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LATEST NEWS
MTF Monthly Tax Updates
MTF Updates – COVID 19 Issuances
THE BIR’S POWER TO ASSESS
By: Zoe Bryce Amac on February 25, 2021.
The power of taxation is one of the inherent powers of the State and is considered an attribute of sovereignty. Its existence is justified by the so-called lifeblood theory. In Commissioner of Internal Revenue (CIR) v. Algue (GR L-28896, 1988) the Supreme Court held that taxes, as the lifeblood of the government, should be collected without unnecessary hindrance. Without taxes, it said, the government would be paralyzed for lack of the motive power to activate and operate it.
UNDERSTANDING CREATE PROVISIONS THAT ENCOURAGE INVESTMENTS AND REINVESTMENTS
By: Atty. Euney Marie Mata-Perez on February 18,2021.
As many of us may be aware by now, the recently ratified Corporate Recovery and Tax Incentives for Enterprises (Create) bill, which now awaits President Rodrigo Duterte’s approval, proposes to reduce the regular corporate income tax (RCIT) rate from 30 percent to 25 percent for large businesses and to 20 percent for small and medium enterprises. In addition, Create contains several novel provisions that encourage investment and reinvestment in the Philippines, as well as investments in “critical” activities and areas outside Metro Manila.
REVISITING RULES ON WARRANT ON DISTRAINT AND/OR LEVY
By: Atty. Aziza Hannah Bacay on February 11,2021.
The Bureau of Internal Revenue (BIR) has the power to enforce the collection of unpaid taxes either through summary administrative remedies, such as the issuance of a warrant of distraint and/or levy (WDL), or judicial ones, such as filing a civil or criminal action against the taxpayer.
NATIONALITY OF CORPORATIONS
By: Atty. Nica Gasapo on February 4,2021.
The 1987 Philippine Constitution has set forth requirements a corporation must meet before involving itself in certain activities. Depending on its nationality, a corporation may or may not undertake specific business ventures or invest in certain areas. Indeed, the 1987 Constitution was crafted to protect the rights of Filipinos to utilize natural resources, operate public utilities, and engage in fully or partly nationalized activities.
RECENT CTA DECISIONS ON REFUNDS OF ERRONEOUSLY COLLECTED TAXES
By: Atty. Euney Marie Mata-Perez on January 28,2021.
To claim a refund for an erroneously or illegally collected tax, Section 229 of the National Internal Revenue Code, as amended (Tax Code), provides that the claimant must first file an administrative claim with the commissioner of Internal Revenue (CIR). This claim must be filed within two years from the date of the tax’s payment. Also, the taxpayer must file a suit or proceeding before a court (in this case, the Court of Tax Appeals, or CTA) within those two years. In other words, both the judicial and administrative claims must be filed within the given reglementary period. However, the administrative claim must be filed prior to the judicial claim. These requirements are based on the aforementioned section, which states:
THE STOCKHOLDER’S RIGHT TO INSPECT CORPORATE RECORDS
By: Ellaine Anne L. Bernardino on January 21,2021.
The stockholder’s right to examine corporate records is based on his or her interests in the corporation and ownership of corporate property.
THE LIMITED LIABILITY OF OPC’S IN TAX EVASION CASES
By: Ramon Vaughn F. Dy III on January 14, 2021
It is an established rule in our jurisdiction that a corporation has a separate and distinct legal personality from that of its shareholders and officers. As an artificial being created by law, a corporation can act only through its people, such as directors, officers, agents, and representatives.
THE URGENT NEED TO PASS CREATE
By: Euney Marie Mata-Perez on January 7, 2021
Tax reform is part of the main agenda of the Duterte administration. So it was a welcome development when Republic Act 10963, or the “Tax Reform for Acceleration and Inclusion Act” (Train), took effect on Jan. 1, 2018 to mainly address and amend the antiquated personal income tax brackets of individual taxpayers, and to introduce significant amendments to the National Internal Revenue Code (“Tax Code”).
THE FORCE MAJEURE OF 2020
By: Euney Marie Mata-Perez on December 31, 2020
2020 will always be a year the world cannot forget. At its start, we saw the eruption of the beautiful Taal Volcano. And then we faced a force majeure like no other — the Covid-19 pandemic, prompting countries to try containing it, including imposing lockdowns.
RESTRAINING THE ENFORCEMENT OF TAX COLLECTION
By: Mark Anthony Tamayo on December 24, 2020
Taxes are the lifeblood of the government and should, as an inflexible policy, be collected promptly and without hindrance or delay (see Commissioner of Internal Revenue vs Standard Insurance Co., GR 219340) in order not to disrupt the operations of the government.
CREATE FOR GLOBAL COMPETITIVENESS
By. Atty. Euney Marie Mata-Perez on December 17, 2020
Last month, the Senate finally passed on third reading Senate Bill 1357, or the “Corporate Recovery and Tax Incentives for Enterprise Act” (Create), which aims to reform our corporate income tax (CIT) and incentives system, and propose significant amendments to our National Internal Revenue Code (Tax Code). Its main objective is to make the Philippines globally competitive, and to promote productivity, employment generation, countrywide development and more inclusive growth while maintaining fiscal stability and prudence.
FRIA REMEDIES FOR INSOLVENT FILIPINOS
Atty Gerardo Maximo Francisco on May 7,2020
Covid-19 has caused financial injury and distress to many Filipinos. By early 2021, after the grace periods for loans and other forms of financial assistance granted under Bayanihan 2 will have been exhausted, many more Filipinos will experience the stress and burden of their creditors demanding repayment.
THE CIR’s POWER TO ABATE TAXES
By: Atty. Irish May Quintana on December 3,2020
The abatement or cancellation of internal revenue tax liability is one of the remedies available to taxpayers. This is pursuant to the broad powers of the Commissioner of Internal Revenue (CIR) to cancel and abate tax liabilities under our National Internal Revenue Code (Tax Code). Section 204(B) of the Tax Code expressly provides that the CIR may abate or cancel tax liabilities when the tax or any portion thereof appears to be unjustly or excessively assessed, or the administration and collection costs involved do not justify the collection of the amount due.
INTRA-CORPORATE DISPUTES
By: Atty. Ellaine Anne Bernardino on November 26, 2020
An intra-corporate dispute is one that arises between a stockholder and the corporation, or among stockholders concerning the internal affairs of the corporation.
EXEMPTION ON RETIREMENT BENEFITS
By: Atty. Aziza Hannah Bacay on November 19,2020.
Republic Act (RA) 11494, or the “Bayanihan to Recover as One Act” (Bayanihan 2), which implements the government’s response and recovery interventions related to the Covid-19 pandemic, granted some tax relief and incentives to taxpayers. One of these incentives is an income tax exemption on retirement benefits, subject to certain conditions.
SITUS IN TAXATION ISSUES
By: Atty.Euney Marie Mata-Perez on November 12,2020.
A government or state exercises its taxing power and authority only on taxpayers, income or transactions that fall within its jurisdiction. Thus, the situs, or place, of taxation is critical in determining whether or not a state has the power to tax, especially with respect to nonresident or foreign individuals or corporations that are taxed only on Philippine-sourced income.
A REMINDER TO AVAIL OF TAX AMNESTIES
By: Atty.Aziza Hannah Bacay on October 29,2020.
It has been more than a year since Republic Act 11213, or the “Tax Amnesty Act” (TAA), was enacted. It became effective on March 1, 2019. The TAA originally provided for an estate tax amnesty, a general tax amnesty and a tax amnesty on delinquencies, but President Rodrigo Duterte vetoed the provisions of the second amnesty, among others. Thus, only the first and third kind of amnesties were implemented by the Bureau of Internal Revenue (BIR).
IMPACT OF COVID-19 RESTRICTIONS ON TAX RULES
By: Atty. Euney Marie Mata-Perez on October 22,2020
Quarantine measures imposed by governments that restrict travel and movement because of the Covid-19 pandemic do not only affect economies, but also tax rules.
BIR’s VAPP: NO AUDIT FOR 2018
By Atty. Kathleen Guiang on October 15,2020
The Covid-19 pandemic has not only prompted a global health emergency, but also caused severe global economic stress. In response, the government has implemented various measures and programs to manage its impact. To execute and sustain them, the government had to reallocate some funds and source loans from various financial institutions, including the Asian Development Bank and World Bank..
REQUIREMENTS FOR THE VALID TERMINATION OF EMPLOYMENT DUE TO AUTHORIZED CAUSES
By: Atty. Nica Marsha Gasapo on October 8,2020
The Supreme Court has emphasized that a person’s employment — the main source of livelihood for most families — is something that no one may be deprived of without due process of law. This basic doctrine has gained special significance after the coronavirus pandemic caused mass layoffs, workforce reductions and business closures.
THE NEW ECONOMY: HOW ARE ONLINE BUSINESSES TAXED?
By: Atty. Ellaine Anne Bernardino & Ramon Dy on October 1,2020
The coronavirus disease 2019 (Covid-19) pandemic has caused numerous businesses to close and millions of Filipinos to lose their jobs. It has also led countless Filipinos under quarantine to use the internet to earn a living, resulting in a boom in online businesses. It has also prompted many consumers to shift to online transactions to avoid physical contact.
JURISDICTION ON ‘OTHER MATTERS’
By: Atty. Mark Anthony Tamayo on September 24,2020.
Through the enactment of Republic Act (RA) 9282, the jurisdiction of the Court of Tax Appeals (CTA) has been expanded to include not only civil tax and customs duties cases, but also cases that are criminal in nature, local tax and property tax cases, and cases pertaining to the collection of internal revenue taxes and customs duties, the assessment of which have become final.
NEW RULES ON EVIDENCE: PHOTOCOPIES AS EVIDENCE AND OTHER HIGHLIGHTS
By: Atty. Irish May Quintana on September 17,2020.
In an effort to adopt technological advancements and incorporate developments in the law, jurisprudence and international conventions, the Supreme Court (SC) proposed amendments to the revised rules on evidence (RRE) in A.M. 19-08-15-SC, which took effect on May 1, 2020. The material changes in the amended RRE discussed here are: the new definition of “original document;” expanded coverage of privilege communications; and a new hearsay rule.
SC VOIDS NATIONALITY RESTRICTION ON CONSTRUCTION COMPANIES
By: Atty. Euney Marie Mata-Perez on September 10,2020.
In a landmark decision handed out on March 10, 2020, the Supreme Court (SC) declared void the 30-year-old foreign equity limitation on construction companies imposed under the “Revised Rules and Regulations Governing the Licensing and Accreditation of Contractors in the Philippines” or the implementing rules and regulations (IRR) of Republic Act (RA) 4566, or the “Contractors’ License Law.” This pronouncement effectively removed a substantial barrier to the entry of foreign contractors in the construction industry and is indeed a significant step toward fair competition in the Philippines. This decision is very timely, since it would give our economy a much-needed boost during the Covid-19 pandemic.
A VALID DEMAND IS VITAL IN A TAX ASSESSMENT
By: Atty. Kathleene Guiang on September 3,2020
A valid demand is essential to the validity of a Bureau of Internal Revenue (BIR) assessment of deficiency taxes against a taxpayer. This demand is ordinarily expressed in a formal letter of demand (FLD), which is issued and delivered with a final assessment notice (FAN). Without a valid FLD, the assessment is invalidated for violating the taxpayer’s right to due process.
REVISED SHARE VALUATION RULES: A WELCOME DEVELOPMENT
By: Atty. Euney Marie Mata-Perez on August 27,2020.
Taxpayers recently received some good news on how capital gains tax on the sale of unlisted shares of stocks is now calculated. This came in the form of the Bureau of Internal Revenue’s (BIR) issuance of Revenue Regulations (RR) 20-2020, which revised the valuation rules set by RR 6-2013. RR 20-2020 states that the book value (BV) of common shares, as shown in the latest audited financial statements (AFS) of the issuing company, that were issued prior to the transaction shall be considered their prima facie fair market value (FMV). It also prescribes how to calculate the BV of preferred shares.
HOW TO COUNT THE PRESCRIPTIVE PERIOD TO CLAIM REFUND
By: Atty. Aziza Hannah Bacay on August 20,2020
Taxes are the lifeblood of the government. To ensure that the government lives, the Bureau of Internal Revenue was granted the power to collect taxes and even issue assessments against taxpayers if their taxes are deficient.
NOTARY PUBLIC: AVAILABLE ONLINE
By: Atty. Nica Marsha Gasapo on August 13,2020
Covid-19 has caused so many disruptions in our everyday lives. To curb its spread, the government had to impose strict lockdowns that stalled the economy’s growth. However, certain sectors that capitalized on technology managed to stay afloat and withstood the logistical nightmare caused by the pandemic. Because of the crisis, the concept of a “new normal” was introduced, in which the use of technology and the internet is critical.
THE QUEST TO CONTAIN CREATIVITY
By: Atty. Mark Anthony Tamayo on August 6,2020
Any scheme that has to do with minimizing, eliminating or altering the incidence of taxation may be closely scrutinized and ultimately questioned by tax authorities.
SC AFFIRMS LGU’s HAVE NO POWER TO TAX DIVIDENDS PF NONBANKS
By: Atty. Gerardo Maximo Francisco on July 30,2020
In a case we handled, the Supreme Court (SC) confirmed the entry of the judgment of its resolution affirming with finality the decisions of the Court of Tax Appeals (CTA) and the Regional Trial Court (RTC) of Makati that Makati City does not possess the power to assess local business taxes (LBT) on the dividends received by our client, which is not a bank or a financial institution.
A PRESUMPTION IS A MERE PRESUMPTION
By: Atty. Mark Anthony Tamayo on July 23,2020.
In tax litigation, assessments from the Bureau of Internal Revenue (BIR) are generally accorded the presumption of correctness and being made in good faith (Marcos II v. Court of Appeals, GR. 120880, June 5, 1997). In the absence of evidence to the contrary, a notice of tax deficiency establishes a prima facie case of liability on the part of the taxpayer.
AMENDING THE BANK SECRECY ACT AS A KEY TO FINANCIAL INTEGRITY
By: Atty. Euney Marie Mata-Perez on July 16,2020
The integrity of a financial system is a key factor in its financial stability.
Finance Secretary Carlos Dominguez 3rd and Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno recently reiterated the need to amend Republic Act (RA) 1405, or the “Bank Secrecy Act.” This comes in the wake of the controversy involving German company Wirecard AG and its missing $2.1-billion funds. An “elaborate” search was conduct to determine whether the missing money entered the Philippine financial system through two of our major banks, BDO Unibank Inc. and Bank of the Philippine Islands.
COVID-19’s IMPACT ON SIN TAXES AND HEALTH CARE FUNDING
By: Atty. Euney Marie Mata-Perez on July 9,2020
The coronavirus disease 2019 (Covid-19) pandemic and the community quarantines imposed to curb its spread certainly affected people’s lifestyles. It also affected their spending habits, as seen in the increase in the use of the internet and various online platforms to purchase various essential and nonessential goods. More important, the pandemic highlighted the need for our government to focus on the proper funding of health care facilities in the country.
PROCUREMENT DURING THE COVID-19 PANDEMIC
By: Atty. Euney Marie Mata-Perez on July 2,2020
Because of the serious threat posed by the coronavirus disease 2019 (Covid-19) pandemic to the health, safety and security of Filipinos, a state of national emergency was declared over the country under Section 2 of Republic Act (RA) 11469, or “the Bayanihan to Heal as One Act.”
PROPOSED MEASURES TO TAX THE DIGITAL ECONOMY
By: Atty. Euney Marie Mata-Perez on June 26,2020
The coronavirus disease 2019 (Covid-19) pandemic has spurred the growth of digital and online transactions, and this highlighted the taxation issues about them.
REGISTRATION OF BUSINESS CONDUCTED THROUGH DIGITAL MEANS
By: Atty. Euney Marie Mata-Perez on June 18,2020
The community quarantines brought about by the coronavirus disease 2019 (Covid-19) pandemic pushed many to use electronic or online platforms, like Facebook, Viber and Instagram, to continue their businesses or start new ones.
RESPECT FOR THE PHILIPPINE FLAG AND NATIONAL ANTHEM
By: Atty. Euney Marie Mata-Perez on June 11,2020
We celebrate Independence Day on June 12, 122 years after Gen. Emilio Aguinaldo declared independence from Spain and waved the first Philippine flag at his residence in Kawit, Cavite.
‘BALIK PROBINSYA’ PROGRAM
By: Atty. Euney Marie Mata-Perez on June 4,2020
I am a probinsiyana. I was born in Cebu City, my mother’s home city. I partly grew up there, as well as in Dipolog City in Zamboanga del Norte, my father’s home province. I have beautiful memories growing up in Dipolog.
CREATE FOR A SPEEDY RECOVERY
By: Atty. Euney Marie Mata-Perez on May 28,2020
The coronavirus disease 2019 (Covid-19) pandemic gave rise to some benefits. The Department of Finance (DoF) recently added proposed enhancements or amendments to the Corporate Income Tax and Incentives Reform Act (Citira), now renamed the Corporate Recovery and Tax Incentives for Enterprises Act (Create).
TAX AND OTHER STIMULUS INITIATIVES FOR ECONOMIC RECOVERY FROM COVID-19
By: Atty.Euney Marie Mata-Perez on May 21,2020
The huge impact of the coronavirus disease 2019 (Covid-19) pandemic on the health and mobility of our people, as well as on our businesses and economy as a whole, is beyond what we all thought. The enhanced community quarantine (ECQ) imposed in mid-March has been extended, albeit in a modified form covering Metro Manila, Cebu and Laguna, until the end of May, while several regions were put under general community quarantine (GCQ). Most of us continue to work from home. However, the number of confirmed Covid-19 cases continues to rise steadily. The risk of a spike is feared, especially as people start to move around under the lockdowns that took effect on May 16.
MTF Updates – DOLE Labor Advisory No. 18 dated May 18, 2020
MTF Updates – DOLE Labor Advisory No. 17 dated May 18, 2020
DECLARATION IN ITS PROVISIONAL FORM
By: Atty. Mark Anthony Tamayo on May 14,2020
One significant trade facilitation measure in customs clearance procedure and formalities was the adoption of the Revised Kyoto Convention (RKC) provisions relating to provisional or incomplete goods declaration (PGD) in the Customs Modernization and Tariff Act (CMTA).
MTF Updates – DOLE Department Order No. 213
MTF Updates – DTI and DOLE Interim Guidelines
WORKPLACE SAFETY AND HEALTH STANDARDS DURING COVID-19
By: Atty Gerardo Maximo Francisco on May 7,2020
At some point, the enhanced community quarantine (ECQ) still in effect in many areas in the Philippines will be downgraded by the government to the level of a general community quarantine (GCQ). Hopefully, this vital decision to shift to a GCQ will be made circumspectly and with the full backing of medical science and experts.
MTF Updates – BOC Ocom Memo No. 89-2020
MTF Updates – BOC Ocom Memo No. 82-2020
MTF Updates – BOC Ocom Memo No. 80-2020
MTF UPDATES – BIR RR 11-2020
NOTES ON PROBATIONARY EMPLOYMENT
By: Atty Gerardo Maximo Francisco on April 30,2020
“A probationary employee or probationer is one who is on trial for an employer, during which the latter determines whether or not the former is qualified for permanent employment. Indeed, the employer has the right, or is at liberty, to choose who will be hired and who will be declined. As a component of this right to select his employees, the employer may set or fix a probationary period within which the latter may test and observe the conduct of the former before hiring him permanently.” (De La Salle Araneta University Inc. vs Magdurulang, 845 SCRA 274, 285 [2017])
MTF UPDATES – SEC MC NO. 13, SERIES OF 2020
MTF UPDATES – SEC MC NO. 12, SERIES OF 2020
MTF Updates – SEC Notice dated April 22, 2020
FULL DEDUCTIBILITY OF DONATIONS TO FIGHT COVID-19
By: Atty. Carence Navidad on April 23,2020
FILIPINOS’ “bayanihan spirit” is again on display amid the coronavirus disease 2019 (Covid-19) pandemic. Various sectors have been contributing financially, donating various medical equipment, supplies and food to several health facilities and frontline workers across the country.
MTF Updates – BOC CMO No. 10-2020
MTF UPDATES- BIR RMC NO. 44-2020
MTF UPDATES- BIR RMC NO. 43-2020
MTF UPDATES- BIR RMC NO. 42-2020
NEW EXTENDED TAX DEADLINES
By: Atty. Aziza Hannah Bacay on April 16,2020
With the Luzon-wide enhanced community quarantine (ECQ) extended until April 30, it is just proper for the Bureau of Internal Revenue (BIR) to also extend various statutory and tax deadlines. Such an extension is mandated by Republic Act 11469, or the “Bayanihan to Heal as One Act,” which gives President Rodrigo Duterte emergency powers to respond to the coronavirus disease 2019 (Covid-19) pandemic in the country.
MTF Updates – BIR RR No. 10-2020
MTF UPDATES – SEC NOTICE DATED APRIL 8, 2020
MTF UPDATES – SEC NOTICE DATED MARCH 30, 2020
MTF UPDATES – BIR RMC NO. 41-2020
MTF UPDATES – BIR RMC NO. 40-2020
MTF UPDATES – BIR RMC NO. 39-2020
MTF UPDATES – BIR RMC NO. 38-2020
MTF UPDATES – DOLE – LABOR ADVISORY NO. 13
RECOVERY OF TAX ERRONEOUSLY OR ILLEGALLY COLLECTED
By: Atty. Kathlene Guiang on April 9, 2020
The imposition of a Luzon-wide enhanced community quarantine last month has prompted government agencies to issue circulars aimed at helping ease its impact on the lives of taxpayers.
MTF UPDATES- BIR RR 9-2020
MTF UPDATES- BIR RMC No. 37-2020
MTF UPDATES- BIR RMC No. 36-2020
MTF UPDATES | BIR RMO 10-2020
MTF UPDATES | BIR RR 8-2020
MTF UPDATES | BIR RR 7-2020
COVID-19 ISSUANCES TO EXTEND STATUTORY DEADLINES
By: Atty. Euney Marie Mata-Perez on April 2,2020
he coronavirus disease 2019 (Covid-19) pandemic is greatly affecting all of us.
Contact Information
Our office address:
15/f Unit A. ACT Tower, H.V. Dela Costa St.
Salcedo Village, Makati City 1227 Philippines
Telefax: +632 831-1297
Telephone: +632 808-5375 • +632 815-0069
Email: info@mtfcounsel.com
Partners
Euney Marie J. Mata-Perez
euney.mata-perez@mtfcounsel.com
Mark Anthony P. Tamayo
mark.tamayo@mtfcounsel.com
Gerardo Maximo V. Francisco
gary.francisco@mtfcounsel.com
