OMV & Co.

BREAKING NEWS

LUMAGUI: BIR FILES CRIMINAL CASE AGAINST COSMETIC COMPANY WITH P1.6B TOTAL TAX LIABILITY UNDER ITS RUN AFTER FAKE TRANSACTIONS (RAFT) TASK FORCE

Nagsampa po tayo ng criminal case sa ilalim ng Run After Fake Transactions (RAFT) Task Force sa Department of Justice (DOJ) noong Feb 1, 2024. Sinampa po natin ito laban sa isang kilalang cosmetics company, ang Ever Bilena Cosmetics, Inc. na nahuling gumagamit ng ghost receipts mula sa mga ghost companies. Ayon sa imbestigasyon ng task force, mayroong higit kumulang na P1.6B na tax liabities ang kumpanyang ito.

Nilabag ng Ever Bilena ang Section 254 - Tax Evasion, Section 255 - Failure to Supply Correct and Accurate Information in the Income Tax Return and Value-Added Tax (VAT) Returns, Section 267 - Perjury at Section 257 - Making False Records or Report under the National Internal Revenue Code of 1997, as amended.

Ang RAFT program ay isa po sa ating pangunahing progama sa "Four Pillars of Good Governance in BIR" na Fearless and Aggressive Enforcement Activities.

“The RAFT taskforce will prioritize big fishes, big companies that use syndicates as a means of evading their taxes. This company has P1.6B in total tax liability. This year, we are continuously filing criminal cases against these perpetrators and we will not cease in our all-out-war against the syndicate until we totally eradicate this tax-evasion scheme,”
----Commissioner Romeo D. Lumagui Jr.

Our dear taxpayers,

We invite you in our Free Webinar on Submission of BIR Form 2316 and Other Tax Updates

👉Click this link to join zoom meeting
https://us02web.zoom.us/j/87038040417?pwd=UlQ1OEN4dmdFYnFNZGZwWkUzZkpuUT09

Meeting ID: 870 3804 0417
Passcode: rdo32316

🗓 January 16, 2024 (TUESDAY)
🕑 2:00 PM

Learn from our competent speakers. See you!

Our dear taxpayers,

We invite you in our Free Webinar on Walkthrough on Online Registration and Update System (ORUS)

👉Click this link to join zoom meeting
https://us02web.zoom.us/j/83304335312?pwd=YzFGbHh3MU1PZ1hYaDc1NU42Q2d6dz09

Meeting ID: 833 0433 5312
Passcode: rdo3ORUS

🗓 January 12, 2024 (FRIDAY)
🕑 10:00 AM

Learn from our competent speakers. See you!

MAGANDANG BALITA

Hindi na po kailangang bayaran ang ANNUAL REGISTRATION FEE! Ito po ay alinsunod sa Rebuplic Act 11976 o Ease of Paying Taxes Act.

Abangan po ang aming advisory ukol dito.

Ease of Paying Taxes Act

Just a moment...

Our dear taxpayers,

We invite you in our 2nd Free Webinar on

📍Compliance Requirements:
Inventory List
Tenant's Profile
BIR Form 2316
TCVD/Tax Mapping
Alphalist Data Entry

🗓 December 20, 2023 (WEDNESDAY)
🕑 2:00 PM

👉Click this link to join zoom meeting
https://us02web.zoom.us/j/87827750248?pwd=dzhpQjlDbXVCYkdtMTVaaGloUC9DUT09

Meeting ID: 878 2775 0248
Passcode: RD3_CompRe

Learn from our competent speakers. See you!

All audit and other field operations of the BIR are SUSPENDED for the period December 16, 2023 to January 7, 2024 (per Revenue Memorandum Order No. 39-2023).

For full text of the RMO, click this link: https://bit.ly/480cuOY

SC: Extended 10-Year Tax Assessment Period Applies Only to Tax Returns with Intentional Errors |

Abandoning its previous ruling in the 1974 case of Aznar v. CTA, the Supreme Court has ruled that the extraordinary 10-year tax assessment period applies only to false tax returns that contain deliberate or willful misstatements.

Thus ruled the Supreme Court En Banc, in a Decision penned by Justice Henri Jean Paul B. Inting, granting the petition for review on certiorari filed by McDonald’s Philippines Realty Corporation (MPRC). The petition challenged the rulings of the Court of Tax Appeals (CTA) En Banc ordering MPRC to pay the amount of PhP9,206,213.06 in basic deficiency Value-Added Tax (VAT) for calendar year (CY) 2007, among others.

In granting MPRC’s petition, the Court held that only intentional errors in the tax return may justify the application of the 10-year assessment period.

The Court declared that its ruling in Aznar v. CTA which applied the extraordinary 10-year assessment period to false returns in general, regardless of whether the deviation is intentional or not, is now abandoned.

Rather, consistent with Section 222(a) of the 1997 Tax Code, the extraordinary 10-year assessment period applies to a false return when: (1) the return contains an error or misstatement; and (2) such error or misstatement was deliberate or willful, all of which lie on the CIR to establish with clear and convincing evidence.

However, this burden shifts to the taxpayer when there is prima facie evidence of falsity or fraud under Section 248(B) of the 1997 Tax Code such as when (1) there is an understatement/underdeclaration of sales, receipts, or income or overstatement/overdeclaration of expenses or other deductions, and (2) the misstatement is substantial, such that it exceeds the corresponding amount declared in the return by 30%.

The Court further stressed that the assessment notice issued to the taxpayer must comply with two sets of due process requirements. Under the first due process requirement, the notice must clearly state that (a) the extraordinary prescriptive period is being applied and (b) the bases for the allegations of falsity or fraud.

Under the second due process requirement, the tax authorities must not have acted in a manner that is inconsistent with the invocation of the extraordinary prescriptive period or have otherwise misled the taxpayer that the basic period will be applied.

Applying the foregoing to MPRC, the Court found there was no prima facie evidence of a false return since the misstatement did not meet the 30% threshold as required under Section 248(B) of the 1997 Tax Code. Hence, the burden is on the CIR to establish that MPRC filed a false return with intent to evade tax.

Read more at https://sc.judiciary.gov.ph/sc-extended-10-year-tax-assessment-period-applies-only-to-tax-returns-with-intentional-errors/.
Read the Decision in full at https://sc.judiciary.gov.ph/247737-mcdonalds-philippines-realty-corporation-vs-commissioner-of-internal-revenue/.

Hi Taxpayers!

We cordially invite everyone to our Webinar on the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act and Updates on Estate Tax Amnesty.

It will be on December 6, 2023 (Wednesday) at 10:00 AM through Zoom Meeting.

See you there!!