SUPREME COURT CASES ON SEC ACCREDITATION OF INDIVIDUAL CPAs & SSS NON-REMITTANCE OF CONTRIBUTIONS
Other Relevant Tax Updates:
- TAX & BUSINESS-RELATED NEWS [JANUARY 24-30]
- SUPREME COURT CASES ON SEC ACCREDITATION OF INDIVIDUAL CPAs & SSS NON-REMITTANCE OF CONTRIBUTIONS
- BIR ANNOUNCES THE EXPANDED SERVICES OF ORUS
- BIR TAX ADVISORY ON DEADLINE OF SUBMISSION OF 1604C FOR TAXPAYER WITH PERA TAX CREDITS
- BIR CIRCULARIZES ELECTRONIC ONETT FOR SELLERS HABITUALLY ENGAGED IN THE SALE OF REAL PROPERTY
- BIR CIRCULARIZES THE AVAILABILITY OF THE REVISED BIR FORMS 1606 & 1706
- FIRB CLARIFIES THE IMPOSABLE PENALTY IN CASE OF VIOLATION OF THE WFH THRESHOLD
- FIRB ISSUES SUPPLEMENTAL GUIDELINES ON WFH TRANSFER TO BOI
- FIRB ANNOUNCES THE AVAILABILITY OF TEMPLATES FOR THE CERTIFICATE OF ENTITLEMENT TO TAX INCENTIVES (CETIs)
- PEZA CIRCULARIZING FIRB 1-2023 ON THE SUPPLEMENTAL GUIDELINES ON BOI REGISTRATION OF IT-BPM ECOZONES & FREEPORT ZONES ADOPTING 100% WORK-FROM-HOME
1. TAX & BUSINESS-RELATED NEWS [JANUARY 24-30]
- Sibuyan folk fear nickel mining will destroy ‘Galapagos of Asia’
- Philippines Securities Regulator Seeks Comment on Draft Crypto Rules
- Philippines gives go-ahead for its first small-scale LNG terminal amid preparations for gas imports
- BIR chief conducts nationwide enforcement vs illicit cigarette traders
- DTI weighs ban or tax on raw nickel exports
- Senators want experts’ views on VAT refund for foreign tourists
- BCDA to bid out P1-B Morong Discovery Park infra works
- Marcos OKs VAT refund for foreign tourists to boost travel to PH
- House leaders want to give president power to suspend PhilHealth rate hikes
- UK PM fires Conservative chairman after tax probe: govt
- Coca-Cola, Philsurin help Negros sugar farmers
- Court rejects SMC move to hike rate in 2019 power deal
- DMCI, UnionBank replace Megaworld, Robinsons Land in PSEi
- Indonesian firm to localize ABS-CBN shows
- SC says TRAIN Act constitutional
- SC ruling on TRAIN law shows judiciary respects Congress’ role — Salceda
- Billionaire Adani’s Empire Loses $51 Billion in 48 Hours
- BIR raids stores in Cebu for selling illicit cigarettes
- The onion problem: DOST, 2 universities eye vertical farms to solve onion scarcity
- Justin Bieber sells music rights for $200 million
Sibuyan folk fear nickel mining will destroy ‘Galapagos of Asia’ [The Philippine Star, January 30, 2023]
Sibuyan Island has been called the “Galápagos of Asia” because it is isolated from the Philippine archipelago. The volcanic islands of Galápagos, which lie 600 miles off the coast of Ecuador, are famous for a wealth of unique plants and animals found nowhere else in the world.
Philippines Securities Regulator Seeks Comment on Draft Crypto Rules [CoinDesk, January 30, 2023]
The regulator published its plans for implementing rules and regulations set out in the Financial Products and Services Consumer Protection Act approved by former President Rodrigo R. Duterte in May. While the act does not name individual financial services or products, the SEC’s draft of rules for implementation, published Jan. 20, includes crypto in its classification of securities.
Philippines gives go-ahead for its first small-scale LNG terminal amid preparations for gas imports [Offshore Energy, January 30, 2023]
According to the information on the developer’s website, Samat’s Mariveles LNG terminal will be the first small-scale LNG terminal in the Philippines. At the same time, it is the country’s seventh LNG project.
MARINA gathers maritime experts to craft, polish policies on shipbuilding, repair [Manila Bulletin, January 30, 2023]
The Maritime Industry Authority (MARINA) disclosed Monday, Nov. 31, that it has met with maritime experts and primary stakeholders to discuss the formulation and review of its policies on shipbuilding and ship repair (SBSR).
BIR chief conducts nationwide enforcement vs illicit cigarette traders [The Manila Times, January 30, 2023]
The government is losing up to P100 billion in tax revenues from the illicit tobacco trade, which is intended to fund basic services including the Universal Health Care program and other national development goals.
DTI weighs ban or tax on raw nickel exports [Manila Bulletin, January 30, 2023]
Nickel is a key component in the lithium-ion battery cells used in electric vehicles. The lithium battery is the most expensive part of an EV, accounting for more than 50 percent of the cost of the car. Nickel packs more energy into batteries and allows producers to reduce use of cobalt, which is more expensive and has a less transparent supply chain.
Senators want experts’ views on VAT refund for foreign tourists [GMA News Online, January 30, 2023]
On Sunday, the Presidential Communications Office said President Ferdinand “Bongbong” Marcos Jr. approved the implementation of the VAT Refund Program for foreign tourists by 2024 upon the recommendation of the Private Sector Advisory Council’s tourism sector group.
BCDA to bid out P1-B Morong Discovery Park infra works [Manila Bulletin, January 30, 2023]
The Bases Conversion and Development Authority (BCDA) is bidding out the construction of road, utilities and preparatory roads at Morong Discovery Park for over P1 billion.
Marcos OKs VAT refund for foreign tourists to boost travel to PH [ABS-CBN News, January 29, 2023]
Foreign tourists in the Philippines can expect VAT refunds on their purchases starting 2024 after President Ferdinand Marcos Jr approved the measure, Malacanang said on Sunday.
House leaders want to give president power to suspend PhilHealth rate hikes [Philippine Star, January 29, 2023]
House Bill No. 6772 filed January 13 but distributed to the press on Sunday wants to allow the president to suspend and adjust PhilHealth premium rate hikes “upon the recommendation of the PhilHealth board … during national emergencies or calamities, or when public interest so requires.”
UK PM fires Conservative chairman after tax probe: govt [ABS-CBN News, January 29, 2023]
British Prime Minister Rishi Sunak on Sunday fired Conservative party chairman Nadhim Zahawi after an inquiry into Zahawi’s tax affairs found a “serious breach” of ministerial rules, the government said.
Coca-Cola, Philsurin help Negros sugar farmers [Inquirer Mobile, January 29, 2023]
Coca-Cola Foundation Philippines and nonprofit Philippine Sugar Research Institute Foundation (Philsurin) are developing high-yielding sugarcane varieties and disease-free seeds for Negros farmers.
Court rejects SMC move to hike rate in 2019 power deal [Inquirer Mobile, January 28, 2023]
The 2019 supply contract between SMEC and Meralco was priced at P4.6314 per kilowatt-hour (kWh) covering 330 megawatts. SMEC had asked ERC for an additional P0.30 per kWh to recover the rising costs of operations amid skyrocketing coal and fuel prices as war continued between Russia and Ukraine.
DMCI, UnionBank replace Megaworld, Robinsons Land in PSEi [Inquirer Mobile, January 28, 2023]
The Philippine Stock Exchange (PSE) is revamping the composition of its main index on Feb. 6, announcing the return of Consunji-led DMCI Holdings Inc. and the Aboitiz family’s Union Bank of the Philippines.
Indonesian firm to localize ABS-CBN shows [ABS-CBN News, January 27, 2023]
ABS-CBN Corporation has signed a content localization partnership with PT Vidio Dot Com so that television and other device screens in Indonesia can now play more Philippine series and a drama anthology.
SC says TRAIN Act constitutional [Inquirer.Net, January 27, 2023]
The SC, through Associate Justice Japar Dimaampao, said that “the Constitution, in its present form, does not prohibit the imposition of regressive taxes, but merely directs Congress to evolve a progressive system of taxation.”
SC ruling on TRAIN law shows judiciary respects Congress’ role — Salceda [Inquirer.Net, January 27, 2023]
Salceda, chairperson of the House of Representatives Committee on ways and means tackling taxation measures, said that the SC decision also strengthens his committee as they can move forward with specific bills without fear that the High Tribunal might strike them down.
Billionaire Adani’s Empire Loses $51 Billion in 48 Hours [TheStreet, January 27, 2023]
Asia’s richest man is rocked by a U.S. short-seller’s allegations of fraud and money laundering.
BIR raids stores in Cebu for selling illicit cigarettes [SunStar Cebu, January 26, 2023]
AT LEAST four retail stores operating in a public market in Consolacion town, northern Cebu were raided by personnel of the Bureau of Internal Revenue (BIR) Region 13 office on Wednesday, Jan. 25, 2023, after they were found selling illicit tobacco products.
The onion problem: DOST, 2 universities eye vertical farms to solve onion scarcity [ABS-CBN News, January 25, 2023]
The Department of Science and Technology (DOST) and two universities — Tarlac Agricultural University (TAU) and Nueva Ecija University of Science and Technology (NEUST) — have forged a research partnership to boost the onion supply in the country.
Justin Bieber sells music rights for $200 million [Manila Bulletin, January 24, 2023]
NEW YORK (AFP) – Pop juggernaut Justin Bieber has sold his music publishing and recording catalog shares to the Blackstone-backed Hipgnosis Songs Capital for $200 million, the company said Tuesday — marking the industry’s latest blockbuster rights deal.
2. SUPREME COURT CASES ON SEC ACCREDITATION OF INDIVIDUAL CPAs & SSS NON-REMITTANCE OF CONTRIBUTIONS
[SEC MEMORANDUM CIRCULAR IN 2009 REQUIRING SEC ACCREDITATION OF INDIVIDUAL CERTIFIED PUBLIC ACCOUNTANTS (CPAs) WAS DECLARED VOID] [INDIVIDUAL CPAs ARE NOT UNDER SEC’S AUTHORITY & JURISDICTION, THUS, CANNOT BE GOVERNED BY THE SAME RULES] [THE POWER TO SUPERVISE THE ACCOUNTING PROFESSION & TO IMPOSE REGULATIONS ON CPAs IS EXCLUSIVELY DELEGATED TO THE PROFESSIONAL REGULATORY BOARD OF ACCOUNTANCY]
Petitioner Securities and Exchange Commission (SEC) filed a Petition for Review on Certiorari assailing the earlier Decision and Order of the Regional Trial Court (RTC) declaring void the Rule 68, paragraph 3 of Amended Implementing Rules and Regulations of the Securities Regulation Code (SRC) and SEC Memorandum Circular (MC) No. 13-2009, which require mandatory accreditation of Certified Public Accountants (CPAs) acting as external auditors. Petitioner argued that it is authorized by the SRC and the Corporation Code to impose the assailed issuances, that the said issuances do not contravene the Republic Act (R.A.) No. 9298 or the “Philippine Accountancy Act of 2004” nor restrict the right of accountants to practice their profession, and SEC MC No. 13-2009 does not violate the equal protection clause. In ruling, the Court held that the Petitioner’s reliance on the provisions of the SRC and the Corporation Code is misplaced. The SEC’s jurisdiction is only over juridical entities and their directors, officers, and stockholders, as well as those that directly deal with the securities issued by said entities. Thus, Petitioner acted ultra vires when it issued the assailed regulations, even when there is an executed Memorandum of Agreement with the Board of Accountancy that allows for such accreditation with the SEC. Also, since no law provides for the classification of CPAs, the SEC has no legal mandate to impose its own classification. Moreover, the accreditation requirement has no rational connection with ensuring the reliability of financial reports. The Court ruled that the accreditation requirement imposed by the assailed issuances amounts to a licensing requirement that curtails the right of CPAs to practice their profession. Consequently, the Petition was DENIED. The earlier Decision and Order of the RTC were AFFIRMED. [SECURITIES & EXCHANGE COMMISSION VS. 1ACCOUNTANTS PARTY-LIST, INC., REPRESENTED BY ITS PRESIDENT, CHRISTIAN JAY D. LIM IN HIS CAPACITY AS CPA, FROILAN G. AMPIL, ALLAN M. BASARTE, VIRGILIO F. AGUNOD & JONAS P. MASCARINAS, G.R. NO. 246027, JUNE 21, 2022, UPLOADED JANUARY 27, 2023]
SC RESOLUTION AFFIRMING CONVICTION FOR NOT REMITTING SSS CONTRIBUTIONS WITH MODIFICATION OF PENALTY UNDER THE NEW LAW
Petitioner Patricia Marie A. De Guzman filed a Petition for Review by Certiorari assailing the earlier Decision and Resolution of the Court of Appeals which affirmed her conviction for failure to remit Social Security System (SSS) contributions, in violation of the Social Security Law. In ruling, for the failure of employer Sun and Shield Security Agency, Inc. to remit SSS contributions within the first 10 days of each calendar month following the month for which they are applicable, Petitioner, as a then-director of the corporation, was found accountable for payment of the unpaid contributions and penalties. However, considering that the introduced law amendments are favorable to the Petitioner, the penalty for failure to remit employees’ contributions shall be 2% per month on unremitted contributions from the date the contributions fall due until paid. Consequently, the earlier Decisions and Resolutions were AFFIRMED WITH MODIFICATION AS TO PENALTY, and the Petitioner was found GUILTY beyond reasonable doubt. [PATRICIA MARIE A. DE GUZMAN VS. PEOPLE OF THE PHILIPPINES & SOCIAL SECURITY SYSTEM, G.R. NO. 257317, AUGUST 17, 2022, UPLOADED JANUARY 16, 2023]
3. BIR TAX ADVISORY ON DEADLINE OF SUBMISSION OF 1604C FOR TAXPAYER WITH PERA TAX CREDITS
In a Tax Advisory published on January 27, 2023, the BIR has advised that those employers who do not have employees availing the 5% tax credit under the Personal Equity and Retirement Account (PERA) Act of 2008 shall submit the Annual Information Return of Income Taxes Withheld on Compensation (BIR Form 1604-C), together with the Alphabetical List of Employees/Payees From Whom Taxes Were Withheld, on or before January 31, 2023, or the original schedule of filing of BIR Form 1604-C. Once the corresponding enhanced data entry module is available to cover PERA credits, employers shall submit BIR Form 1604-C within 30 days from the date of posting of an advisory.
3. BIR ANNOUNCES THE EXPANDED SERVICES OF ORUS
Revenue Memorandum Circular (RMC) No. 12-2023, issued on January 27, 2023, circularizes the availability of Registration Information Updates, Secondary Registration, and Other Online Facilities for registration-related transactions through the Online Registration and Update System (ORUS) starting January 23, 2023, which may be accessed by those taxpayers who already have their existing ORUS account. On the other hand, the Bureau requires those taxpayers who do not have an ORUS account and opt to use the said features to enroll or create an account in ORUS.
4. BIR CIRCULARIZES ELECTRONIC ONETT FOR SELLERS HABITUALLY ENGAGED IN THE SALE OF REAL PROPERTY
Revenue Memorandum Circular (RMC) No. 10-2023, issued on January 26, 2023, encourages sellers habitually engaged in the sale of real estate properties like the real estate developers with voluminous One-Time Transactions (ONETT) transactions to use Electronic One-Time Transactions (eONETT) System in securing ONETT Computation Sheet (OCS) and/or Electronic Certificate Authorizing Registration (eCAR) and likewise, encouraged to pay electronically thru the available ePayment channels of the BIR.
5. BIR CIRCULARIZES THE AVAILABILITY OF THE REVISED BIR FORMS 1606 & 1706
Revenue Memorandum Circular (RMC) No. 9-2023, issued on January 26, 2023, circularizes the availability of revised BIR Forms 1606 (For Onerous Transfer of Real Property Other Than Capital Asset) and 1706 (For Onerous Transfer of Real Property Classified as Capital Asset-both Taxable and Exempt) version January 2018.
6. FIRB CLARIFIES THE IMPOSABLE PENALTY IN CASE OF VIOLATION OF THE WFH THRESHOLD
Fiscal Incentives Review Board (FIRB) Advisory No. 003-2023, dated January 27, 2023, clarifies the proper basis of the penalty in case of non-compliance with the Work-From-Home (WFH) threshold for all Investment Promotion Agencies (IPAs) and Registered Business Enterprises (RBEs) in the Information Technology-Business Process Management (IT-BPM) Sector. As advised, non-compliance with the allowable WFH threshold would result in paying the penalty based on 100% or the entirety of the Regular Corporate Income Tax (RCIT) for the month/s of non-compliance and not merely based on the excess of the 30% WFH threshold.
It may be recalled that pursuant to the BIR’s Revenue Memorandum Circular (RMC) No. 23-2022, 39-2022, and 120-22, RBEs that fail to comply with the WFH threshold shall continue to file and pay their income tax due, while the penalty shall be determined by computing the difference between the RCIT and the 5% tax on Gross Income Earned (GIE)/Special Corporate Income Tax (SCIT).
7. FIRB ISSUES SUPPLEMENTAL GUIDELINES ON WFH TRANSFER TO BOI
Fiscal Incentives Review Board (FIRB) Administrative Order No. 001-2023, dated January 16, 2023, provides supplemental guidelines on the registration of existing Registered Business Entities (RBEs) in the Information Technology and Business Process Management (IT-BPM) sector with the Board of Investments (BOI) allowing them to adopt up to 100% Work-From-Home (WFH) arrangements without adversely affecting the enjoyment of their fiscal and non-fiscal incentives. Highlights include the issuance of the BOI Certificate of Registration; application for Certificate of Entitlement to Income Tax Incentives (CETI), Certificate of Authority to Import (CAI), Value-Added Tax (VAT) Zero-Rating Certification which the concerned IPA shall continue to issue; Movement of Capital Equipment and Other Assets within and outside the Economic Zones and/or Freeport Zones within timelines; and step-by-step procedures on securing a Tax Exemption Indorsement (TEI).
8. FIRB ANNOUNCES THE AVAILABILITY OF TEMPLATES FOR THE CERTIFICATE OF ENTITLEMENT TO TAX INCENTIVES (CETIs)
Fiscal Incentives Review Board (FIRB) Advisory No. 002-2023, dated January 19, 2023, circularizes the availability of templates for the Certificate of Entitlement to Tax Incentive (CETI) covering the following: (1) CREATE Projects; (2) Pre-CREATE Projects; and (3) Renewable Energy Projects. All Investment Promotion Agencies (IPAs) are mandated to use the updated templates beginning March 1, 2023.
All CETIs already issued or to be issued on or before February 28, 2023, using the previous template circulated last March 23, 2022, shall remain valid for the corresponding fiscal or calendar year unless canceled, suspended, or withdrawn by the IPA or FIRB, after due process.
9. PEZA CIRCULARIZING FIRB 1-2023 ON THE SUPPLEMENTAL GUIDELINES ON BOI REGISTRATION OF IT-BPM ECOZONES & FREEPORT ZONES ADOPTING 100% WORK-FROM-HOME
PEZA Memorandum Circular No. 2023-004, dated January 17, 2023, circularizes the supplemental guidelines on the registration with the Board of Investments (BOI) of Registered Business Entities (RBEs) in the Information Technology and Business Process Management (IT-BPM) sector.