Press Release
February 19, 2018

Senate concurs in PHL's Double Taxation Avoidance Treaties with Mexico, Thailand, and Sri Lanka, Cybercrime Convention, and Agreement Establishing AMRO

The Senate adopted today three resolutions expressing its concurrence to the ratification of an agreement for the avoidance of double taxation between the Philippines, the United Mexican States, the Kingdom of Thailand and the Democratic Socialist Republic of Sri Lanka.

Sponsored by Senator Loren Legarda, chair of the Senate Committee on Foreign Relations, proposed Senate Resolution No. 613, concurring in the ratification of the agreement for the avoidance of double taxation between the Philippines and the Government of the United Mexican States, was signed in Manila by President Rodrigo Duterte on November 15, 2017. The Department of Foreign Affairs (DFA), Department of Justice (DOJ), the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) endorsed the same.

The agreement with the Government of the Kingdom of Thailand (SRN 615) was signed on June 21, 2013, while the agreement with the Government of the Democratic Socialist Republic of Sri Lanka (SRN 617) was signed on December 11, 2000.

The Double Taxation Avoidance Agreements (DTAAs) seek to deepen economic relations between Mexico, Thailand and Sri Lanka by enhancing their cooperation on tax matters.

According to Legarda, DTAAs intends to promote international trade and investment "by allocating taxing jurisdiction between the Contracting States to eliminate or mitigate double taxation on income".

"They are widely pursued by countries to avoid a situation of discouraging cross national economic activities," Legarda said.

"The DTTAs also aim to create a competitive advantage for each country's residents by removing or reducing source taxation, encourage investors and promote the inbound transfer of technology and skills," Legarda added.

The Senate also adopted SRN 614, concurring in the ratification of an Agreement establishing ASEAN+3 Macroeconomic Research Office (AMRO), and SRN 616, concurring in the Convention on Cybercrime. Both resolutions were also sponsored by Legarda.

SRN 614 constitutes AMRO as an international organization and grants legal personality, privileges and immunities to the AMRO's principal office, officials, staff and experts in the territory of each member state to enable AMRO to effectively fulfil its functions.

AMRO is the regional macroeconomic surveillance unit of the Chiang Mai Initiative Multilateralization (CMIM), a multilateral currency swap arrangement between ASEAN+3 members, established under the agreement signed by the ASEAN+3 Finance Ministers and Central Bank Governors that came into effect on March 24, 2010.

It seeks to contribute to securing the economic and financial stability of the region through the conduct of regional economic surveillance and by supporting the implementation of the regional financial arrangement.

Duterte signed the agreement on January 6, 2017.

SRN 616, meanwhile, aims to address the threats posed by cybercrime and facilitates multilateral cooperation and enhanced collective capability to suppress cybercrime.

According to the resolution, the Convention on Cybercrime, signed in Budapest, Hungary on November 23, 2001 and signed by Duterte on December 9, 2016, "remains the sole binding international legal mechanism adopted by countries to address the threats posed by cybercrime".

"The Convention takes into account the existing conventions on cooperation in the penal field, as well as similar treaties which exist between member states," the resolution said.

"The present Convention is intended to supplement those conventions in order to make criminal investigations and proceedings concerning criminal offenses related to computer systems and data more effective, as well as to enable the more efficient collection of evidence in electronic form of a criminal offense," the resolution added.

According to Legarda, a major feature of the Convention is the track towards the harmonization of domestic legal procedures of state parties, with the intention of, among others, addressing the emergence of so-called "safe havens". These "areas", she said, are created when certain activities are not criminalized in a specific country. This results in individuals and/or organized groups being able to act with impunity in committing offenses in these countries.

"This treaty is very important to protect our people from cybercrime especially since the country is the number one haven for those committing child pornography," Legarda stressed. (AYA)

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