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The projected cost of cybercrime is predicted to grow from $3 trillion in 2015 to $10.5 trillion in 2025, according to Cybersecurity Ventures. Their published Cybercrime Report enumerates the following as cybercrime costs: “damage and destruction of data, stolen money, lost productivity, theft of intellectual property, theft of personal and financial data, embezzlement, fraud, post-attack disruption to the normal course of business, forensic investigation, restoration and deletion of hacked data and systems, and reputational harm.”

In last week’s article, my colleague discussed the new rules on the treatment of foreign currency transactions for internal revenue tax purposes. That article provided clarifications and guidelines on the use of appropriate forex rates in recording and reporting foreign currency transactions for tax purposes.

Several issues and concerns emerged for taxpayers due to the disparity in computing interest expenses for presentation in tax returns and financial statements. With this, the BIR issued Revenue Memorandum Circular No. 19-2024 on February 5, 2024, which aims to provide clarification on how interest expenses related to the taxpayer’s profession, trade or business, and other related matters should be treated for tax purposes.

It is common for taxpayers dealing with foreign entities, whether for purchases or sales, to have transactions in foreign currency. Therefore, it is important for taxpayers to be guided by the rules governing the use of forex rates in business transactions.

The Supreme Court, through its decision in Aces Philippines Cellular Satellite Corp. (Aces Philippines) vs. Commissioner of Internal Revenue (G.R. No. 226680, August 30, 2022), ruled that the airtime fees Aces Philippines paid to its related party, Aces Bermuda, under an airtime purchase agreement are considered sourced from the Philippines and are therefore subject to withholding tax.

The most successful organizational executives have an unquenchable drive for expansion, even in a challenging economic climate. Businesses must have the hunger for growth by making the appropriate decisions on supply chain management, technology, market research, integration, and human resources. And in the dynamic landscape of commerce, exploring the longevity of a business is akin to embarking on a captivating journey through time.

For years, taxpayers have been wishfully thinking of simple and practical yet comprehensive tax laws and regulations for better compliance. With this, our legislators heeded the call, embraced the convenience brought about by digitalization, and introduced changes adapting to the current taxpayer’s situation.

With differences in financial reporting under Philippine Financial Reporting Standards (PFRS)/Philippine Accounting Standards (PAS) and tax treatment purposes under the National Internal Revenue Code (NIRC) that arise due to the forex rates applied in foreign currency transactions, BIR recently issued RMC No. 12-2024 which aims to clarify the treatment of foreign currency transactions for financial reporting and internal revenue tax purposes, as well as define and specify the rules for recording and disclosing foreign exchange transactions for tax purposes, including the use of appropriate foreign exchange rates.