The main taxes are: enterprise income tax, personal income tax, value-added tax, consumption tax and customs duties.
Main taxes and tax rates
Income tax domestic companies pay taxes on the basis of all net income in the Philippines and abroad; The net income earned in the Philippines by resident foreign companies (more than 180 days) is taxed; Non-resident foreign companies pay taxes on their gross income in the Philippines. Current corporate income tax; It is 35% of the tax payable. In June 2009, the starting tax rate of 65438+ 10/was reduced to 30%. If the taxable income of the company is zero or negative, or the minimum enterprise income tax exceeds its ordinary enterprise income tax, it can be levied at 2% of the minimum enterprise income tax from the fourth year of the company's establishment. Chartered educational institutions and non-profit hospitals are levied at 10% of taxable income.
Residents, non-resident residents, permanent foreigners and non-resident foreigners engaged in business and trade in the Philippines are subject to individual income tax at an excessive progressive rate of 5% to 32%. Foreigners who are not engaged in business and trade in the Philippines are taxed at the rate of 25% (such as interest and investment income).
According to Amendment 9337, the VAT rate was increased from 1 in February 2006 to 12%. Some transactions are exempt from VAT. The transactions exempted from VAT mainly include: agricultural products, aquatic products, seeds, seedlings, fry, feed, educational services provided by certified private educational institutions, services provided by individuals, sales of agricultural cooperatives registered with the Cooperative Development Bureau to their members, imported machinery and equipment directly used for agricultural inputs, including spare parts, and sales, import or lease of cabins, cargo holds and aircraft, including engines, equipment and spare parts.
Consumption tax Consumption tax is mainly levied on specific commodities (such as cigarettes, alcohol, motor vehicles, etc.). ) manufactured in the Philippines for domestic sales or consumption and other purposes. Consumption tax also applies to some imported goods that need to pay value-added tax and customs duties.
Individuals and entities exempted from value-added tax, such as those engaged in domestic and international passenger transportation or entertainment industry, will be subject to proportional tax (business tax) according to their total income.
Stamp Duty The scope of stamp duty includes documents, contracts, securities and loan agreements, as well as certificates of acceptance, signing and sale of transfer responsibilities, rights or assets. The object of collection is the producer, signatory, receiver or transferor.
Local Taxes The Local Government Law stipulates that local governments have the right to tax certain special acts or commercial acts within their jurisdiction, except those exempted by law. Local governments also have the right to levy taxes on real estate every year, such as the renovation of land, buildings and machinery, as well as the sale, donation, barter or any other form of transfer of real estate. But local governments have no right to collect income tax, customs duties, stamp duty, property tax and gift tax.
◆ Tariff policy
Customs regulations: The main law of import and export tariffs in the Philippines is the Philippine Tariff and Customs Act. The import tariff rate is determined and published by the Philippine Customs Committee, and the export tariff rate is determined by the General Administration of Customs and collected by the customs through the central bank authorized by the Philippines. The Philippines imposes ad valorem taxes on most imported products, but imposes specific taxes on alcoholic beverages, fireworks, tobacco products, watches, fossil fuels, cartoons, saccharin, poker and other products. According to the provisions of the tax law, the customs imposes import consumption tax on non-essential goods such as automobiles, tobacco, gasoline and alcohol. Imported products are also subject to 12% value-added tax to the Philippine customs authorities, and the tax calculation is based on customs valuation plus customs duties and consumption tax. The Philippines also imposes stamp duty on imported goods, which is generally used for bills of lading, receipts, bills of exchange, other transaction orders, insurance policies, mortgage contracts, power of attorney and other documents.
Import tariff: The Philippine Customs and Tariff Law classifies taxable imported goods as 2 1, and the import tariff rate is generally 3% ~ 30%.
. Such as live animals and their products, fresh vegetables, etc.
The Philippines will realize zero tariff on all products of ASEAN members in 20 10.
Export tariffs: The Philippines imposes tariffs on the following export commodities, with a tariff rate of)%. Log, wood, veneer and plywood, metal ore and its concentrate, gold, slag cement and Portland cement; Marine fuel oil, petroleum asphalt, silver, unprocessed Manila hemp (a fiber-producing plant produced in the Philippines), bananas, coconuts and coconut products, pineapples and their finished products, sugar and sugar products, tobacco, shrimp and prawns.
Export Tax Refund: According to the Philippine Customs and Tariff Law, no more than 99% of the collected tariffs can be refunded for the ship propeller fuel oil used in foreign trade and coastal trade. When products (including packaging, labels, etc. Where the products produced or manufactured with imported raw materials are exported, the tariffs levied on imported raw materials shall be refunded or given tax credits; The Ministry of Finance may, on the recommendation of the General Administration of Customs, issue laws and regulations allowing partial tax refund for commodities specified in this Law. The tax refund will be paid by the General Administration of Customs within 60 days after receiving a set of correct and complete documents.
◆ Preferential investment tax policies
(1) Exemption from income tax: newly registered priority project enterprises are exempted from income tax for 6 years, while traditional enterprises are exempted from income tax for 4 years. The tax exemption period for expansion and upgrading projects is 3 years, and if the project is located in underdeveloped areas, the tax exemption period is 6 years.
Newly registered enterprises that meet one of the following conditions can also enjoy an additional 1 year tax-free reward:
(a) raw materials produced locally account for more than 50% of the total raw materials;
② The ratio of the value of imported and locally produced fixed equipment to workers shall not exceed $654.38+$00,000 per person;
(3) Its annual foreign exchange deposit or income has reached more than 500,000 US dollars in the three years before its opening.
(2) Deduct labor costs from taxable income.
(3) Tax reduction or exemption of raw materials used for manufacturing, processing or producing export commodities.
(4) Deduct necessary and significant infrastructure expenditure from taxable income.
(5) Relevant materials and parts of imported equipment are exempt from customs duties.
(6) reduce dock fees and export tariffs.
(7) The local business tax shall be exempted for 4-6 years from the date of registration of the investment institution.
Non-financial preferential measures:
(1) Simplify customs procedures;
(2) Unrestricted use of consigned equipment: the equipment consigned to the Philippines is labeled as exportable;
(3) Enter the bonded factory system;
(4) Employment of foreign citizens: Foreign citizens can work in management, technology and consulting positions in registered enterprises for a period of five years, which can be extended with the approval of the investment department. The President, General Manager, Chief Financial Officer or equivalent positions can be retained for a longer period of time.
Industry Encouragement Policy: According to the Philippine Medium-term Development Plan 2004-20 10, the Philippine Investment Authority formulates an "investment priority plan" table every year, listing the projects encouraged by the Philippine government, and the projects listed in this table can enjoy financial and non-financial preferential measures.
The latest "Investment Priority Plan" was issued by President Arroyo's Memorandum No.299 in May, 2009, which is characterized by highlighting the protection of employment, in addition to continuing the 65,438+04 investment-encouraging areas clearly planned in 2008 (including agriculture and fisheries, infrastructure construction, tourism, R&D activities, machinery and equipment, steel manufacturing, strategic investment, afforestation, mining, printing and publishing) Provide tax and other preferential policies to enterprises that can still maintain or expand investment and ensure employees' employment under the influence of the global financial crisis, as well as small and medium-sized enterprises that have started new projects. However, there are also some excluded areas in the Emergency Plan, including: banks and financial institutions, retail, service industry, small-scale mining, activities restricted due to safety, national defense, health and moral hazard, small and medium-sized enterprises with foreign participation, non-agricultural basic consumer goods, health care products and so on. In addition, the Muslim Autonomous Region of Mindanao provides a special list, and eligible enterprises can also enjoy preferential investment measures. It should be pointed out that some of these areas are areas where foreign investment is restricted or prohibited.
Encouragement policies for special economic zones: The Philippine Economic Zone is mainly composed of 96 economic zones under the jurisdiction of PEZA, and independently operates Fiverdek Industrial Zone, subic, Kagayan, Sambuchi and Clark Freeport. The preferential policies of these special economic zones include:
(1) Enterprises can get a four-year income tax exemption period, which can be extended to eight years at the longest. After the end of the income tax exemption period, you can choose to pay 5% of the "total income tax" to replace all national (Chinese) local taxes, of which 3% will be turned over to the central government and 2% to the local finance;
(2) Imported capital goods (equipment), spare parts, accessories, raw materials, breeding animals or genetic materials used for reproduction shall be exempted from import duties and other taxes. If you buy similar goods in the Philippines, you can enjoy tax credit, that is, you are required to pay taxes first and then return the products after export (including the conversion and collection of import tariffs);
(3) After approval, 30% of the products produced by enterprises are allowed to be sold in the Philippines, but they are taxed according to domestic tax laws;
(4) Exemption from dock tax and export tax;
(5) The spouse and minor children (under the age of 265.438 +0) of investors whose initial investment exceeds $6.5438 +0.5 million are granted permanent residence status in the economic zone, and they can freely enter and leave the economic zone without applying to other departments;
(6) Simplify import and export procedures;
(7) It is allowed to employ foreign employees and apply for two-year renewable work visas for foreign managers and technicians, but the number of foreign employees shall not exceed 5% of the total number of employees in the enterprise;
(8) The expenses for technical training and management improvement of employees can be deducted by half from the 3% tax paid to the central government; In addition, whether to give other preferential treatment specified in E.0.226 is decided by PEZA.
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