Client Advisory Letter (March 2007)

In this issue:

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Invalid, but un-protested assessment: Who wins?
Tax assessments enjoy a presumption of validity. Once assessed, the taxpayer must protest, otherwise, the assessment becomes final and executory.

BIR

Bureau of Internal Revenue (BIR) Rulings

• Performance incentive award not considered as "de minimis" but as "other benefits"

• Deductible expenses for computing the 5% gross
• Excess of rehabilitation cost over acquisition cost may be capitalised income tax under the PEZA law
• Royalties capitalised as part of inventories are deductible from gross income
• No DST on assignment of promissory note without changing the maturity thereof
• Capital gains tax on installment sale based on zonal value at the time of the Contract to Sell
• MERALCO refund receipt by a tax-exempt entity nontaxable
• Tax Credit Certificates (TCCs) may be used to pay BPRT
• Government bidders must be EFPS-registered

• Bulk Sale by a private security agency is vatable
• Non-stock, non-profit religious corporation is not exempt from VAT

• PEZA and BIR MOA
• BIR and BOI/BOI-ARMM MOA
• Additional Attachments to the ITR
• Extension of OTAP and IVAP Availments

• Amendments to RR 16-2005, "Consolidated VAT Regulations of 2005"

• PAGCOR's exemption privilege includes VAT
• NPC contractor which pass realty tax (RT) liability to NPC, not exempt from RT
• Summaries/schedules of input VAT payments not sufficient to support input VAT refund claim

• Rules on the sale of LPG to the transport sector

• An Act Amending Republic Act (RA) No. 7227 otherwise known as The Bases Conversion and Development Act (BCDA) of 1992
• An Act Declaring a One-Time Tax Amnesty for Clark, John Hay, Morong and Poro Point SEZs

• On dissolution and liquidation

• Outdoor/billboard advertising is limited to 30% foreign equity

• International Assignment Solutions (IAS)

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