Latest Tax Guide for Expats in the Philippines

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Immigrants are classified as residents or non-residents for tax purposes. Non-residents are further classified as persons engaged in trade or business, not engaged in trade or business, or employed by regional headquarters of multinationals, including service contractors in banking and oil operations extraterritorial.

Residents are immigrants who do not have a set date to leave the company and may not intend to leave the country in the long term. If you live in the country for more than a hundred eighty days in a calendar year, you are considered a resident alien and are subject to higher tax rates than those who live less than 180 days.

The tax rate in the Philippines depends on the type of resident (or non-resident) considered by the Internal Revenue Office (BIR). Income tax rates in the Philippines are progressive and capped at thirty-two percent for those who are considered to be involved in business activities in the Philippines (or permanent residents). If you are considered a non-resident, you will only file income tax returns on Philippine income.

The Philippines is one of the most popular destinations for low-cost labor outsourcing and one of the most popular destinations for American immigrants in Asia. It is important to be aware of your tax requirements in the Philippines and how this affects your foreign tax filing in the United States.

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