By: Tax and Accounting Center Philippines Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular No. 51-2014 dated 6 June 2014 entitled “Clarifying the Inurement Prohibition under Section 30 of the National Internal Revenue Code of 1997” In relation to the pronouncement of the Supreme Court in the Case of Commissioner of Internal Revenue (CIR) versus St. Lukes Medical Center, Inc. under G.R. No. 195909 and 195960 dated 26 September 2012 the following terms where defined: Non-stock corporation Philippines “Non-stock” means “no part of its income is distributed as dividends to its members, trustees, or officers” and that any profit “obtained as an incident to its operations shall, whenever necessary and proper, be used for the furtherance of the purpose or purposes for which the corporation was organized”. Non-profit corporation Philippines “Non-profit” means that “no net income or asset accrues to or benefits any member or specific person, with all
By: Tax and Accounting Center Philippines A Philippine branch office of a foreign corporation is a form of an operating resident foreign corporation in the Philippines where the legal entity of a foreign corporation is being brought into the Philippines to engage in some activities of its parent company abroad to the extent allowed by laws, rules, and regulations in the Philippines. For the purpose, a foreign corporation is required to secure a License to do Business in the Philippines for its branch office in the country and is allowed to do business in same manner as its head office abroad to some extent. A Philippine branch of a foreign corporation is an income producing entity, and as such, subject to 30% income tax and 12% value added tax on its local sale or zero-rated on its sales abroad other than to its parent company. It is also subject to
By: Tax and Accounting Center Philippines Bureau of Internal Revenue issued Revenue Memorandum Circular No. 40-2014 dated 12 May 2014 entitled “Prescribing the Use of Electronic Certificate Authorizing Registration (BIR Form No. 2313-R For Transactions Involving Transfer of Real Properties and BIR Form No. 2313-P for Transactions Involving Transfers of Personal Properties”. Under BIR Revenue Memorandum Circular No. 40-2014 (RMC 40-14), manual issuance of Certificate Authorizing Registration (CAR) in the Philippines shall be discontinued upon the rollout of Electronic Certificate Authoring Registration (eCAR) System in the Revenue District Offices (RDOs) / Large Taxpayers (LTs) / Audit Division. Hereunder are the features of the new CAR: eCAR Philippines an accountable form eCARs in the Philippines for BIR Form No. 2313-R For Transactions Involving Transfer of Real Properties and BIR Form No. 2313-P for Transactions Involving Transfers of Personal Properties is now treated as an accountable form of the Bureau of Internal Revenue
By: Tax and Accounting Center Philippines As you have noticed, foreign corporations are allowed to do business in the Philippines and deal with all of us in their day-to-day operations. When the worst case scenario comes that their Philippine operations has to terminate and leave the country, the question that could come to our mind is: To whom shall the notices, summonses, and legal processes be served? This question has been answered in at least two instances – requiring resident agent in the Philippines of foreign corporations. In other words, Philippine laws, rules, and regulations provides for the appointment of resident agent as follows: A. Resident Agent under Securities and Exchange Commission Under Section 144 of the Revised Corporation Code of the Philippines, and we quote: “Section 144. Who may be a resident agent. – A resident agent may either be an individual residing in the Philippines or a domestic
A Philippine representative office is form of a resident foreign corporation in the Philippines where the legal entity of a foreign corporation is being issued a License to Do Business in the Philippines to engage in specific administrative activities allowed by law. It is required US$30,000 capitalization, exempted from income and business taxes as it is not allowed operational income, allowed local and expatriate employment, and accordingly enter into legal contracts for its operations in Philippines.
By: Joel Calderon Padoga of JCP Events Stylist When it comes to your decorating budget it really depends on where the ceremony and reception will be on what decorations need to be present as well as what if any; themes that you are choosing. For example, if you are planning an indoor dinner, you have to include centerpieces, etc. The most common decorating choice for weddings and reception are flowers, and streamers. While the streamers and various other decorations are generally inexpensive, the flowers can kill you. It is best when choosing your flowers for a wedding service and reception to use false flowers or paper machete flowers as they are cheap and reusable. For those who would much prefer to use real flowers, it can be much cheaper to go with wild flowers and/or hand picked flowers. It is also a good idea to use them sparingly. For example, rather
By: Tax and Accounting Center Philippines You may have a charitable mind and a big heart having in mind the general welfare of the less privileged and the needy, or you may simply want to operate a non-stock, non-profit entity for a reason or another, this article could be of help. Non-stock and non-profit corporation in the Philippines is one who operates for a not-for-profit undertaking such as charitable institutions, associations, foundations, health organizations, environmental activities, and others in line. It does not issue shares of stocks to stockholders but rather admit members based on established rules in its By-laws. Its operational funds could come from donations, members contributions, and some proceeds from fund raising activities. For tax purposes, it could be exempted from income tax and value added tax on sales based on BIR Ruling issued. It is however subject to withholding taxes on its income payments and compensation,
Implementing the provisions of Section 34(L) of the Tax Code of 1997, as amended by Section 3 of Republic Act No. 9504, Dealing on the Optional Standard Deduction (OSD) Allowed to Individuals and Corporations in Computing their Taxable Income Sec. 1. – Scope Pursuant to Sec .244, in relation to Sec. 3. of Republic Act No. 9504 (RA 9504) amending Sec. 34(L) of the Tax Code of 1997 (Code), as amended, these Regulations are hereby promulgated in order to implement the provisions on Optional Standard Deduction (OSD) fir individuals and corporations. Sec. 2. Persons Covered – The following may be allowed to claim OSD in lieu of the itemized deductions (i.e. items of ordinary and necessary expenses allowed under Sections 34 (A) to (J) and (M), Section 37, other special laws, if applicable): Sec.3. Determination of the amount of Optional Standard Deduction for Individuals. – The OSD allowed to individual
Implementing the Provision on Improperly Accumulated Earnings Tax Under Section 29 of the Tax Code of 1997 Section 1. Scope. – Pursuant to Section 244 of the Tax Code of 1997, in relation to Section 29 of the same Code, these Regulations are being issued to prescribe the rules governing the imposition of Improperly Accumulated Earnings Tax. SEC. 2. Concept of Improperly Accumulated Earnings Tax (IAET) – Pursuant to Section 29 of the Code, there is imposed for each taxable year, in addition to other taxes imposed under Title II of the Tax Code of 1997, a tax equal to 10% of the improperly accumulated taxable income of corporations formed or availed of for the purpose of avoiding the income tax with respect to its shareholders or the shareholders of any other corporation, by permitting the earnings and profits of the corporation to accumulate instead of diving them among or
By: Tax and Accounting Center Philippines Philippines tax system is anchored on “voluntary compliance” where taxes are under “pay-as-you-file” where the taxpayers determines for himself what taxes to pay, when to pay taxes, where to pay taxes, how much to pay, and how to pay taxes in the Philippines. At the end of the day, if the taxpayer fails to pay the tax due, the tax authorities is not powerless to collect the rightful amount of tax. Every failure to pay the tax carries a penalty – criminal liability and/or civil liability. Of course, you would not like it to go prison for violations of the tax rules and regulations in the Philippines. Meantime, let us take some civil penalties for failure to pay the tax in the Philippines. 1. Surcharge of 25% or 50% of basic tax Under Section 248 of the Tax Code, there shall be imposed, in
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