Competence. Integrity. Commitment.

LOCAL SUPPLIERS OF GOODS/SERVICES IS NO LONGER REQUIRED TO APPLY FOR APPROVAL OF VAT ZERO-RATING WITH THE BIR FOR TRANSACTIONS WITH THE REGISTERED EXPORT ENTERPRISES OF THE LOCAL PURCHASES OF GOODS AND SERVICES DIRECTLY AND EXCLUSIVELY USED IN THE REGISTERED PROJECT OR ACTIVITY. Revenue Regulations No. 2-2023, April 27, 2023

• The BIR amends certain provisions of RR No. 16-2005, as amended by RR No. 21-2021, to implement Sections 294 (E) and 295 (D), Title Xlll of the NIRC of 1997, as amended by RA No. 11534 (CREATE Act), and Section 5, Rule 2 and Section 5, Rule 18 of the CREATE Act IRR, as amended.

PAYMENTS BY NATIONAL GOVERNMENT AGENCIES AND INSTRUMENTALITIES, LOCAL GOVERNMENT UNITS, AND GOVERNMENT OWNED AND CONTROLLED CORPORATIONS SHALL BE SUBJECT TO WITHHOLDING USING ACCRUAL AND NOT CASH BASIS OF ACCOUNTING. RMCNo. 47-2023, May 3, 2023 

The BIR reiterates the proper time of remittance of Withholding Taxes by National Government Agencies and Instrumentalities, Local Government Units, and Government Owned and Controlled Corporations.

NEW FEATURES OF ONLINE REGISTRATION AND UPDATE SYSTEM (ORUS) RMC No. 48-2023, May 5, 2023

• The BIR announces the availability of additional features and functionalities of online application for registration information updates and other online facilities for registration-related transactions through Online Registration and Update System (ORUS)
• Additional features of ORUS effective April 28, 2023

BIR RULINGS

• Donation not in accordance with the National Priority Plan (as certified by NEDA) is subject to limited deductibility or deduction to an amount not exceeding 10% in the case of an individual and 5% in the case of corporation of the taxpayer’s taxable net income as computed without the benefit of this deduction,   (BIR Ruling No:OT-344-2022) 

• The disbursement of Missionary Electrification (ME) subsidy from UCME Fund by National Power Corporation (NPC) to Palawan Power Generation (PPGI) is not considered NPC’s purchase of goods or services and does not fall within the definition of gross income, the ME subsidy should not be subject to VAT, and NPC is not required to withhold the 5% VAT. It is a mere grant or gift of money as an incentive from the government.
  • Moreover, there is no sale of goods by a mere cash disbursement from the UCME Fund. PPGI did not render any form of service in favor of NPC nor did it sell goods in favor of the latter.
  • NPC is a mere administrator of the disbursement of funds from the UCME. As such, it does not make any payment to PPGI. The receipt of subsidy is not a purchase of goods subject to VAT.
  • NPC is not required to withhold 5% VAT
  • PPGI shall issue a VAT-exempt receipt to NPC with respect to the ME Subsidy
  • However, it is important to note that the Electricity Fee, which is part of the ME Subsidy, should still be subject to income tax and VAT. PPGI should also issue a VAT-exempt receipt to NPC with respect to the ME subsidy. (BIR Ruling No: VAT-345-2022)

• The Deed of Conveyance to terminate the trust relationship between the Trustors and Trustee and the consolidation of the legal title and actual ownership over the Subject Properties is a transfer and reconveyance without money reconsideration, and as such not subject to the DST. However, the notarial acknowledgment to such deed is subject to the DST of P30.00. (BIR Ruling No: OT-346-2022)
• Membership fees, assessment dues, and the like are not subject to VAT because in collecting such fees, the club is not selling its service to the members. Conversely, the members are not buying services from the club when dues are paid  (BIR Ruling No: VAT-347-2022)

GUIDELINES IN ISSUING ELECTRONIC LETTER OF AUTHORITY AND TAX VERIFICATION NOTICE, RMO No. 6-2023,  February 9, 2023

• Transactions where audit is required as a condition to issue tax clearance, processing of claims for tax credit/refund and other cases as may be identified by the CIR as priority target for audit/investigation
  • To be covered by eLAs:
    • Claims for tax credit/refund of the following tax types:
      • Excise Tax; or
      • Income Tax (except income tax claims of job order personnel), including final and creditable income tax withheld
      • Request for tax clearance of taxpayers whose sales/receipts for immediately preceding year exceeds P3M or whose gross assets upon retirement exceeds P8M
      • Due to death of taxpayer; or
      • Taxpayers retirement from business; or
      • Taxpayers undergoing merger/consolidation/split-up/spin-off and other types of corporate reorganization
    • Cases returned to the Investigating Office (IO) where the original group supervisor/revenue officer who conducted the audit are no longer available due to transfer of work assignment or separation from service (e.g. retirement, resignation, AWOL, etc.)
    • For reinvestigation; or
    • For compliance of review findings which resulted to deficiency tax or additional deficiency tax
    • Cases referred by other IO due to taxpayer’s transfer of business registration, where taxpayer agreed to have the audit continued by the new IO, provided the covered period is not yet prescribing
    • One-Time Transactions (ONETT)
    • Cases which review findings resulted to a deficiency tax; or
    • Real property transactions with findings in the Electronic Certificate Authorizing Registration
    • Policy cases/industry issues under the directive of the Commissioner
  •  To be covered by TVN:
    • Persons requesting for tax clearance whose gross sales for the immediately preceding year is P1M but not exceeding P3M or whose total assets upon retirement is P3M but not exceeding P8M
    • Due to death of the taxpayer; or
    • Taxpayers retirement from business; or
    • Taxpayers undergoing merger/consolidation/split-up/spin-off and other types of corporate reorganization
    • Claims for VAT Refund;
    • Income Tax Refund of Job-Order personnel; and
    • Claims for refund/tax credit arising from erroneous payment of taxes, including double payment of taxes due to system error/glitch
• Report of Investigation/verification of cases covered by eLAs/eMOAs/TVNs shall be submitted by the assigned RO within prescribed number of calendar days:

• Replacement of eLA is required when:
  • Original RO cannot continue the audit/investigation for various reasons provided in the RMO as long as the period to assess has no tyet prescribed
    • Transfer of business registration but the transfer of audit will not be allowed if the case is with the assigned RO for more than 120 days or the case is a prescribing case
  • Audit reports have been returned by the reviewing office to the investigating office.
  • Request for reinvestigation of the taxpayer and the original RO is no longer with the IO at the time the case is referred for reinvestigation
• No replacement of eLA will be issued:
  • If both the RO and GS are still assigned in the IO.
    • eMOA is sufficient document in referring back the case to them
    • If only RO is with the IO, original GS need not affix the signature in the revised audit report to the submitted by the original RO
  • RO has been promoted to GS
    • Audit report to be rendered in his capacity as the original RO, without the need the signature of the previous GS

ADDITIONAL SERVICES COVERED BY ONLINE REGISTRATION AND UPDATE SYSTEM (ORUS), RMC No. 36-2023, March 20, 2023

• The BIR announces the availability of other registration-related online transactions, functions and features in the BIR Online Registration and Update System (ORUS)
• Registration-related online transactions, functions and features of ORUS beginning March 17, 2023:
  • Online Payment (e-payment) of Annual Registration Fee (FR) for New Business Registrants
  • Online Inquiry of RF Payments for BIR Internal Users
  • Application for Cancellation of Permit to Use (PTU) Loose-Leaf and Acknowledgment Certificate (AC) of Computerized Accounting System (CAS)
  • Online Verification of Taxpayer Identification Number (TIN)
  • BIR Registered Business Search Facility

BIR RULINGS

• 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 Nos: Certificate of Tax Exemption No:NSH-331-2022, NSH-333-2022)

• 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 Nos: Certificate of Tax Exemption No: PSH-332-2022)

• 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-334-2022)

• A Company engaged in telecommunications, is seeking confirmation on whether the loss in useful value is a deductible expense, for income tax purposes. As implemented by Section 98 of Revenue Regulations (RR) No. 2, provides that for a loss to be deductible, the following requisites must be met:
  • The loss must be of the taxpayer;
  • The loss must be actually sustained and charged off within the taxable year;
  • The loss must have been incurred in trade, business, or profession;
  • The loss must be evidenced by a closed and completed transaction; and
  • The loss must not have been compensated for by insurance or other forms of indemnity.
  • Given that such requisites are met, The Company’s loss in useful value of decommissioned data network platform, hardware, and technology equipment in 2017 and in the first two quarters of 2018, is, therefore, deemed as deductible expenses, for income tax purposes. (BIR Ruling No: OT-335-2022)

TAXABLE BASES IN APPLYING EXCISE TAX FOR AUTOMOBILES

• The BIR clarifies the provision of Section 5 of RMC No. 063-22 pertaining to the application of the three (3) primary taxable bases in applying the excise tax rates for automobiles RMC No. 32-2023
• Taxable basis in applying the excise tax rates for automobiles:
  • Declared manufacturer’s or importer’s selling price, net of excise and VAT;
  • Based on the 80% actual dealer’s price, net of excise and VAT;
  • Based on the total cost of importation and expenses divided by 90% - applies in cases where the net importer’s selling price is lower than the cost of importation and expenses

BIR RULINGS

DIVIDEND INCOME RECEIVED BY RESIDENT ALIEN IS SUBJECT TO 10% FINAL TAX.

• The Dividend income of the considered resident alien is subject to the 10% final tax, for the purposes of his income tax liability in the Philippines considering his residence is within the Philippines and he is not a citizen of the Philippines. (BIR Ruling No: OT-315-2022)

REVERSION OF PROPERTY FROM TRUSTEE TO TRUSTOR IS NOT SUBJECT TO INCOME TAX, VAT AND DOCUMENTARY STAMP TAX.

• The transfer or reversion of the Club floors, subject matter of the trust arrangement by the trustee to the trustors, is not subject to income tax and consequently to withholding tax and the corresponding documentary stamp tax.
• The properties subject matter of the trust arrangement between the trustee and the trustors are not held primarily for sale to customers or for lease in the ordinary course of trustee’s business, since the trustee merely holds or manages the said properties for the benefit of the trustor-beneficiary. Consequently, the transfer or return by the trustee to the trustor-beneficiary of the properties held in trust is not subject to 12% VAT.
• The transfer or return by the trustee to the trustor-beneficiary of the properties which are founded solely on the termination of the trust agreement is not subject to donor’s tax. (BIR Ruling No: OT-316-2022)

JOINT VENTURE FORMED FOR THE PURPOSE OF UNDERTAKING CONSTRUCTION PROJECTS IS NOT SUBJECT TO INCOME TAX.

• 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 constructions 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-317-2022)

BIR ANNOUNCES THE AVAILABILITY OF ONLINE APPLICATION FOR REGISTRATION INFORMATION UPDATES AND OTHER ONLINE FACILITIES FOR REGISTRATION –RELATED TRANSACTIONS THROUGH ONLINE REGISTRATION AND UPDATE SYSTEM (ORUS) RMC No. 12-2023

• The implementation of online application for registration information update and other online facilities for registration-related transactions through Online Registration and Update System (ORUS) starts on January 23, 2023.
• The updating of the following registration is available online through ORUS:

• Taxpayers who already have an existing ORUS account may access and avail the online registration updates and other functionalities by logging-in to the system.
• Taxpayers who do not have an ORUS account opted to use the said online registration-related facilities are required to enroll or create an account in ORUS following the guidelines prescribed under RMC No. 122-2022.

APPLICATION FOR ELECTRONIC CERTIFICATE AUTHORIZING REGISTRATION (E-CAR) MAY BE THRU ELECTRONIC ONE-TIME TRANSACTION (E-ONETT) RMC 10-2023

• The BIR encourages the use of the Electronic One-Time Transaction (eONETT) System by sellers habitually engaged in the sale of real properties.
• eONETT system is a web-based system where taxpayers will be able to transact their ONETT online. It
  • Aims to reduce manual filing of returns and payment of taxes; and
  • Aims to provide a mere convenient way to file applications in securing ONETT Computation Sheet (OCS) and/or eCAR.
• Sellers habitually engaged in the sale of real estate properties like real estate developers with voluminous ONETT transactions are hereby urged to use the eONETT System in securing OCS/eCAR.
• They are also encouraged to pay electronically thru the available ePayment channels of the BIR

BIR PRESCRIBES NEW FORMS FOR BIR FORMS 1606 AND 1706.

The BIR circularizes the availability of revised BIR Form Nos. 1606 and 1706 version January 2018  (RMC No. 9-2023)

• Forms are not yet available in eBIR.
• Taxpayer shall download the PDF version of the forms, print and fill-out completely all applicable fields.
• Payment can either be manual or online.
• No Payment Return – Taxpayer shall file the return to the RDO having jurisdiction over the place where the property being transferred is located.

BIR RULINGS

• 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.
  • The exemption is limited in duration and number of units sold.
  •  Sale of units used for commercial purposes such as leasing, retail stores, offices etc. shall be subject to payment of appropriate taxes.
  • Sale of house and lot and other residential dwellings with selling price of not more than P1,919,500 (for residential lot) and not more than Php 3,199,200 (for house and lot and other residential dwellings) is VAT exempted. (BIR Ruling No: Certificate of Tax Exemption No: BOI-LEH-308-2022, BOI-LEH-309-2022)

• 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 Nos: Certificate of Tax Exemption No: PSH-310-2022)

• To be classified as capital assets the property must be not actually used in trade or business of the taxpayer, whether or not connected with his trade or business, or not held for lease or sale of customers.
  • Real properties owned by taxpayers not engaged in the real estate business or referring to those persons other than real estate dealers, real estate developers and/or real estate lessors, shall, upon showing of proof that the same have not been used in business for more than two (2) years prior to the consummation of the taxable transactions involving the said real properties, and though classified as ordinary assets, be automatically converted into capital asset. (BIR Ruling No: OT-311-2022)

BIR PRESCRIBES THE POLICIES AND GUIDELINES ON THE REGISTRATION OF BOOKS OF ACCOUNTS RMC No. 03-2023

• All books of accounts shall be registered online with the Bureau’s Online Registration and Update System (ORUS). Instead of manual stamping of books of accounts, a Quick Response (QR) Code shall be generated, which can be validated online.

For New Business Registrants

For Existing Business Taxpayers or Subsequent Registration

•  New sets of manual books of accounts (BAs) are not required to be registered every year. However, taxpayers may opt to use new set of books of accounts yearly. Hence, new sets of manual BAs shall be registered before its use.

Online Registration of Books of Accounts and QR Stamping

• Taxpayers who shall register their books of accounts shall use the BIR ORUS at https://orus.bir.gov.ph. Upon successful registration, the system shall generate the “QR stamp”, which the taxpayers shall paste on the first page of their manual books of accounts and permanent bound loose leaf books of accounts and other accounting records are stored/saved.
• The QR Stamp (Annex) shall have the following taxpayer information printed :
  • TIN;
  • Registered Name;
  • Registered Address;
  • Type of Book (Manual, Loose leaf or Computerized);
  • Book Registered;
  • Permit No./ Acknowledgment Certificate Control No. (ACCN)- for Loose leaf or Computerized
  • PTU/ ACCN Date issued- for Loose leaf or Computerized
  • Quantity;
  • Volume No.;
  • Date Registered;
  • Date Approved; and
  • QR Code.
• The QR Code shall determine the authenticity of the printed QR Stamp when scanned by any smartphone, which will be redirected to the BIR ORUS website.
• Upon initial implementation of online registration of books of accounts through ORUS, taxpayers shall still be allowed to register and stamp their manual books of accounts at the Revenue District Office/ Large Taxpayer Division/Office where the Head Office or Branch is registered.
• The Revenue District Office/ Large Taxpayer Division/Office shall announce and inform taxpayers under its jurisdiction that the registration of books of accounts can be done manually or online.

BIR PROVIDES TRANSITORY PROVISIONS FOR THE IMPLEMENTATION OF THE QUARTERLY FILING OF VAT RETURNS RMC No.5-2023

• VAT-registered taxpayers are no longer required to file the Monthly Value-Added Tax Declaration (BIR Form No. 2550M) for transactions starting January 1, 2023 but will instead file the corresponding Quarterly Value-Added Tax Return (BIR Form No. 2550Q) within twenty-five (25) days following the close of each taxable quarter when the transaction transpired.
•  In order to avoid confusion during the initial implementation, particularly for taxpayers that are under fiscal period of accounting, the following Transitory Provisions are provided:

BIR RULINGS

• Sale of interest in real property (real property purchased on installment covered by Contract to Sell which was sold by the original buyer before it was fully paid) shall be taxable on the part of the original buyer (now seller) based on the realized gain thereon which is measured by the difference between the agreed consideration and the amount actually paid by the said original buyer.
  • Assignment of interest is subject to CGT or CWT/EWT, as the case may be after the full payment of the purchase price but before the execution of DOAS
    • Before full payment, the difference in agreed consideration and amount actually paid (per assignment) is subject to CGT or CWT/EWT, as the case may be.
    • Thus, if SM purchased the property from the buyer (not yet fully paid) and later assigned it to another without gain, the assignment is not subject to income tax.
  • The assignment of rights over the properties by the Assignor to the Assignee cannot be considered as a sale. Consequently, since there was no sale, barter, exchange or lease of the subject Properties, there is no basis for the imposition of the VAT. The assignee merely steps into the shoes of the assignor without acquiring a better right than what the assignor had in the property to which the rights assigned pertain.
  • The assignment of rights, not being a sale of real property but merely rights pertaining to such property is not subject to DST
  • However, the said Deeds of Assignment is subject to the P30.00 DST on the notarial acknowledgment. (BIR Ruling No: OT-305-2022)

• Under the CREATE Law, registered export enterprises are granted a VAT zero-rating incentive on the goods and services directly and exclusive used in the registered project activity. This includes provision of basic infrastructure.
  • Basic infrastructure includes the purchase of real properties such as land where the building and/or structure will be constructed, provided that such building and/or structure is/will be directly and exclusively used in or attributable to the registered project or activity of an export enterprise.(BIR Ruling No: OT-306-2022)
  • Transaction is exempt from DST if both parties are exempt from DST.

• 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-307-2022)

•  Importation of a cargo vessel destined for domestic transport operations shall be exempt from VAT. Provided that the VAT exemptions shall be subject to the requirements on restriction vessel importation and mandatory vessel retirement program of MARINA. (BIR Ruling No: Certificate of Tax Exemption No: VAT-301-2022, VAT-302-2022)

The transfer of club shares appurtenant to the sale of lots in the subdivision is not subject to CAR. A CAR issued by the BIR only certifies that taxes are paid. Moreover, no further consideration is required for the acquisition of the club share as the parties agree to treat that the lot and club are indivisible.. (BIR Ruling No: OT-303-2022)

SEC 2023 SCHEDULE FOR FILING OF THE AUDITED FINANCIAL STATEMENTS AND GENERAL INFORMATION SHEET

• The SEC has set the deadlines for the filing and submission of the 2022 audited financial statements (AFS) and general information sheet (GIS) of corporations through the Electronic Filing and Submission Tool (eFAST).
•    Annual Financial Statements (AFS)
  •  All corporations, including branch offices, representative offices, regional headquarters and regional operating headquarters of foreign corporations whose fiscal year ends on December 31, 2022 shall file their AFS based on the last digit of the SEC registration or license number in accordance with the following schedule:
    • 1 and 2 : May 2,3,4,5
    • 3 and 4 : May 8,9,10,11,12
    • 5 and 6 : May 15,16,17,18,19
    • 7 and 8 : May 22,23,24,25,26
    • 9  and 0 : May 29,30,31 and June 1,2
  •       The SEC extension offices will likewise implement the same coding schedule. Corporations may submit their reports on or before their respective filing dates.
  •       Corporations whose securities are listed on the Philippine Stock Exchange and are covered under Section 17.2 of Republic Act No. 8799, or the Securities Regulation Code (SRC), shall file their AFS within 105 calendar days after the end of their fiscal year, as an attachment to their annual reports.
  •       SEC will accept late filings starting June 5, 2023. Corporations which submitted their reports late will be subject to the prescribed penalties computed from the last date of the aforementioned filing schedule.
  •       Corporations whose fiscal year ends on a date other than December 31, 2022 should file its AFS within 120 calendar days from the end of its fiscal year.
• General Information Sheet (GIS)
  •  All corporations shall file their GIS through eFAST within 30 calendar days from:
    • Stock Corporations – date of actual annual stockholders’ meeting
    • Non-Stock Corporations – date of actual annual members meeting
    • Foreign Corporations – anniversary date of the issuance of the SEC License.
• All Reports
  • All corporations are required to submit their annual reportorial requirements online through eFAST at https://cifss-ost.sec.gov.ph.
  •  Any problem encountered in the enrollment and submission of AFS and GIS in the eFAST shall be accommodated through the email addresses and telephone numbers provided in the SEC Contact Center posted at https://www.sec.gov.ph/contact-us/
  •   Other reports that are not yet accepted through eFAST may be submitted by sending through email at ictdsubmission@sec.gov.ph. Submission of reports over the counter and/or through mail or courier under the SEC Express Nationwide Submission facility shall no longer be accepted.

THE BIR SUSPENDS ALL AUDIT AND OTHER FIELD OPERATIONS EFFECTIVE DECEMBER 16, 2022 UNTIL JANUARY 8, 2023 RMO No. 55-2022, December 22, 2022

• All field audits and other field operations of the BIR relative to examinations and verifications of taxpayers’ books of accounts, records, and other transactions are suspended for the period December 16, 2022 to January 8, 2023. Likewise, no written orders to audit and/or investigate taxpayers’ internal revenue tax liabilities shall be served, except in the following cases:
  • Investigation of cases prescribing on or before April 15, 2023;
  • Tax evasion cases;
  • Processing and verification of estate returns, donor's tax returns, capital gains tax returns and withholding tax returns on the sale of real properties or shares of stocks together with the documentary stamp tax returns thereto;
  • Examination and/or verification of internal revenue tax liabilities of taxpayers retiring from business;
  • Monitoring of privilege stores (tiangge); and
  • Other matters/ concerns where deadlines have been imposed.
•    Examiners and Investigators shall make use of this period to do office work on their cases and to complete the report on those with already completed work.

THE BIR PRESCRIBES THE RULES AND REGULATIONS IMPLEMENTING THE PROVISIONS OF REPUBLIC ACT NO. 11900, RELATIVE TO THE IMPORTATION, MANUFACTURE, SALE, PACKAGING, DISTRIBUTION, USE, AND COMMUNICATION OF VAPORIZED NICOTINE AND NON-NICOTINE PRODUCTS, AND NOVEL TOBACCO PRODUCTS RR 14-2022

• Manufacturer or importer of vaporized nicotine and non-nicotine products and novel tobacco products must register its business before it starts its operation.
• Place of registration: Excise LT Regulatory Division (ELTRD) BIR National Office.
• It shall apply for a Permit to Engage in Business as Manufacturer or Importer.
• Among the additional requirements are bond (starting at P100,000) and Sworn statements on the goods/products reflecting the price/market value with cost. Sworn statements should be updated and submitted on or before the end of the months of June and December thereafter.
• Importers shall apply for eATRIG via online and processed in the ELTR.
• If goods are already released: no ATRIG shall be issued
• Subsequent application for ATRIG: Importer to submit proof of payment of excise tax on imported products covered previously by ATRIG.
• If a particular brand shall no longer be manufactured on a permanent or temporary basis, notice of stoppage of production must be filed with the BIR.
• Official Register Books must be maintained; transcript sheets of ORB to be submitted on or before the 8^th day of the month following the month of operation.

BIR RULINGS

• Importation of the enumerated Hydrocarbon fluids except Exxsol Hexane shall not be subject to excise tax, However, they are still subject to 12% VAT on importation of goods.
  • Also, the said hydrocarbon fluids except Exxsol Hexane are already determined by the BIR to be used as solvents and raw materials for general purpose adhesive construction, automotive, shoes, and for architectural coatings like household paints (solvent based). BIR Ruling No: OT-275-2022

• The Joint Venture may use the tax credits evidenced by the CWTs Certificate issued in the name of JV partner, applying substance over form. However, the tax credits to be applied by the Joint Venture shall be limited to the total amount withheld as duly supported by certificates of creditable withholding tax.
  • The Joint Venture may benefit from the deduction of input VAT expense or the charging against the cost of the input VAT. However, the input tax shall be restricted to the total amount as duly supported by appropriate sales invoices/ official receipts. BIR Ruling No: OT-276-2022)

• The Heirs is requesting for a reasonable extension to pay the estate tax due through a cash installment. Section 91 (B) of the 1997 Tax Code provides that when the Commissioner finds that the payment on the due date of the estate tax or any part thereof would impose an undue hardship upon the estate or any of the heirs, he may extend the time for payment not to exceed five (5) years in case the estate is settled through the courts, or two (2) years in case the estate is settled extrajudicially.
  • However, the amount for which the extension is granted shall be paid on or before the date of the expiration of the period of the extension, and the running of the Statute of Limitations for assessment, shall be suspended for the period of any such extension. Further, Section 91 (C) of the same Code provides that in case the available cash of the estate is insufficient to pay the total estate tax due, payment by installment shall be allowed within two (2) years from the statutory date for its payment without civil penalty and interest. Hence, the extension to pay the estate tax is granted. Consequently, the executor/administrator or heirs shall pay the estate tax in four (4) installments, without civil penalty and interest. BIR Ruling No. OT-277-2022

• Properties classified as ordinary assets for being used in business by a taxpayer engaged in business other than real estate business are automatically converted into capital assets upon showing proof that the same have not been used for more than two (2) years prior to the consummation of the taxable transactions involving said properties.
  • Two important conditions for the automatic conversation of ordinary assets into capital assets are:
    • The assets were previously used in business by a taxpayer not engaged in real estate business;
    • There must be a showing that the same have not been used in business for more than two (2) years (i.e. the company ceased its business operation for more than 2 years).
  •  Thus, the conveyance of which through sale is subject only to CGT and Documentary stamp tax (DST) and shall not be subject to creditable withholding (CWT) and value-added tax (VAT). (BIR Ruling No: OT-284-2022)

•  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: Certificate of Tax Exemption No: NSH-285-2022, NSH-290-2022)

• 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-286-2022, BOI-LEH-287-2022, BOI-LEH-288-2022, BOI-LEH-289-2022)