Multinational companies tagged in fake receipts
- TAX & BUSINESS-RELATED NEWS [JUNE 28-JULY 6]
- SEC FURTHER EXTENDS THE DEADLINE TO AVAIL OF AMNESTY
- SEC LEGAL OPINION ON CORPORATE LIQUIDATION
- BIR RULINGS
- CTA CASE ON TAX TREATY
- SUPREME COURT CASE ON LOST REMEDY OF APPEAL
1. TAX & BUSINESS-RELATED NEWS [JUNE 28-JULY 6]
- Megaworld breaks ground for P2.3 billion Palawan condo
- COVID-19 pandemic tax cuts expire, original rates back —BIR
- Metro Pacific buys 70% stake in Cavite hospital
- 2 money changers closed
- Telus says better benefits, rewards attract younger workers
- No more expiration for Cebu Pacific’s travel fund; voucher validity extended
- ICTSI’s Subic facility links PH traders to southern China, Vietnam markets
- BIR Makati Region padlocks restaurant and its 4 branches
- Pag-IBIG Fund earns CoA’s highest audit rating for the 11th straight year
- After Shakey’s, Peri-Peri offers job opportunities to seniors, PWDs
- Megaworld eyes P6.5B in sales from new Cubao condo
- BIR exempts 59 more medicines from VAT
- Top 10 Philippine Universities for Employability Unveiled: See Who Made the Cut!
- Aboitiz denies buying majority stake in AirAsia Philippines
- Senators support passage of bill proposing P150-minimum increase in daily wage, Zubiri says
- Chichirya, ulam na: Taxing junk food anti-poor, says prof
- Multinational companies tagged in fake receipts scam of Bren Chong-linked firm
- Sibuyan residents secure Supreme Court writ of kalikasan vs DENR, mining firm
- BIR commissioner’s wife Carmela Esquivas-Lumagui set to join SEC
- SC ruling grants seaman’s $100,000 disability claims
- BOI greenlights US health-care firm’s P 858-M Davao project
- Taiwan extends visa-free entry to Filipinos until July 31, 2024
- PCCI cheers move to relax VAT refund requirements
- Monde Nissin starts P 1.2-B expansion of Davao facility
- CCAP: Impact of generative AI on IT-BPM industry positive
2. SEC FURTHER EXTENDS THE DEADLINE TO AVAIL OF AMNESTY
SEC Memorandum Circular (MC) No. 9, Series of 2023, dated June 27, 2023, further extends the deadline for amnesty application under SEC MC Nos. 2 and 6, Series of 2023, until September 30, 2023, and streamlines the amnesty application process.
Highlights include the simplification of processes, such as the removal of undertaking to submit the latest due Audited Financial Statements (AFS) and shortened turnaround time for the release of Confirmation of Payment (COP).
It may be recalled that SEC MC No. 2, Series of 2023 grants amnesty for non-filing and late filing of the General Information Sheet (GIS) and Annual Financial Statements (AFS), and non-compliance with the creation and designation of official contact details pursuant to MC No. 28, Series of 2020. The extension was extended twice aligned with the aim of the Commission to encourage qualified corporations to avail.
3. SEC LEGAL OPINION ON CORPORATE LIQUIDATION
LONE LIVING STOCKHOLDER & DIRECTOR MAY LAWFULLY ACT AS ITS TRUSTEE-IN-LIQUIDATION
Y Co. is requesting an opinion on the following: (1) may its lone living stockholder and director lawfully act as its trustee-in-liquidation to undertake the company’s liquidation process; and (2) if the said director can lawfully act as its trustee-in-liquidation, can he execute a Special Power of Attorney (SPA) delegating his authority to chosen representatives of the heirs of the deceased directors and stockholders of Y Co. In reply, the Commission referred to Section 139 of the Revised Corporation Code of the Philippines (RCCP) which states that a corporation whose corporate existence expires, may continue as a body corporate for a limited period of three (3) years from the effective date of its dissolution, but only for the following purposes: (a) prosecuting and defending suits by or against it and enabling it to settle and close its affairs; (b) disposing of and conveying its property; and (c) distributing its assets. After the lapse of 3 years, the corporation loses its limited corporate personality. Citing the previous legal opinion rendered in SEC-OGC Opinion No. 10-06, its lone living stockholder and director may lawfully act as its trustee-in-liquidation to undertake the company’s liquidation process. However, as to the 2nd query, the Commission refrains from rendering an opinion which is outside of its authority to provide since its jurisdiction does not extend to corporate liquidation. [SEC OFFICE OF THE GENERAL COUNSEL LEGAL OPINION NO. 23-06, MARCH 27, 2023]
4. BIR RULINGS
AVAILMENT OF ESTATE TAX AMNESTY DUE TO THE PANDEMIC, OLD AGE & DISTANCE OF THE PROPERTIES TO THE HEIRS
The heirs of AAA wish to avail themselves of the estate tax amnesty program and to allow them to file the estate tax returns and pay the estate tax due. As represented, the pandemic, old age, and the distance of the properties restrict the heirs’ movement. In reply, Sections 90 (D) and 91 (A) of the 1997 Tax Code, as amended, provide that in case the Commissioner otherwise permits, the return required shall be filed with authorized officers in which the decedent was domiciled at the time of his death. However, the estate tax imposed shall be paid at the time the executor, administrator, or heirs file the return. Given that the circumstances of the heirs of AAA are justifiable reasons to file the estate tax returns and pay the corresponding estate taxes due thereon, the request is granted. They have until June 14, 2023, to avail themselves of the estate tax amnesty program. [BIR RULING NO. 033-2023, APRIL 25, 2023]
TAXPAYER NOT ENGAGED IN THE REAL ESTATE BUSINESS & PROPERTY NOT FORMING PART OF HIS INVENTORY IS CONSIDERED A CAPITAL ASSET
J&M Corp. is requesting a confirmatory ruling that the sale of its parcel of land is subject only to 6% Capital Gains Tax (CGT) and Documentary Stamp Tax (DST) and not subject to Creditable Withholding Tax (CWT) and Value-Added Tax (VAT). As represented, J&M Corporation acquired a residential house and lot for investment purposes and not for lease in the ordinary course of business. The subject property is booked as “Non-Current Assets” under Investment. It has remained vacant and has never been leased from the time of its acquisition, as evidenced by the Certificate of Non-Tenancy. In reply, Section 39 (A)(1) of the 1997 Tax Code, as amended, provides that if the property is not actually used in trade of business of the taxpayer, whether connected with his trade or business, or not held for lease or sale to customers, it will be classified as a capital asset. Further, if the property is merely held for capital appreciation and investment purposes and remains vacant and idle, it is deemed a capital asset. Considering that J&M is not engaged in the real estate business and has not been used in the ordinary course of trade or business, the asset is classified as a capital asset. Thus, the sale of the subject property, being a capital asset, is subject only to CGT under Section 27 (D)(5) of the 1997 Tax Code, as amended, and DST under Section 196 of the same Code, and shall not be subject to CWT and VAT. [BIR RULING NO. 032-2023, APRIL 20, 2023]
[INCOME DERIVED BY NON-RESIDENT FOREIGN CORPORATION FROM SOURCES OUTSIDE THE PHILIPPINES IS NOT SUBJECT TO INCOME TAX & VAT] [THE SITUS OF TAX FOR SERVICES IS THE PLACE WHERE THE SERVICE IS RENDERED]
UPS Asia, a non-resident foreign corporation, is requesting confirmation that the income earned from its Regional Transportation Services Agreement (RTSA) with UPS SCS Philippines, Inc. is not subject to income tax, and consequently, to withholding tax and Value-Added Tax (VAT). UPS Asia is responsible for its worldwide network and makes all decisions regarding the pricing of any services to be provided to shippers and consignees (whether in or out of the Philippines) and transportation outside the Philippines. In ruling, the situs of income derived from services is determined not by the residence of the payor or of the place of payment, but solely by the place where the service is rendered. Thus, income earned by UPS Asia from the Local Services is subject to Philippine income tax and consequently, to withholding tax. However, income earned by UPS Asia relating to International Services which are performed abroad or outside the Philippines is not subject to Philippine income tax and consequently, to withholding tax. Moreover, all gross receipts derived by UPS Asia from its Local Services shall be subject to VAT and those that are derived from the International Services performed abroad or outside the Philippines are not subject to VAT. [BIR RULING NO. 025-2023, APRIL 12, 2023]
5. CTA CASE ON TAX TREATY
[FAILURE TO SATISFY THE REQUIREMENTS FOR ENTITLEMENT OF PREFERENTIAL RATE IS FATAL IN THE CLAIM OF LOWER PREFERENTIAL RATE] [RP-GERMANY TAX TREATY CALLS FOR NRFC & NOT INDIVIDUAL AS BENEFICIAL OWNER TO AVAIL OF LOWER PREFERENTIAL TAX]
Petitioner Croma Medic, Inc. filed a Petition for Review seeking the reversal of the CTA Special 2nd Division’s earlier Decision and Resolution. The Petitioner argued that it complied with the requirements under the Philippines-Germany (RP-Germany) Tax Treaty and it was able to prove and establish its chronological facts evidencing the overpayment of Final Withholding Tax (FWT) on the dividends it declared in favor of BEPHA, a German company that virtually owns 100% of its shares of stock, hence, qualified for the application of the 5% preferential tax rate granted under Article 10(2)(a) of the RP-Germany Tax Treaty. The Petitioner also contends that it is entitled to the refund of the excess 5% FWT in dividends that it paid to the Respondent Commissioner of Internal Revenue (CIR). In ruling, the Petitioner failed to prove that the beneficial owner of the dividends is a Non-Resident Foreign Corporation (NRFC) entitled to avail of the preferential tax rates under the RP-Germany Tax Treaty. Here, the Court finds that there is no indication that BEPHA is a resident of Germany or subject to tax in Germany and failed to satisfy the requirements for entitlement to the said preferential tax on dividends. Consequently, the Court shall apply the normal rate of 30% to dividends paid. Hence, the Petition was DENIED for lack of merit. [CROMA MEDIC, INC. VS. COMMISSIONER OF INTERNAL REVENUE, CTA EN BANC CASE NO. 2213, JUNE 13, 2023]
6. SUPREME COURT CASE ON LOST REMEDY OF APPEAL
ADMINISTRATIVE CLAIM FOR REFUND IS NOT A VALID SUBSTITUTE FOR THE LOST REMEDY OF APPEAL TO QUESTION THE FINAL DECISION OF THE CIR ON THE DISPUTED ASSESSMENT
Petitioner Brewery Properties, Inc. filed a Petition for Review on Certiorari assailing the earlier CTA En Banc’s Decision. Petitioner argued that it was not sufficiently informed of the facts on which the assessment was made; hence, the deficiency Documentary Stamp Tax (DST) assessment is void. On the other hand, the Respondent Commissioner of Internal Revenue (CIR) countered that the Petitioner failed to follow the proper remedy to contest the Final Decision on Disputed Assessment (FDDA) within 30 days from receipt thereof; thus, it has lost its remedy to contest the illegality of the tax assessed by the Respondent. In ruling, the Court ruled in favor of the Respondent. The Petitioner availed of the wrong remedy. The Details of Discrepancy attached to the assessment notices clearly stated the factual and legal bases of the DST assessment. Under the Tax Code, a taxpayer has 30 days from receipt of the disputed assessment to appeal to the CTA. Otherwise, the assessment shall become final, executory and demandable. Since the Petitioner received the FDDA on 19 September 2012, the Petitioner had only until 19 October 2012 to file an appeal before the CTA to question the FDDA. Considering that the Petitioner did not exercise the remedy of appeal, the FDDA became final, executory and demandable. Petitioner is thereby precluded from questioning the legality or validity of the assessment in the guise of claiming a refund of the DST and penalties paid under protest. Consequently, the Petition was DENIED. [BREWERY PROPERTIES, INC. VS. COMMISSIONER OF INTERNAL REVENUE, G.R. NO. 239260, MARCH 6, 2023, UPLOADED APRIL 12, 2023]
Megaworld breaks ground for P2.3 billion Palawan condo [The Philippine Star, July 6, 2023]
Andrew Tan-led property developer Megaworld has expanded its residential footprint in Palawan with the construction of its first condominium in its Paragua Coastown township in San Vicente, Palawan.
COVID-19 pandemic tax cuts expire, original rates back —BIR [GMA News Online, July 6, 2023]
The tax relief measures implemented to help businesses cope with the economic impact of the COVID-19 have expired and rates returned to pre-pandemic levels in July, the Bureau of Internal Revenue (BIR) has said.
Metro Pacific buys 70% stake in Cavite hospital [The Philippine Star, July 6, 2023]
MPH acquired a 70.4 percent stake in MCI, a 90-bed hospital in Cavite which caters to the cities of Imus and Bacoor.
https://www.philstar.com/business/2023/07/06/2278901/metro-pacific-buys-70-stake-cavite-hospital
2 money changers closed [The Philippine Star, July 5, 2023]
Aside from the gross violation of the provisions and requirements of the MORNBFI, Fonacier said other grounds for the cancellation of the registration of both companies include non-registration with the Anti-Money Laundering Council (AMLC) and violation of the duly executed deed of undertaking with the central bank.
https://www.philstar.com/business/2023/07/05/2278647/2-money-changers-closed
Telus says better benefits, rewards attract younger workers [GMA News Online, July 5, 2023]
Business process outsourcing firm Telus is calling on fellow employers to upgrade their benefits and rewards packages for their employees to attract younger workers—Gen Z and millennials—who put a premium on work-life balance.
No more expiration for Cebu Pacific’s travel fund; voucher validity extended [The Philippine Star, July 5, 2023]
Cebu Pacific has abolished the expiration date of its travel fund and extended its travel voucher validity to 18 months, giving passengers a chance to enjoy better and improved customer service.
ICTSI’s Subic facility links PH traders to southern China, Vietnam markets [Inquirer Mobile, July 5, 2023]
In a statement on Tuesday, the Razon-led port operator said that Subic Bay International Terminals (SBITC) made its inaugural call last month for a route linking the country to southern China and Vietnam. The South China Vietnam Philippines (SVP) service is seen catering to growing trade requirements following the reopening of the economy. ICTSI noted this raised the need for more routes ferrying agriculture and manufacturing exports.
BIR Makati Region padlocks restaurant and its 4 branches [Journal Online, July 4, 2023]
The “Oplan Kandado” Team of Revenue Region (RR) No. 8A-Makati City, led by Regional Investigation Division Chief, Atty. Zeus Gamaliel Mendoza and Asst. Division Chief, Atty. Jesse Alcaraz, temporarily closed a Chinese restaurant and its four (4) branches on June 29, 2023, for violating Section 115 of the National Internal Revenue Code (NIRC) of 1997, as amended.
https://journal.com.ph/bir-makati-region-padlocks-restaurant-and-its-4-branches/
Pag-IBIG Fund earns CoA’s highest audit rating for the 11th straight year [The Manila Times, July 4, 2023]
FOR the 11th straight time, Pag-IBIG Fund has earned the Commission on Audit’s (CoA) highest audit rating on the presentation of its financial statements, its top officials announced on Monday.
After Shakey’s, Peri-Peri offers job opportunities to seniors, PWDs [Inquirer Mobile, July 4, 2023]
Shakey’s Pizza Venture is implementing in branches of Peri-Peri Charcoal Chicken a successful program aimed at hiring seniors and persons with disabilities (PWDs).
Megaworld eyes P6.5B in sales from new Cubao condo [ABS-CBN News, July 4, 2023]
Megaworld Corporation on Tuesday said it hopes to make P6.5 billion in sales from the 39-storey Laurent Park Condominium that will rise in the Manhattan Garden City in the Araneta City in Cubao.
https://news.abs-cbn.com/business/07/04/23/megaworld-eyes-p65b-in-sales-from-new-cubao-condo
BIR exempts 59 more medicines from VAT [GMA News Online, July 3, 2023]
Based on Revenue Memorandum Circular 72-2023, 59 medicines for cancer, hypertension, high cholesterol, diabetes, mental illness, tuberculosis, and kidney disease have been added to the list of VAT-exempt products under the TRAIN Law and CREATE Act.
https://www.gmanetwork.com/news/money/economy/874661/bir-exempts-59-more-medicines-from-vat/story/
Top 10 Philippine Universities for Employability Unveiled: See Who Made the Cut! [The Good News Pilipinas Team, July 3, 2023]
The Top 10 Philippine universities that have caught the attention of employers in their quest for fresh talent have been revealed by the online job search platform JobStreet by SEEK.
Aboitiz denies buying majority stake in AirAsia Philippines [ABS-CBN News, July 3, 2023]
The group’s statement comes after a local broadsheet reported that AEV has become the low-cost airline’s majority owner.
Senators support passage of bill proposing P150-minimum increase in daily wage, Zubiri says [Manila Bulletin, July 3, 2023]
This came after the Senate labor committee chaired by Senator Jinggoy Ejercito Estrada has undertaken a public hearing on a Zubiri bill seeking a P150 daily increase increase on top of the current P570 daily wage in the National Capital Region (NCR).
Chichirya, ulam na: Taxing junk food anti-poor, says prof [ABS-CBN News, July 3, 2023]
Why tax “chichirya” when some families are already using junk food as a main meal?
https://news.abs-cbn.com/news/07/03/23/chichirya-ulam-na-taxing-junk-food-anti-poor-says-prof
Multinational companies tagged in fake receipts scam of Bren Chong-linked firm [Bilyonaryo, July 3, 2023]
Brenterprise was allegedly manufacturing fake receipts from 2008 until December 2022, when its office was raided by agents of the National Bureau of Investigation. Its clients allegedly come from a wide array of industries, including real estate, car distribution, fast food and construction.
Sibuyan residents secure Supreme Court writ of kalikasan vs DENR, mining firm [The Philippine Star, July 2, 2023]
According to a copy of the June 13 resolution obtained by Philstar.com, the Supreme Court en banc issued a writ of kalikasan against the Department of Environment and Natural Resources, Mines and Geosciences Bureau, and Altai Philippines Mining Corp.
BIR commissioner’s wife Carmela Esquivas-Lumagui set to join SEC [Bilyonaryo, July 2, 2023]
Babbler said Esquivas-Lumagui could be a potential replacement for SEC Chairman Emilio Benito Aquino whose seven-year term will end in 2025.
SC ruling grants seaman’s $100,000 disability claims [Philippine Daily Inquirer, July 2, 2023]
The Supreme Court has ruled that employers cannot deny a worker his disability pay even if he had not disclosed a preexisting illness that was later determined to have been unrelated to injuries that he suffered while on the job and had impaired his capacity to work.
https://newsinfo.inquirer.net/1796110/sc-ruling-grants-seamans-100k-disability-claims
BOI greenlights US health-care firm’s P 858-M Davao project [Inquirer Mobile, July 1, 2023]
The BOI said on Friday that the new project by Optum Global Solutions (Philippines) Inc. will provide health-care information management services (HIMS), and will be based in the Uprise Building-C in Davao City.
Taiwan extends visa-free entry to Filipinos until July 31, 2024 [Manila Bulletin, June 30, 2023]
In a statement, Taiwan’s MOFA said it made the decision after evaluating the measure’s effectiveness and considering the need to revive mutual bilateral exchanges and tourism in the post-pandemic era.
https://mb.com.ph/2023/6/30/taiwan-extends-visa-free-entry-to-filipinos-until-july-31-2024
PCCI cheers move to relax VAT refund requirements [Inquirer Mobile, June 29, 2023]
PCCI president George Barcelon told the Inquirer that lengthy processes for these tax refunds are a huge consideration for both Filipino-owned and foreign-owned businesses, especially for export enterprises.
Monde Nissin starts P 1.2-B expansion of Davao facility [Inquirer Mobile, June 28, 2023]
“The company seeks to find local sources for production materials such as eggs and flour. Aside from managing manufacturing and logistical costs, the bakery and biscuits plant is anticipated to shorten inventory cycles and improve product shelf visibility in Visayas and Mindanao,” it added.
CCAP: Impact of generative AI on IT-BPM industry positive [Inquirer Mobile, June 28, 2023]
The Contact Center Association of the Philippines (CCAP) on Tuesday said they see this emerging technology shaping the way information technology and business process management (IT-BPM) firms provide services to clients.
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