Subject: WEEKLY TAX UPDATES [AUG 6] Makabayan: Let COA review flood control projects, DPWH can’t be trusted

WEEKLY TAX UPDATES

AUGUST 6

  1. TAX & BUSINESS-RELATED NEWS [JULY 30-AUGUST 6]

  2. BIR FURTHER EXTENDS THE DEADLINE FOR THE FILING OF TAX RETURNS & PAYMENT OF VAT DUE OF NON-RESIDENT DIGITAL SERVICE PROVIDER TO AUGUST 5, 2025

  3. BIR PROVIDES GUIDELINES & PROCEDURES ON THE REGISTRATION, FILING OF RETURNS & PAYMENT OF VAT FOR NON-RESIDENT DIGITAL SERVICE PROVIDERS THROUGH THE VAT ON DIGITAL SERVICES PORTAL

  4. BIR ITAD RULING ON INTEREST PAYMENTS ABROAD

  5. CTA CASES

1. TAX & BUSINESS-RELATED NEWS [JULY 30-AUGUST 6]

1. Marcos won't release unverified list of individuals behind flood control mess: Palace

2. CHED flags Cebu University

3. US to require $15,000 bond for some visitors

4. 8 in 10 Pinoys want polluting firms taxed for environmental damage

5. Hontiveros denounces alleged GSIS investment in online gambling platform

6. PEZA-registered businesses not fully exempt from VAT —SC

7. Several contractors to be blacklisted from gov’t projects over DPWH corruption: Marcos Jr.

8. SC ruling on Malampaya taxes gives ‘stability, security’ to investors—DOE chief

9. Philippines still world’s No. 2 pineapple exporter

10. SEC says no new tax, just standardization

11. Apple Pay, Google Pay can operate in PH without BSP approval

12. Marcos designates part of DLSU-Laguna as 'innovation ecozone'

13. BPI to open Singapore office in October

14. SEC pushes sustainability reporting for large nonlisted firms

15. SSS to increase pensions starting September

16. Planning to visit the US? New Trump fee may cost Filipinos an extra $250

17. Makabayan: Let COA review flood control projects, DPWH can’t be trusted

18. Taytay residents file complaint vs Laguna Lake project's ‘illegal’ public scoping

19. PCC clears Mitsubishi's 50% acquisition of GCash ultimate parent firm

20. P1,200 minimum wage bill filed anew, scraps regional boards

21. Gov’t Malampaya profit share includes contractors’ income taxes —SC

DISCLAIMER!

We saw these tax and business-related news on various news sites, and we thought you should see them. DMD is not responsible for the content of these news, and anything written thereon does not necessarily reflect DMD views or opinions.

Marcos won't release unverified list of individuals behind flood control mess: Palace [ABS-CBN News, August 6, 2025]

This, after Mamamayang Liberal (ML) party-list Rep. Leila De Lima urged Marcos to name and prosecute those involved in flood control corruption.

 

CHED flags Cebu University [The Manila Times, August 6, 2025]

The Commission on Higher Education (CHED) has flagged Cebu Normal University (CNU) for implementing a full shift to online learning without board approval or stakeholder consultation.

 

US to require $15,000 bond for some visitors [ABS-CBN News, August 5, 2025]

The US State Department said Monday some visa applicants will soon be required to pay bonds of up to $15,000 (approximately 859,000 Philippine pesos) to discourage visa overstays as part of President Donald Trump's crackdown on migration.

 

8 in 10 Pinoys want polluting firms taxed for environmental damage [The Philippine Star, August 5, 2025]

The study’s findings come as the Philippines reels from recent storms and as the International Court of Justice (ICJ) affirms that vulnerable nations have the right to seek damages from major polluting companies and states.

 

Hontiveros denounces alleged GSIS investment in online gambling platform [ABS-CBN News, August 5, 2025]

Hontiveros, in a privilege speech on Tuesday, condemned the alleged use of the retirement money of Filipinos to expand the e-gaming industry.

 

PEZA-registered businesses not fully exempt from VAT —SC [GMA News Online, August 4, 2025]

“PEZA-registered enterprises are not absolute VAT-exempt entities; and two, the VAT treatment of its transactions depend on whether the cross-border doctrine applies,” the SC said.

 

Several contractors to be blacklisted from gov’t projects over DPWH corruption: Marcos Jr. [ABS-CBN News, August 4, 2025]

Several individuals and corporations involved in corrupt schemes in the Department of Public Works and Highways (DPWH) have been identified, President Ferdinand Marcos Jr. said in his latest podcast episode, underscoring that they would soon be blacklisted from government projects.

 

SC ruling on Malampaya taxes gives ‘stability, security’ to investors—DOE chief [Inquirer.Net, August 4, 2025]

Energy Secretary Sharon Garin on Sunday welcomed the Supreme Court’s (SC) decision reversing the Commission on Audit’s (COA) findings and affirming that the government’s 60-percent share from the Malampaya natural gas project already includes the income taxes of private contractors, saying the clarity it provides will help boost investor confidence in the country’s energy sector.

 

Philippines still world’s No. 2 pineapple exporter [Philippine Daily Inquirer, August 4, 2025]

The Philippines accounted for 19 percent of global pineapple shipments in 2024. Costa Rica topped the list with a 68-percent share.

 

SEC says no new tax, just standardization [BusinessWorld, August 4, 2025]

The SEC issued the statement after the CMEPA faced backlash for removing the tax exemption previously enjoyed by long-term deposits.

 

Apple Pay, Google Pay can operate in PH without BSP approval [Technobaboy, August 4, 2025]

Apple Pay and Google Pay can operate in the Philippines without registering with the Bangko Sentral ng Pilipinas (BSP). The central bank said both services are not considered Operators of Payment Systems (OPS) because they don’t hold or process money directly.

 

Marcos designates part of DLSU-Laguna as 'innovation ecozone' [GMA News Online, August 2, 2025]

President Ferdinand "Bongbong" Marcos Jr. has designated a parcel of land within the De La Salle University Science and Technology Complex in Biñan, Laguna as a Knowledge, Innovation, Science and Technology (KIST) Ecozone under Proclamation No. 985.


BPI to open Singapore office in October [Philippine Daily Inquirer, August 2, 2025]

This means that BPI will be able to offer fund management, product financing, capital markets products and other related services to clients based in Singapore.

 

SEC pushes sustainability reporting for large nonlisted firms [BusinessWorld, August 1, 2025]

THE Securities and Exchange Commission (SEC) wants large nonlisted entities (LNLs) to adopt sustainability reporting alongside publicly listed companies (PLCs).


SSS to increase pensions starting September [ABS-CBN News, August 1, 2025]

"This is made possible by strong cash flows from the completed contribution rate hikes mandated by the Social Security Act of 2018—from 2019 to 2025—as well as positive financial performance from January to April 2025," it said.

 

Planning to visit the US? New Trump fee may cost Filipinos an extra $250 [The Philippine Star, July 31, 2025]

If you’re a Filipino and is scheduled to fly to the United States in the foreseeable future, you might need to include an extra $250 (P14, 371) on top of your other expenses after US President Donald Trump signed into law that affects fees immigrants and visitors need to pay upon enterting the country.

 

Makabayan: Let COA review flood control projects, DPWH can’t be trusted [Inquirer.Net, July 31, 2025]

“The DPWH cannot be trusted to investigate itself when it is neck-deep in these anomalies. This is like asking the fox to guard the henhouse,” said Tinio, who was recently elected Deputy Minority Leader of the House of Representatives.

 

Taytay residents file complaint vs Laguna Lake project's ‘illegal’ public scoping [ABS-CBN News, July 31, 2025]

Taytay, Rizal residents on Wednesday took a major step seeking to nullify the public scoping last July 14 for the Laguna Lakeshore Road Network (LLRN) Project Phase II.

 

PCC clears Mitsubishi's 50% acquisition of GCash ultimate parent firm [GMA News Online, July 31, 2025]

In approving the proposed transaction, the antitrust watchdog said Mitsubishi's investment in AC Ventures would not significantly reduce competition in the relevant market for the provision of Quick Response code-based digital payments to merchants.

 

P1,200 minimum wage bill filed anew, scraps regional boards [The Philippine Star, July 30, 2025]

The measure's primary goal is to amend the Labor Code to abolish regional wage boards and establish a National Wages and Productivity Board to take their place. At the same time, it seeks to automatically set the minimum wage to P1,200, regardless of region.

 

Gov’t Malampaya profit share includes contractors’ income taxes —SC [GMA News Online, July 30, 2025]

The petition stemmed from COA’s finding that P53 billion income taxes were deducted from the government’s share in the project. It ruled that the contractors were liable for the taxes.

2. BIR FURTHER EXTENDS THE DEADLINE FOR THE FILING OF TAX RETURNS & PAYMENT OF VAT DUE OF NON-RESIDENT DIGITAL SERVICE PROVIDER TO AUGUST 5, 2025

Revenue Memorandum Circular (RMC) No. 079-2025, issued on July 31, 2025, further extends the deadline for the filing of tax returns and payment of Value-Added Tax (VAT) due of Non-Resident Digital Service Provider to August 5, 2025.


It may be recalled that the original deadline was set for July 25, 2025, and subsequently extended to July 31, 2025.

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3. BIR PROVIDES GUIDELINES & PROCEDURES ON THE REGISTRATION, FILING OF RETURNS & PAYMENT OF VAT FOR NON-RESIDENT DIGITAL SERVICE PROVIDERS THROUGH THE VAT ON DIGITAL SERVICES PORTAL

Revenue Memorandum Circular (RMC) No. 078-2025, issued on July 29, 2025, provides the guidelines and procedures on the registration, filing of returns, and payment of Value-Added Tax (VAT) for Nonresident Digital Service Providers through the VAT on Digital Services Portal pursuant to Republic Act (RA) No. 12023, also known as the VAT on Digital Services, and its implementing rules under Revenue Regulations (RR) No. 3-2025.

4. BIR ITAD RULING

TO QUALIFY FOR THE 10% PREFERENTIAL TAX RATE UNDER THE PHILIPPINES-NETHERLANDS TAX TREATY, THE INTEREST MUST BE PAID, THE RECIPIENT MUST BE THE BENEFICIAL OWNER OF THE INTEREST & THE LOAN MUST BE GRANTED BY A BANK OR OTHER FINANCIAL INSTITUTIONS

I Netherlands B.V (I-NL), a Netherlands-based corporation engaged in financing and supervising businesses, is not registered in the Philippines. I Ventures Packaging Phils. Corp. (I-PH), a domestic Philippine company producing packaging materials for beverages, entered into a loan agreement with I-NL on March 22, 2021. Under this agreement, I-NL extended a short-term loan to I-PH for business operations, with interest calculated at three-month US LIBOR plus a 3% margin, payable quarterly, with the interest rate fixed in advance for the loan period. The loan shall be paid by I-PH to I-NL on December 31, 2021, unless extended mutually by the parties. I-PH is requesting confirmation that its interest payment to I-NL is subject to the 10% preferential income tax rate. In reply, Section 28 (B)(5)(a) of the Tax Code states that interest on foreign loans received by a nonresident foreign corporation is subject to income tax at the rate of 20%. However, Section 32(B)(5) provides an exemption when a tax treaty applies. According to Paragraph 2, Article 11 of the Philippine-Netherlands tax treaty, interest may be taxed at a reduced rate of 10% but only if the recipient is the beneficial owner and the loan is granted by a bank or other financial institution. In this case, since I-NL is not classified as a financial institution and the interest was not paid, the reduced 10% rate does not apply. Therefore, the applicable tax rate on the accrued interest is 15%. [BIR RULING NO. ITAD 033-25, JULY 17, 2025]

5. CTA CASES

[THE TAXPAYER SHALL BE INFORMED IN WRITING OF THE LAW & THE FACTS ON WHICH THE ASSESSMENT IS MADE; OTHERWISE, THE ASSESSMENT SHALL BE VOID] [DUE PROCESS REQUIRES THE BIR TO CONSIDER THE DEFENSES & EVIDENCE SUBMITTED BY THE TAXPAYER & TO RENDER A DECISION BASED ON THESE SUBMISSIONS]

Petitioner Imasen Philippine Manufacturing Corporation filed an Amended Petition for Review seeking the Court’s approval of the Application for Preliminary Mandatory Injunction and Suspension of Tax Collection and to cancel and set aside the Warrant of Distraint and Levy (WDL), the Final Decision on Disputed Assessment (FDDA), and the Formal Letter of Demand (FLD) issued by the Respondent Commissioner of Internal Revenue (CIR) on the grounds that they are void for they lack factual and legal bases. Petitioner argues that the WDL is void, along with the assessment notices, as they were issued based on a tax audit conducted under an expired Letter of Authority (LOA). It also claims that the FLD and FDDA lack a categorical demand for payment, the deficiency income tax was assessed without fair consideration of its PAN-stage submissions, and that the technical fee assessment in the FDDA is invalid as it was not included in earlier notices. On the other hand, the Respondent argues that there was no denial of due process, the non-revalidated LOA does not invalidate the assessments, the FLD and FDDA contain clear payment demands, and that Petitioner remains liable for the assessed deficiency taxes and penalties. In ruling, the Court held that the Petitioner’s right to due process was violated, rendering the subject tax assessments void. The assessments for deficiency income tax under the FLD were made without good faith evaluation of the Petitioner’s arguments and documents submitted during the PAN stage, which the Court agrees with. Due process requires that the taxpayer be informed in writing of the specific facts and laws forming the basis of the assessment to enable an effective protest, a mandatory requirement that cannot be presumed or ignored. The PAN, FLD/FAN, and FDDA must clearly state these bases; failure to do so voids the assessments. Citing the landmark Ang Tibay case and the Supreme Court ruling in Commissioner of Internal Revenue vs. Avon Products Manufacturing, Inc., the Court emphasized that due process obliges the BIR to consider taxpayer evidence and explain reasons for rejecting defenses, with such reasons documented in the record. Here, the BIR failed to address the Petitioner’s refutations in the FLD, simply reiterating previous findings without justification, violating due process. Consequently, under Section 228 of the Tax Code and related regulations, the deficiency assessments are null, void and unenforceable against Petitioner, and the Respondent cannot collect the disputed taxes. Consequently, the Amended Petition for Review was GRANTED, and the assessment of deficiency taxes was CANCELLED and SET ASIDE. [IMASEN PHILIPPINE MANUFACTURING CORPORATION VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10402, JULY 8, 2025]

 

[WHEN A TAXPAYER IS ABSENT FROM ITS REGISTERED OR KNOWN ADDRESS, SUBSTITUTED SERVICE SATISFIES THE TAX CODE PROVISIONS ON DUE PROCESS REQUIREMENT FOR BIR NOTICES] [ELECTRONIC LETTER OF AUTHORITY RETAINS ENFORCEABILITY BEYOND 180 DAYS WITHOUT REVALIDATION, RESULTING IN THE NON-VIOLATION OF SPEEDY-DISPOSITION OF TAX CASES] [SECOND & FINAL NOTICES TO PRESENT RECORDS & SUBPOENAS ARE REQUIRED ONLY UPON REFUSAL TO SUBMIT DOCUMENTS; NOT NECESSARY WHEN THE TAXPAYER COOPERATES]

Petitioner IBMS Technology Phils. Corporation filed a Petition for Review praying that judgment be rendered cancelling and setting aside Respondent Commissioner of Internal Revenue’s (CIR) deficiency tax assessments in the total amount of Php 124,886,110.67, for the taxable year (TY) 2017. Petitioner argues that the Letter of Authority (LOA) dated August 22, 2018, as well as the Notice of Informal Conference (NIC), Preliminary Assessment Notice (PAN), and Final Assessment Notice (FAN), were not properly served to the authorized representative. It further argues that the Respondent's right to assess deficiency tax had already prescribed; that its constitutional right to speedy disposition was infringed by inordinate delay; and that even if the LOA and ensuing audit are valid, it is not liable for the deficiencies claimed in the FAN.  On the other hand, the Respondent argues that the LOA and notices were validly served by substituted service; that the electronic LOA stays in force past 180 days without revalidation; and that only the first three (3) VAT quarters and the January-November 2017 EWT have prescribed. In ruling, the Court held that the LOA, NIC, PAN, and FAN were validly served citing Section 228 of the Tax Code. Accordingly, proper service was followed, thereby upholding due process and the validity of the assessment. In addition, the issuance of Second and Final Notices to Present Records and Subpoenas Duces Tecum is mandatory only when a taxpayer refuses to produce requested documents.  In light of the Petitioner's cooperation, the issuance of any further notices is deemed unnecessary. The Court further held that, pursuant to RMO No. 19-2015 and 44-2010, the electronic Letter of Authority remains enforceable beyond 180 days without revalidation.  Consequently, the right to speedy disposition was not violated. Finally, under Section 203 of the Tax Code, assessments must be made within three (3) years from the last day prescribed for filing the return. Correspondingly, since the FAN dated December 22, 2020, was received on December 23, 2020, the 1st–3rd quarter 2017 VAT and January–November 2017 EWT assessments have prescribed and are therefore void. Given all the foregoing, the Petition was PARTIALLY GRANTED. The portions of the deficiency assessments covering the first to third quarter VAT and January–November EWT were CANCELLED and SET ASIDE. However, the remaining deficiency assessments for income tax, December EWT, Improperly Accumulated Earnings Tax, the 25% surcharge, and interest thereon were hereby UPHELD WITH MODIFICATIONS.  [IBMS TECHNOLOGY PH CORPORATION VS COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10606, JULY 30, 2025]


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