the Philippines as
27 
determined under the provisions of this Section; but only in an amount which
28 
bears the same ratio to such dividends as the gross income of the corporation
29 
for such period derived from sources within the Philippines bears [to] ON its
30 
gross income from all sources.
31 
XXX XXX XXX
35


1 
(B) Taxable Income from Sources Within the Philippines, -
2 
(1) 
General Rule, —
3 
XXX XXX XXX
4 
(2) Exception. — No deductions for interest paid or incurred abroad shall
5 
be allowed from the item of gross income specified in Subsection (A) unless
6 
indebtedness was actually incurred to provide funds for use in connection with
7 
the conduct or operation of trade or business in the Philippines[.], OR ON A
8 
TRADE OR BUSINESS OUTSIDE THE PHILIPPINES: PROVIDED, THAT
9 
INCOME GENERATED OR RECEIVED FROM THE USE OF SUCH FUNDS
10 
IN CONNECTION WITH THE CONDUCT OR OPERATION OF TRADE OR
11 
BUSINESS IN THE PHILIPPINES IS A TAXABLE INCOME IN THE
12 
PHILIPPINES.
13 
SEC. 14. Section 51(C)(2) of the National Internal Revenue Code of 1997, as
14 
amended, is hereby amended to read as follows:
15 
SEC. 51. Individual Return. -
16 
(A) Requirements. - x x x
17 
(B) Where to file. - x x x
18 
(C) When to File. - x x x
19 
(1) XXX
20 
(2) Individuals subject to tax on capital gains:
21 
(a) From the sale or exchange of shares 
of stock OR DEBT
22 
INSTRUMENTS AND OTHER SECURITIES not traded [thru] THROUGH a
23 
local [stock] exchange OR AN ORGANIZED MARKETPLACE as prescribed
24 
under [Section] SECTIONS 24[(C)](B) (3) AND (5), AND 25(A) AND (B),
25 
[shall file] a return SHALL BE FILED within thirty (30) days after each
26 
transaction and a final consolidated return on or before April 15 of each year
27 
covering all stock transactions of the preceding taxable year; and
36


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(B) FROM THE SALE, EXCHANGE, OR BARTER OF SHARES OF 
STOCK OR DEBT INSTRUMENTS AND OTHER SECURITIES TRADED 
THROUGH A LOCAL EXCHANGE ORAN ORGANIZED MARKETPLACE AS 
PRESCRIBED UNDER SECTIONS 24(B)(4) AND (6), AND 25(A) AND 
(B), THE TAX SHALL BE COLLECTED BY THE BROKER WHO EFFECTED 
THE SALE, AND SHALL BE REMITTED TO THE BUREAU OF INTERNAL 
REVENUE WITHIN FIVE (5) BANKING DAYS FROM THE DATE OF 
COLLECTION THEREOF. THE BROKER SHALL LIKEWISE SUBMIT ON 
MONDAYS OF EACH WEEK TO THE SECRETARY OF THE LOCAL 
EXCHANGE OR ORGANIZED MARKETPLACE OF WHICH THE BROKER 
IS A MEMBER, A TRUE AND COMPLETE RETURN WHICH SHALL 
CONTAIN A DECLARATION OF ALL THE TRANSACTIONS EFFECTED 
DURING THE PRECEDING WEEK, AND OF ALL TAXES COLLECTED AND 
TURNED OVER TO THE BUREAU OF INTERNAL REVENUE.
[(b)] (C) From the sale or disposition of real property under Section 
24[(D)] (B)(7) shall file a return within thirty (30) days following each sale or 
other disposition.
18 
SEC. 15. Section 52(A) and (D) of the National Internal Revenue Code of 1997,
19 
as amended, is hereby amended to read as follows:
20 
SEC. 52. Corporation Returns. -
21 
(A) Requirements. — Every corporation AS DEFINED UNDER
22 
SECTION 22(B) OF THIS CODE, AND subject to the tax herein imposed,
23 
except foreign corporations not engaged in trade or business in the Philippines,
24 
shall render, in duplicate, a true and accurate quarterly income tax return and
25 
final or adjustment return in accordance with the provisions of Chapter XII of
26 
this Title. The income tax return shall consist of a maximum of four (4) pages
27 
in paper form or electronic form, be filed by the president, vice-president or
28 
other principal officer, shall be sworn to by such officer and by the treasurer or
29 
assistant treasurer, and shall only contain the following information:
30 
(1) Corporate profile and information;
37


(2) Gross sales, receipts or income from services rendered, or conduct 
of trade or business, except income subject to final tax as provided under this 
Code;
(3) Allowable deductions under this Code;
(4) Taxable income as defined in Section 31 of this Code; and
(5) Income tax due and payable.
Provided, That the foregoing provisions shall not affect the 
implementation of Republic Act No. 10708 or TIMTA.
9
10
11
12
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14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
XXX XXX XXX
(D) Return on Capital Gains Realized from Sale of Shares of 
Stock, DEBT INSTRUMENTS, AND OTHER SECURITIES not Traded in 
the Local [Stock] Exchange OR AN ORGANIZED MARKETPLACE. - 
Every corporation deriving capital gains from the sale or exchange of shares of 
stock, DEBT INSTRUMENTS AND OTHER SECURITIES not traded [thru] 
THROUGH a local [stock] exchange OR AN ORGANIZED MARKETPLACE 
as prescribed under SECTIONS 27(D)(3), AND (5), AND 28 [Sections 
24(C), 25(A)(3), 27(E)(2), 28(A)(8)(c) and 28(B)(5)(c),] shall file a return 
within thirty (30) days after each transaction and a final consolidated return of 
ail transactions during the taxable year on or before the fifteenth (15th) day of 
the fourth (4th) month following the close of the taxable year.
(E) RETURN ON CAPITAL GAINS REALIZED FROM SALE OF 
SHARES OF STOCK, DEBT INSTRUMENTS, AND OTHER SECURITIES 
TRADED IN A LOCAL EXCHANGE OR AN ORGANIZED MARKETPLACE. 
- IT SHALL BE THE DUTY OF EVERY BROKER WHO EFFECTED A SALE 
OF SHARES OF STOCK, DEBT INSTRUMENTS AND OTHER SECURITIES 
TRADED IN A LOCAL EXCHANGE OR AN ORGANIZED MARKETPLACE, 
SUBJECT TO THE TAX IMPOSED UNDER SECTION 27(D)(4) AND (6), 
AND 28, TO COLLECT THE TAX DUE AND REMIT THE SAME TO THE 
BUREAU OF INTERNAL REVENUE WITHIN FIVE (5) BANKING DAYS 
FROM THE DATE OF COLLECTION THEREOF, AND TO SUBMIT ON 
MONDAYS OF EACH WEEK TO THE SECRETARY OF THE LOCAL
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EXCHANGE OR ORGANIZED MARKETPLACE, OF WHICH THE 
BORROWER IS A MEMBER, A TRUE AND COMPLETE RETURN WHICH 
SHALL CONTAIN A DECLARATION OF ALL THE TRANSACTIONS 
EFFECTED DURING THE PRECEDING WEEK, AND TAXES COLLECTED 
AND TURNED OVER TO THE BUREAU OF INTERNAL REVENUE.
6 
SEC. 16. Section 54 of the National Internal Revenue Code of 1997, as
7 
amended, is hereby amended to read as follows:
8 
SEC. 54. Returns of Receivers, Trustees, [in Bankruptcy] or
9 
Assignees, — [In cases wherein receivers] RECEIVERS,
10 
ADMINISTRATORS, trustees in AN IRREVOCABLE TRUST OR bankruptcy,
11 
or ANY OTHER PERSON ASSIGNED OR [assignees are] IN CHARGE OF
12 
operating the property or business of [a]ANOTHER PERSON OR corporation,
13 
subject to the tax UNDER THIS CODE [imposed by this Title, such receivers,
14 
trustees or assignees] shall BE IMPOSED WITH THE OBLIGATION TO FILE
15 
[make] THE returns AND PAY THE TAXES FOR SUCH PERSON OR
16 
CORPORATION IN THE SAME MANNER REQUIRED UNDER THIS CODE.
17 
[of net income as and for such corporation, in the same manner and form as
18 
such organization is hereinbefore required to make returns, and any] ANY tax
19 
due on the income as returned by receivers, ADMINISTRATORS, trustees or
20 
assignees shall be assessed and collected in the same manner as if assessed
21 
directly against the [organizations] PERSON, ESTATE OR ORGANIZATION
22 
[of] whose businesses or properties they have custody OF or control OVER.
23 
THE TRUSTOR IN A REVOCABLE TRUST, NOT THE TRUSTEE,
24 
SHALL BE RESPONSIBLE IN FILING THE RETURNS REQUIRED UNDER
25 
THIS CODE AND IN DECLARING THE INCOME RECEIVED FROM THE
26 
TRUST IN ACCORDANCE WITH SECTIONS 24, 25, 27 AND 28 OF THIS
27 
CODE. INCOME OF THE TRUST SUBJECTED TO FINAL TAX UNDER
28 
SECTIONS 24, 25, 27 AND 28 SHALL NO LONGER BE SUBJECT TO TAX
29 
UPON DISTRIBUTION OF THE INCOME TO THE TRUSTOR OR
30 
BENEFICIARY, NOR SHALL THE TRUSTOR OR BENEFICIARY BE
39


REQUIRED TO DECLARE THE INCOME AS PART OF ITS TAXABLE 
INCOME.
ANY INCOME OF A REVOCABLE TRUST NOT SUBJECTED TO 
FINAL TAX SHALL BE SUBJECT TO CREDITABLE WITHHOLDING TAX 
UPON DISTRIBUTION OF THE INCOME TO THE TRUSTOR OR THE 
BENEFICIARY AT A RATE NOT EXCEEDING THE HIGHEST RATE OF TAX 
IMPOSED ON INDIVIDUALS UNDER SECTION 24 IN THE CASE OF 
INDIVIDUAL TRUSTORS, OR THE CORPORATE INCOME TAX UNDER 
SECTION 27 IN THE CASE OF CORPORATE TRUSTORS.
10 
SEC. 17. Section 56 of the National Internal Revenue Code of 1997, as
11 
amended, is hereby amended to read as follows:
12 
SEC. 56. Payment and Assessment of Income 
Tax for
13 
Individuals and Corporations. -
14 
(A) Payment of Tax. -
15 
XXX XXX XXX
16
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18
19
20 
21 
22
23
24
25
26
27
28
29
30
(3) Payment of Capita! Gains Tax. —
IN GENERAL - The total amount of tax imposed and prescribed under 
[Section] SECTIONS 24[(C)](B)(3), 
24[(D)](B)(5), 
24(B)(7), 25,
27[(E)(2)](D)(3), 27(D)(5), 27(D)(7), 28(A)[(8)(c)] and 28(B)(5)[(c)] shall 
be paid on the date the return prescribed therefor is filed by the person liable 
thereto: Provided, That If the seller submits proof of [his] THE intention to 
avail [himself] of the benefit of exemption of capital gains under existing special 
laws OR TAX TREATY, no such payments shall be required: Provided, further, 
That in case of failure to qualify for exemption under such special laws, TAX 
TREATY and implementing rules and regulations, the tax due on the gains 
realized from the original transaction shall immediately become due and 
payable, and subject to the penalties prescribed under applicable provisions of 
this Code: Provided, finaiiy, That if the seller, having paid the tax, submits such 
proof of intent within six (6) months from the registration of the document 
transferring the real property, [he] THE SELLER shall be entitled to a refund
40


of such tax upon verification of [his] compliance with the requirements for such 
exemption.
XXX XXX XXX
4 
SEC. 18. Section 57 of the National Internal Revenue Code of 1997, as
5 
amended, is hereby amended to read as follows:
6 
SEC. 57. Withholding of Tax at Source. -
7 
(A) Withholding of Final Tax on Certain Incomes. - Subject to
8 
rules and regulations the Secretary of Finance may promulgate, upon the
9 
recommendation of the Commissioner, requiring the filing of income tax return
10 
by certain income payees, the tax imposed or prescribed [by] UNDER Sections
11 
[24(B)(1), 24(B)(2), 24(C), 24(D)(1); 25(A)(2), 25(A)(3), 25(B), 25(C), 25(D),
12 
25(E); 27(D)(1), 27(D)(2), 27(D)(3), 27(D)(5); 28(A)(4), 28(A)(5), 28(A)(7)(a),
13 
28(A)(7)(b), 28(A)(7)(c), 28(B)(1), 28(B)(2), 28(B)(3), 28(B)(4), 28(B)(5)(a),
14 
28(B)(5)(b), 28(B)(5)(c)] 24(B), 24(C), 25(A), 25(B), 27(D), 27(E), 28(A)
15 
AND 28(B)(5); 33; and 282 of this Code on specified items of income
16 
SUBJECT TO FINAL TAX shall be withheld by payor-corporation and/or
17 
person and paid in the same manner and subject to the same conditions as
18 
provided in Section 58 of this Code.
19 
(B) XXX XXX XXX
20 
[(C) Tax-free Covenant Bonds. - In any case where bonds, mortgages,
21 
deeds of trust or other similar obligations of domestic or resident foreign
22 
corporations, contain a contract or provision by which the obligor agrees to pay
23 
any portion of the tax imposed in this Title upon the obligee or to reimburse
24 
the obligee for any portion of the tax or to pay the interest without deduction
25 
for any tax which the obligor may be required or permitted to pay thereon or
26 
to retain therefrom under any law of the Philippines, or any state or country,
27 
the obligor shall deduct and withhold a tax equal to thirty percent (30%) of the
28 
interest or other payments upon those bonds, mortgages, deeds of trust or
29 
other obligations, whether the interest or other payments are payable annually
30 
or at shorter or longer periods, and whether the bonds, securities or obligations
31 
had been or will be issued or marketed, and the interest or other payment
41


thereon paid, within or without the Philippines, if the interest or other payment 
is payable to a nonresident alien or to a citizen or resident of the Philippines. ]
3 
SEC. 19. Section 73 (A) of the National Internal Revenue Code of 1997, as
4 
amended, is hereby amended to read as follows:
5 
SEC. 73. Distribution of Dividends or Assets by Corporations. -
6 
(A) Definition of Dividends. - The term 'dividends' when used in
7 
this Title means any distribution made by a corporation to its shareholders out
8 
of its earnings or profits and payable to its shareholders, whether in money or
9 
in other property.
10 
Where a corporation distributes all of its assets in complete liquidation
11 
or dissolution, the gain realized or loss sustained by the stockholder, whether
12 
individual or corporate, is a taxable income or a deductible loss, UNDER
13 
SECTIONS 24(A), 25(A), 25(B), 27(A), 28(A) AND 28 (B), as the case
14 
may be.
15 
(B) Stock Dividend. - x x x
16 
SEC. 20. Section 108 of the National Internal Revenue Code of 1997, as
17 
amended, is hereby amended to read as follows:
18 
SEC. 108. Vaiue-added Tax on Sale of Services and Use or Lease
19 
of Properties. -
20 
(A) 
Rate and Base of Tax. — x x x
21 
The phrase 'sale or exchange of services' means the performance of all
22 
kinds of services in the Philippines for others for a fee, remuneration or
23 
consideration, including those performed or rendered by construction and
24 
service contractors; stock, real estate, commercial, customs and immigration
25 
brokers; lessors of property, whether personal or real; warehousing services;
26 
lessors or distributors of cinematographic films; persons engaged in milling,
27 
processing, manufacturing or repacking goods for others; proprietors,
28 
operators or keepers of hotels, motels, resthouses, pension houses, inns,
29 
resorts; proprietors or operators of restaurants, refreshment parlors, cafes and
30 
other eating places, including clubs and caterers; dealers in securities; [lending
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investors ;] transportation contractors on their transport of goods or cargoes, 
including persons who transport goods or cargoes for hire and other domestic 
common carriers by land relative to their transport of goods or cargoes; 
common carriers by air and sea relative to their transport of passengers, goods 
or cargoes from one place in the Philippines to another place in the Philippines; 
sales of electricity by generation companies, transmission by any entity, and 
distribution companies, including electric cooperatives; services of franchise 
grantees of electric utilities, telephone and telegraph, radio and television 
broadcasting and ail other franchise grantees except those under Section 119 
of this Code and non-life insurance companies (except their crop insurances), 
including surety, fidelity, indemnity and bonding companies ; and similar 
services regardless of whether or not the performance thereof calls for the 
exercise or use of the physical or mental faculties. The phrase 'sale or exchange 
of services' shall likewise include:
XXX XXX XXX
16 
SEC. 21. Section 121 of the National Internal Revenue Code of 1997, as
17 
amended, is hereby amended to read as follows:
18 
SEC. 121. Tax on Banks and Non-Bank Financial Intermediaries
19 
Performing Quasi-Banking Functions. - There shall be collected a tax on
20 
gross receipts derived from sources within the Philippines by all banks and non-
21 
bank financial intermediaries [in] PERFORMING QUASI-BANKING
22 
FUNCTIONS AT THE RATE OF FIVE PERCENT (5%) ON INCOME SUCH
23 
AS INTEREST, COMMISSIONS, AND DISCOUNTS FROM LENDING
24 
ACTIVITIES AS WELL AS INCOME FROM FINANCIAL LEASING,
25 
ROYALTIES, RENTALS OF PROPERTY, REAL OR PERSONAL, PROFITS
26 
FROM SALE OR EXCHANGE INCLUDING GAINS DERIVED FROM SALE
27 
OR TRANSFER OF REAL PROPERTIES, NET TRADING GAINS WITHIN
28 
THE TAXABLE YEAR OF FOREIGN CURRENCY, DEBT SECURITIES,
29 
DERIVATIVES, AND OTHER SIMILAR FINANCIAL INSTRUMENTS, AND
30 
ALL OTHER ITEMS TREATED AS GROSS INCOME UNDER SECTION 32
31 
OF THIS CODE, EXCEPT DIVIDENDS AND EQUITY SHARES AND NET
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30
31
32
INCOME OF SUBSIDIARIES WHICH SHALL BE SUBJECT TO ZERO 
PERCENT (0%) [in accordance with the following schedule]:
[(a) On interest, commissions and discounts from lending activities as 
well as income from financial leasing, on the basis of remaining maturities of 
instruments from which such receipts are derived:]
[Maturity period is five years or less
.............................................................. 5%]
[Maturity period is more than five years -....................................... 1%]
[(b) On dividends and equity shares and net income of subsidiaries-
........................................................................................0%]
[(c) On royalties, rentals of property, real or personal, profits, from 
exchange and all other items treated as gross income under Section 32 
of this Code -...7%]
[(d) On net trading gains within the taxable year of foreign currency, 
debt securities, derivatives, and other similar financial instruments-
...........................................................................................7%]
{Provided, however, That in case the maturity period referred to in 
paragraph (a) is shortened thru pre-termination, then the maturity period shall 
be reckoned to end as of the date of pre-termination for purposes of classifying 
the transaction and the correct rate of tax shall be applied accordingly. ]
Provided, [finaiiy,] That FOR PURPOSES OF COMPUTING THE 
GROSS RECEIPTS, the generally accepted accounting principles [as may be 
prescribed by the Bangko Sentral ng Pilipinas for the bank or non-bank financial 
intermediary performing quasi-banking functions shall likewise be the basis for 
the calculation of gross receipts.]
OF RECORDING INCOME AS ADOPTED BY THE BANK SHALL BE 
FOLLOWED: PROVIDED, THAT THE MERE INCREASE OR DECREASE IN 
VALUE OF PROPERTY AS A RESULT OF CHANGES IN MARKET VALUES 
SHALL NOT BE CONSIDERED IN THE COMPUTATION OF GROSS 
RECEIPTS: PROVIDED, FURTHER, THAT FOR PURPOSES OF 
DETERMINING THE GROSS RECEIPTS, NO DEDUCTION SHALL BE 
MADE ON THE INCOME EXCEPT IN THE CASE OF GAINS FROM
44


DEALINGS IN PROPERTY AND TRADING, WHERE NET LOSS WITHIN 
THE SAME BUSINESS ACTIVITY CAN BE OFFSET TO DETERMINE THE 
NET GAIN SUBJECT TO THIS TAX: PROVIDED, FURTHER, THAT SUCH 
OFFSETTING SHALL BE ON A QUARTERLY BASIS, AND ANY NET LOSS 
INCURRED IN A QUARTER CAN BE CARRIED OVER AS DEDUCTION IN 
THE SUCCEEDING QUARTERS: PROVIDED FINALLY, THAT NET LOSS 
INCURRED IN A TAXABLE YEAR CANNOT BE CARRIED OVER TO THE 
SUCCEEDING TAXABLE YEAR.
XXX XXX XXX
10 
SEC. 22. Section 122 of the National Internal Revenue Code of 1997, as
11 
amended. Is hereby amended to read as follows:
12 
SEC. 122. Tax on Other Non-Bank Financial Intermediaries.—
13 
There shall be collected a tax of five percent (5%) on the gross receipts derived
14 
by other non-bank financial intermediaries doing business in the Philippines,
15 
from interest, commissions, [discounts] AND DISCOUNTS FROM LENDING
16 
ACTIVITIES, AS WELL AS INCOME FROM FINANCIAL LEASING,
17 
ROYALTIES, RENTALS OF PROPERTY, REAL OR PERSONAL, PROFITS
18 
FROM SALE OR EXCHANGE INCLUDING GAINS DERIVED FROM SALE
19 
OR TRANSFER OF REAL PROPERTIES, NET TRADING GAINS WITHIN
20 
THE TAXABLE YEAR OF FOREIGN CURRENCY, DEBT SECURITIES,
21 
DERIVATIVES, AND OTHER SIMILAR FINANCIAL INSTRUMENTS,
22 
UNDERWRITING FEES, SERVICE INCOME, AND ALL OTHER ITEMS
23 
TREATED AS GROSS INCOME UNDER SECTION 32 OF THIS CODE,
24 
EXCEPT DIVIDENDS AND EQUITY SHARES AND NET INCOME OF
25 
SUBSIDIARIES WHICH SHALL BE SUBJECT TO ZERO PERCENT (0%).
26 
[and all other items treated as gross income under this Code: Provided, That
27 
interests, commissions and discounts from lending activities, as well as income
28 
from financial leasing, shall be taxed on the basis of the remaining maturities
29 
of the instruments from which such receipts are derived, in accordance with
30 
the following schedule: ]
31 
[Maturity is (5) five years of less...................................................5%]
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32
[Maturity period is more than (5) five years..................................... 1%]
[Provided, however. That in case the maturity period is shortened thru 
pretermination, then the maturity period shall be reckoned to end as of the 
date of pretermination for purposes of classifying the transaction and the 
correct rate of tax shall be applied accordingly.]
GROSS RECEIPTS SHALL BE COMPUTED IN THE SAME MANNER 
PROVIDED UNDER SECTION 121.
FINANCIAL INTERMEDIARIES SUBJECT TO TAX UNDER THIS 
SECTION SHALL INCLUDE FINANCING COMPANIES, FINANCE 
LEASING COMPANIES, INVESTMENT HOUSES, PAWNSHOPS, 
FOREIGN EXCHANGE DEALERS AND MONEY BROKERS, TRUST 
ENTITIES, CREDIT CARD COMPANIES, LENDING INVESTORS, 
SAVINGS AND LOAN ASSOCIATIONS, AND OTHER FINANCIAL 
INTERMEDIARIES EXCEPT BANKS AND NON-BANKS PERFORMING 
QUASI-BANKING FUNCTIONS WHICH SHALL BE TAXED UNDER 
SECTION 121 OF THIS CODE.
COLLECTIVE INVESTMENT SCHEMES SUCH AS MUTUAL FUNDS, 
UNIT LINKED INVESTMENT TRUST FUNDS, UNIT LINKED VARIABLE 
INSURANCE, AND OTHER COLLECTIVE INVESTMENT SCHEMES AS 
MAY BE DETERMINED BY APPROPRIATE GOVERNMENT REGULATORY 
AGENCIES SHALL NOT BE SUBJECT TO GROSS RECEIPTS TAX AND 
OTHER PERCENTAGE TAXES IMPOSED UNDER TITLE V, AND THE 
VALUE ADDED TAX IMPOSED UNDER TITLE IV OF THIS CODE. FOR 
PURPOSES OF THIS EXEMPTION, A CIS SHALL HAVE AT LEAST TWO 
HUNDRED (200) OWNERS, INVESTORS OR PARTICIPANTS, AND 
SHALL HAVE COMPLIED WITH THE MINIMUM PUBLIC OWNERSHIP 
REQUIREMENT OF THE APPROPRIATE GOVERNMENT REGULATORY 
AGENCIES.
THE INCOME OF A PERSON OR COMPANY NOT LICENSED TO DO 
FINANCIAL INTERMEDIATION BUT WHICH ENGAGES IN FINANCIAL 
INTERMEDIATION SERVICES AS AN INCIDENT TO ITS MAIN 
BUSINESS ACTIVITY, AND DERIVES INCOME THEREFROM, SHALL BE
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25
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27
28
SUBJECT TO THE TAX IMPOSED ON ITS PRINCIPAL ACTIVITY. TO BE 
CONSIDERED INCIDENTAL, THE INCOME FROM INTERMEDIATION 
SERVICES SHALL NOT EXCEED FIFTY PERCENT (50%) OF THE 
PERSON OR THE COMPANY'S TOTAL ANNUAL INCOME. IF THE TOTAL 
INCOME RECEIVED FROM FINANCIAL INTERMEDIATION IS MORE 
THAN FIFTY PERCENT (50%), AND THE PERSON OR COMPANY HAS 
ENTERED INTO AT LEAST SIX (6) TRANSACTIONS DURING THE YEAR, 
THE TOTAL INCOME FROM SUCH FINANCIAL INTERMEDIATION 
SHALL BE SUBJECT TO TAX UNDER THIS SUBSECTION.
IN-HOUSE LENDING OR SELLER FINANCING SHALL NOT BE 
SUBJECT TO TAX UNDER THIS SUBSECTION. ANY INCOME EARNED 
OR RECEIVED FROM IN-HOUSE LENDING OR SELLER FINANCING 
SHALL BE SUBJECT TO THE SAME TAX APPLICABLE TO THE 
PRINCIPAL BUSINESS ACTIVITY OR TRANSACTION.
HOLDING COMPANIES SHALL BE SUBJECT TO EITHER VALUE 
ADDED TAX OR GROSS RECEIPTS TAX DEPENDING ON THE NATURE 
OF THEIR BUSINESS ACTIVITIES. IF UNDERTAKING FINANCING AND 
OTHER SIMILAR ACTIVITIES, THEY SHALL BE SUBJECT TO GROSS 
RECEIPTS TAX UNDER THIS SECTION. INCOME DERIVED FROM THE 
SALE OF GOODS, PROPERTIES AND OTHER SERVICES SHALL BE 
SUBJECT TO VALUE ADDED TAX UNDER SECTION 105 OF THIS CODE.
[Provided, finally, That the generally accepted accounting principles as 
may be prescribed by the Securities and Exchange Commission for other non­
bank financial intermediaries shall likewise be the basis for the calculation of 
gross receipts.]
Nothing in this Code shall preclude the Commissioner from imposing the 
same tax herein provided on persons OR ENTITIES performing similar 
[financing] FINANCIAL INTERMEDIATION activities.
29 
SEC. 23. Section 123 of the National Internal Revenue Code of 1997, as
30 
amended, is hereby amended to read as follows:
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32
SEC. 123. Tax on Life Insurance AND REINSURANCE Premiums
. - There shall be collected from every person, company or corporation, 
[(jexcept purely cooperative companies or associations[)] doing life insurance 
business of any sort in the Philippines, A PREMIUM TAX AT THE
FOLLOWING RATES:
(A) FOR LIFE INSURANCE INCLUDING HEALTH INSURANCE AS 
A RIDER TO LIFE INSURANCE POLICY, a tax of two percent (2%) of the 
total premium collected, whether such premiums are paid in money, notes, 
credits or any substitute for money; but premiums refunded within six (6) 
months after payment on account of rejection of risk or returned for other 
reason to a person insured shall not be included in the taxable receipts; nor 
shall any tax be paid upon reinsurance by a company IF THE TAX [that] has 
already BEEN paid [the tax] ON THE DIRECT PREMIUM; nor upon 
premiums collected or received by any branch of a domestic corporation, firm 
or association doing business outside the Philippines on account of any life 
insurance of the insured who is a nonresident, if any tax on such premium is 
imposed by the foreign country where the branch is established nor upon 
premiums collected or received on account of any reinsurance, if the insured, 
in case of personal insurance, resides outside the Philippines, if any tax on such 
premiums is imposed by the foreign country where the original insurance has 
been issued or perfected; nor upon that portion of the premiums collected or 
received by the insurance companies on variable contracts[,] IN A CIS In 
excess of the amounts necessary to insure the lives of the variable contract 
owners[.]: PROVIDED, THAT THE CIS SHALL HAVE AT LEAST TWO 
HUNDRED (200) OWNERS, INVESTORS OR PARTICIPANTS, AND 
THAT ANY MINIMUM PUBLIC OWNERSHIP AS MAY BE REQUIRED BY 
APPROPRIATE GOVERNMENT REGULATORY AGENCIES SHALL BE 
COMPLIED WITH.
(B) PERSONS DOING BUSINESS SIMILAR OR AKIN TO LIFE AND 
HEALTH INSURANCE SUCH AS PRE-NEED COMPANIES, PENSION 
FUND COMPANIES, HEALTH MAINTENANCE ORGANIZATIONS AND 
OTHER COMPANIES SIMILAR TO LIFE INSURANCE, AS MAY BE
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DETERMINED BY THE APPROPRIATE GOVERNMENT REGULATORY 
AGENCIES, SHALL BE SUBJECT TO TAX UNDER THIS SUBSECTION AT 
THE RATE OF TWO PERCENT (2%) OF THE GROSS PREMIUM, PLAN 
PAYMENT, OR INSTALLMENT PAYMENTS COLLECTED WITHOUT ANY 
DEDUCTION FOR THE AMOUNTS REQUIRED BY THE APPROPRIATE 
GOVERNMENT REGULATORY AGENCIES TO BE EARMARKED FOR THE 
BENEFIT OF THE INSURED, OR PLANHOLDER.
NOTHING IN THIS CODE SHALL PRECLUDE THE 
COMMISSIONER FROM IMPOSING THE SAME TAX HEREIN PROVIDED 
ON PERSONS PERFORMING SIMILAR INSURANCE BUSINESS 
ACTIVITIES.
LIFE REINSURANCE COMPANIES SHALL BE SUBJECT TO 
PREMIUM TAX ON PREMIUMS COLLECTED UNDER SUBSECTION (A) 
HEREOF. HOWEVER, PREMIUMS COLLECTED ON TRANSACTIONS 
WHERE THE TAX ON THE DIRECT PREMIUM HAS ALREADY BEEN PAID 
BY THE DIRECT INSURER SHALL BE EXCLUDED FROM THE GROSS 
PREMIUM SUBJECT TO PREMIUM TAX.
NON-LIFE REINSURANCE COMPANIES SHALL BE SUBJECT TO 
VALUE ADDED TAX ON PREMIUMS COLLECTED UNDER SECTION 108 
OF THIS CODE. HOWEVER, PREMIUMS COLLECTED ON 
TRANSACTIONS WHERE THE TAX ON THE DIRECT PREMIUM HAS 
ALREADY BEEN PAID BY THE DIRECT INSURER SHALL BE EXCLUDED 
FROM THE GROSS PREMIUM SUBJECT TO VALUE ADDED TAX.
FOR THE PURPOSE OF CLAIMING EXEMPTION ON 
REINSURANCE PREMIUMS, THE SECRETARY OF FINANCE, UPON THE 
RECOMMENDATIONS OF THE COMMISSIONER OF INTERNAL 
REVENUE AND INSURANCE COMMISSIONER, SHALL PROMULGATE 
THE REQUIRED REPORTS TO BE SUBMITTED TO THE BUREAU OF 
INTERNAL REVENUE. ANY MISREPRESENTATION SHALL SUBJECT 
THE DIRECT INSURER OR REINSURER TO PENALTIES UNDER 
SECTIONS 248, 249, 253, 254, 255, 256, AND 257 OF THIS CODE.
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ANY INCOME, OTHER THAN RECEIPT OF PREMIUM SUCH AS 
MANAGEMENT FEES, SERVICE FEES, CHARGES, AND PENALTIES, 
COMMISSIONS, INCOME FROM THE SALE OR TRANSFER OF GOODS, 
PROPERTIES OR SERVICES, EARNED OR RECEIVED AS AN INCIDENT 
OF DOING THE BUSINESS OF LIFE, NON-LIFE AND OTHER 
INSURANCE ACTIVITIES, SHALL BE SUBJECT TO THE VALUE ADDED 
TAX UNDER SECTION 105 OF THIS CODE: PROVIDED, THAT INCOME 
RECEIVED FROM THE INVESTMENT AND REINVESTMENT OF 
PREMIUMS EARNED SHALL NOT BE SUBJECT TO VALUE ADDED TAX 
NOR TO THE GROSS RECEIPTS TAX IMPOSED UNDER SECTIONS 121 
AND 122 OF THIS CODE.
A VARIABLE INSURANCE CONTRACT WHERE AMOUNTS IN 
EXCESS OF INSURANCE COSTS ARE COLLECTED AS PART OF THE 
PREMIUM AND WHERE UNITS OF PARTICIPATION IN A POOLED 
FUND ARE ISSUED TO THE INSURED REPRESENTING THEIR 
RESPECTIVE SHARES IN THE POOLED FUND, IS A CIS. THE AMOUNTS 
OF PREMIUM COLLECTED IN EXCESS OF THE INSURANCE COST IS 
NOT SUBJECT TO PREMIUM TAX UNDER THIS SECTION AND TO THE 
GROSS RECEIPTS TAX IMPOSED UNDER SECTIONS 121 AND 122, OR 
TO ANY PERCENTAGE TAX IMPOSED UNDER TITLE V AND TO VALUE 
ADDED TAX UNDER SECTION 105, TITLE IV OF THIS CODE.
Cooperative companies or associations are such as are conducted by the 
members thereof with the money collected from among themselves and solely 
for their own protection and not for profit.
25 
SEC. 24. Section 174 of the National Internal Revenue Code of 1997, as
26 
amended, is hereby amended to read as follows:
27 
SEC. 174. Stamp Tax on Original Issue of Shares of Stock. - On
28 
every original issue, whether on organization, reorganization or for any lawful
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purpose, of shares of stock by any association, company, or corporation,
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INCLUDING SHARES OF STOCK OR UNITS OF PARTICIPATION IN A
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COLLECTIVE INVESTMENT SCHEME, there shall be collected a
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documentary stamp tax of [Two pesos (P2.00) on each Two hundred pesos 
(P200), or fractional part thereof, of the par value,] SEVENTY-FIVE 
PERCENT OF ONE PERCENT (0.75%) OF THE PAR VALUE of such shares 
of stock: Provided, That in the case of the original issue of shares of stock 
without par value, the amount of the documentary stamp tax herein prescribed 
shall be based upon the actual consideration for the issuance of such shares of 
stock: Provided, further, That in the case of stock dividends, on the actual value 
represented by each share[.]: PROVIDED, FINALLY, THAT IN THE CASE 
OF COLLECTIVE INVESTMENT SCHEMES WITHOUT PAR VALUE, THE 
DOCUMENTARY STAMP TAX SHALL BE BASED ON THE INITIAL NET 
ASSET VALUE PER UNIT.
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SEC 25. Section 175 of the National Internal Revenue Code of 1997, as
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amended, is hereby repealed.
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SEC. 26. Section 176 of the National Internal Revenue Code of 1997, as
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amended, is hereby amended to read as follows:
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SEC 176. Stamp Tax on Bonds, Debentures, Certificates of Stock
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or Indebtedness Issued in Foreign Countries. - [On all] A
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DOCUMENTARY STAMP TAX OF SEVENTY-FIVE PERCENT OF ONE
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PERCENT (0.75%) OF THE VALUE OF THE TRANSACTION SHALL BE
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COLLECTED FROM A PERSON SELLING OR TRANSFERRING bonds,
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debentures, certificates of stock, or certificates of indebtedness issued in any
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foreign country.[, there shall be collected from the person selling or transferring
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the same in the Philippines, such tax as is required by law on similar instruments
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when issued, sold or transferred in the Philippines.]
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SEC 27. Sections 177 and 178 of the National Internal Revenue Code of 1997,
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as amended, are hereby repealed.
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SEC 28. Section 179 of the National Internal Revenue Code of 1997, as
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amended, is hereby amended to read as follows:
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SEC. 179. Stamp Tax on AU Debt Instruments. - On every original 
issue of debt instruments, there shall be collected a documentary stamp tax of 
[One peso and fifty centavos (PI.50) on each Two hundred pesos (P200), or 
fractional part thereof,] SEVENTY-FIVE PERCENT OF ONE PERCENT 
(0.75%) of the issue price of any such debt instruments: Provided, That for 
such debt instruments with terms of less than one (1) year, the documentary 
stamp tax to be collected shall be of a proportional amount in accordance with 
the ratio of its term in number of days to three hundred sixty-five (365) days: 
Provided, further, That only one documentary stamp tax shall be imposed on 
either loan agreement, or promissory notes issued to secure such loan.
For purposes of this section, the term debt instrument shall mean 
instruments representing borrowing and lending transactions including but not 
limited to debentures, certificates of indebtedness, due bills, bonds, loan 
agreements, including those signed abroad wherein the object of contract is 
located or used in the Philippines, instruments and securities issued by the 
government or any of its instrumentalities, deposit substitute debt instruments, 
certificates or other evidences of deposits that are either drawing interest 
significantly higher the regular savings deposit taking into consideration the 
size of the deposit and the risks involved or drawing interest and having a 
specific maturity date, [orders for payment of any sum of money otherwise 
than at sight or on demand,] promissory notes, whether negotiable or non- 
negotiable, except bank notes issued for circulation.
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SEC 29. Section 180 of the National Internal Revenue Code of 1997, as
24 
amended, is hereby repealed.
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SEC 30. Sections 181, 182, 183, 184, 185, 186, and 187 of the National
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Internal Revenue Code of 1997, as amended, are hereby amended to read as follows:
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SEC. 181. Stamp Tax Upon Acceptance of Bills of Exchange and
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Others.- Upon any acceptance or payment of any bill of exchange or order for
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the payment of money purporting to be drawn in a foreign country but payable
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in the Philippines, there shall be collected a documentary stamp tax OF
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THIRTY PERCENT OF ONE PERCENT (0.30%) [Sixty centavos (P0.60) on 
each Two hundred pesos (P200), or fractional part thereof,] of the face value 
of any such bill of exchange, or order, or the Philippine equivalent of such value, 
if expressed in foreign currency.
SEC. 182. Stamp Tax on Foreign Bills of Exchange and Letters 
of Credit - On all foreign bills of exchange and letter of credit (including 
orders, by telegraph or otherwise, for the payment of money issued by express 
or steamship companies or by any person or persons) drawn in but payable out 
of the Philippines in a set of three (3) or more according to the custom of 
merchants and bankers, there shall be collected a documentary stamp tax OF 
THIRTY PERCENT OF ONE PERCENT (0.30%) [Sixty centavos (P0.60) on 
each Two hundred pesos (P200), or fractional part thereof,] of the face value 
of any such bill of exchange or letter of credit, or the Philippine equivalent of 
such face value, if expressed in foreign currency[.]: PROVIDED, THAT, A 
LETTER OF CREDIT ON WHICH THE DOCUMENTARY STAMP TAX 
IMPOSED UNDER THIS SECTION IS PAID UPON OPENING SHALL NOT 
BE SUBJECT AGAIN TO THE TAX IMPOSED BY SECTION 195 UPON 
AVAILMENT OF THE TRUST RECEIPT LINE WHERE THE PROPERTY 
SUBJECT OF THE LETTER OF CREDIT IS MADE A SECURITY FOR 
PAYMENT.
SEC. 183. Stamp Tax on Life AND HEAL TH Insurance PoUcies[.] 
OF ANNUITIES, AND HEALTH MAINTENANCE ORGANIZATION 
PRODUCTS. - On all policies of insurance or other instruments by whatever 
name the same may be called, whereby any insurance shall be made or 
renewed upon any life or lives AND HEALTH OF PERSONS, there shall be 
collected a one-time documentary stamp tax at the following rates:
If the amount of insurance does not exceed P100,000 - Exempt 
If the amount of insurance exceeds P100,000
but does not exceed P300,000 
- P20.00
If the amount of insurance exceeds P300,000 
but does not exceed P500,000 
- P50.00
If the amount of insurance exceeds P500,000
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but does not exceed P750,000 
If the amount of insurance exceeds P750/000 
but does not exceed Pl/000/000 
P150.00
If the amount of insurance exceeds P1,000,000 
P200.00
- PIOO.OO
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SEC. 184. Stamp Taxon Policies of Insurance Upon Property. -
On all policies of insurance or other instruments by whatever name the same 
may be called, by which insurance shall be made or renewed upon property of 
any description, including rents or profits, against peril by sea or on inland 
waters, or by fire or lightning, there shall be collected a documentary stamp 
tax of [Fifty centavos (P0.50) on each Four pesos (P4.00), or fractional part 
thereof,] TWELVE AND ONE-HALF PERCENT (12.5%) of the amount of 
premium charged: Provided, however, That no documentary stamp tax shall be 
collected on reinsurance contracts or on any instrument by which cession or 
acceptance of insurance risks under any reinsurance agreement is effected or 
recorded. PROVIDED, FURTHER, THAT SUCH RATE SHALL BE REDUCED 
ACCORDING TO THE FOLLOWING SCHEDULE:
JANUARY 1, 2023: ELEVEN AND ONE-HALF PERCENT (11.5%), 
JANUARY 1, 2024: TEN AND ONE-HALF PERCENT (10.5%), 
JANUARY 1, 2025: NINE AND ONE-HALF PERCENT (9.5%), 
JANUARY 1, 2026: EIGHT AND ONE-HALF PERCENT (8.5%), 
JANUARY 1, 2027: SEVEN AND ONE-HALF PERCENT (7.5%).
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SEC. 185. Stamp Tax on Fidelity Bonds and Other Insurance 
Policies. — On all policies of insurance or bonds or obligations of the nature of 
indemnity for loss, damage or liability made or renewed by any person, 
association, company or corporation transacting the business of accident, 
fidelity, employer's liability, plate, glass, steam boiler, burglar, elevator, 
automatic sprinkler, or other branch of insurance (except life, marine, inland, 
and fire insurance), and all bonds, undertakings, or recognizances, conditioned
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for the performance of the duties of any office or position, for the doing or not 
doing of anything therein specified, and on all obligations guaranteeing the 
validity or legality of any bond or other obligations issued by any province, city, 
municipality, or other public body or organization, and on all obligations 
guaranteeing the title to any real estate, or guaranteeing any mercantile 
credits, which may be made or renewed by any such person, company or 
corporation, there shall be collected a documentary stamp tax of [Fifty centavos 
(P0.50) on each Four pesos (P4.00), or fractional part thereof,] TWELVE AND 
ONE-HALF PERCENT (12.5%) of the premium charged[.]: PROVIDED, 
THAT SUCH RATE SHALL BE REDUCED ACCORDING TO THE 
FOLLOWING SCHEDULE:
JANUARY 1, 2023: ELEVEN AND ONE-HALF PERCENT (11.5%), 
JANUARY 1, 2024: TEN AND ONE-HALF PERCENT (10.5%), 
JANUARY 1, 2025: NINE AND ONE-HALF PERCENT (9.5%), 
JANUARY 1, 2026: EIGHT AND ONE-HALF PERCENT (8.5%), 
JANUARY 1, 2027: SEVEN AND ONE-HALF PERCENT (7.5%).
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SEC. 186. Stamp Tax on [Policies of Annuities, and] Pre-Need 
Plans. - [On all policies of annuities, or other instruments by whatever name 
the same may be called, whereby an annuity may be made, transferred or 
redeemed, there shall be collected a documentary stamp tax of One peso 
(PI.00) on each Two hundred pesos (P200), or fractional part thereof, of the 
premium or installment payment on contract price collected.] On pre-need 
plans, [the documentary stamp tax shall be Forty centavos (P0.40) on each 
Two hundred pesos (P200), or fractional part thereof, of the premium or 
contribution collected ] THERE SHALL BE COLLECTED A DOCUMENTARY 
STAMP TAX OF TWENTY PERCENT OF ONE PERCENT (0.2%) OF THE 
PREMIUM OR INSTALLMENT PAYMENT ON CONTRACT PRICE, OR 
CONTRIBUTION CHARGED.
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SEC. 187. Stamp Tax on Indemnity Bonds. - On all bonds for 
indemnifying any person, firm or corporation who shall become bound or
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engaged as surety for the payment of any sum of money or for the due 
execution or performance of the duties of any office or position or to account 
for money received by virtue thereof, and on all other bonds of any description, 
except such as may be required in legal proceedings, or are otherwise provided 
for herein, there shall be collected a documentary stamp tax of [Thirty centavos 
(P0.30) on each Four pesos (P4.00), or fractional part thereof,] SEVEN AND 
ONE-HALF PERCENT (7.5%) of the premium charged.
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SEC 31. Section 188 of the National Internal Revenue Code of 1997, as
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amended, is hereby repealed.
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SEC 32. Sections 192 and 193 of the National Internal Revenue Code of 1997,
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as amended, are hereby repealed.
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SEC 33. Sections 195, 198, and 199 of the National Internal Revenue Code of
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1997, as amended, are hereby amended to read as follows:
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SEC. 195. Stamp Tax on Mortgages, Pledges and Deeds of Trust
- On every mortgage or pledge of lands, estate, or property, real or personal, 
heritable or movable, whatsoever, where the same shall be made as a security 
for the payment of any definite and certain sum of money lent at the time or 
previously due and owing or forborne to be paid, being payable, and on any 
conveyance of land, estate, or property whatsoever, in trust or to be sold, or 
otherwise converted into money which shall be and intended only as security, 
either by express stipulation or otherwise, there shall be collected a 
documentary stamp tax [at the following rates:
(a) 
When the amount secured does not exceed Five thousand pesos 
(P5,000), Forty pesos (P40.00).
(b) 
On each Five thousand pesos (P5,000), or fractional part thereof 
in excess of Five thousand pesos (P5,000), an additional tax of Twenty pesos
(P20.00).] OF THIRTY PERCENT OF ONE PERCENT (0.3%) OF THE 
AMOUNT SECURED.
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XXX XXX XXX
SEC. 198. Stamp Tax on [Assignments and] Renewals of Certain 
Instruments. - Upon each and every [assignment or transfer of any 
mortgage, lease or policy of insurance, or the] renewal or continuance of any 
agreement, contract, charter, or any evidence of obligation or indebtedness by 
THE EXTENSION OF THE TERM OR MATURITY BY [altering or otherwise,] 
ALTERATION OF SUCH AGREEMENT, CONTRACT OR CHARTER, there 
shall be levied, collected and paid a documentary stamp tax, at the same rate 
as that imposed on the original instrument.
SEC. 199. Documents and Papers Not Subject to Stamp Tax. - 
The provisions of Section 173 to the contrary notwithstanding, the following 
instruments, documents and papers shall be exempt from the documentary 
stamp tax:
(a) Policies of insurance or annuities made or granted by a fraternal or 
beneficiary society, order, association or cooperative company, operated on the 
lodge system or local cooperation plan and organized and conducted solely by 
the members thereof for the exclusive benefit of each member and not for 
profit.
XXX XXX XXX
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(n) Interbank call loans with maturity of not more than [seven (7)] FIVE 
(5) days to cover deficiency in reserves against deposit liabilities, including 
those between or among banks and quasi-banks.
(O) REDEMPTION, SALE, BARTER, EXCHANGE, OR OTHER 
MODES OF DISPOSITION OR EXCHANGE OF SHARES OF STOCK OR 
UNITS OF PARTICIPATION IN A COLLECTIVE INVESTMENT SCHEME 
OR OTHER CIS SECURITIES LISTED AND TRADED IN A LOCAL 
EXCHANGE OR AN ORGANIZED MARKETPLACE. THE ORIGINAL 
ISSUANCE OF SHARES OR UNITS OF PARTICIPATION IN A CIS SHALL 
NOT BE COVERED BY THIS EXEMPTION.
SEC. 34. Prospectivity Ciause, - The changes introduced under this Act 
shall apply to transactions taking effect beginning January 1, 2023.
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SEC. 35. Implementing Rules and Regulations. - The Department of Finance,
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in consultation with the Securities and Exchange Commission, Bangko Sentral ng
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Pilipinas, Insurance Commission, the Bureau of the Treasury, and the Bureau of
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Internal Revenue, shall issue the implementing rules and regulations for the effective
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implementation of this Act.
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SEC. 36. Separability Cause. - If, for any reason any article or provision of
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this Act, or any portion thereof, or application of such article, provision, or portion
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thereof to any person, group, or circumstance is declared invalid or unconstitutional,
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the remainder of this Act shall not be affected by such decision or declaration.
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SEC. 37. Repealing Cause. - The following laws or provisions of laws are
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hereby repealed or modified accordingly and the persons and/or transactions affected
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herein are hereby made subject to applicable taxes on interest income, dividends, and
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capital gains, gross receipts tax, premium tax, and documentary stamp tax under the
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National Internal Revenue Code of 1997, as amended;
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(a) 
Section 9, insofar as the tax exemption on the issuance of
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bonds and securities is concerned, of Presidential Decree 1648, known as
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"Reorganizing the National Development Company and Establishing a Revised
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Charter Therefor";
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(b) 
Sections 6, 7, and 8, insofar as the tax exemptions on
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interest income, capital gains, and documentary stamp tax and on the issuance
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of bonds are concerned, of Executive Order 603, entitled "Creating a Light Rail
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Transit Authority, Vesting the Same With Authority to Construct and Operate
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the Light Rail Transit (LRT) Project and Providing Funds Therefor";
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(c) 
Section 14, insofar as tax exemption on interest income,
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capital gains, and documentary stamp tax is concerned, of Republic Act 7354,
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entitled "An Act Creating the Philippine Postal Corporation, Defining Its Powers,
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Functions And Responsibilities, Providing for Regulation of the Industry and for
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Other Purposes Connected Therewith";
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Section 12, insofar as the tax exemptions on interest
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income, capital gains, and documentary stamp tax and on the issuance of bonds
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are concerned, of Republic Act 4850, entitled "An Act Creating the Laguna Lake 
Development Authority, Prescribing its Powers, Functions and Duties, Providing 
Funds Therefor, and for Other Purposes";
(e) 
Number 8, insofar as tax exemption on interest income, 
capital gains, and documentary stamp tax is concerned, of Presidential Decree 
37, entitled "Creating the Nayong Pilipino Foundation";
(f) 
Section 12, insofar as tax exemption on interest income, 
capital gains, and documentary stamp tax is concerned, of Presidential Decree 
205, entitled "Creating and Establishing the Development Academy of the 
Philippines, Defining its Powers, Functions, and Responsibilities, and for Other 
Purposes";
(g) 
Article 202, insofar as tax exemption on interest income, 
capital gains, documentary stamp tax, and premium tax is concerned, of 
Presidential Decree 442 as amended by Presidential Decree 626, entitled "Labor 
Code of the Philippines";
(h) 
Sections 10 and 11, insofar as the tax exemptions on 
interest income, capital gains, and documentary stamp tax of subsidiaries of 
Philippine Aerospace Development Corporation and on the issuance of bonds 
are concerned, of Presidential Decree 696, entitled "Revising Presidential 
Decree No. 286, dated September 5, 1973, as amended, otherwise known as 
The Charter of The Philippine Aerospace Development Corporation and for 
Other Purposes";
[(k)] (i) Section 37, insofar as the tax exemption on interest 
income, capital gains, gross receipts tax, and documentary stamp tax is 
concerned, of Republic Act 6848 or The Charter of The Al-Amanah Islamic 
Investment Bank of the Philippines;
[(!)] (j) Sections 19, insofar as the tax exemptions on interest income 
and issuance of bonds are concerned, of Republic Act 3591, as amended by 
Republic Act 9576 or An Act Increasing the Maximum Deposit Insurance 
Coverage, and in Connection Therewith, to Strengthen the Regulatory and 
Administrative Authority, and Financial Capability of the Philippine Deposit 
Insurance Corporation (PDIC), Amending for this Purpose Republic Act
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Numbered Three Thousand Five Hundred Ninety-One, as amended, otherwise 
known as The PDIC Charter, and for Other Purposes;
[(m)] (k) Section 12, insofar as tax exemption on interest income, 
capital gains, and documentary stamp tax and the issuance of bonds are 
concerned, of Executive Order 1037, entitled "An Act Creating the Philippine 
Retirement Park System, Providing Funds Therefor and for Other Purposes";
[(o)] (I) Sections 19 and 25, insofar as tax exemption on 
documentary stamp tax is concerned, of Republic Act 7279 or The Urban 
Development and Housing Act of 1992;
[(p)] (m) Section 8(a), insofar as tax exemption on interest Income, 
capital gains, and documentary stamp tax of bonds is concerned, as provided 
under Section 1 of Republic Act 6395 or An Act Revising the Charter of the 
National Power Corporation;
[(q)] (n) Sections 9 and 15, insofar as the tax exemptions on the 
issuance of bonds, interest income, capital gains, and documentary stamp tax 
are concerned, of PD 334, entitled "Creating the Philippine National Oil 
Company, Defining its Powers and Functions, Providing Funds Therefore, and 
for Other Purposes";
[(t)] 
(o) Section 6 (a, xviil (2)), in so far as tax exemption on
interest income and documentary stamp tax is concerned, of PD 1485, as 
amended by PD 1770, entitled "Reconstituting the National Grains Authority to 
the National Food Authority, Broadening its Functions and Powers and for Other 
Purposes";
[(u)] (P) Section 5 (e), insofar as tax exemption on interest income, 
capital gains, and documentary stamp tax on bonds is concerned, of Republic 
Act 6260, entitled "An Act Instituting a Coconut Investment Fund and Creating 
a Coconut Investment Company for the Administration Thereof";
[(X)] 
(q) 
Section 7, insofar as tax exemption on documentary
stamp tax and premium tax is concerned, of Republic Act 7111, entitled "An 
Act Establishing The Overseas Workers' Investment Fund to Provide Incentives 
to Overseas Workers, Reduce the Foreign Debt Burden and for Other 
Purposes";
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[(y)] (r) Section 56, insofar as tax exemption on interest income, 
capital gains, and documentary stamp tax is concerned, of Republic Act 10801, 
entitled "An Act Governing the Operations and Administration of the Overseas 
Workers Welfare Administration";
[(z)] (s) Section 5, insofar as tax exemption on interest income is 
concerned, of Republic Act 8367, entitled "An Act Providing for the Regulation 
of the Organization and Operation of Non-Stock Savings and Loan 
Associations";
[(aa)] (t) Section 28, insofar as tax exemption on capital gains on 
shares of stock and documentary stamp tax is concerned, of Republic Act 9267 
or The Securitization Act of 2004";
[(cc)] (u) Section 15, insofar as tax exemption on capital gains and 
documentary stamp tax is concerned, of Republic Act 9182, as amended by 
Republic Act 9343, entitled "An Act Granting Tax Exemptions and Fee Privileges 
to Special Purpose Vehicles which Acquire or Invest in Non-Performing Assets, 
Setting the Regulatory Framework Therefor, and for Other Purposes";
[(dd)] (v) Sections 13 and 14, insofar as tax exemption on DST and 
dividends is concerned, of R.A. 9856 or The Real Estate Investment Act of 2009;
[(ee)] (w) Section 23, insofar as no deduction from gross income 
shall be allowed in respect of any interest if the indebtedness is incurred to 
finance petroleum exploration is concerned, of P.D. 87, entitled Amending 
Presidential Decree No. 8 issued on October 2, 1972, and Promulgating an 
Amended Act to Promote the Discovery and Production of Indigenous 
Petroleum and Appropriate Funds Therefor;
[(ff)] (x) 
Section 6, insofar as tax exemption on interest
income, dividends and capital gains are concerned, of RA 6426 or the Foreign 
Currency Deposit Act of the Philippines, as amended; and
[(gg)] (y) section 32, insofar as the tax exemptions on capital gains, 
interest income and DST and issuance of bonds are concerned, of RA 6424 or 
the Philippine Export Credit Insurance and Guarantee Corporation Act.
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SEC. 38. Effectivity - This Act shall take effect fifteen (15) days after its
2 
publication in the Official Gazette or at least two (2) newspapers of general
3 
circulation.
Approved,
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