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2016 International Tax Forum

2016 International Tax Forum. “Fiscal Policy and Inclusive Growth” Assistant Commissioner Marissa O. Cabreros Bureau of Internal Revenue October 27 – 28, 2016. Session 8 : Tax Treaties and Trade Agreements: Economic benefits and implications among developing economies.

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2016 International Tax Forum

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  1. 2016 International Tax Forum “Fiscal Policy and Inclusive Growth” Assistant Commissioner Marissa O. Cabreros Bureau of Internal Revenue October 27 – 28, 2016

  2. Session 8: Tax Treaties and Trade Agreements: Economic benefits and implications among developing economies 2016 International Tax Forum “Fiscal Policy and Inclusive Growth” October 27 – 28, 2016

  3. Tax Treaties and Trade Agreements • Trade Agreementsare the product of negotiations between two or more sovereign nations that dictate the terms of the acceptable exchange of goods and services between the parties. • Tax Treaties promote trade and investment by allocating the taxing jurisdiction between the Contracting States so to eliminate or mitigate double taxation on income

  4. Tax Treaties and Trade Agreements • DTA or TIEA • OECD or UN • Global or Regional • FTA Pillars • Goods • Services • Investment

  5. Reasons for Trade Agreement • Trade facilitation • Liberalization • Mutual support for common issues • Freer trans-border flow of people • Capital formation

  6. Reasons for Trade Agreement • Cooperation in • Science and technology • Human resource development • Small and medium enterprises • Environment

  7. For developing countries • Global competitiveness • Sustainable growth • Efficiency in allocation of resources • Poverty alleviation

  8. Philippine Profile: Free Trade Agreement (FTAs)

  9. Reasons for entering into Tax Treaties* • To facilitate outbound investment by residents by: • Removing or reducing double taxation on investment in the other country; • Reducing excessive source country taxation; • In the case of low-tax countries, creating a competitive advantage for its residents by reducing or removing source taxation; *UN Paper on Why we Negotiate? Written by Ms. Arianne Pickering

  10. Reasons for entering into Tax Treaties* • To facilitate outbound investment by residents by: • Removing or reducing tax discrimination on investment in the other country; • Providing certainty and/or simplicity with respect to taxation on investment in the other country on out- bound investment by residents. *UN Paper on Why we Negotiate? Written by Ms. Arianne Pickering

  11. Reasons for entering into Tax Treaties* • To facilitate and encourage inbound investment and inbound transfers of skills and technology by residents of the other country by: • Removing or reducing double taxation on the inbound investment or transfers; • Reducing excessive source taxation; • Providing increased certainty and/or simplicity with respect to taxation of the inbound investment or transfers; *UN Paper on Why we Negotiate? Written by Ms. Arianne Pickering

  12. Reasons for entering into Tax Treaties* • To facilitate and encourage inbound investment and inbound transfers of skills and technology by residents of the other country by: • Developing a closer relationship between tax authorities and business; • Maintaining benefits of tax concessions and tax holidays provided with respect to inbound investment or transfers. *UN Paper on Why we Negotiate? Written by Ms. Arianne Pickering

  13. Reasons for entering into Tax Treaties* • To reduce cross-border tax avoidance and evasion through: • Exchange of tax information; • Mutual assistance in collection of taxes.   *UN Paper on Why we Negotiate? Written by Ms. Arianne Pickering

  14. Reasons for entering into Tax Treaties* • For political reasons, such as: • Sending a message of willingness to adopt international tax norms; • Fostering diplomatic or other relations with the other country; • Strengthening regional diplomatic, trade and economic ties; *UN Paper on Why we Negotiate? Written by Ms. Arianne Pickering

  15. Reasons for entering into Tax Treaties* • For political reasons, such as: • Complying with international obligations; • Responding to pressure from the other country. *UN Paper on Why we Negotiate? Written by Ms. Arianne Pickering

  16. For developing countries • To attract foreign direct investment • To attract inbound transfers of technology or skills • To respond to political or other pressure from other countries

  17. Philippine Profile: Tax Treaties

  18. Status of PH- ASEAN Treaty Network

  19. Tax Treaties and Trade Agreements….coupled with: • Workable investment protection mechanism, • Robust regulatory framework for trade and tax administration, • Competent mutual agreement procedure, • Efficient and effective capacity to collect and exchange information • Continuing and apt capacity and capability build-up both on the technical and negotiation skills

  20. End of Presentation Thank You!!!

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