Tax in the Philippines: VAT, income tax, company tax, capital gains
12%
Philippines charges 12% VAT on most goods and services. The rate is verified against Bureau of Internal Revenue (BIR), Philippines on 19 August 2026; the top personal income-tax rate is 35% (2026 tax year, Bureau of Internal Revenue (BIR)), and the headline company tax rate is 25% (Bureau of Internal Revenue - Revenue Regulations No. 5-2021).
VAT in Philippines
Value-added: VAT is charged on sales and reclaimed on purchases, so only the added value is taxed.
- Standard rate
- 12%
- Local name
- VAT — Value Added Tax
- Type
- VAT
- Reduced rates
- None on record
- Filing
- Monthly / Quarterly
- Authority
- Bureau of Internal Revenue (BIR), Philippines
- Current rate since
- 1 January 2000
Income tax in Philippines
The top personal income-tax band is 35% for the 2026 tax year.
Company tax in Philippines
The headline corporate income tax rate is 25%, with 20% for qualifying smaller companies. In effect since 1 July 2020.
CREATE Act (RA 11534) rates effective 1 July 2020. Minimum Corporate Income Tax 2% of gross income from 1 July 2023 (1% from July 2020 to June 2023), payable from the 4th taxable year if higher than regular tax. Resident foreign corporations 25%. CREATE MORE (RA 12066, 2024) did not change the regular rate (not read this session). | Cross-check: OECD 2026: central statutory CIT 25%, combined (central+sub-central) 25% Small-company rate 20%: Domestic corporations with net taxable income not exceeding PHP 5,000,000 AND total assets not exceeding PHP 100,000,000 (excluding land on which office, plant and equipment are situated).
Capital gains tax in Philippines
- Shares
- Listed shares sold through a local (or, for domestic corporations, foreign) stock exchange: stock transaction tax of 0.1% of gross selling price, in lieu of capital gains tax (from 1 July 2025 under CMEPA, RA 12214; previously 0.6%). Unlisted shares (domestic or foreign corporation): 15% final capital gains tax on net capital gains (NIRC s24(B)(3) as amended by CMEPA).
- Property
- 6% final capital gains tax on the presumed gain, computed on the gross selling price, zonal value (Commissioner's FMV) or assessor's FMV, whichever is highest - for real property in the Philippines classified as a capital asset (NIRC s24(B)(4) as renumbered by CMEPA, formerly s24(D))
- Holding period
- None
Ask your AI assistant about tax in Philippines
The figures on this page are callable by any MCP-compatible assistant through the free Tax MCP. Add https://taxmcp.ai2fin.com as a custom connector in Claude, ChatGPT, Cursor or your own agent — no login, no API key — then ask:
- “What is the VAT rate in the Philippines, and what is the source?”
- “Estimate income tax in the Philippines on PHP 60,000 for 2026.”
- “What is the company tax rate in the Philippines and how is it sourced?”
Connect in three steps, and what a connected answer looks like: Tax MCP.
Philippines, answered
Questions about tax in the Philippines
- What is the VAT rate in the Philippines?
- The standard VAT (Value Added Tax) rate in the Philippines is 12%, verified against Bureau of Internal Revenue (BIR), Philippines on 19 August 2026. Value-added: VAT is charged on sales and reclaimed on purchases, so only the added value is taxed.
- What is the top income tax rate in the Philippines?
- The top personal income-tax band in the Philippines is 35% for the 2026 tax year, verified against Bureau of Internal Revenue (BIR) on 6 October 2026. The free income-tax calculator on this site works through the bands below it, and shows the rate table it used.
- What is the company tax rate in the Philippines?
- The headline corporate income tax rate in the Philippines is 25%, with 20% for qualifying smaller companies, verified against Bureau of Internal Revenue - Revenue Regulations No. 5-2021 on 6 October 2026. CREATE Act (RA 11534) rates effective 1 July 2020. Minimum Corporate Income Tax 2% of gross income from 1 July 2023 (1% from July 2020 to June 2023), payable from the 4th taxable year if higher than regular tax. Resident foreign corporations 25%. CREATE MORE (RA 12066, 2024) did not change the regular rate (not read this session). | Cross-check: OECD 2026: central statutory CIT 25%, combined (central+sub-central) 25% Small-company rate 20%: Domestic corporations with net taxable income not exceeding PHP 5,000,000 AND total assets not exceeding PHP 100,000,000 (excluding land on which office, plant and equipment are situated).
- How is capital gains tax charged in the Philippines?
- In the Philippines, gains are taxed at their own rate, separate from income, verified against Bureau of Internal Revenue - RR 20-2025 digest on 6 October 2026. On shares: Listed shares sold through a local (or, for domestic corporations, foreign) stock exchange: stock transaction tax of 0.1% of gross selling price, in lieu of capital gains tax (from 1 July 2025 under CMEPA, RA 12214; previously 0.6%). Unlisted shares (domestic or foreign corporation): 15% final capital gains tax on net capital gains (NIRC s24(B)(3) as amended by CMEPA). Holding period: None
- Can an AI assistant look up tax rates for the Philippines?
- Yes. The free Tax MCP at https://taxmcp.ai2fin.com gives Claude, ChatGPT, Cursor or any MCP-compatible agent the same sourced figures as this page: the VAT rate, an income-tax estimate, the company tax rate, the capital gains rule and a side-by-side comparison with other countries, each answer citing the authority and the date it was checked. Add the endpoint as a custom connector; there is no login or API key.
Sources
- Bureau of Internal Revenue (BIR), Philippines
- Bureau of Internal Revenue (BIR)
- Bureau of Internal Revenue - Revenue Regulations No. 5-2021
- Bureau of Internal Revenue - RR 20-2025 digest
Last checked 6 October 2026. General information computed from published government rates, not tax advice. Check the linked authority or a registered adviser before relying on a figure.
See every rate side by side in the tax rates table, put the Philippines next to another country in the comparison tool, or read the tax facts.
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