In this issue:
To fear or not to fear (A Tax Amnesty post mortem)
Even as I write, the BIR is issuing in all directions proposed assessments against taxpayers who availed of the amnesty (not to mention those who did not). The key to managing these assessments is to stick to the provisions of the amnesty law, regardless of BIR rules which are in excess of or inconsistent with the law. The amnesty should be respected if there is no under declaration in networth by 30%, and the tax cases are not subject of final and executory judgment by the courts. Moreover, only assessments in withholding taxes can be made by the BIR as these are the only taxes not covered by the amnesty.
The BIR’s reasons in attempting the assessment will vary, but the basic defense will remain the same – the protection provided by the amnesty law. The approach is not to accede, but to hold ground on valid availments. If this is the approach to defending the amnesty availment, what is the approach in defending tax planning schemes in general? It is the same with a plus. Same in being able to point to provisions of law that can protect the scheme, with the addition of proving legitimate commercial reasons as the driver for the transaction.
BIR
Revenue Memorandum Circular (RMC)
- Tax amnesty deadline extended
- Taxability of insurance companies for business tax, MCIT and DST purposes
- Scope of "Direct Costs and Expenses" in computing MCIT
- DST on certificates issued by educational institutions
- Clarifying the persons liable to stock transaction tax and creating tax collection to the appropriate BIR office
- Publishing RA 9490 or the Act establishing the Aurora Special Economic Zone (ASEZ)
Revenue Memorandum Orders (RMO)
- Taxpayers paying through online DSEIMs temporarily allowed to pay DST through CS/RS
- DST on government certificates to be paid through CS/RS
- Accreditation, incentives and penalties applicable to Authorized Agent banks (AABs)
Revenue Regulations (RR)
- Consolidated regulations prescribing the rules on the taxation of sale, barter, exchange or other disposition of shares of stock held as capital assets
Delegated Authority (DA) Rulings
- No tax on interest-free inter-corporated advances from shareholders or affiliates
- Marketing equipment distributed as promotional items are deductible expenses
- Tax implications of a discounted purchases of shares of stock under a Stock Option Plan (SOP)
- Tax implications of sale of real property treated as ordinary asset
- Royalties received by recording company subject to 35% corporate income tax, not 20% final tax
- Tax implications relating to non-profit educational institutions
Bangko Sentral ng Pilipinas (BSP)
- Additional regulatory relief under the "Paired warrants Program"
Bureau of Customs (BOC)
- Amending Customs Memorandum Order (CMO) No. 15-2005 on registration of importers
Securities and Exchange Commission (SEC)
- Partial return of capital through decrease in capital stock
Legislative Issuances
- Creation of Civil Aviation Authority of the Philippines (CAAP)
Supreme Court (SC)
- Requests for reinvestigation, unless granted by the Commissioner, will not suspend the running of the prescriptive period
Court of Tax Appeals (CTA)
- Non-submission of Tax Clearance Certificate fatal in a claim for refund of dissolving corporations
Meet Us
Knowledge Management Team
Download March-April 2008 issue 