Treaty detail
United States - Philippines tax treaty
A practical treaty page built around the official treaty text, key withholding categories, permanent-establishment rules, and article-level summaries.
Signed
1976-10-01
Effective
1983-01-01
Articles seeded
6
Withholding snapshot
Dividends
Individual rate: 25% · Corporate rate: 20%
The Philippines treaty is one of the older U.S. treaties and applies relatively high dividend ceilings of 20 percent and 25 percent. The 20 percent rate generally depends on direct ownership of at least 10 percent of the voting stock, subject to article-level review.
Interest
Rate: 15%
IRS Treaty Table 1 reflects a general 15 percent ceiling, with a reduced 10 percent rate available for certain public-issue or bank-financing interest. Government and central-bank carve-outs may also apply.
Royalties
Rate: 25%
The Philippines treaty applies a general 25 percent royalty ceiling, with a reduced 15 percent rate available for film and tape rentals and a separate rate for certain qualifying categories. This is one of the highest royalty rates in current U.S. treaties.
Permanent establishment
Construction threshold: more than 6 months
The Philippines treaty contains older-style dependent-agent and habitual-stock-of-merchandise rules that can create PE exposure earlier than under more modern OECD-style treaties.
Other treaty flags
Pension treatment under this older treaty is article-specific. Government-service pensions and private pensions follow distinct paths, and practitioners should not assume parallel treatment with newer U.S. treaties.
Seeded article summaries
Article 4
Residence
Defines treaty residence and is the gateway to reduced withholding or treaty protection.
The residence article matters because the Philippines treaty pre-dates many modern OECD-style updates. The tie-breaker rules still apply, but practitioners should not assume the analysis parallels newer U.S. treaties.
Article 5
Permanent Establishment
Sets the business-presence threshold that permits source-country taxation of business profits.
The Philippines treaty includes a six-month threshold for construction and installation projects, which is short compared to many modern U.S. treaties. The treaty also includes service-PE and supervisory-activity rules that can create earlier source-country exposure.
Article 7
Business Profits
Generally reserves business profits to the residence state unless a permanent establishment exists in the other state.
This article is central for U.S. firms with Philippines operations or contractor relationships. The older treaty wording and shorter PE thresholds make the PE analysis under Article 5 unusually consequential before Article 7 protection can be claimed.
Article 10
Dividends
Provides treaty limits on source-country dividend withholding in qualifying cases.
The dividend article's 20 percent and 25 percent ceilings are higher than most modern U.S. treaties because this agreement dates to 1976. Practitioners should verify that no protocol or competent-authority guidance has altered the practical result for any particular fact pattern.
Article 11
Interest
Limits source-country withholding on qualifying interest.
Unlike many modern U.S. treaties, the Philippines treaty does not eliminate interest withholding outright. The 15 percent ceiling, with reduced 10 percent rates for certain public-issue or bank-financing interest, requires careful document review.
Article 12
Royalties
Limits source-country withholding on qualifying royalties.
The royalty article applies a relatively high 25 percent ceiling, with 15 percent for film and tape rentals. The high rates and the age of the treaty make the precise article categorization especially important for software, patent, and know-how payments.
Official text
Other treaties involving these jurisdictions
Computed from the cross-reference graph. Links open the related entity on this site.
This entry cites
- TreatyUS–GB treaty
- TreatyUS–CA treaty
- TreatyUS–DE treaty
- TreatyUS–FR treaty
- TreatyUS–JP treaty
- TreatyUS–NL treaty
- TreatyUS–AU treaty
- TreatyUS–KR treaty
Primary sources
- Philippines treaty documents pageVerified 2026-05-20
- Official U.S.-Philippines treaty PDFVerified 2026-05-20
- IRS Tax Treaty Table 1Verified 2026-05-20
- Treasury treaties in force listVerified 2026-05-20
Important disclaimer
This library is for general tax education only. Always verify filing obligations, due dates, and tax consequences against the cited primary source or with a qualified tax professional.