Dear Valued Clients,

 
Please see the recent issuances of the following government agencies:
 
A. TAXATION 
 
1. Bureau of Internal Revenue – Revenue Regulation No. 20-2020 – Amends R.R. No. 6-2013 in relation
to R.R. No. 6-2008 relative to the imposition of tax for the sale, barter, exchange or other disposition of
shares of stock not traded through the Local Stock Exchange.

R.R. No. 20-2020 amends the rules for determining the fair market value of shares of stock not listed and
traded in the local stock exchanges applying the following rules:

Type of Stock Rule

Common shares of stock Prima facie FMV shall be the book value based
on the latest available Financial Statements duly
certified by an ICPA prior to the date of the sale,
but not earlier than immediately preceding
taxable year
Preferred shares of stock FMV shall be the liquidation value which is equal
to the redemption price of the preferred shares
as of the Balance Sheet nearest to the transaction
date, including any premium and cumulative
preferred dividends in arrears.
In case there are both common and preferred How to compute FMV of Common share.
shares
1) Formula for computing Book Value:
(Total Equity – Liquidation Value of
Preferred Shares) / No. of outstanding
common shares as of the Balance Sheet
nearest to the transaction date.

2) For this purpose, the book value of the

common shares or the liquidation value
of the preferred shares need not be
adjusted to include any appraisal surplus
from any property of the corporation not
reflected or included in the AFS in order
to determine the FMV of the shares of
stock.

 
2. Bureau of Internal Revenue – Revenue Memorandum Circular No. 83-2020 – Guidelines on the tax
implications of measures being implemented to prevent the spread of COVID-19 on cross-border
matters. This Memorandum Circular seeks to address the issues and concerns of taxpayers, especially
the unplanned tax implications and potential new burdens arising from the effects of COVID-19.
The RMC discussed the tax implications on individuals or foreign companies affected by safety measure
imposed by the Government to contain COVID-19. As summarized:

Income from Employment

Employment income of non-resident employees exercising employment in the Philippines shall not be
subject to tax in the Philippines if the following conditions concur:

1. Employee has not been present in the Philippines for more than 183 days (more than 120 if
resident of Poland; at least 90 days if resident of USA) in aggregare in the year of income, fiscal
year, calendar year, or any 12-month period;
2. Employee’s remuneration is paid by or on behalf of a non-resident employer; and
3. Employee’s remuneration is not deductible against the profits of a permanent establishment
which the foreign employer has in the Philippines.

Special Tax Residency Rules

1. A non-resident who is prevented from leaving the Philippines on his/her scheduled departure
date as a result of travel restrictions imposed by the Government will not be regarded as being
present in the Philippines for tax residence purposes for the period after the scheduled day of
departure.
2. The failure shall be considered as a “force majeur” provided that the non-resident leaves the
Philippines as soon as the circumstances would permit i.e. lifting of travel restrictions and/or
quarantine measures.
3. Determining whether a taxpayer is a resident for tax purposes is a case to case basis.

Inadvertent Creation of Permanent Establishment (PE)

Home Office PE

1. Employees of a foreign enterprise in the Philippines who may have to work at home in
compliance with the strict home quarantine measures would not create a PE of the foreign
enterprise in the Philippines because the conduct thereof lacks a certain degree of permanency
and the home office is not at the disposal of the foreign enterprise. The intermittent conduct of
business of the foreign enterprise at the home office of its employees in the Philippines due to
COVID-19 will not make such home office at the disposal of the enterprise.

2. If the home office is used on a continuous basis even after the COVID-19 crisis, then the home
office may be considered to be at the disposal of the enterprise.

Construction PE

1. Temporary interruptions of construction activities due to COVID-19 should be included in

computing the duration of a site and in determining whether such construction site constutes a
PE

Dependent Agent PE
 1. The effects of COVID-19 will not result in the creation of a PE if the following requirements are
met:

a. The non-resident foreign company did not have a permanent establishment in the
Philippines before the spread of COVID-19;
b. There are no other changes in the company’s circumstances except for the extended stay of
its employees, partner, or agent in the Philippines due to travel restrictions; and
c. The employee, partner or agent should leave the Philippines as soon as the circumstances
would permit.

Documentary Requirements

The individual or company affected shall submit to the BIR the documents enumerated in the RR to
prove that the extended presence in the Philippines was due to COVID-19 related travel restictions.

B. CORPORATE
 
1. Securities and Exchange Commission - Notice dated August 27, 2020 on SEC Certification
Examinations Guidelines – Provides the health and safety measures to be followed by examinees for SEC
Certifications.

2. Securities and Exchange Commission - Notice dated August 27, 2020 on SEC Contact Centers –
Provides the email addresses and interim hotline numbers where the public may reach the SEC offices
for queries and other concerns during office hours.
  
C. LABOR

1. Department of Trade and Industry and Department of Labor and Employment – DTI - DOLE Joint
Memorandum Circular No. 20-04-A– Provides the supplemental guidelines on workplace prevention and
control of COVID-19 in all private establishments regardless of economic activities, including those inside
special economic zones and other areas under the jurisdiction of Promotion Agencies.

The Joint Memorandum Circular discuss (i) the work and safety measures to be strictly followed in the
workplace; (ii) management of asymptomatic and symptomatic employees in the workplace; (iii)
establishment of Occupational Safety and Health Committees; (iv) Notification and reporting of COVID-
19 positive employees; (v) Disinfection and closure of workplaces; and (vi) Use of leave of absences and
entitlements of COVID-19 positive employees.

2. Department of Labor and Employment – DOLE Department Order No. 214 – Provides the guidelines
on processes and proceedings before the Secretary of Labor and Employment, Bureaus, and Regional
Offices in areas under community quarantine. As summarized:

Prescriptive Period

1. Prescriptive period for actions, claims, petitions, complaints, processes and other proceedings
before the Secretary of Labor and Employment, Bureaus, and Regional Offices is lifted in all
 areas under community quarantine except those that are still under ECQ, MECQ or hard/total
lockdown.
2. Prescriptive period on areas still under ECQ, MECQ or hard/total lockdown shall run when the
ECQ, MECQ or hard/total lockdown is lifted.
3. Prescriptive period in areas reverted under ECQ or MECQ shall be automatically interrupted
from the date of declaration and shall begin to run again when the ECQ, MECQ or hard/total
lockdown is lifted.

Modes of Filing

1. Through use of courier or postal services, regional website, electronic mail and other digital
platforms.
2. Can be done through personal filing subject to observance of minimum health standards and
protocols.

Application for Registration under DO 174-17, Permit to Operate Mechanical Equipment and
Certificate of Electrical Wiring Installation; Alient Employment Permit; and Private Employment
Agency License

For your information and guidance.