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BIR RULINGS

August 3, 2021

A final withholding tax of 15% is imposed on cash dividends received by a non-resident foreign corporation (NRFC) from domestic corporation, subject to the condition that the country in which the NRFC allows credit against the tax due from NRFC taxes deemed to have been paid in the Philippines equivalent to 15% (Tax Sparing Rule). Further, exemption from taxes by the country of domicile of the non-resident corporate stockholder on the dividends received is sufficient basis for the applicability of 15%. Thus, dividends paid by a domestic corporation to a non-resident foreign corporation based in the Island of Nevis, West Indies, are subject to 15% since Nevis Island does not impose any income tax on the NRFC. (BIR Ruling No. OT-027-2021, February 18, 2021)
Sale of land in favor of National Housing Authority for purposes of socialized housing project is not subject to capital gains tax/income tax/creditable withholding tax, VAT, and documentary stamp tax. Certificate Authorizing Registration is still required. (Certificate of Tax Exemption No. NSH-028-21, February 26, 2021; NSH-029-21, February 26, 2021; NSH-030-21, February 26, 2021; NSH-033-21, February 26, 2021; NSH-034-21, February 26, 2021; NSH-035-21, February 26, 2021; NSH-036-21, February 26, 2021)
Non-stock savings and loan association (NSSLA) organized and operated exclusively for the mutual benefit of its members is not subject to gross receipts tax (GRT). NSSLA is a non-stock non-profit corporation engaged in the business of accumulating the savings of its members and using such accumulations for loans to members to service the needs of households by providing long term financing for home building and development and for personal finance. NSSLA shall confine its membership to a well-defined group of persons and shall not transact business with the general public. Thus, it is exempt from GRT as long as its transactions do not fall under the contemplated activities of a non-bank financial intermediaries engaged in lending of funds or purchasing of receivables or other obligations with funds obtained from the public. (BIR Ruling No. OT-037-21, February 26, 2021)

A final withholding tax of 15% is imposed on cash dividends received by a non-resident foreign corporation (NRFC) from domestic corporation, subject to the condition that the country in which the NRFC allows credit against the tax due from NRFC taxes deemed to have been paid in the Philippines equivalent to 15% (Tax Sparing Rule). Further, exemption from taxes by the country of domicile of the non-resident corporate stockholder on the dividends received is sufficient basis for the applicability of 15%. Thus, dividends paid by a domestic corporation to a non-resident foreign corporation based in the Island of Nevis, West Indies, are subject to 15% since Nevis Island does not impose any income tax on the NRFC. (BIR Ruling No. OT-027-2021, February 18, 2021)
Sale of land in favor of National Housing Authority for purposes of socialized housing project is not subject to capital gains tax/income tax/creditable withholding tax, VAT, and documentary stamp tax. Certificate Authorizing Registration is still required. (Certificate of Tax Exemption No. NSH-028-21, February 26, 2021; NSH-029-21, February 26, 2021; NSH-030-21, February 26, 2021; NSH-033-21, February 26, 2021; NSH-034-21, February 26, 2021; NSH-035-21, February 26, 2021; NSH-036-21, February 26, 2021)
Non-stock savings and loan association (NSSLA) organized and operated exclusively for the mutual benefit of its members is not subject to gross receipts tax (GRT). NSSLA is a non-stock non-profit corporation engaged in the business of accumulating the savings of its members and using such accumulations for loans to members to service the needs of households by providing long term financing for home building and development and for personal finance. NSSLA shall confine its membership to a well-defined group of persons and shall not transact business with the general public. Thus, it is exempt from GRT as long as its transactions do not fall under the contemplated activities of a non-bank financial intermediaries engaged in lending of funds or purchasing of receivables or other obligations with funds obtained from the public. (BIR Ruling No. OT-037-21, February 26, 2021)

VAT IMPOSITION ON EXPORT SALES UNDER EXECUTIVE ORDER NO. 226, OTHERWISE KNOWN AS THE OMNIBUS INVESTMENTS CODE OF 1987, AND OTHER SPECIAL LAW AND OTHERS TRANSACTIONS IS SUSPENDED. (Revenue Regulations No. 15-2021, July 21, 2021)

August 3, 2021

The BIR defers the implementation of RR No. 9-2021 implementing the imposition of 12 VAT on the following transactions:

Transactions considered as export sales:

Sale of raw materials or packaging materials to a non-resident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods and paid for in acceptable foreign currency, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)

Sale of raw materials or packaging materials to export-oriented enterprise whose export sales exceed seventy percent (70%) of total annual production

Those considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special law

The sale of sale of services and use or lease of properties:

Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)

Services performed by subcontractors and/or contractors in processing, converting or manufacturing goods for an enterprise whose export sales exceed 70% of the total annual production

The BIR defers the implementation of RR No. 9-2021 implementing the imposition of 12 VAT on the following transactions:

Transactions considered as export sales:

Sale of raw materials or packaging materials to a non-resident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer’s goods and paid for in acceptable foreign currency, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)

Sale of raw materials or packaging materials to export-oriented enterprise whose export sales exceed seventy percent (70%) of total annual production

Those considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special law

The sale of sale of services and use or lease of properties:

Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)

Services performed by subcontractors and/or contractors in processing, converting or manufacturing goods for an enterprise whose export sales exceed 70% of the total annual production

“NON-PROFIT” AS DEFINITION OF PROPRIETARY EDUCATIONAL INSTITUTIONS IS SUSPENDED (Revenue Regulations No. 14-2021, July 26, 2021)

August 3, 2021

The BIR suspends the implementation of certain provisions of Revenue Regulations No. 5-2021 dated April 8, 2021
Suspended provisions:
- Definition of proprietary educational institutions in so far as it includes the phrase “which are non-profit”
- Definition of non-profit as it applies to proprietary educational institutions;
- Illustration on the tax treatment of proprietary educational institutions that are non-profit

The BIR suspends the implementation of certain provisions of Revenue Regulations No. 5-2021 dated April 8, 2021
Suspended provisions:
- Definition of proprietary educational institutions in so far as it includes the phrase “which are non-profit”
- Definition of non-profit as it applies to proprietary educational institutions;
- Illustration on the tax treatment of proprietary educational institutions that are non-profit

OBLIGATION TO DEDUCT AND REMIT 1% OR 2% CWT SHALL CONTINUE, COMMENCE OR CEASE, AS THE CASE MAY BE, EFFECTIVE AUGUST 1, 2021. ANY TAXPAYER NOT FOUND IN THE PUBLISHED LIST OF TWA IS DEEMED EXCLUDED AND THEREFORE NOT REQUIRED TO DEDUCT AND REMIT THE 1% OR 2% CWT. (RMC No. 88-2021, July 16, 2021)

July 19, 2021

The BIR circularizes the lists of withholding agents required to deduct and remit the 1% or 2% Creditable Withholding Tax (CWT) for the Purchase of Goods and Services under Revenue Regulations No. 3l-2020.
Top Withholding Agents (TWAs) are required to deduct and remit either 1% or 2% creditable withholding tax from the income payments to their suppliers of goods and services, respectively.
Obligation to deduct and remit 1% or 2% CWT shall continue, commence or cease, as the case may be, effective August 1, 2021. Any taxpayer not found in the published list of TWA is deemed excluded and therefore not required to deduct and remit the 1% or 2% CWT.
Any written request by the taxpayers as a separate documentary proof for being identified as TWA, despite the publication in the newspaper of general circulation being deemed sufficient, shall be filed with the RDO and the corresponding certification shall be issued by the RDO where the concerned withholding agent is duly registered.
On local resident suppliers of goods/suppliers of services pursuant to RR 31-2020:
- General rule: not to include casual purchase of goods/services made from non-regular supplier (regular supplier involves at least 6 transactions, regardless of the amount per transaction either in the previous or current year)
- Exception: single purchase involving P10,000 or more is subject to withholding.

BIR RULINGS

No transfer of shares of stocks, by way of inheritance, to any new owner shall be made in the books of any corporation unless a certification from the BIR that the estate taxes due have been paid is shown. In case of scripless shares where there are no certificate of shares as the same is electronically traded, certification issued by the stock broker is sufficient to process the issuance of eCertificate Authorizing Registration (eCAR)/Tax Clearance Certificate (TCL) (BIR Ruling No. OT-017-2021, February 4, 2021)
Income received directly in connection with sale of socialized housing units, a project duly registered with the Housing and Land Use Regulatory Board (HLURB), to qualified is not subject to creditable withholding tax and VAT. (Certificate of Tax Exemption No. PSH-019-21, February 4, 2021)
Professional fees paid to specialty contractors, whose line of business requires special skills such as feasibility study, planning and structural design, are subject to 2% withholding tax (BIR Ruling No. OT-024-21, February 17, 2021)
In the absence of a retirement plan or other agreement providing for the retirement benefits of employees, the retirement under the Labor Code shall apply, where at least ½ month salary for every year of service of an employee who has reached the age of 60 but not more than 65, and rendered at least 5 years of service in the company. Such retirement benefits of employees who meet the foregoing criteria shall be exempt from withholding tax. (BIR Ruling No. OT 025-21, February 17, 2021)
Income received from the sale of electricity directly in connection with the registered project related to renewable energy duly registered with the Board of Investments within the approved period is exempt from income tax and creditable withholding tax. However, the exemption does not cover revenues from the sale of electricity generated from non-renewable energy sources as well as revenues of electricity sourced from the wholesale electricity spot market (Certificate of Tax Exemption No. BOI-OP-026-2021)

THE SEC EXTENDS DEADLINE FOR THE SUBMISSION OF FORMS/NOTICES PURSUANT TO MEMORANDUM CIRCULAR NO. 28, SERIES OF 2020 WITHOUT PENALTY UNTIL AUGUST 31, 20201(SEC Notice, July 15, 2021)

The BIR circularizes the lists of withholding agents required to deduct and remit the 1% or 2% Creditable Withholding Tax (CWT) for the Purchase of Goods and Services under Revenue Regulations No. 3l-2020.
Top Withholding Agents (TWAs) are required to deduct and remit either 1% or 2% creditable withholding tax from the income payments to their suppliers of goods and services, respectively.
Obligation to deduct and remit 1% or 2% CWT shall continue, commence or cease, as the case may be, effective August 1, 2021. Any taxpayer not found in the published list of TWA is deemed excluded and therefore not required to deduct and remit the 1% or 2% CWT.
Any written request by the taxpayers as a separate documentary proof for being identified as TWA, despite the publication in the newspaper of general circulation being deemed sufficient, shall be filed with the RDO and the corresponding certification shall be issued by the RDO where the concerned withholding agent is duly registered.
On local resident suppliers of goods/suppliers of services pursuant to RR 31-2020:
- General rule: not to include casual purchase of goods/services made from non-regular supplier (regular supplier involves at least 6 transactions, regardless of the amount per transaction either in the previous or current year)
- Exception: single purchase involving P10,000 or more is subject to withholding.

BIR RULINGS

No transfer of shares of stocks, by way of inheritance, to any new owner shall be made in the books of any corporation unless a certification from the BIR that the estate taxes due have been paid is shown. In case of scripless shares where there are no certificate of shares as the same is electronically traded, certification issued by the stock broker is sufficient to process the issuance of eCertificate Authorizing Registration (eCAR)/Tax Clearance Certificate (TCL) (BIR Ruling No. OT-017-2021, February 4, 2021)
Income received directly in connection with sale of socialized housing units, a project duly registered with the Housing and Land Use Regulatory Board (HLURB), to qualified is not subject to creditable withholding tax and VAT. (Certificate of Tax Exemption No. PSH-019-21, February 4, 2021)
Professional fees paid to specialty contractors, whose line of business requires special skills such as feasibility study, planning and structural design, are subject to 2% withholding tax (BIR Ruling No. OT-024-21, February 17, 2021)
In the absence of a retirement plan or other agreement providing for the retirement benefits of employees, the retirement under the Labor Code shall apply, where at least ½ month salary for every year of service of an employee who has reached the age of 60 but not more than 65, and rendered at least 5 years of service in the company. Such retirement benefits of employees who meet the foregoing criteria shall be exempt from withholding tax. (BIR Ruling No. OT 025-21, February 17, 2021)
Income received from the sale of electricity directly in connection with the registered project related to renewable energy duly registered with the Board of Investments within the approved period is exempt from income tax and creditable withholding tax. However, the exemption does not cover revenues from the sale of electricity generated from non-renewable energy sources as well as revenues of electricity sourced from the wholesale electricity spot market (Certificate of Tax Exemption No. BOI-OP-026-2021)

THE SEC EXTENDS DEADLINE FOR THE SUBMISSION OF FORMS/NOTICES PURSUANT TO MEMORANDUM CIRCULAR NO. 28, SERIES OF 2020 WITHOUT PENALTY UNTIL AUGUST 31, 20201(SEC Notice, July 15, 2021)

IMPLEMENTING PENALTY PROVISIONS UNDER THE TRAIN LAW (Revenue Regulations No.13-2021)

July 12, 2021

Attempt to evade or defeat tax	Fine: P500,000 to P10,000,000 and Imprisonment: 6 years to 10 years upon conviction Conviction or acquittal shall not be a bar to the filing of civil suit for the collection of taxes
Receipt/Invoice Printing-Related Violations Printing of receipts or sales or commercial invoices without authority from the BIR; or Printing of double or multiple sets of invoices/receipts; or Printing of unnumbered receipts or sales or commercial invoices, not bearing the name, business style, TIN, business address of the person or entity; or Printing of other fraudulent receipts or sales or commercial invoices	Fine: P500,000 to P10,000,000 and Imprisonment: 6 years to 10 years upon conviction
Failure to transmit sales data	Penalty for each day of violation whichever is higher: 1/10 of 1% of the annual net income as reflected in the taxpayer’s AFS for the second year preceding the current taxable year; or 10,000 Additional penalty: permanent closure of the taxpayer if the aggregate number of days of violation exceeded 180 days within the taxable year Penalty not applicable: failure to file is due to force majeure or any causes beyond the control of the taxpayer
Purchase, use, possession, sale, or offer to sell, installation, or transfer, update, upgrade, keeping or maintaining of sales suppression devices	Fine: P500,000 to P10,000,000; and Imprisonment: 2 to 4 years upon conviction
Offenses related to fuel marketing	List of Penalty

CLARIFICATION ON SUSPENSION OF THE STATUTE OF LIMITATIONS ON ASSESSMENT AND COLLECTION OF TAXES DUE TO THE DECLARATION OF QUARANTINE IN NCR PLUS (RMC No. 80-2021)

Period to assess	Number of days the particular area was placed under ECQ and MECQ plus 60 days
Jurisdictions Covered	NCR Plus (Metro Manila, Bulacan, Cavite, Laguna and Rizal Province
Actions covered by extension	Issuance of Assessment Notices, Warrants of Distraints and/or levy, as well as Warrants of Garnishments

	Old Prescriptive period	New Prescriptive Due Date per RMC 136-2020	Due to Declaration of ECQ and MECQ	Number of Declared ECQ and MECQ Days
Case 1	April 15, 2021	August 30, 2021	December 15, 2021	47 days + 60
Case 2	April 15, 2021	August 30, 2021	November 19, 2021	21 days + 60
Case 3	August 15, 2021	December 30, 2021	March 28, 2022	21 days + 60

LIST OF VAT-EXEMPT PRODUCTS (Revenue Memorandum Circular No. 81-2021, July6, 2021)

VAT-exempt Products	Effectivity Date
Medicines for diabetes, high cholesterol, and hypertension	Beginning January 1, 2020
Medicines for cancer, mental illness, tuberculosis, and kidney diseases	Beginning January 1, 2021
Drugs and vaccines prescribed and directly used for COVID-19 treatment	Beginning January 1, 2021 until December 31, 2023
Medical devices directly used for COVID-19 treatment	Beginning January 1, 2021 until December 31, 2023

BIR RULINGS

Deed of conveyance to be used for socialized housing projects is not subject to creditable withholding tax/capital gains tax, documentary stamp tax and VAT. Certificate Authorizing Registration is required to be issued. (Certificate of Tax Exemption No. NSH-011-21, February 2, 2021)
When assets are abandoned or discarded because the continued use is no longer beneficial to the business, the related loss may be claimed as a deduction. Thus, where the power plant had become obsolete and which will eventually be dismantled, the remaining book value shall be allowed as deduction for income tax purposes when the facility is demolished. (BIR Ruling No. OT-008-21, January 21, 2021)
Services performed in the Philippines by a VAT-registered person to non-resident foreign corporation is subject to zero-rated VAT provided that (a) the services must be rendered to persons engaged in business outside the Philippines, or to non-resident foreign clients not engaged in business who are outside the Philippines when services are performed; and (b) fees must be paid to the domestic corporation in acceptable foreign currency and accounted for in accordance with the rules and regulations of the BSP (BIR Ruling No. VAT 014-21, February 3, 2021)
The importation and distribution/sale of agricultural products in its original state for human consumption are considered exempt from 12% VAT. Agricultural products are considered in its original state even if these have undergone the simple process of preparation or preservation for the market such as freezing, drying, salting, broiling, roasting, or stripping. The type of processing is limited to the aforementioned simple process. Otherwise, the same may no longer be considered agricultural products in its original state. Moreover, the VAT exemption is limited in application- it refers only to food products intended for human consumption. Roasted coffee beans and ground coffee are considered agricultural products in its original state, the importation and distribution/.sale thereof are exempt from VAT (BIR Ruling No. VAT-016-21, February 4, 2021)

Attempt to evade or defeat tax	Fine: P500,000 to P10,000,000 and Imprisonment: 6 years to 10 years upon conviction Conviction or acquittal shall not be a bar to the filing of civil suit for the collection of taxes
Receipt/Invoice Printing-Related Violations Printing of receipts or sales or commercial invoices without authority from the BIR; or Printing of double or multiple sets of invoices/receipts; or Printing of unnumbered receipts or sales or commercial invoices, not bearing the name, business style, TIN, business address of the person or entity; or Printing of other fraudulent receipts or sales or commercial invoices	Fine: P500,000 to P10,000,000 and Imprisonment: 6 years to 10 years upon conviction
Failure to transmit sales data	Penalty for each day of violation whichever is higher: 1/10 of 1% of the annual net income as reflected in the taxpayer’s AFS for the second year preceding the current taxable year; or 10,000 Additional penalty: permanent closure of the taxpayer if the aggregate number of days of violation exceeded 180 days within the taxable year Penalty not applicable: failure to file is due to force majeure or any causes beyond the control of the taxpayer
Purchase, use, possession, sale, or offer to sell, installation, or transfer, update, upgrade, keeping or maintaining of sales suppression devices	Fine: P500,000 to P10,000,000; and Imprisonment: 2 to 4 years upon conviction
Offenses related to fuel marketing	List of Penalty

CLARIFICATION ON SUSPENSION OF THE STATUTE OF LIMITATIONS ON ASSESSMENT AND COLLECTION OF TAXES DUE TO THE DECLARATION OF QUARANTINE IN NCR PLUS (RMC No. 80-2021)

Period to assess	Number of days the particular area was placed under ECQ and MECQ plus 60 days
Jurisdictions Covered	NCR Plus (Metro Manila, Bulacan, Cavite, Laguna and Rizal Province
Actions covered by extension	Issuance of Assessment Notices, Warrants of Distraints and/or levy, as well as Warrants of Garnishments

	Old Prescriptive period	New Prescriptive Due Date per RMC 136-2020	Due to Declaration of ECQ and MECQ	Number of Declared ECQ and MECQ Days
Case 1	April 15, 2021	August 30, 2021	December 15, 2021	47 days + 60
Case 2	April 15, 2021	August 30, 2021	November 19, 2021	21 days + 60
Case 3	August 15, 2021	December 30, 2021	March 28, 2022	21 days + 60

LIST OF VAT-EXEMPT PRODUCTS (Revenue Memorandum Circular No. 81-2021, July6, 2021)

VAT-exempt Products	Effectivity Date
Medicines for diabetes, high cholesterol, and hypertension	Beginning January 1, 2020
Medicines for cancer, mental illness, tuberculosis, and kidney diseases	Beginning January 1, 2021
Drugs and vaccines prescribed and directly used for COVID-19 treatment	Beginning January 1, 2021 until December 31, 2023
Medical devices directly used for COVID-19 treatment	Beginning January 1, 2021 until December 31, 2023

BIR RULINGS

Deed of conveyance to be used for socialized housing projects is not subject to creditable withholding tax/capital gains tax, documentary stamp tax and VAT. Certificate Authorizing Registration is required to be issued. (Certificate of Tax Exemption No. NSH-011-21, February 2, 2021)
When assets are abandoned or discarded because the continued use is no longer beneficial to the business, the related loss may be claimed as a deduction. Thus, where the power plant had become obsolete and which will eventually be dismantled, the remaining book value shall be allowed as deduction for income tax purposes when the facility is demolished. (BIR Ruling No. OT-008-21, January 21, 2021)
Services performed in the Philippines by a VAT-registered person to non-resident foreign corporation is subject to zero-rated VAT provided that (a) the services must be rendered to persons engaged in business outside the Philippines, or to non-resident foreign clients not engaged in business who are outside the Philippines when services are performed; and (b) fees must be paid to the domestic corporation in acceptable foreign currency and accounted for in accordance with the rules and regulations of the BSP (BIR Ruling No. VAT 014-21, February 3, 2021)
The importation and distribution/sale of agricultural products in its original state for human consumption are considered exempt from 12% VAT. Agricultural products are considered in its original state even if these have undergone the simple process of preparation or preservation for the market such as freezing, drying, salting, broiling, roasting, or stripping. The type of processing is limited to the aforementioned simple process. Otherwise, the same may no longer be considered agricultural products in its original state. Moreover, the VAT exemption is limited in application- it refers only to food products intended for human consumption. Roasted coffee beans and ground coffee are considered agricultural products in its original state, the importation and distribution/.sale thereof are exempt from VAT (BIR Ruling No. VAT-016-21, February 4, 2021)

EXCISE TAX ON REMOVAL OF SWEETENED BEVERAGES PRODUCTS FOR EXPORT (Revenue Regulations No. 10-2021, June 17, 2021)

June 24, 2021

EXCISE TAX ON REMOVAL OF SWEETENED BEVERAGES PRODUCTS FOR EXPORT (Revenue Regulations No. 10-2021, June 17, 2021)

The BIR amends pertinent provisions of Section 10 under RR No. 20-2018 relative to the outright exemption granted to the exportation of Sweetened Beverages products.
Manufacturer shall pay the excise tax on every removal from the place of production.
After payment of tax, manufacturers at its option may file a claim for excise tax credit/refund; or avail of a claim for product replenishment scheme, subject to terms and conditions:
- Permit shall be per shipment secured from the BIR Office before the product is removed from the place of production;
- Removed products shall be directly transported, loaded aboard the international shipping vessel or carrier, and shipped directly to the foreign country of destination without returning to the Philippines;
- Proof of exportation shall be submitted within 30 days from the date of actual date of exportation, subject to one time maximum 30-day extension to submit documents for meritorious reasons;
- “Exported from the Philippines” is printed on each label that is attached/affixed on the primary container in a recognizable and readable manner.

Effect of failure to submit proof of exportation within the prescribed period

Non-exportation of the particular article subjected to applicable taxes, inclusive of penalties;
Subsequent issuance of export permits shall not be allowed, unless the assessed tax due on unliquidated export and penalties have been paid;
Proof of payment shall accompany subsequent application permit.

CLARIFICATIONS ON TAX TREATY RELIEF APPLICATION/REQUEST FOR CONFIRMATION (RMC No. 77-2021, June 15,2021)

The BIR clarifies certain provisions of Revenue Memorandum Order No. 14-2021 related to tax treaty relief application/request for confirmation.

Who may avail of treaty benefits	Natural or juridical persons Residents of one or both of the contracting states Non-resident income recipient should submit a Tax Residency Certificate (TRC) duly issued by the tax authority of the country of residence for purposes of establishing fact of residency in a contracting state
Failure to submit TRC	Non-resident’s claim shall be denied.
Where to apply	International Tax Affairs Division
When provisions of the applicable treaty shall be applied	When nonresident submitted to the income payor TRC; and Appropriate BIR Form 0901 Prior to the payment of income Provided that all conditions for the availment have been present
Mandatory requirement to file a Request for Confirmation (RFC)	To be filed by the withholding agent/income payor, domestic or foreign (for nonresident income payor-withholding agent, it is mandatory to appoint a authorized representative in the Philippines) To confirm that the tax treatment of such income is proper Income payor may authorize the nonresident or any other person to file such request for an on its behalf, provided that the latter is required with special power of attorney.
Deadlines	Capital Gains	At any time after the transaction But shall not be later than the last day of the 4^th month following the taxable year when the income is paid or when the transaction is consummated
	Other types of income	At any time after the close of the taxable year But not later than the last day of the 4^th month following the close of such taxable year when the income is paid or becomes payable, or when the expense/asset is accrued or recorded in the books, whichever comes first
Consolidated request for confirmation per nonresident income recipient	Case folder shall be pre-arranged per type of income following the sequence of documents in the list of requirements.
Number of TRC in case of multiple income for the year	1 original and authenticated TRC to be submitted to each income payor/withholding agent per year. Alternatively, a certified true copy of the original may be submitted to other payors if the original copy is no longer available, with a notation as to whom the original copy was previously submitted. Same rule applies to the following: Proof of establishment or incorporation Certificate of Non-registration or License to Do Business in PH by SEC Certificate of Business Registration/Presence by DTI
When regular rate was applied instead of treaty rate	Nonresident or authorized representative, should file a TTRA with complete documentary requirements and a claim for refund at any time after the payment of the withholding tax
When annual updating is/not mandatory	In case of long term contracts involving payment of interest and royalties and other types of income where condition for entitlement to treaty benefits is not dependent on time threshold		Not mandatory. BIR will issue a one-time Certificate of Entitlement to Treaty Benefit (COE) that is presumably valid for the whole duration of the contract as long as there is no relevant and significant change in the facts or circumstances on which the ruling is based; new request for confirmation to be filed in case of material changes in the facts or circumstances.
	In case of long term contracts where the existence of permanent establishment is dependent on the time threshold		Annual updating is mandatory; COE is limited to a particular period of engagement.
Proof that income is not effectively connected with permanent establishment of the nonresident foreign enterprise	AFS of the foreign enterprise; if not available, sworn certification signed by the principal officer of the PE, containing material facts that may lead the BIR to believe that the income is not effectively connected with the PE and that the PE is not material to the realization of such income. ITAD may also require AFS of the PE if the same is already available
Proof that interest on loan or debt-claims is arm’s length in case of related parties debtor and creditor	Transfer pricing documentation of the nonresident creditor; If unavailable, transfer pricing policy for intercompany loans or any equivalent transfer pricing study
Audited interim FS for capital gains transactions	Not mandatory; only preferred for purposes of computing the real property interest of the issuing domestic corporation at the time of the transaction. Alternative documents: Unaudited interim FS; and Lapsing schedule as of the date of transfer or alienation of the property
No automatic denial for failure to file the RFC within the prescribed period	Denials will purely be based on the merits of the case; only penalty for late filing shall be imposed
Extension of time within which to submit additional documents	Not exceeding 30 days
Pending TTRAs within Notice to Submit Additional Documents	Final Notice to Submit Additional Documents shall be issued within 3 months period to comply Archived applications: Final Notice will no longer be issued but taxpayer is given 4 months to comply
COE instead of usual BIR ruling	COE will still contain the material facts of the case and a ruling confirming entitlement to treaty benefit
No TTRA or CORTT Form filed for income payments in 2020 and prior years	Withholding agent has until the last working day of this year to file the RFC with complete requirements
AFS as requirement for dividends	AFS as of the taxable year immediately preceding the date of declaration, which was duly filed with the BIR and SEC

EXCISE TAX ON REMOVAL OF SWEETENED BEVERAGES PRODUCTS FOR EXPORT (Revenue Regulations No. 10-2021, June 17, 2021)

The BIR amends pertinent provisions of Section 10 under RR No. 20-2018 relative to the outright exemption granted to the exportation of Sweetened Beverages products.
Manufacturer shall pay the excise tax on every removal from the place of production.
After payment of tax, manufacturers at its option may file a claim for excise tax credit/refund; or avail of a claim for product replenishment scheme, subject to terms and conditions:
- Permit shall be per shipment secured from the BIR Office before the product is removed from the place of production;
- Removed products shall be directly transported, loaded aboard the international shipping vessel or carrier, and shipped directly to the foreign country of destination without returning to the Philippines;
- Proof of exportation shall be submitted within 30 days from the date of actual date of exportation, subject to one time maximum 30-day extension to submit documents for meritorious reasons;
- “Exported from the Philippines” is printed on each label that is attached/affixed on the primary container in a recognizable and readable manner.

Effect of failure to submit proof of exportation within the prescribed period

Non-exportation of the particular article subjected to applicable taxes, inclusive of penalties;
Subsequent issuance of export permits shall not be allowed, unless the assessed tax due on unliquidated export and penalties have been paid;
Proof of payment shall accompany subsequent application permit.

CLARIFICATIONS ON TAX TREATY RELIEF APPLICATION/REQUEST FOR CONFIRMATION (RMC No. 77-2021, June 15,2021)

The BIR clarifies certain provisions of Revenue Memorandum Order No. 14-2021 related to tax treaty relief application/request for confirmation.

Who may avail of treaty benefits	Natural or juridical persons Residents of one or both of the contracting states Non-resident income recipient should submit a Tax Residency Certificate (TRC) duly issued by the tax authority of the country of residence for purposes of establishing fact of residency in a contracting state
Failure to submit TRC	Non-resident’s claim shall be denied.
Where to apply	International Tax Affairs Division
When provisions of the applicable treaty shall be applied	When nonresident submitted to the income payor TRC; and Appropriate BIR Form 0901 Prior to the payment of income Provided that all conditions for the availment have been present
Mandatory requirement to file a Request for Confirmation (RFC)	To be filed by the withholding agent/income payor, domestic or foreign (for nonresident income payor-withholding agent, it is mandatory to appoint a authorized representative in the Philippines) To confirm that the tax treatment of such income is proper Income payor may authorize the nonresident or any other person to file such request for an on its behalf, provided that the latter is required with special power of attorney.
Deadlines	Capital Gains	At any time after the transaction But shall not be later than the last day of the 4^th month following the taxable year when the income is paid or when the transaction is consummated
	Other types of income	At any time after the close of the taxable year But not later than the last day of the 4^th month following the close of such taxable year when the income is paid or becomes payable, or when the expense/asset is accrued or recorded in the books, whichever comes first
Consolidated request for confirmation per nonresident income recipient	Case folder shall be pre-arranged per type of income following the sequence of documents in the list of requirements.
Number of TRC in case of multiple income for the year	1 original and authenticated TRC to be submitted to each income payor/withholding agent per year. Alternatively, a certified true copy of the original may be submitted to other payors if the original copy is no longer available, with a notation as to whom the original copy was previously submitted. Same rule applies to the following: Proof of establishment or incorporation Certificate of Non-registration or License to Do Business in PH by SEC Certificate of Business Registration/Presence by DTI
When regular rate was applied instead of treaty rate	Nonresident or authorized representative, should file a TTRA with complete documentary requirements and a claim for refund at any time after the payment of the withholding tax
When annual updating is/not mandatory	In case of long term contracts involving payment of interest and royalties and other types of income where condition for entitlement to treaty benefits is not dependent on time threshold		Not mandatory. BIR will issue a one-time Certificate of Entitlement to Treaty Benefit (COE) that is presumably valid for the whole duration of the contract as long as there is no relevant and significant change in the facts or circumstances on which the ruling is based; new request for confirmation to be filed in case of material changes in the facts or circumstances.
	In case of long term contracts where the existence of permanent establishment is dependent on the time threshold		Annual updating is mandatory; COE is limited to a particular period of engagement.
Proof that income is not effectively connected with permanent establishment of the nonresident foreign enterprise	AFS of the foreign enterprise; if not available, sworn certification signed by the principal officer of the PE, containing material facts that may lead the BIR to believe that the income is not effectively connected with the PE and that the PE is not material to the realization of such income. ITAD may also require AFS of the PE if the same is already available
Proof that interest on loan or debt-claims is arm’s length in case of related parties debtor and creditor	Transfer pricing documentation of the nonresident creditor; If unavailable, transfer pricing policy for intercompany loans or any equivalent transfer pricing study
Audited interim FS for capital gains transactions	Not mandatory; only preferred for purposes of computing the real property interest of the issuing domestic corporation at the time of the transaction. Alternative documents: Unaudited interim FS; and Lapsing schedule as of the date of transfer or alienation of the property
No automatic denial for failure to file the RFC within the prescribed period	Denials will purely be based on the merits of the case; only penalty for late filing shall be imposed
Extension of time within which to submit additional documents	Not exceeding 30 days
Pending TTRAs within Notice to Submit Additional Documents	Final Notice to Submit Additional Documents shall be issued within 3 months period to comply Archived applications: Final Notice will no longer be issued but taxpayer is given 4 months to comply
COE instead of usual BIR ruling	COE will still contain the material facts of the case and a ruling confirming entitlement to treaty benefit
No TTRA or CORTT Form filed for income payments in 2020 and prior years	Withholding agent has until the last working day of this year to file the RFC with complete requirements
AFS as requirement for dividends	AFS as of the taxable year immediately preceding the date of declaration, which was duly filed with the BIR and SEC

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SEC Updates December 5-11 2022

December 19, 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)

September 23, 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

September 23, 2022

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Court of Tax Appeals Decisions Articles

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Security and Exchange Commission Articles

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Bureau of Internal Revenue Articles

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GUIDELINES ON CORPORATE DISSOLUTION UNDER SECTIONS 134, 136 AND 138 OF THE REVISED CORPORATION CODE.

March 16, 2022

DISQUALIFICATION OF DIRECTORS, TRUSTEES AND OFFICERS OF CORPORATIONS; AND THE GUIDELINES ON THE PROCEDURE FOR THEIR REMOVAL.

March 7, 2022

THE BIR PROVIDES TAX COMPLIANCE REMINDERS FOR THE MAY 9, 2022 NATIONAL AND LOCAL ELECTIONS

February 28, 2022

PRESCRIBES THE GUIDELINES IN THE CLAIM OF INPUT VAT ON PURCHASES OR IMPORTATIONS OF CAPITAL GOODS PURSUANT TO SECTION 110 OF THE TAX CODE, AS AMENDED BY RA NO. 10963 (TRAIN LAW)

February 28, 2022

GUIDANCE ON THE FILING OF REQUEST FOR CONFIRMATION, TAX TREATY RELIEF APPLICATIONS AND TAX SPARING APPLICATIONS

February 28, 2022

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Competence. Integrity. Commitment.

BIR RULINGS

VAT IMPOSITION ON EXPORT SALES UNDER EXECUTIVE ORDER NO. 226, OTHERWISE KNOWN AS THE OMNIBUS INVESTMENTS CODE OF 1987, AND OTHER SPECIAL LAW AND OTHERS TRANSACTIONS IS SUSPENDED. (Revenue Regulations No. 15-2021, July 21, 2021)

“NON-PROFIT” AS DEFINITION OF PROPRIETARY EDUCATIONAL INSTITUTIONS IS SUSPENDED (Revenue Regulations No. 14-2021, July 26, 2021)

OBLIGATION TO DEDUCT AND REMIT 1% OR 2% CWT SHALL CONTINUE, COMMENCE OR CEASE, AS THE CASE MAY BE, EFFECTIVE AUGUST 1, 2021. ANY TAXPAYER NOT FOUND IN THE PUBLISHED LIST OF TWA IS DEEMED EXCLUDED AND THEREFORE NOT REQUIRED TO DEDUCT AND REMIT THE 1% OR 2% CWT. (RMC No. 88-2021, July 16, 2021)

IMPLEMENTING PENALTY PROVISIONS UNDER THE TRAIN LAW (Revenue Regulations No.13-2021)

EXCISE TAX ON REMOVAL OF SWEETENED BEVERAGES PRODUCTS FOR EXPORT (Revenue Regulations No. 10-2021, June 17, 2021)

Articles

Archives

Archives

Recent Articles

SEC Updates December 5-11 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

Court of Tax Appeals Decisions Articles

Security and Exchange Commission Articles

Bureau of Internal Revenue Articles

Recent Articles

GUIDELINES ON CORPORATE DISSOLUTION UNDER SECTIONS 134, 136 AND 138 OF THE REVISED CORPORATION CODE.

DISQUALIFICATION OF DIRECTORS, TRUSTEES AND OFFICERS OF CORPORATIONS; AND THE GUIDELINES ON THE PROCEDURE FOR THEIR REMOVAL.

THE BIR PROVIDES TAX COMPLIANCE REMINDERS FOR THE MAY 9, 2022 NATIONAL AND LOCAL ELECTIONS

PRESCRIBES THE GUIDELINES IN THE CLAIM OF INPUT VAT ON PURCHASES OR IMPORTATIONS OF CAPITAL GOODS PURSUANT TO SECTION 110 OF THE TAX CODE, AS AMENDED BY RA NO. 10963 (TRAIN LAW)

GUIDANCE ON THE FILING OF REQUEST FOR CONFIRMATION, TAX TREATY RELIEF APPLICATIONS AND TAX SPARING APPLICATIONS