The Government of the United Arab Emirates and the Government of the of Republic the Philippines, Have agreed on signing at 23rd September 2003 of the Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital upon the following provision which shall form an integral part of the said Agreement;
(1) With reference to Article 4 (Resident), paragraph 1:
For purposes of Article 4, paragraph 1, in the case of the Philippines, the term "resident" shall also include its nationals.
(2) With reference to Article 7 (Business Profits), paragraph 1:
Without prejudice to the provisions of Article 7, paragraph 1, the profits of an enterprise may be taxed in the other State but only insofar as is attributable to sales of goods or merchandise, or other business activities of the same or similar kind as those being carried on through the permanent establishment in that other Contracting State; if the sale or business activities were made or carried on with the view to evade taxation in that other Contracting State, the Contracting States shall consult each other in such a case.
(3) With reference to Article 8 (Shipping and Air Transport), paragraph 1:
The provisions of this Article shall also be applied to profits derived from and the capital of Gulf Air or a successor entity thereof but only as to such part of the profits or the capital as corresponds to the share in such carrier owned by the United Arab Emirates.
(4) With reference to Article 10 (Dividends) paragraph 3:
For purposes of Article 10, paragraph 3, in the case of the United Arab Emirates, the governmental institutions or entities exempt from tax on dividends, being the beneficial owner thereof, shall include but not limited to the Abu Dhabi Investment Authority, the Dubai Investment Authority and the Dubai Investment Company.
(5) With reference to Article 10 (Dividends), paragraph 7:
For purposes of Article 10, paragraph 7, and subject to the laws of the Philippines, no branch profit remittance tax shall be imposed upon an enterprise registered with the Philippine Economic Zone Authority (PEZA) in respect of its activities registered with the PEZA.
(6) With reference to Article 13 (Gains from the Alienation of Property), paragraph 4:
The phrase "consists principally of immovable property" as used in paragraph 4 of this Agreement shall mean that more than 50 percent of the assets owned by the enterprise in the Contracting State consists of immovable property.
(7) With reference to Article 13 (Gains from the Alienation of Property), paragraphs 4 and 5:
For purposes of Article 13, paragraphs 4 and 5:
- (a) Gains derived by a resident of the United Arab Emirates from the alienation of an interest in a trust which is resident of the United Arab Emirates is taxable only in the United Arab Emirates notwithstanding that the property of such trust consists principally of immovable property situated in the Philippines.
- (b) Gains derived by a resident of the Philippines from the alienation of an interest in a trust which is resident of the Philippines is taxable only in the Philippines notwithstanding that the property of such trust consists principally of immovable property situated in the United Arab Emirates.
(8) With reference to Article 24 (Non-Discrimination):
- (1) Nothing in this Agreement shall affect the right of the government of the Contracting States, its political subdivisions or local authorities to apply its own laws related to the taxation of income derived from the petroleum and natural resources. Such activities will be taxed according to the laws of the Contracting States.
- (2) If in the future, the Philippines or the United Arab Emirates provides for taxation of a lower rate in any other agreement than as provided for in this agreement in respect of the operation in international traffic of ships or aircraft, the same treatment shall be applied automatically to a resident of either Contracting State in respect of income derived by such resident from the operation in international traffic of ships or aircraft.
IN WITNESS WHEREOF, the undersigned, duly authorized thereto, have signed this Protocol.
DONE in duplicate in Dubai on the day of 21st day of September 2003, in the English language.
FOR THE GOVERNMENT OF THE UNITED ARAB EMIRATES:
FOR THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES: