TAX & BUSINESS-RELATED NEWS [AUGUST 2-8] SUPREME COURT CASE DIGEST ON SSS COMPENSATION IF DISEASE IS INCREASED BY THE WORKING CONDITIONS COURT OF TAX APPEALS CASE DIGEST ON THE LIABILITY OF LRT TO CALOOCAN LOCAL BUSINESS TAX SEC LEGAL OPINION DIGEST ON USING TRADENAME & CORPORATE NAME DOF OPINION DIGEST ON EXCISE TAX EXEMPTION OF ROLEX BIR RULINGS DIGEST
| 1. TAX & BUSINESS-RELATED NEWS [AUGUST 2-8] | | DITO files complaint vs Globe, Smart with PH Competition Commission Insurance premiums for disaster risk to be updated Telco launches partnership with animated BTS characters TinyTAN Ayala Land delays P 10B in land acquisition deals Converge CEO backtracks on Starlink, says PH needs to be careful on SpaceX entry Solar PH set to build world’s largest solar baseload project San Miguel unit eyes putting up more poultry farms across PH Bill seeks removal of compulsory retirement age Mineski, Viber join forces for social minigame platform Bill seeks fixed salaries for bus drivers CEB upgrades Tacloban, Dumaguete, Butuan flights with bigger planes Grab PH enters motorcycle taxi business with Move It purchase Ex-Aboitiz lawyer new ERC chief Sandigan orders arrest of SBMA head Blinken leads awarding of offshore wind study grant to PH clean energy firm ALI profit up 34% on mall, hotel biz vibrance; residential sales down CHED thanks First Lady Liza Marcos for teaching in a state university PLDT plans to shut down its 3G network by 2023 TV5, ABS-CBN venture in ‘closing stages,’ says MVP Data theft, APT and ransomware attacks top the list of concerns of most business execs in SEA OPS: Only Palace order recognized amid PEZA leadership row Climate body welcomes new law for eco-friendly businesses Where's Boris? UK's PM on leave as economic crisis deepens 2 banks eye Islamic banking units Palace settles PEZA leadership mix-up
| 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. | DITO files complaint vs Globe, Smart with PH Competition Commission [ABS-CBN News, August 8, 2022] DITO Telecommunity on Monday said it has filed 2 complaints against Globe Telecom and PLDT-Smart with the Philippine Competition Commission accusing the two telcos of "abuse of their dominant position." Insurance premiums for disaster risk to be updated [Inquirer Mobile, August 8, 2022] Through Circular Letter No. 2022-34 issued last July 14, the Insurance Commission approved a revised rating structure for all catastrophe risk policies, which all nonlife insurance companies and intermediaries are ordered to adopt.The circular provides that the minimum insurance premium—which is currently set at 0.1 percent of the sum insured for earthquake risks and 0.05 percent for typhoon and flood risks—shall be diversified not only in terms of rate but also in terms of construction types and risk zones. Telco launches partnership with animated BTS characters [ABS-CBN News, August 8, 2022] Local telco Smart Communications has launched a new partnership with TinyTAN, the group of animated characters created from the seven members of Korean pop icons BTS. Ayala Land delays P 10B in land acquisition deals [Inquirer Mobile, August 8, 2022] From an estimated P90 billion, the builder is now targeting to spend about P80 billion in 2022, according to Augusto Cesar Bengzon, chief finance officer of Ayala Land. Converge CEO backtracks on Starlink, says PH needs to be careful on SpaceX entry [ABS-CBN News, August 8, 2022] Despite the current easing in foreign restrictions on telco ownership, regulations should be followed to ensure that the state's frequencies are handled properly, Uy said during a forum organized by the Makati Business Club. Solar PH set to build world’s largest solar baseload project [Inquirer Mobile, August 8, 2022] The Solar Philippines group of Leandro Leviste is building the world’s first large-scale solar-battery baseload project after securing a bidding advantage to supply distribution giant Manila Electric Co. (Meralco) with up to 200 megawatts of 24/7 capacity. San Miguel unit eyes putting up more poultry farms across PH [ABS-CBN News, August 8, 2022] Priority areas cited are Pangasinan, Bataan, Quezon, Cebu, Davao and Sorsogon, SMFB said in a disclosure to the stock exchange. Bill seeks removal of compulsory retirement age [The Philippine Star, August 7, 2022] Saying that many of the elderly are still able to work, Senior Citizen party-list Rep. Rodolfo Ordanes Jr. has filed a bill seeking to repeal the compulsory retirement age of 65 years. Mineski, Viber join forces for social minigame platform [ABS-CBN News, August 7, 2022] Gaming giant Mineski has teamed up with Viber to develop a social mingame platform which you can play off Viber’s application. Bill seeks fixed salaries for bus drivers [The Philippine Star, August 7, 2022] Fixed salaries for bus drivers, social welfare benefits for public utility vehicle (PUV) drivers and the protection of rights of food delivery riders and drivers are measures that the Senate would be looking into. CEB upgrades Tacloban, Dumaguete, Butuan flights with bigger planes [Manila Bulletin, August 6, 2022] Cebu Pacific (CEB) upgraded its flights to Tacloban, Dumaguete and Butuan with bigger A320NEO aircraft to satisfy higher demand due to relaxed restrictions and pent-up demand for travel. Grab PH enters motorcycle taxi business with Move It purchase [Inquirer Mobile, August 6, 2022] Grab Philippines is beefing up its ride-hailing services portfolio with the recent acquisition of Move It, paving the way for the super app operator’s foray into the motorcycle taxi business. Ex-Aboitiz lawyer new ERC chief [Manila Times, August 6, 2022] RESIDENT Ferdinand "Bongbong" Marcos Jr. has appointed lawyer Monalisa Dimalanta as the new chairman of the Energy Regulatory Commission (ERC), Malacañang announced on Friday. Sandigan orders arrest of SBMA head [Inquirer Mobile, August 6, 2022] The Philippine's anti-graft court has ordered the arrest of former Olongapo City mayor Rolen Paulino, who is now chairman and administrator of the Subic Bay Metropolitan Authority (SBMA), after it found probable cause to hold in trial in connection with the long-term lease of city government properties to SM Prime Holdings Inc. (SMPHI). Blinken leads awarding of offshore wind study grant to PH clean energy firm [ABS-CBN News, August 6, 2022] Blinken witnessed the signing of an agreement between the US Trade and Development Agency (USTDA) and Aboitiz Renewables Inc. awarding a grant to the local firm. ALI profit up 34% on mall, hotel biz vibrance; residential sales down [Inquirer Mobile, August 6, 2022] Property giant Ayala Land Inc. (ALI) saw profits in the first semester of 2022 jump 34 percent to P8.1 billion, propelled by the recovery of malls and hotels apart from a surge in demand for commercial lots. CHED thanks First Lady Liza Marcos for teaching in a state university [Manila Bulletin, August 6, 2022] Commission on Higher Education (CHED) Chairman Prospero De Vera III expressed gratitude to First Lady Liza Araneta-Marcos for joining the West Visayas State University (WVSU) as one of its faculty members under the College of Law. PLDT plans to shutdown its 3G network by 2023 [Yugatech, August 5, 2022] The shutdown of 3G is considered to be an opportunity ‘to optimize our network’ according to PLDT chief finance officer Annabelle Chua, citing an information that there is now only less than 5% of devices are using 3G network. TV5, ABS-CBN venture in ‘closing stages,’ says MVP [Inquirer Mobile, August 5, 2022] On the sidelines of a media briefing, Pangilinan also told reporters that the media firms were looking to form a joint venture where TV5 will own 65 percent with the remainder to be held by the Lopez-led network. Data theft, APT and ransomware attacks top the list of concerns of most business execs in SEA [Manila Bulletin, August 5, 2022] Done globally with 100 executives from SEA, Kaspersky’s study titled, “How business executives perceive ransomware threat” conducted last April, revealed the heightened awareness of business executives in Southeast Asia (SEA) about the sophisticated risks online. Data theft, alongside Advanced Persistent Threat (APT) attacks and ransomware infections, are the highest on their list of concerns. OPS: Only Palace order recognized amid PEZA leadership row [ABS-CBN News, August 5, 2022] Asked for clarification on the matter, Cruz-Angeles said the Palace will strictly implement its Memorandum Circular (MC) No. 1 which declared as vacant the positions of coterminous appointments of former President Rodrigo Duterte, and MC no. 3, which extended the authority of OICs until December 31, 2022. Climate body welcomes new law for eco-friendly businesses [The Philippine Star, August 5, 2022] RA 11898 amends the Ecological Solid Waste Management Act of 2000 (RA 9003) by introducing provisions on EPR, defined as “environmental policy approach and practice that requires producers to be environmentally responsible throughout the life cycle of a product, especially its post-consumer or end-of-life stage.” Where's Boris? UK's PM on leave as economic crisis deepens [ABS-CBN News, August 5, 2022] A senior British minister admitted Friday "I don't know where Boris is" as the premier checked out on holiday, in a week that saw the Bank of England warn a year-long recession is coming. 2 banks eye Islamic banking units [Manila Bulletin, August 4, 2022] Republic Act No. 11439 or the Islamic Banking Law was enacted in 2019. But it was only this year that the BSP started the creation of the Shari’ah Supervisory Board (SSB) in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) to promote Islamic finance and Islamic banking in the region. Palace settles PEZA leadership mix-up [The Manila Times, August 2, 2022] "I have never officially ordered any turnover of my post and have never vacated my position as the Director General. I will continue performing the duties and functions of my office until my replacement has been appointed pursuant to the PEZA Charter," Plaza said. | 2. SC CASE DIGEST ON SSS COMPENSATION IF DISEASE IS INCREASED BY THE WORKING CONDITIONS | [IF THE ILLNESS IS A NON-OCCUPATIONAL DISEASE, PROOF MUST BE SHOWN THAT THE RISK OF CONTRACTING THE DISEASE IS INCREASED BY THE WORKING CONDITIONS] [STRICT RULES OF EVIDENCE ARE NOT APPLICABLE IN CLAIMS FOR COMPENSATION] [NON-OCCUPATIONAL DESEASE IS NOT COMPENSABLE UNLESS AGGRAVATED BY WORKING CONDITIONS] [AN EMPLOYEES’ COMPENSATION LAW OR A SOCIAL LEGISLATION SHOULD BE CONSTRUED IN FAVOR OF LABOR] Petitioner Social Security System (SSS) filed a Petition for Review on Certiorari challenging the Court of Appeals (CA)’s Decision and Resolution which reversed the Employees Compensation Commission (ECC)’s denial of Respondent Violeta Simacas’ claim for death benefits under Presidential Decree (P.D.) No. 626, as amended. Petitioner argued that since prostate cancer is not considered an occupational disease, Respondent is obligated to prove that the work of Irnido (husband of Respondent) increased the risk of him contracting the disease. It maintained that the absence of medical information demonstrating that Irnido’s working conditions caused his prostate cancer renders Respondent’s claim of work connection untenable. In ruling, the Court held that in establishing compensability, the claimant need only present substantial proof that the nature of the deceased’s work or working conditions increased the risk of them contracting prostate cancer. A review of records revealed that Respondent proved that Irnido’s working conditions increased the risk of him contracting prostate cancer. It is not unlikely that Irnido’s work as a helper in assisting the welder and machinist in cutting steel materials increased the risk of him contracting the disease. This probability suffices to warrant the grant of the claimed benefits. Consequently, the Petition was DENIED. [SOCIAL SECURITY SYSTEM VS. VIOLETA A. SIMACAS, G.R. NO. 217866, JUNE 20, 2022, UPLOADED JULY 12, 2022] | 3. CTA CASE DIGEST ON THE LIABILITY OF LRT TO CALOOCAN LOCAL BUSINESS TAX | [AN ORDINANCE INCOMPATIBLE WITH ANY EXISTING LAW OR STATUTE IS ULTRA VIRES; HENCE, NULL & VOID] [SECTION 311 OF THE CALOOCAN UPDATED REVENUE CODE IS INVALID DUE TO INCOMPATIBILITY WITH THE LGC] [COMMON CARRIERS SHALL BE EXEMPT FROM LOCAL BUSINESS TAXES UNDER SECTION 113 OF THE LGC] Petitioner City of Caloocan filed a Petition for Review seeking reversal of the Court in Division’s earlier Decision and Resolution ordering the Petitioner to desist from further assessing the Respondent Light Rail Manila Corporation for local business taxes on its gross receipts. Petitioner argued that the Petition for Prohibition and Mandamus was improper since Section 195 of the Local Government Code (LGC) provides the Respondent a plain, adequate, and speedy remedy to challenge the assessment made by the City Treasurer's Office. Likewise, the Respondent is liable to the local business tax under the provisions of Section 311 of the Caloocan Updated Revenue Code. In ruling, the Court held that the granting of the Petition for Issuance of a Writ of Prohibition is proper as the record shows that pursuant to Sec 2, Rule 65 of the Rules of Court, all the elements for the issuance of a Writ of Prohibition are present. Furthermore, Section 311 of Caloocan Updated Revenue Code should be struck down as ultra vires as it is contrary to the provisions of the Local Government Code (LGC) based on two (2) grounds: (1) Section 195 of the LGC does not require payment of the assessed business tax before a taxpayer can file a protest; and (2) it shortens the sixty (60)-day period to thirty (30) days within which to file a protest. On the propriety of the assessment, the Respondent has satisfied all the requirements for it to be considered a common carrier pursuant to Article 1732 of the New Civil Code; thus, it is exempt from paying the local business taxes under Section 113 (j) of the LGC. Hence, the Petition for Review was DENIED for lack of merit, and the earlier Decision and Resolution were AFFIRMED. Consequently, the assessments were CANCELLED and SET ASIDE, and the Petitioner was ENJOINED and PROHIBITED from collecting the said amount to the Respondent. [CITY OF CALOOCAN & HON. ANALIZA E. MENDIOLA, IN HER CAPACITY AS THE CITY TREASURER OF CALOOCAN CITY VS. LIGHT RAIL MANILA CORPORATION, CTA EN BANC NO. 2446, JUNE 30, 2022] | 4. SEC LEGAL OPINION DIGEST ON USING TRADENAME & CORPORATE NAME | [A CORPORATION MAY ASSUME A TRADE NAME OTHER THAN ITS LEGAL/CORPORATE NAME] [TRADE NAME MAY BE USED INDEPENDENTLY WITHOUT THE CORPORATE NAME] [CORPORATE NAME & TRADE NAME MAY BE USED INTERCHANGEABLY UNLESS MANDATED & RESTRICTED BY REGULATORY AGENCIES] RS Co., a religious organization, is seeking confirmation whether the trade name is different from and did not amend the registered corporate name of the religious society. In reply, Item No. 4 of SEC Memorandum Circular (MC) No. 13, Series of 2019 emphasized that a business or trade name that is different from the corporate or partnership name shall be indicated in the Articles of the Corporation/Partnership and company may have more than one trade name. Thus, it was opined in SEC-OGC Opinion No. 11-39 that a corporation may still use the corporate name in all its regular business transactions as it remains the corporation's official name. Likewise, trade names can be used independently without the registered corporation name; hence, the trade name and corporation name may be used interchangeably in the conduct of the business unless a regulatory agency mandated, limited, and restricted the use of the trade name or corporate name. [SEC OFFICE OF THE GENERAL COUNSEL LEGAL OPINION NO. 22-04, MARCH 29, 2022] | 5. DOF OPINION DIGEST ON EXCISE TAX EXEMPTION OF ROLEX | WRISTWATCHES MADE OF PRECIOUS METALS ARE NOT SUBJECT TO 20% EXCISE TAXES R Co. is requesting the review of a BIR Ruling, which ruled that Rolex wristwatches are subject to excise tax. R Co. premised that the 20% excise tax may not be imposed on the wristwatches they imported on the basis that there appears a doubt on whether Section 150(a) of the 1997 Tax Code, as amended, covers the same. In ruling, the DOF ruled that wristwatches and clocks are not considered non-essential goods under Section 150(a) of the same code. A perusal of how the Tax Code defined non-essential goods was by providing an enumeration of goods deemed falling within its category or classification. It is clear that when Section 163 of Executive Order No. 273 was carried forward as Section 150 of the Tax Code for purposes of imposing excise tax at 20%, the enumeration therein did not contemplate the inclusion of wristwatches and clocks. Moreover, the mere fact that the tax on semi-essential goods such as watches was repealed does not automatically mean that those goods classified therein would change the characterization from semi-essential to non-essential. DOF believes that it is the function of the object that principally determines whether it is non-essential or semi-essential. A watch is a semi-essential device which allows the wearer to keep track of time. Jewelry, on the other hand, is solely for personal adornment and, thus, is classified as non-essential. Hence, the request for review was GRANTED. [DEPARTMENT OF FINANCE OPINION NO. 012-2022, JUNE 29, 2022] | 6. BIR RULINGS DIGEST ALLOWING TAXPAYER TO SHORTEN OR LENGTHEN THE USEFUL LIFE OF THE PROPERTY, VAT-EXEMPT SALE OF EDUCATIONAL MATERIALS & TAXABILITY & EXEMPTION OF JOINT VENTURE | THE LAW ALLOWS THE TAXPAYER TO LENGTHEN OR SHORTEN THE USEFUL LIFE OF THE PROPERTY IN THE LIGHT OF THE PREVAILING FACTUAL CONSIDERATIONS & SUBJECT TO THE APPROVAL OF THE BIR C Co. is seeking confirmation on the proposed change in accounting treatment for bottles and cases in claiming depreciation, both for tax and financial accounting purposes. Based on the old policy, bottles and cases were recorded as inventory (30%) and property, plant, and equipment (70%). However, with the change of ownership, C Co. needs to align with the accounting treatment such that 100% of bottles and cases shall now be treated as fixed assets. Consequently, C Co. proposes to change the accounting treatment leading to the revision of estimated useful life resulting in the change of depreciation expense. To date, C Co. is still collecting the deposit value of the bottles for every sale of products in Returnable Glass Bottles (RGB). The deposit value forms part of Accounts Receivables from customers and Container Deposit Liability accounts, subject to a reversal once glass bottles are returned. For every unreturned bottle, the customer shall pay the corresponding deposit value to C Co. the amount covered by the customer’s deposit shall be deducted from the depreciation expense recorded in C Co.’s books amortized over the useful life. In reply, the Bureau cited Section 34(F) of the 1997 Tax Code, as amended, which confirmed the proposed change in accounting treatment for bottles and cases in claiming depreciation, both for tax and financial accounting purposes, effective January 1, 2017, provided, however, that any prior period adjustments shall be subject to deficiency income tax, interest, and penalties if warranted. Further, the amounts collected for unreturned bottles must be reported as income and must be deducted from the depreciation expense claimed by C Co. [BIR RULING NO. 353-2022, JULY 19, 2022] THE SALE OF EDUCATIONAL MATERIALS OR PRODUCTS IS EXEMPT FROM VAT M Co. is seeking confirmation that the sale of educational materials or products, both in printed and digital/electronic formats, is exempt from Value-Added Tax (VAT). In reply, the BIR cited Section 12 of Republic Act (RA) No. 8047, otherwise known as “Book Publishing Industry Development Act,” which provides that books, magazines, periodicals, and newspapers, including book publishing and printing, as well as its distributions and circulation, shall be exempt from VAT. Moreover, Section 109(1)(R) of the 1997 Tax Code, as amended, and Section 4.109-1(B)(r) of Revenue Regulations (RR) No. 16-2005, as amended, provide that its sale, importation, printing or publication of books, and any newspaper, magazine, journal, review bulletin, or any such educational reading material covered by the UNESCO Agreement on the Importation of Educational, Scientific and Cultural Materials, including the digital or electronic format thereof, provided that the materials enumerated herein are not devoted principally to the publication of paid advertisements; and are compliant with the requirements set forth by the National Book Development Board (NBDB), shall be exempt from 12% VAT. [BIR RULING NO. 322-2022, JUNE 29, 2022] TAX-EXEMPTION OF JOINT VENTURE FORMED FOR CONSTRUCTION PROJECTS TC-DM Joint Venture (TC-DM JV) is seeking an opinion on the taxation of JV between TC and DM in constructing Package 01: Elevated Structures, 6 Stations and Depot for the North-South Commuter Railway Project (“JV Project”). As represented, TC-DM JV is an unincorporated JV formed to undertake the JV Project. It entered a contract with the government through the Department of Transportation (DOTr) for the construction and completion of the aforementioned project. The Philippine Contractors Accreditation Board (PCAB) issued a Special Contractor’s License for the project and the two (2) contractors. TC-DM JV was registered with the BIR as a regular corporation liable for corporate income tax. In reply, the Bureau cited Section 22 (B) of the 1997 Tax Code, as amended, which excludes JV or consortium formed for construction projects as a taxable corporation. Likewise, Section 2.57.5 (5) of Revenue Regulations (RR) No. 2-98, as amended, and Section 3 of RR No. 10-2012 provide that income payments made to JV or consortium formed for construction projects shall be exempt from the Creditable Withholding Tax (CWT) provided it meets the following conditions: (1) licensed local contractors pool resources; (2) local contractors are engaged in construction business; and (3) the JV itself is duly licensed by PCAB of the Department of Trade and Industry (DTI). Further TC-DM JV, being exempt from corporate income tax, is not required to file quarterly and final adjustment returns. However, co-venturers are taxable on their respective shares of the net income from the project and shall be subject to Creditable Withholding Tax (CWT). On the part of the government, DOTr as the executing agency shall assume fiscal levies and taxes imposed on the government on the Japanese companies operating as suppliers, contractors, consultants, and employees on their income concerning the implementation of the project. [BIR RULING NO. 317-2022, JUNE 28, 2022] | DOWNLOAD OUR PAST EDITIONS & FULL TEXT OF REFERENCES https://weeklytaxupdates.getresponsesite.com/ | |
|
|
