The updated tax treaty recently signed by the Philippines and Japan will help boost investments and strengthen economic cooperation, Department of Finance (DOF) Secretary Frederick Go said Friday, May 29, 2026.
The two countries signed a renegotiated Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income during President Ferdinand R. Marcos Jr.’s state visit to Japan. The agreement replaces the existing tax treaty originally concluded in 1980 and partially amended in 2008.
In a statement, Go said the agreement eliminates the risk of double taxation on income earned across both jurisdictions, thereby reducing the cost of doing business and improving tax predictability for individuals and enterprises alike.
By streamlining cross-border tax treatment, the treaty is expected to create a more stable and efficient environment for trade and investment between the Philippines and Japan.
It also introduces updated provisions on withholding taxes on dividends, interest, and royalties to encourage greater investment.
“This agreement reflects the Philippines’ commitment to fostering a more competitive, predictable, and investment-friendly environment that will create high-quality employment opportunities and sustained economic growth,” Go said.
Japan is currently one of the Philippines’ top sources of foreign direct investment, with annual inflows exceeding US$800 million in 2022 and 2023, according to the DOF.
The updated tax framework is expected to further strengthen investor confidence and deepen economic engagement between the two countries.
The DOF said the agreement is also expected to benefit more than 245,000 overseas Filipino workers in Japan. / PNA
