The standard corporate tax rate is 25% (reduced from 30% effective 1 July 2020) for domestic companies and “resident foreign companies”, i.e., foreign companies engaged in a trade or business within the Philippines.

The corporate tax rate is 20% (reduced from 30% effective 1 July 2020) for micro, small and medium enterprises (MSMEs), including domestic corporations with taxable income up to PHP 5 million and total assets (excluding land) up to PHP 100 million.

Proprietary educational institutions and non-profit hospitals are subject to a preferential tax rate of 10% on net income (increased from 1% effective 1 July 2023), provided the gross income from unrelated trade, business, and other activities does not exceed 50% of the total gross income from all sources.

Domestic companies and “resident foreign companies” are subject to the higher of the standard corporate tax and the minimum corporate income tax (MCIT). The MCIT applies from the 4th taxable year immediately following the year in which the company commenced its business operations. The MCIT rate is 2% of gross income (increased from 1% effective 1 July 2023).

Effective from 1 January 2018, capital gains from the sale of shares not traded on the stock exchange are taxed at a flat rate of 15% (earlier, the 5%/10% progressive rates applied).