Senate adopts resolutions concurring 3 global treaties

THE Senate on Tuesday adopted on third and final reading three resolutions concurring in the ratification of international treaties entered into by the Philippine government with the governments of France, Qatar and Kuwait on the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.

Sen. Loren Legarda, chairwoman of the Committee on Foreign Affairs and sponsor of Senate Resolution No. 919, 920 and 921, said the ratification of the treaties will permit the contracting states to better enforce their domestic laws in order to reduce tax evasion.

Ratifying the treaties will also result in better technology transfer among the contracting countries due to the broader scope of information exchange, she said.

“While globalization brought an increase in international trade, it also posed greater challenges to the effective enforcement of tax laws.

“Consequently, the role of international cooperation, as carried out through each country’s implementation of international standards of transparency and exchange of information for tax purposes has become more and more critical,” she added.

She cited that France for instance has blacklisted the Philippines and listed it as one of the non-cooperative countries and territories (NCCTs) because it has not amended the existing treaty with the former dealing with the provisions on exchange of information.

She said the French nationals were being dissuaded from doing business with non-cooperative countries because higher tax rates are imposed on them.

Legarda said Resolution 919 will amend the existing treaty between the Philippines and France and will allow the exchange of information related to tax administration, including those of bank information.

Likewise, she said, adopting the resolutions ratifying the treaties with Kuwait and Qatar will eliminate double taxation by allowing as credit taxes paid or accrued under the laws of Kuwait for instance, against Philippine tax.

“The treaties also include articles on non-discrimination, mutual agreement procedure and exchange of information, whereby the contracting states can exchange necessary information, in particular for prevention of fraud or evasion of taxes covered by the treaties,” she said.

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