Senate ratifies double taxation agreements

To avoid double taxation on income, the Senate late Monday concurred in ratifying the tax treaties the Philippines has entered into with the Turkey, Italy and Germany.

Senate President Franklin Drilon said the concurrence is part of the efforts to help make a better business climate for the country and improve its economic policies, particularly in enhancing the flow of more foreign-direct investments (FDI).

Double taxation on income “poses a considerable barrier to trade and investment,” Senator Juan Edgardo Angara, sponsor of Senate Resolution Nos. 1540, 1541 and 1542, said.

The treaties support an enabling environment and an investment climate that is more attractive to new businesses and ventures, particularly from Germany, Italy and Turkey.

Trading partners

In his sponsorship speech, Angara said Germany was the Philippines’ top trading partner in Europe and 8th worldwide with bilateral trade amounting to $5.346 billion in 2014.

On the other hand, he said Italy was the country’s 7th highest trading partner in Europe and 24th worldwide with bilateral trade amounting to $542 million in the same period while Turkey was 14th in Europe and 41st worldwide at $138.76 million.

“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,” Angara said.

With the special authority of President Benigno S. Aquino III, Finance Secretary Cesar Purisima signed the tax agreements with Germany (SRN 1542) on September 9, 2013 in Berlin and with Italy (SRN 1541) on December 9, 2013 in Manila. Then Foreign Affairs Secretary Alberto G. Romulo signed the agreement with Turkey (SRN 1540) on March 13, 2009 in Ankara on behalf of the Philippine government.

“The Senate concurring in the ratification serves as the stimuli for encouraging and supporting new trade and investments into the country,” the senator said. – VS, GMA News