Contents: Tax Alert Special Edition BIR Issuances SEC ...

Tax Alert Special EditionJanuary 2020 to March 2020

Contents:

• BIR Issuances

• SEC Issuances

• DOLE Issuances

• Court Decisions

Bureau of Internal Revenue (BIR) Issuances

New Rules in Updating Employee Registration Information ........................................................................... 1 New Guidelines for the Audit of Cooperatives ............................................................................................... 1 New BIR Form for Quarterly ITR ................................................................................................................... 1 Extension of deadline for the submission of Sworn Declaration of Inventory ................................................. 2 Suspension of PTU CAS/CBA requirement ................................................................................................... 2 Extension of Period to Withdraw Protest/Appeal in order to Qualify for Tax Amnesty .................................... 2 New BIR Forms for the VAT/Other Percentage Tax Withheld ........................................................................ 3 New ITR Forms available to the new eBIRForms Package (Version 7.6) ...................................................... 4 Clarification in the use of old BIR Form Nos. 1604-CF and 1604-E ............................................................... 4 Extension of deadline for filing of VAT Refund............................................................................................... 4 Extension in filing of protest and appeal letter ............................................................................................... 5 Extension in filing of Certificate of Residence for Tax Treaty Relief (CORTT) Forms..................................... 5 Extension of Deadline to Avail of Tax Amnesty on Delinquencies (TAD) ....................................................... 5 Suspending the Running of the Statute of Limitations ................................................................................... 5 Extension of Statutory Deadlines and Timelines for the Filing and Submission of any Document and the Payment of Taxes ......................................................................................................................................... 6

Securities and Exchange Commission (SEC) Issuances

Notice of Regular Meetings of the Stockholders/Members .......................................................................... 12 Extension of Filing of the 2019 Annual Reports Including the Applicable Quarterly Reports for Year 2020 and 2019 Audited Financial Statements (AFS) .......................................................................................... 12 Guidelines on Conduct of Meetings via Remote Communication ................................................................ 13 Guidelines on Preventing Measures Against COVID-19 in the Handling of Records at the Securities and Exchange Commission ................................................................................................................................ 16 Guidelines for the filing of the GIS during the COVID-19 ECQ .................................................................... 16 Filing of GIS, AFS and Other Reports via Electronic Mail ............................................................................ 17

Contents

Department of Labor and Employment (DOLE) Issuancecs

Guidelines on availing Php 5,000 financial assistance from DOLE .............................................................. 19 Guidelines on 2019-nCoV Prevention and Control at the Workplace ........................................................... 20 Guidelines on the Implementation of flexible work arrangements as remedial measure due to the ongoing outbreak of Coronavirus Disease 2019 (COVID-19) .................................................................................... 20 Supplemental Guidelines on the Implementation of flexible work arrangements as remedial measure due to the ongoing outbreak of Coronavirus Disease 2019 (COVID-19)................................................................. 21

Court Decisions

LOA is Invalid due to Incorrect Signatory and FLD is Void Due to Blank Due Date ..................................... 23 Tax Assessment is Void due to the Premature issuance of FLD/FAN ......................................................... 24 Appeal to the FDDA does not Interrupt the Running of the 180-day Period ................................................. 24 Cancellation of the Assessment due to Failure to Establish Willful Understatement of Income .................... 25 Petition for Prohibition should be filed Sixty (60) days from the Receipt of Notices of Delinquency ............. 25 Unanimous Written Consent of the BOD is Considered as Ratification ....................................................... 26 Motion for Production of Documents is not a Re-audit ................................................................................. 27 A New Finding Presented in FDDA made the Assessment Void ................................................................. 27 Assessment is Void for being Issued Without a Valid Authority and the Violation of 15-day period to reply to PAN ............................................................................................................................................................ 28 Legal Interest is not subject to Final Withholding Tax .................................................................................. 29 PEZA/SBMA Registration Certificates as proof of valid zero-rating ............................................................. 31 Disallowed Zero-Rated Sales are not necessarily subject to 12% Output VAT ............................................ 31 Warrant of Garnishment is void in the absence of LOA/PAN/FLD ............................................................... 32

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New Rules in Updating Employee Registration Information (Revenue Regulation No. 01-2020, January 9, 2020)

This BIR issuance has amended the Section 2.79.1 of Revenue Regulation (RR) No. 2-1998, as amended by RR No. 11-2018. The new rule now requires the employee to submit the Application for Registration Information Update (BIR Form No. 1905) to the Revenue District Office (RDO) where he/she is registered, pursuant to the Revenue Memorandum Order No. 37-2019. Once filed with the respective RDO, a stamped received copy of the BIR Form No.1905 shall be furnished by the employee to his/her current employer. The employer shall then make the necessary adjustments on the withholding tax of the employee based on the new information.

New Guidelines for the Audit of Cooperatives (Revenue Memorandum Order No. 07-2020, February 10, 2020)

The BIR has issued audit guidelines in the audit/investigation of cooperatives for taxable year 2018 and onwards. Pursuant to this RMO, the BIR through the Commissioner or his duly authorized representative is no longer required to secure authorization from the Cooperative Development Authority (CDA) before the examination of the books of account and accounting records of a cooperative. This ensure the correctness of availment of tax exemptions or incentives and to effectively monitor tax compliance of cooperatives. In line with this, the BIR shall issue electronic Letter of Authority (eLAs) for the audit of cooperatives for the taxable year 2018 and onwards. Priority targets for audit includes:

1. Cooperatives which transact business with both members and non-members whose accumulated reserve and undivided net savings is more than Ten Million Pesos (PHP10 Million); and

2. Cooperatives with income not related to the main/principal business/es under their Articles of Cooperation, whether dealing purely with members or both members and non-members.

New BIR Form for Quarterly ITR (Revenue Memorandum Circular No. 3-2020, January 2, 2020) The new version of BIR Form No. 1702Q [Quarterly Income Tax Return for Corporations, Partnerships and Other Non-Individual Taxpayers] January 2018 (ENCS) is now available at the BIR website (www.bir.gov.ph) under the BIR Forms-Income Tax Return Section. However, the return is not yet available in the Electronic Filing and Payment System (eFPS) and Electronic Bureau of Internal Revenue Forms (eBIRForms). Once BIR Form No. 1702Q is available in the eFPS and eBIRForms a separate revenue issuance will be issued. In the meantime, eFPS/eBIRForms filers shall continue to use the existing BIR Form No. 1702Q in eFPS and in Offline eBIRForms Package v7.5 in filing and paying the income tax due thereon. Manual filers shall have a copy of the PDF version of the form and completely fill out the applicable fields. Payment of the tax due thereon, if any, shall be made thru:

a. Manual Payment • Authorized Agent Bank (AAB) located within the territorial jurisdiction of the Revenue District Office (RDO)

where the taxpayer is registered; or • In places where there are no AABs, the return shall be filed and the tax due shall be paid with the concerned

Revenue Collection Officer under the jurisdiction of the RDO using the Mobile Revenue Collection Officer System facility.

BIR Issuances

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b. Online Payment • Thru GCash Mobile Payment; • Landbank of the Philippines (LBP) Linkbiz Portal who have ATM account with LBP and/or holders of Bancnet

ATM/Debit Card; or • Development Bank of the Philippines Tax Online, for holders of VISA/Master Credit Card and/or Bancnet

ATM/Debit Card.

Extension of deadline for the submission of Sworn Declaration of Inventory (Revenue Memorandum Circular No. 6-2020, issued on January 22, 2020)

The submission of the Year-End Sworn Declaration of Inventories of Diesel, Gasoline and Kerosene by All Retail/Gasoline Stations nationwide to the Revenue District Offices (RDOs) was extended until January 31, 2020. In addition, the soft copies of the consolidated Sworn Declaration of Inventories shall be submitted to the Excise Large Taxpayers Field Operations Division on or before February 5, 2020 by all concerned Revenue District Offices (RDOs) using the email ([email protected]), copy furnished the Chief of Regional Investigation Division.

Suspension of PTU CAS/CBA requirement (Revenue Memorandum Circular No. 10-2020, February 6, 2020)

The BIR has suspended the issuance for Permit to Use (PTU) Computerized Accounting System (CAS), Computerized Books of Accounts (CBA) and/or Components thereof; hence, all taxpayers with pending applications for PTU which were filed with the National Accreditation Board (NAB) and were assigned to the Technical Working Group (TWG) of the BIR National Office for evaluation, will be allowed to use such CAS, CBA, and/or Components thereof, provided that the taxpayer has complied with the submission of the following documentary requirements:

• Sworn Statement attached as Annex “A” in the RMC

• Summary of System Description provided attached as Annex “A-1” in the RMC

• Sample print copy of system-generated Principal and Supplementary Receipts/Invoices

• Sample print copy of system-generated Books of Accounts The said documents should be submitted to the TWG Secretariat of the Revenue District Office (RDO) Office where the taxpayer is registered. An “Acknowledgement Certificate” with a Control Number shall be prepared and issued by the TWG Secretariat of the RDO within three (3) working days from the receipt of the abovementioned requirements. The Control Number should be reflected on the face of the system generated principal and/or supplementary receipts/invoices in order to authorize the use of such receipts/invoices. All CAS, CBA, and/or Components thereof shall be subject to post-evaluation by the BIR that may be done simultaneously with the audit of the books of accounts and other accounting records pursuant to a Letter of Authority (LOA). In case of any system changes that will result in the change of version number and/or systems release, the taxpayer should file a letter of notification with matrix showing the comparative changes of the old and new system to the TWG Secretariat of the RDO where the taxpayer is registered.

Extension of Period to Withdraw Protest/Appeal in order to Qualify for Tax Amnesty (Revenue Memorandum Circular No. 11-2020, February 7, 2020)

The BIR has issued amendments to Revenue Memorandum Circular No. 57 -2019 to further clarify and supplement the certain provisions of Revenue Regulation No. 04-2019 which implements the availment of Tax Amnesty on Delinquencies (TAD). This RMC can be summarized to three (3) main points. First, the period to withdraw the protest to Final Assessment Notice (FAN)/Final Letter of Demand (FLD) or appeal to Final Decision on Disputed Assessments (FDDA) in order for the tax assessment to be rendered delinquent and qualified for tax amnesty was extended up to April 23, 2020 instead of the previous deadline of April 24, 2019. The extension is available for the delinquent accounts pertaining to taxable year 2017 and prior years. In addition, the FAN/FLD or FDDA

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should have been received by the taxpayer at the latest on March 25, 2019 in order for it to be considered delinquent on or before April 24, 2019, the effectivity date of Revenue Regulation No. 04-2019. Second, the previous deadline of filing of Tax Amnesty Return with the complete documentary requirements on April 23, 2020 was extended for thirty (30) days for the taxpayers who have secured the Certificate of Tax Delinquencies/Tax Liabilities (CTDL) and endorsement of the Acceptance Payment Form (APF), but have paid the amnesty tax due on the last day of the availment period, April 23, 2020. Lastly, the RMC enumerated seven (7) instances wherein the protest to the FAN/FLD or appeal to the FDDA will be considered invalid, making the assessment final and executory and therefore delinquent:

1. The protest to FAN/FLD was filed beyond 30 days from receipt of the FAN/FLD; 2. The appeal to the FDDA was filed beyond 30 days from receipt of the FDDA; 3. The protest to FAN/FLD was not fled with the duly authorized representative of the Commissioner of Internal

Revenue (CIR) who signed the FAN/FLD; 4. The appeal to the FDDA (i.e. motion for reconsideration) was not filed with the office of CIR; 5. The protest/ appeal failed to state the applicable law, rules and regulations or jurisprudence on which it is

based; 6. The request for reinvestigation did not specify the newly discovered or additional evidence which the taxpayer

intends to present as required in a valid protest.

In the above instances, the FAN/FDDA should have been received before March 25, 2019 to be deemed final and executory by April 24, 2019. Note: Pursuant to RMC No. 33-2020, the deadline for the availment of TAD has been extended to May 23, 2020.

New BIR Forms for the VAT/Other Percentage Tax Withheld (Revenue Memorandum Circular No. 13-2020, February 7, 2020)

The following revised manual returns are already in the BIR website under BIR Forms payment/Remittance Forms Section:

• BIR Form No. 1600-VT – Monthly Remittance Return of Value Added Tax Withheld

• BIR Form No. 1600-PT – Monthly Remittance Return of Other Percentage Tax Withheld

However, the said returns are not yet available in eFPS/eBIRForms. Thus, eFPS/eBIRForms filers shall continue to use the existing BIR Form No. 1600 in the eFPS and in the Offline eBIRForms v.7.5 in filing their tax return until further notice through a revenue issuance. Manual filers shall use the PDF version of the form and fill-out the applicable fields, otherwise shall be subjected to penalties under Sec. 250 of Tax Code. Payment of the tax due thereon, if any, for manual and eBIRForms filers shall be made thru:

a. Manual Payment

• Authorized Agent Bank (AAB) located within the territorial jurisdiction of the Revenue District Office (RDO) where the taxpayer is registered; or

• In places where there are no AABs, the return shall be filed and the tax due shall be paid with the concerned Revenue Collection Officer under the jurisdiction of the RDO using the Mobile Revenue Collection Officer System facility.

b. Online Payment

• Thru GCash Mobile Payment;

• Landbank of the Philippines (LBP) Linkbiz Portal

• Development Bank of the Philippines Tax Online

• Union Bank Online Web and Mobile Payment Facility

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New ITR Forms available to the new eBIRForms Package (Version 7.6) (Revenue Memorandum Circular No. 16-2020, February 27, 2020)

The new Offline eBIRForms Package now includes the January 2018 (ENCS) version of the following forms:

• BIR Form No. 1700v2018 - Annual Income Tax Return for Individuals Earning Purely Compensation Income (Including Non-Business/Non-Profession Income)

• BIR Form No. 1702MXv2018 - Annual Income Tax Return for Corporation, Partnership and Other Non-Individual with Mixed Income Subject to Multiple Income Tax Rates or with income subject to Special/Preferential Rate

Furthermore, the field validation and automated computation on BIR Form No. 1701 Annual Income Tax Return for Individuals (including Mixed Income Earner), Estates and Trusts has been already implemented in the new Offline eBIRForms Package. Payment of the taxes due thereon, if any, shall be made thru:

a. Manual Payment • Authorized Agent Bank located within the territorial jurisdiction of the Revenue District Office (RDO) where

the taxpayer is registered; or • In places where there are no AABs, the return shall be filed and the tax due shall be paid with the

concerned Revenue Collection Officer under the jurisdiction of the RDO using the Mobile Revenue Collection Officer System facility.

b. Online Payment

• Thru GCash Mobile Payment; • Landbank of the Philippines (LBP) Link.biz Portal - for taxpayers who have ATM account with LBP and/or

holders of Bancnet ATM/Debit Card; • Development Bank of the Philippines Tax Online - for taxpayers who are holders of VISA/Master Credit

Card and/or Bancnet ATM/Debit Card; • Union Bank Online Web and Mobile Payment Facility - for taxpayers who have account with Union Bank;

or • PESONet through LPB Link.biz Portal – for taxpayers who have account with RCBC and Robinsons Bank.

The said eBIRForm is currently downloadable from www.bir.gov.ph and www.knowyourtaxes.ph.

Clarification in the use of old BIR Form Nos. 1604-CF and 1604-E (Revenue Memorandum Circulars No. 18-2020, February 28 2020)

The electronic formats of BIR Form Nos. 1604-C (Annual Information Return of lncome Payments Withheld on Compensation), 1604-F (Annual Information Return of Income Payments Subjected to Final Withholding Taxes) and 1604-E (Annual Information Return of Creditable Income Taxes Withheld (Expanded)/lncome Payments Exempt from Withholding Tax), including the Alphabetical list of Employees/Payees from whom taxes were withheld (Alphalists) are not yet available in the Electronic filing and Payment System (eFPS) and Electronic Bureau of Internal Revenue Forms (eBlRForms) as of this date due to some technical issues. To address this concern, the old BIR Form Nos. 1604-CF and 1604-E shall be used and their respective Alphalists shall be submitted through the existing Alphalist Data Entry and Validation Module Version 6.1 until further notice through issuance of an advisory. In case the enhanced version is already made available, the Alphalists that were already duly submitted using the old version of the data entry module need not be re-submitted using the enhanced version.

Extension of deadline for filing of VAT Refund (Revenue Memorandum Circular No. 27-2020, March 17, 2020)

Due to the Enhanced Community Quarantine (ECQ), the BIR extends the deadline of application for VAT refund and suspends the 90-day processing period for those claims that are currently being evaluated by processing offices. Filing of VAT refund application covering the quarter ending March 31 2018 can still be accepted until April 30, 2020. The 90-day period of processing VAT refund claims that are currently being evaluated by the processing offices and for those that may be received from March 16, 2020 to April 14, 2020 is suspended. The counting of the number of processing days shall resume after the ECQ is lifted.

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Extension in filing of protest and appeal letter (Revenue Memorandum Circular No. 31-2020, March 23, 2020)

In line with the suspension of work of the Executive Branch of government from March 17,2020 to April 13,2020 due to the Enhanced Community Quarantine (ECQ), the submission and/or filing of the following documents and correspondences are extended to thirty (30) days from the date of the lifting of the ECQ in Luzon:

• Letter Answer to Notice of Informal Conference (NIC); • Response to the Preliminary Assessment Notice (PAN); • Protest Letter to Final Assessment Notice (FAN)/Formal Letter of Demand (FLD); • Submission of relevant documents to support the request for re-investigation of audit cases with FAN/FLD; • Appeal/Request for Reconsideration to the Commissioner on the Final Decision of Disputed Assessment

(FDDA); and • Other similar letters and correspondences with due dates.

However, the extension only applies if the deadline to respond to the notices falls within the ECQ period. Moreover, if Local Government Units have also adopted and implemented the ECQ and other similar precautions, the extension shall apply to other jurisdictions.

Extension in filing of Certificate of Residence for Tax Treaty Relief (CORTT) Forms (Revenue Memorandum Circular No. 32-2020, March 23, 2020)

Pursuant to Revenue Memorandum Order (RMO) No. 8-2017, the filing of Certificate of Residence for Tax Treaty Relief (CORTT) Forms shall be done within thirty (30) days after the payment of the final withholding taxes due on dividend, interest and royalty. Applying the foregoing RMO, the filing of the corresponding CORTT Forms for final withholding taxes paid on the said types of income on or before March 10, 2020 should be made on or before April 13, 2020. However, in line with the Enhanced Community Quarantine (ECQ), the deadline for filing of CORTT Forms for final withholding taxes on dividends, interest and royalties paid on or before March 10, 2020 is extended until April 30, 2020, without the imposition of penalties.

Extension of Deadline to Avail of Tax Amnesty on Delinquencies (TAD) (Revenue Regulation No. 05-2020, March 16, 2020 & Revenue Memorandum Circular No. 33-2020, March 24, 2020)

The issuance of RR No. 5-2020 has amended Section 3 of RR No. 4-2019 stating that the deadline to avail TAD may be extended if the circumstances warrant an extension of such as in case of country-wide economic or health reason/s. In line with this, the BIR has also issued RMC No. 33-2020 to extend the deadline to avail of the TAD from April 23, 2020 to May 23, 2020.

Suspending the Running of the Statute of Limitations (Revenue Memorandum Circular No. 34-2020, March 27, 2020)

This Circular is hereby issued in connection with the Enhanced Community Quarantine (ECQ) that has prohibited the Commissioner and/or his authorized representatives, from making and serving assessment notices and Warrants of Distraint and/or Levy, as well as Warrants of Garnishments, for the enforcement and collection of deficiency taxes. Consequently, the running of the Statute of Limitations in the assessment and collection of taxes under Sections 203 and 222 of the National Internal Revenue Code of 1997 (NIRC) is hereby suspended, pursuant of Section 223 of the NIRC which provides: "The running of the Statute of Limitations provided in Sections 203 and 222 on the making of assessment and the beginning of distraint or levy or a proceeding in court for collection, in respect of any deficiency, shall be suspended for the period during which the Commissioner is prohibited from making the assessment or beginning distraint or levy or a proceeding in court and for sixty (60) days thereafter; ... xxx" In effect of the cited provisions and stated circumstances, the suspension of the running of the Statute of Limitations under Sections 203 and 222 of the NIRC of 1997 will be imposed for a period starting on March 16, 2020 until the lifting of the state of national emergency and for sixty (60) days thereafter. The suspension of the running of the Statute of Limitations shall likewise apply with respect to the issuance and service of assessment notices, warrants and enforcement and/or collection of deficiency taxes. This Circular shall apply nationwide.

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Extension of Statutory Deadlines and Timelines for the Filing and Submission of any Document and the Payment of Taxes (Revenue Regulation No. 07-2020, March 27, 2020)

This Revenue Regulation extends the following statutory deadlines for the submission and/or filing of the following documents and/or returns as well as the payment of the following taxes, as specified below:

Type of Transaction/ Document

BIR Form

Name of Form Period Original Due Date

Extended Due Date

VAT Refund 1914 Application for VAT Credit/Refund Claims

Covering the Quarter Ending March 31, 2018

March 31, 2020

April 30, 2020

ONETT 1606 Withholding Tax Remittance Return for Onerous Transfer of Real Property Other Than Capital Asset 9Including Taxable and Exempt)

N/A Date of payment

falls within the period of emergency

starting from March 16,

2020

Thirty (30) days from

original due date

1706 Capital Gains Tax Return for Onerous Transfer of Real Property Classified as Capital Asset (both Taxable and Exempt)

1707 Capital Gains Tax Return of Onerous Transfer of Shares of Stocks Not Traded Through the Local Stock Exchange

1800 Donor’s Tax Return

1801 Estate Tax Return

Monthly Filing and Payment (non-eFPS)

2550M Monthly VAT Declaration For the month of February 2020

March 20, 2020

April 20, 2020

Monthly eFIling/Filing and ePayment/Payment (eFPS)

1600WP Monthly Remittance of Percentage Tax on Winnings and Prizes Withheld by Race Track Operators

For the month of February 2020

March 20, 2020

April 20, 2020

Monthly eFiling (for eFPS filers under Group E)

2550M Monthly VAT Declartion For the month of February 2020

March 21, 2020

April 21, 2020

Monthly eFiling (for eFPS filers under Group D)

March 22, 2020

April 22, 2020

Monthly eFiling (for eFPS filers under Group C)

March 23, 2020

April 23, 2020

Monthly eFiling (for eFPS filers under Group B)

March 24, 2020

April 24, 2020

Monthly eFiling and ePayment (for eFPS filers under Group A)

March 25, 2020

April 27, 2020

Monthly ePayment(for Group E, D, C, B)

March 25, 2020

April 27, 2020

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BIR Form


Extended Due Date

Quarterly eFiling/Filing and ePayment/Payment (eFPS and no-eFPS filers)

2550Q Quarterly VAT Declaration For Fiscal Quarter ending February 29, 2020

March 25, 2020

April 27, 2020

Quarterly SLS/P Submission (non-eFPS)

N/A Summary Lists of Sales/Purchases

For Fiscal Quarter ending February 29, 2020

March 25, 2020

April 27, 2020

Sworn Statement of Manufacturer’s or Importer’s Volume of Sales of each particular brand of Alcohol

N/A Sworn Statement For Fiscal Quarter ending February 29, 2020

March 25, 2020

April 27, 2020

Registration of Computerized Books of Accounts and Other Accounting Records in Electronic Format

N/A N/A For Fiscal Year (FY) ending February 29, 2020

March 30, 2020

April 30, 2020

Submission of Required Hard Copies of FS & Scanned Copies of BIR Form 2307 to eFiled 1702RT, MX, EX

AFS Audited Fnancial Statement For FY ending November 30, 2019

March 30, 2020

April 30, 2020 2307 Certificate of Creditable

Tax Withheld at Source

1702RT Annual Income Tax Return for Corporation, Partnership and Other Non-Individual Taxpayer Subject Only to REGULAR income Tax Rate

1702MX Annual Income Tax Return for Corporation, Partnership and Other Non-Individual with MIXED Income Subject to Multiple Income Tax Rates or with Income Subject to SPECIAL/PREFERENTIAL RATE

1702EX Annual Income Tax Return for Corporation, Partnership and Other Non-Individual Taxpayers EXEMPT Under the Tax Code, as Amended, (Sec. 30 and those exempted in Sec. 27 (C) and Other Special Laws, with NO Other Taxable Income

Submission of 2019 Inventory List

N/A Inventory List For FY ending February 29, 2020

March 30, 2020

April 30, 2020

Quarterly SLS/P eSubmission (eFPS)

N/A Summary List of Sales/Purchases

For Fiscal Quarter ending February 29, 2020

March 30, 2020

April 30, 2020

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BIR Form


Extended Due Date

Quarterly eFiling/Filing and ePayment/Payment 9eFPS and non-eFPS filers)

1702Q Quarterly Income Tax Return for Corporation, Partnerships, and other Non-Individual Taxpayers

For fiscal Quarter ending January 31, 2020

March 31, 2020

April 30, 2020

Annual Filing/Submission

1604CF Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes

N/A March 31, 2020

April 30, 2020

Submission Deadline

2316 Certification of Compensation Payment

N/A March 31, 2020

April 30, 2020

Annual Filing/Submission

1604E and

related Alphalist

Annual Information Return of Creditable Income Taxes Withheld and Alphalist

N/A March 31, 2020

April 30, 2020

eFiling/Filing and ePayment/Payment

2000 Documentary Stamp Tax Declaration

For the Month of March 2020

April 5, 2020 May 5, 2020

2000-OT

Documentary Stamp Tax Declaration (One-Time Transaction)

Monthly eSubmission eSales Report of All Taxpayers using CRM/POS with TIN ending in even no.

N/A Monthly eSales Report For the month of March 2020

April 8, 2020 May 8, 2020

Monthly eFiling/Filing and ePayment/Payment

1600 with MAP

Monthly Remittance Return of Value-Added Tax and Other Percentage Taxes Withheld (Under RAs. 1050, 7649, 8241, 8424 and 9337) and Monthly Alphalist of Payees

For the month March 2020

April 10, 2020

May 11, 2020

1606 Withholding Tax Remittance Return for Onerous Transfer of Real Property Other Than Capital Asset (including Taxable and Exempt)

Monthly eFiling/Filing and ePayment/ Remittance

1600 Withholding Tax Remittance Return for National Government Agencies (NGAs)

For the month of March 2020

April 10, 2020

May 11, 2020

1601C Monthly Remittances Return of Income Withheld on Compensation

Monthly Filing and Payment/ Remittance for the amount of excise taxes collected from payment made to Sellers of Metallic Minerals

2200M Excise Tax Return for Mineral Product


April 10, 2020

May 11, 2020

Monthly Filing and Payment (non-eFPS)

1601C Monthly Remittance Return of Income Taxes Withheld on Compensation


April 10, 2020

May 11, 2020

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BIR Form Name of Form Period Original Due Date

Extended Due Date

Monthly eSbmission of eSales Report of All Taxpayers using CRM/POS with TIN ending in odd no.

N/A Monthly eSales Report For the month of March 2020

April 10, 2020

May 11, 2020

Monthly eFiling (for eFPS users under Group E)



April 11, 2020

May 11, 2020

Monthly eFiling (for eFPS users under Group D)

April 12, 2020

May 12, 2020

Monthly eFiling (for eFPS users under Group C)

April 13, 2020

May 13, 2020

Monthly eFiling (for eFPS users under Group B)

April 14, 2020

May 14, 2020

Monthly eFiling and ePayment (for eFPS users under Group A)

April 15, 2020

May 15, 2020

Annual eFiling/Filing and ePayment/ Payment

1700 Annual Income Tax Return for Individuals Eraning Purely Compensation Income (Including Non-Business/ Non-Profession Related Income)

For Calendar Year ending December 31, 2019

April 15, 2020

May 15, 2020

1701 Annual Income Tax Return for Individuals (including MIXED Income Earner) Estates and Trusts

1701A (With

Required Attachments)

Annual Income Tax Return for Individuals Earning Income PURELY from Business Profession (Those under the graduated income tax rates with OSD as mode of deduction OR those who opted to avail of the 8% flat income tax rate)

Annual eFiling/Filing and ePayment/ Payment

1702RT Annual Income Tax Return for Corporation, Partnership and Other Non-Individual Taxpayer Subject Only to REGULAR Income Tax Rate


April 15, 2020

May 15, 2020

1702MX Annual Income Tax Return for Corporation, Partnership and Other Non-Individual with MIXED Income Subject to Multiple Income Tax Rates or SPECIAL/PREFERENTIAL RATE

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BIR Form Name of Form Period Original Due Date

Extended Due Date

Annual eFiling/Filing and ePayment/Payment

1702EX (with required attachments)

Annual Income Tax Return for Corporation, Partnership and Other Non-Individual Taxpayers EXEMPT Under the Tax Code, as Amended, (Sec. 30 and those Other Special Laws, with NO Other Taxable Income


April 15, 2020

May 15, 2020

Monthly ePayment (for Group E, D, C, B)



April 15, 2020

May 15, 2020

Quarterly eSubmission Summary List of Machines CRM/POS sold by all Machine Distributors/ Dealers/ Vendors/ Suppliers

N/A Summary List of Machines

For Taxable Quarter ending March 31, 2020

April 15, 2020

May 15, 2020

Registration of Bound Looseleaf Books of Accounts/ Invoives/ Receipts & Other Accounting Records

N/A N/A For Fiscal Year ending March 31, 2020

April 15, 2020

May 15, 2020

Submission of List of Medical Practitioners

N/A List of Medical Practitioners

For Calendar Quarter ending March 31, 2020

April 15, 2020

May 15, 2020

Require Submission of Attachment to e-filed Annual Income Tax Return (Annual ITR)

1700 N/A For Calendar Year Ending December 31, 2019

Manually filed

together with the filing of

annual income tax

return (Annual ITR) or within 15 days from electronic filing of the Annual ITR

June 1, 2020

1701

1701A

1702RT

1702MX

1702EX

Certificate of Residence for Tax Treaty Relief (CORTT) Form

N/A Certificate of Residence for Tax Treaty Relief Part I and II

FWT on dividend, interest and royalty for the month of February 2020 paid and remitted starting March 10, 2020

On or before April 13,

2020

April 30, 2020

Tax Amnesty on Delinquencies

2118DA Tax amnesty Return on Delinquencies

N/A April 23, 2020

May 23, 2020


The extension of the statutory deadline enumerated above shall not prejudice any submission and/or filing made before the enactment of these Regulations, as well as those submission and/or filing to be made effective pursuant to the original deadline set forth under the Tax Code, as amended should the taxpayers still opt to follow the said deadline. In addition, the extension of the statutory deadline may be further extended by the Commissioner of Internal Revenue (CIR), if the circumstance warrants such extension or as may be directed by the Secretary of Finance. All existing rules and regulations, issuances or parts thereof, which are inconsistent with the provisions of these Regulations, are hereby repealed, amended, or modified accordingly.


BIR Form


Extended Due Date

Filing of Position

Paper to Notice of

Informal Conference

(NIC)

N/A N/A N/A Filing date falls due

during the emergency

period starting period

starting on March 16,

2020

Thirty (30) days from the date of the filing of

the period of emergency Filing of Position

Paper to Preliminary

Assessment Notice

(PAN)

Protest Letter to

Final Assessment

Notice 9FAN)/

Formal Letter of

Demand (FLD)

Sixty (60)-day

Transmittal Letter of

Additional Relevant

Supporting

Documents

Appeal/ Request for

Reconsideration to

the Commissioner of

Internal Revenue

(CIR) on the Final

Decision on

Disputed

Assessment (FDDA)

Other similar letter

and correspondence

with due dates

Suspension of Running of Limitation under Section 203 and 222 pursuant to Section 223 of the Tax Code of 1997 as amended

N/A Assessment Notices Warrant of Distraints and/or Levy Warrant of Garnishments

Period of emergency starting from March 16, 2020

Before the expiration of

Statue of Limitations

60 days after the lifting of the order of the state of emergency

All Other Filing/ Submission

N/A Other Reportorial Requirements Omitted

N/A Date of submission falls within

the period of emergency

starting from March 16,

2020

Thirty (30) days from

original due date


Notice of Regular Meetings of the Stockholders/Members (SEC Memorandum Circular 3-2020, February 21, 2020)

The SEC has issued new rules regarding the notice period for the regular meetings of the stockholders/members to ensure that there will be effective participation in the regular meetings, as part of efforts to promote good corporate governance and the protection of minority investors. A written notice shall be sent to all stockholders/members at least twenty-one (21) calendar days prior to the date of meeting. In case of postponement a written notice with the reason thereof to be sent two (2) weeks prior to the date of the meeting originally scheduled. Written notice must contain all information, deadlines relevant to stockholders/members participation in the meeting and right to vote remotely, in absentia or through a proxy.

Extension of Filing of the 2019 Annual Reports Including the Applicable Quarterly Reports for Year 2020 and 2019 Audited Financial Statements (AFS) (Memorandum Circular No. 5 s. 2020, March 12, 2020 and SEC Notice dated March 18,2020)

Due to the Enhanced Community Quarantine (ECQ), the SEC has provided extension time without penalty for the filing of the Annual Reports and/or Audited Financial Statements (AFS) for the period ended December 31, 2019:

• An extension of time until June 30, 2020 for companies doing domestic operations only; and

• An extension of time until June 30, 2020 or 60 days from that date of lifting of travel restrictions/ban by the concerned government authorities, whichever comes later for companies with domestic and foreign operations.

Corporations whose preparation of financial statements or completion of statutory audits are not affected by the COVID-19 outbreak are required to file their annual reports and/or annual financial statements for the year ended December 31, 2019 within the periods prescribed under existing rules and regulations. Hence, there are requirements that are needed to be complied in order to avail of the extension time without penalty. For the extension of submission of the Annual Report (SEC Form 17-A) of Publicly-Listed Companies, a written request is needed to be submitted to the Markets and Securities Regulation Department at least five days before the deadline of filing together with two (2) sworn certifications:

a) Sworn certification of the requesting company signed by its President and Treasurer confirming that all of the following conditions are met: 1. Its financial year-end is December 31, 2019; 2. It has significant business operations or significant subsidiaries in areas/countries/territories affected by

COVID-19; and 3. The preparation of financial statements and timely completion of statutory audit of the company's financial

statements as of December 31, 2019 have been affected by the travel restriction/ban, temporary suspension of business operations, and/or measures imposed by the authorities or companies in response to the COVID-19.

b) Sworn certification by the company's external auditor confirming the items (ii) and (iii) of the sworn statement

above. In addition to the documentary requirements above, the company shall continuously observe its disclosure obligations under the SRC and the Philippine Stock Exchange Consolidated Listing and Disclosure Rules. This means that all

SEC Issuances


material information, whether price-sensitive or trade sensitive, must be disclosed on a timely basis. Where the company's operations are materially affected by the COVID-19 outbreak, disclosure on the financial impact or any other material aspects should be made immediately. Finally, the requesting company must submit to the SEC an indicative date to convene the Annual Stockholders' Meeting. In line with the extension of filing of the SEC Form 17-A for the year 2019, the SEC likewise extends the period for filing of the applicable Quarterly Reports (SEC Form 17-Q) for each quarter of year 2020 to the same for publicly-listed companies whose requests for extension to file SEC Form 17-A were granted by the SEC. On the other hand, all non-publicly listed companies that will be filing their December 31, 2019 Annual Reports and/or AFS do not need to submit a written request to the SEC, but would need to submit the same sworn certifications aforementioned above that are duly signed by the President and Treasurer and the company's external auditor. The filing of applicable Quarterly Reports (SEC Form 17-Q) of concerned registered issuers of securities is likewise extended. Amendment: Relaxing the Requirements for Requests for Extension in the Filing of Annual Reports and/or Audited Financial Statements In the SEC Notice dated March 18, 2020, the SEC has decided to reduce the requirements mentioned in MC No. 5 series of 2020. The following are hereby DISPENSED, both for publicly listed and non-publicly listed companies:

a. Sworn certification of the requesting company signed by its President and Treasurer confirming that all of the following conditions are met:

i. Its financial year-end is December 31, 2019; ii. It has significant business operations or significant subsidiaries in areas/ countries/ territories affected

by COVID-19; and iii. The preparation of financial statements and timely completion of statutory audit of the company’s

financial statements as of December 31, 2019 has been affected by the travel restriction/ ban, temporary suspension of business operations, and/or measures imposed by the authorities or companies in response to COVID-19.

b. The request shall be accompanied by a sworn certification by the company’s external auditor confirming items

(ii) and (iii) of paragraph 1(b) above.

Guidelines on Conduct of Meetings via Remote Communication (Memorandum Circular 6 s 2020, March 12, 2020

Pursuant to the Revised Corporation Code, the SEC has issued guidelines which will govern participation in board meetings and stockholders’ and members’ meetings through remote communication or other alternative modes. Notwithstanding, corporations may issue their own internal procedures for the conduct of board meetings through remote communication. Directors or trustees who cannot physically attend or vote at board meetings, as well as stockholders or members who cannot physically attend at stockholder’s meetings, can participate and vote through remote communication such as videoconferencing, teleconferencing, or other alternative modes of communication that allow them reasonable opportunities to participate (audio conferencing, computer conferencing). If a director, trustee, stockholder or member intends to participate via remote communication, he/she should notify in advance the Presiding officer and Corporate Secretary and the Corporate Secretary shall note such fact in the Minutes of Meeting. The matrix below summarizes the guidelines in the board meetings and stockholders’ and members’ meetings through remote communication or other alternative modes:


Meetings of Board of Directors or Trustees through Remote Communication

Meetings of Stockholders or Members through Remote Communication

Place of Meeting

-no guideline provided in the MC- The presiding officer shall call and preside the stockholders' or members' meetings, whether regular or special, at the principal office of the corporation as provided in the articles of incorporation, or, if not practicable, in the city or municipality where the principal office of the corporation is located.

Manner of Sending of Notice of Meeting

Notice of meeting may be sent through electronic mail, messaging service or such other manner as may be provided in the bylaws or by board resolution.

Notice of meeting may be sent through electronic mail, messaging service or such other manner as may be provided in the bylaws or by board resolution.

Period to send notice of regular meeting

Notice of meeting must be sent to every director or trustee at least two (2) days prior to the scheduled meeting, unless a longer time is provided in the bylaws.

Notice of meeting must be sent to every stockholders or members at least twenty-one (21) days prior to the scheduled meeting, unless a longer time is provided in the bylaws.

Period to send notice of special meeting

This is as same as the period to send notice of regular meeting.

Notice of meeting must be sent to every stockholders or members at least one (1) week prior to the scheduled meeting, unless a longer time is provided in the bylaws.

Period to send notice of postponement of regular meeting

-no guideline provided in the MC- A written notice shall be sent to all stockholders or members of record at least two (2) weeks prior to the date of the meeting.

Waiver of notice of meeting

A director or trustee may waive this requirement, either expressly or impliedly.

-no guideline provided in the MC-

Contents of Notice of Regular Meeting

Notice of Meeting shall include the following information:

• The date, time and place of the meeting; • The agenda of the meeting; • All pertinent materials for discussion

which shall be numbered and marked in such manner that the director or trustee can easily follow and participate in the meeting;

• That a Director or trustee may participate via remote communication;

• Contact information of the Corporate Secretary or office staff whom the director or trustee may communicate;

• When the meeting is for the election of directors or trustees or officers, the requirements and procedure for nomination and election;

• The fact that there will be a visual and/or audio recording of the meeting; and

• Other instructions to facilitate participation in the meeting through remote communications.

Notice of Meeting shall include the following information:

• The date, time and place of the meeting;

• The agenda of the meeting;

• When attendance, participation, and voting by remote communication or in absentia, are authorized, the requirements and procedures to be followed when a stockholder or member elects either option;

• Manner of casting of votes and the period during which vote by remote communication or in absentia will be accepted;

• Contact information of the Secretary or office staff whom the stockholder or member may notify about his or her option;

• When the meeting is for the election of directors or trustees, the requirements and procedure for nomination and election;

• The fact that there will be visual and audio recording of the meetings (for future reference).

Contents of Notice of Special Meeting

-no guideline provided in the MC- Notice of special meetings which should state the date, time and place of the meeting.


Meetings of Board of Directors or Trustees through Remote Communication

Meetings of Stockholders or Members through Remote Communication

Quorum A quorum shall consist of the majority of the directors or trustees as stated in the articles of incorporation shall constitute a quorum unless the Revised Corporation Code, or the articles of incorporation or by laws of a corporation provide for a greater number. A director or trustee who participates through remote communication, shall be deemed present for the purpose of attaining quorum.

A quorum shall consist of the stockholders representing a majority of the outstanding capital stock or a majority of the members in the case of nonstock corporations, unless otherwise provided in the Revised Corporation Code or in the bylaws. A stockholder or member who participates through remote communication or in absentia shall be deemed present for purposes of quorum.

Roll Call During Meeting

At the start of the meeting, the Presiding Officer shall instruct the Corporate Secretary to make a roll call. Every attendee shall state for the record the following:

• Full name and position; • Location; • Confirmation that he/she can clearly

hear and/or see the other attendees; • Confirmation that he/she received the

Notice of the Meeting including the agenda and materials; and

• Specify the device being used (i.e., smartphone, tablet, laptop, desktop, television, etc.)

Corporate Secretary shall confirm and note the participants and certify the existence of quorum.

-no guideline provided in the MC-

Voting In case of a need to vote in any item or matter in the agenda, the Presiding Officer shall direct the Corporate Secretary to note the vote of each director or trustee. The director or trustee participating in the meeting via remote communication may cast his vote through electronic mail, messaging service or such other manner as may be provided in the internal procedures.

The vote shall be sent to the Presiding Officer and the Corporate Secretary for notation. Directors or trustees cannot attend or vote by proxy at board meetings done via remote communication.

The right to vote of stockholders or members may be exercised in person, through a proxy, or when so authorized in the bylaws, through remote communication or in absentia. [RCC Sec.-49, last par.] The right to vote of stockholders or members may be exercised also through remote communication or in absentia when authorized by a resolution of the majority of the board of directors; Provided, That the resolution shall only be applicable for a particular meeting. [RCC Secs. 23,49, 57] In the election of directors, trustees and officers of corporations vested with public interest, stockholders and members may vote through remote communication or in absentia, notwithstanding the absence of a provision in the bylaws of such corporations. [RCC-23]

Duties of the Corporate Secretary The Corporate Secretary shall ensure among others that suitable equipment and facilities are available for the conduct of meeting by remote communication, that the attendees are able to hear and see the other participants clearly during the course of the meeting and that attendees should be able to communicate and understood by the other party; that the visual and audio recordings of the meeting are secured, current and on-going and that there is no stoppage or interruption. Should an interruption or stoppage occur, the recording shall restart from the point where it was stopped or interrupted with proper statement of points in time; to safe-keep and perpetuate in updated data storage equipment or facility the visual and audio recordings; and require those who attended the meeting through remote communication, to sign the minutes of the meeting whenever the act of signing is practicable, on a reasonable time after the meeting.


Guidelines in the Formation of Internal Procedures for Meetings via Remote Communication Corporations shall issue their own internal procedures embodying the mechanisms for participation in meetings and voting through remote communication or in absentia. The internal procedures may provide for the mechanism to verify the identity of the stockholders or members and who among them have the right to vote during the meeting; measures to ensure that all stockholders or members have the opportunity to participate in the meeting including an opportunity to read or hear the discussion substantially; mechanism to enable stockholders or members to vote during the meeting including ensuring that the integrity and secrecy of the votes are protected; procedures for documenting the meeting and any process/motion which may be done afterwards; mechanism in making the record of the meeting, either video or audio recording, available to the stockholders or members. And other matters to address administrative, technical and logistical issues. In case the election or meeting was conducted through teleconferencing or any other similar means, a visual and audio recording of the election or meeting should be secured. The Secretary is duty-bound to safe-keep and perpetuate in updated data storage equipment or facility the visual and audio recordings. All pertinent materials for discussion shall be numbered and marked by the Secretary in such manner that the stockholder or member participating through remote communication can easily follow and participate.

Guidelines on Preventing Measures Against COVID-19 in the Handling of Records at the Securities and Exchange Commission (Memorandum Circular No. 07 s. 2020, March 16, 2020)

In accordance to the Enhanced Community Quarantine (ECQ), all request for SEC documents and submission of reports at the Head Office and Satellite Offices, will be temporarily suspended until further notice, to avoid face to face contact with the SEC Frontline Employees and the transacting public. All public requests for plain or authenticated copy of SEC documents shall be made through SEC Express System by processing the request online by logging in to www.secexpress.com or by calling the call center facility with hotline number (02) 8-737-8888. On the other hand, the filing of reports and other documents may be done online through SEC Express Nationwide Submission (SENS) and ordinary mail through Philippine Postal Corporation or a private courier accompanied by an affidavit of service, if registry service is not available in their official place of business. In filing through SENS, the filer will need to attach the necessary documents and choose the courier. The filer may or may not avail of the return copy. After the successful filing online, the courier will deliver the documents to the SEC Office in behalf of the client and a SEC Receiving Officer will stamp the documents and "Received" and distribute copies of documents to the SEC department concerned. In filing through ordinary mail, the clients may file their reports/documents through Registered Mail with return card issued by the Philippine Postal Corporation. For return copy, the client shall enclose a self- addressed envelope with sufficient amount of stamp/postage. The reports/documents submitted to the SEC through registered mail shall be considered filed on the date of mailing as shown by the post office stamp on the envelope or the registry receipt. Reports/documents submitted though ordinary mail or private courier shall be considered filed on the date of actual receipt thereof by the SEC. In both options, the validation of forms and contents of reports/documents submitted shall be done by SEC Operating Department requiring the report.

Guidelines for the filing of the GIS during the COVID-19 ECQ (Memorandum Circular No. 09 s.2020, March 18, 2020)

The SEC has issued guidelines on the submission of the General Information Sheet (GIS) or report the non-holding of elections while the country is placed under Enhanced Community Quarantine (ECQ).


Where an election of Directors, Trustees, and Officers was held, the GIS shall be submitted within thirty (30) days from actual meeting thru mail (ordinary or registered), private courier, or email at [email protected], [email protected] or [email protected]. Where Election of Directors, Trustees, and Officers was not held, the report on non-holding of annual meeting shall be submitted to the SEC. The report on non-holding of annual meeting shall indicate the new date for election which shall not be later than sixty (60) days from the originally scheduled date. The report shall be submitted to [email protected] within thirty (30) days from the originally scheduled date, and shall contain the following:

a. Corporate name; b. SEC Registration Number; c. Date of annual meeting per By-Laws; d. Date of actual meeting; e. Reason for the non-holding of meeting; f. Venue of the intended meeting; and g. Signed and dated by the Corporate Secretary

The non-holding of meeting due to health and safety reasons relating to the COVID-2019 disease shall be justified as such if the originally scheduled meeting falls between March 1, 2020 and May 31, 2020, and the corporation does not have facilities for remote communication. In case that the originally scheduled meeting falls outside the covered period and/or the reason mentioned in the above paragraph, the company should provide a justified reason for not holding the meeting. If the SEC verifies that the non-holding of meeting is indeed not related to the COVID-19 disease and is likewise found that reason is unjustified under the circumstances, the SEC shall issue an order directing the issuance of a notice stating the time and place of the election in accordance with Section 25 of the Revised Corporation Code. Subsequent to the report of non-holding of meeting, the results of the election should be reported through the submission of a General Information Sheet (GIS) within thirty (30) days from the date of actual meeting when the election was held if no stockholder, member, director, or trustees applied for an order from the SEC that an election be held. However, if the meeting was held outside the covered period, the GIS may be subjected to penalty for late submission.

Filing of GIS, AFS and Other Reports via Electronic Mail (Memorandum Circular No. 10 s.2020, March 18, 2020)

The SEC has issued guidelines that allows the filing of the following documents through electronic mail during the state of public health emergency where the country has been placed under Enhanced Community Quarantine:

1. General Information Sheet; 2. Audited Financial Statements; and 3. All other General and Special Forms and Letters.

The Guidelines are consistent with the applicable provisions on Authenticity of Electronic Messages, Documents and Signatures in Republic Act (RA) No. 8792, otherwise known as the "Electronic Commerce Act of 2000." (June 14, 2000). During the state of public health emergency, the SEC will accept electronic copies of the documents enumerated in Section I, submitted through electronic mail to the email addresses to be specified by the SEC provided, that all of the following required specifications are complied with:

1. The submitted documents should be in Portable Document Format (PDF), preferably with Text Layer. 2. The submitted documents should contain an Electronic Signature as defined in Section 5 (e) of RA

No. 8792, which states: "Electronic Signature" refers to any distinctive mark, characteristic and/or sound in electronic form, representing the identity of a person and attached to or logically associated with the electronic data message or electronic document or any methodology or procedures employed or adopted by a person and executed or adopted by such person with the intention of authenticating or approving an electronic data message or electronic document.”


For purposes hereof, electronic images of wet or physical signatures of authorized and appropriate representatives affixed to the documents covered by this Circular and submitted to the SEC, shall be recognized.

3. The submitted documents should be sent as Multipurpose Internet Mail Extensions (MIME) attachments to an email from a valid company email account or address of an authorized representative.

4. Subject to Item No. 5 below and owing to the difficulty of securing the services of a Notary Public during a state of public health emergency, the documents covered by this Circular which are required to be executed and submitted under oath may be submitted unnotarized. It shall be understood however, that the person(s) whose signature appears in the documents submitted shall be held accountable under the appropriate provisions of the Revised Corporation Code.

5. The body of the email should contain a statement declaring the authenticity of the submitted documents and a commitment to submit physical versions of the exact same submitted documents to the SEC once the state of public health emergency is lifted. This statement should include the full name, corporate address, and mobile number of the authorized representative making the submission. For purposes hereof, the SEC shall set and announce a specific date for submission of the duly notarized hard copies of the documents submitted through electronic mail after the state of public health emergency is lifted.

6. The sender should request for a Return Receipt and a Delivery Status Notification to ensure that the email has been sent and has also been received by the SEC.

Notwithstanding to the submission through electronic mail, the physical copies of required reportorial submissions are to be submitted according to established rules and regulations once the state of public health emergency has been lifted.


Guidelines on availing Php 5,000 financial assistance from DOLE (Department Order No. 209 s. 2020, March 17, 2020 and Labor Advisory No. 12 s 2020, March 18, 2020)

DOLE has issued guidelines on the implementation of the COVID-19 Adjustment Measures Program (CAMP). A one-time financial assistance equivalent to Php 5,000.00 shall be provided to affected workers in lump sum, non-conditional, regardless of employment status. CAMP covers affected workers in private establishments affected by the COVID-19 from its onset in January until the lifting on April 14, 2020 unless extended. The CAMP shall be effective on March 21, 2020, and shall be applied retroactively from January 2020. The following are considered affected workers:

a) Retained workers who do not receive regular wage-workers whose working hours and, therefore, regular wage is reduced due to the implementation of Flexible Work Arrangements (FWAs), (i.e. reduction of workhours/workdays, rotation of workers, forced leave) as mitigating measures enforced by the employer; and

b) Suspended workers - workers whose employment is temporarily suspended by reason of the suspension of operations of the employer's business establishment

The applicant must be a private establishment that has implemented flexible work arrangements (FWAs) or temporary closures due to COVID-19. Government employees are excluded from the program. The below diagram summarizes the procedures to avail of CAMP:

Applicants may refer to Labor Advisory No. 12, series of 2020 for the copy of the Establishment Report to be filled out and the directory of e-mail addresses of the respective DOLE Regional Offices.

DOLE Issuances

Completion

A Notice of Completion shall be issued to the affected establishment within three (3) working days through e-mail.

Disbursement

The concerned DOLE Regional Office shall issue the financial support (FS) directly to the beneficiary's payroll account through bank transfer within two (2) weeks upon receipt. For cash payroll, FS shall be received through money remittance.

Evaluation

Applications shall be evaluated within three (3) working days. Applicant shall receive through e-mail either a Notice of Approval or a Notice of Denial.

Submission of Documenatary Requirements

Affected establishment must e-mail to the appropriate DOLE Regional Office the (a) Establishment Report and (b) Company Payroll for the month of February or earlier


Guidelines on 2019-nCoV Prevention and Control at the Workplace (Labor Advisory No. 04 s.2020, January 31, 2020)

DOLE directed the all employers and workers in the private sector to keep a clean workplace and to stay healthy. Employees who are working in imminent danger situation must take extra precautionary measure. Employers shall ensure the use of Personal Protective Equipment in the workplace. An immediate health related respond to contain/limit the spread of virus in the workplace must be provided by the employer in a situation that an employee is suspected as having 2019-nCoV. For workers who are requested by their employers to stay at home or who are served quarantine order or employees who choose to stay away from work for reasons related to nCoV-2019, the leave of absence may be charged to their annual sick/vacation leave credits under the company policy. For workers who have used up their S/V leave credits, employers could consider granting them leave of absence without pay. Employees who are suspected as having nCoV-2019 are entitled to sickness or compensation benefit from government agencies such as Philhealth (members only) and Social Security System. The employer shall shoulder all medical expenses until full recovery of a Worker not qualified to avail the benefit due to the fault of the employer. For overseas Filipino worker (OFW), the Philippine Overseas Employment Administration (POEA), the Overseas Welfare Administration (OWWA) and the labor Affairs Bureau (ILAB) shall ensure that information on 2019-nCoV prevention and control are provide during the pre-departure orientation seminar.

Guidelines on the Implementation of flexible work arrangements as remedial measure due to the ongoing outbreak of Coronavirus Disease 2019 (COVID-19) (Labor Advisory No. 09 s.2020, March 4, 2020)

The purpose of this advisory is to assist and guide employers and employees in the implementation of various flexible work arrangements (FWAs) which refer to alternative arrangements or schedules other than the standard workhours, workdays and workweek. The following are the flexible work arrangements which may be considered, among others:

1. Reduction of Workhours and/or Workdays refers to one where the normal workhours or workdays per week are reduced.

2. Rotation of Workers refers to one where the employees are rotated or alternately provided work within the week.

3. Forced Leave refers to one where the employees are required to go on leave for several days or weeks utilizing their leave credits, if there are any.

The employers and employees are encouraged to find/explore other alternative work arrangement to cover the loss of income of the employees. In adopting the directed FWAs, the employers and employees shall be primarily responsible for its administration. Any differences shall be treated as grievances under grievance mechanism of the company. If there is no grievance mechanism or if the mechanism is inadequate, it shall be referred to the DOLE Regional Office that has jurisdiction over the workplace. In order to facilitate the resolution of grievances, the employers should keep the documentary requirements proving the adoption of FWAs Establishments implementing the FWAs provided herein shall post a copy of this Advisory in a conspicuous location in the workplace. The employer shall notify the DOLE through the Regional/ Provincial/Field Office which has jurisdiction over the workplace of the adoption of any of the above FWAs. The notice shall be in the Report Form attached to this Advisory.


Supplemental Guidelines on the Implementation of flexible work arrangements as remedial measure due to the ongoing outbreak of Coronavirus Disease 2019 (COVID-19) (Labor Advisory No. 11 s.2020, March 14, 2020)

This labor advisory of DOLE requires employers that the leaves of absence during the community quarantine period shall be charged against the workers' existing leave credits, if any. Remaining unpaid leaves during said period may be covered and be subject to the conditions provided in the DOLE's proposed COVID-19 Adjustment Measures Program (CAMP) pursuant to Department Order No. 209 series of 2020. In addition, the safety precaution like adoption of flexible work arrangements and observance of strict social distancing measures, i.e. at least one (1) meter radius between and among workers should be strictly observed. The following are industry-specific guidelines during the community quarantine period:

1. Those delivering goods such as food, raw materials, etc. should have access in Metro Manila, provided that

they present proof of delivery receipt stating the address of the establishment to receive the goods.

2. All healthcare facilities shall be fully operational and their employees shall be allowed to move from Metro Manila to other regions and vice versa.

It is to be noted that pursuant to Proclamation No. 929 issued by Philippine President Rodrigo Duterte, business establishments are closed except certain businesses, such as: (a) which provide basic utilities and critical services (e.g., water, electricity, internet, telecommunication, gas, garbage collection, funeral services); (b) involved in the production, processing and distribution of basic necessities (e.g., food, pharmacies / drugstores, banks); (c) capital markets (Philippine Stock Exchange will observe shortened trading hours).

Payment of Wages for the Regular Holidays on April 9 and 10, 2020 and Special Day on April 11, 2020 (Labor Advisory No. 11 s.2020, March 30, 2020)

The Payment of Wages for the Regular Holidays on April 9 and 10, 2020 and Special Day on April 11, 2020, pursuant to Proclamation No. 845 issued by President Rodrigo Roo Duterte on November 15, 2019, the following rules for pay on regular holidays shall apply:

Double Regular Holiday

- April 9 (Araw ng Kagitingan and Holy

Thursday)

Regular Holiday- April 10

(Good Friday)

Special (Non-Working) Day - April 11

Employee did not work 200% of his/her wage for that day, subject to the requirement that he or she was present or on leave with pay on the workday prior to the start of the ECQ on March 17, 2020 [(Basic wage + COLA) x 200%]

100% of his/her wage for that day, subject to the requirement that he or she was present or on leave with pay on the workday prior to the start of the ECQ on March 17, 2020 [(Basic wage+ COLA) x 100%]

"No work, no pay" principle shall apply unless there is a favorable company policy, practice or collective bargaining agreement (CBA) granting payment on a special day;

For work done for the first eight hours

300% of his/her wage for that day [(Basic wage + COLA) x 300%]

200% of his/her wage for that day [(Basic wage + COLA) x 200%]

Additional 30% of his/her basic wage [(Basic wage x 130%) + COLA]


Double Regular Holiday - April 9 (Araw ng

Kagitingan and Holy Thursday)

Regular Holiday- April 10

(Good Friday)

Special (Non-Working) Day - April 11

For work done in excess of eight hours (overtime work)

Additional 30% of his/her hourly rate on said day [Hourly rate of the basic wage x 300% x 130% x number of hours worked]

Additional 30% of his/her hourly rate on said day [Hourly rate of the basic wage x 200% x 130% x number of hours worked]

Additional 30% of his/her hourly rate on said day [(Hourly rate of the basic wage x 130% x 130% x number of hours worked)]

For work done that also falls on his/her rest day

Additional 30% of his/her basic wage of 300% [(Basic wage + COLA) x 300%] + [30% (basic wage x 300%)]

Additional 30% of his/her basic wage of 200% [(Basic wage + COLA) x 200%] + [30% (Basic wage x 200%)]

Additional 50% of his/her basic wage on the first eight hours of work [(Basic wage x 150%) +COLA]

For work done in excess of eight hours (overtime work) that also falls on his/her rest day

Additional 30% of his/her hourly rate on said day (Hourly rate of the basic wage x 300% x 130% x 130% x number of hours worked)

Additional 30% of his/her hourly rate on said day (Hourly rate of the basic wage x 200% x 130% x 130% x number of hours worked)

Additional 30% of his/her hourly rate on said day (Hourly rate of the basic wage x 150% x 130% x number of hours worked)


LOA is Invalid due to Incorrect Signatory and FLD is Void Due to Blank Due Date (Commissioner of Internal Revenue vs. San Miguel Foods Inc, CTA EB No. 1880 re CTA Case No. 9046, January 07, 2020)

Facts: Group Supervisor (GS) Maniego was named in LOA No. 116-2011- 00000002 dated May 12, 2011 signed by Zenaida G. Garcia, Assistant Commissioner, Large Taxpayers Service as one of the ROs authorized to conduct the audit of Respondent, but the records reveal that his actual participation in the audit of Respondent was limited to merely noting the audit results conducted by Revenue Officer (RO) San Pedro. In a Judicial Affidavit dated October 5, 2015, Revenue Officer (RO) San Pedro admitted that she was one of the ROs who continued the audit of Respondent for the period January 1, 2010 to August 31, 2010 and that the basis of her authority to do so was the Memorandum of Assignment issued on February 25, 2013 by Cesar D. Escalada, Chief, Regular LT Audit Division 1, issued a. A plain reading of said Memorandum of Assignment indicates that the Group Supervisor (GS) assigned to continue the audit was GS Dela Pena, and not GS Maniego. At any rate, there is nothing in the records which would show that a new LOA was issued granting RO San Pedro and GS Maniego to continue the audit of petitioner for the period January 1, 2010 to August 31, 2010. On October 10, 2014, the Respondent received a Formal Letter of Demand with attached Final Assessment Notices and Details of Discrepancy (FLD-FAN) dated October 9, 2014. The FLD-FAN states that respondent is requested to pay its deficiency tax liabilities using the BIR Payment Form (BIR Form 0605) through eFPS within the time shown in the enclosed assessment notice. However, the enclosed Details of Discrepancies failed to indicate the specific period when the payment should be made and the portion in the Audit Result/ Assessment Notice indicating the "DUE DATE" was left blank. Respondent then protested the FLD-FAN on November 10, 2014. On August 6, 2019, the Court En Banc ruled in the Motion for Reconsideration on Decision that pursuant to RMO No. 29-07, RO Maria Gracielle Cecilia F. San Pedro and GS Juvy S. Dela Pena were without authority to continue the audit because the Memorandum of Assignment was only signed by Cesar D. Escalada, Chief, Regular LT Audit Division. The Court En Banc further ruled that the absence of the specific period in the FLD and Assessment Notices negates the CIR's demand for payment and makes the assessment void. Petitioner claims that the Court En Banc erred in its decision dated August 6, 2019, while the Respondent counter-argues that the petitioner's Motion for Reconsideration should be denied for utter lack of merit as it is nothing but a mere rehash of the arguments already raised and adequately passed upon by the Court in Division and by the Court En Banc. Issue:

1. Whether or not the LOA is valid; 2. Whether or not the FAN-FLD is valid.

Ruling: Motion for Reconsideration on Decision dated August 6, 2019 is denied for lack of merit. Court finds no cogent reason to deviate from the previous ruling that the revenue officers who conducted the audit have no authority to continue the audit examination of respondent's accounts. The letter or notice or memorandum should be signed by the Assistant Commissioner/Head Revenue Executive Assistant of the Large Taxpayers Service. In addition, even assuming that the LOA was valid, still respondent cannot be held liable for the assessed taxes because the FLD- FAN was void. The said notice failed to demand payment of taxes within a specific period. It must be emphasized that the requirement to indicate a fixed and definite period within which a taxpayer must pay the tax deficiencies is essential to the validity of the assessment.

Court Decisions


Tax Assessment is Void due to the Premature issuance of FLD/FAN (The Orchard Golf & Country Club, Inc. vs. Commissioner of Internal Revenue, CTA Case No. 8986, January 14, 2020)

Facts: On March 26, 2014, Petitioner received a Preliminary Assessment Notice (PAN) issued on February 17, 2014. Subsequently, on April 10, 2014, Petitioner filed the Request for Reinvestigation dated April 8, 2014, in respect of the said PAN. On April 21, 2014, Petitioner received the Formal Letter of Demand (or Final Assessment Notice) (FLD/FAN) issued on March 28, 2014., or barely two (2) days from Petitioner's receipt of the PAN, and before the lapse of the said 15-day period for it to protest or respond thereto. Petitioner argues that the FAN is null and void because Respondent violated Section 228 of the NIR C of 1997, Revenue Regulation (RR) No. 12- 99, and the PAN itself, thereby denying Petitioner its constitutional right to due process. Moreover, Petitioner contends that the reinvestigation granted to it was a sham because the officer who allegedly conducted the reinvestigation did not even know the facts and arguments of the case, and thus, the reinvestigation was merely for show, to give the appearance that Petitioner was afforded the change to be heard. Issue: Whether or not the tax assessment is null and void. Ruling: The tax assessment is null and void. The FLD /FAN was clearly issued prematurely thereby depriving Petitioner of the opportunity to be heard on the PAN, in violation of the due process requirement in the issuance of tax assessments. It is only upon the lapse of the prescribed 15-day period, without such protest or response being filed by the taxpayer within such period, that Respondent may issue the corresponding FLD or FAN.

Appeal to the FDDA does not Interrupt the Running of the 180-day Period (Nueva Ecija II Electric Cooperative vs. Commissioner of Internal Revenue; CTA Case No. 9605, January 17, 2020)

Facts: On October 7, 2016, petitioner received a Final Decision on Disputed Assessment (FDDA) dated September 28, 2016 (or on the 81th day from the submission of the relevant supporting documents on September 19, 2016), signed by OIC-Regional Director Sabariaga, reducing the deficiency assessment on VAT and EWT but denying its protest as regards the deficiency income tax. Petitioner elevated its protest to the CIR on No vember 4, 2016. When petioner elevated its protest, the CIR had the remaining 134 days of the 180-day period or until March 18, 2017 within which to decide the protest. From March 18, 2017 (the 180th day), petitioner had thirty (30) days or until April 17 , 2017 to appeal to the CTA, if it so desires, or await the final decision of the CIR himself and appeal said CIR's final decision to the CTA within thirty (30) days from receipt thereof. Respondent neither filed an appeal to the CTA within thirty (30) days from the lapse of the 180-day period on March 18, 2017 nor did it await the decision of the CIR himself. Petitioner mistakenly counted a new period of 180 days from November 4, 2016 for the CIR to decide on the appealed decision of his authorized representative. Petitioner proceeds on the premise that it had thirty (30) days from the lapse of the 180 -day period reckoned from November 4. 2016 or until June 3, 2017, within which to file a Petition for Review with the CTA. Petitioner posits that since June 3, 2017 fell on a Saturday, it had until June 5, 2017, the next working day within which to file its Petition for Review. Thus, petitioner claims that the filing of its Petition for Review on June 2, 2017 was well within the reglementary period provided for by law.


Issue: Whether petitioner filed its Petition for Review within the prescribed period Ruling: Petition for Review was filed way beyond the thirty (30)-day reglementary period to appeal. Petition for Review is dismissed by the CTA for lack of jurisdiction. Section 228 of the NIRC of 1997, as amended, provides for a total of 180 days only for the CIR and his authorized representative to decide petitioner's pro test. There is nothing in Section 228 of the NIRC of 1997, as amended and RR No. 12-99, as amended by RR No. 18-13, which provides for a separate 180-day period for the CIR's representative to act on the protest and another 180-day period for the CIR to decide the appealed decision of his authorized representative. When the decision of the CIR's authorized representative was appealed to the CIR, the running of the 180-day period remained to commence from September 19, 2016, the date when respondent submitted the relevant supporting documents in support of its protest, the 180-day period was not interrupted.

Cancellation of the Assessment due to Failure to Establish Willful Understatement of Income (People of The Philippines Vs. Ritche S. Barriga; CTA Criminal Cases No. 0-266, 0-267, 0-268, 0-269, January 21, 2020)

Facts: In the Details of Discrepancies attached to the Preliminary Assessment Notice (PAN) presented by the prosecution during trial, the basis for the assessment was the variation between the sales figures as determined by the BIR Examiners in Tagum as compared to the one determined by its examiners in Davao. Further, the alleged income earned by the accused was based only on the list of purchases made by the accused from several of its suppliers. The accused explained further that the alleged discrepancy could be attributable to his adoption of a cash method of accounting in contrast with his four customers, i.e. STANFILCO, LAPANDAY, First Davao Consolidated Joint Venture, and Sumifru (Philippine) Corporation, using an accrual method of accounting. Issue: Whether or not accused is guilty of violating Section 255 of the 1997 National Internal Revenue Code (NIRC) Ruling: The assessment made by the BIR was based on a presumption and not on actual audit investigation by assuming that the variance arising from the purchases of the accused as income thereof without any empirical and valid evidence to support its computation on said assessment, i.e. the accused's official receipts issued by his customers or clients or the certificates of withholding tax issued by said customers or clients. There is reasonable doubt if indeed the accused willfully failed to supply correct and accurate information in his ITR and VAT Returns. Sections 43 and 45 of the 1997 NIRC, as amended, do not require for the strict usage of accrual method of accounting in determining the taxpayer's income but dependent on its choice of method provided it is in accordance with generally accepted method in accounting. What is prohibited under Section 3(5), Chapter II of Revenue Regulations No. V-1, otherwise known as "The Bookkeeping Regulations", is the keeping of books of accounts for both methods of accounting of income.

Petition for Prohibition should be filed Sixty (60) days from the Receipt of Notices of Delinquency (National Food Authority vs. Province of Nueva Vizcaya; CTA AC Case No. 192, February 3, 2020)

Facts: Petitioner is the owner of several real properties constituting of land, buildings and machinery located at Barangay Bagabag and Barangay Bayombong, both in the Province of Nueva Vizcaya, which are covered by seven (7) Tax Declaration.


On March 23, 2016, respondent Provincial Treasurer, Ms. Rhoda D. Soriano-Mareno, issued seven (7) Notices of Delinquency demanding payment for real property taxes in the total amount of P2,848,686.50 on various properties declared in the name of petitioner located in the Province of Nueva Vizcaya. The Notice of Delinquency was received by petitioner's employee, Milagros Torralba, on March 23, 2016. On June 14, 2016, petitioner filed a Petition for Prohibition (With Application for the Issuance of a Preliminary Injunction and/or Temporary Restraining Order) under Section 2 of Rule 65 of the Rules of Court before RTC Bayombong, Nueva Vizcaya, questioning the authority and power of the respondents to impose and collect real property taxes, on the alleged ground that it is a government instrumentality that is exempt from payment thereof. The case was docketed as Special Civil Action No. 0051 and was raffled to RTC-Branch 29 of Bayombong, Nueva Vizcaya. Issue:

1. Whether or not payment under protest and the exhaustion of administrative remedies apply to this case; and

2. Whether or not the trial court erred in holding that the petition is filed out of time or beyond the 60 -day period to file a petition for prohibition under rule 65 of the rules of Court.

Ruling: For petitioner's failure to exhaust the administrative remedies available to it and to comply with payment under protest, the assessment therefore attained finality and the collection would be proper. The petition er's claim for exemption from payment of real property taxes does not actually question the assessor's authority to assess and collect such taxes, but pertains to the reasonableness or correctness of the assessment by the local assessor. It should have first complied with the requirement of payment under protest and the rule on exhaustion of administrative remedies under Sections 252, 226 and 229 of LGC of 1991. Moreover, the counting sixty (60) days from its receipt on March 23, 2016, petitioner had unt il May 23, 2016 within which to file the Petition. Petitioner filed the Petition for Prohibition before the RTC only on June 14, 2016. Hence, the Petition for Prohibition was filed out of time.

Unanimous Written Consent of the BOD is Considered as Ratification (Dole Fresh Fruit Company vs Commissioner of Internal Revenue; CTA Case No. 9012, February 5, 2020)

Facts: Petitioner Dole Fresh Fruit Company (DFFC) is corporation organized and existing under the laws of the State of Nevada, United States of America (USA) submitted a Petition for Review claiming for refund of its erroneously paid capital gains taxes (CGT) to the Commissioner of Internal Revenue, arising from its sales of shares in Dole Philippines, Inc. (DPI) to Dole Asia Holdings Pte. Ltd. (DAHL). Petitioner filed an application with the Bureau of Internal Revenue's (BIR) Internal Tax Affairs Division (ITAD) to request confirmation that the transaction is exempt from capital gains tax under the Republic of the Philippines-United States (RP-US) Tax Treaty. Thereafter, petitioner filed its documentary stamp tax (DST) and CGT returns and paid the respective taxes. Respondent claims that the President of DFFC is not authorized to sign the Verification and Certification Against Forum Shopping at the time he signed the documents since the Secretary’s Certificate authorizing him to sign the same was executed only on a later date. Issue:

1. Whether or not there is a valid verification and certification against forum shopping; and 2. whether or not the DFFC entitled to a refund of the capital gains taxes erroneously paid to and

collected by the CIR. Rulings: Petitioner submits as evidence the Authenticated Certificate of Assistant Secretary with attached Action Taken by Unanimous Written Consent of the Board of Directors of the petitioner, which certifies that it’s President is authorized and empowered to sign the Verification and Certification. Such act of the Petitioner’s Unanimous Written Consent of the Board of Directors is considered as ratification and retroacts to the date of the subject of such act. Petitioner's capital gains derived from the transfer of its shares of stock in DPI shall be exempt from CGT in the Philippines pursuant to the Tax Treaty with the United States of America which states that (1) it shall be taxable in


the state where the alienator is a resident and (2) if the interest being disposed is in a corporation whose assets do not consist principally of real property interest located in the Philippines. Records show that the real property interest of DPI does not exceed 50%, thus, it cannot be said to have assets consisting principally of a real property interest in the Philippines. Thus, the Petition for Review was GRANTED ordering the Respondent CIR to refund the Petitioner.

Motion for Production of Documents is not a Re-audit (Smart Communications, Inc. vs City of Makati; CTA AC No. 228, February 5, 2020)

Facts: Petitioner Smart Communications, Inc., a corporation duly organized and existing under and by virtue of the laws of the Republic of the Philippines filed before the Regional Trial Court (RTC) seeking the nullification of Respondent Makati City’s Notice of Assessment (NOA), holding petitioner liable for deficiency franchise tax and fees for taxable years 2012 to 2015. Respondent filed a Motion for Production or Inspection of Documents of the Petitioner. The RTC granted respondent’s motion. Petitioner feeling aggrieved by the RTC’s action filed its motion for reconsideration. The denied the petitioner’s motion. Petitioner argues that the RTC's decision would be tantamount to permitting Respondent to conduct second audit. Petitioner challenges the relevancy of producing some of the documents with information pertaining to its nationwide revenues and revenues from other localities and taxable period which are outside the jurisdiction of the Respondent and periods that it can no longer be assessed. Petitioner filed Petition for Certiorari seeking the reversal of the decision of the RTC granting respondent Makati City's Motion for Production or Inspection of Documents of the Petitioner and denying the Petitioner’s Motion for Reconsideration. Issue: Whether or not the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction in arriving at its assailed resolution. Ruling: The Court finds the grant of the motion for production of documents will not expose the petitioner to a re-audit. The documents have yet to be actually offered would be too early and premature to disallow their production in the court. The relevancy found by the lower court to warrant the production of the subject documents is only for the purpose of discovery. The actual relevancy of a piece of evidence or its relevancy for the purpose of admissibility is a wholly different matter. Relevancy of the latter kind can only be determined after the court has been given an opportunity to appreciate the evidence presented before it. The errors sought to be corrected by a writ of certiorari are of such nature that, if allowed to stand, they would result in a substantial injury to Petitioner to whom no other remedy was available. The Court does not perceive any injury of such magnitude if the assailed resolutions are allowed to stand. Neither can grave abuse of discretion be attributed to the actions of public respondent in arriving at the assailed resolutions, to render them void for being beyond the lower court's jurisdiction. The Court finds no grave abuse of discretion on the part of the RTC in the application of the principles to justify the production of subject documents. The Petition is DENIED for lack of merit.

A New Finding Presented in FDDA made the Assessment Void (Commission of Internal Revenue vs First Sumiden Circuits, Inc.; CTA EB No. 1831, February 5, 2020)

Facts: Petitioner Commissioner of Internal Revenue (CIR) filed Petition for Review seeking the partial reversal of the decision and resolution rendered by the CTA Second Division against Respondent First Sumiden Circuits, Inc. a corporation duly organized under the Philippine law. It is a Philippine Export Processing Zone Authority (PEZA) registered enterprise. The Petitioner raises that the court second division erred in ruling that Respondent is not liable for deficiency income tax due to Realized Forex Gain. Petitioner argues that the assessment for realized forex gain is neither a new assessment nor was respondent denied of due process regarding the said assessment. According to petitioner, the realized forex gain was already part of the audit findings on Undeclared Sales and Disallowed Cost of Sales which already was assessed against respondent as early as the issuance of the PAN.


The Respondent argues that the Realized Forex Gain was not found in the Preliminary Assessment Notice (PAN), Formal Assessment Notice (FAN) and Final Letter of Demand (FLD) previously issued by the Bureau of Internal Revenue (BIR), but only in the FDDA; hence, the Respondent’s right to due process was violated. Issue:

1. Whether or not the tax deficiency assessment arising from Realized Forex Gain that is assessed for the first time in the FDDA

2. Whether or not there is a violation of right to due process Rulings: The Court ruled that tax deficiency assessment arising from Realized Forex Gain is assessed for the first time in the FDDA since there is an entirely new assessment item in the form of "realized forex gain not subjected to tax" was included in the FDDA. Therefore, the Court agrees that the assessment is void on the ground that respondent's right to due process was violated since the Respondent was not given the opportunity to present its case and adduce supporting evidence against the assessment on Realized Forex Gain at the administrative level. Therefore, the assessment should be CANCELLED.

Assessment is Void for being Issued Without a Valid Authority and the Violation of 15-day period to reply to PAN (Air Globe, Inc. vs. Commissioner of Internal Revenue; CTA Case No. 9466, February 19, 2020)

Facts: On January 24, 2011, petitioner received FAN dated January 14, 2011 assessing deficiencies on VAT, EWT, EWC for taxable year 2007. On August 4, 2011 petitioner received the FDDA dated July 28, 2011. Thereafter, on September 2, 2011 filed the appeal before the office of the CIR. Petitioner received on August 10, 2016 the Final Decision promulgated by Comm. Henares denying its appeal. Petitioner filed the instant petition for review on September 9, 2016. In the case at bar, Petitioner argues that the present assessment is void for being issued without a valid authority; that the alleged Revalidation/Reassignment Notice and Letter of Authority ("LOA") were not offered as evidence; that the non-observation of the 15-day period to protest the Preliminary Assessment Notice ("PAN") violates Petitioner's right to due process which renders the present assessment void; that the present assessment is barred by prescription; and that the imposition of the 50% surcharge is without basis. Issue: Whether or not the subject tax assessment is valid. Ruling: No, an LOA is the authority given to the appropriate revenue officer assigned to perform assessment functions. It empowers or enables said revenue officer to examine the books of account and other accounting records of a taxpayer for the purpose of collecting the correct amount of tax. To begin with, Section 6 of the NIRC requires an authority from the CIR or from his duly authorized representatives before an examination 'of a taxpayer' may be made. The requirement of authorization is therefore not dependent on whether the taxpayer may be required to physically open his books and financial records but only on whether a taxpayer is being subject to examination. An LOA is premised on the fact that the examination of a taxpayer who has already filed his tax returns is a power that statutorily belongs only to the CIR himself or his duly authorized representatives. Section 13 of the NIRC 1997 as amended an RO must be authorized, through an LOA, in order that the said officer may validly examine the books of accounts and other accounting records of a taxpayer. In the absence of an LOA, the tax assessments issued by the BIR against such taxpayer is void.


Certifications of Non-Registration of Company is not enough to prove that Non-Resident Foreign Corporations Doing Business Outside the Philippines (AIG Shared Services Corporation vs. Commissioner of Internal Revenue; CTA Case No. 9438, February 19, 2020)

Facts: On March 30, 2016, Petitioner flied its administrative claim for refund of its excess and unutilized input VAT in the amount of P43,912,521.20 for the 1st to 4th quarters of CY 2014. In compliance with the first essential element of Section 108(B)(2) of the NIRC of 1997 of proving that its client affiliates are non-resident foreign corporations doing business outside the Philippines, petitioner presented the related Certifications of Non-Registration of Company issued by the Philippine Securities Exchange Commission (SEC), printed screenshots of foreign government websites and consularized foreign registration. Issue: Whether or not the petitioner fails to prove that all of its clients are non-resident foreign corporations doing business outside the Philippines. Ruling: Yes, to be considered as non-resident foreign corporation doing business outside the Philippines, the entity must be supported at the very least by both SEC Certificate of non-registration of corporation/partnership and Certificates/ Articles of foreign incorporation/ association/ registration or any other proof of foreign incorporation/ association/ registration. Hence, the following are NOT considered non-resident foreign corporations doing business outside the Philippines:

1. Without proof of foreign registration and supported only by SEC Certification of Non-Registration of Company;

2. Without SEC Certification of Non-Registration of Company and supported only by Consularized Foreign Registration;

3. Supported only by SEC Certification of Non-Registration of Company and the name indicated therein is different from petitioner's client name;

4. Supported by SEC Certification of Non-registration of Company and Consularized Foreign Registration but the name indicated in the latter document is different from petitioner's client name;

5. Supported by SEC Certification of Non-Registration of Company and documents which cannot be considered as valid proof of foreign incorporation/ registration; and

6. Supported by SEC Certification of Non-Registration of Company and Consularized Foreign Registration but without English translation.

Legal Interest is not subject to Final Withholding Tax (Emmanuel C. Onate vs. Commissioner of Internal Revenue; CTA Case No. 9498, February 19, 2020)

Facts: On November 28 2014, Land Bank paid petitioner Emmanuel C. Onate the judgment award rendered in the latter's favor pursuant to the Supreme Court case entitled "Land Bank of the Philippines vs. Emmanuel C. Onate," docketed as G.R. No. 192371 and promulgated on January 15, 2014. The said payment represents the judgment award less the final tax withheld on interest yield from bank deposits/deposit substitutes amounting to P7,913, 134.58 and P17,789,817.53 from Peso and US Dollar awards, respectively. On November 4, 2016, petitioner Onate filed a written claim for refund or tax credit for the total amount of P25, 702,952.11 pursuant to Section 229 of the National Internal Revenue Code (NIRC) for having been collected erroneously by the BIR. CIR argued that the interest which is the subject of the instant case is not interest from a long-term investment but interest from a judgment award. Hence, it is subject to a final withholding tax and assuming but without admitting that it is an interest from a long-term investment, the corresponding interest given by the bank arising from a long-term investment are only covered by the exemption under Section 24(8) (1). There being no action on the part of the respondent CIR with respect to such claim for refund, petitioner filed the instant Petition for Review. Issue: Whether petitioner Onate is entitled to the refund of taxes erroneously withheld from the judgment award rendered in his favor.


Ruling: Yes, Petitioner is entitled to the refund of the final withholding tax erroneously imposed on the legal interest on the judgment award issued by the Supreme Court. For a claim for tax refund of erroneously collected taxes to prosper, there must be compliance with the requisites imposed by Sections 204 (C) and 229 of the NIRC of 1997, as amended. One of the requisites that must be established by the taxpayer: “There must be an erroneous or illegal collection of tax, or a penalty collected without authority, or sum excessively or wrongfully collected” The legal interest imposed on the judgment award is not subject to tax. To be specific, the legal interest imposed in the judgment award in favor of petitioner was imposed by the Supreme Court, as a form of penalty or indemnity for damages, as opposed to compensation fixed by the parties for the use or forbearance of money, it is considered a form of penalty or indemnity for damages, it cannot rightfully be considered as taxable income.

Interest should be only up to the Date of Full Settlement of Deficiency Tax Due (Commissioner of Internal Revenue vs. Rieckermann Philippines; CTA Case No. 1855, February 24, 2020)

Facts: The assessment issued by CIR against Respondent for calendar year 2007 covering deficiency income tax, VAT, WTC and EWT is upheld by the Court. Accordingly, Respondent was ordered to pay Php554,758.02 representing deficiency taxes for calendar year 2007, inclusive of 25% surcharge ,20% deficiency interest and 20% delinquency interest computed from September 3, 2013 until December 31, 2017, which is prior to its amendment under the TRAIN Law. It has been noted that respondent had fully paid the income tax and VAT on May 15, 2014. Thus, Riekermann filed its "Motion for Partial Reconsideration", it submits that considering Section 249 of the NIRC of 1997, as amended, provides that deficiency and delinquency interest are only due until the full payment of the unpaid tax, the second part of the computation in the dispositive portion of the Assailed Decision which includes interest from September 04, 2013 to December 31, 2017 must be adjusted. Issue: Whether or not the computation of the deficiency and delinquency interest should be revised. Ruling: Yes, under Section 249 of the NIRC of 1997, as amended by Republic Act 10963, interest (on the basic deficiency tax due) shall be collected from the date prescribed for its payment until the full payment thereof.

“(B) Deficiency Interest. XXX XXX XXX

Interest shall be assessed and collected from the date prescribed for its payment until the full payment thereof, or upon issuance of a notice and demand by the Commissioner of Internal Revenue, whichever comes earlier. (C) Delinquency Interest. - In case of failure to pay:

XXX XXX XXX

(1) A deficiency tax, or any surcharge or interest thereon on the due date appearing in the notice and demand of the Commissioner, there shall be assessed and collected on the unpaid amount, interest at the rate prescribed in Subsection (A) hereof until the amount is fully paid, which interest shall form part of the tax."

From the aforementioned provision, it follows that deficiency and delinquency interests should only be assessed up to the date the taxpayer fully settles payment of the deficiency tax due. Therefore, since deficiency income tax and VAT due were already fully paid, only delinquency interest on the EWT and remaining WTC due as of September 03, 2013 shall be computed until full payment thereof.”


PEZA/SBMA Registration Certificates as proof of valid zero-rating (Air Liquide Philippines, Inc. vs. Commissioner of Internal Revenue; CTA Case No. 1844, February 26, 2020) Facts: On December 23, 2009, Air Liquide filed with the CIR, through BIR Revenue District Office (RDO) No. 121, an application for issuance of TCC for its unutilized input VAT for the fourth quarter of calendar year (CY) 2007. Six (6) days later, or on December 29, 2009, Air Liquide filed a Petition for Review with the Court in Division docketed as CTA Case No. 8017. On July 29, 2013 the case went through the Court en banc which granted Air Liquide's Petition for Review. Air Liquide faults the Court in Division for disallowing its sales to MME Technologies, Inc. for lack of PEZA Certification for the 2007 VAT zero-rating sales. Air Liquide argues that since MME Technologies, Inc. was PEZA-registered in 1999, a disputable presumption arises that its registration continues to exist from 1999 through 2010 absent any evidence to the contrary. Issue: Whether or not the court erred when it refused to rule that in accordance with Rule 131, Sec. 3 (ee) of the Rules of Court, a PEZA-registered enterprise enjoys a disputable presumption that its registration continues to exist, which is satisfactory proof of its registration unless contradicted and overcome by other evidence. Ruling: No, the Court in Division could not be faulted for disallowing sales of goods to Air Liquide customers without proof that they were PEZA/SBMA registered. Note that while the names, addresses and PEZA/SBMA Registration Nos. of Air Liquide's clients were indicated in the supporting sales invoices, the said information however, could only be verified through the presentation of the corresponding PEZA/SBMA Registration Certificates.

Disallowed Zero-Rated Sales are not necessarily subject to 12% Output VAT (Commissioner of Internal Revenue vs. MSCI Hongkong Limited; CTA Case No. 2147, February 27, 2020)

Facts: Pursuant to a Service Agreement dated April 1, 2014, respondent rendered administration, sales support and marketing, analytics, management and index research and production services in the Philippines to MSCI, Inc., a corporation established and registered in Delaware, United States of America (USA), with headquarters in New York, USA. For the services rendered to MSCI, Inc., respondent was paid service fees amounting to P195,786,948.60. On March 31, 2016, petitioner filed an Application for Tax Credits/Refund with the BIR for its alleged unutilized input VAT for the four quarters of CY 2014 in the total amount of P7,338,142.90 appending thereto documents relevant to its claim. On April 19, 2016, respondent received Letter of Authority (LOA) dated April 15, 2016, for examination of its books of accounts and other accounting records for VAT for the period covering 2014. On June 27, 2016, respondent received a letter denying the cited administrative claim for refund/tax credit. On July 26, 2016, respondent f iled the instant Petition for Review. On February 20, 2019, the Court in Division rendered the decision partially granting the Petition for Review. Aggrieved, the CIR filed this petition. Court in Division disallowed the sales amounting to US$26,084.20 or P1,156,979.30 as zero-rated sales because only the amount of US$4,400,758.14 was inwardly remitted as shown in the Transaction Credit Advances from Bank of America. Petitioner contends that the determination of respondent's output VAT liability is merely for the purpose of ascertaining respondent's entitlement of its unutilized input VAT claim for refund and not for imposing any deficiency tax. Petitioner essentially wants the Court "to determine the corresponding output VAT liability on the Php1,156,979.30 representing respondent's sale of services which do not qualify for zero rating. Issue: Whether or not the respondent's sale of services that do not qualify for zero-rating should be subjected to 12% output VAT. Ruling: No, sales were disallowed as zero-rated sales does not necessarily follow that the same should be subject to 12% VAT absent any convincing proof to that effect. Taxes are generally self-assessed. They are initially computed and


voluntarily paid by the taxpayer. The Supreme Court categorically ruled that in an action for refund of taxes allegedly erroneously paid, the Court may determine whether there are taxes that should have been paid in lieu of the taxes paid and that determining the proper category of tax that should have been paid is not an assessment but merely incidental to determining whether there should be a refund. Any liability in excess of the refundable amount, however, may not be collected in a case involving solely the issue of the taxpayer's entitlement to refund. The question of tax deficiency is distinct and unrelated to the question of petitioner's entitlement to refund. Tax deficiencies should be subject to assessment procedures and the rules of prescription. The court cannot be expected to perform the BIR's duties whenever it fails to do so either through neglect or oversight. Neither can court processes be used as a tool to circumvent laws protecting the rights of taxpayers.

Warrant of Garnishment is void in the absence of LOA/PAN/FLD (Tann Philippines, Inc. vs. Commissioner of Internal Revenue; CTA Case No. 9433, March 3, 2020)

Facts: Petitioner filed its Quarterly VAT Return for the 4th quarter of 2013 on January 24,2014, or one day before the due date of January 25,2014, which is a Saturday. On January 28, 2014 (Tuesday), petitioner made a payment on the aforesaid 4th Quarterly VAT Return. However, the same was considered by the revenue examiner as one-day late payment, on which 25% surcharge, interest and compromise penalties were imposed. Thus, on September 8, 2014, petitioner received the Audit Results/Assessment, from the Large Taxpayers Division Makati. The said Assessment Notice seeks to collect from petitioner the amount of P1,552,212.62 for the late of payment of the Quarterly VAT for the 4th quarter of 2013. Petitioner, through counsel, filed a protest against the subject Assessment Notice, requesting for a reconsideration of the assessment by way of abatement of the surcharge. A Collection Letter dated April 29, 2015 was issued by the Large Taxpayers Division-Makati, advising petitioner to settle the deficiency tax of P1,552,212.62. This was followed by the Final Notice Collection Letter dated May 21, 2015. Petitioner filed an appeal and received a Notice of Denial. In the course of review petitioner received a Warrant of Garnishment from the BIR and includes in its prayer a refund of the amount previously garnished by the respondent. Issue: Whether or not assessment notice, warrant of garnishment, surcharge, interest and compromise penalty imposed by the respond against the petitioner is valid. Ruling: NO, Assessment Notice dated August 11, 2014 is invalid due to the absence of a Letter of Authority prior to the issuance thereof. A grant of authority, through an LOA, must be made assigning a revenue officer, to perform tax assessment functions, in order that such officer may examine taxpayers and collect the correct amount of tax, or to recommend the assessment of any deficiency tax due. Precisely, not having an LOA to investigate petitioner's tax returns in the first place, the said Assessment Notice issued by the BIR is inescapably void. The absence of a Preliminary Assessment Notice and Formal Letter of Demand renders the assessment void. The subject Warrant of Garnishment is without any effect as it stems from a void assessment. As a general rule, the concerned taxpayer must first be informed that he is liable for deficiency taxes through the sending of a preassessment notice or a Preliminary Assessment Notice (PAN). Furthermore, the said taxpayer is required to be informed in writing of the law and the facts on which the assessment is made; otherwise, the assessment shall be void. Correspondingly, respondent or the BIR violated petitioner's right to due process in the assessment of the amount of P1,552,212.62. Such being the case, Assessment Notice dated August 11,2014 is still void. Since the subject tax assessment is void, the refund of the amount garnished by respondent from petitioner's bank account is in order. Respondent is ORDERED TO REFUND petitioner, or TO ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in, tile amount of P1,552,212.62.

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ASSURANCE TAX ADVISORY ACCOUNTING 22nd Floor Citibank Tower, 8741 Paseo de Roxas Salcedo Village, Makati City 1226 Philippines T: (+632) 8848 1051 | F: (+632) 8728 1014 www.bakertilly.ph

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Constantino and Partners trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. The contents of this tax alert are summaries of selected issuances from various government agencies. They do not necessarily reflect the official position of C&P. They are intended for guidance only and as such should not be regarded as a substitute for professional advice.

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