By: Domingo Angelo F. Cayosa, Harradier P. Isnani and Andrei Kristoffer G. Macandog
(Editor’s note: This article is part 2 of a series of articles entitled “Surviving ECQ: Basic information on Government Directives for Entrepreneurs.’ Click here for Part 1.)

TAX RELATED ISSUANCES

Deadline Extensions

Bureau of Internal Revenue: REVENUE REGULATIONS No. 10-2020 – EXTENSION OF STATUTORY DEADLINES AND TIMELINES FOR THE FILING AND SUBMISSION OF ANY DOCUMENT AND THE PAYMENT OF TAXES[1]

  • These regulations are promulgated to provide a comprehensive table relative to the extension of deadlines to submit, file, and/or pay the necessary documents and/or taxes under the Tax Code as well as existing revenue regulations.

When is the deadline for filing of the Annual Income Tax Returns (AITR)?

The deadline for the filing of AITR has been further moved from May 15, 2020 to May 30, 2020, without the imposition of penalties.

When is the deadline for filing and payment of Value-Added Tax (VAT), Withholding Tax, Documentary Stamp Tax (DST) and other taxes?

BIR Forms/Returns Original Due Date Extended Due Date
Filing and payment of 2550M – Monthly VAT for non-eFPS filers (for the month of February 2020) March 20, 2020 May 5, 2020
Filing and payment of 2550M – Monthly VAT for non-eFPS filers (for the month of March 2020) April 20, 2020 May 20, 2020
eFiling / Filing and ePay / Remittance of 1600WP – Monthly Remittance of Percentage Tax on Winnings and Prizes Withheld by RaceTrack Operators (for the month of February 2020) March 20, 2020 May 5, 2020
eFiling / Filing and ePay / Remittance of 1600WP – Monthly Remittance of Percentage Tax on Winnings and Prizes Withheld by RaceTrack Operators (for the month of March 2020) April 20, 2020 May 20, 2020
eFiling of 2550M- EFPS filers under Group E (for the month of February 2020) March 21, 2020 May 6, 2020
eFiling of 2550M- EFPS filers under Group D (for the month of February 2020) March 22, 2020 May 7, 2020
eFiling of 2550M- EFPS filers under Group C (for the month of February 2020) March 23, 2020 May 8, 2020
eFiling of 2550M- EFPS filers under Group B (for the month of February 2020) March 24, 2020 May 9, 2020
eFiling and ePayment of 2550M- EFPS filers under Group A (for the month of February 2020) March 25, 2020 May 10, 2020
ePayment of 2550M for Groups E, D, C, B (for the month of February 2020) March 25, 2020 May 10, 2020
eFiling of 2550M- EFPS filers under Group E (for the month of March 2020) April 21, 2020 May 21, 2020
eFiling of 2550M- EFPS filers under Group D (for the month of March 2020) April 22, 2020 May 22, 2020
eFiling of 2550M- EFPS filers under Group C (for the month of March 2020) April 23, 2020 May 23, 2020
eFiling of 2550M- EFPS filers under Group B (for the month of March 2020) April 24, 2020 May 24, 2020
eFiling and ePayment of 2550M- EFPS filers under Group A (for the month of March 2020) April 25, 2020 May 25, 2020
ePayment of 2550M for Groups E,D,C, B (for the month of March 2020) April 25, 2020 May 25, 2020
eFiling / Filing and ePayment / Payment of 2550Q – Quarterly VAT Declaration (Cumulative for 3 months) for EFPS and non-EFPS filers (for FQ ending February 29, 2020) March 25, 2020 May 10, 2020
eFiling / Filing and ePayment / Payment of 2550Q – Quarterly VAT Declaration (Cumulative for 3 months) for EFPS and non-EFPS filers (for FQ ending March 31, 2020) April 25, 2020 May 25, 2020
Submission of Quarterly Summary Lists of Sales/ Purchases by VAT Taxpayer- Non-EFPS (for FQ Ending February 29, 2020) March 25, 2020 May 10, 2020
Submission of Quarterly Summary Lists of Sales/ Purchases by VAT Taxpayer- Non-EFPS (for FQ Ending March 31, 2020) April 25, 2020 May 25, 2020
Submission of Sworn Statement of Manufacturer’s or Importer’s Volume of Sales of Each Particular Brand of Alcohol, Tobacco Products and Sweetened Beverage Products (for FQ ending February 29, 2020) March 25, 2020 May 10, 2020
Submission of Sworn Statement of Manufacturer’s or Importer’s Volume of Sales of Each Particular Brand of Alcohol, Tobacco Products and Sweetened Beverage Products (for FQ ending March 31, 2020) April 25, 2020 May 25, 2020
Registration of Computerized Books of Accounts & Other Accounting Records in electronic format (for FY ending February 29, 2020) March 30, 2020 May 15, 2020
Registration of Computerized Books of Accounts & Other Accounting Records in electronic format (for FY ending March 31, 2020) April 30, 2020 May 30, 2020
Submission of required hard copies of Financial Statements & scanned copies of Form 2307 to e-Filed 1702RT, MX & EX (for FY ending November 30, 2019) March 30, 2020 May 15, 2020
Submission of required hard copies of Financial Statements & scanned copies of Form 2307 to e-Filed 1702RT, MX & EX (for CY 2019) April 30, 2020 June 15, 2020
Submission of required hard copies of Financial Statements & scanned copies of Form 2307 to e-Filed 1702RT, MX & EX (for FY ending January 31, 2020) May 30, 2020 June 30, 2020
Submission of 2019 Inventory List (for FY ending February 29, 2020) March 30, 2020 May 15, 2020
Submission of 2019 Inventory List (for FY ending March 31, 2020) April 30, 2020 May 30, 2020
eSubmission – Quarterly List of Sales/Purchases/Importations (for FQ ending February 29, 2020) March 30, 2020 May 15, 2020
eSubmission – Quarterly List of Sales/Purchases/Importations (for FQ ending March 31, 2020) April 30, 2020 May 30, 2020
eFiling / Filing and ePayment / Payment of 1702Q – Quarterly Income Tax Returns for Corporations, Partnerships and Other Non-Individual Taxpayers (for FQ ending January 31, 2020) March 31, 2020 May 15, 2020
eFiling / Filing and ePayment / Payment of 1702Q – Quarterly Income Tax Returns for Corporations, Partnerships and Other Non-Individual Taxpayers (for FQ ending February 29, 2020) April 29, 2020 May 30, 2020
Filing/submission of Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes (BIR Form No. 1604-CF) March 31, 2020 May 15, 2020
Submission of the Deadline of Certificate of Compensation Payment (BIR Form No. 2316) March 31, 2020 May 15, 2020
Filing/Submission of Annual Information Return of Creditable Income Taxes Withheld (Expanded) (BIR Form No. 1604-E), together with its alphalist March 31, 2020 May 15, 2020
eFiling /Filing and ePayment /Payment of 2000 (DST) &
2000-OT (One Time Transactions) for the month of March 2020
April 5, 2020 May 20, 2020
eSubmission of Monthly eSales Report of all Taxpayers using CRM/POS with TIN ending in even number – month of March 2020 April 8, 2020 May 23, 2020
eFiling / Filing and ePayment / Payment of 1600 with Monthly Alphalist of Payees and 1606 (for the month of March 2020)

 

April 10, 2020 May 25, 2020
eFiling / Filing and ePayment / Payment of 1600 and 1601C – Withholding Tax Remittance Return for National Government Agencies (NGAs)- For the month of March 2020 April 10, 2020 May 25, 2020
Filing & Payment / Remittance of 2200M Excise Tax Return for the amount of Excise taxes collected from payment made to Sellers of Metallic Minerals (for the month of March 2020) April 10, 2020 May 25, 2020
Filing and Payment / Remittance of 1601C – non-EFPS Filers for the month of March 2020 April 10, 2020 May 25, 2020
eSubmission of eSales Report of all taxpayers using CRM/POS with TIN ending in odd number – Month of March 2020 April 10, 2020 May 25, 2020
eFiling of 1601C- EFPS Filers under Group E (for the month of March 2020) April 11, 2020 May 26, 2020
eFiling of 1601C- EFPS Filers under Group D (for the month of March 2020) April 12, 2020 May 27, 2020
eFiling of 1601C- EFPS Filers under Group C (for the month of March 2020) April 13, 2020 May 28, 2020
eFiling of 1601C- EFPS Filers under Group B (for the month of March 2020) April 14, 2020 May 29, 2020
eFiling and ePayment of 1601C- EFPS Filers under Group A (for the month of March 2020) April 15, 2020 May 30, 2020
ePayment of 1601C- EFPS Filers under Group E, D, C, B (for the month of March 2020) April 15, 2020 May 30, 2020
eFiling/Filing & ePayment/Payment of 1700, 1701 & 1701-A with required attachments – CY ending December 31, 2019 April 15, 2020 May 30, 2020
eFiling/Filing & ePayment/Payment of 1702 RT,MX & EX with required attachments- CY ending December 31, 2019 April 15, 2020 May 30, 2020
eFiling/Filing & ePayment/Payment of 1702 RT,MX & EX with required attachments- FY ending January 31, 2020 May 15, 2020 June 15, 2020
eSubmission of Quarterly Summary List of Machines (CRM-POS) sold by all Machine Distributors/ Dealers/ Vendors/ Suppliers- TQ ending March 31, 2020 April 15, 2020 May 15, 2020
Registration of Bound Loose Leaf Books of Accounts/ Invoices/ Receipts & Other Accounting Records- FY ending March 31, 2020 April 15, 2020 May 15, 2020
Submission of List of Medical Practitioners- CQ ending March 31, 2020 April 15, 2020 May 15, 2020
Filing/submission of BIR Form No. 2551Q – Quarterly Percentage Tax Return (refer to RMC No. 39-2020) April 25, 2020 May 25, 2020

When is the deadline for filing of tax returns relative to One-Time Transactions (ONETT) such as Capital Gains Tax Returns, Donor’s Tax Returns, and Estate Tax Returns?

BIR Form Description Original Due Date Extension Granted
BIR Form No. 1606 Withholding Tax Remittance Return For Onerous Transfer of Real Property Other Than Capital Asset (Including Taxable and Exempt)

 

Date of payment falls within the period of emergency starting from March 16, 2020 30 days from the date of the lifting of the ECQ
BIR Form No. 1706 Capital Gains Tax Return for Onerous Transfer of Real Property Classified as Capital Asset (both Taxable and Exempt)

 

BIR Form No. 1707 Capital Gains Tax Return for Onerous Transfer of Shares of Stocks Not Traded Through the Local Stock Exchange

 

BIR Form No. 1800 Donor’s Tax Return

 

BIR Form No. 1801 Estate Tax Return

 

 

Filing of Tax Returns and Payment of Taxes

REVENUE MEMORANDUM CIRCULAR No. 28-2020 – Filing of the 2019 Income Tax Returns and Submission of Required Attachments[2]

  • This RMC was issued to provide for guidance on how to file the AITR and pay for the taxes due thereon.

 

Where will the AITR be filed and where will it be paid?

 The filing of AITR and the payment of the corresponding taxes due thereon shall be made in any Authorized Agent Bank (AAB) nearest to the location of the taxpayer or in any Revenue Collection Officer under a specific Revenue District Office.

REVENUE MEMORANDUM CIRCULAR No. 37-2020 – Filing of the Tax Returns and Payment of Taxes Before the Extended Deadline[3]

  • This RMC was issued to address the concerns of some taxpayers who wish to file and pay taxes early but have not yet finalized their financial statements and/or returns.
  • This RMC also addresses the concerns of those who will not be able to use the Electronic Filing and Payments System (EFPS).

May returns filed before the extended deadline still be amended?

Taxpayers who file their tax returns within the original deadline or prior to the extended deadline can amend their tax returns at any time on or before the extended due date.

What happens if the amended returns result into additional tax to be paid?

 An amendment that will result in additional tax to be paid shall not be subject to corresponding penalties (surcharge, interest and compromise penalties) if the same is done not later than the extended deadline as provided under existing rules and regulations.

 

How about if the amended returns result into an overpayment of taxes already paid?

A taxpayer whose amended returns will result to overpayment of taxes paid can opt to carry over the overpaid tax as credit against the tax due for the same tax type in the succeeding periods’ tax returns aside from filing for claim for refund.

 

Which taxpayers will not be able to use the EFPS?

 For individuals (including Mixed Income Earner) and Estates and Trusts, the January 2018 version of the BIR Form 1701 [Annual ITR for Individuals (Including Mixed Income Earner), Estates and Trusts] is not yet available in EFPS. Thus, the Offline eBIRForms Package Version 7.6 as circulated in RMC No. 16-2020 shall be used. Consequently, payment for the income tax liability shall be made through manual payment or online payment as prescribed under the existing rules and regulations.

VAT Refund

REVENUE MEMORANDUM CIRCULAR No. 27-2020 – EXTENSION OF DEADLINE FOR THE FILING OF APPLICATIONS FOR VAT REFUND AND NINETY (90) DAY PROCESSING PERIOD[4]

When is the deadline for filing of applications for VAT refund?[5]

Type of Transaction / Document Original Due Date Extended Due Date
Application for VAT Credit/Refund Claims – BIR Form 1914 – Covering the calendar quarter ending March 31, 2018 March 31, 2020 May 15, 2020 or 30 days from the date of the lifting of the ECQ, whichever comes later
Application for VAT Credit/Refund Claims – BIR Form 1914 – Covering the fiscal quarter ending April 30, 2018 April 30, 2020 May 30, 2020 or 30 days from the date of the lifting of the ECQ, whichever comes later

 

How long will the processing of claims take?

The 90-day period of processing VAT refund claims by the processing offices for those claims that are currently being evaluated and for those that may be received from March 16 to April 14, 2020 is suspended. The counting of the number of processing days shall resume after the lifting of the ECQ.

When is the deadline for filing of the Certificate of Residence for Tax Treaty Relief (CORTT) Forms?

The deadline for the filing of CORTT forms for final withholding taxes on dividends, interest and royalties for the month of February 2020 and March 2020, paid and remitted in March 2020 and April 2020, respectively, is extended up to 30 days from the date of the lifting of the ECQ.

Other extensions

REVENUE MEMORANDUM CIRCULAR No. 39-2020 – FURTHER EXTENSION OF THE DUE DATES FOR THE SUBMISSION AND/OR FILING OF CERTAIN DOCUMENTS AND/OR RETURNS AS WELL AS PAYMENT OF CERTAIN TAXES[6]

  • This RMC provides additional rules on the extension of deadlines where the extended due dates granted are reckoned from the lifting of the state of emergency.

Which filings are to be reckoned from the lifting of the state of emergency?

Type of Transaction / Document Reference Original Due Date Extended Due Date
Filing of Position Paper to Notice of Informal Conference, etc. up to Other similar letters and correspondences with due dates Section 2 (items 41 to 46) of RR No. 7-2020 Filing date falls due during the emergency period starting on March 16, 2020 30 days from the date of the lifting of the period of emergency
Suspension of Running of Limitations under Sections 203 and 222 pursuant to Section 223 of the Tax Code of 1997, as amended Section 2 (items 49) of RR No. 7-2020 Before the expiration of Statute of Limitations 60 days after the lifting of the order of state of emergency

 

What if the extended due dates fall on a holiday or non-working day?

If the extended due dates fall on a holiday or non-working day, then, the submission and/or filing contemplated herein shall be made on the next working day.

Tax Amnesties on Tax Delinquencies

REVENUE MEMORANDUM CIRCULAR No. 38-2020 – FURTHER EXTENSION OF DEADLINE ON AVAILMENT OF TAX AMNESTY ON DELINQUENCIES[7]

  • This RMC further extends the deadline for filing of tax amnesty.

When is the deadline for the availment of tax amnesty on tax delinquencies?

The deadline for availment of tax amnesty on tax delinquencies under RR No. 4-2019 is moved from May 23, 2020 to June 8, 2020.

Filing of Protests on Assessments and Submission of Documents with Due Dates

REVENUE MEMORANDUM CIRCULAR No. 31-2020 – EXTENDING THE PERIOD OF SUBMISSION OR FILING OF DOCUMENTS AND CORRESPONDENCES[8]

  • This RMC extends the period of submission of certain documents and correspondences.

When is the period of submission for a Letter Answer to Notice of Informal Conference (NIC), Response to the Preliminary Assessment Notice (PAN), and other similar documents?

Document/Correspondence Extension
Letter Answer to Notice of Informal Conference (NIC) 30 days from the lifting of ECQ
Response to the Preliminary Assessment Notice (PAN)
Protest Letter to Final Assessment Notice (FAN) / Formal Letter of Demand (FLD)
Submission of relevant supporting documents to support the request for reinvestigation of audit cases with FAN/FLD
Appeal/ Request for Reconsideration to the Commissioner on the Final Decision on Disputed Assessment  (FDDA)
Other similar letters and correspondences with due dates
The deadline for availment of tax amnesty on tax delinquencies under RR No. 4-2019 is moved from May 23, 2020 to June 8, 2020.

 

Is this applicable only to Luzon where the ECQ was implemented?

No, the foregoing extension applies also to other jurisdictions where the concerned Local Government Units have adopted and implemented the ECQ and other similar measures. The extension applies to taxpayers whose responses to the NIC, PAN, FAN, FLD, FDDA and other notices fall due on the dates covered by the ECQ.

Suspension of the running of the Statute of Limitations in the Assessment and Collection of Taxes

REVENUE MEMORANDUM CIRCULAR No. 34-2020 – SUSPENDING THE RUNNING OF THE STATUTE OF LIMITATIONS IN THE ASSESSMENT AND COLLECTION OF TAXES[9]

 

Is the period to assess and collect taxes for BIR still running?

No, the running of the Statute of Limitations in the assessment and collection of taxes under Sections 203 and 222 of the National Internal Revenue Code (NIRC) of 1997, as amended, is suspended for a period starting on March 16, 2020 until the lifting of the state of national emergency and for 60 days thereafter.

The suspension of the running of the Statute of Limitations shall likewise apply with respect to the issuance and service of assessment notices, warrants and enforcement and/or collection of deficiency taxes. This RMC applies nationwide.

Exemptions from Documentary Stamp Tax (DST)

REVENUE MEMORANDUM CIRCULAR No. 35-2020 – EXEMPTION FROM DOCUMENTARY STAMP TAX (DST) FOR RELIEF FOR LOANS[10]

What is the tax treatment for those with loans where the grace period is extended?

All banks, quasi-banks, financing companies, lending companies, and other financial institutions, public and private, including GSIS, SSS and Pag-ibig Fund, in extending the grace period for the payment of all loans shall not impose additional DST imposed under Sections 179, 195 and 198 of the NIRC, for credit extensions and credit restructuring, micro-lending including those obtained from pawnshops and extensions thereof during the covered period.

REVENUE MEMORANDUM CIRCULAR No. 36-2020 – FURTHER CLARIFICATION ON THE EXEMPTION FROM DST FOR RELIEF FOR QUALIFIED LOANS[11]

  • This RMC is issued to define the terms mentioned in RMC 35-2020 and clarify the coverage of the exemption.

What is covered by the DST exemption?

 Apart from those mentioned in RMC 35-2020, also exempted from DST are all extension of payment and/or maturity periods of all pre-existing loans falling due within the ECQ period, including the extension of maturity periods that may result from the grant of grace periods, whether or not such maturity periods originally fall due within the ECQ period.

 

What is a credit extension? 

Credit extensions refer to pre-existing loans that fall due during the ECQ period where interest is paid but the principal is converted into a new loan with a new maturity date. This new loan principal and the renewal or extension of the loan’s mortgage, pledge, or deed of trust shall be exempt from DST.

However, where the principal is rolled-over or renewed as a new loan principal in accordance with a pre-agreed roll-over agreement and collateral documentation thereof prior to the COVID-19 situation, it shall remain subject to DST.

 

What is credit restructuring?

 Credit restructuring refers to pre-existing loans that fall due during the ECQ period where either:

  1. both the principal and interests are not paid but are consolidated and converted into a new loan principal with a new maturity date, or
  2. there is payment of interest and partial payment of principal on maturity while the remaining unpaid principal is converted into a new loan principal with a new maturity date

Both these and the renewal or extension of the loan’s mortgage, pledge, or deed of trust shall be exempt from DST.

 

Are there exceptions to this exemption?

 Yes, fresh loan availments, top-up to existing loans, and new loan drawdowns during the ECQ period and its collateral documentation remain subject to DST.

 

Application for New Authority to Print (ATP) and Use of Expired Receipts/Invoices

REVENUE MEMORANDUM CIRCULAR No. 41-2020 – EXTENDING THE TIME OF APPLICATION FOR NEW AUTHORITY TO PRINT RECEIPTS/INVOICES OF TAXPAYERS WITH EXPIRING PRINCIPAL AND SUPPLEMENTARY RECEIPTS/INVOICES AND EXTENDING THE USE OF EXPIRED PRINCIPAL AND SUPPLEMENTARY RECEIPTS/INVOICES[12]

What is the effect of the ECQ on printing of receipts/invoices of taxpayers?

Transaction Extension
Filing of application for new ATP for expiring principal and supplementary receipts/invoices where the expiration date(s) falls within the period of the ECQ Extended until May 13, 2020 or for 30 calendar days after the lifting of the ECQ (if extended), whichever comes later, without imposition of penalties
Use of expired principal and supplementary receipts/invoices that falls within the period of the ECQ; provided that:

1.       Taxpayer cannot apply for new ATP due to the ECQ or the application has been filed and received by the BIR but the accredited printer cannot deliver the receipts/invoices to the concerned taxpayer due to the ECQ; and

2.       Said receipts/invoices to be issued/used shall be stamped “Emergency Extension for Use until May 13, 2020” (if the ECQ is extended, the date shall be 30 days after the last day of ECQ)

Extended until May 13, 2020 or for 30 calendar days after the lifting of the ECQ (if extended), whichever comes later

 

Is this applicable only to Luzon where the ECQ was implemented?

 No, the extensions are applicable to all concerned taxpayers nationwide. All existing revenue issuances on receipts/invoices shall be applied after the last day of the extension period.

Incentives for the Manufacture or Importation of Healthcare Equipment and Supplies

REVENUE REGULATIONS No. 6-2020 – IMPLEMENTING THE TAX EXEMPTION PROVISION OF THE BAYANIHAN TO HEAL AS ONE ACT[13]

  • This RMC details the various tax benefits for importation and donation of healthcare equipment and supplies.

What is the tax treatment on importation of healthcare equipment and supplies?

 The importation of critical or needed healthcare equipment or supplies intended to combat COVID-19, including importation or materials needed to make such, shall be exempt from VAT, excise tax and other fees.

The importation thereof shall not be subject to the issuance of Authority to Release Imported Goods (ATRIG).

What is the tax treatment on the donation of these imported healthcare equipment and supplies?

 Donations of imported articles to or for the use of the 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 are exempt from donor’s tax, and subject to the ordinary rules of deductibility under existing rules and issuances.

 

REVENUE REGULATIONS No. 9-2020 – GRANTING FURTHER BENEFITS ON DONATIONS DURING THE PERIOD OF THE ENHANCED COMMUNITY QUARANTINE IN RELATION TO THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED[14]

  • This RMC provides additional benefits on donations for the fight against COVID-19.

What is the tax treatment on donations made during the ECQ?

 Donations given for the sole and exclusive purpose of combating COVID-19 during the period of the state of national emergency shall be considered fully deductible against the gross income of the donor, subject to the requirements enumerated under Section 34(H) in relation to Section 101 of the NIRC and as implemented by Section 17 of RR No. 12-2018. Documentary requirements for both the donor and the donee are also provided therein.

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

 

SMALL BUSINESS WAGE SUBSIDY PROGRAM[15]

  • The national government is providing a wage subsidy for affected employees of small businesses to help mitigate the impact of the quarantine in Luzon and various local government units.

What is the Small Business Wage Subsidy (SBWS) Program?

 Under the SBWS program, the government, through the Social Security System (SSS), shall provide a wage subsidy of between 5,000 to 8,000 pesos (based on the regional minimum wage) per month per eligible employee for up to two (2) months.

How do employees qualify for this program?

 To qualify, applications should be completed by the employer on behalf of their employees through the SSS website.

What are the criteria for eligibility for employers?

The business must meet two eligibility criteria: size of business and impact of the enhanced community quarantine (ECQ) on the small business’ operations. The small business must meet both criteria.

Businesses that have been compliant with the regulations of the Bureau of Internal Revenue (BIR) and SSS will be prioritized.

  • Size of business: The small business — whether a corporation, partnership, or sole proprietorship — must not be in the BIR’s Large Taxpayer Service (LTS) list.
  • Impact of the enhanced community quarantine (ECQ): Small businesses under both Category A (non-essentials) that are forced to stop operations (i.e., temporary closure or suspension of work) and Category B (quasi-essentials) that are allowed to operate a skeleton force can apply for the wage subsidy for employees who are not able to work and did not get paid during the ECQ. Employers in areas where other forms of quarantine have been put in place by the LGU may also qualify.

The following small businesses will be prioritized:

  1. BIR-registered and complying with tax obligations during the past three years, up to January 2020.
  2. SSS-registered and have paid SSS contributions for the past three years up to January 2020 (the last recorded contribution).

Which employees are eligible?

An employee who fulfills all of the following criteria is eligible:

  • Must be an employee of an eligible small business
  • Must be employed and active as of March 1, 2020 but unable to work due to the ECQ
  • Did not get paid by their employer for at least two weeks during the temporary closure or suspension of work in accordance with Labor Advisory No. 1, Series of 2020
  • Can be of any contract status (e.g., regular, probationary, regular seasonal, project-based, fixed-term)
  • Must be certified by the employer in the application as having met all the above criteria

Note:

  • Priority will be given to employees that are BIR and SSS-registered and compliant with SSS and BIR regulations.
  • Employees who have received a subsidy from the Department of Labor and Employment’s COVID-19 Adjustment Measures Program (CAMP) shall be eligible for only the first month of the SBWS to avoid duplication.

Which employees are not eligible?

The following employees are not eligible:

  • Working from home or part of the skeleton force
  • Those who voluntarily went on the following types of leave – maternity leave, paternity leave, study leave, sabbatical leave, and leaves of the same type – for the entire duration of the ECQ, whether with or without pay
  • Already a recipient of SSS unemployment benefits due to COVID-19, to avoid duplication
  • Those who have settled or in-process SSS final claims (funeral, retirement, death, and total disability)

 What are the conditions to avail of the program?

 To qualify for the program, the following conditions must be fulfilled:

  • Small businesses must maintain the employment status of all eligible employee beneficiaries before the ECQ and throughout the SBWS period. This will be checked during the monitoring and evaluation stage. Non-compliance with this condition shall result in the employer refunding to the government the wage subsidy amount.
  • Employees cannot resign during the ECQ period.

 

How much subsidy will be given?

Region Monthly wage subsidy per worker (pesos)
NCR 8,000
CAR 5,500
I 5,500
II 5,500
III 8,000
IV-A 8,000
IV-B 5,000
V 5,000
VI 6,000
VII 6,000
VIII 5,000
IX 5,000
X 6,000
XI 6,000
XII 5,000
CARAGA 5,000
BARMM 5,000

 

What are the relevant dates to take note of?

The application period will be from April 16 to 30, 2020. The first tranche of the payout will be from May 1 to 15, 2020 while the second tranche of the payout will be from May 16 to 31, 2020. The scheduling may change depending on the timing of the ECQ.

PROCUREMENT RELATED ISSUANCES

Government Procurement Policy Board (GPPB) Resolution Nos. 03-2020[16],05-2020[17]

[in relation to 2016 IRR of RA No. 9184]

  • the Bids and Awards Committee (BAC) need not be the one to recommend the revision of the Annual Procurement Plan (APP);
  • Moreover, by approving the APP, the Head of the Procuring Entity (HoPE) effectively confirms the existence and veracity of the ground(s) relied upon in resorting to Negotiated Procurement (Emergency Cases). Thereby dispensing with the previous written confirmation requirement from the HoPE prior to approval of contract;
  • Similarly, the HoPE may now authorize the End-user unit or any other appropriate bureau, committee, support or procuring unit to directly negotiate with a legally, technically, and financially capable supplier, contractor, or consultant.

 

What is the procurement process under emergency cases?

The process involved in Negotiated Procurement (Emergency) Cases under Sections 53(b) of Republic Act (RA) No. 9184 and 53.2 of its 2016 IRR, is summarized as follows:

  1. The BAC or the End-user unit or any other appropriate bureau, committee, support or procuring unit shall request for the approval of the APP from the HoPE to cover the Procurement Project. This shall be accompanied by documents identifying the projects needed to address the emergency i.e., Technical Specifications, Scope of Work or Terms of Reference and validating the existence of funds in the budget to cover the same.The APP may only be approved by the HoPE upon confirmation of the existence and veracity of the ground(s) relied upon in resorting to Negotiated Procurement (Emergency Cases) and the existence of funds for the purpose. Thus, by approving the APP, the HoPE effectively confirms the existence of the grounds for emergency procurement, thereby dispensing with the previous requirement for a written confirmation from the HoPE prior to the approval of contract.
  2. The BAC or the End-user unit or any other appropriate bureau, committee, support or procuring unit, authorized by the HoPE shall then directly negotiate with a legally, technically, and financially capable supplier, contractor, or consultant.
  3. Upon recommendation of the BAC or End-user unit or any other appropriate bureau, committee, support or procuring unit duly authorized by the HoPE, the contract shall be immediately awarded to the legally, technically, and financially capable supplier, manufacturer, distributor, contractor, and consultant, contractor, or consultant.

This includes a foreign bidder determined to satisfy any of the legal, technical and financial requirements of the PE.

Note that the HoPE may delegate the authority to award the contract to any official of the PE, except to those where there exists conflict of interest such as the BAC Chairperson and members pursuant to Section 11.2.5 of the 2016 revised IRR of RA No. 9184 and other associated issuances or the person authorized to negotiate the bidding.

  1. Except for contracts with ABC of Fifty Thousand Pesos (PhP50,000.00) and below, the BAC, through the Secretariat shall post for information purposes the Notice of Award, contract or purchase order, including the Notice to Proceed, if necessary, in (i) the PhilGEPS website; (ii) the website of the PE or its electronic procurement service provider, if any; and (iii) any conspicuous place in the premises of the PE.

When can PEs resort to Negotiated Procurement (Emergency Cases)?

PEs shall be allowed to apply the rules on Negotiated Procurement (Emergency Cases) in any of the following:

  1. in case of imminent danger to life or property during a state of calamity;
  2. when time is of the essence arising from actual or man-made calamities or other causes where immediate action is necessary to prevent damage to or loss of life or property; or
  3. to restore vital public services, infrastructure facilities and other public utilities. (Section 53.2 of the 2016 IRR of RA No. 9184)

The instances or situations where the foregoing conditions may be applied include the provision of immediate response and initial recovery steps to avoid loss of life, injury, disease and other negative effects on human, physical, mental and social well-being, together with damage to property, destruction of assets, loss of services, social and economic disruption and environmental degradation. (GPPB Resolution No. 03-2020)

 

What types of Procurement Projects may Negotiated Procurement (Emergency Cases) be applied? And can it be used for lease of real property or venue?

 

Negotiated Procurement (Emergency Cases) covers Goods, Civil Works projects and Consulting Services.

Yes, it includes the lease of real property or venue such as those for use as quarantine centers, evacuation sites, medical relief and aid distribution locations, warehousing facilities, or similar temporary disaster or emergency response facility. (GPPB Resolution No. 03-2020)

Is the HoPE required to issue a written confirmation on the existence and veracity of the grounds used for Negotiated Procurement (Emergency Cases) prior to the approval of contract?

No more, by approving the APP containing the Procurement Project subject to Negotiated Procurement (Emergency Cases), the HoPE effectively confirms the existence and veracity of the grounds relied upon in resorting to this modality. (GPPB Resolution No. 03-2020)

What are the requirements before the HoPE approves the APP covering the Procurement Project subject to Negotiated Procurement (Emergency Cases)?

  1. The HoPE shall confirm the existence and veracity of the grounds relied upon in the adoption of Negotiated Procurement (Emergency Cases). This means that the HoPE must be able to relate the projects to be procured to the emergency situation or condition it is intending to address, for e.g. provision of food packs, lease of venue or real property for use as quarantine facilities, purchase of COVID-19 testing kits and the like. The HoPE shall likewise consider the appropriate timing or the proximity of time between the actual procurement activity to be conducted and the emergency sought to be addressed, such that when the reason or cause for the emergency has already been abated, adoption of Competitive Bidding or other applicable Alternative Modes of Procurement should be considered; and
  2. The HoPE shall validate from the appropriate office that there are funds in the budget to cover the Procurement Project subject to Negotiated Procurement (Emergency Cases).

Who will undertake the negotiations or procurement in the case of Negotiated Procurement (Emergency Cases)?

PEs already maintaining a bidder’s updated file on any of the following requirements, whether through the Philippine Government Electronic Procurement System (PhilGEPS) Certificate of Registration and Membership or its own records, shall not require its re-submission.

  1. Otherwise, PEs shall require:
  2. Mayor’s or Business Permit; For projects with an Approved Budget for the Contract (ABC) above PhP500,000.00
  3. Income Tax Returns (Annual Income Tax Return of the preceding tax year) OR Business Tax Returns (Value Added Tax or Percentage tax return covering the previous six months)
  4. Omnibus Sworn Statement (OSS)

Additional requirements for infrastructure projects:

  1. Philippine Contractors Accreditation Board (PCAB) License; and
  2. Net Financial Contracting Capacity (NFCC) for infrastructure projects with an ABC above PhP500,000.00

What if the local government unit has not issued the Mayor’s or Business Permit, is the PE allowed to accept a substitute?

Yes. The PE is allowed to accept the recently expired Mayor’s or Business Permit and the Official Receipt as proof of application and payment for the renewal of the permit will suffice, subject to submission of the Mayor’s Permit after award of contract. (GPPB Resolution No. 05-2020)

Can the PE accept an unnotarized OSS given the difficulty of securing the services of a notary public under a State of Emergency or Calamity or Enhanced Community Quarantine?

Yes. The PE may accept an unnotarized OSS, subject to compliance therewith after award of the contract. (GPPB Resolution No. 05-2020)

When should the documentary requirements for Negotiated Procurement (Emergency Cases) be submitted?

The documents shall be submitted at any time before the award of the contract. Thus, it may be required during:

  1. submission of offer/s;
  2. evaluation of offer/s; or
  3. before issuance of the Notice of Award.

The PE should indicate in the Request for Quotation/Proposal at what stage of the procurement process these requirements shall be submitted.

Are bid, performance and warranty securities required for Negotiated Procurement (Emergency Cases)?

  1. Submission of bid security may be dispensed with.
  2. Performance security shall be required for Infrastructure Projects. For Goods and Consulting Services, PEs have the option to require or dispense with the posting of Performance Security taking into consideration the nature of the emergency sought to be addressed, and the imminent danger to life and property it poses and depending on the nature and requirements of their Procurement Projects, i.e. amount of the ABC, delivery requirements, industry practice, etc. (Section 54.5 of 2016 IRR of RA No. 9184)
  3. Warranty Security shall not be required in the procurement of Consulting Services. For Goods and Infrastructure Projects, Pes have the option to require or dispense with the posting of warranty security taking into consideration the nature of the emergency sought to be addressed and the imminent danger to life and property it poses and depending on the nature and requirements of the procurement project, i.e. amount of ABC, industry practice, etc. (Section 54.5 of 2016 IRR of RA No. 9184)

Can PEs procure from foreign bidders under Negotiated Procurement (Emergency Cases) and if so, what are documents required from them?

Yes, provided that the PE determined that the foreign bidder is legally, technically, and financially capable to undertake the procurement at hand.

A capable foreign bidder has (i) submitted the mandatory documentary requirements i.e. Mayor’s Permit, OSS, and Business or Income tax Returns, PCAB license for infrastructure projects; (ii) complied with the technical specifications set by the PEs, including the required certification under existing rules such as the Certificate of Product Registration issued by the Food and Drug Administration for testing kits; and (iii) submitted the financial requirements of the project such as NFCC, in case of infrastructure projects.

Note as well that for foreign bidders, the equivalent document in their jurisdiction would suffice consistent with Section 23.2 of the 2016 IRR of RA No. 9184.

Can PEs make advance payment?

Yes, advance payment is allowed in the following:

  1. not to exceed fifteen percent (15%) of the contract amount for procurement of Goods required to address contingencies arising from natural or man-made calamities in areas where a “State of Calamity” has been declared by the appropriate authorities;
  2. a single advance payment not to exceed fifty percent (50%) of the contract amount for hotel and restaurant services, use of conference or seminar and exhibit areas and lease of office space where downpayment is a standard industry practice;
  3. a lump sum or at most two installments not to exceed fifteen percent (15%) of the contract amount as mobilization cost for Infrastructure Projects, subject to the submission of an irrevocable standby letter of credit or bank guarantee or surety bond;
  4. not to exceed fifteen percent (15%) of the contract amount for cost of mobilization for Consultancy Services, subject to the submission of an irrevocable standby letter of credit; and
  5. Any amount in excess of the foregoing requires prior approval of the President of the Philippines. (Section 1 of Memorandum Order No. 172 series of 2005, Annexes D, E and F of the 2016 IRR of RA 9184, and Section 88 of Presidential Decree No. 1445 or the Auditing Code of the Philippines)

 

REAL ESTATE RELATED ISSUANCES

Department of Trade and Industry: Memorandum Circular 20-12 on Guidelines on the Concessions Residential Commercial of MSMEs on Rents[18]

  • Memorandum Circular (MC) granting a minimum of 30-day grace period on rents falling due within the period of the ECQ

To whom shall this Memorandum Circular Apply?

This MC shall apply to (1) residential rents, and (2) commercial rents of MSMEs that have ceased operations due to the ECQ.

What are Micro, Small and Medium Enterprises (MSMEs)?

MSMEs is defined as “any business activity or enterprise engaged in industry agribusiness and/or services, whether single proprietorship, cooperative, partnership or corporation whose total assets, inclusive of those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated, must have value falling under the following categories:

  1. Micro – not more than Php3 million;
  2. Small – Php 3,000,001 to Php 15 million; and
  3. Medium – Php 15,000,001 to Php 100 million.

What is Residential Rent?

“Residential rent” means any amount paid for the use or occupancy of a residential unit, regardless of the mode and terms of payment.

What is Commercial Rent?

“Commercial rent” shall mean any amount paid for the use or occupancy of a commercial space, regardless of the mode and terms of payment, of MSMEs.

What is Commercial Space?

“Commercial space” shall refer to land, offices, buildings, centers, shops, facilities and any other property used principally for commercial purposes, which denote any activity for which profit is the main aim or revenue is received.

What concession is granted on Residential Rents?

A minimum of 30-day grace period shall be granted on residential rents falling due within the period of the ECQ, without incurring interests, penalties, fees, and other charges.

Where cumulative amount of rents falling due within the ECQ, shall be amortized in the six (6) months following the end of the ECQ, and shall be added to the rents due on those succeeding months, without interest, penalties fees and charges. [This basically means that the rent during the ECQ may be paid in installments for in the next 6 months]

What concession is granted on Residential Rents?

A minimum of 30-day grace period shall be granted on commercial rents falling due upon MSMEs that have temporarily ceased operations within the period of the ECQ, without incurring interests, penalties, fees, and other charges.

Where cumulative amount of rents falling due within the ECQ, shall be amortized in the six (6) months following the end of the ECQ, and shall be added to the rents due on those succeeding months, without interest, penalties fees and charges. [This basically means that the rent during the ECQ may be paid in installments for in the next 6 months]

When does the 30-day grace period start?

The minimum 30-day grace period is determined to be the 30 calendar days following the last due date of the rent which fell due within the ECQ.

What if rents had already been paid, are Lessors obligated to refund the rents paid?

No. Lessors are not obligated to refund residential and commercial rents paid by the lessees during the period of the quarantine. Notwithstanding this provision, the lessor shall grant a minimum of 30- day grace period from the next due date of the residential/commercial rents ·without incurring interest, penalties, fees, and charges.

What may a Lessor of Commercial Rents extend aside from the 30-day grace period?

Notwithstanding the above, the lessors of commercial rents far MSMEs who wish to extend greater generosity may:

  1. Totally or partially waive the commercial rents that are falling due during the ECQ.
  2. Grant reprieve or discounted amount of commercial rents due after the ECQ.
  3. Open for renegotiation the Lease Term Agreements with the lessees.
  4. Use other recourse to mitigate the impact of the ECQ to the MSMEs.

What if a Lessor had already waived the rent, will this be honored after the issuance of this MC?

Yes. Existing waivers on rental payments due provided by lessors, such as those in recognition of the closure of their lessees’ businesses during the ECQ, shall continue to be honored.

How may a MSME be eligible for these concessions?

MSMEs shall signify to their respective lessors their request for assistance by providing supporting documents, such as, but not limited to, financial statements as proof of enterprise size, and/or lease contract as proof of tenancy.

What should the Lessor consider before granting these concessions?

 Lessors shall consider the liquidity and capability to repay rent of MSMEs in negotiating assistance to be granted. MSMEs may present their financial statements, cash flow projections, among others, as supporting evidence.

What are the safeguards from eviction under this MC?

 No eviction for failure to pay the residential or commercial rent due may be enforced within the thirty (30)-day period after the lifting of the ECQ.

How may one file a complaint for a violation of this MC? 

Any violation of this MC may be brought before the DTI either in person or electronically. The complaint shall contain the following information:

  1. Complete name, residence address, and contact number of the lessor and the lessee;
  2. Complete address of the residential or commercial unit concerned;
  3. Date when the rental payment became due;
  4. Narration of the relevant and material facts; and
  5. Submission of documentary evidence, if any.

[1] Dated April 14, 2020, amending Revenue Regulations (RR) No. 7-2020, Revenue Memorandum Circular (RMC) Nos. 25-2020, 28-2020, 30-2020, 32-2020 and 39-2020.

[2] Dated March 18, 2020, amending RMC No. 25-2020

[3] Dated April 6, 2020

[4] Dated March 18, 2020

[5] As amended by RR No. 10-2020

[6] Dated April 7, 2020, amending RR No. 7-2020

[7] Dated April 7, 2020, amending RMC No. 33-2020 and RR No. 5-2020

[8] Dated March 23, 2020

[9] Dated March 27, 2020

[10] Dated March 27, 2020, issued pursuant to RR No. 8-2020

[11] Dated April 6, 2020, issued to clarify RMC No. 35-2020

[12] Dated March 30, 2020

[13] Dated March 27, 2020

[14] Dated April 6, 2020

[15] A joint program by the SSS, BIR, and Department of Finance (DOF)

[16] Approved on 9 March 2020, and published in the Philippine Daily Inquirer on 12 March 2020; FAQs based on Government Procurement Policy Board-Technical Support Office (GPPB-TSO) opinion

[17] Approved on 9 March 2020

[18] Issued on April 4, 2020

FNS

FNS


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