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8box Solutions Inc.


Contact Number: 09369340340

REVENUE MEMORANDUM CIRCULAR NO. 20-2021 issued on February 9, 2021 circularizes the copy of Republic Act (RA) No. 11494 (An Act Providing for COVID-19 Response and Recovery Interventions and Providing Mechanisms to Accelerate the Recovery and Bolster the Resiliency of the Philippine Economy, Providing Funds Therefor, and for Other Purposes).

   As part of the COVID-19 Response and Recovery Interventions, the exemption from import duties, taxes, and other fees for manufacture or importation of critical equipment or essential goods shall be determined by the Bureau of Customs and the Bureau of Internal Revenue (BIR), respectively.

   Relative to the provision of grants for applicable regulatory fees to critically impacted businesses in the transportation industry, including transport cooperatives (per Section 4(gg)(2) of the Act), the grants may include reductions in (i) rates through the removal of local taxes as may be applicable, and ii) fees and charges imposed by any regulatory agency and LGU. Such grants shall be payable, respectively to the BIR, the LGUs and relevant regulatory agencies: Provided, that the grant shall be chargeable against the fund created for the purpose of implementing the said subsection: Provided, further, that any critically impacted business may avail of the grant for a period of not more than six (6) months.

Section 4(tt) of the Act also provides for the moving of statutory deadlines and timelines for the filing and submission of any document, the payment of taxes, fees, and other charges required by law, and the grant of any benefit, in order to ease the burden on individuals under community quarantine. The loan term extensions or restructuring provided under Section 4(uu) of the Act shall be exempt from Documentary Stamp Taxes, except for interbank loans and bank borrowings.

   Personal computers, laptops, tablets or similar equipment appropriate for use in schools, donated for distribution to public schools regardless of level, including SUCs and vocational institutions under TESDA, are exempt from import duties and taxes, including Donor’s Tax, per Section 4(zzz) of the Act.

   Notwithstanding the provision of existing laws to the contrary, the net operating loss of the business or enterprise for taxable years 2020 and 2021 shall be carried over as a deduction from gross income for the next five (5) consecutive taxable years immediately following the year of such loss: Provided, that Section 4(bbbb) shall remain in effect even after the expiration of the Act.

   Per Section 5 of the Act, retirement benefits received by officials and employees of private firms; whether individual or corporate, from June 5, 2020 to December 31, 2020 shall be excluded from gross income and shall be exempt from taxation. Provided, that any re-employment of such official or employee in the same firm within the succeeding twelve (12)-month period, shall be considered as proof of non-retirement and shall subject the benefits received to appropriate taxes. In addition to the payment of appropriate taxes, any person who willfully evades or defeats any imposable tax under this Section shall be criminally liable and penalized under Section 255 of RA No. 8424, as amended.

   The tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded Through Initial Public Offering [per Section 127(B) of the National Internal Revenue Code (NIRC) of 1997, as amended], is repealed per Section 6 of the Act.

   Per Section 11 of the RA, BIR collections from the following are included among the sources of funding identified in RA No. 11494 for the funding of the subsidy and stimulus measures identified in the Act to address the COVID-19 pandemic:

   a. Excess revenue collections in any one of the identified tax or non-tax revenue sources from its corresponding revenue collection target, as provided in the FY 2020 Budget of Expenditures and Sources of Financing (BESF)

   b. New revenue collections or those arising from new tax or non-tax sources which are not part nor included in the original sources included in the FY 2020 BESF

   c. Amounts derived from the five percent (5%) Franchise Tax on the gross bets or turnovers or the agreed pre-determined minimum monthly revenues from gaming operations, whichever is higher, earned by offshore gaming licensees, including gaming operators, gaming agents, service providers and gaming support providers

   d. Income Tax, Value Added Tax, and other applicable taxes on income from non-gaming operations by offshore gaming licenses, operators, agents, service providers and support providers

     The tax shall be computed on the peso equivalent of the foreign currency used, based on the prevailing official exchange rate at the time of payment, otherwise the same shall be considered as a fraudulent act constituting under-declaration of taxable receipts or income, and shall be subject to interests, fines and penalties under Sections 248(B), 249(B), 253 and 255 of the NIRC of the Philippines.

        After two (2) years or upon determination that the threat of COVID-19 has been successfully contained or abated, whichever comes first, the revenues derived from Franchise Taxes on gross bets or turnovers and income from non-gaming operations shall continue to be collected and shall accrue to the General Fund of the Government. The BIR shall implement closure orders against offshore gaming licenses, operators, agents, service providers and support providers who fail to pay the taxes due, and such entities shall cease to operate.