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QUALITY ASSURANCE BULLETIN I July 2019 Edition 1
QUALITY ASSURANCE BULLETIN I July 2019 Edition 2
RECENT SECURITIES AND EXCHANGE COMMISSION ISSUANCES
RECENT BUREAU OF INTERNAL REVENUE ISSUANCES
Revenue Memorandum Order No. 35-2019: Amends pertinent provisions of Section 2 under
RR No. 11-2018 specifically on the requirements for top withholding agents.
Revenue Memorandum Order No. 37-2019: Amends the policies, guidelines and procedures
on the registration of employees earning purely compensation income, transfer of registration of
employees, update of registration of information and issuance of TIN card
Revenue Memorandum Order No. 38-2019: Clarifies the Tax Exemption of Non-Stock, Non-
Profit Corporations under Section 30 of the National Internal Revenue Code of 1997, as
Amended
Revenue Memorandum Circular No. 68-2019: Provides clarification on certain issues rela-
tive to the Estate Tax Amnesty under RA No. 11213 (Tax Amnesty Act)
Revenue Memorandum Circular No. 73-2019: Announces the availability of various re-
vised BIR Forms (January 2018 ENCS)
Revenue Memorandum Circular No. 74-2019: Circularizes the enhanced BIR Form Nos.
2306 and 2307 (January 2018 ENCS)
Revenue Memorandum Circular No. 75-2019: Circularizes the availability of the revised
BIR Form No. 1914 [Application for Tax Credits/Refunds] April 2019 (ENCS)
Revenue Memorandum Circular No. 76-2019: Circularizes the availability of the new BIR
Form No. 0620 (Monthly Remittance of Taxes Withheld on the Amount Withdrawn from the Dece-
dent's Deposit Account) and BIR Form No 1621 (Quarterly Remittance of Taxes Withheld on the
Amount Withdrawn from the Decedent's Deposit Account)
SEC Memorandum Circular No. 14; Series of 2019: Rules and Regulations governing Crowdfunding (CF)
SEC Memorandum Circular No. 16; Series of 2019: Guidelines on the Number and Quali-fications of Incorporators Under the Revised Corporation Code
Notices:
- Guidelines On The Adoption Of Centralized (One-Stop-Shop) Framework For Accredita-tion/ Selection Of External Auditor
- New Mandatory Disclosure Form
QUALITY ASSURANCE BULLETIN I July 2019 Edition 3
REVENUE MEMORANDUM ORDER
NO. 35-2019
Revises certain policies in the enforcement of civil
remedies for the collection of Accounts Receivable/
Delinquent Accounts (AR/DAs)
To protect the interest of the government,
civil remedies provided under Section 205 of the
National Internal Revenue Code (NIRC), as
amended, shall immediately be pursued as soon
as the “Form 40-Collectible” reports relative to the
List of Unpaid Revenues and List of Unpaid Tax
Assessments have been received by the
offices responsible in the enforcement of
collection remedies.
With the foregoing, Preliminary
Collection Letter (PCL) and Final Notice Before
Seizure (FNBS) shall no longer be sent to the
delinquent taxpayers. Once the aforesaid
reports as well the dockets of the cases are
received by the concerned office for collection
enforcement, it shall validate if all the
applicable fields in the said "Form 40-
Collectible” reports are completely filled-out. If
so, the Warrant of Distraint and/or Levy (WDL)
shall immediately be issued using the current
format. All other collection procedures to
implement the WDL and other collection remedies,
as written in the Collection Manual, which are still
relevant shall continuously be adopted.
REVENUE MEMORANDUM ORDER
NO. 37-2019
Amends the policies, guidelines and procedures on the
registration of employees earning purely compensation
income, transfer of registration of employees, update of
registration of information and issuance of TIN card
New employees without TIN shall be
registered at the Revenue District Office (RDO)
having jurisdiction over the place of business
where the employer’s Head Office or Branch is
physically located. They shall accomplish BIR Form
No. 1902 (Application for Registration for
Individuals Earning Purely Compensation Income)
and submit the same to their employer who shall
secure the TIN of its new employees using the
eRegistration (eREG) System within ten (10) days
from the date of employment. The employer shall
register its new employees with the BIR as follows:
New Employees without TIN
Employer shall secure
TIN of its employees
Manual Application
When eREG is unavailable or cannot be
registered using the eREG
Who shall visit the RDO
Employees of Non-LT
*Employees of TAMP Corporations/ Individuals
*Employees of Employers us-ing eFPS
*Employees of Non- TAMP taxpayers
*Thru eREG
*Thru eREG
*RDO or thru
eREG
Submit application to the RDO of the employer
The employer
Employees of LT
Thru eREG Submit application to the local (regular) RDO of the LT- Employer
The employer
QUALITY ASSURANCE BULLETIN I July 2019 Edition 4
An employee earning purely compensation
income who will change or will have a new
employer or will transfer from Head Office to
another branch office (or vice versa) of the same
employer or company shall have his/her TIN/
registration records be transferred to the RDO
having jurisdiction over the place of his/her
residence and not to the RDO of his/her new
employer. The said employee shall submit the duly
accomplished and signed BIR Form No. 1905 to
the old/previous RDO where the employee is
registered who shall execute the transfer of
registration of employee within twenty-four (24)
hours from receipt of BIR Form No. 1905. In case
the employee’s location is relatively far from and/or
unable to visit the old/previous RDO for the
submission of application of transfer of registration,
a faxed/email copy of BIR Form 1905, with
signature and valid government issued
Identification Card, may be accepted by the old/
previous RDO to effect such request for transfer.
In case the employer (Head Office or
Branch) is transferring to a new different RDO, the
following policies are prescribed:
i. Employees (active/currently employed) earning
purely compensation income, whose registration
record are the same with the RDO of their
employer, shall be automatically carried by the
said transferring-employer to its new RDO, except
those employees whose residence address and
employer’s old business address are both under
the jurisdiction of the same old RDO of the
transferring-employer.
Ii. The transferring-employer shall require the said
employees mentioned above who are earning
purely compensation income to accomplish BIR
Form No. 1905 (Update Form), and facilitate the
mass transfer of employees’ registration by
submitting the Update Forms and list of said
employees to the old RDO, together with the
request for transfer of registration (Update Form)
of the said employers, excluding those employees
who have been separated prior to the transfer.
Application for any change in the
registration information (BIR Form No. 1905) of an
employee shall be submitted by the employee to
the RDO where the employee’s TIN is registered.
Application for TIN card issuance shall be
made by the registered employees at their
respective RDO or local (regular) RDO where the
taxpayer is registered. No application for TIN card
shall be submitted to the LTAD/ELTRD/LTD-Cebu/
LTD–Davao. Initial request for TIN Card issuance
is free. Subsequent request for issuance due to
lost/damaged TIN Card shall be charged P100.00.
The RDO can implement the acceptance of
TIN Card application cut-off period until 1:00 PM
(pursuant to Revenue Regulations No. 7-2012) in
order to control the voluminous application for TIN
Card.
Only the employee himself/herself shall
request and receive the TIN ID card by presenting
at least one valid government-issued ID upon
application and release of TIN ID card. In cases
where the taxpayer is not available to receive the
TIN Card, a Special Power of Attorney shall be
submitted by the authorized representative to the
RDO that will issue such TIN card, subject to the
approval of the concerned Revenue District Officer.
Employers who are required to use the
eREG System but instructed its new employees to
visit the RDOs with photocopied alleged eREG
System message presented shall be imposed a
penalty of ₱1,000.00 per employee. A penalty of
₱1,000.00 for every instance but not to exceed
₱25,000.00 shall be imposed on eREG System
users who supplied erroneous/invalid information.
The registration record of existing
employees who are registered with the RDO or
local RDO of its employer shall be maintained and
shall not be required to transfer its registration to
the RDO having jurisdiction over the place of their
residence, unless the employee will be transferring
to a new employer located in a jurisdiction covered
by a different RDO.
Received and pending applications for
registration of employees submitted to the RDO,
LTAD/ELTRD/LTD-Cebu/LTD-Davao, including
those forwarded to the National Office - Data
Center pursuant to RMO No. 20-2015 prior to the
effectivity of the Order, shall still be processed by
the concerned offices.
Continuation...
QUALITY ASSURANCE BULLETIN I July 2019 Edition 5
REVENUE MEMORANDUM ORDER
NO. 38-2019
Clarifies the Tax Exemption of Non-Stock, Non-Profit
Corporations under Section 30 of the National Internal
Revenue Code of 1997, as Amended
The said organizations and corporations are
the following:
A. Labor, agricultural or horticultural organization
not organized principally for profit;
B. Mutual savings bank not having a capital stock
represented by shares, and cooperative bank
without capital stock organized and operated for
mutual purposes and without profit;
C. A beneficiary society, order or association,
operating for the exclusive benefit of the
members, such as a fraternal organization
operating under the lodge system, or mutual aid
association or a non-stock corporation
organized by employees providing for the
payment of life, sickness, accident, or other
benefits exclusively to the members of such
society, order, or association, or non-stock
corporation or their dependents;
D. Company-owned cemetery, which is operated
exclusively for the benefit of its members;
E. Non-stock corporation or association organized
and operated exclusively for religious,
charitable, scientific, athletic, or cultural
purposes, or for the rehabilitation of veterans,
no part of its net income or asset belongs to or
inures to the benefit of any member, organizer,
officer or any specific person;
F. Business league, chamber of commerce, or
board of trade, not organized for profit and no
part of the net income of which inures to the
benefit of any private stock- holder or individual;
G. Civic league or organization not organized for
profit but operated exclusively for the promotion
of social welfare;
H. A non-stock and non-profit educational
institution;
I. Government educational institution;
J. Farmers' or other mutual typhoon or fire
insurance company, mutual ditch or irrigation
company, mutual or cooperative telephone
company, or like organization of a purely local
character, the income of which consists solely
of assessments, dues and fees collected from
members for the sole purpose of meeting its
expenses; and
K. Farmers', fruit growers', or like association
organized and operated as a sales agent for
the purpose of marketing the products of its
members and turning back to them the
proceeds of sales, less the necessary selling
expenses on the basis of the quantity of
produce finished by them.
A corporation claiming tax exemption must
be able to show clearly that it is organized and
operated for the purposes under Section 30 of the
NIRC, and that its income is derived pursuant
thereto. The following shall be the basis in
determining the entitlement to exemption of an
organization:
i. Organizational Test: This requires that the
corporation or association's constitutive
documents (SEC Registration, Articles of
Incorporation and By-Laws) must show that its
primary purpose/s of incorporation fall under
Section 30 of the NIRC.
ii. Operational Test: This requires that the regular
activities of the corporation or association be
exclusively devoted to the accomplishment of
the purposes specified in Section 30 of the
NIRC. A corporation or association fails to meet
this test if the corporation has no activities
conducted in furtherance of the purpose for
which it was organized, or if a substantial part
of its operations constitutes "activities
conducted for profit".
QUALITY ASSURANCE BULLETIN I July 2019 Edition 6
In order for an entity to qualify as a
non-profit corporation exempt from Income Tax, it
must demonstrate that its earnings or assets do
not inure to the benefit of any of its trustees,
organizers, officers, members or any specific
person. It must not be organized or operated for
the benefit of private interests such as specific
individuals, incorporators or his family,
shareholders of the organization, or persons
controlled directly or indirectly by such private
interests. The activities that are considered
"inurements" of such nature are the following:
i. The payment of compensation, salaries, or
honorarium to its trustees or organizers;
ii. The payment of exorbitant or unreasonable
compensation to its employees;
iii. The provision of welfare aid and financial
assistance to its members. An organization is
not exempt from Income Tax if its principal
activity is to receive and manage funds
associated with savings or investment
programs, including pension or retirement
programs. This does not cover a society, order,
association, or non- stock corporation under
Section 30(C) of the NIRC providing for the
payment of life, sickness, accident and other
benefits exclusively to its members or their
dependents;
iv. Donation to any person or entity (except
donations made to other entities formed for the
purpose/purposes similar to its own);
v. The purchase of goods or services for amounts
in excess of the fair market value of such goods
or value of such services from an entity in which
one or more of its trustees, officers or fiduciaries
have an interest; and
vi. When upon dissolution and satisfaction of all
liabilities, its remaining assets are distributed to
its trustees, organizers, officers or members. Its
assets must be dedicated to its exempt
purpose. Accordingly, its constitutive documents
must expressly provide that in the event of
dissolution, its assets shall be distributed to one
or more entities formed for the purpose/
purposes similar to its own, or to the Philippine
government for public purpose.
The Income Tax exemption of
organizations and corporations under Section 30 of
the NIRC of 1997, as amended, covers only the
income derived by the corporation in furtherance of
the purposes for which it was organized. Said
corporations are still subject to the corresponding
internal revenue taxes imposed on income derived
from any of their properties, real or personal, or any
activity conducted for profit regardless of the
disposition thereof (i.e. interest income from bank
deposits, gains from investments, rental income
from real or personal properties), which income
should be reported for taxation purposes.
The interest income from currency bank
deposits and yield or any other monetary benefit
from deposit substitute instruments and from trust
funds and similar arrangement, and royalties
derived from sources within the Philippines or
organizations under Section 30 are subject to 20%
Final Withholding Tax. Moreover, the interest
income derived by them from a depository bank
under the expanded foreign currency deposit
system shall be subject to 15% Final Withholding
Tax pursuant to Section 27(D)(1) in relation to
Section 57(A), both of the NIRC of 1997, as
amended.
The tax exemption granted under Section
30 of the NIRC of 1997 does not cover Withholding
Taxes on compensation income of the employees
of the corporation, or the Withholding Tax on
income payments to persons subject to tax
pursuant to Section 57 of the NIRC of 1997. The
corporation or association is therefore constituted
as a withholding agent for the government if it acts
as an employer and any of its employees receives
compensation income subject to Withholding Tax
or if it makes income payments to individuals or
corporations subject to the Withholding Tax.
Purchase of goods or properties or services
and importation of goods by a corporation
organized and operated as a Section 30
corporation shall be subject to the 12%
Value-Added Tax (VAT). The VAT, being an
indirect tax, can be shifted or passed on the buyer/
purchaser, transferee or lessee of the goods,
properties or services. Once shifted to the buyer/
customer as an addition to the cost of goods or
services sold, it is no longer a tax but an additional
cost which the buyer/customer has to pay in order
to obtain the goods or services.
QUALITY ASSURANCE BULLETIN I July 2019 Edition 7
Thus, the shifting of the VAT to it does not make it
the person directly liable and therefore, it cannot
invoke its tax exemption privilege under Section 30
of the NIRC of 1997 to avoid the passing on or
shifting of the VAT.
Section 105 of the NIRC of 1997 provides
that any person who, in the course of trade or
business, sells, barters, exchanges, leases goods
or properties, renders services, and any person who
imports goods shall be subject to the VAT imposed
under Sections 106 to 108 of the same code.
The phrase “in the course of trade or
business” means the regular conduct or pursuit of a
commercial or an economic activity, including
transactions incidental thereto, by any person
regardless of whether or not the person engaged
therein is a non-stock, non-profit private
organization (irrespective of the disposition of its net
income and whether or not it sells its good
exclusively to members or its guests), or
government entity.
Hence, if the corporation is engaged in the
sale of goods or services in the course of a
business pursuit, including transactions incidental
thereto, its revenues derived therefrom shall be
subject to the 12% VAT, in case the gross receipts
from such sales exceed Three Million Pesos
(₱3,000,000.00), or to the 3% Percentage Tax, if
gross receipts do not exceed ₱3,000,000.00.
The guidelines in the processing and
issuance of Certificate of Tax Exemptions (CTE),
which have been devolved to the Revenue
Regions, are prescribed in the Order. A CTE issued
under this Order shall be valid for a period of three
(3) years from the date of effectivity specified in the
Ruling, unless sooner revoked or cancelled. The
CTE may be revalidated for another period of three
(3) years under the same procedure set forth
herein.
The Tax Exemption Ruling shall be deemed
revoked if there are material changes in the
character, purpose, or method of operation of the
corporation or association which are inconsistent
with the basis for its income tax exemption. The
revocation takes effect as of the date of the material
change.
All Regional Directors are required to
submit on or before the 20th day of the month
following the end of each quarter a Quarterly
Summary Report of all CTEs issued to Section 30
corporations, together with copies of said CTEs, to
the Assistant Commissioner, Legal Service, for a
centralized database of issued CTEs.
All applications for CTEs under Section 30
of the NIRC, as amended, filed with the Law and
Legislative Division after the effectivity of this Order
shall be transmitted to the concerned Revenue
District Office, for their appropriate processing.
REVENUE MEMORANDUM CIRCULAR
NO. 68-2019
Provides clarification on certain issues relative to
the Estate Tax Amnesty under RA No. 11213 (Tax
Amnesty Act)
The estate of the decedent who died on or
before December 31, 2017, who is not covered by
the exceptions enumerated under Section 3 of
Revenue Regulations (RR) No. 6-2019, is
qualified to avail of tax amnesty.
The executor or administrator, legal heirs,
transferees or beneficiaries (or filer) shall file the
Estate Tax Amnesty Return (ETAR) with the
Revenue District Office (RDO) having jurisdiction
over the last residence of the decedent within two
(2) years from the effectivity of RR No. 6-2019 or
from June 15, 2019 to June 14, 2021. In case the
estate has a previously issued Taxpayer
Identification Number (TIN), the ETAR shall be
filed with the RDO which issued the said TIN.
QUALITY ASSURANCE BULLETIN I July 2019 Edition 8
A rate of six percent (6%) based on the
decedent’s total net taxable estate at the time of
death shall be imposed at every stage of
succession. The same rate shall be imposed on
the value of the undeclared properties at the time
of death, without deductions which are deemed to
have been claimed in the previous Estate Tax
Return filed, except for the share of the surviving
spouse on the undeclared conjugal property with a
minimum amount for the payment of Estate Tax
Amnesty of Five Thousand Pesos (P 5,000.00) per
decedent.
In case the decedent died at the time when
there were estate and inheritance taxes imposed,
the estate and inheritance taxes shall not be
computed. The Estate Amnesty Tax rate of six
percent (6%) shall cover both the unpaid estate
and inheritance taxes, and shall be computed
based on the net taxable estate. In computing the
net taxable estate, the deductions to be applied in
the Estate Tax Amnesty shall be based on the
Estate Tax law prevailing at the time of death.
Payment of the Estate Amnesty Tax shall
be made to any Authorized Agent Bank (AAB)
under the jurisdiction of the concerned RDO.
However, payment may be made to the Revenue
Collection Officer (RCO) under the following
instances:
A. In case of cash payment and the amount
involved is Twenty Thousand Pesos
(P20,000.00) and below; and
B. If the payment is thru manager’s/cashier’s
check, irrespective of amount.
If there is no AAB in the RDO, payment
shall be made to the RCO subject to the conditions
in “a” and “b” above.
For purposes of Estate Tax Amnesty,
instalment payment is not allowed. Partial of total
withdrawal of cash in bank for payment of Estate
Tax Amnesty may be allowed by the BIR upon
written request of the taxpayer, without subjecting
to the final withholding tax. The form of payment to
be issued by the bank should be a manager’s/
cashier’s check.
The voluntary payment made under
Payment Form No. 0605, supposedly for Estate
Tax Amnesty, prior to the effectivity of RR No. 6-
2019, shall not be considered as valid payment for
the amnesty. The voluntary payment in this case
may be claimed for refund subject to existing rules
and regulations on refund.
Other clarifications made under the
Circular are the following:
a. A TIN shall be issued for the estate of the
decedent, if there is no existing TIN. All heirs,
including minors, without TIN are required to
secure their respective TIN.
b. In case the estate involves multiple decedent,
one (1) Extra Judicial Settlement (EJS) for
every stage of transfer/succession or one (1)
EJS covering all the stages of transfer/
succession with respect to the inherited share
of the common property/ies emanating from
the first decedent shall be submitted.
c. When no zonal valuation is available at the
time of death, the Fair Market Value (FMV)
appearing in the tax declaration issued at the
date of death or the succeeding available tax
declaration issued nearest to the date of death
shall be used as reference in computing the
value of the property at the time of death. If
there is no tax declaration available at the time
of death, the succeeding available tax
declaration issued nearest to the date of death
shall be used as reference.
d. For a real property covered by one (1) Title
involving multiple succession one (1) eCAR
only will be issued per real property, including
the improvements, if any, provided that the
ETARs are filed simultaneously at only one (1)
RDO. All the names of the decedents as
stated on the EJS or Judicial Settlement, as
the case may be, will be shown on the eCAR.
e. The filer shall not be required to submit
certificate of zonal valuation from the RDO
where the property is located. The verification
of zonal values can be made thru http://
www.bir.gov.ph/index.php/zonal-values.html.
QUALITY ASSURANCE BULLETIN I July 2019 Edition 9
f. In case there is no Death Certificate issued by
the Philippine Statistics Authority (PSA), the
Certificate of No Record of Death from PSA
and any valid secondary evidence including but
not limited to those issued by any government
agency/office sufficient to establish the fact of
death of the decedent may be submitted.
g. The holder/buyer in a deed of sale transaction
can avail of the Estate Tax Amnesty on behalf
of the heirs provided that holder/buyer shall
present the notarized EJS signed by all heirs
together with complete documentary
requirements.
h. A taxpayer who voluntary paid on August 15,
2018 the basic Estate Tax due of a decedent
who died on December 31, 2017 but failed to
pay the corresponding penalties can avail of
the Estate Tax Amnesty on the unpaid
penalties by paying the minimum Estate Tax
Amnesty amount of Five Thousand Pesos
(P5,000.00) and filing the required ETAR.
i. If there is an on-going expropriation case on
the property, the taxpayer can avail of the
Estate Tax Amnesty, if the expropriation
happened after the death of the decedent. In
such case, the expropriated property will form
part of the gross estate of the decedent.
However, if the expropriation happened during
the lifetime of the decedent, the expropriated
property will not form part of the gross estate of
the decedent.
j. The delinquent Estate Tax liability is not
covered by the RR on Estate Tax Amnesty. It
is covered by Section 3 of RR No. 4-2019 on
tax amnesty on delinquencies.
k. If there is an on-going investigation on Estate
Tax liabilities, the Estate Tax Amnesty can be
availed since there is no Estate Tax due that is
considered delinquent.
l. The taxpayer can avail of the Estate Tax
Amnesty on the Estate Tax deficiency resulting
from post review made by the Assessment
Division.
m. An estate involving judicial settlement/last will
of testament pending in court can avail the
Estate Tax Amnesty, provided that the filer
shall submit a certified true copy of the court
resolution or leave of court, together with all
the documentary requirements for Estate Tax
Amnesty within the two-year availment period.
However, only the CA shall be issued to the
filer. The eCAR shall be issued upon
presentation of the final order of the court.
n. An estate cannot avail of the tax amnesty if
the filer failed to submit the validated
Acceptance Payment Form (APF) with proof of
payment to the concerned RDO within the two
-year availment period of tax amnesty. Failure
to submit the validated APF with proof of
payment within the two-year period is
tantamount to non- availment of the Estate
Tax Amnesty. However, any payment made
may be applied against the total regular Estate
Tax due inclusive of penalties.
o. If the estate has an existing Estate Tax
delinquency, a filer can still avail of the Estate
Tax Amnesty for undeclared property provided
that the undeclared property is not included in
the list of properties covered in the existing
Estate Tax delinquency. Further, the ETAR
shall be filed in the RDO that issued the
assessment.
p. Estate involving judicial settlement/last will of
testament pending in court can avail the
Estate Tax amnesty provided that the filer
shall submit a certified true copy of the court
resolution or leave of court, together with all
the documentary requirements for Estate Tax
Amnesty, within the two-year availment period.
However, only the Certificate of Availment
(CA) shall be issued to the filer. The electronic
Certificate Authorizing Registration (eCAR)
shall be issued upon presentation of the final
order of the court.
Estate Tax Amnesty availment of
taxpayers with specific scenarios (such as those
with partial unpaid Estate Tax due, and those with
undeclared property in the previously filed ETAR)
are also contained in the Circular.
QUALITY ASSURANCE BULLETIN I July 2019 Edition 10
REVENUE MEMORANDUM CIRCULAR
NO. 73-2019
Announces the availability of various revised BIR Forms
(January 2018 ENCS)
This Circular is issued to prescribe and
inform withholding tax agents on the availability of
the revised BIR Forms BIR Forms which were
revised due to the implementation of the Tax
Reform for Acceleration and Inclusion (TRAIN) Law,
to wit:
The revised manual returns, however, are
not yet available in the Electronic Filing and
Payment System (eFPS) and Electronic Bureau of
Internal Revenue Forms (eBIRForms). Once said
returns are available in eFPS or already included in
the new Offline eBIRForms Package, a revenue
issuance shall be released to announce the
availability of the revised returns.
REVENUE MEMORANDUM CIRCULAR
NO. 74-2019
Circularizes the enhanced BIR Form Nos. 2306 and
2307 (January 2018 ENCS)
This Circular is issued to inform taxpayers
and others concerned other availability of the
enhanced BIR Forms to wit:
The abovementioned BIR Forms were
enhanced due to the implementation of the Tax
Reform for Acceleration and Inclusion (TRAIN)
Law.
REVENUE MEMORANDUM CIRCULAR
NO. 75-2019
Circularizes the availability of the revised BIR Form No.
1914 [Application for Tax Credits/Refunds] April 2019
(ENCS)
REVENUE MEMORANDUM CIRCULAR
NO. 76-2019
Circularizes the availability of the new BIR Form No.
0620 (Monthly Remittance of Taxes Withheld on the
Amount Withdrawn from the Decedent's Deposit
Account) and BIR Form No 1621 (Quarterly Remittance
of Taxes Withheld on the Amount Withdrawn from the
Decedent's Deposit Account)
Said Forms can be downloaded by banks
from the BIR Forms- Payment/Remittance Forms
section of the BIR website (www.bir.gov.ph).
Form No. Description
1604-C Annual Information Return of Income Taxes Withheld on Compensation
1604-E Annual Information Return of Creditable Income Taxes Withheld (Expanded)/Income Payments Exempt from Withholding Tax
1604-F Annual Information Return of Income
Payments Subjected to Final Withholding
Taxes
Form No. Description
2306 Certificate of Final Tax Withheld at Source
2307 Certificate of Creditable Tax Withheld at Source
QUALITY ASSURANCE BULLETIN I July 2019 Edition 11
The abovementioned Forms are not yet
available in pre-printed form as well as in the
Electronic Filing and Payment System (eFPS) and
Electronic Bureau of Internal Revenue Forms
(eBIRForms).
Banks that are availing the Philippine
Payment Settlement System (PhilpaSS) are
advised to manually file the said forms and remit the
corresponding tax until the issuance of a written
notice on their availability in the eFPS.
SEC MEMORANDUM CIRCULAR NO. 14
SERIES OF 2019
RULES AND REGULATIONS GOVERNING
CROWDFUNDING (CF)
In recognition of the recent financial
innovation of raising funds for a venture or
business using internet platforms, the Commission
formulated rules on crowdfunding in accordance
with the Securities Regulation Code (SCR) and
international practices and standards.
WHEREAS, it is the policy of the
Commission to encourage investments and active
public participation in the capital market, foster
good governance and ensure protection of
investors;
WHEREAS, the continuous advancement
of information and communication technology and
the globalization of financial markets facilitate
innovative financial environment, which includes
fund raiding through internet platforms such as
crowdfunding;
WHEREAS, Section 8 of the SRC provides
that securities shall not be sold or offered for sale
or distribution within Philippines, without a
registration statement duly filed with the and
approved by Commission;
WHEREAS, Section 10.2 of the SRC
provides that the Commission may exempt
securities transactions from registration
requirement if it finds that the registration is not
necessary in the public interest or for the
protection of the investors such as by reason of
small amount involved or the limited character of
the public offering;
WHEREAS, Section 32.2 (a) of the SRC
prohibits broker or dealer from making, creating or
operating, or enabling another to make, create or
operate, any trading market, otherwise than on a
registered Exchange, for the buying and selling of
any security, except in accordance with the rules
and regulations that the Commission prescribes;
WHEREAS, Section 37 of the SRC
promotes national economic development and
competitiveness in the market and directs the
Commission to promulgate rules for the
registration and licensing of innovative and other
trading markets for innovative securities,
securities of small, medium, growth and venture
enterprises and technology-based ventures;
WHEREAS, Section 72 of the SRC
authorizes the Commission to issue, amend and
rescind rules and regulations as may be
necessary or appropriate, including rules and
regulations defining accounting, technical, and
trade terms used in the SRC, and prescribe forms
in which information shall be set forth in
registration statements, applications, and
reports to the Commission. For this purpose,
the Commission may classify persons,
securities, and other matters within its
jurisdiction, prescribe different requirements for
different classes of persons, securities, or
matters, by rule or order, conditionally or
unconditionally exempt any person, security, or
transaction, or class of persons, securities or
transactions from any or all provisions of the SRC;
WHEREAS, it is essential to ensure that
crowdfunding shall operate in a manner that is
consistent with investor protection,
Continuation...
QUALITY ASSURANCE BULLETIN I July 2019 Edition 12
and in the interest of the public, market integrity
and transparency;
NOW THEREFORE, the Commission
hereby issues and promulgates the following
Rules Governing Crowdfunding and the
transactions and persons involved therein.
SEC MEMORANDUM CIRCULAR NO. 16
SERIES OF 2019
GUIDELINES ON THE NUMBER AND
QUALIFICATIONS OF INCORPORATORS UNDER THE
REVISED CORPORATION CODE
Two or more persons, but not more than
15, may organize themselves as a corporation.
This is opposed to the old corporation code, or
Batas Pambansa Blg. 68, which allowed a group of
not less than five but not more than 15 to form a
company.
Incorporators are defined as “those
stockholders or members mentioned in the Articles
of Incorporation as originally forming and
composing the corporation, and who are
signatories thereof.”
The SEC noted that only one-person
corporations (OPC) may have a single stockholder
and a sole director. Such entities must comply with
separate guidelines for OPCs.
“The guidelines were released for
uniformity of interpretation of the Revised
Corporation Code,” Armando A. Pan, SEC
officer-in-charge for the Office of the Commission
Secretary said in a text message when asked for
an explanation.
Section 3 of the circular outlines the
qualifications of incorporators, stating that each
incorporator of a stock corporation “must own, or
be a subscriber to, at least one share of the
capital stock.”
Meanwhile, each incorporator of a
nonstock corporation must be a member of the
corporation.
Incorporators must also be natural
persons of legal age, and must be a signatory to
the articles of incorporation or bylaws.
Partnerships that would like to register as
incorporators are required to submit a partners’
affidavit signed by all partners. This should
indicate that they have authorized the
partnership to invest in the corporation about to
be formed.
Domestic corporations or associations
are allowed to become incorporators, as long as
they have been approved by a majority of the
board of directors or trustees, and ratified by
stockholders representing at least two-thirds of
the outstanding capital stock.
For foreign corporations, a copy of a
document such as a board resolution, director’s
certificate, secretary’s certificate, or its
equivalent, must be authenticated by a
Philippine Consulate. This will give the foreign
entity authority to invest in the corporation being
formed.
Section 7 covers requirements for
signatories of a corporation’s articles of
incorporation.
The corporation must also specify the
taxpayer identification number (TIN) of its princi-
pal.
“No application for incorporation shall be
accepted unless the registration documents
reflect the TIN or passport number of all its
foreign investors other than foreign corporations
which have not yet been issued a TIN,”
according to the rules.
Continuation...
QUALITY ASSURANCE BULLETIN I July 2019 Edition 13
All foreign investors must secure a TIN
upon incorporation, which should be included in
all documents filed with the SEC thereafter.
Documents with no TIN from foreign investors
will not be accepted.
In addition, banks, banking and
quasi-banking institutions, preneed, insurance
and trust companies, non-stock savings and loan
associations, pawnshops, and other financial
intermediaries must obtain a favorable
recommendation from the appropriate
government agency for their articles of
incorporation to be approved.
NOTICE
GUIDELINES ON THE ADOPTION OF CENTRALIZED
(ONE-STOP-SHOP) FRAMEWORK FOR
ACCREDITATION/ SELECTION OF EXTERNAL
AUDITOR
Notice is hereby given that the Commission
intends to roll out another initiative this August
2019 which is the One-Stop-Shop (Centralized)
Accreditation of External Auditor. In this light, the
SEC is issuing the Guidelines on the Adoption of a
Centralized (OneStop-Shop) Framework for
Accreditation/Selection of External Auditors
(individual practitioners and audit firms) in the
financial sector in line with its cooperative
arrangements with the Bangko Sentral ng Pilipinas
(BSP), Insurance Commission (IC), and Philippine
Deposit Insurance Corporation (PDIC), under the
auspices of the Financial Sector Forum (FSF).
NOTICE
NEW MANDATORY DISCLOSURE FORM
Please be informed that the new
deadline for the submission of the mandatory
disclosure form will be in accordance with the
amendments to memorandum circular no. 15,
series of 2018. The commission is coming out
with a new mandatory disclosure form which
shall be submitted within thirty (30) days from
the effectivity of the amended guidelines. Those
who have not yet submitted the mandatory
disclosure form may submit the new mandatory
disclosure form within the period specified
above. The new mandatory disclosure form
will be used upon effectivity of the amended
guidelines. All concerned non-stock corporations
are thus advised to await the release of the
amended guidelines which will be posted at the
commission website.
QUALITY ASSURANCE BULLETIN I July 2019 Edition 14
LLAMES, GEMDEXTER A.
Tax Specialist
This bulletin is a compilation of relevant issuances, rulings and memoranda from various government agencies to
enhance the technical skills of the professional staff of Paguio, Dumayas and Associates, CPAs and is not intended to
replace the original issuances of the related government agencies.
PAGUIO, FLOYD C.
Managing Partner
MELCHOR, AILEEN P.
Senior Tax Specialist
ASADON, KEN JOHN B.
Tax Supervisor
Unit 3207 Cityland Pasong Tamo Condominium, Pasong Tamo St., Barangay Pio del Pilar, Makati City
Contact us at: 950-9853/950-9854
We are a team of Certified Public Accountants, who aim to be the
accounting firm of choice for business entities in terms of:
Audit and Assurance
Taxation
Business Process Outsourcing
Management Consultancy
MAHAWAN, GERRY B.
Tax Specialist