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Transferring large sums of money to the Philippines

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

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Before sending money to the Philippines, it’s important to learn about how large money transfers are regulated in the country and what your recipient should expect. Failing to report large transfers can cost both you and your recipient. Regardless of whether you’re sending cash or a direct bank deposit, transfers over ₱500,000 will need to be reported by your bank in the Philippines.

How the Philippines regulates large remittances

The Philippines doesn’t require its citizens to pay taxes on personal money transfers from abroad, despite a 12% value-added tax (VAT) on remittances proposed by the Duterte administration in 2017.

The Philippine government has no legal jurisdiction over remittances sent from abroad. The government does have jurisdiction over domestic remittances, where the tax is charged to the remittance company rather than the sender. For you, this means fees could be higher, but it doesn’t require any extra paperwork from the sender.

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.

Tax requirements for overseas Filipino workers when sending a remittance

The government classifies migrants who send money back home as overseas Filipino workers (OFWs). In order for the government to recognise you as an OFW, you must register with the Philippine Overseas Employment Administration (POEA). OFWs are taxed in the country they’re working in but are exempt from paying income tax in the Philippines.

OFWs won’t have to pay income tax, but they may need the following documents to avoid other taxes such as the documentary stamps tax:

  • Your Overseas Employment Certificate
  • A valid membership certificate from the Overseas Workers Welfare Administration
  • Your electronic receipt from the POEA

What to watch out for when sending money to the Philippines

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 their 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 overseas 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.

The most popular money transfer scams and how to avoid them.

Money transfer services that send to the Philippines

Name Product Minimum Transfer Transfer Time Transfer Fee
WorldRemit
WorldRemit
PHP 1
1 - 2 days
USD 3.99
WorldRemit Philippines lets you use your debit, credit or pre-paid card to send instant mobile airtime top-ups.
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