Subject: WEEKLY TAX UPDATES [JAN 28] BIR vows ‘clearer rules’, safeguards for tax audits

WEEKLY TAX UPDATES

JANUARY 28

  1. TAX & BUSINESS-RELATED NEWS [JANUARY 22-27]

  2. BIR ISSUES UPDATED POLICIES, CONTROLS & PROCEDURES FOR TAX AUDIT & ASSESSMENT AFTER THE LIFTING OF SUSPENSION

  3. BIR LIFTS SUSPENSION OF TAX AUDIT & FIELD OPERATIONS

  4. CTA CASE

1. TAX & BUSINESS-RELATED NEWS [JANUARY 22-27]

1. Baguio revisits cable car, elevated train proposals

2. Willie Revillame denies financial woes, officially returns to noontime TV

3. FDA chief denies corruption in agency, says he will not resign

4. Government to ban shady contractors from infrastructure projects

5. Vehicle sales accelerate to record high last year

6. D&L unit unveils abaca pellets for plastics compounding

7. SC rules GMA talents in 2014 labor case are regular employees

8. BIR vows ‘clearer rules’, safeguards for tax audits

9. BYD posts strongest year yet in the Philippines in 2025

10. K-pop star Cha Eun-Woo accused of P805 million tax evasion

11. BIR set to resume tax audits in Q1

12. Megawide inks lease for P1.19-B Baguio City transport terminal

13. Safe pa ba taxes natin? Ogie Alcasid says Filipinos deserve an honest gov’t

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.

Baguio revisits cable car, elevated train proposals [Philippine Daily Inquirer, January 27, 2026]

The project, initially proposed in 2019 by businessman Robert John Sobrepeña as an unsolicited public-private partnership (PPP), is now being considered as a side project by developer Megawide Construction Corp.


Willie Revillame denies financial woes, officially returns to noontime TV [The Philippine Star, January 27, 2026]

Speaking at the recent press conference for “Wilyonaryo,” his new game show that premiered over the weekend on wilyonaryo.com, the veteran TV host said selling properties does not mean he is struggling financially.


FDA chief denies corruption in agency, says he will not resign [ABS-CBN News, January 27, 2026]

He explained that they receive 254,000 applications per year, which is reviewed by fewer than 250 evaluators. They have 248 field regulatory operations offices and 28 regulatory enforcement units.


Government to ban shady contractors from infrastructure projects [The Manila Times, January 26, 2026]

Public Works Secretary Vince Dizon said over the weekend that the move was on instructions of the president, in line with the reforms in the budget and implementation of government projects that the taxpayers’ money should go to their intended purposes.


Vehicle sales accelerate to record high last year [The Philippine Star, January 26, 2026]

According to the sales figures from the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI), Truck Manufacturers Association (TMA) and other available industry data, the country’s total vehicle sales reached 491,395 units last year, 3.7 percent higher than the previous record of 473,842 set in 2024.

 

D&L unit unveils abaca pellets for plastics compounding [Philippine Daily Inquirer, January 26, 2026]

A unit of Lao family-led D&L Industries Inc. has launched a 100-percent abaca pellet product for plastics compounding, marking a major step in the company’s sustainability initiatives.

 

SC rules GMA talents in 2014 labor case are regular employees [ABS-CBN News, January 25, 2026]

The Third Division said that GMA Network had selected and engaged the petitioners, had paid their wages, had the power to dismiss them, and had power over their conduct and how they did their jobs — including barring them from taking on projects with other production outfits.

 

BIR vows ‘clearer rules’, safeguards for tax audits [Philippine Daily Inquirer, January 24, 2026]

The BIR said in a statement on Friday that it would relaunch tax audits under a five-point reform program dubbed BIR D.A.R.E.S., which stands for “Digital and Data Transformation; Audit Reform and Accountability; Revenue Collection and Base Protection; Employee Empowerment and Welfare Promotion; and Service Excellence and Stakeholder Engagement.”

 

BYD posts strongest year yet in the Philippines in 2025 [Philippine Daily Inquirer, January 24, 2026]

Philippine sales of Chinese electric vehicle (EV) maker BYD hit a record in 2025, with 26,122 units sold and a 446-percent increase from the previous year. Demand for electric and hybrid models accelerated.

 

K-pop star Cha Eun-Woo accused of P805 million tax evasion [ABS-CBN News, January 24, 2026]

The report explained that the issue centers on a paper company established by Eun-Woo’s mother, identified only as Ms. Choi. The company allegedly entered into a contract with his agency, Fantagio, to support his entertainment activities. Under this setup, income earned from his work was reportedly divided among Eun-Woo, Fantagio, and the established company, based on a pre-agreed ratio.

 

After reviewing the arrangement, South Korea’s NTS concluded that the company had no actual business operations and functioned as a shell entity. Authorities believe it was created so that income could be taxed under a lower corporate tax rate of about 20%, instead of the personal income tax rate, which can reach as high as 45%.

 

BIR set to resume tax audits in Q1 [Philippine Daily Inquirer, January 23, 2026]

The Bureau of Internal Revenue (BIR) is expected to again issue controversial letters of authority (LOAs) within the first quarter, an informed source said, once planned reforms to digitize audits and strengthen safeguards are finalized.

 

Megawide inks lease for P1.19-B Baguio City transport terminal [BusinessWorld, January 23, 2026]

The terminal will be built on a five-hectare property in Barangay Dontogan, about five kilometers from Baguio City proper.

 

Safe pa ba taxes natin? Ogie Alcasid says Filipinos deserve an honest gov’t [Politiko, January 22, 2026]

“This morning after my prayers and devotion, my accountant alerted me that taxes will be paid again and deadline is on Monday. It can take a toll on us when we see how much we part with for the hardwork we put out and not know if our contributions are safeguarded,” he said in a Facebook post.

2. BIR ISSUES UPDATED POLICIES, CONTROLS & PROCEDURES FOR TAX AUDIT & ASSESSMENT AFTER THE LIFTING OF SUSPENSION

Revenue Memorandum Order (RMO) No. 1-2026, issued on January 27, 2026, prescribes the revised policies, controls, and procedures for tax audit and assessment following the lifting of suspension under Revenue Memorandum Circular (RMC) No. 107-2025. Under this issuance, the Technical Working Group Review Committee on Assessment Integrity and Audit Reform (TWGRC-AIAR) was established to review existing audit processes, identify weaknesses and strengthen controls and oversight mechanisms, and recommend strengthened policies and procedures for tax audits.

 

Highlights include:

 

I. Scope of Resumption

 

a. Issuance of Electronic Letters of Authority (eLAs), Mission Orders (MOs), and Tax Verification Notices (TVNs)

b. Continuation of suspended audit cases

c. Enforcement, verification, assessment, and collection activities

d. Other necessary audit/enforcement actions

 

II. Responsibilities

 

a. Mandatory labeling for taxpayer verification if pursuant to an Electronic Letter of Authority, Mission Order, and Tax Verification Notice

 

  • eLA - “FULL EXAMINATION OF BOOKS OF ACCOUNTS AND OTHER ACCOUNTING RECORDS”

  • MO - “VERIFICATION, SURVEILLANCE, MONITORING, INSPECTION ACTIVITIES ONLY - LIMITED AUTHORITY”

  • TVN - “VERIFICATION AUTHORITY - LIMITED SCOPE”

b. System Controls

 

  • Internal Revenue Integrated System - Case Management System - Audit (IRIS-CMSA) Administrator shall ensure that the system templates, mandatory fields, and validation controls require the inclusion of: (i) taxpayer name/TIN; (ii) tax types; (iii) taxable period; (iv) Revenue Officers (RO)/Group Supervisors (GS); (v) legal basis; and (vi) mandatory label

III. Single-Instance Audit Framework

 

a. One eLA per taxpayer per taxable year covering all tax types to prevent overlapping/fragmented audits. Exceptions: ONETT, tax clearance, cancellation of business registration, fraud cases

b. Fraud findings - referral to the concerned Revenue Region's Regional Investigation Division (RID) or National Investigation Division (NID); issuance of a new eLA may cover multiple years

 

IV. Consolidation of Pending eLAs

 

a. Automatic consolidation begins March 4, 2026

b. Replacement eLA issued; old eLAs cancelled

c. Non-consolidation option for VAT audits: request must be filed not later than February 16, 2026.

d. Beginning May 4, 2026, all pending eLAs shall be automatically consolidated.

e. Fraud findings - referral to RID/NID

 

V. Issuance of New eLAs

 

a. System-assisted audit selection based on risk criteria (Annex “A”)

b. Audit list generated by system - approved by CIR

c. Anonymized selection process: taxpayer identity concealed during assignment to Ros

d. eLA is issued only after completion of the system-assisted taxpayer selection, centralized approval, and anonymization

e. Must comply with Single-Instance Audit Framework

 

VI. Transfer of Task Force Audits

 

a. Task forces deemed concluded; cases absorbed by regular offices

b. Accomplishment and Case Inventory Report required

c. Run After Fake Transactions (RAFT) Task Force: all LOAs cancelled; cases turned over to NID

d. Other task forces - cases transmitted to RDO/Region/LT Audit Office

 

VII. Transition of VAT Audit Sections (VATAS) & Large Taxpayers VAT Audit Units (LTVAU)

 

a. Wind-up operations until May 15, 2026

b. No new audits; only consolidation/transition

c. All records transferred to regular offices by April 30, 2026

 

VIII. Audit & Assessment Proper

 

a. Mandatory standardized checklist (Annex “B”) for audit documents

b. Industry-specific checklists to follow once issued

c. Minutes required for taxpayer discussions (e.g., Notice of Discrepancy)

d. ROs shall not issue unreasonable assessments

3. BIR LIFTS SUSPENSION OF TAX AUDIT & FIELD OPERATIONS

Revenue Memorandum Circular (RMC) No. 8-2026, issued on January 27, 2026, announces the resumption of tax audit and related field operations following the completion of the review of audit policies, procedures, and internal control mechanisms. These activities include issuance of electronic Letters of Authority (eLAs), Mission Orders (MOs), and Tax Verification Notices (TVNs); continuation of audits previously suspended under RMC No. 107-2025; and the conduct of enforcement, verification, assessment, and collection activities, as well as other necessary audit actions to ensure tax compliance.

4. CTA CASE

FOREIGN CORPORATION THAT APPOINTS LOCAL AGENT IN THE PHILIPPINES IS DEEMED DOING BUSINESS IN THE PHILIPPINES

Petitioner Organisational Support Services, Inc. filed a Petition for Review seeking a refund of alleged unutilized input Value Added Tax (VAT) attributable to its zero-rated sales of services for Calendar Year (CY) 2020. The Petitioner argued that it complied with all the requisites under Section 112 of the Tax Code, namely: (1) It is VAT-registered; (2) claims were filed within the prescriptive periods; (3) services were rendered to a foreign corporation not engaged in business in the Philippines; (4) payments were in acceptable foreign currency; and (5) input taxes were properly substantiated and remained unutilized. In addition, the Petitioner presented a Securities and Exchange Commission (SEC) Certification of Non-Registration of Therapeutic Case Management Services Limited (TCMS) and an Apostilled Certificate of Incorporation and Articles of Association of TCMS from Hong Kong. It maintained that these documents sufficiently established TCMS as a nonresident foreign corporation (NRFC). On the other hand, Respondent Commissioner of Internal Revenue (CIR) countered that the Petitioner failed to prove that TCMS was not doing business in the Philippines, a critical requirement for zero-rating under Section 108(B)(2) of the Tax Code. The Service Agreement demonstrated an agency relationship, making TCMS effectively engaged in business in the Philippines through the Petitioner. In ruling, the Court held that the Petitioner failed to prove entitlement to input VAT refund under Section 112 of the Tax Code. While the Petitioner established TCMS’s foreign incorporation, the Service Agreement showed an agency relationship. By appointing the Petitioner as its local agent, TCMS was deemed doing business in the Philippines. Thus, the Petitioner’s sales of services did not qualify as zero-rated transactions under Section 108(B)(2). Consequently, it failed to meet the requisites, thus, the Petition is DENIED. [ORGANISATIONAL SUPPORT SERVICES INC. VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10929, JANUARY 20, 2025]


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