Consumption/VAT/Sales Tax in the Philippines
- Nature of the Tax
- VAT (Value Added Tax)
- Standard Rate
- Reduced Tax Rate
- Zero-rate for exports and several items.
- Exclusion From Taxation
- A zero rate applies to the export of goods and services related to processing, manufacturing or repackaging goods for export (if paid in foreign currency accounted for under the rules of the Bangko Sentral ng Pilipinas—BSP, the central bank). As such, zero rating applies to sales of raw materials and services rendered by contractors and subcontractors to export firms registered with the Board of Investments (BOI).
- Method of Calculation, Declaration and Settlement
- VAT is imposed on supply of goods and services manufactured / provided in the country or imported to the Philippines. Registration is necessary for corporation turning over PHP 1.5 million. Payments are monthly.
- Other Consumption Taxes
In addition to real estate taxes, local governments impose tax on nearly all businesses operating within their jurisdictions. Rates vary but are usually a small percentage of gross annual sales. Excise taxes are levied on wines and spirits, beer, cigarettes and tobacco products, lubricating oils and grease (including similar preparations and additives), processed gas, waxes, denatured alcohol, cinematographic films, saccharine, coal and coke, cars, non-essential goods (jewellery, yachts and other pleasure vessels), mineral products, naphtha and other similar products of distillation, asphalt, and petroleum and other fuel products.
For additional information access the Ministry of Finance website.
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