Philippines: Guidance regarding payment of penalties for violations of permitted scope of work-from-home arrangements
Certain registered business enterprises
Violations of permitted scope of work-from-home arrangements
The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 120-2022 to provide additional guidelines and procedures on the manner of payment of penalties for violations of the permitted scope of work-from-home (WFH) arrangements for registered business enterprises (RBEs) in the information technology-business process management (IT-BPM) sector, who are mostly Philippine Economic Zone Authority (PEZA)-registered enterprises (i.e., entities that are subject to the requirement of performing their registered activities within the ecozone), occurring between 1 April 2022 to 12 September 2022.
The Fiscal Incentives Review Board (FIRB) issued FIRB Resolution No. 19-2021 (2 August 2021) effectively allowing IT-BPM RBEs to adopt WFH arrangements for up to 90% of their total workforce until 31 March 2022.
The FIRB then issued FIRB Resolution No. 17-2022 (21 June 2022) allowing IT-BPM RBEs to adopt WFH arrangements not exceeding 30% of their total workforce from 1 April 2022 until 12 September 2022, without adversely affecting their income tax incentives under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
Subsequently, the FIRB issued FIRB Resolution No. 026-2022 (14 September 2022) further extending the effect of FIRB Resolution No. 17-2022 from 13 September 2022 to 31 December 2022. Read TaxNewsFlash
Read a December 2022 report prepared by the KPMG member firm in the Philippines
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