In our earlier article, “Removal of the 5-Year Validity of Receipts and Invoices,” I explained that the Philippine tax system is mostly driven by supporting documents and that the deductibility of allowable expenses and claiming of input value-added tax (VAT) rely heavily on valid invoices.
One famous motto says, “Prevention is better than cure.” This saying is applicable to one’s everyday life. It is always better to avoid further damage than to be sorry about it in the future.
The passage of the Ease of Paying Taxes (EOPT) Act, or Republic Act No. 11976, sparked hope among taxpayers, envisioning a smoother journey in navigating tax-related complexities.
It is a well-settled doctrine that tax refunds are in the nature of tax exemptions and, hence, are construed strictissimi juris against the taxpayer.
According to estimates, the Philippines is losing ₱500 billion to tax evasion annually. Thus, even in the early stages of his term as the Commissioner of the Bureau of Internal Revenue (BIR), Commissioner Romeo Lumagui has implemented several reforms and programs against tax evaders.
In tax assessment, the Bureau of Internal Revenue (BIR) and the taxpayers will likewise protect and defend their duties and rights based on laws, rules and regulations, and jurisprudence.
The Philippine government has been proving this adage to be true, especially with the significant regulatory updates to Philippine taxation, with the most recent iteration being the Ease of Paying Taxes Law (EOPT Law).
In our previous article titled “Taxation of cross-border services,” we featured Revenue Memorandum Circular (RMC) No. 5-2024, where the Bureau of Internal Revenue (BIR) clarified the proper tax treatment of cross-border services in light of the SC En Banc Decision in Aces Philippines Cellular Satellite Corporation vs. The Commissioner of Internal Revenue (CIR) and provided a new framework for assessing the final withholding tax and the final withholding Value-Added Tax (VAT) on services provided by non-resident foreign corporations (NRFC) to Philippine businesses.
