PH may impose 15% minimum tax on big multinationals

Proposal aligns with OECD global tax framework; firms with ₱45B+ revenue covered.

Large multinational companies operating in the Philippines may soon be subject to a minimum 15% tax if a proposed measure aligning with a global tax framework is enacted.

The proposal is anchored on the framework developed by the Organisation for Economic Co-operation and Development (OECD), which sets a global minimum tax rule for large multinational firms. Companies affected are those with at least €750 million in global revenue (roughly ₱45 billion to ₱47 billion), depending on exchange rate assumptions.

Currently, large multinationals operating in the country are generally subject to a 25% corporate income tax rate. However, various incentive regimes and special arrangements can lower their effective tax rate significantly, in some cases below the 15% threshold. This is where the proposed measure comes in, ensuring that firms still meet the global minimum tax floor regardless of incentives.

Under the OECD system, if the Philippines does not collect up to the 15% minimum, the difference may instead be collected by the company’s home jurisdiction. The mechanism is designed to reduce profit shifting and ensure taxes are paid where economic activity occurs.

The Department of Finance is backing the measure and has endorsed it for congressional approval, with implementation timelines aligned with the OECD rollout schedule. Smaller firms are not covered by the proposal.

If approved this year, the Philippines could join the framework by 2027, with initial collections targeted for 2028.

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