Press Release
December 14, 2015


The Senate has approved on third and final reading resolutions on the double taxation avoidance agreements that seek to promote international trade and improve political relations of the Philippines with Italy, Germany and Turkey.

Senator Sonny Angara, sponsor and chairman of the subcommittee handling the PH-Italy, PH-Germany and PH-Turkey Double Taxation Avoidance Agreements, explained that by entering into tax treaties, instances of double taxation, a situation in which both countries levy taxes on the same income, will be mitigated.

Germany, Italy and Turkey are among the Philippines' largest trading partners worldwide with Germany being the country's top trading partner in Europe and 8th worldwide; Italy, 7th in Europe and 24th worldwide; and, Turkey, 14th in Europe and 41st worldwide.

"With these tax treaties, we help build an enabling environment and investment climate that is more attractive to new businesses and ventures, particularly with Germany, Italy and Turkey," the senator said.

He pointed out that the renegotiations of the tax treaty with Italy, in particular, were prompted so as to remove the Philippines from the "blacklist" of tax havens, which had posed a considerable barrier to Italian investments into the country.

Angara added that with tax treaties in place, cross-border tax avoidance and evasion will be reduced by better exchange of tax information and mutual assistance in collection of taxes between the two countries.

"These agreements were undertaken to better enforce domestic laws, reduce tax evasion, promote technology transfer, and guarantee that Philippine tax laws are compliant with internationally agreed standards," the lawmaker said.

As of this year, the Philippines has entered into tax treaties with 42 countries.

Concerned government agencies, particularly the Department of Finance, the Bureau of Internal Revenue, the Bangko Sentral ng Pilipinas, the Department of Foreign Affairs and the Department of Justice, have endorsed the renegotiated tax agreements for the Senate's concurrence in the presidential ratification, as mandated by Article VII, Section 21 of the Constitution, which states that "(n)o treaty or international agreement shall be valid and effective unless concurred in by at least two thirds of all the member of the Senate."

Sixteen senators voted in favor of the resolutions, with no negative vote and no abstention.

"The government negotiated these tax agreements to encourage trade, investments, and ultimately deeper economic and political relations with these countries. I thank my colleagues for supporting the passage of the Senate's concurrence," Angara said.

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