Highlights of Ease of Paying Taxes Law
Other Relevant Tax Updates:
- TAX & BUSINESS-RELATED NEWS [JANUARY 9-14]
- HIGHLIGHTS OF EASE OF PAYING TAXES LAW
- TAX & BUSINESS-RELATED NEWS [JANUARY 9-14]
- Late Samsung chairman’s family sell $2 billion worth of shares to help pay huge South Korean inheritance tax
- Hotel officials charged for denying senior citizen’s discount
- Recto to prioritize pending tax reforms
- Doctors appeal DOH order restricting training in US
- Businessman sworn in as new SBMA chief
- Pan de Manila opens restaurant cafe that serves merienda treats
- Pru Life UK picks insurance veteran as new CEO
- Franchise loss, class suit eyed vs NGCP
- Thousands to lose jobs as US banking giant Citigroup announces job cuts
- Tax on rich needed to hit Recto’s P4.3T collection goal — IBON
- Converge ICT and DITO Join Forces in Landmark Deal
- US tanker canceled request to enter Subic – SBMA
- Iloilo City gov’t offers 40% discount on RPT in response to public outcry
- China’s investments in the Philippines: Big-ticket projects
- Araneta Group owes P180M to Megawide
- ERC pushes for EPIRA amendment
- Do motorists need to pay for a new RFID once the toll board’s single system takes effect in July?
- Panay needs more diverse power mix
- Microsoft briefly overtakes Apple as world’s most valuable firm
- Hungary opens its doors to foreign workers in these 26 new professions
- Probe sought on delayed Lupang Arenda socialized housing project
- Maya Bank launches up to 6.0% time deposit offering
- Isa-isa lang! Starbucks PH limits claiming of discount for PWDs, seniors
- BIR waives annual registration fee for business taxpayers
2. HIGHLIGHTS OF EASE OF PAYING TAXES LAW
HIGHLIGHTS OF EASE OF PAYING TAXES LAW
President Ferdinand Marcos Jr. signed the Ease of Paying Taxes Act on January 5, 2024. The law aims to modernize the Philippine tax administration and system and strengthen taxpayer rights. It will take effect 15 days after its publication in the Office Gazette.
Highlights include:
- Classification of taxpayersas to gross sales
1.1 Micro-Less than Php 3 million
1.2 Small-Php 3 million-Php 20 million
1.3 Medium-Php 20 million-Php 1 billion
1.4 Large-Php 1 billion and above
- Special concessions for small and micro taxpayers
2.1 Reduced civil penalties for certain violations.
2.2 2-page Income Tax Return (ITR)
- Options on the venue for filing and payment of tax returns
3.1 Any authorized agent bank
3.2 Revenue District Office through Revenue Collection Officer
3.3 Authorized tax software provider
- Income Tax
4.1 Disallowance of expenses as a result of non-withholding under Section 34K of the Tax Code of 1997, is repealed.
4.2 Timeline on the application and decision on refund of income tax paid in case of dissolution or cessation of business must be made within two (2) years from cessation of business.
4.3 Timing of withholding shall be reckoned at the time the income has become payable.
4.4 Claim of tax credit of any creditable income tax deducted and withheld in a previous period that can still be creditable in the subsequent calendar or fiscal year, provided the same had been declared in the tax return where the corresponding income is reported.
- Value-Added Tax (VAT) and Other Percentage Taxes
5.1 Uniform basis for VAT, both for the sale of goods and services, to be “gross sales,” as distinguished before, where VAT on services is based on gross receipts, while the VAT on the sales of goods is based on gross sales.
5.2 VAT base for sale of service-services have already been rendered; use of lease of properties have already been supplied. For long-term contracts for one (1) year or more, the invoice shall be issued on the month in which the service, use, or lease of properties is rendered.
5.3 Liberalizing VAT invoicing requirements such that VAT shall still be allowed to be used as an input tax credit on the part of the purchaser even if the invoice lacks certain information (other than the amount of sales, amount of VAT, name, and TIN of both the purchaser and issuer/seller, description of goods or nature of services, and the date of the transaction.) Information on business style is no longer required.
5.4 Output VAT credit on uncollected receivables may be deducted from output VAT in the next quarter after the lapse of the agreed period to pay, subject to the condition that the seller has fully paid the VAT on the transaction and the VAT component of the uncollected receivables has not been claimed as deductible bad debts from gross income. In case of recovery of uncollected receivables, VAT shall be remitted during the period of recovery.
5.5 Input VAT on local purchase of goods and services shall be claimed upon accrual and supported by sales invoice.
5.6 VAT-exempt threshold of Php 3 million shall be adjusted to its present values using the Consumer Price Index, as published by the Philippine Statistics Office (PSA) every three (3) years.
5.7 Action on refund of input tax shall be based on the classification of claims, whether low-risk, medium-risk, high-risk vis-à-vis parameters used. Medium and high-risk claims shall be subject to audit by the BIR. The Appeal can be made to the Court of Tax Appeals (CTA) within 30 days from receipt of the decision denying the claim or after the lapse of the 90 days for the BIR to act on the claim. In case of disallowance by the Commission on Audit (COA), only the taxpayer shall be liable for the disallowed amount without prejudice to any administrative liability on the part of any employee of the BIR who may be found to be grossly negligent in the grant of refund.
5.8 Tax base for Other Percentage Taxes shall be based on gross sales.
- Refund of erroneously paid taxes or penaltiesunder Section 229 of the NIRC shall be processed and decided by the BIR within 180 days from the date of submission of complete documents in support of the application filed. Filing of the claim for refund with the BIR shall be made within two (2) years after the payment of tax or penalty. Filing of an Appeal with the CTA within the two (2)-year period is removed instead the appeal must be filed within 30 days from receipt of denial or lapsed of the 180 days for the BIR to decide.
- Relaxation of some administrative requirements
7.1 Preservation of book of accounts for a period of five (5) years reckoned from the day following the deadline in filing a return, or if filed after the deadline, from the date of the filing of the return, for the taxable year when the last entry was made in the book of accounts.
7.2 The Annual Registration Fee of Php 500 was removed.
7.3 Issuance of invoice is now increased to Php 500 from Php 100 for each sale transaction. If the transaction is below Php 500, the seller will issue one (1) invoice for the aggregate sales amount at the end of the day if the aggregate sales is at least Php 500. VAT-registered taxpayers shall issue registered VAT invoices regardless of the amount.
7.4 Cancellation of VAT registration may be written or through electronic application.
7.5 Transfer or cancellation of registration may be made by the mere filing of the application. If the taxpayer is being audited, the Revenue District Office (RDO) which initiated the audit shall continue the same. The BIR is not precluded from auditing taxpayers canceling the registration by the mere filing of the application.
7.6 Digitization of BIR services
7.7 Publication of information may be done using any electronic means of publication in the Official Gazette, or BIR website.
Late Samsung chairman’s family sell $2 billion worth of shares to help pay huge South Korean inheritance tax [Yahoo, January 14, 2024]
South Korea has a top inheritance tax rate of 50%, the world’s second highest after Japan.
https://www.yahoo.com/finance/news/samsung-chairmans-family-sell-2-184659974.html
Hotel officials charged for denying senior citizen’s discount [Inquirer.Net, January 14, 2024]
In a 22-page resolution, charged for violation of two senior citizen laws, particularly Section 4 (a)(7) of Republic Act 9994 or the Expanded Senior Citizens Act of 2010 and Article 116 of Republic Act 7394 or the Consumer Act of the Philippines are the president of the corporation that owns the hotel and its finance director.
Recto to prioritize pending tax reforms [The Philippine Star, January 14, 2024]
Recognizing the country’s limited fiscal space due to the pandemic, Recto said he would advocate for the immediate passage of key tax reforms endorsed by the President as priority measures to Congress.
https://www.philstar.com/business/2024/01/14/2325588/recto-prioritize-pending-tax-reforms
Doctors appeal DOH order restricting training in US [Philippine Daily Inquirer, January 14, 2024]
The Department of Health (DOH) said it was reviewing an order that had reduced the number of Filipino medical graduates applying for advanced residency training in the United States following an appeal by US-based Filipino doctors to revise the policy as it “narrows” opportunities that would eventually benefit the country’s health-care system.
https://newsinfo.inquirer.net/1888699/doctors-appeal-doh-order-restricting-training-in-us
Businessman sworn in as new SBMA chief [The Philippine Star, January 14, 2024]
Aliño is the president and chairman of the S.T.A.R. Group of Companies and chairman of the Subic Bay Yacht Club. The S.T.A.R. Group of Companies is a major player in integrated supply chain services and port operations in the former US naval base.
https://www.philstar.com/headlines/2024/01/14/2325670/businessman-sworn-new-sbma-chief
Pan de Manila opens restaurant cafe that serves merienda treats [The Philippine Star, January 14, 2024]
Merienda by Pan de Manila has curated the flavors of traditional dishes from different provinces, making them accessible to city folks. These include timeless classics like Crispy Beef Tapa, Lucban Garlic Longganisa and Palabok Espesyal. Yet it also feels so right to dig slowly into a plate of contemporary innovations such as Lumpiang Embutido and Lechon Belly Batchoy.
Pru Life UK picks insurance veteran as new CEO [Inquirer Mobile, January 14, 2024]
Pru Life UK, one of the leading life insurers in the Philippines, has appointed banking and insurance veteran Sanjay Chakrabarty as its new CEO effective Feb. 1, subject to regulatory approval.
Franchise loss, class suit eyed vs NGCP [Philippine Daily Inquirer, January 14, 2024]
Lawmakers said the National Grid Corp. of the Philippines (NGCP) may lose its franchise and those responsible could face the court soon for the three-day power outages that hit Western Visayas at the start of 2024.
https://newsinfo.inquirer.net/1888709/franchise-loss-class-suit-eyed-vs-ngcp
Thousands to lose jobs as US banking giant Citigroup announces job cuts [Wion, January 13, 2024]
The New York City-headquartered firm said that it expects to incur as much as $1bn in severance and reorganisation costs. These costs would be incurred as part of the company’s process to eliminate 20,000 roles.
Tax on rich needed to hit Recto’s P4.3T collection goal — IBON [GMA News Online, January 13, 2024]
Economic think tank IBON Foundation has renewed its call for the imposition of wealth tax after newly appointed Finance Secretary Ralph Recto said that his first order of business would be prioritizing the collection of P4.3 trillion in taxes next year to boost state coffers.
Converge ICT and DITO Join Forces in Landmark Deal [Spot, January 13, 2023]
The digital landscape in the Philippines is undergoing a transformation that promises to reshape how Filipinos connect and communicate. Two key players, Converge ICT and DITO Telecommunity, have recently announced a groundbreaking agreement to share select land and undersea fiber internet assets.
US tanker canceled request to enter Subic – SBMA [GMA News Online, January 13, 2024]
A tanker that was scheduled to transport fuel from the American military base in Pearl Harbor, Hawaii, to a commercial storage facility in the Philippines had withdrawn its application to enter Subic.
Iloilo City gov’t offers 40% discount on RPT in response to public outcry [Inquirer Visayas, January 13, 2024]
ILOILO CITY — The local government here is set to increase its property taxes this year only to offer a 40-percent discount later following widespread concerns.
China’s investments in the Philippines: Big-ticket projects [Gulf News, January 13, 2024]
Some of the key Philippine projects including trains, roads, bridges, fintech and irrigation bankrolled by Chinese investors. Given recent policy changes, allowing up to 100 per cent foreign ownership in key industries, reversing an 85-year-old law that prevented it in the past, the Philippines’ economic landscape has remarkably improved, thus altering its regional significance.
Araneta Group owes P180M to Megawide [The Manila Times, January 13, 2024]
The decision was in relation to a complaint filed in January 2023 by the construction firm against ACI involving a contract signed by both parties for the design and construction of the Araneta Cyberpark Tower 2 in Quezon City.
ERC pushes for EPIRA amendment [The Manila Times, January 13, 2024]
THE Energy Regulatory Commission (ERC) said on Friday it is pushing for an amendment of the Electric Power Industry Reform Act (Epira) that will redirect collected penalties into refunds for Filipino consumers affected by power outages.
https://www.manilatimes.net/2024/01/13/business/top-business/erc-pushes-for-epira-amendment/1927898
Do motorists need to pay for a new RFID once the toll board’s single system takes effect in July? [The Philippine Star, January 12, 2024]
Motorists are currently using two different radio frequency identification (RFID) tags along the country’s toll expressways since there are two different operators: San Miguel Corporation (SMC) and Metro Pacific Tollways Corporation (MPTC).
Panay needs more diverse power mix [Inquirer Mobile, January 12, 2024]
Institute for Climate and Sustainable Cities (ICSC) pointed out that diversifying energy sources could make power generation in Panay more resilient and less susceptible to system failures, especially as the Western Visayas island relied heavily on coal-fired power plants to meet growing demand.
Microsoft briefly overtakes Apple as world’s most valuable firm [ABS-CBN News, January 12, 2024]
NEW YORK — Microsoft briefly dethroned its rival Apple to become the world’s most valuable company Thursday, illustrating the contrast between a firm driven by artificial intelligence and another whose iPhone sales are a cause for concern.
Hungary opens its doors to foreign workers in these 26 new professions [Akhbrna, January 11, 2024]
The State of Hungary announced the provision of 26 new jobs in many professions and crafts, and these jobs increase the requirement for foreign workers to obtain a Hungarian visa.
https://en.akhbrna.co/world-news/hungary-opens-its-doors-to-foreign
Probe sought on delayed Lupang Arenda socialized housing project [Inquirer.Net, January 10, 2024]
Lupang Arenda is a 171-hectare tract of land in Taytay, Rizal — 95 hectares of which are occupied by at least 20,000 households.
https://newsinfo.inquirer.net/1887288/imee-marcos-on-lupang-arenda
Maya Bank launches up to 6.0% time deposit offering [GMA News Online, January 9, 2024]
In an advisory, Maya Bank said clients can choose from three Time Deposit Plus options — three months at 5.50% per annum, six months at 6.00%, or 12 months at 5.75%., with users setting their own target amount.
Isa-isa lang! Starbucks PH limits claiming of discount for PWDs, seniors [Bilyonaryo, January 9, 2024]
The Tantoco-owned local franchise of the global coffee chain announced that starting January 15, 2024, only one food item and drink per visit will be eligible for the 20% discount claimed by senior citizens and PWDs.
BIR waives annual registration fee for business taxpayers [The Philippine Star, January 9, 2024]
According to an advisory signed by BIR Commissioner Romeo Lumagui on January 8, business taxpayers are no longer required to pay the P500 ARF starting January 22.
Recent Comments