Client Advisory Letter (January 2007)

Download January 2007 issue (215 KBytes, 8 pages)

When once is not enough
When does the isolated transaction argument work for VAT?

The isolated transaction argument is tempting to use , specially when one is looking for a way to avoid value-added tax liability. It is tempting because VAT is imposed on sales in course of trade or business, and business connotes regularity. A transaction that happens only once definitely lacks regularity. It seems logical to label that transaction as not in the course of business where VAT should not apply.

BIR

Revenue Regulations (RR)

• 70% cap on input tax deleted
• VAT computation on the sales to senior citizens clarified

• IVAP guidelines
• Allowing acceptance of offers of tax payment
• Tax mapping operations on properties for rent/lease
• Abatement of penalties/surcharges and interest guidelines (Implementing RR 13-2001 and 15-2006)
• Extension of IVAP and OTAP availments

• A wholly-owned subsidiary of a publicly-held corporation is a publicly-held corporation itself exempt from the IAET
• Joint Venture Agreement (JVA) for construction projects not taxable
• Tax treatment of disposition of real properties not used in trade or business
• Ascertained worthless debts may be charged off
• No income tax on transfer of ownership interests in companies of common parent company involving no effective transfer of beneficial ownership
• Creditable Withholding Tax (CWT) exemption of PEZA enterprise applicable to income derived from PEZA-registered activity

• Transfer of shares due to a decrease in authorised capital stock is a nontaxable event
• Tax treaty relief on the salaries and/or other emoluments of a German resident teacher Sale of Philippine shares by foreign company subject to capital gains tax
• VAT and other tax exemption under International Agreement

• Availment of the Centennial Taxpayer Recognition Program (CTRP)

• VAT destination principle reversed?

• Interest penalty on DST

• An act to direct the use of biofuels, establishing for this purpose the biofuel program, appropriating funds therefore, and for other purposes

• John Hay proclaimed as a Special Tourism Economic Zone
• Requirement for additional annotation on Transfer Certificates of Title (TCT)

• Proposed Memorandum of Agreement (MOA) between BOI and BIR

• Timing of booking or real an other properties acquired (ROPA)

• Guidelines on the use of untitled lands

Download January 2007 issue