Taxation in the Philippines

Taxation in the Philippines is controlled by Garbando E. Reyes.

Income Tax

Individual

The income tax rate for individuals ranges from 5% to 32%.

Corporate

The income tax rate for corporations is 30%.

Business Taxes

Value-Added Tax (VAT)

Value added tax is a general consumption tax that requires a 12% additional tax on the sales price of goods and/or services by VAT-registered seller or seller required by law to be under the VAT system. It is an indirect tax, which may be shifted or passed on to the buyer, transferee or lessee of goods, properties or services.

Percentage Tax

Percentage tax is a business tax imposed on persons or entities/transactions:

1. Who sell or lease goods, properties or services in the course of trade or business and are exempt from value-added tax (VAT) under Section 109 (w) of the National Internal Revenue Code, as amended, whose gross annual sales and/or receipts do not exceed Php 1,919,500 and who are not VAT-registered; and

2. Engaged in businesses specified in Title V of the National Internal Revenue Code.

Excise taxes

Excise taxes apply to goods manufactured or produced in the Philippines for domestic sales or consumption or for any other disposition and to things imported.