COURT OF TAX APPEALS DECISIONS
An assessment is void for violating due process when the BIR issues a Formal Letter of Demand/Final Assessment Notice (FLD/FAN) before the lapse of the 15-day period to respond to a Preliminary Assessment Notice (PAN). The BIR must observe due process by granting the taxpayer 15 days from receipt of the PAN to file a response before issuing a FLD/FAN. The Court emphasized that the taxpayer must be afforded the full 15-day period to respond to the PAN, and failure to do so renders the subsequent assessment void. (CIR v. D.M. Wenceslao & Associates, Inc., CTA EB No. 2802, CTA Case No. 9764, February 6, 2025)
A petition filed by the BIR without written authorization from the Office of the Solicitor General is invalid and only the Solicitor General, as a general rule, may represent the government in appellate proceedings. Under established jurisprudence and the general rule that only the Office of the Solicitor General (OSG) is authorized to represent the government in appellate proceedings—including those involving the Bureau of Internal Revenue (BIR)—a petition filed without the OSG’s authorization is not validly instituted. While Section 220 of the Tax Code allows BIR legal officers to initiate civil and criminal actions, the Supreme Court in CIR v. La Suerte, G.R. No. 144942, July 4, 2002, clarified that this does not extend to appellate proceedings. In this case, the Commissioner of Internal Revenue (CIR) filed a Petition for Review without any written authorization or deputization from the OSG. As none of the recognized exceptions apply, and no proof of OSG authority was presented, the Petition was deemed invalidly filed, resulting in the finality of the assailed Decision and Resolution. (CIR v. One Cypress Agri-Solution, Inc. CTA EB No. 2813, CTA Case No. 9937, March 5, 2025)
Failure to submit proof of actual receipt or required documents —such as return cards, postmaster certifications, or a sworn service report—rendered the FLD/FANs void for violating due process requirements. The issuance of a valid assessment requires that the taxpayer be duly notified through proper service of the FLD/FAN, thereby ensuring the taxpayer’s right to due process is upheld. In this case, while the BIR claimed service of the FLD/FANs by registered mail after a failed personal delivery, it merely submitted registry receipts without accompanying return cards, postmaster certifications, or a sworn report detailing the manner, date, and recipient of service as required by regulations. These deficiencies, combined with the express denial of receipt by the taxpayer, failed to overcome the disputable presumption of receipt by mail. Without competent proof of actual receipt or compliance with procedural requirements, the Court found that the BIR did not validly serve the assessment notices, and thus, any resulting assessment is void and unenforceable for lack of due process. (CIR v. One Cypress Agri-Solution, Inc. CTA EB No. 2813, CTA Case No. 9937, March 5, 2025)
Failure to appeal the warrants of distraint and garnishment within the 30-day reglementary period bars the CTA from acquiring jurisdiction over the case. The Court of Tax Appeals has jurisdiction over “other matters arising under the NIRC,” including the issuance of collection remedies such as warrants of distraint and levy (WDL) and garnishment (WOG); however, jurisdiction is also subject to compliance with procedural rules which require the filing of an appeal within 30 days from receipt of the questioned measure — and since petitioner received the WDL and WOG as early as March or April 2022 but only filed the Petition for Review on October 26, 2022, after making belated letter-requests to the Regional Director that did not toll the period, the Court in Division correctly dismissed the case for being filed out of time and for lack of jurisdiction. (Danile N. Matias v. CIR, CTA EB No. 2824, CTA Case No. 11025, March 4, 2025)
An assessment is void for violating due process when conducted by revenue officers not named in a valid LOA and issued by an unauthorized BIR official. Pursuant to Sections 6(A) and 13 of the NIRC of 1997, as amended, and RMO No. 43-90, only revenue officers specifically named in a duly issued Letter of Authority (LOA) by the CIR, Deputy Commissioner, or Regional Director may validly examine a taxpayer’s books; in this case, although the instant LOA authorized Revenue Officers (RO) San Pedro-Anaban, Budano, and Maniego, the audit and issuance of the PAN and FLD/FAN were instead performed by ROs Ancheta and Monforte, who were not named in any valid LOA but merely referenced in a letter signed by Chief of the LT Regular Audit, who lacked authority to issue LOAs, thus rendering the assessment void for violating the taxpayer’s right to due process. (CIR v. Concepcion Industries, Inc., CTA EB No. 2863, CTA Case No. 10305, January 22, 2025)
Lack of due date in the FLD/FAN renders the assessment void. A valid FLD/FAN must include a definite due date to constitute a proper demand for payment and to trigger the accrual of delinquency interest. In this case, the FLD/FAN lacked any indication of a due date, thereby depriving the taxpayer of essential information needed to determine remedies and properly respond to the assessment. This omission constitutes a violation of due process, rendering the assessment null and void and justifying the Court in Division’s ruling enjoining the collection of the assessed amounts. (CIR v. Concepcion Industries, Inc., CTA EB No. 2863, CTA Case No. 10305, January 22, 2025)
The right to collect prescribes when no WDL was served within the 3-year period from the issuance of the assessment. Under Section 203 of the NIRC, as interpreted in CIR v. QL Development, Inc., the BIR must initiate collection of assessed taxes within three years from the date of assessment, unless interrupted by actions specifically enumerated in Section 223(d), such as the valid service of a WDL. In this case, the FLD/FAN was issued on October 15, 2002, but the first valid act of collection—a Warrant of Garnishment dated March 18, 2008—was served 1,981 days later. The November 6, 2003 letter merely reiterated the demand for payment and did not constitute valid collection under the law. As the WDL was served well beyond the 3-year prescriptive period, and no other interrupting act occurred, petitioner’s right to collect had clearly prescribed. (CIR v. Canlubang Waterworks Corporation, CTA EB No. 2917, CTA Case No. 10682, February 27, 2025)
REVENUE ISSUANCES
Revenue Memorandum Circular No. 45, 2025, April 30, 2025
The Bureau of Internal Revenue informs all concerned of the issuance of CDA-DOF-BIR Joint Administrative Order No. 001-2025, which sets the rules for implementing the penalty provision under Section 308 of the Tax Code, as amended by the CREATE Act and implemented by DOF-DTI JAO No. 001-2023; the Order takes effect on March 28, 2025, as confirmed by FIRB Advisory 002-2025, following its publication on March 13, 2025.
Summary of CDA-DOF-BIR Joint Administrative Order No. 001-2025:
| Section | Subject | Details |
| Scope | Covered Parties | · CDA-registered cooperatives with valid CTEs availing tax incentives
· CDA officials/employees responsible for reporting |
| Reportorial Requirements | Reports to be Submitted | By Cooperatives:
· ATIR (Annex A) — within 30 days from tax return filing deadline · ABR (Annex B) — on or before May 15 annually By CDA: · Consolidated ATIR (Annex C) · Consolidated ABR (Annex D) · Master list (Annex E) — by Jan 30 yearly |
| Penalties (for Cooperatives) | Based on Offense | · 1st Offense: ₱100,000 fine
· 2nd Offense: ₱500,000 fine · 3rd Offense: Revocation of CTE by BIR |
| Penalties (for CDA Officials) | Sanctions | · Fine: 1 to 6 months’ salary
· Suspension: Up to 1 year · Other administrative/criminal penalties as applicable |
| Effect of CTE Revocation | Tax Liability | · Liable for all taxes, surcharges, interest, and penalties
· May re-apply for CTE after prohibition period and upon compliance |
| Installment Payments | For Monetary Penalties | · Allowed for up to 2 years
· Up to 3 years for micro-cooperatives with proven financial incapacity |
| Waiver of Penalties | Exemptions | Granted if due to force majeure/Acts of God, upon submission of:
· Application letter · LGU/Barangay Certificate · Supporting documents |
| Request for Reconsideration | One-time Option | Allowed once during cooperative’s existence for valid grounds
· Final approval by CDA Board |
| Grace Period | Request by CDA | · Up to 30 days for submission of Annexes C, D, and E
· Must request at least 5 days before deadline |
| Transitory Provisions | Implementation Phases | For Taxable Year 2023:
· ATIR/ABR due 60 days from effectivity · CDA reports due 90 days from effectivity Penalty Application: · 2024 – Large & Medium cooperatives · 2025 – Small cooperatives · 2026 – Micro-cooperatives |
| Effectivity | Effective Date | March 28, 2025 (15 days after publication in The Philippine Star on March 13, 2025) |
Revenue Memorandum Circular No. 47, 2025, May 7, 2025
The BIR clarifies the VAT obligations of Nonresident Digital Service Providers (NRDSPs). It confirms registration, filing, payment, invoicing, and enforcement rules related to VAT on cross-border digital services consumed in the Philippines.
| Topic | Clarification / Requirement |
| Registration Requirement | All NRDSPs must register with the BIR, whether B2B, B2C, or both |
| Filing Obligation | All NRDSPs must file VAT returns to report digital transactions |
| Registration Method | Initially via ORUS; later through the VAT on Digital Services (VDS) Portal |
| Registration Deadline | On or before June 1, 2025 (120 days from RR 3-2025 effectivity) |
| Required Documents | Government-issued registration documents from country of origin |
| Local Representative | Not mandatory; may appoint a resident third-party service provider |
| Manual Registration | Allowed via BIR RDO No. 39–South Quezon City |
| Tax Type and Liability | Registered for 12% VAT on gross sales |
| Noncompliance Penalty | Subject to fines and possible suspension of operations |
| Proof of Registration | BIR Form No. 2303 (Certificate of Registration) with TIN |
| B2B Treatment | VAT is withheld and remitted by the PH buyer under reverse charge |
| B2C Treatment | NRDSP must directly file and pay VAT via simplified regime |
| Marketplace Transactions | If platform controls key aspects, it is deemed the DSP and liable |
| Invoicing Requirement | No format required; invoice must contain transaction details and VAT info |
| VAT Applicability Date | Effective June 2, 2025 (120 days from RR effectivity) |
| VAT Return Form | Use BIR Form No. 2550-DS for filing/payment; B2B buyers use 1600-VT |
| Input Tax Credit | Not allowed for NRDSPs |
| Refund for Erroneous VAT | Not allowed; may carry over excess to next return |
| Marketplace Liability | Not liable if payment goes directly to NRDSP |
| Service Fees via Marketplace | Still subject to VAT even if tied to physical goods |
| Scope of Taxable Digital Services | Includes online platforms, marketplaces, search engines, cloud services, media, etc. |
| Example – Teleconsultation | Online medical platforms are subject to VAT as digital service |
| Educational Institutions | No tax exemption certificate needed—DepEd/CHED/TESDA recognition suffices |
| RBEs and EOEs | Exempt if digital services are directly attributable to registered activities |
| Business Verification | Buyer may be verified via TIN, questionnaires, or registration documents |
| Substantiating Input VAT | Buyer may use filed BIR Form 1600-VT |
| Advance Payments for 2025 | VAT still applies to services rendered from June 2, 2025, onward |
| Cost Sharing Arrangements | Shared costs for digital services consumed in PH are subject to VAT |
Revenue Memorandum Circular No. 48, 2025, May 8, 2025
This BIR provides clear guidance on the correct foreign exchange (forex) rates to use in computing excise tax on mineral products, covering both export and domestic sales.
| Particulars | Provision | Forex Reference | Basis Date | Other Notes |
| Export Sales – Provisional Excise Tax | For export permit application | BAP Spot Rate | Date of export permit application | Used for temporary computation |
| Export Sales – Final Excise Tax | After final assay and invoice | BAP Weighted Average Rate | Date of shipment | Shipment is deemed on bill of lading date |
| Export Sales – Final Invoice Deadline | Invoice issuance | N/A | Within 90 days from shipment date | Based on actual market value |
| Domestic Sales – Provisional Excise Tax | For transport permit (when denominated in foreign currency) | BAP Spot Rate | Date of transport permit application | Applies to local sales to processors |
| Domestic Sales – Final Excise Tax | After final assay and invoice | BAP Weighted Average Rate | Date of final sales invoice | Adjusts based on actual values |
| When is Product Considered Shipped | Determination of shipment date | N/A | Date of bill of lading | Used for final tax basis |
| Refund Due to Overpayment | Allowed if final tax is lower than provisional | N/A | Refund claim allowed under Section 229, NIRC | Must be supported by documents |
| Refund Filing Deadline | For excess excise tax payments | N/A | Within 2 years from date of payment | Subject to BIR refund rules |
Revenue Memorandum Circular No. 49, 2025, May 7, 2025
- This BIR announces the release of the Offline eBIRForms Package Version 7.9.5, which may now be downloaded from the BIR website.
- The new version includes updated tax forms and multiple enhancements such as additional Alphanumeric Tax Codes (ATCs), a new treaty code for Brunei, and bug fixes. Certain forms are available for filing only through the Electronic Filing and Payment System (eFPS).
Revenue Memorandum Circular No. 52, 2025, May 30, 2025
This BIR announces the release of BIR Form No. 2550-DS (January 2025 version), designed specifically for nonresident digital service providers (NDSPs) to file their Value-Added Tax (VAT) returns, in line with Republic Act No. 12023 and Revenue Regulations No. 3-2025. The BIR will issue a separate revenue issuance containing detailed guidelines on the filing and payment procedures.
| Provision | Details |
| Form Introduced | BIR Form No. 2550-DS (Jan 2025) |
| Purpose | For use by Nonresident Digital Service Providers in filing VAT returns |
| Legal Basis | Republic Act No. 12023 and Revenue Regulations No. 3-2025 |
| Coverage | VAT due from digital services provided by nonresident entities to persons in the Philippines |
| Implementation Notes | Filing and payment procedures to be covered in a separate revenue issuance |
BIR RULINGS
The transfer of the club share from one trustee to another is not subject to CGT, DST, or donor’s tax as there is no consideration or change in beneficial ownership, which remains with the appointing entity. Under the Tax Code of 1997 and relevant jurisprudence, the transfer of the Manila Polo Club, Inc. (MPCI) proprietary share from one trustee to another is not subject to capital gains tax (CGT), documentary stamp tax (DST), or donor’s tax, as there is no change in beneficial ownership. Applying the Supreme Court’s ruling in Sime Darby Pilipinas, Inc. v. Mendoza, HSBC remains the beneficial owner of the MPCI share while the legal title is merely held by the trustee to comply with MPCI’s requirement that only natural persons may be registered members. The assignment is solely to allow the trustee to enjoy club privileges during his employment with HSBC, with no consideration given and no intent to donate. As clarified under Revenue Regulations No. 13-2004, DST is not due since there is no transfer of beneficial ownership, and similarly, donor’s tax does not apply as there is no intent of liberality or patrimonial increase on the part of the trustee. (BIR Ruling No. OT-35-2024, September 4, 2024; BIR Ruling No. OT-38-2024, September 4, 2024; BIR Ruling No. OT-39-2024, September 11 2024; BIR Ruling No. OT-40-2024, September 11, 2024; BIR Ruling No. OT-41-2024, September 11, 2024)
Payments to a non-resident consultant for services performed entirely abroad—including reports, online workshops, and virtual meetings—are not subject to Philippine income tax, withholding tax, or VAT, as the income is considered foreign-sourced under the Tax Code. Under Sections 23(D), 25(B), and 42(C)(3) of the Tax Code, non-resident alien individuals not engaged in trade or business in the Philippines are taxable only on income derived from sources within the Philippines, with compensation for services being considered foreign-sourced if the services are performed outside the country. Section 108(A) similarly limits VAT to services performed within the Philippines. Applying these provisions, the compensation paid to the non-resident Canadian consultant under the Renewal Contract and Consultancy Services Agreement—covering advisory services, reports, virtual workshops, and communications conducted entirely outside the Philippines—is not subject to Philippine income tax, withholding tax, or VAT, as the income is foreign-sourced and the services were performed abroad. However, any portion of the services rendered physically within the Philippines, such as in-country missions or trainings, would be subject to Philippine income tax, withholding tax, and VAT. (BIR Ruling No. OT-049-2024, October 7, 2024)
BIR DEADLINES FROM JUNE 23 TO JUNE 30, 2025. A gentle reminder on the following deadlines, as may be applicable:
| DATE | FILING/SUBMISSION |
| June 25, 2025 | SUBMISSION – Quarterly Summary List of Sales/Purchases/Importations by a VAT Registered Taxpayer – Non-eFPS Filers – Fiscal Quarter ending May 31, 2025
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, 2025
e-FILING/FILING & e-PAYMENT/PAYMENT – BIR Form 2550Q (Quarterly Value-Added Tax Return) – eFPS & Non-eFPS Filers – Fiscal Quarter ending May 31, 2025
BIR Form 2551Q (Quarterly Percentage Tax Return) – Fiscal Quarter ending May 31, 2025 |
| June 29, 2025 | e-FILING/FILING & e-PAYMENT/PAYMENT – 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, 2025 |
| June 30, 2025 | ONLINE REGISTRATION (thru ORUS) – Computerized Books of Accounts and Other Accounting Records – Fiscal Year ending May 31, 2025
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| 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, 2025
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| Manufacturers’/Assemblers’/Importers’ Sworn Statement of each Particular Brand/Model of Automobile, Alcohol Products, Tobacco Products and Sweetened Beverage Products -1st Semester of 2025
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| 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, 2025
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| 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 – Fiscal Year ending February 28, 2025
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| e-SUBMISSION – Quarterly Summary List of Sales/Purchases/Importations by a VAT Registered Taxpayers – eFPS Filers – Fiscal Quarter ending May 31, 2025 |