President Rodrigue Duterte's agenda to develop much-needed infrastructure across the Philippines relies heavily on tax collection. His administration has made tax returns a significant part of economic policy and tax reforms are expected to bring in as much as an additional 2% of GDP in 2019. GDP growth is expected to show a continued upwards trajectory from 6.9% in 2017 to 7% in 2018, according to World Bank data.
Approval for a first reform package, out of a planned six, is pending in the legislature and includes the lowering of personal income tax (PIT) and raising taxes on fuel and sugary drinks, while also removing VAT exemptions.
As part of the reform, the PIT system would be simplified. The maximum PIT rate would be lowered to 25% over time, except for the highest income bracket. The policies are consistent with Duterte's socioeconomic agenda. The VAT system would be expanded; this would be carried out by reducing many of the current exemptions. The estate tax would be reformulated to a single tax rate of 6%.
An increase on excise tax on petroleum products was postponed by six months to January 1 2018.
A second reform package scheduled to come before the legislature in 2018 seeks to reduce the corporate tax rate to 25% from 30% over time, mirroring changes to personal income tax.
The government is also looking to relax bank secrecy laws to crack down on tax fraud.
Corporates have increasingly come under the spotlight and in 2016; the Bureau of Internal Revenue has begun to increase audit frequency from once to up to three times per year.
In June, the government accepted the largest tax settlement in the Philippines to date, PHP 25 billion ($490 million) by tobacco company Mighty Corporation, which was facing three tax evasion charges from the Bureau of Internal Revenue. The president has also repeatedly threatened to slap mining companies with an environmental tax.
Du-Baladad and Associates (BDB Law)
20th Floor Chatham House, Rufino Corner Valero Sts.,
Salcedo Village, 1227 Makati City, Philippines
Managing Partner & CEO
Phone: + 63 2 403 2001 loc. 300
Main areas of focus:
Corporate Tax, Mergers & Acquisitions, Transfer Pricing, International Tax & Permanent Establishments, Indirect Tax, Customs, Global Mobility, Tax Controversy
SGV & Co.
6760 Ayala Avenue
1226 Makati City
Regional Tax Leader
Eng Ping Yeo
Tel: +603 7495 8288
Philippines Tax Leader
Luis Jose P. Ferrer
Tel: +63 2 8948362
Business Tax Services
Jules E. Riego
Tel: +63 2 8948117
Global Compliance and Reporting
Henry M. Tan
Tel: +63 2 8948350
People Advisory Services
Czarina R Miranda
Tel: +63 2 8948304
Lucil Q. Vicerra
Tel: +63 2 8948115
International Tax Services
Fidela T. Isip-Reyes
Tel: +63 2 894 8204
Veronica A. Santos
Tel: +63 2 8948172
Romulo S. Danao
Tel: +63 2 894 8392
Wilfredo U. Villanueva
Tel: +63 2 8948180
Main Office: 15F and 4F Strata 2000, F. Ortigas Jr. Road
Ortigas Center Pasig City, 1605
Satelite Office: 7th Flr., Infinity Tower, 26th St.,
Bonifacio Global City, Taguig City
Telefax: +632 696 0988; 696 0687 & 703 4140
MARK S. GORRICETA
VINCENT PAUL L. SAAVEDRA
A full service law firm, Gorriceta Africa Cauton & Saavedra is one of the leaders in the fields of Capital Markets, Mergers & Acquisitions and Taxation in the Philippines.
The firm offers a full array of services such as corporate law, capital markets, M&A's, taxation, estate planning, litigation, transportation law, maritime, intellectual property law, labor law and business law, among others.
The firm helps solve problems for domestic and foreign clients and corporations. The firm's experience is built on securities offerings, restructuring and cross border acquisitions. The firm has been involves or is involved with several listing applications at the Philippine Stock Exchange.
The firm also specializes in providing counsel on the whole legal spectrum of doing business in the Philippines that ensures tax efficiency from project conceptualization to capital and profits repatriation. The firm has extensive experience in complicated tax structures, tax examinations, and investigations and tax ruling applications, including tax free ruling applications. In recent years, Gorriceta Africa Cauton & Saavedra has provided tax advice to most of the Top 100 companies in the Philippines.
|Corporate Income Tax||30%|
|Branch Tax||30%||15%||B F|
|Capital gains tax rate|
|Net Operating Losses (years)|
|Interest on peso deposits||20%||D E|
|Royalties from, for example, patents, know-how||20%||E|
A) These rates apply to capital gains on shares in domestic corporations not traded on a local stock exchange.
B) Certain types of Philippine-source income of foreign corporations are taxed at preferential rates.
C) Under domestic law, dividends paid to domestic corporations or resident foreign corporations are not subject to tax. Dividends paid to non-resident foreign corporations are generally subject to a final withholding tax of 30%. However, this rate may be reduced to 15% if certain conditions are met.
D) The withholding tax rate for interest on peso deposits derived by domestic and resident foreign corporations is 20%.
E) Under domestic law, if the recipient is a non-resident foreign corporation, the final withholding tax rate is 30%. For reduced rates under tax treaties for non-resident foreign corporations.
F) Regional operating headquarters taxed at 10%. Minimum income of 2% applies to gross income, unless regular corporate tax rate is greater, and 10% surtax levied on improperly accumulated earnings. Additional 15% tax imposed on remittances by branch to foreign head office.
Baniqued Layug & Bello is a respected firm that specialises in corporate and international taxation. The firm advises national and international clients in tax planning, business vehicles, as well as in devising tax efficient corporate structures. The firm has also represented clients in tax investigations at the administrative and judicial levels and has provided special counsel in matters relating to M&A, joint ventures, and energy and infrastructure projects.
Carlos Baniqued is the co-founder of the firm and has been the managing partner since January 2016. Baniqued is recognised as a leading tax practitioner in the Philippines and has a wealth of experience advising high-net-worth individuals and multinationals in a broad range of tax matters.
Clients of the firm include British American Tobacco, Coca Cola, GE, LafargeHolcim, Getty Images, Hawaiian Airlines, among others.
Benedicta Du-Baladad oversees the tax practice at Du-Baladad and Associates – WTS. The firm comprises three partners and 22 other fee earners, 17 of which specialise in indirect and corporate tax. New members of the team include Danielle Ann Cuevas, Mariel Montillano, Mary Grace Domatog, Mary Grace Manuel Maria, Erichelle V. Garayblas and Shiendy Loufer D, Casaña.
Du-Baladad and Associates – WTS offers services in assessments, disputes and tax claims, tax Litigation, tax advisory and tax planning, incentives availment assistance, TP, international tax, tax compliance and tax advocacy.
Clients of the firm mainly come from sectors such as banking, oil, power, information technology, real estate and construction.
Isla Lipana & Co is PwC's member firm in the Philippines. The firm offers services in tax planning, tax opinions and rulings, tax assessments, claims for tax refunds, tax returns and audits among other things. Maria Lourdes P. Lim is the firm's tax managing partner and has more than 16 years of industry experience advising international clients across a range of sectors. Lim's practice focuses on corporate structuring and taxation, with an emphasis on inbound and outbound investment planning and cross border acquisitions.
Navarro Amper & Co is part of the Deloitte network. The firm has a well-established tax practice that provides a wide array of tax services.
The firm has a multidisciplinary team comprising lawyers and public accountants. Fredieric Landicho oversees the firm's tax practice. Landicho has more than 17 years of experience in tax and legal services, including assistance in the privatisation of government-owned corporations. Landicho's expertise also extends to tax advisory, due diligence, tax refunds, structuring and litigation support for local and multinational clients.
Another key member of the team is Walter Abela, who is the Philippines M&A tax leader. Abela has more than 19 years of industry experience. His expertise includes tax assessments, due diligence, tax rulings, government regulatory registration and tax consultancy for multinationals.
In October 2016, the firm assisted a client in a tax investigation involving income tax, withholding tax and VAT, achieving a reduction in the previously assessed amount by approximately $1 million. Partner Richard Lapres and senior tax manager Tristan Lopez also represented a different client before the Bureau of Customs.
Punongbayan & Araullo provides tax advisory, tax compliance, corporate tax services and tax education and advocacy to clients from a range of industries.
Lea Roque is the principal head of the tax advisory and compliance practice. Roque has been working in the field of tax for 21 years and has advised clients on international tax, tax due diligence, M&A, personal income tax advisory and planning and tax-efficient structuring. The firm benefits from being part of Grant Thornton's international member network.
Quisumbing Torres's tax practice is led by Dennis Dimagiba. The firm is part of Baker McKenzie's network, and offers services in tax planning and tax and customs controversies. The team also regularly advises clients on tax structuring for M&A, corporate reorganisations, tax incentives, real estate transactions, income and withholding taxes and tax treaty issues.
The tax practice comprises two partners and four other professionals who all specialise in indirect tax, corporate tax, tax dispute and tax compliance. A key member of the team is lawyer Ronald Bernas, who has extensive experience in handling tax controversies.
This year, the firm advised a multinational company on the tax implications of its excess accumulated retained earnings. It also advised a different client on the tax implications of its proposed restructuring in the Philippines. This involved the setting up of an offshore holding company and a regional operating headquarters, a merger between two local entities and a backdoor listing.
Maria Carmela Peralta is the head of tax at RG Manabat & Co. The firm is part of KPMG and comprises nine partners and 117 other professionals, 33 of which specialise in tax disputes and 93 that focus on tax compliance and tax consultancy. All employees are equipped to provide services in corporate tax, indirect and business taxes.
RG Manabat's areas of expertise also include transfer pricing and international trade and customs engagements.
This year, the firm provided tax advisory to an international group on the tax implications of a potential investment in Philippine government's infrastructure project. It also advised a client on the VAT implications of the purchases and sales of a Philippine entity engaged in a resort business. In addition, it assisted a large multinational company with an audit proceeding conducted by the BIR. This included evaluating documents and preparing accounting reconciliations among other things.
The tax team at Salvador & Associates, Taxand Philippines has extensive experience advising clients in complex tax matters arising from transactions, controversies and general business operations.
The firm offers clients services in tax planning, corporate transactions, estate and family wealth planning, reorganisations and tax treaty issues. It has also assisted multinationals before the Court of Tax Appeals and the Supreme Court.
The tax practice is led by managing partner Serafin Salvador, who has more than 30 years of experience as a tax lawyer. Other key members of the team include partners Martin Ignacio Mijares, Maria Rosario Bernardo, Mary Rose Pascual and Jerome Joseph Arnaldo.
The firm serves companies in mining, real estate, telecommunications, construction, automotive, pharmaceutical and healthcare, leisure, manufacturing and outsourcing sectors.
SyCip Gorres Velayo & Co is well-known across the Philippines and marked 70 years of existence in 2016. The firm has been affiliated with EY since 2002, and has since then expanded its multidisciplinary offering. The tax practice provides services in tax accounting, tax policy and controversy, transactional tax, TP, global compliance, VAT, global trade as well as local and international tax advisory. Luis Ferrer heads the firm's tax controversy practice while Wilfredo Villanueva leads the firm's tax policy practice.
Villanueva assists clients with corporate tax planning, direct and indirect tax, local tax and international issues relating to transactional investment. Ferrer provides tax advisory services on national and international tax matters and has represented clients before the Department of Finance and the Philippine Economic Zone Authority, among other agencies.
Angelo Patrick Advincula oversees the tax practice at Zambrano Gruba Caganda & Advincula. The firm provides high-grade contentious and non-contentious tax advice to a variety of Fortune 500 companies.
Over the past year, the firm represented Air Philippines Corporation before the Court of Tax Appeals in relation to a tax refund for imported aviation fuel from March to October 2008. It also assisted the Philippine National Bank in relation to a tax assessment for fiscal year 1997.
The firm comprises six partners who all render services in indirect tax, corporate tax and tax disputes. A key member of the team is Jorge Alfonso Melo who specialises in litigation, dispute resolution, M&A, banking and special projects.
"We have worked with Zambrano Gruba Caganda & Advincula since 2006. Their services have been central to our tax claims against the Philippine taxing authority" said one client.
|Tier 1- Philippines|
|Isla Lipana & Co|
|Navarro Amper & Co|
|RG Manabat & Co|
|SyCip Gorres Velayo & Co|
|Tier 2- Philippines|
|Baniqued Layug & Bello|
|Salvador & Associates, Taxand Philippines|
|Zambrano Gruba Caganda & Advincula|
|Tier 3- Philippines|
|Du-Baladad and Associates - WTS|
|Punongbayan & Araullo|