The Philippines evaded being flagged as a “harmful” tax economy by a global policy forum for enacting a law eliminating preferential rates on regional operating headquarters.
The finance department said the country would be removed from an Organization for Economic Cooperation and Development list of economies that extend discounted taxes to regional operating headquarters.
The OECD’s Forum on Harmful Tax Practices granted the DOF’s request to change the country’s ROHQ assessment to reflect amendments on the fiscal regime due to the passage of the Corporate Recovery and Tax Incentives for Enterprises Act.
Finance Undersecretary Antonette Tionko said the country would now be labeled as “potentially harmful but not actually harmful” until December 31, and declared “abolished” by January 1.
Under the setup, tax benefits are awarded to foreign firms, which the forum finds disadvantageous to local investors.