DOLE: Private sector may adopt flexible work arrangements amid rising oil prices
Other Relevant Tax Updates:
- TAX & BUSINESS-RELATED NEWS [MARCH 11-19]
- SEC LEGAL OPINION ON REPRESENTATIVE OFFICE, DORMANT OR INACTIVE STOCKHOLDERS & CONVERSION OF COMMON SHARES TO REDEEMABLE PREFERRED SHARES
- COURT OF TAX APPEALS CASES
I. TAX & BUSINESS-RELATED NEWS [MARCH 11-19]
1. Philippine Coconut Authority opposes proposed suspension of biofuel blending
2. D&L unfazed by looming suspension of biofuel blending
3. Conglomerates brace for higher operating costs amid Middle East war
4. DOLE: Private sector may adopt flexible work arrangement amid rising oil prices
5. Donny Pangilinan, dad Anthony reduce diesel price at own gas station
Philippine Coconut Authority opposes proposed suspension of biofuel blending [GMA News Online, March 19, 2026]
The coconut industry regulator emphasized that “any suspension or displacement of coconut methyl ester (CME) in favor of imported palm methyl ester (PME) would likely redirect domestic supply to lower-priced export markets, thereby exerting downward pressure on local copra and CNO prices.”
D&L unfazed by looming suspension of biofuel blending [Philippine Daily Inquirer, March 18, 2026]
D&L operates in the biodiesel sector through Chemrez Technologies Inc., one of the country’s leading producers of coconut-based biodiesel.
https://business.inquirer.net/580227/dl-unfazed-by-proposed-suspension-of-biofuel-blending
Conglomerates brace for higher operating costs amid Middle East war [BusinessWorld, March 18, 2026]
“At this time, with all of this conflict in the Middle East, I guess maybe there’s still a lot of fear in all of us. But having said that, I guess the lights go on, business goes on, capex (capital expenditure) goes on. Of course, there are more risks, and maybe the thing that will be higher is the opex (operating expenses). So, we just have to make our business more efficient, lower our margins, to survive these temporary hiccups,” SM Investments Corp. Vice-Chairperson Teresita T. Sy-Coson said during a panel discussion at the Philippine Stock Exchange’s InvestPH conference on Mar. 17.
DOLE: Private sector may adopt flexible work arrangement amid rising oil prices [GMA News Online, March 17, 2026]
Under a four-day workweek arrangement, the standard 40-hour workweek may be distributed across four working days instead of five, with the corresponding hours added from Monday to Thursday if work is suspended on Friday.
Donny Pangilinan, dad Anthony reduce diesel price at own gas station [Inquirer. Net, March 17, 2026]
“Starting [March 17], we are reducing our prices for diesel products in our station in South Forbes and are absorbing part of the rising costs for the members of our community,” he stated. “The actual amounts are posted on site and we will keep it running for as long as we are able.”
II. SEC LEGAL OPINION
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REPRESENTATIVE OFFICES ARE STRICTLY LIMITED TO INFORMATION DISSEMINATION & PROMOTION OF PRODUCTS AND/OR SERVICES OF THE HEAD OFFICE C. Co. is seeking an opinion on whether the Manila Representative Office (MRO) may engage the services of an independent contractor (IC) actively participate in implementing a service agreement between K Marine Ship Management Pte. Ltd. (KMSM) and KKK Ltd. (KKK), a company organized under Japan laws—particularly activities related to supervising a manning agent, supporting recruitment and training of seafarers, and executing an independent contractor agreement—without violating the limits of a representative office’s allowable activities under Philippine law. In reply, the SEC opined in the negative, holding that these acts go beyond the passive functions of information dissemination and promotional activities stated in the Representative Office’s license. Further, this constitutes active, income‑oriented, and commercial participation in the head office’s business. In the case of Commissioner of Internal Revenue (CIR) v. Shinko, the Supreme Court (SC) explained that representative offices cannot enter contracts on their own and they only refer contracts to the parent company. However, MRO’s acts involve the execution of contracts and payment of compensation and do not involve direct dealings with the head office’s clients. Therefore, the proposed activities are not permissible for a representative office under the Foreign Investments Act (FIA) and the specific terms of the office’s license. [SEC OFFICE OF THE GENERAL COUNSEL LEGAL OPINION NO. 26-05, MARCH 5, 2026]
DORMANT OR INACTIVE STOCKHOLDERS REMAIN STOCKHOLDERS OF RECORD & ARE ENTITLED TO ALL THE RIGHTS ATTACHED TO THEIR SHARES Secured Bank Inc. (SBI) is seeking an opinion on the appropriate treatment of unlocated stockholders reflected in its records. These pertain to the 29 stockholders who failed to respond to notices of Special Stockholders’ Meetings and were classified as “unlocatable stockholders.” Accordingly, their status raised governance issues involving quorum validation, voting rights, dividend distribution, and subscription eligibility. In reply, the SEC clarified that an implied trust is created over the shares of dormant or inactive stockholders. SBI must record these shares in its corporate books under a trustee capacity, with the corporation acting as fiduciary for the unlocated stockholders. Despite being inactive or unlocatable, these individuals remain stockholders of record with full ownership and property rights. SBI is, therefore, required to maintain their status as stockholders and must continue exerting and exhausting all reasonable efforts to locate them. For governance purposes, all stockholders of record, including dormant or inactive ones, should continue to be factored into the denominator of the quorum calculation and cannot be excluded from the quorum count. The SEC further emphasized that the right to vote of dormant or inactive stockholders is an absolute and protected property right. SBI is, therefore, prohibited from voting the shares without proper authorization or representation. Lastly, since dormant stockholders remain stockholders of record, their right to dividends is fully protected. SBI must credit them with the full value of any declared dividends, regardless of their inactive status. [SEC OFFICE OF THE GENERAL COUNSEL OPINION NO. 26-04, FEBRUARY 20, 2026]
[AN AMENDMENT TO THE ARTICLES OF INCORPORATION IS REQUIRED TO EFFECT THE CONVERSION OF COMMON SHARES INTO REDEEMABLE PREFERRED SHARES, INCLUDING APIC] [REDEEMABLE PREFERRED SHARES MAY BE REDEEMED AT OR BELOW THE ORIGINAL ISSUE PRICE REGARDLESS OF THE EXISTENCE OF UNRESTRICTED RETAINED EARNINGS, SUBJECT TO THE CORPORATION’S SOLVENCY] S Co. is seeking an opinion on the conversion of common shares with Additional Paid-In Capital (APIC) into Redeemable Preferred Shares (RPS) with APIC, as well as the determination of the redemption price. In reply, the SEC opined that the conversion of shares may only be effected if the corporation’s Articles of Incorporation (AOI) expressly provide for the convertibility of shares. In the absence of such provision, common shares cannot be converted into preferred shares. To formalize the conversion, an amendment of the AOI is required, provided that the conversion does not result in the watering of stock, the issuance of shares in excess of the authorized capital stock, or the distribution of corporate property to shareholders, and that it complies with the Trust Fund Doctrine. The conversion is likewise subject to approval by the SEC’s Financial Analysis and Audit Department (FAAD). The SEC further noted that the conversion of APIC-common shares into APIC-RPS is necessary to avoid confusion in the presentation of the different types of shares in the corporation’s financial statements. With respect to the determination of redemption price, the SEC stated that redeemable preferred shares may be redeemed at or below their original issue price regardless of the existence of unrestricted retained earnings, provided that the corporation remains solvent after redemption and has sufficient assets to cover its debts and liabilities, including capital stock. [SEC OFFICE OF THE GENERAL COUNSEL OPINION NO. 26-02, JANUARY 15, 2026] |
III. CTA CASES
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[PROOF OF MAILING IS NOT EQUIVALENT TO PROOF OF VALID SERVICE] [THE RESIDENCE OF AN INCORPORATOR DOES NOT AUTOMATICALLY BECOME THE CORPORATION’S AUTHORIZED ADDRESS FOR SERVICE OF OFFICIAL NOTICES] Petitioner Oroville Resources And Ventures, Inc. filed a Petition for Review with Motion to Quash Warrant of Distraint and Levy seeking to nullify and set aside the 2017 assessments issued by Respondent Commissioner of Internal Revenue (CIR). Petitioner argues that the assessment is void for violation of due process and improper service of the Letter of Authority (LOA), that it did not receive the Preliminary Assessment Notice (PAN) and Final Assessment Notice/Formal Letter of Demand (FAN/FLD), and that the deficiency taxes and compromise penalties lack legal and factual basis. Meanwhile, Respondent contends that the Court lacks jurisdiction due to Petitioner’s failure to protest the FLD/FAN, and that due process was observed under Revenue Regulations (RR) No. 18-2013 and the notices are deemed received. In ruling, the Court held that the assessment was void for violation of due process because the Respondent failed to prove proper service of the LOA, PAN, and FAN/FLD. The LOA was served on an unauthorized person at an address other than the taxpayer’s registered address without proof of valid prior attempts at personal service, while the PAN and FAN were likewise improperly served in violation of Section 228 of the Tax Code and RR No. 12-1999. It was admitted that the LOA was served upon Mr. Enriquez at the alleged known address, and despite knowing during cross-examination that he was merely the son of an incorporator and not an authorized representative of the corporation, the Revenue Officer still proceeded to serve the LOA on him. Although Mr. Enriquez received the LOA, Respondent failed to prove proper service, relying only on unsubstantiated claims without sufficient evidence to justify substituted service. Consequently, since the assessment was VOID, the WDL issued by the BIR was also declared void and without legal effect. [OROVILLE RESOURCES & VENTURES, INC. VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10243, FEBRUARY 27, 2026]
FAILURE OF THE BIR TO CONSIDER & ADDRESS THE TAXPAYER’S REPLY IS A VIOLATION OF DUE PROCESS UNDER SECTION 228 OF THE TAX CODE Petitioner Promesso Business Solutions Corp. filed a Petition for Review seeking to reverse and set aside the Final Decision on Disputed Assessment (FDDA) issued by the Respondent Commissioner of Internal Revenue (CIR), which held Petitioner liable for deficiency assessment. Several issues were raised on the propriety of the assessment findings, which were all countered by the Respondent asserting that tax assessments are presumed correct, pursuant to the presumption of regularity in the performance of the Revenue Officer’s investigation. In ruling, the Court held that it may resolve related issues not raised in the pleadings when necessary for a just and orderly disposition of the case, specifically it invalidated the assessment after finding that the Revenue Officers lacked authority to conduct the audit. Likewise, Petitioner’s right to due process was violated since the Final Assessment Notice failed to state a specific due date for payment, negating the existence of a valid demand—an essential element of a FAN. Moreover, despite the Petitioner’s reply to the PAN, the PAN and the FLD/FAN contained identical findings, differing only in the amount of interest. Applying the doctrine in Commissioner of Internal Revenue vs. Avon Products Manufacturing, Inc., the Court reiterated that the BIR must not only receive the taxpayer’s reply but also consider and address it. Otherwise, the due process requirements under Section 228 of the Tax Code are violated. Therefore, the Petition was GRANTED, and the assessment was declared VOID. Top of FormBottom of Form [PROMESSO BUSINESS SOLUTIONS CORP. VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10529, FEBRUARY 5, 2026] |
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