BIR clarifies non-withholding of tax under EOPT Law
Other Relevant Tax Updates:
- TAX & BUSINESS-RELATED NEWS [MAY 7-13]
- BIR CLARIFIES THE IMPACT OF THE REPEAL OF SECTION 34 (K) OF THE NIRC REGARDING THE NON-WITHHOLDING OF TAXES TO ALL ASSESSED CASES & ONGOING AUDITS
- SEC LEGAL OPINION ON CORPORATE LIQUIDATION & REGISTRATION OF SECURITIES
I. TAX & BUSINESS-RELATED NEWS [MAY 7-13]
1. Mega Prime Foods Acquires Filipino Instant Coffee Brand
2. BCDA to start disposition of Market! Market! in 2025
3. Philex to fast–track Silangan mine operations
4. Labrador, Pangasinan open to nuclear power plant; scientific study pushed
5. DENR to shorten permit process for mining
6. Mandarin Oriental To Make A Comeback in 2026
7. Yuchengco unit reports breakthrough in first solar plant in Bohol
8. Goldilocks expanding footprint to nearly 1K stores
9. Gov’t ready to sell 50% SCTEx stake to MPTC for at least P20B
10. Angeles City’s Top 30 taxpayers awarded
11. Labor groups slam Laguesma for opposing wage hike proposals
12. Monde income grows 53% despite bleeding fake meat biz
13. Sofitel Philippine Plaza to close by July
14. Bonito fish imports allowed if meant for canning
15. DOF implements flexitime, work-from-home arrangements
16. Coins.ph secures BSP okay to buy, sell PH’s first stable coin
17. Bank merger fueled threefold gain in JG Summit’s 1st quarter bottom line
18. PPA to open Siargao and Coron cruise terminals
19. Mandaluyong City adjusts LGU office hours
20. Bell-Kenz Pharma Inc. to file cyberlibel vs. individuals spreading ‘malicious accusations’
21. GoTyme goes deeper into salary lending, acquires SAVii
22. Singapore is world’s 4th wealthiest city, overtaking London — report
23. Tariff Commission backs grant of tax breaks to e-motorcycles
24. DOLE junks case vs Negros power cooperative
II. BIR CLARIFIES THE IMPACT OF THE REPEAL OF SECTION 34 (K) OF THE NIRC REGARDING THE
NON-WITHHOLDING OF TAXES TO ALL ASSESSED CASES & ONGOING AUDITS
Revenue Memorandum Circular (RMC) No. 60-2024 issued on May 9, 2024, provides clarification and guidance on the
repeal of Section 34 (K) of the 1997 Tax Code, as amended, which was implemented through Section 6 of Revenue
Regulations (RR) No. 4-2024.
It may be recalled that under the Ease of Paying Taxes (EOPT) Act, an income payment where withholding of tax is
required can now be allowed as a deduction from the gross income, even if no tax is withheld, provided the same is
necessary, ordinary, and duly substantiated expense related to the registered business of the taxpayer. Thus, the need
to clarify if the repeal may be applied to all assessed cases and ongoing audits covering taxable periods prior to January
22, 2024, or the date of the effectivity of the EOPT Act.
Highlights include:
1. On all ongoing audits covering the taxable period prior to January 1, 2024-expenses shall be allowed as deductions
only if the corresponding tax required to be withheld has been paid, whether prior to audit or submission of the audit
report to the reviewing office.
2. In cases of failure to withhold and pay the tax prior to the submission of the audit report to the reviewing office, the
Revenue Officer (RO) shall recommend the issuance of an assessment notice both on income and withholding tax.
3. On audit cases already submitted to the Reviewing Office:
3.1 Paid Case-expenses shall be allowed as deductions provided the corresponding tax required to be withheld has
been paid.
3.2 Assessed Case-apply the requirement under the then Section 34 (K) of the NIRC, thus, assessment on both income
and withholding tax shall be issued.
4. For the taxable year covering January 1, 2024 onwards, income payments subject to withholding tax shall be allowed
as deductions, even if no tax was withheld, provided the other requirements of deductibility have been met. However,
the taxpayer shall still be liable for the payment of its corresponding withholding tax due on said income payments.
III. SEC LEGAL OPINION ON CORPORATE LIQUIDATION & REGISTRATION OF SECURITIES
THE CORPORATION CEASES TO EXIST UPON EXPIRATION OF ITS CHARTER, NEVERTHELESS IT MAY
CONTINUE AS A CORPORATE BODY FOR THREE (3) YEARS FOR WINDING UP & LIQUIDATION PURPOSES
M Hotel is requesting an opinion on issues related to the liquidation and winding up of its affairs, despite its charter
expiring almost eight (8) years ago. In reply, the SEC clarifies that the corporation may continue as a body corporate
for three (3) years from the effective date of its dissolution for the purpose of prosecuting and defending suits by or
against the corporation to enable it to settle and close affairs, disposing of, conveying its property, and distributing
assets. Upon the expiration of the corporate term, it ceases to exist, except insofar as its liquidation or winding down
of its business affairs and the settlement of the claim of its creditors is concerned. In the event of absence of a trustee
or receiver is selected after the three (3) year period, the Board of Directors, as the controlling body of the corporation,
assumes the role of trustees for the liquidation process. The conveyance to the trustee of the corporate assets for the
purpose of liquidation must be made within three (3) years from the effective date of dissolution. [SEC OFFICE OF
THE GENERAL COUNSEL OPINION NO. 24-08, APRIL 18, 2024]
TO AVAIL OF THE EXEMPTION ON THE BASIS OF RECIPROCITY, ONE MUST PROVIDE COMPETENT EVIDENCE THAT SUCH SECURITIES ARE EXEMPT FROM REGISTRATION WITH THE FOREIGN COUNTRY
Hongkong and Shanghai Banking Corporation (HSBC) Philippines is seeking an opinion on exempt securities under Section 9.1(B) of the Securities Regulation Code (SRC), specifically on whether a determination that Philippine government-issued or guaranteed bonds are traded in the main exchange/s of another country already meets the reciprocity principle under the SRC. As represented, there are two (2) requirements for foreign bonds to be accessed even by non-qualified buyers without prior registration, diplomatic relations and based on reciprocity. In reply, the SEC answered this negatively. As clarified, if a party seeks to avail of the exemption based on reciprocity, in addition to the proof that there are Philippine government-issued or guaranteed bonds traded in the main exchange/s of another country, that party should also provide competent evidence, such as laws, statutes, rules and regulations, that such securities are exempt from registration with the foreign country. Further, the party invoking it must present a copy and comply with Sections 24 and 25 of Rule 132 of the Revised Rules of Evidence (RRE) to provide such competent evidence of said exemption, citing the case of Board of Medicine et. al. v. Yasuyuki Ota. Further, the SEC outlines the process of establishing reciprocity which includes: (1) Official Publication or Certified True Copy; (2) Apostille Convention; and (3) Translation into English or Filipino. [SEC OFFICE OF THE GENERAL COUNSEL OPINION NO. 24-03, MARCH 26, 2024]
Mega Prime Foods Acquires Filipino Instant Coffee Brand [Esquire, May 13, 2024]
Mega Prime Foods, a subsidiary of the company behind Mega Sardines, now owns Jimm’s Coffee Mix.
BCDA to start disposition of Market! Market! in 2025 [GMA News Online, May 13, 2024]
The Bases Conversion and Development Authority (BCDA) is planning to redevelop the Market!Market! area into a mixed-use property in the next two years with the disposition of the asset starting in 2025, as the agency seeks maximum gains.
Philex to fast–track Silangan mine operations [The Philippine Star, May 12, 2024]
Pangilinan-led Philex Mining Corp is exploring all possible logistical options to fast-track the commercial operations of its Silangan gold and copper mine ahead of the fourth quarter 2025 target.
https://www.philstar.com/business/2024/05/12/2354343/philex-fasttrack-silangan-mine-operations
Labrador, Pangasinan open to nuclear power plant; scientific study pushed [GMA News Online, May 12, 2024]
(We would need a huge body of water, there is also a beach that could help with the cooling system and a source for the nuclear reactor. We also have plenty of mountain area for a nuclear reactor.)
DENR to shorten permit process for mining [The Philippine Star, May 12, 2024]
The Department of Environment and Natural Resources (DENR) plans to implement “parallel” processing of mining permits this year to shorten bureaucratic approval of prospective mining operations to as fast as one year.
https://www.philstar.com/business/2024/05/12/2354361/denr-shorten-permit-process-mining
Mandarin Oriental To Make A Comeback in 2026 [Spot, May 12, 2024]
Being developed by AyalaLand, the hotel will make its comeback at the Ayala Triangle Gardens, a prime address at the Makati Central Business District. It will have 276 rooms and “an array of amenities, from top-tier dining options to its renowned spa experience.”
Yuchengco unit reports breakthrough in first solar plant in Bohol [Cebu Daily News, May 12, 2024]
Rizal Green Energy Corp. (RGEC), a unit of Yuchengco-led PetroGreen Energy Corp. (PGEC), took another step in developing the P1.2-billion first solar power plant in Bohol province with the installation of photovoltaic (PV) panels.
Goldilocks expanding footprint to nearly 1K stores [Inquirer Mobile, May 11, 2024]
Food retailer Goldilocks Bakeshop Inc., part of the portfolio of Sy family-led conglomerate SM Investments Corp., is nearing the 1,000-store mark this year, driven by the expansion of franchises.
Gov’t ready to sell 50% SCTEx stake to MPTC for at least P20B [Philippine Daily Inquirer, May 11, 2024]
The Bases Conversion and Development Authority (BCDA) is willing to sell to the Metro Pacific group its 50-percent stake in the country’s longest highway, Subic-Clark-Tarlac Expressway (SCTEx), for more than P20 billion—an amount that will enable the government agency to extinguish debts while registering a windfall.
https://business.inquirer.net/458173/govt-ready-to-sell-50-sctex-stake-to-mptc-for-at-least-p20b
Angeles City’s Top 30 taxpayers awarded [SunStar, May 11, 2024]
The city government, under the leadership of Mayor Carmelo “Pogi'” Lazatin Jr., recognized the Top 30 taxpayers from 2020 to 2023.
https://www.sunstar.com.ph/pampanga/angeles-citys-top-30-taxpayers-awarded
Labor groups slam Laguesma for opposing wage hike proposals [Philippine Daily Inquirer, May 11, 2024]
Department of Labor and Employment (Dole) Secretary Bienvenido Laguesma continues to draw flak from labor groups after repeating his claim that legislated wage hike bills pending in Congress, if approved, could displace workers, lead to further inflation and result in a decline of gross domestic product (GDP) growth.
https://newsinfo.inquirer.net/1939456/labor-groups-slam-laguesma-for-opposing-wage-hike-proposals
Monde income grows 53% despite bleeding fake meat biz [Inquirer Mobile, May 10, 2024]
As its alternative meat business continued to post losses, the company behind Lucky Me! instant noodles booked core earnings of P2.9 billion in the first quarter—a 53.4-percent surge—with help from the robust performance of its food and beverage unit.
Sofitel Philippine Plaza to close by July [ABS-CBN News, May 10, 2024]
A report from BusinessMirror noted that the hotel owner, Philippine Plaza Holdings Inc., is requesting the Government Service Insurance System (GSIS) for an extension on its lease contract for another 25 years. This means the lease contract will end in 2066, instead of its current 2041 date.
https://news.abs-cbn.com/business/2024/5/10/sofitel-philippine-plaza-to-close-by-july-1539
Bonito fish imports allowed if meant for canning [Inquirer Mobile, May 10, 2024]
The Department of Agriculture (DA) is now allowing institutional buyers to import bonito (tulingan) as long as the commodity will be used solely for producing canned goods.
DOF implements flexitime, work-from-home arrangements [GMA News Online, May 9, 2024]
The Department of Finance (DOF) is now implementing flexible work arrangements in efforts to alleviate traffic congestion and reduce electricity and fuel consumption.
Coins.ph secures BSP okay to buy, sell PH’s first stable coin [Philippine Daily Inquirer, May 9, 2024]
Stable coins are cryptocurrencies whose value is tied to another currency, commodity, or financial instrument.
https://business.inquirer.net/458008/coins-ph-secures-bsp-okay-to-buy-sell-phs-first-stable-coin
Bank merger fueled threefold gain in JG Summit’s 1st quarter bottom line [Inquirer Mobile, May 9, 2024]
Gokongwei-led JG Summit Holdings Inc. more than tripled its first-quarter income to P12.6 billion as businesses recorded strong results, alongside one-time gain from the merger of its banking unit with Bank of the Philippine Islands (BPI).
PPA to open Siargao and Coron cruise terminals [The Manila Times, May 8, 2024]
PPA general manager Jay Santiago said that alongside the expected 300,000 tourist arrivals from cruise ships this year, the PPA is set to open dedicated cruise terminals as part of a broader initiative to cater to the growing demand for cruise tourism in the country.
Mandaluyong City adjusts LGU office hours [Inquire.Net, May 8, 2024]
The order came after a resolution of the Metro Manila Council that directed LGUs in the capital region to modify their office hours in a bid to alleviate traffic congestion.
https://newsinfo.inquirer.net/1938528/mandaluyong-city-on-modified-lgu-schedule
Bell-Kenz Pharma Inc. to file cyberlibel vs. individuals spreading ‘malicious accusations’ [GMA News Online, May 8, 2024]
Senator Jinggoy Estrada previously alleged that Bell-Kenz recruited doctors by enticing them with “promises of exorbitant commissions and lavish incentives” in exchange for prescribing the brand.
GoTyme goes deeper into salary lending, acquires SAVii [Philippine Daily Inquirer, May 8, 2024]
Gokongwei-backed GoTyme Bank has expanded its payroll-enabled financial products after acquiring salary lender SAVii, a move seen to help employees of the country’s top companies easily access their pay.
https://business.inquirer.net/457693/gotyme-goes-deeper-into-salary-lending-acquires-savii
Singapore is world’s 4th wealthiest city, overtaking London — report [Inquirer.Net, May 8, 2024]
The Republic – which is widely regarded as the most business-friendly city globally – is now home to 244,800 resident millionaires or individuals with a liquid investable wealth of US$1 million (S$1.35 million) or more, 336 centi-millionaires with investable wealth of US$100 million or more, and 30 billionaires with investable wealth of US$1 billion or more.
Tariff Commission backs grant of tax breaks to e-motorcycles [The Manila Times, May 8, 2024]
The Tariff Commission (TC) has recommended to the National Economic and Development Authority (NEDA) the inclusion of e-motorcycles in its list of electric vehicles (EVs) eligible for import tax breaks.
DOLE junks case vs Negros power cooperative [The Philippine Star, May 7, 2024]
The charges stemmed from a joint venture agreement (JVA) entered into by the Central Negros Electric Cooperative (Ceneco) with a private company.
https://qa.philstar.com/nation/2024/05/07/2353199/dole-junks-case-vs-negros-power-cooperative
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