DOF OPINION ON FRATERNAL ORGANIZATION ALLOWED TO DECLARE DIVIDENDS
Other Relevant Tax Updates:
- TAX & BUSINESS-RELATED NEWS [NOVEMBER 28-DECEMBER 5]
- DOF OPINION ON FRATERNAL ORGANIZATION ALLOWED TO DECLARE DIVIDENDS
- CTA CASES ON WHEN A TAXPAYER SHOULD APPEAL BEFORE THE CTA IF THERE IS A PENDING ADMINISTRATIVE APPEAL BEFORE THE CIR & GPP ENGAGED IN THE PRACTICE OF PROFESSION IS NOT SUBJECT TO LBT
1. TAX & BUSINESS-RELATED NEWS [NOVEMBER 28-DECEMBER 5]
- Review of VAT refund scheme for PEZA firms backed
- The little-known crew behind the success of Jollibee
- Billionaires should invest in Maharlika fund, not workers: group
- DMCI Homes plans to launch a P7-B high-rise project
- Villar to open casino in 2023, launch more condos
- Oriental Mindoro governor OKs armour rocks extraction ordinance
- Over 20,000 workers affected in Zamboanga City closed fishing season
- Lucia Land eyes P5-billion loan, 11 joint venture projects
- Hybrid work changing business dynamic, says HR tech firm
- 19 schools post perfect passing rate in November 2022 Nurse Licensure Exam
- UBE Express to launch One Ayala to NAIA Terminals 1-4 service on Dec. 1
- Indonesia families sue govt over cough syrup deaths, injuries
- Robinsons Land expands with opening of 54th mall in Gapan
- Senator wants regulated parking fees nationwide
- Villar files bill seeking to give 13th month pay for contractual, job order personnel
- ERC orders 3-month suspension of FIT-All charges to help soothe inflation pain
- DMCI unit targets more subway contract packages
- Marcos to sign order promoting ease of doing business in PH: Palace
- Lazada ordered to pay P8.17M in business tax to Makati City
- MPTC to award Candaba viaduct project by yearend
Review of VAT refund scheme for PEZA firms backed [Inquirer Mobile, December 5, 2022]
The American Chamber of Commerce of the Philippines (AmCham) is supporting moves to amend the country’s zero value-added tax (VAT) rating perk for registered businesses, citing that it takes an inordinate amount of time to get tax refunds from the government.
The little-known crew behind the success of Jollibee [Philippine Daily Inquirer, December 5, 2022]
“Jollibee Group has always preferred to go directly to the source of its vegetables as much as possible,” Jollibee Group Foundation (JGF) executive director Gisela Tiongson tells the Inquirer.
https://business.inquirer.net/376302/the-little-known-crew-behind-the-success-of-jollibee
Billionaires should invest in Maharlika fund, not workers: group [ABS-CBN News, December 5, 2022]
This is the proposal of Atty. Sonny Matula, Nagkaisa Labor Coalition chairman, after House Speaker Martin Romualdez led several lawmakers in filing House Bill 6398 seeking the creation of a sovereign wealth fund, dubbed as the Maharlika Investment Fund.
https://news.abs-cbn.com/news/12/05/22/tax-billionaires-for-maharlika-investment-fund-group
DMCI Homes plans to launch a P7-B high-rise project [BusinessWorld, December 5, 2022]
REAL-ESTATE developer DMCI Homes, Inc. is targeting to launch a high-rise condominium project in Caloocan by January next year, according to its president.
Villar to open casino in 2023, launch more condos [Manila Bulletin, December 4, 2022]
The project, which will eventually feature hotels, condominiums, a mall, a casino, and a theme park, is located in the Las Piñas-Parañaque area near the Ninoy Aquino International Airport.
https://mb.com.ph/2022/12/04/villar-to-open-casino-in-2023-launch-more-condos/
Oriental Mindoro governor OKs armour rocks extraction ordinance [ABS-CBN News, December 3, 2022]
The move came despite his pronouncement last Nov. 28 that he will not allow any form of mining as long as he is the governor of the province.
https://news.abs-cbn.com/news/12/03/22/oriental-mindoro-governor-oks-armour-rocks-extraction
Over 20,000 workers affected in Zamboanga City closed fishing season [ABS-CBN News, December 3, 2022]
Canning factories and fishing vessels catching tamban in Zamboanga City have been implementing the closed season for 12 years now.
Sta. Lucia Land eyes P5-billion loan, 11 joint venture projects [BusinessWorld, December 2, 2022]
STA. LUCIA Land, Inc. said on Thursday that its board had approved taking out a P5-billion loan from institutional lenders while authorizing joint ventures to develop 11 projects, including two in Mindanao.
Hybrid work changing business dynamic, says HR tech firm [ABS-CBN News, December 2, 2022]
Hybrid work has presented new challenges for businesses such as finding solutions for both the employers and workers that fit the new normal, human resource tech company Sprout Solutions CEO and co-founder Patrick Gentry said on Friday.
https://news.abs-cbn.com/video/business/12/02/22/hybrid-work-changing-business-dynamic-hr-tech-firm
19 schools post perfect passing rate in November 2022 Nurse Licensure Exam [Manila Bulletin, December 2, 2022]
Last Nov. 30, PRC announced that 18,529 out of 24,903 examinees successfully passed the Nurse Licensure Exam.
UBE Express to launch One Ayala to NAIA Terminals 1-4 service on Dec. 1 [ABS-CBN News, December 1, 2022]
Fare is set at P150, it said.
Indonesia families sue govt over cough syrup deaths, injuries [Manila Bulletin, December 1, 2022]
The World Health Organization has said it found an “unacceptable amount” of diethylene glycol and ethylene glycol in four Indian-made cough syrups and warned they could be linked to the deaths.
https://mb.com.ph/2022/12/01/indonesia-families-sue-govt-over-cough-syrup-deaths-injuries/
Robinsons Land expands with opening of 54th mall in Gapan [ABS-CBN News, November 30, 2022]
Robinsons Gapan is also RLC’s 12th mall in Northern and Central Luzon and its second in Nueva Ecija. It is near the provincial capital Palayan and Cabanatuan as well as the towns in Bulacan province, the Gokongwei-led group said.
https://news.abs-cbn.com/business/11/30/22/robinsons-land-opens-rice-crop-inspired-mall-in-gapan
Senator wants regulated parking fees nationwide [The Philippine Star, November 29, 2022[
Sen. Ramon Bong Revilla Jr., who chairs the Senate Committee on Public Works, filed a bill regulating parking fees in commercial and business establishments, institutions and parking facilities in response to public clamor.
Villar files bill seeking to give 13th month pay for contractual, job order personnel [Manila Bulletin, November 29, 2022]
Senator Mark A. Villar has filed a bill seeking to grant 13th month pay for contractual and job order personnel in the government service.
ERC orders 3-month suspension of FIT-All charges to help soothe inflation pain [The Philippine Star, November 29, 2022]
The FIT-All is a uniform charge imposed on all on-grid electricity consumers. It is a component of the electricity bill that ensures the development and promotion of renewable energy (RE) in the country.
DMCI unit targets more subway contract packages [BusinessWorld, November 29, 2022]
The subway line will start in Quezon City’s Mindanao Ave.–Quirino Highway and will end in FTI, Taguig City. Its proposed depot is in Brgy. Ugong, Valenzuela City.
Marcos to sign order promoting ease of doing business in PH: Palace [ABS-CBN News, November 29, 2022]
“The EO will mandate concerned offices to establish a Green Lane to expedite and streamline the process and requirements for the issuance of permits and licenses, including resolutions of issues concerning strategic investments,” it added.
https://news.abs-cbn.com/business/11/29/22/marcos-to-sign-order-on-ease-of-doing-business-palace
Lazada ordered to pay P8.17M in business tax to Makati City [Bilyonaryo, November 28, 2022]
The Court of Tax Appeals’ special third division partially granted Lazada E-Services Philippines Inc.’s petition for review but still ordered it to pay the City of Makati and its City Treasurer P8.17 million on local business taxes for 2015 and 2017, albeit smaller than the P21.8 million that was sought.
MPTC to award Candaba viaduct project by yearend [BusinessWorld, November 28, 2022]
The Candaba Viaduct is a causeway allowing motorists to traverse the section of the swamp between Pulilan, Bulacan and Apalit, Pampanga. A third viaduct will be built between the northbound and southbound portions. The viaduct is a strategic expressway link that has been serving the Metro Manila, and Central and North Luzon road corridor for several years.
2. DOF OPINION ON FRATERNAL ORGANIZATION ALLOWED TO DECLARE DIVIDENDS
K Co., a fraternal organization, is requesting a review of the BIR Ruling, which denied its request for tax exemption as a non-stock, non-profit corporation, or association under Section 30(C) of the 1997 Tax Code, as amended. In ruling, K Co.’s organization as a mutual benefit association and its concurrent license from the Insurance Commission does not automatically entitle the same to income tax exemption. K Co. must still comply with the requirements and the existing rules and regulations for its income to be exempt from tax, particularly for it to operate as a non-stock, non-profit association, assisting its members “through the provision of benefits through an established system of benefits payments to its members and their dependents.” As such, K Co.’s receipt and management of funds associated with savings or investment programs is not a violation of non-inurement provision. Moreover, mutual benefit associations are legally allowed to declare dividends from their surplus, specifically to give out additional benefits and the same shall not be construed as dividends for stock corporations. Verily, the mutual benefit association could remain to be a non-stock and non-profit entity, provided that it shall manage funds associated with savings and investment programs for the exclusive benefit of its members or their dependents. [DEPARTMENT OF FINANCE OPINION NO. 017.2022, OCTOBER 17, 2022]
3. CTA CASES
[IF THE TAXPAYER OPTS TO APPEAL TO THE CIR THE FINAL DECISION OF THE LATTER’S DULY AUTHORIZED REPRESENTATIVE, THE TAXPAYER’S REMAINING OPTION IS TO WAIT FOR THE CIR’S DECISION BEFORE ELEVATING ITS CASE TO THE CTA] [WHEN A TAXPAYER OPTS TO FILE AN ADMINISTRATIVE APPEAL, THE CIR IS NOT GIVEN A FRESH OR SEPARATE 180-DAY PERIOD WITHIN WHICH TO DECIDE THE ADMINISTRATIVE APPEAL]
Petitioner Hijo Agrarian Reform Beneficiaries Cooperative filed a Petition for Review seeking to appeal the Final Decision on Disputed Assessment (FDDA) issued by the Respondent Commissioner of Internal Revenue (CIR). The Petitioner argued that the subject deficiency tax assessment issued by the Respondent against it is barred by prescription. On the other hand, the Respondent countered that the Petitioner failed to timely file its appeal before the Court; thus, the assessment already became final, executory, and demandable. In ruling, in cases where a taxpayer’s protest is denied by the CIR’s duly authorized representative, a taxpayer is given two (2) alternative remedies, to either: (1) appeal to the CTA within 30 days from the date of receipt of the representative’s decision; or, (2) to elevate his protest through a request for reconsideration to the CIR, within the same 30-day period, otherwise referred to as an “administrative appeal.” Thereafter, if the taxpayer’s administrative appeal is not acted upon by the CIR within 180 days from the filing of the protest, the concerned taxpayer may either: (1) appeal to the CTA within 30 days after the expiration of the said 180-day period; or (2) await the final decision of the CIR on the disputed assessment, and appeal such final decision to the CTA within 30 days from receipt of a copy thereof. Considering that the 180-day period has already lapsed by the time the Petitioner received the FDDA and the Petitioner opted to file an administrative appeal before the Respondent, through a Motion for Reconsideration, within 30 days from receipt thereof, the only remedy available to the Petitioner at this point is to wait for the Respondent’s decision before filing an appeal before the Court. Without waiting for any action from the Respondent, the Petitioner filed the instant Petition. Consequently, the Petition was DISMISSED for lack of jurisdiction. [HIJO AGRARIAN REFORM BENEFICIARIES COOPERATIVE (HARBCO) VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 9797, NOVEMBER 28, 2022]
GENERAL PROFESSIONAL PARTNERSHIP PURELY ENGAGED IN THE PRACTICE OF PROFESSION IS NOT SUBJECT TO LOCAL BUSINESS TAX
Petitioner Casas+ Architects filed a Petition for Review against the Respondents City of Makati and Jesusa Cuneta, in her capacity as the City Treasurer of Makati, assailing the Order granting the Respondent’s Motion for Reconsideration dismissing the Petitioner’s claim for a refund of erroneously paid Local Business Taxes (LBT). The Petitioner argued that it is a General Professional Partnership (GPP), hence, not subject to the tax imposed under Section 3A.02(g) of the Revised Makati Revenue Code (RMRC). On the other hand, the Respondent contended that the Petitioner was not purely engaged as a GPP since it was also engaged in services other than in the exercise of its profession. In ruling, the Court finds that the Petitioner is purely engaged in the practice of profession. The Petitioner presented evidence to prove that it was not involved in interior decoration but in interior design and that they did not employ laborers and construction workers. The Court also agreed with the Petitioner’s argument that the billing assessments for the 2nd quarter of 2014 to the 4th quarter of 2015, which were issued by the Respondent in relation to the Petitioner’s renewal of its business permits, were not the assessments contemplated under Section 195 of the Local Government Code (LGC). Considering that the Petitioner’s remedy falls under Section 196 of the LGC and further considering that the Petitioner is not engaged in any activity other than the practice of architecture, the Court held that the Petitioner is entitled to its claim for a refund but to a reduced amount. Consequently, the Petition was PARTIALLY GRANTED. [CASAS+ ARCHITECTS VS. THE CITY OF MAKATI & JESUSA E. CUNETA, IN HER CAPACITY AS THE CITY TREASURER OF THE CITY OF MAKATI, CTA AC CASE NO. 259, NOVEMBER 24, 2022]
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