Capital Gains Tax Calculator Philippines [Fast & Accurate]

“Calculate Your Capital Gains Tax in Seconds – Simple, Fast, and Accurate!”

Capital Gains Tax Calculator

Welcome to the Philippines Capital Gains Tax Calculator, a tool designed to help you calculate the Capital Gains Tax (CGT) on the sale of real property or shares of stock in the Philippines.

Understanding and accurately calculating CGT is essential for compliance with tax laws and effective financial planning.

This calculator simplifies the process by allowing you to input relevant details about your transaction and instantly compute your tax liability.

How to Use the Capital Gains Tax Calculator

This calculator allows you to compute CGT for either real property or shares of stock. Follow these steps:

  1. Select Asset Type:
    • Choose “Real Property (Capital Asset)” if you are selling land or buildings not used in business.
    • Choose “Shares of Stock (Not Traded)” if you are selling shares of a domestic corporation not listed on the stock exchange.
  2. For Real Property:
    • Enter the Gross Selling Price (the total amount you are selling the property for).
    • Enter the Fair Market Value (FMV) as determined by the BIR.
    • Check the box if it is your Principal Residence and you plan to reinvest the proceeds in another principal residence within 18 months. If checked, CGT will be shown as 0 (assuming you meet the reinvestment condition).
  3. For Shares of Stock:
    • Enter the Selling Price (the total amount you are selling the shares for).
    • Enter the Cost Basis (the original cost or acquisition price of the shares). Ensure the selling price is greater than or equal to the cost basis, as a capital loss (cost basis exceeding selling price) results in no CGT.
  4. Calculate:
    • Click “Calculate” to see your Capital Gains Tax.
  5. Reset:
    • Click “Reset” to clear the inputs and start over.

Note: Ensure you have accurate values for FMV (for real property) and cost basis (for shares), as these are critical for correct tax calculation. For real property, FMV can be obtained from the BIR’s zonal value listings or through an appraisal.

How to Calculate Capital Gains Tax (CGT) in the Philippines

Example 1: Real Property

Suppose you sell a property for ₱5,000,000, and the fair market value (FMV) is ₱4,800,000. It is not your principal residence.

  • Gross Selling Price: ₱5,000,000
  • Fair Market Value: ₱4,800,000
  • Basis for CGT: max(₱5,000,000, ₱4,800,000) = ₱5,000,000
  • CGT = ₱5,000,000 × 0.06 = ₱300,000

Result: CGT = ₱300,000

Example 2: Shares of Stock (Within ₱100,000 Net Gain)

Suppose you sell shares for ₱150,000, and your cost basis is ₱50,000.

  • Selling Price: ₱150,000
  • Cost Basis: ₱50,000
  • Net Capital Gain: ₱150,000 – ₱50,000 = ₱100,000
  • CGT = ₱100,000 × 0.05 = ₱5,000

Result: CGT = ₱5,000

Example 3: Shares of Stock (Exceeding ₱100,000 Net Gain)

Suppose you sell shares for ₱250,000, and your cost basis is ₱50,000.

  • Selling Price: ₱250,000
  • Cost Basis: ₱50,000
  • Net Capital Gain: ₱250,000 – ₱50,000 = ₱200,000
  • CGT = (₱100,000 × 0.05) + (₱200,000 – ₱100,000) × 0.10 = ₱5,000 + ₱10,000 = ₱15,000

Result: CGT = ₱15,000

What is Capital Gains Tax?

Capital Gains Tax (CGT) is a tax imposed on the profits realized from the sale of capital assets. In the Philippines, CGT primarily applies to two types of assets:

  • Real Property: Land and buildings located in the Philippines, classified as capital assets (i.e., not used in trade or business).
  • Shares of Stock: Shares in a domestic corporation that are not listed or traded on the local stock exchange.

Capital Gains Tax on Real Property

For the sale of real property classified as a capital asset, a final CGT of 6% is imposed.

This tax is based on the higher of the gross selling price or the current fair market value (FMV) as determined by the Bureau of Internal Revenue (BIR).

Importantly, this tax is calculated on presumed gains, meaning it applies regardless of whether you actually made a profit from the sale. The formula is:

CGT = max(Gross Selling Price, FMV) × 0.06

Key Points:

  • Gross Selling Price: The total amount received from the sale of the property.
  • Fair Market Value (FMV): The value determined by the BIR, often based on zonal values or appraised values.
  • Exemptions: If the property sold is your principal residence and you reinvest the proceeds in another principal residence within 18 months from the date of sale, you may be exempt from CGT. However, you must comply with specific BIR requirements.
  • Sales to the government or its agencies may have different tax treatments, and you should consult the BIR or a tax professional for such cases.

Capital Gains Tax on Shares of Stock

For shares of stock not traded on the stock exchange, CGT is imposed on the net capital gains realized from the sale. The tax rates are as follows:

  • 5% on the first ₱100,000 of net capital gains.
  • 10% on any amount exceeding ₱100,000.

The formula for CGT on shares is:

CGT =
if net gain ≤ 100,000: net gain × 0.05
if net gain > 100,000: (100,000 × 0.05) + (net gain – 100,000) × 0.10

Key Points:

  • Net Capital Gain: The difference between the selling price and the cost basis (acquisition cost).
  • If the cost basis exceeds the selling price, you have a capital loss, and no CGT is applicable. However, capital losses may be used to offset other capital gains or carried over to future years, though this is beyond the scope of this calculator.

Important Notes

  • Real Property: CGT is based on presumed gains, so even if your actual gain is zero or negative, you still pay CGT based on the higher of the gross selling price or FMV, unless exempted (e.g., principal residence with reinvestment).
  • Shares of Stock: CGT applies only to net capital gains. If your cost basis exceeds the selling price, you have a capital loss, and no CGT is due. However, capital losses may be used to offset other capital gains or carried over to future years, but this is not calculated here.
  • Exemptions and Special Cases: For real property, exemptions may apply (e.g., principal residence with reinvestment). For shares, ensure they are not traded on the stock exchange; if they are, different tax rules apply.
  • Accuracy: Always use the latest FMV from the BIR for real property transactions. For shares, ensure you have accurate records of your cost basis.
  • Consult a Professional: This calculator is for informational purposes only. For complex transactions or specific questions, consult a qualified tax professional or refer to the latest issuances from the Bureau of Internal Revenue (BIR).