REPORTERS NOTEBOOK
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, assets of non-stock and
non-profit educational institutions used actually,
directly and exclusively for educational purposes
and all grants, endowments, donations,
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, revenues derived are related from
religious, educational, and non-profit organizations they
may be exempted for taxes.
Income Tax Exemptions in the Philippines 2016
I have listed the exemptions for income taxes below. Note
that if you dont need to file income tax return doesnt
mean you are exempted from tax. IT and ITR are two
different things. Income derived from the following are
exempted:
Non-stock and non-profit educational institution
and government educational institution
Non-stock corporation and organization 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 bank and cooperative banks
without capital stock and shares organized and
operated for mutual purposes without profit, and
development banks
General professional partnership 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:
1. who establishes to the satisfaction of the
Commissioner the fact of his physical presence
abroad with a definite intention to reside therein
2. who leaves the Philippines during the taxable
year to reside abroad, either as an immigrant or for
employment on a permanent basis
3. 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
4. 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 income of not
more than P60,000 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 institution are usually
not taxable.
Tax Exemptions for Estate Tax in the Philippines
Estate Tax is simply the tax we pay when a person died and
they made us their beneficiary or heir of their properties
and assets. On the transfer of these assets and properties,
we may pay estate tax. However, there are exemptions:
REPORTERS NOTEBOOK

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 favour 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
you have inherited something, it can be very helpful and
wise to have a trusted lawyer to transfer all your inheritance
for you legally. Geez look at those unfamiliar terms and
you know what I am talking about here.
REPORTERS NOTEBOOK
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 for
the purpose of restoring and administering the
development of Intramuros
Other donation exemption stated on the Tax Code
Section 34 and PD No. 762
Gifts made on account of marriage by 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 corporation,
accredited non-government organization, 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.