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National Internal Revenue Code of 1997 5th Edition
The world saw a growing need for internet dependencies in the COVID-19 era, spurting the introduction of a more modern vocabulary amongst its users. Words such as sheesh, uwu, and the like have become new additions to people’s word banks as the continuous isolation from a physically social world rage on during the pandemic. But as our ways to socialize grew beyond the barriers of physical and lingual connections, so did the evil that came as its caveat. Scheming and scamming have become part of the society and seemingly grows with it. As evident with the rise in vocabulary these schemers use, words such as payaman, power, ez money, and the like entered the new normal as well.
Experts may say improved allocation and realignment of funds and resources would do the trick. For newly established companies, growing your investments portfolio to expand reach and operations is a good move.
Last October 14, 2022, the BIR issued RMC No. 137-2022, clarifying the cost items under “other expenditures” which are subject to 0% VAT, being indispensable to the project or activity.
In our last article on the fundamentals of entity characterization in transfer pricing documentation (TPD), we highlighted the concept that our knowledge of the nature of a particular business determines the entity characterization and in turn, the entity characterization influences the direction and tone of the TPD as well as setting the direction in having a meaningful comparison of the price or level of income of the entity in a controlled transaction against the price or level of return from similar independent transactions.
As provided under Revenue Regulation No. 13-2022, any kind of equity-based compensation, such as stock options, restricted share awards, stock appreciation rights (SARs), and restricted stock units, which may or may not pertain to the shares of stocks of the grantor, is considered taxable compensation subject to the withholding tax on compensation once exercised or availed of by the grantee-employees.
For those who are considering increasing their holiday funds by availing themselves of the benefits under equity-based compensation, specifically those who are occupying supervisorial and managerial positions, they may have to look at the newly released BIR regulation, RR 13-2022, although it might not be the most heartwarming news this yuletide season.
The Fiscal Incentives Review Board (FIRB), through FIRB Resolution No. 026-2022, agreed to allow the transfer of registered business enterprises (RBEs) in the Information Technology and Business Process Management (IT-BPM) sector from the Investment Promotion Agency (IPA) administering the economic zone or freeport zone where their project is located (e.g., PEZA) to the Board of Investments (BOI) until December 31, 2022.
Last September, the Fiscal Incentives Review Board finally put forward a resolution that will allow Information Technology and Business Processing Management or Business Processing Outsourcing firms in ecozones to adopt fully remote arrangements without risking penalty or suspension of their tax incentives.
