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BIR Prescribed Guidelines and Procedures for Requesting Mutual Agreement Procedure Assistance in the Philippines

The Bureau of Internal Revenue (“BIR”) issued Revenue Regulations (“RR”) No. 10-2022 which prescribes the guidelines and procedures to be followed by taxpayers in requesting for Mutual Agreement Procedure (“MAP”) assistance from the Philippine Competent Authority to resolve disputes arising from taxation not in accordance with the provisions of the relevant Double Taxation Agreement (“DTA”). 

With MAP, the affected taxpayer is given another avenue, independent from the ordinary legal remedies, to resolve disputes resulting from the inconsistent and improper application or interpretation of treaty provisions.

Initiating a MAP Process

Prior to making a formal request for MAP assistance, a taxpayer may request for pre-filing consultation to the Chief of International Trade Affairs Division (“ITAD”). If the Chief of ITAD believes that the issues may be resolved through MAP, it shall advise the taxpayer to submit a formal request for MAP assistance. 

Minimum Information Required 

The minimum information that must be included in the request are as follows:

  1. Identity of the taxpayer(s) to which the MAP relates (name, address, taxpayer identification number, contact details and the relationship between the concerned taxpayers, if applicable);
  2. The tax convention article(s) that the taxpayer asserts is (are) not being correctly applied, and the taxpayer’s interpretation of the application of the article;
  3. Relevant facts of the case, the taxation years or period involved, and the amounts involved (in both the local currency and foreign currency);
  4. The name of the foreign tax administration involved and, if possible, identification of the regional or local tax administration office that has made, or is proposing to make, the adjustment;
  5. Analysis of the issue(s) involved, including its interpretation of the application of the specific treaty provision(s);
  6. Whether the MAP request was also submitted to the competent authority of the other Contracting Party, together with the date of such submission, the name and the designation of the person or the office to which the MAP request was submitted g. Whether the issue(s) involved were previously dealt with;
  7. A statement indicating whether the taxpayer has filed a notice of objection, notice of 
  8. Appeal, refund claim, or comparable document in either of the relevant jurisdictions;
  9. A schedule of the time limitations in each jurisdiction (domestic as well as tax convention time limits) in respect of the years for which relief is sought (in cases of multiple taxpayers, a schedule for each); and
  10. A statement confirming that all information and documentation provided in the MAP request is accurate and that the taxpayer will assist the competent authority in its resolution of the issue(s) presented in the MAP request by furnishing any other information or documentation required by the competent authority in a timely manner.

Documentary Requirements

A certified true copy of the following documents, if relevant, shall be attached to the MAP request:

  1. Final Assessment Notice, rulings duly issued by the competent officials of the BIR or any equivalent document which contains the action that results in double taxation; 
  2. Copies of tax assessments, audits conducted by the foreign tax authority leading to the incorrect application of the tax treaty provision;
  3. Audited Financial Statements and Income Tax Return duly filed with the BIR together with the latter’s attachments, transfer pricing documentation, advance ruling, advance pricing arrangement (“APA”);
  4. Decisions of a competent court or tax tribunal on a similar case involving the same factual and legal issues;
  5. A copy of any other request for MAP assistance and the associated documents filed, or to be filed, with the competent authority of the other contracting state, including copies of correspondence from the other tax administration. copies of briefs, objections, etc., submitted in response to the action or proposed action of another tax administration (if applicable, translated copies are helpful and where documentation is voluminous, a description of the documentation may be acceptable);
  6. A copy of the complaint or appeal filed in court or with the tax authorities, if any;
  7. A copy of any settlement or agreement reached with the other jurisdiction which may affect the MAP process;
  8. Proof of payment of tax resulting from the transfer pricing adjustment made in the foreign country; and
  9. Duly authenticated Special Power of Attorney authorizing the taxpayer’s representative to file the request for MAP assistance and to do such other acts leading to the resolution of the MAP case.

Venue

Subject to the provision of the relevant DTA. the MAP request may be presented to the following:

  • Competent authority of the Contracting State of which he is a resident;
  • Competent authority of the Contracting State of which he is a citizen; or
  • If the case falls under the Non-Discrimination article of the DTA, to the Contracting State of which he is a national

Period of Filing

Depending on the provision of the DTA, the MAP request may be presented to the relevant competent authority within two (2) or three (3) years from the first notification of the action resulting in taxation not in accordance with the provisions of the DTA. In cases where the DTAs do not provide a time limit, the MAP request must be submitted to the relevant competent authority within three (3) years from the first notification of the action resulting in taxation not in accordance with the provisions of the DTA.

It must be noted that the filing period shall be reckoned from the date of receipt of the Final Assessment Notice or of a ruling denying the claim for treaty benefit, or any equivalent document which contains the action that results in double taxation.