The Capital Market Efficiency Promotion Act (CMEPA), signed into law as Republic Act No. 12214, took effect on July 1, 2025. This reform aims to simplify and harmonize tax rules for investment products across all Philippine financial institutions.

Key Highlights:

  • Flat 20% Tax on Interest Income: All forms of interest income, including bank deposits, time deposits, and trust accounts, are now uniformly taxed at 20%.
  • Mutual Funds and UITFs Now Taxed: Earnings from mutual funds and UITFs will now be subject to the 20% final withholding tax.
  • Timing Matters: The new tax applies to earnings credited or paid out on or after July 1, 2025.
  • Exemptions: Some exemptions may apply, particularly for non-resident aliens or corporations.
  • Why This Change?: CMEPA is intended to streamline compliance, align local tax treatment with global practices, and support capital market growth.

 

Need Help?

Our team is ready to help you understand how this affects your account. Contact our Customer Service at:

  • 24-Hour Customer Service: (+632) 8888-1700
  • Email: service@eastwestbanker.com
  • Or visit any EastWest Store near you