Articles

COURT OF TAX APPEALS DECISIONS

ASSESSMENT IS VOID IF EXAMINER WHO RECOMMENDED THE ISSUANCE OF THE FLD/FAN IS NOT NAMED IN THE LOA. A Revenue Officer (RO) may examine a taxpayer’s books of accounts and recommend deficiency assessments only when duly authorized through a valid Letter of Authority (LOA) issued by the Commissioner of Internal Revenue (CIR) or his duly authorized representative; without such LOA, the conduct of audit or examination is void. In this case, records and testimony established that one of the ROs, who was not included in the electronic LOA (eLOA), actively participated in the audit process, including reviewing the docket, examining the memorandum report and supporting documents, and re-evaluating the case after the Preliminary Assessment Notice (PAN) stage to support the issuance of the Formal Letter of Demand/Final Assessment Notice (FLD/FAN). She admitted that the case was referred to her for “initial review” before the FLD was issued, and she worked on the audit report and recommendations despite lacking authority under any LOA. In addition, the Group Supervisor (GS), also not named in the eLOA, participated in preparing the memorandum recommending issuance of the PAN, thereby effectively engaging in audit functions reserved exclusively for authorized officers. The Court rejected the BIR’s characterization that these officers merely “reviewed” the case, finding instead that their actions constituted substantive audit participation, which is legally impermissible without a valid LOA. Accordingly, the entire assessment is void. (Pampanga III Electric Cooperative, Inc. v. CIR, CTA Case No. 10999, February 3, 2026)

SUBSTITUTION OF GS WITHOUT LOA AT THE REINVESTIGATION STAGE WHILE RETAINING THE ORIGINAL RO WILL NOT INVALIDATE THE ASSESSMENT. The issuance of a valid LOA prior to the conduct of a tax audit is a mandatory requirement of due process and has been consistently emphasized by the Supreme Court where it held that an assessment is void if conducted by revenue officers who are not properly authorized under a valid LOA, as memoranda of assignment or internal issuances cannot substitute for authority granted by the CIR or his duly authorized representative. In this case, the LOA expressly authorized certain examiners (RO and GS) to examine the taxpayer’s books of accounts and other records and while a subsequent Memorandum of Assignment (MOA) resulted in the substitution of a GS during the reinvestigation stage, while the RO who was originally and validly named in the LOA remained continuously authorized and participated in the audit. The Court further noted that the new GS participation was anchored on the reassignment for reinvestigation and did not involve a complete replacement of all originally authorized revenue officers. Thus, since at least one revenue officer duly named in the LOA continued to conduct and participate in the audit, the examination was not void. [Telstra International (AUS) Limited ROHQ, v. CIR, CTA Case No. 10655, February 12, 2026]

MULTIPLE SUCCESSIVE LOA ISSUED DUE TO BIR PERSONNEL CHANGES DOES NOT VIOLATE “ONE LOA PER TAXABLE YEAR” RULE. Only ROs specifically authorized under a valid LOA may examine a taxpayer’s books of accounts, and while the “one LOA per taxable year” rule generally limits the issuance of multiple LOAs for the same tax type and period, jurisprudence recognizes that the issuance of a new or replacement LOA for the same taxable period is valid when necessitated by reassignment, transfer, promotion, retirement, or inability of previously assigned ROs to continue the investigation, provided the taxpayer is properly informed of the officers authorized to conduct the audit. In this case, the Court found that each successive LOA was validly issued as a consequence of personnel changes within the BIR, specifically the promotion and reassignment of previously authorized GS and examiners, with the replacement LOAs issued precisely to reflect these changes and ensure compliance with due process requirements. The evidence further showed that the taxpayer was informed each time of the identities of the new authorized revenue officers, and the subsequent replacement LOAs were intended not to create unauthorized overlapping authority but to continue the audit process in accordance with BIR rules governing reassignment of cases. Since the successive LOAs were issued for legitimate administrative reasons and served the purpose of keeping the taxpayer informed of the officers legally authorized to conduct the audit, the Court held that there was no violation of due process and that the audit investigation and resulting assessment were undertaken pursuant to valid LOAs. (Set and Stage Resource Management, Inc. v. CIR, CTA Case No. 10703, February 13, 2026)

3-YEAR PRESCRIPTIVE PERIOD WAS EXTENDED BY 420 DAYS DURING COVID-19 PANDEMIC. The BIR generally has 3 years from the date prescribed by law for filing the return, or from the actual filing date if filed late, within which to assess internal revenue taxes; however, the running of this prescriptive period is suspended when the CIR is legally prohibited from making an assessment, including periods recognized by law during national emergencies. In this case, although the taxpayer argued that the deficiency tax assessments had prescribed because there was allegedly no valid waiver extending the assessment period, the Court rejected this contention and held that the assessments were timely issued. The Court found that while the original prescriptive periods for income tax and VAT for taxable year 2017 would have ordinarily lapsed in 2021, the running of the statute of limitations was automatically suspended by operation of law, which excluded periods when the National Capital Region was under ECQ and MECQ during the COVID-19 pandemic. After excluding a total of 420 days from the computation of prescription, the Court held that the issuance of the FLD/FAN remained well within the extended assessment period, rendering the taxpayer’s challenge based on the alleged invalidity of waivers immaterial since the extension arose by operation of law and not by contractual waiver. (Ford Group Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case No. 10728, November 20, 2025)

A TAXPAYER CANNOT INVOKE NON-RECEIPT OF THE PAN WHERE THE SAME REPRESENTATIVE CONSISTENTLY RECEIVED THE LOA AND FLD/FAN AND PARTICIPATED IN THE ASSESSMENT PROCEEDINGS BY SUBMITTING SUPPORTING DOCUMENTS AND FILING A PROTEST. Due process in tax assessments requires that the taxpayer be properly served with a PAN and where personal service is not practicable, substituted service is valid if the notice is left at the taxpayer’s registered or known address with a clerk or person in charge. When a taxpayer denies receipt of an assessment, the burden shifts to the BIR to prove valid service by competent evidence. Applying these principles, the Court found that the BIR sufficiently established valid substituted service of the PAN through Ngo, who regularly received the taxpayer’s tax notices. The records showed that the taxpayer had previously stipulated in the Joint Stipulation of Facts the issuance of the first LOA, FLD/FAN and second LOA, all of which were similarly received by Ngo as evidenced by handwritten acknowledgments and signatures appearing on the notices. The taxpayer likewise acted upon these notices by submitting documents requested under the first LOA, filing a protest against the FLD/FAN, and acknowledging the second LOA in the petition, thereby demonstrating actual receipt through the same representative. The Court also noted the taxpayer’s inconsistent position in challenging Ngo’s authority only with respect to the PAN despite not disputing Ngo’s receipt of all prior BIR notices, and a comparison of signatures on the PAN and other notices showed clear similarity, further confirming authenticity. Consequently, the Court held that the taxpayer duly received the PAN through valid substituted service, and the BIR sufficiently discharged its burden of proving proper service. (Judy Bautista Lee v. Commissioner of Internal Revenue, CTA Case No. 10973, November 18, 2025)

FAILURE TO PROTEST THE FLD/FAN WITHIN 30 DAYS RENDERS THE ASSESSMENT FINAL AND ENFORCEABLE. A taxpayer must file a valid administrative protest against an FLD/FAN within 30 days from receipt thereof; otherwise, the assessment becomes final, executory, and demandable, and the taxpayer is thereafter barred from disputing its validity or raising defenses against the assessment. In this case, the records clearly established, and the taxpayer expressly admitted, receipt of the FLD/FAN but failed to file any timely and valid protest within the mandatory 30-day period, thereby causing the assessments to attain finality and become legally enforceable, precluding the taxpayer from later contesting the validity of the underlying assessment or questioning subsequent collection measures. Although the taxpayer attempted to invalidate the assessment by claiming non-receipt of the PAN, the Court found this argument unavailing because the BIR presented competent evidence proving valid service, including the receiving copies of the PAN signed by the taxpayer’s bookkeeper. Significantly, the same bookkeeper had likewise received the LOA, Notice of Informal Conference (NIC), FLD, FAN, and Warrant of Distraint and/or Levy (WDL) on behalf of the taxpayer without prior objection as to her authority, thereby estopping the taxpayer from subsequently denying receipt of the PAN or questioning her authority to receive official BIR notices. Since the taxpayer failed to timely dispute the FLD/FAN and the Court found no merit in its denial of receipt of the PAN, the assessments were held final, executory, and demandable, validating the BIR’s collection actions (Xytrix Systems Corporation v. CIR, CTA Case No. 11021, February 13, 2026)

(1) DEMAND TO PAY “30 DAYS FROM RECEIPT” OF FLD/FAN AND (2) STATEMENT INTEREST WILL BE ADJUSTED IF PAYMENT IS MADE BEYOND THE SPECIFIC PERIOD DO NOT MAKE THE AMOUNT AND DUE DATE INDEFINITE. A valid tax assessment must constitute a written notice and demand for payment containing a definite amount of tax liability and a definite due date. In this case, the Court held that the assessments sufficiently complied with legal requirements because, while the FLD noted that interest may be adjusted if payment is made beyond the specified date, the Assessment Notices clearly indicated that payment was due “30 days from receipt,” which is a determinable and definite period, thereby constituting a valid and enforceable demand for payment. The Court further explained that the reference to interest adjustment does not render the assessment indefinite, as it merely reflects the statutory rule that interest continues to accrue until full payment of the tax. Accordingly, the FLD/FAN were upheld as valid assessments containing a definite amount and due date (Fort Bonifacio Development Corporation v. Commissioner of Internal Revenue, CTA Case No. 10344, February 6, 2026; see also Judy Bautista Lee v. Commissioner of Internal Revenue, CTA Case No. 10973, November 18, 2025)

ASSESSMENT BASED ON UNVERIFIED TPI IS VOID. A deficiency tax assessment must be founded on actual, verified facts supported by credible evidence, and not merely on unconfirmed Third-Party Information (TPI). When the BIR relies on TPI generated through computerized matching of taxpayers’ declarations, the investigating revenue officer is required to verify the discrepancies by issuing confirmation requests to the third-party sources, securing sworn statements attesting to the veracity of the reported data, and, when the sources are outside the investigating office’s jurisdiction, proving service through registered return cards. In the present case, the BIR assessed the taxpayer for alleged undeclared sales after relying on computerized matching between the taxpayer’s VAT declarations and purchase declarations allegedly made by third parties. However, despite issuing several confirmation requests, the BIR failed to obtain the required sworn statements from the supposed third-party sources, produced only a single reply that did not contain the mandatory sworn attestation, failed to identify which source provided the response, and did not present registered return cards for multiple third-party sources located outside the jurisdiction of the investigating office. The records therefore failed to establish that the discrepancies reflected in the computerized matching data were ever independently verified in accordance with mandatory BIR procedures. The Court thus ruled that the assessment lacked factual and legal basis, that the BIR failed to comply with its own regulations governing TPI verification, and that the resulting deficiency income tax and VAT assessments, together with the corresponding WDL, were void and unenforceable for want of credible evidentiary support. (Judy Bautista Lee v. Commissioner of Internal Revenue, CTA Case No. 10973, November 18, 2025 see also Set and Stage Resource Management, Inc. v. CIR, CTA Case No. 10703, February 13, 2026)

BIR CANNOT LEGALLY ISSUE WDL WITHOUT FDDA; CTA CANNOT RULE ON THE MERITS OF THE ASSESSMENT. Taxpayers must be informed in writing of the facts and law on which an assessment is based, and they are afforded the right to protest and await a final decision by the CIR before resorting to judicial remedies; absent such final decision, issuances made in the course of collection do not constitute appealable determinations. The Court ruled that the WDL was issued prematurely because the taxpayer’s protest remained unresolved and no Final Decision on Disputed Assessment (FDDA) or final action had been issued, meaning there was no established tax delinquency that could justify summary collection remedies like WDL. The Court emphasized that collection mechanisms may only be enforced once a tax liability becomes final, executory, and demandable, and that issuing a WDL on the basis of a non-final assessment violates due process. Accordingly, the WDL was declared void for being prematurely issued and for lacking a valid basis, although the Court clarified that it had no jurisdiction to rule on the merits of the underlying assessment itself (Everwing Profem Corporation v. CIR, CTA Case No. 11082, February 10, 2026)

FDDA SERVED VIA SUBSTITUTED SERVICE WITHOUR PROVING PERSONAL SERVICE IS IMPRACTICABLE IS VOID; BUT VOID FDDA WILL NOT AFFECT VAILIDTY OF THE FLD/FAN. The BIR regulations require strict compliance with the modes and procedure for service of assessment notices, including personal service at the taxpayer’s registered or known address and, only when such is not practicable, valid substituted service supported by proof of non-presence, participation of a barangay official and two disinterested witnesses, and the submission of a sworn report of service; failure to comply with these requirements renders substituted service void for violation of due process. In this case, the taxpayer’s FDDA was served by substituted service allegedly after a failed attempt at its old registered address and left with the barangay official; however, the taxpayer had already duly updated its registered address as evidenced by BIR Form Nos. 1905 and 2303, and the BIR failed to prove that personal service was impracticable or that the taxpayer was not present at its updated address, as well as failed to present the serving revenue officer, barangay official, or disinterested witnesses, or the required sworn Report on Personal/Substituted Service, thereby rendering the substituted service improper and the FDDA void. Nonetheless, consistent with jurisprudence, a void FDDA does not automatically invalidate the underlying assessment, as the assessment and the decision on a disputed assessment are distinct, and the former may remain valid and enforceable despite defects in the latter (3D Networks Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case No. 10981, February 11, 2026)

REGIONAL DIRECTORS ARE ALLOWED TO SIGN WDL; RDAO DOES NOT REQUIRE PUBLICATION. The BIR may enforce collection of delinquent taxes through summary administrative remedies, including distraint and levy, provided such collection action is exercised by revenue officials properly authorized by the CIR, whose authority may be delegated through valid internal issuances such as Revenue Delegation Authority Orders (RDAO), with internal delegations becoming immediately effective even without publication. In this case, the taxpayer challenged the validity of the WDL solely on the ground that it was signed by the Regional Director instead of the Revenue District Officer, allegedly contrary to prior delegation rules. The Court rejected this argument, finding that when the WDL was issued and received in 2022, a new RDAO had already taken effect and expressly delegated authority to Regional Directors to sign and approve WDL involving Regional Office cases. Since RDAO of 2022 constituted a valid internal delegation of authority by the CIR and did not require publication to become effective, the Regional Director was fully authorized to issue the WDL. (Xytrix Systems Corporation v. CIR, CTA Case No. 11021, February 13, 2026)

ELECTRIC COOPERATIVES REGISTERED WITH THE NEA ENJOY A PERMANENT INCOME TAX EXEMPTION DESPITE NON REGISTRATION WITH CDA. This exemption remains effective despite subsequent issuances withdrawing fiscal incentives, because later laws and interpretations are construed as maintaining or reinstating such tax privileges for National Electrification Administration (NEA)-registered electric cooperatives. In this case, the taxpayer, an electric cooperative duly registered with the NEA, is deemed to fall squarely within the scope of the permanent income tax exemption, regardless of its non-registration with the CDA, following established rulings that NEA registration alone suffices to retain tax-exempt status and that conflicting issuances cannot override the statutory exemption granted to electric cooperatives. Accordingly, the Court held that the taxpayer cannot be subjected to income tax liability, rendering the deficiency income tax assessment, including the NIC, PAN, FLD/FAN, and related issuances, void for lack of legal basis (Pampanga III Electric Cooperative, Inc. v. CIR, CTA Case No. 10999,February 3, 2026)

SOURCE OF INCOME IS DETERMINED BY PLACE WHERE ACTIVITY IS PERFORMED REGARDLESS OF PLACE OF PAYMENT OR CUSTOMERS’ RESIDENCY/LOCATION.  Enterprises registered within the Subic Special Economic Zone (SSEZ) are entitled to the preferential gross income tax (PGIT) in lieu of all national and local internal revenue taxes, provided that income from “sources within the Customs Territory” (i.e. within the Philippines) does not exceed 30% of total income; jurisprudence clarifies that the “source” of income is determined not by the residence of the payor or place of payment, but by the place where the income-generating activity is actually performed. In this case, the BIR assessed the taxpayer for deficiency tax on the theory that sales to customers outside the SSEZ constituted income sourced within the Philippines, thereby pushing the taxpayer beyond the 30% threshold and disqualifying it from PGIT; however, the Court rejected this approach, holding that the proper test is where the sales and services were actually rendered, and the evidence, such as invoices, receipts, and related documentation issued and accomplished within the SSEZ, showed that the taxpayer’s income-generating activities were performed within the zone, regardless of the customers’ residency or location or whether withholding certificates were issued by payors within the Philippines. Thus, the taxpayer remained qualified for the PGIT regime and was not liable for RCIT and VAT, rendering the BIR’s assessments void for lack of legal basis as they were premised on an erroneous determination of income source and improper disqualification from the tax incentive. (West Automotive Corporation v. CIR, CTA Case No. 10561, February 10, 2026)

A TAXPAYER SEEKING TO SUBSTANTIATE THE CORRECT TAX TREATMENT BEARS THE BURDEN OF PROVIDING PROPER TRACING, RECONCILIATION, OR DECLARATION IN THE ITR; JOURNAL VOUCHERS, AND GENERAL LEDGERS ALONE DO NOT SUFFICE. Taxable income is determined based on gross income less allowable deductions, and taxpayers claiming adjustments or reconciling items that affect the computation of taxable income bear the burden of substantiating such claims with competent evidence sufficient to establish the correctness of the reported tax treatment. In this case, the taxpayer argued that the adjustment relating to training expenses with corresponding dealer share merely involved a reclassification, which had no effect on taxable income. While the Court recognized that, in principle, the accounting reclassification appeared to have a neutral effect on the taxpayer’s net taxable income since it only affected presentation and did not alter the overall tax base, it nevertheless rejected the taxpayer’s claim for failure to sufficiently substantiate the adjustment. The Court found that the taxpayer merely presented journal vouchers and general ledger extracts for the affected revenue and expense accounts but failed to provide tracing, reconciliation, or proof that the corresponding reduced selling or marketing expenses were actually declared in the Annual Income Tax Return. In the absence of competent evidence establishing that the adjustment indeed resulted in a nil tax effect, the Court ruled that the reconciling item could not be considered. (Ford Group Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case No. 10728, November 20, 2025)

CLAIMS FOR SALES DISCOUNTS MUST BE SUPPORTED BY DOCUMENT INDENTIFYING THE NATURE OF THE TRANSACTION, ACTUAL DATE, SPECIFIC GOODS RETURNED; JOURNAL VOUCHERS AND GENERAL LEDGERS ARE NOT SUFFICIENT. Deductions or adjustments affecting gross income are allowable only when sufficiently substantiated by adequate records and competent evidence proving that the transactions were genuinely incurred in connection with the taxpayer’s business operations. In this case, the taxpayer claimed deductions consisting of sales returns of parts and sales discounts which were deducted from revenue for income tax purposes but allegedly not reflected in its VAT returns. The Court held that the claimed sales returns of parts could not be recognized because the taxpayer merely presented journal vouchers and general ledger extracts, which were insufficient to establish the validity of the returns since they did not identify the nature of the return transaction, the actual date of return, the specific goods or parts returned, or the identity of the customers involved. In contrast, the Court ruled favorably on the sales discounts after finding that the taxpayer adequately substantiated these transactions through journal vouchers, general ledger extracts, and credit notes issued to dealers, which sufficiently demonstrated that the discounts represented legitimate cash subsidies granted to dealers on vehicle sales in the ordinary course of business and properly identified the dealers who benefited therefrom. (Ford Group Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case No. 10728, November 20, 2025)

ADVERTISING EXPENSES PAID TO FOREIGN MEDIA AND AFFILIATES ARE NECESSARY AND ORDINARY TO THE TAXPAYER’S TRADE OR BUSINESS; EXPENSES MUST BE DEDUCTED IN THE YEAR WHERE LIABILITY BECOMES FIXED AND DETERMINABLE. Business expenses are deductible for income tax purposes only if they are ordinary and necessary, incurred in carrying on the taxpayer’s trade or business, properly substantiated by adequate records, and claimed in the correct taxable year consistent with the taxpayer’s accounting method. Jurisprudence provides that an expense is “necessary” when it is appropriate and helpful to the business, and “ordinary” when reasonably connected with the taxpayer’s operations, regardless of whether the supplier is local or foreign. Applying these principles, the Court found that the taxpayer sufficiently established that its foreign advertising expenses consisting of payments to foreign media companies such as Facebook, Google, and Twitter through Mindshare, as well as regional marketing charges paid to affiliates were directly related to promoting products in the Philippine and ASEAN markets and were therefore legitimate and deductible business expenses. However, the Court disallowed foreign advertising expenses incurred in CY 2016 but claimed in CY 2017, holding that under the accrual method of accounting and the “all-events test,” expenses must be deducted in the year when the liability becomes fixed and determinable, not in a subsequent taxable year. Accordingly, while the bulk of the foreign advertising expenses was allowed as deductible, the out-of-period expenseswere properly disallowed. (Ford Group Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case No. 10728)

SALE TO SBMA-REGISTERED ENTITY IS SUBJECT TO ZERO-RATED VAT; REQUISITES. Sales made by a VAT-registered supplier from the Philippine customs territory to enterprises duly registered within the Subic Bay Freeport Zone are treated as constructive export sales subject to 0% VAT, provided: (1) the seller is VAT-registered, (2) the buyer is an SBMA-registered entity entitled to special tax incentives, and (3) the goods sold are shown to have been delivered to and consumed within the freeport zone. Applying these principles, the Court found that the taxpayer successfully established that its zero-rated sales because the taxpayer proved that it was a VAT-registered entity, submitted customer’s Certificates of Registration and Tax Exemption (CRTEs) issued by SBMA covering the audit period, and presented sales invoices clearly reflecting the vehicles and parts sold, delivery dates, destinations within the SBFZ, and acknowledgment receipts showing actual delivery within the freeport zone. The Court rejected the BIR’s position that automobiles are automatically excluded from zero-rating because they are not production-related goods, ruling that the decisive factor is not the classification of the goods but whether the sale is legally treated as an export transaction under the separate customs territory principle. Nevertheless, the Court sustained partial disallowances for several transactions that were inadequately substantiated, particularly invoices with illegible signatures, unsupported sales, transactions outside the covered taxable period, and unsupported “other income” items allegedly treated as zero-rated sales. (Ford Group Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case No. 10728)

ALLEGATIONS OF ERROR MUST BE SUPPORTED BY EVIDENCE. Any expense otherwise deductible from gross income shall be allowed only if the corresponding required withholding tax has been properly withheld and remitted to the BIR. In this case, the BIR disallowed the taxpayer’s claimed expenses on the ground that the appropriate expanded withholding taxes were not shown to have been withheld on various income payments. The Court held that the taxpayer’s bare allegations of error, unsupported by competent evidence, could not overturn the assessment. Thus, a reduced amount was sustained for failure to comply with withholding requirements and failure to substantiate contrary claims. (3D Networks Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case No. 10981, February 11, 2026)

ALLEGATION OF TIMING DIFFERENCE BETWEEN SALES PER ITR AND SAWT REQUIRES PROOF THAT DISCREPANCY WAS REPORTED IN ANOTHER PERIOD.  All income derived from whatever source, including gross sales or receipts, forms part of taxable income and must be fully declared in the income tax return, with the burden resting on the taxpayer to properly report and substantiate all income earned within the taxable year. In this case, the BIR found a discrepancy arising from the comparison of the taxpayer’s Sales per Summary Alphalist of Withholding Tax at Source (SAWT) and its declared Sales per ITR, which the BIR treated as undeclared income subject to income tax. The taxpayer argued that the variance was merely due to timing differences in the recognition of income and the issuance or utilization of BIR Form No. 2307 by customers, asserting that sales are recorded upon delivery or actual sale while withholding certificates may be issued later upon payment. However, the Court held that the taxpayer failed to present sufficient evidence to prove that the discrepancy was already reported in another taxable year or that it was otherwise properly subjected to income tax, and mere allegations of timing differences cannot overcome the presumption of correctness of the assessment. (3D Networks Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case No. 10981, February 11, 2026)

INTEREST MUST BE SUPPORTED BY RECEIPTS/INVOICE TO PROVE IT IS PAID OR INCURRED; LOAN AGREEMENT AND AFS MERELY PROVE EXISTENCE AND THUS INSUFFICIENT. Interest paid or incurred within a taxable year on indebtedness connected with the taxpayer’s trade, business, or profession may be claimed as a deductible expense, provided that the taxpayer is able to substantiate both the existence of the obligation and the actual payment or incurrence of the expense with sufficient supporting documents. In this case, although the taxpayer presented a loan agreement showing a loan obligation with a principal amount and annual interest rate, as well as disclosure in the AFS, the Court held that these documents merely established the existence of the loan but did not sufficiently prove the actual interest expense claimed as deduction since no vouchers, receipts, ledgers, or other documentary evidence were submitted to verify the expense; thus, the assessment disallowing the deduction for unsupported interest expense was sustained. (3D Networks Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case No. 10981, February 11, 2026)

RETIREMENT BENEFIT EXPENSE MAY BE SUPPORTED BY ACTUARIAL VALUATION REPORT. An employer who establishes or maintains a pension trust or retirement plan for its employees may deduct from gross income the reasonable retirement benefit expenses or pension liabilities accrued during the taxable year, provided that such amounts are properly substantiated and recognized in accordance with applicable accounting standards. In this case, the Court found that the assessment disallowing the taxpayer’s retirement benefit expense was improper because the taxpayer was able to sufficiently establish the validity of the deduction through documentary and accounting evidence. The amount pertained to accrued retirement benefit cost recognized in the taxpayer’s AFS, specifically disclosed in the notes, showing that the taxpayer maintained a defined benefit retirement plan covering permanent employees. The Court noted that the retirement benefit obligation was computed through actuarial studies, and was further supported by the actuarial valuation report. Since the expense was properly accrued, adequately disclosed, and sufficiently substantiated by competent evidence, the Court ruled that the retirement benefit expense was a valid deductible expense and ordered the cancellation of the assessment. (3D Networks Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case No. 10981, February 11, 2026)

MEDICAL EXPENSES MUST BE SUPPORTED BY RECEIPTS/INVOICE TO PROVE PAYMENT; AGREEMENTS AND LEDGERS ARE NOT SUFFICIENT. Ordinary and necessary business expenses may be deducted from gross income only if the taxpayer is able to substantiate the amount of the expense with sufficient evidence, such as official receipts, sales invoices, or other adequate records, and establish that the expense is directly connected with the conduct, development, or operation of its trade or business. In this case, the Court sustained the assessment disallowing the taxpayer’s claimed staff medical because, although the taxpayer argued that the expenses pertained to medical assistance extended to employees, purchases from drugstore, and employee medicine, which the taxpayer characterized partly as de minimis benefits, the Court found that the taxpayer failed to sufficiently substantiate the deduction. While the taxpayer submitted the Supplement to the Group Corporate Agreement with Avega Managed Care, Inc. and a general ledger snapshot, it failed to present the underlying official receipts, sales invoices, or other documentary proof necessary to verify the nature and actual payment of the claimed expenses. Absent competent supporting evidence, the Court held that the taxpayer failed to overcome the presumption of correctness accorded to tax assessments, thereby sustaining the disallowance of the deduction. (3D Networks Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case No. 10981, February 11, 2026)

PENALTIES MUST BE SUPPORTED BY PROOF OF ACTUAL PAYMENT; SCHEDULE IS NOT SUFFICIENT. Deductible business expenses must be properly substantiated by sufficient evidence, such as official receipts, invoices, or other adequate records proving both the existence and actual payment of the expense during the taxable period. In this case, the Court sustained the assessment disallowing the taxpayer’s claimed penalties, which the taxpayer asserted represented interest penalties arising from the late filing of BIR tax returns, because the taxpayer failed to satisfy the statutory substantiation requirement. The Court found that the taxpayer merely submitted a schedule summarizing the transactions but did not present the corresponding filed tax returns, proof of payment, official receipts, or other documentary evidence necessary to verify the nature and actual payment of the claimed expense. In the absence of competent supporting documents, the taxpayer failed to establish the validity of the deduction, and thus the Court upheld the assessment made by the Bureau of Internal Revenue. (3D Networks Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case No. 10981)

RENTAL EXPENSES MUST BE SUPPORTED BY INVOICE/RECEIPTS TO PROVE ACTUAL PAYMENT; LEASE AGREEMENT IS NOT SUFFICIENT. A taxpayer may deduct from gross income reasonable rental payments and other charges required as a condition for the continued use or possession of property used in the conduct of trade or business, provided that such expenses are properly substantiated in accordance with the documentary requirements of tax law. In this case, although the taxpayer argued that the dues and subscriptions expense represented association dues pursuant to its lease agreement, which required monthly payments for maintenance, security, and other building services necessary for its business operations, the Court held that the deduction was properly disallowed for lack of sufficient substantiation. The Court found that while the lease agreement established the taxpayer’s obligation to pay the association dues, it did not, by itself, prove that the expenses were actually incurred and paid during the taxable period. The taxpayer failed to present supporting invoices, official receipts, or other documentary evidence from the lessor or condominium corporation that could verify the actual payment of the claimed expense. (3D Networks Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case No. 10981)

BRANCH PROFIT REMITTANCE TAX (BPRT) IS IMPOSED ON PROFITS ACTUALLY REMITTED BY A BRANCH TO ITS HEAD OFFICE, OR ON PROFITS APPLIED OR EARMARKED FOR SUCH REMITTANCE. In this case, the BIR assessed the taxpayer for deficiency BPRT on the theory that unaccounted branch profits were not reflected in the taxpayer’s account and were therefore either actually or constructively remitted to its head office; however, the Court found that this conclusion was unsupported by evidence, as the BIR failed to establish any actual remittance or any act showing earmarking or appropriation of profits for remittance, and instead relied solely on a presumption derived from alleged discrepancies. On the contrary, the taxpayer successfully demonstrated through its audited financial statements and Statement of Changes in Home Office Account that no remittance occurred, as its Home Office account and accumulated earnings consistently increased and even in succeeding years, which is inconsistent with any inference of remittance, whether actual or constructive, and was further corroborated by the testimony of its finance manager confirming that no branch profits were ever remitted or offset against any payable to the head office. Accordingly, the Court held that the deficiency BPRT assessment had no factual or legal basis and must be cancelled for lack of actual or constructive remittance. [Telstra International (AUS) Limited ROHQ, v. CIR, CTA Case No. 10655, February 12, 2026]

INPUT VAT ARISING FROM PAYMENTS FOR SERVICES RENDERED BY NON-RESIDENTS MAY ONLY BE CLAIMED AS INPUT TAX IF PROPERLY SUBSTANTIATED BY A DULY FILED BIR FORM NO. 1600 AND PROOF OF REMITTANCE OF THE FINAL WITHHOLDING VAT. Applying this, the Court found that a comparison between the taxpayer’s VAT returns and its BIR Form No. 1600 disclosed a discrepancy in the amount of services rendered by non-residents, showing that the taxpayer overclaimed input tax corresponding to unsubstantiated transactions. (National Reinsurance Corporation of the Philippines v. CIR, CTA Case No. 11156, February 13, 2026)

INPUT VAT ATTRIBUTABLE TO VAT-EXEMPT SALES MUST BE DISALLOWED; EXCESS INPUT VAT CARRIED OVER TO SUBSEQUENT PERIOD CANNOT ABSORB THE ASSESSMENT DUE TO DOUBLE RECOVERY. A VAT-registered taxpayer engaged in both VATable and VAT-exempt transactions is required to proportionately allocate input VAT when such input taxes cannot be directly attributed to a specific transaction, and only the portion attributable to VATable transactions may be recognized as input tax credit, while input VAT allocable to exempt sales must be excluded. Applying these provisions, the Court found that the taxpayer had substantial mixed transactions but failed to properly deduct from its available input VAT the portion attributable to exempt sales, despite reporting significant exempt revenues. After recomputing the proper allocation of the taxpayer’s input VAT based on the proportion of VATable and exempt sales, the Court determined that the taxpayer overclaimed input VAT. The Court rejected the taxpayer’s argument that its large excess input VAT carryover from prior periods should absorb the assessment, ruling that the overstated input tax credits had already been carried forward and remained available for utilization in succeeding taxable periods; thus, allowing an offset against the present assessment would effectively permit double recovery to the prejudice of the government. Since the taxpayer failed to establish that these disallowed input tax credits were not subsequently utilized, the Court sustained the assessment. (National Reinsurance Corporation of the Philippines v. CIR, CTA Case No. 11156, February 13, 2026)

CANCELLED OFFICIAL RECEIPTS CANNOT SERVE AS A VALID BASIS FOR DEFICIENCY VAT ASSESSMENT; OFFICIAL RECEIPTS PERTAINING TO A DIFFERENT TAXABLE YEAR MUST BE SUPPORTED BY SUFFICIENT EVIDENCE ESTABLISHING THAT THE TRANSACTION WAS PROPERLY REPORTED AND THAT THE CORRESPONDING VAT WAS DULY DECLARED AND REMITTED IN THAT YEAR. Value-added tax is imposed on gross receipts derived from the sale of services, and the BIR is authorized to assess deficiency VAT when a taxpayer fails to declare taxable receipts. In this case, the BIR assessed the taxpayer for deficiency VAT arising from alleged undeclared receipts based on purportedly missing Official Receipts (ORs), computed by deriving the average sales per issued OR and multiplying it by the number of allegedly missing receipts. The taxpayer argued that the receipts were not missing, asserting that several ORs had been cancelled while others pertained to transactions in another year. Upon examination of the documentary evidence, the Court found that some ORs were validly cancelled, while several receipts indeed bore 2018 dates. However, the taxpayer failed to present sufficient proof that the receipts dated in 2018 had actually been reported and remitted during that year, and the Court noted that the issuance of the receipts was not chronological, thereby casting doubt on the taxpayer’s claim that such transactions properly belonged to 2018. As a result, while the Court rejected the assessment insofar as cancelled receipts were concerned, it sustained the deficiency VAT assessment attributable to receipts dated in 2018 for which the taxpayer failed to substantiate prior reporting. (Set and Stage Resource Management, Inc. v. CIR, CTA Case No. 10703, February 13, 2026)

FAILURE TO COMPLY WITH INVOICING REQUIREMENTS RESULTS IN DISALLOWANCE OF INPUT VAT. A taxpayer may claim input value-added tax only when such input tax is supported by valid VAT invoices issued in strict compliance with the invoicing requirements, and failure to satisfy these documentary requirements warrants the disallowance of the corresponding input tax credits. In this case, the BIR disallowed the taxpayer’s claimed input VAT after finding that several supporting invoices and official receipts failed to comply with mandatory invoicing requirements prescribed by law. Upon examination of the documentary evidence submitted by the taxpayer, the Court found that input VAT was properly disallowable due to multiple invoicing defects, including unsupported transactions, incorrect VAT amounts, failure to indicate the nature of services rendered, absence of VAT amount, missing authorized signatures, absence of the taxpayer’s address, incomplete the taxpayer details, and failure to state the taxpayer’s TIN. These deficiencies rendered the supporting documents legally insufficient to substantiate entitlement to input VAT credits under the Tax Code. (Set and Stage Resource Management, Inc. v. CIR, CTA Case No. 10703, February 13, 2026)

REVENUE ISSUANCES

BIR DEADLINES FROM JUNE 29, 2026 TO JULY 5, 2026. A gentle reminder on the following deadlines, as may be applicable:

DATE	FILING/SUBMISSION
June 29, 2026	e-FILING & PAYMENT (Online/Manual) – BIR Form 1702Q (Quarterly Income Tax Return For Corporations, Partnerships and Other Non-Individual Taxpayers) and Summary Alphalist of Withholding Taxes (SAWT) – Fiscal Quarter ending April 30, 2026
June 30, 2026	SUBMISSION – Soft copies of Inventory List and Schedules stored and saved in DVD-R/USB properly labeled together with Notarized Sworn Declaration – Fiscal Year ending May 31, 2026
	SUBMISSION – Manufacturers’/Assemblers’/Importers’ Sworn Statement of each Particular Brand/Model of Automobile, Alcohol Products, Tobacco Products and Sweetened Beverage Products. 1st Semester of 2026
	SUBMISSION – Proof of eFiled BIR Form 1702– RT/1702-EX/1702-MX with Audited Financial Statements (AFS), 1709 (if applicable), and Other Attachments through Electronic Audited Financial Statements (eAFS)– Fiscal Year ending February 28, 2026
	e-SUBMISSION – Quarterly Summary List of Sales/Purchases/Importations by a VAT Registered Taxpayers. eFPS Filers – Fiscal Quarter ending May 31, 2026
	ONLINE REGISTRATION (thru ORUS) – Computerized Books of Accounts and Other Accounting Records – Fiscal Year ending May 31, 2026
July 1, 2026	SUBMISSION – Consolidated Return of All Transactions based on the Reconciled Data of Stockbrokers. June 16-30, 2026
	SUBMISSION – Engagement Letters and Renewals or Subsequent Agreements for Financial Audit by Independent CPAs. Fiscal Year beginning September 1, 2026
July 5, 2026	SUBMISSION – Summary Report of Certification issued by the President of the National Home Mortgage Finance Corporation (NHMFC). Month of June 2026
	e-FILING/FILING & e-PAYMENT/PAYMENT – BIR Form 2000 (Monthly Documentary Stamp Tax Declaration/Return). Month of June 2026
	e-FILING/FILING & e-PAYMENT/PAYMENT – BIR Form 2000-OT (Documentary Stamp Tax Declaration/Return One-Time Transactions). Month of June 2026

COURT OF TAX APPEALS DECISIONS

AN ASSESSMENT BASED ON A MOA WITHOUT A NEW LOA IS VOID. Only the Commissioner of Internal Revenue (CIR) or duly authorized representatives may authorize the examination of taxpayers through a valid Letter of Authority (LOA) while Bureau of Internal Revenue (BIR) regulations expressly require the issuance of a new LOA whenever a case is reassigned or transferred to another RO, as a Memorandum of Assignment (MOA) cannot substitute for an LOA since authority to examine and assess taxes emanates exclusively from the CIR; assessments issued by unauthorized Revenue Officer (RO) are void ab initio. Applying these principles, the Court held that although the original audit of respondent was covered by a valid LOA issued to the originally assigned RO, the subsequent continuation of the audit by another RO, following the transfer of the original examiner, was unauthorized because she acted solely by virtue of a MOA issued by RDO and not pursuant to a new LOA as required by law and jurisprudence. Consequently, the audit investigation and the resulting Formal Letter of Demand/Final Assessment Notice (FLD/FAN) and Final Decision on Disputed Assessment (FDDA) were declared null and void for having been issued by an unauthorized examiner. The Court further held that the deficiency Value-Added Tax (VAT) assessment lacked factual and legal basis because the CIR failed to substantiate the claim that the taxpayer was liable for VAT, having failed to present the alleged sugar quedans purportedly issued in the names of individual members rather than the cooperative, while evidence showed that respondent was issued Advance Authority to Release Refined Sugar (AARR) under its own name, supporting its VAT-exempt status as previously recognized in jurisprudence. In any event, the assessment had already prescribed because the CIR had only three years from the filing of the VAT return or issuance of the AARRs to assess deficiency VAT, yet the FLD/FAN was issued beyond the prescriptive period. [Commissioner of Internal Revenue v. VMC Farmers Multi-Purpose Cooperative, CTA EB No. 2856 (CTA Case No. 9859), December 10, 2025; Commissioner of Internal Revenue v. Alan U. Chan, CTA EB No. 2988, CTA EB No. 2988 (CTA Case No. 10034), February 11, 2026; Commissioner of Internal Revenue v. Fort Palm Spring Condominium Corporation, CTA EB No. 2963 (CTA Case No. 9999), February 3, 2026]

ACTUAL RECEIPT OF PAN IS MANDATORY; IF RECEIPT IS DENIED BY THE TAXPAYER, THE BIR MUST PROVE THAT PAN IS RECEIVED; PROOF OF MAILING IS NOT SUFFICIENT; SUBSEQUENT FILING OF A PROTEST DOES NOT CURE THE DEFECT; RECEIPT OF FAN BY SECURITY GUARD WITHOUT PROOF OF AUTHORITY IS VOID. Due process requires that a taxpayer must first be validly served with a PAN informing it in writing of the factual and legal bases of the deficiency assessment, with service generally requiring personal service first, and substituted service or service by mail allowed only when personal service is impracticable; jurisprudence consistently holds that actual receipt by the taxpayer is indispensable, and where receipt is denied, the burden shifts to the BIR to prove by competent evidence that the assessment notice was actually received, as mere proof of mailing or registry receipts alone are insufficient. Applying these rules, the Court found that although the BIR presented a registry receipt showing that the PAN was mailed to the taxpayer’s registered address, it failed to prove actual receipt because no registry return card, acknowledgment receipt, or any competent evidence was presented showing that the taxpayer or its authorized representative actually received the PAN, and the BIR likewise failed to prove its alleged personal service. On the contrary, the taxpayer presented evidence that the mailed PAN was returned to sender, directly disputing receipt and shifting the burden of proof to the BIR, which it failed to discharge. Moreover, the taxpayer’s subsequent filing of a protest did not cure the defect, as Supreme Court jurisprudence has consistently held that the BIR’s failure to strictly comply with due process requirements cannot be remedied simply because the taxpayer later participated in the proceedings. Accordingly, because the PAN was not validly served, the entire assessment process was fatally defective, warranting the cancellation of the FLD/FAN, FDDA, Preliminary Collection Letter (PCL), and Final Notice Before Seizure (FNBS), all of which were declared null and void. [Commissioner of Internal Revenue v. JTKC Land, Inc., CTA EB No. 2914 (CTA Case No. 9508), February 26, 2026]; the Court held that the CIR failed to establish valid service of the FAN/FLD dated January 14, 2020 despite evidence that the notices were sent through courier and allegedly received by “SG Carillo,” because no proof was presented showing that such recipient was authorized to receive assessment notices on behalf of the taxpayer, and the CIR in fact failed to authenticate the notation on the courier receipt or establish the recipient’s authority. The Court likewise rejected the argument that the taxpayer’s alleged failure to formally notify the BIR of a change of address cured the defect, ruling that non-compliance with an administrative requirement cannot validate an assessment already void for lack of due process. Since a void assessment produces no legal effect, the deficiency tax assessments never became final, executory, or demandable, rendering the subsequent WDL and WG likewise void and unenforceable. Further, because the Commissioner failed to prove valid receipt of the FLD/FAN within the 3-year prescriptive period, the right to assess deficiency taxes had already prescribed. [Commissioner of Internal Revenue v. Ship to Shore Medical Assist, Inc., CTA EB No. 3029 (CTA Case No. 10550), February 26, 2026; Commissioner of Internal Revenue v. Alan U. Chan, CTA EB No. 2988, CTA EB No. 2988 (CTA Case No. 10034), February 11, 2026; Commissioner of Internal Revenue v. Fort Palm Spring Condominium Corporation, CTA EB No. 2963 (CTA Case No. 9999), February 3, 2026]

FLD/FAN RECEIVED A DAY AFTER THE TAXPAYER REPLIED TO THE PAN IS VOID; FDDA WILL NOT CURE THE DEFECT. The BIR is mandated to inform taxpayers in writing of both the factual and legal bases of an assessment, and jurisprudence establishes that due process requires the BIR not only to receive the taxpayer’s reply to a PAN but to meaningfully consider and specifically address the defenses raised before issuing the FLD/FAN otherwise the assessment is void; applying these principles, although the taxpayer timely filed its Reply to PAN on January 22, 2015 disputing the disallowance of management fees, the BIR issued the FLD/FAN the very next day, January 23, 2015, with the Details of Discrepancy merely duplicating the PAN almost word-for-word except for updated surcharges and interest, and the BIR’s own witness admitted during cross-examination that the FLD was simply a reiteration of the PAN and contained no discussion whatsoever of the taxpayer’s arguments, demonstrating that the taxpayer’s explanations were never meaningfully considered at the PAN stage, thereby rendering the right to be heard illusory and constituting a violation of due process that was not cured by the later issuance of the FDDA, resulting in the nullity of the assessment [Commissioner of Internal Revenue v. Altimax Broadcasting Co., Inc., CTA EB No. 2932 (CTA Case No. 10285), February 10, 2026]

FLD/FAN RECEIVED 8 DAYS AFTER RECEIPT OF THE PAN RENDERS THE ASSESSMENT VOID. A taxpayer who receives a PAN must be given a mandatory 15-day period within which to respond before the BIR may issue a FLD/FAN as this period forms an essential component of procedural due process. Applying these principles, the Court held that the CIR violated the taxpayer’s right to due process when the PAN was received on January 7, 2014, giving the taxpayer until January 22, 2014 to respond, yet the FLD/FAN was issued and received on January 15, 2014, only eight days after receipt of the PAN and seven days before expiration of the statutory response period. The Court rejected the CIR’S argument that due process was substantially complied with merely because the taxpayer was notified of the assessment and was later able to file a protest, emphasizing that disregard of the 15-day grace period is not a minor procedural defect but a fatal violation of the taxpayer’s constitutional right to due process. Thus, the premature issuance of the FLD/FAN invalidated the entire assessment process [Commissioner of Internal Revenue v. Health Plan Philippines, Inc., CTA EB No. 3134 (CTA Case No. 10262), December 5, 2025].

BIR’S GENERIC STATEMENT IN THE FLD/FAN WITHOUT GENUINE EVALUATION OF TAXPAYER’S REPLY TO THE PAN RENDERS THE ASSESSMENT VOID. Due process in tax assessments requires not only that the taxpayer be given an opportunity to respond to a PAN, but also that the BIR genuinely consider the taxpayer’s explanations and specifically state the factual and legal reasons for rejecting them, as failure to do so renders the assessment void; applying these principles, the BIR completely disregarded its explanations, as shown by the FLD/FAN merely reproducing the PAN and identical Details of Discrepancies with no meaningful discussion of respondent’s defenses, while the generic statement that the taxpayer failed to submit sufficient evidence did not specifically address any substantive arguments raised, demonstrating that no genuine evaluation was undertaken and reducing the PAN process to a meaningless formality, thereby violating respondent’s right to due process and nullifying the assessment [Commissioner of Internal Revenue v. Bio-Resource Power Generation Corporation, CTA EB No. 3021 (CTA Case No. 10372), November 27, 2025; CIR v. Beta Electromechanical Corporation, CTA EB No. 2950 (CTA Case No. 10040), February 25, 2026; CPW Philippines, Inc. v. Commissioner of Internal Revenue, CTA Case No. 10665, February 13, 2026].

FLD/FAN WITHOUT DUE DATE OF PAYMENT IS VOID. A valid FLD/FAN must contain not only the amount of deficiency tax assessed but also a definite and specific due date for payment, since a final assessment must embody an actual and unequivocal demand for payment; absent such definite payment period, the assessment violates due process and is void. Applying this rule, the Court found that the FLD/FAN issued by the BIR is invalid because, although they stated the deficiency taxes allegedly due and instructed payment through authorized channels, the spaces provided for the due date of payment in every attached FANs were completely left blank. This defect was not merely technical, as the RO repeatedly admitted during cross-examination that no due date was indicated in any of the FANs attached to both the FLD and even the subsequent FDDA. The Court’s own review of the records confirmed the same absence of any specific payment deadline, demonstrating that there was no actual and enforceable demand for payment as required by law [Commissioner of Internal Revenue v. Major Shopping Management Corporation, CTA EB No. 2970 (CTA Case No. 9300), February 12, 2026].

FLD/FAN WITH DEADLINE EARLIER THAN DATE OF ISSUANCE IS VOID; INTEREST COMPUTATION BEYOND THE DUE PAYMENT DEADLINE ALSO RENDERS THE FLD/FAN VOID. A valid FLD/FAN is a substantive prerequisite to tax collection and must not merely compute tax liabilities, but must also contain a clear and definite demand for payment specifying both the exact amount due and a specific future due date within which the taxpayer may comply; otherwise, the assessment is void for violating due process. Applying this rule, the Court found that although the BIR validly conducted the audit, the FLD/FAN issued against respondent suffered from incurable defects because it failed to state a definite due date and merely referred to attached Assessment Notices, which reflected a payment deadline of January 7, 2018 despite the FAN being issued only on December 7, 2018, making compliance legally impossible. The Court further ruled that even assuming the stated date was a typographical error and the intended deadline was January 7, 2019, the assessment still lacked definiteness because the interest computations extended up to January 11, 2019, four days beyond the supposed due date, thereby creating uncertainty as to the actual amount payable and undermining the requirement that tax liability be fixed and determinable. Since a valid assessment must provide the taxpayer a fair opportunity to know the precise liability and comply within a legally enforceable period, the ambiguity in both the due date and the computation of interest rendered the FAN legally ineffective. [Commissioner of Internal Revenue v. IBMS Technology Phils., Corporation, CTA EB No. 2999 (CTA Case No. 10177), Decision dated December 15, 2025]

OSG’S RECEIPT OF RESOLUTION IS THE RECKONING POINT OF APPEAL TO THE CTE EN BANC, NOT BIR’S. A party adversely affected by a Division decision or resolution must file a Petition for Review within fifteen (15) days from receipt, and jurisprudence consistently provides that in cases involving the government, the reckoning of the appeal period is based on receipt by the Office of the Solicitor General (OSG), as principal counsel, and not by deputized government lawyers who merely act as its representatives; applying these rules, although the CIR relied on the BIR deputized counsel’s receipt of the assailed Resolution on October 21, 2024, records showed that the OSG had already received the Resolution earlier on October 15, 2024, making October 30, 2024 the deadline to file either a Petition for Review or motion for extension, yet CIR filed the motion for extension only on November 4, 2024 and the Petition for Review on November 19, 2024, both beyond the reglementary period, thereby rendering the assailed Resolution final and executory by operation of law and depriving the Court of jurisdiction to entertain the appeal [Commissioner of Internal Revenue v. Bio-Resource Power Generation Corporation, CTA EB No. 3021 (CTA Case No. 10372), November 27, 2025]

LESSEE MAY BE SUBJECT TO DST FOR FAILURE TO PROVE THAT LESSOR PAID THE SAME OR IT IS EXEMPT. A Documentary Stamp Tax (DST) is imposed on every lease, agreement, memorandum, or contract for the use or rental of land or tenements; moreover, DST shall be paid by the person making, signing, issuing, accepting, or transferring the taxable document, unless the other party is exempt. Applying these provisions, the Court sustained the deficiency DST assessment against the taxpayer and rejected its argument that the lessor, as recipient of rental income, should be solely liable, holding that the law does not assign DST liability exclusively to the lessor and the taxpayer failed to prove that the lessor paid the DST or the taxpayer was exempt from liability under the lease agreement. The Court likewise upheld the DST assessment on future lease commitments, finding that the amounts disclosed in the audited financial statements represented fixed future minimum rental payments arising from a long-term lease contract renewed for years, covering the land where the supermarket and department store operated, and thus constituted taxable obligations subject to DST for each year of the contract term. [Commissioner of Internal Revenue v. The Landmark Corporation, CTA EB No. 2904 (CTA Case No. 9317), February 23, 2026].

REVENUE ISSUANCES

Revenue Regulations No. 004-2026

One-Time Abatement of Taxes and/or Penalties for Micro Taxpayers

Item	Details
Date Issued	June 22, 2026
Availment Period	Until December 31, 2026
Qualified Taxpayers	Micro taxpayers with gross annual sales not exceeding Php3,000,000 (for mixed-income earners, gross sales cover only business income excluding compensation from employer-employee relationship)
Liability Threshold	Covered basic tax liabilities and/or penalties must not exceed Php80,000 per taxable year
Covered Cases	1. Delinquent accounts 2. Cases with administrative protest pending the BIR office 3. Tax cases disputed before the DOJ and courts 4. Tax collection cases with courts 5. Cases with pending request for compromise settlement 6. Cases with pending request for abatement 7. Criminal violations, except those already filed in court
Cut-off Date of Covered Cases	Liabilities/cases existing on or before December 31, 2025
Application Venue	Revenue District Office (RDO) with jurisdiction over taxpayer
Abatement Fee	Php5,000 one-time fee per approved application
Result Upon Approval	Issuance of Certificate of Availment confirming settlement and closure of case

Revenue Memorandum Circular No. 64-2026 Requires all digital economic participants to systematically generate and display a QR-enabled Registration Seal Badge through the BIR’s Online Registration and Update System (ORUS).

Application	Applies directly to all taxpayers with an online presence, specifically targeting e-commerce merchants, digital content creators, freelancers, vloggers, and electronic service providers who operate commercial storefronts across digital platforms like Shopee, Lazada, TikTok Shop, or standalone domains.
Operational Mandates	Covered entities are strictly prohibited from exposing their full, sensitive Certificate of Registration (COR/eCOR) online to protect data privacy. Instead, they must enroll in the Online Registration and Update System (ORUS) to download and display a dedicated, standardized digital Registration Seal Badge.
Financial and Tax Obligation	While the generation of the badge graphic itself is provided free of charge by the Bureau, processing registration data updates or pulling system data through the portal requires the direct electronic payment of a Php30 loose Documentary Stamp Tax (DST) per transaction.
Public Verification Mechanics	The generated digital badge must be displayed prominently in an unaltered format on public-facing channels (e.g., “About Us” tabs, platform profiles). It features an embedded QR code linking to the official verification portal, allowing consumers and relying parties to audit business legitimacy without exposing sensitive taxpayer identification details.

BIR DEADLINES FROM JUNE 22, 2026 TO JUNE 28, 2026. A gentle reminder on the following deadlines, as may be applicable:

DATE	FILING/SUBMISSION
June 25, 2026	SUBMISSION – Quarterly Summary List of Sales/Purchases/Importations by a VAT Registered Taxpayer. Non-eFPS Filers – Fiscal Quarter ending May 31, 2026
	SUBMISSION – Sworn Statement of Manufacturer’s or Importer’s Volume of Sales of each particular Brand of Alcohol Products, Tobacco Products and Sweetened Beverage Products – Fiscal Quarter ending May 31, 2026
	eFILING & PAYMENT (Online/Manual) – BIR Form 2550Q (Quarterly Value-Added Tax Return). eFPS & Non-eFPS Filers. Fiscal Quarter ending May 31, 2026
	eFILING & PAYMENT (Online/Manual) – BIR Form 2551Q (Quarterly Percentage Tax Return). eFPS & Non-eFPS Filers. Fiscal Quarter ending May 31, 2026
	eFILING & PAYMENT (Online/Manual) – BIR Form 2550-DS (Value-Added Tax Return for Nonresident Digital Service Provider). Fiscal Quarter ending May 31, 2026

COURT OF TAX APPEALS DECISIONS

SERVICE OF NOTICES TO ACCOUNTING STAFF IS VALID IF TAXPAYER DID NOT TIMELY DISPUTE AUTHORITY; SERVICE OF NOTICES TO LAW FIRM/LAWYER IS VALID IF AUTHORIZED BY THE TAXPAYER. Service of assessment notices is governed by the Tax Code and related issuances, which allow service through personal or substituted service and deem service to an authorized representative or tax agent as valid service to the taxpayer. Under these rules, proper receipt is presumed valid when the notice is received by a person authorized by the taxpayer, and admissions made in judicial proceedings bind the party, while the doctrine of apparent authority likewise estops a corporation from denying the authority of its agents who have been clothed with actual or apparent authority to act on its behalf. In this case, the taxpayer’s own witness admitted receipt of the Warrant of Distraint and/or Levy (WDL) through its accounting staff, and the taxpayer did not timely dispute her authority, thereby constituting an implied admission that she was authorized to receive notices on its behalf. Similarly, the taxpayer expressly authorized the law office and its lawyer to receive all documents and communications relating to its tax audit, and the taxpayer’s subsequent conduct in allowing the lawyer to file the protest without objection further confirmed his apparent authority, rendering service of the Preliminary Assessment Notice (PAN) and Formal Letter of Demand/Final Assessment Notice (FLD/FAN) valid and binding. Moreover, the PAN and FLD/FAN were properly served, with the notices duly received, signed, and dated, and the regulation dispensed with stricter acknowledgment requirements. Accordingly, the Court upheld the validity of service of all assessment notices and rejected the taxpayer’s claims of improper notice for lack of merit (RCBC Leasing & Finance Corporation v. Commissioner of Internal Revenue (CIR), CTA Case No. 10786, December 9, 2025)

TAXPAYER MUST PROVE ACTUAL FILING DATES OF RETURN TO INVOKE PRESCRIPTION. Internal revenue taxes must be assessed within three (3) years from the last day prescribed by law for filing the return or from the actual date of filing, whichever is later, subject to suspension of the prescriptive period. Jurisprudence further clarifies that the FLD/FAN must be issued within the prescriptive period, and that prescription is a matter of defense which the taxpayer must clearly prove, including competent evidence of the actual filing dates of the relevant tax returns. In this case, the taxpayer’s claim that the BIR’s right to assess has prescribed cannot prosper because it failed to present proof of the actual filing dates of its tax returns, which are necessary to determine the reckoning point of the three-year prescriptive period. Absent such proof, the Court cannot establish that the period had lapsed before the issuance of the FLD/FAN, and thus there is no basis to conclude that prescription has set in. Accordingly, the Court held that the BIR’s right to assess the taxpayer has not yet prescribed. (RCBC Leasing & Finance Corporation v. Commissioner of Internal Revenue, CTA Case No. 10786, December 9, 2025)

TAXPAYER MUST SUBMIT EVIDENCE TO RECONCILE THE DIFFERENCE IN INTEREST BETWEEN ITR AND AFS. Interest expense is deductible only to the extent allowed by law. In this case, the BIR disallowed the taxpayer’s claimed interest expense for exceeding the allowable amount by comparing the interest reflected in the audited financial statements against the amount claimed in the income tax return. Because the taxpayer failed to present competent evidence to overturn the factual and legal basis of the disallowance, the Court upheld the BIR’s assessment and disallowance of the claimed interest expense. (RCBC Leasing & Finance Corporation v. Commissioner of Internal Revenue, CTA Case No. 10786, December 9, 2025)

TO BE DEDUCTIBLE, BAD DEBTS MUST BE SUPPORTED BY EVIDENCE SHOWING ACTUAL COLLECTION EFFORT. Losses may be deducted from gross income only if they are duly substantiated and properly charged off within the taxable year. The requirement for bad debts requires proof of worthlessness and reasonable efforts to collect before write-off. Moreover, the taxpayer must be sufficiently informed of the factual and legal bases of the assessment to enable an effective protest, but the burden remains on the taxpayer to overcome the presumption of correctness of tax assessments through competent evidence. In this case, the BIR disallowed the taxpayer’s claimed carried-over losses for being unsupported, which the petitioner recharacterized as validly written-off bad debts allegedly approved by its executive and credit committees upon advice of an external consultant who undertook collection efforts. However, the taxpayer failed to present documentary or other competent evidence showing actual, earnest collection efforts or substantiation of worthlessness of the accounts written off, rendering its claims as bare allegations insufficient to overturn the assessment. Thus, the Court sustained the BIR’s disallowance of the claimed losses for lack of factual support (RCBC Leasing & Finance Corporation v. Commissioner of Internal Revenue, CTA Case No. 10786, December 9, 2025)

DONATIONS AND CHARITABLE CONTRIBUTIONS ARE DEDUCTIBLE FROM GROSS INCOME ONLY IF PROPERLY SUBSTANTIATED. Under the general rules on evidence and tax assessments, the taxpayer bears the burden of proving entitlement to deductions. In this case, the BIR disallowed the taxpayer’s claimed donations and charitable contributions for lack of support. The taxpayer contended that it did not actually claim donations as an expense in its income tax return, pointing out that the relevant line item was left blank and arguing that the alleged amount only appeared in a later-provided matching schedule under a “miscellaneous” account. However, the Court found these explanations insufficient as the taxpayer failed to present competent evidence showing that the amounts were not properly classified as donations or that they complied with the requisites for deductibility. Accordingly, the Court upheld the disallowance for lack of substantiation (RCBC Leasing & Finance Corporation v. Commissioner of Internal Revenue, CTA Case No. 10786, December 9, 2025)

TAXPAYER MUST PROVE WITH SUPPORTING DOCUMENTS ITS RECONCILIATION ON THE DISCREPANCY BETWEEN FBT EXPENSE PER ITR AND ACTUAL FBT REMITTED. Deductions and claimed tax expenses must be properly substantiated. In this case, the BIR disallowed the taxpayer’s claimed overstatement of fringe benefit tax (FBT) expense upon finding a discrepancy between the FBT expense reported in the taxpayer’s income tax return and the actual FBT withheld and remitted, which the Court found was sufficiently supported. Although the taxpayer alleged that it had submitted documents to the BIR showing no discrepancy and that the amounts matched, it failed to formally offer such supporting documents in evidence before the Court, leaving the assessment unrebutted. Accordingly, the Court upheld the disallowance of the overclaimed FBT expense. (RCBC Leasing & Finance Corporation v. Commissioner of Internal Revenue, CTA Case No. 10786, December 9, 2025)

AN ASSESSMENT ITEM REFLECTED IN THE FLD/FAN BASED SOLELY ON THE TRIAL BALANCE, WITHOUT DISCLOSURE OF THE SPECIFIC ACCOUNT OR DETAILED COMPUTATION, WITH PARTICULARS REVEALED ONLY LATER IN THE FDDA, IS IMPROPER AND MUST BE DELETED. Due process in tax assessments requires that the taxpayer be informed in writing of the factual and legal bases of the assessment through the FLD/FAN, enabling the taxpayer to properly and intelligently file a protest. Failure to comply with this mandatory requirement renders the assessment void, consistent with jurisprudence emphasizing that mere conclusions or general computations are insufficient. In this case, respondent assessed petitioner for deficiency percentage tax on alleged receipts not subjected to gross receipts tax, presenting in the FLD only a computation of “receipts not subjected to GRT” supposedly derived from petitioner’s trial balance, but without identifying the specific accounts, entries, or detailed breakdown of the adjusting items used in the computation. The taxpayer argued that it was deprived of due process because the FLD contained only a bare computation and the details were disclosed only at the FDDA stage, where the BIR even admitted that the adjustments came from “credit balance and adjustments in the trial balance,” while suggesting that the taxpayer could simply trace the figures from its submitted trial balance. The Court rejected this reasoning, holding that such generalized reference was insufficient and that the BIR had a duty to specifically identify the exact items in the trial balance used as basis for the adjustments. Since the lack of particulars prevented the taxpayer from intelligently contesting the assessment at the administrative stage, the Court ruled that the BIR failed to comply with the requirements of due process, warranting the deletion of the deficiency percentage tax assessment and its corresponding findings in the FDDA. (RCBC Leasing & Finance Corporation v. Commissioner of Internal Revenue, CTA Case No. 10786, December 9, 2025)

AN EWT ASSESSMENT PREMISED SOLELY ON GENERAL TRIAL BALANCE CLASSIFICATIONS AND COMPARISON WITH THE ALPHALIST IS IMPROPER AND MUST BE DELETED. Tax assessments must clearly state the factual and legal bases thereof in the FLD/FAN to satisfy due process, and failure to provide sufficient particulars deprives the taxpayer of the opportunity to intelligently contest the assessment, rendering it void. In this case, the BIR assessed taxpayer for deficiency expanded withholding tax by merely using generalized classifications such as “Subject to 1% WE” and “Subject to 10% WE” to describe various income payments allegedly derived from the taxpayer’s trial balances, and then comparing these with amounts reflected in the taxpayer’s Alphalist. The Court found that this approach was too vague and failed to identify the specific transactions, payees, or income items subject to withholding, thereby preventing the taxpayer from properly understanding and contesting the basis of the deficiency assessment. Accordingly, the Court ruled that the BIR failed to comply with the mandatory requirements of due process, and the expanded withholding tax assessment was deleted from the FLD/FAN and FDDA. (RCBC Leasing & Finance Corporation v. Commissioner of Internal Revenue, CTA Case No. 10786, December 9, 2025)

A TAXPAYER MAY CHALLENGE A BIR ASSESSMENT BEFORE THE CTA, WHETHER THROUGH AN APPEAL FROM (1) FLD/FAN OR FDDA OR (2) WDL OR WG, BUT FAILURE TO COMPLY WITH THE REGLEMENTARY PERIOD DEPRIVES THE CTA OF JURISDICTION. Jurisdiction over the subject matter is conferred by law and is determined by the court at the earliest opportunity, being indispensable to the validity of all proceedings. The CTA in Division has exclusive appellate jurisdiction over decisions of the CIR in cases involving disputed assessments, refunds, or other matters arising under the NIRC, and such jurisdiction may only be exercised when the appeal is seasonably filed within the reglementary period. In this case, the taxpayer failed to comply with the mandatory requirements for a valid protest by filing the same beyond the 30-day period from receipt of the FLD/FAN and without properly indicating the nature and basis of the protest, thereby rendering the assessment final, executory, and no longer a disputed assessment cognizable by the CTA. Consequently, there was no valid action or decision of the CIR that could be elevated under the first instance of CTA jurisdiction. Likewise, the taxpayer’s recourse against the WDL and WOGs was likewise filed beyond the 30-day reglementary period counted from receipt of the issuances, thereby failing to perfect an appeal even under the CTA’s “other matters” jurisdiction. Thus, both on the basis of an unappealed final assessment and belated judicial recourse against enforcement issuances, the Court in Division correctly held that it had no jurisdiction to entertain the petition (Cap John Hay Trade and Cultural Center, Inc. v. CIR, CTA Case EB No. 2923, CTA Case No. 10014, December 4, 2025)

IAET MAY STILL BE VALIDLY IMPOSED FOR TAXABLE YEARS PRIOR TO THE EFFECTIVITY OF THE CREATE LAW THAT ABOLISHED IT, NOTWITHSTANDING THAT THE FAN/FLD WAS ISSUED ONLY AFTER THE LAW TOOK EFFECT IN 2021. In tax law, repeals or amendments affecting tax impositions are applied only prospectively unless expressly made retroactive. Specifically, the regulations on IAET provide that IAET is no longer imposed upon the effectivity of the CREATE Act and applies prospectively. In this case, the taxpayer’s argument that CREATE Law effectively barred the assessment of IAET is untenable because there is no showing that Congress intended the repeal to operate retroactively; thus, IAET remains imposable for taxable year 2017, which is a period prior to the law’s effectivity (April 2021), notwithstanding that the FLD/FAN were issued in June 2021, after CREATE took effect. Accordingly, since the taxable period involved preceded the CREATE Law, the BIR can assess IAET against the taxpayer (DHL Supply Chain Phils, Inc. v. CIR, CTA Case No. 10722, December 2, 2025)

THE CTA MAY VALIDLY RULE ON A REFUND CLAIM EVEN WHEN THE CASE FILED PERTAINS TO THE DISPUTE OF AN ASSESSMENT. The CTA has jurisdiction over cases involving decisions of the CIR on disputed tax assessments and claims for refund or issuance of tax credit certificates, and may resolve refund claims in the same proceeding when necessary to determine the correct tax liability and avoid multiplicity of suits. In this case, the taxpayer’s claim for refund representing amounts garnished and collected by the BIR was properly entertained by the Court as the refund is directly anchored on the nullification of the IAET assessment. Records show that the BIR enforced collection through garnishment from the petitioner’s bank account and subsequently issued a manager’s check in favor of the BIR, which was duly admitted by the BIR and supported by documentary evidence, while the WDL and WG were issued during the pendency of the case. Thus, since the assessment was found void and the taxpayer was held not liable for IAET, the amounts collected have no legal basis and must be returned. Accordingly, to avoid multiplicity of suits and ensure full adjudication of tax liability in a single proceeding, the Court ordered the refund of the garnished amount (DHL Supply Chain Phils, Inc. v. CIR, CTA Case No. 10722, December 2, 2025)

VAT ASSESSMENT BASED ON UNDER-DECLARED EXPENSE SHOULD BE CANCELLED. Tax assessments based on third-party information (TPI) matching must be supported by verified and credible evidence, as the presumption of correctness accorded to tax assessments cannot rest on another presumption. Moreover, VAT is imposed only on actual sales or receipts from the sale of goods or services, not on purchases or disbursements. In this case, the BIR assessed the taxpayer for an alleged unaccounted source of cash after finding discrepancies between the  SLP and third-party sales declarations, where TPI amounts exceeded the taxpayer’s recorded purchases. The Court held that the BIR failed to properly verify the TPI data, rendering the assessment factually deficient. More importantly, the discrepancy merely suggested an alleged under declaration of purchases, which by itself does not establish VAT liability since VAT attaches to sales, not purchases. The Court further noted that even assuming the discrepancy represented unaccounted cash used for purchases, the corresponding transactions would generate input VAT credits that would offset any output VAT. Since the assessment relied solely on layered presumptions unsupported by actual facts, the Court ruled that the deficiency VAT assessment based on the alleged unaccounted source of cash lacked factual basis and must be cancelled. (Fort Bonifacio Development Corporation v. CIR, CTA Case No. 10425, February 13, 2026)

A VAT ASSESSMENT BASED SOLELY ON A COMPARISON OF THE AFS AND VAT RETURNS, AND ON THE ARBITRARY DIVISION OF ANNUAL FIGURES TO DERIVE A HALF-YEAR ASSESSMENT, LACKS SUFFICIENT FACTUAL BASIS, IS IMPROPER, AND SHOULD BE CANCELLED. The BIR is empowered to examine a taxpayer’s books, records, papers, and other relevant documents in determining tax liabilities, and any resulting assessment must be grounded on actual facts rather than assumptions or arbitrary estimations. In this case, the BIR assessed the taxpayer for alleged overclaimed input VAT after comparing the taxpayer’s AFS with its VAT returns and concluding that the input taxes claimed exceeded those supported by financial records. The Court found merit in taxpayer’s argument that the assessment was arbitrary because the BIR examiners failed to consider its notes to the financial statements and instead relied on incomplete figures. More critically, the BIR failed to determine the actual portion of input taxes attributable to the audit period of July to December 2014, and merely divided annual figures by two under the unsupported assumption that purchases were evenly distributed throughout the year. Since the BIR neglected to examine the taxpayer’s supporting records to establish the actual amounts pertaining to the covered period, the resulting deficiency assessment lacked factual basis and the Court ordered the cancellation of the alleged overclaimed input tax assessment. (Fort Bonifacio Development Corporation v. CIR, CTA Case No. 10425, February 13, 2026)

WDL INITIATES COLLECTION EFFORTS OF THE BIR; PCL IS MERELY A DEMAND FOR PAYMENT AND DOES NOT ITIATE COLLECTION PROCEEDING. The BIR’s right to collect assessed taxes is exercised through administrative remedies of distraint and levy or through judicial proceedings, and collection efforts are deemed properly commenced only upon the issuance and service of a WDL or the filing of a court action, not by mere demand letters. The Court held that a Preliminary Collection Letter (PCL) merely constitutes a demand for payment and warning of future enforcement, but does not itself initiate collection proceedings or suspend the running of the prescriptive period. In this case, although the CIR argued that collection began upon issuance of the PCL, the Court found that the letter only demanded payment within ten days and warned that administrative remedies may later be pursued. By contrast, only the subsequently issued WDL expressly initiated actual collection by commanding seizure and levy of taxpayer property pursuant to the Tax Code. Accordingly, the Court En Banc ruled that collection efforts legally commenced only upon issuance of the WDL, affirmed the Division’s findings, and denied the CIR’s petition for lack of merit. (CIR v. South Cotabato 1 Electric Cooperative, Inc. CTA EB No. 3001 (CTA Case No. 10937), December 3, 2025.)

REVENUE ISSUANCES

Revenue Memorandum Circular No. 59-2026 All covered Non-Resident Digital Service Providers (NRDSPs) must register and fulfill tax liabilities in the Philippines, as international income tax treaties do not exempt them from consumer-level Value-Added Tax (VAT). 

Legal Principle (Treaty vs. Consumption Tax)	Income Tax Treaties vs. Business Tax Status: Double Taxation Agreements (DTAs) entered into by the Philippines apply exclusively to national Income Taxes. Because VAT is an indirect, consumption-driven business tax on the privilege of transaction, tax treaties provide zero exemption or preferential relief against the 12% Philippine digital VAT framework.
Registration Requirements	Administrative Compliance for NRDSPs: Even if an NRDSP’s core digital offerings are legally classified as “VAT-Exempt” under Section 109 of the Tax Code, the platform retains a mandatory obligation to register with the BIR and file periodic VAT returns to properly record and validate its Philippine-sourced VAT-exempt sales.
Cross-Border Cost-Sharing	B2B Transfer & Reverse Charge Control: When a foreign affiliate commands terms, sets pricing, or handles ordering/delivery for an entity in the Philippines, that affiliate is treated as the operational NRDSP. The local Philippine subsidiary must assume tax liability by utilizing the Reverse Charge Mechanism (BIR Form 1600-VT) to withhold and remit the 12% VAT.
Online Booking and Travel Platforms	Taxable Base Determination: For online booking systems, marketplaces, and travel hubs, the 12% VAT is applied only to the subscription fees, service charges, or commissions earned by the NRDSP platform—not to the entire gross room or reservation booking value collected from the user.
Pre-existing/Advance Contracts	Transitional Boundary Rules: For multi-month digital subscriptions or long-term technology contracts fully paid prior to June 2, 2025, buyers must segregate the covered period. Any pro-rated duration extending beyond June 2, 2025, is subject to the 12% VAT, requiring local B2B buyers to compute and remit the tax under the reverse charge mechanism.
Online Ads and Payments	Situs of Consumption – Digital Ads: If a Philippine business purchases digital advertising services, 12% VAT is due because the service is consumed by a local purchaser, regardless of whether the target audience is located abroad.
Online Ads and Payments	Situs of Consumption – Fund Transfers: International financial service NRDSPs are subject to 12% VAT only on the service fees or transaction charges collected from clients residing in the Philippines.

BIR DEADLINES FROM JUNE 15, 2026 TO JUNE 21, 2026. A gentle reminder on the following deadlines, as may be applicable:

DATE	FILING/SUBMISSION
June 15, 2026	REGISTRATION (Online thru ORUS or Manual) – Permanently Bound Loose-Leaf Books of Accounts/Invoices and Other Accounting Records. Fiscal Year ending May 31, 2026
June 15, 2026	eFILING & PAYMENT (Online/Manual) – BIR Form 1702-RT/1702-EX/1702-MX. Fiscal Year ending February 28, 2026
June 15, 2026	eFILING & PAYMENT (Online/Manual) – BIR Form 1707-A (Annual Capital Gains Tax Return For Onerous Transfer of Shares of Stock Not Traded Through the Local Stock Exchange) – by Corporate Taxpayers. Fiscal Year ending February 28, 2026
June 15, 2026	e-FILING & e-PAYMENT – BIR Forms 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) and/or 0619-E (Monthly Remittance Form of Creditable Income Taxes Withheld-Expanded) and/or 0619-F (Monthly Remittance Form of Final Income Taxes Withheld). eFPS Filers under Group A. Month of May 2026
June 15, 2026	e-PAYMENT – BIR Forms 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) and/or 0619-E (Monthly Remittance Form of Creditable Income Taxes Withheld-Expanded) and/or 0619-F (Monthly Remittance Form of Final Income Taxes Withheld) – eFPS Filers under Group E, D, C & B. Month of May 2026
June 16, 2026	SUBMISSION – Consolidated Return of All Transactions based on the Reconciled Data of Stockbrokers. June 1-15, 2026
June 20, 2026	e-FILING & PAYMENT (Online/Manual) – BIR Form 1600 WP (Remittance Return of Percentage Tax on Winnings and Prizes Withheld by Race Track Operators) – eFPS & Non-eFPS Filers. Month of May 2026
June 20, 2026	e-FILING – BIR Forms 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) and/or 0619-E (Monthly Remittance Form of Creditable Income Taxes Withheld-Expanded) and/or 0619-F (Monthly Remittance Form of Final Income Taxes Withheld) – eFPS Filers under Group C. Month of May 2026

SECURITIES AND EXCHANGE COMMISSION 

SEC SUSPENDS IMPOSITION OF PER-MONTH DELAY PENALTY. The SEC exercised its regulatory authority to suspend the imposition of the per-month delay penalty on covered corporations while maintaining existing reportorial and monitoring obligations. Suspension applies prospectively and uniformly, excludes retroactive relief for previously settled penalties, preserves filing duties and base penalties, and remains effective only for a limited period after which enforcement automatically resumes. SEC Memorandum Circular No. 16, Series of 2026 (Suspension of the Per-Month Delay Penalty), 2026. 

Title	Context
Temporary Suspension Only	The SEC temporarily suspended the imposition of the per-month delay penalty for covered corporations, while preserving the Commission’s authority to regulate reportorial compliance. The suspension applies prospectively and only removes the monthly penalty component; corporations remain subject to reportorial monitoring and compliance requirements.
Uniform Coverage	The suspension applies equally to all covered domestic and foreign corporations without distinction. Application of facts: eligibility is not dependent on capitalization, retained earnings, or prior offenses, ensuring uniform implementation.
Prospective Effect Only	The suspension has no retroactive application and does not alter obligations already finalized. Pending assessments are adjusted to remove future monthly penalties, while settled assessments remain final and are not refundable.
Filing Duties Remain	The suspension affects only the monthly penalty and does not remove filing obligations. Corporations are still required to comply with reportorial deadlines and remain under a continuing duty to submit required reports.

DATE	FILING/SUBMISSION
June 15, 2026	REGISTRATION (Online thru ORUS or Manual) – Permanently Bound Loose-Leaf Books of Accounts/Invoices and Other Accounting Records. Fiscal Year ending May 31, 2026
June 15, 2026	eFILING & PAYMENT (Online/Manual) – BIR Form 1702-RT/1702-EX/1702-MX. Fiscal Year ending February 28, 2026
June 15, 2026	eFILING & PAYMENT (Online/Manual) – BIR Form 1707-A (Annual Capital Gains Tax Return For Onerous Transfer of Shares of Stock Not Traded Through the Local Stock Exchange) – by Corporate Taxpayers. Fiscal Year ending February 28, 2026
June 15, 2026	e-FILING & e-PAYMENT – BIR Forms 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) and/or 0619-E (Monthly Remittance Form of Creditable Income Taxes Withheld-Expanded) and/or 0619-F (Monthly Remittance Form of Final Income Taxes Withheld). eFPS Filers under Group A. Month of May 2026
June 15, 2026	e-PAYMENT – BIR Forms 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) and/or 0619-E (Monthly Remittance Form of Creditable Income Taxes Withheld-Expanded) and/or 0619-F (Monthly Remittance Form of Final Income Taxes Withheld) – eFPS Filers under Group E, D, C & B. Month of May 2026
June 16, 2026	SUBMISSION – Consolidated Return of All Transactions based on the Reconciled Data of Stockbrokers. June 1-15, 2026
June 20, 2026	e-FILING & PAYMENT (Online/Manual) – BIR Form 1600 WP (Remittance Return of Percentage Tax on Winnings and Prizes Withheld by Race Track Operators) – eFPS & Non-eFPS Filers. Month of May 2026
June 20, 2026	e-FILING – BIR Forms 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) and/or 0619-E (Monthly Remittance Form of Creditable Income Taxes Withheld-Expanded) and/or 0619-F (Monthly Remittance Form of Final Income Taxes Withheld) – eFPS Filers under Group C. Month of May 2026

COURT OF TAX APPEALS DECISIONS

ASSESSMENT IS VOID IF TAXPAYER DENIES RECEIPT OF THE PAN AND BIR FAILED TO PROVE ACTUAL RECEIPT THEREOF. A PAN must be actually received by the taxpayer and the taxpayer must be given a reasonable opportunity to respond before the issuance of FLD/FAN, as part of the constitutional and statutory requirements of due process in tax assessment proceedings. Once the taxpayer categorically denies receipt of the PAN, the burden shifts to the BIR to prove by a preponderance of evidence that the PAN was in fact received by the taxpayer or its authorized representative. In this case, although the BIR presented a photocopy of a registry receipt allegedly showing mailing of the PAN, this evidence was insufficient to establish actual receipt because it lacked material details of the mailing transaction and was unsupported by an authenticated affidavit of the mailer. Thus, the BIR failed to discharge its burden of proving valid service of the PAN, resulting in a violation of the taxpayer’s right to due process and rendering the deficiency tax assessments null and void. The assessments were further rendered void by the participation of revenue officers who were not properly authorized to conduct the audit examination. [(CIR v. Bohol JSL Enterprises, Incorporated, CTA EB No. 2989 (CTA Case No. 10575, March 17, 2026); see also Mac Graphics Carranz International Corporation v. CIR (CTA Case No. 11150) March 18, 2026)

PARTICIPATION OF A GROUP SUPERVISOR IN THE AUDIT WITHOUT LOA RENDERS THE ASSESSMENT VOID. NIRC requires that an RO must first be specifically authorized through a valid LOA issued by the CIR or his duly authorized representative before conducting any audit or examination of a taxpayer’s books of accounts and accounting records. Jurisprudence consistently holds that the absence of a valid LOA, or the participation of an RO not named in the LOA without the issuance of a new or amended LOA, renders the resulting assessment void for violating due process and existing BIR regulations. In this case, while the subject LOA originally authorized RO De Guzman and GS Yahya to conduct the audit, the records showed that GS Glovasa later actively participated in the audit process, supervised the investigation, signed the Post-Reporting Notice, audit reports, and memorandum recommending the issuance of the PAN, despite not being authorized under any new or amended LOA. The BIR’s own witness likewise admitted that no LOA was issued in favor of GS Glovasa. Since her participation formed an essential part of the audit and assessment process, the deficiency income tax, VAT, and EWT assessments were declared null and void for having been conducted by an unauthorized revenue officer. [CIR v. Bohol JSL Enterprises, Inc., CTA EB No. 2989 (CTA Case No. 10575) March 17, 2026]

TAXPAYER HAS NO FRESH 180-DAY PERIOD ON APPEAL TO CIR; REMEDY IS TO WAIT FOR CIR’S DECISION, WHICH IS APPEALABLE TO THE CTA. A taxpayer may appeal a disputed assessment to the CTA within 30 days from receipt of the denial of the protest or from the lapse of the 180-day period within which CIR or his authorized representative must act on the protest. Jurisprudence further clarifies that the taxpayer’s remedies in cases of inaction are mutually exclusive, and there is only one continuous 180-day period reckoned from the submission of supporting documents, with no fresh 180-day period arising from an administrative appeal to the CIR. In this case, the taxpayer erroneously treated its administrative appeal to CIR filed on December 21, 2018 as giving rise to a new 180-day period, despite the original 180-day period from the filing of the protest having already lapsed on May 20, 2018. Consequently, when the FDDA was issued on November 26, 2018, the taxpayer’s remedy was limited to appealing the adverse decision to the CTA within 30 days from receipt thereof. Since the taxpayer instead relied on an invalid assumption of a renewed 180-day period and belatedly filed its Petition for Review, the CTA Division correctly ruled that it had no jurisdiction over the case due to the late appeal. [Friendlycare Foundation, Inc. v. CIR, CTA EB No. 3056, (CTA Case No. 10123), March 17, 2026]

SPLASH COLOGNES FALL WITHIN THE DEFINITION OF TOILET WATERS SUBJECT TO EXCISE TAX. NIRC imposes excise tax on perfumes and toilet waters, and jurisprudence has consistently held that the definition of “toilet waters” under Revenue Regulations No. 8-84, which implemented the percentage tax regime under the NIRC of 1977, is no longer applicable following the substantive change introduced by Executive Order No. 273 converting the tax on toilet waters from a percentage tax into an excise tax. Since RR No. 8-84 was issued specifically to implement the old sales or percentage tax system, it was deemed impliedly repealed upon the enactment of the new excise tax framework. Consequently, the Court gave weight to the CIR’s subsequent interpretation classifying colognes, including baby colognes and splash colognes, as “toilet waters” subject to excise tax, consistent with the CIR’s authority to interpret tax laws. Applying these principles, the Court held that the taxpayer Green Cross, Inc.’s splash colognes fall within the ordinary and commercial meaning of “toilet waters” and are therefore subject to excise tax, rejecting the taxpayer’s reliance on the 3% essential oil threshold found in RR No. 8-84 and its argument on legislative reenactment (Green Cross, Inc. v. Commissioner of Internal Revenue, CTA Case No. 11163, March 17, 2026)

THE REGIONAL DIRECTOR’S LETTER SIGNIFYING INTENT TO PROCEED WITH COLLECTION IS CONSIDERED A FINAL DECISION; SEE DISSENTING OPINION. A taxpayer may appeal a denial or inaction on a protest to the CTA within 30 days from receipt of the decision or lapse of the 180-day period. A final decision for purposes of appeal must be issued by the CIR or a duly authorized representative and must be unequivocal and final in character; however, the Supreme Court clarified that not all BIR communications, particularly collection-related issuances, constitute appealable final decisions. In this case, the taxpayer argued that it timely filed its judicial appeal after receiving the WDL treating it as the CIR’s final decision on its protest. However, the CTA held that the letter issued by a Regional Director, an official equivalent to a division chief, which explicitly signified the BIR’s intent to proceed with collection, already constituted the final decision on the disputed assessment; thus, the taxpayer should have filed its appeal within 30 days from receipt of said letter, not WDL. The Court rejected the taxpayer’s argument that it was still awaiting resolution of its protest, emphasizing that the CIR’s delegated authority allows regional officials to issue binding final decisions. The Court further held that a WDL is not the final decision on an assessment but merely a collection remedy. Nonetheless, the CTA ultimately ruled that despite procedural finality, the assessment was void ab initio because it was tainted by due process violations, specifically the participation of a revenue officer who was not properly authorized under a valid LOA but was instead assigned through a mere Memorandum of Assignment. Accordingly, the Court held that an assessment issued in violation of due process cannot attain finality, produces no legal effect, and cannot support any collection action; hence, both the deficiency tax assessment and the resulting WDL were declared void, and the BIR was barred from enforcing collection. (Gensbio Marketing Corp. v. CIR, CTA Case No. 10054, March 18, 2026) Separate opinion: only a valid FDDA containing factual and legal bases and an explicit declaration of finality is appealable, and collection issuances like warrants cannot substitute for such a decision;  the letter cannot be treated as an FDDA because it did not state factual/legal bases or indicate finality and therefore cannot trigger the 30-day appeal period) instead, the case should be treated as one of inaction.

DUE DATES LAPSED BEFORE THE RECEIPT OF THE FLD/FAN RENDER THE ASSESSENT VOID. A valid tax assessment must constitute a definite and unequivocal demand for payment within a specific and future due date, as due process requires that taxpayers be properly informed of their liability and given a genuine opportunity to pay or contest the assessment; failure to state a definite due date or the existence of an actual demand for payment renders the assessment void for violating due process. In this case, the Court found that the FLD/FAN and the FDDA were void because both contained due dates that had already lapsed even before the taxpayer received them, effectively depriving petitioner of any meaningful opportunity to comply or respond, and rendering the supposed demand for payment indefinite and illusory since the amounts were also subject to adjustment depending on the date of payment. The Court held that such assessments failed to meet the substantive requirement of a valid assessment under the NIRC because they did not establish a fixed, demandable tax liability payable within a proper prescribed period, and instead merely imposed retrospective and conditional due dates, violating the taxpayer’s right to due process. As a result, both the FLD/FAN and FDDA were declared void, the deficiency tax assessment was cancelled, and the BIR was permanently enjoined from collecting the assessed taxes and compromise penalties. (Eastern Petroleum Corporation v. CIR, CTA Case No. 10342, March 18, 2026)

 ASSESSMENT IS VOID IF THE BIR ignored the taxpayer’s explanation in the PAN; the item of assessment is final if uncontested by the taxpayer. NIRC requires that taxpayers be informed in writing of the facts and law on which an assessment is based. Jurisprudence consistently holds that due process in tax assessments includes not only the taxpayer’s right to be heard but also the BIR’s duty to meaningfully consider and address the taxpayer’s explanations; failure to do so renders the assessment void. In this case, although the taxpayer submitted a detailed Reply to the PAN disputing the use of unverified third-party RELIEF/AITEID data, alleged undeclared purchases and sales, VAT consequences, and disallowed input taxes, the BIR issued the FLD/FAN and FDDA without addressing these defenses and merely reiterated the PAN computations without explanation or evaluation of the taxpayer’s arguments, thereby showing that the Reply to PAN was ignored. Consequently, the Court held that the BIR violated the petitioner’s right to due process, rendering the deficiency tax assessments void and unenforceable insofar as the disputed items were concerned, while allowing examination of uncontested portions. However, the due process infirmity does not extend to the portions of the assessments that were not specifically refuted by the taxpayer in the Reply to PAN. With respect to those items, the Court proceeds to examine their factual and legal validity based on the evidence on record. (Sarcaoga v. CIR, CTA Case No. 10850, March 19, 2026)

TAXPAYER MUST SUBMIT RECEIPTS AND ADEQUATE DOCUMENTATION TO SUPPORT EXPENSES. Deductions from gross income are not allowed unless the taxpayer substantiates such expenses with sufficient evidence such as official receipts or other adequate records, and jurisprudence consistently places the burden on the taxpayer to prove entitlement to deductions once properly disallowed by the BIR. In this case, the BIR disallowed the taxpayer’s claimed purchases on the ground that they were unsupported by official receipts and adequate documentation, and while the taxpayer questioned the basis of the computation, it failed to present competent evidence to substantiate the alleged expenses or refute the BIR’s findings. Thus, applying the rule on burden of proof and the statutory requirement of substantiation, the CTA upheld the disallowance of the unsupported purchases and sustained the resulting deficiency income tax assessment (Sarcaoga v. CIR, CTA Case No. 10850, March 19, 2026)

SEPARATE NOTICE AS TOP WITHHOLDING AGENT (TWA) IS NOT REQUIRED; PUBLICATION ON BIR WEBSITE AND NEWSPAPER IS SUFFICIENT. Certain taxpayers designated as TWA are required to withhold creditable withholding tax at specified rates. Inclusion in the TWA list is effective upon publication in a newspaper of general circulation or posting on the BIR website, which constitutes sufficient notice and triggers the withholding obligation beginning on the first day of the month following publication. In this case, although the taxpayer argues that it was not served a separate written notice of its classification as a TWA, the Court held that such individual notice is not required because publication of the official TWA list in Malaya Business Insight and its availability on the BIR website constituted valid constructive notice, and the petitioner’s obligation to withhold EWT commenced; thus, its failure to withhold the required taxes on purchases of goods and services justified the deficiency EWT assessment. (Sarcaoga v. CIR, CTA Case No. 10850, March 19, 2026)

A TAXPAYER WHO FAILS TO TIMELY AND VALIDLY PROTEST AN FLD/FAN WITHIN 30 DAYS IS BARRED FROM CONTESTING THE ASSESSMENT, ESPECIALLY WHERE ITS PRIOR ACTS AND PARTICIPATION IN THE ASSESSMENT PROCESS ESTABLISH IMPLIED RECEIPT AND AUTHORITY, CAUSING THE ASSESSMENT TO BECOME FINAL, EXECUTORY, AND DEMANDABLE. A taxpayer must file a valid administrative protest within 30 days from receipt of the FLD/FAN; otherwise, the assessment becomes final, executory, and demandable, precluding further inquiry into its merits. In this case, although the taxpayer alleged lack of receipt of the FLD/FAN and questioned the authority of the person who received it, the CTA held that the taxpayer is estopped from denying receipt because it previously recognized and acted on notices served through the same recipient, thereby implying authority under the doctrine of implied authorization. The records further showed that the taxpayer participated in the assessment process through the informal conference and filed a protest without disputing receipt of the FLD/FAN, constituting admission by silence. Moreover, the taxpayer’s acceptance of the FLD/FAN gives rise to a disputable presumption that a complete assessment (including both FLD and FAN) was duly served, which the taxpayer failed to rebut. Having failed to timely and properly protest within the reglementary period, the assessment became final and incontestable, thereby rendering taxpayer liable for the deficiency taxes assessed. (Sirawai Plywood and Lumber Corporation v. Commissioner of Internal Revenue, CTA Case No. 10810, March 31, 2026)

REVENUE ISSUANCES

Revenue Memorandum Circular No. 042-2026

Mandatory Requirement	The Certificate of Entitlement to Tax Incentives (CETI) remains a mandatory attachment to the Annual Income Tax Return (AITR) for RBEs availing of income tax incentives.
Clarifications of Recent Rules	The non-inclusion of the CETI in the illustrative list of attachments in RMC No. 20-2026 does not constitute a waiver or removal of the requirement.
Scope of Application	This applies to all Registered Business Enterprises (RBEs) duly registered with Investment Promotion Agencies (IPAs).
Enforceability	The requirement remains enforceable regardless of whether it is expressly listed in subsequent circulars providing general lists of AITR attachments.

Registered Business Enterprises (RBEs) must continue to attach the Certificate of Entitlement to Tax Incentives (CETI) to their Annual Income Tax Returns (AITR) under the mandates of the CREATE and CREATE MORE Acts.

Mandatory Requirement	The Certificate of Entitlement to Tax Incentives (CETI) remains a mandatory attachment to the Annual Income Tax Return (AITR) for RBEs availing of income tax incentives.
Clarifications of Recent Rules	The non-inclusion of the CETI in the illustrative list of attachments in RMC No. 20-2026 does not constitute a waiver or removal of the requirement.
Scope of Application	This applies to all Registered Business Enterprises (RBEs) duly registered with Investment Promotion Agencies (IPAs).
Enforceability	The requirement remains enforceable regardless of whether it is expressly listed in subsequent circulars providing general lists of AITR attachments.

BIR DEADLINES FROM MAY 18, 2026 TO MAY 24, 2026. A gentle reminder on the following deadlines, as may be applicable:

DATE	FILING/SUBMISSION
May 20, 2026	e-FILING & PAYMENT (Online/Manual) – BIR Form 1600 WP (Remittance Return of Percentage Tax on Winnings and Prizes Withheld by Race Track Operators) – eFPS & Non-eFPS Filers. Month of April 2026

COURT OF TAX APPEALS DECISIONS

THE BIR MUST EXPLAIN THE BASIS FOR STARTING ITS INCOME TAX DEFICIENCY COMPUTATION FROM A ZERO TAXABLE INCOME, DESPITE THE TAXPAYER’S NET LOSS POSITION. Taxpayers must be informed in writing of the legal and factual bases of an assessment; otherwise, the assessment is void for violating due process. In this case, the BIR improperly set the taxpayer’s net taxable income to zero by completely disregarding its declared net operating loss without providing any explanation in the FLD/FAN and FDDA. The Court found that the reported loss was duly supported and constitutes a valid net operating loss. Consequently, the BIR’s unexplained disallowance was invalid, and the taxpayer’s net operating loss must be recognized in computing its 2016 income tax liability (DMCI Holdings, Inc., v. CIR, CTA Case No. 10784, November 4, 2025)

THE BIR CANNOT VALIDLY DISALLOW EXPENSES RELATED TO PASSIVE INCOME. Taxpayers are allowed to deduct from gross income all ordinary and necessary expenses incurred in the conduct of their trade or business, and there is no legal requirement to allocate or apportion such expenses based on the nature or source of income. The Supreme Court also held that common expenses are fully deductible without distinction among income streams. In this case, the BIR disallowed 99% of the reported expenses, by applying an allocation formula that limited allowable deductions to those supposedly attributable to its minimal “active income,” while disallowing expenses linked to “passive income.” The Court found this approach arbitrary and without legal basis, as the law does not mandate such allocation, and the cited authorities were inapplicable, involving different factual contexts such as foreign corporations or tax-exempt income. Moreover, the taxpayer substantiated that its total claimed expenses were properly recorded, reconciled with its audited financial statements, and directly related to its business operations, as confirmed by the ICPA. Consequently, the disallowance of expenses for being “unnecessary” was unsupported by both law and evidence and must be cancelled. (DMCI Holdings, Inc., v. CIR, CTA Case No. 10784, November 4, 2025)

CASH RECEIPTS BOOKS ARE INSUFFICIENT PROOF OF EXEMPTION FROM DST ON ADVANCES. A DST is imposed on specific taxable transactions such as loans, advances, and certain lease agreements; moreover, DST attaches to the instrument and any party to the transaction may pay it, with full payment by one extinguishing the liability of the others. In this case, the Court upheld the DST assessment on the taxpayer’s “advances for future dividends” and “advances from affiliates,” ruling that the cash receipts book presented merely showed a breakdown of cash inflows and was insufficient to prove that the amounts were actually non-taxable dividends receivable rather than taxable advances subject to DST. However, the Court cancelled the DST assessment on “receivables from wholly owned subsidiary,” finding that the same intercompany transaction had already been subjected to and paid for DST. Finally, the taxpayer admitted liability for DST on rent expense, which was accordingly sustained. (DMCI Holdings, Inc., v. CIR, CTA Case No. 10784, November 4, 2025)

TRAVEL EXPENSES AND GOLF MEMBERSHIP FEES ARE SUBJECT TO FBT IF NOT BUSINESS-RELATED. Fringe benefits furnished or granted by an employer to managerial or supervisory employees are subject to FBT, except when they are proven to be necessary business expenses or fall under specifically exempt categories. The burden rests on the taxpayer to substantiate that such expenditures are ordinary and necessary business-related costs. In this case, the BIR assessed the taxpayer for deficiency FBT arising from travel expenses, golf club memberships, and motor vehicle benefits allegedly granted to officers and directors. The Court partially granted the taxpayer’s position on travel expenses, recognizing that a portion incurred by the Managing Director was sufficiently substantiated as business-related participation in an investor event, and thus excluded from FBT. The remaining amount was properly subjected to FBT for lack of adequate proof that the expenses were business-necessary. The Court likewise sustained the FBT assessment on golf membership fees, finding that the taxpayer failed to establish that the club shares and related expenses were used exclusively for business purposes or constituted ordinary and necessary expenses, thereby classifying them as taxable fringe benefits. On the other hand, the FBT assessment on the motor vehicle was cancelled, as the Court found that the correct acquisition cost and computation showed that the taxpayer had properly reported and paid the corresponding tax, rendering the assessment without legal and factual basis. (DMCI Holdings, Inc., v. CIR, CTA Case No. 10784, November 4, 2025)

DIVIDENDS PAID TO A NRFC ARE GENERALLY SUBJECT TO 30% FWT, SUBJECT TO THE TAX-SPARING RULE, WHICH ALLOWS A REDUCED 15% RATE IF THE COUNTRY OF THE RECIPIENT ALLOWS A CREDIT FOR TAXES DEEMED PAID IN THE PHILIPPINES, AND SUBJECT FURTHER TO PREFERENTIAL RATES UNDER APPLICABLE TAX TREATIES OR EXEMPTION FOR QUALIFIED FOREIGN GOVERNMENTS AND CERTAIN FINANCING INSTITUTIONS. In this case, the BIR imposed 30% FWT on the taxpayer’s dividend payments to various foreign entities, alleging failure to sufficiently prove entitlement to exemptions or treaty relief. The Court partly sustained the assessment after reviewing the documentary submissions: (a) entities were recognized as foreign government institutions entitled to exemption; (b) certain were found entitled to 15% preferential treaty rates; and (c) other foreign institutional investors were treated as NRFCs subject to the 30% rate due to lack of sufficient proof of residency, beneficial ownership, or entitlement to tax sparing or treaty relief. (DMCI Holdings, Inc., v. CIR, CTA Case No. 10784, November 4, 2025)

THE ASSESSMENT IS VOID WHEN THE BIR FAILS TO PROPERLY CONSIDER OR ADEQUATELY ADDRESS THE TAXPAYER’S ARGUMENTS IN THE FLD/FAN, OR MERELY ACKNOWLEDGES THEM WITHOUT PROVIDING A CLEAR AND REASONED EXPLANATION. A tax assessment is void if the taxpayer is not properly informed in writing of the factual and legal bases thereof. Jurisprudence further requires the CIR to address the taxpayer’s defenses and evidence; failure to consider or explain the rejection of such arguments constitutes a violation of due process that renders the assessment void. In this case, the BIR failed to meaningfully address petitioner’s protests against the assessment, including its claim that the audit was merely a “table audit” without examination of books, as well as its specific legal and factual defenses on VAT, EWT, FWT, prescription, treaty exemptions, and tax incentives; instead, the either ignored or only partially acknowledged these arguments in the FLD/FAN without explaining their rejection, thereby depriving petitioner of an opportunity to intelligently contest the assessment. Consistent with Avon Case, such failure to consider and explain the rejection of the taxpayer’s evidence and arguments violates due process and invalidates the assessment. Accordingly, the Court cancelled and declared void the deficiency tax assessment (Subic Water & Sewerage Co. Inc. v. CIR, CTA Case No. 10465)

ASSESSMENT IS VOID WHEN THE BIR ISSUED THE FAN/FLD EIGHT DAYS AFTER THE PAN WAS RECEIVED BY THE TAXPAYER. A taxpayers must be given a mandatory 15-day period from receipt of the Preliminary Assessment Notice (PAN) to respond before the issuance of a Formal Letter of Demand/Final Assessment Notice (FLD/FAN), and any violation of this due process requirement renders the assessment void; applying these rules, the taxpayer received the PAN on January 16, 2013 and thus had until January 31, 2013 to reply, yet the BIR issued the FLD/FAN on January 24, 2013, only eight days after receipt and well within the prohibited period, thereby depriving the taxpayer of its right to respond and invalidating the entire assessment regardless of any subsequent protest, leading the Court to declare the deficiency tax assessment null and void and to enjoin its collection (Provident Tree Farms, Inc. v. CIR, CTA Case No. 10459, March 2, 2026)

THE PROPER BASIS FOR APPEALING THE BIR’S ACTION BEFORE THE CTA IS THE WARRANT OF GARNISHMENT, NOT THE LETTERS OR CERTIFICATIONS ISSUED BY BANKS, WHICH ARE MERELY MINISTERIAL IN NATURE AND DO NOT CONSTITUTE APPEALABLE ACTS. Appeals involving disputed assessments or “other matters” (including collection remedies like warrants of garnishment) must be brought within thirty (30) days from the taxpayer’s receipt of the Commissioner’s decision or from the actionable act itself; applying these principles, although the issuance of Warrants of Garnishment (WOGs) constitutes an appealable “other matter” under the CTA’s jurisdiction, the taxpayer failed to properly invoke such jurisdiction by erroneously treating bank-issued letters and certifications – mere ministerial confirmations of garnishment and not acts of the BIR rendered in the exercise of quasi-judicial authority – as the appealable decisions triggering the reglementary period, instead of directly assailing the WOGs or timely obtaining copies thereof from the BIR despite having knowledge of the garnishment, thereby resulting in a failure to file a proper and timely appeal within the period prescribed by law; consequently, the Court is left with no recourse but to dismiss the Petition for Review for lack of jurisdiction without delving into the merits (Feliciano T. Baligod, CTA Case No. 11090, March 2, 2026)

THE PERIOD FOR FILING A MOTION FOR RECONSIDERATION OF THE CTA DIVISION’S DECISION IS COUNTED FROM THE OSG’S RECEIPT OF THE DECISION, NOT FROM THE BIR’S RECEIPT THEREOF. The Office of the Solicitor General (OSG) remains the principal counsel of the government even when it deputizes agency lawyers, such that service of decisions and the reckoning of reglementary periods must be based on the OSG’s receipt, not that of deputized counsel, who merely act under its control and supervision; applying these principles, the BIR’s argument that the prescriptive period should be counted from the BIR legal officers’ receipt of the assailed Decision fails, as the OSG, being the principal counsel, controls the computation of the period to file a Motion for Reconsideration regardless of who actually prepares the pleadings, and any internal arrangement or memorandum delegating such preparation to BIR officers cannot override established procedural rules and jurisprudence, especially where the lack of OSG involvement even contravenes the requirement of its direct supervision, thus rendering petitioner’s Motion for Reconsideration filed out of time when reckoned from the OSG’s receipt and warranting denial of the Petition; accordingly, the Court affirms the ruling that the prescriptive period was correctly computed from the OSG’s receipt. [CIR v. First Telecom Philippines, Inc. CTA EB No. 3140 (CTA Case No. 10688), March 11, 2026]

FAN/FLD WITHOUT DUE DATE RENDERS THE ASSESSMENT VOID; FDDA CANNOT CURE THE DEFECT; DEFECT MAY STILL BE INVOKED EVEN IF RAISED BELATEDLY. A valid deficiency tax assessment must constitute a written notice and demand for payment of a definite tax liability, which becomes demandable only when it contains a specific due date for payment. The Supreme Court also invalidated assessments for failure to indicate due dates in the Formal Letter of Demand/Final Assessment Notice (FLD/FAN), emphasizing that such omission renders the demand incomplete and void; it was further clarified by the Supreme Court that defect in the FLD/FAN cannot be cured by subsequently stating a due date in the Final Decision on Disputed Assessment (FDDA), as both documents serve distinct functions – the FLD/FAN being the operative demand for payment while the FDDA merely resolves the protest; applying these rules, the FLD/FAN failed to state any due date for payment, rendering the assessments void, and although the taxpayer argued that the issue was raised belatedly, the Court properly took cognizance of it since it is directly related to the validity of the assessment and based entirely on evidence already on record, while the BIR’s contention that the defect was cured by inserting due dates in the FDDA was rejected. [CIR v. Grand Union Supermarket, CTA EB No. 2893 (CTA Case No. 10299), March 12, 2026]

A RULING OF THE REGIONAL DIRECTOR ON A REQUEST FOR RECONSIDERATION SUBMITTED TO THE COMMISSIONER IS NOT SUBJECT TO APPEAL BEFORE THE CTA.  The CTA may only take cognizance of appeals involving a “decision, ruling, or inaction” of the Commissioner of Internal Revenue (CIR) or his duly authorized representative in cases involving disputed assessments, and jurisprudence has consistently held that only such final, appealable acts of the CIR or a properly authorized representative may be elevated to the CTA, while acts of subordinate officials without clear delegation of authority are not considered appealable decisions; applying these rules, the taxpayer initially protested the FLD/FAN through an administrative protest and subsequently elevated the matter via a request for reconsideration to the CIR, but instead of a decision from the CIR or a duly authorized representative acting within delegated authority, it was merely Regional Director Tabule who issued the denial letter, despite the taxpayer’s own acknowledgment that only the CIR may resolve such administrative appeals, and no evidence was presented showing that RD Tabule was validly authorized to act for or bind the CIR in deciding the request for reconsideration; thus, RD Tabule’s denial cannot be deemed the final decision contemplated by law that would trigger the CTA’s appellate jurisdiction, as it is a non-appealable act of a subordinate officer lacking authority to render a final ruling on the protest, rendering the petition premature and outside the jurisdiction of the CTA [Bioenergy 8 Corporation v. CIR, CTA EB No. 3004 (CTA Case No. 10260), March 13, 2026)]

AN ASSESSMENT IS VOID WHEN ADDITIONAL EXAMINERS REVIEW THE BOOKS OF ACCOUNTS WITHOUT A NEW OR AMENDED LOA. A Letter of Authority (LOA) is a mandatory prerequisite for a valid tax audit because it confers upon specifically named revenue officers the legal authority to examine a taxpayer’s books, and any audit conducted by officers not expressly covered by a valid LOA – or by officers substituted or added through mere internal memoranda or endorsements without issuance of a new or amended LOA – is void and renders the resulting assessment without legal effect; applying these rules, although the LOA initially authorized Revenue Officers Jan Andre Abellera and Johnro Galicia to examine the taxpayer, the audit was later actually conducted with the participation of Revenue Officers Oradia and Zamora based only on a letter issued by the  Chief purportedly “authorizing” their assistance, without any corresponding new or amended LOA issued by the Commissioner or authorized representative, thereby violating the requirement that only officers named in a valid LOA may conduct or participate in the audit; since these unauthorized officers were actively involved in the examination that led to the issuance of the deficiency tax assessment, the entire audit process was tainted with invalidity, making the resulting assessments void. [CIR v. First Telecom Philippines, Inc. CTA EB No. 3079 (CTA Case No. 10486), March 13, 2026]

REVENUE ISSUANCES

Revenue Memorandum Order No. 037-2026

Qualified taxpayers may electronically file specific income tax returns via the offline eBIRForms system, streamlining compliance with updated filing procedures.

Coverage	Applies to individual taxpayers classified under a specific category (e.g., micro and small taxpayers)
Forms Covered	BIR Forms 1701-MS, 1701, and 1701A
Manner of Filing	1701-MS: Manual or Electronic (Offline eBIRForms); 1701 & 1701A: Electronic via eBIRForms or eFPS
Mode of Payment	Manual: Authorized Agent Banks or Revenue Collection Officers; Online: ePayment gateways or eFPS
Application of Facts	A taxpayer under the covered classification may validly file electronically using the offline system and pay through authorized or online channels, ensuring compliance with updated procedures

Revenue Memorandum Order No. 036-2026

Taxpayers are required to use the updated offline eBIRForms system, applying new forms, tax codes, and extended deadlines to ensure compliant electronic tax filing.

System Update	Release of Offline eBIRForms Package Version 7.9.6.0 with enhanced security and bug fixes
New Form Included	Annual income tax return for micro/small individual taxpayers
Deadline Adjustment	Filing deadline for annual income tax returns extended to May 15 (for applicable year)
Tax Code Updates	Additional Alphanumeric Tax Codes (ATCs) for specific income payments
Other Enhancements	Increased TIN branch code field length and updated tax rates for certain returns
Application to Taxpayer	Taxpayer must adopt the updated system, use revised forms and ATCs, and follow extended deadlines for proper compliance

BIR DEADLINES FROM MAY 4, 2026 TO MAY 10, 2026. A gentle reminder on the following deadlines, as may be applicable:

DATE	FILING/SUBMISSION
May 5, 2026	SUBMISSION – Summary Report of Certification issued by the President of the National Home Mortgage Finance Corporation (NHMFC). Month of April 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 2000 (Monthly Documentary Stamp Tax Declaration/Return). Month of April 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 2000-OT (Documentary Stamp Tax Declaration/Return One-Time Transactions). Month of April 2026
May 8, 2026	SUBMISSION – All Transcript Sheets of Official Register Books (ORBs) used by Dealers/Manufacturers/Toll Manufacturers/Assemblers/Importers of Alcohol Products, Tobacco Products, Petroleum Products, Non-Essential Goods, Sweetened Beverage Products, Mineral Products & Automobiles. Month of April 2026
	e-SUBMISSION – Monthly e-Sales Report for All Taxpayers using CRM/POS and/or Other Similar Business Machines whose last digit of 9-digit TIN is Even Number. Month of April 2026
May 10, 2026	SUBMISSION – List of Buyers of Sugar Together with a Copy of Certificate of Advance Payment of VAT made by each buyer appearing in the List by a Sugar Cooperative. Month of April 2026
	SUBMISSION – Information Return on Releases of Refined Sugar by the Proprietor or Operator of a Sugar Refinery or Mill. Month of April 2026
	e-SUBMISSION – Monthly e-Sales Report for All Taxpayers using CRM/POS and/or Other Similar Business Machines whose last digit of 9-digit TIN is Odd Number. Month of April 2026
	eFILING & PAYMENT/REMITTANCE (Online/Manual) – BIR Form 2200-M Excise Tax Return for the Amount of Excise Taxes Collected from Payment Made to Sellers of Metallic Minerals. Month of April 2026
	eFILING & PAYMENT (Online/Manual) – BIR Forms 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) and/or 0619-E (Monthly Remittance Form of Creditable Income Taxes Withheld-Expanded) and/or 0619-F (Monthly Remittance Form of Final Income Taxes Withheld). Non-eFPS Filers. Month of April 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 2200-C (Excise Tax Return for Cosmetic Procedures) with Monthly Summary of Cosmetic Procedures Performed. Month of April 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 1600-VT (Monthly Remittance Return of Value-Added Tax) and/or 1600-PT (Other Percentage Taxes Withheld) and Monthly Alphalist of Payees (MAP). eFPS & Non-eFPS Filers. Month of April 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 1606 (Withholding Tax Remittance Return for Onerous Transfer of Real Property Other Than Capital Asset Including Taxable and Exempt). Month of April 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 0620 (Monthly Remittance Form of Tax Withheld on the Amount Withdrawn from the Decedent’s Deposit Account) – eFPS & Non-eFPS Filers. Month of April 2026
	e-FILING & e-PAYMENT/REMITTANCE – BIR Form 1600-VT (Monthly Remittance Return of Value-Added Tax) and/or 1600-PT (Other Percentage Taxes Withheld) and BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation). National Government Agencies (NGAs). Month of April 2026

COURT OF TAX APPEALS DECISIONS

IN CWT REFUND, TAXPAYER MUST TRACE IN DETAIL THE INCOME PAYMENT SUBJECT TO CWT TO THE BOOKS; ICPA REPORT IS NOT CONCLUSIVE. A taxpayer claiming a refund or issuance of a tax credit certificate for unutilized creditable withholding taxes (CWTs) must prove that the income payments from which the taxes were withheld were duly declared as part of the taxpayer’s gross income in its Annual Income Tax Return, and that such income can be properly traced and verified through the taxpayer’s books of accounts and supporting records; mere certification or conclusory findings of the Independent Certified Public Accountant (ICPA) are insufficient, as the Court is not bound by the findings of an ICPA and may require corroborative documentary evidence such as general ledgers or itemized revenue records to substantiate the linkage between BIR Form No. 2307 and reported income. In this case, the taxpayer failed to sufficiently demonstrate, through competent and traceable evidence, that the income payments subject of the claimed CWTs were included in its gross income, as the CPA’s report lacked detailed tracing to the general ledger or itemized verification of sales composition, and the Court found no adequate documentary basis to confirm the alleged inclusion in the Annual ITR; thus, the taxpayer failed to discharge its burden of proof, rendering its claim for refund untenable [(Sony Philippines, Incorporated vs. Commissioner of Internal Revenue, CTA Case No. 10917, October 24, 2025; see also Ford Group Philippines, Inc. v. CIR, CTA Case No. 11128, October 1, 2025; see also CIR v. Novabalaja JV Corp, CTA EB No. 2952, CTA Case No. 10287, October 10, 2025)]

IN REFUND OF EXCISE TAX ON IMPORTED JET A-1 FUEL, REFUND MAY BE PARTIALLY DENIED IF THE AUTHORITY TO OPERATE INTERNATIONAL FLIGHTS AND FOREIGN AIR CARRIER’S PERMIT OF INTERNATIONAL CARRIERS IS EXPIRED/ABSENT. A taxpayer may recover excise taxes erroneously or illegally collected, provided it proves among other that the petroleum products were stored in bonded storage, sold to qualified international air carriers duly authorized to operate international flights, and used or consumed outside the Philippines. In this case, the taxpayer successfully established that it directly imported Jet A-1 fuel, paid excise taxes thereon, and subsequently sold the same to international air carriers for use outside the Philippines, supported by importation documents, customs records, withdrawal certificates, et. al.; however, the Court disallowed a portion of the claim corresponding to international carried whose authority to operate international flights had expired and without valid foreign air carrier’s permit. Accordingly, the Court granted a partial refund of excise taxes (Pilipinas Shell Petroleum Corporation vs. Commissioner of Internal Revenue, CTA Case No. 10966, August 12, 2025).

CAPITAL GAINS DERIVED BY A NON-RESIDENT FOREIGN CORPORATION FROM THE SALE OF SHARES OF STOCK IN A DOMESTIC CORPORATION NOT TRADED IN THE STOCK EXCHANGE MAY BE EXEMPT FROM PHILIPPINE TAXATION TO THE EXTENT REQUIRED BY A BINDING INTERNATIONAL TAX TREATY. Here, the claimant, a Netherlands tax resident, established through documentary evidence including a Certificate of Residence issued by the Dutch tax authority and SEC certification of non-registration in the Philippines, that it sold shares of stock in a domestic corporation and paid capital gains tax; however, under Philippines–Netherlands Tax Treaty, gains from the alienation of property other than immovable property, business property of a permanent establishment are taxable only in the state of residence, which in this case is the Netherlands, thereby allocating exclusive taxing rights to the Netherlands and exempting such gains from Philippine capital gains tax. Since the sufficiently proved its treaty residence status and ownership and sale of the shares, and, the Court held that the capital gains tax paid in the Philippines was erroneously collected and must be refunded. Health Products and Services B.V. vs. Commissioner of Internal Revenue, CTA Case No. 10968, July 28, 2025). Dissenting opinion:

PETITION FILED ON THE DATE OF DEADLINE VIA LBC AND RECEIVED BY THE COURT ONLY AFTER 2 DAYS IS DISMISSED FOR FILING OUT OF TIME; SEE DISSENTING OPINION. A petition for review of a denial of a motion for reconsideration must be filed within fifteen (15) days from receipt of the assailed resolution, and initiatory pleadings must be filed personally or by registered mail (or with express court permission via electronic filing), such that filing through an unauthorized mode is treated as filing by ordinary mail and deemed filed only upon actual receipt by the Court. Here, the taxpayer filed the petition the granted extended date or July 24, but the court received it only on July 26 as the petition was filed via LBC courier service. Thus, the petition is considered filed out of time since  the mode of filing is not allowed for initiatory pleadings. The Court further found no compelling reason to relax the rules, especially since the appealed decision had already been correctly resolved at the division level and no injustice or exceptional circumstance was shown to justify liberal construction. Dissenting Opinion: procedural rules are not absolute and may be relaxed in the higher interest of substantial justice, especially where no prejudice is shown and strict application would result in a miscarriage of justice. [(Carmen Copper Corporation v. Commissioner of Internal Revenue, CTA EB No. 2779 (CTA Case No. 10074), October 27, 2025; see also CIR v. Halliburton Worldwide Limited – Philippine Branch, October 14, 2025)]

A LETTER-DENIAL OF REFUND BY THE REVENUE DISTRICT OFFICE IS NOT APPEALABLE TO THE CTA. The CTA has jurisdiction only over decisions or inactions of the Commissioner of Internal Revenue or duly authorized official (such as a Regional Director), and a VAT refund claim may be appealed to the CTA only if there is a proper, appealable denial issued in accordance with the prescribed authority and procedure. In this case, the Court found that the petition was improperly elevated because it was anchored on a BIR letter issued by Revenue District Office (not by the Regional Director), which merely informed petitioner of the denial of its VAT refund claim and was not shown to be an appealable decision of the CIR or a duly authorized approving official; thus, the Petition for Review was dismissed for lack of jurisdiction. [Sankyu-ATS Consortium B v. Commissioner of Internal Revenue, CTA EB No. 2840 (CTA Case No. 10471), July 31, 2025]

ALKYLATE IS NOT SUBJECT TO EXCISE TAX. This is because alkylate is not expressly covered as a taxable product, is not a product of distillation but of alkylation, and cannot be classified under “other similar products of distillation” under the principle of ejusdem generis, applying the rule that taxes must be strictly construed against the government and may not be imposed without clear statutory basis. Applying this doctrine, the Court En Banc ruled that the Commissioner of Internal Revenue’s imposition of excise tax on the importation of alkylate was erroneous and illegal, and that taxpayer was entitled to a refund [(Commissioner of Internal Revenue v. Petron Corporation, CTA EB No. 2894, CTA Case No. 9947, August 1, 2025)]

IN INPUT VAT REFUND CASES, ONLY DECISION OF THE CIR IS APPEALABLE TO THE CTA; “DEEMED DENIED” MECHANISM IS REMOVED UNDER THE TRAIN LAW; SEE DISSENTING OPINION. Statutory construction principles dictate that the deliberate deletion of language is presumed to reflect legislative intent, such that courts must give effect to the removal of the “deemed denied” mechanism previously allowing taxpayers to appeal CIR inaction, and under the doctrine that clear legislative omission cannot be judicially restored, a judicial claim for VAT refund may be filed only within 30 days from receipt of an actual denial and not from the lapse of the 90-day period. Applying this, the Court En Banc held that TRAIN intentionally removed any remedy based on CIR inaction, as shown by both textual amendment and legislative deliberations, leaving taxpayers with only one mode of appeal within 30 days from receipt of the CIR’s decision; thus rendering inaction non-appealable to the CTA. In other words, the taxpayer has no right to appeal to the CTA the inaction of the CIR after 90 days (only partial or full denial may be appealed). Dissenting Opinion: Deemed denial clause remains as the CTA rules expressly grant CTA jurisdiction over CIR inaction; removal of deemed denial provision would lead to absurd result where the taxpayer will be waiting indefinitely for the CIR’s action [Citco International Support Services Limited-Philippine ROHQ v CIR, CTA EB No. 2900 (CTA Case No. 10258), August 7, 2025; see also MD Rio Visa Agri-Ventures, Inc. v. CIR, CTA EB No. 2903, CTA Case No. 1124]

IN CWT REFUND, FAILURE TO SUBMIT ALL LISTED DOCUMENTS IN BIR-LEVEL IS NOT FATAL; CTA MAY CONSIDER ADDITIONAL EVIDENCE. The Court held that non-compliance with documentary requirements of the BIR does not automatically warrant denial of a tax refund claim, as these issuances merely serve as internal guidelines and do not impose mandatory conditions for entitlement; jurisprudence  confirms that failure to submit all listed documents is not fatal, especially absent notice from the BIR, and that cases before the CTA are litigated de novo, allowing consideration of additional evidence; further, CWT certificates constitute prima facie proof of withholding and remittance, and actual remittance need not be proven by the taxpayer since such duty lies with the withholding agent. The Court found that the taxpayer sufficiently substantiated its claim despite alleged documentary deficiencies, as the CIR failed to notify it of any missing documents, and the evidence presented, including financial records and independent CPA tracing, adequately established that the income related to the claimed CWTs was reported in its ITR; moreover, the CWT certificates were deemed sufficient proof of withholding without need to show actual remittance [(CIR v. Panay Power Corporation, CTA EB No. 2911 (CTA Case No. 10499), Decision dated September 30, 2025; see also CIR v. Global Business Power Corporation, CTA EB No. 2965, CTA Case No. 10500, October 10, 2025)]

INCOME PAYMENT TO BSP IS NOT SUBJECT TO WITHHOLDING TAX. Income payments made to the national government and its instrumentalities including government agencies vested with corporate powers but not organized as stock or non-stock corporations are exempt from creditable withholding tax; jurisprudence recognize Bangko Sentral ng Pilipinas (BSP) as a government instrumentality. Applying these principles, the Court En Banc held that is exempt from creditable withholding tax, such that the imposition of surcharge, interest, and compromise penalty for alleged late payment of expanded withholding tax was unwarranted; and even assuming the transaction was taxable, the obligation to withhold rests on the income payor and not BSP as payee. Finding that BSP sufficiently substantiated its refund claim, the Court affirmed the grant of refund [Commissioner of Internal Revenue v. Bangko Sentral ng Pilipinas, CTA EB No. 2944 (CTA Case No. 10278), September 8, 2025]

A WITNESS MUST HAVE PERSONAL KNOWLEDGE OF THE PREPARATION OF DOCUMENTS. The franchise tax paid by the grantee is in lieu of all other taxes, duties, and charges, including import duties and taxes on commissary and catering supplies, provided that (i) the imported articles are used in the grantee’s transport-related operations and (ii) such items are not locally available in reasonable quantity, quality, or price, with the taxpayer bearing the burden of strictly proving compliance as tax exemptions and refunds are construed strictly against the claimant. Applying these principles, the Court En Banc held that petitioner’s claim for refund was anchored on the alleged exemption of imported alcohol and commissary supplies, but it failed to discharge its burden of proving that such items were not locally available because the evidence presented, consisting of price lists from only a limited number of suppliers and a comparative table, was not given probative weight, as the witnesses had no personal knowledge of the preparation of the documents and the actual preparers were not presented, rendering the documents hearsay and incompetent evidence regardless of lack of objection; thus, petitioner failed to establish even a prima facie case that would shift the burden to respondent, and jurisprudence allowing sufficiency of a single price list was distinguished because the controlling issue was not quantity of evidence but its reliability and admissibility. Accordingly, the Court affirmed the denial of the refund [Philippine Airlines, Inc. v. Commissioner of Internal Revenue, CTA EB No. 2949 (CTA Case No. 10730), October 29, 2025]

PAGCOR LICENSEE’S VAT FROM PURCHASES IS NOT REFUNDABLE; VAT ON IMPORTATION IS REFUNDABLE. PAGCOR and its licensees, upon payment of the 5% franchise tax, are exempt from all taxes, direct and indirect, by virtue of the “in lieu of all taxes” clause; the Supreme Court also clarified that input VAT is not creditable when attributable to VAT-exempt transactions, and that only taxes actually erroneously paid by the claimant may be recovered under refund provisions. Applying these rules, the Court held that Melco Resorts Leisure Corporation, as a PAGCOR licensee that paid the required 5% franchise tax, is VAT-exempt, but its operations (casino and hotel gaming-related activities) are not zero-rated or effectively zero-rated sales under the Tax Code, thus, it cannot claim refund of input VAT passed on by its suppliers because such VAT is neither creditable nor refundable. However, the Court distinguished VAT on importations and VAT on services rendered by non-residents, finding that Melco, as the statutory taxpayer directly liable for such VAT, may recover amounts that were erroneously or illegally collected; consequently, only a limited portion of the claimed VAT (those directly paid, validly supported, and timely filed, including certain importation VAT) was refundable, while the bulk of the claimed input VAT on purchases from suppliers was denied. [Melco Resorts Leisure (PHP) Corporation v. Commissioner of Internal Revenue / Commissioner of Internal Revenue v. Melco Resorts Leisure (PHP) Corporation, CTA EB Nos. 2976 & 2980 (CTA Case Nos. 10099 & 10176), October 28, 2025)]

REFUND OF CWT AND DST MUST BE FILED WITHIN 2 YEARS FROM DATE OF PAYMENT, NOT 6 YEARS. Administrative and judicial claims for refund of national internal revenue taxes alleged to have been erroneously, illegally, excessively, or wrongfully collected must be filed within two (2) years from the date of payment; jurisprudence consistently holds that the provision constitutes a special law that prevails over the 6-year prescriptive period of Civil Code on quasi-contracts (solutio indebiti). Applying these doctrines, the Court ruled that petitioner’s claims for refund of CWT, which were paid by a bank and passed on to petitioner in connection with an extrajudicial foreclosure sale later nullified by the RTC, are still governed exclusively by NIRC because at the time of payment the amounts were treated as national internal revenue taxes, making the claims for recovery necessarily tax refund actions subject to the 2-year; thus, petitioner’s argument that the 6-year period under solutio indebiti should apply was rejected, as the Civil Code cannot override the Tax Code. The Court further held that even if petitioner reframed the action as solutio indebiti, the CTA would still lack jurisdiction because it is a court of special and limited jurisdiction confined to tax-related disputes, not ordinary civil actions for recovery of sums of money, and therefore it can only resolve claims clearly falling under tax statutes. Consequently, finding that both administrative and judicial claims were filed beyond the mandatory two-year prescriptive period, the Court affirmed their dismissal as time-barred and without merit [(Lyk Property Holdings, Inc. v. CIR, ), CTA EB No. 2986 (CTA Case No. 10754), September 30, 2025)]

A MOTION FOR RECONSIDERATION OF AN AMENDED DECISION IS A PRE-REQUISITE TO APPEAL TO CTA EN BANC. A Petition for Review before the CTA En Banc must be preceded by a timely Motion for Reconsideration or New Trial filed before the CTA Division that issued the assailed decision, and failure to comply with this mandatory requirement is a jurisdictional defect warranting dismissal; jurisprudence further clarifies that even an Amended Decision must first be subjected to a motion for reconsideration when it substantially modifies the original ruling, such as by re-evaluating evidence or altering the amount of relief granted, since it is treated as a distinct decision. Applying these rules, the Court dismissed the Petition for Review because petitioner directly elevated the CTA Division’s Amended Decision to the En Banc without first filing a Motion for Reconsideration, despite the Amended Decision materially modifying the original ruling by reassessing evidence and increasing the amount of refund awarded, thereby falling squarely within the category of amendatory rulings requiring reconsideration; as a result, the En Banc held that it lacked jurisdiction and affirmed the Amended Decision. [(CIR v. Halliburton Worldwide Limited-Philippine Branch, CTA EB No. 3070, CTA Case No. 10467, September 16, 2025)]

SECURITIES AND EXCHANGE COMMISSION

Under the SEC Notice on the Extension of Temporary Use of the 2020 Form for Filing of General Information Sheet on eFAST, all corporations are authorized to continue using the 2020 GIS Form until 15 May 2026, particularly those still completing access or registration requirements in the SEC online systems. 

BUREAU OF INTERNAL REVENUE

BIR DEADLINES FROM APRIL 25, 2026 TO MAY 3, 2026. A gentle reminder on the following deadlines, as may be applicable:

DATE	FILING/SUBMISSION
April 25, 2026	SUBMISSION – Quarterly Summary List of Sales/Purchases/Importations by a VAT Registered Taxpayers – Non-eFPS Filers. For the Quarter ending March 31, 2026
	SUBMISSION – Sworn Statement of Manufacturer’s or Importer’s Volume of Sales of each particular Brand of Alcohol Products, Tobacco Products and Sweetened Beverage Products. For the Quarter ending March 31, 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 2550Q (Quarterly Value-Added Tax Return) – eFPS & Non-eFPS Filers. For the Quarter ending March 31, 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 2551Q (Quarterly Percentage Tax Return) – eFPS & Non-eFPS Filers. For the Quarter ending March 31, 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 2550-DS (Value-Added Tax (VAT) Return for Nonresident Digital Service Provider) – For the Quarter ending March 31, 2026
April 29, 2026	e-FILING & PAYMENT (Online/Manual) – BIR Form 1702Q (Quarterly Income Tax Return For Corporations, Partnerships and Other Non-Individual Taxpayers) and Summary Alphalist of Withholding Taxes (SAWT). Fiscal Quarter ending February 28, 2026
April 30, 2026	SUBMISSION – Attachments to e-Filed BIR Forms 1700, 1701, 1701-MS and 1701A. Calendar Year 2025
	SUBMISSION – Proof of eFiled BIR Form 1702 – RT/EX/MX with Audited Financial Statements (AFS), 1709 (if applicable), and Other Attachments through Electronic Audited Financial Statements (eAFS) or Manually. Calendar Year 2025
	SUBMISSION – Soft copies of Inventory List and Schedules stored and saved in DVD-R/USB properly labeled together with Notarized Sworn Declaration. Fiscal Year ending March 31, 2026
	e-SUBMISSION – Quarterly Summary List of Sales/Purchases/Importations by a VAT Registered Taxpayers – eFPS Filers. For the Quarter ending March 31, 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 1601-EQ (Quarterly Remittance Return of Creditable Income Taxes Withheld-Expanded) and Quarterly Alphalist of Payees (QAP) – eFPS & Non-eFPS Filers. For the Quarter ending March 31, 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 1601-FQ (Quarterly Remittance Return of Final Income Taxes Withheld) and Quarterly Alphalist of Payees (QAP) – eFPS & Non-eFPS Filers. For the Quarter ending March 31, 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 1602Q (Quarterly Remittance Return of Final Taxes Withheld on Interest Paid on Deposits and Yield on Deposit Substitutes/Trusts/Etc.) – eFPS & Non-eFPS Filers. For the Quarter ending March 31, 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 1603Q (Quarterly Remittance Return of Final Income Taxes Withheld on Fringe Benefits Paid to Employees Other Than Rank and File) – eFPS & Non-eFPS Filers. For the Quarter ending March 31, 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 1621 (Quarterly Remittance Return of Tax Withheld on the Amount Withdrawn from Decedent’s Deposit Account) – eFPS & Non-eFPS Filers. For the Quarter ending March 31, 2026
	ONLINE REGISTRATION (thru ORUS) – Computerized Books of Accounts and Other Accounting Records. Fiscal Year ending March 31, 2026
May 1, 2026	SUBMISSION – Consolidated Returns of All Transactions based on the Reconciled Data of the Stockbrokers. April 16–30, 2026
	SUBMISSION – Engagement Letters and Renewals or Subsequent Agreements for Financial Audit by Independent CPAs. Fiscal Year beginning July 1, 2026

AITR AND AFS FILING DEADLINES EXTENDED TO MAY 15, 2026 (BIR) AND 15 JUNE 2026 (SEC)

Dear CLIENTS, COLLEAGUES and FRIENDS: 

We would like to inform you of recent developments regarding the filing deadlines for the 2025 Annual Income Tax Returns (AITR) and Annual Financial Statements (AFS). Don’t miss our  OTHER UPDATES. 

Revenue Memorandum Circular No. 30-2026

In response to Executive Order No. 110, s. 2026, which declared a State of National Energy Emergency, an extension has been granted for annual tax compliance. To provide relief during the ongoing energy crisis and rising oil prices, the deadline for taxpayers to file their 2025 Annual Income Tax Returns, settle due taxes, and submit all necessary attachments has been extended from April 15, 2026, to May 15, 2026. No penalties will be imposed for filings and payments made within this new deadline.

Extended Deadline	The official deadline is moved from April 15, 2026 to May 15, 2026.
Filing & Payment	Taxpayers are permitted to file and pay manually at the nearest Authorized Agent Banks (AABs), regardless of the specific jurisdiction of their assigned Revenue District Office (RDO). Taxpayers are encouraged to utilize available Bureau of Internal Revenue (BIR) electronic filing and payment platforms to settle their dues.

Securities and Exchange Commission (Notice dated April 14, 2026)

The SEC has extended the filing deadlines for the 2025 AFS and related reportorial requirements.

This extension follows the issuance by the BIR of Revenue Memorandum Circular No. 30-2026, which moved the deadline for filing the 2025 AITR  and its attachments to 15 May 2026.

Covered Entities	New Deadline
All domestic and foreign corporations (AFS)	15 June 2026
Brokers and dealers – SEC Form 52-AR (with AFS)	15 May 2026
Listed issuers, public companies, and other covered entities under the SRC – Annual Reports (SEC Form 17-A with AFS)	15 May 2026

The extension applies to corporations with fiscal year ending 31 December 2025.

All AFS submitted to the SEC must also be filed with and received by the BIR in accordance with existing regulations.

Should, you require assistance with compliance, filing, or coordination with auditors, please feel free to reach out to us.

Best regards,

Dumlao & Co.

COURT OF TAX APPEALS DECISIONS

THE COURT OF TAX APPEALS (CTA) HAS JURISDICTION ONLY OVER DECISIONS OF THE COMMISSIONER OF CUSTOMS (COC), NOT OVER THE LATTER’S INACTION. In this case, petitioner’s claim was based on the alleged inaction of the COC on its protest, which is not appealable to the CTA; moreover, the protest itself was not shown to have been filed in proper form (it failed to specify the ruling protested and lacked proof of payment of protest fees), and no subsequent motion for reconsideration or appealable decision by the COC was established. Consequently, absent a valid appealable decision and compliance with procedural requirements, the CTA had no jurisdiction over the subject matter and was constrained to dismiss the petition. (L.T.J.S. Store, represented by Antonio De Jesus Silva vs. District Collector of Customs, et al., CTA Case No. 10582)

CHANGING THE INVOICE HEADER FROM “CHARGE INVOICE” TO “COMMERCIAL INVOICE” WITHOUT SECURING A NEW PERMIT TO USE COMPUTERIZED ACCOUNTING SYSTEM IS A MERE NOMINAL CHANGE AND DOES NOT CONSTITUTE SYSTEM ENHANCEMENT. A VAT-registered taxpayer claiming zero-rated export sales must substantiate its claim through duly registered VAT invoices containing all required information (including the notation “zero-rated sale”) and proof of actual exportation, such as bills of lading or airway bills; moreover, such invoices must be issued pursuant to a duly authorized system. In this case, although the BIR disallowed the claim on the ground that the taxpayer altered its invoice header from “Charge Invoice” to “Commercial Invoice” without securing a new permit to use CAS, the Court held that the change was merely nominal and did not constitute a “system enhancement” since it neither added value to nor modified the system’s functionality, nor did it result in any change in system release or version number; thus, the existing permit remained valid and the commercial invoices retained their probative value. (MD Isalon Organic Banana Agri-Ventures, Inc. v. CIR, CTA Case No. 10623, July 2, 2025)

SUPPLEMENTARY COMMERCIAL INVOICE GENERATED BY COMPUTERIZED ACCOUNTING SYSTEM IS NOT SUFFICIENT BASIS FOR ZERO-RATING. VAT zero-rating applies only to sales by VAT-registered persons involving the actual shipment of goods from the Philippines to a foreign country, paid in acceptable foreign currency and properly accounted for under Bangko Sentral ng Pilipinas rules, with the sale evidenced by VAT sales invoices and bills of lading or airway bills, and the invoices must be duly registered with the BIR. In this case, the taxpayer issued only Commercial Invoices instead of Charge or VAT Sales Invoices as required under its BIR-authorized Computerized Accounting System (CAS) permit. The Commercial Invoices were merely supplementary documents and outside the approved serial range of its permit to use CAS, and thus could not serve as principal evidence of zero-rated sales. As a result, the taxpayer failed to establish the essential element for zero-rating – that the issuance of valid VAT sales invoices showing actual export sales – and consequently could not substantiate its zero-rated sales. Accordingly, the Court denied the Petition for Review for lack of merit. (MD Davao Agri-Ventures, Inc., v. CIR, CTA Case No. 10625)

AMOUNTS IN THE CERTIFICATE OF INWARD REMITTANCE MUST BE SPECIFICALLY IDENTIFIED, ITEMIZED, OR TRACEABLE TO THE CLAIMED ZERO-RATED EXPORT SALES. A valid zero-rated export sale requires that proceeds be paid in acceptable foreign currency and duly accounted for in accordance with BSP rules. In this case, although the taxpayer submitted bank certifications of inward remittances, the Court found that such documents merely reflected lump-sum remittances without sufficient linkage to specific zero-rated sales transactions, and neither the schedules nor the ICPA Report identified corresponding remittance references or provided a breakdown tracing the payments to the claimed export sales; even attempts to reconcile the reported figures showed discrepancies. Consequently, in the absence of clear, itemized, and traceable proof that the alleged export sales proceeds were received in foreign currency and properly accounted for under BSP rules, petitioner failed to establish compliance with this essential requirement, warranting the denial of its VAT refund claim. (MD Isalon Organic Banana Agri-Ventures, Inc. v. CIR, CTA Case No. 10623, July 2, 2025)

IMPORTATION OF PRESCRIPTION DRUGS AND MEDICINES FOR DIABETES AND HYPERTENSION BEGINNING JANUARY 1, 2020 IS VAT-EXEMPT; VAT MUST NOT BE CLAIMED AS CREDIT IN THE VAT RETURNS. Requisites (1) the medicines are covered by the DOH-FDA approved list; (2) importation occurred within the covered period; (3) the products are qualifying prescription drugs; and (4) the VAT paid was not claimed as input tax credit in VAT returns. In this case, the taxpayer failed to prove compliance with the fourth requirement, as the records showed that the VAT paid was reported in its VAT returns, and significant discrepancies and unreconciled differences between the VAT returns and the ICPA’s findings prevented the Court from determining whether the same amount had already been excluded from input tax credits, raising the possibility of double recovery. Consequently, due to the taxpayer’s failure to clearly establish that the erroneously paid VAT was not utilized as input tax credit, its claim for refund must be denied for lack of sufficient substantiation. (Novartis Healthcare Philippines, Inc. v. CIR, CTA Case No. 10773; see also Astrazeneca Pharmaceuticals (Philippines) Inc., v CIR, CTA Case No. 10725, August 20, 2025)

IN ZERO-RATED SALES, NATURE OF SERVICES MUST BE INDICATED; “INWARD” AS DESCRIPTION IS NOT SUFFICIENT.  Services performed in the Philippines by VAT-registered persons for non-resident foreign corporations (NRFCs) or non-resident clients doing business outside the Philippines, paid in acceptable foreign currency and properly accounted for under Bangko Sentral ng Pilipinas (BSP) rules, are subject to zero-percent (0%) VAT, provided the taxpayer strictly complies with all invoicing and substantiation requirements, including issuance of VAT official receipts that clearly indicate the nature of the services rendered. Here, although the taxpayer presented bank certifications and credit advices showing remittances, the VAT official receipts failed to indicate the nature of services rendered, listing only “INWARD” payments, which was insufficient to meet legal standards. As compliance with invoicing and substantiation requirements is mandatory and strictly construed in tax exemption claims, the taxpayer failed to establish entitlement to zero-rating or refund of input taxes for the period claimed. Accordingly, the Petition for Review was denied. (Ibex Global Solutions (Philippines) Inc., v. CIR, CTA Case No. 11005)

SALE TO BOI-REGISTERED ENTITY MUST BE SUPPORTED BY BOI CERTIFICATION; INVOICE ME BE MARKED “ZERO-RATED”. Zero-rated sales by VAT-registered persons are allowed only if specific statutory and regulatory conditions are strictly complied with, including that the sales are made to BOI-registered exporters whose products are 100% exported, supported by a valid BOI certification, and that each sale is covered by a duly registered VAT invoice clearly indicating the term “zero-rated sale.” In this case, the taxpayer failed to establish that its sales qualified as zero-rated or effectively zero-rated because it did not present BOI certifications for its customers, nor did it issue VAT invoices properly marked as “zero-rated,” with the invoices instead showing the amounts as “VATable Sales.” (Monarch Agricultural Products, Inc. v. CIR, CTA Case No. 10376)

REVENUE ISSUANCES

Revenue Memorandum Circular No. 24-2026

Cross-border services are taxable in the Philippines only when the source of income—determined by where the service is performed, completed, or where the benefit is received—is within the country.

Purpose	Clarifies taxation of cross-border services
General Rule	Not all cross-border services are taxable
Source of Income	Taxable only if source is within the Philippines
Determination of Source	Based on income-producing activity, service completion, or benefit received
Assessment Approach	Holistic evaluation of the entire transaction
Basis for Taxability	Service delivered, completed, or utilized in PH
Burden of Proof	Taxpayer must prove income is from outside PH
Proof/Documents	Contracts, sworn statements, tax residency, proof of payment

Revenue Memorandum Circular No. 20-2026

Pursuant to the Ease of Paying Taxes framework, AITRs must be filed electronically, and for offline eBIRForms users, a screenshot of the submission confirmation serves as valid proof of filing when email confirmation is delayed; thus, taxpayers must retain this screenshot as evidence of compliance.

Legal Basis	The Circular implements the Ease of Paying Taxes framework requiring electronic filing of AITR through BIR platforms.
Filing Requirement	Taxpayers must file AITR electronically, with non-eFPS users utilizing the offline eBIRForms package.
Proof of Filing (eBIRForms)	A screenshot of the system-generated pop-up confirming successful submission serves as proof of filing, especially if email confirmation is delayed.
Practical Application	Taxpayers using offline eBIRForms should capture and retain the screenshot as evidence when filing and paying taxes.

BIR DEADLINES FROM APRIL 06, 2026 TO APRIL 19, 2026. A gentle reminder on the following deadlines, as may be applicable:

DATE	FILING/SUBMISSION
April 08, 2026	SUBMISSION – All Transcript Sheets of Official Register Books (ORBs) used by Dealers/Manufacturers/Toll Manufacturers/Assemblers/Importers of Alcohol Products, Tobacco Products, Petroleum Products, Non-Essential Goods, Sweetened Beverage Products, Mineral Products & Automobiles. Month of March 2026
	e-SUBMISSION – Monthly e-Sales Report for All Taxpayers using CRM/POS and/or Other Similar Business Machines whose last digit of 9-digit TIN is Even Number. Month of March 2026
April 10, 2026	SUBMISSION – List of Buyers of Sugar Together with a Copy of Certificate of Advance Payment of VAT made by each buyer appearing in the List by a Sugar Cooperative. Month of March 2026
	SUBMISSION – Information Return on Releases of Refined Sugar by the Proprietor or Operator of a Sugar Refinery or Mill. Month of March 2026
	e-SUBMISSION – Monthly e-Sales Report for All Taxpayers using CRM/POS and/or Other Similar Business Machines whose last digit of 9-digit TIN is Odd Number. Month of March 2026
	e-FILING & PAYMENT/REMITTANCE (Online/Manual) – BIR Form 2200-M Excise Tax Return for the Amount of Excise Taxes Collected from Payment Made to Sellers of Metallic Minerals. Month of March 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) – Non-eFPS Filers. Month of March 2026 BIR Form 2200-C (Excise Tax Return for Cosmetic Procedures) with Monthly Summary of Cosmetic Procedures Performed. Month of March 2026 BIR Form 1600-VT (Monthly Remittance Return of Value-Added Tax) and or 1600-PT (Other Percentage Taxes Withheld) and Monthly Alphalist of Payees (MAP) – eFPS & Non-eFPS Filers. Month of March 2026 BIR Form 1606 – (Withholding Tax Remittance Return for Onerous Transfer of Real Property Other Than Capital Asset Including Taxable and Exempt). Month of March 2026
	e-FILING & PAYMENT/REMITTANCE – BIR Form 1600-VT (Monthly Remittance Return of Value-Added Tax) and/or 1600-PT (Other Percentage Taxes Withheld) and BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) – National Government Agencies (NGAs). Month of March 2026
April 11, 2026	e-FILING – BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) – eFPS Filers under Group E. Month of March 2026
April 12, 2026	e-FILING – BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) – eFPS Filers under Group D. Month of March 2026
April 13, 2026	e-FILING – BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) – eFPS Filers under Group C. Month of March 2026
April 14, 2026	e-FILING – BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) – eFPS Filers under Group B. Month of March 2026
April 15, 2026	REGISTRATION (Online Thru ORUS or Manual) – Permanently Bound Loose-Leaf Books of Accounts/Invoices and Other Accounting Records. Fiscal Year ending March 31, 2026
	SUBMISSION – Updated Master List of newly registered taxpayers & taxpayers whose business permits were renewed from LGUs thru its Local Treasurer. Calendar Year ending December 31, 2025 and 2026 Renewals
	SUBMISSION – Master List of Retired Businesses from LGU thru its Local Treasurer. Calendar Year ending December 31, 2025
	SUBMISSION – List of Medical Practitioners. For the Quarter ending March 31, 2026
	SUBMISSION – Quarterly List (with Monthly Breakdown) of Contractors of Gov’t. Contracts entered into by the Provinces/Cities/Municipalities/Barangays. For the Quarter ending March 31, 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 1702 – RT/1702-EX/1702-MX. Calendar Year ending December 31, 2025
	e-FILING & PAYMENT (Online/Manual) – BIR Form 1707-A (Annual Capital Gains Tax Return For Onerous Transfer of Shares of Stock Not Traded Through the Local Stock Exchange) – by Individual & Corporate Taxpayers. Calendar Year ending December 31, 2025
	e-FILING & PAYMENT (Online/Manual) – BIR Form 2200-M (Excise Tax Return for Mineral Products). For the Quarter ending March 31, 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Forms 1700, 1701, 1701-MS & 1701A – Calendar Year ending December 31, 2025
	e-FILING & e-PAYMENT – BIR Form 1601-C – eFPS Filers under Group A. Month of March 2026
	e-PAYMENT – BIR Form 1601-C – eFPS Filers under Group E, D, C & B. Month of March 2026
April 16, 2026	SUBMISSION – Consolidated Return of All Transactions based on the Reconciled Data of Stockbrokers. April 1-15, 2026
April 20, 2026	SUBMISSION – Quarterly Information on OCWs or OFWs Remittances Exempt from DST furnished by the Local Banks & Non-Bank Money Transfer Agents. For the Quarter ending March 31, 2026
	SUBMISSION – Quarterly Report of Printer. For the Quarter ending March 31, 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 1600 WP (Remittance Return of Percentage Tax on Winnings and Prizes Withheld by Race Track Operators) – eFPS & Non-eFPS Filers. Month of March 2026
April 25, 2026	SUBMISSION – Quarterly Summary List of Sales/Purchases/Importations by a VAT Registered Taxpayers – Non-eFPS Filers. For the Quarter ending March 31, 2026
	SUBMISSION – Sworn Statement of Manufacturer’s or Importer’s Volume of Sales of each particular Brand of Alcohol Products, Tobacco Products and Sweetened Beverage Products. For the Quarter ending March 31, 2026

COURT OF TAX APPEALS DECISIONS

TAX ORDER PAYMENTS (TOP) ARE NOT CONSIDERED ASSESSMENT UNDER SECTION 195 OF THE LOCAL GOVERNMENT CODE IF THEY FAIL TO SPECIFY SURCHARGE, INTEREST, PENALTY AND BASIS FOR THE ASSESSMENT; PAYMENT INCLUDING REFUND WITHIN 2 YEARS UNDER SECTION 196 IS A VALID REMEDY. In questioning local business taxes, the applicable remedy hinges on the existence of a valid assessment: Section 195 governs protests against assessments that must state the nature of the tax, deficiency amount, and applicable surcharges, interests, and penalties, and must be protested within 60 days; while Section 196 applies where taxes are erroneously or illegally collected, even without a prior assessment, provided a written claim is filed within two years from payment. A valid assessment must sufficiently inform the taxpayer of both the factual and legal bases to enable an intelligent protest. Applying these principles, the Court found that the 2022 and TOPs, although indicating the nature and amount of taxes, failed to specify any deficiency assessment, surcharges, interest, penalties, and the factual and legal bases, thus not constituting valid notices of assessment under Section 195. Consequently, the taxpayer correctly availed of Section 196, having paid the local business taxes; it then timely filed its administrative claim for refund, both within the two-year prescriptive period reckoned from such earliest payment. Accordingly, the Court held that the trial court erred in dismissing the case for failure to protest under Section 195 and remanded the case for further proceedings to determine, based on evidence, whether the petitioner is entitled to a refund or tax credit of the alleged excess local business taxes paid. [Team (Philippines) Energy Corporation v. The Municipality Pagbilao, Quezon, et. al., CTA AC No. 331, August 11, 2025]

BANGKO SENTRAL NG PILIPINAS (BSP) IS EXEMPT FROM DOCUMENTARY STAMP TAX (DST) ON ACQUISITION OF FORECLOSED PROPERTY. DST is imposed on deeds, conveyances, donations, or other instruments transferring real property, calculated based on the consideration or fair market value, but all contracts, deeds, documents and transactions related to the conduct of business of the BSP are exempt. In this case, BSP extended an emergency loan to the Rural Bank of San Miguel, which was secured by a real estate mortgage. Upon the borrower’s default, the mortgaged properties were foreclosed, and BSP, as the highest bidder, acquired the property. BSP paid the capital gains tax on the foreclosure sale, but the BIR assessed additional DST. BSP paid this DST under protest, asserting that as a government financial institution acting within its statutory mandate to grant loans and acquire foreclosed properties, it is exempt from DST. The Court agreed that the acquisition of foreclosed properties forms part of BSP’s business operations and that the DST assessment was therefore erroneous. Accordingly, the Court ordered the BIR to refund or issue a tax credit certificate representing the erroneously paid DST on the foreclosure transaction. (Bangko Sentral ng Pilipinas v. CIR, CTA Case No. 10106, September 1, 2025; Bangko Sentral ng Pilipinas v. CIR, CTA Case No. 11147, September 29, 2025)

IN ZERO-RATED SALES TO ECOZONES, GOODS AND SERVICES MUST ACTUALLY BE CONSUMED OR RENDERED WITHIN THE ECOZONE, AND THE PLACE OF TRANSACTION MUST BE INDICATED. Zero-rated VAT applies to export sales by VAT-registered persons and to services rendered to entities whose exemption under special laws effectively subjects such services to zero percent VAT. Special laws establish ECOZONES as separate customs territory, allowing sales from the Philippine customs territory to PEZA-registered entities within ECOZONES to be treated as exports for VAT purposes. In the case of Sankyu-Ats Consortium-B, while it is VAT-registered and sold exclusively to a PEZA-registered entity, it failed to establish that the goods and services were actually consumed or rendered within the ECOZONE, a critical element for zero-rating under the Cross-Border Doctrine and Destination Principle. Documents did not indicate the locus of transactions, nor were purchase orders or contracts provided to substantiate consumption within the ECOZONE. Consequently, petitioner did not satisfy the essential requisites for zero-rated sales, and its claim for refund of input taxes was denied. (Sankyu-Ats Consortium-B v. CIR, CTA Case No. 10676, September 2, 2025)  

ZERO-PERCENT VAT APPLIES TO SERVICES RENDERED BY VAT-REGISTERED PERSONS TO RENEWABLE ENERGY (RE) DEVELOPERS IF TWO CONDITIONS ARE MET: (1) THE RE DEVELOPER IS DULY REGISTERED WITH BOTH THE DEPARTMENT OF ENERGY (DOE) AND THE BOARD OF INVESTMENTS (BOI), AND (2) THE SERVICES OR LOCAL PURCHASES ARE NECESSARY FOR THE DEVELOPMENT, CONSTRUCTION, AND INSTALLATION OF PLANT FACILITIES OR FOR THE WHOLE PROCESS OF EXPLORATION AND DEVELOPMENT OF RENEWABLE ENERGY SOURCES UP TO CONVERSION INTO POWER. In this case, Air Drilling Associates Pte Ltd., claimed input VAT refund for excess or unutilized VAT arising from services allegedly rendered to EDC and PGPC. The Court denied the refund because Air Drilling failed to prove PGPC’s BOI registration and that not all EDC projects were BOI-registered. Moreover, Air Drilling failed to present admissible evidence that services were actually rendered during the claim period: the original contract had expired in 2017, and the submitted amended contract extending the term to December 31, 2019, was disallowed; and the billing invoices and VAT official receipts were insufficient to establish that services were performed in connection with RE development during the relevant period. (Air Drilling Associates Pte Ltd., v. CIR, CTA Case No. 10752, August 13, 2025).

IN INPUT VAT REFUND CASES FILED WITH THE REVENUE DISTRICT OFFICE (RDO), ONLY THE DECISION OF THE REGIONAL DIRECTOR, NOT THE RDO, IS APPEALABLE TO THE CTA. The Court of Tax Appeals (CTA) has exclusive appellate jurisdiction to review decisions, rulings, or inactions of the Commissioner of Internal Revenue (CIR) or duly authorized officials, and such appeal must be filed within 30 days from receipt of the decision. Revenue issuances clarify that for VAT refund claims filed with a Revenue District Office (RDO), the Regional Director or higher authorized official has the authority to approve or deny the claim, and only the decision of such official is appealable to the CTA. In this case, Sankyu-ATS Consortium-B filed a VAT refund claim, which was denied by Revenue District Officer. Since the RDO officer lacks authority to issue an appealable denial, the CTA has no jurisdiction to entertain the petition, and the proper appealable decision would have been that of the Regional Director. Accordingly, the petition was dismissed on jurisdictional grounds (Sankyu-Ats Consortium-B v. CIR, CTA Case No. 10768, July 11, 2025)

IN CLAIMS FOR INPUT VAT REFUND INVOLVING OFFSETTING, THERE MUST BE A CLEAR AGREEMENT EXPRESSLY ALLOWING ADVANCES TO BE OFFSET AGAINST RECEIVABLES, WITH SPECIFIC DETAILS OF THE ACTUAL OFFSETTING UNDERTAKEN. Services performed in the Philippines by a VAT-registered person for a foreign corporation or a non-resident person outside the Philippines are subject to zero percent (0%) VAT, provided, among others, the consideration is paid in acceptable foreign currency and duly accounted for in accordance with Bangko Sentral ng Pilipinas (BSP) rules. Pursuant to the BIR rules, an offsetting arrangement where receivable from services is offset against advances is allowed as alternative document. In this case, while the taxpayer submitted the Short-Term Credit Facility Agreement (STCFA) and related documents showing loan transactions in foreign currency, these documents failed to prove that such advances could be validly offset against receivables from services provided to other affiliates. The STCFA governs loans, not inter-affiliate offsets, and no separate agreement establishing such offsets between taxpayer and other affiliates was presented. The Schedule of Offsetting of Receivables also did not detail actual offsets corresponding to specific service invoices, showing only movements in the group account balance, which the Court deemed insufficient to establish that the loans served as payments for services. (Avaloq Philippines Operating Headquarters v. CIR,  CTA Case No. 10922, August 29, 2025)

ROYALTY TAXES TWICE PAID CAN BE REFUNDED. A taxpayer is entitled to a refund or tax credit if it can establish that it erroneously paid a tax Taxpayer further established that it erroneously paid both Withholding Value-Added Tax (WVAT) and Final Withholding Tax (FWT) on its 2020 sales. These sales were subjected to a 25% royalty under a first agreement and simultaneously to a 20% royalty the second agreement, resulting in double payment of taxes. Evidence supporting the claim included the Schedule of Net Sales, audited financial statements, the schedule of royalties reported, and permits. Witnesses testified that the double-counting of royalties was unintentional and was discovered, upon which the 20% royalty expense and related taxes were reversed in the books. The Court recognized that the WVAT and FWT corresponding to the 20% royalties were indeed erroneously paid, as the basis for taxation no longer existed due to the reversal and refund of the royalties. Accordingly, the Court ordered the BIR to refund the erroneously paid WVAT and FWT. (Syngena Philippines, Inc., v. CIR, CTA Case No. 11067, August 27, 2025)

IN AN INPUT VAT REFUND CASE, A TAXPAYER’S PETITION FILED WITH THE CTA PRIOR TO THE RECEIPT OF THE CIR’S DECISION OR BEFORE THE LAPSE OF THE PERIOD FOR INACTION IS DISMISSIBLE. The Court of Tax Appeals (CTA) has exclusive appellate jurisdiction to review decisions, rulings, or inactions of the CIR in cases involving disputed assessments, tax refunds, fees, or other matters under the National Internal Revenue Code (NIRC), and an appeal must be filed within 30 days from receipt of the decision or after the expiration of the period fixed by law for action, with inaction being considered a “deemed denial.” The CIR has 90 days from receipt of a complete administrative claim for VAT refund or tax credit to act on the claim, after which inaction is deemed a denial and appealable to the CTA. Here,  the taxpayer filed its administrative claim for VAT refund on July 30, 2020, well within the two-year prescriptive period from the issuance of its tax clearance, giving the BIR until October 28, 2020, to act. However, taxpayer prematurely filed the judicial Petition for Review on August 3, 2020, before the expiration of the 90-day period and before receipt of the BIR’s denial on October 30, 2020, meaning neither was there a decision nor a deemed denial to appeal. Thus, the petition was properly dismissed for lack of jurisdiction. (British American Tobacco (Philippines), Limited v. CIR, CTA Case o. 10322, July 31, 2025)

REVENUE ISSUANCES

Revenue Memorandum Circular No. 21-2026

Tax exemptions previously granted to a former foreign assistance agency are officially extended to the newly established foreign assistance section of the diplomatic mission. 

Purpose	Transfer the tax privileges and exemptions previously granted to the former foreign assistance agency (USAID) to the newly established Foreign Assistance Section of the U.S. Embassy (US-FAS).
Entity Transition	Effective July 1, 2025, the US-FAS replaced USAID as the recognized special technical and economic mission in the Philippines. Consequently, all references to “USAID” in prior guidelines are replaced with “US-FAS”.
Tax Privileges	US-FAS and its agents keep the same VAT zero-rating and tax exemptions that USAID had.
Terminology Update	The terms “receipt” and “official receipt” are deleted from the guidelines, leaving only the term “invoice”.
Transitory VAT Rules	VAT-registered taxpayers must continue to apply a zero-percent (0%) VAT rate and honor existing VAT Exemption Certificates (VECs) issued to USAID for 30 days following the issuance of this Circular.
Surrender of VECs	The US-FAS has 30 days to surrender old VECs for ongoing projects to the International Tax Affairs Division (ITAD). VECs not returned within this period will be automatically revoked and rendered ineffective.

Revenue Regulations No. 2-2026

Eligible participants and generation facilities can avail of VAT exemptions and other tax incentives for the trade and utilization of indigenous natural gas. 

VAT Exemption	The purchase and sale of indigenous natural gas, aggregated gas, and power generated from these gases are exempt from Value-Added Tax (VAT). For aggregated gas, the exemption applies only to the portion attributed to indigenous natural gas.
Incentives	Philippine Downstream Natural Gas Industry (PDNGI) Facilities certified by the Department of Energy (DOE) can avail of tax incentives under Title XIII of the Tax Code, provided they are registered with the Board of Investments (BOI) and included in the Strategic Investment Priority Plan (SIPP).
Documentary Requirements (Participants)	To claim VAT exemption, participants must attach a DOE-OIMB endorsement, a certification of the volume/percentage of indigenous natural gas sold, and a Certified True Copy of the DOE Permit to their Quarterly VAT Declaration (BIR Form No. 2550Q).
Documentary Requirements (Generation Facilities)	Generation facilities must attach a DOE-EPIMB endorsement confirming the use of indigenous natural gas, a certification of the power produced from it, and a Certified True Copy of the DOE Permit to their Quarterly VAT Declaration.
Tax Form Declaration	Taxpayers must explicitly state the legal basis for the VAT exemption (Section 38 of R.A. No. 12120) on Field Item Number 14A of the Quarterly VAT Declaration.

BIR DEADLINES FROM MARCH 30, 2026 TO APRIL 5, 2026. A gentle reminder on the following deadlines, as may be applicable:

DATE	FILING/SUBMISSION
March 30, 2026	SUBMISSION – Proof of eFiled BIR Form 1702 – RT/EX/MX with Audited Financial Statements (AFS), 1709 (if applicable), and Other Attachments through Electronic Audited Financial Statements (eAFS). Fiscal Year ending November 30, 2025
	SUBMISSION – Soft Copies of Inventory List and Schedules stored and saved in DVD-R/USB properly labeled together with Notarized Sworn Declaration. Fiscal Year ending February 28, 2026
	e-SUBMISSION – Quarterly Summary List of Sales/Purchases/Importations by a VAT Registered Taxpayers – eFPS Filers. Fiscal Quarter ending February 28, 2026
	ONLINE REGISTRATION (thru ORUS) – Computerized Books of Accounts and Other Accounting Records. Fiscal Year ending February 28, 2026
April 1, 2026	SUBMISSION – Consolidated Return of All Transactions based on the Reconciled Data of Stockbrokers. March 16 – 31, 2026
	SUBMISSION – Engagement Letters and Renewals or Subsequent Agreements for Financial Audit by Independent CPAs. Fiscal Year beginning June 1, 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 1702Q (Quarterly Income Tax Return For Corporations, Partnerships and Other Non-Individual Taxpayers) and Summary Alphalist of Withholding Taxes (SAWT). Fiscal Quarter ending January 31, 2026
April 5, 2026	SUBMISSION – Summary Report of Certification issued by the President of the National Home Mortgage Finance Corporation (NHMFC). Month of March 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 2000 (Monthly Documentary Stamp Tax Declaration/Return). Month of March 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 2000-OT (Documentary Stamp Tax Declaration/Return One-Time Transactions). Month of March 2026

COURT OF TAX APPEALS DECISIONS

THE CITY OF MANILA’S ASSESSMENT IS VOID FOR ASSESSING TAXPAYER BUSINESS TAX AS HOLDING COMPANY WITHOUT ANY SUPPORTING ORDINANCE; ALSO VOID FOR LACK OF NATURE, BASIS, AND RATE OF THE TAX. Under Section 195 of the Local Government Code (LGC), a valid local tax assessment must clearly state the nature of the tax, the amount of deficiency, and the applicable surcharges, interests, and penalties; in addition, LGC requires that the power of local government units to impose taxes must be exercised through a duly enacted ordinance of the Sanggunian. Applying these principles, the Court found that the City of Manila improperly assessed the taxpayer for “business tax as holding co.” despite the absence of any ordinance imposing such tax on holding companies, and without adequately indicating the legal basis or nature of the tax in the assessment notice. The assessment further failed to specify the tax rate and showed inconsistency as to whether the taxpayer was being taxed as a contractor or a financial institution, even leading to figures that could not be independently verified or recomputed. Such omissions prevented the taxpayer from intelligently protesting the assessment and demonstrated arbitrariness in its issuance, thereby violating due process. Consequently, the deficiency local business tax assessments were declared void. (The City of Manila et. al., v. CTF Hotel and Entertainment, Inc., CTA EB No. 2987, CTA AC 276, September 19, 2025)

THE PERIOD TO FILE A PETITION FOR REVIEW OR A MOTION FOR RECONSIDERATION RUNS FROM THE DATE THE DECISION OR RESOLUTION IS RECEIVED BY THE PARTY’S COUNSEL OF RECORD, AND WHERE A PARTY IS REPRESENTED BY MULTIPLE COUNSELS, NOTICE TO ANY ONE OF THEM IS CONSIDERED SUFFICIENT AND BINDING. In the present case, the DOJ was the counsel of record for petitioner and was properly furnished a copy of the assailed resolution of May 6, 2024, which triggered the running of the reglementary period for filing a motion for reconsideration, regardless of when the BIR or its deputized special prosecutors received a copy. Likewise, the assailed resolution of July 30, 2024 was received by the DOJ on August 2, 2024, and furnished to the BIR on August 6, 2024, giving the petitioner until August 20, 2024, considering weekends and holidays, to file a petition for review. Because the Petition for Review was filed on August 21, 2024, it was clearly out of time. Petitioner’s reliance on its status as private complainant, the deputization of BIR lawyers, or principles of substantial justice and fair play were legally irrelevant to timeliness, and even if the petition were considered timely, the court dismissed the case. (People v. Ronie Romano Eustaquio, CTA EB Crim No. 160, CTA Crim Case No. O-807, October 30, 2025; see also People v. Juanita L. Ilagan, CTA EB Crim No. 158, CTA Crim Case No. O-987)

CRIMINAL ACTIONS FOR VIOLATIONS OF THE TAX CODE PRESCRIBE AFTER FIVE YEARS FROM THE COMMISSION OF THE OFFENSE, OR FROM ITS DISCOVERY IF UNKNOWN, AND THE PRESCRIPTIVE PERIOD IS INTERRUPTED ONLY BY THE INSTITUTION OF JUDICIAL PROCEEDINGS; SEE  DISSENTING OPINION. jurisprudence, including Lim Sr. Case, establishes that the period begins when the taxpayer willfully fails to pay the deficiency taxes after notice or when the assessment becomes final and unappealable. Applying this to the present case, the taxpayer received the Formal Letter of Demand and Assessment Notices on April 7, 2010, with payment due on April 26, 2010, and the Information was only filed on January 28, 2020, well beyond the five-year prescriptive period. Although the Supreme Court in Consebido Case clarified that filing before the DOJ tolls prescription, this ruling applies prospectively and does not affect this case. Even if applied, the prescriptive period commenced on April 27, 2010, upon willful non-payment, and the filing of the complaint in 2019 occurred more than five years later, rendering the criminal action time-barred. (People v. Ronie Romano Eustaquio, CTA EB Crim No. 160, CTA Crim Case No. O-807, October 30, 2025; see also People v. Ziegfried Loo Tian, CTA EB Crim No. 143, CTA Crim Case No. O-943, October 10, 2025) Dissenting Opinion: Consebido Case applies retroactively as it is procedural in nature; and Lim Sr. Case is not applicable as it interpreted 1939 Tax Code.

VESSEL MAY BE SEIZED EVEN IF IT IS A COMMON CARRIER IF IT ENTERED INTO A CHARTER PARTY AGREEMENT; LACK OF KNOWLEDGE OR PARTICIPATION IS IMMATERIAL; SEE DISSENTING OPINION. Forfeiture proceedings are in rem, directed against the property itself rather than its owner, and the mere presence of smuggled goods in commercial quantities aboard a vessel is sufficient to warrant seizure and forfeiture. The law establishes that exemptions from forfeiture only apply if the vessel is a common carrier, has not been chartered or leased for transporting cargo or persons, and if the owner or agent had no knowledge or participation in the unlawful act; and the burden of proof to establish exemption rests squarely on the claimant. Jurisprudence confirms that the owner’s lack of knowledge or personal involvement does not absolve the vessel of forfeiture liability, as the proceedings focus on the vessel’s use in the illegal act and not on personal culpability. Thus, where the vessel was found loaded with smuggled rice and cigarettes even though the vessel was a common carrier engaged in coastwise trade but had entered into a Charter Party Agreement, the taxpayer is disqualified from claiming exemption, as chartered vessels cannot invoke the protection given to common carriers. The Court emphasized that the forfeiture action being in rem means that the owner’s personal knowledge or intent is irrelevant to the vessel’s liability. (Hai Long Shipbuilding & Lighterage Inc., v Office of the Commissioner, CTA Case No. 10622, August 28, 2025) Dissenting opinion: While the taxpayer entered into a Charter Party Agreement, this only disqualifies it from claiming exemption that the vessel must be a common carrier not chartered or leased. However, forfeiture also allows an independent exemption if the owner or agent had no knowledge or participation in the unlawful act, noting that the disjunctive “or” in the statute means the two conditions are alternative, not cumulative. The petitioner consistently denied any knowledge or involvement in smuggling, and that the respondents failed to provide prima facie evidence showing participation, Lastly, the acts of the vessel’s captain were not properly proven, as the affiants were not presented in court, rendering their affidavits hearsay. Based on these points, the dissent concluded that the forfeiture order lacks sufficient evidence.

REVENUE ISSUANCES

Revenue Memorandum Order No. 006-2026

Amends the procedural framework for consolidating Electronic Letters of Authority (eLAs) and provides transitional rules for VAT refund processing to ensure uniform audit reforms.

Topic	Coverage	Key Points
Deadlines (Amended)	Non-consolidation request	Extended to Mar 13, 2026
	Automatic eLA consolidation	Mar 20, 2026
	End of VAT audit operations	May 15, 2026
	Consolidation of exempt cases	May 18, 2026
	VATAS/LTVAU wind-up	May 29, 2026
Absolute Prohibitions	FDDA stage	No consolidation; proceed independently
	Final & executory FAN	Cannot be consolidated or disturbed
	FAN + pre-PAN cases	Not allowed
Exception (FAN Level)	FAN not yet final	Allowed if valid, protest ongoing, within 180 days, with safeguards
Pre-FAN Consolidation	No NOD + No NOD	Consolidate at NOD; issue consolidated NOD
	No NOD + NOD / NOD + NOD	Consolidate at NOD with taxpayer conformity; supersede prior NOD(s)
	No NOD + PAN	Complete NOD first; then consolidate at PAN; new 15-day period
	NOD + PAN / PAN + PAN	Consolidate at PAN; new 15-day response period
FAN Stage Rules	No NOD + FAN / NOD + FAN	No consolidation
	PAN + FAN	Allowed after PAN completion; FAN must be valid and open
	FAN + FAN	Allowed if both valid, not final, protest period active
FAN Consolidation Effects	Consolidated FAN issued	Supersedes prior FAN(s); new 30-day protest period
Mandatory Safeguards	All consolidation cases	Requires: written conformity (no admission), waiver of prescription, proper service, supersession clause, no regression of stages
VAT Refund Transition	Filing of new claims	Until Mar 31, 2026 with VATAS/LTVAU; after Apr 1 → RDO/LTS
	Pending claims	Process until May 29, 2026, then endorse
Annex A Update	Tax clearance cases (TRC)	Covered by eLA if sales > ₱3M or assets > ₱8M (retirement, death, reorg)
Core Principles	Policy direction	Streamlined consolidation, due process preserved, finality respected, no regression in audit stages

Revenue Memorandum Circular No. 20-2026

In accordance with the Ease of Paying Taxes Act and its implementing regulations, the Bureau of Internal Revenue (BIR) has issued guidelines for the electronic filing and payment of 2025 Annual Income Tax Returns (AITR) due by April 15, 2026.

Legal Basis & Purpose	Issued pursuant to Republic Act No. 11976 (Ease of Paying Taxes Act) and Revenue Regulations No. 4-2024. Aims to ensure an efficient process for filing 2025 Annual Income Tax Returns (AITR) and paying taxes due by April 15, 2026.
Filing Platforms	eFPS: For mandated taxpayers or voluntary enrollees. Offline eBIRForms Package (v7.9.5): For non-eFPS filers and “No Payment” returns. Tax Software Providers (TSPs): BIR-certified providers for specific returns. Manual Filing: Allowed only if systems are unavailable, by advisory, or for specific simplified forms (1701-MS).
Payment Options	Electronic: Via eFPS, LBP Link.Biz Portal, UnionBank Online, DBP PayTax Online, MyEG, and Maya. Manual: Over-the-counter at any Authorized Agent Bank (AAB) for eBIRForms filers or when systems are down.
Micro & Small Taxpayers	May use BIR Form No. 1701-MS (filed manually) or simplified versions of 1701/1701A. Not required to update Certificate of Registration (COR) to reflect new form types. Exempt from “wrong venue” filing penalties.
Attachments & Proof	Proof of Filing: Filing Reference Number (FRN) or Tax Return Receipt Confirmation (TRRC). Submission: Attachments (e.g., AFS, 2307, 2316) must be sent via the eAFS system within 15 days of filing. Physical “Received” stamps are generally not required if using eAFS.
Assistance Facilities	BIR eLounge: Available at RDOs to help with electronic filing. Priority: Given to Senior Citizens, PWDs, employees with multiple employers, and those without internet access.

BIR DEADLINES FROM MARCH 23, 2026 TO MARCH 29, 2026. A gentle reminder on the following deadlines, as may be applicable:

DATE	FILING/SUBMISSION
March 25, 2026	SUBMISSION – Quarterly Summary Lists of Sales/Purchases/Importations by a VAT Registered Taxpayers – Non-eFPS Filers.  Fiscal Quarter ending February 28, 2026
	SUBMISSION – Sworn Statement of Manufacturer’s or Importer’s Volume of Sales of each particular Brand of Alcohol Products, Tobacco Products and Sweetened Beverage Products.  Fiscal Quarter ending February 28, 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 2550Q (Quarterly Value-Added Tax Return) – eFPS & Non-eFPS Filers.  Fiscal Quarter ending February 28, 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 2551Q (Quarterly Percentage Tax Return) – eFPS & Non-eFPS Filers. Fiscal Quarter ending February 28, 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 2550-DS (Value-Added Tax (VAT) Return for Nonresident Digital Service Provider). Fiscal Quarter ending February 28, 2026

COURT OF TAX APPEALS DECISIONS

THE CITY TREASURER’S ASSESSMENT IS VOID BECAUSE THE NOTICES FAILED TO STATE THE LEGAL AND FACTUAL BASES OF THE ALLEGED DEFICIENCY, PREVENTING THE TAXPAYER FROM FILING AN INFORMED PROTEST. A valid notice of assessment must be issued by the local treasurer or duly authorized representative whenever correct taxes, fees, or charges have not been paid, and it must state the nature of the tax, fee, or charge, the amount of deficiency including surcharges, interests, and penalties, as well as the factual and legal bases of the assessment, so that the taxpayer is adequately informed and can prepare an intelligent protest within sixty (60) days. In the present case, the Court found that none of the documents issued by the City Treasurer to the taxpayer, including the Tax Data and Assessment Form, the assessment letter and its attachments, and the Letter of Assessment (Final Notice)  sufficiently complied with these requirements. Specifically, these documents only provided computations or summaries of the alleged deficiency without explaining the factual or legal bases, such as the ordinances, corporate records, or relevant laws supporting the assessment, thereby preventing taxpayer from preparing an effective protest. As a result, the Court held that the assessments are void for failure to issue a valid notice of assessment, and no assessment could have become final and executory (O&S Trading and Construction Supply, Inc., v. Office of the City Treasurer of Las Piñas, CTA AC No. 303, August 1, 2025; see also City of Taguig et. al., v. Cosmos Bottling Corporation, CTA AC No. 320, September 10, 2025)

THE ASSESSMENTS FOR 2008–2013 WERE VOID AS THE 5-YEAR PRESCRIPTIVE PERIOD HAD LAPSED; FRAUD OR INTENT TO EVADE TAXES, AS BASIS FOR 10-YEAR PRESCRIPTION PERIOD, WAS NOT PROVEN BY CLEAR AND CONVINCING EVIDENCE. Local taxes, fees, or charges must generally be assessed within five (5) years from their due date, while an extraordinary ten (10)-year period applies only in cases of fraud or intent to evade payment, which must be established by clear and convincing evidence. In this case, the Court found that respondent failed to prove fraud or intent to evade taxes for taxable years 2008 to 2013, as the evidence relied upon, such as an excerpt of petitioner’s 2007 financial statement and estimated sales for subsequent years, was unverified, incomplete, and insufficient to demonstrate any substantial under-declaration of income; mere understatement of taxes cannot, by itself, establish fraud. Therefore, the ordinary five-year prescriptive period applies, and since the taxpayer received the assessment only on August 1, 2018, the right to assess taxes for 2008 to 2013 had already lapsed, rendering the assessments void and incapable of becoming final or executory. (O&S Trading and Construction Supply, Inc., v. Office of the City Treasurer of Las Piñas, CTA AC No. 303, August 1, 2025)

PILAA COULD NOT BE APPLIED AS BASIS FOR ASSESSMENT WITHOUT AN ENABLING ORDINANCE, UNVERIFIED SEC RECORDS AND ARBITRARY INCREASE; THE TAXPAYER’S SWORN DECLARATIONS AND AUDITED STATEMENTS ALREADY SUFFICED. The power to impose local taxes must be exercised by the local legislative body or Sanggunian through an appropriate ordinance, and any tax assessment, including the use of the Presumptive Income Level Assessment Approach (PILAA), must be anchored on such ordinance; absent this, the exercise of taxing power is unauthorized. In this case, the LGU applied the PILAA to compute the taxpayer’s local business tax deficiency without presenting any ordinance of Las Píñas City authorizing its use, relying instead on unverified SEC records and arbitrary 10% annual increases. The Court found that petitioner had submitted sworn declarations and audited financial statements sufficient to determine its actual gross income, making the application of the PILAA both unnecessary and legally unfounded. Consequently, the assessment based on the PILAA lacks factual and legal basis, rendering the subject assessment void, and the letters of assessment for taxable years 2008 to 2017 are nullified, cancelled, and set aside. (O&S Trading and Construction Supply, Inc., v. Office of the City Treasurer of Las Piñas, CTA AC No. 303, August 1, 2025; The City of Taguig et. al. v. Union Cement Holdings Corporation, CTA AC No. 313, July 29, 2025)

ONLY THE CITY TREASURER OR ITS AUTHORIZED REPRESENTATIVES – NOT THE BPLO – MAY ISSUE LOCAL BUSINESS TAX ASSESSMENTS. The power to assess and collect local business taxes (LBT) is expressly vested in the City Treasurer, who may deputize representatives under specific conditions, while the Business Permits and Licensing Office (BPLO) is limited to processing business retirements and cannot independently issue or approve tax assessments. In the present case, the subject assessment was issued by the BPLO without any authorization from the City Treasurer, and the LGU failed to provide any ordinance, law, or rule delegating such authority. Testimony and records confirmed that BPLO personnel prepared and approved the assessment, and the mere use of software provided by the City Treasurer or instructions to make payment to the Treasurer does not confer legal authority to the BPLO. Furthermore, the Bureau of Local Government Finance (BLGF) has consistently held that assessment of local taxes is the inherent function of the City Treasurer unless explicitly provided otherwise by law. Accordingly, since the BPLO lacked legal authority to issue the assessment, it is null and void, and the assessment against TMC is cancelled (NLEX Corporation v. The City of Caloocan et. al., CTA AC No. 312, October 8, 2025)

DOCTRINE OF EXHAUSTION OF ADMINISTRATIVE REMEDIESEQUIRES TAXPAYERS TO FIRST SEEK REVIEW OF THE CIR’S INTERPRETATIONS BY THE SECRETARY OF FINANCE; PETITION DIRECTLY FILED WITH THE CTA WITHOUT AVAILING OF SUCH ADMINISTRATIVE REVIEW IS PREMATURE.  The Commissioner of Internal Revenue has the exclusive authority to interpret tax laws, subject to review by the Secretary of Finance; thus, taxpayers must first seek such administrative review before resorting to the courts in accordance with the doctrine of exhaustion of administrative remedies. Although the Court of Tax Appeals may rule on the validity or constitutionality of tax laws and administrative issuances, this power is generally exercised only after administrative remedies have been exhausted. In this case, the petitioner directly filed a Rule 65 petition before the CTA to invalidate a Revenue Memorandum Circular and a BIR Letter declaring certain MILO products subject to Sweetened Beverage Tax. The court held that these issuances were merely interpretative and not an actual assessment or collection action; hence, the petition was dismissed for prematurity for failure to first seek review by the Secretary of Finance (Nestlé Philippines, Inc. v. CIR, CTA Case No. SCA 006, August 2025).

CRIMINAL CASE MAY PROCEED WITHOUT ASSESSMENT IN CASE OF FRAUD BUT VALIDITY OF ASSESSMENT IS AN ISSUE IN CASE OF WILLFUL FAILURE TO PAY DESPITE A LAWFUL NOTICE AND DEMAND. The general rule is that the collection of taxes must first be preceded by a valid assessment issued by the Commissioner of Internal Revenue, consistent with due process requirements allowing the taxpayer to know the factual and legal bases of the government’s claim and to contest the assessment before payment is enforced. Jurisprudence reiterates that a valid assessment is a substantive prerequisite for tax collection because courts cannot perform a judicial assessment in the first instance, except where the taxpayer files a false or fraudulent return or fails to file a return, allowing the government to file a court action for collection even without an assessment. This rule was clarified in People v. Mendez, which held that when a criminal tax case is filed, the criminal action simultaneously serves as the tax collection case, and a prior or final assessment is not required, provided the prosecution proves both the accused’s guilt beyond reasonable doubt and the civil tax liability through competent evidence. Applying these principles, tax liability in criminal cases under Section 255 may arise through two modes: first, where non-payment results from falsity, fraud, or willful omission (e.g., filing a false return or failure to file), in which case collection may proceed without assessment; and second, where the taxpayer deliberately refuses to pay despite a lawful notice and demand based on a deficiency assessment, in which case the validity of the assessment becomes essential, because if the assessment is void or absent when required by law, the government’s basis for tax collection and criminal liability correspondingly fails. (People of the Philippines v. Ronald Punay Robin, CTA Crim Case No. A-19, August 13, 2025)

2016 VAT ASSESSMENT IS VOID WITHOUT A VALID SERVICE ASSESSMENT, AND NO EVIDENCE OF FALSITY OR FRAUD WAS SHOWN. The collection of taxes presupposes a valid and demandable assessment, unless nonpayment arises from falsity, fraud, or willful omission. In this case, the Court found that the alleged deficiency VAT for TY 2016, purportedly arising from undeclared, was based solely on a void assessment due to improper service, with no evidence of falsity or fraud on the part of the taxpayer. The BIR failed to attach supporting importation documents or provide a detailed breakdown of the alleged deficiency, and its own witness admitted that such evidence was not submitted. Consequently, there is no competent evidence establishing the VAT liability, and the Court held that the appellant cannot enforce civil tax liability. The appeal was therefore denied, affirming the lower court’s decision and resolution. (People of the Philippines v. Ronald Punay Robin, CTA Crim Case No. A-19, August 13, 2025)

ON DISSENTING OPINION: SALES SHOULD BE RECORDE IN THE PRINCIPAL PLACE OF BUSINESS IF THE BRANCH NEITHER ACCEPTS ORDERS NOR ISSUES SALES INVOICE; LGU CANNOT TAX ON THE BASIS OF DELIVERY. The Implementing Rules and Regulations of the Local Government Code defines the principal office, branch or sales office, and warehouse, and provides that sales made in a locality with a branch, sales office, or warehouse must be recorded there and the corresponding tax paid to that locality; otherwise, the sale must be recorded in the principal office and the tax accrues to the city or municipality where such principal office is located. Here, although the Davao City is authorized to impose LBT on manufacturers, the determination of whether the taxpayer is liable depends on whether the facility it maintains in the locality qualifies merely as a warehouse for storage, a manufacturing site, or a branch or sales office, since this classification determines the proper situs of taxation under the LGC and its IRR. However, the appellate court found that the trial court resolved the case without receiving evidence, merely directing the parties to submit memoranda and dispensing with trial, thereby leaving the factual circumstances unresolved; consequently, the case was remanded to the Regional Trial Court of Davao City for trial and presentation of evidence to determine the factual and legal issues necessary to properly decide the petitioner’s liability for local business tax. Dissenting Opinion:  Case need not be remanded as court  for further trial because the trial court conducted a trial on the merits and rendered judgment based on documentary evidence on record and the parties stipulated during pretrial that issues could be resolved without testimonial evidence. Davao warehouse is not a branch or sales office because it neither accepts orders nor issues sales invoices, so the situs of taxation remains with the petitioner’s principal office in Makati. It further emphasizes that the 2017 Davao City Revenue Code conflicts with the LGC and its IRR by taxing sales based on delivery rather than the location of the principal office or a legitimate branch, creating a risk of dual taxation. Consequently, the assessments are invalid and should be set aside. (Alaska Milk Corporation v. Office of the City Treasurer and/or Davao City, CTA AC No. 272. October 22, 2025)

THE NATIONAL FOOD AUTHORITY, AS A GOVERNMENT INSTRUMENTALITY PERFORMING ESSENTIAL PUBLIC FUNCTIONS, USED ITS CABANATUAN PROPERTIES FOR PUBLIC SERVICE, SO THE CTA HELD IT IS EXEMPT FROM REAL PROPERTY TAX AND VOIDED THE CITY’S DELINQUENCY NOTICES. Local government units are prohibited from levying real property taxes on the national government, its agencies, and instrumentalities, and properties of public dominion used for public purposes are likewise exempt, unless the beneficial use of such properties has been granted to a taxable person. Thus, the Court held that the National Food Authority (NFA) qualifies as a government instrumentality because it performs essential governmental functions, such as maintaining and distributing the national rice buffer stock, while being vested with corporate powers, administering special funds, and enjoying operational autonomy, without being organized as a GOCC. In line with this, the NFA’s properties in Cabanatuan City, used as offices and warehouses for public service operations, remain exempt from real property tax, and the Notices of Delinquency issued by the City Treasurer demanding tax payment are therefore declared void. The Court further emphasized that NFA properly availed itself of the extraordinary remedy of prohibition, as the issue involved a pure question of law regarding the authority of the local officials to assess and collect taxes, and no remand to the lower court was necessary. (National Food Authority v. City Government of Cabanatuan City et. al., CTA AC No. 275, August 28, 2025)

SECURITIES AND EXCHANGE COMMISSION 

THE SEC TEMPORARILY ALLOWS CORPORATIONS TO USE AN EARLIER GIS FORM SO THEY CAN CONTINUE COMPLYING WITH FILING REQUIREMENTS WHILE THE NEW BENEFICIAL OWNERSHIP REPORTING SYSTEM IS BEING FINALIZED. Under its authority to regulate corporate reportorial compliance and filing procedures, the SEC issued a notice temporarily allowing corporations to use the 2020 version of the General Information Sheet (GIS) form to ensure continuity in mandatory filings while the updated beneficial ownership reporting framework and related electronic systems are still being completed. Applying this policy, corporations that are still in the process of setting up or restoring access to their electronic filing and beneficial ownership registry accounts may proceed with urgent GIS submissions through the electronic filing platform using the 2020 form during the transition period, after which the SEC will require the use of the updated reporting framework and the submission of beneficial ownership declarations through the integrated registry system once the new version becomes mandatory. (SEC Notice: Temporary Use of 2020 Form for Urgent Filing of General Information Sheet on eFAST, 10 March 2026).

REVENUE ISSUANCES

Revenue Memorandum Circular No. 014-2026

The BIR clarifies Revenue Memorandum Circular No. 8-2026 on the lifting of the suspension of tax audit and field operations, together with Revenue Memorandum Order No. 1-2026 and Revenue Memorandum Order No. 6-2026 on the implementation of revised audit policies, procedures, and safeguards.

Key Clarification	The issuance of a Replacement eLA due to reassignment of Revenue Officers is not considered a new audit authority and does not require a separate approval from the Commissioner of Internal Revenue.
Audit Initiation from Complaints	Verified complaints or information from informers or other government agencies may trigger an audit but must be processed in accordance with Revenue Regulations No. 16-2010 as confidential information and subject to preliminary investigation.
Important Deadlines	March 13, 2026 – Deadline for taxpayers to file a written request for non-consolidation of VAT audit cases. March 20, 2026 – Automatic consolidation of pending LOA/eLA covering the same taxpayer and taxable period (unless a request for non-consolidation was filed). May 15, 2026 – Deadline for VAT audit section (VATAS) and Large Taxpayers VAT unit (LTVAU) to review, organize and prepare all ongoing audits and assessments for transfer to the appropriate regular offices of the BIR, in accordance with RMO No. 1-2026. May 18, 2026 – All pending LOAs/eLAs covering the same taxpayer and taxable period, where multiple LOAs/eLAs exist and which were previously allowed to proceed separately, shall be automatically consolidated. Where only one LOA/eLA exists, no consolidation shall take place; however, such cases shall be transferred to the appropriate regular offices pursuant to RMO No. 1-2026.
Effect on Existing Audit Actions	Audit findings developed before consolidation remain valid and will continue under the Replacement eLA without reissuing prior notices unless there are material changes.
VAT Audit Office Transition	Certain VAT audit offices and task forces will wind down operations until May 29, 2026, and all audit documents, evidence, and case records must be formally turned over to the appropriate office.
Waiver of Prescription	The existing Waiver of the Defense of Prescription executed under the original LOA/eLA remains valid and continues to toll the statute of limitations even after replacement.
Service Requirement	The Replacement eLA must still be properly issued and served to the taxpayer according to existing procedures.

SEC MEMORANDUM CIRCULAR NO. 4 SERIES OF 2026 AMENDS THE REVISED SRC RULE 68, INCREASING THE MANDATORY AUDIT THRESHOLD TO TOTAL ASSETS OR TOTAL LIABILITIES OF MORE THAN P3,000,000 TO ALIGN WITH NATIONAL MSME POLICY AND SUPPORT EASE OF DOING BUSINESS.

Mandatory Audit Requirement	Corporations with total assets or total liabilities at or below the prescribed threshold (P3,000,000) shall not be required to submit audited financial statements.
Alternative Submission (Unaudited FS)	Corporations not required to submit audited financial statements must submit financial statements accompanied by a Statement of Management’s Responsibility (SMR)
SMR Signatories	Stock and Non-stock corporations: Chairman of the Board, President or Chief Executive Officer, and Treasurer or Chief Financial Officer, all duly authorized by the Board of Directors One Person Corporations (OPCs): President and Treasurer
Exemptions to Audit Exemption	The exemption from mandatory audit does not apply to: Entities classified as Group A, Group B, or Group C under Part I, Section 3(B) of the Revised SRC Rule 68 Corporations that the Commission determines as vested with public interest
Applicability	The amended threshold shall apply to financial statements covering fiscal years ending on or after December 31, 2025.

BIR DEADLINES FROM MARCH 16, 2026 TO MARCH 22, 2026. A gentle reminder on the following deadlines, as may be applicable:

DATE	FILING/SUBMISSION
March 10, 2026	SUBMISSION – Consolidated Return of All Transactions based on the Reconciled Data of Stockbrokers. March 1-15, 2026
March 20, 2026	e-FILING & PAYMENT (Online/Manual) – BIR Form 1600-WP (Remittance Return of Percentage Tax on Winnings and Prizes Withheld by Race Track Operators) – eFPS & Non-eFPS Filers. Month of February 2026

COURT OF TAX APPEALS DECISIONS

ACCREDITATION OF TAX AGENTS BEFORE THE BUREAU OF INTERNAL REVENUE (BIR) IS VALID AND DOES NOT ENCROACH UPON THE REGULATORY AUTHORITY OF THE PROFESSIONAL REGULATORY BOARD OF ACCOUNTANCY (BOA). Under the National Internal Revenue Code, as amended, the Commissioner of Internal Revenue (CIR) is expressly authorized to accredit and register tax agents, and administrative agencies may validly exercise not only powers expressly granted but also those implied and necessary to carry out their statutory mandates, consistent with the Supreme Court’s ruling in J. Accountants Party-List, Inc., which upheld agency accreditation of professionals as regulation of a specific activity rather than of the profession itself. Applying this doctrine, the Court held that the BIR’s accreditation of tax agents does not unduly restrict the practice of accountancy nor encroach upon the regulatory authority of the Professional Regulatory Board of Accountancy since what is regulated is not the accountancy profession per se but the distinct activity of tax representation before the BIR; the requirements on competence, continuing education, fees, and sanctions are reasonable mechanisms to ensure integrity and efficiency in tax administration and apply to all who seek to practice before the Bureau, not exclusively to CPAs. Consequently, the assailed regulations are neither ultra vires nor violative of the doctrine of non-delegation, but a valid exercise of the BIR’s delegated and incidental powers (Emilino T. Maestro v. CIR, CTA Case No. 11309, August 6, 2025)

HOLDING COMPANY IS NOT SUBJECT TO LOCAL BUSINESS TAX ON DIVIDENDS INCOME. A city, such as the City of Taguig, may impose local business taxes only on contractors and other independent contractors at the prescribed graduated rates, and on banks and other financial institutions within the allowable percentage of their gross receipts. Local business taxes are imposed on the privilege of engaging in business, meaning regular commercial activity undertaken for profit. However, the Local Government Code prohibits local government units from taxing income or gains already subject to national income tax, except in the case of banks and other financial institutions. The Court emphasized that dividends and interest may be subjected to local business tax only when they form part of the gross receipts of banks or other financial institutions. Thus, when the taxpayer is a holding company, as reflected in its articles of incorporation, and its audited financial statements show that it merely earns dividend, interest, and foreign exchange income, with no evidence that it operates as a bank or financial institution or is engaged in business activities contemplated by law, the assessment of local business tax on such income has no legal basis. (The City of Taguig et. al., v. Union Cement Holdings Corporation, CTA Case No. 294, 2025)

FRANCHISE TAX MAY BE IMPOSED ONLY BY THE LOCAL GOVERNMENT UNIT (LGU) WHERE THE TAXPAYER’S PRINCIPAL OFFICE IS LOCATED. A PROVINCE CANNOT LEVY FRANCHISE TAX MERELY BECAUSE THE SERVICES ARE RENDERED OR THE CUSTOMERS ARE SITUATED WITHIN THE PROVINCE BUT OUTSIDE THE TERRITORIAL JURISDICTION OF THE CITY OR MUNICIPALITY WHERE THE PRINCIPAL OFFICE IS LOCATED. A province or city may impose franchise tax only on businesses enjoying a special or secondary franchise and only on gross receipts derived from the exercise of such franchise within its territorial jurisdiction. The Supreme Court clarified that liability requires concurrence of two elements: the existence of a franchise and the actual exercise of rights or privileges thereunder within the taxing LGU’s territory, with situs determined by where the franchise privilege is exercised Thus, where the taxpayer has a special or secondary franchise, and  it  supplies power to DANECO, which is located in Montevista, a municipality within the jurisdiction of Province of Compostela Valley, and where DANECO in turns delivers the same to customers including municipalities of Province of Davao Del Norte; and there is no showing that the taxpayer’s principal office is located in Province of Davao Del Norte and Compostela Valey, Province of Davao Del Norte and Compostela Valley cannot impose franchise tax on gross receipts from Daneco (National Transmission Corporation v. Province of Davao Del Norte, CTA AC No. 298, 2025)

ENVIRONMENTAL IMPACT FEE AND BUSINESS PLATE/STICKER FEE ARE REGULATORY, AND NOT REVENUE, IN NATURE, AND ARE OUTSIDE THE JURISDICTION OF THE CTA. The Court of Tax Appeals (CTA) exercises appellate jurisdiction over decisions of the Regional Trial Courts in local tax cases, i.e., matters where the primary purpose of the exaction is to raise revenue. Applying this, the Environmental Impact Fee and the Business Plate/Sticker Fee are regulatory in nature rather than revenue-generating: the Environmental Impact Fee compensates for environmental and social costs and covers solid waste management, with liability imposed even on property owners or managers for tenant non-compliance, while the Business Plate/Sticker Fee is imposed to support inspection and regulation of businesses. Because these exactions primarily serve regulatory purposes, they are not considered local taxes, and therefore, the CTA lacks jurisdiction to rule on the petitioner’s refund claims regarding these fees, confining its review solely to the petitioner’s liability for the Local Business Tax. (Serendra Condominium Corporation v. Taguig City Government et. al, CTA AC Case No. 302, 2025)

CONDOMINIUM DUES ARE NOT SUBJECT TO LOCAL BUSINESS TAX DESPITE BEING CLASSIFIED AS “REVENUES” IN THE TAXPAYER’S AUDITED FINANCIAL STATEMENTS. A condominium corporation is organized as a non-stock, non-profit entity, existing primarily to hold title to common areas and manage the condominium project for the benefit of unit owners, and its collection of association dues, membership fees, and other assessments is incidental to that purpose and not profit-oriented. Applying this principle, the taxpayer’s classification of dues as “Revenues” in its 2016 AFS does not constitute an admission of business activity, as these fees are collected solely to defray expenses and maintain the condominium’s common areas. Moreover, under the Taguig Revenue Code, the taxpayer cannot be considered a “contractor” because it does not engage in trade or render services for profit. Accordingly, the taxpayer is not subject to Local Business Tax, not by virtue of an exemption, but because it is not engaged in any business activity as contemplated by law. (Serendra Condominium Corporation v. Taguig City Government et. al, CTA AC Case No. 302, 2025)

UNDER SECTION 196, A STATEMENT OF ACCOUNT ISSUED MERELY FOR BUSINESS PERMIT RENEWAL IS NOT A VALID ASSESSMENT, SO THE TAXPAYER’S REMEDY IS A REFUND CLAIM, NOT A PROTEST UNDER SECTION 195. Under Section 196 of the Local Government Code of 1991, a taxpayer may file a claim for refund or tax credit within two (2) years from payment of taxes that were erroneously or illegally collected, which applies when no valid assessment under Section 195 has been issued by the local treasurer. Jurisprudence establishes that a valid assessment must clearly state the nature of the tax, the amount of deficiency, and the corresponding surcharges, interests, and penalties, and that documents issued merely in connection with business permit issuance or renewal cannot be treated as notices of assessment. In this case, the Statement of Account issued by the City Treasurer was not intended to determine any tax deficiency but merely served to facilitate the renewal of petitioner’s business permit; it did not indicate any deficiency tax, surcharge, or interest, nor did it state the factual and legal basis for the alleged liability. Consequently, the Statement of Account does not constitute a valid assessment under Section 195, and since there was likewise no showing that the taxing authority made a formal determination that petitioner failed to pay the correct taxes, the applicable remedy is a refund claim under Section 196, rather than the protest procedure under Section 195. (Holcim Philippines, Inc. v. The City of anila et. al., CTA AC No. 315, 2025)

A TAXPAYER ENGAGED IN MANUFACTURING OR WHOLESALE DISTRIBUTION OF ESSENTIAL COMMODITIES (E.G., CEMENT) IS ENTITLED TO THE PREFERENTIAL LOCAL BUSINESS TAX RATE, EVEN WITHOUT PRIOR LGU REGISTRATION AS SUCH. Cities are authorized to impose local business taxes; however, the tax on manufacturers, millers, producers, wholesalers, distributors, dealers, or retailers of essential commodities, including cement, shall be limited to one-half of the rates imposed on ordinary manufacturers or wholesalers. The law does not require prior registration with the local government as a manufacturer or wholesaler of essential commodities in order to claim the preferential rate, since local government units possess no inherent power to tax and may not impose requirements beyond those authorized by law. In this case, although the LGU argued and the RTC ruled that the taxpayer could only avail of the preferential rate after amending its business registration in March 2022, the evidence on record, including documentary and testimonial proof, established that the petitioner was in fact engaged in the manufacturing and/or wholesale distribution of cement, which is classified as an essential commodity. Consequently, the taxpayer is entitled to the preferential local business tax rate, notwithstanding the absence of prior registration specifically identifying it as a manufacturer or wholesaler of essential commodities. (Holcim Philippines, Inc. v. The City of Manila et. al., CTA AC No. 315, 2025)

A LOCAL GOVERNMENT UNIT MAY APPLY A PRESUMPTIVE INCOME LOCAL ASSESSMENT (PILAA) WHEN A TAXPAYER EITHER NEGLECTS OR REFUSES TO DECLARE GROSS SALES OR RECEIPTS, OR SUBMITS AN INADEQUATE DECLARATION WITHOUT AUDITED FINANCIAL STATEMENTS, PROVIDED THAT SUCH APPLICATION IS EXPRESSLY AUTHORIZED BY ORDINANCE. In this case, although the taxpayer later submitted a Certification of gross sales with its administrative claim for refund in December 2021, no proof of gross sales or receipts was presented at the time the Statement of Account was issued in 2020, satisfying the first condition for PILAA. The second condition was likewise met because the use of a presumptive income assessment under such circumstances is permitted. Accordingly, the LGU properly applied PILAA in assessing the petitioner’s local business tax. (Holcim Philippines, Inc. v. The City of Manila et. al., CTA AC No. 315, 2025)

THE PROSECUTION FAILED TO ESTABLISH CRIMINAL LIABILITY FOR TAX NONPAYMENT BECAUSE IT DID NOT PROVE THAT THE BIR ASSESSMENT NOTICES WERE PROPERLY SERVED ON THE CORPORATION OR ITS AUTHORIZED REPRESENTATIVES, AND THUS THE CORPORATION WAS NOT SHOWN TO BE LEGALLY OBLIGATED TO PAY THE ALLEGED DEFICIENCY TAX; CORPORATE OFFICERS CANNOT BE HELD CRIMINALLY LIABLE FOR TAX VIOLATIONS BASED SOLELY ON THEIR TITLES IN THE CORPORATION, ABSENT PROOF OF THEIR ACTIVE PARTICIPATION, KNOWLEDGE OF, OR ABILITY TO PREVENT THE ALLEGED NONPAYMENT OF TAXES. A corporation and its responsible officers may be held criminally liable for willfully failing to file returns, pay taxes, or supply correct and accurate information. To sustain a conviction, the prosecution must establish: (1) that the corporate taxpayer was legally obliged to pay the tax; (2) that it failed to pay the tax at the time or times required by law or rules and regulations; and (3) that the accused officer willfully failed to pay, actively participated in, or had the power to prevent the violation. In this case, accused Chow Master Corporation (CMC), a Philippine corporation engaged in the restaurant business and registered with the BIR, was alleged to have deficiency income tax liability for TY 2011 arising from BIR assessments. However, the prosecution failed to show that notices and demands, including the Preliminary Assessment Notice (PAN) and Final Assessment Notice (FAN), were properly served to CMC or its duly authorized representatives in accordance with Section 3.1.6 of Revenue Regulations Nos. 12-99 and 18-2013, which provide for personal, substituted, or mail service with clear documentation of delivery. The prosecution’s sole witness, RO Balazo, testified only generally from records and did not personally witness service, nor could she verify the authority of the individuals allegedly receiving the notices to bind CMC. As a result, CMC was not shown to have been legally required to pay any deficiency tax. Regarding accused Rebecca Ann K. Sy and Alice Lao Yap, the prosecution relied on a 2010 General Information Sheet showing Sy as President and Yap as Corporate Secretary, but presented no evidence of their actual positions, roles, or duties at the time of the alleged violation. There was also no proof that they actively participated in, had knowledge of, or could have prevented the nonpayment of taxes. Consistent with the Supreme Court’s ruling in Suarez vs. People et al., G.R. No. 253429, October 6, 2021, mere titular office does not establish criminal liability; liability arises from active participation or the power to prevent the wrongful act. Accordingly, the elements of Section 255 were not established beyond reasonable doubt, warranting the acquittal of the accused.

ALL VIOLATIONS PRESCRIBE IN FIVE YEARS FROM COMMISSION OR DISCOVERY, INTERRUPTED BY PROCEEDINGS OR OFFENDER’S ABSENCE, AND IN THIS CASE, THE FILING OF THE COMPLAINT-AFFIDAVIT BEFORE THE DOJ. All violations of the Code prescribe after five (5) years, with the period running from the commission of the offense or, if unknown, from discovery and the institution of judicial proceedings. The prescriptive period is interrupted by the commencement of proceedings and does not run when the offender is absent from the Philippines. In this case, the alleged violations involved the accused corporation’s failure to remit withheld compensation taxes, which under the “pay-as-you-file” system could have been readily ascertained by the BIR from its Electronic Filing and Payment System. Accordingly, the prescriptive period for each WTC return was reckoned from the statutory due date of each return, ranging from January 15, 2017, to August 15, 2019. The earliest alleged offense, failure to pay the WTC return for December 31, 2016, would have prescribed on January 15, 2022. However, the filing of the Complaint-Affidavit before the Department of Justice on October 10, 2019, effectively interrupted prescription for all 16 counts, rendering the criminal action timely and within the five-year period. The Court further clarified that the Discovery Rule does not apply when the BIR could have reasonably detected the violation and that preliminary investigations suffice to toll prescription, ensuring the government’s right to prosecute was exercised within the legally prescribed period (People of the Philippines v. Reynaldo Y. Dia et. al., CTA Crim. Case No. 0-1002, July 2025).

CRIMINAL LIABILITY FOR FAILURE TO REMIT WITHHOLDING TAXES WAS DISMISSED DUE TO FINANCIAL INCAPACITY, DISCONTINUED PROJECTS, AND EFFORTS TO PAY ET. AL., DEMONSTRATING LACK OF WILLFULNESS. THE PRESIDENT CANNOT BE HELD LIABLE BASED ON TITULAR POSITION ALONE AND MUST BE PROVEN TO HAVE ACTIVELY PARTICIPATED AS A RESPONSIBLE OFFICER. Any person or corporation required to file returns, remit taxes withheld, or supply correct information, who willfully fails to do so, may be criminally liable, with penalties imposed on responsible officers of corporations. In this case, the accused was required to remit withholding taxes on compensation (WTC) for multiple periods from December 31, 2016, to July 31, 2019, as reflected in its eFPS filings, and records from the BIR indicated non-payment of several returns. However, the prosecution failed to establish that the accused acted willfully, as its failure to pay was due to financial incapacity, discontinued projects, terminated client relationships, labor cases, and other obligations, and it made efforts to settle unpaid taxes, including attempts to negotiate with the BIR and to apply for tax amnesty. Furthermore, the prosecution did not prove that the accused, the President, was a responsible officer actively involved in the preparation or payment of the tax returns, as mere titular position alone does not establish criminal liability. While the failure to remit WTC was undisputed, the absence of willful intent and lack of evidence linking the accused to the act resulted in acquittal for reasonable doubt. Nonetheless, the accused remains civilly liable to pay the deficiency WTC, although the extent of such liability requires reopening of the trial for determination (People of the Philippines v. Reynaldo Y. Dia et. al., CTA Crim. Case No. 0-1002, July 2025).

SECURITIES AND EXCHANGE COMMISSION 

SEC ISSUES REVISED BENEFICIAL OWNERSHIP DISCLOSURE RULES; APPLICATION: ENTITIES MUST IDENTIFY, DECLARE, AND REPORT BENEFICIAL OWNERS TO ENHANCE TRANSPARENCY AND COMPLY WITH AML/CFT STANDARDS. The Securities and Exchange Commission (SEC) issued Memorandum Circular No. 15, Series of 2025, effective January 1, 2026, establishing a framework requiring corporations and other covered entities to identify, declare, and report information on their beneficial owners. The Circular aims to enhance corporate transparency, prevent the misuse of corporate structures for illicit activities, and ensure compliance with international standards on anti-money laundering (AML) and combating the financing of terrorism (CFT). SEC Memorandum Circular No. 15, s. 2025 (2025).

Scope of Application	Applies to all natural and juridical persons under SEC jurisdiction, including: Domestic Corporations Partnerships Foreign Corporations One-Person Corporations
Categories of Beneficial Owners	Only natural persons are recognized. All beneficial owners falling under specified categories must be disclosed; an individual is considered a beneficial owner from the moment they meet any qualifying category.
Penalties – Corporations	Fines for failure to disclose without lawful cause: ₱50,000 to ₱500,000 (escalating for repeated violations and larger corporations). Additional ₱1,000/day for delays, capped at ₱2,000,000. False declarations: up to ₱2,000,000 and possible corporate dissolution.
Penalties – Officers / Directors	Directors, trustees, officers failing due diligence may be fined up to ₱1,000,000 and barred from holding positions for five years.
SEC Enforcement Powers	SEC may suspend or revoke incorporation certificates for willful violations, issue compliance orders, require remedial measures, offer settlements (except for repeated/deliberate violations), and publish non-compliant entities.
Whistleblower Protections	Protections and incentives provided to encourage reporting of violations, enhancing transparency and accountability.

SEC MEMORANDUM CIRCULAR NO. 4 SERIES OF 2026 AMENDS THE REVISED SRC RULE 68, INCREASING THE MANDATORY AUDIT THRESHOLD TO TOTAL ASSETS OR TOTAL LIABILITIES OF MORE THAN P3,000,000 TO ALIGN WITH NATIONAL MSME POLICY AND SUPPORT EASE OF DOING BUSINESS.

Mandatory Audit Requirement	Corporations with total assets or total liabilities at or below the prescribed threshold (P3,000,000) shall not be required to submit audited financial statements.
Alternative Submission (Unaudited FS)	Corporations not required to submit audited financial statements must submit financial statements accompanied by a Statement of Management’s Responsibility (SMR)
SMR Signatories	Stock and Non-stock corporations: Chairman of the Board, President or Chief Executive Officer, and Treasurer or Chief Financial Officer, all duly authorized by the Board of Directors One Person Corporations (OPCs): President and Treasurer
Exemptions to Audit Exemption	The exemption from mandatory audit does not apply to: Entities classified as Group A, Group B, or Group C under Part I, Section 3(B) of the Revised SRC Rule 68 Corporations that the Commission determines as vested with public interest
Applicability	The amended threshold shall apply to financial statements covering fiscal years ending on or after December 31, 2025.

SEC ISSUED GUIDELINES REQUIRING OPCS TO TIMELY APPOINT OFFICERS AND SUBMIT REPORTORIAL FORMS, WITH PENALTIES FOR NON-COMPLIANCE. Under the regulatory authority of the Revised Corporation Code of the Philippines and the power of the Securities and Exchange Commission to enforce corporate governance standards, the Commission issued guidelines to monitor and regulate the compliance obligations of One Person Corporations (OPCs), particularly regarding the appointment of officers and submission of required forms and reports, and to establish uniform penalties for violations. (Guidelines on the Compliances of One Person Corporations (OPCs), SEC Memorandum Circular No. 10, Series of 2026, 16 February 2026).

Title (Short Statement)	Context
Legal Basis for Guidelines	SEC exercises authority to regulate corporations and enforce corporate governance rules. Guidelines issued to ensure compliance and monitoring of OPCs.
Purpose of the Circular	Establish uniform monitoring of OPC compliance. Provide reportorial requirements and penalties for violations.
Initial Appointment of Officers	OPC must appoint treasurer, corporate secretary, and other officers after incorporation. Required form must be submitted to the SEC within the prescribed period.
Failure to Submit Initial Appointment	Non-compliance results in a fixed monetary penalty imposed by the SEC.
Subsequent Appointment of Officers	Any later appointment of officers must be reported to the SEC through the required form within the prescribed period.
Penalty for Non-Compliance	Failure to report subsequent appointments leads to escalating penalties depending on the number of violations.

REVENUE ISSUANCES

Revenue Regulation No. 001-2026

Revenue Regulations No. 001-2026 amends VAT rules for Registered Business Enterprises (RBEs) to clarify filing procedures, allow optional VAT registration, and extend system reconfiguration deadlines to December 31, 2026.

VAT Filing for Local Sales	B2B local sales from ecozones require per-transaction filing using BIR Form No. 0605.
	Bulk shipments under multiple invoices may use a single payment.
	Proof of payment must be presented to the BOC prior to the release of goods.
Optional Registration	RBEs under 5% SCIT or GIE regimes may opt for VAT registration for local sales.
	Registration does not void existing fiscal incentives for registered activities.
	A three-year lock-in period applies once an RBE elects this VAT registration.
VAT Exclusions	Domestic Market Enterprises (DMEs) that do not qualify for zero-rating are excluded from buyer-remittance rules.
	Excludes VAT-exempt transactions, zero-rated services, and sales of scrap materials
	Excluded sellers must pay VAT as regular taxpayers.
System Deadline Extension	The deadline to rename “VAT/VAT Amount” to “VAT on Local Sales” in invoicing systems is moved.
	Applies to CRM, POS, CAS, and other computerized accounting systems.
	The new extended deadline is December 31, 2026.

BIR DEADLINES FROM MARCH 9, 2026 TO MARCH 15, 2026. A gentle reminder on the following deadlines, as may be applicable:

DATE	FILING/SUBMISSION
March 10, 2026	SUBMISSION – List of Buyers of Sugar Together with a Copy of Certificate of Advance Payment of VAT made by each buyer appearing in the List by a Sugar Cooperative. Month of February 2026
	SUBMISSION – Information Return on Releases of Refined Sugar by the Proprietor or Operator of a Sugar Refinery or Mill. Month of February 2026
	e-SUBMISSION – Monthly e-Sales Report for All Taxpayers using CRM/POS and/or Other Similar Business Machines whose last digit of 9-digit TIN is Odd Number. Month of February 2026
	eFILING & PAYMENT/REMITTANCE (Online/Manual) – BIR Form 2200-M Excise Tax Return for the Amount of Excise Taxes Collected from Payment Made to Sellers of Metallic Minerals. Month of February 2026
	eFILING & PAYMENT (Online/Manual) – BIR Forms 1601-C, 0619-E, and 0619-F – Non-eFPS Filers. Month of February 2026
	eFILING & PAYMENT (Online/Manual) – BIR Form 2200-C (Excise Tax Return for Cosmetic Procedures) with Monthly Summary of Cosmetic Procedures Performed. Month of February 2026
	eFILING & PAYMENT (Online/Manual) – BIR Form 1600-VT and/or 1600-PT and Monthly Alphalist of Payees (MAP) – eFPS & Non-eFPS Filers. Month of February 2026
	eFILING & PAYMENT (Online/Manual) – BIR Form 1606 (Withholding Tax Remittance Return for Onerous Transfer of Real Property Other Than Capital Asset Including Taxable and Exempt). Month of February 2026
	eFILING & PAYMENT (Online/Manual) – BIR Form 0620 – eFPS & Non-eFPS Filers. Month of February 2026
	e-FILING & e-PAYMENT/REMITTANCE – BIR Form 1600-VT, 1600-PT, and BIR Form 1601-C – National Government Agencies (NGAs). Month of February 2026
March 11, 2026	e-FILING – BIR Forms 1601-C, 0619-E, and 0619-F – eFPS Filers under Group E. Month of February 2026
March 12, 2026	e-FILING – BIR Forms 1601-C, 0619-E, and 0619-F – eFPS Filers under Group D. Month of February 2026
March 13, 2026	e-FILING – BIR Forms 1601-C, 0619-E, and 0619-F – eFPS Filers under Group C. Month of February 2026
March 14, 2026	e-FILING – BIR Forms 1601-C, 0619-E, and 0619-F – eFPS Filers under Group B. Month of February 2026
March 15, 2026	REGISTRATION (Online thru ORUS or Manual) – Permanently Bound Loose-Leaf Books of Accounts/Invoices and Other Accounting Records. Fiscal Year ending February 28, 2026
	eFILING & PAYMENT (Online/Manual) – BIR Form 1702 – RT/EX/MX. Fiscal Year ending November 30, 2025
	eFILING & PAYMENT (Online/Manual) – BIR Form 1707-A – Annual Capital Gains Tax Return For Onerous Transfer of Shares of Stock Not Traded Through the Local Stock Exchange – by Corporate Taxpayers. Fiscal Year ending November 30, 2025
	e-FILING & e-PAYMENT – BIR Forms 1601-C, 0619-E, and 0619-F – eFPS Filers under Group A. Month of February 2026
	e-PAYMENT – BIR Forms 1601-C, 0619-E, and 0619-F – eFPS Filers under Group E, D, C & B. Month of February 2026