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Philippines Tax Guide

Asia

Last verified June 2026

Sources & verification

Figures on this page were last verified against the cited sources in June 2026. Always check official sources before making a relocation or incorporation decision.

PwC Worldwide Tax Summaries — Philippines Grant Thornton — CREATE MORE Act (RA 12066)BIR — Bureau of Internal Revenue

Territorial

Best for

Zero capital gains
No CGT on investment, property, or crypto disposals (subject to "investor" classification).
Foreign income exempt
Territorial system — overseas income generally outside the local tax net.
No wealth tax
No annual tax on net worth or assets.
No inheritance tax
Estate and lifetime transfers not subject to inheritance tax.
Crypto-friendly
0% CGT plus favorable foreign-income treatment make this strong for crypto holders.

Personal Tax Score

70/100

Tax Friendly

Business Tax Score

76/100

Tax Friendly

Personal Income Tax

Tax Residency

Day Threshold

180 days

Note

180 days establishes residency

Income Tax Rates

Top Marginal Rate

35%

Structure

Progressive 0-35%

Foreign Income Treatment

System

Territorial

Details

Non-resident citizens taxed on Philippine-source income only

Investment Income

Capital Gains

0-15%%

Dividends

10%

Interest

20%

15% on real estate; exempt on securities under conditions

Wealth & Inheritance

Wealth Tax

No - No wealth tax

Inheritance Tax

No - Estate tax up to 6% on net estate

Special Regimes

Special Investor Resident Visa

Residency through investment

Practical Notes

English widely spoken. Growing economy. Various special economic zones.

Business & Corporate Tax

Corporate Income Tax

Headline Rate

25%

Effective Rate Note

25% standard CIT. Registered Business Enterprises (RBEs) under the Enhanced Deductions Regime (EDR) can elect a reduced 20% rate on income from registered activities (CREATE MORE Act, RA 12066, signed 11 Nov 2024). Alternative: 5% Special Corporate Income Tax (SCIT) on gross income. SCIT/EDR incentive periods extended to 17 or 27 years depending on impact tier.

Free Zone / Incentives

PEZA and other economic zones offer SCIT/EDR incentives. CREATE MORE expanded the 100% additional deduction on power expenses (from 50%) and extended incentive durations.

Withholding Taxes

Dividends

0-15%%

Interest

0-20%%

Royalties

0-20%%

VAT / GST

Rate

12%

Note

12% VAT

Compliance & Substance

Substance Requirements

Moderate - PEZA/IPA requirements

Compliance Friction

Moderate

Notable Regimes

CREATE MORE EDR 20%
SCIT 5% on gross
PEZA incentives
Various economic zones

OECD Pillar Two (15% global minimum tax)

No implementation

No Pillar Two legislation enacted. CREATE MORE Act (Nov 2024) focused on domestic CIT reform, not GloBE rules.

See full implementation tracker

Tax Treaty Network

US treatyYes

UK treatyYes

US totalizationNo

Total treaties~45

US-Philippines treaty in force. No US totalization.

See full treaty matrix

Data Sources

PwC Worldwide Tax Summaries — Philippines Grant Thornton — CREATE MORE Act (RA 12066)BIR — Bureau of Internal Revenue

Last verified: June 2026. Always check official sources before making a decision.

FAQ

What is the personal income tax rate in Philippines?

Philippines has a top personal income tax rate of 35%. The tax structure is: Progressive 0-35%. See the detailed breakdown above and verify with official sources.

Do I need to pay tax on foreign income in Philippines?

Philippines uses a territorial system for foreign income. Non-resident citizens taxed on Philippine-source income only

What are the residency requirements for Philippines?

Tax residency in Philippines generally requires 180 days of physical presence. 180 days establishes residency. Always verify current rules with official sources.

Is there a wealth tax in Philippines?

No, Philippines does not have a wealth tax. No wealth tax

What is the corporate tax rate in Philippines?

The corporate tax rate in Philippines is 25%. 25% standard CIT. Registered Business Enterprises (RBEs) under the Enhanced Deductions Regime (EDR) can elect a reduced 20% rate on income from registered activities (CREATE MORE Act, RA 12066, signed 11 Nov 2024). Alternative: 5% Special Corporate Income Tax (SCIT) on gross income. SCIT/EDR incentive periods extended to 17 or 27 years depending on impact tier.

US citizen moving to Philippines? Read this first.

Philippines uses a territorial system for foreign income. For US citizens this often combines well with FEIE.

•Foreign-source income may be exempt or only taxed on remittance in Philippines, but the US still taxes US citizens worldwide. FEIE (~$130k earned income) plus FTC on any Philippines tax paid is the standard combination.
•Self-employment tax (15.3%) is owed in full — Philippines has no totalization agreement with the US.
•Carefully document whether income is "Philippines-source" or foreign-source. The classification drives both Philippines and US tax outcomes; getting it wrong is the #1 audit risk in this category.
•Residency requires 180 days. Special regimes may further reduce Philippines tax — check the country page for current options.

Read the full US-citizen moving-abroad guide

Need someone to actually plan Philippines for you?

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