Business Taxes in the Philippines
|Tax||When 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
- Capital Gains Tax – 6% of the Zonal Value or the Fair Market Value of the Property, whichever is higher.
- Donor’s Tax – 6% of the amount of the donation.
- Estate Tax – 6% of the value of the estate.