TAX & BUSINESS-RELATED NEWS [JANUARY 23-30] 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
| 1. TAX & BUSINESS-RELATED NEWS [JANUARY 23-30] | | 1. DOLE to issue revised IRR for Service Charge Law 2. Imported cars rotting in Cagayan freeport 3. Bring back free night bus rides for workers in Cebu City – councilor 4. P5-B loss leads to decision to pull plug on CNN PH 5. 1st PH uni in the cloud: Mapua steps up tech infra 6. Gokongweis dream big, launch ‘The Jewel’ to match Marina Bay Sands, Twin Towers, Taipei 101 7. PH-based crypto firm expands across 4 continents 8. CebPac starts Bulgaria Air operations to Davao 9. DBP grants P 2-B loan for Palawan infra 10. Rama backs P246-billion mega project in SRP 11. CA junks P1.4 billion refund order vs Pampanga power firm 12. Reminder to seniors: Discounts total 32% 13. Philippine salary continues to increase in 2024 —survey 14. Ride-hailing newbie suspended amid price-haggling brouhaha 15. Time to scrap foreign ownership limits, says Philippines’ chief economist 16. Builder prepares replacement for Makati subway, says Mayor Binay 17. February 26 sign-off: Lopez family pulling the plug on Skycable after more than 30 years 18. Recto pushes for new tax rates on passive income 19. Director Erik Matti calls top restaurant Toyo Eatery 'too gimmicky' 20. DTI eyes requiring retailers to put up sign on 'shrinkflation' 21. PPA awards P500 million contract for Sorsogon port renovation 22. P4-b port project seen spawning factories in Misamis Oriental 23. Nescafé product flagged by FDA imported by other parties – Nestlé PH 24. Indigenous rights clash with solar power project in Ilocos Norte 25. Phoenix stops buying imported oil | 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. | DOLE to issue revised IRR for Service Charge Law [The Philippine Star, January 30, 2024] Curada said they incorporated in the new IRR recommendations from labor and employers’ groups to clearly define the covered employees and the extent of their entitlement to the pooled service charge. Imported cars rotting in Cagayan freeport [Philippine Daily Inquirer, January 29, 2024] Cagayan Economic Zone Authority (Ceza) administrator Katrina Ponce Enrile said the right-hand drive cars came from different countries and most were forfeited between 2014 and 2015. Ponce-Enrile, the daughter of former senator and now chief presidential legal counsel Juan Ponce-Enrile, was appointed by President Marcos as administrator of Ceza in May last year. Bring back free night bus rides for workers in Cebu City – councilor [Cebu Daily News, January 28, 2024] Recognizing that there may be people, not just in IT and BPO, working from 12 a.m. to 6 a.m., Archival suggests bringing back the free bus service for everyone during these hours. P5-B loss leads to decision to pull plug on CNN PH [Philippine Daily Inquirer, January 28, 2024] CNN Philippines is going off the air nearly nine years after heating up local broadcasting competition, as its franchise holder decided to plug financial losses that have ballooned to more than P5 billion. 1st PH uni in the cloud: Mapua steps up tech infra [Inquirer Mobile, January 28, 2024] Amid the technological revolution in education, Mapúa University has become the first university in the Philippines to have a privately managed cloud infrastructure after partnering with Altair, a global leader in computational science and artificial intelligence (AI). Gokongweis dream big, launch ‘The Jewel’ to match Marina Bay Sands, Twin Towers, Taipei 101 [Rappler, January 27, 2024] With the Philippines’ nightingale Lani Misalucha singing Rihanna’s “Diamonds” and with no less than National Artist for Music Ryan Cayabyab conducting the Manila Philharmonic Orchestra, Robinsons Land Corporation (RLC) launched The Jewel project, situated on a 2.5-hectare property at the corner of EDSA and Pioneer Street in Mandaluyong City that used to house the now-demolished, two-decades-old Forum Robinsons mall. PH-based crypto firm expands across 4 continents [Inquirer Mobile, January 27, 2024] Local cryptocurrency exchange Coins.ph, continues with its global rollout as it taps into European and Latin American markets where digital assets are well-received by investors. CebPac starts Bulgaria Air operations to Davao [SunStar Davao, January 27, 2024] Cebu Pacific, the Philippines' budget airline, has started operating Bulgaria Air flights to and from Davao, offering every Filipino more opportunities to explore the stunning landscapes and vibrant culture of the King City of the South. DBP grants P 2-B loan for Palawan infra [Inquirer Mobile, January 27, 2024] In a statement on Friday, DBP president and CEO Michael de Jesus said the loan was granted through the bank’s lending facility dubbed “Bank’s Assistance for Economic and Social Development (Asenso).” Rama backs P246-billion mega project in SRP [Cebu Daily News, January 27, 2024] On January 16, Mandaraig Infrabuild Corp. (MIC) announced its submission of an unsolicited proposal to assist the city in implementing P246 billion worth of infrastructure projects at SRP. CA junks P1.4 billion refund order vs Pampanga power firm [Philippine Daily Inquirer, January 27, 2024] The Court of Appeals (CA) reversed and set aside the Energy Regulatory Commission’s (ERC) order directing the San Fernando Electric Light and Power Co. Inc. (Sfelapco) to refund a total of P1.42 billion to its customers. Reminder to seniors: Discounts total 32% [Philippine Daily Inquirer, January 26, 2024] Senior citizens should demand a 32-percent discount when buying food and other basic needs to fully avail themselves of the benefits of Republic Act No. 9994, or the Expanded Senior Citizens Act, a party list lawmaker representing their sector said on Thursday. Philippine salary continues to increase in 2024 —survey [The Philippine Star, January 26, 2024] According to results gathered from 500 companies by Willis Towers Watson (WTW), a multinational company providing insurance services, employees in the country will have a median salary increase of 5.7 percent by the coming year. Ride-hailing newbie suspended amid price-haggling brouhaha [Inquirer Mobile, January 26, 2024] Ride-hailing app InDrive has temporarily halted operations after receiving suspension order from the Land Transportation Franchising and Regulatory Board (LTFRB) due to alleged violation in fare matrix, but is working with the government to comply with regulations. Time to scrap foreign ownership limits, says Philippines’ chief economist [Rappler, January 26, 2024] The NEDA secretary said the constitutional restrictions on foreign ownership are “impediments” that cause big investments to flow to neighboring Asian countries instead. Builder prepares replacement for Makati subway, says Mayor Binay [Inquirer Mobile, January 26, 2024] The company that was cued to build the P200-billion Makati Subway, derailed due to the territorial dispute with Taguig City, is working at “reinventing” the project since an underground train is no longer viable, according to Makati Mayor Abigail Binay. February 26 sign-off: Lopez family pulling the plug on Skycable after more than 30 years [Bilyonaryo, January 26, 2024] The Lopez family-owned cable and broadband firm announced to its subscribers that it has started its transition into a dedicated internet service provider in anticipation of and pursuant to the closing conditions of the PLDT-SkyCable acquisition deal. Recto pushes for new tax rates on passive income [ABS-CBN News, January 26, 2024] Under the proposed Passive Income and Financial Intermediary Taxation Act (PIFITA) the tax rate on interest income will be gradually reduced from 20 percent to 19 percent in 2024, 18 percent in 2025, 17 percent in 2026, 16 percent in 2027, and 15 percent in 2028. Director Erik Matti calls top restaurant Toyo Eatery 'too gimmicky' [The Philippine Star, January 26, 2024] Matti gave his review and a few suggestions on an Instagram post, which instantly went viral. He started with a disclaimer that he does not usually review restaurants, but he made an exception for Toyo Eatery since it was listed among the best in the country. DTI eyes requiring retailers to put up sign on 'shrinkflation' [ABS-CBN News, January 25, 2024] According to Nograles, it is the right of consumers to know the changes in the size and weight of the products they buy. PPA awards P500 million contract for Sorsogon port renovation [The Philippine Star, January 25, 2024] Khan Kon Chi submitted a bid of P487.8 million for the project, edging the tenders of fellow developers SB Construction Corp. (P488.65 million) and Sunwest Inc. (P488.66 million). P4-b port project seen spawning factories in Misamis Oriental [Inquirer Mobile, January 24, 2024] Various manufacturing businesses and related industries are expected to sprout around the P4-billion Lagonglong Port in Misamis Oriental, which its developer Amadi MGT Terminals Inc. intends to complete by March 2025. Nescafé product flagged by FDA imported by other parties – Nestlé PH [CNN Philippines, January 24, 2024] Nestlé said the “NESCAFE LATTE 3 in 1 Premix Coffee – Hazelnut” referred to in a recent FDA advisory was imported into the Philippines by other parties without authorization from the regulatory agency, which is why it is not registered locally. Indigenous rights clash with solar power project in Ilocos Norte [Rappler, January 23, 2024] However, unlike previous years, he had to halt before the steel gates and guard house of Energy Logics Philippines, Inc. (ELPI) on the old dirt road. The part of their land where he planned to go was within the company’s solar power facility. Phoenix stops buying imported oil [The Philippine Star, January 23, 2024] In a disclosure to the Philippine Stock Exchange, Phoenix said that it has stopped purchasing imported petroleum in favor of domestic fuel since March 2023 to mitigate the impact of global price swings. | 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. 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. 2. The source of income is determined by the location of the business activity rather than the disbursement or receipt of funds. 3. 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. 4. 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. | | [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] | DOWNLOAD OUR PAST EDITIONS & FULL TEXT OF REFERENCES https://weeklytaxupdates.getresponsesite.com/ | |
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