2015 tax and corporate udpates course outline

2015 TAX AND CORPORATE UPDATES

Seminar Course Outline

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2015 TAX AND CORPORATE UPDATES I. Income Tax

A. Bureau of Internal Revenue (BIR)

1. Revenue Memorandum Circular (RMC) No. 3-2014: Circularizing modification of BIR Ruling DA (C-133) 431-2008 - Transfer of Fort Bonifacio Development Corporation's real properties to the Bases Conversion and Development Authority (BCDA), in redemption of its preferred shares held by BCDA

Related Discussion: o BIR Ruling DA (C-133) 431-2008

2. RMC No. 51-2014: Clarifying the Inurement Prohibition under Section 30 of

the National Internal Revenue Code of 1997

Related Discussion o Revenue Memorandum Order (RMO) No. 20-2013: Prescribing

the Policies and Guidelines in the Issuance of Tax Exemption Rulings to Qualified Non-Stock, Non-Profit Corporations and Associations Under Section 30 of the Tax Code, as amended

3. RMC No. 86-2014: Valuation of Contributions or Gifts Actually Paid or Made

in Computing Taxable Income

4. RMC No. 39-2014: Clarifying the Tax Treatment of Payouts by Employee Pension Plans

5. RMC No. 79-2014: Clarifying the Tax Treatment of Stock Option Plans and

Other Option Plans

Related Discussion o RMC No. 88-2012: Tax Treatment of Stock Option Plans

6. New Philippine Tax Treaties

RMC No. 16-2014: Entry into Force, Effectivity, and Applicability of the Philippines-Nigeria Double Taxation Agreement

RMC No. 37-2014: Entry into Force, Effectivity, and Applicability of the Philippines-Kuwait Double Taxation Agreement

7. BIR Ruling No. 007-14: Change in Accounting Method

8. BIR Ruling No. 73-2014: Taxability of condominium corporation under RMC No. 65-2012

9. Taxability of Electric Cooperatives

BIR Ruling No. 170-2014 BIR Ruling No. 291-2014



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10. Taxability of Separation Pay and Retirement Benefits under Section 32 of the Tax Code:

BIR Ruling No. 57-2014

BIR Ruling No. 68-2014

BIR Ruling No. 123-2014 BIR Ruling No. 124-2014 BIR Ruling No. 135-2014 BIR Ruling No. 366-2014

B. Court of Tax Appeals (CTA)

1. St. Lukes Medical Center, Inc. vs. Commissioner of Internal Revenue (CIR),

CTA Case Nos. 7823 and 7832, 18 February 2014: Income of institution under Section 30 (E) or (G) of the Tax Code is subject to preferential tax rate of 10%; Clarification of "exclusive" for charitable institutions

2. Shinko Electric Industries, Co., Ltd. vs. CIR, CTA Case No. 8213, 10 February 2014 - A representative office is not allowed to derive income from sources within the Philippines. Further, considering that a representative office is not engaged in income generating activity whose operations are fully subsidized by its head office, it is not subject to Philippine income tax. Subsidy represents a capital or fund which is distinct from income

3. Aegis People Support Inc. vs. CIR, CTA En Banc (EB) Case No. 996, 4 August

2014: To enjoy the income tax holiday incentive provided under Republic Act (RA) No. 7916 and Executive Order No. 226, taxpayer's income must be effectively related with the conduct of its registered trade or business

4. Reiteration of Deutsche Bank AG Manila Branch vs. CIR, G.R. 188550, 19 August 2013

Kepco Ilijan Corporation vs. CIR, CTA EB No. 988, 10 July 2014 Masin-AES Pte Ltd Philippine Branch vs. CIR, CTA Case No. 8543,

10 April 2014

Sal Oppenheim Jr. & CIE Kommanditgesselschaft Auf Aktien vs. CIR, CTA EB Case No. 906, 3 March 2014

5. COL Financial Group, Inc. vs. CIR, CTA Case No. 8454, 15 April 2014:

Revenue Regulations (RR) No. 2-2010, in relation to RR No. 16-2010, could not be given retroactive application for year 2009

Related Discussions o RR No. 2-2010 o RR No. 16-2010

6. Taxability of Separation Pay and Retirement Benefits under Section 32 of the

Tax Code:

Ong Beng Gui vs. CIR, CTA Case No. 8410, 28 October 2014



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II. Value-Added Tax

A. Bureau of Internal Revenue

1. BIR Ruling No. 306-2014: Request for exemption from payment of input VAT

B. Court of Tax Appeals

1. Dakudao & Sons, Inc. vs. CIR, CTA Case No. 8501, 13 January 2014: Tax-free exchange of property for shares

2. Documents to be presented by a VAT-registered person claiming VAT zero-

rated direct export sales

Phil. Gold Processing & Refining Corp. vs. CIR, CTA Case No. 8301, 27 February 2014

Philex Mining Corporation vs. CIR, CTA Case No. 7933, 22 September 2014

Nokia (Philippines), Inc. vs. CIR, CTA Case No. 8405, 7 November 2014

3. Deutsche Knowledge Services Pte Ltd vs. CIR, CTA Case No. 8342, 23

September 2014: Requisites in order that a supply of service be considered VAT zero-rated; Documents to be presented for non- resident foreign corporation clients

Related Discussion o Chevron Holdings, Inc. vs. CIR, CTA EB Case No. 940, 28 October

2014

4. CIR vs. Negros Consolidated Farmers Multi-Purpose Cooperative, CTA Case No. 992, 5 March 2014: Cooperatives are exempt from VAT, for sales or transactions with members and under certain conditions

5. Interpretation of "in the course of trade or business" and "incidental"

transaction in Section 105 of the Tax Code

CIR vs. Thomas C. Ongtenco, CTA EB No. 995, 30 June 2014

KEPCO Philippines Corporation vs. CIR, CTA EB Case No. 1155, 3 November 2014

6. Lacson & Lacson Insurance Brokers, Inc. vs. CIR, CTA Case No. 8203, 10

October 2014: VAT on commission income earned by insurance brokers

III. Withholding Tax A. Bureau of Internal Revenue

1. RMC No. 8-2014: Presentation of Tax Exemption Certificate or Ruling by

Exempt Individuals and Entities

Related Discussion o RMC No. 60-2014: Clarification on the applicability of RMC 8-2014

to General Professional Partnership (GPP) in relation to RMC No. 003-12



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2. RMC No. 73-2014: Clarification of Withholding Tax Rates on Dividend

Payments to Philippine Central Depository (PCD) Nominees

3. RMO No. 34-2014: Clarifying Certain Provisions of RMO 20-2013, as amended by RMO 28-2013

Related Discussion o RMO No. 20-2013: Prescribing the Policies and Guidelines in the

Issuance of Tax Exemption Rulings to Qualified Non-Stock, Non-Profit Corporations and Associations Under Section 30 of the Tax Code, as amended

o RMO No. 28-2013: Amendment to RMO 20-2013 o The Abbas Orchard School, Inc. vs. CIR, CTA Case No. 8377, 4

November 2104: The Tax Code does not provide for a requirement for educational institutions to be exempt, hence the BIR cannot add an additional requirement to implement the law.

o St. Pauls College of Makati vs. CIR, Civil Case No. 13-1405: Resolution on the application for a writ of preliminary injunction included in the Civil Action to Declare Unconstitutional the BIR Revenue Memorandum Order No. 20-2013.

4. BIR Ruling No. 293-2014: An income payment which is not enumerated

under RR No. 02-98 cannot be subject to creditable withholding tax

5. BIR ITAD Ruling No. 025-2014: Application of Republic Act No. 10378

Related Discussion o RA No. 10378: Income Tax Exemption to International Carriers

6. BIR ITAD Ruling No. 126-2014: Dividends paid by a domestic corporation to a

Dutch Cooperative; Application of the Philippine-Netherlands Tax Treaty


1. CIR vs. Penn Philippines, Inc., CTA EB Case No. 1002, 12 February 2014: Reiterates that the (15)-day period of application for tax treaty relief under RMO No. 1-2000 as a requirement to enjoy the benefits of a tax treaty is unnecessary

IV. Documentary Stamp Tax

A. Bureau of Internal Revenue 1. RMC No. 46-2014: Clarifying the taxability of Financial Lease for purposes of

Documentary Stamp Tax (DST)


1. E.E. Black Ltd. Philippine Branch vs. CIR, CTA Case No. 8526, 10 April 2010: General rule that a foreign corporation is the same juridical entity as its branch office in the Philippines cannot apply here for purposes of imposing the DST



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C. Supreme Court

1. The Hongkong and Shanghai Banking Corporation Limited Philippine Branches vs. CIR, G.R. Nos. 166018 and 167728, 4 June 2014: Electronic messages are not within the purview of the law on DST

2. CIR vs. Pilipinas Shell Petroleum Corporation, G.R. No. 192398, 29

September 2014: Transfer of real properties by reason of merger/consolidation is not subject to DST

V. Procedures


1. RR No. 3-2014: Amending Section 10 of RR No. 10-2010 "Exchange of Information" Regulations

Related Discussion o RR No. 10-2010: Exchange of Information regulations

2. RR No. 5-2014: Amending RR No. 17-2013 dealing with the "Preservation of

Books of Accounts and Other Accounting Records"

Related Discussion o RR No. 17-2013: Preservation of Books of Accounts and Other

Accounting Records

3. RMO No. 9-2014: Requests for Rulings with the Law and Legislative Division

Related Discussion o BIR Ruling No. 161-2014 o BIR Ruling No. 168-2014

B. Laws

1. RA No. 10641 Liberalization of Entry of Foreign Banks in the Philippines

VI. Others


1. RR No. 7-2014: Prescribing the Affixture of Internal Revenue Stamps on Imported and Locally Manufactured Cigarettes and the Use of IRSIS

Related Discussion o RR No. 8-2014: Amending the Provisions of Revenue Regulations

No. 7-2014, Specifically the Deadlines Prescribed Under Section 13 Thereof

o RR No. 9-2014: Further Amending the Provisions of Revenue Regulations No. 7-2014, Specifically the Deadlines Prescribed Under Section 13 Thereof

2. RMC No. 35-2014: Circularizing Relevant Portions of HUDCC Resolution No.

1, Adjusting the Price Ceiling for Socialized Housing



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Related Discussion o RMC No. 36-2014: Clarifying the Price Ceiling of Socialized Lot

Pursuant to RR 11-97, RR 17-01 and HUDCC Resolution No. 01, Series of 2013

3. RMC No. 50-2014: Reiteration and Clarification on the Requirement of

Issuance of Withdrawal Certificate for Every Removal of Petroleum or Petroleum Products


1. Taxability of all importations of PALs commissary and catering supplies

Philippine Airlines, Inc. vs. CIR, CTA Case No. 8361, 26 March 2014 Philippine Airlines, Inc. vs. CIR, CTA Case No. 8310, 14 November

2014

2. Unimaster Conglomeration Inc. vs. Tacloban City Government, et. al., CTA EB Case No. 901, 22 August 2014: Taxable entity having beneficial use of the real property is liable for real property tax pursuant to Section 234 (a) of the Local Government Code

VII. Bureau of Customs


1. RMC No. 22-2014: Publishing the Full Text of Department of Finance (DOF) Order No. 018-2014 with Respect to the Rules on Accreditation of Importers and Customs Brokers

2. RMO No. 10-2014: Policies, Guidelines and Procedure in the Accreditation of

Importers and Customs Brokers and the Revocation Thereof

3. RMO No. 22-2014: Supplemental Guidelines, Policies and Procedures in the Accreditation of Importers and Customs Brokers as Embodied in RMO No. 10-2014

4. RMO No. 33-2014: Amending the Policies, Guidelines and Procedures in the

Issuance of Importer's Clearance Certificate and Customs Broker's Clearance Certificate Relative to Accreditation as Importer/Customs Broker

B. Bureau of Customs

1. DOF Department Order No. 107-2014 - Customs Accreditation for PEZA

Locators VIII. Tax Compliance


1. RR No. 1-2014: Amending the Provisions of Revenue Regulations No. 2-98, as further amended by RR No. I 0-2008, Specifically on the Submission of Alphabetical List of Employees/Payees of Income Payments



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Related Discussion o RMC No. 5-2014: Clarifying the Provisions of RR No. 1-2014

Pertaining to the Submission of Alphabetical List of Employees/Payees of Income Payments

o PSE, BAP, et. al. vs. Secretary of Finance, CIR, and Chairperson of the Securities and Exchange Commission, G.R. No. 213860, 9 September 2014

2. RR No. 2-2014: New Income Tax Forms

Related Discussion o RR No. 6-2014: Prescribing the use of eBIR Forms o RMC No. 38-2014: Payment of Internal Revenue Taxes through

the BIRs Interactive Filing System-Authorized Agent Banks (IAFS-AAB)

3. RR No. 10-2014: Amending Further Section 3 of R) No. 9-2001, as amended,

Expanding the Coverage of Taxpayers Required to File Returns and Pay Taxes through the Electronic Filing and Payment System (eFPS)

4. RR No. 4-2014: Guidelines and Policies for the Monitoring of Service fees of

Professionals

Related Discussion o RMC No. 32-2014: Extending the Period for Submission of the

Required Affidavit and Official Appointment Books Under Section 3 of RR No. 4-2014

5. RMC No. 2-2014: Clarification on the Issuance of Official Receipt as required

by Government Auditors

6. RMC No. 7-2014: Clarifying the Issues on the Registration and Compliance Requirements of Marginal Income Earners Pursuant to RR No. 7-2012

Related Discussion: o RR No. 7-2012

7. RMC No. 45-2014: Prescribing the Use of the Enhanced and Integrated

Electronic Accreditation and Registration (eAccReg) and Electronic Sales Reporting (eSales) Systems

Related Discussion o RMC No. 49-2014: Extending the Deadline for eSALES Reports as

Transitory Procedure Using the eAccReg and eSALES Systems Pursuant to RMC 45-2014

o RMC No. 56-2014: Extending the Deadline for Submission of Sales Reports for May and June via eAccReg and eSales Systems



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IX. Assessment


1. RMC No. 11-2014: Clarifying Certain Issues Relative to Due Process Requirement in the lssuance of a Deficiency Tax Assessment Pursuant to Revenue Regulations (RR) 12-99, as amended by RR No. 18-2013

Related Discussion o RR No. 12-1999 o RR No. 18-2013

2. RMC No. 34-2014: Clarification Regarding Doubtful Validity of Assessment

Relative to its Application to the Provisions of RR 30-2002

3. RMC No. 61-2014: Revocation of BIR Ruling No. DA (OSL-A1) 001-2008 dated October 17, 2008

4. RMO No. 16-2014: Reiterating and Prescribing Certain Policies Relative to the

VAT Audit Program

Related Discussion o RMO No. 19-2012: VAT Audit Program for LTS o RMO No. 20-2012: 2012 VAT Audit Program


1. SVI Information Services Corporation vs. CIR, CTA Case No. 8496, 10

February 2014: Procedural due process in the issuance of the assessment was not accorded in the absence of proof of actual receipt of a PAN

2. Fabtech Export Industries, Inc. vs. CIR, CTA Case No. 8435, 18 February

2014: Absence of PAN renders nugatory any assessment made by the tax authorities

3. South Entertainment Gallery Inc. vs. CIR, CTA Case No. 8257, 9 July 2014:

Requirement of due process that the taxpayer must actually receive the assessment

4. CIR vs. Fitness by Design Inc., CTA EB Case No. 970, 14 July 2014: Due date

in the assessment notices were left blank hence void assessment

5. Global Metal Tech Corporation vs. CIR, CTA Case No. 8329, 23 September 2014: Issuance of Final Assessment Notice (FAN) within the 15-day period to file protest is not a violation of due process

6. CIR vs. Ajinomoto Philippines Corporation, CTA EB Case No. 1010 & 1015, 3

November 2014: Requisites for a valid waiver

7. ESS Manufacturing Company, Inc. vs. CIR, CTA Case No. 7958, 14 February 2014: Falsity in the return must be shown to have been made with intent to mislead or culpable negligence in order that the 10-year prescriptive period to apply



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8. East Asia Power Resources Corp. vs. CIR, CTA Case No. 8182, 15 January 2014: Imposition of compromise penalty without conformity of the taxpayer is illegal and unauthorized; assessment must be based on actual facts

9. 3M Philippines, Inc. vs. CIR, CTA Case No. 8147, 22 October 2014: Recovery

of erroneously paid taxes X. Refunds


1. RMC No. 54-2014: Clarifying Issues Relative to the Application for VAT Refund/Credit under Section 112 of the Tax Code, as amended

2. RMC No. 70-2014: Clarifying the Requirements for the Issuance of

Certifications on Outstanding Tax Liabilities/Delinquency Verification Slips for Purposes of Processing Claims for Tax Refund, Cash Conversion of TCCs and VAT Monetization under EO 68 and 68-A

3. RMC No. 70-2014: Clarifying Certain Requirements on the Processing of

Applications for Cash Conversion of Tax Credit Certificates

4. RMC No. 82-2014: Publishing the full text of Joint Circular No. 002.2014 of the DOF, DBM, BOC and BIR, Providing for the Establishment of a Mechanism for Qualified VAT-Registered Persons to Receive the Cash Equivalent of their Outstanding VAT Tax Credit Certificates.


1. CIR vs. CE Casecnan Water and Energy Company Inc., CTA EB Case No.

1072, 28 April 2014: Meaning of complete documents under Section 112 of the Tax Code

2. Supreme Court

1. CIR vs. Pilipinas Shell Petroleum Corporation, G.R. No. 188497, 19 February

2014: Local manufacturers/sellers as the statutory taxpayer who is directly liable to pay the excise tax on its petroleum products, is entitled to a refund or credit of the excise taxes it paid for petroleum products sold to international carriers, the latter having been granted exemption from the payment of said excise tax under Sec. 135 (a) of the Tax Code

2. CIR vs. Mindanao II Geothermal Partnership, G.R. No. 191498, 15 January

2014: Clarification of the two-year prescriptive period for filing an application for refund or credit of unutilized input VAT

Related Discussion o Procter & Gamble Asia Pte Ltd vs. CIR, G.R. No. 202071, 19

February 2014



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XI. Corporate Updates

A. Supreme Court

1. Narra Nickel Mining and Devt. Corp. et al vs. Redmont Consolidated Mines Corp., G.R. No. 195580, 21 April 2014: Nationality of Corporations; control test and grandfather rule

B. Securities and Exchange Commission (SEC)

1. SEC Memorandum Circular No. 21, Series of 2013: Guidelines and Procedures on the Use of Corporate and Partnership Names

2. SEC Memorandum Circular No. 8, series of 2014: Guidelines to non-bank

financial institutions (NBFIs) that are covered by Foreign Account Tax Compliance Act (FATCA) regulations

3. SEC Memorandum Circular No. 10, Series of 2014: Guidelines and directives

to assist issuers of securities listed and traded in the PSE in complying with the requirements of BIR Revenue Regulations No. 1-2014

4. SEC Memorandum Circular No. 16, series of 2014: Change of principal office

address

5. SEC OGC Opinion No. 13-10, 25 October 2013: Notice of Stockholders/ Directors/Members Meeting through E-mail

6. SEC OGC Opinion No. 14-13 dated 11 June 2014: Reversal of APIC and

Reinvestment as Capital or as Loan

7. SEC OGC Opinion No. 14-16 dated 7 July 2014: SEC Previous Opinion, applicability

8. SEC OGC Opinion No. 14-22 dated 08 August 2014: Legal Effects of

Revocation