PEZA ISSUES GUIDELINES ON THE EXTENDED PERIOD OF IT-BPM RBEs TO TRANSFER REGISTRATION TO BOI UNTIL THE JANUARY 31, 2023
Other Relevant Tax Updates:
- TAX & BUSINESS-RELATED NEWS [JANUARY 5-9]
- PEZA ISSUES GUIDELINES ON THE EXTENDED PERIOD OF IT-BPM RBEs TO TRANSFER REGISTRATION TO BOI UNTIL THE JANUARY 31, 2023
- BIR RULINGS
1. TAX & BUSINESS-RELATED NEWS [JANUARY 5-9]
- Mega Bonuses of 50 Months’ Salary Handed Out by Shipping Firm
- 7,000 nurses at two New York City hospitals on strike as contract negotiations fail
- Grab PH grappling with driver shortage
- S. subpoenas hedge fund dealings with Binance: report
- Tax cuts likely to unleash spending power of middle-class Filipinos
- Calax still unfinished as right of way dispute hangs
- BSP continues pilot testing of digital currencies
- AIA acquisition of MediCard gets PCC’s nod
- BSP eyes participation in UN-backed investment scheme
- SEC voids Alliance Select owner’s share purchase
- No alerts received: BDO clients lose money due to unauthorized transactions
- Aboitiz Group wins corporate governance awards
- SEC warns investors against BCR, Cstmine
- BSP to issue arbitration rules this month
- ING names veteran banker new country head
- Gokongweis end up with higher stake in BPI
- Local gov’ts urged to use share in wealth tax to lower power rates
- BSP eases loan limit for single borrowers
- Generic brands seen lowering prices of other prescription drugs, says study
- Marcos names new SSS president
- Union Bank offering shares at a discount
- Amazon to shed over 18,000 jobs as it cuts costs, CEO says
Mega Bonuses of 50 Months’ Salary Handed Out by Shipping Firm [Bloomberg, January 9, 2023]
Year-end bonuses have always been based on the company’s performance for the year and the individual performance of employees, Evergreen Marine said in a statement Friday, declining to elaborate.
7,000 nurses at two New York City hospitals on strike as contract negotiations fail [CNN, January 9, 2023]
More than 7,000 nurses at two major New York City hospitals walked off the job Monday, arguing immense staffing shortages are causing widespread burnout and hindering their ability to properly care for their patients.
https://edition.cnn.com/2023/01/09/business/nyc-nurses-strike/index.html
Grab PH grappling with driver shortage [Manila Bulletin, January 9, 2023]
To cope with the shortage, the ride-hailing platform maximized existing cars on the road via features such as GrabShare and Multi-Stop ride.
https://mb.com.ph/2023/01/09/grab-ph-grappling-with-driver-shortage/
U.S. subpoenas hedge fund dealings with Binance: report [Morningstar, January 9, 2023]
U.S. hedge funds are being subpoenaed to hand over information of its dealings with cryptocurrency platform Binance as part of a federal investigation into potential money-laundering breaches at the crypto company, the Washington Post reported over the weekend.
Tax cuts likely to unleash spending power of middle-class Filipinos [BusinessWorld, January 9, 2023]
“The tax reduction will be diverted to consumption given higher disposable income,” John Paolo R. Rivera, an economist at the Asian Institute of Management, said in a Viber message.
Calax still unfinished as right of way dispute hangs [Inquirer Mobile, January 9, 2023]
Alex Bote, Public-Private Partnership (PPP) service director at the Department of Public Works and Highways (DPWH), said in a recent statement that the 450 meters of land owned by private company Uneco Land Corp.—on which a critical portion of the Silang (Aguinaldo) Interchange of the P35.7-billion toll road needs to be built—was estimated to cost around P16 million.
BSP continues pilot testing of digital currencies [The Philippine Star, January 9, 2023]
The Bangko Sentral ng Pilipinas (BSP) continues to ramp up efforts to transform the country into a cash-light from a cash-heavy economy to meet the deadline it set to shift half of total retail transactions to digital channels.
https://www.philstar.com/business/2023/01/09/2236208/bsp-continues-pilot-testing-digital-currencies
AIA acquisition of MediCard gets PCC’s nod [Philippine Daily Inquirer, January 9, 2023]
The Philippine Competition Commission (PCC) approved the proposed acquisition by AIA Philippines Life and General Insurance Company Inc. (AIA Philippines) of MediCard Philippines Inc. (MediCard), hurdling a crucial government regulatory requirement needed to close the transaction.
https://business.inquirer.net/381377/aia-acquisition-of-medicard-gets-pccs-nod
BSP eyes participation in UN-backed investment scheme [The Philippine Star, January 9, 2023]
BSP Governor Felipe Medalla said the central bank wants to be a signatory to the UN-backed Principles for Responsible Investment (PRI) as part of its Sustainable Central Banking strategy.
SEC voids Alliance Select owner’s share purchase [Inquirer Mobile, January 9, 2023]
A boardroom row in one of the country’s largest canned seafood exporters is heating up after the Securities and Exchange Commission (SEC) voided the shares acquired by the controlling stockholder of Alliance Select Foods International nearly a decade ago.
No alerts received: BDO clients lose money due to unauthorized transactions [Bilyonaryo, January 8, 2023]
Abogado Ross Tugade took to Twitter to complain about the P140,000 she lost due to transactions made in China, Australia, and Turkey even when she had not gone there nor did she have a debit card to even swipe or get cloned.
Aboitiz Group wins corporate governance awards [Manila Bulletin, January 8, 2023]
Corporate Governance Asia highlighted Aboitiz Group President and Chief Executive Officer (CEO) Sabin Aboitiz as Asia’s Best CEO – Investor Relations and Chief Financial Officer (CFO) Manuel Lozano as Asia’s Best CFO – Investor Relations.
https://mb.com.ph/2023/01/08/aboitiz-group-wins-corporate-governance-awards/
SEC warns investors against BCR, Cstmine [Manilstandard.net, January 8, 2023]
The Securities and Exchange Commission flagged two firms―BCR Rising Trade Inc/BIT Cryptorising Marketing Consultancy and Cstmine.com for allegedly engaging in illegal investment schemes.
https://manilastandard.net/business/corporate/314294461/sec-warns-investors-against-bcr-cstmine.html
BSP to issue arbitration rules this month [Manila Bulletin, January 8, 2023]
Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla said they will release the crucial rules of procedure for mediation and adjudication this month as part of its implementation of Republic Act No. 11765 or the Financial Products and Services Consumer Protection Act (FCPA).
https://mb.com.ph/2023/01/08/bsp-to-issue-arbitration-rules-this-month/
ING names veteran banker new country head [Inquirer Mobile, January 7, 2023]
Dutch financial institution ING has named veteran banker Jun Palanca as country head of the Philippines, succeeding Hans Sicat who retired on Dec. 31.
Gokongweis end up with higher stake in BPI [The Philippine Star, January 7, 2023]
The Gokongwei Group is ending up with a higher 10.4-percent stake in Ayala-led Bank of the Philippine Islands (BPI) amid the ongoing merger of the banking arms of the two largest conglomerates in the country.
https://www.philstar.com/business/2023/01/07/2235786/gokongweis-end-higher-stake-bpi
Local gov’ts urged to use share in wealth tax to lower power rates [Inquirer Mobile, January 7, 2023]
As per the Local Government Code, local governments are entitled to an equitable share in the proceeds from the utilization and development of the national wealth within their respective areas.
BSP eases loan limit for single borrowers [The Philippine Star, January 7, 2023]
Medalla said the new policy aligns the BSP regulations with internationally recognized standards on credit risk transfer and globally accepted rules on trade and finance transactions.
https://www.philstar.com/business/2023/01/07/2235791/bsp-eases-loan-limit-single-borrowers
Generic brands seen lowering prices of other prescription drugs, says study [Inquirer Mobile, January 7, 2023]
This is according to a policy paper issued on Friday by the Philippine Competition Commission (PCC), which focused on a local market study that looked at the effect of the entry of generic drugs on the local prices of drugs.
Marcos names new SSS president [Philippine Daily Inquirer, January 6, 2023]
President Marcos has appointed former Government Service Insurance System (GSIS) President and General Manager Rolando Ledesma Macasaet as acting president and chief executive officer of the Social Security System (SSS).
https://newsinfo.inquirer.net/1713161/marcos-names-new-sss-president
Union Bank offering shares at a discount [Manila Bulletin, January 6, 2023]
In a disclosure to the Philippine Stock Exchange, the bank said the offer price was determined based on the volume-weighted average price of the Union Bank’s common shares on the PSE for each of the 15 consecutive trading days immediately prior to (and excluding) January 4, 2023 and applying a discount of 30 percent.
https://mb.com.ph/2023/01/06/union-bank-offering-shares-at-a-discount/
Amazon to shed over 18,000 jobs as it cuts costs, CEO says [BBC News, January 5, 2023]
The cuts amount to around 6% of the firm’s roughly 300,000-strong corporate workforce.
https://www.bbc.com/news/business-64171008
2. PEZA ISSUES GUIDELINES ON THE EXTENDED PERIOD OF IT-BPM RBEs TO TRANSFER REGISTRATION TO BOI UNTIL THE JANUARY 31, 2023
3. BIR RULINGS
LOCAL PURCHASES OF GOODS & SERVICES BY RE DEVELOPERS NEEDED FOR RE PROJECTS ARE SUBJECT TO ZERO PERCENT VAT
S Co., a Renewable Energy (RE) Developer is requesting confirmation that being an RE Developer for Solar PV, Battery, Diesel, and Micro Grid (QTP), is entitled to zero percent (0%) Value-Added Tax (VAT) on its local purchase of a local supply of goods, properties, and services needed for the development, construction, and installation of its plant facilities. In reply, Section 15 (g) of the Republic Act (RA) No. 9513, otherwise known as the “Renewable Energy Act of 2008,” provides that all RE Developers shall be entitled to zero-rated VAT on their purchases of local supply of goods, properties, and services needed for the development, construction, and installation of its plant facilities, as well as the whole process of exploring and developing renewable energy sources up to its conversion into power, including but not limited to the services performed by subcontractors and/or contractors. Since S. Co is a Department of Energy (DOE)-certified RE Developer, its suppliers/sellers of goods and services should not pass on the 12% VAT on S Co.’s local purchases needed for its development, construction, and installation of power plant facilities. Likewise, the grant of VAT zero-rating shall be subject to the BIR’s post-audit whether the purchased goods and services were indeed utilized in the development, construction, and installation of its power plant facilities. [BIR RULING NO. 438-2022, DECEMBER 1, 2022]
NON-EXPORT ENTERPRISES ARE NOT ENTITLED TO VAT ZERO-RATING ON LOCAL PURCHASES
Philippine Economic Zone Authority (PEZA) is requesting reconsideration on the disapproval of the application for Value-Added Tax (VAT) zero-rating on the local purchases of non-export enterprises registered with PEZA. In reply, Rule 18 of the Implementing Rules and Regulations (IRR) of CREATE Law and Section 311 of the 1997 Tax Code, as amended, provides that registered businesses or enterprises other than export enterprises may continue to avail the incentives granted to them before the effectivity of the CREATE Law. However, these incentives exclude the VAT zero rating on local purchases of non-export enterprises. Furthermore, pursuant to Section 5, Rule 18 of the IRR of CREATE Law, the VAT zero-rating on local purchases incentive shall only apply to goods and services directly and exclusively used in the registered project or activity of the export enterprises during the period of registration of the said registered project or activity with the concerned investment promotion agencies. Consequently, the request for VAT zero-rating on the local purchases of non-export enterprises is DENIED. [BIR RULING NO. 436-2022, DECEMBER 1, 2022]
VENDING MACHINE SALES TO PEZA-REGISTERED ENTITY ARE NOT SUBJECT TO 0% VAT & ARE NOT REQUIRED TO SECURE POS
P Co., a domestic corporation engaged in the business of providing vending machine solutions to customers such as coffee, beverages, and snacks is requesting clarification on whether its sales to J Co., a Philippine Economic Zone Authority (PEZA) registered entity, are subject to zero-rated Value-Added Tax (VAT) and whether it is required to secure a Point-of-Sale (POS) permit with the BIR. In reply, Section 5, Rule 18 of the amended IRR of the CREATE Law expressly states that the VAT zero-rating on local purchases incentive shall only apply to goods and services directly attributable to and exclusively used in the registered project or activity of the export enterprises as further clarified in Revenue Memorandum Circular (RMC) No. 24-2022. Considering J Co.’s registered activity, it is evident that even without P Co.’s vending products and services, its registered activity can continue and be carried out. Thus, P Co’s sales to J Co. are subject to 12% VAT. On the issue of the POS permit, it was represented that the customer’s payment will be accepted by P Co’s registered vending computer and eventually issues official receipts upon its regular visit for the refilling of machines. In this regard, the Bureau opined that it is substantially compliant with Section 113 (A) of the 1997 Tax Code, which requires all VAT-registered entities, regardless of the value, shall issue a VAT invoice or official receipt for every sale/lease of its goods and/or services. On whether there is a need to obtain a POS permit, Revenue Regulations (RR) No. 10-1999 provides that the BIR will only issue permits to use cash registers and POS machines in lieu of sales invoices or receipts to the proprietors, owners, or operators of the businesses listed therein. Therefore, since P. Co’s line of business is not included therein, it is not required to secure a POS permit in providing its services to J Co. [BIR RULING NO. 424-2022, NOVEMBER 11, 2022]
DONATION TO THE NATIONAL GOVERNMENT WHICH ARE NOT CONDUCTED FOR PROFIT IS EXEMPT FROM DONOR’S TAX
The United Nations Office on Drugs and Crime (UNODC) is requesting an exemption from customs duties and taxes on the donation of a Fixed Passive Radar Sensor System to the Philippine National Coast Watch Center (NCWC). As represented, NCWC is an agency of the National Government created by virtue of Executive Order (EO) No. 57, Series of 2011. In reply, Section 101 (B) (1) of the 1997 Tax Code 1997, as amended, provides that donations made in favor of the National Government or any of its agencies which are not conducted for profit are exempt from the payment of the donor’s tax. Thus, the donation made is exempt from the donor’s tax. [BIR RULING NO. 423-2022, NOVEMBER 4, 2022]
VAT EXEMPTION OF A RENEWABLE ENERGY DEVELOPER OF BIOMASS RESOURCES ON ITS LOCAL PURCHASES OF MATERIALS TO BE USED TO MANUFACTURE BIODIESEL CHEMICALS
A Co. is requesting a confirmatory ruling on whether its purchases of materials and all kinds of similar and derivative products to be used in the production and manufacture of biodiesel chemicals are exempt from Value-Added Tax (VAT). As represented, A Co. is duly registered with the Board of Investments (BOI) and the Department of Energy (DOE) as a Renewable Energy (RE) Developer of Biomass Energy Resources. In 2019, the BIR issued a ruling on the Company’s entitlement to zero-rated VAT on its local purchases needed for the development, construction, and installation of its plant facilities. During its operations, A Co. has purchases of raw materials from the Philippine Economic Zone Authority (PEZA) Registered Business Enterprises (RBE). In 2022, the BIR likewise confirmed that since the sale transaction is subject to 0% VAT, the VAT paid on the technical importation of raw materials can be refunded pursuant to Section 112 (A) of the 1997 Tax Code, as amended, hence, this request for a ruling to ensure that subsequent purchases will not be passed on with 12% VAT and that the refund mechanism will be put at bay. In reply, the Bureau confirmed its position that A Co.’s local purchases needed for its RE projects shall be subject to 0% VAT, citing Section 15 (g) of Republic Act (RA) No. 9513, otherwise known as the “Renewable Energy Act of 2008,” which provides that all RE Developers shall be entitled to zero-rated VAT on their purchases of local supply of goods, properties, and services needed for the development, construction, and installation of their plant facilities. [BIR RULING NO. 421-2022, OCTOBER 27, 2022]
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