The ELA is proud to welcome our newest member firm in Vietnam: Le & Tran
The ELA is proud to welcome our newest member firm in Vietnam: Le & Tran


BIR issues regulation on spontaneous exchange of taxpayer-specific rulings


Leah C. Abutan and Patrick Edward L. Balisong

Submitted by Firm:
SyCip Salazar Hernandez & Gatmaitan
Firm Contacts:
Dante T. Pamintuan, Rodelle B. Bolante
Article Type:
Legal Article

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.

Scope of exchange

The transparency framework in the Philippines covers:

  • past rulings — PE rulings or rulings concerning the existence or absence of a PE of a foreign enterprise in the Philippines that were issued during the following periods:
    • 1 January 2015 to 31 August 2017; and
    • 1 January 2012 to 31 December 2014, provided the rulings were still in effect as of 1 January 2015; and
  • future rulings — rulings issued beginning 1 September 2017 and regarding:
    • rulings related to a preferential regime;
    • cross-border unilateral advance pricing arrangements (APAs) and any other cross-border unilateral tax ruling (eg, an advance tax ruling) covering transfer pricing or the application of transfer pricing principles;
    • cross-border rulings giving a unilateral downward adjustment to the taxpayer's taxable profits in the country giving the ruling;
    • PE rulings; and
    • related party conduit rulings.

Potential exchange jurisdictions

The rulings may be exchanged with the country of residence of the ultimate parent company, the country of residence of the immediate parent company and, depending on the type of ruling, the jurisdictions in the below table.

Type of ruling

Potential exchange jurisdictions

Rulings related to certain preferential regimes

The countries of residence of all related parties where the taxpayer enters into a transaction for which a preferential treatment is granted, or which gives rise to income from related parties benefiting from a preferential treatment.

For the purposes of determining related parties, a 25% threshold will be applied.

Unilateral APAs or other cross-border unilateral rulings in respect of transfer pricing

The countries of residence of all related parties where the taxpayer enters into transactions that are covered by the APA or a cross-border unilateral tax ruling.

Rulings providing for a downward adjustment of taxable profits

The countries of residence of all related parties where the taxpayer enters into transactions covered by the ruling.

PE rulings

The country where the head office or PE is located.

Related party conduit rulings

The country of residence of any related party making payments to the conduit, whether directly or indirectly.

The residence country of the ultimate beneficial owner of payments made to the conduit.

Originally published by ILO Corporate Tax, Lexology. Continue reading on the Lexology site.