1. What is Real Estate Commission Tax?

In the Philippines, real estate agents and brokers are subject to two main taxes on their commissions: Creditable Withholding Tax (CWT) ranging from 1.5% to 6%, and Value Added Tax (VAT) at 12%. This calculator helps determine the total tax burden on real estate commissions.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( Commission \) — Gross commission amount in PHP
• \( Tax\ Rate \) — Creditable Withholding Tax rate (1.5%-6%)
• \( VAT \) — 12% of the commission amount

Explanation: The calculator first computes the CWT (percentage of commission), then adds the VAT amount (another percentage of commission) to get the total tax due.

3. Philippine Tax Regulations

Details: According to BIR regulations, real estate professionals must pay:

• 1.5% CWT for sales of residential properties valued ≤ PHP 3,199,200
• 3% CWT for sales of residential properties valued > PHP 3,199,200
• 5% CWT for sales of commercial properties
• 6% CWT for sales of vacant lots
• 12% VAT on all commissions for VAT-registered professionals

4. Using the Calculator

Tips: Enter your gross commission amount, select the appropriate CWT rate based on property type, and the calculator will show your tax obligations and net income after taxes.

5. Frequently Asked Questions (FAQ)

Q1: Who is required to pay these taxes?
A: All licensed real estate brokers and salespersons earning commissions in the Philippines.

Q2: What's the difference between CWT and VAT?
A: CWT is income tax withheld at source, while VAT is a consumption tax on services rendered.

Q3: Can I claim the CWT as tax credit?
A: Yes, the CWT can be credited against your annual income tax liability.

Q4: Are there exemptions to these taxes?
A: Non-VAT registered professionals earning below the threshold only pay CWT but not VAT.

Q5: When are these taxes due?
A: CWT is remitted monthly, while VAT is filed quarterly with the BIR.