Double Tax Treaties in the Philippines

Updated on Wednesday 15th November 2017

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Among the reasons for which foreign enterprisers open companies in the Philippines are the taxation system and the legislation which favors foreign direct investments put in place by the government. With respect to the taxation system, the Philippines imposes a corporate tax rate of 30%, however this can be significantly reduced. Also, foreign companies with branch offices in the Philippines can benefit from other exemptions granted under the country’s double taxation agreements.

At the moment, the Philippines has signed around 40 double taxation treaties with countries all over the world. You can obtain more information on the taxation system from our Philippines company registration consultants.
 

The benefits granted under the Philippines’ double tax treaties

The Philippines has signed various treaties through which the taxation of certain incomes twice is avoided. These incomes must be obtained by non-residents carrying out activities in the Philippines, branch offices of foreign companies included. This is the most important provision contained by all the Philippines’ double tax treaties.

Following this, each agreement contains specific provisions related to the tax deductions, exemptions and tax reliefs which will be provided under certain circumstances. Most of the double taxation treaties signed by the Philippines include special provisions related to the taxation of:

-          dividend payments;
-          interest payments;
-          royalties payments;
-          international air transportation and shipping services.

Our company formation agents in the Philippines can assist foreign companies seeking to establish branch offices in this country.
 

Countries with which the Philippines has signed double tax agreements

The oldest double taxation treaty the Philippines signed is the one with Canada which dates back in 1977. The Philippines has signed double taxation conventions with countries with which it has important economic ties, favoring foreign investors who open companies here. Among these countries are:

-          Belgium, the Czech Republic, Denmark, Germany, France, Finland and Hungary in Europe;
-          India, South Korea, China, Indonesia, Singapore, Vietnam and the UAE in Asia and the Middle East;
-          the United States of America, Brazil and Australia in other parts of the world.

For full information on the taxation system applicable in this country and assistance in starting a business here, please contact our Philippines company formation experts.
 

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