Definitions
- Financial Institutions: Includes private and government entities such as banks, non-bank financial intermediaries, financing companies
- Foreign Tax Authority: Tax authority of a requesting State under applicable tax treaty or convention
- Income Tax Returns: All BIR-issued income tax forms and related attachments and documents
- Inspection: Examination or furnishing of certified copies of income tax returns subject to exchange of information
- International Agreements on Tax Matters: Refers specifically to Tax Information Exchange Agreements (TIEAs)
- International Convention or Tax Treaty: Includes Double Taxation Conventions/Agreements (DTCs/DTAs) for preventing double taxation and fiscal evasion
Authority to Obtain Information
- Commissioner of Internal Revenue authorized to obtain any required information, including bank deposits held by financial institutions
- Authority grounded on Republic Act No. 10021 and Tax Code provisions
- Information obtained to comply with obligations under international tax conventions or agreements
Use of Obtained Information
- BIR may use exchanged information for assessment, verification, audit, and enforcement purposes
- No limitation on utilizing information after receipt under exchange agreements
Competent Authority and Legal Protection
- Commissioner designated as competent authority for exchange of information
- Exchange of information does not violate confidentiality prohibitions of the Tax Code
Inspection by Foreign Tax Authorities
- Foreign tax authorities may examine specific income tax returns in the Philippines
- Requires order from the President of the Philippines
- Subject to rules prescribed by the Secretary of Finance upon recommendation of the Commissioner
Confidentiality Obligation
- Information furnished to foreign tax authorities must be kept strictly confidential
- Disclosure limited to persons or authorities involved in related tax assessment, collection, enforcement, prosecution, or appeal processes
Requirements for Requests for Information
- Must clearly state:
- Identity of the person under investigation
- Nature and preferred form of information sought
- Tax purpose of the request
- Grounds that information is held within the Philippines
- Name and address of persons holding the information, if known
- Compliance with foreign law and international agreements
- Authority to exchange information under foreign domestic law
- Exhaustion of other means to obtain the information except when causing disproportionate difficulty
Processing of Requests
- All requests routed through BIR's International Tax Affairs Division (ITAD)
- No direct communication allowed between other revenue officials and foreign authorities without Commissioner's approval
- ITAD verifies validity and completeness of requests
- Financial institutions notified within 15 days to provide information or explain inability
- Extensions allowed up to 30 days on written request
- Commissioner must respond promptly and notify deficiencies within 60 days
- Commissioner must inform foreign authority within 90 days if unable or unwilling to furnish information, stating reasons
Penalties for Willful Refusal
- Officers or managers of financial institutions who willfully refuse to provide requested information face:
- Fines between ₱50,000 and ₱100,000
- Imprisonment from 2 to 5 years
- Or both penalties
Notice to Taxpayers
- Taxpayers to be notified in writing within 60 days of foreign tax authority's request for information held by financial institutions
Repealing Clause
- All inconsistent existing rules and regulations are modified, repealed, or revoked accordingly
Effectivity Clause
- Regulations effective 15 days after complete publication in a newspaper of general circulation