Philippines

Corporate - Withholding taxes

Last reviewed - 31 December 2019

Corporations and individuals engaged in business are required to withhold the appropriate tax on income payments to non-residents, generally at the rate of 30% in the case of payments to non-resident foreign corporations or 25% for non-resident aliens not engaged in trade or business (see the Income determination section for discussions about WHT on resident corporations). 

Tax treaty rates

For countries with which the Philippines has concluded tax treaties, the maximum rates of taxes to be withheld are as follows:

As of 9 September 2019:

Recipient WHT (%)
Dividends (1) Interest (2) Royalties
Non-treaty 15/30 (12) 20 30
Treaty:      
Australia 15/25 (3, 4) 10/15 (5) 15/25 (6)
Austria 10/25 (7) 10/15 (5, 8) 10/15 (6, 9)
Bahrain 10/15 (7) 10 10/15 (10)
Bangladesh 10/15 (11) 15 15
Belgium 10/15 (7) 10 15
Brazil 15/25 (25) 10/15 (5) 15/25 (6)
Canada 15/25 (3, 7) 10/15 (5) 25 (9)
China, People's Republic of 10/15 (7) 10 10/15 (13)
Czech Republic 10/15 (7) 10 10/15 (14)
Denmark 10/15 (11) 10 15
Finland 15 (3, 7) 10/15 (5) 15/25 (15)
France 10/15 (3, 7) 10/15 (5) 15
Germany 5/10/15 (11, 24) 10 10
Hungary 15/20 (3, 11) 15 15 (9)
India 15/20 (3, 7) 10/15 (5, 17) 15
Indonesia 15/20 (3, 11) 10/15 (5) 15/25 (6)
Israel 10/15 (7) 10 15 (9)
Italy 15 10/15 (5) 15/25 (6, 18)
Japan 10/15 (3, 7) 10 10/15 (19)
Korea, Republic of 10/25 (11) 10/15 (5) 10/15 (6)
Kuwait 10/15 (7) 10 20
Malaysia 15/25 (26) 15 15/25 (6, 18)
Mexico 5/10/15 (7, 24) 12.5 15
Netherlands 10/15 (7) 10/15 (5, 16, 17) 10/15 (6)
New Zealand 15 10 (5) 15
Nigeria 12.5/15 (11) 10 20
Norway 15/25 (3, 7) 15 7.5/10/25 (9, 20)
Pakistan 15/25 (3, 11) 10/15 (5) 15/25 (6)
Poland 10/15 (11) 10 15
Qatar 10/15 (7) 10 15
Romania 10/15 (11) 10/15 (5, 16, 17) 10/15/25 (21)
Russia 15 15 15
Singapore 15/25 (3, 22) 10/15 (5) 15/25 (6, 18)
Spain 10/15 (7) 10/15 (5, 16) 10/15/20 (23)
Sri Lanka 15/25 (26) 15 15/25 (6)
Sweden 10/15 (11) 10 15
Switzerland 10/15 (7) 10 15
Thailand 10/15 (11) 10/15 (27) 15
Turkey 10/15 (11) 10 10/15 (13, 19)
United Arab Emirates 10/15 (7) 10 10
United Kingdom 15/25 (3, 7) 10/15 (5) 15/25 (6, 19)
United States 20/25 (3, 7) 10/15 (5) 15/25 (6, 9)
Vietnam 10/15 (11) 15 15

Notes

  1. The lower rate generally applies if the beneficial owner of the dividends is a company with a substantial ownership in the dividend paying company.
  2. Interest derived by a foreign government or its agencies is typically exempt from Philippine tax. Many treaties also contain special rules for both Philippine and home country taxation of interest paid on instruments secured by a government agency of one of the countries. Such provisions have been excluded from the analysis.
  3. A 15% rate applies under domestic law if the home country exempts the dividend from tax or permits a 15% or greater credit for corporate taxes paid by the company paying the dividend.
  4. Entitlement to the lower rate depends on how the dividend will be taxed in Australia.
  5. The 10% rate applies to interest paid in respect of the public issues of bonds, debentures, or similar obligations.
  6. The lower rate applies to royalties paid by an enterprise registered with the Philippine BOI and engaged in preferred areas of activity.
  7. The threshold for substantial ownership is 10%.
  8. The 10% rate also applies to interest paid by a company registered with the BOI and engaged in preferred pioneer areas of investment in the Philippines.
  9. The treaty also contains a most-favoured-nation rule, limiting the Philippine tax on royalties to the lowest rate of Philippine tax that may be imposed on royalties of the same kind paid in similar circumstances to a resident of a third state.
  10. The 15% rate applies to royalties arising from the use of, or the right to use, any copyright of literary, artistic, or scientific work including cinematograph films or tapes for television or broadcasting.
  11. The threshold for substantial ownership is 25%.
  12. For a description of when each rate applies, see Dividend income in the Income determination section.
  13. The 10% rate applies to the use of, or the right to use, any patent, trademark, design or model, plan, secret formula or process, or from the use of, or the right to use, industrial, commercial, or scientific equipment, or for information concerning industrial, commercial, or scientific experience. Strictly, application of the rate is generally at the discretion of the Philippine Competent Authorities, but the BIR has never raised this as an issue.
  14. The 10% rate applies to royalties arising from the use of, or the right to use, any copyright of literary, artistic, or scientific work (other than copyright of cinematograph films), any patent, trademark, design or model, plan, secret formula or process, or from the use of, or the right to use, industrial, commercial, or scientific equipment, or for information concerning industrial, commercial, or scientific experience.
  15. The 15% rate applies to royalties paid by an enterprise registered and engaged in preferred areas of activities, and to royalties in respect of cinematographic films or tapes for television or broadcasting, and for the use of, or the right to use, any copyright. The 25% rate applies to other royalties.
  16. The 10% rate also applies to interest paid in connection with the sale on credit of any industrial, commercial, or scientific equipment.
  17. The 10% rate also applies to interest paid on any loans granted by a bank.
  18. The 15% rate also applies to royalties in respect of cinematographic films or tapes for television or broadcasting.
  19. The 15% rate applies to royalties paid for the use of, or the right to use, cinematographic films and films or tapes for radio or television broadcasting.
  20. The 7.5% rate applies to the lease of containers. The 10% rate applies to royalties paid by an enterprise registered with the BOI. The 25% rate applies to other royalties.
  21. The 10% rate applies to royalties paid by an enterprise registered with the BOI and engaged in preferred pioneer areas of activity. The 15% rate applies to rentals from cinematographic films and tapes for television or broadcasting. The 25% rate applies to all other royalties.
  22. The threshold for substantial ownership is 15%.
  23. The 10% rate applies to royalties paid by an enterprise registered with the BOI and engaged in preferred pioneer areas of activity. The 20% rate applies to rentals from cinematographic films and tapes for television or broadcasting. The 15% rate applies to all other royalties.
  24. The threshold for substantial ownership is 70% for the 5% rate to apply.
  25. The 15% rate applies if the recipient is a company, including a partnership.
  26. The 15% rate applies if the recipient is a company.
  27. The lower rate applies to interests received by a financial institution, including an insurance company.