What should you know before sending $10,000+ to the Philippines?
Send money Philippines laws and documents

Laws and legal documents when transferring large sums of money into the Philippines

Here’s what to know about potential taxes on large money transfers.

You have many ways to send a lot of money to the Philippines to fund emigrating, studying or starting a business there. But one thing you can’t avoid are the laws and legal paperwork that might go along with large transfers. Before you move your money out of the US, familiarize yourself with the laws and regulations of the Philippine Islands.

How the Philippines regulates large remittances

Despite a recently proposed 12% value-added tax on remittances from the Duterte administration, the Philippines does not yet require its citizens to pay taxes on personal money transfers of up to $14,000 from abroad. To help migrants support their families in the Philippines, the government also waives taxes on any transfer intended for your children, no matter how much you’re sending.

Your recipient may be required to file forms as an “overseas Filipino worker” — what the government calls migrants who send money back home to support their loved ones. These forms are not for tax purposes but merely help the government keep track of remittances that are such an important part of the government’s GDP. Encourage your loved ones to complete them on time to remain within legal requirements.

What are the penalties for not filing a large remittance?

In the wake of 9/11, governments on either side of a remittance are focused on money entering and leaving their countries. If you send more than $14,000 to the Philippines, encourage your recipient to claim your remittance on their annual income tax filing.

Failing to file a large remittance can result in steep and complicated penalties. For example, if they miss the April 15th deadline, they can expect to pay 25% of the taxes due plus 20% annually until the tax is paid. If they even mistakenly fail to include the money they’ve received, they could be found by the tax courts to have willfully filed a false or fraudulent claim, which comes with a 50% penalty on the tax due.

Do I have to report large transfers out of the US?

You can send as much as you need to from the US to the Philippines. But if you’re sending more than $10,000, you’ll want to make sure to report it.

By law, banks report all cash transactions that exceed $10,000 — and any transaction of any amount that alerts their suspicions. Independent money transfer businesses are sometimes required to report amounts as low as $1,000, depending on the circumstances.

Avoid steep fines and possibly jail time by reporting any large amount of money that you send to loved ones abroad.
Sending a lot of money out of the country? Know what the IRS expects of you.

How will my recipient receive my remittance in the Philippines?

Depending on the bank or transfer service you choose, you’ll find delivery methods that include bank-to-bank transfers, cash pickups and even home delivery in select areas.

If your friends or family are picking up your transfer in person, advise them to take along ID and any transaction or confirmation number on your receipt. If they own the Philippine bank account you sent your money to, they likely won’t need to provide anything to receive it.

As with all international money transfers, be wary of potential fraud and only send money to people you know. Using a reputable provider can safeguard you from potential scams.

How to set up a business entity in the Philippines

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2 Responses

  1. Default Gravatar
    PorfirioFebruary 18, 2017

    I am building a vacation house in the Philippines and need to send money to the builder. How can I send dollar amounts larger than $20,000.00? Are there forms that need to be filed to IRS or other US agency?

    • Staff
      AdrienneFebruary 20, 2017Staff

      Hello!

      To send an amount to your builder in an amount higher than $20,000, you have a number of providers you can choose from, one we recommend is World First (click here to read our review about them). You can also compare providers in the table on this page – all of them allow transfers with no maximum limit.

      What forms you need to file with the IRS depends on how much you are transferring and the value of your accounts overseas. Here’s our article on IRS requirements for large transfers.

      Best regards and congrats on your vacation home!

      Adrienne

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