2014 BIR Rulings

 

 

 

 

 067-2014

Conveyance of land under trust agreement 

A notarized Declaration of Trust and Acknowledgment was executed by the taxpayer over a property which the taxpayer is holding in trust for her sister who provided the funds to purchase the property.  The Declaration of Trust and Acknowledgment was authenticated by the Notary Public but was not annotated in the property title. 

The transfer of the subject property by the taxpayer as the trustee in favor of her sister as the true and beneficial owner without monetary consideration is merely a confirmation of title in favor of the beneficial owner thereof  and therefore not subject to the capital gains tax imposed under Section 24(D)(1) of the Tax Code of 1997, as amended.

 

091-2014

Conveyance of land as disturbance compensation (RA 6657)

The landowner's transfer and conveyance of a particular land identified and certified by Municipal Agrarian Reform Office (MARO) as disturbance compensation of its tenant in case of termination of tenancy relationship is considered one of the transactions contemplated under Section 66 of RA 6657, and is exempt from capital gains tax and documentary stamp tax.

 

236-2014

Land acquisition projects for housing under Direct Buying Scheme

Direct buying scheme with landowners for land acquisition projects by the Provincial Government is not exempt from capital gains tax as it is not among the transactions entitled to tax incentives under Sections 19, 20 and 32 of RA No. 7279.

 

079-2014 

Sale on Installment basis 

 

 

 058-2014

 

 

 

094-2014

 

 

096-2014

 

 

098-2014

 

 

121-2014

 

 

163-2014

 

 

199-2014

 

 

203-2014

 

 

221-2014

 

 

187-2014

Importation of sports equipment 

 

 001-2014

Income Tax Holiday, BOI-Registered Low Cost Mass Housing

Income payments received by the corporate developer in connection with its BOI-registered Low-Cost Mass Housing Project which was granted income tax holiday (ITH) under RA 7916, and the Omnibus Investments Code of 1987 is exempt from the payment of the creditable withholding tax (CWT) imposed under RR No. 2-98, as amended by RR No. 6-2001, for the period it was granted an ITH. 

The exemption from creditable withholding tax covers only revenues/income generated from and directly attributable to  the registered project subject to the developer’s compliance  with the Specific Terms and Condition of its BOI Registration

Furthermore, BOl-registered enterprises enjoy no tax exemption/privileges other than those granted under E.O.226.  Thus, the corporation will remain subject to Value-Added Tax (VAT) and Documentary Stamp Tax (DST) on its sales of housing units pursuant to Sections 106(A)(1)(a) and 196 of the Tax Code of 1997, as amended.

 

005-2014

Income payments received by the corporate developer in connection with its BOI-registered Low-Cost Mass Housing Project which was granted income tax holiday (ITH) under RA 7916, and the Omnibus Investments Code of 1987 is exempt from the payment of the creditable withholding tax (CWT) imposed under RR No. 2-98, as amended by RR No. 6-2001, for the period it was granted an ITH. 

The exemption from creditable withholding tax covers only revenues/income generated from and directly attributable to  the registered project subject to the developer’s compliance  with the Specific Terms and Condition of its BOI Registration

Furthermore, BOl-registered enterprises enjoy no tax exemption/privileges other than those granted under E.O.226.  Thus, the corporation will remain subject to Value-Added Tax (VAT) and Documentary Stamp Tax (DST) on its sales of housing units pursuant to Sections 106(A)(1)(a) and 196 of the Tax Code of 1997, as amended.

 

057-2014

Separation benefits due to retrenchment/redundancy

The domestic corporation, which is primarily engaged in the business of operating a call center enterprise, announced to six affected employees that it will be employing a retrenchment program.

Pursuant to Section 32 (B) (6) (b) of the Tax Code of 1997, as amended, any amount received by an official or employee or by his heirs from the employer as a consequence of separation of such official or employee from the service of the employer due to death, sickness or other physical disability or for any cause beyond the control of the said official or employee shall not be included in the gross income and shall be exempt from taxation under Title II of the same Code.

Accordingly, the separation pay to be received by the retrenched employees as a result of their separation from the service is exempt from income tax and consequently from the withholding tax.

 

118-2014

Income Tax Holiday, BOI-Registered Corporation

The corporation, which is engaged in the fabrication, service, sales and repair of all types of machinery and equipment for industrial use, is registered with the Board of Investments (BOI), and is considered a person enjoying exemption from income tax under Republic Act 7916, and the Omnibus Investments Code of 1987; therefore, it is exempt from the payment of the creditable withholding tax (CWT) imposed under RR No. 2-98, as amended by RR No. 6-2001, on income payments received during the period for which it was allowed an income tax holiday.

It must be emphasized, however, that the above exemption from CWT covers only income directly attributable to revenues generated from its registered activity.

 

123-2014

Separation benefits due to partial cessation of business operations

The Board of Directors and Stockholders of the corporation approved the partial cessation of its commercial operations, resulting in the separation of thirty-two (32) regular employees who were duly notified. 

Pursuant to Section 32(B)(6)(b) of the Tax Code of 1997, as amended, any amount received by an official or employee or by his heirs from the employer as a consequence of separation of such official or employee from the service of the employer due to death, sickness or other physical disability or for any cause beyond the control of the said official or employee is exempt from taxes regardless of age or length of service.

Accordingly, the separation pay to be received by the retrenched employees as a result of their separation from the service is exempt from income tax and consequently from the withholding tax.

 

124-2014

Separation benefits due to retrenchment

The corporation, which is primarily engaged in providing management consultancy services to its affiliates, trimmed down its operations, resulting in lay-offs. It provided for two separation packages-- retirement benefits under the existing plan, and another, for those not qualified under the first category.

Pursuant to Section 32(B)(6)(b) of the Tax Code of 1997, as amended, those employees who availed of the retirement plan shall be exempt from income taxes provided they comply the conditions stated therein.

On the other hand, those employees availing of the second package, the same section states that any amount received by an official or employee or by his heirs from the employer as a consequence of separation of such official or employee from the service of the employer due to death, sickness or other physical disability or for any cause beyond the control of the said official or employee shall not be included in the gross income and shall be exempt from taxation under Title II of the same Code.

 

135-2014

Separation benefits due to redundancy

The corporation, which is engaged in the business of power generation, implemented a company-wide restructuring resulting in the separation of some employees.

Pursuant to Section 32 (B) (6) (b) of the Tax Code of 1997, as amended, any amount received by an official or employee or by his heirs from the employer as a consequence of separation of such official or employee from the service of the employer due to death, sickness or other physical disability or for any cause beyond the control of the said official or employee is exempt from taxes.

Accordingly, the separation pay to be received as a consequence of the implementation of the redundancy program is exempt from income tax and consequently from the withholding tax.

 

 

 

 

 

 044-2014

Importationof premix enzyme additives  for livestock feeds 

A sole proprietorship, which has a license to operate from the Bureau of Animal Industry (BAI), is engaged in the importation of premix enzyme additives for livestock feeds; the said product is certified by BAI to be duly registered for livestock, poultry and aquaculture feeds use only.  

The importation of such product is one of those transactions contemplated under Section 109(1)(B) of the Tax Code, as amended, as exempt from value-added tax (VAT).  

However, the imported product shall be released from customs custody only upon presentation of a duly approved Authority To Release Imported Goods (ATRIG).

 

069-2014

Importation of raw chicken

A corporation is engaged in the importation of raw chicken; such product falls within the purview of the definition of agricultural food products in their original state, the importation of which is exempt from VAT as being one of those transactions contemplated under Section 109 of the Tax Code, as amended.

 

083-2014

Sale of publication materials, books, etc.

Under Section 109(1)(R) of the Tax Code of 1997, as implemented by RR No. 16-2005, the sale, importation, printing and publication of books, newspapers, magazines, reviews and bulletins is exempt from VAT.

The term "book" only covers printed matters in hard copy, and does not apply to electronic copies of the said books. Furthermore, other articles sold by the corporation which do not fall under the exemption granted under Section 109(1) (R) of the Tax Code are subject to VAT.

 

101-2014

Sec. 109(1)(J) of the Tax Code of 1997, as amended, provide VAT exemptions to regional or area headquarters which are not granted to a representative office.

 

102-2014

The taxpayer's business of publication and sale of books is exempt from VAT under Section 109(1)(R) of the Tax Code, as implemented by RR No. 16-2005.

It is clear that there are four (4)activities that are exempt ftom the coverage of VAT, i.e., sale, importation, printing and publication of books, newspapers, migazines, reviews and bulletins. Moreover, the features of the said items, like magazines, should appear at regular intervals with fixed prices for subscription and sale and which is not devoted principally for the publication of paid advertisements.

Thus, the corporation's other transactions (such as the printing of brochures, bookbinding, engraving, stereotyping, electrotyping, lithographing of various reference books, trade books, journals and other literary works), are subject to the VAT.  The taxpayer is required to register its business as a VAT business entity and issue a separate VAT invoice/receipt to record such transactions.

 

187-2014

Section 19 of Republic Act 6847 exempts the Philippine Sports Commission (PSC) on its importation of sports equipment, subject to certain conditions. Thus, while the Philippine Sailing Association (PSA) is a recognized National Sports Association by the PSC, it is still a separate entity from the latter; thus, the tax exemption granted to PSC cannot extend to the PSA.

 

 066-2014

Final tax on bank deposit

 

 

115-2014

FWT on cash dividends received by non-resident foreign corporation from domestic corporation

 

 

129-2014

Final tax on bank deposit 

 

 

145-2014

 

 

154-2014

FWT on cash dividends received by non-resident foreign corporation from domestic corporation

 

 

169-2014

Final WIthholding Tax (FWT) on Dividend

 

 

171-2014

FWT on dividends

 

 

180-2014

 

 

225-2014

 

 

230-2014

FWT on cash dividends received by non-resident foreign corporation from domestic corporation

 

 

233-2014

 

 

237-2014

 

 

243-2014

 

 

 002-2014

 

 

013-2014

 

 

033-2014

 

 

204-2014

 

 

226-2014

 

 

244-2014

 

 

257-2014