Changes in CREATE IRR approved
Other Relevant Tax Updates:
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TAX & BUSINESS-RELATED NEWS [AUGUST 7-14]
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BIR TAX ADVISORY ON THE FILING OF 1701Q USING eFPS
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BIR FURTHER CLARIFIES THE IMPLEMENTATION OF RR NO. 3-2023 SPECIFICALLY ON THE VAT ZERO-RATING ON LOCAL PURCHASES OF REGISTERED EXPORT ENTERPRISES
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BIR ANNOUNCES THE AVAILABILITY OF BIR FORMS 1600-PT, 1600-VT, 1602Q, 1603Q, 2551Q & 2552 IN THE eFPS
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BIR CLARIFIES THE INFORMATION THAT SHALL APPEAR IN RECEIPTS/INVOICES ON PURCHASES OF SENIOR CITIZENS & PERSONS WITH DISABILITIES THROUGH ONLINE OR MOBILE PLATFORMS
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DOLE ISSUES A LABOR ADVISORY ON THE PAYMENT OF WAGES FOR THE SPECIAL (NON-WORKING) DAY ON AUGUST 21, 2023 & REGULAR HOLIDAY ON AUGUST 28, 2023
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CTA CASES ON THE EXTENT OF TAX EXEMPTION OF ELECTRIC COOPERATIVES & CGT EXEMPTION ON SALE OF RESIDENTIAL PROPERTY
1. TAX & BUSINESS-RELATED NEWS [AUGUST 7-14]
1. Fix ‘corrupt’ BIR, BOC systems instead of imposing new taxes —Escudero
2. PAGCOR: Over P2B worth of unpaid dues of shuttered POGO licensee can’t be collected anymore
3. Changes in CREATE IRR approved
4. DOF, DTI OK amendment to CREATE’s IRR amid VAT zero-rating issues
5. BancNet, PCHC merger pushed
6. US microchip maker sets $1-B expansion of 2 PH plants
7. Retail group backs taxing online sellers, refund for tourists
8. Villar unveils 6.2-km Villar Avenue
9. DOT accredits all 8 vessels of SM’s 2Go
10. Diokno rejects proposed luxury tax hike
11. House OKs new code to repeal decades-old, ‘obsolete’ building law
12. BIR may exempt small farmers from receipt, invoice requirement
13. ‘Time to move on’: Zubuchon to close Manila branches in August
14. Villar’s PAVI acquires MCX from Ayala Corporation
15. 1M Filipino families to gain from tax amnesty extension
16. House panel OKs bill repealing 64-yr-old PH Medical Act
17. Tax amnesty extension lapses into law without Marcos’ signature
18. US senator eyes sending American students to Philippine nursing schools
19. BIR slashes collection target from large companies
20. Taxpayer numbers a growing concern
2. BIR TAX ADVISORY ON THE FILING OF 1701Q USING eFPS
In a Tax Advisory issued on August 10, 2023, the BIR has advised individual taxpayers who are mandated to use Electronic Filing and Payment (eFPS), to file BIR Form 1701Q-Quarterly Income Tax Return (ITR) using the eFPS starting with the 2nd Quarter 2023 ITR since the Income Tax rates of BIR Form 1701Q have already been updated in the system. However, taxpayers who already filed and paid their corresponding Income Tax due thereon, if any, need not re-file the said tax returns in the eFPS. Furthermore, no penalty shall be imposed for the wrong venue filing of returns and payment of taxes.
3. BIR FURTHER CLARIFIES THE IMPLEMENTATION OF RR NO. 3-2023 SPECIFICALLY ON THE VAT ZERO-RATING ON LOCAL PURCHASES OF REGISTERED EXPORT ENTERPRISES
Revenue Memorandum Circular (RMC) No. 80-2023, issued on August 9, 2023, clarifies issues relative to the implementation of Revenue Regulations (RR) No. 3-2023 and other related concerns on Value-Added Tax (VAT) zero-rate transactions on local purchases of the Registered Export Enterprises (REEs) and other entities granted with VAT zero-rate incentives under special laws and international agreements.
It may be recalled that RR No. 3-2023 provides that local supplier of goods and/or services of REEs shall no longer be required to apply for approval of VAT zero-rating with the BIR. The VAT Zero-Rating Certificate issued by the concerned Investment Promotion Agency (IPA) shall be sufficient for the availment of VAT zero-rating subject to the post audit of the BIR.
Highlights include clarifications on transactions with REE and entities granted with VAT zero-rating incentives under Special Laws and International Agreements, and clarifications on VAT zero-rating certificate/endorsement by appropriate government agency.
4. BIR ANNOUNCES THE AVAILABILITY OF BIR FORMS 1600-PT, 1600-VT, 1602Q, 1603Q, 2551Q & 2552 IN THE eFPS
Revenue Memorandum Circular (RMC) No. 79-2023, issued on August 8, 2023, announces the availability of BIR Forms 1600-PT, 1600-VT, 1602Q, 1603Q, 2551Q, and 2552 in the Electronic Filing and Payment System (eFPS).
5. BIR CLARIFIES THE INFORMATION THAT SHALL APPEAR IN RECEIPTS/INVOICES ON PURCHASES OF SENIOR CITIZENS & PERSONS WITH DISABILITIES THROUGH ONLINE OR MOBILE PLATFORMS
Revenue Regulations (RR) No. 8-2023, issued on July 26, 2023, clarifies the information that shall appear in the official receipts/sales invoices on purchases of Senior Citizens (SCs) and Persons with Disabilities (PWDs) through online (E-Commerce) or mobile applications, in relation to RR No. 10-2015. The signature of the SC/PWD, as contemplated in RR No. 10-2015, shall not be required for qualified purchases made by SCs/PWDs online or through mobile applications. Nonetheless, the SC/PWD Identification Card number should still be provided by the SC/PWD when purchasing through online or mobile platforms; and the rules on entitlement to the benefits of the SC/PWD and to the tax deduction pursuant to RR No. 7-2010, as amended by RR No. 5-2017 shall be strictly followed.
It may be recalled that under JMC No. 01 Series of 2022, it highlights the mandatory benefits of SCs/PWDs even for online transactions provided as there is compliance with the substantiation requirement specifically on the signature of the concerned SCs/PWDs.
6. DOLE ISSUES A LABOR ADVISORY ON THE PAYMENT OF WAGES FOR THE SPECIAL (NON-WORKING) DAY ON AUGUST 21, 2023 & REGULAR HOLIDAY ON AUGUST 28, 2023
Department of Labor and Employment (DOLE) Labor Advisory No. 17, dated August 10, 2023, provides guidelines on payment of wages for Special (Non-Working) Holiday on August 21, 2023, and Regular Holiday on August 28, 2023, pursuant to Proclamation No. 42, Series of 2022, as amended by Proclamation No. 90, Series of 2022.
It may be recalled that Proclamation No. 90, Series of 2022 has declared regular holidays and special (non-working) days for the year 2023.
7. CTA CASES ON THE EXTENT OF TAX EXEMPTION OF ELECTRIC COOPERATIVES & CGT EXEMPTION ON SALE OF RESIDENTIAL PROPERTY
ELECTRIC COOPERATIVES REGISTERED WITH THE NEA HAS THE OPTION TO REGISTER WITH THE CDA & IN CASE IT OPTS NOT TO DO SO, SUCH ELECTRIC COOPERATIVE SHALL NOT BE ENTITLED TO THE BENEFITS & PRIVILEGES UNDER THE CDA LAW
Petitioner Zambales Electric Cooperative I, Inc. (ZAMECO I) filed a Petition for Review praying that the assessment notice which the Respondent Bureau of Internal Revenue (BIR) Revenue Region No. 4 issued be declared as null and void. The Petitioner argued that being a non-stock and non-profit (NSNP), it is not liable for deficiency income tax assessment pointing out that Presidential Decree (P.D.) No. 269, otherwise known as the “National Electrification Administration (NEA) Decree,” provides the exemption. Likewise, the Respondent failed to consider the provisions of Article 127 of the Republic Act (R.A.) No. 6938 (The Cooperative Code of the Philippines) and Article 143 of R.A. No. 9520 (Philippine Cooperative Code of 2008) which show that P.D. No. 269 has not been amended or repealed by the enactment of the Cooperative Code, and thus, the exemption from paying income taxes for electric cooperatives under Section 39 of P.D. No. 269 still applies. In ruling, the Court held that Section 18 of R.A. No. 9520 provides that an electric cooperative registered with the NEA has the option to register with the Cooperative Development Authority (CDA), and in case it opts not to do so, such electric cooperative shall not be entitled to the benefits and privileges under R.A. No. 9520. In contrast, should an electric cooperative opt to register with the CDA, it shall no longer be covered by P.D. No. 269, as amended. Thus, while a delineation was created between the coverage of P.D. No. 269, as amended, and R.A. No. 6938 and 9520, such a system is not indicative of the supposed continuation of the tax exemption privileges of electric cooperatives. Pertinently, electric cooperatives have been granted income tax exemption, provided they operate in conformity with the purposes and provisions of P.D. No. 269. On May 7, 2013, Congress enacted R.A. No. 10531 (“National Electrification Administration Reform Act of 2013″), which introduced amendments to P.D. No. 269, as amended. There is nothing in R.A. No. 10531 which states that the income tax exemption of electric cooperatives under P.D. No. 269, as amended, has been totally reverted or restored. Thus, at present, electric cooperatives registered with the NEA are subject to income tax with respect to income derived from electric service operations, as clarified in Revenue Memorandum Circular (RMC) No. 74-2013, which circularized a BIR ruling regarding the income tax exemption of electric cooperatives registered with the NEA. Based on the foregoing, the Court disagreed with the Petitioner’s claim that exemption from paying income taxes for electric cooperatives. Consequently, the Petition was DENIED for lack of merit. [ZAMBALES ELECTRIC COOPERATIVE I, INC. VS. BUREAU OF INTERNAL REVENUE, REVENUE REGION NO.4, CTA CASE NO. 10165, AUGUST 1, 2023]
TO AVAIL OF THE CGT EXEMPTION ON SALE OF PRINCIPAL RESIDENCE, THE SELLER SHOULD DULY NOTIFY THE BIR WITHIN 30 DAYS FROM THE DATE OF SALE OR DISPOSITION THROUGH A PRESCRIBED RETURN OF HIS INTENTION TO AVAIL OF THE SAID EXEMPTION
Petitioners Estrelita R. Rodriguez, et al., filed a Petition for Review seeking a refund of erroneously paid Capital Gains Tax (CGT) for the sale of residential property. Earlier, the Respondent Commissioner of Internal Revenue (CIR) denied their claim for a refund on the ground that they failed to file a Sworn Statement of Intent/Escrow Agreement pursuant to the existing rules. Petitioners argued that they complied with the essential basic conditions for exemption from payment of CGT for the sale of the principal residence. On the other hand, the Respondent contended that the Petitioners are not entitled for refund as well as the statutory exemption since they failed to notify the Respondent within thirty (30) days from the date of sale or disposition of their intention to avail of the tax exemption as required by the 1997 Tax Code, as amended. Even assuming arguendo that Petitioners are entitled to a refund, it is incumbent upon the Petitioners to show compliance with the procedure as mandated by law and regulations, and their failure to prove the same is fatal to their claim for refund. In ruling, the Petitioner failed to show that there was an erroneous or illegal CGT that was collected by the government. Here the Court finds that there is no indication that Petitioners fulfilled the third condition for the tax exemption granted under Section 24(D)(2) of the 1997 Tax Code, as amended. Accordingly, the Respondent should have been duly notified by the Petitioners within 30 days from the date of sale or disposition through a prescribed return of his or her intention to avail of the said tax exemption. Moreover, in filing the CGT return, it was noted that the Petitioners did not treat the transaction as an exempt sale and the property being sold is not the principal residence of Petitioners and that the latter do not intend to construct or acquire a new principal residence within 18 months from the date of disposition/sale consistent with the information that the said transaction is not an exempt sale. Thus, there being no required notification, the refund claim must already fail and its failure to execute and submit the required Escrow Agreement for the subject transaction warrants the denial of the present refund claim. Consequently, the Petition was DENIED for lack of merit. [ESTELITA R. RODRIGUEZ, MARIA CHRISTINA M. RODRIGUEZ, GERARDO M. RODRIGUEZ, JOSE MARIANO M. RODRIGUEZ & EDMOND M. RODRIGUEZ VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10151, JULY 20, 2023]
Fix ‘corrupt’ BIR, BOC systems instead of imposing new taxes —Escudero [GMA News Online, August 14, 2023]
The member of the Senate ways and means committee made the remark amid the administration’s push for tax measures under the Medium-Term Fiscal Framework (MTFF) which includes excise tax on single-use plastics and value-added tax (VAT) on digital services as well as the rationalization of the mining fiscal regime and the motor vehicle user’s charge or road user’s tax.
PAGCOR seeks P1B refund from ex-POGO auditor after contract termination [GMA News Online, August 14, 2023]
State-run Philippine Amusement and Gaming Corporation (PAGCOR) is seeking a P1 billion refund from Global ComRCI, the former third party auditor hired to audit Philippine Offshore Gaming Operators (POGO) under a P5.8-billion contract.
PAGCOR: Over P2B worth of unpaid dues of shuttered POGO licensee can’t be collected anymore [GMA News Online, August 14, 2023]
The Philippine Amusement and Gaming Corporation (PAGCOR) won’t be able to collect the over P2.2 billion receivables from Philippine Offshore Gaming Operations (POGO) firm that already closed shop, PAGCOR chief Alejandro Tengco said Monday.
Changes in CREATE IRR approved [The Philippine Star, August 12, 2023]
The amendment, specifically to Rule 18 Section 5 of the CREATE Act IRR, was made in response to the Office of the President’s directive to review and address the VAT-related issues concerning both domestic market enterprises (DMEs) and registered export enterprises (REEs).
DOF, DTI OK amendment to CREATE’s IRR amid VAT zero-rating issues [GMA News Online, August 11, 2023]
The DOF said the amendment was made in response to the Office of the President’s directive to review and address VAT-related issues concerning both domestic market enterprises (DMEs) and registered export enterprises (REEs), especially those seeking to avail of VAT zero-rating.
BancNet, PCHC merger pushed [The Philippine Star, August 11, 2023]
BancNet and PCHC are the clearing switch operators for InstaPay and PESONet.
US microchip maker sets $1-B expansion of 2 PH plants [Philippine Daily Inquirer, August 11, 2023]
American microprocessors manufacturer Texas Instruments Inc. (TI) is investing up to $1 billion for the expansion of its Clark and Baguio City facilities in the face of the global chip shortage, Malacañang said Thursday.
Retail group backs taxing online sellers, refund for tourists [Philippine News Agency, August 10, 2023]
The Philippine Retailers Association (PRA) has expressed its full support in taxing goods and services transacted online as well as giving value-added tax (VAT) refund to purchases of non-resident tourists in the country.
Villar unveils 6.2-km Villar Avenue [The Philippine Star, August 10, 2023]
The 10-lane avenue – which starts at the juncture of The Crossing Cafe and Dear Joe along Daang Hari Road – is expected to help decongest traffic and reduce travel time from Las Piñas to portions of Bacoor and Dasmariñas in Cavite province.
DOT accredits all 8 vessels of SM’s 2Go [Manila Bulletin, August 10, 2023]
2GO Group Inc., one of the country’s largest sea travel transportation solutions providers and a part of the Sy family’s SM Investments Corporation, has recently been accredited by the Department of Tourism (DOT) as a Tourism Water Transport Operator and Tourism Water Vessel.
Diokno rejects proposed luxury tax hike [ABS-CBN News, August 10, 2023]
Albay Rep. Joey Salceda earlier raised the possibility of raising tax on jewelry, perfumes, and yachts to 25 percent or 30 percent to increase government revenue.
House OKs new code to repeal decades-old, ‘obsolete’ building law [Rappler, August 10, 2023]
Under HB 8500, structures over 15 years old must undergo mandatory assessment of stability against hazards, unlike PD 1096 which does not cover structures built prior to its implementation.
BIR may exempt small farmers from receipt, invoice requirement [BusinessWorld, August 9, 2023]
The BIR on Wednesday released draft revenue regulations exempting the sale of agricultural products from the receipts and invoice requirement.
‘Time to move on’: Zubuchon to close Manila branches in August [Rappler, August 9, 2023]
Cebu-based lechon restaurant Zubuchon is saying goodbye to its Manila outposts and “huge commissary” starting August.
Villar’s PAVI acquires MCX from Ayala Corporation [GMA News Online, August 9, 2023]
Villar-led Prime Asset Ventures Inc. (PAVI) on Wednesday signed the implementing agreements to formalize its P3.8-billion acquisition of the four-kilometer Muntinlupa Cavite Expressway (MCX) from Ayala Corporation.
1M Filipino families to gain from tax amnesty extension [Inquirer.Net, August 9, 2023]
The Speaker further encouraged potential beneficiaries to capitalize on the proposed extension and appealed to the Bureau of Internal Revenue (BIR) to streamline the amnesty application process and permit online submissions, especially catering to overseas Filipino workers.
House panel OKs bill repealing 64-yr-old PH Medical Act [Philippine News Agency, August 8, 2023]
Committee chair Kristine Alexie Tutor said the repeal of Republic Act 2382 , otherwise known as Medical Act of 1959, is long overdue and will “advance the spearhead of healthcare in the Philippines into the 21st Century”.
Tax amnesty extension lapses into law without Marcos’ signature [GMA News Online, August 8, 2023]
According to Article Six, Section 27 of the 1987 Constitution, “The President shall communicate his veto of any bill to the House where it originated within thirty days after the date of receipt thereof; otherwise, it shall become a law as if he had signed it.”
US senator eyes sending American students to Philippine nursing schools [GMA News Online, August 8, 2023]
Malacañang said Duckworth mentioned that Filipinos in the US were recognized for being well-educated and fluent in English.
BIR slashes collection target from large companies [GMA News Online, August 8, 2023]
The Bureau of Internal Revenue (BIR) has reduced its collection target from large corporations this year amid expectations of lower excise tax collection.
Taxpayer numbers a growing concern [The Manila Times, August 7, 2023]
GROWING taxpayer numbers are becoming a challenge and the Bureau of Internal Revenue (BIR) is moving to address this by hiring more personnel.
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