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Philippines Income Tax Rates and Deductions

Income Tax Rate for Individual Tax Payers

 

Net Taxable Income

 

Tax Rates

 

Upto P 10,000

 

5%

 

P10,001 to P30,000

 

P500 + 10% of the Excess over P10,000

 

P30,001 to P70,000

 

P2,500 + 15% of the Excess over P30,000

 

P70,001 to P140,000

 

P8,500 + 20% of the Excess over P70,000

 

P140,001 to P250,000

 

P22,500 + 25% of the Excess over P140,000

 

P250,001 to P500,000

 

P50,000 + 30% of the Excess over P250,000

 

Over P500,000

 

P125,000 + 32% of the Excess over P500,000 in 2000 and onward

 

 

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 return is filed and the second installment 15 of the same year at on or before July the Authorized Agent Bank (AAB) within the jurisdiction of the Revenue District Office (RDO) where the taxpayer is registered

Corporate Tax Rates in Philippines

The corporate tax rate is 30%. Corporations and resident foreign corporations are subject to a 2% minimum corporate income tax (MCIT) starting their fourth year of operation. The MCIT is based on gross income and it is paid in lieu of the 30% corporate tax on net income whenever it is greater than the latter. A 10% improperly accumulated earnings tax (IAET) is imposed on undistributed earnings of closely-held corporations, except branches of a foreign corporation and Philippine Economic Zone Authority (PEZA) registered corporations. PEZA registered corporations pay the special tax on gross income earned in lieu of all taxes.

Capital Gain Tax Rate in Philippines

For real property capital gain tax rate is  6%. Deadline is Within 30 days after each sale, exchange, transfer or other disposition of real property.

Withholding Tax Rate in Philippines

Types of taxable income                                         Tax rate
(For non-resident)

Dividend                                                                     15%
Interest                                                                       20%
Royalty                                                                       30%
Technical Fee                                                               30%

 

 

All other taxable income earned by domestic and resident foreign corporations is subject to a 20% final withholding tax. However, Regional operating headquarters are taxed at 10% on taxable income. Special economic zone enterprises duly registered with the Philippines Economic Zone Authority are taxed at the rate of 5% on gross income.

The net capital gains from the sale of shares of stock of a domestic corporation are taxed on a per transaction basis at the rate of 5% on the first PhP 100,000 and 10% in excess of said amount. On the other hand, the sale of shares of stock of a domestic corporation through the Philippine Stock Exchange or through the initial public offering is subject to a percentage tax on the transaction at the rate of 0.5% of the selling price.

The sale of land, building and other real properties classified as capital asset is subject to 6% final capital gains tax based on the gross selling price.

Any branch profit to be remitted to the Head Office is additionally taxed at the rate of 15%.

Value Added Tax/ Sales Tax Rate in Philippines

A 12% value added tax (VAT) of the gross selling price is imposed to all importation, sale, barter, exchange or lease of goods or properties and sale of services. The term 'Gross selling price' means the total amount of money or its equivalent that the purchaser 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.

Philippines Dates of filing Returns / Reporting and Payment

The tax year ends on 31 December in Philippines and tax returns are due by 15 April of the following year.

 
 

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