Accounting Rules

Tax Year: The fiscal year begins on 1 January and ends on 31 December of the same year.
Accounting Standards: PAS (Philippine Accounting Standards)
Accounting Regulation Bodies: Board of Accountancy
Accounting Reports: The general balance sheet and/or the declaration written under oath of the non holding of an annual meeting, and the financial statements.
Publication Requirements: Companies must publish an annual financial report and submit it to the Securities and Exchange Commission (SEC).
Professional Accountancy Bodies: PICPA , Philippine Institute of Certified Public Accountants
Certification and Auditing: The accounting framework was established by the Accounting Standards Council (ASC), created by the PICPA in November 1981, in order to establish and improve the general and analytical accounting standards.
The Institute of Internal Auditors – Philippines is the primary association of internal auditors in the Philippines.
Accounting News: Accounting Times
Accountants Journal

Tax Rates

Consumption Taxes

Nature of the Tax: VAT (Value Added Tax)
Tax Rate: 12%
Reduced Tax Rate: Zero-rate for exports and several items.
Other Consumption Taxes: In addition to real estate taxes, local governments impose tax on nearly all businesses operating within their jurisdictions. Rates vary but are usually a small percentage of gross annual sales. Excise taxes are levied on wines and spirits, beer, cigarettes and tobacco products, lubricating oils and grease (including similar preparations and additives), processed gas, waxes, denatured alcohol, cinematographic films, saccharine, coal and coke, cars, non-essential goods (jewellery, yachts and other pleasure vessels), mineral products, naphtha and other similar products of distillation, asphalt, and petroleum and other fuel products.
For additional information access the Ministry of Finance website.

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Corporate Taxes

Company Tax: The rate is 30% on net income but there are some preferential rates and exemptions. Preferential rates vary from 2 to 20%. Regional headquarters are taxed at 10%.
Tax Rate For Foreign Companies: VAT is applied in the same way to residents and non residents. For additional information, consult the Bureau of Internal Revenue.
Capital Gains Taxation: In the Philippines, capital gains are taxed between 5% and 10% (for unlisted companies securities). Besides, capital gains on property, as for private individuals, is taxed at 6%.
Main Allowable Deductions and Tax Credit: The Omnibus Investment Code of 1987 and the Special Economic Zone Act of 1995 provide for fiscal incentives such as a suspension of income tax. For any additional information access the PKF Tax guide on the Philippines.
Other Corporate Taxes: Tax of 3 to 7% on companies in certain sectors (banking, insurance, finance, transport). Various duties apply at various rates depending on the type of document.

Individual Taxes

Tax Rate

Income Tax	Rates vary between 0 and 32% (higher rate for revenues over PHP 500 000) according to the income of natural persons.
From PHP 0 to 10,000	5%
From PHP 10,000 to 30,000	10%
From PHP 30,000 to 70,000	15%
From PHP 70,000 to 140,000	20%
From PHP 140,000 to 250,000	25%
From PHP 250,000 to 500,000	30%
Over PHP 500,000	32%
Tax on capital income	6% (real estate); 5% up to 100 000 PHP then 10% (earnings from shares not exchanged on the Stock Exchange); 1% of the sale price (earnings from shares exchanged on the Stock Exchange).
Property Tax	Varies according to the location, less than 3%
Tax on inheritance and property	Between 5 and 20%
Social contributions	Vary from 33.30 to 500 PHP, according to the salary

Allowable Deductions and Tax Credit: Taxpayers benefit in the Philippines from various deductions according to their status (marriage, child).
Since 2011, Taxpayers benefit from an income tax credit of 5% for their contributions to a Retirement Account.
Special Expatriate Tax Regime: There is no special tax regime for expatriates. Non resident foreigners not involved in business are taxed at a preferential rate of 25% of their Philippine income.

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed: Bureau of Internal Revenue
Withholding Taxes: Dividends: 15-30%, Interest: 20%, Royalties: 20-30%

Sources of Fiscal Information

Tax Authorities: Bureau of Internal Revenue
Bureau of Customs
Other Domestic Resources: Philippine Information Agency

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Intellectual Property

National Organizations: The organisation responsible for the protection of intellectual property in the Philippines is the Intellectual Property Office of the Philippines.
Regional Organizations: Harmonization within the ASEAN and the APEC
International Membership: Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)

National Regulation and International Agreements

Type of property and law	Validity	International Agreements Signed
Patent Rules and Regulations on Inventions	20 years	Patent Cooperation Treaty (PCT)
Trademark Law on Trademarks, Service Marks and Trade Names	10 years, renewable every 10 years
Copyright	During the lifetime of the author and 50 years after his death	Berne convention For the Protection of Literary and Artistic Works Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations WIPO Copyright Treaty WIPO Performances and Phonograms Treaty
Industrial Models	5 years, renewable twice

Legal Framework

Independence of Justice: The judiciary in the Philippines, though generally independent, is hampered by corruption and inefficiency.
Equal Treatment of Nationals and Foreigners: To a large extent, foreign nationals can expect an impartial trial from the country’s judicial system.
The Language of Justice: The Philippines have two judicial languages: Filipino and English.
Sources of the Law and Legal Similarities: The main source of the law is the constitution of 1987. The country’s legal system is based on Spanish and Anglo-American law. The Philippines accept compulsory ICJ jurisdiction though with reservations.
Checking National Laws Online: Philippine Laws and Jurisprudence Databank

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Standards

National Standards Organizations: Bureau of Product Standards
Integration in the International Standards Network: The Philippines are members of the International Organization for Standardization (ISO), the International Electrotechnical Commission (IEC), the Asia Pacific Economic Cooperation (APEC), the ASEAN Consultative Committee on Standards and Quality (ACCSQ).
Classification of Standards: PNS (Philippine National Standard) is the mark of the national standard.
Online Consultation of Standards: A list can be consulted on the Philippines National Standards Catalog on the Bureau of Product Standards website.
Certification Organizations

Business Practices

General Information: Guide to doing business
Canada's International Contracting Agency
Foreign Affairs and International Trade Canada
Opening Hours and Days: Banks: from 9 am to 5 pm.
Public Administrations: from 8 am to 5 pm Monday to Friday.
Shops: 10 am to 7 pm Monday to Sunday.

Public Holidays

New Year	January 1st
EDSA Revolution Day	February 22
Day of Valor	April 9
Labor Day	May 1
Independence Day	June 12
National Heroes' Day	August
Bonifacio Day	November 30
Christmas Day	December 25
Rizal Day	December 30

Holiday Compensation: If a public holiday falls on a Wednesday, it is celebrated on the Monday. If it falls on a Sunday, it is celebrated on the following Monday.

Periods When Companies Usually Close

Semana Santa	A week during the Holy Week period
Christmas	A few days

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Philippines: Business Environment