Authorizing The Secretary Of Finance To Order The Opening Of Income Tax Returns Of Specific Taxpayers For Inspection To Effectively Implement Republic Act Number 10021, Otherwise Known As The “exchange Of Information On Tax Matters Act Of 2009”

MALACAÑAN PALACE
MANILA

BY THE PRESIDENT OF THE PHILIPPINES

EXECUTIVE ORDER NO. 56

AUTHORIZING THE SECRETARY OF FINANCE TO ORDER THE OPENING OF INCOME TAX RETURNS OF SPECIFIC TAXPAYERS FOR INSPECTION TO EFFECTIVELY IMPLEMENT REPUBLIC ACT NUMBER 10021, OTHERWISE KNOWN AS THE “EXCHANGE OF INFORMATION ON TAX MATTERS ACT OF 2009”

WHEREAS, it is declared as the policy of the State to promote and pursue a tax environment that contributes in sustaining favorable international investment climate and instills confidence in the adequacy and capacity of the country’s tax administration to comply with its commitments under existing international conventions or agreements on tax matters;

WHEREAS, Republic Act (RA) No. 10021. otherwise known as the “Exchange of Information on Tax Matters Act of 2009” was enacted on 8 March 2010 in order for the government to comply with or commit to the internationally-agreed tax standards required for the exchange of tax information with its tax treaty partners to help combat international tax evasion and avoidance and to help address tax concerns that affect international trade and...

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Summary of Executive Order No. 56

Delegated Authority (Section 1):
- The authority to order the opening for inspection of income tax returns of specific taxpayers subject to a request for exchange of information by a foreign tax authority is delegated to the Secretary of Finance.
- This is pursuant to an international convention or agreement on tax matters to which the Philippines is a signatory or party.

Issuance of Rules (Section 2):
- The Secretary of Finance shall issue specific rules and regulations governing the opening for inspection of income tax returns of specific taxpayers.
- This shall be upon the recommendation of the Commissioner of Internal Revenue.

Use and Confidentiality (Section 3):
- Any information received by a foreign tax authority as a result of the opening for inspection shall be treated as absolutely confidential.
- The information shall be disclosed only to persons or authorities involved in the assessment, collection, enforcement, prosecution, or determination of appeals related to the covered taxes.

Separability Clause (Section 4):
- If any provision of this Executive Order is declared invalid or unconstitutional, the other provisions not affected shall remain valid and subsisting.

Repealing Clause (Section 5):
- All orders, rules, regulations, and issuances, or parts thereof, which are inconsistent with this Executive Order, are hereby repealed, amended, or modified accordingly.

Effectivity (Section 6):
- This Executive Order shall take effect immediately upon publication in a newspaper of general circulation.