SolvedDT15302 | Double Taxation Relief Manual: Philippines: treaty summary
From HM Revenue & Customs · Double Taxation Relief Manual
The table summarises the provisions of the treaty as they relate to income beneficially owned by UK residents. The rate shown is the ‘treaty rate’ and does not reflect taxes chargeable under domestic law before relief is given under the provisions of the treaty. The ‘treaty rate’ is the maximum rate at which Philippines is permitted to tax income in the relevant categories under the treaty. Rates chargeable under domestic law may be higher or lower.
In all cases other conditions for relief (e.g. beneficial ownership) will have to be met before relief is due under the treaty. The text of the treaty itself should be consulted for the full details. The text of the treaty can be found on gov.uk.
| Subject | Comments | Article |
|---|---|---|
| Portfolio dividends | 25% | Article 9 |
| Dividends on direct investments | 15% (note 1) | Article 9 |
| Conditions for lower rate on dividends on direct investments | The beneficial owner controls directly or indirectly at least 10% of the voting power of the company paying the dividends | Article 9 |
| Property income dividends | 25% | Article 9 |
| Interest | 15 %( note 2) | Article 10 |
| Royalties | 25% ( note 3) | Article 11 |
| Government pensions | A UK resident in receipt of a Philippines Government pension is taxable solely by the Philippines | Article 18 |
| Other pensions | Pension income received by UK residents from the Philippines is taxable solely in the UK | Article 17 |
| Arbitration | No | N/A |
Note 1: The reduction to the above rates is not given if the dividends are effectively connected with a trade or business carried on through a permanent establishment in, or the performance of professional services from a fixed base in, the Philippines.
Note 2: The tax charged in the Contracting State in which the interest arises shall not exceed 10% of the gross amount of the interest if the interest is paid by a company in respect of the public issue of bonds, debentures or similar obligations. Notwithstanding the provisions of paragraphs (2) and (3) of this Article interest arising in a Contracting State shall be exempt from tax in that State if it is derived and beneficially owned by:
· the Government of the other Contracting State, a political subdivision or local authority thereof or an instrumentality of that other State; or
· a resident of the other Contracting State in respect of a loan made, guaranteed or insured by such instrumentality of that other State as is specified and agreed in letters exchanged between the competent authorities of the Contracting States
Note 3: Royalties may be taxed in the UK and in the Philippines, however the tax so charged shall not exceed 15% of the gross amount of the royalties, where the royalties are paid
· by an enterprise registered with the Philippine Board of Investments and engaged in preferred areas of activity; or
· in respect of cinematograph films and films or tapes for television or radio broadcasting.