Philippines VAT Rate 2026: 12% Standard Rate

How Much Is VAT in Philippines?

The standard VAT rate in Philippines is 12% in 2026, with no reduced rates. It applies to most goods and services sold in Philippines. Standard VAT/GST rates worldwide range from around 5% to 27%.

How to calculate Philippines VAT

To add 12% VAT to a net (tax-exclusive) price, multiply it by 1.12. To remove VAT from a gross (tax-inclusive) price, divide it by 1.12.

• Add VAT: PHP 100 net × 1.12 = PHP 112 gross (that is PHP 12 of VAT)
• Remove VAT: PHP 112 gross ÷ 1.12 = PHP 100 net (that is PHP 12 of VAT)

Use the Philippines VAT calculator above for any amount, or compare Philippines with every other country in our VAT rates by country table.

Current VAT Rates

Historical VAT Rate Changes

• 2026: Current standard rate in force
• 2006: VAT raised to 12%
• 1988: VAT introduced

Economic Impact

VAT contributes approximately 20-30% to Philippines's total tax revenue. The current rate structure balances revenue generation with economic competitiveness within the Asia-Pacific region.

Zero-Rated Items

The following items are zero-rated for VAT in Philippines:

• Exports of goods and services
• International transportation
• Some basic food items
• Children's clothing
• Books and newspapers
• Prescription medications

VAT Exempt Items

The following are exempt from VAT in Philippines (no VAT charged, no input VAT recovery):

• Financial services
• Insurance services
• Healthcare and medical services
• Education and training
• Postal services
• Charitable activities

Reduced Rate Applications

Items subject to reduced VAT rates in Philippines:

• No reduced rates apply in this country

The Philippines requires VAT registration once gross sales exceed PHP 3 million a year; below that, businesses pay percentage tax instead. Always confirm current thresholds and deadlines with the Bureau of Internal Revenue (BIR), as they are reviewed periodically.

VAT Registration

• Registration Threshold: PHP 3,000,000
• Voluntary Registration: Available below threshold
• Registration Process: Online via tax authority website
• Processing Time: Typically 2-4 weeks

VAT Returns and Payment

• Filing Frequency: Quarterly (with monthly remittances)
• Filing Deadline: End of month following period
• Payment Methods: Bank transfer, online payment
• Late Filing Penalties: Varies by amount and delay

Cross-Border Trade

Special considerations for international transactions:

• Intra-EU Trade: Not applicable (non-EU country)
• Imports: VAT payable at point of entry
• Exports: Generally zero-rated
• Digital Services: Special rules may apply

For background on how the buyer accounts for VAT on intra-EU and cross-border B2B supplies, see the reverse charge mechanism. For B2C digital sales and low-value imports, see VAT on digital services and cross-border e-commerce.

Nearby Countries

What is the current VAT rate in Philippines?

The standard VAT rate in Philippines is 12% as of 2026. This applies to most goods and services unless they qualify for reduced rates or exemptions.

How do I calculate VAT in Philippines?

To add VAT: multiply the net amount by 12%. To remove VAT from a gross amount: divide by 1.12. Use our calculator above for instant results.

Who needs to register for VAT in Philippines?

The Philippines requires VAT registration once gross sales exceed PHP 3 million a year; below that, businesses pay percentage tax instead.

Can I reclaim VAT in Philippines?

VAT-registered businesses can generally reclaim input VAT on business purchases. Non-EU tourists may claim VAT refunds on qualifying purchases when leaving the country — see our guide to VAT refunds for tourists and non-resident businesses.