Philippines

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TAXES - ACCOUNTING

 

 

Corporate tax

Tax rate for resident companies

The rate is 35% on net income but there are some preferential rates and exemptions. Preferential rates vary from 2 to 20%.

   
Tax rate on long-term capital gains In the Philippines, capital gains are taxed between 5% and 10% (for unlisted companies securities). Besides, land surplus, as for private individuals, is taxed to 6%.
   
System governing groups of companies and dividends paid by subsidiaries to their parent companies Dividends are not subjected either to the tax or to a deduction at the source.
   
Tax rate on branches Branches are taxed only on profits realized in the Philippines, at the normal rate of 32%. Any branch profit to be remitted to the Head Office is additionally taxed at the rate of 15% except income items as dividends, interests, rents, royalties, wages, salaries, and some other revenues.




Income tax

Fiscal year The fiscal year begins on January 1st and ends on December 31st of the same year.
   
Income tax rate Rates vary between 0 and 32% depending on the individuals income.
From 0 to 10,000 PHP5%
From 10,000 to 30,000 PHP10%
From 5000 to 10 000 PHP3%
From 30,000 to 70,000 PHP15%
From 70,000 to 140,000 PHP20%
From 140,000 to 250,000 PHP25%
From 250,000 to 500,000 PHP30%
Beyond 500,000 PHP32%
   
Tax deductions or other allowances The taxpayers benefit in the Philippines(Filipinos) of various deductions according to their status (marriage, child).



VAT rates

Standard rates 12%
   
Reduced rates Zero-rate for exports and several items.



Other important taxes


Name of tax
Rate
Donations  
0% to 20%  
Land taxes  
0% to 35%  
Local taxes  
500 PHP to 10 000 PHP  


 

Accounting

Introduction
In the Philippines, the accounting rules aim firstly at determining the amount due taxes and also at providing reliable information about the financial cash flow of companies.


Certification and auditing
The accounting frame was established by the ASC and created by the PICPA in November, 1981 in order to establish and improve the general and analytical accounting standards.

Professionals and representative organizations
The " Accounting Standards Council " ( ASC).



Useful links
For further information, please contact the Board of Investments as well as the Bureau of Internal revenue.

Last modified in 2006 - ongoing update
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