With over 7,000 islands to explore, friendly English-speaking locals, tropical weather, and a low cost of living, it’s no surprise that the Philippines continues to attract expats, retirees, and digital nomads from around the globe.
In this guide, we’ll walk you through everything you need to know about relocating to Philippines from a personal tax perspective, including tax residency, income tax, special tax regimes and tax return obligations.
TaxPilot recommend that you organize your affairs in good time to get ahead and make the most of favorable tax treatment while making sure you’re meeting your tax return obligations.
Philippines follows a residence taxation model. If you are resident, you will pay tax worldwide incomes. If you are non-resident, you will pay tax on local incomes only.
if you are present in Philippines on more than 180 days during the tax year.
Providing that you are not a Filipino citizen, foreign incomes and gains will be exempt from taxation in Philippines. Philippines can be a very tax efficient place to live for expats and nomads and as such, Global Tax Consulting recommends seeking personalized tax planning advice to take advantage of the special tax regime.
Exempt from Philippines taxation.
Applied indefinitely.
Tax on property and share sales
Tax on value of owned assets
Tax on assets passed to heirs
Tax to contribute to state welfare
If you receive incomes overseas while you are living in Philippines, you may find the source country, as a starting point, continues to tax the income which may cause double taxation unless you are using special tax regime.
Double taxation agreements can be used to mitigate double taxation and receive tax free income. As such, the more double taxation agreements a country has, the better, as agreements will ensure you’re not taxed twice and even better, ensure your income is tax free.
At present, Philippines has 44 double taxation agreements signed.
