FAST FACTS: Avoiding double taxation for nonresidents
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:
- Director's fees
- Government services
- Personal services
- 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:
- 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). Click on each country to find out what specific taxes may be subject to relief:
|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. – Rappler.com
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