SEC Updates January 25-29 2023

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

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

For New Business Registrants

For Existing Business Taxpayers or Subsequent Registration

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

Online Registration of Books of Accounts and QR Stamping

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

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

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

BIR RULINGS

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

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

• The purchases of goods/articles under the construction/development of NHA’s Socialized Housing Program is exempt from project-related income tax, creditable withholding tax and value-added tax on its income received directly in connection with the mentioned project. However, the purchases of goods/articles of the said company shall be subject to VAT, even if the said purchases are to be used for social housing projects and must issue VAT exempt official receipts on its gross receipts from the said socialized housing project. (BIR Ruling No: Certificate of Tax Exemption No: NSH-307-2022)

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

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