The Philippines has taken its first concrete step toward adopting the OECD-backed Global Minimum Tax, laying the groundwork for a sweeping overhaul of how large multinational companies are taxed and signaling a new era in cross-border corporate taxation.
The Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) convened the inaugural meeting of the Technical Working Group on July 7 to begin crafting the laws, regulations and administrative systems needed to implement the Global Minimum Tax (GMT), a global tax regime designed to curb profit shifting and tax avoidance by multinational corporations.
The framework will apply to multinational enterprise groups with annual global revenues of at least EUR750 million, requiring them to pay a minimum effective tax rate of 15 percent on profits earned in the Philippines regardless of where those profits are booked.
“Our task is to thoroughly address legal, tax, administrative, and operational issues involved and ensure that key policy decisions and recommendations are thoroughly studied before they are advanced,” DOF Undersecretary Rolando T. Ligon Jr., who chairs the Technical Working Group, said.
The move aligns the Philippines with a growing list of economies implementing the OECD/G20 tax reform, which seeks to prevent multinational firms from shifting profits to low-tax jurisdictions while allowing governments to retain a fair share of corporate tax revenues.
For the Philippines, the reform could strengthen revenue collection without raising tax rates for domestic businesses, while reinforcing the country’s credibility as an investment destination operating under internationally recognized tax rules.
BIR Commissioner Charlito Martin R. Mendoza said the challenge extends beyond writing new rules.
“More than drafting legislation, the work ahead involves preparing the administrative processes, digital systems, technical capabilities, and institutional arrangements needed to implement the framework effectively and provide clear guidance to affected taxpayers,” he said.
The Technical Working Group has formed five specialized teams covering legislation, tax administration, capacity building, stakeholder engagement and post-implementation monitoring as the government seeks to balance global tax commitments with its investment competitiveness and long-term fiscal sustainability.
