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National Internal Revenue Code of 1997 5th Edition
Last week’s article discussed the accounting treatment for a short-term lease and a lease for low-value assets under the new Philippine Financial Reporting Standard (PFRS) 16 and taxation of operating lease as prescribed in Revenue Regulations (RR) No. 19-86 both for the lessee and the lessor. The discussion also tackled how the lessee and the lessor will record in their respective books various transactions related to leases, such as prepaid rentals and security deposits, and the proper reporting of these transactions for income tax purposes.
THE Philippines is home to individuals and corporations who enter business with other entities outside the country. As follows, Philippine residents earn income from foreign sources. Countries, otherwise called as Contracting States, have entered to tax treaties to make sure that there is no double taxation or double non-taxation on any foreign-sourced income by its residents. Needless to say, tax treaties, which allow for certain income tax benefits, are implemented in the Philippines to encourage foreign trade and investments.
Philippine Financial Reporting Standard (PFRS) 16 is the new accounting standard for lease of assets or arrangements that contain a lease. It became effective on Jan. 1. It replaces Philippine Accounting Standard (PAS) 17, which means that entities reporting under PFRS shall apply this new standard in their lease transactions starting on the effectivity date.
THE Bureau of Internal Revenue (BIR) recently issued Revenue Memorandum Circular (RMC) 107-2019 to further extend the validity period of Certificate of Accreditation (COA) and Permits to Use (PTUs) of Cash Register Machines (CRMs), Point-of-Sale (POS) machines and other sales machines or receipting software.
In February, President Rodrigo R. Duterte signed Republic Act No. 11210 or the 105-Day Expanded Maternity Leave Law (EMLL). The expanded maternity leave benefits under the EMLL are fully tax-exempt. This is the interpretation issued by the BIR in RMC 105-2019. Indeed, this is a deserved tax break for working mothers.
The Securities and Exchange Commission (SEC) recently issued additional disclosure requirements, especially for publicly listed entities. Reporting on material-related party transactions and sustainability have been added to the list of reporting requirements. These reporting requirements highlight the different stakeholders’ needs for more transparency from listed entities, which might be extended to non-listed entities as shared by SEC Commission Kelvin Lee during his presentation in the recently held Sustainability Forum of P&A Grant Thornton and Financial Executives of the Philippines last October 10.
ABOUT 12 years ago, I took my Certified Public Accountant Licensure Examination (CPALE). The results came out only after a few days. Soon afterward, I immediately faced the decision of choosing the type of accounting practice I would pursue.
A moral lesson can be gleaned from the circumstances surrounding the childhood of the greatest man who walked the earth, Jesus. This vital lesson also helps investors thrive in their business transactions, especially amidst fast-changing times.
