TAX & BUSINESS-RELATED NEWS [AUGUST 20-24] BIR LIFTS THE SUSPENSION OF FIELD AUDITS & OPERATIONS BIR PRESCRIBES ADDITIONAL GUIDELINES ON PENALTY COMPUTATION FOR IT-BPM RBEs VIOLATIONS REGARDING WFH ARRANGEMENT BIR RULINGS DIGEST PEZA CLARIFIES ISSUANCE OF CERTIFICATE OF ENTITLEMENT TO INCENTIVES (CETI) UNDER CREATE LAW TAX & BUSINESS-RELATED NEWS [AUGUST 15-19]
| 1. TAX & BUSINESS-RELATED NEWS [AUGUST 20-24] | | Elon Musk subpoenas Twitter's ex-CEO Dorsey Chinese label Miniso feels 'regret, guilt' for Japanese branding Fernando suspends mining in Bulacan DOF reminds LGUs not to impose work tax on WFH employees Toyota truck arm Hino halts more shipments amid data fraud scandal Tulfo confronts DTI over alleged slow action vs scammers Hotel Jen to close permanently in September San Miguel Corp unit buys PNOC banked gas for $1.2-B MAP backs upgrade, privatization of EDSA busway, railways Jimmy Bautista eyes privatization of MRT3 as deal with private partners seen to lapse by 2025 Central bank introduces coin deposit machines Xiaomi cuts over 900 jobs as revenues shrink 20 percent Philippines 7th among top earning countries in esports, study says Darryl Yap suggests ways to help the poor: ‘Gawin nyong libre ang mga Catholic private schools’ Okada retains control of casino-hotel, but gets a scolding from SC Large taxpayers cool on shift to e-receipts – BIR Borrowers feeling pinch of rising bank lending rates, says BSP
| We saw these tax and business-related news on various news sites, and we thought you should see them. DMD is not responsible for the content of these news, and anything written thereon does not necessarily reflect DMD views or opinions. | Elon Musk subpoenas Twitter's ex-CEO Dorsey [The Manila Times, August 24, 2022] Musk, the world's wealthiest man, has accused Twitter of fraud, alleging that the company misled him about key aspects of its business, particularly the number of accounts that are actually spam or automated "bots," instead of people. Chinese label Miniso feels 'regret, guilt' for Japanese branding [The Philippine Star, August 23, 2022] Lifestyle retailer Miniso apologized for its Japanese styling and said it has been "de-Japanizing" since 2019. Fernando suspends mining in Bulacan [The Manila Time, August 23, 2022] GOV. Daniel Fernando temporarily suspended all permits on mining, quarrying, dredging, desilting and other types of mineral extractive operations as well as special permits for land development in Bulacan. DOF reminds LGUs not to impose work tax on WFH employees [ABS-CBN News, August 22, 2022] Finance Undersecretary Antonette Tionko said the Department of Finance (DOF) will issue a local finance circular which states that local government units cannot collect work tax from individuals who are working from home. Toyota truck arm Hino halts more shipments amid data fraud scandal [ABS-CBN News, August 22, 2022] Hino Motors Ltd. suspended more of its shipments Monday as the truck-making subsidiary of Toyota Motor Corp. revealed fresh details of engine data falsification going back as far as 2003. Tulfo confronts DTI over alleged slow action vs scammers [ABS-CBN News, August 22, 2022] Sen. Raffy Tulfo on Monday confronted Department of Trade and Industry (DTI) officials for allegedly “ignoring” complaints of individuals duped by so-called networking marketing companies. Hotel Jen to close permanently in September [ABS-CBN News, August 22, 2022] "New Riviera Hotel Development Corporation, the owner of the hotel building located on 3001 Roxas Blvd, Pasay, has decided to close Jen Manila by Shangri-La permanently as part of their redevelopment plans for the property," the statement read. San Miguel Corp unit buys PNOC banked gas for $1.2-B [ABS-CBN News, August 22, 2022] South Premier Power Corp or SPPC, a subsidiary of SMC Global Power Holdings Corp entered the deal, SMC said in a disclosure to the stock exchange. MAP backs upgrade, privatization of EDSA busway, railways [ABS-CBN News, August 22, 2022] The Management Association of the Philippines on Monday said it has proposed the upgrade and privatization of the EDSA Busway system which could help the transport system reach global standards. Jimmy Bautista eyes privatization of MRT3 as deal with private partners seen to lapse by 2025 [Bilyonaryo, August 21, 2022] MRT Corp. and the Department of Transportation and Communications entered into a BLT agreement in 1997 to construct and maintain the 16.9-kilometer commuter train system which spans from North Avenue in Quezon City to Taft Avenue in Pasay City. Central bank introduces coin deposit machines [Philippine Daily Inquirer, August 21, 2022] Introducing the automated coin deposit machine (CoDMs), the latest of the government’s stratagems to promote the re-circulation of coins and persuade Filipinos to use the low-value currency in their daily transactions. Xiaomi cuts over 900 jobs as revenues shrink 20 percent [ABS-CBN News, August 21, 2022] In the three months ended June 30, net income also missed estimates, falling 83.5 per cent to 1.4 billion yuan, compared with a profit of 8.3 billion yuan the same period last year. Philippines 7th among top earning countries in esports, study says [The Philippine Star, August 20, 2022] The Philippines at 7th, recorded an average esports earning per player of $178,045.60 (roughly P9964767.12) with most of the earnings coming from esports title Mobile Legends: Bang Bang. Darryl Yap suggests ways to help the poor: ‘Gawin nyong libre ang mga Catholic private schools’ [Manila Bulletin, August 20, 2022] “If the government schools are made affordable and their level of education standards will be on par with international ones, as more students enrol in government schools, schools run by tax-free religious institutions will lower their tuition fees and increase teacher’s salaries.” Okada retains control of casino-hotel, but gets a scolding from SC [Philippine Daily Inquirer, August 20, 2022] The Supreme Court (SC) upheld a status quo order in April that was used by Japanese gaming tycoon Kazuo Okada to regain physical control of the $2-billion Okada Manila integrated hotel and casino, but directed the Court of Appeals (CA) to gather more evidence of ownership amid conflicting claims from the ousted board controlled by his estranged family. Large taxpayers cool on shift to e-receipts – BIR [The Philippine Star, August 20, 2022] The Bureau of Internal Revenue (BIR) sees a low response to a program which requires large corporations, e-commerce firms and exporters to shift to the digital issuance of invoices and receipts. Borrowers feeling pinch of rising bank lending rates, says BSP [Philippine Daily Inquirer, August 20, 2022] Since May, the Monetary Board has raised the interest rate on money that the BSP borrows overnight from banks by a total of 1.75 percentage points from an all-time low of 2 percent to 3.75 percent. | 2. BIR LIFTS THE SUSPENSION OF FIELD AUDITS & OPERATIONS | Revenue Memorandum Circular (RMC) No. 121-2022, issued on August 22, 2022, lifts the suspension of the field audits and operations covered by RMC No. 77-2022. It may be recalled that under RMC No. 77-2022, all field audits, field operations, or any form of business visitation in the execution of Letters of Authority/Audit Notices (LOAs) or Mission Orders (MOs) by the Bureau of Internal Revenue, including the conduct of TCVD, were suspended as of May 30, 2022. The resumption of field audit shall now be done on a per investigating office basis, upon approval by the Commissioner of Internal Revenue (CIR) through a Memorandum Request. No new Letters of Authority and written orders shall be issued except those enumerated under RMC No. 77-2022 and upon reassignment of revenue examiners. | 3. BIR PRESCRIBES ADDITIONAL GUIDELINES ON PENALTY COMPUTATION FOR IT-BPM RBEs VIOLATIONS REGARDING WFH ARRANGEMENT | Revenue Memorandum Circular (RMC) No. 120-2022, issued on August 18, 2022, prescribes additional guidelines and procedures on the manner of payment of penalty to violations incurred by the Registered Business Enterprises (RBEs) in the Information Technology-Business Process Management (IT-BPM) sector on the conditions prescribe regarding Work-From-Home (WFH) arrangement for the period April 1, 2022 until September 12, 2022. Non-compliance with the prescribed conditions under Fiscal Incentives Regulatory Board (FIRB) Resolution No. 017-22 for at least one (1) day shall result in the suspension of its Income Tax incentives for the month when the violation took place. The RBEs shall pay, as a penalty, the regular Income Tax of either 25% or 20%, whichever is applicable, for the aforesaid month. It may be recalled that FIRB has previously allowed the IT-BPM sector to adapt WFH arrangement where the number of employees under the WFH arrangement shall not exceed 30% of the total workforce of the RBE, while the remaining 70% of the total workforce shall render work or service within the geographical boundaries of the ecozone or Freeport being administered by the Investment Promotion Agencies (IPAs) with which the project or activity is registered. This temporary measure will only last until September 12, 2022, unless extended. | 4. BIR RULINGS DIGEST ON ADOPT-A-SCHOOL PROGRAM TAX BENEFITS, TAX-DEDUCTIBLE REBATES & APIC EXEMPTION FROM CGT & INCOME TAX | TAX INCENTIVES OF ADOPT-A-SCHOOL PROGRAM A Co. is requesting a ruling on the tax incentives under Republic Act (R.A.) No. 8525, or the “Adopt-A-School Act of 1998” covering the donation of wage subsidy to a school in Davao City for the year 2011. In reply, Revenue Regulations (RR) No. 10-2003 implementing tax incentives provisions of R.A. No. 8525, otherwise known as “An Act Establishing an ‘Adopt-A-School Program’ Providing Incentives Therefore and for Other Purposes” which provides that a pre-qualified adopting private entity, which enters into an agreement with a public school, shall be entitled to the following tax incentives: (1) deduction form the gross income of the amount of contribution/donation that were actually, directly and exclusively incurred for the Program, plus an additional amount equivalent to 50% of such contribution/donation; and (2) exemption of the assistance made by the donor from payment of Donor’s Tax. Pursuant to RA No. 8525, to avail the tax incentives, the following must be complied (a) National Secretariat shall endorse to the RDO of the BIR having jurisdiction over the place of business of the adopting private entity; and (b) adopting private entity shall submit application for entitlement. For purposes of A Co’s. entitlement to the full deductibility of the donation from gross income of the donor under Section 34 (H)(2)(a) of the Tax Code of 1997, as amended, A Co. must present a certification from the National Economic Development Authority (NEDA) that the donation to the school is in accordance with the priority programs, projects, and activities included in the current National Priority Plan. Otherwise, donations will be subject to limited deductibility or deductions to an amount not exceeding 10% in the case of an individual and 5% in the case of a corporation of the taxpayer’s taxable net income as computed without the benefit of this deduction. [BIR RULING NO. 344-2022, JUNE 30, 2022] ALL-EVENTS TEST AS CRITERIA IN CLAIMING REBATES AS TAX DEDUCTIBLE N Co. is requesting confirmation on the proper timing of recognition of deductibility of sales rebates granted by N Co. to its customers/distributors for income tax purposes. In reply, Revenue Audit Memorandum Order No. 1-2000 provides that under the accrual method of accounting, expenses not being claimed as deductions by a taxpayer in the current year when they are incurred cannot be claimed as deduction from income for the succeeding year. The US Rules which have persuasive effect on Philippine Law, as specifically provided under MERTENS’ Law of Federal Income Taxation states the for a taxpayer on the accrual method, the question becomes when do the facts present themselves in such a manner that the taxpayer must recognize income or expenses. The accrual of income or expenses is permitted when the all-events test has been met. The all-events test requires: (1) fixing of a right to income or liability to pay; and (2) the availability of the reasonably accurate determination of such income or liability. However, the all-events test does not demand that the amount of income or liability be known absolutely, only that a taxpayer has at his disposal, the information necessary to compute the amount with reasonable accuracy. Accordingly, the sales rebates shall be reported only as deduction by N Co. for tax purposes when the all-events test has been met. Otherwise, N Co. cannot claim the sales rebates as deduction in the same period they were incurred. [BIR RULING NO. 336-2022, JUNE 30, 2022] ADDITIONAL FUNDS RECEIVED BY A CORPORATION FROM A SHAREHOLDER IN THE FORM APIC ARE NOT CONSIDERED PROFITS OR EARNINGS THEREFORE EXEMPT FROM CGT & INCOME TAX OMI is seeking an opinion on whether the transfer of TRLEI shares from TRA to OMI in the form of APIC, without the issuance of additional shares of stock, is deemed a capital investment hence, not subject to capital gains tax or income tax. The transfer by TRA of TRLEI shares to OMI in exchange for OMI’s additional paid-in capital is made pursuant to a global restructuring plan of the T Resorts Group (TRG). In rendering the opinion, several rulings stipulate that a transfer is exempt from income and capital gains taxes when it is made by the true and beneficial owner without monetary compensation and involves no gain or profit. Furthermore, under Section 28 (B)(1) and (5)(c) of the Tax Code states that the additional funds received by a corporation from a shareholder in the form of APIC are not considered profits or earnings derived from the normal operations of the business of the corporation, hence, the same cannot be considered a taxable income subject to income tax. Therefore, the transfer of TRLEI shares from TRA to OMI is not to capital gains tax and income tax. [BIR RULING NO. 101-2022, MARCH 25,2022] | 5. PEZA CLARIFIES ISSUANCE OF CERTIFICATE OF ENTITLEMENT TO INCENTIVES (CETI) UNDER CREATE LAW | PEZA Memorandum Circular (MC) No. 2022-054, issued on August 3, 2022, further clarifies the guidelines in MC No. 2022-025 which provides that PEZA shall no longer issue Certificates of Incentives and 5% GIT. Instead, the Certificate of Entitlement to Incentives (CETI) will be issued in accordance with CREATE Law. a. RBEs shall apply for a CETI prior to filing the Income Tax Return (ITR). The CETI confirms that an RBE’s registered project is entitled to either the Income Tax Holiday (ITH) or the 5% Special Corporate Income Tax (5% SCIT). Each registered activity shall be issued a separate CETI containing the activity's income tax incentive. b. PEZA will issue the CETI upon verification of the RBE's compliance with the terms and conditions of its registration. The performance data for the year covered by the CETI being requested must be complete, and entitlement to ITH of RBE’s project/s still under ITH must have been validated/confirmed for the request for CETI to be processed. c. Request for a CETI should be filed within ninety (90) days prior to the statutory deadline for filing the Annual ITR. | 6. TAX & BUSINESS-RELATED NEWS [AUGUST 15-19] | | BIR chief says will go after big-time online sellers only, seeks help of Shopee, Lazada Why more people are working from home on Fridays BIR to use big-data vs. influencers ‘Boomerang employees’ are going back to the old jobs they quit PH largest private employer Concentrix sustains remarkable growth with 3 new sites launched Help wanted at BIR: Data scientists, cybersecurity experts Lapid wants nursing homes made for all abandoned Pinoy seniors GSIS cool to idea of lowering retirement age in PH Solon seeks excise tax hike on pre-mixed alcoholic beverages Mayor bares issues vs closed QC school Pag-IBIG launches official mobile app DOJ indicts bank officer in $2.1 billion Wirecard fiasco House panel to look into ABS-CBN, TV5 deal Why are rich Chinese consumers selling their Rolexes? Jollibee’s Chickenjoy named ‘best fried chicken in America’ Ressa named member of UN chief’s Internet Governance Forum leadership panel Tulfo grills BIR, BOC for going after online sellers instead of oil smugglers The message is clear, Facebook is dying
| We saw these tax and business-related news on various news sites, and we thought you should see them. DMD is not responsible for the content of these news, and anything written thereon does not necessarily reflect DMD views or opinions. | BIR chief says will go after big-time online sellers only, seeks help of Shopee, Lazada [ABS-CBN News, August 19, 2022] She also revealed that the BIR will hold a summit with Shopee and Lazada in September to discuss a possible partnership to determine the sales of sellers. She said they may be able to tap into the online providers' system. Why more people are working from home on Fridays [BBC News, August 19, 2022] It's no wonder it's the UK's most popular remote working day, with just 13% of staff going into the office, according to a new survey. BIR to use big-data vs. influencers [Manila Bulletin, August 19, 2022] Guillermo’s pronouncement comes after Senator Rafael Tulfo lashed out at the BIR, saying the agency must focus on the “big fish”, like big-time oil smugglers, and not on some small fry if it really wants to collect serious money through taxation. ‘Boomerang employees’ are going back to the old jobs they quit [Yahoo Finance, August 19, 2022] Forget return to office. In this economy, many employees are returning to previous employers, breaking taboos about workplace loyalty and bucking assumptions about the so-called Great Resignation. PH largest private employer Concentrix sustains remarkable growth with 3 new sites launched [Inquirer.Net, August 19, 2022] In a historic first, on August 18 Concentrix Philippines simultaneously launched its 3 newest sites nationwide: Giga Tower in Bridgetowne, Quezon City, One Montage in Cebu Business Park, and Davao Finance Center in Davao Park District. Help wanted at BIR: Data scientists, cybersecurity experts [Philippine Daily Inquirer, August 19, 2022] As it pushes forward with a digital shift to shore up collections, the Bureau of Internal Revenue (BIR) is looking for data scientists and cybersecurity experts to join the country’s biggest tax agency, Commissioner Lilia Guillermo said on Friday (Aug. 19). Palace: Biggest supermarkets in PH commit to sell sugar at P70 per kilo [Inquirer.Net, August 19, 2022] According to the Office of the Press Secretary (OPS), Executive Secretary Victor Rodriguez, through orders from President Ferdinand “Bongbong” Marcos Jr., facilitated a series of talks with the owners of Robinsons Supermarket, SM Supermarket, Puregold Supermarket, and S&R Membership Shopping. Lapid wants nursing homes made for all abandoned Pinoy seniors [Manila Bulletin, August 19, 2022] Lapid filed Senate Bill (SB) No. 1201, or the proposed Homes for Abandoned Seniors Act, as he recognized the contributions of senior citizens to the growth and progress of the country. GSIS cool to idea of lowering retirement age in PH [Philippine Daily Inquirer, August 19, 2022] While the state-run pension fund for government workers and pensioners said it would “comply” in case the bills aimed at bringing down the optional retirement age to 56, from 65 at present, were passed into law, documents flagged risks to the GSIS’s fund life. Solon seeks excise tax hike on pre-mixed alcoholic beverages [ABS-CBN News, August 19, 2022] The bill states that pre-mixed alcoholic beverages included but are not limited to alcopops, alcomixes, coolers, spirit coolers, wine coolers, cruisers, and breezers shall mean flavored beverages sold as being ready to consume with an alcohol content of not more than 10 percent and made by combining an alcoholic product such as fermented liquor, distilled spirit, wine, or other alcoholic beverage with non-alcoholic ingredients such as but not limited to fruit juice, cream, carbonated water, and syrup. Mayor bares issues vs closed QC school [Philippine Daily Inquirer, August 19, 2022] Even before it shut down for good a few days ago, the property of Colegio de San Lorenzo (CDSL) was about to be sold, and violations, such as the school’s lack of building permit, were already up for investigation, Quezon City Mayor Joy Belmonte disclosed on Thursday. Pag-IBIG launches official mobile app [Manila Bulletin, August 19, 2022] Pag-IBIG members can now view their Pag-IBIG Savings and annual dividends, payments history, and loan balance and dues using their mobile phones with the launch of the agency’s official mobile app – the Virtual Pag-IBIG Mobile App – its top officials announced Thursday (18 August). DOJ indicts bank officer in $2.1 billion Wirecard fiasco [Inquirer.Net, August 18, 2022] The Department of Justice (DOJ) has indicted a bank assistant manager in connection with the $2.1 billion “scandal” involving the Germany-based firm Wirecard AG. House panel to look into ABS-CBN, TV5 deal [Manila Bulletin, August 17, 2022] The House Committee on Legislative Franchises has taken notice of SAGIP Party-list Rep. Rodante Marcoleta’s denunciation of the recent deal between the shuttered ABS-CBN and TV5. Why are rich Chinese consumers selling their Rolexes? [South China Morning Post, August 17, 2022] As much of China’s urban population continues to face strict and sporadic Covid-19 lockdowns, the Chinese watch world finds itself affected too. The second-hand market for high end goods has been one of the hardest hit as a result of Beijing’s strict adherence to zero-Covid. With little good news on the horizon for the country’s economy, the prices of second-hand luxury goods have fallen rapidly. Jollibee’s Chickenjoy named ‘best fried chicken in America’ [Manila Bulletin, August 17, 2022] Filipino fast-food giant Jollibee’s Chickenjoy has been named the “best fried chicken in America” by Eater.com, a global food website under Vox Media. Ressa named member of UN chief’s Internet Governance Forum leadership panel [Manila Bulletin, August 17, 2022] United Nations Secretary-General Antonio Guterres on Tuesday, August 16, has appointed 10 high-level and eminent persons to serve on his inaugural Internet Governance Forum (IGF) Leadership Panel, among them Filipino-American journalist Maria Ressa. Tulfo grills BIR, BOC for going after online sellers instead of oil smugglers [Inquirer.Net, August 16, 2022] During the Senate committee on ways and means hearing, Tulfo disclosed that he had received complaints from a content creator and an online seller. They told him that BIR agents had gone to their homes to inquire about their tax payments. The message is clear, Facebook is dying [Manila Bulletin, August 15, 2022] Social media companies come and go (remember Friendster and MySpace?), but your official online presence, your website, remains. Facebook is going the way of Friendster. Now is the time to revisit your online presence strategy before it is too late. | DOWNLOAD OUR PAST EDITIONS & FULL TEXT OF REFERENCES https://weeklytaxupdates.getresponsesite.com/ | |
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