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Philippines Income Tax Rates

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Philippines Income Tax Rates

Income of residents in Philippines is taxed progressively up to 32%.

 Taxable  Taxable Income PhP 0  PhP !0"000#

Tax Rate 



%$PhP !0"000  PhP 30"000#

PhP $00

!0%

PhP 30"000  PhP 0"000#

PhP 2"$00

!

%$PhP 0"000  PhP !&0"000#

PhP '"$00

20%

PhP !&0"000  PhP 2$0"000#

PhP 22"$00

2

%$PhP 2$0"000  PhP $00"000#

PhP $0"000

30%

(ver PhP $00"000#

PhP !2$"000

32%

 The above rates also apply tto o individuals )ho derive income income from business business *including capital gains from the sale transfer or exchange of shares in a foreign corporation+ or from the practice of a profession.

Individuals occupying occupying managerial and highly technical positions employed by R,-s" R(,-s" multinational companies" oshore business units and petroleum service contractors/subcontractors are taxed at !$% on their gross income. This website stores data such as cookies to enable essential site Income is marketing, divided into the follo)ing three categories )hich are taxed separately" as functionality, as well as personalization, and analytics. You summarised belo). may change your settings at any time or accept the default settings.

ompensation employment income# This income is taxed at progressive rates on gross income after deduction of personal and additional exemptions but )ithout deductions for expenses. Marketing

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Passive income# This income *i.e. dividends" certain interest" royalties" etc.+ is sub1ect to nal )ithholding tax only.

usiness income and professional income# This income is taxed at progressive rates on net business income" or income from the practice of a profession" profession" i.e. after deduction of certain specied expenses and any excess of personal and additional exemptions over compensation income.

 T45467  T45467 I8(97

R7:I;78T ITI<78: Resident citi=ens of the Philippines are taxed on all their net income derived from sources )ithin and )ithout the Philippines.

46I78 I8;I>I;?46: 4n alien individual" )hether a resident or not of the Philippines" is taxable only on income derived from sources )ithin the Philippines. Resident aliens are taxed in the same manner as resident citi=ens on income sourced )ithin the Philippines.

 Tax  Tax is generally generally )ithheld in in [email protected] amounts amounts from from salary and )ages )ages to satisfy satisfy the nal tax liability. If not" then the balance must be paid )hen ling the return" )hich

isstores reAuired on or This website data such asbefore !$ 4pril of the year follo)ing the year of income. In some cookies to enable site cases"essential income tax liability may be paid in t)o eAual installments. functionality, as well as marketing, personalization, and analytics. You may change your settings at any time or accept the default settings. (PTI(846 :T48;4R; ;7;?TI(8 *(:;+

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7xcept for individuals earning compensation income" resident citi=ens" nonresident Personalization citi=ens" and resident resident aliens shall be allo)ed to claim (:; in lieu of the itemised deductions of ordinary and necessary expenses paid or incurred during the year.

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 The (:; allo)ed allo)ed shall be a maximum of &0% of of gross sales or gross gross receipts receipts )ithout deduction of the cost of sales or cost of services.

 The computation computation and the payment payment using the (:; shall liBe)ise liBe)ise apply apply at the time of of ling of the Auarterly income tax return.

asis C Resident citi=ens are taxed on )orld)ide incomeD resident aliens and nonresidents nonres idents pay tax only on Philippine source income. ,o)ever" foreign individuals individuals can avail themselves of preferential tax treatment or may be exempt from income tax under applicable tax treaties" sub1ect to a conrmatory ruling from the IR.

Residence C 4ll citi=ens are ordinarily considered resident unless they meet the reAuirements to be deemed nonresident. The residence of foreign )orBers is generally established )hen the aggregate length of stay in any calendar year exceeds !'0 days.

 Tax  Tax Eiling Eiling status C 9arried couples couples in the the Philippines )ho do not derive derive income purely from compensation al)ays must le a 1oint income tax return.

 Taxable  Taxable income C Taxable personal personal income is all all income less allo)able deductions deductions and personal exemptions. It includes compensation" business income" capital gains *arising from the sale of real property and share transactions+" dividends" interest" rents" royalties" annuities" pensions and a partnerFs distributive share of the net This website stores data such as income of general professional partnerships. 9inimum )age earners *9G7s+ are cookies to enable essential site exempt fro from m the payment of income tax on their taxable income. ,oliday pay" functionality, as well as marketing, personalization, and analytics. You shift dierential pay and ha=ard pay received by such 9G7s overtime pay" night may change your settings at any also is exempt. time or accept the default settings.

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,o)ever" an employee )ho receives/earns additional compensation" such as commissions"" honoraria" fringe benets" benets in excess of the nontaxable commissions Marketing ceiling of P,P 30"000 taxable allo)ances and taxable income other than the exempt Personalization remuneration mentioned above do not Aualify as an 9G7 and" therefore" his/her Analytics

entire earnings are not exempt from income tax.

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In lieu of itemised deductions" an individual may elect to use the optional standard deduction *(:;+" )hich may not exceed &0% of the total gross income" in computing taxable income for the taxable Auarter/year. Auarter/year. ,o)ever" once an election is made to use the (:;" it is irrevocable for the taxable year for )hich the return is made.

apital gains C 4n individual is sub1ect to capital gains tax on the sale of real property at a rate of H% of the gross sales price or current fair marBet value" )hichever is higher. 4n individual is also sub1ect to capital gains tax on the sale of shares not traded on the stocB exchange at a rate of $% of the net gain not exceeding P,P !00"000" and !0% on the excess. ains derived from the sale of shares listed and traded on the stocB exchange are taxed at onehalf of !% of the gross sales price.

 Tax  Tax ;eductions and tax allo)ances allo)ances C :ub1ect :ub1ect to certain restrictions" restrictions" deductions are are granted for premium payments on health and/or hospitalisation insurance. Personal allo)ances are available to the taxpayer and his/her spouse" and Aualied dependent children.

(ther taxes on individuals#

apital duty C 8o

This website stores data such as :tampessential duty Csite >arious rates of duty apply depending on the type of document. cookies to enable functionality, as well as marketing, apital acAuisition personalization, and acAuisitions analytics. Yous tax C 8o may change your settings at any time or accept the default settings.

Real property tax C 4 property tax is imposed on real property at a rate that Privacy Policy depends on the propertyFs location. The tax should not exceed 3% of the assessed value per the tax declaration. Marketing

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Inheritance/estate tax C Tax is imposed on the net estate of both residents and nonresidents at rates bet)een $% and 20%.

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8et )ealth/net )orth tax C 8o

:ocial security contributions C The employee is reAuired to pay monthly contributions contributio ns *ranging from P,P 33.30 to P,P $00+ to the social security system based on his/her salary bracBet.

4dministration 4dminis tration and compliance#

Philippines Tax year C Philippines tax year is the calendar year

 Tax  Tax Eiling Eiling and payment payment of tax C Tax returns returns are due due on or before before !$ 4pril after after the close of the tax year. Tax on compensation income is )ithheld monthly by the employer either manually or through the 7lectronic Eiling and Payment :ystem on or before the !0th day of the month follo)ing the month in )hich )ithholding )as made for the months of January to 8ovember" and on or before !$ January of the follo)ing year for the month of ;ecember.

Individuals receiving receiving only compensation income from one employer during the taxable year may Aualify for substituted ling provided the amount of tax due eAuals the amount of tax )ithheld by the employer at the end of the taxable calendar year. In case of married individuals" the same reAuirements must be met to Aualify for substituted ling. This website stores data such as cookies to enable essential site functionality, as well as marketing, Penalties Penalti es C 6ate payments incur a penalty eAual to 2$% of the amount due. 4nnual personalization, and analytics. You interest of 20% istime assessed on the unpaid amount from the due date until fully paid. may change your settings at any 4 compromise or accept the default settings. penalty )ill be based on the tax due exclusive of the 2$% surcharge

and 20% interest. Privacy Policy Marketing Personalization Analytics

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Philippines orporate Tax

orporate income tax rate both for domestic and resident resident foreign corporations in Philippines is 30%.

ompany tax is payable by domestic companies on all income derived from sources )ithin and )ithout the Philippines. Eoreign corporations" )hether resident or nonresident" are taxable only on income derived from sources )ithin the Philippines.

,o)ever" nonresident foreign corporations are" in certain circumstances" sub1ect to a nal )ithholding )ithholding tax on passive *investment+ incomes at rates generally higher than the applicable tax rates applying to domestic and resident foreign foreign corporations. Resident companies are those that are created or organised under the la)s of the Philippines or foreign companies duly licensed to engage in trade or business in the Philippines.

 The corporate corporate income tax rate both both for domestic domestic and resident resident foreign foreign corporations corporations is 30% based on net taxable t axable income. 7xcluded fr from om the income tax are dividends received from domestic corporationsD interest on Philippine currency banB deposit and yield or any other monetary benet from deposit substitutes and from trust funds and similar arrangementsD and other passive income previously sub1ect to nal taxes.

This website stores data such as Interest income cookies to enable essential site derived from the expanded foreign currency deposit is sub1ect to a functionality, as well nal taxasofmarketing, .$%. 4ll other interest earned by domestic and resident foreign personalization, and analytics. You corporations is sub1ect to a 20% nal )ithholding tax. may change your settings at any time or accept the default settings.

Regional operating headAuarters are taxed at !0% on taxable income.

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<one 4uthority are taxed at the rate of $% on gross income in lieu of national and local taxes" except real property tax. The term Fgross incomeF refers to gross sales Saveor gross revenue Accept Allderived from the business activity )ithin the 7co=one" net of sales Analytics

 

discount" sales returns and allo)ances" less the cost of sales or direct costs but before deduction is made for administrative expenses and incidental losses during the taxable period.

Philippines tax year runs for the calendar year although approval of the ommissioner of Internal Revenue can be obtained for the adoption of a scal year.  Tax  Tax is payable in four Auarterly Auarterly instalments" instalments" )ith every corporation corporation l ling ing Auarterly income tax returns for the rst three Auarters and tax being payable H0 days follo)ing the end of each Auarter. 4 nal return covering the full year is reAuired to be lodged !0$ days after year end at )hich time the balance of tax" after deducting the prior three instalments and creditable )ithholding tax" is payable. 4ny excess is refundable or can be claimed as tax credit against future tax payments.

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4 minimum corporate income tax of 2% based on the gross income is imposed beginning on the fourth taxable year immediately follo)ing the commencement of the business operation of the corporation. 4ny excess of the minimum corporate income tax over the normal income tax may be carried for)ard and credited against the normal income tax for the three taxable years immediately succeeding. The computation and the payment of 9IT shall liBe)ise apply at the time of ling of the Auarterly corporate income tax. The term Fgross incomeF for the purpose of applying the minimum corporate income tax shall mean the gross sales less sales returns" discounts and allo)ances and cost of goods sold. This website stores data such as cookies to enable essential site  The :ecr :ecretary of Einance" Einance" ho)ever" ho)ever" may suspend suspend the imposition imposition of the minimum minimum functionality, as well asetary marketing, corporate income personalization, and analytics. Youtax on any corporation )hich suers losses on account of may change your settingslabour at any time prolonged dispute" or because of force ma1eure or because of legitimate or accept the default settings. business reverses. Privacy Policy Marketing

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 The net capital capital gains from from the sale of shares shares of stocB of a domestic domestic corporation corporation not listed and traded through the Philippine :tocB 7xchange are taxed on a per transaction basis at the rate of $% on the rst PhP !00"000 and !0% in excess of said amount. (n the other hand" the sale of shares of stocB of a domestic corporation through the Philippine :tocB 7xchange or through the initial public oering is sub1ect to a percentage tax on the transaction at the rate of !/2 of !% of the selling price. 4ny gain or loss from said transaction is not considered for income tax purposes.

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 The sale of land" land" building building and other real properties properties classied classied as capital capital asset is sub1ect to H% nal capital gains tax based on the gross selling price" current fair marBet value or =onal value at the time of sale" )hichever is higher.

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 The !0% improperly improperly accumulated accumulated earnings earnings tax *I47T+ *I47T+ is imposed on improperly improperly accumulated taxable income earned by closelyheld closelyheld corporations. The term Fcloselyheld corporationF corporationF refers to corporations )here at least $0% of the capital stocB or voting po)er is o)ned directly or indirectly by or for not more than 20 individuals.

This website stores data such as cookies to enable essential site functionality, as well as marketing, personalization,  The and tax analytics. base ofYou the !0% I47T is the taxable income of the curren currentt year plus in income come may change your settings at any time exempt from tax" income excluded from gross income" income sub1ect to nal tax" or accept the default settings.

and the amount of net operating loss carryover carryover deducted. It is reduced by income tax paid for the current year" dividends actually or constructively paid" and amount reserved for the reasonable needs of the business. Privacy Policy Marketing Personalization

 The I47T does not apply to the the follo)ing corporations# corporations#

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*a+ anBs and other nonbanB nancial intermediaries

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*b+ Insurance companies *c+ Publiclyheld corporations *d+ Taxable partnerships *e+ eneral professional partnerships *f+ 8ontaxable 1oint ventures" ventures" *g+ ;uly registered enterprises located )ithin the special economic =ones declared by la) )hich en1oy payment of special tax rate on their registered operations or activities in lieu of other taxes" national or local.

R48, PR(EIT: T45

4 branch is classied as a resident foreign corporation. 4s such" it is sub1ect to income tax at the rate of 30% on its net income derived )ithin the Philippines. 4ny branch prot to be remitted to the ,ead (@ce is additionally taxed at the rate of !$%. Eor purposes of branch prot remittance" income items )hich are not eectively connected )ith the conduct of its trade or business in the Philippines ar are e not considered branch prots. :uch income items include interests" dividends" rents" royalties" including remuneration for technical services" salaries" )ages" premiums" annuities" emoluments or other xed or determinable annual" periodic or casual gains" prots" income and capital gains received during each taxable year from all sources )ithin the Philippines.

This website stores data such as  T o be essential Feectively connectedF" it is n not ot necessary necessary that the income be derived from from cookies to  To enable site connectedF" the actual operation of the branchFs trade or business. It is [email protected] that the functionality, as well as marketing, personalization, and analytics. You the business activity in )hich the branch is engaged. ,o)ever" income arises from may change your settings at any time tax does not apply to prots remitted by a branch coming the !$% branch prot or accept the default settings.

from those activities duly registered )ith the Philippine 7conomic <one 4uthority *P7<4+.

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Eringe benets furnished or granted in cash or in Bind by an employer to an individual employee *except ranB and le employees+ are taxed at the rate of 32% based on the grossedup monetary value of the fringe benets.

6(46 T457:  There are are no local taxes taxes other than local authority authority rates and local local *business+ *business+ taxes and permit fees.

(T,7R T457: (ther taxes include the follo)ing.

P7R78T47 T457: Percentage taxes are imposed on carriers *domestic or international+" franchises" banBs" nancial intermediaries" nance companies" life insurance insurance companies" agents of foreign insurance insurance companies" overseas communications" communications" amusement" )innings and stocB transactions.

This website stores data such as I8ITI46 P?6I cookies to enable essential site(EE7RI8 *IP(+ T45 functionality, as well as marketing, personalization, and analytics. You may change your settings at any time :ale" barter" exchange or other disposition through initial public oering of shares of  or accept the default settings.

stocB in closely held corporations is taxed at the rates provided belo) based on the gross selling price or gross value in money of the shares of stocB sold" bartered" Privacy Policy exchanged or other)ise disposed of in accordance to the total outstanding shares of  stocB after the listing in local stocB exchange# Marketing Personalization ?p to 2$% Analytics

(ver 2$% but not over 33.33%

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&% 2%

 

(ver 33.33%

!%

75I:7 T457: 7xcise taxes are imposed on alcohol and tobacco products" petroleum and mineral products" produc ts" automobiles and certain nonessential nonessential goods.

;(?978T4RL :T49P T45 ;ocumentary stamp tax is imposed on certain documents including shares certicates" banB cheAues" bonds" sales documents of real properties and mortgages.

R746 PR(P7RTL P R(P7RTL T45 T45 Real property tax is imposed on o)ners of real property and is calculated on the assessed value of the property.

;7T7R9I84TI(8 (E T45467 I8(97 This website stores data such as cookies to enable essential site functionality, as well as marketing, 4 companyFs taxable prot is calculated by deducting ordinary and necessary personalization, and analytics. You expenses paid or time incurred during the tax year in carrying on business. Typical may change your settings at any expenses include salaries" travelling expenses and rentals" all of )hich need to be or accept the default settings.

substantiated to be deductible. 4dditionally" taxes that relate to the business other substantiated than income" estate" gift and energy taxes and taxes charged to local benets of a Privacy Policy Bind liBely to increase the value of property are deductible. In calculating taxable income" special rules and exemptions apply in the circumstances outlined belo). Marketing Personalization Analytics Save

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I8>7:T978T I878TI>7:

 Tax  Tax incentives available available to enterprises enterprises rregistered egistered )ith )ith the oard oard of Investments *(I+ or the Philippine 7conomic <one 4uthority *P7<4+ include six yearsF income tax holidays for pioneer rms and four years for nonpioneer rms )ith expanding rms granted three years. Eor P7<4 registered enterprises" a $% tax on the modied gross income is imposed after the end of the income tax holiday.

 The tax holiday holiday may be extended extended for an additional additional year in specied circumstances circumstances but in no case may the aggregate period of the tax holiday exceed eight years. Eor the rst ve years" an enterprise registered )ith the (I or P7<4 is" in specied circumstances" circumst ances" allo)ed an additional deduction from the taxable income of $0% of the )age expense corresponding to the increment in the number of direct labour for sBilled and unsBilled )orBers.

7nterprises located in less developed areas are" in specied circumstances" allo)ed a !00% deduction of said )ages and a !00% deduction for construction costs. 7nterprises located in export processing =ones and special economic =ones are liBe)ise entitled to income tax holidays and tax and dutyfree importation of ra) materials and eAuipment.

Fross income earnedF shall refer to gross sales or revenues derived from business activity )ithin the respective =ones" net of sales discounts" sales returns and allo)ances and minus cost of sales or direct costs but before any deduction is made for administrative" marBeting" selling and/or operating expenses or incidental losses during a given period. This website stores data such taxable as cookies to enable essential site functionality, as well as marketing, personalization, and analytics. You may change your settings at any time or accept the default settings.

;7PR7I4TI(8 Privacy Policy Marketing 4ny recognised depreciation method may be used if it is FreasonableF. The annual

depreciation allo)ance is determined on the basis of depreciable property" Personalization estimated useful life and salvage value.

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Eor extraction industries" a distinction is made bet)een petroleum and other mining activities. ;istinctions are also made for dierent categories of expense *e.g. tangible or intangible" exploration or drilling etc+" and dierent methods apply *e.g. expenditure" cost depletion etc+.

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Eor taxpayers engaged in a trade or business" the valuation of inventories must meet the follo)ing conditions# conditions#  it must conform as nearly as possible to the best accounting practice in the trade or businessD and  it must clearly reMect the income

4s such" although it cannot be uniform for all taxpayers" the system used must come )ithin the scope of the best accounting practice in the particular trade or business.. In order to clearly reMect income" the inventory practice of a taxpayer business should be consistent from year to year as greater )eight is given to consistency than to any particular method or basis of valuation. 4s long as the method is substantially in accord )ith these regulations" it is liBely to be accepted.

 The basis of of valuation )hich )hich is most commonly commonly used by business concerns concerns and and )hich meets the This website dataprice. such as reAuirements of the tax la)s is the cost price or the lo)er of cost orstores marBet cookies to enable essential site functionality, as well as marketing, personalization, and analytics. You may change your settings of at any Regardless thetime basis of valuation" inventories are sub1ect to investigation by the or accept the default settings. ommissioner of Internal Revenue Revenue and the taxpayer must satisfy the ommissioner of the correctness of the price adopted. Privacy Policy Marketing Personalization

4PIT46 4I8: 48; 6(::7:

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:ee discussions above. (rdinary assets include# *a+ :tocB in trade of the taxpayers" or other property of a Bind )hich )ould prop properly erly be included in the inventory of the taxpayer if on hand at the end of the taxable year *b+ Property held by the taxpayer primarily for sale to customers in the ordinary ordinary course of trade or business *c+ Property used in trade or business of a character )hich is sub1ect to allo)ance for depreciation *d+ Real property used in trade or business.

4ll properties held by the taxpayer" )hether or not connected )ith trade or business" not included in the enumeration of ordinary assets are capital assets. apital gains arise from the disposal of Fcapital assetsF.

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;ividends received by a Philippine corporation or by a resident foreign corporation from a Philippine corporation are not sub1ect to income tax. ,o)ever" resident individuals receiving dividends are sub1ect to !0% nal income tax.

8o credit granted for underlying corporate prots out of )hich the dividends are This website stores dataissuch as declared.. ,o)ever" a domestic corporation that o)ns a m declared ma1ority a1ority of the voting stocB cookies to enable essential site ofasawell foreign corporation from )hich it receives dividends is deemed to have paid the functionality, as marketing, underlying foreign personalization, and analytics. You taxes. may change your settings at any time or accept the default settings. Privacy Policy

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Personalization Analytics Interest is deductible on a cash or accrual basis depending upon the taxpayerFs

method of accounting but shall be reduced by 33% to the extent that a portion of

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interest income has been sub1ected to nal tax. Ghere interest is paid to a foreign lender" it )ill remain deductible so long as it is incurred in connection )ith the trade or business of the taxpayer.

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6osses may be oset against all income and capital gains in the same tax year. 6osses must be sustained by the taxpayer during the taxable year and must be incurred in relation to the trade and business and evidenced by completed transaction.

(perating loss for any taxable year immediately preceding the current taxable year )hich had not been previously oset as deduction from gross income may be carried over as a deduction from gross income for the next three consecutive years immediately follo)ing the year of such loss. This is Bno)n as the 8et (perating 6oss arryover or the excess of allo)able deduction over gross income in a taxable year.

,o)ever" there are certain limitations to be follo)ed# *a+ any net loss incurred in a taxable year during )hich the taxpayer is exempt from income tax shall not be allo)ed as deduction *b+ allo)ed only if no substantial change in the o)nership in that#   stores . notdata less than $% in nominal nominal value of the the outstanding outstanding issued shares" shares" if the This website such as $% business is insite the name of the corporation" is held by or on behalf of the same cookies to enable essential functionality, as well asor marketing, personsD personalization, and analytics. You may change settings any time   your . not lessatthan $% of the paid in capital of the corporation" if the business business is in or accept the default settings. the name of the corporation" corporation" is held by or on behalf of the same persons.

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Eor mines other than oils and gas )ells" a net operating loss )ithout the benet of Marketing incentives provided for under 7xecutive (rder 8o. 22H" as amended" other)ise Bno)n as the (mnibus Investment ode of !N'" incurred in any of the rst ten Analytics years of operation may be carried over as a deduction from gross income for the next ve years immediately follo)ing the year of loss. Personalization

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E(R7I8 :(?R7; I8(97

4 Philippine *domestic+ corporation is taxed on )orld)ide income. Eoreign income is taxed )hen earned or received" depending on the accounting method used by the taxpayer. Resident foreign corporations are taxed in the Philippines only on Philippine source income.

 T45  T45 I878TI>7: I878TI>7:

 Tax  Tax credits are available available for taxes taxes and duties paid on purchases purchases of ra) ra) materials of products for export" domestic capital eAuipment" domestic breeding stocB and genetic materials. 4 number of :pecial 7conomic <ones" some of )hich are operated as separate customs territories also exist. *Refer also to FInvestment incentivesF above.+

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This website data such as Instores lieu of the itemised deduction of ordinary ordinary and necessary expenses paid or cookies to enable essential site incurred to calculate the net taxable prot" domestic and foreign corporations are functionality, as well as marketing, allo)ed an (:;You in the amount not exceeding &0% of gross income. The personalization, and analytics. computation the payment using the (:; shall liBe)ise apply at the time of may change your settings atand any time or accept the default ling of settings. the Auarterly corporate income tax.

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Relief from double taxation is provided by )ay of tax treaties and/or by means of foreign tax credits. The treaties generally dene )hen a taxpayer )ill be deemed for income tax purposes to be doing business in the Philippines.

(RP(R4T7 (RP(R4 T7 R(?P: R(? P:

roup taxation is not permitted. The grouping of corporations has no tax implications as the tax la)s treat each corporation in isolation.

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Philippine corporations corporations can claim a deduction for royalties" management services and interest charges paid to foreign [email protected] provided the amount represents an armFs length price and the appropriate )ithholding taxes are )ithheld and remitted. :ome interest deductions can be aected by related party transactions involving nonresidents.

GIT,,(6;I8 T45 This website stores data such as cookies to enable essential site functionality, as well as marketing, 8(8R7:I;78T E(R7I8 (RP(R4TI(8: personalization, and analytics. You may change your settings at any time or accept the default settings.

Interests on foreign loans" royalties and dividends paid to nonresident foreign corporations are sub1ect to )ithholding tax at source at the time of their accrual in Privacy Policy the taxpayerFs booBs. The only exemption to this rule is )hen" at the time of the Marketing accrual of the income" there is a governmental restriction )hich prevents the actual remittances of the income due to the nonresident. nonresident. Personalization Analytics Save;I>I;78;: Accept All

 

;ividends received by nonresident foreign corporations from domestic corporations are sub1ect to a nal tax of 30%. ,o)ever" tax is )ithheld at the reduced rate of !$% in certain circumstances.

I8T7R7:T Interest received by nonresident foreign corporations is sub1ect to the follo)ing nal )ithholding tax# *a+ 20% on interest paid or accrued from foreign loans contracted on or after ! 4ugust !N'H *b+ 30% on other interest.

R(L46TI7: Royalties received by nonresident foreign corporations are sub1ect to a nal )ithholding )ithholdin g tax of 30%. ,o)ever" said tax rate may be reduced under applicable applicable tax treaties.

 T7,8I46 4::I:T 4::I:T487 487 48; :7 :7R> R>I7 I7 E77:  Technical  Technical assistance assistance and service service fees received received by nonresident nonresident foreign foreign corporations corporations are sub1ect to the nal )ithholding tax of 30%.

This website stores data such as R78T46 48; 674:I8 I8(97 cookies to enable essential site functionality, as well and as marketing, Rental leasing income received by nonresident foreign corporations is sub1ect personalization, and analytics. You to the follo)ing nal )ithholding )ithholding tax# may change your settings at any time or accept the default settings.

 2$% of the gross amount on lm rentals from sources )ithin the Philippines

 &.$% of the gross amount on charter feer or rentals in respect of foreign vessels Privacy Policy  .$% of the gross amount on rentals and other fees in respect of aircraft" Marketing machinery and other eAuipment.

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 The follo)ing follo)ing income received received by nonresident nonresident aliens *not engaged in trade or business in the Philippines+ are sub1ect to a nal )ithholding tax of 2$% of the gross amount of# *a+ ;ividends" interest and royalties *b+ Technical assistance and service fees *no tax is )ithheld in certain circumstances+ *c+ Rental and leasing income *d+ apital gains *special rules apply to residents of double tax treaty states+.

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 The follo)ing follo)ing income received received by Philippine Philippine citi=ens citi=ens and resident resident aliens are sub1ect sub1ect to a nal )ithholding tax of 20% of the gross amount of# *a+ Interest *b+ Royalties" except royalties on booBs" literary )orBs and musical compositions )hich are sub1ect to !0% *c+ Technical assistance and service fees.

This website stores data such as 75,487 (8TR(6 cookies to enable essential site functionality, as well as marketing, personalization, and analytics. You may change yourangBo settings any timeng Pilipinas  The angB o at :entral Pilipinas *:P+ *:P+ administers administers the exchange exchange control control la)s of the the or accept the default settings. Philippines including establishing minimum and maximum rates for the foreign

exchange dealings of banBs. ,o)ever" banBs may set their o)n rates for trading foreign exchange )ith the public. The value of the peso generally Moats freely" Privacy Policy although intervention by the :P does occur )hen deemed necessary. Marketing Personalization Analytics Save 

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:ales taxes / >alue 4dded Tax *>4T+

 

4 !2% value added tax *>4T+ of the gross selling price or gross value in money of the goods is imposed to all importation" sale" barter" exc exchange hange or lease of goods or properties and sale of services.

Fross selling priceF means the total amount of money or its eAuivalent that the purchaser purcha ser pays or is obligated to pay to the seller in consideration of the sale" barter or exchange of the goods or properties" excluding the value added tax. The excise tax" if any" on such goods or properties shall form part of the gross selling price.

What is the income tax rate in the Philippines? For individuals earning purely compensation income and those engaged in business and practice of profession, the

applicable tax rate table is as follows: Taxable

Income

Tax Rate

More than

But less than

0

P10,000

!

P10,000

P"0,000

P00 # 10! of the $xcess over P10,000

P"0,000

P%0,000

P&,00 # 1! of the $xcess over P"0,000

P%0,000

P1'0,000

P(,00 # &0! of the $xcess over P%0,000

P1'data 0,000such as P&0,000 P&&,00 # &! of the $xcess over P1'0,000 This website stores cookies to enableP&essential 0,000 site P00,000 P0,000 # "0! of the $xcess over P&0,000 functionality, as well as marketing, P P00 00,0 ,000 00 P1& P1&,0 ,000 00 # "&! "&! of th the e $xce $xcess ss over over P P00 00,0 ,000 00 in &0 &000 00 an and d onwar onward d personalization, and analytics. You For domestic corporations, the corporate tax rate is "0! of the )et taxable income from all sources starting *anuary may change your settings at any time 1, &00+ or accept the default settings. For proprietary educational institutions and non-stoc., non-profit hospitals, the tax rate is 10! of the )et taxable income, provided that the gross income from unrelated trade, business or other activity does not exceed 0! of the total gross income Privacy Policy For /s, agencies 2 instrumentalities, the tax rate is "&! of the )et taxable income from all sources For all taxable partnerships, the tax rate is also "&! of the )et taxable income from all sources Marketing 3nternational arriers are taxed &! on their /ross Philippine Billings Personalization For 4egional perating 5ead6uarters 74589, the tax rate is 10! of axable 3ncome

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Income Tax Rate Table for Individual Taxpayers in the Philippines

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This is the regular income tax rate table or schedule used for computing income tax due for Individuals Earning Purely Compensation Income and Individuals Engaged in Business and Practice of Profession: TAX TABLE

If TAXABLE INCOME is:

TAX DUE is:

 Not over P 10,000

5%

Overr P 10,00 Ove 10,000 0 but not not over over P 30,00 30,000 0

P 500 500 + 10% 10% of the the excess excess over over P 10,000 10,000

Overr P 30,000 Ove 30,000 but but not over over P 70,000 70,000

P 2,500 2,500 + 15% 15% of the excess excess over over P 30,000 30,000

Over P 70,000 but not over P 140,000

P 8,500 + 20% of the excess over P 70,000

Over P 140,000 but not over P 250,000

P 22,500 + 25% of the excess over P 140,000

Over P 250,000 but not over P 500,000

P 50,000 + 30% of the excess over P 250,000

Over P 500,000

P 125,000 + 32% of the excess over P 500,000

Tax Rate

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Note: When the tax due exceeds P2,000.00, the taxpayer may elect to pay in two equal installments, the first installment to be paid at the time the

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return is filed and the second installmen installmentt 1 of the same year at on or before !uly the "uthori#ed "$ent %an& '""%( within the )urisdiction of the *e+enue istrict -ffice '*-( where the taxpayer is re$istered.   Tax ate

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%e$innin$ on the /th year immediately followin$ the year in which such corporation commenced its business operations, when the minimum corporate income tax is $reater than the tax computed usin$ the normal income tax.   Passive Income ". Inte Intere rest st from rom cur urrren ency cy depo deposi sitts$ trus trustt funds nds and depo deposi sitt subs ubstit titute utes

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