Client Advisory Letter (March 2009)

Client Advisory Letter March 09 cover
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Lead article - Equalizing expatriates' tax burden
As confidence collapsed in the Today, with economies going global, companies are deputing its skilled and experienced employees (referred to as ‘expatriates’) all across its global locations to carry out their businesses. In such a situation, the expatriate’s salary and effective purchasing power are depleted, in comparison with his former home place. One cause of salary and purchasing power reduction is - no doubt - the taxation effects.

BIR issuances
  • Amendments to RR 2-98 (Revenue Regulations 2-2009 dated February 4, 2009)
  • Transfer of real property to government shall either be subject to CGT or regular income tax at the option of individual transferor (DA(C-014) 046-2009 dated January 27, 2009
  • Realized FX losses and not otherwise compensated by insurance are deductible business expenses (DA(FIT003) 018-2009 dated January 15, 2009)
  • Fees paid for services not constituting “know how” would not give rise to royalties (BIR Ruling No. DA-ITAD 013-09 dated February 6, 2009)

Other issuances
Legislative issuance

  • Philippine Cooperative Code of 2008 (Republic Act (RA) No. 9520 dated February 17, 2009)

Administrative issuances

  • Filing of 2008 Audited Financial Statements (FS) (DOF Insurance Commission Circular Letter No. 10-2009 dated March 10, 2009)

Bangko Sentral ng Pilipinas

  • Reforms to the FX Regulatory Framework and Issuance of the Consolidated Rules under the New “Manual of Regulations on Foreign Exchange Transactions” (BSP Circular No. 645 dated February 13, 2009)
  • Amendment to the 20% Final WHT on overnight Reverse Repurchase (RRPs) Transactions (BSP Circular No. 647 dated March 3, 2009)

Court decisions Supreme Court (SC)

  • Exemption from franchise and business taxes imposed by the local government (G.R. No. 167260 dated February 27, 2009)

Court of Tax Appeals (CTA)

  • Prescriptive period based on fraud should clearly established (CTA Case No. 6986 dated January 19, 2009)