The Bureau of Internal Revenue (BIR) has begun preparations for the possible implementation of the proposed Qualified Domestic Minimum Top-Up Tax (QDMTT), a measure being pushed by the Department of Finance (DoF) to ensure that large multinational enterprises pay a minimum level of tax on income generated in the Philippines.

In a statement issued Thursday, the BIR said Commissioner Charlito Mendoza met with officials from the DoF and the Fiscal Incentives Review Board (FIRB) last 3 June to discuss the framework of the proposed Qualified Domestic Minimum Top-Up Tax Act of 2026.

Discussions focused on compliance requirements, reporting standards, audit readiness, and the institutional capacity needed to administer the new tax regime.

Prioritizing capability-building

Mendoza said the BIR is prioritizing capability-building and systems development to ensure the effective implementation of the proposed measure amid evolving global tax rules.

“At this stage, our immediate priority is to build the capability of our personnel and prepare the systems, processes, and organizational structures needed to administer the proposed regime effectively,” Mendoza said.

Key preparations include specialized training for BIR personnel, the development of new tax forms and compliance mechanisms, and the establishment of organizational structures to support the administration of the tax.

Broader agenda

The BIR said the initiative forms part of its broader revenue collection and tax base protection agenda under BIR DARES, aimed at safeguarding the country’s taxing rights as international tax rules continue to evolve.

Finance Assistant Secretary Euvimil Nina Asuncion said many multinational companies operating in the Philippines would prefer complying with the global minimum tax domestically rather than dealing with unfamiliar tax rules in other jurisdictions or paying top-up taxes abroad.

Simplified domestic compliance

“We have been informed that many of our multinationals would rather comply with the GMT domestically than comply with unfamiliar rules in other jurisdictions or pay top-up taxes abroad. The primary considerations are simplifying domestic compliance and ensuring that implementation is strictly in accordance with international standards,” Asuncion said.