Asia-Pacific · Tax guide

Philippines

The Philippines taxes corporations at 25%, or 20% for small corporations, with a 2% minimum tax on gross income from the fourth year. VAT is 12% above ₱3,000,000 of sales; smaller businesses pay percentage tax instead. Taxes are administered by the Bureau of Internal Revenue (BIR).

Updated 1 October 2026 · 10 of 10 figures checked against official sources

Check your obligations

At a glance

Corporate income tax: 25%
Minimum corporate income tax: 2%
VAT: 12%
Percentage tax: 3%
Optional tax for the self-employed: 8%
Withholding on royalties abroad: 25%

Income tax

Corporations pay 25%; small corporations pay 20%. From the fourth year of operations, a minimum corporate income tax of 2% of gross income applies if it is higher. Quarterly returns are filed within 60 days of each quarter and the annual return by 15 April.

Self-employed individuals pay graduated rates, or can opt for 8% of gross sales while their sales stay within the VAT threshold.

VAT or percentage tax

Businesses with gross sales or receipts above ₱3,000,000 in twelve months register for VAT and charge 12%, filing quarterly. Below that they pay percentage tax of 3% on gross sales instead. Foreign digital service providers selling to Philippine consumers now charge VAT too.

E-invoicing

Large taxpayers, exporters and e-commerce businesses must send e-invoices and e-receipts to the BIR's Electronic Invoicing System, with other businesses to follow.

Withholding tax

Corporations withhold expanded withholding tax on payments to suppliers and professionals and file monthly remittances and an annual alphalist. Payments to non-resident foreign corporations carry final withholding:

Royalties and service fees: 25%.
Dividends: 25%.
Interest on foreign loans: 20%.
Treaty rates can be applied directly with the recipient's certificate of residence.

Key dates

MonthlyWithholding tax remittances
Within 25 days after each quarterQuarterly VAT or percentage tax return
15 AprilAnnual income tax return

Figures and sources

10 figures

Corporate income tax rate25%

National Internal Revenue Code (as amended by CREATE) · Sec. 27(A)
Checked against the official source
Rate for small corporations (net taxable income up to ₱5 million and assets up to ₱100 million, excluding land)20%

National Internal Revenue Code (as amended by CREATE) · Sec. 27(A)
Checked against the official source
Minimum corporate income tax on gross income (from the fourth year of operations)2%

National Internal Revenue Code · Sec. 27(E)
Checked against the official source
VAT rate12%

National Internal Revenue Code · Sec. 106
Checked against the official source
Annual gross sales or receipts above which VAT registration is required₱3,000,000

National Internal Revenue Code · Sec. 109(1)(CC)
Checked against the official source
Percentage tax for non-VAT businesses3%

National Internal Revenue Code · Sec. 116
Checked against the official source
Optional tax on gross sales for self-employed individuals8%

National Internal Revenue Code (as amended by TRAIN) · Sec. 24(A)(2)(b)
Checked against the official source
Final withholding on royalties and service fees paid to non-resident foreign corporations25%

National Internal Revenue Code · Sec. 28(B)
Checked against the official source
Final withholding on dividends paid to non-resident foreign corporations (15% with tax sparing)25%

National Internal Revenue Code · Sec. 28(B)(5)(b)
Checked against the official source
Final withholding on interest on foreign loans20%

National Internal Revenue Code · Sec. 28(B)(5)(a)
Checked against the official source

Indicative only. This assessment is a high-level overview of tax obligations in Philippines based on the information you provided and rules in force for 2026. It is not tax or legal advice. Consult a qualified tax adviser in Philippines (a Philippine CPA or tax lawyer) before making compliance decisions.