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

If shares of stock, which are not listed
and traded on the stock exchange, are
sold for less than their FMV, the excess
of the FMV over the selling price shall be
subject to donor’s tax.
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$lg
imYda^ql`]eYk]p]ehl^jgeA9=L& (Page 13)
BIR Rulings
BIR Ruling No. 194-15 dated June 10, 2015
Facts:
9;g&gofk)((g^l`]k`Yj]kaf:;g&$Y\ge]kla[[gjhgjYlagf]f_Y_]\afl`]
Zmkaf]kkg^eYfm^Y[lmjaf_afcb]lhjafl]jk&<m]lg\][daf]afj]n]fm]Yf\hjgÕl
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

Transactions of a cooperative which are
not related to its principal business are
subject to tax.
Manpower agencies, such as those
providing janitorial and clerical services,
are subject to VAT on their gross
receipts based on the whole contract
price.
4 | Tax bulletin
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
Facts:
;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
Facts:
9;g&$YeYfhgo]jY_]f[q]f_Y_]\afl`]Zmkaf]kkg^hjgna\af_bYfalgjaYdk]jna[]k$
bgaf]\YhmZda[Za\\af_[gf\m[l]\Zql`]DYf\LjYfkhgjlYlagfG^Õ[] DLG!&Af
[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.

HjgÕlkj]eall]\ZqYH`adahhaf]ZjYf[`
lgalk`]Y\g^Õ[]afBYhYfYj]kmZb][l
lgl`]hj]^]j]flaYd)(:HJLjYl]mf\]j
l`]Hjglg[gdlgl`]H`adahhaf]k%BYhYf
LYpLj]Ylq&
Purchases of supplies and services
ZqYf9mkljYdaYfÕjeafl`][gmjk]
g^aehd]e]flaf_YfY[lanalq$o`a[`ak
^mf\]\Zql`]?gn]jfe]flg^9mkljYdaY
mf\]jl`]JH%9mkljYdaY?9<;$Yj]
subject to 0% VAT, while importations of
professional and technical materials are
exempt from VAT.
BIR Ruling No. ITAD 204-15 dated June 5, 2015
Facts:
9;g&$YBYhYf]k][gjhgjYlagf$akda[]fk]\lg\gZmkaf]kkafl`]H`adahhaf]kl`jgm_`
alk9;g%H`ad:jYf[`&9;g%H`ad:jYf[`j]eall]\hjgÕlklg9;g&
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
Facts:
9;g&$Yf9mkljYdaYfÕje$oYkkmZ[gfljY[l]\Zql`]?gn]jfe]flg^9mkljYdaYlg
aehd]e]flYhjg_jYe[j]Yl]\Yf\^mf\]\Zql`]9mkljYdaYf_gn]jfe]flhmjkmYfl
lgl`]JH%9mkljYdaY?9<;&9khYjlg^l`]aehd]e]flYlagf$9;g&hmj[`Yk]khjgb][l
supplies and services and imports professional and technical materials into the
Philippines.
Issues:
)& 9j]l`]dg[Ydhmj[`Yk]kg^hjgb][lkmhhda]kYf\k]jna[]kg^9;g&kmZb][llg(
VAT?
*& 9j]l`]aehgjlYlagfkg^hjg^]kkagfYdYf\l][`fa[YdeYl]jaYdkg^9;g&]p]ehl
from VAT?
Ruling:
)& Q]k&<aj][lhmj[`Yk]koal`afl`]H`adahhaf]kg^hjgb][lkmhhda]k$]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

L`]hmj[`Yk]g^YfYmlgegZad]ZqYf
g^Õ[]jg^l`]O@G^gj`akh]jkgfYdmk]
is subject to VAT and excise tax.
JE;Fg&,-%*()-[dYjaÕ]kl`]N9L
oal``gd\af_gfhjgb][lk^mf\]\Zql`]
G=;>mf\]jl`]=p[`Yf_]g^Fgl]k
Z]lo]]fl`]?gn]jfe]flkg^l`]
H`adahhaf]kYf\BYhYf&
6 | Tax bulletin
BIR Ruling No. ITAD 238-15 dated July 27, 2015
Facts:
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
Revenue Memorandum Circular No. 45-2015 dated August 24, 2015
 Mf\]jl`]=p[`Yf_]g^Fgl]kZ]lo]]fl`]H`adahhaf]kYf\BYhYfgfG=;>%
funded projects undertaken in the Philippines, a standard provision is that
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

JEGFg&).%*()-Ye]f\kJEGFg&
)1%*()*\Yl]\Bmdq+)$*()*$o`a[`
provides the guidelines of the VAT Audit
Hjg_jYeg^l`]DLK&
*& 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++/&
Revenue Memorandum Order No. 16-2015 dated July 21, 2015
 L`]hjgnakagfkg^JEGFg&)1%*()*Yj]Ye]f\]\lgj]Y\Yk^gddgok2
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

;EGFg&*,%*()-hj]k[jaZ]kl`]
procedures in processing the importer’s
or consignee’s requests for an extension
g^l`]h]jag\lgÕd]]fljq\][dYjYlagfk$
continuous processing of entries,
untagging of abandonment and other
similar requests, in order to establish
a clear, transparent and effective
procedure in the disposition of deemed
abandoned articles.
8 | Tax bulletin
*&,&+&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
Customs Memorandum Order No. 24-2015 dated July 26, 2015
• General Provisions
 9faehgjlYlagfak\]]e]\YZYf\gf]\2
 O`]fl`]gof]j$aehgjl]j$[gfka_f]]g^l`]aehgjl]\Yjla[d]]phj]kkdq
ka_fa^a]kafojalaf_lgl`];mklgek;gdd][lgj`akafl]flagflgYZYf\gf3
or
 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

;aj[mdYjFg&00-hj]k[jaZ]kl`]
guidelines for the segregation of
customer funds and securities received
ZqZYfckafl`]h]j^gjeYf[]g^l`]aj
securities brokering functions.
 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
BSP Circular No. 885 dated August 14, 2015
 HYjlAPg^l`]EYfmYdg^J]_mdYlagfk^gj:Yfck EGJ:!akYe]f\]\lghj]k[jaZ]
the guidelines governing the segregation of customer funds and securities
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

K=;E;Fg&1]pl]f\k^gjl`]dYkllae]
lg+)<][]eZ]j*()-l`]h]jag\^gj
amending the Articles of Incorporation
or Articles of Partnership on the
hjaf[ahYdg^Õ[]Y\\j]kk&
L`]ZgYj\g^\aj][lgjkeYqZ]h]jeall]\
lg[gflafm]YkÉljmkl]]kÊlg[gehd]l]
the corporate liquidation even after the
l`j]]%q]Yjdaima\Ylagfh]jag\&
10 | Tax bulletin
 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
SEC Memorandum Circular No. 9 dated July 2, 2015
[Editor’s Note: SEC MC No. 9 was published in The Manila Times and in The Philippine
KlYj on August 21, 2015.]
SEC-OGC Opinion No. 15-07 dated July 21, 2015
Facts:
A private educational institution was left unattended until its corporate existence
]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

The sales branches and warehouses
g^Yf]flalqhjaeYjadq]f_Y_]\afl`]
manufacturing of liquor or alcoholic
Z]n]jY_]kk`gmd\YdkgZ][dYkkaÕ]\Yk
ÉeYfm^Y[lmj]j$ÊfglYkÉ\]Yd]j$Ê^gjdg[Yd
business taxes purposes. The branches
Yf\oYj]`gmk]kYj]e]j]dqaf[a\]flYdlg
l`]hjaeYjqhmjhgk]g^eYfm^Y[lmjaf_
alcoholic beverages.
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]\[gjhgjYlagf+q]Yjk
lg[gflafm]YkYZg\q[gjhgjYl]^gjhmjhgk]kg^daima\Ylagf$l`]\akhgkalagfg^l`]
j]eYafaf_mf\akljaZml]\Ykk]lkemklf][]kkYjadq[gflafm]]n]fY^l]jkm[`h]jag\&
BLGF Opinion
BLGF Opinion dated July 7, 2015 signed on August 3, 2015
Facts:
P;g&akY\ge]kla[[gjhgjYlagfhjaeYjadq]f_Y_]\afl`]Zmkaf]kkg^eYfm^Y[lmjaf_
daimgjgjYd[g`gda[Z]n]jY_]k&Alkhjaf[ahYdg^Õ[]akdg[Yl]\afIm]rgf;alq&Al
eYaflYafklogeYfm^Y[lmjaf_hdYflkdg[Yl]\afKYflYJgkY;alqYf\:aŽYf;alq&L`]
;gehYfqYdkg`Yk*)kYd]kZjYf[`]kYf\oYj]`gmk]kkalmYl]\afnYjagmk[ala]kYf\
provinces in the Philippines.
Issue:
K`gmd\l`]kYd]kZjYf[`]kYf\oYj]`gmk]kg^P;g&Z][dYkkaÕ]\YkÉeYfm^Y[lmj]jÊ
Yf\fglYkÉ\]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

9lYphYq]jakfgl\akimYdaÕ]\^jge
YnYadaf_alk]d^g^l`]lYpYef]klqmf\]j
J9Fg&1,0(\mjaf_l`]h]f\]f[q
g^alkYhh]Ydoal`l`]Kmhj]e];gmjl
\akhmlaf_Y\]Õ[a]f[qlYpYkk]kke]fl&
The obligation to withhold tax on
compensation arises at the time the
kYdYjqoYkhYa\gjY[[jm]\gjj][gj\]\
YkYf]ph]fk]afl`]]ehdgq]jÌkZggck$
o`a[`]n]j[ge]kÕjkl&
12 | Tax bulletin
Court Decisions
ING Bank N.V. vs. Commissioner of Internal Revenue
Kmhj]e];gmjl K][gf\<anakagf!$?&J&Fg&)././1$hjgemd_Yl]\Bmdq**$*()-
Facts:
J]khgf\]fl;geeakkagf]jg^Afl]jfYdJ]n]fm] ;AJ!Ykk]kk]\AF?:YfcF&N&^gj$
Yegf_gl`]jk$Ydd]_]\\]Õ[a]f[qaf[ge]lYp$gfk`gj]lYp$ZjYf[`hjgÕlj]eallYf[]
lYp :HJL!$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&
9kl`];AJ^Yad]\lgY[lgfl`]hjgl]kl$AF?Õd]\YH]lalagf^gjJ]na]ooal`l`];gmjl
g^LYp9hh]Ydk ;L9!^gjl`][Yf[]ddYlagfg^l`]kYa\Ykk]kke]flk&L`];L9hYjlaYddq
_jYfl]\AF?Ìkh]lalagfZmlkmklYaf]\l`]Ykk]kke]flk^gj\]Õ[a]f[qOL;^gj)11.
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.
K][lagf0g^J9Fg&1,0(hjgna\]kl`Ylgfdq[Yk]kl`Ylafngdn]ÕfYdYf\
]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.

L`]kaemdlYf]gmkj][]ahlg^l`]H9F
Yf\>9FnagdYl]kl`]ja_`llg\m]
hjg[]kkYklYphYq]jkYj]\]hjan]\g^l`]
ghhgjlmfalqlg[gfl]kll`]H9Foal`af
l`])-%\Yqh]jag\Ykhj]k[jaZ]\Zql`]
regulations.
H=R9%j]_akl]j]\]fl]jhjak]kYj]]p]ehl
^jgel`]Aehjgh]jdq9[[memdYl]\
=Yjfaf_kLYp A9=L!&JJFg&(*%()
\g]kfgl\aklaf_mak`Z]lo]]fH=R9
]fl]jhjak]k]fbgqaf_Af[ge]LYp@gda\Yq
gjl`]-kh][aYdlYp$lgimYda^ql`]eYk
]p]ehl^jgeA9=L&
*& Q]k$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))$*()-
Facts:
H]lalagf]j;AJYkk]kk]\J]khgf\]flQme]pH`adahhaf]k;gjhgjYlagf QH;!^gj
Ydd]_]\\]Õ[a]f[qaf[ge]lYp$^jaf_]Z]f]ÕlklYp >:L!Yf\A9=L^gjlYpYZd]q]Yj
*((/&QH;hYa\l`]\]Õ[a]f[qaf[ge]lYpYf\>:LYkk]kke]flk$Zml[gflafm]\lg
hjgl]kll`]A9=LYkk]kke]fl$Yj_maf_l`YlalakfglkmZb][llgA9=LZ][Ymk]alakY
H=R9%j]_akl]j]\]fl]jhjak]&
L`];AJ\]fa]\l`]hjgl]klYf\akkm]\Y>afYd<][akagfgf<akhml]\9kk]kke]fl
j]al]jYlaf_l`]\]Õ[a]f[qA9=LYkk]kke]fl&QH;Õd]\YH]lalagf^gjJ]na]ooal`l`]
;L9&AfalkH]lalagf^gjJ]na]o$QH;Ydd]_]\l`Ylalj][]an]\gfl`]kYe]\YqZgl`
l`]Hj]daeafYjq9kk]kke]flFgla[] H9F!\Yl]\<][]eZ]j).$*()(Yf\l`]>gjeYd
9kk]kke]flFgla[] >9F!\Yl]\BYfmYjq)($*())&
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.

QH;ÌkhYqe]flg^l`]\]Õ[a]f[qaf[ge]lYpYf\>:LYkk]kke]flk\a\fgl[mj]
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

6*9LVWKHODUJHVWSURIHVVLRQDOVHUYLFHV¿UPLQWKH3KLOLSSLQHVWKDWSURYLGHV %DJXLR*HQHUDO6DQWRVDQG&DYLWH
DVVXUDQFHWD[WUDQVDFWLRQDQGDGYLVRU\VHUYLFHV7KHLQVLJKWVDQGTXDOLW\
VHUYLFHVZHGHOLYHUKHOSEXLOGWUXVWDQGFRQ¿GHQFHLQWKHFDSLWDOPDUNHWVDQG )RUDQHOHFWURQLFFRS\RIWKH7D[%XOOHWLQRUIRUIXUWKHULQIRUPDWLRQDERXW7D[
LQHFRQRPLHVWKHZRUOGRYHU:HGHYHORSRXWVWDQGLQJOHDGHUVZKRWHDPWR 6HUYLFHVSOHDVHYLVLWRXUZHEVLWH
GHOLYHURQRXUSURPLVHVWRDOORIRXUVWDNHKROGHUV,QVRGRLQJZHSOD\DFULWLFDO ZZZH\FRPSK
UROHLQEXLOGLQJDEHWWHUZRUNLQJZRUOGIRURXUSHRSOHIRURXUFOLHQWVDQGIRURXU
FRPPXQLWLHV6*9 &RLVDPHPEHU¿UPRI(UQVW <RXQJ*OREDO/LPLWHG :HZHOFRPH\RXUFRPPHQWVLGHDVDQG
TXHVWLRQV3OHDVHFRQWDFW
(<UHIHUVWRWKHJOREDORUJDQL]DWLRQDQGPD\UHIHUWRRQHRUPRUHRIWKHPHPEHU 0D)LGHV$%DOLOLYLDHPDLODW
¿UPVRI(UQVW <RXQJ*OREDO/LPLWHGHDFKRIZKLFKLVDVHSDUDWHOHJDO 0D)LGHV$%DOLOL#SKH\FRPRUDWWHOHSKRQHQXPEHUDQG
HQWLW\(UQVW <RXQJ*OREDO/LPLWHGD8.FRPSDQ\OLPLWHGE\JXDUDQWHHGRHV 0DUN$QWKRQ\37DPD\RYLDHPDLODW
QRWSURYLGHVHUYLFHVWRFOLHQWV 0DUN$QWKRQ\37DPD\R#SKH\FRPRUDWWHOHSKRQHQXPEHU

)RUPRUHLQIRUPDWLRQDERXWRXURUJDQL]DWLRQSOHDVHYLVLWZZZH\FRP3+
7KLVSXEOLFDWLRQFRQWDLQVLQIRUPDWLRQLQVXPPDU\IRUPDQGLVWKHUHIRUHLQWHQGHG
‹6\&LS*RUUHV9HOD\R &R IRUJHQHUDOJXLGDQFHRQO\,WLVQRWLQWHQGHGWREHDVXEVWLWXWHIRUGHWDLOHG
$OO5LJKWV5HVHUYHG UHVHDUFKRUWKHH[HUFLVHRISURIHVVLRQDOMXGJPHQW1HLWKHU6*9 &RQRU
$3$&1R DQ\RWKHUPHPEHURIWKHJOREDO(UQVW <RXQJRUJDQL]DWLRQFDQDFFHSWDQ\
([SLU\GDWHQRH[SLU\ UHVSRQVLELOLW\IRUORVVRFFDVLRQHGWRDQ\SHUVRQDFWLQJRUUHIUDLQLQJIURPDFWLRQ
DVDUHVXOWRIDQ\PDWHULDOLQWKLVSXEOLFDWLRQ2QDQ\VSHFL¿FPDWWHUUHIHUHQFH
VKRXOGEHPDGHWRWKHDSSURSULDWHDGYLVRU

14 | Tax bulletin