The drive of the Bureau of Internal Revenue (BIR) against the transfer pricing policy of some multinational companies has gained support and assistance from the Japanese International Cooperation Agency (JICA).
Revenue Commissioner Romeo D. Lumagui, Jr. said this was expressed during his recent meeting with JICA representatives headed by Sakamoto Takema.
Transfer pricing involves the overpricing of goods and services delivered by multinationals to their subsidiaries operating in the Philippines.
Through this modus, the profits supposed to be generated by local sister companies are repatriated to mother unit, which in turn, substantially reduces the former tax payments.
The main frameworks of the work plan for the proposed institutionalization of an International taxation service was thoroughly discussed during the conference which included the actual transfer pricing practices. seminars, knowledge-sharing.
Currently, JICA and Asian Development Bank have been working together for the conduct of an interactive workshop on mutual procedure for the BIR to educate concerned revenue personnel on advance pricing arrangement and assessment.