Republic Act No. 12214, also known as the Capital Markets Efficiency Promotion Act (CMEPA), took effect on July 01, 2025. It introduces changes to several provisions of the National Internal Revenue Code of 1997 (NIRC), as amended, with the aim of simplifying and optimizing the taxation of capital markets in the Philippines.

  1. Simplified final taxes on passive income (e.g., interest, dividends, royalties, capital gains) to align with global standards.
  1. Clarified tax treatment for nonresident aliens and foreign corporations, particularly on how their passive income is taxed.
  1. Defined tax exemptions for investment instruments, such as mutual funds and unit investment trust funds (UITFs).
  1. Adjusted Documentary Stamp Tax (DST) rates::
  • original issuance of shares – from 1% to 0.75%
  • debt instruments – from 0.375% to 0.75%
  1. Granted DST exemptions for:
  • transactions involving listed shares
  • mutual funds and similar investment vehicles
  1. Reduced rate for Stock Transaction Tax (STT) from 0.60% to 0.10%
  1. Refined filing and payment rules for Corporate and Individual tax returns:
  • specified Capital Gains Tax (CGT) filing requirements
  • outlined payment and withholding rules for taxes on passive income