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4 Train Law Updates 2020: Everyone Must Know

Four train law updates 2020. Updates on application on registrations, REIT act of 2009, New Central Bank Act (RA 7653) and etc you must know.


It’s been two years since the Philippine government imposes the train law. Are you looking for train law updates 2020? In the previous article “Latest Train Law Issuance 2019,” I’ve discussed significant changes in train law taxes. Some of these adjustments are the new rates on life insurance, creditable withholding tax on top withholding agents. Also, VAT exempt for sale of Drugs for Diabetes, High-Cholesterol, and Hypertension and estate tax filing and installment payments. If you haven’t read these updates, make sure not to miss out on those train law updates 2019.



How about this year 2020? We’ll discuss three tax updates on train law 2020. Here are the three (3) significant updates that you should know. First, application for Registration of BIR Forms using 1902 and 1905 for those individuals who earned compensation income. Second, the implementation of the New Central Bank Act and Lastly, the revised Real Estate Trust Fund Act of 2009. 

Updates on Application for Registration of BIR Form 1902 and 1905.

What should you know if you get a new employee in a private company and no TIN? In the previous issuance, states, “new employees shall accomplish the Application for Registration for Individuals Earning Compensation Income and submit the same to the employer. While the employer shall file the fully accomplished registration for employees registering for the first time to the BIR within ten (10) days from the date of employment or secure the TIN of new employees using the e-Registration system.”



However, this year 2020 is requiring all employers to accomplish in a triplicate copy of BIR Form 1902 if the employee does not have existing TIN.  These three (3) copies as Original form provided to RDO while the employer and employee will keep the rest of the prints. Both employee and employer shall accomplish this application. 

If there are any changes in the information of the employee, such as multiple employment status and the amount of compensation income, the employee should apply the BIR form No. 1905. It must be duly stamped received by the RDO where he is registered, not where the employer was registered, and submit to his employer. Necessary adjustment on the withholding tax of the employee based on the updated information upon receiving the copies from the employee.

BIR grants Tax Exemption to Central Bank of the Philippines

On January 15, 2020, issued the implementation of the New Central Bank Act as known as An Act Amending Republic Act No. 7653. This R.A. No 11211 restores the central bank’s authority to issue debt papers as part of its regular transactions. Employing this, it gives greater flexibility in knowing the timing and sizes of its monetary operations.



According to Article I, as the New Central Bank Act (RA 7653), Bangko Sentral ng Pilipinas is exempted from paying all National Taxes, provincial, municipal, and city taxes, fees, charges, and assessment for five years from the approval of this Act. However, on this latest issuance 2020, all income derived from its governmental functions is not subject to any national internal revenue tax. These incomes include from its activities or transactions in the exercise of its supervision over the operations of banks and its regulatory and examination powers over non-bank financial institutions performing quasi-banking functions, money service businesses, credit granting, and payment system operations.  

Besides, income in pursuits of its primary objective to maintain price stability conducive to a balanced and sustainable growth of the economy, and promotion and maintenance of monetary and financial stability and convertibility of the peso are not subject to tax. However, other incomes not mentioned above are subject to applicable internal revenue taxes. 

Real Estate Investment Trust (REIT) Act of 2009

Are you familiar with Real Estate Investment? REIT are listed companies stock corporation incorporated to own income-generating real estate assets. Some of these income-producing estates are condominiums, shopping centers, hotels, office spaces, resorts, and hospitals. Furthermore, they earned also from infrastructure facilities such as tollways, airports, and highways. Here are the tax updates on the REIT Act of 2009 this year, 2020.

  1. Decreasing the minimum public ownership requirement (MPO) to at least one-third of the outstanding capital of the REIT. Provided at least one thousand shareholders given to the public and owning at least fifty (50) shares. 
  2. Along with this revision, reinvestment is necessary for any sponsor or promoter who contributes to any income-generating Real Estate to a REIT. This reinvestment shall be made within one (1) year from the date of receipt of proceeds or money by the Sponsor or promoter. 
  3. Documentary Stamp Tax on REIT. Any transfer of real property to REITs, including the sale or shipment of all security interests, is subject to fifty percent (50%) of the applicable Documentary stamp tax (DST). Documentary Stamp Tax on the transfer of real property involving stocks that represent interest is seventy-five centavos (0.75) on each two hundred pesos or fractional part thereof of the par value of the capital. However, if the stock has no par value, DST is subject to 25% of the DST paid on the issuance of the original stock.
  4. Value Added Tax on REIT. Changing ownership to a REIT in exchange for its shares is exempted from Value-added tax. 

Other Train Law Updates 2020

Any income derived from the sale of gold is not part of the gross income. It is also exempt from income tax as well as from withholding tax. These include the sale of gold to the BSP by registered SSMs and accredited traders and vice versa.




No excise tax is imposed on the sale of gold to the BSP by registered Small Scale Miners (SSMs) and accredited traders and vice versa. If the seller of gold paid the tax, he might claim a refund from the government.

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LATEST TAX ISSUANCES!

Revenue Memorandum Circular No. 72-2020 amends RMC No. 36-2020 relative to the removal of requirement for submission of photocopies of documents evidencing credit extensions and credit restructurings granted by covered institutions during ECQ. RMC 72-2020

Revenue Memorandum Circular No. 73-2020 publishes the full text of CSC Memorandum Circular No. 14, s. 2020 re: Interim Guidelines on Appointments and Other Human Resource Actions for the Period of State of Calamity Due to COVID-19 Pandemic. RMC 73-2020/Annex

Revenue Memorandum Circular No. 71-2020 circularizes the advisory for the adoption of fast-track measures during the COVID-19 state of calamity issued by the Anti-Red Tape Authority through its Advisory No. 01 Series of 2020. RMC 71-2020/Annex A

Revenue Memorandum Circular No. 70-2020 circularizes the List of Expired Tax Credit Certificates. RMC 70-2020/Annex A

Revenue Memorandum Order No. 23-2020 clarifies the issuance of Authority to Release Imported Goods for VAT Exemption on the sale and importation of prescription drugs and medicines pursuant to Section 1 of RA No. 11467, further amending Section 109 (AA) of the NIRC of 1997, as amended, and as implemented in Revenue Regulations No. 18-2020. ​RMO 23-2020

Revenue Regulations No. 19-2020 prescribes the use of the new BIR Form No. 1709, replacing Form No. 1702H, Series of 1992.​ RR 19-2020/Annex A

Revenue Regulations No. 18-2020 implements Section 1 of Republic Act (RA) No. 11467, further amending Section 109 (AA) of the NIRC of 1997, as amended by RA No. 10963 (TRAIN Law), providing for VAT Exemption on the sales and importation of drugs and medicines prescribed for diabetes, high cholesterol, hypertension, cancer, mental illness, tubercolosis and kidney diseases. RR 18-2020

TAX DEADLINE TODAY!

2550M (Monthly VAT Declaration) – eFPS Filers under Group D

23 Thursday
e-FILING
2550M (Monthly VAT Declaration) – eFPS Filers under Group C
The month of June 2020

24 Friday
e-FILING
2550M (Monthly VAT Declaration) – eFPS Filers under Group B
Month of June 2020

25 Saturday
SUBMISSION
Quarterly Summary List of Sales/ Purchases/Importations by a VAT Taxpayers – Non-eFPS Filers
TQ ending June 30, 2020
Sworn Statements of Manufacturer’s or Importers’ Volume of Sales of each particular Brand of Alcohol Products, Tobacco Products & Sweetened Beverage Products
TQ ending June 30, 2020
e-FILING/FILING & e-PAYMENT/PAYMENT
2550Q (Quarterly VAT Return) & 2551Q (Quarterly Percentage Tax Return) – eFPS & Non-eFPS Filers
CQ ending June 30, 2020
e-FILING & e-PAYMENT
2550M (Monthly VAT Declaration) – eFPS Filers under Group A
Month of June 2020
e-PAYMENT
2550M (Monthly VAT Declaration) – Group E, D, C & B
Month of June 2020

30 Thursday
REGISTRATION
Computerized Books of Accounts & Other Accounting Records in Electronic Format
FY ending June 30, 2020
SUBMISSION
Inventory List
FY ending June 30, 2020
Required Hard Copies of Financial Statement & Scanned Copies of Form 2307 to e-Filed 1702 RT, MX & EX

(Original Due Date: June 30, 2020)

FY ending February 29, 2020
Required Hard Copies of Financial Statement & Scanned Copies of Form 2307 to e-Filed 1702 RT, MX & EX FY ending March 31, 2020
e-SUBMISSION

Quarterly Summary List of Sales/Purchases/Importations by a VAT Taxpayers – eFPS Filers
TQ ending June 30, 2020
e-FILING/FILING & e-PAYMENT/PAYMENT

1702Q & Summary Alphalist of Withholding Taxes (SAWT)
FQ ending March 31, 2020

31 Friday
SUBMISSION
Sworn Statement by every Lessee/Concessionaire/Owner or Operator of Mines & Quarry/Processor of Minerals/Producer or Manufacturer of Mineral Products
1st Semester of 2020
Contract of Lease and Information on Lessee/Lessors/Sub-Lessors of Commercial Establishments, Building or Space for Tenants
January 1 to June 30, 2020
e-FILING/FILING & e-PAYMENT/PAYMENT

1601-EQ & 1601-FQ and Quarterly Alphalist of Payees (QAP)
CQ ending June 30, 2020
1602Q & 1603Q
CQ ending June 30, 2020

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