Planning a trip to the Philippines? Before you pack your bags and book your flight, it is essential to understand which among the available Philippine visas suits your purpose and what tax regulations you’ll need to follow.
Whether you’re planning a short-term or long-term stay, here’s what you need to know about visa and tax regulations for foreigners in the Philippines.
Types of Visas Available for Foreigners in the Philippines
Short-Term Visas in the Philippines
If you are planning to stay in short-term in the Philippines, here are the available visa options for you:
- Temporary Visitor Visa (9A) is for foreign tourists or travelers in the country. The required stay duration depends on their home country.
- Pre-arranged Employment Visa (9G) is issued to foreign employees in the Philippines, allowing them to stay in the country based on their employment contract.
- Philippine Economic Zone Authority (PEZA 47) is issued to foreign nationals employed in PEZA-registered companies.
Long-Term Visas in the Philippines
If you are planning to stay in long-term in the Philippines, here are the available visa options for you:
- Spouse Visa (13A) is issued to foreign nationals legally married to Filipino citizens, and their child/children below twenty-one (21) years old, granting them a permanent residence in the country.
- Chinese National Spouse Visa (MCL-07-210) is offered to Chinese nationals married to Filipino citizens, and their unmarried child/children aged under twenty-one (21).
- Temporary Resident Visa (TRV) is given to foreign nationals married to a Filipino citizen, but whose country doesn’t have a reciprocity agreement with the Philippines. This allows them to stay in the country for five (5) years and renewable for another five (5) years.
- Non-Quota Immigrant (13G) is given to natural-born Filipinos returning to the country after acquiring a different citizenship.
- Special Resident Retiree’s Visa (SRRV) is issued to former Filipino citizens and foreign nationals aged fifty (50) years old and above who wish to spend their retirement in the Philippines.
- Special Investor’s Resident Visa (SIRV) grants foreign investors to live in the country as long as their investment requirements are maintained.
- Special Visa Employment Generation (SVEG) is given to foreign nationals employed in at least ten (10) lawful and sustainable business, trade, or industry in the Philippines.
- APECO Special Permanent Residency Visa (ASRV) allows members of the Aurora Special Economic Zone (APECO) to establish permanent residence in the Philippines.
Types of Taxable Income for Foreigners in the Philippines
The Bureau of Internal Revenue (BIR) taxes different types of income depending on your residency status:
- Employment Income are the salaries, wages, and other compensation you earned from your employment in the Philippines.
- Business and Self-employed Income are the income you earned from your business registered in the Philippines.
- Passive Income includes interest, dividends, royalties, and rental income.
- Capital Gains are the profits you’ve received from selling real estate, stocks, or other assets.
- Foreign-sourced Income requires resident foreigners to report their worldwide income, while non-resident foreigners are only taxed on Philippine-sourced income.
Tax Rates for Foreigners in the Philippines
Tax rates depend on the residency status of a foreigner in the Philippines.
Progressive Tax for Resident Foreigners in the Philippines
Under the progressive tax rate system, the following applied to the resident foreigners in the Philippines:
- Income up to PHP 250,000 is exempt from tax
- Income between PHP 250,001 and PHP 400,000, a 15% tax is applied on the amount exceeding PHP 250,000
- Income ranging from PHP 400,001 to PHP 800,000 is taxed PHP 22,500 plus 20% of the excess over PHP 400,000
- Income amount of PHP 800,001 and PHP 2,000,000, the tax is PHP 102,500 plus 25% of the excess over PHP 800,000
- Income from PHP 2,000,001 to PHP 8,000,000 is taxed at PHP 402,500 plus 30% of the excess over PHP 2,000,000
- Income over PHP 8,000,000 is taxed at PHP 2,202,500 plus 35% of the excess
Flat Tax for Non-Resident Foreigners in the Philippines
The earned Philippine-sourced income of non-resident foreigners in the Philippines are taxed at a flat rate of 25%.
Where to Pay Taxes in the Philippines
You may pay your taxes in the Philippines at Authorized Agent Banks (AABs) accredited by the Bureau of Internal Revenue (BIR) or through online payment systems, such as GCash, PayMaya, and bank transfers. Installment payments are also available under specific conditions, allowing you to manage your obligations more efficiently by spreading your payments over time.
Tax Filing Requirements for Foreigners in the Philippines
Below are the requirements for tax filing:
- BIR Form 1700, for employed individuals
- BIR Form 1701, for self-employed or business owners
- Certificate of Compensation Payment or BIR Form 2316 from employers
- Financial records for business and passive income
Process of Tax Filing for Foreigners in the Philippines
You may file your taxes in the Philippines through a manual process, Electronic Filing and Payment System (eFPS) process, or eBIRForms.
Manual Tax Filing Process
- Secure the BIR Form. Obtain the BIR Form 1700 if you are an employee and BIR Form 1701 if you are self-employed.
- Fill Out the Form. Fill out the form with your personal information, income, deductions, and tax computation. Ensure that all details are correct and complete.
- Attach the Documents. Attach supporting documents, including your Certificate of Compensation Payment (BIR Form 2316) if you are employed and your financial records if you are self-employed.
- Submit the Requirements. Submit the completed form along with the supporting documents to the nearest BIR Revenue District Office (RDO) or an Authorized Agent Bank (AAB).
- Pay the Tax Due. Settle your tax due at the bank. Note to keep a copy of your validated payment receipt for your records.
Electronic Filing and Payment System (eFPS) Process
- Register an eFPS Account. Visit the official website of Bureau of Interval Revenue (BIR) and register for an Electronic Filing and Payment or eFPS account.
- Log In Your eFPS Account. Log in to the eFPS portal using your registered account and choose the appropriate tax form.
- Fill Out the Form. Fill out the form and validate the tax computation. Ensure that all given information is accurate.
- Submit the Form. Once all required fields are complete, submit the form through the system.
- Pay the Tax Due. Settle your tax payment through the designated online banking or e-payment channels.
- Get a Confirmation Receipt. Save a copy of your confirmation receipt. This serves as your proof of submission and payment.
Tax Filing through eBIRForms
- Download the eBIRForm Software. Visit the official website of the Bureau of Interval Revenue and click on the eServices tab to download the eBIRForm software.
- Fill Out the Form. Once the eBIRForm software has been successfully downloaded, choose the appropriate tax form and fill out the required information.
- Print a Copy of Form. Validate and generate the form, then print a copy of it for submission.
- Submit the Form. Submit the form through the eBIRForms portal.
- Pay the Tax Due. Settle your tax due through online banking, GCash, PayMaya, or any of the accredited payment centers.
- Secure a Confirmation Receipt. Keep a copy of the payment confirmation for your records.
Foreign users of electronic filing platforms must verify their eligibility as some systems, such as the Electronic Filing and Payment System (eFPS), require prior enrollment with the Bureau of Interval Revenue (BIR). To make tax compliance easier, mobile-based platforms, such as GCash and PayMaya, offer a more convenient way to pay taxes.
Deadline of Tax Filing for Foreigners in the Philippines
To file your taxes, you must register with the Bureau of Internal Revenue (BIR) and obtain a Taxpayer Identification Number (TIN). The annual income tax return is usually due on April 15 each year.
Tax Deductions and Exemptions for Foreigners in the Philippines
Foreign nationals may qualify for deductions that reduce their taxable income in the Philippines. They can choose between the Optional Standard Deduction (OSD) or itemized deduction.
The OSD allows self-employed individuals and business owners to deduct 40% of their gross income as expenses without the need to itemize deductions. While, itemized deductions include specific expenses such as rental costs, business-related expenses, and professional fees.
In addition, foreign citizens from countries that have tax treaties with the Philippines may benefit from tax credits, which offset taxes paid in their home country. This helps prevent double taxation.
Need further information and assistance regarding Philippine Visa and Tax Regulations for Foreigners? Talk to our team at Duran & Duran-Schulze Law to know more about the requirements and process. Call us today at (+632) 8478 5826 or +63 917 194 0482, or send an email to info@duranschulze.com for more information.
