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Diaz Murillo Dalupan & Co. CPAs Tax and Corporate Services Division
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Diaz Murillo Dalupan & Co. CPAs Tax and Corporate Services Division
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or an economic activity, RMC 37-2012: Clarifying Act (RA) No. 9994, also known as
regardless of whether or not the Section 11 of RR 06-08, by “Expanded Senior Citizens Act of
person engaged therein is a Concluding that Certificate 2010”. It clarifies the tax
nonstock, nonprofit private Authorizing Registration (CAR) treatment of the 20% discount
organization, or government for different scenarios and the
is Mandatory to Transfer
entity is subject to VAT. Thus, exemption from VAT on goods
Ownership of Shares of Stocks
from the said provision, even a and services availed by Senior
nonstock, non-profit organization Citizens.
is liable to pay VAT on the sale of In order to transfer ownership of
goods or services irrespective of shares of stock not traded in the RMC 39-2012: Withholding of
the disposition of its net income. Stock Exchange, it is necessary to Income Tax on Backwages,
secure a CAR pursuant to the Allowances and Benefits
process laid down on RMO 15-03. Received by Employees
RMC 36-2012: Clarification on The receipts of payment of the through Garnishments of
Whether Documents tax should also be filed with and
Debts or Credit pursuant to a
Mentioned in Section 199 of recorded by the secretary of the
Labor Dispute Award
the 1997 Tax Code are subject corporation pursuant to Section
to DST 11 of RR 06-08.
When judgment awarded in a
labor dispute is enforced through
Only instruments, documents garnishment of debts due to the
and papers of transactions employer or other credits to
which the employer is entitled,
expressly enumerated in Section
the person owing such debts or
199 of the 1997 Tax Code, as
having in possession or control of
amended, are exempt from DST. such credits would normally
Consequently, certificates and release and pay the entire
other necessary documents garnished amount to the
issued by the Construction employee. As such the person
Industry Authority, an agency owning such debts or having
control of such credits are
under DTI, are not among those
authorized to deduct and
mentioned in Section 199 of the RMC 38-2012: Clarifies Certain withhold upon such wages or
tax Code, thus subject to DST of P Privileges under the Expanded salaries the withholding tax due
15.00 as prescribed under Senior Citizens Act thereon in accordance with
Section 188 of the 1997 Tax Section 78 (D) (1) of the 1997 Tax
Code. Code, as amended, and Section
This RMC is clarifying the tax 2.78.4 (A) of RR 2-98, as
amended.
privileges provisions of Republic
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an independent member firm of
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RMC 40-2012: Prescribing a income taxes. (CIR v COVANTA includes the authority to
Period of Prescription for ENERGY PHILIPPINE HOLDINGS, file a claim for refund and
INC.
Ruling under Section 40 (c) (2) to bring an action for
CTA EB No. 771, July 19, 2012)
of the 1997 Tax Code recovery of such claim.
(CARGILL PHILIPPINES,
Withholding Agent may File a
INC. v CIR CTA EB No. 734,
Ruling issued under Section 40 Refund should Statutory May 24, 2012)
(C) (2) of the 1997 Tax Code, as Taxpayer Opt not to File
amended, shall be valid only for
Rental Expense paid to
ninety (90) days counted from The CTA, citing the Supreme Affiliates is a Valid Deduction
the date or receipt of the ruling Court case of Commissioner of from Gross Income
by any of the parties to the Internal Revenue v. SMART
exchange transaction. The Communication, Inc., 629 SCRA Section 29(a)(1)(A) of the 1977
properties and shares of stocks 342 (2010), held that a Tax Code states that rentals may
involved in the transfer should be withholding agent has a legal be validly deducted from gross
conveyed to the transferee/s and right to file a claim for refund for income as long as the taxpayer
transferor/s respectively, within two reasons, to wit: has no equity in the property
the period. Otherwise, the ruling
being leased. Further, the said
shall be void and without effect. 1. Withholding agent is section refers to the equity in the
considered a “taxpayer” property itself and not to equity
Professional Fees Paid to GPP under the NIRC as he is in the corporations that own the
are not subject to Expanded personally liable for the property subject of lease. To
Withholding Tax withholding tax as well as extend the condition stated in
for deficiency the said provision to the property
For tax purposes, a GPP is an assessments, surcharges, owned by a corporation which
entity separate and distinct from and penalties, should the has a separate and distinct
the partners. Under Section 26 of amount of the tax juridical personality will unduly
the 1997 Tax Code, income tax withheld be finally found impose upon a taxpayer, a
exemption only covers GPP; to be less than the burden which is not in the law.
while the partners in a GPP are amount that should have (MITSUBISHI MOTORS
PHILIPPINES CORPORATION v CIR
liable to income tax. Section been withheld under law. CTA EB No. 526 re CTA Case 6385,
2.57.5 of RR 2-98 further states September 7, 2010)
that exemption from withholding 2. As an agent of the
tax extends to income payments taxpayer, his authority to
made to persons enjoying file the necessary income
exemption from payment of tax return and to remit
the tax withheld to the
government impliedly
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an independent member firm of
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Diaz Murillo Dalupan & Co. CPAs Tax and Corporate Services Division
an independent member firm of
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Footnotes:
http://www.google.com.ph/imgres?num=10&hl=fil&biw=1366&bih=593&tbm=isch&tbnid=zW-
eS0JgF_IHtM:&imgrefurl=http://legalnotes.wordpress.com/2012/06/19/west-rand-central-gold-mining-company-limited-v-the-king-2-k-b-391-
1905/&docid=FuWrbso0-nqMxM&imgurl=http://legalnotes.files.wordpress.com/2012/06/court-case-decision-raw.jpg&w=600&h=450&ei=GMt_UK-
mComKmwXxhoDQCg&zoom=1&iact=hc&vpx=267&vpy=60&dur=847&hovh=194&hovw=259&tx=141&ty=130&sig=112423226870252208102&page=2&tbnh=182
&tbnw=226&start=11&ndsp=15&ved=1t:429,r:1,s:20,i:132
http://www.google.com.ph/imgres?start=144&hl=fil&biw=1366&bih=593&tbm=isch&tbnid=-
9FO75LBSrlsRM:&imgrefurl=http://rebuildingmedia.corante.com/&docid=Hrx1TgVLZWIK2M&imgurl=http://rebuildingmedia.corante.com/IRS%252520nonprofit.gi
f&w=422&h=373&ei=n9R_UJXwOu7SmAXSpoF4&zoom=1&iact=hc&vpx=269&vpy=164&dur=86&hovh=211&hovw=239&tx=126&ty=116&sig=1124232268702522
08102&page=10&tbnh=180&tbnw=198&ndsp=14&ved=1t:429,r:45,s:100,i:139
http://www.google.com.ph/imgres?start=145&hl=fil&biw=1366&bih=593&tbm=isch&tbnid=tmyE_vdgf-
O7EM:&imgrefurl=http://healthit.ahrq.gov/portal/server.pt/community/health_it_tools_and_resources/919/health_it_costs___benefits_database/27869&docid=
rfaGilQcrHfSFM&imgurl=http://images.ahrq.gov/publishedimages/communities/f_j/health_it_tools/toolkit_summary/toolkits/health_it_costs___benefits_databas
e_5.jpg&w=300&h=258&ei=GKSEULX-Jq-
KmQX_54GIBg&zoom=1&iact=hc&vpx=124&vpy=120&dur=448&hovh=206&hovw=240&tx=157&ty=111&sig=112423226870252208102&page=7&tbnh=139&tbnw
=168&ndsp=25&ved=1t:429,r:45,s:100,i:139
http://www.google.com.ph/imgres?hl=fil&biw=1366&bih=593&tbm=isch&tbnid=rFKjqxpcOCMshM:&imgrefurl=http://www.taxationnews.com/philippines/BIR/bir
-bureau-of-internal-revenue-news-updates.aspx&docid=saTtKA4SOTVqqM&imgurl=http://www.taxationnews.com/images/TaxationNews.com-
Header.jpg&w=800&h=300&ei=59uEUPaKOuLrmAXvz4GYDg&zoom=1&iact=hc&vpx=415&vpy=218&dur=187&hovh=137&hovw=367&tx=176&ty=88&sig=112423
226870252208102&page=2&tbnh=103&tbnw=276&start=20&ndsp=27&ved=1t:429,r:22,s:20,i:191
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