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Atty. Jonathan P. Capanas, CPA
Revenue Regulations No. 4-2013 – Required
(Related issuances : RR 11-2004, RMO 92006 and RMO 19-2007) Revenue Regulations No. 9-2013 – Requiring
Machine Identification No. and sticker for the use of CRM and/or business/sale machine generating receipts and invoices.
payment of the amount offered as compromise settlement before the application will be entertained. (related issuance: RR 30-2002)
Requirements for deductibility of certain income payments. “No withholding, no deduction.” (related issuance: RR 2-98) abatement or cancellation of internal revenue liabilities (penalties and/or interest due to “Failure to beat bank cut-off”)
(related issuance: RR 13-2001)
Revenue Regulations No. 4-2012 – about
clothing allowance increased to P5.000. 8-2012 – De minimis benefits. (related issuances: RR 10-2018. RR 5-2011) Revenue Regulations No. . 12-2012 – prescribes the limitations for deductibility of depreciation expense on vehicles as well as the corresponding input taxes.Revenue Regulations No. RR 52008.
(related issuance: RR 16-2005) Revenue Regulations No. 14-2012 – Proper treatment of interest income on financial instruments & other related transactions. House and lot or other residential dwelling.Revenue Regulations No. . 13-2012 – VAT treatment of adjacent residential lots.
15-2012 – Guidelines on the accreditation of Printers. 18-2012 – Guidelines on the issuance of Authority To Print (ATP) . Revenue Regulations No.Revenue Regulations No.
Revenue Memorandum Order No. (Related law: RA 10021. Information Act of 2010) the Exchange of . guidelines and procedures in processing specific requests for information pursuant to the exchange of information provision of the tax treaties. 2-2013 – Prescribes the policies.
RMO . 20-2013 – Policies and guidelines in the issuance of tax exemption rulings to exempt organizations under Section 30 of the Tax Code.Revenue Memorandum Order No. (related issuances: RMO 35-2002. 21-2013 – 20-2006) Policies and guidelines on the issuance of ATRIG. Revenue Memorandum Order No.
3-2013 – clarification pertaining to some issues on depreciation expense limit involving vehicle.Revenue Memorandum Circular No. (related issuance RR12-2012) Revenue Memorandum Circular No. 4-2013 – Requiring Tax-exempt hospitals to secure revalidated tax-exempt ruling or certificate. .
6-3013 – Clarifies taxpayers’ concerns on audit program & their responsibility in engaging tax agents/practitioners.Revenue Memorandum Circular No. 9-2013 - Clarifies the taxability of association dues. membership fees and other assessments/charges collected by the Homeowners Associations. Magna Carta Homeowners and Homeowners Association) for . (related law: RA 9904. (related issuance: RR 11-2006) Revenue Memorandum Circular No.
Revenue Memorandum Circular No.Revenue Memorandum Circular No. 11-2013 – BIR Priority Programs for CY 2013. . 16-2013 – Clarifying the tax implications and recording of deposits/cash advances not covered by RMC 89-2012.
172013 establishing the priority program for the Bureau of Customs.Revenue Memorandum Circular No. 37-2013 – publishes the full text of DOF Order No. 38-2013 – clarifies issuances: RMC 6-2013. RMO 88-2010) . the implication of legal petition notices/declarations and similar documents on the audit/assessment process. (related Revenue Regulations No. RMO 45-2010.
. 39-2013- clarifies the guidelines on the receipt of protest letter on final Assessment Notices & Final Decision on Disputed Assessments. 50-2013 – clarifies about the “Tentative Income Tax Return” being filed by the taxpayer. (related issuance: RR 12-99) Revenue Memorandum Circular No.Revenue Memorandum Circular No.
in Revenue Memorandum Circular No. 55-2013 – . 53-2013 – Taxability of donations given to Homeowners Associations. Reiterates the taxpayers’ obligations relation to online business transactions.Revenue Memorandum Circular No.
RAMO 198 audit guidelines. RMO 23-2009 Audit of selected TPs by the NID. 2-2013 – Transfer Pricing Guidelines.Revenue Regulations No. (related issuances: RMC 26- 2008 interim transfer pricing guidelines. RMO 26-84 determination of transfer pricing) . RMO 36-2010 Conglomerate audit for TY 2009.
As published. . it has 23 pages It contains 17 sections.
Comparability analysis Section 7 .Purpose of the Regulations Section 3 . .Definition of terms Section 5 .Section 1 .Authority of the Commissioner to allocate income and deductions Section 4 .Arm’s length principle Section 6 . Section 8 – Determination of the arm’s length results.Identification of tested party and the appropriate transfer pricing method.Objectives & Scope Section 2 .
Advance pricing arrangements and mutual agreement procedure Section 12 .Section 9 .Documentation Section 13 .Repealing clause Section 17 .Comparability adjustment Section 10 .Arm’s length pricing methodologies Section 11 .Effectivity .Penalties Section 14 -Transitory provisions Section 15 .Separability clause Section 16 .
4. 6. 8. 2. 7. 1. 5. 3. Comparable transaction Comparable uncontrolled transaction Associated enterprises Control Controlled transaction Independent enterprises or parties Advance Pricing Arrangement (APA) Mutual Agreement Procedure (MAP) .
Requires the transaction with a related party to be made under comparable conditions and circumstances as a transaction with an independent party. . It is founded on the premise that where market forces drive the terms and conditions agreed in an independent party transaction. the pricing of the transaction would reflect the true economic value of the contributions made by each entity in that transaction.
.Step 1: Conduct comparability analysis Step 2: Identify the tested party and the appropriate transfer prising method Step 3: Determine the Arm’s Length results To present a logical and persuasive basis to demonstrate that transfer prices set between associated enterprises conform to the principle.
c. e. b. d.a. Comparable Uncontrolled Price (CUP) Method Resale Price Method (RPM) Cost Plus Method (CPM) Profit Split Method (PSM) Transactional Net margin Method (TNMM) .
Lower export sales prices are not attributable to the relationship between the Petitioner and the Buyers but to the competitive market. 6802. CIR CTA Case No. 2006 Domestic selling price is not a benchmark price for export sales because the export & domestic markets are two different markets. 31.Avon Products Mftg. vs. Aug. Inc. .
. The CTA finds the petitioner’s evidence sufficient to establish its position that the prices of its export sales may be lower than its local sales. taking into account respondent’s lack of evidence to support his assertion.
trades or businesses owned or controlled directly or indirectly by the same interests . Transactions with affiliates are inter-related transactions & must be considered as arm’s length transactions. Arms-length pricing is the price an unrelated party would have paid under similar circumstances for the property involved in a transaction between two or more organizations. .
“We are not convinced that the manner of imposing "imaginary" income against petitioner is justifiable under the present situation. there are factors to be considered in determining the application of arm's length pricing. As correctly explained by petitioner.” .
apportion and allocate do not include the power to impute an "arms-length" interest rate or imaginary interest income. The CIR has no authority to make an imputation of an imaginary interest income because his power to distribute. .
Under the method. 12 Merten's Law of Federal Income Taxation. 164) . (Vol. $451. with certain adjustments. It correctly averred that respondent adopted the "comparable uncontrolled price method" in determining the arm's-length pricing of its products. the arm's-length price of a sale between group members (controlled sale) is equal to the price paid in comparable sales in which the sellers and the buyers are not members of the same controlled group (uncontrolled sales).55. p.
. By provision of law. uncontrolled sales are considered comparable to controlled sales if the physical property and circumstances involved in the uncontrolled sales are identical to the physical property and circumstances involved in the controlled sales. . Treasury Regulations 1. intangible property associated with the sale. Some of the differences which may affect the price of property are differences in the quality of the product. . terms of sale. or if such properties and circumstances are so nearly identical that any differences either have no effect on price.S. “(U. . or such differences can be reflected by a reasonable number of adjustments to the price of uncontrolled sales. time of sale. Section 482-2(e)(2)) . . and the level of the market and the geographic market in which the sale takes place .
(Merriam Webster's Dictionary. (U. It can be gleaned readily from the facts that the physical property and circumstances in the processing and sale of petitioner's products are not "identical" or "so nearly identical that any difference can either have no effect on price. Treasury Regulations. There was no apparent attempt to verify with technical circumspection the comparability of the products in question. respondent gathered her findings in an arbitrary. unreasonable and capricious manner." the compared products must be exactly or essentially alike. . ibid) By the adjective "identical" or the phrase "so nearly identical. or such difference can be reflected by a reasonable number of adjustments to the price" of Pfizer's products.) Even if penicillin could be established to be a part of vigofac. In conclusion. it would remain physically distinct and beyond compare with aurofac.S. This also applies with minocycline and doxycycline.
Those adjustments for nearly identical products could either refer to addition of ingredients such as vitamins. In other words. . or differences in the production process and the like but the main component or essential materials between the compared products must be a like. comparability must be based on generic similarity before any adjustments can be considered. minerals and amino acids.
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