I{lrl'tltt[.]{..

(}l; I'liL H {lI ll'l'llql :r

lltrl'ARl'Mlif.i'!" t"rf; 1:1POr, t
BUREAU OF INTERNAL REVENTII1

JUN 2 9 2W,

REvENtTE RE(;rrLATroNs 1\o. l0' W?2"

SLIttJHCT: l'reserihing thc (iuidclines nnd llroccdurcs lirr l{cqrresting hlutual ,\qrerrncrrl
Ilrerccdurc ("N,tAlr"l Assislance in the lrhilippincs
.
TOr All lntcrnal llcvcnuc ()flicers anrl (')thers ( {)nL:crnrd

Settiun I. MAP and i(s l",cgal Basis

'l-he
Mutual r\grcemcnl I'roccdurc ("MAI'}")articlc in thc [Joublc"luxation ,,\grccnrcnrr
(lllAs) or tlrx lrcalics o1'thc I'>hilippines with iilher.iurisdietinnr allo*s thc conrpetcrrr
.luthorities of thc contracting states tfi resolve disputes arising liixl dilllrenci:s ()r dif'flculties
in the{nrcrprctatiun or applical.ion ol'the lax trr:atv throuqh rnutull at-trcemcnt. 'l'hc:r: clisprrrr:,
inr'itllc cases ol-douhlc taxalion.,iuridical nnd econonrie" n'hich olisnlinrcr rcsull frorrr
inc*nsistencieg in the interprctation and application nf'treatl prr;lvirions and fiom trans:.rclions
not eonductcd at arm's lcngth.

l.isually. thc recuurse of'a ta.rpayer rvhosc inconrc is suh"icelcd to doubli; taraliorr rrr tu
taration nr:t in accordance rr.ith the provisious olthe relevant I)'lA ir trr litigatc such rasc irr
c()ttrt or to filc an arJministrativc appcal. Wirh MAf'. thc affcctccl taxpa).cr is npu rircrr
itttol[g1 fl]'enuc. intlcpendent {"rom the ordinary lcgal rcrnedics, tr rcsrilve dispLrtcr rusultins
litrtn fire inconsistent and improper application or interpretation ol'lrcatr provirions.

While fhr competent authr:rities may refort to MAP. thcr are. hotcver. not ohligctl rtr
rcach an agreement and resolvc their tax disputcs. What rhc MAP articlc reqtrirr:s is thrt rhc_r
shall endeavor to resolve by mulual agreemcnt any dillicultics or doubts arising as to thr
intcrpretation or application of the relevant D'I'A"

Section 2. 0trjective
-Ihis lte*eulations is being issued to sel out thc process through rvhich taxpillcrs uiln
request MAP assistancc l"rorn the Philippine Ciomprctcnt Authorit,v to rcsolve disputes arisrnr:
{iont taxatir:n nol in accr:rdanee rvith the provisions of the relcvant D'f'A. h r.)iltlinsr thr":
procc(ltlres lbr initiuling a MAP request lnd lhe specilic infirrmation and doe nnrcntarion thar
a toxpater is requircd ter suhmit in support the rctit. rnd pruvidcs guidarrcc in tlrt:
inrpluncntatitrn o{'a MAP agrccrnent thirl has heen reaclred. il'an1 .

Secti$n 3" 1'y'pical scenarics requiring MAP Assistance

fh. firtt,ro'irrg arc strme tvpir:al eramplcs *f' tirxation nol in acconJalrcc u,ith a t;.rr
convenlion thal rr'ould necessitate a Mz\P assislance:

ffiiiffiffir::1
i;*.,#l-iil5-r5r-?-TldT,
BUREAU OF INTERNAL REVENUE ilalc I ol tJ
I ii
+ir tjq Zil?fuijr JUt{ $0 2{1?j
D
0tvlsroN
l. 'l'he withholiling tas rate imposed on an item of inconre carnsd hl a dorncstic
corporati('rn or rcsiclcnl citfucn is hey'*nd lhc rnaxinrum rffte llxrd undcr the tar lrefit).
2. A taxpal,er is deenred a resident ol'lhe I'hilippines anr-l of the olher crntrscting statc
hased on theirdomestic lara's"
'l'his
triggers the applieation ol'thc tichrcaker ruicr urrr-lcr
the applicable tax trcat;.
3, A domcstic corporation or a rcsidenl citizcn is taxed in the other c()trntrv on lhc hrrsincs:
prolit or inconre li<lm indcpcndcnt scrl'ices dcspitc nrll hal'ing il fcrnrilnrnl
citahlishment or il llxed hascd in thal crrufitr]' undcr thc {ax convcrrtiorr.
4. r\ resiclunt citizcn r.rrdomcstic corporali<xr has hecn or rrill irc sutrfect tr) ll\i.rti()r'l rt(rl in
accordance with the provisions o1'the;rppliuahle lax trcat) rcgardinu tlrc um<rrrrrt ol'
prttit attrihutahlc to lhc pcrmancnl cstablishmenl r.rr tirccl hasc.
5. A ta.rpaycr is uncer$in whcther the convention covers a spccilic itcm ol'incorne or ir
r.rnsute of tlrs charucterizalion or clas:ifjcatir;n ol-thc ilcrn reiatcd trr l crorl-lrrrrrlrr
issue.
6. r\ ta-rpaycr is rt"rh.icct t* additional tax in fint: counlr!' hecausc ol'a lnrnslr;'r pricirru
acljustmort to thc pricc ol'grxds $r scrvices lranstrrred ltr {.}r lrr,m a relatecl plrtl in thc
ohrer ccuntn.

$eetion 4" The Crmposition of the MAP Tetm

Thc MAP Team ol'thc Bureau of lnlenral Revenue {l}lR} shall hc cr:nrposerl ol' thc
follow'ing:

1. The Competent Authority firr rho Philippines

"fir
E
irnplcmcnt the MAP article, the (lamrnissiuner of lnternal Rcvcnuc (("lRl is hcre hr
designated s.s the Competent Authority fbr the l'hilippines (l'hilippine CA),

\fu'here ii is nol possible fur thc CIR t{r dcal directly'with MA[] cascc. he/shc slrall
dclcgate his/her lbnctions and porver$ to other comprtent o{ficials ol'thc IllR via a Rcvenrre
I.)elegated Authorit_v Order ( RDAO).

2. Offices under the Competent Authorilr

'l'tr effectively ir.lrplcment the MAP functi*ns. the rcccipl, tirrailcd
analvsis^ and initinl
rcvicrv of the MAP cases shall be conducted by the fnllnwing:

a. 't'he Rutings and MAP Section ol' the Inlernational "l"ax Allairs Division (lt;\l)t
(hereina{ter relbrred 1o as the "[,lAP Ofllce"] shall s$mmcncc the analysir;rnd
re solution o{'MAI} cases. The reccmmentlatiur c{'tlre il'lAP (}lf ice Ehall tre rtvicrr t'd hr'
thc.Chiel*f I'fAf).

Ip ordcr to enahl$ I'lAD tn carr.v $ut its mandate tc resrlve MAP cases in a tirneh an.l
ulflcctive manner" adequate rerourcfs (e-g. personncl" firnding. training. ctc.) shall trc
provided ro thc futAI'Iunction.

i. Wiih rcspcct to manpowcr, lhe Psrsonncl Division shall revisit Lhc orsanizaliolral
structurc and stalling pattern of I1"AD and accordirrgly plan the slall';rugnlr:rtitli(,n
lbr the MAP frrnction" taking into considcnrlion the numbcr of' cilsc ol'ficr:rs
handling MAP cascs. the average case load of each cilse otllcer. rrhethcr thc c;rs*

$1
NUE
BURE AU OF IIiTE RNAL REVE l)urt(.2 rrl lJ

DI iut,l 30 ?n:l
li\r CORDS MGT. DIVISIO]U
RI )N
 ollleers are handling MAP cases only or arc also assigned trl fltl), olher lasks. thc
conrplexitl'olcascs hantlletl by thcse case olficcrs and the vems ol"r:xperiencc i,f
.l'hc
the cuse olljccrs handling MAP cascs. am(lng dhsrs" ('hicl'ol't'lAI) shall hc
alltlrred lo rsqucsl morc p€r$onncl tn handlc incrcaring invcnlory- of i!'tAt'crscs il
lhe circurrrstanccs so warrant.

ii. Adcquatc funcling shall nlso hc allocaled tu lhc l\.{Al} function tirr trarcllins
expensss to conduct face-to-lace ncgoliirtions rvhcre ncccssar\.

b. 'I'he proposcd resnlution or acl.ion uf'thc I'["AD on lhe k{AP cascs slrall hc ruhiect tu
rqvicw b),the Assistant Cermmissiorter tor I-egal Servicc. thc I)cput1 ('t'rrnlnissiolrcr lirr
l..egal (iroup and finalll'. h1' the ( ompetcnt Authorit-r (,r hislhcp uuthorized
rcpresentalivc. In the interest ol' tinre. the ('*rnpetent Authoritv tnil\ inlrrrducc
streamlining procedures. taking inlo acculrnt thc invcntory,ol'L,IAI) crrses and thc
number ol' handI ing oli]ccrs,

Smtion 5. Inifiating a MAP Request

l. Pre-fillngConsultation

A taxpayer may. prkrr to making a {irrmal request frir h{AP assi:tancc" requc\t lirr a prc-
llling consultation firllowing the prnr;eduri:s outlinrd bclo*;
h
a. ltic re'qucst ltrr a pre-filing consultation should hc addrcsscd to thc ('hiel'ot'l'lAl).
Atlcnlion: Scction Chie f Rulings and l\.{AI} Sccticn:
b. suppnrting documents shall tre altachcd to suclr requcst. rvhen necessilrl: tntl
c. i{'so reqhested. thc tflxpaler or his authrtrircd reprrsentative shall irttcnd lnd rnakr u
presentation cl'thc issues that requirc c$mpt:{enl ar,rthr:ritl' arsisluncc.

'Ihe taxpaycr shall be infhrmed o{'the rrulc*mc ol'thc pre-filing ct:nsultation. lf'rhc
Clhief t>f l"l'AD believes that the issues nray he rmolverl thnrugh Mn P" it shall arJr,isc rhc
tsxpayrr to submit a {ormal request fcrr MAP assistance.

2. A Valirl MAP Rcquest

T'o request firr MAP assistancs. a laxpay'er must submit a requcst in writing. uhich rnurr
be signed by thc tit:(psyer or its,{rislher authc)riz.ed representative , 'I'he requesl shorrld cl)nlititl
i
and include the inlormation and documentation as specified in suhsection hereo{'ancl should
hc subrnitted to the fnllowing address:

-I'ax
$ffice Address: lnternational AlTairs Division
Room 8l l. IllR Nationrl Ollice lluilding
lllR Road. Diliman. I 100 Queron (litl'
fr,mail address: map itarl{itibir.gov.ph
Where thc MAI) requsst has been mistakenl;- suhmittcd to another olllce ct-rhe lllR. the
receiving offite shall immcdiately lbrward the snme to l'I'AD rvithoul de lav and shflll notili,,
the taxpaycr ol'such fact.

tr D
INTERNAL RE

JUr{ 30
I'agc 3 ot' I.1

DIVISION
J. Specific Infurmefion and llrxrmentation tr hc Suhmitted rvith the il{AP Rcqucst

t. Minlmum lnformttion

ln ordcr lor a MAP rtquest to he considcrcd ralid under thc l)'1,\- it rhoultl
cr.utain the firl lorving inlirnnation:

i. identitl r"rf the taspslcr{s) tt rvhich the tv1Al'} relatcs (nlme. atldress. ra\pa\ur
idcntillcation numher. conlact details and ths rclationship belrleren tlre conccrrrcd
taxpa\,ers. i{" appl ieahlc}:
ii- the tax convention arliclc(s) rhal thc taxpavcr il$serts is(are) not hcing corrcctl-r
. applicd. and the taxpflver's interprelatiun o1'the applicarion ol'thc flrticlc:
iii. relev$nt firr;ls ol'the case. thc taxalbn -,''eari or periotl involvcti and the arl(lunt\
involved (in both thc local cuffcncy and lbreign currcncl ):
iv. Ihe narne ol'the lbrci.un tax adminislr::lion involved and" il'frtssiblc. idcnlilicttiurr
s:f the regional or local tax admini*tration ofJice tlrat has matlc. or is prnposing ttr
make. the ad-iustment:
v. analysis of the issue(s) involved. including its interprctation o1'thc applieation ot
lhr specific treaty" provision{s):
vi" whether the MAP requesl rvas alsn submittcd to the compelsnt authorit; ol'thc
," other (lontracling Pmt-r'. together $'ith the date of such suhmission. thc nante an,-l
the designation of the person nr the otllcs lo rvhich thc MAI'rcqucsl rr;r
subrrittcd:
vii. whcthe r the issue(s) involved were prcvit'rusl1' dcalr rvith;
viii, a $tatemsnt indicating r.vhether the taxpa-ver has {'iled a noticc r'rf'oh"icctirxr. l:oticc
o{ appeal, relund claim. or c(}mparablc docunrent in either ol- thc rr:levirnl
jurisdictions:
ir. a schedulE of the time limitfitions in caeh .iurisdiction (rlnmestie as rr,ell as tlr
convcntion time linrit-sl in rcspect of thc ycrrs firr rvhish ruliclis sought (in clr*i
.r, of multiple taxpalers, a schedule lirr each): and
x. a statement conlirming that all information and documcntation prr.rvirled in rhr
M,4I' request is accurale and that the taxpaver rvill assist thc compelent rulhoril-r
in lfs reseilution of the issue(s) presented in the MAI'reqursl h_v- f'urtrishing arr-r
other inlirrmation or documentation required b3, the compstent ffuthorit_v in ll
timely maflner,

b. Doeumertation
i A certified true copy of thc futlowing dacument$. if relevant. shall Lre atllchcil ru
the MAP requesl:

i. Final Assessment Notice, rulings duly issued bt the c{}mpetent ofllcials of the
BIR or any equivalcnt document rvhich contains the actiein thal rcsultr in elouhlc
taxati(}n:
ii. copies ol'Ilrx asscssments. gudits condusted hi, thc ftrreiqn tax auth(irit-\, Icading lu
' the incorrrrcl applicatir;n ul'the t&x lrcilt)' pror ision:
iii. Audited linancial Statements and lncome 'i'ax Return duly lilcd *'ith thc IllR
e togcthcr with (hc tatter's atlachments (e.g. tllll Forrn No. l7()()). lrunsfi:r pricing
documcntation. advance ruling- advance pricing arrangement (AIIA):

0 BI,'REAU OF INTERNAL REVE

,1r'q 39 ?'n rl
liuitc { o}'lJ

RECORDS MGT. DIVISiO

 iv. detisinns cf a cermpelrnl (()urt *r tari trihunal on a similar ce rr invlrlving the ffmc
lirctual and legal issues;
v. a ct)p"\' trl an)' ,,1;191 re(ilest lirr h{AP assistanee and thc asrocittcd dtsumerrrr
ljled. or to be ijlerl. with the compctent $uth()rit-! ol'thr nthcr corrtmcting stntr.
inclrrtlinu cnpies ttf correspondence liom the othcr lax administration. copier rrl'
hriel's. erhicctieins, ctc.. sutrmitted in responsc tu the aclion or proposcd actiorr til'
ano{hcr tax administratiun lilapplicahle" translatr'd r:opies arc helplirl and *herc
documentation is voluminous. a dcscription ol' Ihc documenliltion rnav he
acceptahlci:
vi, a cop) of thc complaint or appeal filed in courr or u'ith the tax autlxrritic:. il'anr.
vii. n copy ttlanv settlen"tenl or agrernlent reachcd lrith th$ othcr.iuriscliction *hich
- ma)'allbct thu MAP prt"rcessi
viii. prc'ol'of payment of ta.x resulting fnrm the trirnsft:r pricing il.i.ifislrnrnt rnade in tlrc
forrign {ountry; and
ix. tluly authenticatcd (consularized or apostillcd) Spccinl llowcr ol'Auorncr
suthoriTing the taxpa.v-er"s representative to ljle thc requcst lirr lr{Al'arsirtlnee
and ttt do such other acls leading to ths rcs$lutiein rrf the MAP r:*st:.

lf
the iltlachmcnts arc in a foreign languagc. thc MAP Ollice u'ill rcquirc lhc
ti{*pave. Io suhmit an l.nglish translation theretif.

4. \/enuc .

Suh.iect to the pnrvision olthe relevant Dl'A. the MAP requcst mal be prc:cntcd t* lhe
ft"rllcw'ing:

fi. competent ffurhority of the contracring stare of rr,hir:h he is a reEidcnt.

h. cltmpetent authority fif the Cnnracting State of'rvhich he is a i,itizenlr ur.
c. ilthc casc lalls under thc Nnn-Discrimination article of thc: DI'A. to rhc (lonlraetins
State ol'which the toxpayer is a nalional.

ficnerally, thc D1'As require that the MAP rcqirest hc presentcd to thc contpctcrrr
authorib/ of the Contracting State crf which he is a resident. ln thc case ol'thc'l,hilippirrcr.
hclwever. rvhere the MAP request relutes to attributiCIn of profits and transicr pricing
adjustments, tilxpayer$ are streingly encouraged to ensure that thc associated *nterprisc in the
other cantracting slatc also contacls it.s Competenl Authority'. 'fo facilitate thc crpcdirions
restrlution r:f a MAI' case.'the laxpayer should submit all supporting documents pnrmprlv and
simultaneously ro both Cnmpeteni Authorities.

lf the taxpa;"cr is intending to suhmit the same i!'lAP rcquesl to thc ollrcr etirnpctcnr
authorit!-, the tw,o (2) requests should hc suhmitted at the sanrr timr.

5, Periocl rvithin which to Filc the MAP Request

'llrc MAI'requesl. must be srrhmittcd within thc lirrc limit specitied in thr applicahlc
D'[A. *Depcnding {}t.t the provision nf the D"l'A. the lv{AP request lrav he presented rr} th{i
relevailt compstenl nuthority within two (2) or thrce (-1) years liom thc tlrsr nolilication ol'llrt"
i lr()r lvlAl'' rcquesls inrtking thc pror.ision *f
Article 25 ol'the ('onvl'ntion hetueen the (i*rcrnmcnt rrl rhr
l{cpuhlic of thc plrilippine'x and thc (irrvr:mmcnt rrl thc tinited Stutcs ol Amcrica rvith ltcspcct lo l,ner un
Incrrtnc.

BUREAU OF INTERNAL REVENUE l!;rgr.r 5 ol- l3

{ I) F^nt*.
JUr.i 3)Iri
il
i\\FECORDS
lFiv*ii:;-rr-rr-T l0
.J \_/ ?-___'/.-5 U
MGT.
L
DIVISiON
 action rssulting in taxation not in accordance w'ith thc provisions ot'the l)1'A. 'l-hc tarpalerc
should ahvavs consult the relcvant I)'t"A at an earl.l'stage tr) ensurc that thcl' suhmit i, rcqurst
l"or MAP assislance within the specified time limit.

In cascs rvhcre the Dl'As tJo not providc a time linrit. thc MAP rcqucst musl be
submitted to the relevant compctent authorit-v rvithin threc {3} _r'ears li'om thc lirst nri{illcltiorr
t.rl'the action rrsulting in taxation not in uccordance wilh the provisions ol'the I) I'.\.

l'hc tiling pcriod shall be rcckrued lrom the datr: ot"rcceipt ot'thc Iinrl Assc"ssnrcrrl
Notice eirof a ruling dcnying thc claim ftrrtreatl'hcncfit. or anv rquivalcnt dourrnrcnt rvhich
contains the aution that results in double taxation.

6" Il{anner of Suhmission

r\ MAP request may be filed manually to the compelent auth()ri1)' ur his:'hcr irutht'rrizcri
rcpresentalives, or electmnicalh'via an encr-"-pred mail. lfuhere volunrinous cltx(rrrents arr":
attach€d tr: tuch rcquest. thc tlocuments shall hc scnl 10 the derign;ltcd rrddrcss via n
registered nrail or a courier.

1 Fecs

Fees associirted rt,ith the negotiation of bilateral or multilaleral APAs: or uith thr hiring
of independent experts or mediators shall he shouldsrcd hrl the party initiating the L.lAI,
request" In all r:thcr casss. n{} lbes shall hc charged hy' thr ccnnpctent nrrthoritv firr lhc
resolution al' MAP cases.
,g:

Section 6. Thr MAP Prucess

L llreliminan,Asse*qment

I)uring thc preliminar,v- assessment. the responsible olTicer shnulcl detenrrine *hcthcr
the lirllowing requisites are presenti

a. t!:e request contains the minimum information and docurnentation set out irr Scctiorr
$(:J hercor;
h. J"here is a DTA in place betweer the Philippines antl the lbreign .iurisdiction s,hich
contains a MAP article; and
the MAP request was filed with the pff,per Competent Authorit-v rvithin prcscritred linrc
limit.

lflany a{'the aforcsaid requisitcs is missing. thc N'lAP requi:st shall not be cnnsidcrctl
valid and adrnissible. Where only the first requisite is nrissing. the competc"nt authoritl shall
relurnrthe documents sutrmitted by the taxpayer and noti$' himlher in tvriting ul' arrl.
deticieneies tha( need to be clarified, completed and sulrmitted.

MAP requests originating fiom a fbreign .iurisdiction shall comph with the l!{AP
-l'he
Guidelines set hy the said .iurisdiction. Philippinc Competcnt Authority' shalI not.

l)As in which trvc or more jurisdictions L:oncur.

Itauc 6 ol-lJ

ECORDS MG
htwcvsr. he precludetl liom either requcsting clarillcation or requiring the lirrcign {,'{}rnpclrnt
Authority lo submit additionaldocuments. if warranted,

"['he rcceipt
o{'a valid rcquesl lvill detcrmine thc start datc ltrr a MAP rcqucst or thc
ctmmlncement o{'the MAP proccss. lhis start date is rslevant lrrr thc purposc olcrmputirrr
thc time taken tn resrilve a l!{AP request nnd in tlctermining rvhcthcr lhc rcrptcsl rrus
prcsciltcd within thc time frame stipulatcd in {he t)lA. For this pilrposr;. a tulr\l} rrqutst rrill
nol be regardeiJ as initiated until all the re levant inlbrmatiern r*qucsted has been provirled.

If the MAI'request was presentcd bcltnd the prescrihcd tirnc linrit r"rr tftc l\.lAl'rcqucst
utterly lacks legal basis. the MAP requcst shall tre clnsed. and tarpa_v*r shrtll he notilit:d in
rvriting oflhc rcsult ard aclion takcn hy thc BIR rvithin thirt) (i(.)) dars liorn rccript thcrr:nl,

Z. Analvsis af r MAP Case

()nce a case that meets the rcquiremcnts ot'the trertl has hccn auceptcri. thc MAI)
Officr: musl delerminc rvhether the taxpaycr's *h-iection is-iustilieil. It is at this rtarc thtl llic
MAP Of{icc should commence a detailed analysis ol' thc IvtAP rec;ucst. ,,\s the t":asc
progresses, it is likely lhat there rvill he turther infbrmatinn rcqucsts. 'l"axpaycrs flrc cxpected
to crlopfrate lully with the MAP OfTlce hy pr*viding compleu and accur*tr: intirrmatiorr
without delal'when requested. As treaty- partners. mutual ccuperatit.rn and assis(ancs bclueen
compelent aulh{-}rities on this matler is highly cncr:uraged. Withnut prof}er informatiqrn and
documentstion. the IUAP Olfics rnay he unahle tn resolye disputcs.

After estahlishirtg that the ta.xpa),er"s r:h-iection is .iustified. the MAI'} OUj*e shall thr:n
detcrmine whethrr the Philippine ('ompetent Authr:rit3, could resolve the casil unilatcralll or
withaut the involvcmcnt ol'the other Conrpetent Authorit,v" Whcre the actiein that rcsLrhL in
taxation not in acceirelancc with the provisions ot"the DTA is duc in rvhr:le or in part tt a
measure .taken in thc Philippines. thc llhilippine Compctcnl Authoril-1, may decidc to rcsoh'c
it uniluterally. In doing $o" the MAP Olficc sh*ll crordinatc with thr olfice ot'thc tll[{ that
issuedlhe ruling or asscssment, i{'necessary.

(hr ths nther hand, if the MAP case is.iustitied but thc l,,hilippine Ceimpctehl Arrhorir)
cannot amivd at a unilateral solutian" the MAP case will move 1o the hilatcral stage rvhurc
both competent authorilies shall endeavor 1o resolve the case by mutual agreement or should
strive to find a solution on how the provisirrns of thc tax treaty should tre applied in thc gircn
situatiun. They are not, however. obliged to enter into an agresment fr)r each individual I'lAl'
case.

3. T
G*rsultatirns bctween the MAI' 'ram nnd other rffires of the lllll
'Ihe MAI, OlIce may cxchangc opinions rvith lhe relcvant ol'fice olthe tllR x'hcnevcr
necessary. "lhe latter is e.xpected tn cnordinate and complv rtith the request far in{irrmatirrlr in
a timely fianner so as not to clbstrusl the smo*th implemenlation olthe MAP pr*cess.

Where relevant. the MAP Olfice may rcquire the officrj thal rendered the assessmr:nt t()
fonvard the case docket or to share the rclevanl documrnts c.rplaining rhe derails ol"rhc
taxation.
l>

OF INTERNAL REVENUE
lruslc 7 ol l3

iut,l 30 ?*2
]}
RECORDS MGT. DIVISION
 4. (ionsultstions between the Comp€tert Authorities

Il'the laxpalsr's claim is.iustified *nd cannot hc rcsolved unilaterallv" thc l'hilippine
Compc{cnt Authority shall endeavor to resolve tht: uase with the ('onrpetcnt Authorilv ol thc
olhcr contracting state in a timell'rnanner. 'lir set in motion the hilrrteml stflge {}l^thc Mi\l'
proccss. the lormcr shall then notif),. the lattcr rf its receipt ol'thc l\'lAP requerl and its
intcntion {ei conduct bilatcral ccnsulta{ions lvith thc laltcr within thirtr {10} dals lrtxtt its
dctcrmination that unilateral resolution is not perssiblr.

Actual discussitllrs lcnding to the resolution ol-thc l!{AP requcst shall he l-rclrrcen lhu
urlmpetent $uthorities of thc cr:ncerned contracting stalcsi only. I'h(j d()nlpctcnt auth0riti(s
may hring along thcir MAP'l'carns including the tax auditr:rs rrho nradc tltc adiustmcnts.
'lht
rulc rrf'.the ta-x nuditors shall. ho*ever. lrc limitcd to clarit-ving thc lircts of' thc cusc antl
prr:vidirrg other hackground aralysis to assist the (lompetcnt Authoritie s in unelerrtarrding thc
case. I"hev should not he involved in the decision-making pr()L:riss.

It shall be thc dutl,ol'the Conrpetenl Authorities to notifl cach uther tl"lhr enriragctl
preserse erf the tax auditor. If u {.eimpetent Authority prelers to r$solve thq lvlAl} care
ri'ithout the tax auditnrs. such rcquest should hr respected h1' the othcr ('ompctent Aulhorit-r.

()n the othcr hund- thc involvement of'the taxpayer shall he limited rnli to prcrcntinr:
its views tCI the proprr csfipetcnt authorit)'and providing thc rclcvitnt inlirrrnation. \\ihcrr
appropriate. taxpa!'ers may bc invited to make a prescntation helcire the ('rrtrrpurtent
Authorities to ensure a common undcrstanding of'the {actr ol't particrrlar casc.

5. lt{elotiation of Bilateral or Multilateral AP.{s

"f{re
I}lR shall subsr;ribe to a commercial datahasc ft}r dctcrmining e:icrnirl c*mparlhle
in order that thc MAP "[eam w.ill be ahlc 1o ellcctivcly ncgeitiatc hilateral or rnilltilatcrll
APAs with tlre c()mpetent authority(ies) t:1'either -iurisdiction-s through tltc MAI) pr()ecsr-
l{orvever" if the MAP'l'eam finds that thc internal comparahl*s provided b1'thc 1$xpa\'cr or
the external cnmparahles lifled lrom proprietary dalaha$es are reliahle. it ma;- tlten rer i*r tltc
APA request flnd proceed with the MAP consultati$n.

Cl*mmercial datahasesl are developerl by.. edirars uho ceimpile accounls filecl hr
companies with rhe relevant administrative bodies and present them in an elcctronic lirnrrat
suitah6 for scarches and statistical analysis. while proprietary datahasesa arc developed rnel
maintained by atlvisory firms devekiped and maintaineri by advisttry finns.

If the taxpayer used a proprietary database to supp(rrl its translbr priccs" thc M:\P'lt*nr
shall he given *ccess to the said database lirr revierv and verification purposes.

A separute Regulations will he issued ftrr the APA Program.

I OrrC. l)"|-rtns&rr Pricing {iuidclines lirr Multinational l".ntcrpriscr and ['nr {r"lnrinis{rutionr (]i)lli- par;tgr;rph
1.3(), patee l5$.
' /d, aL px;tgraph 3,3-1. page 158-

BUREAU OF INJERMIREVE l)lrgr:8 r'1' lJ

{ iUI,l SO l[:;
]D
BEcodps MGi oivrsro
{t. Authorit_-v of the IIIAP Tearn

'l'he NIAI' l'r:urn shall havc tht authorit-v ta resolvr: \1AP uasts in:rccordtner: rrith thc
tcnns eil the applicahle and ell'ective []lA nith thc vie* oI elirninatins taxalion not in
accord;rnce rvith the prr-rvision thercol.'l"his is, horvever. vrithuul con.iitlcratitn to thc ptrlic"r
or policies that the I,hilippines would like r udopt in f ulurr negotiations and rencgolialionr
of D'l'As.

In recard to translbr pricing issues, ths ]vIAI'}l"cam rhall resolve thc illAI) ctrc
indcpendcntly and objcctively. i.e., rvithnut hcing int-luerrcr:d in anv mann$r hy thc ttr lrrditor
or examiner who made the ad.iustmcnts. ln nlhcr rvrrrcls. thc approval or dircclion of' thc
examin{:r whtr madt'the adjustrnents at issue is nut required to rcsolvc n fu1Al'case rr"sulting
I rorn transfer pricin g ad_i ustments.

7. Resolutior of a MAP Case

"l'he
l'eilft;w,ing are the possible outcomes nf thc Mi\l) pr$cess

".1. aecsss to MAP is denicd (i.e. nol an admissible request r.rr denicd Ior an) other rcasons);
h. objection is notiustified;
c. ob,icction is resolved via domcstir rcmerll':
d. unilateral relicf rvill he granted;
e. r:ompetent authority agreement lbr fLll $r p{rrtial e limination of douhle taraii{)n:
f. qompetent authority agreerncflt $tating that tlrere is no taxati*n not in rccordance u ith
ilie tax treat-v:
9.. no competent authority agrccnlent ir reachetl including rgreernent to disa[rcc: ancJ
h, any *lller outsome.
MAF Cascs shall he resolved rvithin an av$raflc timef'rame o1'24 mrtnths liunr reecipt rrl
a ccnrl:lete klAP requcst. This is dcpenclent" horvever. on the complexity olthe case- and lhe
cooperation of the taspaver and of the competent authorities-

8. (ompetrnt Authorily Agreement

Any agyeement reachcd between the competcnt authorities shall hc conrmunicalcd t(l
the taxpa.r'er within 30 days after the consultation cr meeting. The Philippinc C()mpqtunt
Authoritv shall give the taxpayer another 30 days rvithin rvhich to coilvc)' its,'his.iher
acceplance or tlisapproval to the mutual agreemext reachcd" If the competcnt authoritr.
agreement has been reiected ancl a valid nntice crf objection $r an appeal has heen lodg",1
under applieatrle domestic procedures. the taxpayer typically has thc option t() pr()c{c(l
thrr:rugh the appeal* prccess andlor to courl. if applicable. lf the other redress mechunisrrr
(appe-d or c$ur1 decisi*n) does not reverse lhe.iudgmcnt in its errlirel-v. double t:rratirrn rrrar.
rcmain.

9. Timely'implementation of lltAP Agree meilt$

If the taxpayer cnnfirms in writing its acceptance r;f the mutual agrecment reachcri b1
the ccmpetent authorities, the Phitippine Compctentr Authoritl' shall give rillbct to such
mutual ryr$ement and ensure its implementation withoul tlcla1,.
OF INTERNAL REVENUE

ff' JUtt 30
llrrgr 9 r{ 1,1

rtrG l. t)tVlSlON
 In cases where a rcfund is due tr: thc taspay'er. the taxpal'er shotrld hcgin tlrc prtrces: ttf
obtaining the refirn( lirllorving thc prcrccdures prcscriLred unclcr eristing revenLre issuane cr'
In
case theie is a pnrvisiun in thc lr,lAl'Axicle nf thc rclevant I)'IA on thc implemcntation
ol"

thc MAP Agreement. then. the MAP Agreeffienl ma) hc implcmcnted pursuanl to the
('odc
provision 6{'ihe DI A notrvithstanding any'tirne lirnits in the l'.lational lntcrnal ltevcnttc
t:f lg9"l {'l"ax Corlc}, as arnentlccl. Ilorvcver, in case ths rclevant l)'l'i\ is cilcnl as tr) thc
periorJ of implementation ol the MAP Agreemcnt. then the illAP Agrcctncnl shall lrc
('ode .
irnplemented pursuant to lhc rIomeslic stalulc ol'limitation under the I ax

Where during thc lv,tAP proccss. the elornestic statulc ol'limitalions rvill crpirc ultich
('otnpetcnt
ma-v rhen al'fect tlie p6ssibili6.' to implerrcnt a MAP agreement. the l'hilippine
Authority shall imrnediately notit-v its treaty partfier of such lact'

10. Competent Authorif,v Agrccment hrs not bcen reached

the cr:mpetcnt authoririe$ are not able to reach an agrccment. thc I'hilippinc
lf
competent authority will notity the taxpayer in writing within 30 da1's alier the consultation
6r mecting, citing the ,*r*ons therefbr. 'I"he taxpayer ma)' pursilr any availnhlc dnmcstie
remedies after receiving such notice'

11. Inter*etion with Domestic Remedies

.b-

*. ,Iudicisl or other administrutive appeals versus MAP

MAp arsistance may be requested irrcspectivc of the rcmedies provirietl hi' the
domestic la*s 6l'the Philippines. Thus. a taxpa)'er can request MAP assistancc littm
thr:
philippine C6mpetcnt Autirority cven in situations u'hers there is a pencling judicial ttr
bccn
administrative appeal and even where a decision, ruling nr linal a$se$smcnl has alrcadv"
rendered hy the competsnt ofllcials of the Illlt.
h

must bc cmphasized. horvever. that a MAP case cannot proceed sinrtrhancotrsll with
ft
proc(:ss
the etetenninatian oiju{icial err other adminisrrative appeals. Depending npon which
is ch6sen. the other process should be held in abeyance pending the outcome nl' thc first
proce$$. Thds, if a.iudicial or administrative proceeding is ongoing. the tftxpil)'cr is dutl-
ir'und tet notify the L'tmpetent Authority of such lbct and r:f its decision whethcr to suspcntl
the resolution bf th" MAI case or the judicial or administrativc prrrceedings' ll'tht lnrpil-\'cr
Authorit.v
does not want to suspend the adminiitrative or.iudicial remedies. the Competent
rvill have tn hold in abeyance the MAP process pending the outcnme of the l"ormer'

on thc othcr hancl. the ra,\payer $pts 1t.} suspend thc administrative or .iudicirl
tf.
pr6ccedings, he/shelit shall suhmit a proof of sush suspension to the Compctenl ,{ulhori{}.
such as a <tuly issueri orclcr or resolulir:n r:{'suspcnsion fronr thc BIR. or thc court" I{'the
Competent Auttrorities cannot reach an agreement thnrugh the MAP proccss or il the
taxpayer re.iccts the agreemcnt belrveen the Competent Authorities. the taxpa)'er caR lhcn
puir* and proceed with any available domestic administrative or.iudicial rentedics'
b. Caurt decisions connot be ove rruled through MAP

W . '":L ert 0F |n,'IERNAL REVENuE ltage l0 nl'lJ

(rhi)S MGT. DIVISION

 Sectign I ("ivil (loilc 6f thc I'hilippines statcs that juclici*l dscisions applling nr
erl'the
interprering thc larvs or the Constitution shall fbnn n parl {}l'lhe legal slstern nl'thc
Ilhilipfrind. Such interpretations cr,rnstitute part oi'the ltrr as ul'the date it u'ils origin*llr
passed. since thc Supreme fourt's constructiurr mertll' eslahrlishes thc conlctnp()rnilc(]tl,q
icgislqlive intent that the intcrprultetl larv carrictl into eflect.i I,I(l\\tver. $hcn t tJoclrine ol'tht
("6urf is overrulcrl and a differont vierv is adopted. and tttore sti uhen thcrc ir a rrrerqtl
therel{. thc nerv tloctrine shauld hc npplied prospeclivcll'and shouL"l not apfl} lo parties ult,'
relied on the t:ld doclrinr and acted in st"lod taith."
-l11us"
oncc a taxpayer's liabilit,v no, O*.n linatly'ctcterrnincd h1'thc court^ thc lllR shall
be bounrl h.v thc said dccisir,rn and shall nei longer provide turther rclicl"lhrotlgh \{:\P. In no
case shall the Philippinc Competent Authority he allcw'ed Io devilte lronr I tlotnc$lit r:trltrt
clEcisicxr. Sirnply put" only issues neit decided h.v the court u,ith llnalitv nill hr"" discttrstd in
the M^4P proceedings.

r. Flffcct of decinions rendered hy fareign cnurts

While the Bllt is hound b1, the tlecision of Philippinc courts. il is nol. howcvcr. lrottttl
'T'hc
by a decisir:n givcn b1.' a lbreign court or ailminisrative tribunal. I'hilippitte ('ontpctcnl
Authorit-v- ma1 choosc to unilateral13' provide relie{' if requelted hl the taxpit}'e r und lo lhc
extent deentcd appropriate hased on the merits of the case'

d. $uspension of Tax Collection

ln arjdition to the minimum inlbnnation mcntir:ncd in Scction 5{3Xa}^ ll tarfitrrr
sceking iirrther rccourse through MAP shall indicate' in thc MAI'requcsl. 'l'hc if'thcrc is a la:
n$scssment involvsd, the suspensitx ol the collection cl sueh taxcs. ('on'rpulcnt
Authority', in acting uprn such MAP request- may grant thc requcsted susfcnsi{]n (rf

collectinn pursuant to the Tax Cade and its rclcvant ntlcs anrJ re{ulati*ns"

the elecisirxt in the MAP (MAI' Dtcisit'rn) casc upholds thc tax liuhilitl ol lltr-:
If
taxpay,er. thr enlorcerncnt of tax coll{:ctirrn shall btgin to run again after lhc dirtc thc M,{l}
Decisi6n ha{ been relcased" mailed or seflt by the BIR to thc rrlgistered addrcss ttl" thc
taxpaYer.

12. \tr/ithrlrstryal 0f s MAP Case

il taxpayer wishes to wilhdraw a MAP request. he/shelit shall prurnptlS notii"

Where
the Cornpetent Authority tll which the request rvas subrnittcd of the rvithdru*al ol'its il!,{l'
requ€$l, 'l'his nntificittion shoultl include the re*son lirr the rvithdrawal {c.g. rcsolution ol"thc
issue *trough domestic remedies).

l3- Apprnpriate Transfer PricinSl Atljustment untler the DTAs

'T'ransfer pricing ad.iustmcnt rslers to thc corrcspt-urding adiusttrcnt t)f prcrlits rt*ulting
frorn irtsrnatinnal dealings trelrvsen associatcd cnterpriscs u'hich lvcrc not cnntlucted at
arm's lengJth- This may occur. lbr example. lvhere a taxpa\er sctth,'s a disputc unilatcrallr

:'ltu;up $enerilhrs vr. I:.pillrnio llcnnosisima. et. ai.. (i.R- No. l.-lt)6{12. Dcccrnher l*' lt}56
("olunrhia Pictun s. lnu. r. (lourt ol' Appeals, C-R. Ntr' l l03 l 8' Augtrrl :l{. l9()6,
"
Itaae ll ol l.t
EU6T[
',U OF II"JTERNI.L REVENUE
 (ttmpelcnt ;\trthorilr ' i'c'
rvith the lbreign tax administration rvithout invtllvins thc I'}hilippirtc
the ffirpayer 1as agreed to the adjustment that was raiscel hy' the {brcign ttr atrthori$
anri hlts
paid ttr additional foreign tax rcsulting fnrm such adjuslrnent.

'l'he philippines cernsitjers lhat econornic clOuble taxation resulting tiom thc irtclusion til'
pr0lits nl ass0ciatcd cnterpriscs is not in acc<lrdancc rrith thc ob,icct anrl purposc ol'titt
ireaties antl ialls rvithin the scope of thr MAI'trticlc.'fherclirre. ilthe articlc
on tssoeialetl
enterprises erf the relevant t)TA contains a pntvision on transfi'r pricing ad.lustment'
the
or grant access t* MAP rr"ilh rcspect t<i thc
'that acljustnrents
Ilhilippines rvill mitkc corresponding
econeiffic rlouble taxation rna,v- olheru,isc result from a primtn lranstl'r pricing
adjustnrenr. In cases rvhere the rihjection the texpaver is .iustillcd. thc llhilippinc
o1'
C6mpetent Authority rnay provitle lbr correspontling arl"iustmLrnls trnilntcrally-
lhc purpusc rtl"
such adfustmcnt is to irovide thc I,hilippine talipa)"rr \1ith fiom double til\itti()rr
.relict'
administratit:tr antl accuptcd hY thc
resulting from an acl.iustment initiated bl"the foreign tax
taxpa)'er.

MAP r(-rqucsts involving lrafl$fcr pricing ad"iustments will hc rcvie$cd c\tsntiYch

hased on the inl'ormation anrJ <Iocumentarion provided bl the tarpa)'er. and a correlittive
ad_iustment tp the profits 6f the taxpayer shall be nracle only tEr the extent
that the llhiliPpirrc
CCImpsteol rtuthoiity consitlers the ntliustment to be at arm's length, Whcre.
li'rllorving th*
rsvicrf" the philippine Cgmpetent Authoritl'ilgree$ tt'r the rvhole tlr part trl'a lransfrir-pricinu
adjustrnent made'tr1,the ftlreign tax authtirit-v. thc li-rnner musl ttbluin a conlirrnation
Intm thcr

larter that tax has heen paid on the said adiustment.

()n paragrflph l{ ol'
Where refun<J is due. the taxpa-*-er shall tre guiderl b1' the discussion
this Scctir:n^

liecticn 7. Autlit Settlement

&udit settlements reachecl between the tax authorit-v ansl the laKpa-v€rs d0 not ;lrcclutlu
acce$$ to MAp" If a MAl, request has been initiated aller such audil scttletllcnt"
thc
r'vould
Irhilippine cQmprtent authority should inclepcntlently con.sider,whethcr such scttlcmcnt
resuli ln hxaticrn not in accordance with the preivisions of thc Convenlion'

,46er all. the c*rnpetent aurhority must ansure that ta.tpavers entilled lo trtiatv hcne llts
are nq1t subjeclecl to Lrxation by either of the Conr*cting Parties rvhich is nttt in {rcc'.trdanee
with the provisicns of the DTAs.

Scctidn 8. ConlidentialitY
'fhe information prgvided antl docunrcnts suhmitted in suppnrt r:f thc Mi\P reqtrcst shitll
-l'nx ('otJe"
be ryeateg with utmost cpnfi<Jcntiality pursuant to Section ?7CI ol'lhe
as amcndrld.

qrut in
Any excharge of infurmation between the competent authoritics shall h* carricd
accordance rvith the prgvisions r:f lhe relevanl DI"A, Infirrmation cxchanged pursttant tir thc
eilbctive Dl"As of the Philippincs is conl'idential and shall r:nlv lre used and discloscti irt
acconlanee with the provisions of the relevant I)'l'A.

{ lltgc l! rri'lJ
 Seetiitr 9. Repealing Clause

i\ll existing rcvcnue issuanccs or prirtions th*rcclf inconsis{ent hr":rervith arc hcrchr
revakcd anel/or anrcndcd acccrdingly.

$ection I tl, Effcctivi{v

'l"his Regulations slrall take ellbct aftcr filiecn (15) dl-vs lirlloning its puhlicatiott itt a

nervspafler ol qeneral circulaticn.

('ARffls (;. DOII llt*j(;t :

Sccretary ol'lrinancc

Recommending appnrva I:
JrJil i $ t0t2

r&ff4J\"-Le''\
{:arsa,r R. L}IJI"AY
Commissionrr oi' lntemal Revenue

Q52135

REC ORDS MGT. I) IVISION

['ir$.e lJ ol t-1

r-"-