BIR issues regulation on spontaneous exchange of taxpayer-specific rulings
August 26, 2022
The Philippines is party to double taxation agreements (DTAs) with 43 countries. These DTAs contain exchange of information (EOI) provisions, which oblige contracting parties to exchange details that are needed to carry out the provisions of the DTAs or the domestic laws that concern the taxes applicable to the DTAs.
To this end, the Bureau of Internal Revenue (BIR) consistently develops its EOI programme and has, in the past decade, circulated administrative issuances to facilitate EOI. It first issued Revenue Regulation No. 10-2010, which implemented Republic Act No. 10021 (ie, the Exchange of Information on Tax Matters Act of 2009). The latest of these issuances, Revenue Regulation No. 11-2022 (RR 11-2022), prescribed the guidelines and procedures for the spontaneous exchange of taxpayer-specific rulings pursuant to DTAs. It took effect on 23 July 2022.
Spontaneous exchange of relevant information on taxpayer-specific rulings (the transparency framework) is so named because it takes place without prompting or prior request. The transparency framework provides tax authorities "with access to timely information on rulings that have been [issued] to a foreign related party or a permanent establishment (PE) of their resident taxpayer". It may be used to conduct risk assessments and mitigate base erosion and profit shifting (BEPS) concerns.
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