Do Americans living in the Philippines pay tax there?

Section 23 of the Philippine tax code (the National Internal Revenue Code) says that a foreign individual, whether a resident or not, is taxable only on income from sources within the Philippines. Many expat tax websites say Philippine residents are taxed on their worldwide income. That rule applies to Filipino citizens, not to foreigners.

US pensions and Social Security are protected three ways. They are not Philippine income to begin with. The tax code also excludes pensions and social security benefits received by foreigners who come to live in the Philippines permanently. And under the US–Philippines tax treaty, US Social Security is taxed only by the United States. The Philippine Retirement Authority also lists tax on pensions among the benefits of the SRRV retirement visa.

Section 42 of the tax code treats pay for work performed in the Philippines as Philippine income. It does not matter who pays you or where the money lands. So under the law as written, an American working remotely for a US company while living here earns Philippine income.

• If you live here, or spend more than 180 days here in a calendar year, that income is taxed at the regular rates below.
• If you are here 180 days or fewer and not resident, the rate is a flat 25% of the gross amount.
• The digital nomad visa created in 2025 does not include any tax exemption, despite claims online that it is tax free.

We could find no Bureau of Internal Revenue (BIR) guidance written specifically for foreigners working remotely for foreign employers. This is what the law says, not a description of how it is enforced. If you work remotely from here, get advice from a Philippine accountant before you decide how to handle it.

Self employed people with yearly gross receipts of PHP 3 million or less can choose a simpler 8% tax on gross receipts above PHP 250,000 instead. To file, you need a Philippine Taxpayer Identification Number (TIN) from the BIR. The annual return is normally due April 15.

The United States taxes its citizens wherever they live. You must file if your income is over the normal threshold, which for tax year 2025 was US$15,750 for a single filer (US$17,750 at 65 or older) and US$31,500 for a married couple filing jointly. Self employment income of US$400 or more always requires a return. If Social Security is your only income, you generally do not have to file.

• Living abroad on April 15 gives you an automatic extension to June 15 to file. Interest on any tax owed still runs from April 15.
• The foreign earned income exclusion lets you exclude up to US$130,000 of earned income for 2025 and US$132,900 for 2026, if you pass either the physical presence test (330 full days abroad in 12 months) or the bona fide residence test. It covers wages and self employment income only, not pensions, Social Security or investment income.
• Instead of the exclusion, you can claim a credit for Philippine income tax you paid. The treaty requires the US to allow it.
• There is no US–Philippines agreement on Social Security taxes, so self employed Americans here still owe the 15.3% US self employment tax, even when the exclusion removes all their income tax.
• Up to 85% of Social Security benefits can be taxable. The Philippines is not one of the countries where living there changes this.
• From 2025 through 2028, people 65 and older can take an extra deduction of up to US$6,000 each, with income limits.

• If your accounts outside the US add up to more than US$10,000 at any point in the year, you must file an FBAR (FinCEN Form 114) online with the Treasury, separately from your tax return. It is due April 15, with an automatic extension to October 15.
• Form 8938 is a separate report filed with your tax return. For people living abroad it applies above US$200,000 at the end of the year or US$300,000 at any time for a single filer, and double that for a married couple filing jointly. A condo you own directly does not count.
• The penalties for not filing these are large, up to US$16,536 per FBAR even when the mistake was not deliberate. Filing is simple by comparison.

Since January 1, 2026, a 1% US tax applies to money transfers abroad paid for with cash, money orders or cashier's checks. Transfers funded from a bank account or card are not affected.

California taxes its residents on all their income, from anywhere. Under California law, someone who is domiciled in California and away only for a temporary purpose is still a resident. So moving to the Philippines does not end California residency by itself. California looks at where your ties are, and keeping a California home, driver's license, voter registration or car can be treated as a sign that you never really left.

• There is a safe harbor for people who leave for at least 546 days in a row, but only under an employment contract. Retirees and people moving without a job contract do not get it.
• If you work as a contractor, income from California clients can still count as California income after you move, because California looks at where the client receives the benefit.
• Other states have their own rules. If you are leaving any state with income tax, check how it decides that you have left.

The Philippines charges a 6% estate tax on a person's net estate, with a PHP 5 million standard deduction for residents. For a foreigner who lived here, it can reach more than just property in the Philippines. The US has its own estate tax, with an exclusion of US$15 million for deaths in 2026. If you own significant assets in both countries, plan this with a professional.

• Believing Philippine residents pay tax on worldwide income. For foreigners, it is Philippine income only.
• Assuming remote work for a US company is outside Philippine tax because the employer and the bank are in the US.
• Stopping US filing after the move.
• Assuming the foreign earned income exclusion covers pensions, Social Security or investment income.
• Forgetting self employment tax, which the exclusion does not remove.
• Not filing an FBAR for Philippine bank accounts over US$10,000 in total.
• Keeping a California home, license and voter registration and assuming California no longer counts you as a resident.
• Treating the June 15 extension as extra time to pay. Interest runs from April 15.