Press Releases

Makati City, Philippines – The European Chamber of Commerce of the Philippines (ECCP) held its inaugural 2026 Tax Forum on 13 August 2026, bringing together tax experts, business leaders, and officials from the Bureau of Internal Revenue (BIR), to discuss the latest developments in tax administration, compliance, and digital transformation.

Held under the theme “From Preparation to Protection: Navigating Tax Compliance in a Changing Landscape,” the forum provided businesses with practical insights on pre-filing preparation, regulatory updates, audit readiness, and emerging tax frameworks. The event forms part of the ECCP’s continuing efforts to support companies operating in the Philippines by facilitating timely discussions on policies that impact the business environment.

In his welcome remarks, ECCP Vice President Ruben Camba emphasized the importance of fostering collaboration between regulators and the business community to promote transparency, strengthen compliance, and enhance the country’s investment climate. He also highlighted the Chamber’s commitment to supporting reforms that improve ease of doing business while ensuring a fair and efficient tax system.


BIR outlines strategic priorities for a modern and transparent tax administration

Delivering the keynote address, BIR Commissioner Charlito Martin “Charlie” Mendoza outlined the Bureau’s strategic priorities for 2026 and the years ahead, including its Digitalization and Revenue Enhancement initiatives. He identified four commitments guiding the BIR—relatability, simplicity, fairness, and partnership—supported by its five-point reform agenda.

Among the reforms highlighted was Revenue Memorandum Order (RMO) No. 1-2026, which revised policies and procedures for tax audit and assessment to strengthen transparency, due process, and accountability. Commissioner Mendoza also discussed the Registered Business Enterprise Taxpayer Service (RBETS), introduced under the CREATE MORE Act to provide registered business enterprises with a more centralized and responsive tax administration service.

Commissioner Mendoza emphasized the need to balance revenue collection with fair governance and taxpayer trust through transparent, targeted, and service-oriented enforcement.

“We want honest tax payers to have confidence in the system, and we want deliberate tax evaders to know that enforcement is becoming more targeted, data-driven, and harder to avoid,” the Commissioner said.

“That is the balance we are pursuing: clear against evasion, but fair to tax payers who comply,” he added.

The Commissioner also highlighted the BIR’s digital transformation, including the issuance of nearly 420,000 digital team IDs through the eGov app and the expansion of digital services covering registration, filing, payments, taxpayer information, and tax clearances. These include a centralized taxpayer portal, simplified income tax filing, QR-enabled registration certificates, streamlined import transactions, and easier business closure procedures.

On taxpayer relief, Commissioner Mendoza cited the One-Time Tax Abatement Program, extended filing and payment deadlines during emergencies, and clarifications maintaining VAT exemptions for qualified subsidies, including the Lifeline Subsidy, and Green Energy Auction Allowance. The BIR has also updated its list of VAT-exempt medicines to include 2,277 FDA-enforced products.

“Fairness demands credible enforcement. Effective tax administration is not simply about collecting the highest amount possible. It is about building a system capable of generating sustainable revenues over the long term. And that requires trust. It requires all-time compliance. [...] That is why revenue collection and tax payer service are not competing objectives. They reinforce each other,” said the Commissioner.

He further shared: “The BIR cannot determine every factor affecting investment, but we can certainly do our part. And our part is to make the Philippine tax system more predictable, more efficient, more transparent, and easier to navigate.”

BIR highlights audit, digitalisation, and pre-filing compliance

Building on the Commissioner’s priorities, Deputy Commissioner Marissa O. Cabreros of the BIR’s Strategic Reforms Group discussed reforms to make tax administration more predictable, objective, digital, and accountable.

She highlighted audit reforms aimed at making the process more consistent and transparent, including electronic Letters of Authority, data-driven audit selection, standardized document requirements, and industry-specific audit checklists for large taxpayers. She also noted that taxpayers may verify the authenticity of audit authorities and that VAT audits are now integrated into a single audit approach.

Cabreros also stressed the 31 December 2026 deadline for electronic invoicing and the continued development of the BIR Taxpayer Portal, which will provide access to registration details, filed returns, payments, and other account information in one place.

She urged businesses to strengthen pre-filing readiness by reconciling financial statements with tax returns and BIR records, documenting unusual transactions and variances, and ensuring that registration, books, and invoicing systems accurately reflect business operations. She noted that many avoidable penalties stem from process and documentation gaps rather than the tax itself.

Digital services and cross-border tax rules

The forum also examined the Value Added Tax (VAT) on Digital Services, with Mr. Glen Alde, Chief of the Collection Programs Division and Head of the BIR’s VAT on Digital Services Project, outlining compliance requirements for resident and non-resident digital service providers (DSPs).

Beyond this, the discussion turned to the income tax treatment of cross-border services as well. Deputy Commissioner Larry M. Barcelo of the BIR Legal Group provided guidance on Revenue Memorandum Circular No. 05-2024, including withholding tax obligations and tax treaty relief.

Barcelo clarified that while digital services are subject to VAT under the VAT on Digital Services Act, income tax treatment depends on whether the income is sourced within the Philippines. Citing the August 2022 Aces Philippines Supreme Court ruling, he explained that the source of income is determined by the activity, property, or service that actually produces the income—not simply where a particular part of the service is performed.

He further clarified that consulting, IT, outsourcing, and financial services are not automatically subject to Philippine income tax simply because they are cross-border services. Tax treatment depends on the specific facts, service agreement, and source of income of each transaction. The BIR is also working to streamline tax treaty benefits and promote greater consistency in assessing cross-border transactions.

A panel discussion moderated by ECCP Tax and Financial Services Committee Co-Chair Atty. Benedicta Du-Baladad followed, allowing participants to raise implementation concerns and compliance questions directly with BIR officials.


Digitalization and audit readiness

The forum further examined how digitalisation is shaping tax administration and how businesses can strengthen their compliance and audit readiness. Assistant Commissioner Mariza R. Uy of the BIR Assessment Service discussed the BIR’s modernization roadmap, covering organisational strengthening, digital systems, governance and standards, and taxpayer services. She emphasized advance preparation, clear responsibilities, proper documentation, and contingency plans for smoother digital filing and payment, particularly during peak periods.

Uy also identified common audit red flags, including late or non-filing of returns, repeated amendments, continuously low sales or excessive tax credits, third-party data mismatches, related-party transactions, transfer pricing concerns, significant financial fluctuations, and large or unexplained refund claims.

She stressed that accurate and organized documentation remains a taxpayer’s strongest protection during an audit. Businesses should reconcile tax returns with accounting records, retain invoices, contracts, receipts, and other supporting documents, and maintain proper records for related-party and significant transactions. She also encouraged taxpayers to address audit findings early, observe prescribed timelines, and provide clear factual and legal explanations supported by documentation.

Finally, and bringing an industry perspective to the discussion, Anil Rajanala of Cygnet.One discussed how businesses can prepare their systems, processes, and workforce for the Philippines’ evolving e-invoicing environment, emphasizing early preparation and organisational readiness.

A joint Q&A moderated by ECCP Tax and Financial Services Committee Vice-Chair Atty. Alden C. Labaguis followed, which explored digitalisation initiatives, compliance challenges, and practical approaches to managing tax risks in an increasingly technology-driven regulatory environment.


Implications of the Qualified Domestic Minimum Top-up Tax

The forum concluded with a discussion on the Qualified Domestic Minimum Top-up Tax (QDMTT) and its implications for the Philippines’ tax incentive framework.

Atty. Carlo Navarro, Tax & Legal Leader of Deloitte Philippines and Transfer Pricing Leader for Deloitte Southeast Asia discussed the Qualified Domestic Minimum Top-up Tax (QDMTT). Under the OECD/G20 Inclusive Framework’s Pillar 2 rules, multinational enterprises are subject to a minimum effective tax rate of 15% in each jurisdiction where they operate.

Navarro also explained that QDMTT would allow the Philippines to collect top-up taxes on Philippine-sourced income taxed below 15%, rather than allowing other jurisdictions to collect these taxes. The draft QDMTT legislation is currently with Congress.

His presentation highlighted the potential impact on existing incentives, including the Income Tax Holiday (ITH), Special Corporate Income Tax (SCIT), and Enhanced Deductions Regime (EDR). The Department of Finance is therefore considering adjustments, including refundable investment credits and qualified tax incentives linked to substantive activities, expenditures, or production volume.

Looking Ahead: Navigating an Evolving Tax Landscape

As tax regulations continue to evolve alongside technological advancements and international developments, the ECCP reaffirmed its commitment to providing platforms that facilitate meaningful dialogue between policymakers and the business community. Through initiatives such as the 2026 Tax Forum, the Chamber aims to support businesses in navigating regulatory changes, strengthening compliance practices, and contributing to a transparent, efficient, and competitive tax ecosystem in the Philippines.

The event was hosted by Atty. Alden C. Labaguis, Vice Chairperson of the ECCP Tax and Financial Services Committee and the Customs & Logistics Committee.

The 2026 Tax Forum is co-presented by Deloitte Philippines and Cygnet.One. It is supported by Table Top Partner ClearTax and Media Partners iMPACT Magazine, The Manila Times, and The Philippine Business and News.