Special InTAX: April 2020 Issue 1 | Volume 4

Department of Finance

 

The Department of Finance (DOF) issued Revenue Regulations (RR) No. 09-2020, dated 06 April 2020, implementing the provisions of Section 4(z) and Section 4(ee) of Republic Act (RA) No. 11469, otherwise known as the “Bayanihan to Heal as One Act”.

The RR provides full deductibility against the gross income of the donor-Corporation/donor-individual for the following donations/gifts, when given for the sole and exclusive purpose of combatting COVID 19 during the period of the state of national emergency under RA No. 11469:

a. Cash donations
b. Donations of all critical or needed healthcare equipment or supplies
c. Relief goods such as, but not limited to, food packs (rice, canned goods, noodles, etc.) and water
d. Use of property, whether real or personal (shuttle service, use of lots/buildings)

To be entitled to full deductibility, the donations shall be made to any of the following donees:

1. National Government or any entity created by any of its agencies (including public hospitals) which is not conducted for profit, or to any political subdivision of the said Government, including fully-owned government corporations
2. Accredited non-stock, non-profit educational and/or charitable, religious, cultural or social welfare corporation, institution, foundation, non-government organization, trust or philanthropic organization and/or research institution or organization

While the requirement of submission of a Notice of Donation is dispensed with, the exempt donation/gifts are required to be supported by documents enumerated in the RR.

Likewise, donations of the above enumerated items are also exempt when given to the following donees:

1.    Private hospitals and/or non-stock non-profit educational and/or charitable, religious, cultural or social welfare corporation, institution, foundation, non-government organization (even if non-accredited), trust or philanthropic organization and/or research institution or organization

2.    Local private corporations, civic organizations, and/or international organizations/institutions, provided that they shall (1) actually, directly and exclusively distribute and/or transfer said donations/gifts, and/or (2) partner as a conduit/logistical machinery with the accredited NGOs and/or national government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government 

All donations/gifts made to the above mentioned donees shall likewise be fully deductible against the gross income of the donor-Corporation and/or donor-individual. The said exemption from donor’s tax and full deductibility against the gross income is subject to the timely submission of documentation requirements enumerated in the RR within 60 days from the lifting of the Enhanced Community Quarantine (ECQ).

Donations of all critical or needed healthcare equipment or supplies and relief goods shall not be treated as a transaction deemed sale subject to VAT. Any input VAT attributable to such purchase of goods shall be creditable against any other output tax.

Rules on donation and deductibility as provided in the Tax Code and other RRs shall apply suppletorily.

The RR shall take effect starting on 16 March 2020 and shall be in full force only during the three-month effectivity of RA No. 11469, unless extended or withdrawn.

RGM & Co. Note:  The RR was published in Manila Bulletin ­­­­­­­­on ­­­08 April 2020.

 

Bureau of Internal Revenue

 

The Bureau of Internal Revenue issued the following:

Revenue Memorandum Circular (RMC) No. 38-2020, 08 April 2020, extends the deadline of the availment of tax amnesty on delinquencies under RR no. 4-2019, as amended by RR no. 5-2020 in relation to RMC No. 33-2020 from 23 May 2020 to 08 June 2020.

RMC No. 39-2020, 08 April 2020, extends the due dates further for the submission and/or filing of certain documents and/or returns as well as payment of certain taxes under RR No. 07-2020. With the extension of ECQ to 30 April 2020, the extended due dates enumerated in Section 2 of RR No. 07-2020 are further extended for a period of 15 calendar days, except those where the extended due dates granted are reckoned from the lifting of the state of emergency (ECQ).

The filing and submission of BIR Form 2551Q (Quarterly Percentage Tax Return), which was originally due on 25 April 2020, is extended to 25 May 2020.

 

Attached are the full texts of the issuances.

RMC_2020-38_ExtensionforFIlingTaxAmnestyonDelinquencies

RMC_2020-39_FurtherExtensionofDeadlines

RR_2020-09_Full DeductibilityofExemptDonations

 

_{The materials contained in InTAX were compiled by R.G. Manabat & Co. from various sources. The subjects are discussed in brief/general terms and are intended to provide an overview of the recent and relevant developments relating to Philippine tax laws and various government regulations. This information is for guidance only and should not be regarded as a substitute for appropriate professional advice.}

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