Client Advisory Letter (February 2007)

In this issue:

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"Accrual", per Supreme Court
For both non-accountants and accountants, there is a high propensity to use the term “accrual” loosely. That there is a technical definition of the term “accrual“ is one thing. How this definition is interpreted is another.

BIR

Revenue Regulations (RR)

• Expanded OTAP
• Income Tax Filing/e-Filing/Payment/e-Payment deadline

• 15% reduction of premium on stock subscriptions not part of compensation income
• Retroactive application of rulings

• Insurance premiums as deductible business expense
• Event organiser subject to 2% withholding tax (WHT) on income
• PEZA sale to customs territory deemed technical importation by buyer
• 0% VAT on sale of vessels to non-resident foreign buyers
• Extension of filing date of estate tax return
• Income tax liability of petroleum service contractors governed by PD 87
• Transfer of real properties as liquidating dividends non-taxable
• Re-Conveyance of real property due to rescission of a contract is not a taxable event
• Transfer of land/common areas to Condominium Corporation (CC) tax-exempt

• Procedure foreclosure of real estate mortgages?
• Is a Permanent Establishment (PE) of a non-resident foreign corporation covered by expanded WHT?
• A savings passbook cum certificate of deposit subject to DST

• Valid assessment as long as nature of taxes indicated
• Sales of finished goods by PEZA company to its employees vatable
• PEZA Co.' sale of motor vehicle to its employees vatable
• Trade discounts, freight and handling charges and FBT are deductible from PEZA gross revenue

• Promulgating the Seventh Regular Foreign Investment Negative List (FINL)

• Electronic Money Laundering Monitoring System

• Electronic Import Permit System (IPS) in Cebu and Mactan Ecozones
• Locators asked to submit power data

• e-Customs Value Added Service Providers (VASPs) accreditation

• Exemptive Relief Fee

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