What about taxes? I accepted a job for P53K, and want to know

Hi FreddyRed and welcome to Expat.com!

A little introduction would have been welcomed, as well as a Hello, Please, or Thanks.

Do not hesitate to browse through the forum, it may help.

Harmonie.

I am sorry to be so abrupt. I accepted the job, it was advertised as tax free, and have Filipino fiance who has not seen her boys in over a year. I just had the "tax bomb" dropped in my lap after I resigned my position and booked our flights.

I am a little bit scared, and have three people I love to take care of. They are my only family.

Apologies,
Fred

It's a straight 30%

Hi, sorry to butt in on this thread but is 30% in Subic Bay as well? I too was told tax free and haven't yet accepted the job.

thanks

and to Harmonie, I apologize for Freddyred and myself on the abrubtness of our posts... like he, I have had little success in finding any information on the Phillipines through the internet and this is a major life change... little time to make a decision and lots of stress... I assure you it is not that we aren't friendly or courtious... just have little time to make a life decision.

Can both of you clarify your questions? Are your employers implying that when you work here in Subic or in any other area it's tax free? Read this information....

Enterprises registered with the Philippine Economic Zone Authority (PEZA) are entitled to a holiday from income tax and local taxes for three or eight years. After that, they are subject to 5% tax on gross income (sales less direct costs) in lieu of all local and national taxes. Enterprises that are registered with the Subic Bay Metropolitan Authority (SBMA) or Subic Bay Freeport Zone , which administers the economic zone established by the conversion of the former United States military base in Subic, are also subject to the special 5% tax, but are not entitled to tax holidays. The same benefits are accorded to qualified industries registered with the Clark Development Corporation and located in the Clark Freeport Zone .

To avail of the tax breaks and incentives offered by PEZA an enterprise must register with PEZA and locate their operations in one of the PEZA zones, buildings, IT Parks or Technology Parks. PEZA registrants must generally be export-oriented, with enterprises located inside the zones required to export at least 70% of their production. PEZA may approve the sale of up to 30% of production in the domestic market but 100% export is preferred. Full foreign ownership of a PEZA enterprise is allowed provided they are not engaged in activities that appear on the Foreign Investment Negative List . PEZA approval and specific incentives are granted on a case by case basis. Applicants must supply an application for providing information on capital structure, nationality of investors and a feasibility report in accordance with a PEZA prescribed format. Applicants should expect a fast turn around once the application is submitted.

Philippines Taxes for Businesses

The Philippine government imposes income tax, VAT (value added tax), estate and donor's tax, excise taxes, documentary stamp tax, and percentage taxes in the Philippines. Local governments impose local business taxes and real property taxes as well.

Foreign and local businesses in the Philippines that qualify and are registered for tax incentives can avail of income tax holidays and this may be followed by a special tax rate of 5% in lieu of any and all taxes if the business is located in a Philippine Special Economic Zone (PEZA).

Hope this helps!
Pinaymentor

Thanks Pinaymentor, I already read this... my employer IS implying that as an executive employee of the company that I am excempt from personal income tax. This is contrary to anything I have been able to find on the internet and I have state such to him.

Thanks for confirming my suspicions.


cheers
gordmer

gordmer,

I would check with a local tax consultant in your home country PRIOR to you accepting the offer. I am American and was able to work over here in the past and paid US Taxes only (significantly less than Philippine taxes). I had a 9A visa.

good luck!