Philippines top income tax rate: 35%. Corporate tax: 25% (20% for micro/small corps). VAT: 12%. The Philippines offers a Digital Nomad Visa (SRVV) launched in 2024 with income requirements around $2,000/month. Popular retiree destination with English-speaking population, low corporate rates for SMEs, and the Balikbayan remittance program—though expats and residents pay tax on worldwide income, a key consideration for long-term stays.
Sources: OECD Tax Database 2024; Philippines Bureau of Internal Revenue; official government sources.
Key Tax Data at a Glance
| Tax Type | Rate | Notes | Source | Year |
|---|---|---|---|---|
| Income Tax — top rate | 35% | Above PHP 8 million annual income | OECD | 2024 |
| Income Tax — lowest rate | 0% | Below PHP 250,000 (~$4,300) | OECD | 2024 |
| Corporate Tax | 25% | 20% for micro/small corps (net income ≤PHP 5M, assets ≤PHP 100M) | OECD | 2024 |
| VAT (standard rate) | 12% | 0% on exports | OECD | 2024 |
| Capital Gains Tax | 15% / 6% | 15% on listed shares; 6% on real property | OECD | 2024 |
| Social Security (employee) | ~4.5% | SSS (Social Security System) contributions | OECD | 2024 |
| Digital Nomad Visa | Yes | SRVV (Special Resident Retiree’s Visa extended to nomads); ~$2,000/mo income requirement | Official | 2024 |
| Territorial Taxation | No | Residents taxed on worldwide income | OECD | 2024 |
Income Tax Brackets
| Annual Income | Tax Rate |
|---|---|
| PHP 0–250,000 | 0% |
| PHP 250,001–400,000 | 15% |
| PHP 400,001–800,000 | 20% |
| PHP 800,001–2,000,000 | 25% |
| PHP 2,000,001–8,000,000 | 30% |
| Above PHP 8,000,000 | 35% |
Philippine tax residents (individuals with physical presence in the country for 180+ days per year) pay tax on their worldwide income. Residents are allowed standard deductions and personal exemptions. Non-residents are only taxed on Philippine-source income.
Corporate Tax
The standard corporate income tax rate is 25%. However, the Philippines incentivizes small and medium enterprises (SMEs) with a reduced rate of 20% for corporations with net taxable income not exceeding PHP 5 million and total assets not exceeding PHP 100 million. PEZA and Board of Investments (BOI) incentives offer additional benefits for registered businesses in special economic zones.
VAT & Consumption Taxes
The standard VAT rate is 12%, applied to most goods and services. Exports are zero-rated (0%), and certain essential items like basic food and medicines may qualify for reduced treatment. Exemptions apply to government transactions and certain financial services.
Capital Gains & Investment Income
Capital gains on the sale of listed shares are taxed at 15%. Real property capital gains are taxed at 6% (based on fair market value at time of sale). Dividends from domestic corporations are generally taxed at 10% to 37.5% depending on the source and whether the dividends are paid from profits subject to corporate tax.
Social Security
Employees and self-employed individuals contribute approximately 4.5% to the Social Security System (SSS) for old-age, disability, and death benefits. Employers match contributions. Healthcare coverage through PhilHealth adds additional costs. International bilateral agreements exist with several countries regarding social security contributions for working expatriates.
Frequently Asked Questions
How much tax do expats pay in the Philippines?
Expats who become tax residents (180+ days presence in a calendar year) pay 35% top rate on worldwide income, beginning at income brackets above PHP 8 million. Non-residents pay tax only on Philippine-source income. Many expats use the SRVV visa program to establish residency with the ~$2,000/month income requirement.
Does the Philippines tax foreign income?
Yes, the Philippines taxes residents on worldwide income. Residents (180+ days physically present) must declare and pay tax on earnings from any source globally. Non-residents are taxed only on income earned within the Philippines.
Is the Philippines a tax haven?
The Philippines is not generally classified as a tax haven—it has standard OECD-aligned income tax rates and is a member of the inclusive framework on base erosion and profit shifting (BEPS). However, the low cost of living combined with the Digital Nomad Visa and competitive corporate rates for SMEs makes it attractive for digital nomads and small business owners.
What taxes do freelancers pay in the Philippines?
Freelancers and self-employed individuals are taxed progressively on net income under the same bracket structure as employees, starting at 0% below PHP 250,000. They must register with the BIR, file annual income tax returns (ITR), and pay quarterly estimated tax. Social security contributions (SSS or self-employed rate) are also required.
How does the Philippines compare to Vietnam for taxes?
Both countries have 35% top income tax rates and are popular digital nomad destinations. Vietnam’s 12% VAT matches the Philippines. The Philippines offers the English-speaking advantage and established expat communities (especially in Cebu and Manila), while Vietnam has lower cost-of-living benchmarks. Vietnam’s corporate tax is 20% (vs. Philippines 25%), making it slightly more favorable for businesses.
Explore Further
Related Tax Guides
Cost of Living
Sources: OECD Tax Database 2024; Philippines Bureau of Internal Revenue; Philippines Finance Ministry. Rates verified April 2026. Not financial advice — consult a qualified tax professional for individual situations.