Philippines – United States Tax Treaty
The Philippines-United States tax treaty caps withholding on dividends at 25% for portfolio investors and 20% for qualifying direct investment, and interest at 15%. Royalties are taxed at a uniform 15% across all categories. Pension distributions are subject to 30% withholding at source. This is one of 28 active treaties in Philippines's network and one of 64 in United States's. The general dividend rate of 25% is above the median in both countries' networks (Philippines: 15%, United States: 15%).
Verified data
IRS Table 1 - Tax Rates on Income Other Than Personal Service Income (Rev. May 2023)
Withholding Rate Summary
Source: IRS Table 1 (Withholding Rates)| Income Type | Treaty Rate | Statutory Rate (United States) |
|---|---|---|
| Dividends (general) Portfolio investors | 25%saves 5% | 30% |
| Dividends (qualified) Beneficial owner is a company holding >= 10% of voting stock | 20%saves 10% | 30% |
| Interest Bank interest, bonds, loans | 15%saves 15% | 30% |
| Royalties (avg) Patents, copyright, know-how, film/TV | 15% | — |
| Pensions Private pension distributions | 30% | — |
| Social Security Government social security benefits | 30% | — |
“Treaty Rate” is the maximum withholding permitted under this treaty. The actual effective rate may be lower if domestic law provides a more favorable rate independently. “Statutory Rate (United States)” shows the rate that applies when no treaty benefit is claimed. Qualified dividend rate requires: Beneficial owner is a company holding >= 10% of voting stock.
Dividends
The general dividend rate of 25% applies to portfolio investors. A reduced rate of 20% is available when beneficial owner is a company holding >= 10% of voting stock. Without the treaty, the statutory withholding rate on dividends is 30%.
Source: IRS Table 1 (Withholding Rates)
Interest
Interest payments (bank interest, bonds, loans) are subject to 15% withholding under this treaty, compared to the 30% statutory rate. This represents a 15% reduction from the statutory rate.
Source: IRS Table 1 (Withholding Rates)
Royalties
Royalty withholding rates vary by the type of intellectual property. This treaty distinguishes 4 categories, with rates ranging from 15% to 15%.
Source: IRS Table 1 (Withholding Rates)
Pensions & Social Security
Private pension distributions are subject to 30% withholding at source under this treaty. Government social security benefits are subject to 30% withholding.
Source: IRS Table 1 (Withholding Rates)
Comparative Context
🇵🇭Philippines's Network
Among Philippines's 28 active treaty partners, the 25% general dividend rate ranks 28th (median: 15%).
| Partner | Rate |
|---|---|
| South Korea | 25% |
| Malaysia | 25% |
| Singapore | 25% |
| United States (this treaty) | 25% |
🇺🇸United States's Network
Among United States's 64 active treaty partners, the 25% general dividend rate ranks 61th (median: 15%).
| Partner | Rate |
|---|---|
| Turkey | 20% |
| Israel | 25% |
| India | 25% |
| Philippines (this treaty) | 25% |
| Greece | 30% |
| Pakistan | 30% |
| Trinidad and Tobago | 30% |