Dear Valued Clients,

 
Please see the recent issuances of the following government agencies:
 
A. TAXATION 
 
1. Bureau of Internal Revenue – Revenue Regulation No. 23-2020 – Implements Section 6 of RA No.
11494 or the “Bayanihan to Recover as One Act”. Upon effectivity of RA No. 11494, tax on shares of
stock sold, bartered, exchange or other disposition through Initial Public Offering (IPO) of shares of stock
in closely held corporations shall no longer be subject to tax imposed under Section 127 (B) of the NIRC.

2. Bureau of Internal Revenue – Revenue Regulation No. 24-2020 – Implements Section 4(uu) of RA No.
11494 exempting loan term extensions or restructuring from documentary stamp tax.

RR No. 24-2020 shall cover:

i. All extensions of payments and/or maturity periods of all loans, including but not limited to,
salary, personal, housing, commercial, and motor vehicle loans, amortizations, financial lease
payments, and premium payments, as well as credit card payments falling due, or any part
thereof, on or before December 31, 2020.

ii. Extension of maturity periods that may result from the grant of grace periods for the above
payments, whether or not such maturity period originally fall due on or before December 31,
2020.

iii. Credit restructuring, micro-lending including those obtained from pawnshops, and extensions
thereof made on or before December 31, 2020.

3. Bureau of Internal Revenue – Revenue Regulation No. 25-2020 – Implements Section 4(bbbb) of RA
No. 11494 on the deduction from gross income of the Net Operating Loss Carry-Over (NOLCO) incurred
by businesses or enterprises for taxable years 2020 and 2021.

Unless otherwise disqualified from claiming the deduction, businesses or enterprise which incurred net
operating loss for taxable years 2020 and 2021 shall be allowed to carry over the same as a deduction
from its gross income for the next 5 consecutive taxable years immediately following the year of such
loss. The carry over may be made even after the expiration of RA No. 11494 provided that the net
operating loss are claimed within the next 5 consecutive taxable years immediately following the year of
such loss.

The NOLCO shall be separately shown in the taxpayer’s ITR (and in the Reconciliation Section of the ITR)
while the unused NOLCO shall be presented in the Notes of the AFS showing in detail (i) the taxable year
in which the net operating loss was sustained or incurred and (ii) any amount claimed as NOLCO
deduction within 5 consecutive years immediately following the year of such loss.

The NOLCO for taxable year 2020 and 2021 shall be presented in the Notes to the AFS separately from
the NOLCO for other taxable years.

Failure comply with the foregoing requirement will disqualify the taxpayer from claiming the NOLCO.
4. Bureau of Internal Revenue – Revenue Memorandum Circular No. 101 – Supplements RMC No. 62-
2020 which published the initial list of VAT-exempt drugs for hypertension, diabetes, and high
cholesterol provided by the FDA in the letter dated March 2, 2020.

5. Bureau of Internal Revenue – Revenue Memorandum Circular No. 102 – Prescribes the revised format
of the Notice of Discrepancy pursuant to RR No. 22-2020 to afford taxpayers with an opportunity to
present and explain their side on the discrepancies found as a result of the audit/investigation of their
tax liabilities.

6. Bureau of Internal Revenue – Revenue Memorandum Circular No. 103 – With the launching of the
Digital Personal Equity and Retirement Account (PERA) platform, OFWs who do not have any TIN are
being required to secure their TINs before they can open an account with banks and become eligible to
invest in the PERA. All OFWs can submit their application for TIN through (i) their authorized
representative or (ii) via electronic mail application.

B. CORPORATE
 
1. Securities and Exchange Commission - Notice dated September 21, 2020 on the Implementation of
Mandatory Grace Period for all Loans Pursuant to the Bayanihan To Recover As One Act – With the
effectivity of RA No. 11494 on September 15, 2020, all Financing Companies (FC), Lending Companies
(LC), and Microfinance NGOs (MF-NGO) are required to implement a one-time 60-day grace period for
all loans that are existing, current and outstanding, falling due or any part thereof on or before
December 31, 2020, regardless of whether the borrower has a single loan or multiple loans with the
subject FC, LC, or MF-NGO.

No interest, penalties, fees, or other charges shall be charged during the mandatory one-time 60-day
grace period to future payments or amortizations of the borrowers. FCs, LCs, and MF-NGOs are
prohibited from requiring their clients to waive the application of the provision of RA NO. 11494 and any
waiver previously executed by borrowers covering payments falling due until December 31, 2020 shall
not be valid.

Accrued interest for the one-time 60-day grace period may be paid on a staggered basis until December
31, 2020 and shall not preclude the borrower from paying the same in full on the new due date.

Lastly, the parties may agree on a grace period longer than 60 days and/or the payment of accrued
interest on a staggered basis beyond December 31. 2020.

For your information and guidance.