Philippines Corporate Taxation

Companies that are resident of the Philippines are taxed on worldwide income. Non-resident companies are taxed only Philippines income (branch office in the Philippines). Dividends received by Philippine Corporations or resident foreign corporations are not taxed. Capital Gains Taxes Capital Gains Taxes are usually taxed as income. The sale of shares that are not listed […]

8 thoughts on “Philippines Corporate Taxation

  1. David

    WE are a foreign company about to sell equipemt to a philipino company. We do not have a local company or any interests in the Philippines. Our quotes price is inclusive of VAT ( 12%
    ) , Are we subjected to any corporate income tax or any other “witholding tax”

    David, if you charge VAT you will have to remit it to the Bureau of Internal Revenue, on the other hand if your client is the importer you do not need to charge the VAT as the Bureau of Customs will charge the VAT to your client upon importation.

  2. Winna Lepalam

    We are a domestic corporation registered with peza doing back office/call center business and would like to sell 100% of our shares to a foreign company.

    What are the legal processes and requirements involve in doing so? Are there any taxes to be paid?

    Winna, you will need to prepare deeds of assignments for the sale of the share of the corporation. Yes, there are taxes to be paid based on an assessment done by the BIR.

  3. Joselito Dayoan

    Am planning to put up a distributorship of water dispenser/purifier in the Philippines and manufactured in the U.S.A..
    What are the tax implications?

    Joselito, like any business you will have to pay VAT, income tax and local municipal taxes.

  4. nan

    Hi , we have branch operations in cities other than the head office, are we required to fill up the tax declaration sheet for each of the branch for computaion of municipal fees-

    Nan, yes each branch must file a tax declaration in the municipality where it is situated.

  5. jed

    Is there a Limited Liability Company in the Philippines?

    Jed, the closest we have to an LLC in the Philippines is a corporation.

  6. Mary Ann Tidon

    Just want to inquire if a BPO here in the Philippines receives the inward remittances is it subject to a 12% VAT? is it considered a sale? are they required to print receipts for the inward remittances received from their mother company in Australia?

    Mary, BPO is considered export. There is no VAT on exports. Receipts are still needed. As the inward remittances are still considered revenue.

  7. Mary Joy Malinao

    Hi, if a back office is opened here in the Philippines, the inward remittance received from its parent company will be the revenue that is taxable and basis for for the income tax return?


  8. Ro Rai

    Hello, I hope you might be able to answer my VAT-related enquiry. Our UK-based company is looking to commission a Philippino company to do some design work. In the quote from the Philippino company VAT has been applied to the final total. Here in the UK we do not charge VAT on services to foreign (e.g. US-based) clients. Are the tax laws the same in the Philippines or are Philippino companies required to charge VAT to foreign clients? Many thanks for your help.

    Ro Rai, companies in the Philippines are not required to charge for export of products or services.

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