Congress of Philippines has extended the tax incentives previously provided under the Bayanihan to Recover as One Act (Bayanihan 1), in relation to COVID-19, by signing into law the Bayanihan to Heal as One Act (Bayanihan 2). Section 5 of the updated Act, related to the retirement benefits, has brought specific changed to tax calculations.
Tax exemption on retirement benefits available under Bayanihan 2:
Retirement benefits received by officials and employees of private firms from 5 June 2020 until 31 December 2020 are exempt from income tax, subjected to following conditions:
- Any re-employment of such officials or employees in the same firm, within succeeding 12 month period, shall be considered as proof of non-retirement and shall be subject the benefits received to 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 Republic Act No.8424
- The employer is obligated to refund the taxes withheld to the retired employee and the employer, in turn, shall adjust/deduct the said over-remittance of taxes (to the BIR) from the its subsequent monthly remittance return of income taxes withheld on compensation (BIR Form No. 1601C)
B. Statutory Compliance Release Date: September 14, 2020
C. Effective Date: June 5, 2020 to December 31, 2020
The BIR has issued RMC No. 83-2020 to explain the rules and clarifications regarding the extended stay of cross-border workers who have been stranded/quarantined in the Philippines due to the implementation of COVID-19 quarantine restrictions.
As per RMC an individual who is prevented from leaving the Philippines on his scheduled day of departure due to travel restrictions will not be regarded as being in the Philippines for the period after the scheduled day of departure, provided that the individual leaves the Philippines as soon as the circumstances would permit.
In all cases, applications for relief from double taxation should be supported with records outlining the circumstances of the taxpayer's extended stay. Furthermore, the individual or company concerned must submit to the BIR the relevant documents as specified in the circular as proof that the extended presence in the Philippines is due to COVID-19 restrictions.
The above update is for information only and does not have any product impact.
B. Statutory Compliance Release Date: August 17, 2020
C. Effective Date: August 17, 2020
A circular has been issued by Philhealth authorities with the objective of implementing a uniform understanding on the collection of contribution premium for the Overseas Filipinos Workers (OFW) in context with the circular 2019-009.
The circular covers all Filipinos living and working abroad including those on-vacation or those waiting for documentation to National Health Insurance program.
The circular provides the below understanding:
- The premium of overseas Filipinos shall be computed based on monthly income to be paid in Philippine peso equivalent, in accordance with terms of payment and corresponding due dates as specified by the corporation.
- For uniform application, the conversion rate will be guided by daily reference exchange rate issued by Bangko Sentral ng Philipinas (BSP) through its reference exchange rate bulletin. Other currencies not included in the BSP shall be converted first to US Dollar before converting it to Philippine Peso as available at online conversion sites.
- After determination of the premium the member has the option to pay annual premium in full or pay the initial premium then quarterly thereafter.
- Calendar Year (CY) 2020 is considered as transition year. Payment of PHP 2,400 shall serve as initial payment. The member can opt to pay the balance in full or in quarterly payments. Payment settlement period is one year.
- By January 1, 2021, the minimum acceptable initial payment is a 3-month premium based on the prescribe rate at the time of payment. Still the member has the option to pay the balance in full or in quarterly payments; payment period is one year.
- The member who fails to pay the premium after the due date set by the corporation shall berequire paying all the missed contribution with monthly compound interest.
Frequency and mode of payment
While the computation of premium is monthly the payment shall be made every 3-month, 6-month or full 12-month period. For sea based OFW’s, the payment is to be done monthly through deduction from salary by their Employers.
Further all the members are required to update their member record by submitting Philhealth member Registration Form.
B. Statutory Compliance Release Date: April 22, 2020
C. Effective Date: May 08, 2020
Due to the strict community quarantine to manage the COVID-19 situation Social Security Commission has issued a circular for releasing guidelines on Moratorium on Short-term Loans.
Coverage of Circular
Members with Salary Loan, Calamity Loan, Emergency Loan, Restructured Loan under the Loan Restructuring Program (LRP) and Educational Assistance Loan (EAL) in the entire Philippines are covered by circular.
A moratorium will be applicable from February to April 2020, without interest and penalties. According to circular for employed member-borrowers, the employer will immediately cause the temporary stoppage of salary deduction upon the effectivity of this circular. And employer, without notice of SSS, will resume loan deduction after the end of the moratorium period.
However, any remittance made during the moratorium period will be applied to the outstanding balance of the loan following the order of priority in the application of payments.
- Members must be residents of Philippines.
- The Salary Loan, Calamity Loan, Emergency Loan must be granted from January 01, 2018, to March 16, 2020
- The Loan Restructuring Program (LRP) and Educational Assistance Loan (EAL) must be currently amortizing means the last amortization month is not earlier than February 2020.
- Members must have not been granted any final benefit.
B. Statutory Compliance Release Date: March 31, 2020
C. Effective Date: February 01, 2020 to April 30, 2020
Pag-IBIG is offering a three-month moratorium to its member-borrowers to help defray their expenses during the enhanced community quarantine being implemented by the government in its fight to contain COVID-19 virus.
Housing loan, Multi-purpose Loan, and Calamity Loan borrowers with payments due on March 16, 2020, until June 15, 2020, are eligible to apply for the moratorium. Presently, only those residing in Luzon and the National Capital Region can avail of the offer.
Pag-IBIG Fund has started receiving application in the region Metro Manila as well as the rest of the island of Luzon of the Philippines. Members may submit their application at the nearest Pag-IBIG fund branch or shall apply online on the Pag-IBIG website (https://www.pagibigfund.gov.ph/index.html) and click the “Virtual Pag-IBIG” under the e-services until June 15, 2020.
Post the submission, employees will get a reference number of the application which needs to be provided to the employer. Post 7-20 days approval will also be shared by Pag-IBIG which also needs to be shared with the employer.
In case the employer has made any remittance during the moratorium period, it shall be considered as an advance payment for the month of July 2020.
B. Statutory Compliance Release Date: March 18, 2020
C. Effective Date: March 16, 2020 to June 15, 2020
The submission of BIR form 1604 CF including the alphabetical list of employees was extended from Jan. 31, 2020 to Feb. 28, 2020. However, the electronic formats of these forms are not yet available in the Electronic filing and Payment System. (e FPS) and Electronic Bureau of Internal Revenue Forms (e BIR Forms) as of this date due to some technical issues.
In order to address this concern, the old forms the Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes (BIR Form No. 1604 CF). Accordingly, the Alphalists of these returns shall be submitted through the existing Alphalist Data Entry and Validation Module Version 6.1.