10 Notable Personalities under the Revised Corporation Code in Philippines

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By: Garry S. Pagaspas, CPA Revised Corporation Code (RCC) or Republic Act No. 11232 in the Philippines signed into law last February 20, 2019 has introduced major changes in the Corporation Code under Batas Pambansa Bilang 68 in the Philippines and among those are related to personalities and officers. Below is a summary of those in the sequence they appeared in the RCC that you could use as easy reference for dealings with your respective corproations, Securities and Exchange Corporation (SEC), and other related discussions. 1. Incorporators Incorporators in Philippines are the ones who originally form a corporation. Under the Old Corporation Code (OCC) or Batas Pambansa Bilang 68, an incorporator must be natural persons numbering at least 5 but not more than 15, must own at least one (1) share, and majority of which must be residents. This was changed under the Revised Corporation Code (RCC) or Republic Act

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Title XV – Final Provisions

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SECTION 313.  Separability Clause. – If any clause, sentence, paragraph or part of this Code shall be adjudged by any Court of competent jurisdiction to be invalid, such judgement shall not affect, impair or invalidate the remainder of said Code, but shall be confined in its operation to the clause, sentence, paragraph or part thereof directly involved in the controversy. (Re-sectioned by RA 11534)

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Title XIV – Repealing Clause

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SECTION 312.  In General. – All laws, decrees, executive orders, rules and regulations or parts thereof which are contrary to or inconsistent with this Code are hereby repealed, amended or modified according. (Re-sectioned by RA 11534)

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Title XIII, Chapter VI – Transitory and Miscellaneous Provisions

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Sec. 309. Prohibition on Registered Activities. – A qualified registered project or activity under an Investment Promotion Agency administering an economic zone or freeport shall be exclusively conducted or operated within the geographical boundaries of the zone or freeport being administered by the Investment Promotion Agency in which the project or activity is registered: Provided, That a registered business enterprise may conduct or operate more than one qualified registered project or activity within the same zone or freeport under the same Investment Promotion Agency: Provided, further, That any project or activity conducted or performed outside the geographical boundaries of the zone or freeport shall not be entitled to the incentives provided in this Act, unless such project or activity is conducted or operated under another Investment Promotion Agency. Sec. 310. Establishment of One-stop Action Center. – All Investment Promotion Agencies shall establish a one-stop shop or one-stop action center that

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Title XIII, Chapter V – Tax Incentives Management and Transparency

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Sec. 305. Filing of Tax Returns and Submission of Tax Incentives Reports. – All registered business enterprises and other registered entities whether taxable or exempt, are required to file their tax returns and pay their tax liabilities, on or before the deadline as provided under the National Internal Revenue Code of 1997, as amended, using the electronic system for filing and payment of taxes with the Bureau of Internal Revenue: Provided, That for purposes of complying with their tax obligations, cooperatives and other registered entities which do not have access to the electronic facilities shall file with their respective revenue district offices. For registered business enterprises and other registered enterprises availing of tax incentives administered by the investment promotion agencies and other government agencies administering tax incentives, they shall file with their respective Investment Promotion Agencies or other government agencies administering tax incentives a complete annual tax incentives report of

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Title XIII, Chapter IV – Qualified Project Activities for Tax Incentives

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Sec. 300. Strategic Investment Priority Plan –  The Board of investments, in coordination with the Fiscal Incentives Review Board, Investment Promotion Agencies, other government agencies, other government agencies administering tax incentive, and the private sector, shall formulate the Strategic Investment Priority Plan to be submitted to the President for approval, which may contain recommendations for types of non-fiscal support needed to create high-skilled jobs to grow a local pool of enterprises, particularly Micro, Small and Medium Enterprises (MSMEs), that can supply to domestic and global value chains, to increase the sophistication of products and services that are produced and/ or sourced domestically, to expand domestic supply and reduce dependence on imports, and to attract significant foreign capital or investment. The Strategic Investment Priority Plan shall be valid for a period of three (3) years, subject to review and amendment every three (3) years thereafter unless there would be a supervening

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Title XIII, Chapter III – The Fiscal Incentives Review Board

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Sec. 297. Expanded functions of the fiscal incentives review board. – The functions and powers of the Fiscal Incentives Review Board created under Presidential Decree No. 776, as amended, shall be expanded as follows: (A) To exercise policy making and oversight functions on the administration and grant of tax incentives by the investment promotion agencies and other government agencies administering tax incentives. In particular the Fiscal Incentives Review Board shall: (1) Determine the target performance metrics as conditions to avail of tax incentives; (2) Review and audit the compliance of other government agencies administering tax incentives, with respect to the administration and grant of tax incentives and impose sanctions such as, but not limited to, withdrawal, suspension, or cancellation of their power to grant tax incentives: (3) Determine the minimum contiguous land area that vertical economic zones should comply with; (4) Conduct regular monitoring and evaluation of investments and non-investment

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Title XIII, Chapter II – Tax and Duty Incentives

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Sec. 294. Incentives. – Subject to the conditions and period of availment in Sections 295 and 296, respectively, the following types of tax incentives may be granted to registered projects or activities: (A) Income Tax Holiday (ITH); (B) Special Corporate Income Tax (SCIT) rate – for export enterprise, domestic market enterprise with a minimum investment capital of five hundred million pesos (P500,000,000.00), and domestic market enterprise under the strategic investment priority plan engaged in activities that are classified as “critical,” a tax rate equivalent to five percent (5%) effective July 1, 2020, based on the gross income earned, in lieu of all national and local taxes. (Vetoed by the President) The domestic market enterprise under the Strategic Investment Priority Plan engaged in activities that are classified as “critical” shall refer to those enterprises belonging to industries identified by the national economic and development authority to be crucial to national development.

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Title XIII, Chapter I – General Provisions on Tax Incentives

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Title XIII – Tax Incentives Chapter I – General Provisions on tax Incentives Sec. 291. Scope and Coverage. – This Title shall cover all existing Investment Promotion Agencies as defined in this Code or related law unless otherwise specifically exempted from the coverage of this Code. The Investment Promotion Agencies shall maintain their functions and powers as provided under the special laws governing them except to the extend modified by the provisions of this Code: Notwithstanding the provision of this Section, the Department of Finance, the Bureau of Internal Revenue, and the Bureau of Customs shall retain their respective mandates, powers and functions as provided for under this Act and related laws. Sec. 292. Extent of Authority to Grant Tax Incentives. – The Fiscal Incentives Review Board, or the Investment Promotion Agencies, under a delegated authority from the Fiscal Incentives Review Board, shall grant the appropriate tax incentives provided in

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Title XII – Oversight Committee

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SECTION 290.  Congressional Oversight Committee. – A Congressional Oversight Committee, hereinafter referred to as the committee, is hereby constituted in accordance with the provisions of this Code. The Committee shall be composed of the Chairpersons of the Committee on Ways and Means of the Senate and House of Representatives and four (4) additional members from each house, to be designated by the Speaker of the House of Representatives and four (4) additional members from each house, to be designated by the Speaker of the House of Representatives and the Senate President, respectively. The Committee shall, among others, in aid of legislation: (1)        Monitor and ensure the proper implementation of Republic Act No. 8240; (2)        Determine that the power of the Commissioner to compromise and abate is reasonably exercised; (3)        Review the collection performance of the Bureau of Internal Revenue (4)        Review the implementation of the programs of the Bureau of

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