Tax brief

August 2018

Punongbayan & Araullo (P&A) is the Philippine member firm of Grant Thornton International Ltd.
BIR ISSUANCES
RR 17-2018 Valuation of gifts made in property
RMO 28-2018 New and modified ATCs for individual income tax
RMO 29-2018 New ATCs for selected excise taxes
RMO 30-2018 Venue for refund of CWT/CGT on sale of real properties

RMOs 32 and 34-2018 Audit program for “small” category taxpayers

RMO 33-2018 Policies and procedures in the issuance of ATCA
RMC 62-2018 Tax compliance requirements on withdrawals from bank deposit accounts of a deceased
depositor

SEC ISSUANCES
SEC Memo Circular Amended guidelines and procedures on the use of corporate and partnership names
9 s. 2018
 BIR Issuances BIR Issuances
Valuation of gifts made in property FMV of units of participation in ATC Decription BIR Form New ATCs for selected excise taxes Venue for refund of CWT/ CGT on sale RDOs under RRs 1, 4, P 5 Million Pesos and
any association, recreation or of real properties 9A (except RDO Nos. below
11015 Business Income - 8% 1701/1701Q
(Revenue Regulations No. 17-2018, July 10, amusement club (golf, polo, Income Rate (Revenue Memorandum Order Nos. 29- 35- Romblon, 37- Oc-
2018) similar clubs), shall be the bid 2018 and 31-2018, July 3 and 10, 2018) (Revenue Memorandum Order No. 30-2018, cidental Mindoro and
11016 Mixed Income - 8% 63- Oriental Mindoro),
price nearest the date of donation July 10, 2018)
Income Tax Rate 9B (except RDO No.
> BIR Issuances Gifts in the form of property shall be published in any newspaper or > BIR Issuances The following new Alphanumeric Tax 62- Marinduque), 11, 12,
valued at (1) Fair Market Value (FMV) as publication of general circulation. 11017 Income from Profes-
Codes (ATCs) shall be used in remitting To align with the venue for payment of the 13, 16, and 19
> SEC Issuances sion - 8% Income Tax > SEC Issuances
determined by the Commissioner, or (2) rate excise tax: CWT/CGT on sale of real properties, the
FMV as shown in the schedule of values In the case of right to usufruct, RDO No. 36 P 3Million Pesos and
> Highlight on processing of claims for refunds of erro-
> Highlight on below
fixed by the provincial and city assessors, use or habitation, as well as that ATC Decription Legal BIR neously paid CWT/ CGT on sale of real
P&A Grant whichever is higher, at the date when the of annuity, the probable life of the P&A Grant RDOs under RRs 2, 3, P 2Million Pesos and
Modified ATCs for taxpayers subject to Basis Form properties shall now be under the RDO
Thornton donation is made. beneficiary in accordance with Thornton having jurisdiction over the place where
10, 14, 15, 17, 18, 35, 37, below
regular income tax XP105 Naphtha and py- RA 2200-P 62 and 63
services the latest basic standard services rolysis gasoline 10963 the subject property is located.
In the case of shares of stocks, the FMV mortality table shall be taken into (used as raw The rule applies regardless of whether or
ATC Decription BIR Form Below are the relevant audit policies and
shall depend on whether the shares are consideration. materials) not the claimant is a registered taxpayer guidelines for the audit:
listed or unlisted in the stock exchanges. 11011 Pure Compensation 1701/1701Q XP085 Pyrolysis gas- in the said RDO.
11012 Business Income oline
• Issuance of eLA shall be limited
• Unlisted common shares are New and modified ATCs for individual 11013 Mixed Income XP165 Liquefied petro- to taxpayers who have not been
valued based on their book value income tax leum gas Audit program for “small” category
11014 Income from Profession audited/investigated for the last
while unlisted preferred shares XP200 Petroleum Coke taxpayers three (3) years.
are valued at par value. In deter (Revenue Memorandum Order No. 28-2018,
XP210 Petroleum Coke
mining the book value of common July 3, 2018) (Revenue Memorandum Order Nos. 32 and
when used as • One eLA shall be issued for each
shares, the appraisal surplus and feedstock 34-2018, July 11, 2018) taxable year. The eLA shall include
the value assigned to preferred The following new and modified Alphanu-
XG065 Hybrid Vehicles 2200- AN examination of all internal revenue
shares, if any, shall not be con- meric Tax Codes (ATCs) shall be used in Pursuant to Revenue Memorandum Order
XG068 Purely Electric tax liabilities of the taxpayer,
sidered. The Adjusted Net Asset BIR Form 1701 (Annual Income Tax Return (RMO) No. 32-2018, as amended by RMO
Hybrid Vehicles except when a specific tax type
Method as provided for Self-Employed Individuals, Estates and 34-2018, electronic Letters of Authority
XG055 Pick-ups had been previously examined
RR No. 06-2013 shall not be ap- Trusts) and 1701Q (Quarterly Income Tax (eLAs) shall be issued to taxpayers with the (e.g. VAT audit).
plied in the valuation of shares. Return for Individuals, Estates and Trusts): XG010 Invasive cosmet- 2200- following amount of gross sales/receipts
ic procedures C/0605 declared in the tax returns for taxable year • The eLA, together with the Notice
• Listed shares’ FMV shall be XP220 Additives for 2200- P 2017: for the Presentation/Submission
based on the arithmethic mean Newly created ATCs for taxpayers availing lubricating oils
and greases of Documents/Records with
between the highest and lowest 8% income tax, in lieu of regular income Areas Gross Sales/ Re- checklist of requirements shall be
quotation at a date nearest the tax and percentage tax ceipts personally delivered by a BIR
date of donation, if none is avail
RDOs under RRs 5, 6 P 10Million Pesos and employee to the taxpayer,
able on the date of donation. (except RDO 36- Puer- below or delivered through a courier
to Princesa), 7, and 8
company.

Tax brief – August 2018 3 Tax brief – August 2018 4

 BIR Issuances
• The taxpayer shall have 10 days
to submit the required
documents/records. Failure to
submit within the 10-day period
shall result to issuance of a
> BIR Issuances reminder letter giving an
additional 5 days to comply.
> SEC Issuances Failure to submit within the 5-day
period shall result to issuance of
> Highlight on
Subpoena Duces Tecum. No
P&A Grant further extension to submit
Thornton documents shall be allowed.
services
• The audit shall be conducted mission. The prohibited names include
without field investigation. The
report of investigation shall be tion” (INTERPOL), “International Monetary
submitted by the Revenue
Officers (RO) to the Review and
Evaluation Section in the
Assessment Division within 90
days from the issuance of the eLA.
Thus, submission of the
supporting documents/records
and reconciliations must be
completed prior to the end of the
90-day period.
Tax brief – August 2018
SEC Issuances
Amended guidelines and procedures on
the use of corporate and partnership
names
(SEC Memorandum Circular No. 9 s. 2018,
> BIR Issuances July 18, 2018)
> SEC Issuances Pursuant to the revised guidelines on the
use of corporate and partnership names,
> Highlight on
the name of an international government
P&A Grant organization may not be used as part of
Thornton a corporate or partnership name unless
services duly authorized or allowed by the com-
“International Criminal Police Organiza-
Fund” (IMF), and “International Labour
Organization” (ILO).
The amendment is to prevent formation of
bogus organizations that could potentially
misrepresent itself as an affiliate of an
international governmental organization.
5 Tax brief – August 2018 6
 Tax brief is a regular publication of Punongbayan & Araullo

Highlight on P&A Grant Thornton services

(P&A) that aims to keep its clientele, as well as the general
public, informed of various developments in taxation and
other related matters. This publication is not intended to be
a substitute for competent professional advice. Even though
careful effort has been exercised to ensure the accuracy
of the contents of this publication, it should not be used as
the basis for formulating business decisions. Government
Tax Opinions and Studies pronouncements, laws, especially on taxation, and official
interpretations are all subject to change. Matters relating to
> BIR Issuance taxation, law and business regulation require professional
We conduct tax studies and provide advice to clients on the tax counsel.
> BIR Ruling implications of specific transactions based on relevant laws,
> SEC Opinion regulations, court decisions, rulings, and other relevant issuances. We welcome your suggestions and feedback so that the Tax
brief may be made even more useful to you. Please get in
> CTA Decision We likewise provide recommendations to address or mitigate tax touch with us if you have any comments and if it would help
> Highlight on issues arising from said transactions. you to have the full text of the materials in the Tax brief.
P&A Grant
Lina Figueroa
Thornton Principal, Tax Advisory and Compliance Division
services T +632 988-2288 ext. 520
E Lina.Figueroa@ph.gt.com

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