BIR Income Tax Brackets in the Philippines for 2024

The tax laws in the Philippines cover: 

• national taxes - taxes imposed and collected by the national government 
• local taxes - taxes imposed and collected by the local government

Tax laws include the National Internal Revenue Code of 1997 (also known as the Tax Code), Revenue Issuances and any rulings issued by the official tax body in the Philippines, the Bureau of Internal Revenue (BIR). 

The Tax Code provides guidance and support to taxpayers in the form of income tax tables for individuals and businesses. Taxpayers must familiarize themselves with these tax tables and the corresponding income tax brackets and income tax rates, for effective tax planning and to remain compliant with the Philippines tax laws.

Here you will learn about:

• headline tax rates
• personal income tax (PIT) rates 
• corporate income tax (CIT) rates 
• capital gains tax (CGT) rates
• withholding tax rates for residents and non-residents
• value-added tax (VAT) rates

Headline Tax Rates in the Philippines

Personal Income Tax (PIT) Rates for Individuals in the Philippines 2024

The personal income tax rate for a individual, resident or not, depends on the nature of the individual’s income:

• compensation income
• income subject to final tax
• gross sales/receipts and other non-operating income not exceeding the VAT threshold

Compensation Tax Rates for Resident and Non-Resident Individuals

Tax Rates for Income Subject to Final Tax

Any resident or non-resident individual who engages in trade or business in the Philippines, will be subject to a final tax. This is usually passive investment income.

Tax Rates on Gross Sales / Receipts and other Non-Operating Income not Exceeding the VAT Threshold

An individual, whether citizen or resident, who is self-employed or practises a profession is also subject to income tax. 

However, an individual who has gross sales/receipts or other non-operating income that does not exceed the value-added tax (VAT) threshold, may choose how to be taxed:

• taxed at 8% on gross sales/receipts and other non-operating income in excess of PHP 250,000 or
• the graduated tax rates

Personal Income Tax Due Dates

Under the Republic Act No. 11976 (Ease of Payment Taxes or EOPT Act), the Commissioner of Internal Revenue (CIR) may require the filing of a tax return through any authorized agent bank, revenue district office, and authorized tax software provider of the Bureau of Internal Revenue (BIR).

Corporate Income Tax (CIT) Rates in the Philippines 2024

Corporate income tax rates vary for domestic corporations, resident foreign corporations and non-resident foreign corporations.

Corporate Income Tax Rates for Domestic Corporations

Corporate Income Tax Rates for Resident Foreign Corporations

Corporate Income Tax Rates for Non-Resident Foreign Corporations

Corporate Income Tax Due Dates

Capital Gains Tax in the Philippines

Individuals

Non-resident aliens are taxed on Philippines-sourced capital gains and rates vary between 0.6% to 15%. Any capital losses suffered may be deducted from the capital gains. Non-resident aliens are also taxed on Philippines-sourced investment income such as interest, dividends and royalties. 

Resident aliens, however, are taxed on Philippines-sourced income at graduated rates.

Corporations

A capital asset is any property held by a taxpayer other than

• inventory or property held primarily for sale to customers
• real property used in trade or business
• property that would be included in the taxpayer’s inventory 

Any capital gains resulting from a sale of a capital asset as above shall be taxed at 6%. Capital losses may be deducted to the extent of the capital gains. 

However, any capital gains from the sale of bonds, debentures or other certificates of indebtedness with a maturity of over five years are exempt from tax. Otherwise, the usual 15% capital gains tax applies.

Withholding Tax Rates for Residents and Non-Residents in the Philippines

In general, a corporation or individual engaged in business must withhold the appropriate amount of tax on any income payment to non-residents, generally set at 25%. 

However, the Philippines is a signatory to certain double taxation treaties (DTTs). Therefore, for countries with which the Philippines has DTTs in place, the maximum rates of tax may vary. 

Value Added Tax Rates in the Philippines