Department of Finance
The Department of Finance (DOF) issued the following:
Revenue Regulations (RR) No. 28-2020, 15 October 2020, to implement tax exemption on the manufacture or importation of certain equipment, supplies or goods, starting from the expiration of Republic Act (RA) No. 11469 otherwise known as the “Bayanihan to Heal as One Act” until the effectivity end date of RA No. 11494, otherwise known as the “Bayanihan to Recover as One Act” (BRAO), on 25 June 2020 until 19 December 2020.
The tax implications of the following transactions shall be as follows:
|Transactions||Tax Treatment||Documentary Requirements|
|Importation of goods identified as critical products, essential goods, equipment or supplies from 25 June 2020 to 19 December 2020||
Exempt from VAT, excise tax and other fees
Not subject to the issuance of Authority to Release Imported Goods (ATRIG) under Revenue Memorandum Order No. 35-2002, as amended, and may be released by the Bureau of Customs (BOC) without the need of ATRIG
The Bureau of Internal Revenue (BIR) may conduct a post-investigation/audit on the importations released by the BOC without ATRIG.
|Certification from the Department of Trade and Industry (DTI) that the equipment and supplies are not locally available or of insufficient quality or preference|
|Donation of imported articles to or for use of the National Government or to any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the Government||Exempt from donor’s tax and subject to the ordinary rules of deductibility under existing rules and regulations|
|Locally sourced or imported inputs, raw materials and equipment necessary for the manufacture of essential goods of medical grade, as determined by the Food and Drug Administration-Department of Health (FDA-DOH)||Exempt from VAT||
Certified True Copy of License to Operate issued by FDA-DOH, authorizing the manufacture of essential goods of medical grade related to the containment and mitigation of COVID-19; and
Sworn Declaration from the manufacturer-buyer that the item shall be used for the manufacture of essential goods of medical grade related to the containment and mitigation of COVID-19
Any VAT that may have been paid from 25 June 2020 to 14 September 2020 shall be refunded pursuant to Section 204(C) of the Tax Code, as amended.
This Regulation shall take effect immediately and shall be in full force and effect until 19 December 2020.
RR No. 29-2020, 15 October 2020, to implement tax exemption on certain income payments to health workers, officials and employees of public and private sectors pursuant to the effectivity of BRAO.
The following income payments shall be excluded from gross income and exempt from income tax.
- Retirement Benefits received by officials and employees of private firms from 5 June 2020 to 31 December 2020, provided that the amount received is in accordance with a retirement plan duly registered with the BIR. Any re-employment of the official or employee in the same firm and its related parties, as discussed under Section 4 of RR 19-2020, within the succeeding 12-month period shall be considered as proof of non-retirement.
- COVID-19 Special Risk Allowance given to public and private health workers under the definition and conditions set forth in Section 2(A) of RR No. 29-2020.
- Actual Hazard Duty Pay given to Human Resources for Health (HRH) under the definitions and conditions set forth in Section 2(B) and (D) of RR No. 29-2020.
- Compensation paid to private and public health workers who contracted COVID-19 in the line of duty or died while fighting COVID-19. The amount is given or will be given from 1 February 2020 and during a state of national emergency due to COVID-19, as declared by the President. Further, the compensation shall be given to the beneficiaries not later than three (3) months after the date of confinement or death and the required supporting documents are submitted. In case of death, the said amount shall not also be included as part of the gross estate of the decedent subject to estate tax.
The abovementioned income payments shall be included in the Alphabetical List of Employees/Payees which is submitted annually. In addition, a one-time list of recipients shall be provided not later than 15 January 2021 to the Revenue District Office (RDO) /concerned Office under the Large Taxpayers Service (LTS) having jurisdiction over the employer/implementing government agency.
Any taxes withheld from the above payments shall be refunded to the concerned health workers, officials and employees.
The RR shall be effective immediately and shall be in full force and effect until 19 December 2020.
(RGM&Co. Note: The RRs were published in Philippine Star on 17 October 2020.)
Bureau of Internal Revenue
The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 112-2020, 14 October 2020, to clarify the suspension of enlisting/delisting of Large Taxpayers to 1 January 2021, to wit:
- All transactions of affected taxpayers, both Head Office/s and all branches, shall be handled by the RDOs or concerned offices at the LTS where they are registered prior 1 July 2020;
- All Certificates of Registration issued by the concerned offices at the LTS/RDOs on or after 1 July 2020 to the affected Large Taxpayers shall be valid and may be posted at the principal place of business; and
- Principal and supplementary receipts/invoices printed based on the duly approved Authority to Print (ATP) issued on or after 1 July 2020 shall remain valid.
The BIR issued an Advisory to inform large taxpayers on the availability of eAppointment for purposes of scheduling an online/virtual meeting with revenue officials/personnel under the LTS (LT Audit Divisions and LT Field Operations Division).
Attached are the full texts of the issuances.