RP China Tax Treaty

7/25/2019 RP China Tax Treaty

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Copyright 1994-2014 CD Technologies Asia, Inc. Taxation 2013 1

November 18, 1999 January 1, 2002

AGREEMENT BETWEEN THE GOVERNMENT OF THE RE!B"#$ OF THE

H#"##NE% AN& THE GOVERNMENT OF THE EO"E'% RE!B"#$ OF

$H#NA FOR THE AVO#&AN$E OF &O!B"E TA(AT#ON AN& THE

REVENT#ON OF F#%$A" EVA%#ON W#TH RE%E$T TO TA(E% ON #N$OME

The Government of the Republic of the Philippines and the Government of the

People's Republic of China

Desiring to conclude an Agreement for the avoidance of double taxation and

the prevention of fiscal evasion with respect to taxes on income,

ave agreed as follows!

ART#$"E 1

Personal Scope

This Agreement shall appl" to persons who are residents of one or both of the

Contracting #tates$

ART#$"E 2

Taxes Covered

%$ This Agreement shall appl" to taxes on income imposed on behalf of a

Contracting #tate or of its local authorities, irrespective of the manner in which the"

are levied$

&$ The existing taxes to which the Agreement shall appl" are in particular!

a in China!

(i the individual income tax)

(ii the income tax for enterprises with foreign investment and


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foreign enterprises)

(iii the local income tax)

(hereinafter referred to as *Chinese tax*)

b in the Philippines!

(i the income taxes on individuals, corporations, estates and

trusts)

(ii the stoc+ transaction tax)

(hereinafter referred to as *Philippine tax*)

$ The Agreement shall also appl" to an" identical or substantiall" similartaxes which are imposed after the date of signature of the Agreement in addition to, or

in place of, the existing taxes$ The competent authorities of the Contracting #tates

shall notif" each other of an" substantial changes which have been made in their

respective taxation laws within a reasonable period of time after such changes$

ART#$"E )

General Definitions

%$ -or the purposes of this Agreement, unless the context otherwise re.uires!

a the term *China* means the People's Republic of China)

b the term *Philippines* means the Republic of the Philippines)

c the terms *a Contracting #tate* and *the other Contracting #tate*

mean China or the Philippines as the context re.uires)

d the term *tax* means Chinese tax or Philippine tax, as the context

re.uires)

e the term *person* includes an individual, a compan" and an" other

bod" of persons)

f the term *compan"* means an" bod" corporate or an" entit" which

is treated as a bod" corporate for tax purposes)


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g the terms *enterprise of a Contracting #tate* and *enterprise of the

other Contracting #tate* mean, respectivel", an enterprise carried

on b" a resident of a Contracting #tate and an enterprise carried on

b" a resident of the other Contracting #tate)

h the term *national* means!

(i an" individual possessing the nationalit" of a Contracting

#tate)

(ii an" legal person, partnership or association deriving its

status as such from the laws in force in a Contracting #tate)

i the term *international' traffic* means an" transport b" a ship or

aircraft operated b" an enterprise which is a resident of aContracting #tate, except when the ship or aircraft is operated

solel" between places in the other Contracting #tate)

/ the term *competent authorit"* means!

(i in the case of China, the #tate Administration of Taxation or

its authori0ed representative)

(ii in the case of the Philippines, the #ecretar" of -inance or his

authori0ed representative$

&$ As regards the application of the Agreement b" a Contracting #tate, an"

term not defined therein shall, unless the context otherwise re.uires, have the meaning

which it has under the law of that Contracting #tate concerning the taxes to which the

Agreement applies$

ART#$"E *

Resident

%$ -or the purposes of this Agreement, the term *resident of a Contracting#tate* means an" person who, under the laws of that #tate, is liable to tax therein b"

reason of his domicile, residence, place of head office, place of effective management,

or an" other criterion of a similar nature$

&$ 1here b" reason of the provisions of paragraph % an individual is a


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resident of both Contracting #tates, then his status shall be determined as follows!

a he shall be deemed to be a resident of the #tate in which he has a

permanent home available to him) if he has a permanent home

available to him in both #tates, he shall be deemed to be a residentof the #tate with which his personal and economic relations are

closer (centre of vital interests)

b if the #tate in which he has his centre of vital interests cannot be

determined, or if he has not a permanent home available to him in

either #tate, he shall be deemed to be a resident of the #tate in

which he has an habitual abode)

c if he has an habitual abode in both #tates or in neither of them, he

shall be deemed to be a resident of the #tate of which he is anational)

d if he is a national of both #tates or of neither of them, the

competent authorities of the Contracting #tates shall settle the

.uestion b" mutual agreement$

$ 1here b" reason of the provisions of paragraph % a person other than an

individual is a resident of both Contracting #tates, the competent authorities of the

Contracting #tate shall endeavor to settle the .uestion b" mutual agreement$

ART#$"E +

Permanent Establishment

%$ -or the purposes of this Agreement, the term *permanent establishment*

means a fixed place of business through which the business of an enterprise is wholl"

or partl" carried on$

&$ The term *permanent establishment* includes especiall"!

a a place of management)

b a branch)

c an office)


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d a factor")

e a wor+shop) and

f a mine, an oil or gas well, a .uarr" or an" other place of extractionof natural resources$

$ The term *permanent establishment* li+ewise encompasses!

a a building site, a construction, assembl" or installation pro/ect or

supervisor" activities in connection therewith, but onl" where such

site, pro/ect or activities continue for a period of more than 2

months$

b an installation, drilling rig or ship used for the exploration ofnatural resources, but onl" if so used for a period of more than

three months) and

c the furnishing of services, including consultanc" services, b" an

enterprise through emplo"ees or other personnel engaged b" the

enterprise for such purpose, but onl" where activities of that nature

continue (for the same or a connected pro/ect within the countr"

for a period or periods aggregating more than 2 months within an"

twelve3month period$

4$ 5otwithstanding the preceding provisions of this Article, the term

*permanent establishment* shall be deemed not to include!

a the use of facilities solel" for the purpose of storage, displa" or

deliver" of goods or merchandise belonging to the enterprise)

b the maintenance of a stoc+ of goods or merchandise belonging to

the enterprise solel" for the purpose of storage, displa" or deliver")

c the maintenance of a stoc+ of goods or merchandise belonging to

the enterprise solel" for the purpose of processing b" another

enterprise)

d the maintenance of a fixed place of business solel" for the purpose

of purchasing goods or merchandise or of collecting information,


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Copyright 1994-2014 CD Technologies Asia, Inc. Taxation 2013

for the enterprise)

e the maintenance of a fixed place of business solel" for the purpose

of carr"ing on, for the enterprise, an" other activit" of a preparator"

or auxiliar" character)

f the maintenance of a fixed place of business solel" for an"

combination of activities mentioned in sub3paragraphs (a to (e,

provided that the overall activit" of the fixed place of business

resulting from this combination is of a preparator" or auxiliar"

character$

6$ A person acting in a Contracting #tate on behalf of an enterprise of the

other Contracting #tate 7 other than an agent of independent status to whom

paragraph 2 applies 7 shall be deemed to be a permanent establishment in thefirst3mentioned #tate if he has, and habituall" exercises in that #tate, an authorit" to

conclude contracts in the name of the enterprise, unless his activities are limited to the

purchase of goods or merchandise for the enterprise$

2$ An enterprise of a Contracting #tate shall not be deemed to have a

permanent establishment in the other Contracting #tate merel" because it carries on

business in that other #tate through a bro+er, general commission agent or an" other

agent of an independent status, provided that such persons are acting in the ordinar"

course of their business$

8$ The fact that a compan" which is a resident of a Contracting #tate

controls or is controlled b" a compan" which is a resident of the other Contracting

#tate, or which carries on business in that other #tate (whether through a permanent

establishment or otherwise, shall not of itself constitute either compan" a permanent

establishment of the other$

ART#$"E

Income From Immovable Property

%$ 9ncome derived b" a resident of a Contracting #tate from immovable

propert" (including income from agriculture or forestr" situated in the other

Contracting #tate ma" be taxed in that other #tate$

&$ The term *immovable propert"* shall have the meaning which it has under

the law of the Contracting #tate in which the propert" in .uestion is situated$ The term


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shall in an" case include propert" accessor" to immovable propert", livestoc+ and

e.uipment used in agriculture and forestr", rights to which the provisions of general

law respecting landed propert" appl", usufruct of immovable propert" and rights to

variable or fixed pa"ments as consideration for the wor+ing of, or the right to wor+,

mineral deposits, sources and other natural resources$ #hips and aircraft shall not be

regarded as immovable propert"$

$ The provisions of paragraph % shall appl" to income derived from the

direct use, letting, or use in an" other form of immovable propert"$

4$ The provisions of paragraphs % and shall also appl" to the income from

immovable propert" of an enterprise and to income from immovable propert" used for

the performance of independent personal services$

ART#$"E -

Bsiness Profits

%$ The profits of an enterprise of a Contracting #tate shall be taxable onl" in

that #tate unless the enterprise carries on business in the other Contracting #tate

through a permanent establishment situated therein$ 9f the enterprise carries on

business as aforesaid, the profits of the enterprise ma" be taxed in the other #tate, but

onl" so much of them as is attributable to that permanent establishment$

&$ #ub/ect to the provisions of paragraph , where an enterprise of aContracting #tate carries on business in the other Contracting #tate through a

permanent establishment situated therein, there shall in each Contracting #tate be

attributed to that permanent establishment the profits which it might be expected to

ma+e if it were a distinct and separate enterprise engaged in the same or similar

activities under the same or similar conditions and dealing wholl" independentl" with

the enterprise of which it is a permanent establishment$

$ 9n determining the profits of a permanent establishment, there shall be

allowed as deductions expenses which are incurred for the purposes of the business of

the permanent establishment, including executive and general administrative expensesso incurred, whether in the #tate in which the permanent establishment is situated or

elsewhere$

4$ 9nsofar as it has been customar" in a Contracting #tate to determine the

profits to be attributed to a permanent establishment on the basis of an apportionment


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Copyright 1994-2014 CD Technologies Asia, Inc. Taxation 2013 "

of the total profits of the enterprise to its various parts, nothing in paragraph & shall

preclude that Contracting #tate from determining the profits to be taxed b" such an

apportionment as ma" be customar"$ The method of apportionment adopted shall,

however, be such that the result shall be in accordance with the principles contained in

this Article$

6$ 5o profits shall be attributed to a permanent establishment b" reason of

the mere purchase b" that permanent establishment of goods or merchandise for the

enterprise$

2$ -or the purposes of the preceding paragraphs, the profits to be attributed

to the permanent establishment shall be determined b" the same method "ear b" "ear

unless there is good and sufficient reason to the contrar"$

8$ 1here profits include items of income which are dealt with separatel" inother Articles of this Agreement, then the provisions of those Articles shall not be

affected b" the provisions of this Article$ Apart from the corporate income tax, a tax

on remittance of profits b" a branch to its head office ma" be imposed provided that

the tax shall not exceed %: per cent of the amount remitted$

ART#$"E 8

Shippin! "nd "ir Transport

%$ Profits from the operation of ships or aircraft in international traffic shallbe taxable onl" in the Contracting #tate in which the enterprise is a resident$

&$ The provisions of paragraph % shall also appl" to profits from the

participation in a pool, a /oint business or an international operating agenc"$

$ 5otwithstanding the provisions of paragraph %, profits from sources

within a Contracting #tate derived b" an enterprise of the other Contracting #tate from

the operation of ships or aircraft in international traffic ma" be taxed in the

first3mentioned #tate but the tax so charged shall not exceed one and one3half per cent

of the gross revenues derived from sources in that #tate$

ART#$"E 9

"ssociated Enterprises

%$ 1here


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a an enterprise of a Contracting #tate participates directl" or

indirectl" in the management, control or capital of an enterprise of

the other Contracting #tate, or

b the same persons participate directl" or indirectl" in the

management, control or capital of an enterprise of a Contracting

#tate and an enterprise of the other Contracting #tate,

and in either case conditions are made or imposed between the two enterprises in their

commercial or financial relations which differ from those which would be made

between independent enterprises, then an" profits which would, but for those

conditions, have accrued to one of the enterprises, but, b" reason of those conditions,

have not so accrued, ma" be included in the profits of that enterprise and taxed

accordingl"$

&$ 1here a Contracting #tate includes in the profits of an enterprise of that

#tate 7 and taxes accordingl" 7 profits on which an enterprise of the other

Contracting #tate has been charged to tax in that other #tate and the profits so

included are profits which would have accrued to the enterprise of the first3mentioned

#tate if the conditions made between the two enterprises had been those which would

have been made between independent enterprises, then that other #tate shall ma+e an

appropriate ad/ustment to the amount of the tax charged therein on those profits$ 9n

determining such ad/ustment, due regard shall be had to the other provisions of this

Agreement and the competent authorities of the Contracting #tates shall, if necessar",consult each other$

ART#$"E 10

Dividends

%$ Dividends paid b" a compan" which is a resident of a Contracting #tate to

a resident of the other Contracting #tate ma" be taxed in that other #tate$

&$ owever, such dividends ma" also be taxed in the Contracting #tate of

which the compan" pa"ing the dividends is a resident and according to the laws ofthat #tate, but if the recipient is the beneficial owner of the dividends the tax so

charged shall not exceed!

a %: per cent of the gross amount of the dividends if the beneficial

owner is a compan" which holds directl" at least %: per cent of the


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capital of the compan" pa"ing the dividends)

b %6 per cent of the gross amount of the dividends in all other cases$

This paragraph shall not affect the taxation of the compan" in respect of theprofits out of which the dividends are paid$

$ The term *dividends* as used in this Article means income from shares, or

other rights, not being debt3claims, participating in profits, as well as income from

other corporate rights which is sub/ected to the same taxation treatment as income

from shares b" the laws of the #tate of which the compan" ma+ing the distribution is a

resident$

4$ The provisions of paragraphs % and & shall not appl" if the beneficial

owner of the dividends, being a resident of a Contracting #tate, carries on business inthe other Contracting #tate of which the compan" pa"ing the dividends is a resident,

through a permanent establishment situated therein, or performs in that other #tate

independent personal services from a fixed base situated therein, and the holding in

respect of which the dividends are paid is effectivel" connected with such permanent

establishment or fixed base$ 9n such case the provisions of Article 8 or Article %4, as

the case ma" be, shall appl"$

6$ 1here a compan" which is a resident of a Contracting #tate derives

profits or income from the other Contracting #tate, that other #tate ma" not impose

an" tax on the dividends paid b" the compan", except insofar as such dividends arepaid to a resident of that other #tate or insofar as the holding in respect of which the

dividends are paid is effectivel" connected with a permanent establishment or a fixed

base situated in that other #tate, nor sub/ect the compan"'s undistributed profits to a

tax on the compan"'s undistributed profits, even if the dividends paid or the

undistributed profits consist wholl" or partl" of profits or income arising in such other

#tate$

ART#$"E 11

Interest

%$ 9nterest arising in a Contracting #tate and paid to a resident of the other


&$ owever, such interest ma" also be taxed in the Contracting #tate in

which it arises and according to the laws of that #tate, but if the recipient is the


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beneficial owner of the interest the tax so charged shall not exceed %: per cent of the

gross amount of the interest$ The competent authorities of the Contracting #tates shall

b" mutual agreement settle the mode of application of this limitation$

$ 5otwithstanding the provisions of paragraph &, interest arising in aContracting #tate and derived b" the Government of the other Contracting #tate, a

local authorit" and the Central ;an+ thereof or an" financial institution wholl" owned

b" the Government of that other #tate, or b" an" other resident of that other #tate with

respect to debt3claims indirectl" financed b" the Government of that other #tate, a

local authorit", and the Central ;an+ thereof or an" financial institution wholl" owned

b" the Government of that other #tate, shall be exempt from tax in the first3mentioned

#tate$

4$ The term *interest* as used in this Article means income from debt3claims

of ever" +ind, whether or not secured b" mortgage and whether or not carr"ing a rightto participate in the debtor's profits, and in particular, income from government

securities and income from bonds or debentures, including premiums and pri0es

attaching to such securities, bonds or debentures$ Penalt" charges for late pa"ment

shall not be regarded as interest for the purpose of this Article$

6$ The provisions of paragraphs %, & and shall not appl" if the beneficial

owner of the interest, being a resident of a Contracting #tate, carries on business in the

other Contracting #tate in which the interest arises, through a permanent

establishment situated therein, or performs in that other #tate independent personal

services from a fixed base situated therein, and the debt3claim in respect of which the

interest is paid is effectivel" connected with such permanent establishment or fixed

base$ 9n such case the provisions of Article 8 or Article %4, as the case ma" be, shall

appl"$

2$ 9nterest shall be deemed to arise in a Contracting #tate when the pa"er is

the Government of that #tate, political subdivision, a local authorit" thereof or a

resident of that #tate$ 1here, however, the person pa"ing the interest, whether he is a

resident of a Contracting #tate or not, has in a Contracting #tate a permanent

establishment or a fixed base in connection with which the indebtedness on which the

interest is paid was incurred, and such interest is borne b" such permanent

establishment or fixed base, then such interest shall be deemed to arise in the #tate in

which the permanent establishment or fixed base is situated$

8$ 1here, b" reason of a special relationship between the pa"er and the

beneficial owner or between both of them and some other person, the amount of the


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interest, having regard to the debt3claim for which it is paid, exceeds the amount

which would have been agreed upon b" the pa"er and the beneficial owner in the

absence of such relationship, the provisions of this Article shall appl" onl" to the

last3mentioned amount$ 9n such case, the excess part of the pa"ments shall remain

taxable according to the laws of each Contracting #tate, due regard being had to the

other provisions of this Agreement$

ART#$"E 12

Royalties

%$ Ro"alties arising in a Contracting #tate and paid to a resident of the other


&$ owever, such ro"alties ma" also be taxed in the Contracting #tate inwhich the" arise and according to the laws of that #tate, but if the recipient is the

beneficial owner of the ro"alties, the tax so charged shall not exceed!

a %6 per cent of the gross amount of ro"alties arising from the use of,

or the right to use, an" cop"right of literar", artistic or scientific

wor+ including cinematograph films or tapes for television or

broadcasting, or

b %: per cent of the gross amount of ro"alties arising from the use of,

or the right to use, an" patent, trade mar+, design or model, plan,secret formula or process, or from the use of, or the right to use,

industrial, commercial, or scientific e.uipment, or for information

concerning industrial, commercial or scientific experience$

-or as long as the transfer of technolog", under Philippine law, is sub/ect to

approval, the limitation of the tax rate mentioned under (b shall, in the case of

ro"alties arising in the Republic of the Philippines, onl" appl" if the contract giving

rise to such ro"alties has been approved b" the Philippine competent authorities$

$ The term *ro"alties* as used in this Article means pa"ments of an" +ind

received as a consideration for the use of, or the right to use, an" cop"right of literar",

artistic or scientific wor+ including cinematograph" films, or films or tapes for radio

or television broadcasting, an" patent, trade mar+, design or model, plan, secret

formula or process, or for the use of, or the right to use, industrial, commercial, or

scientific e.uipment, or for information concerning industrial, commercial or


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scientific experience$

4$ The provisions of paragraphs % and & shall not appl" if the beneficial

owner of the ro"alties, being a resident of a Contracting #tate, carries on business in

the other Contracting #tate in which the ro"alties arise, through a permanentestablishment situated therein, or performs in that other #tate independent personal

services from a fixed base situated therein, and the right or propert" in respect of

which the ro"alties are paid is effectivel" connected with such permanent

establishment or fixed base$ 9n such case the provisions of Article 8 or Article %4, as

the case ma" be, shall appl"$

6$ Ro"alties shall be deemed to arise in a Contracting #tate when the pa"er is

the Government of that Contracting #tate, a political subdivision, a local authorit"

thereof or a resident of that Contracting #tate$ 1here, however, the person pa"ing the

ro"alties, whether he is a resident of a Contracting #tate or not, has in a Contracting#tate a permanent establishment or a fixed base in connection with which the liabilit"

to pa" the ro"alties was incurred, and such ro"alties are borne b" such permanent

establishment or fixed base, then such ro"alties shall be deemed to arise in the #tate in

which the permanent establishment or fixed base is situated$

2$ 1here, b" reason of a special relationship between the pa"er and the

beneficial owner or between both of them and some other person, the amount of the

ro"alties, having regard to the use, right or information for which the" are paid,

exceeds the amount which would have been agreed upon b" the pa"er and the

beneficial owner in the absence of such relationship, the provisions of this Article

shall appl" onl" to the last3mentioned amount$ 9n such case, the excess part of the

pa"ments shall remain taxable according to the laws of each Contracting #tate, due

regard being had to the other provisions of this Agreement$

ART#$"E 1)

Capital Gains

%$ Gains derived b" a resident of a Contracting #tate from the alienation of

immovable propert" referred to in Article 2 and situated in the other Contracting #tatema" be taxed in that other #tate$

&$ Gains from the alienation of movable propert" forming part of the

business propert" of a permanent establishment which an enterprise of a Contracting

#tate has in the other Contracting #tate or of movable propert" pertaining to a fixed


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base available to a resident of a Contracting #tate in the other Contracting #tate for

the purpose of performing independent personal services, including such gains from

the alienation of such a permanent establishment (alone or with the whole enterprise

or of such a fixed base, ma" be taxed in that other #tate$

$ Gains from the alienation of ships or aircraft operated in international

traffic or movable propert" pertaining to the operation of such ships or aircraft shall

be taxable onl" in the Contracting #tate in which the enterprise is a resident$

4$ Gains from the alienation of shares of the capital stoc+ of a compan" the

propert" of which consists directl" or indirectl" principall" of immovable propert"

situated in a Contracting #tate ma" be taxed in that Contracting #tate$

6$ Gains from the alienation of an" propert" other than that referred to in

paragraphs % to 4, shall be taxable onl" in the Contracting #tate of which the alienatoris a resident$

ART#$"E 1*

Independent Personal Services

%$ 9ncome derived b" a resident of a Contracting #tate in respect of

professional services or other activities of an independent character shall be taxable

onl" in that #tate except in one of the following circumstances, when such income

ma" also be taxed in the other Contracting #tate!

a if he has a fixed base regularl" available to him in the other

Contracting #tate for the purpose of performing his activities) in

that case, onl" so much of the income as is attributable to that fixed

base ma" be taxed in that other #tate)

b if his sta" in the other Contracting #tate is for a period or periods

amounting to or exceeding in the aggregate %


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accountants$

ART#$"E 1+

Dependent Personal Services

%$ #ub/ect to the provisions of Articles %2, %


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"rtistes "nd Sportsmen

%$ 5otwithstanding the provisions of Articles %4 and %6, income derived b"

a resident of a Contracting #tate as an entertainer, such as a theatre, motion picture,

radio or television artiste, or a musician, or as a sportsman, from his personal

activities as such exercised in the other Contracting #tate, ma" be taxed in that other

#tate$

&$ 1here income in respect of personal activities exercised b" an entertainer

or a sportsman in his capacit" as such accrues not to the entertainer or sportsman

himself but to another person, that income ma", notwithstanding the provisions of

Articles 8, %4 and %6, be taxed in the Contracting #tate in which the activities of the

entertainer or sportsman are exercised$

$ 5otwithstanding the preceding provisions of this Article, income derived

b" entertainers or sportsmen who are residents of a Contracting #tate from the

activities exercised in the other Contracting #tate under a plan of cultural exchange

between the Governments of both Contracting #tates shall be exempt from tax in that

other #tate$

ART#$"E 18

Pensions

%$ #ub/ect to the provisions of paragraph & of Article %=, pensions and othersimilar remuneration paid to a resident of a Contracting #tate in consideration of past

emplo"ment shall be taxable onl" in that #tate$

&$ 5otwithstanding the provisions of paragraph %, pensions paid and other

similar pa"ments made b" the Government of a Contracting #tate or a local authorit"

thereof under a public welfare scheme of the social securit" s"stem of that #tate shall

be taxable onl" in that #tate$

ART#$"E 19

Government Service

%$ a Remuneration, other than a pension, paid b" the Government of a

Contracting #tate or a political subdivision or a local authorit" thereof to an individual

in respect of services rendered to the Government of that #tate or subdivision or a


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local authorit" thereof, in the discharge of functions of a governmental nature, shall be

taxable onl" in that #tate$

b owever, such remuneration shall be taxable onl" in the other Contracting

#tate if the services are rendered in that other #tate and the individual is a resident ofthat other #tate who!

(i is a national of that #tate) or

(ii did not become a resident of that #tate solel" for the purpose of

rendering the services$

&$ a An" pension paid b", or out of funds to which contributions are made b"

the Government of a Contracting #tate or a political subdivision or a local authorit"

thereof to an individual in respect of services rendered to the Government of that #tateor subdivision or a local authorit" thereof shall be taxable onl" in that #tate$

b owever, such pension shall be taxable onl" in the other Contracting

#tate if the individual is a resident of, and a national of, that other #tate$

$ The provisions of Articles %6, %2, %8 and %< shall appl" to remuneration

and pensions in respect of services rendered in connection with a business carried on

b" the Government of a Contracting #tate or a political subdivision or a local authorit"

thereof$

ART#$"E 20

Teachers "nd Researchers

%$ Remuneration which an individual who is or was immediatel" before

visiting a Contracting #tate, a resident of the other Contracting #tate and who is

present in the first3mentioned #tate for the primar" purpose of teaching, giving

lectures or conducting research at a universit", college, school or educational

institution or scientific research institution recogni0ed b" the Government of the

first3mentioned #tate derives for the purpose of such teaching, lectures or research

shall not be taxed in the first3mentioned #tate, for a period of two "ears from the date

of his first arrival in the first3mentioned #tate$

&$ The provisions of paragraph % of this Article shall not appl" to income

from research if such research is underta+en not in the public interest but primaril" for


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Copyright 1994-2014 CD Technologies Asia, Inc. Taxation 2013 1"

the private benefit of a specific person or persons$

ART#$"E 21

Stdents "nd Trainees

%$ Pa"ments which a student, business apprentice or trainee who is or was

immediatel" before visiting a Contracting #tate a resident of the other Contracting

#tate and who is present in the first3mentioned #tate solel" for the purpose of his

education or training receives for the purpose of his maintenance, education or

training shall not be taxed in that #tate, provided that such pa"ments arise from

sources outside that #tate$

&$ 9n respect of grants, scholarships and remuneration from emplo"ment not

covered b" paragraph %, a student, business apprentice or trainee described inparagraph % shall, in addition, be entitled during such education or training to the

same exemptions, reliefs or reductions in respect of taxes available to residents of the

#tate which he is visiting$

ART#$"E 22

$ther Income

%$ 9tems of income of a resident of a Contracting #tate, wherever arising, not

dealt with in the foregoing Articles of this Agreement shall be taxable onl" in that

#tate$

&$ The provisions of paragraph % shall not appl" to income, other than

income from immovable propert" as defined in paragraph & of Article 2, if the

recipient of such income, being a resident of a Contracting #tate, carries on business

in the other Contracting #tate through a permanent establishment situated therein, or

performs in that other #tate independent personal services from a fixed base situated

therein, and the right or propert" in respect of which the income is paid is effectivel"

connected with such permanent establishment or fixed base$ 9n such case the

provisions of Article 8 or Article %4, as the case ma" be, shall appl"$

ART#$"E 2)

%ethods For The Elimination $f Doble Taxation

%$ 9n China, double taxation shall be eliminated as follows!


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1here a resident of China derives income from the Philippines the amount of

tax on that income pa"able in the Philippines in accordance with the provisions of this

Agreement, ma" be credited against the Chinese tax imposed on that resident$ The

amount of the credit, however, shall not exceed the amount of the Chinese tax on thatincome computed in accordance with the taxation laws and regulations of China$$

&$ 9n the Philippines, double taxation shall be eliminated as follows!

#ub/ect to the laws of the Philippines and the limitations thereof regarding the

allowance of a credit against Philippine tax of tax pa"able in an" countr" other than

the Philippines$ Chinese tax pa"able in respect of income derived from China shall be

allowed as credit against the Philippine tax pa"able in respect of that income$

ART#$"E 2*

&on'Discrimination

%$ 5ationals of a Contracting #tate shall not be sub/ected in the other

Contracting #tate to an" taxation or an" re.uirement connected therewith, which is

other or more burdensome than the taxation and connected re.uirements to which

nationals of that other #tate in the same circumstances are or ma" be sub/ected$ This

provision shall, notwithstanding the provisions of Article %, also appl" to persons who

are not residents of one or both of the Contracting #tates$

&$ The taxation on a permanent establishment which an enterprise of aContracting #tate has in the other Contracting #tate shall not be less favorabl" levied

in that other #tate than the taxation levied on enterprises of that other #tate carr"ing

on the same activities$ This provision shall not be construed as obliging a Contracting

#tate to grant to residents of the other Contracting #tate an" personal allowances,

reliefs and reductions for taxation purposes on account of civil status or famil"

responsibilities which it grants to its own residents$

$ >xcept where the provisions of paragraph % of Article =, paragraph 8 of

Article %%, or paragraph 2 of Article %&, appl", interest, ro"alties and other

disbursements paid b" an enterprise of a Contracting #tate to a resident of the otherContracting #tate shall, for the purpose of determining the taxable profits of such

enterprise, be deductible under the same conditions as if the" had been paid to a

resident of the first3mentioned #tate$

4$ >nterprises of a Contracting #tate, the capital of which is wholl" or partl"


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owned or controlled, directl" or indirectl", b" one or more residents of the other

Contracting #tate, shall not be sub/ected in the first3mentioned #tate to an" taxation or

an" re.uirement connected therewith which is other or more burdensome than the

taxation and connected re.uirements to which other similar enterprises of the

first3mentioned #tate are or ma" be sub/ected$

ART#$"E 2+

%tal "!reement Procedre

%$ 1here a person considers that the actions of one or both of the

Contracting #tates result or will result for him in taxation not in accordance with the

provisions of this Agreement, he ma", irrespective of the remedies provided b" the

domestic law of those #tates, present his case to the competent authorit" of the

Contracting #tate of which he is a resident or, if his case comes under paragraph % ofArticle &4, to that of the Contracting #tate of which he is a national$ The case must be

presented within three "ears from the first notification of the action resulting in

taxation not in accordance with the provisions of the Agreement$

&$ The competent authorit" shall endeavor, if the ob/ection appears to it to be

/ustified and if it is not itself able to arrive at a satisfactor" solution, to resolve the

case b" mutual agreement with the competent authorit" of the other Contracting #tate,

with a view to the avoidance of taxation which is not in accordance with the

Agreement$

$ The competent authorities of the Contracting #tates shall endeavor to

resolve b" mutual agreement an" difficulties or doubts arising as to the interpretation

or application of the Agreement$ The" ma" also consult together for the elimination of

double taxation in cases not provided for in the Agreement$

4$ The competent authorities of the Contracting #tates ma" communicate

with each other directl" for the purpose of reaching an agreement in the sense of

paragraphs & and $ 1hen it seems advisable for reaching agreement, representatives

of the competent authorities of the Contracting #tates ma" meet together for an oral

exchange of opinions$

ART#$"E 2

Exchan!e $f Information


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%$ The competent authorities of the Contracting #tates shall exchange such

information as is necessar" for carr"ing out the provisions of this Agreement or of the

domestic laws of the Contracting #tates concerning taxes covered b" the Agreement,

insofar as the taxation thereunder is not contrar" to the Agreement, in particular forthe prevention of evasion of such taxes$ The exchange of information is not restricted

b" Article %$ An" information received b" a Contracting #tate shall be treated as secret

and shall be disclosed onl" to persons or authorities (including courts and

administrative bodies involved in the assessment or collection of, the enforcement or

prosecution in respect of, or the determination of appeals in relation to, the taxes

covered b" the Agreement$ #uch persons or authorities shall use the information onl"

for such purposes$ The" ma" disclose the information in public court proceedings or

in /udicial decisions$

&$ 9n no case shall the provisions of paragraph % be construed so as toimpose on a Contracting #tate the obligation!

a to carr" out administrative measures at variance with the laws and

administrative practice of that or of the other Contracting #tate)

b to suppl" information which is not obtainable under the laws or in

the normal course of the administration of that or of the other

Contracting #tate)

c to suppl" information which would disclose an" trade, business,

industrial, commercial or professional secret or trade process, or

information, the disclosure of which would be contrar" to public

polic" (ordre public$

ART#$"E 2-

Diplomatic "!ents "nd Conslar $fficers

5othing in this Agreement shall affect the fiscal privileges of diplomatic agents

or consular officers under the general rules of international law or under the

provisions of special agreements$

ART#$"E 28

Entry Into Force


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%$ After mutual notifications of the completion of legal procedures b" the

Contracting #tates, the present Agreement shall enter into force on the date of the later

notification$

&$ This Agreement shall have effect as respects income relating to the

taxable "ears beginning on or after the first da" of ?anuar" next following that in

which this Agreement enters into force$

ART#$"E 29

Termination

This Agreement shall continue in effect indefinitel" but either of the

Contracting #tates ma", on or before the thirtieth da" of ?une in an" calendar "ear

beginning after the expiration of a period of five "ears from the date of its entr" intoforce, give written notice of termination to the other Contracting #tate through the

diplomatic channel$ 9n such event this Agreement shall cease to have effect as respects

income relating to the taxable "ears beginning on or after the first da" of ?anuar" in

the calendar "ear next following that in which the notice of termination is given$

95 19T5>## whereof the undersigned, dul" authori0ed thereto, have signed

this Agreement$

D@5> at ;ei/ing, China on the % G@>R5B>5T @- -@R T> G@>R5B>5T @-

T> R>P;9C @- T> P>@P>'# R>P;9C @-

T> P99PP95># C95A

.%G&/ E&GAR&O B/ E%#R#T! .%G&/ J#N REN#NG

PR@T@C@

At the moment of signing the Agreement for the Avoidance of Double Taxation and

the Prevention of -iscal >vasion with Respect to Taxes on 9ncome, this da" concluded

between the Republic of the Philippines and the People's Republic of China, the undersigned


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have agreed that the following provisions shall form an integral part of the Agreement$

%$ 1ith reference to Article %, nothing in this Agreement shall be construed as

preventing the Philippines from taxing its nationals who ma" be residing in China, in

accordance with its domestic laws$ owever, no credit shall be given for taxes paid inpursuance thereto$

&$ 1ith reference to Article ## whereof the undersigned, dul" authori0ed thereto, have signed this

Protocol$

D@5> at ;ei/ing, China on the % G@>R5B>5T @- -@R T> G@>R5B>5T @-

T> R>P;9C @- T> P>@P>'# R>P;9C @-

T> P99PP95># C95A

(#gd$ >DGARD@ ;$ >#P9R9T (#gd$ ?95 R>5E95G

RP China Tax Treaty

Documents

Transcript of RP China Tax Treaty