Tax & International Structuring in the Philippines

Essentials guide · Source-checked research59% of statements checked against a source11 checked against an official source19 checked against a secondary sourceChecked 2026-10-198 held back until checked against an official source9 topics include AI-written statements, not source-checkedNot yet professionally reviewed

• The standard corporate income tax rate is 25 percent, reduced to 20 percent for domestic corporations with total assets not exceeding PHP 100 million and net taxable income not exceeding PHP 5 million.

  Resident foreign corporations are taxed in the same manner as domestic corporations, on Philippine-source income.PwC Worldwide Tax Summaries · checked 2026-10-19

• VAT is levied at a standard rate of 12 percent (as at mid-2026).

  Export sales by VAT-registered persons are zero-rated; certain other supplies are zero-rated or exempt.PwC Worldwide Tax Summaries · checked 2026-10-19

• Non-resident digital service providers with no physical presence in the Philippines that supply digital services to Philippine customers must register for VAT through the BIR's Online Registration and Update System, with a reverse charge applying where the customer is VAT-registered.

  Non-resident digital service providers cannot claim creditable input tax.PwC Worldwide Tax Summaries · checked 2026-10-19

• Dividends paid to a non-resident foreign corporation are subject to 25 percent final withholding tax, reduced to 15 percent where the recipient's home country allows a deemed paid credit or does not tax the dividends, or lower under a treaty.

  PwC Worldwide Tax Summaries · checked 2026-10-19

• Profits remitted by a Philippine branch to its head office are subject to a 15 percent branch profit remittance tax.

  Applied to profits applied or earmarked for remittance, without deduction for the tax. Profits from qualified activities remitted by a PEZA-registered branch are exempt, and a lower treaty rate may apply.PwC Worldwide Tax Summaries · checked 2026-10-19

• The SEC requires an annual statutory audit of stock and non-stock corporations with total assets or total liabilities of PHP 600,000 or more, and the tax code requires an independent CPA audit of books where gross annual sales, earnings, receipts or output exceed PHP 3 million.

  PwC Worldwide Tax Summaries · checked 2026-10-19

• Republic Act 11659, effective 12 April 2022, amended the Public Service Act so that only electricity distribution and transmission, petroleum pipeline transmission, water and wastewater pipelines including sewerage, seaports and public utility vehicles are public utilities subject to the constitutional 40 percent foreign equity cap; telecommunications and most transport are no longer covered by the cap.

  The President may suspend or prohibit foreign investments on national security grounds, entities controlled by foreign governments may not own public utilities or critical infrastructure, and foreign ownership above 50 percent of critical infrastructure, including telecommunications, needs reciprocity. Sector laws and the Foreign Investment Negative List may add limits.Cruz Marcelo and Tenefrancia · checked 2026-10-19

• Land ownership is reserved to Filipino citizens and to corporations at least 60 percent Filipino-owned, so foreigners and companies more than 40 percent foreign-owned cannot own land, but they may lease land and may own condominium units within a 40 percent foreign ownership limit per condominium project.

  Republic Act 12252 (2025) amended the Investors' Lease Act to allow foreign investors with approved investment projects to lease land for up to 99 years in aggregate, replacing the earlier 50 years plus one 25-year renewal; foreigners leasing without such an investment remain limited to 25 years.Kittelson and Carpo Consulting · checked 2026-10-19

Read the full guide: Tax, accounting and reporting · Licensing, incentives and sector rules