Philippines Tax Overview

Philippine tax system at a glance

The Philippines taxes individuals and corporations under the National Internal Revenue Code (NIRC), administered by the Bureau of Internal Revenue (BIR). The system was reshaped by the TRAIN Law (RA 10963), the CREATE Act (RA 11534) and CREATE MORE (RA 12066).

• Standard tax year — Calendar year ending 31 December; corporations may elect a fiscal year (National Internal Revenue Code (NIRC) of 1997, as amended)
• Currency — Philippine peso (PHP) (National Internal Revenue Code (NIRC) of 1997, as amended)
• National tax authority — Bureau of Internal Revenue (BIR) (National Internal Revenue Code (NIRC) of 1997, as amended)
• Individual residence basis — Resident citizens are taxed on worldwide income; resident aliens and non-resident citizens are taxed only on Philippine-source income (National Internal Revenue Code (NIRC), Section 23)
• Corporate residence basis — Domestic corporations are taxed on worldwide income; resident and non-resident foreign corporations are taxed only on Philippine-source income (National Internal Revenue Code (NIRC), Section 23)
• Top personal income tax rate — 35% percent (graduated rates from 0% to 35%; first PHP 250,000 of taxable income is exempt) (National Internal Revenue Code (NIRC), Section 24(A), as amended by TRAIN Law (RA 10963))
• Regular corporate income tax rate — 25% (reduced to 20% for qualifying domestic MSMEs) percent (National Internal Revenue Code (NIRC), Section 27, as amended by CREATE Act (RA 11534))
• Value-added tax — Yes — VAT applies at a standard rate of 12% percent (National Internal Revenue Code (NIRC), Section 106 and Section 108)
• Annual individual income tax return deadline — On or before 15 April of the year following the taxable year (National Internal Revenue Code (NIRC), Section 51(C); BIR Form 1700/1701)
• Annual corporate income tax return deadline — On or before the 15th day of the 4th month following the close of the taxable year (15 April for calendar-year filers) (National Internal Revenue Code (NIRC), Section 52(C); BIR Form 1702-RT)