SEC: About 300,000 firms at risk of being under delinquency status
Other Relevant Tax Updates:
- TAX & BUSINESS-RELATED NEWS [OCTOBER 18-25]
- DOF REVERSES THE BIR ON THE EARLIER DENIAL OF CERTIFICATE OF TAX EXEMPTION OF CHARITABLE INSTITUTION & IMPOSITION OF EXCISE TAX ON ROLEX
- COURT OF TAX APPEALS CASES
- TAX & BUSINESS-RELATED NEWS [OCTOBER 18-25]
- Duterte to Pinoys: Don’t pay taxes unless…
- Filinvest Land opens Tarlac industrial hub
- SSS raises maximum funeral benefit to P60,000
- PPA sees Marawi Port completion in February
- No plans to declare Oct. 31 as holiday—Palace
- Mama Lou’s ‘actively working’ to improve service amid viral ‘Endless Pasta’ campaign
- SMC’s Ang takes a seat in Metro Pacific board
- US BPO firm expands office in Quezon City
- New PUP campus breaks ground in North Caloocan
- Ilocos, Western Visayas regional wage boards raise minimum pay
- Marcos abolishes Northrail 4 years after deactivation
- Osmeña: P18-billion Kawit Island deal ‘beneficial’ to the city
- Condominium residents call out Ayala Center Cebu for noise pollution
- SEC: About 300,000 firms at risk of being under delinquency status
- BSP-licensed beauty parlor platform gets $400,000 in funding
- PSE to launch short selling program in November
- In the Plans: An Expressway That Will Link TPLEX and Alaminos
- Jollibee, Greenwich, Burger King to hire PWDs, senior citizens in Muntinlupa
- GMA Network to present witness at TVJ’s ‘Eat Bulaga’ copyright infringement trial
- DOF REVERSES THE BIR ON THE EARLIER DENIAL OF CERTIFICATE OF TAX EXEMPTION OF CHARITABLE INSTITUTION & IMPOSITION OF EXCISE TAX ON ROLEX
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TO AVAIL OF INCOME TAX EXEMPTION, A CORPORATION MUST BE NON-STOCK, NON-PROFIT CHARITABLE INSTITUTION ORGANIZED & OPERATED EXCLUSIVELY FOR CHARITABLE PURPOSES R Charity (“R” Charity) is requesting a review of the earlier denied ruling of the Bureau of Internal Revenue (BIR) treating it as an ordinary corporation subject to Regular Corporate Income Tax (RCIT). R Charity’s submitted Amended Articles of Incorporation show that it is organized as a non-stock, non-profit association duly organized and existing under the laws of the Republic of the Philippines. Also, R Charity requesting from the BIR a confirmatory ruling of its tax-exempt status under Section 30(E) of the National Internal Revenue Code (NIRC), as amended. Earlier, the BIR denied R Charity’s claim for exemption premised on the findings that R Charity has distributed parts of its equity (including the net income) specifically on the following (a) by consistently using parts of its income in funding profit-making activities, like tournaments and concerts; and (b) by donating to other institutions engaged in activities not similar to the foundation’s purpose, organizing and financing tournaments, concerts, and activities of other private entities. On appeal, R Charity argued that its funds are used only for the furtherance of its charitable purposes, with its expenses consisting mainly of grants and donations to schools and communities, and that none of its funds is given to any private individual or entity for private purposes. In reply, there is no denying that R Charity is a non-stock, non-profit charitable institution organized and operated exclusively for charitable purposes. Its organizational documents reveal that R Charity is duly incorporated as a non-stock corporation primarily established for charitable, educational, and scientific purposes, making contributions and grants to entities organized and operated exclusively for charitable, scientific, or educational purposes. Nevertheless, even if R Charity may qualify as a non-stock, non-profit corporation, Section 30 imposes taxes on the income from any property of exempt organizations, as well as that arising from any activity it conducts for profit. [DOF OPINION NO. 001.2023, JANUARY 10, 2023] |
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THE PRICE OR VALUE OF THE ITEMS DOES NOT DICTATE WHETHER CERTAIN GOODS ARE NON-ESSENTIAL OR SEMI-ESSENTIAL, IT IS THE FUNCTION OF THE OBJECT THAT PRINCIPALLY DETERMINES IT AAA Co. is requesting a review of the BIR’s ruling which ruled that the Rolex wristwatches are subject to excise tax. AAA Co. argued that the phrase “goods made of, ornamented, mounted or fitted with, precious metals or imitations thereof or ivory…” should not be considered as a separate taxable item apart from the matter that precedes it. Therefore, the said phrase is a mere extension of a phrase “All goods commonly or commercially known as jewelry, whether real or imitation, pearls, precious and semi-precious stones and imitations thereof.” Further, on the ground that there is doubt as to whether the provisions of Section 150 (a) of the 1997 Tax Code, as amended, apply to the same, the excise duty of 20 % may not be imposed on the wristwatches they import. In reply, the Department of Finance (DOF) disagreed with the Commissioner’s ruling, stating that subparagraph (a) had in fact covered non-essential goods such as jewelry, automobiles, toilet preparations, and others. On the other hand, until the imposition of a percentage duty on watches and clocks was abolished by Presidential Decree (P.D.) No. 1994 in 1985, watches and clocks were classified and taxed separately from other non-essential articles or goods in earlier legislation. Furthermore, in Executive Order (EO) No. 36, the inclusion of wristwatches and clocks in the expanded coverage of non-essential goods subject to Percentage Tax was not stated. This is the same when Section 150 of EO No. 273 was carried forward as Section 150 of the 1997 Tax Code, as amended, for 20% excise tax imposition, whereas the inclusion of wristwatches and clocks was not enumerated. The DOF believes that it is the function of the object that principally determines whether it is non-essential or semi-essential and the price or value of the items do not necessarily dictate whether certain goods are non-essential or semi-essential. In this regard, the DOF reversed the BIR in subjecting wristwatches made of precious metals to a 20% excise tax. [DEPARTMENT OF FINANCE OPINION NO. 012.2022.A, AUGUST 7, 2023] |
- CTA CASES
[UNLESS THE OFFEROR KNOWS OF THE ACCEPTANCE, THERE IS NO MEETING OF MINDS OF THE PARTIES & NO REAL CONCURRENCE OF OFFER & ACCEPTANCE] [A PREVIOUSLY ISSUED LN MUST BE CONVERTED TO AN LOA BEFORE THE REVENUE OFFICER MAY FURTHER PROCEED WITH THE AUDIT & EXAMINATION OF THE TAXPAYER]
Petitioner ED & F Man Philippines, Inc. filed a Petition for Review seeking a refund of the alleged erroneously paid compromise amount. The Petitioner maintained that its compromise payment was illegally collected by the Bureau of Internal Revenue (BIR) because (1) the Value-Added Tax (VAT) assessment for Taxable Year (TY) 2008 is barred by the Statute of Limitations; (2) the BIR’s issuance of a termination letter in its favor, demonstrates its full settlement of such VAT liability for such period; (3) the VAT assessment lacks legal and factual basis; and (4) the Final Assessment Notice (FAN) was issued, sans a valid Letter of Authority (LOA). On the other hand, the Respondent Commissioner of Internal Revenue (CIR) countered that the Petitioner offered, and the BIR accepted, the compromise settlement for the VAT assessment, as evidenced by the Certificate of Availment (COA) and Authority to Cancel Assessment (ATCA). In ruling, for a contract, such as a compromise, to exist, consent of the contracting parties must be had, inter alia. No contract, too, shall arise unless its acceptance is communicated to the offeror. Here, the Respondent only established the BIR’s approval of the Petitioner’s compromise offer pertaining to the deficiency VAT assessment covering TY 2008, and nothing else. He failed to provide formidable proof that is indicative of the Petitioner’s knowledge of the BIR’s approval of said compromise offer, prior to the filing of its second administrative claim for refund. Being non-existent, the alleged compromise agreement did not give rise to conclusiveness on the matter supposed to have been settled by the Petitioner and the BIR. For this reason, the Petitioner may still impugn its refund claim premised on the alleged invalidity of such assessment. On whether the Petitioner is entitled to a refund of the alleged erroneously paid compromise payment, the Court found that the BIR conducted an invalid examination on the Petitioner as no LOA was issued relative to the deficiency VAT assessment. The assessment was solely anchored on a Letter Notice. Hence, the Petition was GRANTED, and a refund was warranted. [ED & F MAN PHILIPPINES, INC. VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10053, AUGUST 10, 2023]
A WRIT OF CERTIORARI WILL NOT BE ISSUED WHERE THE REMEDY OF APPEAL IS AVAILABLE TO AN AGGRIEVED PARTY
Petitioner Bureau of Internal Revenue (BIR) filed a Petition for Review seeking issuance of a resolution directing the Public Respondent Secretary of Justice and State Prosecutors to file Information indicting the Private Respondent Ferdinand Santos for a violation of Section 266 of the 1997 Tax Code, as amended, in relation to the failure to produce necessary documents. The Petitioner argued that the subject of its Petition for Certiorari is a final decision of the Secretary of Justice and that there is no more appeal available under the law except the remedy provided under Rule 65 of the Revised Rules of Court. On the other hand, the Respondent countered that the Petition for Certiorari is the wrong remedy due to the availability of an ordinary appeal. In ruling, the Court held that the Petition for Certiorari was a proper remedy. A Petition for Certiorari is appropriate when there is no more appeal available, and in this case, it was the correct recourse. However, the Court did not find any clear abuse of discretion in the actions of the Secretary of Justice in affirming the Investigating Prosecutor’s Resolution dismissing the complaint against the Private Respondent for lack of probable cause. The Investigating Prosecutor found no evidence to prove that the Private Respondent was apprised and informed of whatever records and documents still needed to be presented. Consequently, the Petition was DENIED. [BUREAU OF INTERNAL REVENUE, REPRESENTED BY COMMISSIONER CAESAR R. DULAY VS. HON. MENARDO I. GUEVARRA IN HIS CAPACITY AS SECRETARY OF JUSTICE & FERDINAND SANTOS IN HIS CAPACITY AS PRESIDENT OF CAMP JOHN HAY HOTEL CORPORATION, CTA EN BANC CASE NO. 2569, AUGUST 3, 2023]
[60-DAY REGLEMENTARY PERIOD FOR FILING A PETITION FOR PROHIBITION] [PROCEDURAL RULES ARE NOT TO BE DISDAINED AS MERE TECHNICALITIES THAT MAY BE IGNORED AT WILL TO SUIT THE CONVENIENCE OF A PARTY]
Petitioner National Food Authority (NFA) filed a Petition for Review seeking reversal of the Regional Trial Court (RTC)’s earlier Orders. The Petitioner argued that its Petition for Prohibition was filed on time. It argued that the sixty (60)-day period to file the said Petition should not be counted from its receipt of the Notice on 05 March 2019 (through a member of its staff from the alleged receipt of the NFA’s Administrator on 11 April 2019). Moreover, it maintained that it is a government instrumentality and, thus, exempt from the payment of Real Property Tax (RPT). In ruling, the Court held that the Petitioner may avail of the Special Civil Action of Prohibition. However, the same was filed out of time. Here, it is undisputed that the Petitioner, through its Batanes Provincial Office, received the Notice on 05 March 2019. The Petitioner should have filed its Petition for Prohibition not later than 04 May 2019, i.e., within sixty (60) days from 05 March 2019. However, the Petitioner filed the Petition for Prohibition only on 03 June 2019, way beyond the mandated sixty (60)-day reglementary period to do so. The Petitioner did not provide any justifiable reason for its failure to comply with the 60-day reglementary period. It merely contended that the receipt of the NFA-Legal Affairs Department should be its reckoning point. The Courts were unable to countenance such a nonchalant stance. Thus, the Petition for Prohibition having been filed out of time, the Court sees no need to delve into the case’s merits. Consequently, the Petition was DENIED. [NATIONAL FOOD AUTHORITY, REPRESENTED BY CARLITO G. CO, REGIONAL DIRECTOR OF NFA-NATIONAL CAPITAL REGION (NFA-NCR) VS. PROVINCIAL GOVERNMENT OF BATANES, PROVINCIAL ASSESSOR & PROVINCIAL TREASURER, BASCO BATANES, CTA AC CASE NO. 244, AUGUST 2, 2023]
PRELIMINARY INVESTIGATION IS ONLY FOR OFFENSES WITH MORE THAN FOUR (4) YEARS OF IMPRISONMENT WITHOUT REGARD TO FINE
Petitioners Jimmy A. Ang and Olivia N. Ang filed a Petition for Review challenging the Regional Trial Court (RTC)’s Judgment finding them guilty beyond reasonable doubt for violation of Section 266 of the 1997 Tax Code, as amended, for failing to comply with the Bureau of Internal Revenue (BIR)’s Subpoena Duces Tecum (SDT). The BIR sought to audit their company, The Value Systems Phils., Inc. (TVSPI), for the period from January 1, 2018, to June 30, 2018. The Petitioners were each sentenced to suffer the penalty of imprisonment of one (1) year and ordered to pay a Fine of Php 5,000.00 each. In ruling, the Court rejected the Petitioners’ claim that a Preliminary Investigation was required on their case. The law mandates the Preliminary Investigation only for offenses carrying a penalty of at least four (4) years of imprisonment, regardless of any accompanying fines. Since the maximum penalty for their offense was two (2) years of imprisonment, they were not entitled to a Preliminary Investigation. The Court also underscored that the Petitioners had waived their right to challenge the absence of Preliminary Investigation by failing to raise the issue before entering their plea. Importantly, the Court reinforced that good faith or motive was not a valid defense for offenses classified as mala prohibita. In conclusion, the Court upheld the conviction of the Petitioners for their neglect in complying with the BIR’s SDT, emphasizing that they had no right to a Preliminary Investigation, and good faith was not a valid defense in cases involving mala prohibita offenses. Consequently, the Petition was DENIED. [JIMMY A. ANG & OLIVIA N. ANG VS. PEOPLE OF THE PHILIPPINES, CTA EN BANC CRIMINAL CASE. NO. 095, AUGUST 2, 2023]
Duterte to Pinoys: Don’t pay taxes unless… [The Philippine Star, October 25, 2023]
Former president Rodrigo Duterte has advised Filipinos to stop paying taxes until Congress issues a detailed disbursement report on how it spent the national budget.
https://www.philstar.com/headlines/2023/10/25/2306360/duterte-pinoys-dont-pay-taxes-unless
Filinvest Land opens Tarlac industrial hub [The Manila Times, October 25, 2023]
FIP-NCC, located within the 288-hectare Filinvest New Clark City, was developed through Filinvest-BCDA Clark Inc., the firm’s joint venture with the Bases Conversion and Development Authority (BCDA).
SSS raises maximum funeral benefit to P60,000 [GMA News Online, October 25, 2023]
Under the new guidelines, claimants of deceased members with 36 or more monthly contributions may receive a variable amount from P20,000 to P60,000 in SS funeral benefits, depending on the member’s number of paid contributions and average monthly salary credit.
PPA sees Marawi Port completion in February [The Manila Times, October 25, 2023]
The project covers the construction of facilities, including a backup area of about 8,000 sq. m., a one-story passenger terminal building with 132 seating capacity, a one-story fish port, a berthing facility for Fastcraft, and a RoRo ramp.
No plans to declare Oct. 31 as holiday—Palace [Manila Bulletin, October 24, 2023]
Presidential Communications Office (PCO) Secretary Cheloy Garail disclosed that the Office of the Executive Secretary “has no plan” of declaring it as a holiday.
https://mb.com.ph/2023/10/24/no-plans-to-declare-oct-31-as-holiday-palace#google_vignette
Mama Lou’s ‘actively working’ to improve service amid viral ‘Endless Pasta’ campaign [interaksyon, October 24, 2023]
Italian restaurant Mama Lou’s Italian Kitchen said that it is “actively working” to improve its quality of service in relation to its viral “Endless Pasta” campaign.
SMC’s Ang takes a seat in Metro Pacific board [The Philippine Star, October 24, 2023]
Ang’s investment in MPIC came after Ang and fellow tycoon Manuel V. Pangilinan set aside rivalries and teamed up last May for a new tollway project that would link Cavite and Batangas.
https://www.philstar.com/business/2023/10/24/2306004/smcs-ang-takes-seat-metro-pacific-board
US BPO firm expands office in Quezon City [Philippine Daily Inquirer, October 23, 2023]
Leading US-based business process outsourcing (BPO) company Afni added a new floor to its Fairview office in Quezon City as part of its strategy to scale up its operations in response to growing client demands for customer support services.
https://newsinfo.inquirer.net/1849667/us-bpo-firm-expands-office-in-quezon-city
New PUP campus breaks ground in North Caloocan [Philippine Daily Inquirer, October 23, 2023]
The state-run Polytechnic University of the Philippines (PUP) is opening a new campus in Caloocan City. Caloocan City Mayor Dale Malapitan led the groundbreaking ceremony for the new PUP campus at the Rainbow Village, Deparo.
https://newsinfo.inquirer.net/1849676/new-pup-campus-breaks-ground-in-north-caloocan
Ilocos, Western Visayas regional wage boards raise minimum pay [Philippine News Agency, October 22, 2023]
Close to 300,000 minimum wage earners in private establishments will benefit from the daily pay increase granted in Ilocos and Western Visayas Regions, the National Wages and Productivity Commission (NWPC) announced in a news release over the weekend.
https://www.pna.gov.ph/articles/1212280
Marcos abolishes Northrail 4 years after deactivation [Philippine Daily Inquirer, October 22, 2023]
President Ferdinand Marcos Jr. has ordered the abolition of the state-run North Luzon Railways Corp. (Northrail) which was tasked with overseeing one of the Duterte administration’s “Build, Build, Build” transport projects that was supposed to be funded by China, Malacañang said on Saturday.
https://newsinfo.inquirer.net/1849388/marcos-abolishes-northrail-4-years-after-deactivation
Osmeña: P18-billion Kawit Island deal ‘beneficial’ to the city [Cebu Daily News, October 22, 2023]
The former mayor said that under the agreement that he entered into with the Gokongwei-owned Universal Hotel and Resorts Inc. (UHRI), the city government was to receive 10 percent of the gross revenue that they would earn from the development project.
Condominium residents call out Ayala Center Cebu for noise pollution [Rappler, October 20, 2023]
At least 48 tenants of Park Point Residences have filed a petition against Ayala Center Cebu for what they said was the shopping mall’s negligence to resolve alleged noise pollution coming from its cooling towers.
SEC: About 300,000 firms at risk of being under delinquency status [The Philippine Star, October 20, 2023]
Based on its records as of Oct. 12, the SEC said these corporations failed to submit their general information sheet (GIS) for three times consecutively or intermittently within a five-year period.
BSP-licensed beauty parlor platform gets $400,000 in funding [Philippine Daily Inquirer, October 20, 2023]
Cofounded and led by millennials Kristine Claire Ongcangco and Miko Cornejo four years ago, Parlon allows users to easily find and book a salon or wellness center through its website and mobile app. Parlon is a portmanteau of the words “parlor” and “salon.”
https://business.inquirer.net/427285/bsp-licensed-beauty-parlor-platform-gets-400000-in-funding
PSE to launch short selling program in November [Manila Bulletin, October 20, 2023]
The PSE defines short selling as “any sale of a security that will be settled by the delivery of borrowed securities, which allows the investor to benefit from an expected future decline in price.”
https://mb.com.ph/2023/10/20/pse-to-launch-short-selling-program-in-november
In the Plans: An Expressway That Will Link TPLEX and Alaminos [Spot.Ph, October 20, 2023]
The PLEX is a proposed 76.80-kilometer expressway that will link the towns of Binalonan, Manaoag, Calasiao, and Lingayen in Pangasinan as part of San Miguel Corporation’s (SMC) broader initiative to enhance the road networks in Central and Northern Luzon. It’s set to begin at the Tarlac-Pangasinan-La Union Expressway (TPLEX) exit in Binalonan.
Jollibee, Greenwich, Burger King to hire PWDs, senior citizens in Muntinlupa [Manila Bulletin, October 18, 2023]
The Muntinlupa City Council passed Resolutions 2023-345, 2023-346 and 2023-347 authorizing Mayor Ruffy Biazon to enter and sign memorandums of agreement with Jollibee Foods Corp., Fresh ‘N Famous Foods Inc.-Greenwich Philippines and Perf Restaurants-Burger King Philippines for the temporary employment of seniors and PWDs.
GMA Network to present witness at TVJ’s ‘Eat Bulaga’ copyright infringement trial [Manila Bulletin, October 18, 2023]
The court will decide if TVJ and Ferre have a claim for copyright infringement against TAPE over the entire show of “Eat Bulaga” and the show’s jingle, and if a permanent injunction can be issued against the two defendants.
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