Transfer pricing in the Philippines


Transfer pricing in the Philippines at a glance Philippines

Regulation Type National regulations based on OECD
Are there specific transfer pricing regulations? Yes
Submission deadline N/A
Submission deadline upon request Directly
Annual update required No
Official language requirements Pilipino, English
Potential impact of penalties N/A

Philippines tax law

Rules for transfer pricing in Philippines are based upon:

  • National Internal Revenue Code of 1997 Section 50
  • Revenue Memorandum Circular No. 26-08
  • Revenue Regulations No. 2-2013
  • Revenue Memorandum Order No. 23-2009
  • Revenue Memorandum Order No. 36-2010


Rules and regulations for transfer pricing in the Philippines are large based on the OECD Transfer Pricing Guidelines, even though the Philippines is not yet an OECD member, but merely an “observer”.

Guidance on the Application of the Arm’s Length Principle:

3-step approach:

Step 1: Conduct a comparability analysis

Step 2: Identify the tested party and the appropriate transfer pricing method

Step 3: Determine the arm’s length results.


Accepted methods

Accepted methods are:

  • The comparable uncontrolled price method
  • The resale price method
  • The cost plus method
  • The profit split method
  • The transactional net margin method

Priority of methods

Rules for transfer pricing in the Philippines do not prescribe any specific method. Therefore, the most appropriate method should be used.

Documentation requirements

Information that should be included in the documentation:

  • Organizational structure
  • Nature of the business/industry and market conditions
  • Controlled transactions
  • Assumptions, strategies, policies
  • Cost Contribution Arrangements
  • Comparability, functional and risk analysis
  • Selection of the transfer pricing method
  • Application of the transfer pricing method
  • Background documents
  • Index to documents


Rules for transfer pricing prescribe that documentation should be provided for in English language.

Requirements to prepare documentation annually

There is no requirement to prepare documentation annually.

Submission deadline upon request by tax authorities

Upon request of the tax authorities, documentation should be submitted directly.

Advanced Pricing Agreements


Rules for transfer pricing in the Philippines provide for options to obtain Advanced Pricing Agreements (APA).


Rules for transfer pricing in the Philippines do no prescribe any term for which an APA can be obtained.


The transfer pricing regulations 2-2013 states: “the provisions of the Tax Code and other applicable laws regarding the imposition of penalties and other appropriate sanctions shall be applied to any person who fails to comply with or violates the provisions and requirements of these regulations.”