Philippines Tax
System
A Taxation presentation for ILA315
by:
Jariyaporn Seenay
58-51024-25552
TABLE OF CONTENTS
•
Who pays taxes
•
Who are exempted to pay
•
Tax rates
•
Tax forms & Procedures
•
Personal Income Tax
•
Tax exempt income
WHO PAYS TAXES
Resident citizens receiving income from sources within or outside
the Philippines:
• Employees deriving purely compensation income from 2 or more
employers, concurrently or successively at anytime during the taxable
year
• Self-employed individuals receiving income from the conduct of trade
or business and/or practice of profession
• Individuals deriving mixed income – Compensation income and
income from the conduct of trade or business and/or practice of
profession
WHO PAYS TAXES
•
Marginal Income Earners
•
Non-resident citizens receiving income from sources within the
Philippines
•
Aliens, whether resident or not, receiving income from sources within
the Philippines
WHO ARE EXEMPTED TO PAY
•
A citizen of the Philippines who leaves the Philippines during the taxable
year to reside abroad, either as an immigrant or for employment on a
permanent basis
•
A citizen of the Philippines who works and derives income from abroad
and whose employment requires him to be physically present abroad
most of the time during the taxable year / OFWs
•
A citizen who has been previously considered as a non-resident citizen
and who arrives in the Philippines at any time during the year to reside
permanently in the Philippines will likewise be treated as a non-resident
citizen during the taxable year in which he arrives in the Philippines,
with respect to his income derived from sources abroad until the date of
his arrival in the Philippines.
TAX RATES
•
Income Tax Rate
5% - 32%
•
Corporate Tax Rate
30%
•
Sales Tax/ VAT rate
12%
TAX FORMS & PROCEDURES
•
BIR Form Nos. 1700 / 1701 / 1701Q / 1702 / 1702Q
•
1700: Annual Income Tax Return for Individuals Earning Purely Compensation
Income (Including Non-Business/Non-Profession Income)
•
1701: Annual Income Tax Return for Self-Employed Individuals, Estates and Trusts
•
1702: Annual Income Tax Return for Corporations, Partnerships and Other NonIndividual Taxpayers
*Q = Quarterly
PERSONAL INCOME TAX
•
Residents are taxed progressively
•
Up to 32%
•
The Philippine Annual Income Tax Return (BIR Form 1700) is filed and
taxes are due to the Philippine Bureau of Internal Revenue on or before
15 April of the year following the applicable calendar year.
•
The tax year is a calendar year which ends 31 December of each year.
PERSONAL INCOME TAX
TAX EXEMPT INCOME
•
Statutory minimum wage
•
Damages received by an employee or his/her heirs following a judgment or
agreement arising out of or related to an employer-employee relationship
•
Proceeds of life insurance policies
•
Gifts, bequests
•
Compensation for injuries or sickness
•
Retirement benefits, pensions, and gratuities
•
Interest on tax-exempt government securities
•
Thirteenth-month pay and other benefits such as productivity incentives and
Christmas bonus subject to the PHP30,000 limit
THANK YOU FOR YOUR
ATTENTION