TAX & BUSINESS-RELATED NEWS [MAY 25-30] BIR SUSPENDS ALL FIELD AUDIT PURSUANT TO LOA/MOA EFFECTIVE MAY 30, 2022 BIR SUSPENDS ALL FIELD AUDIT PURSUANT TO SPECIAL ORDERS, OPERATIONS MEMORANDA & OTHER SIMILAR DIRECTIVES OF SPECIAL TASK FORCE EFFECTIVE MAY 30, 2022 TAX & BUSINESS-RELATED NEWS [MAY 23-24] CTA CASES DIGEST ON THE ENTITLEMENT OF GENERATION COMPANY & TIEZA TO TAX INCENTIVES
| 1. TAX & BUSINESS-RELATED NEWS [MAY 25-30] | | Duterte tax proposals seen to hit poor, middle class NTC orders telcos, Regional Directors and OICs to warn public on fake job text scams DOTr disputes NAIA ranking as worst business class airport Comelec reminds Halalan 2022 candidates: SOCE deadline on June 8, no extension NBI arrests BIR examiner for alleged extortion in Zamboanga City Dominguez: Closing Naia, selling its land an option for Bongbong Marcos Cryptosat’s first nanosatellite blasts off Wednesday on SpaceX rocket BIR in crosshairs over ‘baseless’ Megaworld, ‘pabaon’ issues Balai ni Fruitas IPO bags SEC nod Cebu biz leader warns of business closures, job creation slowdowns after ‘historic’ P31 increase in minimum wage rate DOF urges Marcos: Postpone income tax cuts, slap new taxes, slash VAT exemptions NOW OPEN: OFW HOSPITAL WITH FREE MEDICAL SERVICES TO ALL OFWS With no space left, Baguio buys land in nearby towns MRT-3's Libreng Sakay extended for third straight month Gokongwei firm signs shareholder deal with Maxicare Neda bares 3 ways Marcos admin can use to generate revenues Randy's Donuts temporarily closes Manila shop, to reopen in June Corporate regulator to widen investment options for retirees BPO sector discussing hybrid work arrangement to remain competitive: group
| 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. | Duterte tax proposals seen to hit poor, middle class [Philippine Daily Inquirer, May 30, 2022] In its “fiscal consolidation and resource mobilization plan,” the Department of Finance (DOF) proposed that the incoming administration impose new and higher taxes and defer the personal income tax cuts to start next year. NTC orders telcos, Regional Directors and OICs to warn public on fake job text scams [Manila Bulletin, May 29, 2022] In line with this, the Commission has ordered DITO, Globe and Smart to text blast their subscribers from May 28, 2022 to June 04, 2022 the following message: “BABALA, HUWAG PONG MANIWALA SA TEXT NA NAG-AALOK NG TRABAHO NA MAY PANGAKO NG MALAKING SWELDO, ITO PO AY SCAM.” DOTr disputes NAIA ranking as worst business class airport [The Philippine Star, May 29, 2022] The Department of Transportation (DOTr) has called a study ranking the Ninoy Aquino International Airport (NAIA) as the world’s worst business class airport “unsubstantiated,” saying that the gateway has come a long way under the Duterte administration. Comelec reminds Halalan 2022 candidates: SOCE deadline on June 8, no extension [ABS-CBN News, May 29, 2022] Campaign donations must be reported in SOCEs, said Garcia, who added that they can cross-check information with donors. NBI arrests BIR examiner for alleged extortion in Zamboanga City [Inquirer Mindanao, May 28, 2022] Lawyer Moises Tamayo, National Bureau of Investigation Western Mindanao director, told the Inquirer that the suspect, Flora Sarau Albao, a supervising examiner of the BIR’s Revenue District Office No. 15, was arrested on Friday after receiving marked money during an entrapment operation. Dominguez: Closing Naia, selling its land an option for Bongbong Marcos [Philippine Daily Inquirer, May 26, 2022] The incoming administration of Ferdinand “Bongbong” Marcos Jr. may consider closing down the Ninoy Aquino International Airport (Naia) and then selling the vast tract of land it sits on to raise more government revenues, President Rodrigo Duterte’s chief economic manager said. Cryptosat’s first nanosatellite blasts off Wednesday on SpaceX rocket [Cointelegraph, May 25, 2022] The small satellite no bigger than a coffee mug is made from off-the-shelf parts and can be a tamper-proof platform to secure blockchains and other Web3 protocols. BIR in crosshairs over ‘baseless’ Megaworld, ‘pabaon’ issues [Inquirer Mobile, May 25, 2022] The Department of Finance (DOF) is keeping a close eye on the Bureau of Internal Revenue (BIR) due to recent issues like alleged “pabaon” to outgoing Finance Secretary Carlos Dominguez III and the taxman’s controversial tiff with property giant Megaworld Corp. that shed millions of pesos from state-run pension funds’ stock investments. Balai ni Fruitas IPO bags SEC nod [The Philippine Star, May 25, 2022] In a statement on Wednesday, the Securities and Exchange Commission said it approved on Tuesday Balai’s application for a P309.8-million initial public offering that covers 1.49 billion common shares. Cebu biz leader warns of business closures, job creation slowdowns after ‘historic’ P31 increase in minimum wage rate [Cebu Daily News, May 25, 2022] Several members of the Cebu business community expressed concerns over the decision of the government to impose a P31-increase in the daily minimum wage in Central Visayas. DOF urges Marcos: Postpone income tax cuts, slap new taxes, slash VAT exemptions [Rappler, May 25, 2022] For the Department of Finance, borrowing more or cutting spending are not viable options. Presumptive president Ferdinand Marcos Jr. would have to impose new taxes and hold off on lowering income tax. NOW OPEN: OFW HOSPITAL WITH FREE MEDICAL SERVICES TO ALL OFWS [Sugbo.PH, May 25, 2022] OFW Hospital started its partial operations as a polyclinic last May 2 and will be fully operational by the end of June 2022 as announced by the Department of Labor and Employment (DOLE). President Rodrigo Duterte led the inauguration and inspection of the hospital last May 1. With no space left, Baguio buys land in nearby towns [Philippine Daily Inquirer, May 25, 2022] During the city council’s session, Magalong and the city planning officer, Donna Tabangin, explained what they described as a “strategic” land banking program when the city council tackled one of the city’s impending first purchases involving a 6.3-hectare property in neighboring Tuba town in Benguet province. MRT-3's Libreng Sakay extended for third straight month [The Philippine Star, May 25, 2022] The Metro Rail Transit-Line 3 is extending its free rides program for the third straight month to coincide with the end date of the outgoing administration of President Rodrigo Duterte on June 30, 2022. Gokongwei firm signs shareholder deal with Maxicare [BusinessWorld, May 25, 2022] In a media release on Tuesday, the Equicom group said the “partnership agreement” signed with the Gokongweis’ JE Holdings, Inc. will allow Maxicare to revolutionize its mission of helping Filipinos. Neda bares 3 ways Marcos admin can use to generate revenues [Inquirer.Net, May 25, 2022] The three ways are through policy reform, collection efficiency, and economic growth. Randy's Donuts temporarily closes Manila shop, to reopen in June [GMA News Online, May 25, 2022] Barely a month after opening in Metro Manila, Randy's Donuts just announced it will temporarily close its Metro Manila shop as it replenishes ingredients from the US. Corporate regulator to widen investment options for retirees [Inquirer Mobile, May 25, 2022] The SEC, chaired by Emilio Aquino, said on Tuesday it was seeking comments from the public ahead of the issuance of a list of stocks, bonds and other securities that would be covered by the Personal Equity and Retirement Account (Pera) Act of 2008. BPO sector discussing hybrid work arrangement to remain competitive: group [ABS-CBN News, May 25, 2022] IT and Business Process Association of the Philippines (IBPAP) CEO Jack Madrid clarified that despite the government's order for ecozone locators to go back to physical sites, over 440 firms have been granted letters of authority (LOA) by the Philippine Economic Zone Authority (PEZA), which allowed remote work for 30 percent of their workforce. | 2. BIR SUSPENDS ALL FIELD AUDIT PURSUANT TO LOA/MOA EFFECTIVE MAY 30, 2022 | Revenue Memorandum Circular (RMC) No. 77-2022, issued on May 30, 2022, suspends all field audit of the BIR covered by Letters of Authority (LOAs)/Mission Orders (MOAs) relative to examinations of taxpayers' books of account and accounting records. As such, no field audit, field operations, or any form of business visitation in execution of LOAs/MOs should be conducted, nor any new LOAs/MOAs be further issued, except in the following cases: lnvestigation of cases prescribing on or before October 31,2022 Processing and verification of estate tax returns, donor's tax returns, capital gains tax returns and withholding tax returns on the sale of real properties or shares of stocks together with the documentary stamp tax returns related thereto Examination and/or verification of internal revenue tax liabilities of taxpayers retiring from business Audit of National Government Agencies (NGAs), Local Government Units (LGUs), and Government Owned and Controlled Corporations (GOCCs) including subsidiaries and affiliates Other matters/concerns where deadlines have been imposed or under the orders of the Commissioner of lnternal Revenue
DOWNLOAD BIR RMC NO. 77-2022 | 3. BIR SUSPENDS ALL FIELD AUDIT PURSUANT TO SPECIAL ORDERS, OPERATIONS MEMORANDA & OTHER SIMILAR DIRECTIVES OF SPECIAL TASK FORCE EFFECTIVE MAY 30, 2022 | Revenue Memorandum Circular (RMC) No. 76-2022, issued on May 30, 2022, suspends all field audit of the BIR pursuant to, and under authority of, all Task Forces, created thru Revenue Special Orders (RSOs), Operation Memoranda (OM), and other similar orders or directives, relative to examinations of taxpayers' books of account and accounting records effective May 30, 2022. As such, no field audit, field operations, or any form of business visitation in execution of Letters of Authority/Audit Notices (LOAs) or Mission Orders (MOs) should be conducted by the said Task Forces. | 4. TAX & BUSINESS-RELATED NEWS [MAY 23-24] | | P 368-B tax perks given to big-ticket investments House Committee sees 'glaring red flags' on Megaworld tax issue Gadget vendor sets P 5.4-B stock debut Russia to supply fertilizer to PH: DA Converge ICT to buy back P6.5B worth of shares Taco shop in Makati pushes back on criticism its prices are too high in heartfelt post Latest Injap, Tan Caktiong gamble to SERVE small investors in Q4 EO issued approving first SIPP New operator of Subic shipyard hires displaced Hanjin workers GCash now has over 60M users, covering 83% of adult population Foreign chambers urge Senate to ratify RCEP Microsoft is now urging users to stop using Internet Explorer Freight fees expected to climb further
| 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. | P 368-B tax perks given to big-ticket investments [Inquirer Mobile, May 24, 2022] In a statement on Monday, the Department of Finance (DOF) said the P151-billion high-speed broadband services connectivity facilities project of Converge ICT Solutions Inc. was the biggest of these 11 big-ticket projects cleared by the interagency FIRB for fiscal and other incentives to date. Converge is owned by Pampanga’s Dennis Anthony Uy. House Committee sees 'glaring red flags' on Megaworld tax issue [CNN Philippines, May 24, 2022] House ways and means committee chair Albay Rep. Joey Salceda points out "glaring red flags" on the tax controversy involving property giant Megaworld. Gadget vendor sets P 5.4-B stock debut [Inquirer Mobile, May 24, 2022] Computer hardware and software retailer Upson International Corp. is raising about P5.43 billion via an initial public offering (IPO) next month after sales of tech gadgets swelled during the COVID-19 pandemic. Russia to supply fertilizer to PH: DA [Philippine News Agency, May 24, 2022] Amid the worsening limitation of fertilizer supply worldwide, the Department of Agriculture- Fertilizer and Pesticide Authority (DA-FPA) on Tuesday said Russia has vowed to supply traditional fertilizer urea to the Philippines. Converge ICT to buy back P6.5B worth of shares [Inquirer Mobile, May 24, 2022] Converge ICT Solutions Inc. is set to buy back up to P6.5 billion worth of shares from Coherent Cloud Investments, which currently has a 10.25-percent stake in the listed company. Taco shop in Makati pushes back on criticism its prices are too high in heartfelt post [Yahoo News, May 24, 2022] One such restaurant is Onlypans Taqueria, a cheekily named taco joint located on Don Pedro Street. Some customers had apparently criticized the taqueria for setting their prices too high but Onlypans owner’s weren’t having it. In an Instagram post, they pushed back on the idea that their tacos are “too pricey”, noting that a solo order, which costs PHP350 (US$6.69) for two tacos, comes with “approximately 400 grams of meat, fresh vegetables, house special sauces, good soup made of authentic Mexican spices.” Latest Injap, Tan Caktiong gamble to SERVE small investors in Q4 [Inquirer Mobile, May 24, 2022] DragonFi Securities Inc., the stock brokerage venture led by tycoons Tony Tan Caktiong and Edgar “Injap” Sia II, is planning to make its formal launch by the fourth quarter of the year. EO issued approving first SIPP [Manila Bulletin, May 24, 2022] Malacanang has approved the Strategic Investment Priority Plan (SIPP), the country’s first list of priority economic activities eligible for government tax and fiscal incentives under the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) Law. New operator of Subic shipyard hires displaced Hanjin workers [Inquirer.Net, May 24, 2022] Officials of Subic Bay Metropolitan Authority (SBMA) have ensured a “smooth transition” in the former Hanjin shipyard, which went bankrupt in 2017, as some of the displaced workers of the facility have already been hired by the new operator. GCash now has over 60M users, covering 83% of adult population [GMA News, May 24, 2022] Financial technology platform GCash said Tuesday it has achieved a milestone after it cornered a significant portion of the country’s adult population. Foreign chambers urge Senate to ratify RCEP [Inquirer Mobile, May 24, 2022] Foreign business groups have urged the Senate to let the Philippines join the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade bloc, as doing so will help bring in more investments from abroad. Microsoft is now urging users to stop using Internet Explorer [Inquirer.Net, May 23, 2022] As the legendary web browser Internet Explorer is bound to officially retire on June 15, the software giant behind it, Microsoft, is now practically begging organizations and other active users to avoid waiting until the last moment to stop using Internet Explorer. Freight fees expected to climb further [BusinessWorld, May 23, 2022] “There is a limit to cutting cost. The lines will have no choice but to pass on the cost to the cargo owners,” Philippine Liner Shipping Association (PLSA) President Mark Matthew F. Parco told BusinessWorld in a phone message on May 19. | 5. CTA CASES DIGEST ON THE ENTITLEMENT OF GENERATION COMPANY & TIEZA TO TAX INCENTIVES | [DOE CERTIFICATE OF REGISTRATION, REGISTRATION WITH THE BOI, AND THE DOE CERTIFICATE OF ENDORSEMENT OF THE RE DEVELOPER MUST ALL BE PRESENTED TO PROVE THAT THE PURCHASES OF THE RE DEVELOPER ARE VAT ZERO-RATED] [UNDER EPIRA, A CERTIFICATE OF COMPLIANCE IS A PREREQUISITE BEFORE ONE CAN BE CONSIDERED AS A GENERATION COMPANY ENTITLED TO TAX INCENTIVES] Trans-Asia Renewable Energy Corporation (Trans-Asia) and Commissioner of Internal Revenue (CIR) filed their separate Petitions for Review assailing the CTA 3rd Division’s earlier Decision. Trans-Asia argued that the 3rd Division erred in partially denying its claim for refund or issuance of a Tax Credit Certificate (TCC) for excess and unutilized input VAT for the period of claim mainly on the ground that it failed to prove that it is a generation company authorized by the Energy Regulation Commission (ERC) to operate facilities used in the generation of electricity. CIR argued that the law requires that only creditable input taxes that are directly attributable may be refunded. In ruling, the Court held that the registration as Renewable Energy (RE) Developer and the issuance of the corresponding Department of Energy (DOE) Certification are not enough to enjoy the incentive of VAT zero-rating on sales of renewable sources of energy. An RE Developer must secure the following documents to avail of the fiscal incentives pursuant to RE Law: (1) DOE Certificate of Registration; (2) Registration with the BOI; and (3) Certificate of Endorsement by the DOE. Records revealed that there was no showing that Trans-Asia was issued a Certificate of Endorsement by the DOE on a per transaction basis. Hence, for failure to comply, it is not entitled to VAT zero-rating and perforce, its refund claim must fail. Nonetheless, even if Trans-Asia has failed to comply with the requirements for VAT zero-rating under the RE Law, its sales for the month of June 2015 still qualify for VAT zero-rating given that it presented a Certificate of Completion (COC) issued by ERC on June 1, 2015 to prove that it is a generation company and it is engaged in zero-rated sales of power generated from renewable sources of energy. Trans-Asia’s claim for refund is not based only on the RE Law but also on the Electric Power Industry Reform Act (EPIRA). Under the EPIRA, a generation company must secure a COC before its sale of power or fuel generated from renewable energy sources can qualify for VAT zero-rating. Accordingly, Trans-Asia has qualified for VAT zero-rating under the EPIRA but only starting June 1, 2015, when the ERC issued a COC in its favor. On the other hand, contrary to the CIR’s position, there is nothing in the Tax Code which requires that the input taxes subject of a claim for refund be directly attributable to zero-rated sales or effectively zero-rated sales. The law merely states that the creditable input VAT should be attributable to zero-rated or effectively zero-rated sales. Consequently, both the Petitions were DENIED for lack of merit. [TRANS-ASIA RENEWABLE ENERGY CORPORATION VS. COMMISSIONER OF INTERNAL REVENUE, CTA EN BANC CASE NO. 2314 & COMMISSIONER OF INTERNAL REVENUE VS. TRANS-ASIA RENEWABLE ENERGY CORPORATION, CTA EN BANC CASE NO. 2347, MAY 17, 2022] TIEZA IS EXEMPT FROM CORPORATE INCOME TAX, THUS, ERRONEOUSLY WITHHELD TAX ON SALE OF PROPERTY SHOULD BE REFUNDED Petitioner Premier Central, Inc. filed a Petition for Review seeking refund of creditable withholding tax (CWT) in connection with its purchase of property from the Tourism Infrastructure and Enterprise Zone Authority (TIEZA). Petitioner argued that since TIEZA is exempt from income tax, it was erroneous for Respondent Commissioner of Internal Revenue (CIR) to have assessed and collected from Petitioner CWT, interest, surcharge, and compromise penalty on the acquisition of property. In ruling, TIEZA is not obliged to pay corporate income tax under Section 74 of Republic Act No. 9593 or the Tourism Act of 2009, as implemented by Section 67, Chapter IV, Rule IV of its Implementing Rules and Regulations (IRR). In granting corporate income tax exemption to TIEZA, the law and its IRR make no distinction as to whether TIEZA’s income was derived from governmental or proprietary activities. Thus, all income derived by TIEZA, including the income derived from the sale of the property, is exempt from corporate income tax. Considering that TIEZA is exempt from corporate income tax, Petitioner, as the buyer of the property, is not obliged to withhold CWT on the purchase price. It was, therefore, erroneous and illegal for the BIR to have required Petitioner to withhold and remit CWT equivalent to 6% of the purchase price of the property, plus interest, surcharge, and compromise penalty. Having established the legal basis for the grant of the refund sought and having duly substantiated the remittance to the BIR, Petitioner is entitled to the grant of its claim for refund. Thus, the Petition was GRANTED. [PREMIER CENTRAL, INC. VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10251, MAY 16, 2022] | DOWNLOAD OUR PAST EDITIONS & FULL TEXT OF REFERENCES https://weeklytaxupdates.getresponsesite.com/ | |
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