MANILA, Philippines — The Philippines and Ireland have commenced negotiations for a proposed bilateral agreement, which aims to prevent double taxation against individuals or companies covered by both jurisdictions, according to the Department of Finance (DOF).
In a statement, Finance Undersecretary Antonette Tionko said the first round of talks was held recently in Manila, covering discussions on how the two governments could avoid imposing taxes on the same income or capital gains.
Tionko said a working draft for a double taxation agreement is already being studied by the two governments.
“The negotiation was conducted in a friendly atmosphere with mutual understanding, which allowed the two delegations to examine all of the articles under discussion,” Tionko said.
“While there are other provisions that need to be considered by the Philippines, like permanent establishment and entitlement to benefits, the provisions on persons covered, the taxes to be covered, provisions on residents and immovable property, and business profits, among others, have already been mutually agreed upon,” she said.
Under a double taxation agreement, individuals that are residents of one country, but are receiving income in another contracting state, or vice versa, can avoid being taxed twice for the same income, property or investment.
It provides tax relief, in the form of exemptions or preferential tax rates, to avoid double taxation.
The DOF said such agreement prevents tax evasion and encourages foreign trade and investments between countries.
According to Tionko, both delegations are set to meet again to further deliberate on items that have not yet been agreed upon during the initial round of talks.
“Further, both delegations undertook to review outstanding items with their respective authorities. Once completed, arrangements will be made regarding the second round of negotiation to take place at a mutually agreed place and date,” she said.
Tionko, who heads the Revenue Operations Group (ROG) of the DOF, led the Philippine side during the negotiations, while Anne Margaret Gormley, director for the Tax Treaties Branch, Office of the Revenue Commissioners of Ireland, led the Irish delegation.