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Philippines: Choose A Topic

The document discusses changes to individual tax rates and rules in the Philippines under the Tax Reform for Acceleration and Inclusion (TRAIN) law passed in 2017. Some key changes include increased individual tax rates up to 35%, changes to self-employed individual tax rates, and increases to capital gains, fringe benefits, and other taxes.

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Rhozeiah Leiah
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62 views2 pages

Philippines: Choose A Topic

The document discusses changes to individual tax rates and rules in the Philippines under the Tax Reform for Acceleration and Inclusion (TRAIN) law passed in 2017. Some key changes include increased individual tax rates up to 35%, changes to self-employed individual tax rates, and increases to capital gains, fringe benefits, and other taxes.

Uploaded by

Rhozeiah Leiah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Worldwide Tax Summaries

Philippines
Individual - Significant developments

Choose a topic

Tax Reform for Acceleration and Inclusion (TRAIN)


On 19 December 2017, the President of the Republic of the Philippines signed into law the first package of the
TRAIN bill. The law took effect on 1 January 2018.

Below are some of the significant changes to the individual tax system under the TRAIN:

Old Law TRAIN

Graduated rates of 5% to 32% Graduated rates of 0% to 35%

Individual tax rates


(where 32% applies to annual taxable income of (where 35% applies to annual taxable income of
500,000 Philippine pesos [PHP]). PHP 8,000,000).

If gross sales/receipts and other non-operating


income does not exceed PHP 3,000,000, the SEP
has the option to be taxed as follows:

At 8% based on gross receipts in excess


of PHP 250,000 in lieu of graduated tax
rates and percentage tax.

Self-employed and Professionals (SEPs) Graduated rates of 5% to 32%. At graduated rates. If gross
sales/receipts and other non-operating
income exceed PHP 3,000,000, the SEP
shall automatically be subject to the
graduated rates.

If subject to the graduated rates, the SEP shall also


be subject to applicable business tax.

Capital gains tax on shares not listed in the stock 5% on the first PHP 100,000.
15%.
exchange 10% in excess thereof.

Preferential tax treatment given to alien individuals


and qualified Filipinos employed by the following
employers:

Regional or area headquarters (RHQ) and


15% final withholding tax (WHT) on gross
regional operating headquarters (ROHQ) Graduated tax rates of 0% to 35%.
compensation income.
of multinational companies.
Offshore banking units (OBU).
Petroleum service contractors and
subcontractors.

On exemption of 13th month pay, bonus, and other


PHP 82,000 exempt limit. Increased to PHP 90,000.
benefits exemption

Fringe benefits tax (FBT) rate 32%. 35%.

PHP 50,000 basic personal exemption.


PHP 25,000 additional exemption per
Personal and additional exemptions Repealed.
qualified dependent child not exceeding
four.

An individual whose gross income does not


An individual whose taxable income does not
exceed one's total personal and additional
Individual filing exceed PHP 250,000 is not required to file an
exemptions for dependants are not required to file
income tax return.
an income tax return.

Sale of shares listed in the stock exchange Stock transaction tax of 0.50%. Increased to 0.60%.

Interest income from expanded foreign currency


Final tax of 7.5%. Increased to 15%.
deposit system

First quarter return for SEPs is 15 April. First quarter return for SEPs is 15 May.
Tax filing deadlines

Second instalment filing is 15 July. Second instalment filing is 15 October.

Last Reviewed - 19 December 2018

Individual - Taxes on personal


Corporate - Other issues
income

Philippines contacts

Fedna Parallag
Partner
+63 2 845 2728

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