ISSN 2094-1226/July 2015

ISSN 2094-1226/July 2015
Dividend income is not subject to LBT p4| TTRA not needed to enjoy tax treaty benefits p6 |
Payment refundable if no FAN was issued p6 |Intra-corporate disputes are now under regular
courts p9
Client
advisory
letter
Isla Lipana & Co.
At a glance
The future of leas
Updates, reiterations and clarifications on
selected topics
Latest on income tax, VAT, and other taxes
LWDs are exempt only from income tax........................................ 4
Actual forex inward remittance critical for VAT zero-rating.......... 4
No VAT on purchases for activities under international
agreement........................................................................................ 4
Dividend income is not subject to LBT.......................................... 4
Export declaration, bill of lading support zero-rated
export sales...................................................................................... 5
Donor’s tax for unintended donation............................................. 5
Manpower agencies are subject to VAT on gross receipt............ 5
Latest on tax assessments/refund procedures
Payment refundable if no FAN was issued.................................... 6
TTRA not needed to enjoy tax treaty benefits.............................. 6
Disallowance of MCIT carried over not proper.............................. 6
Latest on regulatory landscape
Mandatory submission of list of sale-recording machines ......... 7
BIR updates its Citizen’s Charter.................................................... 7
Agricultural cooperatives as producer of sugar............................ 8
Use of dissolved company name not allowed.............................. 8
Rules for accreditation of Special Accessing Entities.................. 8
Guidelines on venue of stockholders’ meetings ......................... 9
Intra-corporate disputes are now under regular courts............... 9
Substitutes for STB in case of loss or destruction........................ 9
Safeguard measure on imported newsprint.................................. 9
The International Accounting Standards Board (IASB)
and the Financial Accounting Standards Board (FASB)
(‘the Boards’) have proposed to require all leases to be
reported on balance sheet. The impact on lessee financial
reporting, asset financing, IT, systems and controls could
be substantial.
Background
Leasing is an important and widely used source
of financing. It enables entities, from start-ups to
multinationals, to acquire the right to use property, plant,
and equipment without making large initial cash outlays.
Entities currently account for leases as either operating
leases or finance leases. Lease classification is based
on complex rules; where a lease is accounted for as
an operating lease, neither the leased asset nor the
obligation to pay for it is recorded on the balance sheet.
Rather, rent expense is recorded on a straight-line basis
throughout the lease term.
The IASB and FASB have been working to create a
single, global leasing standard as part of their global
convergence process, and have issued a second exposure
draft in May 2013. The final standard is yet to be released.
The proposed model
The key elements of the proposed lease accounting model
and its effect on financial statements are as follows:
• A ‘right of use’ concept will replace the ‘risks and
rewards’ concept. Entities will recognize an asset and
liability at the start of a lease.
• The distinction between operating leases and finance
leases will be eliminated.
• All lease liabilities will be measured with reference
to an estimate of the lease term, which may include
optional extension periods.
• Contingent rentals and residual value guarantees will
have to be estimated and included at the start of the
lease.
• Lessees will be required to reassess the lease term,
contingent rentals and residual value obligations at
each reporting date.
2
Client advisory letter2015
se accounting
Financial ratios and metrics
The proposed model will change both balance sheet and
income statement presentation. Leverage and capital
ratios may suffer from the gross-up of balance sheets.
Rent expense will be replaced by depreciation and interest
expense. In addition, the expense recognition pattern may
change significantly. This may negatively impact some
performance measures, such as interest cover, but improve
others, such as EBIT or EBITDA, with no change in the
underlying cash flows or business activity.
Financial reporting
The financial statements may require restatement for the
effect of the changes. The effects of the proposed lease
accounting model should be clearly communicated to
analysts and other stakeholders in advance.
Ongoing accounting for leases may require incremental
effort and resources as a result of an increase in the volume
of leases recognized on balance sheet; there is also likely
to be a need for regular re-assessment of the lease term,
contingent rentals, residual value guarantees or the impact
of purchase options.
Timely assessment of the proposals’ impact on covenants
and financing agreements will enable management to start
discussions with banks, rating agencies and other users
of the entity’s financial data. Entities anticipating capital
market transactions should consider the effects on their
leverage ratios.
The impact of change will not be restricted to external
reporting; internal reporting information, including
financial budgets and forecasts, may also be affected.
What would the change mean for companies that lease
assets?
• The proposed lease accounting model will require all
leases, not just finance leases, to appear on the balance
sheet.
IT and lease accounting systems
Many entities manage operating leases on spreadsheets or
through their accounts payable system. Entities’ information
and systems needs will vary, but we expect most may need
to modify their systems, processes and controls to comply
with the proposed lessee accounting model.
• Entities leasing ‘big-ticket’ items, including real estate,
manufacturing equipment, aircraft, trains, ships,
computers and technology would be greatly impacted.
Entities with numerous small leases, such as office
equipment and auto fleets, would also be affected.
Timely assessment and management of the impact on IT
and lease accounting systems will help reduce business and
reporting risks.
Internal controls and processes
Many entities in the past have not needed robust processes
and controls for leases. The proposal that leases should
be revisited and re-measured (for example, for changes
in expected lease term) will require entities to (re)design
processes and controls to ensure proper management and
accounting of all lease agreements.
• Balance sheets would grow, leverage ratios would
increase, and capital ratios would decrease.
• There will be a change to both expense character
(rent replaced with depreciation/amortization and
interest expense) and recognition pattern (significant
acceleration of total expense recognition relative to
recognition pattern under current rules). Performance
measures such as EBIT and EBITDA would therefore
change.
Gathering and analyzing the information could
take considerable time and effort, depending on the
number of leases, the inception dates and the records
available. Beginning the process early would ensure that
implementation of a future standard is orderly and well
controlled and that data on new leases written before
implementation of the changes is captured from the outset.
• Some leases may require extensive data-gathering.
Significant changes to internal controls and accounting/
information systems are likely to be necessary.
• ‘Lease-buy’ decisions may be affected.
2015
Client advisory letter 3
Latest on income tax, VAT, and
other taxes
LWDs are exempt only from
income tax
The CTA held that Local Water Districts (LWDs) are liable
to pay local franchise taxes. The tax exemptions that were
previously enjoyed by LWDs under PD No. 198, as amended
by RA No. 7109, had already expired on 13 August 1996.
Effective on that date until 11 March 2010, LWDs were
subject to all national and local taxes. It was only with the
promulgation of RA No. 10026 on 11 March 2010 that LWDs
were once again exempted but only as to income tax.
(CTA EB Case No. 1079 dated 17 June 2015)
Actual forex inward
remittance critical for VAT
zero-rating
Based on the Tax Code and existing regulations1, any VATregistered person claiming VAT zero-rated direct export
sales must present at least three types of documents:
1. Sales invoice as proof of sale of goods
2. Export declaration and bill of lading or airway bill as
proof of actual shipment of goods from the Philippines
to a foreign country
3. Bank Credit Advice, Certificate of Bank Remittance, or
any other document proving payment for the goods in
acceptable foreign currency or its equivalent in goods
and services
No VAT on purchases
for activities under
international agreement
Under the Tax Code2, transactions can be exempt or subject
to zero percent VAT under special laws or international
agreements where the Philippines is a signatory.
The BIR confirmed that the project supplies obtained in
the Philippines for activities funded by the Government
of Australia pursuant to the General Agreement on
Development Cooperation (GADC) are subject to zero
percent VAT. On the other hand, professional and technical
materials as defined under Article 3 of the GADC shall be
exempt from VAT provided they are imported by Australian
personnel or institutions for professional use while
undertaking activities under the GADC3.
(BIR Ruling No. ITAD 209-15 dated 23 June 2015)
Dividend income is not
subject to LBT
According to the CTA, a city ordinance subjecting dividend
income of a holding company to LBT is an act beyond the
scope of the LGU’s legal authority (ultra vires); thus, it is
prohibited and cannot be given effect. The ordinance goes
against the provision of the Local Government Code, which
provides that the taxing powers of cities shall not extend
to levy of income tax, except on banks and other financial
institutions.
(CTA EB Case No. 1093 dated 17 June 2015)
Only export sales supported by these documents shall
qualify for VAT zero-rating. In this case, the claimant failed
to prove that its foreign currency inward remittances
actually pertained to its alleged export sales for the subject
periods. Thus, the claim was denied.
(CTA Case No. 8652 dated 10 June 2015)
1
4
Section 106(A)(2)(a)(1), in relation to Sections 113(A)(1), (B)(1),
and (2)(c) of the Tax Code, and Sections 4.113-1(A)(1), (B)(1)
and (2)(c) of Revenue Regulations No. 16-05
Client advisory letter2015
2
3
Section 106 (A)(2)(c) and Section 109 (1)(K) of the Tax Code
Pursuant to Article 7, Section 1(a) of the GADC
Export declaration, bill of
lading support zero-rated
export sales
Manpower agencies are
subject to VAT on gross
receipt
• BOI Certification is not sufficient proof of actual export
sales
Income/withholding tax and VAT treatment of agency
fees/gross receipts of security agencies under RMC No.
39-2007 does not apply to other manpower agencies, such
as janitorial and clerical services. Hence, the basis for VAT
on the janitorial contracts of an agency with its clients
should be the whole contract price and not merely the
administrative fee and supplies charges.
Reiterating the requirements under the Tax Code4, the CTA
ruled that the existence of zero-rated direct export sales
must be proven by actual shipment of the goods from the
Philippines to a foreign country as evidenced by the export
declaration and bill of lading or airway bill.
(BIR Ruling No. 213-2015 dated 19 June 2015)
A BOI Certification is not sufficient evidence to prove actual
export sales5. While a taxpayer can execute an affidavit
that the information provided is true and correct in support
of its application for a BOI Certification, this affidavit is
merely self-serving (i.e., the information originated from
the taxpayer). Thus, the presumption of regularity in the
performance of the BOI’s duty of issuing the certification
cannot be applied to prove that there was actual shipment
of goods from the Philippines to the foreign country.
(CTA Case No. 8418 dated 30 June 2015)
Donor’s tax for unintended
donation
The BIR reiterated that, if the consideration of the sale of
shares of stock, listed or not listed and traded through the
local stock exchange, is lower than the FMV/book value
of the shares, the difference between the book value and
the selling price of the shares is considered a gift subject to
donor’s tax6 under Section 100 of the Tax Code. Thus, even
in the absence of an intention by the parties to donate, the
transfer of shares is considered a gift subject to donor’s tax
where the consideration of the sale is less than the FMV of
the shares.
(BIR Ruling No. 194-2015 dated 10 June 2015)
Glossary
4
5
6
BIR - Bureau of Internal Revenue
BOI - Bureau of Immigration
CTA - Court of Tax Appeals
FMV - Fair Market Value
LBT - Local Business Tax
LGU - Local Government Unit
LWD - Local Water Districts
PD - Presidential Decree
RA - Republic Act
RMC - Revenue Memorandum Circular
VAT - Value-Added Tax
Section 106(A)(2)(a)(1) of the Tax Code
CTA Case Nos. 8542 and 8577 dated 11 November 2014
Section 99(B) of the Tax Code
2015
Client advisory letter 5
Latest on tax assessments/
refund procedures
Payment refundable if no
FAN was issued
• Prescription may set in where no FAN had been issued
The issuance of the FAN/FLD is a due process requirement
in assessment cases. Failure by the BIR to comply with this
prerequisite, despite payment under protest by the taxpayer,
does not toll the prescriptive period.
In the absence of a FAN/FLD, collection of tax payment
on the assessed amount is unauthorized and deemed
erroneous. Consequently, the erroneous payment can be
refunded to the taxpayer.
(CTA Case No. 8147 dated 15 June 2015)
TTRA not needed to enjoy
tax treaty benefits
• Withholding agent can file a refund claim for tax
erroneously withheld
The CTA reiterated the ruling in an SC case7 where the
High Court held that non-compliance with the 15-day prior
filing of a TTRA under RMO No. 1-20008 does not divest
entitlement to the relief as it would constitute a violation
of the duty required by good faith in complying with a tax
treaty. The obligation to comply with a tax treaty takes
precedence over the objective of RMO No. 1-2000. The
fact that the taxpayer invoked the provisions of the treaty
when it requested for a confirmation from the ITAD before
filing an administrative claim should be deemed substantial
compliance with RMO No. 1-2000.
In this case, the CTA affirmed the right of the withholding
agent to file a claim for refund of taxes9 erroneously or
illegally collected for two reasons:
7
8
9
6
G.R. No. 18850 dated 19 August 2013
Guidelines on the Processing of TTRA Pursuant to Existing
Philippine Tax Treaties
Citing G.R. No. 179045-46 dated 25 August 2010
Client advisory letter2015
1. The withholding agent is considered a taxpayer
under the Tax Code as he is personally liable for the
withholding tax, as well as for deficiency assessments,
surcharges, and penalties should the tax withheld be
found to be less than the amount that should have been
withheld under the law.
2. As an agent of the taxpayer, his authority to file the
necessary income tax return and to remit the tax
withheld to the government impliedly includes the
authority to file a claim for refund and to bring an
action for recovery of such claim.
(CTA Case No. 8692 dated 30 June 2015)
Disallowance of MCIT
carried over not proper
In 2008, the taxpayer claimed as deduction the amount
representing its excess MCIT over NIT and excess tax credits
carried over to the succeeding period. However, the BIR
disallowed such claim without indicating the basis for the
disallowance.
The CTA ruled that the taxpayer was denied due process
of law. The BIR failed to provide the taxpayer a breakdown
of the disallowed tax to identify which transactions were
allegedly unsubstantiated and to justify the disallowance of
the claim. Under Section 228 of the Tax Code, a taxpayer
must be informed in writing of the law and the facts upon
which a tax assessment is based; otherwise, the assessment
is void.
Further, it was improper for the BIR to disallow the said
excess MCIT over NIT and excess tax credits because any tax
benefit derived by the taxpayer from the carry-over of the
said amounts redounds to the succeeding year 2009. Given
that the tax benefit will be in the succeeding year, at most,
the taxpayer may only be assessed in the said succeeding
year.
(CTA Case No. 8521 dated 30 June 2015)
Latest on regulatory landscape
Mandatory submission
of list of sale-recording
machines
BIR updates its Citizen’s
Charter
As of December 2014, the Revised BIR Citizen’s Charter had
been updated to cover 23 frontline services and to provide
information on who may avail and where to avail the
services, the basic procedures, documentary requirements,
and the estimated duration of the entire process for the
following services:
As of 30 June 2015, the CIR is requiring all concerned
taxpayers to submit an Inventory List of all Cash Register
Machines (CRMs), Point of Sales (POS) Machines, Special
Purpose Machines (SPMs), and other similar machines
generating sales invoices/receipts used by establishments in
business operations or otherwise, and are physically located
in said business premises.
• Application for TIN of individuals and non-individuals
• Certificate of Registration (COR)/Authority to Print
(ATP)/TIN Card
The RMC sets out the procedures for submission that should
be strictly observed.
• Application for subsequent registration of manual books
of accounts (including loose-leaf books of accounts)
Payment of the appropriate penalty shall not relieve
taxpayers from the submission of the prescribed Inventory
List. The BIR shall enforce appropriate measures to make
sure that taxpayers will fully comply with the provisions of
this RMC.
• One-time transactions involving sale of real property/
shares of stocks and one-time transactions subject to
donor’s tax
(Revenue Memorandum Circular No. 36-2015 dated 8 June 2015)
• Permit to operate as a manufacturer, producer, trader
and/or importer of excisable articles
• Authority to Release Imported Goods (ATRIG)
• Issuance of tax clearance for bidding purposes
Glossary
• Issuance of delinquency verifications (for foreign
corporations/individuals not yet registered in the BIR)
BIR - Bureau of Internal Revenue
CIR - Commissioner of Internal Revenue
CTA - Court of Tax Appeals
FAN - Final Assessment Notice
FLD - Formal Letter of Demand
ITAD - International Tax Affairs Division
MCIT - Minimum Corporate Income Tax
NIT - Normal Income Tax
RMC - Revenue Memorandum Circular
RMO - Revenue Memorandum Order
SC - Supreme Court
TIN - Tax Identification Number
TTRA - Tax Treaty Relief Application
VAT - Value-Added Tax
• Request for the issuance of VAT exemption certificates
and/or ID Cards in favor of embassies and their
personnel on their purchase of goods and services as well
as the issuance of ruling on indirect tax exemption on
their purchase of vehicles
• Issuance of Tax Credit Certificate pursuant to Writ of
Execution issued by the CTA
• Rulings on tax consequences of exchange of real
properties to correct mistake (with established
precedents)
2015
Client advisory letter 7
• Processing of rulings on tax exemption of senior citizens
under RA 4732 (with established precedents)
• Processing of rulings on tax exemption of National
Housing Authority and private sector participating in
socialized housing under RA 7279
• Application for certificate of exemption for scholarship
and job/livelihood programs
• Application for Contractor’s Final Payment Release
Certificate
(Revenue Memorandum Circular No. 39-2015 dated 11 December 2014)
expired corporation’s name in the AOI of the new
corporation.
• Latest General Information Sheet of the expired
corporation, stamped ‘received’ by the SEC.
• Affidavit executed under oath by the hold-over corporate
secretary attesting that the expired corporation: (a)
has no properties due for liquidation, or properties
transferred to the new corporation or used for
subscription payment without any liquidation; (b) has
no pending intra-corporate dispute; and (c) has no
derogatory information with the SEC.
(SEC Memorandum Circular No. 6 dated 2 June 2015)
Agricultural cooperatives as
Rules for accreditation of
producer of sugar
Special Accessing Entities
To clarify the nature and extent of being a producer of
sugar relative to the issue of advance VAT or percentage tax
exemption assessed on withdrawals of sugar for sale to a
non-member and/or another agricultural cooperative, the
following are the requisites for a duly registered agricultural
cooperative to be considered a producer of sugar:
a. It is the tiller, thru its members, of the land it owns,
or leases.
b. It incurs the cost of agricultural production of the
sugar and produces the sugar cane to be refined.
In the absence of either one of these requisites, an
agricultural cooperative cannot be considered as a producer
of sugar. (Revenue Memorandum Circular No. 40-2015 dated 15 July 2015)
Use of dissolved company
name not allowed
• Only the dissolved corporations themselves can re-register
under the same name
The SEC now prohibits corporations from using the names
of corporations or partnerships with dissolved or revoked
certificates of registration, except in meritorious cases.
Accordingly, only expired corporations may apply for reregistration using the same corporate name, provided their
applications are accompanied by the following documents:
• Board resolution executed and signed under oath by
the hold-over board of directors/trustees of the expired
corporation attesting that: (a) the re-registration is
for a new corporation intending to use the expired
corporation’s name; (b) the re-registration is approved
by majority of the board and the stockholders
representing majority of the outstanding capital stock/
membership; and (c) they will disclose the use of the
8
Client advisory letter2015
Pursuant to the Credit Information System Act10, the
Credit Information Corporation (CIC) is tasked to evaluate
applications for accreditation to establish and operate a
Special Accessing Entity (SAE) taking into consideration
the applicant’s financial resources, technical expertise and
reputation. Some of the salient provisions of this circular are
as follows:
• Applicants must be engaged in the Credit Bureau
Business or the business of providing credit reports,
ratings, and other similar credit information products
and services.
• Domestic corporations may file for the accreditation to
operate itself or establish a subsidiary to operate as an
SAE. Foreign corporations may also file for accreditation
to establish a local subsidiary as an SAE, the subsidiary
being majority-owned and controlled by the applicant.
• Applicants must submit the specific documents
prescribed by the SEC within the application period set
by the CIC. Said documentary requirements include
a business plan for the SAE’s operation for at least the
next three years, which shall contain the description of
products offered, a marketing and financial sustainability
plan, business expansion plans and track record in creditrelated operations, expected growth and profitability,
etc.
• Within three months from receipt of the grant of
accreditation, the applicant must comply with the postqualification requirements relative to the SAE’s form,
capitalization or corporate purpose. Upon issuance
of accreditation, the SAE and CIC shall execute a
subscription contract subject to the condition that the
SAE shall comply with a minimum paid-up capital stock
of PHP60m.
10 RA No. 9510 approved on 21 October 2008
Substitutes for STB in case
of loss or destruction
• Within ten days from receipt of the grant of
accreditation, the applicant must post a PHP300,000
performance security bond, which shall be forfeited in
case of non-execution of the Subscription Agreement
with the CIC.
The Commission noted that the significance of the stock and
transfer book (STB) in the determination of stockholder
status is apparent in the issuance of notice of the annual
stockholders’ meeting under Section 50 of the Corporation
Code. The right to receive notice of meeting is afforded only
to the stockholders of record of the corporation based on
the STB.
• The accreditation shall be valid for five years from the
date stated in the Subscription Agreement.
(SEC Memorandum Circular No. 7 dated 10 July 2015)
Guidelines on venue of
stockholders’ meetings
In cases where the STB is lost or destroyed, secondary
evidence (parol evidence) may be admitted to supply
omissions in corporate records. While the STB is the
best evidence of stock ownership, extrinsic or secondary
evidence, such as copies of the records, either certified or
sworn to, or testimonies, may be admitted if necessary.
As a general rule, stockholders’ meetings ought to be
conducted in the city or municipality where the principal
office of the corporation is located, pursuant to Section
51 of the Corporation Code. However, for a corporation
whose principal office is located in one of the component
cities or municipalities of Metro Manila (e.g., Makati
City), stockholders’ meetings may be conducted in another
component city or municipality of Metro Manila (e.g.,
Quezon City), provided that notice of the time, date and
particular place of the meeting is timely given to all the
stockholders. Such flexibility may be desirable due to the
nature of the business of a corporation. Also, the exception
only applies if the corporate by-laws are silent as to the
venue of the meetings. Where the by-laws expressly provide
for a specific place, the provisions of the by-laws shall
prevail.
Lastly, the recording of sales and transfer of shares of stock
in the STB shall be invalid if the Certificate Authorizing
Registration (CAR) from the BIR is not presented or
submitted to the Corporate Secretary or other transfer
agent.
(SEC-OGC Opinion No. 15-03 dated 3 July 2015)
Safeguard measure on
imported newsprint
To safeguard domestic producers of newsprints from
increased importation and to uphold newsprint as a channel
of information in education, the Department of Trade and
Industry issued an order imposing a definitive safeguard
measure on imported newsprint (i.e., ASEAN Harmonized
Tariff Nomenclature [AHTN] Code Nos. 4801.0010 and
4801.0090) for a period of three years from 2015-201813.
The definitive safeguard duty was computed by comparing
the purchase prices (including VAT) of locally produced
newsprint with those of imported newsprints in 2014.
(SEC-OGC Opinion No. 15-02 dated 2 July 2015)
Intra-corporate disputes are
now under regular courts
Pursuant to the Securities Regulation Code (SRC), the SEC
no longer has jurisdiction over intra-corporate disputes11
— the regular courts having acquired such jurisdiction.
Consequently, it is the policy of the SEC to refrain from
issuing opinions involving matters which may be or are the
subject of an intra-corporate dispute12.
(Customs Memorandum Circular No. 64-2015 dated 5 June 2015)
13 Pursuant to Section 5 of RA No. 8800 approved on 19 July
2000
Glossary
AOI - Articles of Incorporation
ASEAN - Association of South East Asian Nations
BIR - Bureau of Internal Revenue
CIC - Credit Information Corporation
RA - Republic Act
SAE - Special Accessing Entity
SEC - Securities and Exchange Commission
STB - Stock and Transfer Book
VAT - Value-Added Tax
11 Section 5 of PD 902-A
12 Pursuant to Section 5.2 of SEC Memorandum Circular No. 15
Series of 2003
2015
Client advisory letter 9
Meet us
Alex Cabrera headlines
business forum on ASEAN’s
regulatory environment
Chairman and Senior Partner Alex Cabrera delivered his
talk on managing Philippine investment structures and
issues in The Manila Times’ 2nd Business Forum, entitled
The New Regulatory Environment of an Integrated ASEAN
Community: Seizing the Opportunities and Managing the
Risks last 22 July at the Dusit Thani Manila, Makati City.
Aside from Consulting Leader Benj Azada who moderated
the panel discussion, several partners were in attendance to
touch base with clients and meet new ones: Vice Chairman
and Assurance Managing Partner Rick Danao, Tax
Managing Partner Malou Lim, Tax Partner Carlos Carado,
Assurance Partners Che Javier, Gina Detera, Paul See, and
Nelson Aquino.
The event was a means for the participants, who numbered
over 200, to learn about developing smart business
strategies to maximize the potential benefits of an open
market and free trade area encompassing more than 600m
people in the AEC.
PwC Philippines was a major sponsor of the event.
Left photo: Alex during his speech. Right photo: Alex receives a token of appreciation
from the Manila Times’ (left to right) Publisher/Editor Rene Bas, Editor-in-Chief
Nerilyn Tenorio, and Executive Editor Dante F.M. Ang 2nd.
The forum led intelligent discussions on the complex
regulatory issues involved in the drive by the Association of
Southeast Asian Nations (ASEAN) Economic Community
(AEC) toward regional integration, and the challenges
present to policy makers, businesses and investors from
member economies.
Experts on such regulatory issues from ASEAN, as well as
business leaders who have embarked on expanding their
businesses across economies in the regions, shared their
insights. They are Trade and Industry Secretary Gregory
Domingo, ASEAN Business Advisory Council Co-Chair 2014
Tan Sri Dato’ Dr. Mohd Munir Abdul Majid, Ambassador of
the People’s Republic of China to the Philippines H.E. Zhao
Jianhua, Ambassador of Vietnam to the Philippines Truong
Trieu Duong, Public-Private Partnership (PPP) Center
Executive Director Cosette Canilao, and Credit Suisse Vice
Chair and Former Finance Secretary Jose Isidro Camacho.
10
Client advisory letter2015
Consulting Leader Benjamin Azada (far right) moderated the panel composed of,
from left, are Alex Cabrera, Jose Isidro Camacho, and Tan Sri Dato’ Dr. Mohd Munir
Abdul Majid.
Talk to us
For further discussion on the contents of this issue of
the Client Advisory Letter, please contact any of our
partners.
Malou Lim joins focus
group discussion on tax
bill
For tax and related regulatory matters
Tax Managing Partner Malou Lim shared her
insights on the concerns raised by business sectors
on the proposed Tax Incentives Management and
Transparency Act (TIMTA) in a focus group discussion
(FGD) last 1 July at the Senate.
Alexander B. Cabrera
Chairman & Senior Partner,
concurrent Tax Partner
T: +63 (2) 459 2002
[email protected]
Led by the office of Sen. Sonny Angara, Head of
Senate Committee of Ways and Means, the FGD
included invited representatives from different
business organizations, such as the Semiconductor and
Electronics Industries in the Philippines, Inc. (SEIPI),
American Chamber of Commerce of the Philippines
(AmCham), European Chamber of Commerce of the
Philippines (ECCP), IT & Business Process Association
of the Phils. (IT-BPAP), Management Association of
the Philippines (MAP), Tax Management Association
of the Phils., Inc. (TMAP). Deputy Director General
for Operations Mary Harriet Abordo represented the
Philippine Economic Zone Authority (PEZA).
Fedna B. Parallag
Tax Partner
T: +63 (2) 459 3109
fedna.parallag@
ph.pwc.com
On 27 May 2015, a joint position paper signed
by several business organizations was submitted
regarding their comments on the bill. While the
business groups lauded the bill’s overall objective to
promote transparency and accountability in granting
incentives, several issues have been raised on some of
its provisions, particularly on forfeiting incentives of
registered companies for failing to submit application
for incentive claims. Another provision they are looking
into is the 18-month extension on the prescriptive
period of the Bureau of Internal Revenue (BIR) to issue
an assessment.
Malou P. Lim
Tax Managing Partner
T: +63 (2) 459 2016
[email protected]
Lawrence C. Biscocho
Tax Partner
T: +63 (2) 459 2007
lawrence.biscocho@
ph.pwc.com
Roselle K. Yu-Caraig
Tax Partner
T: +63 (2) 459 2023
[email protected]
Carlos T. Carado II
Tax Partner
T: +63 (2) 459 2020
carlos.carado@
ph.pwc.com
Harold S. Ocampo
Tax Principal
T: +63 (2) 459 2029
harold.s.ocampo@
ph.pwc.com
For accounting matters
John-John Patrick
V. Lim
Assurance Partner
T: +63 (2) 459 3023
[email protected]
Ma. Lois M.
Gregorio-Abad
Assurance Partner
T: +63 (2) 459 3023
ma.lois.m.gregorio@
ph.pwc.com
Gina S. Detera
Assurance Partner
T: +63 (2) 459 3063
gina.s.detera@
ph.pwc.com
Request for copies of text
You may ask for the full text of the Client Advisory Letter by writing
our Tax Department, Isla Lipana & Co., 29th Floor, Philamlife Tower,
8767 Paseo de Roxas, 1226 Makati City, Philippines. T: +63 (2) 845
2728. F: +63 (2) 845 2806. Email [email protected].
Malou participates in the focus group discussion.
2015
Client advisory letter 11
www.pwc.com/ph
© 2015 Isla Lipana & Co. All rights reserved.
PwC refers to the Philippines member firm, and may sometimes refer to the PwC network.
Each member firm is a separate legal entity.
Please see www.pwc.com/structure for further details.
PwC Philippines helps organizations and individuals create the value they’re looking
for. We’re a network of firms in 157 countries with more than 195,000 people who are
committed to delivering quality in assurance, tax and advisory services. Find out more by
visiting us at pwc.com/ph.
Disclaimer
The contents of this advisory letter are summaries, in general terms, of selected issuances
from various government agencies. They do not necessarily reflect the official position of
Isla Lipana & Co. They are intended for guidance only and as such should not be regarded
as a substitute for professional advice.