Taxes in the Philippines

Business Taxes in the Philippines

TaxWhen is it paid?
a.) Income Tax – This would depend in the set-up of the business.
i. Sole Proprietorship – Graduated income tax from 20% to 35% depending on the net income.
ii. Partnerships and Corporations – Corporate Income Tax of 30% of the Net Income or Minimum Corporate Income Tax of 2% of the Gross Revenue.
b.) Value-added Tax (VAT) – 12%
*Businesses with annual gross revenue not exceeding Php 3,000,000.00 is not required to register as a VAT entity, however, they will be required to pay for Percentage Tax of 3% of the Gross Revenue.
c.) Local Government Business Taxes – This depends on the industry that the business is into. Usually it is 0.65% of the Annual Gross Revenue.January of every year
d.) Real Property Taxes – This is paid for owning a real property in the Philippines, the usual rate is 2% of the assessed value of the property.January of every year

Businesses are also required to withhold taxes on its employees salaries, this shall be remitted to the BIR on a monthly basis.

Read This :   Tax Incentive in the Philippines

Transfer Taxes in the Philippines

  1. Capital Gains Tax – 6% of the Zonal Value or the Fair Market Value of the Property, whichever is higher.
  2. Donor’s Tax – 6% of the amount of the donation.
  3. Estate Tax – 6% of the value of the estate.

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