TAX & BUSINESS-RELATED NEWS [DECEMBER 31-JANUARY3] COURT OF TAX APPEALS CASES DIGEST ON LEGAL PERSONALITY OF ROHQ FOR TAX PURPOSES & PROOF OF ZERO-RATING TAX & BUSINESS-RELATED NEWS [DECEMBER 29-30]
| | | 1. TAX & BUSINESS-RELATED NEWS [DECEMBER 31-JANUARY 3] | AirAsia says ready to adapt to Alert Level 3 in Metro Manila PH manufacturing ends 2021 with growth, but Omicron still a threat in 2022 AT&T and Verizon rebuff US request for new 5G delay In-person school resumption to cut productivity losses Furniture giant IKEA raises prices as supply chain woes persist BIR eyes increasing epayments by 50 percent in 2022 Singapore economy rebounds from virus-induced recession Haus Talk bets on mid-range housing demand to boost P700M IPO Gov’t open to discuss PAL’s financing option Higher taxes on alcohol, cigarettes now in effect Cathay Pacific sacks two aircrew for breaching COVID-19 rules PAL exits US bankruptcy, after US court OKs reorganization plan New resort, casino to open in Cebu in 2022 More hot money enters Philippines P234B capital raised from PSE in 2021- a new high Brighter prospects for emerging markets seen in ’22 PH manufacturers await DTI decision on CARS program Big-ticket hospital PPPs up for bids in 2022 Privatization revenues down 32% to P 260.2M as of end November Tesla recalls nearly half a million cars over safety issues Ayala invests $237M in Myanmar Sanction hit Huawei says revenues down 29 percent this year Jollibee sets up shop in downtown Chicago
| 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. | AirAsia says ready to adapt to Alert Level 3 in Metro Manila [ABS-CBN News, January 3, 2022] AirAsia Philippines is ready to adapt to new government guidelines following the surge in COVID-19 cases and the tightening of restrictions to Alert Level 3, a company official said Monday. PH manufacturing ends 2021 with growth, but Omicron still a threat in 2022 [Inquirer Mobile, January 3, 2022] The Philippines’ manufacturing sector ended 2021 with a nine-month high purchasing managers’ index (PMI) of 51.8 in December, following month-on-month output growth unseen in previous months. AT&T and Verizon rebuff US request for new 5G delay [ABS-CBN News, January 3, 2022] The US introduction of the high-speed mobile broadband technology had been set for Dec. 5, but was delayed to Jan. 5 after aerospace giants Airbus and Boeing raised concerns that the new system might interfere with the devices planes use to measure altitude. In-person school resumption to cut productivity losses [Inquirer Mobile, January 3, 2022] President Duterte’s chief economic manager has urged a safe return to in-person classes in areas at low risk from COVID-19 infections to reduce long-term scarring effects inflicted by the prolonged pandemic not only on learning but the economy as a whole. Furniture giant IKEA raises prices as supply chain woes persist [ABS-CBN News, January 3, 2022] STOCKHOLM - The world's biggest furniture brand IKEA is raising prices by an average of 9 percent as it faces increasing costs in transport and raw materials, the owner of most of its stores worldwide earlier said. BIR eyes increasing epayments by 50 percent in 2022 [ABS-CBN News, January 3, 2022] "BIR targets to increase ePayment transactions by 50 percent in 2022 as modernization efforts aim to improve voluntary compliance," it said in a statement. Singapore economy rebounds from virus-induced recession [ABS-CBN News, January 3, 2022] Singapore's economy grew 7.2 percent last year, rebounding from its worst recession since independence sparked by the coronavirus pandemic, government data showed Monday. Haus Talk bets on mid-range housing demand to boost P700M IPO [ABS-CBN News, January 3, 2022] Mid-range residential housing developer Haus Talk Inc on Monday said demand remains high despite the COVID-19 pandemic as it prepares to list on the Philippine Stock Exchange. Gov’t open to discuss PAL’s financing option [Manila Bulletin, January 2, 2022] After exiting from the bankruptcy protection (Chapter 11) proceedings, the Department of Finance (DOF) said the government is ready to discuss any financing request coming from flag-carrier Philippine Airlines (PAL). Higher taxes on alcohol, cigarettes now in effect [ABS-CBN News, January 1, 2022] Under Republic Act No. 11467, which was signed by President Rodrigo Duterte in January last year, excise taxes on cigarettes will increase to P55 per pack this year, compared to P50 per pack in 2021. Cathay Pacific sacks two aircrew for breaching COVID-19 rules [Inquirer.Net, January 1, 2022] Hong Kong flagship carrier Cathay Pacific Airways said on Saturday two of its aircrew who have tested positive for the Omicron variant were sacked for breaching medical surveillance regulations. PAL exits US bankruptcy, after US court OKs reorganization plan [ABS-CBN News, January 1, 2022] Philippine Airlines has said it has emerged from bankruptcy after a US court approved its plan to slash up to $2 billion in debt and obtain additional capital. New resort, casino to open in Cebu in 2022 [ABS-CBN News, January 1, 2022] Dubbed Nustar, the property is the flagship project of Universal Hotels and Resorts, which is owned by the Gokongwei group. More hot money enters Philippines [BusinessWorld, December 31, 2021] The top five investor economies were the United Kingdom, United States, Luxembourg, Hong Kong and Singapore, accounting almost three-quarters of the investments, the BSP said. P234B capital raised from PSE in 2021- a new high [Inquirer Mobile, December 31, 2021] The eight new names that have debuted on the stock exchange are the following: AllDay Marts, MREIT Inc., RL Commercial REIT Inc., Filinvest REIT Corp., Monde Nissin Corp., DDMP REIT Inc., Medilines Distributors Inc. and Solar Philippines Nueva Ecija Corp. Brighter prospects for emerging markets seen in ’22 [Inquirer Mobile, December 31, 2021] After ending another challenging year amid the prolonged COVID-19 pandemic, 2022 prospects seem brighter for emerging markets, with digitalization and decarbonization rising as the key themes to watch for. PH manufacturers await DTI decision on CARS program [Inquirer Mobile, December 31, 2021] Toyota Motor Philippines (TMP) said it was still waiting for the Department of Trade and Industry (DTI) to advise it about the future of an ambitious local car production program that was started under the Aquino administration, hoping the decision would be released as soon as possible. Big-ticket hospital PPPs up for bids in 2022 [Inquirer Mobile, December 31, 2021] Big-ticket health-care public-private partnership (PPP) projects are coming in 2022, paving the way for the construction of needed hospital capacity in Metro Manila. Privatization revenues down 32% to P 260.2M as of end November [Inquirer Mobile, December 31, 2021] From January to November, the Department of Finance (DOF)-attached Privatization and Management Office (PMO) collected P182.2 million from other income, P62.6 million from lease rental, and P15.4 million from sales. Tesla recalls nearly half a million cars over safety issues [ABS-CBN News, December 31, 2021] Tesla Inc is recalling more than 475,000 of its Model 3 and Model S electric cars to address rearview camera and trunk issues that increase the risk of crashing, the U.S. road safety regulator said. Ayala invests $237M in Myanmar [Inquirer Mobile, December 31, 2021] Ayala announced on Friday an agreement to acquire a total of 20 percent stake in Singapore Securities Exchange (SGX)-listed Yoma Strategic Holdings Inc. (YSH) and another 20 percent interest in First Myanmar Investment Public Co. Ltd. (FMI). Sanction hit Huawei says revenues down 29 percent this year [ABS-CBN News, December 31, 2021] Chinese telecom giant Huawei said on Friday its annual revenue had fallen by nearly a third from the previous year, as it continued to be weighed down by US sanctions that have hit its smartphone sales. Jollibee sets up shop in downtown Chicago [Inquirer Mobile, December 31, 2021] The opening of the new Jollibee store will mark the brand’s 57th store in the US and its third location in the state of Illinois. The new branch is located at 116 S. Michigan Avenue - just steps away from some of Chicago’s most-visited destinations such as the Millennium Park and “The Bean.” | 2. CTA CASES DIGEST ON LEGAL PERSONALITY OF ROHQ WITH ITS MOTHER COMPANY FOR TAX PURPOSES & PROOF OF ZERO-RATING | ROHQ AND ITS MOTHER COMPANY MAY NOT BE TREATED AS A SEPARATE ENTITY Petitioner Commissioner of Internal Revenue (CIR) filed a Petition for Review seeking to reverse the earlier decision of the Court in Division partially granting the refund in favor of the Respondent MSCI Hong Kong Limited relative to its unutilized and excess input value-added tax (VAT) attributable to zero-rated sales of services rendered to foreign entities not engaged in business in the Philippines. Petitioner claimed that Respondent failed to prove such; and even insinuated that one of its recipients is the parent company. After going over the records of the case, the Court echoed the findings of the Court in Division that the Respondent sufficiently proved that its clients, MSCI, Inc. and IPD UK are not engaged in business within the Philippines. Accordingly, Petitioner relied on the Institutional Shareholder Services, Inc. Philippine ROHQ v. CIR (ISSI Case) which ruled that the Regional Operating Headquarter (ROHQ) and its mother company may not be treated as a separate entity in reference to MSCI, Inc. and MSCI Hong Kong Limited. However, it was elucidated that the Respondent is the Philippine Branch, and to be precise, the ROHQ of MSCI Hong Kong Limited, a Hong Kong based entity, not a subsidiary of MSCI, Inc., which was established under the laws of Delaware, USA – making it inapplicable to the case at bar. Considering the foregoing, Respondent is entitled to an input VAT refund. Therefore, Petition was DENIED for lack of merit, and earlier Decision and Resolution were AFFIRMED. [COMMISSIONER OF INTERNAL REVENUE VS. MSCI HONG KONG LIMITED, CTA EN BANC CASE NO. 2258, DECEMBER 15, 2021] WHEN WORDS OF A STATUTE ARE CLEAR AND UNAMBIGUOUS, COURTS CANNOT DEVIATE FROM THE TEXT OF LAW AND RESORT TO INTERPRETATION Petitioner Commissioner of Internal Revenue (CIR) filed a Petition for Review seeking reversal of the earlier Decision and Resolution partially granting Respondent Chevron Holdings, Inc. claim for refund representing unutilized input value-added tax (VAT) allegedly generated from its purchases vis-à-vis zero-rated sales for the 1st and 2nd quarters of 2015. Petitioner argued that input tax must come from purchases of goods that form part of the finished product or those that are directly used in the chain of production. In ruling, the Court cited Section 110(A) of the 1997 Tax Code, that for an input tax to be creditable, it must be evidenced by a VAT invoice or official receipt issued in accordance with Section 113 of the same Code. Accordingly, to be entitled to a claim for refund, the following requisites must be met: (1) taxpayer is VAT-registered; (2) refund claim is filed within the prescriptive period; (3) there must be zero-rated or effectively zero-rated sales; (4) input taxes were incurred or paid; (5) attributable to zero-rated or effectively zero-rated sales; and (6) they were not applied against any output VAT. The Court echoed the findings of the Court in Division that Respondent was able to comply with the foregoing requisites relative to the amount previously granted. Further, contrary to the Petitioner’s stance, it was explicated that when words of a statute are unambiguous, no deviation from and interpretation of such shall be made, and where the law does not distinguish, we ought not to. Following the discussion, Respondent has valid creditable input tax and is entitled to its refund. The Petition, therefore, was DENIED for lack of merit, and the earlier Decision and Resolution were AFFIRMED. [COMMISSIONER OF INTERNAL REVENUE VS. CHEVRON HOLDINGS, INC. CTA EN BANC CASE NO. 2355, DECEMBER 9, 2021] ESTABLISHING NRFC STATUS OF A CLIENT IS FATAL IN CLAIMING FOR REFUND ATTRIBUTABLE TO ZERO-RATED SALES Commissioner of Internal Revenue (CIR) and Deutsche Knowledge Services, PTE. LTD (DKS) filed Petitions for Review praying for the reversal and setting aside of the earlier Decision and Resolution of the Court in Division partially granting the refund or issuance of tax credit certificate (TCC) for the unutilized excess input value-added tax (VAT) attributable to zero-rated sales of DKS to non-resident foreign corporations for the taxable year 2012. The sole issue to be resolved is whether DKS is entitled to the partial grant of its claim for refund. In ruling, the Court held that for purposes of zero-rating under Section 108(B)(2) of the Tax Code, the claimant must establish that a client is a Non-Resident Foreign Corporation (NRFC). Corollary, claimant must show sufficient proof that (1) it was established under the laws of another country; and (2) it is not engaged in trade or business in the Philippines. The Court in Division had correctly excluded the amount attributable to clients whose SEC Certificate of Non-Registration of the Company and Authenticated Articles of Association and/or Certificates of Registration/Good Standing/Incorporation were sufficiently provided. For disallowed input VAT due to lapses in the official receipts issued by the supplier of DKS, it was elucidated that due diligence on its part should have been observed. In the present Petitions, CIR failed to prove that the Assailed Decision of the Court was attended by grave abuse of discretion; hence, must remain undisturbed. Consequently, both Petitions were DENIED for lack of merit; and the earlier Decision and Resolution were AFFIRMED. [DEUTSCHE KNOWLEDGE SERVICES, PTE. LTD. VS. COMMISSIONER OF INTERNAL REVENUE, COMMISSIONER OF INTERNAL REVENUE VS. DEUTSCHE KNOWLEDGE SERVICES, PTE. LTD., CTA EN BANC CASE NOS. 2248 & 2252, NOVEMBER 8, 2021] | 3. TAX & BUSINESS-RELATED NEWS [DECEMBER 29-30] | | PhilHealth to private hospitals: Tell us your issues DOH: People who skip quarantine put others at risk of COVID-19, face penalties BSP approves 2nd phase amendments to Foreign Currency Deposit System SC asked to move 2022 bar exams Royal Caribbean bookings take a hit as Omicron fears worsen Avoid cruises even if vaccinated, CDC tells Americans DOE order probe in anomalous unloading of oil products in GenSan PH misses Jan. 1 RCEP effectivity Open-pit mines can be operated safely, restored: stakeholder Property prices rebound in Q3 Century Properties going back to local bond market to borrow P3B Banks dragged into NEA, Benguet power co-op feud GNPower to boost Luzon grid electricity supply Marikina gives shoemakers tax relief Agri output still affected two years since ASF outbreak Forgone revenues from reduced pork import tariffs hit P3.6B ADBI floats idea of ocean tourism in PH Housing loans surged 51% in Q3 Elon Musk's SpaceX raises over $337 million in fresh funding BOC slaps antidumping duty on Vietnamese cement Figaro cuts budget for stores, omits acquisitions in IPO plan QC businesses to get triple tax reliefs next year, says Belmonte Bangko Sentral issues moratorium on InstaPay, PESONet fee hikes No need for extra scrutiny of PH transactions, says gov’t Apple puts India iPhone plant 'on probation' after mass food poisoning Euro banknote artist fears redesign could revive rivalries Vietnam's growth slides to new 30-year low
| 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. | PhilHealth to private hospitals: Tell us your issues [ABS-CBN News, December 30, 2021] “I hope he (De Grano) tells us exactly what else we have to discuss, para (so) we can sit on the table again, and find out what we can do regarding their issues,” Domingo told ABS-CBN News in a phone interview. DOH: People who skip quarantine put others at risk of COVID-19, face penalties [Philippine Star, December 30, 2021] The Health Department added that non-adherence to COVID-19 guidelines and policies constitutes a violation of Republic Act No. 11332 or the Mandatory Reporting of Notifiable Diseases and Health Events of Public Health Concern Act. BSP approves 2nd phase amendments to Foreign Currency Deposit System [ABS-CBN News, December 30, 2021] Under the second phase amendments, banks will only have to notify the BSP of their intent to engage in expanded Foreign Currency Deposit Unit (FCDU) operations, the BSP said in a statement. SC asked to move 2022 bar exams [The Manila Times, December 30, 2021] In a letter addressed to Associate Justice and 2021/2022 Bar Exams Chairman Marvic Leonen, IBP-Cebu Chapter president Atty. Cheryl Palacao-Condat told the high court that Typhoon "Odette" has fortuitously affected most of the bar candidates in the Visayas and Northern Mindanao. Royal Caribbean bookings take a hit as Omicron fears worsen [ABS-CBN News, December 30, 2021] Royal Caribbean Group said on Thursday it was grappling with a drop in bookings and a rise in cancellations as COVID-19 cases surge in the United States, driven by the Omicron variant. Avoid cruises even if vaccinated, CDC tells Americans [BBC News, December 30, 2021] On Thursday, the CDC said the virus can quickly spread in the confined spaces of a ship and that the likelihood of infection is high. DOE order probe in anomalous unloading of oil products in GenSan [Manila Bulletin, December 30, 2021] The Department of Energy has ordered an investigation into the anomalous unloading of more than five million liters of petroleum products worth P250 million into the oil depot owned by Seaoil Philippines in Barangay Bawing this city. PH misses Jan. 1 RCEP effectivity [Manila Bulletin, December 30, 2021] The Philippines has missed the January 1, 2022 effectivity of the Regional Comprehensive Economic Partnership (RCEP) as Senate went into recess without concurring the ratification of the mega trade deal. Open-pit mines can be operated safely, restored: stakeholder [ABS-CBN News, December 30, 2021] There is a safe way of operating open-pit mines and restoring the land after use, Philippine Chamber of Mines Vice President for Communications Rocky Dimaculangan said Thursday. Property prices rebound in Q3 [The Philippine Star, December 30, 2021] Property prices finally rebounded in the third quarter after slumping for two straight quarters, buoyed by the sharp increase in the prices of condominium units and townhouses as demand heightened amid the continued reopening of the economy. Century Properties going back to local bond market to borrow P3B [Inquirer Mobile, December 30, 2021] Antonio family-led Century Properties Group Inc. (CPG) plans to return to the local bond market with an offering of as much as P3 billion worth of debt securities, locking in low-cost funds to retire costlier debt and fund expansion programs. Banks dragged into NEA, Benguet power co-op feud [Philippine Daily Inquirer, December 30, 2021] The Benguet Electric Cooperative (Beneco) on Tuesday asked a regional trial court to restrain the Philippine National Bank (PNB) from releasing its members’ funds after PNB’s Baguio branch allegedly allowed the “unauthorized withdrawal” of more than P2.7 million. GNPower to boost Luzon grid electricity supply [Inquirer Mobile, December 30, 2021] “With the issuance of a certificate of compliance to GNPower, it can now commercially operate and inject power to the Luzon grid that will provide the much needed additional power supply to meet the increasing demand for power this holiday season and up to the election period,” ERC chair and CEO Agnes Devanadera said. Marikina gives shoemakers tax relief [Philippine Daily Inquirer, December 30, 2021] Under City Ordinance No. 110, manufacturers of footwear and leather goods who will get business licenses will have their taxes waived upon application. Agri output still affected two years since ASF outbreak [Inquirer Mobile, December 30, 2021] Adriano said the industry has lost around 3 to 4 million hogs due to the deadly disease. Forgone revenues from reduced pork import tariffs hit P3.6B [Inquirer Mobile, December 30, 2021] Forgone revenues from decreased pork tariff aimed at attracting more imports and increasing domestic supply reached P3.6 billion as of mid-December, the Department of Finance (DOF) said on Wednesday. ADBI floats idea of ocean tourism in PH [Inquirer Mobile, December 30, 2021] “As a component of the blue economy, ocean tourism is an important contributor to the growth and development of the Philippines. As an archipelagic nation, tourism activities in coastline areas, as well as in offshore zones, contribute to revenues for cities and municipalities, job generation and skills development for local residents, and business opportunities. These can lead to improvements in the quality of life of communities,” Tokyo-based ADBI said in a Dec. 28 report titled “Developing the Philippine Blue Economy: Opportunities and Challenges in the Ocean Tourism Sector.” Housing loans surged 51% in Q3 [Inquirer Mobile, December 30, 2021] The number of housing loans surged by 51 percent year-on-year in the third quarter amid consumer expectations of economic recovery while home prices rose 6.3 percent, according to Bangko Sentral ng Pilipinas (BSP). Elon Musk's SpaceX raises over $337 million in fresh funding [ABS-CBN News, December 30, 2021] SpaceX, which counts Alphabet Inc and Fidelity Investments among its investors, hit $100 billion in valuation following a secondary share sale in October, according to CNBC. It had raised about $1.16 billion in equity financing in April. BOC slaps antidumping duty on Vietnamese cement [Inquirer Mobile, December 30, 2021] Customs Commissioner Rey Leonardo Guerrero said in a Dec. 20 memorandum that the temporary additional tariff—in the form of a cash bond—will be imposed for four months after the Department of Trade and Industry’s (DTI) administrative order took effect last Nov. 29. In particular, the DTI order said ordinary Portland cement type 1 and blended cement type 1P from Vietnam were being dumped—sold at lower prices abroad compared to normal value—in the Philippines. Figaro cuts budget for stores, omits acquisitions in IPO plan [BusinessWorld, December 29, 2021] FIGARO Coffee Group, Inc. omitted plans to use a portion of net proceeds for potential acquisitions and decreased the budget for store launches and renovations, following the downsizing of its initial public offering (IPO) to P767.39 million. QC businesses to get triple tax reliefs next year, says Belmonte [Inquirer.Net, December 29, 2021] One of the three, City Ordinance SP-3067, S-2021 extends the deadline for the payment of business taxes, fees, and charges without surcharges or interest from January 20, 2022 (First Quarter) and March 20, 2022 (Second Quarter) to July 20, 2022. Bangko Sentral issues moratorium on InstaPay, PESONet fee hikes [ABS-CBN News, December 29, 2021] "Under the MB-approved issuance, said fees cannot be increased until pricing standards or guidelines have been issued by the Bangko Sentral ng Pilipinas (BSP) or once the volume of digital payments reaches 40 percent, whichever is earlier," the BSP. No need for extra scrutiny of PH transactions, says gov’t [Inquirer Mobile, December 29, 2021] Foreign firms and individuals need not avoid transactions nor adopt more stringent measures when dealing with Filipino companies and nationals despite the country having been re-listed to the Financial Action Task Force’s (FATF) so-called “gray list” of countries that fall short on efforts against dirty money. Apple puts India iPhone plant 'on probation' after mass food poisoning [ABS-CBN News, December 29, 2021] Apple said Wednesday it has put the Indian plant of its main supplier "on probation" after a mass food poisoning and protests over workers’ living conditions. Euro banknote artist fears redesign could revive rivalries [Inquirer Mobile, December 29, 2021] The challenge for Kalina was coming up with illustrations all Europeans could identify with, without stirring nationalist sentiments or appearing to favor one eurozone nation over another. Vietnam's growth slides to new 30-year low [ABS-CBN News, December 29, 2021] Vietnam reported economic growth for 2021 of just 2.58 percent on Wednesday, beating a 30-year low set last year as the pandemic continues to take a toll. | Thank you and best regards, WILLIE B. SANTIAGO Lawyer & Certified Public Accountant Tax & Corporate Services Division TL : (+632) 8 894-5892 Loc. 703 Website: www.dmdcpa.com.ph Don Jacinto Building De la Rosa corner Salcedo Streets Legaspi Village, Makati City 1229 Philippines | |
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