List of Territorial Tax Countries with formal and de-facto treatment of foreign income
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This.
I think this points to the middle-ground reality: the Philippines was a wild west; it is ever-trying to modernize and become less of a wild west and less corrupt… but (in my experience) tends to only succeed in (very) small increments. Future wild-westness is not guaranteed, but reform/modernization is not progressing at breakneck speed, either.
This too.︃ There is some challenging legal minutiae you should pay attention to, but remember not to︄ lose sight that the overall tenor of Philippine law/policy makes it clear that they are︅ not looking to tax foreign-sourced income (unless you're a Filipino citizen based in the Philippines).︆ Moreover, everywhere in the world, there is a gap between what is written law and︇ what is actually enforced; in my experience that gap is VERY wide in the Philippines.︈
I'll also say that when I read the law on foreigners and foreign-sourced income, it︉ is clear to me it is written with a clear intention to guide (large, multinational)︊ foreign corps employing foreign expats: register your foreign branch office, pay the employee properly, withhold︋ their income tax, etc. The authors of the code are not thinking about solopreneurs/individuals managing︌ their offshore holdcos on their laptop from their home office.
Again, I'm grateful for @backpacker 's excellent insights/research. But the tone of his conclusion statements could easily lead readers to︍ think that investigations and enforcement for individual foreigners is very high/unavoidable, and that doesn't match︎ my experience nor that of my colleagues; nor do I see an epidemic of foreigner-with-foreign-corps️ tax cases in the news or in expat groups online.
I think this points to the middle-ground reality: the Philippines was a wild west; it is ever-trying to modernize and become less of a wild west and less corrupt… but (in my experience) tends to only succeed in (very) small increments. Future wild-westness is not guaranteed, but reform/modernization is not progressing at breakneck speed, either.
This too.︃ There is some challenging legal minutiae you should pay attention to, but remember not to︄ lose sight that the overall tenor of Philippine law/policy makes it clear that they are︅ not looking to tax foreign-sourced income (unless you're a Filipino citizen based in the Philippines).︆ Moreover, everywhere in the world, there is a gap between what is written law and︇ what is actually enforced; in my experience that gap is VERY wide in the Philippines.︈
I'll also say that when I read the law on foreigners and foreign-sourced income, it︉ is clear to me it is written with a clear intention to guide (large, multinational)︊ foreign corps employing foreign expats: register your foreign branch office, pay the employee properly, withhold︋ their income tax, etc. The authors of the code are not thinking about solopreneurs/individuals managing︌ their offshore holdcos on their laptop from their home office.
Again, I'm grateful for @backpacker 's excellent insights/research. But the tone of his conclusion statements could easily lead readers to︍ think that investigations and enforcement for individual foreigners is very high/unavoidable, and that doesn't match︎ my experience nor that of my colleagues; nor do I see an epidemic of foreigner-with-foreign-corps️ tax cases in the news or in expat groups online.
Yes indeed.︊ The fact is not much is happening at all. Otherwise sources left right and center︋ could be provided easily.
I however do not doubt the extensive research provided here, which︌ might even could be accurate.
I however do not doubt the extensive research provided here, which︌ might even could be accurate.
I agree︊ on that and started the topic in Philippines. Since Im personally interested to get more︋ clarity from a legal perspective e will consult a law firm specialized in PE and︌ taxation . This might take a while but if we have some information we will︍ share this in forum.
We have local friends who run the most popular restaurant/bar in︎ a town and all are on tourist visa's. They are just shareholders and be present️ there almost daily to "observe" the operations. They get regularly in contact with local authorities, police for issues as sound level complaints from neighbours who had filed a group complaint through a legal firm and got police and local authorities involved, none was ever questioned about their employment status. Some of them own several businesses. I wouldnt recommend this as in Philippines it all depends on who you are dealing with and if you run a business locally you better get a AEP (if you got no exemption) and get your tax filings in order.
Our personal experience with several governmental departments is that sometimes︀ they are very stubborn and demand unreasonable things but things always get resolved in one︁ way or another using connections and other means.
correct, thats why I mentioned only︅ certain visas can obtain this, and its quite easy to obtain this exemption card if︆ you have that visa. Only indeed permanent resident (not sure all) and not SIRV, SRRV︇ etc
We have local friends who run the most popular restaurant/bar in︎ a town and all are on tourist visa's. They are just shareholders and be present️ there almost daily to "observe" the operations. They get regularly in contact with local authorities, police for issues as sound level complaints from neighbours who had filed a group complaint through a legal firm and got police and local authorities involved, none was ever questioned about their employment status. Some of them own several businesses. I wouldnt recommend this as in Philippines it all depends on who you are dealing with and if you run a business locally you better get a AEP (if you got no exemption) and get your tax filings in order.
Our personal experience with several governmental departments is that sometimes︀ they are very stubborn and demand unreasonable things but things always get resolved in one︁ way or another using connections and other means.
correct, thats why I mentioned only︅ certain visas can obtain this, and its quite easy to obtain this exemption card if︆ you have that visa. Only indeed permanent resident (not sure all) and not SIRV, SRRV︇ etc
You probably should check the tax treaty as in most cases withholding tax is more than you may ever save.
Still shows "N" for local income?
Seems like they do have a PE concept:
https://sgv.ph/c-suite/Tax-issues-arising-from-cross-border-WFH-arrangements
Seems like they do have a PE concept:
https://sgv.ph/c-suite/Tax-issues-arising-from-cross-border-WFH-arrangements
Also seems like the Comoros have a PE concept, but it's probably only relevant if you have local customers (like Thailand)?
https://www.orbitax.com/taxhub/coun...21171b89ed/Domestic-PE-of-a-Foreign-Entit-535
https://www.orbitax.com/taxhub/coun...21171b89ed/Domestic-PE-of-a-Foreign-Entit-535
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