Policies, Guidelines and Procedures in the Issuance of Importer's Clearance Certificate and Customs Broker's Clearance Certificate Relative to Accreditation as Importer/Customs Broker

The bureau just recently issued Revenue Memorandum Order No. 33-2014 amending Policies, Guidelines and Procedures in the Issuance of Importer's Clearance Certificate and Customs Broker's Clearance Certificate Relative to Accreditation as Importer/Custom Broker.

In Section II - Policy Amendments - A. Amendments on Documentary Requirements stated as follows:

1. Certified true copy of business Name registration shall not be required from a customs broker who has no trade name when he/she registered with the BIR.

2. Applicants which are BOI/PEZA-registered entities or those located at Freeport or special economic zones enjoying tax incentives shall be required to submit their respective Certificates of Registration issued by the concerned Investment Promotions Agencies (IPAs), in addition to the regular requirements.

3. Applicants for ICC or BCC which are newly-registered with the BIR or one which was never accredited by the BOC as either importer or broker shall be required to submit printer's delivery receipt and proof of filing tax returns through the BIR's electronic filing and payment system for at least two consecutive months. Proof of single importation done shall no longer be required from applicant who are considered new importers/customs brokers.

While the Other Policy Amendments are stated in Section II. B of the RMO as follows:

1. Individual applicants with severe medical condition shall be allowed to be represented by his/her appointed "attorney-in-fact", supported by a duly notarized "Special Power of Attorney" and a medical certificate issued by the attending physician under oath, endorsed by any government physician.

2. Authorized officer of the non-individual applicant shall mean any of the officers listed in the Corporation's latest General Information Sheet (GIS) filed with the Securities and Exchange Commission (SEC). However, in the event the board authorized any person other than those officers indicated in the GIS, that person shall be required to execute a sworn statement that he/she shall likewise be jointly or severally liable or responsible in the problems shall arise with the filed application.

Moreover, under Section III stated the Revised Procedures in the Issuance of Provisional ICC/BCC of the following:

1. All importers and customs brokers which are in the list provided by BOC as of February, 2014 and were able to file their applications on or before July 31, 2014 shall be qualified to be issued Provisional ICC/BCC-

     a. If tax verification compliance has not yet been completed, the following minimum criteria must      be satisfied:

          1. Registered with the BIR (with Certiticate of Registration);

          2. Absence of delinquent account;

          3. Absence of any pending criminal case; and

          4. Not tagged as a "Cannot be Located (CBL)" taxpayer.

     b. If tax verification compliance has been completed, but applicant (except BOI/PEZA registered        entities or freeport or special economic zone locators) has been found to have failed in the any of         the following criteria:

          1. Regular eFPS user - provided, applicant was able to enroll in the eFPS facility; or

          2. With Certificate of Good Standing - provided, proof of application with the SEC has been               submitted; or

          3. Absence of unresolved discrepancy arising from the matching of third party information                  against taxpayer's tax declaration (Letter Notice arising from RELIEF/TRS - provided that the            case has not yet been reported as delinquent account; or

          4. Absence of outstanding tax liabilities - provided, such tax liabilities are covered by an                     application for abatement or compromise settlement which is pending review by the Bureau.

However, in the case the application for compromise settlement or abatement of penalties was not favorably acted upon by the concerned offices within the validity of the Provisional ICC/BCC, the same shall be considered as a valid ground for the eventual denial of the application for the issuance of a Regular ICC/BCC.

2. The list of qualified importers and customs brokers shall be posted in the BIR website and shall likewise be sent to the Bureau of Customs (BOC) through email to the BOC's Accounts Management Office. The said list shall serve as the BOC's reference in processing their respective accreditations, lieu of the physical copy of the certificate itself.

The concerned importers/brokers that were issued Provisional ICC/BCC shall likewise be sent notifications by the Accounts Receivable Monitoring Division (ARMD) through their respective email accounts. However, qualified importers/brokers may secure the copy of the certificate itself from the ARMD.

It shall be the responsibility of the importers/brokers issued Provisional ICC/BCC to initiate the verification from the concerned offices if they satisfied the criteria provided under RMO 10-2014, as amended, to ensure the issuance of a regular ICC/BCC before the expiration of the six-month validity period thereof, more specifically the following:

a. Outstanding Tax Liabilities covered by an application for abatement of penalties or compromise settlement - concerned taxpayers should actively follow-up with the concerned offices the decision on such application;

b. Open stop-filer cases - concerned taxpayers are advised to comply with the filing of the requisite tax returns and the update of their registration information if the same is causing the creation of invalid "stop-filer" cases;

c. Certificate of Good Standing - must be secured with the SEC;

d. Use of the eFPS in the filing of requisite tax returns - concerned taxpayers are advised to the use regularly the eFPS once enrollment with the system has been done;

e. Uploading of Summary Lists of Sales and Purchases (SLSP) - concerned taxpayers must ensure that these are periodically submitted to the district office where they are registered and the same are successfully uploaded in the database as certified by Audit Information, Tax exemption and Incentives Division (AITEID).

f. Uploading of Alphalist of Employees and Other Income Payees - concerned taxpayers must secure proofs of successful uploading of the electronically submitted data to the data warehouse. The certifications can be secured from the Miscellaneous Operations Monitoring Division (MOMD) and the concerned Revenue Data Center (RDC).

Complete documents on their compliance must be submitted to the ARMD at least thirty (30) days prior to the expiry date of the said Provisional ICC/BCC. In the event that the herein requirements have not been complied with by the concerned importer/broker and their respective Provisional ICC/BCC have expired, new application for ICC/BCC must be filed by the concerned importer/broker with the ARMD.

Once the full verification of their tax compliance has been completed by the ARMD based on the certified replies of concerned offices on the ARMD's request for verification, the regular ICC/BCC or denial letter on the expiry date of the Provisional ICC/BCC shall be deemed denial of their application for ICC/BCC.

3. The issuance of Provisional ICC/BCC is not applicable to applicants who are not in the list provided by BOC as of February, 2014. It shall likewise not apply to applicants included in the list but failed to file the application on or before July 31, 2014.

Effects of Non-filing, Late Filing and/or Revocation of Tax exemption Rulings

Revenue Memorandum Order No. 34-2014 was issued by the bureau clarifying certain provisions of Revenue Memorandum Order (RMO) No. 20-2013, as amended by RMO No. 28-2013, on the issuance of Tax Exemption Rulings for Qualified Non-Stock, Non-Profit Corporations and Associations under Section 30 of the National Internal Revenue Code of 1997, as amended.

Under II of the RMO No. 20-2014 stated the effects of non-filing, late filing and/or revocation of Tax Exemption Rulings under RMO No. 20-2013, as amended by RMO No. 28-2013:

Consistent with the nature of Tax Exemption Rulings, the absence of a valid, current and subsisting Tax Exemption Ruling will not operate to divest qualified entities of the tax exemption provided under the Constitution or Section 30 of the Tax Code.

Non-stock, non-profit entities which fail to secure a Tax Exemption Ruling for a given taxable year or shorter period (as in the case of late filers), are duty bound to prove compliance with the conditions laid down by the law and other pertinent administrative issuances in the event of a tax investigation.

Non-stock, non-profit entities which fail to renew their Tax Exemption Ruling before the lapse of its validity period may, nevertheless, file their applications with the Revenue District Office (RDO) where they are registered as soon they are able to do so. In the processing of these applications for Tax Exemption Rulings, the presentation of the previously issued tax exemption ruling or certificate is not necessary. In such case, the processing offices of the Bureau shall treat the same as a new application.

In accordance with RMC No. 8-2014, the failure of the non-stock, non-profit entity to present its valid, current and subsisting Tax Exemption ruling to the appropriate withholding agents shall subject such entity to the payment of the withholding taxes due on their transactions. On the other hand, the withholding agents' failure to withhold notwithstanding the lack of Tax Exemption ruling shall cause the imposition of penalties under Section 251 and other pertinent Sections of the Tax Code.

Lease of Residential Units Exempt From VAT

Under SEC. 4.109-1 VAT-Exempt Transaction (B) Exempt Transactions - (q) Lease of residential units with a monthly rental per unit not exceeding Ten Thousand Pesos (P10,000.00), regardless of the amount of aggregate rentals received by the lessor during the year; Provided, that not later than January 31, 2009 and every three (3) years thereafter, the amount of P10,000.00 shall be adjusted to its present value using the Consumer Price Index, as published by the NSO;

The foregoing notwithstanding, lease of residential units where the monthly rental per unit exceeds Ten Thousand Pesos (P10,000.00) but the aggregate of such rentals of the lessor during the year do not exceed One Million Five hundred Pesos (P1,500,000.00) shall likewise be exempt from from VAT, however, the same shall be subjected to three percent (3%) percentage tax.

In cases where a lessor has several residential units for lease, some are leased out for a monthly rental per unit not exceeding P10,000.00 while others are leased out for more than P10,000.00 per unit, his tax liability will be as follows:

1. The gross receipts from rental not exceeding P10,000.00 per month per unit shall be exempt from VAT regardless of the aggregate annual gross receipts.

2. The gross receipts from rental exceeding P10,000.00 per month per unit shall be subject to VAT if the aggregate annual gross receipts from said units only (not including the gross receipts from unit leased for not more than P10,000.00) exceeds P1,500,000.00. Otherwise, the gross receipts will be subject to the 3% tax imposed under Section 116 of the Tax Code.

The term 'residential units' shall refer to apartments and house & lots used for residential purposes, and building or parts or units thereof used solely as dwelling places (e. g., dormitories, rooms and bed spaces) except hotels, motel rooms, hotels and hotel rooms.

The term 'unit' shall mean an apartment unit in the case of apartments, house in the case of residential houses; per person in the case of dormitories, boarding houses and bed spaces; and per room in case of rooms for rent.

However, the bureau has issued the Revenue Regulations No. 3-2012 of the Effectivity of Threshold Amounts for Sales of Residential Lot, Sales of House and Lot, Lease of Residential Unit and Sales or Lease of Goods or Properties or Performance of Services covered by Section 109 (P), (Q) and (V) of the Tax Code of 1997, as amended.

The threshold amounts has been adjusted as follows:

1. Section 109 (P) - from P1,500,000.00 to P1,919,500.00

2. Section 109 (P) - from P2,500,000.00 to P3,199,200.00

3. Section 109 (Q - Lease of Residential Units) - from P10,000.00 to P12,800.00

4. Section 109 (V) - from P1,500,000.00 to P1,919,500.00

The new threshold amount was made effective for instrument of sale (whether the instrument is nominated as a deed of absolute sale, deed of conditional sale or otherwise) is executed and notarized on or after January 1, 2012.

Sale of Residential Lot Valued at P1,919,500 and below, or House & Lot and Other Residential Dwellings at P3,199,200 and below Not Subject to VAT where the Instrument of Sale/Transfer/Disposition was Executed and Notarized on or after January 1, 2012

Under SEC. 4.109-1 (B) Exempt Transactions - (p) Sale of Real Properties Exempt from VAT - (4) of Revenue Regulations No. 16-2005 refers to Sales of residential lot valued at One Million Five Hundred Thousand Pesos (P1,500,0000.00) and below, or house & lot and other residential dwellings valued at Two Million Five Hundred Thousand Pesos (P2,500,000.00) and below where the instrument of sale/transfer/disposition was executed on or after November 1, 2005; Provided, That not later than January 31, 2009 and every three (3) years thereafter, the amounts stated herein shall be adjusted to its present value using the Consumer Price Index, as published by the National Statistics Office (NSO); Provided, further, that such adjustment shall be published through revenue regulations to be issued not later than March 31 of each year;

If two or more adjacent residential lots are sold or disposed in favor of one buyer, for the purpose of utilizing the lots as one residential lot, the sale shall be exempt from VAT only if the aggregate value of the lots do not exceed P1,500,000.00. Adjacent residential lots, although covered by separate titles and/or separate tax declarations, when sold or disposed to one and the same buyer, whether covered by one or separate Deed of Conveyance, shall be presumed as a sale of one residential lot.

But Under Section 1 of the Revenue Regulations No. 3-2012 amends Sections 4.109.-1 (B), (p)(4) of Revenue Regulations No. 16-2005 as amended by Revenue Regulations No. 16-2011 should be worded as follows:

"(p) The following sales of real properties are exempt from VAT, namely:

(4) Sale of residential lot valued at One Million Nine Hundred Nineteen Thousand Five Hundred Pesos (P1,919,500) and below, or house & lot and other residential dwellings valued at Three Million One Hundred Ninety-Nine Thousand Two Hundred Pesos (P3,199,200.00) and below where the instrument of sale/transfer/disposition was executed and notarized on or after January 1, 2012;

However, for instruments executed and notarized on or after November 1, 2005 but prior to January 1, 2012, the threshold amounts should appropriately be P1,500,000 and P2,500,000 respectively.

Provided, That every three (3) years thereafter, the amounts stated herein shall be adjusted to its present value using the Consumer Price Index, as published by the National Statistics Office (NSO); Provided, further, that such adjustment shall be published through revenue regulations to be issued not later than March 31 of each year.

Social Security System (SSS) Reveal Provident Fund for Members - SSS PESO Fund

The Social Security System (SSS) has launched last September 25, 2014 a voluntary provident fund program that offers its members an additional way of saving for their retirement. 

According to SSS President and Chief Executive Officer Emilio S. de Quiros, Jr, the new retirement savings called the SSS Personal Equity and Savings Option (SSS PESO) Fund is an alternative and tax-free investment that would help members accumulate adequate income in retirement and earn a reasonable rate of return. The SSS PESO was created in accordance to Sec. 4(a)(2) of the Social Security Law.

"SSS PESO savings can be used to supplement the benefits available under the regular SSS program. It offers guaranteed earnings based on rates higher that those at brick-and-mortar banks." De Quiros said.

The SSS PESO fund is open to all members below 55 years old with six consecutive SSS contributions within the last 12 months prior to enrollment and have not yet filed final claims with the SSS. Qualified members can participate for a minimum contribution of Php.1,000 up to a maximum of Php100,000 per year.

De Quiros also added, that "One's membership will start upon receipt of first contribution, Succeeding SSS PESO fund contributions can be made anytime as long as there is a corresponding SSS contribution on the month of contribution".

Self-employed, voluntary and OFW members are qualify if they are paying the maximum SSS contribution and also need to pay the maximum SSS contribution for the month they are to save in the SSS PESO fund.

The savings in the SSS PESO Fund are invested in sovereign guaranteed investments, where 65 percent of the total fund is allocated for retirement, and 35 percent is for medical and general purposes. SSS PESO accounts will be charged a one-percent administration fee annually.

Besides, the portion for retirement is guaranteed to earn income based on interest rates of five-year Treasury yield, while earnings of the fund allotted for medical and general purposes will be based on 364-day Treasury bill rates.

The SSS President also added that aside from the guaranteed earnings, SSS PESO Fund members may also get excess earnings, which will be credited automatically to their accounts, depending on the actual year-end performance of the SSS PESO Fund.

Savings in SSS PESO fund can be withdrawn upon the member's effective date of retirement or total disability with the SSS either in monthly pensions over a minimum period of 12 months and Php1,000 payment per month, in lumpsum, or contribution of both.

If members need to withdraw funds early, they may only touch the portion of their equity allocated for medical and general purposes, and it will be subject to penalties and service fees if withdrawn earlier than five years and if a member died before the maturity of his SSS PESO savings or expiration of the pension period, the member's beneficiaries will received the savings in the form of death to be paid in lumpsum.

Sale of Real Properties Utilized for Socialized Housing Exempt from VAT

Under SEC. 4.109-1 (B) Exempt Transactions - (p) Sale of Real Properties Exempt from VAT - (3) of Revenue Regulations No. 16-2005 refers to sale of real properties utilized for socialized housing as defined under RA No. 7279, and other related laws, such as RA No. 7835 and RA No. 8763, wherein the price ceiling per unit is Php.225,000.00 or as may from time to time be determined by the HUDCC and the NEDA and other related laws.

"Socialized housing" refers to housing programs and projects covering houses and lots or home lots only undertaken by the Government or the private sector for the underprivileged and homeless citizens which shall include sites and services development, long-term financing, liberated terms on interest payments, and such other benefits in accordance with the provisions of RA No. 7279, otherwise known as the "Urban Development and Housing Act of 1992" and RA No. 7835 and RA No. 8763. "Socialized housing" shall also refer to projects intended for the underprivileged and homeless wherein the housing package selling price is within the lowest interest rates under the Unified Home Lending Program (UHLP) or any equivalent housing program of the Government, the private sector or non-government organizations.

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).