EXCISE TAX ON REMOVAL OF SWEETENED BEVERAGES PRODUCTS FOR EXPORT (Revenue Regulations No. 10-2021, June 17, 2021)

• Non-exportation of the particular article subjected to applicable taxes, inclusive of penalties;
• Subsequent issuance of export permits shall not be allowed, unless the assessed tax due on unliquidated export and penalties have been paid;
• Proof of payment shall accompany subsequent application permit.

Who may avail of treaty benefits

• Natural or juridical persons
• Residents of one or both of the contracting states
  • Non-resident income recipient should submit a Tax Residency Certificate (TRC) duly issued by the tax authority of the country of residence for purposes of establishing fact of residency in a contracting state

When provisions of the applicable treaty shall be applied

• When nonresident submitted to the income payor
  • TRC; and
  • Appropriate BIR Form 0901
• Prior to the payment of income
• Provided that all conditions for the availment have been present

Mandatory requirement to file a Request for Confirmation (RFC)

• To be filed by the withholding agent/income payor, domestic or foreign (for nonresident income payor-withholding agent, it is mandatory to appoint a authorized representative in the Philippines)
• To confirm that the tax treatment of such income is proper
• Income payor may authorize the nonresident or any other person to file such request for an on its behalf, provided that the latter is required with special power of attorney.

Deadlines

Capital Gains

• At any time after the transaction
• But shall not be later than the last day of the 4^th month following the taxable year when the income is paid or when the transaction is consummated

Other types of income

• At any time after the close of the taxable year
• But not later than the last day of the 4^th month following the close of such taxable year when the income is paid or becomes payable, or when the expense/asset is accrued or recorded in the books, whichever comes first

Number of TRC in case of multiple income for the year

• 1 original and authenticated TRC to be submitted to each income payor/withholding agent per year.
• Alternatively, a certified true copy of the original may be submitted to other payors if the original copy is no longer available, with a notation as to whom the original copy was previously submitted.
• Same rule applies to the following:
  • Proof of establishment or incorporation
  • Certificate of Non-registration or License to Do Business in PH by SEC
  • Certificate of Business Registration/Presence by DTI

When annual updating is/not mandatory

In case of long term contracts involving payment of interest and royalties and other types of income where condition for entitlement to treaty benefits is not dependent on time threshold

• Not mandatory.
• BIR will issue a one-time Certificate of Entitlement to Treaty Benefit (COE) that is presumably valid for the whole duration of the contract as long as there is no relevant and significant change in the facts or circumstances on which the ruling is based; new request for confirmation to be filed in case of material changes in the facts or circumstances.

• Annual updating is mandatory;
• COE is limited to a particular period of engagement.

Proof that income is not effectively connected with  permanent establishment of the nonresident foreign enterprise

• AFS of the foreign enterprise; if not available, sworn certification signed by the principal officer of the PE, containing material facts that may lead the BIR to believe that the income is not effectively connected with the PE and that the PE is not material to the realization of such income.
• ITAD may also require AFS of the PE if the same is already available

Proof that interest on loan or debt-claims is arm’s length in case of related parties debtor and creditor

• Transfer pricing documentation of the nonresident creditor;
•  If unavailable, transfer pricing policy for intercompany loans or any equivalent transfer pricing study

Audited interim FS for capital gains transactions

• Not mandatory; only preferred for purposes of computing the real property interest of the issuing domestic corporation at the time of the transaction.
• Alternative documents:
  • Unaudited interim FS; and
  • Lapsing schedule as of the date of transfer or alienation of the property

Pending TTRAs within Notice to Submit Additional Documents

• Final Notice to Submit Additional Documents shall be issued within 3 months period to comply
• Archived applications: Final Notice will no longer be issued but taxpayer is given 4 months to comply