tax bulletin - october 2012

8/12/2019 Tax Bulletin - October 2012

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Tax BulletinOctober 2012


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Circular N o. 772 amends the regulations in the M ORB on non-performing loans.

(Page 17)

SEC Issuances

SEC Memorandum Circular (MC) No. 10 prescribes the rules and regulations on

Exchange Traded Funds (ETFs). (Page 18)

SEC MC No. 9 prescribes the guidelin es on accreditation of surety companies.

(Page 19)

A corporation engaged in operating a voucher platform on the internet, whose

purpose is to increase the sales of a particular product or service which, in

effect, disseminates information to the general public through the internet, may

be considered as a mass media entity and must be wholly owned by Filipino

citizens. On the other hand, a corporation merely involved in the design of the

voucher placement is considered an advertising agency which must comply withthe 30% maximum foreign equity requirement under the 1987 Constitution.

(Page 21)

The registration requirement of under the Foreign Investments Act (FIA) for

increases in foreign equity participation does not apply to corporations already

100% foreign-owned when the FIA was enacted. (Page 22)

BLGF Opinion

Machiner ies which are actually, directly and exclusively used by the National

Power Corporation (NPC), which is a government owned or controlled

corporation (GOCC), for the generation and transmission of electric power are

exempt from real property tax (RPT). (Page 22)

Court Decisions

The Court of Tax Appeals (CTA) has exclusive jurisdic tion to review decisio ns,

orders or resolutions of Regional Trial Courts (RTCs) in local tax cases originally

decided or resolved by RTCs in the exercise of their original or appellate

jurisdiction.

A franchise tax is a tax levied on the exercise by an entity of the rights or

privileges granted to it by the Government. In the absence of a clear and

subsisting legal provision granting a tax exemption, an LGU may validly assess a

franchise holder, although non-prot, a franchise tax. (Page 23)

To be exempt from income tax under Section 30 (E) and (G) of the Tax Code, a

non-prot, non-stock charitable or social welfare institution must be organized

AND operated exclusively for charitable or social welfare purposes. (Page 24)

In claims for refund of excess input taxes attributable to zero-rated sales, a

taxpayer may le a Petition for Review with the CTA within 30 days from receipt

of the adverse decision of the Commissioner of Internal Revenue (CIR), or from

the lapse of the 120-day period for the CIR to act on the claim. (Page 26)


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U Co. can le an Annual Information Return instead of an income tax return on or

before the 15th day of the 4th month following the end of its taxable year. The BIR

shall conduct an investigation on the activities undertaken during the period. The

letter of exemption shall be issued depending on the results of such investigation.

However, U Co. is subject to the corresponding internal revenue taxes on its

income derived from any of its properties, real or personal, or any activity

conducted for prot, regardless of the disposition thereof. Also, interest income

from currency bank deposits and yield or any other monetary benet from

deposit substitute instruments and from trust funds and similar arrangements,

and royalties derived from sources within the Philippines are subject to the 20%

nal withholding tax (FWT), provided that interest income derived by U Co. from

a depository bank under the expanded foreign currency deposit system shall be

subject to a 7.5% FWT.

U Co. is also required to le on or before the 15th day of the 4th month following

the end of the accounting period a Prot and Loss Statement and Balance Sheetwith the Annual Information Return under oath, stating its gross income and

expenses incurred during the preceding period and a certicate showing that

there has not been any change in its By-laws, Articles of Incorporation, manner of

operation and activities, as well as sources and disposition of income.

U Co. shall likewise be constituted as a withholding agent for the Government if

it acts as an employer and its employees receive compensation income subject to

withholding tax (WT) on compensation, or if it makes payments to individuals or

corporations subject to the expanded withholding tax (EWT).

For purposes of securing the permanent exemption after the three-year period, U

Co is required to submit the following documents pursuant to RMC No. 14-2001:

1. Certied true copy of the Certicate of Registration with the SEC;

2. Certied true Copy of the Articles of Incorporation which includes the

following provisions:

a. That the corporation is non-stock, non-prot;

b. That the primary purposes for which it was created is one of those

enumerated under Section 30 of the Tax Code;

c. That no part of the net income shall inure to the benet of any of its

members;

d. That the trustees do not receive any compensation ; and

e. In case of dissolutio n, the assets of the corporation shall be transferredto a similar institution or to the Government.

3. Certied true copy of the By-laws;

4. Certied true copy of the Annual Information Returns and nancial

statements for the last 3 years of operation;

5. Certication under oath that there has not been any change in the By-laws,

Articles of incorporation, manner of activities, as well as the sources and

disposition of income; and

6. BIR Certicate of Registration.


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8 Tax Bulletin

BIR Form No. Form Name

0 605 Payme nt Fo rm

1 6 00 M o n th l y R e mi t ta n c e R e tu r n o f Va l u e -A d de d Ta x a n d O t h er

Percentage Taxes Withheld1600WP Remittance Return of Percentage Tax on Winnings and Prizes

Withheld by Race Track Operators

1 6 0 1- C M o n th l y R e mi t ta n c e R e tu r n o f I n c om e Ta x es W i t hh e l d o n

Compensation

1 6 01 - E M o n th l y R e mi t ta n c e R e tu r n o f C r e di t a bl e I n c om e Ta x es

Withheld (Expanded)

1 6 0 1- F M o n th l y R e mi t ta n c e R e tu r n o f F i n a l I n c om e Ta x es W i t hh e l d

1 6 02 M o n th l y R e mi t ta n c e R e tu r n o f F i n a l I n c om e Ta x es

Withheld on Interest Paid on Deposits and Yield on Deposit

Substitutes/Trusts/Etc.

1 6 03 Q u a r te r l y R e mi t ta n c e R e tu r n o f F i n a l I n c om e Ta x es W i t hh e l don Fringe Benets Paid to Employees Other than Rank and

File

1604-CF Annual Information Return of Income Taxes Withheld on

Compensation and Final Withholding Taxes

1 6 04 - E A n n ua l I n fo r m at i o n R e tu r n o f C r e di t a bl e I n c om e Ta x es

Withheld (Expanded)/Income Payments Exempt from

Withholding Tax

1 6 06 W i t hh o l di n g Ta x R e mi t ta n c e R e tu r n f o r O n e ro u s Tr a ns f er o f

Real Property Other than Capital Asset (Including Taxable

and Exempt)

1 7 01 Q Q u a r te r l y I n c om e Ta x R e tu r n f o r S e l f- E m pl o ye d I n d iv i d u al s ,Estates and Trusts (Including those with both business and

compensation income)

1 7 02 Q Q u a r te r l y I n c om e Ta x R e tu r n f o r C o r po r at i o n s, P a r tn e r sh i p s,

and Other Non-Individual Taxpayers

1 7 04 I m pr o pe r l y A c cu m u la t e d E a rn i n g s Ta x R e tu r n

1 7 06 C a p it a l G a i ns Ta x R e tu r n f o r O n e ro u s Tr a ns f er o f R e al

Property Classied as Capital Asset (both Taxable and

Exempt)

1 7 07 C a p it a l G a i ns Ta x R e tu r n f o r O n e ro u s Tr a ns f er o f S h a re s o f

Stocks Not Traded Through the Local Stock Exchange

1 80 0 D on or s Ta x Re tu rn1 80 1 E sta te Ta x Re tu rn

2 0 00 D o c um e n ta r y S t am p Ta x D e c l a ra t i o n/ R et u r n

2000-OT Documentary Stamp Tax Declaration/Return (One-Time

Transactions)

2 2 00 A E x ci s e Ta x R e tu r n f o r A l c oh o l P r od u c ts

22OOAN Excise Tax Return for Automobiles & N on-Essential G oods

2 2 0 0M E x ci s e Ta x R e tu r n f o r M i n er a l P r od u c ts

2 2 00 P E x ci s e Ta x R e tu r n f o r P e tr o le u m P r od u c ts

2 2 00 T E x ci s e Ta x R e tu r n f o r To b a cc o P r od u c ts

2 5 5 0M M o n th l y Va l u e -A d d ed Ta x D e c l a ra t i o n2 5 50 Q Q u a r te r l y Va l u e -A d d ed Ta x D e c l ar a ti o n


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BIR Form No. Form Name

2 5 51 M M on t hl y P er ce n ta g e Ta x R et ur n

2 5 51 Q Q ua r te r ly P er ce n ta g e Ta x R et ur n

2 5 5 2 P e rc e n ta g e Ta x R e tu r n f o r Tr a ns a c ti o n s I n vo l v i ng S h a re s o fStock Listed and Traded Through the Local Stock Exchange

or Through Initial and/or Secondary Public Offering

2 5 5 3 R e tu r n o f P e rc e n ta g e Ta x P ay a bl e u n d er S p e ci a l L a ws

The eBIRForms shall be available to all non-eFPS taxpayers with or without

internet access. For taxpayers with internet access, they can download the

forms from the BIR website. For taxpayers without internet access, they can

download the forms from the BIR e-lounges.

The eBIRForms shall be printed on folio size bond paper (8.5 x 13), portrait

orientation/ layout and page set up margins shall be Left: 0.146, Right:0.148,

Top: 0.14, Bottom: 0.14 inches.

Revenue Memorandum Circular No. 62-2012 dated October 25, 2012

The VAT on the sale of electric ity and ancillary services shall be paid by the

distribution companies and electric cooperatives, together with generation and

other fees.

The new process requires the distributi on companies and electri c cooperatives

to pay the VAT upfront. This departs from the old procedure where the

distribution companies and electric cooperatives remit the VAT on the sale of

electricity and other ancillary services only after they have collected from theend-user.

The VAT paid may not be claimed as input VAT by the distributi on companies

and electric cooperatives as these are mere pass-through charges.

The amount paid for electric ity and ancilla ry services, including VAT, may be

offset against the amount collected from the end-users by the distribution

companies and electric cooperatives.

All outstanding deferred VAT (VAT on generation and other VAT-taxable

power related charges where the charges were already paid by the distribution

companies and electric cooperatives to the generation companies, aggregators,

market operators, retail electricity, suppliers and other suppliers of electricity)

in the books of the generation companies, aggregators, market operators, retail

electricity suppliers and other suppliers of electricity up to billing period ending

August 25, 2012, shall be remitted on or before the deadline for ling of the

monthly VAT declaration for October, which is November 20, 2012.

Distributi on companies and electri c cooperatives are required to remit the VAT

on their purchases prior to August 25, 2012 to the generation companies,

aggregators, market operators, retail electricity suppliers and other suppliers of

electricity on or before November 15, 2012.

Failure to do so shall warrant the imposition of penalties, surcharges and

interest provided for under the Tax Code.

The new procedure shall take effect beginnin g with billin g period August 26 to

September 25, 2012.

RMC No. 62-2012 claries the new

procedure for paying VAT upfront,

together with generation and other

fees, by distribution companies and

electric cooperatives on the sale of

electricity and other ancillary services.


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tax bulletin - october 2012

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