Real Properties Utilized for Low-cost Housing is Not Subject to Value-Added Tax (VAT)

Under SEC. 4.109-1 (B) Exempt Transactions - (p) Sale of Real Properties Exempt from VAT - (2) of Revenue Regulations No. 16-2005 refers to sale of real properties utilized for low-cost housing as defined by RA No. 7279, otherwise known as the "Urban Development and Housing Act of 1992" and other related laws, such as RA No. 7835 and RA No. 8763.

"Low-cost housing" refers to housing projects intended for homeless low-income family beneficiaries, undertaken by Government or private developers, which may either be a subdivision or a condominium registered and licensed by the Housing and Land Use Regulatory Board/Housing (HLURB) under Blg. 220, PD No. 957 or any other similar law, wherein the unit selling price is within the selling price ceiling per unit of Php.750,000.00 under RA No. 7279, otherwise known as the "Urban Development and Housing Act of 1992" and other laws, such as RA No. 7835 and RA No. 8763.

Prescribing the Use of Internal Revenue Stamp Integrated System (IRSIS) for the Ordering, Distribution and Monitoring

Revenue Regulations No. 7-2014 was issued by the bureau Prescribing the Affixture of Internal Revenue Stamps on Imported and Locally Manufactured Cigarettes and the Use of the Internal Revenue Stamp Integrated System (IRSIS) for the Ordering, Distribution and Monitoring Thereof.

Under Section 4 of the Regulations refers to the ordering of Internal Revenue tamps through IRSIS and BIR Approval thereof. - Each and ever order shall be placed only through the stamp ordering module of IRSIS by the authorized user. All orders submitted on or before twelve o'clock noon (12:00 nn) shall be processed by BIR within the said working day. Accordingly, all orders submitted after 12:00 nn of the working day shall be processed the following working day.

Upon  approval by BIR of the order, an email notification shall be received by the said authorized user confirming the order with the date of release of the internal revenue stamps from the APO-designated plant. The internal revenue stamps shall be released by APO to the importer/local manufacturer of cigarettes not later than fifteen (15) calendar days from the date of approval by the BIR of the submitted order.

All orders of internal revenue stamps, after having been duly approved by the BIR, are no longer allowed by IRSIS to be cancelled or changed by the authorized users of importers and manufacturers of cigarettes. Accordingly, the authorized users shall ensure that the correct information is encoded prior to the submission thereof in the ordering module of IRSIS.

Please refer  http://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202014/RR%207-2014/RR%207-2014.pdf of the full text of Revenue Regulations No. 7-2014.

Elements of Succession

Decedent is one of the elements of succession. Is a general term applied to the person whose property is transmitted through succession, whether or not he left a will. If he left a will, he is called a testator (Art. 775 NCC).

Next element is Inheritance that include all the property, rights and obligations of a person which are not extinguished by death and all which have accrued thereto since the opening of succession. Rights which are purely personal are not transmissible for they are extinguished by death (Art. 776 NCC).

Lastly, Successors. An heir or successor is a person who is called to the succession either the provision of a will or by operation of law (Art. 782 NCC). Devisees and legatees are persons to whom gifts of real and personal property are respectively given by virtue of a will.

Kinds of Succession

Under Art. 778 of NCC, succession may be:

1. Testamentary or testate succession is that which results from the designation of an heir, made in a will executed in the form prescribed by law (Art 779 NCC).

2. Legal or intestate succession is the effected by operation of law since the decedent did not execute a will.

3. Mixed succession is that effected partly by will and partly by operation of law.

The inheritance of a person includes not only the property and the transmissible rights and obligations existing at the time of his death, but also those which have accrued thereto since the opening of the succession. (Art. 778 NCC). An heir is a person called to the succession either by the provision of a will or by operation of law. Devisees and legatees are persons to whom gifts of real and personal property are respectively given by virtue of a will. (Art. 782).

Succession

Under Art. 774 of the New Civil Code of the Philippines, Succession is a mode of acquisition by virtue of which the property, rights and and obligations to the extent of the value of the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of law

Decedent is the general term applied to the person whose property is transmitted through succession, whether or not he left a will. If the he left a will, he is also called the testator (Art. 775).

The inheritance includes all the property, rights and obligations of a person which are not extinguished by his death (Art. 776). The rights to the succession are transmitted from the moment of the death of the decedent (Art. 777).

Transfer Taxes

Transfer taxes are taxes imposed upon the gratuitous disposition of private properties or rights. Gratuitous transfer means that there's no burden impose nor requires consideration from transferee or recipient. With this, the transfer of ownership is free because of the absence of financial consideration. For this reason, gratuitous transfers are essentially donations.

Donation or gratuitous transfer may be take effect at the time of death of the donor (donation mortis causa subject to estate tax) or during the lifetime of both the donor and the donee (donation inter vivos subject to donor's tax). 

The opposite side of gratuitous transfer is onerous, one where the transferee gives consideration in return of the property or right(s) received. But, onerous transfers are subject to business taxes instead of transfer taxes.

The subject matter of a transfer tax is the privilege of the transferor to transfer property or rights. Even though the amount of transfer tax is based on net estate or net gifts, it shall not be construed as property tax. On this basis, transfer tax is classified as excise tax or privilege tax imposed on the act of passing the ownership of property and not on the value of the property or right.

References: New Civil Code of the Philippines, Title III Donation; Section 3;  RR 2-2003; Transfer and Business Taxation (Tabag/Garcia)

Mandatory Use of Electronic BIR Forms (eBIRForms) in Filing of All Tax Returns by Non-electronic Filing and Payment System (Non-eFPS) Filers

The bureau just recently issued last September 5, 2014 the Revenue Regulations No. 6-2014 prescribing the Mandatory Use of Electronic Bureau of Internal Revenue Forms (eBIRForms) in filing of all Tax Returns by Non-Electronic Filing and Payment System (Non-eFPS) Filers Particularly Accredited Tax Agents/Practitioners, Accredited Printers of Principal and Supplementary Receipts/Invoices, and One-Time Transaction (ONETT) Taxpayers.

Under Section 1 of the regulations, stated that pursuant to the provision of Section 244 of the National Internal Revenue Code of 1997 (Tax Code) as amended, in relation to Section 27 of republic Act No. 8792, otherwise known as the "Electronic Commerce Act", these Regulations are hereby promulgated by making it mandatory for non-eFPS filers or taxpayers to the use eBIRForms covering thirty six (36) BIR Forms in the preparation and filing of their returns starting September 01, 2014 relative to existing revenue issuances under RMC No. 61-2012, "Authorizing the Use of eBIRorms Package in Preparation and Filing of Tax Returns" and RMO No. 24-2013, "Prescribing the Guidelines, Policies, and Procedures on the Use of eBIRForms in Relation to RMC No. 61-2012".

The Mandatory Coverage as stated in Section 4 of the regulations are only those non-eFPS filers as follows:

1. Accredited Tax Agents/Practitioners and all its client-taxpayers;

2. Accredited Printers of Principal and Supplementary Receipts/Invoices;

3. One-Time Transaction (ONETT) taxpayers;

4. Those who shall file a "No Payment" Return;

5. Government-Owned or -controlled Corporations (GOCCs);

6. Local Government Units (LGUs), except barangays; and

7. Cooperatives registered with National Electrification Administration (NEA) and Local Water Utilities Administration (LWUA)

The returns as stated in Section 5 of the eBIRForms is an 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 that includes BIR Form No. 0605, 1600, 1600WP, 1601-C, 1601-E, 1601-F, 1602, 1603, 1604-CF, 1604-E, 1606, 1700, 1701, 1701Q, 1702-EX, 1702-MX, 1702-RT, 1702Q, 1704, 1706, 1707, 1800, 1801, 2000, 2000-OT, 2200A, 2200AN, 2200M, 2200P, 2200T, 2550M, 2550Q, 2551M, 2551Q, 2552, and 2553.

In Section 3 of the regulations stated that the eBIRForms shall be available to all Non-eFPS filers with or without internet access. Taxpayers with internet access shall download the eBIRForms Package from the BIR website www.bir.gov.ph, while taxpayers without internet shall download the eBIRForms package from the BIR e-lounges.

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202014/RR%206-2014.pdf of the full text of Revenue Regulations 6-2014.

SEC Requirements for a Quasi-reorganization

A company or an entity in financial distress or difficulty may be permitted by the Securities and Exchange Commission (SEC) to undergo a quasi-reorganization and in the process may be allowed to revalue its property, plant and equipment if their current value is substantially more than their cost. 

Quasi-reorganization must be approved by the SEC and consider the requirements as follows:

1. An independent expert or specialist is needed if the result of the quasi-reorganization is the revaluation of property, plant and equipment.

2. The increase in the value of the property, plant and equipment is credited to "revaluation surplus".

3. The adjustments concerning "Other" assets shall be made through the retained earnings.

4. The resulting deficit from the quasi-reorganization is offset against the revaluation surplus.

5. Retained earnings subsequent to quasi-reorganization shall be restricted to the extent of the deficit wiped out during the reorganization and cannot be declared as dividend.

6. Losses subsequent to quasi-reorganization cannot be charged to the remaining revaluation surplus.

7. The quasi-reorganization shall be disclosed for at least 3 years.

"Preservation of Books of Accounts and Other Accounting Records"

The bureau just recently issued the Revenue Regulations No. 5-2014 amending Revenue Regulations No. 17-2013 dealing with the "Preservation of Books of Accounts and Other Accounting Records" as follows:

"SECTION 2. RETENTION PERIODS. - All taxpayers are required to preserve their books of accounts, including subsidiary books and other accounting records, for a period of ten (10) years reckoned from the day following the deadline in filing a return, or if filed after the deadline, from the date of the filing of the return, for the taxable year when the last entry was made in the books of accounts: Provided that, within the first five (5) years reckoned from the day following the deadline in filing a return, or if filed after the deadline, from the date of the filing of the return, for the taxable year when the last entry was made in the books of accounts, the taxpayer shall retain hardcopies of the books of accounts, including subsidiary books and and other accounting records in an electronic storage system which complies with the requirements set forth under Section 2-A hereof.

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_1/RR%205-2014/RR%205-2014.pdf of the full text of the Revenue Regulations No. 5-2014.

Professional Regulation Commission (PRC) announces that 1,107 out of 5,540 passed the July 2014 Certified Public Accountant (CPA) Licensure Examination

After three working days, the PRC released the results that 1,107 out of 5,540 passed the Certified Public Accountant Licensure Examination given by the Board of Accountancy in the cities of Manila, Baguio, Cagayan De Oro, Cebu, Davao, Iloilo and Legazpi last July 2014.

The successful examinees who garnered the ten (10) highest places in the July 2014

Certified Public Accountant Licensure Examination are the following: 

RANK NAME SCHOOL RATING(%)

1 ROMMEL RHINO CATUDIO EDUSMA ASIAN DEVELOPMENT FOUNDATION COLLEGE 94.57 

2 JOANNA MARIE LIM BARROZO SAN BEDA COLLEGE OF ALABANG,INC.(ST.BENEDICT COLL) 93.43 

3 RAY HAMODI BALAGBIS NGALOT UNIVERSITY OF SAN CARLOS 92.43 

4 ORVILE PERDON RABINO ADVENTIST UNIVERSITY OF THE PHILIPPINES 92.00 

5 JOSCEL BARRIO DELOS CIELOS XAVIER UNIVERSITY 91.57 

6 JAMAICA PEREZ ENGLIS UNIVERSITY OF SAN CARLOS 91.43 

7 KEN LESTER TANTIADO GUILLEN POLYTECHNIC UNIVERSITY OF THE PHILIPPINES-MAIN-STA. MESA 91.29 

 DANN KARLO ALFARO MANZANO SAN BEDA COLLEGE 91.29 

8 EROS DELA ROSA HERRERA SAN BEDA COLLEGE OF ALABANG,INC.(ST.BENEDICT COLL) 91.14 

 THOMAS ZACHARY PINEDA SARIGUMBA UNIVERSITY OF SAN CARLOS 91.14 

9 JO-ANN HERRERA MERCADO POLYTECHNIC UNIVERSITY OF THE PHILIPPINES-STO. TOMAS 90.86 

10 LYNDON GIGANTO ASIS SOUTHWESTERN UNIVERSITY 90.43 

 ADRIAN CAGUETE ENRIQUEZ SAN BEDA COLLEGE 90.43 

Reference: http://www.prc.gov.ph/news/?id=794