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Withholding tax in Philippines 2026
Non-resident foreigners staying under 180 days lose a flat 25% of gross Philippine income — dividends, rents, salaries, gains — as a final tax; longer stays switch them to the resident-style scale.
For residents the big final rates are 20% on bank interest (uniform since July 2025) and 10% on dividends, plus creditable withholdings of 5-15% on fees and rents.
At a glance
- top rate
- 25% (short-stay non-residents)
- entry band
- 10% on dividends
- tax year basis
- Withheld per payment
- filing deadline
- Final withholding ends the duty; creditable ones reconcile 15 April
- residency basis
- Philippine-source payments
- regime flag
- Foreign-currency-deposit interest exempt for non-residents
Rates
Final withholding for residents (2026)
| Rate | Base | Applies to |
|---|---|---|
| 20% | Gross interest | Bank deposits, deposit substitutes and trust funds — uniform since July 2025, long-term instruments included |
| 10% | Gross dividend | Domestic company and mutual-fund dividends |
| 20% / 10% | Gross royalties | 20% generally; 10% on books, literary works and music |
| 6% | Higher of price or market value | Capital-asset property sales |
Creditable withholding and non-residents (2026)
| Rate | Base | Applies to |
|---|---|---|
| 5% / 10% | Gross fees | Professional, talent and directors' fees — 10% above PHP 3 million of yearly income |
| 5% | Gross rent | Business rentals of real property and equipment over PHP 10,000 a year |
| 2% | Payments | Certain contractors |
| 15% | Distributions | Beneficiaries of estates and trusts |
| 25% | Gross income | Non-resident foreigners not engaged in trade or business — final, no return needed |
Thresholds & allowances
- Compensation thresholdPHP 250,000
No withholding on annual compensation below this; minimum-wage earners exempt entirely
Residency
Residency trigger
Everything here concerns Philippine-source payments; the 180-day line decides whether a non-resident foreigner gets scale treatment or the flat 25%.
Non-resident treatment
Interest on foreign-currency deposits is exempt for non-residents including non-resident citizens; properly withheld final tax removes any filing duty.
Notes
- The Philippines has no estate or gift tax treaties, but its income tax treaties can trim the 25% non-resident rate.
- Late filing costs a 25% surcharge (50% for fraud) plus deficiency interest at double the legal loan rate.
- Since 2024 returns filed at the wrong office no longer trigger the old 25% wrong-venue surcharge.
- An immigrant head tax of PHP 250 applies to foreigners over 16 staying beyond 60 days — a relic, but still on the books.
FAQ
What withholding applies to non-residents in the Philippines?
A 25% final tax on gross Philippine income for stays under 180 days; longer stays move to the ordinary 0-35% scale.
How much tax is withheld on Philippine bank interest?
20%, final — the same rate for all deposit types and maturities since the July 2025 capital-markets law.
Figures: tax year 2026, compiled from public sources. Not tax advice.