GMA NETWORK BUYS BACK PDRS HELD BY FOREIGN NATIONALS TO PROTECT INVESTMENTS + PROPOSED 365-DAY MORATORIUM ON LOANS UNDER BAYANIHAN 2 MAY CAUSE GRAVE DAMAGE TO ECONOMY ACCORDING TO MAP
Other Relevant Tax Updates:
- Court of Tax Appeals (CTA) Cases Digest
- Tax and Business-Related News [August 8-14]
I. CTA CASES DIGEST
- Court’s jurisdictionis not limited to disputed assessments or refunds of internal revenue taxes; BIR normally has three (3) years to assess taxpayer’s tax liabilities; definite amount of deficiency tax assessment must be indicated in the assessment notice
- Failure to submit required documents within administrative level, as set forth in Revenue Memorandum Order (RMO) 53-98, is not fatal in claim for refund in judicial level
- Renewable Energy (RE) developersmust be registered with Department of Energy (DOE) to be entitled to vat incentives under renewable energy law
- Re developersare mandated to submit three documents to qualify for vat zero-rating
[COURT’S JURISDICTION IS NOT LIMITED TO DISPUTED ASSESSMENTS OR REFUNDS OF INTERNAL REVENUE TAXES] [BIR NORMALLY HAS THREE (3) YEARS TO ASSESS TAXPAYER’S TAX LIABILITIES] [DEFINITE AMOUNT OF DEFICIENCY TAX ASSESSMENT MUST BE INDICATED IN THE ASSESSMENT NOTICE]
Petitioner Zenith Foods Corporation filed a Petition for Review seeking to cancel the assessment issued by the Respondent CIR citing prescription. Likewise, Petitioner is seeking for the refund or issuance of Tax Credit Certificate (TCC) covering the deficiency tax payment made due to dis-accreditation of being an importer. Respondent argued that the Court has no jurisdiction since the assessment had become final, executory and demandable due to the Petitioner’s failure to submit relevant documents within 60 days from the filing protest. In ruling, the Court CANCELLED the assessment since it was issued beyond the 3-year prescriptive period. Likewise, perusal of the documents showed that the Respondent failed to provide a definite amount in its assessment notice. Thus, the effect of such non-compliance and issuing assessment notice beyond the period required by law are tantamount to violation of taxpayer’s right to due process which rendered Respondent’s further actions null and void. Thus, the Petition was GRANTED resulting in the cancellation of the assessment. Likewise, the Court also ordered the Respondent to refund the Petitioner the amount corresponding to deficiency tax payment due to dis-accreditation of being an importer. [ZENITH FOODS CORPORATION VS. COMMISISONER OF INTERNAL REVENUE, CTA CASE NO. 9165, JULY 29, 2020]
FAILURE TO SUBMIT REQUIRED DOCUMENTS WITHIN ADMINISTRATIVE LEVEL, AS SET FORTH IN RMO 53-98, IS NOT FATAL IN CLAIM FOR REFUND IN JUDICIAL LEVEL
Petitioner CIR filed a Petition for Review seeking reversal of the Court Second Division’s earlier decision partially granting refund in favor of the Respondent Colt Commercial, Inc. Petitioner argued that the Respondent is not entitled to the refund of its alleged unutilized input taxes attributable to its zero-rated sales due to its failure to substantiate and comply with the requirements under the Tax Code. Likewise, it failed to prove that it had strictly complied with the submission of all supporting documents enumerated under RMO No. 53-98 at the administrative level. In ruling, the Court cited the Supreme Court case in Pilipinas Total Gas, Inc. vs. CIR, G.R No. 207112 dated December 8, 2015, which provides that a taxpayer’s failure to submit the requirements listed under RMO No. 53-98 is not fatal to its claim for tax refund and/or credit. In addition, the Court noted that the Respondent failed to provide the VAT Zero Rating Certificate of its clients. Nonetheless, Respondent submitted a confirmation letter issued by PEZA Deputy General, which was accepted for as long as the PEZA Certificate of Registration was issued by PEZA Deputy General. Thus, the Petition was DENIED. [COMMISSIONER OF INTERNAL REVENUE VS. COLT COMMERCIAL, CTA EN BANC CASE NO. 2086, JULY 21, 2020]
RE DEVELOPERS MUST BE REGISTERED WITH DOE TO BE ENTITLED TO VAT INCENTIVES UNDER RENEWABLE ENERGY LAW
Petitioner CIR filed a Petition for Review seeking to reverse the Court in Division’s earlier decision partially granting the claim for refund or issuance of Tax Credit Certificate (TCC) in favor of the Respondent CE Casecnan Water and Energy Company, Inc. Petitioner argued that the Respondent must seek refund from its individual suppliers and not from the BIR following the case of Coral Bay. On the other hand, Respondent countered that since the goods and/or services it purchased are destined for consumption within the Philippine territory, it is legally feasible that its supplier of goods and/or services passed on VAT to them. Being the party which ultimately bears the burden of VAT, Respondent is the proper party to claim the same. In ruling, the Court cited Republic Act (R.A.) No. 9513 or the Renewable Energy Law which states that all Renewable Energy Developers (RE Developers) registered in the Department of Energy are entitled to zero-rated VAT on its purchases of local supply of goods, properties and services needed for the development, construction and installation of its plant facilities. In the appreciation, the Court noted that the Respondent posited that it is not claiming refund under the said provision but instead claiming only for input VAT on zero-rated transaction. Upon perusal of records, it shows that the Petitioner failed to support its defense that the Respondent is an RE Developer entitled to the incentives under R.A. No. 9513. Likewise, Petitioner’s allegation that it is Respondent’s suppliers of goods and service which have the standing to claim for refund has no leg to stand on. Hence, the Petition was DENIED for lack of merit and earlier decision was AFFIRMED. [COMMISSIONER OF INTERNAL REVENUE VS. CE CASECNAN WATER AND ENERGY COMPANY, INC., CTA EN BANC CASE NO. 2094, JULY 21, 2020]
RE DEVELOPERS ARE MANDATED TO SUBMIT THREE DOCUMENTS TO QUALIFY FOR VAT ZERO-RATING
Petitioner Philippine Geothermal Production Company, Inc. filed consolidated Petitions for Review seeking refund or issuance of Tax Credit Certificate (TCC) of its unutilized input VAT attributable to its zero-rated sales/receipts for the second and third quarter of year 2013. Respondent CIR countered that Petitioner failed to present certified true copy of Quarterly VAT Returns corresponding to the period of claim showing that the amount of TCC/Refund being claimed was deducted from available input tax. In ruling, the Court held that the Petitioner failed to comply with the requisites to successfully obtain credit/refund of input VAT. Since the Petitioner is an RE Developer, its sale of steam generated through renewable geothermal energy should be considered as VAT zero-rated. However, Rule 5 of the Implementing Rules and Regulations of R.A. No. 9513 mandates the submission of Department of Energy (DOE) Certificate of Registration, Registration with the Board of Investments (BOI), and Certificate of Endorsement by the DOE in order to qualify for VAT zero-rating. Perusal of the documents showed that the first two certificates were only issued in 2014 and the Petitioner was not able to submit the DOE endorsement. Consequently, the Petition was DENIED for failure to establish that part of its declared sales/receipts qualifies for VAT zero-rating. [PHILIPPINE GEOTHERMAL PRODUCTION COMPANY, INC. VS. COMMISSION OF INTERNAL REVENUE, CTA CASE NOS. 9208 AND 9274, JULY 24, 2020]
II.TAX AND BUSINESS-RELATED NEWS [AUGUST 8-14]
- Proposed 365-day moratorium on loans may cause ‘grave damage’ to economy: MAP
- US, China to discuss trade deal amid COVID-19 disruption
- Bureau of Treasury raises record P516 billion in PROGRESO bonds offering
- US stimulus impasse overshadows drop in jobless claims
- Some European firms in PH holding off expansion plans, new investments: study
- Bangko Sentral says PH foreign debt remains manageable
- Coronavirus weighs on global oil demand: IEA
- US holds off on extra tariffs in EU Airbus dispute
- CALAX operator gets regulator’s nod to collect toll this month
- ‘Cancel rent’ movement gains ground in the US
- Local sellers bet on e-commerce as consumers shift to ‘online first’ in purchases
- Apple must pay $500 million over patent violations, US court rules
- First Metro Investment sees deeper recession this year, but recovery in 2021
- Cigarette tax stamps down 59 percent during lockdown: DOF
- GMA Network buys back PDRs held by foreign nationals ‘to protect investments’
- Online reporting of pensioners now allowed: GSIS
- Coronavirus to cut remittances to Asia-Pacific by $54.3 billion: ADB
- Advertising slump during virus crisis hits media jobs
Proposed 365-day moratorium on loans may cause ‘grave damage’ to economy: MAP [ABS-CBN News, August 14, 2020]
The proposed 365-day loan moratorium under the House version of the Bayanihan 2 law might have an “unintended” adverse effect and could lead to “grave damage” to the economy, the Management Association of the Philippines said Friday.
US, China to discuss trade deal amid COVID-19 disruption [ABS-CBN News, August 14, 2020]
Negotiators from the United States and China will on Saturday discuss the “phase one” trade deal signed earlier this year — before the coronavirus slammed the world economy and relations between the two economic powers took a turn for the worse.
Source: https://news.abs-cbn.com/business/08/14/20/us-china-to-discuss-trade-deal-amid-covid-19-disruption
Bureau of Treasury raises record P516 billion in PROGRESO bonds offering [ABS-CBN News, August 14, 2020]
The 5-year retail treasury bonds called PROGRESO Bonds settled a rate of 2.625 percent per annum, the DOF said in a statement.
US stimulus impasse overshadows drop in jobless claims [ABS-CBN News, August 13, 2020]
Equities on both sides of the Atlantic failed to get much of a boost out of improving US jobless claims as investors fretted over US lawmakers’ failure to find common ground on an economic rescue package.
Source: https://news.abs-cbn.com/business/08/13/20/us-stimulus-impasse-overshadows-drop-in-jobless-claims
Some European firms in PH holding off expansion plans, new investments: study [ABS-CBN News, August 13, 2020]
European companies operating in the Philippines are putting expansion plans on hold, with some withdrawing altogether new investments, a study released Thursday showed as the coronavirus pandemic impact operations.
Bangko Sentral says PH foreign debt remains manageable [ABS-CBN News, August 13, 2020]
The Bangko Sentral ng Pilipinas said the country’s external debt remains manageable despite the increase in borrowings this year to finance the Philippines’ COVID-19 response.
Source: https://news.abs-cbn.com/business/08/13/20/bangko-sentral-says-ph-foreign-debt-remains-manageable
Coronavirus weighs on global oil demand: IEA [ABS-CBN News, August 13, 2020]
The global coronavirus pandemic is weighing heavily on worldwide demand for oil as the aviation and transport sectors, in particular, struggle with the fallout from the lockdowns aimed at reining in the disease, the International Energy Agency said Thursday.
Source: https://news.abs-cbn.com/business/08/13/20/coronavirus-weighs-on-global-oil-demand-iea
US holds off on extra tariffs in EU Airbus dispute [ABS-CBN News, August 13, 2020]
Washington said Wednesday it would hold off on its threat to impose higher tariffs on $7.5 billion worth of EU goods in its long-running dispute over subsidies to European aircraft maker Airbus.
Source: https://news.abs-cbn.com/business/08/13/20/us-holds-off-on-extra-tariffs-in-eu-airbus-dispute
CALAX operator gets regulator’s nod to collect toll this month [ABS-CBN News, August 13, 2020]
The Toll Regulatory Board has approved the rates for several interchanges of the Cavite-Laguna Expressway (CALAX), MPCALA Holdings Inc said Thursday.
‘Cancel rent’ movement gains ground in the US [ABS-CBN News, August 13, 2020]
Without a job and terrified of being left homeless during the coronavirus pandemic, Manuel Acero had no other option but to enlist in the US Army.
Source: https://news.abs-cbn.com/business/08/13/20/cancel-rent-movement-gains-ground-in-the-us
Local sellers bet on e-commerce as consumers shift to ‘online first’ in purchases [ABS-CBN News, August 13, 2020]
Macoy Infante is now constantly packing parcels from his condo unit as orders for his and his partners’ room and linen spray line surged after they signed up to become a Shopee seller late in July.
Apple must pay $500 million over patent violations, US court rules [ABS-CBN News, August 13, 2020]
A Texas court has ordered Apple to pay more than $500 million in damages and interest for 4G patent infringements held by intellectual property company PanOptis.
First Metro Investment sees deeper recession this year, but recovery in 2021 [ABS-CBN News, August 12, 2020]
The Philippines faces a much deeper recession this year but is expected to recover in 2021, the investment banking arm of Metrobank Group said on Wednesday.
Cigarette tax stamps down 59 percent during lockdown: DOF [ABS-CBN News, August 11, 2020]
The total number of cigarette tax stamps issued by the Bureau of Internal Revenue (BIR) during the lockdown of Metro Manila and other parts of Luzon fell by more than half, the Department of Finance (DOF) said Tuesday.
Source: https://news.abs-cbn.com/business/08/11/20/cigarette-tax-stamps-down-59-percent-during-lockdown-dof
GMA Network buys back PDRs held by foreign nationals ‘to protect investments’ [ABS-CBN News, August 11, 2020]
GMA Network Inc said Tuesday it would “purchase and acquire” Philippine Deposit Receipts held by non-Filipinos to protect investments after lawmakers adopted a working group’s recommendation denying the franchise of rival ABS-CBN’s franchise in July.
Online reporting of pensioners now allowed: GSIS [ABS-CBN News, August 10, 2020]
Pensioners of the Government Service Insurance System can now report online instead of appearing personally for the required Annual Pensioners Information Revalidation (APIR) to receive their pension, the GSIS said on Monday.
Source: https://news.abs-cbn.com/business/08/10/20/online-reporting-of-pensioners-now-allowed-gsis
Coronavirus to cut remittances to Asia-Pacific by $54.3 billion: ADB [ABS-CBN News, August 9, 2020]
Remittance receipts in Asia and the Pacific will fall by as much as $54.3 billion in 2020 due to large-scale unemployment and wage reduction among migrant workers hit by the coronavirus pandemic, according to a study by the Asian Development Bank.
Advertising slump during virus crisis hits media jobs [ABS-CBN News, August 8, 2020]
Media redundancies, partial layoffs and managerial wage cuts are on the rise as advertising markets implode, despite customers showing an ever stronger appetite for information on the coronavirus crisis.
Source: https://news.abs-cbn.com/business/08/08/20/advertising-slump-during-virus-crisis-hits-media-jobs
If you wish to get a copy of the complete texts of the above issuances, send us an email thru taxseminars@dmdcpa.com.ph.
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