Expense rules in Philippines.
All BIR rules: 12% VAT, mission allowances and VAT recovery rules in the Philippines.
Get started →Disclaimer: This country guide is provided for informational purposes only and does not constitute legal advice. Although we update it regularly, it may not reflect ongoing regulatory changes. Illizeo SA declines all responsibility for actions taken or not taken based on this content.
1Expense rules & reclaimable VAT
| Category | VAT | Reclaim | Cap / Note |
|---|---|---|---|
| Business meals | 12% | 100% reclaimable | If business legitimate |
| Travel meals | 12% | 100% reclaimable | Per diem cap |
| Accommodation | 12% | 100% reclaimable | OR (Official Receipt) required |
| Fuel | 12% | 100% reclaimable | Business records |
| Train / flight | 12% | 100% reclaimable | Public transport |
| Taxi / Grab | 12% | 100% reclaimable | Receipt required |
| Client gifts | 12% | Limited | Reasonable BIR cap |
| Parking | 12% | 100% reclaimable | OR |
Official Receipt
OR mandatory for ITC.
Per diem
MNC standard.
Retention
BIR records: 10 years.
2Mileage allowance
| Mode | Allowance | Cap | Note |
|---|---|---|---|
| Personal car | PHP 12/km | By company | Standard practice |
| Motorcycle | PHP 6/km | By company | Reduced rate |
MNC practice
Private sector standard.
Records
Date, destination, km.
Covers
Mainly fuel.
3Per diem and travel allowances
| Destination | Meal | Lodging / night | Daily rate |
|---|---|---|---|
| Manila | PHP 1,000 | PHP 4,500 | PHP 5,500 |
| Cebu / Davao | PHP 800 | PHP 3,500 | PHP 4,300 |
| Senior executive | PHP 2,500 | PHP 7,500 | PHP 10,000 |
| Foreign — Singapore | PHP 3,500 | PHP 12,000 | PHP 15,500 |
| Foreign — Tokyo | PHP 4,000 | PHP 14,000 | PHP 18,000 |
MNC practice
Standard executive per diem.
Hotel separate
Lodging refunded on OR.
No statutory rate
No mandatory BIR cap.
4Foreign VAT recovery
| Zone | Mechanism | Deadline | Method |
|---|---|---|---|
| Philippines → EU | 13th Directive if eligible | Variable | Direct filing per EU country |
| France | No reciprocity | — | No agreement |
| United Kingdom | No reciprocity | — | No agreement |
| Switzerland | Reciprocity | 30 June N+1 | FTA Form 1222 |
| USA | No recovery | — | Sales tax not recoverable |
| PH VAT for foreign | No procedure | — | No general mechanism |
No B2B refund
No B2B recovery procedure.
Free zones
PEZA free zones exempt.
Outbound
PH company can recover EU VAT if registered.
Industrialize your Philippines expenses with Illizeo.
12% VAT, OR OCR, MNC per diem, multi-currency PHP↔USD↔EUR↔CHF: all the BIR rules above are natively integrated into Illizeo.
Book a demo