Date de publication : 06-10-1907
The following information are for the sole purpose of providing a general overview of the local taxation of the Corporate tax aspects of the country. In any case, it can not replace a tax advice, or be considered as an official information.
Yes we tax in Philippines
New tax reform: No specific information
New tax treaties:
- Tax treaty between Philippines and Singapore is under negotiation.
- Tax treaty between Philippines and Qatar enters into force
Local tax advisors
No specific information on the local tax advisors.
Local tax administration
There is no definition of Permanent Establishment under the local legislation.
Resident companies are taxed on their worldwide income. However, non-resident companies are only taxed on their revenues derived from Philippines sources.
Entities are considered to be resident for tax purposes in Philippines if their place of registration is in Philippines.
Note: the definitions of permanent establishment and place of residence are subject to the relevant provisions of any applicable double tax treaty, if any.
Corporate Income Tax
The general CIT tax rate is 30%.
Note: there is a minimum tax in case the CIT is less than 2% of the gross revenue.
Non-deductible expenses includes the following:
- Dividends benefiting from the participation exemption
Carry forward : Yes 3 years, but some restrictions may apply.
Carry back: No
Companies should submit 4 tax returns: 3 on the first three quarters of the tax year and the final tax return within the 15th of April of the following year.
Annual tax returns are established by the company on a self-assessment system.
Companies shall pay advance payments at the time of filing tax returns.
Whithholding Taxes (payment to foreign companies)
The local tax rates in Philippines are the following, subject to the provisions of an applicable double tax treaty, if any.
There is a 15% WHT on the profits paid from a branch to its foreign head office.
The general rate of WHT on dividends is 30% of the gross amount.
The general rate of WHT on interest is 30%.
The general rate of WHT on Royalties is 30%.
The general rate of WHT on management fees is 30%.
The general rate of WHT on technical services is 30%.
Note: technical fees are considered as Royalties under the local legislation
Generally, capital gains are taxed under the regular CIT as general income.
Note: capital gains deriving from qualifying participations are exempt under the participation exemption.
Standard VAT tax rate is 12%
Zero-rated supplies include, subject to certain conditions:
- exports of goods;
- Vessels and Aircraft engaged in commercial international traffic;
- Services related to zero-rated vessels and Aircraft;
- transport of goods and services directly related to import and export of goods;
- Passenger transportation.
Exempt supplies include, subject to certain conditions:
- Certain financial services
- Training and education
Note: exempt transactions differ from zero-rated transactions in that the input VAT associated with exempt transactions is not deductible.
There is no refunds for non-resident companies.
No other specific information of VAT in Philippines.
The general statute of limitation is 3 years starting at the end of the year in which the tax return was filed and 5 years in case where there is no tax return.
There is a foreign exchange control in Philippines, however there is no restriction to the repatriation of capital.
There are no thin capitalization rules in Philippines.
Do not hesitate to share your experience in Philippines with us in the comments below. Any comments are welcome !
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