PH tax bureau: changes underway to prevent LOA abuse
Other Relevant Tax Updates:
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TAX & BUSINESS-RELATED NEWS [DECEMBER 1-5]
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BIR RULINGS ON VAT ZERO-RATING, SCHOOL’S TAX EXEMPTION, WITHHOLDING ON PAYMENT TO A DOMESTIC MARKET ENTERPRISE, SOURCE OF INCOME RULE, PAGCOR’S CONTRACTEES & LICENSEES TAXATION & PHILIPPINE-SOURCED INCOME OF FOREIGN GOVERNMENT
I. TAX & BUSINESS-RELATED NEWS [DECEMBER 1-5]
1. Filipinos see financial literacy gaps among heirs
2. SEC issues new public ownership framework to boost IPOs
3. CREC taps P4-B BPI loan for Pangasinan solar park
4. EEI to assume P11.4-B debt of new property unit
5. TV5 cites unpaid revenues as ABS-CBN partnership faces end
6. New rules push LGUs to tap billions in unspent funds for reading programs
7. Aprio eyeing expansion of Philippine workforce to 750 by 2030
8. Peza OKs P3-B Panasonic outlay in Laguna
9. Discaya-owned construction firms lose SEC license over false ownership data
10. SEC drafts rules on public offering of ‘sukuk’ securities
11. ‘Concerned’ DOH employees ask Ombudsman to probe Herbosa over ‘close ties’ with drug firm
12. Marcos OKs IPPs’ real property tax cuts, penalties condonation for 2025
13. Megaworld named among Fortune’s 100 best firms to work for in SEA
14. Bill hiking gov’t economic relief allowance to P7k filed in House
15. Gateway Group, Borromeo Motoring Group take over former Ayala-run Honda dealerships
16. DOLE: Employers should have safety protocols for workers amid disruptive events
17. Zaldy Co firm’s dispute with DigiPlus still hangs—lawyers
II. BIR RULINGS
VAT ZERO-RATING UNDER THE 2021 CREATE LAW APPLIES SOLELY TO EXPENDITURES THAT ARE STRICTLY NECESSARY FOR THE REGISTERED PROJECT OR ACTIVITY, EXCLUDING ANY COSTS THAT, WHILE BENEFICIAL, ARE NOT INDISPENSABLE TO ITS ONGOING OPERATION
C Construction Co. (C Co.) seeks confirmation that its sale of services to I Co., a PEZA-registered Ecozone Export Enterprise, is subject to Value-Added Tax (VAT) at a zero-percent rate. As represented, I Co. contracted C Co. to perform roof overlay and roof framing rehabilitation work at its factory at Cavite Export Processing Zone (CEPZ), Rosario, Cavite, on April 26, 2022. Eighty percent (80%) of the project cost covered the Production Area, while the remaining twenty percent (20%) pertained to the Administration Area. Prior to the start of the project, C Co. applied for VAT zero-rating with the BIR Large Taxpayers (LT) Service, but the application was denied on June 29, 2022, on the grounds that the roof works were not considered exclusively and directly attributable to I Co.’s registered activity. In reply, under Section 5, Rule 2 of the Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE Law), provides that Registered Export Enterprises (REEs) are granted VAT zero-rating incentive on their local purchases of goods and services that are directly and exclusively used in its registered project or activity. Only expenditures that are strictly indispensable to the project qualify; costs that may be helpful but not essential to its continuous operation are excluded. The BIR also stressed that determining whether a purchase is truly indispensable depends on the specific facts of each case, as evaluated by the BIR. Given that the Regular LT Audit Division III has already reviewed I Co.’s application and supporting documents in line with the CREATE Law, the BIR upholds its factual findings and its conclusion that the project’s total cost does not qualify for VAT zero-rating. [BIR RULING NO. 055-2025, APRIL 14, 2025]
If you wish to get a copy of complete text of CTA cases, please e-mail us at taxseminars@dmdcpa.com.ph.
Filipinos see financial literacy gaps among heirs [The Philippine Star, December 5, 2025]
Albay 3rd District Rep. Raymond Adrian Salceda has moved to scrap the estate tax, filing a bill that would eliminate the levy so families no longer incur taxes when a relative dies.
SEC issues new public ownership framework to boost IPOs [The Philippine Star, December 5, 2025]
The draft memorandum circular proposes a tiered approach to public ownership
requirements, which are calibrated according to issuer size and intended to balance multiple policy considerations, including market liquidity, investor protection, capital formation and overall market competitiveness.
CREC taps P4-B BPI loan for Pangasinan solar park [Philippine Daily Inquirer, December 5, 2025]
Citicore Renewable Energy Corp. (CREC) has obtained a P3.975-billion loan from Bank of the Philippine Islands (BPI) to support its ongoing expansion in the renewable energy sector.
EEI to assume P11.4-B debt of new property unit [Philippine Daily Inquirer, December 5, 2025]
EEI Corp. plans to shoulder the P11.4-billion debt of its newly acquired property firm while merging two more units to strengthen its real estate push.
TV5 cites unpaid revenues as ABS-CBN partnership faces end [The Manila Times, December 4, 2025]
Television network TV5 on Thursday released a detailed statement explaining why its content partnership with ABS-CBN may soon be terminated, hours after ABS-CBN confirmed it had received a notice about the possible end of the agreement.
New rules push LGUs to tap billions in unspent funds for reading programs [The Philippine Star, December 4, 2025]
From 2018 to 2022, local governments failed to spend at least P15 billion of their Special Education Fund — funding support for public schools collected from tax on real property, EDCOM 2 reported last year. Cities had the worst underutilization rate at 57%, despite persistent shortages in classrooms and learning materials in their schools.
Aprio eyeing expansion of Philippine workforce to 750 by 2030 [BusinessWorld Online, December 4, 2025]
APRIO, a US-based advisory and accounting firm, is targeting an increase in its Philippine workforce to 750 employees by 2030, part of its strategy to support its growing global client base.
Peza OKs P3-B Panasonic outlay in Laguna [Philippine Daily Inquirer, December 4, 2025]
Panasonic intends to operate as a domestic market enterprise and launch new projects at the Laguna Technopark. The plan is to manufacture electric fans, refrigerators and washing machines.
Discaya-owned construction firms lose SEC license over false ownership data [Philippine Daily Inquirer, December 4, 2025]
Cezarah Rowena Cruz-Discaya claimed during a Senate hearing last September that she was the owner of St. Timothy and St. Gerrard.
However, the SEC said its records showed no name of Discaya in the declarations of St. Timothy from 2022 to September 2025. Records of St. Gerrard from 2022 to 2024 likewise showed no such name.
SEC drafts rules on public offering of ‘sukuk’ securities [Philippine Daily Inquirer, December 4, 2025]
Sukuk securities refer to Shariah-compliant certificates that represent a group or individual’s ownership or interest in an asset.
‘Concerned’ DOH employees ask Ombudsman to probe Herbosa over ‘close ties’ with drug firm [Inquirer.Net, December 3, 2025]
Some personnel from the Department of Health (DOH) on Wednesday asked the Office of the Ombudsman to investigate Health Secretary Teodoro Herbosa for possible violations of anti-graft and procurement laws over his alleged close ties with a health contractor.
Marcos OKs IPPs’ real property tax cuts, penalties condonation for 2025 [Inquirer.Net, December 3, 2025]
For the third time, President Ferdinand Marcos Jr. has ordered the reduction and pardon of all interest and penalties on real property taxes (RPT) imposed on independent power producers (IPP) this year to prevent defaults and economic losses that could affect electricity supply and the government’s fiscal stability.
Megaworld named among Fortune’s 100 best firms to work for in SEA [BusinessWorld, December 3, 2025]
Megaworld’s inclusion in the US-based magazine’s ranking was driven by its “Great Place to Work” certification, where the company generated a 94% employee approval rating — the highest among all major real estate developers in the Philippines.
Bill hiking gov’t economic relief allowance to P7k filed in House [GMA News Online, December 2, 2025]
House Deputy Speaker and TUCP Party-list Rep. Raymond Demorito Mendoza has proposed to set the Personnel Economic Relief Allowance for government employees at P7,000, subject to a yearly review, and institutionalize it as a permanent provision for civil servants.
Gateway Group, Borromeo Motoring Group take over former Ayala-run Honda dealerships [The Manila Times, December 2, 2025]
Under the new setup, the Gateway Group will assume control of Honda Cars Makati, Cebu, Negros, Cagayan de Oro, and Alabang — five outlets that were long part of the Ayala group’s dealership portfolio. The Borromeo Motoring Group, meanwhile, will take over Honda Cars Bacoor, Pasig, Mandaue, and Iloilo, expanding its footprint in key urban and provincial markets.
DOLE: Employers should have safety protocols for workers amid disruptive events [GMA News Online, December 2, 2025]
In Labor Advisory No. 15, series of 2025, the Department of Labor and Employment (DOLE) underscored the need for stronger workplace preparedness and reinforced labor protections.
Zaldy Co firm’s dispute with DigiPlus still hangs—lawyers [GMA News Online, December 1, 2025]
The dispute stems from DigiPlus’ desire to exit its partnership with Co in Midas Hotel and Casino, with its stake valued at P2.5 billion. Eco Leisure claimed its right of first refusal, offering to match the bid to acquire the stake, which DigiPlus accepted.
However, Eco Leisure later said it would only pay P1 billion, arguing that DigiPlus owed them billions in unpaid reimbursements.
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