WEEKLY TAX UPDATES [MAR 14] BIR on non-deductible purchases & input VAT from Cannot Be Located Taxpayers
Other Relevant Tax Updates:
- BUREAU OF INTERNAL REVENUE (BIR) CLARIFIES THE EFFECT OF THE PUBLICATION OF THE CANNOT-BE-LOCATED TAXPAYERS
- SUPREME COURT (SC) CASE
- COURT OF TAX APPEALS (CTA) CASES
- TAX AND BUSINESS-RELATED NEWS [MARCH 6-13]
I. BIR CLARIFIES THE EFFECT OF THE PUBLICATION OF THE CANNOT-BE-LOCATED TAXPAYERS
Revenue Memorandum Circular (RMC) No. 29-2023, issued on March 10, 2023, clarifies the effect of the publication of the list of taxpayers determined as Cannot Be Located (CBL) pursuant to existing guidelines and procedures under RMC No. 98-2010. As reiterated, the purpose of the publication of CBL taxpayers is to give due notice to the public as well, who may, in one way or another, have knowledge of the whereabouts of the published names of taxpayers or have transactions with them. Those with information on the CBL taxpayers’ whereabouts can report to the BIR while those with business transactions with them shall be given precaution in their future transactions as there are tax consequences such as non-deductibility of purchases and disallowance of input tax claimed for purchases with the CBL taxpayers unless the buyer can prove the existence of the supplier tagged as CBL by the BIR and the authenticity of purchases made. These tax consequences, however, shall apply to transactions made after the publication of the name of the CBL taxpayer. In addition, the publication of the names of CBL taxpayers is not a pre-requisite to suspend the running of the prescriptive period to assess under Section 203 of the Tax Code, as amended. Once the handling Revenue Officer has submitted a report that the taxpayer is a CBL and such report is supported by the required documents under existing policies, the suspension of the said prescriptive period already sets in and is tagged in the system as suspended.
II. SC CASE
[RTC JUDGE WAS HELD IGNORANT FOR OVERSTEPPING JURISDICTION OF SEC OVER REVISED CORPORATION CODE] [IF ORDINARY PEOPLE ARE PRESUMED TO KNOW THE LAW, JUDGES ARE DUTY-BOUND TO ACTUALLY KNOW AND UNDERSTAND IT]
Petitioner Securities and Exchange Commission (SEC) filed an administrative complaint for gross ignorance of the law against Respondent Judge Renato V. Tampac. SEC maintained that the Respondent erred in assuming jurisdiction over the case “Alabel Maasim Credit Cooperative (ALAMCCO) vs. SEC” and in issuing a Status Quo Ante Order (SQAO) despite the proscription in Section 179 of the Revised Corporation Code (RCC). In ruling, Section 179 states that “[n]o court below the Court of Appeals shall have jurisdiction to issue a restraining order, preliminary injunction, or preliminary mandatory injunction in any case, dispute, or controversy that directly or indirectly interferes with the exercise of the powers, duties and responsibilities of the [Securities and Exchange] Commission that falls exclusively within its jurisdiction.” Here, the Respondent blatantly disregarded Section 179 of the RCC when he issued the Order providing for an SQAO against the SEC and Resolution permanently enjoining the SEC from posting a public advisory against ALAMCCO on investment scams. The Advisory subject of the Petition before Respondent’s sala was issued pursuant to the SEC’s powers and functions under the Securities and Regulations Code. Thus, the Respondent had no jurisdiction to take cognizance of the case and issue an injunction against the SEC. Consequently, the Respondent Judge was found GUILTY of gross ignorance of the law. [SECURITIES AND EXCHANGE COMMISSION, REPRESENTED BY EMILIO B. AQUINO VS. HON. RENATO V. TAMPAC, A.M. NO. RTJ-21-008, OCTOBER 6, 2021, UPLOADED FEBRUARY 10, 2023]
III. CTA CASES
IMPORTATION OF WHITE RICE IS NOT PROHIBITED BUT REGULATED
Petitioner Commissioner of Customs filed a Petition for Review praying for the reversal of the CTA 2nd Division’s earlier Decision and Resolution. Petitioner argued that the rice shipment found in excess of the quantity allowed under the Respondent Progressive Grains Milling Corporation National Food Authority (NFA)’s import permit is considered a prohibited importation or contrary to law, hence, subject to forfeiture. On the other hand, the Respondent countered that rice is merely a “regulated” and not a “prohibited” commodity and that the subject excess rice may not be considered a prohibited article because the excess rice is still within the 9250 metric tons quota covered by the Respondent’s NFA Certificate of Eligibility for rice importation. In ruling, nothing in the records pointed to collusion or fraud that would make the subject importations unlawful. Here, the Respondent alleged that it was not aware of the excess. Also, the Respondent has already paid in advance all taxes and duties and took immediate action to secure the required import permit for the excess shipments. In the absence of fraud on the part of the Respondent, the Court finds no error in the CTA 2nd Division’s conclusion to release the subject white rice shipments upon the payment of the assessed customs duties, fines, and storage fees. Contrary to the Petitioner’s contention, the law does not specifically prohibit the importation of rice. At most, the subject rice shipments were merely regulated and not prohibited commodities. Consequently, the Petition was DENIED. [COMMISSIONER OF CUSTOMS VS. PROGRESSIVE GRAINS MILLING CORPORATION, CTA EN BANC CASE NO. 2493, FEBRUARY 20, 2023]
[BIR MUST SEND A CONFIRMATION REQUEST OF THIRD-PARTY INFORMATION (TPI) TO TPI SOURCE, WHO, IN TURN, MUST VALIDATE SAID TPI] [ASSESSMENTS CANNOT BE MADE TO REST ON MERE PRESUMPTIONS NO MATTER HOW REASONABLE OR LOGICAL SAID PRESUMPTIONS MAY BE]
Petitioner Grand Geo Spheres Construction Corp. filed a Petition for Review seeking to nullify the Letter Notice (LN) issued by the Respondent Commissioner of Internal Revenue (CIR) demanding payment of the alleged deficiency taxes. Petitioner asserted that the assessment is wanting in legal and factual basis because it stemmed from the discrepancy between sales declared per its tax returns and the purchases of its alleged customers, without obtaining the required sworn statements from Third-Party Information (TPI) sources. On the other hand, the Respondent countered that the assessment was based on the information obtained from the BIR Reconciliation of Listings for Enforcement (RELIEF) system, which is presumed true and correct. In ruling, Revenue Memorandum Order (RMO) No. 30-2003 provides that if the taxpayer is refuting the data appearing in the LN, there must be a confirmation request/s on the TPI source. In turn, the TPI source should confirm the data through a confirmation certificate. Such requirement was not met. Here, the Revenue Officer admitted that the data in the LN, (i.e., purchases of alleged customers from Petitioner, used as the foundation of the Petitioner’s deficiency taxes), were unverified. Given that the purchases were unverified, the Petitioner’s additional revenues/receipts culled therefrom is simply a presumption and not a fact. Hence, the Petition was GRANTED. Consequently, the LN and deficiency taxes were DECLARED VOID. [GRAND GEO SPHERES CONSTRUCTION CORPORATION VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10207, FEBRUARY 6, 2023]
[ANY FEE COLLECTED FROM OCCUPANTS OR GUESTS OF SUCH OCCUPANTS MAY BE CONSIDERED REASONABLE AND NECESSARY FEES FOR THE UPKEEP OF THE CONDOMINIUM AND DOES NOT RENDER IT AS ENGAGED IN BUSINESS] [ANY COLLECTION RECEIVED BY THE CONDOMINIUM CORPORATION FROM MEMBERS FOR THE EXCLUSIVE USE OF AMENITIES DOES NOT PARTAKE OF PROFIT FOR LOCAL BUSINESS TAX PURPOSES]
Petitioners Taguig City Government, its Mayor, and City Treasurer filed a Petition for Review seeking that a new decision be rendered ordering the Respondent Serendra Condominium Corporation liable for payment of Local Business Taxes (LBT), Business Plate/Sticker, and Environmental Impact Fee (EIF). Petitioner mainly argued that the Respondent is engaged in profit-making activities, thus, subject to LBT. Likewise, it maintained that condominium corporations, whether engaged in business or not, are liable for payment of EIF. On the other hand, the Respondent countered that the Court in Division was correct in ruling that Petitioners erroneously imposed LBT, Business Plate/Sticker Fee, and EIF on the Respondent who is not engaged in business. In ruling, the Court held that Petitioners failed to establish the fact that Respondent had actually engaged in business activities. A reading of the Articles of Incorporation and pertinent portions of the Audited Financial Statements do not expressly allow nor show that the Respondent is engaged in profit-making activities. Thus, it is not subject to LBT and business Plate/Sticker Fee. On the other hand, the Court has no jurisdiction to rule on EIF which is a regulatory fee and not a tax. Consequently, the Petition was PARTIALLY GRANTED. [TAGUIG CITY GOVERNMENT, HON. MA. LAARNI CAYETANO, IN HER CAPACITY AS THE (FORMER) MAYOR OF THE CITY OF TAGUIG, AND ATTY. MARIANITO MIRANDA, IN HIS CAPACITY AS THE (FORMER) TREASURER OF THE CITY OF TAGUIG VS. SERENDRA CONDOMINIUM CORPORATION, CTA EN BANC CASE NO. 2404, JANUARY 30, 2023]
IV. AX AND BUSINESS-RELATED NEWS [MARCH 6-13]
- ABS-CBN confirms talks with Rockwell Land for headquarters demolition, redevelopment
- P750 hike in daily wages for private sector workers sought
- Seeking employment in US now easier for Pinoy nurses
- Silicon Valley Bank Crisis a ‘Cyprus Moment’ for Bitcoin: Crypto Observers
- MVP mulls retirement
- Heart Center to rise at Clark Freeport Zone
- Interconnection last issue holding back two Cavite to Batangas toll roads — DPWH
- CAAP bids out Bukidnon Airport’s Phase 4
- What Vice Ganda said about top celebrity taxpayers
- Muntinlupa lauds top 10 taxpayers
- PAL women attendants win case over early retirement policy
- Large taxpayers’ electronic invoicing seen to start next year — BIR
- Aboitiz to double size of its Lima economic zone
- AbaCore partners with Chinese developer to build Batangas resort
- New P238-M bridge provides seamless transport network in Tarlac
- 30 complain of losing cash from GCash accounts, e-wallet firm coordinating with authorities
- ADB invests $15M in DALI ‘hard discount’ grocery chain in Philippines
- 5M Butuan airport terminal opened
- Displaced Hanjin workers fight eviction from housing village in Zambales town
- South Korea announces third visa-free entry route for Filipinos
- Pagcor ends deal with Pogo auditor for failing to fulfill duties, committing unlawful acts
- Why is Indonesia moving its capital from Jakarta to Borneo?
- Baguio’s titling of Burnham Park raises legal issues
- Megaworld township to house commuter railway station
- Gov’t eyes new work hours from 7 a.m. to 4 p.m.
- DBP bucks merger with Landbank
- Verde Island Passage in danger as LNG projects flock to Batangas
- Negotiations for Laguna Lakeshore Road project on
- Personal attendance to wake ain’t required: Manila Pen loses SC case on grant bereavement leaves
- Group urges Marcos to end ‘plunder of resources’ by large-scale mining firms
ABS-CBN confirms talks with Rockwell Land for headquarters demolition, redevelopment [Rappler, March 13, 2023]
ABS-CBN told the Philippine Stock Exchange on Monday, March 13, that it has been in discussions with real estate developers “even prior to the start of the pandemic” for the redevelopment of its 3.4-hectare property in Mother Ignacia Avenue in Diliman, Quezon City, which houses its news and entertainment studios.
P750 hike in daily wages for private sector workers sought [The Philippine Star, March 13, 2023]
Makabayan bloc lawmakers, led by Rep. Arlene Brosas (Gabriela Women’s Party), filed House Bill 7568 on Monday mandating all employers in the private sector to pay their workers an additional P750 in daily wages across the board to allow households to ride the costs of surging inflation.
Seeking employment in US now easier for Pinoy nurses [The Philippine Star, March 13, 2023]
Tuy said that there is a current shortage of 190,000 nurses in the US. Nurses there receive an average monthly salary of $6,900 or higher depending on the specialty and professional experience.
Silicon Valley Bank Crisis a ‘Cyprus Moment’ for Bitcoin: Crypto Observers [CoinDesk, March 13, 2023]
The collapse of Silicon Valley Bank (SVB) is a blessing for bitcoin (BTC), crypto observers said, drawing parallels with the 2013 Crypus crisis that underscored flaws in the fractional reserve system and brought attention to decentralized, censorship-resistant BTC as a hedge against centralized banking.
MVP mulls retirement [The Philippine Star, March 13, 2023]
This developed as MPIC, the Pangilinan-led listed conglomerate, may revisit plans to voluntarily delist from the market as it continues to attract big ticket strategic investors aside from Japanese giant Mitsui.
Heart Center to rise at Clark Freeport Zone [The Manila Times, March 12, 2023]
Executive Order (EO) 19, signed by the Chief Executive on March 8, 2023, underscores the need for the PHC to have its presence in Central Luzon to give more Filipinos access to quality health care, particularly those burdened by cardiovascular diseases.
Interconnection last issue holding back two Cavite to Batangas toll roads — DPWH [BusinessWorld, March 12, 2013]
THE Department of Public Works and Highways (DPWH) said the Cavite-Batangas Expressway (CBEX) and Cavite-Tagaytay-Batangas Expressway (CTBEX) projects will go ahead pending the resolution of interconnection issues.
CAAP bids out Bukidnon Airport’s Phase 4 [Minda News, March 12, 2023]
Located in Barangay Maraymaray in Don Carlos town in the southern part of the province, the airport is one of the flagship projects of the national government in Northern Mindanao.
What Vice Ganda said about top celebrity taxpayers [ABS-CBN News, March 11, 2023]
“FYI yung nasa news po ay mga top tax payers ng RDO (RegionalDistrictOffice) 39. I am one of the Top Tax Payers of RDO 38. I was invited sa ceremony nung Feb 27 pero di po ako naka attend,” Vice Ganda tweeted.
Muntinlupa lauds top 10 taxpayers [Manila Times, March 11, 2023]
The city’s top 10 taxpayers are Filinvest Alabang Inc., Ford Group Philippines Inc., Filinvest Land Inc. – Festival Supermall, Ayala Land Inc., Filinvest Reit Corp., Meralco Business Center, Amkor Technology Philippines, Capital One Philippines Support Services Corp., GenPact Services LLC Philippines Inc.; and Insular Life Assurance Company Ltd.
PAL women attendants win case over early retirement policy [The Philippine Star, March 10, 2023]
Senior Associate Justice Marvic Leonen, who wrote the decision of the SC in January and made public yesterday, said Section 144(A) of the CBA that set the compulsory retirement age of female cabin attendants at 55 years old and male cabin attendants at 60 was discriminatory and void for lack of basis.
Large taxpayers’ electronic invoicing seen to start next year — BIR [BusinessWorld, March 10, 2023]
“There are many challenges with the e-invoicing, but we are working double time so we can take the necessary actions with respect to that. The pilot should be (completed) by June; and by next year, all large taxpayers (should be covered),” BIR Commissioner Romeo B. Lumagui told reporters on Thursday.
Aboitiz to double size of its Lima economic zone [Inquirer Mobile, March 10, 2023]
Aboitiz InfraCapital (AIC), the infrastructure arm of the Aboitiz Group, is looking to expand the size of its 800-hectare (ha) mixed-used property in Batangas by nearly double in ten years, pouring around P30 billion in investments that will see hundreds of billions of pesos in new tax contributions and tens of thousands of new jobs resulting from the move.
AbaCore partners with Chinese developer to build Batangas resort [Inquirer Mobile, March 10, 2023]
In a statement, AbaCore said the project would feature the country’s biggest water amusement park and would cater to religious visitors since it will be built around the Montemaria Shrine, a pilgrimage center.
New P238-M bridge provides seamless transport network in Tarlac [Philippine News Agency, March 10, 2023]
DPWH 3 (Central Luzon) Director Roseller A. Tolentino said the motoring public would now enjoy the benefits of a seamless transportation network connecting the towns of Ramos, Paniqui, and Camiling.
30 complain of losing cash from GCash accounts, e-wallet firm coordinating with authorities [GMA News Online, March 9, 2023]
In a separate statement, GCash said it was now coordinating with the authorities in going after the fraudsters. It also introduced the “Double Safe” security feature, “which uses facial verification as another measure to protect our customers”.
ADB invests $15M in DALI ‘hard discount’ grocery chain in Philippines [GMA News Online, March 9, 2023]
The investment will support the grocery chain’s network of retail stores and distribution centers and cold chain infrastructure in the Philippines, which would create at least 4,300 new jobs, “nearly half of them for women.”
P24.5M Butuan airport terminal opened [Manila Bulletin, March 9, 2023]
Butuan airport currently caters to 12 flights daily from Cebu Pacific and Philippine Airlines, with its 2.1km runway capable of accommodating the 179-seater Airbus 320/321.
Displaced Hanjin workers fight eviction from housing village in Zambales town [Philippine Daily Inquirer, March 9, 2023]
At least 75 former workers of Hanjin Industries and Construction Corp., which went bankrupt in 2017, staged a picket here on Monday (March 6) to protest the notice of eviction they received that forced them out of the housing village provided by the South Korean shipbuilding company.
South Korea announces third visa-free entry route for Filipinos [Manila Bulletin, March 9, 2023]
Starting March 15, Filipino group tourists can enter South Korea visa-free through Muan International Airport.
Pagcor ends deal with Pogo auditor for failing to fulfill duties, committing unlawful acts [Inquirer.Net, March 9, 2023]
The Philippine Amusement and Gaming Corporation (Pagcor) announced on Thursday that it has terminated its P6-billion contract with its controversial third-party auditor for offshore gaming operations.
Why is Indonesia moving its capital from Jakarta to Borneo? [ABC News, March 9, 2023]
Jakarta is congested, polluted, prone to earthquakes and rapidly sinking into the Java Sea. Now the government is in the process of leaving, moving Indonesia’s capital to the island of Borneo.
Baguio’s titling of Burnham Park raises legal issues [Philippine Daily Inquirer, March 9, 2023]
The local government has successfully titled portions of Burnham Park to preserve its man-made lake, the Baguio Orchidarium, the Melvin Jones Grandstand, and its football field, which fall within the alienable public domain, an official said on Monday.
Megaworld township to house commuter railway station [BusinessWorld, March 9, 2023]
Northwin Global City is the company’s newest 85-hectare township. It will feature the Marilao-Bagong Ilog station, which is part of the 147-kilometer North-South Commuter Railway project or the Manila-Clark Railway.
Gov’t eyes new work hours from 7 a.m. to 4 p.m. [Manila Standard, March 8, 2023]
Government agencies may soon adjust their office hours to 7 a.m. to 4 p.m. from Mondays to Thursdays with work-from-home setups on Fridays, Finance Secretary Benjamin Diokno said Tuesday.
DBP bucks merger with Landbank [Philippine Daily Inquirer, March 8, 2023]
According to bank president Michael de Jesus, DBP’s mandate “significantly differs” from that of Landbank, which is expected to be the surviving entity being the bigger bank.
Verde Island Passage in danger as LNG projects flock to Batangas [Rappler, March 7, 2023]
Five existing natural gas-fired power plants – namely, Avion, Sta. Rita, San Lorenzo, San Gabriel, and Ilijan – are in Batangas City. The only other natural gas-fired power plant in the country is in Cebu.
Negotiations for Laguna Lakeshore Road project on [The Manila Times, March 7, 2023]
LLRN Project-Phase 1 will connect Lower Bicutan, Taguig City and Calamba City, Laguna with a main alignment of 37.60 kilometers.
Personal attendance to wake ain’t required: Manila Pen loses SC case on grant bereavement leaves [Bilyonaryo, March 6, 2023]
The high court sided with the Peninsula Employees Union (PEUN) regarding the disapproved bereavement leave requests of staff member Edgar Arevalo and Jefferson Rabaria despite an existing clause under the union’s collective bargaining agreement (CBA) in place from 2014-2016.
Group urges Marcos to end ‘plunder of resources’ by large-scale mining firms [The Philippine Star, March 6, 2023]
“We call on the PBBM administration to listen to the demand of the people, especially those holding barricades in Sibuyan, Romblon; Brooke’s Point, Palawan and Brgy. Didipio, Kasibu, Nueva Vizcaya,” said Jaybee Garganera, a national coordinator of ATM.