By: Cecile Maglunob-Pagaspas, CPA Freelancing business is the latest trend especially for digital professionals. The unique setting of this career is indeed promising especially for those who enjoy working for their passion at their own pace. It is however commonly observed that many digital freelancers in the Philippines hide their business or let go the good opportunities due to fear of being caught by the tax authorities while operating without legal documents. Getting Legitimate Many digital freelancers are starting their work through an informal contract with clients. This is totally fine especially on the initial stage of the venture. Staying on the same career path in the long run however will require a complete paper to show one’s business legitimacy. In getting legit, digital freelancers can either register in the Department Trade of Industry (DTI) as Sole Proprietor or Securities and Exchange Commission (SEC) as a corporation. For digital freelancers
This revenue regulation prescribes to implement RA No. 8924 relative to the imposition of the Minimum Corporate Income Tax (MCIT) on domestic corporations and resident foreign corporations. Specifically, an MCIT of 2% of the gross income as of the end of the taxable year is imposed upon any domestic corporation commenced its business operations. The MCIT will be imposed whenever such operation has zero or negative taxable income or whenever the amount of MCIT is greater than the normal income tax due from such operation. In case of a domestic corporation whose operation or activities are partly covered by the regular income tax system and partly covered under a special income tax system, the MCIT will apply on operations covered by the regular income tax system. The Regulations will apply to domestic and resident foreign corporation on their aforementioned taxable income derived beginning January 1, 1998 pursuant to the pertinent
By: Garry Pagaspas, CPA As we are all aware, Republic Act No. 11534 (RA 11534) or Corporate Recovery and Tax Incentives for Enterprises (CREATE) in Philippines has been signed into law last March 26, 2021 with Vetoed Provisions and became effective last April 11, 2021. One notable aspect of RA 11534 CREATE Philippines is the rationalization of incentives thereby harmonizing the available tax incentives that Investment Promotion Agencies could grant (e.g. income tax holiday (ITH), enhanced deductions (ED), and 5% special corporate income tax (SCIT) among others), creating a new set of standards for those who can avail in certain locations throughout the Philippines. Under this, the question is how would RA 11534 CREATE Philippines affect the tax incentives of existing registered business enterprises (RBE) with the fourteen (14) Investment Promotion Agencies (IPA) such as Philippine Economic Zones Authority (PEZA) and Board of Investments (BOI)? To address the above question,
March 26, 2021 THE HONORABLE SPEAKER AND THE LADIES AND GENTLEMEN OF THE HOUSE OF REPRESENTATIVES In accordance with my firm commitment to uplift the lives of the Filipino people and pave the path for economic recovery and inclusive growth, I sign into law Republic Act (RA) No. 11534, entitled “ AN ACT REFORMING THE CORPORATE INCOME TAX AND INCENTIVES SYSTEM, AMENDING FOR THE PURPOSE SECTIONS 20, 22, 25, 27, 28, 29, 34, 40 57, 109, 116, 204 QND 290 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND CREATING THEREIN NEW TITLE XIII, AND FOR OTHER PURPOSES,” or the “ Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act”. I.GENERAL COMMENTS After more than twenty years of deliberations on the countless versions filed in Congress, corporate income tax reform and fiscal incentives rationalization has finally come to fruition. It comes at an opportune time, since it will
By: Hergie Anne C. De Guzman, CPA The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 29-2021 for the adoption of the electronic signatures (e-Signatures) in the following BIR Forms or Certificates: BIR Form 2304 or Certificate of Income Payment Not Subject to Withholding Tax (Excluding Compensation Income) BIR Form 2306 or Certificate of Final Tax Withheld at Source BIR Form 2307 or Certificate of Creditable Tax Withheld at Source BIR Form 2316 or Certificate of Compensation Payment / Tax Withheld For Compensation Payment With or Without Tax Withheld BIR was already eyeing on this adoption since the issuance of RMC No. 121-2019 which prescribes the use of certain BIR Forms/Certificate in electronic format. E-signature is defined in Section 5 of Republic Act No. 8792 or the Electronic Commerce Law of 2000 as any distinctive mark, characteristic and/or sound in electronic form, representing the identity of a
By: Seala Marie Asis, CPA The SEC released on February 19, 2020 the update of the newly developed Online Submission Tool (OST) to be used for filing of financial statements and reports in digital format to automate business transactions and promote sustainable business practices. This online platform will be rolled out in this year’s filing season where corporations can file their AFS, GIS, Sworn Statement for Foundation (SSF), General Form for Financial Statements (GFFS), and Special Form for Financial Statements (SFFS). Accordingly, the OST will accept on its initial implementation stage the submission of Affidavit of Non-Operatin (ANO), together with their GIS or AFS, and affidavit of Non-Holding of Annual Meeting (ANHAM), together with the GIS. This online platform operationalizes Section 180 of the Revised Corporation Code mandating the SEC to develop and implement an electronic filing and monitoring system and in consistency with the RA 11032 requiring government agencies
Relative to the Resolution No. 97 Series of 2021 issued by the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-MEID), the Philippine Bureau of Immigration (BI) has issued a revised guideline last January 30, 2021 effective starting February 01, 2021. The Ph BI Revised Travel Restriction Guidelines, among others, updated and lifted the travel restrictions imposed on those coming from 36 countries on Covid-19 new variant threat, and starting February 01, 2021, allowed entry of certain foreign nationals, expatriates, and Philippines visa holders.
By: Deeryl Jade Bantilan Under the Republic Act No. 562 otherwise known as Alien Registration Act of 1950, registered aliens and holders of Alien Certificate of Registration – Identification Card (ACR I-card) are required to report in person with the Bureau of Immigration (BI) in Philippines not later than within first sixty (60) days of the calendar year. On December 07, Bureau of Immigration (BI) issued an advisory requiring all Aliens with Immigrant and Non-immigrant visas to report in person to the BI Main Office at Intramuros, Manila or to the nearest participating BI field, satellite, or extension office within the first sixty (60) days of every calendar year or from January 2021 until March 2021. For aliens below fourteen (14) years old, their respective parent or legal guardian must initiate the reporting while Senior citizens and persons with disability (PWD) are exempted from personal appearance and may file through a
By: Garry S. Pagaspas, CPA Court of Tax Appeals (CTA) in Philippines, under Republic Act No. 1125, as amended (e.g. by Republic Act No. 9282) is the tax court in the Philippines handling cases on disputed assessments from electronic letters of authority, tax refunds such as on excess input VAT from zero-rating in Philippines filed by the taxpayer as petitioner. Under the Revised Rules of the Court of Tax Appeals (A.M. No. 05-11-07-CTA dated 22 November 2005 or RRCTA), Rule 13 – Trial by Commissioner, appointment of Independent Certified Public Accountant is allowed, and hereunder quoted: “Rule 13 – Trial by Commissioner Section 1. Appointment of Independent Certified Public Accountant (ICPA). – A party desiring to present voluminous documents in evidence before the Court may secure the services of an independent Certified Public Accountant (CPA) at its own expense. The Court shall commission the latter as an officer of the
By: Garry S. Pagaspas, CPA. December 14, 2020 In dealing with the COVID-19 Pandemic, the Philippine legislature passed into law Republic Act No. 11469, otherwise known as “Bayanihan To Heal As One Act” and along with other matters contained therein are tax rules and implications in related dealings. Below are 10 new notable tax rules in the Philippines under COVID-19 Pandemic based on recent issuances (e.g. Revenue Regulations (RR), Revenue Memorandum Circulars (RMC), and Revenue Memorandum Orders (RMO) of the Bureau of Internal Revenue (BIR): 1. Filing extensions under various BIR issuances (RR Nos. 7/8/10/11/12-2020) With the imposition of quarantine since mid-March 2020, work in private and government offices were suspended and mobility was limited prompting the BIR to come up with issuances extending filing deadlines during quarantine. These extensions during the quarantine period cover periodic tax returns and reports filings in Philippines – monthly and quarterly; filing of time-bound
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