an 
FOURTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES 
) 
Third Regular Session 
) 
SENATE 
S. No. 3502 
mlf5 
~4'0, 1 
(In substitution of H. No. 6017, taking into consideration S. Nos. 596,2117 and 181) 
Prepared by the Committee with Senators Estrada, Legarda, Angara 
as authors thereof 
AN ACT 
REDUCING THE TAX INSURANCE PREMIUM UNDER CERTAIN CONDITIONS, 
AMENDING FOR THIS PURPOSE SECTION 123 OF THE NATIONAL INTERNAL 
REVENUE CODE, AS AMENDED 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
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SECTION 1. Section 123 of the National I nternal Revenue Code of 1997, as amended, 
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is hereby further amended to read as follows: 
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"SEC. 123. Tax on Life Insurance Premiums. -
There shall be 
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collected from every person, company or corporation (except purely 
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cooperative companies or associations) doing life insurance business of 
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any sort in the Philippines a tax of [five percent (5%)] TWO PERCENT 
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(2%) of the total premium collected, whether such premiums are paid in 
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money, notes, credits or any substitute for money; but premiums refunded 
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within six (6) months after payment on account of rejection of risk or 
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returned for other reason to a person insured shall not be included in the 
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taxabl~ receipts; nor shall any tax be paid upon reinsurance by a company 
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that has already paid the tax; nor upon premiums collected or received by 
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any branch of a domestic corporation, firm or association doing business 
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outside the Philippines on account of any life insurance of the insured who 
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is a nonresident, if any tax on such premium is imposed by the foreign 
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country where the branch is established nor upon premiums collected or 
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received on account of any reinsurance, if the insured, in case of personal 
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insurance, resides outside the Philippines, if any tax on such premiums is 
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imposed by the foreign country where the original insurance has been 
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issued or perfected; nor upon that portion of the premiums collected or 


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received by the insurance companies on variable contracts [as defined in 
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Section 232(2) of Presidential Decree No. 612]. in excess of the amounts 
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necessary to insure the lives of the variable contract owners. 
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"'Cooperative companies or associations' are such as are 
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conducted by the members thereof with the money collected from among 
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themselves and solely for their own protection and not for profit." 
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SEC. 2. The new rate of two percent (2%) shall apply only to insurance policies 
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that will be issued after the effectivity of this Act. Premiums that shall be paid and 
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collected from previously issued policies by insurance companies before the effectivity 
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of this Act shall continue to be imposed a tax of five percent (5%) on total premium 
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collected. 
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SEC. 3. Rules and Regulations. -
The Secretary of Finance, upon 
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recommendation of the Commissioner of Internal Revenue, shall promulgate the 
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necessary rules and regulations for the effective implementation of the provisions of this 
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Act. 
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SEC. 4. Separability Clause. - If any provision of this Act is held unconstitutional 
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or invalid. all other provisions not affected thereby shall remain valid. 
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SEC. 5. Repealing Clause. - All laws, decrees, executive orders, rules and 
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regulations or parts thereof, which are inconsistent with this Act, are hereby repealed, 
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amended or modified accordingly. 
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SEC. 6. Effectivity. -
This Act shall take effect fifteen days following the 
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completion of its publication in the Official Gazette or in a newspaper of general 
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circulation in the Philippines. 
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Approved,