ISSN 2094-1226/June 2015 Provisional Permit to Use sales machine/receipting software suspended p6 | Amendments to the Foreign Investment Negative List p7 | Reliance on a revoked ruling not a valid defense in a criminal tax case p9 | Improper service makes an assessment notice void p10 Client advisory letter

Isla Lipana & Co. At a glance Insurance Updates, reiterations and clarifications on selected topics 2020 & beyond

Latest on income tax, VAT, and other taxes Foreign government’s investment income is exempt from income tax...... 4 HMOs are subject to VAT on gross receipts without any deductions...... 4 No VAT on tax-free exchange transfers between realtors...... 4 Ownership transfer under CARP not subject to tax...... 5 Foreign diplomats, dependents exempt from VAT...... 5 Amendments on definition of sugar for purposes of advance VAT and business tax ...... 5

Latest on regulatory landscape Verification of eCARs under LRA’s PHILARIS ...... 6 Inter-agency automated verification of real property transfers.... 6 Provisional Permit to Use sales machine/receipting software suspended...... 6 Regular corporations or partnerships cannot use ‘investment’ Tax is under the spotlight. Never before has tax been as part of their names...... 7 more important to governments, taxpayers and other BOC accreditation of PEZA locators...... 7 stakeholders. Tax forms the basis for public spending, Amendments to the Foreign Investment Negative List ...... 7 and governments want larger budgets to achieve IC rules on investment in foreign currency denominated their specific goals. The reputation and well-being of bonds...... 8 companies, including insurance groups, are also being New mandatory forms for non-life insurance companies...... 8 impacted by external perceptions of how they manage Mandatory membership of pre-need companies in the their tax affairs. It’s vital that insurers respond in a clear Pre-Need Federation...... 8 and thoughtful way to a much wider base of stakeholders than ever before, including not only tax authorities Latest on tax assessments/refund procedures and governments, but also regulators, investors, non- Overpaid tax under treaty is refundable...... 9 governmental organisations (NGOs), the media and the Refund claim with ITAD valid if due to tax treaty...... 9 general public. Reliance on a revoked ruling not a valid defense in a criminal tax case ...... 9 At the same time, the importance and challenge of Income from sale of military camps is tax-exempt...... 9 managing tax costs have never been more important. Opting to carry-over excess income tax is irrevocable...... 10 Tax has always been one of an insurer’s most significant Improper service makes an assessment notice void ...... 10 expenses, comparable to payroll and claims.

What does this mean for organisations? Are they equipped to compete? Get to know the answers in Insurance 2020 & beyond: Equipping your business for the global tax revolution. To get your complimentary soft copy of the report, email [email protected].

2 Client advisory letter 2015 New rules: accounting for ‘bearer’ plants

Prior to 2014, IAS 41, Agriculture, required all ‘bearer’ The amendments to IAS 16 and 41 will provide relief to biological assets and the produce growing on the bearer preparers of financial statements who have expressed plant (or ‘consumable’) related to agricultural activity to concerns about the cost, complexity and reliability of the be measured generally at fair value less cost to sell. This is fair value of bearer plants when fair value is not readily based on the principle that the biological transformation of available (e.g. absence of markets for those assets); or biological assets is best reflected by fair value measurement. when fair value is available, fair value changes fluctuate IAS 41 further defines biological transformation as “the widely which affect profit or loss. Furthermore, mature processes of growth, degeneration, production, and bearer plants which are fully grown are no longer subject procreation that cause qualitative or quantitative changes in to significant biological transformations and therefore, fair a biological asset”. value changes are less important to readers of financial statements. In June 2014, the International Accounting Standards Board (IASB) published a limited-scope amendment to IAS 16, The amendments also adopted a ‘no-alternative-use’ model Property, Plant and Equipment, and 41 which include bearer which means that such bearer plant should be used only (as plants within the scope of IAS 16, instead of IAS 41. opposed to a predominant use) in the production or supply of agricultural produce, and is expected to be used for more Bearer plants are defined as a living plant that: (a) is used than one period which is similar to an item of machinery in the production or supply of agricultural produce; (b) is used in a manufacturing process. expected to bear produce for more than one period; and (c) has a remote likelihood of being sold as agricultural We expect that these amendments to IAS 16 and 41 would produce, except for incidental scrap sales. IAS 41 provides be adopted in the Philippines and shall be effective for some examples of biological assets that would usually meet annual periods beginning on or after January 1, 2016. the definition of bearer plant: These may also be early adopted. When the amendments are adopted, the application should be retrospective in Bearer plant Consumable accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates and Error. However, reporting entities Tea bushes Leaf are permitted to use ‘fair value as deemed cost’ for bearer Oil palms Picked fruit plants which have been previously measured at fair value Rubber trees Latex sap less costs to sell upon adoption of these amendments.

Therefore the accounting impact for bearer plants and Management should assess if their biological assets meet consumables would be as follows: as the bearer plant the definition of bearer plants. The classification as bearer transforms until it reaches maturity, it is accounted for as plants or other biological assets is critical as it drives property, plant and equipment following IAS 16; as the subsequent measurement model. For those assets which consumable grows before it is harvested, it is accounted meet the definition of bearer plants, management will need following IAS 41 which is measured at fair value less cost to to ensure that their systems are able to capture the costs sell; and when the consumable is harvested from the bearer incurred and consider their policy for determining when plant, it is accounted following IAS 2, Inventory, which is these assets are mature. measured at the lower of net realizable value and cost.

2015 Client advisory letter 3 Latest on income tax, VAT, and other taxes

In this case, the taxpayer was assessed by the BIR for Foreign government’s deficiency tax because it paid VAT based on gross receipts investment income is net of amounts earmarked for medical/hospital utilization expenses, relying in good faith on a 2008 BIR Ruling. exempt from income tax The CTA held that the taxpayer’s reliance in good faith The Tax Code1 exempts from income tax the income derived on the BIR Ruling, which is consistent with the prevailing from investments in the Philippines in loans, stocks, bonds rules at that time, should not be taken against the taxpayer. or other domestic securities, or from interest on deposits According to the CTA, the sudden change of rules should in Philippine banks by foreign governments, as well as not prejudice the taxpayer insofar as its 2008 VAT liability is financing institutions established by foreign governments concerned. The taxpayer is entitled to the benefit of non- or those owned, controlled or financed by a foreign retroactivity of rulings as there is no indication that it acted government. in bad faith. (CTA Case No. 8441 dated 5 May 2015) Applying this rule, the BIR held that the interest income of a financial institution wholly owned and controlled by the French Government derived from loans extended to No VAT on tax-free exchange the Philippine Government shall be exempt from income tax. The income tax exemption shall extend to the regular transfers between realtors interest, the late payment interest, the default interest, and the commitment fees paid by the Philippines pursuant to a The CTA held that the transfer of parcels of land owned Credit Facility Agreement. by a real estate dealer to another corporate real estate (BIR Ruling No. ITAD 184-15 dated 3 June 2015) dealer in exchange for shares to control ownership in the latter is not subject to VAT pursuant to Section 4.106-8(b) of RR No. 16-2005 as amended. In this case, the exchange HMOs are subject to VAT on transaction occurred on 30 April 2011 wherein RR No. 16- 2005, as amended by RR No. 4-2007, was still the prevailing gross receipts without any regulation. However, note that the said provision had already been amended by RR No. 10-2011, which took effect deductions on 7 July 2011 and now subjects to VAT the exchange of goods or properties, including real estate properties, used • Reliance in good faith on a ruling which is consistent with in business or held for sale or for lease by the transferor, the prevailing rules at that time protects the taxpayer from for shares of stocks, whether or not resulting in corporate retroactive application of subsequent rules. control. (CTA EB Case No. 1150 dated 12 May 2015) The CTA held that under existing regulations2, HMOs are subject to VAT based on the total amount of money or its equivalent representing the service fee actually or constructively received from members, undiminished by any amount earmarked or actually paid to doctors, hospitals and for other medical utilization.

1 Section 32(B)(7)(a) of the Tax Code 2 Section 4.108-3(k) of RR No. 16-2005

4 Client advisory letter 2015 Ownership transfer under Amendments on definition CARP not subject to tax of sugar for purposes of

Citing the Comprehensive Agrarian Reform Law of 19983 advance VAT and business and existing regulations4, the BIR ruled that transfer of ownership in the form of disturbance compensation, due tax to the extinguishment of the tenancy relationship between parties, is exempt from CGT and DST. However, any unpaid The definition of ‘raw cane sugar’ provided under RR No. real property taxes on the property shall be deductible from 6-2015 has been amended to apply only to natural sugar the compensation without penalty or interest. extracted from sugarcane through the simple mechanical process of pressing, boiling, filtering using centrifuge (BIR Ruling No. 108-2015 dated 14 April 2015) and drying; and having a color greater than 800 ICU and content of sucrose by weight in dry state corresponding to a Foreign diplomats, polarimeter reading of less than 99.5°. dependents exempt from Only those falling under this definition (such as muscovado) are exempt from VAT or percentage tax. The Sugar VAT Regulatory Authority will be responsible for collecting samples and providing the BIR with a copy of test results. The tax exemption privileges of foreign diplomats and their dependents in the Philippines shall be based on the On the other hand, ‘sugar’ refers to sugar other than raw principle of reciprocity. This means that tax privileges shall cane sugar, while ‘refined sugar’ refers to those produced be granted only to the extent that they are also granted from a sugar mill accredited by the BIR to be capable of to Filipino diplomats and their dependents abroad. Thus, producing sugar with polarimeter reading of 99.5° or above. before granting the tax privilege to foreign diplomats, the (Revenue Regulations No. 8-2015 dated 22 May 2015) BIR must wait for the DFA’s confirmation of similar tax privileges granted to Filipino diplomats in the countries they are assigned.

Given that the US Government grants tax exemption on purchase of goods of over US$50 by Filipino dependents and their children below 18 years old, the BIR granted a similar privilege to the US Embassy personnel and their dependents upon presentation of the valid DFA identification (ID) of the dependent. A list of dependents with copies of their valid and subsisting IDs issued by the DFA shall be furnished to the BIR for verification and monitoring purposes. (BIR Ruling No. 197-2015 dated 3 June 2015)

3 Section 66 of RA No. 6657 approved on 10 June 1988 4 BIR Ruling No. 350-2013 dated 11 September 2013

Glossary BIR - Bureau of Internal Revenue CARP - Comprehensive Agrarian Reform Program CGT - Capital Gains Tax CTA - Court of Tax Appeals DFA - Department of Foreign Affairs DST - Documentary Stamp Tax HMO - Health Maintenance Organization RR - Revenue Regulations US - United States VAT - Value-Added Tax

2015 Client advisory letter 5 Latest on regulatory landscape

of Deeds that will enable the LRA and RDs nationwide to Verification of eCARs under check that all real property transfers have BIR clearances and to verify all transfers against the clearances. The LRA LRA’s PHILARIS is tasked to ensure the development, implementation and operation of the online automated verification of The CIR has issued a Circular publishing the full text of the the CARs presented to the RDs through its Land Titling Joint Memorandum Circular (JMC) between the BIR and Computerization Project (LTCP). Every month, the LRA the LRA on the implementation and use of the Philippine shall provide the BIR with electronic reports on new TCT/ Land Registration and Information System (“PHILARIS”) CCT/OCT to ensure that all taxes due are collected before for the automated verification of eCARs. The JMC covers all registration or transfer of real property. transactions involving transfers of real properties processed in the Registry of Deeds (RD), and discusses the operating The DOJ and DOF shall oversee the faithful compliance of procedures and guidelines of the BIR and LRA with respect to the issuance and usage of eCARs. the agencies with the provisions of the MOA. (Revenue Memorandum Circular No. 29-2015 dated 17 April 2015) Among the salient portions of the JMC are as follows:

• There should be one eCAR per title in case of registered Provisional Permit to Use land and/or improvements and one eCAR per tax declaration for unregistered land/improvements. sales machine/receipting

• For estate and donor’s taxes on transfers of real software suspended properties, eCARs shall be issued by the RDO having jurisdiction over the domicile/residence of the decedent/ To strictly implement the non-issuance of Provisional donor. Permit to Use (PTU) to prospective Cash Register Machine (CRM)/Point-of-Sale (POS)/other sales machine/receipting • Any subsequent modification by the BIR of an eCAR software and to ensure the conversion from Provisional to that has been entered in and verified by the RD shall not Final PTUs, the BIR mandates that: affect any transaction already approved by the RD. • Effective immediately, all RDOs shall not accept (Revenue Memorandum Circular No. 28-2015 dated 17 April 2015) applications for Provisional PTUs from prospective CRM/ POS/other sales machine/receipting software users, until such time the Electronic Accreditation and Registration Inter-agency automated (eAccReg) system shall be modified accordingly. verification of real property • RDOs and officers under the Large Taxpayer Service are transfers directed to observe the necessary evaluation procedures to convert existing Provisional PTUs to Final PTUs on or In a MOA, the DOF, DOJ, BIR and LRA shall coordinate and before 31 July 2015. Otherwise, the provisional PTUs work closely to ensure the effective implementation of laws shall be revoked. and regulations related to real property transactions. (Revenue Memorandum Circular No. 30-2015 dated 28 May 2015)

For improved monitoring and control, an infrastructure shall be set up to link the BIR with the LRA and its Registry

6 Client advisory letter 2015 • Up to 40% Foreign Equity: 19) Operation of public Regular corporations or utilities, whereby a “public utility” is a business or service engaged in regularly supplying the public with some partnerships cannot use commodity or service of consequence like electricity, gas, ‘investment’ as part of their water, transportation, telephone or telegraph service. Power generation and the supply of electricity to the names contestable market are not considered public utility operation, according to RA No. 9136. 20) Educational In a Circular amending paragraph 11(a) of SEC institutions other than those established by religious Memorandum Circular No. 21 (Series of 2013)5, the SEC groups and mission boards. 23) Facility operator of clarified that entities organized as holding companies an infrastructure or a development facility requiring cannot use the term ‘investments’ as part of their corporate a public utility franchise. 25) Adjustment companies, or partnership name, but may use the term ‘capital’ instead. based on Section 332 of RA No. 10607 amending PD No. The word ‘investment’ refers only to entities organized as an 612. investment house or investment company. Other than the foregoing amendments, all other investment (SEC Memorandum Circular No. 5 dated 29 May 2015) areas identified under List A remain the same. (Executive Order No. 184 dated 29 May 2015) BOC accreditation of PEZA locators

Revoking CMO No. 3-2015, the BOC shall no longer impose additional documentary requirements for accreditation of locators whose requirements and eligibility had already been evaluated and passed upon by PEZA. All locators registered and approved by PEZA through the Client Profile Registration System (CPRS)-E2M System shall be activated immediately by the BOC-Management Information System and Technology Group (MISTG) after payment of the activation fee of PHP1,000, and presentation of the official receipt with a copy of the CPRS Certificate of Registration to MISTG. (Revenue Memorandum Circular No. 26-2015 dated 6 May 2015)

Amendments to the Foreign Investment Negative List

In light of RA No. 70426, a Tenth Regular Foreign Glossary Investment Negative List was issued amending List A which enumerates investment areas/activities open to foreign BIR - Bureau of Internal Revenue investors and/or reserved to Filipino nationals. BOC - Bureau of Customs The following are the newly effected changes to List A: CCT - Condominium Certificate of Title CIR - Commissioner of Internal Revenue • No Foreign Equity: 1) Practice of professions (Sec. CMO - Customs Memorandum Order 7.j of RA No. 8981) – a) pharmacy, b) radiologic and DOF - Department of Finance x-ray technology, c) criminology, d) forestry, and e) DOJ - Department of Justice law. The Order enumerates the other professions that eCAR - Electronic Certificate Authorizing Registration foreigners are allowed to practice provided their country LRA - Land Registration Authority reciprocally allows Filipinos to be admitted to such MOA - Memorandum of Agreement professions, including those that allow corporate practice OCT - Original Certificate of Title by Filipinos. PEZA - Philippine Economic Zone Authority RA - Republic Act RD - Registry of Deeds 5 Entitled Omnibus Guidelines and Procedures on the Use of RDO - Revenue District Office Corporate and Partnership Names SEC - Securities and Exchange Commission 6 Also known as the Foreign Investments Act of 1991 as TCT - Transfer Certificate of Title amended by RA No. 8179

2015 Client advisory letter 7 IC rules on investment Mandatory membership of in foreign currency pre-need companies in the denominated bonds Pre-Need Federation

The Insurance Commission clarified the rules on investment To strengthen the pre-need industry, the IC now requires all in foreign currency denominated bonds among insurance pre-need companies in the Philippines to become a member companies, particularly with regard to whether the of the Philippine Federation of Pre-Need Plan Companies, investments were made before or after the effectivity of the Inc. (Pre-Need Federation). Compliance of membership Amended Insurance Code. The salient points are: shall be one of the criteria to be considered by the IC in the issuance and renewal of the Certificates of Authority. To • Investments made before the effectivity of the Amended apply for membership, existing non-member companies Insurance Code need not be approved by the IC if the are given 30 days starting 1 June 2015, while pre-need investment complies with the credit ratings of S&P, companies to be formed in the future are given 30 days Moody’s or Fitch as provided under Section 2 of IC counted from the date of issuance of their Certificate of Circular Letter No. 29-2005 dated 23 September 2005. Authority by the IC. All members can equally avail of the Investments that are non-compliant with the said credit Federation’s services and shall be subject to its rules and ratings must be approved by the IC before they can be regulations. admitted as assets in the financial statements. (Insurance Commission Circular Letter No. 2015-27 dated 1 June 2015)

• Investments made after the effectivity of the Amended Insurance Code must comply with the credit ratings and the approval of the IC under Sections 2 and 2.10 of IC Circular Letter No. 2014-21 dated 15 May 2014 to be recognized as an asset in the companies’ financial statements. The limitation provided under Section 206(c) of the Amended Insurance Code must also be complied with. (Insurance Commission Circular Letter No. 2015-25 dated 18 May 2015)

New mandatory forms for non-life insurance companies

To obtain useful information on the industry’s performance, all non-life insurance companies are required to submit to the Philippine Insurance Rating Association (PIRA) two statistical Forms7, duly certified by a company officer with a rank of at least Vice President, not later than 30 October 2015. Subsequent submissions of annual statistics shall be due on 30 April of each year. PIRA shall then submit to the Insurance Commission a copy of the consolidated data, along with the list of those who failed to meet the deadline and the number of wrong data entries by the companies. A Glossary penalty of PHP5,000 shall be imposed for each day of delay in the submission of the Forms and a PHP500 penalty for BIR - Bureau of Internal Revenue 8 every wrong data entry of material information . CIR - Commissioner of Internal Revenue (Insurance Commission Circular Letter No. 2015-26 dated 26 May 2015) CTA - Court of Tax Appeals DST - Documentary Stamp Tax IC - Insurance Commission ITAD - International Tax Affairs Division 7 Copies of the Forms are attached as Annexes “A” and “B” of RA - Republic Act IC Circular Letter No. 2015-26. RAO - Revenue Administrative Order 8 Pursuant to IC Circular Letter No. 2014-15 dated 15 May 2014 SC - Supreme Court

8 Client advisory letter 2015 Latest on tax assessments/ refund procedures

Overpaid tax under treaty is Reliance on a revoked ruling refundable not a valid defense in a

The SC defined an ‘erroneous or illegal tax’ within the criminal tax case scope of Section 229 of the Tax Code as “one levied without statutory authority, or upon property not subject to taxation A pawnshop corporation was assessed for its failure to or by some officer having no authority to levy the tax, or pay DST, relying on a 1988 BIR Ruling that exempted one which in some other similar respect is illegal.” There is pawnshops from paying DST on pawnshop tickets. However, wrongful payment when what is paid, or at least part of it, is the CIR subsequently issued a BIR Ruling in 1991, revoking not legally due. the exemption and clarifying that DST shall be imposed on pawnshop tickets as evidence of the pledge transaction. Tax payment under a mistake of fact is just an example of an ‘erroneous payment’. This does not imply that a claim The CTA En Banc ruled that taxpayers cannot at their for refund may be sustained only when the tax payment own convenience choose a BIR issuance beneficial to their was made under a mistake of fact. Erroneous or wrongful cause even when such issuance has long been revoked by payment includes excessive payment because it refers to the Supreme Court and superseded by a subsequent BIR payment of taxes not legally due. Thus, the taxpayer’s claim Ruling. Any person who wilfully attempts to evade or defeat for tax credit/refund on erroneously collected internal the payment of tax shall be criminally liable under the Tax revenue taxes arising from the application of tax treaty Code. The term “wilful” in tax crime statutes means “a provisions was valid. voluntary, intentional violation of a known legal duty, and bad faith or bad purpose need not be shown.”

Refund claim with ITAD Accused cannot take the law into his own hands by outright refusal to recognize the subject DST assessment based valid if due to tax treaty on the sole ground that it was his strong belief that the corporation was not liable to pay the same. If a taxpayer The CTA pointed out that although Section 204 in relation believes that a tax had been erroneously or illegally to Section 229 of the Tax Code states that the written claim assessed, he should at least avail of the remedies to assail for refund must be “filed with the Commissioner”, it does or to seek the nullification of the same; otherwise, the not necessarily follow that all of such claims must be filed assessment remains valid. with the said office, in order for the same to be considered (CTA EB Crim. No. 31 dated 26 May 2015) as filed “with the proper authority”. Par. III (E) (2.3) of RAO No. 11-00 specifically states that the ITAD is the office of the BIR tasked to process claims for tax refund arising from Income from sale of military the application of tax treaty provisions. Thus, the taxpayer sufficiently complied with Sections 204(C) and 229 of the camps is tax-exempt Tax Code, insofar as the filing of refund claim with the proper office is concerned. The CTA upheld the exemption from all taxes and fees of (CTA EB Case No. 1118 dated 12 May 2015) the proceeds from the sale of portions of Metro Manila military camps by the Bases Conversion and Development Authority (BCDA) pursuant to Section 8 of RA No. 7227. To

2015 Client advisory letter 9 tax the transaction would diminish the proceeds of the sale, which is intended for developing and converting identified military bases to productive civilian use. As the sale was in the nature of an obligation imposed by law in order to fulfil a public purpose, the CIR has no power to tax an appropriation authorized by law. Meet us Opting to carry-over excess income tax is irrevocable Isla Lipana & Co. The CTA did not grant BCDA’s claim for refund because it had already elected to carry-over the excess income tax Foundation gives chairs to in its 2011 Annual Income Tax Return. Once the option to carry-over and apply the excess quarterly income tax Aeta school in Zambales against the income tax due for the taxable quarters of the succeeding taxable years has been made, such option shall be considered irrevocable for that taxable period, and no application for cash refund or issuance of tax credit certificate shall be allowed pursuant to Section 76 of the Tax Code. (CTA Case No. 8598 dated 28 May 2015)

Improper service makes an assessment notice void The kids carry their new seats to their classrooms. In time for the opening of the school year, through the “Seat Under the rules, constructive service of a tax assessment of Hope” project of Isla Lipana & Co. Foundation, Inc., we notice can be availed when the taxpayer or his duly donated 90 school chairs and sponsored a three-day feeding authorized representative refuses to acknowledge receipt program for the students of San Juan Annex School in Sitio of a personally served notice. It is effected by leaving the Maporac, Cabangan, Zambales last 11 June. The feeding notice in the premises of the taxpayer, duly attested by at program aims to improve the students’ attendance. least two revenue officers other than the revenue officer who constructively served the same. The revenue officer The recipient school, formerly called Aeta MAPE School, who constructively served the notice shall make a written currently has a population of 200 pupils with grades five report of the service which shall form part of the docket. and six students sharing one small room.

Service of a final assessment notice to an unauthorized Our Corporate Responsibility team travelled to this person and/or failure to comply with the written report of indigenous people’s settlement to also hand over various the constructive notice in the BIR Records as required under donations such included pencils, crayons and drawing pads, Section 3.1.7 of RR No. 12-99 is tantamount to a denial sleeping mats, and medicine from The Generic Pharmacy, of the taxpayer’s right to due process, which makes the an assurance client. asessment void. (CTA Case No. 8523 dated 29 May 2015) In 2012, our firm helped build a classroom in this school and gave books we sourced from Rotary Club of Makati-San Antonio.

Glossary BIR - Bureau of Internal Revenue BCDA - Bases Conversion and Development Authority CIR - Commissioner of Internal Revenue CTA - Court of Tax Appeals RR - Revenue Regulations The Corporate Responsibility team with the pupils and principal of San Juan Annex School. 10 Client advisory letter 2015 Talk to us

Firm celebrates 93rd For further discussion on the contents of this issue of the Client Advisory Letter, please contact any of our anniversary partners.

We celebrated our 93rd anniversary last 22 June with an advertisement in The Philippine STAR.

Internally, our people attended a Holy Mass followed by a simple get-together over afternoon snacks. We also put up posters at our Makati office’s Alexander B. Cabrera Malou P. Lim 29th and 25th Floors. Chairman & Senior Partner, Tax Managing Partner concurrent Tax Partner T: +63 (2) 459 2016 Our newspaper advertisement occupied half of page T: +63 (2) 459 2002 malou.p.lim@ B-3 of the Business section. Featuring our Human [email protected] ph.pwc.com Capital Director Pam Gregorio during a housebuild activity with the headline “I see me, in PwC”, the ad focuses how people identify with our purpose – to build trust in society and solve important problems. The poster version features Tax Senior Consultant Ma. Ricca Pearl Sulit during a tree planting activity.

Our roots go back to 22 June 1922 when Scottish Lawrence C. Biscocho Carlos T. Carado II accountants Charles P. White and Percival S. Page T: +63 (2) 459 2007 T: +63 (2) 459 2020 opened an accountancy practice in the Philippines lawrence.biscocho@ carlos.carado@ called White, Page & Co. ph.pwc.com ph.pwc.com

Fedna B. Parallag T: +63 (2) 459 3109 fedna.parallag@ ph.pwc.com

Request for copies of text

You may ask for the full text of the Client Advisory Letter by writing our Tax Department, Isla Lipana & Co., 29th Floor, Philamlife Tower, 8767 Paseo de Roxas, 1226 Makati City, Philippines. T: +63 (2) 845 2728. F: +63 (2) 845 2806. Email [email protected].

2015 Client advisory letter 11 www.pwc.com/ph

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Disclaimer The contents of this advisory letter are summaries, in general terms, of selected issuances from various government agencies. They do not necessarily reflect the official position of Isla Lipana & Co. They are intended for guidance only and as such should not be regarded as a substitute for professional advice.