Weekly Tax Updates [May 6, 2025]

14,000 Move It riders to lose jobs

Other Relevant Tax Updates:

• TAX & BUSINESS-RELATED NEWS [APRIL 29-MAY 6]
• BIR REVISES THE GUIDELINES ON PRIVATE RETIREMENT BENEFIT PLAN ORGANIZATIONS
• BIR EXTENDS THE REGISTRATION PERIOD FOR NON-RESIDENT DIGITAL SERVICE PROVIDERS
• FIRB PRESCRIBES THE GUIDELINES ON NEW FIRMS ENHANCEMENTS & COMPLIANCE REMINDERS FOR TY 2024 & 2025
• CTA CASES

I. TAX & BUSINESS-RELATED NEWS [APRIL 29-MAY 6]

1. Gov’t to push for shorter working hours for moms
2. Who will be the next SEC chairperson?
3. Dennis Uy’s casino site now for sale
4. US hikes funding for Subic-Clark-Manila-Batangas railway study
5. Phinma investing P400 million for first 2 community housing projects
6. Netflix raises subscription prices in the Philippines due to new VAT law
7. Fake documents void even when notarized
8. Tanco-backed iACADEMY eyeing 3rd PH campus
9. Ateneo keeps line open amid CA labor case ruling
10. Katinko maker to invest P2B in PH expansion
11. Security Bank acquires MUFG’s 25 percent stake in Home Credit Philippines
12. 14,000 Move It riders to lose jobs
13. Belle seeks gaming license for 2nd casino resort
14. Makati subway project no longer feasible: proponent
15. SM Prime to start project on reclamation site by end-2025
16. Marcos wants review of rules on continuing professional development
17. Marcos bares lower interest rates on SSS salary, calamity loans starting July
18. PEZA eyes second pharma ecozone
19. Regional wage boards to begin wage review – DOLE
20. Pag-IBIG offers new loan for home renovations
21. Makati City among the world’s top healthcare cities in 2025 global index
22. BIR sues vape firms for nonpayment of P8.68B in taxes
23. Pag-IBIG Fund raises multi-purpose loan limit
24. Supreme Court Holds Private School Accountable in Bullying Case

II. BIR REVISES THE GUIDELINES ON PRIVATE RETIREMENT BENEFIT PLAN ORGANIZATIONS

Revenue Regulations (RR) No. 15-2025, issued on April 29, 2025, revises the guidelines governing Private Retirement Benefit Plans pursuant to the Republic Act (R.A.) 4917, otherwise known as An Act Exempting Retirement Benefits of Employees of Private Firms from Attachment, Levy, and Execution.

Highlights include the following:

a. Definition of Private Retirement Benefit Plan

b. Tax incentives or privileges if considered as Tax Qualified Plan

c. Requisites of a Reasonable Retirement Benefit Plan

d. Application process as well as documentary requirements for a Certificate of Tax Qualification, whether trusteed, non-trusted/insured, or multi-employer

e. Guidelines to follow in case of amendment to the Tax Qualified Plan

f.  Certain limitations imposed on the investment by the trustees of an employee’s trust

g. Fees to be paid by the employer in the application process for Tax Qualified Plan and related amendments

h. Filing of returns of trustees of all trusteed Retirement Plans

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III. BIR EXTENDS THE REGISTRATION PERIOD FOR NON-RESIDENT DIGITAL SERVICE PROVIDERS

Revenue Regulations (RR) No. 14-2025, issued on April 25, 2025, amends the registration period for Non-Resident Digital Service Providers (NRDSPs) under the earlier RR No. 3-2005.

It may be recalled that RR No. 3-2025 initially set the deadline for registration or updating with the BIR at 60 days from its effectivity. However, RR No. 14-2025 has extended this period to 120 days from the same effectivity date. Consequently, NRDSPs now have until June 1, 2025, to complete their registration with the BIR and will become subject to VAT beginning June 2, 2025.

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IV. FIRB PRESCRIBES THE GUIDELINES ON NEW FIRMS ENHANCEMENTS & COMPLIANCE REMINDERS FOR TY 2024 & 2025

FIRB Advisory No. 004-2025, issued on April 4, 2025, provides guidelines, clarifications, and reminders on the updated features of the Fiscal Incentives Registration and Monitoring System (FIRMS) to aid Investment Promotion Agencies (IPAs) and Registered Business Enterprises (RBEs) in the submission of Annual Tax Incentives Report (ATIR) and Annual Benefits Report (ABR) for the Taxable Years 2024 and 2025.

The enhancements aim to improve the efficiency and accuracy of reporting while addressing common challenges encountered by users.

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V. CTA CASES

[A PERSON DEALING WITH AN AGENT ASSUMES THE RISK OF A LACK OF AUTHORITY IN THE AGENT. HE OR SHE CANNOT CHARGE THE PRINCIPAL BY RELYING UPON THE AGENT’S ASSUMPTION OF AUTHORITY THAT PROVES TO BE UNFOUNDED] [FAILURE TO OBSERVE DUE PROCESS IN THE SERVICE OF TAX ASSESSMENT NOTICES RENDERS BOTH THE CRIMINAL & CIVIL CHARGES AGAINST THE TAXPAYER UNSUSTAINABLE] [THE BIR’S FAILURE TO VERIFY THE RECIPIENT’S AUTHORITY & THE INCORRECT DELIVERY OF ASSESSMENT NOTICES TO A DIFFERENT OFFICE LED TO THE VOIDING OF THE TAX ASSESSMENT & THE ACQUITTAL OF THE ACCUSED]

Plaintiff People of the Philippines filed a criminal case against the Accused Ronald Punay Robin for an alleged violation of Section 255 of the Tax Code of 1997, as amended. Accused Robin, a businessman and proprietor of R.E.N.Z.R. Enterprises, was charged with willful failure to pay deficiency income tax amounting to Php 1,965,471.40 for the Taxable Year 2016. The Bureau of Internal Revenue (BIR) conducted an audit of his business pursuant to Letters of Authority and issued a Preliminary Assessment Notice (PAN) and Final Assessment Notice (FAN) with a Formal Letter of Demand (FLD). The Prosecution claimed these notices were served to the Accused at his registered business address through Donald Reyes, allegedly his authorized representative. Accused, however, denied receiving any of the BIR notices and stated that Donald Reyes was neither his employee nor authorized to receive documents on his behalf. He explained that the notices were likely served at Room 402-A, the adjacent office of Lynjenken Freight Services, where Reyes worked. The Defense maintained that due process was violated because the Accused was never properly notified of the tax assessment. The Accused also testified that although he made a partial payment amounting to Php 196,547.14, this was done under legal advice for distressed businesses and did not signify admission of liability. The issues before the Court were whether the Accused was criminally liable for willful failure to pay tax under Section 255 of the Tax Code of 1997, and whether he was civilly liable for the assessed deficiency. In ruling, the Court held that the Prosecution failed to prove beyond a reasonable doubt that the Accused had a legal obligation to pay the assessed tax, as there was no valid service of the PAN and FLD/FAN. The BIR failed to comply with procedural requirements for substituted service and did not present evidence showing that Reyes was authorized to receive the assessment notices. As a result, the assessment was declared VOID. Consequently, the Court ACQUITTED the Accused of the criminal charge and held that no civil liability could arise from a void tax assessment. The Court emphasized that proper service of assessment notices is a constitutional due process requirement and that failure to comply invalidates the assessment and any resulting liability. [PEOPLE OF THE PHILIPPINES VS. RONALD PUNAY ROBIN, CTA CRIMINAL CASE NO. 0-1020, APRIL 23, 2025]

 

NEA-REGISTERED ELECTRIC COOPERATIVES ENJOY PERMANENT INCOME TAX EXEMPTION

Petitioner Pampanga I Electric Cooperative, Inc. (PELCO I), a non-stock, non-profit electric cooperative organized under Presidential Decree (P.D.) No. 269 and registered with the National Electrification Administration (NEA), filed a Petition for Review to challenge the validity of the deficiency income tax assessment issued by the Respondent Commissioner of Internal Revenue (CIR) for Taxable Year 2018. The Petitioner argued that the audit was void because it was conducted by a Revenue Officer (RO) who was not properly authorized under a valid Letter of Authority (LOA), violating Section 13 of the Tax Code of 1997, as amended, and their right to due process was violated. Further, it asserted that it enjoys permanent exemption from income tax under P.D. No. 269, and that the Respondent’s reliance on Revenue Memorandum Circular (RMC) No. 74-2013 and the MARELCO Ruling was misplaced. Even assuming liability, it should not be subject to penalties and interest. On the other hand, the Respondent maintained that the Petitioner was not exempt from paying income taxes and that the assessment was valid. In ruling, the Court held that the audit was void because Group Supervisor Raul T. Pamintuan, who actively participated in the audit, was not authorized by a valid LOA, as required by law. The mere issuance of a Reassignment Letter did not suffice to confer authority. In addition, the Court emphasized that, even assuming the audit was valid, the Petitioner is permanently exempt from income tax as an electric cooperative registered with the NEA. Citing the rulings in Samar-I Electric Cooperative and Misamis Oriental II Rural Electric Service Cooperative cases, the Court reaffirmed that NEA-registered electric cooperatives enjoy permanent income tax exemption under Section 39(a) of P.D. No. 269, and that Executive Order No. 93 and FIRB Resolution No. 24-87 did not validly withdraw such exemptions because they were effectively repealed by the Republic Act (R.A.) No. 6938 or the Cooperative Code of the Philippines.  Consequently, the assessment is considered NULL and VOID. [PAMPANGA I ELECTRIC COOPERATIVE, INC. VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10961, APRIL 23, 2025]