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July 22, 2026 Tax Updates

COURT OF TAX APPEALS DECISIONS

PAGCOR LICENSEES OPERATING IN THE CLARK FREEPORT ZONE ARE SUBJECT TO THE SPECIAL 5% TAX ON GROSS INCOME EARNED (3% NATIONAL GOVERNMENT, 2% LGU) UNDER THE GOVERNING CFZ LAW, RATHER THAN THE GENERAL 5% FRANCHISE TAX UNDER THE PAGCOR CHARTER, MAKING THE CONTRARY PORTION OF RMC NO. 32-2022 NULL AND VOID; SEE DISSENTING OPINION. PAGCOR is subject to a 5% franchise tax on gross revenues or earnings from its gaming operations in lieu of all other national and local taxes, and this tax exemption extends to its licensees and contractees with respect to income derived from casino operations; however, PAGCOR licensees located within a special economic zone or freeport zone are likewise entitled to the special tax regime applicable to registered business enterprises in that zone. Applying these principles, although the PAGCOR Charter extends the 5% franchise tax regime to PAGCOR licensees, taxpayers here were registered businesses operating within the Clark Freeport Zone (CFZ), whose governing law grants registered business enterprises exemption from national and local taxes in exchange for a 5% tax on gross income earned (GIE), with 3% remitted to the National Government and 2% to the relevant LGU. The CFZ tax regime is a special law specifically applicable to businesses located in the zone and therefore prevails over the general 5% franchise tax regime under the PAGCOR Charter. The taxpayer’s Certificates of Registration and Tax Exemption likewise confirmed their entitlement to the 5% GIE regime. Applying the 5% franchise tax to PAGCOR licensees in the CFZ, while subjecting other registered businesses in the same zone to the 5% GIE tax, would defeat the legislative intent to provide uniform tax incentives to businesses located in the country’s ecozones and freeport zones. Thus, the assailed portion of RMC No. 32-2022, which provided that the gaming income of PAGCOR licensees in ecozones or freeport zones remains subject to the 5% franchise tax instead of the applicable 5% GIE regime, is null and void for being inconsistent with the governing law; accordingly, the taxpayers’ gaming income remained subject to the 5% tax on gross income earned, and not the 5% franchise tax. Dissenting Opinion:  The 5% franchise tax applies to the gaming revenues of PAGCOR licensees in lieu of other national and local taxes, even where the licensee operates in an ecozone or freeport. RMC No. 32-2022 merely clarified that the gaming income of PAGCOR licensees remains subject to the 5% franchise tax and not to the GIT, ITH, or corporate income tax, even if the licensee is located in an ecozone or freeport. The PAGCOR Charter prevails over the BCDA incentives regime, as it is the special law specifically governing the gaming industry. Lastly, the PAGCOR Charter governs the tax treatment of gaming income; while The BCDA regime may continue to apply to non-gaming income or matters not specifically covered by the PAGCOR Charter [BIR et al. v. BB International Leisure and Resort Development Corporation, et al., CTA EB No. 2975 (CTA Case No. 10841), February 23, 2026]

A CONDOMINIUM CORPORATION IS NOT SUBJECT TO LBT ABSENT PROOF OF A PROFIT-ORIENTED BUSINESS, AS ASSOCIATION DUES AND ASSESSMENTS COLLECTED SOLELY TO FUND THE MAINTENANCE AND ADMINISTRATION OF COMMON AREAS ARE NOT COMMERCIAL REVENUES; THUS, THE TAXPAYER WAS NOT A TAXABLE CONTRACTOR UNDER THE TAGUIG REVENUE CODE. The liability for Local Business Tax (LBT) presupposes that the taxpayer is engaged in “business,” meaning trade or commercial activity regularly pursued as a means of livelihood or with a view to profit; therefore, the mere receipt of money or collection of assessments does not, by itself, establish that an entity is engaged in a taxable business. Here, the taxpayer, a condominium corporation organized under the Condominium Act, was legally restricted to holding the common areas, managing and administering the condominium project, and undertaking acts necessary, incidental, or convenient to those purposes. Its Articles of Incorporation and By-laws were consistent with these statutory limitations and did not authorize activities directed toward the pursuit of livelihood or profit. The association dues, membership fees, and other assessments collected from unit owners were likewise not revenues earned from a commercial enterprise or consideration for services rendered for a fee; rather, they constituted a common fund used to pay for the maintenance, repair, improvement, reconstruction, and administrative expenses of the condominium project and common areas for the benefit of the unit owners. Consequently, the taxpayer could not be treated as a contractor under the Taguig Revenue Code merely because it collected these assessments, and the LGU failed to present sufficient evidence that the taxpayer was engaged in any other profit-oriented activity. The Supreme Court has recognized that condominium corporations generally do not engage in trade or business when managing and maintaining common areas for the benefit of unit owners and are therefore generally not subject to local business taxation, irrespective of a local ordinance attempting to impose such tax. Although a condominium corporation may potentially become liable for LBT if it is proven to have engaged in activities for profit, no such activities were alleged or established in this case; the assessment was based solely on the collection of assessments used to defray authorized condominium expenses.  [City Treasurer of Taguig City v. Cedacrest Condominium Corporation, CTA EB No. 3061 (RTC SCA No. 291), March 31, 2026; see also City Treasurer of Taguig City v.  Rosewood Pointe Residences Condominium Corporation, CTA EB No. 3008, (SCA Case No. 298 and MeTC Civil Case No. 22-4575) November 27, 2025]

A HOLDING COMPANY THAT MERELY OWNS SHARES AND RECEIVES DIVIDENDS, WITHOUT BSP AUTHORIZATION OR REGULAR FINANCIAL-INTERMEDIARY ACTIVITIES, IS NOT A BANK, FINANCIAL INSTITUTION, OR QUALIFIED NBFI SUBJECT TO LBT ON GROSS RECEIPTS UNDER THE LGC; ORDINANCE CANNOT EXPAND THE LGU’S DELEGATED TAXING POWER. An LGU may impose LBT on the gross receipts of banks and other financial institutions, including qualified non-bank financial intermediaries (NBFIs), but the taxing power of an LGU is merely delegated and must be strictly construed, with any doubt resolved against the municipality. LGC permits the imposition of LBT on the specified gross receipts of banks and other financial institutions, while LGU also defines the entities covered, and it generally prohibits LGUs from imposing income taxes, except on banks and other financial institutions. An entity is considered an NBFI only if the requisites for such classification concur, including BSP authorization to perform quasi-banking functions, principal functions involving the lending, investing, or placement of funds or evidence of indebtedness or equity, and the regular and recurring performance of recognized financial intermediary activities. Applying these rules, the taxpayer’s ownership of shares in a corporation and receipt of dividends did not make it a bank, financial institution, or NBFI because taxpayer was not authorized by the BSP to perform quasi-banking functions and did not regularly or recurringly receive funds from one group for lending or investment with another, principally acquire debt or equity securities using funds received, or borrow against, lend on, or trade in debt or equity securities. The taxpayer was instead a holding company, whose principal purpose was to hold shares in another company to control its policies, and any investment activity was merely incidental to that purpose. The Court therefore distinguished the taxpayer  from financial intermediaries that actively deal with public funds. Consequently, the assessment of LBT on the taxpayer’s dividends had no legal basis, and the local ordinance could not expand the taxing authority granted to the City by the LGC. [Atty. Voltaire Enriquez in his capacity as the City Treasurer of Taguig City v. La Lumiere Holdings, Inc., CTA AC No. 346, December 16, 2025; see also Enriquez v. Rice Creek Holdings, Inc., CTA AC NO 322 (RTC Civil Case No. 663) November 12, 2025, Enriquez v. Chrismon Investments, Inc., CTA AC No 323, February 4, 2026]

REVENUE ISSUANCES

Revenue Memorandum Order No. 14-2026

Pursuant to the Bureau of Internal Revenue’s authority to regulate tax administration, Revenue Memorandum Order (RMO) No. 14-2026 partially revokes certain procedural provisions of RMO No. 4-2025 (particularly Section E) regarding the verification and handling of Cannot Be Located (CBL) taxpayers.

APPLICATION OF FACTS
    Revenue Officers (ROs) must immediately exclude the revoked RMO No. 4-2025 procedures when auditing, verifying, or handling taxpayers flagged as absent or missing from their registered business addresses.
REVOKED SECTION
  • Validate the taxpayer’s non-existence/untraceability and secure supporting certifications and documents.
  • If validation is negative and the taxpayer has no distrainable or leviable property, recommend classification as a “Suspense Account” (11-F-A).
  • Approved CBL dockets remain with the concerned office and in the AR/DA Inventory List for continuing monitoring.
  • Dockets tagged 11-F-A may be recommended for write-off after three (3) consecutive negative validations, with at least twelve (12) months between qualifying validations. The initial validation is not counted.
  • Upon approval of the write-off recommendation and completion of validation, issue an Authority to Cancel Assessment (ATCA). Physical dockets must be kept by the RMD/AHRMD for seven (7) years.
  • If the taxpayer resurfaces, verify the reporting office, require the prescribed Affidavit of Undertaking, update or untag the taxpayer’s registration, and continue collection remedies. Any ATCA previously issued shall be revoked, if applicable.
  • No taxpayer may be reported as CBL, and no ATCA may be issued, without the required review and approval. Written-off dockets must be microfilmed and retained for future reference.

REVENUE ISSUANCES

Revenue Memorandum Order No. 015-2026

Under the tax authority’s power to streamline administrative procedures, the Bureau of Internal Revenue (BIR) reiterates and standardizes the guidelines for processing Freedom of Information (FOI) requests to ensure uniform implementation and eliminate processing delays.

COVERED ISSUANCE All requests to any office under EO No. 2 s. 2016
STANDARD PROCEDURE – FOI Receiving Officer will be designated (initial point of contact for FOI request)
– FOI Request form to be accomplished. Purpose must be stated (general purpose i.e. for information, for research not allowed)
GROUNDS TO DENY REQUEST
  1. Incomplete request
  2. Material misrepresentation
  3. BIR’s lack of custody of the information
  4. Vexatious request
  5. Out of scope request
FOI DECISION MAKER WILL DENY OR APPROVE Grounds to deny (other than the above):

  1. 60-day period to provide clarification lapsed
  2. Information is covered by Executive privilege
  3. Privileged information relating to National Security, Defense or Relations:
  4. Information related to Law enforcement and protection of public and personal safety
  5. Confidential information
  6. Prejudicial premature disclosures

Revenue Memorandum Circular No. 75-2026 

Under the tax authority’s power to streamline administrative procedures, the Bureau of Internal Revenue (BIR) consolidates and clarifies the guidelines for processing the One-Time Transaction (ONETT) Computation Sheet (OCS) and the electronic Certificate Authorizing Registration (eCAR) to ensure uniform implementation and improve the ease of doing business. 

COVERED ISSUANCE
  1. ONETT Transactions
  2. Sale of Real Property Considered as Capital and Ordinary Asset
  3. Sale, Transfer or Assignment of Stocks Not Traded in the Stock Exchange
  4. Estate
MODES OF FILING AND PAYMENT OF RELATED TAXES Filing: Electronically; manual, if electronic mode is unavailable
Payment – manual or electronic, unless eFPS filer (except not available); for manual payment – any AABs
WHERE TO PROCESS ECAR
  1. Sale of real property (capital or ordinary) – where property is located
  2. Shares not traded in local stock exchange – residence of the transferor-individual as indicated in the BIR system; place of registration for non-individual
  3. Donation – same with transfer of shares not listed in stock exchange
  4. Estate – where Estate of the TIN is issued; if deceased has registered business – where business is registered (because it is where the TIN was secured); if no registered business, RDO where administrator or heirs intend to apply for the issuance of eCAR
INSTANCES OF ANTEDATED SALE
  1. Documents dated before September 7, 1979 or effectivity of Capital Gains Tax Law
  2. Documents dated prior to effectivity of CWT regulations
  3. Documents dated prior to effectivity of current zonal values
  4. Proof of no ante-dating: cancelled checks, invoices, CTS, certification from court or notarial archives
WHOSE TIN IS REQUIRED
  1. Sale of property – transferor and transferee
  2. Donation – Donor and Donee
  3. Estate – Deceased, heirs, administrator (if any)
  4. Spouse’s TIN not required, except when property sold or donated is conjugal or community or spouse is a party to the transaction (buyer or donee)
LOST eCAR Taxpayer to request for reprinting of the same eCAR. Taxpayer to submit written request, original copy of the supporting documents and payment of certification fee.
PROPERTIES ACQUIRED BY BANKS VIA FORECLOSURE SALE
  • Considered ordinary asset
  • Banks not considered habitually engaged in the real estate business for purposes of determining the withholding tax rate
REAL PROPERTIES SOLD BY REAL ESTATE LESSORS
  • Automatically deemed ordinary asset (all properties for lease/rent or being offered for lease/rent or for use in trade or business)
NO DELAY OF eCAR RELEASE IF VAT IS NOT YET PAID UPON APPLICATION
  • No proof of VAT payment is required.
  • eCAR processing office to inform RDO having jurisdiction over the seller to verify and assess VAT, if warranted.
BUYER ASSUMES CGT Amount of tax should not be added in the selling price for purposes of determining the CGT Tax Base; computation is based on higher between Selling price or FMV, whichever is higher.
DST ON INSTALLMENT SALE COVERED WITH CTS DST to accrue upon execution of DOAS; but tax base is at the time when CTS was executed.
DACION EN PAGO Ordinary asset – Taxes applicable: CWT, VAT and DST
Capital asset – Taxes applicable: CGT and DST
INSPECTION REQUIRED
  1. Conflict of data as to the existence of the improvement in documents presented
  2. Taxpayer’s invocation of special law that will result in payment of a lesser tax
  3. To be conducted within the processing period and should not delay the issuance of eCAR
FORECLOSURE SALE CGT is due 30 days from expiration of redemption period/judicial confirmation/registration of the certificate of sale.

Judicial foreclosure involving Bank-mortgagee – redemption period is 1 year from registration of certificate of sale; if non-bank – CGT is due 30 days from confirmation of the foreclosure of sale by the court.

Extrajudicial foreclosure – redemption period is 1 year from registration of the certificate of sale.

Extrajudicial foreclosure where mortgagor is a juridical person and mortgagee is a bank – redemption period shall last until the registration of the certificate of sale, which shall in no case be later than 3 months after the foreclosure, whichever is earlier.

CWT – 10 days (following end of the month in which the redemption period expires, judicial confirmation of the foreclosure sale, or registration of the certificate of sale, as the case may be).

DST – 5 days (following the end of the month; reckoning point – same as CWT).
PRIOR CANCELLATION OF DECEDENT’S TIN BEFORE ESTATE PROCESSING Not required; can be accomplished parallel to the processing of the estate; issuance of estate TIN is not contingent on the cancellation of the TIN of the decedent with business.

Estate of deceased person is issued a TIN separate from TIN of the deceased person.

Closure of decedent’s business with BIR is not required prior to the filing of estate tax return.

BIR DEADLINES FROM JULY 20, 2026 TO JULY 26, 2026. A gentle reminder on the following deadlines, as may be applicable:

DATE FILING/SUBMISSION
JULY 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 June 30, 2026

SUBMISSION – Quarterly Report of Printer – For the Quarter ending June 30, 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 June 2026
JULY 25, 2026 SUBMISSION – Quarterly Summary List of Sales/Purchases/Importations by a VAT Registered Taxpayers. Non-eFPS Filers – For the Quarter ending June 30, 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 June 30, 2026

e-FILING & PAYMENT (Online/Manual) – BIR Form 2550Q (Quarterly Value-Added Tax Return). eFPS & Non-eFPS Filers – For the Quarter ending June 30, 2026

e-FILING & PAYMENT (Online/Manual) – BIR Form 2551Q (Quarterly Percentage Tax Return). eFPS & Non-eFPS Filers – For the Quarter ending June 30, 2026

e-FILING & PAYMENT (Online/Manual) – BIR Form 2550-DS (Value-Added Tax (VAT) Return for Nonresident Digital Service Provider). For the Quarter ending June 30, 2026

e-FILING & PAYMENT (Online/Manual) – BIR Form 2550-DS (Value-Added Tax (VAT) Return for Nonresident Digital Service Provider). For the Quarter ending June 30, 2026