Philippines Tax Residency Guide

the Philippines tax residency rules for the individuals for 2026. The guide covers: the 183-day presence test — the presence of 183 days or more in the Philippines within 12 months determines the resident alien status; the citizenship-based taxation — the Philippine citizens are taxed on the worldwide income regardless of where they live (the only SE Asian country with this rule); the RA 8424 (National Internal Revenue Code) — the Section 23 classification system; the four-way classification — the resident citizen, the resident alien, the non-resident citizen, the non-resident alien; the OFW and sea-based worker exemption — the exemption from the filing for the OFWs and the seafarers with no purely Philippine income.

183-Day Presence Test

183 days within 12 months: The individual who is physically present in the Philippines for 183 days or more within any 12-month period is classified as the "resident alien" (for the foreign nationals) or the "resident citizen" (for the Philippine citizens who reside in the Philippines). The days of the arrival and the departure each count as one full day.
Resident alien (foreign national): The foreign national who meets the 183-day test is the "resident alien" — taxed only on the income from the Philippine sources at the graduated rates (the 0% to 35% IIT). The resident alien must file the annual ITR (the BIR Form 1701 or 1700).
Non-resident alien (foreign national): The foreign national who stays for less than 183 days is the "non-resident alien NOT engaged in the trade or business" — taxed on the gross Philippine-source income at the flat rate of 25%. The non-resident alien who is "engaged in the trade or business" (having the regular employment or the business presence) is taxed at the graduated rates.

Citizenship-Based Taxation — Worldwide Income

Resident citizens — worldwide income: The Philippine citizen who resides in the Philippines (the "resident citizen") is subject to the tax on the worldwide income — the income from all sources within and without the Philippines. The worldwide income includes: the foreign employment income, the foreign business income, the foreign investment income, the foreign rental income, and the foreign capital gains.
Non-resident citizens — Philippine-source income only: The Philippine citizen who is physically outside the Philippines for 183 days or more in the taxable year is treated as the "non-resident citizen". The non-resident citizen is taxed only on the income from the Philippine sources — the foreign income is NOT subject to the Philippine tax. The OFWs, the seafarers, and the other overseas workers typically qualify as the non-resident citizens.
Unique in SE Asia: The Philippines is the only country in the Southeast Asia that taxes the worldwide income of the resident citizens. The other SE Asian countries (the Singapore, the Malaysia, the Thailand, the Indonesia, the Vietnam, the Cambodia, the Laos, the Myanmar, the Brunei, the East Timor) all use the territorial or the source-based taxation. This makes the Philippine tax residency rules the most expansive in the region.
Dual citizens: The Philippine dual citizens (the citizens of the Philippines and another country) are still treated as the Philippine citizens for the tax purposes. The dual citizen residing in the Philippines is taxed on the worldwide income as the resident citizen. The dual citizen residing abroad (183+ days outside the Philippines) is treated as the non-resident citizen — taxed only on the Philippine-source income.

RA 8424 (NIRC) Classification — Four Types

Resident citizen — Section 23(A): The Philippine citizen who is physically present in the Philippines (not necessarily 183 days — the "residence" is a matter of the domicile and the intent). The entire income from the worldwide sources is subject to the graduated IIT rates (0% to 35%). The annual ITR must be filed.
Resident alien — Section 23(B): The foreign national who is physically present in the Philippines for 183+ days in 12 months (or who holds the "immigrant visa" or the "long-term visa" with the intention to reside). The income from the Philippine sources only is subject to the graduated IIT rates (0% to 35%). The annual ITR must be filed.
Non-resident citizen — Section 23(C): The Philippine citizen who is physically outside the Philippines for 183+ days in the taxable year. The income from the Philippine sources only is subject to the graduated IIT rates. The OFWs and the seafarers are the non-resident citizens by definition. The annual ITR must be filed ONLY if the taxpayer has the Philippine-source income.
Non-resident alien — Section 23(D): The foreign national who is physically present for less than 183 days. The income from the Philippine sources is subject to: (a) the 25% flat rate (if NOT engaged in the trade or business), or (b) the graduated rates (if engaged in the trade or business).

OFW and Sea-Based Worker Exemption

OFWs — non-resident citizens: The "Overseas Filipino Workers" (the "OFWs") — the Philippine citizens working abroad under the employment contract — are automatically classified as the "non-resident citizens" under the Section 23(C)(3) of the NIRC. The OFW is NOT required to prove the 183-day physical absence — the OFW status is sufficient.
Sea-based workers: The "seafarers" or the "sea-based workers" — the Filipino seamen employed on the foreign-flagged vessels — are also classified as the non-resident citizens. The sea-based workers derive the income from the foreign sources (the employment on the international waters) — the income is NOT subject to the Philippine tax.
Exempt from filing if no purely PH income: The OFWs and the sea-based workers are exempt from filing the annual ITR if they have NO purely Philippine-source income. The foreign employment income is NOT subject to the Philippine tax. However, if the OFW or the seafarer earns the income from the Philippine sources (the rental income, the business income, the investment income in the Philippines), the ITR must be filed and the Philippine tax must be paid on that income.

Certificate of Tax Residency

BIR Form 4901 — COR: The "Certificate of Residence for Tax Treaty Purposes" (the "COR" — the "BIR Form 4901") is the official document issued by the BIR confirming the Philippine tax residency. The COR is required for the DTA relief — the reduced withholding tax rates on the cross-border payments (the dividends, the interest, the royalties).
Application process: The taxpayer must submit the BIR Form 4901 to the "Revenue District Office" (the "RDO") having the jurisdiction over the taxpayer's registered address. The application requires: (a) the BIR Form 4901 duly accomplished, (b) the valid government ID, (c) the proof of the tax residency (the lease agreement, the utility bills, the bank statements), (d) the certificate of the foreign tax ID (if applicable).
Validity: The COR is typically valid for the calendar year in which it is issued. The certificate includes: the name, the TIN (the "Tax Identification Number"), the address, the tax residency status, the date of the issue, and the official stamp of the BIR. The COR may be issued in the English language — the English COR is accepted by the treaty partners.