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Philippines: 12%
The Philippines has a 12% standard VAT rate and specific zero-rated transactions. The 18% amusement tax is a separate tax and is not shown as a VAT rate.
Advanced mode: You will see the effect of rounding on the VAT amount to be paid. See how the calculation is done.
See also: Percentage calculator
VAT Calculator calculates the VAT amount as well as the price with and without VAT. The VAT % is pre-filled, but you can change it or clear the value. The results are rounded to your desired precision. You can also make a currency conversion.
You can also choose the VAT% by clicking the percentages in the tables below.
Philippines | |
| standard | 12% Most taxable goods, imports and services, including clothing, electronics, restaurant meals, hotel accommodation, construction, professional fees, non-life insurance and domestic air or sea transport. Digital services consumed in the Philippines are included; the rules for nonresident providers apply from 2 June 2025. Specific exemptions and zero-rating take precedence. Excise duties and percentage taxes are separate taxes, not additional VAT rates. |
| zero rate | 0% Qualifying exports of goods by VAT-registered sellers and qualifying services supplied to customers doing business outside the Philippines or to nonresident individuals abroad, subject to the foreign-currency, documentation and other statutory requirements. Also qualifying international shipping and air-transport supplies, outbound international transport by domestic air or sea carriers, and sales of power or fuel generated from renewable sources. The renewable-energy rule does not generally cover plant maintenance or operation services. Related input VAT may be credited or refunded under the applicable rules. |
| effectively zero-rated | Effectively zero-rated supplies to persons or entities whose relief under a special law or international agreement covers indirect taxes. Qualifying local supplies to export-oriented enterprises and registered business enterprises (RBEs) can also be zero-rated under the CREATE MORE rules. The goods or services must be directly attributable to the qualifying export or registered activity, with the required EMB or investment-promotion-agency certification. The export-oriented-enterprise route requires at least 70% export sales measured against the preceding taxable year’s total annual production under the statutory rules. This is zero-rating with input VAT relief, not ordinary VAT exemption. |
| exempt without deduction | Agricultural and marine food products in their original state, specified farm inputs, qualifying books and educational publications including electronic editions, and approved prescription medicines for specified diseases. Qualifying medical, dental, hospital and veterinary services are exempt, but independently supplied professional services are excluded from that exemption. Also accredited education, specified financial services and services subject to percentage tax. Residential rent up to PHP 15,000 per unit per month and qualifying sales of houses and lots or other residential dwellings up to PHP 3,600,000 are exempt. Statutory relief also applies to specified purchases for the personal use of senior citizens and persons with disabilities. Employment services are expressly exempt under section 109(I). Related input VAT is generally not creditable. |
| out of scope | Transactions outside the material or territorial scope of Philippine VAT, such as a private sale of personal goods outside trade or business. Business-related incidental sales may still be taxable, and importing goods can attract VAT even when the importer is a private individual. For digital services, consumption in the Philippines brings the supply within Philippine VAT even if the supplier is abroad. A foreign customer or an economic-zone address alone does not establish that a transaction is out of scope. |
| reverse charge / withholding VAT | For taxable digital services purchased from a nonresident provider by a Philippine business, the buyer withholds and remits 12% VAT under the reverse-charge mechanism, whether the buyer is VAT-registered or non-VAT-registered. For private consumers, the liable provider or marketplace collects and remits VAT. Certain other payments to nonresident service providers or property owners also require 12% withholding VAT. Buyer remittance applies to covered B2B local sales by RBEs, subject to exclusions; under RR 1-2026, qualifying VAT-registered domestic-market enterprises without purchase/import VAT incentives remit VAT themselves. VAT deduction requires the buyer to satisfy the normal conditions. |
| used goods: full selling price is the VAT base | There is no general EU-style VAT margin scheme for dealers in used goods. A taxable resale normally uses the full selling price as its VAT base, with input VAT relief only where the ordinary conditions and invoice requirements are met. Buying from a private individual does not create deductible input VAT. The selling-price minus purchase-price difference is not the general VAT base. |
| small businesses and special tax bases | Small businesses The general VAT-registration threshold is PHP 3,000,000 in taxable sales over the preceding 12 months, or reasonably expected sales over the next 12 months. Voluntary registration is possible. A non-VAT-registered business exempt because of this threshold normally pays the separate 3% percentage tax on gross quarterly sales, subject to exceptions and the eligible individual’s 8% income-tax option. These are not reduced VAT rates, and non-VAT registration does not remove all withholding obligations. Electricity bills BIR RMC 97-2026 of 14 September 2026 excludes the allowable system-loss charge within the ERC-approved cap from VAT gross sales when separately identified on the bill and the other conditions are met. Application is prospective under the circular and ERC Resolution 26/2026. This is an exclusion from the tax base, not zero-rating of electricity as a whole. |
| Past changes: | |
| 14 Sep 2026 | BIR issues RMC 97-2026 confirming that the allowable system-loss charge within the ERC-approved cap is excluded from VAT gross sales when separately identified on the bill. The circular applies prospectively in conjunction with ERC Resolution 26/2026. This changes the treatment of a specified bill component, not the general electricity VAT rate. BIR RMC 97-2026 (copy: Reyes Tacandong) |
| 2 Jun 2025 | The 12% VAT rules for nonresident digital service providers become applicable to digital services consumed in the Philippines. The Philippine business buyer accounts for VAT under reverse charge, including non-VAT-registered business buyers; in B2C transactions, the liable provider or marketplace collects and remits VAT. BIR Revenue Memorandum Circular 47-2025 |
| 28 Nov 2024 | CREATE MORE changes the VAT rules for export-oriented and registered business enterprises, including zero-rated local purchases directly attributable to qualifying activities and VAT-exempt qualifying imports. Ordinary local sales by RBEs are subject to 12% unless an exemption or zero-rating applies; buyer remittance and its exclusions are governed by the implementing rules. Republic Act 12066 (CREATE MORE), Lawphil |
| 1 Jan 2024 | The VAT-exempt selling-price ceiling for qualifying houses and lots and other residential dwellings rises from PHP 3,199,200 to PHP 3,600,000. This housing ceiling is separate from the general PHP 3,000,000 VAT-registration threshold. BIR Revenue Regulations 1-2024 |
| 1 Jul 2023 | The temporary 1% percentage-tax rate ends and the ordinary 3% rate resumes for taxpayers covered by section 116. This percentage tax is separate from VAT; the standard VAT rate remains 12%. Republic Act 11534 (CREATE), section 13, Lawphil |
| 1 Jan 2018 | The general VAT-exemption threshold rises to PHP 3,000,000 under TRAIN. This is an exemption threshold, not a reduced VAT rate. Republic Act 10963 (TRAIN), Lawphil |
| 1 Feb 2006 | The standard VAT rate rises from 10% to 12%. National Tax Research Center / PIDS |
Note! The VAT information on this page is general information, not tax advice. The information is not exhaustive. VAT rules include many exceptions and special cases. Check the treatment of your situation in the tax administration's guidelines. The information was checked on 19 Sep 2026.
VAT rounding: the EU, the UK and other European countries
The EU VAT Directive and the Court of Justice of the European Union leave VAT rounding rules to be decided at national level. National rules vary. In the UK, HMRC allows VAT on B2B invoices to be rounded down to the nearest whole penny.
Roundings in VAT calculation: Mathematically impossible prices?
There are a whole range of VAT-inclusive prices that cannot be mathematically arrived at if the tax is calculated from the VAT-free price. One example is 3.99. These prices are also possible, but then the VAT-free price must be interpreted as rounded.
VAT Gap - How much VAT is left uncollected in EU countries?
9.5% of VAT was left uncollected in EU countries. See the list of EU countries and candidate countries.
In Europe there is VAT - in the US sales tax
In Europe, companies belonging to the production chain account for the VAT paid by the consumer to the state in proportion to their value added. The US sales tax, on the other hand, is billed entirely by the company that made the consumer sale. Sales tax is paid to local operators, not to the state.
Many of today's taxes were already in use in Antiquity. Deciding on taxation has moved from autocrats to parliaments and the level of taxation has risen. In earlier times taxes were used to wage wars, today taxes are used to maintain welfare states.
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