Special InTAX: April 2020 Issue 1 | Volume 2
InTAX is an official publication of R.G. Manabat & Co.'s Tax Group
InTAX is an official publication of R.G. Manabat & Co.'s Tax Group
Department of Finance (DOF)
The Department of Finance (DOF) issued the following:
Implementing Rules and Regulations (IRR) of Section 4 (aa) of Republic Act (RA) 11469, otherwise known as the “Bayanihan to Heal as One Act”, 1 April 2020, implementing the thirty (30) day minimum grace period for the payment of all loans.
The IRR provides that:
- All covered institutions (lenders, including but not limited to banks, quasi-banks, non-stock savings and loan associations, credit card issuers, pawnshops and other credit granting financial institutions under the supervision of the Bangko Sentral ng Pilipinas, the Securities and Exchange Commission and the Cooperative Development Authority, public or private, including the Government Service Insurance System, Social Security System and Home Development Mutual Fund (Pag-ibig Fund), shall implement a 30-day grace period for all loans with principal and/or interest falling due within the period of the Extended Community Quarantine (ECQ) without incurring interest on interest, penalties, fees and other charges.
- Loans shall refer to all loans, including multiple loans, extended by covered institutions to individuals, households, micro, small and medium enterprises, corporate borrowers and other counterparties with principal and/or interest falling due within the ECQ period.
- The 30-day period shall be automatically extended if the ECQ period is extended by the President under RA 11469.
- The accrued interest during the grace period may be paid by the borrower on a staggered basis over the remaining life of the loan, provided that the borrower may nonetheless opt to pay the accrued interest in full on a new date following the application of the grace period.
- All covered institutions are likewise prohibited from charging or applying interest during the ECQ period to future payments or amortizations.
- Covered institutions are prohibited from requiring their clients to sign waivers for the 30-day grace period and any waivers previously executed shall be void. However, this does not preclude the client from paying their loan obligations as they fall due if they desire.
- No Documentary Stamp Tax (DST) shall be imposed as a result of obtaining relief under the grace period, nor shall any DST be imposed on credit extensions, restructuring and micro-lending, including those obtained from pawnshops during the ECQ period.
The IRR shall take effect immediately upon its publication.
(RGM &Co.: The IRR was published in the Official Gazette on 01 April 2020).
Revenue Regulations (RR) No. 08-2020, 01 April 2020, implementing the provisions of Section 4(aa) RA No. 11469, otherwise known as the “Bayanihan to Heal as One Act”.
The RR provides that no additional DST, including that imposed under Section 179, 195 and 198 of the Tax Code, shall apply to credit extensions and credit restructuring and micro-lending, including those obtained from pawnshops and extensions thereof during the ECQ period.
The RR covers all extension of payments and/or maturity periods of all loans falling due within the ECQ period. It also covers the extension of maturity periods that may result from the grant of grace periods for these payments, whether or not such maturity periods originally fall within the ECQ period.
The regulation shall take effect upon its publication in the Official Gazette or in a newspaper of general circulation.
(RGM & Co. Note: The RR was published in Manila Bulletin on 03 April 2020).
Bureau of Internal Revenue
The Bureau of Internal Revenue (BIR) issued the following:
Tax Advisory, 30 March 2020, advising taxpayers to disregard the penalties computed via the eFPS facility and pay only the basic tax due, provided that the payment shall be made on or before the extended deadline. Any filing and/or payment beyond the stated deadline in Revenue Memorandum Circular (RMC) No. 30-2020 shall be subjected to the applicable penalties imposed/computed by the eFPS from the extended deadline until actually paid.
RMC NO. 35-2020, 02 April 2020, reiterates the exemption from DST, including DST imposed under Sections 179, 195 and 198 of the Tax Code, on credit extensions and credit restructuring and micro-lending, including those obtained from pawnshops and extensions thereof during the covered period for Relief of Loans pursuant to RR No. 08-2020.
Securities and Exchange Commission
The Securities and Exchange Commission (SEC) issued the following:
SEC Notice dated 02 April 2020, temporarily stops accepting requests for documents through online application and the call center facility under the SEC Express System during the ECQ, thereby removing the option as previously provided under SEC Memorandum Circular No. 7 Series of 2020.
Orders for authenticated and plain copies of corporate documents shall be processed and delivered once the state of public health emergency has been lifted or until further notice.
The SEC Express Appointment System and Public Kiosk will remain suspended until further notice.
SEC Notice dated 02 April 2020, extends the submission of the 2019 Annual Reports of all SEC-accredited Asset Valuers and Credit Rating Agencies until 30 June 2020. Concerned asset valuers and credit rating agencies that will file their 2019 Annual Report within the prescribed deadline of on or before 15 April 2020 may file the same through email at email@example.com.
SEC Notice dated 31 March 2020, suspends the daily and monthly monetary penalties (Cumulative Penalties) imposable on investment companies, registered issuers of proprietary and non-proprietary shares/timeshares, public companies, financing companies, lending companies, foundations, accredited microfinance NGOs, and publicly-listed companies under the supervision of the SEC Corporate Governance and Finance Department from 13 March 2020, until the ECQ Period is lifted by order of the President, subject to the following guidelines:
1. Covered Companies shall not accrue Cumulative Penalties starting 13 March 2020 until the ECQ has been lifted by order of the President
2. Cumulative Penalties shall continue to accrue upon the effectivity of the lifting of the ECQ by order of the President
3. The suspension of Cumulative Penalties shall automatically be applied without the need for a penalty suspension request from Covered Companies.
SEC Notice dated 30 March 2020, provides that while the SEC continues to accept online applications for the registration of corporations and partnerships through the CRS, the verification of payment and generation of the Certificate of Incorporation/ Certificate of Filing of Articles of Partnership may be made and released by the SEC Company Registration and Monitoring Department (CRMD) only after the ECQ has been lifted.
SEC Notice dated 30 March 2020, provides the procedures for the remote filing of monitoring clearance for amendments to the Articles of Incorporation and By-Laws, which shall be effective until the ECQ is lifted.
For applications for ordinary amendments:
(i.e. Change of Corporate Name, Business Purpose, Principal Office Address, Term of Existence, Number of Board of Directors/Trustees, Annual Meeting and Fiscal Year End):
Scan and upload copies of the complete requirements and send to firstname.lastname@example.org
For applications for Increase/Decrease of Capital Stock and Merger and Consolidation:
Scan and upload copies of the complete requirements and send to email@example.com
Correspondences of compliance or approval for payment of the Monitoring and Amendment applications shall be duly communicated through the email provided above.
A physical copy of the Monitoring Clearance/ Confirmation of Payment and Certificate of Amendments/ Increase/ Decrease of Capital shall be issued by the CRMD once the ECQ has been lifted.
Attached are the full texts of the issuances.
The materials contained in InTAX were compiled by R.G. Manabat & Co. from various sources. The subjects are discussed in brief/general terms and are intended to provide an overview of the recent and relevant developments relating to Philippine tax laws and various government regulations. This information is for guidance only and should not be regarded as a substitute for appropriate professional advice.
R.G. Manabat & Co. accepts no liability with regard to the information the firm has provided or any action that may be taken by readers of InTAX. The information contained herein is updated until the date of publication.
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