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Having connections with a wide array of business partners can go a long way to help your business survive, expand, or even thrive. With work-from-home setups in place, the use of technology is bringing global businesses or entities together in a smaller circle. One way or another, you may find your company associating with a non-resident foreign corporation (NRFC).

In the earlier parts of this Commentary Series, I dwell on the more important reforms and actions that the government must do to make the lives of the Filipino people much better, achieve higher economic growth and improve public governance.

THE Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 99-2021 to address some of the issues and concerns of taxpayers about the consolidated list of VAT-exempt products in RMC 81-2021 and the treatment of input VAT on said products prior to or upon the effectivity of its VAT exemption. This exemption is provided pursuant to the provisions of the Corporate Recovery and Tax Incentives for Enterprises (Create) Act, as implemented by RR No. 4-2021.

So much has transpired in the course of almost two years since the pandemic struck. The health crisis took global economies to a tumble and governments struggled to slowly get back on their feet. It’s a dire scenario that has left investors on a standstill, contemplating whether to continue planned investments or wait until things settle in the new normal. All matters considered, their investment woes are based on well-founded facts.

The digital economy continues to shape up as a significant aspect of commerce. The effects of the pandemic accelerated the paradigm shift towards digitalization and greatly altered the patterns of production and consumption of goods and services. Recently, a product of the digital age has been drawing a lot of interest — cryptocurrency. Once known only to tech-savvy people, cryptocurrencies are gaining traction and becoming more mainstream because of their perceived advantages and the income-earning opportunities they present.

The Bureau of Internal Revenue (BIR) has recently released Revenue Regulation (RR) 16-2021 to further amend the pertinent provisions on the manner of submission of copies of BIR Forms 2307 and 2316.

Prior to the effectivity of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, Philippine tax rules imposed a 10% tax on improperly accumulated taxable income of corporations. This improperly accumulated earnings tax (IAET) is imposed as a penalty on corporations which allow accumulation of earnings for the purpose of avoiding tax liability for their shareholders if they decide to distribute profits in the form of dividends.

For the last few months, proprietary educational institutions (PEIs) have been in the ropes due to the controversial Revenue Regulation (RR) issued by the Bureau of Internal Revenue (BIR) last April 8, 2021 – RR No. 5-2021. This tax regulation gives a stricter definition of being a non-profit of PEIs. To avail of the new income tax rate of 1% under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, PEIs must ensure that no net income or asset accrues to or benefits any member or specific person, with all net income or assets devoted to the institution’s purposes and all its activities conducted not for profit. This definition makes it difficult for PEIs to qualify for the lower income tax rate, considering that most of these private educational institutions are stock corporations owned by private individuals who receive their share of profit.