At a glance
#Dates are for an example year end of Dec 31, 2025. Where local law moves a deadline on a weekend or national public holiday to the next working day, the date shown is already moved. Use the Deadlines tool for your own year end and thresholds.
Verified 2026-10-26. Tax authority: Bureau of Internal Revenue (BIR), Department of Finance. Summaries are simplified; check the linked official source before relying on them.
The law
#The arm's length rule starts with Section 50 of the National Internal Revenue Code (NIRC). It lets the Commissioner of Internal Revenue spread or allocate income and deductions between businesses owned or controlled by the same interests, to prevent tax evasion or to clearly reflect income. Revenue Regulations (RR) 2-2013 (Transfer Pricing Guidelines, dated 23 January 2013) adopts the arm's length principle for cross-border and domestic deals between associated enterprises and is largely based on the OECD Guidelines. RR 19-2020 created BIR Form 1709 (related party transactions return), and RR 34-2020 narrowed who must file it and who must prepare documentation. Revenue Memorandum Circular (RMC) 54-2021 answers questions on RR 34-2020. I found no regulation that replaced RR 2-2013.
Documentation
#The Philippines has no master file or local file rule by those names. RR 2-2013 (s.12) says transfer pricing documents must be contemporaneous, kept for the Tax Code retention period, and given to the BIR when requested, not filed with the return. Under RR 34-2020, a taxpayer must prepare documentation only if it must file Form 1709 (large taxpayers, taxpayers with income tax incentives, taxpayers with net operating losses in the current and two prior years, and their related parties) and also passes a size test. The tests are revenue over PHP 150m with related party transactions over PHP 90m, or goods sold to one related party over PHP 60m, or services, interest, intangibles or other deals with one related party over PHP 15m, or documentation was required the year before. The BIR must receive the documents within 30 calendar days of a request under a Letter of Authority. Taxpayers outside the Form 1709 rule must say so in the notes to their financial statements, and can still be asked to prove arm's length pricing in an audit.
Methods
#RR 2-2013 (s.10) lists five methods: comparable uncontrolled price, resale price, cost plus, profit split and transactional net margin. The most appropriate one is used, after a three step process of comparability analysis, choosing the tested party and method, and finding the arm's length result (ss.5 to 8). Ranges are used when the comparables are reliable. If a result is inside the range, no adjustment is made. If it is outside, the taxpayer must show it is arm's length, and if it cannot, the BIR picks a point in the range and may use the median, mean or weighted average when comparability gaps remain (s.8). Comparability adjustments are allowed only when they improve accuracy (s.9).
Penalties
#There is no separate transfer pricing penalty. RR 2-2013 (s.13) and RR 34-2020 (s.6) point to the Tax Code. Failing to file an information return such as Form 1709 on time costs PHP 1,000 for each failure, up to PHP 25,000 a year (NIRC s.250), and RMC 76-2020 sets the fine at PHP 1,000 to PHP 25,000 for a failure due to reasonable cause and not willful neglect. Micro and small taxpayers pay PHP 500 under the EOPT Act (RA 11976 s.45). Ignoring a summons to produce documents can bring a fine of PHP 5,000 to PHP 10,000 and 1 to 2 years in prison for the responsible officers (s.266). A transfer pricing adjustment leads to deficiency tax with a 25% surcharge, or 50% for willful neglect or a false return (s.248), plus interest (s.249). The BIR treats a Form 1709 with missing material information as not filed (RMC 54-2021, Q21).
Pillar Two
#No Pillar Two rule is in force. The Department of Finance drafted a Qualified Domestic Minimum Top-Up Tax (QDMTT) bill in 2026, aimed at 2027. In June 2026 the BIR said it had started preparing, and the Department of Finance asked Congress to pass the bill. I found no enacted income inclusion rule, QDMTT or UTPR up to 26 October 2026. These points come from news and Big 4 articles, not from an official source.
Other rules
#Country-by-country reporting: I found no Philippine CbC rule, form or deadline. A 2025 PwC Philippines article says it is not formally required, and Form 1709 is a different return that does not replace CbC. Advance pricing: RR 2-2013 (s.11) allows unilateral, bilateral and multilateral APAs but says separate guidelines would follow, and a draft APA regulation went to public consultation in August 2025 according to Grant Thornton, with no final rule found. Mutual agreement procedure guidelines are in RR 10-2022, which I did not read in full. The annual return is due on the 15th day of the 4th month after year end (NIRC s.77(B)), and quarterly returns are due 60 days after each of the first three quarters. A due date for filing a return or paying tax that falls on a Saturday, Sunday or holiday moves to the next business day: Administrative Code s.28 covers holidays, and BIR circular RMC 65-2016 covers weekends and holidays for electronic and manual filers.
Filings and deadlines
#| # | Filing | When | Who | Source |
|---|---|---|---|---|
| 1 | Annual corporate income tax return (BIR Form 1702 series) Due on or before the 15th day of April for calendar year companies, or the 15th day of the 4th month after the end of the fiscal year (NIRC s.77(B), unchanged by RA 11976). Tax due is paid when the return is filed (s.77(C)). The Commissioner may grant a reasonable extension only in meritorious cases (s.53), and there is no automatic extension. A date on a weekend or holiday moves to the next business day: Administrative Code s.28 for holidays, and RMC 65-2016 for Saturdays, Sundays and holidays, for electronic and manual filers (BIR copy of RMC 65-2016). Late filing brings a 25% surcharge, or 50% for willful neglect, plus interest (ss.248 and 249). | Day 15 of the 4th month after year end (e.g. Apr 15, 2026) | All corporations subject to Philippine income tax, including the final adjustment return for the year. | RA 11976 (EOPT Act), amended NIRC s.77(B) |
| 2 | Transfer pricing documentation (TPD), preparation date RMC 76-2020 says the TPD should be prepared before or at the time of the transaction, or after it but not later than the filing date of the return for the year in which the transaction took place. It has to be updated each year if the business model or the deals change, and last year's TPD can be reused if the same conditions still apply. RR 2-2013 (s.12) also requires the documents to be contemporaneous. This date is guidance from a circular, not a filing date, and nothing is filed on it. | With Annual corporate income tax return (BIR Form 1702 series) (e.g. Apr 15, 2026) | Only taxpayers that must file Form 1709 and also pass a size test: revenue over PHP 150m and related party transactions over PHP 90m; or sales of goods to one related party over PHP 60m; or services, interest, intangibles or other deals with one related party over PHP 15m; or documentation was required last year (RR 34-2020 s.3). The tool uses related party transactions over PHP 15m as a rough test. | RMC 76-2020 (BIR) |
| 3 | Information return on related party transactions (BIR Form 1709, RPT Form) Due within 15 days after the statutory due date of the annual income tax return, or after the actual e-filing date of the return if later (RMC 44-2021, amending RMC 76-2020). That is 30 April for calendar year companies. It can be filed through the eAFS system or at the RDO or Large Taxpayers Division. Exception: a manual filer with tax payable files it with the return at the bank by the return due date. It covers all related party transactions whatever the amount (RMC 54-2021, Q9), and transfer pricing documents are not attached. Late or missing filing costs PHP 1,000 for each failure, up to PHP 25,000 a year (NIRC s.250, RMC 76-2020). Taxpayers not covered must say so in the notes to their financial statements (RR 34-2020 s.4). | Day 15 of the 4th month after year end, plus 15 days (e.g. Apr 30, 2026) | A taxpayer that files an annual income tax return, has transactions with a domestic or foreign related party, and is a large taxpayer, an enjoyer of income tax incentives (such as BOI or economic zone income tax holiday or a preferential rate), has net operating losses in the current and two prior years, or is a related party of one of those. Tax exempt entities and key management personnel are not covered. There is no amount threshold for the form. | RMC 44-2021 (BIR), with RR 34-2020 s.2 |
| 4 | Transfer pricing documentation (TPD), delivery to the BIR on request Not filed with the return. It must be given to the BIR within 30 calendar days of receiving a request under a Letter of Authority (RR 34-2020 s.3). The regulation adds wording on a 30 day period based on meritorious grounds, and it calls that period non-extendible. Advisers read this as one extra 30 days for good reason, but the text is not clear. A taxpayer that is not required to prepare a TPD must still prove arm's length pricing in an audit (RMC 54-2021, Q14 and Q23). | Within 30 days of a tax authority request | Same as the preparation date: Form 1709 filers that pass a size test in RR 34-2020 s.3. Enter related party transactions in PHP. | RR 34-2020 s.3 (BIR) |
Official texts
#- National Internal Revenue Code of 1997 (RA 8424) and RA 11976 (EOPT Act), Administrative Code of 1987 (EO 292) (No copyright subsists in works of the Philippine Government, and no prior approval is needed to use statutes, rules and regulations (IP Code s.176.1). Texts were read on lawphil.net, a private legal library, because the Official Gazette blocked access; check them against an official copy.)
- RR 2-2013 Transfer Pricing Guidelines (Supreme Court E-Library copy of the National Administrative Register publication) (Free of copyright as a government regulation (IP Code s.176.1, no approval needed for rules and regulations))
- RR 19-2020, RR 34-2020, RMC 54-2021, RMC 76-2020 (bir.gov.ph) (Free of copyright as government regulations (IP Code s.176.1). Circulars (RMCs) are likely covered as official issuances, but IP Code s.176.1 names only statutes, rules and regulations.)