BIR LIFTS THE SUSPENSION OF THE CONDUCT OF ENFORCEMENT ACTIVITIES AND OPERATIONS COVERED BY OUTSTANDING MISSION ORDERS (MOS) AND REMOVAL OF THE PROHIBITION ON THE ISSUANCE OF NEW MOS AUTHORIZING SUCH ACTIVITIES AND OPERATIONS UNDER REVENUE MEMORANDUM CIRCULAR NO. 77-2022. (RMC No. 127-2022, September 7, 2022)
- Under RMC No. 77-2022 dated May 30, 2022, the BIR suspended and prohibited the all field audits and other field operations covered by outstanding Mission Orders.
- The MOs authorizes the conduct of enforcement activities and operation of any kind, including: ocular inspection, surveillance activities, stock-taking activities and implementation of administrative sanction of suspension and temporary closure of business
- Effective immediately, the BIR lifted and removed the said suspension and prohibition.
THE BIR PROVIDES POLICIES AND GUIDELINES FOR THE ISSUANCE OF INTERNATIONAL CARRIERS SPECIAL CERTIFICATE. RMC No. 37-2022, September 16, 2022
- The said circular covers international carriers applying for International Carriers Special Certificate (ICSC).
- New applicants shall register and secure TIN online via ORUS and upload documents therein.
- Taxes to be paid:
- Income tax – 2/12% based on Gross Philippine Billings (to be computed using the exchange rate at the time of payment), unless subject to preferential rate or exempted on the basis of applicable tax treaty or international agreement to which the Philippines is a signatory or on the basis of reciprocity
- 3% percentage tax (common carrier’s tax)
- Application of ICSC:
- ICSC to be issued only upon payment of common carrier’s tax and 2.5% income tax.
- Regional Director No. 7A – Quezon City shall issue the ICSC
BIR RULINGS
- Sale of house and lot duly registered with the Department of Human Settlements and Urban Development (DHSUD) is exempt from income tax and creditable withholding tax on its income received directly in connection with the mentioned project. Moreover, sale of house and lot and other residential dwellings with selling price of not more than Php 3,199,200 is VAT exempted. (BIR Ruling No: Certificate of Tax Exemption No: PSH-148-2022, PSH-158-2022, PSH-162-2022, PSH-168-2022, PSH-169-2022)
- The purchases of goods/articles under the construction/development of NHA’s Socialized Housing Program is exempt from project-related income tax, creditable withholding tax and value-added tax on its income received directly in connection with the mentioned project. However, the purchases of goods/articles of the said company shall be subject to VAT, even if the said purchases are to be used for social housing projects and must issue VAT exempt official receipts on its gross receipts from the said socialized housing project. (BIR Ruling No: Certificate of Tax Exemption No: NSH-157-2022, NSH-159-2022, NSH-163-2022)
- Sale of house and lot under economic and low-cost housing project of a company duly registered with the Board of Investments under Executive Order (EO) No. 226 is exempt from income tax and creditable withholding tax on its income received directly in connection with the mentioned project. In addition to that, sale of house and lot and other residential dwellings with selling price of not more than Php 3,199,200 is VAT exempted. (BIR Ruling Nos: Certificate of Tax Exemption No: BOI-LEH-149-2022, BOI-LEH-150-2022, BOI-LEH-151-2022, BOI-LEH-156-2022)
- A sale of parcel of land by private individuals in favor of homeowners association under a Community Mortgage Program (CMP), is not subject to capital gains tax pursuant to Section 32 (b) of Republic Act (RA) No. 7279, as amended by RA No. 10884.
- The transaction is, however, subject to documentary stamp tax under Section 196 of the National Internal Revenue Code (Tax Code) of 1997, as amended.
- Registry of Deeds shall transfer the title only if Certificate Authorizing Registration is used by the BIR. (BIR Ruling No: Certificate of Tax Exemption No: CMP-152-2022, CMP-161-2022, CMP-164-2022, CMP-165-2022, CMP-166-2022)
- A non-stock and non-profit corporation with primary purpose of being an educational institution is exempted from income tax and VAT only on revenues or receipts generated from:
- Tuition fee and other school fees: and
- Income derived from the operation of cafeterias/canteen, dormitories, and bookstores located within its premises, owned and operated by the corporation to be actually, directly and exclusively used for educational purposes.
- However, the corporation is liable to all other including those below:
- Income derived from any of its properties, real or personal, or any activity conducted for profit, which income should be returned for taxation unless they are actually, directly and exclusively used for educational purposes;
- If engaged in the sale of goods or services in the course of a business pursuit, including transactions incidental thereto, its revenues derived therefrom shall be subject to the 12% VAT, in case the gross receipts from such sales exceed Three Million Pesos (Php3,000.000.00), or the 3% percentage tax, if the gross receipts do not exceed Php3,000.000.00;
- Acts as an employer and its employees receive compensation income subject to the withholding tax; (BIR Ruling Nos: Certificate of Tax Exemption No: SH30-153-2022, SH30-154-2022, SH30-155-2022)
- The Deed of Absolute Donation being a gift in favor of a religious corporation is exempt from the payment of the donor’s tax pursuant to Section 101 (A) (1) of the Tax Code, subject to the condition that not more than thirty percent (30%) of said gift shall be used by the done for administration purposes.
- The Deed of Donation is likewise not subject to the Documentary Stamp Tax (DST) under Sec. 196 but only to the DST of P15.00 imposed under Sec. 188.(BIR Ruling No: Certificate of Tax Exemption No: DT-160-2022)
- Borrowing and lending of securities within the borrowing period not exceeding two years and the delivery of the collateral are exempt to capital gains tax (CGT), stock transaction tax and documentary stamp tax (DST)
- The Lender/Agent and Borrower/ Agent are required to submit bi-annually reports of outstanding and liquidated Securities Borrowing and Lending (SBL) Transactions and Stock Returns within the period provided under (RR) No. 10-2006.
- Violation of these requirements shall subject the transaction to taxes.
- Moreover, the transaction shall also be subject to the penalties provided under Sections 248 and 249. (BIR Ruling No: MSLA-167-2022)
- Joint ventures or consortium formed for the purpose of undertaking construction projects or engaging in petroleum, coal, geothermal and other energy operations pursuant to an operating or consortium agreement under a service contract with the government is not taxable as a corporation for complying with the conditions:
- The Joint Venture is for the undertaking of construction project;
- The Joint Venture involves joining or pooling of resources by licensed local contractors (licensed as general contractor by the PCAB);
- The local contractors are engaged in construction business;
- The Joint Venture itself is duly licensed by the PCAB; and therefore not subject to the corporate income tax.
- Moreover, the gross payments are likewise not subject to the two percent (2%) creditable withholding tax, and being exempt from corporate income tax, is not required to file quarterly and final adjustment returns.
- However, the co-ventures are separately subject to the regular corporate income tax imposed on their taxable income during each taxable year derived by the construction project and the net income of the co-ventures derived from is subject to the creditable withholding tax imposed.
Finally, the co-ventures are required to enroll themselves to the Bureau of Internal Revenue’s Electronic Filing and Payment System (eFPS). The enrollment should be done at the Revenue District Office (RDO) where they are registered as taxpayers. (BIR Ruling No: JV-170-2022)
