A tax treaty formally known as convention or agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (and on capital) could be defined in terms of its purpose.  First, a tax treaty is intended to promote international trade and investment in several ways, the most important of which is by allocating taxing jurisdiction between the Contracting States so as to eliminate or mitigate double taxation of income.  Second, a tax treaty is intended to permit the Contracting States to better enforce their domestic laws so as to reduce tax evasion.  These purposes are in fact incorporated in the title and the preamble.

The Philippines has thirty-seven (37) effective tax treaties. 

The International Tax Affairs Division (ITAD).

Income taxes imposed by the domestic laws of the Contracting States, including substantially similar taxes that may be imposed later, in addition to, or in place, are covered by the tax treaties.

The business profits of a resident of a Contracting State shall not be taxable in the Philippines unless that enterprise of a resident of a Contracting State carries on business in the Philippines through a permanent establishment.

PE is defined as a fixed place of business through which the business of the enterprise is wholly or partly carried on.  The concept of permanent establishment is used to determine the rights of a Contracting State to tax the business profits of enterprises of the other Contracting State. 

Under this concept, profits of an enterprise of a Contracting State are not taxable by the other Contracting State, unless the enterprise carries on business through a permanent establishment situated in the other Contracting State.

The appearance of the MFN clause in the tax treaty means that a Contracting State will grant to a resident of the other Contracting State the same lower rate of tax or exemption the former has granted to a resident of a third State.

Income from an immovable property is taxable in the Contracting State where the property is situated.  This term is generally defined under the domestic laws of the Contracting States.  However, this is further defined in the tax treaties.

Gains from the alienation of immovable property or movable property forming part of the business property of a permanent establishment or pertaining to a fixed base are taxed in the Philippines if the immovable property or permanent establishment or fixed base is located here. 

Country Date of Effectivity Date and Venue of Signature1. Australia January 1, 1980 May 11, 1979, Manila, Philippines2. Austria January 1, 1983 April 4, 1981, Vienna, Austria3. Bahrain January 1, 2004 November 7, 2001, Manila, Philippines4. Bangladesh January 1, 2004 September 8, 1997, Manila, Philippines5. Belgium January 1, 1981 October 2, 1976, Manila, Philippines6. Brazil January 1, 1992 Sept. 29, 1983, Brasilia, Brazil7. Canada January 1, 1977 March 11, 1976, Manila, Philippines8. China January 1, 2002 November 18, 1999, Beijing, China9. Czech January 1, 2004 November 13, 2000, Manila, Philippines10. Denmark (Renegotiated) January 1, 1998 June 30, 1995, Copenhagen, Denmark11. Finland January 1, 1982 October 13, 1978, Manila, Philippines12. France January 1, 1978 January 9, 1976, Kingston, Jamaica13. Germany January 1, 1985 July 22, 1983, Manila, Philippines14. Hungary January 1, 1998 June 13, 1997, Budapest, Hungary15. India January 1, 1995 February 12, 1990, Manila, Philippines16. Indonesia January 1, 1983 June 18, 1981, Manila, Philippines17. Israel January 1, 1997 June 9, 1992, Manila, Philippines18. Italy January 1, 1990 December 5, 1980, Rome, Italy19. Japan January 1, 1981 February 13, 1980, Tokyo, Japan

Country Date of Effectivity Date and Venue of Signature20. Korea January 1, 1987 February 21, 1984, Seoul, Korea21. Malaysia January 1, 1985 April 27, 1982, Manila, Philippines22. Netherlands January 1, 1992 March 9, 1989, Manila, Philippines23. New Zealand January 1, 1981 April 29, 1980, Manila, Philippines24. Norway January 1, 1998 July 9, 1987, Manila, Philippines25. Pakistan January 1, 1979 February 22, 1980, Manila, Philippines26. Poland January 1, 1998 September 9, 1992, Manila, Philippines27. Romania January 1, 1998 May 18, 1994, Bucharest, Romania28. Russia January 1, 1998 April 26, 1995, Manila, Philippines29. Singapore January 1, 1977 August 1, 1977, Manila, Philippines30. Spain January 1, 1994 March 14, 1989, Manila, Philippines31. Sweden (Renegotiated) January 1, 2004 June 24, 1998, Manila, Philippines32. Switzerland January 1, 2002 June 24, 1998, Manila, Philippines33. Thailand January 1, 1983 July 14, 1982, Manila, Philippines34. United Arab Emirates January 1, 2009 September 21, 2003, Dubai, UAE35. England January 1, 1979 June 10, 1976, London, United Kingdom36. United States of America January 1, 1983 October 1, 1976, Manila, Philippines37. Vietnam January 1, 2004 November 14, 2001, Manila, Philippines