Procedure for Claiming Tax Treaty Benefits for Dividend, Interest and Royalty Income of Nonresident Income Earners

June 23, 2016 REVENUE MEMORANDUM ORDER NO. 027-16 SUBJECT : Procedure for Claiming Tax Treaty Benefits for Dividend, Interest and Royalty Income of Nonresident Income Earners TO : All Internal Revenue Officers and Others Concerned SECTION 1. Background. The Philippines, a jurisdiction with a total of 40 effective tax treaties, with 2 more treaties waiting to enter into force and 2 pending ratification, qualifies as a jurisdiction with substantial network of tax treaties. To achieve the intent of these treaties of reducing double taxation and preventing fiscal evasion, administrative procedures in applying the provisions of these tax treaties must be duly established and enforced. The United Nations recognizes that the 'single most important factor bearing on the compliance by nonresidents with domestic tax law is the use of source withholding by the source State.' 1 Moreover, the UN states that the 'use of final withholding taxes to collect tax from nonresidents is widespread and recognized internationally as a mechanism to collect tax.' 2 Towards this end, Bureau of Internal Revenue (BIR), in its efforts to improve the efficient administration of Philippine tax treaties, adopts the automatic withholding of taxes on income of nonresidents deriving Dividend, Interest and Royalty from sources within the Philippines at applicable tax treaty rates subject to regular audit. SECTION 2. Objectives. This Order seeks to provide for the new procedures in claiming preferential tax treaty benefits on dividend, interest and royalty income of nonresidents pursuant to effective tax treaties, thereby amending for this purpose, Revenue Memorandum Order (RMO) No. 72-2010. The foregoing objectives are achieved through: a. Full disclosure of withholding tax agents on income derived by nonresidents by filing accurate and timely BIR Forms 1601-F and 1604-CF; b. Mandatory audit investigation for final withholding tax payments on income of nonresidents deriving dividends, interest and royalty income in the Philippines; and c. Enhancing BIR Forms 1601-F and 1604-CF. SECTION 3. Coverage. This Order covers dividend, interest and royalty income earned by nonresidents, as defined below, from sources within the Philippines. SECTION 4. Definition. Nonresidents are not residents of the Philippines and not citizens thereof. For purposes of this Order they are classified into: a. Nonresident Alien not engaged in trade or business (NANETB) The aggregate period of stay in the Philippines does not exceed 180 days during any calendar year. b. Nonresident foreign corporations (NRFC) are corporations organized under foreign laws and not engaged in trade or business in the Philippines. Beneficial Owner refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement. 3 SECTION 5. General Policies. 1. In lieu of the mandatory tax treaty relief applications (TTRA), preferential treaty rates for dividends, interests and royalties are granted outright by withholding final taxes at applicable treaty rates as shown in Annex A of this Order. CAIHTE 2. Withholding agents shall file the appropriate BIR Form No. 1601-F and 1604-CF in accordance with existing regulations. Incomplete information provided on the form shall lead to penalties as provided under Section 8 of this Order. 3. Data collected from 1601-F and 1604-CF on the availment of treaty rates and income payment made to nonresidents in general, shall be monitored by the International Tax Affairs Division (ITAD) and Revenue District Office (RDO) No. 9. Such data shall be used for conducting risk analysis, formulating policies, developing the country's treaty negotiating positions and generating management reports. 4. Compliance check on withholding tax obligations and confirmation of appropriateness of availment of treaty benefits shall be part of BIR's regular audit investigations conducted by the RDO where the domestic withholding agent is registered. 5. Applications for ruling under Section 28 B (5) (b) of the National Internal Revenue Code (NIRC) for a preferential rate of 15 percent on intercorporate dividends paid to NRFC shall apply to NRFC which country of residence/domicile: a. Has no effective tax treaty with the Philippines; b. Has a worldwide system of taxation; and c. Allows credit against the tax due from the NRFC dividend taxes deemed to have been paid in the Philippines equivalent to fifteen percent (15%). SECTION 6. Guidelines for the Availment of Preferential Treaty Rates. 1. A duly accomplished BIR Form No. 1601-F and 1604-CF 1904 shall be filed before the appropriate RDO where the domestic withholding agents of nonresidents are registered. All particulars in the form must be properly filled up and timely filed in accordance with the provisions of the National Internal Revenue Code (NIRC) of 1997, as amended. 2. Payment of pertinent final taxes due shall be made to Authorized Agent Banks. 3. In the event of audit investigation, withholding agents shall keep the following supporting documents in the records of the office pursuant to Revenue Regulations (RR) No. 5-2014 4 for substantiation of the claim for preferential treaty rates: a. Consularized Proof of Residency; b. For Dividends 1. Certification from Corporate Secretary. Original copy of a duly notarized certificate executed by the Corporate Secretary of the domestic corporation showing all the following information: i. Details of dividend declaration (with attached related Board Resolution); ii. Number, value and type of shares of the nonresident income earner as of the date of record/transaction, and as of the date of payment of the subject dividends; iii. Percentage of ownership of the nonresident income earner as of the date of record/transaction, and as of the date of the payment of subject dividends; iv. Acquisition date(s) of the subject shares; and v. Mode of acquisition of the subject shares. 2. Board of Investments (BOI) Registration, if applicable. Certified copy of Board of Investments registration of the payor of the dividends, including a Sworn Statement that such registration has not been cancelled at the time of the transaction. c. For Interest 1. Original or certified copy of the notarized contract of loan or loan agreement. 2. Board of Investments (BOI) Registration, if applicable Certified copy of Board of Investments registration of the payor of the interest, including a Sworn Statement that such registration has not been cancelled at the time of the transaction. d. For Royalties 1. Original or certified copy of the duly notarized Royalty Agreement, Technology Transfer Agreement, or Licensing Agreement; 2. When applicable, i. Certified copy of Board of Investments registration of the payor of the royalties, including a Sworn Statement that such registration has not been cancelled at the time of the transaction; ii. A certified copy of the registration of the payor of the income or withholding agent with the Philippine Economic Zone Authority (PEZA) of the payor of the royalties including a Sworn Statement that such registration has not been cancelled at the time of the transaction. iii. Certified copy of Intellectual Property Office (IPO) registration. The BIR reserves the right to request other additional documents in the course of audit. SECTION 7. Intercorporate Dividends. In availing of the reduced rate of 15 percent on intercorporate dividends received by NRFC under Section 28 (B) (5) (b) of the NIRC, the NRFC shall file a separate application with the ITAD of the BIR with the following supporting documents: a. Application letter; DETACa b. Authenticated proof of residency; c. A consularized copy of the law of the country of the NRFC expressly stating that the country in which the NRFC is domiciled allows a credit against the tax due from the NRFC taxes deemed to have been paid in a foreign country (Philippines) equivalent to fifteen percent (15%); d. Certification from the Corporate Secretary of the domestic corporation stating the important details of the dividend declaration; and e. Special Power of Attorney, if applicable. SECTION 8. Penalties. Any violation of the provisions of this Order shall be subject to penalties provided in Section 250 and other pertinent provisions of the NIRC, as amended. Failure to supply accurate and complete information on BIR Forms 1601F and 1604-CF shall be a ground for the denial of availment of preferential treaty rates and the disallowance of the pertinent expense/s of the withholding agent. SECTION 9. Type of Income Applicable to. This Revenue Memorandum shall apply only to DIVIDENDS, INTEREST AND ROYALTIES, and not to any other type of income such as but not limited to business profit, income from services, et al. For income other than dividends, interest and royalties, the provisions contained in and the procedures required in RMO 72-2010 shall continue to apply, and obtaining ruling shall continue to be required. SECTION 10. Transitory Provision. All application/s for preferential treaty rates on dividends, interest and royalties already filed before the ITAD prior to the effectivity of this Order shall still be processed and the corresponding ruling shall be issued. SECTION 11. Repealing Clause. The provisions of RMO 72-2010 and any revenue issuance inconsistent with this Order are deemed revoked, repealed, or modified accordingly. SECTION 12. Effectivity. This Order takes effect immediately. (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue ANNEX A Country Country Dividend Code Rates Australia AU 15% 25% in any other where relief, either by way of case credit as described in paragraph 2 of Article 24 or relief by way credit as described in the second sentence of paragraph 4 of Article 24, is given to the beneficial owner of the dividends. Austria AT 10% 25% in all other dividends if the beneficial owner cases is a company which holds directly at least 10 per cent either of the voting shares of the company paying the dividends or of the total shares issued by that company during the period of six months immediately preceding the date of payments of the dividends; Bahrain BH 10% 15% if the beneficial owner is a company (excluding partnerships) which holds directly at least ten per cent (10%) of the capital of the paying company. Bangladesh BD 10% if the beneficial owner is a 15% in all other company (excluding cases partnerships) which holds directly at least 25 per cent of the capital of the paying company Belgium BE 10% if the beneficial owner is a 15% in all other company which holds directly at cases least 10 per cent of the capital of the company paying the dividends Brazil BR 15% if the recipient is a 25% in all other company including a partnership cases Canada CA 15% paid to a company which is 25% in all other a resident of Canada which cases controls at least 10 per cent of the voting power of the company paying the dividend China CN 10% if the beneficial owner is a 15% in all other company which holds directly at cases least 10 per cent of the capital of the company paying the dividends Czech CZ 10% if the beneficial owner is a 15% in all other company which holds directly at cases least 10 per cent of the capital of the company paying the dividends Denmark DK 10% if the beneficial owner is a 15% in all other company (other than a cases partnership) which holds directly at least 25 per cent of the capital of the company paying the dividends Finland FI 15% if the recipient is a company (excluding partnership) owning at least 10 per cent of the voting stock of the company paying the dividends. France FR 10% if the recipient is a 15% in all other company (excluding partnership) cases which holds directly at least 10 per cent of the voting shares of the company paying the dividends Germany DE 5% if the beneficial owner is a 10% if the beneficial 15% in all company (other than a is a company (other other cases partnership) which holds directly than a partnership) at least 70 per cent of the capital which holds directly of the company paying the at least 25 per cent dividends of the capital of the company paying the dividends Hungary HU 15% if the beneficial owner is a 20% in all other company which holds directly at cases least 25 percent of the capital of the paying company India IN 15% if the beneficial owner is a 20% in all other company which owns at least ten cases per cent of the shares of the company paying the dividends Indonesia ID 15% if the beneficial owner is a 20% in all other company which holds directly at cases least 25 percent of the capital of the paying company Israel IL 10% if the beneficial owner is a 15% in all other company (excluding partnership) cases which holds directly at least 10 percent of the capital of the paying company Italy IT 15% if the recipient is the beneficial owner of the dividends Japan JP 10% if the beneficial owner is a 15% in all other company which holds directly at cases least 10 per cent either of the voting shares of the company paying the dividends or of the total shares issued by that company during the period of six months immediately preceding the date of payment of the dividends, or dividends paid by a company, being a resident of the Philippines, registered with the Board of Investments and engaged in preferred pioneer areas of investment under the investment incentives laws of the Philippines to a resident of Japan, who is the beneficial owner of the dividends Korea KR 10% if the beneficial owner is a 25% in all other company (other than a cases partnership) which holds directly at least 25 per cent of the capital of the company paying the dividends, or dividends paid by a company, being a resident of the Philippines, registered with the Board of Investments and engaged in preferred pioneer areas of investment under the investment incentives laws of the Philippines to a resident of Korea Kuwait KW 10% if the beneficial owner is a 15% in all other company (excluding partnership) cases which holds directly at least 10 percent of the capital of the paying company Malaysia MY 15% if the recipient is a 25% in all other company cases Netherlands NL 10% if the recipient is a 15% in all other company the capital of which is cases wholly or partly divided into shares and which holds directly at least 10 per cent of the capital of the company paying the dividends New NZ 15% if the beneficial owner is a 25% in all other Zealand company cases Nigeria NG 12.5% if the beneficial owner is a 15% in all other company (excluding partnership) cases which holds directly at least 10 percent of the capital of the paying company Norway NO 15% if the beneficial owner is a 25% in all other company which controls directly cases or indirectly at least 10 per cent of the voting power in the company paying the dividends Pakistan PK 15% if the beneficial owner is a 25% in all other company (excluding partnership) cases which holds directly at least 25 per cent of the capital of the paying company during the part of the paying company's taxable year which precedes the date of payment of the dividends and during the whole of its prior taxable year, if any Poland PL 10% if the beneficial owner is a 15% in all other company (excluding cases partnerships) which holds directly at least 25 per cent of the capital of the paying company Qatar QA 10% if the beneficial owner is a 15% in all other company (excluding partnership) cases which holds directly at least 10 percent of the capital of the paying company Romania RO 10% if the recipient is a company 15% in all other (excluding partnership) and cases during the part of the paying corporations taxable year which precedes the date of payment of the dividends and during the whole of its prior taxable year (if any), at least 25 per cent of the outstanding shares of the voting stock of the paying corporation was owned by the recipient corporation Russia RU 15% if the recipient is the beneficial owner of the dividends Singapore SG 15% if the recipient is a 25% in all other company (including partnership) cases and during the part of the paying company's taxable year which precedes the date of payment of the dividend and during the whole of its prior taxable year (if any), at least 15 per cent of the outstanding shares of the voting stock of the paying company was owned by the recipient company Spain ES 10% if the recipient is a 15% in all other corporation (excluding cases partnership) which holds directly at least 10 per cent of the voting shares of the company paying the dividends Sweden SE 10% if the beneficial owner is a 15% in all other company (excluding cases partnerships) which holds directly at least 25 per cent of the capital of the paying company Switzerland CH 10% if the beneficial owner is a 15% in all other company (excluding cases partnerships) which holds directly at least 10 per cent of the capital of the paying company Thailand TH 15% if the company paying the 20% if the dividends is a Philippine company paying company or if the company the dividends is a paying the dividends is a Thai Thai company not company engaged in an engaged in an industrial undertaking industrial undertaking Turkey TR 10% if the beneficial owner is a 15% in all other company (excluding partnership) cases which holds directly at least 25 percent of the capital of the paying company United AE 10% if the beneficial owner is a 15% in all other Arab company (excluding cases Emirates partnerships) which holds directly at least 10 per cent of the capital of the paying company United GB 15% if the beneficial owner is a 25% in all other Kingdom company which controls directly cases of Great or indirectly at least 10 per cent Britain of the voting power in the and company paying the dividends Northern Ireland United US 20% when the recipient is a 25% States of corporation, if during the part of America the paying corporation's taxable year which precedes the date of payment of the dividend and during the whole of its prior taxable year (if any), at least 10 percent of the outstanding shares of the voting stock of the paying corporation was owned by the recipient corporation. Vietnam VN 10% if the beneficial owner is a 15% in all other company (excluding cases partnerships) which holds directly at least 25 per cent of the capital of the paying company Country Country Interest Rates Code Australia AU 10% in respect of public issues 15% of bonds, debentures or similar obligations and paid by a company which is a resident of the Philippines to a resident of Australia Austria AT 10% if the interest is paid by a 15% resident of the Philippines to a resident of Austria in respect of public issues of bonds, debentures or similar obligations or if the interest is paid by a company which is a resident of the Philippines, registered with the Board of Investments and engaged in preferred pioneer areas of investment under the investment incentives laws of the Philippines to a resident of Austria, who is the beneficial owner of the interest. Bahrain BH 10% if the beneficial owner of the income from Debt-Claims is a resident of the other Contracting State Bangladesh BD 15% if the beneficial owner of the interest is a resident of the other Contracting State Belgium BE 10% if the beneficial owner of the interest is a resident of the other Contracting State Brazil BR 10% if interest is paid by a 15% if the recipient is company which is a resident of the beneficial owner the Philippines to a resident of of the interest Brazil in respect of public issues of bonds, debentures or similar obligations Canada CA 15% if the interest is taxable in the other Contracting State China CN 10% if the recipient is the beneficial owner of the interest Czech CZ 10% if the beneficial owner of the interest is a resident of the other Contracting State Denmark DK 10% if the beneficial owner of the interest is a resident of the other Contracting State Finland FI 15% if the recipient is the beneficial owner of the interest the tax so charge France FR 15% if the recipient is the beneficial owner of the interest Germany DE 10% if the beneficial owner of the interest is a resident of the other Contracting State Hungary HU 15% if the recipient is the beneficial owner of the interest India IN 10% if the interest is received by 15% in all other cases a financial institution (including insurance companies) or in respect of public issues of bonds, debentures or similar obligations Indonesia ID 15% if the recipient is the 10% in respect of beneficial owner of the interest public issues of bonds, debentures or similar obligations Israel IL 10% if the recipient is the beneficial owner of the interest Italy IT 10% if the recipient is the 15% in all other cases beneficial owner of the interest in respect of public issues of bonds, debentures, or similar obligations and paid by a resident of one Contracting State to a resident of the other Contracting State Japan JP 10% if the recipient is the beneficial owner of the interest Korea KR 10% if the interest is paid in 15% in all other cases respect of public issues of bonds, debentures or similar obligation Kuwait KW 10% if the beneficial owner of the interest is a resident of the other State Malaysia MY 15% if the recipient is the beneficial owner of the interest Netherlands NL 10% 15% in all other cases (i) in connection with the sale on credit of any industrial, commercial or scientific equipment, or (ii) on any loan of whatever kind granted by a bank, or any other financial institution, (iii) in respect of public issues of bonds, debentures or similar obligations New NZ 10% if the recipient is the Zealand beneficial owner of the interest Nigeria NG 15% if the recipient is the beneficial owner of the interest Norway NO 15% Pakistan PK 15% if the recipient is the beneficial owner of the interest Poland PL 10% Qatar QA 10% Romania RO 10% 15% in connection if such interest is paid, with the sale on credit of any means of (i) in connection with the sale on transport and in all credit of any industrial, other cases commercial or scientific machine or equipment, or similar installation, or (ii) on any loan of whatever kind granted by a bank, or (iii) in respect of public issues of bonds, debentures or similar obligations. Russia RU 15% if the recipient is the beneficial owner of the interest Singapore SG 15% if the recipient is the beneficial owner of the interest Spain ES 10% 15% in all other cases if such interest is paid: (i) in connection with the sale on credit of any industrial, commercial or scientific equipment, or (ii) in respect of issues of bonds, debentures or similar obligations offered to the general public. Sweden SE 10% if the beneficial owner of the interest is a resident of the other Contracting State Switzerland CH 10% if the recipient is the beneficial owner of the interest Thailand TH 10% if the recipient is the 15% if it arises in 25% if it arises in beneficial owner of the interest the Philippines Thailand and (i) it arises in Thailand and is received by Philippine financial institutions (including insurance companies); (ii) it arises in the Philippines in respect of public issues of bonds, debentures or similar obligations; Turkey TR 10% if the beneficial owner of the interest is a resident of the other State United Arab AE 10% if the beneficial owner of Emirates the interest is a resident of the other Contracting State United GB 10% if the interest is paid by a 15% Kingdom company in respect of the public of Great issue of bonds, debentures or Britain similar obligations. and Northern Ireland United US 10% with respect to public 15% States of issues of bonded indebtedness America Vietnam VN 15% if the recipient is the beneficial owner of the interest Country Country Royalty Rates Code Australia AU 15% where the royalties are 25% in all other cases paid by an enterprise registered with the Philippine Board of Investments and engaged in preferred areas of activities Austria AT 10% if the royalties are paid by 15% if the recipient is a company, which is a resident the beneficial owner of of the Philippines registered the royalties with the Board of Investments and engaged in preferred pioneer areas of investments under the investment incentives laws of the Philippines, to a resident of Austria, who is the beneficial owner of the royalties Bahrain BH 10% in all other cases provided 15% if the beneficial that the recipient is the owner of the royalties beneficial owner of the is a resident of the other royalties Contracting State and the royalties are arising from the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films or tapes for television or broadcasting Bangladesh BD 15% if the beneficial owner of the royalties is a resident of the other Contracting State Belgium BE 15% if the beneficial owner of the royalties is a resident of the other Contracting State Brazil BR 15% shall only apply to 25% in all other cases royalties paid by an enterprise provided that the registered with the Philippine recipient is the Board of Investment and beneficial owner of the engaged in preferred areas of royalties activities. Canada CA 25% in the Philippines The lowest rate of Philippine tax that may be imposed on royalties of the same kind paid in similar circumstances to a resident of a third State. China CN 10% if the recipient is the 15% if the recipient is beneficial owner of the the beneficial owner of royalties and the royalties are the royalties and the arising from the use of, or the royalties are arising right to use, any patent, trade from the use of, or the mark, design or model, plan, right to use, any secret formula or process, or copyright of literary, from the use of, or the right to artistic or scientific use, industrial, commercial, or work including scientific equipment, or for cinematograph films or information concerning tapes for television or industrial, commercial or broadcasting scientific experience. Czech CZ 10% if the beneficial owner of 15% if the beneficial the royalties is a resident of the owner of the royalties other Contracting State and the is a resident of the other royalties are arising from the Contracting State and use of, or the right to use, any the royalties are arising copyright of literary, artistic or from the use of, or the scientific work, other than that right to use, any mentioned in sub-paragraph (b), copyright of any patent, trade mark, design cinematograph films, or model, plan, secret formula and films or tapes for or process, or from the use of, television or radio or the right to use, industrial, broadcasting commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience Denmark DK 15% if the recipient is the beneficial owner of the royalties Finland FI 15% where the royalties are 25% in all other cases paid by an enterprise registered with and engaged in preferred areas of activities, and also royalties in respect of cinematographic films or tapes for television or broadcasting, and royalties for the use of, or the right to use, any copyright of literary, artistic or scientific work France FR 15% if the beneficial owner of the royalties is a resident of the other Contracting State Germany DE 10% if the beneficial owner of the royalties is a resident of the other Contracting State Hungary HU 15% if the recipient is the The lowest rate of beneficial owner of the Philippine tax that may, royalties under similar circumstances, be imposed on royalties derived by a resident of a third State. India IN 15% if the recipient is the beneficial owner of the royalties and provided that such royalties are payable by an enterprise which is registered with the Board of Investment Indonesia ID 15% where the royalties are 25% in all other cases paid by an enterprise registered with the Philippine Board of Investments, and engaged in preferred areas of activities as determined by the said Board Israel IL 15% if the recipient is the The lowest rate of beneficial owner of the Philippine tax that may, royalties under similar circumstances, be imposed on royalties derived by a resident of a third State. Italy IT 15% if the recipient is the 25% in all other cases if the Philippines beneficial owner of the agrees to a lower rate royalties and where the of tax on royalties of royalties are paid by an the same kind paid in enterprise registered with the similar circumstances Philippine Board of to a resident of a third Investments and engaged in state, then this lower preferred areas of activities and rate shall likewise be also royalties in respect of applied to residents cinematographic films or tapes of Italy for television or broadcasting Japan JP 10% in all other cases provided 15% if the recipient is that the recipient is the the beneficial owner of beneficial owner of the the royalties and the royalties or if the royalties are royalties are paid in paid by a company, which is a respect of the use of or resident of the Philippines the right to use registered with the Board of cinematograph films Investments and engaged in and films or tapes for preferred pioneer areas of radio or television investments under the broadcasting investment incentives laws of the Philippines, to a resident of Japan, who is the beneficial owner of the royalties Korea KR 10% if the royalties are paid by 15% if the recipient is a company, which is a resident the beneficial owner of of the Philippines registered the royalties with the Board of Investments and engaged in preferred pioneer areas of investments under the investment incentives laws of the Philippines, to a resident of Korea, who is the beneficial owner of the royalties Kuwait KW 20% if the beneficial owner of the royalties is a resident of the other contracting state Malaysia MY 15% if the recipient is the 25% in all other cases. beneficial owner of the royalties and where the royalties are paid by a registered enterprise as well as royalties for the use of, or the right to use, cinematograph films, or tapes for radio or television broadcasting Netherlands NL 10% if the recipient is the 15% in all other cases beneficial owner of the royalties and where the royalties are paid by an enterprise registered, and engaged in preferred areas of activities in that State New NZ 15% if the recipient is the Zealand beneficial owner of the royalties Nigeria NG 20% if the recipient is the beneficial owner of the royalties Norway NO 25% when the royalties are 7.5% when the The lowest rate of taxable in the other Contracting royalties are taxable in the Philippine tax that State and for amount paid for the other Contracting may be imposed on the use of, or the right to use, State and paid for the royalties of the same motion picture films, films or use of or the right to kind paid in similar tapes for radio or television use containers circumstances to a broadcasting; resident of a third State. Pakistan PK 15% where the royalties are 25% in all other cases paid by an enterprise registered with, and engaged in preferred areas of activities in that Contracting State Poland PL 15% Qatar QA 15% if the beneficial owner of the royalties is a resident of the other contracting state Romania RO 10% where the royalties are paid 15% in respect of 25% in all other cases by an enterprise registered with cinematographic films the Board of Investments and and tapes for television engaged in preferred pioneer of broadcasting areas of activities. Russia RU 15% Singapore SG 15% if the recipient is the 25% in all other cases beneficial owner of the royalties and where the royalties are paid by an enterprise registered with the Philippine Board of Investments and engaged in preferred areas of activities and also royalties in respect of cinematographic films or tapes for television or broadcasting Spain ES 10% if the recipient is the 15% in all other cases 20% if the recipient is beneficial owner of the provided that the the beneficial owner royalties and where the recipient is the of the royalties and in royalties are paid by an beneficial owner of the respect of enterprise registered with the royalties cinematographic Philippine Board of films or tapes for Investments and engaged in television or preferred areas of activities broadcasting Sweden SE 15% if the beneficial owner of the royalties is a resident of the other Contracting State Switzerland CH 15% Thailand TH 15% if the recipient is the 25% in all other cases beneficial owner of the royalties provided that the and if the royalties are paid: recipient is the beneficial owner of the (i) by an enterprise registered royalties with the Philippine Board of Investments and engaged in preferred areas of activities; or (ii) by an enterprise under the promotion of the Board of Investments of Thailand; or (iii) in respect of cinematographic films or tapes for television or broadcasting Turkey TR 10% if the beneficial owner of 15% royalties are the royalties is a resident of the arising from the use of, other Contracting State and the or the right to use, any royalties are arising royalties copyright of literary, for the use of, or the right to artistic or scientific use, cinematographic films, or work, any patent, trade films or tapes for television or mark, design or model, radio broadcasting 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 United Arab AE 10% if the beneficial owner of Emirates the royalties is a resident of the other Contracting State United GB 15% where the royalties are paid: 25% in all other cases Kingdom of Great (i) by an enterprise registered Britain with the Philippine Board of and Investments and engaged in Northern preferred areas of activity or Ireland (ii) in respect of cinematograph films or tapes for television or radio broadcasting. United US 15% where the royalties are 25% The lowest rate of States of paid by a corporation registered Philippine tax that America with the Philippine Board of may be imposed on Investments and engaged in royalties of the same preferred areas of activities kind paid under similar circumstances to a resident of a third State. Vietnam VN 15% if the recipient is the beneficial owner of the royalties Footnotes 1. 1.3 Connection between tax compliance and source withholding, Chapter IV, United Nations Handbook on Selected Issues in Administration of Double Tax Treaties for Developing Countries. 2. Ibid. 3. Financial Action Task Force (FATF) Guidance on Transparency and Beneficial Ownership. 4. Amending Revenue Regulations No. 17-2013 dealing with the "Preservation of Books of Accounts and Other Accounting Records".