The Philippines has one of Asia's most generous rules for foreigners. If you're not a Filipino citizen, you're only taxed on Philippine-source income, however long you live there. Your foreign pension, dividends and interest stay outside the system, with no time limit.
This guide covers Philippine personal tax for foreigners for the 2026 tax year (the calendar year): the source rule, the 180-day line, the rates, freelancing, social security and visas.
The key question isn't your day count. It's where the work behind your income is done. Work done in Manila or Cebu is Philippine-source, even if your employer and bank are abroad.
What's changed: the Capital Markets Efficiency Promotion Act (CMEPA, Republic Act 12214) took effect on 1 July 2025. Interest on bank deposits, including foreign currency deposits, is now a 20% final tax (25% for non-residents not in business), and the tax on sales of listed shares was cut to 0.1% of the sale price. The income tax scale is unchanged for 2026: the lower rates that started in 2023 still apply, with 35% above PHP 8 million. PhilHealth stays at 5%, and Pag-IBIG is PHP 200 a month each for you and your employer. A digital nomad visa was authorised by Executive Order 86 in April 2025, but as far as we can find it still isn't open to applications.
📋 Philippines tax at a glance for 2026
Topic | Details |
|---|---|
Tax system | Foreigners are taxed only on Philippine-source income. Filipino citizens living there are taxed on worldwide income |
Top income tax rate | 35% above PHP 8 million (about US$127,000). The first PHP 250,000 is tax free |
All-in on a US$100k salary | About 27% (PHP 6.3 million, single, including social security and health contributions) |
Foreign income | Not taxed for foreigners, resident or not, whether or not you bring it in |
Dividends, interest, capital gains | Foreign: not taxed. Philippine: 10% on local dividends, 20% on bank interest, 0.1% of the price on listed share sales, 15% on unlisted share gains |
Crypto gains | No specific rules. Sales on foreign exchanges are likely foreign-source |
Residence at a glance | Getting in: no fixed day test for residence; more than 180 days in a year puts you on the normal rates. Leaving: a clean break, with no exit tax |
Double tax treaties | 44 in force |
Peso figures are converted at PHP 63 to US$1. The Bangko Sentral ng Pilipinas reference rate was PHP 63.049 on 16 October 2026.
👉 Bangko Sentral ng Pilipinas: reference exchange rate bulletin
Foreign income and the source rule
Why do retirees and investors like the Philippines? Because the Tax Code says an alien individual, "whether a resident or not", is taxed only on Philippine-source income.
Image 1 — foreigners pay no tax on foreign income, however long they stay
So a foreigner living in the Philippines pays no Philippine tax on:
foreign pensions, state or private
dividends from foreign companies, unless half or more of the company's income comes from the Philippines
interest on foreign bank accounts and bonds
rent and gains on property abroad
pay for work done outside the Philippines
There's no remittance rule and no time limit: you can bring the money in, and the exemption never runs out.
The catch is the source rule for work. Pay for personal services performed in the Philippines is Philippine-source. Work remotely for a UK, US or Australian employer while living there and that salary is taxable in the Philippines, wherever you're paid.
Filipino citizens living in the Philippines are taxed on worldwide income, so former Filipinos who have reacquired citizenship should check their position.
👉 Bureau of Internal Revenue: the Tax Code (sections 23 and 42 on taxable income and source)
When you become tax resident in the Philippines
For a foreigner, residence matters less than usual, because foreign income stays untaxed either way. It decides how your Philippine income is taxed. There are three positions:
Resident alien: a foreigner whose residence is within the Philippines. The Tax Code sets no day count, so the question is whether you live in the Philippines rather than visit. You pay the normal rates on Philippine income.
Non-resident alien in business: anyone who spends more than 180 days in the Philippines in a calendar year is treated as doing business there, even without residence. You also pay the normal rates on Philippine income.
Non-resident alien not in business: 180 days or fewer and no business in the Philippines. Philippine income is taxed at a flat 25% of the gross amount, with no deductions.
Leaving is simple. Once your home and work are no longer in the Philippines, you're not resident, and there's no exit tax. Residence still matters on death, though: 6% estate tax reaches a resident foreigner's worldwide estate, but only a non-resident's Philippine assets.
👉 Bureau of Internal Revenue: the Tax Code (sections 22 and 25 on resident and non-resident aliens)
Income tax rates for 2026
Residents and foreigners in business pay the same progressive scale on Philippine income. These rates have applied since 1 January 2023 and are unchanged for 2026.
Philippines income tax rates for 2026
Taxable income | Tax |
|---|---|
Up to PHP 250,000 | 0% |
PHP 250,001 to 400,000 | 15% of the excess over PHP 250,000 |
PHP 400,001 to 800,000 | PHP 22,500 plus 20% of the excess over PHP 400,000 |
PHP 800,001 to 2,000,000 | PHP 102,500 plus 25% of the excess over PHP 800,000 |
PHP 2,000,001 to 8,000,000 | PHP 402,500 plus 30% of the excess over PHP 2,000,000 |
Over PHP 8,000,000 | PHP 2,202,500 plus 35% of the excess over PHP 8,000,000 |
Source: Tax Code section 24(A)(2), as amended by Republic Act 10963 (TRAIN), schedule effective 1 January 2023 onwards.
Your own social security, PhilHealth and Pag-IBIG contributions are tax free, and so are 13th month pay and other bonuses up to PHP 90,000 a year.
Worked example
You're single and employed by a Philippine company in 2026 on PHP 6.3 million (about US$100k).
Your employee contributions are PHP 53,400: PHP 21,000 social security, PHP 30,000 PhilHealth and PHP 2,400 Pag-IBIG. They're deducted before tax.
Your taxable income is PHP 6,246,600. Tax is PHP 402,500 plus 30% of PHP 4,246,600, which is PHP 1,676,480.
Your all-in bill is about PHP 1.73 million, or 27% of your salary. If PHP 90,000 of it is 13th month pay or bonus, the bill falls by PHP 27,000. Working for a foreign employer with no Philippine presence, you'd usually pay income tax alone, also about 27%.
👉 Bureau of Internal Revenue: Revenue Regulations 11-2018 on the tax tables and tax-free contributions
Freelancing in the Philippines
Freelance fees for work done in the Philippines are Philippine-source, even if every client is abroad. You register with the BIR and pay on the scale above, with two useful options.
The 8% option: if your gross receipts don't exceed the PHP 3 million VAT threshold (about US$47,600), you can pay 8% on receipts above PHP 250,000 instead of the scale and the 3% percentage tax. On PHP 2.5 million, that's PHP 180,000, or 7.2%.
The optional standard deduction: above that, you can deduct a flat 40% of receipts instead of your actual costs. It's open to residents and citizens, but not to non-resident aliens.
On US$100k (PHP 6.3 million) of fees, the 40% deduction leaves PHP 3.78 million taxable and tax of PHP 936,500. Add social security of PHP 63,000, PhilHealth of PHP 60,000 and Pag-IBIG of PHP 4,800, and the total is about 17%. Without the deduction it's about 29%.
Above PHP 3 million you must also register for 12% VAT, which isn't counted in our figures.
Crypto, investments and pensions
How is crypto taxed in the Philippines? There's no specific BIR guidance on crypto for individuals, so the general rules apply.
For a foreigner, the first question is source. Under the Tax Code's source rules, a gain on personal property is generally treated as arising where it's sold, so a sale on an exchange abroad has a good case for being foreign-source and untaxed. Without a BIR ruling, that isn't certain.
If a gain were treated as Philippine-source and the crypto is a capital asset, only 50% of the gain on something held for more than 12 months counts, taxed at the normal rates.
Philippine investments have had their own final taxes since CMEPA took effect on 1 July 2025:
Interest on bank deposits, including foreign currency deposits: 20%, or 25% for non-residents not in business (whose foreign currency deposit interest is exempt).
Dividends from Philippine companies: 10% for resident foreigners, 20% for non-residents in business and 25% for other non-residents.
Listed shares sold on the stock exchange: 0.1% of the sale price, instead of tax on the gain.
Unlisted shares: 15% of the net gain.
Foreign pensions are foreign-source, so a resident foreigner pays no Philippine tax on them. The Philippine Retirement Authority also lists tax exemption on pensions and annuities as an SRRV benefit.
There's no wealth tax. Estate tax is 6% of the net estate after a PHP 5 million standard deduction and a deduction for the family home of up to PHP 10 million. For a foreigner resident at death it covers the worldwide estate, with a credit for estate tax paid abroad. A non-resident foreigner is taxed only on Philippine assets, with a PHP 500,000 deduction.
👉 Bureau of Internal Revenue: Revenue Regulations 21-2025 on passive income rates from 1 July 2025
👉 Bureau of Internal Revenue: Revenue Regulations 20-2025 on the 0.1% stock transaction tax
👉 Bureau of Internal Revenue: the Tax Code (sections 84 to 86 on estate tax)
Social security
Employees of employers doing business in the Philippines pay into three schemes. The Social Security Act makes coverage compulsory for all employees and doesn't exclude foreigners.
Social Security System (SSS): 15% of your monthly salary credit, which runs from PHP 5,000 to PHP 35,000. You pay 5% and your employer pays 10%, so your share tops out at PHP 1,750 a month. Self-employed people pay the full 15%, up to PHP 5,250 a month.
PhilHealth: 5% of basic monthly salary between PHP 10,000 and PHP 100,000, shared with your employer. That's PHP 500 to PHP 5,000 a month in total. PhilHealth's published table sets this for 2024 to 2025, and we found no change announced for 2026.
Pag-IBIG: a housing savings fund. Since February 2024 you and your employer each pay PHP 200 a month, and self-employed members pay PHP 400. You get the savings back with dividends.
Because the caps are low, contributions add less than 1% to a US$100k salary. If your employer doesn't do business in the Philippines, these schemes don't usually apply. SSS coverage is also compulsory for self-employed professionals.
👉 Social Security System: contribution table from January 2025
👉 Social Security System: Social Security Act of 2018 (coverage and contribution schedule)
👉 PhilHealth: premium contribution table (5% for 2024 to 2025)
👉 Pag-IBIG Fund: regular savings and the PHP 200 monthly contribution (partly in Filipino)
Double tax treaties
Does the Philippines have double tax treaties? Yes. The BIR lists 44 treaty partners, including the United Kingdom, the United States, Australia, Japan, Singapore, Germany, Canada, the UAE, France and the Netherlands. Germany and Thailand have newer replacement treaties, and Brunei is the newest partner, effective from 1 January 2025.
As foreign income isn't taxed for foreigners anyway, the treaties matter most for Philippine dividends and interest paid abroad, and for short work trips.
👉 Bureau of Internal Revenue: Philippine double taxation agreements
Visas: the nomad visa and the practical routes
Executive Order 86, signed on 24 April 2025, authorised the Department of Foreign Affairs to issue a digital nomad visa to foreigners working remotely for employers or clients abroad. Applicants must be 18 or over, show proof of remote work and enough income earned outside the Philippines, hold health insurance and come from a country that offers a nomad visa to Filipinos. It would last up to a year, renewable.
Guidelines were due within 30 days, but as of October 2026 we couldn't find published rules, an income threshold or an application route on government sites. Check with the Department of Foreign Affairs before relying on it.
In practice, most remote workers use visitor extensions. Visa-free nationals get 30 days on arrival, can extend by 29 days with a visa waiver and then by one, two or six months at a time, up to 36 months in total (24 months for nationals who need a visa). After 59 days you also need an ACR I-Card.
For over-40s, the Special Resident Retiree's Visa (SRRV) is a long-term route. The Classic option needs a deposit of US$15,000 to US$50,000, depending on your age and whether you have a pension of at least US$800 a month (US$1,000 with dependants).
👉 Official Gazette: Executive Order 86 authorising the digital nomad visa
👉 Presidential Communications Office: the nomad visa requirements in Executive Order 86
👉 Bureau of Immigration: visitor visa extensions and maximum stay
👉 Philippine Retirement Authority: the SRRV options and benefits
Who is the Philippines good for?
How does the Philippines compare for different kinds of mover? Ratings are relative to the 150+ countries TaxPilot covers, based on 2026 rules and the all-in cost including social security and health contributions.
☑️ Who is the Philippines good for? Tax ratings for expats in 2026
Expat profile | Philippines rating | Why |
|---|---|---|
Employees | Moderate | About 27% all-in on a US$100k salary (PHP 6.3 million) for work done in the Philippines. Contributions are capped and add under 1%. There's no special regime for incoming employees. |
Freelancers (self-employed) | Good | About 17% all-in on US$100k of fees using the optional 40% standard deduction, including your own contributions. Without it, about 29%. Below PHP 3 million of receipts, the 8% option is cheaper still. |
Retirees | Good | No income tax on our US$40k foreign pension plus US$20k of foreign investment income. It misses Excellent because 6% estate tax reaches a resident foreigner's worldwide estate. |
Crypto gains | Good | There's no specific crypto guidance. A sale on an exchange abroad has a good case for being foreign-source and untaxed. If it were treated as Philippine-source, half of a gain held over 12 months is taxed: about 12% on US$100k. |
Investment income | Excellent | Dividends, interest and gains on a foreign portfolio aren't taxed for foreigners. Philippine investments pay 10% on dividends, 20% on bank interest and 0.1% of the price on listed share sales. There's no wealth tax. |
Digital nomad visa | Moderate | A nomad visa was authorised in April 2025, but we found no published guidelines or application route. Visa-free visitors can extend up to 36 months, and over-40s can use the SRRV. |
Filing and deadlines
Resident foreigners with Philippine-source income, and non-resident foreigners doing business in the Philippines, must file a return. Non-residents not in business are usually taxed by final withholding instead. The 2026 return is due by 15 April 2027:
BIR Form 1700 if you only have employment income, for example from a foreign employer that doesn't withhold Philippine tax.
BIR Form 1701 if you're self-employed or have mixed income.
Quarterly returns (Form 1701Q) for the self-employed, by 15 May, 15 August and 15 November.
If your only income is a salary from one Philippine employer that withholds correctly, you usually don't file yourself. Leave foreign income off the return.
👉 Bureau of Internal Revenue: income tax returns, forms and deadlines
Frequently asked questions
Do foreigners pay tax on foreign income in the Philippines?
No. A foreigner, resident or not, is taxed only on Philippine-source income. Foreign pensions, dividends, interest and gains aren't taxed, even if you bring the money in. Filipino citizens living there are taxed on worldwide income.
Is remote work for a foreign employer taxed in the Philippines?
Yes, if you do the work while you're in the Philippines. Pay for services performed there is Philippine-source, wherever the employer is and wherever you're paid. A treaty may exempt a short trip if you stay resident at home.
What are the income tax rates in the Philippines in 2026?
The first PHP 250,000 is tax free. Income is then taxed at 15%, 20%, 25% and 30% in bands, with 35% on income above PHP 8 million. Self-employed people with receipts up to PHP 3 million can choose a flat 8% on receipts above PHP 250,000.
Does the Philippines have a digital nomad visa?
Executive Order 86 authorised one in April 2025, but as of October 2026 we found no published guidelines or application route. Most remote workers extend a visitor stay instead, which can run to 36 months for visa-free nationals.
How is a foreign pension taxed in the Philippines?
It's foreign-source, so a foreigner living in the Philippines pays no income tax on it. There's no wealth tax, but 6% estate tax applies to the worldwide estate of a foreigner resident at death, after a PHP 5 million deduction.
How many double tax treaties does the Philippines have?
The Bureau of Internal Revenue lists 44 treaty partners, including the UK, the United States, Australia, Japan, Singapore, Germany, Canada and the UAE.
Where to go next
👉 Best countries for investors
👉 Best countries for entrepreneurs
Important information
This article is general information and does not constitute tax, legal, immigration or financial advice, and does not create a client relationship. Tax outcomes depend on travel history, income sources, treaty status and the law applying to the relevant year. Rates, thresholds and regimes change, and some measures described may be proposed rather than enacted; this article reflects our understanding as at the date of publication. Obtain advice from a suitably qualified professional before acting or refraining from action.
