Jun 112017
 

On Nov. 15, 2016, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 127-2016, which lifted the suspension of revenue issuances previously suspended under RMC No. 69-2016. One of these issuances is RMC No. 62-2016 (Circular), dated June 13, 2016, which clarifies the proper tax treatment of “passed-on” Gross Receipts Tax (GRT).
GRT is a form of percentage tax, which is defined as a business tax imposed on persons or on entities that sell or lease goods or services in the course of trade or business in the Philippines.

Jan 182017
 

One may chuckle at the fact that the word “interest” is used 135 times in different parts of the Tax Code but is never defined. “Interest” as used in the Tax Code refers to: • Income earned from “deposits,” “deposit substitutes,” “trust funds” and other similar arrangements • Income generated from loans, bonds, notes, and other forms of borrowings • The additional imposition whenever a taxpayer belatedly pays a tax • Revenue received from lending activities by bank, non-bank financial intermediaries and finance companies which is subject to the gross receipts tax (GRT) of 1% to 5% depending on the remaining maturity of the underlying debt instrument, and which is subject to readjustment of tax rates under certain conditions.