Philippines Business Law & Taxation Questions and Answers

 Business Law & Taxation Questions and Answers as follows:

1.    Which of the following individuals shall not be subject to the income tax under Section 24 (A)?

D	a.	Individual citizen of the Philippines residing therein;
	b.	Individual citizen of the Philippines who residing outside the Philippines including overseas contract workers;
	c.	Individual alien who is a resident of the Philippines;
	d.	Individual alien who is not a resident of the Philippines.

2.    Which of the following income is not from a related trade, business or activity of a domestic proprietary educational institution? 

A	a.	Income from rent of available office spaces in one of the school buildings
	b.	Income from the hospital where medical graduates are trained for residency
	c.	Income from the canteen situated within the school campus
	d.	Income from bookstore situated within the school campus

3.    How much is the annual community tax for individuals?

D	a.	P 25	c.	P 10
	b.	P 20	d.	P 5

4.    Under this system there is a merger of all the properties of the husband and the wife owned by them at the time of the celebration of the marriage, or those acquired thereafter.

B	a.	Conjugal partnership of gains
	b.	Absolute community of properties
	c.	Complete separation of properties
	d.	None of the choices

5.    Which is not an essential characteristic of tax?

A	a.	Limited as to amount
	b.	Proportionate in character
	c.	Payable in money
	d.	Regular payment

                 

6.    A contract of sale is not a

D	a.	Principal contract	c.	Consensual contract
	b.	Nominate contract	d.	Real contract

7.    “I promise to pay P or his order the sum of P 10,000.00 30 days after the death of X.” This is an instrument payable:

A	a.	At a determinable future time
	b.	On Demand
	c.	Upon the fulfillment of a condition
	d.	At an indefinite time, hence, non-negotiable

8.    A corporation acquires juridical personality

C	a.	Upon the filing of the articles of incorporation
	b.	Upon the filing of the by-laws
	c.	Upon the issuance of the certificate of incorporation
	d.	Within 30 days from receipt of notice of the issuance of the certificate of incorporation

9.    It is the right of the mortgagor to redeem the property that was mortgaged after it was sold.

B	a.	Equity of redemption	c.	Right of subrogation
	b.	Right of redemption	d.	Right of pre-emption

10.  A with violence in her eyes intimidated her husband B to sell his exclusive property to her. The contract of sale is

B	a.	Rescissible	c.	Unenforceable
	b.	Voidable	d.	Void

  

11.    Which of the above will be subject to a 25% civil penalty of the tax or of the deficiency tax?

D	a.	Willful neglect to file the return within the period prescribed by the Tax Code or rules and regulations
	b.	A false or fraudulent return is willfully made
	c.	A person who is not VAT-registered issues an invoice or  receipt showing his TIN, followed by the word "VAT"
	d.	Failure to file any return and pay the tax due thereon as required under the provisions of the Tax Code or rules and regulations on the date prescribed

12.    Which of the following statements is INCORRECT?

D	a.	The amount of “de minimis” benefits conforming to the ceiling prescribed in the Tax Code shall not be considered in determining the P30,000 ceiling of “other benefits” included in the exempt 13th  month and other benefits;
	b.	If the employer pays more than the ceiling prescribed for “de minimis” benefits, the excess shall be taxable to the employee receiving the benefits only if such excess is beyond the P30,000 ceiling.
	c.	Any amount given by the employer as benefits to its employees, whether classified as de minimis or fringe benefits, shall constitute as deduction upon such employer;
	d.	Representation and transportation allowance which are fixed in amounts and regularly received by the employees as part of their monthly compensation shall be treated as taxable fringe benefits if received by managerial and supervisory employees.

13.    Penalties and/or interest imposed on the taxpayer may be abated or cancelled on the ground     that the imposition thereof is unjust and excessive, except when:

A	a.	The taxpayer is declared insolvent or bankrupt.
	b.	The filing of the return or payment of the tax is made at the wrong venue.
	c.	The taxpayer’s mistake in payment of his tax is due to erroneous written official advice of a revenue officer.
	d.	The assessment is brought about or a result of the taxpayer’s non-compliance with the law due to a difficult interpretation of the said law.

14.    The actual residential home of the decedent and his family at the time of his death, as               certified by the Barangay Captain of the locality where the family home is situated, has a fair   market value of P3,000,000. The family home is part of the common property of the spouses.   How much is the family home deduction?

B	a.	P1,500,000	c.	P750,000
	b.	P1,000,000	d.	P500,000

15.    A negotiable instrument that is not dated will be considered dated as at the time of

D	a.	Acceptance	c.	Last endorsement
	b.	First endorsement	d.	Issuance

16.    A delinquent stockholder is not entitled to the following rights, except the right:

C	a.	To be voted
	b.	To vote or be represented in the meetings of stockholders
	c.	To dividends
	d.	He is not entitled to all the rights of a stockholder

17.    Three of the following partnership contracts are void.  Which one is not?

C	a.	A universal partnership of present property between husband and wife
	b.	A universal partnership of profits between a man and a woman living together as husband and wife without the benefit of marriage
	c.	A particular partnership between husband and wife
	d.	A universal partnership between a private individual and a public officer

18.    The following are modes of extinguishing an agency, except:

D	a.	Death, civil interdiction, insanity or insolvency of the principal or agent
	b.	Accomplishment of the purpose of the agency
	c.	Expiration of the period for which the agency was constituted
	d.	Continued losses on the part of the principal or agent

20.  Three of the following instances will render an offer ineffective before acceptance is          conveyed.  Which one will not?

D	a.	Civil interdiction of either party	c.	Insanity of either party
	b.	Insolvency of either party	d.	Intoxication of either party

      21.   The taxpayer's 2003 percentage tax return is required to be filed through the authorized agent              bank under the jurisdiction of RDO East Makati.  Without prior authorization from the                        Commissioner, the taxpayer files the return and pays the tax through an authorized agent                      bank under the jurisdiction of RDO Davao City on June 30, 2004.  The tax due per return is                P100,000.

 How much is the total amount due on June 30, 2004

A	a.	P 154,155.25	c.	P 25,000.00
	b.	P 129,155.25	d.	None of the choices

22.    Which of the following shall not be subject to income tax?

I-	Pedro Reyes, an official of Corporation X, asked for an “early retirement” because he was emigrating to Australia.  He was paid P2,000,000 as a separation pay in recognition of his valuable services to the corporation.
II-	Juan Cruz, another official of the same company was separated for occupying a redundant position. He was given P500,000 as separation pay.
III-	Jose Bautista was separated due to his failing eyesight.  He was given P500,000 as separation pay.

All the three (3) were not qualified to retire under the BIR-approved pension plan of the corporation.

D	a.	I, II and III	c.	I only
	b.	I and II	d.	II and III only

23.    This refers to the control number issued by authorized agent bank (AAB) to the taxpayer and  BIR to acknowledge that the taxpayer's account has been successfully debited electronically    in payment of his tax liability.

C	a.	Filing Reference Number
	b.	Acknowledgment Number
	c.	Confirmation Number
	d.	Taxpayer's Information Number

24.    A taxpayer paid excessive tax on April 15, 2000. On December 20, 2001, she filed a written claim for refund. Her claim was denied by the BIR and she received the denial on March 15, 2002.  She filed a motion for reconsideration with the BIR on March 31, 2002.  On April 10, 2002, she received the final denial of the BIR.  What will be the taxpayer’s remedy?

C	a.	File another motion for reconsideration with the BIR within 30 days after the receipt of the final denial
	b.	File an appeal with the Court of Tax Appeals on or before May 10, 2002
	c.	File an appeal with the Court of Tax Appeals on or before April 15, 2002
	d.	The taxpayer has no more remedy against the final denial

25.    A VAT subject real estate dealer sold a residential lot on January 15, 2014.  The following information was made available on the terms of the sale:

Gross selling price	P   3,000,000
Initial payments on January 15, 2014	750,000
Balance to be paid in equal installment,     installments starting February 15, 2014	2,250,000

              

The zonal value of the residual lot was P3,500,000.

How much was the output tax on January 15, 2014 using 12% VAT rate?

C	a.	P 420,000	c.	P 105,000
	b.	P 360,000	d.	None of the choices

26.    Payment made to a third person is valid to extinguish the obligation of the debtor to the creditor in the following cases, except:

A	a.	After payment to the creditor, the third person acquires the creditor’s right.
	b.	When the creditor ratifies the payment to the third person.
	c.	When through the creditor’s conduct, the debtor was led to believe that the third person had authority to receive payment.
	d.	When the third person is subrogated to the rights of the creditor.

27.    N, R and J solidarily bound themselves to deliver to S a Honda motorcycle valued at P 60,000. The obligation was not fulfilled through the fault of J. Thereupon, S filed an action in court against N and the court awarded P 72,000 to S representing the value of the motorcycle plus damages. Which of the following situation is valid?

D	a.	If N pays S the P 72,000, N can collect R and J P 24,000 each
	b.	S has to collect P 24,000 each from N, R and J to satisfy the court’s award of P 72,000
	c.	N can refuse to pay the penalty because it should be charged against J, the guilty party
	d.	If S succeeds in collecting the P 72,000 from N, N in turn can collect from R P 20,000 and from J P 32,000

28.    P authorized A, a minor, to sell his car for P 1,000,000 in cash. A sold the said car to X on installment at a lesser price of P 900,000. P is now repudiating the contact with X on the ground that he is not bound to since X contracted with a minor who exceeded his authority. Decide.

A	a.	P is liable under the contract because it is enough that the principal is capacitated since he is the one entering into the contract.
	b.	P is not liable for the sale on installments since it is unenforceable because his agent acted beyond his powers.
	c.	P is not liable because the agent is a minor with whom X contracted
	d.	P is liable provided the sale is in cash for P 1,000,000.

29.    A gets a loan of P 1,000,000 from B which becomes due on October 1, 2008 and mortgaged his house as security for the debt. On June 30, 2008, the mortgaged house completely destroyed the fire through the fault of C. A week later, B demanded payment from A. Is B’s demand valid?

C	a.	No, the destruction of the house was not thru the fault of A.
	b.	No, the obligation is one with a definite period which is deemed intended for the benefit of both the debtor and creditor
	c.	Yes, the debt becomes demandable unless A can give another security equally satisfactory
	d.	Yes, the debt becomes demandable even if A can give another security equally satisfactory

30.  One of the following characteristics of dacion en pago is also a characteristic of a contract of sale.  Which is it?

D	a.	There is a pre-existing credit
	b.	Obligations are extinguished
	c.	There is less freedom in fixing the price
	d.	Ownership of the object transferred to the other party

31.    An obligation where various prestations are due but the performance of all of them is              required in order to extinguish the obligation is known as:

C	a.	Alternative obligation	c.	Conjunctive obligation
	b.	Facultative obligation	d.	Simple obligation

32.    It is an affirmation of fact or any promise by the seller relating to the thing which has a          natural tendency to induce the buyer to purchase the same, relying on such promise or              affirmation.

C	a.	Condition	c.	Warranty
	b.	False representation	d.	Seller’s talk

33.    Which of the following contacts is rescissible?

C	a.	Contracts entered into during a hypnotic spell
	b.	Contracts entered into in a state of drunkenness
	c.	Contracts entered into to defraud creditors when the latter cannot collect the claims due them
	d.	Contracts where both parties are incapable of giving consent

34.    Which among the following contracts is void?

D	a.	A contract of barter between S, insane, and B, 17 years old
	b.	A contract of sale where B, the buyer, twisted the arm of S, the seller, so that S would sign the deed of sale
	c.	A contract of sale where B, the buyer, aimed a gun at the wife of S, so that S would sign the deed of sale
	d.	A contract for the sale of a cow which is suffering from a contagious disease

35.    Who among the following is the holder of a negotiable instrument originally payable to             order?

B	a.	The original payee who has negotiated the instrument
	b.	The endorsee who is in possession of the instrument
	c.	The possessor of the instrument to whom the instrument was delivered without any endorsement
	d.	The endorsee who has negotiated the instrument

36.    An instrument payable to bearer may be negotiated through any of the following means,          except:

D	a.	Special endorsement plus delivery
	b.	Mere delivery
	c.	Blank endorsement plus delivery
	d.	No delivery is required as long as there is an endorsement, whether blank or special

37.    One of the following is not a characteristic of contract of partnership.

A	a.	Real, in that the partners must deliver their contributions in order for the partnership contract to be perfected
	b.	Principal, because it can stand by itself
	c.	Preparatory, because it a means by which other contracts will be entered into
	d.	Onerous, because the parties contribute money, property, industry to the common fund

38.    Recording in the Registry of Property in the appropriate book is required for the validity of the contract of:

A	a.	Chattel mortgage	c.	Conventional pledge
	b.	Real mortgage	d.	Antichresis

39.    A, B, C and D, joint debtors, are obliged to give V, W, X, Y and Z, solidary creditors, P 20,000.00

C	a.	V may collect from B P 20,000	c.	V may collect from B P 5,000
	b.	V may collect from B P 4,000	d.	V may collect from B P 1,000

40.  The following are modes of extinguishing an agency, except:

D	a.	Death, civil interdiction, insanity or insolvency of the principal or agent
	b.	Accomplishment of the purpose of the agency
	c.	Expiration of the period for which the agency was constituted
	d.	Continued losses on the part of the principal or agent

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.