QAU Alert 7: An Overview of IFRS 10, 11 and 12
RR NO. 8-2012 FURTHER AMENDMENTS TO REVENUE REGULATIONS NOS. 2-98 AND 3-98, AS LAST AMENDED BY REVENUE REGULATIONS NOS. 5-2008 AND 5-2011 WITH RESPECT TO “DE MINIMIS BENEFITS”.
This Revenue Regulation was issued last May 11, 2012. It further amended previous revenue regulations with regards to “De Minimis Benefits” uniform and clothing allowance not exceeding P5,000 per annum. As for the tax treatment, this benefit is still exempt from income tax on compensation as well as fringe benefit tax; hence, same treatment should be applied as in the previous regulations.
RR NO. 9-2012 IMPLEMENTING SECTIONS 24(D)(1), 27(D)(5), 57, 106 AND 196 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997 ON NON-REDEMPTION OF PROPERTIES SOLD DURING INVOLUNTARY SALES.
This Regulation, issued on June 1, 2012, implements Sections 24(D)(1), 27(D)(5), 57, 106 and 196 of the National Internal Revenue Code (NIRC) of 1997 relative to the non-redemption of properties sold during involuntary sales.
It states that in case of non-redemption of properties sold during involuntary sales, regardless of the type of proceedings and personality of mortgagees/selling persons or entities, the Capital Gains Tax (CGT), if the property is a capital asset; or the Creditable Withholding Tax (CWT), if the property is an ordinary asset; the Value-Added Tax (VAT) and the Documentary Stamp Tax (DST) shall become due.
The reckoning point for the payment of applicable taxes will be the date of expiration of the redemption period. For example, if the buyer of the subject property, who is deemed to have withheld the CGT due from the sale, shall then file the CGT return and remit the said tax to the BIR within 30 days from expiration of the applicable statutory redemption period. Same rule follows for the payment of DST, VAT and CWT, in the case of sale of ordinary asset; however the reckoning point is the month of expiration of the redemption period.
The DST return shall be filed and the related tax payment be remitted to the BIR within five (5) days upon closing of the month following the lapse of the statutory redemption period.
The above taxes shall be based on whichever is higher of the consideration (bid price of the higher bidder) or the fair market value or the zonal value as determined in accordance with Section 6(E) of the Tax Code.
3 RSBA QA Bulletin
RR NO. 10-2012 JOINT VENTURE OR CONSORTIUM FORMED FOR THE PURPOSE OF UNDERTAKING CONSTRUCTION PROJECTS AND MANDATORY ENROLLMENT OF LOCAL CONTRACTORS IN THE ELECTRONIC FILING AND PAYMENT SYSTEM (EFPS).
This Regulation was issued on June 1, 2012. It defines the requirements for joint ventures or consortiums formed for the purpose of undertaking construction projects and prescribe the mandatory enrollment of local contractors in the Electronic Filing and Payment System (eFPS).
A joint venture or consortium formed for the purpose of undertaking construction projects, which is not considered as corporation under Section 22 of the National Internal Revenue Code (NIRC), of 1997 as amended, should be:
A. for the undertaking of a construction project;
B. should involve joining or pooling of resources by licensed local contracts; that is, licensed as general contractor by the Philippine Contractors Accreditation Board (PCAB) of the Department of Trade and Industry (DTI);
C. the local contractors are engaged in construction business; and
D. the Joint Venture itself must likewise be duly licensed as such by the PCAB of the DTI.
Joint ventures involving foreign contractors may also be treated as a non-taxable corporation only if the member foreign contractor is covered by a special license as a contractor by the PCAB of the DTI, and the construction project is certified by the appropriate Tendering Agency (government office) that the project is a foreign financed/internationally-funded project and that international bidding is allowed under the Bilateral Agreement entered into by and between the Philippine Government and the foreign/international financing institution pursuant to the implementing rules and regulations of Republic Act No. 4566, otherwise known as Contractor's License Law.
Non-compliance of any of the aforesaid requirements, the joint venture or consortium formed for the purpose of undertaking construction projects shall be considered as taxable corporations. In addition, the tax-exempt joint venture or consortium shall not include those who are mere suppliers of goods, services or capital to a construction project. Each member to a Joint Venture not taxable as corporation shall be responsible in reporting and paying appropriate Income Taxes on their respective share to the joint ventures profit.
All licensed local contractors are required to enroll to the BIR's eFPS at the Revenue District Office, where they are registered as taxpayers.
