A compilation of recent legislation and issuances of the Bureau of Internal Revenue and other government agencies relevant to the field of taxation and corporate practice.
Revenue Memorandum Order No. 14-2016 – New Guidelines for Waivers
Revenue Regulations (RR) No. 1-2016: Amending certain provisions of RR No. 3-2005
Revenue Memorandum Order (RMO) 4-2016 - A recommendation by a revenue officer for the denial of an application for compromise settlement, abatement, or cancellation is considered FINAL and the outstanding tax liabilities and/or penalties shall be imm
Revenue Memorandum Circular (RMC) No. 57-2015 – Submission of Inventory Lists and Other Reporting Requirement
Revenue Memorandum Circular (RMC) 41-2015 - Documentary Requirements Necessary for the Registration of Labor Organizations, Associations, or Group of Unions or Workers under Section III (C) of Annex A of Revenue Regulations (RR) No. 7-2012.
Revenue Memorandum Circular (RMC) No 10-2015 – Filing of Income Tax Returns (BIR Form No. 1700) of Employees who belong to Employer identified as Large Taxpayer
Revenue Memorandum Circular (RMC) No 9-2015 – Enhanced BIR Registration Forms for the Implementation of Taxpayer Registration System (TRS) under Electronic Tax Information System (eTIS-1)
Revised Consolidated Schedule of Compromise Penalties for Violation of the National Internal Revenue Code
The P82,000 tax exemption on 13th month pay and other benefits applies beginning January 1, 2015.
Reduction and condonation of real property taxes on the power generation facilities of IPPs under BOT contracts with GOCCs
The BIR recently issued Revenue Memorandum Circular (RMC) No. 6-2015 which circularizes Executive Order (EO) No. 173 dated October 31, 2014.
Under Section 1 of EO No. 273, as circularized in RMC No. 6-2015, all liabilities for real property tax on property, machinery and equipment (including special levies accruing to the Special Education Fund) actually and directly used by IPPs for the production of electricity under Build-Operate-Transfer (BOT) contracts (whether denominated Power Purchase Agreements (PPA), Energy Conversion Agreements (ECA) or other contractual agreements) with GOCCs, for all years up to 2014 are reduced to an amount equivalent to the tax due computed based on an assessment level of 15% of the fair market value of said property, machinery and equipment depreciated at the rate of 2% per annum, less amounts already paid by the IPPs.
Further, all fines, penalties and interest on such deficiency real property tax liabilities are condoned and the concerned IPPs are relieved from payment.
Revenue Memorandum Order (RMO) 1-2015 - Amendments to the list of requirements for accreditation of Importers and Customs Brokers
RMO 1-2015 was issued by the BIR last December 19, 2014 removing the following from the list of requirements:
1. Certified copy of the BIR Certificate of Registration (COR); and2. SEC Registration and Articles of Incorporation
Revenue Regulations (RR) 1-2015, was published in Manila Bulletin on January 6, 2015 and shall take effect immediately
RR 1-2015 includes as non-taxable “de minimis benefits” the following:
1. Benefits received by an employee by virtue of a collective bargaining agreement (CBA); and 2. Productivity incentive schemes
Provided, that the total annual monetary value received from the 2 items above combined, do not exceed P10,000.00 per employee per taxable year
Emerging Rule for Income Tax Refunds
Revenue Memorandum Order (RMO) No. 34-2014 was issued by the Bureau of Internal Revenue (BIR) on September 18, 2014 clarifying that absence of a valid, current and subsisting tax exemption ruling will not divest such qualified entities of their tax exemption privilege. However, those who fail to secure such tax exemption rulings will just have to prove that they have complied with the conditions set forth in the law for tax exemption during tax investigation.
Revenue Memorandum Order No. 33-2014 - Amending the Policies, Guidelines and Procedures in the Issuance of Importer’s Clearance Certificate (ICC) and Customs Broker’s Clearance Certificate (BCC) relative to Accreditation as Importer or Customs Broker
On September 11, 2014, the Bureau of Internal Revenue (BIR) issued RMO No. 33-2014 amending certain provisions of RMO No. 10-2014 and RMO No. 22-2014.
RMO No. 10-2014 required importers and customs brokers to submit certain documentary requirements in their application for accreditation, such as certified true copies (CTCs) of the applicant’s BIR Certificates of Registration (COR), Annual ITRs and DTI COR of Business Name, among others.
Revenue Memorandum Circular (RMC) No. 73-2014 - Withholding Tax Rates on Dividend Payments to Philippine Central Depository (PCD) Nominees
The BIR recently issued Revenue Memorandum Circular (RMC) No. 73-2014 dated September 12, 2014 clarifying the withholding tax rates on dividend payments to PCD Nominees. Under this circular, a PCD Nominee-Filipino is deemed to be an individual subject to final withholding tax of 10% under Section 24(B)2 of the Tax Code, unless it is satisfactorily shown that the actual equity investor is a domestic corporation. A PCD Nominee – Non Filipino is deemed to be a non-resident foreign corporation subject to final withholding tax of 30% under Section 28(B)1 of the Tax Code, unless it is satisfactorily shown that the actual equity investor is a resident alien, non-resident alien engaged or not engaged in trade or business in the Philippines or resident foreign corporation.
The BIR Regulations did not mention anything about the applicability of reduced withholding rates under existing tax treaties. It can however be presumed that if the non-resident recipient, whether individual or corporate, is qualified to avail of the reduced treaty rates, then such should be the rate applicable.
Revenue Regulation No. 6-2014-Prescribing the Mandatory Use of Electronic Bureau of Internal Revenue Forms (eBIR Forms)
Last September 5, 2014, the Bureau of Internal Revenue (BIR) issued Revenue Regulation 06-2014 prescribing the mandatory use of Electronic Bureau of Internal Revenue Forms (eBIR Forms) in filing of all tax returns by Non-Electronic Filing and Payment System (Non-eFPS) filers. Mandatory coverage of the Regulation are:
Last June 6, 2014, the Bureau of Internal Revenue issued Revenue Memorandum Circular (RMC) No. 51-2014 which clarifies the inurement prohibition of Section 30 of the National Internal Revenue Code relating to non-stock/non-profit corporations/associations/organizations which are exempt from income tax.
Last June 11, 2014, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 54-2014 which clarified the issues relating to the application for Value Added Tax (VAT) refund or credit as provided under Section 12 of the Tax Code. The said RMC seeks to summarize the rules on VAT refunds as stated by the Supreme Court.
Guidelines and Directives to Assist Issuers of Securities Listed and Traded in the Philippine Stock Exchange in Complying with the Requirements of BIR Revenue Regulation No. 1-2014
Last May 22, 2014, the Securities and Exchange Commission (SEC) issued SEC Memorandum Circular No. 10, series of 2014 (MC 10-2014) which provides for the guidelines and directives to assist issuers of securities listed and traded in the Philippine Stock Exchange to comply with the requirements of BIR Revenue Regulation (RR) No. 1-2014. RR No. 1-2014 in turn provides for the requirements of Alphabetical List of Employees/Payees of Income Payments which are to be submitted to the BIR.