FAST FACTS: Avoiding double taxation for nonresidents
The Philippines is currently a signatory to 41 tax treaties that address double taxation situations.
MANILA, Philippines – According to Philippine law, nonresidents with income sources in the Philippines are required to file taxes.
For these individuals who reside in a different country but receive income from the Philippines, double taxation could occur.
The Philippines is, however, currently a signatory to 41 tax treaties, that address double taxation situations.
These treaties outline provisions for nonresidents with income sources in the Philippines, and specify certain types of income that may be subject to tax relief.
Under these specific agreements, tax relief can come in the form of tax exemption or lower preferential tax rates.
Tax exempt sources may include income for:
- Teachers
- Artists
- Athletes
- Trainees
- Students
- Researchers
- Director’s fees
- Government services
- Personal services
- Pensions
- Gains from sales of shares or alienation of property
- Independent personal services not rendered for more than 183 days
Preferential tax rates may also be applied on:
- Dividends
- Interests
- Royalties
- Shipping and air transport
The following is a list of countries with double taxation agreements with the Philippines, according to the Bureau of Internal Revenue (BIR).
COUNTRY DATE OF EFFECTIVITY
Australia January 1, 1980
Austria January 1, 1983
Bahrain January 1, 2004
Bangladesh January 1, 2004
Belgium January 1, 1981
Brazil January 1, 1992
Canada January 1, 1977
China January 1, 2002
Czech Republic January 1, 2004
Denmark January 1, 1998
Finland January 1, 1982
France January 1, 1978
Germany January 1, 2016
Hungary January 1, 1998
India January 1, 1995
Indonesia January 1, 1983
Israel January 1, 1997
Italy January 1, 1990
Japan January 1, 1981
Korea January 1, 1987
Kuwait January 1, 2014
Malaysia January 1, 1985
Netherlands January 1, 1992
New Zealand January 1, 1981
Nigeria January 1, 2014
Norway January 1, 1998
Pakistan January 1, 1979
Poland January 1, 1998
Qatar January 1, 2016
Romania January 1, 1998
Russia January 1, 1998
Singapore January 1, 1997
Spain January 1, 1994
Sweden January 1, 2004
Switzerland January 1, 2002
Thailand January 1, 1983
Turkey January 1, 2016
United Arab Emirates January 1, 2009
United Kingdom of Great Britain and Northern Ireland January 1, 1979
United States of America January 1, 1983
Vietnam January 1, 2004
Tax relief is not automatic. Tax treaty relief applications must be submitted to the International Tax Affairs Division of the BIR.
Guidelines and procedures from the BIR can be found here.
