MANILA — The Philippines and the United States entered into an agreement to reduce offshore tax evasion and promote transparency under the latter’s Foreign Account Tax Compliance Act.
“The Philippines continues to stand at the forefront of fiscal transparency across the Asia-Pacific region, reaping measurable returns for our people,” Finance Secretary Cesar Purisima said.
The agreement signed with US Ambassador Philip S. Goldberg aims to reduce both tax evasion and avoidance.
“Tax evasion across borders is an alarming problem that we can beat back with openness and mutual cooperation. This (intergovernmental agreement) is an affirmation of that ideal,” he added.
The deal will allow automatic reporting of financial accounts held by US persons in the Philippines to the Bureau of Internal Revenue.
The reports will then be relayed to the US Internal Revenue Service.
“By working together to detect, deter, and discourage tax abuses through increased transparency and enhanced reporting, we can help to build a stronger, more stable, and more accountable global financial system,” Goldberg said.