Taxes and Accounting in the Philippines
- Tax Year
- The fiscal year begins on 1 January and ends on 31 December of the same year.
- Accounting Standards
- PAS (Philippine Accounting Standards)
- Accounting Regulation Bodies
Board of Accountancy
- Accounting Reports
- The general balance sheet and/or the declaration written under oath of the non holding of an annual meeting, and the financial statements.
- Publication Requirements
- Companies must publish an annual financial report and submit it to the Securities and Exchange Commission (SEC).
- Professional Accountancy Bodies
PICPA , Philippine Institute of Certified Public Accountants
- Certification and Auditing
- The accounting framework was established by the Accounting Standards Council (ASC), created by the PICPA in November 1981, in order to establish and improve the general and analytical accounting standards.
The Institute of Internal Auditors – Philippines is the primary association of internal auditors in the Philippines.
- Accounting News
- Nature of the Tax
- VAT (Value Added Tax)
- Tax Rate
- Reduced Tax Rate
- Zero-rate for exports and several items.
- 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.
- Company Tax
- The rate is 30% on net income but there are some preferential rates and exemptions. Preferential rates vary from 2 to 20%. Regional headquarters are taxed at 10%.
- Tax Rate For Foreign Companies
- VAT is applied in the same way to residents and non residents. For additional information, consult the Bureau of Internal Revenue.
- Capital Gains Taxation
- In the Philippines, capital gains are taxed between 5% and 10% (for unlisted companies securities). Besides, capital gains on property, as for private individuals, is taxed at 6%.
- Main Allowable Deductions and Tax Credit
- The Omnibus Investment Code of 1987 and the Special Economic Zone Act of 1995 provide for fiscal incentives such as a suspension of income tax. For any additional information access the PKF Tax guide on the Philippines.
- Other Corporate Taxes
- Tax of 3 to 7% on companies in certain sectors (banking, insurance, finance, transport). Various duties apply at various rates depending on the type of document.
|Income Tax||Rates vary between 0 and 32% (higher rate for revenues over PHP 500 000) according to the income of natural persons.|
|From PHP 0 to 10,000||5%|
|From PHP 10,000 to 30,000||10%|
|From PHP 30,000 to 70,000||15%|
|From PHP 70,000 to 140,000||20%|
|From PHP 140,000 to 250,000||25%|
|From PHP 250,000 to 500,000||30%|
|Over PHP 500,000||32%|
|Tax on capital income||6% (real estate); 5% up to 100 000 PHP then 10% (earnings from shares not exchanged on the Stock Exchange); 1% of the sale price (earnings from shares exchanged on the Stock Exchange).|
|Property Tax||Varies according to the location, less than 3%|
|Tax on inheritance and property||Between 5 and 20%|
|Social contributions||Vary from 33.30 to 500 PHP, according to the salary|
- Allowable Deductions and Tax Credit
- Taxpayers benefit in the Philippines from various deductions according to their status (marriage, child).
- Special Expatriate Tax Regime
- There is no special tax regime for expatriates. Non resident foreigners not involved in business are taxed at a preferential rate of 25% of their Philippine income.
Double Taxation Treaties
- Countries With Whom a Double Taxation Treaty Have Been Signed
Bureau of Internal Revenue
- Withholding Taxes
- Dividends: 15-30%, Interest: 20%, Royalties: 20-30%
- National Organizations
- The organisation responsible for the protection of intellectual property in the Philippines is the Intellectual Property Office of the Philippines.
- Regional Organizations
- Harmonization within the ASEAN and the APEC
- International Membership
Member of the
WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
National Regulation and International Agreements
|Type of property and law||Validity||International Agreements Signed|
Rules and Regulations on Inventions
|20 years|| Patent Cooperation Treaty (PCT)
Law on Trademarks, Service Marks and Trade Names
|10 years, renewable every 10 years|| Nice agreement
||During the lifetime of the author and 50 years after his death|| Berne convention
Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms
Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations
WIPO Copyright Treaty
WIPO Performances and Phonograms Treaty
||5 years, renewable twice|
- Independence of Justice
- The judiciary in the Philippines, though generally independent, is hampered by corruption and inefficiency.
- Equal Treatment of Nationals and Foreigners
- To a large extent, foreign nationals can expect an impartial trial from the country’s judicial system.
- The Language of Justice
- The Philippines have two judicial languages: Filipino and English.
- Sources of the Law and Legal Similarities
- The main source of the law is the constitution of 1987. The country’s legal system is based on Spanish and Anglo-American law. The Philippines accept compulsory ICJ jurisdiction though with reservations.
- Checking National Laws Online
Philippine Laws and Jurisprudence Databank
- National Standards Organizations
Bureau of Product Standards
- Integration in the International Standards Network
- The Philippines are members of the International Organization for Standardization (ISO), the International Electrotechnical Commission (IEC), the Asia Pacific Economic Cooperation (APEC), the ASEAN Consultative Committee on Standards and Quality (ACCSQ).
- Classification of Standards
- PNS (Philippine National Standard) is the mark of the national standard.
- Online Consultation of Standards
- A list can be consulted on the Philippines National Standards Catalog on the Bureau of Product Standards website.
- Certification Organizations
- General Information
Guide to doing business
Canada's International Contracting Agency
Foreign Affairs and International Trade Canada
- Opening Hours and Days
- Banks: from 9 am to 5 pm.
Public Administrations: from 8 am to 5 pm Monday to Friday.
Shops: 10 am to 7 pm Monday to Sunday.
|New Year||January 1st|
|EDSA Revolution Day||February 22|
|Day of Valor||April 9|
|Labor Day||May 1|
|Independence Day||June 12|
|National Heroes' Day||August|
|Bonifacio Day||November 30|
|Christmas Day||December 25|
|Rizal Day||December 30|
- Holiday Compensation
- If a public holiday falls on a Wednesday, it is celebrated on the Monday. If it falls on a Sunday, it is celebrated on the following Monday.
Periods When Companies Usually Close
|Semana Santa||A week during the Holy Week period|
|Christmas||A few days|
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GTP - Global Training Partners Singapore on 25 Feb 2014 related to Taxes and Accounting in the Philippines