Final Withholding Tax and Capital Gains Tax

Front

What are passive incomes subject to Final Withholding Tax (FWT) in the Philippines?

Back

Interest income, Dividend income, Royalties, Prizes, Other winnings.

Front

What is the tax treatment for passive income derived from sources abroad?

Back

It is subject to regular tax unless exempt.

Front

What constitutes the full and final payment of income tax due on passive income?

Back

The amount of tax withheld by the withholding agent.

Front

What is Capital Gains Tax (CGT)?

Back

A tax imposed on income from the sale of capital assets.

Front

How are capital assets distinguished from ordinary assets in Philippine taxation?

Back

Capital assets are not included in the definition of ordinary assets.

Front

What are examples of ordinary assets?

Back

Stock in trade, property used in trade or business subject to depreciation, real property held primarily for sale, and real property used in trade or business.

Front

What happens to the gain on the sale of ordinary assets?

Back

It is subject to regular income tax instead of capital gains tax.

Front

What is defined as a principal residence?

Back

The family home of the individual taxpayer, including the dwelling house and the land it is situated on.

Front

What conditions must be met for the sale of a principal residence to be exempt from CGT?

Back

Proceeds must be used to acquire or construct a new principal residence within 18 months, historical cost must be carried over, BIR must be notified within 30 days, and exemption can only be availed once every 10 years.