Bayanihan to Recover as One (Bayanihan 2)

Incurring business losses this year? With BAYANIHAN 2 you can claim them as expense in the next 5 years. --- The Bayanihan to Heal as One Act was signed into law in March 2020 to combat the COVID-19 pandemic. Almost six (6) months after, the Bayanihan to Recover as One bill or Bayanihan 2 is on its way to sustain the government’s efforts against the pandemic and to provide recovery programs for the affected Filipinos.

Today, we will share the salient tax features of the said bill (SENATE RATIFIED VERSION), which are as follows:

■ Net operating loss of the business in 2020 and 2021 may be deducted as expense in the next five (5) years ■ Exemption from Tax of Retirement Benefits received by employees from June 5, 2020 until December 31, 2020 ■ Exemption from import duties, taxes, and other fees for o Manufacture or importation of critical equipment or essential goods* o Personal computers, laptops, tablets, or similar equipment appropriate for use in schools, donated for distribution to public schools regardless of level, including SUCs and vocational institutions under TESDA (will also be exempt from Donor’s tax) ■ Provision of income tax-exempt o “COVID-19 special risk allowance” for all public and private health workers directly catering to or in contact with COVID-19 patients** o Compensation to public and private health workers who have contracted COVID-19 in the line of duty ■ DST exemption of loan term extensions or restructuring ■ Tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded through Initial Public Offering will be repealed

Considering that Bayanihan 2 is for the recovery from the pandemic, it is good to hear that some of the applicable taxes will be suspended or repealed to avoid additional costs and to somehow alleviate the financial distress caused by this national emergency.

Let us hope that this bill, together with, CREATE, FIST and GUIDE bills (which we will talk about in the succeeding Mondays) will soon be passed into law after careful deliberations of the concerned branch of the government.

*Shall be determined by the BOC and the BIR **For every month that they are serving during the state of national emergency as declared by the President

#TaxBreak with #VPA