EXECUTIVE ORDER NO. 437 - INCREASING THE TAX ON RENTALS, CHARTER AND OTHER FEES EARNED BY NON-RESIDENT LESSORS OF AIRCRAFT FROM 7.5% TO 8.5% PURSUANT TO SUBPARAGRAPH 4, Sec. 25 (b) OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED

WHEREAS, the President is authorized under subparagraph 4 Sec. 25 (b) of the National Internal Revenue Code, as amended, to prescribe the tax on rentals, charter and other fees earned by non-resident lessors of aircraft, machineries and other equipment upon recommendation of the Secretary of Finance;

WHEREAS, to lessen the regressivity of the income tax system, the present 7.5% preferential tax on rental income of non-resident lessors on leased aircraft should be increased;

WHEREAS, since the common carrier’s tax of 2%, which had been one of the bases of the 7.5% preferential tax rate, has been increased by one percentage point by virtue of Presidential Decree No. 1959 in 1984;

WHEREAS, increasing the tax rate still maintains the preferential tax treatment of said income vis-a-vis the normal tax rate of 35% imposed on other corporate incomes;

NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue of the powers vested in me by law, do hereby order.

Section 1. The rate of 8.5% shall be imposed on rentals, charter and other fees derived by non-resident lessors of aircraft.

Sec. 2. The rate of 7.5% shall remain imposed on rentals, charter and other fees derived by non-resident lessors of machineries and other equipment.

Sec. 3. This Executive Order shall take effect two (2) days following the completion of its publication in a national newspapers of general circulation.

DONE in the City of Manila, this 23rd day of November, in the year of Our Lord, nineteen hundred and ninety.
chanrobles virtual law library
  Back to Main


chan robles virtual law library

Since 19.07.98.