BIR CIRCULARIZES THE BOI RESOLUTION ON PEZA LOGISTICS SERVICE ENTERPRISES INCLUSION IN THE SIPP & RELATED TAX INCENTIVES

 


Other Relevant Tax Updates:

  1. TAX & BUSINESS-RELATED NEWS [JANUARY 30-FEBRUARY 6]
  2. BIR CIRCULARIZES THE BOI RESOLUTION ON PEZA LOGISTICS SERVICE ENTERPRISES INCLUSION IN THE SIPP & RELATED TAX INCENTIVES
  3. BIR CLARIFIES WHAT IS MEANT BY A RETURN PROCESSING SYSTEM, THUS, NO NEED FOR A LETTER OF AUTHORITY
  4. BIR CIRCULARIZES THE NATIONAL PRIVACY COMMISSION OPINIONS ON DATA GATHERING ACTIVITIES OF THE BIR
  5. SEC LEGAL OPINION ON CONVERTIBLE & REDEEMABLE SHARES
  6. CTA CASE ON INVOICING REQUIREMENT
  7. DOJ OPINION ON 100% FOREIGN OWNERSHIP OF RENEWABLE ENERGY DEVELOPMENT

1. TAX & BUSINESS-RELATED NEWS [JANUARY 30-FEBRUARY 6]

  1. QCPD arrests UP prof over alleged non-remittance of SSS contributions; orgs call for her release
  2. SEC studies new rules for cryptocurrencies
  3. House approves bill to protect PH freelancers, gig economy workers
  4. ‘Proposed PPA cargo tracker will hike, not lower, costs’
  5. Power co-ops’ finances under close scrutiny
  6. 95-MW solar farm in Ilocos Norte town to supply Luzon grid
  7. Ilonggos crack jokes over P680-M flyover used as pedestrian overpass
  8. Mining company denies ‘illegal operations’ on Sibuyan Island
  9. Sy, Musk venture to finally offer internet services in PH by March
  10. Marcos gov’t OKs 1st PPP project: P 6-B UP-PGH Cancer Center
  11. Ex-BIR official nabbed for alleged extortion
  12. BIR files 74 cases of tax evasion
  13. Bangko Sentral warns public vs fake P150 bill design
  14. Hong Kong to Give Away 500,000 Air Tickets to Revive Tourism
  15. Gov’t employees welcome bill for earlier optional retirement: CSC
  16. Work plan eyed to address Greenhills inclusion in US piracy watch list
  17. Zomato stops operations in Metro Manila, other PH locations
  18. Luis Manzano seeks NBI probe into Flex Fuel investment mess
  19. Supreme Court voids SEC rules mandating accreditation of CPAs
  20. PSALM: Casecnan hydro plant draws 14 groups
  21. Bolinao town records 643K tourist arrivals in 2022
  22. Hitachi Rail, Transport dep’t sign Malolos-Tutuban rail deal
  23. BIR eyes measures to offset losses from tourist VAT refunds
  24. ‘Pilit ako pinapaamin’: Landmark cashiers coerced into admitting alleged theft
  25. Taxing the rich? Bill seeks expanding list of non-essential goods, increase tax
  26. Marcos urges Congress to include housing amortization support in next budget
  27. Japanese contractor told to complete North South Commuter Railway on time

QCPD arrests UP prof over alleged non-remittance of SSS contributions; orgs call for her release [GMA News Online, February 6, 2023]

An initial report by QCPD-Criminal Investigation Detection Unit showed that Professor Melania Flores, former president of All U.P. Academic Employees Union (AUAEU) and resident of UP Campus, Diliman, Quezon City, was arrested around 11 a.m.

https://www.gmanetwork.com/news/topstories/metro/859837/qcpd-arrests-up-prof-over-alleged-non-remittance-of-sss-contributions-orgs-call-for-her-release/story/

SEC studies new rules for cryptocurrencies [Inquirer Mobile, February 6, 2023]

Potential new rules could pave the way for the registration of platforms such as Binance, the world’s biggest cryptocurrency exchange.

https://inqm.news/tqad

House approves bill to protect PH freelancers, gig economy workers [ABS-CBN News, February 6, 2023]

Sec. 19 of the bill also mandates that freelancers shall be entitled to tax relief “within the threshold provided under the National Internal Revenue Code of 1997, as amended, and Republic Act No. 9178, otherwise known as the “Barangay Micro Business Enterprises (BMBEs) Act of 2002.”

https://news.abs-cbn.com/business/02/06/23/house-oks-freelance-workers-protection-act

‘Proposed PPA cargo tracker will hike, not lower, costs’ [Inquirer Mobile, February 6, 2023]

Once the TOP-CRMS is implemented, importers and container users will pay the P980 per container service on top of the insurance coverage for each container.

https://inqm.news/tqar

  Power co-ops’ finances under close scrutiny [Inquirer Mobile, February 6, 2023]

Almeda said the agency decided to revise the categorization process of all power co-ops, taking off from the idea that they are managing the money of member-consumer-owners.

https://inqm.news/tqan

95-MW solar farm in Ilocos Norte town to supply Luzon grid [Philippine News Agency, February 6, 2023]

Consisting of 279,410 solar panels, each panel can produce 340 watts. The area occupies 235.27 hectares within the 1,092.16 forest land use agreement entered into between the Energy Logics Philippines, Inc. (ELPI) and the Department of Environment and Natural Resources (DENR).

https://www.pna.gov.ph/articles/1194486

Ilonggos crack jokes over P680-M flyover used as pedestrian overpass [Manila Bulletin, February 6, 2023]

Despite enduring the inconvenience, Ilonggos were still able to crack jokes over the substandard flyover pet project of former Sen. Franklin Drilon after it was briefly used as a pedestrian overpass on Monday, Feb. 6.

https://mb.com.ph/2023/02/06/ilonggos-crack-jokes-over-p680-m-flyover-used-as-pedestrian-overpass/

Mining company denies ‘illegal operations’ on Sibuyan Island [CNN Philippines, February 5, 2023]

Altai Philippines Mining Corp. (AMPC) on Sunday defended its “lawful” operations on Sibuyan Island in Romblon, as residents demanded to see the company’s permits and licenses.

https://www.cnnphilippines.com/news/2023/2/5/mining-company-defends-operations-sibuyan-island.html

Sy, Musk venture to finally offer internet services in PH by March [Inquirer Mobile, February 4, 2023]

A Starlink satellite dish costs $599 while a monthly subscription is estimated at $99.

https://inqm.news/tqax

Marcos gov’t OKs 1st PPP project: P 6-B UP-PGH Cancer Center [Inquirer Mobile, February 4, 2023]

Garafil said the project would be solicited from the public through the submission of a bid and will be structured as a 30-year Build-Operate-Transfer (BOT) arrangement under the BOT Law.

https://inqm.news/tqas

Ex-BIR official nabbed for alleged extortion [GMA News Online, February 3, 2023]

“Ipinrisinta niya ang sarili niya na siya na ang aayos for a fee. Dahil dati siyang taga BIR, yung format na mga BIR na letters ang pinapadala niya sa mga taong ito dahil alam niya siya ang tatawagan para ayusin, kaya doon nabuking,” said NBI Central Luzon Assistant Regional Director Noel Bocaling.

https://www.gmanetwork.com/news/topstories/nation/859629/ex-bir-official-nabbed-for-alleged-extortion/story/

BIR files 74 cases of tax evasion [Philippine Daily Inquirer, February 3, 2023]

BIR Commissioner Romeo Lumagui Jr. said that of the total 74 complaints, 53 were filed with the Department of Justice amounting to P3.56 billion, while the 21 others were filed in local prosecution offices in the country amounting to P15.9 million.

https://newsinfo.inquirer.net/1724796/bir-files-74-cases-of-tax-evasion

Bangko Sentral warns public vs fake P150 bill design [ABS-CBN News, February 2, 2023]

The Bangko Sentral ng Pilipinas on Thursday said it has not released a P150 banknote featuring Dr. Jose Rizal.

https://news.abs-cbn.com/business/02/02/23/bangko-sentral-warns-public-vs-fake-p150-bill-design

Hong Kong to Give Away 500,000 Air Tickets to Revive Tourism [Bloomberg, February 2, 2023]

The tickets will be distributed through Cathay Pacific Airways Ltd., its budget carrier HK Express as well as Hong Kong Airlines International Holdings Ltd., Fred Lam, chief executive officer of the city’s Airport Authority, said at the briefing. The giveaway will begin at the start of March and last six months, he said, adding there will be different ways to win tickets, such as a lottery system and two-for-one purchases.

https://www.bloomberg.com/news/articles/2023-02-02/hong-kong-is-about-to-give-away-half-a-million-airline-tickets?leadSource=uverify%20wall

Gov’t employees welcome bill for earlier optional retirement: CSC [ABS-CBN News, February 2, 2023]

Government employees are open to the House of Representatives’ move to lower their optional retirement age from 60 to 56.

https://news.abs-cbn.com/video/news/02/02/23/govt-employees-welcome-bill-to-lower-retirement-age-csc

Work plan eyed to address Greenhills inclusion in US piracy watch list [Inquirer Mobile, February 2, 2023]

The Intellectual Property Office of the Philippines (IPOPHL) on Wednesday said it has proposed a work plan to address the inclusion of the Greenhills Shopping Center in San Juan City under the piracy and counterfeiting watch list of the office of the United States Trade Representative (USTR).

https://inqm.news/tpdf

Zomato stops operations in Metro Manila, other PH locations [ABS-CBN News, February 2, 2023]

Restaurant aggregator Zomato has quietly ended operations in the Philippines.

https://news.abs-cbn.com/life/02/02/23/zomato-stops-operations-in-ph

Luis Manzano seeks NBI probe into Flex Fuel investment mess [Inquirer.Net, February 1, 2023]

Actor Luis Manzano recently sought the help of the National Bureau of Investigation (NBI) in probing an investment mess he had been dragged into concerning the Flex Fuel Petroleum Corp., which is part of the ICM Group owned by Ildefonso “Bong” Medel Jr.

https://newsinfo.inquirer.net/1724251/luis-manzano-seeks-nbi-assistance-after-being-dragged-in-investment-mess

Supreme Court voids SEC rules mandating accreditation of CPAs [Rappler, February 1, 2023]

According to the SC, the provisions are against Republic Act No. 9298 or the Philippine Accountancy Act of 2004. It added that the enforcement of the memorandum is ultra vires or beyond the commission’s supposed powers.

https://www.rappler.com/nation/supreme-court-decision-sec-rule-accreditation-cpa/

PSALM: Casecnan hydro plant draws 14 groups [BusinessWorld, February 1, 2023]

Casecnan was turned over to the government last year after the build-operate-transfer contract with the previous operator, Casecnan Water and Energy Co., Inc., expired on Dec. 11, 2021. It is located at Sitio Pauan, Brgy. Villarica, Pantabangan, Nueva Ecija.

https://www.bworldonline.com/corporate/2023/02/01/502283/psalm-casecnan-hydro-plant-draws-14-groups/

Bolinao town records 643K tourist arrivals in 2022 [Philippine News Agency, February 1, 2023]

De Guzman said the most visited attraction in the town in 2022 was its waterfalls, (Bolinao Falls 1, 2 and 3) with 141,846 visitors followed by the Balingasay River with 99,971.

https://www.pna.gov.ph/articles/1194162

Hitachi Rail, Transport dep’t sign Malolos-Tutuban rail deal [BusinessWorld, January 31, 2023]

The Tutuban (Manila)-Malolos (Bulacan) rail project is part of the 163-kilometer NSCR urban rail transit system from Calamba south of the capital to Clark in Central Luzon. It is co-financed by the Japan International Cooperation Agency (JICA) and the Asian Development Bank.

https://www.bworldonline.com/economy/2023/01/31/502226/hitachi-rail-transport-dept-sign-malolos-tutuban-rail-deal/

BIR eyes measures to offset losses from tourist VAT refunds [ABS-CBN News, January 31, 2023]

The Bureau of Internal Revenue is studying ways to properly implement and offset potential losses from the tax refund for tourists which was recently approved by President Ferdinand Marcos Jr, an official said on Tuesday.

https://news.abs-cbn.com/business/01/31/23/bir-says-working-on-tourist-vat-refund-policies

‘Pilit ako pinapaamin’: Landmark cashiers coerced into admitting alleged theft [Rappler, January 31, 2023]

Senator Raffy Tulfo says that at least 36 Landmark cashiers have reported similar stories of being accused of stealing cash and then being intimidated by store security.

https://www.rappler.com/business/landmark-mall-cashiers-response-alleged-theft-senate-hearing-january-2023/

Taxing the rich? Bill seeks expanding list of non-essential goods, increase tax [Inquirer.Net, January 31, 2023]

According to Salceda in the bill’s explanatory note, the bill is the easiest way to tax wealth through “conspicuous or luxurious consumption and through taxation of immovable assets (i.e., land).”

https://newsinfo.inquirer.net/1723676/tax-the-rich-bill-seeks-expanding-list-of-non-essential-goods-increase-tax

Marcos urges Congress to include housing amortization support in next budget [ABS-CBN News, January 31, 2023]

Speaking to tricycle drivers and operators who are beneficiaries of the housing project in Batasan, Quezon City, Marcos said he and Housing Secretary Jerry Acuzar are mulling some P1-billion worth of initial subsidy for this.

https://news.abs-cbn.com/business/01/31/23/marcos-to-congress-support-housing-loans-in-budget

Japanese contractor told to complete North South Commuter Railway on time [Bilyonaryo, January 30, 2023]

Designed to operate under a speed of 120 kilometers per hour, the rail line will reduce travel time between Makati City and Clark International Airport in less than two hours through the Airport Express Service, while servicing 350,000 passengers daily.

https://bilyonaryo.com/2023/01/30/japanese-contractor-told-to-complete-north-south-commuter-railway-on-time/business/

2. BIR CIRCULARIZES THE BOI RESOLUTION ON PEZA LOGISTICS SERVICE ENTERPRISES INCLUSION IN THE SIPP & RELATED TAX INCENTIVES

Revenue Memorandum Circular (RMC) No. 15-2023, issued on February 3, 2023, circularizes the full text of Memorandum Circular No. 2023-001 of the Board of Investment (BOI) through Board Resolution Number 02-01, Series of 2023, which clarifies the coverage of logistics services as “activities in support to exporters” under the 2022 Strategic Investment Priority Plan (SIPP).

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3. BIR CLARIFIES WHAT IS MEANT BY A RETURN PROCESSING SYSTEM, THUS, NO NEED FOR A LETTER OF AUTHORITY

Revenue Memorandum Circular (RMC) No. 7-2023, issued on January 17, 2023, clarifies the Return Processing System (RPS) Assessment being issued by the BIR. The “RPS Assessment” is a Collection Letter and sending of which is part of the civil/administrative remedies of the BIR. Its contents are not tax assessments arising from the audit/investigation of the taxpayer’s books of accounts and other relevant records. These are tax payables based on the taxpayer’s own tax declaration as reflected in the tax returns filed. Since no books of accounts and accounting records of the taxpayer are to be examined or subjected to an audit, the issuance of a Letter of Authority shall not be required.

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4. BIR CIRCULARIZES THE NATIONAL PRIVACY COMMISSION OPINIONS ON DATA GATHERING ACTIVITIES OF THE BIR

Revenue Memorandum Circular (RMC) No. 6-2023, issued on January 17, 2023, circularizes the National Privacy Commission (NPC) Opinions upholding the authority of the BIR on its mandate of data gathering in relation to its tax enforcement, assessment, and collection functions, to obtain personal and sensitive information from any person, including from any office or officer of the national and local governments, government agencies and instrumentalities and government-owned or controlled corporations, pursuant to Section 4 (e) of Republic Act (RA) No. 10173, or the “Data Privacy Act (DPA) of 2012”, in relation to Section 5(B) of the 1997 Tax Code, as amended. 

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5. SEC LEGAL OPINION ON CONVERTIBLE & REDEEMABLE SHARES

[PREFERRED SHARES CANNOT BE CONVERTED INTO COMMON SHARES IN THE ABSENCE OF EXPRESS PROVISION IN AOI] [CORPORATION MAY RECLASSIFY ITS SHARES PROVIDED THAT IT HAS A CONVERTIBILITY FEATURE]

P Co. is requesting an opinion on the following: (1) whether foreign-held common shares can be reclassified into redeemable shares; (2) whether foreign-held preferred shares can be redeemed in cash regardless of the existence of unrestricted retained earnings; (3) after the redemption, whether preferred shares can be reclassified into common shares. In reply, the Commission referred to Section 6 of the Republic Act (RA) No. 11232 or the Revised Corporation Code of the Philippines (RCCP), which states that stock corporations are authorized to divide shares into classes or series of shares, or both, any of which classes or series of shares may have such rights, privileges, or restrictions as may be stated in the AOI. The conversion of shares can only be effected if the shares have a convertibility feature expressly provided for in the AOI. Therefore, a corporation may reclassify its shares through an amendment of the AOI, provided that the shares have a convertibility feature expressly provided in the AOI, and subject to approval by the Commission. This authority of a corporation to reclassify its shares includes the creation of redeemable shares subject to compliance with the requirements under the RCCP and the 1982 SEC Rules Governing Redeemable and Treasury Shares. On redemption of shares, Section 40 of the RCCP is instructive on the matter. Accordingly, P Co. may redeem its redeemable shares, regardless of the existence of unrestricted retained earnings, provided that it has, after such redemption, sufficient assets in its books to cover debts and liabilities inclusive of capital stock. Lastly, on the effect of redemption, to enable P Co. to reissue the same, an amendment to the AOI must be made specifically to provide that after redemption, the redeemed shares shall be reissued as common shares, subject to other requirements imposed by the Commission. [SEC OFFICE OF THE GENERAL COUNSEL LEGAL OPINION NO. 22-17, NOVEMBER 23, 2022]

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6. CTA CASE ON INVOICING REQUIREMENT

[ABSENCE OF OFFICIAL RECEIPTS ISSUED IN A NAME APPROVED & AUTHORIZED BY THE SECURITIES & EXCHANGE COMMISSION IS TANTAMOUNT TO NON-COMPLIANCE WITH THE SUBSTANTIATION REQUIREMENTS] [VAT-REGISTERED PERSONS ARE REQUIRED TO PRINT THEIR TIN FOLLOWED BY THE WORD “VAT” IN THEIR INVOICES OR RECEIPTS]

Both Commissioner of Internal Revenue (CIR) and Kepco Ilijan Corporation (KEILCO) filed their Petitions for Review assailing the Court’s earlier Decision and Resolution partially granting KEILCO’s claim for a refund or issuance of a Tax Credit Certificate (TCC) of its unutilized input Value-Added Tax (VAT) attributable to its zero-rated sales of electricity. CIR alleged that the judicial claim was prematurely filed and that KEILCO failed to comply with the invoicing requirements for it to be entitled to a tax refund or issuance of a TCC. On the other hand, KEILCO contended that it is entitled to a full refund and that it should not be faulted for the alleged failure of its suppliers/sellers to comply with the invoicing requirements. In ruling, the Court held that KEILCO need not observe the 120-day mandatory period before it could file a judicial claim with the CTA. Moreover, the mere allegation that KEILCO failed to comply with the invoicing requirements will not merit a reversal of the grant of tax refund or issuance of TCC. However, the Court ruled that the Court in Division correctly disallowed the amount of Php 47,559,061.24 for failure to comply with the invoicing requirements. The disallowed official receipts and invoices, which do not show KEILCO’s name, Tax Identification Number (TIN), address, and no “TIN-VAT” printed, cannot be considered as VAT invoices/official receipts, and would not give rise to any creditable input VAT in favor of KEILCO. Also, the Court cannot assume that the name “KEPCO” in the disallowed official receipts and invoices refer to one entity, KEILCO. Consequently, the Petitions were both DENIED[COMMISSIONER OF INTERNAL REVENUE VS. KEPCO CORPORATION, CTA EN BANC CASE NO. 2475 & KEPCO ILIJAN CORPORATION VS. COMMISSIONER OF INTERNAL REVENUE, CTA EN BANC CASE NO. 2477, JANUARY 9, 2023]

7. DOJ OPINION ON 100% FOREIGN OWNERSHIP OF RENEWABLE ENERGY DEVELOPMENT

[RENEWABLE ENERGY DEVELOPMENT IS ALLOWED TO BE 100% FOREIGN OWNERSHIP] [KINETIC ENERGY IS NOT WITHIN THE AMBIT OF CONSTITUTIONAL RESTRICTION]

The Department of Trade and Industry (DTI) is requesting an opinion on whether 100% foreign ownership is allowed for Renewable Energy (RE) development under the Constitution. The DTI explained that it could not have been the intention of the framers of the Constitution to impose foreign investment limitations on the exploration, development, and utilization (EDU) of resources that are not capable of appropriation and considered inexhaustible. In this regard, the DTI proposes to amend the Implementing Rules and Regulations (IRR) of the Republic Act No. 9513, or the Renewable Energy (RE) Law to fully achieve its objectives to accelerate the exploration and development of RE development strategies to reduce the country’s dependence on fossil fuels and thereby minimize the country’s exposure to price fluctuations in the international markets. In opining, the Department of Justice (DOJ) reiterated their previous Opinion No. 21 which provides that the EDU of solar, wind, hydro and ocean or tidal energy should not be subject to the 40% foreign equity limitation because kinetic energy sources are beyond the ambit of the term “natural resources.” With respect to the proposal that Section 19 of the RE Law be amended to clarify that kinetic energy sources are not covered by the constitutional prohibition and could therefore be fully liberalized, Opinion No. 21 stated that it is imperative to amend the said IRR to give meaning and purpose to this Opinion. Hence, the proposed amendment of the IRR of RE Law can be considered consistent with the Constitution. [DEPARTMENT OF JUSTICE OPINION NO. 23, SERIES OF 2022, OCTOBER 24, 2022]

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