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Philippines - Other taxes and levies

Philippines - Other taxes and levies

Taxation of international executives

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Social security levies

Are there social security/social insurance taxes1 in the Philippines? If so, what are the rates for employers and employees?

The Social Security System (SSS) is compulsory to all employees aged 60 or less and their employers. Self-employed persons may choose to be covered on a voluntary basis. Contributions to the SSS are made both by employees, by deduction from their salaries, and by employers, who are responsible for remitting the contributions. Membership with the SSS gives automatic membership with the Employees’ Compensation Program.

The maximum monthly contributions for each employee under each program are as follows:

Employer and employee

Type of insurance Paid by employer Paid by employee Total
Social security 1,178.70 581.30 1,760
Employees' compensation 30 0 30
Total contribution 1,208.70 581.30 1,790

Services performed in the employ of a foreign government or international organization or their wholly owned agencies/subsidiaries/branches are exempted from the social security levies.

 

Home Development Mutual Fund (HDMF) contribution

The maximum member contribution and employer counterpart per month is PHP 100 each.

PhilHealth contribution

The maximum member contribution and employer counterpart per month is PHP 550 each.

Type of insurance Paid by employer Paid by employee Total
Social security 1,178.70 581.30 1,760
Employees' compensation 30 0 30
Total contribution 1,208.70 581.30 1,790

Services performed in the employ of a foreign government or international organization or their wholly owned agencies/subsidiaries/branches are exempted from the social security levies.

Type of insurance Paid by employer Paid by employee Total
Social security 1,178.70 581.30 1,760
Employees' compensation 30 0 30
Total contribution 1,208.70 581.30 1,790

Services performed in the employ of a foreign government or international organization or their wholly owned agencies/subsidiaries/branches are exempted from the social security levies.

Type of insurance Paid by employer Paid by employee Total
Social security 1,178.70 581.30 1,760
Employees' compensation 30 0 30
Total contribution 1,208.70 581.30 1,790

Services performed in the employ of a foreign government or international organization or their wholly owned agencies/subsidiaries/branches are exempted from the social security levies.

Type of insurance Paid by employer Paid by employee Total
Social security 1,178.70 581.30 1,760
Employees' compensation 30 0 30
Total contribution 1,208.70 581.30 1,790

Services performed in the employ of a foreign government or international organization or their wholly owned agencies/subsidiaries/branches are exempted from the social security levies.

Type of insurance Paid by employer Paid by employee Total
Social security 1,178.70 581.30 1,760
Employees' compensation 30 0 30
Total contribution 1,208.70 581.30 1,790

Services performed in the employ of a foreign government or international organization or their wholly owned agencies/subsidiaries/branches are exempted from the social security levies.

Type of insurance Paid by employer Paid by employee Total
Social security 1,178.70 581.30 1,760
Employees' compensation 30 0 30
Total contribution 1,208.70 581.30 1,790

Services performed in the employ of a foreign government or international organization or their wholly owned agencies/subsidiaries/branches are exempted from the social security levies.

Type of insurance Paid by employer Paid by employee Total
Social security 1,178.70 581.30 1,760
Employees' compensation 30 0 30
Total contribution 1,208.70 581.30 1,790

Services performed in the employ of a foreign government or international organization or their wholly owned agencies/subsidiaries/branches are exempted from the social security levies.

Type of insurance Paid by employer Paid by employee Total
Social security 1,178.70 581.30 1,760
Employees' compensation 30 0 30
Total contribution 1,208.70 581.30 1,790

Services performed in the employ of a foreign government or international organization or their wholly owned agencies/subsidiaries/branches are exempted from the social security levies.

Gift, wealth, estate, and/or inheritance tax

Are there any gift, wealth, estate, and/or inheritance taxes2 in the Philippines?

Estate taxes are imposed on transmission of property by resident and non-resident decedents based on the value of the net estate transferred. Estates with a net value of P5 million and below will be exempted from paying the estate tax. Family homes that are valued at P10 million or less will also be exempted from estate tax. Taxable net estate is subject to a flat rate of six percent.

For decedents who are citizens or residents, gross estate includes real property and tangible personal property located in the Philippines or abroad and intangible property wherever situated. For non-resident alien decedents, gross estate includes real property and tangible personal property located in the Philippines and intangible property located in the Philippines, subject in the latter case, to exemption under the principle of reciprocity.

The donor’s tax is intended to tax transfers of property by gift and includes transfer of real or personal property as well as tangible or intangible property. A flat rate of six percent is imposed on total gifts in excess of PHP 250,000 regardless of relationship to the donor.

Real estate tax

Are there real estate taxes in the Philippines?

Yes. The primary responsibility for the proper, efficient, and effective administration of real property tax, subject to the rules and regulations governing the classification, appraisal and assessment of real property issued by the Department of Finance (DOF), is borne by the provinces and cities, including municipalities within Metro Manila.

Sales/VAT tax

Are there sales and/or value-added taxes in the Philippines?

The VAT is levied, assessed and collected on every sale, barter or exchange of goods or properties at the rate of 12 percent of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged such tax to be paid by the seller or transferor.

Unemployment tax

Are there unemployment taxes in the Philippines?

None

Other taxes

Are there additional taxes in the Philippines that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.

Local taxes

There are no local taxes imposed on income of individuals in the Philippines. However, certain individuals are required to pay a basic community tax of PHP5 plus an annual additional tax not exceeding PHP5,000, computed at PHP1 for every PHP1,000 of income.

Foreign Financial Assets

Is there a requirement to declare/report offshore assets (e.g., foreign financial accounts, securities) to the country’s fiscal or banking authorities?

None, in general.

© 2018 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.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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