BAYANIHAN II: TAX EXEMPTIONS UNDER RA 11494

I. TAX EXEMPTIONS ON DONATIONS OF IDENTIFIED EQUIPMENT (RR NO. 26-2020)

The regulations seek to implement Section 4 (zzz) of RA 11494, which provides for the tax exemption of all donations of personal computers, laptops, tablets or similar equipment for use in teaching and learning in public schools from donor’s taxes.  The amount of the donation is also deductible from the gross income. Foreign and local donations are also exempt from VAT. 

II. EXEMPTIONS FROM DST OF LOANS EXTENDED OR RESTRUCTURED (RR NO.24-2020)

The regulations seek to implement the exemption from additional documentary stamp taxes of Section 4 (uu) of RA 11494 which cover all extensions of payments and/or maturity periods of all loans falling due, or any part thereof, on or before December 31, 2020, including the extension of maturity periods that may result from the grant of grace periods for the paymentswhether or not such maturity period originally fall due on or before December 31, 2020. It also covers credit restructuring, micro-lending including those obtained from pawnshops, and extensions thereof on or before December 31, 2020.

III. TAX EXEMPTIONS ON INITIAL PUBLIC OFFERING (IPO) OF SHARES OF STOCKS (RR NO. 23-2020)

Under Section 6 of RA 11494, every sale, barter, exchange and other disposition through IPO of shares of stock in closely held corporations shall no longer be subject to tax under Section 127(B) of the National Internal Revenue Code, as amended (Tax Code).

IV. SUSPENDING THE FILING AND NINETY (90) – DAY PROCESSING OF VAT REFUND CLAIMS (RR NO. 27-2020)

Section 4(tt) of RA 11494 moved the statutory deadlines and timeliness 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 any imposed community quarantine.

The 90-day processing of VAT REFUND claims under Section 112 of the Tax Code is also suspended until December 19,2020.

V. 5 – YEAR PERIOD OF ENTITLEMENT TO DEDUCT NOLCO FOR TAXABLE YEAR 2020-2021 (RR NO. 25-2020)

The regulations allows the net operating loss incurred by businesses or enterprise for taxable years 2020 and 2021 to be carried over as a deduction from gross income for the next five (5) consecutive taxable years Immediately following the year of such loss pursuant to Sec. 4(bbbb) of RA 11494.

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