Tax Treaty Relief Procedure in the Philippines: A BIR Filing Guide

A nonresident earning dividends, interest, or royalties from Philippine sources may pay a lower — or zero — withholding tax under an applicable tax treaty, but only if a Tax Treaty Relief Application (TTRA) is filed correctly. Under Revenue Memorandum Order No. 72-2010, the application must be filed with the Bureau of Internal Revenue's International Tax Affairs Division (ITAD) before the transaction, meaning before the first taxable event. The correct BIR Form 0901 series must be used, complete documentary requirements attached, and the application filed in three copies. Filing with any other BIR office, or after the transaction, disqualifies the application.

Which BIR Form 0901 to file

RMO No. 72-2010 replaced the old BIR Form No. 0901 and BIR Form No. 1928 with a new series of forms, each tied to the treaty article being invoked:

• BIR Form No. 0901-D — Dividend Income
• BIR Form No. 0901-I — Interest Income
• BIR Form No. 0901-R — Royalty Income
• BIR Form No. 0901-P — Business Profits
• BIR Form No. 0901-T — Profits from Shipping and Air Transport
• BIR Form No. 0901-C — Capital Gains
• BIR Form No. 0901-S — Income from Services
• BIR Form No. 0901-O — Other Income Earnings

Applications for gains from the sale or transfer of shares of stock in a Philippine corporation remain covered by Revenue Memorandum Order No. 30-2002 as to fees.

General documentary requirements

Under Section 3 of RMO No. 72-2010, every TTRA — submitted in three copies and signed by the income earner or a duly authorized representative — must be accompanied by:

1. Proof of residency — an original consularized certification from the tax authority of the income earner's country, confirming residency for the tax year concerned.
2. Articles of Incorporation (for non-individual income earners) — a photocopy, with a consularized certification that it is a faithful reproduction.
3. Special Power of Attorney — a consularized SPA or written authorization where a withholding agent or local representative files on the income earner's behalf. If the filer is the local representative of the withholding agent, a Letter of Authorization from the withholding agent is also required.
4. Certification of business presence in the Philippines — from the Securities and Exchange Commission for corporations or partnerships, or from the Department of Trade and Industry for individuals.
5. Certificate of No Pending Case — a sworn statement on whether the transaction is under investigation, audit, protest, refund claim, collection, or judicial appeal.

Additional requirements for dividends, interest, and royalties

Dividends (Section 7). A duly notarized certificate from the Corporate Secretary of the domestic corporation must show the dividend declaration details and attached Board Resolution, the number, value and type of shares held by the nonresident, the percentage of ownership as of the record and payment dates, the acquisition dates, and the mode of acquisition. A certified copy of Board of Investments (BOI) registration is required, if applicable.

Interest (Section 8). For loans or borrowings, the applicant submits a notarized Corporate Secretary certificate, the notarized loan agreement (BSP-registered loans need not be notarized but require the BSP registration), proof of inward remittances of the loan proceeds, BOI registration if applicable, and proof of loan guarantee or insurance where relevant. For interest from investments or deposits, an original bank certification attesting to the nature, type, and presence of the investment or deposit, including the date it was placed, is required.

Royalties (Section 9). The applicant submits the notarized Royalty, Technology Transfer, or Licensing Agreement, plus — when applicable — BOI registration, Philippine Economic Zone Authority (PEZA) registration of the payor or withholding agent, and Intellectual Property Office (IPO) registration.

Where and when to file

Under Section 14, all TTRAs must be submitted to and received only by ITAD. Filing with any other BIR office renders the application improperly filed. Filing must always be made before the transaction — before the first taxable event, defined as the first or only time the income payor is required to withhold tax (or should have withheld had the transaction been taxed). For BIR Form No. 0901-C applications, filing is before the due date of the documentary stamp tax on the sale of shares.

Failure to properly file with ITAD within the prescribed period disqualifies the TTRA under the RMO.

How ITAD processes the application

Within seven (7) working days from receipt, ITAD notifies the filer of any lacking, missing, or insufficient documents, directing submission within fifteen (15) working days from receipt of the Notice of Submission of Documents. Failure to comply means the TTRA is archived, without prejudice to re-filing covering exactly the same transaction.

Where the application seeks confirmation of preferential treaty rates, the ruling must be available for release after sixty (60) working days from receipt of the TTRA or of complete documents, whichever comes later. Where there is no issue on income characterization, the period is thirty (30) working days. A ruling adverse to the nonresident income earner may be elevated to the Secretary of Finance within thirty (30) days from receipt; no motion for reconsideration is entertained.

Requests based on hypothetical or future transactions, or unaccompanied by complete documents, fall within the "No-Ruling Area" under Section 16 and will not be accepted by ITAD.

Frequently asked questions

Can the withholding agent file the tax treaty relief application for the foreign income earner? Yes. The withholding agent or the local representative in the Philippines may file, provided a consularized Special Power of Attorney or written authorization from the income earner is attached.

What happens if the TTRA is filed after the transaction? Filing must be made before the first taxable event. A late filing disqualifies the TTRA under RMO No. 72-2010.

Where exactly is the TTRA filed? Only with the International Tax Affairs Division (ITAD) of the BIR. Submission to any other BIR office is considered improperly filed.

Practical takeaways

• File the correct BIR Form 0901 for the treaty article invoked — 0901-D for dividends, 0901-I for interest, 0901-R for royalties.
• Submit three signed copies with complete general and article-specific documentary requirements.
• File only with ITAD, and always before the first taxable event.
• Respond to any Notice of Submission of Documents within fifteen (15) working days to avoid archiving.
• Expect the ruling within sixty (60) working days, or thirty (30) working days where there is no income characterization issue.

Primary sources

The rules discussed above are drawn from the following issuances, embedded here in full for your reference.

RR No. 11-2018 — Amends certain provisions of RR No. 2-98, as amended, to implement further amendments introduced by RA No. 10963 (TRAIN Law) relative to withholding of Income Tax (Published in Manila Bulletin on March 19, 2018) Digest | Full Text | Annex A | Annex B-1 | Annex B-2 | Annex B-3 | Annex C | Annex D | Annex E | Annex FOpen in Law LibraryDownload PDF

RR No. 16-2005 — Prescribes the Consolidated Value-Added Tax Regulations of 2005 superseding RR No. 14-2005 (Published in Manila Times on Oct. 21, 2005) Digest | Full TextOpen in Law LibraryDownload PDF

RMO No. 72-2010 — Prescribes the guidelines on the processing of Tax Treaty Relief Applications pursuant to existing Philippine Tax Treaties Digest | Full Text | Annex A | Annex B | Annex C | Annex D | FormsOpen in Law LibraryDownload PDF

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.