Bureau of Internal Revenue Issuances
REVENUE MEMORANDUM ORDER
REVENUE MEMORANDUM CIRCULAR
RMC No. 119-2024
October 25, 2024
Providing Extension of the Deadlines for the Filing of Tax Returns and Payment of Corresponding Taxes Due Thereon, Including Submission of Required Documents for Taxpayers within the Jurisdiction of Revenue District Offices of the Bureau of Internal Revenue that were Affected by Typhoon “Kristine.”
Tax Law
REPUBLIC ACT No. 12022
Official Gazette / October 2, 2024
An act defining the crimes of agricultural economic sabotage, prescribing penalties therefor, vesting jurisdiction over such offenses with the court of tax appeals, providing mechanism for its implementation and enforcement, repealing for the purpose Republic Act No. 10845 or the “Anti-Agricultural Smuggling Act of 2018”
https://www.officialgazette.gov.ph/2024/09/26/republic-act-no-12022/
REPUBLIC ACT No. 12023
Official Gazette / October 3, 2024
AN ACT AMENDING SECTIONS 105, 108, 109, 110, 113, 114, 115, 128, 236, AND 288 AND ADDING NEW SECTIONS 108-A AND 108-B OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED.
https://www.officialgazette.gov.ph/2024/10/02/republic-act-no-12023/
Tax And Business Related News
BIR WEEKENDER BRIEFS
Volume No. 15 Issue No 43 Week ending October 25, 2024
CIR Lumagui ordered all revenuers to conduct simultaneous and nationwide raid against resellers and retailers of illicit vape products last October 16.
Click the link below to read the full news from the source:
https://bir-cdn.bir.gov.ph/BIR/pdf/v15n43_FINAL.pdf
Lumagui: BIR Raids Large-Scale Illicit Cigarette Factory and Warehouse in Cebu with ₱107M Tax Liability
Bureau of Internal Revenue (BIR) Commissioner Romeo D. Lumagui Jr. reports another win in the fight against illicit trade with the recent raid of an illicit cigarette factory and warehouse located in Cebu last October 3 and 5. The BIR estimates around Php 107,756,900.45 in tax liability after seizing 32,545 counterfeit internal revenue stamps, 44, 310 packs of illicit cigarettes, 13 machines used for manufacturing cigarettes and raw materials for cigarettes.
Click the link below to read the full news from the source:
https://bir-cdn.bir.gov.ph/BIR/pdf/PR77OCT2424.pdf
Recto secures US Treasury support on strengthening PH tax and customs admin system to boost revenue generation
Department of Finance / October 26, 2024
Finance Secretary Ralph G. Recto has secured the backing of the United States Department of the Treasury to strengthen the Philippines’ tax and customs administration system in order to boost the collection of much-needed revenues. This commitment was conveyed by US Treasury senior officials led by Undersecretary Jay C. Shambaugh during a high-level meeting with Secretary Recto on October 24, 2024 in Washington, D.C. The US Department of the Treasury noted that since 2015, it has provided technical assistance to the Bureau of the Treasury (BTr) to help increase the Philippines’ domestic debt market liquidity and resilience. This paved the way for an improved primary dealer system, new liability management instruments, and a modern financial market infrastructure for government securities. Building on this success, both parties are exploring more potential partnerships to improve the country’s fiscal management. This includes the possible collaboration for new debt-for-nature and debt-for-climate arrangements to finance the Philippines’ global climate commitments.
Click the link below to read the full news from the source:
https://www.dof.gov.ph/recto-secures-us-treasury-support-on-strengthening-ph-tax-and-customs-admin-system-to-boost-revenue-generation/
BIR extends tax deadlines for areas hit by ‘Kristine’ to end of October
Business World / Beatriz Marie D. Cruz / October 27, 2024
THE Bureau of Internal Revenue (BIR) has extended until Oct. 31 a few tax deadlines falling on Oct. 25 as a form of relief to taxpayers and BIR personnel affected by Typhoon Kristine. “The BIR is hereby extending the deadline for the filing of tax returns and the payment of taxes due thereon, including submission of certain documents,” it said in a circular dated Oct. 25. “The extension is intended to provide ample time for taxpayers and BIR personnel within the following affected revenue district offices (RDOs) including affected authorized agent banks (AABs), to comply with the statutory tax deadlines.” The extension covers the physical and electronic filing of BIR Form 2550Q (quarterly value-added tax return) and BIR Form 2551Q (quarterly percentage tax return) for the quarter ending Sept. 30. The deadline of the quarterly summary list of sales/purchases/importations by a VAT taxpayer for Non-eFPS (Electronic Filing and Payment System) filers for the quarter ending Sept. 30 was also extended to Oct. 31.
Click the link below to read the full news from the source:
https://www.bworldonline.com/economy/2024/10/27/630841/bir-extends-tax-deadlines-for-areas-hit-by-kristine-to-end-of-october/
BIR seizes illegal cigarettes
Business World / Beatriz Marie D. Cruz/ October 27, 2024
THE Bureau of Internal Revenue (BIR) recently seized illicit cigarettes with a P636.94-million tax liability from a large-scale seller located in central Luzon. In a statement, the bureau noted that the illicit cigarettes were found in a factory disguised as a rest house in Cabanatuan City, Nueva Ecija. Around 15 Chinese nationals were arrested during the raid. “Inside the factory, they discovered illicit cigarettes, machines, fake tax stamps, raw tobacco and other materials used in manufacturing of cigarettes,” the BIR said.
Click the link below to read the full news from the source:
https://www.bworldonline.com/the-nation/2024/10/29/631551/bir-seizes-illegal-cigarettes/
The far-reaching effects of VAT on digital services
Business World / Victor C. De Dios / October 27, 2024
As more countries legislate on the imposition of consumption tax on digital services, the Philippines joins the list with the recent signing of Republic Act No. 12023, commonly known as the VAT on digital services law. The law defines digital service providers (DSPs) as the suppliers of digital services consumed in the Philippines, and sets certain VAT obligations upon them, both resident and non-resident. The far-reaching effects of the new law are to be felt more by non-resident DSPs who are assigned unprecedented VAT responsibilities.
VAT IMPLICATIONS
The following are VAT implications of the new law as far as non-resident DSP transactions are concerned, highlighting what transacting parties should be on the lookout for:
VAT registration. The law requires non-resident DSPs to register with the BIR for VAT purposes if their gross sales for the past three months exceed P3 million or if there are reasonable grounds to believe that their gross sales for the next 12 months will exceed the same threshold.
Invoicing and accounting. The law requires non-resident DSPs to issue VAT invoices for digital services consumed in the Philippines. In any case, the law ensures that a non-resident DSP’s invoice is simplified in terms of contents as compared to mandatory contents of a regular local invoice. A non-resident DSP invoice only needs to reflect the date, transaction reference number, consumer identification, brief description of the transaction, amount, and breakdown of sale price by component if subject to VAT at 12%, VAT zero-rated, or VAT exempt, if necessary.
VAT payment. The law lays down the manner of VAT remittance, which depends on whether the non-resident DSP transacts with a non-VAT consumer or VAT-registered consumer in the Philippines.
Special rule for online marketplaces or e-marketplaces. Online marketplaces may also be required under the law to remit the VAT on behalf of their non-resident sellers, if the online marketplaces are involved in setting the terms and conditions of supply, or are involved in the ordering or delivery of goods.
Recognizing the far-reaching effects of VAT on digital services
For the very first time, a Philippine law calls the attention of non-resident businesses, DSPs in particular, to comply with its VAT requirements such as registration, invoicing, and more importantly, VAT payment. The law even goes on to say that, in case of failure to register and non-compliance, the BIR, through the Department of Information and Communications Technology, can suspend business operations by blocking access to their digital services in the Philippines.
Click the link below to read the full news from the source:
https://www.bworldonline.com/economy/2024/10/27/630839/the-far-reaching-effects-of-vat-on-digital-services/
SEC: Digitalization supports PHL bid to exit ‘gray list’
Business World / Revin Mikhael D. Ochave / October 28, 2024
THE Securities and Exchange Commission (SEC) said its digitalization efforts are being undertaken in support of the Philippines’ bid to exit the Financial Action Task Force’s (FATF) “gray list,” which could happen by next year. “For our part, the SEC will continue investing in digitalizing and optimizing resources to ensure that the reforms we have implemented are sustainable,” SEC Chairman Emilio B. Aquino said in a statement on Monday. “We will also remain unwavering in our dedication to transparency and compliance, as we build on our gains and work alongside local and international partners to further strengthen our anti-money laundering and combating of financing of terrorism (AML/CFT) efforts,” he added.
Click the link below to read the full news from the source:
https://www.bworldonline.com/economy/2024/10/28/631180/sec-digitalization-supports-phl-bid-to-exit-gray-list/
US Treasury to help in tax administration
The Philippine Star / Louise Maureen Simeon / October 28, 2024
MANILA, Philippines — The Philippines has secured support from the US Department of the Treasury to help in the country’s tax administration system and boost revenue collection. Finance Secretary Ralph Recto recently met with US Treasury senior officials to further collaborate on ways that could strengthen the Philippines’ tax and customs processes. The meeting was conducted on the sidelines of the World Bank-International Monetary Fund annual meeting in Washington.
Click the link below to read the full news from the source:
https://www.philstar.com/business/2024/10/28/2395692/us-treasury-help-tax-administration
Raid uncovers P636.9M in unpaid taxes, penalties
Manila Bulletin / Janine Alexis Miguel / October 30, 2024
A RECENT raid on an illicit cigarette manufacturing operation has led to the discovery of an estimated P636.9 million in unpaid taxes and penalties, the Bureau of Internal Revenue (BIR) said on Tuesday. Tax chief Romeo Lumagui Jr. said the raid, conducted in collaboration with the National Bureau of Investigation, was part of a continuing government campaign.
Click the link below to read the full news from the source:
https://www.manilatimes.net/2024/10/30/business/top-business/raid-uncovers-p6369m-in-unpaid-taxes-penalties/1993602
BIR seizes illicit cigarettes with P637 million tax liabilities
The Philippine Star / Louise Maureen Simeon / October 31, 2024
MANILA, Philippines — The trade and sale of illicit cigarettes continue to be a government problem with the Bureau of Internal Revenue (BIR) confiscating P637 million worth of illegal cigarettes. The BIR recently raided a cigarette factory in Cabanatuan City, Nueva Ecija where it discovered illicit cigarettes, machines, fake tax stamps, raw tobacco and other materials used in manufacturing of cigarettes.
Click the link below to read the full news from the source:
https://www.philstar.com/business/2024/10/31/2396460/bir-seizes-illicit-cigarettes-p637-million-tax-liabilities
The EoPT Law: A guide to the classification and reclassification of business taxpayers “Taxwise or Otherwise”
Business World / Caren Ann Marie Bacera / October 30, 2024
Staying compliant with tax regulations can be a daunting task for many entrepreneurs and business owners. With the signing of the Ease of Paying Taxes (EoPT) Law or Republic Act No. 11976, new classifications for business taxpayers have been introduced. This segregated approach not only seeks to streamline tax compliance but also aims to ensure that businesses of all sizes are treated equitably. Whether one is a budding startup or a well-established corporation, understanding these new classifications and how they impact your tax obligations is crucial. In this article, we delve into the specifics of Revenue Memorandum Order (RMO) No. 37-2024, exploring how the Bureau of Internal Revenue (BIR) is leveraging these changes to create a more efficient and fair tax environment for all. RMO No. 37-2024 set forth the criteria in classifying business taxpayers into four categories: Micro, Small, Medium and Large Taxpayers. The classification is determined based on a taxpayer’s gross sales. A Micro Taxpayer is one whose gross sales for a taxable year is less than P3,000,000. A taxpayer is classified as “Small” if its gross sales for a taxable year is at least P3,000,000 but less than P20,000,000, while a Medium Taxpayer is one whose gross sales is at least P20,000,000 but less than P1,000,000,000. Finally, those whose gross sales exceed P1,000,000,000 are classified as Large Taxpayers. After April 27, newly registered taxpayers will be classified according to their declaration in their Registration Forms (BIR Form No. 1901 or 1903). The initial classifications will remain effective until reclassified. Taxpayers can view or inquire about their classification through the BIR’s Online Registration and Update System or ORUS (https://orus.bir.gov.ph/home). To ensure that the tax obligations of businesses accurately reflect their current economic status and gross sales, the RMO provides a reclassification process which can be initiated by either the taxpayer or the BIR. Reclassification requests may be submitted by taxpayers manually to their home Revenue District Office (RDO) or through ORUS together with the required supporting documents. The new classification will take effect upon receipt of notification by the taxpayer from the BIR, subject to the final outcome of any ongoing audit/assessment.
Click the link below to read the full news from the source:
https://www.bworldonline.com/economy/2024/10/30/631866/the-eopt-law-a-guide-to-the-classification-and-reclassification-of-business-taxpayers/
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