Revised Corporation Code
On 20 February 2019, Republic Act No. 11232, otherwise known as the Revised Corporation Code, was signed into law, repealing the Corporation Code of the Philippines (BP No. 68). It took effect upon its publication on 23 February 2019.
The highlights of the Revised Corporation Code include:
- One Person Corporations (OPCs).
- Perpetual existence of corporations.
- Removal of the minimum capital stock requirement.
- Stricter rules on the use of corporate names.
- Participation in the election of directors/trustees through remote communication or in absentia.
- Exercise of appraisal right when corporate funds are invested for any purpose other than the primary purpose.
- Increase of initial security deposit of foreign corporations that establish branches.
Tax Amnesty Act
On 14 February 2019, Republic Act No. 11213 or the ‘Tax Amnesty Act’ was signed into law, and was published in the official gazette on 18 February. The law grants Estate Tax Amnesty and Tax Amnesty on Delinquencies (TAD).
Under Estate Tax Amnesty, the estate of decedents who died on or before 31 December 2017, with or without assessments duly issued, may avail of the estate amnesty tax rate at 6% of the decedent’s total net estate at the time of death, or 6% of the decedent’s undeclared estate if an estate tax return was previously filed with the Bureau of Internal Revenue (BIR). A minimum estate amnesty tax of 5,000 Philippine pesos (PHP) shall be paid if the allowable deductions applicable at the time of death exceed the value of the gross estate. The return shall be filed within two years from the effectivity on 15 June 2019.
The TAD shall cover all national internal revenue taxes for taxable year 2017 and prior years, which include, but are not limited to: (i) income tax; (ii) withholding tax (WHT); (iii) capital gains tax; (iv) donor’s tax; (v) value-added tax (VAT); (vi) other percentages taxes; (vii) excise tax and documentary stamp taxes collected by the BIR; and (viii) VAT and excise tax collected by the Bureau of Customs.
The TAD may be availed of in the following instances and by paying the corresponding amnesty tax:
|Delinquencies and assessments that have become final and executory||40% of the basic tax assessed|
|Tax cases subject of final and executory judgment by the courts||50% of the basic tax assessed|
|Pending criminal cases with criminal information filed with the Department of Justice or the courts for tax evasion and other criminal offenses under Chapter II of Title X, and Section 275 of the Tax Code, with assessments duly issued||60% of the basic tax assessed|
|Withholding tax agents who withheld taxes but failed to remit the same to the BIR||100% of the basic tax assessed|
Certain immunities and privileges are available to taxpayers who availed of the tax amnesty and have fully complied with the conditions thereof. The TAD availment procedures (i.e. submission of complete documents and payment of the amnesty tax) shall be completed within one year from its effectivity on 24 April 2019.
Strengthening, promotion, and development of start-ups
Republic Act No. 11337, otherwise known as the Innovative Start-up Act, was enacted on 26 April 2019 to provide benefits and programmes to strengthen, promote, and develop the Philippine start-up ecosystem. It provides for the following, among others:
- Creation of the Philippine Start-up Development Programme.
- Benefits and incentives for start-ups and start-up enablers, which include subsidies and grants-in-aid.
- Granting of Start-up Visas to foreign owners, employees, or investors.
- Creation of Philippine Start-up Ecozones.