COVID-19: SEC and BIR Updates – 17 March 2020

Please note that certain of the information in this article has since been updated, amended and/or clarified through subsequent issuances by relevant government agencies. Please click here and here to access the relevant updates.

In recent days, the SEC and BIR have released a number of updates, advisories and notices relating to filing deadlines, procedures and changes in operations in the context of COVID-19. The key issuances and updates include the following:

Bureau of Internal Revenue (BIR)

1. BIR – Revenue Memorandum Circular No.25-2020 –  Filing of the 2019 Income Tax Returns and Submission of Required Attachments

Securities and Exchange Commission (SEC)

2. SEC – Advisory – 17 March 2020
3. SEC Memorandum Circular No.5-2020 –  Extension of Filing of the 2019 Annual Reports and Applicable Quarterly Reports For Year 2020 and 2019 Audited Financial Statement
4. SEC Memorandum Circular No.6-2020 – Guidelines on the Attendance and Participation of Directors, Trustees, Stockholders, Members, and Other Persons of Corporations in Regular and Special Meetings Through Teleconferencing, Video Conferencing and Other Remote or Electronic Means of Communication
5. SEC Memorandum Circular No.7-2020 – Guidelines on Preventative Measures Against COVID-19 in the Handling of Records at the Securities and Exchange Commission

We have outlined below and summarized the key points of information to consider arising from the recent issuances by the BIR and SEC. 

1. BIR Revenue Memorandum Circular No.25-2020 –  Filing of the 2019 Income Tax Returns and Submission of Required Attachments

The BIR has issued Memorandum Circular No.25-2020, dated 16 March 2020. The purpose of this Memorandum is to provide guidelines for companies around the filing of the 2019 Annual Income Tax Return (AITR). 

Key points of information: 

• Despite the lockdown across NCR due to COVID-19, the filing deadline for the 2019 AITR will not be extended. So, if your company’s deadline for filing its AITR is 15 April 2020, this deadline remains in place. 

• The BIR is encouraging companies that use manual filing to now avail of the Electronic Filing and Payment System or eFPS, or the eBIR Forms system to avoid direct contact with others. Find more information about these tax filing systems here. For eFPS filers, the usual filing/payment procedures should be followed. For eBIR Forms filers, the following payment options are available: 
  • OTC payments through Authorized Agent Banks (AAB);
  • Revenue Collection Officers (if no AAB in the area); or
  • Electronic Online Payments, through Land Bank of the Philippines, Development Bank of the Philippines, Union Bank of the Philippines and payment gateways such as PayMaya and GCash. 

• The BIR notes that errors are possible when taxpayers are filing the AITR this year due to the restrictions in place for COVID-19. As such, the BIR notes that the AITR can be amended after it has been filed, provided the company’s taxes have not yet been subject to an audit. Amendments to the AITR that result in additional tax payments can be made, without penalty, up to 15 June 2020.

• The BIR also notes that any required attachments to an electronically filed AITR can be submitted to the taxpayer’s RDO up until 15 June 2020.  

2. SEC Advisory – 17 March 2020 

On 17 March 2020, the SEC issued an Advisory regarding the new operating procedures in place for the SEC offices. The SEC Advisory can be found here.

Key points of information:

• The SEC Main Office in Pasay City, as well as Extension Offices and Satellite Offices located within Luzon, are closed until further notice.

• The SEC has, however, implemented “work-from-home” arrangements for its staff, to assist businesses, reduce disruption and to facilitate corporate compliance with existing rules and regulations. 

• The SEC’s official Facebook page (@PhilippineSEC), is providing updates, information and announcements on a regular basis. This page also includes a list of categorized email contacts within the SEC offices that can be contacted (via email) in order to obtain further information.

3. SEC Memorandum Circular No.5-2020 – Extension of   Filing of the 2019 Annual Reports and Applicable Quarterly Reports for Year 2020 and 2019 Audited Financial Statement

SEC Memorandum Circular No.5-2020 was issued on 12 March. The purpose of this Circular is to assist Philippine companies having domestic and/or foreign business operations, with the preparation and audit of the Annual Financial Statements (AFS), as well quarterly reports, in light of COVID-19.

Key points of information:

• The SEC is granting an extension of time, without penalty, for affected companies to submit Annual Reports and/or the Annual Financial Statement (AFS) in respect of the financial period ending on 31 December 2019, as follows:
  • For companies with domestic operations only, a deadline extension until 30 June 2020: and
  • For companies with domestic and foreign operations, a deadline extension until 30 June 2020 or 60 days from the date on which the travel restriction/bank is lifted by the Government – whichever comes later.

• To avail of the extension, companies must adhere to certain criteria, which will differ depending on if the company is a publicly listed company or not.
  For Publicly Listed Companies in the Philippines, please refer to Section 1 of SEC Memorandum Circular No.5-2020.

• For Non-Publicly Listed Companies, the following requirements must be followed:
  • A sworn certification signed by the company’s President and Treasurer must be submitted which confirms that the following conditions have been satisfied;

1. The company’s financial year-end is 31 December 2019;
2. The company has significant business operations or significant subsidiaries in areas/countries/territories affected by COVID-19;
3. The preparation of financial statements and timely completion of the statutory audit of the company’s financial statements as of 31 December 2019 have been affected by the travel restriction/ban, temporary suspension of business operations, and/or measures imposed by the authorities or companies in response to COVID-19.

• A sworn certification by the company’s external auditor must also be submitted confirming No.2 and No.3 above. 

• Finally, the SEC does note that companies who are in a position to prepare financial statements or complete the statutory audits (i.e. unaffected by COVID-19) are required to file their Annual Reports and/or AFS within the usual periods prescribed under the existing rules and regulations. Here are the usual SEC filing deadlines for companies in the Philippines. 

4. SEC Memorandum Circular No.6-2020 – Guidelines on the Attendance and Participation of Directors, Trustees, Stockholders, Members, and Other Persons of Corporations in Regular and Special Meetings Through Teleconferencing, Video Conferencing and Other Remote or Electronic Means of Communication

SEC Memorandum Circular No.6-2020 provides updated guidelines for the attendance and participation of the following stakeholders at company meetings through the use of teleconferencing, video conferencing and other remote or electronic means of communications. 

• Directors
• Trustees 
• Stockholders
• Members
• Other persons related to corporations 

SEC Memorandum Circular No.6-2020 includes a comprehensive listing of the measures that corporations can take to ensure corporate governance is still observed at the same time as ensuring protective measures are in place in the context of COVID-19. These measures relate to meeting participation, quorums, voting, notices, corporate secretary duties, internal procedures and meeting locations. 

If your company is required to, or is intending to, hold a board meeting or a stockholders/members meeting in the coming weeks, please ensure to consult SEC Memorandum Circular No.6-2020 in order to understand fully the procedures that can be utilised during this time. 

5. SEC Memorandum Circular No.7-2020 – Guidelines on  Preventative Measures Against COVID-19 in the Handling of Records at the Securities and Exchange Commission

SEC Memorandum Circular No.7-2020 was issued on 16 March 2020 in order to take effect immediately. 

Key points of information: 

• For persons seeking to request plain or authenticated documents from the SEC, the existing SEC Appointment System and Public Kiosk (ODRS) is currently suspended in order to avoid personal contact with SEC staff. 

• Requests for documents/information should now be made through either:
  • The SEC Express System. This can be accessed through www.secexpress.com; or
  • The SEC Call Centre Facility. Persons can call the Hotline Number on (02) 8-737-8888 for requests, payment options and delivery options. 

• For persons seeking to file or submit reports or other documents to the SEC, please note that all filings at the SEC Head Office and Satellite Offices are suspended until further notice. 

• Filings and submissions should now be done through either of the following procedures:
  • the SEC Express Nationwide Submission (SENS); or
  • The Philippines Postal Corp or through ordinary mail. 

Make sure to carefully review SEC Memorandum Circular No.7-2020 for the specific procedures for each of these filing methods.

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