Foreign corporations are taxable on Philippine-sourced income at the same rate as domestic corporations at the rate of 35% starting 01 July 2005 but will be reduced to 30% with effect from 01 January 2009. A licensed foreign corporation will be treated as a “resident foreign corporation” subject to the 35% tax on its net Philippine-sourced income. An unlicensed foreign corporation will be treated as a “non-resident foreign corporation”, subject to 35% tax on its gross Philippine-sourced income.

Branches of foreign corporations are subject to the same corporate tax rate. Branch profit remittances are subject to 15% tax, which can be reduced subject to tax treaty agreements.