DoF cool to extending estate tax amnesty

September 24, 2020 | 12:32 am [ bworldonline.com ]

PHILIPPINE STAR

THE Finance department wants to first see the results of the ongoing estate tax amnesty, which will end on May 31 next year, before Congress passes a measure extending it by another two years.

“In general, what we would have preferred for the amnesty law… is to play it out first. Rather than having the deadline… still next year and then you already extend it,” Finance Undersecretary Antonette C. Tionko told senators on Wednesday.

“I think the timing is more the issue. It’s just prolonging it, but we would have collected it already.”

Ms. Tionko was speaking before the Senate Finance Committee, led by Senator Juan Edgardo M. Angara, which was tackling the Department of Finance’s (DoF) proposed P16.01 billion for 2021.

Mr. Angara asked the DoF if it supported the measure extending the estate tax amnesty up to 2023 from its current 2021 deadline, which was already passed on third reading by the House of Representatives. No counterpart measure has so far been filed in the Senate.

Finance Undersecretary and Chief Economist Gil S. Beltran said in a phone message the department will “check first what is the outcome so far before any decision to extend.”

NEW SOURCES OF REVENUES

In the same hearing, Finance Secretary Carlos G. Dominguez III said the department will begin drafting proposals for additional revenue sources around 2021-2022.

“I think some time late 2021, early 2022, we will start looking at additional revenues to pay for the heavy indebtedness that we are incurring this year,” Mr. Dominguez said during the hearing.

Mr. Dominguez said, as of Sept. 20, the government has secured $9.9-billion financing through loans and grants from development partners and markets to fund its coronavirus response.

“In the next few months, we will be concentrating on improving tax administration and passing the remaining tax packages,” he told reporters over a phone message.

This includes the proposed Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill, which will immediately cut the corporate income tax to 25% from the current 30%. This will further be reduced by one percentage point annually beginning 2023 until 2027.

The measure, which forms part of the government’s economic stimulus package, will generate P40-billion foregone revenues in 2020 and P650 billion in the next five years.

“The proposal to reduce the tax is really a part of our stimulus program to stimulate the economy. And really, this is trusting the private sector to make the right decisions with that money, to retain employees, re-invest in their companies,” Mr. Dominguez said in the hearing.

“We believe the economy will be stimulated and the additional investments will generate more taxes in the long run, and make us more attractive to foreign investments.” — Charmaine A.

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BIR sets unlisted shares’ fair market value

August 19, 2020 | 12:06 am

The Bureau of Internal Revenue head office in Quezon City — BW FILE PHOTO

By Beatrice M. Laforga, Reporter

THE Bureau of Internal Revenue (BIR) has revised the rules on the imposition of tax on the sale, barter or other disposition of shares of stocks that are not listed in the local bourse to clarify how the fair market value (FMV) of shares will be determined.

BIR Commissioner Caesar R. Dulay issued on Monday Revenue Regulations (RR) No. 20-2020 amending RR No. 6-2013’s provisions on taxes imposed on the disposition of shares of stocks that are not publicly listed.

The new rules state that for the common shares of stock, the book value will now be based on the latest financial statements as the prima facie fair market value of the shares.

“This is a welcome development (long overdue). Prior to the RR, in determining the FMV of the shares, there is a requirement to use the adjusted net asset (ANA) method where all assets and liabilities are adjusted to FMVs,” said Maria Lourdes P. Lim, the tax managing partner of Isla Lipana & Co., PwC Philippines, in a mobile phone message on Tuesday.

The new rules also determined the preferred shares of stock to have the liquidation value, which is equal to the redemption price of the shares as of the nearest transaction date, as the fair market value.

“In case there are both common and preferred shares, the book value per common share is computed by deducting the liquidation value of the preferred shares from the total equity of the corporation and dividing the result by the number of outstanding common shares,” the document read.

The BIR also said that the book value of the common shares or the liquidation of the preferred shares do not need to include the appraisal surplus from any property of the corporation that was not reflected in the financial statement.

“The latest audited financial statements shall be sufficient in determining the fair market value of the shares of stock,” it said.

The move is “more reasonable since it does not result in an overstatement of the FMV,” said Romeo H. Duran, president of Tax Management Association of the Philippines, Inc., in a text message.

Ms. Lim said before the RR 20-2020 was issued, the fair market value of the shares was usually higher, particularly for companies owning real properties as the “ANA method results in the upward adjustment of the value since the incremental increase in property is taken into consideration in determining the value of the shares.”

“For capital gains tax purposes, if the consideration for the sale of shares is lower than FMV, the difference is generally subject to donor’s tax unless it can be established that the transfer is made in the ordinary course of business, bona fide and [at] arm’s length,” she added.

The issuance will take effect 15 days after its publication in a newspaper.

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House panel extends estate tax amnesty by two years

August 18, 2020 | 12:34 am [ bworldonline.com ]

By Charmaine A. Tadalan, Reporter

THE House Ways and Means Committee approved on Monday a measure extending the estate tax amnesty program by another two years, in light of the ongoing coronavirus pandemic.

House Bill (HB) No. 7068 extends the effectivity of the estate tax amnesty to four years from the original two years under Republic Act (RA) No. 11213 or the Tax Amnesty Act of 2019.

RA 11213, which took effect on May 31, 2019, gave a one-time opportunity for taxpayers to settle unpaid estate taxes as of Dec. 31, 2017. It gave interested parties until May 31, 2021 to avail of the estate tax amnesty.

If passed into law, taxpayers can avail of the estate tax amnesty through 2023.

“The amendment to RA 11213 will enable those who want to take advantage of this program ample time to recoup their resources and get back on their feet so they can still apply and pay their estate tax dues. This will also provide economic relief for many Filipinos at this time of crisis,” HB 7068 stated.

The Bureau of Internal Revenue (BIR) Assistant Commissioner Elenita B. Quimosing said the agency has collected some P1.3 billion from estate tax amnesty as of June, still far from the Finance department’s P6-billion target.

She said P3.403 billion was collected from the tax amnesty on delinquencies, falling short of the P21-billion target. The agency has collected a total of P4.765 billion so far from the two tax amnesty programs.

Baguio Rep. Mark O. Go moved for the approval of the extension of the estate tax amnesty to allow the BIR to meet its target.

“The conditions we have right now are reasons probably that we need to extend the availment of the estate tax,” Mr. Go said.

There is no counterpart measure filed in the Senate, but Senate President Vicente C. Sotto III said he is in favor of the extension of the estate tax amnesty.

Asked if he supports the measure, Mr. Sotto said in a phone message “yes, of course.”

In the same hearing, the House panel also tackled proposals to grant a general tax amnesty, which had been part of the original tax amnesty package until it was vetoed for lack of safeguards against tax evasion.

President Rodrigo R. Duterte vetoed the general tax amnesty for the absence of provisions lifting the bank secrecy for fraud cases and the automatic exchange of information, among others.

The substitute bill granted a general tax amnesty for one year on all unpaid taxes based on the 2018 statement of total assets, which may be availed either with a 3% or 20% rate.

“Kung 3% ka (If you avail the 3%), you will be subject to the examination of the BIR for a period of one year from the payment of the tax amnesty, pero kung (but if you go for the) 20% rate ang gagamitin mo, you will not be subject to the said examination,” House Ways and Means vice- chairperson and AAMBIS-OWA Rep.  Sharon S. Garin said.

Finance Assistant Secretary Dakila Elteen M. Napao said the general tax amnesty will allow individuals and companies with unpaid taxes but no pending cases, to have a “clean slate.”

“The amnesty will serve as a sort of a cleaning tool for the BIR on taxpayers,” he said.

Mr. Go, however, questioned the basis for the 20% rate, saying this may burden companies. He recommended to use the income as a basis, instead of the total assets.

“What is the basis of 20%? What we’re saying is the total asset of the company, medyo mabigat ’yun for them. Kung ang issue is the 2018 income nila, ’yun dapat ang basis, ’yung 2018 (that might be too heavy for them. If the issue is the 2018 income, that should be the basis),” he said.

Nueva Ecija Rep. Estrellita B. Suansing, presiding chairperson, asked the Finance department to come up with its calculation for other possible rates for deliberation in the next hearing.

The measure granting a general tax amnesty forms part of the administration’s comprehensive tax reform program. It was noted that collections from the measure will be used as additional funding for the coronavirus pandemic.

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BIR streamlines registration of new businesses

June 11, 2020 | 12:31 am [ bworldonline.com ]

BIR building

The Bureau of Internal Revenue head office in Quezon City -- BW FILE PHOTO

THE Bureau of Internal Revenue (BIR) is streamlining the process for registering a new business, by removing the mayor’s permit as one of the requirements.

BIR Commissioner Caesar R. Dulay issued Revenue Memorandum Circular No. 57-2020 dated March 12 but released on June 9, which provides an updated checklist of documentary requirements for business registration and other applications.

“The requirements for registering a new business with the bureau have been streamlined by removing the Mayor’s Permit as one of the mandatory requirements when the BIR Citizen’s Charter 2019 was published on BIR website,” the circular read.

The BIR reiterated it will only process applications with complete documentary requirements.

“The Bureau shall not process deficient or incomplete application or requirements and shall only process an application if it is complete, pursuant to Rule VII, Section 2(b) of the implementing rules and regulations of Republic Act No. 11032, otherwise known as “Ease of Doing Business and Efficient Government Delivery Act of 2018,” it said.

The BIR also updated the checklist of documents needed for other types of applications such as those wanting to register their branches or facilities, their employees, ONETT or one-time transactions, books of accounts, and information updates.

The new guidelines also cover applications for authority to print, permit to use manual loose leaf, issuance of taxpayer identification number (TIN) card, transfer of registration and cancellation of TIN or registration of closure of business.

The government has been introducing reforms to improve the ease-of-doing business in the country.

In the World Bank’s Doing Business report released in October 2019, the Philippines rose to 95th place from 124th in 2018.

Despite the rank improvement, Manila was seventh among 10 Southeast Asian economies, behind Singapore which ranked second overall, Malaysia at No. 12, Thailand at 21st, Brunei at 66th, Vietnam at 70th and Indonesia at 73rd. — BML

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RMC No. 57-2020

Prescribes the updated policy on the streamlining of business registration requirements and revised checklist of documentary requirements Digest | Full Text | Annexes A1-A11

June 9, 2020

BIR RMC 56-2020 : Filing of Income Taxes on or before June 14, 2020

ITR payment deadline extended anew

May 4, 2020 | 12:31 am [ bworldonline.com ]

THE deadline for the filing and payment of annual income tax returns (ITR) has been moved for a third time, following the extension of the enhanced community quarantine in high risk areas in the country.

The Bureau of Internal Revenue (BIR) issued Revenue Regulations No. 11-2020 dated April 29, extending the deadline for the filing and payment of ITRs to June 14, from the original schedule of April 15.

Since June 14 falls on a Sunday, BIR Deputy Commissioner for Operations Arnel S.D. Guballa said in a mobile phone message that the new ITR filing and payment deadline will be on June 15 (Monday).

“The extension of due dates shall be made applicable throughout the Philippines. If the new extended due dates fall on a holiday or non-working day, then, the submission and/or filing contemplated herein shall be made on the next working day,” the regulation read.
From its original deadline of April 15, it had been previously extended to May 15 and later to May 29.

The BIR said taxpayers who are able to file “can amend their tax returns at any time” before the new due date. Amendments that will result in additional tax payment will not incur penalties, including surcharge, interest and compromise penalties if it will be paid within the extended deadline.

“A taxpayer whose amended returns will result in overpayment of taxes paid, can opt to carry over the overpaid tax as credit against the tax due for the same tax type in the succeeding periods’ tax returns, aside from filing for claim for refund,” it added.

The Cut-off period for availing of the tax amnesty return on delinquencies was also extended until June 22 from the original schedule of April 23.

BIR has also extended the deadline for filing and payment of other returns including the monthly value-added tax (VAT) declaration for the months of February, March and April to May 19, June 4 and June 19, respectively. It also moved the deadline for the withholding tax return on compensation for March and April to June 9.

Declaration of documentary stamp tax for the months of March and April can be done until June 4.

It also set new deadlines for other returns including filing of donor’s tax, estate tax and excise taxes, among others.

In case of another lockdown extension, the BIR said the new deadlines are “allowed further extension of 15 calendar days.”

The enhanced community quarantine (ECQ) was extended until May 15 in Metro Manila and other high-risk areas while other areas transitioned to a more relaxed general community quarantine (GCQ) on May 1.

Tax collections of BIR slumped in April following deferment of tax payment deadlines for income tax returns and other returns.

Data showed it only collected P25.01 billion in April 1-17, or 8.66% of its P288.75-billion target for the entire month. This was also 89.5% lower than the P237.93 billion collected in April 2019. — Beatrice M. Laforga

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BIR extends ITR filing deadline to May 30

April 16, 2020 | 12:30 am [ bworldonline.com ]

THE Bureau of Internal Revenue (BIR) has moved to May 30 the deadline for the filing of 2019 income tax returns (ITR), after the government extended the enhanced community quarantine (ECQ) in Luzon until end-April.

Signed on April 14, the BIR issued Revenue Regulations (RR) No. 10-2020 which extended anew the deadline for the filing and payment of ITRs, which was originally scheduled on April 15 and then extended to May 15 due to the ECQ.

“In consideration of the extension of the ECQ period until April 30, 2020, these regulations are hereby promulgated to amend certain provisions of RR No. 7-2020, particularly on the extension of deadlines to submit, file, and/or pay the necessary documents and/or taxes required under the Tax Code, as amended as well as in the existing revenue regulations,” the regulation read.

BIR said taxpayers who are able to file “can amend their tax returns at any time” before the new due date. Amendments that will result in additional tax payment will not incur penalties, including surcharge, interest and compromise penalties if it will be paid within the extended deadline, it added.

For the fiscal year ending Jan. 31, filing and payment of annual ITR can be done until June 15, extended from the original schedule of May 15.

Likewise, application for value-added tax (VAT) refund claims covering the quarter ending March 31, 2018 and April 30, 2018 can be done until May 15 and May 30, respectively, or 30 days after the lockdown is scheduled to be lifted.

Payments for donor’s and estate tax returns can be done 30 days from the date when the ECQ is lifted, BIR said.

The regulation also set new deadlines for other returns and documents, including the monthly and quarterly VAT declarations; monthly remittance of percentage tax on winnings and prizes withheld by racetrack operators.

For instance, filing of monthly VAT declarations for February and March could be filed from May 6-10 and May 21-25, respectively, while filing of quarterly VAT returns for quarter e nding Feb. 29 March 31 was extended until May 10 and May 25, respectively.

Deadline for submission of tax amnesty on delinquencies returns was also extended further to June 8 from the previous extended schedule of May 23 from April 23, originally.

Submission deadlines for various documents such as a summary list of sales and sworn statements were also moved to May 10 for the fiscal quarter ending Feb. 29, and May 25 for the quarter ending March 31.

The BIR also extended anew the deadline of submission for other returns, including the following:

• certification of compensation payment (new deadline: May 15);

• documentary stamp tax declaration (May 20);

• financial statements for the year 2019 (May 15);

• inventory lists (May 15 for quarter ending Feb. 29 and May 30 for quarter ending March 31);

• monthly e-Sales reports (May 23-25);

• withholding tax remittance return for national government agencies (May 25)

• excise tax return for mineral products (May 25);

• application for tax credits or refunds covering the period of March 17, 2018 to April 30, 2018 (May 31).

“If the ECQ period will be extended further, the filing of the returns and payment of the corresponding taxes due thereon, and submission of reports and attachments falling within the enhanced extended period shall be extended for 30 calendar days from the lifting of the ECQ,” it added. — Beatrice M. Laforga

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BIR suspends audits during emergency period

March 31, 2020 | 9:18 pm [ bworldonline.com ]

 BW FILE PHOTO

THE Bureau of Internal Revenue (BIR) has suspended audits due to the lockdown and plans to resume 60 days after the six-month state of emergency is lifted.

BIR Commissioner Caesar R. Dulay issued Revenue Memorandum Circular No. 34-2020 dated March 27, which also suspended the run time for the statute of limitations on assessing and collecting of taxes.

“The suspension of the running of the Statute of Limitations shall likewise apply with respect to the issuance and service of assessment notices, warrants and enforcement and/or collection of deficiency taxes,” according to the circular, published Tuesday.

“Under the law, the BIR has certain period only to issue a tax assessment, which is three years from date of filing of the return, and only has five years to initiate collection proceedings like filing a case in court,” Tax Management Association of the Philippines, Inc. (TMAP) President Romeo H. Duran said.

President Rodrigo R. Duterte earlier placed the entire country under a state of calamity and national emergency due to the coronavirus disease 2019 (COVID-19) outbreak.

Mr. Duran said the circular gives the BIR more time to audit taxpayers during the public health emergency.

Luzon has been placed under enhanced community quarantine until April 12 to contain the spread of the virus. — Beatrice M. Laforga

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Bank Bulletin No. 2020-03 advises all Authorized Agent Banks on certain policies in the acceptance of annual Income Tax Returns for CY 2019 / other tax returns whose due dates fall within the Community Quarantine Period

Bank Bulletin No. 2020-03 advises all Authorized Agent Banks on certain policies in the acceptance of annual Income Tax Returns for CY 2019 and other tax returns whose due dates fall within the Community Quarantine Period. 

Bank Bulletin

Tax filing deadline extended to May 15

March 20, 2020 | 12:32 am [ bworldonline.com]

THE DEADLINE for filing annual income tax returns has been moved to May 15 due to the Luzon-wide lockdown. — PHILIPPINE STAR/ KRIZ-JOHN ROSALES

THE Bureau of Internal Revenue (BIR) extended the deadline for the filing of income tax returns (ITR) by one month to May 15, but the Finance department said this may result in an “estimated delay and shortfall in tax collections of around P145 billion.”

BIR Commissioner Caesar R. Dulay issued Revenue Memorandum Circular (RMC) No. 28-2020 dated March 18 which moved the deadline of the filing of 2019 annual ITRs to May 15 from April 15, amid the Luzon-wide lockdown over the spread of the coronavirus disease 2019 (COVID-19).

“This emergency measure is being offered to provide relief to Filipino taxpayers who will not be able to prepare, let alone file, the necessary ITR documents on or before the original annual deadline of April 15 because of skeletal workforce arrangements and enhanced community quarantine rules that the national government has implemented to contain the pandemic,” the DoF said in a statement.

The government targets to collect P3.49 trillion this year to fund its P4.1-trillion spending plan, with the remaining funds to be sourced from its borrowing activities. The BIR is tasked to collect P2.576 trillion.

Asked if the delay in collecting P145 billion in taxes would affect the government’s spending plan, Finance Secretary Carlos G. Dominguez III said in a Viber message that there will be “no impact” to government expenditures.

The DoF urged those who are able to file their ITRs on or before the original April 15 deadline to still do so, to allow the government to raise funds for efforts to contain the COVID-19 outbreak and to help affected sectors.

Taxpayers who are enrolled in the electronic filing and payment system may settle their tax liabilities with authorized agent banks. Other payment options include over-the-counter payments through authorized agent banks and electronic/online payment platforms.

Digital payments firm Paymaya Philippines has waived its P20-convenience fee for BIR payments through the platform until May 31.

Also, the BIR, through RMC 27-2020, extended the deadline for filing applications for value-added tax (VAT) refunds for those falling due on March 31 to April 30.

The bureau also suspended the 90-day period processing of VAT refund claims for ongoing claims, and those received between March 16 to April 14. The counting of the number of processing days will resume after the lifting of the Luzon-wide lockdown.

BIR Deputy Commissioner for Operations Arnel S.D. Guballa said in a mobile phone message that the bureau is “rushing” to work on extending other tax deadlines.

Tax Management Association of the Philippines, Inc. (TMAP) has welcomed the 30-day extension of ITR filing and payment as this will give accountants ample time to prepare amid the Luzon lockdown.

TMAP President Romeo H. Duran said they will still appeal to the BIR for a 30-day extension to deadlines of other returns which will fall under the quarantine period.

“We are very much in favor of the extension… [as well as on the] VAT refund, processing of claims. It’s so difficult to meet the March 31 deadline… We’re also looking at asking the BIR for other tax types also whose due dates will fall during the quarantine period,” he said in a phone interview.

He said they will also request the BIR to revisit the deadlines on other filing requirements such as administrative protests and replies since preparing these requires sifting through documents and onsite operations.

RMC 26-2020 dated March 17 reminded taxpayers that other returns with deadlines falling during the 30-day quarantine period can file “tentative returns” and “tax payers are given 30 days… to file the final tax returns and pay taxes due thereon.”

The entire Luzon island has been placed under enhanced community quarantine until April 12 in the government’s attempt to slow the spread of the virus that infected 217 and killed 17 people in the country, as of Thursday. — Beatrice M. Laforga

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BIR sets June 15 payment deadline for amended ITRs

March 17, 2020 | 9:18 pm [ bworldonline.com ]

THE Bureau of Internal Revenue (BIR) said it will waive penalties for income tax return (ITR) amendments provided that settlement payments are made on or before June 15, with the bureau still enforcing the April 15 filing deadline while Luzon is on lockdown.

BIR Commissioner Caesar R. Dulay issued Revenue Memorandum Circular on March 16 reiterating that the tax filing deadline remains April 15. However, it allows taxpayers to file ITRs tentatively if they believe the return to be prone to error due to “limitations in the preparation” during the one-month lockdown.

The order allows amendments to be filed “at any time” with no penalty if any additional income tax is settled on or before June 15.

“Considering the limitations in the preparation of the AITR (annual income tax return) to be filed by concerned taxpayers due to the aforesaid lockdown, errors in the determination of their income taxes are possible. Hence, taxpayers, at any time, can amend their AITR filed, provided the concerned taxable period has not been the subject of an audit,” according to the circular, a copy of which was sent to journalists Tuesday.

“An amendment that will result in additional income tax to be paid, can still be paid without the imposition of corresponding penalties if the same shall be done not later than June 15, 2020,” it added.

The BIR also urged taxpayers to use its electronic facilities to file their tax returns to limit their exposure to COVID-9, which has infected 142 people and killed 12 in the Philippines so far.

Taxpayers can still file through over-the-counter through an authorized bank or via BIR revenue collection offices.

The bureau’s electronic channels include those offered by Land Bank of the Philippines and the Development Bank of the Philippines, Union Bank of the Philippines and e-wallet services like GCash and Paymaya.

“The filing of tax returns manually can still be done by those who are not mandated to file and pay electronically, if the AITR to be filed has tax due and payable. If there is no tax to be paid, the same are required to be filed through eBIRForm facilities,” according to the circular.

President Rodrigo R. Duterte on Monday placed Luzon under “enhanced community quarantine” until April 13 to slow the spread of the disease, ordering home quarantine for most residents and limiting non-essential movement.

The order suspends classes, public transportation and work in government offices except for those under minimal staffing arrangements. It also asked the private sector to halt operations or adopt work-from-home schemes, but exempted those providing basic services necessities from home quarantine, including workers at groceries, pharmacies, clinics, hospitals, restaurants with delivery service, banks, and utilities. — Beatrice M. Laforga

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Revised schedule of zonal values of real properties. : RDO 68 & 64/ RDO 67/ RDO 66/ RDO 38/ RDO 25A/ RDO 70/ RDO 69

Revised schedule of zonal values of real properties.  

RDO 68 & 64/
RDO No. 64 - Daet, Camarines Norte / RDO No. 68 - Sorsogon, Sorsogon

RDO 67/
RDO No. 67 - Legazpi City

RDO 66/
RDO No. 66 - Iriga City

RDO 38/
RDO No. 38 - North Quezon City

RDO 25A/
RDO No. 25A - Plaridel, Bulacan

RDO 70/
RDO No. 70 - Masbate City, Masbate

RDO 69
RDO No. 69 - Virac, Catanduanes

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RMC 7-2020 : Suspends the deadlines in the acceptance of tax returns and payment of Internal Revenue Taxes of Taxpayers in the province of Batangas

Suspends the deadlines in the acceptance of tax returns and payment of Internal Revenue Taxes of Taxpayers in the province of Batangas

Digest | Full Text

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BIR RR 3-2020 : Amends certain provisions of RR No. 13-2011 implementing tax provisions under RA No. 9856, otherwise known as "The Real Estate Investment Trust (REIT) Act of 2009"

RR No. 3-2020

Amends certain provisions of RR No. 13-2011 implementing tax provisions under RA No. 9856, otherwise known as "The Real Estate Investment Trust (REIT) Act of 2009" (Published in Malaya Business Insight on January 30, 2020)Digest | Full Text | Annex A | Annex B | Annex C | Annex D

January 29, 2020

Tax appeals court cancels URC’s P2-B assessment

January 20, 2020 | 12:08 am [] bworldonline.com]

By Vann Marlo M. Villegas

Reporter

THE Court of Tax Appeals (CTA) cancelled the P2-billion tax assessment against Universal Robina Corp. (URC) for lack of due date and exact amount in the assessment notices.

In a 23-page decision dated Jan. 14, the court’s first division said the formal letter of demand issued by the Bureau of Internal Revenue against URC lacked definite amount and due date for the payment of its tax liabilities.

It noted that the demand letter stated that the interest “will still be adjusted if paid beyond the date specified therein” but also does not include the due date.

“Correspondingly, the subject tax assessment is void, and thus, bears no valid fruit,” the decision penned by Associate Justice Catherine T. Manahan read.

“In view of the finding that the subject tax assessments are invalid, it becomes unnecessary to address the arguments raised by the parties,” it added.

The court noted a previous decision of the Supreme Court which ruled that a Final Assessment Notice is invalid for lack of definite amount due despite providing a computation because it meant that its liabilities is still subject to modification depending on payment date.

The lack of due date also “negates…demand for payment,” the High Court’s decision read.

URC was questioning its assessed liability for improperly accumulated earnings tax (IAET) for the year ending on Sept. 30, 2010 worth P2 billion.

It was assessed for the alleged deficiency of P2.5 billion, which consists of IAET, income tax, value-added tax, expanded withholding tax, documentary stamp tax, and withholding tax on compensation.

Section 29(B)(1) of the National Internal Revenue Code of 1997 states that IAET applies to “every corporation formed or availed for the purpose of avoiding the income tax with respect to its shareholders or the shareholders of any other corporation, by permitting earnings and profits to accumulate instead of being divided or distributed.”

URC said it does not have any IAET and that its additional paid-in capital is not earnings or profits. It also said that it is a publicly-held corporation exempt from IAET. BIR contends that it is liable to pay the assessed deficiency.

Presiding Judge Roman G. del Rosario and Associate Justice Esperanza R. Fabon-Victorino concurred in the decision.

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RMC No. 3-2020 Circularizes the availability of the revised BIR Form No. 1702Q (Quarterly Income Tax Return for Corporations, Partnerships and Other Non-Individual Taxpayers)

RMC No. 3-2020 Circularizes the availability of the revised BIR Form No. 1702Q (Quarterly Income Tax Return for Corporations, Partnerships and Other Non-Individual Taxpayers) January 2018 (ENCS).

Digest | Full Text | Annex A January 3, 2020