BIR RULINGS
- Income received directly in connection with the construction/development of socialized housing units under the Government’s Socialized Housing Program is exempt from project-related income taxes, creditable withholding tax, and value added tax (VAT).
- However, the purchases of goods/articles shall be subject to VAT, even if the said purchases are to be used for the socialized housing project. (BIR Ruling No. PSH-267-2021, July 26, 2021).
- COMELEC is exempt from 12% VAT or 3% percentage on its local purchases of goods and services as well as importation of goods that will be used relative to the conduct of elections.
- Thus, the suppliers/sellers of goods and services to COMELEC cannot shift or pass on any VAT or percentage to COMELEC on the latter’s purchases of goods and services that will be used in the election.
- The exemption may only be invoked by COMELEC and does not extend to suppliers with respect to the latter’s purchases and other contractual arrangements.
- The supplier is not entitled to the tax exemption but shall be considered as the end-user who will bear or assume the burden of the tax (VAT or Percentage tax). The suppliers/sellers of goods and services to COMELEC cannot shift or pass on any VAT or percentage tax to COMELEC on the latter’s purchases of goods and services that will be used in the elections. (BIR Ruling No. OT-268-2021, July 25, 2021).
- An entity engaged by the National Housing Authority (NHA), is exempt from project-related taxes/creditable withholding tax (CWT). Income received directly in connection with the conversion and enhancement of developed lots and completed housing units shall be exempt from value-added tax (VAT). The exemption from VAT shall only apply to sale of house and lot and other residential dwellings valued at P3,199,200.00. However, an indirect tax shall be subject to VAT. (BIR Ruling NSH-269-2021; NSH-270-2021; NSH-271-2021; NSH-272-2021, July 25, 2021).
- A Non-Stock Savings and Loan Association (NSSLA), a non-profit organization, which obtains funds exclusively from its members and does not transact business with the general public, it is considered view that Gross Receipts Tax on its lending activities is not warranted for as long as such transactions do not fall under the contemplated activities as defined by law and its rules and regulations. (BIR Ruling No. OT-274-2021, July 27, 2021).
- If the company maintains a reasonable private retirement plan, the retirement benefits that will be received by the employees shall be exempt from income tax, provided that the two (2) conditions are met: (1) the employee had been in the service of the same private firm for the last 10 years and (2) he is at least 50 years old at the time of retirement.
- If the retirement plan was not approved by the BIR, the Labor Code shall apply, which provides that the retirement benefit shall be exempt from income tax provided that the employee had been in service for at least 5 years and at least 60 years old but not beyond 65 years old at the time of retirement. (BIR Ruling No. OT-281-2021, August 2, 2021)
- 6% capital gains tax is imposed in the sale , exchange or other disposition of the real property located in the Philippines.
- Disposition includes all kinds of disposition unless specifically excluded by the law or subject to another tax. Lot Swapping Agreements is considered a disposition subject to capital gains tax and documentary stamp tax. (BIR Ruling No. OT-291-2021, August 3, 2021;BIR Ruling No. OT-281-2021)
- The following are conditions in order that the earnings of a retirement fund may be exempt from income tax (1) the contributions are made to the trust by the employer, or employees, or both for the purpose of distributing to such employees the earnings and principal of the fund accumulated by the trust and 2) no part of the income to be used for or diverted to purposes other than the exclusive benefit of the employees.
- It is still however subject to other applicable taxes such as DST, stock transaction tax (BIR Ruling OT-282, August 2, 2021)
- Income derived by inventors of patented products shall be exempted from income tax only during the first ten (10) years from the date of first sale subject to the rules of the Department of Finance.
- The technologies, manufacture or sale shall be also exempt from payment of license, permit fees, custom duties and charges on imports.
- The same privilege shall be extended to the legal heir or assignee upon the death of the inventor, and not for any other entity that commercially produces and distributes the invented products.
- Any income received by the entity from such production/distribution/marketing is subject to the payment of appropriate taxes (BIR Ruling No. INV-292-2021, August 2021)
