Philippines - Special considerations for short-term assignments

Special considerations for short-term assignments

Taxation of international executives

Related content

Residency rules

Payroll considerations

Taxable income

Additional considerations

For the purposes of this publication, a short-term assignment is defined as an assignment that lasts for less than one year.

Residency rules

Are there special residency considerations for short-term assignments?

None.

Payroll considerations

Are there special payroll considerations for short-term assignments?

None.

Taxable income

What income will be taxed during short-term assignments?

Technically, all compensation income received relative to short-term assignment in the Philippines is taxable in the country.

Additional considerations

Are there any additional considerations that should be considered before initiating a short-term assignment in the Philippines?

Arrival date

Where there is a tax treaty between the home country and the Philippines, and the employee spends less than 90 days or 183 days (depending on the tax treaty wording) in the Philippines in a given tax year, the criteria for tax exemption may be met and such that the income attributable to the Philippines will not be taxed.

Condition

Treaty article conditions on exemption from tax must be satisfied and a tax treaty relief application process should be complied with.

Non-resident tax rates

For expatriates who are residents of non-treaty countries or treaty countries who does not satisfy conditions of treaty, and who stay in the Philippines for not more than 180 days in the calendar year concerned, the tax rate is 25 percent of gross income.

Exclusions of income from taxation based on source of income compensation

Income may be excluded from taxation if it is attributable to services performed in countries other than the Philippines. 

© 2016 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.

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