OFW Tax Guide 2026 — Philippine Tax Rules for Overseas Workers
As an OFW, your income earned abroad is generally exempt from Philippine income tax under the National Internal Revenue Code. However, certain types of Philippine-sourced income, property transactions, and capital gains may still be taxable. Understanding your obligations helps you stay compliant and maximise your savings.
Tax Rules for OFWs
Income Exempt from Philippine Tax:
- Salary and compensation earned abroad as an OFW
- Remittances sent to the Philippines
- Allowances and benefits from foreign employer
Income Subject to Philippine Tax:
- Rental income from Philippine property
- Capital gains from selling Philippine real estate (6% CGT)
- Dividend income from Philippine corporations (10% final tax)
- Interest income from Philippine bank deposits (20% final withholding)
- Business income from Philippine-based businesses
Do OFWs Need to File BIR Returns?
- No BIR filing needed if your only income is overseas compensation
- Filing required if you have Philippine-sourced income (rental, business, capital gains)
- TIN required for property transactions, bank accounts, and government dealings
- Get a TIN at any BIR Revenue District Office or through your employer before departure
Tax on Philippine Property
- Capital gains tax: 6% of selling price or zonal value (whichever is higher)
- Documentary stamp tax: 1.5% of selling price
- Real property tax: Annual tax paid to local government
- Rental income tax: 8% flat rate (if gross receipts do not exceed PHP 3M) or graduated rates