Outsourcing brief Q UPDATES ON: SEC BIR SSS

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1 Outsourcing brief Q UPDATES ON: SEC BIR SSS

2 > SSS Updates SEC MC No : Adoption of Revised Auditing Standards and Amendments to Existing Accounting Standards, and Interpretations The Commission, in its meeting held on 09 January 2018, approved the adoption of the following pronouncements as part of SEC s rules and regulations on financial reporting: A. Revised Auditing Standards Title Philippine Standards on Auditing 800 (Revised) Philippine Standards on Auditing 805 (Revised) Brief Description This PSA is effective for audits of financial statements for periods ending on or after December 15, PSA 800 (Revised) (2016) supersedes PSA 800 (2009). However, this PSA does not also purpot to deal with all special considerations that may be relevant in the circumstances of the engagement. This PSA is effective for audits of financial statements for periods ending on or after December 15, PSA 805 (Revised) (2016) supersedes PSA 805 (2009) Philippine Standards on Auditing 810 (Revised) This PSA is effective for audits of financial statements for periods ending on or after December 15, PSA 810 (Revised) (2016) supersedes PSA 810 (2009) B. Amendments to Existing Accounting Standards, and Interpretations Title Transfer of Investment Property (Amendments to PAS 40) Philippine Interpretation IFRIC - 22, Foreign Currency Transcations and Advance Consideration Annual Improvements to Philippine PFRSs Cycle Brief Description An entity shall apply these amendments for annual periods beginning on or after January 1, Early adoption of the amendment is permitted. An entity shall apply these amendments for annual periods beginning on or after January 1, Early adoption of the amendment is permitted. The amendments to PFRS 12 are effective for annual periods beginning on or after January 1, 2017 whereas the amendments to PFRS 1 and PAS 28 are effective for annual periods beginning on or after January 1, All of the foregoing pronouncements have been adopted by the Auditing and Assurance Standards Council and Philippine Financial Reporting Standards Council and approved by the Board of Accountancy and Professional Regulation Commission and published in the Official Gazette. For the full version of the Circular, please visit the SEC website: ph/ SEC MC No : Compliance with SEC- Prescribed Website Template SEC Memorandum Circular No. 11, Series of 2014 was issued pursuant to the Commission s drive to promote a better corporate governance environment for Publicly- Listed Companies (PLCs). This Circular prescribes a website template for all PLCs. In its en banc meeting last December 19, 2017, the Commission resolved that all companies applying for registration of its securities for listing are directed to comply with the SEC-prescribed website template as one of the requirements before the Registration Statement is rendered effective. 2

3 > SEC update > SSS > SSS PhilHealth Updates For companies which were listed before the issuance of this Circular, the due date of compliance with the SEC-prescribed website template shall be six (6) months from the listing date. Failure to comply with the website template shall result in the imposition of penalty provided under SEC Memorandum Circular No. 18, Series of This Circular shall take effect immediately. To view the Circular, please visit the SEC website: SEC MC No : 2018 Filing of Annual Financial Statements and General Information Sheet The following measures in the filing of annual reports were adopted by the Commission to maintain an orderly filing of Audited Financial Statements (AFS) and General Information Sheet (GIS): 1. All corporations, including branch offices, representative offices, regional headquarters and regional operating headquarters of foreign corporations, shall file their AFS depending on the last numerical digit of their SEC registration or license number in accordance with the following schedule: Schedule SEC registration last digit April 16, 17, 18, and 2 April 23, 24, 25, and 4 April 30, May 2, 3, 4 5 and 6 May 7, 8, 9. 10, 11 7 and 8 May 14, 15, 16, 17, 18 9 and 0 All SEC Satellite Office and Extension Offices in Cebu, Iloilo and Davao shall be governed also by the above coding schedule in However, any corporations may file on or before its respective filing dates. 2. The above schedule shall not apply to the following corporations: a. Those whose fiscal year ends on a date other than December 31, These entities shall file their AFS within 120 calendar days from the end of their fiscal year; b. Those whose securities are listed on the Philippine Stock Exchange (PSE) and those whose Securities are registered but not listed in PSE and Public Companies covered under Sec of the Securities Regulation Code (SRC). c. Those whose AFS are being audited by the Commission on Audit (COA) provided that the following documents are attached to their AFS: (i) An Affidavit signed by the President and Treasurer (ii) A letter from COA confirming the information provided in the above Affidavit. 3. All corporations may file their AFS regardless of the last numerical digit of their registration or license number on or before the first day stated in the coding schedule; 4. Late filings or filing after respective due dates shall be accepted starting May 21, 2018 and shall be subject to the prescribed penalties; 5. The AFS shall have the stamped received by the Bureau of Internal Revenue (BIR) or its authorized banks ; and 6. The basic components as prescribed under SRC Rule 68, shall be submitted by filers. Failure to comply shall be considered 3

4 > SSS Updates a sufficient ground for the imposition of penalties by SEC. II. GENERAL INFORMATION SHEET (GIS) 1. All corporation shall file their GIS within 30 calendar days from: a. Stock Corporations date of actual annual stockholders meeting b. Non-Stock Corporations date of actual annual members meeting c. Foreign Corporation anniversary date of the issuance of the SEC license III. ALL REPORTS All corporations may directly file their AFS and GIS in SEC Head Office, PICC Building, all Satellite Offices (Ali Mall Cubao Quezon City, SM Manila, SM North EDSA, Robinson s Galleria, Muntinlupa City Hall and SM Mall of Asia) and Extension Offices (Cebu, Davao and Iloilo) applying the SEC number coding schedule for AFS. For the full version of the Circular, please visit the SEC website: ph/ SEC MC No : Adoption of Philippine Financial Reporting Standards (PFRS) for Small Entities The Commission approved the adoption of the PFRS for small entities as part of SEC s rules and regulations on financial reporting. Part I, Section 2 of SRC Rule 68, as amended, is revised as follows: 2. GENERAL GUIDES TO FINANCIAL STATEMENTS PREPARATION A. Financial Reporting Framework The financial statements that shall be prepared and filed by entities shall be in accordance with the financial reporting framework as prescribed under this section. (i) LARGE AND/OR PUBLICLY- ACCOUNTABLE ENTITIES a) Large or publicly accountable entities are those that meet any of the following: 1) Total assets of more than P350 Million or total liabilities of more than P250 Million; or 2) Are required to file financial statements under Part II of SRC Rule 68; or 3) Are in the process of filing their financial statements for the purpose of issuing any class of instruments in a public market; or 4) Are holders of secondary licenses issued by regulatory agencies. b) Large and/ or publicly-accountable entities shall use as their financial reporting framework the PFRS as adopted by the Commission. (ii) MEDIUM-SIZED ENTITIES a) Medium-sized entities are: 1) Total assets of more than P100 Million to P350 Million or total liabilities of more than P100 Million to P250 Million. 2) Are not required to file financial statements under Part II of SRC Rule 68; 3) Are not in the process of filing their financial statements for the purpose of issuing any class of instruments in a public market; and 4) Are not holders of secondary licenses issued by regulatory agencies. b) The following medium-sized entities shall be exempt from the mandatory adoption of the PFRS for SMEs: 1) An SME which is a subsidiary of 4

5 > SSS Updates a parent company reporting under the full PFRS; 2) An SME which is a subsidiary of a foreign parent company which will be moving towards IFRS or is part of headquarter of a foreign company reporting under the full IFRS; 3) An SME that is part of a group that is reporting under the full PFRS or has a subsidiary that is mandated to report under the full PFRS; 4) An SME which has a short term projection; 5) An SME which has a concrete plan to conduct an IPO within the next two years; and 6) An SME which has been preparing financial statements using full PFRS and has decided to liquidate; c) An SME availing of the exemption shall provide a discussion in its notes to financial statements to support its adoption of the full PFRS. d) If an SME that uses PFRS for SMEs breaches the floor or ceiling of the size criteria, the entity shall transition to the applicable financial reporting framework in the next accounting period. iii) SMALL ENTITIES a) Small entities are those that meet all of the following criteria: 1) Total assets of between P3 Million to P100 Million or total liabilities of between P3 Million to P100 Million. 2) Are not required to file financial statements under Part II of SRC Rule 68; 3) Are not in the process of filing their financial statements for the purpose of issuing any class of instruments in a public market; and 4) Are not holders of secondary licenses issued by regulatory agencies. b) Small entities shall use as their financial reporting framework the PFRS as adopted by the Commission. The following small entities shall be exempt from the mandatory adoption of the PFRS for Small Entities: 1) A small entity which is a subsidiary of a parent company reporting under the full PFRS for SMEs or is a subsidiary of a foreign parent company which will be moving towards IFRS; 2) A small entity that is part of a group that is reporting under the full PFRS or a branch office or regional operating headquarter of a foreign company reporting under the full IFRS for SMEs; 3) A small entity which has a short term projection; and 4) A small entity which has been preparing financial statements using full PFRS and has decided to liquidate. c) A small entity availing of the exemption shall provide a discussion in its notes to financial statements to support its adoption of the full PFRS. 5

6 > SSS Updates d) If a small entity that uses PFRS for Small Entities breaches the floor or ceiling of the size criteria, the entity shall transition to the applicable financial reporting framework in the next accounting period. iv) MICRO ENTITIES a) Micro entities are those that meet all of the following criteria: 1) Total assets and liabilities are below P3 Million; The PFRS for Small Entities which is effective for annual periods beginning on or after January 1, 2019 with early application permitted, has been adopted by Philippine Financial Reporting Standards Council on December 13, 2017 and approved by the Board of Accountancy and Professional Regular Commission on February 20, For the full version of the Circular, please visit the SEC website: ph/. 2) Are not required to file financial statements under Part II of SRC Rule 68; 3) Are not in the process of filing their financial statements for the purpose of issuing any class of instruments in a public market; and 4) Are not holders of secondary licenses issued by regulatory agencies. b) The management shall assess the acceptability of using a basis of accounting other than the PFRS for Small Entities. 6

7 > SSS SSS Updates RMC No : Prescribes the Procedures on the use of Withholding Tax Table on Compensation lncome and Advises on the Change of Creditable Withholding Tax Rate on Certain lncome Payments to lndividuals This Circular is issued pursuant to the amendments to the National lnternal Revenue Code introduced under Republic Act No , effective January 1,2018, with the following objectives: (A) To supplement RMC No dated December 28,2017 by providing the steps on how to use the revised Withholding Tax Table on Compensation; and (B) To advise on the change in the Creditable Withholding Tax Rate on income Payments to Self-employed individuals or Professionals. A. Use of the Withholding Tax Table ln general, every employer paying compensation to its employee/s shall deduct and withhold from such compensation a tax determined in accordance with the prescribed Revised Withholding Tax Tables. B. Change in the Creditable Withholding Tax Rate on lncome Payments to Self-employed lndividuals or Professionals. be subject to Eight Percent (8%): 1. Professional fees, talent fees, commissions, etc. for services rendered by individuals; 2. lncome distribution to beneficiaries of Estates and Trusts; 3. lncome Payment to certain brokers and agents; 4. lncome Payments to partners of general professional partnership; 5. Professional fees paid to medical practitioners; and 6. Commission of independent and/or exclusive sales representatives, and marketing agents of companies. To view the full version of this Circular, please visit BIR s website: gov.ph/ RMC No : Transition Procedures for AII Taxpayers Filing Tax Returns Affected by the Revised Tax Rates Pursuant to the Provisions of Republic Act (RA) No.10963, Otherwise Known as the Tax Reform for Acceleration and Inclusion (TRAIN) with the implementation of the provisions of RA No. to (known as TRAIN). Some of the forms/returns being enhanced and the Alphanumeric Tax Codes (ATCs) affected are as follows: BIR Form No. Form Name Monthly Remittance Return of Final Income Taxes Withheld Quarterly Remittance Return of Final Income Taxes Withheld Percentage Tax Return for Transactions Involving Shares of Stock Listed and Traded Through the Local Stock Exchange or Through initial and/or Secondary Public Offering ATC Affected WI 170 and WC 170 WF 320 PT 200 Changes in Tax rate From 7 1/2% to 15% From 15% to 35% From 1/2 of 1% to 6/10 of 1% The changes in tax rates mentioned above are not yet reflected and implemented in the following: A. efps filers shall - The following lncome Payments to Self-employed lndividuals or Professionals shall Various Bureau of lnternal Revenue (BIR) Forms/Returns are being developed in line 1. Online filing using the existing BIR form in the efps then pay online the 7

8 corresponding taxes due thereon by proceeding to payment. > SSS SSS Updates 2. To cover the deficiency tax, efps filers shall likewise file and pay online the deficiency tax using BIR Form No B. eblrforms Users/Filers shall Online filing using the existing BIR form in the eblrforms package then pay the corresponding taxes due thereon via online payment thru Gcash, Landbank Electronic Payment Service (LBEPS) or BIR- DBP PayTax Online (BDPTO) or manually via over-the-counter (OTC) of Authorized Agent Banks (AABs). C. Manual Filers shall 1. Fill-in the applicable BIR form using the new tax rates then compute the tax due thereon. 2. File and pay manually via OTC of AABs under the jurisdiction of the RDO where the taxpayer is registered. For the full version of this Circular, please visit BIR s website: 8

9 SSS Updates > SSS SSS Updates Circular No : Increase in Employees Compensation (EC) Funeral Benefit from P20, to P30, This Circular indicates that the amount of EC funeral benefit shall be increased from P20, to P30, pursuant to Executive Order (E.O.) No. 33 dated July 17, 2017 and Employee s Compensation Commission Board Resolution No This increase shall apply to all EC funeral benefit claims which have been approved at the time of effectivity of E.O. No. 33 which was on August 2, 2017 and onwards. Circular No : Guidelines on the Re-implementation of Loan Restructuring Program for Member-Borrowers Affected by Previous Calamities / Disasters Pursuant to the approval by the President of the Philippines last January 24, 2018, the following guidelines are issued: from April 2, 2018 to October 1, III. Terms and Conditions A. Eligibility The loan/s must be past due for a period of six months as of the first day of restructuring period. The member-borrower must be living or working in calamity declared areas as of disaster date, must be under 65 years old at the end of the installment term, has not been granted any final benefit, and has not been disqualified due to fraud committed against SSS. The member-borrowers final benefit claim must be filed within the availment period. B. Restructured Loan Amount The sum of principal and accrued interests of all past due short-term loans shall be consolidated into one Restructured Loan (RL1). on a diminishing principal balance over the applicable payment term. A penalty of 0.5% shall be charged against the amortization due for every month unpaid during RL1 term. To see the full Circular, please visit the SSS website: I. Coverage of the Program A. All member-borrowers who have past due Calamity Loans or Salary Loan Early Renewal Program (SLERP). B. Member-borrowers with past due short-term loans living or working in calamity/disaster stricken areas. II. Availment Period The availment period is up to six months C. Payment Term If full payment, it is payable within 30 days from the approval date of restructuring application. Meanwhile, installment payment is payable in equal monthly amortization based on payment range. D. Interest Rate and Penalty For installment term, RL1 shall be subject to interest rate of 3% per annum computed 9

About P&A > SSS P&A Outsourcing, Inc. provides solid, first-rate support for your key accounting and administrative activities, such as outsourced accounting, payroll, and accounting-related tasks.

10 About P&A > SSS P&A Outsourcing, Inc. provides solid, first-rate support for your key accounting and administrative activities, such as outsourced accounting, payroll, and accounting-related tasks. We see ourselves as your partner: we work steadily and efficiently in the background, enabling you to take center stage and focus on meeting your corporate objectives, goals, and targets and driving your business to greater heights. If you would like to know more about our services, please contact: Jessie C. Carpio President P&A Outsourcing, Inc. T ext. 800 D M F E Jessie.Carpio@ph.gt.com 10

11 > SSS Outsourcing brief is a quarterly publication of P&A Outsourcing, Inc. that aims to keep the company s clientele, as well as the general public, informed of various developments in outsourcing, compensation, and other related matters. This publication is not intended to be a substitute for competent professional advice. While careful effort has been exercised to ensure the accuracy of the contents of this publication, it should not be used as the basis for formulating business decisions. Government pronouncements, laws, and official interpretations are all subject to change. We welcome your suggestions and feedback so that the Outsourcing brief may be even more useful to you. Please get in touch with us if you have any comments and if it would help you to have the full text of the materials in the Outsourcing brief. Punongbayan & Araullo (P&A) is the Philippine member firm of International Ltd. International is one of the world s leading organizations of independently owned and managed accounting and consulting firms. grantthornton.com.ph 2017 P&A Outsourcing, Inc. All rights reserved. P&A Outsourcing, Inc is an entity wholly owned by Punongbayan & Araullo (P&A), the Philippine member firm of Grant Thornton International Ltd (GTIL). refers to the brand under which the member firms provide assurance, tax, and advisory services to their clients and/or refers to one or more member firms, as the context requires. GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another s acts or omissions. 11

TRAIN Revenue Issuances

TRAIN Revenue Issuances REVISED TAX RATES Revenue Memorandum Circular No 1-2018 Transition Procedures on the Use of Withholding Table on Compensation Income Revenue Memorandum Circular No 2-2018 Procedures