Philippines: Changes to Withholding Tax Rates
Withholding tax rates on payments to Philippines residents in respect of services rendered are now:
- Gross income for year up to 3 million pesos: 5 percent
- Gross income for year over 3 million pesos (or tax individual is registered for VAT): 10 percent
- Gross income for year up to 720,000 pesos: 10 percent
- Gross income for year over 720,000 pesos: 15 percent
Applications for exemption (consisting of a certificate of residency and an “income payee’s sworn declaration of gross receipts/sales”) must have been submitted to the income payer/withholding agent by April 20, 2018. The income payer must have submitted their sworn declaration and schedule of payees who have applied for exemption by April 30, 2018.
Any tax that has been withheld in excess of the statutory amount must be refunded to the payee, with the relevant paperwork attached to the first quarterly return, which is due for submission on April 30, 2018.