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Tax Considerations in the Philippines

An overview of the major types of taxes levied in Philippines is provided in the table below. Other taxes may also be applicable, including real property tax, percentage taxes and stock transaction taxes. Hong Kong does not have a double tax agreement with the Philippines. For further information, Hong Kong companies are recommended to visit the Bureau of Internal Revenue website and contact them and/or a tax advisor.

TaxScopeRate
Corporate Income Tax (CIT)Domestic corporations created or organised under Philippine laws are taxed on their worldwide income. Foreign corporations are taxed on their Philippine source income.30% (standard rate)

15% (branch remittance tax)
Value added tax (VAT)

VAT is levied on the value added at each stage of the production and distribution supply chain. The amount levied depends on the type of good.

0% or 12% (standard rate is 12%)
Personal Income Tax (PIT)

Resident Philippine citizens are subject to tax on their worldwide income, whereas non-resident Philippine citizens are subject to tax on their Philippine source income.

5% to 32%
Withholding taxes on payments abroadApplied on dividends, interests and royalties payments made abroad by companies.10% to 30%

 

A Practical Guide to Doing Business in the Philippines

  1. Regulatory Environment
  2. Establishing a Presence
  3. Intellectual Property Protection
  4. Staff Recruitment
  5. Tax Considerations
  6. Import/Export Procedures
  7. Further information


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Content provided by Picture: HKTDC Research
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