DT15302 - Philippines: Treaty summary - HMRC internal manual - GOV.UK

DT15302 - Philippines: Treaty summary The table summarises the provisions of the treaty as theyrelate to income beneficially owned by UK residents. The rate shown is the‘treaty rate’ and

does not reflect taxes chargeable under domestic law beforerelief is given under the provisions of the treaty. The ‘treaty rate’ is themaximum rate at which Philippines is permitted to tax

income in the relevantcategories under the treaty. Rates chargeable under domestic law may be higheror lower.

In all cases other conditions for relief (e.g. beneficialownership) will have to be met before relief is due under the treaty. The textof the treaty itself should be consulted for the full

details. The text of thetreaty 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: Thereduction to the above rates is not given if the dividends are effectivelyconnected with a trade or business carried on through a permanent establishmentin, or the performance of

professional services from a fixed base in, thePhilippines.

Note2:  The tax charged in the ContractingState in which the interest arises shall not exceed 10%  of the gross amount of the interest if theinterest 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 beexempt from

tax in that State if it is derived and beneficially owned by:

·        theGovernment of the other Contracting State, a political subdivision or localauthority thereof or an instrumentality of that other State; or    

·        aresident of the other Contracting State in respect of a loan made, guaranteedor insured by such instrumentality of that other State as is specified andagreed in letters exchanged

between the competent authorities of theContracting States

 Note 3: Royaltiesmay be taxed in the UK and in the Philippines, however the tax so charged shallnot exceed 15%  of the gross amount ofthe royalties, where the royalties are paid

·        by anenterprise registered with the Philippine Board of Investments and engaged inpreferred areas of activity; or     

·        inrespect of cinematograph films and films or tapes for television or radiobroadcasting.

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