InTax: December 2018 Issue 1 | Vol. 1
InTax: December 2018 Issue 1 | Vol. 1
InTAX is an official publication of Tax Group of R.G. Manabat & Co.
DEPARTMENT OF FINANCE
The Department of Finance (DoF) issued the following:
Revenue Regulations (RR) No. 22-2018, 29 June 2018, which further amends Section 10 of RR No. 10-2010 or the “Exchange of Information Regulations”, as previously amended by RR No. 10-2018, relative to “Notice to Taxpayers”.
Pursuant to RR No. 22-2018, a taxpayer shall be duly notified in writing by the Commissioner of Internal Revenue that a foreign tax authority is requesting for exchange of information held by financial institutions pursuant to an international convention or agreement on tax matters:
1. Within sixty (60) days following the transmittal of all information requested from, and provided for by, the concerned financial institution to the requesting treaty partner; or
2. In cases where notification is likely to undermine the chance of success of the investigation conducted by the requesting jurisdiction, and the requesting jurisdiction has made substantiated request for a deferment of the notification based on these grounds, notice to the taxpayer must only be given after receipt of communication from the requesting jurisdiction that the investigation has already attained finality.
(RGM&Co. Note: RR 22-2018 was published in Malaya on 19 October 2018)
RR No. 24-2018, 28 November 2018, to further amend Section 9 of RR No. 25-2003, as previously amended by Section 4 of RR No. 05-2018, relative to the determination by the Department of Energy whether the automobiles subject to excise tax exemption are hybrid or purely electric vehicles pursuant to the provisions of the TRAIN Law.
Section 9(E) of RR No. 25-2003 provides that purely electric vehicles shall be exempt from excise tax on automobiles while hybrid vehicles shall be subject to 50% of the applicable tax rates on automobiles. However, prior to the removal of the automobiles from the manufacturing plant or customs custody, the Commissioner of Internal Revenue shall require the motor vehicle manufacturer/assembler/importer to present or submit the Certificate of Conformity (COC) issued by the Department of Environment and Natural Resources (DENR) - Environment Management Bureau (EMB) containing the information on the vehicle’s model and other technical specification or information including the corresponding classification on fuel feed to ascertain whether the vehicle is a hybrid electric vehicle (HEV).
In case the subject of the application for COC is a purely electric vehicle (EV), the manufacturer/assembler/importer shall present to the Excise Large Taxpayer Regulatory Division (ELTRD) a Certificate of Non-Coverage (CONC), instead of COC, stating that the vehicle applied is a purely electric vehicle (EV) and has no tailpipe emission and therefore not covered by the Republic Act (RA) No. 8749 (Philippine Clean Air Act).
The Bureau of Internal Revenue (BIR) shall determine whether the EV or HEV is exempt from excise tax or subject to 50% excise tax, respectively, based on the CONC or COC presented. To validate its authenticity, the DENR-EMB should provide the BIR a certified true copy of the COC and CONC issued to the manufacturer/assembler/importer for new locally manufactured or imported HEV or EV.
(RGM&Co. Note: RR 24-2018 was published in Manila Bulletin on 30 November 2018)
BUREAU OF INTERNAL REVENUE
The BIR issued the following:
Revenue Memorandum Order (RMO) No. 48-2018, 24 October 2018, to authorize the use of a Tax Verification Notice (TVN) instead of a Letter of Authority, in the verification of claims for tax refund of Job Order personnel and claims arising from erroneous/double payment of taxes, which can be considered as simple cases that will not require an in-depth audit/investigation.
The verification of the following cases shall be covered by a TVN regardless of amount:
a. Estate tax cases provided the taxpayer/decedent has no other tax liabilities
b. Claims for tax refund -
i. VAT refund pursuant to Section 112 of the Tax Code, as amended
ii. Claims of Job Order personnel
iii. Claims arising from erroneous/double payment of taxes, including double payment of taxes due to error/glitch
The TVN shall be manually issued until such time that the Tax Verification Notice System is in place and shall be signed by the Head of Office authorized to process the estate tax return/claim for tax refund.
RMO No. 49-2018, 29 October 2018, authorizing the revenue collection officer (RCO) to accept tax payments pertaining to One Time Transaction (ONETT) of taxpayers availing the fast lane in view of the passage of the “Ease of Doing Business” Law.
With the passage of RA No. 11032, otherwise known as the “Ease of Doing Business and Efficient Government Service Delivery Act of 2018”, certain policies in the delivery of BIR’s frontline services had to be amended. Hence, under RMO No. 49-2018, RCOs assigned in each Revenue District Office (RDO) who are authorized to accept tax payments during tax deadlines shall, in addition to such, be allowed to accept tax payments relative to ONETTs such as payment of capital gains tax, documentary stamp tax, donor’s tax, estate tax, and other ONETT-related taxes. However, for ONETT-related taxes above twenty thousand pesos (Php20,000.00), the RCO shall only accept “Manager’s or Cashier’s Check” as payment.
Revenue Memorandum Circular (RMC) No. 85-2018, 01 October 2018, deals with the issue regarding the multiple transactions involving only one (1) title in transferring real properties with the Land Registration Authority.
• For a taxpayer who submitted an Extra-Judicial Settlement with Sale or Extra-Judicial Settlement with Waiver of Rights, two (2) electronic Certificate Authorizing Registrations (eCARs) will be issued, one for settlement of the estate and one for transfer thru sale or donation. The Revenue Officer assigned in the ONETT Team must advise the taxpayer to present the two (2) eCAR simultaneously to Registry of Deeds (RD), since the presentation of only one (1) eCAR will invalidate the second eCAR.
• For a taxpayer who submitted two (2) separate documents, such as Extra-Judicial Settlement and Deed of Absolute Sale or Deed of Donation, two (2) eCARs must be issued. The first is for estate settlement to be presented to RD for the issuance of new Title. The new Title number that will be issued on settlement of estate shall be the basis for the issuance of another eCAR for the second transaction.
RMC No. 91-2018, 25 October 2018, to address the issues encountered by Microfinance Non-Government Organizations (MF-NGOs) accredited by the Microfinance NGO-Regulatory Council (MNRC) in facilitating the Taxpayer’s Identification Number (TIN) applications of their clients pursuant to Section III(7) of RMO No. 02-2018.
Under the RMC, MF-NGOs may facilitate the TIN issuance on behalf of their clients by using the BIR eRegistration (eREG) System as Third Party Users. MF-NGOs are required to submit their application for system access to the Client Support Service.
Only MF-NGOs accredited by MNRC shall be granted eREG System access. Only one user per MF-NGOs shall be authorized in accessing the eREG System and access shall be automatically revoked by the BIR upon revocation or expiration of the MF-NGO’s MNRC accreditation.
MF-NGOs shall be responsible for the correctness of all the information being provided in the eREG System. They shall require their clients to provide the requested basic information in the RMC accompanied by a valid government issued ID, birth certificate or Community Tax Certificate indicating the correct date of birth.
The following clients will be required to apply for manual registration at their concerned RDO with jurisdiction over their address/business address:
1. Clients existing TIN;
2. Clients with similar record in the BIR database and/or without Middle Name;
3. Clients who are engaged in business and were granted a loan amounting to Fiftly Thousand Pesos (P50,000) and above.
RMC No. 92-2018, 31 October 2018, to clarify the forms to be used by the duly registered and accredited MF-NGOs in filing and payment of the two percent (2%) tax, based on its gross receipts from microfinance operations in lieu of all national taxes.
A. Accredited MF-NGOs, whose operation is purely microfinance.
|Source Income||Type of Tax||Tax Rate||Forms||Frequency|
|Purely microfinance||Income Tax||2%||1702Q||Quarterly Annually|
|Business Tax||Not applicable. The 2% tax on its gross receipts from microfinance operations is in lieu of all national taxes.|
B. Accredited MF-NGOs with income from non-microfinance activities:
|Source of Income||Type of Tax||Tax Rate||Taxable Base||Forms||Frequency|
|Purely microfinance operations||Income Tax||2%||Gross Receipts||
|All non-microfinance activities or all other income not generated from microfinance operations||
|30% or 2% MCIT whichever is higher||
|Business TaxNon-VAT registered Percentage Tax||
Gross sales or receipts
Gross sales or receipts
Accredited MF-NGOs with income from purely microfinance operations shall use the Alphanumeric Tax Code (ATC)-IC210 in manual filing of income tax returns. In case the accredited MF-NGOs is enrolled in the Electronic Filing and Payment System (eFPS) or using eBIRForms facility in filing the required income tax returns, the ATC-IC011 shall be used pending enhancement of the income tax return forms in the eBIRForms/eFPS.
SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission (SEC) issued Memorandum Circular (MC) No. 17 Series of 2018 on 27 November 2018. All SEC-registered corporations are required to disclose their beneficial owners, which pertain to natural persons who (1) ultimately own or control the corporation, or (2) have ultimate effective control over the corporation. The General Information Sheet (GIS) is thus revised to include the required declarations on the said beneficial owners. If the corporation is owned through multiple layers, these intermediate layers should also be fully identified, declared in the GIS, and illustrated in an ownership chart to be attached to the GIS.
The requirement on disclosure of beneficial ownership shall be complied with beginning 01 January 2019.
Attached are the full text of the issuances.
DISCLAIMER: The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although R.G. Manabat & Co. endeavors to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
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