Philippines: Worked Example of Tax on Rent

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Tax Example: Rent

Non-resident couple's joint monthly rental income1		US$1,500	US$6,000	US$12,000
Annual Rental Income		18,000	72,000	144,000
= Taxable Income		18,000	72,000	144,000
Income Tax Rates2
Flat Rate	25%	4,500	18,000	36,000
Annual Income Tax Due		US$4,500	US$18,000	US$36,000
Tax Due as % of Gross Income		25%	25%	25%
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DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on October 3, 2006.

Notes

Punongbayan & Araullo is a member firm of Grant Thornton International. Grant Thornton International is not a worldwide partnership. Member firms of the international organization are independently owned and operated.

¹ The residential property is jointly owned by husband and wife.

² Non-resident foreigners deriving rental income in the Philippines are subject to a flat 25% income tax rate levied the gross income, without any deduction for depreciation expense and other income-generating expenses.

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