BIR consults public on advance pricing agreement program

By Francis Allan L. Angelo

The Bureau of Internal Revenue (BIR), led by Commissioner Romeo D. Lumagui Jr., held a Public Consultation on August 28, 2025, at its National Office in Quezon City to present the draft Revenue Regulations (RR) for the Advance Pricing Agreement (APA) Program.

The consultation gathered representatives from multi-sectoral groups, large taxpayers, tax practitioners, and other concerned stakeholders.

The APA Program aims to allow taxpayers and the BIR to agree in advance on the appropriate transfer pricing methodology for related-party transactions to minimize disputes and reduce double taxation risks.

Chief Robbie M. Bañaga of the International Tax Affairs Division (ITAD) presented the draft RR, which outlines requirements, guidelines, and procedures for the APA Program.

In her presentation, Bañaga highlighted that the APA Program can prevent prolonged transfer pricing audits, ensure compliance with the arm’s length principle, and foster trust between taxpayers and tax authorities.

Commissioner Lumagui stressed the program’s importance in creating a fairer tax system.

“We want to provide certainty to businesses while at the same time protecting the government’s revenue base,” Lumagui said.

“The APA Program is not only a tool to prevent disputes but also a mechanism to build confidence between the BIR and taxpayers,” he added.

Lumagui further assured that the Philippines is aligning with global standards in tax administration.

“The Philippines is ready to join the international community in advancing effective transfer pricing administration,” he said.

“By implementing APAs, we are sending a clear message that our tax system is modern, transparent, and business-friendly, without compromising our mandate to collect the right taxes,” Lumagui added.

During the Open Forum, participants raised questions and gave feedback on processes such as pre-filing, application, negotiation, and compliance monitoring.

BIR officials said all comments and suggestions would be reviewed and considered before finalizing the regulations.

The issuance of the final RR is expected to institutionalize a structured mechanism for resolving complex transfer pricing issues.

The initiative supports broader government efforts to strengthen tax compliance, attract foreign investment, and enhance the country’s competitiveness in the global business landscape.