RR No. 10-2010: Provides the guidelines relative to the exchange of information pursuant to an existing international convention or agreement on tax matters

Key points

1. Authority to obtain information. The Commissioner of Internal Revenue (CIR) may obtain any information, including bank deposits and related information held by financial institutions, to answer a request under a convention or agreement the Philippines has signed or joined. The BIR may use that information for assessment, verification, audit and enforcement.
2. Returns and confidentiality. Income Tax Returns of taxpayers named in a foreign request are open to inspection upon order of the President, under rules prescribed by the Secretary of Finance on the CIR’s recommendation. A foreign tax authority must treat information received from the BIR as absolutely confidential and disclose it only to persons or authorities involved in assessing, collecting, enforcing or deciding appeals on the covered taxes.
3. Handling of requests. All requests go through the BIR International Tax Affairs Division (ITAD). After ITAD evaluates the request, the CIR notifies the financial institution in writing, and no revenue official or employee may communicate directly with the foreign authority without the CIR’s prior approval.
4. Financial institution response. The institution has fifteen (15) days from receipt of the notice to provide the information, or must state in writing why it cannot. It may request an extension of not more than thirty (30) days from receipt of the original notice.
5. Penalty and taxpayer notice. An officer, owner, agent, manager, director or officer-in-charge of a financial institution who willfully refuses to supply the information faces a fine of not less than P 50,000 but not more than P 100,000, or imprisonment of not less than two (2) years but not more than five (5) years, or both. The CIR notifies the taxpayer in writing within sixty (60) days from receipt of the request.

Who is affected

• Financial institutions holding requested information
• Taxpayers subject of a foreign information request
• Revenue officials and employees

Deadlines and effectivity

• Financial institution response: fifteen (15) days from receipt of the CIR’s notice
• Extension: not more than thirty (30) days from receipt of the original notice
• Taxpayer notice: within sixty (60) days from receipt of the request