Reissuance of Tax Alert No. 73 [Republic Act (RA) No. 11494 or The Bayanihan to Recover As One Act (Bayanihan 2)]

On 11 September 2020, the President has signed RA No. 11494 or the Bayanihan To Recover As One Act (herein referred to as “Bayanihan 2”). Bayanihan 2 seeks to provide COVID-19 response and recovery interventions to bolster the resiliency of the Philippine economy. The following are the tax reliefs provided under Bayanihan 2:

1. Net operating loss of a business or enterprise for taxable years 2020 and 2021 shall be carried over as a deduction from gross income for the next five (5) consecutive taxable years immediately following the year of such loss.
2. Repeal of tax imposed on sale, barter, or exchange of shares of stock listed and traded through initial public offering (IPO tax under Section 127(B) of the Tax Code).
3. Tax exemption on retirement benefits received by officials and employees of private firms, whether individual or corporate, from 5 June 2020 until 31 December 2020.
4. Liberalization of the grant of incentives for the manufacturing or importation of critical or needed healthcare equipment or supplies or essential goods. The exemption from import duties, taxes, and other fees shall be determined by the Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR).
5. Exemption from import duties, and taxes, including donor’s tax, of personal computers, laptops, tablets, or similar equipment appropriate for use in schools, donated for distribution to public schools regardless of level, including state universities and colleges (SUCs) and vocational institutions under TESDA.
6. Moving of statutory deadlines and timelines for the filing and submission of any document, the payment of taxes, fees, and other charges required by law.
7. Bank and other non-bank financial intermediaries that agree to loan term extensions or restructuring for all existing, current and outstanding loans falling due on or before 31 December 2020, shall be exempt from documentary stamp taxes, except for interbank loans and bank borrowings.
8. Income tax exemption on COVID-19 special risk allowance provided by the national government to both public and private health workers directly catering to or in contact with COVID-19 patients.
9. Tax exemption on compensation provided to public and private health workers who have contracted COVID-19 in line of duty.
10. Income tax exemption on active hazard duty pay received by temporary Human Resources for Health (HRH) serving in the front line during the state of national emergency.

You may access the full version of the law through the Official Gazette website.