Harmful Tax Practices – 2023 Peer Review Reports on the Exchange of Information on Tax Rulings

917.  The Philippines can legally issue the following type of rulings within the scope of the transparency framework: permanent establishment rulings.

918. For the Philippines, past rulings are any tax rulings within scope that are issued either: (i) on or after 1 January 2015 but before 1 September 2017; or (ii) on or after 1 January 2012 but before 1 January 2015, provided they were still in effect as at 1 January 2015.

919.  For the Philippines, future rulings are any tax rulings within scope that are issued on or after 1 September 2017.

920. In the prior year’s’ peer review report, it was determined that the Philippines’ undertakings to identify past and future rulings and all potential exchange jurisdictions were sufficient to meet the minimum standard. In addition, it was determined that the Philippine’s review and supervision mechanism was sufficient to meet the minimum standard. The Philippines’ implementation remains unchanged, and therefore continues to meet the minimum standard.

921. The Philippines has met all of the ToR for the information gathering process and no recommendations are made.

922. The Philippines has the necessary domestic legal basis to exchange information spontaneously. Philippines notes that there are no legal or practical impediments that prevent the spontaneous exchange of information on rulings as contemplated in the Action 5 minimum standard.

923. The Philippines has bilateral agreements with 42 jurisdictions permitting spontaneous exchange of information. 2 The Philippines signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol (OECD/Council of Europe, 2011[2]) (“the Convention”) in September 2014, but the Philippines has not yet ratified the Convention. The Philippines is therefore encouraged to continue its efforts to ratify the Convention and expand its international exchange of information on rulings. It is noted, however, that jurisdictions are assessed on their compliance with the transparency framework in respect of the exchange of information network in effect for the year of the particular annual review.

924. In the prior years’ peer review reports, it was determined that the Philippines did not have a process for the completion and exchange of templates. Therefore, the Philippines was recommended to continue its work to complete its processes for the completion and exchange of information as soon as possible. During the year in review, the Philippines notes that its regulations (Revenue Regulations No. 11-2022 (Prescribing the Guidelines and Procedures for the Spontaneous Exchange of Taxpayer Specific Rulings)) requires the use Annex C of the Action 5 report (OECD, 2015[3]) for the exchanges of information on the permanent establishment rulings. These templates are reviewed by the Chief of the International Tax Affairs Division and the Assistant Commissioner for Legal Service.

925. In the prior year’s peer review report, it was noted that the Philippines started to implement a process for the exchanges of information, taking into account the timelines under the transparency framework. The Philippines notes that this process was further implemented during the year in review. The Philippines notes that all exchanges were undertaken within three months after the information became available to the Competent Authority. However, peer input indicated that exchanges of information on future rulings were not timely, and the Philippines was still exchanging information on past rulings. Therefore, this issue will be further reviewed next year, and the prior years’ recommendation remains partly in place.

926. For the year in review, the timeliness of exchanges is as follows:

927. The Philippines has the necessary legal basis for spontaneous exchange of information. The Philippines has met all of the ToR for the information gathering process except for completing exchanges of information on rulings in accordance with the timelines (ToR II.B.6). The Philippines is recommended to continue its efforts to ensure that all information on past and future rulings is exchanged as soon as possible (ToR II.B.6).

928. The statistics for the year in review are as follows:

929. The Philippines does not offer an intellectual property regime for which transparency requirements under the Action 5 Report (OECD, 2015[3]) were imposed.

[1] OECD (2021), BEPS Action 5 on Harmful Tax Practices - Terms of Reference and Methodology for the Conduct of the Peer Reviews of the Action 5 Transparency Framework, OECD Publishing, Paris, http://www.oecd.org/tax/beps/beps-action-5-harmful-tax-practices-peer-review-transparency-framework.pdf.

[3] OECD (2015), Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://doi.org/10.1787/9789264241190-en.

[2] OECD/Council of Europe (2011), The Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol, OECD Publishing, Paris, https://doi.org/10.1787/9789264115606-en.