January 2013 Tax bulletin - SGV & Co. · PDF file2 Tax Bulletin BIR Rulings • An upstream...
Transcript of January 2013 Tax bulletin - SGV & Co. · PDF file2 Tax Bulletin BIR Rulings • An upstream...
2 Tax Bulletin
BIR Rulings
• Anupstreammerger,wheretheparentcompanywillnotbeissuingsharestothesubsidiariesinexchangefortheassetstobetransferred,isnotconsideredatax-freemergerunderSection40(C)(2)oftheTaxCode.(Page 3)
• UndertheRP-NetherlandsTaxTreaty,the10%preferentialtaxrateondividendsapplieswhentherecipientofthedividendsisacompanywhosecapitaliswhollyorpartlydividedintoshares,andwhichholdsatleast10%ofthecapitalofthecompanypayingthedividends.(Page 4)
• IncomederivedbyaJapaneseenterprisefromservicesrenderedinthePhilippines,foranaggregateperiodofnotmorethan6monthswithinanytaxableyear,isnotsubjecttoPhilippineincometax.
ServicesrenderedinthePhilippinesbyanon-residentinfavorofaPhilippineEconomicZoneAuthority(PEZA)-registeredentityareexemptfromVATunderSection109(K)oftheTaxCode.(Page 4)
BIR Issuances
• RevenueRegulations(RR)No.17-2012prescribestheimplementingguidelinesontherevisedtaxratesonalcoholandtobaccoproducts,pursuanttoRepublicAct(RA)No.10351,otherwiseknownas“AnActRestructuringtheExciseTaxonAlcoholandTobaccoProductsbyAmendingSections141,142,143,144,145,8,131and288ofRepublicActNo.8424,otherwiseknownastheNationalInternalRevenueCodeof1997,asamendedbyRepublicActNo.9334,andforotherpurposes.”(Page 5)
• RRNo.1-2013expandsthecoverageoftaxpayersrequiredtofiletaxreturnsandpaytaxesthroughtheElectronicFilingandPaymentSystem(eFPS),toincludenationalgovernmentagencies(NGAs)mandatorilyrequiredtousetheElectronicTaxRemittanceAdvice(eTRA).(Page 12)
• RevenueMemorandumCircular(RMC)No.84-2012clarifiesthepropertaxtreatmentofinterestincomeearningsonloansthatarenotsecuritized,assignedorparticipatedout.(Page 15)
• RMCNo.90-2012prescribestheinitialclassificationsandtaxratesforalcoholandtobaccoproductsexistinginthemarketpursuanttoRANo.10351.(Page 15)
►• RMCNo.91-2012supplementsRMCNo.63-2012datedOctober29,2012oninvoicingandrecordingofincomepaymentsformediaadvertisingplacementsunderasplitpaymentschemeorarrangement.(Page 16)
►• RMCNo.2-2013clarifiescertainprovisionsofRRNo.12-2012onthedeductibilityofdepreciationexpenseasitrelatestothepurchaseofvehicles,andotherrelatedexpenses,andtheinputtaxesallowed.(Page 17)
• RMCNo.4-2013requirestax-exempthospitalstosecurerevalidatedtaxexemptionrulings/certificates.(Page 17)
• RMCNo.6-2013clarifiestaxpayers’concernsontheauditprogram,andtheirresponsibilityforengagingtaxagents/practitioners.(Page 18)
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BOC Issuances
• CustomsMemorandumOrder(CMO)No.16-2012prescribesa10-yearvalidityperiodfordutydrawbacktaxcreditcertificates(TCCs).(Page 19)
• CustomsAdministrativeOrder(CAO)No.1-2013prescribestherulesandregulationsimplementingtheSuperGreenLane(SGL)PlusFacility.(Page 19)
SEC Issuances
• SECMemorandumCircular(MC)No.11prescribestheguidelinesforaccreditationofinstitutionaltrainingprovidersoncorporategovernance.(Page 22)
• SECMCNo.12prescribestheguidelinesonthedisclosureoftransactionswithretirementbenefitfunds.(Page 24)
• SECMCNo.1requirestheinclusionoftheTaxpayer’sIdentificationNumber(TIN)orpassportnumberofforeigninvestorsinallforms,papersanddocumentsfiledwiththeSEC.(Page 25)
• SECMCNo.3amendstherulesonthedateofsubmissionoftheinterimsemi-annualfinancialstatementsrequiredforfinancingandlendingcompanies.(Page 25)
BSP Issuances
• CircularNo.779amendstheregulationsonSingleBorrower’sLimit.(Page 26)
• CircularNo.780prescribesguidelinesgoverningtheimplementationoftheSyrianPoundCurrencyExchangeFacility(CEF).(Page 27)
• CircularNo.781amendstheBaselIIIimplementingguidelinesonMinimumCapitalRequirements.(Page 28)
• CircularNo.782amendsAppendix45(NotesonMicrofinance)ofSectionX361oftheMORB.(Page 29)
• CircularNo.783amendstheregulationsonrelocationandvoluntaryclosure/saleofbranches/otherbankingoffices(OBOs).(Page 30)
Court Decision
• Negligence,whetherslightorgross,isnotequivalenttofraudwithintenttoevadetaxthatiscriminallypunishableundertheTaxCode.Fraudmustamounttointentionalwrongdoingwiththesoleobjectofavoidingtax.(Page 31)
BIR Rulings
BIR Ruling No. 614-12 dated November 9, 2012
Facts:
ACo.,adomesticcorporation,enteredintoamergerwithitswholly-owneddomesticsubsidiaries,BCo.andCCo.ACo.isthesurvivingcorporation.Pursuanttothemerger,BCo.andCCo.willtransfertheirallassetsandliabilitiestoACo.However,sinceBCo.andCCo.arewholly-ownedbyACo.priortothemerger,ACo.willnolongerissueanysharesofstockinconsiderationoftheassetsandliabilitiestransferred.
Anupstreammerger,wheretheparentcompanywillnotbeissuingsharestothesubsidiariesinexchangefortheassetstobetransferred,isnotconsid-eredatax-freemergerunderSection40(C)(2)oftheTaxCode.
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Issue:
IsthemergerbetweenACo.,BCo.andCCo.consideredatax-freemergerunderSection40(C)(2)oftheTaxCode?
Ruling:
No.Theintendedre-organizationisanupstreammergerbetweenaparentcompanyanditssubsidiarieswheretheparentcompanywillnotbeissuinganysharestothesubsidiariesinexchangefortheassetstobetransferredasaresultofthemerger.Ineffect,thetransfertakesthenatureofadonationmadebythesubsidiariestotheirparentcompany,contrarytowhatiscontemplatedinSection40(C)(2)oftheTaxCode.Inthesamemanner,theintendedmergeralsohastheeffectofdissolvingandliquidatingthesubsidiarieswithoutpaymentofcorrespondingtaxes.
BIR Ruling No. ITAD 381-2012 dated November 22, 2012
Facts:
ACo.,aDutchcompanywithcapitalwhollydividedintoshares,isthebeneficialownerof99.99%ofthesharesinBCo.,adomesticcorporation.BCo.declaredandremittedcashdividendsinfavorofACo.
Issue:
Arethedividendssubjecttothe10%preferentialtaxrateundertheRP-NetherlandsTaxTreaty?
Ruling:
Yes.UndertheRP-NetherlandsTaxTreaty,the10%preferentialtaxrateondividendsapplieswhentherecipientofthedividendsisacompanywhosecapitaliswhollyorpartlydividedintoshares,andwhichholdsatleast10%ofthecapitalofthecompanypayingthedividends.
BIR Ruling No. ITAD 393-12 dated December 11, 2012
Facts:
ACo.,aresidentofJapan,renderedconsultancyservicesforafeetoBCo.,aPEZA-registereddomesticcorporation.ACo.sentitspersonneltothePhilippinestoprovidetheservicesforanaggregateperiodof17daysfortheentiredurationoftheagreement.
Issues:
1. IstheincomederivedbyACo.subjecttoPhilippineincometax?
2. AretheservicesrenderedbyACo.inthePhilippinessubjecttovalue-addedtax(VAT)?
Ruling:
1. No.UndertheRP-JapanTaxTreaty,aJapaneseenterpriseshallbesubjecttotaxinthePhilippinesonbusinessprofitstotheextentattributabletoapermanent
UndertheRP-NetherlandsTaxTreaty,the10%preferentialtaxrateondividendsapplieswhentherecipientofthedividendsisacompanywhosecapitaliswhollyorpartlydividedintoshares,andwhichholdsatleast10%ofthecapitalofthecompanypayingthedividends.
IncomederivedbyaJapaneseenter-prisefromservicesrenderedinthePhilippines,foranaggregateperiodofnotmorethan6monthswithinanytaxableyear,isnotsubjecttoPhilippineincometax.
ServicesrenderedinthePhilippinesbyanon-residentinfavorofaPEZA-registeredentityareexemptfromVATunderSection109(K)oftheTaxCode.
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establishment(PE)situatedinthePhilippines.UndertheRP-JapanTaxTreaty,aJapaneseenterprisemaybedeemedtohaveaPEinthePhilippinesifitfurnishesinthePhilippinesconsultancyservicesorsupervisoryservicesinconnectionwithacontractforabuildingconstructionorinstallationproject,throughemployeesorotherpersonnel–otherthananagentofindependentstatus–providedthatsuchactivitiescontinue(forthesameprojector2ormoreconnectedprojects)foraperiodorperiodsaggregatingmorethan6monthswithinanytaxableyear.
SincetheservicesperformedbyACo.inthePhilippinestotaledanaggregateperiodofonly17days,ACo.isnotdeemedtohaveaPEinthePhilippines.Hence,theincomederivedbyACo.fromtheconsultancyservicesshallnotbesubjecttoPhilippineincometax.
2. No.Asageneralrule,thesaleofgoodsandservicestoentitiesexemptfromVAT,suchasPEZA-registeredentities,iszero-rated.However,insteadofzero-ratingwhichisnotavailabletonon-residentsuppliers,thetransactionwillbetreatedasVATexemptpursuanttoSection109(K)oftheTaxCode,whichprovidesVATexemptionfortransactionsthatareexemptunderspeciallaws.
BIR Issuances
Revenue Regulations No. 17-2012 dated December 21, 2012
Definition of Terms
• ActreferstoRANo.10351,otherwiseknownasAnActRestructuringtheExciseTaxonAlcoholandTobaccoProducts.
• Carbonated Winereferstoaneffervescentwineartificiallychargedwithcarbondioxideandcontainingmorethan0.392ofcarbondioxideper100millilitersofwine.
• Cigarettes Packed by Handreferstothemannerofpackagingcigarettesticksusinganindividualperson’shandsandnotthroughanyothermeans,suchasamechanicaldevice,machineorequipment.
• Compounded Liquorsreferstointoxicatingbeveragesconcoctedbyorresultingfrommixtureof,oradditionto,distilledspirits,eitherbeforeorafterrectification,ofanycoloringmatter,flavoringextractoressenceorotherkindofwine,liquororotheringredient.
• Net Retail Price referstothepriceatwhichthealcoholandtobaccoproductsaresoldinretailinatleastfivemajorsupermarketsinMetroManila,excludingtheamountintendedtocovertheapplicableexcisetaxandVAT.ForalcoholandtobaccoproductswhicharemarketedoutsideMetroManila,thenetretailpriceshallmeanthepriceatwhichthealcoholandtobaccoproductsaresoldinatleastfivemajorsupermarketsintheregion,excludingtheamountintendedtocovertheapplicableexcisetaxandVAT.
• Sparkling Wine or Champagnereferstoaneffervescentwinecontainingmorethan0.392gramsofcarbondioxideper100millilitersofwineresultingsolelyfromthesecondaryfermentationofthewinewithinaclosedcontainer.
• Still winereferstowinecontainingnotmorethan0.392ofcarbondioxideper100millilitersofwine.
RRNo.17-2012prescribestheimple-mentingguidelinesontherevisedtaxratesonalcoholandtobaccoproducts,pursuanttoRANo.10351,otherwiseknownas“AnActRestructuringtheExciseTaxonAlcoholandTobaccoProductsbyAmendingSections141,142,143,144,145,8,131and288ofRepublicActNo.8424,otherwiseknownastheNationalInternalRevenueCodeof1997,asamendedbyRepublicActNo.9334,andforotherpurposes.”
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• Suggested Net Retail PricereferstothenetretailpriceatwhichlocallymanufacturedorimportedalcoholortobaccoproductisintendedtobesoldbythemanufacturerorimporteratretailinmajorsupermarketsorretailoutletsintheprescribedminimumnumberofRevenueRegionsforbrandswithnationalorregionalmarkets.
Revised Tax Rates and Base
Thefollowingscheduleshowstherevisedratesandbasesofthespecifictaxtobelevied,assessedandcollectedonalcoholortobaccoproducts:
PRODUCTDATE OF EFFECTIVITY OF TAX RATES
1Jan 2018Onwards2013 2014 2015 2016 2017
A.ALCOHOLPRODUCTS(1)DistilledSpirits
(a)Ad ValoremTaxRates
Basedonthenetretailpriceperproof(excludingexcisetaxandVAT)
15% 15% 20% 20% 20% 20%
(b)SpecificTax
Perproofliter P20.00 P20.00 P20.00 P20.80 P21.63
Effective1January2016,thespecifictaxrateshallbeincreasedby4%everyyearthereafter.
(2)Wines
(a)Sparklingwines/champagneswherethenetretailprice(excludingexcisetaxandVAT)perbottleof750ml.,regardlessofproofis:(1)P500.00orless
(2)MorethanP500.00
(b)Stillwinesandcarbonatedwinescontaining14%ofalcoholbyvolumeorless
Perliter
P250.00
P700.00
P30.00
Perliter
P260.00
P728.00
P31.20
Perliter
P270.40
P757.12
P32.45
Perliter
P281.22
P787.40
P33.75
Perliter
P292.47
P818.90
P35.10
Effective1January2014,thespecifictaxrateshallbeincreasedby4%everyyearthereafter
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(c)Stillwinesandcarbonatedwinescontainingmorethan14%ofalcoholbyvolumebutnotmore25%ofalcoholbyvolume
P60.00 P62.40 P64.90 P67.50 P70.20
(d)Fortifiedwinescontainingmorethan25%ofalcoholbyvolumeshallbetaxedasdistilledspirits.
Taxedasdistilledspirits
Taxedasdistilledspirits
Taxedasdistilledspirits
Taxedasdistilledspirits
Taxedasdistilledspirits
(3)Fermentedliquors,wherethenetretailprice(excludingexcisetaxandVAT)perliterofvolumecapacityis:
(a)P50.60orless
(b)MorethanP50.60
Fermentedliquorsbrewedandsoldatmicrobreweriesorsmallestablishmentssuchaspubsandrestaurants,regardlessofthenetretailprice.
Perliter
P15.00
P20.00
P28.00
Perliter
P17.00
P21.00
P29.12
Perliter
P19.00
P22.00
P30.28
Perliter
P21.00
P23.00
P31.50
Perliter
P23.50
P23.50
P32.76
Effective1January2018,thespecifictaxrateshallbeincreasedby4%everyyearthereafter
Effective1January2014,thespecifictaxrateshallbeincreasedby4%everyyearthereafter
B.TOBACCOPRODUCTS(1)TobaccoProducts
(a)Tobaccotwistedbyhandorreducedintoaconditiontobeconsumedinanymannerotherthantheordinarymodeofdryingandcuring
(b)Tobaccopreparedorpartiallypreparedwithorwithouttheuseofanymachineorinstrumentorwithoutbeingpressedorsweetened
Perkg.
P1.75
P1.75
Perkg.
P1.82
P1.82
Perkg.
P1.89
P1.89
Perkg.
P1.97
P1.97
Perkg.
P2.05
P2.05
Effective1January2014,thespecifictaxrateshallbeincreasedby4%everyyearthereafter
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(c)Fine-cutshortsandrefuse,scraps,clippings,cuttings,stems,midribs,andsweepingsoftobacco
P1.75 P1.82 P1.89 P1.97 P2.05
(2)Chewingtobacco,unsuitableinanyothermanner
P1.50 P1.56 P1.62 P1.68 P1.75
(3)Cigars
(a)Basedonthenetretailpricepercigar(excludingexciseandVAT)
(b)Percigar
PerPiece
20%
P5.00
PerPiece
20%
P5.20
PerPiece
20%
P5.41
PerPiece
20%
P5.62
PerPiece
20%
P5.85
Effective1January2014,thespecifictaxrateshallbeincreasedby4%everyyearthereafter
(4)Cigarettespackedbyhand
PerPackP12.00
PerPackP15.00
PerPackP18.00
PerPackP21.00
PerPackP30.00
Effective1January2018,thespecifictaxrateshallbeincreasedby4%everyyearthereafter
(5)Cigarettespackedbymachine,wherethenetretailprice(excludingexcisetaxandVAT)perpackis:
(a)P11.50andbelow
(b)MorethanP11.50
P12.00
P25.00
P17.00
P27.00
P21.00
P28.00
P25.00
P29.00
P30.00
P30.00
Tax Classification of Alcohol and Tobacco products
►• AnyalcoholortobaccoproductthatisintroducedinthedomesticmarketonoraftertheeffectivityoftheActshallbeinitiallytax-classifiedaccordingtotheirsuggestednetretailpricesasdeclaredintheprescribedmanufacturer’sorimporter’sswornstatement,subjecttotheinitialvalidationandrevalidationrequirementsprescribedunderRRNo.3-2006,asamendedbySection6oftheseRegulations.
• Incaseofanalcoholand/ortobaccoproductthatwasdulyregisteredwiththeBIRbeforetheeffectivityoftheActbutwasnottax-classifiedbytheBIRaccordingtothenewtaxratesprovidedundertheAct,suchproductshallbe
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treatedasnewlyintroducedproductuponitsre-introductioninthedomesticmarketaftertheeffectivityoftheAct.Accordingly,thetaxclassificationofsuchproductshallbebasedonthesuggestednetretailpricedeclaredintheswornstatement,subjecttotheinitialvalidationandrevalidationrequirements.
• Thepropertaxclassificationofallfermentedliquorsandtobaccoproducts,whetherregisteredbeforeoraftertheeffectivityoftheAct,shallbedeterminedevery2yearsfromthedateofeffectivityoftheAct.
• Forpurposesoftaxclassification,alcoholortobaccoproducts,whetherimportedordomesticallymanufactured,shallbetaxedaccordingtotheirindividualbrandname(whetherornotwithprefixorsuffix),colorand/ordesignoflabel(suchaslogo,font,picturegramandthelike),mannerand/orformofpackagingorsizeofcontaineroftheproduct.Accordingly,situationslike(butnotlimitedto)thefollowinginstancesshallbetaxeddifferently:
1. Twoproductsbearingexactlythesamerootnamebutwithdifferentsuffixesorprefixes;
2. Twoproductsbearingexactlythesamebrandnamebutwithdifferentcolorsand/ordesignoflabels;
3. Twoproductsbearingexactlythesamebrandnameandlabelbutwithdifferentformsofpackaging(e.g.,softpacksandhardpacksforcigarettes,orinbottles,cansorkegsforalcoholproducts);
4. Twoproductsbearingexactlythesamebrandnameandlabelbutwithdifferentsizesofcontainer(e.g.,oneliter,500ml.,330ml.andsoonforalcoholproducts);
5. Oneproductissoldonaregularbasis,whiletheotherproductisintroducedonalimitedbasissuchasaspecialedition,forspecificoccasionandothersimilarinstances.
• AnydownwardreclassificationofanyfermentedliquorproductthatisdulyregisteredwiththeBIRatthetimeofeffectivityoftheAct,whichwillreducethetaximposedintheseRegulations,orthepaymentofsuchtax,shallbeprohibited.Starting1January2014,theapplicabletaxrateshallbeincreasedby4%annually,butitshallnotbelowerthantheratesprescribedundertheseRegulations.
• Therevalidationofthesuggestednetretailpriceofanewlyintroducedalcoholortobaccoproductshallbeconductedaftertheendof9monthsfromtheinitialvalidation.TheinitialvalidationandrevalidationofthesuggestednetretailpriceofallnewlyintroducedalcoholandtobaccoproductsshallbeconductedexclusivelybytheauthorizedrepresentativesoftheBIR.
• Everylocalmanufacturerorimporterofalcoholandtobaccoproductsshallsubmitadulynotarizedmanufacturer’sorimporter’sswornstatementforalcoholortobaccoproductsshowing,amongothers,thefollowinginformation:
1. Name,address,TINandassessmentnumberofthemanufacturerorimporter;
2. Completerootnameofthebrandaswellasthecompletebrandnamewithmodifiers,ifany;
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3. Completespecificationsofthebranddetailingthespecificmeasurements,weights,mannerofpackagingandsoon;
4. Name(s)oftheregion(s)wherethebrand/sis/aretobemarketed;
5. Wholesalepricepercase,grossandnetofVATandexcisetax;
6. Suggestedretailprice,grossandnetofVATandexcisetax,perpackorperbottle,asthecasemaybe;
7. Detailedproduction/importationcostsandallotherexpensesincurredortobeincurreduntiltheproductisfinallysold(e.g.,materials,labor,overhead,sellingandadministrativeexpenses)percase;
8. Applicablerateofexcisetaxperunitofmeasureorvalue,asthecasemaybe;
9. CorrespondingexciseandVATpercase.
• Themanufacturer’sorimporter’sswornstatementshallbesubmittedasasupportingdocumenttotheprescribedapplicationfortheinitialregistrationofanalcoholortobaccoproduct.Thereafter,anupdatedswornstatementissubmittedonorbeforetheendofJuneandDecemberoftheyear.
• Wheneverthereisachangeinthecosttomanufacture,produceandsellthebrand,orchangeintheactualsellingpriceofthebrand,theupdatedswornstatementshallbesubmittedatleast5daysbeforetheactualremovaloftheproductfromtheplaceofproductionorreleasefromthecustomscustody,asthecasemaybe.
• Ifthemanufacturerorimportersellsorallowssuchgoodstobesoldat
wholesaleinanotherestablishmentofwhichheistheowner,orwheneverhehasaninterestintheprofitsofsuchestablishment,thesellingpriceinsuchestablishmentshallconstitutethewholesaleprice.Shouldsuchpricebelessthanthesaidcostsandexpenses,aproportionatemarginofprofitofnotlessthan10%shallbeaddedtoconstitutethewholesaleprice.
• Withrespecttoimportedalcoholortobaccoproducts,thecostofimportationshallinnocasebelessthanthevalueindicatedinthereferencebooksoranyotherreferencematerialsusedbytheBureauofCustoms(BOC)indeterminingthepropervaluationoftheimportedproducts,orthedutiablevalueasdefinedundertheTariffandCustomsCodeofthePhilippines,whicheverishigher.
• Incasethenewlyintroducedalcoholortobaccoproductshallbesubsequentlymarketedinanotherregion/otherregionsbeforethepropertaxclassificationisfinallydeterminedbytheBIR,anupdatedswornstatementshallbesubmittedtotheappropriateBIROfficebeforethesameshallberemovedfromtheplaceofproduction.
• TheswornstatementprescribedintheseRegulationsshallbesubjecttoverificationbytheBIRtovalidateitscontentswithrespecttoitsaccuracyandcompleteness.Intheeventthecontentsoftheswornstatementarefoundtobeinaccurateand/orincomplete,thetaxpayershallberequiredtosubmitarevisedswornstatement,withoutprejudicetotheimpositionofcorrespondingsanctionsandpenalties.
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►• Theunderstatementofthesuggestednetretailpricebyasmuchas15%oftheactualnetretailpriceshallrenderthemanufacturerorimporterliableforadditionalexcisetaxequivalenttothetaxdueanddifferencebetweentheunderstatedsuggestednetretailpriceandtheactualnetretailprice.
►• Theimportationofalcoholortobaccoproducts,evenifdestinedfortaxandduty-freeshops,DutyFreePhilippines,orintocharteredorlegislatedeconomicand/orfreeportzonesshallbesubjecttoexcisetaxpursuanttotheprovisionsoftheAct,notwithstandingtheprovisionofanyspecialorgenerallawtothecontrary.
• UpontheeffectivityoftheAct,theimportationofanyalcoholortobaccoproductbearingsuffixesorprefixestotherootname,colorand/ordesignofthelabel(suchaslogo,font,picturegram,andthelike),mannerand/orformofpackagingorsizeofcontaineroftheproductthatisdifferentfromthatalreadyregisteredandlocallybeingsoldinthedomesticmarketshallbetreatedasanewlyintroducedproduct.Accordingly,thesameshallbeinitiallyclassifiedaccordingtoitssuggestednetretailprice,subjecttothevalidationandrevalidationrequirementsprescribedbytheseRegulations.
• NotobaccoproductsmanufacturedinthePhilippinesandproducedforexportshallberemovedfromtheirplaceofmanufactureorexported,withoutpostinganexportbondequivalenttotheamountoftheexcisetaxdueonsaidproductsifsolddomestically.
• However,tobaccoproductsforexportmaybetransferredfromtheplaceofmanufacturetoabondedfacilityuponpostingofatransferbondpriortoexport.
►• TobaccoproductsimportedintothePhilippinesanddestinedforforeigncountriesshallnotbeallowedentrywithoutpostingabondequivalenttotheamountofcustomsduty,excisetaxandVATdueonsaidproductsifsolddomestically.
• Allcigaretteswhetherpackedbyhandorpackedbymachineshallonlybepackedin20s,andthroughotherpackagingcombinationswhichshallresulttonotmorethan20sticksofcigarettes.
• Incaseofcigarettespackedinnotmorethan20sticks,whetherin5sticks,10sticksandotherpackagingcombinationsbelow20sticks,thenetretailpriceofeachindividualpackageof5s,10s,etc.shallbethebasisofimposingthetaxrateprescribedundertheAct.
• UpontheeffectivityoftheAct,thefollowingtransitoryprovisionsshallbestrictlyobserved:
1. AllalcoholandtobaccoproductsexistinginthemarketatthetimeoftheeffectivityoftheActshallbeinitiallyclassifiedaccordingtothetaxratesprescribedbytheAct,basedonthe2010pricesurveyoftheseproductsconductedbytheBIR,subjecttotheprohibitionagainstdownwardreclassificationonfermentedliquors.*
* [Editor’s Note: See page 15 below for RMC No. 90-2012, dated December 27, 2012.]
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2. Incaseofalcoholandortobaccoproductsthatwereintroducedafterthe2010pricesurveybutbeforetheeffectivityoftheAct,theirrespectivetaxclassificationorrateshallbebasedonthesuggestednetretailpricedeclaredinthelatestswornstatementfiledbythelocalmanufacturerorimporter,asthecasemaybe.
3. Forpurposesofdeterminingtheactualvolumeoflocallymanufacturedalcoholandtobaccoproductsthatshallbeimposedwiththenewtaxratesupontheremovalofsaidproductsfromtheplaceofproduction,anactualstocktakingshallbeconductedbytheBIRonallstocksoflocallymanufacturedalcoholandtobaccoproductsheldinpossessionbythemanufacturerasoftheeffectivityoftheAct.
4. ThespecifictaxthatwaspaidonthephysicalinventoryofethylalcoholheldinpossessionbymanufacturersofcompoundedliquorsasoftheeffectivityoftheActandsubsequentlyusedasrawmaterialsintheproductionofcompoundedliquorsshallnotbeentitledtotaxcredit/refundorshallnotbedeductedfromthetotalexcisetaxdueoncompoundedliquors.
• ViolationsoftheseRegulationsshallbesubjecttothecorrespondingpenaltiesunderTitleXoftheTaxCode.ThefollowingarethepenaltyprovisionsprescribedpursuanttotheprovisionsoftheAct:
1. Anymanufacturerorimporterwhomisdeclaresormisrepresentsinhisoritsswornstatementanypertinentdataorinformationshall,upondiscovery,bepenalizedbyasummarycancellationorwithdrawalofhisoritspermittoengageinbusinessasamanufacturerorimporterofalcoholortobaccoproducts.
2. Anycorporation,associationorpartnershipliableforanyoftheactsoromissionsinviolationoftheActandimplementedbytheseRegulationsshallbefinedtrebletheaggregateamountofdeficiencytaxes,surchargesandinterestwhichmaybeassessedpursuanttotheprovisionsoftheAct.
3. AnypersonliableforanyoftheactsoromissionprohibitedundertheActandimplementedbytheseRegulationsshallbecriminallyliableandpenalizedunderSection254oftheTaxCode.
4. IftheoffenderisnotacitizenofthePhilippines,heshallbedeportedimmediatelyafterservingthesentencewithoutfurtherproceedingsfordeportation.
• ►TheseRegulationsshalltakeeffectuponpublicationinaleadingnewspaperofgeneralcirculation.
(Editor’s Note: RR No. 17-2012 was published in the PhilippineStar on December 28, 2012.)
Revenue Regulations No. 1-2013 dated January 23, 2013
Definition of Terms:
►►• Electronic Tax Remittance Advice (eTRA) Systemreferstotheprocessofremittingtaxeswithheldbynationalgovernmentagencies(NGAs)throughthe
RRNo.1-2013expandsthecoverageoftaxpayersrequiredtofiletaxreturnsandpaytaxesthroughtheeFPS,toincludeNGAsmandatorilyrequiredtousetheeTRA.
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internetusingtheeFPSfacilityoftheBIR,inlieuofthemanualfilingofTaxRemittanceAdvice.
►• Electronic Filing and Payment System (eFPS)referstothesystemdevelopedandmaintainedbytheBIRforelectronicallyfilingtaxreturns,includingattachments,ifany,andpayingtaxesduethereon,specificallythroughtheinternet.
►►• e-filingreferstotheprocessofelectronicallyfilingtaxreturns,includingattachments,ifany,specificallythroughtheinternet.
►• e-paymentreferstotheprocessofelectronicallypayingataxliabilitythroughtheinternetbankingfacilitiesofAABs.
►• Authorized Agent Bank (AAB)referstoanybankcertifiedbytheBangkoSentralngPilipinas(BSP)whichhassatisfiedthecriteriaonaccreditationandisactuallyaccreditedtocollectinternalrevenuetaxes.
►• Tax Remittance Advice (TRA)referstoaserially-numbereddocumentprescribedbytheDepartmentofBudgetandManagement(DBM)thatshouldbeusedbyNGAsintheremittanceofwithheldtaxesonfundscomingfromDBM.ThisformisdistributedbytheBIRtobeaccomplishedbytheNGAs.ThesameshallbedulycertifiedbytheChiefAccountantandapprovedbytheHeadoftheconcernedNGAorhisdulyauthorizedrepresentative,andattachedtoeverywithholdingtaxreturnfiledaspaymentfortaxeswithheld.ThisshallbethebasisfortheBIRandtheBureauofTreasury(BTr)torecordthetaxcollectionintheirrespectivebooksofaccounts.
►• Electronic Tax Remittance Advice (eTRA)referstoaTRAwhichisaccomplishedonlineviatheBIR’seFPSfacility.
►• National Government Agencies (NGAs)referstogovernmentagencieswhosemainfund/budgetcomesfromtheDBMbasedontheyearlybudgetallotmentasprovidedundertheGeneralAppropriationsAct.
►• ReturnreferstothetaxreturnsrequiredtobefiledbyNGAswhichinclude,butarenotlimitedto,thefollowing:
Tax Return Description Due Date for Filing
BIRForm1601-C
MonthlyRemittanceReturnofIncomeTaxesWithheldonCompensation
Onorbeforethe10thdayfollowingthemonthinwhichwithholdingwasmade,exceptfortaxeswithheldforthemonthofDecemberofeachyear,whichshallbefiledonorbeforeJanuary15ofthesucceedingyear.
BIRForm1601-E
MonthlyRemittanceReturnofCreditableIncomeTaxesWithheld(Expanded)[Exceptfortransactionsinvolvingoneroustransferofrealpropertyclassifiedasordinaryasset]
Onorbeforethe10thdayfollowingthemonthinwhichwithholdingwasmade,exceptfortaxeswithheldforthemonthofDecemberofeachyear,whichshallbefiledonorbeforeJanuary15ofthesucceedingyear.
14 Tax Bulletin
BIRForm1601-F
MonthlyRemittanceReturnofFinalIncomeTaxesWithheld
Onorbeforethe10thdayfollowingthemonthinwhichwithholdingwasmade,exceptfortaxeswithheldforthemonthofDecemberofeachyear,whichshallbefiledonorbeforeJanuary15ofthesucceedingyear.
Tax Return Description Due Date for Filing
BIRForm1603
QuarterlyRemittanceReturnofFinalIncomeTaxesWithheldonFringeBenefitsPaidtoEmployeesOtherthanRankandFile
Onorbeforethe10thdayofthemonthfollowingthequarterinwhichthewithholdingwasmade.
BIRForm1600
MonthlyRemittanceReturnofValue-AddedTaxandOtherPercentageTaxesWithheld
Onorbeforethe10thdayofthemonthfollowingthemonthinwhichwithholdingwasmade.
BIRForm1702
AnnualIncomeTaxReturnforCorporations,PartnershipsandOtherNon-IndividualTaxpayers
Onorbeforethe15thdayofthefourthmonthfollowingthecloseofthetaxableyear(calendarorfiscal)
BIRForm1702Q
AnnualIncomeTaxReturnforCorporations,PartnershipsandOtherNon-IndividualTaxpayers
Withinsixty(60)calendardaysfollowingthecloseofeachofthefirstthree(3)quartersofthetaxableyear(calendarorfiscalyear)
BIRForm2550M
MonthlyValue-AddedTaxDeclaration
Onorbeforethe20thdayafterthecloseofthemonth
BIRForm2550Q
QuarterlyValue-AddedTaxReturn
Onorbeforethe25thdayafterthecloseofthetaxablequarter
BIRForm2551M
MonthlyPercentageTaxReturn
Onorbeforethe20thdayafterthecloseofthemonth
BIRForm2000
DocumentaryStampTaxReturn
Onorbeforethe5thdayafterthecloseofthemonthwhenthetransactionsubjecttoDSToccur.
►• TheBIRshallissueanotificationlettertoallNGAs,includingtheirbranchesandextensionofficeslocatednationwidewhichhavetheirowndisbursementfunctions,toinformthemthattheyaremandatedtousetheeFPSinfilingtherequiredreturnsandinpayingthetaxesduethereon.
►• ItshallbetheresponsibilityoftheHeadOfficeoftheconcernedNGAtoprovidetheBIRwiththelistofallitsbranches/fieldorextensionofficeslocatednationwidewhichhavetheirowndisbursementfunctions,withinformationastotheirrespectivebusinessaddresses,agencycodesandTINs.
►• AllNGAsnotifiedthruthenotificationlettershallenrollintheeTRAsystembyenrollingfirstwiththeBIR’seFPSfacility.
►• Aspartoftheenrollmentprocedures,NGAsshallberequiredtosubmit
totheRevenueDistrictOfficewheretheyareregisteredthenamesoftwoauthorizedofficersdesignatedtofiletherequiredtaxreturnspursuanttoSection52(A)oftheTaxCode.Likewise,NGAsshallenrollwithanyAABwheretheyintendtopaythroughthebankdebitsystem,incasesofremittanceofwithheldtaxesonfundsnotcomingfromtheDBMorthepaymentofinternalrevenuetaxesthrucashandnotthroughTRA.
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►• NGAsmandatedtofileelectronicallythrutheissuanceofthenotificationlettershallfiletheirtaxreturnsviatheeFPS,whetherornottheymakeuseoftheeTRAinthepayment.
►• Staggeredfilingofreturnsallowedforwithholdingagents/taxpayersenrolledintheeFPSshallnotapplyinthecaseofNGAs.Alltaxreturnsmustbeelectronicallyfiled(e-filed)followingtheprescribedduedates.Paymentofthetaxduemustalsobemadeonthesamedaythereturnise-filedbyaccomplishingon-linetheTRA.
►• TheuseofeTRAaspaymentislimitedonlytotheNGAs’taxliabilitiesarisingfromtheuseoffundscomingfromtheDBM.Aseparatetaxreturnmustbeaccomplishedforthesetaxliabilitiessinceaparticularfundisrequiredtohaveaseparatebranchcode.
►• Theseregulationsshalltakeeffectafter15daysfollowingthepublicationintheOfficialGazetteorinanewspaperofgeneralcirculation.
(Editor’s Note: RR No. 1-2013 was published in ManilaBulletin on January 25, 2013.)
Revenue Memorandum Circular No. 84-2012 dated December 21, 2012
• InterestincomereceivedbybanksfrompayorsbelongingtotheTop20,000Corporationsandstrictlyarisingfromindividualloansobtainedfrombanksthatarenotsecuritized,assignedorparticipatedoutremainssubjectto2%creditablewithholdingtax(CWT).
• InterestincomepaidbybanksdesignatedasTop20,000Corporationsand
strictlyarisingfromloansmadetosuchbanksthatarenotsecuritizedorparticipatedoutremainssubjectto2%CWT.
• The20%finalWTandCWTimposedundertheTaxCodeandexistingregulationscoverinterestarisingfromorpaidoutofdebtsecurities.
Revenue Memorandum Circular No. 90-2012 dated December 27, 2012
►• TheinitialclassificationsofallalcoholandtobaccoproductsexistinginthemarketatthetimeofeffectivityofRANo.10351asprovidedinthisCirculararebasedonthe2010pricesurveyofthealcoholandtobaccoproductsconductedbytheBIR.
►• Incaseofalcoholand/ortobaccoproductsthatwereintroducedafterthe2010pricesurveybutbeforetheeffectivityofRANo.10351,theirtaxclassificationorrateisbasedonthesuggestednetretailpricedeclaredinthelatestswornstatementfiledbylocalmanufacturerorimporter,asthecasemaybe.
• TheinitialclassificationsandtaxratesofalcoholandtobaccoproductsarelistedintheannexesattachedtoRMC90-2012,asfollows:
AnnexA-1 LocallyManufacturedFermentedLiquors
AnnexA-2 ImportedFermentedLiquors
AnnexB-1 LocallyManufacturedDistilledSpirits
RMCNo.84-2012clarifiesthepropertaxtreatmentofinterestincomeearn-ingsonloansthatarenotsecuritized,assignedorparticipatedout.
RMCNo.90-2012prescribestheinitialclassificationsandtaxratesforalcoholandtobaccoproductsexistinginthemarketpursuanttoRANo.10351.
16 Tax Bulletin
AnnexC ImportedSparklingWines
AnnexD-1 LocallyManufacturedCigaretteBrands
AnnexD-2 ImportedCigaretteBrands
Revenue Memorandum Circular No. 91-2012 dated December 28, 2012
►• Underasplitpaymentarrangement,theadvertisermayengageorcontractdirectlywithamediaentity/supplierandanadvertisingagencyformediaadvertisingplacements.Theincomepaymentsdirectlymadebytheadvertisertothemediasupplierandtotheadvertisingagencyarelimitedtothecostoftheserviceprovidedbyeachentity(i.e.,billingofthemediasupplierforthetotalcostofproductionandmediaplacementandbillingofadvertisingagencyforcommission/servicefee).
►• Thefollowingaretheaccountingentries:
AssumethatthetotalcostoftheadvertiserforthetotalmediaadvertisementisP100,000comprisedofP85,000mediaentity/supplierbillingandP15,000advertisingagencycommission/servicefee,inclusiveofVAT:
AccountingEntriesintheBooksofAccountsoftheAdvertiser:
Debit Credit
►►• Receiptofbillingfrommediaentity/supplier:
AdvertisingExpense P85,000
DeferredInputVAT 10,200
AccountsPayable–MediaEntity/Supplier P95,200
►►• PaymenttoMediaEntity/Supplier:
AccountsPayable–MediaEntity/Supplier P95,200
CreditableITWithheld P1,700
Cash 93,500
►• ►ReceiptofBillingfromAdvertisingAgency:
ServiceExpense P15,000
DeferredInputVAT 1,800
AccountsPayable–AdvertisingAgency P16,800
►►• PaymentofAdvertisingAgency:
AccountsPayable–AdvertisingAgency P16,800
CreditableITWithheld P300
Cash 16,500
AccountingEntriesintheBooksofAccountsoftheMediaEntity/Supplier:
Debit Credit
►• ►BillingtoClient/AdvertiserfortheMediaPlacement:
AccountsReceivable–Advertiser P95,200
Income/Fees–MediaPlacement P85,000
DeferredVATPayable 10,200
RMCNo.91-2012supplementsRMCNo.63-2012datedOctober29,2012oninvoicingandrecordingofincomepaymentsformediaadvertisingplace-mentsunderasplitpaymentschemeorarrangement.
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• PaymenttoMediaEntity/Supplier:
AccountsPayable–MediaEntity/Supplier P95,200
CreditableITWithheld P1,700
Cash 93,500
Debit Credit
►►• ReceiptofIncomePaymentfromAdvertiser:
Cash P93,500
CreditableWithholdingTax 1,700
AccountsReceivable–Advertiser P95,200
AccountingEntriesintheBooksofAccountsoftheAdvertisingAgency:
Debit Credit
►►• BillingtoClient/AdvertiserfortheCommission/ServiceFee:
AccountsReceivable–Advertiser P16,800
CommissionIncome/ServiceFees P15,000
DeferredVATPayable 1,800
►►• ReceiptofIncomePaymentfromAdvertiser:
Cash P16,500
CreditableITWithheld 300
AccountsReceivable–Advertiser P16,800
Revenue Memorandum Circular No. 2-2013 dated December 28, 2012
►• RRNo.12-2012appliesprospectivelytolandvehiclespurchasedupontheeffectivityofRRNo.12-2012wherethepurchasepriceexceededtheamountofP2,400,000.00.
►• RRNo.12-2012waspublishedlastOctober17,2012and,basedonitsprovisions,itshalltakeeffectimmediately.Hence,theRRtookeffectonOctober17,2012.
►• Incasethevehicles(definedintheRRaspassengervehiclesofalltype,whetherbyland,water,orair)whicharenotalloweddepreciationexpense,orthenon-depreciablevehicleswillbesoldataloss,thelosstobeincurredfromsuchsaleshallnotbedeductiblefromgrossincome.
►• Forincometaxpurposes,allexpensesrelatedtothenon-depreciablevehiclessuchasbutnotlimitedtorepairsandmaintenance,oilandlubricants,gasoline,spareparts,tiresandaccessories,premiumpaidforinsurancecoveringsaidvehiclesandregistrationfeesshallnotbeallowedasadeductionintheirentirety.ForVATpurposes,allinputtaxescorrespondingtothedisallowedexpensesforincometaxpurposesarelikewisenotallowed.
Revenue Memorandum Circular No. 4-2013 dated January 11, 2013
►• Allhospitalsandnon-stock,non-profitorganizationsoperatinghospitalswhichwereissuedtax-exemptrulingsbytheBIRshallsubmitarequest
RMCNo.2-2013clarifiescertainprovisionsofRRNo.12-2012onthedeductibilityofdepreciationexpenseasitrelatestothepurchaseofvehicles,andotherrelatedexpenses,andtheinputtaxesallowed.
RMCNo.4-2013requirestax-exempthospitalstosecurerevalidatedtaxexemptionrulings/certificates.
18 Tax Bulletin
forrevalidationoftheirtax-exemptstatusbysubmittingthefollowingdocumentstotheRevenueDistrictOfficewheretheorganizationisregistered:
1. LetterapplicationwhichmuststatethespecificparagraphofSection30oftheTaxCodeunderwhichitseeksexemption;
2. Copiesofthecorporation’slatestArticlesofIncorporationandBy-LawsdulycertifiedbytheSEC;
3. BIRCertificateofRegistration;4. TaxClearanceissuedbytheRevenueDistrictOfficewherethecorporation
isregistered;5. CopiesofIncomeTaxReturnsorAnnualInformationReturnsand
FinancialStatementsforthelastthreeyears;and6. Astatementofitsmodusoperandistatingthereinitssourcesofrevenues.
►• Inthecourseofreviewoftheapplicationfortaxexemption,theBIRmayrequirethesubmissionofotherdocumentsasthecircumstancesmaywarrant.
• Procedures
1. Uponreceiptoftheapplicationtogetherwiththesupportingdocuments,theRevenueDistrictOfficeshallevaluatethesameandshalldeterminewhetheritqualifiesasanexemptcorporationunderSection30oftheTaxCode.
2. Iftheapplicationisfoundtobeinsufficient,thecorporationshallbenotifiedofsuchfindingsandtheapplicationwiththesupportingdocumentsshouldbereturned.
3. Iftheapplicationisfoundtobevalid,areportshallbepreparedbytheRevenueDistrictOfficestatingthereinwhy,initsopinion,theorganizationisqualifiedtobetaxexemptunderSection30.
4. ThedocketofthecaseshallbeforwardedtotheOfficeoftheRegionalDirectorforreview.IftheRegionalDirectoragreeswiththerecommendationoftheRevenueDistrictOffice,thesameshallbeforwardedtotheOfficeoftheAssistantCommissioner,LegalService.TheLawDivisionshallreviewandevaluatethedocumentssubmitted,andifinorder,preparetheappropriateCertificateofTaxExemptionforsignatureoftheCommissionerorherdulyauthorizedrepresentative.
►• AllrulingsissuedpriortoNovember1,2012whichgranttaxexemptiontoproprietarynon-profithospitalsortonon-stock,non-profitentitiesoperatinghospitalsunderSection30oftheTaxCodeshallnolongerbevalid.
Revenue Memorandum Circular No. 6-2013 dated December 19, 2012
►►• ThefollowingaredeemedtobeengagedintaxpracticeandarerequiredtoapplyforaccreditationpursuanttoSection2(e)ofRRNo.11-2006,asamended:
1. Taxagents/practitionerswhoareengagedintheregularpreparation,certification,auditandfilingoftaxreturns,informationreturnsorotherstatementsorreportsrequiredbytheTaxCodeorRegulations;
RMCNo.6-2013clarifiestaxpayers’concernsontheauditprogram,andtheirresponsibilityforengagingtaxagents/practitioners.
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2. Thosewhoareengagedintheregularpreparationofrequestsforruling,petitionsforreinvestigation,protests,requestsforrefundortaxcreditcertificates,compromisesettlementand/orabatementoftaxliabilitiesandotherofficialpapersandcorrespondencewiththeBIR,andothersimilarorrelatedactivities;
3. Thosewhoregularlyappearinmeetings,conferences,andhearingsbeforeanyofficeoftheBIRofficiallyonbehalfofataxpayerorclientinallmattersrelatingtoaclient’srights,privileges,orliabilitiesunderlawsorregulationsadministeredbytheBIR.
►►• InaccordancewithRRNo.11-2006,theBIRcanrefusetotransactofficialbusinesswithtaxagents/practitionerswhoarenotaccreditedbytheBIR.
►• Alltaxpayersareenjoinedtoensurethatthetaxagents/practitionerswhomtheywillengageareaccreditedwiththeBIR.Taxpayersshouldbeawareoftheirfollowingresponsibilities:
1. Beforeengagingthetaxserviceofataxagent/practitioner,theyshouldsecureacopyofhis/itsBIRcertificateofaccreditationandtakenoteofthefollowing:
►• TIN►• Accreditationnumber►• Dateofissuance►• Dateofexpiry
2. ConstantlyvisittheBIRwebsiteforthepublicationoftheupdatedmasterlistofaccreditedtaxagents/practitioner.
BOC Issuances
Customs Memorandum Order No. 16-2012 dated November 27, 2012
►• Dutydrawbacktaxcreditcertificates(TCCs)jointlyissuedbytheOne-StopShop(OSS)Inter-AgencyTaxCreditandDutyDrawbackCenter,DepartmentofFinance(DOF)andtheBOCpursuanttoSection106oftheTariffandCustomsCodeofthePhilippines(TCCP)donotprovideadefinitevalidityperiod.
►• TCCsissuedpursuanttoExecutiveOrder(EO)No.226arevalidforten(10)years,whileTCCsissuedundertheTaxCodearevalidfor5yearsfromdateofissue,subjecttorevalidationforanother5years.
►• ToalignandharmonizethevalidityperiodofTCCs,dutydrawbackTCCsissuedpursuanttotheTCCPshallbevalidforten(10)yearsfromdateofissue,pursuanttoResolutionNo.308-48-2011datedFebruary14,2011oftheOSS-CenterExecutiveCommittee.
Customs Administrative Order No. 1-2013 dated January 22, 2013
►• CAONo.1-2013coverstheaccreditationofqualifiedimportersasSuperGreenLane(SGL)Plususers,andtheprocessingofshipmentsofSGLPlususersatthePortofManila(POM),ManilaInternationalContainerPort(MICP),NAIACustomsHouse,andotherportsasmaybedeemednecessary.
CMONo.16-2012prescribesa10-yearvalidityperiodfordutydrawbackTCC.
CAONo.1-2013prescribestherulesandregulationsimplementingtheSGLPlusFacility.
20 Tax Bulletin
►• InadditiontothebenefitsenjoyedbyregularSGLmembers,anaccreditedSGLPlususershallbeentitledtothefollowingbenefits:
1. Three(3)yearsuspensionontheconductofaudit2. Five(5)yearvalidityperiodoftheimporter’saccreditation3. ImportationofarticlesnotincludedintheListofImportables,providedthat
amendmentstothesaidlistaresubmittedatleastten(10)daysbeforearrivaloftheimportation
4. 24-hourClientCoordinatorServiceforqueries5. OtherbenefitsgrantedbytheSGLPlusTaskGroupendorsedbythe
CommissionerandapprovedbytheSecretaryofFinance
►• TheSGLPlusTaskGroupshallbecomposedofthefollowing:
1. DeputyCommissionerforIntelligenceGroup–Chairman2. Chief,RiskManagementOffice(RMO)3. AssistantChief,RMO4. Director,ImportAssessmentSystem(IAS)5. Chief,PlanningandPolicyResearchDivision(PPRD)6. ChiefofStaff,AssessmentOperationsCoordinatingGroup(AOCG)7. ExecutiveAssistant,OfficeoftheCommissioner8. AssistantOIC,ProductionSection,CustomsIntelligenceandInvestigation
Service(CIIS)
►• TheSGLPlusSecretariatshallbeappointedbytheSGLPlusTaskGroupCommander.
►• TheSGLPlusAccreditationSub-groupshallbecomposedoftheCIISDirector,theHeadoftheSGLPlusSecretariat,theHeadsoftheInternalControlSystems(ICS)inthethreemajorpointsofentry,arepresentativefromthePost-EntryAuditGroup–TradeInformationandRiskandAnalysisOffice(PEAG-TIRAO),aCIISrepresentative,andothersassignedbytheTaskGrouptoserveasmembers.
►• TheSGLPlusImportComplianceSub-groupshallbecomposedoftheICSDirectororhisduly-designatedrepresentative,theheadsofICSGsinthePOM,MICPandNAIACustomsHouse,theChiefofValuationandClassificationDivision,andothersdesignatedbytheTaskGroupChairman.
►• TheSGLPlusClientCoordinatingCenter(SPCCC)shallbeorganizedbytheSGLPlusTaskGroupChairman.
►• ThefollowingarethequalificationsforaccreditationundertheSGLPlusfacility:
1. TheimporterisaccreditedasanSGLmembertransactingwiththeBOCforatleastoneyearpriortotheapplication.
2. Theapplicanthasaclearandspecificnatureofbusiness.3. TheSGLPlusAssociationhasbeenconsultedonthemembershipofthe
applicant.4. Theimportermusthaveagoodreputationbasedonitstrackrecord.5. Theimportermustnothavemisusedcustomsfacilitiesforatleastone
yearpriortoitsapplication,orhasnotbeenthesubjectofderogatoryinformation.
6. Theimporteriswillingtoundergoacomplianceaudit.
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• Thefollowingaretheconditionsoftheaccreditation:
1. TheimporterisaregisteredSGLuser.2. Theshipmentsmaybesubjecttorandomorspot-checkinspectionatthe
importer’spremiseswhilethegoodsarebeingunloaded.3. Theimportershallberesponsibleforanymisuseorabuseoftheprivilege.4. Theimportershallcomplywiththerulesandregulationsimplementingthe
SGLPlusprogram.5. AnywillfulviolationoftheCertificateofAccreditation(CA)shallbea
groundforitssuspension,revocationorcancellation.6. TheuseoftheCAshallbesubjecttoreviewandshallbevaliduntil
suspended,revoked,orcancelled.
• Accreditationmaybeviathefollowingmodes:
1. By Invitation.TheSGLPlusAssociationshallselectandinvitetopSGLuserstobecomeSGLPlususersbasedondutiesandtaxespaidforthepreviousyear.
2. By Application.AnySGLuserwhomeetstherequirementsofCAONo.1-2013mayapplyforSGLPlusaccreditationbysubmittingtheSGLPlusapplicationformtogetherwiththerequiredsupportingdocumentstotheSGLPlusSecretariat.
• Suspension, Cancellation, or Revocation of Accreditation
ACAshallremainvalidunlesssuspended,cancelled,orrevokedbytheCommissioneruponrecommendationoftheSGLPlusTaskGroup,afterduenoticeandhearing,onanyofthefollowinggrounds:
1. Failureorrefusal,withoutjustifiablecause,tosubmitwithintheprescribedperiodhardcopiesofimportentriesorsupportingdocuments.
2. FraudulentorwillfulmisrepresentationofSGLPlusapplicationorimportation.
3. Submissionoffakedocumentsintheaccreditationorimportationprocess.4. Failureorrefusal,withoutjustifiablecause,topayadditionaldutiesand
taxeslawfullydemandedafterpostentry(release)verificationbytheSGLPlusICSwithintheprescribedperiod.
5. Violationofthetermsofaccreditation,e.g.failuretopromptlyupdateorinformtheSGLPlusTaskGroupofanychangesinthecommoditiesbeingimported,aswellasintheirdescription,unitvalues,etc.
6. Failureorrefusal,withoutjustifiablecause,tocomplywithlawfulordersordirectivesissuedbytheSGLPlusTaskGrouporanyofitssub-groups,orbyhigherauthorities.
• Conditions on Shipment
1. OnlySGLPlus-accreditedimportersshallbeallowedtoclearshipmentsthroughtheSGLPlusfacility.
2. SGLPlusentriesshallbefiledunderexistingproceduresforSGLshipments.
3. SGLPlusentriesshallbesubjecttoPost-ReleaseVerificationandPost-ReleaseInspection,providedthatanSGLPlusshipmentshallnotbeexaminedexceptwhenitisthesubjectofaderogatoryintelligenceinformationorwhendirectedbytheSGLPlusTaskGroupHead.
22 Tax Bulletin
4. ShipmentsshallqualifyforSGLPlustreatmentonlywhen:
• TheyareinthelistofimportablesintheSGLPlususer’saccreditationorintheamendedlistofimportablessubmittedatleast10daysbeforearrivaloftheimportation.
• Theyarefreelyimportablecommoditiesorifregulated,coveredbycontinuingImportAuthorityissuedbytheappropriategovernmentagency.
• Theyaredeclaredunderconsumptionentries,thussubjecttodutiesandtaxes.
• Theydonotcontainprohibitedarticlesunderexistinglaws,rules,andregulations.
• TheaccreditedSGLPlusimportershallpayaservicefeeforeveryentryfiledthroughtheSGLPlusfacilitybasedontheFOBvalueofthesubjectimportsinaccordancewiththefollowingschedule:
FOB Value Amount
BelowUS$5,000 P500.00
US$5,001toUS$100,000 P1,000.00
US$100,001toUS$200,000 P1,500.00
US$200,001toUS$500,000 P2,000.00
AboveUS$500,000 P2,500.00• CAONo.1-2013shalltakeeffectimmediately.
SEC Issuances
SEC Memorandum Circular No. 11 dated December 20, 2012
InlinewiththethrustoftheCommissiontocontinuouslypromoteahigherlevelofcorporategovernancethroughqualitytrainingongoodcorporategovernanceprinciplesandstandardsforthedirectorsofcoveredcompanies,theCommissionEn Bancadoptedthefollowingguidelines:
Accreditation
• TheCommission,throughtheCorporateGovernanceDivisionoftheCorporationFinanceDepartment,shallaccreditallprivateorgovernmentinstitutionaltrainingproviders(ITPs).
• AnITPmaybeaccreditedprovideditfollowstheproceduralrequirementsoftheseGuidelinesandthefollowingminimumstandardsoftheCommission:
1. Thatitisformallyorganizedtoconducttrainingactivitiesandthatithasanadequatetrackrecordofsuccessfullyconductingcorporatetrainingprogramsincludingpreferablytrainingincorporategovernance;
2. Thatithasasoundbusinessplanincludingreasonabletrainingfeesforconductingcorporategovernancetrainingandadequatefinancialandorganizationalresourcestoexecutethesame;
3. Thatitcanguaranteeaqualifiedline-upoftrainerswhocaneffectivelydeliver,asaminimum,therequiredtraininginaccordancewiththeCodewithspecialemphasisonthefollowingmandatedtopics:
SECMCNo.11prescribestheguidelinesforaccreditationofinstitutionaltrainingprovidersoncorporategovernance.
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• Illegalactivitiesofcorporations/directors/officers►• Insidertrading• Protectionofminoritystockholders• Shortswingtransactions• Liabilitiesofdirectors• Confidentiality• Conflictofinterest• Relatedpartytransactions• Casestudies
4. Thatthetrainersline-uppercourseofferingshouldatleasthaveoneexperiencedcorporatedirector/CEO;
5. ThatitcanprovideforreviewitsintendedcoursematerialsandconductadryrunfortheCommission.
• TheauthorizedofficeroftheapplicantITPmustsubmittotheCommissionthefollowing:
1. WrittenapplicationforaccreditationasanITP;2. CertificationthatitmeetstherequirementsoftheCommissionasset
forthinparagraph2above;3. Supportingdocuments,i.e.,summaryofbusinessexperienceandplan,
credentialsofresourcepersons,courseprogramandtrainingmaterials;and
4. ProcessingfeeamountingtoP5,000.00shallbepaidtotheCommissionbytheapplicant.
• TheCommission,uponrecommendationoftheCorporateGovernanceDivision,shallapprovetheapplicationforaccreditationoftheITP,subjecttothecriteriaandrequirementsenumeratedherein.
• TheaccreditationofanITPshallexpireorbeautomaticallydelistedafter3yearsfromthedateofapprovaloftheaccreditation,unlessanapplicationforitsrenewalisfilednotlaterthan30businessdaysbeforeitsexpiration.TheapplicationfortherenewaloftheaccreditationoftheITPshallbeaccompaniedbyanapplicationfeeofP5,000.00.
Training Program
• AnaccreditedITPshallsubmittotheCommissiondetailsofanyproposedtrainingprogramoncorporategovernanceforclearance.Itshallincludetheproposedline-upoftrainersmeetingtheminimumrequirementsofthisCircular.
• TheCommissionmayobservetheconductofanytrainingprogramandundertakeanindependentevaluationofanyaspectofthetrainingprogram.
• ThetrainingprovidersshallsubmittotheCommissionaCompletionReportofTrainingnotlaterthan15daysafterthetraining.
• TheCommissionreservestherighttowithdrawitsaccreditationfromanyITPwhichisnotcomplyingwithitstrainingguidelines.
• AllexistingaccreditedITPsaredirectedtosubmitanapplicationfortherenewaloftheiraccreditationwithin30businessdaysfrompostingofthis
24 Tax Bulletin
MemorandumCircular.Otherwise,theiraccreditationshallbedeemedexpired.TheapplicationforrenewalofaccreditationshallbeevaluatedbytheCommissiononthebasisofthecriteriaandrequirementsenumeratedherein.
• SECMemorandumCircularNo.15,Seriesof2002andallotherissuancesrelativetheretoaresupersededbythisCircular.
SEC Memorandum Circular No. 12 dated December 20, 2012
• TheseguidelinesshallapplytocompaniesthataremandatedunderSecuritiesRegulationCode(SRC)Rule68,asamended,toadoptthePhilippineFinancialReportingStandards(PFRS)astheirfinancialreportingframework,andthathaveafundedretirementfundforitsemployees.
• TheentityisrequiredunderPAS24“todiscloseinformationaboutanytransactionwitharelatedparty(theretirementfund,inthiscase)andoutstandingbalancesnecessaryforanunderstandingofthepotentialeffectoftherelationshiponthefinancialstatements.Ataminimum,disclosuresshallinclude:
1. Theamountofthetransactions;
2. Theamountofoutstandingbalances,theirtermsandconditionsincludingwhethertheyaresecured,andthenatureoftheconsiderationtobeprovidedinsettlement,anddetailsofanyguaranteesgivenorreceived;
3. Provisionsfordoubtfuldebtsrelatedtotheamountofoutstandingbalances;and
4. Theexpenserecognizedduringtheperiodinrespectofbadordoubtfuldebtsduefromrelatedparties.
• GiventhatthedisclosuresunderPAS24donotprovideanunderstandingofthepotentialeffectsofthetransactionsofthereportingentitywithitsemployees’retirementfund,theseguidelinesshallbeobservedbydisclosingthespecificandmoredetailedinformationontransactionsofareportingentitywitharetirementfundforitsemployees.
• Thefollowingdisclosuresmustbeprovidedintheannualfinancialstatementsofareportingentitythathastransactionseitherdirectlyorindirectlythroughitssubsidiaries,withitsemployees’retirementbenefitfund(the“fund”):
1. Informationwhetherthereportingentity’sfundisintheformofatrustbeingmaintainedbyatrusteebankortrustcompany,orintheformofacorporationwhichhasbeencreatedforthepurposeofmanagingthefund;
2. Thecarryingamountandfairvalueofthefund;
3. Descriptionoftheassetsandinvestmentsofthefund.Thedisclosureshallincludeabriefdescriptionofeachcategorysuchasthemarketforequityordebtsecurities,informationonthelandorbuilding;
4. Volumeandoutstandingbalancesoftransactionsofthefundwiththereportingentityoritssubsidiariesincludingthetermsandconditionsthereof.Thesetransactionsmayincludeamongothers,loans,investment,lease,guaranteeorsurety.
SECMCNo.12prescribestheguide-linesonthedisclosureoftransactionswithretirementbenefitfunds.
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5. Ifthetransactionismaterial,adiscussionofthenatureofrelationshipofthepersonswhoapproveditwiththereportingentity,itssubsidiaries,oranyofitsdirectorsandofficers.
6. Ifthefundhasinvestmentsinthesecurities(debtorequity)oftherelatedentity,adisclosureofthefollowinginformation:
a. Theamountofinvestmentineachtypeofsecuritiesofreportingentityand/oritssubsidiaries,includinglimitationsorrestrictionsprovidedintheplan(ifany);
b. Incaseofequityinvestment,natureoftherelationshipoftheperson/swhoexercisesvotingrightovertheshares,withthereportingentity,itssubsidiaries,oranyofitsdirectorsorofficers;
c. Theamountofgainsorlossesofthefundarisingfromitsinvestmentinthesecuritiesofthereportingentityand/oritssubsidiaries.Thegainsandlossesshallbepresentedpertypeofsecurity.
• TheseDisclosureGuidelinesshallbeapplicabletoannualfinancialstatementsfortheperiodendedDecember31,2012andonwards.Exceptforthe2012financialstatments,thepresentationoftherequiredinformationshallbeinatwo-yearcomparativeperiod.Failuretocomplywiththedisclosurerequirementsshallconstituteamaterialdeficiencyandshallsubjecttheentitytopenaltiesundertheexistingscaleoffines.
SEC Memorandum Circular No. 1 dated January 7, 2013
• Thefollowingguidelinesareissuedwithrespecttoapplications/documentsfiledbycorporations/partnershipswithforeigninvestors:
1. Noapplicationforincorporationofacorporation,orregistrationofapartnershipshallbeacceptedunlesstheTINorpassportnumberofallitsforeigninvestorsareindicatedinitsregistrationdocuments(i.e.,ArticlesofIncorporation).
2. Forapplicationsforamendments,thesameshallnotbeacceptedunlesstheTINofalltheforeigninvestors,naturalorjuridical,residentornon-resident,areindicatedtherein.
3. AlldocumentstobefiledwiththeSECbycorporationsandpartnershipsaftertheirincorporation(i.e.,GeneralInformationSheets)shallnotbeacceptedunlesstheTINofallitsforeigninvestors,naturalorjuridical,residentornon-resident,areindicatedtherein.
SEC Memorandum Circular No. 3 dated January 15, 2013
• Financingandlendingcompaniesarerequiredtosubmitinterimsemi-annualfinancialstatements(ISAFS),otherwiseknownasFCIF(FinancingCompaniesInterimFinancialStatements)andLCIF(LendingCompaniesFinancialStatements),forfinancingandlendingcompanies,respectively.
• Rule8(a)oftheimplementingrulesandregulations(IRR)ofRANo.9474,otherwiseknownastheLendingCompanyRegulationActof2007,whichrequireslendingcompaniestosubmitISAFSorLCIFeveryJuly15andJanuary15,failedtoconsiderlendingcompanieswithfiscalyearsendingonDecember31.
SECMCNo.1requirestheinclusionoftheTINorpassportnumberofforeigninvestorsinallforms,papersanddocu-mentsfiledwiththeSEC.
SECMCNo.3amendstherulesonthedateofsubmissionoftheinterimsemi-annualfinancialstatementsrequiredforfinancingandlendingcompanies.
26 Tax Bulletin
• Section6ofSECMCNo.3,Seriesof2007requiresfinancingcompaniestosubmitISAFSorFCIFwithin15calendardaysfromtheendofthesemester.
• FinancingandlendingcompaniesshallsubmitISAFSwithin45calendardaysfromtheendoftheinterimsemi-annualperiodcoveredbythereport.
• Rule8(a)oftheIRRofRANo.9474andSection6ofSECMCNo.3,seriesof2007,pertainingtotheduedateofsubmissionofISAFSareherebyamendedaccordingly.
BSP Issuances
BSP Circular No. 779 dated January 9, 2013
• Item“b.2”ofSectionX303oftheManualofRegulationsforBanks(MORB)oncreditexposurelimitstoasingleborrowerisamendedtoreadasfollows:
“Sec. X303 Credit Exposure Limits to a Single Borrower
xxx
b.Thetotalamountofloans,creditaccommodationsandguaranteesprescribedinthefirstparagraphmaybeincreasedforeachofthefollowingcircumstances:
1. xxx;
2. Byanadditionaltwenty-fivepercent(25%)ofthenetworthofsuchbank:Provided,thattheadditionalloans,creditaccommodationsandguaranteesareforthepurposeofundertakinginfrastructureand/ordevelopmentprojectsunderthePublic-PrivatePartnership(PPP)ProgramofthegovernmentdulycertifiedbytheSecretaryofSocio-EconomicPlanning:Provided,further,thatthetotalexposuresofthebanktoanyborrowerpertainingtosuchinfrastructureand/ordevelopmentprojectsunderthePPPProgramshallnotexceedtwenty-fivepercent(25%)ofthenetworthofsuchbank:Provided,furthermore,thattheadditionaltwenty-fivepercent(25%)shallonlybeallowedforaperiodofsix(6)yearsfrom28December2010:Provided,finally,thatthecreditriskconcentrationarisingfromtotalexposurestoallborrowerspertainingtosuchinfrastructureand/ordevelopmentprojectsunderthePPPProgramshallbeconsideredbythebankinitsinternalassessmentofcapitaladequacyrelativetoitsoverallriskprofileandoperatingenvironment.Saidloans,creditaccommodationsandguaranteesbasedonthecontractedamountasoftheendofthesix(6)-yearperiodshallnotbeincreasedthereafter;and
3. xxx.”
• ►ThethirdparagraphofSection4303QoftheManualofRegulationsforNon-bankFinancialInstitutions(MORNBFI)ontheloanlimittoasingleborrowerisamendedtoreadasfollows:
CircularNo.779amendstheregula-tionsonSingleBorrower’sLimit.
27
“Sec. 4303Q Loan Limit to a Single Borrower
xxx
Thetotalamountofloans,creditaccommodationsandguaranteesprescribedinthefirstparagraphmaybeincreasedbyanadditional25%ofthenetworthofsuchquasi-bank:Provided,thattheadditionalloans,creditaccommodationsandguaranteesareforthepurposeofundertakinginfrastructureand/ordevelopmentprojectsunderthePublic-PrivatePartnership(PPP)ProgramofthegovernmentdulycertifiedbytheSecretaryofSocio-EconomicPlanning:Provided,further,thatthetotalexposuresofthequasi-banktoanyborrowerpertainingtosuchinfrastructureand/ordevelopmentprojectsunderthePPPProgramshallnotexceed25%ofthenetworthofsuchquasi-bank:Provided,furthermore,thattheadditional25%shallonlybeallowedforaperiodof6yearsfrom28December2010:Provided,finally,thatthecreditriskconcentrationarisingfromtotalexposurestoallborrowerspertainingtosuchinfrastructureand/ordevelopmentprojectsunderthePPPProgramshallbeconsideredbythequasi-bankinitsinternalassessmentofcapitaladequacyrelativetoitsoverallriskprofileandoperatingenvironment.Saidloans,creditaccommodationsandguaranteesbasedonthecontractedamountasoftheendofthe6-yearperiodshallnotbeincreasedbutmaybereducedand,oncereduced,saidexposuresshallnotbeincreasedthereafter.
xxx”
• ThisCircularshalltakeeffect15calendardaysfollowingitspublicationeitherintheOfficialGazetteorinanewspaperofgeneralcirculation.
[Editor’s Note: Circular No. 779 was published in the PhilippineStar on January 14, 2013.]
BSP Circular No. 780 dated January 10, 2013
• OFWsandfamilymemberswhoreturnedfromSyriaareeligibletoavailoftheCurrencyExchangeFacility(CEF)atthemaximumamountofP10,000.00equivalentofSyriancurrencyperperson.
►• Syriancurrencywhichisconsideredlegaltender(i.e.,hasnotbeendemonetized)inSyriamaybeconvertedtoPhilippinepesosevenifnotfreelyconvertiblewiththeBSPatthetimeofexchange.OnwhethertheSyriancurrencyhasbeendemonetized,BSPofficesandbranchesandAABsshallbeguidedbythelatestofficialinformationfromtheDepartmentofForeignAffairsatthetimeofexchange.
• Inconverting,theBSPOfficesandBranchesandAABsshallusethelatestBSPReferenceExchangeRateBulletin.TheBSP’spurchaseoftheSYPacquiredbyAABsundertheCEFshallbeatthesamerateatwhichtheAABspurchasedthem.
• ThefacilityisopentothosewhoreturnedfromSyriafrom1January2012andshallbeavailablefor4monthsfromeffectivityofthisCircular.
• AABs,particularlythosewithbranchofficesatPhilippineinternationalairports(includingtheNinoyAquinoInternationalAirportTerminals1,2,and3,Clark,Subic,Laoag,Cebu,DavaoandZamboanga)andseaports,shallextendtheirbankinghoursasneeded,toaccommodatethosewhowishtoavailofthefacility.
CircularNo.780prescribesguidelinesgoverningtheimplementationoftheSyrianPoundCEF.
28 Tax Bulletin
• AABsshalladvisetheirbranchesontheactivationoftheCEFnotlaterthanone(1)bankingdayfollowingtheBSP’sissuanceoftheguidelinesforpublicinformation.
• Allbankbrancheslocatedatairports/seaportsshallpostpublicadvisoriesinEnglishandFilipinoabouttheCEFinconspicuousplaces,preferablybeforethebaggagecarouselandcustomsdesk.
• AABsareremindedtocomplywiththeAnti-MoneyLaunderingActof2001.
• BearinginmindtheobjectiveoftheCEFprogramtoprovideassistancetoreturningOFWs,AABsareenjoinednottocollectanykindofservicefeefromthoseavailingoftheprogram.
• AABsshallsubmittoBSP-CashDepartment(BSP–CD,HeadOffice)theConsolidatedSummaryofPurchasesundertheCEF,togetherwithcopiesofthefilled-upConversionSlipsforeachtransactionwithin1bankingdayfromtheendofreferenceweek.
►• CurrencypurchasedbyAABsundertheCEFshallbesurrenderedtotheBSP–CDwithin10bankingdaysfrompurchase.
• ThecurrencypurchasedbyAABsundertheCEFshallnotbeincludedinthecomputationoftheforeignexchangepositionofsaidbanks.
• AABsfoundviolatingthisCircularshallbesubjecttothesanctionsprovidedbySection37ofRANo.7653.
►• ThisCircularshalltakeeffect15daysafterpublication.
[Editor’s Note: Circular No. 780 was published in ThePhilippineDailyInquirer on January 15, 2013.]
BSP Circular No. 781 dated January 15, 2013
►►• ThefollowingsectionandsubsectionoftheMORBareamendedtoreadasfollows:
“Sec. X115 Basel III Risk-Based Capital
Theguidelinesimplementingtherevisedrisk-basedcapitaladequacyframeworkforthePhilippinebankingsystemtoconformtoBaselIIIrecommendationsisprovidedinAppendix63b.
Therisk-basedcapitalratioofabank,expressedasapercentageofqualifyingcapitaltoriskweightedassets,shallnotbelessthan10%forbothsolobasis(headofficeplusbranches)andconsolidatedbasis(parentbankplussubsidiaryfinancialalliedundertakings,butexcludinginsurancecompanies).OtherminimumcapitalratiosincludeCommonEquityTier1ratioandTier1capitalratiosof6.0%and7.5%,respectively.Acapitalconservationbufferof2.5%,comprisedofCET1capital,shalllikewisebeimposed.
(The BSP’s implementation plans for the new international capital standards or Basel 2 contained in the Basel Committee on Banking Supervision document “International Convergence of Capital Measurement and Capital Standards: A Revised Framework”, are shown in Appendix 63)
CircularNo.781amendstheBaselIIIimplementingguidelinesonMinimumCapitalRequirements.
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Subsection X115.1 Scope.TheBaselIIIguidelinesapplytoallUBsandKBs,aswellastheirsubsidiarybanksandQBs.”
►►• Section4115QoftheMORNBFIisamendedtoreadasfollows:
“Sec. 4115Q (2008 – 4116Q) Basel III Risk-Based Capital.Theguidelinesimplementingtherevisedrisk-basedcapitaladequacyframeworkforthePhilippinebankingsystemtoconformtoBaselIIIrecommendationsisprovidedinAppendix Q-46b.
ThesetemplatesapplytoallUniversalBanks(UBs)andCommercialBanks(KBs),aswellastheirsubsidiarybanksandQBs.Therisk-basedcapitalratioofaQB,expressedasapercentageofqualifyingcapitaltorisk-weightedassets,shallnotbelessthan10%forbothsolobasis(headofficeplusbranches)andconsolidatedbasis(parentQBplussubsidiaryfinancialalliedundertakings,butexcludinginsurancecompanies).OtherminimumcapitalratiosincludeCommonEquityTier1ratioandTier1capitalratiosof6.0%and7.5%,respectively.Acapitalconservationbufferof2.5%comprisedofCET1capital,shalllikewisebeimposed.
Theratiosshallbemaintainedatalltimes.
Subsection 4115Q.1 (2008 – 4116Q) Scope.TheBaselIIIguidelinesapplytoallUBsandKBsaswellastheirsubsidiarybanksandQBs.”
►►• ExistingcapitalinstrumentsasofDecember31,2012whichdonotmeettheeligibilitycriteriaforcapitalinstrumentsundertherevisedcapitalframeworkshallnolongerberecognizedascapitalupontheeffectivityofthisCircular.CapitalinstrumentsissuedunderCircularNos.709and716andbeforetheeffectivityofCircularNo.768dated21September2012shallberecognizedasqualifyingcapitaluntil31December2015.
►►• Theguidelinesshallbeapplicabletoalluniversalandcommercialbanksincludingtheirsubsidiarybanks/quasi-banks.
Stand-alonethriftbanks,ruralbanks,cooperativebanksandquasi-banks,aswellastheirsubsidiarybanks/quasi-banksshallcontinuetobesubjecttotheexistingapplicableregulationsonrisk-basedcapitaladequacyframework.However,capitalinstrumentsissuedbysaidbanksshallbesubjecttothecriteriaforinclusionasqualifyingcapitalprovidedinAnnexesAtoCandEtoFofAppendix63b/Q-46oftheMORB/MORNBFI.
►►• Appendix63doftheMORBandAppendix46coftheMORNBFIaredeleted.
►►• Existingregulationsdeemedinconsistentwiththenewprovisionsaresuperseded.
►►• ThisCirculartakeseffectonJanuary1,2014.
[Editor’s Note: Circular No. 781 was published in BusinessWorld on January 21, 2013.]
BSP Circular No. 782 dated January 21, 2013
►►• ItemConthe“Characteristicsofatypicalmicrofinanceclient”isamendedtoincludeamongthetypesofclientsthosepoorandlowincomeclientswithannualfamilyincomebelowthenationalaveragebasedonthelatestNationalStatisticsOffice(NSO)FamilyIncomeandExpenditureSurvey(FIES),asfollows:
CircularNo.782amendsAppendix45(NotesonMicrofinance)ofSectionX361oftheMORB.
30 Tax Bulletin
“C.Characteristicsofatypicalmicrofinanceclient
Characteristics Distinguishing Features
Typeofclient
Lowincomewithregularcashflow
Employmentininformalsector,lowwagebracket
Lackofphysicalcollateral
Closelyinterlinkedhouseholdandbusinessactivities
Poorandlowincome*
*Forpurposesofmicroinsuranceproductsonly.PoorandlowincomeclientsrefertothosewithannualfamilyincomebelowthenationalaveragebasedonthelatestavailableNationalStatisticsOffice(NSO)FamilyIncomeandExpenditureSurvey(FIES).The2009nationalaverageannualfamilyincomeisPhP206,000.
xxx”
►►• ThisCircularshalltakeeffect15calendardaysfollowingitspublicationeitherintheOfficialGazetteorinanewspaperofgeneralcirculation.
[Editor’s Note: Circular No. 782 was published in ThePhilippineDailyInquirer on January 24, 2013.]
BSP Circular No. 783 dated January 21, 2013
►►• Proceduresfortherelocationofexistingbranches/otherbankingoffices(OBOs),whethertobeopenedatthenewsiteonthenextbankingdayorwithin1yearfromthedateofclosureofthebranch/OBOunderSubsectionX151.9areamended.
►►• Proceduresforthetemporaryclosure,permanentclosureandsurrenderofbranch/OBOlicense,andsale/acquisitionofbranches/OBOsunderSubsectionX151.10areamended.
►►• SubsectionX151.11onrelocation/transferofbranchlicensesofclosedbanksisamendedtoreadasfollows:
“Subsec. X151.11 Relocation/Transfer of branch licenses of closed bank.Buyersofclosedbanksshallbeallowedtorelocate/transferacquiredbranchessubjecttotheconditionsstatedunderItems“d”,“e”,and“f”ofthefirstparagraphofSubsec.X151.9onrelocationofbranches/OBOs.”
►►• SubsectionX153.3ondateofopeningofadditionalforeignbankbranchesisamendedtoreadasfollows:
“Subsec. X153.3 Date of opening.TheopeningofapprovedbranchesshallbesubjecttotheprovisionsofSubsec.X151.7”
►►• SubsectionX154.4ondateofopeninganapprovedofficeabroadisamendedtoreadasfollows:
CircularNo.783amendstheregula-tionsonrelocationandvoluntaryclosure/saleofbranches/OBOs.
31
“Subsec. X154.4 Date of opening.TheopeningofanyofficeabroadshallbesubjecttotheprovisionsofSubsectionX151.7”
►►• ThisCircularshalltakeeffect15calendardaysfollowingitspublicationeitherintheOfficialGazetteorinanewspaperofgeneralcirculation.
[Editor’s Note: Circular 783 was published in TheManilaTimes on January 24, 2013.]
Court Decision
People of the Philippines vs. Judy Anne Santos y LumaguiCTA(ThirdDivision)Crim.CaseNo.0-012promulgatedJanuary16,2013
Facts:
In2005,theaccusedJudyAnneSantos(Santos)waschargedbeforetheCourtofTaxAppeals(CTA)withviolationofSection255oftheTaxCodeforwillfully,unlawfullyandfeloniouslyfilingafalseandfraudulentincometaxreturn(ITR)fortaxableyear2002.SantosreportedagrossincomeofP8,033,332.70onher2002ITR.TheprosecutionallegedthatSantos’correctincomefor2002totalsP16,396,234.70,oranunder-declarationofP8,362,902.00resultinginanincometaxdeficiencyofP1,395,116.24,excludinginterestandpenalties.
Theprosecutionpresentedbothtestimonialanddocumentaryevidence,includingCertificatesofCreditableTaxWithheldissuedbyABS-CBNBroadcastingCorporation,VivaProductions,Inc.,StarCinemaProductions,Inc.,RegalEntertainment,Inc.andCenturyCanningCorporationshowingthetotaltalentfeespaidtoSantosfor2002andthetaxeswithheld.
ThedefensepresentedSantoswhodeniedtheallegationsofwillfulfilingofafalseandfraudulentITR.Santostestifiedthat:
a. ThesignatureaffixedontopofhernameintheITRfor2002isnothersignature;
b. Sinceshewas12yearsold,shehadengagedtheservicesofMr.AlfonsoLorenzoasManagertowhomsheentrustedalltransactions,i.e.,contractnegotiations,contractsigning,handlingoffees,filingoftaxreturns,payingcorrespondingtaxes,etc.;
c. Mostofthetime,herfees(checks)wereissuedinthenameofherManager,whocollectsthesame,andshehasnoknowledgeofhowmuchshewasearningperproject;
d. WhilesheadmitsthesignaturesappearingontheCounter-AffidavitwithCounter-ChargeandherRejoinder-Affidavitsubmittedin2005,shewasnevergivenachancebyherManagertoreadtheircontents;and
e. ShereallyintendedtosettlethecasewereitnotfortheoppositionbyherManagerandthenlegalcounsel.
Negligence,whetherslightorgross,isnotequivalenttofraudwithintenttoevadeatax,whichiscriminallypunish-ableundertheTaxCode.Fraudmustamounttointentionalwrong-doingwiththesoleobjectofavoidingtax.
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Santos’testimonywascorroboratedbyherexternalauditor,whotestifiedthatalldocumentsusedinherreportfortheFinancialStatementswereallprovidedbytheManager.
Issue:
IsSantosliableforwillfulfilingofafalseandfraudulentITRinviolationofSection255oftheTaxCode?
Ruling:
No.TheprosecutionfailedtoestablishtheguiltofSantosbeyondreasonabledoubt.
ThereisnoevidenceintherecordstoestablishthekeyelementofwillfulnessonthepartofSantostosupplythecorrectandaccurateinformationonherITR.Santosdeniedthesignatureappearingonthetopofthename“JudyAnneSantos”intheITRfor2002.TheCertifiedPublicAccountant,whoseparticipationislimitedtothepreparationoftheFinancialStatementsattachedtothereturn,alsodeniedsigningthereturnonbehalfoftheaccused.TheintentionofSantostosettlethecasewereitnotfortheoppositionofherManagerandpreviouscounselnegatesanymotivetocommitfraud.
Theprosecutionhastheburdentoprovebeyondreasonabledoubtthataccusedwillfullyfailedtosupplycorrectandaccurateinformationinthereturn.Santos,however,isfoundnegligentbutsuchisnotenoughtoconvictherinthecaseatbench.Negligence,whetherslightorgross,isnotequivalenttothefraudwithintenttoevadethetaxcontemplatedbythelaw.Fraudmustamounttointentionalwrong-doingwiththesoleobjectofavoidingthetax.
Inallcriminalcases,merespeculationcannotsubstituteforproofofestablishingtheguiltoftheaccused.Suspicion,nomatterhowstrong,mustneverswayjudgment.Wherethereisreasonabledoubt,theaccusedmustbeacquittedeventhoughtheirinnocencemaynothavebeenestablished.Whenguiltisnotprovenwithmoralcertainty,ithasbeenalongstandingcourtpolicythatthepresumptionofinnocencemustbefavored,andexonerationgrantedasamatterofright.
However,acquittalforthefailureoftheprosecutiontoproveallelementsofthecriminaloffensebeyondreasonabledoubtdoesnotincludetheextinguishmentofthecivilliability.Santosisliabletopaythedeficiencyincometaxesfortheyear2002intheamountofP3,418,034.78includingpenaltiesandinterest.Inaddition,Santosisorderedtopay20%delinquencyinterestcomputedfromJanuary15,2008untilfullpayment.
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