Free Service Agreement Template — Philippines
A Service Agreement drafted in line with Philippine law for businesses, professionals, agencies, and corporate clients. Capture scope of services, deliverables, fees with proper VAT and Expanded Withholding Tax handling, intellectual property assignment under RA 8293, service level penalties, and a robust dispute resolution clause. Generate a professional PDF in minutes — fully compliant with the Civil Code of the Philippines, the National Internal Revenue Code, and the Data Privacy Act 2012.
What is a Service Agreement?
A Service Agreement is a contract under which a Service Provider undertakes to render specified services to a Client in exchange for a fee. In the Philippines, Service Agreements are governed primarily by Articles 1305 to 1422 of the Civil Code (Republic Act 386) on contracts in general, and by Articles 1644 to 1731 on lease of services and lease of work or industry, which apply to most B2B service engagements. The agreement is consensual: it is perfected by mere meeting of minds under Article 1305, although Philippine commercial practice and the BIR audit framework strongly favor a written, dated, and ideally notarized Service Agreement. Article 1306 grants the parties broad freedom of contract subject to law, morals, good customs, public order, and public policy.
Service Agreements are widely used across the Philippine economy: IT and software development (SaaS implementation, custom development, managed services), professional services (legal, accounting, audit, consulting, marketing, design), facility services (cleaning, security, maintenance), business process outsourcing (BPO), and digital marketing. Each context carries its own VAT, EWT, and licensing considerations. For example, BPO and IT services may benefit from incentives under the Strategic Investment Priority Plan administered by the Board of Investments (BOI) or PEZA registration; professional services rendered by sole proprietors or general professional partnerships have specific BIR rules under Section 26(b) of the NIRC.
Three layers of Philippine law sit on top of every Service Agreement. First, contract and tort law: the Service Provider must perform with the diligence of a good father of a family under Article 1163 of the Civil Code, and is liable for damages for breach under Articles 1170-1174 and 2199-2235. Second, taxation: services are generally subject to 12% VAT under Section 105 NIRC when annual gross receipts exceed ₱3 million, or 3% percentage tax under Section 116 if below; the Client withholds EWT under Revenue Regulations 2-98 (5%/10% for professional fees, 2% for general contractors) and issues BIR Form 2307 each quarter. Third, where personal data is processed, the Data Privacy Act 2012 (RA 10173) imposes Personal Information Controller and Processor duties enforced by the National Privacy Commission across the Philippines.
What this template covers
The Doxuno Service Agreement template includes every essential clause for a B2B services engagement in the Philippines, plus optional Expert sections for SLAs, indemnification, IP assignment, and PDRCi arbitration.
Definitions and interpretation
Key terms including Confidential Information, Personal Data, Services, Deliverables
Scope of Services
Detailed description of services, deliverables, and exclusions
Delivery and acceptance
Milestones, acceptance criteria, and deemed acceptance period
Fees, VAT and Withholding Tax
12% VAT or 3% percentage tax under NIRC + EWT under RR 2-98
Intellectual Property
Pre-existing IP, third-party IP, and treatment of work product
IP Assignment under RA 8293
Express assignment of work product per Section 178 IP Code
Confidentiality and Data Privacy Act 2012
Survival period plus NPC-compliant personal data clauses
Warranties and limitation of liability
Service quality warranties and capped liability
Indemnification
Mutual indemnities for IP infringement and third-party claims
Service Level Agreement (SLA) and penalties
Optional uptime, response time, and liquidated damages under Art. 2226-2228
Term, termination, and post-termination
Notice period, termination for cause, return of materials
Dispute resolution — PDRCi arbitration
RTC venue or institutional arbitration under RA 9285
How to create your Service Agreement
No prior legal training required. The Doxuno generator walks you through every section with Philippine-specific drafting guidance for tax, IP, and data privacy.
- 1
Identify the Client and the Service Provider
Provide the registered name, SEC registration under the Revised Corporation Code (RA 11232), TIN issued by the BIR, principal office address, and authorized signatory of each party. For sole proprietors, indicate the DTI Business Name registration. For one-person corporations (OPCs), confirm SEC registration. For general professional partnerships of accountants, lawyers, or other regulated professionals, specify the professional regulation board (e.g., PRC, IBP, PICPA). Complete identification supports validity under Article 1305 of the Civil Code and ensures proper tax handling across the Philippines.
- 2
Define the scope of services and deliverables
Describe the services concretely: tasks, deliverables, milestones, acceptance criteria, exclusions. Specify timelines and dependencies — what the Client must provide (data access, points of contact, approvals) and within what timeframe. Vague scope is the leading cause of Service Agreement disputes before the Regional Trial Courts of the Philippines because it makes warranty and acceptance arguments unclear. Use a Statement of Work (SOW) annex for complex or phased engagements, with the master Agreement governing common terms across multiple SOWs.
- 3
Set fees, VAT, and EWT correctly
Enter the PHP fee, payment schedule, and invoicing rules. Specify whether the fee is VAT-exclusive (typical for VAT-registered providers) or VAT-inclusive. If the Service Provider is VAT-registered (annual gross receipts above ₱3 million), 12% VAT under Section 105 NIRC applies; below the threshold, 3% percentage tax under Section 116 applies. Confirm the EWT rate the Client will withhold under Revenue Regulations 2-98 and 11-2018: 5% for professional fees up to ₱3 million, 10% above, 15% for fees to corporations/partnerships, 2% for general contractors. The Client issues BIR Form 2307 quarterly so the Service Provider may credit the withheld tax. Specify late payment interest at the legal rate of 6% per annum under Article 2209 of the Civil Code unless otherwise agreed.
- 4
Activate IP, confidentiality, and Data Privacy Act clauses
Decide who owns the work product. Under Section 178 of the Intellectual Property Code (RA 8293), copyright belongs to the creator unless validly assigned in writing — so the Service Agreement must include an express assignment of all economic rights from the Service Provider to the Client, plus a waiver of moral rights to the extent permitted under Section 195. Pre-existing IP of the Service Provider remains its property, with a license granted to the Client to use it as embedded in the deliverables. Set the confidentiality survival period (commonly 24 months for general information; trade secrets remain protected indefinitely under Air Philippines v. Pennswell, G.R. No. 172835). Where the Service Provider processes personal data on behalf of the Client, activate the Personal Information Processor clause aligned with NPC Circulars 16-01, 16-02, and 16-03 of the National Privacy Commission of the Philippines.
- 5
Set SLA, dispute resolution, and download
For ongoing services (managed IT, BPO, support contracts), include a Service Level Agreement specifying uptime, response time, and liquidated damages for breach under Articles 2226-2228 of the Civil Code. Choose Regional Trial Court venue (commonly Makati, Taguig BGC, Quezon City, Pasig Ortigas, Manila, or Cebu City) or institutional arbitration before the Philippine Dispute Resolution Center, Inc. (PDRCi) under the Alternative Dispute Resolution Act 2004 (RA 9285). For cross-border engagements, consider the Singapore International Arbitration Centre (SIAC) or PDRCi as preferred Philippine seat. Doxuno produces a clean PDF — sign and notarize before a Notary Public commissioned by the Executive Judge of the RTC for stronger evidentiary weight in any future Philippine litigation.
Legal considerations in the Philippines
B2B service contracting in the Philippines has tax, IP, data privacy, and dispute resolution layers. The four areas below resolve most disputes.
This template is provided for informational purposes only and does not constitute legal advice. For high-value, regulated, or cross-border services, please consult a licensed Philippine lawyer admitted to the Integrated Bar of the Philippines (IBP) and a BIR-accredited tax practitioner.
Reviewed by legal professionals. The clauses have been reviewed against the Civil Code of the Philippines, the National Internal Revenue Code, the Intellectual Property Code (RA 8293), and the Data Privacy Act 2012, ensuring legal soundness for ordinary Philippine B2B service engagements.
VAT, percentage tax, and EWT — getting Philippine taxation right
Service Agreements in the Philippines have three principal tax exposures. First, value-added tax under Section 105 of the National Internal Revenue Code: services of a VAT-registered provider are subject to 12% VAT, charged on top of the fee, with a VAT Sales Invoice or Official Receipt issued. Service Providers below the ₱3 million annual gross receipts threshold pay 3% percentage tax under Section 116 instead. Second, Expanded Withholding Tax under Revenue Regulations 2-98 and 11-2018: the Client, as withholding agent, withholds EWT on the gross payment — typically 5% for individual professionals up to ₱3 million, 10% above, 15% for fees to corporations/partnerships, and 2% for general contractors — and remits via BIR Form 1601-EQ. The Service Provider receives BIR Form 2307 each quarter and credits the withheld amount against income tax. Third, Documentary Stamp Tax may apply on certain instruments. The Service Agreement should state clearly whether fees are VAT-exclusive or VAT-inclusive and which party bears each tax to avoid disputes during a BIR Letter of Authority audit in the Philippines.
Intellectual property and work product (RA 8293)
Under Section 178 of the Intellectual Property Code (RA 8293), copyright in works belongs to the creator (the Service Provider) unless validly assigned in writing. For software, designs, content, marketing materials, or other deliverables to vest in the Client, the Service Agreement must contain an explicit, unconditional assignment of all economic rights, with a moral rights waiver to the extent permitted by Section 195. For commissioned works in particular, Section 178.4 of RA 8293 gives the commissioner ownership of certain rights subject to express agreement. The Agreement should distinguish: (1) Service Provider Pre-existing IP — remains with the Service Provider, with a perpetual license to the Client to use it as embedded in deliverables; (2) Third-Party IP — under appropriate license; (3) Newly developed Work Product — assigned to the Client upon payment. Without an express assignment clause, the Client receives only an implied limited license and cannot freely modify, sublicense, or transfer the work, which causes serious problems on resale or restructuring of the Filipino business.
Data Privacy Act 2012 (RA 10173) processor obligations
When the Service Provider processes personal data on behalf of the Client — for example a marketing agency handling a customer database, a BPO handling end-customer accounts, an IT vendor managing user records — the Service Provider acts as a Personal Information Processor (PIP) under Section 3(i) of the Data Privacy Act 2012 (RA 10173). The Service Agreement must include a Data Processing Addendum with: (a) documented instructions from the Client on processing; (b) confidentiality undertakings for personnel; (c) appropriate technical and organisational security measures consistent with NPC Circulars 16-01 and 16-02; (d) prior written consent before engaging sub-processors; (e) prompt breach notification under NPC Circular 16-03 with specified timelines; (f) cooperation in data subject rights requests under Sections 16-19 of the Act; and (g) deletion or return of personal data upon termination. The National Privacy Commission of the Philippines may impose administrative fines up to ₱5,000,000 per violation under NPC Circular 2022-01, plus criminal penalties under Sections 25-32 of the Act for wilful breaches.
SLAs, liquidated damages, and dispute resolution in the Philippines
For ongoing services in the Philippines, a Service Level Agreement (SLA) defines measurable performance commitments — uptime percentage, response time, resolution time, mean time to recovery — and the consequences of breach. Under Articles 2226 to 2228 of the Civil Code, parties may pre-agree liquidated damages for SLA breaches; courts will enforce them unless iniquitous or unconscionable, in which case Article 2227 allows reduction. SLAs commonly express penalties as service credits (a percentage discount on fees) or fixed PHP amounts per breach event. Disputes typically proceed before the Regional Trial Court of the venue stipulated in the Agreement under Rule 4 of the Rules of Court, but the Doxuno template includes an optional arbitration clause referring disputes to the Philippine Dispute Resolution Center, Inc. (PDRCi) under the Alternative Dispute Resolution Act 2004 (RA 9285). PDRCi is the preferred Philippine seat for B2B service disputes because of confidentiality, technical expertise of arbitrators, and shorter timelines than RTC litigation. Provisional injunctive relief from the RTC remains available under Section 28 of RA 9285.
Frequently Asked Questions
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