Question & AnswerQ&A (BIR REVENUE REGULATIONS NO. 10-2010)
The main purpose is to provide guidelines enabling the Bureau of Internal Revenue (BIR) to respond to requests for exchange of information pursuant to international conventions or agreements on tax matters, implementing RA No. 10021 on exchange of information by the BIR.
Financial Institutions include both private and government financial institutions such as banks, non-bank financial intermediaries performing quasi-banking functions, and other non-bank financial intermediaries including financing companies.
The Commissioner is authorized to obtain any information, including bank deposits and related information held by financial institutions, to comply with exchange of information provisions under international tax conventions or agreements to which the Philippines is a party.
Yes, the BIR may use the information gathered for tax assessment, verification, audit, and enforcement purposes within the Philippines.
The Commissioner of Internal Revenue is designated as the competent authority for such information exchanges.
Upon the order of the President of the Philippines and under rules prescribed by the Secretary of Finance, a foreign tax authority may inspect income tax returns of specific taxpayers subject to exchange of information requests.
Any information received is treated as absolutely confidential and may only be disclosed to persons or authorities involved in tax assessment, collection, enforcement, prosecution, or appeals related to the taxes covered by the agreements.
The request must include the identity of the person under investigation, nature of information sought, tax purpose, grounds for believing the information is held in the Philippines, the person believed to have the information, conformity with the foreign tax authority's laws, and that all means to obtain information domestically have been exhausted.
The request is coursed through the International Tax Affairs Division (ITAD), verified for compliance, and the Commissioner informs the concerned financial institution. The institution has 15 days to comply or explain failure, with possible extension not exceeding 30 days. The Commissioner must notify the foreign authority of receipt, deficiencies, or reasons for refusal promptly.
Officers or agents who willfully refuse to supply information face a fine between P50,000 and P100,000, or imprisonment from 2 to 5 years, or both.
The Commissioner must notify the taxpayer in writing within 60 days from receipt of the foreign request.