16 September 2013 – Finance Secretary Cesar V. Purisima, on behalf of the Philippine government, signed the Philippines-Germany Double Taxation Agreement (DTA) on September 09 at the Federal Foreign Office in Berlin. The updated Double Taxation Agreement will further spur the Philippines’ burgeoning economic relationship with Germany by reducing the tax burden of Filipino and German investors.
The DTA is expected to reduce tax impediments to cross-border trade and investment and will enhance mutual cooperation on tax evasion, particularly by improving the exchange of information between Philippine and German tax authorities. The agreement will also enhance mobility by directly benefiting citizens residing in each other’s countries. This, for example, would allow Germans in the Philippines to avail of tax relief and would potentially stimulate technology transfer from Germany to the Philippines.
Both sides noted that the Double Taxation Agreement is an important step towards elevating bilateral relations to a new level. During policy discussions following the signing ceremony, Secretary Purisima and senior officials of the Federal Foreign Office explored the future direction of relations, including technical cooperation on finance-related matters. Secretary Purisima suggested that both countries work together on the global stage to address shared challenges, such as combating tax evasion and promoting disaster risk insurance. Secretary Purisima has proposed the creation of global system of a Tax Identification Numbers (TIN). The Philippines is also currently working with the Asian Development Bank on a pilot earthquake insurance facility and is eyeing the creation of a regional insurance pool. Germany, for its part, is supporting joint European Union (EU) action against tax evasion and tax avoidance.
Germany was recently affected by intense flooding in June 2013 while the Philippines ranks as one of the most disaster prone countries in the world.
Secretary Purisima’s visit comes on the heels of high-profile exchanges in recent months that have included separate visits of Vice President Jejomar Binay and Foreign Affairs Secretary Albert del Rosario to Germany and German Foreign Minister Guido Westerwelle and Labor Minister Ursula von der Leyen to the Philippines. The Philippines and Germany will be celebrating 60 years of diplomatic relations in October 2014 and both countries are looking towards more high value engagements in the coming months. END