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Last month, I wrote an article about the saga of transfer pricing in the Philippines. The tale begins in 1939 when the Commonwealth Act 466 or the “National Internal Revenue Code was passed. This is the source of the Commissioner of Internal Revenue’s (CIR) authority to review, allocate and distribute the income and deductions of related-party transactions (RPT), both cross-border and domestic, including intra-firm transactions between related parties, to determine the appropriate revenue and taxable income.

It has been almost five months since the implementation of the community quarantine due to the COVID-19 pandemic. Most of us had no choice but to stay indoors. Thus, we were forced to entertain, educate, and make ourselves useful within our homes. With the help of the internet and other electronic platforms, we got to binge-watch our favorite shows, shop, buy groceries, start on our fitness goals, finish online courses, play online games, etc. Netflix, Google, Amazon, and even YouTube have somehow helped us to hold on to our sanity during these challenging times.

Nearly a month ago, many taxpayers finally put an end to the longest tax season when they finally submitted their annual income tax returns (ITRs). Others, however, have to brace for the submission of a new set of attachments to the ITR. These refer to the Bureau of Internal Revenue (BIR) Form No. 1709 or the Information Return on Related Party Transactions (Domestic and/or Foreign) and its related attachments, as prescribed by Revenue Regulations (RR) No. 19-2020. RR No. 19-2020 requires not only the proper disclosure of related-party transactions, but also the documents that would support that these transactions have been conducted at arm’s length.

According to Greek philosopher Heraclitus, “The only constant in life is change.” In Japanese, business people believe that constant, increasing improvement adds to substantial change over time. “Kaizen” is a Japanese productivity philosophy that means continuing development in personal, family, social, and professional life. The word “kaizen” comes from the two words: “kai,” which means “change,” and “zen,” which means “for the better.”

Humanity has a natural desire to know about its ancestry and to keep the family name alive. Over and above the inclination of man to keep records of births and relationships, genealogy has been critical to chronology, particularly in the early years of human history.

Since the World Health Organization classified COVID-19 as a pandemic on March 11, “the new normal” became the go-to term for describing the new reality. Throughout history, we survived calamities because of our ability to adapt to changing times. With our mobility limited by social distancing protocols, we see a sudden business shift from physical stores to online platforms. Aspiring entrepreneurs taking advantage of new-normal opportunities might ask, “Can I start a new business during the pandemic?”

The longest busy season for income tax filing has finally come to a close. Amidst the sleepless nights and pandemic-induced stress, tax practitioners, tax authorities, and taxpayers alike can only remind themselves that the dictum “taxes are the lifeblood of the nation” rings ever more true.

Well settled is the rule that tax exemptions are construed strictissimi juris against the taxpayer and liberally in favor of the government. As a result, exemptions must be shown to exist clearly and categorically, and supported by clear legal provisions. In other words, one who seeks an exemption must justify it by words “too plain to be mistaken and categorical to be misinterpreted.” Thus, the burden of proving that one is tax-exempt rests on the taxpayer.