TAX & BUSINESS-RELATED NEWS [JULY 17-24] BIR CIRCULARIZES THE NEW DAILY MINIMUM WAGE RATES IN NCR EFFECTIVE JULY 16, 2023 BIR RULINGS ON HOMEOWNERS' ASSOCIATION, VAT-EXEMPT IMPORTATION OF CARGO VESSEL & VAT-EXEMPT SOCIALIZED HOUSING PROJECTS CTA CASE ON THE EXTENT OF LGU POWER TO TAX
| 1. TAX & BUSINESS-RELATED NEWS [JULY 17-24] | | 1. Megaworld to open 1,500-room ‘PH’s biggest hotel’ before end of 2023 2. Dennis Uy’s embattled resort seeks fresh funding 3. GT Capital looks for opportunity in power sector 4. PSE hits back at Holcim 5. RPMD survey shows top performing NCR mayors, representatives 6. Laguesma admits possible worker displacement due to artificial intelligence 7. Retired tax court justice sworn in as JBC member 8. J&J must pay $18.8 million to California cancer patient in baby powder suit 9. Manila Water to spend P7.84 billion for new Laguna treatment plant 10. First PH agricultural import inspection hub rising in Bulacan 11. Basic Energy Corp says to add nearshore wind project in Balayan 12. DoubleDragon offers golden visa incentive 13. Spanish court opens new tax probe into singer Shakira 14. Foreigner med school grads can get license, practice in PH 15. SC orders Makati to pay P1.26B in deficiency taxes 16. UP becomes 1st PH university to craft guidelines for ‘responsible’ AI use 17. CHED eyes scholarships for master's degrees in nursing 18. SEC denies Dennis Uy’s request to add asset sale on agenda of stockholders’ meeting 19. Batangas eyes regional fish port, housing for gov’t employees 20. PPA to open first cruise port in October 21. BIR raids more than 700 stores over unpaid excise taxes 22. NEDA OKs private takeover of Laguindingan Airport 23. Tax bureau eyes boost from continued reforms 24. ICTSI bags deal to privatize South African terminal 25. Pag-IBIG housing loans made more affordable 26. UnionBank deploys dollar-dispensing ATMs 27. Phinma Corp. buys assets from parent firm 28. PEZA prequalifies 8 ecozone projects worth P 33B 29. Nissan Philippines and Department of Tourism launch ‘Drive Pinas’ initiative 30. Revilla vows to continue pushing for P150-legislated wage hike | 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. | Megaworld to open 1,500-room ‘PH’s biggest hotel’ before end of 2023 [GMA News Online, July 24, 2023] In a disclosure to the Philippine Stock Exchange, Megaworld said its Grand Westside Hotel is situated inside its 31-hectare Westside City township in the Entertainment City in Parañaque City. Dennis Uy’s embattled resort seeks fresh funding [The Philippine Star, July 24, 2023] PH Resorts Group Holdings Inc., the listed gaming and hospitality company of Davao-based businessman Dennis Uy, is seeking to increase its authorized capital stock by P7 billion to give it more leeway to issue new shares and raise fresh capital. GT Capital looks for opportunity in power sector [The Philippine Star, July 24, 2023] The listed holding company of the Ty Group exited the power business several years ago when it sold a majority stake in Global Business Power Corp. (GBPC), a major power player in Visayas. PSE hits back at Holcim [The Philippine Star, July 24, 2023] The Philippine Stock Exchange (PSE) has refused to take the blame for the tax treatment faced by Holcim Philippines in relation to its trading suspension and the tender offer of its major shareholder Holderfin B.V. RPMD survey shows top performing NCR mayors, representatives [Manila Bulletin, July 23, 2023] The RP-Mission and Development Foundation Inc. (RPMD) released on Sunday, July 23, the results of its "Boses ng Bayan" poll showing the top performing Metro Manila mayors and legislators following their initial year in office. Laguesma admits possible worker displacement due to artificial intelligence [GMA News Online, July 23, 2023] Labor Secretary Bienvenido Laguesma on Sunday said there is a looming displacement of workers in the country amid the emergence of artificial intelligence (AI) technology. Retired tax court justice sworn in as JBC member [The Manila Times, July 23, 2023] RETIRED associate justice of the Court of Tax Appeals (CTA) Erlinda Piñera Uy has been named as the new member of the Judicial and Bar Council (JBC), representing the Integrated Bar of the Philippines. J&J must pay $18.8 million to California cancer patient in baby powder suit [interaksyon, July 22, 2023] Johnson & Johnson’s JNJ.N must pay $18.8 million to a California man who said he developed cancer from exposure to its baby powder, a jury decided on Tuesday, a setback for the company as it seeks to settle thousands of similar cases over its talc-based products in U.S. bankruptcy court. Manila Water to spend P7.84 billion for new Laguna treatment plant [The Philippine Star, July 22, 2023] Earlier, Manila Water awarded the design and construction contract to the consortium composed of Spanish infrastructure firm Acciona, Prime Metro BMD Corp. and Santa Clara International. First PH agricultural import inspection hub rising in Bulacan [Inquirer Mobile, July 21, 2023] The government and the private sector partnered to establish a cold examination facility in agriculture (Cefa) in this part of Bulacan, a first of its kind in the country. Basic Energy Corp says to add nearshore wind project in Balayan [ABS-CBN News, July 21, 2023] "Under the said service contract, the Company is appointed and constituted by the DOE to have an exclusive right to explore, develop and utilize the wind energy sources with the 2,835 hectares contracted area," the company said. DoubleDragon offers golden visa incentive [The Manila Times, July 21, 2023] PROPERTY firm DoubleDragon Corp. expects to generate sales of around 143.3 million euros, or P8.8 billion, from its Hotel101 Madrid project by dangling a golden visa incentive to potential investors. Spanish court opens new tax probe into singer Shakira [ABS-CBN News, July 21, 2023] The 46-year-old "Hips Don't Lie" singer is already due to stand trial at the end of the year in Spain for allegedly failing to pay 14.5 million euros ($16.3 million) in taxes on income earned between 2012 and 2014. Foreigner med school grads can get license, practice in PH [Philippine Daily Inquirer, July 21, 2023] The PRC has affirmed its certification issued last March 30 that allowed foreign nationals who have acquired medical degrees in the country to practice here if they manage to pass the Physician Licensure Examination (PLE). Ayala launches electric 'big bike' assembly line in Laguna [ABS-CBN News, July 21, 2023] Ayala Corp on Friday announced that its electronics manufacturing unit IMI has launched a manufacturing facility for electric "big bikes" in Laguna together with US electric motorbike maker Zero Motorcycles. SC orders Makati to pay P1.26B in deficiency taxes [GMA News Online, July 20, 2023] In 2009, the CTA Second Division dismissed the petition filed by Makati seeking to nullify the Final Decision on Disputed Assessment issued by the BIR UP becomes 1st PH university to craft guidelines for ‘responsible’ AI use [Manila Bulletin, July 20, 2023] As the first university to launch a doctoral program in artificial intelligence (AI) in the country, the University of the Philippines (UP) is in the process of formulating guidelines for "responsible" AI use. CHED eyes scholarships for master's degrees in nursing [ABS-CBN News, July 20, 2023] The Commission on Higher Education (CHED) on Thursday said it is planning to offer scholarships for nurses who want to pursue a master's degree, to fill up teaching positions in the industry. SEC denies Dennis Uy’s request to add asset sale on agenda of stockholders’ meeting [Rappler, July 20, 2023] Dennis Uy’s embattled resort developer, PH Resorts Group Holdings Incorporated, was required by regulators to disclose to the investing public that its plan to take up the sale of assets of its subsidiaries in its stockholders meeting next week has been denied. Batangas eyes regional fish port, housing for gov’t employees [Philippine News Agency, July 20, 2023] The fish trading hub will be built in Bauan town since it is close to Balayan Bay. “As we know, it is a deep-water port area so we have many industries and docks in the town of Bauan (and adjacent towns of) San Pascual up to Mabini,” he added. PPA to open first cruise port in October [The Manila Times, July 19, 2023] PPA General Manager Jay Daniel Santiago said the first dedicated foreign cruise terminal, the Port of Dona Helene in Surigao del Norte, was set to be inaugurated and opened this October. BIR raids more than 700 stores over unpaid excise taxes [ABS-CBN News, July 19, 2023] "Cigarettes, vape, alcohol products, sweetened beverages, petroleum products, mineral products, automobiles, and other excisable articles are being closely monitored," Lumagui said. NEDA OKs private takeover of Laguindingan Airport [GMA News Online, July 19, 2023] Under the previous administration, Aboitiz InfraCapital Inc. bagged original proponent status for its unsolicited proposal to take over the Laguindingan Airport in Misamis Oriental. Tax bureau eyes boost from continued reforms [The Manila Times, July 19, 2023] By itself, and also with outside help, the BIR is working to address concerns such as corruption in the bureau, red tape and even taxpayer behavior, Commissioner Romeo Lumagui Jr. told The Manila Times in an interview. ICTSI bags deal to privatize South African terminal [The Philippine Star, July 19, 2023] The International Container Terminal Services Inc. (ICTSI) has won the contract to develop and operate the second pier of the Port of Durban, the largest of its kind in Africa. Pag-IBIG housing loans made more affordable [The Manila Times, July 19, 2023] THE Pag-IBIG Fund has lowered interest rates on its housing loans in line with the government's efforts to make homeownership more affordable for Filipinos. UnionBank deploys dollar-dispensing ATMs [ABS-CBN News, July 19, 2023] The first machine was deployed in their headquarters in Pasig City, followed by ATMs in Greenhills and Cebu Wealth branches, the bank said. These machines are able to dispense $100 denominations for UnionBank customers with US dollar accounts with no withdrawal fees, it added. Phinma Corp. buys assets from parent firm [The Manila Times, July 19, 2023] Phinma Corp. said it purchased some 7.7 million shares in Phinma Microtel Hotels Inc. at P2.76 each for P21.19 million. With this, it now owns 51 percent of Phinma Microtel. PEZA prequalifies 8 ecozone projects worth P 33B [Inquirer Mobile, July 19, 2023] The largest among these projects is the P27.18-billion manufacturing special economic zone dubbed the North Cebu Economic Zone in Medellin, Cebu. Nissan Philippines and Department of Tourism launch ‘Drive Pinas’ initiative [Top Gear Phiilippines, July 18, 2023] In line with this, Nissan Philippines Incorporated (NPI) and the Department of Tourism (DOT) renewed their partnership to promote local tourism with a new initiative: Drive Pinas. It’s a simple slogan that doesn’t force people to do anything. It just presents an idea and lets the reader’s imagination take over. Revilla vows to continue pushing for P150-legislated wage hike [Manila Bulletin, July 17, 2023] Revilla has filed Senate Bill 2018 early this year, together with Senate President Juan Miguel “Migz” F. Zubiri who filed his own version, aiming to grant a P150 wage increase to all employees of the private sector regardless of the region or sector they are employed. | 2. BIR CIRCULARIZES THE NEW DAILY MINIMUM WAGE RATES IN NCR EFFECTIVE JULY 16, 2023 | Revenue Memorandum Circular (RMC) No. 76-2023 issued on July 13, 2023, circularizes the New Daily Minimum Wage Rates in certain sectors/industries under the National Capital Region (NCR) as prescribed by Wage Order No. NCR-24, which was approved on June 26, 2023, and published at The Philippine Star on June 30, 2023. The Wager Order shall take effect after fifteen (15) days from its publication, or on July 16, 2023. | 3. BIR RULINGS ON HOMEOWNERS' ASSOCIATION, VAT-EXEMPT IMPORTATION OF CARGO VESSEL & VAT-EXEMPT SOCIALIZED HOUSING PROJECTS | EXTENT OF TAX EXEMPTION OF HOMEOWNERS’ ASSOCIATION P Homeowners Association, a non-stock, and non-profit residential homeowners’ association, is requesting a tax exemption pursuant to the Republic Act (R.A.) No. 9904 or “Magna Carta for Homeowners and Homeowners’ Associations” in reference to Revenue Memorandum Circular (RMC) No. 9-2013 which clarifies the taxability of association dues, membership fees, and other assessments/charges collected by Homeowners’ Associations. As represented, it is a duly registered Homeowners' Association with the Housing and Land Use Regulatory Board (HLURB); that its financial statements show the delivery of basic community services under Section 3(d) of R.A. No. 9904; and that the Local Government Unit (LGU) having jurisdiction of the Homeowners Association has issued a Certificate that it does not provide material or financial assistance to the Association in the maintenance of its subdivision since it is a private subdivision and the allocation of funds for private subdivisions is contrary to law. In ruling, income derived from association dues, membership fees, other assessments, and charges collected in a purely reimbursement basis and rentals of facilities is exempt from income tax, Value-Added Tax (VAT), or Percentage Tax, whichever is applicable; provided, that such income and dues shall be used for the cleanliness, safety, security, and other basic services needed by the members, including the maintenance of the facilities of their respective subdivisions or villages. However, it shall be subject to the applicable internal revenue taxes on its other income from trade, business, or other activities. [BIR RULING NO. 076-2023, JUNE 09, 2023] VAT-EXEMPT IMPORTATION OF CARGO VESSEL RSL, a corporation engaged in the domestic shipping business duly accredited by Maritime Industry Authority (MARINA), is requesting Value-Added Tax (VAT) Exemption on its importation of one unit deck cargo vessel pursuant to Section 109 (1)(T) of the 1997 Tax Code, as amended. In reply, Section 109 (1)(T) of the 1997 Tax Code, as amended, provides that the importation of cargo vessels destined for domestic transport operations shall be exempt from VAT. In relation, Section 4.109-1 (B)(1)(t) of the Revenue Regulations (RR) No. 16-2005, as amended by RR No. 15-2015, provides that for importation to be VAT-exempt, the importation of cargo vessel shall be subject to the requirements on restriction on vessel importation and mandatory vessel retirement program of MARINA. As noted, the imported deck cargo vessel has been issued by MARINA with the required. Hence, the importation of the said vessel is deemed compliant with the requirements on restriction on vessel importation and mandatory vessel retirement program of MARINA, thus, VAT exempt. [BIR RULING NO. 075-2023, JUNE 9, 2023] EXTENT OF VAT EXEMPTION OF SOCIALIZED HOUSING PROJECTS A Co. is requesting an exemption from payment of taxes in connection with the construction of Mariano Marcos State University IP Student Dormitory Project. In reply, socialized housing is defined as housing projects and programs covering homes and lots or home lots only undertaken by the government or the private sector for the underprivileged and homeless citizens which shall include sites and services development, long-term financing, and other benefits pursuant to Section 20 of the Republic Act (R.A.) No. 7279, as amended by R.A. No. 10884 (Balanced Housing Development Program Amendments). Here, the construction of A Co. of the subject dormitory is outside the definition of “socialized housing” in relation to the tax incentives under Section 10 of the R.A. No. 7279 since the grant of exemption is limited and with the view to reduce the cost of housing units for the benefit of the underprivileged and homeless. Consequently, the request for tax exemption from project-related income tax and Value-Added Tax (VAT) is DENIED. [BIR RULING NO. 030-2023, APRIL 12, 2023] | 4. CTA CASE ON THE EXTENT OF LGU POWER TO TAX | IT WILL BE DIFFICULT FOR LGUs TO ENJOY GENUINE & MEANINGFUL LOCAL AUTONOMY IF THEY COULD INCREASE ONLY UP TO 10% OF THE TAX RATES UNDER THE LOCAL GOVERNMENT CODE (LGC) DURING ITS ENTIRE EXISTENCE Petitioner San Roque Power Corporation filed a Petition for Review seeking to annul the earlier Decision and Resolution denying its claim for a refund or tax credit of the excess Local Business Tax (LBT). Petitioner insisted that Section 191 and Article 281 of the IRR limit the LGU’s authority to increase LBT at a rate not exceeding 10% of the rate imposed in Section 143 of the LGC; that the 10% cap under Section 191 is a cap on aggregate adjustments; and the LGU’s aggregate adjustments cannot go beyond 10%. On the other hand, the Respondent Municipality of San Manuel, Pangasinan countered that the pronouncements of the Supreme Court (SC) in the De Lima and Mindanao Shopping cases would negate the allegation of the Petitioner that the adjustment referred to in Section 191 is a cumulative or aggregate adjustment of the tax rates and that the adjustment be reckoned on the rates fixed under the LGC. In ruling, the Court finds merit on the Respondent’s arguments. In the De Lima case, the SC explicitly declared that the option to increase the tax rates under the LGC arises every five (5) years. When the LGU decides to take that option, the basis for the adjustment or increase would be the prevailing tax rate. In the Mindanao Shopping case, the SC clarified that the maximum 10% adjustment under Section 191 of the LGC is based on the adjusted tax rate. Given the foregoing jurisprudential pronouncement and the 10% threshold under Section 191, Respondent San Manuel could have increased the LBT rate to 66% of 1% of gross sales or receipts. Still, it only imposed 65% of 1%. Indeed, Respondent San Manuel did not violate Section 191 when it passed Section 2A.02 (b) and (c) of the 2018 Revenue Code, increasing the LBT rate from 60% of 1% to 65% of 1% in excess of Php 2 Million gross sales or receipts on “wholesalers, distributors, or dealers in any article of commerce of whatever kind or nature” and on “contractors, and other independent contractors,” based on the prevailing or adjusted tax rate. Hence, the Petitioner is not entitled to refund the alleged excess LBT paid. Moreover, having established that the elements of litis pendentia are present, the Court ruled that Petitioner is guilty of forum shopping. Consequently, the Petition was DENIED. [SAN ROQUE POWER CORPORATION VS. MUNICIPALITY OF SAN MANUEL, PANGASINAN & ELIZABETH T. CORPUZ IN HER CAPACITY AS MUNICIPAL TREASURER OF SAN MANUEL, PANGASINAN, CTA AC NO. 256, MAY 10, 2023] | DOWNLOAD OUR PAST EDITIONS & FULL TEXT OF REFERENCES https://weeklytaxupdates.getresponsesite.com/ | |
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