InTAX October 2016 Issue 10 Vol. 1

InTAX is an official publication of Tax Group of R.G. Manabat & Co.

Bureau of Internal Revenue

The Bureau of Internal Revenue (BIR) issued the following:

Revenue Memorandum Circular (RMC) No. 93-2016, 02 September 2016, streamlines the business registration process and documentary requirements by further amending the list of documentary requirements for the registration of each type of application under “Annex A” of Revenue Regulations (RR) No. 7-2012, 02 April 2012, as clarified under RMC No. 70-2013, 12 November 2013, and RMC No. 37-2016, 22 March 2016.

RMC No. 93-2016 provides for the revised checklist of documentary requirements for primary and secondary registration with the BIR. The revised checklist per registration type, is found in Annexes “A1-A11” of the RMC. The revised checklist also includes an acknowledgment to be accomplished by applicants, on the identified lacking documents, with an undertaking to submit the same within five (5) working days.

The RMC also provides for the steps in the registration of business with the BIR, which are as follows:

Step	Process
1	Apply for Registration [with complete documentary requirements]
2	Pay Annual Registration Fee [thru Mobile Revenue Collection Officers Systems (mRCOs), Authorized Agent Banks, Revenue Collection Officer or GCash]
3	Get Certificate of Registration with auto-approved Authority to Print (ATP) for initial principal receipts/invoices

Note that the auto-approved ATP for initial receipts/invoices is only applicable to newly registered business taxpayers. However, subsequent application for receipts/invoices shall be processed in accordance with the procedures specified under existing issuances.

Revenue Memorandum Order (RMO) No. 55-2016, 02 September 2016, amends certain provisions of RMO No. 15-2003, 05 May 2003, relative to the processing of Electronic Certificate Authorizing Registration (eCAR) and its signatories.

Pursuant to their new role as co-head of their respective Revenue District Office’s One-Time Transaction (ONETT) team, Assistant Revenue District Officers (ARDOs) are now authorized, along with Revenue District Officers (RDOs), to sign eCARs. The authority of ARDOs and RDOs to sign eCARs shall depend on the threshold amounts per revenue region as provided in the RMO. However, in cases where either of the signatories is absent, either the RDO or the ARDO may sign an eCAR for expedient taxpayer service.

Further, eCARs shall now have a validity period of three (3) years, reckoned from the date of issuance for purposes of presenting the same to the Registry of Deeds.

RMO No. 56-2016, 31 August 2016, amends the policies, guidelines and procedures in the application and processing of the BIR Importers Clearance Certificate (ICC) and Brokers Clearance Certificate (BCC).

The RMO provides for the revised documentary requirements to be submitted by applicants for the issuance of ICCs or BCCs, as well as the person/s authorized to accomplish the said application on behalf of the respective applicant.

Importers/brokers whose ICCs or BCCs have been revoked, may re-apply, provided that the circumstances which led to the revocation are no longer existing.

RMO No. 57-2016, 31 August 2016, orders all concerned revenues officials to submit to the Commissioner of Internal Revenue all outstanding Letters of Authority (LA) for which no Preliminary Assessments/Final Assessments have been issued or no cases have been filed with the Department of Justice or the Courts as of 30 June 2016 for special revalidation. The special revalidation shall be covered by the issuance of a new LA under the name(s) of the investigating officer to whom the same is assigned/re-assigned.

This is in view of the policy of the BIR to strictly monitor existing tax investigations/audits and reporting on cases under the Run After Tax Evaders (RATE) Program.

Department of Finance / Department of Trade and Industry

The Department of Finance (DOF) and the Department of Trade and Industry (DTI) issued Joint Memorandum Circular (JMC) No. 01, Series of 2016, 01 September 2016, to clarify certain provisions of Joint Administrative Order (JAO) No. 01-2016 relating to the implementation of Republic Act (RA) No. 10708, otherwise known as the “Tax Incentives Management and Transparency Act (TIMTA)”

Under the JMC, the deadline for Registered Business Entities (RBEs) to submit their Annual Tax Incentives Report to the pertinent Investment Promotion Agency (IPA) is as follows:

Taxable Year	Deadline
2015	15 September 2016 to 15 November 2016
2016	For RBEs using the calendar year method - 15 May 2017. For RBEs using the fiscal year (FY) method: 1. For RBEs with FY ending 31 January 2016 to 31 July 2016 - 15 December 2016; and 2. For RBEs with FY ending 31 August 2016 to 30 November 2016 - within 30 days from the statutory deadline for filing of Final Adjustment Return for Income Tax, and payment of tax due thereon, if any.
2017	Within 30 days from the statutory deadline for filing of the Final Adjustment Return for Income Tax, and payment of tax due thereon, if any.

Philippine Economic Zone Authority

The Philippine Economic Zone Authority (PEZA) issued Memorandum Circular (MC) No. 2016-035, 30 September 2016, to advise PEZA-registered entities of the issuance by the DOF and DTI of JMC No. 01, Series of 2016.

The MC likewise urged all RBEs to refer to the Notes to the Annual Tax Incentives Report which provides the description of each column in order to avoid inaccurate reports. RBEs which have already submitted their 2015 reports are advised to review their reports based on the Notes to the Annual Tax Incentives Reports. RBEs which intend to amend their report may do so on or before 15 November 2016. The RBE should indicate “Amended” in the printed copy and soft copy.

Board of Investments

The Board of Investments (BOI) issued BOI Memorandum Circular (MC) No. 2016-004, Series of 2016, 13 September 2016, to provide supplemental guidelines to BOI-registered entities in their compliance to JAO No. 01-2016.

The salient portions of this MC are as follows:

1. Only RBEs availing of incentives are mandated to submit the Annual Tax Incentives Report;

2. The RBEs shall print the electronic copy and have it notarized. The RBEs are required to submit to the BOI both the notarized copy as well as the electronic copy stored in a CD of the Annual Tax Incentives Report. The CD shall be labeled as follows: Company Name, Registered Project, C.R. No.;

3. The Annual Tax Incentives Report shall be certified by any officer of the corporation accompanied by a Secretary’s Certificate reflecting that the said officer is authorized to represent the corporation.; and

4. All RBEs shall file their Notarized Annual Incentives report with either the Incentives Service (IS) of the BOI Central Office or the BOI Extension Office.

The MC shall take effect immediately following its publication in a newspaper of general circulation and filing of 3 copies with the Office of the National Administrative Register (ONAR).

(RGM&Co. Note: The MC was published on 21 September 2016 in the Philippine Star and the copies of the MC were filed with the ONAR on 23 September 2016. Thus, the MC took effect on 23 September 2016.)

Bangko Sentral ng Pilipinas

The Bangko Sentral ng Pilipinas (BSP) issued BSP Circular No. 925, Series of 2016, 13 September 2016, on the revision of the FX Manual pertaining to foreign investments registration with the BSP.

All applications for registration of foreign direct investments shall be filed with the BSP, through the International Operations Department (IOD), within one (1) year to be reckoned from the date of the inward remittance/actual transfer of assets to the Philippines.

Applications for registration of foreign direct investments which have not yet been filed with the BSP-IOD after the expiration of the prescriptive period for filing such applications may be filed with the BSP-IOD from 01 September 2016 up to 01 September 2017, subject to compliance with the registration requirements and payment of a fixed processing fee of Php10,000.00 per BSP Registration Document (BSRD) to be issued.

The Circular took effect on 15 September 2016.

Philippine Competition Commission

The Philippine Competition Commission (PCC) issued Clarificatory Note No. 16-002, 16 September 2016, to guide the public on the coverage of compulsory notification under the implementing rules and regulations of R.A. No. 10667.

Under the Clarificatory Note, internal restructuring within a group of companies is exempt from the notification requirement if the acquiring and acquired entities have the same ultimate parent entity. However, mergers or acquisitions are not considered as purely internal and, therefore, do not qualify for the exemption, if the restructuring leads to a change in control.

Bureau of Local Government Finance

The Bureau of Local Government Finance (BLGF) issued an opinion on 03 August 2016 that the Makati City Investment and Incentives Code of 2014 (Code) is in order.

The BLGF, however, added that to further improve on the other relevant provisions of the Code, the Office of the Sangguniang Panlungsod may be guided by the Guidelines on the Formulation of Local Investments and Incentives Code jointly issued by the Department of the Interior and Local Government (DILG) and the DTI under JMC No. 2011-01, s. 2011.

SUPREME COURT

The Supreme Court held in the case of Bloomberry Resorts and Hotels, Inc. v. Bureau of Internal Revenue, G.R. No. 212530, 10 August 2016, that the Philippine Gaming Corporation (PAGCOR) is not liable for income tax on its gaming revenue. PAGCOR shall continue to pay the five percent (5%) franchise tax imposed by its charter (Presidential Decree No. 1869). However, with respect to its income from related services, the same is subject to regular corporate income tax (RCIT) rate of thirty percent (30%) under the National Internal Revenue Code (NIRC), as amended.

The same rule applies to PAGCOR’s contractees and licensees, both of which shall remain subject to the 5% franchise tax on their gross gaming revenue. On the other hand, they are subject to the RCIT on their income from related services.

The Court further explained that RA No. 9337’s amendment of the NIRC did not operate as a repeal of the exemption enjoyed by PAGCOR and its licensees and contractees. This is because the income tax exemption of PAGCOR, as well as its licensees and contractees, with regard to their gaming revenue, stems from the PAGCOR charter.

InTAX October attachments

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