InTAX: August 2020 Issue 2 | Volume 1

InTAX is an official publication of R.G. Manabat & Co.'s Tax Group

InTAX is an official publication of R.G. Manabat & Co.'s Tax Group

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Bureau of Internal Revenue

 

The Bureau of Internal Revenue (BIR) issued the following:

Revenue Memorandum Order (RMO) No. 21-2020, 10 July 2020, to revise and update the prescribed the policies, guidelines and procedures for the inspection or supervision of the destruction/disposal of the inventories, machineries or equipment applied for destruction  or disposal under the Large Taxpayers (LT) Office or Revenue District Office (RDO), where the taxpayer is registered.

The RMO also aims to facilitate the processing of applications for inventory destruction/disposal and to set out policies and guidelines in relation to the determination of deductible expense pertaining to inventory of goods/assets which have been declared as waste or obsolete due to spoilage, deterioration, obsolescence, expiration, or other causes rendering the same unfit for sale or for use in production.

Further, the RMO has annexed the necessary documents and/or forms to be used by the taxpayer applying for inventory destruction/disposal and the certificates to be issued by the BIR, to wit:

 

Annex

Description

Annex A

Application for Inventory / Asset Destruction / Disposal

Annex B

Authorization to Witness the Conduct of Destruction/Disposal

Annex C

Certificate of Deductibility of Goods/Assets Destructed/Disposed

Annex C-1

Certificate of Deductibility of Goods/Assets Destructed/Disposed (Inventory Valuation Other than Actual Cost)

Annex D

Sworn Declaration of Goods/Assets as Waste or Obsolete

Annex E

List of Goods/Assets for Destruction/Disposal

Annex E-1

List of Machineries / Equipment for Destruction/Disposal

Other Document

Sworn Declaration of Asset Disposal

 

Finally, the RMO provides for the specific procedures and timeline to follow for both the taxpayer and the appropriate LT Office/RDO.

Revenue Memorandum Circular (RMC) No. 67-2020, 02 July 2020, to circularize Republic Act (RA) No. 11439, entitled ”An Act Providing for the Regulation and Organization of Islamic Banks”.

Salient points of RA No. 11439, as annexed to RMC No. 67-2020, are as follows:

  • Islamic banking business, as defined under R.A. No. 11439, refers to a banking business with objectives and operations that do not involve interest (riba) as prohibited by the Shari’ah and which conducts its business in accordance with Shari’ah principles.
  • Shari’ah refers to the practical divine law deduced from its legitimate resources: the Qur’an, Sunnah, consensus of Muslim scholars, analogical deduction and other approved sources of Islamic law.
  • The law mandates the Bangko Sentral ng Pilipinas (BSP) to exercise regulatory powers and supervision over the operations of Islamic banks, and to issue the implementing rules and regulations on Islamic banking.
  • The said law codifies the rule that the government shall endeavor to achieve neutral tax treatment between Islamic banking transactions and equivalent conventional banking transactions within the provisions of the National Internal Revenue Code of 1997, as amended.

RMC No. 66-2020, 02 July 2020, to circularize RA No. 11364, entitled ”An Act Reorganizing and Strengthening the Cooperative Development Authority, Repealing for the Purpose RA No. 6939, Creating the Cooperative Development Authority”.

Salient points of RA No. 11364, as annexed to RMC No. 66-2020, are as follows: 

  • Under Section 14 of RA No. 11364, the Cooperative Development Authority (CDA) shall furnish the BIR, Local Government Units (LGUs), and other concerned agencies a certified list of duly registered cooperatives for purposes of processing tax exemptions; and
  • Any public official or employee who violates or circumvents the rules laid down in Section 14 of RA No. 11364 shall be dealt with in accordance with Article 140 of Philippine Cooperative Code of 2008.

 

Attached are the full texts of the issuances.

RMC No. 66-2020

RMC No. 67-2020

RMO No. 21-2020

RMO No. 21-2020 Annex A

RMO No. 21-2020 Annex B

RMO No. 21-2020 Annex C

RMO No. 21-2020 Annex C-1

RMO No. 21-2020 Annex D

RMO No. 21-2020 Annex E

RMO No. 21-2020 Annex E-1

RMO No. 21-2020 Sworn Declaration of Asset Disposal

 

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