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Tag: Taxwise or Otherwise

Decoding the revised Corporation Code (Part I)

On Feb. 20, Republic Act 11232 was signed into law, amending the more than 38-year old Corporation Code of the Philippines. This comes at an opportune time, in the midst of an active government campaign towards the promotion of the ease of doing business in the Philippines. In 2018, the Ease of Doing Business Act was passed and a more liberal Foreign Investments Negative List was issued. Hopefully, the changes brought about by the amendments in the Code can complement these laws in pursuing the ultimate goal -- to improve the Philippines’ competitiveness as an investment destination.

The tax amnesty and its bittersweet Valentine plot twist

After almost two years, Republic Act No. 11213, or the Tax Amnesty Act, was finally signed by the President on Feb. 14.

Finding success in 2019

Every Chinese New Year, my wife and I have this tradition where we go to our favorite restaurant to pray and reflect on the past year and write down our plans and aspirations for the upcoming year. It serves to remind us how God is in total control of our lives. It also makes us realize how much we grew after experiencing all sorts of interesting events in the past year, whether good or bad, and during fun and frustrating times.

Advertising and mass media in the digital age

“You have to have a dream, whether big or small. Then plan, focus, work hard and be very determined to achieve your goals” -- Henry Sy, Sr.

Do VAT-exempt medicines need the BIR’s prescription?

At the start of the year, we often find people determined to come up with New Year’s resolutions. For sure, staying healthy is part of most people’s list. Not surprising, as Filipinos are now health-conscious; health and wellness establishments are everywhere; and most people are trying new diets.

Cheaper medicine for every Juan

Last year, the government’s initiative to reform the tax system kicked off when Republic Act 10963 or the “Tax Reform for Acceleration and Inclusion” (TRAIN) Law took effect. To promote a healthy lifestyle and provide better health care for Filipinos, the TRAIN Law amended provisions in the National Internal Revenue Code on value-added tax (VAT), expanding the list of VAT-exempt transactions to include sale of drugs and medicines prescribed for diabetes, high cholesterol, and hypertension starting Jan. 1.

Conflict on the irrevocability rule

One of the well-established doctrines in the legal practice is stare decisis -- a Latin term for “to stand by things decided”. It is based on the principle that once a question of law has been examined and decided, it should be deemed settled and closed from further argument. As aptly discussed by then Chief Justice Reynato Puno, there are two types of stare decisis: vertical and horizontal. The first pertains to the duty of lower courts to apply the decisions of the higher courts to cases involving the same facts, while the second requires that the high court must follow its own precedents. The application of stare decisis is a bar to any attempt to re-litigate the same issues, necessary for two simple reasons, i.e. economy and stability.

Just one card

How many identification cards do you have? Which of those are accepted as proof of your identity by the government or private entities?

After the holidays: Some FX guidance for your travels back home

The Christmas and New Year holidays are over! Just when you become comfortable with a daily schedule of wake up-eat-do nothing-sleep, reality returns and it’s always a struggle to get back to your old routine.

US citizen-based taxation: A drawback for American expats

Under the citizenship-based taxation approach, a US citizen working or enjoying retirement in any country outside the US shall continue to be subject to US income tax. This rule signifies that individuals are taxed based on their citizenship irrespective of their place of residence. In other words, if an American is outside of the US at any time during the year and earned income abroad, US Federal law requires him to file his Individual Income Tax Return or Form 1040, to report his worldwide income, and to pay taxes to the Internal Revenue Services (IRS). This makes the US one of only two countries (the other being the African nation of Eritrea) implementing this tax regime; other countries tax worldwide income of residents, but not citizens living elsewhere. For American expats, this entails recurring tax obligations on top of evaluating the tax impact in the foreign country where they are assigned to work. So even if an American expat is working in a tax-free country, he or she is still required to file income tax returns with the IRS — an obligation which, surprisingly, some Americans working overseas seem to be unaware of.

Mentoring performance in your organization

Fifteen years ago, I started managing people for one of the leading life insurance companies in the Philippines. I was confident that my four years of work experience in the fast-moving consumer goods (FMCG) and Transportation industries, plus my newly minted master’s degree, would be enough for me to be a successful manager. I was only half right. My formative years as a direct manager of a small team were full of “a-ha” moments mixed with humbling learning experiences on how to manage others.

Defeated in victory

Appellate courts, such as the Supreme Court and the Court of Tax Appeals (CTA), are collegial bodies that arrive at decisions only after deliberation, the exchange of views and ideas, and the concurrence of the required majority vote. This mechanism reflects the democratic principles enshrined and protected under our Constitution, especially when contentious cases are elevated to higher courts, particularly those of national interest.

Some ease on the tax clearance

Since validation of tax compliance is a precondition to entering into and is a continuing obligation in government contracts, the Bureau of Internal Revenue (BIR) has issued regulations dating back to 2005 providing guidelines for the filing and processing of applications for tax clearance required from participating bidders.

Cementing risk culture in the organization

Have you heard of anti-cheating headbands? In 2017, photos of students wearing anti-cheating headbands-made up of two folders to block the peripheral vision while taking the exam-went viral. The situation gives us an idea of the classroom culture as observed by the teacher. As a result, the anti-cheating headbands became the teacher’s tool to cultivate integrity and honesty as components of the desired classroom culture. In a way, this helps us visualize how PwC views culture: based on common assumptions and beliefs that can predict how people will behave.

Plan ahead for a Merry Christmas

So much had been speculated and observed as to the effect of Republic Act 10963, otherwise known as the Tax Reform for Acceleration and Inclusion (TRAIN) Act, on inflation and the cost of basic commodities since it took effect this year. The lack of safety nets to counter the effects of inflation has been the source of much negative comment.

Top withholding agents — In for the greater good

“Any change, even a change for the better, is always accompanied by drawbacks and discomforts.” -- Arnold Bennett

Staying positive about the 11th Negative List

To ease restrictions against foreign equity, the Eleventh Foreign Investment Negative List (FINL) was issued by the President on Oct. 29, 2018 and takes effect 15 days from its publication in a newspaper of general circulation.

A gift for mothers: Extended maternity leave

After more than two decades and several failed attempts, the bicameral committee finally approved draft legislation increasing the paid maternity leave benefit for working women. To be called the “105-Day Expanded Maternity Leave Law” if enacted, it will amend Republic Act No. 7322 of 1992, which at present entitles mothers to paid leave of 60 days for normal delivery or 78 days for caesarian section delivery.

Premiums on health care are taxable, now what?

Following the issuance of RMC 50-2018, the Bureau of Internal Revenue (BIR) clarified that premiums on health care paid by an employer for all employees, whether holding rank and file or managerial/supervisory positions, under a group insurance plan shall be included as part of other benefits of these employees subject to the P90,000 exemption threshold.

Securing advance rulings on tariff classification

One of the greatest challenges some traders face is to have their shipments put on hold by the Bureau of Customs (BoC) due to tariff classification issues, errors on valuation, and incomplete documents, among others. Often, some importers do not conduct a regular review of their tariff classification codes for accuracy and compliance and as such, they can be potentially paying more duties on their products than they are actually liable for.

Can’t deny D&I: Why diversity and inclusion matter

Diversity and inclusion (D&I) are increasingly becoming a business priority. In a time of great changes and disruption, business leaders are pressured to keep up by attracting and retaining the best talent, serving their customers better, and increasing their stakeholders’ trust -- all of which are benefits that D&I can offer.

Rules for implementing the sweetened beverage tax

In addition to raising tax revenue, governments impose excise taxes to influence the buying behavior of consumers, for instance to discourage the purchase and use of certain goods and services that the government considers unhealthy or unnecessary.

Premiums on group insurance: Taxable or non-taxable?

FOLLOWING the issuance of Revenue Memorandum Circular (RMC) 50-2018, many tax treatment and procedural questions relating to the implementation of the TRAIN law, particularly on income and withholding tax, were clarified. However, there is one particular question which seems to have left tax practitioners with more questions than answers, and this is the tax treatment of premiums related to employee group health insurance.

No demand, no pay

“No demand, no delay.” This rule is spelled out by Article 1169 of the Civil Code, where those obliged to deliver or to do...

Telework: Redefining the future workplace

Every workday, I always wish for a smooth and less stressful commute to allow me to face workplace demands with enthusiasm. My routine involves taking a quick look at my GPS navigation app to check my Estimated Time of Arrival (ETA). On most days, my virtual “friend” Jane, the voice of the app, announces an ETA of almost 1.5 hours. There are other days when traffic is worse, especially on Mondays or in bad weather.

What does digital finance really mean?

“Innovate or die” is driving many companies to constantly improve themselves in order to compete in today’s fast-paced environment. While the digital age brought about many breakthroughs, it also led to the demise of others like Blockbuster, Nokia and Kodak. Today’s top brands may face the same fate if they do not continuously innovate.

Unacceptable tax avoidance

ABOUT two months ago, the weather bureau, PAGASA, officially announced the start of the rainy season. Despite sufficient warnings and precautionary measures by the government, these tropical cyclones often bring widespread damage to the country’s infrastructure, disrupt electricity and communication services, destroy crops, and leave behind human casualties.

Data Privacy Act: Compliance in convenience

We live in a technological system of connections. Innovative approaches in our daily pursuits have made our identities more accessible, and, concomitantly, our lives more exposed. This statement holds true for everyone. In this age of convenience, every transaction allows for a window to compromise our often personal, sensitive, or privileged information.

The pitfalls of ‘business-IT alignment’

Over the last decade, technology’s role in an organization has changed significantly from being a support function to a strategic enabler driving business growth and differentiation. In the case of digital-born companies, their business model is anchored on new technologies which enable them to be more agile and responsive to customer needs.

Getting the most out of TRAIN

Over the past few months, two “trains” have been in the news. One of them is a literal train, Metro Manila’s poorly-maintained commuter rail line. The other is TRAIN, or the Tax Reform for Acceleration and Inclusion Law, which promises to raise take-home pay of most Filipinos.

Foreign nationals and the practice of real estate service

The real estate industry is rapidly changing. Shared workspaces and serviced offices are sprouting to meet demand for mobility, connectivity, and flexibility. Townships and mixed-use developments are sprawling inside and outside Metro Manila. Aggressive government infrastructure projects and road network expansions advance real estate development.

Now online: SEC company registration

“At last!” I exclaimed in relief twice. First, upon hearing last year about the plans for online registration to be implemented the Securities and Exchange Commission (SEC), and then again upon the signing of Republic Act (RA) No. 11032 or the Ease of Doing Business Act recently.

The ERM Agenda: 2018 and beyond

The release of the updated Enterprise Risk Management (ERM) Framework by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2017 formally heralded the evolution of the traditional risk management mindset, wherein risks are managed as a consequence of business operations, towards a more proactive stance for managing risks. Entitled “Enterprise Risk Management — Integrating with Strategy and Performance,” the updated Framework highlights the importance of considering risks even at the onset of strategy setting, as well as throughout the process of driving organizational performance.

Unlocking the BIR’s ‘Oplan Kandado’ program

As the main revenue-collecting agency, the Bureau of Internal Revenue (BIR) is tasked to collect a total of P2.039 trillion in tax revenue this year to fund the government’s “Build, Build, Build” program. It was able to surpass its first-quarter collection target by approximately 17%, collecting P422.587 billion above its target of P361.767 billion.

Manage software assets to manage cyber threats

Software licenses comprise a huge chunk of the annual IT costs of an organization. However, in most cases, they are also investments that are improperly managed and tracked. As a consequence, a majority of organizations fails to realize the optimum benefits from these software licenses. In fact, due to their intangible nature, software licenses are often neglected or utilized only for their basic purpose.

Package 2 is under way!

“Get the tracks ready. I’m on my way.” -- Package 2

Regulatory implications of Boracay closure

By virtue of Proclamation 475, the Boracay barangays Balabag, Manoc-Manoc and Yapak in the Municipality of Malay, Aklan were placed under a State of...

Realizing operational excellence

Often times when we meet business leaders, our discussions end up on the topic of how to improve their business operations. They quickly want to know how digitization, robotic process automation (RPA), the Internet of Things (IoT) or business process reengineering (BPR) could transform their business to become more customer-focused, efficient and effective. While these innovations could produce great gains in any organization, they represent only one side of the coin. The flip side is that employee behaviors play a substantial role in an organization’s productivity and effectiveness. It is rather unfortunate that 90% of leaders fail to recognize this.

Cue the new 1701Q

The past few months have seen a myriad of changes in politics, economics, finance and taxation. While some perceive these changes to be progressive...

Upward and forward… the cloud way

The Philippine business ecosystem today is at an interesting crossroads. What makes the “Philippine story” unique is the presence of numerous mid- to large-sized...

Why not make FQ like EQ?

With the passage of the Tax Reform for Acceleration and Inclusion (TRAIN) law, tax forms have been revised and new tax forms have been...

Technology and tax

We live in a time of automation, paperless transactions, online shopping and online booking services, and there are no signs the development of such...

Closing smarter — not harder

I transferred recently from PwC US to PwC Philippines in October 2017. Since then, I have gotten to know many talented and highly skilled...

Global guide for fighting tax crimes

One of the key indicators of how progressive a tax system is in any jurisdiction is its ability to address and prosecute tax crimes....

A whistle-blower’s dilemma

What could happen to an organization if a trusted person is in fact the thief himself -- a wolf in sheep’s clothing? To conceal...