Special InTAX: December 2024 Issue 1 | Volume 3

Department of Finance

The Department of Finance (DoF) issued Revenue Regulations (RR) No. 018-2024, dated 17 December 2024, implementing Section 32(B)(5) of the National Internal Revenue Code of 1997, as amended (Tax Code) on income exempt under treaty which is treated as exclusion from gross income.

Pursuant to the amendments introduced in Section 32(B)(5) of the Tax Code under Republic Act No. 12066, or the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act, those income exempt from income tax to the extent required by any treaty obligation binding upon the Government of the Philippines, or his/her authorized representative(s) shall now include agreements entered into by the President, or his/her authorized representative(s), with economies and administrative regions, and duly concurred in by at least two-thirds of all members of the Senate. Nothing in these RR shall be construed as recognizing the statehood of such economies and administrative regions, and derogating from whatever policy that the Philippines has agreed to adopt and implement.

RR No. 18-2024 further provides that the President or his/her authorized representative(s) shall only negotiate with “economies” and “administrative regions” (both terms defined in this RR) contained in the list provided by Department of Foreign Affairs (DFA) which shall be regularly updated and/or communicated by the DFA to the Department of Finance (DOF) and the BIR as the former deems necessary. The indicative list is attached as Annex A of RR No. 18-2024.

Bureau of Internal Revenue

The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Order (RMO) No. 051-2024, dated 12 December 2024, suspending all field audits and related field operations by the BIR about the examination and verification of taxpayers’ books old accounts, records, and other transactions from 16 December 2024 to 12 January 2025.

During the suspension period, the issuance of written orders to audit or investigate taxpayers’ internal revenue tax liabilities will be on hold, except in the following specific scenarios:

1. Investigation of cases prescribing on or before 15 April 2024.
2. Cases involving tax evasion
3. Processing and verifying estate tax returns, donor’s tax returns, capital gains tax returns, and withholding tax returns concerning the sale of real properties or shares of stock, along with associated documentary stamp tax returns.
4. Examinations and/or verification of internal revenue tax liabilities for taxpayers retiring from business.
5. Monitoring of privilege stores (tiangge)
6. Other matters or concerns subject to specific deadlines.

As the BIR emphasized that efforts toward maximizing revenue collection should be sustained throughout the year, the issuance of Assessment Notices, Warrants, and Seizure Notices shall continue as necessary. Taxpayers can also voluntarily pay their known deficiency taxes without requiring approvals from Revenue Officials.

Here are the links to the full text of the issuances: RR No. 18-2024, RR No. 18-2024 Annex A, and RMO No. 51-2024.