BLUE HORIZON BEYOND AI - TAXATION BORACAY

BHBAI Association

Switzerland

International Taxation Report

BORACAY

PHILIPPINES

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Subject: UK citizen permanently residing in the Philippines (Boracay)

Income items (annual):

A. USD 1,000,000 — Swiss real estate rental income

B. USD 1,000,000 — Swiss portfolio income (assumed dividends / interest)

C. USD 1,000,000 — Swiss corporate profits (assumed taxed at company level and retained)

Purpose: Determine taxes due (UK; Switzerland; Philippines) under a deep documentary search and show calculations and legal bases with text links to the primary sources and PwC/KPMG guidance.

Executive summary — headline numbers (based on assumptions below)

1. Total taxes due in the United Kingdom: USD 0. (Assumes taxpayer is non-UK tax resident.) See GOV.UK guidance on residence and foreign income: https://www.gov.uk/tax-foreign-income/residence.

2. Total taxes due in Switzerland: USD 530,000 (breakdown below). See Swiss Federal Tax Administration DTA page and PwC/KPMG Swiss guides: https://www.estv.admin.ch/estv/en/home/international-fiscal-law/international-by-country/sif/philippines.html and https://www.pwc.ch/en/services/tax-advice/taxcomparison.html and https://assets.kpmg.com/content/dam/kpmgsites/ch/pdf/kpmg-ch-swiss-taxes-2025-clarity.pdf.

3. Total taxes due in the Philippines: USD 0 (on these foreign-source items for a non-Filipino expatriate resident / resident alien). See BIR guidance and PwC/KPMG Philippines summaries: https://www.bir.gov.ph/taxationofforeignsourceincome, https://taxsummaries.pwc.com/philippines/individual/taxes-on-personal-income, and https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2023/01/TIES-Philippines.pdf.

Important explicit assumptions (read first)

1. Residency and status

UK: The taxpayer is a non-UK tax resident under the UK Statutory Residence Test (SRT). GOV.UK on residence & foreign income: https://www.gov.uk/tax-foreign-income/residence.

Philippines: The taxpayer is a UK national living permanently in the Philippines and is a non-Filipino resident alien (resident for immigration/lifestyle but not a Philippine citizen). PwC on Philippine residence: https://taxsummaries.pwc.com/philippines/individual/residence and BIR guidance: https://www.bir.gov.ph/taxationofforeignsourceincome.

Switzerland: All three income items are Swiss-sourced (Swiss rental on Swiss immovable property; dividends/interest paid by Swiss payers; corporate profits generated and taxed in Switzerland). Swiss DTA materials: https://www.estv.admin.ch/estv/en/home/international-fiscal-law/international-by-country/sif/philippines.html.

2. Character & simplifications for numeric modeling

A (rental): gross rental income taxed in Switzerland as Swiss-source personal income. For model purposes we assume an effective combined personal tax on the rental of 20% (cantonal variation significant). PwC/KPMG note cantonal variability: PwC Switzerland corporate/citizen guides: https://www.pwc.ch/en/services/tax-advice/taxcomparison.html; KPMG Swiss overview: https://assets.kpmg.com/content/dam/kpmgsites/ch/pdf/kpmg-ch-swiss-taxes-2025-clarity.pdf.

B (stocks & bonds): assumed to be dividends for the primary calculation (if interest, treaty cap often lower). Switzerland’s statutory withholding tax is 35% but treaties commonly cap withholding (Switzerland–Philippines DTA provides caps). Swiss FTA DTA page: https://www.estv.admin.ch/estv/en/home/international-fiscal-law/international-by-country/sif/philippines.html and the BIR copy of the treaty: https://bir-cdn.bir.gov.ph/local/pdf/Switzerland%20treaty.pdf.

C (corporate profits): taxed at Swiss company level. For modeling we assume a combined effective Swiss CIT ≈ 18% (midpoint of common canton ranges). PwC corporate tax summary: https://taxsummaries.pwc.com/switzerland/corporate/taxes-on-corporate-income and KPMG summary: https://assets.kpmg.com/content/dam/kpmgsites/xx/pdf/2023/01/TIES-Switzerland.pdf.

3. No other residency/tax ties: No UK property/income, no Philippines-source income, no other jurisdictions relevant, and no special regimes (e.g., Swiss lump-sum taxation) are assumed.

Legal and practical analysis (country by country)

A. United Kingdom — applied law and computation

Rule: Non-UK tax residents are generally taxed only on UK-sourced income and do not pay UK tax on foreign income. GOV.UK: https://www.gov.uk/tax-foreign-income/residence. The SRT details are at HMRC: https://assets.publishing.service.gov.uk/media/5a7abba640f0b66eab99c445/statutory_residence_test.pdf.pdf.

Conclusion (under non-resident assumption): No UK tax on Swiss rental, Swiss dividends/interest, or Swiss corporate profits.

Computation (UK):

A (rental): USD 0 UK tax.

B (portfolio): USD 0 UK tax.

C (corporate profits): USD 0 UK tax.

UK total = USD 0.

B. Switzerland — source taxation, treaty rules, numeric model

Legal & treaty framework

Switzerland taxes income arising from Swiss sources: Swiss immovable property is taxed in Switzerland; dividends and certain interest are subject to Swiss withholding tax (statutory 35%) with treaty relief available; corporate profits are taxed at federal + cantonal/communal levels. Swiss FTA DTA listings: https://www.estv.admin.ch/estv/en/home/international-fiscal-law/international-by-country/sif/philippines.html. PwC and KPMG discuss domestic rates and withholding procedures: https://taxsummaries.pwc.com/switzerland and https://assets.kpmg.com/content/dam/kpmgsites/ch/pdf/kpmg-ch-swiss-taxes-2025-clarity.pdf.

Treaty caps (Switzerland — Philippines)

The Switzerland–Philippines DTA (text hosted by the Philippines BIR) sets withholding maxima for dividends/interest. See the treaty text: https://bir-cdn.bir.gov.ph/local/pdf/Switzerland%20treaty.pdf and supporting interpretations (Philippine CTA, commentary). For example, dividends often capped at 15% (10% in certain cases); interest often capped at 10% — confirm the exact Article in the treaty PDF: https://bir-cdn.bir.gov.ph/local/pdf/Switzerland%20treaty.pdf.

Numeric model & calculations (applied assumptions)

A — Swiss rental income: USD 1,000,000

Assumed effective Swiss personal tax on the rental: 20% (cantonal + federal). Sources describing cantonal variability: PwC/KPMG Swiss tax resources: https://taxsummaries.pwc.com/switzerland and https://assets.kpmg.com/content/dam/kpmgsites/ch/pdf/kpmg-ch-swiss-taxes-2025-clarity.pdf.

Swiss tax = 1,000,000 × 20% = USD 200,000.

B — Swiss portfolio income (modeled as dividends): USD 1,000,000

Domestic statutory WHT = 35% (Switzerland), but treaty WHT cap for Philippines-resident recipients applied in practice (treaty text): https://bir-cdn.bir.gov.ph/local/pdf/Switzerland%20treaty.pdf and Swiss FTA DTA reference: https://www.estv.admin.ch/estv/en/home/international-fiscal-law/international-by-country/sif/philippines.html.

Treaty WHT (dividends example) = 1,000,000 × 15% = USD 150,000.

C — Swiss corporate profits: USD 1,000,000

Swiss combined effective corporate income tax (federal + cantonal/communal) assumed ≈ 18% for modeling (PwC/KPMG provide ranges: federal CIT 8.5% plus cantonal/communal yielding combined 11.9%–20.5% typically). See PwC: https://taxsummaries.pwc.com/switzerland/corporate/taxes-on-corporate-income and KPMG: https://assets.kpmg.com/content/dam/kpmgsites/xx/pdf/2023/01/TIES-Switzerland.pdf.

Swiss corporate tax = 1,000,000 × 18% = USD 180,000.

Total Swiss tax = USD 200,000 + USD 150,000 + USD 180,000 = USD 530,000.

Practical notes (Swiss side):

Switzerland’s statutory WHT is 35% but commonly reduced to the treaty rate by refund or notification procedures; timing and documentary proof (certificate of residence / tax forms) are required. See PwC withholding notes: https://taxsummaries.pwc.com/switzerland/corporate/withholding-taxes.

If C’s profits are later distributed as dividends, additional WHT (treaty-limited) would apply; combined corporate + shareholder taxes should be modeled case-by-case. Swiss forms and residual WHT rules are discussed at the Swiss FTA DTA page: https://www.estv.admin.ch/estv/en/home/international-fiscal-law/international-by-country/sif/philippines.html.

C. Philippines — residency/source rules and application

Legal/practical framework

The Philippines taxes resident citizens on worldwide income. Non-resident citizens and aliens are taxed only on Philippine-source income. See BIR guidance and PwC/KPMG country guides: BIR Taxation of Foreign Source Income page https://www.bir.gov.ph/taxationofforeignsourceincome and PwC Philippines individual tax overview https://taxsummaries.pwc.com/philippines/individual/taxes-on-personal-income and KPMG TIES Philippines: https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2023/01/TIES-Philippines.pdf.

Applied conclusion (under the non-Filipino resident-alien assumption)

Swiss rental (A): foreign-source → not taxable in the Philippines. BIR indicates foreign-source income treatment; see https://www.bir.gov.ph/taxationofforeignsourceincome. PwC summary: https://taxsummaries.pwc.com/philippines/individual/taxes-on-personal-income.

Swiss portfolio (B): foreign-source → not taxable in the Philippines for alien residents (exceptions may apply if Philippine-source facts exist). PwC on income determination: https://taxsummaries.pwc.com/philippines/individual/income-determination.

Swiss corporate profits (C): company-level Swiss tax applies; distributions generally foreign-source under typical facts → not taxable in the Philippines for a non-Filipino resident. See KPMG on source/situs: https://kpmg.com/ph/en/home/insights/2024/06/source-and-situs.html.

Total Philippines tax on these Swiss items = USD 0 (subject to factual sourcing exceptions and the taxpayer not being a Philippine citizen).

Practical caveat (Philippine side):

If the taxpayer is a Philippine citizen or if specific payments are treated as Philippine-sourced under statutory rules (e.g., services performed in the Philippines), Philippine tax would apply. PwC on foreign-sourced relief and limitations: https://taxsummaries.pwc.com/philippines/individual/foreign-tax-relief-and-tax-treaties.

Reconciliation and final numeric recap (with links)

United Kingdom — Total: USD 0 (GOV.UK on foreign income/residence: https://www.gov.uk/tax-foreign-income/residence).

Switzerland — Total: USD 530,000 (Rental tax USD 200,000; Dividend WHT USD 150,000; Corporate tax USD 180,000). See Swiss DTA and PwC/KPMG: https://www.estv.admin.ch/estv/en/home/international-fiscal-law/international-by-country/sif/philippines.html; https://taxsummaries.pwc.com/switzerland/corporate/taxes-on-corporate-income; https://assets.kpmg.com/content/dam/kpmgsites/ch/pdf/kpmg-ch-swiss-taxes-2025-clarity.pdf.

Philippines — Total: USD 0 (BIR guidance and PwC/KPMG country guides: https://www.bir.gov.ph/taxationofforeignsourceincome; https://taxsummaries.pwc.com/philippines/individual/taxes-on-personal-income; https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2023/01/TIES-Philippines.pdf).

Sources relied upon:

United Kingdom (residence / foreign income)

GOV.UK — Tax on foreign income: residence: https://www.gov.uk/tax-foreign-income/residence

HMRC — Statutory Residence Test (SRT) explanatory PDF: https://assets.publishing.service.gov.uk/media/5a7abba640f0b66eab99c445/statutory_residence_test.pdf.pdf

Philippines (residency / foreign-source rules / BIR / guides)

Bureau of Internal Revenue (BIR) — Taxation of Foreign Source Income: https://www.bir.gov.ph/taxationofforeignsourceincome

PwC — Philippines: Individual — Taxes on personal income (residence & taxation): https://taxsummaries.pwc.com/philippines/individual/taxes-on-personal-income

PwC — Philippines: Individual — Residence: https://taxsummaries.pwc.com/philippines/individual/residence

KPMG — TIES Philippines (tax guide PDF): https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2023/01/TIES-Philippines.pdf

KPMG — Source and Situs discussion (Philippines): https://kpmg.com/ph/en/home/insights/2024/06/source-and-situs.html

Switzerland (withholding, corporate tax, DTA)

Swiss Federal Tax Administration — Switzerland: Double taxation agreements — Philippines page (forms & DTA): https://www.estv.admin.ch/estv/en/home/international-fiscal-law/international-by-country/sif/philippines.html

Philippines BIR copy of the Switzerland DTA (treaty text PDF): https://bir-cdn.bir.gov.ph/local/pdf/Switzerland%20treaty.pdf

PwC — Switzerland: Corporate taxes & withholding tax summary: https://taxsummaries.pwc.com/switzerland/corporate/taxes-on-corporate-income and https://taxsummaries.pwc.com/switzerland/corporate/withholding-taxes

KPMG — Switzerland tax overview and clarifying notes (PDF): https://assets.kpmg.com/content/dam/kpmgsites/ch/pdf/kpmg-ch-swiss-taxes-2025-clarity.pdf and https://assets.kpmg.com/content/dam/kpmgsites/xx/pdf/2023/01/TIES-Switzerland.pdf

Other supporting materials & interpretive notes

PwC — Philippines: Foreign tax relief and treaties: https://taxsummaries.pwc.com/philippines/individual/foreign-tax-relief-and-tax-treaties

Baker McKenzie / commentary on Swiss residual withholding and refunds: https://insightplus.bakermckenzie.com/bm/tax/switzerland-residual-withholding-tax-rate-under-double-taxation-agreement-with-india-to-increase-from-5-to-10 (context on withholding/refund practice)

General corporate tax rate comparisons (KPMG corporate tax rates table): https://kpmg.com/dk/en/services/tax/corporate-tax/corporate-tax-rates-table.html

Practical recommendations (next steps)

1. Confirm residency facts under the UK SRT (days, ties) — GOV.UK SRT guidance: https://www.gov.uk/tax-foreign-income/residence and HMRC SRT PDF: https://assets.publishing.service.gov.uk/media/5a7abba640f0b66eab99c445/statutory_residence_test.pdf.pdf.

2. Confirm character of portfolio receipts (B) — dividend vs interest vs capital gain matters for withholding and treaty caps; see Swiss DTA text: https://bir-cdn.bir.gov.ph/local/pdf/Switzerland%20treaty.pdf and PwC Switzerland withholding guidance: https://taxsummaries.pwc.com/switzerland/corporate/withholding-taxes.

3. Determine canton for Swiss rental and corporate location — canton determines exact cantonal/communal tax rates; see PwC & KPMG Swiss guides for canton ranges: https://taxsummaries.pwc.com/switzerland/corporate/taxes-on-corporate-income and https://assets.kpmg.com/content/dam/kpmgsites/ch/pdf/kpmg-ch-swiss-taxes-2025-clarity.pdf.

4. Obtain tax residency certificates and treaty documentation to claim treaty reduced WHT or refunds in Switzerland (Swiss FTA DTA page & treaty forms): https://www.estv.admin.ch/estv/en/home/international-fiscal-law/international-by-country/sif/philippines.html.

5. Consult a cross-border tax adviser (Switzerland - Philippines - UK) to confirm micro-facts, prepare treaty claims, and file returns — use PwC or KPMG local contacts: PwC Switzerland: https://www.pwc.ch/en/services/tax-advice/taxcomparison.html; PwC Philippines: https://www.pwc.com/ph/en/tax.html; KPMG Philippines: https://home.kpmg/ph/en/home/services/tax.html.

Final Taxes

1. Total Taxes due in the United Kingdom: USD 0.

2. Total Taxes due in Switzerland: USD 530,000.

3. Total Taxes due in the Philippines: USD 0.