Dear CLIENTS, COLLEAGUES and FRIENDS:
For your reference and file, we are pleased to send our regular corporate, tax and other legal digest.
In this Article:
SECURITIES AND EXCHANGE COMMISSION (“SEC”)
- NO MANDATORY GRACE PERIOD WAS GRANTED FOR THE PAYMENT OF LOANS AND/OR INTEREST FALLING DUE WITHIN THE ENHANCED COMMUNITY QUARANTINE PERIOD FROM MARCH 29, TO APRIL 4, 2021.
- SEC CEBU EXTENSION OFFICE CONTACT NUMBERS
BUREAU OF INTERNAL REVENUE ("BIR") DEADLINES AND ISSUANCES:
- BIR DEADLINES FROM APRIL 5 TO 11, 2021.
- FILING OF RETURNS AND PAYMENT OF TAXES DUE THEREON FALLING WITHIN THE PERIOD FROM MARCH 22, 2021 TO APRIL 30, 2021 MAY BE MADE ANYWHERE, EVEN OUTSIDE OF REVENUE DISTRICT OFFICER WHERE TAXPAYER IS REGISTERED.
- NEW GUIDELINES ON AVAILMENT OF TAX TREATY BENEFITS: WITHHOLDING AGENT SHALL FILE REQUEST FOR CONFIRMATION WHILE NONRESIDENTS SHALL FILE TAX TREATY RELIEF APPLICATION (TTRA); BIR SHALL ISSUE CERTIFICATIONS ON BENEFITS GRANTED IN LIEU OF A RULING; ONE APPLICATION FOR EACH TRANSACTION UNLESS TRANSACTION EXTENDS BEYOND 1 YEAR; BIR TO PROCESS APPLICATION WITHIN 4 MONTHS AS A RULE; 3 MONTHS TO SUBMIT DOCUMENTS FOR PENDING TTRA FOR INCOME EARNED IN 2020 AND PRIOR YEARS FROM RECEIPT OF FINAL NOTICE TO SUBMIT ADDITIONAL DOCUMENTS OR FROM EFFECTIVITY OF THIS ORDER, WHICHEVER IS LATER; FILING A CLAIM FOR REFUND IN CASE THE SUBJECTED RATE IS HIGHER THAN SHOULD-BE RATE MAY BE FILED INDEPENDENTLY OR SIMULTANEOUSLY; SUBMISSION OF CERTIFICATE OF RESIDENCE FOR TREATY RELIEF (CORTT) FORM SHALL BE DISCONTINUED.
- GUIDELINES ON THE USE OF ELECTRONIC AUDITED FINANCIAL STATEMENTS SYSTEM.
SECURITIES AND EXCHANGE COMMISSION
NO MANDATORY GRACE PERIOD WAS GRANTED FOR THE PAYMENT OF LOANS AND/OR INTEREST FALLING DUE WITHIN THE ENHANCED COMMUNITY QUARANTINE PERIOD FROM MARCH 29, TO APRIL 4, 2021.
- The amended Guidelines issued by IATF on Emerging Infectious Diseases does not extend the 30-day grace period mandated by the Bayanihan to Heal As One Act during the ECQ for the said period.
- Nonetheless, the SEC strongly encourages Financing Companies, Lending Companies, and Micro Finance-NGOs to continue implementing debt relief measures such as lowering of interest rates, waiver or reduction of penalties, charges and other fees, payment of holiday, debt consolidation, extension of loan terms, and provision of flexible payment schedules, in view of the adverse impact of COVID-19 pandemic to the borrowing public, and based on the continuing assessment of their cash flows. Request for debt relief shall directed at the concerned Financing Companies, Lending Companies, or Microfinance-NGOs
- For your easy reference, the Circular may be accessed HERE SEC Notice, March 30, 2021.
SEC CEBU EXTENSION OFFICE CONTACT NUMBERS. The contact numbers are accessible HERE.
BUREAU OF INTERNAL REVENUE
BIR DEADLINES FROM APRIL 5 TO 11, 2021. A gentle reminder on the following deadlines, as may be applicable:
| DATE |
FILING/SUBMISSION |
|
April 5, 2021 |
- Submission - Summary Report of Certifications Issued by the President of the National Home Mortgage Finance Corporation - Month of March 2021
- e-Filing/Filing & e-Payment/Payment - 2000 - Documentary Stamp Tax Declaration/Return & 2000-OT - Documentary Stamp Tax Declaration/Return One-Time Transactions - Month of March 2021
|
|
April 8, 2021 |
- Submission - All Transcript Sheets of ORBs used by Dealers of Automobiles/Manufacturers/TollManufacturers/ Assemblers/Importers of Alcohol Products, Tobacco Products, Petroleum Products, Non-Essential Goods, Sweetened Beverage Products, Mineral Products & Automobiles - Month of March 2021
- e-Submission - Monthly e-Sales Report of All Taxpayers using CRM/POS with TIN ending in Even Number - Month of March 2021
|
| April 10, 2021 |
- Submission - Transcript Sheets of 2222-ORB - Month of March 2021
- Submission - List of Buyers of Sugar Together with a Copy of Certificate of Advance Payment of VAT Made by Each Buyer appearing in the List by a Sugar Cooperative - Month of March 2021
- Submission - Information Return on Releases of Refined Sugar by the Proprietor or Operator of a Sugar Refinery or Mill - Month of March 2021
- Submission - Monthly Report of DST Collection and Remitted by the Government Agency - Month of March 2021
- e-Submission - Monthly e-Sales Report of All Taxpayers using CRM/POS with TIN ending in Odd Number - Month of March 2021
- e-Filing/Filing & e-Payment/Payment - 1600 (VT/PT Withheld) and Monthly Alphalist of Payees (MAP) - eFPS & Non-eFPS Filers - Month of March 2021
- e-Filing/Filing & e-Payment/Payment - 1606 - Withholdiing Tax Remittance Return for Onerous Transfer of Real Property Other Than Capital Asset (Including Taxable and Exempt) - Month of March 2021
- e-Filing/Filing & e-Payment - 0620 (Monthly Remittance Form of Tax Withheld on the Amount Withdrawn from the Decedent's Deposit Account) - eFPS & Non-eFPS Filers - Month of March 2021
- e-Filing & e-Payment/Remittance - 1600 (VT/PT Withheld) and 1601-C - National Government Agencies (NGAs) - Month of March 2021
- Filing & Payment - 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) - Non-eFPS Filers - Month of March 2021
- Filing & Payment - 2200-C (Excise Tax Return for Cosmetic Procedures) with Monthly Summary of Cosmetic Procedures Performed - Month of March 2021
- Filing & Payment/Remittance - 2200M Excise Tax Return for the amount of Excise Taxes Collected from Payment Made to Sellers of Metallic Minerals - Month of March 2021
|
| April 11, 2021 |
- e-Filing - 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) - eFPS Filers under Group E - Month of March 2021
|
FILING OF RETURNS AND PAYMENT OF TAXES DUE THEREON FALLING WITHIN THE PERIOD FROM MARCH 22, 2021 TO APRIL 30, 2021 MAY BE MADE ANYWHERE, EVEN OUTSIDE OF REVENUE DISTRICT OFFICER WHERE TAXPAYER IS REGISTERED.
- The BIR prescribes guidelines on the filing of returns as well as payment of taxes due thereon falling within the period March 22, 2021 to April 30, 2021.
- The filing of the returns as well as payment of taxes due thereon, falling within the period March 22, 2021 to April 30, 2021, may be made anywhere, even outside the jurisdiction of the Revenue District Office where they are registered.
- For your easy reference, the Circular may be accessed Here. (Revenue Memorandum Circular No. 41-2021, March 29, 2021)
NEW GUIDELINES ON AVAILMENT OF TAX TREATY BENEFITS: WITHHOLDING AGENT SHALL FILE REQUEST FOR CONFIRMATION WHILE NONRESIDENTS SHALL FILE TAX TREATY RELIEF APPLICATION (TTRA); BIR SHALL ISSUE CERTIFICATIONS ON BENEFITS GRANTED IN LIEU OF A RULING; ONE APPLICATION FOR EACH TRANSACTION UNLESS TRANSACTION EXTENDS BEYOND 1 YEAR; BIR TO PROCESS APPLICATION WITHIN 4 MONTHS AS A RULE; 3 MONTHS TO SUBMIT DOCUMENTS FOR PENDING TTRA FOR INCOME EARNED IN 2020 AND PRIOR YEARS FROM RECEIPT OF FINAL NOTICE TO SUBMIT ADDITIONAL DOCUMENTS OR FROM EFFECTIVITY OF THIS ORDER, WHICHEVER IS LATER; FILING A CLAIM FOR REFUND IN CASE THE SUBJECTED RATE IS HIGHER THAN SHOULD-BE RATE MAY BE FILED INDEPENDENTLY OR SIMULTANEOUSLY; SUBMISSION OF CERTIFICATE OF RESIDENCE FOR TREATY RELIEF (CORTT) FORM SHALL HENCEFORTH BE DISCONTINUED.
- The BIR streamlines the procedures and documents for the availment of treaty benefits
| Treaty Rate/Regular Rate |
Responsible Party |
| Withholding agent applies treaty rates on the income earned by nonresident |
- Withholding agent to file with ITAD a request for confirmation on the propriety of the withholding tax rates applied on the item of income
- Supporting documents are required.
- When to file: At any time after the payment of withholding tax but shall in no case be later than the last day of the 4th month following the close of each taxable year.
|
| Regular rates are imposed on the income |
- Nonresident Foreign Corporation (NRFC) shall file a TTRA with the ITAD. It must invoke and prove entitlement to the treaty.
- Supporting documents are required
- When to file: At any time after the receipt of the income
- Effect of failure to prove entitlement: confirmation of the tax rate previously applied on the income and eventual denial of TTRA
|
| BIR’s findings of tax rate is different from the rate applied |
Effect |
| Rate applied is lower than the should-be rate or NRFC is not entitled to the treaty benefit |
- BIR will issue a ruling denying the request for confirmation or TTRA
- Withholding agent to pay the deficiency tax plus penalties
|
| Rate applied is proper or higher than the should-be rate |
- BIR will issue certificate confirming the NRFC’s entitlement to the treaty benefits
- Taxpayer may apply for refund of excess withholding tax
|
- How many TTRA/request for confirmation shall be filed?
- General rule: One TTRA/Request for each transaction
- Exception: Annual updating is necessary (example, if agreement extends for 5 years, 5 TTRAs)
- Applicable to Long-term contracts (e.g. contracts for services or loan agreements license agreements which are effective for more than a year
- NRFC shall file an updated Application Form
- Supporting documents: Tax Residency Certificate if the validity period has lapsed, and other relevant documents
- When to file: Not later than last day of 4thmonth following the close of each taxable year.
- Processing time: 4 months from the submission of complete documents or as soon as practicable provided that the ITAD has addressed all its backlogs.
- Manner of Granting and Denying Treaty Benefits
| Granted/Denied |
Process |
| TTRA/Request Granted |
- Certification issued by the Assistant Commission of for Legal Service
- No more usual BIR Ruling and Compliance Check Report
- Loose DST must be affixed on the Certificate
|
| TTRA/Request Denied |
- BIR Ruling containing the factual and legal bases shall be issued
- Appealable to the Department of Finance within 30 days from receipt of the adverse ruling.
|
- Pending TTRA for income earned in 2020 and prior years
| Pending TTRA for income earned in 2020 and prior years |
3 Months from receipt of Final Notice to Submit Additional Documents or from Effectivity of this Order, whichever is later, to submit additional document |
Failure to submit requested documents: Automatic denial of the TTRA for failure to prove entitlement to treaty benefits |
| With Notice of Archiving |
3 Months from the Effectivity of this Order |
Failure to submit requested documents: Automatic denial of the TTRA for failure to prove entitlement to treaty benefits |
- Filing a Claim for Refund in case the subjected rate is higher than should-be rate
- Document: BIR Form 1913 with letter-request
| Filing* |
Procedure |
| Independently of the TTRA
|
ITAD shall endorse the claim for refund to the proper office that handles the processing of tax refund after the resolution of the TTRA |
| Simultaneous with the TTRA |
The officer where it was filed shall coordinate with and defer to ITAD the resolution of the nonresident’s entitlement to treaty benefit. |
| *Must be within the 2-year prescriptive period |
- Effect if during tax audit BIR finds inconsistencies made as basis of the certificate or ruling:
- Examiner to inform ITAD, which shall issue amendatory certificate/ruling
- BIR may likewise determine other internal revenue taxes (VAT, percentage tax, DST, donor’s tax)
- Failure to file request within the period:
- Penalties under the Tax Code
- Perjury and other appropriate crimes
- Payment of deficiency taxes
- For dividends, interest and royalties, the submission of Certificate of Residence for Treaty Relief (CORTT) Form shall henceforth be discontinued. Nevertheless, previously submitted CORTT Forms shall still be forwarded to the concerned Revenue District Offices (RDOs) for compliance check.
- For your reference, the issuance may be accessed Here. (Revenue Memorandum Order No. 14-2021, March 31, 2021)
GUIDELINES ON THE USE OF ELECTRONIC AUDITED FINANCIAL STATEMENTS SYSTEM.
- The BIR prescribes the revised guidelines on the use of electronic Audited Financial Statements System. Taxpayers are mandated to scan the documents and use naming convention
- A copy of the RMC is herewith attached for your easy reference. Revenue Memorandum Circular No. 43, 2021, March 31, 2021
This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. If you have clarification or concern or no longer wish to receive updates, please feel free to reach out to us.
Best regards,
Ron Dumlao
