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MARCH • VOL. 3 • SERIES OF 2020

INSIGHTS is a monthly publication of BDB LAW to inform, update and provide perspectives to our clients and readers on significant tax-related court decisions and regulatory issuances (includes BIR, SEC, BSP and various government agencies).

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DISCLAIMER: The contents of this Insights are summaries of selected issuances from various government agencies, Court decisions and articles written by our experts. They are intended for guidance only and as such should not be regarded as a substitute for professional advice.

Copyright © 2019 by Du-Baladad and Associates (BDB Law). All rights reserved. No part of this issue covered by this copyright may be produced and/or used in any form or by any means – graphic, electronic and mechanical without the written permission of the publisher.

 

What's Inside ...

  1. UPDATES
    1. CTA - HIGHLIGHTS for February and March
      • COVID-19 RELATED GOVERNMENT ISSUANCES 
      • OTHER GOVERNMENT ISSUANCES AND OPINIONS
    2. COVID-19 RELATED GOVERNMENT ISSUANCES
      (please click on the link for a copy of the issuance)Regulatory Issuances
      • SC Issuances
      • BIR Issuances
      • SEC Issuances
      • IC Issuances
      • IC Opinions
      • BSP Issuances
  2. INSIGHTS
    1. Written and/or published articles
  3. OUR EXPERTS
    1. The Personalities

 

 

cta_updates
cta_updates

HIGHLIGHTS
for FEBRUARY and MARCH 2020

I. COVID-19 Government Related Issuances

A. Supreme Court

Administrative Circular No. 31-2020, March 16, 2020.

This provides for the measures to be adopted by all courts nationwide in view of the rising cases of Covid-19 infection. Among the said measures are the extensions granted for filings and submissions, to wit: 

Particulars Original Due Date Extended Due Date
 Filing of petitions and appeals, complaints, motions, pleadings and other court submissions  If falling due from 15 March 2020 until 15 April 2020  Extended for 30 days counted from 16 April 2020
 All court actions not considered urgent  If scheduled from 15 March 2020 until 15 April 2020  Suspended and shall be rescheduled
 All court actions with prescribed periods  If falling due from 15 March 2020 until 15 April 2020  Extended for 30 days counted from 16 April 2020

 

In addition, court operations nationwide are drastically reduced and hearings are suspended except on urgent matters.                                     

Administrative Circular No. 33-2020, March 16, 2020.

This outlines the guidelines for the online filing of complaint or information and posting of bail due to the rising cases of Covid-19 infection. The guidelines are as follows:

• Criminal complaints and information may be filed through email before the first and second level courts.
• Within three (3) days from the electronic filing, the Judge will personally evaluate the prosecutor’s resolution with the supporting evidence and either immediately dismiss the case or issue a warrant of arrest/commitment order.
• The Judge may likewise order the prosecutor to electronically submit additional evidence within three (3) days from notice and thereafter resolve the issue within ten (10) days from the filing of the complaint or information.
• For purposes of applying for bail, the accused may initially electronically submit the requirements to the court.
• The accused may file a motion to reduce the bond. The prosecutor may likewise be ordered to file his comment on the motion within a non-extendible period of twenty-four (24) hours. The motion and order to give comment may be sent electronically.
• The electronically transmitted approval of bail and release order shall be sufficient to cause the release of the accused. 

B. BIR

Revenue Regulation No. 5-2020, March 23, 2020.

This amends RR No. 4-2019 on the Tax Amnesty on Delinquencies insofar as the period of availment is concerned. The amendment allows for the extension of the original period of availment (until April 23, 2020) if the circumstances warrant an extension such as in case of country-wide economic of health reason/s.

Revenue Regulation No. 6-2020, March 30, 2020.

This implements the tax exemption provision of RA No. 11469, otherwise known as the “Bayanihan to Heal as One Act.” The tax exemption provisions to be implemented include the following:

 Covered transactions  Specific Tax Exemption
 Importation of critical or needed healthcare equipment or supplies intended to combat the Covid-19 public health emergency  EXEMPT from VAT, excise taxes, and other fees
Importation of materials needed to make health equipment and supplies deemed as critical or needed to address the current public health emergency by a manufacturer that is included in the master list of DTI and other incentive granting bodies   EXEMPT from VAT, excise taxes, and other fees
 Imported articles donated to or for the use of the National Government, its political subdivisions, or any other entity created by or any of its agencies not conducted for profit  EXEMPT from donor’s tax

Further, importation of critical or needed healthcare equipment or supplies or materials needed to make health equipment and supplies deemed as critical or needed shall not be subject to the issuance of Authority to Release Imported Goods (“ATRIG”).

Revenue Regulation No. 7-2020, March 30, 2020.

This extends the statutory deadlines for the submission and/or filing of the following documents and/or returns, as well as the payment of the corresponding taxes.

Revenue Regulation No. 8-2020, April 1, 2020.

This revenue regulation implements Section 4(aa) of Republic Act No. 11469, otherwise known as the “Bayanihan to Heal as One Act.”

Revenue Memorandum Circular No. 28-2020, March 18, 2020.

This prescribes the amended guidelines in the filing of the 2019 Income Tax Returns and submission of required attachments and extends the period for filing of the same until May 15, 2020. It amends the deadline as previously set out in RMC No, 25-2020.

Further, taxpayers may file and pay to any Authorized Agent Banks nearest the location of the taxpayer or to any Revenue Collection Officer (file and pay anywhere).

Revenue Memorandum Circular No. 30-2020, March 23, 202.

This amends RMC No. 29-2020 and clarifies RMC No. 28-2020 relative to the extension of deadlines for the filing of CY 2019 Income Tax Returns and other various returns and payment of taxes due thereon.

Revenue Memorandum Circular No. 31-2020, March 23, 2020.

This extends the period of submission or filing of documents and correspondences pursuant to certain provisions in the 1997 NIRC, as amended, and existing revenue regulations. The submission and/or filing of the following documents and correspondences, if falling due on the dates covered by the Enhanced Community Quarantine (“ECQ”), are granted an extension of thirty (30) days from the date of the lifting of the ECQ:

1. Letter Answer to the Notice of Informal Conference (“NIC”)
2. Response to the Preliminary Assessment Notice (“PAN”)
3. Protest Letter to the Final Assessment Notice (“FAN”)/Formal Letter of Demand (“FLD”)
4. Submission of Relevant Supporting Documents to Support the Request for Re-investigation of Audit Cases with FAN/FLD
5. Appeal/Request for Reconsideration to the Commissioner on the Final Decision on Disputed Assessment (“FDDA”)
6. Other Similar Letters and Correspondences

Revenue Memorandum Circular No. 33-2020, March 24, 2020.

This extends the deadline on availment of Tax Amnesty on Delinquencies under RR No. 4-2019 as amended by RR No. 5-2020. Under previous regulations, the tax amnesty on delinquencies may be validly availed of until April 23, 2020. However, the period for the said availment has been extended to May 23, 2020.

Revenue Memorandum Circular No. 34-2020, March 27, 2020.

This suspends the running of the statute of limitations in the assessment and collection of taxes pursuant to Section 223 of the 1997 NIRC, as amended, starting March 16, 2020 until the lifting of the state of national emergency and for sixty (60) days thereafter.

Revenue Memorandum Circular No. 35-2020, April 1, 2020.

This provides for the exemption from Documentary Stamp Tax of relief for loans pursuant to RR No. 8-2020.

C. SEC 

Memorandum Circular No. 5, March 12, 2020.

This extended the time for the filing without penalty, of the 2019 annual reports, including the applicable quarterly reports for 2020 and 2019 audited financial statements (AFS), in view of the COVID-19.

Memorandum Circular No. 6, March 12, 2020.

This laid down the guidelines for corporations on the formulation of their internal procedures and by laws which will allow directors, trustees, stockholders, members and other persons to participate and vote in meetings in absentia or through remote modes of communication.

Memorandum Circular No. 7, March 16, 2020.

This circular was issued to impose preventive measures against COVID-19 in the handling of records at the SEC. The SEC adopted the procedures for the transactions with the Electronic Records Management Division-ICTD. For example, request for plain or authenticated copy of SEC documents may be made through n online application through www.secexpress.com; or the call center facility by calling the Hotline Number (02) 8-737-8888.

Memorandum Circular No. 9, March 18, 2020.

This was issued to enumerate the guidelines for the filing of the GIS during the COVID-19 outbreak and enhanced community quarantine (ECQ).

For example, during the period of ECQ currently being imposed, where election of directors, trustees, and officers was held, the GIS shall be submitted within 30 days from actual meeting through mail (ordinary or registered), private courier, or email at This email address is being protected from spambots. You need JavaScript enabled to view it., This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it..

Notice dated 30 March 2020.

The was issued to inform the public that the SEC continues to accept online applications for the registration of Corporations and Partnerships through the Company Registration System by visiting https://crs.sec.gov.ph. However, the verification of payment and generation of certificates may be made and released by the SEC only after the ECQ has been lifted.

Notice dated 31 March 2020.

This was issued to inform investment companies, registered issuers of proprietary and non-proprietary shares/timeshares public companies, financing companies, lending companies, foundation, accredited microfinance NGO’s and publicly listed companies under the supervision of CGFD that the daily and monthly monetary penalties (Cumulative Penalties), as may be applicable, imposable upon said covered companies, from 13 March 2020, until the ECQ is lifted by order of the President.

D. BSP

Circular No. 1080, March 27, 2020.

This provides the operational relief measures for foreign exchange (FX) transactions under the Manual of Regulations on Foreign Exchange Transactions (FX Manual), which shall be effective immediately and for the duration of the declaration of “community quarantine” by the Office of the President (OP), or as may be extended by the BSP. It provides that applications for approval and registration FX transactions required to be submitted in hard copy under the FX Manual shall be submitted in soft copy via email to certain persons depending on the nature of the transactions.

Memorandum No. M-2020-007, March 13, 2020.

This provides guidelines on the submission of reports/documents and communications to the BSP- FSS to be observed, e.g., all communications and periodic reports for submission to the BSP-FSS shall be transmitted via email.

Memorandum No. M-2020-008, March 14, 2020.

This grants temporary regulatory and rediscounting relief measures for BSFIs affected by the COVID-19. As such, all BSFIs are eligible to avail of the regulatory relief package specified in Annex A within one (1) year from March 8, 2020, the date of declaration of the President of the state of public health emergency under Presidential Proclamation No. 922, and may be extended depending on the developments of the COVID-19 situation.

Memorandum No. M-2020-017, April 1, 2020.

This implements the rules and regulations of Section 4(aa) of RA No. 11469, otherwise known as the “Bayanihan to Heal as One Act” which mandates all covered institutions to implement a 30-day grace period to all loans with principal and/or interest falling due within the ECQ period without incurring interest, penalties, fees, and other charges. The 30-day grace period shall apply to each loan of individuals and entities with multiple loans.

Covered institutions are likewise prohibited from requiring their clients to waive the application of the provisions of the “Bayanihan to Heal as One Act.” No waiver previously executed by borrowers covering payments falling due during the ECQ period shall be valid.

E. Insurance Commission

Circular Letter No. 2020-13, March 16, 2020.

All insurance and reinsurance companies, MBAs and HMOs are respectfully enjoined to adopt and implement claims management policies relative to the processing and/or payment of Covid-19 coronavirus-related claims.

Circular Letter No. 2020-18, March 23, 2020.

The Commission strongly encourages all insurance, pre-need and HMO companies to extend the grace period for the payment of insurance premiums/contributions, installment amounts and/or membership fees by at least thirty-one (31) days for those unpaid during the period from March 15 to April 13, 2020 or up to a later date deemed appropriate by the company.

Circular Letter No. 2020-25, March 25, 2020.

For Insurance Policies or HMO Agreements about to expire during the effectivity of the Enhanced Community Quarantine (“ECQ”), Insurance or HMO Companies shall issue extension of coverage for such existing policies or agreements for at least thirty (30) days subject to the written request or consent, electronically or otherwise, of the insured, client, or their authorized representatives. Subject to the same terms and conditions, the policy and agreements shall only become effective once applicable pro-rata premium payment has been made, unless a credit term has been agreed upon. 

II. Other Government Issuances

A. Court of Tax Appeals Decisions.

• In a claim for refund of unutilized excess CWT, proof of actual remittance is not necessary. (Commissioner of Internal Revenue v. Univation Motor Philippines, Inc. (formerly Nissan Motor Philippines, Inc., February 3, 2020)

• Claim for exemption from real property tax is subject to the requirements of “payment under protest” and the rule on exhaustion of administrative remedies. (National Food Authority v. Province of Nueva Vizcaya, Rhoda D. Soriano-Moreno et al., CTA AC Case No. 192, February 3, 2020)

• Non-submission of complete documents at the administrative level is not fatal to a claim for refund of unutilized excess CWT at the judicial level. (Commissioner of Internal Revenue v. Stateland, Inc., February 5, 2020)

• An assessment that is indicated for the first time only in the FDDA is void. (Commissioner of Internal Revenue v. First Sumiden Circuits, Inc., CTA EB No. 1831, February 12, 2020)

• An assessment contains not only a computation of tax liabilities, but also a demand for payment within a prescribed period. (San Miguel Foods, Inc. v. Commissioner of Internal Revenue, CTA Case No. 9241, March 02, 2020)

• A motion to reopen should be filed before judgment is made. A motion to reopen may properly be presented only after either or both parties have formally offered and closed their evidence, but before judgment. (Carmen Copper Corporation v. Commissioner of Internal Revenue, CTA EB No. 2018, March 09, 2020)

• All offers for compromise must be in writing or in cases wherein it is not applicable, the compromise agreement regarding penalties must be signed by both the taxpayer and the CIR. (Commissioner of Internal Revenue vs. Frankfort, Inc., CTA EB No. 1947, March 9, 2020)

• The 30-day reglementary period for filing an appeal with the CTA in case of full or partial denial of protest by the CIR is not tolled by resorting to a request for reconsideration with the CIR. (JG Summit Holdings, Inc. v. Commissioner of Internal Revenue, CTA Case No. 9147, March 12, 2020)

B. BIR.

 

Revenue Memorandum Circular No. 11-2020, February 6, 2020.

This amends RMC No. 57-2019 which clarifies certain issues on tax amnesty on delinquencies.

RMC No. 57-2019 RMC No. 11-2020

 Q22. Will the tax liabilities covered by a FAN which was timely protested yet withdrawn on or before April 24, 2019 be considered delinquent account qualified for tax amnesty?

A22. If the protest was withdrawn on or before April 24, 2019, the tax liabilities shall be considered delinquent from the date of lapse of the period to protest, as if there is no protest filed. The taxpayer shall be qualified to avail of the tax amnesty on delinquencies provided the delinquent accounts pertain to taxable year 2017 and prior years and the period to protest lapsed on or before April 24, 2019.

 Q22. Will the tax liabilities covered by a FAN/FLD or FDDA which was timely protested or disputed, but subject to protest to the FAN/FLD or appeal to the FDDA, as the case may be, was withdrawn on or before April 23, 2020 be considered delinquent account qualified for tax amnesty?

A22. Yes, if the protest or appeal was withdrawn at any time on or before April 23, 2020, and thus, the tax liabilities reverted back to being delinquent on or before April 24, 2019 (refer to next Q&A), provided that the delinquent account pertains to taxable year 2017 and prior years.

 Q23. In relation to question No. 22, what will happen if the protest was withdrawn after
April 24, 2019, the effectivity date of RR No. 4-2019?

A23. Since there is a protest filed and it was only withdrawn after April 24, 2019, the tax liabilities stated in the FAN cannot be considered delinquent accounts as of April 24, 2019 and the taxpayer is not qualified to avail of the tax amnesty on delinquencies.

 Q23. In relation to Q22, what is the effect of the withdrawal of protest/appeal to the FAN/FLD/FDDA?

A23. Upon the withdrawal of the protest or appeal to the FAN/FLD or FDDA, respectively, the effect is that it is as if no protest or appeal was filed, and therefore, the assessment contained therein became final and executory, thereby delinquent, upon the lapse of the thirty (30)-day period, reckoned from receipt of such FAN/FLD or FDDA, within which to file a protest or appeal, as the case may be. In such case, the FAN/FLD or FDDA, whose protest or appeal was subsequently withdrawn should have been received at the latest on March 25, 2019, to be considered delinquent on or before April 24, 2019.

 Q29. Can a taxpayer be considered to have fully complied with the requirements of RR No. 4-2019 if the tax amnesty amount was paid on the last day of the one-year availment period but failed to file the TAR on the same date?

A29. No. Section 5(C) of RR No. 4-2019 provides that availment of tax amnesty on delinquencies shall be considered fully complied with upon the completion of the enumerated steps which includes the filing/submission of the TAR with complete documentary requirements to the concerned office within the one-year availment period.

 Q29. Can a taxpayer be considered to have fully complied with the requirements of RR No. 4-2019 if the tax amnesty amount was paid on the last day of the one-year availment period but failed to file the TAR on the same date?

A29. No. Section 5(C) of RR No. 4-2019 provides that availment of tax amnesty on delinquencies shall be considered fully complied with upon the completion of the enumerated steps which includes the filing/submission of the TAR with complete documentary requirements to the concerned office within the one-year availment period. However, to give every opportunity to delinquent taxpayers who have secured the Certificate of Tax Delinquencies/Tax Liabilities and endorsement of the Acceptance Payment Form but have paid the amnesty tax due on April 23, 2020, the last day of the availment period, an extended period of 30 days shall be given for the
submission of the complete documentary requirements.

   

Q40. What are the 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?

A40. The following instances are considered invalid making the assessment final and executory:

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 filed with the duly authorized representative of the CIR who signed the FAN/FLD;
4. The appeal to the FDDA 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; and
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.

An invalid protest or appeal does not toll the running of the 30-day prescriptive period to file such protest or appeal. Accordingly, the assessment becomes final and executory after the lapse of such 30-day prescriptive period, reckoned from receipt of the FAN/FLD or FDDA.

Revenue Memorandum Circular No. 15-2020, February 12, 2020.

This enjoins revenue officers assigned to a case to furnish a copy of printed guidelines to taxpayer during the Discussion of Discrepancy in order to inform the taxpayer on the proper procedures in responding to deficiency assessment arising from the conduct of audit/investigation.

C. BSP.

• Circular No. 1073, February 10, 2020 – This extends the Liberalized Entry and Scope of Operations of Foreign Banks (Transitory Provision) on SBL of Foreign Bank Branches.

• Circular No. 1079, March 9, 2020 – This is an Amendment to the Risk-Based Capital Adequacy Framework for Stand-Alone Thrift Banks, Rural Banks and Cooperative Banks, aimed at improving the quality of regulatory capital of covered banks.

• Memorandum No. M-2020-005, March 5, 2020 – This adopts the Supervisory Assessment Framework (“SAFr”) of the BSP.

D. Insurance Commission.

• CL No. 2020-10, March 10, 2020 – This provides for guidelines for the submission of 2019 Annual Statements (“AS”) for all non-life insurance and professional reinsurance companies authorized to do business in the Philippines.

• CL No. 2020-15, March 17, 2020 – This provides for guidelines for the submission of 2019 AS for life insurance companies and life units of composite insurance companies.

• CL No. 2020-16, March 17, 2020 – This provides for guidelines for the submission of 2019 AS for mutual benefit associations (“MBA”).

• CL No. 2020-17, March 17, 2020 – This requires every MBA to file with the IC its corresponding AS using the revised template uploaded in the IC website.

E. Insurance Commission Opinions.

• LO No. 2020-02, March 4, 2020 – Subject to certain exceptions, an individual who has secured a life insurance policy on his own life may designate any person as beneficiary.

• LO No. 2020-03, March 11, 2020 – The premium for non-life insurance is non-tariffed and would depend on the assessment of risk made by the underwriter of the insurance company.

Other Issuances

In a claim for refund of unutilized excess CWT, proof of actual remittance is not necessary.

In a claim for refund of unutilized excess CWT, proof of actual remittance is not necessary.

In a claim for refund of unutilized excess CWT, the taxpayer is not obligated to prove the fact of remittance of the withholding tax. The withholding tax certificate, complete in its relevant details, and with a written statement that it was made under the penalties of perjury, is sufficient and competent proof that taxes are withheld.

In fact, such taxes withheld by the withholding agent are deemed to be the full and final payment of the income tax due from the income earner or payee. Proof of actual remittance is not necessary, as the proof of remittance is the responsibility of the withholding agent, and not of the taxpayer who is claiming for a refund. (Commissioner of Internal Revenue v. Univation Motor Philippines, Inc. (formerly Nissan Motor Philippines, Inc., February 3, 2020)

Claim for exemption from real property tax is subject to the requirements of “payment under protest” and the rule on exhaustion of administrative remedies under Sections 252, 226 and 229 of the LGC..

Taxpayer is claiming exemption from real property tax on the ground that it is a government instrumentality.

In ruling against the taxpayer, the court held that a claim for exemption from payment of real property taxes is a question of the reasonableness or correctness of the assessment by the local assessor. Having established such, the taxpayer should have first complied with the requirement of payment under protest and the rule on exhaustion of administrative remedies.

In this regard, the taxpayer must have first paid the tax and then filed a protest with the local treasurer within 30 days from date of payment of tax. If the protest was denied or after the 60-day period to decide the protest had lapsed, the taxpayer must have appealed to the Local Board of Assessment Appeals (“LBAA”) within 60 days from the denial of the protest or the lapse of the 60-day period to decide the protest. If the taxpayer was unsatisfied with the LBAA’s decision, the taxpayer must have appealed before the Central Board of Assessment Appeals (“CBAA”) within 30 days from receipt of the LBAA’s decision. If the taxpayer’s appeal was denied by the CBAA, the latter’s decision must have been appealed to the CTA En Banc.

For the taxpayer’s failure to exhaust the administrative remedies available to it and to comply with the requirement of payment under protest, the assessment therefore attained finality and collection would be proper. (National Food Authority v. Province of Nueva Vizcaya, Rhoda D. Soriano-Moreno et al., CTA AC Case No. 192, February 3, 2020)

Non-submission of complete documents at the administrative level is not fatal to a claim for refund of unutilized excess CWT at the judicial level..

The court ruled that the non-submission of the documents enumerated under Revenue Memorandum Order (“RMO”) No. 53-98 and Revenue Regulations (“RR”) No. 2-2006 would not ipso facto result to the denial of the claim for tax refund or credit. RR No. 2-2006 merely imposes a penalty of fine for non-submission of the information or statement required therein.

Cases before the CTA are litigated de novo. The court is not precluded from accepting evidence assuming that these were not presented at the administrative level. The same principle is applicable in claims for refund of input taxes. (Commissioner of Internal Revenue v. Stateland, Inc., February 5, 2020)

An assessment indicated for the first time only in the FDDA is void..

The court ruled that the assessment arising from the taxpayer’s alleged "realized forex gain not subjected to tax" that only appeared in the FDDA, and was not found in the PAN, FAN and FLD, is void because this violated the taxpayer’s right to due process.

Since an entirely new assessment item in the form of "realized forex gain not subjected to tax" was included in the FDDA, the taxpayer was not given the chance to refute within the administrative level the said assessment. It should therefore be cancelled. (Commissioner of Internal Revenue v. First Sumiden Circuits, Inc., CTA EB No. 1831, February 12, 2020)

The 1.5% specialty realty tax rate on equipment and machinery under the RE Law covers the 1% SEF under the LGC..

In this case, the provincial treasurer maintains that the taxpayer did not overpay realty tax on its machinery and equipment because the additional levy on real property for the Special Education Fund (“SEF”) is apart and distinct from the special realty tax at 1.5% rate levied pursuant under the RE Law.

In ruling in favor of the taxpayer, the court held that the fact that RE Law was enacted on December 16, 2008 while assessments of the provincial treasurer were based on the Revised Revenue Code of Provincial Government of Ilocos Norte (“PGIN”), Provincial Ordinance No. 2013-001, which was made effective on April 14, 2014, later than the RE Law, is of no moment. The Revised Revenue Code of PGIN derives its authority to tax from the LGC which was enacted on January 1, 1992, almost 16 years prior to the RE Law. The RE Law, being the most recent legislation is viewed by the court an express and real intention on the part of Congress to limit the LGU's delegated taxing power on renewable energy resources within their jurisdiction.

Keeping this in mind, interpreting the RE Law in a manner which allows the imposition of an additional 1% tax for SEF on top of the capped rate of 1.5% special realty tax creates a patent absurdity. This would result in allowing the provincial treasurer to apply the maximum special rate for RE machinery and equipment of 1.5% separately for the real property tax and the SEF levy. This effectively nullifies the incentive under the RE Law because RE Developers will end up incurring the same property tax costs for owning machinery and equipment. (Josephine P. Calajate, Acting Provincial Treasurer of the Province of Ilocos Norte v. North Luzon Renewable Energy Corporation, CTA EB No. 1812, February 26, 2020)

An assessment contains not only a computation of tax liabilities, but also a demand for payment within a prescribed period..

The BIR argues that it is misplaced and without legal basis to say that a “due date” is a mandatory requirement for the validity of the assessment under Section 228 of the 1997 NIRC, as amended.

The CTA held that an assessment must not only indicate the legal and factual bases of the assessment but must also state categorically a demand for payment of the computed tax liabilities within a specific period. Indicating a fixed and definite period within which a taxpayer must pay the deficiencies is necessary to the validity of an assessment, and in the absence thereof, it negates the BIR’s demand for payment making the FAN defective and therefore void. As a rule, a void assessment bears no valid fruit. Thus, the BIR is mistaken in saying that a “due date” is a mandatory requirement for the validity of an assessment. (San Miguel Foods, Inc. v. Commissioner of Internal Revenue, CTA Case No. 9241, March 02, 2020)

A motion to reopen should be filed before judgment is made. A motion to reopen may properly be presented only after either or both parties have formally offered and closed their evidence, but before judgment..

This is a claim for VAT refund. After the CTA partially granted the claims, the taxpayer filed a Motion for Reconsideration (with Motion to Re-open Case for the Presentation of Additional Evidence) which the former denied.

The CTA En Banc held that the taxpayer cannot avail the said remedy in view of the fact that it seeks to reopen the trial of the case only after the Court has already rendered its judgment. A motion to reopen should be filed before a judgment is made. A motion to reopen may properly be presented only after either or both parties have formally offered, and closed their evidence, but before judgment.

Even if such motion is treated as a motion for new trial, its motion does not fall under any of the specific well-defined grounds, namely, fraud, accident, mistake, excusable negligence, or newly discovered evidence. Bare invocation of interest of substantial justice will not automatically compel the Court to suspend procedural rules. (Carmen Copper Corporation v. Commissioner of Internal Revenue, CTA EB No. 2018, March 09, 2020)

All offers for compromise must be in writing or in cases wherein it is not applicable, the compromise agreement regarding penalties must be signed by both the taxpayer and the CIR..

The BIR assessed the taxpayer for deficiency taxes which includes penalties amounting to P5,600,000.00 for the taxpayer’s failure to keep books of accounts, failure to issue official receipts, failure to maintain back-end report, and failure to account for point-of-sale machines. The taxpayer argued that the penalties were excessive and illegal.

The CTA ruled against the BIR. It held that under RMO No. 19-2007 known as "The Consolidated Revised Schedule of Compromise Penalties for Violations of the National Internal Revenue Code", strict adherence to the schedule of penalties listed in the Annex A is required. It also provided that in all cases, all offers must be in writing and in the form designated as Annex "B" in the said RMO. However, there is nothing in evidence showing that there was a written compromise offer of penalties as required in RMO No. 19-2007. Further, the amount of compromise penalties assessed by the BIR did not follow the schedule of penalties. (Commissioner of Internal Revenue vs. Frankfort, Inc., CTA EB No. 1947, March 9, 2020)

Nowhere in Section 133(g) of the LGC does it hint that presentation of a BOI Certificate of Registration at the time of payment of local tax is a prerequisite for the taxpayer to reap the benefits of such provision..

The taxpayer was assessed Local Business Tax (“LBT”) which it paid before it was issued a Certificate of Business Retirement by the City Government of Makati. Subsequently, the taxpayer sent a letter to the City Treasurer, requesting for the refund of LBT, claiming that it was registered as a pioneer enterprise with the Board of Investments (BOI).

The City of Makati argues that the taxpayer’s failure to present its purported BOI Certificate of Registration at the time it paid the subject LBT rendered the rejection of its claim for cash refund in order and justified.

The CTA En Banc ruled that nowhere in Section 133(g) of the Local Government Code (“LGC”) hints that presentation of a BOI Certificate of Registration as pioneer or non-pioneer enterprise at the time of payment of local tax is a prerequisite for the taxpayer to reap the benefits of such provision. It simply requires an entity to be a BOI-registered pioneer or non-pioneer enterprise to be exempt from local taxes, spanning six (6) years for pioneer enterprise, or four (4) years for non-pioneer enterprise, both reckoned from the moment of its registration, no more, no less. (City Government of Makati v. South Luzon Tollway Corporation, CTA EB No. 1928, March 11, 2020)

Failure of the reassigned revenue officer to secure a new letter of authority results in lack of authority on the RO and renders the assessment invalid..

The BIR seeks reconsideration of the Decision promulgated by the CTA, finding the deficiency assessments against the taxpayer void for lack of authority of the reassigned RO to conduct the examination.

In denying the motion for reconsideration, the CTA held that only BIR officials authorized to issue and sign Letters of Authority are the Regional Directors, the Deputy Commissioners and the Commissioner. Considering that only the above officials are given the power to authorize examination of taxpayers for assessment purposes through the issuance of LOA, it is only them who can effect any modification or amendment to a previously-issued LOA, should the need therefor arises. Thus, Chief of the Regular Large Taxpayers Audit Division 1 does not have any power to authorize audit examination of taxpayers or to effect any modification or amendment to a previously-issued LOA.

Absent any prior authority on the part of the revenue officers who conducted the audit examination of taxpayer's books of accounts and other accounting records, the deficiency tax assessment arising therefrom is a nullity. (First Life Financial Co., Inc. v. Commissioner of Internal Revenue, CTA Case No. 9029, March 11, 2020)

The 30-day reglementary period for filing an appeal with the CTA in case of full or partial denial of protest by the CIR is not tolled by resorting to a request for reconsideration with the CIR..

The taxpayer argued that the 30-day reglementary period for filing an appeal with the CTA should begin to run from its receipt of the Revised Final Decision on Disputed Assessment (“RFDDA”).

In ruling against the taxpayer, the CTA elucidated the three options by which a taxpayer may appeal the denial of its protest: A whole or partial denial by the CIR's authorized representative may be appealed to the CIR or the CTA. A whole or partial denial by the CIR may be appealed to the CTA. The CIR or the CIR's authorized representative's failure to act may be appealed to the CTA. There is no mention of an appeal to the CIR from the failure to act by the CIR's authorized representative. Here, the taxpayer, instead of filing a petition before the Court within thirty (30) days from receipt of the FDDA, it opted to file a request for reconsideration with the CIR. With the procedure of appeal already clearly laid down, a resort to a request for reconsideration with the CIR did not then toll the running of the reglementary period within which taxpayer's appeal must be elevated to the Court. (JG Summit Holdings, Inc. v. Commissioner of Internal Revenue, CTA Case No. 9147, March 12, 2020)

 sc_decisions

                                              sc_decisions

I. COVID-19 RELATED GOVERNMENT ISSUANCES

 

Administrative Circular No. 28-2020, March 13 2020.

This provides for the temporary suspension/restriction on the personal follow-up of pending transactions. The suspension/restriction covers transactions throughout the various offices of the Supreme Court.

Administrative Circular No. 29-2020, March 13, 2020.

This provides for the measures to be adopted by the Court of Appeals, Sandiganbayan, and Court of Tax Appeals in view of the rising cases of Covid-19 infection. Such measures include, but is not limited to, limiting access to the halls of justice and court premises to only those with official business as well as subjecting those entering the halls of justice and court premises to strict procedures.

Administrative Circular No. 30-2020, March 13, 2020.

This orders all courts in the National Capital Judicial Region to operate only with a skeleton staff effective March 15, 2020 to April 12, 2020. The skeleton staff must be able to attend to urgent matters brought to the attention of their respective courts. On the other hand, courts outside the National Capital Judicial Region shall continue to fully operate unless otherwise provided.

Administrative Circular No. 31-2020, March 16, 2020.

This provides for the measures to be adopted by all courts nationwide in view of the rising cases of Covid-19 infection. Among the said measures are the extensions granted for filings and submissions, to wit:

 Particulars  Original Due Date  Extended Due Date
Filing of petitions and appeals, complaints, motions, pleadings and other court submissions If falling due from 15 March 2020 until 15 April 2020 Extended for 30 days counted from 16 April 2020
All court actions not considered urgent If scheduled from 15 March 2020 until 15 April 2020 Suspended and shall be rescheduled
All court actions with prescribed periods If falling due from 15 March 2020 until 15 April 2020 Extended for 30 days counted from 16 April 2020
In addition, court operations nationwide are drastically reduced and hearings are suspended except on urgent matters.

Administrative Circular No. 32-2020, March 16, 2020.

This provides for revised and additional measures to be adopted by all courts nationwide in view of the rising cases of Covid-19 infection. Among the revised and additional measures are the physical closure of all courts nationwide effective March 23, 2020.

Administrative Circular No. 33-2020, March 16, 2020.

This outlines the guidelines for the online filing of complaint or information and posting of bail due to the rising cases of Covid-19 infection. The guidelines are as follows:

1. Criminal complaints and information may be filed through email before the first and second level courts.
2. Within three (3) days from the electronic filing, the Judge will personally evaluate the prosecutor’s resolution with the supporting evidence and either immediately dismiss the case or issue a warrant of arrest/commitment order.
3. The Judge may likewise order the prosecutor to electronically submit additional evidence within three (3) days from notice and thereafter resolve the issue within ten (10) days from the filing of the complaint or information.
4. For purposes of applying for bail, the accused may initially electronically submit the requirements to the court.
5. The accused may file a motion to reduce the bond. The prosecutor may likewise be ordered to file his comment on the motion within a non-extendible period of twenty-four (24) hours. The motion and order to give comment may be sent electronically.
6. The electronically transmitted approval of bail and release order shall be sufficient to cause the release of the accused.

 

 

bir_issuances
bir_issuances

 

I. COVID-19 RELATED GOVERNMENT ISSUANCES

 

Revenue Regulation No. 5-2020, March 23, 2020.

This amends RR No. 4-2019 on the Tax Amnesty on Delinquencies insofar as the period of availment is concerned. The amendment allows for the extension of the original period of availment (until April 23, 2020) if the circumstances warrant an extension such as in case of country-wide economic of health reason/s.

Revenue Regulation No. 6-2020, March 30, 2020.

This implements the tax exemption provision of RA No. 11469, otherwise known as the “Bayanihan to Heal as One Act.” The tax exemption provisions to be implemented include the following:           

 Covered transactions  Specific Tax Exemption
Importation of critical or needed healthcare equipment or supplies intended to combat the Covid-19 public health emergency EXEMPT from VAT, excise taxes, and other fees
Importation of materials needed to make health equipment and supplies deemed as critical or needed to address the current public health emergency by a manufacturer that is included in the master list of DTI and other incentive granting bodies EXEMPT from VAT, excise taxes, and other fees
Imported articles donated to or for the use of the National Government, its political subdivisions, or any other entity created by or any of its agencies not conducted for profit EXEMPT from donor’s tax

Further, importation of critical or needed healthcare equipment or supplies or materials needed to make health equipment and supplies deemed as critical or needed shall not be subject to the issuance of Authority to Release Imported Goods (“ATRIG”).   

Revenue Regulation No. 7-2020, March 30, 2020.

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

 Particulars  Original Due Date Extended Due Date 
Filing of VAT refund application covering the quarter ending 31 March 2018 31 March 2020 30 April 2020
All ONETT Transactions – BIR Forms 1606, 1706, 1707, 1800, and 1801 Due date falling within the ECQ Extended for 30 days from its due date
Filing and Payment of Monthly Value-Added Tax Declaration for Non-eFPS Filers (for the month of February 2020) – BIR Form 2550M 20 March 2020 20 April 2020
eFiling/Filing and ePayment/Payment of Monthly Remittance of Percentage Tax on Winnings and Prizes Withheld by Race Track Operators (for the month of February 2020) – BIR Form 1600WP 20 March 2020 20 April 2020

eFiling of Monthly Value-Added Tax Declaration for eFPS Filers (for the month of February 2020) – BIR Form 2550M

• Group E
• Group D
• Group C
• Group B
• Group A (includes ePayment)

 

 

 

• 21 March 2020
• 22 March 2020
• 23 March 2020
• 24 March 2020
• 25 March 2020

 

 

 

• 21 April 2020
• 22 April 2020
• 23 April 2020
• 24 April 2020
• 27 April 2020

ePayment of Monthly Value-Added Tax Declaration for eFPS Filers (for the month of February 2020) – BIR Form 2550M for Groups E, D, C, and B 25 March 2020 27 April 2020
eFiling/Filing and ePayment/Payment of Quarterly Value-Added Tax Declaration for eFPS and Non-eFPS Filers (for the quarter ending February 29, 2020) – BIR Form 2550Q 25 March 2020 27 April 2020
Submission of Quarterly Summary Lists of Sales/Purchases for Non-eFPS (for the quarter ending February 29, 2020) 25 March 2020 27 April 2020
Submission of Sworn Statement of Manufacturer’s or Importer’s Volume of Sales for each Particular Brand of Alcohol, Tobacco Products, and Sweetened Beverage Products (for the quarter ending February 29, 2020) 25 March 2020 27 April 2020
Registration of Computerized Books of Accounts and Other Accounting Records in Electronic Format (for the fiscal year ending February 29, 2020) 30 March 2020 30 April 2020
Submission of Hard Copies of Financial Statements and Scanned Copies of Form 2307 to e-Filed 1702RT, MX, and EX (for the fiscal year ending November 30, 2019) 30 March 2020 30 April 2020
Submission of 2019 Inventory List (for the fiscal year ending February 29, 2020) 30 March 2020 30 April 2020
eSubmission of Quarterly Summary Lists of Sales/Purchases for eFPS (for the quarter ending February 29, 2020) 30 March 2020 30 April 2020
eFiling/Filing and ePayment/Payment of Quarterly Income Tax Return for Corporation, Partnerships, and Other Non-Individual Taxpayers (for the quarter ending January 31, 2020) – BIR Form 1702Q 31 March 2020 30 April 2020
Filing/Submission of Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes – BIR Form 1604-CF 31 March 2020 30 April 2020
Submission of Certificate of Compensation Payment – BIR Form 2316 31 March 2020 30 April 2020
Filing/Submission of Annual Information Return of Creditable Income Taxes Withheld (Expanded) together with its alphalist – BIR Form 1604-E 31 March 2020 30 April 2020
eFiling/Filing and ePayment/Payment of Documentary Stamp Tax Declaration, Including One-Time Transactions (for the month of March 2020) – BIR Forms 2000 and 2000-OT 5 April 2020 5 May 2020
eSubmission of Monthly eSales Report of all Taxpayers using CRM/POS with TIN ending in even numbers (for the month of March 2020) 8 April 2020 8 May 2020
eFiling/Filing and ePayment/Payment of Monthly Remittance of Value-Added Tax and Other Percentage Taxes Withheld, with Monthly Alphalist of Payees, and Withholding Tax Remittance for Onerous Transfer of Real Property Other Than Capital Asset (for the month of March 2020) – BIR Forms 1600 and 1606 10 April 2020 11 May 2020
eFiling/Filing and ePayment/Payment of Monthly Remittance of Value-Added Tax and Other Percentage Taxes Withheld, with Monthly Alphalist of Payees, and Monthly Remittance of Income Taxes Withheld on Compensation (for the month of March 2020) – BIR Forms 1600 and 1601C (for National Government Agencies) 10 April 2020 11 May 2020
Filing and Payment of Excise Tax Returns for Mineral Products (for the month of March 2020) – BIR Form 2200M 10 April 2020 11 May 2020

Filing and Payment of Monthly Remittance of Income Taxes Withheld on Compensation for Non-eFPS Filers(for the month of March 2020) – BIR Form 1601C

10 April 2020 11 May 2020
eSubmission of Monthly eSales Report of all Taxpayers using CRM/POS with TIN ending in odd numbers (for the month of March 2020) 10 April 2020 11 May 2020
eFiling of Monthly Remittance of Income Taxes Withheld on Compensation for eFPS Filers (for the month of March 2020) – BIR Form 1601C
• Group E
• Group D
• Group C
• Group B
• Group A (includes ePayment)

 

 

• 11 April 2020
• 12 April 2020
• 13 April 2020
• 14 April 2020
• 15 April 2020

 

 

• 11 May 2020
• 12 May 2020
• 13 May 2020
• 14 May 2020
• 15 May 2020

eFiling/Filing and ePayment/Payment of the Following Annual Income Tax Returns for Individuals with Required Attachments (for calendar year ending December 31, 2019):
• Earning Purely Compensation Income – BIR Form 1700
• Mixed Income Earner – BIR Form 1701
• Earning Income Purely from Business/Profession – BIR Form 1701A
15 April 2020 15 May 2020
eFiling/Filing and ePayment/Payment of the Following Annual Income Tax Returns for Corporations, Partnerships, and Other Non-Individual Taxpayers with Required Attachments (for calendar year ending December 31, 2019):
• Subject Only to Regular Income Tax Rate – BIR Form 1702-RT
• Exempt from Income Tax with No Other Taxable Income – BIR Form 1702-EX
• Mixed Income Subject to Multiple Income Tax Rates or to Special/Preferential Tax Rates – BIR Form 1702-MX
15 April 2020 15 May 2020
ePayment of Monthly Remittance of Income Taxes Withheld on Compensation for eFPS Filers (for the month of March 2020) – BIR Form 1601C for Groups E, D, C, and B 15 April 2020 15 May 2020
eSubmission of Quarterly Summary List of Machines (CRM-POS) Sold by All Machine Distributors/Dealers/ Vendors/Suppliers (for the quarter ending March 31, 2020) 15 April 2020 15 May 2020
Registration of Bound Loose Leaf Books of Accounts/ Invoices/Receipts and Other Accounting Records (for the fiscal year ending March 31, 2020) 15 April 2020 15 May 2020
Submission of List of Medical Practitioners (for the quarter ending March 31, 2020) 15 April 2020 15 May 2020
Other reportorial requirements omitted Due  date  falling  within the  Enhanced Community  Quarantine (“ECQ”)                                                                                                                                  Extended   for   30  days   from   its   due   date                                                                                                                                                                 

 

Revenue Regulation No. 8-2020, April 1, 2020.

This revenue regulation implements Section 4(aa) of Republic Act No. 11469, otherwise known as the “Bayanihan to Heal as One Act” which directs all banks, quasi-banks, financing companies, lending companies, and other financial institutions, public and private, including the GSIS, SSS, and Pag-ibig, to implement a thirty (30)-day grace period for the payment of all loans as well as credit card payments falling due within the ECQ period without incurring interest, penalties, fees, or other charges. Persons with multiple loans shall likewise be given the minimum thirty (30)-day grace period for every loan.

In addition, no Documentary Stamp Tax shall apply to credit restructuring, micro-lending including those obtained from pawnshops and extensions thereof during the ECQ period

Revenue Memorandum Circular No. 28-2020, March 18, 2020.

This prescribes the amended guidelines in the filing of the 2019 Income Tax Returns and submission of required attachments and extends the period for filing of the same until May 15, 2020. It amends the deadline as previously set out in RMC No, 25-2020.

Further, taxpayers may file and pay to any Authorized Agent Banks nearest the location of the taxpayer or to any Revenue Collection Officer (file and pay anywhere).

Revenue Memorandum Circular No. 30-2020, March 23, 2020.

This amends RMC No. 29-2020 and clarifies RMC No. 28-2020 relative to the extension of deadlines for the filing of CY 2019 Income Tax Returns and other various returns and payment of taxes due thereon. The extended deadlines are as follows:

 Particulars  Original Due Date  Extended Due Date
Filing and Payment of Monthly Value-Added Tax Declaration for Non-eFPS Filers (for the month of February 2020) – BIR Form 2550M 20 March 2020 20 April 2020
eFiling/Filing and ePayment/Payment of Monthly Remittance of Percentage Tax on Winnings and Prizes Withheld by Race Track Operators (for the month of February 2020) – BIR Form 1600WP 20 March 2020 20 April 2020
eFiling of Monthly Value-Added Tax Declaration for eFPS Filers (for the month of February 2020) – BIR Form 2550M
• Group E
• Group D
• Group C
• Group B
• Group A (includes ePayment)

 

• 21 March 2020
• 22 March 2020
• 23 March 2020
• 24 March 2020
• 25 March 2020

 

• 21 April 2020
• 22 April 2020
• 23 April 2020
• 24 April 2020
• 27 April 2020

ePayment of Monthly Value-Added Tax Declaration for eFPS Filers (for the month of February 2020) – BIR Form 2550M for Groups E, D, C, and B 25 March 2020 27 April 2020
eFiling/Filing and ePayment/Payment of Quarterly Value-Added Tax Declaration for eFPS and Non-eFPS Filers (for the quarter ending February 29, 2020) – BIR Form 2550Q 25 March 2020 27 April 2020
Submission of Quarterly Summary Lists of Sales/Purchases for Non-eFPS (for the quarter ending February 29, 2020) 25 March 2020 27 April 2020
Submission of Sworn Statement of Manufacturer’s or Importer’s Volume of Sales for each Particular Brand of Alcohol, Tobacco Products, and Sweetened Beverage Products (for the quarter ending February 29, 2020) 25 March 2020 27 April 2020
Registration of Computerized Books of Accounts and Other Accounting Records in Electronic Format (for the fiscal year ending February 29, 2020) 30 March 2020 30 April 2020
Submission of Hard Copies of Financial Statements and Scanned Copies of Form 2307 to e-Filed 1702RT, MX, and EX (for the fiscal year ending November 30, 2019) 30 March 2020 30 April 2020
Submission of 2019 Inventory List (for the fiscal year ending February 29, 2020) 30 March 2020 30 April 2020
eSubmission of Quarterly Summary Lists of Sales/Purchases for eFPS (for the quarter ending February 29, 2020) 30 March 2020 30 April 2020
eFiling/Filing and ePayment/Payment of Quarterly Income Tax Return for Corporation, Partnerships, and Other Non-Individual Taxpayers (for the quarter ending January 31, 2020) – BIR Form 1702Q 31 March 2020 30 April 2020
Filing/Submission of Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes – BIR Form 1604-CF 31 March 2020 30 April 2020
Submission of Certificate of Compensation Payment – BIR Form 2316 31 March 2020 30 April 2020
Filing/Submission of Annual Information Return of Creditable Income Taxes Withheld (Expanded) together with its alphalist – BIR Form 1604-E 31 March 2020 30 April 2020
eFiling/Filing and ePayment/Payment of Documentary Stamp Tax Declaration, Including One-Time Transactions (for the month of March 2020) – BIR Forms 2000 and 2000-OT 5 April 2020 5 May 2020
eSubmission of Monthly eSales Report of all Taxpayers using CRM/POS with TIN ending in even numbers (for the month of March 2020) 8 April 2020 8 May 2020
eFiling/Filing and ePayment/Payment of Monthly Remittance of Value-Added Tax and Other Percentage Taxes Withheld, with Monthly Alphalist of Payees, and Withholding Tax Remittance for Onerous Transfer of Real Property Other Than Capital Asset (for the month of March 2020) – BIR Forms 1600 and 1606 10 April 2020 11 May 2020
eFiling/Filing and ePayment/Payment of Monthly Remittance of Value-Added Tax and Other Percentage Taxes Withheld, with Monthly Alphalist of Payees, and Monthly Remittance of Income Taxes Withheld on Compensation (for the month of March 2020) – BIR Forms 1600 and 1601C (for National Government Agencies) 10 April 2020 11 May 2020
Filing and Payment of Excise Tax Returns for Mineral Products (for the month of March 2020) – BIR Form 2200M 10 April 2020 11 May 2020
Filing and Payment of Monthly Remittance of Income Taxes Withheld on Compensation for Non-eFPS Filers (for the month of March 2020) – BIR Form 1601C 10 April 2020 11 May 2020
eSubmission of Monthly eSales Report of all Taxpayers using CRM/POS with TIN ending in odd numbers (for the month of March 2020) 10 April 2020 11 May 2020
eFiling of Monthly Remittance of Income Taxes Withheld on Compensation for eFPS Filers (for the month of March 2020) – BIR Form 1601C
• Group E
• Group D
• Group C
• Group B
• Group A (includes ePayment)

 

• 11 April 2020
• 12 April 2020
• 13 April 2020
• 14 April 2020
• 15 April 2020

 

• 11 May 2020
• 12 May 2020
• 13 May 2020
• 14 May 2020
• 15 May 2020

eFiling/Filing and ePayment/Payment of the Following Annual Income Tax Returns for Individuals with Required Attachments (for calendar year ending December 31, 2019):
• Earning Purely Compensation Income – BIR Form 1700
• Mixed Income Earner – BIR Form 1701
• Earning Income Purely from Business/Profession – BIR Form 1701A
15 April 2020 15 May 2020
eFiling/Filing and ePayment/Payment of the Following Annual Income Tax Returns for Corporations, Partnerships, and Other Non-Individual Taxpayers with Required Attachments (for calendar year ending December 31, 2019):
• Subject Only to Regular Income Tax Rate – BIR Form 1702-RT
• Exempt from Income Tax with No Other Taxable Income – BIR Form 1702-EX
• Mixed Income Subject to Multiple Income Tax Rates or to Special/Preferential Tax Rates – BIR Form 1702-MX
15 April 2020 15 May 2020
ePayment of Monthly Remittance of Income Taxes Withheld on Compensation for eFPS Filers (for the month of March 2020) – BIR Form 1601C for Groups E, D, C, and B 15 April 2020 15 May 2020
eSubmission of Quarterly Summary List of Machines (CRM-POS) Sold by All Machine Distributors/Dealers/ Vendors/Suppliers (for the quarter ending March 31, 2020) 15 April 2020 15 May 2020
Registration of Bound Loose Leaf Books of Accounts/ Invoices/Receipts and Other Accounting Records (for the fiscal year ending March 31, 2020) 15 April 2020 15 May 2020
Submission of List of Medical Practitioners (for the quarter ending March 31, 2020) 15 April 2020 15 May 2020
Other reportorial requirements omitted Due date falling within the Enhanced Community Quarantine (“ECQ”) Extended for 30 days from its due date
All ONETT Transactions – BIR Forms 1606, 1706, 1707, 1800, and 1801 Due date falling within the ECQ                                                                                                                                                                         Extended for 30 days from its due date                                                                                                                                    

Revenue Memorandum Circular No. 31-2020, March 23, 2020.

This extends the period of submission or filing of documents and correspondences pursuant to certain provisions in the 1997 NIRC, as amended, and existing revenue regulations. The submission and/or filing of the following documents and correspondences, if falling due on the dates covered by the Enhanced Community Quarantine (“ECQ”), are granted an extension of thirty (30) days from the date of the lifting of the ECQ:

7. Letter Answer to the Notice of Informal Conference (“NIC”)
8. Response to the Preliminary Assessment Notice (“PAN”)
9. Protest Letter to the Final Assessment Notice (“FAN”)/Formal Letter of Demand (“FLD”)
10. Submission of Relevant Supporting Documents to Support the Request for Re-investigation of Audit Cases with FAN/FLD
11. Appeal/Request for Reconsideration to the Commissioner on the Final Decision on Disputed Assessment (“FDDA”)
12. Other Similar Letters and Correspondences

Revenue Memorandum Circular No. 32-2020, March 23, 2020.

This extends the deadline for the filing of Certificate of Residence for Tax Treaty Relief (“CORIT”) Forms. The filing of the CORTT Forms for Final Withholding Taxes on Dividends, Interests, and Royalties paid on or before March 10, 2020 are extended until April 30, 2020.

Revenue Memorandum Circular No. 33-2020, March 24, 2020.

This extends the deadline on availment of Tax Amnesty on Delinquencies under RR No. 4-2019 as amended by RR No. 5-2020. Under previous regulations, the tax amnesty on delinquencies may be validly availed of until April 23, 2020. However, the period for the said availment has been extended to May 23, 2020.

Revenue Memorandum Circular No. 34-2020, March 27, 2020.

This suspends the running of the statute of limitations in the assessment and collection of taxes pursuant to Section 223 of the 1997 NIRC, as amended, starting March 16, 2020 until the lifting of the state of national emergency and for sixty (60) days thereafter.

Revenue Memorandum Circular No. 35-2020, April 1, 2020.

This memorandum circular provides that all banks, quasi-banks, financing companies, lending companies, and other financial institutions, public and private, including the GSIS, SSS, and Pag-ibig, in extending the grace period for the payment of all loans shall not impose additional Documentary Stamp Tax imposed under Section 179, 195, and 198 of the 1997 NIRC, as amended, for credit extensions, credit restructuring, micro-lending, including those obtained from pawnshops and extensions thereof during the covered period.

Revenue Memorandum Order No. 10-2020, March 30, 2020.

This prescribes the policies and guidelines relative to the Authority to Release Imported Goods (“ATRIG”) of all goods imported under RA No. 11469, otherwise known as the “Bayanihan to Heal as One Act”.

All importations of health equipment and supplies deemed as critical or needed to address the current public health emergency, declared as exempt from VAT and excises taxes under Section 4 of RA 11469 shall be released from customs custody without need of an ATRIG. Importation of materials needed to produce the health equipment and supplies shall also be released from customs custody without need of an ATRIG provided that the importing manufacturer is included in the Master List of the Department of Trade and Industry and other incentive granting bodies.

Operations Memorandum No. 20-2020, March 17, 2020.

This outlines the conduct of audit/ investigation/other field operations during the imposition of stringent social distancing measures. Under the memorandum, the following guidelines shall be followed:

1. Continuation of work on assigned cases, whether prescribing or not;
2. Extension of a period of thirty (30) days for the submission of report for non-prescribing audits which are still lacking in documentary requirements and requires continuation of audit;
3. Temporary prohibition on conducting field audit/ investigation, any form of business visitation, or any other field operations; and
4. Temporary prohibition on personal service of electronic Letters of Authority, Notices of Informal Conferences, Discrepancy Notices, or Mission Orders.

Further, the BIR shall receive, without delay, documents submitted by taxpayers.

Tax Advisory dated March 30, 2020.

This is issued in relation to the extension of deadlines for the filing and payment of certain taxes, including those filed through eFPS. Considering that eFPS is a system which automatically computes the penalties for late filing/payment, taxpayers are advised to disregard the penalties computed by the system and pay only the tax due provided that the payment shall be made on or before the extended deadline.

Any filing and/or payment beyond the stated deadlines in RMC No. 30-2020 shall be subjected to the applicable penalties imposed/computed by the eFPS from the extended deadline until actually paid.

Other Issuances

Revenue Memorandum Circular No. 10-2020, February 6, 2020.

This suspends the requirement for PTU CAS, CBA and/or components thereof.

All taxpayers with pending applications for PTU CAS, CBA, and/or components thereof shall be allowed to use them, provided that the following documents shall be submitted to the Technical Working Group (“TWG”) Secretariat of the Revenue District Office (“RDO”)/Large Taxpayers (“LT”) Office where the taxpayer is registered:

1. A duly accomplished and notarized Sworn Statement in the prescribed format by the Bureau of Internal Revenue with Summary of System Description, Commercial Invoice/Receipts/Document Description, Forms/Records and Reports Specification, executed and signed by the taxpayer’s authorized representative, including the Special Power of Attorney, Board Resolution, or Secretary’s Certificate stating such authority;
2. Sample print copy of system-generated Principal and Supplementary Receipts/Invoices; and
3. Sample print copy of system-generated Books of Accounts.

In the absence of the required PTU, an “Acknowledgement Certificate” shall be prepared and issued by the TWG Secretariat of the RDO/LT Office where the taxpayer is registered. The said Certificate must be issued within three (3) working days from the receipt of the abovementioned requirements with a Control Number which shall be indicated or reflected on the face of the principal and/or supplementary receipts/invoices to be generated from the systems in order to authorize the use of such receipts/invoices.

In case the taxpayer opted to maintain Loose-leaf Books of Accounts, the application of such shall be continuously processed by the RDO having jurisdiction over such taxpayer.

All CAS, CBA, and/or components thereof used sans the required PTU shall be subject to post-evaluation to check compliance with existing revenue issuances. Such evaluation may be done simultaneous with the audit of the books of accounts and other accounting records of the taxpayer pursuant to a Letter of Authority.

All pending applications for PTU CAS/CBA, and/or components thereof that have undergone system demonstration are covered. Hence, the dockets including the findings, shall be turned over to the respective TWG of the RDO/LT Office having jurisdiction over the taxpayer’s place of business for validation during post-evaluation.

In case of any system enhancement/modification and/or upgrade of CAS/CBA and/or components thereof and if such will result in the change of version number and/or systems release, the taxpayer shall inform in writing the TWG Secretariat of the RDO/LT Office where they are registered. A matrix showing the comparative changes of the current and upgraded system shall be submitted together with the letter notification.

A separate RMO shall be issued relative to the detailed procedures implementing this circular.

Revenue Memorandum Circular No. 11-2020, February 6, 2020.

This amends RMC No. 57-2019 which clarifies certain issues on tax amnesty on delinquencies.

RMC No. 57-2019 RMC No. 11-2020

Q22. Will the tax liabilities covered by a FAN which was timely protested yet withdrawn on or before April 24, 2019 be considered delinquent account qualified for tax amnesty?

A22. If the protest was withdrawn on or before April 24, 2019, the tax liabilities shall be considered delinquent from the date of lapse of the period to protest, as if there is no protest filed. The taxpayer shall be qualified to avail of the tax amnesty on delinquencies provided the delinquent accounts pertain to taxable year 2017 and prior years and the period to protest lapsed on or before April 24, 2019.

Q22. Will the tax liabilities covered by a FAN/FLD or FDDA which was timely protested or disputed, but subject to protest to the FAN/FLD or appeal to the FDDA, as the case may be, was withdrawn on or before April 23, 2020 be considered delinquent account qualified for tax amnesty?

A22. Yes, if the protest or appeal was withdrawn at any time on or before April 23, 2020, and thus, the tax liabilities reverted back to being delinquent on or before April 24, 2019 (refer to next Q&A), provided that the delinquent account pertains to taxable year 2017 and prior years.

Q23. In relation to question No. 22, what will happen if the protest was withdrawn after
April 24, 2019, the effectivity date of RR No. 4-2019?

A23. Since there is a protest filed and it was only withdrawn after April 24, 2019, the tax liabilities stated in the FAN cannot be considered delinquent accounts as of April 24, 2019 and the taxpayer is not qualified to avail of the tax amnesty on delinquencies.
Q22. Will the tax liabilities covered by a FAN/FLD or FDDA which was timely protested or disputed, but subject to protest to the FAN/FLD or appeal to the FDDA, as the case may be, was withdrawn on or before April 23, 2020 be considered delinquent account qualified for tax amnesty?

Q23. In relation to Q22, what is the effect of the withdrawal of protest/appeal to the FAN/FLD/FDDA?

A23. Upon the withdrawal of the protest or appeal to the FAN/FLD or FDDA, respectively, the effect is that it is as if no protest or appeal was filed, and therefore, the assessment contained therein became final and executory, thereby delinquent, upon the lapse of the thirty (30)-day period, reckoned from receipt of such FAN/FLD or FDDA, within which to file a protest or appeal, as the case may be. In such case, the FAN/FLD or FDDA, whose protest or appeal was subsequently withdrawn should have been received at the latest on March 25, 2019, to be considered delinquent on or before April 24, 2019.

Q29. Can a taxpayer be considered to have fully complied with the requirements of RR No. 4-2019 if the tax amnesty amount was paid on the last day of the one-year availment period but failed to file the TAR on the same date?

A29. No. Section 5(C) of RR No. 4-2019 provides that availment of tax amnesty on delinquencies shall be considered fully complied with upon the completion of the enumerated steps which includes the filing/submission of the TAR with complete documentary requirements to the concerned office within the one-year availment period.

Q29. Can a taxpayer be considered to have fully complied with the requirements of RR No. 4-2019 if the tax amnesty amount was paid on the last day of the one-year availment period but failed to file the TAR on the same date?

A29. No. Section 5(C) of RR No. 4-2019 provides that availment of tax amnesty on delinquencies shall be considered fully complied with upon the completion of the enumerated steps which includes the filing/submission of the TAR with complete documentary requirements to the concerned office within the one-year availment period. However, to give every opportunity to delinquent taxpayers who have secured the Certificate of Tax Delinquencies/Tax Liabilities and endorsement of the Acceptance Payment Form but have paid the amnesty tax due on April 23, 2020, the last day of the availment period, an extended period of 30 days shall be given for the
submission of the complete documentary requirements.

 

Q40. What are the 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?

A40. The following instances are considered invalid making the assessment final and executory:

7. The protest to FAN/FLD was filed beyond 30 days from receipt of the FAN/FLD;
8. The appeal to the FDDA was filed beyond 30 days from receipt of the FDDA;
9. The protest to FAN/FLD was not filed with the duly authorized representative of the CIR who signed the FAN/FLD;
10. The appeal to the FDDA was not filed with the Office of CIR;
11. The protest/appeal failed to state the applicable law, rules and regulations or jurisprudence on which it is based; and
12. 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.

An invalid protest or appeal does not toll the running of the 30-day prescriptive period to file such protest or appeal. Accordingly, the assessment becomes final and executory after the lapse of such 30-day prescriptive period, reckoned from receipt of the FAN/FLD or FDDA.

 

 

Revenue Memorandum Circular No. 15-2020, February 12, 2020.

This enjoins revenue officers assigned to a case to furnish a copy of printed guidelines to taxpayer during the Discussion of Discrepancy in order to inform the taxpayer on the proper procedures in responding to deficiency assessment arising from the conduct of audit/investigation.

Revenue Memorandum Circular No. 14-2020, February 24, 2020.

This clarifies the taxation of the activities of the BSP.

Income/revenues of the BSP derived from the exercise of its governmental function shall be exempt from all
national internal revenue taxes. All other income not considered as derived from its governmental functions shall be considered proprietary income and shall be subject to all national internal revenue taxes.

The BSP shall also be exempt from business taxes for its revenues and receipts derived from the exercise of essential governmental functions. All contracts, deeds, documents and transactions related to the conduct of
business entered into by BSP which require payment of documentary stamp tax shall be exempted from the payment thereof.

Revenue Memorandum Circular No. 24-2020, February 21, 2020.

This provides that heated tobacco products and vapor products are new products being introduced under the category of tobacco products are subject to excise tax. As such, there is a need to amend the registration with the BIR to include tax type "EXCISE TAX” and secure a permit to engage in business as manufacturer, importer, or dealer/trader of heated tobacco products and vapor products with Excise LT Regulatory Division.

Revenue Memorandum Circular No. 27-2020, March 18, 2020.

This extends the deadline for the filing of applications for VAT Refund and the ninety (90) day period to process the same pursuant to Section 112 of the 1997 NIRC, as amended by the RA No. 10963 (TRAIN Law). The extended due dates are as follows:

Particulars Original Due Date Extended Due Date
Filing of VAT refund application covering the quarter ending 31 March 2018 31 March 2020                     30 April 2020
90-day period for processing VAT refund claims for those currently being evaluated and those that may be received from 16 March 2020 to 14 April 2020 n/a       90-day period is suspended and shall resume after the lifting of the community quarantine

 

sec_issuances
sec_issuances

 I. COVID-19 RELATED GOVERNMENT ISSUANCES

 

Memorandum Circular No. 5, March 12, 2020.

This extended the time for the filing without penalty, of the 2019 annual reports, including the applicable quarterly reports for 2020 and 2019 audited financial statements (AFS), in view of the COVID-19.

Companies whose preparation of AFS or completion of audits are not affected by COVID-19 are required to file the Annual Reports/AFS for the year ended December 31, 2019 within the periods prescribed under existing rules and regulations. However, the SEC granted the following affected companies an extension of time without penalty, within which to submit the Annual Reports, Quarterly Reports, and AFS for the period ended December 31, 2020:

I. For companies doing domestic operations only – until June 30, 2020; and
II. For companies doing domestic and foreign operations – until June 30, 2020 or 60 days from the date of lifting of travel restrictions, whichever comes later.

In order to avail of the extension, the following requirements must be complied with:

1. For publicly-listed companies
a. Written request submitted not later than 5 days before the filing deadline;
b. Sworn certification by the President and Treasurer confirming all the following conditions:
i. The company’s 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 its audit 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.; and
c. Sworn certification by the company’s external auditors confirming the items (i) and (iii) of paragraph 1(b) above.

2. For not publicly-listed companies
a. Sworn certification by the President and Treasurer confirming all the conditions set forth under items (i) to (iii) of paragraph 1(b) above; and
b. Sworn certification by the company’s external auditors confirming the items (i) and (iii) of paragraph 1(b) above.

Memorandum Circular No. 6, March 12, 2020.

This laid down the guidelines for corporations on the formulation of their internal procedures and by laws which will allow directors, trustees, stockholders, members and other persons to participate and vote in meetings in absentia or through remote modes of communication.

Some of the salient provisions of the circular are as follows:

1. Corporations may issue their own internal procedures for the conduct of board or stockholders’ meetings through remote communication or other alternative modes of communication.

For the convenience of the stockholders and members, the internal procedures may provide for the following:

a. Mechanism to verify the identity of the stockholders or members and who among them have the right to vote during the meeting;
b. Measures to ensure that all stockholders or members have the opportunity to participate in the meeting;
c. Mechanism to enable stockholders or members to vote during the meeting including ensuring that the integrity and secrecy of the votes are protected;
d. Procedures for documenting the meeting and any process/motion which may be done afterwards;
e. Mechanism in making the record of the meeting, either video or audio recording, available to the stockholders or members; and
f. Other matters to address administrative, technical, and logistical issues.

2. Directors or trustees who cannot physically attend or vote at board meetings can participate through remote communication such as videoconferencing, teleconferencing, or other alternative modes of communication. However, directors or trustees cannot attend or vote by proxy at board meetings.

3. A stockholder or member who cannot physically attend at stockholders’ or members’ meetings may participate in such meeting through remote communication or in absentia, only when so provided in the bylaws or by majority of the board of directors. The resolution of the board of directors allowing stockholders to exercise their right to vote through remote communication or in absentia shall only be applicable for a particular meeting

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.

4. If a stockholder, member, director, or trustee intends to participate in a meeting through remote communication or in absentia, he/she shall notify in advance the Presiding Officer and the Corporate Secretary of his/her intention. Such fact shall be noted in the minutes of the meeting.

5. Any stockholder, member, director, or trustee who participates through remote communication or in absentia shall be deemed present for purposes of quorum.

6. Notice of meetings may be sent to all directors or trustees through electronic mail, messaging service, or such other manner as may be provided in the bylaws or by board resolution. However, notice of meetings of stockholders shall be sent only in accordance with the manner of giving notices as stated in the bylaws.

7. The notice of meeting for board meetings shall include the following information, among others, that:
a. Directors or trustees may participate via remote communication;
b. Contact information of the Corporate Secretary or office staff whom the director or trustee may communicate;
c. The fact that there will be visual and/or audio recording of the meeting; and
d. Other instructions to facilitate participation in the meeting through remote communications.

8. The notice of meeting for stockholders’ meetings shall include the following information, among others:
a. 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;
b. Manner of casting of votes and the period during which vote by remote communication or in absentia will be accepted;
c. Contact information of the Corporate Secretary or office staff whom the director or trustee may notify about his or her option;
d. The fact that there will be visual and/or audio recording of the meeting (for future reference).

9. For board meetings, the Presiding officer shall instruct the Corporate Secretary to make a roll call. Every attendee shall state for the record the following:
a. Full name and position;
b. Location;
c. Confirmation that he/she can clearly hear and/or see the other attendees;
d. Confirmation that he/she received the Notice of the Meeting including the agenda and materials; and
e. Specify the device being used (i.e., smartphone, tablet, laptop, desktop, television, etc.

10. The Corporate Secretary shall also assume the following responsibilities:
a. Ensure that suitable equipment and facilities are available for the conduct of meeting by remote communication;
b. Ensure that the attendees are able to communicate with the other participants clearly during the course of the meeting;
c. Ensure that the visual and audio recordings of the meeting are secured;
d. Ensure that the visual and audio recordings of the meeting are 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;
e. Ensure to safe-keep and perpetuate in updated data storage equipment or facility the visual and audio recordings; and
f. Require those who attend the meeting through remote communication, to sign the minutes of the meeting whenever practicable, on a reasonable time after the meeting.

Memorandum Circular No. 7, March 16, 2020.

This was issued to impose preventive measures against COVID-19 in the handling of records at the SEC.

In accordance with and acting on the directive of the Office of the President to undertake appropriate measure to curtail and eliminate the COVID-19 threat embodied in Proclamation No. 922 dated March 8, 2020, the SEC temporarily suspended the existing Appointment Sustem and Public Kiosk to avoid face to face contact with the SEC Frontline Employees and the transacting public. Likewise, all filings at the Head Office and Satellite Offices shall be temporarily suspended until further notice.

Thus, the SEC adopted the following procedures for the transactions with the Electronic Records Management Division-ICTD:

I. Request for plain or authenticated copy of SEC documents – requests may be made through:

A. An online application through www.secexpress.com; or
B. The call center facility by calling the Hotline Number (02) 8-737-8888.

II. Filing/submission of reports and/or other documents to the SEC – filings/submissions of reports/documents may be made through:

A. SEC Express Nationwide Submission with the following procedures:
1. Client accomplishes and signs the SEC Express Nationwide Submission.
2. Client attached the Checklist and the undertaking to the documents to be submitted.
3. Client proceed to the courier of choice and may or may not avail of the return copy. Request for return copy may be subject to the availability of service offer by the courier.
4. Courier delivers the documents to the SEC Office.
5. SEC Receiving Officer shall stamp the documents as “Received” and distribute the copies of the documents to the SEC department concerned.

B. Philippine Postal Corporation or through ordinary mail:
1. Clients may file their reports/documents through registered mail with return card issued by the Philippine Postal Corp or through ordinary mail or private courier duly accompanied by an affidavit of service, if registry service is not available in their official place of business.
2. For return copy, client shall enclose a self-addressed envelope with sufficient amount of stamp/postage.

C. 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 registry receipt. Reports/documents submitted through ordinary mail or private courier shall be considered filed on the date of actual receipt by the SEC.

Memorandum Circular No. 8, March 12, 2020.

This announces the adoption of certain Accounting Standards and Philippine Interpretations Committee Questions and Answers (PIC Q&As) as part of the SEC’s rules and regulations on financial reporting.

The foregoing pronouncements have been adopted by the Philippine Financial Reporting Standards Council (FRSC), approved by the Board of Accountancy and published in the Official Gazette. They are now being adopted by the SEC as part of its rules and regulations on financial reporting:

I. Accounting Standards

 Pronouncement  Effectivity Date
Philippine Interpretation IFRIC 23, Uncertainty over Income Tax Treatments Effective for annual periods beginning on or after January 1, 2019.
Amendments to PAS 19, Plan Amendment, Curtailment or Settlement Effective for annual periods beginning on or after January 1, 2019.
Annual Improvements to PFRSs 2015-2017 Cycle Effective for annual periods beginning on or after January 1, 2019.
Amendments to PFRS 3, Definition of a Business Effective for annual periods beginning on or after January 1, 2020.
Amendments to PAS 1 and PAS 8, Definition of Material Effective for annual periods beginning on or after January 1, 2020.
PFRS 17, Insurance Contracts Effective for annual periods beginning on or after January 1, 2021.

 

II. PIC Q&As

 Pronouncement  Effectivity Date
PIC Q&As No. 2018-01, PAS 8 – Voluntary changes in accounting policy The consensus in this Q&A is effective from the date of the approval by the FRSC.
PIC Q&As No. 2018-02, PAS 36 – Non-controlling interests and goodwill impairment test The consensus in this Q&A is effective from the date of the approval by the FRSC.
PIC Q&As No. 2018-03, PFRS 13, PAS 16 and PAS 36 – Fair value of property plant and equipment and depreciated replacement cost The consensus in this Q&A is effective from the date of the approval by the FRSC.
PIC Q&As No. 2018-04, PAS 41 – Inability to measure fair value reliably for biological assets within the scope of PAS 41, Agriculture The consensus in this Q&A is effective from the date of the approval by the FRSC.
PIC Q&As No. 2018-05, PAS 37 – Liability arising from maintenance requirement of an asset held under a lease The consensus in this Q&A is effective from the date of the approval by the FRSC.
PIC Q&As No. 2018-06, PAS 27 – Cost of investment in subsidiaries in separate financial statements when pooling is applied in consolidated financial statements The consensus in this Q&A is effective from the date of the approval by the FRSC.
PIC Q&As No. 2018-07, PAS 27 and PAS 28 – Cost of an associate, joint venture, or subsidiary in separate financial statements The consensus in this Q&A is effective from the date of the approval by the FRSC.
PIC Q&As No. 2018-08, PFRS 10 and PFRS 3 – Accounting for the acquisition of a non-wholly owned subsidiary that is not a business The consensus in this Q&A is effective from the date of the approval by the FRSC.
PIC Q&As No. 2018-09, PAS 21 – Classification of deposits and progress payments as monetary or nonmonetary items The consensus in this Q&A is effective from the date of the approval by the FRSC.
PIC Q&As No. 2018-10, PAS 2 – Scope of disclosure of inventory write-downs The consensus in this Q&A is effective from the date of the approval by the FRSC.
PIC Q&As No. 2018-11, Classification of land by real estate developer The consensus in this Q&A is effective from the date of the approval by the FRSC.
PIC Q&As No. 2018-13,Conforming changes to PIC Q&As – Cycle 2018 The effective date of the amendments is included in the affected Q&As.
PIC Q&As No. 2018-14, PFRS 15 – Accounting for cancellation of real estate sales. (Deferred by the SEC until December 31, 2020) The effective date and transition provision of this Q&A follow those of PFRS 15 Appendix C, upon approval by the FRSC.
PIC Q&As No. 2018-15,PAS 1 – Classification of advances to contractors in the nature of prepayments: current vs. non-current The consensus in the Q&A is effective from the date of approval of the FRSC and should follow the provisions under PAS 8, Accounting Policies, Changes in Accounting Estimates and Errors.
PIC Guidance of Financial Reporting June 2018 The effective date of the amendments is included in the Q&As affected.

 

Memorandum Circular No. 9, March 18, 2020.

This was issued to enumerate the guidelines for the filing of the GIS during the COVID-19 outbreak and enhanced community quarantine (ECQ).

During the period of ECQ currently being imposed, the submission of GIS may be mad under the following instances:

I. Where election of directors, trustees, and officers was held, the GIS shall be submitted within 30 days from actual meeting through mail (ordinary or registered), private courier, or email at This email address is being protected from spambots. You need JavaScript enabled to view it., This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it..

The reckoning period of the date of submission of the report are as follows:
a. For mail (ordinary or registered) – the date of mailing as stamped “received by the post office;
b. Private courier – date of actual receipt of SEC; and
c. Electronic means – date of receipt of SEC system as reflected in the email date and hour, provided that the hard copy shall be filed within 30 days from the lifting of the emergency/outbreak and attaching the email notification for ease of reference.

II. Where election of directors, trustees, or officers originally scheduled between March 1, 2020 and May 31, 2020 were not held on account of health or safety reasons in relation to COVID-19 and the corporation has no facilities for remote communication, notice shall be submitted to the SEC within 30 days from the original meeting date through mail, courier or by electronic means, accompanied by a statement specifying a new date for the election which shall be within 60 days from the date originally scheduled.

Non-holding of annual meeting of election of directors, trustees, or officers due to other causes shall be reported to the SEC within 30 days from the original meeting date and shall specify a new date for the election which shall be within 60 days from the date originally scheduled. If it is found that the non-holding of election is unjustified, the SEC shall issue an order directing the issuance of notice stating the time and place of the election in accordance with Section 25 of the Revised Corporation Code.

The report of the non-holding of annual meeting shall be submitted to This email address is being protected from spambots. You need JavaScript enabled to view it. and shall contain the following:

1. Corporate name;
2. SEC registration number;
3. Date of annual meeting per bylaws;
4. Date of actual meeting;
5. Reason for the non-holding of the meeting;
6. Venue of the intended meeting; and
7. Signature of the Corporate Secretary with date.

III. The results of the election of directors, trustees, or officers which was conducted subsequent to the report of non-holding of elections or when the election is held outside the covered period shall be reported to the SEC through the submission of a GIS within 30 days from the date of actual meeting. The GIS so submitted shall no longer enjoy the forbearance from the penalty for late submission.

Memorandum Circular No. 10, March 20, 2020.

Replace this paragraph

This lays down the guidelines for the submission by electronic mail of GIS, AFS, forms and documents required by exiting laws and regulations.

This allows the filing of the GIS, AFS, and all other general and special forms and letters through electronic mail in compliance with the Guidelines on the Enhanced Community Quarantine and Stringent Distancing Measures issued by the Inter-Agency Task Force for the Management of Emerging Infectious Disease on 17 March 2020. Nevertheless, the electronic submission of said documents shall comply with the following required specifications:

1. The submitted documents should be in PDF format, preferably with Text Layer;
2. The submitted documents should contain an electronic signature as defined in Section 5(e) of RA No. 8792 or the Electronic Commerce Act of 2000. Provided however, that electronic images of wet or physical signatures of authorized representatives affixed to the documents covered by the Circular and submitted to the SEC shall be recognized;
3. The submitted documents shall 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 the immediately following paragraph, the documents covered by the Circular need not be notarized. It shall be understood however, that the person(s) whose signature appears in the documents 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 documents to the SEC once the state of public health emergency is lifted. This statement shall include the full name, corporate address, and mobile number of the authorized representative making the submission.
6. The sender should request for a Return Receipt and Delivery Status Notification to ensure that the email has been sent and has also been received by the SEC.

Notice dated 30 March 2020.

The following procedures on remote filing shall be effective until the ECQ has been lifted:

I. For applications for ordinary amendments (change in corporate name, business purpose, principal office address, term of existence, number of board of directors/trustees, annual meeting, and fiscal year end):

• Requirements are available at http://www.sec.gov.ph/services-2/company-2/amendment/

• Scanned copies of the complete requirements shall be sent via email to This email address is being protected from spambots. You need JavaScript enabled to view it.

II. For applications for increase/decrease of capital stock and merger and consolidation

• Requirements are available at:
a. http://www.sec.gov.ph/services-2/company-2/amendment/
b. http://www.sec.gov.ph/services-2/company-2/other-applications/

• Scanned copies of the complete requirements shall be sent via email to This email address is being protected from spambots. You need JavaScript enabled to view it.

Notice dated 30 March 2020.

The was issued to inform the public that the SEC continues to accept online applications for the registration of Corporations and Partnerships through the Company Registration System by visiting https://crs.sec.gov.ph. However, the verification of payment and generation of certificates may be made and released by the SEC only after the ECQ has been lifted.

Notice dated 30 March 2020.

This was issued to inform investment companies, registered issuers of proprietary and non-proprietary shares/timeshares public companies, financing companies, lending companies, foundation, accredited microfinance NGO’s and publicly listed companies under the supervision of Corporate Governance and Finance Department (CGFD) of the guidelines to be observed when submitting reports, applications, compliance, requests, and other documents via email during the ECQ period.

1. Reports, applications, compliance, requests and other documents required under existing laws, rules, regulations and circulars to be submitted to the CGFD may be submitted online at This email address is being protected from spambots. You need JavaScript enabled to view it.. Any submission made and received between 8:00AM to 5:00PM on a regular workday shall be considered received and shall be acted upon by CGFD personnel. Submissions made on Saturdays, Sundays, holidays and outside of the working hours shall be considered filed and shall be acted upon on the immediately succeeding business day.

2. Covered companies must submit via email, one report at a time per company for ease of monitoring.

3. In submitting documents online, covered companies must use the following format in the subject head: COMPLETE NAME OF THE COMPANY_SUBJECT DOCUMENT_DATE. The date shall refer to the date of filing. The same format shall be used by covered companies for the file name of the report or document attached to the said email.

4. The document and corresponding certification to be submitted online by the person who prepared the document on behalf of the covered company must contain the necessary signatures. Electronic signature as defined under Section 5 (e) of RA No. 8792 or the “Electronic Commerce Act of 2000” are temporarily allowed for the online submission which includes electronic images of wet or physical signatures of authorized representatives to be affixed to the documents. However, the hard or physical copies to be submitted to the Commission must contain wet signatures.

5. Every document submitted via email must be accompanied by a certification of the person who prepared the report or document on behalf of the covered company that the information contained therein are true and correct. This certification must be attached in the same email together with the subject document to be filed.

The “person” referred to in this “Guidelines” is the director, officer or person who is duly authorized by the company to file the document.

6. The report and certification submitted online are not required to be notarized. However, the hard or physical copies to be submitted must contain proper notarization of documents.

7. All covered companies that intend to submit reports, applications, compliance, requests or other documents to This email address is being protected from spambots. You need JavaScript enabled to view it. that requires the payment of filing fees, penalties or other impositions such as but not limited to Registration Statement (SEC Form 12-1), Preliminary Information Statement (SEC Form 20-IS), and Annual Fees for Lending and Financing Companies, must submit the following:
a. Online Certification;
b. Undertaking by the director, officer or duly authorized representative of the company that the necessary filing fees, penalties or other impositions shall be paid by the covered company within 10 calendar days from the time the Enhanced Community Quarantine period has been lifted or withdrawn; and
c. Payment Assessment Form (PAF) or if none has been previously issued then submit through email a request for PAF.

8. The non-payment of Annual Fees (AF) by Lending and Financing Companies is subject to the imposition of a daily penalty. However, if the payment of AF falls within the ECQ Period, the reckoning period for the computation of daily penalty shall begin on the 10th day after the lifting of the ECQ but only for those that filed an online manifestation to pay AF to This email address is being protected from spambots. You need JavaScript enabled to view it. once ECQ is lifted. The companies that failed to pay the AF or file the manifestation shall be subject to the daily penalty reckoned from the original due date.

9. The SEC has extended the filing of Annual Reports and/or Audited Financial Statements including those of CGFD covered companies until 30 June 2020 pursuant to the SEC Notice dated 18 March 2020 with the subject “Relaxing the Requirements for Requests for Extension in the Filing of Annual Reports and/or Audited Financial Statements”.

However, those who prefer to submit Annual and Quarterly Reports and AFS of CGFD covered companies without the need of extension may do so via email, subject to the same rules on submission via email as provided under the Advisory on Alternative Filing of Reports of CGFD and the guidelines contained in this Notice.

The following must be submitted with the CGFD within 10 calendar days from the date that the ECQ has been lifted or withdrawn:
a. Hard/Physical Copies of Reports or with proper notarization and wet signatures of authorized and appropriate representatives of the company; and
b. Certification that the hard copies submitted refer to one and the same document that they filed via email. Such certification must also indicate the date of their submission through email

Where the requirements for alternative filing referred to in this Notice and in the Advisory issued on 18 March 2020 are not complied with, the subject report, compliance, application, request or other document submitted to This email address is being protected from spambots. You need JavaScript enabled to view it. is deemed not to have been filed until the submission of proper documents by the covered entity.

On the other hand, non-submission of hard/physical copies of reports, certification and non-payment of filing fees, where applicable, within 10 calendar days from the date of lifting of the ECQ shall invalidate said documents submitted via email.

Notice dated 31 March 2020.

This was issued to inform investment companies, registered issuers of proprietary and non-proprietary shares/timeshares public companies, financing companies, lending companies, foundation, accredited microfinance NGO’s and publicly listed companies under the supervision of CGFD that the daily and monthly monetary penalties (Cumulative Penalties), as may be applicable, imposable upon said covered companies, from 13 March 2020, until the ECQ is lifted by order of the President.

 

ic_issuances
ic_issuances

 I. COVID-19 RELATED GOVERNMENT ISSUANCES

 

Circular Letter No. 2020-12, March 16, 2020.

All agents’ qualifying examinations, whether conducted within the premises of the Commission main/district offices or otherwise, shall be suspended during the Community Quarantine Period. If such quarantine is extended by lawful authorities, the suspension shall likewise last during such period.

The submission of all regular reportorial requirements falling within the quarantine period shall be extended for a period of thirty (30) days from due date. If such quarantine is extended by lawful authorities, the suspension shall likewise last during such period.

All other documentary requirements falling within the quarantine period shall be submitted on the due date originally indicated; unless the Commission shall grant an extension upon a written request and for meritorious reason.

Any and all matters necessitating decision of or rulings by the Commission may, at the discretion of the Commissioner, be temporarily deferred and later made after the expiration of the quarantine period or at a later date, as the case may be.

All hearings before the Commission’s Claims Adjudication Division (“CAD”) and Regulation, Enforcement, and Prosecution Division (“REPD”) that are scheduled within the quarantine period are hereby cancelled. The CAD and REPD shall notify the concerned parties in writing of the new dates/resetting of said scheduled hearings.

All physical copies of correspondences to this Commission made during the quarantine period shall be electronically scanned by the sender and e-mailed to This email address is being protected from spambots. You need JavaScript enabled to view it..

Circular Letter No. 2020-13, March 16, 2020.

All insurance and reinsurance companies, MBAs and HMOs are respectfully enjoined to adopt and implement claims management policies relative to the processing and/or payment of Covid-19 coronavirus-related claims with the following objectives:

a. Relaxation and streamlining of existing company procedures and mechanisms that will facilitate immediate processing and/or payment of Covid-19 coronavirus-related claims;
b. Relaxation of notice of claim period and the period for completion of claim requirements; and
c. Enhancement of services that will improve overall customer claims experience.

Circular Letter No. 2020-14, March 17, 2020.

The Suretyship Unit of the Commission shall only be open for business on Mondays to Wednesdays, from 9:00 AM to 3:00 PM.

All applications or requests received by this Commission’s Suretyship during the Community Quarantine Period shall be acted upon and processed within a period of seven (7) working days from the date the complete application or request was received, which may be extended once for another seven (7) working days.

Circular Letter No. 2020-18, March 23, 2020.

The Commission strongly encourages all insurance, pre-need and HMO companies to extend the grace period for the payment of insurance premiums/contributions, installment amounts and/or membership fees by at least thirty-one (31) days for those unpaid during the period from March 15 to April 13, 2020 or up to a later date deemed appropriate by the company.

Circular Letter No. 2020-19, March 23, 2020.

Subject to conditions, all life insurance companies shall be allowed to launch initiatives that aim to provide additional benefits or free insurance coverage to customers or stakeholders affected by COVID-19, without prior approval from this Commission.

Circular Letter No. 2020-20, March 23, 2020.

The Commission will accept filing of regulated entities’ 2019 AS and/or 2019 AFS (including their required attachments) until June 1, 2020 without imposing penalty/ies for late submission.

Circular Letter No. 2020-21, March 24, 2020.

This Circular holds until further notice the show cause order for all life and non-life insurance which failed to comply with the P900 Million minimum net worth and minimum capital investment requirements. Nonetheless, every company affected by this Circular is hereby directed to comply with the requirements notwithstanding the suspension of the show cause order.

Circular Letter No. 2020-24, March 25, 2020.

The Commission strongly encourages ALL insurance companies, MBAs and HMOs to extend the coverage of their health insurance policies and HMO agreements to customers infected with COVID-19 or any related concerns.

Moreover, insurance companies, MBAs and HMOs are urged to waive provisions in their respective health insurance contracts and HMO agreements, such as but not limited to waiting periods, healthcare access to non-affiliated networks, exclusion of pandemic or epidemic, etc. that may become barriers to health care access and treatment.

This call shall be understood to be only on a voluntary basis to be decided upon by each company on the basis of its financial standing.

Circular Letter No. 2020-25, March 25, 2020.

For Insurance Policies or HMO Agreements about to expire during the effectivity of the Enhanced Community Quarantine (“ECQ”), Insurance or HMO Companies shall issue extension of coverage for such existing policies or agreements for at least thirty (30) days subject to the written request or consent, electronically or otherwise, of the insured, client, or their authorized representatives. Subject to the same terms and conditions, the policy and agreements shall only become effective once applicable pro-rata premium payment has been made, unless a credit term has been agreed upon.

On the other hand, for Insurance Policies, Pre-Need Plans or HMO Agreements, which are subject of new or renewal application or negotiation prior to or during the effectivity of the ECQ, Insurance, Pre-Need and HMO Companies may issue a hold cover or temporary cover for insurance, pre-need plan or HMO Agreement coverage for at least thirty (“30”) days subject to the written request or consent, electronically or otherwise, of the insured, plan holder, client, or their authorized representatives. Subject to basic terms and conditions, it shall only become effective once payment of applicable pro-rata premiums has been made, unless a credit term has been agreed upon.

Circular Letter No. 2020-26, March 26, 2020.

The Commission extends the submission of the 2019 AFS of insurance and/or reinsurance brokers, including their required attachments, until June 30, 2020, without imposing any penalty.

Circular Letter No. 2020-27, March 27, 2020.

Due to the COVID-19 pandemic outbreak, Insurance Commission Regulated Entities (ICREs) are given additional ninety (90) days from the March 22, 2020 deadline to implement the necessary for and system changes outlined in IC CL No. 2019-65.

Circular Letter No. 2020-28 March 27, 2020.

This strongly encourages all entities regulated by the Commission to formulate and implement relief and assistance programs to aid their respective sales agents that earn on commission basis for the duration of the COVID-19 coronavirus emergency.

Circular Letter No. 2020-29, March 30, 2020.

This allows all life insurance companies doing business in the Philippines to launch initiative/s that aim to sell their existing life insurance products by utilizing Information and Communication Technology (ICT) or any other technology via Remote Communication.

Once the initiative/s is registered with the Commission, life insurance companies may use the above-mentioned modes to obtain minimum customer information and identification document/s required in the conduct of customer due diligence.

Circular Letter No. 2020-30, March 30, 2020.

CL No. 2020-12 provided for guidelines governing the conduct of business during the quarantine period, which further provided that there shall be no automatic approvals of transactions and/or applications or requests for services under pertinent circular, rules and/or regulations issued by this Commission for the duration of the quarantine period.

This clarifies that it shall not be construed as suspending the expeditions approval of products, as so provided in existing circulars.

Other Issuances 

Circular Letter No. 2020-10, March10, 2020.

This provides for guidelines for the submission of 2019 AS for all non-life insurance and professional reinsurance companies authorized to do business in the Philippines. Such guidelines include:

1. Two (2) hard copies and one (1) soft copy of the AS using the revised template as of December 31, 2019 are required;
2. must be signed by the President, Chief Operating Officer/General Manager, Secretary, Treasurer, Actuary and Chief Accountant;
3. the cover shall be hard bound and in color pink;
4. shall be on legal size using Trebuchet font size #10 or Arial font size #10; and
5. the AS shall be accompanied by an updated list of the request documents and other schedules, referred in this CL as Annex A.

Circular Letter No. 2020-15, March 17, 2020.

This provides for guidelines for the submission of 2019 AS such as:

1. Two (2) hard copies and one (1) soft copy of the AS using the revised template as of 31 December 2019 are required;
2. must be signed by the President, Chief Operating Officer/General Manager, Secretary, Treasurer, Actuary and Chief Accountant;
3. the cover shall be hard bound and in color blue;
4. shall be on legal size using Tmes New Roman font size #12 or Arial font size #10; and
5. the AS shall be accompanied by an updated list of the request documents and other schedules, referred in this CL as Annex A.

Submission of AS is on or before April 30, 2020. Any AS not in accordance with the prescribed format with missing detail/information and incomplete attachments shall not be accepted.

Circular Letter No. 2020-16, March 17, 2020.

This provides for guidelines for the submission of 2019 AS such as:

1. Two (2) hard copies and one (1) soft copy of the AS using the revised template as of 31 December 2019 are required;
2. must be signed by the President, Chief Operating Officer/General Manager, Secretary, Treasurer, Actuary and Chief Accountant;
3. the cover shall be hard bound and in color yellow;
4. shall be on legal size using Times New Roman font size #12 or Arial font size #10; and
5. the AS shall be accompanied by an updated list of the request documents and other schedules, referred in this CL as Annex A.

Submission of AS is on or before April 30, 2020. Any AS not in accordance with the prescribed format with missing detail/information and incomplete attachments shall not be accepted.

Circular Letter No. 2020-17, March 17, 2020.

This provides that every MBA is required to file with the Commission its corresponding AS using the revised template uploaded in the IC website.

Circular Letter No. 2020-22, March 24, 2020.

Pursuant to the transfer from Department of Health (“DOH”) to the Commission of the jurisdiction over HMOs, this Letter provides for the valuation standards for HMO Agreement liabilities.

Where the fixed pre-paid fee is in the form of a pre-agreed membership fee, the liability shall be the HMO Agreement Reserves which is composed of the Membership Fee and Claim Reserves both determined using best estimate assumptions, with an appropriate Margin for Adverse Deviation (“MfAD”) for expected future experience.

On the other hand, where the fixed pre-paid fee is a combination of the enrolment fee, administrative fee and a fund under an ASO Endorsement, the liability shall be the ASO Fund Liabilities and the Unearned Administrative Fee Reserves (“UAFR”).

Circular Letter No. 2020-23, March 24, 2020.

All insurance and/or brokers, reinsurance brokers, are required to submit their respective AFS together with the updated attachments on or before May 31 of every year.

 

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ic_opinions

 Other Issuances

 

Legal Opinion No. 2020-02 March 4, 2020 – Subject to certain exceptions, an individual who has secured a life insurance policy on his own life may designate any person as beneficiary..

Based on the Requester’s research, there are instances when insurance companies refuse the designation of non-relatives as beneficiary of the insured, resulting in the inability of members of the LGBTQ+ community to designate their domestic partners as beneficiaries of their life insurance.

The Commission opined that pursuant to Section 10 of the Amended Insurance Code, a person has an insurable interest in his life, and he can designate his beneficiary to whomever, except if it is prohibited by law, particularly Article 739 of the Civil Code and Section 12 of the Amended Insurance Code.

Accordingly, an individual who has secured a life insurance policy on his or her own life may designate any person as beneficiary provided that such designation does not fall under the enumerations provided in Article 739 of the Civil Code, without prejudice to the application of Section 12 of the Amended Insurance Code.

Legal Opinion No. 2020-03, March 11, 2020 – The premium for non-life insurance is non-tariffed and would depend on the assessment of risk made by the underwriter of the insurance company..

The Contractor seeks the interpretation of the Commission with regard to its claims for damages against their Contractor’s All Risk Insurance (CARI) insured by an insurer. The claim was denied by the insurer because the policy stated that the insured will bear the first 25% of the sum insured as deductible for every loss or damage due to acts of nature such as typhoon, and the said damage did not exceed 25% of the sum insured.

The Commission opined that the CARI, just like any other insurance policies issued undergoes underwriting process wherein the underwriter determines the risk that a potential client poses and evaluates the applicable premium rate. That being the case, an insurance company may use deductible in order to mitigate the behavioral risk of moral hazards or to ensure financial stability on its part.

Accordingly, the sum insured amounted to P99,846,719.00 and the deductible amounted to P24,961,679.75 (25%). Considering that the amount if loss in this case is only P959,983.00, which does not exceed the deductible, the Contractor therefore bears the loss.

 

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bsp_issuances

 I. COVID-19 RELATED GOVERNMENT ISSUANCES

 

Circular No. 1080, March 27, 2020.

This provides the operational relief measures for foreign exchange (FX) transactions under the Manual of Regulations on Foreign Exchange Transactions (FX Manual), which shall be effective immediately and for the duration of the declaration of “community quarantine” by the Office of the President (OP), or as may be extended by the BSP. It provides that applications for approval and registration FX transactions required to be submitted in hard copy under the FX Manual shall be submitted in soft copy via email to certain persons depending on the nature of the transactions.

Monetary penalties for delays incurred in the submission of reports to the BSP-International Operations Department due during the period covered by this Circular or as may be extended, and up to one month thereafter will not be imposed by the BSP.

The grace period for registration of foreign investments unregistered as of March 08, 2019, beyond the prescriptive period under Circular No. 1030 dated 05 February 2019, shall be re-opened from 08 March 2020 up to the period covered by this Circular and one month thereafter. The Circular further provides that investments for registration with the BSP whose prescriptive period shall end on 08 March 2020 up to the period covered by this Circular shall likewise be given a grace period of up to one month thereafter.

Memorandum No. M-2020-006, March 11, 2020.

This mandates the adoption and implementation of appropriate response plans to COVID-l9 epidemic by all BSFIs and OPS. This aims to primarily ensure the health and safety of their employees and customers, while delivering continued financial services to the general public.

BSFIs and OPS should allow for alternate work arrangements or remote access capabilities, as may be deemed practicable and/or necessary. They should also implement clear communication protocols covering all relevant internal and external stakeholders. More importantly, BSFIs and OPS should ensure that their employees are properly guided on limiting or reducing the risk of being affected by the COVID-19 epidemic through timely and continuous cascades of relevant information.

Memorandum No. M-2020-007, March 13, 2020.

This provides guidelines on the submission of reports/documents and communications to the BSP- FSS to be observed, as follows:

1. All communications and periodic reports for submission to the BSP-FSS shall be transmitted via email;
2. Required reports that are currently being submitted electronically to the Department of Supervisory Analytics (DSA) shall continue to be submitted to the designated BSP-FSS email address. All other communications to the BSP-FSS, including general correspondences and other documents, shall be transmitted electronically to This email address is being protected from spambots. You need JavaScript enabled to view it. account;
3. Non-receipt of an acknowledgement from the This email address is being protected from spambots. You need JavaScript enabled to view it. account on the BSFI's communication shall mean failure of delivery of the message;
4. Meanwhile, absent notification from the BSP system of the failure of delivery, communications sent under the This email address is being protected from spambots. You need JavaScript enabled to view it. account shall be considered as duly received by the BSFI;
5. These guidelines shall apply until otherwise prescribed by the BSP.

Memorandum No. M-2020-008, March 14, 2020.

This grants temporary regulatory and rediscounting relief measures for BSFIs affected by the COVID-19. As such, all BSFIs are eligible to avail of the regulatory relief package specified in Annex A within one (1) year from March 8, 2020, the date of declaration of the President of the state of public health emergency under Presidential Proclamation No. 922, and may be extended depending on the developments of the COVID-19 situation.

Before availing such relief package, BSFIs shall submit, through the appropriate supervising department of the BSP, the following:
1. Letter-notification stating the BSFI's intention to avail of the regulatory relief package, signed by its President or officer of equivalent rank; Provided, That the notice shall specify, at a minimum, the specific relief measures to be availed and the affected offices of the BSFI; and
2. Resolution of the Board of Directors authorizing the BSFI to avail of the regulatory relief package.

Memorandum No. M-2020-009, March 14, 2020.

This provides a precautionary reminder against COVID-19 pandemic-themed malicious websites and phishing campaigns.

All BSFIs are cautioned to stay vigilant against cyber threat actors who are taking advantage of the situation by carrying out criminal activities such as ransomware, phishing, cyber extortion and even launching cyber espionage activities. BSFIs are reminded to employ multi-layered security defense strategies against cyber-attacks and continuously roll-out information security awareness campaigns to their employees, clients and other relevant stakeholders.

Memorandum No. M-2020-011, March 19, 2020.

This grants additional operational relief for BSFIs affected by measures to manage the COVID-19 situation and its health and safety risk which aims to assist BSFIs in focusing their resources on the continuous delivery of financial services during this extraordinary situation and supporting the BSFI’s subsequent recovery efforts.

These measures ease certain BSP regulatory requirements governing banking operations for the duration of the ECQ and one (1) month thereafter. Such period may be extended depending on the developments related to the COVID-19 situation.

Memorandum No. M-2020-012, March 19, 2020.

This defers the submission of FX Form 1 reports, covering the period from March 09, 2020 to April 09, 2020, until further notice. This also reschedules the implementation of the ITRS for banks, including the submission of the ITRS test data, on April 01, 2020 to a later date.

Memorandum No. M-2020-013, March 20, 2020.

This amends the SOP for Philippine Holidays in response to the COVID-19 outbreak which rendered the country under a state of public health emergency.

The amendments in the SOP are as follows:
1. To include “infectious diseases outbreak” in the list of emergency situations;
2. To rephrase the protocol into “Opening on the third and succeeding days will be decided by FMOSS upon consideration of BSP-IMT's recommendation, available data, and consultation with various stakeholders and competent government authorities”; and
3. To add a fourth type of holiday as “Trading holiday declared by the BSP Governor due to emergency situations such as infectious diseases outbreak, lockdown, and other similar situations” with a corresponding provision which states, “Triggers for the BSP Governor to consider such a declaration includes, but is not limited to, a declaration by the President, the Secretary of Health, or any competent government official duly authorized by law of a Code Red Sublevel Two (2), or of the imposition of community quarantine in the entirety of Metro Manila.”

Memorandum No. M-2020-014, March 24, 2020.

This provides for the issuance of IATF IDs for BSFIs Personnel Exempted from the ECQ. For this purpose, all BSFIs shall submit and report to the BSP list and number of personnel working as skeleton force. The BSFIs shall then distribute the IATF IDs that will be issued by the BSP for their respective personnel using the control number provided by the BSP.

BSFIs shall ensure that the BSP-issued IATF ID shall only be used by the personnel identified as part of the skeleton force who will provide essential banking and related services to the public during the period of ECQ. Non-compliance thereof shall subject the BSFI and/or its directors, officers, and employees to the sanctions provided under RA No. 7653, as amended by RA No. 11211.

Memorandum No. M-2020-015, March 30, 2020.

This provides for the implementation of relief measure on customer identification primarily to facilitate the distribution of funds to assist Filipinos affected by COVID-19 and the ECQ/CQ, and to ensure continuity of their access to financial and government services.

In view of this, the requirement for the presentation of valid ID shall be relaxed, including for electronic or online customer on boarding and transactions, subject to the following conditions:
1. The amount of transactions shall not exceed P50,000.00 per day;
2. The customer is either a permanent or temporary resident or who conducts business in the area which has been declared to be under ECQ/CQ by the competent authority;
3. The customer shall submit certification, either in hard copy or electronic form, which need not be notarized, that he/she has no valid ID; and
4. The customer’s account activities shall be subject to ongoing monitoring by the BSFI to identify potential abuse of the relaxed requirement and any suspicious transactions shall be reported to the Anti-Money Laundering Council within the prescribed period.

Memorandum No. M-2020-016, March 31, 2020.

This provides guidelines on the submission of reports/documents and communications to the BSP - DLC and relaxation in regulations governing submission of applications for RL and availments thereof. These guidelines are intended to ease the exchange of communications between the banks and BSP-DLC and to simplify the application and availment procedures in obtaining an RL from the BSP in order to allow banks to immediately and continuously deliver their financial services during this extraordinary situation.

These guidelines on the submission of reports/documents and communications to the BSP - DLC shall be observed by Banks, as follows:
1. All communications, including submission of documents, shall be made through this email address: This email address is being protected from spambots. You need JavaScript enabled to view it. account;
2. Documents to be submitted via email shall include a certification that:
a. all electronic copies submitted are a true and faithful copy of the original;
b. the original copies shall be transmitted to the BSP-DLC upon resumption of work at the BSP Head Office; and
c. the bank acknowledges that any misrepresentation shall be subject to appropriate enforcement actions, among other legal recourses available to the BSP;
3. Non-receipt of acknowledgment from the This email address is being protected from spambots. You need JavaScript enabled to view it. account on the Bank’s communication shall mean failure of delivery of the message;
4. Meanwhile, absent notification from the BSP system of the failure of delivery, communications sent under the This email address is being protected from spambots. You need JavaScript enabled to view it. account shall be considered as duly received by the Bank.

Memorandum No. M-2020-017, April 1, 2020.

This implements the rules and regulations of Section 4(aa) of RA No. 11469, otherwise known as the “Bayanihan to Heal as One Act” which mandates all covered institutions to implement a 30-day grace period to all loans with principal and/or interest falling due within the ECQ period without incurring interest, penalties, fees, and other charges. The 30-day grace period shall apply to each loan of individuals and entities with multiple loans.

Covered institutions are likewise prohibited from requiring their clients to waive the application of the provisions of the “Bayanihan to Heal as One Act.” No waiver previously executed by borrowers covering payments falling due during the ECQ period shall be valid.

Circular Letter No. CL-2020-017, March 31, 2020.

This requires that all inquiries, requests, and reports related to the foreign exchange transactions covered by the Manual of Regulations on Foreign Exchange Transactions shall be sent to the International Operations Department (“IOD”) through electronic means. The email addresses of the IOD are as follows:

 

 Area of Concern/Report Category  Contact Details
Public sector loans/borrowings International Operations Group I
This email address is being protected from spambots. You need JavaScript enabled to view it.
This email address is being protected from spambots. You need JavaScript enabled to view it.
Private sector loans/borrowings International Operations Group II
This email address is being protected from spambots. You need JavaScript enabled to view it.
This email address is being protected from spambots. You need JavaScript enabled to view it.
cc: This email address is being protected from spambots. You need JavaScript enabled to view it.
Investments International Operations Group III
This email address is being protected from spambots. You need JavaScript enabled to view it.
cc: This email address is being protected from spambots. You need JavaScript enabled to view it.
Policy International Policy Development Staff
This email address is being protected from spambots. You need JavaScript enabled to view it.
This email address is being protected from spambots. You need JavaScript enabled to view it.
External debt data and statistics (including new importer’s code) Standards and Data Control Group
This email address is being protected from spambots. You need JavaScript enabled to view it.
This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

Other Issuances

BSP Circular No. 1073, February 10, 2020.

This extends the Liberalized Entry and Scope of Operations of Foreign Banks (Transitory Provision) on SBL of Foreign Bank Branches. It provides that loans and credit commitments of foreign bank as of August 07, 2014 may be maintained, but once repaid and expired, shall no longer be increased in excess of the ceiling allowed under the Regulations (Manual of Regulations for Banks). Existing foreign bank branches shall be given until December 31, 2020 to use twice the level of capital defined as net worth, as reference point for purposes of determining the appropriate SBL.

BSP Circular No. 1079, March 09, 2020.

This is an Amendment to the Risk-Based Capital Adequacy Framework for Stand-Alone Thrift Banks, Rural Banks and Cooperative Banks, aimed at improving the quality of regulatory capital of covered banks. The Circular provides for Minimum Capital Ratios, the percentage of risk weighted assets depends on the type of capital, either as Common Equity Tier 1 (CET 1) Ratio, Tier 1 Ratio, or Capital Adequacy Ratio (CAR). It also provides for the Reporting Requirement which requires banks to electronically submit a report on their risk-based CAR.

It further provides that Stand-alone Thrift Banks (TBs), Rural Banks (RBs), and Cooperative Banks shall undergo and observation period until December 31, 2021. The observation period intends to ensure that covered banks meet the minimum capital ratios through reasonable measures without disrupting banking activities.

Prompt Corrective Action (PCA) Framework. A bank may subject to PCA whenever the Total CAR or Tier 1 capital ratio as defined under Sections 125 and 127 or leverage ratio falls below ten percent (10%), seven and a half percent (7.5%) and five percent (5%), respectively.

A prudential limit is set for real estate exposures (REE) and other real estate property of TBs. A stress test will be undertaken on TBs’ REE and other real estate property under an assumed write-off rate of twenty-five percent (25%).

BSP Memorandum No. M-2020-005, March 05, 2020.

This adopts the SAFr of the BSP that aims to facilitate robust, dynamic and forward-looking assessments of BSFls. This will replace the various rating systems currently employed by the BSP, such as the CAMELS and ROCA rating systems, to be effective on July 1, 2020. It explicitly links the systemic importance and risk profile of a BSFI to the crafting of supervisory plans for each supervised institution such that: (i) supervisory attention continues to be proportionately focused on financial institutions that are of greater impact and higher risk; and (ii) prompt and calibrated enforcement actions are deployed to reinforce prudent risk-taking behaviour.
The principles, concepts and processes of the SAFr apply to all BSFls, regardless of size and risk profile. It also facilitates the conduct of consolidated supervision, where impact and risks are viewed on a group-wide basis.

BSP Memorandum No. M-2020-010, March 18, 2020.

This recognizes that the IDs issued by the BSFIs exempted from the strict home quarantine requirement to their personnel reporting as skeleton force are sufficient compliance with the requirements of the Memorandum of the Executive Secretary dated March 16, 2020 concerning the implementation of the ECQ over the entirety of Luzon.

 

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published_articles

 

ASSESSMENT UNPLUGGED: Solving the BIR Audit Conundrum (Part I)

By: Lino Ernie M. Guevarra

 

It’s that time of year.

Amidst the global maelstrom whipped up by the COVID-19 pandemic, its timing coinciding with our tax season makes it all the more taxing. It’s a welcome relief that the BIR, after its initial refusal, relented to extend the April 15 filing of the 2019 Annual ITR to May 15, 2020 sans any penalties. Likewise, the BIR through its Circulars and Operations Memorandum extended the filings of certain documents like protest letters and suspended the conduct of any field audit/investigation as well as prohibited personal service of electronic Letter of Authorities and the likes, but not assessment notices, during the enhanced community quarantine. Note though that only personal service is expressly prohibited with other modes of service, such as registered mail, still available. Service of assessment notices are not prohibited, and thus, may still possible.

Hence, companies may still have to watch out for that dreaded Formal Letter of Demand and Assessment Notice (FLD/FAN) due to prescribing cases by April 15, 2020. Under our Tax Code, the BIR can assess, that is, by issuing the FLD/FAN, “within three (3) years after the last day prescribed by law for the filing of the return” (but extendible to ten (10) years under certain cases, e.g., fraudulent or false returns). Extension of the period to assess can only be done through a legislative amendment, not merely by a BIR issuance. Ergo, the BIR’s march to assess prescribing cases, COVID or no COVID, can neither be contained nor quarantined.

So, what to do if you’re “lucky” to receive that dreaded assessment notice from the BIR?

I am certain you have already been bombarded with lots of tips and advice before but there’s no harm in adding to your stockpile of armaments. Knowing and understanding better the assessment procedure is still your best starting defense when assessed or hit by a BIR audit. The key is to know and also, to ask the right questions.

Electronic Letter of Authority (eLA or L/A)

A taxpayer’s assessment travails commence with the BIR’s issuance of an eLA. It authorizes the BIR to examine the Company’s books of accounts, records and documents. It serves as the initial salvo by the BIR giving you a checklist of documents to commence their examination. A word of caution. Do not ignore the BIR’s repeated demand to submit documents as doing so may trigger the issuance of a Subpoena Duces Tecum -- a legal order for you to “bring” or produce the documents strictly within a prescribed period. Further, one effect of the eLA issuance is that you can no longer amend tax returns for the period covered, even that of a tentative tax return.

As ruled by the Supreme Court and echoed by the BIR in its issuance, any tax assessment issued without a Letter of Authority is a violation of the taxpayer's right to due process and, is therefore, "inescapably void."

Remember the general rule: No L/A or eLA, no valid assessment.

Questions to Ask:

• Was a valid eLA issued to the Company for the covered period being examined?
• Does the eLA bear the name, designation and signature of the approving BIR official?
• Does it contain a system-generated serial number and the date?
• Were the names of the Revenue Officers assigned printed on said eLA?
• Does it reflect the tax types and taxable period to be covered by the audit?
• Does it indicate the basis for the audit (i.e., regular audit program, special audit, etc.)?
• Does it have any manually-written character, notation or erasure rendering it void?
• Was it properly served by the BIR and was received by the Company’s authorized personnel?

Notice for Informal Conference (NIC)

Starting February 2018, the requirement for the BIR to issue a NIC was reinstated after having been previously dispensed with in 2013 by going straight to the issuance of a Preliminary Assessment Notice (PAN). During the "Informal Conference" stage, the taxpayer has the opportunity to present his explanations, which shall not extend beyond thirty (30) days from receipt of the notice. If still found to be liable and the taxpayer is not amenable with the findings, the case will then be endorsed for PAN issuance.

NIC is part of the taxpayer’s due process requirement. Hence, no NIC, no valid assessment.

Questions to Ask:

• Was a Notice for Informal Conference issued prior to the issuance of the PAN?
• Was the Company given the opportunity by the BIR to explain the initial findings within the prescribed period of at least 30 days from receipt of NIC?

Preliminary Assessment Notice

After the NIC, the BIR issues the PAN showing the facts and the law, rules and regulations, or jurisprudence on which the proposed assessment is based. Failure of the taxpayer to reply to the PAN within fifteen (15) days from date of receipt, will make him in default, so that the FLD/FAN shall be issued. Now, if he responds within15 days disagreeing with the findings, the FLD/FAN shall be issued within 15 days from the taxpayer’s filing of reply.

A PAN is always required to be issued EXCEPT for the five (5) instances mentioned under Section 228 of the 1997 Tax Code, as amended (i.e., deficiency taxes arising from mathematical error, difference between tax withheld and amount actually remitted, excisable articles not paid, carry-over and automatic application of refund amount claimed against tax liabilities and article transferred from a tax-exempt to a non-exempt person).

The PAN, similar to the NIC, is part of the taxpayer’s due process right, a substantive and not merely a formal requirement. Generally, the absence of PAN may invalidate an assessment.

Questions to Ask:

• Was a PAN validly issued to the taxpayer?
• Did the PAN issued show in detail the facts and the law, rules and regulations, or jurisprudence on which the proposed assessment is based?
• Was the taxpayer afforded the prescribed time to file its reply?

For the next part of this article, we will discuss the other stages of the assessment procedure beginning with the FLD/FAN issuance, then filing of protest, issuance of the BIR’s final decision on disputed assessment and the administrative and judicial remedies available to the taxpayer under the law.

*******************************************************

For inquiries on the article, you may call or email

ATTY. LINO ERNIE M. GUEVARA
Special Counsel
T: +63 2 403 2001 loc. 160
This email address is being protected from spambots. You need JavaScript enabled to view it.

 
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bdb_team

 

EXPERTS

DISCLAIMER: The contents of this Insights are summaries of selected issuances from various government agencies, Court decisions and articles written by our experts. They are intended for guidance only and as such should not be regarded as a substitute for professional advice.

Copyright © 2019 by Du-Baladad and Associates (BDB Law). All rights reserved. No part of this issue covered by this copyright may be produced and/or used in any form or by any means – graphic, electronic and mechanical without the written permission of the publisher.

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