🇵🇭 Corporate Tax in Philippines

Domestic Stock Corporation (Corporation)

A Philippine domestic corporation pays corporate income tax at 25% on net taxable income (worldwide income for domestic corporations). Domestic SMEs with net taxable income not exceeding PHP 5 million and total assets not exceeding PHP 100 million (excluding land) pay 20% CIT under the CREATE Act (2021). PEZA-registered enterprises enjoy income tax holidays (ITH) of 4–7 years, after which they pay a special 5% tax on gross income earned (GIE) in lieu of all national and local taxes. VAT is 12% on most goods and services. Minimum Corporate Income Tax (MCIT) of 1% of gross income applies from the fourth year of operations when MCIT exceeds regular CIT. Dividends paid to non-resident foreign shareholders are subject to 25% final withholding tax, reduced under double tax treaties. The Philippines applies a fringe benefit tax of 35% (based on the grossed-up monetary value) on non-cash benefits provided to managerial and supervisory employees.