The Government of the Republic of Finland and the Government of the Republic of the Philippines,
Desiring to conclude a Protocol to amend the Convention between the Contracting Parties for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, signed at manila on 13 October 1978,
Have agreed as follows:
ARTICLE 1
Paragraphs 1 and 2 of Article 10 of the Convention shall be deleted and replaced by the following:
a) Dividends paid by a company which is a resident of Finland to a resident of the Philippines shall be exempt from Finnish tax on dividends;
b) Notwithstanding the provisions of sub-paragraph a), where the recipient is an individual or a body of persons other than a company which controls directly at least 10 per cent of the voting power in the company paying the dividends, such dividends may also be taxed in Finland and according to Finnish law, but the tax so charged shall not exceed 5 per cent of the gross amount of the dividends.
ARTICLE II
Sub-paragraph b) of paragraph 1 of Article 22 of the Convention shall be deleted and replaced by the following, and the following new sub-paragraph d) shall be inserted immediately after the existing sub-paragraph c):
“b) Notwithstanding the provision of sub-paragraph a), dividends paid by a company which is a resident of the Philippines to a company which is a resident of Finland and controls directly at least 10 per cent of the voting power in the company paying the dividends shall be exempt from Finnish tax.”
“d) Where in accordance with any provision of the Convention income derived by a resident of Finland is exempt from tax in Finland, Finland may nevertheless, in calculating the amount of tax on the remaining income of such person, take into account the exempted income.”
ARTICLE III
a) in respect of taxes withheld at source, on income derived on or after 1 January in the calendar year next following the year in which the Protocol enters into force;
b) in respect of other taxes on income, for taxes chargeable for any tax year beginning on or after 1 January in the calendar year next following the year in which the Protocol enters into force.
In witness whereof the undersigned, duly authorized thereto, have signed this Protocol
Done in duplicate at Manila this 21st day of December 1993, in the English language.
For the Government of (Sgd.) |
For the Government of (Sgd.) |
Entry into Force: December 2, 2015