- The Philippine tax authority has clarified the tax treatment of cross-border services.
- Cross-border services may be subject to final withholding tax and final withholding VAT.
- The source of income for cross-border services is determined by the location where the underlying income-producing activity took place.
- Cross-border services include consulting services, IT outsourcing, financial services, telecommunications, engineering and construction, education and training, tourism and hospitality, and other similar services.
- The income derived from essential income-generating activities in the Philippines is considered sourced from the Philippines for tax purposes.
Source: insightplus.bakermckenzie.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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