PH backs OECD-led initiative vs tax evasion

The Philippines is taking part in a global move to weave bilateral tax treaties into a bigger web intended to catch tax evaders among multinational companies, Bureau of Internal Revenue (BIR) Commissioner Kim S. Jacinto Henares said.

In a text message on Tuesday, the BIR chief said the Philippines is one of the vice chairs of the working group tasked to harmonize cross-border tax initiatives under the Organization for Economic Cooperation and Development’s (OECD) base erosion and profit shifting (Beps) project.

Last year, the OECD announced the Philippines was one of 10 developing countries that would participate in the meetings of the Committee on Fiscal Affairs and its technical working groups that would start this year. The committee is the key decision-making body of the Beps project.

“Nearly 90 countries are working together on the development of a multilateral instrument capable of incorporating the tax treaty-related Beps measures into the existing network of bilateral treaties. The instrument will be open for signature by all interested countries in 2016,” the OECD said in a statement.

Last Oct. 5, the OECD put forward a package of measures seen to result into a “comprehensive, coherent and coordinated reform” of international tax rules for the consideration of finance ministers belonging to the G20 grouping, who will meet in Lima, Peru this week.

“The OECD/G20 Beps project provides governments with solutions for closing the gaps in existing international rules that allow corporate profits to disappear or be artificially shifted to low/no tax environments, where little or no economic activity takes place,” the OECD said.