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Tax bulletin

August 2015

Tax bulletin | 1
Highlights
BIR Rulings

• If shares of stock, which are not listed and traded on the stock exchange, are
sold for less than their fair market value (FMV), the excess of the FMV over the
selling price shall be subject to donor’s tax. (Page 3)

• Transactions of a cooperative which are not related to its principal business are
subject to tax. (Page 4)

• Manpower agencies, such as those providing janitorial and clerical services,


are subject to VAT on their gross receipts based on the whole contract price.
(Page 4)

 HjgÕlkj]eall]\ZqYH`adahhaf]ZjYf[`lgalk`]Y\g^Õ[]afBYhYfYj]kmZb][l
lgl`]hj]^]j]flaYd)(ZjYf[`hjgÕlkj]eallYf[]lYp :HJL!jYl]mf\]jl`]
Hjglg[gdlgl`]H`adahhaf]k%BYhYfLYpLj]Ylq& (Page 5)

 Hmj[`Yk]kg^kmhhda]kYf\k]jna[]kZqYf9mkljYdaYfÕjeafl`][gmjk]g^
aehd]e]flaf_YfY[lanalq$o`a[`ak^mf\]\Zql`]?gn]jfe]flg^9mkljYdaYmf\]j
l`]JH%9mkljYdaY?]f]jYd9_j]]e]flgf<]n]dghe]fl;ggh]jYlagf ?9<;!$Yj]
subject to 0% VAT, while importations of professional and technical materials
are exempt from VAT. (Page 5)

 L`]hmj[`Yk]g^YfYmlgegZad]ZqYfg^Õ[]jg^l`]Ogjd\@]Ydl`Gj_YfarYlagf
O@G!^gj`akh]jkgfYdmk]akkmZb][llgN9LYf\]p[ak]lYp& (Page 6)

BIR Issuances

 J]n]fm]E]egjYf\me;aj[mdYj JE;!Fg&,-%*()-[dYjaÕ]kl`]N9L
oal``gd\af_gfhjgb][lk^mf\]\Zql`]Gn]jk]Yk=[gfgea[;ggh]jYlagf
>mf\ G=;>!mf\]jl`]=p[`Yf_]g^Fgl]kZ]lo]]fl`]?gn]jfe]flkg^l`]
H`adahhaf]kYf\BYhYf& (Page 6)

 J]n]fm]E]egjYf\meGj\]j JEG!Fg&).%*()-Ye]f\kJEGFg&)1%*()*
\Yl]\Bmdq+)$*()*$o`a[`hjgna\]kl`]_ma\]daf]kg^l`]N9L9m\alHjg_jYe
g^l`]DYj_]LYphYq]jkK]jna[] DLK!& (Page 7)

BOC Issuance

 ;mklgekE]egjYf\meGj\]j ;EG!Fg&*,%*()-hj]k[jaZ]kl`]hjg[]\mj]k
in processing the importer’s or consignee’s requests for an extension of the
h]jag\lgÕd]]fljq\][dYjYlagfk$[gflafmgmkhjg[]kkaf_g^]flja]k$mflY__af_
of abandonment and other similar requests, in order to establish a clear,
transparent and effective procedure in the disposition of deemed abandoned
articles. (Page 8)

BSP Issuance

 ;aj[mdYjFg&00-hj]k[jaZ]kl`]_ma\]daf]k^gjl`]k]_j]_Ylagfg^[mklge]j
^mf\kYf\k][mjala]kj][]an]\ZqZYfckafl`]h]j^gjeYf[]g^l`]ajk][mjala]k
brokering functions. (Page 9)

2 | Tax bulletin
SEC Issuances

 K=;E]egjYf\me;aj[mdYj E;!Fg&1]pl]f\k^gjl`]dYkllae]lg+)<][]eZ]j
*()-l`]h]jag\^gjYe]f\af_l`]9jla[d]kg^Af[gjhgjYlagfgj9jla[d]kg^
HYjlf]jk`ahgfl`]hjaf[ahYdg^Õ[]Y\\j]kk& (Page 10)

 L`]ZgYj\g^\aj][lgjkeYqZ]h]jeall]\lg[gflafm]YkÉljmkl]]kÊlg[gehd]l]Y
[gjhgjYl]daima\Ylagf]n]fY^l]jl`]l`j]]%q]Yjdaima\Ylagfh]jag\& (Page 10)

BLGF Opinion

 L`]kYd]kZjYf[`]kYf\oYj]`gmk]kg^Yf]flalqhjaeYjadq]f_Y_]\afl`]
eYfm^Y[lmjaf_g^daimgjgjYd[g`gda[Z]n]jY_]kk`gmd\YdkgZ][dYkkaÕ]\Yk
ÉeYfm^Y[lmj]j$ÊfglYkÉ\]Yd]j$Ê^gjdg[YdZmkaf]kklYp]khmjhgk]k&L`]ZjYf[`]k
Yf\oYj]`gmk]kYj]e]j]dqaf[a\]flYdlgl`]hjaeYjqhmjhgk]g^eYfm^Y[lmjaf_
alcoholic beverages. (Page 11)

Court Decisions

 9lYphYq]jakfgl\akimYdaÕ]\^jgeYnYadaf_alk]d^g^l`]lYpYef]klqmf\]jJ9
Fg&1,0(\mjaf_l`]h]f\]f[qg^alkYhh]Ydoal`l`]Kmhj]e];gmjl\akhmlaf_Y
\]Õ[a]f[qlYpYkk]kke]fl&

L`]gZda_Ylagflgoal``gd\lYpgf[geh]fkYlagfYjak]kYll`]lae]l`]kYdYjqoYk
hYa\gjY[[jm]\gjj][gj\]\YkYf]ph]fk]afl`]]ehdgq]jÌkZggck$o`a[`]n]j
[ge]kÕjkl& (Page 12)

 L`]kaemdlYf]gmkj][]ahlg^l`]H9FYf\>9FnagdYl]kl`]ja_`llg\m]hjg[]kkYk
lYphYq]jkYj]\]hjan]\g^l`]ghhgjlmfalqlg[gfl]kll`]H9Foal`afl`])-%\Yq
h]jag\Ykhj]k[jaZ]\Zql`]j]_mdYlagfk&

H=R9%j]_akl]j]\]fl]jhjak]kYj]]p]ehl^jgel`]Aehjgh]jdq9[[memdYl]\
=Yjfaf_kLYp A9=L!&J]n]fm]J]_mdYlagfk JJ!Fg&(*%()\g]kfgl\aklaf_mak`
Z]lo]]fH=R9]fl]jhjak]k]fbgqaf_Af[ge]LYp@gda\Yqgjl`]-kh][aYdlYp$lg
imYda^ql`]eYk]p]ehl^jgeA9=L& (Page 13)

BIR Rulings

BIR Ruling No. 194-15 dated June 10, 2015

If shares of stock, which are not listed Facts:


and traded on the stock exchange, are
sold for less than their FMV, the excess 9;g&gofk)((g^l`]k`Yj]kaf:;g&$Y\ge]kla[[gjhgjYlagf]f_Y_]\afl`]
of the FMV over the selling price shall be Zmkaf]kkg^eYfm^Y[lmjaf_afcb]lhjafl]jk&<m]lg\][daf]afj]n]fm]Yf\hjgÕl
subject to donor’s tax. eYj_afk$9;g&\][a\]\lgk]ddalkk`Yj]kaf:;g&lg;;g&^gjd]kkl`Yfl`]>ENg^
l`]k`Yj]k&9;g&bmklaÕ]\l`]k]ddaf_hja[]Yk^gddgok2 a!l`]kYd]oYkYfgj\afYjq
[gee]j[aYdYjek%d]f_l`ljYfkY[lagfeglanYl]\Zqd]_alaeYl]Zmkaf]kkj]Ykgfk3 aa!
l`]k]ddaf_hja[]oYkYjjan]\YlY^l]jf]_glaYlagfZq9;g&oal`;;g&Yf\Yfgl`]j
mfj]dYl]\hYjlq$Yf\ aaa!l`]j]oYkfgafl]fllg\gfYl]gf9;g&ÌkhYjlo`]falkgd\
l`]k`Yj]klg;;g&

Issue:

Is the excess of the FMV over the selling price subject to donor’s tax?

Tax bulletin | 3
Ruling:

Q]k&Mf\]jK][lagf)((g^l`]LYp;g\]afj]dYlagflgJJFg&.%*((0$YkYe]f\]\
ZqJJFg&.%*()+$af[Yk]ko`]j]k`Yj]kg^klg[co`a[`Yj]fgldakl]\Yf\ljY\]\
on the stock exchange are sold for a consideration which is less than FMV, the
excess of the FMV over the selling price shall be deemed a gift subject to donor’s
lYp&K][lagf)((g^l`]LYp;g\]\g]kfgle]flagfYfq]p]ehlagf^jgel`akjmd]&
@]f[]$l`]]p[]kkg^l`]>ENgn]jl`]k]ddaf_hja[]k`YddZ]kmZb][llg\gfgjÌklYp
Yll`]jYl]g^+(&

BIR Ruling No. 195-15 dated June 10, 2015

Transactions of a cooperative which are Facts:


not related to its principal business are
subject to tax. ;ggh9akY[ggh]jYlan]j]_akl]j]\oal`l`];ggh]jYlan]<]n]dghe]fl9ml`gjalq&
AlkhjaeYjqhmjhgk]aklghjgna\]]ehdgqe]flYf\Zmkaf]kkghhgjlmfala]klgalk
e]eZ]jk&:Yk]\gfalk;]jlaÕ[Yl]g^LYp=p]ehlagfk][mj]\^jgel`]:AJ$;ggh
9akY[ggh]jYlan]ljYfkY[laf_oal`e]eZ]jkgfdq$Yf\ak]flald]\lg[]jlYaflYp
]p]ehlagfkYf\af[]flan]kkm[`Yk]p]ehlagf^jge]p[ak]lYp&@go]n]j$9;g&kgd\
_gd\lgl`]:Yf_cgK]fljYdf_HadahafYk :KH!&

Issue:

Ak;ggh9ÌkkYd]g^_gd\lgl`]:KH]p]ehl^jge]p[ak]lYp7

Ruling:

Fg&=f_Y_af_afl`]eafaf_gjkeYddk[Yd]eafaf_g^_gd\akfglj]dYl]\lgl`]
cooperative’s principal business. Thus, excise tax arising from sale of gold pursuant
lgkm[`Y[lanalqakfglaf[dm\]\af;ggh9Ìk]p]ehlagf^jge]p[ak]lYp&

BIR Ruling No. 213-2015 dated June 19, 2015

Manpower agencies, such as those Facts:


providing janitorial and clerical services,
are subject to VAT on their gross 9;g&$YeYfhgo]jY_]f[q]f_Y_]\afl`]Zmkaf]kkg^hjgna\af_bYfalgjaYdk]jna[]k$
receipts based on the whole contract bgaf]\YhmZda[Za\\af_[gf\m[l]\Zql`]DYf\LjYfkhgjlYlagfG^Õ[] DLG!&Af
price. [gf\m[laf_l`]Za\$l`]DLG\g]kfgl[gfka\]jl`Yll`]o`gd][gfljY[lhja[]ak
kmZb][llgl`])*N9L3algfdq[gfka\]jkl`]Y\eafakljYlan]^]]Yf\kmhhda]k
[`Yj_]kYkZ]af_kmZb][llgl`])*N9L$^gddgoaf_l`]lj]Yle]flg^Y_]f[q^]]k'
_jgkkj][]ahlkg^k][mjalqY_]f[a]kafJE;Fg&+1%*((/&

Issue:

AkJE;Fg&+1%*((/Yhhda[YZd]lgeYfhgo]jY_]f[a]k7

Ruling:

Fg&JE;Fg&+1%*((/\g]kfglYhhdqlgeYfhgo]jY_]f[a]k$]&_&$bYfalgjaYdYf\
[d]ja[Ydk]jna[]kY_]f[a]k$gl`]jl`Yfk][mjalqY_]f[a]kkaf[]l`]j]akfgl`af_afl`]
JE;o`a[`ogmd\km__]kll`ak&L`mk$l`]ZYkak^gjN9Lgf9;g&Ìk[gfljY[lkoal`alk
[da]flkk`gmd\Z]l`]o`gd][gfljY[lhja[]Yf\fglgfdql`]Y\eafakljYlan]^]]Yf\
supplies charges.

4 | Tax bulletin
BIR Ruling No. ITAD 204-15 dated June 5, 2015

HjgÕlkj]eall]\ZqYH`adahhaf]ZjYf[` Facts:
lgalk`]Y\g^Õ[]afBYhYfYj]kmZb][l
lgl`]hj]^]j]flaYd)(:HJLjYl]mf\]j 9;g&$YBYhYf]k][gjhgjYlagf$akda[]fk]\lg\gZmkaf]kkafl`]H`adahhaf]kl`jgm_`
l`]Hjglg[gdlgl`]H`adahhaf]k%BYhYf alk9;g%H`ad:jYf[`&9;g%H`ad:jYf[`j]eall]\hjgÕlklg9;g&
LYpLj]Ylq&
Issue:

Akl`]j]eallYf[]g^hjgÕlkZq9;g%H`ad:jYf[`kmZb][llgl`])(:HJLjYl]mf\]j
l`]JH%BYhYfLYpLj]Ylq$gjl`]j]_mdYj)-:HJLjYl]mf\]jK][*0 9! -!g^l`]
LYp;g\]7

Ruling:

L`])(:HJLjYl]&Mf\]jAl]e-g^l`]Hjglg[gdlgl`]JH%BYhYfLYpLj]Ylq$Y
H`adahhaf]ZjYf[`j]eallaf_hjgÕlklgalk`]Y\g^Õ[]afBYhYfeYqZ]kmZb][llglYp
gfkm[`hjgÕlk$ZmlkYa\lYpk`Yddfgl]p[]]\)(g^l`]Yegmflg^l`]]Yjfaf_k
remitted.

BIR Ruling No. ITAD 209-15 dated June 23, 2015

Purchases of supplies and services Facts:


ZqYf9mkljYdaYfÕjeafl`][gmjk]
g^aehd]e]flaf_YfY[lanalq$o`a[`ak 9;g&$Yf9mkljYdaYfÕje$oYkkmZ[gfljY[l]\Zql`]?gn]jfe]flg^9mkljYdaYlg
^mf\]\Zql`]?gn]jfe]flg^9mkljYdaY aehd]e]flYhjg_jYe[j]Yl]\Yf\^mf\]\Zql`]9mkljYdaYf_gn]jfe]flhmjkmYfl
mf\]jl`]JH%9mkljYdaY?9<;$Yj] lgl`]JH%9mkljYdaY?9<;&9khYjlg^l`]aehd]e]flYlagf$9;g&hmj[`Yk]khjgb][l
subject to 0% VAT, while importations of supplies and services and imports professional and technical materials into the
professional and technical materials are Philippines.
exempt from VAT.
Issues:

)& 9j]l`]dg[Ydhmj[`Yk]kg^hjgb][lkmhhda]kYf\k]jna[]kg^9;g&kmZb][llg(
VAT?

*& 9j]l`]aehgjlYlagfkg^hjg^]kkagfYdYf\l][`fa[YdeYl]jaYdkg^9;g&]p]ehl
from VAT?

Ruling:

)& Q]k&<aj][lhmj[`Yk]koal`afl`]H`adahhaf]kg^hjgb][lkmhhda]k$]imahe]fl$
eYl]jaYdkYf\gl`]j_gg\k^gjl`]]p][mlagfg^\]n]dghe]flY[lanala]kZq
9mkljYdaYfh]jkgff]dgjafklalmlagfk$ÕjekYf\gj_YfarYlagfk]f_Y_]\mf\]j
l`]?9<;$km[`Yk9;g&$Yj]kmZb][llg(N9L&<aj][lhmj[`Yk]kg^k]jna[]k
g^km[`9mkljYdaYfh]jkgff]dgjafklalmlagfk$ÕjekYf\gj_YfarYlagfkmf\]jl`]
?9<;Yj]dac]oak]kmZb][llg(N9L$hjgna\]\l`]k]jna[]kYj]j]f\]j]\Zq
individuals or general professional partnerships registered in the Philippines.

*& Q]k&AehgjlYlagfkg^hjg^]kkagfYdYf\l][`fa[YdeYl]jaYdk$]imahe]flYf\gl`]j
_gg\kZq9mkljYdaYfh]jkgff]dgjafklalmlagfk$ÕjekYf\gj_YfarYlagfk$^gj
hjg^]kkagfYdmk]o`ad]]f_Y_]\afY[lanala]kmf\]jl`]?9<;Yf\hYa\^gj^jge
the funds of the Australian government, are exempt from VAT.

Tax bulletin | 5
BIR Ruling No. ITAD 238-15 dated July 27, 2015

L`]hmj[`Yk]g^YfYmlgegZad]ZqYf Facts:
g^Õ[]jg^l`]O@G^gj`akh]jkgfYdmk]
is subject to VAT and excise tax. Ej&P$Yfg^Õ[]jg^l`]Ogjd\@]Ydl`Gj_YfarYlagf O@G!$hmj[`Yk]\Yk][gf\%`Yf\
YmlgegZad]^gj`akh]jkgfYdmk]^jgeEj&Q$YdkgYfg^Õ[]jg^l`]O@G&

Issue:

Is the sale exempt from VAT and excise tax?

Ruling:

Fg$l`]kYd]akkmZb][llgN9LYf\]p[ak]lYp&

Mf\]jl`]@gkl9_j]]e]flZ]lo]]fl`]H`adahhaf]kYf\l`]O@G$alakl`]O@G
o`a[`ak]p]ehl^jgeN9L&Km[`]p]ehlagfYhhda]kgfdqlgn]`a[d]khmj[`Yk]\mf\]j
l`]fYe]g^l`]O@G^gjalkg^Õ[aYdmk]&L`]j]akfghjgnakagfafl`]@gkl9_j]]e]fl
o`a[`Y[[gj\kN9L]p]ehlagflgg^Õ[aYdk'g^Õ[]jkg^O@G&L`mk$l`]kYd]g^l`]
YmlgegZad]lgEj&PakkmZb][llgN9LafY[[gj\Yf[]oal`K][lagf)(.g^l`]LYp
;g\]&

L`]j]akYdkgfghjgnakagfafl`]@gkl9_j]]e]flo`a[`]p]ehlkg^Õ[aYdk'g^Õ[]jkg^
l`]O@G^jgel`]hYqe]flg^]p[ak]lYpgfl`]kYd]kg^YmlgegZad]k&L`mk$l`]kYd]
g^l`]YmlgegZad]lgEj&PakkmZb][llg]p[ak]lYpafY[[gj\Yf[]oal`K][lagf),1g^
l`]LYp;g\]&

BIR Issuances

JE;Fg&,-%*()-[dYjaÕ]kl`]N9L Revenue Memorandum Circular No. 45-2015 dated August 24, 2015
oal``gd\af_gfhjgb][lk^mf\]\Zql`]
G=;>mf\]jl`]=p[`Yf_]g^Fgl]k  Mf\]jl`]=p[`Yf_]g^Fgl]kZ]lo]]fl`]H`adahhaf]kYf\BYhYfgfG=;>%
Z]lo]]fl`]?gn]jfe]flkg^l`] funded projects undertaken in the Philippines, a standard provision is that
H`adahhaf]kYf\BYhYf& l`]H`adahhaf]?gn]jfe]flk`YddYkkme]YddÕk[Ydd]na]kYf\lYp]kaehgk]\gf
BYhYf]k][gehYfa]kgh]jYlaf_Ykkmhhda]jk$[gfljY[lgjkYf\'gj[gfkmdlYflk
engaged in such projects in the Philippines.

 Lgaehd]e]fll`]lYpYkkmehlagfmf\]jl`]=p[`Yf_]g^Fgl]k$JE;Fg&,*%11
\Yl]\Bmf]*$)111]p]ehl]\l`]afnga[]Zaddaf_kg^BYhYf]k][gfljY[lgjk^jge
l`]l`]f0&-creditableoal``gd\af_N9Lmf\]jl`]l`]fLYp;g\]$YkYe]f\]\
ZqJ9Fg&0,*,&

 @go]n]j$J9Fg&1++/Ye]f\]\l`]LYp;g\]gfBmdq)$*((-Yf\hjgna\]\
^gjY-ÕfYdN9Loal``gd\af_gf]Y[`hmj[`Yk]g^_gg\kYf\k]jna[]kZq
Philippine government agencies.

 AfG=;>%^mf\]\hjgb][lk$kaf[]l`]?gn]jfe]flg^l`]H`adahhaf]k$alk]d^gj
l`jgm_`alk]p][mlaf_Y_]f[a]kgjafkljme]flYdala]k$Ykkme]kYddÕk[Ydd]na]kgj
lYp]kaehgk]\afl`]H`adahhaf]kgfBYhYf]k]ÕjekgjfYlagfYdkgh]jYlaf_Yk
kmhhda]jk$[gfljY[lgjkgj[gfkmdlYflkhmjkmYfllgl`]l]jekg^l`]=p[`Yf_]g^
Fgl]k2

)& L`]?gn]jfe]flg^l`]H`adahhaf]k$alk]d^gjl`jgm_`alk]p][mlaf_Y_]f[a]k
gjafkljme]flYdala]k$k`YddYkkme]l`]-ÕfYdN9Loal``gd\af_&>gjl`ak
hmjhgk]$l`]]p][mlaf__gn]jfe]flY_]f[qk`Yddaf[dm\]l`]Yegmfl
l`]j]g^afalkZm\_]l3

6 | Tax bulletin
*& L`]-ÕfYdN9Loal``gd\af_oaddZ]hYa\gml^jgel`]^mf\kg^l`]
?gn]jfe]flYkYÕfYdk]lld]e]flg^l`]lYp\m]gfl`]af[ge]j][]an]\Zq
l`]BYhYf]k][gfljY[lgjk3

+& L`]BYhYf]k][gfljY[lgjkg^l`]G=;>%^mf\]\hjgb][lk[Yffglaf[dm\]
afalkZaddaf_kl`]o`gd])*N9Ll`YloaddZ]Ykkme]\Zql`]H`adahhaf]
?gn]jfe]flgjalkafkljme]flYdala]kgjY_]f[a]kafY[[gj\Yf[]oal`l`]
=p[`Yf_]g^Fgl]k&

,& JE;Fg&,*%11fgdgf_]jÕf\kYhhda[Ylagflg[Yk]kgjljYfkY[lagfk
g[[mjjaf_Y^l]jBmdq)$*((-$l`]\Yl]g^]^^][lanalqg^J9Fg&1++/&

JEGFg&).%*()-Ye]f\kJEGFg& Revenue Memorandum Order No. 16-2015 dated July 21, 2015
)1%*()*\Yl]\Bmdq+)$*()*$o`a[`
provides the guidelines of the VAT Audit  L`]hjgnakagfkg^JEGFg&)1%*()*Yj]Ye]f\]\lgj]Y\Yk^gddgok2
Hjg_jYeg^l`]DLK&
ÉAA& ;GN=J9?=

A.1. xxx

)&1&LYphYq]jko`gk]N9L[gehdaYf[]akZ]dgol`]YnYadYZd]]klYZdak`]\
af\mkljqZ]f[`eYjck K]d][lagf;g\]2:A:!3

)&)(&LYphYq]jkoal`\ak[j]hYf[qafkYd]k'j]n]fm]kj]hgjl]\h]j]%KYd]k
J]hgjl'KmeeYjqDaklg^KYd]k KDK!n]jkmkN9LJ]lmjfk K]d][lagf
;g\]2<=K!3Yf\

)&))&LYphYq]jko`gk]]p[]kkafhmllYp[Yjja]\^gjoYj\afl`]N9Lj]lmjf
g^l`]km[[]]\af_imYjl]j daf]*(!ak\a^^]j]fl^jgel`]afhmllYp
j]^d][l]\afl`]N9Lj]lmjfg^l`]hj]nagmkimYjl]j daf]*+%9Yf\*1!
K]d][lagf;g\]2=AL!&

9&*&ppppppppp

 *&9M<ALHGDA;A=K9F<HJG;=<MJ=K

xxx

 *&,&ppppppppp

Lg^Y[adalYl]l`]j]hgjlaf_g^N9LYm\al[Yk]k$l`]J]n]fm]G^Õ[]jk JGk!
Ykka_f]\lgl`]Ym\al[Yk]k`YddgZk]jn]l`]^gddgoaf_2

*&,&)&JGkYj]\aj][l]\lgh]j^gjegfdql`]Ym\alhjg[]\mj]kmf\]j
J]n]fm]9m\alE]egjYf\meGj\]j J9EG!Fg&)%11Yhhda[YZd]lgl`]
jakcka\]fla^a]\^gj[Yk]k]d][lagfYf\YkYj]kmdlg^hj]%Ym\alYfYdqkak&

*&,&*&Lghjgna\]YfYm\alljYad^gjl`]k[gh]g^l`]Ym\alYf\lg]fkmj]l`Yl
l`]Ym\alY[lanalqhdYff]\Yf\l`]ZggckYf\j][gj\klgZ]]pYeaf]\
oaddY\\j]kkl`]a\]fla^a]\jakck$YfYm\alhdYfemklZ][gehd]l]\Zq
l`]JGk ^gj]Y[`Yddg[Yl]\[Yk]!^gddgoaf_l`]ajhj]%Ym\alYfYdqkakYf\
agreed upon with their supervisor. If further risk areas are identified
\mjaf_l`]Ym\al$l`akhdYfk`gmd\Z]Y\bmkl]\Y[[gj\af_dq&

Tax bulletin | 7
*&,&+&Gfdq\g[me]flYjqj]imaj]e]flkhj]k[jaZ]\mf\]jJEGFg&-+%10
that are applicable and relevant to the audit case shall be attached to
the docket.

 @go]n]j$l`]JGakfglhj][dm\]\^jgeYhhdqaf_l`]^mddhjgnakagfkg^
l`]Y^gj]e]flagf]\j]n]fm]akkmYf[]k\]h]f\af_gfl`]jakck'Yj]Ykg^
assessment found.

xxx

*&1&L`]afalaYdogjcdgY\g^]Y[`JGmf\]jl`akhjg_jYek`YddZ]l`ajlq +(!
[Yk]k&Affg[Yk]k`Yddl`]fmeZ]jg^[Yk]k`Yf\d]\ZqYfJG]p[]]\+(
[Yk]k$kmZb][llgj]hd]fak`e]flY^l]j]n]jqkmZeakkagfg^l`]j]hgjlg^
afn]kla_Ylagf'[dgkmj]g^]Y[`[Yk]&

xxx

@go]n]j$]p[]kkafl`]YddgoYZd]daealg^+([Yk]kYkYj]kmdlg^j]lmjf]\
[Yk]'kk`YddfglZ][gfka\]j]\YkYnagdYlagfg^l`akGj\]j&

PppÊ

BOC Issuance

;EGFg&*,%*()-hj]k[jaZ]kl`] Customs Memorandum Order No. 24-2015 dated July 26, 2015
procedures in processing the importer’s
or consignee’s requests for an extension • General Provisions
g^l`]h]jag\lgÕd]]fljq\][dYjYlagfk$
continuous processing of entries,  9faehgjlYlagfak\]]e]\YZYf\gf]\2
untagging of abandonment and other
similar requests, in order to establish  O`]fl`]gof]j$aehgjl]j$[gfka_f]]g^l`]aehgjl]\Yjla[d]]phj]kkdq
a clear, transparent and effective ka_fa^a]kafojalaf_lgl`];mklgek;gdd][lgj`akafl]flagflgYZYf\gf3
procedure in the disposition of deemed or
abandoned articles.  O`]fl`]gof]j$aehgjl]j$[gfka_f]]gjafl]j]kl]\hYjlq$Y^l]j\m]
fgla[]$^Yadklg^ad]Yf]fljqoal`afYfgf%]pl]f\aZd]h]jag\+(\Yqk$
from the date of discharge of the last package from the vessel or
Yaj[jY^l$gj`Ynaf_^ad]\km[`]fljq$^Yadklg[dYae`akaehgjlYlagfoal`af
Yfgf%]pl]f\aZd]h]jag\g^)-\Yq^jgel`]\Yl]g^hgklaf_g^l`]fgla[]
to claim such importation.

 =^^][lkg^YZYf\gfe]fl2

 9fqh]jkgfo`gYZYf\gfkYfYjla[d]gjo`g^Yadklg[dYae`ak
importation shall be deemed to have renounced all his interests and
hjgh]jlqja_`lkl`]j]af3

• An abandoned article shall ipso factoZ]\]]e]\l`]hjgh]jlqg^l`]


?gn]jfe]flYf\k`YddZ]\akhgk]\g^afY[[gj\Yf[]oal`l`]hjgnakagfk
g^l`]LYja^^Yf\;mklgek;g\]g^l`]H`adahhaf]k L;;H!&

 =p[]hlagfk2

9ll`]ojall]fj]im]klg^l`]aehgjl]jgj[gfka_f]]$l`]<aklja[l;gdd][lgj
g^;mklgekeYq]pl]f\l`]lae]daeal^gj_gg\k\][dYjYlagf^gjj]Ykgfk
\]]e]\nYda\$km[`Yk2

8 | Tax bulletin
 A^l`]^Yadmj]lg^ad]]fljqoYk\m]lg^jYm\$Y[[a\]fl$eaklYc]$]p[mkYZd]
f]_da_]f[]$gj^gj[]eYb]mj]3

 A^l`]^Yadmj]lg[dYaeaehgjlYlagfoYk[Ymk]\ZqYf9d]jlgj@gd\Gj\]j
akkm]\ZqYfYml`gjar]\:G;g^^a[aYd3

 O`]fl`]j]ak]jjgf]gmklY__af_ YkÉYZYf\gf]\Ê!g^l`]hYjla[mdYj
k`ahe]flafl`]=*Eoal`afl`]h]jag\Z]^gj]Yk`ahe]flak\]]e]\
ÉYZYf\gf]\Ê3gj

 Af[Yk]l`]aehgjl]jgj[gfka_f]]akY_gn]jfe]flY_]f[q$
afkljme]flYdalqgj[gjhgjYlagf&

 L`]j]im]kl^gj]pl]fkagfg^lae]lgÕd]]fljq\][dYjYlagfk$^gjda^laf_
of abandonment, for continuous processing of entries, untagging of
YZYf\gfe]flYf\gl`]jkaeadYjj]im]klkk`YddZ]Õd]\kgd]dqoal`l`]
G^Õ[]g^l`]<]hmlq;gdd][lgj^gjGh]jYlagfkoal`afÕn]ogjcaf_\Yqk^jge
\ak[gn]jqZql`]aehgjl]jgj[gfka_f]]$gj`akj]hj]k]flYlan]g^l`][Ymk]&

A^l`]aehgjl]jgj[gfka_f]]akY_gn]jfe]flY_]f[q$afkljme]flYdalqgj
[gjhgjYlagf$l`]j]im]kleYqZ]Õd]\YlYfqlae]Z]^gj]l`]hjgh]jlq
subject of importation is auctioned off.

Fgj]im]klk`YddZ]Yddgo]\Y^l]jl`]hjgh]jlqkmZb][lg^km[`j]im]kl`Yk
been auctioned off.

 L`]<]hmlq;gdd][lgj^gjGh]jYlagfkk`Yddj]kgdn]l`]j]im]klhjgehldqoal`
l`][gf[mjj]f[]g^l`]<aklja[l;gdd][lgj&

O`]j]l`]j]im]klakYhhjgn]\Zql`]<aklja[l;gdd][lgj$l`]kYe]k`YddZ]
^gjoYj\]\lgl`]<]hmlq;gdd][lgj^gjGh]jYlagfk^gjl`]aee]\aYl]mf%
lY__af_g^YZYf\gfe]flafl`]=*EKqkl]e$Yf\^gjl`]Õdaf_g^l`]]fljq
\][dYjYlagf a^fglq]lÕd]\!Yf\'gj[gflafmgmkhjg[]kkaf_g^l`]]fljqÕd]\&

O`]j]km[`Yj]im]klak\akYhhjgn]\$fgYZYf\gfe]flhjg[]]\af_ak
required and the subject article shall ipso factoZ]\]]e]\l`]hjgh]jlqg^
l`]?gn]jfe]fl&

 ;EGFg&*,%*()-lYc]k]^^][laee]\aYl]dqYf\k`Ydd_gn]jfYddh]f\af_
j]im]klk^gj]pl]fkagfg^lae]lgÕd]]fljq\][dYjYlagfk$j]im]klk^gjda^laf_g^
abandonment, continuous processing of entries, untagging of abandonment and
other similar requests.

BSP Issuance

;aj[mdYjFg&00-hj]k[jaZ]kl`] BSP Circular No. 885 dated August 14, 2015


guidelines for the segregation of
customer funds and securities received  HYjlAPg^l`]EYfmYdg^J]_mdYlagfk^gj:Yfck EGJ:!akYe]f\]\lghj]k[jaZ]
ZqZYfckafl`]h]j^gjeYf[]g^l`]aj the guidelines governing the segregation of customer funds and securities
securities brokering functions. j][]an]\ZqZYfckl`YlYj]\mdqj]_akl]j]\Zql`]K][mjala]kYf\=p[`Yf_]
;geeakkagf K=;!lgY[lYkk][mjala]kZjgc]jk&

 L`]^gddgoaf_k][lagfkg^l`]>afYf[aYdJ]hgjlaf_HY[cY_] >JH!akkm]\mf\]j
;aj[mdYjFg&-)*\Yl]\+>]ZjmYjq*((.Yj]^mjl`]jYe]f\]\lg[gf^gjelgl`]
_ma\]daf]khjgna\]\afHYjlAPg^l`]EGJ:2EYfmYdg^9[[gmflk Fg&+($+)$+*
Yf\++!3Af[ge]KlYl]e]fl9[[gmflk Fg&-!3Yf\;gflaf_]fl9[[gmflk Fg&1!&

Tax bulletin | 9
 9e]f\e]flklgl`]:YdYf[]K`]]l$Af[ge]KlYl]e]flkK[`]\md]k)$*$+$-$
.$/Yf\+0mf\]j;aj[mdYjFg&-)*$YkYe]f\]\$\Yl]\+>]ZjmYjq*((.$Yj]
YllY[`]\Yk9ff]p:g^;aj[mdYj00-&

 9e]f\e]flklgl`]:YdYf[]K`]]l$Af[ge]KlYl]e]fl$K[`]\md]k)$*$.;$
/:Yf\+0mf\]j;aj[mdYjFg&.,,$YkYe]f\]\$\Yl]\)(>]ZjmYjq*((1$Yj]
YllY[`]\Yk9ff]p;&

 :YfckY[laf_Ykk][mjala]kZjgc]jkk`Yddj]hgjll`]ajk][mjala]kZjgc]jaf_
ljYfkY[lagfkafl`]>JHj]hgjl^gjeYl Zgl`kgdgYf\[gfkgda\Yl]\ZYkak!akkm]\
mf\]j;aj[mdYjFg&-)*$YkYe]f\]\$\Yl]\+>]ZjmYjq*((.Yf\;aj[mdYjFg&
.,,$YkYe]f\]\$\Yl]\)(>]ZjmYjq*((1$Z]_affaf_oal`l`]j]hgjlaf_h]jag\
]f\af_+(K]hl]eZ]j*()-&

 L`]kmZeakkagfg^l`]Y\\alagfYdj]hgjlj]imaj]\mf\]jK][lagf)g^l`ak;aj[mdYj
k`Ydd[gee]f[]^jgel`]j]hgjlaf_h]jag\]f\af_+(K]hl]eZ]j*()-&L`ak
j]hgjlk`YddZ]kmZeall]\]n]jq)-thZYfcaf_\YqY^l]j]f\g^j]^]j]f[]egfl`&
The additional report shall be considered a provisional report template which
eYqZ]j]nak]\Zql`]:KH.egfl`k^jge+(K]hl]eZ]j*()-mhgf\m]fgla[]
to the concerned banks.

 ?ma\]daf]kgfl`]hj]hYjYlagfYf\kmZeakkagfg^l`]j]hgjlkj]imaj]\mf\]jl`ak
;aj[mdYjk`YddZ][gn]j]\ZqYk]hYjYl]akkmYf[]&

 L`ak[aj[mdYjk`YddlYc]]^^][l)-\YqkY^l]jalkhmZda[Ylagf]al`]jafl`]G^Õ[aYd
?Yr]ll]gjafYf]okhYh]jg^_]f]jYd[aj[mdYlagf&

[Editor’s Note: Circular No. 885 was published in L`]KlYf\Yj\ on August 24, 2015.]

SEC Issuances

K=;E;Fg&1]pl]f\k^gjl`]dYkllae] SEC Memorandum Circular No. 9 dated July 2, 2015


lg+)<][]eZ]j*()-l`]h]jag\^gj
amending the Articles of Incorporation [Editor’s Note: SEC MC No. 9 was published in The Manila Times and in The Philippine
or Articles of Partnership on the KlYj on August 21, 2015.]
hjaf[ahYdg^Õ[]Y\\j]kk&

SEC-OGC Opinion No. 15-07 dated July 21, 2015

L`]ZgYj\g^\aj][lgjkeYqZ]h]jeall]\ Facts:
lg[gflafm]YkÉljmkl]]kÊlg[gehd]l]
the corporate liquidation even after the A private educational institution was left unattended until its corporate existence
l`j]]%q]Yjdaima\Ylagfh]jag\& ]phaj]\&9^l]jalkd]_Yd\akkgdmlagf$al[]Yk]\gh]jYlagfYf\d]^lalkgfdqj]eYafaf_
Ykk]la\d]^gjYdgf_lae]&L`];`YajeYfg^l`]:gYj\Yf\K[`ggdHj]ka\]fl\a]\$
Yf\oYkkmjnan]\Zq`akoa^]o`goYkYZgYj\e]eZ]jYf\l`]j]eYafaf_eYbgjalq
klg[c`gd\]jg^l`]\]^mf[l[gjhgjYlagf&<m]lggd\Y_]$l`]oa^]\][a\]\lgYhhgafl
`]jlog[`ad\j]flgY[lYkljmkl]]k'daima\Ylgjk^gjl`]Z]f]Õlg^l`]klg[c`gd\]jk&

Issue:

Akl`]ZgYj\g^\aj][lgjkYddgo]\lgY[lYkÉljmkl]]kÊlg[gehd]l]l`][gjhgjYl]
daima\YlagfZ]qgf\l`]daima\Ylagfh]jag\o`]j]fgljmkl]]ko]j]\]ka_fYl]\7

10 | Tax bulletin
Ruling:

Q]k$l`]ZgYj\g^\aj][lgjkalk]d^eYqZ]h]jeall]\lg[gflafm]YkÉljmkl]]kÊZqd]_Yd
aehda[Ylagflg[gehd]l]l`][gjhgjYl]daima\Ylagf$a^l`]+%q]Yjdaima\Ylagfh]jag\`Yk
]phaj]\oal`gmlYljmkl]]Z]af_\]ka_fYl]\Zql`][gjhgjYlagfoal`afl`Ylh]jag\&

O`ad]K][lagf)**g^l`];gjhgjYlagf;g\]_an]kY\akkgdn]\[gjhgjYlagf+q]Yjk
lg[gflafm]YkYZg\q[gjhgjYl]^gjhmjhgk]kg^daima\Ylagf$l`]\akhgkalagfg^l`]
j]eYafaf_mf\akljaZml]\Ykk]lkemklf][]kkYjadq[gflafm]]n]fY^l]jkm[`h]jag\&

BLGF Opinion

BLGF Opinion dated July 7, 2015 signed on August 3, 2015

The sales branches and warehouses Facts:


g^Yf]flalqhjaeYjadq]f_Y_]\afl`]
manufacturing of liquor or alcoholic P;g&akY\ge]kla[[gjhgjYlagfhjaeYjadq]f_Y_]\afl`]Zmkaf]kkg^eYfm^Y[lmjaf_
Z]n]jY_]kk`gmd\YdkgZ][dYkkaÕ]\Yk daimgjgjYd[g`gda[Z]n]jY_]k&Alkhjaf[ahYdg^Õ[]akdg[Yl]\afIm]rgf;alq&Al
ÉeYfm^Y[lmj]j$ÊfglYkÉ\]Yd]j$Ê^gjdg[Yd eYaflYafklogeYfm^Y[lmjaf_hdYflkdg[Yl]\afKYflYJgkY;alqYf\:aŽYf;alq&L`]
business taxes purposes. The branches ;gehYfqYdkg`Yk*)kYd]kZjYf[`]kYf\oYj]`gmk]kkalmYl]\afnYjagmk[ala]kYf\
Yf\oYj]`gmk]kYj]e]j]dqaf[a\]flYdlg provinces in the Philippines.
l`]hjaeYjqhmjhgk]g^eYfm^Y[lmjaf_
alcoholic beverages. Issue:

K`gmd\l`]kYd]kZjYf[`]kYf\oYj]`gmk]kg^P;g&Z][dYkkaÕ]\YkÉeYfm^Y[lmj]jÊ
Yf\fglYkÉ\]Yd]jÊ^gjdg[YdZmkaf]kklYp D:L!hmjhgk]k7

Held:

Q]k&L`]kYd]kZjYf[`]kYf\oYj]`gmk]kg^P;g&k`gmd\Z][dYkkaÕ]\Yk
ÉeYfm^Y[lmj]jÊmf\]jK][lagf),+ Y!g^l`]Dg[Yd?gn]jfe]fl;g\] D?;!$
[gfka\]jaf_l`Yll`]eYafl]fYf[]g^l`]ZjYf[`]kYf\oYj]`gmk]kake]j]dq
af[a\]flYdlgl`];gehYfqÌkhjaeYjqhmjhgk]g^eYfm^Y[lmjaf_Yd[g`gda[Z]n]jY_]k&

9jla[d]*,* *!g^l`]D?;Aehd]e]flaf_Jmd]kYf\J]_mdYlagfk AJJ!\]Õf]kY


ZjYf[`gjYkYd]kg^Õ[]YkYÕp]\hdY[]afYdg[Ydalqo`a[`[gf\m[lkgh]jYlagfk
g^l`]Zmkaf]kkYkYf]pl]fkagfg^l`]hjaf[ahYdg^Õ[]&@]f[]$YZjYf[`gjYkYd]k
g^Õ[]$o`a[`akYe]j]]pl]fkagfg^l`]hjaf[ahYdg^Õ[]$ak\]]e]\]f_Y_]\afl`]
kYe]Zmkaf]kkgjY[lanalqZ]af_[gf\m[l]\Zql`]dYll]j&

Egj]gn]j$l`]l]jeÉeYfm^Y[lmj]jÊYk\]Õf]\mf\]jK][lagf)+) g!g^l`]D?;
af[dm\]knYjagmklqh]kg^eYfm^Y[lmjaf_Y[lanala]kafl]f\]\lghjg\m[]Õfak`]\
products for the purpose of sale or distribution to others, and not for his own use
or consumption. As such, even if a manufacturer engages in selling activities, it
j]eYafkYeYfm^Y[lmj]jhmjkmYfllgl`]\]Õfalagfg^YÉeYfm^Y[lmj]jÊ&

P;g&eYqfglZ][gfka\]j]\YkY\]Yd]jg^^]je]fl]\daimgjkkaf[]l`]l]je
É\]Yd]jÊYk\]Õf]\mf\]jK][lagf)+) c![gfl]ehdYl]kYea\\d]eYfgjgf]o`g
sells the products of another. Thus, it excludes one who sells what he manufactures.

>afYddq$9jla[d]*+* Z!g^l`]D?;AJJhjg`aZalk[dYkka^qaf_Yf\lYpaf_YZmkaf]kk
]flalqYkYo`gd]kYd]j$\akljaZmlgjgj\]Yd]j$o`]j]l`]Zmkaf]kk]flalqakhjgh]jdq
[dYkkaÕ]\YkeYfm^Y[lmj]j&

Tax bulletin | 11
Court Decisions

ING Bank N.V. vs. Commissioner of Internal Revenue


Kmhj]e];gmjl K][gf\<anakagf!$?&J&Fg&)././1$hjgemd_Yl]\Bmdq**$*()-

9lYphYq]jakfgl\akimYdaÕ]\^jge Facts:
YnYadaf_alk]d^g^l`]lYpYef]klqmf\]j
J9Fg&1,0(\mjaf_l`]h]f\]f[q J]khgf\]fl;geeakkagf]jg^Afl]jfYdJ]n]fm] ;AJ!Ykk]kk]\AF?:YfcF&N&^gj$
g^alkYhh]Ydoal`l`]Kmhj]e];gmjl Yegf_gl`]jk$Ydd]_]\\]Õ[a]f[qaf[ge]lYp$gfk`gj]lYp$ZjYf[`hjgÕlj]eallYf[]
\akhmlaf_Y\]Õ[a]f[qlYpYkk]kke]fl& lYp :HJL!$oal``gd\af_lYpgf[geh]fkYlagf OL;!$Yf\\g[me]flYjqklYehlYp
<KL!^gjlYpYZd]q]Yjk)11.Yf\)11/&AF?hjgl]kl]\l`]Ykk]kke]flk&
The obligation to withhold tax on
compensation arises at the time the 9kl`];AJ^Yad]\lgY[lgfl`]hjgl]kl$AF?Õd]\YH]lalagf^gjJ]na]ooal`l`];gmjl
kYdYjqoYkhYa\gjY[[jm]\gjj][gj\]\ g^LYp9hh]Ydk ;L9!^gjl`][Yf[]ddYlagfg^l`]kYa\Ykk]kke]flk&L`];L9hYjlaYddq
YkYf]ph]fk]afl`]]ehdgq]jÌkZggck$ _jYfl]\AF?Ìkh]lalagfZmlkmklYaf]\l`]Ykk]kke]flk^gj\]Õ[a]f[qOL;^gj)11.
o`a[`]n]j[ge]kÕjkl& Yf\)11/$\]Õ[a]f[qgfk`gj]lYp^gj)11.$Yf\\]Õ[a]f[q<KLgfKh][aYdKYnaf_k
9[[gmflk KK9k!^gj)11.Yf\)11/&

AF?Yhh]Yd]\lgl`]Kmhj]e];gmjl&O`ad]l`][Yk]oYkh]f\af_$AF?YnYad]\alk]d^
g^l`]lYpYef]klqhjg_jYemf\]jJ9Fg&1,0(oal`j]kh][llgalk\]Õ[a]f[q<KL
and onshore tax liabilities.

L`];AJYj_m]\l`YlAF?akfglimYdaÕ]\^gjlYpYef]klqZ][Ymk]JE;Fg&)1%
*((0]p[dm\]k^jgel`][gn]jY_]g^l`]hjg_jYeÉ[Yk]ko`a[`o]j]jmd]\ZqYfq
[gmjl ]n]foal`gmlÕfYdalq!af^Yngjg^l`]:AJhjagjlgYef]klqYnYade]flg^l`]
lYphYq]j&ÊAF?[gmfl]j]\l`YlkYa\]p[dmkagfafl`][aj[mdYjakfgl^gmf\afJ9Fg&
1,0(Yf\alkaehd]e]flaf_jmd]k$Yf\l`Ylgfdq[Yk]k\][a\]\oal`ÕfYdalqYj]
]p[dm\]\^jgel`][gn]jY_]g^l`]lYpYef]klqhjg_jYe&

AF?YdkgYj_m]\l`YlalakfgldaYZd]^gjOL;gfalkY[[jm]\Zgfmk]kaf)11.Yf\
)11/$o`a[`o]j]hYa\afkmZk]im]flq]Yjk$Z][Ymk]l`]gZda_Ylagflgoal``gd\
lYpgf[geh]fkYlagfYjak]kYll`]lae]g^hYqe]flg^l`]kYdYja]kgjZgfmk]k$Yf\
fglmhgfY[[jmYd&L`];AJYj_m]\l`Yll`]Zgfmk]ko]j]\]l]jeaf]\af)11.Yf\
)11/Yf\j][g_far]\ZqAF?Yk]ph]fk]kYdl`gm_`\akljaZml]\afl`]km[[]]\af_
q]Yj&Kaf[]l`]Zgfmk]ko]j]fglkmZb][l]\lgoal``gd\af_lYpafl`]q]Yjl`]qo]j]
claimed as expenses, the same should be disallowed as deductible business expense.

Issues:

)& AkAF?]flald]\lgl`]aeemfala]kYf\hjanad]_]kmf\]jl`]lYpYef]klqmf\]jJ9
Fg&1,0(7

*& AkAF?daYZd]^gj\]Õ[a]f[qOL;7

Ruling:

)& Q]k$AF?ak]flald]\lgl`]aeemfala]kYf\hjanad]_]kmf\]jl`]lYpYef]klq
program.

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]p][mlgjqbm\_e]flkYj]]p[dm\]\^jgel`]hjg_jYe&L`mk$AF?akfgl
\akimYdaÕ]\^jgeYnYadaf_g^l`]lYpYef]klqhjg_jYe\mjaf_l`]h]f\]f[qg^
alkYhh]Ydg^l`]\]Õ[a]f[qlYpYkk]kke]flkZ]^gj]l`]Kmhj]e];gmjl&

AF?[gehda]\oal`Yddl`]j]imaj]e]flkmf\]jl`]lYpYef]klqdYo3l`mk$
l`]j]akfgegj]akkm]j]_Yj\af_alkdaYZadalq^gj\]Õ[a]f[q<KLgfalkKK9kYf\
onshore tax.

12 | Tax bulletin
*& Q]k$AF?akdaYZd]^gjOL;&

K][lagf/*g^l`])1//FAJ;SfgoK][lagf/1g^l`])11/FAJ;Uo`a[`klYl]k
l`YlÉS]n]jqU]ehdgq]jmaking payment of wages shall deduct and withhold
mhgfkm[`oY_]kYlYpÊemklZ]j]Y\Yf\[gfkljm]\af`Yjegfqoal`K][lagf
*1 B!g^l`])1//LYp;g\]SfgoK][lagf+, C!g^l`])11/LYp;g\]U$o`a[`
hjgna\]kl`YlYfqYegmfl$hYa\gjhYqYZd]$k`YddZ]Yddgo]\YkY\]\m[lagf
^jge_jgkkaf[ge]gfdqa^alakk`gofl`Yll`]lYpj]imaj]\lgZ]\]\m[l]\Yf\
oal``]d\^jgel`]Yegmfl`YkZ]]fhYa\lgl`]:AJ&

J]Y\af_l`]loghjgnakagfklg_]l`]j$l`]gZda_Ylagfg^l`]hYqgj']ehdgq]jlg
deduct and withhold the related tax arises at the time the income was paid or
Y[[jm]\gjj][gj\]\YkYf]ph]fk]afl`]hYqgjÌk']ehdgq]jÌkZggck$whichever
[ge]kÕjkl.

Kaf[]AF?Y[[jm]\gjj][gj\]\l`]Zgfmk]kYk\]\m[laZd]]ph]fk]afalkZggck$
its obligation to withhold the related tax due from the deductions for accrued
Zgfmk]kYjgk]Yll`]lae]g^Y[[jmYdYf\fglYll`]lae]g^Y[lmYdhYqe]fl&

Commissioner of Internal Revenue vs. Yumex Philippines Corporation


;L9 En Banc!;Yk]))+1hjgemd_Yl]\9m_mkl))$*()-

L`]kaemdlYf]gmkj][]ahlg^l`]H9F Facts:
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hjg[]kkYklYphYq]jkYj]\]hjan]\g^l`] H]lalagf]j;AJYkk]kk]\J]khgf\]flQme]pH`adahhaf]k;gjhgjYlagf QH;!^gj
ghhgjlmfalqlg[gfl]kll`]H9Foal`af Ydd]_]\\]Õ[a]f[qaf[ge]lYp$^jaf_]Z]f]ÕlklYp >:L!Yf\A9=L^gjlYpYZd]q]Yj
l`])-%\Yqh]jag\Ykhj]k[jaZ]\Zql`] *((/&QH;hYa\l`]\]Õ[a]f[qaf[ge]lYpYf\>:LYkk]kke]flk$Zml[gflafm]\lg
regulations. hjgl]kll`]A9=LYkk]kke]fl$Yj_maf_l`YlalakfglkmZb][llgA9=LZ][Ymk]alakY
H=R9%j]_akl]j]\]fl]jhjak]&
H=R9%j]_akl]j]\]fl]jhjak]kYj]]p]ehl
^jgel`]Aehjgh]jdq9[[memdYl]\ L`];AJ\]fa]\l`]hjgl]klYf\akkm]\Y>afYd<][akagfgf<akhml]\9kk]kke]fl
=Yjfaf_kLYp A9=L!&JJFg&(*%() j]al]jYlaf_l`]\]Õ[a]f[qA9=LYkk]kke]fl&QH;Õd]\YH]lalagf^gjJ]na]ooal`l`]
\g]kfgl\aklaf_mak`Z]lo]]fH=R9 ;L9&AfalkH]lalagf^gjJ]na]o$QH;Ydd]_]\l`Ylalj][]an]\gfl`]kYe]\YqZgl`
]fl]jhjak]k]fbgqaf_Af[ge]LYp@gda\Yq l`]Hj]daeafYjq9kk]kke]flFgla[] H9F!\Yl]\<][]eZ]j).$*()(Yf\l`]>gjeYd
gjl`]-kh][aYdlYp$lgimYda^ql`]eYk 9kk]kke]flFgla[] >9F!\Yl]\BYfmYjq)($*())&
]p]ehl^jgeA9=L&
L`];L9L`aj\<anakagf_jYfl]\l`]h]lalagfYf\gj\]j]\l`][Yf[]ddYlagfg^l`]
\]Õ[a]f[qA9=LYkk]kke]fl&Mhgf\]faYdg^alkEglagf^gjJ][gfka\]jYlagf$l`];AJ
Yhh]Yd]\lgl`];L9En Banc.

L`];AJYdd]_]\l`Ylkaf[]l`]akkm]g^l`]kYe]%\Yqj][]ahlg^l`]H9FYf\>9F
oYkf]al`]jjYak]\ZqQH;afalkH]lalagf^gjJ]na]ofgjafYfqg^alkhd]Y\af_k$l`]
Ykk]kke]flk`gmd\fglZ]afnYda\Yl]\&L`];AJYj_m]\l`Ylkaf[]QH;Y_j]]\lghYq
l`]Ykk]kke]flk^gj\]Õ[a]f[qaf[ge]lYpYf\>:L$alak]klghh]\^jgeim]klagfaf_
l`]nYda\alqg^l`]Ykk]kke]flhjg[]kk&L`];AJ^mjl`]jYj_m]\l`YlQH;`Ykl`]
burden of disproving there was improper accumulation of earnings.

Issues:

)& OYkQH;Ìkja_`llg\m]hjg[]kknagdYl]\o`]falj][]an]\Zgl`l`]H9FYf\l`]
>9Fgfl`]kYe]\Yq7

*& AkQH;kmZb][llgl`]A9=L7

Tax bulletin | 13
Ruling:

)& Q]k&QH;Ìkja_`llg\m]hjg[]kkoYknagdYl]\o`]falj][]an]\Zgl`l`]H9F
Yf\l`]>9Fgfl`]kYe]\Yq$Z][Ymk]aloYk\]hjan]\g^l`]ghhgjlmfalqlg
[gfl]kll`]H9Foal`afl`])-%\Yqh]jag\Yddgo]\mf\]jl`]jmd]k&Egj]gn]j$
l`]ajj]_mdYjakkmYf[]g^l`]H9FYf\>9FoYkaf^Y[ljYak]\YkYfakkm]afQH;Ìk
pleadings.

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l`]afnYda\alqg^l`]kmZb][lYkk]kke]fl^gj\]Õ[a]f[qA9=L&

*& Fg&O`ad]A9=L$YkYjmd]$akaehgkYZd]gf\ge]kla[[gjhgjYlagfk$l`]kYa\lYp
eYqfglZ]aehgk]\gf]fl]jhjak]k\mdqj]_akl]j]\oal`l`]H=R9hmjkmYfllg
J9Fg&/1).$Ykaehd]e]fl]\ZqJJFg&(*%()&

K][lagf, _!g^JJFg&(*%()\g]kfgl\aklaf_mak`Z]lo]]fH=R9]fl]jhjak]k
]fbgqaf_Af[ge]LYp@gda\Yq$gjl`]-kh][aYdlYpj]_ae]$gfalkj]_akl]j]\
Y[lanala]klgimYda^ql`]eYk]p]ehl[gjhgjYlagfk^gjA9=Lhmjhgk]k&

SGV t9kkmjYf[]tLYptLjYfkY[lagfkt9\nakgjq

About SGV & Co. 6*9 &RPDLQWDLQVRI¿FHVLQ0DNDWL&HEX'DYDR%DFRORG&DJD\DQGH2UR


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14 | Tax bulletin