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6.3. Deduction of Cross-Border Payments and Non-Deductible Expenses

The following are not deductible for Philippine tax purposes:

  • Dividends
  • Philippine corporate income tax
  • Foreign income taxes, unless the taxpayer elects to take a deduction in lieu of a foreign tax credit
  • Estate and donor’s taxes, and taxes assessed against local benefits of a kind that increase the value of the property assessed
  • Entertainment, amusement and recreation expenses in excess of 0.5% of net sales for sales of goods, and 1% of net revenue for sales of services
  • Bribes, kickbacks and similar payments
  • Interest costs incurred to finance petroleum exploration
  • Premiums on life insurance policies on the life of an officer or employee if the company is a direct or indirect beneficiary