Magng BIR -Accredited Tax Agent Na. Dalian mo na nga..

ETM's THREE SECRETS IN HANDLING BIR INITIATED PROBLEMS (1) KNOW THE BIR RULES, (2) ADVERTISE THE KNOWING OF THE BIR RULES, AND (3) APPLY THE BIR RULES Revenue Memorandum Circular No. 31-2016 dated 15 March 2016]

31 March 2016
The Commissioner of Internal Revenue has issued Revenue Memorandum Circular No. 31-2016 dated 15 March 2016 (the "Circular") to circularize the "Entry into Force, Effectivity and Applicability of the Philippines-Turkey Double Taxation Agreement" (the "Tax Treaty") on 11 January 2016.

The Circular states that under Article 28 of the Tax Treaty, the same shall have effect in respect of tax withheld at source on income paid on or after 1 January 2017, and on income in any taxable year beginning on or after 1 January 2017.

In invoking the Tax Treaty, the concerned Turkish resident income earner or his authorized representative should file an Application for Relief for Double Taxation (BIR Form 0901) together with the required documents pursuant to Revenue Memorandum Order 72-2010.Revenue Memorandum Order No. 25-2016 dated 12 June 2016]

15 June 2016
The Commissioner of Internal Revenue has issued Revenue Memorandum Order No. 25-2016 dated 12 June 2016 (the "Order") to supplement the guidelines and procedure in the conduct of investigation on the capacity of parties to acquire properties provided for in Revenue Memorandum Order No. 24-2016.

This Order added a procedure to be undertaken by the One-Time Transactions (ONETT) Team in determining, during the application of Certificate Authorizing Registration and Tax Clearance, the financial capacity of the buyer to acquire the subject property.

Under this Order, if the seller/transferor/assignor is a corporation or is a stranger to the buyer/transferee/assignee of the subject property and it is proven that the latter does not have financial capacity to purchase said property, it shall be presumed that the buyer/transferee/assignee have earned income that was undeclared and the taxes due thereon were unpaid.

In addition to any tax due on the sale/transfer/assignment of the subject property, income taxes shall be assessed against the buyer/transferee/assignee on that amount of consideration for which the latter cannot show proof of financial capacity for, on the taxable year when the sale/transfer/assignment of the subject property occurred.The guidelines and procedure provided under this Order are as follows:

Application for the issuance of Certificate Authorizing Registrations (CARs) and Tax Clearance (TCLs) covering the sale/transfer/assignment of properties under RMO No. 15-2003 and other related issuances shall be evaluated for possible audit or investigation.

Parties to the said transactions may be subjected to an audit or investigation to determine their capacity to hold and/or acquire properties. If the seller/transferor has no capacity over the subject property, the Revenue District Officer (RDO) may recommend the issuance of the electronic Letter of Authority (eLA) for approval of the Regional Director having jurisdiction over the parties concerned.

The One-Time Transactions (ONETT) Team shall undertake the following procedures:
Verify with the Integrated Tax System that the parties regularly file returns and report income sufficient to establish financial capacity.
Individuals not required to file income tax returns (ITRs) shall submit an affidavit stating the reason he/she is not required to file an ITR, his/her total annual income, and source of income, to establish his/her financial capacity.
Presentation of other documents may be necessary to establish financial capacity.
Financial capacity of the buyer to acquire the subject property shall be determined during the application of CARs and TCLs. If proven to have no financial capacity to acquire the property, the transaction is not a sale but a donation subject to donor's tax not CGT.
The lack of financial capacity of the seller/assignor/transferor shall not stop the processing and the issuance of the CARs and TCLs. The ONETT Team may recommend the issuance of eLA.