Exchange of Information Work Manual

February 19, 2013

REVENUE MEMORANDUM ORDER NO. 003-13

 

This Order is issued to prescribe the usage of the Exchange of Information (EOI) Work Manual for the EOI Unit of the International Tax Affairs Division.

The EOI Unit is responsible for managing and implementing the exchange of information provisions in Philippine tax treaties. It serves under the Philippine Competent Authority, who is the Commissioner of Internal Revenue.

The EOI Work Manual contains guide to the internal processes within the EOI Unit. It shall be the official reference of officers and staff of the EOI Unit to ensure compliance with the international standards for the implementation of the EOI provisions of the Philippines tax treaties and with requirements of our domestic laws and regulations and revenue issuances on EOI. DCATHS

The International Tax Affairs Division, in consultation with the Deputy Commissioner of the Legal and Inspection Group, shall be responsible for updating and enhancing the Work Manual.

For purposes of this Order, the attached document shall be the final version of the EOI Work Manual.

This Order takes effect immediately.

 

(SGD.) KIM S. JACINTO-HENARESCommissioner of Internal Revenue

ATTACHMENT

EOI Work Manual

Table of Contents

Chapter 1 — Incoming and Outgoing Requests

1.1 Types of Request

1.2 Incoming Requests: receiving a request from a treaty partner

1.3 Outgoing Requests: making a request to a treaty partner

Chapter 2 — EOI Database System

2.1 Incoming Requests

2.2 Outgoing Requests

3.1 Procedures to gather non-banking information

4.1 Procedures to gather banking information

4.2 Notification to Taxpayer

5.1 Receiving spontaneous exchange

5.2 Sending information spontaneously

Chapter 6 — Confidentiality

6.1 General procedures applying to access to electronic and physical records

6.2 Sending information to a foreign competent authority

6.3 Competent authority sending information to other areas of the tax administration

6.4 Translation of information requests

6.5 Confidentiality stamp

6.6 Disclosure in certain specific circumstances

6.7 Notification to Taxpayer

6.8 Competent Authority Meetings

Chapter 7 — List of Useful Contacts

Chapter 8 — Sources of ownership and accounting information

Appendix 1 — List of foreign competent authorities

Appendix 2 — Checklist of requirements where request for bank information is made

Appendix 3 — Checklist of what to include in a request

Appendix 4 — Checklist of what to include in a response

Appendix 5 — Model Templates for EOI

Introduction

This manual was developed as a guide to the internal processes and procedures within the Exchange of Information (EOI) Section of the International Tax Affairs Division (ITAD). The EOI Section is responsible for managing and implementing the exchange of information provisions in Philippines Double Taxation Agreements (DTAs) and Tax Information Exchange Agreements (TIEAs) 1 in support of the Philippines competent authority who is the Commissioner of the Bureau of Internal Revenue (BIR).

The manual contains the following chapters:

• Chapter 1: Covers the procedures to be undertaken to deal with incoming and outgoing EOI requests;

• Chapter 2: Concerns the EOI Database System;

• Chapter 3: Sets out procedure to gather information from within BIR systems including Revenue District Offices and third parties including other government agencies; 2

• Chapter 4: Concerns the accessing of bank information;

• Chapter 5: Covers the procedures to be undertaken to deal with spontaneous exchanges of information;

• Chapter 6: Covers confidentiality;

• Chapter 7: Contains useful contacts;

• Chapter 8: Contains sources of ownership and accounting information;

• Appendix 1: Contains a list of foreign competent authorities;

• Appendix 2: Contains a checklist of requirements where a request for bank information is made; SHacCD

• Appendix 3: Contains a checklist of what to include in a request;

• Appendix 4: Contains a checklist of what to include in a response;

• Appendix 5: Contains model templates for EOI.

Competent Authority

The competent authority acts as a contact point for the competent authorities of treaty partners for EOI purposes and also for Mutual Agreement Procedures (MAPs).

Exchange of information can only take place between competent authorities or their authorized representatives. This ensures that the rules applicable to exchange of information (and in particular the confidentiality of information exchanged) are respected and consistently applied. Bypassing the competent authorities constitutes a breach of tax confidentiality which is expressly prohibited by Section 270 of the National Internal Revenue Code (NIRC)and by the terms of our DTAs and TIEAs.

Our DTAs generally provide that "the Secretary of Finance or his authorized representative(s)" are the competent authorities for the Philippines. The DTAs with Bahrain, Bangladesh, Czech Republic, Sweden and United Arab Emirates provide that the competent authority is "the Secretary of Finance or the Commissioner of Internal Revenue". The DTA with the United States indicates that the competent authority is "the Secretary of Finance or his delegate."

Section 4 of Revenue Regulations No. 10-2010 expressly designates the Commissioner of Internal Revenue (Commissioner) as the Philippine competent authority for EOI purposes.

The contact details for the Philippine Competent Authority are posted in the BIR Portal under the International Tax Matters tab dropdown list (www.bir.gov.ph). Any changes to these details should be communicated to treaty partners within 7 days of the date of change. Chapter 8 of this manual contains a list of contact details for competent authorities of Philippines tax treaty partners as well as other useful contacts.

Note, however, that when sending out communications to offices within the BIR, the Assistant Commissioner, Legal Service signs such letters on behalf of the competent authority. On the other hand, letters to other government agencies (for purposes of obtaining information) are signed by the Deputy Commissioner of Legal and Inspection Group.

ANNEX 1.1

Organization of Exchange of Information Unit in the BIR

International Tax Affairs Division

CHAPTER 1

Incoming and Outgoing Requests

1.1 Types of Request

Introduction

Foreign competent authorities may need information from the Philippines to administer and enforce their own tax laws. The terms of our DTAs allow them to ask the BIR, through our competent authority, to obtain and provide this information where it is "necessary" to the administration and enforcement of their tax laws. 3

The word "necessary" is equivalent to "foreseeably relevant", the language currently used in Article 26 of the OECD Model Tax Convention. This language is intended to provide for EOI to the widest possible extent, but excludes "fishing expeditions" or requests that are unlikely to be relevant to the tax affairs of a given taxpayer (Commentary to Article 26 of the OECD Model Tax Convention, paragraph 5). It covers information in respect of all persons (e.g., not limited to persons that are resident in either contracting state or nationals thereof), in both civil tax matters and criminal tax matters, such as tax fraud and evasion. The obligation to exchange information that is "necessary" or "foreseeably relevant" pursuant to a treaty is mandatory. The wording in a few of our treaties is more restrictive. 4 SHIcDT

We may also require information from a foreign competent authority to detect and counter tax evasion or avoidance by Philippine taxpayers.

Cases in which information is likely to be requested from the BIR can be divided into at least three categories: those which involve individuals, those which involve companies and those which involve companies and individuals. The information requested may be directly available to the BIR (tax return, amount of taxes paid, etc.) or held by a third party (taxpayer, employer, financial institution, company etc.).

The most common type of information requested relating to individuals includes:

• General tax information details

• Residence details

• Property details

• Details of income or expenses

• Bank information

The most common type of information requested relating to companies includes:

• Director/Shareholder details

• Registration details

• Accounting information including copies of records and invoices

• Transfer Pricing information such as prices paid for goods

• Details of related entities

• Bank information

1.2 Incoming Requests: receiving a request from a treaty partner

Introduction

The BIR aims to meet the highest international standards in EOI for tax purposes. For this reason we have established clear time lines within which we expect to reply to EOI requests from treaty partners. As a general rule:

• Where the information requested is already held by the BIR or another government agency we aim to send the information to the requesting State's competent authority within 90 days of the receipt of a request.

• Where the information is not already held by the BIR we will send the information to the requesting State's competent authority within 6 months of receipt of a request.

It should also be kept in mind that the quicker we reply to incoming requests the quicker our treaty partners are likely to answer our requests.

The process of responding to a request for exchange of information can be divided into different steps described below.

Step 1: Logging the request

Step 2: Validating the request

Step 3: Working the request

Step 4: Responding to the request

All of these steps are time sensitive given the requirement on us to meet the above deadlines.

Step 1: Logging the request

• Mail received from a foreign competent authority will be addressed to the Philippine's competent authority (Commissioner). Although we notify competent authorities of treaty partners to send EOI correspondences to ITAD mailing address as follows:

"KIM S. JACINTO-HENARES

Attention: Chief, International Tax Affairs Division SHTaID

 we expect some mails to be sent to the Office of the Commissioner. When a letter is received by the Office of the Commissioner, it should be delivered directly from the Commissioner's office to the EOI Section on the day it is received. The ITAD receiving clerk should stamp the request with the date of receipt and transmit it immediately to the Chief of ITAD. All requests should be seen and signed by the Chief of ITAD as a record of receipt.

It is important to know when the request was received so that you know how long we have to work on it. There can sometimes be a considerable difference between the date on the request and the date we receive it. This is particularly important where requests for bank information are concerned because of a 60-day deadline to notify the taxpayer of the fact that he is the subject of a request.

• Upon receipt, all requests and other documents related to an EOI case should get a clearly visible confidentiality stamp (see Chapter 6 — Confidentiality).

• The Chief of ITAD will decide if a case is particularly sensitive and therefore requires a higher confidentiality classification, in which case it should be worked by the Chief of EOI Section in consultation with the Chief of ITAD.

• The Chief of ITAD should refer the request to the EOI Chief of Section to log the request in the database.

• The Chief of Section should open a record of the request on the EOI database system. To do this: Create a "NEW EXCHANGE IN" on the system and insert the details requested (i.e., case name, date the case was received, foreign reference number, requesting State and include details of the type of information request, etc.).

• Once the "NEW EXCHANGE IN" has been created, the EOI database system will automatically generate a reference number and an acknowledgement letter should then be sent for signature by the Commissioner (see Appendix 5 — Model Templates for EOI). We acknowledge receipt of all information requests within 7 days.

• The acknowledgement letter should advise the requesting State that you intend to contact the taxpayer concerned directly for the information, if necessary, unless the requesting State has already indicated that it wishes to avoid notifying the taxpayer under examination or investigation.

• If the request has to be translated, this should be done immediately so as to avoid any delays in the case or the requesting State should be asked (within 7 days) if it can provide a translation.

• If we have to undertake translation of a request follow the guidelines on confidentiality (see Chapter 6 — Confidentiality).

Step 2: Validating the request

• All requests will be examined by the Chief of Section on receipt. The request will be returned to the requesting State if:

o it is not covered by a DTA or TIEA, e.g., because it comes from a State with which the Philippines does not have a DTA or TIEA; or

o it deals with periods or taxes which are not covered by the DTA or TIEA — Our DTAs only allow for exchange of information concerning taxes covered by the convention (unlike the current version of the OECD Model Tax Convention which is drafted to apply to the exchange of information concerning any tax imposed on behalf of the contracting states); or

o it is not signed by an authorised person from the requesting State (to be checked against the list of competent authorities annexed); or

o the request should have been sent to a different jurisdiction. CSIcHA

• The Chief of Section will also examine the validity and completeness of the request in the light of the relevant treaty requirements, as well as Republic Act No. 10021 and Revenue Regulations No. 10-2010 which set out certain information requirements that should generally be included in any request that the Philippines receives, if the Philippines is to act promptly on the request. 5 These requirements are consistent with the terms of our DTAs and Article 5 (5) of the OECD Model Agreement on Exchange of Information on Tax Matters 6 and are intended to ensure that EOI requests are clear, specific and relevant.

• If the minimum required information has not been provided, then depending on the circumstances the Philippines' competent authority (Commissioner) will advise the requesting State, by letter, to provide more details to allow the request to be processed or return the request explaining the reason, e.g., lack of clarity in request, poor quality of data received. The Chief of Section will prepare the response for signature by the competent authority after consulting with the Chief of ITAD.

• Where a request is considered to be invalid or incomplete, we aim to notify the requesting State of the deficiency within 60 days of receipt of the request. 7 If the request is deficient in some respects but other parts are valid, we will try to provide information that is responsive to the part of the request that is valid.

Step 3: Working the request

• When opening a record of the request in the EOI database system, the Chief of Section should also identify someone in the EOI unit (Case Officer) to handle the request record this in the system and indicate what sort of response is required.

• Requests that are considered to be highly confidential will be handled by the Chief of Section in consultation with the Chief of ITAD.

• The Case Officer is responsible for gathering the information needed to respond to a request and drafting a response. Chapter 3 — Gathering Information provides further guidance.

• The Case Officer should open a (hard copy) file for the request using the filing reference generated by the EOI database system. Once the file has been opened, place it in the 'open case in' folder in the secure filing range.

• Case Officers should note whether the requesting State has assigned any particular urgency to the request and/or does not want us to contact the taxpayer directly in which case the officer should discuss with the Chief of Section what kind of action is required.

• Every time an action is taken on the file, update the EOI database system and insert a new review date. The database will automatically bring the file forward for review at the specified review time.

• Retrieve files from the range only when they are being worked on. Normally, only the Case Officer to whom it has been assigned, or a replacement officer nominated by the Chief of Section, e.g., when the Case Officer is on leave, should retrieve a file without prior permission of the Chief of Section.

• Signed copies of all correspondence should be kept on the file.

• All documents related to the case should bear a confidentiality stamp (see Chapter 6 — Confidentiality).

Step 4: Responding to the request

• Once the information needed to respond to a request, or part of a request, has been gathered the Case Officer should draft a response to the request, for review by the Chief of Section and Chief of ITAD and signature by the Commissioner. The Case Officer should ensure that the name and address of the requesting State's competent authority are correct before passing the letter to the Chief of Section. DCAHcT

• Where we are not in possession of the information requested and, therefore, cannot provide it to the requesting State, e.g., because the person indicated in the request is not known to us, we will inform the requesting authority as soon as possible that the information cannot be provided and the reasons it cannot be provided.

• While every case differs, Appendix 4 — Checklist of what to include in a response contains a checklist on what could be included in a response although exchanges should not be delayed by seeking to provide every item on the list.

• The requesting State may be obliged in certain cases to copy our correspondence to the taxpayer being investigated. Replies should be drafted with this in mind.

• Within 90 days of receipt of the request, issue an update (if no information is available), an interim reply (if some information is available) or a final reply (if all information is available). Issue update/interim replies every 90 days until final reply is issued. The database will automatically bring the file forward for review at the 90-day mark. Always state in the first sentence of the reply whether it is an update, interim or final reply. Stamp all documentation being sent to the requesting State with an official stamp to the effect that the use and disclosure of all information furnished is governed by the provisions of our DTAs/TIEAs, as appropriate. The covering letter should also state that the information is being exchanged in accordance with the obligations imposed by the relevant legal instrument (see Appendix 5 — Model Templates for EOI).

• A signed copy of the reply should be kept on the file.

• Regular feedback between competent authorities is important to encourage cooperation. For this reason we normally ask treaty partners to provide an assessment of how useful the information we sent them was when issuing a final reply. We do this by asking for feedback in our final reply to the other competent authority when the information needed to respond to the request is being provided (see Appendix 5 — Model Templates for EOI).

• Once the case has been closed put the file in the 'closed case in' folder in the secure filing range.

1.3 Outgoing Requests: making a request to a treaty partner

Introduction

The BIR may also need information from foreign competent authorities to enforce the Philippines tax laws. Our DTAs and TIEAs allow us to request such information from foreign competent authorities with which we have DTAs or TIEAs.

Local tax auditors are not entitled to request information from, or exchange information directly with, their foreign counterparts. This would be a breach of Section 270 of the NIRC and the EOI provisions of our DTAs and TIEAs. All requests for information from treaty partners must be made by the Philippines competent authority (Commissioner) and must therefore be channelled from BIR auditors though the EOI section to the competent authority. The following procedure should be adopted in all cases where the Commissioner makes a request for EOI from another State (requested State).

Procedures to be followed when making a request to a treaty partner

These procedures mirror those which apply in the case of an incoming request.

Step 1: Logging the request

• Revenue Memorandum Order No. 2-2013 requires all requests for information to a foreign competent authority by an office of the BIR to be channelled through the Assistant Commissioner's (Legal Service) office, ATTENTION: Chief, ITAD.

• Once a request for EOI from a Revenue District, or other BIR office, is received in the Assistant Commissioner's office it should be delivered directly to the EOI Section on the day it is received. The ITAD receiving clerk should stamp the request with the date of receipt and transmit it immediately to the Chief of ITAD. All such requests should be seen and signed by the Chief of ITAD as a record of receipt. The Chief of ITAD will decide if a case is particularly sensitive and therefore requires a higher confidentiality classification, in which case it should be worked by the Chief of Section in consultation with the Chief of ITAD. The Chief of ITAD will refer the request to the Chief of Section to log the request in the database. cCTAIE

• The Chief of Section should open a record of the request on the EOI database system. To do this: Create a "NEW EXCHANGE OUT" on the system and insert the details requested (i.e., case name, date the case was received, requested State and include details of the type of information request etc.).

• The EOI database system will automatically generate a reference number and an acknowledgement letter should then be sent to the Revenue District or other BIR office, which requested the information, as appropriate, if all of the necessary information has been provided (see step 3 below).

Step 2: Validating the request

• The Chief of Section will conduct a preliminary examination to see if the request is valid by verifying:

o if an EOI arrangement exists with the requested State;

o if the request should have been sent to a different jurisdiction;

o if the request deals with periods or taxes which are covered by the DTA or TIEA;

o if the request has been approved by the supervising Regional Director or Assistant Commissioner;

o if the minimum required amount of information has been provided; 8

o if the auditor has used all possible means in the Philippines to obtain the information — Before making a request for information from another country, we are expected under the terms of our treaties to use all means available in the Philippines to obtain the information, except where those would give rise to disproportionate difficulties; and

o if the information is "necessary" or "foreseeably relevant" to a Philippine tax examination.

• If no EOI agreement exists between the Philippines and the State from which information is requested or if it deals with periods or taxes which are not covered by the DTA or TIEA, the requesting auditor/office should be notified in writing and the case closed.

Step 3: Working the request

• When opening a record of the request on the EOI database system, the Chief of Section should also identify someone in the EOI unit (Case Officer) to handle the request and record this in the system.

• Requests that are considered highly confidential will be handled by the Chief of Section in consultation with the Chief of ITAD.

• Open a (hard copy) file for the request using the filing reference generated by the system.

• Once the file has been opened it should be stored in the 'open case out' folder in the filing range and only taken out by the officer to whom it has been assigned when it is being worked on or by a replacement officer nominated by the Chief of Section, e.g., when the Case Officer is on leave.

• If the minimum required information has been not given the requestor should be informed in writing and requested to provide additional details to allow the request to be sent.

• If all the requirements to request information are met, the Case Officer should prepare the information request letter to the foreign competent authority and attach all supporting documents for checking by the Chief of Section and Chief of ITAD before forwarding to the Commissioner for signing.

• The letter should advise the requested State if we do not want them to contact the taxpayer or if the matter is particularly urgent. TSIEAD

• Drafting a request in a complete and comprehensive manner is very important. The request should be as detailed as possible and contain all relevant facts so that the foreign competent authority that receives that request knows what is needed and can deal with the request efficiently. An incomplete request will cause delays. While every case differs, the checklist at Appendix 3 — Checklist of what to include in a request — seeks to provide some guidance on what to include in a request.

• The request and any attachments should be sent by secure traceable mail, e.g., registered letter for tracking and tracing purposes.

• Track progress of information requested. Ask the foreign competent authority for progress reports and provide details of the request and tracking number in the request letter:

o after 30 days if an acknowledgement of the request has not received; or

o after 90 days if the information or a status report on the request is not received by then; and

o at regular intervals thereafter, depending on the circumstances.

• Every time an action is taken on the file, the Case Officer should update the EOI database system and insert a new review date. The database will automatically bring the file forward for review at the specified review time.

• Signed copies of all correspondence should be kept on the file.

Step 4: Obtaining a response to the request

• Responses received from a foreign competent authority will be addressed to the Philippine's competent authority (Commissioner) and should be delivered directly from the Commissioner's office to the EOI Section on the day they are received. The ITAD receiving clerk should stamp the response with the date of receipt and transmit it immediately to the Chief of ITAD. All responses should be seen and signed by the Chief of ITAD as a record of receipt.

• When the information is received from the requested State's competent authority, the Case Officer should verify the information received against the request sent. If the response is perceived to be incomplete or inadequate consider whether it is necessary or possible to make further enquires of the treaty partner.

• When the response obtained is found to be complete an acknowledgement letter should be sent for signature by the Commissioner (see Appendix 5 — Model Templates for EOI). We aim acknowledge receipt of information within 7 days.

• The information should be made available, by the Case Officer, to the auditor who requested it. The Case Officer will prepare a transmittal letter with a request for feedback, to be signed by the Chief of ITAD (see Appendix 5 — Model Templates for EOI).

• Relevant documents should bear a confidentiality stamp in conformity with Chapter 6 — Confidentiality to make the auditor aware of the confidential nature of the information and his/her obligations in that respect.

• In some cases, we may receive large amounts of information regarding many taxpayers. Only a portion of that information may be required by a specific auditor in a particular region. The Case Officer is responsible for ensuring that only the specific information needed by the particular auditor is forwarded and that bulk information is not simply retransmitted. Once the case has been closed place it in the 'closed case out' folder in the secure filing range.

CHAPTER 2

EOI Database System

2.1 Incoming Requests

Introduction

The EOI database is a tracking system to enable us to manage requests and to help us ensure that our deadlines for responding to requests are met. It also allows for the creation of statistical reports to track the flow of cases and to monitor some performance measures, such as cases over 90 days or 180 days, or how long it has been since action was taken in a case. The system captures the following data in relation to incoming requests. ETDAaC

"New Exchange In"
0	Category	Company/individual/other
1	Name	Insert full name
2	Address	Insert address
3	TIN	Insert TIN
4	Foreign Reference Number	Supplied on the letter from requesting State
5	EOI Section Reference	Created automatically once "NEW
	Number	EXCHANGE IN" is input
6	Confidentiality	Confidential/Highly confidential
	Classification
7	Type of Exchange	Request/Spontaneous
8	EOI Agreement DTC/TIEA	Indicate the legal basis for the request, e.g.,
		DTC/TIEA/Multilateral
9	Date Request Made by	Indicated in the request form
	Requesting Treaty Partner
10	Date Request Received	Indicate actual date received
11	Requesting Treaty Partner	Drop down list
12	Contact Name	From requesting State
13	Contact Details	Phone number, email address, etc.
14	EOI Section Case Officer	Drop down list
15	Type of Information Asked	Drop down list with set categories
	for	(accounting info, bank info, property,
		ownership info, residence info, transfer
		pricing) plus "other" (this option allows
		the user to input notes)
16	Status of the Case	Open/Closed/Re-opened/Declined/
		Withdrawn
16.1	Reason for declining	Drop-down list with all possible reasons
17	Actions Taken	Drop-down list with all possible actions: e.g.,
		reference to local tax office, requested
		information directly from bank, searching
		information from other government agency;
		for review/sign-off to manager etc. (this
		option allows the user to input notes)
18	Last Action Date	Created by system
19	Actions Due	This could be to follow up on a request for
		information from the local tax office or a
		bank or some other information provider
		(this option allows the user to input notes)
20	Deadline for Next Action	This generates an automatic alert to the Case
	Due	Officer and Chief of Section
21	Due Date of Reply to Treaty	A 90-day "reply due date" alert to the Case
	Partner	Officer and Chief of Section will be
		automatically created by the system to reply
		to the requesting State
22	Interim Reply Sent Date	Calendar built into system to choose from.
		Input by Chief of Section. Once an Interim
		Reply has been sent, the user changes the
		"Due Date of Reply to Treaty Partner" on the
		system to keep the case open for another 90
		days.
23	Final Reply Sent Date —	Calendar built into system to chose — Input
	Case closed	by Chief of Division

The procedures for handling an incoming request are as follows:

• The database automatically creates a template response once a "NEW EXCHANGE IN" is uploaded and a 90-day response time and template to respond to the treaty partner.

• The database allows the user to create tasks as required, e.g., a local tax office or bank may not reply within the deadlines given to respond to a request for information from the EOI section so a follow up action is needed. Whenever an action is taken, the Case Officer should also indicate a follow up action in the "Action Due" field and a "Deadline for Next Action Due". The database reminds the Case Officer and Chief of Section/Chief of Division when a task is due so as to avoid missing any deadlines.

• An Interim Reply (update on the progression of the case) to the requesting treaty partner may also be needed. A template letter is created and the information can be input. Once an Interim Reply has been sent, the user changes the "Due Date of Reply to Treaty Partner" on the system to keep the case open for another 90 days.

• How long since an action was last performed in a case? No significant time should pass since an action was last taken on any case, even if this means simply issuing a reminder letter or phone call to the party we are awaiting further information from, for example, a bank, a local tax office, another government agency, or a treaty partner. This ensures that although a case may be 'aged' it is continually being reviewed.

• The system can generate Statistical Reports on the following details and create reports for managements (see Annexes 2.1 and 2.2 below for examples):

o information type;

o date of requests;

o requesting treaty partner;

o response time, i.e., length of time before a reply (acknowledgement, interim or final) was issued in each case and on average; cAIDEa

o number of open cases and age of cases, e.g., cases that are under 90 days, between 90 days and 180 days, between 180 days and 360 days, and cases that are over 360 days old. Drop down list of open cases for each category;

o performance measures including open and closed cases, by category if necessary. Select whatever categories seem appropriate to you, e.g., company individual, other;

o response times for various types of acknowledgement and average response times;

o how long since an action was last performed on a case which has not been closed, i.e., cases where no action has been taken for > 30 days, > 60 days, > 90 days, > 180 days.

2.2 Outgoing Requests

Introduction

The EOI database also allows us to manage outgoing requests and to keep track of progress on information requested. The system captures similar data in relation to outgoing requests.

"New Exchange Out"
0	Category	Company/individual/other
1	Name	Insert full name
2	Address	Insert address
3	TIN	Insert TIN
4	Foreign Reference Number	Supplied by requested State when request
		acknowledged
5	EOI Section Reference	Created automatically once "NEW
	Number	EXCHANGE OUT" is input
6	Confidentiality	Confidential/Highly confidential
	classification
7	Type of Exchange	Request/Spontaneous
8	EOI Agreement DTC/TIEA	Indicate the legal basis for the request, e.g.,
		DTC/TIEA/Multilateral
9	Date Request Received from	Indicated in the request form
	local tax office
10	Date Request Made to	Indicate actual date sent
	Requested State
11	Requested State Treaty	Drop down list
	Partner
12	Contact Name	From requested State
13	Contact Details	Phone number, email address, etc.
14	EOI Section Case Officer	Drop down list
15	Type of Information Asked	Drop down list with set categories (tax info,
	for	bank info, property) plus "other" (this option
		allows the user to input notes)
16	Status of the Case	Open/Closed/Re-opened/Declined/
		Withdrawn
16.1	Reason for declining	Drop-down list with all possible reasons
17	Actions Taken	Referred back to local tax office/information
		requested from treaty partner (this option
		allows the user to input notes)
18	Last Action Date	Created by system
19	Actions Due	This will normally be to follow up on a
		request for information from the treaty
		partner (this option allows the user to
		input notes)
20	Deadline for Next Due	This generates an automatic alert to Case
	Action	Officer and the Chief of Section
21	Due Date of Reply by	A 90-day "due date alert" to Case Officer and
	Treaty Partner	Chief of Section will be automatically created
		by the system by which a reply from the treaty
		partner is expected
22	Interim Reply Received	Calendar built into system to choose from.
	Date	Input by Chief of Section
23	Final Reply Received	Calendar built into system to choose from.
	Date — Case closed	Input by the Chief of Division

The system should generate Statistical Reports for outgoing requests similar to those on incoming requests.

ANNEX 2.1

Samples of management reports for "NEW EXCHANGE IN"

ANNEX 2.2

Samples of management reports for "NEW EXCHANGE OUT"

CHAPTER 3

Gathering Information

Introduction

Once an incoming request is received in the EOI Section, it will be allocated by the Chief of Section to one of the officials (Case Officer) in the section. The Case Officer to whom the case is allocated is responsible for researching, collating and drafting the reply and giving it to the Chief of Section for checking before passing it to the Commissioner's office for signing.

This Chapter provides guidance on how to collect information in order to respond to a request for exchange of information and what to include in a response. As a general comment, the work needed to respond to a request should be carried out as far as possible in the EOI Section. Given current restrictions on access to BIR databases, however, it will often be necessary to involve other BIR offices such as Revenue District Offices (RDOs) or other government agencies such as the Bureau of Immigration (BI), National Statistics Office (NSO), the Land Registration Authority (LRA) or the Securities and Exchange Commission (SEC) or other information holders in collecting the information needed to respond to a request. It is important to emphasize at the outset that the guidelines on confidentiality described in Chapter 6 — Confidentiality must be followed in any case where it is necessary to contact another branch of the BIR or another information holder to gather information. TCaSAH

Further we have Memorandums of Understanding with some government agencies (NSO, SEC and BI) which set out agreed response times. These ensure that whenever we need information from them it will be provided in a timely manner.

It should also be noted that Revenue Regulations No. 10-2010 also provides for particular procedures to be followed where a request relates to banking information and these are described in Chapter 4 — Banking Information. This chapter deals with non-banking information requests.

3.1 Procedures to gather non-banking information

• To the extent possible, officials should source the information requested from BIR systems, e.g., Registration system or the BIR Integrated Tax System.

• Where the matter is one that the EOI Unit can respond to without the need to refer to another area of the BIR, the case will passed to one of the Case Officers to draft a response.

• In the event that it is necessary to contact the IT Group, the Case Officer should draft a letter, stating the EOI reference number, to the information System Operations Service, after checking with the Chief of Section, forward the draft letter for signature by the Assistant Commissioner Legal Services. Set a date (within 4 weeks from the date of the letter) for the IT Group to reply and include in the EOI database diary for follow up. Appendix 5 contains a sample letter of request to the Information System Operations Service.

• In the event that it is necessary to contact a Regional Office, RDO, Large Taxpayer Service. Large Taxpayer District Office or National Investigation Division draft a letter (stating the EOI reference number) to the relevant office and after checking with the Chief of Section, forward the draft letter for signature by the Assistant Commissioner Legal Services. Set a date (within 60 days from the date of the letter) for the RDO to reply and enter in the EOI database diary for follow up. See Appendix 5 — Model Templates for EOI for a sample letter of request to the RDO.

• In the event that it is necessary to contact another Government agency such as the LRA, SEC, Bureau of Immigration, draft a letter to the agency concerned and, after checking with the Section Chief, forward the draft letter for signature by the Commissioner or her duly authorized representative (i.e., Deputy Commissioner or Assistant Commissioner). Set a date (within 4 weeks from the date of the letter) for the agency to reply. See Appendix 5 — Model Templates for EOI for a sample letters of request.

• Put a signed copy of the letter on file.

• If the person concerned has not replied within the specified time, make further contact (preferably by phone) with that person to find out why there is a delay. Give a further (up to) 30 days or 1 month to respond. If that further period elapses without a (complete) response, discuss the request with the Chief of Section with a view to deciding what the next step is, e.g., whether it is appropriate to remind a RDO of the possibility to exercise a particular power or use enforcement measures to get the information in a more timely way or whether the Commissioner/Deputy Commissioner/Assistant Commissioner should contact the person involved directly.

• If the information holder, in the case of a taxpayer or third party, responds to a particular request by saying, in effect that they did not see how the information requested was "necessary" or "foreseeably relevant" or otherwise challenges our authority to exchange information in a particular case this should be notified to the EOI Section and you may need to inform the requesting State you that the taxpayer has queried whether the "necessary"/"foreseeable relevance" test, or other condition, has been met and ask for further information on this point.

• If the information holder is a company and the company is in liquidation, the RDO should be advised to contact the liquidator.

• The EOI database should be updated when requested information/documentation is received. All documentation should be checked by the case officer to make sure it corresponds to the requirements of the requesting authority. EDSHcT

• Where information is provided by an RDO, other BIR office or other government agency, ensure that you acknowledge and thank the person that provided the information for their assistance.

• The Case Officer will prepare the response to the request (see Chapter 2). While every case differs, Appendix 4 — Checklist of what to include in a response contains a checklist on what could be included in a response although exchanges should not be delayed by seeking to provide every item on the list.

• Stamp all documentation being sent to the requesting State with an official stamp to the effect that the use and disclosure of all information furnished is governed by the provisions of our DTAs/TIEAs etc. The covering letter should also state that the information is being exchanged in accordance with the obligations imposed by the relevant legal instrument.

• Put a photocopy of your (signed) reply on the file.

Bank information requests — see Chapter 4 — Banking Information.

CHAPTER 4

Banking Information

Introduction

Significant changes were made to powers enabling the BIR to access information held by financial institutions in 2010. Prior to Republic Act No. 10021, which amended Section 5 of the NIRC, and Revenue Regulations No. 10-2010 the BIR could only enquire into bank deposits of:

• a decedent to determine his gross estate, and

• any taxpayer who has filed an application for compromise of his tax liability by reason of incapacity to pay.

The current powers authorize the Commissioner of the BIR to obtain any information, including but not limited to bank deposits and other related information held by financial institutions that may be required to respond to a request pursuant to an international convention or agreement on tax matters to which the Philippines is a party. 9

4.1 Procedures to gather banking information

• To get information from financial institutions such as banks we use the power granted to us under Republic Act No. 10021 and Revenue Regulations No. 10-1020. This power has to be exercised by the Commissioner. This is done by issuing a letter addressed to the financial institution concerned signed by the Commissioner requesting the necessary information. See Appendix 5 — Model Templates for EOI for a sample letter.

• Once a request for exchange of bank information is received it should be logged in the normal way and validated by the Chief of Section (see Chapter 1 — Incoming and Outgoing Requests).

• Republic Act No. 10021 and Revenue Regulations No. 10-2010 set out certain information requirements that should generally be included in any request that the Philippines receives for bank information if it is to act promptly on the request. If this information is not included in the request the requesting State should be notified of the deficiency and asked to furnish the missing information. It will generally be obvious if the request contains all of the necessary information so we aim to notify the requesting State as soon as possible and not wait for 60 days before doing so. 10

• Once validated, the case will be assigned to a Case Officer in the EOI Section. The Case Officer does any preparatory work, drafts the letter that has to issue to the bank and the Commissioner signs the letter.

• We allow a bank 15 days from the date of receipt of the letter to provide the requested information or to explain why it is unable to do so. 11 Allow 2-3 days for delivery of the letter and insert a review date for 15 days later in the EOI database. The database will bring the file forward for review at the specified review time. The Case Officer should then follow up immediately with the bank if a reply has not been received before the specified deadline. DCISAE

• If a bank needs additional time within which to submit information it can request an extension which should not be more than 30 days from the date of receipt of the original notice. 12 When this happens, a new review date should be inserted in the EOI database to reflect the extension. The Case Officer should also contact the bank to explain that a subpoena will be issued if a reply is not received before the specified deadline.

• If the requested bank or financial institution does not reply to a request within the period specified, ITAD will request for the issuance of a Subpoena Duces Tecum. This should be prepared by the Chief of Section in consultation with the Chief of ITAD to be signed by Commissioner and then delivered to the financial institution by registered mail. A new review date should be inserted into the database to reflect the deadline in the subpoena.

• If the bank or financial institution fails to comply with the subpoena the matter should be referred to the Prosecution Division. The Chief of Section will prepare the papers for transmittal to the Prosecution Division in consultation with the Chief of ITAD. At the same time, the requesting State should be notified that the bank has failed to provide the information requested and that the matter has been referred to the Prosecution Division for enforcement action.

• When the information is received from the bank the Case Officer will prepare a transmittal letter for the Commissioner's signature and stamp the documents before sending them to the requesting State. See Appendix 5 — Model Templates for EOI for a sample letter.

• Where a power to obtain bank information is going to be exercised for the first time in relation to a particular financial institution, the Chief of EOI Section should phone the financial institution first and explain the process etc., before the power is exercised.

4.2 Notification to Taxpayer

• Our regulations provide that, with respect to information held by a bank or financial institution which is requested by a foreign competent authority, the Chief of ITAD shall within 60 days notify the taxpayer concerned that he is subject of a request by the foreign competent authority. 13 See Appendix 5 — Model Templates for EOI for a sample notification letter.

• There is no requirement that the taxpayer be notified before the information is requested from the bank or financial institution or even before it is transmitted to the foreign competent authority. If a foreign competent authority has requested that the taxpayer is not notified it should be informed in the acknowledgement letter that there is a legal requirement to notify the taxpayer of the request within 60 days of receipt of the letter of request but that the financial institution will be requested to provide the information requested before this deadline expires.

• The EOI database should be updated and a review date inserted for 60 days after the receipt of the foreign competent authority's letter. The Case Officer should then prepare a letter of notification for signature by the Chief of ITAD.

CHAPTER 5

Spontaneous EOI

Introduction

Under DTAs (usually not under TIEAs) it is possible to spontaneously exchange tax information except for bank information which can only be exchanged by specific request. Using this method allows partner competent authorities to discover tax evasion in specific cases, but also general tax evasion schemes. Situations of double non-taxation may also be uncovered in this way.

Spontaneous exchange may occur where:

• There are grounds for suspecting that there may be a significant tax loss by the treaty partner. IacHAE

• A person liable to tax obtains a reduction in or an exemption from tax in one State which would give rise to an increase in tax or to liability to tax in the other State.

• Business dealings between a person liable to tax in one State and a person liable to tax in the other State are conducted through one or more States in such a way that a loss of tax may result in one of the States or in both.

• There are grounds for supposing that a saving of tax may result from artificial transfers of profits within groups of enterprises.

5.1 Receiving spontaneous exchange

The procedures for handling an incoming spontaneous exchange are as follows:

• Mail received from a foreign competent authority should be delivered directly from the Commissioner's office to the EOI Section.

• The ITAD receiving clerk should stamp the mail with the date of receipt and transmit it immediately to the Chief of ITAD. All incoming mail should be signed by the Chief of ITAD as a record of receipt.

• The Chief of ITAD should refer the request to the Chief of Section to log the exchange in the database.

• Open a record of the exchange on the EOI database system. To do this: Create a "NEW EXCHANGE IN" on the system and insert the details requested (i.e., case name, date the information was received, foreign reference number, exchanging State include details of the type of information provided and identify the exchange as spontaneous).

• Once the 'New Exchange' has been created, the EOI database system will automatically generate a reference number and an acknowledgement letter which should then be sent for signature by the Commissioner of the BIR. We acknowledge receipt of all information received within 7 days.

• When the information is received a first check on the potential usefulness should be performed by the Chief of Section:

o Information may be case-specific, in which case the information may be forwarded to the auditor in charge of the taxpayer involved.

o Information may also reveal a larger tax loophole which may lead us to consider legislative amendments. In that case, anonymised information may be sent to the relevant policy divisions.

• When transmitting the information to the relevant auditor, make sure that only that portion of the information is sent that may be required by the specific auditor in a certain region of the State. The Case Officer is responsible for ensuring that only the specific information needed by the particular auditor is forwarded and that bulk information is not simply retransmitted.

• Add a confidentiality stamp on the relevant documents and draft a cover letter in conformity with Chapter 6 — Confidentiality to make the auditor aware of the confidential nature of the information and his/her obligations in that respect.

• Ask for feedback from the auditor (or the policy division) on the usefulness of the information. Such feedback may include details on the additional tax revenue raised and tax evasion methods detected. The feedback should be sent to the foreign competent authority that provided the information, as this will improve the quality of future information exchanges.

5.2 Sending information spontaneously

In case information is received from a District that could warrant a spontaneous exchange to another State, the following procedures apply: EScaIT

• The 'request' should be entered in the data base and assigned a reference number. To do this: Create a "NEW EXCHANGE OUT" on the system and insert the details requested (i.e., case name, date the case was received, receiving State the type of information provided and identify the exchange as spontaneous etc.).

• The Chief of Section will conduct a preliminary examination to see if exchange is valid by verifying if an appropriate EOI arrangement exists with the requested State. 14

• If no agreement exists between the Philippines and the State to which information would be sent the requestor should be notified in writing and the case closed.

• A further examination should be conducted on whether the information could be useful to the other foreign competent authorities, for example because one of the circumstances described in the introduction to this Chapter occurs. The information to be sent should also be sufficient to identify either a specific taxpayer or group of taxpayers, or a more general tax evasion scheme.

• The following points should be mentioned in the exchange:

o The nature of the information that was gathered. The exchange should be as detailed as possible and contain all relevant facts so that the foreign competent authority that receives the exchange can deal with the exchange efficiently.

o An explanation why the information is thought to be of interest to the other competent authority.

o How the information was obtained. Also identify the source of the information provided, e.g., tax return, third party information etc.

• Ask for feedback from the treaty partner, so we know whether the spontaneous exchange was regarded as useful and we can improve our exchanges in the future (see Appendix 5 — Model Templates for EOI).

• Stamp all documentation being sent to the receiving State with an official stamp to the effect that the use and disclosure of all information furnished is governed by the provisions of our DTAs/TIEAs etc. The covering letter should also state that the information is being exchanged in accordance with the terms of the relevant DTA.

CHAPTER 6

Confidentiality

Introduction

Taxpayer information is confidential and may only be disclosed in accordance with Philippine law (Section 270 of the NIRC). However, Republic Act No. 10021 15 which amended Section 270 of the NIRC and Revenue Regulations No. 10-2010 16 allows for the disclosure of tax information to a foreign competent authority by the Philippines' competent authority (BIR Commissioner) in response to a request under a DTA or tax information exchange agreement (TIEA).

Confidentiality obligations are also imposed on us under our DTAs and TIEAs which generally follow the rules of the OECD Model Tax Convention or Model TIEA. It is important to understand that these confidentiality provisions create obligations for us under international law. Moreover, the provisions cover not only information received in response to a request but also information contained in, competent authority letters, including the letter requesting information. At the same time, it is understood that a requested State can disclose the minimum information contained in a competent authority letter (but not the letter itself) necessary for the requested State to be able to obtain or provide the requested information to the requesting State. cHaCAS

The OECD Model Convention and our treaties provide that information received under the provisions of a treaty will be treated as secret in the same manner as information obtained under domestic law. The confidentiality provisions of the NIRC therefore apply equally to breaches occurring in relation to material received via an exchange of information arrangement. Other more general risks resulting from a breach of confidentiality in relation to information received from treaty partners include possible damage to the Philippine's international reputation, which could affect future exchange of information dealings with our treaty partners. In addition, a breach of confidentiality could result in legal action by taxpayers against the BIR, or legal action by the BIR against the officer concerned in cases of misconduct. 17

6.1 General procedures applying to access to electronic and physical records

• All of the information received it the EOI Section is confidential and should be stored securely. The level of security depends on the classification of the information. We use two classifications "confidential" and "highly confidential". The Chief of ITAD will decide which category any particular request falls into. Generally, requests related to politically exposed persons or persons with a high public profile will be considered highly confidential. These requests will, generally, be worked by the Chief of Section in consultation with the Chief of ITAD.

• EOI Section files containing taxpayer information must be stored in secure storage units and only retrieved by the Chief of Section or the Case Officer assigned to them (or a nominated replacement officer) when they are being worked on.

• Highly confidential files must be stored separately and only be accessible by the Chief of ITAD and the Chief of Section.

• Access to passwords, combinations and keys is restricted to officers working in the EOI Section and the Chief of ITAD.

• If the Chief of ITAD considers that information is highly confidential, s/he may use codes or ciphers to encrypt messages.

• All incoming requests for information and all information received should be entered in the EOI Database and Tracking System to which only the EOI Section staff should have access by individual login and password.

• Hard copies of incoming information should only be made by the EOI Section if strictly necessary, such as when documents must be forwarded to other areas of the tax administration. The same security level should apply to the hard copies as to the original documents. Any hard copies should be disposed of in a secure manner (e.g., by using a shredder) when no longer necessary.

• Under no circumstances should members of the public be allowed entry to the EOI Section's office area. Other members of the BIR's staff should not enter the EOI Section's office area either without the Chief of Section's permission.

6.2 Sending information to a foreign competent authority

• Prior to sending information to a foreign competent authority the Chief of Section should confirm that the person who has requested the information was authorized to make the request and to receive the information. It should also be confirmed that the foreign competent authority's name and address are correct before sending any information. All confidential information should be clearly labelled (see 6.5 below "Confidentiality stamp").

• Physical mail should only be sent via an international registration system where a mail tracking function is in place. Any mail received from foreign competent authorities should be delivered directly to the EOI Section and stored in secure storage units.

• The cover letter to the foreign competent authority should emphasise the confidentiality of the information, for example by including the following statement: "This information is furnished under the provisions of a DTA/TIEA and its use and disclosure are governed by the provisions of such DTA/TIEA."

• Exchange of information pursuant to a DTA or TIEA can only take place between competent authorities or their authorised representatives. All letters containing taxpayer information must, therefore, be signed by the Commissioner who is Philippines's competent authority as, to date; authority to exchange information has not been delegated to any other officials. HDAECI

• In principle, exchange of taxpayer information can occur in a number of different ways, e.g., letter or e-mail. Currently, the BIR exchanges taxpayer information only by mail and does not exchange information electronically. That would require that the information is encrypted or sent on a secure platform and we do not, currently, have the facilities to do this. Accordingly, taxpayer information should not be sent to a foreign competent authority by e-mail.

• Where e-mail correspondence relating to a request is received without encryption, e.g., where clarification is requested by a treaty partner, without encryption, the content of the e-mail and any e-mail response must always be anonymised.

6.3 Competent authority sending information to other areas of the tax administration

It is often necessary for information to be sent by the EOI Section to other tax officials or authorities within the BIR. The following procedures should be followed in these cases:

• A record should be kept on file showing who the information has been disclosed to, how many copies have been produced and who has a copy in their possession at any time.

• In some cases, we may receive large amounts of information regarding many taxpayers, and only a portion of that information is required by a specific auditor in a certain region of the Philippines. The EOI Section staff are responsible for ensuring that only the specific information needed by the particular auditor is forwarded and that bulk information is not simply retransmitted.

• Whenever confidential information needs to be forwarded from the EOI section to other areas of the tax administration, it must be made clear to the person receiving it that it concerns treaty protected confidential information. This should be emphasised in the cover letter (or e-mail in case of electronic mail) by stating that the information must be kept confidential pursuant to a DTA or TIEA as well as section 270 NIRC. The cover letter should mention that it is not allowed to make copies of the material or forward the material without consent of the EOI Section and that the documents must be stored in a secure place. See Appendix 5 — Model Templates for EOI for a sample notification letter.

• When requesting information from outside agencies such as the Bureau of Immigration or SEC it should not be necessary to provide any information contained in the request letter from the foreign competent authority to that agency, other than what is needed to action the request. If a Case Officer is in any doubt as to what information should be contained in the letter request information from the outside agency he should consult the Chief of Section.

6.4 Translation of information requests

• In case it is necessary for processing an EOI request (incoming or outgoing) to have documents translated, the person undertaking the translation should be aware of the confidential nature of the information and should be subject to the same or similar confidentiality obligations as BIR officials.

• Accordingly, translation should always be undertaken by a person already subject to section 270 NIRC or equivalent confidentiality requirements.

• If this requirement cannot be met, where the translation relates to an information request from a foreign competent authority, it should be returned directly to the requesting State's competent authority with a request that it be translated into English and an explanation that the BIR does not have the facilities to undertake its own translation.

• It should not be sent to any other government agency of the requesting State, e.g., a local embassy for translation.

6.5 Confidentiality stamp

• All documents related to an exchange of information case should bear a clearly visible confidentiality stamp. This can be an actual stamp stating "CONFIDENTIAL INFORMATION — NOT TO BE DISCLOSED" where paper documents are concerned.

• In electronic documents this text could be embedded as a header and/or watermark. TAaIDH

6.6 Disclosure in certain specific circumstances

• Under certain circumstances, confidential information may be disclosed to persons outside the competent authority, EOI Section and tax administration, such as in public court proceedings 18 or to the taxpayer concerned.

• Disclosure rules may vary under the different DTAs and TIEAs. It is therefore important that any disclosure outside the competent authority, EOI Section or tax administration shall only be allowed after sign-off by the Chief of ITAD or the Chief of Section on the basis of a report clarifying that such disclosure is allowed under the DTA/TIEA and Philippine legislation.

• In general the issue of disclosure should only arise, if at all, where the Philippine's has requested information from a treaty partner which is being used to support a charge to tax in the Philippine's. For example, the information may have to be disclosed to the taxpayer in the Philippines, or to the judicial authorities in the Philippines, in the event of a case against the taxpayer ends up in court. The issue of disclosure should not arise where the Philippines has been requested to provide information by a treaty partner. In the latter case, information contained in the letter of request cannot be disclosed (see section 6.7 below).

• The foreign competent authority should be informed of the disclosure to persons outside competent authority.

6.7 Notification to Taxpayer

• The BIR is not required to notify a taxpayer that it has received a request to exchange information, except in the case of banking information (see Chapter 4 — Banking Information). Other than banking information, as a general rule taxpayers should not be notified that they are the subject of request, regardless of whether or not the treaty partner has requested the BIR not to inform the taxpayer about the EOI request.

• Where the information required is in the hands of a taxpayer, however, it may well be necessary to explain the circumstances in which s/he is being requested to provide information and to provide the minimum amount of information needed to allow the taxpayer respond to the request (but not the letter of request itself). This does not constitute a breach of our confidentiality obligations (see Appendix 5 — Model Templates for EOI for a sample letter).

6.8 Competent Authority Meetings

• Communication between competent authorities may be conducted in a number of ways such as letters, fax, e-mail, telephone, and face-to-face meetings. In practice, competent authorities determine which means of communication is best on a case-by-case basis.

• Whatever mode of communication is adopted it is critical that the guidance provided in this manual is followed wherever taxpayer information is being communicated.

• As exchange of information can only take place between competent authorities, an extension from this is that in the case of face-to-face meetings with the foreign competent authority of the other State where taxpayer information is being exchanged, the BIR Commissioner must be present, or have delegated authority to an official involved in the meeting.

CHAPTER 7

Useful Contacts

A. For an updated list of Competent Authority for our 37 tax treaty partner (See Appendix 1 — List of foreign competent authorities).

B. For tax information held by BIR offices, refer to www.bir.gov.ph for BIR Offices Directory (See Appendix 1 — List of foreign competent authorities).

C. For information held by BIR IT Group our contact person is: aTcIAS

Rosario Enriquez-CuribaAssistant Commissioner

D. For information held by government agencies the contact persons are as follows:

Name	Website	Address and Contact Details
SECURITIES AND	www.sec.gov.ph	SEC Building, EDSA,
EXCHANGE COMMISSION		Greenhills Mandaluyong
		City, Metro Manila
		Philippines
LAND REGISTRATION	www.lra.gov.ph	East Avenue cor. NIA
AUTHORITY		Road, Diliman, Quezon
		City, Metro Manila,
		Philippines
BUREAU OF	www.immigration.gov.ph	2nd Floor Bureau of
IMMIGRATION		Immigration Bldg.
		Magallanes Drive,
		Intramuros, Manila
BUREAU OF CUSTOMS	customs.gov.ph	G/F, OCOM Bldg., Port
		Area, Manila City,
		Metro Manila
DEPARTMENT OF	www.dti.gov.ph	No. 385 Industry and
INDUSTRY		Investments Bldg.,
		Sen. Gil Puyat Ave.,
		Makati City, Philippines
		1200
BANGKO SENTRAL	www.bsp.gov.ph	A. Mabini St. cor. P.
NG PILIPINAS		Ocampo St., Malate
		Manila, Philippines 1004
Note: to be updated

E. For Bank Information (See Appendix 1 — List of foreign competent authorities). Add contact details

CHAPTER 8

Sources of Ownership and Accounting Information

	Where to look	What you'll find
BUREAU OF INTERNAL REVENUE
A.	BIR-Integrated Tax System
	Integrated Tax System (ITS): ITS is	-	Identity Information of taxpayers:
	a set of related systems and processes,		•	Taxpayer's Identification Number
	which run and facilitate the Bureau's		•	Birthdate of Individual or in the case
	core business functions. It provides			of a company date of incorporation
	maximum automation and minimum		•	Taxpayer's Addresses
	manual intervention in BIR operations.
	ITS supports the Bureau in servicing	-	Accounting Information: Record
	taxpayers on different aspects of the		of Tax Payments Print-out
	tax collection and administration
	process.
B.	Revenue District Office
	Revenue District Offices (RDO) are	-	Identity Information of taxpayers
	responsible for holding general tax
	information details; undertaking audit	-	Accounting information
	and investigation; and examinations		•	Income Tax Returns filed
	of taxpayers financial statements and		•	Certificate of Creditable
	business transactions.			withholding tax
			•	Purchases and Sales Invoices
			•	Financial Statements 19
			•	Tax audit and investigation
				records of taxpayer's
			•	Open Cases
C.	ITAD
		-	Identity Information of foreign
			individuals and corporations
			(TTRA Applications and
			Certificates of Residency)
		-	Accounting Information — Cross-
			border Transactions: royalties,
			interest, dividends, other income
			payments; loan and service
			agreements; licensing agreements
D.	Law Division	-	Identity Information of foundations
E.	Withholding Tax Division	-	Identity Information of employees and
			employers and other withholding agents
		-	Account Information:
			•	Compensation earned
			•	Taxes Paid/Withheld
F.	Collection Enforcement Division	-	Identity Information of Foreign Bidders
			participating in public bidding
		-	Tax Clearance for foreign bidders
G.	AITIED	-	Identity information of ecozone
			locators/BOI-enterprises
		-	Accounting Information: Transactions
			(sales and purchase) of ecozone locators
BUREAU OF CUSTOMS
	The Bureau is responsible for the	-	Record of taxes, tariff and duties of
	administration of taxes, tariff, and		importation paid
	duties from import
		-	Other Importation-related information
LAND REGISTRATION AUTHORITY
	The LRA is responsible for registration	-	Ownership information of
	of land titles and holdings		Landholdings
		-	Land Title Certificates
SECURITIES AND EXCHANGE COMMISSION
	The SEC is responsible for regulating	-	Ownership Information of shares in
	corporations and partnerships		domestic corporations and foundations
			•	General Information Sheet of
				Stockholdings
		-	Line of Business; Authorized purpose
			•	Articles of Incorporation
		-	Accounting information
			•	Financial Statements
BUREAU OF IMMIGRATION
	Responsible for regulating immigration	-	Immigration History/Records of
			Arrival and Departure in the Philippines
		-	Identity information
			•	Name of Aliens
			•	Visa Status; Nationality and Civil
				Status of Alien
			•	Philippine Address
		-	Certificate of Alien Registration
DEPARTMENT OF TRADE AND INDUSTRY
	The DTI is responsible for regulating	-	Ownership information of Sole
	sole proprietorships		Proprietorship
		-	Identity Information
			•	Trade Name
			•	Business Address
		-	Line of Business
NATIONAL STATISTICS OFFICE
	The NSO is central data repository	-	Identity Information
	of the Philippines (birth registry, etc.)		•	Validation of names
			•	Addresses of Individuals
		-	Birth Certificate
		-	Marriage Certificate
		-	Death Certificate
BSP
	The BSP is the primary regulator of	-	Identity and ownership Information
	banks		of banks
PDIC
		-	Identity and ownership information
			of banks under liquidation/
			receivership/rehabilitation
SOCIAL SECURITY SYSTEM
	The SSS is a social insurance	-	Identity Information
	institution catering primarily to		•	Names of employees and their
	employees in the private sector			dependents and employers
			•	Registered Addresses of
				employees and employers
		-	Accounting Information (secondary
			source only)
			•	Amount of compensation earned
GOVERNMENT SERVICE INSURANCE SYSTEM
	THE GSIS is a social insurance	-	Identity Information
	institution catering to		•	Names and Addresses of
	employees in the public sector			employees and their dependents
PHILIPPINE RETIREMENT AUTHORITY
		-	Identity Information
			•	Names of retirees with SRRVs
			•	Philippine and foreign addresses
				of retirees
			•	Information whether retiree is
				married to a Filipina
			•	Passport Number
COOPERATIVE DEVELOPMENT AUTHORITY
		-	Identity information of cooperatives
			and their members
		-	Ownership Information of share capitals
		-	Accounting Information
			•	Financial Statements
LOCAL GOVERNMENT UNITS
		-	Identity and Ownership information
			of businesses
			•	Names of business owners
			•	Addresses
			•	Line of Business
		-	Accounting Information
			•	Gross Income
		-	Mayor' Permit
PHILIPPINE STOCK EXCHANGE
	PSE is a self-regulated organization	-	Information about publicly-held
	which operates the securities exchange		corporations
			•	List of Public corporations
			•	Public Ownership Reports
			•	Corporate Disclosures
			•	Dividend Declarations (Board
				Res)
	(see website)

Glossary

BIR — Bureau of Internal Revenue

DTA — Double Taxation Agreement

EOI — Exchange of Information

ITAD — International Tax Affairs Division

LRA — Land Registration Authority

MAP — Mutual Agreement Procedures

NIRC — National Inland Revenue Code

RDO — Revenue District Office

SEC — Bureau of Immigration or the Securities and Exchange Commission

TIEA — Tax Information Exchange Agreement

TIN — Tax Identification Number

APPENDIX 1 *

List of foreign competent authorities(complete list after page 55)

APPENDIX 2

Checklist of requirements where request for bank information is made

A request from a treaty partner for bank information in the Philippines should contain the following details: ITADaE

1. The identity of the person under examination or investigation;

2. A statement of the information being sought including its nature and the form in which the said foreign tax authority prefers to receive the information from the Commissioner;

3. The tax purpose for which the information is being sought;

4. Grounds for believing that the information requested is held in the Philippines or is in the possession or control of a person within the jurisdiction of the Philippines;

5. To the extent known, the name and address of any person believed to be in possession of the requested information;

6. A Statement that the request is in conformity with the law and administrative practices of the said foreign tax authority, such that if the requested information was within the jurisdiction of the said foreign tax authority then it would be able to obtain the information under its law or in the normal course of administrative practice and that it is conformity with a convention or international agreement; and

7. A statement that the requesting foreign tax authority has exhausted all means available in its own territory to obtain the information, except those that would give rise to disproportionate difficulties.

APPENDIX 3

Checklist of what to include in request

• Reference number of the request and reference to the legal basis upon which the request is based (DTA, TIEA, Multilateral Convention etc.).

• A statement confirming that your tax administration has pursued all means available in its own territory to obtain the information except those that would give rise to disproportionate difficulties statement (mandatory if request under a TIEA, optional otherwise).

• A statement that the request is in conformity with the laws and administrative practices of your country, that your tax administration could obtain the information if it was within your country and that the request is in conformity with the legal instrument on which it is based (mandatory if request under a TIEA optional otherwise).

• The identity of the person(s) under examination or investigation:

o full name (first name, family name)

o date of birth (for individuals)

o marital status (if relevant)

o Tax Identification Number (TIN)

o Full address (including email or internet addresses, if known)

• The identity of any foreign taxpayer(s) or entity(ies) relevant to the examination or investigation and, to the extent known, their relationship to the person(s) under examination or investigation:

o name

o marital status (if relevant)

o TIN (if known), addresses (including email or internet addresses if known)

o registration number in the case of a legal entity (if known)

o charts, diagrams or other documents illustrating the relationships between the persons involved.

• If the information requested involves a payment or transaction via an intermediary mention the name, addresses and TIN (if known) of the intermediary, including, if known, the name and address of the bank branch as well as the bank account number when bank information is requested.

• Relevant background information including the tax purpose for which the information is sought, the origin of the enquiry, the reasons for the request and the grounds for believing that the information requested is held in the territory of the requested party or is in the possession or control of a person within the jurisdiction of the requested party. DSAICa

The stage of the procedure in the requesting party, the issues identified and whether the investigation is of a civil or administrative nature only or may also have criminal consequences.

Where references are made to domestic law it is useful to provide some explanation as the foreign competent authority will not be familiar with your laws.

• The information requested and why it is needed. Also specify the information that may be pertinent (e.g., invoices, contracts).

• The taxes concerned, the tax periods under examination (day, month, year they begin and end), and the tax periods for which information is requested (if they differ from the years examined give the reasons why for instance if there is a loss carryover, the information concerns a purchase price for determination of a capital gain).

• The currency concerned whenever figures are mentioned.

• The urgency of the reply:

o State the reasons for the urgency and, if applicable, indicate the date after which the information may no longer be useful.

• Whether a translation should be provided if possible (in urgent cases mentioning that no translation is required could speed up the exchange).

• If copies of documents or bank records are requested, what type of authentication is necessary, if any.

• If the information is likely to be used in a court proceeding and the applicable rules of evidence require the information to be in a certain form, the form should be indicated to the other competent authority.

• Whether there are reasons for avoiding notification of the taxpayer under examination or investigation (e.g., in cases where the EOI is of a very urgent nature or where the notification may endanger the investigation).

• The name, phone, fax number and e-mail address of the tax official who may be contacted if needed, (that person should have delegation of competent authority).

APPENDIX 4

Checklist of what to include in a response 20

While every case may differ on the particular facts and circumstances, the following checklist of what to include in a request seeks to provide some guidance on what could be included in a request. Note that exchanges should not be delayed by endeavouring to obtain every item on the checklist and that abbreviations should not be used.

• The reference to the legal basis pursuant to which the information is provided (Article on exchange of a DTC, TIEA, Regional agreement etc.).

• A reference to the request in response to which the information is provided (reference number).

• The information requested, including copies of documents (e.g., records, contracts, invoices) as well as any information not specifically requested but likely to be useful based on the information provided in connection with the request.

• If applicable, explanation why certain information could not be provided or could not be provided in the form requested.

• For money amounts the currency, whether a tax has been withheld and if so the rate and amount of tax.

• The type of action taken to gather the information.

• The tax periods for which the information is provided.

• Whether the taxpayer or a third person has been notified about the exchange.

• Whether there are any objections to notifying the taxpayer of the receipt of the information. CHIEDS

• Whether feedback is requested on the usefulness of the information.

• A reminder that the use of the information provided is subject to the applicable confidentiality rules (this can be done by stamping a reference to the applicable confidentiality rule on the information provided or including a watermark if the information is sent electronically).

• Contact point: name, phone, fax number and e-mail address of the tax official who may be contacted if needed (that person should have a delegation of competent authority).

• Signature of the response by the competent authority or person having a delegation of competent authority.

APPENDIX 5

Model Templates for EOI

Template 1	Acknowledgment letter to the requesting State of
	receipt of an EOI request for non-banking information
Template 2	Acknowledgment letter to the requesting State of
	receipt of an EOI request for bank information
Template 3	Letter of request to Information Systems to provide
	information
Template 4	Letter of request to Revenue District Office and other
	concerned agencies to provide information
Template 5	Letter of request for banking information from
	financial institution
Template 6	Letter of request to taxpayer/third party to provide
	information
Template 7	Feedback Form for information provided by RDO
Template 8	Sample of Final Reply to EOI Request
Template 9	Sample of Interim 90-Day Reply to EOI Request
Template 10	Notification letter to Taxpayer where banking
	information is requested
Template 11	Sample memorandum requests of information made
	by Revenue Region/RDO
Template 12	Request of information by BIR to tax treaty partner
	with the attached memorandum
Template 13	Sample of Final Reply to requested State where
	information has been received
Template 14	Letter to the revenue officer accompanying
	information received from requested State

TEMPLATE 1

Acknowledgment letter to the requesting State of receipt of an EOI request for non-banking information

Our ref: EOI (Please quote our EOI number in all correspondence).

Your ref: xxxx 2013

Re: [case name]

Exchange of Information under Article xx of our Double Taxation Agreement

Dear . . .,

I acknowledge receipt of your request for information in relation to the above case which we received on . . . 2013.

Enquiries are being carried out and I will issue a full response to you as soon as possible.

[Where the information requested is likely to be held by a Philippine's taxpayer the following sentence should be included in the acknowledgement letter: In the event that the information you requested is not already on our files, I intend to contact the taxpayer directly to obtain the information. If you have an objection to this course of action, please contact [Name of Official] (Chief of ITAD) immediately: Telephone: + 632 1 xxxxxxx - E-mail:]

I confirm that this information is governed by the provisions of Article xx of our Double Taxation Agreement.

Yours sincerely,

TEMPLATE 2

Acknowledgment letter to the requesting State of receipt of an EOI request for bank information

Our ref: EOI (Please quote our EOI number in all correspondence).

Your ref: xxxx 2013

Re: [case name]

Exchange of Information under Article xx of the Double Taxation Agreement between the Philippines and [insert name of country]

Dear . . .,

I acknowledge receipt of your request for information in relation to the above case which we received on . . . 2013. AaCTcI

Enquiries are being carried out and I will issue a full response to you as soon as possible.

Our regulations provide that, with respect to information held by a bank or financial institution which is requested by a foreign competent authority, we shall within 60 days notify the taxpayer concerned that he is subject of a request by the foreign competent authority. If you do not wish us to notify the taxpayer or you would prefer that we try to obtain the information before issuing the notifications, please contact [Name Official] (Chief of ITAD) immediately: Telephone: + 632 1 xxxxxxx — E-mail:. . .

I confirm that this information is governed by the provisions of Article xx of our Double Taxation Agreement.

Yours sincerely,

TEMPLATE 3

Reference No. ___________

_____________

Memorandum for

(Name)

Assistant Commissioner

Information Systems Operations Service or

Information Systems Development Service

With reference to the request for information of (foreign tax authority) made pursuant to the article on Exchange of Information of the Philippines-(foreign country), income tax treaty, please provide information on the following:

Taxpayer/s Subject of Request for Information
Name	Last Known Address
_________________	_________________________
_________________	_________________________
Information to be Verified/Certified or Document/s to be Provided
•
•

When complying, please refer to the above-mentioned Reference No. and attach a copy of this letter. Please respond within 15 days from receipt of this letter to the Chief, International Tax Affairs Division of this Bureau. Should you have any queries relating to this matter, please contact the Chief, International Tax Affairs Division at Telephone Nos. 9265729 or email at [email protected]

Thank you.

Assistant Commissioner

TEMPLATE 4

Letter of request to Revenue District Office and other concerned Agencies to provide information

Reference No. ___________

______________

(Name)

Or

(Name)

Dear Mr./Ms. ___________,

I am writing to inform you that a request for exchange of information has been received from (name of foreign tax authority) pursuant to Article [Insert article number] (Exchange of Information) of the Philippines-(Insert name of foreign country) Double Taxation Agreement. To enable us meet our obligations under this treaty please provide the information described below on the following: HTAIcD

Taxpayer/s Subject of Request for Information
Name	Last Known Address
_________________	_________________________
_________________	_________________________
Information to be Verified/Certified or Document/s to be Provided
•
•

When complying, please refer to the above-mentioned Reference No. and attach a copy of this letter. Please respond within 15 days from receipt of this letter to the Chief, International Tax Affairs Division of this Bureau. Should you have any queries relating to this matter, or in the unlikely event that the information holder challenges our authority to obtain the information requested please contact the Chief, International Tax Affairs Division of this Bureau: Telephone: + 632 1 xxxxxxx — E-mail.

Thank you.

TEMPLATE 5

Letter of request for banking information from financial institution

Reference No. ___________

______________

(Name)

Dear Mr./Ms. __________,

Pursuant to Republic Act No. 10021 21 and Revenue Regulations No. 10-2010 and Article [Insert article number] (Exchange of Information) of the Philippines-[Insert foreign country name] income tax treaty 22 you are requested to provide the information set out below: in accordance with:

Subject of Request for Information
Name	Account No.
_________________	_________________________
_________________	_________________________
Relative thereto, please provide the following information/document/s on the subject:
•
•

When complying, please refer to the above-mentioned Reference No. and attach a copy of this letter. Please respond within 15 days from receipt of this letter to the Chief, International Tax Affairs Division of this Bureau (Room 811, 8th Floor, BIR National Office Building, Diliman, Quezon City). Should you have any queries relating to this matter, please contact the Chief, International Tax Affairs Division at Telephone Nos. 9265729 or email at xxxxx @bir.gov.ph.

Thank you.

(Name)

TEMPLATE 6

Letter of request to taxpayer/third party to provide information

Access to Records and Request for Information

Date: _____________

____________

______________

Sir/Madam:

Pursuant to the Exchange of Information provisions of the Philippines-________________ tax treaty and in connection with Sections 5 and 7 of the National Internal Revenue Code, please be informed that (Mr./Mrs.) _______________________ of RDO No. ___________ of this Bureau, is authorized to request the following documents and/or information or to have access to your records pertaining to the specific transaction for which information is being requested by the ____________ tax authority. SAEHaC

RECORDS TO BE VERIFIED:

INFORMATION DESIRED:

It will be appreciated if the desired documents/information are presented to this Office on or before ________________.

I want to assure you that the documents furnished and/or information obtained are subject to the confidentiality requirements of the National Internal Revenue Code and those imposed on us by the terms of the Philippines-_______________ Double Taxation Agreement. Any inquiry on this matter should be directed to this Office at (RDO Address) with Tel. Nos. ______________ or Fax No. _____________.

Very truly yours,

Commissioner of Internal Revenue

By:

Revenue District Officer/Division Chief

TEMPLATE 7

Feedback Form from RDO

Request for Information

Status Report/Feedback Document

Subject of Investigation: ____________________________

Requesting Party: _________________________________

Date of Referral to RDO: ___________________________

(Note: Please use another paper, if necessary)

Action or Information Requested

Action Taken/Remark (Attach documentary proof)

Recommendations/Suggestions

Signed by:

____________________

Noted by:

________________________________

RDO No. __________

TEMPLATE 8

Sample of Final Reply to EOI request

Our ref: EOI (Please quote our EOI number in all correspondence).

Your ref: xxxx 2013

Re: [case name]

Exchange of Information under Article xx of the Double Taxation Agreement between the Philippines and [insert name of country]

Dear. . ., (insert name of foreign Competent Authority)

I refer to your request for information in relation to the above case, which we received on . . . 2013 and to previous correspondence of (insert dates of previous correspondence, if any). AIDTHC

We wish to inform you that we have now completed our inquiries and have obtained the information needed to respond to your request. Please find attached (add details of attached documentation)

Should you have any further queries relating to this matter, please contact [Name Official] (Chief of ITAD) immediately: Telephone: + 632 1 xxxxxxx — E-mail:]

The use and disclosure of this information is governed by the provisions of Article xx of our Double Taxation Agreement.

I would appreciate it if you could inform us, in due course, as to whether the information and documentation we have provided helped you in your investigation.

Yours sincerely,

TEMPLATE 9

Sample of Interim 90-Day Reply to EOI request

Our ref: EOI (Please quote our EOI number in all correspondence).

Your ref: xxxx 2013

Re: [case name]

Exchange of Information under Article xx of the Double Taxation Agreement between the Philippines and [insert name of country]

Dear. . . [insert name of foreign competent authority],

I refer to your request for information in relation to the above case, which we received on . . . 2013.

We wish to inform you that as of this writing, we have not as yet been able to obtain the requested information. [Add some descriptive details as to why the information has not yet been provided.]

We will endeavour to forward the requested information to you as promptly as possible. We expect to be able to provide this information by [date]/within [number] weeks.

Should you have any queries relating to this matter, please contact [Name Official] (Chief of ITAD) immediately: Telephone: + 632 1 xxxxxxx — E-mail:]

I confirm that this information is governed by the provisions of Article xx of our Double Taxation Agreement.

Yours sincerely,

TEMPLATE 10

Notification Letter to Taxpayer where banking information is requested

Our ref: EOI xxxx 2013

Re: [taxpayer name]

Exchange of Information under Article xx of our Double Taxation Agreement

Dear . . .,

Pursuant to Republic Act No. 10021 and Revenue Regulations No. 10-2010 I wish to inform you that a request for exchange of bank information has been made under the provisions Article XXX of the Philippines — [foreign country] Double Taxation agreement in respect of accounts held by [taxpayer] at [name of bank].

Enquiries are being carried out with the bank in accordance with the powers granted to me under Section 6 (F) of the NIRC and Republic Act No. 10021.

I confirm that any information exchanged will be governed by the provisions of Article xx of our Double Taxation Agreement (DTA) with [foreign country] and must be treated as confidential by [the requesting state] in line with those provisions.

Yours sincerely,

TEMPLATE 11

MEMORANDUM

FOR : Commissioner of Internal RevenuePhilippine Competent Authority

ATTENTION : Assistant Commissioner, Legal Service

RE : Request for Information from Foreign Tax Authority

DATE : xxx

We would like to ask your assistance to request information from the competent authority of (name of treaty partner) in connection with our investigation of the tax liabilities of (Name of taxpayer). 23 We confirm that we have exhausted all possible means domestically to obtain the information subject of this request. We also confirm that this request for information shall be subject to confidentiality under the EOI Article of our income tax treaty with (name of treaty partner). TcICEA

Background:

(Background should contain the following information)

1. Identification of Taxpayer under examination or investigation

a. Full name of Taxpayer

b. Date of Birth (for individuals)/Date of Incorporation or Formation (for juridical entities)

c. Marital Status (if relevant)

d. Tax Identification Number (TIN)

e. Full address (including email or internet address, if known)

2. Identification of Taxpayer in the Requested Country relevant to the examination or investigation and to the extent known, their relationship to the person(s) under examination or investigation:

a. Name of Taxpayer

b. Marital Status (if relevant)

c. TIN (if known), addresses (including email or internet addresses if known)

d. Registration Number in the case of legal entity (if known)

e. Charts, Diagrams or other documents illustrating the relationships between the persons involved.

3. If the information requested involves a payment or transaction via an intermediary, mention the name, address/es and TIN (if known) of the intermediary, including, the name and address of the bank office or branch as well as the bank account number where bank information is requested (if known);

4. General case description — Relevant background information including the tax purpose for which the information is sought, the taxes concerned, the tax periods under examination (day, month, year they begin and end), the stage of the procedure, the issues identified and whether the investigation is of a civil or administrative nature only or may also have criminal consequences. Where references are made to our Tax Code and other domestic laws, it is useful to provide some background or explanation as the foreign competent authority will not be familiar with our laws.

Information Requested

1. State the information (simple information or series of questions) and why it is needed. Also, specify the information that may be pertinent (e.g., invoices, contracts, land title);

2. If information requested relates to bank information, state the bank account number and name and address of bank;

3. State the currency whenever figures are mentioned;

4. State the urgency of the reply-State the reasons for the urgency and, if applicable, indicate the date after which the information may no longer be useful;

5. Whether a translation should be provided;

6. If copies of documents or bank records are requested, what type of authentication is necessary, if any;

7. If the information is likely to be used in a court proceeding and the applicable rules of evidence require the information to be in a certain form, the form should be indicated to the other competent authority;

8. Whether there are reasons for avoiding notification of the taxpayer under examination or investigation (e.g., in cases where the EOI is of a very urgent nature or where the notification may endanger the investigation). DCaSHI

Submitted by:

Revenue Officer

Revenue District Officer/Division Chief

Noted by:

Regional Director/Assistant Commissioner

TEMPLATE 12

Date: ___________

(Competent Authority Address)

Attention : (Name of the Competent Authority)

RE : Exchange of Information Request

USA and Philippines Entity/Taxpayer ___________________

Type of Investigation: ________________________________

Coverage: _________________________________________

Dear Sir:

In accordance with the exchange of information provisions of our income tax convention, we request your assistance in connection with our investigation. The specific information required is described in the enclosed memorandum.

This information is requested in accordance with the provisions in our income tax convention. Its use and disclosure must be governed by the provisions contained therein.

Sincerely yours,

Commissioner Internal Revenue

ATTACHMENT OF TEMPLATE 12

MEMORANDUM

(Our Reference No. _____)

PART I

Country where the information may be obtained __________

Philippine Entity

Name of Individual or Corporation _____________

TIN _____________

Address _____________

Foreign Entity

Name of Individual or Corporation _____________

Address _____________

PART II (Outline for the Specific Request)

A. Taxpayer Information ETaHCD

a. Taxpayer profile (description of the taxpayer)

b. Transaction covered (type of income)

c. Taxes and taxable years covered

B. Purpose of the Request

a. Purpose or objective of the request being sought

b. Grounds for believing that the information requested is in the possession or control of a person within the jurisdiction of the other country

c. A statement that the requesting office has already exhausted all means available to it in obtaining the information in the Philippines.

C. Information Requested (examples)

a. Income Tax Returns

b. Contracts

c. Bank Accounts

d. Property Holdings

e. Income received may be subjected to taxed

f. Any other tax information which is relevant to the said investigation

D. Approximate date when the information is needed

E. Approximate date when the need will prescribe

F. Attachments (relevant documents that may aid in securing the requested information)

TEMPLATE 13

Sample of Final Reply to requested State where information has been received

Our ref: EOI (Please quote our EOI number in all correspondence).

Your ref: xxxx 2013

Re: [case name]

Exchange of Information under Article xx of the Double Taxation Agreement between the Philippines and [insert name of country]

Dear . . ., (insert name of foreign Competent Authority)

Thank you for your letter of . . . 2013 containing the information we requested in the above case (refer also to previous correspondence if relevant). We are very grateful for your assistance in this matter. The information received has been transmitted on to the auditor/auditors responsible for the case and we will, in due course, provide you with feedback on the importance of this information for their investigation.

Should you have any further queries relating to this matter, please contact [Name Official] (Chief of ITAD) immediately: Telephone: + 632 1 xxxxxxx — E-mail:]

I confirm that this information is governed by the provisions of Article xx of our Double Taxation Agreement.

Yours sincerely,

Commissioner of Internal Revenue

TEMPLATE 14

Letter to the revenue officer accompanying information received from requested State

Our ref: EOI (Please quote our EOI number in all correspondence). aCTHEA

Re: [case name]

Exchange of Information under Article xx of the Double Taxation Agreement between the Philippines and [insert name of country]

Dear . . ., (insert name of Auditor/RDO Official)

I refer to you request of . . . 2013 (refer also to previous correspondence if relevant) for exchange of information with (insert name of country).

I have made a request for information to the competent authority of (insert name of country) under the terms of Article xx of the Double Taxation Agreement between the Philippines and (insert name of country). The information requested has now been received and a copy of the letter and documents requested are attached.

I want to emphasize that the use and disclosure of this information is governed by the provisions of Section 270 of the NIRC and Article xx of our Double Taxation Agreement. These documents should be stored securely and it is not permitted to make copies of them or forward them to other offices of the BIR without prior consultation with the EOI Section of ITAD.

Note that the procedures to be followed by RDOs in handling information received from foreign tax authorities are set out in RMO 2-2013 and no exceptions from these procedures are permitted.

Should you have any further queries relating to this matter, please contact [Name Official] (Chief of ITAD) immediately: Telephone: + 632 1 xxxxxxx — E-mail:]

Yours sincerely,

Commissioner of Internal Revenue

Footnotes

1. Currently, the Philippine has no TIEAs in force.

2. Bureau of Customs, Bureau of Immigration, Land Registration Authority, Security and Exchange Commission National Statistics Office and Department of Trade.

3. Several of our treaties contain a clause in Article 26 (1) according to which information shall be exchanged "in particular for the prevention of fraud or evasion" or similar wording. The terms used "in particular" or "as well as" make clear that information shall be exchanged also for cases where there is no fraud or evasion.

4. In the case of three of our treaties, Brazil, Germany and Switzerland, exchange of information is limited to information that is necessary for carrying out the provisions of the DTA and does not extend to the administration and enforcement of the domestic laws of the contracting states.

5. Note from the Publisher: Missing footnote text.

6. Note from the Publisher: Missing footnote text.

7. Note from the Publisher: Missing footnote text.

8. Revenue Memorandum Order No. 2-2013 specifies the form that a request for information from different offices of the BIR should take (see Template 12 of RMO).

9. See Section 2 of Revenue Regulations No. 10-2010.

10. Republic Act No. 10021 and Revenue Regulations No. 10-2010 require us to notify the requesting State of any deficiency in the request within 60 days of receipt.

11. See Section 8 of Revenue Regulations No. 10-2010.

12. See Section 8 of Revenue Regulations No. 10-2010.

13. Note from the Publisher: Missing footnote text.

14. In the case of our treaties with Germany and Brazil, exchange of information is limited to information that is necessary for carrying out the provisions of the DTA and does not extend to the domestic laws of the contracting states. It is unlikely therefore that spontaneous exchange of information would arise in these cases.

15. See Section 5 of Republic Act No. 10021.

16. See Section 4 of Revenue Regulations No. 10-2010.

17. See Section 19 (A) and (D) of Revenue Memorandum Order No. 53-2010 (Revised Code of Conduct).

18. Note that a number of Philippines treaties, e.g., Canada and Singapore do not allow for disclosure in public court proceedings or judicial decisions.

19. Financial Statements includes Balance Sheet, Income Statement, Statement of Retained Earnings, Statement of Cash Flow and Notes to Financial Statements.

20. Exchanges should not be delayed by endeavouring to obtain every item on the checklist. Abbreviations and acronyms should not be used.

21. An Act to Allow the Exchange of Information by the Bureau of Internal Revenue on Tax Matters Pursuant to Internationally-Agreed Tax Standards, Amending Sections 6 (F), 71 and 270 of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes.

22. Official title of the treaty.

23. Or if it is a tax case — state "in connection with the tax case of . . ."