Competence. Integrity. Commitment.

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)

TO INCOME TAX, REGARDLESS THE EMPLOYMENT STATUS OF THE GRANTEE-EMPLOYEE WHO COULD BE A RANK-AND-FILE OR OCCUPYING A SUPERVISORY OR MANAGERIAL POSITION; TAX BASE IS THE FAIR MARKET VALUE; INCONSISTENT PROVISIONS OF RMC NO. 079-2014 ARE REPEALED. Revenue Regulations No. 13-2022, October 7, 2022

• The BIR prescribes the guidelines, procedures and requirements for the proper income tax treatment of equity-based compensation of any kind.
• Equity grants under applicable equity schemes (stock options, restricted share awards, stock appreciation rights, or restricted stock units) of the grantor shall give rise to a realized profit on the part of the grantee-employees.
• The equity grants to be awarded to the employees are for the services being rendered by the said employees.
• The equity grants, once exercised or availed of by the grantee-employee, are considered compensation subject to tax, regardless the employment status of the grantee-employee who could either be rank-and-file or occupying a supervisory or managerial position as Section 32 of the NIRC do not make a distinction for purposes of applying the tax implication on all forms of compensation, including equity-based compensation.
• RR 2-98 - Tax base: fair market value.
  • If the corporation transfers to its employees its own stock as remuneration of the services rendered by the employee, the amount of such remuneration is the FMV of the stock at the time the services are rendered.
• Provisions of RMC NO. 079-2014, dated October 31, 2014, inconsistent with this regulation, are revoked, repealed, or amended accordingly.

VAT ZERO-RATED: HMO PLANS ACQUIRED BY REGISTERED EXPORT ENTERPRISES FOR THE EMPLOYEES DIRECTLY INVOLVED IN THE OPERATIONS OF THE REGISTERED PROJECT OR ENTERPRISE AND FORMING PART OF THE COMPENSATION PACKAGE; HMO TO DEPENDENTS ARE VATABLE. RMC No. 137-2022, October 14, 2022

• The BIR further clarifies the guidelines on the availability of VAT Zero Rate (0%) on Health Maintenance Organization (HMO) plans acquired by Registered Export Enterprises (REEs) and prescribing the uniform template of detailed information thereof.
• The list provided in RMC 24-2022 on cost items that fall under “other expenditures” which are indispensable to the project or activity is not exclusive, as long as the same can be attributed directly to the registered activity of the REE.
• HMO plans acquired by the REEs for the employees directly involved in the operations of the registered project or enterprise and forming part of the compensation package for their health maintenance is zero-rated
• However, the VAT zero-rating shall not extend to HMO plans procured for employees’ dependents, as well as HMO plans for employees not directly involved in the operations of the registered projects or activities of the REE.
• REEs shall provide their suppliers detailed information on the HMP plans acquired.
• Information includes the  department where the employee is assigned (i.e. outbound calls department) and job description (i.e. agent), the type of transaction (i.e. off cycle premium insurance); period covered and the contribution allocated to employee and dependents.

WORK-FROM-HOME IS ALLOWED FOR 30% OF THE TOTAL WORK FORCE FOR INFORMATION TECHNOLOGY BUSINESS PROCESS MANAGEMENT (IT-BPM) SECTOR; 100% ALLOWED FOR IT-BPM REGISTERED BUSINESS ENTERPRISES TRANSFERRING REGISTRATION TO THE BOARD OF INVESTMENT. RMC No. 136-2022, October 14, 2022

• The BIR publishes the Fiscal Incentives Review Board (FIRB) Resolution No. 026-2022 - extending the 70:30 Work-From-Home (WFH) arrangement for Registered Business Enterprises (RBEs) in the Information Technology Business Process Management (IT-BPM) sector and allowing the transfer of registration of existing business enterprises in the IT-BPM to Board of Investments (BOI).
• FIRB Resolution No. 026-22 allows the 30% of the total work force to adopt WFH arrangement for IT-BPM RBE within the ECOZONE or FREEPORT zone, as a temporary measure under the CREATE Law
• The affected RBEs in the IT-BPM sector may be allowed to transfer their registration to the BOI from the Investment Promotion Agency administering an economic zone or freeport zone, where their project is located until December 31, 2022 to adopt 100% WFH.

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-203-2022, BOI-LEH-204-2022, BOI-LEH-205-2022, BOI-LEH-206-2022)

• The Transfer of  club shares from one  trustee-employee to another is not subject to capital gain tax (CGT) because it does not involve any monetary consideration and the trustee-employee merely transfers  legal title to the proprietary share from one nominee of the corporation to another nominee.
  • The transfer is exempt from donor’s tax as there is no donative intent, and the transaction is a bona fide transaction effected solely for business reasons.
  • The Transfer is not subject to documentary stamp tax (DST) as there is no transfer or conveyance to the beneficial ownership of or any right, claim or interest over the share or over the assets.
  • However, the notarial acknowledgement to the Declaration of Trust is subject to DST of P30.00. (BIR Ruling No: OT-207-2022)

• The transfer of electronic gift certificates to the taxpayer is not considered income but a fund if the taxpayer holds the electronic gift certificate in trust of the vendor.
  • However, service fees paid to the taxpayer by its clients constitutes gross income subject to income tax and withholding tax.
  • The issuance of electronic gift certificates is not subject to VAT and as such, Non-VAT receipt is proper. However, the taxpayer shall be subject to VAT and required to issue VAT official receipts on the amount it receives from its customers/clients for the service fees. (BIR Ruling No: OT-208-2022)

• Non-Bank Financial Intermediaries (NBFI) who are not performing quasi-banking functions doing business in the Philippines are generally subject to Gross Receipt Tax.
  • Non-Banks Financial Intermediaries like savings and loan associations are exempt from income tax under the special laws.
  • Further, interest income derived by it from its deposit and deposit substitutes are exempt from 20% final withholding tax.
  • However, Income derived from any properties, real or personal, or any activity conducted for profit, regardless of the disposition is subject to income tax.
  •  BFS are subject to Documentary Stamp Tax (DST), particularly on loan agreements, mortgages, pledges, foreclosures and sales.
  • Moreover, whenever Non-Bank Financial Intermediaries is one of the parties to a taxable  transaction, it shall be responsible for the remittance  of the DST due regardless of who will bear the burden of paying the DST.(BIR Ruling No: OT-209-2022)

• The transfer of title of the property by the trustee in favor of the trustor, who is the beneficial owners is not subject to internal revenue taxes and creditable withholding tax, considering that the transfer and re-conveyance is not motivated by a valuable consideration and merely acknowledges, confirms and consolidates the legal title and ownership over the Property in the name of the Trustor.
  • The transfer of the property to the trustee is not subject to 12% value-added tax because the property is not held primarily for sale to customers or for lease in the ordinary course of trade or business.
  • The transfer and re-conveyance of the property of the Trustor without any monetary consideration is not subject to document stamp tax. However, the notarial acknowledgment is subject to the DST of P30.00 (BIR Ruling No: OT-210-2022)

• Sale of real properties held primarily for sales to customers or held for lease in the ordinary course of trade or business of the seller shall be subject to VAT. The instrument of sale (whether the instrument is nominated as a deed of absolute sale, deed of conditional sale, or otherwise) is not exclusive to those contracts which are executed and notarized. It also includes sale on installment plan thru a Reservation Agreement reckoned from the year the initial payment is made. Therefore, the sale covered by a reservation agreement is subject to VAT. (BIR RulingNo: VAT-211-2022)

BIR ANNOUNCES THE AVAILABILITY OF OFFLINE ELECTRONIC BUREAU OF INTERNAL REVENUE FORMS VERSION 7.9.3 

• Under RMC No. 131 dated September 28, 2022, the BIR announces the availability of Offline e-BIR Package Version 7.9.3 which is downloadable HERE.
• The new Offline eBIRForms Package has the following modifications:
  • Additional Alphanumeric Tax Codes (ATCs) in BIR Form No. 0605 to be used by the International Carriers in paying their taxes in reference to RMO No. 37-2022, to wit:

• Required official e-mail address of the taxpayer to be provided in the eBIRForms profile page. The e-mail shall be used as an additional mode of serving BIR orders, notices, letters, communications and other processes.

TAX VERIFICATION NOTICE (TVN) FOR ESTATE TAX CASES IF DECEDENT HAS NO REGISTERED BUSINESS IS DISCONTINUED.  RMO No.41-2022, September 29, 2022

• In order to comply with the ease of doing business in processing requests for issuance of Certificate Authorizing Registration related to the transfer of properties left by the decedent, issuance of TVN for estate tax cases where the decedent has no registered business is discontinued.

“ASK FOR RECEIPT” NOTICE SHALL BE VALID UNTIL JUNE 30, 2023 AND MUST BE REPLACED BY NOTICE TO ISSUE RECEIPT/INVOICE; DESIGNATED EMAIL ADDRESS TO BE REQUIRED, WHICH SHALL BE USED BY THE BIR TO SERVE. RMO No. 43-2022, September 29, 2022

• The BIR prescribes the policies, guidelines and procedures in the issuance and use of Notice to Issue Receipt/invoice (NIRI) pursuant to Revenue Regulations No. 10-2019
• NIRI shall be displayed in an area conspicuous to the public at the place of business of the seller, including branches and mobile stores.

BIR RULINGS

• Honoraria and allowances granted to the electoral boards/poll workers or persons who rendered election services in the elections are considered compensation income subject to withholding tax because the name by which remuneration is designated is immaterial. Honoria and allowances constitute compensations income.
  • However, the same is not subject to expanded withholding tax because it is received by employees. Withholding tax applies only to those who render service or labor-only for a fee or under a contract of service.
  • The same is also not subject to VAT as the same is received by employees. VAT applies only to teachers performing services in the course of trade or business. (BIR Ruling No: OT-195-2022)
• 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 No: Certificate of Tax Exemption No: BOI-LEH-196-2022, BOI-LEH-197-2022, BOI-LEH-198-2022)
• 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% (now 1%) percentage tax, if the gross receipts do not exceed Php3,000.000.00; (BIR Ruling No: Certificate of Tax Exemption No: SH30-200-2022, SH30-201-2022, SH30-202-2022)
• Merger between two (2) non-profit civic associations/organizations with consequent transfer of the property is not qualified as a tax-free merger. There must be an exchange of property solely for stock in another corporation. It is clear that in order to qualify as an exception to the recognition of the gain or loss upon the sale or exchange of property, a corporation which is a party to a merger exchanges its property solely for stock in another corporation which is also a party to the merger. (BIR Ruling No: S40M-199-2022).

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)

BIR TO LAUNCH ONLINE REGISTRATION AND UPDATE SYSTEM (ORUS); TAXPAYERS ARE ADVISED TO UPDATE RECORDS USING REGISTRATION UPDATE SHEET (RUS); OFFICIAL EMAIL ADDRESSES SHOULD BE PROVIDED, WHERE THE BIR SHALL SERVE ITS ORDERS, NOTICES, LETTER, AND OTHER PROCESS/COMMUNICATIONS. RMC No. 122-2022

• The BIR prescribes the guidelines in updating the registration information record of taxpayers who will enroll in the Bureau's Online Registration and Update System (ORUS).
• The BIR will launch ORUS allowing taxpayers to register, update and transact registration-related transactions online
• Purpose of Circular: to advise taxpayers to update their registration records to enroll in ORUS
• Taxpayers shall update their registration records, such as e-mail address, contact information using the S1905 – Registration Update Sheet (RUS)
  • Email address should be official email address
  • Email address shall be used in serving BIR orders, notices, letters, and other processes/communications to the taxpayers
• For taxpayers with head office – head office registration shall be updated first before updating the branches
• Employers to inform employees regarding this requirement
• Submission of RUS – via email to the BIR (list may be accessed HERE.

BIR CLARIFIES REMOVAL OF 5-YEAR VALIDITY PERIOD ON RECEIPTS/INVOICES; RECEIPTS/INVOICES EXPIRING BEFORE JULY 15, 2022 ARE NO LONGER VALID AND SHOULD BE RETURNED FOR DESTRUCTION TO THE BIR; P20,000 (FIRST OFFENSE) AND P50,000 (SECOND OFFENSE) FOR USE OF EXPIRED RECEIPTS OR INVOICES RMC No. 123-2022

• The BIR  clarifies the provisions of Revenue Regulations No. 6-2022 relative to the removal of the five (5) – year validity period on receipts/invoices

BIR RULINGS

• The bonus payments granted by the company to its employees are considered compensation income and are not exempt from withholding tax.
  • The employer must withhold from compensation paid on computed amount
  • The company should deduct and withhold the proper tax at the time the income payment is paid (BIR Ruling No: OT-133-2022)
• 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 No: Certificate of Tax Exemption No: BOI-LEH-135-2022)
• Sale of house and lot duly registered with the Housing and Land Use Regulatory Board (HLURB) 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-136-2022, PSH-137-2022, PSH-138-2022, PSH-139-2022, PSH-140-2022,  PSH-141-2022, PSH-142-2022, PSH-143-2022)
• 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 Nos: Certificate of Tax Exemption No: NSH-144-2022, NSH-145-2022, NSH-146-2022, NSH-147-2022)

FIELD AUDIT AND OTHER FIELD OPERATIONS ON ALL OUTSTANDING LETTERS OF AUTHORITY (LOA)/ AUDIT NOTICES AND LETTER NOTICES (LN) SHALL BE LIFTED PER INVESTIGATING OFFICE UPON APPROVAL OF THE COMMISSIONER OF INTERNAL REVENUE. (RMC No. 121-2022)

• The BIR prescribes the guidelines on the lifting of suspension of field audit and operations pursuant to Revenue Memorandum Circular No. 77-2022.
• Lifting is on a per Investigating Office upon approval by the Commissioner of Internal Revenue (CIR) of the Memorandum Request.
  • Investigating Office: Revenue District Office, Regional Investigation Division, VAT Audit Section, Office Audit Sections, Large Taxpayer VAT Audit Unit, Large Taxpayers Audit Divisions or National Investigation Division.
• Upon approval of Memorandum Request by the CIR, the Investigating Office shall immediately resume its field audit and other field operations on all outstanding Letter of Authority (LOAs), Audit Notices, and Letter Notices.
• No new LOAs, written orders to audit and/or investigate taxpayers’ internal revenue tax liabilities shall be issued and/or served except:
  •  (a) in those cases enumerated under RMC No. 77-2022
    • Investigation of cases prescribing on or before October 31, 2022, processing and verification of estate tax 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 related thereto; Examination and/or verification of internal revenue tax liabilities of taxpayers retiring from business; o Audit of National Government Agencies (NGAs), Local Government Units (LGUs) and Government Owned and Controlled Corporations (GOCCs) including subsidiaries and affiliates; and Other matters/concerns where deadlines have been imposed or under the orders of the Commissioner of internal Revenue; and
  • (b) in case of re-issuance/s to replace previously issued LOA/s due to change of revenue officer and/or group supervisors.

TAXPAYERS ENGAGED IN THE EXPORT OF GOODS AND SERVICES, ELECTRONIC COMMERCE (E-COMMERCE) AND LARGE TAXPAYERS ARE MANDATED TO ISSUE ELECTRONIC RECEIPTS OR SALES/COMMERCIAL INVOICE. (Rev. Regs. 8-2022)

The BIR prescribes policies and guidelines for the implementation of the use of the Electronic invoicing/receipting System (EIS)

SALES AND PURCHASE DATA GENERATED AND VERIFIED THRU ELECTRONIC INVOICING/RECEIPTING SYSTEM (EIS) ARE ADMISSIBLE AT THE TIME OF AUDIT OR INVESTIGATION OR VERIFICATION OF THE TAXPAYER. (Rev. Regs. No. 9-2022)

• The BIR prescribes the policies and guidelines for the admissibility of sales documents in electronic format.
•  Sales and purchase data (generated and verified thru EIS) are admissible at the time of audit or investigation or verification of the taxpayer.
  •  Sales/purchase  must comply with information/data requirements under the rules;
  •  Zero-rated stamping is no longer necessary since sales shall be reported to EIS for each classification (VATable, zero-rated and exempt)
• Submission of printed copies of sales invoice or receipts shall no longer be required.
  •   TP must be duly authorized to use the EIS.
  •   EIS may be either web-based format or through Application Programming Interface (API) transmission of sales data.
• Submission of printed invoice/receipts for purchases shall no longer be required.
  •  Suppliers must be using web-based  issuance in the EIS or via SDTS
  •  The purchase data must be validated in the EIS for purposes of input VAT and deductibility of expenses
  •  If not reported in the EIS by the supplier, the sales shall be considered unreported and subject to further investigation
  •  Original form or digital copies, whichever is applicable must be retained in case of demand for verification of data.
• Taxpayers may be required to present/submit hard copies of the receipts or invoices or allowed access to the CAS, under the following instances:
  •   Missing or vague details the invoice/receipts that were transmitted to the EIS, which the investigating revenue officer needs further clarification;
  •   Information are not included in the data required to be transmitted to the EIS;
  •   Validation of export sales data during the verification of VAT refund claims;
  •   Taxpayer is under fraud investigation;
  •   Skipped or missing series in the invoices or receipts issued; and/or
  •   Other instances as may be determined by the CIR
• Sampling may be allowed.
• BIR may access the CAS or POS/CRM machines under EIS to validate whether sales transmitted to EIS matches the sales recorded in the system.
• If taxpayer refuses access to the CAS, the BIR may employ alternative means to verify the records of the taxpayer.
  •  Refusal may also result in possible disallowances or assessments
  •   Violation of revenue regulations on maintenance, retention and submission of electronic records (RR9-2009), may result in the prosecution of the taxpayer.
  •   Acknowledgement Certificate or Permit to Use CAS may also be revoked.
•   Sales and purchases not covered by this regulation shall comply with rules for manual verification of sales and purchases.

BIR RULINGS

• Joint venture 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 provided that the joint venture complied with the conditions provided in RR No. 10-2012. (BIR Ruling No: Certificate of Tax Exemption No: JV-128-2022)
• Income or gain derived by employees from their exercise of the stock options is considered as additional compensation subject to income tax and consequently to withholding tax on compensation. However, if the said stock option is granted to employees holding supervisorial and/or managerial position shall be subject to fringe benefits tax. (BIR Ruling No: OT-130-2022)
• Income derived by the inventor from technologies and invention is exempt from income tax. In addition, the government’s purpose of enacting the Inventors and Inventions Incentives Act is to provide incentives to inventors and protect their exclusive right to the invention, particularly when it is beneficial to the people and contributes to national development and process. (BIR Ruling No: INV-131-2022)
• All contracts, deeds, documents and transactions entered into by the BSP which are related to the conduct of its business are exempt from the payment of DST. (BIR Ruling No: OT-132-2022)
• Transfer of subdivided lots in favor of a housing member-beneficiaries of homeowners’ association is exempt from CGT and CWT considering that the transfer is only a formality to finally effect the transfer of the property to the member-beneficiaries who bought the property from the former owner through the association. In other words, the Association is merely transferring the ownership of the property to its member-beneficiaries who actually own them.
  • Moreover, the transfer is exempt from donor’s tax as there is no donative intent on the part of the association to donate the property to the members-beneficiaries, considering that it could not donate the property the ownership of which already belongs to the members-beneficiaries.
  •  It is not also subject to DST. However, the notarial acknowledgment of the deed of conveyance is subject to the DST of P30.00. (BIR Ruling No: CMP-134-2022)
• 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-127-2022)
• Sale of house and lot duly registered with the Housing and Land Use Regulatory Board 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 No: Certificate of Tax Exemption No: PSH-129-2022)
  •  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 No: Certificate of Tax Exemption No:, BOI-LEH-120-2022)
  • 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. 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 No: Certificate of Tax Exemption No: PSH-121-2022)