Most people working overseas need to remit money to their relatives regularly for their expenses. If you are a Filipino working in Malaysia, you must be doing the same. However, it is essential to understand the tax consequences of sending money to the Philippines.
Tax implications for money transfer to the Philippines from Malaysia
Here are the different things you need to keep in mind regarding money transfers to the Philippines.
- Income tax
Money transfer to the Philippines is subject to income tax. The amount of tax depends on several factors, including the amount that you send. The recipient who receives the remittance needs to pay a tax between 5% and 33%, as the government considers that money as income.
- Capital gains tax
If you’re not aware of what capital gains tax is, it is a tax on the profits from an investment. That means if you’ve been earning interest from your savings account, or stocks and bonds, those earnings are subject to capital gains tax of 30%.
- Estate tax
The money that you send to the Philippines is subject to estate tax. It is a tax imposed on the value of your property after death. If you die without a will, the relevant laws of the Philippines will apply to divide the property among your next kin. You can state how your estate will be divided if you have a will.
- Gift tax
If you remit money to the Philippines, you should be aware of the gift tax. If a Filipino receives gifts of above PHP 500,000 in a year, they should pay a donor’s tax of 6%.
If you want to send money to your relatives or friends, you will probably be having a bunch of questions. Most people don’t know where and how to send money to others. If you are in the same situation, don’t worry as we bring you this guide on how to remit money.
- Using bank transfers
If you’re looking for an easy way to remit money to your loved ones, you can do it by using an international bank transfer. You can transfer money from one bank account to another through wire transfers or ACH (Automated Clearing House) transactions. An international bank transfer has charges and service fees that can be expensive.
- Using e-wallets
E-wallets are a great way to send money to other people. They allow you to pay for things online without having to use your bank account or credit card. You simply load money into the account and then use it however you want.
- Using money transfer service providers
If you’re looking for a quick, easy way to send money to your loved ones, the best option is to use a service provider. These companies have been in the business for years and have the infrastructure in place to make sending money quickly and easily, look for a reliable money transfer agency. Keep in mind to check the latest MYR to PHP rates before transferring the money.
Choosing the best money transfer company in Malaysia
Services related to money transfers in Malaysia are increasingly becoming a necessity in this day and age. As such, there are now many different options available to you when it comes to choosing a money transfer company.
If you are looking for an easy way to money transfer in Malaysia, you need to look at the following factors:
Is there a fee for online money transfer? Are there any hidden charges? What about exchange rates?
How long will it take for your online money transfer to arrive at its destination?
Are your funds safe when they are being transferred? Will you be able to track where your money is at all times?