With the appointment of Caesar Dulay as the new BIR Commissioner comes Revenue Memorandum Circular (RMC) No. 69-2016 which suspends the effectivity of all issuances promulgated and issued during the period of June 1-30. Among the list of suspended issuances is Revenue Memorandum Order (RMO) No. 27-2016, issued on June 23, which detailed the (supposedly) new procedures on claiming reduced tax treaty rates.

The Philippines is a signatory to over 40 tax treaties. These tax treaties lay down conditions for nonresident income recipients to qualify for a tax relief on various types of income. Relief may either be in the form of a tax exemption or a lower preferential tax rate. As mechanisms to confirm entitlement of tax reliefs, the BIR issued several Revenue Memorandum Orders (RMOs), RMO No. 27-2016 being the latest. All with the end goal of improving efficiency and service to taxpayers.

Tax treaty relief application: What to do now?