Client Advisory Letter (January 2009)

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Lead article: Tax tip: Spend your way out of the recession
Cutting capex spending during an economic downturn may trigger higher tax payments and reduce cash flow, a new study says.

BIR issuances
  • Amendments in handling 2006 LNs (RMO No. 36-2008 dated December 8, 2008)
  • New BIR vision and mission statements (RMC No. 83-2008 dated December 24, 2008)
  • Clarifications on registration of manual book of accounts (RMC No. 82-2008 dated November 13, 2008)
  • Effective date of closure of business registration (BIR Memorandum OPM-TAS-TSPMD 2008-12-01 dated November 25, 2008)
  • Interest derived from loan agreement subject to 15% preferential tax rate under Philippines-Japan tax treaty (BIR Ruling No. ITAD 109 dated December 23, 2008)
  • Direct tax exemption under international comity (BIR Ruling No. ITAD-104-08 dated December 12, 2008)
  • Taxability of royalty payment under RP-Japan tax treaty (DA-ITAD- 102-08 dated December 8, 2008)


Other issuances
  • Philippine Stock Exchange (PSE): SEC Form 17-A (Annual Report)/SEC Form 17-Q (Quarterly Report) & Other reportorial requirements (PSE Memorandum Circular No. 2008-0582 dated December 9, 2008)
  • Bangko Sentral ng Pilipinas (BSP): Rules and Regulations promulgated in connection with the collection of advance deposits and final payments of duties and taxes thru Customs offices operating the e2m Customs System and for other purposes (Bangko Sentral Pilipinas Circular No. 638, Series of 2009 dated January 9, 2009)
  • Department of Trade and Industry (DTI): Temporary reduction of business name registration fees (DAO No. 09-01, series 2009, dated January 12, 2009)
  • Securities of Exchange and Commission (SEC): Guidelines on the determination of retained earnings available for dividend declaration (SEC Memorandum Circular No. 11, Series of 2008 dated December 5, 2008)
  • Philippine Economic Zone Authority (PEZA): (PEZA Memorandum Order No. 2008-005 dated December 16, 2008)

Court decisions
  • Court of Tax Appeals (CTA): TCCs are valid and effective from their issuance; postaudit not a suspensive condition (CTA EB No. 311 dated December 3, 2008)
  • CTA: Official receipts necessary to prove existence of zerorated sale of services ( (CTA Case No. 7429 dated December 5, 2008)
  • CTA: CTA grants refund based on the “most favored nation” clause (CTA Case No. 6863 dated December 8, 2008)

Legislative issuances
  • Environmental Awareness and Education Act of 2008 (Republic Act (RA) No. 9512 dated Dec. 12, 2008)

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