Philippines (the): Business Environment
Philippines (the) | East Asia & Pacific | United States | Germany | |
Number of Payments of Taxes per Year | 13.0 | 23.4 | 10.6 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 171.0 | 195.1 | 175.0 | 218.0 |
Total Share of Taxes (% of Profit) | 43.1 | 33.8 | 36.6 | 48.8 |
Source: Doing Business, Latest available data.
Income Tax | Rates vary between 0% and 35% |
From PHP 0 to 250,000 | 0% |
From PHP 250,000 to 400,000 | 15% |
From PHP 400,000 to 800,000 | 20% |
From PHP 800,000 to 2 million | 25% |
From 2 million to 8 million | 30% |
Over PHP 8 million | 35% |
Fringe Benefit tax (levied on benefits furnished to managerial and supervisory-level employees) |
35% (25% for non-resident aliens not engaged in trade or business) |
Tax on business income | If an individual's gross sales/receipts and other non-operating income are below PHP 3,000,000, he/she may opt to be taxed 8% tax on gross sales/receipts and other non-operating income in excess of PHP 250,000 in lieu of the standard graduated income tax rates. Business income that is subject to progressive tax rates will also be liable for business tax, such as 12% VAT or 3% percentage tax, as applicable. |
Individuals who are aliens, regardless of their residency status, and earn solely salary or compensation income, are not permitted to claim any deductions against that income.
Several expenses are allowed as deductions from gross income for individuals engaged in business or the practice of a profession, including all ordinary and necessary expenses paid or incurred during the taxable year in connection with their activity; bad debts, losses, certain taxes, charitable contributions, etc. However, the taxpayer (except for non-resident aliens) can opt for a standard deduction not exceeding 40% of the gross business or professional income in lieu of allowable deductions. Such a decision is irrevocable for the tax year for which the return is made.
The above rates may be reduced under an applicable tax treaty.
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Latest Update: July 2024