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Philippines - Czech Republic — Orbitax Withholding Tax Rates

Capital Gains

  • Best Rates0%
  • Domestic Rates 15%
  • Treaty Rates0%
  • EU Rates-

Domestic

Effective 12 April 2021, tax is withheld at the rate of 15% on capital gains arising to non-resident corporates from the sale of shares not traded on the stock exchange (increased from the 5%/10% progressive rates).

Dividend

  • Best Rates10%
  • Domestic Rates 25%
  • Treaty Rates10%
  • EU Rates-

Domestic

Effective 1 January 2021, tax is withheld at the rate of 25% on dividends paid to non-resident corporate recipients (30% previously). However, the rate is reduced to 15% if the country in which the recipient is domiciled either (a) does not tax the dividends received, or (b) allows a deemed-paid tax credit of at least 10% (i.e., calculated as the difference between the standard corporate tax rate of 25% and the 15% tax rate on inter-corporate dividends).

Treaty

10%:15% The 10% rate generally applies with respect to participations of at least 10% of capital or voting power, as the case may be.

Interest

  • Best Rates10%
  • Domestic Rates 20%
  • Treaty Rates10%
  • EU Rates-

Domestic

Tax is withheld at the rate of 20% on interest paid to non-resident corporate recipients.

A reduced withholding tax rate of 10% applies on interest paid to Offshore Banking Units (OBUs) and Foreign Currency Deposits Units (FCDUs) in relation to foreign currency transactions or loans.

Treaty

10%

Royalty - Copyright

  • Best Rates10%
  • Domestic Rates 25%
  • Treaty Rates10%
  • EU Rates-

Domestic

Effective 1 January 2021, tax is withheld at the rate of 25% on royalties paid to non-resident corporate recipients (30% previously).

Treaty

10%:15% The 10% rate applies to royalties arising from the use of, or the right to use, any copyright of literary, artistic or scientific work, any patent, trade mark, 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% applies to royalties arising from the use of, or the right to use, any copyright of cinematographic films, and films or tapes for television or radio broadcasting.

Royalty - Patent

  • Best Rates10%
  • Domestic Rates 25%
  • Treaty Rates10%
  • EU Rates-

Domestic

Effective 1 January 2021, tax is withheld at the rate of 25% on royalties paid to non-resident corporate recipients (30% previously).

Treaty

10%:15% The 10% rate applies to royalties arising from the use of, or the right to use, any copyright of literary, artistic or scientific work, any patent, trade mark, 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% applies to royalties arising from the use of, or the right to use, any copyright of cinematographic films, and films or tapes for television or radio broadcasting.

Royalty - Trademark

  • Best Rates10%
  • Domestic Rates 25%
  • Treaty Rates10%
  • EU Rates-

Domestic

Effective 1 January 2021, tax is withheld at the rate of 25% on royalties paid to non-resident corporate recipients (30% previously).

Treaty

10%:15% The 10% rate applies to royalties arising from the use of, or the right to use, any copyright of literary, artistic or scientific work, any patent, trade mark, 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% applies to royalties arising from the use of, or the right to use, any copyright of cinematographic films, and films or tapes for television or radio broadcasting.

Sales

  • Best Rates0%
  • Domestic Rates 0%
  • Treaty Rates0%
  • EU Rates-

Service - Management

  • Best Rates0%
  • Domestic Rates 25%
  • Treaty Rates0%
  • EU Rates-

Domestic

Tax is withheld at the rate of 25% on management service fees paid to non-resident corporate recipients for services materially rendered in the Philippines (30% previously). The question as to whether services delivered online or digitally may be deemed to be rendered abroad (and thus not subject to withholding tax in the Philippines) is disputed. However, an old ruling from the tax authority seems to suggest that management services so delivered should be treated as rendered outside the Philippines.

Treaty

The treaty does not specifically deal with technical, management and similar service fees. In line with the OECD Model, this means that said services do not fall under the royalty article and do not attract the royalty withholding tax provided for under the treaty unless the services represent a minor part of a commingled transaction imparting in essence know-how. In that case, the services would follow the qualification of the principal component of the transaction, and may then attract the royalty withholding tax under the treaty. Otherwise, said services may be taxed in the source country only if the recipient has therein a (services) PE and the fees are attributable to that PE. Note, however, that not all countries would adhere to the OECD standpoint. ORBITAX has by default opted for the OECD position and the withholding tax rate is by default set to zero where the treaty does not specifically deal with technical, management and similar service fees. Where the relevant country has a developed policy regarding the treatment of technical, management and similar service fees and the correlation between those and royalties, ORBITAX has sought to cover this in Sec. 5.6. of the country chapters (Qualification of Specific Income Categories for Tax Purposes). For a technical analysis of the issue of services Vs. royalties, ##HowToReadTreatyLink##. For a quick reference as to whether any of a selection of some 350 widely-used tax treaties specifically addresses technical service fees, ORBITAX has developed a proprietary Treaty Analysis allowing you to quickly and easily capture the most salient features of the relevant treaty. In order to access the Treaty Analysis of a particular bilateral tax treaty, select the pair of countries under the Treaties Tab.

Service - Technical

  • Best Rates0%
  • Domestic Rates 25%
  • Treaty Rates0%
  • EU Rates-

Domestic

Technical service fees are not subject to withholding tax in the Philippines unless they fall under the definition of royalties. If they do, then they are treated similarly to royalties for withholding tax purposes. Note that technical service fees may be characterized as business profits under some of the tax treaties entered into by the Philippines. In that case, the fees would be taxable in the Philippines only if attributable to a permanent establishment therein.

Treaty

The treaty does not specifically deal with technical, management and similar service fees. In line with the OECD Model, this means that said services do not fall under the royalty article and do not attract the royalty withholding tax provided for under the treaty unless the services represent a minor part of a commingled transaction imparting in essence know-how. In that case, the services would follow the qualification of the principal component of the transaction, and may then attract the royalty withholding tax under the treaty. Otherwise, said services may be taxed in the source country only if the recipient has therein a (services) PE and the fees are attributable to that PE. Note, however, that not all countries would adhere to the OECD standpoint. ORBITAX has by default opted for the OECD position and the withholding tax rate is by default set to zero where the treaty does not specifically deal with technical, management and similar service fees. Where the relevant country has a developed policy regarding the treatment of technical, management and similar service fees and the correlation between those and royalties, ORBITAX has sought to cover this in Sec. 5.6. of the country chapters (Qualification of Specific Income Categories for Tax Purposes). For a technical analysis of the issue of services Vs. royalties, ##HowToReadTreatyLink##. For a quick reference as to whether any of a selection of some 350 widely-used tax treaties specifically addresses technical service fees, ORBITAX has developed a proprietary Treaty Analysis allowing you to quickly and easily capture the most salient features of the relevant treaty. In order to access the Treaty Analysis of a particular bilateral tax treaty, select the pair of countries under the Treaties Tab.

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