BPO workers in ecozones must work on-site-DOJ
Other Relevant Tax Updates:
- TAX & BUSINESS-RELATED NEWS [JANUARY 14-22]
- BIR IMPLEMENTS THE ADJUSTMENT OF THE SELLING PRICE THRESHOLD OF THE SALE OF HOUSE & LOT & OTHER RESIDENTIAL DWELLINGS FOR VAT EXEMPTION PURPOSES
- BIR CLARIFIES SURCHARGE COMPUTED IN THE FILING OF AN AMENDED RETURNS IN THE eFPS
- BIR CLARIFIES THE PROPER TAX TREATMENT OF CROSS-BORDER SERVICES IN LIGHT OF THE SUPREME COURT DECISION IN ACES PHILIPPINES CELLULAR SATELLITE CORPORATION
- DOJ OPINION
- TAX & BUSINESS-RELATED NEWS [JANUARY 14]
- BPO workers in ecozones must work on-site – DOJ
- BCDA, MIAA still negotiating for NAIA Terminal 3 property
- QC extends payment of business tax to April 30
- 35% tariff proposed on all agri imports
- QC encourages urban farms with land tax exemption
- Dutch parliament considers first step towards asking king to pay income tax
- Baguio to BCDA: Cede control of Camp John Hay villages
- SEC mulls lower stock broker commission rate
- CHED provides grants to boost Region 6 tourism, engineering education
- Peza, exporters circle wagons on possible Red Sea fallout
- Ex-Finance chief wants restrictions for land ownership by foreigners removed
- Pasig River project: 10,000 families to live in container vans temporarily
- PLDT eyes new president
- BIR discovers violations during tax mapping drive
- Antitrust review stalls PLDT buyout of Sky Cable
- DILG wants LGU tax break for recovering film industry
- Accountant nabbed for allegedly stealing P9M from company
- Shrinkflation: DTI okays downsizing of key goods
- Bongbong Marcos calls for consolidated tourism services
- Pagcor cuts 665 jobs from privatized casino
- DA chief Laurel eyes revival of Laguna Lake as major fish source
- Marcos orders alignment of Philippine maritime practices with global standards
- Starbucks PH acknowledges ‘mistake’ in putting cap on senior citizen, PWD discounts
- 26 BIR officials suspended
- DTI OKs SRP adjustments for 3 coffee product variants, 6 salt products
- Austrian heiress pays to give away 25-million euro or P1.52-billion fortune
- Marikina exempts small sari-sari stores, carinderias from business tax
- Three global logistics firms to set up facilities in Clark —BCDA
- Uniqlo sues China rival Shein over viral bag copies
- Ayala Group wants to offload LRT-1 stake to Villar but exit strategy faces roadblock from MVP’s Metro Pacific
2. BIR IMPLEMENTS THE ADJUSTMENT OF THE SELLING PRICE THRESHOLD OF THE SALE OF HOUSE & LOT & OTHER RESIDENTIAL DWELLINGS FOR VAT EXEMPTION PURPOSES
Revenue Regulations (RR) No. 1-2024 issued on January 15, 2024, further amends Section 2, Sub-section 4.109-1 (B)(p) of RR No. 4-2021, as amended by RR No. 8-2021, by adjusting the selling price threshold of the sale of house and lot, and other residential dwellings from its current amount of Php 3,199,200.00 to Php 3,600,000.00 for Value-Added Tax (VAT) exemption purposes.
The adjustment was made by virtue of Section 109 (P) of the 1997 Tax Code, as amended, which mandates that every three (3) years the subject amount should be adjusted to its present value using the Consumer Price Index (CPI) as published by the Philippine Statistics Authority (PSA).
3. BIR CLARIFIES SURCHARGE COMPUTED IN THE FILING OF AN AMENDED RETURNS IN THE Efps
Revenue Memorandum Circular (RMC) No. 9-2024 issued on January 15, 2024, clarifies that the surcharge calculated by the Electronic Filing and Payment System (eFPS) should be disregarded when filing an amended tax return, provided the initial tax return was filed on or before the set deadline. If additional tax is incurred in the amended tax return, only basic tax, computed interest, and compromise penalty shall be paid.
4. BIR CLARIFIES THE PROPER TAX TREATMENT OF CROSS-BORDER SERVICES IN LIGHT OF THE SUPREME COURT DECISION IN ACES PHILIPPINES CELLULAR SATELLITE CORPORATION
Revenue Memorandum Circular (RMC) No. 5-2024, issued on January 10, 2024, further clarifies the proper tax treatment of cross-border services in light of the Supreme Court (SC) En Banc Decision in Aces Philippines Cellular Satellite Corp. v. Commissioner of Internal Revenue, GR. No. 226680, dated August 30, 2022. Specifically, it clarifies circumstances that may warrant the imposition of Final Withholding Tax (FWT) on income payments abroad as a result of the decision of the SC affirming the earlier decision of the Court of Tax Appeals (CTA) upholding the BIR’s imposition of FWT on satellite airtime fee payments by Aces Philippines (payor/withholding agent) to Aces Bermuda (payee/income earner), a Non-Resident Foreign Corporation (NRFC), for the satellite airtime services it provided to Aces Philippines.
Highlights include:
1.The jurisdiction where the economic activity occurs should have the right to tax the income derived from that activity, regardless of where the payment is made or received.
- The source of income is determined by the location of the business activity rather than the disbursement or receipt of funds.
- Cross-border services include (a) consulting services (b) IT outsourcing (c) financial services (c) telecommunications, (d) engineering and construction (e) education and training, (f) tourism and hospitality, and (f) other similar services.
- The application of benefits-received theory:
4.1 It is imperative to ascertain whether the particular stages occurring in the Philippines are integral to the overall transaction such that the business activity would not have been accomplished without the Philippine activities. If the income-generating activities in the Philippines are deemed essential, the income derived from these activities is considered sourced from the Philippines for tax purposes.
4.2 If the service provider is located outside the country, if the service is utilized, applied, executed, or consumed for a recipient within the Philippines, the income payment for such a service is considered sourced within the country, and thus, the VAT is applicable.
5. DOJ OPINION
[REGISTERED BUSINESS ENTERPRISES IN ECONOMIC ZONES ADOPTING WORK-FROM-HOME (WFH) ARRANGEMENTS ARE NO LONGER ENTITLED TO TAX INCENTIVES] [WORKERS IN ECOZONES MUST WORK ON-SITE] [SECTION 309 OF THE CREATE LAW IMPOSES A LOCATIONAL PROHIBITION ON ACTIVITIES CONDUCTED OUTSIDE THE GEOGRAPHICAL BOUNDARIES OF ECONOMIC ZONES OR FREEPORTS, AFFECTING THE ENTITLEMENT TO INCENTIVES]
The Presidential Management Staff is requesting a legal opinion on the application of Section 309 of the Republic Act (R.A.) No. 11534, otherwise known as the “Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act” because of the conflicting positions and interpretations of concerned agencies regarding the Work-From-Home (WFH) arrangement of Registered Business Enterprises (RBEs) in economic zones and those registered under the Board of Investments (BOI). In opining, basic is the rule in statutory interpretation that when the law is clear, plain, and free from ambiguity, it must be given its literal meaning without attempted interpretation. Section 309 of the CREATE Law specifically requires registered projects or activities under an Investment Promotion Agency (IPA) administering an economic zone or freeport to be exclusively conducted or operated within the geographical boundaries of the zone or freeport, and any project or activity conducted or performed outside the zone or free port shall not be entitled to the incentives under the CREATE Law. This locational prohibition does not apply to enterprises registered with the BOI as it does not administer an ecozone or freeport. While the Fiscal Incentives Review Board (FIRB), issued Resolutions allowing Registered Business Enterprises (RBEs) of the Information Technology-Business Process Management (IT-BPM) sector to adopt the WFH arrangement, the same was issued as a temporary measure as provided under Rule 23 of the CREATE Implementing Rules and Regulations (IRR) which are tied to exceptional circumstances such as the COVID-19 pandemic. Thus, Section 309 of the CREATE Law still prevails. Until the enactment of new legislation amending the said law, business enterprises located in the economic or freeport zone must continue to conduct their activities within the zone boundaries if they wish to continue availing of their tax incentives under the CREATE Law. Likewise, these enterprises are not prohibited from adopting a WFH arrangement but will no longer be eligible to continue enjoying the tax incentives. [DEPARTMENT OF JUSTICE OPINION NO. 02, SERIES OF 2024, JANUARY 3, 2024]
BPO workers in ecozones must work on-site – DOJ [Philippine Daily Inquirer, January 22, 2024]
“Once the exceptional circumstance such as pandemic … ceases to exist, or in this case the issuance of Proclamation No. 297 dated 21 July 2023 lifting the state of public health emergency throughout the Philippines, the temporary measure shall also cease to exist,” Remulla said.
https://newsinfo.inquirer.net/1892161/doj-bpo-workers-in-ecozones-must-work-on-site
BCDA, MIAA still negotiating for NAIA Terminal 3 property [The Philippine Star, January 22, 2024]
State-run Bases Conversion and Development Authority (BCDA) said it is still negotiating with the Manila International Airport Authority (MIAA) on whether the latter will lease or buy the property where the current NAIA Terminal 3 facilities and runway are located.
QC extends payment of business tax to April 30 [The Manila Times, January 21, 2024]
The Quezon City council has passed an ordinance that will extend the deadline for the payment of business tax, City Treasurer Edwin “Ed” Villanueva said on Sunday.
https://www.manilatimes.net/2024/01/21/news/qc-extends-payment-of-business-tax-to-april-30/1929074
35% tariff proposed on all agri imports [The Manila Times, January 21, 2024]
THE Philippine Chamber of Agriculture and Food Inc. (Pcafi) has proposed the scrapping of the minimum access volume (MAV) tariff-setting policy that designates lower duties to agricultural imports, saying a uniform 35 percent should be imposed on all agricultural products shipped into the country.
QC encourages urban farms with land tax exemption [GMA News Online, January 21, 2024]
The Quezon City government over the weekend said it has streamlined the process of applying for idle land tax exemption for landowners who use their land for urban farming, as it seeks to boost food security and urban agriculture in the city.
Dutch parliament considers first step towards asking king to pay income tax [Inquirer.Net, January 20, 2024]
AMSTERDAM — Dutch lawmakers will vote on Tuesday on a first step towards requiring King Willem-Alexander and his family to pay income tax, a plan that would require an amendment to the constitution.
Baguio to BCDA: Cede control of Camp John Hay villages [Philippine Daily Inquirer, January 20, 2024]
Mayor Benjamin Magalong on Thursday urged the Bases Conversion and Development Authority (BCDA) to exclude the entire cluster of barangays thriving inside Camp John Hay and turn over all open spaces, including roads, schools and public buildings within the territory of these villages, to the city government.
https://newsinfo.inquirer.net/1891548/baguio-to-bcda-cede-control-of-camp-john-hay-villages
SEC mulls lower stock broker commission rate [Inquirer Mobile, January 20, 2024]
This will help lower costs for stock market investors especially as the Philippine Stock Exchange (PSE) and SEC encourage millions of new retail investors to buy and sell equities on mobile wallet platforms such as GCash and Maya.
CHED provides grants to boost Region 6 tourism, engineering education [GMA News Online, January 20, 2024]
The Commission on Higher Education, on Saturday, inaugurated special project grants at the University of Antique (UA) as part of the CHED’s effort to improve the quality of the education received by tourism and engineering students in Region 6.
Peza, exporters circle wagons on possible Red Sea fallout [Inquirer Mobile, January 20, 2024]
“The closure and shutdown of the Red Sea to trade will make shipping costs 15 percent more expensive and add 10 days for the exchange of goods between Europe and Asia,” Panga said.
Ex-Finance chief wants restrictions for land ownership by foreigners removed [ABS-CBN News, January 19, 2024]
Former Finance Secretary Gary Teves’ statement comes as solons consider changes to economic provisions of the 1987 Constitution.
Pasig River project: 10,000 families to live in container vans temporarily [Inquirer.Net, January 19, 2024]
Approximately 10,000 informal settler families (ISFs) living along the Pasig River may be temporarily housed in container vans to facilitate an P18-billion river development project, according to Metropolitan Manila Development Authority Chairman Romando Artes on Friday.
PLDT eyes new president [The Philippine Star, January 19, 2024]
The last time that PLDT looked for a new president and CEO, it took it about four years to finish the process. It can be recalled that Pangilinan returned to the driver’s seat of PLDT in 2015 to fill in the shoes left behind by Napoleon Nazareno who retired that year.
https://www.philstar.com/business/2024/01/19/2326787/pldt-eyes-new-president
BIR discovers violations during tax mapping drive [Philippine News Agency, January 18, 2024]
Among the violations discovered on the first day of the TCVD implementation include unregistered businesses, unregistered point-of-sales and cash register machines, incomplete bookkeeping requirements, and required notice that should be placed inside the establishments.
https://www.pna.gov.ph/articles/1217215
Antitrust review stalls PLDT buyout of Sky Cable [The Philippine Star, January 18, 2024]
To recall, PLDT signed a sale and purchase agreement with ABS-CBN Corp., Sky Vision Corp. and Lopez Inc. last year. If approved, the telco led by Manuel V. Pangilinan will buy 100 percent of the total issued and outstanding capital stock of Sky Cable for P6.75 billion.
https://www.philstar.com/business/2024/01/18/2326516/antitrust-review-stalls-pldt-buyout-sky-cable
DILG wants LGU tax break for recovering film industry [Inquirer.Net, January 18, 2024]
The Department of the Interior and Local Government (DILG) has appealed to local government units (LGUs) to implement a tax break for the local film industry to help them recover from losses due to the COVID-19 pandemic.
https://newsinfo.inquirer.net/1891150/dilg-on-helping-local-film-industry
Accountant nabbed for allegedly stealing P9M from company [GMA News Online, January 18, 2024]
According to the PNP, the suspect claimed to have returned the money to his former employer by giving up his land and other properties.
Shrinkflation: DTI okays downsizing of key goods [Philippine Daily Inquirer, January 18, 2024]
Instead of increasing prices, the Department of Trade and Industry (DTI) on Wednesday said that it has permitted manufacturers of basic necessities and prime commodities to instead reduce the size or weight of their products to cope with rising production costs and remain profitable.
https://newsinfo.inquirer.net/1890733/shrinkflation-dti-okays-downsizing-of-key-goods
Bongbong Marcos calls for consolidated tourism services [Inquirer.Net, January 18, 2024]
The President recounted that his friend said that in the Philippines tourists have to arrange their own hotel, tour guide, driver and more.
https://newsinfo.inquirer.net/1891133/bbm-on-tourism
Pagcor cuts 665 jobs from privatized casino [Inquirer Mobile, January 18, 2024]
The Philippine Amusement and Gaming Corp. (Pagcor) is laying off over 660 workers from a casino near Manila Bay as it turns over operations to a private sector group—a prelude to future job disruptions as the state gaming regulator moves closer to implementing a decades-old plan to privatize all casinos by the end of 2025.
DA chief Laurel eyes revival of Laguna Lake as major fish source [GMA News Online, January 18, 2024]
Citing data from the Laguna Lake Development Authority (LLDA), the DA chief said the 940-square-kilometer Laguna de Bay produces as much as 90,000 tons of freshwater fish a year and provides livelihood to around 13,000 fishermen.
Marcos orders alignment of Philippine maritime practices with global standards [The Philippine Star, January 18, 2024]
Marcos said the country’s rules and operations in the maritime industry have become “obsolete because of lack of a unified system governing the industry.”
Starbucks PH acknowledges ‘mistake’ in putting cap on senior citizen, PWD discounts [CNN, January 17, 2024]
Cole was referring to the Starbucks advisory — which she said was put up in stores nationwide — stating that beginning Jan. 15, food and beverage purchases with senior citizen, PWD and other government discounts shall be limited to one food item and one beverage only per visit.
https://www.cnnphilippines.com/business/2024/1/17/starbucks-house-inquiry-senior-pwd-discount.html
26 BIR officials suspended [The Philippine Star, January 17, 2024]
The suspension of these officials was brought about by their acts which constitute grave misconduct, serious dishonesty, gross neglect of duty, violation of reasonable office rules and regulations, violation of the anti-red tape act of 1997 and conduct prejudicial to the best interest of the service.
https://www.philstar.com/headlines/2024/01/17/2326315/26-bir-officials-suspended
DTI OKs SRP adjustments for 3 coffee product variants, 6 salt products [GMA News Online, January 17, 2024]
In a statement, the DTI said it has completed the assessment and validation of notifications for price adjustments filed by certain manufacturers in the coffee and salt categories.
Austrian heiress pays to give away 25-million euro or P1.52-billion fortune [ABS-CBN News, January 17, 2024]
VIENNA — The rich and famous are paying top dollar for a place at this week’s Davos summit but heiress Marlene Engelhorn is on the other side of the fence at the glitzy Swiss resort, demanding that they pay more in taxes.
https://news.abs-cbn.com/business/01/17/24/heiress-wants-to-give-away-p152-billion-fortune
Marikina exempts small sari-sari stores, carinderias from business tax [GMA News Online, January 16, 2024]
Covered under the ordinance are sari-sari stores and eateries with start-up capital of not more than P10,000 or an annual gross receipt of not more than P180,000.
Three global logistics firms to set up facilities in Clark —BCDA [GMA News Online, January 16, 2024]
This is for their global operations, so they chose Clark to be their Asian hub going to Japan, Singapore, Korea, and even China, Hong Kong, that will be the direction of their planes, up to 18 planes.
Uniqlo sues China rival Shein over viral bag copies [The Manila Times, January 16, 2024]
TOKYO: Japanese fashion giant Uniqlo said Tuesday that it is suing Chinese rival Shein over copycats of a massively popular crossbody pouch dubbed online the “Mary Poppins carryall.”
Ayala Group wants to offload LRT-1 stake to Villar but exit strategy faces roadblock from MVP’s Metro Pacific [Bilyonaryo, January 14, 2024]
Ayala Corp. (AC) led by bilyonaryo Jaime Augusto Zobel de Ayala is keen on transferring another infrastructure project to former Senate President Manny Villar as part of its divestment from government-regulated businesses.
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