Philippines

Overview

Last reviewed - 30 June 2020

The Philippines is strategically located off the southeastern coast of mainland Asia, with a flying time of four hours or less to most major Asian countries. Its strategic location allowed it to bridge Eastern and Western cultures, producing a rich history of Asian, European, and American influences. The Philippines has been counted as the third-largest English-speaking country in the world. The capital of the Philippines is Manila, and the currency is the Philippine peso (PHP).

The Philippines adheres to the principles of a democratic republican state with a presidential form of government. For 2019, the country’s ten priority investment areas include manufacturing, agriculture, fishery, and forestry; strategic activities; healthcare services; mass housing; infrastructure and logistics; research and development; inclusive business models; environment and climate change-related projects; and energy. The government continues to give tax incentives to investors that do business in the Philippines in these priority areas. 100% foreign ownership remains permissible in many areas of investment, although certain industries are subject to foreign ownership limitation.

The Philippine gross domestic product (GDP) grew at an annual average of 6.2% in 2018. Construction, trade and repair of motor vehicles, motorcycles, personal and household goods, and other services were the main drivers of this growth. Industry had the fastest growth (6.9%), followed by services (6.3%), and agriculture (1.7%).

PwC in the Philippines (Isla Lipana & Co.) supports clients with the local knowledge and skills of its people and with access to a broad range of other professionals across the PwC global network of firms. Isla Lipana & Co. has provided professional services in the Philippines for more than 95 years. It currently has 32 partners and principals, and more than 1,000 people who are committed to delivering quality in assurance, tax, and advisory services through its main office in Makati City and branch offices in Cebu and Iloilo City.

Quick rates and dates

Corporate income tax (CIT) rates
Headline CIT rate (%)

30

Corporate income tax (CIT) due dates
CIT return due date

Quarterly return: Within 60 days from the close of each of the first three quarters. Annual return: On or before the 15th day of the fourth month following the close of the taxable year.

CIT final payment due date

On the 15th day of the fourth month following the close of the taxable year.

CIT estimated payment due dates

Quarterly instalments paid within 60 days after each quarter.

Personal income tax (PIT) rates
Headline PIT rate (%)

35

Personal income tax (PIT) due dates
PIT return due date

15 April

PIT final payment due date

15 April

PIT estimated payment due dates

For employees, the Philippines follows the PAYE system, which is carried out by the local employer through the WHT mechanism. Under this system, it is the responsibility of the employer (local company) to withhold and remit taxes on the compensation of its employees on a monthly basis. Further, our tax regulations require an annualisation of income and WHTs to be performed at year end (December).

Value-added tax (VAT) rates
Standard VAT rate (%)

12

Withholding tax (WHT) rates
WHT rates (%) (Div/Int/Roy)

Resident: 0 / 10, 15, or 20 / 20;

Non-resident: 15 or 30 / 20 / 30

Capital gains tax (CGT) rates
Corporate capital gains tax rate (%)

See the Philippines corporate tax summary for capital gain rates.

Individual capital gains tax rate (%)

See the Philippines individual tax summary for capital gain rates.

Net wealth/worth tax rates
Headline net wealth/worth tax rate (%)

NA

Inheritance and gift tax rates
Inheritance tax rate (%)

There is no inheritance tax in the Philippines. However, an estate tax of 6% is imposed on the assets of the decedent taxpayer.

Gift tax rate (%)

6

NA stands for Not Applicable (i.e. the territory does not have the indicated tax or requirement)

NP stands for Not Provided (i.e. the information is not currently provided in this chart)

All information in this chart is up to date as of the 'Last reviewed' date on the corresponding territory Overview page. This chart has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this chart, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.