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Securities and Exchange Commission

SEC Updates January 25-29 2023

BIR PRESCRIBES THE POLICIES AND GUIDELINES ON THE REGISTRATION OF BOOKS OF ACCOUNTS RMC No. 03-2023

  • All books of accounts shall be registered online with the Bureau’s Online Registration and Update System (ORUS). Instead of manual stamping of books of accounts, a Quick Response (QR) Code shall be generated, which can be validated online.

For New Business Registrants

Type of Books of Accounts Deadline for Registration Frequency
Manual Books of Accounts Before the deadline for filing of the initial quarterly Income Tax  return or the Annual Income Tax returns, whichever comes earlier. Before the full consumption of the pages of the previously registered books

 

For Existing Business Taxpayers or Subsequent Registration

Type of Books of Accounts Deadline for Registration Frequency
Manual Books of Accounts Before use of the books. Before the full consumption of the pages of the previously registered books
Permanent Bound Loose-leaf Book of Accounts Within fifteen (15) days after the end of each taxable year or within 15 days from the closure of business operations, whichever comes earlier, unless extended by the Commissioner or his duty authorized representative, upon request of the taxpayer before the lapse of the said period. Annually
Computerized Books of Accounts Within thirty (30) days from the close of each taxable year or within 30 days from the closure of operations, whichever comes earlier, unless extended by the Commissioner or his duly authorized representative, upon request of the taxpayer before the lapse of the said period Annually
  •  New sets of manual books of accounts (BAs) are not required to be registered every year. However, taxpayers may opt to use new set of books of accounts yearly. Hence, new sets of manual BAs shall be registered before its use.

Online Registration of Books of Accounts and QR Stamping

  • Taxpayers who shall register their books of accounts shall use the BIR ORUS at https://orus.bir.gov.ph. Upon successful registration, the system shall generate the “QR stamp”, which the taxpayers shall paste on the first page of their manual books of accounts and permanent bound loose leaf books of accounts and other accounting records are stored/saved.
  • The QR Stamp (Annex) shall have the following taxpayer information printed :
    • TIN;
    • Registered Name;
    • Registered Address;
    • Type of Book (Manual, Loose leaf or Computerized);
    • Book Registered;
    • Permit No./ Acknowledgment Certificate Control No. (ACCN)- for Loose leaf or Computerized
    • PTU/ ACCN Date issued- for Loose leaf or Computerized
    • Quantity;
    • Volume No.;
    • Date Registered;
    • Date Approved; and
    • QR Code.
  • The QR Code shall determine the authenticity of the printed QR Stamp when scanned by any smartphone, which will be redirected to the BIR ORUS website.
  • Upon initial implementation of online registration of books of accounts through ORUS, taxpayers shall still be allowed to register and stamp their manual books of accounts at the Revenue District Office/ Large Taxpayer Division/Office where the Head Office or Branch is registered.
  • The Revenue District Office/ Large Taxpayer Division/Office shall announce and inform taxpayers under its jurisdiction that the registration of books of accounts can be done manually or online.

BIR PROVIDES TRANSITORY PROVISIONS FOR THE IMPLEMENTATION OF THE QUARTERLY FILING OF VAT RETURNS RMC No.5-2023

  • VAT-registered taxpayers are no longer required to file the Monthly Value-Added Tax Declaration (BIR Form No. 2550M) for transactions starting January 1, 2023 but will instead file the corresponding Quarterly Value-Added Tax Return (BIR Form No. 2550Q) within twenty-five (25) days following the close of each taxable quarter when the transaction transpired.
  •  In order to avoid confusion during the initial implementation, particularly for taxpayers that are under fiscal period of accounting, the following Transitory Provisions are provided:

 

Quarter

Ending

 Transactions Covering the Month of Filing of 2550Q for the Quarter Ending
December 2022 January 2023 February 2023 December 2022 January 2023 February 2023
January 31, 2023 Required to file 2550M not later than January 20, 2023 Not applicable Not Required to File 2550M Not applicable Required to file 2550Q not later than February 27, 2023* Not applicable
February 28, 2023 Required to file 2550M not later than January 20, 2023 Not Required to File 2550M Not applicable Not applicable Not applicable Required to file 2550Q not later than March 27, 2023*
March 31, 2023 Not applicable Not Required to File 2550M Not Required to File 2550M Required to file 2550Q not later than January 25, 2023 Not applicable Not applicable

 

BIR RULINGS

  • Sale of interest in real property (real property purchased on installment covered by Contract to Sell which was sold by the original buyer before it was fully paid) shall be taxable on the part of the original buyer (now seller) based on the realized gain thereon which is measured by the difference between the agreed consideration and the amount actually paid by the said original buyer.
    • Assignment of interest is subject to CGT or CWT/EWT, as the case may be after the full payment of the purchase price but before the execution of DOAS
      • Before full payment, the difference in agreed consideration and amount actually paid (per assignment) is subject to CGT or CWT/EWT, as the case may be.
      • Thus, if SM purchased the property from the buyer (not yet fully paid) and later assigned it to another without gain, the assignment is not subject to income tax.
    • The assignment of rights over the properties by the Assignor to the Assignee cannot be considered as a sale. Consequently, since there was no sale, barter, exchange or lease of the subject Properties, there is no basis for the imposition of the VAT. The assignee merely steps into the shoes of the assignor without acquiring a better right than what the assignor had in the property to which the rights assigned pertain.
    • The assignment of rights, not being a sale of real property but merely rights pertaining to such property is not subject to DST
    • However, the said Deeds of Assignment is subject to the P30.00 DST on the notarial acknowledgment. (BIR Ruling No: OT-305-2022)
  • Under the CREATE Law, registered export enterprises are granted a VAT zero-rating incentive on the goods and services directly and exclusive used in the registered project activity. This includes provision of basic infrastructure.
    • Basic infrastructure includes the purchase of real properties such as land where the building and/or structure will be constructed, provided that such building and/or structure is/will be directly and exclusively used in or attributable to the registered project or activity of an export enterprise.(BIR Ruling No: OT-306-2022)
    • Transaction is exempt from DST if both parties are exempt from DST.
  • The purchases of goods/articles under the construction/development of NHA’s Socialized Housing Program is exempt from project-related income tax, creditable withholding tax and value-added tax on its income received directly in connection with the mentioned project. However, the purchases of goods/articles of the said company shall be subject to VAT, even if the said purchases are to be used for social housing projects and must issue VAT exempt official receipts on its gross receipts from the said socialized housing project. (BIR Ruling No: Certificate of Tax Exemption No: NSH-307-2022)
  •  Importation of a cargo vessel destined for domestic transport operations shall be exempt from VAT. Provided that the VAT exemptions shall be subject to the requirements on restriction vessel importation and mandatory vessel retirement program of MARINA. (BIR Ruling No: Certificate of Tax Exemption No: VAT-301-2022, VAT-302-2022)

The transfer of club shares appurtenant to the sale of lots in the subdivision is not subject to CAR. A CAR issued by the BIR only certifies that taxes are paid. Moreover, no further consideration is required for the acquisition of the club share as the parties agree to treat that the lot and club are indivisible.. (BIR Ruling No: OT-303-2022)

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SEC Updates December 5-11 2022

SEC 2023 SCHEDULE FOR FILING OF THE AUDITED FINANCIAL STATEMENTS AND GENERAL INFORMATION SHEET

  • The SEC has set the deadlines for the filing and submission of the 2022 audited financial statements (AFS) and general information sheet (GIS) of corporations through the Electronic Filing and Submission Tool (eFAST).
  •    Annual Financial Statements (AFS)
    •  All corporations, including branch offices, representative offices, regional headquarters and regional operating headquarters of foreign corporations whose fiscal year ends on December 31, 2022 shall file their AFS based on the last digit of the SEC registration or license number in accordance with the following schedule:
      • 1 and 2 : May 2,3,4,5
      • 3 and 4 : May 8,9,10,11,12
      • 5 and 6 : May 15,16,17,18,19
      • 7 and 8 : May 22,23,24,25,26
      • 9  and 0 : May 29,30,31 and June 1,2
    •       The SEC extension offices will likewise implement the same coding schedule. Corporations may submit their reports on or before their respective filing dates.
    •       Corporations whose securities are listed on the Philippine Stock Exchange and are covered under Section 17.2 of Republic Act No. 8799, or the Securities Regulation Code (SRC), shall file their AFS within 105 calendar days after the end of their fiscal year, as an attachment to their annual reports.
    •       SEC will accept late filings starting June 5, 2023. Corporations which submitted their reports late will be subject to the prescribed penalties computed from the last date of the aforementioned filing schedule.
    •       Corporations whose fiscal year ends on a date other than December 31, 2022 should file its AFS within 120 calendar days from the end of its fiscal year.
  • General Information Sheet (GIS)
    •  All corporations shall file their GIS through eFAST within 30 calendar days from:
      • Stock Corporations – date of actual annual stockholders’ meeting
      • Non-Stock Corporations – date of actual annual members meeting
      • Foreign Corporations – anniversary date of the issuance of the SEC License.
  • All Reports
    • All corporations are required to submit their annual reportorial requirements online through eFAST at https://cifss-ost.sec.gov.ph.
    •  Any problem encountered in the enrollment and submission of AFS and GIS in the eFAST shall be accommodated through the email addresses and telephone numbers provided in the SEC Contact Center posted at https://www.sec.gov.ph/contact-us/
    •   Other reports that are not yet accepted through eFAST may be submitted by sending through email at ictdsubmission@sec.gov.ph. Submission of reports over the counter and/or through mail or courier under the SEC Express Nationwide Submission facility shall no longer be accepted.

 

THE BIR SUSPENDS ALL AUDIT AND OTHER FIELD OPERATIONS EFFECTIVE DECEMBER 16, 2022 UNTIL JANUARY 8, 2023 RMO No. 55-2022, December 22, 2022

  • All field audits and other field operations of the BIR relative to examinations and verifications of taxpayers’ books of accounts, records, and other transactions are suspended for the period December 16, 2022 to January 8, 2023. Likewise, no written orders to audit and/or investigate taxpayers’ internal revenue tax liabilities shall be served, except in the following cases:
    • Investigation of cases prescribing on or before April 15, 2023;
    • Tax evasion cases;
    • Processing and verification of estate returns, donor’s tax returns, capital gains tax returns and withholding tax returns on the sale of real properties or shares of stocks together with the documentary stamp tax returns thereto;
    • Examination and/or verification of internal revenue tax liabilities of taxpayers retiring from business;
    • Monitoring of privilege stores (tiangge); and
    • Other matters/ concerns where deadlines have been imposed.
  •    Examiners and Investigators shall make use of this period to do office work on their cases and to complete the report on those with already completed work.

 

THE BIR PRESCRIBES THE RULES AND REGULATIONS IMPLEMENTING THE PROVISIONS OF REPUBLIC ACT NO. 11900, RELATIVE TO THE IMPORTATION, MANUFACTURE, SALE, PACKAGING, DISTRIBUTION, USE, AND COMMUNICATION OF VAPORIZED NICOTINE AND NON-NICOTINE PRODUCTS, AND NOVEL TOBACCO PRODUCTS RR 14-2022

  • Manufacturer or importer of vaporized nicotine and non-nicotine products and novel tobacco products must register its business before it starts its operation.
  • Place of registration: Excise LT Regulatory Division (ELTRD) BIR National Office.
  • It shall apply for a Permit to Engage in Business as Manufacturer or Importer.
  • Among the additional requirements are bond (starting at P100,000) and Sworn statements on the goods/products reflecting the price/market value with cost. Sworn statements should be updated and submitted on or before the end of the months of June and December thereafter.
  • Importers shall apply for eATRIG via online and processed in the ELTR.
  • If goods are already released: no ATRIG shall be issued
  • Subsequent application for ATRIG: Importer to submit proof of payment of excise tax on imported products covered previously by ATRIG.
  • If a particular brand shall no longer be manufactured on a permanent or temporary basis, notice of stoppage of production must be filed with the BIR.
  • Official Register Books must be maintained; transcript sheets of ORB to be submitted on or before the 8th day of the month following the month of operation.

 

BIR RULINGS

  • Importation of the enumerated Hydrocarbon fluids except Exxsol Hexane shall not be subject to excise tax, However, they are still subject to 12% VAT on importation of goods.
    • Also, the said hydrocarbon fluids except Exxsol Hexane are already determined by the BIR to be used as solvents and raw materials for general purpose adhesive construction, automotive, shoes, and for architectural coatings like household paints (solvent based). BIR Ruling No: OT-275-2022
  • The Joint Venture may use the tax credits evidenced by the CWTs Certificate issued in the name of JV partner, applying substance over form. However, the tax credits to be applied by the Joint Venture shall be limited to the total amount withheld as duly supported by certificates of creditable withholding tax.
    • The Joint Venture may benefit from the deduction of input VAT expense or the charging against the cost of the input VAT. However, the input tax shall be restricted to the total amount as duly supported by appropriate sales invoices/ official receipts. BIR Ruling No: OT-276-2022)
  • The Heirs is requesting for a reasonable extension to pay the estate tax due through a cash installment. Section 91 (B) of the 1997 Tax Code provides that when the Commissioner finds that the payment on the due date of the estate tax or any part thereof would impose an undue hardship upon the estate or any of the heirs, he may extend the time for payment not to exceed five (5) years in case the estate is settled through the courts, or two (2) years in case the estate is settled extrajudicially.
    • However, the amount for which the extension is granted shall be paid on or before the date of the expiration of the period of the extension, and the running of the Statute of Limitations for assessment, shall be suspended for the period of any such extension. Further, Section 91 (C) of the same Code provides that in case the available cash of the estate is insufficient to pay the total estate tax due, payment by installment shall be allowed within two (2) years from the statutory date for its payment without civil penalty and interest. Hence, the extension to pay the estate tax is granted. Consequently, the executor/administrator or heirs shall pay the estate tax in four (4) installments, without civil penalty and interest. BIR Ruling No. OT-277-2022
  • Properties classified as ordinary assets for being used in business by a taxpayer engaged in business other than real estate business are automatically converted into capital assets upon showing proof that the same have not been used for more than two (2) years prior to the consummation of the taxable transactions involving said properties.
    • Two important conditions for the automatic conversation of ordinary assets into capital assets are:
      • The assets were previously used in business by a taxpayer not engaged in real estate business;
      • There must be a showing that the same have not been used in business for more than two (2) years (i.e. the company ceased its business operation for more than 2 years).
    •  Thus, the conveyance of which through sale is subject only to CGT and Documentary stamp tax (DST) and shall not be subject to creditable withholding (CWT) and value-added tax (VAT). (BIR Ruling No: OT-284-2022)
  •  The purchases of goods/articles under the construction/development of NHA’s Socialized Housing Program is exempt from project-related income tax, creditable withholding tax and value-added tax on its income received directly in connection with the mentioned project. However, the purchases of goods/articles of the said company shall be subject to VAT, even if the said purchases are to be used for social housing projects and must issue VAT exempt official receipts on its gross receipts from the said socialized housing project. (BIR Ruling: Certificate of Tax Exemption No: NSH-285-2022, NSH-290-2022)
  • Sale of house and lot under economic and low-cost housing project of a company duly registered with the Board of Investments under Executive Order (EO) No. 226 is exempt from income tax and creditable withholding tax on its income received directly in connection with the mentioned project. In addition to that, sale of house and lot and other residential dwellings with selling price of not more than Php 3,199,200 is VAT exempted. (BIR Ruling Nos: Certificate of Tax Exemption No: BOI-LEH-286-2022, BOI-LEH-287-2022, BOI-LEH-288-2022, BOI-LEH-289-2022)
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GUIDELINES ON CORPORATE DISSOLUTION UNDER SECTIONS 134, 136 AND 138 OF THE REVISED CORPORATION CODE.

Voluntary Dissolution where no Creditors are Affected (Sec. 134)

  • Initiated by filing a verified request with the Company Registration and Monitoring Department (“CRMD”) or SEC Extension Office, signed by the corporation’s duly authorized representative, stating:
    1. Corporate Name, SEC Registration Number, Principal Office and Email Address;
    2. Complete Name, Designation and Mailing Address of Authorized Representative;
    3. Request for Dissolution and the fact that dissolution does not prejudice the rights of any creditor;
    4. Reason for the Dissolution;
    5. Form, Manner, and Time when Stockholder/Member Notices were given;
    6. Names of Stockholders and Directors or Members and Trustees who approved the Dissolution; Provided: Majority of the Directors or Trustees, and Stockholders owning or controlling at least a majority of the Outstanding Capital Stock including the holders of non-voting shares or majority of the Members voted for the Dissolution;
    7. That the above-mentioned Stockholders and Directors, or Members and Trustees are the duly elected Directors or Trustees, and the Stockholders or Members of Record as of the date of the meeting;
    8. Details of Publication (i.e. name of newspaper, complete name of publisher, principal office of publisher, are of circulation, date when notice was published, and contents of notice as published); and
    9. That the Corporation has no pending case involving intra-corporate dispute.
  • Verification and Certification Against Forum Shopping– the Verified Request for Dissolution shall contain an affidavit and certification duly signed by the authorized representative of the corporation.
  • Supporting Documents:
    1. A notarized copy of the Board Resolution or Director’s/Trustee’s Certificate authorizing the dissolution and designating an authorized representative, signed by a majority of the board of directors or trustees and countersigned by the corporate secretary;
    2. Publisher’s Affidavit of Publication of the Notice of the Meeting;
    3. Latest General Information Sheet;
    4. Audited Financial Statements, except:
      • Where the applicant has ceased operations for at least one (1) year;
      • Where the applicant has no operation since incorporation;
      • Where the applicant is with total assets or liabilities of less than PhP600,000.00.
    5. Affidavit executed under oath by the President and Treasurer that:
      • That the dissolution is not prejudicial to the interest of creditors; and
      • There is no opposition from any creditors from the time of publication of the notice of dissolution up to the filing of the dissolution with the Commission.
    6. Bureau of Internal Revenue (“BIR”) Tax Clearance;
    7. Notarized Secretary’s Certificate of no pending case involving intra-corporate dispute;
    8. Clearance/favorable recommendation from other Departments of the Commission or from appropriate regulatory agencies, when necessary.
  • Withdrawal of Request for Dissolution– within fifteen (15) days from receipt by the Commission of the Verified Request for Dissolution, made in writing and duly verified by any incorporator, director, trustee, shareholder, or member and signed by majority of the directors or trustees, and stockholders owning or controlling at least majority of the outstanding capital stock or majority of the members who voted for the dissolution.
  • Verification of Withdrawal– the verified withdrawal of request for dissolution shall contain an affidavit duly signed by any incorporator, director, trustee, shareholder, or member, which shall allege:
    1. The allegations in the Verified Withdrawal of Request for Dissolution are true and correct based on his or her personal knowledge, or based on authentic documents;
    2. The Verified Withdrawal of Request for Dissolution is not filed to harass, cause unnecessary delay, or needlessly increase the cost of regulation and/or litigation;
    3. The factual allegations therein have evidentiary support, or if specifically identified, will likewise have evidentiary support after reasonable opportunity for discovery.
  • Approval and Issuance of Certificate– fifteen days from receipt of the Verified Withdrawal of Request for Dissolution the Commission shall issue the Certificate of Dissolution. The Dissolution shall take effect only upon the issuance by the Commission of the Certificate of Dissolution.
  • Dissolution by Shortening Corporate Term (Sec. 136)
    • Documentary Requirements where Proposed Expiration of the Corporate Term is 1 Year or Morefrom approval of application submitted to the Corporate and Partnership Registration Division (“CPRD”) of CRMD or SEC Extension Offices:
      1. Cover Sheet;
      2. Notarized Directors’ Certificate signed by majority of the directors or trustees and the corporate secretary, attesting that: a) the dissolution by shortening of corporate term was approved by majority of the board of directors/trustees and ratified by at least 2/3 vote of the stockholders representing the outstanding capital stock, including holders of non-voting shares/members; b) date and place of the stockholders’ or members’ meeting; and c) the tax identification number of the signatories which shall be placed below their names.
      3. Amended Articles of Incorporation;
      4. Compliance Monitoring Division (“CMD”) Monitoring Clearance;
      5. Notarized Secretary’s Certificate of no pending case involving intra corporate dispute;
      6. Clearance/favorable recommendation from other Departments of the Commission or from the appropriate regulatory agency, when needed.
    • Documentary Requirements where Proposed Expiration of the Corporate Term is Less than 1 yearfrom approval of application submitted to the Corporate and Partnership Registration Division (“CPRD”) of CRMD or SEC Extension Offices:
      1. Cover Sheet;
      2. Notarized Directors’ Certificate signed by majority of the directors or trustees and the corporate secretary, attesting that: a) the dissolution by shortening of corporate term was approved by majority of the board of directors/trustees and ratified by at least 2/3 vote of the stockholders representing the outstanding capital stock, including holders of non-voting shares/members; b) date and place of the stockholders’ or members’ meeting; and c) the tax identification number of the signatories which shall be placed below their names.
      3. Amended Articles of Incorporation;
      4. Audited Financial Statements as of last fiscal year, except:
        • Where the applicant has ceased operations for at least 1 year;
        • Where the applicant has no operation since incorporation; and
        • Where the applicant corporation (stock or nonstock) with total assets or liabilities of less than PhP600,000.00.
      5. Affidavit executed under oath by the President and Treasurer that:
        • The dissolution is not prejudicial to the interest of the creditors; and
        • There is no opposition from any creditors from the time of publication of the notice of dissolution up to the filing of the dissolution with the Commission;
      6. BIR Tax Clearance;
      7. Publisher’s Affidavit of Publication of the Notice of Meeting;
      8. Notarized Secretary’s Certificate of no pending case involving intra corporate dispute; and
      9. Clearance/favorable recommendation from other Departments of the Commission or from the appropriate regulatory agency, when needed.
    • The proposed expiration of the corporate term for all applications for amendment filed under Sec. 136 of the RCC must contemplate a future date.
    • Effectivity of Dissolution– upon expiration of the shortened term as stated in the approved amended articles of incorporation, the corporation shall be deemed dissolved without any further proceedings, subject to the provisions of this Code on Liquidation. Dissolution shall automatically take effect on the day following the last day of the corporate term stated in the amended articles of incorporation, without need of issuance of certificate of dissolution.
  • Involuntary Dissolution (Sec. 138 and Sec. 6i of PD 902-A)
    • Grounds under Section 138 of the RCC – Commission may, motu proprio, or upon filing of a verified complaint by any interested party, dissolve a corporation based on the following:
      1. Non-use of corporate charter;
      2. Continuous inoperation;
      3. Receipt of a lawful order dissolving the corporation;
      4. Upon finding by final judgment that the corporation procured its incorporation through fraud; and
      5. Upon finding by final judgment that the corporation:
        • Was created for the purpose of committing, concealing or aiding the commission of securities violations, smuggling, tax evasion, money laundering or graft and corrupt practices;
        • Committed or aided in the commission of securities violations, smuggling, tax evasion, money laundering, or graft and corrupt practices, and its stockholders knew; and
        • Repeatedly and knowingly tolerated the commission of graft and corrupt practices or other fraudulent or illegal acts by its directors, trustees, officers, or employees.

*when another agency or tribunal has been identified by law as the primary regulator, investigative or administrative body for specific cases such as smuggling, tax evasion, money laundering, or graft and corrupt practices, all complaints or petitions for revocation shall be endorsed to said primary regulator, investigative or administrative body, for their appropriate action.

  • Grounds under Section 6i of PD 902-A
    1. Fraud in the procurement of certificate of registration;
    2. Failure to file or register any of the following for a period of at least 5 years of a) Financial Statements; b) General Information Sheet; and c) Stock and Transfer Book or Membership Book.
  • Documentary Requirements for verified complaint filed by interested parties submitted to the CRMD and SEC Extension Office:
    1. Verified Complaint/Petition;
    2. Certificate against Forum Shopping;
    3. Secretary’s Certificate authorizing the filing of the complaint, if filed by a corporation; and
    4. Affidavits and other documentary evidence to support the claim.

Forfeiture of Assets – If a corporation is ordered dissolved by final judgment its assets, after payment of liabilities, shall, upon petition of the Commission with the appropriate court, be forfeited in favor of the national government. Such forfeiture shall be without prejudice to the rights of innocent stockholders and employees for services rendered, and to the application of other penalties or sanctions under the RCC or other laws.

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DISQUALIFICATION OF DIRECTORS, TRUSTEES AND OFFICERS OF CORPORATIONS; AND THE GUIDELINES ON THE PROCEDURE FOR THEIR REMOVAL.

DISQUALIFICATION OF DIRECTORS, TRUSTEES AND OFFICERS OF CORPORATIONS; AND THE GUIDELINES ON THE PROCEDURE FOR THEIR REMOVAL. (SEC Memorandum Circular No. 04 s. 2022)

  • Under Section 26 of Republic Act No. 11232, or the Revised Corporation Code of the Philippines (“RCC”), a person shall be disqualified from being a director, trustee, or officer of any corporation if, within five (5) years prior to the election or appointment as such, the person was:
    • Convicted by final judgment;
      • Of an offense punishable by imprisonment for a period exceeding six (6) years;
      • For violating this Code; and
      • For violating Republic Act No. 8799, otherwise known as “The Securities Regulation Code.
    • Found administratively liable for any offense involving fraudulent acts; and
    • By a foreign court or equivalent foreign regulatory authority for acts, violations or misconduct similar to those enumerated in paragraphs (a) and (b) above;
  • The same section provides that the SEC or the Philippine Competition Commission (“PCC”) may impose qualifications or other disqualifications in its promotion of good corporate governance or as a sanction in its administrative proceedings.
  • Section 27 of the RCC authorizes SEC to motu proprio, or upon a verified complaint, and after due notice and hearing, order the removal of a director or trustee elected despite the disqualification, or whose disqualification arose or is discovered subsequent to the election, and the removal of such shall be without prejudice to other sanctions that the SEC may impose on the board of directors/trustees who, with knowledge of the disqualification, failed to remove such director/trustee.
  • Administrative Sanctions – In addition to the removal as a director, trustee and/or officer, SEC may issue a permanent cease and desist order, and/or impose a fine ranging from PhP10,000.00 – PhP400,000.00 for each violation of the SEC’s orders, or any of the provisions of the RCC on the disqualifications and removal of directors, trustees and/or officers.
  • One Person Corporations – In case of removal of the sole director under these rules, the nominee shall take the place of the single stockholder as director and shall manage the corporation’s affairs.
  • Disqualifications of Directors, Trustees and Officers – In addition to the above, the following are additional grounds for the disqualification of directors, trustees and officers:
    • Within the tenure, the director, trustee or officer was convicted by final judgment of an offense punishable by imprisonment for a period exceeding 6 years;
    • Within the tenure, the director, trustee or officer was convicted by final judgment for violating the RCC;
    • Within the tenure, the director, trustee or officer was convicted by final judgment for violating the SRC;
    • Within 5 years prior to the election or appointment, the director, trustee or officer was found administratively liable, by final judgment, for any offense involving fraudulent acts punishable under the RCC, SRC, and other laws, rules and regulations enforced or implemented by the SEC;
    • Within the tenure, the director, trustee or officer was found administratively liable, by final judgment, for any offense involving fraudulent acts punishable under the RCC, SRC, and other laws, rules and regulations enforced or implemented by the SEC;
    • Within 5 years prior to the election or appointment, the director, trustee or officer was convicted or found administratively liable by a foreign court or equivalent foreign regulatory authority for acts, violations or misconduct similar to those enumerated in paragraphs (a) and (b) of Section 26 of the RCC;
    • Within the tenure, the director, trustee or officer was convicted or found administratively liable by a foreign court or equivalent foreign regulatory authority for acts, violations or misconduct similar to those enumerated in paragraphs (a) and (b) of Section 26 of the RCC; or

Within 5 years prior to the election or appointment, or within the tenure, the director, trustee or officer was found administratively liable, by final judgment, for refusal to allow the inspection and/or reproduction of corporate records.

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THE SEC EXTENDS THE DEADLINE TO SUBMIT MANDATORY DECLARATIONS UNDER BENEFICIAL OWNERSHIP GUIDELINES TO JULY 31, 2021 (SEC Notice, May 28, 2021)

SECURITIES AND EXCHANGE COMMISSION

 

THE SEC EXTENDS THE DEADLINE TO SUBMIT MANDATORY DECLARATIONS UNDER BENEFICIAL OWNERSHIP GUIDELINES TO JULY 31, 2021 (SEC Notice, May 28, 2021)

 

BUREAU OF INTERNAL REVENUE

 

QUARTERLY RETURNS TO BE USED TO REFLECT NEW RATES UNDER CREATE LAW

 

  • The BIR prescribes the guidelines in the filing of Quarterly Percentage Tax Return (BIR Form No. 2551Q) starting on the quarter ending July 31, 2020

 

 

BIR Form No. 1702Q January 2018
  • Available in EFPS
  • Reduced rate per CREATE Act is included.
  • EFPS files may also use 1702Q using Offline e-BIR Forms Package v.7.9.1, but shall proceed to payment using the eFPS facility. (RMC No. 68-2021, May 26, 2021)
 

BIR Form No. 1702Qv2008C
  • 2008 version shall be used for eBIR Forms
  • 2018 version is not yet available
  • Version is available in eBIR Forms Package v.9.1
  • Payment may be made either manually or online

 

  •  Revenue Memorandum Circular  66-2021, May 24, 2021 and Revenue Memorandum Circular  68-2021, May 26, 2021

 

CLARIFICATIONS ON REDUCTION OF PERCENTAGE TAX FROM 3% TO 1%

 

  • The BIR clarifies the issues relative to the temporary reduction of Percentage Tax rate imposed under Section 116 of the NIRC of 1997, as amended by Section 13 of RA No. 11534 (CREATE Act)

 

Points for clarification Treatment
Decrease of percentage tax rate from 3% to 1%

(July 1, 2020 to June 30, 2023)

 Applies to:

  • Corporate taxpayers and Self-employed individuals and professionals; and
  • Whose gross sales or receipts do not exceed P3 Million

Exception: Cooperatives and self-employed individuals and professionals availing 8% income tax rate
Non-VAT registered taxpayers who used 3% for Q3 and Q4 of 2020 to effectivity of IRR (RR 40-2021 April 8, 2021) implementing percentage tax
  • They need to amend their percentage tax using the 1% rate to reflect the overpaid tax.
  • Overpaid tax to be carried over the succeeding period will not be subject to penalty

 

 In case 2551Q Form only provides refund:

  • In case of manual filing – Don’t mark “to be refunded” or “to be issued TCC” but write “To be Carried Over”

In case of eFPS and eBIR Forms:

  • Option “to be Issued Tax Credit Certificate” shall be marked as a workaround procedure
  • Presumption: taxpayer will carry over
  • If refund is applicable, file BIR From 1914 (Application for tax credit/refund)

 
Refund for overpaid tax
  • Refund is not allowed because the intention is to carry-over the overpaid percentage tax.
  • Exception:
    • Taxpayer shifted from Non-VAT to VAT-registered status; or
    • Taxpayer has opted to avail of 8% income tax rate at the beginning of 2021
Taxpayer inadvertently marked refund or issuance of TCC but intends carry over
  • Presumption: Overpaid amount will be carried over.
  • Once carried-forward, the option is automatically superseded.
Carry-over without amendment of return to any quarter/s starting 2020 Carry-over will still be allowed.
Individual taxpayer under a job order or service agreement with the government under substituted filing
  • The government agency will avail of the refund.
  • Individuals shall issue an authorization and surrender the BIR Form 2306 to the government agency.
  • Government agencies shall amend the previously filed returns including the Alphalists but the reduction or resulting overpayment shall only be to the extent of the amount to be refunded.
Taxpayer claimed as deduction under taxes and licenses in 2020 ITR the overpaid percentage tax Carry-over or refund shall no longer be allowed.
Adjustment in the audited financial statements AFS need not be amended, but overpayment shall be reflected as a reconciling item in the amended ITR.

 

(Revenue Memorandum Circular  67-2021, May 24, 2021)

 

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THE SEC EXTENDS THE DEADLINE TO SUBMIT FORMS/NOTICES ON CREATION/DESIGNATION OF E-MAIL ACCOUNT ADDRESSES AND MOBILE PHONE NUMBERS FOR TRANSACTIONS WITH THE COMMISSION UNTIL JUNE 30, 2021

THE SEC EXTENDS THE DEADLINE TO SUBMIT FORMS/NOTICES ON CREATION/DESIGNATION OF E-MAIL ACCOUNT ADDRESSES AND MOBILE PHONE NUMBERS FOR TRANSACTIONS WITH THE COMMISSION UNTIL JUNE 30, 2021

  • The forms/notices of the MC 28, s. 2020 online through email platform MC28_S2020@sec.gov.ph.
  • Filing of the forms/notices beyond June 30, 2021 shall be considered as non-compliant and will be subject to penalty in the amount of P10,000.00 (SEC Notice, May 7, 2021)

 

CLARIFICATIONS ON CORPORATE INCOME TAXATION

The BIR clarifies certain provisions of Revenue Regulations (RR) No. 5-2021 relative to Corporate Income Taxation (Revenue Memorandum Circular. 62-2021, May 27, 2021)

 

Items under RR 5-2021 Clarifications
“Total Asset” in case of 20% tax rate
  • Total Assets is net of:
  • Depreciation and
  • Allowance for bad debts
  • Excluded: Land where the business entity’s office, plant and equipment are situated; amount to be excluded: Cost/fair market value, depending on what is reflected in the financial statements
  • Included:
  • Land held primarily for sale to customers or land held for investment purposes;
  •  Land being used as banana plantation
  • Land being leased
  • Portion is used in business; rest is on lease = prorate the amount of land based on the area.
Private Educational Institutions distributing dividends to stockholders
  • Rate is either 25% or 20%
  • 1% is applicable to non-profit schools*
Section 5: Conditions for exemption from income tax of foreign-sourced dividends received by domestic corporation:

 
  • If the Certification shall state non-utilization of the dividends received, the unutilized dividends shall be declared as taxable income, and the corresponding tax due shall be subject to interest, surcharges and penalties

 
Dividends received by a domestic corporation from a resident foreign corporation (RFC)
  • Tax treatment depends on the source of income of the RFC
  • Treated as derived from sources within PH (Exempt from income taxes)
  • Exception:
  • Less than fifty percent (50%) of the gross income of the foreign corporation for the three-year period ending with the close of its taxable year preceding the declaration of such dividends (or for such part of the period as the corporation has been in existence) was derived from sources within the Philippines – (Considered sourced without and must comply with Section 5 to avail of income tax exemption)

 
4th Year of Business Operation for purposes of MCIT
  • Means fourth taxable year immediately following the year in which such corporation commenced its business operation
  • Thus, if the corporation commenced its business operations in 2017, MCIT may be imposed beginning the year 2021, if it exceeds the regular income tax. The taxable year in which business operations commenced shall be the year in which the corporation is registered with the BIR

 
Additional allowable deduction of 1/2 of actual training expenses
  • No distinction as to which type of industry can claim the deduction, subject to requirements:
  • The labor training expenses shall not be more than ten percent (10%) of the Direct Labor Wage;
  • The labor training expenses are incurred for skills development of enterprise-based trainees;
  • The enterprise-based trainees are enrolled in public senior high school, public higher education institutions, or public technical and vocational institutions for the taxable year in which the labor training expenses are claimed;  The training is covered by an apprenticeship agreement under Presidential Decree (PD) No. 442 or the Labor Code of the Philippines; and:
  • The Company claiming the additional deduction is granted an authority to offer training programs for skills development as certified by the Department of Education (DepED), Technical Education and Skills Development Authority (TESDA) or Commission on Higher Education (CHED), as applicable.
  •  Training expenses which pertain to training/s of employees under supervisory, managerial, administrative and support functions should not be included in ‘the computation
  • The resulting amount then shall be subject to a cap of not more than ten percent (10%) of the Direct Labor Wage. The “direct labor” is that portion of salaries and wages which can be identified with and charged directly to a product or to a project or service on a consistent basis.

 
*we do not agree.

 

 

 

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PERSONS ON WHOSE BEHALF THE CORPORATION IS REGISTERED, NOMINATORS/PRINCIPALS OF THE NOMINEE INCORPORATORS/FIRST DIRECTORS/TRUSTEES AND SHAREHOLDERS APPLYING FOR REGISTRATION MUST BE DISCLOSED TO THE SEC.

  • The SEC prescribes guidelines in Preventing the Misuse of Corporations for Illicit Activities through Measures Designed to Promote Transparency of Beneficial Ownership.
  • The SEC provides among others:
    • Issuance, sale or offer of bearer shares and bearer share warrants are prohibited.
    • Sale/transfer of shares of stock shall be disclosed and recorded in the Stock and Transfer Book of the issuing corporation within 30 days from the date of sale/transfer. Unless disclosed and recorded, the sale/transfer shall not be effective and binding on the issuer.
      • Exempt in this transaction are sales/transfers of shares of publicly listed companies through Philippine Stock Exchange but beneficial ownership information in the GIS shall remain to be disclosed.
    • Dividends shall be paid when the name of the stockholders appears in the records of the corporation as the owner of the shares of stock for which dividends are being paid.
      • Exempt in this transaction are dividend payments made by publicly listed companies to the PCD Nominee or similar entity authorized to act as depository and custodian of shares
    • Incorporators must disclose the person/s on whose behalf the registration of the corporation was applied for. Timeline: 30 days from the issuance of the company’s SEC registration.
      • Nominee incorporators or applicants for registration, as well as the nominee directors/trustees and nominee shareholders of the applicant corporation shall disclose to the SEC their respective principals or nominators. Otherwise, they shall submit to the SEC a declaration within the same period that they are not nominee incorporators/ nominee applicants/ nominee directors/ nominee subscribers, if such is the fact, and that they are not acting as such for and on behalf of another person.
      • Requirement is not applicable to PCD Nominee
    • Nominee’s period to submit disclosure statement:
      • Those became nominees before the effectivity of this Circular: 30 days from the effectivity.
      • Those became nominees on or after the effectivity of the Circular: 30 days from the time they assumed the role/started acting as nominee.
    • Exemption from Disclosure Requirements:
      • Covered institutions under Section 3(A) of the AMLA
      • SEC MC No. 16, series of 2018
      • Scope of exemption: nominee arrangements on products and services
    • Manner of submission: Online – in such form and manner as the Commission deems practicable.
      • The SEC shall:
        • Electronically acknowledge receipt of the disclosure;
        • Provide access to AMLC;
        • Maintain updated database
        • Not upload the information to the SEC’s accessible database but will be readily available upon request by the authorities.
      • Corporations must keep and preserve in its principal office the information relating to the beneficial owner.
      • Penalty ranges from P5,000 to P2,000,000, suspension or revocation of the certificate of incorporation, other penalties which the SEC may impose, including filing of criminal charges.
      • For your easy reference, the Circular may be accessed HERE. (SEC Memorandum Circular No. 1, 27 January 2021).

 

OFFER TO PUBLIC OF FRANCHISE PARTNERSHIP PROGRAM PARTAKES OF THE NATURE OF SECURITIES IN THE FORM OF INVESTMENT CONTRACT. (EIPD-2020-0073, 08 January 2021).

 

CEBU SATELLITE OFFICE IS NOW OPEN. For your easy reference, the Notice may be accessed HERE. (SEC Notice, 02 February 2021).

 

BUREAU OF INTERNAL REVENUE

 

BIR DEADLINES FROM FEBRUARY 8 TO 14, 2021 . A gentle reminder on the following deadlines, as may be applicable:

 

DATE FILING/SUBMISSION
 

February 8, 2021

 · Submission of All Transcript Sheets of ORBs used by Dealers of Automobiles/Manufacturers/Toll Manufacturers/Assemblers/Importers of Alcohol Products, Tobacco Products, Petroleum Products, Non-Essential Goods, Sweetened Beverage Products, Mineral Products & Automobiles – Month of January 2021

· E-Submission of Monthly e-Sales Report of All Taxpayers using CRM/POS with TIN ending in Even Number – Month of January 2021
 

February 10, 2021

 Submission of the following (For the Month of January 2021)· Transcript Sheets of 2222-ORB

· 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

· Information Return on Releases of Refined Sugar by the Proprietor or Operator of a Sugar Refinery or Mill

· Monthly Report of DST Collection and Remitted by the Government Agency

E-submission – Monthly e-Sales Report of All Taxpayers using CRM/POS with TIN ending in Odd Number

E-FILING/FILING & e-PAYMENT/PAYMENT (For the month of January 2021)

· 1600 (VT/PT Withheld) and Monthly Alphalist of Payees (MAP) – eFPS & Non-eFPS Filers

· 1606 – Withholding Tax Remittance Return For Onerous Transfer of Real Property Other Than Capital Asset (including Taxable and Exempt)

· 0620 (Monthly Remittance Form of Tax Withheld on the Amount withdrawn from the Decedent’s Deposit Account) – eFPS & Non-eFPS Filers

e-FILING & e-PAYMENT/REMITTANCE – Month of January 2021

· 1600 (VT/PT Withheld) and 1601-C National Government Agencies (NGAs)

· FILING & PAYMENT Month of January 2021

· 1601-C, 0619-E and 0619-F – Non-eFPS Filers

· 2200-C (Excise Tax Return for Cosmetic Procedures) with Monthly Summary of Cosmetic Procedures Performed

FILING & PAYMENT/REMITTANCE – Month of January 2021

· 2200-M Excise Tax Return for the Amount of Excise Taxes Collected from Payment Made to Sellers of Metallic Minerals

 
 

February 11, 2021

 · E-FILING of 1601-C, 0619-E and 0619-F – eFPS Filers under Group E for the Month of January 2021
 

February 12, 2021

 · E-FILING of 1601-C, 0619-E and 0619-F – eFPS Filers under Group D for the Month of January 2021
February 13, 2021 · E-FILING of 1601-C, 0619-E and 0619-F – eFPS Filers under Group C for the Month of January 2021
February 14, 2021 · E-FILING of 1601-C, 0619-E and 0619-F – eFPS Filers under Group B for the Month of January 2021

 

THE BIR ANNOUNCES THE AVAILABILITY OF THE BIR MOBILE TAXPAYER IDENTIFICATION NUMBER VERIFIER APPLICATION.

  • The BIR Mobile TIN Verifier App is a service channel for taxpayers to send online TIN validation and TIN inquiry using their mobile phones with real-time response from the concerned BIR Office.
  • However, acceptance of walk-in taxpayers to get the service shall still be available in all RDOs to serve our taxpayers with no access to the said mobile service.
  • For your easy reference, the Circular may be accessed HERE. (Revenue Memorandum Circular No. 13-2021, 27 January 2021).

 

VAT REFUNDS FILED ON OR AFTER JANUARY 19, 2021 SHALL BE PROCESSED PURSUANT TO REVENUE MEMORANDUM ORDER NO. 47-2020.

  • The BIR clarifies the effectivity date of Revenue Memorandum Order No. 47-2020 which imposed new documentary requirements for the processing of VAT Refund Claims pursuant to Section 112 of the Tax Code of 1997, as amended.
  • It clarifies:
    • VAT refund claims filed prior to January 19, 2021 shall be filed and processed following the guidelines and procedures set forth in Revenue Memorandum Circular No.47-2019 and RMO No. 25-2019; and
    • VAT refund claims filed on or after January 19, 2021, the effectivity date of RMO No. 47-2020, shall be filed and processed in accordance with the guidelines and procedures indicated thereto.
  • For your easy reference the issuance may be accessed HERE. (Revenue Memorandum Circular No. 14-2021, 27 January 2021).

 

THE BIR ANNOUNCES THE AVAILABILITY OF CENTRAL BUSINESS PORTAL (CBP)

  • CBP is an online system which serves a a central system to receive applications and captures application data involving business-related transactions from difference government agencies (SEC, BIR, SSS, PhilHealth, and Pag-Ibig)
  • Features:
    • Registration of Corporations with SEC  and issuance of the corresponding Company Registration Number
    • Issuance of Tax Identification Number of new corporations
    • Identification of the national internal revenue taxes which the new corporation will be liable to
    • Payment of the Annual Registration Fee of P500 and Loose Documentary Stamp Tax of P30 through the ePayment facilities or manually at the Revenue District office
    • Generation of BIR electronic Certificate of Registration (COR). The electronic COR bears a QR Code that serves as a security feature to prove authenticity of the COR
      • After securing the BIR electronic COR through CBP. The taxpayer shall proceed to the RDO indicated in the electronic COR, to buy its BIR Printed Receipts/Invoices in order to start its business operation immediately after its registration. Otherwise, it may apply for Authority to Print its own receipts/invoices to be printed by the BIR Accredited Printers
    • For its initial implementation, the CBP shall be available to the following domestic corporations:
      • Corporations with 2 to 4 incorporators
      • Regular corporations whose incorporators are juridical entities and/or the capital structure is not covered by 25%-25% rule; and
      • One Person Corporation.
    • For your easy reference, the issuance may be accessed HERE. (Revenue Memorandum Circular No. 15-2021, 27 January 2021).

 

THE BIR EXTENDS THE DEADLINE FROM JANUARY 31, 2021 TO FEBRUARY 28, 2021 OF THE FILING OF BIR NOS. 1604-C AND 1604-F INCLUDING 4TH QUARTER AND ANNUAL ALPHABETICAL LIST OF EMPLOYEES/PAYEES FROM WHOM TAXES WERE WITHHELD (ALPHALIST) USING THE ALPHALIST DATA ENTRY AND VALIDATION MODULE VERSION 7.

  • Resubmission of alphalist that were already submitted prior to the issuance of this MRC using the old version of the module is no longer required.
  • For easy reference, the issuance may be accessed HERE (Revenue Memorandum Circular No. 17-2021, 26 January 2021).

 

COPIES OF CERTIFICATE OF COMPENSATION PAYMENT/TAX WITHHELD FOR COMPENSATION PAYMENT WITH OR WITHOUT TAX WITHHELD (BIR FORM NO. 2316) WITHOUT THE SIGNATURE OF THE CONCERNED EMPLOYEE SHALL BE ACCEPTED BY THE BIR, PROVIDED THAT THE CERTIFICATES ARE DULY SIGNED BY THE AUTHORIZED REPRESENTATIVE OF THE TAXPAYER-EMPLOYER; TAXPAYERS WHO HAVE ALREADY FILED THEIR TAX RETURNS ONLINE THRU THE FACILITIES OF EFPS AND OFFLINE E-BIR FORMS PACKAGE NEED NOT SUBMIT HARD COPIES THEREOF TO THE RDO WHERE THEY ARE DULY REGISTERED.

  • The BIR clarifies on the filing of BIR Form Nos. 1604-CF, 1604-E and Other Matters
  • The BIR also provides type of forms and version of forms depending on the filing facility.
  • For easy reference, the issuance may be accessed HERE. (Revenue Memorandum Circular No. 18-2021, 27 January 2021).

 

 

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DEADLINE FOR THE SUBMISSION OF FORMS/NOTICES WITHOUT PENALTY IN COMPLIANCE WITH THE REQUIREMENT TO CREATE AND/OR DESIGNATE EMAIL ACCOUNT ADDRESS AND CELLPHONE NUMBER HAS BEEN EXTENDED TO FEBRUARY 21, 2021

  • The online submission (via MC28_S2020@sec.gov.ph) of the forms/notices must be done on or before the above-mentioned deadline, while the filing of the hard copies of the said forms/notices shall be optional.
    • Filing of hard copies may be done via submission/appointment to ICTD-ERMD Receiving Unit.
  • For your easy reference, the Circular may be accessed (SEC Notice, January 18, 2021).

 

CORPORATIONS INTENDING TO RETAIN THEIR SPECIFIC CORPORATE TERM MAY FILE NOTICE TO THE SEC ON OR BEFORE FEBRUARY 23, 2021; CORPORATIONS WHO FAIL TO SUBMIT THE SAID NOTICE ON THE SAID DATE, SHALL BE DEEMED TO HAVE SELECTED A PERPETUAL TERM.

  • The SEC notifies the public of the online and manual submission of Notice to Retain Specific Corporate Term (“Notice”).
  • The existing corporations who intend to retain their specific corporate term, may file electronically their Notice with attachment of Director’s Certificate on or before February 23, 2021 through SEC’s email (MC22_S2020@sec.gov.ph)
  • Hard copies of the said Notice and Director’s Certificate must also be filed through the Company Registration Monitoring Department (CRMD) Receiving Unit, for the issuance of a Certificate of Filing of the said Notice, subject to payment of Certification fees.
  • Corporations who fail to submit the said Notice by February 23, 2021, shall be deemed to have selected a perpetual term.
  • For your easy reference, the Circular may be accessed HERE(SEC Notice, 13 January 2021).

 

BUREAU OF INTERNAL REVENUE

 

BIR DEADLINES FROM JANUARY 25 TO 31, 2021 . A gentle reminder on the following deadlines, as may be applicable:

 

DATE FILING/SUBMISSION
 

January  25, 2021

 · Submission of Quarterly Summary List of Sales/Purchases/Importations by a VAT Taxpayers – Non-eFPS Filers – For the Quarter ending December 31, 2020

· Sworn Statements of Manufacturer’s or Importer’s Volume of Sales of each particular brand of Alcohol, Tobacco Products & Sweetened Beverage Products – For the Quarter ending December 31, 2020

· e-FILING/FILING & e-PAYMENT/PAYMENT of 2550Q (Quarterly Value-Added Tax Return) – eFPS & Non-eFPS Filers – For the Quarter ending December 31, 2020

· e-FILING/FILING & e-PAYMENT/PAYMENT of 2551Q (Quarterly Percentage Tax Return) – eFPS & Non-eFPS Filers – For the Quarter ending December 31, 2020

· e-FILING & e-PAYMENT of 2550M (Monthly Value-Added Tax Declaration) – eFPS Filers under Group A – Month of December 2020

· e-PAYMENT of 2550M (Monthly Value-Added Tax Declaration) – eFPS Filers under Group E, D, C & B – Month of December 2020
 

January  29, 2021

 · e-FILING/FILING & e-PAYMENT/PAYMENT of 1702Q (Quarterly Income Tax Return For Corporations, Partnerships and Other Non-Individual Taxpayers) and Summary Alphalist of Withholding Taxes (SAWT) – Fiscal Quarter ending November 30, 2020
 

January  30, 2021

 · Registration of computerized Books of Accounts & Other Accounting Records in Electronic Format – Calendar Year ending December 31, 2020

· Submission of Inventory List – Calendar Year ending December 31, 2020

· Submission of e-Filed 1702-RT/EX/MX with Audited Financial Statement (AFS), 1709 (if applicable), and Other Attachments through Electronic Submission of Audited Financial Statements (eAFS) or Manually – Fiscal Year ending September 30, 2020

· e-Submission of Quarterly Summary List of Sales/Purchases/Importations by a VAT Taxpayers – eFPS Filers – For the Quarter ending December 31, 2020
 

January  31, 2021

 · Submission of Sworn Statement by every lessee/Concessionaire/ Owner/Operator of Mines or Quarry/Processor of Minerals/Producers or Manufacturer of Mineral Products – 2nd Semester of 2020

· Submission of Sworn Declaration of Motels and Other Similar Establishments – Taxable Year 2020

· Submission of Sworn Statement by Senior Citizens whose Annual Taxable Income does not exceed the poverty level as determined by the NEDA thru the NSCB – Taxable Year 2020

· Submission of Sworn Certification from the International Carrier stating that there is no change in the Domestic laws of its Home Country Granting Income Tax Exemption to Philippine Carriers – Calendar Year 2021 For Exemptions issued in 2020

· Submission of Annual Information by all Accredited Tax Agents/Practitioners to be submitted to RNAB/RRAB – Taxable Year 2020

· Submission of Annual Alphabetical List of Professionals/Persons who were issued Professional/Occupational Tax Receipt by LGUs – Calendar Year ending December 31, 2020

· Submission of Contract of Lease and Information on Lessee/Lessors/Sub-Lessors of Commercial Establishments, Buildings or Spaces for Tenants – 2nd Semester of 2020

· Submission of Notarized Income Payor/Withholding Agent’s Sworn Declaration with List of Payees – Calendar Year 2021

· e-FILING/FILING  of 1604-C, 1604-F and Related Alphalist – Calendar Year 2020

· e-FILING/FILING & e-PAYMENT/PAYMENT  of 1601-EQ, 1601-FQ and Quarterly Alphalist of Payees (QAP) – eFPS & non-eFPS Filers – For the Quarter ending December 31, 2020

· e-FILING/FILING & e-PAYMENT/PAYMENT  of 1602Q and 1603Q – eFPS & Non-eFPS Filers – For the Quarter ending December 31, 2020

· e-FILING/FILING & e-PAYMENT/PAYMENT  of 1621 (Quarterly Remittance Return of Tax Withheld on the Amount Withdrawn from Decedent’s Deposit Account) – eFPS & Non-eFPS Filers – For the Quarter ending December 31, 2020

· e-PAYMENT/PAYMENT  – Annual Registration Fee for Every Head Office and/or Branch of Any Business Establishment – Calendar Year 2021

· DISTRIBUTION of 2304 – Certificate Excluding Compensation Income Not Subject to Withholding Tax – Calendar Year 2020

· DISTRIBUTION of 2316 – Certificate of Compensation Payment With or Without Tax Withheld – Calendar Year 2020
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THE SEC ALLOWS FINANCING COMPANIES (FC), LENDING COMPANIES (LC), AND ACCREDITED MICROFINANCE NGOS (MF-NGO) A STAGGERED BOOKING OF PROVISION FOR CREDIT LOSSES FOR ANNUAL PERIOD ENDING ON OR AFTER DECEMBER 31, 2020 (TO CONSIDER THOSE WITH FISCAL YEAR-END) FOR A MAXIMUM PERIOD OF FIVE (5) YEARS USING STRAIGHT-LINE AMORTIZATION METHOD TO BE RECOGNIZED IN THE PROFIT OR LOSS.

  • The SEC provides financial reporting relief for FCs, LCs, and accredited MG-NGOs.
  • It allows a staggered booking of provision for credit losses for annual period ending on or after December 31, 2020 (to consider those with fiscal year-end) for a maximum period of five (5) years using straight-line amortization method to be recognized in the profit or loss.
  • The said entities should prepare the audited financial statement in accordance with an industry-specific framework. SEC also prescribes the wordings to be provided.
  • The said entities should also provide disclosure on the impact of the relief.
  • For your easy reference, the Circular may be accessed (SEC Memorandum Circular No. 35, December 28, 2020).

 

THE SEC NOTIFIES THE PUBLIC OF ITS PAYMENT FACILITIES.

  • For your easy reference, the Circular may be accessed (SEC Notice, 8 January 2021).

 

BUREAU OF INTERNAL REVENUE

 

BIR DEADLINES FROM JANUARY 18 TO 24, 2021 . A gentle reminder on the following deadlines, as may be applicable:

 

DATE FILING/SUBMISSION
January  20, 2021  

· eFiling/Filing and ePayment of 1600 – WP – eFPS & Non-eFPS Filers – Month of December 2020

· ePayment of 1601-C – eFPS Filers under Group E, D, C, B & A – Month of December 2020

· Submission of Quarterly Information on OCWs or OFWs Remittances which are Exempt from DST to be furnished by the Local Banks and Non-Bank Money Transfer Agents – For the Quarter ending December 31, 2020

· Submission of Quarterly Report of Printer – For the Quarter ending December 31, 2020
January  21, 2021 · eFILING of 2550M (Monthly Value-Added Tax Declaration) – eFPS Filers under Group E – Month of December 2020
January  22, 2021 · e-FILING of 2550M (Monthly Value-Added Tax Declaration) – eFPS Filers under Group D – Month of December 2020
January  23, 2021 · e-FILING of 2550M (Monthly Value-Added Tax Declaration) – eFPS Filers under Group C – Month of December 2020
January  24, 2021 · e-FILING of 2550M (Monthly Value-Added Tax Declaration) – eFPS Filers under Group B – Month of December 2020

 

NET OPERATING LOSS FOR TAXABLE YEARS 2020 AND 2021 SHALL BE ALLOWED TO BE CARRIED OVER AS A DEDUCTION FOR THE NEXT FIVE (5) CONSECUTIVE TAXABLE YEARS IMMEDIATELY FOLLOWING THE YEAR OF SUCH LOSS; A FISCAL YEAR (FY) WILL FALL ON A PARTICULAR TAXABLE YEAR DEPENDING ON THE NUMBER OF MONTHS IT HAS ON THE TWO (2) YEARS INVOLVED; THOSE COMPANIES WITH FISCAL YEARS ENDING BEFORE JULY 31, 2020 AND FISCAL YEARS ENDING AFTER JUNE 30,2022 WHICH INCURRED NET OPERATING LOSS ARE ONLY ALLOWED TO CARRY-OVER THE LOSS FOR THE NEXT THREE (3) CONSECUTIVE TAXABLE YEARS.

  • The BIR clarifies Revenue Regulations No. 25-2020 on the availment of NOLCO for taxpayers adopting fiscal year. The said Regulations, in conformity with the law, stated that, “unless otherwise disqualified from claiming the deduction, the business or enterprise which incurred net operating loss for taxable years 2020 and 2021 shall be allowed to carry over the same as a deduction from its gross income for the next five (5) consecutive taxable years immediately following the year of such loss.”
  • Under existing revenue issuances, a fiscal year (FY) will fall on a particular taxable year depending on the number of months it has on the two (2) years involved. Thus, a FY ending on March 31, 2020 will fall on the taxable year 2019 since it has nine (9) months in 2019 and only three (3) months in2020. In the case of FY ending on June 30,2021, the beginning of which is July 1, 2020, it is considered as taxable year 2020 since it has more days in 2020 (184 days) than in 2021 (181 days).
  • Based on the above, the following FY ending on the stated months are counted as:

 

Taxable Year 2020 Taxable Year 2021
FY ending July 31, 2020 FY ending January 31, 2021 FY ending July 31, 2021 FY ending January 31, 2022
FY ending August 31, 2020 FY ending February 28, 2021 FY ending August 31, 2021 FY ending February 28, 2022
FY ending September 30, 2020 FY ending March 31, 2021 FY ending September 30, 2021 FY ending March 31, 2022
FY ending October 31, 2020 FY ending April 30, 2021 FY ending October 31, 2021 FY ending April 30, 2022
FY ending November 30, 2020 FY ending May 31, 2021 FY ending November 30, 2021 FY ending May 31, 2022
FY ending June 30, 2021 FY ending June 30, 2022

 

  • Those companies with fiscal years ending before July 31, 2020 and fiscal years ending after June 30,2022 which incurred net operating loss are only allowed to carry-over the loss as a deduction from its gross income for the next three (3) consecutive taxable years. They cannot avail of the extended period to carry-over the loss for another two (2) years.
  • For your reference, a copy of the issuance may be accessed (Revenue Memorandum Circular No. 138-2020, December 22, 2020)

 

THE BIR PRESCRIBES THE GUIDELINES IN THE FILING OF TAX RETURNS, INCLUDING THE REQUIRED ATTACHMENTS, AND PAYMENT OF INTERNAL REVENUE TAXES.

  • For your reference, a copy of the issuance may be accessed (Revenue Memorandum Circular No. 4-2021, January 8, 2021).

 

 TAXPAYERS INTENDING TO USE COMPUTERIZED ACCOUNTING SYSTEM (CAS), COMPUTERIZED BOOKS OF ACCOUNTS (CBA) AND/OR ITS COMPONENTS, INCLUDING THE ELECTRONIC STORAGE SYSTEM (ESS), MIDDLEWARE AND OTHER SIMILAR SYSTEMS (COLLECTIVELY KNOWN AS “SYSTEM”) SHALL NOT BE REQUIRED TO SECURE PERMIT TO USE (PTU), BUT SUBJECT TO POST-EVALUATION; BIR FORM 1900 IS NO LONGER REQUIRED.

  • The BIR provides simplified policies on the application for registration of Computerized Accounting System, Computerized Books of Accounts and/or its components, including Electronic Storage System, middleware and other similar systems.
  • It provides that all taxpayers intending to use CAS, CBA  and/or its Components, including the ESS, Middleware and Other Similar Systems shall not be required to secure PTU instead, shall be registered subject to the following policies:
    • Register the system by submitting the documentary requirements stated on the to the Revenue District Office (RDO) where the taxpayer is registered.
    • BIR Form No. 1900 – Application for Authority to Use Computerized Accounting System or Components thereof/Loose-Leaf Books of Accounts shall no longer be required for the submission of application for registration of the system.
    • The system shall comply with the standards set forth under the circular; otherwise, when discovered to have violated the said standards during post-evaluation or audit, the taxpayer-user shall be subject to penalties provided under RMO No. 7-2015 and other existing revenue issuances.
    • Upon submission of complete documentary requirements, an Acknowledgement Certificate (AC) shall be issued within three (3) working days from the receipt of the complete documents by the RDO where the taxpayer-user of the system is registered. Hence, Permit to Use CAS, CBA and/or Components shall no longer be required for the use and registration of the system upon approval of this circular.
    • System demonstration or pre-evaluation shall not be required prior to the use of the system. However, post-evaluation shall be conducted by the concerned RDO to determine compliance of the system registered with the BIR to the standards set forth in the circular.
    • All taxpayers with existing system shall NOT be required to apply for registration. The approved PTU previously issued by the BIR shall still be valid, except for the following circumstances:
      • PTU was revoked upon discovery of its non-compliance with existing revenue issuances during the conduct of authorized audit activity, Tax Compliance Verification Drive (TCVD) or Post-Evaluation.
      • Existence of major system enhancement or upgrade, which will require the filing of a new application for registration of the system
    • Taxpayer must submit a new application for registration in case of major system enhancement.
      • In case of any minor system enhancement, g., user interface modification, bug fixes, performance improvements, etc., the taxpayer must submit a written notification to their registered RDO/LT Office stating the specific minor enhancements on the system.
    • For your reference, a copy of the issuance may be accessed 

THE BIR ANNOUNCES THE AVAILABILITY OF THE ALPHALIST DATA ENTRY AND VALIDATION MODULE (VERSION 7.0) AND ITS UPDATED FILE STRUCTURES, STANDARD FILE NAMING CONVENTION AND JOB-AIDS.

  • The enhanced version now includes the Alphalists for BIR Form Nos. 1600-PT, 1600- V.T, 1604-C, 1604-F, 1604-E, BlR Form No. 1621 (Quarterly Remittance Return of Tax Withheld on the Amount Withdrawn from Decedent’s Deposit Account).
  • In addition, the generation process of the annual alphalists for 1604-E and 1604-F has been simplified under the Quarterly Alphalists of Payees, thus eliminating the need of manual re-encoding the information.

For your reference, a copy of the issuance may be accessed HERE. (Revenue Memorandum Circular No. 7-2021, January 8, 2021)

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FOREIGN CORPORATIONS ARE REQUIRED TO DISCLOSE BENEFICIAL OWNERS IN THE GENERAL INFORMATION SHEET; RESIDENT AGENT, COUNTRY OR REGIONAL/AREA HEAD OF THE FOREIGN CORPORATION SHALL EXERCISE DUE DILIGENCE IN OBTAINING, KEEPING, REPORTING AND UPDATING INFORMATION ON BENEFICIAL OWNERSHIP; SEC SHALL IMPOSE PENALTY FOR FAILURE TO COMPLY.

  • The SEC revises the General Information Sheet (GIS) of foreign corporations to include beneficial ownership information.
  • All SEC registered foreign corporations are required to disclose their beneficial owners in the GIS.
  • The resident agent, country or regional/area head of the foreign corporation shall exercise the due diligence required in obtaining, keeping, reporting, and updating information on its beneficial ownership
  • The SEC shall be timely apprised of all relevant changes in the submitted beneficial ownership information as they arise. Such change shall be indicated in the Notification Update Form and shall be submitted to the SEC within 30 days after such change occurred or became effective.
  • Company’s failure to disclose shall be subject to SEC penalty ranging from P10,000 to P100,000 and may be imposed twice or thrice depending on the amount of fund balance.
  • For your easy reference, the SEC guidelines and requirements may be accessed
  • Resident Agents, Country Head, Area or Regional Head of the foreign corporation, who failed to exercise the due diligence required in ensuring compliance with this requirement, shall be fined in the amount ranging from P5,000 to P50,000. For your reference, the regulation may be accessed (SEC Memorandum Circular No. 30 s. 2020, November 3, 2020)

 

BUREAU OF INTERNAL REVENUE

 

BIR ANNOUNCES E-BIR FORM PACKAGE VERSION 7.7

  • The BIR announces the availability of Offline Electronic Bureau of Internal Revenue Forms (eBIRForms) Package Version 7.7
  • The new Offline eBIR Forms package now includes 2018 version of 1604-C, 1604-F, 1604-E
  • The BIR Form Nos. 1604-C and 1604-F shall be filed on or before January 31 of the year following the calendar year in which the compensation payment and income payments subjected to final withholding taxes were paid or accrued. On the other hand, BIR Form No. 1604-E, shall be filed on or before March 1 of the year following the calendar year in which the income payments subjected to expanded withholding taxes or exempt from withholding tax were paid or accrued.
  • For your reference, the regulation may be accessed (Revenue Memorandum Circular No. 118-2020, November 5, 2020)

 

BIR FURTHER CLARIFIES THE RETIREMENT BENEFITS EXEMPT FROM INCOME TAX PURSUANT TO RA NO. 11494 (BAYANIHAN TO RECOVER AS ONE ACT) AS IMPLEMENTED UNDER RR NO. 29-2020.

  • An employee may not meet one of the conditions, particularly on the length of service under an approved employees’ retirement benefits plan. Nevertheless, the received retirement benefits is considered exempt from income tax since the same is based on the registered retirement plan with the BlR, and the employee retired and received the retirement benefits during the covered period of June 5 to December 31,2020 under the Republic Act No. 11494 or {he Bayanihan to Recover as One Act.
    • In case the employee is re-employed, re-employment occurring beyond the 12-month period will not render the retirement benefit subject to income tax. The 12-month period is reckoned from the date of retirement.
    • If the re-employment is within the 12-month period after the receipt of the retirement benefit, and the employee was re-employed by an entity related to the employer (i.e. subsidiary), the employee will be required to pay income tax due on the retirement benefits received.
  • The amount received is not exempt from income tax if the employee retired prior to June 5, 2020 even though he received the retirement benefit is received within the covered period (i.e. October 2020); similarly, if the taxpayer retired within the covered period, but received the retirement benefit outside the period, the benefit shall not be exempt from income tax.
  • Only the amount received covered by the registered retirement plan will be exempt from income tax. The amount in excess of what is within the retirement plan which was offered by the company to entice employees to retire shall be taxable.
  • Even though the Company has no registered retirement plan with the BIR, retirement benefit under the labor laws is not subject to income tax. (i.e. 60-65 years old and 5 or more years of service). This applies even if the employee was re-hired.
  • For your reference, the Circular may be accessed (Revenue Memorandum Circular No. 120-2020, November 9, 2020)

 

COURT OF TAX APPEALS DECISIONS

 

PHP 4 MILLION CLAIM OF REFUND OF EXCESS AND UNUTILIZED CREDITABLE WITHHOLDING TAX GRANTED; TAXPAYER MUST SIGNIFY IN ITS RETURN ITS INTENTION TO REFUND; REFUND MUST BE FILED BOTH ADMINISTRATIVELY AND JUDICIALLY WITHIN 2 YEARS FROM THE FILING OF FINAL ADJUSTED RETURN; A CLAIM OF CWT, IF DENIED, MAY BE CARRIED OVER BACK TO THE ANNUAL ITR AS EXCESS CREDIT.

 

  • The CTA granted the refund of excess and unutilized creditable withholding taxes (CWT), for the following reasons:
    • The taxpayer signified in its return its intention to refund.
    • Petitioner timely filed both its administrative and judicial claims for refund within two (2) years from the time of filing of final adjusted return or annual ITR.
    • The excess CWT sought to be refunded is properly substantiated with BIR Form No. 2307 issued by the taxpayer’s income payors.
    • The income upon which the excess CWT was withheld was included in the annual ITR by showing the audited financial statements and amended annual ITR.
    • The taxpayer was able to account for the prior year’s excess tax credits.
      • A CWT refund claim, if denied, may be carried over back to the Annual ITR as an excess CWT that may be used to pay off tax for the current taxable year.
    • The taxpayer does not have to prove actual remittance of the taxes to the BIR. (Sonoma Services, Inc. v. CIR, CTA Case No. 9808, October 1, 2020)

 

PHP 8 MILLION CLAIM FOR REFUND OF EXCESS AND UNUTILIZED INPUT VAT GRANTED; REQUISITES OF A VALID CLAIM.

 

  • The CTA partially granted a claim for refund of excess and unutilized input VAT attributable to zero-rated sales. The following are the requisites:
  • As to the timeliness of the filing of the administrative and judicial claims:
    • The claim was filed with the BIR within two years after the close of the taxable quarter when the sales were made;
    • In case of full or partial denial of the refund claim, or the failure on the part of the Commissioner to act on the said claim within a period of 120 (now 90) days, the judicial claim has been filed with this Court, within 30 days from receipt of the decision or after the expiration of the said 120 (now 90)-day period;
  • With reference to the taxpayer’s registration with the BIR:
    • The taxpayer is a VAT-registered person;
  • In relation to the taxpayer’s output VAT:
    • The taxpayer is engaged in zero-rated or effectively zero-rated sales;
      • Export of goods must be supported by sales invoice as proof of sales of goods and bill of lading or airway bill as proof of actual shipment of goods.
      • Sale of goods and services made by a VAT-registered person in the Philippine customs territory to an entity registered and operating within the ECOZONES are considered exports to a foreign country subject to zero-rated VAT
    • The acceptable foreign currency exchange proceeds have been duly accounted for in  accordance with BSP rules and regulations. In this case though, the taxpayer was not able to accurately trace the mounts remitted with the invoice.
  • As regards the taxpayer’s input VAT being refunded:
    • The input taxes are not transitional input taxes;
    • The input taxes are due or paid;
    • The input taxes claimed are attributable to zero-rated or effectively zero-rated sales. However, where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributable to any of these sales, the input taxes shall be proportionately allocated on the basis of sales volume; and
    • the input taxes have not been applied against output taxes during and in the succeeding quarters(Carmen Copper Corporation v. CIR, CTA Case No. 9592, October 01, 2020)

 

PHP 13 MILLION CLAIM FOR REFUND OF INPUT VAT DENIED; IF THE BIR FAILS TO ACT ON A CLAIM WITHIN 120 DAYS (NOW 90), THE TAXPAYER SHOULD ELEVATE THE CLAIM TO THE CTA.

 

  • The CTA denied the taxpayer’s claim for refund of input VAT for failure to file the judicial claim on time.
  • In refund of input taxes, the 30-day period given to a taxpayer to file a judicial claim for input tax refund/TCC shall start a) upon expiration of the [now 90]-day mandatory period for the BIR to act on a request for input tax, and b) upon receipt of BIR’s adverse decision, whichever comes first.
  • In this case, the claim for refund was filed with the BIR on March 30, 2010. The BIR denied the claim on May 24, 2018, and the taxpayer filed the judicial claim on June 25, 2018. The taxpayer should have filed its judicial claim after 120 days from the time of administrative claim or until August 27, 2010. The taxpayer should not have waited for the BIR’s decision and elevated the case to the CTA after the BIR failed to act on the claim within the 120-day period. Thus the claim for refund should be denied. (Philippine Airport Ground Support Solutions, Inc. v. CIR, CTA EB No. 2107, CTA Case No. 9861, October 7, 2020)

 

PHP 1.8 MILLION TAX ASSESSMENT CANCELLED DUE TO LACK OF LETTER OF AUTHORITY (“LOA”).  A MEMORANDUM OF ASSIGNMENT IS NOT CONSIDERED A LETTER OF AUTHORITY. LOA ISSUED DURING THE REINVISTIGATION STAGE WILL NOT CURE THE DEFECT.

  • The CTA cancelled the tax assessment for lack of letter of authority.
  • There must be a grant of authority before any revenue officer can conduct an examination or assessment. Unless authorized through an LOA, an examination of the taxpayer cannot ordinarily be undertaken.

In this case, the BIR, thru the Revenue District Officer, merely issued a Memorandum of Assignment to the examiner without an LOA. Because there is no valid authority to examine the taxpayer’s books, the assessment is void. Even though the subsequent issuance of the new LOA for the purpose of reinvestigation will not cure the defect because the investigation as already conducted when the subsequent LOA was issued. (Bicyclepoker, Inc. v. CIR, CTA Case No. 9868, October 7, 2020; see also CIR v. Ryan Neil Erasmo Alvez, CTA EB No. 2076, CTA OC No. 020, October 8, 2020 involving a Reassignment Notice)

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SEC requires corporations, partnerships, associations, and individuals to create and/or designate e-mail account address and cellphone number beginning february 23, 2021; p10,000 penalty for failure to comply.

  • Purpose:
    • The e-mail address shall be where transactions, applications, letters, requests, papers and pleadings  may be processed, submitted and/or filed online. The SEC may likewise send notices, letter-replies, orders, decisions, and/or other documents through said e-mail addresses, and the corporations, associations, partnerships and individuals are deemed to have received those notices, letter-replies, orders, decisions and/or other documents on the date so sent by the SEC.
    • The purpose of the cellphone number is for the SEC to send One-Time Personal (OTP) Identification Number which the authorized person will have to input before the e-mail message can be retrieved. This is to ensure that the person accessing the email is the authorized person of the person to receive and retrieve the same.
  • Service of notice through this process shall be considered compliance with the notice requirement of administrative due process.
  • It provides that every corporation, association, partnership and person under the jurisdiction and supervision of the SEC (“subject persons) shall submit a valid official electronic email (e-mail) address and a valid official cellular phone number within 60 days from the effectivity of the rules
    • For future applications and those applications which are still pending primary registration with the Company Registration and Monitoring Department (CRMD), such information should be either indicated during the filling up of the registration forms or submitted within 30 days from the issuance of certificate of registration, license or authority.
  • In addition to the valid official e-mail address and official cellular phone number, the subject persons shall also submit a valid alternate e-mail address and valid alternate cellular phone number.
  • The official email of the subject persons may be the official or alternate email address of another person’s , provided it must be distinct from the alternate e-mail address of the same persons.
  • The e-mail address and cellular phone numbers shall be under the control of the corporate secretary, the person charged with the administration and management of the corporation sole, the resident agent of the foreign corporation, the managing partner, the individual or the duly authorized representative.
    • The subject persons shall submit proof of the authorized representative’s authority (i.e. special power of attorney or secretary’s certificate) to control the e-mail addresses and the cellular phone numbers, and to sign and file the submission, authorization and certification provided under this rule.
  • Beginning February 23, 2021 onwards, e-mail addresses and cellular phone numbers shall be included in the General Information Sheet (GIS) or Notification Update Form (NUF) regularly filed with the Commission. If a corporation fails to include the e-mail addresses and cellular phone numbers in the GIS or NUF regularly filed with the Commission, such GIS or NUF shall be considered incomplete.
  • An authorization or certificate of authorization, authorizing the SEC to send notices, among others, through email addresses and cellular phone numbers provides, for the purpose of complying with the notice requirement of administrative due process.
  • If the subject persons are unable to create an e-mail due to the fact that the area/address has no internet access, only the cellular phone number shall be submitted to the SEC. The authorized representative shall issue a certification to that effect. The subject persons shall submit to the SEC official email address within 30 days from the time the area gains access to the internet.
  • The SEC shall be notified within 5 days, in case the email address or cellular phone number is changed.
  • In case of double filing of e-mail address and cellular phone numbers, the SEC will determine whether an intra-corporate dispute exists. If yes, the SEC will mark “DISPUTED”. The said submission may be unmarked by an order from the appropriate court.
  • Penalty for failure to submit e-mail addresses and cellular phone number beginning February 23, 2021 is P10,000.
  • For your easy reference, the SEC Memorandum Circular may be accessed
  • https://www.sec.gov.ph/mc-2020/mc-no-28-s-2020/
  • (SEC Memorandum Circular No. 28 s. 2020, October 27, 2020)

 

 

BUREAU OF INTERNAL REVENUE

 

 

IMPORTATION OF goods identified as critical products, essential goods, equipment or supplies needed to contain and mitigate COVID-19 FROM JUNE 25, 2020 TO DECEMBER 31, 2020, shall be exempt from VAT, excise tax and other fees AND REQUIREMENT OF AUTHORITY TO RELEASE IMPORTED GOODS; DONATIONS OF SAID IMPORTED ARTICLES TO OR FOR USE OF THE NATIONAL GOVERNMENT AND OTHER QUALIFIED ENTITIES ARE EXEMPT FROM DONOR’S TAX.

 

  • The Secretary of Finance implements the tax exemption provisions under Section 4 (cc) and Section 18 of RA No. 11494 (Bayanihan to Recover as One Act) on the incentives for the manufacture or importation of certain equipment, supplies or goods.
  • It provides that importation from June 25, 2020 to December 31, 2020 of goods identified as critical products, essential goods, equipment or supplies needed to contain and mitigate COVID-19, subject to the limitations and restrictions, shall be exempt from VAT, excise tax and other fees.
  • The taxpayer availing of the exemption must present a certification from the Department of Trade and Industry (DTI) that the equipment and supplies being imported are not locally available or of insufficient quality and preference.
  • The importation hereof shall not be subject to the issuance of Authority to Release Imported Goods (ATRIG) and may be released by the Bureau of Customs without need of ATRIG. The BIR may, however, conduct post investigation/audit on the importations released by the BOC without ATRIG pursuant to these Regulations.
  • Donations of these imported articles to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the Government are exempt from donor’s tax and subject to the ordinary rules of deductibility under existing rules and issuances.
  • The grant of exemption for the importation of goods in this rules is deemed to be in effective beginning June 25, 2020,
    • The value-added tax on all covered and qualified shipments/importations that may have been paid from June 25,2020 up to September 14,2020 shall be refunded, provided that input tax on the imported items have not been reported and claimed as input tax credit in the monthly and/or quarterly value-added tax returns. The same shall not be allowed as input tax credit for purposes of computing the value-added tax payable of the concerned taxpayer/s for the said period.
  • inputs, raw materials and equipment necessary for the manufacture of essential goods of medical grade related to containment and mitigation of COVID-19, as determined by Food and Drug Administration – Department of Health (FDA-DOH), whether locally sourced or imported by the registered manufacturer, shall be exempt from value-added tax.
  • The sale of finished goods / products under these Regulations, whether locally manufactured or imported, is subject to value-added tax. The sale of inputs, raw materials and equipment referred to these Regulations to a non-holder of “License to Operate” issued by the FDA-DOH is likewise subject to value-added tax.

 

  • For your reference, the regulation may be accessed

 

https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202020/RR%20No.%2028-2020.pdf

 

  • (Revenue Regulations No. 28-2020, 15 October 2020)

 

COURT OF TAX APPEALS DECISIONS

 

PHP 2 MILLION TAX REFUND PARTIALLY GRANTED: INVOLUNTARY TRANSFER OF PROPERTY TO THE CITY GOVERNMENT AS A RESULT OF FAILURE TO PAY REAL PROPERTY TAX IS SUBJEC TO CAPITAL GAINS TAX BUT EXEMPT FROM DOCUMENTARY STAMP TAX.

 

  • The CTA denied the taxpayer’s refund of CGT but allows refund of DST in an involuntary sale of property to the government.
  • Under the law, a capital gains tax is imposed on the gains presumed to have been realized in the sale, exchange or disposition of lands and/or buildings held as capital asset.
    • In this case, the subject property was auctioned by the city of the government due to the owner’s failure to pay the real property tax. In the absence of bidder, the property was sold to the city government. Thereafter, the taxpayer failed to exercise its right of redemption, therefore, the ownership was transferred to the city government.
    • Despite the involuntary nature of the transfer, there is no question that ownership was transferred to the city government through sale, exchange or disposition within the purview of the tax law.
  • As a general rule, DST is imposed on all conveyances, deeds, instruments or writings whereby any land sold is transferred to the purchaser. By way of exception, all certificates, documents and papers covering sale of delinquent property to the province, city or municipality shall be exempt from DST.
    • In this case, since the buyer is the city government, the involuntary sale shall be exempt from DST.
  • Thus, refund of CGT was denied, but refund of DST was granted (City Government of Valenzuela v. Dulay, CTA Case No. 9872, September 17, 2020)

 

PHP 92 MILLION  EXCESS AND/OR UNUTILIZED CREDITABLE INPUT VAT DENIED;

All Renewable Energy Developers are entitled to zero-rated VAT on its purchases of local supply of goods, properties and services needed for the development, construction and installation of plant facilities.To avail of the incentives, the following documents must be submitted: DOE Certificate of Registration, Registration with the Board of Investments; and Certificate of Endorsement by the DOE, on a per transaction basis.

 

  • The CTA denied the taxpayer’s refund of excess and/or unutilized creditable input VAT for failure to present Department of Energy’s (DOE)  Certificate of Endorsement.
  • All Renewable Energy Developers are entitled to zero-rated VAT on its purchases of local supply of goods, properties and services needed for the development, construction and installation of plant facilities. To avail of the incentives, the following documents must be submitted:
    • DOE Certificate of Registration
    • Registration with the Board of Investments; and
    • Certificate of Endorsement by the DOE, on a per transaction basis
  • The foregoing documents must all be presented, otherwise, the transaction between the concerned RE Developer, as purchases, cannot be treated as subject to VAT zero-rating.
  • In the instant case, the taxpayer failed to present Certificate of Endorsement by the DOE on a per transaction basis. Therefore, the taxpayer’s sale to the RE Developer cannot be considered as subject to VAT zero-rating.

Thus the claim for refund of excess and/or unutilized creditable input VAT was denied. (Vestas Services Philippines, Inc. v. CIR, CTA Case No. 9604, September 16, 2020)

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CONVERSION FROM ONE PERSON CORPORATION (OPC) TO ORDINARY STOCK CORPORATION (OSD) AND VICE VERSA; REQUIREMENTS

  • The SEC issues guidelines for the conversion of corporations either to One Person Corporation (OPC) or to Ordinary Stock Corporation (OSC)
  • OSC may apply for its conversion into an OPC.
    • If a single stockholder has acquired all the outstanding capital stock of an OSC with corresponding Certificate Authorizing Registration or tax clearance having been issued by the BIR
      • Single stockholder must be a natural person of legal age, a trust or an estate.
    • Upon  issuance  of the  Certificate  of  Filing  of Amended  Articles  of    Incorporation  by  the  SEC  reflecting  the  conversion  to  OPC,  the  Articles  of   Incorporation  and  By-laws  of the  OSC  shall  be deemed  superseded. The  date  of issuance of the Certificate of Filing of Amended Articles  of Incorporation  shall  be deemed  as the date  of approval  of the  conversion.
    • The OPC  converted  from  an  OSC shall succeed the latter and be legally responsible for all the  latter’s  outstanding  liabilities  as of the date  of  approval  of the  conversion.
  • OPC may be converted to OSC.
    • When the shares in an OPC ceases to be held solely by a single stockholder.
    • Notice to SEC of the facts and circumstances leading to be conversion is required;
      • Following  the  transfer/s   of  shares   in  an  OPC  wherein   there   becomes  at  least  two  (2)  stockholders  in  the  OPC,  a  Notice  of  Conversion  of  OPC into an OSC shall  be filed  with   the  Commission  within  sixty  (60)  days  from  such  transfer/s  of  shares.  The  period for filing the Notice shall  be observed even though the conversion will  be  applied for,  or will take  place,  afterwards.
      • For  the   purpose  of  submitting  the   notice,   the  date  of transfer  of  shares  shall  be  deemed  to  be  the  date  that  the  corresponding  Certificate  Authorizing  Registration/  tax  clearance  is issued  by the  Bureau  of  Internal  Revenue.
      • If the  Notice  of  Conversion  is filed  with  the  Commission  beyond  sixty  (60)  days  from  the  transfer  of  shares,  the  OPC  may  still  be  approved  for  conversion  into  an  Ordinary  Stock  Corporation  subject  to  prior  payment  of  penalty
    • Upon  issuance  by the SEC  of the Certificate  of Filing of Amended Articles of  Incorporation  and of By-laws  reflecting the conversion to an OSC,  the  Articles  of  Incorporation  of the  OPC  shall  be deemed  superseded. The  date  of  issuance  of the Certificate  of  Filing of Amended  Articles  of  Incorporation and  of  Bylaws  shall  be deemed  as the date  of approval  of the  conversion.
    • The  OSC converted  from  an OPC shall succeed the latter and be legally responsible for all the  latter’s  outstanding  liabilities  as of the  date  of  conversion.
    • By reason  of the  nature  of these  corporations,  the conversion  from  an OSC to OPC shall  be deemed  as optional. On the other hand, the  conversion  from an OPC  to OSC  shall  be deemed  as  mandatory,  unless when  winding-up  and  dissolution  is  appropriate.
    • For your easy reference, the SEC guidelines and requirements may be accessed (SEC Memorandum Circular No. 27 s. 2020)

 

 

BUREAU OF INTERNAL REVENUE

 

BIR DEADLINES FROM OCTOBER 20 TO 25, 2020. A gentle reminder on the following deadlines, as may be applicable:

 

DATE FILING/SUBMISSION
October 20, 2020 · Filing & Payment of 2550M with required attachments – Non-eFPS filers – Month of September 2020

· E-Filing/Filing & E-Payment/Remittance of 1600 WP-Month of September 2020
October 21, 2020 · E-Filing of 2550M eFPS filers under Group E – Month of September 2020
October 22, 2020 · E-Filing of 2550M eFPS filers under Group D – Month of September 2020
October 23, 2020 · E-Filing of 2550M eFPS filers under Group C – Month of September 2020
October 24, 2020 · E-Filing of 2550M eFPS filers under Group B – Month of September 2020
October 25, 2020 · Submission of Quarterly Summary List of Sales/Purchases by a VAT Taxpayer – Non eFPS filers – Taxable Quarter ending September 30, 2020

· Submission of Sworn Statement of Manufacturer’s or Importer’s Volume of Sales of each particular brand of Alcohol, Tobacco Products & Sweetened Beverage Products – Taxable Quarter ending September 30, 2020

· E-Filing/Filing & E-Payment/Payment of 2550 & 25501Q – eFPS & Non-eFPS filers – Taxable Quarter September 30, 2020

· E-Filing & E-Payment of 2500M with required attachments – eFPS filers under Group A – Month of September 30, 2020

· E-Payment of 2550M for Group E, D, C & B – Month of September 2020

 

FILING AND PROCESSING OF CLAIMS OF INPUT VAT REFUND PRESCRIBING UNTIL DECEMBER 19, 2020 ARE SUSPENDED; NEW DEADLINES

 

  • The Secretary of Finance suspends the filing and 90-day processing of Value-Added Tax (VAT) Refund claims anchored under Section 112 of the Tax Code of 1997, as amended, in relation to Section 4(tt) of RA No. 11494 (Bayanihan to Recover as One Act) (“Bayanihan Law”)
  • The deadline of filing for VAT refund claims whose prescription falls during the effectivity of R,A. No. 11494, shall be suspended until December 19, 2020, which is the next adjournment of the Eighteenth Congress.
  • However, to prevent claims, the following deadlines the expected influx of numerous filers of VAT refund shall be extended to the following dates:

 

Taxable Quarter Deadline
Calendar quarter ending September 30, 2018 December 31, 2020
Fiscal quarter ending October 31, 2018 January 31, 2021
Fiscal quarter ending November 30, 2018 January 31, 2021
Calendar quarter ending December 31, 2018 February 15, 2021

 

  • The 90-day processing of VAT refund claims is suspended during the effectivity of R.A. No. 11494 or until the next adjournment of the Eighteenth Congress on December 19, 2020.
  • If the areas where ECQ or MECQ is in force after the affectivity of Bayanihan Law, the following shall be observed:
    • lf the deadline for the filing of the VAT refund claim falls within the ECQ or MECQ period, filing of the claim shall be extended for thirty (30) days after the lifting of the ECQ or MECQ. This applies to the affected areas of the processing offices or to the registered business address of the taxpayer claimant where the restrictions are strictly enforced.
    • The 90-day period of processing VAT refund claims is suspended during the declaration of ECQ or MECQ in the area and shall resume thirty (30) days after the same has been lifted.
    • ln cases where the processing office is required temporary closure, in view of COVID-19 cases, to prevent further spread at the affected office, following the interim guidelines on use of leave credits under Memorandum Circular No. 05, s. 2020 issued by the Civil Service Commission, the 90-day processing of VAT refund claims shall be suspended until the last day of the quarantine period for the affected processing office.
  • For your reference, the regulation may be accessed (Revenue Regulations No. 27-2020, 06 October 2020)

 

ELECTRONIC LETTER OF AUTHORITY (E-LA) MAY BE SERVED VIA PERSONAL SERVICE, SUBSTITUTED SERVICE AND MAIL; REQUIREMENTS AND CONDITIONS.

 

  • The BIR clarifies the proper modes of service of an electronic Letter of Authority (eLA)

 

Mode of Service Requirement
Personal Service · By delivering personally a copy of the eLA at his registered or known address or wherever he may be found.

o A known address shall mean a place other than the registered address where business activities of the party are conducted or his place of residence.

· Personal or substituted service of the eLA shall be effected by the RO assigned to the case. However, such service may also be made by any BIR employee duly authorized for the purpose.
Substituted Service · In case personal service is not possible.

· Can only be resorted to when the party is not present at the registered or known address.
a.  The eLA may be left at the party’s registered address, with his clerk or with a person having charge thereof.

 

 

 · If the known address is a place where business activities of the party are conducted, the eLA may be left with his clerk or with a person having charge thereof.

· If the known address is the place of residence, substituted service can be made by leaving the eLA with a person of legal age residing therein.
b.    No person is found in the party’s registered or known address · the Revenue Officers (ROs) concerned shall bring a barangay official and two (2) disinterested witnesses to the address so that they may personally observe and attest to such absence.

· The original copy of the eLA shall be given to said barangay official.

o “Disinterested witnesses” refer to persons of legal age other than employees of the Bureau of Internal Revenue.
c. Party found at his registered or known address or any other place but refuses to receive the eLA · the ROs concerned shall bring a barangay official and two (2) disinterested witnesses in the presence of the party so that they may personally observe and attest to such act of refusal.

· The original copy of the eLA shall be given to said barangay official

 
Mail · Registered mail with an instruction to the Postmaster to return the mail to the sender after ten (10) days, if undelivered; or

· Reputable professional courier service;

· Ordinary mail, if no registry or reputable courier is available in the locality of the taxpayer.

 

 

  • When service is complete:
    • Personal service shall be complete upon actual delivery of the eLA to the taxpayer or his representative.
    • Service by registered mail is complete upon actual receipt by the taxpayer or after five (5) days from the date of receipt of the first notice of the postmaster, whichever date is earlier.
    • Service by ordinary mail is complete upon the expiration of ten (10) days after mailing.
    • Service to the tax agent/practitioner, who is appointed or authorized by the taxpayer in accordance with existing revenue issuances, shall be deemed service to the taxpayer.
  • For your reference, the regulation may be accessed (Revenue Memorandum Circular No. 110-2020, October 6, 2020)

 

COURT OF TAX APPEALS DECISIONS

 

REQUISITES OF CONVICTION FOR VIOLATION OF SECTION 255 OF THE NATIONAL INTERNAL REVENUE CODE; LAW PENALIZES RESPONSIBLE OFFICERS.

 

  • The following elements must be established by the prosecution to secure the conviction of accused, to wit:
    • That a corporate taxpayer is required to pay any tax, make a return, keep any record, or supply correct and accurate information;
    • That the corporate taxpayer failed to pay the required tax, make a return or keep the required record, or supply the correct and accurate information, or withhold or remit taxes withheld, or refund excess taxes withheld on compensation, at the time or times required by law or rules and regulations; and
    • That accused, as the employee responsible for the violation, willfully failed to pay such tax, make such return, keep such record, or supply such correct and accurate information, or withhold or remit taxes withheld, or refund excess taxes withheld on compensation, at the time or times required by law or rules and regulations.
  • The law penalizes not only the partner, president, general manager, branch manager and treasurer but also the officers-in-charge and employees responsible for the violation.
    • In this case, the accused is a Vice-President of the Company. She also sent a letter to the BIR acknowledging that the company’s tax assessment case has become a delinquent account and also requested considerable time to put its accounting records in order to be able to settle the corporation’s tax liabilities by way of compromise. This establishes that the accused is a responsible officer of the company and thus must be held criminally liable. (Suarez v. People of the Philippines, CTA EB Crim. No. 066, CTA Crim Case No. A-4, September 1, 2020)

 

PHP 286 MILLION TAX ASSESSMENT CANCELLED: TAX ASSESSMENT ISSUED WITHOUT A LETTER OF AUTHORITY IS VOID; STATEMENT IN THE ASSESSMENT THAT “INTEREST AND AMOUNT DUE WILL HAVE TO BE ADJUSTED” IF PAID BEYOND A CERTAIN PERIOD AND LACK OF DUE DATE RENDER THE ASSESSMENT IS VOID.

 

  • The CTA cancelled the tax assessment for violation of due process.
  • Under the rules, a revenue officer must be authorized through a LOA,  in order that the said officer may validly examine the books of accounts and other accounting records of the taxpayer. Any tax assessment issued without an LOA is in violation of the taxpayer’s right to due process and is therefore void.
    • In 2010, the BIR issued a Memorandum Order stating that all LOA’s issued from March 1, 2010 covering cases for 2009 shall be retrieved and replaced by electronic LOA. In this case, the BIR did not retrieve and replace the existing LOA. Therefore, the assessment was declared void.
  • Under the rules, tax assessment must not only contain a computation of tax liabilities, but it also must include a demand on the taxpayer to settle the tax liability that is there definitely and fixed.
    • In this case, the assessment notice states “Please note that the interest and the total amount due will have to be adjusted if paid beyond….” Moreover, the assessment notices and final decision on disputed assessment do not contain any due date for the payment of the assessed deficiency tax. Therefore, the  liability is considered not definitely set and fixed, hence, the assessment is void. (Robinsons Toys, Inc. v. CIR, CTA Case No. 9161, September 2, 2020)

 

PHP 23 MILLION VAT ASSESSMENT UPHELD: “PRICE ADJUSTMENT” MUST BE REFLECTED IN THE INVOICE AS SALES DISCOUNT; IN ZERO-RATED VAT ON CONSTRUCTIVE EXPORT, THE GOODS MUST ENTER THE ECOZONE; FOR VAT PURPOSES, GOODS MUST BE SUPPORTED BY INVOICE, SERVICES MUST BE SUPPORTED BY OFFICIAL RECEIPT; IF THE DOCUMENT STATES “THIS DOCUMENT IS NOT VALID FOR CLAIM OF INPUT TAX” THE INPUT VAT CANNOT BE CLAIMED AS A CREDIT.

 

  • The CTA upholds VAT assessment for failure to comply with technical requirements under the law.
  • For sales discount to be allowable as deduction from the gross selling price, it must be indicated in the sales invoice at the time of sale
    • In this case, the company’s “price adjustment” cannot be considered a sales discount since the amount is not indicated  as sales discount at the time of sale
  • For sales of goods to economic zones to be considered zero-rated (constructive export), the goods sold by VAT-registered persons in the customs territory must enter an ecozone. The seller must not just rely on the mere fact of registration of the buyer within the ecozone. The place of delivery of goods in the case is material.
    • In this case, while the taxpayer has satisfactorily proven that the customers are SBFZ-registered entities, it was not established that the goods actually entered the ecozone.
  • Under the rules, a VAT-registered person shall issue (1) VAT invoice for every sale, barter or exchange of goods or properties; and (b) VAT official receipt for every lease of goods or properties and for every sale, barter or exchange of services.
  • If an official receipt/invoice states “This Document is not valid for claim of input tax,” the taxpayer-purchaser is not entitled to claim input VAT credits. (Pag-Asa Steel Works, Inc. v. BIR, CTA Case No. 9506, September 2, 2020

 

PHP 115 TAX REFUND GRANTED; PAGCOR CONTRACTEES AND LICENSEES ARE EXEMPT FROM INCOME TAX; REFUND OF ERRONEOUSLY OR ILLEGALLY PAID INCOME TAX SHALL BE FILED WITHIN 2 YEARS COUNTED FROM THE FILING OF THE ANNUAL INCOME TAX RETURNS.

 

  • The CTA granted the taxpayer’s claim for refund of erroneously or illegally paid tax due to its exemption as PAGCOR’s licensee.
  • Under the law and Bloomberry Resorts Case, PAGCOR is exempted from income tax in lieu of the 5% franchise tax. PAGCOR’s exemption extends to its contractees and licensees.
    • In this case, the taxpayer was able to show that it is an entity duly authorized and licensed by PAGCOR.
    • The taxpayer was also able to demonstrate that the Consortium to which it belongs remitted license fees to PAGCOR in relation to its gaming revenues.
    • Lastly, with the documentary and testimonial evidence, the taxpayer was able to substantiate its claim for refund
  • Further, under the rules, claims for refund of erroneously or illegally paid taxes should be filed within 2 years from the date of payment of tax or penalty. Specifically, in case of income taxes, the period shall run from the time of the filing of the Final Adjustment Return or Annual ITR.
    • The BIR erroneously argued that the prescriptive period shall run from the filing of the Quarterly ITR as the quarterly tax payments are mere advance payment of the annual corporate income tax. (Premiumleisure and Amusement, Inc. (PLAI) v. CIR, CTA Case No. 9798, September 2, 2020)

 

P10 MILLION REFUND OF INPUT VAT ARISING FROM ZERO-RATED SALES GRANTED; REQUISITES OF REFUND.

 

  • CTA granted the taxpayer’s claim for refund of input taxes from its zero-rated sales.
  • The following are the requisites for the claim of refund of input VAT
    • The administrative claim with the BIR should be filed within 2 years from the close of the taxable quarter when the pertinent zero-rated sales were made.
      • In case of full or partial denial of the refund claim, or the failure on the part of the BIR to act on the said claim within a period of 120 days [now 90 days], the judicial claim should be filed with the court, within 30 days from receipt of the decision or after the expiration of the said 120 [now 90] days.
      • If the BIR decides after the lapse of the period, the BIR’s decision is inconsequential in the determination of the timeliness of the claim.
    • Taxpayer is a VAT-registered person
      • The taxpayer is engaged in zero-rated or effectively zero-rated sales
        • Sale of goods or services to person whose exemption under the special laws effectively subjects the supply of goods or services to zero-rated VAT.
        • Under the law, all Renewable Energy Developers shall be entitled to  zero-rated VAT on its purchases of goods and services needed for the development, construction, and installation of its plant facilities.
        • RE Developers must have secured a DOE Certificate of Registration, Registration with the Board of Investment, and Certificate of Endorsement by the DOE
      • for zero-rated sales the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with BSP rules and regulations;
    • On input taxes:
      • the input taxes are not transitional input taxes;
      • the input taxes are due or paid;
      • the input taxes have not been applied against output taxes during and in the succeeding quarters; and

the input taxes claimed are attributable to zero-rated or effectively zero-rated sales. However, where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales and the input taxes cannot be directly and entirely attributable to any of these sales, the input taxes shall be proportionately allocated on the basis of the sales volume. Gamesa Eolica SL-Unipersonal Philippine Branch v. CIR, CTA Case No. 9668, September 2, 2020)

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