RP joins countries using international tax standards

MANILA, Philippines - The Philippines has been elevated to the list of countries that have substantially implemented the internationally agreed tax standards or more commonly known as the White List, according to the Organization for Economic Cooperation and Development (OECD).

Government officials attributed this to the Bureau of Internal Revenue’s implementation of revenue regulations (RR) that would fully implement the exchange of tax-related information between the BIR and revenue authorities of other countries.

However, there are still remaining issues that prevent the Philippines from fully complying with internationally accepted standards, the OECD said.

Donal Godfrey, head of the OECD Global Forum Secretariat, met with a team of government officials to discuss and agree on the remaining issues that would enable the Philippines to comply with internationally accepted tax standards. 

Discussions, among others, focused on the issue of domestic tax interest to which the OECD defines as: “. . . laws or practices that would prohibit the competent authority of a Contracting State from exchanging information requested by the other Contracting State unless the requested Contracting State had an interest in such information for its own tax purposes.”

This is in view of laws that are still enforced like RA 1405, known as the Bank Secrecy Law, which prevents authorities from getting and providing certain banking information to either foreign tax authorities or for domestic use.

“With the recent OECD announcement that the Philippines has substantially implemented the internationally agreed tax standards, the Philippines can now request information on bank accounts abroad from other countries,” said lawyer Carlo Carag, Finance Undersecretary for Revenue Operations and Legal Affairs.

With the signing of the RR, the Internal Revenue Commissioner is now authorized to acquire any information from bank and non-bank financial institutions, regardless of any existing laws like RA 1405, for the purpose of complying with the Philippines’ commitments under existing tax treaties and international conventions.

Furthermore, the DOF said the revenue regulations would also strengthen the BIR’s ‘Run After Tax Evaders’ campaign and the Bureau of Custom’s ‘Run After The Smugglers’ campaign by setting guidelines for foreign tax authorities to request information from the Philippines.

Jeffrey Owens, director of OECD’s Center for Tax Policy and Administration said that he was pleased to see that the Philippines has upgraded its legislation to meet the international tax standard which reflects the worldwide movement towards greater transparency and exchange of information, and that OECD looks forward to working with the Philippines over the coming years.

In April last year, the OECD removed the Philippines from its black list of countries that have insufficient tax regulations and placed this on the gray list or those who have committed but have not yet fully complied with international tax standards.

The OECD standards have been developed in the context of the OECD’s Global Forum on Taxation, and were subsequently endorsed by G20 Finance Ministers in 2004 and by the UN Committee of Experts on International Cooperation in Tax Matters in October 2008.

RP joins countries using international tax standards

By IRIS C. GONZALES

MANILA, Philippines - The Philippines has been elevated to the list of countries that have substantially implemented the internationally agreed tax standards or more commonly known as the White List, according to the Organization for Economic Cooperation and Development (OECD).

Government officials attributed this to the Bureau of Internal Revenue’s implementation of revenue regulations (RR) that would fully implement the exchange of tax-related information between the BIR and revenue authorities of other countries.

However, there are still remaining issues that prevent the Philippines from fully complying with internationally accepted standards, the OECD said.

Donal Godfrey, head of the OECD Global Forum Secretariat, met with a team of government officials to discuss and agree on the remaining issues that would enable the Philippines to comply with internationally accepted tax standards. 

Discussions, among others, focused on the issue of domestic tax interest to which the OECD defines as: “. . . laws or practices that would prohibit the competent authority of a Contracting State from exchanging information requested by the other Contracting State unless the requested Contracting State had an interest in such information for its own tax purposes.”

This is in view of laws that are still enforced like RA 1405, known as the Bank Secrecy Law, which prevents authorities from getting and providing certain banking information to either foreign tax authorities or for domestic use.

“With the recent OECD announcement that the Philippines has substantially implemented the internationally agreed tax standards, the Philippines can now request information on bank accounts abroad from other countries,” said lawyer Carlo Carag, Finance Undersecretary for Revenue Operations and Legal Affairs.

With the signing of the RR, the Internal Revenue Commissioner is now authorized to acquire any information from bank and non-bank financial institutions, regardless of any existing laws like RA 1405, for the purpose of complying with the Philippines’ commitments under existing tax treaties and international conventions.

Furthermore, the DOF said the revenue regulations would also strengthen the BIR’s ‘Run After Tax Evaders’ campaign and the Bureau of Custom’s ‘Run After The Smugglers’ campaign by setting guidelines for foreign tax authorities to request information from the Philippines.

Jeffrey Owens, director of OECD’s Center for Tax Policy and Administration said that he was pleased to see that the Philippines has upgraded its legislation to meet the international tax standard which reflects the worldwide movement towards greater transparency and exchange of information, and that OECD looks forward to working with the Philippines over the coming years.

In April last year, the OECD removed the Philippines from its black list of countries that have insufficient tax regulations and placed this on the gray list or those who have committed but have not yet fully complied with international tax standards.

The OECD standards have been developed in the context of the OECD’s Global Forum on Taxation, and were subsequently endorsed by G20 Finance Ministers in 2004 and by the UN Committee of Experts on International Cooperation in Tax Matters in October 2008.