IC puts Caritas Health Shield under receivership

Other Relevant Tax Updates:

  1. TAX & BUSINESS-RELATED NEWS [AUGUST 1-7]

  2. BIR RULINGS ON NON-STOCK SAVINGS & LOANS ASSOCIATIONS, TAX CLEARANCE, CAPITAL GAINS TAX IMPOSITION ON OTHER DISPOSITION, DEED OF ASSIGNMENT

  3. FIRB ADVISORY ON NON-LOCAL AVAILABILITY OF MATERIALS

  4. CTA CASE ON VOID ASSESSMENT DUE TO PARTIAL SET-IN OF PRESCRIPTION, IMPROPER SERVICE OF ASSESSMENT NOTICE & PAN & FAN REITERATION

 

1. TAX & BUSINESS-RELATED NEWS [AUGUST 1-7]

1. NPC warns email ‘cc’ misuse risks data breach

2. Senate OKs automatic income classification of LGUs bill on 3rd reading

3. Businesses taking photos of clients’ IDs endangers data – NPC

4. GoTyme Bank wins at 2023 ABF Retail Banking Awards

5. COA calls out inaccuracies in Cebu City’s financial statements

6. IMI posts P4.7-B loss from sale of subsidiary

7. MMDA to issue notice of violation vs construction firm for blocking traffic

8. Eat Bulaga! trademark granted to TAPE Inc.

9. Peza, DOST team up to establish KIST parks

10. IC puts Caritas Health Shield under receivership

11. Baguio to transfer title of Burnham Park to Tieza

12. Gatchalian: Process observed in Waterfront reclamation project

13. 29 percent of workers likely to change employers – survey

14. European apparel brand moves out PHL orders, shifts to Vietnam

15. BIR estimates P370-B revenue losses from ‘ghost receipts’

16. BIR files complaint vs. 127 corporations over P6-B tax liability

17. POGOs, service providers have until Sept. 17 to reapply for licenses – PAGCOR

18. Aboitiz, CCEP acquiring Coca-Cola Beverages Philippines for $1.8B

19. BSP reminds deadline for submission of foreign borrowing plans

20. Discounts for seniors, PWDs mandatory for online purchases —BIR

21. PAGCOR exec admits gaps in inspection of POGOs

22. BIR to support amendments to CREATE Law

23. TVJ-TAPE injunction case hearing canceled due to Tito Sotto’s lack of judicial affidavit

24. BPI eyes finishing merger with Robinsons by early 2024

25. BIR cuts collection goal for large taxpayers

26. RCBC concludes share sale to Japanese bank

2. BIR RULINGS ON NON-STOCK SAVINGS & LOANS ASSOCIATIONS, TAX CLEARANCE, CAPITAL GAINS TAX IMPOSITION ON OTHER DISPOSITION, DEED OF ASSIGNMENT

NON-STOCK SAVINGS & LOANS ASSOCIATIONS ARE SUBJECT TO GROSS RECEIPTS TAX IF THEY ARE ENGAGED IN THE BUSINESS OF BEING A NON-BANK FINANCIAL INTERMEDIARIES UNDER THE BSP MANUAL OF REGULATIONS

NPC Savings and Loan Association (NPCSLA) is requesting a confirmatory ruling on whether a Non-Stock Savings and Loan Association (NSSLA) organized and operated exclusively for the mutual benefit of its members is subject to Gross Receipts Tax (GRT) as clarified in Revenue Memorandum Circular (RMC) No. 9-2016. As represented, the Bangko Sentral ng Pilipinas (BSP) issued a Certificate of Authority to operate as a NSSLA pursuant to the Republic Act (R.A.) No. 3779, as amended by R.A. No. 8367, otherwise known as the “Revised Non-Stock Savings and Loan Association Act of 1997.” In reply, Sections 3 and 5 of R.A. No. 8367 defines tax-exempt NSSLA as one engaged in the business of accumulating the savings of its members and using such accumulations for loans to members to service the needs of households by providing long term financing for home building and development and for personal finance. As clarified in RMC No. 9-2016, it provides that NSSLAs are under the direct supervision and regulation of the BSP and, for regulatory purposes, they are classified as Non-Bank Financial Intermediaries (NBFIs) under the BSP Manual of Regulations. Revenue Regulations (RR) No. 9-2004 imposes GRT on NBFIs engaged in the lending of funds or purchasing of receivables or other obligations with funds obtained from the public. Based on the foregoing, NSSLAs are subject to GRT if they are engaged in the business of being a NBFI as defined under RR No. 9-2004, that is, if the NSSLAs are obtaining funds from the public. However, it may be exempt from GRT if they can prove that they do not engage in activities as NBFI as defined under RR No. 9-2004. Consequently, in the case of NPCSLA, the request for exemption from GRT based only on the representation that its members are all NSSLA organized pursuant to R.A. No. 8367 is denied. [BIR RULING NO. 072-2023, JUNE 7, 2023]

 

TAX CLEARANCE IS NOT PROOF OF OWNERSHIP

V is requesting a ruling for the cancellation of the electronic Certificate Authorizing Registration (eCAR) issued in favor of Ms. M. He questioned the propriety of the subject eCAR which was issued for the Deed of Absolute Sale. V stated that the transfer of ownership from Mrs. C to Ms. M of the subject lot can no longer prosper because of the stringent requirement imposed by the Registry of Deeds (RD), i.e., the confirmation of sale from Mrs. C in favor of Mr. J covered by eCAR. In opining, ruling on whether the subject eCAR should be invalidated would be of no practical value since the subject eCAR is not the deciding factor for the RD on whether to allow the transfer of the subject property in favor of Ms. M or not. eCAR is merely a certification that the appropriate taxes on a transaction have been duly paid. [BIR RULING NO. 053-2023, MAY 19, 2023]

 

THE TAX CODE DOES NOT DEFINE NOR QUALIFY THE PHRASE “OTHER DISPOSITION” FOR THE PURPOSE OF IMPOSITION OF CAPITAL GAINS TAX

Heirs of F are requesting an exemption from Real Property Tax (RPT) and Capital Gains Tax (CGT) relative to the conveyance of a parcel of land taken by the government in 1981 for the subsequent lease to several locators of the government-run and managed Philippine Economic Zone Authority (PEZA) site. In 2019, the subject lot was offered for sale to PEZA. In turn, PEZA offered a price to which Heirs of F agreed. Subsequently, PEZA has ordered Heirs of F to submit all documents for the completion and consummation of the transaction. In the process, it was seen that a notation “Tax Exempt” is indicated in the Deed of Absolute Sale, hence, this request for ruling on whether proceeds of the said transaction shall be tax exempt. In reply, Section 24 (D)(1) of the 1997 Tax Code, as amended, provides that “other disposition” includes all kinds of disposition of real properties unless specifically excluded therefrom or subject to another tax treatment pursuant to the other provisions of the Tax Code. Citing the Supreme Court case of Salud vs. CIR, the Tax Code does not define nor qualify the phrase “other disposition” for the purpose of imposition of CGT. Consequently, the voluntarily sale entered with PEZA falls within the meaning of Section 24 (D)(1) of the 1997 Tax Code, as amended, and profit from the transaction constitutes capital gain. As regards the imposition of RPT, BIR is not in the position to either confirm or deny the exemption from RPT as it is not within its jurisdiction and mandate. [BIR RULING NO. 050-2023, MAY 18, 2023]

 

ABSENCE OF A DEED OF ASSIGNMENT MAY BE SUPPLANTED BY OTHER DOCUMENTS, SUCH AS A COURT DECISION ORDERING THE TRANSFER OF SHARES

The Bureau of Treasury is seeking a ruling for an exemption from the requisite Certificate of Authorizing Registration (CAR), to enable the transfer of shares of stock from the Coconut Industry Investment Fund-Oil Mills Group (CIIF Companies) to the Republic of the Philippines. Alternatively, it requests a waiver of the requirement to submit a Deed of Reconveyance or Deed of Assignment in securing a CAR, which would subsequently enable the transfer of the shares. In reply, the requirement of CAR cannot be waived as it is an indispensable requirement for the proper and legal registration of the transfer of shares of stock in the stock and transfer book of corporations. On the other hand, the submission of a Deed of Assignment may be waived in appropriate cases, particularly when the transfer of legal title of shares is merely a confirmation of its ownership, such as the situation in the present case where the Supreme Court already ruled that the subject shares actually belong to the Republic of the Philippines. [BIR RULING NO. 049-2023, MAY 18, 2023]

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3. FIRB CIRCULARIZES DOF-DTI GUIDELINES ON THE DETERMINATION OF NON-LOCAL AVAILABILITY OF MATERIALS TO BE EXEMPT FROM CUSTOMS DUTY & VAT UNDER CREATE LAW

Fiscal Incentives Review Board (FIRB) Advisory No. 011-2023, dated July 6, 2023, circularizes the Department of Finance and Department of Trade and Industry (DOF-DTI) Joint Memorandum Circular (JMC) No. 001-2023, on the guidelines on the determination of non-local availability of capital equipment, raw materials, spare parts, or accessories under the Corporate Recovery Act and Tax Incentives for Enterprises (CREATE) Act.

 

It may be recalled that under Section 294(D) and 295(C) of the 1997 Tax Code, as amended by the CREATE Act, customs duty exemption on the importation of items directly and exclusively used in the registered project or activity by Registered Business Enterprises (RBEs) may be granted subject to certain conditions. To comply, RBEs shall secure a Certificate of Non-Local Availability (CNLA) from the DTI.

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4. CTA CASE

VOID ASSESSMENT DUE TO SET-IN OF PRESCRIPTION, IMPROPER SERVICE OF FORMAL ASSESSMENT NOTICE & REITERATION OF PRELIMINARY ASSESSMENT NOTICE  

Petitioner Commissioner of Internal Revenue (CIR) filed a Petition for Review assailing the CTA 2nd Division’s earlier Decision and Resolution which cancelled the assessment issued to the Respondent Gateway Rural Bank, Inc. The Petitioner argued that the Respondent filed a request for reinvestigation, however, it proceeded to CTA without even waiting for the final decision on its request, which renders its Petition as prematurely filed. Likewise, the Petitioner maintained that receipt of assessment notice via substituted service is valid. On the other hand, the Respondent countered that the earlier Petition was timely filed. As there was no valid assessment notice, it could not have filed a request for reinvestigation. Further, there was no valid personal service as the person who allegedly received the assessment notice was not authorized to receive tax assessments. In ruling, the Court En Banc agreed with the Court in Division that the cancellation of the Preliminary Collection Letter and Final Notice Before Seizure is proper as these were not preceded by a valid formal tax assessment. Likewise, the Formal Assessment Notice is invalid because its issuance was made outside the prescriptive period for assessment, its service was improper and ineffectual, and its issuance constitutes a violation of due process since the Petitioner simply reiterated the findings in the Preliminary Assessment Notice without addressing the reply submitted by the Petitioner. Consequently, the Petition was DENIED for lack of merit, and the earlier Decision and Resolution were AFFIRMED[COMMISSIONER OF INTERNAL REVENUE VS. GATEWAY RURAL BANK, INC., CTA EN BANC CASE NO. 2537, JUNE 22, 2023]

NPC warns email ‘cc’ misuse risks data breach [Manila Bulletin, August 7, 2023]

The Commission suggests using the blind carbon copy (bcc) feature as a more secure alternative to “cc.” It further underscores several email best practices, including reviewing email recipients, using “bcc” for bulk emails, safeguarding sensitive content, and regularly training staff on these measures.

 

Senate OKs automatic income classification of LGUs bill on 3rd reading [GMA News Online, August 7, 2023]

SB 2165 seeks to set the income thresholds for provinces, cities, and municipalities and empower the Secretary of Finance to regularly reclassify LGUs and revise income ranges in consultation with LGU leagues.

 

Businesses taking photos of clients’ IDs endangers data – NPC [The Philippine Star, August 6, 2023]

The NPC called the attention of businesses and associations – through both personal information controllers (PICs) and personal information processors (PIPs) – that authorize their employees and personnel to take photos of the IDs of customers, guests or other persons using their personal electronic devices or without appropriate safeguards and/or without the required privacy notice.

 

GoTyme Bank wins at 2023 ABF Retail Banking Awards [The Manila Times, August 6, 2023]

LESS than a year into its Philippine operations, GoTyme Bank scored a twin win at the 18th Asian Banking and Finance (ABF) Retail Banking Awards, held at the Marina Bay Sands in Singapore on July 25, 2023.

 

COA calls out inaccuracies in Cebu City’s financial statements [Rappler, August 5, 2023]

Cebu City’s legal officer, Jerone Castillo, agreed with the findings but noted that concerns raised by state auditors were due to recurring transactions from previous administrations that remained unresolved.

 

IMI posts P4.7-B loss from sale of subsidiary [The Manila Times, August 5, 2023]

INTEGRATED Microelectronics Inc. (IMI) on Friday reported an $84-million loss (approximately P4.7 billion) from the sale of subsidiary STI Enterprises Ltd.

 

MMDA to issue notice of violation vs construction firm for blocking traffic [The Philippine Star, August 5, 2023]

Artes issued a reminder to contractors to keep construction sites clear at all times, emphasizing that obstructing vehicular traffic with heavy equipment and vehicles would lead to penalties.

 

Eat Bulaga! trademark granted to TAPE Inc. [The Philippine Star, August 5, 2023]

According to reports, the renewal was granted on June 14 and effective until June 14, 2033.

 

Peza, DOST team up to establish KIST parks [Philippine Daily Inquirer, August 4, 2023]

The Philippine Economic Zone Authority (Peza) has signed a partnership agreement with the Department of Science and Technology (DOST) for the establishment of Knowledge, Innovation, Science and Technology (KIST) parks in the country, a move seen benefitting local startups, as well as small and medium enterprises.

 

IC puts Caritas Health Shield under receivership [Inquirer Mobile, August 4, 2023]

In a public advisory, Insurance Commissioner Reynaldo Regalado said CSHI was placed under receivership effective Aug. 1 and assigned lawyer Jay Ramirez of the IC’s conservatorship, receivership and liquidation division as interim ex officio receiver of the HMO.

 

Baguio to transfer title of Burnham Park to Tieza [Philippine Daily Inquirer, August 4, 2023]

City Administrator Bonifacio dela Peña disclosed the outcome of a meeting in May between Mayor Benjamin Magalong and Mark Lapid, chief operating officer of the Tourism Infrastructure and Enterprise Zone Authority (Tieza), following a backlash over Baguio’s decision to secure a title over the century-old park’s most visited spots like its man-made lake.

 

Gatchalian: Process observed in Waterfront reclamation project [The Philippine Star, August 4, 2023]

“I don’t deny that father is connected to the project. I know for a fact that reclamation projects here behind the Sofitel Philippine Plaza… all went through the process,” Gatchalian added during the Kapihan sa Manila Bay Forum on Wednesday. “I don’t deny that (it’s) my dad’s project, but I don’t meddle with the business.”

 

29 percent of workers likely to change employers – survey [The Philippine Star, August 4, 2023]

Workers who said they are most likely to change employers include those who feel overworked (44 percent), struggle to pay the bills every month (38 percent) and Gen Z (35 percent). In the Philippines, 29 percent said they are likely to change employers in the next 12 months.

 

European apparel brand moves out PHL orders, shifts to Vietnam [Business Mirror, August 3, 2023]

Conwep Executive Director Maritess Jocson-Agoncillo said the resumption of formal negotiations for the free trade agreement (FTA) between the Philippines and the European Union (EU) is “very timely” for the local garments sector because a European brand diverted its orders from the Philippines to Vietnam and Cambodia.

 

BIR estimates P370-B revenue losses from ‘ghost receipts’ [BusinessWorld, August 3, 2023]

“Because of our task force on fake transactions, we have seen that many individuals are coordinating with us and are willing to pay their taxes. We have also heard from business groups that they are complying,” Mr. Lumagui added.

 

BIR files complaint vs. 127 corporations over P6-B tax liability [GMA News Online, August 3, 2023]

Lumagui said they found that some of the corporations did not remit their withholding tax, or the money deducted by an employer from employees, and their value-added tax to the BIR.

 

POGOs, service providers have until Sept. 17 to reapply for licenses – PAGCOR [GMA News Online, August 3, 2023]

In a statement, PAGCOR said that under the new framework, all POGO licensees and service providers “were declared under probationary status and were directed to reapply until September 17, 2023.”

 

Aboitiz, CCEP acquiring Coca-Cola Beverages Philippines for $1.8B [GMA News Online, August 2, 2023]

Conglomerate Aboitiz Equity Ventures Inc. (AEV) on Wednesday announced its plan to acquire Coca-Cola Beverages Philippines Inc. (CCBP) together with Coca-Cola Europacific Partners PLC (CCEP).

 

BSP reminds deadline for submission of foreign borrowing plans [Manila Bulletin, August 2, 2023]

The Bangko Sentral ng Pilipinas (BSP) on Wednesday, Aug. 2, has issued an advisory reminding both the public or government sector, and private entities, such as banks and corporates, to submit its foreign borrowing plans by Sept. 30 this year.

 

Discounts for seniors, PWDs mandatory for online purchases —BIR [GMA News Online, August 2, 2023]

“Online platforms should recognize the mandatory discounts given to senior citizens (SC) and persons with disabilities (PWD). The BIR has issued Revenue Regulation (RR) No. 8-2023 to this effect,” BIR Commissioner Romeo Lumagui Jr. said in a statement.

 

PAGCOR exec admits gaps in inspection of POGOs [GMA News Online, August 2, 2023]

essa Mariz Fernandez, assistant vice president for offshore licensing department, told the Senate committee in a hearing Wednesday that PAGCOR also needs interpreters well-versed in Chinese and Bahasa languages during site visits.

 

BIR to support amendments to CREATE Law [ABS-CBN News, August 1, 2023]

Some investors raised issues on the imposition of 12 percent value added tax for indirect exporters, VAT refund claims, and problems on ease of doing business.

 

TVJ-TAPE injunction case hearing canceled due to Tito Sotto’s lack of judicial affidavit [Manila Bulletin, August 1, 2023]

But during the hearing when Tito Sotto was called to the witness stand as the next witness for TVJ and Ferre, TAPE’s lawyer Maggie Abraham-Garduque and GMA Network’s lawyer Eric Vincent Estoesta objected to his presentation, saying that he did not have a judicial affidavit.

 

BPI eyes finishing merger with Robinsons by early 2024 [ABS-CBN News, August 1, 2023]

BPI and the Gokongwei Group’s Robinsons Bank started the merger process this year, with BPI as the surviving entity. The Gokongwei Group also has a licensed digital bank called GoTyme.

 

BIR cuts collection goal for large taxpayers [Manila Bulletin, August 1, 2023]

The BIR document, which amends RMO No. 15-2023, showed that the adjustment is primarily attributed to lower revenues from excisable goods, mainly “sin” products.

 

RCBC concludes share sale to Japanese bank [The Philippine Star, August 1, 2023]

In a regulatory filing, RCBC announced the financial completion of the sale of an additional 15.01-percent stake to Sumitomo Mitsui Banking Corp. (SMBC).