Philippines Capital Gains Tax Guide 2026

Overview — Capital Gains Taxation in the Philippines

Capital gains taxation in the Philippines is administered by the Bureau of Internal Revenue (BIR) under the National Internal Revenue Code. Gains from the sale of capital assets are generally subject to final withholding taxes that are separate from the regular income tax system. The Philippines uses a schedular system for capital gains — different rates apply to different asset types, and gains are not aggregated into a single capital gains computation. Notably, there is no distinction between short-term and long-term capital gains for any asset class.

CGT on Shares of Stock — 15% of Net Gain

The sale of shares of stock not listed on the Philippine Stock Exchange (PSE) is subject to capital gains tax of 15% on the net gain (selling price minus cost basis and expenses). Key rules:

• Rate: 15% of the net capital gain realised on the sale, exchange, or disposition
• Net gain: Selling price less acquisition cost (cost basis) and directly related expenses
• Applies to: Shares in domestic corporations not listed on the PSE
• No ST/LT distinction: The 15% rate applies regardless of holding period
• Losses: Capital losses can be offset only against capital gains from the same class of assets (shares) within the same taxable year

Optional CGT on Listed Shares — 0.6% of Gross (or 15% of Net)

For shares traded on the Philippine Stock Exchange (listed shares), the capital gains tax treatment differs:

• Standard: Gains from the sale of listed shares are generally subject to a 0.6% stock transaction tax on the gross selling price (for transactions exceeding PHP 5 million per year for certain taxpayers)
• Alternative: The taxpayer may elect to pay 15% of the net gain instead of 0.6% of the gross, depending on the taxpayer's classification and the size of the transaction
• In practice: For most individual investors, the stock transaction tax is 0.6% of the gross selling price for non-VAT registered sellers or 0.6% plus VAT for VAT-registered sellers
• Losses on listed shares cannot be offset against gains on unlisted shares

The stock transaction tax on listed shares is a percentage tax under Section 127(A) of the NIRC, not a capital gains tax per se, but it functions as the primary tax on securities transactions on the PSE.

CGT on Real Property — 6% of Gross Selling Price

The sale or disposition of real property classified as a capital asset (i.e., not held as inventory in the ordinary course of business) is subject to a 6% final withholding tax:

• Rate: 6% of the higher of the gross selling price or the BIR zonal value (or fair market value as determined by the provincial/city assessor)
• Final tax: The 6% CGT is a final withholding tax — it is not included in the seller's regular income tax return
• Who pays: The seller (buyer withholds if the seller is non-resident)
• Primary residence: Exempt if proceeds are reinvested in a new principal residence within 18 months (one-time exemption every 10 years)
• No ST/LT distinction: The 6% rate applies regardless of how long the property was held

No Short-Term vs Long-Term Distinction

The Philippines does not distinguish between short-term and long-term capital gains for any asset class. Whether a share is held for 1 day or 10 years, the applicable CGT rate is the same (15% on net gains for unlisted shares, 6% for property). This simplifies compliance — there is no holding period taper or preferential rate for long-term holdings. However, it also means there is no tax incentive to hold assets for longer periods from a capital gains perspective.

Capital Gains for Corporate Sellers

For corporations, capital gains are generally included in gross income and taxed at the regular corporate income tax rate (25% or 20% for SMEs), rather than the 15% or 6% final rates that apply to individuals. However, the sale of real property by a corporation that is not a real estate dealer is still subject to the 6% CGT as a final tax. The distinction depends on whether the asset is classified as a capital asset or an ordinary asset (inventory).

Reporting and Payment

Capital gains tax on unlisted shares is reported using BIR Form 1707 (Annual Capital Gains Tax Return) and BIR Form 1707-A (Remittance Return) for each transaction. Payment is due within 30 days from the date of sale. For real property, the 6% CGT is paid through BIR Form 1706 (Capital Gains Tax Return), filed within 30 days after the sale. For listed shares, the stock transaction tax is remitted by the broker or the Philippine Stock Exchange on behalf of the seller.

FAQs

Do I pay CGT if I sell shares at a loss?

For unlisted shares: No, the 15% tax applies only to net gains. For listed shares: The 0.6% stock transaction tax is levied on the gross selling price regardless of gain or loss, so there is a tax even on loss sales.

What is the BIR zonal value?

The BIR zonal value is an official estimate of the fair market value of real property per location, used as the minimum tax base for computing CGT, DST, and other transaction taxes. It is published in Revenue Memorandum Orders (RMOs) and updated periodically.

Is there a separate capital gains tax for cryptocurrency?

The BIR has issued guidance that gains from cryptocurrency transactions are subject to regular income tax (graduated rates for individuals) rather than the 15% CGT on shares. Crypto gains are treated as ordinary income.

Disclaimer

This guide provides general information about Philippine capital gains tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Philippine tax professional or the BIR directly for advice specific to your situation. InvestmentKit does not provide tax advice.