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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Philippines Phase 2 Peer Review

This report for Philippines has been published on 22 Nov 2013. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place.   Companies incorporated outside of the Philippines but having their effective management in the Philippines, which gives rise to a permanent establishment, are not required to provide or maintain information identifying any owners. The availability of information that identifies the owners of such companies will generally depend on the law of the jurisdiction in which the company is incorporated and so may not be available in all cases.   In such cases, the Philippines should ensure that ownership and identity information is available.  
Phase 2 Rating Factors Recommendations
Largely Compliant.   The Anti-Money Laundering Act was amended in February 2013 to cover natural and juridical persons acting as professional and non-professional nominees, as well as non-professional trustees. However, these legal requirements are untested in practice.  The Philippines should monitor the anti-money laundering obligations extended to natural and juridical persons acting as professional and non-professional nominees, as well as non-professional trustees, which ensure the availability of ownership and identity information with regard to persons on behalf of whom they act in all cases. 
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Although, there is a requirement for most businesses to retain invoices and receipts for transactions, there is no express requirement that all relevant entities and arrangements keep all underlying documentation.   Introduce consistent obligations for all relevant entities and arrangements to maintain underlying documents, in line with the Terms of Reference 
There is currently no express obligation for entities, other than covered persons for AML purposes, to maintain accounting records for a minimum 5 year period  The record keeping requirements for all relevant entities should require retention of records for a minimum 5 year period. 
Phase 2 Rating Factors Recommendations
Partially Compliant.      
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.      
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.      
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.      
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Two DTCs limit exchange of information to the carrying out of the provisions of the Convention and do not extend to the administration and enforcement of domestic laws of the contracting states. Two other DTCs limit exchange of information to information already at the disposal of tax authorities.  The Philippines should continue to negotiate with existing partners (or take steps to expedite entry into force of) new DTCs and protocols where the existing DTCs do not meet the international standard. 
Four DTCs concluded by the Philippines with jurisdictions which were not able to access information held by banks or fiduciaries do not contain a provision similar to Article 26(5) OECD Model Tax Convention, resulting in an impediment to the effective EOI for tax purposes.  The Philippines should work with the relevant DTC partners to incorporate Article 26(5) OECD Model Tax Convention into these DTCs. 
Phase 2 Rating Factors Recommendations
Largely Compliant.      
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   The Philippines has a wide treaty network. It does not have an EOI agreement with one of its important trade partners and it does not have DTCs to the standard with two of its important trade partners. The Philippines has no restrictions in its domestic law to exchange information and it has actively taken the necessary steps to (re)negotiate these EOI agreements.  The Philippines should continue to develop its EOI network with all relevant partners. 
Phase 2 Rating Factors Recommendations
Compliant.      
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.      
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.      
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Largely Compliant.   Although the Philippines has made significant progress in response times over the three-year period, in many instances the competent authority has been unable to answer incoming requests in a timely manner. The EOI structure and processes for handling EOI requests, which obtained for much of the review period, in particular the lack of clear monitoring of timeframes for obtaining and providing information, has inhibited expedient responses to EOI requests.  The Philippines should continue to improve its resources and streamline its processes for handling EOI requests to ensure that all EOI requests are responded to in a timely manner. 
The Philippines does not always provide an update or status report to its EOI partners within 90 days in the event that it is unable to provide a substantive response within that time.  The Philippines should ensure that the new internal procedures put in place to provide status updates to EOI partners within 90 days in those cases where it is not possible to provide a complete response within that timeframe operates effectively.