PHILIPPINES Law and Practice Contributed by: Carina Laforteza, Joanna Marie Joson, Kristina Paola Frias and Joanna Marie Reyes, SyCip Salazar Hernandez & Gatmaitan
9.14 Offshore IP Provisions Revenues earned by offshore companies from licens - ing IP in the Philippines are subject to FWT of 25% (royalty withholding tax regime). The FWT is withheld and remitted to the BIR by the local income payors. This rate may be reduced if a tax treaty applies. As of 2025, foreign digital service providers are also subject to a 12% VAT on digital services (eg, software, online platforms), in addition to FWT, which may apply to certain IP licensing arrangements. IP owners that are residents in countries that have tax treaties with the Philippines may avail themselves of a preferential tax rate on royalties derived from the licensing of IP in the Philippines.
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