BPOS SEEN HIRING UP TO 100,000 THIS YEAR: WORK-FROM-HOME ALSO HERE TO STAY + BIR TELLS TAXPAYERS TO USE ITS ONLINE APPOINTMENT SYSTEM + BIR EYES 24/7 ONLINE TAXPAYER SERVICES
Other Relevant Tax Updates:
- Bureau of Internal Revenue (BIR) Clarifies the Filing of BIR Forms 1604-Cf And 1604-E
- Court Of Tax Appeals (CTA) Cases Digest
- Tax and Business-Related News [February 10-16]
I. BIR CLARIFIES THE FILING OF BIR FORMS 1604-CF AND 1604-E
Revenue Memorandum Circular (RMC) No. 18-2021, dated February 2, 2021, circularizes the clarifications on the filing of BIR Forms 1604-CF and 1604-E. For copies of BIR Form No. 2316, the same shall be accepted even without the signature of employee provided that the certificates are duly signed by the authorized representative of the taxpayer-employer. Moreover, taxpayers who already filed their tax returns thru eFPS and offline eBIRForms package need not submit hard copies to the registered Revenue District Office.
II. CTA CASES DIGEST
- Domestic purchases of Philippine Economic Zone Authority (PEZA)-registered entities are considered zero-rating regardless of the supplier’s registered activities
- Failure to protest and failure to appeal due to the inaction of the assessormade the assessment conclusive and un-appealable; the perfection of an appeal in the manner and within the period laid down by law is not only mandatory but also jurisdictional
- Non-issuance of Letter of Authority (LOA)and service of preliminary assessment notice (pan), formal assessment notice (fan), and Formal Letter of Demand (FLD) to wrong addresses resulting in denial of due process
- Failure of BIR to prove receipt of the assessment by taxpayerwould necessarily lead to the conclusion that no assessment was issued
DOMESTIC PURCHASES OF PEZA-REGISTERED ENTITIES ARE CONSIDERED ZERO-RATING REGARDLESS OF THE SUPPLIER’S REGISTERED ACTIVITIES
Petitioner Wells Fargo Enterprise Global Services, LLC, Philippines filed a Petition for Review seeking refund of unutilized input VAT attributable to its zero-rated sales for the taxable year 2016. Petitioner argued that it has complied with all the requisites on refund as provided for under Section 112 of the 1997 Tax Code. In ruling, the Court ruled that refund is not allowed as no VAT should have been passed to the Petitioner by virtue of its status as a PEZA entity. Pursuant to the Destination Principle, Cross Border Doctrine, and Sections 8 and 25 of Republic Act (R.A.) No. 7916 (PEZA Law), the Court affirmed the non-eligibility of the Petitioner for the refund since domestic purchases of a PEZA entity should be accorded with zero-rating. Moreover, in reference to the Destination Principle, it is not essential that the sale of goods to a PEZA-registered entity be directly connected with the registered activities of the supplier. Hence, Petitioner is not entitled to refund, but may claim refund from its supplier. Consequently, the Court DENIED the Petition. [WELLS FARGO ENTERPRISE GLOBAL SERVICES, LLC-PHILIPPINES VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 9849, FEBRUARY 08, 2021]
[FAILURE TO PROTEST AND FAILURE TO APPEAL DUE TO THE INACTION OF THE ASSESSOR MADE THE ASSESSMENT CONCLUSIVE AND UNAPPEALABLE] [THE PERFECTION OF AN APPEAL IN THE MANNER AND WITHIN THE PERIOD LAID DOWN BY LAW IS NOT ONLY MANDATORY BUT ALSO JURISDICTIONAL]
Petitioner Public Safety Mutual Benefit Fund, Inc. filed a Petition for Review seeking to set aside the CTA 2nd Division’s Decision cancelling the Decision rendered by the Regional Trial Court (RTC) and affirming the assessments issued by Respondent Acting City Treasurer of San Juan City. Petitioner argued that its right to appeal the assessment to the RTC has not yet prescribed; and that it is not subject to Local Business Tax (LBT) since it is a nonstock, non-profit mutual benefit association and not an insurance company. In a general sense, insurance company is subject to the taxing power of the local government pursuant to the Local Government Code (LGC). Also, Petitioner takes a tax shield from an administrative issuance of the Bureau of Local Government Finance (BLGF) Local Finance Circular No. 2-93 which defines “insurance companies” as not including mutual benefit associations. Further, Petitioner asserted that the second Tax Order Payment (TOP2) issued by Respondent has not yet become conclusive and unappealable. On the other hand, Respondent countered that Section 195 of the LGC states in no unambiguous term that the taxpayer shall have thirty (30) days from the receipt of the denial of the protest or from the lapse of sixty-day (60) period prescribed within which to appeal with the court of competent jurisdiction, otherwise, the assessment becomes conclusive and unappealable. Perusal of the documents revealed that Petitioner received the first Tax Order of Payment (TOP1) on November 3, 2015. Petitioner then filed a protest on December 29, 2015. Counting sixty (60) days therefrom, Respondent had until February 27, 2016 to decide the protest. With the inaction of Respondent with the Petitioner’s protest, Petitioner had until March 28, 2016 to appeal before a court of competent jurisdiction. Therefore, Petitioner’s appeal to the RTC on February 22, 2018 was filed out of time. As regards the TOP 2, Petitioner failed to file any written protest. In ruling, the Court held that the TOP 1 and the TOP 2 have both become final, executory and unappealable. Hence, the Petition was DENIED and the earlier Decision and Resolution were AFFIRMED. [PUBLIC SAFETY MUTUAL BENEFIT FUND INC. VS. ACTING CITY TREASURER OF SAN JUAN CITY, CTA EN BANC CASE NO. 2198, JANUARY 15, 2021]
NON-ISSUANCE OF LOA AND SERVICE OF PAN, FAN, AND FLD TO WRONG ADDRESSES RESULTING IN DENIAL OF DUE PROCESS
Petitioner CIR filed a Petition for Review seeking to nullify the CTA Special 3rd Division’s Decision cancelling the assessment issued to Respondent Bostik Philippines Inc. Petitioner argued that the assessment has become final, executory and demandable as the Respondent failed to comply with the jurisdictional period to appeal. Petitioner also alleged that the CTA in Division erred in ruling the assessment void due to the failure of the Petitioner to prove service of the assessment to the Respondent. In ruling, the Court resolved to deny the Petition on the grounds that the Petitioner failed to convert Letter of Notice (LN) to LOA and service of the PAN, FAN, and FLD to wrong addresses. The Court cited Sections (6), (10), and (13), of the 1997 Tax Code and the case of Medicard Philippines Inc. vs. CIR, to put emphasis on the importance of LOA with regard to the validity of the assessment. Likewise, evidence on record established that PAN, FAN, and FLD were sent to wrong addresses resulting in the Respondent being deprived of due process. Finding no reversible error in the assailed Decision and Resolution of the CTA in Division, the Petition was DENIED and the earlier Decision and Resolution were AFFIRMED. [COMMISSIONER OF INTERNAL REVENUE VS. BOSTIK PHILIPPINES INC., CTA EN BANC CASE NO. 2149, JANUARY 14, 2021]
[FAILURE OF BIR TO PROVE RECEIPT OF THE ASSESSMENT BY TAXPAYER WOULD NECESSARILY LEAD TO THE CONCLUSION THAT NO ASSESSMENT WAS ISSUED]
Petitioner Four Seas Trading Corporation filed a Petition for Review seeking cancellation of the assessment issued by the Respondent CIR covering taxable year 2014. Petitioner argued that it was denied of its right for due process; that it was never informed of the findings, nor was it required to respond to any notice as there were never a request for informal conference and copy of PAN AND FAN; that there were no opportunities given to present arguments regarding the deficiency taxes; and that the only document actually served by the CIR was the Final Notice Before Seizure. Respondent countered that the assessment notices were served to the Petitioner’s address through a registered mail. However, perusal of documents revealed that the Petitioner has changed its place of business without giving any written notice to Revenue District Officers of its former and new place of business. In ruling, the Court established that even with the supposed transfer to another office, the Petitioner remained its business address at Binondo as evidenced by the receipt of BIR’s letter dated June 29, 2018 which was received by a security guard. However, it did not establish that the subject notices were served to the Petitioner. It has been settled that while a mailed letter is deemed received, this is merely a presumption which is destroyed when there is a direct denial from the addressee, shifting the burden to prove the receipt of the mail to the sender. To prove that the notices were served, Respondent presented the corresponding faithful reproduction of the original registry receipts of the assessment notices. However, the Court, in reference to the case of CIR vs. T Shuttle Services, Inc., held that the registry receipts do not suffice as evidence that the assessment notices were received by the Petitioner as it merely proves that the notices were mailed. In addition, there is no clear indication that the signatures present in the Registry Receipts would refer to the Petitioner or its authorized representative. Hence, the Petition was GRANTED resulting in the CANCELLATION of the assessment. [FOUR SEAS TRADING CORPORATION VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 9915, JANUARY 11, 2021]
III. TAX AND BUSINESS-RELATED NEWS [FEBRUARY 10-16]
- BIR eyes 24/7 online taxpayer services
- BPOs seen hiring up to 100,000 this year; work-from-home also here to stay
- BIR tells taxpayers to use its online appointment system
- House panel OKs tax exemptions for LGU vaccine procurement
- BIR aims 7.23% hike in 2021 tax collection
- New antimoney-laundering rules to focus on riskier institutions
- 11-month net foreign direct investment inflows down 10.8%
- With few options, BSP keeps rate steady, calls for food imports to ease inflation
- Pre-need firms more than doubled losses amid pandemic-induced recession
- House pressed to expedite bill for P5 maximum interbank ATM fees
- CREATE Act to relax taxation scheme for oil refiners
BIR eyes 24/7 online taxpayer services [Philippine Daily Inquirer, February 16, 2021]
Tax authorities are bracing for the possibility that all Filipino taxpayers would file and settle their dues online as COVID-19 restrictions on movement of people had fast-tracked digitization.
BPOs seen hiring up to 100,000 this year; work-from-home also here to stay [ABS-CBN News, February 15, 2021 ]
The business process outsourcing industry will hire between 80,000 to 100,000 employees this year, sustaining the sector’s yearly recruitment numbers, an industry group said on Monday.
BIR tells taxpayers to use its online appointment system [Manila Bulletin, February 15, 2021]
The Bureau of Internal Revenue (BIR) is asking taxpayers to avail themselves of its online appointment system which is more convenient in transacting business amid the Corona Virus-19 (COVID-19).
House panel OKs tax exemptions for LGU vaccine procurement [Manila Bulletin, February 15, 2021]
The House Committee on Ways and Means on Monday approved the measure providing tax exemptions for local government units (LGUs) to expedite the procurement and administration of vaccines against the COVID-19.
BIR aims 7.23% hike in 2021 tax collection [Manila Bulletin, February 15, 2021]
The Bureau of Internal Revenue (BIR), the government’s main tax collection agency, has laid down its programs for the year to raise its collection performance to support its goal for a 7.23 percent increase in tax collection this year.
New antimoney-laundering rules to focus on riskier institutions [Philippine Daily Inquirer, February 13, 2021]
A new money laundering risk assessment framework is expected to improve the Philippines’ defenses against the traffic of illicitly acquired cash and ensure the country’s compliance with international laws, according to the central bank.
11-month net foreign direct investment inflows down 10.8% [Philippine Daily Inquirer, February 12, 2021]
Long-term investments continued to come into the country at lower numbers as of the first 11 months of last year as the economic uncertainty caused by coronavirus pandemic dampened businesses’ expansion plans, data from the central bank showed.
With few options, BSP keeps rate steady, calls for food imports to ease inflation [Philippine Daily Inquirer, February 11, 2021]
Saying that the Philippines was likely to see higher inflation in the coming months, the central bank on Thursday (Feb. 11) decided to keep its key interest rate unchanged, which starts a “long pause” on monetary easing that Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno had signalled last week.
Pre-need firms more than doubled losses amid pandemic-induced recession [Philippine Daily Inquirer, February 11, 2021]
Pre-need firms more than doubled their losses during the first nine months of last year as sales slumped amid a pandemic-induced recession.
House pressed to expedite bill for P5 maximum interbank ATM fees [Philippine Daily Inquirer, February 11, 2021]
A lawmaker on Thursday called on the House leadership to expedite the passage of a bill that would set interbank transactions in automated teller machines (ATM) at a maximum amount of P5.
CREATE Act to relax taxation scheme for oil refiners [Manila Bulletin, February 10, 2021]
The Congress-ratified Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act will relax the ‘tax regime’ to be enforced for operators of oil refining facilities in the country.
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