The Department of Finance (DoF) announced the signing of an agreement between the Philippines and Brunei Darussalam aimed at eliminating double taxation and combating fiscal evasion on taxes on revenue deriving from cross-border transactions between the two Southeast Asian countries.
In a statement on Friday, it said on behalf of their respective governments, the agreement was signed on the same day by Finance Secretary Carlos Dominguez 3rd and Yang Berhormat Dato Seri Setia Dr. Awang Haji Mohd Amin Liew bin Abdullah, the minister at the Prime Minister's Office and minister of Finance and Economy II of Brunei.
"This agreement will serve us well as we bounce back from the ravages of the global health crisis. It will further ease trade in goods and services between our two countries," Dominguez remarked at the signing.
He went on to say that the deal will strengthen economic cooperation between the Philippines and Brunei, as well as increase investment flows and economic activity beyond their borders.
"Rest assured, we will work to continue and deepen the coordination between our respective tax authorities in ensuring the proper implementation of the agreement and the enforcement of relevant tax laws," he emphasized.
"I look forward to heightened cooperation between our two countries as we both exert all our efforts to recover from the pandemic and rebuild the best possible future for our two peoples."
According to the DoF, the double taxation agreement (DTA) will enhance the Philippines' commitment to the Asean Forum on Taxation's goal of completing a network of double taxation agreements among the Association of Southeast Asian Nations or Asean.
It also said that, in addition to improving bilateral relations with Brunei, the DTA is expected to create more jobs for Filipinos in both countries, as addressing the negative effects of double taxation can help bring in more foreign direct investments from Brunei to the Philippines or place Filipino workers in Brunei.
The Finance department added the DTA is also expected to facilitate the transfer of technology and skills between the two countries.
Negotiations on a DTA between the Philippines and Brunei began in Bandar Seri Begawan in 2001 and were renewed in Manila in 2010.
On Aug. 5, 2017, a draft of the agreement was eventually approved after a series of negotiations and correspondence. On May 24, 2019, the DoF approved the signing of the DTA.
The Department of Foreign Affairs endorsed the issuance of full powers to the Finance department to sign the agreement to the Office of the President last July 12.