Valid Deductible Expenses in PH

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Valid Deductible Expenses in PH

If you have taxable income, filing and paying your income tax is a must before the due date. In computing your income tax, you have to determine the valid expenses to be deducted in your gross income.  As heroic professionals, we must be honest and wise in claiming only what is considered as valid deductions. Some computed higher, some computed lower than it should be. If you want to minimize your income tax legibly, you should know the following allowable expenses.

The following are the BIR listed expenses in PH that is deductable as itemized deduction.

  1. Advertising and Promotions
  2. Amortizations
  3. Bad debts
  4. Charitable contributions (subject to limitation)
  5. Commissions
  6. Communications, lights and water
  7. Depletion
  8. Depreciation
  9. Director’s fees
  10. Fringe benefits
  11. Fuel and Oil
  12. Insurance
  13. Interest (subject to limitation)
  14. Janitorial and messengerial services
  15. Losses
  16. Management and consultancy fee
  17. Miscelleneous
  18. Office Supplies
  19. Other services
  20. Professional fees
  21. Rental
  22. Repairs and maintenance- labor or labor and materials
  23. Repairs and maintenance- materials/supplies
  24. Representation and entertainment subject to limitation:
  1. ½ of 1% of net sales for seller of goods
  2. 1% of net revenue for seller of services
  1. Research and Development
  2. Royalties
  3. Salaries and allowances
  4. Security Services
  5. SSS, GSIS, PhilHealth, HDMF and other contributions
  6. Taxes and licenses
  7. Tolling fees
  8. Training and seminars
  9. Transportation and travel
  10. Pension Trust

Valid evidence to claim expenses

  • Official Receipts (OR)
  • Cash/Sales Invoice
  • Payroll
  • Vouchers
  • Bank Statements
  • Debit/Credit Memo

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