RMC No. 125-2024 — Amending certain provisions of Revenue Memorandum Circular No. 095-2017, Providing Guidelines on the Tax Treatment of the Government Securities Repurchase Transactions Governed by the Global Master Repurchase Agreement

BUREAUOF INTERNAT REPUBLIC OF THE PHILIPPINES. DEPARTMENTOFFINANCE: REYENUF

Bringing In Revenues for Nation-Building NLULIVLU NOV 1 5 Qr PILIPINAS BAGONG NOV 15 2024

REVENUE MEMORANDUM CIRCULAR NC 125-2024

SUBJECT: Amendiug Certain Provisions of Revenue Memorandum Circular No.

Securities Repurchase Transactions Governed by the Global Master Repurchase Agreement 095-2017, Providing Guidelines on the Tax Treatment of the Government

TO: All Internal Revenue Officials, Employees and Others Concerned

BACKGROUND

tax treatment of Government Securities Repurchase Program (GS Repo Program) governed by the Global Master Repurchase Agreement. Revenue Memorandum Circular (RMC) No. 95-2017 provides guidelines on the proper

Operating Guidelines for Repo Transactions from the Banker's Association of the Philippines Exchange Commission. creation of an Interdealer Government Bond Repo Market with counterparties to initially include Government Eligible Securities Dealers (GESDs), which shall be governed by the and Money Market Association of the Philippines as duly authorized by the Securities and Pursuant to Section 2 of RMC No. 95-2017, the GS Repo Program will provide for the

covered by a trust or Investment Management Account (IMA) agreement under a discretionary Institutions, and Other Non-bank Financial Intermediaries/Institutions entering into repurchase agreements in the Repo Market, in the coverage of RMC No. 95-2017. Non-Bank Financial Institutions, including Investment Companies or Mutual Funds, Insurance Companies, Trust Companies, Unit Investment Trust Funds (UITFs), funds established and arrangement in accordance with rules and regulations of the BSP, Government Financial This Circular is issued to provide clarification and guidance relating to the inclusion of

H. AMENDMENT

BY: W. NOV 15 2024 Section 2 of RMC No. 95-2017 is hereby amended to read as follows: Government Bond Repo Market with counterparties to include "SECTION 2. Coverage. - 1. The GS Repo Program will provide for the creation of an Interdealer

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2 e Government Eligible Securities Dealers (GESDs), Non-Bank Financial

Institutions (NBFIs). including Investment Companies or Mutual Funds.

S CAS 1 BIR National Office Bldg., Senator Miriam Defensor-Santiago Avenue, Diliman, Quezon Clty 1 WENUE 1 Trunkline: 8981-7000 ; 8929-7676 Website: www.bir.gov.ph

BAP and MART as duly authorized by the SEC. Intermediaries/Institutions (collectivelv._ .the Covered Entities). It shall be governed by the Operating Guidelines for Repo Transactions from the Insurance Companies. Trust Companies. Unit Investment Trust Funds Management....Account(IMA)agreement ..undera...discretionary (UITFs).funds established and covered by a trust or Investment arrangement in accordance with rules and regulations._of the BSP Government Financial. Institutions. and_Other Non-bank Financial

2. Eligible securities for the GS Repo Program are Philippine Peso- denominated Treasury Bills and Treasury Bonds issued by the BTr, for and on behalf of the Republic of the Philippines.

3. SEC shall authorize a Self-Regulatory Organization (SRO) for the participant Covered Entities of the GS Repo Program."

b. Section 3 of RMC No. 95-2017 is hereby amended to read as follows.

"SECTION 3. General Requirements. -

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to Republic Act No. (RA) 1405 in relation to their Repo transactions. be bound by the applicable SEC, BSP and Insurance Commission likewise waive secrecy on investments in government securities pursuant 3. Covered Entities intending to participate in the GS Repo Program shall regulations, the Operating Guidelines of BAP and MART, and other rules and regulations issued for the purpose. Participating Covered Entities shal

counterparty as the standard covering documentation for Repo 4. Participating Covered Entities shall enter into a GMRA with its repo transactions.

5. Each of the participating Covered Entities shall also execute an undertaking to consistently adhere to the terms of the GMRA prior to entering into any Repo transaction."

c.Section 4 of RMC No. 95-2017 is hereby amended to read as follows:

"SECTION 4. Registration Requirements. -

Entities shall be required by the BTr to comply with the following Prior to entering into any Repo transaction, the participating Covered registration requirements:

a. File with the Scripless Securities Registry Division (SSRD) of the BTr copies of the duly signed GMRAs and the individual undertaking executed by the concerned Covered Entities; and RUBREADS RANTERNEHRENVENUE E3

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b. Formally transmit to the concerned BIR Revenue District Office or the Large Taxpayer District Office, as the case may be,_copies of the duly which were previously stamped as received by the SSRD of the BTr. signed GMRAs and respective undertaking from the Covered Entities,

d. Section 5 of RMC No. 95-2017 is hereby amended to read as follows:

"SECTION 5. Reportorial Requirements.

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participating Covered Entities shall file with the concerned Revenue 2. Within thirty (30) days after the close of the taxable year, the District Office or the Large Taxpayers Service (LTS) of the BIR through the Regular Large Taxpayers Audit Division 2 (RLTAD 2), for large in Annex "A", summarizing all Repo transactions for the taxable period, Period, with the following information: taxpayers, an annual report --- in soft copy -- including subsequent sale, if any, of Repo Securities within the Repo -- using the format provided

a. Description of the purchased securities (including CUSIP or ISIN or other identifying number or numbers, if any);

b. Principal Amount;

c. Currency;

d. Buyer and Seller:

e. Purchase Date and Price;

f. Repurchase Date and Price;

g. Applicable Repo Rate;

h. Interest Income on Repo transactions;

i. Mark to Market (MTM) Gain or Loss on subsequent sale of Repo Securities; and

j. Other Income or Loss on Subsequent Sale of Repo Securities.

aligned with the matters contained in the required reports to be submitted by participating Covered Entities to BSP and/or SEC. Additional information may be included in the annual report in order to be

3. Upon request by the LTS, the BTr, in addition to other reports that it the specific participating Covered Entities undergoing BIR tax audit. Such regularly submits to BIR, shall provide such records, documents, or information as may be relevant to the taxation of the Repo transaction/s of @ BureaU oFIN 1 MANAGEMENt NALREVEMU tvsn

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request shall be accompanied with photocopies of the Letter of Authority (LOA), Tax Verification Notice (TVN), Audit Notice (AN), Letter Notice (LN), or other assessment notices, previously served with the participating Covered Entity concerned.

copies, of the relevant reports on Repo transactions entered into which, by. 4. The participating Covered Entities shall copy furnished the BIR, in soft existing regulations and issuances (like BSP Circular No. 923 dated 31 August 2016), are required to be submitted to BSP and/or SEC.""

I. REPEALING CLAUSE

repealed, modified or amended accordingly. All other Circulars and/or portions thereof that are inconsistent herewith are hereby

as wide publicity as possible. All concerned are hereby enjoined to be guided accordingly and to give this Circular

This Circular shall take effect immediately.

ROMFE vAGR Con er of Internal Revenue

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BUREAUDF W ORDS M "AGEMENT DIVIST TERnALREVPNI

NOV 1 5 2824

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