Category Archives: Taxation

REVENUE MEMORANDUM CIRCULAR NO. 60-2014 (July 24, 2014): CLARIFICATION ON THE APPLICABILITY OF RMC 8-2014 ON GENERAL PROFESSIONAL PARTNERSHIPS

Under Revenue Memorandum Circular No. 8-2014, withholding agents must require all individuals and entities to present valid, current and subsisting tax exemption certificates or rulings before payment of related income. Failure on the part of the taxpayer to present such exemption certificate or ruling shall subject the income to appropriate withholding taxes due on the transaction. On the other hand, failure of the withholding agent to withhold taxes in the absence of said certificate or ruling shall subject the withholding agent to penalties equal to the total amount of tax not withheld as provided under Section 251 of the Tax Code.

RMC 60-2014 clarifies that the provisions of RMC 8-2014 do not apply to General Professional Partnerships (GPPs) inasmuch as income payments to GPPs are not subject to income tax and withholding tax.

Full text here.

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OFFICEMETRO PHILIPPINES, INC. (formerly REGUS CENTRES, INC.) v. COMMISSIONER OF INTERNAL REVENUE, CTA Case No. 8382, June 3, 2014

Taxation; Association/condominium dues and other fees and charges collected from members that are used solely for administrative purposes are not subject to income tax and withholding tax. The BIR in its various rulings, held that association/condominium dues, membership fees and other assessment/charges collected from the members, which are merely held in trust and which are to be used solely for administrative expenses in implementing their purpose(s), viz., to protect and safeguard the welfare of the owners, lessees and occupants; provide utilities and amenities for their members, and from which the corporation could not realize any gain or profit as a result of their receipt thereof, must not be included in said corporation’s gross income. This means that the same are not subject to income tax and to withholding tax.

Full text here.

REVENUE MEMORANDUM CIRCULAR 10-2014, February 10, 2014

Under the Department of Finance Department Order No. 12-2014, importers must secure an Importer Clearance Certificate from the BIR as part of their accreditation with the Bureau of Customs.

In turn, the BIR issued Revenue Memorandum Circular No. 10-2014 to prescribe the policies, guidelines and procedure to accredit and revoke the accreditation of importers and customs brokers. The documentary requirements in support of the Importer Clearance Certificate include: BIR Certificate of Registration, latest Annual Income Tax Return with Audited Financial Statements, latest Mayor’s Permit, and a Certificate of Good Standing issued by the SEC to prove compliance with reportorial requirements. To be eligible for accreditation, the applicant must satisfy criteria such as not having “stop-filer” cases, accounts receivable or delinquent accounts with the BIR. It should have no record of pending tax evasion cases or unresolved issues arising from discrepancies in its declared income or expenses as may be tagged under the BIR’s Reconciliation Lists for Enforcement (RELIEF) System and Tax Reconciliation System.

Accreditation shall be valid for three years from issuance but compliance with the criteria shall be verified on a semestral basis.

 

 

Supreme Court issues TRO against BIR Revenue Regulations No. 4-2014

On April 22, 2014, the Supreme Court issued a TRO in connection with a petition filed by the Integrated Bar of the Philippines. In the suit, the IBP questioned the implementation of BIR Revenue Regulations No. 4-2014 which requires self-employed professionals to submit, among others, an affidavit indicating the rates, manner of billings, and the factors considered in determining service fees. The IBP argued that the Revenue Regulations violate attorney-client privilege and encroach upon the Supreme Court’s exclusive power to regulate members of the Bar.

Considering that only the IBP brought suit against the BIR, the coverage of the TRO is limited to lawyers.

 

THE CITY OF MANILA ETC., ET AL. v. HON. CARIDAD H. GRECIA-CUERDO ETC., ET AL., G.R. No. 175723, February 4, 2014

Taxation; The CTA has jurisdiction over a special civil action for certiorari assailing an interlocutory order issued by the RTC in a local tax case. In order for any appellate court to effectively exercise its appellate jurisdiction, it must have the authority to issue, among others, a writ of certiorari. In transferring exclusive jurisdiction over appealed tax cases to the CTA, it can reasonably be assumed that the law intended to transfer also such power as is deemed necessary, if not indispensable, in aid of such appellate jurisdiction. There is no perceivable reason why the transfer should only be considered as partial, not total.

Consistent with the above pronouncement, this Court has held as early as the case of J.M. Tuason & Co., Inc. v. Jaramillo, et al. [118 Phil. 1022 (1963)] that “if a case may be appealed to a particular court or judicial tribunal or body, then said court or judicial tribunal or body has jurisdiction to issue the extraordinary writ of certiorari, in aid of its appellate jurisdiction.” This principle was affirmed in De Jesus v. Court of Appeals (G.R. No. 101630, August 24, 1992) where the Court stated that “a court may issue a writ of certiorari in aid of its appellate jurisdiction if said court has jurisdiction to review, by appeal or writ of error, the final orders or decisions of the lower court.

Full text here.

REVENUE MEMORANDUM CIRCULAR NO. 63-2013 (September 26, 2013): CLARIFICATION ON THE TAXABLE YEAR COVERED BY REVENUE REGULATIONS NO. 12-2013

Under Revenue Regulations No. 12-2013, in cases where no withholding of tax was made in accordance with Sections 57 and 58 of the Tax Code, no deduction shall be allowed from gross income notwithstanding payment of withholding tax at the time of audit investigation, reinvestigation/reconsideration.

Revenue Memorandum Circular No. 63-2013 clarifies that the above rule shall only apply to audit investigations for taxable year 2013.

Full text here.