Senators seek tax exemption for service charge, bonuses, MSMEs
Other Relevant Tax Updates:
TAX & BUSINESS-RELATED NEWS [JUNE 29-JULY 3]
- BIR TAX ADVISORY ON THE EXCISE TAX EXEMPTION WITHDRAWAL FOR PICK-UPS PURSUANT TO THE RECENTLY PASSED CMEPA LAW
- CTA CASES
I. TAX & BUSINESS-RELATED NEWS [JUNE 29-JULY 3]
- Del Monte Foods files for bankruptcy
- BOC chief suspends unserved letters of authority, mission orders
- SEC draft circular sets fines for OPCs failing to meet compliance deadlines
- Philippines falls $26 short of World Bank ‘upper middle income’ upgrade
- PLDT plans HQ in Filinvest City
- Carpio explains how Sara Duterte’s bank records can be disclosed in impeach trial
- Samal-Davao bridge construction continues despite SC writ
- EU flags Baclaran, Divisoria markets for IPR violations
- Senators seek tax exemption for service charge, bonuses, MSMEs
- Agoda, Trip.com also penalized for allegedly misleading flight fares: CAB
- It’s Official: Ayala Land Acquires New World Hotel Makati
- MREIT introduces new coworking space for startups
- Marcos to study if legislated wage hike will result in layoffs — Palace
- Visa to launch tap-to-pay service in PH this year
- PrimeWater responds to Carla Abellana’s concern about its services
- PH real estate emerges as gold standard for investment
- 21 renewable projects forwarded to NGCP for grid impact studies
- Manila Water takes over Wawa Bulk Water Supply Project
- SMGP unit plans 400-MW hydro project in Pangasinan
- Makati City Hall employees get permanent status, promotion20. DOTr: Marcos to soon sign bill on right-of-way sites
II. BIR TAX ADVISORY ON THE EXCISE TAX EXEMPTION WITHDRAWAL FOR PICK-UPS PURSUANT TO THE RECENTLY PASSED CMEPA LAW
In a Tax Advisory issued on June 27, 2025, BIR has advised all manufacturers, assemblers, and importers that starting July 1, 2025, pick-up trucks will be subject to excise tax under R.A. No. 12214 (Capital Market Efficiency Promotion Act), which amends Section 149 of the Tax Code and removes their current exemption. To comply, all concerned must conduct an inventory of pick-up trucks as of June 30, 2025, including all Completely Built-Up (CBU), Completely Knocked-Down (CKD), and Semi-Knocked-Down (SKD) units in plants, warehouses, customs premises, or in transit.
III. CTA CASES
[A CERTIFICATE OF TAX EXEMPTION OR RULING CANNOT BE A PRE-REQUISITE FOR THE AVAILMENT OF TAX INCENTIVE OR EXEMPTION BY A COOPERATIVE] [RULINGS MERELY OPERATE TO CONFIRM THE EXISTENCE OF THE CONDITIONS FOR EXEMPTION PROVIDED UNDER THE LAW; IF ALL THE REQUIREMENTS FOR EXEMPTION SET FORTH UNDER THE LAW ARE COMPLIED WITH, THE TRANSACTION IS CONSIDERED EXEMPT, WHETHER OR NOT A PRIOR BIR RULING WAS SECURED BY THE TAXPAYER] [NO PRIOR CONFIRMATORY RULING IS REQUIRED FOR TAX EXEMPTION OR REFUND]
Petitioner CCT Multi-Purpose Cooperative filed a Petition for Review praying that judgment be rendered cancelling and setting aside Respondent Commissioner of Internal Revenue’s (CIR) deficiency tax assessments for the Taxable Year (TY) 2016. The Petitioner argued that it is exempt from the said deficiency taxes as it timely filed its application for tax clearance before the expiration of its tax exemption. In addition, the Petitioner averred that the tax exemption of a registered cooperative is granted by law and does not arise from the Certificate of Tax Exemption (CTE), hence, it maintains that the Respondent erred in finding that it is liable for deficiency taxes. Contrarily, the Respondent contended that in the absence of a renewed CTE, and for Petitioner’s failure to renew its CTE, it is liable for pro-rata deficiency taxes for the four-month period, starting from the date of expiration on March 28, 2016, to the issuance date of the renewal of tax exemption on August 10, 2016. In ruling, the Court held that under Article 144 of Republic Act (R.A.) No. 6938, as amended by RA No. 9520, otherwise known as the Philippine Cooperative Code of 2008, cooperatives must obtain a CTE from the BIR after registering with the Cooperative Development Authority (CDA), and the validity of the exemptions shall be for a period of five (5) years from the date of issuance. However, the same provision is silent about the tax consequences after the expiration of the said five (5)-year period, in case no renewal of the CTE was made. The flaw in Section 3(e) of the Joint Rules and Regulations, dated February 5, 2010, is that it assumes that it is the BIR which grants tax exemptions to cooperatives. To be clear, it is the law that grants tax incentives or exemptions to cooperatives and not the BIR. Instead, what the BIR issues is a certificate that embodies a confirmatory ruling for the tax incentives or exemptions to be enjoyed by a certain cooperative. On this score, such a certificate is akin to, or is in the nature of, a BIR Ruling. It is well established that a prior BIR or confirmatory ruling is not required to claim tax exemption citing the Supreme Court case of CIR vs. Co, et al., G.R. No. 241424, dated February 26, 2020. Since BIR Rulings, including CTEs, merely operate to confirm tax exemption conditions under the law, the absence of which should not negate the availment of the tax exemption being invoked. As a corollary, the BIR should assess the claim’s merits, rather than reject it solely due to lack of a prior confirmatory ruling. On another note, the Independent Certified Public Accountant (ICPA) impliedly admits that he failed to verify completely all the files of the Petitioner, for him to have a finding that the latter transacted only with its members in 2016. However, considering that there is no indication that Petitioner’s Certificate of Registration (COR) issued by the CDA has been cancelled or revoked, the same shall be conclusive evidence of such fact of registration, thereby entitling the Petitioner to the income tax exemption granted under Section 61(2)(a) of RA No. 6938, as amended by RA No. 9520. Nevertheless, the Petitioner has not shown that it is exempt from VAT and EWT. Neither is there any showing that the subject VAT and EWT assessments had prescribed. In view of this, the Petition was PARTIALLY GRANTED. The subject deficiency income tax assessment was CANCELLED and SET ASIDE. However, the deficiency assessments for the VAT, EWT, and DST were hereby UPHELD WITH MODIFICATIONS. [CCT MULTI-PURPOSE COOPERATIVE VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10351, JUNE 24, 2025]
[THE PRESCRIPTIVE PERIOD FOR ASSESSING TAXES BENEFITS BOTH THE GOVERNMENT & THE TAXPAYER] [BEFORE SIGNING THE WAIVER, THE CIR, OR THE REVENUE OFFICIAL AUTHORIZED BY HIM, MUST MAKE SURE THAT THE WAIVER IS IN THE PRESCRIBED FORM, DULY NOTARIZED & EXECUTED BY THE TAXPAYER OR HIS DULY AUTHORIZED REPRESENTATIVE] [THE NIRC ALLOWS A TAXPAYER TO FILE A REPLY, OR OTHERWISE TO SUBMIT COMMENTS OR ARGUMENTS, WITH SUPPORTING DOCUMENTS, AT EACH STAGE IN THE ASSESSMENT PROCESS]
Petitioner Square Top, Inc., filed a Petition for Review seeking the cancellation of the assessment issued by the Respondent Commissioner of Internal Revenue (CIR) for the Taxable Year 2009. The Petitioner argues that the Court has jurisdiction and raises several procedural and substantive issues, including the late issuance of the Formal Letter of Demand/Final Assessment Notices (FLD/FANs), the invalidity of the First Waiver, the unauthorized conduct of the audit, the failure to address arguments in its protest, the lack of a fixed tax liability, and the expiration of the period to collect the alleged tax deficiencies. On the other hand, the Respondent contends that the Revenue Officer (RO) had proper authority to assess the Petitioner, the FLD/FANs were validly and timely issued, the BIR’s right to collect the deficiency taxes has not prescribed, and the Final Decision on Disputed Assessment (FDDA) is legally justified and correct. In ruling, the Court found that the RO who conducted the audit was properly armed with a valid Letter of Authority (LOA), specifically naming RO Cartagena as authorized to examine the Petitioner’s books of account. However, despite proper authorization, the Court ruled that the assessment was invalid because the prescriptive period for issuing the FLD/FANs had already lapsed. The FLD/FANs were issued beyond the three-year period allowed under the Tax Code, and the First Waiver offered by the Respondent to justify the extension was found defective due to the lack of written authority of the signatory, improper notarization, and non-compliance with BIR procedures. Furthermore, the Court held that the Petitioner’s right to due process was violated when the BIR failed to address the substantial arguments raised in the Petitioner’s reply to the Preliminary Assessment Notice (PAN). The FLD/FANs merely repeated the contents of the PAN without explaining why the protest was rejected, which rendered the assessment void. Consequently, the corresponding FDDA and the Final Decision of the CIR are also void, and the Petitioner cannot be held liable for the alleged deficiency taxes. Thus, the Petition for Review was GRANTED, and the deficiencies in tax for TY 2009 were CANCELLED and SET ASIDE. [SQUARE TOP, INC. VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10571, JUNE 24, 2025]
[TAX CASES ARE PRACTICALLY IMPRESCRIPTIBLE, SO LONG AS THE PERIOD FROM DISCOVERY & INITIATION OF JUDICIAL PROCEEDINGS UP TO THE FILING OF COMPLAINT WITH THE DEPARTMENT OF JUSTICE (DOJ) DOES NOT EXCEED FIVE YEARS] [THE FIVE-YEAR PRESCRIPTIVE PERIOD BEGAN TO RUN FROM THE DISCOVERY OF THE VIOLATION OF SECTION 255 OF THE NIRC OF 1997 OR DELIBERATE FAILURE TO SUPPLY CORRECT & ACCURATE INFORMATION] [INORDINATE DELAY IN THE RESOLUTION & TERMINATION OF A PRELIMINARY INVESTIGATION VIOLATES THE ACCUSED’S RIGHT TO DUE PROCESS & THE SPEEDY DISPOSITION OF CASES]
The Petitioner, People of the Philippines, filed a Motion for Reconsideration (MR) seeking the reversal of the Court of Tax Appeals (CTA) En Banc’s decision, declaring that the offense charged against the Respondent Accused Ziegfried Loo Tian has prescribed, denying its Petition for Review, and upholding earlier Resolutions of the First Division. The Petitioner argued that the five-year prescriptive period under Section 281 of the Tax Code should have been tolled by the filing of the Joint Complaint-Affidavit (JCA) before the Department of Justice (DOJ). The Petitioner asserted that filing a complaint for preliminary investigation interrupts prescription even for tax offenses and that delays by the DOJ should not defeat the government’s right to prosecute. In contrast, the Respondent claimed that the case has prescribed, citing the Supreme Court ruling and Rule 9 of the Revised Rules of the Court of Tax Appeals (RRCTA), stating that only a Court filing interrupts prescription. He further argued that his constitutional right to speedy disposition of cases was violated, as over ten (10) years had passed between the JCA and the actual filing of the Information with the Court. In ruling, the CTA En Banc held that the five-year prescriptive period is interrupted once a Complaint is filed with the DOJ for preliminary investigation, consistent with jurisprudence under both the Revised Penal Code and other special laws. Therefore, the filing of the JCA with the DOJ on July 5, 2012, interrupted the five-year prescriptive period, and the case had not yet prescribed when the Information was filed on October 26, 2022. However, the Court found that the Prosecution violated the respondent’s constitutional right to speedy disposition of cases. From the JCA’s filing in 2012, it took over ten (10) years before the Information was filed, with long and unexplained delays at each stage. Applying the Supreme Court’s guidelines in Cagang, the Court held that the Prosecution failed to justify the delay. Since this prolonged inaction prejudiced the Respondent and he raised his rights in a timely manner, the Court ruled that the case should be DISMISSED, not due to prescription, but due to an inordinate delay that violated his constitutional rights. [PEOPLE OF THE PHILIPPINES VS. ZIEGFRIED LOO TIAN, CTA EN BANC CRIMINAL CASE NO. 102, MAY 30, 2025]
Del Monte Foods files for bankruptcy [Philippine Daily Inquirer, July 3, 2025]
MANILA, Philippines – The loss-making American unit of food giant Del Monte Pacific Ltd. (DMPL) has put assets up for sale and sought bankruptcy court protection as part of a rehabilitation program drawn up with creditors.
https://business.inquirer.net/533818/del-monte-foods-files-for-bankruptcy
BOC chief suspends unserved letters of authority, mission orders [Philippine News Agency, July 3, 2025]
Newly appointed Bureau of Customs (BOC) Commissioner Ariel Nepomuceno has ordered the suspension of the implementation of all previously approved but unserved letters of authority (LOAs) and mission orders (MOs).
https://www.pna.gov.ph/articles/1253493
SEC draft circular sets fines for OPCs failing to meet compliance deadlines [BusinessWorld, July 3, 2025]
THE Securities and Exchange Commission (SEC) has released a draft memorandum circular (MC) containing guidelines for the compliance of one-person corporations (OPCs), which will be open for public comment until July 11.
Philippines falls $26 short of World Bank ‘upper middle income’ upgrade [The Philippine Star, July 3, 2025]
The World Bank has retained the Philippines’ classification as a lower middle income country, despite President Ferdinand Marcos Jr.’s administration pushing for an upgrade to upper middle income status.
PLDT plans HQ in Filinvest City [BusinessWorld, July 3, 2025]
PLDT, the newest major locator in Filinvest City, will build a five-hectare PLDT tech campus in the Southgate District, Filinvest Alabang, Inc. (FAI) said in an e-mail statement.
https://www.bworldonline.com/corporate/2025/07/03/682924/pldt-plans-hq-in-filinvest-city/
Carpio explains how Sara Duterte’s bank records can be disclosed in impeach trial [The Philippine Star, July 2, 2025]
One legal avenue is through Republic Act 1405, or the Bank Secrecy Law. While it generally protects deposits as “absolutely confidential,” he said it makes exceptions, including in impeachment cases and when the depositor gives their written consent for their records to be examined.
Samal-Davao bridge construction continues despite SC writ [Philippine News Agency, July 2, 2025]
The Department of Public Works and Highways-Davao (DPWH-11) said Wednesday that construction of the Samal Island-Davao City Connector (SIDC) project is continuing, despite the Supreme Court (SC) issuing a Writ of Kalikasan concerning the project.
https://www.pna.gov.ph/articles/1253409
EU flags Baclaran, Divisoria markets for IPR violations [BusinessWorld, July 2, 2025]
“Stakeholders continue to report Baclaran and Divisoria markets in Manila for offering a wide range of counterfeit goods on a wholesale and retail basis, in particular footwear and apparel, with some stalls allegedly also running online shops offering counterfeit goods,” according to the Report on the Protection & Enforcement of Intellectual Property Rights issued by the European Commission (EC).
Senators seek tax exemption for service charge, bonuses, MSMEs [ABS-CBN News, July 1, 2025]
Senator Sherwin Gatchalian is pushing what he calls the Ginhawa Act, which seeks expand the coverage of tax exemption to those making P400,000 annually. He also wants a larger tax exemption coverage for bonuses.
https://www.abs-cbn.com/news/business/2025/7/1/-wage-hike-bills-filed-anew-in-20th-congress-1935
Agoda, Trip.com also penalized for allegedly misleading flight fares: CAB [ABS-CBN News, July 1, 2025]
The board noted that the Air Passenger Bill of Rights orders air carriers and their agents to provide full, fare, and clear disclosure of all the terms and conditions of the contract of carriage, including fare details.
It’s Official: Ayala Land Acquires New World Hotel Makati [Esquire, July 1, 2025]
The acquisition expands ALI’s subsidiary AyalaLand Hospitality’s (ALH) portfolio, which includes the homegrown Seda Hotels (with 11 properties all over the Philippines), the boutique resort Huni Lio within Lio Tourism Estate in El Nido, and El Nido Resorts (with four island resorts in Palawan). ALI also partnered with international hotel companies, Accor for Fairmont and Raffles Makati; and IGH for Holiday Inn & Suites Makati.
MREIT introduces new coworking space for startups [Philippine Daily Inquirer, July 1, 2025]
This comes after MREIT Inc. partnered with coworking space provider Common Ground to launch Digital Park McKinley Hill within the 50-hectare McKinley Hill township in Taguig City.
https://business.inquirer.net/533381/mreit-introduces-new-coworking-space-for-startups
Marcos to study if legislated wage hike will result in layoffs — Palace [GMA News Online, July 1, 2025]
At least 1.2 million minimum wage earners in the National Capital Region (NCR) are set to receive higher salaries next month after the regional wage board approved a P50 increase in the daily minimum wage.
Visa to launch tap-to-pay service in PH this year [GMA News Online, July 1, 2025]
Visa Pay is a service designed to connect any participating wallet to any Visa-accepting merchant, local or international, in-store or online, to its global network, allowing consumers to pay globally by tapping, scanning, or online.
PrimeWater responds to Carla Abellana’s concern about its services [The Philippine Star, June 30, 2025]
The actress had earlier posted in her Instagram story about the disconnection notice from the Villar family-owned water service provider of her Tagaytay property.
PH real estate emerges as gold standard for investment [Inquirer.Net, June 30, 2025]
According to global real estate services company Santos Knight Frank, the office sector is taking the lead with occupancy levels rising as more business process outsourcing (BPO) firms choose to expand within Metro Manila, reaffirming its position as a top outsourcing destination.
https://business.inquirer.net/533474/ph-real-estate-emerges-as-gold-standard-for-investment
21 renewable projects forwarded to NGCP for grid impact studies [BusinessWorld, June 30, 2025]
THE Department of Energy (DoE) endorsed 21 energy projects in May for system impact studies (SIS) by the National Grid Corp. of the Philippines (NGCP).
Manila Water takes over Wawa Bulk Water Supply Project [Philippine Daily Inquirer, June 30, 2025]
Manila Water Company Inc. is beefing up its operations with the acquisition of WawaJVCo, Inc., another unit of the Razon Group that operates the Wawa Bulk Water Supply Project in Rizal province.
https://business.inquirer.net/533292/manila-water-takes-over-wawa-bulk-water-supply-project
SMGP unit plans 400-MW hydro project in Pangasinan [BusinessWorld, June 30, 2025]
SAN ROQUE Hydropower, Inc. (SRHI), a unit of San Miguel Global Power, Inc. (SMGP), is expanding its renewable energy portfolio with a planned 400-megawatt (MW) pumped-storage hydropower project in Pangasinan.
Makati City Hall employees get permanent status, promotion [ABS-CBN News, June 29, 2025]
The local government of Makati has granted permanent status to a total of 1,695 casual employees and promoted 914 regular workers.
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