Different Types of Taxes in the Philippines

What are the Types of Taxes?

1. NATIONAL TAXES

• Capital gains tax – Tax on profits from selling an asset (property, jewelry, stocks, etc.) in the Philippines
• Documentary stamp tax (DST) – Tax on documents, loan contracts, and papers that serve as proof of sale or transfer of ownership of a property
• Donor’s tax – Tax on a gift or donation, in which both the sender and recipient are living when the gift is given
• Estate tax – Tax paid by the legal heir before the estate[3] from a deceased person is transferred to their name
• Excise tax – Tax on the production, sale, or consumption of goods in the Philippines
• Income tax – Tax on a person’s or business’ income or profit
• Percentage tax – A business tax imposed on non-VAT-registered individuals or corporations that sell or lease goods and services with gross annual sales or receipts not exceeding PHP 3 million
• Value-added tax (VAT) – A sales tax on consumption imposed on the sale, lease, or importation of goods, properties, and services in the Philippines, which may be passed on to the consumer
• Withholding tax – Tax withheld from an individual’s income to promote tax compliance and prevent tax evasion

2. LOCAL TAXES

• Basic real property tax – Tax on the value of real properties such as houses, lands, buildings, etc.
• Business of printing and publication tax – Tax imposed on businesses that involve printing and publication
• Franchise tax – Tax imposed on a franchise business
• Sand, gravel and other quarry resources tax – Tax on the fair market value of ordinary stones, sand, gravel, earth, and other quarry resources extracted from public lands or public waters within the province
• Professional tax – Tax imposed on professionals such as lawyers, doctors, and engineers
• Amusement tax – Tax imposed on cinemas, theaters, concert halls, circuses, and other amusement venues
• Annual fixed tax for delivery trucks and vans – PHP 500 fee for every truck or van used to deliver soft drinks, liquors, or cigarettes within the province
• Local business tax – Tax imposed by municipalities on different types of businesses within their jurisdiction
• Barangay tax – Tax imposed on stores or retailers with annual gross sales of up to PHP 50,000 in cities or up to PHP 30,000 in municipalities
• Community tax – Tax imposed on individuals and corporations within a city’s or municipality’s jurisdiction

3. SPECIAL TAXES

• Motor Vehicle User’s Charge (MVUC) – An annual fee charged on every application for vehicle registration
• Travel tax – An airport fee imposed on Filipino citizens, foreign residents, and non-resident foreigners (who have stayed in the country for more than a year) who are leaving the Philippines
• Head tax – Tax imposed on foreigners staying in the Philippines for at least 60 days, with permanent residency status in the country, and applying for Re-entry Permit and paid to the immigration officer when entering the country
• Charges on forest products – Tax on the privilege of exploiting the forest resources in the Philippines
• Energy consumption tax – Tax on electric power consumption over 650 kWh of each residential customer

TAXPAYER CLASSIFICATION IN THE PHILIPPINES

• Filipino citizens living in the Philippines and earning income from sources within and outside the country
• OFWs, Filipino immigrants, and other nonresident citizens with income from sources within the Philippines
• Resident and nonresident foreigners earning income from sources within the Philippines
• Domestic corporations earning income from sources within and outside the Philippines
• Foreign corporations with income from sources within the Philippines