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Client Advisory Letter, October-December 2011 issue

In this issue

Penalties imposed for not separately showing output tax on the sale of goods and services on the sales invoice or official receipt (RR No. 18-2011 dated 12 September 2011)
Further implementation of the PERA Act (RR No. 17-2011 dated 27 October 2011)
Increase in the threshold amounts for sale of residential lot, sale of house and lot, lease of residential unit and sale of goods or properties or performance of services for VAT exempt purposes (RR No. 16-2011 dated 27 October 2011)

Clarification on RMC No. 38-2011 on the withholding tax obligation of PHIC and hospital/clinics (RMC No. 49-2011 dated 6 October 2011)
Circularization of relevant excerpts from the En Banc SC Decision on the imposition of DST on inter-office memo covering advances granted by an affiliated corporation (RMC No. 48-2011 dated 3 October 2011)
Taxability of interest from savings and time deposits of members of cooperatives (RMC No. 47-2011 dated 5 October 2011)
Clarification on the definition of “financial institutions” (RMC No. 46-2011 dated 3 October 2011)
Circularization of the exemption of Pag-IBIG (RMC No. 43-2011 dated 28 September 2011)
Clarifying the taxability of locally produced wines (RMC No. 41-2011 dated 08 September 2011)

Processing of Tax Debit Memo (TDM) applications (RMO 37-2011 dated 28 June 2011)
Amendment to RMO 26-2011 providing for guidelines in the tax exempt treatment of separation benefits (RMO 36-2011 dated 28 September 2011)

PEACe Bonds should be subject to 20% final tax on interest income from deposit substitutes and shall be imposed and withheld not only by RCBC/CODE NGO but also by “all subsequent holders of the Bonds” (BIR Ruling No. 378-2011 dated 17 October 2011)
Tax exemption of non-stock and non-profit educational institution under Section 30 of the NIRC covers only income taxes for which it is directly liable; other activities involving sale of goods and services not in connection with its primary purposes are subject to 12% VAT (BIR Ruling 307-2011 dated 22 August 2011)
Commissions for the selling of tickets by a non-resident foreign corporation through a computer-assisted ticket sales network operated outside the Philippines are exempt from income tax but subject to VAT (BIR Ruling ITAD 236-2011 dated 25 October 2011)
Exemption of savings and loan associations subsists (BIR Ruling 305-2011 dated 15 August 2011)
Real properties initially acquired by a taxpayer engaged in the real estate business shall not be converted into capital assets even if they are subsequently abandoned or
become idle (BIR Ruling 215-2011 dated 6 July 2011)
The estimated useful life and rate of depreciation of property as previously agreed upon by the taxpayer and the Commissioner may be lengthened or shortened in
light of prevailing factual considerations (BIR Ruling 187-2011 dated 23 June 2011)

A non-stock, non-profit hospital established solely for charitable purposes is exempt from income tax on income earned as such under Section 30(E) of the NIRC and not to
the 10% preferential tax under Section 27(B) of the same Code (CTA EB Case No. 634, 5 October 2011)
Procedural due process not violated despite lack of PAN on additional issues; no period to suspend when period expired (CTA Case No. 7964 dated 20 October 2011)
Registered businesses in the City of Manila already taxed under Section 19 may no longer be taxed under Section 21 as the same constitutes double taxation; no need to
file a written protest with the local treasurer if there is no written assessment, only written claim for refund (CTA AC Case No. 69, 20 October 2011)

Guidelines on reporting and filing of applications for a Certificate of Eligibility under the amended SPV Act (SEC Memorandum Circular No. 8 dated 14 October 2011)

Schedule of FMV for land and other improvements for the City of Parañaque (Ordinance No.31 dated 13 October 2011)

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