PH, Japan 'agree in principle' on new tax treaty

MANILA, February 5 ------ Philippine and Japanese governments have agreed in principle on a new treaty that would replace an existing Tokyo-Manila tax convention, the Japanese Embassy in Manila said.

The agreement was made during the first round of renegotiation of the Philippines-Japan Double Taxation Convention (DTC) held from Jan. 27 to 30, 2026. The DTC covers income taxation for citizens and residents of both the Philippines and Japan, and defines how each nation will levy taxes and apply credits for taxes already paid.

The Department of Finance (DOF) said the negotiated treaty is expected to produce a balanced framework that supports cross-border economic activity and safeguards the integrity of both nations' tax systems. The Japanese negotiation team was led by Embassy Minister for Economic Affairs Yokota Naobumi and officials from the Japan Ministry of Finance, while the Philippines was represented by DOF Assistant Secretaries Dakila Elteen Napao and Euvimil Nina Asuncion, together with Bureau of Internal Revenue (BIR) Deputy Commissioner Larry Barcelo. "The renegotiation marks an important step in strengthening the bilateral tax frameworks of the Philippines and Japan," the embassy said. "It promotes a more reliable and stable investment environment, supports sustainable economic growth, and facilitates cross-border trade and investment while ensuring fair taxation for Japanese and Filipino businesses and individuals alike."

The embassy said this is the first time both countries reached a substantive agreement to revise the tax treaty in nearly 20 years, reaffirming "mutual trust and their long-standing partnership." "This milestone is especially meaningful as the Philippines and Japan are currently celebrating the 70th Anniversary of Friendship, underscoring the joint dedication to building a fair, transparent, and future-ready tax environment for both nations," it said.

Source: pna.gov.ph