The Philippines’ Secretary of Finance issued Revenue Regulations (RR) No. 02-2013 – the transfer pricing regulations – on 23 January 2013, which became effective from 9 February 2013. The new regulations provide guidance in applying the arm’s length principle to cross border and domestic transactions between related parties.
According to RR. No. 02-2013 taxpayers will have to keep appropriate transfer pricing documentation so that they can defend their transfer pricing analysis, prevent transfer pricing adjustments arising from tax inspection and support their applications for the mutual agreement procedure (MAP). The documents will have to be keep for a period of three years and submitted to the tax authority (BIR) when needed. According to the new regulations advance pricing arrangements (APAs) and mutual agreement procedures can be used under it and the BIR will issue different guidelines on APA applications and the MAP process.
