BGS keep ranking as 43rd most expensive retail street worldwide
Other Relevant Tax Updates:
- TAX & BUSINESS-RELATED NEWS [NOVEMBER 27-DECEMBER 2]
- DEPARTMENT OF JUSTICE LEGAL OPINION
- BIR EXTENDS TAX FILING DEADLINES FOR AREAS AFFECTED BY TYPHOONS KRISTINE, LEON, MARCEL, NIKA, OFEL & PEPITO
- SEC LEGAL OPINIONS
- CTA CASES
I. TAX & BUSINESS-RELATED NEWS [NOVEMBER 27-DECEMBER 2]
- Northern Samar eyes coco industrial park
- Over 800 LGUs have integrated into e-LGU system
- Thai baht loses most among Asian currencies on Trump’s BRICS warning
- Phinma looking to launch socialized housing early 2025
- Bohol’s first maritime training center opens
- New initiative to advance salt industry in Ilocos
- 10 Eastern Visayas universities, colleges to get infrastructure upgrade
- PlasTIK eyed to solve the problem of plastic
- PLDT service unaffected by CBA talks
- Security Bank buying 25% of Home Credit for P11B
- Marcos thanks South Korea parliament for free trade deal OK
- Workers slam UP board’s decision to retain director
- PCC suspends fees on binding ruling requests
- Marcos: PH developing seed production centers in communities, universities
- Richard Gomez proposes Western Leyte province
- ADB teams up with Mastercard to mobilize MSME funding
- Sugar alternatives to be slapped with import clearance fees
- Megawide to build Boracay Airport passenger terminal building
- BGC keeps ranking as 43rd most expensive retail street worldwide
- In wake of Neri Naig case, SEC urges celebs to be sure of endorsements
- Zamboanga workers to receive pay hike
- Victory Liner unveils first electric provincial buses
- Insurers pay P2.54B Princess Empress claims
- Marcos designates Antipolo community mall as special ecozone
- Marcos signs laws to enhance fish, marine hatcheries in Mindanao
II. DEPARTMENT OF JUSTICE LEGAL OPINION
THE TAX CODE DOES NOT EXPLICITLY CONFIRM RBES’ EXEMPTION FROM LBT & CDC LOCATORS CANNOT CLAIM INCENTIVES ABSENT CLEAR & UNEQUIVOCAL LEGAL PROVISIONS
CDC is requesting an opinion on whether the locators are ineligible for incentives under Republic Act (R.A.) No. 11534 or Corporate Recovery and Tax Incentives for Enterprises Act (CREATE Act) should be liable for Local Business Taxes (LBT) to the Local Government Units (LGU) of Angeles, Mabalacat, Porac, Pampanga, and Capas and Bamban, Tarlac. CDC cites Section 291 of the Tax Code of 1997, as amended by the CREATE Act, which affirms that Investment Promotion Agencies (IPAs), including Clark Development Corporation (CDC), retain their powers under their governing laws, except for administering incentives. Supreme Court rulings further uphold CDC’s exclusive jurisdiction and police authority over Clark Special Economic Zone (CSEZ) and Clark Freeport Zone (CFZ) locators, regardless of incentive eligibility. CDC further states that the law established the CSEZ and CFZ as separate customs territories to attract foreign investment and spur development in Pampanga and Tarlac. As the administrator and operating arm of BCDA, CDC’s dual role as IPA and LGU should remain recognized and upheld. In reply, Section 291 of the Tax Code of 1997, as amended affirms that IPAs retain their powers under their governing laws. On the other hand, it has been modified by Section 292 which limits tax incentives to Registered Business Enterprises (RBEs) for approved projects under the Strategic Investment Priority Plan. The provisions are silent on whether RBEs remain exempt from LBT. As the Supreme Court ruled in BCDA and JHMC v. City of Baguio, tax exemptions must be explicitly stated in clear and unequivocal terms. [DEPARTMENT OF JUSTICE LEGAL OPINION NO. 49 SERIES OF 2024, NOVEMBER 20, 2024]
III. BIR EXTENDS TAX FILING DEADLINES FOR AREAS AFFECTED BY TYPHOONS KRISTINE, LEON, MARCEL, NIKA, OFEL & PEPITO
Revenue Memorandum Circular (RMC) No. 128-2024, issued on November 18, 2024, extends the deadline for filing tax returns, paying taxes, and submitting of required documents for taxpayers affected by typhoons “Kristine,” “Leon,” “Marce,” “Nika,” “Ofel,” and “Pepito.” This extension applies to Revenue District Offices (RDOs) under Revenue Region No. 3 (Tuguegarao City) and other affected RDOs, including areas in Quirino, Cagayan, Isabela, Nueva Vizcaya, Aurora, Camarines Norte, and Catanduanes. The extensions were granted due to government work suspensions caused by the inclement weather.
IV. SEC LEGAL OPINIONS
[ANTI DUMMY LAW APPLIES ONLY TO CORPORATIONS ENGAGED IN NATIONALIZED OR PARTLY NATIONALIZED ACTIVITIES] [MICRO-FINANCE IS NOT CONSIDERED A NATIONALIZED ACTIVITY] [FOREIGNERS MAY BE ELECTED TO THE BOARD IF THE CORPORATION IS NOT ENGAGED IN RESTRICTED ACTIVITIES]
A Micro-Finance Non-Governmental Organization (MFI) is seeking an opinion regarding three governance matters: (1) applicability of the Anti-Dummy Law to MFI (2) eligibility of foreign nationals to serve as trustees or officers; and (3) permissibility of transferring funds to an international affiliate for legitimate purposes. As represented, MFI, a non-stock, non-profit organization, aims to provide microfinance services to small entrepreneurs and alleviate poverty as per R.A. 8425 or the “Social Reform and Poverty Alleviation Act.” While locally incorporated and fully Filipino-owned, MFI is affiliated with an international organization. Its Articles of Incorporation (AOI) include provisions for acquiring and utilizing real and personal properties, although it does not own land. On the applicability of the Anti-Dummy Law, it argued that it is not engaged in nationalized or partly nationalized activities, as its primary purpose is microfinance, not land acquisition or other restricted activities. On the inclusion of foreigners in governance, it inquired if foreign nationals could serve as trustees or officers, considering its non-nationalized operations. Lastly, it sought clarification on whether it could transfer funds to its international affiliate under the Revised Corporation Code (RCCP). In reply, the Commission opined that the Anti Dummy Law applies only to corporations engaged in nationalized or partly nationalized activities. MFI’s primary purpose of microfinance is not considered a nationalized activity. While its AOI includes powers to acquire real property, they are incidental and not the corporation’s main business. Since MFI does not own land, the Anti Dummy Law does not apply. On the second inquiry, foreigners may be elected to the MFI’s Board of Trustees or appointed officers since the organization is not engaged in restricted activities. On investment issues, Section 41 of the RCCP allows corporate funds to be invested or transferred for legitimate purposes. Approval from the Board will suffice if the purpose aligns with the MFI’s primary objectives. If the purpose is outside the primary purpose, ratification by two-thirds (2/3) of members is required. [SEC OFFICE OF THE GENERAL COUNSEL OPINION NO. 24-33, NOVEMBER 5, 2024]
CORPORATE GOVERNANCE PRINCIPLES MANDATE COVERED COMPANIES TO ELECT INDEPENDENT DIRECTORS
Asia Pacific Medical Center-IloIlo, Inc. (APMC-II) is requesting an opinion on whether it can be exempted from holding a special stockholder’s meeting to fill the Board of Directors (BOD) vacancy and instead fill it by a majority vote of the BOD, given the extraneous circumstance of the COVID-19 pandemic. Additionally, it sought clarification if it could wait until its next Annual Stockholders’ Meeting in April to fill the vacancy for an independent director if the exemption was not possible. In reply, Section 22 of the Revised Corporation Code (RCC) states that corporations vested with the public interest and whose securities are registered with the Commission must have independent directors elected by the shareholders. Thus, the lacking one (1) independent director in the BOD must be elected by the shareholders in a meeting called for that purpose since APMC-II is a registered issuer of securities. As to the second (2nd) query, it is already settled that having an independent director is a fundamental principle of Corporate Governance, which has become a standard best practice in the corporate sector and has been taken into law. Therefore, Section 22 of the RCC and the Commission’s Corporate Governance Rules require covered companies to have a specific number of independent directors. Failure to comply may result in administrative sanctions. [SEC OFFICE OF THE GENERAL COUNSEL OPINION NO. 24-31, NOVEMBER 5, 2024]
CORPORATION IS LIMITED TO ACTIVITIES EXPLICITLY STATED IN ITS PRIMARY PURPOSE IN ITS ARTICLES OF INCORPORATION OR THOSE REASONABLY NECESSARY FOR ACHIEVING THAT PURPOSES
ALCL Philippines is seeking an opinion about its purpose clause in the Articles of Incorporation of ALPS, its proposed PEZA-registered subsidiary, specifically, whether ALPS could engage in specific activities such as subcontracting services to third parties (e.g., IFF, DFF agents, and trucking providers), acting as an importer or intermediary for goods, and sub-leasing warehousing spaces. These questions were raised to ensure that its activities would align with its primary and secondary purposes as stated in its Articles of Incorporation. In reply, a corporation is limited to activities explicitly stated in its primary purpose or those reasonably necessary for achieving that purpose. Any activity falling outside the scope of the purpose clause would require either an amendment to the Articles of Incorporation or additional regulatory approvals citing the Foreign Investments Act and the Philippine Economic Zone (PEZA) Law vis-à-vis nationality restrictions for foreign investments. Furthermore, the SEC highlighted the necessity of consulting other regulatory agencies, such as the National Economic and Development Authority (NEDA) and the Land Transportation Franchising and Regulatory Board (LTFRB), for activities involving logistics services that could fall under the definition of public utility. The guidance underscores the critical role of a clearly defined purpose clause in setting the boundaries for corporate activities. [SEC OFFICE OF THE GENERAL COUNSEL OPINION NO. 24-29, OCTOBER 9, 2024]
V. CTA CASE
IMPROPER NOTIFICATION & LACK OF OPPORTUNITY TO RESPOND CONSTITUTE A VIOLATION OF DUE PROCESS RENDERING THE TAX ASSESSMENTS VOID
Petitioner Commissioner of Internal Revenue (CIR) filed a Petition for Review challenging the Court of Tax Appeals (CTA) 3rd Division’s earlier Decision and Resolution which canceled the assessment issued against the Respondent Fidela D. Fernandez. The Respondent, a sole proprietor of Bacacay Shell Station, had been assessed by the Petitioner covering the Taxable Year 2006. The Petitioner issued a Formal Letter of Demand (FLD) and assessment notices addressed to “Rommel Braga,” who purportedly received the notices at the Respondent’s registered address. The Respondent denied that Braga was her authorized representative, arguing that the service of notices was invalid. Despite this, the Petitioner issued Warrants of Garnishment (WOG) and insisted that the assessments had become final and executory. The Respondent attempted to compromise the assessment by offering to settle at a lower amount, which the Petitioner rejected, citing that the amount was below the statutory minimum compromise threshold. In an earlier Decision, the CTA 3rd Division canceled the assessment because the notices were not properly served. It also ordered a refund of the compromise amount. In ruling, the Court cited the Supreme Court landmark case of Mannasoft, which emphasized the need for proper service directly to the taxpayer or a duly authorized representative. Improper notification and lack of opportunity to respond constitute a violation of due process rendering the tax assessments void. Consequently, the Petition was DENIED for lack of merit. [CIR VS. FIDELA D. FERNANDEZ, CTA EN BANC CASE NO. 2791, NOVEMEBR 6, 2024]
V. SEC OPINION
FOREIGNERS IN THE BOARD OF OFFSHORE COLLECTIVE INVESTMENT SCHEMES ARE NOT ALLOWED UNDER ANTI DUMMY LAW & FOREIGN INVESTMENT NEGATIVE LIST
J Co. is seeking an opinion on whether foreign nationals will be allowed to have representation in the Boards of Directors of such funds, considering that foreign stockholders will wholly or partially own such funds, and the units of participation in those funds will be exclusively offered offshore. In reply, citing Section 15 of the Investment Companies Act (ICA), no person shall serve as a director of a registered Investment Company unless he is a Filipino citizen. However, Section 15 of the ICA is superseded by Section 2-A of the Anti-Dummy Law, which classifies corporations with foreign equity restrictions of 40% or less as nationalized or partly nationalized. Although the Anti-Dummy Law does not establish foreign equity limits, it ensures adherence to them. In relation, J Co. claims the 12th Regular Foreign Investments Negative List (FINL) specifies activities subject to foreign ownership restrictions, either mandated by the Constitution or laws and based on considerations of security, health, and the protection of Small and Medium-Sized Entities (SMEs). Implied repeal occurs only when laws conflict irreconcilably, or the latter lawfully replaces the earlier one. The FINL, being an issuance and not a law, addresses foreign equity restrictions, distinct from Section 15 of the ICA. As they cover different subjects, there is no irreconcilable conflict or intent for substitution. Although, Section 2-A of the Anti-Dummy Law and Section 15 of the ICA can be harmonized. The Anti-Dummy Law restricts board composition in corporations subject to foreign equity limits without specific board rules, complementing such laws and the FINL. Meanwhile, Section 15 of the ICA applies to all investment companies, regardless of foreign equity restrictions, as it explicitly governs board composition. Accordingly, foreign nationals will not be allowed to have representation in the Board of Directors of funds constituted as investment companies notwithstanding the representation that foreign stockholders will wholly or partially own such funds, and the units of participation in those funds will be exclusively offered outside of the Philippine territory. [SEC OFFICE OF THE GENERAL COUNSEL LEGAL OPINION NO. 24-28, OCTOBER 9, 2024]
Northern Samar eyes coco industrial park [Philippine News Agency, December 2, 2024]
Berbon said that despite its substantial coconut production, the province faces limited competition with only one oil mill, one coco-sugar producer, two virgin coconut oil producers, and three coco coir producers.
https://newsinfo.inquirer.net/2011518/northern-samar-eyes-coco-industrial-park
Over 800 LGUs have integrated into e-LGU system [GMA News Online, December 2, 2024]
The said platform offers diverse services, including business permit licensing, barangay clearance, building permits, working permits, community tax certificates, occupational and health certificates, local civil registry needs, and other LGU online services.
Thai baht loses most among Asian currencies on Trump’s BRICS warning [interaksyon, December 2, 2024]
The main factor behind the Thai baht’s weakness is the drop in gold prices, coupled with the negative impact on Asian currencies from Trump’s warning to BRICS members, which has also affected the baht, according to Poon Panichpibool, a markets strategist at Krung Thai Bank.
Phinma looking to launch socialized housing early 2025 [GMA News Online, December 1, 2024]
Del Rosario said the company is looking at Davao as the pilot area for socialized housing development, which will initially be under a division in the company, but eventually be under a separate subsidiary.
Bohol’s first maritime training center opens [Inquirer Visayas, December 1, 2024]
The Southern Institute of Maritime Studies (SIMS)-Bohol, the first and only maritime training center in the province, was inaugurated on Sunday, Dec. 1, to increase the capabilities of maritime professionals in the country.
https://newsinfo.inquirer.net/2011370/bohols-first-maritime-training-center-opens
New initiative to advance salt industry in Ilocos [The Manila Times, December 1, 2024]
A PIVOTAL step toward advancing the salt industry in Ilocos Norte (Region 1) through the One in Accelerating Salt Innovations (OneASIN) initiative was achieved following the signing of a memorandum of understanding by stakeholders recently at Sola Hotel, Laoag City, Ilocos Norte.
10 Eastern Visayas universities, colleges to get infrastructure upgrade [Inquirer Visayas, December 1, 2024]
The DPWH in the region on Nov. 26 said the projects worth about P468.1 million aimed to modernize educational facilities for students through partnerships with SUCs.
PlasTIK eyed to solve the problem of plastic [Philippine Daily Inquirer, December 1, 2024]
In her speech, Silerio mentions that the SM group, through SM Prime Holdings, has partnered with Guun, a Yokohama-based Japanese company, to invest in waste-to-fuel technology. “Our joint venture, SM Guun, originating from Cebu, involves the sorting, shredding, and baling of disposable wastes into a by-product – ‘fluff fuel’, a sustainable alternative fuel source for cement plants.”
https://business.inquirer.net/493364/plastik-eyed-to-solve-the-problem-of-plastic
PLDT service unaffected by CBA talks [The Philippine Star, November 30, 2024]
PLDT said that the Manggagagawa sa Komunikasyon ng Pilipinas (MKP) has submitted the strike vote results to the National Conciliation and Mediation Board on Nov. 25.
https://www.philstar.com/business/2024/11/30/2403894/pldt-service-unaffected-cba-talks
Security Bank buying 25% of Home Credit for P11B [GMA News Online, November 30, 2024]
In a statement, Security Bank said it entered into an agreement with MUFG Bank Ltd. for the acquisition of 25% ownership in HC Consumer Finance Philippines Inc., popularly known as Home Credit.
Marcos thanks South Korea parliament for free trade deal OK [Philippine Daily Inquirer, November 30, 2024]
President Marcos on Friday thanked South Korea for reinforcing the Philippines’ call for a “brighter and more sustainable future” with its National Assembly’s ratification of the free trade agreement (FTA) between the two nations.
https://globalnation.inquirer.net/256998/marcos-thanks-south-korea-parliament-for-free-trade-deal-ok
Workers slam UP board’s decision to retain director [The Manila Times, November 30, 2024]
hilippine General Hospital (PGH) workers, students, and faculty of the University of the Philippines (UP)-Manila have condemned the decision of the Board of Regents (BOR) for its decision to keep Dr. Gerardo Legaspi as hospital director for the fourth term.
PCC suspends fees on binding ruling requests [Philippine News Agency, November 29, 2024]
In a statement Friday, the PCC said it has issued a memorandum suspending Section 3.4 of its 2017 Rules of Procedure, which previously required filing fees of 1 percent to 3 percent of an entity’s assets or annual revenue, whichever was higher, for Binding Ruling requests.
https://www.pna.gov.ph/articles/1238988
Marcos: PH developing seed production centers in communities, universities [GMA News Online, November 29, 2024]
At the ceremonial turnover of the Korea Partnership for Innovation of Agriculture (KOPIA) Greenhouses and Postharvest Facilities in Quezon, Marcos said the food production facility would improve the needs of the agricultural sector.
Richard Gomez proposes Western Leyte province [The Philippine Star, November 29, 2024]
In House Bill 11077, Gomez proposed that the cities and towns on the western part of Leyte Island, or the Cebuano-speaking localities, which is distinct from those on the eastern side that are generally Waray-speaking, be constituted into a separate province.
https://qa.philstar.com/nation/2024/11/29/2403719/richard-gomez-proposes-western-leyte-province
ADB teams up with Mastercard to mobilize MSME funding [Manila Standard, November 28, 2024]
At least 50 percent of ADB’s total financing will go toward women-led or owned MSMEs and climate finance among small businesses deployed over a period of four years. The initial target markets include India, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, and Georgia.
Sugar alternatives to be slapped with import clearance fees [The Philippine Star, November 28, 2024]
The Sugar Regulatory Administration (SRA) is inching closer to imposing import clearance fees on sweeteners like glucose and fructose as it seeks to monitor the entry of the raw sugar alternatives amid concerns over unabated imports to the detriment of local farmers.
Megawide to build Boracay Airport passenger terminal building [GMA News Online, November 28, 2024]
The company bagged the contract to build the new PTB of the airport — also known as the Godofredo Ramos Airport or the Caticlan Airport — from Trans Aire Development Holdings Corp., a subsidiary of SMC Infrastructure. Groundbreaking is eyed by December 2024 or before the year ends.
BGC keeps ranking as 43rd most expensive retail street worldwide [The Philippine Star, November 28, 2024]
BGC was noted to have had a three-percent increase in retail rent amounting to $51 (P2,990) per square foot per year.
https://philstarlife.com/news-and-views/186888-bgc-43rd-most-expensive-retail-street-worldwide
In wake of Neri Naig case, SEC urges celebs to be sure of endorsements [GMA News Online, November 28, 2024]
Flores said that there is no issue when celebrities are endorsing a product or service, but legal issues could arise if the endorser persuades the public to be an investor, franchisee, or partner in a business venture.
Zamboanga workers to receive pay hike [The Philippine Star, November 28, 2024]
The RTWPB approved an increase of P33 in the daily pay of workers in the private sector, which will take effect on Dec. 12.
https://www.philstar.com/nation/2024/11/28/2403452/zamboanga-workers-receive-pay-hike
Victory Liner unveils first electric provincial buses [ABS-CBN News, November 27, 2024]
During the launch, Victory Liner President and General Manager Marivic H. Del Pilar shared that she was spurred to go electric as a way to keep up with the rest of the world.
Insurers pay P2.54B Princess Empress claims [The Manila Times, November 27, 2024]
THE Shipowners’ P&I Club and the International Oil Pollution Compensation (IOPC) Funds have reported paying $43.2 million (P2.54 billion) to settle 26,101 claims from the Princess Empress oil spill as of Nov. 5, 2024.
Marcos designates Antipolo community mall as special ecozone [Philippine Daily Inquirer, November 27, 2024]
Proclamation No. 752, signed on Nov. 22, declared Xentromall Antipolo and the parcels of land that it stands on in Barangay Mambugan, Antipolo City, as an information technology (IT) center as recommended by the Philippine Economic Zone Authority (Peza).
https://newsinfo.inquirer.net/2009536/marcos-designates-antipolo-community-mall-as-special-ecozone
Marcos signs laws to enhance fish, marine hatcheries in Mindanao [Inquirer.Net, November 26, 2024]
Republic Act (RA) No. 12074, known as the Act Establishing a Freshwater Fish Hatchery in Talacogon, Agusan del Sur, and RA No. 12075, the Act Establishing a Multi-Species Marine Hatchery in Zamboanga City, were both signed on November 12 and published in the Official Gazette on Tuesday.
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