A gentle reminder on the following deadlines, as may be applicable:
|July 5, 2020||· Filing and Payment of Documentary Stamp Tax for the Month of June
· Submission of Summary Report of Certification issued by the President of the National Home Mortgage Finance Corporation for the Month of June
|July 8, 2020||· E-submission of monthly E-Sales report of all taxpayers using CRM/POS with TIN ending in even number for the month of June
· Submission of all transcript sheets used by dealers of automobiles/ manufacturers/ toll manufacturers/ assemblers/ importers of alcohol products, tobacco products, petroleum products, non-essential goods, sweetened beverage products, mineral products and automobiles for the month of June 2020
|July 10, 2020||· Filing and payment/remittance of 1601C – Non E-FPS filers for the month of June
· E-submission of E-Sales Report of all taxpayers using CRM/POS with TIN ending in odd number for the month of June 2020
· E-Filing/Filing and -Payment/payment of BIR Form 1600 and 1601C withholding tax return for National Government Agencies for the month of June
· E-submission of E-Sales Report of all taxpayers using CRM/POS with TIN ending in odd number for the month of June 2020
· Filing and payment/remittance of 2200M Excise Tax Return for the amount of Excise Taxes Collected from payment made to Metallic Minerals for the month of June 2020
· Submission of List of Buyers of Sugar together with a copy of certificate of advance payment of VAT for the month of June
· Submission of Information Return n Releases of Refined Sugar by the Proprietor or Operator of a Sugar Refinery or Mill for the month of June
· Submission of Monthly Report of DST Collected and Remitted by the Government Agency for the month of June
NEW SIN TAX REFORM LAW IS EFFECTIVE ON JANUARY 27, 2020, not JANUARY 1, 2020. The BIR circularizes Republic Act No. 11467 or the New Sin Tax Reform Law which increases the excise tax on alcohol products, tobacco products, and adds new provisions to the National Internal Revenue Code. It provides:
- The Circular clarifies that the law shall be applicable prospectively and shall take effect immediately after its complete publication in a newspaper of general circulation on January 27, 2020 (RMC No. 65-2020, June 30, 2020). For your easy reference, issuance may be accessed
Securities and Exchange Commission
SEC MAIN OFFICE RESUMES OPERATION beginning JULY 1, 2020; deadline for the submission of audited financial statements and general information sheet is extended. The SEC notifies the public that its main office resumes operation beginning July 1, 2020 and deadlines for annual reports are adjusted. It provides:
- The Commission shall continue operating at a limited capacity in view of the community quarantine and other health measures being implemented amid the COVID-19 pandemic.
- The Commission shall resume accepting Annual Financial Statements (AFS) and the General Information Sheet (GIS) primarily through the SEC Express Nationwide Submission (SENS) facility, which allows for the submission of reports through courier or registered mail.
- All corporations shall comply with the Commission’s directive that submissions to the SEC Main Office shall be made through courier services, including express delivery services, or through registered mail using the SENS facility at
- For Audited Financial Statements, the following are new deadlines:
|Filing Schedule||Last Digit of SEC Registration/License Number|
|July 1, 2, 3, 6, 7, 8, 9, 10||1 and 2|
|July 13, 14, 15, 16, 17||3 and 4|
|July 20, 21, 22, 23, 24||5 and 6|
|July 27, 28, 29, 30||7 and 8|
|August 3, 4, 5, 6, 7||9 and 0|
- For GIS – Corporations, which held their annual stockholders’ meetings during the ECQ and Modified ECQ in the National Capital Region, may submit their GIS until 31 August 2020, without incurring penalties. The GIS shall be submitted through courier services, including express delivery services or through registered mail using the SENS facility.
- Alternative Modes of Filing:
- Email Submission – Corporations may continue sending the scanned copies of their duly signed and, if applicable, notarized reports through email. The documents shall be considered received on the date reflected in the Acknowledgment Receipt that the Commission shall send through email. Accordingly, the printed copies may be submitted later or after the prescribed deadlines.
- Submission to the SEC Extension Offices – Corporations headquartered outside the National Capital Region may continue filing their reports with the SEC Extension Offices, except for Cebu, Baguio and Tarlac. For your easy reference, the issuance may be accessed
Court of Tax Appeals Decisions
A TAXPAYER MAY BE GENERALLY ASSESSED WITHIN 3 YEARS, UNLESS EXTENDED IN THE FORM OF WAIVER; WAIVER MUST INDICATE THE NATURE AND AMOUNT OF TAX DUE; OTHERWISE, IT IS INVALID AND DOES NOT EXTEND THE 3-YEAR PRESCRIPTIVE PERIOD.
- The BIR may assess internal revenue taxes within three (3) years from the last day prescribed by law for the filing of the tax return or the actual date of filing of such return, whichever comes later, unless extended, as when before the expiration thereof, the BIR and the taxpayer agreed in writing via
- The Waiver, must indicate the nature and the amount of the tax due, to be valid, and would have the effect of extending the three-year prescriptive period to assess. These details are material as there can be no true and valid agreement between the taxpayer and respondent absent these information.
- Where the waivers do not indicate the kind and amount of the taxes to be assessed or collected, they are invalid. Correspondingly, the same did not effectively extend the three-year prescriptive period. Hence, the assessment is void (Panay Electric Company v. CIR, CTA Case No. 9523, June 1, 2020).
A TAX ASSESSMENT STATING THAT THE “INTEREST WILL HAVE TO BE ADJUSTED” IS VOID AS THE AMOUNT REMAINS INDEFINITE.
- An assessment is a written notice and demand made by the BIR on the taxpayer for the settlement of a due tax liability that is definitelyset and fixed.
- If the Formal Letter of Demand/Formal Assessment Notice (FLD/FAN) reveals that although it provides for the computation of the taxpayer’s supposed tax liabilities, the amounts thereof remain indefinite, since the tax dues are still subject to modification. Specifically, the subject FLD-FAN states: “Please take note that the interest will have to be adjusted if paid beyond the date specified therein ().
A TAX ASSESSMENT WITH A “REQUEST TO PAY THE DEFICIENCY” IS VOID” CONSIDERING THAT IT IS NOT CONSIDERED A DEMAND.
- The FLD/FAN states “in view thereof, you are requested to pay your aforesaid deficiency income tax, value added tax and documentary stamp tax through the duly authorized agent bank in which you are enrolled, within the time shown in this assessment notice.”
- The request to pay is not a demand to pay. To demand means to “require (a person) to do and is also defined as “the assertion of a legal right.
- An examination of the FLD/FAN would reveal that there is no demand or requirement for the taxpayer to pay the taxes due. The phrase ”you are requested to pay your aforesaid deficiency tax negates the imperative nature and assertion of a legal right of an assessment.
- Correspondingly, the subject FLD/FAN do not purport to be a demand for payment of tax due, which a final assessment notice should supposedly be. Clearly, the subject tax assessments are void, and thus, bear no valid fruit ().
A LETTER OF AUTHORITY (“LOA”) IS NOT SUBJECT TO THE 3-YEAR PRESCRIPTIVE PERIOD; LETTER OF AUTHORITY AND TAX ASSESSMENT DISTINGUISHED.
- The taxpayer questions the Letter of authority issued by the BIR. It argues that as of the date of the issuance of the LOA, the BIR’s right to assess and collect within the 3-year period had already prescribed. It filed the tax returns for 2012 taxable year and the LOA was issued only in 2017.
- The CTA held that the 3-year period is period within the BIR should issue a tax assessment and not an LOA.
- The issuance of an LOA is not subject to the prescriptive period.
- A tax assessment is totally different from an LOA.
- An assessment is a written notice and demand made by the BIR on the taxpayer for the settlement of a due tax liability that is there definitelyset and fixed. It also signals the time when penalties and interests begin to accrue against the taxpayer.
- An LOA gives notice to the taxpayer that it is under investigation for possible deficiency tax assessment; at the same time, it authorizes or empowers a designated revenue officer to examine, verify, and scrutinize a taxpayer’s books and records, in relation to internal revenue tax liabilities for a particular period. The LOA commences the audit process and informs the taxpayer that it is under audit for possible deficiency tax assessment.
- A tax assessment is preceded by an LOA, which entails the examination of a taxpayer’s books of accounts and other accounting records; and the issuance of an LOA does not necessarily mean the subsequent issuance of a tax assessment. Parenthetically, the BIR is not mandated to make an assessment relative to every return filed with it (Hemisphere-Leo Burnett v. Commissioner of Internal Revenue, CTA Case Nos. 9749, June 03, 2020).
A PEZA-REGISTERED ENTITY IS A VAT-EXEMPT ENTITY AND ITS IMPORTATION IS NOT SUBJECT TO VAT, APPLYING THE CROSS-BORDER RULE; IT IS ALSO EXEMPT FROM NATIONAL AND LOCAL TAXES IN LIEU OF 5% GROSS INCOME TAX.
- Taxpayer is a PEZA-registered entity.
- The BIR assessed the taxpayer for deficiency VAT on its importation of its construction materials and equipment. It contends that the taxpayer’s tax incentive is not absolute because it is subject to the rules and regulations of PEZA and the conditions set in the Registration Agreement.
- The Court ruled that the assessment is wrong. The taxpayer is a VAT-registered entity, is a VAT-exempt entity under the law. Economic zones (PEZA) are considered a separate customs territory or legal fiction of foreign territory. Even though they are within the Philippines, theyare regarded in law as foreign soil.
- If it’s treated as a foreign territory, the cross-border rule applies, which states that no VAT shall be imposed to form part of the cost of goods destined for consumption outside of the territorial border of the taxing authority. Importation into economic zones are considered importationmade into foreign territory and not subject to VAT. Importations made by PEZA-registered enterprises which are located in the ecozones are considered foreign territory and are automatically not subject to VAT.
- The CTA also ruled that the taxpayer, being a PEZA-registered entity, is likewise entitled to exemption from national and local taxes, in lieu of payment of 5% gross income tax
- The taxpayer is automatically entitled to preferentialtax rate. There is no condition imposed upon PEZA-registered entity to enjoy its privileges. Even assuming that the taxpayer is required to obtain approval of PEZA before it can avail of the incentives, the imposition is erroneous because as a PEZA-registered entity it is VAT-exempt (CIR v. Philippine International Air Terminals Co., Inc., CTA EB No. 1918, CTA Case No. 9123, June 3, 2020)
REQUISITES FOR THE CLAIM FOR INPUT VAT REFUND. Jurisprudence has laid down certain requisites which must be complied with by the taxpayer-applicant to successfully obtain a credit/refund of input VAT.
- The claim is filed with the BIR within two (2) years after the close of the taxable quarter when the sales were made;
- In case of full or partial denial of the refund claim, or the failure on the part of the Commissioner to act on the said claim within a period of  days from the date of submission of complete documents in support of the application, the judicial claim must be filed with this Court, within 30 days from receipt of the decision or after the expiration of the said -day period;
- The taxpayer is a VAT registered;
- The taxpayer is engaged in zero-rated or effectively zero-rated sales;
- The acceptable foreign currency exchange proceeds have been duly accounted with BSP rules and regulations in the form of Certificate of Inward Remittance;
- The input taxes are not transitional input taxes;
- The input taxes are due or paid;
- The input taxes claimed are attributable to zero-rated or effectively zero-rated sales. However, where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributable to any of these sales, the input taxes shall be proportionately allocated on the basis of sales volumes;
- The input taxes have not been applied against output taxes during and in the succeeding quarters (Maxima Machineries, Inc. v. CIR, CTA Case No. 9268, June 1, 2020)
IN INPUT VAT REFUND, THE DOCUMENTS TO SUPPORT NRFC DOING BUSINESS OUTSIDE THE PHILIPPINES ARE SEC NEGATIVE CERTIFICATION AND FOREIGN BUSINESS REGISTRATION; SERVICE AGREEMENTS AND SCREENSHOTS OF CORPORATE PROFILE ARE NOT SUFFICIENT.
- In a claim for refund of input VAT for zero-rated sales (e.g. sale to non-resident foreign corporation (“NRFC’) doing business outside the Philippines), each foreign entity must be supported, at the very least, by both a) SEC certificate of non-registration of corporation/partnership and b) proof of foreign incorporation/ association/business registration. The said basic documents are necessary because the Philippine SEC’s negative certification establishes that the recipient of the service has no registered business in the Philippines, while the certificate/ articles of incorporation/ association will prove that the recipient of the service is indeed foreign. Furthermore, the former document will tend to satisfy the requirement that the service-recipient is not engaged in trade or business within the Philippines, while the latter document will indicate whether the same service recipient is engaged in business at all.
- Service agreements and printed screenshotsor corporate profiles are not sufficient to establish that its service recipients are non-resident foreign corporations doing business outside the Philippines. The former document only shows the names of customers to whom it rendered services, but do not, in any way, establish that the service recipients are engaged in business outside the Philippines; while the latter document is self-serving, and lack (Commissioner of Internal Revenue v. Chevron Holdings, Inc., CTA EB No. 1950, CTA Case No. 8946, June 3, 2020)
IN INPUT VAT REFUND, INPUT VAT MAY BE ALLOCATED PROPORTIONATELY ON THE BASIS OF SALES VOLUME.
- If the taxpayer is engaged in zero-rated and also in taxable sale of goods or properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales.
The law only mandates that the input tax paid or incurred is attributable to a taxpayer’s zero-rated sales. The law does not require that the input tax be directly attributable to zero-rated sales. Input taxes that bears a direct or indirect connection with a taxpayer’s zero-rated sales satisfies the requirement of the law (Id.)