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Tax guidelines and regulations for large money transfers into Philippines

Here's what you need to know about potential taxes on large money transfers to the Philippines.

Regardless of whether you’re sending cash or a direct bank deposit, transfers over RM25,000 will automatically be reported to Bank Negara Malaysia (BNM) and transfers over ₱250,000 will need to be reported in the Philippines, too.

How the Philippines regulates large remittances

Throughout 2018 and 2019, the Philippines imposed stricter tax guidelines on gifted money. Gifts of over ₱250,000 — or about RM21,175 — as of August 2019, will be taxed at a rate of 6%. The donor is responsible for filing BIR form 1800, regardless of whether or not they reside in the Philippines.

The new laws also don’t have different tax brackets based on your relationship to the recipient. Gifts to relatives are taxed at the same rate as gifts to friends. Though certain types of gifts, like gifts to some charities, are exempt.

Check with a tax professional if you’re unsure if you need to file and/or you need help filing your tax returns.

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USD 200 1 day MYR 50.00 12.195 PHP
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Disclaimer: Exchange rates change often. Confirm the total cost with the provider before transferring money.

What are the penalties in the Philippines if my recipient fails to file?

Failing to file a large remittance can result in steep and complicated penalties. For example, if they owe taxes and 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 Malaysia?

You can send as much money as you need from Malaysia to the Philippines. In Malaysia, banks and money transfer specialists are required by law to report all transactions that exceed RM25,000 or any they deem suspicious. You usually won’t need to do anything on top of this, but it’s a good idea to keep all your records of the transfer just in case.

How will my recipient in the Philippines get the money?

Depending on the bank or transfer service you choose, your recipient can pick up the money in cash or have it deposited directly into their account or mobile wallet.

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.

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.

Send money to the Philippines

Bottom line

Online transfer providers make it easy to send money to the Philippines. Before sending money abroad, compare international money transfer companies to make sure you’re getting a fair rate.

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