Philippines Tax Rates
The Philippines operates a progressive income tax system with rates from 15% to 35%, reformed under the TRAIN Law (Tax Reform for Acceleration and Inclusion). The standard corporate tax rate is 25% (20% for small companies), and the country levies a 12% VAT. The Philippines taxes citizens on worldwide income regardless of residency, similar to the United States. Significant tax reforms have been ongoing through the Comprehensive Tax Reform Program.
Top Income Tax Rate
35%
Corporate Tax Rate
25%
VAT / Sales Tax
12%
Capital Gains Tax
15%
Detailed Tax Information
Income Tax Brackets
The Philippines' personal income tax was reformed by the TRAIN Law effective 2018, with further adjustments from 2023. Citizens (resident or non-resident) and resident aliens are taxed on worldwide income. Non-resident aliens engaged in trade or business are taxed on Philippine-sourced income at the same graduated rates. Non-resident aliens not engaged in trade are taxed at a flat 25% on gross income. The first PHP 250,000 of taxable income is exempt.
| Income Range | Tax Rate |
|---|---|
| ₱0 – ₱250K | 0% |
| ₱250K – ₱400K | 15% |
| ₱400K – ₱800K | 20% |
| ₱800K – ₱2.0M | 25% |
| ₱2.0M – ₱8.0M | 30% |
| ₱8.0M+ | 35% |
Corporate Tax
The Philippines' regular corporate income tax (RCIT) rate is 25% for most corporations. Domestic corporations with net taxable income not exceeding PHP 5 million and total assets not exceeding PHP 100 million enjoy a reduced rate of 20%. A Minimum Corporate Income Tax (MCIT) of 2% of gross income applies if greater than the RCIT, beginning in the fourth year of business. The CREATE MORE Act provides enhanced incentives for registered business enterprises in economic zones.
Standard Rate
25%
Small Business Rate
20%
Capital Gains Tax
Capital gains on the sale of shares of stock not traded on the stock exchange are taxed at 15%. Capital gains on the sale of real property classified as capital assets are taxed at 6% of the gross selling price or fair market value (whichever is higher). Shares traded on the Philippine Stock Exchange are subject to a stock transaction tax of 0.6% of gross selling price in lieu of capital gains tax.
Rate
15%
VAT / Sales Tax
The Philippines levies VAT at a flat rate of 12% on the sale of goods and services. Exempt transactions include sales of agricultural food products, educational services, healthcare services, residential rentals not exceeding PHP 15,000 per month, and financial services. Small businesses with annual gross sales below PHP 3 million are VAT-exempt (subject to 3% percentage tax or the 8% flat rate option).
Standard Rate
12%
Cryptocurrency Tax
The Philippines has not enacted specific cryptocurrency tax legislation. The Bangko Sentral ng Pilipinas (BSP) regulates virtual currency exchanges as remittance companies, but there are no specific tax rules for crypto gains. In principle, crypto gains could be subject to income tax under general tax provisions as 'other income,' but enforcement is minimal.
Tax Treaties
The Philippines has approximately 43 double taxation agreements in force. These treaties provide reduced withholding rates on dividends, interest, and royalties. The Philippines generally follows the UN Model Convention in treaty negotiations. The country is a member of the OECD Inclusive Framework on BEPS and has signed the Multilateral Convention on Mutual Administrative Assistance.
Treaty Network
43
Double taxation agreements
Major treaty partners:
Key Details
Relocate to Philippines
See how much you could save by moving here from your current country.
+$19K
Tax in United States
$24K
24.4% effective
Tax in Philippines
$5K
5% effective
You Save
79.5%
less tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
