Sale, Importation or Lease of Passenger or Cargo Vessels and Aircraft, including Engine, Equipment and Spare Parts thereof for Domestic or International Transport Operations are Not Subject to VAT

Revenue Regulations No. 15-2015 has recently issued by the BIR amending Sections 4.109-1 (B)(1)(s), (t) and (u) of Revenue Regulations (RR) No. 16-2005, as amended with details as follows:

SECTION 4.109-1. VAT-Exempt Transactions. - 

(B) Exempt transactions. - 

(1) Subject to the provisions of Sebsection (2) hereof, the following transactions shall be exempt from VAT:

(s) The transport of passengers by international carriers doing business in the Philippines shall be exempt from value-added tax (VAT) pursuant to Sections 109(1)(s) of the NIRC, as amended by RA No. 10378. The transport of cargo by international carriers doing business in the Philippines shall be exempt from VAT pursuant to Sections 109(1)(E) of the NIRC, as amended by RA No. 10378, as the same is subject to Common Carrier's Tax (Percentage Tax on International Carriers) under Section 118 of the NIRC, as amended. International carriers exempt under Sections 109(1)(S) and 109(1)(E) of the NIRC, as amended, shall not be allowed to register for VAT purposes.

(t) Sale, importation or lease of passenger or cargo vessels and aircraft, including engine, equipment and spare parts thereof for domestic or international transport operations; Provided, however, that the exemption from VAT on the importation and local purchase of passenger and/or cargo vessels shall be subject to the requirements on restriction on vessel importation and mandatory vessel retirement program of MARINA.

(u) Importation of fuel, goods and supplies by persons engaged in international shipping or air transport operations; Provided, that the said fuel, goods and supplies shall be used exclusively or shall pertain to the transport of goods and/or passenger from a port in the Philippines directly to a foreign port, or vice versa, without docking or stopping at any other port in the Philippines unless the docking or stopping at any other port in the Philippines unless the docking or stopping at any other Philippine port is for the purpose of unloading passengers and/or cargoes that originated from abroad; Provided, further, that if any portion of such fuel, goods or supplies is used for purposes other than that mentioned in this paragraph, such portion of fuel, goods and supplies shall be subject to twelve percent (12%) VAT starting February 1, 2006;

(v) Services of banks, non-bank financial intermediaries performing quasi-banking functions, and other non-bank financial intermediaries, such as money changers and pawnshops, subject to percentage tax under Secs. 121 and 122, respectively, of the Tax Code; and

(w) Sale or lease of goods or properties or the performance of services other than the transactions mentioned in the preceding paragraphs, the gross annual sales and/or receipts do not exceed the amount of One Million Nine Hundred Nineteen Thousand Five Hundred Pesos (P1,919,500.00); Provided, every three (3) years thereafter, the amount shall be adjusted to its present value using the Consumer Price Index, as published by the NSO; Provided, further, that such adjustment shall be published through revenue regulations to be issued not later than March 31 of each year;

For purposes of the threshold of P1,919,500.00, the husband and the wife shall be considered separate taxpayers. However, the aggregation rule for each taxpayer shall apply. For instance, if a professional, aside from the practice of his profession, also derives revenue from other lines of business which are otherwise subject to VAT, the same shall be combined for purposes of determining whether the threshold has been exceeded. Thus, the VAT-exempt sales shall not be included in determining the threshold.

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202015/RR%2015-2015.pdf of the full text of RR No. 15-2015.

Alphalist Data Entry and Validation Module Version 5.0 (New) is Now Available

The Bureau of Internal Revenue (BIR) just updated their downloadables particularly the Alphalist data Entry and Validation Module Version 5.0 (New)

To download the Alphalist data Entry and Validation Module Version 5.0 (New) just click the following:

HTML: http://www.bir.gov.ph/images/bir_files/downloadables/alphalist/alphalist_full_setup_v5.exe

ATC PATCH: http://www.bir.gov.ph/images/bir_files/old_files/zip/atc_patch.zip

To download the Alphalist data Entry and Validation Module Version 5.1 (New) just click the following:

HTML: http://www.bir.gov.ph/images/bir_files/downloadables/alphalist/alphalist_full_setup_v5.1.exe

 

The Alphalist is updated in relation to the issuance of Revenue Regulations (RR) No. 3-2015 and other existing Revenue Regulations.

Income Payment or Expense/Cost not Subject to Withholding of Tax and Income Tax

In Section 2 of Revenue Regulations No. 12-2013 - Amendment. - Section 2.58.5 of RR 2-98, is hereby further amended to read as follows:

"Sec. 2.58.5. Requirements for Deductibility. - Any income payment which is otherwise deductible under the Code shall be allowed as a deduction from the payor's gross income only if it is shown that the income tax required to be withheld has been paid to the Bureau in accordance with Secs. 57 and 58 of the Code.

No deduction will also be allowed notwithstanding payments of withholding tax at the time of the audit of investigation or reinvestigation/reconsideration in cases where no withholding of tax was made in accordance with Secs. 57 and 58 of the Code."

However, Revenue Memorandum Circular no. 63-2013 was issued to clarify RR No. 12-2013 (dated 11 July 2013), which amends the requirements of deductibility of certain income payments under Section 2.58.5 of RR 2-98 as amended. As stated in RR No. 12-2013, no deduction will be allowed notwithstanding payments of withholding tax at the time of the audit investigation or reinvestigation/consideration in cases where no withholding of tax was made in accordance with Secs. 57 and 58 of the Code. In this regard, it is hereby clarified that the provisions of RR No. 12-2013 shall apply to audit investigation for taxable year 2013.

REIMBURSEMENT OF EXPENSES OR COST

Payments made by the Company to their Officer and Employees as reimbursement of expenses/cost or liquidation of advances are not considered as income payment. The ordinary, necessary, business transactions related to the operations of the Corporation are considered as REIMBURSEMENT OF COST AND NOT INCOME but just a RETURN OF CAPITAL, and thus, is not subject to Withholding Tax and Income Tax in the Philippines. 

CASUAL PURCHASE INVOLVING A SINGLE TRANSACTION OF LESS THAN TEN THOUSAND PESOS (PHP10,000.00); NON-REGULAR SUPPLIER OF GOODS & SERVICES AND OTHER EXPENSES

In general, income payment made by Top twenty thousand (20,000) private corporations, as determined by the Commissioner under Revenue Regulations No. 14-2008 to their regular purchases to its local/resident suppliers of goods and services are subject to Expanded Withholding Tax [Services-2% & Goods-1%]. But, casual purchase of goods and services, that are, purchased made from a non-regular supplier and oftentimes involving a single purchase of less than Ten thousand pesos (P10,000.00) and has not transacted at least six (6) transactions, either in the previous year or current year, are not subject to withholding tax.

In general, the following payments made by Top 20,000 corporations are exempt from withholding tax in the Philippines: Payments that does not constitute income on the part of the payee (ex. Reimbursable expenses), Payments to government agencies, payments to income tax exempt entities.

PROFESSIONAL FEES

Under existing Revenue Regulations, stated that Professional fees of services rendered by Individuals and Corporations on the Gross Professional Fees are subject to Creditable Withholding Tax of Fifteen percent (15%), if the gross income for the current year exceeds P720,000; and Ten percent (10%), if the gross income for the current year is P720,000 and below. However, Income payments made to General Professional Partnerships (GPP) are not subject to Withholding Tax. [Revenue Memorandum Circular No. 3-2012 – “SECTION 2.57.5 (4)]; Section 26 of the National Internal Revenue Code (NIRC) of 1997, as amended.

Those taxpayers who are not among of the top 20,000 corporations or mentioned in RR No. 14-2008 are not required to comply as stated in the regulations. However, taxpayers are required to comply with the requirements of deductibility of income payment mentioned in the National Internal Revenue Code as amended and other existing revenue regulations.

Imposition of Penalties for Failure to file Returns Under the Electronic Systems of the BIR by Taxpayers Mandatorily Covererd by eFPS or eBIRForms

Revenue Regulations (RR) No. 5-2015 was issued by the bureau for the amendment of RR No. 6-2014 and Imposition of Penalties for Failure to File Returns Under the Electronic Systems of the BIR by Taxpayers Mandatorily Covered by eFPS or eBIRForms.

 

In Section of the said RR, it mentioned the amendment to RR 6-2014 - The use of the e-BIRForms facility is mandatory for those covered by RR No. 6-2014, in order to clarify this, Section 3 paragraph 2 of RR No. 6-2014 is hereby amended to read as follows:

 

"X X X

2. Non-eFPS filers, covered by Section 4 herein, shall mandatorily use the eBIR Forms facility in electronically submitting and filing all their tax returns.

 

Upon successful validation of the accomplished tax return, taxpayers shall receive a system-generated notification e-mail which acknowledges that the tax return has been successfully filed. Taxpayer should print the Filing Reference (FRN) page generated by the system and the same shall be submitted to the Authorized Agent Banks (AABs) for the payment of the taxes due thereon. Sample printed FRN page is herein attached as Annex "A".

 

XXX"

 

Moreover, all taxpayers, under existing issuances, who are mandatorily covered to file their returns using eFPS or eBIRForms, who fail to do so, shall be imposed a penalty of One Thousand Pesos (P1,000) per return to Section 250 of the NIRC of 1997, as amended.

 

Please refer the following links of the Revenue Relations No. 5-2015: http://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202015/RR%205-2015/RR%205-2015.pdf and Annex "A" http://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202015/RR%205-2015/Annex%20A.pdf.

 

Philippines Makes Doing Business Easier In Starting A Business

Did you know that you can now start your business easier in the Philippines with the simplified 6 steps of about 8 days? Paying Taxes (Social Service Contributions / Payments) reduce to 13 payments from 36.

Starting a business is now simple due to reforms that organized steps and the cooperation of the government agencies.

Please check the diagram below: (http://www.bir.gov.ph/images/bir_files/internal_communications_1/Posters/00.%20MOA%20Signing%20poster%20Edit8.jpg)

This project was made possible by different government agencies above stated. In fact, the implementation of this project will be successful with the cooperation of both the taxpayers, investors and government agencies.

Presentation of Tax Exemption Certificate or Ruling by Exempt Individuals and Entities

Revenue Memorandum Circular (RMC) No. 8-2014 was issued by the bureau with regards to the presentation of Tax Exemption Certificate or Ruling by Exempt Individuals and Entities.

 

The BIR cited that under the provisions of existing tax laws and administrative issuances, however, some individuals, entities and transactions are considered exempt from imposition of taxes on income and, consequently, from withholding taxes.

 

With this, the concerned withholding agents, the RMC require all individuals and entities claiming such exemption to provide a copy of a valid, current and subsisting tax exemption certificate or ruling, as  per existing administrative issuances and any issuance that may be issued from time to time, before payment of the related income. The tax exemption certificate or ruling must explicitly recognize the grant of tax exemption, as well as the corresponding exemption from imposition of withholding tax.

 

Failure on the part of the taxpayer to present the said tax exemption certificate or ruling herein required shall subject him to the payment of appropriate withholding taxes due on the transaction. On the other hand, the withholding agent's failure to withhold notwithstanding the lack of tax exemption certificate or ruling shall cause the imposition of penalties under Section 251 and other pertinent Sections of the Tax Code.

 

Pursuant to Sections 57 to 59 and Sections 78 to 83 of the Tax Code, in relation to Revenue Regulations (RR) No. 02-1998, as amended, certain items of income are made subject to the payment of withholding taxes (final tax, creditable/expanded withholding tax, withholding tax on compensation) at the rates prescribed therein.

 

It was also mentioned that the Circular revokes all other circulars or issuances inconsistent with it

 

Please refer http://www.bir.gov.ph/images/bir_files/old_files/pdf/82437RMC%20No%208-2014.pdf of the full text RMC No. 8-2014.

Who Else Wants To Avoid Tax Penalties?

Most taxpayers wants to avoid in paying tax penalties with the bureau. In fact, this burden can be avoided by any type or classification of taxpayers by paying the right taxes on time and doing or following the tax obligations with diligence as required by revenue regulations, national internal revenue code and other tax laws.

As a taxpayer, to avoid this tax burdens, I usually keep myself updated with the revenue regulations, national internal revenue code and other tax laws. Tax planning and compliance are one of the measures in avoiding tax penalties. Mastery of these revenue regulations and national internal revenue code can truly help us taxpayers in avoiding tax penalties. 

Businessmen and entrepreneurs usually hires good tax consultants with regards to tax planning, compliance reporting and other services. 

For me, quality service begins with wisdom, perseverance, actions and compliance.    

Offline eBIRForms Package v5.2

The bureau has issued a new version of eBIRForms Package, the Offline eBIRForms Package v5.2 and you can download in the following site(s):

1. http://ftp.pregi.net/bir/ebirforms_package_v5.2.zip

The Electronic Bureau of Internal Revenue Forms (eBIRForms) was developed primarily to provide taxpayers with an alternative mode of preparing and filing tax returns that is easier and more convenient.

The Offline eBIRForms Package is a tax preparation software that allows taxpayers and ATAs to accomplish or fill up tax forms offline. Instead of the conventional manual process of filling up tax returns on pre-printed forms that is highly susceptible to human error, taxpayers/ATAs can directly encode data, validate, edit, save, delete, view, print and submit their tax returns. The package can do automatic computations and has the capability to validate information encoded by taxpayers/ATAs. After filling out the forms in this package, taxpayers/ATAs can submit it to the Online eBIRForms System.

The eBIRForms is a package application covering thirty-six (36) BIR Forms comprised of Income Tax Returns; Excise Tax Forms; VAT Forms; Withholding Tax Forms; Documentary Stamp Tax Forms; Percentage Tax Forms; ONETT Forms and Payment Form.

Updates: http://philippinetaxtalk.blogspot.com/2016/05/ebirforms-package-v61-new-is-now.html


To download the Offline eBIRForms Package v6.1, just click the following link:

http://ftp.pregi.net/bir/ebirforms_package_v6.1.zip

Income Payments On Sugar

Revenue Regulations No. 13-2015 has issued by the CIR of the BIR amending further the provisions of Section 2.57.2 of Revenue Regulations (RR) No. 2-98, as Amended by RR No. 7-2015 dated October 12, 2015.

 

The amendments is stated in the RR with details as follows:

 

SEC. 2. AMENDMENTS. - The pertinent provisions of Section 2.57.2 of RR No. 2-98, as amended by RR No. 7-2015, are hereby further amended to read as follows:

 

"(AA) Income payments on sugar. - On gross payments on purchases of sugar - One percent (1%)

 

1. Proprietors or operators of sugar mills/refineries on their mill share, xxx:

 

1.1 For locally produced raw cane sugar and raw sugar - the composite price, in metric tons, governing the specified crop year of raw cane sugar and raw sugar as reflected in one of the reports (Annex "A") under the weekly Final Sugar Production Bulletin duly issued by the Sugar Regulatory Administration (SRA) on the date of sale, or actual selling price, whichever is higher.

 

It shall be ensured that a copy of the weekly Final Sugar Production Bulletin be officially transmitted by the SRA to the Commissioner of Internal Revenue within twenty four (24) hours from the date of issuance thereof.

 

          XXX          XXX          XXX

 

All existing rules and regulations or parts thereof which are inconsistent with the provisions of these Regulations are hereby modified, amended, revoked or repealed accordingly.

 

The Regulations took effect fifteen (15) days immediately following publication in a newspaper of general circulation.

 

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202015/RR%20No.%2013-2015.pdf of the full text of RR No. 13-2015.

 

Tax Treatment of Certain Persons Engaged in the Business of Land Transportation

Revenue Memorandum Circular No. 70-2015 has recently issued by the bureau to reiterate the Tax Treatment of Certain Persons Engaged in the Business of Land Transportation.

This Circular deals with the tax incidence of the business of land transportation, specifically transport network companies (TNCs), such as but not limited to the likes of UBER, GRAB TAXI, their Partners/suppliers and similar arrangements. A TNC is a pool of land transportation vehicles whose accessibility to the riding public is facilitated through the use of a common point of contract which maybe in the form of text, telephone and/or cellular calls, email, mobile applications or by other means.

The TNC may or may not have been granted a Certificate of Public Convenience (CPC). If it is a holder of a valid and current CPC, it is known as a common carrier and its gross receipts are subject to the Three Percent (3%) common carriers tax under Section 117 of the National Internal Revenue Code of 1997 as amended (NIRC). Otherwise, it is classified as a land transportation service contractor and is subject to the Twelve Percent (12%) Value Added Tax (VAT) under the NIRC.

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMC%20No%2070-2015.pdf of the full text of RMC No. 70-2015.

Extension In Procuring, Reconfiguring Machines And Sytems Of The Use of Non-thermal Paper For All CRMs, POS Machines And Other Invoice/Receipt Generating Machine/Software

The CIR of the bureau has issued Revenue Regulations No. 12-2015 to amend Section 8 of RR No. 10-2015 as follows:

 

SECTION 2. AMENDMENT. Section 8 of RR No. 10-2015, is hereby amended to be read as follows:

 

"XXX          XXX         XXX

 

SECTION 8. TRANSITORY PROVISIONS. - In order to provide ample time in procuring, reconfiguring machines and systems, to comply with Section 5, adjustments shall be undertaken on or before October 31, 2015. Any extension due to enhancements of systems required to be undertaken abroad shall seek the approval from the concerned Regional Director or ACIR, Large Taxpayer Service which shall not longer than six (6) months from the effectivity of these Regulations.

 

XXX         XXX         XXX"

 

The provisions of these Regulations was took effect immediately last September 29, 2015.

 

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202015/RR%20No.%2012-2015.pdf of the full text of Revenue Regulations No. 12-2015. 

Requisites For The Valid Claim Of Input Tax Credit By VAT-Registered Taxpayer Of The Receipts/Invoices Generated From CRM/POS Machines

Revenue Memorandum Circular (RMC) No. 64-2015 has recently issued by the CIR of the bureau to reiterate the information requirements that must be shown on receipts/invoices/other commercial invoices generated from CRM/POS/software pursuant to Revenue Regulations (RR) No. 10-2015 and RR No. 11-2004, in relation to RR No. 16-2005 regarding the Value-Added Tax (VAT) receipts/invoices.

 

Pursuant to Section 113(B) of the Tax Code, as amended and Sec. 4.113-1 (B) of RR No. 16-2005, the following information of purchases, customer or client must be indicated on the VAT receipts/invoices, in the case of sales amounting to One thousand pesos (P1,000.00) or more and the sale is made to a VAT-registered person:

 

1. Name of purchaser, customer or client;

2. Address;

3. Taxpayer Identification Number (TIN); and

4. Business style, if any.

 

If the CRM/POS is not capable of showing the said requirements, a manually pre-printed receipts/invoices with approved Authority to Print (ATP) must be issued to the purchaser, customer or client based on the existing provisions of the Bureau.

 

Any purchase of goods/services with receipts/invoices generated from CRM/POS/software are mandated to show the said requisites for the valid claim of input tax credit by VAT-registered taxpayer, as provided by Section 4-110-8 of RR No. 16-2005 and in reference to Section 113 and 237 of the Tax Code.

 

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMC%2064-2015.pdf of the full text of the RMC No. 64-2015.

Amendment on Section Of RR No. 10-2015, Also Known As The Use of Non-thermal Paper For All CRMs, POS Machines And Other Invoice/Receipt Generating Machine/Software

Revenue Regulations (RR) No. 12-2015 has recently issued by the CIR of the BIR for the amendment of Section 8  of RR No. 10-2015 with details as follows:

 

SECTION 2. AMENDMENT. Section 8 of RR No. 10-2015, is hereby amended to be read as follows:

 

"XXX     XXX     XXX

 

SECTION 8. TRANSITORY PROVISIONS. - In order to provide ample time in procuring, reconfiguring machines and systems, to comply with Section 5, adjustments shall be undertaken on or before October 31, 2015. Any extension due to enhancements of systems required to be undertaken abroad shall seek the approval from the concerned Regional Director or ACIR, Large Taxpayer Service which shall not be longer than six (6) months from the effectivity of these Regulations.

 

XXX     XXX     XXX"

 

SECTION 3. EFFECTIVITY. The provisions of these Regulations shall take effect immediately.

 

Please refer: http://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202015/RR%20No.%2012-2015.pdf of the full text of RR No. 12-2015.

Identification Document or Proof Of Being A Senior Citizen Which May Be Used For The Availment Of Benefits And Privileges

The CIR of the BIR just recently issued Revenue Regulations No. 11-2015, amending Sections 2 and 7(6) of Revenue Regulations (RR) No. 07-2010, as Amended by RR No. 08-2010 as follows:

 

"Section 2. Definitions. - For purposes of these Regulations, the following terms and phrases shall be defined as follows:

 

XXX          XXX          XXX

 

n. Identification Document - any document or proof of being a senior citizen which may be used for the availment of benefits and privileges under these Rules. It shall be any of the following:

 

i. Senior Citizens' Identification Card issued by the Office of Senior Citizens Affairs (OSCA) in the city or municipality where the elderly resides:

 

ii. The Philippine passport of the elderly person or senior citizen concerned; and

 

iii. Government-issued identification card (ID) which reflects on its face the name, picture, date of birth and nationality of the senior citizen which includes any of the following:

 

1) Digitized Social Security System ID

2) Government Service Insurance System ID

3) Professional Regulation Commission ID

4) Integrated Bar of the Philippines ID

5) Unified Multi-Purpose ID (UMID)

6) Driver's License"

 

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202015/RR%20No.%2011-2015.pdf for the Tax Treatment of the Discount Granted to Senior Citizens and full text of RR No. 11-2015.

 

 

 

Extending The Deadline For Submission Of Inventory List And Other Supporting Requirements

The CIR of the Bureau has recently issued Revenue Memorandum Circular (RMC) No. 61-2015 to extend the deadline, initially set on or before September 30, 2015 per Revenue Memorandum Circular (RMC) No. 57-2015 to on or before October 31, 2015, for the submission of the Inventory Lists and other supporting requirements covering ending inventory as of December 31, 2014, and thereafter every 30th day following the close of the taxable year, depending on the accounting period being adopted by the taxpayer.

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/RMC_61-2015_Extension_InventoryList.pdf of the full text of RMC No. 61-2015.

Clarification Of The Provisions On The Submission Of Monthly eSales

Revenue Memorandum Circular (RMC) No. 56-2015 has issued by the bureau to clarify the provisions on the Submission of Monthly eSales Report via the Electronic Sales (eSales) Reporting System Prescribed under Revenue Reulations (RR) No. 5-2005 and Revenue Memorandum Order (RMO) No. 12-2012.

eSales is a real time reporting online of actual sales transactions recorded by Cash Register Machine (CRM)/Point-of-Sales (POS) machine, or other sales machines and/or software.

In the course of implementation of RR No. 5-2005 and RMO No. 12-2012, it was ascertained that several adjustments/amendments were made on the amount of monthly eSales as reported resulting in the reconstitution of sales as recorded in CRM/POS machines.

In view thereof, any amendment in the amount of monthly sales reported, shall require a written justification addressed to the concerned LTS Investigating Office/Revenue District Office (RDO) with the corresponding adjusting entries properly recorded in the Books of Accounts.

Taxpayers who failed to comply with the foregoing requirements shall be included in the priority audit program of the concerned investigating offices.

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMC%20No%2056-2015.pdf of the full text of RMC No. 56-2015.

Documents that are Subject to Documentary Stamp Tax of Fifteen Pesos (P15.00)

Revenue Memorandum Circular No. 36-2012 was issued by the Bureau for the clarification on whether documents mentioned in Section 199 of the Tax Code of 1997, as amended by Republic Act (RA) No. 9243, are subject to the documentary stamp tax of P15.00 as prescribed in Section 188 of the said Code.

Documentary stamp tax is a tax upon documents, instruments, loan agreements and papers, and upon acceptances, assignments, sales, and transfers of the obligation, right or property incident thereto.

Only instruments, documents and papers of transactions expressly enumerated in Section 199 of the Tax Code, as amended, are exempt from the documentary stamp tax. Consequently, certificates and other necessary documents issued by the Construction Industry Authority of the Philippines, as hereunder enumerated, are not among those mentioned in Section 199 of the Tax Code of 1997, as amended, viz:

1. Certificate of Registration of Overseas Contractors;

2. Certificate of Renewal of Registration of Overseas Contractors;

3. Contractor's License (Original);

4. Certificate of whether a certain contractor is licensed;

5. Certified true copies of license certificates;

6. Certified true copies of documents such as Affidavit of Undertaking of Sustaining Technical Employee (STE) and Curriculum Vitae of STE;

7. Certificate of Accreditation of Arbitrators; and

8. Case documents to be used to support petition to appeal in Court of Appeals.

These documents are clearly subject to documentary stamp tax of Fifteen pesos (P15.00) as prescribed under Section 188 of the Tax Code of 1997, as amended, to wit:

"Section 188. Stamp Tax on Certificates-On each certificate of damage or otherwise and on every certificate or document issued by any customs officer, marines surveyors, or other person acting as such, and on each certificate issued by a notary public, and on each certificate of any description required by law or by rules or regulations of a public office, or which is issued for the purpose of giving information, or establishing proof of a fact, and not otherwise specified herein, there shall be collected a documentary stamp tax of Fifteen Pesos (P15.00)." (Underscoring ours)

Please refer http://www.bir.gov.ph/images/bir_files/old_files/pdf/64650RMC%20No%2036-2012.pdf of the full text of RMC No. 36-2012

Requirements for Deductibility of Certain Income Payments

The CIR has issued Revenue Regulations No. 12-2013 amending Section 2.58.5 of Revenue Regulations No. 2-98, as amended, relative to the Requirements for Deductibility of Certain Income Payments:

SECTION 2. Amendment. - Section 2.58.5 of RR 2.98, as amended, is hereby further amended to read as follows:

"Sec. 2.58.5. Requirements for Deductibility. - Any income payment which is otherwise deductible under the Code shall be allowed as a deduction from the payor's gross income only if it is shown that the income tax required to be withheld has been paid to the Bureau in accordance with Secs. 57 and 58 of the Code.

No deduction will also be allowed notwithstanding payments of withholding tax at the time of the audit investigation or reinvestigation/reconsideration in cases where no withholding of tax was made in accordance with Secs. 57 and 58 of the Code."

Please refer http://www.bir.gov.ph/images/bir_files/old_files/pdf/73009RR%2012-2013.pdf of the full text of RR No. 12-2013.

Tax Implications Of General Professional Partnership (GPP)

Revenue Memorandum Circular (RMC) No. 3-2012 was issued by CIR of the bureau to clarify the Tax Implications of General Professional Partnership.

Under Sec 26 of the National Internal Revenue Code (NIRC) of 1997, as amended, a general professional partnership as such shall not be subject to income tax. However, persons engaging in business as partners in a general professional partnership shall be liable for income tax only in their separate and individual capacities, thus:

"SEC. 26. Tax Liability of Members of General Professional Partnerships. - A general professional partnership as such shall not be subject to the income tax imposed under this Chapter. Persons engaging in business as partners in a general professional partnership shall be liable for income tax only in their separate and individual capacities.

For purposes of computing the distributive share of the partners, the net income of the partnership shall be computed in the same manner as a corporation.

Each partner shall report as gross income his distributive share, actually or constructively received, in the net income of the partnership."

In relation thereto, Section 2.57.5 of Revenue Regulations No. 2-98, as amended, provides that:

"SECTION 2.57.5. Exemption from Withholding. - The withholding of creditable withholding tax prescribed in these Regulations shall not apply to income payments made to the following:

(A) . . . 

(B) Persons enjoying exemption from payment of income taxes pursuant to the provisions of any law, general or special, such as but not limited to the following:

(1) . . .

(4) General Professional Partnerships

XXX          XXX          XXX"

Tax implications_General Professional Partnership

Page 2 of 2

Clearly, a general professional partnership shall not be subject to income tax since it is the individual partners who shall be subject to income tax in their separate and individual capacities. A general professional partnership is defined in Section 22 (B) of the 1997 Tax Code, as amended, as follows:

"SEC. 22. Definitions. - When used in this Title:

(A) . . . 

(B) The term 'corporation' shall include partnerships, no matter how created or organized, joint-stock companies, joint accounts (cuentas en participation), associations, or insurance companies, but does not include general professional partnerships and a joint venture or consortium formed for the purpose of undertaking construction projects or engaging in petroleum, coal, geothermal and other energy operations pursuant to an operating or consortium agreement under a service contract with the Government. 'General professional partnerships' are partnerships formed by persons for the sole purpose of exercising their common profession, no part of the income of which is derived from engaging in any trade or business.

XXX          XXX          XXX"

Relative thereto, income payments made to a General Professional Partnership in consideration for its professional services are not subject to income tax and consequently to withholding tax prescribed in Revenue Regulations No. 2-98, as amended.

It is the individual partners who shall be subject to income tax, and consequently, to withholding tax, in their separate and individual capacities pursuant to Section 26 of the 1997 Tax Code, as amended. Furthermore, each partner shall report as gross income his distributive share, actually or constructively received, in the net income of the partnership.

However, it is worth mentioning that income payments made periodically or at the end of the axable year by a general professional partnership to the partners, such as drawings, advances, sharings, allowances, stipend and the like, are subject to the Fifteen percent (15%), if the payments to the partner for the current year exceeds P720,000.00; and Ten percent (10%) creditable withholding tax, if otherwise, pursuant to Section 2.57.2 (H) of Revenue Regulations No. 2-98, as amended by Revenue Regulations No. 30-03.

Please refer http://www.bir.gov.ph/images/bir_files/old_files/pdf/61821RMC%20No%203-2012.pdf of the full text of RMC No. 3-2012.

Power To Extend Or Shorten Corporate Term

A private corporation may extend or shorten corporate term as stated in SEC. 37 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines as follows:

SEC. 37. Power to extend or shorten corporate term. - A private corporation may extend or shorten its term as stated in the articles of incorporation when approved by a majority vote of the board of directors or trustees and ratified at a meeting by the stockholders representing at least two-thirds (2/3) of the outstanding capital stock or by at least two-thirds (2/3) of the members in case of non-stock corporations. Written notice of the proposed action and of the time and place of the meeting shall be addressed to each stockholder or member at his place or residence as shown on the books of the corporation and deposited to the addressee in the post office with postage prepaid, or served personally: Provided, That in case of extension of corporate term, any dissenting stockholder may exercise his appraisal right under the conditions provided in this Code.

Powers And Capacity Of Corporations

What are the Powers and Capacity of Corporations?

In SEC. 36 of Batas Pambamsa Blg. 68 "The Corporation Code of the Philippines" refers to the Powers of Corporations with details as follows:

SEC. 36. Corporate powers and capacity. - Every corporation incorporated under this Code has the power and capacity:

1. To sue and be sued in its corporate name;

2. Of succession by its corporate name for the period of time stated in the articles of incorporation and the certificate of incorporation;

3. To adopt and use a corporate seal;

4. To amend its articles of incorporation in accordance with the provisions of this Code;

5. To adopt by-laws, not contrary to law, morals, or public policy, and to amend or repeal the same in accordance with this Code;

6. In case of stock corporations, to issue or sell stocks to subscribers and to sell treasury stocks in accordance with the provisions of this Code; and to admit members to the corporation if it be a non-stock corporation

7. To purchase, received, take or grant, hold, convey, sell, lease, pledge, mortgage and otherwise deal with such real other corporations, as the transaction of the lawful business of the corporation may reasonably and necessarily require, subject to the limitations prescribed by law and the Constitution;

8. To enter into merger or consolidation with other corporations as provided in this Code;

9, To make reasonable donations, including those for the public welfare or for hospital, charitable, cultural, scientific, civic, or similar purposes: Provided, That no corporation, domestic or foreign, shall give donations in aid of any political party or candidate or for purposes of partisan political activity;

10. To establish pension, retirement, and other plans for the benefit of its directors, trustees, officers and employees; and

11. To exercise such other powers as may be essential or necessary to carry out its purpose or purposes as stated in its articles of incorporation.

Executive Committee Of A Corporation

It is stated in SEC. 35 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines", about the creation of Executive of committee as follows:

SEC. 35. Executive committee. - The by-laws of a corporation may create an executive committee, composed of not less than three member of the board, to be appointed by the board. Said committee may act, by majority vote of all its members, on such specific matters within the competence of the board, as may be delegated to it in the by-laws or on a majority vote of the board, except with respect to: (1) approval of any action for which shareholders' approval is also required; (2) the filling of vacancies in the board; (3) the amendment or repeal of by-laws or the adoption of new by-laws; (4) the amendment or repeal of any resolution of the board which by its express terms is not so amendable or repealable; and (5) a distribution of cash dividends to the shareholders.

What Is The Effect Of Disloyalty Of A Director In A Corporation?

What is the effect of the disloyalty of a director in a corporation?

In SEC. 34 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines" refers to the Disloyalty of a director with details as follows:

SEC. 34. Disloyalty of a director. - Where a director, by virtue of his office, acquires for himself a business opportunity which should belong to the corporation, thereby obtaining profits to the prejudice of such corporation, he must account to the latter for all such profits by refunding the same, unless his act has been ratified by a vote of the stockholders owning or representing at least two-thirds (2/3) of the outstanding capital stock. This provision shall be applicable, notwithstanding the fact that the director risked his own funds in the venture.

Availability Of The Update Of Exemption Of Employees (UEE) Data Entry Module In Filing Of The BIR Form No. 2305 and 2305 Batch File Validation Module

The CIR of the bureau has issued Revenue Memorandum Circular No. 59-2015 in relation to RR 7-2012 to circularize the availability of Updated of Exemption Of Employees (UEE) (BIR Form No. 2305) Data Entry Module and 2305 Batch File Validation Module which shall be used for the following:

 

1. Updating of Employee's Additional Exemption for Dependents;

2. Change of Status; and

3. Execution of the "Waiver to Claim the Additional Exemption" by the husband; or revocation of the previously executed "Waiver to Claim the Additional Exemption by the Husband". 

 

The filing of BIR Form No. 2305 shall be coursed through the employer and shall be electronically filed containing all the required information in the prescribed electronic format using any of the following:

 

Option 1 Microsoft Excel CSV format;

Option 2 Taxpayer's own extract program; or

Option 3 BIR's UEE Data Entry Module.

 

For those who will be using Option 1 or Option 2 are required to use the 2305 Batch File Validation Module. The UEE Data Entry Module and 2305 Batch File Validation Module are available at http://www.bir.gov.ph/index.php/downloadables.html

 

For the Submission of Report, Submission of Supporting Documents, Venue of Submission and Other Concerns, please refer http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMC%20No%2059-2015_copy.pdf of the full text of RMC No. 59-2015.

 

 

 

BIR Audit Program: Audit/Investigation Of Taxpayers of Mandatory Cases and Priority Taxpayers/Industries

The CIR of the BIR just recently issued Revenue Memorandum Order (RMO) No. 19-2015 of the BIR Audit Program that prescribes the policies, guidelines and procedures to be observed in the audit/investigation of tax returns to enhance taxpayers' voluntary compliance by encouraging the correct payment of internal revenue taxes through the exercise of the enforcement function of the Bureau.

 

It is stated in the RMC that in general, all taxpayers are considered as possible candidates for audit. To cover such audit/investigation of taxpayers, electronic Letters of Authority (eLAs) shall be issued. The said audit/investigation shall include, but not limited to, the following cases:

 

1. Mandatory Cases

 

1.1 Taxpayers with claims for income tax refund or issuance of tax credit certificate (Selection Code: ITR for income tax refund and ITC for tax credit certificate)

 

1.2 Taxpayers with claims for Value-Added Tax (VAT) refund/credit (Selection Code: VTR for VAT refund and VTC for VAT credit certificate)

 

1.3 Claims for tax refund/credit of excise tax under Title VI of the Tax Code, as amended, regardless of amount (election Code: ETRS for excise tax refund and ETCS for Excise tax credit certificate)

 

1.4 Claims for tax refund/credit on erroneously/double payment of taxes regardless of amount (Selection Code: ERTR claims for tax refund and ERTC for claims for tax credit certificate)

 

1.5 Request for tax clearance of taxpayers due to retirement/cessation of business with gross sales/receipts exceeding P1,000,000.00 or gross assets exceeding P3,000,000.00 (Selection Code: TRC)

 

1.6 Request for tax clearance of taxpayers undergoing merger/consolidation/split-up/spin-off and other types of corporate reorganizations (Selection Code: TMC)

 

1.7 Cases with unresolved Letter Notices (LNs) (Selection Code: LNA)

 

1.8 Estate tax returns with other tax liabilities (Selection Code: EOT)

 

1.9 Policy cases covered by written directive of the Commissioner (Selection Code: CIR)

 

2. Priority Taxpayers/Industries - Unless revised through the issuance of a Revenue Memorandum Order (RMO), the tax returns to be audited shall be based on the following criteria.

 

Please refer the link:  http://www.bir.gov.ph/images/bir_files/internal_communications_3/Full%20Text%20of%20RMO%202015/RMO%20No%20%2019-2015.pdf of the Priority Taxpayers/Industries, policies & procedures and full text of RMO No. 19-2015

Use of Non-Thermal Paper For All Cash Register Machines (CRMs) / Point-Of-Sales (POS) Machines And Other Invoice/Receipt Generating Machine/Software

The CIR of the BIR just recently issued Revenue Regulations (RR) No. 10-2015 to inform all Business Establishments, Internal Revenue Officials and Employers and Others Concerned about SECTION 1 of the Regulations that pursuant to the provisions of section 244, in relation to Sections 203, 222 and 235 of the National Internal Revenue Code of 1997 (NIRC, as amended, these Regulations is hereby promulgated to mandate the use of Non-thermal paper for all CRM/POS and other invoice/receipt-generating machine/software.

 

For Retention Periods of books of account, including subsidiary book and other accounting records; information and other concerns please refer http://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202015/RR%20No.%2010-2015.pdf of the full text of Revenue Regulations No. 10-2015

Contracts Between Corporations With Interlocking Directors

Contracts Between Corporations With Interlocking Directors is stated in SEC. 33 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines" with details as follows:

SEC. 33. Contracts between corporations with interlocking directors. - Except in cases of fraud, and provided the contract is fair and reasonable under the circumstances, a contract is fair and reasonable under the circumstances, a contract between two or more corporations having interlocking directors shall not be invalidated on that ground alone: Provided, That if the interest of the interlocking director in one corporation is substantial and his interest in the other corporation or corporations is merely nominal, he shall be subject to the provisions of the preceding section insofar as the latter corporation or corporations are concerned.

Stockholdings exceeding twenty (20%) percent of the outstanding capital stock shall be considered substantial for purposes of interlocking directors.

Dealings Of Directors, Trustees Or Officers With The Corporation

Dealings of directors, trustees or officers with the corporation is stated SEC. 32 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines" refers to the dealings of directors, trustees or officers with the corporation as follows:

SEC. 32. Dealings of directors, trustees or officers with the corporation. - A contract of the corporation with one or more of its directors or trustees or officers is voidable, at the option of such corporation, unless all the following conditions are present:

1. That the presence of such director or trustee in the board meeting in which the contract was approved was not necessary to constitute a quorum for such meeting;

2. That the vote of such director or trustee was not necessary for the approval of the contract;

3. That the contract is fair and reasonable under the circumstances; and

4. That in the case of an officer, the contract has been previously authorized by the board of directors.

Where any of the first two conditions set forth in the preceding paragraph is absent, in the case of a contract with a director or trustee, such contract may be ratified by the vote of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock or of at least two thirds (2/3) of the members in a meeting called for the purpose: Provided, That full disclosure of the adverse interest of the directors or trustees involved is made at such meeting: Provided, however, That the contract is fair and reasonable under the circumstances.

Submission Of Inventory List And Other Reporting Requirements

Revenue Memorandum Circular No. 57-2015 was recently issued by the BIR with the purpose to consistently apply the data requirements across different sectors with the peculiarity of the industry where the taxpayers belong directing the volume of reporting.

 

With this, the additional reports or schedules to be submitted and filed with the annual inventory list shall cover companies maintaining inventory of stock-in-trade, raw material, goods in process, supplies and other goods such as manufacturing, wholesaling, distributing/retailing sectors including real estate dealers/developers, service companies, e.g., construction companies, building contractors, etc. It bears stressing that the data/information contained in the said schedules/lists should be reconciled with the amount declared in the financial statements and annual income tax returns. 

 

In Section 2 of the Circular, refers to the prescribed format and deadline for submission. All taxpayers with tangible asset-rich balance sheets, often with at least half of their total assets in working capital assets, e.g., accounts receivable and inventory, shall submit, in addition to the annual inventory list, schedules/lists prescribed herein, in hard and soft copies, using the format as shown in Annex "A" (for manufacturing / merchandising or retail company); Annexes "B" and "B-1" (for real estate company) and Annex "C" (for construction industry). Taxpayers not belonging to the above-described industries shall adopt the herein prescribed format that is applicable to their existing inventory.

 

The soft copies of the inventory list including other applicable schedules shall be stored/saved in Digital Versatile Disk-Recordable (VD-R) properly labeled and submitted, together with a notarized certification, as shown in Annex "D" hereof, duly signed by the authorized representative of the taxpayer certifying that the data/information contained in the DVD-R are true and correct.

 

For initial filing using the herein prescribed format, the schedules and inventory list shall be submitted on or before September 30, 2015 covering ending inventory as of December 31, 2014, and thereafter every 30th day following the close of the taxable year (depending on the accounting period adopted by the taxpayer) as enunciated under Section 13 of Revenue Regulations No. V-1, otherwise known as the Bookkeeping Regulations, which provides for the filing of an  annual inventory of stocks-in-trade, raw materials, goods in process, supplies and other goods not later than thirty (30) days following the close of the taxable year.

 

The inventory lists as well as other applicable schedules are to be submitted with the concerned Revenue District Office (RDO) where the non-large taxpayers are registered and with the Large Taxpayers Assistance Division (LTAD), Excise Large Taxpayers Regulatory Division (ELTRD), Large Taxpayers Division (LTD) Makati and Cebu, for taxpayers classified as large under the Large Taxpayers Service.

 

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMC%20No%2057-2015.pdf of the penalties and other concerns and full text of RMC No. 57-2015.

Liability Of Directors, Trustees Or Officers

SEC. 31 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines" refer to the Liability of directors, trustees or officers with the details as follows:

 

SEC. 31. Liability of directors, trustees or officers. - Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors or trustees shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation, its stockholders or members and other persons.

 

When a director, trustee or officer attempts to acquire or acquires, in violation of his duty, any interest adverse to the corporation in respect of any matter which has been reposed in him in confidence, as to which equity imposes a disability upon him to deal in his own behalf, he shall be liable as a trustee for the corporation and must account for the profits which otherwise would have accrued to the corporation.

Compensation Of Directors

Compensation of directors is referred in SEC. 30 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines" with details as follows:

 

SEC. 30. Compensation of directors. - In the absence of any provision in the by-laws fixing their compensation, the directors shall not receive any compensation, as such directors, except for reasonable per diems: Provided, however, That any such compensation other than per diems may be granted to directors by the vote of the stockholders representing at least a majority of the outstanding capital stock at a regular or special stockholders' meeting. In no case shall the total yearly compensation of directors, as such directors, exceed ten (10%) percent of the net income before income tax of the corporation during the preceding year.

Vacancies In The Office Of Director Or Trustee

What if there will be vacancies in the office of director or trustee in a corporation?

 

SEC. 29 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines" refers to the vacancies in the office of director or trustee with details as follows:

 

SEC. 29. Vacancies in the office of director or trustee. - Any vacancy occurring in the board of directors or trustees other than by removal by the stockholders or members or by expiration of term, may be filled by the vote of at least a majority of the remaining directors or trustees, if still constituting a quorum; otherwise, said vacancies must be filled by the stockholders in a regular or special meeting called for that purpose. A directors or trustee so elected to fill a vacancy shall be elected only for the unexpired term of his predecessor in office.

 

Any directorship or trusteeship to be filled by reason of an increase in the number of directors or trustees shall be filled only by an election at a regular or at a special meeting of stockholders or members duly called for the purpose, or in the same meeting authorizing the increase of directors or trustees if so stated in the notice of the meeting.

Removal Of Directors Or Trustees

Removal of directors or trustees in a corporation is referred in SEC. 28 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines" as follows:

 

SEC. 28. Removal of directors or trustees. - Any director or trustee of a corporation may be removed from office by a vote of the stockholders holding or representing at least two-thirds (2/3) of the outstanding capital stock, or if the corporation be a non-stock corporation, by a vote of at least two-thirds (2/3) of the members entitled to vote: Provided, That such removal shall take place either at regular meeting of the corporation or at a special meeting called for the purpose, and in either case, after previous notice to stockholders or members of the corporation of the intention to propose such removal of directors or trustees, or any of them, must be called by the secretary on order of the president or on the written demand of the stockholders representing or holding at least a majority of the outstanding capital stock, or, if it be a non-stock corporation, on the written demand of a majority of the members entitled to vote. Should the secretary fail or refuse to call the special meeting upon such demand or fail or refuse to give the notice, or if there is no secretary, the call for the meeting may be addressed directly to the stockholder or member of the corporation signing the demand. Notice of the time and place of such meeting, as well as of the intention to propose such removal, must be given by publication or by written notice as prescribed in this Code. The vacancy resulting from removal pursuant to this section may be filled by election at the same meeting without further notice, or at any regular or at any special meeting called for the purpose, after giving notice as prescribed in this Code. Removal may be with or without cause: Provided, That removal without cause may not be used to deprive minority stockholders or members of the right of  representation to which they may be entitled under Section 24 of this Code.

Disqualification Of Directors, Trustees or Officers

SEC. 27 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines" refers to the disqualification of directors, trustees or officers as follows:

SEC. 27. Disqualification Of Directors, Trustees or Officers. - No person convicted by final judgment of an offense punishable by imprisonment for a period exceeding six (6) years, or a violation of this Code committed within five (5) years prior to the date of his election or appointment, shall qualify as a director, trustee or officer of any corporation.

Report Of Election Of Directors, Trustees And Officers

When is the submission of the names, nationalities and residences of the directors, trustees and officers elected to the Securities and Exchange Commission?

 

The reference is stated in SEC. 26 of Batas Pambansa Blg, 68 "The Corporation Code of the Philippines" with details as follows:

 

SEC. 26: Report of election of directors, trustees and officers. - Within thirty (30) days after the election of the directors, trustees and officers of the corporation, the secretary, or any other officer of the corporation, shall submit to the Securities and Exchange Commission, the names, nationalities and residences of the directors, trustees and officers elected. Should a director, trustee or officer die, resign or in any manner cease to hold office, his heirs in case of his death, the secretary, or any other officer of the corporation, or the director, trustee or officer himself, shall immediately report such fact to the Securities and Exchange Commission.

Availability of eBIRForms Package Version 5.1 To Update Version 5.0 and

Revenue Memorandum Circular (RMC) No. 58-2015 was recently issued to informed all Internal Revenue Officials, Employees and Others Concerned the Availability of Electronic Bureau of Internal Revenue Forms (eBIRForms) Package Version 5. 1

The new eBIRForms package has the following modifications:

1. BIR Form No. 1707-A (Annual Capital Gains Tax Return for Onerous Transfer of Shares of Stock Not Traded Through the Local Stock Exchange) is included in the package and thirty seven (37) returns are now available.

2. BIR Form Nos. 1601E, 1702-MX and 2000 were enhanced; and

3. Annual Income Tax Returns (BIR Form Nos. 1700, 1701, 1702-EX, 1702-MX & 1702-RT) can no be submitted online thru the eBIRForms System

The eBIRForms Package Version 5.1 is now available for update to the previous Version 5.0 of the Online eBIRForms System.

Click or copy paste to new tab of the following link: eBIRForms Package Version 5.1 to download the eBIRForms Package Version 5.1.

Alternative sites to obtain/download the Offline eBIRForms Package:

Websites: www.knowyourtaxes.ph; www.dof.gov.ph
Direct link: http://ftp.pregi.net/bir/ebirforms_package_v5.1.zip


eBIRForms Package Version 5.0 may still be used for filing all other BIR forms not mentioned in the modifications stated in A. B. & C.


Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMC%20No%2058-2015.pdf of the full text of RMC No. 58-2015.

 

The bureau just recently updated the eBIRForms Package from v6.1 to v6.2 (New version)

To download the Offline eBIRForms Package v6.2, just click the following link:

http://ftp.pregi.net/bir/ebirforms_package_v6.2.zip

Alternative sites to obtain/download the Offline eBIRForms Package:

Websites: www.knowyourtaxes.ph; www.dof.gov.ph

Direct link: http://ftp.pregi.net/bir/ebirforms_package_v6.2.zip

Corporate Officers; Qurom

Who are the Corporate officers and the definition of quorum in a corporation?

 

SEC. 25 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines" refers to the Corporate officers; quorum with details as follows:

 

SEC. 25. Corporate officers; quorum. - Immediately after their election, the directors of a corporation must formally organize by the election of a president, who shall be a director, a treasurer who may or may not be a director, a secretary who shall be a resident and citizen of the Philippines, and such other officers as may be provided for in the by-laws. Any two (2) or more positions may be held concurrently by the same person, except that no one shall act as president and secretary or as president and treasurer at the same time.

 

The directors or trustees and officers to be elected shall perform the duties enjoined on them by law and by the by-laws of the corporation. Unless the articles of incorporation or the by-laws provide for a greater majority, a majority of the number of directors or trustees as fixed in the articles of incorporation shall constitute a quorum for the transaction of corporate business, and every decision of at least a majority of the directors or trustees present at a meeting at which there is a quorum shall be valid as a corporate act, except for the election of officers which shall require the vote of a majority of all the members of the board.

 

Directors or trustees cannot attend or vote by proxy at board meetings.

Election Of Directors Or Trustees

SEC. 24 of Batas Pambansa Blg. 68  "The Corporation Code of the Philippines" refers to the Election of directors or trustees with details as follows:

 

SEC. 24. Election of directors or trustees. - At all elections of directors or trustees, there must be present, either in person or by representative authorized to act by written proxy, the owners of a majority of the outstanding capital stock, or if there be no capital stock, a majority of the members entitled to vote. The election must be by ballot if requested by any voting stockholder or member.

 

In stock corporations, every stockholder entitled to vote shall have the right to vote in person or by proxy the number of shares of stock standing, at the time fixed in the by-laws, in his own name on the stock books of the corporation, or where the by-laws are silent, at the time of the election; and said stockholder may vote such as number of shares for as many persons as there are directors to be elected or he may cumulate said shares and give one candidate as many votes as the number of his shares shall equal, or he may distribute them on the same principle among as many candidates as he shall see fit: Provided, That the total number of votes cast by him as shown in the books of the corporation multiplied by the whole number of directors to be elected: Provided, however, That no delinquent stock shall be voted. Unless otherwise provided in the articles of incorporation or in the by-laws, members of corporations which have no capital stock may cast as many votes as there are trustees to be elected but may not cast more that one vote for one candidate.

 

Candidates receiving the highest number of votes shall be declared elected. Any meeting of the stockholders or members called for an election may adjourn from day to day or form time to time but not sine die or indefinitely if, for any reason, no election is held, or if there are not present or represented by proxy, at the meeting, the owners of a majority of the outstanding capital stock, or if there be no capital stock, a majority of the members entitled to vote.

The Board Of Directors Or Trustees

Who are the board of directors or trustees in a corporation?

SEC. 23 of Batas Pambansa Blg. 68 "The Corporation Code of the Philippines" would be the reference with regards to the board of directors or trustees as follows:

SEC. 23. The board of directors or trustees.  Unless otherwise provided in this Code, the corporate powers of all corporation formed under this Code shall be exercised, all business conducted and all property of such corporations controlled and held by the board of directors or trustees to be elected from among the holders of stocks, or where there is no stock, from among the members of the corporation, who shall hold office for one (1) year and until their successors are elected and qualified.

Every director must own at least one (1) share of the capital stock of the corporation of which he is a director, which shall stand in his name on the books of the corporation. Any directors who ceases to be owner of at least one (1) share of the capital stock of the corporation of which he is a director shall thereby cease to be a director. Trustees of non-stock corporations must be members thereof. A majority of the directors or trustees of all corporations organized under this Code must be residents of the Philippines.