MANILA-Senator Loren Legarda today hailed the removal of the Philippines from the French Blacklist of tax haven territories and said that this development is reflective of the government’s efforts to improve fiscal integrity through sound policies, including the Tax Treaty with the French Government.
Legarda said that the Senate adopted the Protocol Amending the Agreement between the Philippine Government and the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income during the 15th Congress when she was Chair of the Senate Foreign Relations Committee.
“The revised agreement broadens the scope of the exchange of information requests that may be made. It now allows the exchange of information related to tax administration, including bank information,” said Legarda.
The Senator explained that in the previous PH-France Treaty, which took effect on January 1, 1978, Article 26 was not yet aligned with the text of the Exchange of Information provisions of the Organisation for Economic Cooperation and Development (OECD) Model Tax Convention, which is why the Philippines had been listed as one of the non-cooperative countries and territories (NCCTs). French nationals are dissuaded from transacting with NCCTs because of the higher tax rates being imposed on them.
“While globalization brought about an increase in international trade, it also posed greater challenges to the effective enforcement of tax laws. This is what we want to address when we adopted the new PH-France Tax Treaty,” she stressed.
“The benefits of tax treaties, especially to developing countries, cannot be gainsaid. They are intended to permit the Contracting States to better enforce their domestic laws so as to reduce tax evasion and they likewise promote technology transfer, and international academic, cultural and sports exchanges between the Contracting States,” Legarda concluded.
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