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).

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 © 2021 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.

SC Administrative Circular No. 43A-2020 did not give additional days for the parties to file the Motion for Reconsideration, but only suspended the filing of the same of those falling within the period covered in the Circular.

The Court in Division granted the Petition for Review of the taxpayer and cancels the assessment of the BIR. The latter received the Decision on July 30, 2020. As such, it has until August 14, 2020 to file the MR. But the CIR filed the MR only on September 1, 2020. He argues that since the period of the reglementary period to file the MR fell on the suspension of reglementary period for the filing of, among others, motions pursuant to SC Administrative Circular No. 43A-2020, he has therefore eleven (11) more days from the implementation of the suspension which is from August 4 to 18, 2020. Adding the 11 days to August 19, 2020, he now claims that he had until August 29, 2020 (falls on a Saturday and August 31, 2020 was a legal holiday) to file the same.

The Court finds CIR’s interpretation of the Circular erroneous. It is clear from the SC Circulars that while the Court was physically closed to court users from August 3 to 18, 2020, it shall still continue to receive petitions and pleadings electronically and will continue to resolve and decide cases pending before them during the said period. There is then no basis for CIR to add the number of suspended days, which totals eleven (11) days, and add the same on the date of the resumption of the reglementary period for the submission of the parties’ pleadings on August 19, 2020. (Sumitomo Corporation – Philippine Branch vs. Commissioner of Internal Revenue, CTA Case No. 9422, dated January 15, 2021)

The pertinent invoices, receipts, and certificate are the best and competent pieces of evidence required to substantiate taxpayer’s claim for tax refund, the ICPA Report and Schedules are merely corroborative.

The CTA in Division denied the taxpayer’s claim for refund of unutilized input VAT for failing to sufficiently establish that it has zero-rated sales during the subject taxable year. In the MR, the taxpayer argues that the ICPA found and reported that the remittances to the foreign corporation were duly accounted for, and the findings reported by the ICPA, if unchallenged, should be accorded respect.

The Court in Division denied the MR. It must be pointed out that the schedules prepared by the ICPA are merely corroborative of the actual input VAT paid and the actual sales to non-resident foreign entities doing business outside of the Philippines. The pertinent invoices, receipts, and certificate are the best and competent pieces of evidence required to substantiate taxpayer’s claim for tax refund. Indeed, while the taxpayer submitted several documents, the veracity of the figures as the documents presented were not sufficient to prove its action for tax refund. (McQuarrie Offshore Services PTY LTD - Philippine Branch vs. Commissioner of Internal Revenue CTA No. 9722 dated January 14, 2021)

The Court cannot give probative value to foreign business registration documents and Company Profile Fact Sheet generated from the taxpayer’s database.

The taxpayer imputes error on the part of the Court in not giving any credence to the foreign business registration printouts retrieved from AMINET database for being self-serving. BIR, on the other hand, argues that the amount disqualified from VAT zero-rating should be treated as subject to 12% VAT.

The CTA ruled that it cannot give credence or probative value to the foreign registration documents and Company Profile Fact Sheet printouts retrieved from AMINET database, a database maintained by the taxpayer’s Head Office in Germany, as they are self-serving and can be easily manipulated by the taxpayer to favor it.

The CTA further ruled that the failure to comply with the invoicing requirements under Section 112 does not deem the transaction subject to 12% VAT. The SC previously ruled that since a claim for tax refund or credit under Section 112 is not a claim for refund under Section 229, the correctness of the VAT Returns is not an issue and thus there is no need for the court to determine whether the taxpayer is liable for deficiency VAT. (Deutsche Knowledge Services, PTE. LTD. vs. Commissioner of Internal Revenue, CTA Case No. 7921, January 14, 2021)

A claim for exemption from payment of real property tax is actually an act of assailing the correctness of an assessment, hence, payment under protest applies.

Taxpayer was assessed by the LGU for RPT. It filed a protest, but without payment, on the ground that it was exempt from the payment of RPT. It then filed an appeal to the LBAA, but was denied. Its main contention in the CTA is that its appeal was based on Section 226 of the Local Government Code where payment under protest is not mandatory.

The CTA En Banc ruled that the nature of the appeal filed by the taxpayer falls under Section 252 of the LGC, and as such, payment under protest should first be complied with before filing an appeal with the LBAA. A claim for tax exemption merely raises a question on the reasonableness or correctness of the assessment, in which case the provisions of Section 252 of the LGC is required. The Supreme Court in one case held that a claim of exemption is actually an act assailing the correctness of an assessment, and as such, payment under protest applies. (National Grid Corporation of the Philippines vs. Central Board of Assessment Appeals, CTA EB No. 1963, January 14, 2021)

The delegated power of the ACIR to act on claims for refund is not one of the prohibited acts that the CIR cannot delegate.

The CIR moves for the early resolution of the taxpayer’s claim for input tax refund on the issue of jurisdiction of the Honorable Court. He alleged that the taxpayer admitted that it received his letter of denial on June 11, 2019. Hence, the taxpayer has until July 11, 2019 within which to elevate its case to the Court. However, instead of appealing the denial of the claim with the CTA, the taxpayer filed a request for reconsideration with the CIR which was subsequently denied. The taxpayer received such denial on December 11, 2019 and, thereafter, filed the Petition for Review on January 10, 2020.

The CTA dismissed the claim for refund. It also ruled that while it is true that the denial of the claim for refund is signed by the Assistant Commissioner, this is not one of the prohibited acts that the CIR cannot delegate. As such, the reckoning period should be from the receipt of the denial on June 11, 2019 signed by the ACIR, and not on the denial of the Request for Reconsideration received on December 11, 2019 signed by the CIR. (Nippon Express Philippines Corporation vs. CIR, CTA Case No. 10242, January 13, 2021)

The persons authorized to sign the LOAs are the CIR, Revenue Regional Director, and the Assistant Commissioner/Head Revenue Executive Assistant.

The CIR contends that the assessment against the Taxpayer is valid. He explains that the authority of the revenue officer emanated from Memorandum of Assignment ("MOA") signed by the Chief of Regular Large Taxpayers Audit Division II ("RLTAD II"), who is one of the valid signatories of the MOA as provided under Revenue Memorandum Order Nos. 8-20063 and 62-2010.

However, the CTA En Banc ruled that the CIR failed to cite any specific provision of law or BIR Regulation to support his view that the Chief of RLTAD II is one of the authorized representatives of the CIR who can authorize the assessment and audit of a taxpayer. The RMOs cited by the CIR did not specifically identify the Chief of RLTAD II as one of the officers contemplated under Section 6(A) of the Tax Code. Considering that the Chief of RLTAD II is not an authorized representative of the CIR, the MOA cannot be considered an equivalent of a LOA. (Commissioner of Internal Revenue v. Trinity Franchising and Management Corporation CTA EB No. 2010 dated January 12, 2021)

As long as the process of distillation is employed, whether directly or indirectly, the resulting product thereon may fall within the ambit of "other similar products of distillation", that is subject to excise tax.

Upon denial of its claims for refund representing the excise taxes it paid on the alkylate importations, the taxpayer filed a motion for partial reconsideration praying that the Court’s previous decision be reconsidered with regard to the findings that the alkylate importations are subject to excise taxes. The Taxpayer claims that alkylate is not a product of distillation since it was not produced by distilling crude oil. The Taxpayer further claims that Section 148(e) does not tax articles or products "whose raw materials" are products of distillation since the provision taxes only naphtha, regular gasoline and other similar products of distillation. Thus, it would defy logic to extend Section 148(e) to products "whose raw materials are products of distillation" (or so-called "indirect" products of distillation). The Taxpayer further claims that alkylate is not similar in nature to naphtha and regular gasoline in use, purpose, or nature.

In denying the taxpayer’s motion for partial reconsideration, the CTA ruled that an examination of Section 148(e) readily shows that the word "distillation" is only found in the phrase "other similar products of distillation". There is nothing therein that suggests that distillation should be the ordinary or direct process through which the product is formed in order to fall within the scope of the proviso. The CTA also rejects the Taxpayer’s claim that alkylate is not a product of distillation, because, while alkylate is not directly produced through the process of distillation but by alkylation, still, it cannot be denied that its very existence was derived from the utilization of these two raw materials, namely, olefins and isobutane, which are both products of crude oil distillation. Thus, alkylate would not have come into existence without the presence of the said raw materials. (Petron Corporation v. Commissioner of Internal Revenue CTA Case Nos. 9565, 9606, & 9645 dated January 12, 2021)

The CTA is not compelled to take judicial notice of pieces of evidence offered and admitted in a previous case involving the same taxpayer.

The taxpayer claims that it has sufficient creditable withholding taxes to be carried over for the taxable year 2014. However, it only presented that BIR Forms pertaining to CY 2005 only. For the CWTs for the CYs 2006 and 2007, it was able to present sufficient evidence. The taxpayer insists that the Court should take a look and adopt the findings made in the similar cases of Court of Tax Appeals (CTA) Case No. 8629 (2011) and CTA Case No. 9024 (2013) which also involves the taxpayer’s claims for refund of its excess CWT.

The CTA stated that evidence already presented and admitted by the court in a previous case cannot be adopted in a separate case pending before the same court without the same being offered and identified anew. Thus, in a pending case, it is not mandatory upon the courts to take judicial notice of pieces of evidence which have been offered in other cases even when such cases have been tried or pending in the same court. A court is not compelled to take judicial notice of pieces of evidence offered and admitted in a previous case unless the same are properly offered or have accordingly complied with the requirements on the rules of evidence. (Ayala Corporation v. Commission of Internal Revenue CTA Case No. 9556, January 11,2021)

The BIR's appreciation of the taxpayer's allegations and supporting documents is discretionary.

The taxpayer claims the factual antecedents of the instant case are very much alike with those in the case of Commissioner of Internal Revenue v. Avon Products Manufacturing, Inc. (G.R. No. 201398-99, October 3, 2018) (hereinafter referred to as the "Avon Case"), where the Supreme Court ruled that the taxpayer's right to due process was violated where the Details of Discrepancy attached to the Preliminary Assessment Notice, as well as the Formal Letter of Demand with the Final Assessment Notices, did not even comment or address the defenses and documents submitted by Avon. Thus, Avon was left unaware on how the Commissioner or her authorized representatives appreciated the explanations or defenses raised in connection with the assessments.

In ruling against the taxpayer, the CTA held that it was not deprived of its constitutionally protected right to due process. Here, the BIR gave the taxpayer the opportunity to be heard. In fact, the BIR instructed the taxpayer to submit supporting documents in support of its request for reinvestigation. The CIR's appreciation of the taxpayer's allegations and supporting documents is discretionary. The BIR explained in its FDDA the reasons for the denial of the taxpayer’s arguments as well as the results of the reinvestigation. (Level Up, Inc. v. Commissioner of Internal Revenue, CTA EB No. 2069, January 6, 2021)

The issuance of the FAN, without consideration and evaluation of the defenses contained in the Protest to the PAN, violated taxpayer's right to due process.

The taxpayer asserted that the FAN issued by the BIR did not include any comment whatsoever on the matters raised by the former in its Protest to the PAN or even a discussion of the latter's findings in a manner that the former may know the various issues involved and the reasons for the assessments. The same FAN merely reiterated the assessments contained in the PAN and that the BIR failed to meet the due process standards, rendering the FAN null and void.

In ruling in favor of the taxpayer, the CTA held that the issuance of the FAN, without consideration and evaluation of the defenses contained in the Protest to the PAN, violated the taxpayer's right to due process. (Dizon Farms Produce, Inc. v. Commissioner of Internal Revenue, CTA Case No. 9711, January 5, 2021)

Equally important in claiming the tax credits is proof that the declaration of income earned or received is made in the same period with the claiming of the related tax credit.

The taxpayer claimed for refund of its excess and unutilized creditable withholding taxes (CWT) during the taxable year (TY) 2016. However, upon examination of the documents to substantiate the taxpayer’s claim, there had been service income billed and recorded in the general ledger in TY 2015 which were collected only in TY 2016. Likewise, the related CWT certificates were issued by the payors to taxpayer in TY 2016.

CTA has held that it is not enough that the related income earned or received be declared as part of the gross income. Equally important in claiming the tax credits is proof that the declaration of income earned or received is made in the same period with the claiming of the related tax credit. (Service Resources, Inc. v. Commissioner of Internal Revenue, CTA Case No. 9978, January 4, 2021)

RMC No. 2-2021, January 6, 2021
This provides guidelines for enlisted/delisted large taxpayers effective January 1, 2021.

Pursuant to RMC 112-2020, which provided guidelines to be observed pertinent to postponement of the effectivity of the enlisting/delisting of large taxpayers, this Circular provides for the following to be observed effective January 1, 2021:

1. All transactions of the affected enlisted taxpayers, effectivity of which was postponed up to January 1, 2021, shall continue and remain to be handled by the Revenue District Officers (RDOs) where they are registered prior to July 1, 2020; and

2. Transactions of delisted taxpayers may likewise now be accommodated and handled by the RDO having jurisdiction over the said taxpayers.

RMC 5-2021, December 28, 2020 –
This provides simplified policies on the Application for Registration of Computerized Accounting System (CAS), Computerized Books of Accounts (CBA) and/or its components, including the Electronic Storage System (ESS), Middleware or other similar systems.

The registration of CAS, CBA, ESS, Middleware or other similar systems (collectively as “System”) shall no longer be required to secure Permit to Use (PTU), instead, shall be subject to the following policies:

• Registration of the System shall require the submission of documentary requirements stated on the Checklist of Documentary Requirements (CDR) (Annex A) to the RDO where the taxpayer is registered.
• The System shall comply with the standards under Annex B. Violation thereof by virtue of a post-evaluation audit shall subject the taxpayer to penalties.
• Acknowledgement Certificate (Annex C) shall be issued within three (3) working days from receipt of complete documents by the RDO where the taxpayer is registered.
• System demonstration shall no longer be required prior to the use of the System.
• All taxpayers with existing PTUs shall no longer be required to register, except when there is either non-compliance with existing revenue issuances during audit, or the existence of a major enhancement to the System.
• Taxpayer must submit a new application for registration in case of major system enhancement.
• In case of minor system enhancement, taxpayer must submit a written notice to the RDO specifying the minor enhancement made.

RMC 15-2021, January 27, 2021 –
This announces the relaunching of Central Business Portal (CBP).

The CBP is an online system which serves as a central system to receive applications and captures application data involving business-related transactions from different government agencies (SEC, BIR, SSS, Philhealth, Pag-Ibig) and a platform that will promote the use of the electronic payment systems for the said agencies.

For initial implementation, (A) Corporations with two (2) to four (4) incorporators, (B) Regular corporations whose incorporators are juridical entities and/or the capital structure is not covered by the 25%-25% rule, and (C) One Person Corporations (OPC) may now register through CBP the following:

1. Registration of Corporations with SEC and issuance of the corresponding Company Registration Number (CRN);
2. Issuance of TIN of new corporations;
3. Identification of the national internal revenue taxes which the new corporation will be liable to;
4. Payment of Annual Registration Fee (ARF) and Loose Documentary Stamp Tax (DST) through the ePayment facilities or manually at the RDO.

For manual payment of ARF and loose DST, the taxpayer shall submit the following CBP generated documents, together with the Checklist of Documentary Requirements for Corporations (Annex A).
BIR Certificate of Registration (COR) is electronically generated and bears a QR code. It shall be printed by the taxpayer in A4 size and shall proceed to the respective RDO to either buy BIR Printed Receipts/Invoices (BPR/BRI) or apply for Authority to Print (ATP).

Corporations not registering through the CBP shall comply with the documentary requirements provided in Annex A2.1 of RMC No. 57-2020.

RMC 17-2021, January 26, 2021 –
This Circular provides for the extension of the deadline for the filing/submission of the Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes (BIR Form Nos. 1604-C and 1604-F).

This Circular is issued to inform all concerned taxpayers that the deadline of filing of BIR Form Nos. 1604-C and 1604-F, including the submission of the 4th Quarter (QAP) and Annual Alphabetical List of Employees/Payees from Whom Taxes Were Withheld (alphalist) using the new version of the Alphalist Data Entry and Validation Module (Version 7.0) under RMC No. 7-2021 is extended from January 31, 2021 to February 28, 2021.

Resubmission of alphalist that were already submitted prior to the issuance of the said RMC using the old version of the module is no longer required.

SEC Notice dated January 4, 2021
This provides for the schedule and application procedure of the SEC Certification Examinations for the 1st Quarter of 2021.

For purposes of complying with public health standards to mitigate the spread of COVID-10, the Securities and Exchange Commission (“SEC”) has released guidelines for the application procedure and schedule of the SEC Certification Examination for the 1st quarter of 2021 at the Main Office.

The Examination shall be held from 10:00 am to 1:00pm at the SEC Examination Room 3/F Breezeway, Secretariat Building, PICC Complex, Roxas Boulevard, Pasay City on the following dates:

• January 18, 20, 22, 25, 27, and 29
• February 1, 3, 5, 8, 10, 15, 17, 19, 22, 24, and 26
• March 1, 3, 5, 8, 10, 12, 15, 17, 19, 22, 24, 26, and 29

Application for the Examination shall be made via Email in the form provided by the SEC in PDF format. Payment of the Examination Fee shall be made through any of the following options:

1. SEC Main Office;
2. SEC Office Ortigas; or
3. Any LandBank Branch.

SEC Notice dated January 18, 2021
This provides a clarification as to the entities required to comply with SEC MC No. 28, Series of 2020 as well as an extension of the deadline of said MC.

The SEC clarified that Publicly-Listed Companies, Issuers of Registered Securities, Exchanges and Self-Regulatory Organizations, Broker Dealer in Securities, Investment Houses, Underwriter of Securities, Government Securities Eligible Dealers, Investment Company Advisers, Mutual Fund Distributors, Transfer Agents and other Markets and Securities Regulation Department regulated and supervised entities are enjoined to comply with SEC MC No. 28, Series of 2020.

Furthermore the deadline for submission has been extended to February 22, 2021.

BSP Circular Letter Nos. 2021-003, 2021-004 & 2021-005
January 8, 2021
This calls for the publication/position of certain documents as of December 31, 2020.

This provides the call for the publication/position of Balance sheet, as of 31 December 2020:

BSP Circular Letter No. 2021-007
January 13, 2021
This directs the issuance of Sanctions Freeze Order (SFO) to take effect immediately against those subject of designation as terrorist organizations.

The AMLC issued Resolutions directing the issuance of Sanctions Freeze Order (SFO) to take effect immediately against those subject of designation as terrorist organizations, as follows:

a. AMLC Resolution No. TF-33, Series of 2020, dated 23 December 2020 – SFO against the Communist Party of the Philippines and the New People’s Army also known as Bagong Hukbong Bayan (CPP/NPA); and

b. AMLC Resolution No. TF-34, Series of 2020, dated 23 December 2020 - SFO against the (1) Islamic State in Iraq and Syria in South-East Asia; (2) Dawlatul Islamiyah Waliyatul Masrik; (3) Dawlatul Islamiyyah Waliyatul Mashriq; (4) IS East Asia Division; (5) Maute Group; (6) Islamic State East Asia; (7) Maute ISIS; (8) Grupong ISIS; (9) Grupo ISIS; (10) Khilafah Islamiyah; (11) Khilafah Islamiyah Mindanao; (12) Ansharul Khilafah; (13) Bangsamoro Islamic Freedom Fighters-Bungo; (14) Bangsamoro Islamic Freedom Fighters-Abubakar; (15) Jama’atu al-Muhajirin wal Ansar fil Filibin; (16) Daulah Islamiyah; and (17) other Daesh-affiliated groups in the Philippines.

The above resolutions require the freezing without delay of the following property or funds, including related accounts:

a. property or funds that are owned or controlled by the subjects of designation, and is not limited to those that are directly related or can be tied to a particular terrorist act, plot, or threat;
b. property or funds that are wholly or jointly owned or controlled, directly or indirectly, by the designated persons, organizations, associations, or group of persons;
c. property or funds derived or generated from funds or other assets owned or controlled, directly or indirectly, by the designated persons, organizations, associations, or group of persons; and
d. property or funds of persons and entities acting on behalf or at the direction of the designated persons, organizations, associations, or group of persons.

All BSP-Supervised Financial Institutions (BSFIs) are directed to submit to the AMLC: (i) a written return pursuant to Rule 16.c of the IRR of the Terrorism Financing and Prevention Act of 2012 (TFPSA); and (ii) Suspicious Transaction Reports on all previous transactions of the designated persons, organizations, associations or groups of persons, within five (5) days from receipt of the SFO.

BSP Memorandum No. 2021-003
January 8, 2021
This provides the guidelines on the Electronic Submission of the Report on Reclassification of Debt Securities (RRDS) Out of the Fair Value Category.

The following guidelines shall be observed for the electronic submission of the RRDS on or before 29 January 2021.

1. The prescribed Data Entry Template (DET) and the corresponding Control Prooflist (CP) of the RRDS can be downloaded from http://www.bsp.gov.ph/SES/reporting_templates.
2. The DET with its corresponding scanned CP in Portable Document Format (PDF) duly signed by the authorized officials1 of the BSFI shall be electronically transmitted on or before 29 January 2021, to the prescribed e-mail address, This email address is being protected from spambots. You need JavaScript enabled to view it., using the required format for the subject, as follows:

RRDS <space><Name of BSFI>,<space><DD MMMM YYYY (e.g. 30 September 2020)>

and using the following prescribed file names and file format:

3. Only electronic submissions originating from officially registered email address/es of the BSFIs shall be recognized and accepted by the DSA. The acknowledgment receipt for the submitted RRDS report and its corresponding validation results, upon availability, will be sent to the same registered email address/es.
4. Hard copy submission shall not be accepted. Covered BSFIs that are unable to transmit via email may submit the DET and its accompanying scanned CP using any portable storage device (e.g., USB flash drive) through messengerial or postal services within the prescribed deadline addressed to:

The Director
Department of Supervisory Analytics (DSA) Bangko Sentral ng Pilipinas
11th Floor, Multi-Storey Building
BSP Complex, A. Mabini Street, Malate
1004 Manila

BSP Memorandum No. 2021-008
January 19, 2021
This provides the Guidelines on the Electronic Submission of the Report on Crimes and
Losses (RCL).

Submission Procedures:

1. Reportable incidents falling due for submission to the BSP after 31 January 2021 shall be transmitted electronically using the DET prescribed for the updated RCL. The prescribed DET and its supporting Control Prooflist (CP) for the Initial Report and Final Report, respectively, and the User Guide as relevant reference for accomplishing the DET can be downloaded from http://www.bsp.gov.ph/SES/reporting_templates, by entering the assigned BSFI code. The DET may also be requested directly from the BSP-Department of Supervisory Analytics (DSA) through sdc- This email address is being protected from spambots. You need JavaScript enabled to view it.. For MSBs and Pawnshops, the BSFI code is patterned after the first 7-digit number in the Certificate of Registration (COR) for MSBs and/or Certificate of Authority to Operate (AOR) for Pawnshops, for example:

2. The DET for the RCL (DET-RCL) together with the corresponding scanned CP in Portable Document Format (PDF) signed by the authorized official of the reporting entity shall be electronically transmitted within the existing deadline prescribed for the lnitial Report (not later than 10 calendar days from knowledge of crime/incident) and Final Report (not later than 20 calendar days from termination of investigation) to the following prescribed e-mail addresses:

Type of Institution E-mail Address
Non-Stock Savings and Loan Association This email address is being protected from spambots. You need JavaScript enabled to view it.

Money Service Business This email address is being protected from spambots. You need JavaScript enabled to view it.

Pawnshop This email address is being protected from spambots. You need JavaScript enabled to view it.

3. Only electronic submissions originating from officially registered e-mail address/es of the NSSLAs, MSBs and Pawnshops shall be recognized and accepted by the DSA.

4. NSSLAs, MSBs, and PAWNSHOPs shall apply the prescribed format for the Subject, as follows:

<report name>space<ENTITY NAME>space<control no.>space<report status>

5. The prescribed file names and file format shall be used, as follows:

<reference no. >_<report status>.<file extension/format >

RCL Reference No. is composed of two (2) fields: First (template provided field): Report Name and BSFI Code; Second (input field): Control No. - only numeric values shall be accepted, i.e., the month and year when the initial report is submitted (mmyyyy) and the four (4) digit assigned by the BSFI, which, shall be in a continuing series until the end of the year. (i.e., RCL-BSFI Code-mmyyyy-0001)

6. NSSLAs, MSBs, and Pawnshops that are unable to transmit via email due to any fortuitous event may submit the DET and its corresponding scanned CP using any portable storage device (e.g., USB flash drive) through messengerial or postal services within the prescribed deadline to:

The Director
Department of Supervisory Analytics (DSA) Bangko Sentral ng Pilipinas
11th Floor, Multi-Storey Building
BSP Complex, A. Mabini Street, Malate
1004 Manila

7. Only one (1) DET and its corresponding signed and scanned CP shall be submitted for each applicable reporting period within the prescribed deadline. Submissions containing more than one (1) DET and one (1) CP shall automatically be rejected by the system.

BSP Memorandum No. 2021-010
January 19, 2021
This provides the Guidelines on the Electronic Submission of List of Members of the Board of Directors, Trustees, and Officers (LDTO).

Submission Procedures:

1. BSFIs shall electronically submit to the BSP-Department of Supervisory Analytics (DSA), LDTO in Portable Document Format (PDF) duly signed by the authorized officials of the BSFI and the corresponding Excel File of the prescribed Data Entry Template (DET) which can be downloaded from http://www.bsp.gov.ph/ses/reporting_templates.

2. The PDF of the LDTO-DET and its corresponding Excel File shall be electronically transmitted within 20 banking/business days from the annual election of the board of directors/trustees, as provided in the BSFI’s by-laws, to the prescribed email addresses, as follows:

using the required format for the subject, as follows:

LDTO <Bank Name>, <Date of Board’s Annual Election>

The following are the prescribed file names:

3. For Money Service Businesses, Pawnshops, Virtual Currency Exchanges, and Electronic Money Issuers, the submission of the LTDO is only required upon registration and as requested by the supervising BSP department.

4. For BSFIs covered by Memorandum No. M-2017-028, only electronic submissions originating from their officially registered email address/es of the BSFIs shall be recognized and accepted by the DSA. The acknowledgment receipt for the submitted LDTO, will be sent to the same registered email address/es.

5. Hard copy submission shall not be accepted. Covered BSFIs that are unable to transmit electronically may submit the prescribed report in any portable storage device (e.g. USB flashdrive) through messengerial or postal services within the prescribed deadline addressed to:

The Director
Department of Supervisory Analytics (DSA) Bangko Sentral ng Pilipinas
11th Floor, Multi-Storey Building
BSP Complex, A. Mabini Street, Malate
1004 Manila

6. Only one (1) DET in Excel File and its corresponding signed PDF and, if applicable, the Certification, shall be submitted for each applicable reporting period within the prescribed deadline. Submissions containing more than one (1) DET, one (1) PDF and one (1) certification, as applicable, shall automatically be rejected by the system.

IC Circular Letter
CL-2021-02 dated January 7, 2021
This provides the revised guidelines on the declaration and/or distribution of dividends for entities regulated by the Insurance Commission.

Entities regulated by the Insurance Commission shall meet their respective regulatory measures at all times which shall be duly attested to by the President and Treasurer of the company before declaration and/or distribution of dividends out of the unrestricted retained earnings. However, the declaration of dividends shall not require the prior approval or clearance from the Insurance Commission.

Within 30 days after such declaration or distribution, the regulated entity shall report the same to the Insurance Commission through the Investment Services Division. Such report shall be accompanied by documentary requirements as enumerated under the Circular Letter and subject to the evaluation of the Insurance Commission.

Declaration or distribution of dividends by a regulated entity in violation of the Circular Letter may be ordered to cease and desist from doing business until the amount of such dividend of portion thereof in excess of the amount allowed has been restored.

IC Circular Letter
CL-2021-06 dated January 26, 2021
This provides the Guidelines on the electronic submission of requests for investment approval, compliance with security deposit requirements and filing of reportorial requirements.

The Circular Letter applies to all regulated entities and other financial institutions with the following submissions:

1. Report on Investments Made and Sold or Disposed of
2. Report on Derivative Transactions
3. Statement of Capital, Reserves, and Surplus Investments
4. Report on Material Related Party Transactions
5. Statement of Rental Income
6. Report on Investments held under IMA
7. Request for Approval of Investments
8. Compliance with Security Deposit Requirements

It further provides that the abovementioned applications and reportorial submissions shall be submitted through the Online Submission Portal of the Investments Service Division (“ISD”) indicated below:

https://onlinesubmission.insurance.gov.ph/isd/login

General requirements and documentary requirements to be submitted together with the application and reportorial submissions stated above are either indicated in the Circular Letter of annexed thereto.

Lastly, submission shall be considered officially received once the ISD sends an email acknowledging receipt of the requirements. Report submissions which do not comply with the provisions of the Circular Letter shall not be accepted and considered non-compliant which would cause the imposition of the applicable penalties for late submission.

IC Legal Opinion No. 2021-02 dated January 21, 2021
This opinion explains when the date or period of counting of penalties provided under Section 243 of the Insurance Code validly starts.

The double interest on the proceeds of the policy under Section 243 of the Insurance Code is imposed for the duration of the delay, counted from the lapse of 30 days, or on the 31st day, from the date of receipt of proof of loss and ascertainment of the loss or damage, if ascertainment is had or made. In the even where no ascertainment of the loss or damage is had or made within 60 days from the insurer’s receipt of the proof of loss, the double interest is imposed on the proceeds of the policy for the duration of the delay, counted from the lapse of 90 days, or on the 91st day, from the date of the insurer’s receipt of proof of loss.

However, if the insurer’s “failure or refusal to pay is based on the ground that the claim is fraudulent”, then the double interest provided in Section 243 of the Insurance Code will not apply.

DOF Opinion No. 011.2020 dated September 23, 2020
A taxpayer who receives an adverse ruling from the Commissioner of Internal Revenue may, within 30 days from the date of receipt of such ruling, seek its review by the Secretary of Finance.

The BIR Ruling involved in this Opinion was received by the taxpayer on February 13, 2020. Instead of filing a request for review with the Department of Finance, a protest was filed with the BIR on February 27, 2020. Subsequently, on August 19, 2020 the request for review of the BIR Ruling was received by the Department of Finance.

Pursuant to DOF Department Order No. 007-02, DOF Department Order No. 023-01, and Revenue Administrative Order (RAO) No. 03-01, a taxpayer who receives an adverse ruling from the Commissioner of Internal Revenue may, within 30 days from the date of receipt of such ruling, seek its review by the Secretary of Finance.

Since the Request for Review of BIR Ruling was filed beyond the reglementary period, the Department of Finance could not acquire jurisdiction over the case. Hence, the Request for Review of the BIR Ruling was denied.

DOF Opinion No. 013.2020 dated November 25, 2020
In determining the reasonableness/
unreasonableness of the honorarium as to constitute an “inurement”, the amount as well as the relevant and surrounding circumstances that necessarily influence the appropriateness thereof should be considered.

The BIR ruling being reviewed denied the taxpayer’s request for income tax exemption under Section 30(E) of the National Internal Revenue Code (NIRC) of 1997, as amended. Particularly, the BIR took notice of the honorarium amounting to PhP43,658.00 in 2014, PhP58,300 in 2015, and PhP56,333 in 2016 as reflected in the taxpayer’s AFS. According to the BIR, since said amounts violate the requirement that no part of the net income or assets of the corporation shall inure to the benefit of any individual or specific person, the taxpayer cannot be qualified as a non-stock, non-profit corporation as to entitle it to the exemption.

The Secretary of Finance stated that in determining the reasonableness/unreasonableness of the honorarium involved, it is not sufficient to consider the amount thereof but also the relevant and surrounding circumstances that necessarily influence the appropriateness thereof. The characteristics, corporate purpose/s and actual operations of the entity serve as a guide in determining the nature of the organization.

Here, the payment of honorarium for guest speakers is a legitimate expense related to an activity that promotes the objective and benevolent purpose of the organization. Furthermore, the amount of honorarium reflected in the AFS in 2014, 2015, and 2016 are reasonable considering the numerous seminars the taxpayer conducts every year. Hence, said honorarium is not considered exorbitant or unreasonable to fall under the “inurement” prohibition and the request for income tax exemption should be granted.