INSIGHTS is a monthly publication of BDB LAW to inform, update and provide perspectives to our clients and readers on significant tax-related court decisions and regulatory issuances (includes BIR, SEC, BSP, and various government agencies).

DISCLAIMER: The contents of this Insights are summaries of selected issuances from various government agencies, Court decisions, and articles written by our experts. They are intended for guidance only and as such should not be regarded as a substitute for professional advice.

Copyright © 2023 by Du-Baladad and Associates (BDB Law). All rights reserved. No part of this issue covered by this copyright may be produced and/or used in any form or by any means – graphic, electronic, and mechanical without the written permission of the publisher.

The input tax attributable to zero-rated sales may, at the option of the VAT-registered taxpayer, be: (1) charged against output tax from regular 12% VATable sales, and any unutilized or "excess" input tax may be claimed for refund or the issuance of tax credit certificate; or (2) claimed for refund or tax credit in its entirety.

In the taxpayer’s claim for refund of excess or unutilized input VAT attributable to zero-rated sales, the CTA charged the substantiated and validated input taxes against the output taxes, and only after finding that there existed excess input taxes from the output taxes did the CTA conclude that the taxpayer might be entitled to a refund.

The Supreme Court partially granted the refund. The input tax attributable to zero-rated sales may, at the option of the VAT-registered taxpayer, be: (1) charged against output tax from regular 12% VATable sales, and any unutilized or "excess" input tax may be claimed for refund or the issuance of tax credit certificate; or (2) claimed for refund or tax credit in its entirety. It must be stressed that the remedies of charging the input tax against the output tax and applying for a refund or tax credit are alternative and cumulative.

The law and rules are clear and need no interpretation. The taxpayer only needs to prove non-application or non-charging of the input VAT subject of the claim. There is nothing in the law and rules that mandate the taxpayer to deduct the input tax attributable to zero-rated sales from the output tax from regular twelve percent (12%) VAT-able sales first and only the "excess" may be refunded or issued a tax credit certificate. (Chevron Holdings, Inc. v. Commissioner of Internal Revenue, G.R. No. 215159, July 5, 2022)

Only the revenue officers actually named under the LOA are authorized to examine the taxpayer.

The taxpayer argues that the assessment of the BIR was invalid as the Revenue Officer (RO) who actually examined the taxpayer’s books of accounts and other accounting records is not among the ROs authorized under the LOA. The BIR argues that the RO is authorized under an alleged MOA to continue the assessment.

The Court ruled and as held by the SC held in CIR v. Opulent Landowners, Inc., only the revenue officers actually named under the LOA are authorized to examine the taxpayer. In the absence of a new LOA issued in favor of the revenue officers who recommended the issuance of the deficiency tax assessments against the respondent, the resulting assessments are void.

As things so stand, considering that the RO is not named in the LOA and is thus not authorized to conduct such investigation, the resulting assessment against the taxpayer is inescapably void. Well-entrenched are the principles that in the absence of such an authority, the assessment or examination is a nullity and a void assessment bears no fruit. (Ma. Erlinda T. Ong v. Commissioner of Internal Revenue, CTA Case No. 10100, January 16, 2023)

Failure to strictly comply with the notice requirements prescribed under Section 228 of the NIRC of 1997, as amended, and RR No. 12-99 is tantamount to denial of due process.

On January 10, 2013, the taxpayer received the PAN dated December 28, 2012. On January 15, 2013, the taxpayer received the FAN and FLD issued on the same date. On January 25, 2013, the taxpayer filed its Reply to the PAN. Hence, the taxpayer argues that it is a violation of due process when the FAN and FLD were issued prior to the lapse of 15 days from its receipt of the PAN. The CIR argues that the 15-day period is reckoned from the date of issuance of the PAN and not the receipt of the taxpayer.

The Court ruled in favor of the taxpayer and found that the FAN and FLD were prematurely issued and received by the taxpayer on January 15, 2013, or five days after the taxpayer received the PAN. The CIR, in failing to await the lapse of the 15-day period, correspondingly disregarded the mandatory due process requirement laid down under RR No. 12-99. It is well-settled that failure to strictly comply with the notice requirements prescribed under Section 228 of the NIRC of 1997, as amended, and RR No. 12-99 is tantamount to the denial of due process. As a result, the assessments issued in this case are void, and all the proceedings and orders emanating from there are likewise void. As a rule, a void assessment bears no valid fruit. (Commissioner of Internal Revenue v. Jollibee Worldwide Pte., Ltd., CTA EB No. 2447 (CTA Case No. 9005), January 10, 2023)

The date of delivery of pleadings to a private-letter forwarding agency is not to be considered as the date of filing in court.

This is a Motion for Reconsideration (MR) filed by the BIR assailing the Decision of the CTA which ruled in favor of the taxpayer.

The BIR received the assailed Decision on September 30, 2022. Counting fifteen (15) days therefrom, he had until October 17,2022 to file his MR thereto. However, the BIR sent his MR through private courier on October 17, 2022. Said private courier delivered and the CTA received such motion on October18, 20222.

In denying the MR, the Court ruled that the date of delivery of pleadings to a private letter-forwarding agency is not to be considered as the date of filing thereof in court. In such cases, the date of actual receipt by the court, and not the date of delivery to the private courier, is deemed the date of filing of that pleading. As such, the BIR belatedly filed such MR on October 118, 2022 leading to the finality of the assailed Decision. (Ritegroup Incorporated vs Commissioner of Internal Revenue, CTA Case No. 9708, January 9,2023)

As regards the sale to PEZA registered entities, it is also required that the Sales Invoice and Official Receipts must be duly registered pursuant to Section 237 and 238 of the Tax Code.

The lone issue, in this case, is whether the taxpayer is entitled to its claim for refund or issuance of a Tax Credit Certificate (TCC) for the total amount of Ten Million Two Hundred Eighty-Two Thousand Five and 99/100 Pesos (₱10,282,005.99), representing taxpayer’s excess and unutilized input VAT on its local purchases of goods and services and importations attributable to its zero-rated sales.

The Court ruled that in filing a claim for the refund or issuance of a tax credit certificate for input taxes, a taxpayer is required to prove its compliance with Section 112(A) and (C) of the Tax Code, as amended. As regards the sale to PEZA registered entities, it is also required that the Sales Invoice and Official Receipts must be duly registered pursuant to Sections 237 and 238 of the Tax Code. Here, the sales to PEZA-registered entities were partially granted as zero-rated sales because of violation of Invoicing Requirements and the lack of supporting documents as required under Sections 237 and 238 of the Tax Code. (Schaeffler Philippines, Inc. vs. Commissioner of Internal Revenue, CTA Case No. 10197, January 9, 2023)

Taxpayer’s income from casino gaming operations pursuant to the Junket Agreements with PAGCOR is not subject to corporate income tax.

The taxpayer argues that the income from junket gaming operations is properly classified as income from casino operations which falls under Section 13(2) of P.D. No. 1869, as amended, and is exempt from corporate income tax. It insists that it is a PAGCOR licensee/contractee by virtue of the Junket Agreement where it was granted authority to conduct junket and e-junket gaming operations at PAGCOR’s Casino Filipino-Midas. As such, it claims that it is entitled to a refund or issuance of a tax credit certificate representing erroneously, wrongfully, illegally, or excessively paid corporate income tax on e-junket gaming revenues for the taxable year 2015.

In ruling in favor of the taxpayer, the Court ruled that its income from casino gaming operations pursuant to the Junket Agreements with PAGCOR is not subject to corporate income tax as it is classified as “income derived from gaming operations” pursuant to Section 13(2) of the PAGCOR Charter. (Prime Investment Korea, Inc. vs. Commissioner of Internal Revenue, CTA EB No. 2483, January 9, 2023)

A corporation that has excess income tax payments in a given taxable year has two (2) options: (1) to carry over the excess amount to the succeeding taxable quarters/years until fully utilized; or (2) to file a claim for a tax refund in the form of cash or tax credit certificate.

A taxpayer opted to refund its income tax overpayment by marking the box corresponding to the said choice in the Annual Income Tax Return. Thereafter, the taxpayer filed with BIR a Letter requesting the refund or issuance of a tax credit certificate for its alleged excess and unutilized creditable taxes withheld. Alleging inaction, the taxpayer then elevated its claim before the Court of Tax Appeals (CTA) via a Petition for Review (Petition).

The CTA ruled that the taxpayer is entitled to its claim for refund. Citing Section 76 of the NIRC of 1997, as amended, the CTA laid down that a corporation that has excess income tax payments in a given taxable year has two (2) options: (1) to carry over the excess amount to the succeeding taxable quarters/years until fully utilized; or (2) to file a claim for a tax refund in the form of cash or tax credit certificate. However, once the carry-over option is taken actually or constructively, it becomes irrevocable for that taxable period. The phrase "for that taxable period" refers to the taxable year when the excess income tax, subject of the option, was acquired by the taxpayer. Here, the taxpayer marked the box corresponding to the option "To be refunded," clearly manifesting its intention to claim a refund of its excess CWTs for the period. (Service Resources Inc. vs. Commissioner of Internal Revenue, CTA Case No. 10158, January 9, 2023)

A taxpayer need not wait for the lapse of the 120-day period before it could seek judicial relief with the CTA by way of a Petition for Review if the judicial claim was filed within the period December 10, 2003 up to October 6, 2010.

A taxpayer filed an administrative claim for refund on its input value-added taxes attributable to its zero-rated sales with the Bureau of Internal Revenue (BIR). Nine (9) days after filing the administrative claim for refund, a taxpayer filed its Petition for Review before the Court of Tax Appeals (CTA). In the CIR’s Motion for Reconsideration, among the issues raised was that the taxpayer’s judicial claim was prematurely filed considering that the taxpayer had only given the CIR nine (9) days to evaluate its administrative claim and it did not observe the 120-day plus 30-day mandatory period as provided under Section 112(D) of the NIRC of 1997, as amended.

The CTA upheld its Decision and ruled that the taxpayer need not observe that 120-day mandatory period before it could file a judicial appeal with the CTA. In Kepco Ilijan Corporation v. Commissioner of Internal Revenue (2018 KEILCO case), the Supreme Court allowed the premature filing of KEILCO's judicial claim. The Supreme Court clarified that KEILCO need not wait for the lapse of the 120-day period before it could seek judicial relief with the CTA by way of a Petition for Review because the judicial claim was filed within the period December 10, 2003 up to October 6, 2010.

During this period, the existing interpretation laid down in BIR Ruling No. DA-489-03 is that a taxpayer need not wait for the expiration of the 120-day period before it could seek judicial relief with the CTA. It was only on December 6, 2010, when the Supreme Court ruled in Aichi that the 120+30-day period under Section 112(D) of the NIRC of 1997, as amended is mandatory and jurisdictional.

Here, this case is just a continuation of the 2018 KEILCO case. Specifically, the Supreme Court remanded the case to this Court for further proceedings on KEILCO' s claim for refund of its excess and unutilized input VAT for the second, third, and fourth quarters of TY 2002 (Commissioner of Internal Revenue vs. Kepco Corporation, CTA EB No. 2475 (CTA Case No. 6966), January 9, 2023)

All criminal actions before the CTA in Division in the exercise of its original jurisdiction shall be instituted by the filing of an Information.

On January 25, 2017, the taxpayers received the FLD dated January 23, 2017. No Protest was filed by the taxpayers. Hence, a Joint Complaint Affidavit was filed on December 18, 2019 with the DOJ. Thereafter, an Information was filed on December 2, 2022 with the CTA.

The Court dismissed the case on the ground of prescription. Section 2, Rule 9 of the RRCTA provides that all criminal actions before the Court in Division in the exercise of its original jurisdiction shall be instituted by the filing of an information and further states that the institution of the criminal action shall interrupt the running of the period of prescription.

Here, as claimed by the BIR in its Joint Complaint Affidavit, the Formal Letter of Demand (FLD) dated January 23, 2017 covering the taxable year 2013 was served to accused through registered mail on January 25, 2017 as evidenced by Registry Return Receipt of the Philippine Postal Corporation. There being no administrative protest filed within thirty (30) days from receipt thereof, said assessment attained finality on February 25, 2017. Sans payment thereof by accused, the tax offense, in this case, was committed on February 25, 2017.

Counting from February 25, 2017, the 5-year prescriptive period to indict the taxpayer for failure to pay tax lapsed on February 25, 2022. Thus, the right of the government to institute the case against accused had already prescribed when the Information was filed before this Court on December 2, 2022. The failure of the prosecution to timely file the Information in Court, within the 5-year prescriptive period renders the present case dismissible on the ground of prescription. (People of the Philippines v. Emmanuel Delos Santos, et al., CTA Crim. Case. 0-970, January 25, 2023)

The filing of a motion for reconsideration of the undated FDDA with the CIR did not toll the 30-day period within which to appeal the undated FDDA to the CTA.

On June 30, 2016, the taxpayer received an undated FDDA signed by the CIR. On July 28, 2016, the taxpayer filed with the CIR a Request for Reconsideration (to the FDDA). The taxpayer received on August 7, 2018, an undated letter from the CIR denying the Request for Reinvestigation. On September 5, 2018, the taxpayer filed a Petition for Review with the CTA, appealing the undated letter it received on August 7, 2018.

The Court dismissed the case for lack of jurisdiction. Considering that the taxpayer received the undated FDDA on June 30, 2016, the taxpayer should have filed its appeal with the CTA within 30 days from its receipt or on or before July 30, 2016. The petition was filed only on September 5, 2018; thus, the same was clearly filed beyond the 30-day reglementary period. The filing of a motion for reconsideration of the undated FDDA on July 28, 2016, with the CIR did not toll the 30-day period within which to appeal the undated FDDA to the CTA. The failure to perfect an appeal as required by the rules has the effect of defeating the right to appeal of a party and precluding the appellate court from acquiring jurisdiction over the case. (Elta Industries, Inc. v. Commissioner of Internal Revenue, CTA Case No. 9922, January 23, 2023)

The remedy of filing a separate appeal before the Commissioner of Customs also gives the Commissioner of Customs the opportunity to review the facts of the case anew and examine the supporting documents directly filed to him, as opposed to merely reviewing the District Collector's Decision.

The taxpayer, through its customs brokers, filed a Letter-Appeal with the District Collector requesting to lift the Decrees of Abandonment. The District Collector denied the Letter-Appeal, which was affirmed by the Commissioner of Customs (COC) in a Consolidated Order. On May 2, 2019, the taxpayer received the Consolidated Order. On May 21, 2019, the taxpayer filed a Petition for Review with the CTA.

The Court dismissed the petition for lack of jurisdiction. Instead of filing an appeal before the COC on or before May 17, 2019, the taxpayer opted to file an appeal directly to the CTA. The remedy of filing a separate appeal before the Commissioner of Customs is not only meant to afford the taxpayer-importer another opportunity to ventilate its causes and defenses in the abandonment proceedings (by setting forth new/specific arguments/grounds not raised in and arguments that were simply glossed over, overlooked and/or not treated at all in the appealed decision) but also to give the Commissioner of Customs the opportunity to review the facts of the case anew and examine the supporting documents directly filed to him, as opposed to merely reviewing the District Collector's Decision. (Victor R. Del Rosario Rice Mill Corporation v. Commissioner of Customs, CTA Case No. 10082, January 20, 2023)

Section 7(a)(2) of RA 9282 also covers “other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal.” CTA has jurisdiction to rule on the validity of the subject Warrant of Garnishments (WOGs).

There are two issues in this case, first is whether the Court has jurisdiction to rule on the validity of the subject Warrant of Garnishments (WOGs); and second, if the answer to the first issue is in the affirmative, whether the instant Petition for Review was timely filed.

The Court ruled that the Court of Tax Appeal’s (CTA’s) appellate jurisdiction is not limited to cases involving decisions of the Commissioner of Internal Revenue (CIR) on matters relating to assessments or refunds. Section 7(a)(2) of RA 9282 also covers “other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue”.

As such, the Court has jurisdiction to rule on the validity of the subject Warrant of Garnishments (WOGs). (Country Bank, Rural Bank of Bongabong, Inc. vs. Bureau of Internal Revenue, CTA Case No. 10864, January 31, 2023)

Revenue Regulations No. 1-2023  – 
Implements the Ten Percent (10%) Discount and the VAT Exemption under RA No. 11861 (Expanded Solo Parents Welfare Act)

Revenue Regulations No. 1-2023 issued on January 18, 2023 implements the ten percent (10%) discount and the Value-Added Tax (VAT) exemption under Republic Act (RA) No. 11861 (Expanded Solo Parents Welfare Act), to wit:

a. Solo parents that meet all of the following conditions shall qualify for the 10% discount and VAT exemption:

• Solo Parent has a child/children (as defined in RA No. 11861) with the age of six (6) years or under; and
• Solo Parent is earning less than ₱ 250,000.00 annually.

b. The 10% discount and VAT exemption shall apply to a qualified Solo Parent's purchase of the following goods identified in the Act from drug stores, pharmacies, grocery stores, and similar establishments, and subject to the guidelines that shall be issued by the Department of Health, in coordination with the Food and Drug Administration, PhilHeaIth, and the Department of Interior and Local Government:

• Baby's milk;
• Food supplements and Micronutrient supplements;
• Sanitary diapers;
• Medicines;
• Vaccines; and
• Other medical supplements.

Revenue Memorandum Order No. 2-2023
CY 2023 Operational Key Performance Indicators for the
Revenue Regions, Large Taxpayers Service and Revenue District Offices.

Revenue Memorandum Order No. 2-2023 issued on January 10, 2023, prescribes the CY 2023 Operational Key Performance Indicators (KPIs) for the Revenue Regions (RRs), Large Taxpayers Service (LTS) and Revenue District Offices (RDOs).

The details of the eighteen (18) Operational KPIs are specified in Annex A of the Order. The Assistant Commissioner (ACIR), who is the Measure Owner of a particular KPI of his/her concerned offices, shall monitor, review, evaluate and
assess the KPI accomplishments/performance of RRs, LTS and RDOs vis-à-vis the target of the said offices.

Revenue Memorandum Order No. 4-2023
Amends RMO No. 14-2015 relative to the new composition of the Committee to Supervise the Printing of Specialized Accountable Forms in the National Office.

Revenue Memorandum Order No. 4-2023 issued on January 27, 2023 amends Revenue Memorandum Order No. 14-2015, defining the new composition of the Committee to Supervise the Printing of Specialized Accountable Forms in the National Office, as follows:

• Chairperson - Assistant Commissioner Administrative Service or his/her authorized representative
• Vice-Chairperson - Chief, Accounting Division or his/her authorized representative
• Member - Chief, Accountable Forms Division or his/her authorized representative
• Member - Chief, Taxpayer Service Programs & Monitoring Division or his/her authorized representative
• Witness - Resident COA Auditor or his/her authorized representative

Revenue Memorandum Circular No. 1-2023
Announces the availability of the Interactive BIR Citizen’s Charter.

Revenue Memorandum Circular No. 1-2023 issued on January 3, 2023, announces the availability of the Interactive BIR Citizen's Charter in the BIR Website (www.bir.gov.ph), which can be accessed under the Quick Links and BIR Transparency Seal sections.

By making the BIR Citizen’s Charter interactive, navigation and access to its contents are made easier on the part of the taxpayers/other users and, at the same time, updating of its contents is also made easier on the part of the BIR Content Owners.

A Revenue Memorandum Order shall be issued to prescribe the policies and responsibilities of identified BIR offices (Content Owners) to implement the regular updating of information posted in the Interactive BIR Citizen's Charter.

Revenue Memorandum Circular No. 3-2023
Prescribes the policies and guidelines on the Online Registration of Books of Accounts.

All books of accounts shall be registered online with the Bureau's Online Registration and Update System (ORUS). Instead of the manual stamping of books of accounts, a Quick Response (QR) Code shall be generated, which can be validated online.

The manners of bookkeeping or maintaining of books of accounts are summarized as follows:

For New Business Registrants

Type of Books of Accounts	Deadline for Registration	Frequency
Manual Books of Accounts	Before the deadline for filing of the initial quarterly Income Tax return or the annual Income Tax return, whichever comes earlier	Before the full consumption of the pages of the previously registered books

 

 For Existing Business Taxpayers or Subsequent Registration

Type of Books of Accounts	Deadline for Registration	Frequency
Manual Books of Accounts	Before use of the books	Before the full consumption of the pages of the previously registered books
Permanently Bound Loose leaf Books of Accounts	Within fifteen (15) days after the end of each taxable year or within 15 days from the closure of business operations, whichever comes earlier, unless extended by the Commissioner or his duly authorized representative, upon request of the taxpayer before the lapse of the said period.	Annually
Computerized Books of Accounts	Within thirty (30) days from the close of each taxable year or within 30 days from the closure of operations, whichever comes earlier, unless extended by the Commissioner or his duly authorized representative, upon request of the taxpayer before the lapse of the said period.	Annually

 

New sets of manual books of accounts (BAs) are not required to be registered every year. However, taxpayers may opt to use new set of books of accounts yearly. Hence, new sets of manual BAs shall be registered before its use.

Revenue Memorandum Circular No. 5-2023
Provides transitory provisions for the implementation of the Quarterly filing of VAT Returns starting January 1, 20,2,3 pursuant to Section 114(A) of the Tax Code of 1997, as amended by RA No. 10963 (TRAIN Law).

Revenue Memorandum Circular No. 5-2023 issued on January 13, 2023, provides the Transitory Provisions for the implementation of the quarterly filing of VAT Returns starting January 1, 2023, pursuant to Section 114(A) of the National Internal Revenue Code of 1997, as amended by Republic Act No. 10963 (TRAIN Law).

VAT-registered taxpayers are no longer required to file the Monthly Value-Added Tax Declaration (BIR Form No. 2550M) for transactions starting January 1, 2023 but will instead file the corresponding Quarterly Value-Added Tax Return (BIR Form No. 2550Q) within twenty-five (25) days following the close of each taxable quarter when the transaction transpired.

In order to avoid confusion during the initial implementation, particularly for taxpayers that are under the fiscal period of accounting, the following Transitory Provisions are provided:

Quarter Ending	Transactions Covering the Month of			Filing of 2550Q for the Quarter Ending
	December 2022	January 2023	February 2023	December 2022	January 2023	February 2023
January 31, 2023	Required to file 2550M not later than January 20, 2023	Not applicable	Not Required to File 2550M	Not applicable	Required to file 2550Q not later than February 27, 2023*	Not applicable
February 28, 2023	Required to file 2550M not later than January 20, 2023	Not Required to File 2550M	Not applicable	Not applicable	Not applicable	Required to file 2550Q not later than March 27, 2023*
March 31, 2023	Not applicable	Not Required to File 2550M	Not Required to File 2550M	Required to file 2550Q not later than January 25, 2023	Not applicable	Not applicable

 

Revenue Memorandum Circular No. 7-2023
Provides clarifiation on the Return Processing System (RPS) Assessment being issued by the BIR.

Revenue Memorandum Circular No. 7-2023 issued on January 17, 2023 clarifies the Return Processing System (RPS) Assessment being issued by the BIR.

The "RPS Assessment” is a Collection Letter and sending of which is part of the
civil/administrative remedies of the BIR. Its contents are not tax assessments arising from the conduct of audit/investigation of taxpayer's books of accounts and other relevant records. These are tax payables based on taxpayer's own tax declaration as reflected in the tax returns filed.

The moment the taxpayer failed to pay the declared tax payable in the tax return within the prescribed due date, the BIR considers it already as "delinquent account" pursuant to Revenue Memorandum Order No. 11-2014. To effect collection thereof, the Bureau can both enforce civil and criminal actions as provided under Section 205 of the Tax Code, as amended.

The sending of "RPS Assessment" should not be likened to and is not an Assessment Notice arising from audit where taxpayer has the chance to contest or protest. Considering that no books of accounts and accounting records of taxpayer are to be examined or subjected to audit, the issuance of Letter of Authority shall not be required.

Revenue Memorandum Circular No. 9-2023
Announces the availability of revised BIR Form Nos. 1606 and 1706 version January 2018.

Revenue Memorandum Circular No. 9-2023 issued on January 26, 2023 announces the availability of the following BIR Forms, which were revised due to the implementation of the Tax Reform for Acceleration and Inclusion Law:

Form No.	Description
1606	Withholding Tax Remittance Return [For Onerous Transfer of Real Property Other Than Capital Asset (Including Taxable and Exempt)]
1706	Capital Gains Tax Return (For Onerous Transfer of Real Property Classified as Capital Asset-both Taxable and Exempt)

 

The revised manual returns are already available in the BIR website (www.bir.gov.ph) under the following section:

Form No.	Description
1606	BIR Forms-Payment/Remittance Forms
1706	BIR Forms-Income Tax Return

 

However, the forms are not yet available in the Electronic Bureau of Internal Revenue Forms (eBIRForms); thus, manual and eBIRForms filers shall download and print the PDF version of the forms and fill-out completely all the applicable fields, otherwise, said filers shall be subjected to penalties under Section 250 of the Tax Code, as amended.

Revenue Memorandum Circular No. 11-2023
Enjoins all BIR officials and employees to participate in the celebration of the BIR Data Privacy Month.

Revenue Memorandum Circular No. 11-2023 issued on January 27, 2023 enjoins all BIR officials and employees to participate in the celebration of the BIR Data Privacy Month, with the theme "Collect What We Need, Protect What We Collect".

Revenue Memorandum Circular No. 13-2023
Circularizes GSIS Policy and Procedural Guidelines No. 317-17, titled "Prescriptive Period for Social Insurance Benefits".

Revenue Memorandum Circular No. 13-2023 issued on January 31, 2023 circularizes Government Service Insurance System (GSIS) Policy and Procedural Guidelines No. 317-17, titled “Prescriptive Period for Social Insurance Benefits”.

In the said Guidelines, the GSIS stipulated the policies and procedures for the uniform implementation of the prescriptive period of different types of claims administered by them.

SEC OGC Opinion No. 22-16 dated October 28, 2022, and published on January 18, 2023
In the absence of a board resolution, a President of a holding corporation has no inherent authority to vote in a stockholder’s meeting of its subsidiary.

This addresses the following matters:

1. Whether or not the President has an inherent authority to vote the shares of the holding corporation in a stockholder’s meeting of the subsidiary corporation:
2. Whether or not a special power of authority or a written proxy, in the form of a certified board resolution, is mandatory before the President can vote the shares in the name of the holding corporation in a stockholder’s meeting of the subsidiary corporation; and
3. Whether the doctrine of apparent authority can be used as a legal basis to support the President’s action of voting the shares of the holding corporation in the subsidiary corporation.

As to the first issue, a corporate President has no inherent authority to vote the shares of the holding corporation in a stockholder’s meeting of the subsidiary corporation. It is emphasized that a holding corporation has a separate corporate existence and is to be treated as a separate entity which holds stocks in other companies for purposes of control rather than for mere investment. Pursuant to the Revised Corporation Code of the Philippines (RCCP), a corporation exercises its powers and transacts its business through the board of directors or trustees. Hence, the corporate officer and other agents of the corporation cannot act for the corporation unless authorized by the Board through board resolution expressly authorizing the agents or by the By-Laws. Further, while the RCCP provides for several powers vested in the President, these powers do not include the power to vote which is an act of strict dominion that should be exercised by the share owner. Hence, the President has no inherent authority.

With regard to the second issue, as discussed above, the corporate President can vote the shares in the name of the holding corporation in a stockholder’s meeting of the subsidiary corporation when he or she is authorized by the board of directors through a board resolution.

Lastly, the doctrine of apparent authority can be used as legal basis. It is a rule that the authority of the board of directors to delegate corporate powers may either be actual or apparent. Where similar acts have been approved by the board of directors as a matter of general practice, custom, and policy, a corporate officer may bind the company without formal authorization of the board of directors. The existence of such authority is established, by proof the course of business, by the usages and practices of the company and by the knowledge which the board of directors has, or must be presumed to have, of acts and doings of its subordinates in and about the affairs of the corporation.

IC Legal Opinion No. 2023-05 dated January 20, 2023
The fact that no P&I Club is duly authorized by the IC would mean that no licensed brokers can facilitate brokering activities to unlicensed foreign P&I Club.

FGIC, an insurance corporation intends to convert its unissued common shares to preferred shares as part of its capital build-up plan. It requests a confirmation from the IC confirming that (a) subscriptions of the intended preferred share offering may be admitted for net worth purposes insofar as FGIC is concerned, and (2) an insurance company may purchase preferred shares.

As to FGIC’s first query, it ruled that subscriptions of the intended preferred share offering may be considered as equity in relation to FGIC’s capital build-up plan subject to its compliance with applicable rules and regulations on net worth requirement considering that (1) the preferred shares is cumulative, non-voting, non-participating, peso-denominated, redeemable and perpetual preferred shares that are non-convertible into common shares and the redemption is at the option of the issuing company, hence, no obligation is created on part of FGIC, and (2) with respect to the declaration of dividend, the company has no obligation to deliver cash or another financial asset to another entity, or to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the issuer.

And as to the second query, the IC ruled that insurance companies may purchase FGIC's preferred shares, subject to the limitations set forth in Sections 206 and 211 of the Insurance Code, as amended, without prejudice to the application of Circular Letter No. 2017-29 or the "Guidelines on Related Party Transactions for Insurance Commission's (IC) Covered institutions (Cls)" and Circular Letter No. 2022- 23 or the "Guidelines on Domestic investments that Do Not Require Prior Approval"

.

 

MISTG Memo 01-2023 dated January 3, 2023 – This provides the updated Excise Tax rates for certain products under RA No. 11467 effective January 4, 2023.

This provides the updated Excise Tax rates for certain products under RA No. 11467 effective January 4, 2023.

• Alcohol, Heated Tobacco and Vapor Products

Description	Classification	2023
Fermented Liquors Specific Tax	All HS codes under heading 2203; 2206.00.10, 2206.00.20, 2206.00.41, 2206.00.49, 2206.00.91, 2206.00.99, 2206.00.31 and 2206.00.39	Php 41.00/liter
Distilled Spirits Ad Valorem Tax Specific Tax	All HS codes under heading 2208	22% of NRP Php 50.00/PL (Proof Liter)
Wine Specific Tax	All HS codes under heading 2204 and 2205	Php 59.55/liter
Heated Tobacco Products	2403.99.90	Php 32.5/pack of twenty (20) units ir packaging combinations of not more than twenty (20) units
Nicotine Salt or Salt Nicotine (Salt Nicotine Vape)	*3824.99.99 (AICODE - 1002)	Php 52.00/ml
Conventional “Freebase” or “Classic” Nicotines	*3824.99.99	Php 60.00/10 ml or a fraction thereof

 

OCOM memo 09-2023 dated January 5, 2023 – This provides the supplemental guidelines on the posting of bond of RBEs in the IT-BPM pursuant to the directive of the FIRB.

This provides the supplemental guidelines on the posting of bond of Registered Business Enterprises (RBEs) in the Information Technology-Business Process Management (IT-BPM) pursuant to the directive of the Fiscal Incentives Review Board (FIRB).

a. The bond posted by the RBEs continuing to adopt the Work-From-Home (WFH) arrangement pursuant to various FIRB issuances shall remain effective for the duration of the WFH arrangement; and
In case the amount of the bond posted for the continued implementation of the WFH arrangement is insufficient to cover the required value of the bond (150% of the taxes and duties on equipment brought home) as stated in the relevant FIRB issuances, the RBE shall post an additional bond to make up for such deficiency within (15) days from the issuance of the demand letter by the Bureau of Customs (BOC). Upon failure to settle the bonded obligations within the period, the BOC shall recommend the issuance of an Order of Forfeiture of the Bond.

FIRB Advisory 002-2023, January 19, 2023
This provides the updates on the templates for the Certificate of Entitlement to Tax Incentives.

This provides the updates on the templates for the Certificate of Entitlement to Tax Incentives.

Classification of Projects	Annex	Updates
1. Projects registered under Republic Act (RA) No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act (“CREATE Projects”)	Annex “A”	No change.
2. Projects registered prior to the effectivity of the CREATE Act (“Pre-CREATE Projects”)	Annex “B”	Minor changes
3. Projects registered under RA No. 9513 or the Renewable Energy Act of 2008	Annex “C”	Minor changes