Philippines moves toward 15% global minimum tax

The Department of Finance and Bureau of Internal Revenue convened the first meeting of the Technical Working Group on proposed Global Minimum Tax legislation and implementation.

The July 7 meeting at the BIR National Office in Quezon City formally launched interagency efforts to develop the country’s legislative, administrative and technical framework for the proposed tax regime.

The TWG serves as the primary interagency body coordinating the development, review and eventual implementation of the legislation, regulations and administrative measures needed for the Philippine framework.

DOF Undersecretary Rolando T. Ligon Jr. chairs the group, while BIR Commissioner Charlito Martin R. Mendoza serves as vice chair.

Its members are DOF Undersecretary Karlo Fermin S. Adriano; DOF Assistant Secretaries Juvy C. Danofrata and Euvimil Nina R. Asuncion; BIR Deputy Commissioners Larry M. Barcelo, Marissa O. Cabreros and Vener S. Baquiran; and NTRC Executive Director Mark Lester L. Aure.

“Our task is to thoroughly address legal, tax, administrative, and operational issues involved and ensure that key policy decisions and recommendations are thoroughly studied before they are advanced,” said Undersecretary Ligon.

During the meeting, the TWG established its organizational structure and created five specialized technical subgroups.

The subgroups will lead work on the legal framework, tax administration and compliance, capacity development, stakeholder engagement and post-implementation monitoring.

“More than drafting legislation, the work ahead involves preparing the administrative processes, digital systems, technical capabilities, and institutional arrangements needed to implement the framework effectively and provide clear guidance to affected taxpayers,” said Commissioner Mendoza.

The TWG also identified priority areas for technical assistance to strengthen the country’s readiness for implementation.

These include assessments of the BIR’s compliance, audit and taxpayer service capabilities.

Other priorities include institutional arrangements, policy and legal capacity building, administrative and operational readiness, information technology systems interoperability and secure information exchange.

The group also identified legislative workshops as a priority.

Members reviewed updates on stakeholder consultations and discussed participation in international mechanisms for exchanging Global Anti-Base Erosion Information Returns.

The GloBE Information Return is a standardized filing intended to support compliance with and administration of the global minimum tax rules. The OECD has developed technical systems for the automatic exchange of these returns among tax authorities.

The TWG also discussed the proposed inclusion of country-by-country reporting requirements in the legislation.

An OECD peer review published in 2025 reported that the Philippines had not yet introduced domestic requirements for country-by-country reports or established exchange relationships for them.

“As a member of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, the Philippines must undertake the necessary policy and technical preparations for the possible implementation of the global minimum tax through appropriate domestic legislation,” said Undersecretary Ligon.

The Philippines joined the OECD/G20 Inclusive Framework in November 2023 and committed to participate in the Two-Pillar Solution addressing tax challenges arising from the digitalization of the economy.

Under Pillar Two, multinational enterprise groups with annual consolidated revenue of at least EUR 750 million would generally be subject to a minimum effective tax rate of 15% in each jurisdiction where they operate.

The OECD says the framework is intended to reduce incentives for profit shifting and help jurisdictions protect their tax bases.

“The DOF and BIR will continue working closely with partner agencies, Congress, development partners, and stakeholders to develop a Philippine Global Minimum Tax framework that is aligned with international standards, administratively workable, and responsive to the country’s fiscal and investment policy objectives,” Commissioner Mendoza said.