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Last year, new value-added tax (VAT) rules were introduced by Republic Act (RA) No. 11534 or the CREATE Act. This act was followed by other issuances like the CREATE Implementing Rules and Regulations (CREATE IRR), and Revenue Regulation (RR) No. 21-2021. Despite the law and regulations, questions remained like: What is the proper VAT treatment of transactions with registered business enterprises (RBEs)? What type of BIR documentation is required in addition to the endorsement of the Investments Promotions Agencies (IPAs)? What does endorsement from IPAs mean? What rules shall govern when availing VAT incentives?

A basic fact of life is that “nothing lasts forever”. Things can change, whether for better or for worse. It may be said that several entities enjoying tax incentives are left wondering about the many changes and developments in Philippine tax laws. Among the questions of taxpayers is –"Can we still enjoy what we are enjoying now?”

One of the most common inquiries we receive from foreign investors pertains to questions involving setting up of subsidiaries in the Philippines and their concerns with minimum capital requirements relevant to the nature of their business or industry. The restrictions on foreign ownership to some industries surely affect the flow of foreign investments in the country, the Philippines being notably one of the strictest within Asia-Pacific in terms of its foreign investment policies. For some time now, the law easing these restrictions for this matter has been long anticipated to stimulate investments from foreign enterprises.

It has been almost a year since Republic Act No. 11534, otherwise known as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act was signed into law. It took effect on April 11 last year. Its central focus is to lower corporate income tax rates for domestic and foreign corporations to mitigate the effects of the COVID-19 pandemic on our economy. However, this is not the case for Regional Operating Headquarters (ROHQs), which in the past enjoyed a preferential income tax rate of 10%. With the passage of the CREATE Law, effective January 1, 2022, ROHQs shall now be taxed at 25% Regular Corporate Income Tax (RCIT) or 1% (until June 30, 2023)/ 2% Minimum Corporate Income Tax (MCIT), whichever is higher.

To file or not to file annual income tax returns? This is not a question for corporations, as the answer will always be to file. For corporations following calendar year as their taxable period, there are only 52 calendar days left until the April 15 deadline for filing of annual income tax returns. For diligent corporate taxpayers preparing their income tax returns, the following are the general guidelines and reminders for an easy and stress-free tax return preparation.

Over the years, our government agencies have been continuously implementing innovations to reduce steps in government processes to upgrade their services and lessen the timeline with regard to government transactions. These developments take place over time. Constant improvements also build trust and confidence on the part of the taxpayers to transact with government agencies. Steady improvements need to be applied at all levels of public administration to be comprehensively effective, and with our tax agency in particular, which is responsible for the collection of the taxes.

For most businesses in the Philippines, the first quarter of the year demands compliance of annual registration renewals, filing of tax returns, submission of financial statements, and payment of taxes. Corporate and tax practitioners have infamously tagged this period as the busy season in which they find themselves working around the clock for longer hours and with countless doses of caffeine.

It’s been almost two years since the Bureau of Internal Revenue (BIR) released several issuances involving updated reporting requirements for related party transactions (RPTs) and compliance with transfer pricing (TP) regulations. Since then, a lot of business entities have been anticipating how the tax authorities will be conducting audit investigations on RPTs, and whether they will be among the first ones to get to experience the TP audit.