The Philippines-Personal Income Tax

The Philippines-Personal Income Tax

 Income Tax Rate 5% - 32%
Corporate Tax Rate 30%
Sales Tax/ VAT rate 12%


Personal Income Tax
Income of residents in Philippines is taxed progressively up to 32%. Resident citizens are
taxed on all their net income derived from sources within and without the Philippines.
For nonresident, whether an individual or not of the Philippines, is taxable only on income
derived from sources within the Philippines.


Taxable Income (PhP) Tax Rate
Php 0 – 10,000               5%
Php 10,000 – 30,000     10%
Php 30,000 – 70,000     15%
Php 70,000 – 140,000   20%
Php140,000 – 250,000  25%
Php 250,000 – 500,000 30%
Php 500,000 and above 32%

 The above rates apply to individuals who derive income from business (including
capital gains from the sale transfer or exchange of shares in a foreign corporation) or
from the practice of a profession.
 Individuals holding managerial and highly technical positions employed by RHQs1
,
ROHQs2
, multinational companies and offshore business units are taxed at 15% on
their gross income.
Income in Philippines is divided into the following three categories which are taxed
separately, as summarized below.

1. Compensation employment income: This income is taxed at progressive rates on gross
income after deduction of personal and additional exemptions but without deductions for
expenses.
2. Passive income: This income, including dividends and interest, is subject to tax at 7.5%.
3. Business income and professional income: This income is taxed at progressive rates on net
business income after deduction of certain specified expenses