The Philippines is eyeing to seal tax treaties with all nine other Asean member-states, according to the Bureau of Internal Revenue (BIR).
The country already has effective double taxation agreements (DTAs) with Indonesia, Malaysia, Singapore, Thailand and Vietnam, BIR Assistant Commissioner Marissa O. Cabreros noted in a presentation at last week’s Second International Tax Forum hosted by the Department of Finance.
“However, we do have a request from Indonesia for renegotiation to update the provisions of our DTA,” Cabreros said. In the case of Thailand, the updated DTA has yet to take effect pending the ratification of the renegotiated version.
Negotiations are ongoing with Brunei, while a second round of negotiation with Burma (Myanmar) was for scheduling, said Cabreros, who is also the BIR’s spokesperson.
As for Cambodia, there was a request for negotiation from Phnom Penh. For Laos, Manila has requested for negotiations with Vientiane.
The Philippines currently has 40 tax treaties—mostly DTAs and tax exchange information agreements—in force, while a tax treaty with Turkey will take effect in 2017.
But Cabreros said: “Globally, the major concern is no longer the case of double taxation; the more pressing issue is double non-taxation.”
“With the interplay of international agreements and domestic tax laws, multinational enterprises, by design of their transactions, were able to shift profit away from tax jurisdiction, eroding taxable base. Thus, both developed and developing countries are now vulnerable to capital flight as well as erosion of tax revenue base,” she said.
“In response to this, the focus now is toward entering into tax treaty negotiations to improve coordination and cooperation with tax administration to address tax avoidance and tax evasion. This is mostly achieved through exchange of information,” she said.
“Incidentally, the Philippines is one of the members of the global forum and we do adhere and adopt international standards of exchange on information on specific requests,” Cabreros said, referring to the Organization for Economic Cooperation and Development (OECD)-led Global Forum on Transparency and Exchange of Information for Tax Purposes.
“Countries are now migrating toward automatic exchange of information, and the Philippines is one of the pilot jurisdictions being assisted by the Australian Taxation Office,” according to Cabreros.