Philippine tax authority issues guidance on the use of the new transfer pricing disclosure form
The Philippines’ tax authority, the Bureau of Internal Revenue, recently issued new Revenue Regulations No. 19-2020 dated July 8 2020.
The Philippines’ tax authority, the Bureau of Internal Revenue, recently issued Revenue Regulations No. 19-2020 dated July 8 2020 prescribing the (1) use of the new BIR Form No. 1709 or Information Return on Related Party Transactions (Domestic and/or Foreign), replacing BIR Form No. 1702H – Information Return on Transactions with Related Foreign Persons, series of 1992; and (2) submission of BIR Form No. 1709 and supporting documents (described below) as attachments to Annual Income Tax Returns.
This issuance aims to ensure that proper disclosures of related party transactions are made and that these transactions have been conducted at arm’s length so as to protect the tax base. It also enjoins tax examiners to conduct a thorough examination of the related party transactions and see to it that revenues are not understated and expenses are not overstated in the financial statements as a result of these transactions.
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