Royal Air Philippines to temporarily suspend commercial flights starting Jan. 4 [The Philippine Star, December 31, 2025] Royal Air was founded in 2002 as an air charter service. In 2018, the airline launched commercial operations between Manila/Clark and Caticlan, eventually expanding to include international service between Caticlan and Taipei. Past routes have included Cambodia, China, Hong Kong, South Korea, and Vietnam. Pregnant BPO employee wins discrimination case [Philippine Daily Inquirer, December 30, 2025] The Supreme Court has ordered a business process outsourcing company (BPO) to pay the back wages and separation pay of a female employee, ruling that transferring her to a remote location due to her pregnancy constitutes constructive dismissal and violates the Magna Carta of Women. SEC urges private hospitals to tap capital market funding [Philippine Daily Inquirer, December 30, 2025] Launched under SEC Memorandum Circular No. 11, Series of 2017, SEC HOPES aims to make it easier for hospitals to access funding by simplifying and speeding up the registration process for securities offerings intended to finance the construction and expansion of health-care facilities. BI reminds foreigners to show up for 2026 Annual Report [GMA News Online, December 30, 2025] The requirement covers all registered foreigners and ACR I-Card holders in the Philippines, except those with temporary visitor or tourist visas. SEC adopts new rules on sustainability reporting [Philippine Daily Inquirer, December 30, 2025] In a statement on Monday, the SEC said it adopted the Philippine Financial Reporting Standards (PFRS) on Sustainability Disclosures through Memorandum Circular No. 16, Series of 2025, issued on Dec. 22. Singapore manufacturer invests P180M in Batangas ecozone [Philippine Daily Inquirer, December 30, 2025] A Singapore-based manufacturing group has committed P180 million to establish operations in a Philippine Economic Zone Authority (Peza) ecozone in Santo Tomas, Batangas, a move expected to strengthen the area’s manufacturing base. Cebu group warns of ‘critical’ power supply in 2026 [Cebu Daily News, December 30, 2025] The Cebu Electricity Rights Advocates (CERA), through its convenor Nathaniel Chua, has warned of a “critical” energy phase for Cebu in 2026 if the island-province continues to rely on “imported” power brought here through submarine cables. LIST: Long weekends in 2026 [GMA News Online, December 29, 2025] Prepare your bags and plan your destinations as Malacañang has released the list of regular and special non-working holidays for 2026, paving the way for several long weekends. Supreme Court clears 10 in tax credit scam [Philippine Daily Inquirer, December 29, 2025] The Supreme Court cleared 10 former Department of Finance (DOF) employees implicated in the P60-billion tax credit scam in the 1990s after finding that they merely performed their duties based on the then-prevailing “flawed” process of the agency’s One-Stop Shop program. DHSUD mulls income tax-exempt housing [The Manila Times, December 29, 2025] THE Department of Human Settlements and Urban Development (DHSUD) said it is studying a proposal to classify economic housing as corporate income tax-exempt mass housing under Batas Pambansa Blg. 220. SEIPI sees double-digit growth in electronic exports this year [BusinessWorld, December 29, 2025] According to preliminary data from the Philippine Statistics Authority, exports of electronic products surged 50.6% in November to $4.19 billion from $2.78 billion a year ago. Electronics remained the top export category, accounting for 60.7% of the country’s total exports. China's BYD poised to overtake Tesla in 2025 EV sales [ABS-CBN News, December 29, 2025] At the end of November, Shenzhen-based BYD, which also produces hybrid vehicles, had sold 2.07 million EVs so far in 2025. Tesla, for its part, had sold 1.22 million by the end of September. Tawi-Tawi emerging as BARMM’s 'new investment frontier' [The Philippine Star, December 29, 2025] One province in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) is increasingly being highlighted by merchants and regional officials as the region’s "new investment frontier." Known for being the most peaceful among BARMM’s five provinces, it also benefits from its strategic proximity to Malaysia and Indonesia, making it an attractive destination for commerce and trade.” JV aborted: Philip Laude’s joint account with ACT-CIS’ Edvic Yap was closed years before AMLC freeze, DivinaLaw says [Bilyonaryo, December 29, 2025] Timson Securities president Philip Laude never formed any corporation or formal partnership with ACT-CIS party-list Representative Edvic Yap, and a bank account opened in connection with a proposed venture was closed years before any freeze order by the Anti-Money Laundering Council (AMLC), his lawyers said. New DOF chief assures public of policy continuity [The Philippine Star, December 28, 2025] Finance Secretary Frederick Go said the DOF harmonizes with the policy direction of former finance chief and now Executive Secretary Ralph Recto particularly on proposed tax measures. US defense supply chain manager Anglicotech plans phased investment for Aurora ecozone [BusinessWorld, December 28, 2025] Anglicotech started operating in Subic in 2024, providing defense logistics services, including foreign military sales for the Armed Forces of the Philippines and the US Department of War. GOCC dividends hit P106 billion, close in on year-end target [The Philippine Star, December 28, 2025] The highest contributors are financial institutions, with Land Bank of the Philippines providing P26 billion and the Bangko Sentral ng Pilipinas contributing P18.9 billion. Mindoro, Zamboanga ports to be configured for agri trade logistics [BusinessWorld, December 28, 2025] The sites of the new ports are Abra de Ilog, Occidental Mindoro, and near Dipolog, Zamboanga del Norte. LGU shuts unsafe amusement park in Bulacan town [The Philippine Star, December 28, 2025] The preemptive inspection came after several accidents were reported in two amusement parks in neighboring Pampanga and Pangasinan provinces, he added. 3 Revillas in Congress seek end to system loss charges [Cebu Daily News, December 27, 2025] “For decades, Filipino households have been paying for electricity they never consumed and losses they did not cause. This practice is not only unfair, but it is also fundamentally unjustified,” Mercado-Revilla said. No change to business permit rules until mid-2026 [Philippine Daily Inquirer, December 26, 2025] The Anti-Red Tape Authority (Arta) has ordered that existing business permit and licensing procedures remain in place until June 30, 2026. This is intended to prevent disruptions during the 2026 renewal period. BIR warns vs 'Foreign Trading Income Clearance' scam [ABS-CBN News, December 26, 2025] In an advisory dated December 17, 2025, Internal Revenue Commissioner Charlito Mendoza flagged a counterfeit memo purportedly issued by the agency’s International Tax Affairs Division. The fake document falsely claims that recipients of foreign funds must secure a "Foreign Trading Income Clearance" and pay a mandatory "Taxable Verification Fee" before their money can be released. | | WHEN A REQUEST FOR CONFIRMATION RULING ON THE SITUS OF SERVICES LACKS DETAILED FACTUAL BASIS, THE SAME MAY BE DENIED AJ Co., a domestic corporation engaged in pharmaceutical operations, engaged IP Co. (a Singapore Non-Resident Foreign Corporation) to render software development for monitoring the field force as well as installation and online training. Based on the Service Agreement, services are allegedly performed entirely in Singapore, and payments are made monthly. AJ Co. believes that service fees paid to IP Co. are exempt from the Philippine income tax and withholding tax. In reply, Section 23(D), Sec. 42(A)(3) of the Tax Code provides that services are Philippine-sourced only if performed in the Philippines. A perusal of the Service Agreement revealed that it lacked specific details on how services were performed; thus, it may be difficult to establish situs. In claims for exemptions, the exemptions shall be strictly construed against the taxpayers, and the burden of proof rests with AJ Co. No evidence of software development or transfer of ownership to AJ Co. was even presented. Consequently, the regular monthly payments are treated as a supply of scientific/technical knowledge, thus considered, deemed services rendered within the Philippines under Sec. 42(A)(4)(c) of the Tax Code, therefore, subject to income tax and withholding tax. [BIR RULING NO. OT-068-2025, APRIL 15, 2025]
THE HOMEOWNERS ASSOCIATION’S MEMBERSHIP FEES, DUES, RENTALS & REIMBURSEMENT-BASED CHARGES ARE TAX EXEMPT, PROVIDED THEY ARE USED FOR BASIC COMMUNITY SERVICES R ESTATES PHASE I-A & II HOMEOWNERS’ ASSOCIATION, INC., a non-stock, non-profit entity registered with the HLURB, sought exemption from Income Tax, Value-Added Tax (VAT), and Percentage Tax on association dues and income from facility rentals pursuant to Republic Act (R.A.) No. 9904 (Magna Carta for Homeowners and Homeowners’ Associations) and Revenue Memorandum Circular (RMC) No. 9-2013. Based on the Local Government Unit (LGU) certification, the Association provides basic services (security, lighting, street maintenance, garbage collection, etc.) because the LGU lacks resources. In reply, association dues, membership fees, rentals, and other charges collected on a purely reimbursement basis are exempt from Income Tax, VAT, and Percentage Tax provided such income must be used for cleanliness, safety, security, and basic services benefiting members, including maintenance of subdivision facilities. However, the Association remains taxable on income from other activities not related to such reimbursements, including interest income (subject to applicable final withholding taxes) and revenues from operations beyond its basic functions, which may be subject to VAT or Percentage Tax depending on thresholds. The Association must still file Annual Information Returns, issue registered invoices for taxable transactions, act as a withholding agent when required, and comply with BIR audit procedures. [BIR RULING NO. OT-056-2025, APRIL 14, 2025]
RECONVEYANCE PURSUANT TO A COURT DECISION DECLARING TRUST IS NOT A TAXABLE TRANSFER; TAX EXEMPTION HINGES ON THE FACT THAT RECONVEYANCE IS NOT A SALE OR DISPOSITION, BUT A RETURN TO THE RIGHTFUL OWNER A Co. is seeking confirmation whether reconveyance of properties pursuant to a final court decision is subject to Capital Gains Tax (CGT) under Sec. 24(D)(1) of the Tax Code. As represented, Mr. V, one of A Co.’s directors, purchased two parcels of land sometime in 1976 using A Co.’s funds. Properties were registered under Mr. V’s name, but A Co. continuously possessed and used them for business. The owner’s duplicate TCT is held by A Co.’s founder; real property taxes were paid by A Co. Sometime in 2020, Mr. V executed an Affidavit of Existence of Trust, affirming properties were acquired for A Co. In a subsequent civil case instituted, the Court declared an implied resulting trust between Mr. V (trustee) and A Co. (beneficiary). The Court ordered reconveyance and issuance of new titles in A Co.’s name. In 2022, the decision became final and executory, and in 2023, Mr. V executed a Deed of Reconveyance in favor of A Co. In reply, Section 24(D)(1) of the Tax Code imposes 6% CGT on presumed capital gains from the sale, exchange, or disposition of real property. However, in the present case, reconveyance pursuant to a court decision is without consideration, thus, no presumed capital gains; consequently, no CGT shall be imposed. Likewise, it is not subject to the Documentary Stamp Tax (DST) under Section 196 of the Tax Code since reconveyance is merely returning property to the rightful owner. Only ₱30 DST applies to the notarial acknowledgment under Sec. 188 of the same Code. [BIR RULING NO. OT-035-2025, FEBRUARY 26, 2025]
NEA-REGISTERED ELECTRIC COOPERATIVES LONG-STANDING EXEMPTIONS UNDER P.D. 269 LAPSED AFTER 30 YEARS OR UPON FULL REPAYMENT OF INDEBTEDNESS, WHICHEVER COMES FIRST L Electric Cooperative, Inc., a non-profit and non-stock membership electric cooperative and registered with the National Electrification Administration (NEA) on October 26, 1975, is requesting a continued tax exemption pursuant to Presidential Decree (P.D.) No. 269 as clarified under Revenue Memorandum Circular (RMC) No. 72-2003. P.D. 269 originally granted a permanent income tax exemption and a 30-year exemption from other national/local taxes, duties, and fees. In reply, the BIR first referred to the legal antecedents as follows: P.D. 1955 (1984) withdrew exemptions for private enterprises. P.D. 2008 (1986) restored exemptions for electric cooperatives. Executive Order (E.O.) 93 (1986) again withdrew exemptions, but Fiscal Incentives Review Board (FIRB) Resolution No. 24-87 (effective July 1, 1987) restored them with limitations such that income from electric service operations and other sources (e.g., bank interest) remained taxable. Republic Act (R.A.) 9337 (Expanded Value-Added Tax (VAT)/EVAT Law) (2005) amended the VAT law, removing VAT exemption for electric cooperatives as implemented by Revenue Regulations (RR) 16-2005 (as amended by RR 4-2007) which imposed 12% VAT on sales of electricity by generation, transmission, and distribution companies, the only exception is the 0% VAT for renewable energy sources (biomass, solar, wind, hydro, geothermal, ocean, fuel cells, hydrogen). Based on the foregoing, L Electric Cooperative’s income from electric service operations is subject to income tax under FIRB Resolution No. 24-87. Its general tax exemption under P.D. 269 expired on December 31, 2005 (30th full calendar year after organization). Beginning January 1, 2006, L Electric Cooperative became liable for Income Tax (including final taxes on bank interest, royalties, capital gains), Documentary Stamp Tax (DST) on transactions with non-members, VAT on electricity generation/distribution and importation of equipment, and other national/local taxes and fees not expressly exempted. [BIR RULING NO. OT 021-2025, JANUARY 7, 2025]
LOCAL WATER DISTRICT IS EXEMPT FROM CORPORATE INCOME TAX. CONSEQUENTLY, PAYMENTS ARE NOT SUBJECT TO CREDITABLE WITHHOLDING TAX EXCEPT WHEN PAYOR IS A GOVERNMENT ENTITY, THUS, SUBJECT TO 2% T Water District, a government-owned local water district, requested confirmation of tax exemption under Republic Act (R.A.) No. 10026, amending Section 27(C) of the Tax Code, which grants income tax exemption to Local Water Districts. In reply, the BIR confirms the position of T Water District that it is not liable to corporate income tax, and consequently to the creditable withholding tax applicable to income-taxable entities, in line with the statutory exemption provided under R.A. No. 10026. However, the exemption does not extend to Franchise Tax, as Section 119 of the Tax Code expressly imposes a 2% Franchise Tax on utilities, including gas and water franchises, and neither R.A. No. 10026 nor Revenue Memorandum Circular (RMC) No. 28-2010 provides an exemption from such tax. Also, Section 5.116(A)(4)(b) of Revenue Regulations (RR) No. 2-98, as amended, provides that payments made by government agencies, government Owned and Controlled Corporations (GOCCs), or Local Government Units (LGUs) to local water districts are required to be subject to 2% withholding (franchise) tax, which may be credited against the taxpayer’s franchise tax liability. In conclusion, while T Water District enjoys full exemption from corporate income tax, it remains subject to the 2% Franchise Tax, and any payments received from government entities must be withheld with 2%, creditable against its Franchise Tax due. [BIR RULING NO. OT-005-2025, JANUARY 6, 2025] |
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