Tax Exemptions in the Philippines 2023

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We’re sharing here the list of tax exemptions in the Philippines taken from the Tax Code and the 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, we also gave tips to master and memorize what is included in each category quickly. We think you will find it helpful if you are looking for a reviewer or taking the CPA or BAR exam. This list is for everyone interested to know what and who is exempted from paying taxes.

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

  • 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, and assets of non-stock and non-profit educational institutions used actually, directly, and exclusively for educational purposes, and all grants, endowments, donations, and 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, and revenues are related to religious, educational, and non-profit organizations – they may be exempted from taxes.

tax exemption philippines 2023

Income Tax Exemptions in the Philippines in 2023

The following are exemptions for income taxes in the Philippines. If you don’t need to file an income tax return, it doesn’t mean you are exempted from tax. Income tax and Income Tax returns are two different things. Income derived from the following are exempted:

  • Non-stock and non-profit educational institutions and government educational institutions
  • Non-stock corporations and organizations 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 banks and cooperative banks without capital stock and shares organized and operated for mutual purposes without profit, and development banks
  • General professional partnerships 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:
    • Who establishes to the satisfaction of the Commissioner the fact of his physical presence abroad with a definite intention to reside therein
    • Who leaves the Philippines during the taxable year to reside abroad, either as an immigrant or for employment on a permanent basis
    • 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
    • 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 an income of not more than PHP60,000 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 institutions, are usually not taxable.

Tax Exemptions for Estate Tax in the Philippines

Estate Tax is simply the tax we pay after a person dies or during the settlement of their estate for the beneficiary or heir of the properties and assets. We may pay estate tax on the transfer of these assets and properties. 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 favor 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 have inherited something, having a trusted lawyer legally transfer all your inheritance to your name can be beneficial and wise.

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 to restore and administer the development of Intramuros
  • Other donation exemptions stated in the Tax Code Section 34 and PD No. 762
  • Gifts made on account of marriage by a 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 corporations, accredited non-government organizations, 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 from paying income tax in the Philippines?

According to the Bureau of Internal Revenue TRAIN law (Tax Reform for Acceleration and Inclusion), those with annual taxable income below PHP 250,000 are now exempt from paying personal income tax in the Philippines.

Other Tax Guides:

Disclaimer: This article is solely for information purposes and does not constitute expert taxation advice. New laws and tax codes may be implemented at any time. Always practice due diligence before you file and pay your taxes.

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Fehl is the founder of Philpad and has been writing online for 12 years. She has a bachelor's degree in Accountancy and a background in Finance. She is a licensed Career Service Professional and author of a poetry book at Barnes & Noble. In her spare time, she likes to travel and discover new places.

36 thoughts on “Tax Exemptions in the Philippines 2023”

  1. 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?

  2. 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.

    • 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:

  3. 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?

  4. 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.

  5. 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.

    • 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!

  6. 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

  7. 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?

    • 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

  11. 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?

    • If you are a minimum wage earner or earning P60,000 or less per year, single or married, you are exempted from filing ITR

  12. 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!

  13. 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!

  14. 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?

  16. 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!

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

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

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

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

  19. Hi,

    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.

    • 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

  20. 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

    • 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

  21. 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?

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

  23. 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.

    Thanks

  24. 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.

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