Residency
The Philippines splits individuals into four categories with very different tax bases [1,2]:
- Resident citizen (Filipino living in the Philippines): worldwide income.
- Non-resident citizen (Filipino abroad): Philippine-source only.
- Resident alien (foreigner with intent to reside in the country, typically holding a permanent or long-term visa): Philippine-source only.
- Non-resident alien: Philippine-source only, at higher rates.
This is the key relocator point: a Western retiree settling on an SRRV or 13(a) visa is a resident alien, not a resident citizen, and is taxed only on Philippine-source income. Foreign pensions, foreign dividends and foreign rentals remain outside the Philippine tax base regardless of remittance [1]. Residency for aliens depends on physical presence plus intent (typically shown by visa class and length of stay).
Income tax brackets, 2025 tax year (TRAIN Law)
Compensation income of resident individuals is taxed on this schedule under Republic Act 10963 (the TRAIN Law), effective 1 January 2023 [1,3]:
- up to 250,000 PHP/year: 0 percent
- 250,001 to 400,000: 15 percent on the excess over 250,000
- 400,001 to 800,000: 22,500 + 20 percent on the excess over 400,000
- 800,001 to 2,000,000: 102,500 + 25 percent on the excess over 800,000
- 2,000,001 to 8,000,000: 402,500 + 30 percent on the excess over 2,000,000
- above 8,000,000: 2,202,500 + 35 percent on the excess over 8,000,000
As a rough guide, 250,000 PHP is around 4,000 EUR. Self-employed and professional taxpayers with gross income under 3 million PHP may elect a flat 8 percent on gross instead of the brackets [1]. Non-resident aliens not engaged in trade are taxed at a flat 25 percent on Philippine-source gross income [2].
Foreign-source income
Only resident citizens pay tax on worldwide income; resident aliens (the typical relocator category) do not [4,1]. For a Western retiree on the Philippine Special Resident Retiree's Visa (SRRV) or a quota immigrant visa (13(a)), foreign pensions, foreign-bank interest and offshore investment income are simply outside the Philippine tax net.
SRRV and pension treatment
The Philippine Retirement Authority states that SRRV holders enjoy an exemption from Philippine tax on pensions and annuities, alongside the residence-alien sourcing rule above [5]. The underlying authority is Executive Order 1037 (1985) and its implementing rules. In practice, a foreign pension paid into a Philippine bank for an SRRV-holding retiree does not incur Philippine income tax. Interest credited on the SRRV time-deposit may incur ordinary 20 percent final withholding under domestic rules.
Filipino-source pensions and SSS/GSIS benefits are generally exempt for retirees under domestic law (Section 32(B) NIRC).
Capital gains
Specific final taxes apply rather than folding gains into the progressive brackets [1,6]:
- Sale of shares of a domestic corporation not traded on the stock exchange: 15 percent on net gain.
- Sale of shares of a domestic corporation listed on the Philippine Stock Exchange: 0.6 percent stock-transaction tax (in lieu of income tax).
- Sale of real property in the Philippines classified as a capital asset: 6 percent of the higher of zonal value, fair-market value or selling price (paid by the seller).
- Foreign-share or foreign-property gains earned by a resident alien: not Philippine-source, therefore not taxed in the Philippines.
Estate and donor's tax
The TRAIN Law set a single estate-tax rate of 6 percent on the net estate above 5 million PHP (around 80,000 EUR) of standard deductions and reliefs [6]. The Philippines taxes the worldwide estate of a deceased resident citizen and resident alien, but only Philippine-situs assets of a non-resident alien. A retiree's SRRV deposit held in escrow is not part of the taxable estate.
Donor's tax is a flat 6 percent on the value of gifts above 250,000 PHP per year, regardless of relationship between donor and donee [6].
Worldwide investment income
For a resident alien (the relocator default), only Philippine-source investment income is in scope. Bank-interest withholding is generally 20 percent final; dividends from domestic corporations to resident-alien individuals are taxed at 10 percent final [1].
Treaty status with IE, GB, US, DE, FR
The Philippines has about 43 double-tax treaties [7]:
- Ireland: no comprehensive DTA in force as of May 2026. Negotiations have been discussed publicly since 2019 but no treaty has been signed.
- United Kingdom: signed 10 June 1976, in force 22 January 1978; protocol effected later.
- Germany: signed 9 September 2013, in force 18 December 2015 (replaced 1983 treaty).
- France: signed 9 January 1976, in force 24 August 1978; later protocol via RMC 65-2015.
- United States: signed 1 October 1976, in force 16 October 1982 [8].
BIR links treaty PDFs from its DTA page [7]. Obtain treaty relief via a Tax Treaty Relief Application or, more commonly, via a Certificate of Residence for Tax Treaty Relief (CORTT) processed through the BIR International Tax Affairs Division.
Filing notes
The Philippine tax year is the calendar year. The annual income-tax return (BIR Form 1700 for compensation earners, 1701 for mixed/self-employed) is due 15 April of the following year [3]. Filings are in English. You need a Taxpayer Identification Number (TIN); the BIR Revenue District Office issues one on application. Resident aliens with only foreign-source income generally do not file because they generate no Philippine-source income, but you still need a TIN to operate a bank account or own property.
Not tax advice
This is a relocator-level summary, not advice. Visa class drives sourcing here more than in any other country we cover, so confirm your status (resident citizen, resident alien, non-resident alien, SRRV) with a Philippine tax practitioner before relying on these rules [1].