Tax Exemptions in the Philippines 2015

In this page I am sharing the list of tax exemptions in the Philippines this 2015 taken from the Tax Code and Philippine Constitution. What should be taxed and what shouldn’t? The list includes exemptions for income tax, donors, tax and estate tax. As a bonus I gave tips to easily master and memorize what are included under each category. Thought you might find it helpful if you are looking for a reviewer or if you are taking the CPA exam or BAR exam. Anyway, this list is for everyone interested to know what and who are exempted in paying taxes.

According to the Philippine Constitution, the following are exempted from taxes:

tax exemptions philippines

  • Charitable institutions, churches, convents, mosques, non-profit cemeteries, lands and buildings and improvements – actually, directly, and exclusively used for religious, charitable and educational purposes (according to Article VI, Section 28)
  • All income, revenues, assets of non-stock and non-profit educational institutions used actually, directly and exclusively for educational purposes and all grants, endowments, donations, contributions (subject to conditions prescribed by law) used actually, directly and exclusively for educational purposes (according to Article XIV Section 4)

Tip: If properties, assets, revenues derived are related from religious, educational, and non-profit organizations – they may be exempted for taxes.

Income Tax Exemptions in the Philippines 2015

I have listed the exemptions for income taxes below. Note that if you don’t need to file income tax return doesn’t mean you are exempted from tax. IT and ITR are two different things. Income derived from the following are exempted:

  • Non-stock and non-profit educational institution and government educational institution
  • Non-stock corporation and organization operated exclusively for religious, charitable, scientific, athletic or cultural purposes
  • Non-profit civic league or organization
  • Non-profit business league, chamber of commerce or board of trade
  • Cemetery company-owned and operated exclusively for the benefit of its members
  • Mutual savings bank and cooperative banks without capital stock and shares organized and operated for mutual purposes without profit, and development banks
  • General professional partnership formed by persons for the sole purpose of exercising their common profession; no part of the income is derived from engaging in any trade or business
  • A minimum wage earner or an individual pursuant to the provisions of the National Internal Revenue Code Section 51 (2)
  • A Non-resident citizen of the Philippines:
  1. who establishes to the satisfaction of the Commissioner the fact of his physical presence abroad with a definite intention to reside therein
  2. who leaves the Philippines during the taxable year to reside abroad, either as an immigrant or for employment on a permanent basis
  3. who works and derives income from abroad and whose employment thereat requires him to be physically present abroad most of the time during the taxable year
  4. who has been previously considered as a non-resident citizen and who arrives in the Philippines at any time during the year to reside permanently in the Philippines will likewise be treated as a non-resident citizen during the taxable year in which he arrives in the Philippines, with respect to his income derived from sources abroad until the date of his arrival in the Philippines.
  • Income from bonds and securities for sale in the international market
  • Prizes and winnings from a charity horse race sweepstakes from the Philippine Charity Sweepstakes Office
  • SSS and GSIS Benefits
  • Benefits received from the US government through the US Veterans Administration
  • Annual taxable income of Senior Citizens or those at least 60 years old who have income of not more than P60,000 per year, subject to review by NEDA
  • Exemption for a limited period of new and necessary industries (RA No. 901)
  • Exemption of pioneer and registered enterprises under the Investment Incentives Act (RA No. 5186)

Tip: Studying the above list, income and revenues derived from outside the Philippines, derived from non-profit, purely educational, and government institution are usually not taxable.

Tax Exemptions for Estate Tax in the Philippines

Estate Tax is simply the tax we pay when a person died and they made us their beneficiary or heir of their properties and assets. On the transfer of these assets and properties, we may pay estate tax. However, there are exemptions:

  • The merger of the usufruct in the owner of the naked title
  • The transfer or delivery of the inheritance or legacy by the fiduciary heir or legatee to the fideicommissary
  • The transfer or transmission from the heir, legatee, or done in favour of another beneficiary, in accordance with the desire of the predecessor
  • All bequests to social welfare, cultural and charitable institutions, subject to certain conditions

Estate tax just like other laws is broad. If you are an heir or you have inherited something, it can be very helpful and wise to have a trusted lawyer to transfer all your inheritance for you legally. Geez look at those unfamiliar terms and you know what I am talking about here.

Donors Tax Exemption in the Philippines

  • Donations to the Philippine government for scientific, engineering and technological research, invention and development
  • Donations to the International Rice Research Institute (IRRI)
  • Donations to the social welfare, cultural and charitable institutions
  • Donations to the Ramon Magsaysay Award Foundation
  • Donations to the National Museum, National Library and the archives of the National Historical Institute
  • Donations to the Southern Philippines Development Administration
  • Donations to the Museum of Philippine Costumes
  • Donations to the Intramuros Administration for the purpose of restoring and administering the development of Intramuros
  • Other donation exemption stated on the Tax Code Section 34 and PD No. 762
  • Gifts made on account of marriage by resident of the Philippines parents to each of their legitimate, recognized natural or adopted children to the extent of the first P10,000
  • Gifts made to or for the use of the national government or any entity created by any of its not-for-profit agencies or to any of its political subdivision
  • Gifts in favor of educational or charitable, religious, cultural or social welfare corporation, accredited non-government organization, trust or philanthropic or research organizations or institutions

Tip: Donations and gifts related to educational and government research and development projects are usually not taxed. Likewise with donations to national museums.

Who are exempted in filing Income Tax return or ITR?

Again, that’s another topic and it is discussed in another page.


  1. Oberon Tan Tai says

    What excellent high quality information there is here, thanks for explaining the taxes. My wife is Filipino and we already benefitted from your information. I will recommend this to friends of mine.

    Oberon Tan Tai.

  2. joan says

    Im a permanent employee of a company in phil. But my job are always abroad, im working abroad more than six mons in a year. Do Im entitled for tax exempt? And additionally I have a Overseas Employment Certificate everytime I go abroad.


  3. SHIELA MUJER says

    I would like to ask whether prosthesis is free of tax when relatives receive it from abroad to Philippines?

  4. Glenn says

    If a non-stock, non-profit organization, not a foundation, held a fundraising activities were the organization would sell products then all of its profit would be used for charitable work, will the profit from sold products be taxable or not?

    How about when it does advertising and uses the money/income for employees salary? Will the income from the advertising be taxable?

  5. Jerry says

    I have 3 children (4y/o, 3y/o and 9months old boys) and i declared my wife as my dependents, do i need to pay tax or i will be exempted in paying witholding taxes? thanks

    • Fehl says

      Both you and your wife need to pay taxes if you’re not under the minimum wage earners. Take note of your allowable deductions and personal basic exemptions (50,000) each spouse in computing for your income tax payable

  6. Aprille says


    I have 2 children (4 y/o and 1 y/o), i also declared my spouse as my dependent. My spouse has no job so I was the sole provider of my family. Do I need to pay tax or can I be exempted in paying them? Thanks.

    • Fehl says

      Your spouse is the one exempted coz she is not earning or has no job. You need to pay tax if you’re earning income or you have a job and you are earning more than P60,000 per annum. You can deduct basic exemptions and personal exemptions to your allowable deductions to derive your tax payable

  7. aldenn says

    I’m working as OFW.. and my wife is working in philippines is it possible that her tax maybe deducted or removed??

    • Fehl says

      Nope, unless she doesn’t work anymore. She will not be taxed if she’s under the “minimum wage earners”

  8. Alakdan says

    Is it true that doctors and lawyers are somehow exempted in paying tax? Are there any professionals exempted also? Thank you.

  9. louise says

    my spouse is filing for an update of marital status and wants to add me as his dependent. will his tax be deducted? Im unemployed but we don’t have any children yet. will wait for your response! thanks!

    • Fehl says

      There are personal deductions and optional deductions in computing tax due for every individual. The forms will help you what to list :)

  10. cielo says

    if non-profit religious organization like churches are exempt from tax, why does the tax type in the certificate of registration from BIR include income tax?

  11. Romar Tenorio says

    thank for your information, what are the exemptions of regular worker earning a minimum wage. are they taxable? are they exempted, what are those exemptions if ever. Thank You!

  12. mayee says

    1. i have resigned since nov 2013 and has no job until now. does it make any difference to my husband’s tax if i become his dependent? if so, would it be on his 2013 or 2014 income tax?

    2. if our two kids (12, 7 yrs old) are his dependents, and i start working again, would it make any difference if i make the kids my dependents if my salary is higher than his?

    3. how does taxable income affect one’s retirement pay? i think some companies increase benefits as non-taxable income in order to lessen the withholding tax. however, others say this would also decrease the amount of retirement pay in the future.

    thank you very much!

    • Edgar says

      All your income from January 2013 to November 2013 shall be taxable, both husband and wife shall file either separately or combined their income tax return, thus, qualified dependents may be divided by the husband and wife, thus, entitled to Married Individual Exemption, if legal wife or husband.

  13. Liezl Pardorla says

    Im a minimum wage earner here in iloilo city I have a husband & a son, am I exempted in Tax? Another question if your single and has a minimum wage do you also exempt i tax?

  14. Cora says

    Are incomes earned during selling shares of stock through any online stock brokers such as colfinancial/bpitrade and the likes need be declared on the ITR?

    • Fehl says

      Nope, they don’t need to be in the ITR because your broker already deducted you taxes from the sale of stocks. Your broker already reports these taxes to the BIR. That is why everything you receive or pay are already on NET value. It’s the reason too why brokers require our TIN when we open our account

  15. Nathaniel says

    good day!
    ask ko lang po.dun po ba sa 1601C na form pano po ba mag fill up nung total amount of compensation?
    at dun po sa tax required to be witheld?
    please help po
    tnx po

  16. Phil says

    We are in the process of starting an Christian orphanage ministry. We have registered with SEC and the BIR and filed with the BIR for tax exempt status. Upon following up on our request for tax exemption several weeks after filing (the BIR told us it may take a few months for the approval) we spoke with a gentleman from the BIR department in which handles the tax exemptions and he told us that upon looking at our paperwork we would have to operate for 3 years without a tax exempt status before the exemption could be granted. This sounds ridiculous but that’s what he told us. Can you please verify if that is true? Thank you for your help.

    • Fehl says

      Hi Phil! I suggest you hire a Tax lawyer. I don’t know if a religious institution really has to operate 3 years without tax exempt before it can be exempted. I just know reading the tax book and the law articles on it that religious institutions are exempted. I didn’t see a part stating the institution needs 3 years as you mentioned here. God bless!

  17. Ken says

    good day, I am a registered PWD or a Person with disablity. I would like to know if there is a tax discount or exemption (possibly) that can be applied for me. I am currently a BPO or a call center agent for 2 and 1/2 years already. Thanks for the response.


    I belong to a religious congregation and a 6000 sq meter lot was donated to us. Since we are registered as a non profit corporation with the SEC you info is very much appreciated. Can you list the necessary steps and documents for transfer of title?

  19. estelito m. quimio says

    I consider all your information very useful to anyone in relation to their individual needs.
    I am in the process of organizing a producer’s cooperative.
    Are Coops registered under RA 9520 exempted from paying taxes?
    Thank you for whatever information you can give me.

    • Fehl says

      Hi. I don’t know so much about Cooperatives but it has been mentioned about tax exemption in RA 9520

      “ART. 60. Tax Treatment of Cooperative. – Duly registered cooperatives under this Code which do not transact any business with non-members or the general public shall not be subject to any taxes and fees imposed under the internal revenue laws and other tax laws. Cooperatives not falling under this article shall be governed by the succeeding section.

      “ART.61. Tax and Other Exemptions. Cooperatives transacting business with both members and non-members shall not be subjected to tax on their transactions with members. In relation to this, the transactions of members with the cooperative shall not be subject to any taxes and fees, including not limited to final taxes on members’ deposits and documentary tax. Notwithstanding the provisions of any law or regulation to the contrary, such cooperatives dealing with nonmembers shall enjoy the following tax exemptions:

  20. Aey says

    I was not able to update my claim exemptions for my 2 kids last year, my husband resigned from work March 2014. Will be passing a form for update this week. Shall I get a refund?

  21. Lorcep Jane Cuizon says


    I am a School Public Teacher. I am single but I have 2 children but the family name they are using is the family name of there FATHER and the father has NO JOB. Do I have my tax exemption? I hope you can answer my question ASAP.

    Thank you and God Bless!

    • Fehl says

      Hi, in your case this will be the usual computation of your tax payable:

      Gross compensation income
      – Premium Payments for Health and hospitalization (2,400)
      – Basic Personal Exemption (50,000)
      – Additional Exemption: Child 1 (25,000)
      Child 2:(25,000)
      = Taxable income

      Multiply that taxable income following the Rates of Individual Income Tax to arrive at your NET TAX PAYABLE or Tax Due

      • Sane says


        Ano po ang ibig-sabihin ng additional exemption at ang basic personal exemption?

        Iyan po ba ay makukuha ng tax payer kung sakaling magre-resign sya sa trabaho?

  22. Rose says

    Hi, I resigned from previous company last Oct 2014 and start in my current company Nov 2014, got annualized deducted with taxes for 2014. But as I checked my current 2316, my tax exemption was 50,000 and status is Married w/o dependent. I have compared it on my 2316 from previous employer and my declared tax exemption was 75,000 and status is Married w/ no dependent declared. I am actually Married with 1 dependent since 2011. Does my current 2316 overrides my previous one from my old employer? Hope u could enlighten me. TIA

    • Fehl says

      Hi, I’m not an expert with taxes but if you declared 1 dependent and married status, 75K is correct for the allowed exemption and it would override the old record in my opinion

  23. Sane says

    ma’am Fehl, about the additional exemption for qualified dependent of PHP25,000, I heard that the parent can enjoyed the PHP25,000 (additional exemption). What does it mean? Do they actually get the PHP25,000 from BIR? Then, if they got it from BIR, how they do that? And how about the basic personal exemption? Hope you could answer & enlighten me.

  24. james amante says

    hi, I am the breadwinner of my family, my father is senior citizen and he is already retired, my mother is housewife, am I exempted in tax?? thanks…

  25. Emman Guballa says

    Hi, I have two companies last year. I have a 50k personal exemption from my 1st company (Jan-May) and my personal exemption for my current company is also 50k (Nov-Dec). Does this mean it will add up to 100k for my personal exemption when I file for ITR using form 1700? Thanks!

  26. JOYCe says

    Hi Good Day..
    Tanong lang Po..
    My husband is only 1peso higher to minimum wage is he required to be deducted for withholding tax? di na po ba yun kasama sa exemption?

  27. jay says

    hi maam.. Is there an age limit for tax exemption? he is currently working and he is more than 50 years old. he’s salary is above minimum wzge.

    thank you..

  28. marie fanz says

    I applied 2 years ago that I will claim the exceptions. My husband was able to fill up the sworn declaration and waiver of right to claim exceptions of qualified dependent children. For this year 2015 I would like to change it that my husband will be the one who will claim the exceptions. What will I do to change it?.. Hoping for your help. Thank YOu!

    • Fehl says

      File a Sworn Declaration and waiver of right and attached it to BIR Form No. 2305 or BIR Form No. 1902. Both you and your husband must sign it and provide each of your employer acknowledgment before it will take effect on the payroll

  29. Agnes A. Fabro says

    Hi! I gave birth for my 3rd child last Nov27, 2014. One of the requirement for the additional dependent is NSO authenticated (available after 6mos) or cert. true copy from Civil registry of Birth Certificate which is available after 30 working days upon filing but due to Holidays and work cancellations due to typhoon, it took me about 60days to get the cert. true copy and too late for me to have the exemption effect for taxable year 2014. Can I still claim this exemption since it’s not my fault? Thanks and regards

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