BIR rolls out new risk-based audit program
Other Relevant Tax Updates:
- TAX & BUSINESS-RELATED NEWS [AUGUST 31-SEPTEMBER 7]
- BIR CLARIFIES VAT REFUND QUALIFICATIONS OF DTI-EMB EXPORT-ORIENTED ENTERPRISES DURING TRANSITORY PERIOD
- SEC LEGAL OPINION ON POST-PRODUCTION & FILM REMASTERING
- COURT OF TAX APPEALS CASE ON PRESCRIPTIVE PERIOD OF CRIMINAL OFFENSE
I. TAX & BUSINESS-RELATED NEWS [AUGUST 31-SEPTEMBER 7]
1. Pax Silica data centers planned in ecozones with stronger supply, Palace says no proposals yet in PH
2. Palace says tax reforms can help manage gov’t debt
3. SM Foundation reaches highest number of active scholars to date
4. Oman, Singapore move to finalize tax treaties this year
5. SolGen asks Pasig court to resolve motions on wage hike freeze order
Pax Silica data centers planned in ecozones with stronger supply, Palace says no proposals yet in PH [Technobaboy, September 7, 2026]
Aguda explained that hyperscaler data centers need massive resources. To avoid straining inland communities, future data centers are planned in coastal provinces, citing Batangas and Bataan. These areas have direct access to seawater, with desalination plants that can also provide clean water for households.
Palace says tax reforms can help manage gov’t debt [GMA News Online, September 7, 2026]
She said lowering income taxes for ordinary workers and small businesses could leave taxpayers with more disposable income, which could circulate through the economy and potentially generate higher government revenues.
SM Foundation reaches highest number of active scholars to date [The Manila Times, September 7, 2026]
SM Foundation’s scholarship program now supports its highest number of active scholars to date, with 3,492 scholars pursuing their college education across the country.
Oman, Singapore move to finalize tax treaties this year [Inquirer.Net, September 7, 2026]
DTAs are treaties that clarify how countries tax income earned by their citizens and residents in each other’s jurisdictions and how they credit taxes already paid. Without such agreements, investors may face taxation on the same income in both their home country and the Philippines.
https://business.inquirer.net/609724/oman-singapore-move-to-finalize-tax-treaties-this-year
SolGen asks Pasig court to resolve motions on wage hike freeze order [The Philippine Star, September 6, 2026]
In a motion to resolve the OSG’s motion filed on September 3, state lawyers urged Pasig City Regional Trial Court Branch 152 to rule on the government’s “Urgent Motion for Reconsideration Ad Cautelam” filed on August 17, seeking to dismiss the cases filed by construction firms and set aside the court’s August 13 order that issued a writ of preliminary injunction against the wage hike order.
II. BIR CLARIFIES VAT REFUND QUALIFICATIONS OF DTI-EMB EXPORT-ORIENTED ENTERPRISES DURING TRANSITORY PERIOD
Revenue Memorandum Circular (RMC) No. 96-2026, issued on September 7, 2026, clarifies that Department of Industry-Export Marketing Bureau (DTI-EMB) Export-Oriented Enterprises (EOEs) may claim a Value-Added Tax (VAT) refund on passed-on VAT arising from local purchases and importations made during the transitory period from November 28, 2024 to December 31, 2025, provided that they secure the required DTI-EMB VAT zero-rating certification within the same period. The Circular further provides that EOEs that fail to obtain the certification shall not be entitled to a VAT refund in the immediately succeeding year; however, any unutilized input VAT may be carried forward and applied against future VAT liabilities. Refund claims remain subject to compliance with the applicable documentary and substantiation requirements.
If you wish to get a copy of complete text of CTA cases, please e-mail us at taxseminars@dmdcpa.com.ph.
III. SEC LEGAL OPINION
POST-PRODUCTION, FILM REMASTERING & DIGITAL RESTORATION SERVICES ARE NOT CONSIDERED MASS MEDIA OR ADVERTISING; 100% FOREIGN OWNERSHIP IS ALLOWED FOR EXPORT ENTERPRISES, SUBJECT TO FOREIGN INVESTMENT ACT CAPITALIZATION RULES FOR DOMESTIC MARKET ENTERPRISES
N Consulting is seeking an opinion on behalf of its potential foreign client on whether a proposed Philippine subsidiary engaged solely in film and video post-production activities, including remastering, film editing, digital restoration, image enhancement, and DVD authoring, would be considered engaged in mass media or advertising, and whether it may be 100% foreign owned. In reply, the proposed activities do not constitute advertising because the entity neither conceptualizes nor creates commercial messages nor advises advertisers on promotional campaigns. Likewise, it is not engaged in mass media, as it neither exercises editorial control over content nor disseminates information to the public, with its role limited to technical post-production and restoration services for materials intended for distribution outside the Philippines. Consequently, the constitutional foreign equity restrictions applicable to mass media and advertising do not apply. However, the ownership structure must still comply with the Foreign Investments Act (FIA). Thus, the proposed entity may be 100% foreign owned if it qualifies as an export enterprise and does not engage in activities included in the Foreign Investment Negative List (FINL). If it operates as a Domestic Market Enterprise (DME), it must satisfy the applicable minimum paid-in capital requirements under the FIA to exceed the 40% foreign equity threshold. [SEC OFFICE OF THE GENERAL COUNSEL LEGAL OPINION NO. 26-12, AUGUST 17, 2026]
IV. CTA CASE
[BIR SPECIAL PROSECUTORS CANNOT APPEAL ON BEHALF OF THE PEOPLE WITHOUT PROOF OF VALID OSG DEPUTATION] [THE FIVE-YEAR PRESCRIPTIVE PERIOD FOR TAX CRIMINAL OFFENSES IS NOT INTERRUPTED BY THE FILING OF A DOJ COMPLAINT UNDER THE PROSPECTIVE RULE IN PEOPLE V. CONSEBIDO] [WHERE THE INFORMATION IS FILED AFTER THE FIVE-YEAR PERIOD, THE TAX CRIMINAL ACTION IS ALREADY BARRED BY PRESCRIPTION]
Petitioner, the People of the Philippines, filed a Petition for Review, seeking reversal of the Resolutions rendered by the Court of Tax Appeals (CTA) 2nd Division, which dismissed the criminal case against Respondent AJ Corinthian Hauling Corporation and its responsible officers for willful failure to file an Income Tax Return (ITR). Petitioner argued that prescription commenced upon Respondents’ failure to file their 2013 ITR on April 15, 2014, and was interrupted when the Joint Complaint-Affidavit was filed with the Department of Justice (DOJ) on June 29, 2016. It relied on Tupaz v. Ulep instead of Lim, Sr. v. Court of Appeals, claiming that the criminal case was filed within the prescriptive period. On the other hand, Respondents countered that the five (5)-year prescriptive period began on June 29, 2016, when the offense was discovered, and expired on June 29, 2021. Under Lim, Sr. and the Revised Rules of the Court of Tax Appeals (RRCTA), prescription is interrupted only upon filing the Information before the CTA, not by filing the Complaint for Preliminary Investigation before the DOJ. Even if reckoned from April 15, 2014, prescription expired on April 15, 2019. Thus, the Information filed on May 27, 2024, was already time-barred. In ruling, the Court held that the BIR Special Prosecutors failed to establish that they were duly deputized by the Office of the Solicitor General (OSG) to file the appeal. The BIR’s internal delegation and its Memorandum of Agreement (MOA) with the OSG were insufficient without proof of actual deputation. The Court also held that the criminal action had already prescribed. Applying Lim, Sr. v. Court of Appeals, the filing of the DOJ complaint did not interrupt the prescriptive period, as the criminal action is instituted only upon the filing of the Information with the CTA. The period expired on June 29, 2021, but the Information was filed only on May 27, 2024. People v. Consebido did not apply because its new rule was made prospective. Even if prescription were counted from April 15, 2014, it would have expired in 2019. Thus, the Petition for Review was DENIED for lack of authority and, independently, for prescription. [PEOPLE OF THE PHILIPPINES VS. AJ CORINTHIAN HAULING CORPORATION, ARCELI S. SAJONAS & JOHN FITZ JERALD CLAUDIO, CTA EN BANC CRIMINAL CASE NO. 163, AUGUST 11, 2026]
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