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.

Under Section 34(D) of the Tax Code, the NOLCO may only be utilized for the next three (3) consecutive
taxable years following the year of such loss. However, under Section 4(bbbb) of RA No. 11494, as
implemented by RR. 25-2020, 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 five (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.

5. Bureau of Internal Revenue – Revenue Regulation No. 26-2020 – Implements Section 4 (zzz) of the
Bayanihan to Recover As One Act. Donors of personal computers, laptops, tablets, or similar equipment
for use in teaching and learning in public schools shall be entitled to the following tax incentives:

i. Deduction from gross income of the amount of contribution/donation.

 ii. Exemption from donor’s tax.
iii. In case of foreign donation, the following donation shall be exempt from VAT: (i) donation
by the DEPED, CHED, TESDA, or (ii) donation by an importer/consignee to the DEPED, CHED,
TESDA provided the importer/consignee can present a Deed of Donation accepted by the
said agencies. The donated goods can be released by the BOC without the need of
Authority to Release Imported Goods (ATRIG).
iv. In case of local donation, (i) donated personal computers, laptops, tablets, or similar
equipment that are originally intended for sale or use in the business shall not be treated as
transaction deemed sale subject to VAT, and(ii) any input VAT attributable to the purchase
of the donated personal computers, laptops, tablets, or similar equipment not previously
claimed as input tax shall be credited against any output tax.

No prior determination or ruling by the BIR shall be required for purposes of availment of the tax
incentives under this RR.

6. Bureau of Internal Revenue – Revenue Regulation No. 27-2020 – Implements Section 4 (tt) of the
Bayanihan to Recover As One Act suspending the filing and 90-day processing of VAT Refund Claims.

The processing of VAT refund claims shall be suspended during the effectivity of the Bayanihan to
Recover As One Act or until the next adjournment of the 18 th Congress on December 19, 2020.

The deadline for filing VAT refund claims whose prescription fall during the effectivity of the Act shall be
extended to the following dates:

Taxable Quarter Deadline

calendar quarter ending September 30, December 31, 2020
2018
Fiscal quarter ending October 31 ,2018 January 15, 2021
Fiscal quarter ending November 30, 2018 January 31, 2021
Calendar quarter ending December 31, 2018 February 15, 2021

In areas under ECQ or MECQ, the following shall be observed:

i. If the deadline for filing VAT refund claim falls within the ECQ or MECQ period, the filing
shall be extended for 30 days after the lifting of the ECQ or MECQ.
ii. The 90-day period for processing VAT refund claims is suspended during the ECQ or MECQ
and shall resume 30 days after the lifting.
iii. In case were the processing office is required temporary closure, the 90-day processing of
VAT refund claims shall be suspended until the last day of the quarantine period for the
affected processing office.

7. Bureau of Internal Revenue – Revenue Regulation No. 28-2020 - Implements Section 4 (cc) of the
Bayanihan to Recover As One Act on the Incentives for the Manufacture or Importation of Certain
Equipment, Supplies or Goods. Under the RR, importation from June 25, 2020 to December 19, 2020 of
the following goods shall be exempt from VAT, Excise Tax and other fees:

i. Personal Protective Equipments (PPEs)

 ii. Equipment for waste management
iii. Inputs, raw materials, and equipment necessary for the manufacture or production of
essential goods related to the containment or mitigation of COVID-19.

To qualify for the exemption, the importer must present a Certification from the DTI that the equipment
or supplies are not locally available or of insufficient quality and preference. The importation of the
above goods shall not be subject to the issuance of the ATRIG and may be released without need
thereof.

Donations of the imported articles to or for the use of the National Government or any entity created by
any of its agencies not conducted for profit, or to any political subdivision of the Government are
exempt from donor's tax and subject to the ordinary rules of deductibility under existing rules and
issuances.

The VAT on all qualified importations that have been paid from June 25,2020 up to September 14,2020
shall be refunded provided that the input tax have not been reported and claimed in the monthly and/or
quarterly VAT returns.

Inputs, raw materials, and equipment necessary for the manufacture of essential goods of medical grade
related to the containment of COVID-19 as determined by the FDA-DOH, whether local or imported,
shall also be exempt from VAT

Regardless, the sale of the finished goods/product, whether locally manufactured or imported, is subject
to VAT. The sale of inputs, raw materials, and equipment to a non-holder of “License to Operate” issued
by the FDA-DOH shall also be subject to VAT.

8. Bureau of Internal Revenue – Revenue Regulation No. 28-2020 - Implements provisions of the
Bayanihan to Recover As One Act relative to the tax exemptions of certain income payments. Under the
RR, the following shall be excluded from gross income and shall not be subject to income tax:

i. Retirement benefits received by officials and employees of private firms from June 5, 2020
to December 31, 2020 provided that the amount received is in accordance with a retirement
plan duly registered with the BIR.
ii. COVID-19 Special risk allowance
iii. Actual Hazard Duty Pay given to temporary Human Resources for Health (HRH) serving in
the front line during the state of emergency due to COVID-19.
iv. Compensation paid to private and public health workers who contracted COVID-19 in the
line of duty. In case of death, the amount shall not be subject to estate tax.

The above income payments shall be included in the Alphabetical List of Employees/Payees being
submitted annually by employers.

8. Bureau of Internal Revenue – Revenue Memorandum Order No. 38 -2020 – Provides the guidelines
and procedures in the VAT refund claims on imported drugs prescribed for diabetes, high cholesterol,
and hypertension as implemented under RR No. 18-2020.
9. Bureau of Internal Revenue – Revenue Memorandum Circular No. 101-2020 – 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.

10. Bureau of Internal Revenue – Revenue Memorandum Circular No. 102-2020 – 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.

11 Bureau of Internal Revenue – Revenue Memorandum Circular No. 103-2020 – 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.

12. Bureau of Internal Revenue – Revenue Memorandum Circular No. 108-2020 - Circularize the
availability of BIR Form Nos. 2119 (Voluntary Assessment Payment Program [VAPP] Application Form
and BIR Form No. 0622 (VAPP Payment Form) pursuant to RR No. 21-2020.

13. Bureau of Internal Revenue – Revenue Memorandum Circular No. 110-2020 – Clarifies the proper
modes of service of an electronic Letter of Authority (eLA).

The eLA shall be served to the taxpayer through personal service at his/her registered or known address
or wherever he/she may be found. In case personal service is not possible, the eLA shall be served either
by substituted service or by mail. However, substituted service can only be resorted to when the
taxpayer is not present at the registered or known address.

14. Bureau of Internal Revenue – Revenue Memorandum Circular No. 111-2020 – Clarifications on issues
relative to the VAPP pursuant to RR No. 21-2020.

15. Bureau of Internal Revenue – Revenue Memorandum Circular No. 112-2020 – Postpone effectivity of
the enlisting/delisting of Large Taxpayers to January 1, 2021.

16. Bureau of Internal Revenue – Revenue Memorandum Circular No. 113-2020 – Published the full text
of the Letter from the DOF to amend the effectivity date of RA No. 11467 which provides for the VAT
exemption of sale or importation of prescription drugs and medicines for diabetes, high cholesterol, and
hypertension beginning January 1, 2020, and increase in excise taxes on alcohol products, tobacco
products and e-cigarettes.

Under the Letter, the RA No. 11467 has been effective beginning January 23, 2020.

17. Bureau of Internal Revenue – Revenue Memorandum Circular No. 114-2020 – Provides the
guidelines and procedures in filing BIR Form No. 2200-S in eFPS for the excise tax on sweetened
beverages and to exclude BIR Form No. 0605 for payment of excise tax.

18. Bureau of Internal Revenue – Revenue Memorandum Circular No. 115-2020 – Informs concerned
property owners that the Certificate of Zonal Values or Real Properties shall only be issued by the
concerned RDOs having jurisdiction over the property location and the same shall be used by the
applicant in their transactions with other government offices or private entities.

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.

LABOR

1. Department of Labor and Employment - DOLE Labor Advisory No. 28 – Provides the guidelines on the
payment of the Thirteenth Month Pay.

The employer shall pay the 13th month pay on or before December 24, 2020 and no request or
application for exemption from payment or deferment thereof shall be accepted and allowed. The
employers shall make a report of their compliance to the nearest Regional Offices not later than January
15, 2021.

2. Department of Trade and Industry and Department of Labor and Employment – DTI Memorandum
Circular No. 20-53– Prescribes the recategorization of travel agencies, tour operators, reservation
service, and related activities from Category IV to Category III. Thus the said entities are allowed to
reopen at 50% operational capacity for areas under GCQ and 100% capacity for areas under MGCQ.

3. Department of Trade and Industry and Department of Labor and Employment – DTI Memorandum
Circular No. 20-54– Lift the quantity limits for the following products: (i) disinfecting alcohols, (ii) hand
sanitizers, (iii) disinfecting liquids, (iv) face masks (N95 and N88)

4. Department of Trade and Industry and Department of Labor and Employment – DTI Memorandum
Circular No. 20-55– Ease the control measures in malls and commercial centers upon strict
implementation of the Seven Commandments.

Malls and commercial centers are now allowed to: (i) set/regulate the air conditioning temperature to
lower than 24 degrees centigrade; (ii) turn on free WiFi for customers; and (iii) conduct mall-wide sales
promotion activities and marketing events.
However, there will be strict implementation of the Seven Commandments to wit: (i) wearing of proper
facemasks; (ii) wearing of faceshields; (iii) no talking eating in public transportation or confined and
crowded areas; (iv) adequate ventilation; (v) frequent and proper disinfection; (vi) symptomatic or
COVID-19 positives shall be isolated; and (vii) appropriate physical distancing.

For your information and guidance.