TAX & BUSINESS-RELATED NEWS [MARCH 1-7] BIR CLARIFIES TIN VERIFICATION BEING REQUIRED BY EMPLOYERS FROM NEWLY HIRED EMPLOYEES BIR REMINDS ALL AUTHORIZED AGENT BANKS (AABs) TO ACCEPT TAX RETURNS/PAYMENTS OF INTERNAL REVENUE TAXES ON APRIL 6 & APRIL 13, 2024 BIR RULINGS ON THE TAXABILITY OF MANPOWER AGENCY VS SECURITY AGENCY & PDR SHARES
| 1. TAX & BUSINESS-RELATED NEWS [MARCH 1-7] | | 1. SEC delays decision on Binance ban 2. SSS offers loan condonation program 3. Finance dept pushes 'refined' mining taxes 4. SC junks petition challenging legality of POGOs 5. DBP renews push to amend corporate charter, hike capital stock to P300B 6. DOTr: Expropriation of property for rail projects a last resort 7. DMMMSU thanks lawmaker for helping put up medical school 8. PSA: Here Are The Top Employers For Fresh Grads In 2024 9. Baguio eyes tourist tax to pay for sewage upkeep 10. Optus is fined $1.5 million for 'alarming' safety breach 11. GMAC to build and operate cold storage facility in Davao 12. Lawmaker pushes for tax exemption on menstrual products 13. SC orders Metro Manila LGUs to cease traffic receipts, confiscate driver's licenses 14. Court settles Parañaque homeowners dispute 15. DOJ sues firm for tax evasion 16. Singapore tightens rules for hiring foreign professionals 17. BSP to review 3 percent rate cap on credit card transactions 18. Wildflour secures P 840-M investment ahead of planned IPO 19. Iloilo City eyes strait for reclamation plan 20. Cebu’s power struggle: Race to secure energy future to avoid billions in economic losses 21. They are two of the largest banks in the US. Surprisingly announced that they will close (and there may be more banks) 22. SEC to share beneficial ownership data to gov't agencies 23. PCC raises thresholds for mandatory merger review 24. SC disbars ex-Customs director over sale of confiscated vehicle
| 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. | SEC delays decision on Binance ban [Philippine Daily Inquirer, March 7, 2024] A potential Philippine government ban on global crypto trading giant Binance was delayed due to a reshuffle at the top ranks of Securities and Exchange Commission (SEC). SSS offers loan condonation program [The Philippine Star, March 7, 2024] In particular, members can avail themselves of the consolidation of past due short-term member loans (STML) with condonation of penalty. Finance dept pushes 'refined' mining taxes [The Manila Times, March 7, 2024] The Finance department said it wants to enhance HB 8937 by setting a four-tier margin-based royalty system, instead of an eight-tier structure, with rates ranging from 1.5 to 5.0 percent on mining operations outside mineral reservations. SC junks petition challenging legality of POGOs [The Philippine Star, March 7, 2024] The Supreme Court (SC) has junked a petition challenging the legality of the rules on Philippine offshore gaming operators or POGOs for violating the doctrine of hierarchy of courts and failing to meet the requirements for judicial review. DBP renews push to amend corporate charter, hike capital stock to P300B [GMA News Online, March 7, 2024] In a statement on Thursday, DBP president and CEO Michael de Jesus said it is working closely with the Department of Finance (DOF), state regulators, and legislators to introduce reforms in its 26-year-old charter “to cater to the demands of an ever-changing market and rapidly-evolving economic landscape.” DOTr: Expropriation of property for rail projects a last resort [Inquirer.Net, March 7, 2024] Expropriation of private property will always be the last resort in resolving right-of-way issues involving big-ticket rail projects of the government, the Department of Transportation (DOTr) said. DMMMSU thanks lawmaker for helping put up medical school [The Manila Times, March 7, 2024] THE Don Mariano Marcos Memorial State University (DMMMSU) thanked La Union 2nd District Rep. Dante Garcia for authoring House Bill (HB) 7090, now Republic Act (RA) 11978, for the establishment of the DMMSU College of Medicine. PSA: Here Are The Top Employers For Fresh Grads In 2024 [Cosmopolitan, March 6, 2024] Companies are ranked by a blend of their student popularity and program quality based on metrics gathered on the Prosple website. Baguio eyes tourist tax to pay for sewage upkeep [Philippine Daily Inquirer, March 6, 2024] City officials were mulling over making each tourist pay P80 to enter the summer capital to pay part of the P2-billion bank loan it is planning to secure for the new waste treatment system. Optus is fined $1.5 million for 'alarming' safety breach [Daily Mail, March 6, 2024] The Australian Communications and Media Authority found Optus did not upload the details of 200,000 mobile customers to a database used by emergency services between January 2021 and September 2023. GMAC to build and operate cold storage facility in Davao [Inquirer.Net, March 6, 2024] GMAC Logitech Refrigeration Corp, a joint venture between AC Logistics Holdings Corp and Glacier Megafridge Inc (GMI), will build and operate an 11,798-pallet cold storage facility in Panabo City, Davao del Norte. Lawmaker pushes for tax exemption on menstrual products [ABS-CBN News, March 5, 2024] A lawmaker pushes for tax exemption on menstrual products, calling the taxes “discriminatory” against women. SC orders Metro Manila LGUs to cease traffic receipts, confiscate driver's licenses [The Philippine Star, March 5, 2024] The Supreme Court (SC) ordered Metro Manila local government units (LGUs) to follow the the Metropolitan Manila Development Authority’s (MMDA) single ticketing system (STS) instead of using their own traffic violation receipts. Court settles Parañaque homeowners dispute [The Manila Times, March 5, 2024] The row involved the holding of an election by Multinational Village Homeowners Association Inc. (MVHAI) in 2019. DOJ sues firm for tax evasion [The Philippine Star, March 5, 2024] In a statement yesterday, the DOJ said it has filed multiple complaints against Buildforce Trading Inc., its corporate officers and public accountant after the National Bureau of Investigation (NBI) found that the firm produced fictitious receipts and invoices. Singapore tightens rules for hiring foreign professionals [Inquirer.Net, March 4, 2024] The manpower ministry said the move is meant to “ensure that EP (employment pass) holders are of high quality, and to maintain a level playing field for locals”. BSP to review 3 percent rate cap on credit card transactions [The Philippine Star, March 4, 2024] BSP Deputy Governor and head of the Financial Supervision Sector (FSS) Chuchi Fonacier said the FSS is working on recommendations whether to adjust the maximum interest rate or finance charge imposed on a cardholder’s unpaid outstanding credit card balance. Wildflour secures P 840-M investment ahead of planned IPO [Inquirer Mobile, March 2, 2024] Wildflour Hospitality Group, led by businesswoman and CEO Ana Lorenzana de Ocampo, secured a roughly P840-million investment from private equity firm KV Asia Capital, which picked the casual restaurant group as its first foray in the Philippines. Iloilo City eyes strait for reclamation plan [Philippine Daily Inquirer, March 2, 2024] The proposed reclamation project, which will host commercial and residential enclaves, will affect a section of Iloilo Strait, starting from Fort San Pedro in the city center. Cebu’s power struggle: Race to secure energy future to avoid billions in economic losses [Cebu Daily News, March 2, 2024] Building a power plant takes time, according to both Co and Garcia. For example, a brand new baseload power plant usually takes up to four years to build – including site development, port facilities, and other support. They are two of the largest banks in the US. Surprisingly announced that they will close (and there may be more banks) [Lagrada, March 1, 2024] Recently, two of the largest banks in the United States announced they would close in the United States. Besides Wells Fargo and Bank of America, the other three major banks that informed the media about future closures were PNC, Citizens, and Santander. All of them will close 31 branches in just one week. This news is part of a national trend that is seeing bank branches close as more people turn to online banking. SEC to share beneficial ownership data to gov't agencies [ABS-CBN News, March 1, 2024] The Securities and Exchange Commission (SEC) on Friday has signed a data-sharing agreement with various government agencies on beneficial ownership information. PCC raises thresholds for mandatory merger review [GMA News Online, March 1, 2024] In a statement on Friday, the PCC said beginning March 1, mergers and acquisitions that reaching the size of party (SoP) of P7.8 billion and size of transaction (SoT) of P3.2 billion must be notified to the antitrust body before the consummation of the transaction. SC disbars ex-Customs director over sale of confiscated vehicle [GMA News Online, March 1, 2024] In a statement, the SC said the former Customs director was found guilty of violating the Code of Professional Responsibility And Accountability (CPRA) after he claimed that his position gave him the authority to sell vehicles that have been confiscated by the agency. | 2. BIR CLARIFIES TIN VERIFICATION BEING REQUIRED BY EMPLOYERS FROM NEWLY HIRED EMPLOYEES | Revenue Memorandum Circular (RMC) No. 31-2024 issued on February 27, 2024, advises all employers that the BIR does not require newly hired employees to verify their Tax Identification Number (TIN) and get a TIN Verification Slip from the Revenue District Offices (RDO). All RDOs shall not accept requests for manual TIN Verification or issue TIN Verification slip for employment purposes, except for the following cases: a. The online TIN Verification facility is not available or there is a prompt message that the user needs to visit the RDO. b. There is a need for BIR personnel to further verify the correctness of taxpayer registration information. c. The taxpayer has an existing TIN or record. d. Possession of multiple or identical TINs. All employers are advised to use the BIR's Online TIN Verification facility of the Online Registration and Update System (ORUS) accessible at https://orus.bir.qov.ph/search/tinverification or BIR Chatbot Revie, to verify the validity and correct ownership of the TIN of their newly hired employees. The verification result being displayed by ORUS or Revie is considered sufficient for verification purposes. | 3. BIR REMINDS ALL AUTHORIZED AGENT BANKS (AABs) TO ACCEPT TAX RETURNS/PAYMENTS OF INTERNAL REVENUE TAXES ON APRIL 6 & APRIL 13, 2024 | Bank Bulletin No. 2024-1 dated February 20, 2024, directs all BIR AABs to open two (2) Saturdays prior to the April 15 Annual Income Tax deadline, specifically on April 6, 2024 and April 13, 2024. Thus, AABs are reminded to open and accept all tax returns/payments for the period April 1 to April 15, 2024, and extend banking hours up to 5:00 PM for the same period. Moreover, all tax payments that will be accepted on April 6 and April 13, 2024, shall be reported in the Batch Control Sheet (BCS) as a collection for the following working day, April 8, 2024, and April 15, 2024, respectively. However, the machine validation of the Annual Income Tax Returns (AITR) and the submission of the BCS and its corresponding supporting documents and attachments shall be in accordance with the existing procedures. | 4. BIR RULINGS ON THE TAXABILITY OF MANPOWER AGENCY VS SECURITY AGENCY & PDR SHARES | [THE AGENCY/ADMINISTRATIVE FEE RECEIVED FROM ITS CUSTOMERS/CLIENTS IS SUBJECT TO WITHHOLDING TAX] [THE SALARIES OF GUARDS RECEIVED BY SECURITY AGENCY FROM ITS CUSTOMERS/CLIENTS ARE EARMARKED & SEGREGATED, HENCE, DO NOT FORM PART OF SECURITY AGENCY’S GROSS INCOME] P Co. is seeking confirmation that only the income from the agency/administrative fee received from its customers/clients is subject to withholding tax. As represented, its customers are charging an administrative fee of 10% of the total contract costs in accordance with Section 11(b)(iii) of Department Order No. 174, Series of 2017. In reply, Section 2.57.2(C)(4)(g) of Revenue Regulations (RR) No. 3-98, as amended, states that a creditable income tax shall be withheld from the gross payments to contractors relating to the provision of messengerial, janitorial, and other manpower services. Furthermore, citing Section 1, Rule XIV of the 1994 Revised Rules and Regulations implementing Republic Act No. 5487, as amended, which governs the “Organization and Operation of Private Security Agencies and Company Security Forces throughout the Philippines,” provides that salaries of the guards received by a security agency from its customers/clients are earmarked and segregated for the said guards. However, nothing in its context would manifest or suggest the intention to have it applied to other manpower agencies such as janitorial or messengerial services. Hence, said RMC will only apply to janitorial services. Therefore, the income payments of customers/clients of KPI, which includes not only the agency or administrative fees but also the salaries, employer share of SSS, Philhealth and HDMF, and proportion of the 13th month, shall be subject to withholding tax. [BIR RULING NO. 093-2023, NOVEMBER 9, 2023] [PHILIPPINE DEPOSITARY RECEIPTS HOLDER MUST HAVE THE OPTION TO PURCHASE UNDERLYING SHARE TO BE CONSIDERED SHAREHOLDER] [RESTRICTION ON THE OWNERSHIP AND MANAGEMENT OF MASS MEDIA TO PHILIPPINE NATIONALS] S Co. is requesting a ruling confirming that the cash distributions received by Mercury Media, a non-resident foreign corporation, arising from Philippine Depositary Receipts (PDR) issued by ABS-CBN Holdings over shares of stocks in ABS-CBN Corporation are cash dividends subject to 15% tax sparing rate. In reply, it may be inferred based on the definitions in Section 73(A) and Section 22(M) of the 1997 Tax Code, as amended, that PDR holder may be considered a shareholder and a recipient of dividends if there is an option to purchase the shares underlying the PDR. In addition, it must be emphasized that Section 11(1), Article XVI (General Provisions) of the 1987 Constitution restricts the ownership and management of mass media, like ABS-CBN, to Filipino citizens or juridical persons managed by such Filipino citizens. It also mentioned that if the PDR holder is not permitted under the law to own the said share, it cannot compel the delivery thereof but is obliged to accept instead the net proceeds of the sale of these shares in an open market. In this case, Mercury Media does not have a legal right or option under the PDR instrument to purchase the underlying shares since the ownership is reserved for Philippine Nationals. Furthermore, the issued PDRs are unsubordinated and unsecured obligations of ABS Holdings, and any amount received from Mercury Media upon issuance is considered as deposit, secured by its shares in ABS-CBN. In view of this, the cash distributions are not cash dividends subject to 15% under Section 28(B)(5)(b) of the 1997 Tax Code, as amended, but are interest subject to 30% under Section 28(B) thereof. [BIR RULING NO. 006-2024, JANUARY 24, 2024] | DOWNLOAD OUR PAST EDITIONS & FULL TEXT OF REFERENCES https://weeklytaxupdates.getresponsesite.com/ | |
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