PALACE DECLARES HOLIDAYS FOR JUNE, JULY
Other Relevant Tax Updates:
- TAX & BUSINESS-RELATED NEWS [JUNE 17-25]
- BIR REMINDS SUPPLIERS TO HONOR THE VAT ZERO-RATING CERTIFICATE ISSUED BY IPA & DTI-EMB
- SEC LEGAL OPINION ON COMPENSATION & PER DIEMS OF NON-STOCK NON-PROFIT ENTITY
- CTA CASES
I. TAX & BUSINESS-RELATED NEWS [JUNE 17-25]
- Grab tests drone-powered logistics in Metro Manila
- Private firm all set to take over from electric cooperatives in Iloilo
- SC division: Actual knowledge of sale can replace written notice
- APECO secures vital land for airport project
- SCTEX Interchange eyed in Hermosa, Bataan — BCDA
- Palace declares public holidays for June, July
- Methanol-fueled ship to be built in Cebu
- Gatchalian wants to shorten college, prioritize critical thinking in SHS
- Philippines needs to market to semiconductor industry at large
- No payslip, no proof: Supreme Court reminds employers to prove salaries paid to employees
- Investment firm faces raps for violating securities law
- St. Luke’s breaking ground for P18 billion Parañaque hospital
- Pasig court clears Ressa, Rappler execs in Anti-Dummy Law case
- Firms in Spain earn nod to send meat to the Philippines
- Philippines to adopt OECD cryptocurrency tax framework
- 20-day TRO granted: Sid Consunji blocks tax collection on Semirara fuel imports
- PSE unit to return ‘intact’ shares of Equitiworld to clients
- New Zealand approves medicinal use of ‘magic mushrooms’
- Cargill expands Mindanao footprint with Biotech feed production partnership
- DOTr: Marcos to soon sign bill on right-of-way sites
II. BIR REMINDS SUPPLIERS TO HONOR THE VAT ZERO-RATING CERTIFICATE ISSUED BY IPA & DTI-EMB
In a Tax Advisory dated June 11, 2025, the BIR reminds suppliers to honor the VAT zero-rating certificate issued by Investment Promotion Agencies (IPAs) and/or Department of Trade and Industry-Export Marketing Bureau (DTI) and refrain from imposing unnecessary validation requirements on Export-Oriented Enterprises (EOEs) and Registered Business Enterprises (RBEs).
Citing Sections 3 and 4 of Revenue Regulations (RR) No. 10-2025, local suppliers are no longer required to seek BIR approval, confirmation, or validation for VAT zero-rating of goods and services provided to qualified EOEs and RBEs. The certifications issued by DTI-EMB for EOEs and by IPAs for RBEs are sufficient to qualify for VAT zero-rating. In terms of VAT exemption on importation, the DTI-EMB certificate issued to EOEs shall also serve as proof of entitlement. At the same time, RBEs must present a Certificate of Authority to Import (CAI) issued by their IPA to the Bureau of Customs. These measures are consistent with the provisions of Republic Act No. 12066 or the CREATE MORE Act, as implemented by RR No. 10-2025. For verification of certification authenticity, suppliers may coordinate with the DTI-EMB or the relevant IPA or consult their official websites for a list of EOEs and RBEs with approved VAT zero-rating.
III. SEC LEGAL OPINION
COMPENSATION MUST BE DISTINGUISHED FROM REASONABLE PER DIEMS TO DETERMINE THE APPLICABILITY OF SECTION 29 OF THE REVISED CORPORATION CODE OF THE PHILIPPINES
B Condominium Corporation (B Co.) is seeking clarification on whether the honoraria or reasonable per diems received by its Board of Trustees (BOT) are legally permissible, and whether such per diems require approval or ratification by its general members. B Co. is a non-stock, non-profit corporation governed by the BOT, comprising seven regular trustees and one ex-officio trustee. By custom, trustees who attend regular meetings receive honoraria or reasonable per diems. In reply, the Commission examined the distinction between “compensation” and “reasonable per diems” under Section 29 of the Revised Corporation Code (RCC), and clarified both the scope of the statutory prohibition on compensation and the exception for per diems. To resolve the issue, the SEC distinguished “compensation” from “reasonable per diems,” noting that per diems, which are reimbursement of daily expenses for the trustees’ attendance, are expressly excluded from the prohibition on compensation. In contrast, compensation refers to remuneration for services rendered by the trustee and may only be allowed when expressly provided in the bylaws or approved by a majority of members. The Commission further emphasized that trustees may still receive compensation for services rendered in their capacity other than as directors/trustees. While compensation beyond per diems must be authorized either in the by-laws or by member approval, reasonable per diems themselves need no prior member approval. However, members may still review and challenge any per diems that are deemed excessive. In conclusion, compensation is substantially different from reasonable per diems. Reasonable per diems are legally permissible without member ratification, while compensation or excessive per diems must comply with the requirements under Section 29 of the RCC. [SEC OFFICE OF THE GENERAL COUNSEL LEGAL OPINION NO. 25-07, APRIL 30, 2025]
IV. CTA CASES
[TABULATION OF ALLEGED DEFICIENCY TAXES, WITHOUT ANY EXPLANATION FROM THE TAXING AUTHORITY AS TO HOW THE SAME WAS DETERMINED VIOLATES THE TAXPAYER’S RIGHT TO DUE PROCESS] [PRODUCTS SUCH AS PILLS, CONDOMS, INJECTABLES & MEDICAL DEVICES CAN BE CLASSIFIED AS FAMILY PLANNING PRODUCTS & INCLUDED IN THE ESSENTIAL DRUG LIST; HOWEVER, LUBRICANTS DO NOT MEET THE CRITERIA FOR INCLUSION] [REFERENCE TO THE LOCAL TAX ORDINANCE IS VITAL, FOR THE POWER OF LOCAL GOVERNMENT UNITS TO IMPOSE LOCAL TAXES IS EXERCISED THROUGH THE APPROPRIATE ORDINANCE ENACTED BY THE SANGGUNIAN, NOT SOLELY BY THE PROVISIONS OF THE LOCAL GOVERNMENT CODE]
Petitioner Quezon City, represented by Edgar T. Villanueva, in his capacity as the Treasurer of Quezon City, filed a Petition for Review seeking to reverse the Decision and Order of the Regional Trial Court, Branch 216, Quezon City (RTC), which ordered the refund or credit of Local Business Taxes (LBT) erroneously paid by Respondent DKT Health, Inc. and, cancelled the deficiency LBT assessments for being void. The core issue is whether the RTC erred in ordering a refund or credit in favor of the Respondent resulting from a void assessment. In ruling, Section 194(a) of the Local Government Code (LGC) provides that cities are given five (5) years from the date local taxes become due to issue an assessment. To be clear, the five-year period to assess 2016 LBT shall be reckoned from the deadline for each quarterly payment. Thus, the Court found that at the time of the Assessment Report’s issuance on June 4, 2021, the right to assess LBT relative to the first (1st) quarter of 2016 had already prescribed. Moreover, the RTC in the assailed Order ruled that the Respondent’s products like pills, condoms, injectables, lubricants, and medical devices are considered essential medicine. It cites Republic Act (R.A.) No. 10354, or the Reproductive Health Act, which directs Philippine National Drug Formulary (PNDF) to include various family planning products in its Essential Drugs List. The Court, however, found that while the Respondent’s products can be included in the essential drug list as family planning products and services, lubricants do not qualify for inclusion citing Section 3.01 (hh), Rule 3 and the Implementing Rules and Regulations (IRR) of the R.A. No. 10354. On whether the Assessment Report violated due process requirements, the content requirements for a local tax, fee, or charge assessment are outlined in the case of Yamane vs. BA Lepanto Condominium Corporation (Yamane), and, more recently, in National Power Corporation vs. The Province of Pampanga (NPC), as follows: (1) nature of the local tax, fee, or charge; (2) the amount of deficiency local tax, fee, or charge, including surcharges, interests, and penalties; and (3) the period covered by the local tax, fee, or charge assessment. Conversely, the lack of any one of these requirements would lead to a violation of the right to due process, as the party would not be properly informed of the legal and factual grounds for the assessment. In the case at bar, the Petitioner failed to comply with the first requirement. To be precise, the total deficiency LBT due relative to 2016 to 2021 is based on the two-page Assessment Report prepared by the City Treasurer which failed to state the Quezon City Revenue Code provisions from which said report was based. This omission violated the Respondent’s right to due process in local tax assessment. Consequently, the Petition was DENIED for lack of merit, and the assailed Decision and Order promulgated on September 22, 2022, and August 7, 2023, respectively, were AFFIRMED. [QUEZON CITY, REPRESENTED BY EDGAR T. VILLANUEVA, IN HIS CAPACITY AS THE TREASURER OF QUEZON CITY VS. DKT HEALTH, INC., CTA AC NO. 304, JUNE 13, 2025]
IN THE ABSENCE OF SUFFICIENT PROOF OF A FALSE OR FRAUDULENT RETURN, THE BIR CANNOT INVOKE THE EXTENDED TEN-YEAR PERIOD FOR AUDIT PURPOSES
Petitioner Commissioner of Internal Revenue filed a Petition for Review Ad Cautelam to challenge the Court in Division’s Decision cancelling the deficiency income tax assessment issued against the Respondent Norkis Trading Company, Inc. for the fiscal year ending June 30, 2007. The controversy arose when the Respondent received a Preliminary Assessment Notice (PAN) on March 17, 2014, and later a Final Assessment Notice (FAN) and Formal Letter of Demand (FLD) on April 11, 2014, assessing a total of Php 285,927,070.68 for alleged deficiency income taxes. The Respondent protested the assessment through a request for reconsideration and later brought the case to the CTA Division, which ruled in its favor by cancelling the assessment on the ground that it had already prescribed. The key issues raised were whether the assessment was issued within the allowable period, whether the 10-year prescriptive period under Section 222(a) of the Tax Code applied based on a false return, and whether there was valid evidence to support the assessment. The Petitioner argued that the Respondent failed to declare a $6 million indemnity from Yamaha Motor Company, Inc., resulting in a substantial underdeclaration of income. It claimed that this constituted a false return, thus justifying the 10-year prescriptive period. Likewise, the Indemnity Agreement was a public document, and the Respondent had effectively admitted its genuineness by failing to deny a request for admission properly. In response, the Respondent maintained that there was no competent evidence showing it received the alleged $6 million. It pointed out that the Indemnity Agreement was neither formally offered in evidence nor properly authenticated and therefore could not be considered. Furthermore, even if it had received an indemnity, such payment would constitute a return of capital and not taxable income. Thus, there was no willful or deliberate misstatement in its return, and thus only the standard 3-year prescriptive period under Section 203 of the Tax Code applied, which had already lapsed in 2010. In ruling, the Court DENIED the Petition, affirming that the 10-year period did not apply as there was no sufficient proof of a false return. The alleged Indemnity Agreement was inadmissible and, even if admitted, did not establish taxable income. Since the BIR issued the assessment more than six (6) years after the deadline for filing the return, it was issued beyond the 3-year prescriptive period and was therefore VOID. [COMMISSIONER OF INTERNAL REVENUE VS. NORKIS TRADING COMPANY, INC., CTA EN BANC CASE NO. 1766, JUNE 13, 2025]
IT IS IMPERATIVE FOR THE COURT TO PRESCRIBE THE PROPER PENALTIES WHEN CONVICTING THE ACCUSED & TO IMPOSE THE APPROPRIATE CIVIL LIABILITIES, UNLESS WAIVED, OR THE ACTION FOR ITS RECOVERY IS RESERVED
Petitioner Bureau of Internal Revenue filed a Petition for Certiorari assailing the Respondent, Regional Trial Court (RTC)-Branch 26 Order declaring the Accused, Datu Amerhassan Lucman, guilty of two (2) counts of violation of Section 255 of the Tax Code, but without imposing a civil liability despite his conviction. The Petitioner argues that the Respondent acted with grave abuse of discretion when it refused to resolve the issue of the Accused’s civil liability despite his guilty plea, and that there is no other plain, speedy, and adequate remedy in the ordinary course of law to question the denial of the Motion for Partial Reconsideration. On the other hand, the Respondent asserts that at the time the issue of civil liability was raised, he was uncertain whether civil liability attaches to the criminal case, wherefore, to prevent delay, he made a ruling that no civil liability attaches and instructed the Petitioner to just file the necessary Motion. However, the Petitioner failed to file the necessary Motion within the prescribed period; thus, he can no longer avail of the remedy of appeal or other plain, speedy, and adequate remedy. In ruling, the Court emphasized the requisites of a Petition for Certiorari under Rule 65. First, it must be directed against a tribunal, board, or officer exercising judicial or quasi-judicial functions. In this case, the Orders were issued by the Respondent in his capacity as a judicial officer. Second, the tribunal must have acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction. In this case, the Court held that the Respondent did not, at all, conduct any proceeding to determine the civil aspect of the case, and that there is no written order or judgment regarding the same. And third, there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law. In this case, the circumstances of the case left the Petitioner in the dark as to what remedies are available. Since there was no judgment on the civil aspect of the case, the Petitioner still expects a final order on it. Since there was no final order, the Petitioner could not have availed of the ordinary remedy of appeal, thus the only recourse against the Respondent’s inaction is a Petition for Certiorari. Thus, the Petition for Certiorari is hereby GRANTED. [BUREAU OF INTERNAL REVENUE-REVENUE REGION I REPRESENTED BY REGIONAL DIRECTOR JOSEPHINE S. VIRTUCIO VS HON WENDELL M. RAMITERRE, PRESIDING JUDGE OF THE REGIONAL TRIAL COURT BRANCH 26 OF SAN FERNANDO CITY, LA UNION, CTA SCA NO. 0011, JUNE 4, 2025]
[A SEPARATE AGREEMENT BETWEEN OR AMONG THE COMPANY’S AFFILIATES IS NECESSARY BEFORE AN OFFSETTING ARRANGEMENT CAN TAKE EFFECT BETWEEN AND/OR AMONG THEMSELVES] [DENIAL OF INPUT VAT REFUND CLAIM FOR FAILURE TO PROVIDE SUFFICIENT EVIDENCE OR DOCUMENTATION TO SUPPORT THE DETAILS OF THE OFFSETTING] [FAILURE TO SUBMIT A TRANSLATION OR A SUFFICIENT EXPLANATION CLARIFYING THE CONTENTS OF THE OFFSETTING SCHEDULE, IF WRITTEN IN A LANGUAGE NOT UNDERSTOOD BY THE COURT, MAY LEAD TO THE DENIAL OF THE INPUT VAT REFUND]
Petitioner Avaloq Philippines Operating Headquarters filed a Petition for Review seeking to reverse the earlier Decision rendered by the Court’s Special Third Division (Court in Division), which denied its claim for refund of excess and/or unutilized input value-added tax (VAT) attributable to its zero-rated sales for the first (1st) and second (2nd) quarters of calendar year (CY) 2018 and the Resolution denying its Motion for Reconsideration. The Petitioner argued that it has sufficiently proven the existence of an offsetting arrangement with non-resident foreign corporations (NRFCs) as an alternative to the actual inward remittance of foreign currency for purposes of VAT zero-rating. In addition, the Petitioner averred that this intercompany offsetting arrangement was clearly shown and sufficiently explained by its witness, Ms. Mary Lalaine V. Munar (Ms. Munar), who testified that whenever the Petitioner obtains a loan from its head office, Avaloq Group AG, which essentially constitutes its monthly funding, the amount is credited to the Avaloq Group AG group current account. In turn, the receivables from services rendered to affiliates are debited or offset against the same account. On the other hand, the Respondent Commissioner of Internal Revenue (CIR) countered that since the core issue involves a tax refund, which partakes of the nature of a tax exemption and is strictly construed against the claimant, the Petitioner must clearly prove its entitlement. In ruling, after a judicious review of the Petitioner’s arguments and the records of the case, the Court En Banc finds no reason to modify, much less reverse, the assailed Decision and Resolution. The Court explained that while the Short-Term Credit Facility Agreement (STCFA) confirms that the Petitioner had loan transactions in foreign currency with Avaloq Group AG, it fails to show that such advances can be offset against receivables from the Petitioner’s sale of services to other affiliates. The Court ruled that Avaloq Group AG is a distinct legal entity from its affiliates. Thus, the right of offset between the Petitioner and other affiliates cannot be presumed. If an offsetting arrangement exists among its affiliates, it should have been covered by a separate agreement, which the Petitioner failed to provide. Moreover, the Petitioner failed to establish the actual details of offsetting, relying solely on a Schedule of Offsetting of Receivables written in a language not understood by the Court. Despite being alerted to this issue in the earlier Decision, the Petitioner failed to submit a translation or adequate explanation that would clarify the contents of the document. In view of this, the Petition was DENIED for lack of merit, and the assailed Decision and Resolution issued by the Court in Division were AFFIRMED. [AVALOQ PHILIPPINES OPERATING HEADQUARTERS VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 2897, JUNE 3, 2025]
Grab tests drone-powered logistics in Metro Manila [BusinessWorld, June 25, 2025]
The pilot will test a hybrid delivery model, where Grab delivery partners handle pick-ups and drop-offs from designated drone landing stations, while drones manage the middle leg of trips for faster and more seamless service, it said.
Private firm all set to take over from electric cooperatives in Iloilo [Philippine Daily Inquirer, June 24, 2025]
Despite More Power’s expanded franchise, Cabunagan clarified that Ileco I and II were not being stripped of their existing franchises. However, the decision opened the door for competition and gave consumers another option.
SC division: Actual knowledge of sale can replace written notice [GMA News Online, June 24, 2025]
There is no written notice required if co-owners are properly informed about the sale of a shared property and failed to exercise their right to buy the share within 30 days, according to the Supreme Court (SC).
APECO secures vital land for airport project [Philippine Information Agency, June 23, 2025]
BALER, Aurora (PIA) – The Aurora Pacific Economic Zone and Freeport Authority (APECO) has acquired an additional 12-hectares of land in Barangay Esteves, Casiguran to support the transformation of its existing airstrip into a fully operational commercial airport.
https://pia.gov.ph/apeco-secures-vital-land-for-airport-project/
SCTEX Interchange eyed in Hermosa, Bataan — BCDA [GMA News Online, June 23, 2025]
According to the BCDA, the interchange will be a joint collaboration with the Department of Public Works and Highways (DPWH), NLEX Corp., and the local government of Hermosa, as part of the long-term development strategy to boost regional connectivity along the SCTEX.
Palace declares public holidays for June, July [Philippine Daily Inquirer, June 22, 2025]
President Marcos has declared more local holidays for June and July to allow Filipinos to celebrate festivals and founding anniversaries in their communities.
https://newsinfo.inquirer.net/2073348/palace-declares-public-holidays-for-june-july
Methanol-fueled ship to be built in Cebu [The Manila Times, June 22, 2025]
PRESIDENT Ferdinand Marcos Jr. said that leading shipbuilder Tsuneishi Shipbuilding Co. Ltd. would build the world’s first methanol dual-fueled bulk carrier in Cebu.
https://www.manilatimes.net/2025/06/22/regions/methanol-fueled-ship-to-be-built-in-cebu/2137366
Gatchalian wants to shorten college, prioritize critical thinking in SHS [ABS-CBN News, June 22, 2025]
In a statement, Gatchalian said that he intended to file a bill in the 20th Congress that would cut the time spent in tertiary education “depending on the program.”
Philippines needs to market to semiconductor industry at large [The Philippine Star, June 22, 2025]
SILICON VALLEY, California – The Philippines has an established semiconductor system, but the country needs to market itself to the industry at large, the head of SEMI – a global industry association advancing the semiconductor and electronics manufacturing supply chain – said.
No payslip, no proof: Supreme Court reminds employers to prove salaries paid to employees [The Philippine Star, June 20, 2025]
Do you receive a copy of your payslip every time your salary is deposited into your payroll account? If not, that absence could be used as evidence in cases involving alleged labor violations.
Investment firm faces raps for violating securities law [Philippine Daily Inquirer, June 20, 2025]
The Department of Justice (DOJ) said on Thursday that it has found prima facie evidence with reasonable certainty of conviction against the Maria Francesca Tan (MFT) Group of Companies, including its officers and representatives, for multiple violations of the Securities Regulation Code and other laws.
https://newsinfo.inquirer.net/2072553/investment-firm-faces-raps-for-violating-securities-law
St. Luke’s breaking ground for P18 billion Parañaque hospital [The Philippine Star, June 20, 2025]
St. Luke’s Medical Center (SLMC) has upgraded its plans for the multi-billion-peso hospital that will rise in Parañaque, resulting in a one-year delay in its expected opening.
Pasig court clears Ressa, Rappler execs in Anti-Dummy Law case [ABS-CBN News, June 19, 2025]
A Pasig court dismissed the Anti-Dummy Law case against Rappler CEO Maria Ressa and five other executives, saying evidence presented of alleged foreign ownership or control of the news website was “grossly insufficient”.
Firms in Spain earn nod to send meat to the Philippines [Philippine Daily Inquirer, June 19, 2025]
Spain has secured a three-year accreditation to export chicken and turkey to the Philippines. The Department of Agriculture (DA) said this would boost the supply of meat in the archipelago.
https://business.inquirer.net/531329/firms-in-spain-earn-nod-to-send-meat-to-the-philippines
Philippines to adopt OECD cryptocurrency tax framework [Philippine Daily Inquirer, June 18, 2025]
The mystique nature of crypto makes such digital assets difficult to tax. That said, the OECD, together with G20 countries, developed CARF to provide a framework for annual, automatic exchange of tax information among participating countries whose residents engage in crypto activities.
https://business.inquirer.net/531185/ph-to-adopt-oecd-crypto-tax-framework
20-day TRO granted: Sid Consunji blocks tax collection on Semirara fuel imports [Bilyonaryo, June 18, 2025]
The complaint seeks to prevent the Department of Finance (DOF), Bureau of Internal Revenue (BIR), and Bureau of Customs (BOC) from imposing taxes under Section 295 (F) of the National Internal Revenue Code (NIRC), as amended by the CREATE Law.
PSE unit to return ‘intact’ shares of Equitiworld to clients [Philippine Daily Inquirer, June 18, 2025]
This comes months after the SEC ordered CMIC to take control of Equitiworld’s assets, books and records to protect the broker’s customers. The SEC found that the company was “no longer capable to readily meet the demands” of customers.
https://business.inquirer.net/531162/pse-unit-to-return-intact-shares-of-equitiworld-to-clients
New Zealand approves medicinal use of ‘magic mushrooms’ [Inquirer.Net, June 18, 2025]
Deputy Prime Minister David Seymour said rules had been relaxed so psilocybin could be used to treat certain types of depression.
https://globalnation.inquirer.net/281083/new-zealand-approves-medicinal-use-of-magic-mushrooms
Cargill expands Mindanao footprint with Biotech feed production partnership [Manila Bulletin, June 17, 2025]
By setting up a dedicated production line at the Biotech Agro-Industrial Complex in Tantangan, South Cotabato, Catacutan said Cargill aims to solidify its position in the region and contribute to the country’s food system.
https://mb.com.ph/2025/06/26/navigating-the-future-of-generations
DOTr: Marcos to soon sign bill on right-of-way sites [ABS-CBN News, June 17, 2025]
President Ferdinand Marcos Jr. will soon sign the bill amending the existing right-of-way approved by lawmakers before the 19th Congress adjourned last week, the Department of Transportation (DOTr) said.
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