Philippines Income Tax Rates

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Philippines Income Tax Rates
Income of residents in Philippines is taxed progressively up to 32%.
Income Tax Rate 32%
Corporate Tax Rate 30%
Sales Tax / VAT Rate 12%
Taxable Income Tax Rate
PhP 0 - PhP 10,000: - 5%
PhP 10,000 - PhP 30,000: PhP 500 10%
PhP 30,000 - PhP 70,000: PhP 2,500 15%
PhP 70,000 - PhP 140,000: PhP 8,500 20%
PhP 140,000 - PhP 250,000: PhP 22,500 25%
PhP 250,000 - PhP 500,000: PhP 50,000 30%
Over PhP 500,000: PhP 125,000
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Minimum wage earners (MWEs) are exempt from the payment of income tax on their taxable income. Holiday pay, overtime pay, night shift differential pay and hazard pay received by such MWEs also is exempt. However, an employee who receives/earns additional compensation, such as commissions, honoraria, fringe benefits, benefits in excess of the non-taxable ceiling of PHP 30,000 taxable allowances and taxable income other than the exempt remuneration mentioned above do not qualify as an MWE and, therefore, his/her entire earnings are not exempt from income tax. In lieu of itemized deductions, an individual may elect to use the optional standard deduction (OSD), which may not exceed 40% of the total gross income, in computing taxable income for the taxable quarter/year. However, once an election is made to use the OSD, it is irrevocable for the taxable year for which the return is made.

Capital gains – An individual is subject to capital gains tax on the sale of real property at a rate of 6% of the gross sales price or current fair market value, whichever is higher. An individual is also subject to capital gains tax on the sale of shares not traded on the stock exchange at a rate of 5% of the net gain not exceeding PHP 100,000, and 10% on the excess.
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