Living in the Philippines: tax brackets from 0 to 35 %, 180-day threshold for non-resident foreigners, and inheritance tax at 6 %

In the Philippines, the personal income tax scale ranges from 0 % to 35 %, with 250,000 pesos exempt. A non-resident foreigner who stays more than 180 days in a calendar year is taxed at this rate on their Philippine-source income. If they stay 180 days or less, they pay 25 % on all their Philippine-source income. Inheritance and gift taxes are 6 %. This page does not define "foreign resident"; this point is not addressed here.

The scale for citizens and foreign residents

Regulation RR 8-2018, which implements the TRAIN tax reform law, establishes a progressive tax scale for individuals. The scale applicable from 2018 to 2022 was replaced, effective January 1, 2023, by the following scale, as adopted by Regulation RR 11-2018.

This page does not specify whether a foreign resident is taxed on their foreign-sourced income. This point should be verified in the Philippine Tax Code before making any decisions.

The 180-day threshold: two categories of non-resident foreigners

Regulation RR 8-2018 distinguishes between two situations for non-resident foreigners:

• Anyone who stays for more than 180 days in total during a calendar year is "engaged in a professional or commercial activity": they apply the above scale to taxable income derived from the Philippines; ;
• Anyone staying 180 days or less is "not engaged": the tax is 25 % on all income received from Philippine sources.

The 180-day threshold is used here to classify a non-resident. It does not replace the definition of a resident, which we do not provide.

Capital gains: rates indicated from 1 July 2025

Regulation RR 21-2025, dated August 5, 2025, implements Act RA 12214 on the efficiency of capital markets. The rates below are taken from the digest of this regulation published by the BIR, which indicates that they are applicable from July 1, 2025.

The same digest gives 10 % for royalties on books, other literary works, and musical compositions, and 25 % for cinematographic films and similar works owned, rented, or distributed by a non-resident. The 10 % rate on dividends was already included in Regulation RR 11-2018. Shares sold on stock exchanges are subject to a stock market transaction tax, which we will not detail here. Instruments issued before July 1, 2025, may retain their previous tax regime until their maturity, subject to the following conditions: written or electronic proof of issuance before that date, a later maturity date, an unchanged maturity, and no renewal. The rate on capital gains from real estate is not addressed here.

A taxable income of 3,000,000 pesos: a numerical example (fictitious profile)

Situation. Marc, a fictitious profile, has a taxable income from Philippine sources of 3,000,000 pesos per year (assumed amount).

Issue. He wants to compare the tax according to the progressive scale and according to the single rate of 25 % for non-residents not engaged.

Strategy. He applies the scale tranche by tranche, then the rate of 25 % to the total.

Result. According to the tax brackets, the tax is 702,500 pesos: 22,500 on the 15 % bracket, 80,000 on the 20 % bracket, 300,000 on the 25 % bracket, and 300,000 on the 30 % bracket, for an average rate of 23.4 %. At the 25 % rate, the tax is 750,000 pesos, or 47,500 more. Assumptions: taxable income is assumed to be equal to income received from Philippine sources. The calculation ignores deductions, which are not addressed here, and the category that actually applies to Marc.

Inheritance and donation: 6 %

Regulation RR 12-2018, dated March 15, 2018, applies the TRAIN law to inheritance and gift taxes.

• The estate is taxed at 6 % of the net assets of the deceased, resident or not.
• The donation is taxed at 6 % on the portion of donations in the calendar year that exceeds 250,000 pesos.
• For a deceased non-resident foreigner, the gross estate includes only assets located in the Philippines. Intangible movable property is included according to a reciprocity rule that the text links to section 104 of the Tax Code.

This page does not deal with donations made by non-resident foreigners.

Social Security: SSS and PhilHealth

According to the 2024 CLEISS fact sheet, the Social Security System (SSS) manages old-age, disability, survivors', sickness and maternity, workers' compensation, and unemployment benefits for employees. PhilHealth manages health insurance. Sickness benefits are 90% of the average daily wage, for a maximum of 120 days per calendar year. An old-age pension requires at least 60 years and 120 months of contributions. This fact sheet does not mention a bilateral agreement with France; this point should be verified with CLEISS.

The agreement with France

The BOFiP's list of tax treaties, updated as of April 29, 2026, includes a treaty dated January 9, 1976, with the Philippines, supplemented by two amendments (1995 and 2011). This treaty covers only income tax, not wealth tax, inheritance tax, or gift tax. Withholding tax rates between the two countries are detailed on our page about the France-Philippines tax treaty.

What this page does not cover

It does not define a foreign resident and does not specify whether their foreign-sourced income is taxable. It does not address visas, capital gains on real estate, rental income, or the deductions and reporting obligations of individuals. Local tax matters should be verified with a professional based in the Philippines. French tax matters, including the departure tax return and the accounts to be declared, are covered in our pages on tax residency and exit tax.

What changes depending on your situation

• The number of days spent in the Philippines during the calendar year.
• Your category: resident, non-resident engaged or non-engaged.
• The nature of your income: employment, business, dividends, interest, capital gains.
• The date of issue of your investments, before or after July 1, 2025.
• The location of your assets, for inheritance purposes.

The rule depends on your situation. No results are guaranteed.