-
Audit approach overview
Our audit approach will allow our client's accounting personnel to make the maximum contribution to the audit effort without compromising their ongoing responsibilities
-
Annual and short period audit
At P&A Grant Thornton, we provide annual and short period financial statement audit services that go beyond the normal expectations of our clients. We believe strongly that our best work comes from combining outstanding technical expertise, knowledge and ability with exceptional client-focused service.
-
Review engagement
A review involves limited investigation with a narrower scope than an audit, and is undertaken for the purpose of providing limited assurance that the management’s representations are in accordance with identified financial reporting standards. Our professionals recognize that in order to conduct a quality financial statement review, it is important to look beyond the accounting entries to the underlying activities and operations that give rise to them.
-
Other Related Services
We make it a point to keep our clients abreast of the developments and updates relating to the growing complexities in the accounting world. We offer seminars and trainings on audit- and tax-related matters, such as updates on Accounting Standards, new pronouncements and Bureau of Internal Revenue (BIR) issuances, as well as other developments that affect our clients’ businesses.
-
Tax advisory
With our knowledge of tax laws and audit procedures, we help safeguard the substantive and procedural rights of taxpayers and prevent unwarranted assessments.
-
Tax compliance
We aim to minimize the impact of taxation, enabling you to maximize your potential savings and to expand your business.
-
Corporate services
For clients that want to do business in the Philippines, we assist in determining the appropriate and tax-efficient operating business or investment vehicle and structure to address the objectives of the investor, as well as related incorporation issues.
-
Tax education and advocacy
Our advocacy work focuses on clarifying the interpretation of laws and regulations, suggesting measures to increasingly ease tax compliance, and protecting taxpayer’s rights.
-
Business risk services
Our business risk services cover a wide range of solutions that assist you in identifying, addressing and monitoring risks in your business. Such solutions include external quality assessments of your Internal Audit activities' conformance with standards as well as evaluating its readiness for such an external assessment.
-
Business consulting services
Our business consulting services are aimed at addressing concerns in your operations, processes and systems. Using our extensive knowledge of various industries, we can take a close look at your business processes as we create solutions that can help you mitigate risks to meet your objectives, promote efficiency, and beef up controls.
-
Transaction services
Transaction advisory includes all of our services specifically directed at assisting in investment, mergers and acquisitions, and financing transactions between and among businesses, lenders and governments. Such services include, among others, due diligence reviews, project feasibility studies, financial modelling, model audits and valuation.
-
Forensic advisory
Our forensic advisory services include assessing your vulnerability to fraud and identifying fraud risk factors, and recommending practical solutions to eliminate the gaps. We also provide investigative services to detect and quantify fraud and corruption and to trace assets and data that may have been lost in a fraud event.
-
Cyber advisory
Our focus is to help you identify and manage the cyber risks you might be facing within your organization. Our team can provide detailed, actionable insight that incorporates industry best practices and standards to strengthen your cybersecurity position and help you make informed decisions.
-
ProActive Hotline
Providing support in preventing and detecting fraud by creating a safe and secure whistleblowing system to promote integrity and honesty in the organisation.
-
Accounting services
At P&A Grant Thornton, we handle accounting services for several companies from a wide range of industries. Our approach is highly flexible. You may opt to outsource all your accounting functions, or pass on to us choice activities.
-
Staff augmentation services
We offer Staff Augmentation services where our staff, under the direction and supervision of the company’s officers, perform accounting and accounting-related work.
-
Payroll Processing
Payroll processing services are provided by P&A Grant Thornton Outsourcing Inc. More and more companies are beginning to realize the benefits of outsourcing their noncore activities, and the first to be outsourced is usually the payroll function. Payroll is easy to carve out from the rest of the business since it is usually independent of the other activities or functions within the Accounting Department.
-
Our values
Grant Thornton prides itself on being a values-driven organisation and we have more than 38,500 people in over 130 countries who are passionately committed to these values.
-
Global culture
Our people tell us that our global culture is one of the biggest attractions of a career with Grant Thornton.
-
Learning & development
At Grant Thornton we believe learning and development opportunities allow you to perform at your best every day. And when you are at your best, we are the best at serving our clients
-
Global talent mobility
One of the biggest attractions of a career with Grant Thornton is the opportunity to work on cross-border projects all over the world.
-
Diversity
Diversity helps us meet the demands of a changing world. We value the fact that our people come from all walks of life and that this diversity of experience and perspective makes our organisation stronger as a result.
-
In the community
Many Grant Thornton member firms provide a range of inspirational and generous services to the communities they serve.
-
Fresh Graduates
Fresh Graduates
-
Students
Whether you are starting your career as a graduate or school leaver, P&A Grant Thornton can give you a flying start. We are ambitious. Take the fact that we’re the world’s fastest-growing global accountancy organisation. For our people, that means access to a global organisation and the chance to collaborate with more than 40,000 colleagues around the world. And potentially work in different countries and experience other cultures.
-
Experienced hires
P&A Grant Thornton offers something you can't find anywhere else. This is the opportunity to develop your ideas and thinking while having your efforts recognised from day one. We value the skills and knowledge you bring to Grant Thornton as an experienced professional and look forward to supporting you as you grow you career with our organisation.
Implications of COVID-19 Pandemic on Permanent Establishments
25 Aug 2020The global pandemic COVID-19 has proven to have an arduous effect on our society and economy. Recently, the Philippine government presented a range of different measures to combat against the danger of the COVID-19 virus. Among these are the imposition of quarantine measures such as the Enhanced Community Quarantine (ECQ), Modified Enhanced Community Quarantine (MCQ) and General Community Quarantine (GCQ) and travel restrictions.
The continued implementation of these measures raised several international tax issues related to cross border workers or the unintended creation of permanent establishment (PE). Due to airport closures and the suspension of international flights, many foreign employees of assigned in the Philippines have been trapped for an undetermined length of time. The presence of these foreign national employees in our country pose a risk of creating a PE for their employees.
The concept of PE is applicable to a foreign corporation which is organized other than the law of the Philippines and is not engaged in trade or business within the Philippines which is classified, for tax purposes, a nonresident foreign corporation (NRFC) and to a person who is non-resident and not engaged in trade or business in the Philippines.
PE as defined in most treaties means a fixed place of business through which a resident of one of the contracting states engages in a trade or business. It especially includes a place of management; a branch; an office; a factory; a workshop; and a mine, an oil or gas well, a quarry or any other place of extraction of natural resources. Its existence, however, requires permanency and not merely temporary or transitory, and through which the business of an enterprise is being carried on.
The term PE also comprises the furnishing of services, including consultancy services, by an enterprise through employees or other personnel engaged by the enterprise for such purpose, but only if the activities of that nature continue for a period or periods aggregating of more than, generally, 183 days in any 12-month period. This is the most common source of a PE.
When a foreign enterprise establishes to carry on business in the Philippines through a PE, the income that is due to that PE is subject to income tax in the Philippines. As such, income taxes due on their income derived from sources within the Philippines shall also be subject to final withholding taxes. Accordingly, the Philippine customer/payor of the income shall be required to withhold final tax on the gross amount of income.
In order to address the unintended creation of a PE due to Philippine lockdowns, the Bureau of Internal Revenue (BIR) recently issued the Revenue Memorandum Circular (RMC) No. 83-2020 entitled as “Tax implications of Measures Being Implemented to Prevent the Spread of New Coronavirus Disease 2019 (COVID-19) on Cross-Border Matters.
According to the RMC, because of the pandemic, many employees of foreign enterprises in the Philippines are working at home in compliance with the government imposition of strict home quarantine measures and not in compliance with the enterprise’s requirement. Working from home will not create a PE, since a PE should have a degree of permanency and be at the disposal of an enterprise for it to be considered a fixed place of business.
In our case, working from home is only temporary in nature and is only because of the government mandate due to the pandemic. Moreover, the government imposed the said working set-up and not the foreign enterprise.
For example, based on RMC, Mr. X a non-resident alien was sent by his Singaporean employer in the country on January 1, 2020 to work for a domestic company for a period of 90 period of days. He was supposed to return to Singapore on March 31, 2020 but because of the travel restrictions imposed in the Philippines he was prevented from leaving the country. He has been renting an apartment in Makati City.
Under the Philippine-Singaporean tax treaty, the State where the employment is exercised may tax the employee on his employment income if he is present in the host state for more than 183 days. However, given our exceptional state, the Philippines will relax the application of the relevant treaty provisions on employment income. Therefore, even if Mr. X stays here for more than 183 days, his tax residence will not change due to temporary dislocation. Singapore shall still exercise its exclusive right to tax the employment income of Mr. X, except when the domestic company appears to be the real employer or when his remuneration is borne by a permanent establishment of the Singaporean employer in the Philippines.
On the other hand, the temporary interruptions on construction activities in the Philippines due to COVID-19 pandemic will be included in computing the duration of a site and in determining whether such construction site constitutes a PE.
Furthermore, in order for a person to be considered as dependent agent of a PE the following conditions needs to be present, namely: a person acts in a Contracting State on behalf of an enterprise; in doing so, that person habitually concludes contracts, or habitually plays the principal role leading to the conclusion of contracts that are routinely concluded without material modification by the enterprise (it must be established that the presence of a foreign enterprise in the Philippines is not merely transitory); and these contracts are either in the name of the enterprise or for the transfer of the ownership of, or for the granting of the right to use, property owned by that enterprise of that the enterprise has the right to use, of for the provision of services by that enterprise.
To better understand, let us look at this example given by the RMC. Mr. X is an employee of ABC Company, a foreign corporation incorporated and based in Japan. He was in the Philippines for a two-week vacation when the Philippine government imposed travel restriction and was prevented from leaving the country. His duties and obligations involves concluding contracts on behalf of his foreign employer. While in the Philippines during the travel restrictions, he would habitually conclude contracts on behalf of his employer. Would this result in the creation of PE in the Philippines?
The answer is no said the RMC, because Mr. X would not have been present in the Philippines save for COVID-related travel restrictions. His stay in the Philippines is only a result of the COVID-19 pandemic, therefore, his habitual conclusion of contracts in the Philippines on behalf of ABC Company is not considered to constitute a PE of the foreign company in the Philippines because his stay here is only temporary. Had it not been for the travel restrictions, Mr. X would have been regularly performing his duties in Japan.
Hence, when an employee, partner or agent of a non-resident foreign corporation continues to be present in the Philippines because of the travel restriction related to COVID-19, his period of stay will not be considered in counting the taxable presence of the non-resident foreign corporation in the Philippines.
However, the effect will, be different if the employee, partner or agent was habitually concluding contracts on behalf of the enterprise in the Philippines before the COVID-19 crisis.
Briefly, the effects of COVID-19 will not result in the creation of PE if the following requisites are present: the non-resident foreign company did not have a PE in the Philippines before the effects of COVID-19; there are no other changes in the company’s circumstances save for the extended stay of its employee, partner or agent in the Philippines because of travel restrictions; and the employee, partner or agent should leave the country as soon as the circumstances would permit.
The RMC was issued on the assumption that the COVID-19 pandemic is exceptional and provisional in nature. If the pandemic continues and the situation today will become the “norm” rather than exception. In that case, this assumption may need to be re-visited and re- evaluated. No one knows when this pandemic will end, but what the Philippine government can do is the continued issuance of relevant regulations that can eliminate or at least lessen the effect of the pandemic in cross border transactions.
Let's Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.
Grace L. Turqueza is an associate from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd. For comments and inquiries, please email pagrantthornton@ph.gt.com.
As published in BusinessWorld, dated 25 August 2020