2015 FILING OF ANNUAL FINANCIAL STATEMENTS AND GENERAL INFORMATION SHEET

SEC Memorandum Circular No. 23 Series of 2014 was issued to adopt the following measures in the filing of the AFS of companies whose fiscal year ends on December 31, 2014 and General Information Sheet.

All Corporations, including branch offices, representative offices, regional headquarters and regional operating headquarters of foreign corporations, that file their AFS and GIS at the Commission's Head Office in Mandaluyong City, Satellite Office, Davao, Cebu, Iloilo and Baguio Extension Offices shall depending on the last numerical digit of their SEC registration or license number, be governed by the following schedule in the filing period for 2015:

April 13, 14, 15, 16, 17:     "1", "2"

April 20, 21, 22, 23, 24:     "3", "4"

April 27, 28, 29, 30:           "5", "6"

May 4, 5, 6, 7, 8:                "7", "8"

May 11, 12, 13, 15, 15:      "9", "0"

Prior to April 13, 2015 all corporations may file their AFS regardless of the last numerical digit of their registration or license number;

Late filing shall be accepted starting May 18, 2015 and shall be subject to the prescribed penalties which shall be computed from the date of the last day of filing schedule stated in paragraph 1;

The AFS, other than the consolidated financial statements, shall have the stamped "received by the Bureau of Internal Revenue (BIR) or its authorized banks, unless the BIR allows an alternative proof of submission for its authorized banks (e.g. bank slips);

Please refer http://www.sec.gov.ph/docs_home/sec_memo_no.23_s2014.pdf of the full text of the circular.

SEC Express System

The Securities and Exchange Commission (SEC) unveiled the  SEC Express System , is an alternative mode of securing copies of Corporate or Partnership documents without having to personally come to the SEC. The public may access the SEC Express System when requesting for both plain and authenticated copies of the following documents on file with the SEC: Articles of Incorporation/Partnership (original and amended) By-laws (original and amended) General Information Sheet (GIS) Application for Increase/Decrease of Capital Stock Resolution (Minutes) Secretary`s Certificate Board Resolution Registration Data Sheet Other company-related documents The SEC Express System covers the following options: Online Application. The public may request for SEC documents through a user-friendly, web-based interface that includes online payment and courier delivery of the requested documents/s nationwide. Call Center Facility. The public may call Hotline Number 737-8888 for requests, mode of payment and courier delivery of the requested documents/s nationwide. General Information Sheet (GIS). The public may schedule an appointment when to go to SEC to make their request for document/s. The request shall then be accompanied at the appointed date and time. A maximum of three (3) documents per appointment shall be accommodated. One-time request in excess of three documents shall be referred to the Online Application and/or Call Center Facility. But the provider will charge additional service and courier fees for Online Application and Call Center Facility. However, the public may opt to personally come to the SEC By Appointment without additional cost to them.

SSS Payments via Mobile Phones to Open to Members with the MOA signed with G-XChange Inc.

Did you know that mobile payments to Social Security System (SSS) will be available soon with the memorandum of agreement signed between the state agency and G-XChange Inc.?

The contract allows SSS members to pay their SSS contributions and loan amortizations through the use of G-XChange's mobile remittance facility called "G-Cash," which is offered exclusively to Globe and TM Network subscribers.

G-Cash is a free mobile application, which serves as a virtual wallet offering users a secure, fast, and convenient money transfers using mobile phones. A one-time registration is required for SSS transactions and payments are free of charge.

The facility will be opened to household employers, voluntary members, and self-employed individuals including farmers, fishermen and non-working spouses.

To make payments using G-Cash, SSS members will need to load their G-Cash accounts to cover their payments for contributions and loans. The member will receive a confirmation text message for every successful transaction.

Please refer https://www.sss.gov.ph/sss/appmanager/viewArticle.jsp?page=NR2015_002 of the full text of the article.

Amendments of De Minimis Benefits Per RR No. 1-2015

The Revenue Regulations No. 1-2015 was issued by the bureau to further amend RR No. 2-8, as last amended by RR Nos. 5-2008, 5-2011 and 8-2012 with respect to "De Minimis" benefits which are exempt from income tax on compensation as well as from fringe benefit tax.

In Section 2.78.1 (A) (3) of rr 2-98, as last amended by RR 8-2012 is further amend as follows:

(3) Facilities and privileges of relatively small value. - 

(k) Benefits received by an employee by virtue of a collective bargaining agreement (CBA) and productivity incentive schemes provided that the total annual monetary value received from both CBA and productivity incentive schemes combined do not exceed ten thousand (Php 10,000.00) per employee per taxable year;

Sec. 2.33 Special Treatment of Fringe Benefits. - (C)

(k) Benefits receives by an employee by virtue of a collective bargaining agreement (CBA) and productivity incentive schemes provided that the total annual monetary value received from both CBA and productivity incentive schemes combined, do not exceed ten thousand pesos (Php 10,000.00) per employee per taxable year;

These Regulations shall take effect immediately upon publication.

Here's the link of the last amended revenue regulaitons related to De Minimis Benefits http://philippinetaxtalk.blogspot.com/2013/12/de-minimis-benefits-as-per-revenue.html

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202015/RR%201-2015%202.pdf of the full text of Revenue Regulations 1-2015.

SSS will release 13th month pensions of pensioners in December

SSS announced last November 27, 2014 that SSS pensioners will receive 13th month pension this December 2014.

According to the Social Security System (SSS), the agency will release P6 billion for the 13th month pensions of nearly 1.9 million pensioners in December, as part of its annual year-end tradition that began in 1988.

Besides, children receiving dependent’s pensions are also entitled to the 13th month pension.

The 13th month pension of retirees and survivor pensioners is equal to the amount of their regular monthly pensions, while it excludes the carer’s allowance for disability pensioners.

SSS members or their beneficiaries can withdraw their December and 13th month pensions on a schedule based on the members’ contingency date for retirement, disability or death.

In fact, based on current SSS records, the average basic monthly pension amounts to P3,157.

Valuation of Contributions or Gifts Actually Paid or Made in Computing Taxable Income

The Revenue Memorandum Circular No. 86-2014 was issued to clarify the valuation of contributions or gifts actually paid or made in computing taxable income as part of substantiation requirement under Revenue Regulations No. 13-98.

In Section 8 of RR No. 13-98 reads in part of the substantiation requirements:

a. For Donors - Donors claiming donations and contributions to accredited non-stock, non-profit corporation/NGO as deductions from their taxable business income should submit evidences or proofs to the BIR by showing the Certificate/s of Donation and indicating therein the following:

i. Actual receipt by the accredited non-stock, non-profit corporation/NGO of the donation or contribution and the date of receipt thereof; and

ii. The a mount of the charitable donation or contribution, if in cash; if property, whether real or personal, the acquisition cost of the said property.

The information required in Section 8 of RR No. 13-98 shall be stated in a Certificate of Donation (BIR form 2322) following the format prescribed in Annex "A" of this Circular.

BIR Form 2322 consists of two parts - a donee certification and a donor's statement of values. The first page of BIR form 2322 is a certification by the donee that it has received on the date indicated the subject matter (i.e. cash or property) of the donation. It also provides a description of the properties donated. The donee certification must signed by an authorized representative of the donee organization.

The second page of BIR Form 2322 requires the donor to execute a statement which provides descriptions, acquisition costs and net book values of the properties donated as reflected in the financial statements of the donor. Moreover, the statement must be accompanied by deed of sale/bill of sale to prove the acquisition cost of the properties. The values declared by the donor in the statement shall still be subject to further confirmation by the Bureau as to its correctness and accuracy. The donor's statement must be signed by the donor or authorized representative.

Finally, under Section 235 of the National Internal Revenue ode of 1997, as amended, any provision of existing general or special law to the contrary notwithstanding, the books of accounts and other pertinent records of tax-exempt organizations or grantees of tax incentives shall be subject to examination by the Bureau for purposes of ascertaining compliance with the conditions under which they have been granted exemptions or tax incentives, and their tax liability, if any.

This Circular took effect immediately.

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMC%20No%2086-2014.pdf of the full text of the circular.

Privileges and Minimum Registration and Tax Compliance Requirements of Marginal Income Earners

The Department of Finance has issued the Revenue Memorandum Circular No. 7-2014 to clarify and reiterate the registration as well as compliance requirements of Marginal Income Earners (MIE) pursuant to Revenue Regulations (RR) No. 7-2012.

MIE as defined in Section 3 of the same RR provides:

"Marginal Income Earner - shall refer to those individual whose business do not realize gross sales or receipts exceeding P100,000 in any 12-month period."

The individual referred to in that section is an individual not deriving compensation as an employee under an employer-employee relationship but who is self-employed and deriving gross sales or receipts not exceeding P100,000 in any 12-month period. Moreover, the activities of such MIE should be principally for subsistence or livelihood. The MIE, as herein defined, shall include but not limited to agricultural growers/producers (farmers/fishermen) selling directly to ultimate consumer, small sari-sari stores, small cariderias or "turo-turos", drivers/operators of a single unit tricycle, and such, but shall not include licensed professionals, consultants, artist, sales agents, brokers and other similarly situated, including all others whose income have been subjected to withholding tax.

The privileges and minimum registration and tax compliance requirements of MIE are as follows:

1. Registration with the Bureau using BIR Form 1901 with the following minimal documentary requirements:

i. Sworn Statement of Income for the year (Annex "A"); and

ii. NSO Certified or Local Civil Registry Birth Certificate;

2. Exemption from the payment of Annual Registration Fee (ARF);

3. Registration of Books of Accounts (e. g. two-column journal or other simplified books for daily expenses and revenues);

4. Issuance of registered principal receipt/sales invoices as prescribed under RMO 12-2013;

5. Filing and Payment of Annual Income Tax Return using BIR Form 1701 similar to any other self-employed individuals; and

6. Exemption from payment of business taxes (i. e. VAT or any Percentage Tax).

The BIR District Office, upon evaluation of application for registration, shall issue the Certificate of Registration and shall likewise ensure compliance with the registration of books of accounts, and issuance of Authority to Print for their Principal Receipts/Sales Invoices.

Please refer http://www.bir.gov.ph/images/bir_files/old_files/pdf/82435RMC%20No%207-2014.pdf the full text of the circular.

Directors' Fees Received by Directors Who Are Not Employees of the Corporation are Not Subject to VAT or Percentage Tax and Business Tax

The Revenue Memorandum Circular No. 77-2008 was issued by the Bureau of Internal Revenue to clarify or reverse the law particularly the Revenue Memorandum Circular No. 34-2008 as the BIR ruled that directors receiving fees, per diems and allowances from corporations where they sit as members of the Board of Directors fall under the category of seller of services and, hence, liable to pay the 12% VAT or the 3% percentage tax.

In revisiting said issuance, it became evident or clear that the fees, per diems and allowances or honoraria being given to a director of a corporation are not derived from an economic or commercial activity that have been pursued "in the course of trade or business". Rather, said director's fees are remunerations paid in the exercise of a right of an owner in the management of a  corporation. Thus, not "in the course of trade or business" as contemplated under Section 105 of the Code. Such fees, per diems, allowances and other income received by the director as such, are therefore, exempt from the imposition of the 12% VAT or 3% percentage tax, notwithstanding that the said payments are not among those enumerated under Section 109 of the said Code.

Therefore, such income are exempt or not subject to from imposition of business tax.

Please refer ftp://ftp.bir.gov.ph/webadmin1/pdf/42932rmc%20no.%2077-2008.pdf of the full text of the Revenue Memorandum Circular No. 77-2008.

Filing/Submission of Hard Copy of the Certificate of Compensation Payment/Tax Withheld (BIR Form 2316)

Revenue Regulations No. 11-2013 was issued by the bureau in order to prescribe additional forms/documents to be filed by withholding agents in compliance with their duty to report income of their employees under the law.

It is stated in Section 2 of these regulations amending Section 2.83 of RR 2-98, as amended, is hereby further amended to read as follows:

"Sec. 2.83. Statements and Returns. - 

Section 2.83.1. Employees Withholding Statements (BIR Form No. 2316). - In general, every employer or other person who is required to deduct and withhold the tax on compensation including fringe benefits given to rank and file employees, shall furnish every employee from whose compensation taxes have been withheld the Certificate of Compensation Payment/Tax Withheld (BIR Form No. 2316) on or before January 31 of the succeeding calendar year, or if employment is terminated before the close of such calendar year, on the day on which the last payment of compensation is made. Failure to furnish the same shall be a ground for the mandatory audit of payor's income tax liabilities (including withholding tax) upon verified complaint of the payee.

Employers of MWEs are still required to issue BIR Form No. 2316 (June 2008 Encs version) to the MWEs on or before January 31 of the following year.

As a rule, the employer shall furnish each employee with the original and duplicate copies of BIR Form No. 2316 showing the name and address of the employer; employer's TIN; name and address of the employee; employee's TIN; amount of exemptions claimed, amount of premium payments on health and/or hospitalization insurance not exceeding P2,400.00, if any; the sum of compensation paid including the non-taxable benefits; the amount of statutory minimum wage received by MWEs; Overtime pay, holiday pay, night shift differential pay and hazard pay received by MWEs; the amount of tax due; the amount of tax withheld during the calendar year and such other information as may be required. The statement must be signed by both the employer or other authorized officer and the employee, and shall contain a written declaration that it is made under the penalties of perjury. If the employer is the Government of the Philippines, its political subdivision, agency or instrumentality or government-owned or controlled corporation, the statement shall be signed by the duly designated officer or employee.

However, in cases covered by subsituted filing, the employer shall furnish each employee with the original copy of BIR Form No. 2316 and file/submit to the BIR the duplicate copy not later than February 28 following the close of the calendar year.

     XXXX                   XXXX                    XXXX

It is also stated that under Section 250 of the Tax Code reading, "In the case of each dailure to file an information return, statement or list, or keep any record, or supply any information required by this Code or by the Commissioner on the date prescribed therefor, unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall, upon notice and demand by the Commissioner, be paid by the person failing to file keep or supply the same, one thousand pesos (P1,000) for each such failure: Provided, however, That the aggregate mount to be imposed for all such failures during a calendar year shall not exceed twenty-five thousand pesos (P25,000).

This regulations was took effect beginning with the calendar year 2013.

Please refer http://www.bir.gov.ph/images/bir_files/old_files/pdf/71821RR%2011-2013.pdf of the full text of the regulations.

Tax Implications of Real Estate Service Practitioners (RESPs) Who Passed the Licensure Examinations and Who Did Not Pass or Did Not Take Up Licensure Examinations Given by the Real Estate Service

The Revenue Regulations No. 10-2013 was issued by the Department of Finance and promulgated to further amend portions of Revenue Regulations No. 2-98 as last amended by Revenue Regulations No. 30-2003, providing  for the inclusion of Real Estate Service pursuant to RA 9646, "The Real Estate Service Act of the Philippines" as among those professionals falling under Section 2.57.2(A)(1) of Revenue Regulations No. 2-98, as amended, subject to the 10% or 15%  creditable (expanded) withholding tax and to amend Section 2.57.2(G) of RR 14-2002 to include real estate practitioners who did not pass or did not take up licensure examinations given by the Real Estate Service.

Section 2 of these regulation stated that, Section 2.57.2(A)(1) of RR 2-98, as last amended by RR 30-2003, is hereby further amended to read as follows:

"Section 2.57.2. Income payment subject to creditable withholding tax and rates prescribed thereon. - xxx      xxx

(A) Professional fees, talent fees, etc., for services rendered by individuals. - On the gross professional, promotional and talent fees or any other form of remuneration for the services of the following individuals - Fifteen percent (15%), if the gross income for the current year exceeds P720,000; and Ten percent (10%), if otherwise: 

(1) Those individually engaged in the practice of profession or callings; xxx designers, real estate service practitioners (RESPs), (i. e. real estate consultants, real estate appraisers and real estate brokers) requiring government licensure examination given by the Real Estate Service pursuant to Republic Act No. 9646 and all other profession requiring government licensure examination regulated by the Professional Regulations Commission, Supreme Court, etc. xxx"

Moreover, Section 3 of these regulations stated also that Section 2.57.2(G) of RR 2-98, as last amended by RR 14-2002, is hereby further amended to read as follows:

"Section 2.57.2. - Income payment subject to creditable withholding tax and rates prescribed thereon. -          xxx               xxx

           xxx               xxx

(G) Income payment to certain brokers and agents. - On gross commissions of customs, insurance, stock, immigration and commercial brokers, fees of agents of professional entertainers and real estate service practitioners (RESPs), (i. e. real estate consultants, real appraisers and real estate brokers) who failed or did not take up the licensure examination given by and not registered with the Real Estate Service under the Professional Regulations Commission. - Ten percent (10%).

   xxx          xxx         xxx"

These regulations was took effect last June 1, 2013 and shall cover income payment to be paid or payable starting June 1, 2013 which are required to be remitted within the month of July, 2013.

Please refer http://www.bir.gov.ph/images/bir_files/old_files/pdf/71818RR%2010-2013%20revised.pdf of the full text of the regulations.