BIR issues IRRs of Ease of Paying Taxes Law
Other Relevant Tax Updates:
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TAX & BUSINESS-RELATED NEWS [APRIL 10-18]
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BIR ISSUES IRR ON AMENDMENTS INTRODUCED BY EASE OF PAYING TAXES LAW ON VAT & PERCENTAGE TAX
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INFOGRAPHICS OF EASE OF PAYING TAXES LAW & COUNTERPART IRRs
I. TAX & BUSINESS-RELATED NEWS [APRIL 10-18]
1. Moneybees, Tambunting join forces to bring crypto services
2. MOL signs deal for Japan’s first offshore wind transport ship
3. PSE to delist Abra Mining
4. CHEd chief faces another complaint before Ombudsman for non-remittance of scholarship benefits
5. SEC scraps minimum stockbroker commission fee
6. An accounting firm hired to vet Truth Social’s financials quit after less than a year because it no longer wanted to
be linked to Trump: FT
7. BIR extends deadline for online sellers to transition to new system
8. ‘GOCC suing Cavitex operator lacks authority’
9. This is the ‘Most Recommended Retail Bank in the Philippines,’ According to The Asian Banker
10. These are the countries with the lowest income tax rates
11. Another Bohol resort investigated for environmental violations
12. Over 20 local brands eye overseas expansion
13. Revilla wants Maynilad, contractors penalized over Pasay City sinkhole
14. Forex regulations further amended
15. NLRC dismisses complaint against TAPE Inc. filed by former ‘Eat Bulaga’ employees
16. GSIS says ex-Ombudsman Gutierrez not qualified as board member
17. UST opens campus in General Santos
18. DAR vows new land for Ati members in Boracay
19. Gusto maging ABS: 3 ABS-CBN shows rumored to be airing on GMA soon
20. FedEx, other firms wooed to put up logistics operations in Clark
21. Bulacan gov appeals SC decision on Angat Dam revenues
22. PUP Open University offers ‘study at home’ program for parents
23. DOTr in talks with Victory Liner for possible north terminal exchange PPP —Bautista
II. BIR ISSUES IRR ON AMENDMENTS INTRODUCED BY EASE OF PAYING TAXES LAW ON VAT & PERCENTAGE TAX
Revenue Regulations (RR) No. 3-2024 issued on April 11, 2024, implements the amendments introduced by Republic Act (R.A.) No. 11976, otherwise known as the Ease of Paying Taxes Law, on the relevant provisions of Title IV-Value-Added Tax (VAT) and Title V-Percentage Tax of the 1997 Tax Code, as amended.
Highlights include:
- All references to “gross selling price”, “gross value in money”, and “gross receipts” shall now be referred to as the “GROSS SALES”, regardless of whether the sale is for goods under Section 106, or services under Section 108 of the Tax Code.
- The term “Invoice” will also now be used instead of Sales/Commercial Invoices or Official.
- All references to “receipts or payments” which was previously the basis for the recognition of sales of service under Title IV (VAT) and Title V (Percentage Tax) of the Tax Code, shall now be referred to as “BILLING” or “BILLED”, whichever is applicable.
- All provisions mentioning the VAT-exempt threshold of Php 3 million shall now be read as “the amount or VAT threshold herein stated shall be adjusted to its present value every three (3) years using the Consumer Price Index (CPI), as published by the Philippine Statistics Authority (PSA)”
- Output VAT credit on uncollected receivables may be allowed on the next quarterly VAT compliance after the lapse of the agreed upon period to pay provided that the seller has fully paid the VAT on the transaction and the VAT component of the uncollected receivables has not been claimed as allowable deduction under Section 34(E) of the Tax Code.
Uncollected receivable refers to sales of goods and/or services on account that transpired upon the effectivity of RR No. 3-2024 (i.e., April 27, 2024) which remain uncollected by the buyer despite the lapse of the agreed period to pay.
To be entitled to output VAT credit, the following requisites must be present:
5.1 The sale or exchange has taken place after the effectivity of RR No. 3-2024 (i.e., April 27, 2024);
5.2 The sale is on credit or on account;
5.3 There is a written agreement on the period to pay the receivable;
5.4 The VAT is separately shown on the invoice;
5.5 The sale is specifically reported in the Summary List of Sales covering the period when the sale was made and not reported as part of “various” sales;
5.6 The seller declared in the tax return the corresponding output VAT indicated in the invoice within the period prescribed under existing rules;
5.7 The period agreed upon, whether extended or not, has elapsed; and
5.8 The VAT component of the uncollected receivable was not claimed as a deduction from gross income.
In case of recovery of uncollected receivables, the output VAT pertaining thereto shall be added to the output VAT during the period of recovery.
Conditions on the deductibility of bad debts expenses in the income tax returns as provided in RR No. 25-02 remain.
- A VAT-registered person whose registration has been canceled due to retirement from or cessation of business, or due to changes in or cessation of status, can apply for refund or Tax Credit Certificate of unused input tax within two (2) years from the date of cancellation. For business cessation, the cancellation date is the issuance of BIR Tax Clearance.
In case of full or partial denial of the claim for tax refund, the taxpayer may, within thirty (30) days from the receipt of the decision denying the claim, may appeal the decision with the Court of Tax Appeals (CTA).
In case of inaction on the part of the BIR to act on refund within the 90-day period, the taxpayer may:
6.1 appeal to the CTA within the 30-day period after the expiration of the 90-day period; or
6.2 forego the judicial remedy and await the final decision of the Commissioner on the application of VAT refund claim.
- The verification and processing of VAT refund claims shall now be risk-based approach and will be classifiedinto low, medium, and high-risk, depending on factors such as the amount of VAT refund claim, tax compliance history, and frequency of filing VAT refund claims. Medium and high-risk claims will undergo audit or verification following the BIR’s annual national audit program.
- Refunds shall be subject to post-audit by the Commission on Audit (COA) following the risk-based classification. If the COA disallows a refund, only the taxpayer is responsible for the disallowed amount, but any BIR employee found grossly negligent may face administrative consequences.
- RR No. 3-2024 shall apply to the sale of services that transpired upon its effectivity on April 27, 2024. For outstanding receivables on services rendered before April 27, 2024, the output VAT shall be declared in the quarterly VAT return upon collection. The collection shall be supported with an Invoice following the transitory provisions contained in the RR No. 7-2024 (IRR on invoicing) or the new BIR-approved set of Invoices, whichever is applicable.
The newly introduced output tax credit on uncollected receivables under Section 4.110-9 of these regulations applies only to transactions after April 27, 2024. No output tax credit is allowed for outstanding receivables from sales of goods on account made prior to April 27, 2024.
III. INFOGRAPHICS OF EASE OF PAYING TAXES LAW & COUNTERPART IRRs
On January 5, 2024, the Ease of Paying Taxes (EOPT) Act was signed into law. The EOPT Act introduced significant amendments to the 1997 Tax Code which are intended to protect and safeguard taxpayer rights and welfare, to modernize tax administration by providing mechanisms that encourage easy compliance, and to update the tax system and adopt best practices. It took effect last January 22, 2024, or 15 days after its publication in the Official Gazette or in a newspaper of general circulation.
Following the 90-day rule to come up with Implementing Rules and Regulations (IRRs), the BIR has already issued several IRRs. Highlights of these IRRs vis-a-vis EOPT are summarized in this infographic.
Moneybees, Tambunting join forces to bring crypto services [The Manila Times, April 18, 2024]
LEADING over-the-counter (OTC) cryptocurrency exchange Moneybees and pawnshop conglomerate Tambunting Kahera ng Bayan have announced a strategic partnership.
MOL signs deal for Japan’s first offshore wind transport ship [The Manila Times, April 17, 2024]
MITSUI O.S.K. Lines (MOL) announced a major investment in Japan’s offshore wind sector. Its subsidiary, MOL Drybulk, signed a contract with JFE Engineering for the marine transport of wind turbine components.
PSE to delist Abra Mining [Philippine Daily Inquirer, April 17, 2024]
Abra Mining and Industrial Corp. will be involuntarily delisted from the local bourse after the Securities and Exchange Commission (SEC) found that the company and some of its officials had illegally sold unlisted shares from 2015 to 2019.
https://business.inquirer.net/454919/pse-to-delist-abra-mining
CHEd chief faces another complaint before Ombudsman for non-remittance of scholarship benefits [The Manila Times, April 17, 2024]
Commission on Higher Education (CHEd) Chairman Prospero “Popoy” De Vera 3rd faces another complaint before the Office of the Ombudsman on the alleged unaccounted P10.3 billion higher educational development fund allocated for the free tuition and living allowance of government scholars as provided under Republic Act (RA) 10931 or the Universal Access to Quality Tertiary Education Act.
SEC scraps minimum stockbroker commission fee [GMA News Online, April 17, 2024]
Through Memorandum Circular 7, the SEC now allows brokers to set their own commission schedule for transactions with their customers without the regulatory minimum commission, which was previously prescribed to range from 0.25% to 0.05% of the trade transaction value.
An accounting firm hired to vet Truth Social’s financials quit after less than a year because it no longer wanted to be linked to Trump: FT [Business Insider, April 16, 2024]
WithumSmith+Brown was appointed to vet Trump Media & Technology Group’s financials soon after it was founded in early 2021. But the firm resigned before the end of 2021, the FT reported citing people familiar with the matter.
BIR extends deadline for online sellers to transition to new system [GMA News Online, April 16, 2024]
According to the agency, Revenue Memorandum Circular No. 55-2024 extended the transitory period for compliance with Revenue Regulations (RR) No. 16-2023 until July 14 after considering the private sector’s request on the implementation.
‘GOCC suing Cavitex operator lacks authority’ [The Philippine Star, April 16, 2024]
The MPTC is challenging the legality of the case filed by PEA Tollway Corp. (PEATC) against Cavitex Infrastructure Corp. (CIC), operator of the Manila-Cavite Expressway (CAVITEX).
https://www.philstar.com/business/2024/04/16/2347917/gocc-suing-cavitex-operator-lacks-authority
This is the ‘Most Recommended Retail Bank in the Philippines,’ According to The Asian Banker [Esquire, April 16, 2024]
The Asian Banker is a leading platform that recognizes top performing financial services institutions. Established in 1996, the Singapore-headquartered company provides strategic intelligence and community platforms to different players—from traditional banks to digital disruptors, as well as fintechs. It also runs prestigious awards programs that cover different areas in financial services every year.
These are the countries with the lowest income tax rates [Stars Insider, April 15, 2024]
To rank the countries with the lowest income tax rates in the world, Yahoo! Finance considered three metrics: personal income tax rate, corporate income tax rate, and GDP per capita (PPP).
Another Bohol resort investigated for environmental violations [Philippine Daily Inquirer, April 15, 2024]
The Provincial Board (PB) is now looking into a tourism establishment built within a protected area in Alburquerque town, which is part of the Alburquerque-Loay-Loboc Protected Landscape and Seascape (ALLPLS) under the National Integrated Protected Area System (Nipas) Act of 1992.
https://newsinfo.inquirer.net/1929753/another-bohol-resort-investigated-for-environmental-violations
Over 20 local brands eye overseas expansion [The Philippine Star, April 15, 2024]
Over 20 Filipino brands intend to expand and bring their products and services overseas, according to the Philippine Franchise Association (PFA).
https://www.philstar.com/business/2024/04/15/2347663/over-20-local-brands-eye-overseas-expansion
Revilla wants Maynilad, contractors penalized over Pasay City sinkhole [Inquirer.Net, April 15, 2024]
The senator cited the Department of Public Works and Highways’s report that the sinkhole was allegedly caused by a leak from the water pipeline of Maynilad Water Services, Inc.
Forex regulations further amended [The Manila Times, April 15, 2024]
Authorized agent banks have been given until September 30 to prepare and make the necessary adjustments to their systems and procedures.
NLRC dismisses complaint against TAPE Inc. filed by former ‘Eat Bulaga’ employees [Manila Bulletin, April 14, 2024]
The National Labor Relations Commission (NLRC) junked a case for illegal dismissal, and non-payment of benefits including overtime filed by nine resigned “Eat Bulaga” employees against show producer Television and Production Exponents Inc. (TAPE) and its CEO and president, Romeo Jalosjos.
GSIS says ex-Ombudsman Gutierrez not qualified as board member [Inquirer.Net, April 14, 2024]
Citing a letter addressed to Executive Secretary Lucas Bersamin dated April 11 this year, GSIS President and General Manager Jose Arnulfo Veloso said they made the “legal conclusion” about Gutierrez, after discovering findings related to “a whistleblowing complaint” against her.
https://newsinfo.inquirer.net/1929732/gsis-says-ex-ombudsman-gutierrez-not-qualified-as-board-member
UST opens campus in General Santos [The Philippine Star, April 13, 2024]
The 82-hectare UST General Santos City in Soccsksargen region was inaugurated by Bishop Cerilo Alan Casicas of Marbel and Dominican Prior Provincial Fr. Filemon dela Cruz Jr.
https://philstarlife.com/news-and-views/767043-ust-opens-campus-in-general-santos
DAR vows new land for Ati members in Boracay [The Manila Times, April 12, 2024]
THE Department of Agrarian Reform (DAR) vowed to provide government-owned land to members of the Ati community in Boracay despite finding out that there is no basis for the indigenous group to receive Certificates of Land Ownership Award (CLOAs).
https://www.manilatimes.net/2024/04/12/regions/dar-vows-new-land-for-ati-members-in-boracay/1940872
Gusto maging ABS: 3 ABS-CBN shows rumored to be airing on GMA soon [Bilyonaryo, April 11, 2024]
The airing of “It’s Showtime!” on bilyonaryo Felipe Gozon’s GMA Network might just be the start of a greater content synergy with the Lopezes’ ABS-CBN.
FedEx, other firms wooed to put up logistics operations in Clark [Philippine Daily Inquirer, April 11, 2024]
The Pampanga airport is set to launch 13 new domestic and international routes this year. These are: Taipei, Bangkok, Hong Kong, Narita, Macau, Cheongju, Coron, Bacolod, Iloilo, Davao, General Santos, Cagayan de Oro and Puerto Princesa.
https://business.inquirer.net/454084/fedex-other-firms-wooed-to-put-up-logistics-operations-in-clark
Bulacan gov appeals SC decision on Angat Dam revenues [ABS-CBN News, April 11, 2024]
Bulacan Governor Daniel Fernando filed a motion for reconsideration Thursday on the decision of the Supreme Court that the provincial government is not entitled to a share in revenues coming from the Angat Dam.
PUP Open University offers ‘study at home’ program for parents [GMA News Online, April 10, 2024]
The Polytechnic University of the Philippines Open University System ( PUP OUS) is offering parents the opportunity to pursue tertiary education by studying at home.
DOTr in talks with Victory Liner for possible north terminal exchange PPP —Bautista [GMA News Online, April 10, 2024]
(In the north, we are looking for a possible location. The possible location would be in Victory Liner’s seven-hectare property… we had the initial discussion with the owners of Victory Liner.)
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