Tax Tweets

BIR Issuances

Circularizing RA No. 12214, otherwise known as the Capital Markets Efficiency Promotion Act

Revenue Memorandum Circular No. 60-2025
Issued on June 11, 2025

R.A. No. 12214 or the Capital Markets Efficiency Promotion Act (“CMEPA”) takes effect July 01, 2025. The CMEPA introduces amendments to the Tax Code that aims to provide a simpler, more efficient, and regionally competitive passive income tax system that encourages savings and develop capital markets. The salient amendments are the following:

1. In order for royalties to be subject to 20% final tax, instead of regular income tax, it must qualify as passive income. Passive income is now defined as any income earned from sources that do not require a taxpayer’s active pursuit and performance of trade or business and is not subject to value-added tax imposed under the Tax Code.
2. The final tax on interest income from foreign currency deposits has been increased from 15% to 20%.
3. The sale of shares of stock of foreign corporations is now covered by the 15% Capital Gains Tax (“CGT”). Previously only shares of domestic corporations were subject to CGT.
4. Equity-based compensation, such as stock options, restricted stock units, stock appreciation rights, and similar items, are included in the gross income of the taxpayer at the time of exercise.
5. Interest income and gains from the sale, transfer, or disposition of “project-specific bonds” are now excluded from gross income subject to tax. This covers bonds that are issued by the Republic of the Philippines or any of its instrumentalities to finance capital expenditures or programs covered by the Philippine Development Plan, or its equivalent, and other high-level priority programs of the national government, as determined by the Secretary of Finance.
6. Gains from the redemption of shares or units of participation in mutual fund and unit investment trust fund are excluded from gross income subject to tax. Previously, only redemption of mutual funds was excluded.
7. Stock Transaction Tax (“STT”) on the sale or exchange of shares listed and traded through a local Stock exchange has been reduced from 0.60% to 0.10%.
8. STT on the sale or exchange of shares of a domestic corporation that is listed and traded through a foreign stock exchange shall be 0.10%.
9. Excise Tax exemption on pick-ups has been removed. The 50% and full excise tax exemption of hybrid and purely electric vehicles were retained.
10. The Documentary Stamp Tax (“DST”) on original issuance of shares has been reduced from 1% to 0.75%.
11. The DST on debt instruments has been retained at 0.75%. However, only one DST shall be imposed on the loan agreement and promissory notes, mortgage, security interest over personal property, and other contracts issued to secure such loan.

Clarification on the provisions of Revenue Regulations (“RR”) No. 3-2025, implementing Republic Act (“RA”) No. 12023 titled “An Act Amending Sections 105, 108, 109, 110, 113, 114, 115, 128, 236 and 288 and Adding New Sections 108-A and 108-B of the National Internal Revenue Code of 1997, as Amended,” imposing the Value-Added Tax on Digital Services

Revenue Memorandum Circular No. 47-2025
Issued on May 8, 2025

a.    The Non-Resident Digital Service Providers (“NRDSPs”) are still required to file tax returns with the BIR to report their Business-to-Business (“B2B”) transactions. This will enable the BIR to collect information on the total digital services transactions in the Philippines by NRDSPs which are needed for accurate monitoring and analysis of the digital economy, ensuring compliance with tax regulations, and facilitating effective policy-making and revenue collection;

b.    NRDSPs do not need a local representative in the Philippines to register with the BIR. However, an NRDSP may appoint a resident third-party service provider (an individual or entity, such as a law firm or accounting firm) for purposes of registration, filing of tax return and payment of taxes, receiving notices, record keeping, and other reporting obligations;

c.    NRDSPs with local representative may manually register with BIR Revenue District Office No. 39- South Quezon City;

d.    For VAT purposes, the appointment of a resident third-party service provider shall not classify the NRDSP as a resident foreign corporation doing business in the Philippines;

e.    There is no prescribed form of an invoice for NRDSPs as long as the mandatory information under the law is present, which are as follows:

(1) Date of the transaction;

(2) Transaction Reference Number;

(3) Identification of the consumer (including the TIN for B2B);

(4) Brief description of the transaction; and

(5) The total amount with the indication that such amount includes the VAТ.

f.    An NRDSP can verify if a buyer is engaged in business by obtaining the buyer’s TIN and by providing a questionnaire or a tick box in their websites/platforms for customers to confirm that they are engaged in business in the Philippines. The NRDSP may also request other business registration documents, such as the BIR COR, if the NRDSP’s system is capable of obtaining/receiving this document. This helps ensure that the correct VAT treatment is applied, reducing the risk of non-compliance;

g.    The VAT liability for NRDSPs begins on June 2, 2025. This means that any digital services provided from June 2, 2025 onwards are subject to the 12% VAT. If the Philippine buyer already paid for the full-year contract in advance without including the 12% VAT, the NRDSP is still liable for the VAT on the portion of services provided from June 2 onwards. The liability to pay and remit the VAT in this scenario shall lie with the NRDSP since the buyer no longer has control over the payment;

h.    RA No. 12023 imposes a 12% VAT on digital services consumed in the Philippines, whether provided by resident or non-resident digital service providers. The law clarifies that VAT is applicable to digital services, regardless of the provider’s physical presence, as long as it is consumed in the Philippines;

Therefore, in cases where the contracting party of the NRDSP is outside the Philippines (e.g. in the US) and the US entity shares costs with different markets (including subsidiaries in the Philippines), if the shared cost is for digital services consumed by the Philippine subsidiary, it would be subject to VAT. In this case, the Philippine subsidiary shall be responsible in withholding and remitting the VAT due thereon to the BIR as a B2B transaction.

j.    If the digital services rendered by NRDSPs are directly attributable (1) to the registered business activity/project of the Investment Promotion Agency-registered entity, classified as registered export enterprise, high-value domestic market enterprise or domestic market enterprise under transitory provision of RA No. 12066 or (2) to the export activity of the export oriented enterprises, they are eligible for VAT exemption.

Circularizing the Availability of BIR Form No. 2550-DS [Value Added Tax (VAT) Return for Nonresident Digital Service Providers]

Revenue Memorandum Circular No. 52-2025
Issued on May 30, 2025

This circular is issued to prescribe the new BIR Form No. 2550-DS [Value-Added Tax (VAT) Return for Nonresident Digital Service Providers] in relation to RA No. 12023 and RR No. 3-2025.

Further Extending the Deadline for Registration of Non-Resident Digital Service Providers

Revenue Memorandum Circular No. 58-2025
Issued on June 11, 2025

Update on Registration of NRDSPs

• New registration deadline for NRDSPs: July 1, 2025

What this means for customers in the Philippines?

Even if an NRDSP (like a foreign platform or software provider) hasn’t registered for VAT yet:

A buyer engaged in business must –

• File a remittance return
• Withhold and remit the 12% VAT on digital services purchased from unregistered NRDSPs

This applies even if the provider fails to register with the BIR by the deadline.

Clarification on the Computation of Excise Tax on Mineral Products

Revenue Memorandum Circular No. 48-2025
Issued on May 8, 2025

The BIR provides clarification on how excise tax is computed for mineral products, especially in relation to applicable foreign exchange rates. The Bankers Association of the Philippines (BAP) is designated as the official reference of foreign exchange rates for both provisional and final excise tax calculations.  The circular provides:

1. The provisional computation of excise tax, required for the export permit application, shall be based on the spot foreign exchange rate as of the date of the export permit application, while the final excise tax computation, as adjusted upon the issuance of the final assay report and final invoice, should be based on the weighted average foreign exchange rate as of the date of shipment. A mineral product shall be deemed shipped upon the issuance of the bill of lading.
2. For domestic sales (e.g., sales to a domestic corporation or a resident foreign corporation engaged as a mineral processing plant) in foreign currency, the provisional computation shall be based on the spot foreign exchange rate as of the date of application for the permit to transport, while the final excise tax, as adjusted upon the issuance of the final assay report, shall be based on the weighted average foreign exchange rate as of the date of the final sales invoice. The final invoice for exports must be issued within 90 days of actual exportation as indicated in the bill of lading, based on the determined actual market value.
3. In cases where the provisional tax exceeds the final tax due to foreign exchange fluctuations, taxpayers may claim a refund under Section 229 of the NIRC of 1997, as amended. Such claims must be filed within two years from the date of payment, in accordance with existing procedures and documentary requirements.

Availability of Offline Electronic Bureau of Internal Revenue Forms (eBIRForms) Package Version 7.9.5

Revenue Memorandum Circular No. 49-2025
Issued on May 9, 2025

The BIR announces the availability of the Offline eBIRForms Package Version 7.9.5, which can be downloaded from the BIR Website at www.bir.gov.ph.

The new Offline eBIRForms Package includes the following BIR Forms:

1. BIR Form No. 1702Q January 2018 (ENCS) [Quarterly Income Tax Return for Corporations, Partnerships and Other Non-Individual Taxpayers] — This return shall be filed within sixty (60) days following the close of each of the first three (3) quarters of the taxable year, whether calendar or fiscal year.
2. BIR Form No. 2550Q April 2024 (ENCS) [Quarterly Value-Added Tax (VAT) Return] — This return shall be filed not later than the 25th day following the close of each taxable quarter, whether calendar quarter or fiscal quarter.

This return is also available in the Electronic Filing and Payment System (eFPS), so eFPS filers/users shall use the eFPS in filing of this return and payment of the corresponding tax due thereon.

Likewise, the new Offline eBIRForms Package v7.9.5 contains the following enhancements:

1. Inclusion of all Alphanumeric Tax Codes (ATCs) of BIR Form No. 2551Q (Quarterly Percentage Tax Return) to BIR Form No. 0605. This is to allow taxpayers to pay their Percentage Taxes in advance.
2. The new Treaty Code, BN for Brunei, has been added in BIR Form No. 1601-FQ.
3. Bug fixes for the following BIR Forms: 0619-E, 1800v2018, 1801v2018 and 2000- OTv2018.
4. New ATCs have been added in BIR Form Nos. 0605, 1600-VT, 1601-EQ, and 1601-FQ.

Circularizing the implementing rules and regulations of RA No. 12079, entitled “An Act Creating a VAT Refund Mechanism for Non-Resident Tourists, Adding a New Section 112-A to the National Internal Revenue Code of 1997, as Amended, for the Purpose”

Revenue Memorandum Circular No. 53-2025
Issued on June 4, 2025

The IRR establishes the guidelines, procedures, and standards for implementing the VAT Refund System (“VRS”) for tourists in the Philippines. It also defines the roles of government agencies, VRS operators, and accredited stores.

Requisites for Availment

A tourist shall be eligible to receive a refund of the VAT paid on purchased goods if the following requirements are met:

1. 1. The goods are purchased in person by the tourist from duly accredited stores;
   2. The goods are physically taken out of the Philippines by the tourist as accompanied baggage, within sixty (60) days from the date of purchase; and
   3. The value of the goods purchased per single transaction is equivalent to at least Three Thousand Pesos (P3,000.00) covered by a single invoice: Provided, That the amount shall be adjusted using the cumulative inflation for the past three (3) years as published by the Philippine Statistics Authority (PSA).

Filipinos with dual citizenship shall be eligible to avail a VAT refund if they use their foreign passport in entering and exiting the Philippines and they fall under the definition of “tourist” in this IRR.

Sales to citizens and residents of the Philippines, and foreign nationals residing in the country (e.g., diplomats, consular officers, expatriates, and VAT-exempt foreign nationals) are not eligible for VAT refund.

Accreditation of Stores

VAT-registered retail establishments intending to participate in the VRS shall undergo accreditation with the VRS operator. For this purpose, the establishment shall submit the following requirements:

• • BIR Certificate of Registration;
  • Registration with the Department of Trade and Industry or the Securities and Exchange Commission;
  • Any other documents or system requirements as may be prescribed

Clarifying Section 24 of RA No. 12214, entitled “An Act Amending Section 22, 24, 25, 27, 28, 32, 34, 38, 39, 42, 51, 52, 56, 57, 127, 149, 174, 176, 179, 190, 199, and 258 of Republic Act No. 8424, Otherwise Known as the Tax Code, As Amended, and For Other Purposes”

Revenue Memorandum Circular No. 55-2025
Issued on June 10, 2025

The circular provides for the following amended penalties:

1. Any person carrying on business without registration as required under Section 236 of the Tax Code, shall be subject to the following:

• General Rule:
  • • Fine: ₱5,000 to ₱20,000
    • Imprisonment: 6 months to 2 years

• For persons engaged in the business of distilling, rectifying, repacking, compounding, or manufacturing any article subject to excise tax

• • • Fine: ₱30,000 to ₱50,000
    • Imprisonment: 2 years to 4 years

Amending Certain Provisions of RMC No. 92-2024 on the Payment and Affixture of Loose Documentary Stamps to Taxable Documents prior to notarization to align with Sections 188, 193, and 201 of the Tax Code

Revenue Memorandum Circular No. 56-2025
Issued on June 10, 2025

This Circular is issued to amend and align the provisions on the payment and affixture of loose documentary stamps to taxable documents prior to notarization.

A notary public shall only add his/her jurat or acknowledgment to any document subject to documentary stamp tax when the required documentary stamps have been affixed and cancelled, pursuant to Section 201 of the Tax Code.

Modification of ATC of Selected Revenue Source under R.A. No. 12066, otherwise known as the CREATE MORE Act

Revenue Memorandum Order No. 26-2025
Issued on May 20, 2025

To facilitate the proper identification and monitoring of payment for creditable withholding tax pursuant to the issuance of RR No. 5-2025, in relation to RA No. 12066, otherwise known as Corporate Recovery and Tax Incentives for Enterprises Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act, the following ATCs are hereby modified:

Creation of ATC for VAT on Local Sales of Registered Business Enterprises (RBEs)

Revenue Memorandum Order No. 27-2025
Issued on May 20, 2025

To facilitate the proper identification and monitoring of payment for VAT on local sales of RBEs as provided in Section 295(D) of the Tax Code as amended by RA No. 12066 and as implemented by RR No. 9-2025, the following ATC is hereby created:

Creation, Modification and Dropping of ATC of Selected Revenue Source under RA No. 12214 (Capital Markets Efficiency Promotion Act) and RA No. 11491 (Bayanihan to Recover as One Act)

Revenue Memorandum Order No. 32-2025
Issued on June 30, 2025

To facilitate the proper identification and monitoring of payment for percentage tax pursuant to the issuance of Republic Act No. 12214, otherwise known as Capital Markets Efficiency Promotion Act and R.A. No. 11494 (Bayanihan to Recover as One Act), the following ATCs are hereby created, modified and dropped:

A. The following ATC is hereby created:

B. The following ATC is hereby modified:

C. The following ATCs are hereby dropped:

SEC Issuances

EAMEND System Update – Inclusion of Applications for Increase of Authorized Capital Stock

Revenue Memorandum Circular No. 60-2025
Issued on June 11, 2025

SEC Notice Issued on May 2, 2025

The SEC advised that beginning May 5, 2025, its Electronic Application for Modification of Entity Data (eAMEND) will accept applications for increase of authorized capital stock of domestic stock corporations under its “Regular Application” module. Due to a recent system update, domestic stock corporations will be able to amend their Articles of Incorporation to increase authorized capital stock through the eAMEND portal.

The consideration for shares may involve cash and/or other consideration, such as:

1. • Conversion of advances/liabilities to equity;
   • Stock dividend;
   • Parcels of land (titled), building, and/or condominium units;
   • Parcels of untitled land;
   • Inventories, furniture and/or personal properties;
   • Heavy equipment;
   • Shares of stock;
   • Motor vehicle;
   • Sea vessel or aircraft;
   • Intangibles; and/or
   • Net assets.

Applications for increase of authorized capital stock, when combined with other complex applications under the jurisdiction of the Financial Analysis and Audit Division (FAAD)–such as, but not limited to, decrease of authorized capital stock, merger, reclassification/ declassification/ conversion of shares, and/or change in par value—shall be filed via the appropriate FAAD email address.

Discontinuation of the use of the Joint Certification for Applications to Increase of Capital Stock by way of Cash Infusion

SEC Notice Issued on June 25, 2025

Due to the low rate of availment and adoption by the transacting public, the SEC discontinued the use of the Joint Certification for Applications to Increase of Capital Stock by way of Cash Infusion.

Transfer of location for receiving of hard copies and releasing of signed certificates for FAAD Applications

SEC Notice Issued on June 30, 2025

Effective 30 June 2025, the receiving of hard copies and releasing of signed Certificates for applications processed and approved by the Financial Analysis and Audit Department (FAAD) shall be conducted at the FAAD Office: