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SALE OF HOUSE AND LOT AND OTHER RESIDENTIAL DWELLINGS IS EXEMPT FROM VAT FOR SELLING PRICE NOT EXCEEDING P3,199,200.00 DESPITE THE TRAIN LAW; AUTHORITY TO RELEASE IMPORTED GOODS SHALL NO LONGER BE ISSUED FOR COVID-19 EQUIPMENT.

June 14, 2021

 

 Transaction  Amendments
  • Sale of house and lot and other residential dwellings
 Exempt from VAT for selling price not exceeding P3,199,200.00
  • Release of the following imported items:
    • Capital equipment, its spare parts and raw materials, necessary for the production of personal protective equipment components such as coveralls, gown, surgical cap, surgical mask, n-95 mask, scrub suits, goggles and face shield, double or surgical gloves, dedicated shoes and  covers, for COVID-19 prevention
    • All drugs, vaccines, and medical devices specifically prescribed and directly used for the treatment of COVID-19; and
    • Drugs for the treatment of COVID-19 approved by the Food and Drug Administration (FDA) for use in clinical trials, including raw materials directly necessary for the production of such drugs.
 The importation shall not be subject to the issuance of the Authority to Release Imported Goods (ATRIG) under Revenue Memorandum Order No. 35-2002
Overpayment of taxes as result of decrease of tax rate from 3% to 1% Percentage taxpayers who have overpaid taxes as a result of the decrease of tax rate from 3% to 1% starting July 1, 2020 until the effectivity of RR No. 4-2021 are allowed for a tax refund in the event that:

  • The taxpayer shifted from Non-VAT to VAT-registered status; or
  •  The taxpayer has opted to avail of the 8% income tax rate at the beginning of TY 2021

 

TRANSACTIONS NOW SUBJECT TO VAT: SALE OF RAW MATERIALS TO NONRESIDENT BUYER, RAW MATERIALS OR PACKAGING MATERIALS TO EXPORT ORIENTED ENTERPRISE AND SALES UNDER EXECUTIVE ORDER NO. 226, PROCESSING, MANUFACTURING OR REPACKAGING GOODS FOR PERSONS DOING BUSINESS OUTSIDE THE PHILIPPINES.

 

The BIR amends certain provisions of RR No. 16-2005, as amended by RR No. 13-2018 and as further amended by RR No. 26-2018, to implement the imposition of 12% VAT on transactions covered under Section 106 (A)(2)(a) subparagraphs (3), (4), and (5), and Section 108(B) subparagraphs (1) and (5) of the NIRC of 1997, as amended by RA No. 10963 (TRAIN Law) (RR No. 9-2021, June 11, 2021)

 

Transactions that are now subject to 12%
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

 

BIR RULINGS

Sale executed by landowners in favor of the municipal government to be used for socialized housing project (449 housing units) under the National Housing Authority Yolanda Permanent Housing Program is not subject to creditable withholding tax/capital gains tax and VAT but subject to documentary stamp tax based on actual consideration of the property. Certificate Authorizing Registration is required to be issued. A lien on the titles of the land shall be annotated to the effect that the same are to be applied or are being applied to a socialized housing project. (Certificate of Tax Exemption No. PSH-006-21 January 18, 2021; see also Certificate of Tax Exemption No. PSH-007-21, January 18, 2021 and Certificate of Tax Exemption No. JV-009-21, January 27, 2021, 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 deduction. The remaining book value of the property which had become obsolete and which will eventually be dismantled shall be allowed as deduction for income tax purposes when the facility is demolished. However, while obsolescence is, by nature, allowed as a deduction, the determination of the factual case leading to the determination of whether or not there is obsolescence is a factual issue beyond the jurisdiction of a ruling to confirm (BIR Ruling No. OT-008-21, January 21, 2021)

The BIR cannot issue a determinative ruling on a matter if the issue is still subject of an on-going audit/administrative protest, which is considered a “Non-Ruling Area” (BIR Ruling No. OT-010-21, February 1, 2021)

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 Transaction  Amendments
  • Sale of house and lot and other residential dwellings
 Exempt from VAT for selling price not exceeding P3,199,200.00
  • Release of the following imported items:
    • Capital equipment, its spare parts and raw materials, necessary for the production of personal protective equipment components such as coveralls, gown, surgical cap, surgical mask, n-95 mask, scrub suits, goggles and face shield, double or surgical gloves, dedicated shoes and  covers, for COVID-19 prevention
    • All drugs, vaccines, and medical devices specifically prescribed and directly used for the treatment of COVID-19; and
    • Drugs for the treatment of COVID-19 approved by the Food and Drug Administration (FDA) for use in clinical trials, including raw materials directly necessary for the production of such drugs.
 The importation shall not be subject to the issuance of the Authority to Release Imported Goods (ATRIG) under Revenue Memorandum Order No. 35-2002
Overpayment of taxes as result of decrease of tax rate from 3% to 1% Percentage taxpayers who have overpaid taxes as a result of the decrease of tax rate from 3% to 1% starting July 1, 2020 until the effectivity of RR No. 4-2021 are allowed for a tax refund in the event that:

  • The taxpayer shifted from Non-VAT to VAT-registered status; or
  •  The taxpayer has opted to avail of the 8% income tax rate at the beginning of TY 2021

 

TRANSACTIONS NOW SUBJECT TO VAT: SALE OF RAW MATERIALS TO NONRESIDENT BUYER, RAW MATERIALS OR PACKAGING MATERIALS TO EXPORT ORIENTED ENTERPRISE AND SALES UNDER EXECUTIVE ORDER NO. 226, PROCESSING, MANUFACTURING OR REPACKAGING GOODS FOR PERSONS DOING BUSINESS OUTSIDE THE PHILIPPINES.

 

The BIR amends certain provisions of RR No. 16-2005, as amended by RR No. 13-2018 and as further amended by RR No. 26-2018, to implement the imposition of 12% VAT on transactions covered under Section 106 (A)(2)(a) subparagraphs (3), (4), and (5), and Section 108(B) subparagraphs (1) and (5) of the NIRC of 1997, as amended by RA No. 10963 (TRAIN Law) (RR No. 9-2021, June 11, 2021)

 

Transactions that are now subject to 12%
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

 

BIR RULINGS

Sale executed by landowners in favor of the municipal government to be used for socialized housing project (449 housing units) under the National Housing Authority Yolanda Permanent Housing Program is not subject to creditable withholding tax/capital gains tax and VAT but subject to documentary stamp tax based on actual consideration of the property. Certificate Authorizing Registration is required to be issued. A lien on the titles of the land shall be annotated to the effect that the same are to be applied or are being applied to a socialized housing project. (Certificate of Tax Exemption No. PSH-006-21 January 18, 2021; see also Certificate of Tax Exemption No. PSH-007-21, January 18, 2021 and Certificate of Tax Exemption No. JV-009-21, January 27, 2021, 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 deduction. The remaining book value of the property which had become obsolete and which will eventually be dismantled shall be allowed as deduction for income tax purposes when the facility is demolished. However, while obsolescence is, by nature, allowed as a deduction, the determination of the factual case leading to the determination of whether or not there is obsolescence is a factual issue beyond the jurisdiction of a ruling to confirm (BIR Ruling No. OT-008-21, January 21, 2021)

The BIR cannot issue a determinative ruling on a matter if the issue is still subject of an on-going audit/administrative protest, which is considered a “Non-Ruling Area” (BIR Ruling No. OT-010-21, February 1, 2021)

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THE SEC EXTENDS THE DEADLINE TO SUBMIT MANDATORY DECLARATIONS UNDER BENEFICIAL OWNERSHIP GUIDELINES TO JULY 31, 2021 (SEC Notice, May 28, 2021)

June 1, 2021

SECURITIES AND EXCHANGE COMMISSION

 

THE SEC EXTENDS THE DEADLINE TO SUBMIT MANDATORY DECLARATIONS UNDER BENEFICIAL OWNERSHIP GUIDELINES TO JULY 31, 2021 (SEC Notice, May 28, 2021)

 

BUREAU OF INTERNAL REVENUE

 

QUARTERLY RETURNS TO BE USED TO REFLECT NEW RATES UNDER CREATE LAW

 

  • The BIR prescribes the guidelines in the filing of Quarterly Percentage Tax Return (BIR Form No. 2551Q) starting on the quarter ending July 31, 2020

 

 

BIR Form No. 1702Q January 2018
  • Available in EFPS
  • Reduced rate per CREATE Act is included.
  • EFPS files may also use 1702Q using Offline e-BIR Forms Package v.7.9.1, but shall proceed to payment using the eFPS facility. (RMC No. 68-2021, May 26, 2021)
 

BIR Form No. 1702Qv2008C
  • 2008 version shall be used for eBIR Forms
  • 2018 version is not yet available
  • Version is available in eBIR Forms Package v.9.1
  • Payment may be made either manually or online

 

  •  Revenue Memorandum Circular  66-2021, May 24, 2021 and Revenue Memorandum Circular  68-2021, May 26, 2021

 

CLARIFICATIONS ON REDUCTION OF PERCENTAGE TAX FROM 3% TO 1%

 

  • The BIR clarifies the issues relative to the temporary reduction of Percentage Tax rate imposed under Section 116 of the NIRC of 1997, as amended by Section 13 of RA No. 11534 (CREATE Act)

 

Points for clarification Treatment
Decrease of percentage tax rate from 3% to 1%

(July 1, 2020 to June 30, 2023)

 Applies to:

  • Corporate taxpayers and Self-employed individuals and professionals; and
  • Whose gross sales or receipts do not exceed P3 Million

Exception: Cooperatives and self-employed individuals and professionals availing 8% income tax rate
Non-VAT registered taxpayers who used 3% for Q3 and Q4 of 2020 to effectivity of IRR (RR 40-2021 April 8, 2021) implementing percentage tax
  • They need to amend their percentage tax using the 1% rate to reflect the overpaid tax.
  • Overpaid tax to be carried over the succeeding period will not be subject to penalty

 

 In case 2551Q Form only provides refund:

  • In case of manual filing - Don’t mark “to be refunded” or “to be issued TCC” but write “To be Carried Over”

In case of eFPS and eBIR Forms:

  • Option “to be Issued Tax Credit Certificate” shall be marked as a workaround procedure
  • Presumption: taxpayer will carry over
  • If refund is applicable, file BIR From 1914 (Application for tax credit/refund)

 
Refund for overpaid tax
  • Refund is not allowed because the intention is to carry-over the overpaid percentage tax.
  • Exception:
    • Taxpayer shifted from Non-VAT to VAT-registered status; or
    • Taxpayer has opted to avail of 8% income tax rate at the beginning of 2021
Taxpayer inadvertently marked refund or issuance of TCC but intends carry over
  • Presumption: Overpaid amount will be carried over.
  • Once carried-forward, the option is automatically superseded.
Carry-over without amendment of return to any quarter/s starting 2020 Carry-over will still be allowed.
Individual taxpayer under a job order or service agreement with the government under substituted filing
  • The government agency will avail of the refund.
  • Individuals shall issue an authorization and surrender the BIR Form 2306 to the government agency.
  • Government agencies shall amend the previously filed returns including the Alphalists but the reduction or resulting overpayment shall only be to the extent of the amount to be refunded.
Taxpayer claimed as deduction under taxes and licenses in 2020 ITR the overpaid percentage tax Carry-over or refund shall no longer be allowed.
Adjustment in the audited financial statements AFS need not be amended, but overpayment shall be reflected as a reconciling item in the amended ITR.

 

(Revenue Memorandum Circular  67-2021, May 24, 2021)

 

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SECURITIES AND EXCHANGE COMMISSION

 

THE SEC EXTENDS THE DEADLINE TO SUBMIT MANDATORY DECLARATIONS UNDER BENEFICIAL OWNERSHIP GUIDELINES TO JULY 31, 2021 (SEC Notice, May 28, 2021)

 

BUREAU OF INTERNAL REVENUE

 

QUARTERLY RETURNS TO BE USED TO REFLECT NEW RATES UNDER CREATE LAW

 

  • The BIR prescribes the guidelines in the filing of Quarterly Percentage Tax Return (BIR Form No. 2551Q) starting on the quarter ending July 31, 2020

 

 

BIR Form No. 1702Q January 2018
  • Available in EFPS
  • Reduced rate per CREATE Act is included.
  • EFPS files may also use 1702Q using Offline e-BIR Forms Package v.7.9.1, but shall proceed to payment using the eFPS facility. (RMC No. 68-2021, May 26, 2021)
 

BIR Form No. 1702Qv2008C
  • 2008 version shall be used for eBIR Forms
  • 2018 version is not yet available
  • Version is available in eBIR Forms Package v.9.1
  • Payment may be made either manually or online

 

  •  Revenue Memorandum Circular  66-2021, May 24, 2021 and Revenue Memorandum Circular  68-2021, May 26, 2021

 

CLARIFICATIONS ON REDUCTION OF PERCENTAGE TAX FROM 3% TO 1%

 

  • The BIR clarifies the issues relative to the temporary reduction of Percentage Tax rate imposed under Section 116 of the NIRC of 1997, as amended by Section 13 of RA No. 11534 (CREATE Act)

 

Points for clarification Treatment
Decrease of percentage tax rate from 3% to 1%

(July 1, 2020 to June 30, 2023)

 Applies to:

  • Corporate taxpayers and Self-employed individuals and professionals; and
  • Whose gross sales or receipts do not exceed P3 Million

Exception: Cooperatives and self-employed individuals and professionals availing 8% income tax rate
Non-VAT registered taxpayers who used 3% for Q3 and Q4 of 2020 to effectivity of IRR (RR 40-2021 April 8, 2021) implementing percentage tax
  • They need to amend their percentage tax using the 1% rate to reflect the overpaid tax.
  • Overpaid tax to be carried over the succeeding period will not be subject to penalty

 

 In case 2551Q Form only provides refund:

  • In case of manual filing – Don’t mark “to be refunded” or “to be issued TCC” but write “To be Carried Over”

In case of eFPS and eBIR Forms:

  • Option “to be Issued Tax Credit Certificate” shall be marked as a workaround procedure
  • Presumption: taxpayer will carry over
  • If refund is applicable, file BIR From 1914 (Application for tax credit/refund)

 
Refund for overpaid tax
  • Refund is not allowed because the intention is to carry-over the overpaid percentage tax.
  • Exception:
    • Taxpayer shifted from Non-VAT to VAT-registered status; or
    • Taxpayer has opted to avail of 8% income tax rate at the beginning of 2021
Taxpayer inadvertently marked refund or issuance of TCC but intends carry over
  • Presumption: Overpaid amount will be carried over.
  • Once carried-forward, the option is automatically superseded.
Carry-over without amendment of return to any quarter/s starting 2020 Carry-over will still be allowed.
Individual taxpayer under a job order or service agreement with the government under substituted filing
  • The government agency will avail of the refund.
  • Individuals shall issue an authorization and surrender the BIR Form 2306 to the government agency.
  • Government agencies shall amend the previously filed returns including the Alphalists but the reduction or resulting overpayment shall only be to the extent of the amount to be refunded.
Taxpayer claimed as deduction under taxes and licenses in 2020 ITR the overpaid percentage tax Carry-over or refund shall no longer be allowed.
Adjustment in the audited financial statements AFS need not be amended, but overpayment shall be reflected as a reconciling item in the amended ITR.

 

(Revenue Memorandum Circular  67-2021, May 24, 2021)

 

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THE SEC EXTENDS THE DEADLINE TO SUBMIT FORMS/NOTICES ON CREATION/DESIGNATION OF E-MAIL ACCOUNT ADDRESSES AND MOBILE PHONE NUMBERS FOR TRANSACTIONS WITH THE COMMISSION UNTIL JUNE 30, 2021

May 25, 2021

THE SEC EXTENDS THE DEADLINE TO SUBMIT FORMS/NOTICES ON CREATION/DESIGNATION OF E-MAIL ACCOUNT ADDRESSES AND MOBILE PHONE NUMBERS FOR TRANSACTIONS WITH THE COMMISSION UNTIL JUNE 30, 2021

  • The forms/notices of the MC 28, s. 2020 online through email platform MC28_S2020@sec.gov.ph.
  • Filing of the forms/notices beyond June 30, 2021 shall be considered as non-compliant and will be subject to penalty in the amount of P10,000.00 (SEC Notice, May 7, 2021)

 

CLARIFICATIONS ON CORPORATE INCOME TAXATION

The BIR clarifies certain provisions of Revenue Regulations (RR) No. 5-2021 relative to Corporate Income Taxation (Revenue Memorandum Circular. 62-2021, May 27, 2021)

 

Items under RR 5-2021 Clarifications
“Total Asset” in case of 20% tax rate
  • Total Assets is net of:
  • Depreciation and
  • Allowance for bad debts
  • Excluded: Land where the business entity’s office, plant and equipment are situated; amount to be excluded: Cost/fair market value, depending on what is reflected in the financial statements
  • Included:
  • Land held primarily for sale to customers or land held for investment purposes;
  •  Land being used as banana plantation
  • Land being leased
  • Portion is used in business; rest is on lease = prorate the amount of land based on the area.
Private Educational Institutions distributing dividends to stockholders
  • Rate is either 25% or 20%
  • 1% is applicable to non-profit schools*
Section 5: Conditions for exemption from income tax of foreign-sourced dividends received by domestic corporation:

 
  • If the Certification shall state non-utilization of the dividends received, the unutilized dividends shall be declared as taxable income, and the corresponding tax due shall be subject to interest, surcharges and penalties

 
Dividends received by a domestic corporation from a resident foreign corporation (RFC)
  • Tax treatment depends on the source of income of the RFC
  • Treated as derived from sources within PH (Exempt from income taxes)
  • Exception:
  • Less than fifty percent (50%) of the gross income of the foreign corporation for the three-year period ending with the close of its taxable year preceding the declaration of such dividends (or for such part of the period as the corporation has been in existence) was derived from sources within the Philippines – (Considered sourced without and must comply with Section 5 to avail of income tax exemption)

 
4th Year of Business Operation for purposes of MCIT
  • Means fourth taxable year immediately following the year in which such corporation commenced its business operation
  • Thus, if the corporation commenced its business operations in 2017, MCIT may be imposed beginning the year 2021, if it exceeds the regular income tax. The taxable year in which business operations commenced shall be the year in which the corporation is registered with the BIR

 
Additional allowable deduction of 1/2 of actual training expenses
  • No distinction as to which type of industry can claim the deduction, subject to requirements:
  • The labor training expenses shall not be more than ten percent (10%) of the Direct Labor Wage;
  • The labor training expenses are incurred for skills development of enterprise-based trainees;
  • The enterprise-based trainees are enrolled in public senior high school, public higher education institutions, or public technical and vocational institutions for the taxable year in which the labor training expenses are claimed;  The training is covered by an apprenticeship agreement under Presidential Decree (PD) No. 442 or the Labor Code of the Philippines; and:
  • The Company claiming the additional deduction is granted an authority to offer training programs for skills development as certified by the Department of Education (DepED), Technical Education and Skills Development Authority (TESDA) or Commission on Higher Education (CHED), as applicable.
  •  Training expenses which pertain to training/s of employees under supervisory, managerial, administrative and support functions should not be included in 'the computation
  • The resulting amount then shall be subject to a cap of not more than ten percent (10%) of the Direct Labor Wage. The "direct labor" is that portion of salaries and wages which can be identified with and charged directly to a product or to a project or service on a consistent basis.

 
*we do not agree.

 

 

 

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THE SEC EXTENDS THE DEADLINE TO SUBMIT FORMS/NOTICES ON CREATION/DESIGNATION OF E-MAIL ACCOUNT ADDRESSES AND MOBILE PHONE NUMBERS FOR TRANSACTIONS WITH THE COMMISSION UNTIL JUNE 30, 2021

  • The forms/notices of the MC 28, s. 2020 online through email platform MC28_S2020@sec.gov.ph.
  • Filing of the forms/notices beyond June 30, 2021 shall be considered as non-compliant and will be subject to penalty in the amount of P10,000.00 (SEC Notice, May 7, 2021)

 

CLARIFICATIONS ON CORPORATE INCOME TAXATION

The BIR clarifies certain provisions of Revenue Regulations (RR) No. 5-2021 relative to Corporate Income Taxation (Revenue Memorandum Circular. 62-2021, May 27, 2021)

 

Items under RR 5-2021 Clarifications
“Total Asset” in case of 20% tax rate
  • Total Assets is net of:
  • Depreciation and
  • Allowance for bad debts
  • Excluded: Land where the business entity’s office, plant and equipment are situated; amount to be excluded: Cost/fair market value, depending on what is reflected in the financial statements
  • Included:
  • Land held primarily for sale to customers or land held for investment purposes;
  •  Land being used as banana plantation
  • Land being leased
  • Portion is used in business; rest is on lease = prorate the amount of land based on the area.
Private Educational Institutions distributing dividends to stockholders
  • Rate is either 25% or 20%
  • 1% is applicable to non-profit schools*
Section 5: Conditions for exemption from income tax of foreign-sourced dividends received by domestic corporation:

 
  • If the Certification shall state non-utilization of the dividends received, the unutilized dividends shall be declared as taxable income, and the corresponding tax due shall be subject to interest, surcharges and penalties

 
Dividends received by a domestic corporation from a resident foreign corporation (RFC)
  • Tax treatment depends on the source of income of the RFC
  • Treated as derived from sources within PH (Exempt from income taxes)
  • Exception:
  • Less than fifty percent (50%) of the gross income of the foreign corporation for the three-year period ending with the close of its taxable year preceding the declaration of such dividends (or for such part of the period as the corporation has been in existence) was derived from sources within the Philippines – (Considered sourced without and must comply with Section 5 to avail of income tax exemption)

 
4th Year of Business Operation for purposes of MCIT
  • Means fourth taxable year immediately following the year in which such corporation commenced its business operation
  • Thus, if the corporation commenced its business operations in 2017, MCIT may be imposed beginning the year 2021, if it exceeds the regular income tax. The taxable year in which business operations commenced shall be the year in which the corporation is registered with the BIR

 
Additional allowable deduction of 1/2 of actual training expenses
  • No distinction as to which type of industry can claim the deduction, subject to requirements:
  • The labor training expenses shall not be more than ten percent (10%) of the Direct Labor Wage;
  • The labor training expenses are incurred for skills development of enterprise-based trainees;
  • The enterprise-based trainees are enrolled in public senior high school, public higher education institutions, or public technical and vocational institutions for the taxable year in which the labor training expenses are claimed;  The training is covered by an apprenticeship agreement under Presidential Decree (PD) No. 442 or the Labor Code of the Philippines; and:
  • The Company claiming the additional deduction is granted an authority to offer training programs for skills development as certified by the Department of Education (DepED), Technical Education and Skills Development Authority (TESDA) or Commission on Higher Education (CHED), as applicable.
  •  Training expenses which pertain to training/s of employees under supervisory, managerial, administrative and support functions should not be included in ‘the computation
  • The resulting amount then shall be subject to a cap of not more than ten percent (10%) of the Direct Labor Wage. The “direct labor” is that portion of salaries and wages which can be identified with and charged directly to a product or to a project or service on a consistent basis.

 
*we do not agree.

 

 

 

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CLARIFICATIONS ON TRANSFER PRICING REQUIREMENTS ON RELATED-PARTY TRANSACTIONS

May 4, 2021
CLARIFICATIONS ON TRANSFER PRICING REQUIREMENTS ON RELATED-PARTY TRANSACTIONS
Taxpayers required to file RPT Form
  • It is required to file an Annual ITR
  • It has transactions with related party (domestic or foreign) during the concerned period; AND
  • It falls under ANY of the following categories:
    • (a) Large taxpayers*
    • (b) Taxpayers enjoying incentives (i.e. Board of Investments-registered and ECOZONE*** enterprises, enjoying ITH or subject to preferential income tax rate**
    • (c) taxpayers reporting net operating losses***** for the current taxable year and the immediately preceding two (2) consecutive taxable years
  • A related party that has transactions with (a) (b) (c) (it is imperative to check whether the related party with whom ordinary corporation transacts falls under this category)
Tax-exempt Corporations**** Not required to file RPT Form even if it has dealings with related party under (a) (b) or (c)

 
Materiality threshold for reportable related party transaction

 

A

 

 Annual Gross Revenue (combined from related party or otherwise); and >P150M
Total amount of related party transaction (involving all related parties) >P90M
B Sale of tangible goods  (specific related party only) >P60M
C Service, interest, intangible goods, or other related party transactions >P15M
D If TPD is required to be prepared during immediately preceding taxable period for exceeding a) to c)

 

 
  • No threshold if taxpayer is required to file the RPT Form; disclosure of all related party transaction irrespective of the amount is a must;
  • Relevant only as to who is required to prepare a Transfer Pricing Documentation;
  • Taxpayer who meets the threshold but is not required to submit RPT Form = not required to submit TPD
RPT Form
  • Similar transactions with the same related party transactions must be segregated, if possible.
  • TPD and other supporting documents shall no longer be attached to the RPT Form but shall be made available during audit
  • Actual amount must declared. Reasonable estimate is not allowed. Declaration is subject to perjury clause.
*A large taxpayer is a taxpayer who has been classified and duly notified (via registered mail, publication, or any other mode of service) by the CIR as such. Taxpayer is not a large taxpayer even it meets the criteria to be a large taxpayer but was not notified by the CIR.

 

**Taxpayer subject to preferential income tax rate –

Corporate taxpayer subject to regular corporate income tax but has transactions subject to preferential income tax rate under tax treaty or Tax Code is not required to file an RPT Form

 

Examples of taxpayers subject to preferential income tax rate:

  • proprietary educational institutions and hospitals;
  • and regional operating headquarters
  • International carriers
 Type of international carrier  Required?
Those subject to tax based on GPB or gross revenues Not required
Those that are exempt from tax under the tax treaty or on the basis of reciprocity Not required
Those subject to tax on profits from sources within the Philippines Required

 

***Not required to file RPT Form if ECOZONE enterprise is subject to RCIT. Only those subject to ITH or 5% special tax are required to file RPT Form, unless it falls under (a) (c) or (d).

 

****Tax exempt –

  • Those exempt under Section 30 or similar provisions of the Tax Code or special laws;
  • Regional or area headquarters and representative offices of foreign corporations that are not allowed by law to derive income from the Philippines
  • Post-employment benefit plans (if their related party transactions consist only of the contributions from their sponsor employers)

*****Net operating loss for tax purposes and not the amount per AFS

  • Means excess of allowable deductions over the gross income of the business in a taxable year
  • Allowable deductions - ordinary and necessary expenses paid or incurred during the taxable year (directly attributable to the development, management, operation and/or conduct of trade, business or exercise of profession)
  • Registration fees, business permits, and licenses and taxes, (except Section 34 (c) (1) of Tax Code) are allowable deductions

Domestic corporation not required to report if the related party suffering loss is a NRFC.

 
Other matters:

  • Share in the net income of an associate is akin to dividend; not required to be reported in the RPT Form
  • If taxpayer is required to prepare a TPD for 2020 RPT transaction, it shall also be required to prepare TPD for 2021 transaction despite not meeting any materiality threshold.
  • Failure to supply material information  - RPT Form is treated not filed and penalty for failure to file will be imposed
  • Currency – foreign currency and its equivalent, unless several currencies were used and it seems impractical to indicate all of them in RPT Form
  • Exchange rate – Rate of transaction
  • For your easy reference, a copy of the regulation may be accessed HERE. (Revenue Memorandum Circular. 54-2021, April 27, 2021)

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. If you have clarification or concern or no longer wish to receive updates, please feel free to reach out to us.

Best regards,
Ron Dumlao

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CLARIFICATIONS ON TRANSFER PRICING REQUIREMENTS ON RELATED-PARTY TRANSACTIONS
Taxpayers required to file RPT Form
  • It is required to file an Annual ITR
  • It has transactions with related party (domestic or foreign) during the concerned period; AND
  • It falls under ANY of the following categories:
    • (a) Large taxpayers*
    • (b) Taxpayers enjoying incentives (i.e. Board of Investments-registered and ECOZONE*** enterprises, enjoying ITH or subject to preferential income tax rate**
    • (c) taxpayers reporting net operating losses***** for the current taxable year and the immediately preceding two (2) consecutive taxable years
  • A related party that has transactions with (a) (b) (c) (it is imperative to check whether the related party with whom ordinary corporation transacts falls under this category)
Tax-exempt Corporations**** Not required to file RPT Form even if it has dealings with related party under (a) (b) or (c)

 
Materiality threshold for reportable related party transaction

 

A

 

 Annual Gross Revenue (combined from related party or otherwise); and >P150M
Total amount of related party transaction (involving all related parties) >P90M
B Sale of tangible goods  (specific related party only) >P60M
C Service, interest, intangible goods, or other related party transactions >P15M
D If TPD is required to be prepared during immediately preceding taxable period for exceeding a) to c)

 

 
  • No threshold if taxpayer is required to file the RPT Form; disclosure of all related party transaction irrespective of the amount is a must;
  • Relevant only as to who is required to prepare a Transfer Pricing Documentation;
  • Taxpayer who meets the threshold but is not required to submit RPT Form = not required to submit TPD
RPT Form
  • Similar transactions with the same related party transactions must be segregated, if possible.
  • TPD and other supporting documents shall no longer be attached to the RPT Form but shall be made available during audit
  • Actual amount must declared. Reasonable estimate is not allowed. Declaration is subject to perjury clause.
*A large taxpayer is a taxpayer who has been classified and duly notified (via registered mail, publication, or any other mode of service) by the CIR as such. Taxpayer is not a large taxpayer even it meets the criteria to be a large taxpayer but was not notified by the CIR.

 

**Taxpayer subject to preferential income tax rate –

Corporate taxpayer subject to regular corporate income tax but has transactions subject to preferential income tax rate under tax treaty or Tax Code is not required to file an RPT Form

 

Examples of taxpayers subject to preferential income tax rate:

  • proprietary educational institutions and hospitals;
  • and regional operating headquarters
  • International carriers
 Type of international carrier  Required?
Those subject to tax based on GPB or gross revenues Not required
Those that are exempt from tax under the tax treaty or on the basis of reciprocity Not required
Those subject to tax on profits from sources within the Philippines Required

 

***Not required to file RPT Form if ECOZONE enterprise is subject to RCIT. Only those subject to ITH or 5% special tax are required to file RPT Form, unless it falls under (a) (c) or (d).

 

****Tax exempt –

  • Those exempt under Section 30 or similar provisions of the Tax Code or special laws;
  • Regional or area headquarters and representative offices of foreign corporations that are not allowed by law to derive income from the Philippines
  • Post-employment benefit plans (if their related party transactions consist only of the contributions from their sponsor employers)

*****Net operating loss for tax purposes and not the amount per AFS

  • Means excess of allowable deductions over the gross income of the business in a taxable year
  • Allowable deductions – ordinary and necessary expenses paid or incurred during the taxable year (directly attributable to the development, management, operation and/or conduct of trade, business or exercise of profession)
  • Registration fees, business permits, and licenses and taxes, (except Section 34 (c) (1) of Tax Code) are allowable deductions

Domestic corporation not required to report if the related party suffering loss is a NRFC.

 
Other matters:

  • Share in the net income of an associate is akin to dividend; not required to be reported in the RPT Form
  • If taxpayer is required to prepare a TPD for 2020 RPT transaction, it shall also be required to prepare TPD for 2021 transaction despite not meeting any materiality threshold.
  • Failure to supply material information  – RPT Form is treated not filed and penalty for failure to file will be imposed
  • Currency – foreign currency and its equivalent, unless several currencies were used and it seems impractical to indicate all of them in RPT Form
  • Exchange rate – Rate of transaction
  • For your easy reference, a copy of the regulation may be accessed HERE. (Revenue Memorandum Circular. 54-2021, April 27, 2021)

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. If you have clarification or concern or no longer wish to receive updates, please feel free to reach out to us.

Best regards,
Ron Dumlao

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SEC and BIR

April 26, 2021

Dear CLIENTS, COLLEAGUES and FRIENDS:

For your reference and file, we are pleased to send our regular corporate, tax and other legal digest. Don’t miss our OTHER UPDATES.

In this Article:

SECURITIES AND EXCHANGE COMMISSION (“SEC”)

  • ALL APPLICATIONS FOR REGISTRATION OF DOMESTIC CORPORATIONS MUST BE FILED WITH AND PROCESSED BY THE SEC UNDER THE ELECTRONIC SIMPLIFIED PROCESSING OF APPLICATION FOR REGISTRATION OF THE COMPANY (“ESPARC”).
  • DEADLINE FOR SUBMISSION OF THE AUDITED FINANCIAL STATEMENTS IS MOVED TO MAY 17, 2021 FOR PUBLICLY-LISTED COMPANIES, ISSUER OF REGISTERED SECURITIES AND PUBLIC COMPANIES.

BUREAU OF INTERNAL REVENUE ("BIR") DEADLINES AND ISSUANCES:

  • BIR DEADLINES FROM APRIL 26 TO MAY 2, 2021.
  • CREATE LAW (PART 2): GAIN OR LOSS ON EXCHANGE OF PROPERTY PURSUANT TO MERGER OR CONTROL WILL NOT BE RECOGNIZED; TRANSACTION IS NOT SUBJECT TO VAT AND BIR PRIOR RULING IS NOT REQUIRED.

SECURITIES AND EXCHANGE COMMISSION

ALL APPLICATIONS FOR REGISTRATION OF DOMESTIC CORPORATIONS MUST BE FILED WITH AND PROCESSED BY THE SEC UNDER THE ELECTRONIC SIMPLIFIED PROCESSING OF APPLICATION FOR REGISTRATION OF THE COMPANY (“ESPARC”).

  • eSPARC shall cover One Person Corporations, domestic corporations, both stock and nonstock, with at least 2 but not more than 15 incorporators who may either be natural persons, partnerships, associations, or corporations.
  • Applications for registration of partnerships and foreign corporations will continue to be accepted and processed under the Company Registration system (“CRS”)
  • Option to register a “Stock Corporation” or “Non-stock corporation” in the CRS will be disabled.
  • Applications for registration prior to April 19, 2021 will still be processed, unless the applicant is notified by the SEC Processing Officer to resubmit the application using eSPARC.
  • For your easy reference, the issuance may be accessed Here.  (SEC Notice, April 16, 2021)

DEADLINE FOR SUBMISSION OF THE AUDITED FINANCIAL STATEMENTS IS MOVED TO MAY 17, 2021 FOR PUBLICLY-LISTED COMPANIES, ISSUER OF REGISTERED SECURITIES AND PUBLIC COMPANIES.

  • The SEC extends the deadline for the submission of 2020 Reports for the Calendar Year Ended December 31, 2020 to May 17, 2021.
  • The extended deadline is without prejudice to the schedule on the filing of AFS as may be required by the BIR.
  • The SEC shall automatically conform with the BIR should the latter move its own deadline to a date later than May 17, 2021.
  • For your easy reference, the Circular may be accessed  (SEC MC, No. 5, April 11, 2021)

BUREAU OF INTERNAL REVENUE

BIR DEADLINES FROM APRIL 26 to May 2, 2021. A gentle reminder on the following deadlines, as may be applicable:

DATE FILING/SUBMISSION
 

April 29, 2021

 e-Filing/Filing & e-Payment/Payment - 1702Q (Quarterly Income Tax Return For Corporations, Partnerships and Other Non-Individual Taxpayers) and Summary Alphalist of Withholding Taxes (SAWT) - Fiscal Quarter ending February 28, 2021
 

April 30, 2021

 Registration - Computerized Books of Accounts & Other Accounting Records in Electronic Format - Fiscal Year ending March 31, 2021

Submission - Copy of the Annual Report duly received by the Office of the Insurance Commission by an Insurance Company - Calendar Year 2020

Submission - eFiled 1702 - RT/EX/MX with Audited Financial Statement (AFS), 1709 (if applicable), and Other Attachments through Electronic Submission of Audited Financial Statements (eAFS) or Manually - Calendar Year 2020

Submission - Other Attachments to e-Filed 1700, 1701 and 1701A - Calendar Year 2020

Submission - Inventory List - Fiscal Year ending March 31, 2021

e-Filing/Filing & e-Payment/Payment - 1601-EQ & 1601-FQ and Quarterly Alphalist of Payees (QAP) - eFPS & Non-eFPS Filers - For the Quarter ending March 31, 2021

e-Filing/Filing & e-Payment/Payment - 1602Q (Quarterly Remittance Return of Final Taxes Withheld on Interest Paid on Deposit and Yield on Deposit Substitutes/Trusts/Etc.)  - For the Quarter ending March 31, 2021

e-Filing/Filing & e-Payment/Payment - 1603Q (Quarterly Remittance Return of Final Income Taxes Withheld on Fringe Benefits Paid to Employees Other Than Rank and File) - For the Quarter ending March 31, 2021

e-Filing/Filing & e-Payment/Payment - 1621 (Quarterly Remittance Return of Tax Withheld on the Amount Withdrawn from Decedent's Deposit Account) - eFPS & Non-eFPS Filers - For the Quarter ending March 31, 2021

e-Submission - Quarterly Summary List of Sales/Purchases/Importations by a VAT Taxpayer - eFPS Filers - For the Quarter ending March 31, 2021
May 1, 2021 Submission - Consolidated Return of All Transactions based on the Reconciled Data of the Stockbrokers - April 16–30, 2021

Submission - Engagement Letters & Renewals or Subsequent Agreements for Financial Audit by Independent CPAs - Fiscal Year beginning July 1, 2021

CREATE LAW (PART 2): GAIN OR LOSS ON EXCHANGE OF PROPERTY PURSUANT TO MERGER OR CONTROL WILL NOT BE RECOGNIZED; TRANSACTION IS NOT SUBJECT TO VAT AND BIR PRIOR RULING IS NOT REQUIRED.

 

Taxpayer Transaction Conditions
Corporation Transfer of property for stock or securities in another corporation · Corporation is a party to reorganization and exchanges property in pursuance to a plan of reorganization solely for stock or securities in another corporation that is a party to the reorganization
Person Transfer of property to a corporation in exchange for stock or unit of participation in such corporation
  • Person, alone or together with others, not exceeding 4 persons
  • The transferor/s gain/s or maintain/s control of the said corporation
  • Services not included
Note:

  • The transaction is not subject to VAT.
  • Prior BIR confirmation/ruling shall not be required for purposes of availing tax exemption
  • Parties may implement the transaction (i.e CAR) subject to post-transaction audit by the BIR

 

 

  • For your easy reference, a copy of the regulation may be accessed Here. (Revenue Regulations No. 5-2021, April 8, 2021)

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. If you have clarification or concern or no longer wish to receive updates, please feel free to reach out to us.

Best regards,
Ron Dumlao

 

 

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Dear CLIENTS, COLLEAGUES and FRIENDS:

For your reference and file, we are pleased to send our regular corporate, tax and other legal digest. Don’t miss our OTHER UPDATES.

In this Article:

SECURITIES AND EXCHANGE COMMISSION (“SEC”)

  • ALL APPLICATIONS FOR REGISTRATION OF DOMESTIC CORPORATIONS MUST BE FILED WITH AND PROCESSED BY THE SEC UNDER THE ELECTRONIC SIMPLIFIED PROCESSING OF APPLICATION FOR REGISTRATION OF THE COMPANY (“ESPARC”).
  • DEADLINE FOR SUBMISSION OF THE AUDITED FINANCIAL STATEMENTS IS MOVED TO MAY 17, 2021 FOR PUBLICLY-LISTED COMPANIES, ISSUER OF REGISTERED SECURITIES AND PUBLIC COMPANIES.

BUREAU OF INTERNAL REVENUE (“BIR”) DEADLINES AND ISSUANCES:

  • BIR DEADLINES FROM APRIL 26 TO MAY 2, 2021.
  • CREATE LAW (PART 2): GAIN OR LOSS ON EXCHANGE OF PROPERTY PURSUANT TO MERGER OR CONTROL WILL NOT BE RECOGNIZED; TRANSACTION IS NOT SUBJECT TO VAT AND BIR PRIOR RULING IS NOT REQUIRED.

SECURITIES AND EXCHANGE COMMISSION

ALL APPLICATIONS FOR REGISTRATION OF DOMESTIC CORPORATIONS MUST BE FILED WITH AND PROCESSED BY THE SEC UNDER THE ELECTRONIC SIMPLIFIED PROCESSING OF APPLICATION FOR REGISTRATION OF THE COMPANY (“ESPARC”).

  • eSPARC shall cover One Person Corporations, domestic corporations, both stock and nonstock, with at least 2 but not more than 15 incorporators who may either be natural persons, partnerships, associations, or corporations.
  • Applications for registration of partnerships and foreign corporations will continue to be accepted and processed under the Company Registration system (“CRS”)
  • Option to register a “Stock Corporation” or “Non-stock corporation” in the CRS will be disabled.
  • Applications for registration prior to April 19, 2021 will still be processed, unless the applicant is notified by the SEC Processing Officer to resubmit the application using eSPARC.
  • For your easy reference, the issuance may be accessed Here.  (SEC Notice, April 16, 2021)

DEADLINE FOR SUBMISSION OF THE AUDITED FINANCIAL STATEMENTS IS MOVED TO MAY 17, 2021 FOR PUBLICLY-LISTED COMPANIES, ISSUER OF REGISTERED SECURITIES AND PUBLIC COMPANIES.

  • The SEC extends the deadline for the submission of 2020 Reports for the Calendar Year Ended December 31, 2020 to May 17, 2021.
  • The extended deadline is without prejudice to the schedule on the filing of AFS as may be required by the BIR.
  • The SEC shall automatically conform with the BIR should the latter move its own deadline to a date later than May 17, 2021.
  • For your easy reference, the Circular may be accessed  (SEC MC, No. 5, April 11, 2021)

BUREAU OF INTERNAL REVENUE

BIR DEADLINES FROM APRIL 26 to May 2, 2021. A gentle reminder on the following deadlines, as may be applicable:

DATE FILING/SUBMISSION
 

April 29, 2021

 e-Filing/Filing & e-Payment/Payment – 1702Q (Quarterly Income Tax Return For Corporations, Partnerships and Other Non-Individual Taxpayers) and Summary Alphalist of Withholding Taxes (SAWT) – Fiscal Quarter ending February 28, 2021
 

April 30, 2021

 Registration – Computerized Books of Accounts & Other Accounting Records in Electronic Format – Fiscal Year ending March 31, 2021

Submission – Copy of the Annual Report duly received by the Office of the Insurance Commission by an Insurance Company – Calendar Year 2020

Submission – eFiled 1702 – RT/EX/MX with Audited Financial Statement (AFS), 1709 (if applicable), and Other Attachments through Electronic Submission of Audited Financial Statements (eAFS) or Manually – Calendar Year 2020

Submission – Other Attachments to e-Filed 1700, 1701 and 1701A – Calendar Year 2020

Submission – Inventory List – Fiscal Year ending March 31, 2021

e-Filing/Filing & e-Payment/Payment – 1601-EQ & 1601-FQ and Quarterly Alphalist of Payees (QAP) – eFPS & Non-eFPS Filers – For the Quarter ending March 31, 2021

e-Filing/Filing & e-Payment/Payment – 1602Q (Quarterly Remittance Return of Final Taxes Withheld on Interest Paid on Deposit and Yield on Deposit Substitutes/Trusts/Etc.)  – For the Quarter ending March 31, 2021

e-Filing/Filing & e-Payment/Payment – 1603Q (Quarterly Remittance Return of Final Income Taxes Withheld on Fringe Benefits Paid to Employees Other Than Rank and File) – For the Quarter ending March 31, 2021

e-Filing/Filing & e-Payment/Payment – 1621 (Quarterly Remittance Return of Tax Withheld on the Amount Withdrawn from Decedent’s Deposit Account) – eFPS & Non-eFPS Filers – For the Quarter ending March 31, 2021

e-Submission – Quarterly Summary List of Sales/Purchases/Importations by a VAT Taxpayer – eFPS Filers – For the Quarter ending March 31, 2021
May 1, 2021 Submission – Consolidated Return of All Transactions based on the Reconciled Data of the Stockbrokers – April 16–30, 2021

Submission – Engagement Letters & Renewals or Subsequent Agreements for Financial Audit by Independent CPAs – Fiscal Year beginning July 1, 2021

CREATE LAW (PART 2): GAIN OR LOSS ON EXCHANGE OF PROPERTY PURSUANT TO MERGER OR CONTROL WILL NOT BE RECOGNIZED; TRANSACTION IS NOT SUBJECT TO VAT AND BIR PRIOR RULING IS NOT REQUIRED.

 

Taxpayer Transaction Conditions
Corporation Transfer of property for stock or securities in another corporation · Corporation is a party to reorganization and exchanges property in pursuance to a plan of reorganization solely for stock or securities in another corporation that is a party to the reorganization
Person Transfer of property to a corporation in exchange for stock or unit of participation in such corporation
  • Person, alone or together with others, not exceeding 4 persons
  • The transferor/s gain/s or maintain/s control of the said corporation
  • Services not included
Note:

  • The transaction is not subject to VAT.
  • Prior BIR confirmation/ruling shall not be required for purposes of availing tax exemption
  • Parties may implement the transaction (i.e CAR) subject to post-transaction audit by the BIR

 

 

  • For your easy reference, a copy of the regulation may be accessed Here. (Revenue Regulations No. 5-2021, April 8, 2021)

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. If you have clarification or concern or no longer wish to receive updates, please feel free to reach out to us.

Best regards,
Ron Dumlao

 

 

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SECURITIES AND EXCHANGE COMMISSION (“SEC”)

April 26, 2021

Dear CLIENTS, COLLEAGUES and FRIENDS:

For your reference and file, we are pleased to send our regular corporate, tax and other legal digest.

In this Article:

SECURITIES AND EXCHANGE COMMISSION (“SEC”)

  • NO MANDATORY GRACE PERIOD WAS GRANTED FOR THE PAYMENT OF LOANS AND/OR INTEREST FALLING DUE WITHIN THE ENHANCED COMMUNITY QUARANTINE PERIOD FROM MARCH 29, TO APRIL 4, 2021.
  • SEC CEBU EXTENSION OFFICE CONTACT NUMBERS

BUREAU OF INTERNAL REVENUE ("BIR") DEADLINES AND ISSUANCES:

  • BIR DEADLINES FROM APRIL 5 TO 11, 2021.
  • FILING OF RETURNS AND PAYMENT OF TAXES DUE THEREON FALLING WITHIN THE PERIOD FROM MARCH 22, 2021 TO APRIL 30, 2021 MAY BE MADE ANYWHERE, EVEN OUTSIDE OF REVENUE DISTRICT OFFICER WHERE TAXPAYER IS REGISTERED.
  • NEW GUIDELINES ON AVAILMENT OF TAX TREATY BENEFITS: WITHHOLDING AGENT SHALL FILE REQUEST FOR CONFIRMATION WHILE NONRESIDENTS SHALL FILE TAX TREATY RELIEF APPLICATION (TTRA); BIR SHALL ISSUE CERTIFICATIONS ON BENEFITS GRANTED IN LIEU OF A RULING; ONE APPLICATION FOR EACH TRANSACTION UNLESS TRANSACTION EXTENDS BEYOND 1 YEAR; BIR TO PROCESS APPLICATION WITHIN 4 MONTHS AS A RULE; 3 MONTHS TO SUBMIT DOCUMENTS FOR PENDING TTRA FOR INCOME EARNED IN 2020 AND PRIOR YEARS FROM RECEIPT OF FINAL NOTICE TO SUBMIT ADDITIONAL DOCUMENTS OR FROM EFFECTIVITY OF THIS ORDER, WHICHEVER IS LATER; FILING A CLAIM FOR REFUND IN CASE THE SUBJECTED RATE IS HIGHER THAN SHOULD-BE RATE MAY BE FILED INDEPENDENTLY OR SIMULTANEOUSLY; SUBMISSION OF CERTIFICATE OF RESIDENCE FOR TREATY RELIEF (CORTT) FORM SHALL BE DISCONTINUED.
  • GUIDELINES ON THE USE OF ELECTRONIC AUDITED FINANCIAL STATEMENTS SYSTEM.

SECURITIES AND EXCHANGE COMMISSION

NO MANDATORY GRACE PERIOD WAS GRANTED FOR THE PAYMENT OF LOANS AND/OR INTEREST FALLING DUE WITHIN THE ENHANCED COMMUNITY QUARANTINE PERIOD FROM MARCH 29, TO APRIL 4, 2021.

  • The amended Guidelines issued by IATF on Emerging Infectious Diseases does not extend the 30-day grace period mandated by the Bayanihan to Heal As One Act during the ECQ for the said period.
  • Nonetheless, the SEC strongly encourages Financing Companies, Lending Companies, and Micro Finance-NGOs to continue implementing debt relief measures such as lowering of interest rates, waiver or reduction of penalties, charges and other fees, payment of holiday, debt consolidation, extension of loan terms, and provision of flexible payment schedules, in view of the adverse impact of COVID-19 pandemic to the borrowing public, and based on the continuing assessment of their cash flows. Request for debt relief shall directed at the concerned Financing Companies, Lending Companies, or Microfinance-NGOs
  • For your easy reference, the Circular may be accessed HERE SEC Notice, March 30, 2021.

SEC CEBU EXTENSION OFFICE CONTACT NUMBERS. The contact numbers are accessible HERE.

BUREAU OF INTERNAL REVENUE

BIR DEADLINES FROM APRIL 5 TO 11, 2021. A gentle reminder on the following deadlines, as may be applicable:

DATE FILING/SUBMISSION
 

April 5, 2021
  • Submission - Summary Report of Certifications Issued by the President of the National Home Mortgage Finance Corporation - Month of March 2021
  • e-Filing/Filing & e-Payment/Payment - 2000 - Documentary Stamp Tax Declaration/Return & 2000-OT - Documentary Stamp Tax Declaration/Return One-Time Transactions - Month of March 2021
 

April 8, 2021
  • Submission - All Transcript Sheets of ORBs used by Dealers of Automobiles/Manufacturers/TollManufacturers/ Assemblers/Importers of Alcohol Products, Tobacco Products, Petroleum Products, Non-Essential Goods, Sweetened Beverage Products, Mineral Products & Automobiles - Month of March 2021
  • e-Submission - Monthly e-Sales Report of All Taxpayers using CRM/POS with TIN ending in Even Number - Month of March 2021
April 10, 2021
  • Submission - Transcript Sheets of 2222-ORB - Month of March 2021
  • Submission - List of Buyers of Sugar Together with a Copy of Certificate of Advance Payment of VAT Made by Each Buyer appearing in the List by a Sugar Cooperative - Month of March 2021
  • Submission - Information Return on Releases of Refined Sugar by the Proprietor or Operator of a Sugar Refinery or Mill - Month of March 2021
  • Submission - Monthly Report of DST Collection and Remitted by the Government Agency - Month of March 2021
  • e-Submission - Monthly e-Sales Report of All Taxpayers using CRM/POS with TIN ending in Odd Number - Month of March 2021
  • e-Filing/Filing & e-Payment/Payment - 1600 (VT/PT Withheld) and Monthly Alphalist of Payees (MAP) - eFPS & Non-eFPS Filers - Month of March 2021
  • e-Filing/Filing & e-Payment/Payment - 1606 - Withholdiing Tax Remittance Return for Onerous Transfer of Real Property Other Than Capital Asset (Including Taxable and Exempt) - Month of March 2021
  • e-Filing/Filing & e-Payment - 0620 (Monthly Remittance Form of Tax Withheld on the Amount Withdrawn from the Decedent's Deposit Account) - eFPS & Non-eFPS Filers - Month of March 2021
  • e-Filing & e-Payment/Remittance - 1600 (VT/PT Withheld) and 1601-C -  National Government Agencies (NGAs) - Month of March 2021
  • Filing & Payment - 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) - Non-eFPS Filers - Month of March 2021
  • Filing & Payment - 2200-C (Excise Tax Return for Cosmetic Procedures) with Monthly Summary of Cosmetic Procedures Performed - Month of March 2021
  • Filing & Payment/Remittance - 2200M Excise Tax Return for the amount of Excise Taxes Collected from Payment Made to Sellers of Metallic Minerals - Month of March 2021
April 11, 2021
  • e-Filing - 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) - eFPS Filers under Group E - Month of March 2021

FILING OF RETURNS AND PAYMENT OF TAXES DUE THEREON FALLING WITHIN THE PERIOD FROM MARCH 22, 2021 TO APRIL 30, 2021 MAY BE MADE ANYWHERE, EVEN OUTSIDE OF REVENUE DISTRICT OFFICER WHERE TAXPAYER IS REGISTERED.

  • The BIR prescribes guidelines on the filing of returns as well as payment of taxes due thereon falling within the period March 22, 2021 to April 30, 2021.
  • The filing of the returns as well as payment of taxes due thereon, falling within the period March 22, 2021 to April 30, 2021, may be made anywhere, even outside the jurisdiction of the Revenue District Office where they are registered.
  • For your easy reference, the Circular may be accessed Here. (Revenue Memorandum Circular No. 41-2021, March 29, 2021)

NEW GUIDELINES ON AVAILMENT OF TAX TREATY BENEFITS: WITHHOLDING AGENT SHALL FILE REQUEST FOR CONFIRMATION WHILE NONRESIDENTS SHALL FILE TAX TREATY RELIEF APPLICATION (TTRA); BIR SHALL ISSUE CERTIFICATIONS ON BENEFITS GRANTED IN LIEU OF A RULING; ONE APPLICATION FOR EACH TRANSACTION UNLESS TRANSACTION EXTENDS BEYOND 1 YEAR; BIR TO PROCESS APPLICATION WITHIN 4 MONTHS AS A RULE; 3 MONTHS TO SUBMIT DOCUMENTS FOR PENDING TTRA FOR INCOME EARNED IN 2020 AND PRIOR YEARS FROM RECEIPT OF FINAL NOTICE TO SUBMIT ADDITIONAL DOCUMENTS OR FROM EFFECTIVITY OF THIS ORDER, WHICHEVER IS LATER; FILING A CLAIM FOR REFUND IN CASE THE SUBJECTED RATE IS HIGHER THAN SHOULD-BE RATE MAY BE FILED INDEPENDENTLY OR SIMULTANEOUSLY; SUBMISSION OF CERTIFICATE OF RESIDENCE FOR TREATY RELIEF (CORTT) FORM SHALL HENCEFORTH BE DISCONTINUED.

  • The BIR streamlines the procedures and documents for the availment of treaty benefits
Treaty Rate/Regular Rate Responsible Party
Withholding agent applies treaty rates on the income earned by nonresident
  • Withholding agent to file with ITAD a request for confirmation on the propriety of the withholding tax rates applied on the item of income
  • Supporting documents are required.
  • When to file: At any time after the payment of withholding tax but shall in no case be later than the last day of the 4th month following the close of each taxable year.
Regular rates are imposed on the income
  • Nonresident Foreign Corporation (NRFC) shall file a TTRA with the ITAD. It must invoke and prove entitlement to the treaty.
  • Supporting documents are required
  • When to file: At any time after the receipt of the income
  • Effect of failure to prove entitlement: confirmation of the tax rate previously applied on the income and eventual denial of TTRA

 

BIR’s findings of tax rate is different from the rate applied Effect
Rate applied is lower than the should-be rate or NRFC is not entitled to the treaty benefit
  • BIR will issue a ruling denying the request for confirmation or TTRA
  • Withholding agent to pay the deficiency tax plus penalties
Rate applied is proper or higher than the should-be rate
  • BIR will issue certificate confirming the NRFC’s entitlement to the treaty benefits
  • Taxpayer may apply for refund of excess withholding tax
  • How many TTRA/request for confirmation shall be filed?
    • General rule: One TTRA/Request for each transaction
    • Exception: Annual updating is necessary (example, if agreement extends for 5 years, 5 TTRAs)
      • Applicable to Long-term contracts (e.g. contracts for services or loan agreements license agreements which are effective for more than a year
      • NRFC shall file an updated Application Form
      • Supporting documents: Tax Residency Certificate if the validity period has lapsed, and other relevant documents
    • When to file: Not later than last day of 4thmonth following the close of each taxable year.
    • Processing time: 4 months from the submission of complete documents or as soon as practicable provided that the ITAD has addressed all its backlogs.
    • Manner of Granting and Denying Treaty Benefits
 Granted/Denied  Process
TTRA/Request Granted
  • Certification issued by the Assistant Commission of for Legal Service
  • No more usual BIR Ruling and Compliance Check Report
  • Loose DST must be affixed on the Certificate
TTRA/Request Denied
  • BIR Ruling containing the factual and legal bases shall be issued
  • Appealable to the Department of Finance within 30 days from receipt of the adverse ruling.
  • Pending TTRA for income earned in 2020 and prior years
Pending TTRA for income earned in 2020 and prior years 3 Months from receipt of Final Notice to Submit Additional Documents or from Effectivity of this Order, whichever is later, to submit additional document Failure to submit requested documents: Automatic denial of the TTRA for failure to prove entitlement to treaty benefits
With Notice of Archiving 3 Months from the Effectivity of this Order  Failure to submit requested documents: Automatic denial of the TTRA for failure to prove entitlement to treaty benefits
  • Filing a Claim for Refund in case the subjected rate is higher than should-be rate
  • Document: BIR Form 1913 with letter-request
Filing* Procedure
Independently of the TTRA

 

 ITAD shall endorse the claim for refund to the proper office that handles the processing of tax refund after the resolution of the TTRA
Simultaneous with the TTRA The officer where it was filed shall coordinate with and defer to ITAD the resolution of the nonresident’s entitlement to treaty benefit.
*Must be within the 2-year prescriptive period

 

  • Effect if during tax audit BIR finds inconsistencies made as basis of the certificate or ruling:
    • Examiner to inform ITAD, which shall issue amendatory certificate/ruling
  • BIR may likewise determine other internal revenue taxes (VAT, percentage tax, DST, donor’s tax)
  • Failure to file request within the period:
    • Penalties under the Tax Code
    • Perjury and other appropriate crimes
    • Payment of deficiency taxes
  • For dividends, interest and royalties, the submission of Certificate of Residence for Treaty Relief (CORTT) Form shall henceforth be discontinued. Nevertheless, previously submitted CORTT Forms shall still be forwarded to the concerned Revenue District Offices (RDOs) for compliance check.
  • For your reference, the issuance may be accessed Here. (Revenue Memorandum Order No. 14-2021, March 31, 2021)

GUIDELINES ON THE USE OF ELECTRONIC AUDITED FINANCIAL STATEMENTS SYSTEM.

  • The BIR prescribes the revised guidelines on the use of electronic Audited Financial Statements System. Taxpayers are mandated to scan the documents and use naming convention
  • A copy of the RMC is herewith attached for your easy reference. Revenue Memorandum Circular No. 43, 2021, March 31, 2021

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. If you have clarification or concern or no longer wish to receive updates, please feel free to reach out to us.

Best regards,
Ron Dumlao

 

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Dear CLIENTS, COLLEAGUES and FRIENDS:

For your reference and file, we are pleased to send our regular corporate, tax and other legal digest.

In this Article:

SECURITIES AND EXCHANGE COMMISSION (“SEC”)

  • NO MANDATORY GRACE PERIOD WAS GRANTED FOR THE PAYMENT OF LOANS AND/OR INTEREST FALLING DUE WITHIN THE ENHANCED COMMUNITY QUARANTINE PERIOD FROM MARCH 29, TO APRIL 4, 2021.
  • SEC CEBU EXTENSION OFFICE CONTACT NUMBERS

BUREAU OF INTERNAL REVENUE (“BIR”) DEADLINES AND ISSUANCES:

  • BIR DEADLINES FROM APRIL 5 TO 11, 2021.
  • FILING OF RETURNS AND PAYMENT OF TAXES DUE THEREON FALLING WITHIN THE PERIOD FROM MARCH 22, 2021 TO APRIL 30, 2021 MAY BE MADE ANYWHERE, EVEN OUTSIDE OF REVENUE DISTRICT OFFICER WHERE TAXPAYER IS REGISTERED.
  • NEW GUIDELINES ON AVAILMENT OF TAX TREATY BENEFITS: WITHHOLDING AGENT SHALL FILE REQUEST FOR CONFIRMATION WHILE NONRESIDENTS SHALL FILE TAX TREATY RELIEF APPLICATION (TTRA); BIR SHALL ISSUE CERTIFICATIONS ON BENEFITS GRANTED IN LIEU OF A RULING; ONE APPLICATION FOR EACH TRANSACTION UNLESS TRANSACTION EXTENDS BEYOND 1 YEAR; BIR TO PROCESS APPLICATION WITHIN 4 MONTHS AS A RULE; 3 MONTHS TO SUBMIT DOCUMENTS FOR PENDING TTRA FOR INCOME EARNED IN 2020 AND PRIOR YEARS FROM RECEIPT OF FINAL NOTICE TO SUBMIT ADDITIONAL DOCUMENTS OR FROM EFFECTIVITY OF THIS ORDER, WHICHEVER IS LATER; FILING A CLAIM FOR REFUND IN CASE THE SUBJECTED RATE IS HIGHER THAN SHOULD-BE RATE MAY BE FILED INDEPENDENTLY OR SIMULTANEOUSLY; SUBMISSION OF CERTIFICATE OF RESIDENCE FOR TREATY RELIEF (CORTT) FORM SHALL BE DISCONTINUED.
  • GUIDELINES ON THE USE OF ELECTRONIC AUDITED FINANCIAL STATEMENTS SYSTEM.

SECURITIES AND EXCHANGE COMMISSION

NO MANDATORY GRACE PERIOD WAS GRANTED FOR THE PAYMENT OF LOANS AND/OR INTEREST FALLING DUE WITHIN THE ENHANCED COMMUNITY QUARANTINE PERIOD FROM MARCH 29, TO APRIL 4, 2021.

  • The amended Guidelines issued by IATF on Emerging Infectious Diseases does not extend the 30-day grace period mandated by the Bayanihan to Heal As One Act during the ECQ for the said period.
  • Nonetheless, the SEC strongly encourages Financing Companies, Lending Companies, and Micro Finance-NGOs to continue implementing debt relief measures such as lowering of interest rates, waiver or reduction of penalties, charges and other fees, payment of holiday, debt consolidation, extension of loan terms, and provision of flexible payment schedules, in view of the adverse impact of COVID-19 pandemic to the borrowing public, and based on the continuing assessment of their cash flows. Request for debt relief shall directed at the concerned Financing Companies, Lending Companies, or Microfinance-NGOs
  • For your easy reference, the Circular may be accessed HERE SEC Notice, March 30, 2021.

SEC CEBU EXTENSION OFFICE CONTACT NUMBERS. The contact numbers are accessible HERE.

BUREAU OF INTERNAL REVENUE

BIR DEADLINES FROM APRIL 5 TO 11, 2021. A gentle reminder on the following deadlines, as may be applicable:

DATE FILING/SUBMISSION
 

April 5, 2021
  • Submission – Summary Report of Certifications Issued by the President of the National Home Mortgage Finance Corporation – Month of March 2021
  • e-Filing/Filing & e-Payment/Payment – 2000 – Documentary Stamp Tax Declaration/Return & 2000-OT – Documentary Stamp Tax Declaration/Return One-Time Transactions – Month of March 2021
 

April 8, 2021
  • Submission – All Transcript Sheets of ORBs used by Dealers of Automobiles/Manufacturers/TollManufacturers/ Assemblers/Importers of Alcohol Products, Tobacco Products, Petroleum Products, Non-Essential Goods, Sweetened Beverage Products, Mineral Products & Automobiles – Month of March 2021
  • e-Submission – Monthly e-Sales Report of All Taxpayers using CRM/POS with TIN ending in Even Number – Month of March 2021
April 10, 2021
  • Submission – Transcript Sheets of 2222-ORB – Month of March 2021
  • Submission – List of Buyers of Sugar Together with a Copy of Certificate of Advance Payment of VAT Made by Each Buyer appearing in the List by a Sugar Cooperative – Month of March 2021
  • Submission – Information Return on Releases of Refined Sugar by the Proprietor or Operator of a Sugar Refinery or Mill – Month of March 2021
  • Submission – Monthly Report of DST Collection and Remitted by the Government Agency – Month of March 2021
  • e-Submission – Monthly e-Sales Report of All Taxpayers using CRM/POS with TIN ending in Odd Number – Month of March 2021
  • e-Filing/Filing & e-Payment/Payment – 1600 (VT/PT Withheld) and Monthly Alphalist of Payees (MAP) – eFPS & Non-eFPS Filers – Month of March 2021
  • e-Filing/Filing & e-Payment/Payment – 1606 – Withholdiing Tax Remittance Return for Onerous Transfer of Real Property Other Than Capital Asset (Including Taxable and Exempt) – Month of March 2021
  • e-Filing/Filing & e-Payment – 0620 (Monthly Remittance Form of Tax Withheld on the Amount Withdrawn from the Decedent’s Deposit Account) – eFPS & Non-eFPS Filers – Month of March 2021
  • e-Filing & e-Payment/Remittance – 1600 (VT/PT Withheld) and 1601-C –  National Government Agencies (NGAs) – Month of March 2021
  • Filing & Payment – 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) – Non-eFPS Filers – Month of March 2021
  • Filing & Payment – 2200-C (Excise Tax Return for Cosmetic Procedures) with Monthly Summary of Cosmetic Procedures Performed – Month of March 2021
  • Filing & Payment/Remittance – 2200M Excise Tax Return for the amount of Excise Taxes Collected from Payment Made to Sellers of Metallic Minerals – Month of March 2021
April 11, 2021
  • e-Filing – 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) – eFPS Filers under Group E – Month of March 2021

FILING OF RETURNS AND PAYMENT OF TAXES DUE THEREON FALLING WITHIN THE PERIOD FROM MARCH 22, 2021 TO APRIL 30, 2021 MAY BE MADE ANYWHERE, EVEN OUTSIDE OF REVENUE DISTRICT OFFICER WHERE TAXPAYER IS REGISTERED.

  • The BIR prescribes guidelines on the filing of returns as well as payment of taxes due thereon falling within the period March 22, 2021 to April 30, 2021.
  • The filing of the returns as well as payment of taxes due thereon, falling within the period March 22, 2021 to April 30, 2021, may be made anywhere, even outside the jurisdiction of the Revenue District Office where they are registered.
  • For your easy reference, the Circular may be accessed Here. (Revenue Memorandum Circular No. 41-2021, March 29, 2021)

NEW GUIDELINES ON AVAILMENT OF TAX TREATY BENEFITS: WITHHOLDING AGENT SHALL FILE REQUEST FOR CONFIRMATION WHILE NONRESIDENTS SHALL FILE TAX TREATY RELIEF APPLICATION (TTRA); BIR SHALL ISSUE CERTIFICATIONS ON BENEFITS GRANTED IN LIEU OF A RULING; ONE APPLICATION FOR EACH TRANSACTION UNLESS TRANSACTION EXTENDS BEYOND 1 YEAR; BIR TO PROCESS APPLICATION WITHIN 4 MONTHS AS A RULE; 3 MONTHS TO SUBMIT DOCUMENTS FOR PENDING TTRA FOR INCOME EARNED IN 2020 AND PRIOR YEARS FROM RECEIPT OF FINAL NOTICE TO SUBMIT ADDITIONAL DOCUMENTS OR FROM EFFECTIVITY OF THIS ORDER, WHICHEVER IS LATER; FILING A CLAIM FOR REFUND IN CASE THE SUBJECTED RATE IS HIGHER THAN SHOULD-BE RATE MAY BE FILED INDEPENDENTLY OR SIMULTANEOUSLY; SUBMISSION OF CERTIFICATE OF RESIDENCE FOR TREATY RELIEF (CORTT) FORM SHALL HENCEFORTH BE DISCONTINUED.

  • The BIR streamlines the procedures and documents for the availment of treaty benefits
Treaty Rate/Regular Rate Responsible Party
Withholding agent applies treaty rates on the income earned by nonresident
  • Withholding agent to file with ITAD a request for confirmation on the propriety of the withholding tax rates applied on the item of income
  • Supporting documents are required.
  • When to file: At any time after the payment of withholding tax but shall in no case be later than the last day of the 4th month following the close of each taxable year.
Regular rates are imposed on the income
  • Nonresident Foreign Corporation (NRFC) shall file a TTRA with the ITAD. It must invoke and prove entitlement to the treaty.
  • Supporting documents are required
  • When to file: At any time after the receipt of the income
  • Effect of failure to prove entitlement: confirmation of the tax rate previously applied on the income and eventual denial of TTRA

 

BIR’s findings of tax rate is different from the rate applied Effect
Rate applied is lower than the should-be rate or NRFC is not entitled to the treaty benefit
  • BIR will issue a ruling denying the request for confirmation or TTRA
  • Withholding agent to pay the deficiency tax plus penalties
Rate applied is proper or higher than the should-be rate
  • BIR will issue certificate confirming the NRFC’s entitlement to the treaty benefits
  • Taxpayer may apply for refund of excess withholding tax
  • How many TTRA/request for confirmation shall be filed?
    • General rule: One TTRA/Request for each transaction
    • Exception: Annual updating is necessary (example, if agreement extends for 5 years, 5 TTRAs)
      • Applicable to Long-term contracts (e.g. contracts for services or loan agreements license agreements which are effective for more than a year
      • NRFC shall file an updated Application Form
      • Supporting documents: Tax Residency Certificate if the validity period has lapsed, and other relevant documents
    • When to file: Not later than last day of 4thmonth following the close of each taxable year.
    • Processing time: 4 months from the submission of complete documents or as soon as practicable provided that the ITAD has addressed all its backlogs.
    • Manner of Granting and Denying Treaty Benefits
 Granted/Denied  Process
TTRA/Request Granted
  • Certification issued by the Assistant Commission of for Legal Service
  • No more usual BIR Ruling and Compliance Check Report
  • Loose DST must be affixed on the Certificate
TTRA/Request Denied
  • BIR Ruling containing the factual and legal bases shall be issued
  • Appealable to the Department of Finance within 30 days from receipt of the adverse ruling.
  • Pending TTRA for income earned in 2020 and prior years
Pending TTRA for income earned in 2020 and prior years 3 Months from receipt of Final Notice to Submit Additional Documents or from Effectivity of this Order, whichever is later, to submit additional document Failure to submit requested documents: Automatic denial of the TTRA for failure to prove entitlement to treaty benefits
With Notice of Archiving 3 Months from the Effectivity of this Order  Failure to submit requested documents: Automatic denial of the TTRA for failure to prove entitlement to treaty benefits
  • Filing a Claim for Refund in case the subjected rate is higher than should-be rate
  • Document: BIR Form 1913 with letter-request
Filing* Procedure
Independently of the TTRA

 

 ITAD shall endorse the claim for refund to the proper office that handles the processing of tax refund after the resolution of the TTRA
Simultaneous with the TTRA The officer where it was filed shall coordinate with and defer to ITAD the resolution of the nonresident’s entitlement to treaty benefit.
*Must be within the 2-year prescriptive period

 

  • Effect if during tax audit BIR finds inconsistencies made as basis of the certificate or ruling:
    • Examiner to inform ITAD, which shall issue amendatory certificate/ruling
  • BIR may likewise determine other internal revenue taxes (VAT, percentage tax, DST, donor’s tax)
  • Failure to file request within the period:
    • Penalties under the Tax Code
    • Perjury and other appropriate crimes
    • Payment of deficiency taxes
  • For dividends, interest and royalties, the submission of Certificate of Residence for Treaty Relief (CORTT) Form shall henceforth be discontinued. Nevertheless, previously submitted CORTT Forms shall still be forwarded to the concerned Revenue District Offices (RDOs) for compliance check.
  • For your reference, the issuance may be accessed Here. (Revenue Memorandum Order No. 14-2021, March 31, 2021)

GUIDELINES ON THE USE OF ELECTRONIC AUDITED FINANCIAL STATEMENTS SYSTEM.

  • The BIR prescribes the revised guidelines on the use of electronic Audited Financial Statements System. Taxpayers are mandated to scan the documents and use naming convention
  • A copy of the RMC is herewith attached for your easy reference. Revenue Memorandum Circular No. 43, 2021, March 31, 2021

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. If you have clarification or concern or no longer wish to receive updates, please feel free to reach out to us.

Best regards,
Ron Dumlao

 

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REVENUE MEMORANDUM CIRCULAR NO. 19-2022, FEBRUARY 4, 2022 (CLARIFICATION AND GUIDANCE ON SECTION 8 OF REVENUE REGULATIONS (RR) NO. 5-2021 ON THE TAX-FREE EXCHANGES OF PROPERTIES UNDER SECTION 40(C)(2) OF THE NATIONAL INTERNAL REVENUE CODE (TAX CODE) OF 1997, AS AMENDED BY REPUBLIC ACT (RA) NO. 11534 OR THE CREATE ACT

February 21, 2022

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January 31, 2022

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