Sending over $10k to the Philippines: Tax laws to know | finder.com
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Tax guidelines and regulations for large money transfers into Philippines

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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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    Min. Transfer Amount Transfer Speed Online Transfer Fee Rate Amount Received Description CTA Details
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    USD 1,000 1 day USD 0.00 52.128 PHP 260,638 No maximum limit, no fees and competitive exchange rates for 100+ currencies. Go to site Show details
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    USD 1 Within an hour USD 3.99 52.075 PHP 260,167 Use promo code FINDER to send your first transfer with no fee.
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    4 Responses

    1. Default Gravatar
      MylaOctober 19, 2018

      My boyfriend is sending his money through his deposit account in US to my bank account in the Philippines and the money is of big amount higher than 100,000US Dollar because he want to establish business in the Philippines and planning to migrate here after he process his papers because he is a US Army deployed in Nigeria today. the process is almost 2 months from now because of some delay in sending the required document and some fees . On September 13, 2018 their Bank (Chase Bank) sent me email that the money is already transferred and I should receive it in three working days. They have attached the document to prove that it is already transferred like the Statutory Declaration of Claims and Transfer of Funds (Sworn Affidavit from Claim and Fund Transfer), Certificate of Clearance from Ministry of Finance and Economies US, and Transfer Confirmation Slip. But on September 17, 2018, I receive email from IMF BLOG International Monetary Fund from United Kingdom sending me an STOP Order regarding the fund transfer of my boyfriends money that I did not follow some requirements. they said that I should pay 700US dollar in IMF Head Office at United States within 7 days, so I complied with their requirements. after a few days they send me again message informing that before they made the transfer I should comply with the last requirements which is the 0 percentage tax amounting 3500 US Dolar within 21 days. We find have complied it again through the help of my boyfriend friend in the US and we gave the 3500 US Dollar to IMF United States of America this last Tuesday (October 16, 2018). but after the payment was made we message the IMF but they did not reply me anymore. My boyfriend ask favor to the Chase to follow up the transfer in the IMF Office in United States of America but according to them they just say that we hold on. Our question is why did they did not reply us and is it the process legal or we are already a victim of scammer? We are so worried because there is a lot of money I borrowed just to comply with their requirements.

      Please advised me. thank you

      • Default Gravatar
        joelmarceloOctober 25, 2018

        Hi Myla,

        Thanks for leaving a question on finder.

        Another tough one — and therefore popular among scammers — involves a bond with somebody you’ve met online through a dating site. Often, that person wants to immediately leave the site for a more intimate IM or text chat. They may claim to be working overseas with plans to visit soon. Over the course of some time, you’re let to believe there’s a strong connection. And then they ask for you to wire some money.

        Unfortunately it looks like you are scammed and I’m sorry to hear about this. Rule of thumb: Never send money to someone you don’t know.

        Please send me a message if you need anything else.

        Cheers,
        Joel

    2. 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?

      • finder Customer Care
        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

    US International Money Transfers Offers

    Important Information*
    XE Money Transfer

    Transfer up to $500,000 with no minimums and no fees.

    WorldRemit International Money Transfers

    Use promo code FINDER to send your first transfer with no fee.
    Send to 110+ countries for bank-to-bank deposit, cash pickup or mobile top-up.

    World First

    No maximum limit, no fees and competitive exchange rates for 100+ currencies.

    TransferWise

    Enjoy high maximum transfers into more than 20 currencies while saving up to 90% over local banks.

    Go to site