Japan and the Philippines have agreed in principle on a new tax convention to replace their decades-old double taxation treaty, in a move officials said would modernise rules for cross-border investment and trade between two of Asia’s closest economic partners.
Negotiators reached the initial understanding after formal talks in Manila from Jan. 27 to Jan. 30, led on the Japanese side by Minister for Economic Affairs Naobumi Yokota and officials from Japan’s Ministry of Finance, according to the Japanese embassy in the Philippines.
The Philippine delegation was headed by Department of Finance assistant secretaries Dakila Elteen M. Napao and Euvimil Nina R. Asuncion, alongside Bureau of Internal Revenue deputy commissioner Larry M. Barcelo, the embassy said.
The renegotiation covers the “Convention Between Japan and the Republic of the Philippines for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income,” and both sides held what the embassy described as substantive discussions on key treaty provisions.
The Philippines’ Department of Finance said the updated double taxation convention was finalised after a single round of formal negotiations, and is intended to keep bilateral economic ties aligned with an evolving global business environment by providing a clearer and more equitable framework for how income is taxed for citizens and residents of both countries.
Officials framed the revision as the first substantive agreement in nearly two decades to update the treaty, with the goal of creating a more predictable investment climate while ensuring fair taxation for Japanese and Filipino companies and individuals.
The agreement in principle still needs to go through each country’s domestic approval process before it can take effect, according to reports citing the finance department.
The talks come as Japan and the Philippines mark the 70th anniversary of diplomatic relations, with both governments pitching the treaty update as part of a broader effort to strengthen economic cooperation alongside their expanding strategic partnership.
Business News Asia
