Stock Transaction Tax drops from 0.6% to 0.1% this July

Republic Act No. 12214 is now official. Dubbed the Capital Markets Efficiency Promotion Act (CMEPA), this law cuts down taxes on stock trades and investments to make the Philippine market more attractive—both for local investors and foreigners.

Here’s the gist: Stock transaction tax is slashed from 0.6% to 0.1%. That’s a big deal for anyone trading regularly. Interest income from most financial instruments is now taxed at a flat 20%, so it’s simpler and more transparent. Capital gains tax on shares in foreign companies is set at 15%. Plus, documentary stamp tax on new share issuances drops to 0.75%. If you’re into mutual funds or UITFs, those are now exempt from this tax.

For those saving up for retirement, employers get a 50% extra tax deduction for matching PERA contributions. All these changes kick in starting July 1, 2025.

Bottom line: Lower taxes, less red tape, and more reasons to invest. This move should boost trading activity, deepen market liquidity, and make investing in the Philippines more competitive and inclusive. Let’s see how this plays out for everyone looking to grow their money in the local market.

However, while the STT is reduced, the Bureau of Internal Revenue (BIR) is also imposing the same rate on domestic shares listed on foreign stock exchanges, which were previously exempt.

We also receive multiple reports from several institutions regarding this.

PSE Memorandum

Further to PSE Memorandum CN-No. 2025-0026 dated June 11, 2025, please be informed that Republic Act No. 12214, otherwise known as CMEPA, was published in Manila Bulletin on June 4, 2025 and in the physical copy of the Official Gazette on June 9, 2025.

As mentioned in PSE Memorandum CN-No. 2025-0026, the stock transaction tax (“STT”) was decreased from six-tenths of one percent (6/10 of 1%) to one-tenths of one percent (1/10 of 1%) of the gross selling price or gross value in money of the shares of stock sold, exchanged, or otherwise disposed. The new STT rate shall apply to transactions through the Exchange made on July 1, 2025 onwards.

For your information and guidance.

(Original signed)
Ramon S. Monzon
President and CEO

Security Bank Equities

Notice of PH Lower STT from 0.60% to 0.10% beginning July 1, 2025

SB Equities Inc.
Jun 28, 2025, 8:00 AM

Dear Valued Client:

Good day.

Republic Act No. 12214, or the Capital Markets Efficiency Promotion Act (CMEPA), was signed into law by President Ferdinand Marcos Jr. on May 29, 2025. CMEPA is a tax reform that brings the Philippines in line with global practices, resulting in a streamlined, more predictable tax regime.

As such, and in compliance with the attached PSE Memo, please note that beginning July 1, 2025, the Stock Transaction Tax on your equities selling transactions will be lowered from 0.60% to 0.10% of your selling proceeds. This new tax rate is 83% Lower, leaving you with more proceeds from the sale of your securities.

Thank you.

AB Capital

Dear Valued Client,

Great news! Just as we shared in our previous update, the Stock Transaction Tax (STT) cut is now confirmed and officially taking effect on July 1, 2025!

What this means for you:

When you sell listed shares starting July 1, the STT will be reduced from 0.6% to 0.1%.

That’s just ₱1 in tax for every ₱1,000 sold, instead of ₱6, an 83% drop in trading tax!

We’re excited to help you make the most of this change. If you have any questions, feel free to reach out to your relationship manager or investment representative.

Here’s to smarter, more rewarding investing!

AB Capital Securities, Inc.
Helping you trade smarter.