Revenue Regulations Implementing the RP-Singapore Tax Treaty

August 11, 1982 REVENUE REGULATIONS NO. 07-82 SUBJECT : Revenue Regulations Implementing the RP-Singapore Tax Treaty TO : All Internal Revenue Officers and Others Concerned Pursuant to the provisions of Section 326, in relation to Section 4 and 29/c) (6), of the National Internal Revenue Code of 1977, as amended, these regulations are hereby promulgated to implement the provisions of the Conventions between the Philippines and Singapore for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on income. CHAPTER I SCOPE, GENERAL DEFINITIONS AND AVAILMENT OF TREATY BENEFITS SECTION 1. Effectivity . The Convention took effect in the Philippines in respect to tax withheld at source on amounts paid on or after, January 1, 1977 and in respect of other taxes in the taxable year beginning on or after January 1,1977. [Art. 27, par. 2] SECTION 2. Personal Scope . The Convention applies to residents of Singapore or the Philippines or both of them. [Art. 1] cd i SECTION 3. Taxes Covered . The taxes subject of the Convention are the income taxes imposed by the Philippines and Singapore. The convention also applies to any identical or substantially similar taxes which are imposed after August 1,1977, the date the Convention was signed in addition to, or in place thereof. [Art. 2] SECTION 4. Availment of treaty benefits . Any person availing of any of the benefits provided by the Convention shall file the appropriate BIR Form for Income Tax Convention hereinbelow indicated with the International Operation Division , Bureau of Internal Revenue, National Office Bldg. , Diliman, Quezon City. If the one availing the benefits resides outside Metro Manila, he may file the appropriate BIR Form with the Regional Office nearest his residence. It shall be the duty of the Regional Director to forward the said form to the International Operation Division for proper action. APPLICATION FORMS FOR INCOME TAX CONVENTION BIR Form No. TC-001 Relief from tax on Passive Income, Business Income, Compensation Income, etc. BIR Form No. TC-002 Relief from tax on profits from Shipping and Aircraft. All other request for relief where the above forms are inapplicable, the party availing thereof, may write to the Commissioner of Internal Revenue Attn: The Chief, International Taxation Division for a ruling on the relief requested. SECTION 5. General Definitions . (1) For the purposes of these Regulations unless the context otherwise requires, the following terms mean: (a) "Person" an individual, an estate, a trust, a company, and other body of persons which is treated as an entity for tax purposes; (b) "Company" a body corporate or any other entity which is treated as a body corporate for tax purposes. [Art. 3, 1 (d)] (c) "Resident of Philippines" or "Resident of the Singapore" any person who is a resident of the Philippines or of Singapore for tax purposes of that State; [Art. 4, 1] (d) "National" an individual possessing the citizenship, or a legal person, partnership and association created, organized or incorporated under the laws of the Philippines or Singapore; [Art. 3, 1 (h)] (e) "Associated enterprise" an enterprise of a Contracting State participated directly or indirectly in its management, control or capital by an enterprise of the other Contracting State; or the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State; [Art. 9, 1] (g) "Dividends" income from shares, "jouissance" shares or "jouissance" rights, mining shares, founder's shares or other rights, not being debt-claims, participating in profits, as well as income assimilated to income from shares by the taxation law of the State of which the company making the distribution is a resident; [Art. 10, 4] (h) "Interest" income from debt-claims of every kind, whether or not secured by mortgage, and whether or not carrying a right to participate in the debtor's profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures, as well as income assimilated to income from money lent by the taxation law of the State in which the income arises, including interest on deferred payment sales. Penalty charges for late payment shall not be regarded as interest; [Art. 11, 3] (i) "Royalties" payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work, including cinematographic films or tapes for television or broadcasting, any patent, trademark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience; [Art. 6, 3] (j) "Immovable property" the same as defined by the domestic laws of the Philippines or Singapore in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships, boats and aircraft shall not be regarded as immovable property; [Art. 6, 2] cd i (k) "Professional services" include independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentist, and accountants; [Art. 14, 3] (l) Pensions periodic payments made in consideration for past services rendered. [Art. 17, 2] (m) "Competent authority" in the case of the Philippines, the Minister of Finance or his authorized representative; in the case of Singapore, the Minister for Finance or his authorized representative. [Art. 3, 1. (f)] (2) As regards the application of the convention by a Contracting State any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that State relating to the taxes which are the subject of the Convention. [Art. 3, 2] SECTION 6. Resident . (1) Where an individual is a resident of both the Philippines and Singapore, then his status shall be determined as follows: (a) He shall be deemed to be a resident of the State in which he has a permanent home available to him. If he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (hereinafter referred to as his "centre of vital interest"); (b) If the state in which he has his centre of vital interest cannot be determined. or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode; (c) If he has an habitual abode in both States or in neither of them, the component authorities of the two States shall settle the question by mutual agreement. [Art. 4,2] (2) Where a person other than an individual is a resident of the State of the Philippines and Singapore, it shall be deemed to be a resident of the State of which its effective management is situated. If its place of effective management cannot be determined, the competent authorities of the Philippines and Singapore shall settle the question by mutual agreement. [Art. 4, 3] CHAPTER II TAXATION OF BUSINESS PROFITS SECTION 7. General Rule . Profits of an enterprise of Singapore are taxed in the Philippines only if that enterprise carries on business in the Philippines through a permanent establishment but only so much as is attributed to such permanent establishment. [Art. 7, 1] SECTION 8. Attribution Rule . (1) Where the business is carried on through a permanent establishment there shall be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and a separate enterprises engaged in the same or similar activities under the same or similar conditions and dealing wholly independently from its head office in Singapore. The profits to be attributed to a permanent establishment may also be determined on the basis of an apportionment of the total profits of the enterprise to its various parts; the method of appointment shall, however, be such that the result shall be in accordance with the principles embodied in the Convention. [Art. 7, 2] (2) There shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the Philippines or elsewhere. [Art. 7, 3] (3) Notwithstanding the provisions of paragraph 2 above, no deduction shall be allowed in respect of amounts paid or charged (other than reimbursement for actual expenses) by the permanent establishment to the head office of the enterprise or any of its offices, by law way of: (a) Royalties, fees or other similar payments in return for the use of patents or other rights; (b) commission for specific services performed or for management; and (c) interest on money lent to the permanent establishment, except in the case of banking institution. [Art. 7, 4] (4) No profits shall be attributed to a permanent establishment of goods or merchandise for an enterprise of Singapore. [Art. 7, 5] SECTION 9. Profits dealt with separately in other articles of the Convention . Where profits include items of income which are dealt with separately in other Articles of the Convention or in other Sections of these Regulations, then the provisions of those Articles or Sections shall govern on such profits. [Art. 7, 6] SECTION 10 . Permanent establishment . V (1) The term "permanent establishment" includes specially but is not limited to: (a) a seat of management; (b) a branch; (c) an office; (d) a store or other sales outlets; (e) a factory; (f) a workshop; cd i (g) a warehouse in relation to a person providing storage facilities for others; (h) a mine, quarry or other place of extraction of natural resources; (i) a building site or construction or assembly project or installation project or supervisory activities in connection therewith, provided such site, project or activity continues for a period of more than 183 days; and (j) the furnishing of services, including consultancy services by resident of Singapore through employees or other personnel, provided activities of that nature continue (for the same or a connected project) within the Philippines for a period or periods aggregating more than 183 days. [Art. 5, 2] The said term does not include: (i) The use of facilities solely for the purpose of storage, display or occasional delivery of goods or merchandise belonging to the enterprise; (ii) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage display or occasional delivery, or for the purpose of processing by another enterprise; and (iii) the maintenance of a fixed place of business solely for the purpose of, purchasing goods or merchandise or of collecting information, for scientific research or for similar activities which have a preparatory or auxiliary character, for the enterprise. [Art. 5, 3] (2) Where a person, other than an agent of an independent status, is acting in the Philippines, on behalf of an enterprises of Singapore, that enterprise shall be deemed to have a permanent establishment in the Philippines if - (a) he has, and habitually exercise in the Philippines, an authority to conclude contracts in the name of that enterprise, unless the exercise of such authority is limited to the purchase of goods or merchandise for that enterprise; or (b) he has no such authority, but habitually maintains in the Philippines a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of an enterprise of Singapore. [Art. 5, 4] acd (3) An enterprise of Singapore is not deemed to have a permanent establishment in the Philippines merely because it carries on business in the Philippines through a broker, general commission agent, or any other agent of an independent status, where such person is acting in the ordinary course of his business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, he shall not be considered an agent of independent status within the meaning of this paragraph if the transactions between the agent and the enterprise were not made under arm's length condition. [Art. 5, 5] (4) An insurance enterprise of Singapore except with respect to reinsurance, is deemed to have a permanent establishment in the Philippines, if it collects premiums in the Philippines or insures risks situated therein through an employee or a representative situated therein who is not an agent of an independent status to whom paragraph 3 above applies [Art. 5, 6] (5) The fact that a company of Singapore controls, or is controlled by, a Philippine company, or which carries on business in the Philippines (whether through a permanent establishment or otherwise), shall not of itself constitutes either company a permanent establishment of the other. [Art. 5, 7] SECTION 11 . Associated Enterprises . (1) Any profits of associated enterprises which would have accrued to one of them may be included in the profits of that enterprise and taxed accordingly. [Art. 9, 1] (2) Profits of an enterprise of the Philippines which are taxable in the Philippines and which are also included as profits of its associated enterprises in Singapore and taxed accordingly, an appropriate adjustment to the amount of tax charged on those profits may be made in the Philippines if the profits so included are profits which would have accrued to the enterprise of Singapore if the conditions made between the two enterprises had been those which would have been made between independent enterprises. In determining the adjustment, due regard shall be had to the other provisions of the Convention and of these Regulations in relation to the nature of the income. [Art. 9, 2] CHAPTER III TAXATION OF PASSIVE INCOME SECTION 12 . Dividends . (1) Dividends paid by a company of Singapore to a resident of the Philippines are taxable as an ordinary foreign source income under Title II of the National Internal Revenue Code [Art 10, 1] (2) Dividends paid by a Philippine company to a resident of Singapore who is a beneficial owner thereof are taxes as follows: cd i (a) 15% of the gross amount of the dividends if the recipient is a company of Singapore (including partnership) and during the part of the paying company's taxable year which precedes the date of payment of the dividends and during the whole of its prior taxable year (if any), at least 15% of the outstanding shares of the voting stock of the paying company was owned by the recipient company; and (b) 25% of the gross amount of the dividends in all other cases. [Art. 10, 2] (3) Where a company of Singapore derives profits or income from the Philippines no tax shall be imposed on the dividends paid by that company, except insofar as such dividends are paid to a resident of the Philippines, or insofar as the holding in respect on which the dividends are paid is effectively connected with a permanent establishment of a fixed base situated in the Philippines, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in the Philippines. [Art 10, 6] SECTION 13 . Interest . (1) Interest arising in Singapore and paid to a resident of the Philippines is taxable as an ordinary foreign source income under title II, National Internal Revenue Code. [Art. 11, 1] (2) Interest arising in the Philippines and paid to a resident of Singapore is taxed as follows: (a) Exempted if paid in respect of a loan made, guaranteed or insured by such institutions as are specified and agreed in letters exchanged between the competent authorities of the Philippines and Singapore; [Art. 11, 7 (a)] (b) 10% of the gross amount of interest in respect of public issues of bonds, debentures or similar obligations and paid by a Philippine company; [Art. 11, 7 (b)] (c) 15% of the gross amount of interest in all other cases [Art. 11, 2] SECTION 14 . Royalties . (1) Royalties arising in Singapore and paid to a resident of the Philippines are taxable as an ordinary foreign source income under Title II, National Internal Revenue Code. [Art. 12, 1] 2) Royalties arising in the Philippines and paid to a resident of Singapore who is the beneficial owner of the royalties are taxed as follows: cdt (a) 15% of the gross amount of royalties paid by an enterprise registered with the Philippine Board of Investments and engaged in preferred areas of activities and royalties in respect of cinematographic films or tapes for television or broadcasting; (b) 25% of the gross amount of the royalties in all other cases. [Art. f 12, 2 (a) & (c)] SECTION 15 . Source of interest and royalties . Interest and royalties are deemed to arise in the Philippines when the payer is the Philippine Government itself, a political subdivision or a local authority, a statutory authority or a resident of the Philippines. Where, however, the person paying the interest or royalties, whether he is a resident of the Philippines or not, has in the Philippines a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred or the contract under which the royalties are paid was concluded, and such interest or royalties are borne by such permanent establishment, then such interest or royalties are deemed to arise in the Philippines. [Arts. 11, 5 & 12, 5] SECTION 16 . Where special relationship between payer and payee exists . Where, owing to special relationship between the payer and the recipient or between both of them and some other person, the amount of interest paid, having regard to the debt-claim for which it is paid, or the amount of the royalties paid, having regard to the use, the right or information for which they are paid, exceeds the amount which should have been agreed upon by the payer and the recipient in the absence of such relationship, the provision of Sections 13 and 14 of these Regulations shall apply only to the last mentioned amount. In such a case, the excess part of the payments shall remain taxable according to the provisions of the National Internal Revenue Code of the Philippines, due regard being had to the other provisions of the Convention and these Regulations. [Art. 11, 6 & 12, 6] SECTION 17 . Non-applicability of sections 12, 13 and 14 . The provisions of Sections 12, 13 and 14 of these Regulations shall not apply if the recipient of the dividends, interest and royalties, being a resident of Singapore, carries on trade or business in the Philippines through a permanent establishment, or performs professional services from a fixed base in the Philippines, and the holding by virtue of which the dividends, or the right or property in respect of which the royalties, are respectively paid are effectively connected with such cases, the provisions of Chapter II or IV of these Regulations, as the case may be, shall apply. [Arts. 10, 5; 11, 4 & 12, 4] For the purposes of the preceding paragraph an income is considered effectively connected with the conduct of a trade or business if the asset generating the income is used in or held for use in the conduct of the trade or business, or if the activities or the trade or business were material factors in the realization of the income. CHAPTER IV TAXATION OF SPECIFIC INCOME ITEMS SECTION 18 . Income from immovable property . Income derived by a resident of Singapore from immovable property situated in the Philippines including income from agriculture or forestry is taxable in accordance with the National Internal Revenue Code. [Art. 6, 1] The provision of the above paragraph is also applicable to: (a) income derived from the direct use, letting, or use in any other form of immovable property and profits from the alienation of such property [Art. 6, 3]; (b) income from immovable property of an enterprise; and (c) income from immovable property used for the performance of professional services. [Art. 6, 4] SECTION 19 . Shipping and air transport . Profits of an enterprise of Singapore derived in the Philippines from the operation of ships or aircraft in international traffic are taxed at one and one half (1-1/2) per cent of the gross Philippine billings or the lowest rate of tax imposed by the Philippines on such profit received by an enterprise of another country. [Art. 8, 1] SECTION 20 . Gains from alienation of property . (1) Gains derived by a resident of Singapore from the alienation of immovable property situated in the Philippines are taxed in accordance with the provisions of the National Internal Revenue Code. [Art. 13, 1] (2) Gains from alienation of movable property forming part of the business property of a permanent establishment which an enterprise of Singapore has in the Philippines or movable property pertaining to a fixed base available to a resident of Singapore in the Philippines for the purpose of performing professional services, including such gains from the alienation of such permanent establishment (alone or together with the whole enterprise) or of such a fixed base, are taxed in accordance with the provisions of the National Internal Revenue Code. [Art. 13, 2] (3) Gains derived by an enterprise of Singapore from alienation of ships or aircraft operated in international traffic and movable property pertaining to the operation of such ships or aircraft, are exempted in the Philippines. Art. 13, 2] (4) Gains derived by a resident of Singapore from the alienation of shares of a company, or an interest in partnership or trust, the property of which consists principally of immovable property situated in the Philippines, are taxable in the Philippines in accordance with the National Internal Revenue Code. [Art. 13, 3] (5) Gains derived by a resident of Singapore from the alienation of any property, other than those mentioned in the preceding paragraphs, are exempted in the Philippines. [Art. 13, 4] SECTION 21 . Personal services . Salaries, wages and other similar remuneration or income for personal (including professional) services of a resident of Singapore for services performed in the Philippines are exempted in the Philippines if - (a) the recipient is present in the Philippines for a period or periods not exceeding in the aggregate 90 days in case of professional services and 183 days in other cases, in the calendar year concerned; and (b) the remuneration or income is paid by, or on behalf of , a resident of Singapore; and (c) the remuneration or income is not borne directly by a permanent establishment which that person has in the Philippines. [Art. 14, 1 and 2] Notwithstanding the provisions of the above paragraph, remuneration in respect of employment as a member of the regular crew or complement of a ship or aircraft operated in an international traffic by an enterprise of Singapore is exempted in the Philippines. [Art. 14, 4] SECTION 22 . Director's Fees . (1) Director's fees and similar payments derived by a resident of Singapore in his capacity as a member of the board of directors of a Philippine company are taxed in accordance with the provisions of the National Internal Revenue Code. [Art. 15, 1] 2) The remuneration which a person to whom paragraph 1 applies derives from the company in respect of the discharge of day-to-day functions of a managerial or technical nature is taxable in the Philippines in accordance with the provisions of Section 21 of these Regulations. [Art. 15, 2] SECTION 23 . Artistes and athletes . (1) Notwithstanding the provisions of Section 21 of these Regulations, income derived by entertainers such as theater, motion picture, radio or television artistes, and musicians, and by athletes, from their personal activities as such in the Philippines are taxable in the Philippines. [Art. 16, 1] (2) Where the income in respect of personal activities performed in the Philippines as such by an entertainer or athlete accrues not to that entertainer or athlete himself but to another person that income is, notwithstanding the provisions of Chapter II and Section 21 of these Regulations, taxable in the Philippines. [Art. 16, 2] (3) The provisions of paragraph 1 above shall not apply to income derived from activities performed in the Philippines by entertainers and athletes if the visit to the Philippines is substantially supported by funds of the Government of Singapore, including any of its political subdivision, local authority of statutory body thereof, nor to income derived by entertainers and athletes in respect of such activities performed for a non-profit and cultural organization no part of the income of which was payable to, or was otherwise available for the personal benefit of , any proprietor, member or shareholder thereof if the organization is certified as qualifying under this provision by the competent authority of Singapore. [Art. 16, 3] (4) Notwithstanding the provisions of Chapter II of these Regulations, where the activities, mentioned in paragraph 1 above are provided in the Philippines, by an enterprise of Singapore, the profits derived from providing these activities are taxable in the Philippines, unless the enterprise in substantially supported from funds of the Government of Singapore, including any of its political subdivision, local authority or statutory body thereof, in connection with the provisions of such activities or unless the enterprise is a non-profit cultural organization referred to in paragraph 2 above. [Art. 16, 4] SECTION 24 . Pensions . (1) Subject to the provisions of Section 25 of these Regulations, pensions and other similar remunerations arising in Singapore and paid to a resident of the Philippines are exempted in the Philippines. [Art, 17, 1] (2) Pensions arising in the Philippines and paid to a resident of Singapore shall be subjected to the provisions of the National Internal Revenue Code. [Art. 17, 1] SECTION 25 . Government functions . Remuneration, including pension, paid by the Government of Singapore, or a political subdivision or a local authority thereof, to citizen of Singapore or to an individual who is not a citizen of the Philippines who goes to the Philippines solely for the purpose of being engaged by Singapore for services rendered to Singapore in the discharge of functions of a governmental nature shall be exempt from tax in the Philippines. [Art. 18, 1] The provisions of the paragraph above shall not apply to remuneration including pension paid in respect of services rendered in connection with any trade or business carried on by the Government of Singapore or a political subdivision or local authority or statutory authority thereof. [Art. 18, 2] SECTION 26 . Students and trainees . (1) An individual who is a resident of Singapore immediately before visiting the Philippines and is temporarily present in the Philippines solely - (a) as a student of a university, college or school in the Philippines; (b) as a recipient of a grant, allowance or award from a government or scientific, educational, religious or charitable organizations for the primary purposes of study, research, or training, or (c) as a business apprentice shall be exempt from tax in the Philippines in respect of (i) all remittances from abroad for the purpose of maintenance, education, study, research or training; (ii) the grant, allowance or award; and (iii) any remuneration for personal services rendered in the Philippines not exceeding the sum of S$3,600 or its equivalent in Philippine currency in any calendar year with a view to supplementing the resources available to him for such purpose. [Art. 19, 1] (2) An individual who is a resident of Singapore immediately before visiting the Philippines and is temporarily present in the Philippines solely as a trainee for the purpose of acquiring technical, professional or business experience shall, for a period not exceeding two years from the date of his first arrival in the Philippines in connection with that visit, be exempt from tax in the Philippines in respect of - (a) all remittances from abroad for the purposes of his maintenance or training; and (b) any remuneration for personal services rendered in the Philippines not exceeding the sum of S$12,000 or its equivalent in Philippine currency in any calendar year during that visit provided such services are in connection with his training or incidental thereto. [Art. 19, 2] (3) The benefits of paragraph 1 and 2 above shall not be concurrently cumulative. [Art. 19, 3] SECTION 27 . Teachers and researchers . (1) An individual who is a resident of Singapore immediately before visiting the Philippines, and who, at the invitation of any university, college, school or other similar educational institution which is recognized by the competent authority of the Philippines, visits the Philippines for a period not exceeding two years solely for the purpose of teaching or research or at such educational institution is exempt from tax in the Philippines on his remuneration for such teaching or research. [Art. 20, 1] (2) This section shall not apply to income from research if such research is undertaken not in the general interest but primarily for the private benefit of a specific person or persons. [Art. 20, 2] SECTION 28 . Income not expressly mentioned . Items of income not expressly mentioned in the foregoing sections of these Regulations and arising in the Philippines are taxable in the Philippines in accordance with the National Internal Revenue Code. [Art. 21] CHAPTER V RELIEF PROVISIONS SECTION 29 . Elimination of double taxation . (1) Subject to the provisions of Section 30 (c) of the National Internal Revenue Code of 1977, as amended, income tax payable under the laws of Singapore on profits, incomes, or gains arising in Singapore shall be deducted from any Philippine tax payable in respect of such profits, incomes, or gains. [Art. 24, 3] (2) Where the income is a dividend paid by a company of Singapore to a Philippine company which owns not less than 15 per cent of voting shares of the company paying the dividend, the credit shall take into account the Singapore tax payable by the company in respect of its income. The credit shall not, however, exceed that part of the Philippine tax, as computed before the credit is given which is appropriate to such item of income. [Art. 22, 3] (3) The term "Singapore tax payable" shall be deemed to include the amount of Singapore tax which would have been paid if the Singapore tax had not been reduced in accordance with the Convention and the special incentive laws designed to promote economic development in Singapore, effective on August 1, 1977, on which may be introduced in the future in the Singapore taxation laws in modification of, or in addition to, the existing laws. [Art. 22, 4] SECTION 30 . Administrative reliefs ( mutual agreement procedure ). (1) Where a Filipino resident considers that the action of the Philippine tax authorities results or will result for him, in taxation not in accordance with the provisions, of the Convention, he may, notwithstanding the remedies provided for by the national laws of the Philippines, present his case in writing stating the grounds for claiming the revision of such taxation within two years from the first notification of the action resulting in that questionable taxation to the competent authority of the Philippines. [Art. 24, 1] (2) The said Philippine authority referred to above shall endeavor, if objection appears to be justified and is not able to resolve it, present the case for mutual agreement with his counterpart in Singapore. [Art. 24, 2] (3) The Philippines shall not, after the expiration of the time limits provided in its national laws, increase the tax base of a resident of the Philippines or of Singapore by including therein items of incomes which have also been taxed in Singapore. This paragraph shall not apply in case of fraud, willful default or neglect. [Art. 24, 3] (4) The competent authority of the Philippines shall endeavor to resolve by mutual agreement with his counterpart in Singapore any difficulties or doubts arising as to the interpretation or application of the Convention. In particular, the competent authority of the Philippine may consult his counterpart in Singapore to endeavor to agree: cdt (a) on the attribution of profits to a resident of Singapore and its permanent establishment situated in the Philippines; [Art. 24, 4 (a)] (b) on the allocation of income between a resident of either state and any associated enterprise provided for in Section 11 of these Regulations. [Art. 24, 4(b)] (5) Nothing in the Convention shall be construed as preventing the Philippines from taxing its citizens in accordance with its domestic laws. [Art. 24, 5] (6) The competent authority of the Philippines may consult his counterpart in Singapore for the elimination of double taxation in cases not provided for in the Convention. [Art. 24, 6] CHAPTER VI SPECIAL PROVISIONS SECTION 31 . Non-discrimination . (1) Nationals of Singapore shall not be subjected in the Philippines to any taxation or any requirement connected therewith which is another or more burdensome than the taxation and connected requirements to which Philippine nationals in the same circumstances are or may be subjected. [Art. 23, 1] (2) The taxation of a permanent establishment which an enterprise of Singapore has in the Philippines is not to be less favorably levied in the Philippines carrying on the same activities. [Art. 23, 2 ] (3) Nothing in these Regulations nor in the Convention shall be construed as granting to (a) residents of Singapore any personal allowances, relief and reduction for tax purposes granted to residents of the Philippines; or (b) nationals of Singapore whose personal allowances, relief and reduction for tax purposes are granted by Singapore to its citizens who are not residents of Singapore or to such other persons specified in the taxation laws of Singapore. [Art. 23, 3] (4) Philippine enterprises, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of Singapore, are not be subjected in the Philippines to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which similar Philippines enterprise, are or may be subjected. [Art. 23, 4] acd (5) Nothing in these Regulations nor in the Convention shall be construed as extending to nationals of Singapore the engagement of tax incentives designed to promote economic development of the Philippines limited to Philippine nationals. [Art. 23, 5] (6) In this section, the term "taxation" means taxes which are the subject of the Convention. [Art. 23, 6] SECTION 32 . Exchange of information . (1) The competent authority of the Philippines shall exchange such information as is necessary for carrying out the Convention and of Philippine domestic laws concerning taxes covered by the Convention insofar as the taxation there-under is in accordance with the Convention, or for the prevention of fraud or fiscal evasion in relation to such taxes. Any information so exchanged is to be treated as secret and is not to be disclosed to any persons or authorities other than those concerned with the assessment or collection of taxes which are the subject of the Convention. [Art. 25, 1] (2) In carrying out the functions prescribed by this section, the aforesaid Philippine authority shall in no case: (a) carry out administrative measure at variance with Philippine or Singapore laws or administrative practices; (b) supply particulars which are not obtainable under the Philippine laws or in the normal course of its administration; or (c) supply information which discloses any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which will be contrary to public policy. [Art. 25, 2] SECTION 33 . Diplomatic and Consular Offices . Nothing is these Regulations nor in the Convention shall affect the fiscal privileges of diplomatic and consular officials under the general rules of international law or under the provisions of special agreements. [Art. 26] SECTION 34 . Effectivity . These Regulations shall take effect immediately. (SGD.) CESAR VIRATA Minister of Finance Recommended by: (SGD.) RUBEN B. ANCHETA Acting Commissioner