BIR LATEST TAX UPDATES
BIR ISSUES IRR IMPLEMENTING THE LAW IMPOSING VAT ON DIGITAL SERVICES
JANUARY 17, 2025
RevRevenue Regulations (RR) No. 003-2025 prescribes the policies and guidelines for the implementation of Republic Act (R.A.) No. 12023, otherwise known as Value-Added Tax (VAT) on Digital Services, which aims to impose a 12% VAT on digital services consumed in the Philippines, whether provided by resident or nonresident digital service providers (DSPs).
Highlights include the following:
a. Coverage as to person, subject matter (digital services and digital goods), transactions involved, as well as exclusions
b. The extent of taxability and exemption of resident and non-resident DSPs, and factors to consider whether the supply or delivery of digital services by DSPs is consumed in the Philippines.
c. DSP’s registration compliance specifically the appointment of local representative/service provider for non-resident DSPs
d. Administrative requirements such as tax reporting for gross sales using foreign currency, issuance of invoices, accounting and bookkeeping requirements, filing of tax returns and payment and remittance of VAT, and penalties for non-compliance
e. Registration timeline in the VAT on Digital Services (VDS) Portal
BIR EXTENDS THE REGISTRATION OF PERMANENTLY BOUND LOOSE-LEAF BOOKS OF ACCOUNTS/INVOICES & COMPUTERIZED BOOKS OF ACCOUNTS & OTHER ACCOUNTING RECORDS
JANUARY 16, 2025
Revenue Memorandum Circular (RMC) No. 006-2025 extends the registration of permanently bound loose-leaf books of accounts/invoices and computerized books of accounts and other accounting records from January 15, 2025, and January 30, 2025, to January 31, 2025, and February 17, 2025, respectively. This extension is due to ongoing technical concerns of the Online Registration and Update System (ORUS) in intermittent log-in connection issues.
BIR AMENDS THE EARLIER RMC INCORPORATING THE IMPACT OF EOPT ON TAX RECONCILING ITEMS OF FOREIGN EXCHANGE TRANSACTIONS, RETIREMENT & INTEREST EXPENSE
JANUARY 16, 2025
Revenue Memorandum Circular (RMC) No. 005-2025 amends certain provisions of RMC No. 11-2024, 12-2024, 13-2024, and 19-2024, specifically providing clarifications/transitory provisions to align them with the provisions of Republic Act (R.A.) No. 11976, or the Ease of Paying Taxes Act, its Implementing Rules and Regulations, and other issuances.
Some of the highlights include:
1. For tax purposes, Initial Direct Costs, which are payments for lease negotiation and execution, are deductible and eligible for Value-Added Tax (VAT) credit in the year they are incurred or accrued and are subject to a 5% withholding tax.
2. Effective January 1, 2024, the non-withholding of tax will no longer be a basis for disallowing interest expense claims; however, the payor remains obligated to withhold and remit the tax.
3. For tax purposes, offsetting or netting distinct transactions is strictly prohibited; each transaction is a separate taxable event and must be recorded and taxed independently.
4. Taxpayers using registered Computerized Accounting System (CAS)/Computerized Books of Accounts (CBA) must align foreign exchange (forex) rates with RMC 12-2024 requirements and update their systems if financial impacts arise, following existing enhancement policies.
5. Addressing gaps between the Philippine Financial Reporting Standard (PFRS) and the Tax Code applies only to full PFRS, excluding PFRS for Small-Medium Enterprises (SMEs) and Small Entities, but SMEs and Small Entities may opt to follow RMC No. 13-2024 with required disclosures. Securities and Exchange Commission (SEC) categorizes large, medium, small, and micro entities based on specific criteria such as total assets, liabilities, and regulatory filing requirements.
6. Employer contributions to a retirement fund are deductible if they meet Republic Act (R.A.) No. 4917 requirements and obtain a BIR tax qualification certificate, but contributions made before applying for tax qualification are not deductible.
7. Employees can avail of tax-exempt retirement benefits under R.A. No. 7641 or the Retirement Pay Law only if their employer has no existing retirement plan covering them.
BIR PROVIDES POLICIES & GUIDELINES IN THE REPORTING OF CANNOT BE LOCATED (CBL) TAXPAYERS & PROCEDURES IN HANDLING THE CASES PERTAINING THERETO
JANUARY 14, 2025
Revenue Memorandum Order (RMO) No. 004-2025 provides the policies and guidelines in the reporting of Cannot Be Located (CBL) taxpayers and procedures in handling the cases pertaining thereto.
Highlights include the determination and understanding of CBL taxpayers, identification of acceptable documents that will support the report that a certain taxpayer is CBL, guidelines and procedures in the issuance of deficiency tax assessment to CBL taxpayers, and procedures in the tagging and un-tagging of CBL status.
BIR PROVIDES POLICIES, GUIDELINES & PROCEDURES IN THE PROCESSING & ISSUANCE OF TAX CLEARANCE FOR FINAL SETTLEMENT OF GOVERNMENT CONTRACTORS
JANUARY 6, 2025
Revenue Memorandum Order (RMO) No. 002-2025 provides the policies, guidelines, and procedures in the processing and issuance of Tax Clearance Certificates for Final Settlement of Government Contracts (TCFG).
Highlights include the following:
1. Covered government contracts and tax types
2. Issuance of TCFG shall be on a per-contract basis
3. Criteria for government contractors to be issued with TCFG
3.1 No open valid “stop-filer” cases.
3.2 A regular user of the BIR eFPS from the time of enrollment up to the time filing of the renewal of TCFG for those with previously issued TCFG.
3.3 Not tagged as “Cannot Be Located (CB)” taxpayer.
3.4 No Accounts Receivable/Delinquent Account (ARDA). However, applicants with delinquent accounts may still be issued TCVC-FG and TCFG, provided the tax liabilities involved were the subject of a pending application for compromise settlement and/or abatement of penalties.
3.5 No pending criminal information filed in any court of competent jurisdiction arising from any tax or tax-related cases.
BIR EXTENDS TAX FILING DEADLINES FOR AREAS AFFECTED BY TYPHOONS KRISTINE, LEON, MARCEL, NIKA, OFEL & PEPITO
NOVEMBER 18, 2024
Revenue Memorandum Circular (RMC) No. 128-2024 extends the deadline for filing tax returns, paying taxes, and submitting of required documents for taxpayers affected by typhoons "Kristine," "Leon," "Marce," "Nika," "Ofel," and "Pepito." This extension applies to Revenue District Offices (RDOs) under Revenue Region No. 3 (Tuguegarao City) and other affected RDOs, including areas in Quirino, Cagayan, Isabela, Nueva Vizcaya, Aurora, Camarines Norte, and Catanduanes. The extensions were granted due to government work suspensions caused by the inclement weather.
BIR CIRCULARIZES THE ERC RESOLUTION SUSPENDING THE INCLUSION OF THE NATIONAL FRANCHISE TAX OF NGCP IN THE TRANSMISSION COST
NOVEMBER 15, 2024
Revenue Memorandum Circular (RMC) No. 124-2024 circularizes the Energy Regulatory Commission (ERC) resolution suspending the inclusion of the National Franchise Tax of National Grid Corporation of the Philippines (NGCP) in the total monthly transmission cost of billing of distribution utilities.
BIR CLARIFIES THE VALIDITY OF A CERTIFICATE OF TAX EXEMPTION ISSUED TO CERTAIN CORPORATIONST
NOVEMBER 15, 2024
Revenue Memorandum Circular (RMC) No. 123-2024 clarifies the three (3) year validity period of a Certificate of Tax Exemption (CTE) provided in Revenue Memorandum Order (RMO) No. 38-2019, which shall not apply to the following:
a. Non-stock and non-profit educational institutions as provided under Section 30(H) of the Tax Code of 1997, as amended, and Revenue Memorandum Order (RMO) No. 044-2016;
b. Homeowners’ Association as provided under Republic Act (R.A.) No. 9904 or the Magna Carta for Homeowners’ Association and RMC No. 09-2013, as amended;
c. Non-stock savings and loan association as provided under R.A. No. 8367 or the Revised Non-Stock Savings and Loan Association Act of 1997 and RMC No. 9-2016; and
d. Certificate of Qualification for an employee’s retirement benefit plan created under R.A. No. 4917 or the Retirement Benefit of Private Employee and Revenue Regulation (RR) No. 1-68, as amended by RR No. 1-83.
BIR CIRCULARIZES THE MEMORANDUM OF AGREEMENT & DATA SHARING AGREEMENT BETWEEN THE BIR & THE SEC
NOVEMBER 12, 2024
Revenue Memorandum Circular (RMC) No. 122-2024 circularizes the Memorandum of Agreement and Data Sharing Agreement between the Bureau of Internal Revenue (BIR) and the Securities and Exchange Commission (SEC).
BIR EXTENDS THE DEADLINE FOR THE FILING OF TAX RETURNS FOR TAXPAYERS AFFECTED BY TYPHOON “KRISTINE”
OCTOBER 25, 2024
Revenue Memorandum Circular (RMC) No. 119-2024 extends the deadline for the filing of tax returns, payment of taxes due, and submission of required documents originally due on October 25, 2024, to October 31, 2024. The extension was made due to the bad weather condition caused by Typhoon “Kristne”, thus, resulting in the suspension of government work in Luzon on October 23, 24, and 25, 2024. The circular clarifies the covered returns, reports, and BIR offices.
BIR CIRCULARIZES THE REVISED BIR FORM 1900 ON APPLICATION FOR PERMIT TO USE LOOSE-LEAF BOOKS OF ACCOUNTS & INVOICES
OCTOBER 18, 2024
Revenue Memorandum Circular (RMC) No. 117-2024 circularizes the availability of the revised BIR Form No. 1900 [Application for Permit to Use Loose-Leaf Books of Accounts/Invoices and Other Accounting Records] October 2024 (ENCS).
BIR CIRCULARIZES THE REVOCATION OF THE INCREASE IN ZONAL VALUE IN ZAMBOANGA AS A RESULT OF RPVARA
OCTOBER 18, 2024
Revenue Memorandum Circular (RMC) No. 114-2024 circularizes the Department Order (DO) No. 072-2024, revoking the implementation of DO No. 062-2024 and filing of refund for taxes erroneously paid as a result of the increase in zonal values of real properties in areas covered by DO No. 062-2024 in Zamboanga City.
The revocation is a result of the impact of the recently approved Real Property Valuation Assessment Reform Act (RPVARA).
BIR ANNOUNCES THE AVAILABILITY OF THE ORUS TAXPAYER'S CLASSIFICATION & RECLASSIFICATION UNDER EOPT
OCTOBER 15, 2024
Revenue Memorandum Circular (RMC) No. 113-2024 announces the availability of update of taxpayer classification, resumption of business registration, and other registration-related transactions in the Online Registration and Update System (ORUS).
BIR CLARIFIES THE TAXABILITY OF MEDICAL ALLOWANCE FOR QUALIFIED GOVERNMENT EMPLOYEES
SEPTEMBER 16, 2024
Revenue Memorandum Circular (RMC) No. 107-2024 clarifies the taxability of medical allowance for qualified government civilian personnel. The premium payments made to Health Maintenance Organization (HMO) providers pursuant to EO No. 64, series of 2024, are exempt from income tax and consequently, to withholding tax pursuant to Section 2.78. I(A)(3) of RR No. 2-98, as amended However, medical benefits exceeding Php 10,000, classified as "other benefits," are subject to the Php 90,000 13th month pay tax-exempt ceiling. Any amount that exceeds this threshold shall be subject to income tax and the corresponding withholding tax on compensation.
BIR CLARIFIES CERTAIN ISSUES RELATIVE TO THE CLASSIFICATION OF BUSINESS TAXPAYERS UNDER EOPT ACT
SEPTEMBER 4, 2024
Revenue Memorandum Order (RMO) No. 37-2024 prescribes the policies, guidelines, and procedures for classifying business taxpayers pursuant to Revenue Regulations (RR) No. 8-2024 in relation to Section 47 of Republic Act (R.A.) No. 11976 or the Ease of Paying Taxes (EOPT) Act.
Highlights include the guidelines and procedures in the initial classification as well as the reclassification of taxpayers already registered with the BIR.
BIR AMENDS OFFICE AUDIT THRESHOLD
SEPTEMBER 4, 2024
Revenue Memorandum Order (RMO) No. 36-2024 amends RMO No. 1-2021 to prescribe the gross sales threshold for cases audited by the Office Audit Section under the Assessment Division in Regional Offices.
BIR AMENDS THE GROUNDS & PROCEDURES FOR THE IMPLEMENTATION OF CONSTRUCTIVE DISTRAINT
AUGUST 29, 2024
Revenue Memorandum Circular (RMC) No. 96-2024 amends certain provisions of RMC No. 5-2001 relative to the grounds and procedures for the implementation of Section 206 of the Tax Code on 1997 on Constructive Distraint, specifically to include other cases when a Notice of Warrant of Constructive Distraint over the properties of a taxpayer may be issued.
Highlights include:
a. When a taxpayer who applies for retirement from business has a substantial amount of assessment pending with the BIR. An assessment is substantial if the amount thereof is equal to or higher than the net worth or equity of the taxpayer during the current taxable year.
b. When a taxpayer who is under tax investigation has a record of leaving the Philippines at least twice a year over a twelve (12)-month period, unless such trips are justified and/or connected with his business, profession, or employment.
c. When a taxpayer’s undeclared income is known to the public or the BIR by credible means and there is strong reason to believe that the taxpayer, in the natural course of events, will have a great tendency to hide or conceal his properties. For this purpose, the term “undeclared income” means an amount exceeding by at least 30% of the gross sales, gross receipts, or gross revenue declared per return.
d. When the BIR receives a complaint or information about undeclared income exceeding by at least 30% of a taxpayer's declared gross sales, receipts, or revenue per return, and this is supported by substantial and credible evidence, it has reason to believe the information is correct.
e. When the taxpayer who is under tax investigation tries to hide or conceal his personal property to prevent discovery thereof by tax authorities.
f. When the taxpayer who is under tax investigation intends to perform any act tending to obstruct the proceedings for collecting the tax due or which may be due from him.
g. When the taxpayer is tagged as Cannot Be Located.
h. Other analogous cases
BIR PRESCRIBES POLICIES & GUIDELINES IN THE MANDATORY REGISTRATION OF PERSONS ENGAGED IN BUSINESS
AUGUST 15, 2024
Revenue Regulation (RR) No. 15-2024 provides policies and guidelines in the mandatory registration of persons engaged in business and administrative sanctions and criminal liabilities for non-registration.
Highlights include persons and activities covered under the Internet Transactions Act of 2023, registration guidelines, continuing compliance, and the corresponding administrative sanctions and criminal liabilities for violation.
BIR CLARIFIES CERTAIN ISSUES RELATIVE TO THE WRONG VENUE FILING OF TAX RETURNS & PAYMENT OF TAXES UNDER EOPT LAW
AUGUST 7, 2024
Revenue Memorandum Circular (RMC) No. 87-2024 clarifies certain issues relative to the filing of tax returns and payment of taxes under Section 3 of Revenue Regulations (RR) No. 4-2024, implementing the provisions of Republic Act (R.A.) No. 11976 (Ease of Paying Taxes Act).
It may be recalled under the EOPT, the law has already removed the 25% surcharge imposition for the wrong venue filing of certain tax returns.
Highlights include:
1. The previous RR mandating taxpayers to use the eFPS in the filing of tax returns and payment of taxes had not been repealed since it is not contrary to the provisions of Section 3 of RR No. 4-2024.
2. Under Section 3 of RR No. 4-2024, all tax returns shall now be filed electronically.
3. Taxpayers identified in the previous issuances who are mandated to use eFPS but were not able to enroll in the said system shall now have the option to use the eBIRForms facility for them to be able to comply with the e-filing of tax returns.
4. If the electronic platforms of the BIR (i.e., eFPS, eBIRForms, Tax Software Providers (TSPs) are not available, taxpayers are allowed to manually file their tax returns and pay the taxes due to any Revenue Collection Officer (RCO) or Authorized Agent Bank (AAB).
5. RCOs may only accept cash payments not exceeding Php 20,000. However, there shall be no limit on tax payments made through checks.
6. The attachments to the tax returns shall be submitted electronically using the Electronic Audited Financial Statements (eAFS)/eSubmission Facility, whichever is applicable. In case of unavailability, the attachments can be submitted manually to the BIR office that has jurisdiction over the taxpayer.
7. The 25% surcharge for "wrong venue" filing shall no longer be imposed as this has already been removed under the EOPT Law.
8. Aside from the eFPS, taxpayers can use those available electronic payment (ePay) gateways in the payment of their taxes.
9. Opening of bank account is necessary in using eFPS for the payment of taxes. Taxpayers may select from any of the following eFPS-AABs as provided in this circular.
10. Taxpayers who are mandated to use eFPS but are not yet enrolled in eFPS and any eFPS-AAB shall use the eBIRForms for e-filing and pay the corresponding taxes electronically through any ePay facility or manually through any RCO or AAB until their enrolment has been approved.
11. In cases of payment using BIR Form 0605 with previous tax computations, the said form can be filed and paid electronically through the electronic platforms and ePay gateways.
12. For a "check" to be tendered to an AAB, the taxpayer shall indicate in the space provided after the phrase "PAY TO THE ORDER OF" the following data: (1) presenting/collecting bank or the bank where the payment is to be coursed and (2) FAO (For the Account of) Bureau of Internal Revenue as payee.
13. If the "check" shall be paid through RCO, the taxpayer shall indicate in the space provided after the phrase "PAY TO THE ORDER OF" the "Bureau of Internal Revenue" pursuant to RR No. 4-2024.
14. If the receiving AAB's system is offline or unavailable, taxpayers may transfer to another AAB branch even if the name of the receiving AAB branch is already indicated on the check for payment of taxes due, provided that the branch is the same AAB.
BIR FURTHER CLARIFIES EOPT INVOICING REQUIREMENTS UNDER RR NO. 7-2024
JULY 11, 2024
Revenue Memorandum Circular (RMC) No. 77-2024 clarifies the invoicing requirements under Revenue Regulation (RR) No. 7-2024, as amended by RR No. 11-2024.
Highlights include:
1. VAT-registered sellers must issue an invoice for every sale regardless of the amount. Non-VAT registered sellers must issue an invoice for single sales over Php 500.00, upon buyer request, or if total daily sales under Php 500.00 exceed Php 500.00.
2. The invoice is the primary sales record, requiring an Authority to Print (ATP) for printing. However, during the transition sellers can convert unused Official Receipts into invoices.
3. The seller can convert the Official Receipt to an invoice if it includes all required information under Section 6(B) of RR No. 7-2024, including quantity, unit cost, and description of goods or services. Missing information can be stamped on the document.
4. Taxpayers may use any descriptive name for their invoice, such as "Sales Invoice," "Cash Invoice", "Charge Invoice", "Credit Invoice", "Billing Invoice", "Service Invoice"; provided the word "Invoice" is prominently printed.
5. Service providers must now issue a Billing Invoice upon billing instead of a Billing Statement or Statement of Account.
6. Sellers cannot issue an invoice upon payment but may issue an Official Receipt, Payment Receipt, or Acknowledgement Receipt upon collection. An invoice is for documenting the sale of goods or services and may acknowledge receipt of payment for the transaction.
7. Taxpayers transitioning from Official Receipt to Sales Invoice or equivalent must apply for a new ATP Invoice. Different types or names of invoices should start with separate serial numbers or use prefixes/suffixes for distinction. Official Receipts used as supplements should continue from their last approved serial number.
8. Taxpayers using CRM/POS/e-Receipting/e-Invoicing systems can replace "Official Receipt" with a descriptive term for their invoices. The renamed invoice's serial number should continue from the last issued Official Receipt. Sellers must submit a Notice to the RDO/LT Office/LT Division with details of the starting serial number and issuance date. The RDO will forward the Notice to the Head Office, retaining a duplicate for reference.
9. Unused Official Receipts must be converted to invoices through an Inventory Report (Annex C) to the BIR by July 31, 2024. Taxpayers using CRM/POS or E-Invoicing software must submit a Notice (Annex D) for renaming, due within 30 days of system reconfiguration or by December 31, 2024. Submit both reports to the RDO/LT Office/LT Division or through the TRRA Portal email to Compliance.
10. A VAT-registered person with mixed transactions may issue a single invoice with breakdowns for Vatable, VAT-Exempt, and Zero-Rated sales, or opt for separate invoices where "VAT-Exempt Sale" or "Zero-Rated Sale" must be clearly indicated.
11. Supplementary documents like Official Receipts are not proof of sales. Failure to issue required invoices incurs penalties of Php 1,000.00 to Php 50,000.00 and 2 to 4 years imprisonment.
12. Prior to April 27, 2024, issue an Invoice upon collection. From April 27 onwards, issue an Invoice on the sale date. Use converted Official Receipts as invoices (struck through and stamped) until December 31, 2024, or reconfiguration completion, whichever comes first, and manual ones until fully consumed. Upon collection, issue a Payment Receipt, Official Receipt, Collection Receipt, or Acknowledgement Receipt.
13. Non-stock non-profit entities issue Non-VAT Official Receipts, Acknowledgment Receipts, or Donation Receipts for donations, detailing donor name, donation date, type (e.g., monetary or in-kind), and purpose (e.g., construction, medical expenses). If involved in profitable activities, they must issue invoices for all business transactions, including sales of goods or services.
BIR CLARIFIES CERTAIN ISSUES RELATIVE TO THE IMPLEMENTATION OF OUTPUT VAT CREDIT ON UNCOLLECTED RECEIVABLES INTRODUCED UNDER EOPT LAW
JUNE 14, 2024
Revenue Memorandum Circular (RMC) No. 65-2024 clarifies certain issues relative to the implementation of Section 19 of the Republic Act (R.A.) No. 11976 (Ease of Paying Taxes Act), which added Section 110(D) of the 1997 Tax Code, as amended, that introduced the Output Value-Added Tax (VAT) Credit on uncollected receivables.
Highlights include the conditions for the entitlement, timing of claim, work-around procedures on bad debts subsequently collected, return of goods, and the specific impact on the part of the buyer and seller on the preparation of Quarterly VAT Returns (BIR Form 2550Q).
BIR AMENDS THE TRANSITORY PROVISIONS RELATIVE TO THE DEADLINE FOR INVOICING REQUIREMENTS COMPLIANCE
JUNE 13, 2024
Revenue Regulations (RR) No. 11-2024 amends the transitory provisions of RR No. 7-2024 relative to the deadlines for compliance with the invoicing requirements.
Highlights include:
1. Taxpayers are not required to replace its existing BIR Certificate of Registration that displays the Registration Fee.
2. Removal of the December 31, 2024 deadline for the use of Unused Official Receipts converted to Invoice. Thus, taxpayers may use the converted Unused Official Receipts until they are fully consumed.
3. Taxpayer may convert and use the remaining Official Receipts as Invoice and convert the Billing Statement/Statement of Account/Statement of Charges into Billing Invoice until fully consumed.
4. Extended deadline for submission of inventory report of Unused Official Receipts/Billing Statement/Statement of Account/Statement of Charges converted into Invoice/Billing Invoice on or before July 31, 2024.
5. Extended deadline for enhancement of Cash Register Machine (CRM)/Point-of-Sales (POS) Machines, e-Receipting or Electronic Invoicing Software, Computerized Accounting System (CAS)/Computerized Books of Accounts (CBA) with Accounting Records (AR) until December 31, 2024. Any extension must be approved by the concerned Regional Director or Assistant Commissioner of the Large Taxpayers Service which shall no longer than six (6) months from December 31, 2024.
6. Submission of notice on renaming of Official Receipt by CRM/POS/CAS/CBA with AR shall be within 30 days from completion of reconfiguration/enhancement or on December 31, 2024, whichever comes first.
BIR STREAMLINES THE PROCESS OF SUBMISSION OF INVENTORY REPORTS & NOTICES THROUGH EMAIL SUBMISSION PURSUANT TO THE IMPLEMENTATION OF THE EASE OF PAYING TAXES LAW ON INVOICING
JUNE 5, 2024
Operations Memorandum No. 29-2024 issued on June 5, 2024, streamlines the process of submission of inventory reports and notices relative to the implementation of the transitory provisions of Revenue Regulations (RR) No. 7-2024 pursuant to Ease of Paying Taxes Act on the conversion of unused Official Receipts/Billing Statement/Statement of Account/Statement of Charges into Invoices/Billing Invoices. Specifically, the BIR will now accept e-mail submission of Inventory Report (for Manual/Loose Leaf) and Notice (for Computerized Accounting System [CAS]/Computerized Books of Accounts [CBA] with Accounting Records [AR]) made by taxpayers through the Taxpayer Registration Related Applications (TRRA) Portal to simplify the process and reduce the number of in-person visits and queueing at the RDO.
It may be recalled that the BIR, prior to the issuance of this Operations Memorandum, only allows taxpayers manual submission of the said reports and notices, in duplicate original copies, until May 27, 2024, or within 30 days from the effectivity of the RR. However, with the aid of this issuance, taxpayers can now have the option to submit either manually (via walk-in) or electronically (via email) through the TRRA Portal. This change also aligns with the BIR’s commitment to ease of doing business and simplifying tax payment procedures.
BIR AMENDS THE PROCESS OF VERIFICATION OF TIN INQUIRY THROUGH EMAIL
MAY 29, 2024
Revenue Memorandum Order (RMO) No. 20-2024 amends certain provisions of Revenue Memorandum Circular (RMC) No. 37-2024 regarding Tax Identification Number (TIN) inquiry through electronic mail. Specifically, it provides for work-around procedures to the attending BIR officer on the matter of verification of the information submitted by the requesting taxpayer as against the taxpayer information in the BIR’s Internal Revenue Integrated System-Taxpayer Registration System (IRIS-TRS)/Integrated Tax System-Registration System (ITS-Reg), or in the eTINQuery System before responding to a request for TIN verification through e-mail.
BIR CLARIFIES THE ANTE-DATING OF DEEDS OF SALE INVOLVING REAL PROPERTIES
MAY 28, 2024
Revenue Memorandum Circular No. 64-2024 addresses the issue of antedating of deeds of sale involving real properties.
Highlights include:
1. In case of delay in the presentation of notarized deeds of sale or other transfer documents, the relevant laws and regulations on the kind of tax, rate of tax, zonal or fair market values, effective at the date of notarization shall be applied, but the corresponding penalties and interest for late filing of return and payment of applicable taxes shall be imposed.
2. In cases where it is found that the deeds of sale or other transfer documents are ante-dated, the laws and regulations effective at the time of presentation of the deeds of sale or other transfer documents shall be applied. Unless the taxpayer proves otherwise, a deed of sale or transfer document may be considered as ante-dated in the following instances:
2.1 Documents dated before the effectivity of the Capital Gains Tax law;
2.2 Documents dated before the effectivity of the regulations imposing the Creditable Withholding Tax on sales or transfers of real property; and
2.3 Documents dated before the effectivity of the current zonal values as reflected in the latest Revised Schedules of Zonal Values of Real Properties within the jurisdiction of the concerned Revenue District Office.
3. To show that there is no antedating of public instruments, a taxpayer may submit supporting documents such as, but are not limited to, cancelled checks, invoices, contracts to sell, or certifications from the appropriate Clerk of Court or Executive Judge, or the National Archives of the Philippines.
BIR ANNOUNCES THE AVAILABILITY OF THE TAXPAYER’S CLASSIFICATION INQUIRY FUNCTIONALITY IN THE ORUS
MAY 16, 2024
Revenue Memorandum Circular (RMC) No. 62-2024 announces the availability of the taxpayer’s classification inquiry functionality in the Online Registration Update System (ORUS).
It may be recalled that under the Ease of Paying Taxes Law as implemented by Revenue Regulations (RR) 8-2024 and 6-2024, there will now be the classification of taxpayers and the imposition of reduced interest and penalty rates for micro and small taxpayers. Specifically, for classification purposes, new registrants shall initially be classified based on its declaration in the Registration Forms starting from the year they registered and shall remain as such unless reclassified while existing taxpayers shall be notified by the BIR of their classification or reclassification.
Taxpayers registered in 2022 and prior years shall be classified based on gross sales for the taxable year 2022. For taxpayers registered in 2022 and prior years but without any submitted information on their gross sales for the taxable year 2022, and taxpayers registered in 2023 or in 2024 before the effectivity of the Regulations (i.e., April 27, 2024), shall initially be classified as MICRO, except VAT-registered taxpayers, who shall be classified as SMALL.
BIR AMENDS VAT AUDIT PRIORITY PROGRAMS & PROCEDURES
MAY 13, 2024
Revenue Memorandum Order (RMO) No. 17-2024 amends certain provisions of RMO No. 6-2023, or the Updated and Consolidated Policies, Guidelines, and Procedures for BIR Audit Program. Specifically, taxpayers who are manually selected for audit under "Priority Audit Cases" shall no longer require prior approval of the Commissioner. However, a copy of the lists of taxpayers manually selected for audit and approved by the Regional Director shall be furnished to the Assessment Programs Division (APD), within five (5) days from approval for post-evaluation. In the case of taxpayers to be audited under the VAT Audit Program, APD shall provide the VAT Audit Section (VATAS) under the Regional Assessment Divisions the list of taxpayers electronically selected by the Internal Revenue Integrated System (IRIS)-Audit module based on the risk criteria embedded in the said module, on a quarterly basis (every 15th day of the month), following the due date for the filing of the Quarterly VAT returns (BIR Form No. 2550Q). These lists shall be used as a reference in the selection of VAT-registered taxpayers to be audited to determine their VAT compliance.
BIR TAX ADVISORY ON THE LIST OF CANNOT BE LOCATED TAXPAYER AS OF MAY 10, 2024
MAY 10, 2024
In a Tax Advisory, the BIR has advised taxpayers who Cannot Be Located (CBL) as of May 10, 2024, to come forward to the BIR to clarify their CBL status, update their registered address and/or settle outstanding tax obligations if any. If anyone knows the listed taxpayers, the BIR has advised the public to inform the nearest BIR office. Other taxpayers who have transacted with these CLB taxpayers are also notified that any transaction from the date of publication onwards shall not be allowed as deductible expense/input tax for income and VAT computation pursuant to Revenue Memorandum Circular (RMC) No. 29-2023.
BIR CLARIFIES THE IMPACT OF THE REPEAL OF SECTION 34 (K) OF THE NIRC REGARDING THE NON-WITHHOLDING OF TAXES TO ALL ASSESSED CASES & ONGOING AUDITS
MAY 9, 2024
Revenue Memorandum Circular (RMC) No. 60-2024 provides clarification and guidance on the repeal of Section 34 (K) of the 1997 Tax Code, as amended, which was implemented through Section 6 of Revenue Regulations (RR) No. 4-2024.
It may be recalled that under the Ease of Paying Taxes (EOPT) Act, an income payment where withholding of tax is required can now be allowed as a deduction from the gross income, even if no tax is withheld, provided the same is necessary, ordinary, and duly substantiated expense related to the registered business of the taxpayer. Thus, the need to clarify if the repeal may be applied to all assessed cases and ongoing audits covering taxable periods prior to January 22, 2024, or the date of the effectivity of the EOPT Act.
Highlights include:
1. On all ongoing audits covering the taxable period prior to January 1, 2024-expenses shall be allowed as deductions only if the corresponding tax required to be withheld has been paid, whether prior to audit or submission of the audit report to the reviewing office.
2. In cases of failure to withhold and pay the tax prior to the submission of the audit report to the reviewing office, the Revenue Officer (RO) shall recommend the issuance of an assessment notice both on income and withholding tax.
3. On audit cases already submitted to the Reviewing Office:
3.1 Paid Case-expenses shall be allowed as deductions provided the corresponding tax required to be withheld has been paid.
3.2 Assessed Case-apply the requirement under the then Section 34 (K) of the NIRC, thus, assessment on both income and withholding tax shall be issued.
4. For the taxable year covering January 1, 2024 onwards, income payments subject to withholding tax shall be allowed as deductions, even if no tax was withheld, provided the other requirements of deductibility have been met. However, the taxpayer shall still be liable for the payment of its corresponding withholding tax due on said income payments.
BIR MODIFIES ATC FOR CWT ON CERTAIN INCOME PAYMENTS ON JOINT VENTURES/CONSORTIUMS
APRIL 30, 2024
Revenue Memorandum Order (RMO) No. 18-2024 modifies the Alphanumeric Tax Codes (ATC) for Creditable Withholding tax on Certain Income Payments made by Joint Ventures/Consortiums pursuant to Revenue Regulation (RR) No. 14-2023.
BIR ISSUES IRR ON AMENDMENTS INTRODUCED BY EASE OF PAYING TAXES LAW ON THE CLASSIFICATION OF TAXPAYERS & ADMINISTRATIVE PENALTIES
APRIL 11, 2024
Revenue Regulations (RR) No. 6-2024 and 8-2024 implement the amendments introduced by Republic Act (R.A.) No. 11976, otherwise known as the Ease of Paying Taxes Law on the Classification of Taxpayers and the Reduced Administrative Penalties for Small and Micro Taxpayers pursuant to Sections 244 and 245 of the 1997 Tax Code, as amended.
Highlights of the changes include:
A. CLASSIFICATION OF TAXPAYERS
1. Taxpayers shall be classified as follows:
1.1 Micro Taxpayer-gross sales are less than Php 3,000,000
1.2 Small Taxpayer-gross sales from Php 3,000,000 to below Php 20,000,000
1.3 Medium Taxpayer-gross sales from Php 20,000,000 to below Php 1,000,000,000
1.4 Large Taxpayer-gross sales from Php 1,000,000,000 and above
2. “Gross sales” means the total sales, net of Value-Added Tax (VAT), if applicable, during the taxable year, with no further deductions.
2.1 It covers business income, specifically income from the conduct of trade, business, or exercise of a profession.
2.2 It excludes compensation income under employer-employee relationships, passive income under Sections 24, 25, 27, and 28, and income excluded under Section 32(B) of the Tax Code, as amended.
3. Taxpayers shall be duly notified by the BIR of their classification or reclassification based on the prescribed procedure to be covered in a separate revenue issuance.
3.1 Initial or first-time registrants are initially classified based on their declaration in the Registration Forms. The classification shall remain unless reclassified according to the threshold values mentioned above.
3.2 Taxpayers registered in 2022 and prior years without submitted information shall be classified based on their gross sales in 2022. However, if they are VAT-registered, they shall be classified as Small Taxpayers. Otherwise, or if non-VAT registered, they shall be classified as Micro Taxpayers.
3.3 Taxpayers registered in 2023 or 2024 before April 27, 2024, shall initially be classified as Micro Taxpayers, if non-VAT registered, and Small Taxpayers if VAT registered.
B. REDUCED ADMINISTRATIVE PENALTIES FOR MICRO AND SMALL TAXPAYERS
1. Reduced surcharge of 10% in the following cases:
1.1 Failure to file any return and pay the tax due thereon as required under the provisions of the Tax Code or rules and regulations, on the date prescribed.
1.2 Failure to pay the deficiency tax within the time prescribed for its payment in the notice of assessment.
1.3 Failure to pay the full or part of the amount of tax shown on any return required to be filed under the provisions of the Tax Code or rules and regulations, or the full amount of tax due for which no return is required to be filed, on or before the date prescribed for its payment.
2. Reduced interest by 50% for unpaid amount of tax, except in case of willful neglect to file a return within the prescribed period, or for false or fraudulent filing of the return.
3. Reduced penalty of Php 500 for each failure to file certain information returns not exceeding Php 12,500 for all such failures during such calendar year.
4. Reduced compromise penalty rate of 50% in case of a criminal violation by covered taxpayers of Sections 113, 237, and 238 of the NIRC, not involving fraud based on the applicable rate or amount of compromise under Annex “A” of Revenue Memorandum Order (RMO) No. 7-2015 and its subsequent amendments, if any.
BIR ISSUES IRR ON AMENDMENTS INTRODUCED BY EASE OF PAYING TAXES LAW ON REGISTRATION PROCEDURES & INVOICING REQUIREMENTS
APRIL 11, 2024
Revenue Regulations (RR) No. 7-2024 implements the amendments introduced by Republic Act (R.A.) No. 11976, otherwise known as the Ease of Paying Taxes Law on Registration Procedures and Invoicing Requirements pursuant to Sections 113, 235, 236, 237, 238, 242, 243 of the 1997 Tax Code, as amended.
Highlights of the changes include:
A. INVOICING REQUIREMENTS
1. Whether sale of goods or services, the same shall be covered with invoice. The Invoice will now serve as the principal document for output tax/input tax claims for transactions subject to VAT.
2. Supplementary documents are not valid proof to support the claim of input taxes by the buyer/purchaser.
2.1 Official receipts are now considered supplementary documents.
2.2 Other supplementary documents include delivery receipts, order slip, debit/credit memo, purchase order, acknowledgement receipt, cash receipt, collection receipt, bill of lading, billing statement, statement of account, and other similar documents.
3. On information to be contained in the invoice
3.1 Invoices should no longer include business style.
3.2 Optional to add DTI Registered Business Name or Tradename in addition to BIR-registered name.
3.3 If the sale of goods or services is directly between a business and consumers [Business-to-Consumer (B2C)] who are end-users of its products or services, the business address and TIN of the buyer are not required to be included.
3.4 Taxpayers whose transactions are not subject to VAT or Percentage Tax shall issue a Non-VAT Invoice indicating at the face of such invoice the word “EXEMPT.”
3.5 For taxpayers transacting with Senior Citizens (SC), Persons with Disability (PWD), Solo Parent, National Athletes and Coaches pursuant to Republic Act (R.A.) No. 10699, and Medal of Valor Awardee or dependents pursuant to R.A. No. 9049, specific additional information enumerated under these Regulations shall be provided in the Invoice.
3.6 Tickets such as transportation tickets, event tickets, amusement tickets, movie tickets, parking tickets, raffle tickets, gaming/gambling tickets, electronic tickets, and other similar tickets, regardless of form or name, including those issued by ticketing machines, shall serve as both an invoice and a proof of payment, if the word “invoice” is printed therein and it contains all the required information outlined in the Regulations. Otherwise, the same shall be considered as a supplementary document and a separate invoice shall be therefore issued.
3.7 The seller shall be liable for non-compliance with the invoicing requirements in case the issued invoice lacks information.
3.8 The buyer shall be allowed input tax credits, except if the lacking information pertains to the following:
a. amount of sales
b. VAT amount
c. registered name and TIN
d. description of goods or nature of services
e. date of transaction
4. The word “Invoice” shall be printed on the face of the invoice.
4.1 The term Cash Sales or Charge Sales, at the seller’s option, can be indicated in the invoices as checkboxes to reflect the type of transaction.
4.2 In case the taxpayer opts to have a separate set of invoices for Cash Sales or Charge Sales, the word “Invoice” may be printed indicating the transactions that will be issued such invoices e.g., Cash Invoice, Charge Invoice/Credit Invoice, Billing Invoice, Service Invoice, etc. Provided that the word “Invoice” is prominently printed or larger than the word describing the transaction.
5. Invoice shall be issued by all persons subject to internal revenue tax:
5.1 regardless of the amount sold by a VAT-registered seller.
5.2 for each sale valued at Php 500 or more.
5.3 For each sale regardless of the amount of the transaction if the buyer so requires. Provided that if the sales amount per transaction is below Php 500 but the aggregate sales at the end of the day is at least Php 500, the seller will issue one (1) invoice for the aggregate sales amount at the end of the day.
5.4 The threshold amount of Php 500 shall be adjusted to its present values every three (3) years using the Consumer Price Index as published by the Philippine Statistics Authority.
B. PRESERVATION OF BOOKS OF ACCOUNTS
1. All books of accounts shall be preserved for a period of five (5) years reckoned from the day following the deadline in filing a return, or if filed after the deadline, from the date of the filing of a return, whichever comes later, for the taxable year when the last entry was made in the books.
2. If the taxpayer has a pending protest or claim of tax credit/refund, and the books and records concerned are material to the case, he is required to preserve them until the case is finally resolved in support of his defenses, even beyond the 5-year retention period.
3. External auditor who certified the financial statements has the responsibility to preserve electronic copies of the audited financial statements including the audit working papers within five (5) years from the due date of filing of annual tax returns or the actual date of filing, whichever comes later, unless a longer period of retention is required under the Tax Code or other relevant laws.
C. REGISTRATION REQUIREMENTS
1. The Annual Registration Fee of Php 500 is repealed effective January 22, 2024.
1.1 The existing BIR Certificate of Registration (COR) is valid although ARF is no longer required to be paid.
1.2 Taxpayers are not required to replace its existing COR which includes ARF.
1.3 Updating the COR is only necessary if there are changes to the registration information, excluding the ARF.
2. Taxpayer’s registration may be cancelled or transferred upon mere filing of the application, electronically or manually.
2.1 Cancellation or transfer shall not preclude the BIR from conducting an audit to determine tax liability.
2.2 If the BIR audit is initiated as a result of the transfer of registration, the Revenue District Office (RDO) that initiated the same shall continue the audit.
D. TRANSITORY PROVISIONS
1. On Unused Official Receipts (ORs)
1.1 Unused ORs can still be used as supplementary documents until fully consumed provided that the phrase “THIS DOCUMENT IS NOT VALID FOR CLAIM OF INPUT TAX” is stamped on the face of the document. Other equivalent documents such as Collection Receipt, Acknowledgement Receipt, and Payment Receipt are all the same, serve as proof of payment that cash has been received, or that payment has been collected/made.
1.2 Unused ORs can be converted into INVOICE and can be used as primary invoice until December 31, 2024, provided that taxpayers shall strikethrough the word “Official Receipt” on its face.
These documents shall be valid for the claim of input tax by the buyer/purchaser for the period issued from January 22 to December 31, 2024, provided that the invoice bears the stamped “Invoice” and contains the necessary information required in Section 6(B) of the RR 7-2024.
Any ORs, whether stamped with “Invoice” or unstamped, issued after December 31, 2024, will be considered supplementary documents and ineligible for input tax claims.
1.3 Stamping of ORs as invoices does not require BIR approval but must comply with the reporting requirements laid down under these regulations within 30 days from April 27, 2024 (i.e., on or before May 27, 2024).
1.4 An inventory of all unused manual and loose leaf ORs to be converted as Invoice shall be submitted to the BIR on or before May 27, 2024. The report should contain the number of booklets and the corresponding serial numbers. In case of branch reporting, the receiving Branch RDO shall transmit the original copy to the Head Office RDO and retain the duplicate copy.
2. On Cash Register Machines (CRM), Point-of-Sales (POS) Machines, E-Receipting or Electronic Invoicing Software
2.1 Taxpayers using CRM/POS/E-receipting/E-invoicing may change the word “Official Receipt (OR)” to “Invoice,” “Cash Invoice” “Charge Invoice,” etc., whichever may be applicable, without the need to notify the RDOs having jurisdiction over the place of business of such sales machines.
This reconfiguration shall be considered a minor system enhancement which shall not require reaccreditation of the system on the part of the software supplier nor the reissuance of the Permit to Use (PTU) on the part of the taxpayer-user.
The serial number of the renamed Invoice shall start by continuing the last series of the previously approved OR and submit notice, indicating the starting serial number of the converted invoice, to the BIR where the machines are registered, in duplicate original copies. The receiving Branch RDO shall transmit the duplicate copy to the Head Office RDO.
2.2 Taxpayers using duly registered Computerized Accounting System (CAS) or Computerized Books of Accounts (CBA) with Accounting Records, need to revisit their system since the system reconfiguration will have a direct impact on the financial aspect. Consequently, this major system enhancement necessitates an update of their system registration by filing a new application. The previously issued Acknowledgement Certificate (AC) or Permit to Use (PTU) shall be surrendered to the BIR, and a new AC shall be issued.
Reconfiguration and adjustment of the system shall be undertaken on or before June 30, 2024. Extension due to system enhancements requires BIR prior approval.
BIR ISSUES IRR ON AMENDMENTS INTRODUCED BY EASE OF PAYING TAXES LAW ON VAT & PERCENTAGE TAX
APRIL 11, 2024
Revenue Regulations (RR) No. 3-2024 implements the amendments introduced by Republic Act (R.A.) No. 11976, otherwise known as the Ease of Paying Taxes Law, on the relevant provisions of Title IV-Value-Added Tax (VAT) and Title V-Percentage Tax of the 1997 Tax Code, as amended.
Highlights include:
1. All references to "gross selling price", "gross value in money", and "gross receipts" shall now be referred to as the "GROSS SALES", regardless of whether the sale is for goods under Section 106, or services under Section 108 of the Tax Code.
2. The term “Invoice” will also now be used instead of Sales/Commercial Invoices or Official.
3. All references to “receipts or payments” which was previously the basis for the recognition of sales of service under Title IV (VAT) and Title V (Percentage Tax) of the Tax Code, shall now be referred to as "BILLING" or "BILLED", whichever is applicable.
4. All provisions mentioning the VAT-exempt threshold of Php 3 million shall now be read as "the amount or VAT threshold herein stated shall be adjusted to its present value every three (3) years using the Consumer Price Index (CPI), as published by the Philippine Statistics Authority (PSA)”
5. Output VAT credit on uncollected receivables may be allowed on the next quarterly VAT compliance after the lapse of the agreed upon period to pay provided that the seller has fully paid the VAT on the transaction and the VAT component of the uncollected receivables has not been claimed as allowable deduction under Section 34(E) of the Tax Code.
Uncollected receivable refers to sales of goods and/or services on account that transpired upon the effectivity of RR No. 3-2024 (i.e., April 27, 2024) which remain uncollected by the buyer despite the lapse of the agreed period to pay.
To be entitled to output VAT credit, the following requisites must be present:
5.1 The sale or exchange has taken place after the effectivity of RR No. 3-2024 (i.e., April 27, 2024);
5.2 The sale is on credit or on account;
5.3 There is a written agreement on the period to pay the receivable;
5.4 The VAT is separately shown on the invoice;
5.5 The sale is specifically reported in the Summary List of Sales covering the period when the sale was made and not reported as part of "various" sales;
5.6 The seller declared in the tax return the corresponding output VAT indicated in the invoice within the period prescribed under existing rules;
5.7 The period agreed upon, whether extended or not, has elapsed; and
5.8 The VAT component of the uncollected receivable was not claimed as a deduction from gross income.
In case of recovery of uncollected receivables, the output VAT pertaining thereto shall be added to the output VAT during the period of recovery.
Conditions on the deductibility of bad debts expenses in the income tax returns as provided in RR No. 25-02 remain.
6. A VAT-registered person whose registration has been canceled due to retirement from or cessation of business, or due to changes in or cessation of status, can apply for refund or Tax Credit Certificate of unused input tax within two (2) years from the date of cancellation. For business cessation, the cancellation date is the issuance of BIR Tax Clearance.
In case of full or partial denial of the claim for tax refund, the taxpayer may, within thirty (30) days from the receipt of the decision denying the claim, may appeal the decision with the Court of Tax Appeals (CTA).
In case of inaction on the part of the BIR to act on refund within the 90-day period, the taxpayer may:
6.1 appeal to the CTA within the 30-day period after the expiration of the 90-day period; or
6.2 forego the judicial remedy and await the final decision of the Commissioner on the application of VAT refund claim.
7. The verification and processing of VAT refund claims shall now be risk-based approach and will be classified into low, medium, and high-risk, depending on factors such as the amount of VAT refund claim, tax compliance history, and frequency of filing VAT refund claims. Medium and high-risk claims will undergo audit or verification following the BIR's annual national audit program.
8. Refunds shall be subject to post-audit by the Commission on Audit (COA) following the risk-based classification. If the COA disallows a refund, only the taxpayer is responsible for the disallowed amount, but any BIR employee found grossly negligent may face administrative consequences.
9. RR No. 3-2024 shall apply to the sale of services that transpired upon its effectivity on April 27, 2024. For outstanding receivables on services rendered before April 27, 2024, the output VAT shall be declared in the quarterly VAT return upon collection. The collection shall be supported with an Invoice following the transitory provisions contained in the RR No. 7-2024 (IRR on invoicing) or the new BIR-approved set of Invoices, whichever is applicable.
The newly introduced output tax credit on uncollected receivables under Section 4.110-9 of these regulations applies only to transactions after April 27, 2024. No output tax credit is allowed for outstanding receivables from sales of goods on account made prior to April 27, 2024.
BIR TAX ADVISORY ON THE FILING OF 2023 ANNUAL ITR DUE ON OR BEFORE APRIL 15, 2024
MARCH 25, 2024
In a Tax Advisory, the BIR has advised the taxpayers on the following in line with the 2023 Annual Income Tax Returns (AITR) filing due for submission on or before April 15, 2024:
1. Taxpayers needing assistance may visit the BIR’s Tax Assistance Center (TAC) at the BIR National Training Center (NTC)-Auditorium from March 23 to April 15, 2024, except Sundays and Holidays from 8:00 AM to 5:00 p.m. Desktop computers are provided for the electronic filing either through eBIRForms or eFPS, and online tax payments through ePayment channels. TAC personnel shall accept returns of taxpayers regardless of jurisdiction.
2. All taxpayers shall electronically file their AITR. No manual filing, except:
2.1 Senior Citizen (SC) or Persons with Disabilities (PWDs) filing their own tax returns.
2.2 Employees deriving purely compensation income from two or more employers, concurrently or successively at any time during the taxable year, or from a single employer, although the income of which has been correctly subjected to withholding tax, but whose spouse is not entitled to substituted filing.
2.3 Employees qualified for substituted filing but opted to file an ITR and are filing for purposes of promotion, loans, scholarships, foreign travel requirements, etc.
3. No need to submit printed copy of electronically filed returns for stamping.
BIR ANNOUNCES THE AVAILABILITY OF BIR FORM 1701 IN THE EFPS
MARCH 14, 2024
Revenue Memorandum Circular (RMC) No. 39-2024 announces the availability of BIR Form No. 1701 in the Electronic Filing and Payment System (eFPS). The form shall be filed on or before April 15 of each year covering income for the preceding taxable year. eFPS filers who are mandated and required to file the said return shall use the eFPS facility effective immediately. For those who already filed their BIR Form 1701 need not refile the return in the eFPS.
BIR ANNOUNCES THE AVAILABILITY OF TIN INQUIRY THROUGH EMAIL
MARCH 14, 2024
Revenue Memorandum Circular (RMC) No. 37-2024 announces the availability of Tax Identification Number (TIN) Inquiry through an electronic mail at tin.inquiry@bir.gov.ph.
BIR CLARIFIES THE MANNER OF COMPUTING THE MINIMUM CORPORATE INCOME TAX (MCIT) FOR TAXABLE YEAR 2023
MARCH 11, 2024
Revenue Memorandum Circular (RMC) No. 36-2024 clarifies the manner of computing the Minimum Corporate Income Tax (MCIT) for taxable year 2023. From the prescribed 1% MCIT under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, the rate shall revert back to 2% based on the gross income of the corporation effective July 1, 2023.
In computing the MCIT for 2023, the following shall be followed:
a. Gross income shall be divided by 12 months to get the monthly average income.
b. Apply the rate of 1% for the period January 1 to June 30, 2023.
c. Apply the rate of 2% for the period July 1 to December 31, 2023.
BIR ISSUES A TAX REMINDER ON THE REGISTRATION & SUBMISSION OF SWORN DECLARATIONS BY ONLINE SELLERS ON OR BEFORE APRIL 15, 2024
MARCH 6, 2024
In a Tax Reminder, the BIR has reminded taxpayers who are engaged in sale of goods and services in electronic marketplaces to register their business and submit their Sworn Declaration to their respective Revenue District Office (RDO) on or before April 15, 2024, following Annex A of Revenue Memorandum Circular (RMC) No. 8-2024. In case of non-submission of the said declaration regardless of the actual total income or gross remittance, the imposition of withholding tax (1% of ½ of the gross remittances) shall automatically be deducted by the e-marketplace operator and Digital Financial Services Providers (DFSP) from the gross remittances of the sellers/merchants. The BIR-received declaration shall be submitted to the e-marketplace operator or DFSP should the gross remittances exceed Php 500,000 at any time during the taxable year.
BIR CLARIFIES TIN VERIFICATION BEING REQUIRED BY EMPLOYERS FROM NEWLY HIRED EMPLOYEES
FEBRUARY 27, 2024
Revenue Memorandum Circular (RMC) No. 31-2024 advises all employers that the BIR does not require newly hired employees to verify their Tax Identification Number (TIN) and get a TIN Verification Slip from the Revenue District Offices (RDO). All RDOs shall not accept requests for manual TIN Verification or issue TIN Verification slip for employment purposes, except for the following cases:
a. The online TIN Verification facility is not available or there is a prompt message that the user needs to visit the RDO.
b. There is a need for BIR personnel to further verify the correctness of taxpayer registration information.
c. The taxpayer has an existing TIN or record.
d. Possession of multiple or identical TINs.
All employers are advised to use the BIR's Online TIN Verification facility of the Online Registration and Update System (ORUS) accessible at https://orus.bir.qov.ph/search/tinverification or BIR Chatbot Revie, to verify the validity and correct ownership of the TIN of their newly hired employees. The verification result being displayed by ORUS or Revie is considered sufficient for verification purposes.
BIR RELEASES THE UPDATED VERSION OF THE ALPHALIST DATA ENTRY & VALIDATION MODULE (VERSION 7.2)
FEBRUARY 26, 2024
Revenue Memorandum Circular (RMC) No. 29-2024 extends the deadline for the submission of the Certificate of Compensation Payment/Tax Withheld (BIR Form No. 2316) from February 28, 2024 to March 31, 2024.
Highlights include:
1. Only the following documents shall be required in relation to the submission of the said form:
1.1 Sworn Declaration (Annex “C”) under Revenue Regulations (RR) No. 2-2015; and
1.2 Certification of the List of Employees Qualified for Substituted Filing of their Income Tax Return (Annex “F”) under RR No. 11-2018.
2. The submission of BIR Form 2316 without the employee’s signature shall no longer be acceptable, especially for those who are availing the substituted filing.
3. Taxpayers who have already submitted a copy of the certificate using the old format (2018 version) shall no longer need to resubmit the same using the new format (2021 version), provided that the computation reflected thereon is based on the 2023 income tax rates.
BIR REMINDS ALL AUTHORIZED AGENT BANKS (AABs) TO ACCEPT TAX RETURNS/PAYMENTS OF INTERNAL REVENUE TAXES ON APRIL 6 & APRIL 13, 2024
FEBRUARY 20, 2024
Bank Bulletin No. 2024-1 directs all BIR AABs to open two (2) Saturdays prior to the April 15 Annual Income Tax deadline, specifically on April 6, 2024 and April 13, 2024. Thus, AABs are reminded to open and accept all tax returns/payments for the period April 1 to April 15, 2024, and extend banking hours up to 5:00 PM for the same period. Moreover, all tax payments that will be accepted on April 6 and April 13, 2024, shall be reported in the Batch Control Sheet (BCS) as a collection for the following working day, April 8, 2024, and April 15, 2024, respectively. However, the machine validation of the Annual Income Tax Returns (AITR) and the submission of the BCS and its corresponding supporting documents and attachments shall be in accordance with the existing procedures.
BIR RELEASES THE UPDATED VERSION OF THE ALPHALIST DATA ENTRY & VALIDATION MODULE (VERSION 7.2)
FEBRUARY 16, 2024
In a Tax Advisory, the BIR has released the updated version of the Alphalist Data Entry and Validation Module (Version 7.2). The enhanced version now includes the 5% tax credit incentive under the Republic Act (R.A.) No. 9505, otherwise known as the Personal Equity and Retirement Account (PERA) Act of 2008 and the revised income tax rates for taxable year 2023 under R.A. 10963 (TRAIN Law).
Those taxpayers with their own extract program shall strictly observe the revised file structures and standard naming convention under Revenue Memorandum Circular (RMC) No. 25-2024. The Alphalist shall be submitted within thirty (30) days from the date of posting of the Tax Advisory in the BIR website pursuant to the RMC to be issued.
BIR AMENDS THE EARLIER CIRCULAR ON THE DEADLINE FOR THE SUBMISSION OF ALPHABETICAL LIST OF EMPLOYEES/PAYEES
FEBRUARY 13, 2024
Revenue Memorandum Circular (RMC) No. 25-2024 amends the earlier circular on the deadline for the submission of the alpha list for the taxable year 2023. The deadline shall be 30 days from the date of posting of the tax advisory on the BIR website announcing the availability of the new version of the Alpha list Data Entry and Validation Module. Those taxpayers with their own extract program shall strictly observe the attached revised file structures and standard naming convention from Annexes “A” and “B". The taxpayer shall re-submit the alpha list using the updated version of the module upon its availability in case the same were submitted using the old version.
BIR RENAMES RDO NO. 45-MARIKINA CITY TO RDO NO. 45-SMART & REITERATES ITS AREAS OF JURISDICTION
FEBRUARY 13, 2024
Revenue Administrative Order (RAO) No. 2-2024 renames Revenue District Office (RDO) No. 45-Marikina City to RDO No. 45-SMART (San Mateo-Marikina-Antipolo- Rodriguez-Teresa) with reiteration on the areas of jurisdiction and the new location of its district office at 2nd floor and 3rd floor, Xentro Building 2, Sumulong Highway, Barangay Mambugan, Antipolo City.
BIR ANNOUNCES THE AVAILABILITY OF BIR FORM 1702-EXv2 IN THE EFPS
FEBRUARY 12, 2024
Revenue Memorandum Circular (RMC) No. 22-2024 announces the availability of BIR Form 1702-EX January 2018 (ENCS) v2 in the Electronic Filing and Payment System (eFPS).
BIR CLARIFIES THE TAX TREATMENT OF INTEREST PAID OR INCURRED ON INDEBTEDNESS
FEBRUARY 5, 2024
Revenue Memorandum Circular (RMC) No. 19-2024 clarifies the tax treatment of interest expense paid or incurred on indebtedness in connection with the taxpayer’s profession, trade or business and other related matters.
BIR EXTENDS THE DEADLINE FOR THE SUBMISSION OF ALPHABETICAL LIST OF EMPLOYEES FROM JANUARY 31, 2024 TO FEBRUARY 28, 2024
JANUARY 26, 2024
Revenue Memorandum Circular (RMC) No. 16-2024 extends the deadline for the submission of the alpha list for the taxable year 2023 to February 28, 2024. A separate Tax Advisory shall be posted in the BIR website on the availability of the new version of the Alpha list Data Entry and Validation Module to reflect the 5% tax incentive under the Republic Act (R.A.) No. 9505, otherwise known as the Personal Equity and Retirement Account (PERA) Act of 2008, the revised income tax rates for the taxable year 2023 under R.A. 10963 (TRAIN Law), updated BIR Form 2316, and the schedules on the alpha list of employees/payees.
For taxpayers with employees availing 5% tax credit under the PERA Act who have not yet submitted their alpha list for the taxable year 2022, the deadline for submission shall be 30 days from the date of posting of the tax advisory on the BIR website announcing the availability of the revised data entry module.
BIR CEASES THE PAYMENT OF ANNUAL REGISTRATION FEE PURSUANT TO EASE OF PAYING TAXES ACT
JANUARY 24, 2024
Revenue Memorandum Circular (RMC) No. 14-2024 announces that the BIR will cease collecting the Annual Registration Fee (ARF) of Php 500, both for new business and renewal, effective January 24, 2024, in compliance with the Republic Act (R.A.) No. 11976, otherwise known as the Ease of Paying Taxes Act. Taxpayers may choose to update/replace their Certificate of Registration (COR) at their convenience. This can be done by surrendering their old COR on or before December 31, 2024.
BIR CLARIFIES THE TREATMENT OF FOREIGN CURRENCY TRANSACTIONS FOR FINANCIAL REPORTING & INTERNAL REVENUE TAX PURPOSES
JANUARY 22, 2024
Revenue Memorandum Circular (RMC) No. 12-2024 clarifies the difference between the treatment of foreign exchange (forex) gains/losses recognized in the financial statements prepared under the Philippine Financial Reporting Standards (PFRS)/Philippine Accounting Standards (PAS) and the forex gains/losses recognized as income or allowable deductions for income tax purposes pursuant to 1997 Tax Code, as amended, and related revenue issuances.
BIR CLARIFIES THE TAX TREATMENT OF LEASE ACCOUNTING UNDER PFRS & TAX CODE
JANUARY 22, 2024
Revenue Memorandum Circular (RMC) No. 11-2024 clarifies the tax treatment of lease accounting by lessees under Philippine Financial Reporting Standard (PFRS) 16 in relation to the provisions of Sections 34(A), 34(K), 106, 108, 179, 194 of the 1997 Tax Code, as amended, and Revenue Regulations (RR) No. 19-86, as amended, and RR No. 02-98, as amended.
BIR IMPLEMENTS THE ADJUSTMENT OF THE SELLING PRICE THRESHOLD OF THE SALE OF HOUSE & LOT & OTHER RESIDENTIAL DWELLINGS FOR VAT EXEMPTION PURPOSES
JANUARY 15, 2024
Revenue Regulations (RR) No. 1-2024 further amends Section 2, Sub-section 4.109-1 (B)(p) of RR No. 4-2021, as amended by RR No. 8-2021, by adjusting the selling price threshold of the sale of house and lot, and other residential dwellings from its current amount of Php 3,199,200.00 to Php 3,600,000.00 for Value-Added Tax (VAT) exemption purposes.
The adjustment was made by virtue of Section 109 (P) of the 1997 Tax Code, as amended, which mandates that every three (3) years the subject amount should be adjusted to its present value using the Consumer Price Index (CPI) as published by the Philippine Statistics Authority (PSA).
BIR CLARIFIES SURCHARGE COMPUTED IN THE FILING OF AN AMENDED RETURNS IN THE eFPS
JANUARY 15, 2024
Revenue Memorandum Circular (RMC) No. 9-2024 clarifies that the surcharge calculated by the Electronic Filing and Payment System (eFPS) should be disregarded when filing an amended tax return, provided the initial tax return was filed on or before the set deadline. If additional tax is incurred in the amended tax return, only basic tax, computed interest, and compromise penalty shall be paid.
BIR CLARIFIES THE PROPER TAX TREATMENT OF CROSS-BORDER SERVICES IN LIGHT OF THE SUPREME COURT DECISION IN ACES PHILIPPINES CELLULAR SATELLITE CORPORATION
JANUARY 10, 2024
Revenue Memorandum Circular (RMC) No. 5-2024 further clarifies the proper tax treatment of cross-border services in light of the Supreme Court (SC) En Banc Decision in Aces Philippines Cellular Satellite Corp. v. Commissioner of Internal Revenue, GR. No. 226680, dated August 30, 2022. Specifically, it clarifies circumstances that may warrant the imposition of Final Withholding Tax (FWT) on income payments abroad as a result of the decision of the SC affirming the earlier decision of the Court of Tax Appeals (CTA) upholding the BIR’s imposition of FWT on satellite airtime fee payments by Aces Philippines (payor/withholding agent) to Aces Bermuda (payee/income earner), a Non-Resident Foreign Corporation (NRFC), for the satellite airtime services it provided to Aces Philippines.
Highlights include:
1.The jurisdiction where the economic activity occurs should have the right to tax the income derived from that activity, regardless of where the payment is made or received.
2. The source of income is determined by the location of the business activity rather than the disbursement or receipt of funds.
3. Cross-border services include (a) consulting services (b) IT outsourcing (c) financial services (c) telecommunications, (d) engineering and construction (e) education and training, (f) tourism and hospitality, and (f) other similar services.
4. The application of benefits-received theory:
4.1 It is imperative to ascertain whether the particular stages occurring in the Philippines are integral to the overall transaction such that the business activity would not have been accomplished without the Philippine activities. If the income-generating activities in the Philippines are deemed essential, the income derived from these activities is considered sourced from the Philippines for tax purposes.
4.2 If the service provider is located outside the country, if the service is utilized, applied, executed, or consumed for a recipient within the Philippines, the income payment for such a service is considered sourced within the country, and thus, the VAT is applicable.
BIR REDEFINES THE AREAS OF JURISDICTION OF RDO NO. 50-SOUTH MAKATI & RDO NO. 44-TAGUIG CITY-PATEROS
JANUARY 5, 2024
Revenue Administrative Order (RAO) No. 1-2024 issued on January 5, 2024, redefines the areas of jurisdiction of Revenue District Office (RDO) No. 50-South Makati City and RDO No. 44-Taguig City in view of the December 1, 2021 Supreme Court (SC) decision on the disputed territorial jurisdiction between Taguig City and Makati City.
BIR IMPOSES WITHHOLDING TAX ON GROSS REMITTANCES MADE BY ELECTRONIC MARKETPLACE OPERATORS & DIGITAL FINANCIAL SERVICES PROVIDED TO SELLERS/MERCHANTS
DECEMBER 21, 2023
Revenue Regulations (RR) No. 16-2023 further amends the provisions of Revenue Regulations (RR) No. 2-98, as amended, to impose withholding tax on gross remittances made by electronic marketplace operators and digital financial services providers to sellers/merchants.
Highlights include:
1. The imposition of 1% on ½ of the gross remittances of the online platform providers to the sellers of the goods and services.
2. The withholding tax shall not apply in the following cases:
2.1 If the annual total gross remittances to an online merchant for the past taxable year have not exceeded Php 500,000;
2.2 If the cumulative gross remittances to an online merchant in a taxable year has not yet exceeded Php 500,000;
2.3 If the online merchant is duly exempt from or subject to a lower income tax rate pursuant to any existing law or treaty with proof of entitlement to be submitted to online platform providers.
3. Electronic marketplace, for withholding tax purposes, includes marketplace for online shopping, food delivery platforms, platforms for booking of resort, hotel, motel, inn, house, condominium unit, bed space, room for rent and other similar lodging accommodations located in the Philippines, and other similar online service or product marketplaces.
BIR SUSPENDS ALL AUDIT & OTHER FIELD OPERATIONS
DECEMBER 13, 2023
Revenue Memorandum Order (RMO) No. 39-2023 suspends all audit and other field operations of the BIR effective December 16, 2023, up to January 7, 2024.
BIR ANNOUNCES THE AVAILABILITY OF THE OFFLINE eBIR FORMS PACKAGE VERSION 7.9.4.1
DECEMBER 1, 2023
Revenue Memorandum Circular (RMC) No. 122-2023 announces the availability of the improved version of the offline eBIRForms Package Version 7.9.4.1. The new version updates the Alphanumeric Tax Code (ATCs) in BIR Form 1702-RT, the income tax rate on BIR Forms 1700, 1701, and 1701A, and bug fixes on BIR Form 1702-MX.
BIR ANNOUNCES NEW FEATURES OF ORUS
NOVEMBER 29, 2023
Revenue Memorandum Circular (RMC) No. 121-2023 announces additional features and functionalities of the Online Registration and Update System (ORUS) starting November 21, 2023. These include Tax Identification Number (TIN) inquiry, access to digital TIN ID, and an online payment facility MyEG.
BIR CIRCULARIZES THE AVAILABILITY OF DIGITAL TIN ID
NOVEMBER 29, 2023
Revenue Memorandum Circular (RMC) No. 120-2023 announces the availability of the Digital Tax Identification Number (TIN) as an additional functionality and feature of the BIR Online Registration and Update System (ORUS) starting November 21, 2023. Instead of visiting and falling in line in BIR Revenue District Offices (RDOs) to secure a physical TIN card, taxpayers are advised to secure the Digital TIN ID online. The circular also highlights the policies and guidelines prescribed for the use and acceptance of the BIR Digital TIN ID.
BIR AMENDS THE PERTINENT PROVISIONS ON CREDITABLE WITHHOLDING TAX FOR JOINT VENTURES/CONSORTIUMS
NOVEMBER 10, 2023
Revenue Regulations (RR) No. 14, 2023 further amends the pertinent provisions of Revenue Regulations (RR) No. 2-98, as amended by adding items (V) and (W) to impose Creditable Withholding Tax on certain income payments by joint ventures/consortiums. Specifically, income payments made by joint ventures, whether incorporated or not, taxable or non-taxable, to their local/resident supplier of goods and services shall be subjected to 1% and 2%, respectively. Likewise, the distributive share of co-venturers/members from the net income of the joint venture/consortium not taxable as corporation shall be subjected to 15% withholding tax for each co-venturer/member from the net income of the joint venture/consortium not taxable as corporation prior to actual or constructive distribution thereof.
BIR PRESCRIBES THE POLICIES & GUIDELINES FOR THE OPTIONAL VAT REGISTRATION OF REGISTERED BUSINESS ENTERPRISES CLASSIFIED AS DOMESTIC MARKET ENTERPRISES UNDER THE 5% GROSS INCOME TAX PURSUANT TO CREATE LAW
NOVEMBER 10, 2023
Revenue Regulations (RR) No. 13-2023 prescribes the policies and guidelines for the optional Value-Added Tax (VAT) registration of Registered Business Enterprises (RBEs) classified as Domestic Market Enterprises (DMEs) under the 5% Gross Income Tax (GIT) during the transitory period pursuant to Rule 18, Section 5 of the amended Implementing Rules and Regulations (IRR) of Republic Act (R.A.) No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE Act).
Highlights include:
a. RBE-DME can retain a 5% GIE incentive for ten (10) years under Section 311(C) of the CREATE Act.
b. RBE-DME can register as a VAT taxpayer by obtaining a Certification from the relevant Investment Promotion Agency (IPA) expressly stating that the 5% GIE shall be in lieu of all taxes except VAT. The Certification, accompanied by a request letter and a notarized "Deed of Waiver," is submitted to the IPA.
c. The waiver is irrevocable and applicable throughout the remaining transitory period.
d. Non-VAT registered RBEs with Certification must update their status with the Revenue District Office (RDO).
e. The regulations shall apply prospectively under Section 3 of the amended IRR of CREATE.
f. DMEs opting for VAT registration cannot claim refunds for transactions preceding the amended IRR's effectivity.
BIR CLASSIFIES THE COST RELATED TO GOVERNMENT-GRANTED LICENSES OR RIGHTS FOR PUBLIC SERVICES INCLUDING PUBLIC UTILITY AS ADMINISTRATIVE COSTS RATHER THAN DIRECT COSTS OF SERVICES
OCTOBER 31, 2023
Revenue Memorandum Circular (RMC) No. 115-2023 classifies the costs associated with franchises, concessions, licenses, rights, operations agreements, or similar arrangements (herein referred to as Licenses or Rights) granted by the government to operate a public service, including public utility as an Administrative Cost instead of "Direct Cost of Services," for purposes of computing the gross income to determine the Optional Standard Deduction (OSD) under Section 34 (L) of the Tax Code of 1997, as amended by Section 3 of Republic Act (RA) No. 9504, or the law amending the list of deductions from gross income. Specifically, the circular clarifies that the cost related to government-granted licenses or rights for public services including public utility should be classified as administrative costs rather than direct cost of services. Public service Licenses or Rights, as intangible assets, represent exclusive privileges granted by the government. The associated costs are typically capitalized and amortized over the agreement's life. On the other hand, administrative costs cover general business management, and legal fees are incurred in obtaining these licenses. Despite not being directly tied to production, these rights are crucial for specific industry operations, providing a legal framework, and ensuring market advantages. The categorization of the costs associated with Licenses or Rights as administrative costs, implies a separate treatment when calculating gross income for tax purposes, impacting taxable income and the Optional Standard Deduction (OSD) application.
BIR ANNOUNCES THE AVAILABILITY OF TAXPAYER REGISTRATION-RELATED APPLICATIONS (TTRA) PORTAL
OCTOBER 13, 2023
Revenue Memorandum Circular (RMC) No. 109-2023 announces the availability of Taxpayer Registration-Related Applications (TRRA) Portals as part of the BIR’s commitment to modernize tax administration and enhance the convenience of registration. The TRRA Portal is an alternative option that can be used by taxpayers to submit registration-related applications through email. The circular also highlights the required documents to be submitted electronically and the procedures to be followed to access the portal through BIR eServices.
BIR CIRCULARIZES THE NEW DAILY MINIMUM WAGE RATES IN CERTAIN SECTORS/INDUSTRIES UNDER REGION III (CENTRAL LUZON) EFFECTIVE OCTOBER 16, 2023
OCTOBER 10, 2023
Revenue Memorandum Circular (RMC) No. 108-2023 circularizes the New Daily Minimum Wage Rates in certain sectors/industries under Region III (Central Luzon) as prescribed in Wage Order No. RBIII-24. Effective October 16, 2023, the minimum wage earners in the private sector in Region III shall receive the amount of Php 40.00 increase in the basic wage per day. The Wager Order was approved on September 19, 2023, and published in The Manila Bulletin on September 30, 2023.
BIR CIRCULARIZES THE NEW DAILY MINIMUM WAGE RATES IN REGION II (CAGAYAN VALLEY) EFFECTIVE OCTOBER 16, 2023
OCTOBER 10, 2023
Revenue Memorandum Circular (RMC) No. 107-2023 circularizes the New Daily Minimum Wage Rates in certain sectors/industries under Region II (Cagayan Valley), as prescribed in Wage Order No. RTWPB 2-22. Effective October 16, 2023, the minimum wage earners in the private sector in Region II shall receive the amount of Php 30.00 increase in the basic wage per day. The Wage Order was approved on September 13, 2023, and published at Northern Forum on September 30, 2023.
BIR CIRCULARIZES THE NEW DAILY MINIMUM WAGE RATES IN SOCCSKSARGEN EFFECTIVE OCTOBER 16, 2023
OCTOBER 10, 2023
Revenue Memorandum Circular (RMC) No. 106-2023 circularizes the New Daily Minimum Wage Rates in certain sectors/industries under Region XII (SOCCSKSARGEN), as prescribed in Wage Order No. RB XII-23. Effective October 16, 2023, the minimum wage earners in the private sector in Region XII shall receive the amount of Php 35.00 increase in the basic wage per day. The Wage Order was approved on September 21, 2023, and published at Brigada News Philippines on September 30, 2023.
BIR CLARIFIES THE APPLICABLE TAXES DUE ON SALE OF REAL PROPERTY CONSIDERED ORDINARY ASSET
OCTOBER 3, 2023
Revenue Memorandum Circular (RMC) No. 99-2023 clarifies the applicable taxes due on the sale of real property considered ordinary assets to have a uniform application of tax laws and regulations pertaining to transfers/sales of real properties classified as “ordinary assets” across all offices processing Electronic Certificate Authorizing Registration (eCAR). The circular provides detailed explanations covering areas of concern such as the proper classification of assets if ordinary or capital, invoicing compliance, documentary requirements, and other related tax consequences.
BIR ISSUES IRR ON THE ISSUANCE OF RECEIPTS OR SALES OR COMMERCIAL INVOICES BY AGRICULTURAL PRODUCERS
OCTOBER 2, 2023
Revenue Regulations (RR) No. 12-2023 implements Section 237 of the 1997 Tax Code, as amended, relative to the issuance of receipts or sales or commercial invoices by Agricultural Producers. Highlights include the exemption of Agricultural Producers from the issuance of receipts/invoices on their sale of agricultural products for yearly sales not exceeding Php 1 Million, registration, bookkeeping, and other administrative requirements.
BIR REITERATES RULES ON THE WITHHOLDING OF TAXES FOR THE SALE OF REAL PROPERTY ON INSTALLMENT
SEPTEMBER 29, 2023
Revenue Memorandum Order (RMO) No. 33-2023 reiterates Section 3 J of the Revenue Regulation (RR) No. 17-2003 on the withholding of taxes for the sale, exchange, or transfer of real property on installment plan and classified as an ordinary asset, wherein the payments in the year of sale do not exceed 25% of the selling price.
Highlights include:
a. If the buyer is an individual not engaged in trade or business, no withholding is required to be made on the periodic installment payments. The applicable rate of tax based on the Gross Selling Price (GSP) or Fair Market Value (FMV) of the property at the time of the execution of the Contract to Sell, whichever is higher, shall be withheld on the last installment or installments immediately prior to such last installment if the last installment is not sufficient to cover the tax due, to be paid to the seller until the tax is fully paid.
b. If the buyer is engaged in trade or business, whether a corporation or otherwise, the tax shall be deducted and withheld by the buyer from every installment, which tax shall be based on the ratio of actual collection of the consideration against the agreed consideration appearing in the Contract to Sell applied to the GSP or FMV of the property at the time of the execution of the Contract to Sell, whichever is higher.
c. The term 'consideration' refers to the selling price exclusive of interest. Interest earned as an incident of installment payment, if any, shall be subject to the ordinary income tax rate.
d. No Certificate Authorizing Registration (CAR)/Tax Clearance Certificate (TCL) shall be issued to the buyer unless the withholding tax due on the sale, transfer, or exchange of real property has been fully paid.
BIR PROVIDES TAX COMPLIANCE REMINDERS TO ALL CANDIDATES & OTHER PARTICIPANTS IN ANY NATIONAL OR LOCAL ELECTIONS, INCLUDING BARANGAY OR SANGGUNIAN KABATAAN (SK) ELECTIONS
SEPTEMBER 22, 2023
Revenue Memorandum Circular (RMC) No. 97-2023 provides tax compliance reminders to all candidates and other participants in any national or local elections, including Barangay or Sangguniang Kabataan (SK) Elections.
Highlights include:
1. Bureau of Internal Revenue (BIR) registration and payment of registration fees are not prerequisites for filing a certificate of candidacy for any national or local elections, including Barangay or SK elections. A candidate may, however, register with the BIR as a taxpayer under Executive Order (E.O.) No. 98 to get a Tax Identification Number (TIN), which he may use in government transactions. He shall not be required to pay the annual registration fee.
2. Candidates who later engage in business, have purchased goods and/or services for the campaign and election activities, have received donations and campaign contributions, or, in general, have income payments subject to Withholding Tax must register or update their BIR registration details with the Revenue District Office (RDO) where such candidate is registered and pay the corresponding registration fee.
3. Income payments made by political parties and candidates of any national and local elections, including Barangay and SK elections, on all their purchase of goods and services related to campaign expenditures, and income payments made by individuals or juridical persons for their purchases of goods and services intended to be given as campaign contributions to political parties and candidates shall be subject to five percent (5%) Creditable Withholding Tax (CWT).
4. All candidates must maintain a record of contributions, donations, and expenditures, which will be used for the Statement of Contributions and Expenditures (SOCE) submitted to the Commission on Elections (COMELEC).
5. All candidates receiving donations and campaign contributions shall purchase from the RDO where they are registered, the Non-VAT BIR Printed Receipts (BPR) to be issued for every contribution in cash or in kind. For contribution in kind, it shall be valued at Fair Market Value (FMV).
6. All candidates who fail to register and comply with the requirements of the BIR will be subject to penalties under existing laws and issuances.
BIR CIRCULARIZES NEW DAILY MINIMUM WAGE RATES IN CENTRAL VISAYAS EFFECTIVE OCTOBER 1, 2023
SEPTEMBER 19, 2023
Revenue Memorandum Circular (RMC) No. 96-2023 circulates the new daily minimum wage rates in certain sectors/industries under Region VII (Central Visayas), as prescribed in Wage Order No. ROVII-24, which was approved on September 5, 2023, and published in The Freeman Newspaper on September 15, 2023.
BIR CIRCULARIZES THE NEW MINIMUM WAGE FOR CALABARZON EFFECTIVE SEPTEMBER 24, 2023
SEPTEMBER 19, 2023
Revenue Memorandum Circular (RMC) No. 95-2023 circularizes the New Daily Minimum Wage Rates in certain sectors/industries under Region IV-A (CALABARZON) as prescribed in Wage Order No. IVA-20, which was approved on September 5, 2023, and published in Philippine Daily Inquirer on September 8, 2023.
BIR PRESCRIBES THE USE OF E-MAIL & ELECTRONIC SIGNATURE AS AN ADDITIONAL MODE OF SERVICE OF WARRANT OF GARNISHMENT
SEPTEMBER 14, 2023
Revenue Regulations No. 11-2023 prescribes the use of electronic mail (e-mail) and electronic signature as an additional mode of service of the Warrant of Garnishment (WG) pursuant to Section 208 in relation to Section 244 of the 1997 Tax Code, as amended.
BIR CIRCULARIZES AMENDMENTS ON NON-INCOME RELATED TAX INCENTIVES UNDER CREATE LAW
SEPTEMBER 11, 2023
Revenue Memorandum Circular (RMC) No. 91-2023 circularizes the amendment to Rule 18, Section 5 of the Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 11534, or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act. As amended, the Registered Export Enterprises (REEs) whose income tax-based incentives have expired may continue to enjoy Value-Added Tax (VAT) zero-rating on local purchases until the Electronic Sales Reporting System of the Bureau of Internal Revenue (BIR) under Section 237-A of the CREATE Law is fully operational, or until the expiration of the Transitory Period referred to in Section 311 (C) of the CREATE Law, whichever comes earlier. Also, a Registered Business Enterprise (RBE) classified as a Domestic Market Enterprise (DME) which is located inside the economic or freeport zone during the transitory period will be allowed to register as a VAT taxpayer.
BIR CIRCULARIZES THE EXTENSION FOR THE AVAILMENT OF TAX AMNESTY
AUGUST 14, 2023
Revenue Memorandum Circular (RMC) No. 83-2023 circularizes the extension of the period for the availment of the Estate Tax Amnesty until June 14, 2025, pursuant to the Republic Act (R.A.) No. 11956, entitled “An Act Further Amending R.A. No. 11213, otherwise known as the “The Tax Amnesty Act,” as amended by R.A. No. 11569.
BIR AMENDS POLICIES IN THE ISSUANCE OF TVN IN CLAIMING VAT CREDIT/REFUND
AUGUST 10, 2023
Revenue Memorandum Order (RMO) No. 28-2023 amends certain provisions of RMO No. 23-2023 relative to the issuance of Tax Verification Notices (TVNs) in the processing of claims for Value-Added Tax (VAT) credit/refund except those under the authority and jurisdiction of the Legal Group. Specifically, the amendment provides the clarification in the "head of processing offices" mentioned in several provisions under RMO No. 23-2023, including its Annexes and those authorized to issue the respective TVN for VAT credit/refund claims duly filed under their jurisdiction.
It may be recalled that under RMO No. 23-2023, the BIR provides the updated guidelines and prescribes the mandatory documentary requirements and procedures in the processing and grant of VAT credit/refund claims except those under the authority and jurisdiction of the legal group under Sections 112, 204(C) and 229 of the 1997 Tax Code, as amended.
BIR TAX ADVISORY ON THE FILING OF 1701Q USING eFPS
AUGUST 10, 2023
In a Tax Advisory, the BIR has advised individual taxpayers who are mandated to use Electronic Filing and Payment (eFPS), to file BIR Form 1701Q-Quarterly Income Tax Return (ITR) using the eFPS starting with the 2nd Quarter 2023 ITR since the Income Tax rates of BIR Form 1701Q have already been updated in the system. However, taxpayers who already filed and paid their corresponding Income Tax due thereon, if any, need not re-file the said tax returns in the eFPS. Furthermore, no penalty shall be imposed for the wrong venue filing of returns and payment of taxes.
BIR FURTHER CLARIFIES THE IMPLEMENTATION OF RR NO. 3-2023 SPECIFICALLY ON THE VAT ZERO-RATING ON LOCAL PURCHASES OF REGISTERED EXPORT ENTERPRISES
AUGUST 9, 2023
Revenue Memorandum Circular (RMC) No. 80-2023 clarifies issues relative to the implementation of Revenue Regulations (RR) No. 3-2023 and other related concerns on Value-Added Tax (VAT) zero-rate transactions on local purchases of the Registered Export Enterprises (REEs) and other entities granted with VAT zero-rate incentives under special laws and international agreements.
It may be recalled that RR No. 3-2023 provides that local supplier of goods and/or services of REEs shall no longer be required to apply for approval of VAT zero-rating with the BIR. The VAT Zero-Rating Certificate issued by the concerned Investment Promotion Agency (IPA) shall be sufficient for the availment of VAT zero-rating, subject to the post-audit of the BIR.
Highlights include clarifications on transactions with REEs and entities granted with VAT zero-rating incentives under Special Laws and International Agreements, and clarifications on VAT zero-rating certificate/endorsement by appropriate government agency.
BIR ANNOUNCES THE AVAILABILITY OF BIR FORMS 1600-PT, 1600-VT, 1602Q, 1603Q, 2551Q & 2552 IN THE eFPS
AUGUST 8, 2023
Revenue Memorandum Circular (RMC) No. 79-2023 announces the availability of BIR Forms 1600-PT, 1600-VT, 1602Q, 1603Q, 2551Q, and 2552 in the Electronic Filing and Payment System (eFPS).
BIR ISSUES RULES & REGULATIONS ON EXCISE TAX OF PERFUMES & TOILET WATERS
AUGUST 3, 2023
Revenue Regulations (RR) No. 9-2023 prescribes the rules and regulations governing the imposition of excise tax on perfumes and toilet waters as provided under Section 150(b) of the 1997 Tax Code, as amended. Highlights include rate and base of tax, persons liable to excise tax, time, place, and manner of filing of returns and payment of excise tax, and other administrative requirements.
BIR CLARIFIES THE INFORMATION THAT SHALL APPEAR IN RECEIPTS/INVOICES ON PURCHASES OF SENIOR CITIZENS & PERSONS WITH DISABILITIES THROUGH ONLINE OR MOBILE PLATFORMS
JULY 26, 2023
Revenue Regulations (RR) No. 8-2023 clarifies the information that shall appear in the official receipts/sales invoices on purchases of Senior Citizens (SCs) and Persons with Disabilities (PWDs) through online (E-Commerce) or mobile applications, in relation to RR No. 10-2015. The signature of the SC/PWD, as contemplated in RR No. 10-2015, shall not be required for qualified purchases made by SCs/PWDs online or through mobile applications. Nonetheless, the SC/PWD Identification Card number should still be provided by the SC/PWD when purchasing through online or mobile platforms; and the rules on entitlement to the benefits of the SC/PWD and to the tax deduction pursuant to RR No. 7-2010, as amended by RR No. 5-2017 shall be strictly followed.
It may be recalled that under the Joint Memorandum Circular (JMC) No. 01 Series of 2022, it highlights the mandatory benefits of SCs/PWDs even for online transactions provided as there is compliance with the substantiation requirement specifically on the signature of the concerned SCs/PWDs.
BIR PRESCRIBES THE POLICIES & GUIDELINES IN THE PROCESSING OF REQUEST FOR CORPORATE INFORMATION WITH THE SEC
JULY 19, 2023
Revenue Memorandum Order (RMO) No. 26-2023 prescribes the policies, guidelines, and procedures in the processing of requests for corporate information, including beneficial ownership information, with the Securities and Exchange Commission (SEC). The Data Sharing Agreement (DSA) allows the BIR to obtain information on corporations and other registered/licensed entities, including beneficial ownership information. Highlights include what information may be requested from the SEC, who from the BIR can request information, and how to manage the information received from the SEC.
BIR CIRCULARIZES THE NEW DAILY MINIMUM WAGE RATES IN NCR EFFECTIVE JULY 16, 2023
JULY 13, 2023
Revenue Memorandum Circular (RMC) No. 76-2023 circularizes the New Daily Minimum Wage Rates in certain sectors/industries under the National Capital Region (NCR) as prescribed by Wage Order No. NCR-24, which was approved on June 26, 2023, and published in The Philippine Star on June 30, 2023. The Wager Order shall take effect after fifteen (15) days from its publication, or on July 16, 2023.
BIR EXTENDS THE DEADLINE FOR REPLACEMENT OF ASK FOR RECEIPT WITH NOTICE TO ISSUE RECEIPT/INVOICE
JULY 5, 2023
Revenue Memorandum Circular (RMC) No. 75-2023 extends the deadline for the replacement of Ask for Receipt Notice (ARN) with Notice to Issue Receipt/Invoice (NIRI) on or before September 30, 2023.
To secure the NIRI, the taxpayer shall fill out BIR Form 1905-Registration Update Sheet to indicate/update the designated official email address, which will be used by the BIR as an additional manner in serving BIR orders, notices, letters, communications, and other processes to the taxpayers. Business taxpayers who fail to renew on or before September 30, 2023, shall be imposed a penalty of not more than ₱ 1,000.
It may be recalled that under Revenue Regulations (RR) No. 10-2019 and Revenue Memorandum Order (RMO) No. 43-2022, all business taxpayers were mandated to exhibit at their place of business the new BIR Notice to the Public or NIRI to replace their old “Ask for Receipt” until June 30, 2023.
BIR PRESCRIBES THE MANDATORY REQUIREMENTS, GUIDELINES & PROCEDURES IN THE PROCESSING OF VAT REFUND
JUNE 23, 2023
Revenue Memorandum Order (RMO) No. 23-2023 provides the updated guidelines and prescribes the mandatory documentary requirements and procedures in the processing and grant of Value-Added Tax (VAT) credit/refund claims except those under the authority and jurisdiction of the legal group under Section 112, 204(C) and 229 of the 1997 Tax Code, as amended, in line with the latest developments on VAT introduced by Republic Act (R.A.) No. 10963 or the Tax Reform for Acceleration and Inclusion or TRAIN Law and R.A. No. 11534, also known as the Corporate Recovery and Tax Incentives for Enterprises Act or the CREATE Act.
Highlights include the reduction of the number of documentary requirements and non-submission of soft copies of the sales invoices or official receipts in support of purchases and sales of goods or services. Instead, taxpayer claimants availing themselves of the VAT refund are only required to submit the original copies of the said documents.
BIR CIRCULARIZES THE NEWLY ENLISTED & DELISTED WITHHOLDING AGENTS
JUNE 22, 2023
Revenue Memorandum Circular (RMC) No. 70-2023 circularizes the additional list of withholding agents for inclusion to and deletion from the existing list of withholding agents required to deduct and remit either the 1% or 2% Creditable Withholding Tax (CWT) from the regular income payments to their local suppliers of goods and services, respectively, pursuant to Revenue Regulations (RR) No. 31-2020. The obligation to deduct and remit shall commence or cease effective July 1, 2023. Any taxpayer not found in the published list is not required to deduct and remit the 1% or 2% CWT.
BIR REVERTS THE RATES OF PERCENTAGE TAX, MCIT & PROPRIETARY TAX OF SCHOOLS & HOSPITALS
JUNE 20, 2023
Revenue Memorandum Circular (RMC) No. 69-2023 reverts the rate of Percentage Tax, Minimum Corporate Income Tax (MCIT), and Regular Corporate Income Tax of proprietary educational institutions and not-for-profit hospitals, pursuant to Republic Act (R.A.) No. 11534, otherwise known as the “Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.”
BIR AMENDS RR NO. 13-2010 ON LATE/OUT-OF-DISTRICT FILING OF TAX RETURNS
JUNE 13, 2023
Revenue Regulations (RR) No. 6-2023 amends certain provisions of RR No. 13-2010 regarding Late/Out-of-District Filing of Tax Returns. Specifically, the amendment provides the imposition of a penalty of 25% of the tax due to out-of-district returns or wrong venue filing of returns, unless otherwise authorized by the Commissioner and in case there is pronouncement through a revenue issuance/bank bulletin allowing a taxpayer to file and pay a return, anywhere outside the BIR jurisdiction. On acceptance of late returns, Authorized Agent Banks (AABs) or Revenue Collection Officers (RCOs) may accept a late return that has been stamped with the qualifier “LATE FILING” or “LATE FILING, INCREMENTS NOT PAID” subject to the BIR’s later imposition of penalties, upon retrieval of returns.
It may be recalled that under RR No. 13-2010, the BIR shall not accept late and out-of-district returns. Otherwise, the corresponding filings shall be imposed with penalties.
BIR FURTHER CLARIFIES IMPORTED GOODS THAT WILL NO LONGER REQUIRE AN AUTHORITY TO RELEASE IMPORTED GOODS BY THE BIR PRIOR TO THE RELEASE BY THE BOC
JUNE 13, 2023
Revenue Memorandum Circular (RMC) No. 68-2023 further expands the coverage of non-issuance of “Authority to Release Imported Goods (ATRIG)” to importers of goods covered by Value-Added Tax (VAT) exemption under Section 109(1)(B) of the 1997 Tax Code, as amended.
It may be recalled that under RMC No. 112-2021, the BIR requires that an ATRIG shall be secured from the BIR for feed, feed ingredients, and fertilizers before the release of these imported goods by the Bureau of Customs (BOC).
As clarified, the certificate secured from the Bureau of Animal Industry (BAI), Fertilizer and Pesticides Authority (FPA), or other concerned regulatory government agencies shall be directly presented to the BOC to effect the release of the imported goods.
BIR AMENDS THE VENUE FOR THE ISSUANCE OF TAX-FREE EXCHANGE TAX CLEARANCE
JUNE 8, 2023
Revenue Memorandum Circular (RMC) No. 65-2023 amends Item VIII of RMC No. 19-2022 on the venue for the issuance of Certificate Authorizing Registration (CAR) relative to tax-free exchanges of properties under Section 40(C)(2) of the 1997 Tax Code, as amended. As amended, it is the Revenue District Office (RDO)/Large Taxpayers (LT) Office having jurisdiction over the place where the transferee/surviving corporation is registered shall be the venue to process the submitted documentary requirements and issuance of CAR, regardless of the number of real properties and/or shares of stocks involved in a transaction, and regardless whether these properties are situated in various locations covered by different RDOs/LT Offices.
It may be recalled that with the passage of the Corporate Recovery and Tax Incentives for Enterprise Act (CREATE Law), a prior ruling is not necessary. However, as previously clarified in RMC No. 19-2022, it is the RDO having jurisdiction over the place where the property is located, in case of real property, or the RDO where the issuing corporation is registered, in case of shares of stocks, shall process the documentary requirements and issue CAR.
BIR ADVISES TAXPAYERS TO SEEK ALTERNATIVE ePAY SOLUTIONS DUE TO NON-AVAILABILITY OF GCASH
JUNE 2, 2023
In a Tax Advisory, the BIR has advised taxpayers to seek alternative ePAY Solutions due to a high failure count for BIR payments via the GCash mobile application detected last May 24, 2023. Globe X-Change, Incorporated (GXI) decided to temporarily disable BIR payments acceptance to avoid further inconveniences to both taxpayers and partner banks, while an investigation is being conducted.
BIR REVOKES & INVALIDATES PREVIOUS BIR RULINGS STATING THAT CLARK DEVELOPMENT CORPORATION ENJOYS THE SAME PRIVILEGES AVAILABLE TO REGISTERED BUSINESS ENTERPRISES
MAY 31, 2023
Revenue Memorandum Circular (RMC) No. 63-2023 revoked and invalidated BIR Ruling No. 038-2001 and 046-1995, which ruled that Clark Development Corporation (CDC) is considered as a business enterprise which is entitled to the same privileges available to Registered Business Enterprises (RBEs). As clarified, while it is true that CDC is a private corporation and performs activities that are proprietary in nature, the fact still remains that is a Government Owned and Controlled Corporation (GOCC) entrusted with the responsibility of carrying out regulatory functions. As such, it does not stand on equal footing with RBEs operating within the Clark Special Economic Zone (CSEZ), thereby precluding it from claiming the same privileges available to them. Consequently, its income shall be subject to the Regular Corporate Income Tax (RCIT). Likewise, it is not entitled to the same fiscal and non-fiscal incentives which are exclusively granted to RBEs. As further clarified, with the passage of the Corporate Recovery and Tax Incentives for Enterprise Act (CREATE Law), the CDC cannot be both an Investment Promotion Agency (IPA) and RBE since these are two separate and distinct entities with different purposes and functionalities.
BIR ANNOUNCES THE AVAILABILITY OF BIR FORMS 1604-C, 1604-E, 1604-F & 0620 IN THE eFPS
MAY 29, 2023
Revenue Memorandum Circular (RMC) No. 62-2023 announces the availability of BIR Forms 1604-C, 1604-E, 1604-F, and 0620 in the Electronic Filing and Payment System (eFPS).
BIR PRESCRIBES THE PROCEDURES IN THE PROCESSING OF REQUEST FOR STAMPING OF ELECTRONICALLY FILED "NO PAYMENT ITR" THROUGH eBIRFORMS
MAY 24, 2023
Revenue Memorandum Circular (RMC) No. 61-2023 prescribes the procedures in the processing of request for stamping of electronically filed “No Payment Annual Income Tax Returns (ITRs)” through eBIRForms. As prescribed, Revenue District Offices (RDOs) may still manually stamp printed electronically filed Annual ITRs for requesting taxpayers subject to a formal written request and validation.
It may be recalled that under RMC No. 32-2023, “No Payment Annual ITR” need not be filed manually.
BIR ANNOUNCES THE AVAILABILITY OF ENHANCED BIR FORMS 1901-1905
MAY 23, 2023
Revenue Memorandum Circular (RMC) No. 60-2023 announces the availability of enhanced BIR Forms 1901-1905 relative to the implementation of the Ease of Doing Business and Efficient Government Service Delivery Act of 2018.
BIR ANNOUNCES THE AVAILABILITY OF THE REVISED BIR FORM 2550Q JANUARY 2023 VERSION
MAY 19, 2023
Revenue Memorandum Circular (RMC) No. 59-2023 prescribes the newly revised BIR Form 2550Q or the Quarterly Value-Added Tax (VAT) Returns January 2023 (ENCS) version in line with the provisions of the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
It may be recalled that the TRAIN Law provides that the filing of returns and payment of VAT shall be changed from monthly to quarterly effective January 1, 2023. Likewise, the amortization of the input VAT on capital goods shall only be allowed until December 31, 2021. Further, beginning January 1, 2021, the VAT withholding system shall shift from final to a creditable system.
The revised BIR Form 2550Q is already available on the BIR website. However, it is not yet available in the Electronic Filing and Payment System (eFPS) and Electronic Bureau of Internal Revenue Forms (eBIRForms). Thus, eFPS/eBIRForms filers shall continue to use BIR Form 2550Q in eFPS and Offline eBIRForms Package v7.9.4 in filing and paying the VAT payable/due.
BIR CLARIFIES THE NEW POLICIES & GUIDELINES ON THE ISSUANCE & VALIDITY OF TIN CARDS & CERTIFICATE OF REGISTRATION
MAY 19, 2023
Revenue Memorandum Circular (RMC) No. 58-2023 clarifies the policies and guidelines on the issuance and validity of Tax Identification Number (TIN) Card and Certificate of Registration (COR).
Highlights include the validity of the old TIN card (yellow orange) and old template of COR (yellow orange), instances when the new TIN card (color green) shall be issued, guidelines and documentary requirements for the issuance of the TIN card and a new template for COR using the Online Registration and Update System (ORUS).
BIR AMENDS THE POLICIES & PROCEDURES IN THE ISSUANCE OF TAX CLEARANCE ON BIR ASSESSMENT
MAY 19, 2023
Revenue Memorandum Order (RMO) No. 18-2023 amends the policies and procedures in the issuance of the Authority to Cancel Assessment (ATCA) as provided in RMO No. 33- 2018. The issuance of ATCA relative to protested tax assessments has been identified as redundant. Hence, item III.1 (a) of RMO No. 33-2018, which pertains to the issuance of ATCA for protested assessment, which is not yet final and delinquent, is removed. All other items listed thereof shall remain to be in effect as these all pertain to tax assessments that were reported and determined as “delinquent account” but later approved for compromise settlement, amnesty or abatement of penalties, or declared prescribed, including tax assessments determined to be invalid or worthless.
BIR CLARIFIES THE ENTITLEMENT OF ECOZONE DEVELOPERS & OPERATORS TO THE VAT ZERO RATING ON LOCAL PURCHASES OF GOODS & SERVICES THAT ARE DIRECTLY & EXCLUSIVELY USED IN THE REGISTERED PROJECT OR ACTIVITY
MAY 11, 2023
Revenue Memorandum Circular (RMC) No. 53-2023 circularizes the Board of Investments (BOI) Memorandum Circular (MC) No. 2022-003, which amended the Specific Guidelines of Activities in Support of Exporters under the 2020 Investment Priorities Plan (IPP), also known as the transitional Strategic Investment Priority Plan (SIPP).
Highlights of the amendments include:
a. Development and operation of economic zones; and industrial parks and building for exporters, as “Activities in Support of Exporters” shall also be entitled to the Value-Added Tax (VAT) incentives under the CREATE Act.
b. It shall apply to all projects qualified under the CREATE Act.
c. An ecozone developer or operator who is not qualified will be classified as a Domestic Market Enterprise (DME) and shall not be entitled to the VAT incentives under the CREATE Act.
BIR CLARIFIES THE OPTIONAL FILING & PAYMENT OF MONTHLY VAT RETURNS
MAY 10, 2023
Revenue Memorandum Circular (RMC) No. 52-2023 clarifies the optional filing and payment of monthly Value-Added Tax (VAT) returns (BIR Form 2550M) for VAT-registered persons. Aligned with the Republic Act (R.A.) No. 11032 or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018 and “Pay-As-You-File” System of Taxation, VAT-registered persons may continue to file and pay their VAT liabilities monthly using BIR Form 2550M. No penalties shall be imposed if the taxpayer opts to switch from filing the VAT returns and paying tax on a monthly to quarterly basis, or vice versa, for as long as the filing and payment of quarterly VAT returns are filed within the period provided under the Tax Code, which is within 25 days following the close of each taxable quarter. However, no prescribed deadline shall be imposed on the filing of monthly VAT returns.
BIR AMENDS RULES IN AVAILING INCOME TAX EXEMPTION OF FOREIGN-SOURCED DIVIDENDS RECEIVED BY A DOMESTIC CORPORATION
MAY 5, 2023
Revenue Regulations (RR) No. 5-2023 amends RR No. 5-2021 on the requirements for availing Income Tax Exemption of foreign-sourced dividends received by a domestic corporation. To avail of the income tax exemption, the Domestic Corporation shall only need to attach the prescribed "Sworn Statement" to the Annual Income Tax Returns (AITR) pertaining to the taxable year in which the foreign-sourced dividends were received and attach to the AITR pertaining to the year immediately following the year of receipt of the foreign-sourced dividends the prescribed "Sworn Declaration." In case of partial or non-utilization of the foreign-sourced dividends, the domestic corporation shall pay the corresponding Income Tax due thereon, inclusive of surcharge, interest, and penalties, by amending the AITR filed for the particular period. If the amendment is already prohibited due to the existence of an audit, the Income Tax shall be paid using the Payment Form (BIR Form 0605).
It may be recalled that under the Corporate Recovery and Tax Incentives for Enterprise (CREATE) Law, foreign-sourced dividends received by domestic corporations are generally subject to income tax, except when dividends will be reinvested in the business operations of the domestic corporation subject to the compliance of RR No. 5-2021.
BIR TAX ADVISORY ON THE FILING OF THE QUARTERLY INCOME TAX RETURNS USING eBIRForms
MAY 4, 2023
In a Tax Advisory, the BIR has advised individual taxpayers who are eFPS users to file their Quarterly Income Tax Returns (ITR) for the first quarter of 2023 using the Offline eBIRForms Package v7.9.4 while the Income Tax Rates of BIR Form 1701Q are being modified in the eFPS. Furthermore, payment of taxes shall be made through online or manual payment.
BIR NOW REQUIRES BARANGAYS TO USE eFILING SYSTEM
MAY 4, 2023
Revenue Regulations (RR) No. 4-2023 further expands the categories of taxpayers required to file tax returns through Electronic BIR Forms (eBIRForms). As mandated, barangays are now included in the coverage of taxpayers required to file returns through eBIRForms.
BIR REITERATES THE PROPER TIME OF REMITTANCE OF WITHHOLDING TAXES BY THE NATIONAL GOVERNMENT AGENCIES & INSTRUMENTALITIES, LGUs & GOCCs
MAY 3, 2023
Revenue Memorandum Circular (RMC) No. 47-2023 reiterates the proper time of withholding taxes by the National Government Agencies (NGAs) and instrumentalities, Local Government Units (LGUs), and Government Owned and Controlled Corporations (GOCCs). As required under Revenue Regulations (RR) No. 12-2001, amending Section 2.57.4 of RR No. 2-98, the obligation of the payor to deduct and withhold the tax arises at the time an income payment is paid or payable, or the income payment is accrued or recorded as an expense or asset, whichever is applicable, in the payor’s books, whichever comes first. Provided however, that where income is not yet paid or payable but the same has been recorded as an expense or asset, whichever is applicable, in the payor's books, the obligation to withhold shall arise in the last month of the return period in which the same is claimed as an expense or amortized for tax purposes.
BIR ISSUES A TAX ADVISORY ON THE FILING OF ATTACHMENTS TO THE AITR FILED USING eBIRFORMS PACKAGE
APRIL 28, 2023
In a Tax Advisory in relation to the upcoming deadline for the submission of attachments to the electronically filed Annual Income Tax Returns (AITRs) through eBIRForms Package for Taxable Year 2022, which is on May 2, 2023, the public is advised on the following workaround procedures:
a. The Revenue District Office (RDO) shall accept the attachments with “Tax Return Receipt Confirmation” from eBIRForms.
b. The RDO shall verify from the “Filing Inquiry” in Online eBIRForms to validate that the corresponding AITR was duly filed before accepting the attachments from taxpayers that failed to receive the “Tax Return Receipt Confirmation.” Taxpayers are advised to ensure that the email address used in the submission of AITR is correct and to check inbox including spam and junk folders for email confirmation on the electronically filed AITR.
c. Attachments shall be filed where the taxpayer is registered.
BIR AMENDS GUIDELINES IN THE APPLICATION FOR VAT ZERO-RATING
APRIL 27, 2023
Revenue Regulations (RR) No. 3-2023 further amends certain provisions of RR No. 16-2005, as amended by RR No. 21-2021 which implemented Sections 294 (E) and 295 (D) of Title XIII of the Tax Code, as introduced in the Republic Act (R.A.) No. 11534 or the "Corporate Recovery and Tax Incentives for Enterprise Act" (CREATE Act), and Section 5, Rule 2 of its Implementing Rules and Regulations (IRR), as amended.
Specifically, the regulations provide the following changes on the zero-rated sale of goods or properties and the zero-rated sale of services.
a. Local purchases of certain services, including janitorial, security, financial, consultancy, marketing and promotion, and services for administrative operations, will not be considered "directly and exclusively used" in the registered project or activity of a Registered Export Enterprise (REE). Still, the REEs may seek VAT zero-rating certification by justifying to the Investment Promotion Agency (IPA) that these local purchases are relevant to the registered project or activity.
b. Local suppliers of goods of REEs shall no longer be required to apply for approval of VAT zero-rating with the BIR and can rely on the VAT zero-rating certification issued by the concerned IPA.
c. Health maintenance organization (HMO) plans included in the compensation packages of employees who are directly and exclusively involved in the operation of registered projects or activities of REEs shall be considered as “directly and exclusively used.”
d. The concerned IPA is required to furnish the BIR with a list of REEs issued with VAT zero-rating certification, and the BIR may prescribe a report template for audit purposes.
BIR RENAMES RDO NO. 21C-CLARK FREEPORT ZONE TO RDO NO. 21C-CLARK FREEPORT & SPECIAL ECONOMIC ZONE (CFEZ)
APRIL 27, 2023
Revenue Administrative Order (RAO) No. 1-2023, issued on April 27, 2023, renames Revenue District Office (RDO) No. 21C-Clark Freeport Zone to RDO No. 21C-Clark Freeport and Special Economic Zone (CFEZ). This is to eliminate the possible confusion on the territorial jurisdiction of RDO No. 21C which covers not only the Clark Freeport Zone but consist of the CFEZ.
BIR CIRCULARIZES THE FIRB ADVISORY ON THE CLARIFICATIONS ON THE SUPPLEMENTAL GUIDELINES ON THE BOI REGISTRATION OF RBE IN THE IT-BPM SECTOR
APRIL 19, 2023
Revenue Memorandum Circular (RMC) No. 46-2023 circularizes the full text of Fiscal Incentives Review Board Advisory No. 006-2023 regarding clarifications on the supplemental guidelines on the registration with the Board of Investments (BOI) of Registered Business Enterprises (RBEs) in the Information Technology-Business Process Management (IT-BPM) Sector.
BIR CIRCULARIZES THE FIRB ADVISORY CLARIFYING CERTAIN ISSUES ON THE BOI TRANSFER OF REGISTRATION OF RBE IN THE IT-BPM SECTOR
APRIL 19, 2023
Revenue Memorandum Circular (RMC) No. 45-2023 circularizes the full text of Fiscal Incentives Review Board Advisory No. 004-2023 clarifying the issues covering the transfer of registration with the Board of Investments (BOI) of Registered Business Enterprises (RBEs) in the Information Technology-Business Process Management (IT-BPM) Sector.
BIR REQUIRES TAXPAYERS APPEALING THE FDDA TO FURNISH A COPY OF APPEAL TO THE CHIEF OF THE ASSESSMENT DIVISION/LTS
APRIL 14, 2023
Revenue Memorandum Circular No. 43-2023 instructs taxpayers filing an appeal against the Final Decision on Disputed Assessment (FDDA) to furnish a copy of the appeal to the Chief of the Assessment Division for Regional cases, or the concerned Head Revenue Executive Assistant, in the case of taxpayers under the jurisdiction of the Large Taxpayers Service or investigated by the National Investigation Division under the Enforcement and Advocacy Service, within five (5) days from the date of filing with the Office of the Commissioner of Internal Revenue or the Court of Tax Appeals.
BIR CIRCULARIZES INFORMATION MATERIALS IN THE FILING BIR FORMS 1701, 1701A & 1702-RT
MARCH 29, 2023
Revenue Memorandum Circular (RMC) No. 41-2023 announces the availability of information materials in relation to filing and payment of tax returns and step-by-step guide in filing BIR Forms 1701, 1701A, and 1702-RT.
BIR CIRCULARIZES THE AVAILABILITY OF eBIRForms PACKAGE VERSION 7.9.4
MARCH 29, 2023
Revenue Memorandum Circular (RMC) No. 40-2023 announces the availability of the Offline electronic Bureau of Internal Revenue Forms (eBIRForms) Package Version7.9.4
BIR ISSUES PRIORITY PROGRAMS FOR 2023
MARCH 23, 2023
Revenue Memorandum Circular (RMC) No. 38-2023 prescribes the 2023 BIR Priority Programs and Projects.
BIR CIRCULARIZES THE AVAILABILITY OF OTHER ONLINE FACILITIES OF ORUS
MARCH 20, 2023
Revenue Memorandum Circular (RMC) No. 36-2023 announces the availability of other registration-related online transactions, functions, and features in the BIR Online Registration and Update System (ORUS). These include e-payment of Annual Registration Fee, application for cancellation of Permit-to-Use Loose-Leaf and Acknowledgment Certificate of Computerized Accounting System, and Online Verification of Tax Identification Number (TIN).
BIR CLARIFIES THE ISSUANCE & ENFORCEMENT OF SUBPOENA DUCES TECUM
MARCH 17, 2023
Revenue Memorandum Circular (RMC) No. 33-2023 clarifies that the issuance and enforcement of Subpoena Duces Tecum (SDT) shall also apply in the monitoring and verification of taxpayer’s compliance with relevant tax laws, such as but not limited to examination of registered taxpayers’ payment of Annual Registration Fee, issuance of sales invoices or official receipts, keeping books of accounts, timely filing and payment of tax returns, withholding tax on income payments, filing of required information returns, and notification to unregistered taxpayers to register and pay voluntarily any unpaid taxes due on past transaction
BIR PRESCRIBES THE GUIDELINES IN THE FILING OF ANNUAL ITR FILING DUE UNTIL APRIL 17, 2023
MARCH 16, 2023
Revenue Memorandum Circular (RMC) No. 32-2023 prescribes the guidelines for the filing of the Annual Income Tax Returns (AITR) for Calendar Year (CY) 2022 as well as the payment of corresponding taxes due thereon until April 17, 2023.
Highlights include:
a. Filing anywhere notwithstanding the Revenue District Office (RDO) jurisdiction, without the imposition of penalties for wrong venue filing.
b. Instances where eBIRForms can be used by taxpayers mandated to use eFPS.
c. Payment channels for electronically filed returns through the eBIRForms.
d. Guidelines for taxpayers who will manually file and pay their AITR and those with “No Payment AITRs.”
e. Guidelines for electronically filed AITRs without any attachments.
BIR CLARIFIES THE EFFECT OF THE PUBLICATION OF THE CANNOT-BE-LOCATED TAXPAYERS
MARCH 10, 2023
Revenue Memorandum Circular (RMC) No. 29-2023 clarifies the effect of the publication of the list of taxpayers determined as Cannot Be Located (CBL) pursuant to existing guidelines and procedures under RMC No. 98-2010. As reiterated, the purpose of the publication of CBL taxpayers is to give due notice to the public as well, who may, in one way or another, have knowledge of the whereabouts of the published names of taxpayers or have transactions with them. Those with information on the CBL taxpayers' whereabouts can report to the BIR while those with business transactions with them shall be given precaution in their future transactions as there are tax consequences such as non-deductibility of purchases and disallowance of input tax claimed for purchases with the CBL taxpayers unless the buyer can prove the existence of the supplier tagged as CBL by the BIR and the authenticity of purchases made. These tax consequences, however, shall apply to transactions made after the publication of the name of the CBL taxpayer. In addition, the publication of the names of CBL taxpayers is not a pre-requisite to suspend the running of the prescriptive period to assess under Section 203 of the Tax Code, as amended. Once the handling Revenue Officer has submitted a report that the taxpayer is a CBL and such report is supported by the required documents under existing policies, the suspension of the said prescriptive period already sets in and is tagged in the system as suspended.
BIR FURTHER CLARIFIES THE QUALIFICATIONS OF ELSE TO VAT ZERO-RATING ON LOCAL PURCHASES WITH THE ENACTMENT OF CREATE LAW
FEBRUARY 17, 2023
Revenue Memorandum Circular (RMC) No. 24-2023 further clarifies the qualifications of Ecozone Logistics Service Enterprise (ELSE) (formerly known as Ecozone Facilities Enterprise Engage in Warehousing Operations) to the incentives of Zero-Rate Value-Added Tax (VAT) on local purchases of goods and services exclusively and directly used in the registered project or activity. Highlights include activities falling under ELSE, extent, and the qualification of zero-rated VAT incentives on local purchases of goods and services.
BIR AMENDS THE CLASSIFICATION & PROCESSING OF ONE-TIME TRANSACTIONS
FEBRUARY 17, 2023
Revenue Memorandum Circular (RMC) No. 23-2023, issued on February 17, 2023, amends RMC No. 48-2018 on the classification and processing time of One-Time Transactions (ONETT). Specifically, the amendment provides for a longer period of processing and issuance of the ONETT Computation Sheet and Electronic Certificate Authorizing Registration (eCAR) for the sale, donation, or estate processing of real or personal property or shares of stocks, citing the complexity and highly technical requirements for the estate settlement of the decedent. As further clarified, the processing time is computed on a per-application basis.
BIR CIRCULARIZES THE BOI RESOLUTION ON THE PEZA LOGISTICS SERVICE ENTERPRISES INCLUSION IN THE SIPP & RELATED TAX INCENTIVES
FEBRUARY 3, 2023
Revenue Memorandum Circular (RMC) No. 15-2023 circularizes the full text of Memorandum Circular No. 2023-001 of the Board of Investment (BOI) through Board Resolution Number 02-01, Series of 2023, which clarifies the coverage of logistics services as “activities in support to exporters” under the 2022 Strategic Investment Priority Plan (SIPP).
BIR TAX ADVISORY ON THE DEADLINE OF SUBMISSION OF 1604C FOR TAXPAYERS WITH PERA TAX CREDITS
JANUARY 27, 2023
In a Tax Advisory, the BIR has advised that those employers who do not have employees availing the 5% tax credit under the Personal Equity and Retirement Account (PERA) Act of 2008 shall submit the Annual Information Return of Income Taxes Withheld on Compensation (BIR Form 1604-C), together with the Alphabetical List of Employees/Payees From Whom Taxes Were Withheld, on or before January 31, 2023, or the original schedule of filing of BIR Form 1604-C. Once the corresponding enhanced data entry module is available to cover PERA credits, employers shall submit BIR Form 1604-C within 30 days from the date of posting of an advisory.
BIR ANNOUNCES THE EXPANDED SERVICES OF ORUS
JANUARY 27, 2023
Revenue Memorandum Circular (RMC) No. 12-2023 circularizes the availability of Registration Information Updates, Secondary Registration, and Other Online Facilities for registration-related transactions through the Online Registration and Update System (ORUS) starting January 23, 2023, which may be accessed by those taxpayers who already have their existing ORUS account. On the other hand, the Bureau requires those taxpayers who do not have an ORUS account and opt to use the said features to enroll or create an account in ORUS.
BIR CIRCULARIZES ELECTRONIC ONETT FOR SELLERS HABITUALLY ENGAGED IN THE SALE OF REAL PROPERTY
JANUARY 26, 2023
Revenue Memorandum Circular (RMC) No. 10-2023 encourages sellers habitually engaged in the sale of real estate properties like the real estate developers with voluminous One-Time Transactions (ONETT) transactions to use Electronic One-Time Transactions (eONETT) System in securing ONETT Computation Sheet (OCS) and/or Electronic Certificate Authorizing Registration (eCAR) and likewise, encouraged to pay electronically thru the available ePayment channels of the BIR.
BIR CIRCULARIZES THE AVAILABILITY OF THE REVISED BIR FORMS 1606 & 1706
JANUARY 26, 2023
Revenue Memorandum Circular (RMC) No. 9-2023 circularizes the availability of revised BIR Forms 1606 (For Onerous Transfer of Real Property Other Than Capital Asset) and 1706 (For Onerous Transfer of Real Property Classified as Capital Asset-both Taxable and Exempt) version January 2018.
BIR REVISES THE INVENTORY LIST SUBMISSION TO INCLUDE THE SOFT COPY AS STORED IN A USB FLASH DRIVE
JANUARY 20, 2023
Revenue Memorandum Circular (RMC) No. 8-2023 revises the format on the submission of the Inventory List pursuant to RMC No. 57-2015. As prescribed, the inventory list shall now be submitted in soft copies using the format shown in the Annex, stored/saved on a DVD-R or Universal Storage Bus (USB) Flash drive, together with a notarized certification.
BIR IMPLEMENTS THE 10% DISCOUNT & VAT EXEMPTION ENTITLEMENTS OF SOLO PARENTS UNDER THE EXPANDED SOLO PARENTS WELFARE ACT
JANUARY 18, 2023
Revenue Regulations (RR) No. 1-2023 implements the 10% discount and the Value-Added Tax (VAT) exemption under Republic Act (R.A.) No. 11861 or the “Expanded Solo Parents Welfare Act.” Highlights include the qualification, extent of the 10% discount and VAT exemption, manner of availment, and administrative requirements on the part of the seller to avail of the tax incentives.
BIR CLARIFIES WHAT IS MEANT BY A RETURN PROCESSING SYSTEM, THUS, NO NEED FOR A LETTER OF AUTHORITY
JANUARY 17, 2023
Revenue Memorandum Circular (RMC) No. 7-2023 clarifies the Return Processing System (RPS) Assessment being issued by the BIR. The "RPS Assessment” is a Collection Letter and sending of which is part of the civil/administrative remedies of the BIR. Its contents are not tax assessments arising from the audit/investigation of the taxpayer's books of accounts and other relevant records. These are tax payables based on the taxpayer's declaration as reflected in the tax returns filed. Since no books of accounts and accounting records of the taxpayer are to be examined or subjected to an audit, the issuance of a Letter of Authority shall not be required.
BIR CIRCULARIZES THE NATIONAL PRIVACY COMMISSION OPINIONS ON DATA-GATHERING ACTIVITIES OF THE BIR
JANUARY 17, 2023
Revenue Memorandum Circular (RMC) No. 6-2023 circularizes the National Privacy Commission (NPC) Opinions upholding the authority of the BIR on its mandate of data gathering in relation to its tax enforcement, assessment, and collection functions, to obtain personal and sensitive information from any person, including from any office or officer of the national and local governments, government agencies and instrumentalities and government-owned or controlled corporations, pursuant to Section 4 (e) of Republic Act (RA) No. 10173, or the “Data Privacy Act (DPA) of 2012”, in relation to Section 5(B) of the 1997 Tax Code, as amended.
BIR STREAMLINES THE FILING OF VAT RETURNS BY REMOVING THE MONTHLY VAT FILING ALIGNED WITH THE PROVISIONS OF TRAIN LAW
JANUARY 13, 2023
Revenue Memorandum Circular (RMC) No. 5-2023 circularizes the transitory provisions for the implementation of the Quarterly Filing of Value-Added Tax (VAT) Returns, pursuant to Section 114(A) of the 1997 Tax Code, as amended by Republic Act (R.A.) No. 10963, otherwise known as the “Tax Reform for Acceleration or Inclusion” or the “TRAIN Law.” Specifically, it provides for the transitory provisions for taxpayers under the fiscal period of accounting to avoid confusion during the initial implementation.
It may be recalled that under TRAIN Law, starting January 1, 2023, VAT-registered taxpayers are no longer required to file the Monthly VAT Declaration (BIR Form 2550M) but instead file the corresponding Quarterly VAT Return (BIR Form 2550Q) within twenty-five (25) days following the close each taxable quarter.
BIR PRESCRIBES THE POLICIES & GUIDELINES ON THE ONLINE REGISTRATION OF BOOKS OF ACCOUNTS
JANUARY 10, 2023
Revenue Memorandum Circular (RMC) No. 3-2023 amends Section 2 of RMC No. 29-2019 in relation to the registration of books of accounts using the Online Registration and Update System (ORUS). As prescribed, all books of accounts shall be registered online with ORUS instead of manually stamping books of accounts. A Quick Response (QR) Code shall be generated, which can be validated online. The circular provides the manner of online registration and maintenance of books of accounts for new business registrants, existing business taxpayers, and subsequent registration, as well as the QR stamping details.
TAX REMINDER ON THE REDUCED INDIVIDUAL INCOME TAX RATES EFFECTIVE JANUARY 1, 2023, PURSUANT TO THE 2ND TRANCHE OF TRAIN LAW
JANUARY 5, 2023
It may be recalled that Revenue Regulations (RR) No. 8-2018, issued on February 20, 2018, implements the amended provisions on Individual Income Tax pursuant to Republic Act No. 10963 (Tax Reform for Acceleration and Inclusion or TRAIN Law).
Starting January 1, 2023, those with annual taxable income below P 250,000 are still exempt from paying personal Income Tax, while the rest of taxpayers, except those with taxable income of more than P 8 Million, will have lower tax rates ranging from 15% to 30% by 2023.
BIR ISSUES THE REVISED ALPHALIST FORMAT OF BIR FORM 1604-C
DECEMBER 27, 2022
Revenue Memorandum Circular (RMC) No. 160-2022 circularizes the availability of the revised Alphalist Format in the BIR Form 1604-C due for submission on or before January 31, 2023. It now includes information on the utilization of 5% tax credit under the Personal Equity and Retirement Account (PERA) Act of 2008.
BIR CLARIFIES THE EFFECTS OF FAILURE TO SUBMIT THE TIN OF COOPERATIVE MEMBERS WITHIN THE SIX-MONTH GRACE PERIOD FROM THE ISSUANCE OF THE CERTIFICATE OF TAX EXEMPTION
DECEMBER 27, 2022
Revenue Memorandum Circular (RMC) No. 158-2022 clarifies the effect of the non-submission of a Cooperative of the Tax Identification Number (TIN) of its members within six (6) months from the issuance of its Certificate of Tax Exemption (CTE).
Highlights include the following:
a. Imposition of penalties of Php 1,000 per member without TIN, provided the aggregate amount shall not exceed Php 25,000 for the 1st offense, suspension of CTE until compliance for the 2nd offense, while a revocation and prohibition to apply for renewal of CTE for a period of three (3) years from the date of revocation for the 3rd offense.
b. Justifiable circumstances that will prevent the imposition of penalties such as delisted inactive members and force majeure.
c. All cooperatives which have been issued CTE despite non-submission of the active members’ TIN are still required to submit their respective TINs within the 6-month grace period unless the non-submission falls within justifiable reasons as above-mentioned.
d. For CTE renewal application, the Cooperatives are required to complete and submit the TIN of their active members.
BIR EXTENDS THE ACCEPTANCE OF MANUALLY ISSUED CETI AS AN ATTACHMENT TO AITR
DECEMBER 27, 2022
Revenue Memorandum Circular (RMC) No. 155-2022 further extends the acceptance of manually issued Certificate of Entitlement to Tax Incentives (CETI) under R.A. No. 11534, or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act as an attachment to the 2022 Annual Income Tax Return (AITR) to be filed by Registered Business Enterprises (RBEs) as proof of their entitlement to Income Tax incentives, until such time that a system-generated CETI can be issued thru the Fiscal Incentives Registration and Monitoring System (FIRMS) account being administered by the Fiscal Incentives and Review Board. It may be recalled that under the CREATE Law, CETI is a requirement for all RBEs to avail of the Income Tax Holiday or preferential rate granted by law.
BIR SUSPENDS ALL AUDIT & OTHER FIELD OPERATIONS EFFECTIVE DECEMBER 16, 2022
DECEMBER 15, 2022
Revenue Memorandum Order (RMO) No. 55-2022 suspends all audit and other field operations from December 16, 2022, to January 8, 2023. No written orders to audit and investigate shall be issued except on prescribing cases on or before April 15, 2023, tax evasion, processing and verification of one-time transactions, taxpayers retiring from business, monitoring of privilege stores or tiangge, warrants, and seizure orders, among others. Taxpayers are encouraged to pay voluntarily without the need for the BIR approval.
BIR ANNOUNCES THE AVAILABILITY OF ONLINE REGISTRATION & UPDATE SYSTEM (ORUS)
DECEMBER 12, 2022
Revenue Memorandum Circular (RMC) No. 153-2022 circularizes the availability of the Online Registration and Update System (ORUS), a web-based system that gives taxpayers a convenient and alternative facility for the end-to-end process of registration such as the issuance of Tax Identification Number (TIN) for foreign individuals, registration of business and issuance of Certificate of Registration and Authority to Print, Employer Account Enrollment to facilitate the issuance of TIN of employees, and registration of books of accounts.
BIR FURTHER AMENDS CERTAIN PROVISIONS OF THE TRAIN LAW RELATIVE TO THE CWT RATES ON MERALCO REFUND
DECEMBER 9, 2022
Revenue Regulations (RR) No. 15-2022 further amends certain provisions of RR No. 2-98 as amended by RR No. 11-2018, which implemented the provisions of Republic Act (RA) No. 10963, otherwise known as the “Tax Reform for Acceleration and Inclusion (TRAIN) Act,” relative to some changes in the rate of Creditable Withholding Tax (CWT) on certain income payments, particularly on the MERALCO Refund.
Highlights include:
a. MERALCO refund arising from the ERC Case No. 2020-043, ERC Case Nos. 2010-069, and RC Orders promulgated on February 19, 2021, and April 29, 2022, shall now be subject to 15% CWT on the gross amount of refund given by MERALCO to non-residential customers.
b. Interest income on the refund of meter deposits determined, computed, and paid in accordance with the Distribution Services and Open Access Rules (DSOAR); (i) Residential and General Service customers whose monthly electricity exceeds 200 kWh as classified by MERALCO shall now be subject to 10% CWT, whereas (2) Non-Residential Customers will be subject to a 15% CWT.
c. Interest income on the refund paid through direct payment or application against customer's billings by other electric Distribution Utilities (DUs); (i) Residential and General Service customers whose monthly electricity consumption exceeds 200 kWh-as classified by the concerned DU shall now be subject to 10% CWT, while (2) Non-Residential Customers will be subject to a 15% CWT.
BIR ISSUES IRR IMPLEMENTING THE VAPE LAW
NOVEMBER 11, 2022
Revenue Regulations (RR) No. 14-2022 prescribes the rules and regulations implementing the provisions of Republic Act (R.A.) No. 11900, otherwise known as the “Vaporized Nicotine and Non-Nicotine Products Regulation Act” or VAPE Law, relative to the importation, manufacture, sale, packaging, distribution, use, and communication of Vaporized Nicotine and Non-Nicotine Products, and Novel Tobacco products. Specifically, the regulations prescribe the amount of excise tax and related fees to be levied and imposed, minimum floor price, registration process for manufacturers, importers, or exporters, and authority of the BIR to conduct inventory, confiscate and seize for the violations committed, among others.
BIR ENHANCES CHATBOT-REVIE, WHICH NOW INCLUDES TIN VERIFICATION/VALIDATION, RDO FINDER & eCOMPLAINT
NOVEMBER 10, 2022
Revenue Memorandum Circular (RMC) No. 146-2022 circularizes the availability of Tax Identification Number (TIN) verification/validation, Revenue District Office (RDO) finder, and eComplaint facility in the newly enhanced BIR's Digital Assistant Chatbot-Revie which was initially launched in June 2021. Taxpayers utilizing the facility will also have the option to chat with a live agent in case they need further clarification on the answers provided by Revie.
BIR CLARIFIES ISSUES RELATIVE TO THE IMPLEMENTATION OF RR NO. 13-2022 ON THE INCOME TAX TREATMENT OF EQUITY-BASED COMPENSATION
NOVEMBER 9, 2022
Revenue Memorandum Circular (RMC) No. 143-2022 clarifies several issues relative to the implementation of Revenue Regulation (RR) No. 13-2022 on the income tax treatment of equity-based compensation granted by employers to its employees.
Highlights include:
a. The effectivity date of RR No. 13-2022 is October 29, 2022, which shall be applied prospectively. Thus, any exercise or availment by employee-grantee (whether rank-and-file or occupying a managerial or supervisory position) of the granted equity-based compensation on or after October 29, 2022, shall be considered as compensation, which shall be subject to Withholding Tax on compensation.
b. Neither Capital Gains Tax (CGT) nor Documentary Stamp Tax (DST) shall be imposed upon the grant of equity-based compensation, whether with or without an option price (which is, for the avoidance of doubt, different from the exercise price) since there is no realized capital gain on the part of the employer-grantor.
c. Sale, barter, or exchange by employee-grantee of the granted equity-based compensation shall be considered as sale, barter, or exchange of non-listed stocks and shall be subject to the ordinary rules of CGT (if the sale or transfer is with consideration) or donor's tax (transfer is without consideration).
d. Upon exercise of equity-based compensation, the difference between the book value/fair market value (FMV) of shares, whichever is higher, at the time of the exercise of the equity-based compensation and the price fixed on the grant date shall be considered as additional compensation and shall be subject to withholding tax on compensation.
e. DST will apply only to the actual issuance of shares to employees.
f. Employers must submit the following BIR Forms starting in November 2022 for equity-based remuneration exercised on or after October 29, 2022: (1) BIR Form No. 1601C; (2) BIR Form No. 1604C; and (3) BIR Form No. 2316.
g. Employers must still submit the following tax returns within the statutory deadlines for equity-based remuneration exercised by employees in managerial or supervisory positions prior to the effective date of RR No. 13-2022: (1) BIR Form No. 1603Q; (2) BIR Form No. 1604F; and (3) BIR Form No. 2306.
h. Following the grant and/or exercise of share-based remuneration, the employer-grantor is obliged to submit to its registered Revenue District Office (RDO) a statement under oath containing the required information specified in Sec. IV of the Circular.
i. The reportorial requirement shall be submitted within thirty (30) days from the grant date or ten (10) days of the month after the exercise date, whichever is applicable.
BIR FURTHER CLARIFIES THE GUIDELINES ON THE AVAILMENT OF VAT ZERO-RATE ON HMO ACQUIRED BY REGISTERED EXPORT ENTERPRISES
OCTOBER 14, 2022
Revenue Memorandum Circular (RMC) No. 137-2022 further clarifies the guidelines on the availment of VAT Zero Rate (0%) on Health Maintenance Organization (HMO) Plans acquired by Registered Export Enterprises (REEs) and prescribes the uniform template of ‘Detailed Information’ thereof. It may be recalled that under RMC No. 24-2022, it clarifies that cost items that fall under “other expenditures” which are indispensable to the project or activity. Accordingly, the list provided in the said RMC is not “exclusive”, hence, expenditures not listed therein may be allowed VAT zero-rating, provided the same can be attributed directly to the registered activity of the REEs. For HMO Plans acquired by REEs for employees directly involved in the operations of their registered projects or activities and forming part of their compensation package, for their health maintenance, the same can be considered falling under "other expenditures." However, the VAT zero-rating shall not extend to HMO Plans procured for employees’ dependents, as well as HMO Plans for employees not directly involved in the operations of the registered projects or activities of the REEs. All REEs availing of the VAT zero-rate on their acquisition of HMO Plans for employees directly involved in their registered project or activity shall provide their suppliers a detailed information on the HMO Plans acquired using the format in Annex “A” of the Circular to ensure that only HMO expenses for qualified employees are given VAT zero-rating. This shall also be part of the documents to be submitted by the suppliers in filing the application for VAT zero-rate.
BIR ISSUES IRR ON THE PROPER TAX TREATMENT OF EQUITY-BASED COMPENSATION
OCTOBER 7, 2022
Revenue Regulations (RR) No. 13-2022 provides for the proper income tax treatment of Equity-Based Compensation, such as stock options, restricted stock units, stock appreciation rights, and restricted share awards, which may or may not pertain to the shares of stocks of the grantor itself. Once exercised or availed of by the grantee-employees, the same will be considered taxable compensation subject to the withholding tax on compensation, regardless of the employment status of the grantee-employees, whether rank-and-file or managerial or supervisory employee.
BIR PRESCRIBES THE POLICIES, GUIDELINES & PROCEDURES IN THE ISSUANCE & USE OF NOTICE TO ISSUE RECEIPT/INVOICE
SEPTEMBER 29, 2022
Revenue Memorandum Order (RMO) No. 43-2022 prescribes the policies, guidelines, and procedures in the issuance and use of Notice to Issue Receipt/Invoice (NIRI).
Highlights include:
a. The coverage of RMO, which includes the New Business Registrants (NBR) head office and branches by the Revenue District Office (RDO) where the taxpayer is registered and online sellers and merchants, vloggers, social media influencers, online content creators earning income from the platform and/or advertising.
b. "Ask for Receipt" Notice previously issued to registered business taxpayers shall still be valid until June 30, 2023 and shall be replaced through staggered issuance of NIRI to the existing business registrants based on the ending digit of the Tax Identification Number (TIN) starting October 3, 2022.
All registered business taxpayers requesting the replacement of their old "Ask for Receipt" Notice are required to update their registration information before the release of NIRI. A designated official company email address shall be required, which the BIR shall use in serving its orders, notices, letters, communications, and other processes to taxpayers.
BIR DISCONTINUES THE ISSUANCE OF TAX VERIFICATION NOTICES FOR ESTATE TAX CASES WHERE THE DECEDENT HAS NO REGISTERED BUSINESS
SEPTEMBER 29, 2022
Revenue Memorandum Order (RMO) No. 41-2022, issued on September 29, 2022, prescribes the revised policy in issuing Tax Verification Notices (TVN) for Estate Tax cases. The use of TVN was initially mandated to replace the Return Verification Orders for verification and processing of One-Time Transaction (ONETT) tax returns. However, the use of TVNs for ONETT was streamlined for estate tax transactions only based on RMO No. 15-2003, which prescribes the policies, guidelines, and procedures in the processing and monitoring of ONETT and the issuance of Certificates Authorizing Registration (CARs), and RMO No. 69-2010, which prescribes the guidelines on the issuance of Electronic Letters of Authority, TVNs, and Memoranda of Assignment.
To comply with the “Ease of Doing Business” in processing requests for issuance of CAR related to the transfer of properties left by the decedent, the issuance of TVN for Estate Tax cases where the decedent has no registered business shall be discontinued.
BIR ANNOUNCES THE AVAILABILITY OF NEW eBIRFORMS PACKAGE VERSION 7.9.3
SEPTEMBER 28, 2022
Revenue Memorandum Circular (RMC) No. 131-2022 announces the availability of the new eBIRFORMS Package Version 7.9.3 containing the additional Alphanumeric Tax Codes (ATC) to be used by International Carriers in paying their taxes, revised Terms of Service Agreement, and required official e-mail address to be provided on the profile page where future BIR notices will be sent.
BIR EXTENDS THE DEADLINE FOR THE FILING OF TAX RETURNS & REPORTORIAL DOCUMENTS DUE ON SEPTEMBER 26, 2022, DUE TO TYPHOON “KARDING"
SEPTEMBER 26, 2022
Revenue Memorandum Circular (RMC) No. 130-2022 extends the filing of returns and submission of reportorial requirements due on September 26, 2022, in connection with the Memorandum Circular No. 06 issued by the Office of the President, which suspends work in government offices in the National Capital Region (NCR), Regions I, II, III, IV-A (CALABARZON), IV-B (MIMAROPA), V, and Cordillera Region. The e-filing/filing and payment of returns (BIR Forms 2550M, 2550Q, and 2551Q), and the submission of reportorial documents that fell on September 26, 2022, is extended to the following day, September 27, 2022.
BIR ISSUES IRR FOR THE AVAILMENT OF INCENTIVES UNDER THE "FREE LEGAL ASSISTANCE ACT OF 2010"
SEPTEMBER 13, 2022
Revenue Regulations (RR) No. 12-2022 prescribes the policies and guidelines for the availment of incentives under Republic Act No. 9999 (Free Legal Assistance Act of 2010). Lawyers or professional partnerships rendering actual free Legal Services shall be entitled to an allowable deduction from the gross income equivalent to the lower of the amount that could have been collected for the actual free Legal Services rendered or 10% of the gross income derived from the actual performance of the legal profession. The regulations provide for the mechanics as well as the documentary requirements for the availment of incentives.
BIR LIFTS THE SUSPENSION OF ENFORCEMENT ACTIVITIES COVERED BY MISSION ORDERS
SEPTEMBER 7, 2022
Revenue Memorandum Circular (RMC) No. 127-2022 lifts and removes the suspension and prohibition of all field audits and other field operations of the BIR covered by outstanding Mission Orders (MOs) authorizing the conduct of enforcement activities and operations of any kind, such as but not limited to ocular inspection, surveillance activities, stock-taking activities, and the implementation of the administrative sanction of suspension and temporary closure of business, and the issuance of new MOs authorizing such activities and operations.
BIR CLARIFIES CERTAIN ISSUES RELATIVE TO THE REMOVAL OF THE FIVE (5) YEAR VALIDITY PERIOD OF RECEIPTS/INVOICES
AUGUST 30, 2022
Revenue Memorandum Circular No. 123-2022 clarifies the provisions of Revenue Regulations (RR) No. 6-2022 relative to the removal of the five (5) year validity period of receipts/invoices, which took effect last July 16, 2022.
Highlights include:
a. All receipts/invoices that have expired on or before July 15, 2022, shall no longer be valid.
b. All unused and expired receipts/invoices dated on or before July 15, 2022, shall be surrendered together with an inventory listing on or before the 10th day after the validity period of the expired receipts/invoices, for destruction.
c. Receipts or invoices expiring on or after July 16, 2022, shall still be valid until fully exhausted.
d. The phrase, "THIS INVOICE/RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF THE ATP" and the "Validity Period" reflected at the footer of the printed receipts/invoices shall be disregarded.
e. A taxpayer with Authority to Print (ATP) expiring on or before July 15, 2022, who failed to apply for subsequent ATP not later than the sixty (60)-day mandatory period prior to expiration shall not be liable to pay a penalty for late application of ATP.
f. Taxpayers who used/will use unregistered receipts or invoices and those that expired prior to July 15, 2022, shall be subject to a penalty amounting to Php 20,000 for the first (1st) offense and Php 50,000 for the second (2nd) offense.
g. All applications for accreditation of Cash Register Machine/Point-of-Sale (CRM/POS) and other Sales Receipting Software shall no longer require the phrases "THIS INVOICE/RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF THE PERMIT TO USE" and the "Valid Until (mm/dd/yyyy)" of Permit to Use (PTU) to be reflected on the footer of generated receipts/invoices during the evaluation.
h. For the registration of Computerized Accounting Software (CAS) and/or its Components, the phrase, "THIS INVOICE/RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF THE ACKNOWLEDGMENT CERTIFICATE" as previously required in Revenue Memorandum Order (RMO) No. 9-2021 shall no longer be required to be reflected on the generated receipts/invoices.
i. The taxpayer-user with registered PTU CRM/POS Machines/CAS shall be required to reconfigure their CRM/POS Machines/CAS until December 31, 2022, to remove the phrases "THIS INVOICE/RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF THE PERMIT TO USE"/"THIS INVOICE/RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF THE ACKNOWLEDGMENT CERTIFICATE" and "Valid Until (mm/dd/yyyy)."
BIR LIFTS THE SUSPENSION OF FIELD AUDITS & OPERATIONS
AUGUST 22, 2022
Revenue Memorandum Circular (RMC) No. 121-2022 lifts the suspension of the field audits and operations covered by RMC No. 77-2022. It may be recalled that under RMC No. 77-2022, all field audits, field operations, or any form of business visitation in the execution of Letters of Authority/Audit Notices (LOAs) or Mission Orders (MOs) by the Bureau of Internal Revenue, including the conduct of TCVD, were suspended as of May 30, 2022. The resumption of field audit shall now be done on a per investigating office basis, upon approval by the Commissioner of Internal Revenue (CIR) through a Memorandum Request. No new Letters of Authority and written orders shall be issued except those enumerated under RMC No. 77-2022 and upon reassignment of revenue examiners.
BIR PRESCRIBES THE ADDITIONAL GUIDELINES ON PENALTY COMPUTATION FOR IT-BPM RBEs VIOLATIONS REGARDING WFH ARRANGEMENT
AUGUST 18, 2022
Revenue Memorandum Circular (RMC) No. 120-2022 prescribes the additional guidelines and procedures on the manner of payment of penalty to violations incurred by the Registered Business Enterprises (RBEs) in the Information Technology-Business Process Management (IT-BPM) sector on the conditions prescribed regarding Work-From-Home (WFH) arrangement for the period of April 1, 2022 until September 12, 2022. Non-compliance with the prescribed conditions under Fiscal Incentives Regulatory Board (FIRB) Resolution No. 017-22 for at least one (1) day shall result in the suspension of its Income Tax incentives for the month when the violation took place. The RBEs shall pay, as a penalty, the regular Income Tax of either 25% or 20%, whichever is applicable, for the aforesaid month. It may be recalled that FIRB has previously allowed the IT-BPM sector to adapt WFH arrangement where the number of employees under the WFH arrangement shall not exceed 30% of the total workforce of the RBE while the remaining 70% of the total workforce shall render work or service within the geographical boundaries of the Ecozone or Freeport being administered by the Investment Promotion Agencies (IPAs) with which the project or activity is registered. This temporary measure will only last until September 12, 2022, unless extended.
BIR LIFTS THE SUSPENSION OF TAX AUDIT COVERED BY MISSION ORDER
JULY 28, 2022
Revenue Memorandum Circular (RMC) No. 115-2022 lifts the suspension of the issuance of Mission Orders insofar as authorizing Revenue Officers to conduct Tax Compliance Verification Drive (TCVD). This includes verification of complaints involving the alleged violations of the 1997 National Internal Revenue Code (NIRC), as amended. The issuance of Mission Orders other than for TCVD purposes shall remain suspended until further notice.
BIR PRESCRIBES THE POLICIES & GUIDELINES FOR THE ADMISSIBILITY OF SALES DOCUMENTS GENERATED FROM ELECTRONIC INVOICING/RECEIPTING & SALES REPORTING SYSTEM (EIS)
JUNE 30, 2022
Revenue Regulations No. 9-2022 prescribes the policies and guidelines for the admissibility of sales documents in electronic format in lieu of hard copies in relation to the Electronic Reporting System as required under the Republic Act (R.A.) No. 10963, otherwise known as the “Tax Reform for Acceleration and Inclusion” (TRAIN Law).
Highlights include the following:
1. The covered taxpayers are required to issue Electronic Sales Invoices/Official Receipts through web-based facilities, such as those taxpayers engaged in the export of goods and services, e-commerce, and Large Taxpayers.
2. The requirement for the term "zero-rated sales" to be prominently stamped on the face of the receipt or invoice is no longer required.
3. The requirement to submit printed invoices or receipts for purchases made from suppliers and sales made by taxpayers who have been properly authorized to use the EIS or through Application Programming Interface (API) transmission of sales data is no longer required.
4. Only purchase data that are validated in the EIS shall be allowed to claim input Value-Added Tax (VAT) or deductible expenses for income tax purposes. Receipts and invoices presented or claimed as purchases that are not reported in the EIS by the supplier shall be construed as unreported sales and will be subject to further investigation.
5. The original form or digital copies, whichever is applicable, must be retained for possible verification or validation of the sales and purchases data generated through the EIS or submitted electronic forms of invoices or receipts.
6. Taxpayers may be required to present or submit hard copies of the receipts or invoices or be allowed access to the computerized system upon approval of the Commissioner of Internal Revenue (CIR) or his authorized representative based on the attendant and justifying circumstances.
7. Revenue Officers are not precluded from accessing the respective CAS or POS/CRM machines of the taxpayer under the EIS to validate whether the sales data transmitted to the EIS matches the sales recorded in their electronic systems. If the taxpayer refuses to do so, Revenue Officers are allowed to use alternative methods to verify the taxpayer's records, which may lead to disallowances or assessments, prosecution by the BIR, and/or revocation of the Acknowledgement Certificate or Permit to Use CAS.
8. Sales and purchases not covered by these Regulations must adhere to the existing policies and procedures for manual sales and purchase verification.
BIR PRESCRIBES THE TEMPLATE FOR SWORN DECLARATION TO BE EXECUTED BY REGISTERED BUSINESS ENTERPRISE
JUNE 30, 2022
Revenue Memorandum Circular (RMC) No. 84-2022 prescribes the template of Sworn Declaration to be executed by the duly Registered Business Enterprise (RBE), stating that the goods and/or services being purchased shall be used directly and exclusively in the registered project or activity. The sworn declaration shall be provided to the RBE’s supplier before the sale transaction to avail of the VAT zero-rate incentives.
BIR CLARIFIES THE 30-DAY PERIOD TO SERVE THE LOA & 180-DAY PERIOD TO COMPLETE THE AUDIT
JUNE 30, 2022
Revenue Memorandum Circular (RMC) No. 82-2022 clarifies that the Electronic Letter of Authority (eLA), which remains unserved upon the effectivity of this Circular or has been served beyond the 30-day period from the date of its issuance, shall still be considered valid and enforceable, provided that the 180-day period (Revenue District Office cases) and 240-day period (Large Taxpayers cases) to complete the audit process has not yet expired.
BIR PRESCRIBES THE POLICIES & GUIDELINES FOR THE IMPLEMENTATION OF ELECTRONIC INVOICING/RECEIPTING SYSTEM (EIS)
JUNE 30, 2022
Revenue Regulations (RR) No. 8-2022 prescribes the policies and guidelines for the implementation of the Electronic Invoicing/Receipting System (EIS) in lieu of manual receipts or invoices, pursuant to the provisions of Republic Act (R.A.) No. 10963 (TRAIN Law).
Highlights include the following:
1. Taxpayers mandated to issue electronic receipts or sales/commercial invoices
2. Manner of electronic reporting or transmittal of sales data to the Bureau using their Sales Data Transmission System (SDTS)
3. Enrolment and certification processes to enable the real-time transmission of sales data
4. Reporting requirements after the transmission of sales data to the Bureau
BIR REMOVES THE FIVE-YEAR VALIDITY PERIOD ON RECEIPTS/INVOICES
JUNE 30, 2022
Revenue Regulations (RR) No. 6-2022 removes the five-year validity period on receipts/invoices. The removal is aligned with the Republic Act (R.A). No. 11032, otherwise known as the “Ease of Doing Business and Efficient Government Service Delivery Act of 2018.”
Highlights include the following:
1. The removal shall cover taxpayers who will apply for the following:
a. Authority to Print (ATP) Official Receipts (ORs), Sales Invoices (SIs), and Other Commercial Invoices (CIs)
b. Registration of Computerized Accounting System (CAS)/Component of CAS
c. Permit to Use (PTU) Cash Register Machines (CRMs) and Point-of-Sale (POS) machines based
2. All PTUs to be issued shall be valid unless revoked by the BIR on grounds which shall include, but are not limited to, the following:
a. Tampering of sales data/integrity of the data and/or software specification/features to alter/avoid the recording of a sale transaction;
b. Any major repair, upgrades, integration, and modification/alteration without prior notification and approval by the BIR;
c. Any violation of the policies and procedures for registration and related issuances.
3. The phrases "THIS INVOICE/RECEIPT SHALL BE VALID FOR 5 YEARS FROM THE DATE OF PERMIT TO USE/ATP" and "Valid Until," as previously required by prior regulations, shall be omitted or disregarded. Thus, the validity date on existing and unused receipts/invoices shall be disregarded, and such may still be issued until fully exhausted unless revoked by the BIR.
4. Subsequent printing of manual receipts/invoices must not reflect these phrases and shall no longer adopt the five-year validity.
BIR ISSUES IRR ON ESTATE TAX EXEMPTION OF TRANSFERS MADE BY A VETERAN IN FAVOR OF PHILIPPINE VETERANS BANK
JUNE 20, 2022
Revenue Regulations (RR) No. 5-2022 implements the Estate Tax exemption under Republic Act (RA) No. 11597, otherwise known as “Revised Charter of the Philippine Veterans Bank.” All transfers through succession or donation mortis causa, made by a veteran of his shares of stock with the Philippine Veterans Bank are exempted from Estate Tax, provided that the same was made in favor of the veteran's widow, orphan, or compulsory heir as determined by existing laws. A tax clearance must be secured with the Revenue District Office, where the estate of the decedent is registered, before any transfer of shares is registered in the books of the Philippine Veterans Bank.
BIR CLARIFIES THE TAX TREATMENTS & OBLIGATIONS OF THE DIFFERENT CLASSIFICATIONS OF EDUCATIONAL INSTITUTIONS
JUNE 9, 2022
Revenue Memorandum Circular (RMC) No. 78-2022, issued on clarifies the Income Tax treatment and tax obligations of the different classifications of educational institutions.
Highlights include:
I. Income Tax Treatment
a. Proprietary Educational Institution
• The income of a proprietary educational institution, as well as Non-Stock, Non-Profit (NSNP) educational institutions whose net income or assets accrue/inure to or benefit any member or specific person, is subject to 10% (now 1% from July 1, 2020, until June 30, 2023).
• If unrelated income exceeds 50% of the total gross income, the Regular Corporate Income Tax (RCIT) rate shall be applied to the entire income.
b. Government Educational Institution (GEI)
• If the GEI’s Charter expressly provides that it is exempt from taxes, then the GEI is exempt from applicable taxes. However, if GEI’s Charter does not explicitly provide that it is exempt from tax, then Section 30 (I) of the 1997 Tax Code, as amended, shall govern its claim of tax exemption.
c. Non-stock and Non-profit Educational Institutions (NSNP)
• All revenues and assets used directly and exclusively for educational purposes shall be exempt from taxes and duties.
II. Tax Treatment of Contributions or Gifts/Donations to Educational Institutions
a. Deduction from gross income of donor subject to the following ceiling based on the donor’s taxable income: (1) 10%-individual (2) 5%-corporation) or (3) full deductibility if the conditions under Section 34(H)(2)(c) of the 1997 Tax Code, as amended are complied.
b. Exemption from Donor’s Tax subject to the condition that the donee institution shall not use more than 30% of said gifts/donations for administration purposes.
III. Withholding Tax Obligations
a. Withhold on income payments such as compensation and purchases of goods and services
b. NSNP educational institutions shall not be subject to any Creditable or Final Withholding Tax (CWT/FWT) on their revenues and assets used actually, directly, and exclusively for educational purposes subject to the presentation of Certificate of Tax Exemption (CTE) or exemption rulings, and Securities and Exchange Commission (SEC) registration. Newly organized NSNP educational institutions must secure their CTE within three (3) months from the issuance of their Certificate of Registration with the SEC.
c. Proprietary educational institutions, including NSNP educational institutions, which are subject to preferential Income Tax of 10% (now 1% until June 30, 2023), are subject to CWT/FWT. The CWT on the income payments to these institutions should not be more than the statutory income tax rate imposed on proprietary educational institutions under Section 27(B) of the Tax Code (i.e., 1%).
IV. Compliance Requirements
a. Register with the BIR
b. Secure Authority to Print Receipts/Invoices
c. Register Books of Accounts and update registration information
d. Issue receipts/invoices
e. File tax returns
f. Secure Certificate of Income Tax Exemption
BIR DELEGATES THE SIGNING & APPROVAL OF THE CERTIFICATE OF TAX EXEMPTION ON SEPARATION PAY FOR LARGE TAXPAYERS' SERVICE
JUNE 7, 2022
Revenue Delegation Authority Order (RDAO) No. 4-2022 delegates to the Assistant Commissioner (ACIR) of the Large Taxpayers' Service (LTS) or, in his/her absence, to the concerned Head Revenue Executive Assistant (HREA), the authority to sign and approve Certificate of Tax Exemption (CTE) from Income Tax and from Withholding Tax for separation benefits received by officials and employees on account of their separation from employment due to death, sickness or other disability processed at the LTS.
BIR CIRCULARIZES THE NEW LIST OF TOP WITHHOLDING AGENTS & THOSE FOR DELETION FROM THE EXISTING LIST
JUNE 6, 2022
Revenue Memorandum Circular (RMC) No. 80-2022 circularizes the additional List of Top Withholding Agents (TWAs) required to deduct and remit either the 1% or 2% Creditable Withholding Tax (CWT) from the income payments to their suppliers of goods and services, respectively, pursuant to Revenue Regulations (RR) No. 31-2020, including the List of TWAs for deletion from the existing list. The obligation to deduct and remit to the BIR shall continue, commence, or cease, as the case may be, effective July 1, 2022. Any taxpayer not found in any of the published List of TWAs is deemed excluded and therefore, not required to deduct and remit the 1% or 2% CWT under the abovementioned RR.
BIR SUSPENDS ALL FIELD AUDITS, COVERED BY LOA/MO, EFFECTIVE MAY 30, 2022
MAY 30, 2022
Revenue Memorandum Circular (RMC) No. 77-2022, issued on May 30, 2022, suspends all field audits of the BIR covered by Letters of Authority (LOAs)/Mission Orders (MOs) relative to examinations of taxpayer's books of account and accounting records. As such, no field audits, field operations, or any forms of business visitation in the execution of LOAs/MOs should be conducted, nor any new LOAs/MOs be further issued, except in the following cases:
lnvestigation of cases prescribing on or before October 31,2022
Processing and verification of estate tax returns, donor's tax returns, capital gains tax returns, and withholding tax returns on the sale of real properties or shares of stocks together with the documentary stamp tax returns related thereto
Examination and/or verification of internal revenue tax liabilities of taxpayers retiring from business
Audit of National Government Agencies (NGAs), Local Government Units (LGUs), and Government-Owned and Controlled Corporations (GOCCs) including subsidiaries and affiliates
Other matters/concerns where deadlines have been imposed or under the orders of the Commissioner of lnternal Revenue
BIR SUSPENDS ALL FIELD AUDITS, COVERED BY SPECIAL ORDERS, OPERATIONS MEMORANDA & OTHER SIMILAR DIRECTIVES OF SPECIAL TASK FORCE, EFFECTIVE MAY 30, 2022
MAY 30, 2022
Revenue Memorandum Circular (RMC) No. 76-2022, issued on May 30, 2022, suspends all field audits covered by Revenue Special Orders (RSOs), Operation Memoranda (OM), and other similar orders or directives of Special Task Force, relative to examinations of taxpayers' books of account and accounting records effective May 30, 2022. As such, no field audits, field operations, or any forms of business visitation in the execution of Letters of Authority/Audit Notices (LOAs) or Mission Orders (MOs) should be conducted by the said Task Forces.
BIR ISSUES IRR ON TAX TREATMENT OF IMPORTATION OF PETROLEUM PRODUCTS IN FREEPORT & ECOZONE
MAY 26, 2022
Revenue Regulations (RR) No. 4-2022 implements Sections 295(F), as amended by Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE Law), on the Tax Treatment of the Importation of Petroleum and Petroleum Products into, and subsequent transfer, transport, and/or withdrawal through and from Freeport Zones and Economic Zones.
Highlights include:
a. The proper tax administration and treatment of all petroleum products entered and/or imported into Philippine Freeport Zones or Economic Zones;
b. The strict monitoring process of the movement of all petroleum and petroleum products within the aforementioned Zones and the subsequent transfer, transport and/or withdrawal of the same therefrom; and
c. The guidelines on the refund of Value-Added Tax (VAT) and Excise Taxes paid for transactions statutorily zero-rated or exempt therefrom.
BIR CIRCULARIZES THE JOINT GUIDELINES ON THE BENEFITS & PRIVILEGES OF THE SENIOR CITIZENS & PERSONS WITH DISABILITIES ON THEIR ONLINE PURCHASES & PHONE CALLS/SMS
MAY 18, 2022
Revenue Memorandum Circular No. 71-2022 circularizes the Joint Memorandum Circular No. 1-2022 entitled “Guidelines on the Provision of the Mandatory Statutory Benefits and Privileges of the Senior Citizens and Persons with Disabilities on their Purchases Through Online (E-Commerce) and Phone Call/SMS."
Highlights include:
1. A Senior Citizen (SC) or a Person with Disability (PWD) shall be entitled to the 20% discount and 12% Value-Added Tax (VAT) exemption of their purchase of goods and services; and a 5% special discount for basic necessities and prime commodities for their exclusive use and enjoyment.
2. In the purchase of goods and services which are the subject of promotional discount, the SC or the PWD can avail of the establishment’s offered discount or the 20% discount with VAT exemption or the 5% special discount, whichever is higher/more favorable and applicable.
3. In cases wherein the buyer or customer is both SC and PWD, he shall be entitled only to a single 20% discount, with VAT exemption, or 5% special discount, whichever is applicable under his valid SC ID or PWD ID.
4. Drugs identified as “essential” and “not essential” shall be considered “Basic Necessities” and “Prime Commodities”, respectively. However, for purposes of determining the rightful statutory discount, the SC or PWD shall be granted a flat discount of 20%.
5. The total amount of offline and online purchases of SCs and PWDs per calendar week shall not exceed the amount of Php 1,300 without carry-over of the unused amount, unless otherwise increased, provided that the purchase of medicine shall no longer be limited by the Php 1,300 ceiling.
6. The SC must present his SC Identification Card (ID) issued by the Office of the Senior Citizens Affairs (OSCA) in the city or municipality where the senior citizen resides, or any government-issued ID, which reflects the name, picture, date of birth, and nationality of the senior citizen.
7. The PWD must present the PWD ID issued by the Persons with Disability Affairs Office (PDAO) or the City/Municipal Social Welfare and Development Office (C/MSWDO) of the place where the person with a disability resides, or the NCDA.
8. If a purchaser is both an SC and a PWD, the purchaser shall only be allowed to avail of either the discount for SCs or PWDs, and he shall present the relevant ID.
9. If the purchaser is a child with a disability, the parents have the full authority to purchase the product for their child and must only present the ID as required.
10. On the purchase of group meals, the basis of the 20% discount shall be on the amount corresponding to the combination of the most expensive and biggest single-serving meal with a beverage served in a quick-service restaurant, which is deemed flexible and is adjusted accordingly by food establishments to estimate a single food purchase for an individual SC and PWD.
11. For purchases made through the internet or online platform, the SC or PWD must declare to the online platform/merchant that he is an SC or a PWD, before placing the order.
12. Upon delivery of the goods/orders or performance of the service purchased through the online platform, the SC or the PWD or his duly authorized representative shall present the original copy of the SC or the PWD proof of entitlement which was attached during the confirmation of his orders, together with the authorization letter, if applicable; otherwise, the full amount of the goods/orders or services will be charged.
13. The same rules apply to purchases made through the telephone or mobile phone calls.
14. The business establishments shall have the right to act on any abuse, misrepresentations, falsification, or any other acts contrary to law on the availment of the SC or PWD discount by blocking or suspending the account or name of the erring person.
15. Any individual or business establishment who fails or refuses to observe the statutory discount afforded to SCs and PWDs may be held liable for the penalties provided by law.
BIR PRESCRIBES THE POLICIES, GUIDELINES & PROCEDURES IN THE REVALIDATION OF TAX CREDIT CERTIFICATE
APRIL 29, 2022
Revenue Memorandum Order (RMO) No. 26-2022, issued on April 29, 2022, prescribes the policies, guidelines, and procedures in the application for revalidation of Tax Credit Certificates (TCC).
Highlights include the following:
a. Documentary requirements as well the BIR offices that will handle the application.
b. All applications for TCC revalidation shall be submitted any time before the expiration of the validity period of the original TCC. A new TCC will be issued reflecting its unutilized amount or creditable balance.
c. Issued TCCs that remain unutilized after five (5) years from the date of issue, unless an application for revalidation has been filed before the end of the fifth (5th) year, shall be considered invalid. It shall not be allowed for use as payment of any internal revenue tax liability, and the unutilized Certificate shall revert to the general fund of the government.
d. The revalidated TCC shall be valid for five (5) years from the date of its issue.
e. No revalidated TCC shall be issued unless the BIR has certified that the taxpayer-TCC holder has no outstanding tax liability which refers to an assessment that is already final and executory pursuant to Section 5(d) of Revenue Regulations No. 5-2000. The processing of an application for revalidation that was held in abeyance due to the existence of outstanding tax liability and valid open-stop filer cases shall be settled with the concerned RDO within two (2) years from the date of application for TCC revalidation. Non-settlement of the outstanding tax liability or valid open cases shall result in the denial of the taxpayer’s applications for TCC revalidation.
BIR ANNOUNCES THE AVAILABILITY OF CENTRAL BUSINESS PORTAL FOR ONLINE REGISTRATION OF ALL TYPES OF CORPORATIONS, PARTNERSHIPS & SOLE PROPRIETORS
APRIL 28, 2022
Revenue Memorandum Circular No. 61-2022 announces the availability of Central Business Portal (CBP) for online registration of all types of corporations, partnerships, and sole proprietors in view of the expansion of the portal to include the Department of Trade and Industry (DTI) and additional Local Government Units (LGUs) in the online processing of business registration. The CBP is an online platform that aims to streamline and to integrate the business registration processes of the Securities and Exchange Commission (SEC), DTI, Bureau of Internal Revenue (BIR), Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), Home Development Mutual Fund (HDMF), and selected LGUs in Metro Manila. The CBP was developed in compliance with the provisions of Republic Act (R.A.) No. 11032, or the "Ease of Doing Business and Efficient Government Service Delivery Act of 2018", to establish a central system to receive applications and capture application data involving business-related transactions.
BIR PRESCRIBES A STANDARD FORMAT FOR NUMBERING TAX ASSESSMENT NOTICES
APRIL 27, 2022
Revenue Memorandum Order (RMO) No. 23-2022 prescribes the standard format for the numbering of deficiency tax assessment notices. Highlights include the proper numbering, sequencing, and indexing for proper monitoring. Likewise, decisions on disputed assessments, whether whole or partial acceptance or denial, will be communicated to the taxpayer through the issuance of a Final Decision on Disputed Assessment (FDDA) bearing the amended deficiency tax assessment. Whenever a replacement electronic Letter of Authority (eLA) is issued due to reassignment of the case to another Revenue Officer/Group Supervisor, the applicable letter of demand/assessment notice shall now bear the recent LA Serial Number and Audit Case Number.
BIR CLARIFIES THE FILING & PAYMENT OF FRANCHISE TAX RETURN FOR PAGCOR LICENSEES
APRIL 22, 2022
Revenue Memorandum Circular (RMC) No. 52-2022 clarifies the filing and payment date of the franchise tax and its corresponding return for Philippine Amusement and Gaming Corporation (PAGCOR) Licensees.
It may be recalled that under RMC No. 32-2022, the BIR has clarified that the 5% franchise tax is directly payable to the BIR, and that the Licensee shall remit the franchise tax to the BIR using BIR Form 2553 indicating the Alphanumeric Tax Code (ATC) OT 010.
As further clarified, the said BIR Form shall be filed and the corresponding franchise tax shall be paid within 25 days after the end of each taxable quarter.
BIR PARTLY AMENDS RMC 24-2022 TO ALIGN WITH THE PROVISIONS OF CREATE LAW
APRIL 20, 2022
Revenue Memorandum Circular (RMC) No. 49-2022 amends pertinent portion of the Q & A in RMC No. 24-2022 to align them with the provisions of Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law and its Implementing Rules and Regulations (IRR).
Highlights include:
a. Work-around procedures, as a result of the deferment of Revenue Regulations (RR) No. 9-2021 related to the imposition of 12% VAT on certain transactions previously subjected to 0% VAT, also applies to other affected taxpayers and not limited to sales to registered export enterprises and domestic market enterprises (DMEs) within Ecozones and Freeport Zones.
b. Qualifications on the entitlements of registered non-export locators (prior to CREATE Law) or domestic market enterprises (DMEs as introduced in CREATE Law) located in Ecozones and Freeport Zones shall be dependent on their date of registration, whether prior to or during the effectivity of the CREATE Law.
c. Work-around procedures for existing registered export enterprises transitioning from Income Tax Holiday (ITH) to 5% Special Corporate Income Tax (SCIT) but remained as VAT-registered.
d. Clarifications on prior approval from the BIR by local suppliers of goods and services of registered export enterprises in order to qualify for VAT zero-rating.
BIR DISPENSES THE REQUIREMENT OF AFS FOR CDA-REGISTERED ENTITIES WITH GROSS SALES OR RECEIPTS OF LESS THAN PHP 3 MILLION FOR RENEWAL OF CERTIFICATE OF TAX EXEMPTION
APRIL 20, 2022
Revenue Memorandum Circular (RMC) No. 48-2022 clarifies that cooperatives registered under the Cooperative Development Authority (CDA) whose gross annual sales, receipts, or earnings do not exceed the threshold of Php 3 Million shall not be required to submit an Audited Financial Statements (AFS) for renewal of Certificate of Tax Exemption (CTE) purposes.
It may be recalled that the Tax Reform for Acceleration and Inclusion (TRAIN) Law amends Section 232 of the 1997 Tax Code specifically on the requirement of keeping books of accounts audited and examined by independent Certified Public Accountant (CPA) for taxpayers whose gross annual sales, receipts, or earnings do not exceed Php 3 Million.
BIR CLARIFIES THE DEADLINE OF SUBMISSION OF ATTACHMENTS TO THE 2021 ANNUAL INCOME TAX RETURN
APRIL 18, 2022
Revenue Memorandum Circular (RMC) No. 46-2022 clarifies that the deadline of the submission of attachments to the 2021 Annual Income Tax Return (AITR) is on or before May 31, 2022, whether the electronically filed AITR is an original or an amended return. The submission shall be made either manually to the BIR office where the taxpayer is registered, or electronically via the Electronic Audited Financial Statements (eAFS) System.
APRIL 12, 2022
APRIL 12, 2022
BIR CLARIFIES THE DEADLINE FOR THE FILING OF ANNUAL ITR & NON-IMPOSITION OF SURCHARGE ON AMENDED RETURNS
APRIL 12, 2022
Revenue Memorandum Circular (RMC) No. 42-2022 clarifies the deadline for the filing of Annual Income Tax Return (AITR), guidelines in the manner of filing and payment thereof, and non-imposition of surcharge on amended returns.
Highlights include:
a. The deadline for the filing of Calendar Year 2021 AITR is on or before April 18, 2022, since April 15, 2022 falls on a non-working holiday.
b. Amendments may be filed on or before May 16, 2022, without the imposition of penalties. Any overpayment of taxes paid, as a result of the amendment, may be carried over as tax credit against the same tax type in the succeeding period, or file for a refund.
c. Electronic signature shall be deemed equivalent to an actual signature or “wet signature” for filing purposes.
d. Attachments to the AITR that are required to be electronically filed/amended must be submitted on or before May 31, 2022, to the BIR where the taxpayer is registered or through Electronic Audited Financial Statements (eAFS) facility.
BIR ISSUES IRR ON TAXATION OF PROPRIETARY EDUCATIONAL INSTITUTIONS AND NON-PROFIT HOSPITALS
APRIL 8, 2022
Revenue Regulations (RR) No. 3-2022, issued on April 8, 2022, implements the provisions of the Republic Act (R.A.) No. 11635 or the Act Amending Section 27 (B) of the National Internal Revenue Code (NIRC) of 1997, as amended, on the income taxation of proprietary educational institutions and hospitals that are non-profit.
Highlights include:
a. The following institutions shall be covered by the preferential 10% corporate income tax rate; provided, however, that beginning July 1, 2020 until June 30, 2023, the rate of 1% shall apply:
Proprietary educational institutions
Hospitals that are non-profit
Non-stock, non-profit educational institutions whose net income or assets accrue/inure to or benefit any member or a specific person
b. The 25% regular corporate income tax rate shall be imposed on the entire taxable income of the institutions mentioned above, if their gross income from unrelated trade, business or other activity exceeds 50% of the total gross income they derived from all sources.
c. Non-stock, non-profit educational institutions shall be subject to the rate of 25% regular corporate income tax on the portion of its revenues or assets not used actually, directly, and exclusively for educational purposes.
BIR CLARIFIES THE GUIDELINES ON THE USE OF eAFS SYSTEM & e-SIGNATURES
APRIL 6, 2022
Revenue Memorandum Circular (RMC) No. 40-2022 provides clarifications and guidelines on the use of the Electronic Audited Financial Statement (eAFS) System as well as the use of electronic signature on all tax returns, attachments, and documents required to be submitted along with the Annual Income Tax Returns (AITR). The submission of eFiled AITR and its attachments to the eAFS is applicable to any taxable year, whether fiscal or calendar year. The existing procedures for the submission of filed AITR and its attachments to the eAFS system shall be observed. Likewise, the use of electronic signature applies to all tax returns, attachments, and documents required to submit AITR and returns.
BIR CLARIFIES THE GUIDELINES ON THE PAYMENT OF PENALTY FOR RBEs VIOLATING THE WFH GUIDELINES PRESCRIBED BY FIRB
APRIL 6, 2022
Revenue Memorandum Circular (RMC) No. 39-2022 clarifies the manner of payment of penalties by Registered Business Enterprises (RBEs) under the Information Technology-Business Process Management (IT-BPM) Sector for violations of the conditions prescribed under the Work-from-Home (WFH) Arrangement pursuant to Fiscal Incentives Review Board (FIRB) Resolution Nos. 19-21 and 23-21.
Highlights include:
1. RBE shall be liable for payment of regular income tax of either 25% or 20%, whichever is applicable, corresponding to the months of violation of WFH conditions.
2. RBE with no transactions subject to regular income tax can voluntarily pay the penalty using BIR Form No. 0605 by choosing the radio button pertaining to 'Others', under 'Voluntary Payment' and indicate in the field provided the phrase "Penalty" pursuant to FIRB Resolution No. 19-2021". The tax type code shall still be "IT" and the ATC to be indicated is "MC 200". Penalties should be settled within 30 days after the due date prescribed for the payment of income tax.
3. RBE shall continue to file its AITR using BIR Form No. 1702-EX for those with Income Tax Holiday Incentive and BIR Form No. 1702-MX for those enjoying Gross Income Tax Incentive or those with mixed transactions.
BIR FURTHER CLARIFIES THE AVAILMENT PERIOD OF VAT ZERO-RATING INCENTIVES OF EXISTING REEs UNDER IPAs
APRIL 6, 2022
Revenue Memorandum Circular (RMC) No. 38-2022 clarifies the transitory provisions for the non-income related tax incentives, specifically the VAT zero-rating on purchases of Registered Export Enterprises (REEs) under Investment Promotion Agencies (IPAs.)
It may be recalled that pursuant to CREATE Act and its implementing rules and regulations, REEs shall be entitled to VAT zero-rating on local purchases that are directly attributable to and exclusively used in the registered project or activity.
Highlights include:
1. All existing REEs prior to CREATE that will continue to avail of their existing income tax incentives may continue to enjoy the Value-Added Tax (VAT) zero-rating on local purchases that are directly attributable to and exclusively used in the registered project or activity until the expiration of the transitory period, as follows:
a. REEs enjoying only an Income Tax Holiday (ITH)-until the remaining period of the ITH.
b. REEs granted an ITH and/or 5% tax on gross income earned-until the expiration of the ten (10) year limit.
2. If the income tax incentive of an REE has already expired prior to CREATE, VAT zero-rating on local purchases could no longer be availed since the extent for the availment of VAT zero-rating on local purchases is anchored on the transitory provision above.
APRIL 6, 2022
BIR PRESCRIBES A UNIFORM TEMPLATE FOR VAT ZERO PERCENT CERTIFICATION ISSUED BY IPA
APRIL 6, 2022
Revenue Memorandum Circular (RMC) No. 36-2022 prescribes the format of Value-Added Tax (VAT) zero-rating certification issued by Investment Promotion Agencies (IPAs) to the duly Registered Export Enterprises (REEs). The format includes the registered activity, entitlement to tax incentives, applicable goods and services, and template. All IPAs are required to submit a master list of all REEs which have been issued the said certification to the Audit Information Tax Exemption Incentives Division (AITEID).
BIR CIRCULARIZES THE NEW BIR FORM 2316
MARCH 31, 2022
Revenue Memorandum Circular (RMC) No. 34-2022 circularizes the availability of revised BIR Form No. 2316 (Certificate of Compensation Payment/Tax Withheld for Compensation Payment With or Without Tax Withheld) September 2021 ENCS. The new form incorporates the additional line for the 5% tax credit under Personal Equity and Retirement Account (PERA) Act of 2008.
BIR CLARIFIES THE TAXABILITY OF PAGCOR, ITS CONTRACTEES & LICENSEES
MARCH 29, 2022
Revenue Memorandum Circular (RMC) No. 32-2022 clarifies the tax treatment of the Philippine Gaming Corporation (PAGCOR), its Contractees and Licensees.
Highlights of the circular are as follows:
1. PAGCOR's income from its operations and licensing of gambling casinos, and other similar recreation or amusement places are subject to the 5% Franchise Tax, in lieu of all taxes, pursuant to Presidential Decree (P.D.) No 1869.
2. Income from "other related operations/services" shall be subject to regular corporate income tax, VAT, and other applicable taxes under the 1997 Tax Code, as amended.
3. Contractees and licensees shall be exempt from the payment of corporate income tax realized from the operation of casinos upon payment of the 5% Franchise Tax since the law is clear that said exemption inures and extends to their benefit.
4. For value-added tax (VAT) purposes, the tax exemption of PAGCOR extends only to those individuals or entities that have contracted with PAGCOR (PAGCOR Contractees and not Licensees) in connection with PAGCOR's gaming operations.
5. For Licensees that are in Ecozones/Freeports,
Their income realized from other related services/operations shall be subject to the tax regime applicable to said Licensees, that is, 5% Gross Income Tax (GIT) or Income Tax Holiday (ITH), as the case may be. If they are under 5% GIT, they are exempt from Regular Corporate Income Tax (RCIT) and value-added tax (VAT). On the other hand, if they are under ITH, then they are also exempt from RCIT but subject to VAT.
On their income realized from related services/operations which are not covered with their registered activity or activities with the concerned Investment Promotion Agencies (IPA), the same shall be subject to RCIT, VAT, and other applicable taxes under the 1997 Tax Code, as amended.
Their income from gaming operations shall not be subject to the GIT, ITH, or RCIT but remains subject to the 5% Franchise Tax.
6. Gaming operations revenues of PAGCOR Contractees shall be exempt from RCIT upon payment of the 5% Franchise. However, the goods they provided and/or services performed to PAGCOR in relation to such gaming operations are subject to 0% VAT.
7. The license/regulatory fees paid by Licensees to PAGCOR are different and distinct from the 5% Franchise Tax payable to the BIR.
MARCH 22, 2022
BIR REQUIRES ATTACHMENT OF CETI IN THE ANNUAL ITR TO BE FILED BY RBE
MARCH 16, 2022
Revenue Memorandum Circular (RMC) No. 28-2022 requires Registered Business Enterprises (RBEs) under Investment Promotion Agency (IPA) to apply for a Certificate of Entitlement to Tax Incentives (CETI) with their respective IPA, to submit and to attach the same in the Annual Income Tax Return (AITR) to avail of the Income Tax Holiday (ITH) or preferential rate granted under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.
BIR CLARIFIES THE TAXABILITY OF e-SABONG
MARCH 11, 2022
Revenue Memorandum Circular (RMC) No. 25-2022 clarifies the taxability of electronic sabong (e-Sabong) operations as regulated by the Philippine Amusement and Gaming Corporation (PAGCOR).
Highlights include:
1. The gaming income from e-Sabong Operation by an e-Sabong Operator(eSO) shall be subject to a 5% Franchise Tax in lieu of all internal revenue taxes except value-added tax (VAT), or percentage tax, depending on the threshold. This is separate and distinct from the 5% franchise tax due from PAGCOR arising from the licensing and regulatory fees that PAGCOR receives from the e-Sabong Operator. The Franchise Tax shall be remitted by the e-Sabong Operator directly to the BIR.
2. The following shall be subject to regular income tax, VAT or percentage tax depending on the threshold, withholding tax, and other taxes since these are not derived from the e-Sabong license issued by PAGCOR:
a. Service income and other income
b. Commission income-eSO shall withhold and remit the corresponding creditable withholding taxes (CWT) (5%/10% for individual payees and 10%/15% for non-individual payees) due for the account of the Master Agent/Agent or Promoter/Coordinator.
c. The income received by the cockpit owner/operator-eSO shall be subject to withholding tax of 5% CWT due for the account of the cockpit owner/operator.
d. Income received by a Third Party Offsite-Cockpit Betting Station (OCBS) Host from the OCBS-eSO shall subject to withholding tax of 2% due for the account of the Third Party OCBS Host.
e. Income received by a Third-Party Game Cock Owner-eSO shall subject to withholding tax of 2% CWT due for the account of the Third-Party Gamecock Owner.
f. Other income derived or received by any person or entity in relation to the operation of e-sabong not included in the above-mentioned enumeration shall be subject to appropriate taxes, including but not limited to final withholding taxes and the like, under the 1997 Tax Code, as amended.
BIR CLARIFIES ISSUES RELATIVE TO RR 21-2021 IMPLEMENTING THE VAT ZERO-RATING AMENDMENTS INTRODUCED UNDER CREATE LAW
MARCH 9, 2022
Revenue Memorandum Circular (RMC) No. 24-2022 clarifies certain issues relative to Revenue Regulations (RR) No. 21-2021 implementing the amendments to the Value-Added Tax (VAT) zero-rating provisions under Sections 106 and 108 of the 1997 Tax Code in relation to the amendments introduced under CREATE Law, specifically on the effectivity of the VAT treatment of transactions by Registered Business Enterprises (RBEs) and the transitory provision of the said revenue regulations.
Highlights include:
a. "Cross Border Doctrine" as applied to Ecozones or Freeport Zones has been rendered ineffectual and inoperative for VAT purposes with the passage of CREATE Act because of the following:
Passage of CREATE Law expressly provides that only those goods and services that are directly and exclusively used in the registered project or activity of RBEs shall qualify as VAT 0% local
purchases.
The setting of parameters for the availment of VAT zero-rating on local purchases of registered export enterprises, regardless of the location under CREATE Law
Issuance of RR No. 21-2021, amending Sections 4.106-5(b) and of RR No. 16- 2005, as amended, to harmonize the VAT zero-rate provisions of the Tax Code, as amended by TRAIN and CREATE Laws, which now provide that the effectively zero-rated sales shall only apply to sales of goods and services rendered to persons or entities who have direct and indirect tax exemption granted pursuant to special laws or international agreements to which the Philippines is a signatory.
b. "Direct and exclusive use" in the registered project or activity pertains to raw materials, supplies, equipment, goods, packaging material, services, including the provision of basic infrastructure, utilities, and maintenance, repair and overhaul of equipment, and other expenditures directly attributable to the registered project or activity without which the registered project or activity cannot be carried out. Thus, costs incurred for administrative purposes will be excluded. For purchases that cannot be clearly identified, the registered export enterprise concerned should adopt a method to best allocate between the cost of sales and administrative expenses. Otherwise, it will be subject to 12% VAT.
c. Presentation of BIR Certificate of Registration (BIR Form 2303), Certificate of Registration and VAT Certification issued by the concerned IPA, and a Sworn Declaration that the goods and/or services being purchased will be used directly and exclusively in the registered project shall be presented by RBEs to the supplier. Then, the supplier should seek prior approval from the BIR before applying the VAT zero-rating. The absence of these requisites may result in the disallowance of the VAT zero-rated sale of the supplier.
d. Work-around procedures and options for the sale of goods and services where the VAT has already been billed and/or collected during the effectivity of RR No. 9-2021 from July 1, 2021, to July 27, 2021.
e. The sale of VAT-registered suppliers to registered export enterprises enjoying fiscal incentives under the CREATE Act shall be treated as VAT zero-rated. However, it shall only apply to goods and/or services directly and exclusively used in the registered project or activity of said registered export enterprise, for a maximum period of 17 years from the date of registration, unless otherwise extended under the Strategic Investment Priority Plan (SIPP). Enjoyment of VAT and duty incentives is reckoned from the registered export enterprise's date of registration and throughout the period as indicated in its Certificate of Registration.
f. RBEs, categorized as Domestic Market Enterprises (DMEs), are not entitled to VAT zero-rating on local purchases. The sale of goods or services to a registered DME shall be subject to VAT at 12%.
g. DME, under the 5% Gross Income Tax (GIT) or Special Corporate Income Tax (SCIT) regime, registered as a VAT exempt entity, shall treat its revenues as VAT exempt. The VAT passed on to it by its VAT-registered local suppliers shall form part of its cost or expenses.
h. The proper treatment for those who qualified for zero-rating or VAT-exempt rules, on sale made by registered export enterprise/DME to another registered export enterprise.
i. Incentives of non-RBE exporters shall be limited only to VAT at zero rates on the direct export sale of goods or services pursuant to Sections 106(A)(2)(a)(1) and 108(B)(2) of the Tax Code, as amended.
j. VAT treatments on the sale, transfer, or disposition of the imported capital equipment, raw materials, spare parts, or accessories.
k. Sales to enterprises covered by special laws, such as renewable energy developers under RA No. 9513 (Renewable Energy Act of 2008, International Rice Research Institute (IRRI), Asian Development Bank (ADB), etc., are still subject to VAT at zero percent rate (0%).
l. Sales to existing registered export enterprises located inside Ecozones or Freeport zones shall also be qualified for VAT zero-rating until the expiration of the transitory period, or the remaining period of their incentives, as specified in Rule 18 of the CREATE IRR. However, it shall only apply to goods and/or services directly and exclusively used in the registered project or activity of a registered export enterprise.
m. Sale of goods or services to existing registered non-export enterprises located inside the Ecozones or Freeport Zones shall be subject to VAT at 12%.
n. Sales by VAT-registered sellers to export enterprises registered with the Board of Investments (BOI) and IPAs other than the Philippine Economic Zone Authority (PEZA) or Freeports are also subject to zero-rated VAT but shall only apply to goods and/or services directly and exclusively used in the registered project or activity of the registered export enterprise until the expiration of the transitory period or the remaining period of their incentives as specified in Rule 18 of the CREATE IRR.
o. REE with multiple incentives regime shall remain VAT registered until the expiration of the ITH for all its registered activities, and all its activities are covered by the 5% GIT or SCIT regime. REE shall report the sales under the 5% GIT or SCIT regime as VAT exempt, while the sales under the ITH shall be reported in the VAT return as 0% VAT.
p. REE that has already completed its ITH and is already under the 5% GIT or SCIT regime but remained as a VAT-registered entity is required within two (2) months from the expiration of its ITH to change its registration status from a VAT-registered entity to non-VAT. REE enjoying GIT or SCIT regime but are still VAT-registered at the time the CREATE Law took effect are required within two (2) months from the effectivity of the Circular to change its registration status.
BIR CLARIFIES THE SUSPENSION OF INCOME TAX INCENTIVES GRANTED TO ALL IT-BPM RBEs FOR VIOLATION OF WFH THRESHOLD AS PRESCRIBED BY FIRB
MARCH 9, 2022
Revenue Memorandum Circular (RMC) No. 23-2022 suspends the Income Tax incentives granted to all Registered Business Enterprises (RBEs) of the Information Technology-Business Process Management (IT-BPM) sector that violated the work-from-home (WFH) threshold as prescribed by the Fiscal Incentives Review Board (FIRB).
It may be recalled that the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law has introduced temporary measures to cushion the impact of Covid-19. One of the measures as implemented by FIRB is the issuance of FIRB Resolution Nos. 19-2021 and 23-2021, allowing RBEs in the IT-BPM sector to continue with the WFH arrangement until March 31, 2022, subject to the conditions provided in the said resolutions.
Highlights include:
a. Non-compliance with all the conditions prescribed under FIRB Resolution Nos. 19-21 and 23-21 shall be met with the suspension of the Income Tax incentive on the revenue corresponding to the months of non-compliance. Consequently, RBE shall pay the Income Tax using the regular rate of 25% or 20% based on the taxable net income corresponding to the months the RBE has violated.
b. For RBEs with no existing transactions subject to the regular Income Tax rate, BIR Form 1702-MX shall be used for the voluntary payment of the Income Tax due on the months with the reported violation. Otherwise, BIR Form 0605 shall be used if they have existing transactions subject to the regular income tax rates.
c. In the absence or insufficiency of voluntary payment, RBE shall be subjected to an audit pursuant to a Letter of Authority (LOA) and based on the Investment Promotion Agencies monthly report as submitted to the FIRB and endorsed to the BIR.
d. "Total Workforce" shall refer to the total employees that are directly or indirectly engaged in the registered project or activity of the RBE, but excludes third-party contractors, if any, such as service contractors rendering janitorial or security services and other similar services.
BIR CLARIFIES TAX COMPLIANCE OBLIGATIONS IN LINE WITH THE UPCOMING NATIONAL AND LOCAL ELECTIONS
FEBRUARY 21, 2022
Revenue Memorandum Circular (RMC) No. 22-2022 reminds everyone, particularly those who are running as candidates or participating in any other manner in the May 9, 2022 National and Local Elections, of their obligations.
Highlights:
1. All candidates, political parties (PPs)/party-list groups (PLGs), and campaign contributors are required to register with the BIR, issue official receipts and withhold taxes.
2. It shall be the duty of every candidate and PPs/PLGs upon the filing of the certificate of candidacy to update their registration with the BIR.
3. The registration shall be made with the Revenue District Office (RDO) having jurisdiction over the political subdivision where the candidate is seeking election, or at the RDO having jurisdiction over their principal residence or registered head/principal office address.
4. Individual candidates shall be registered as “Professional – In General” and tagged as “Politician” under the special code in the BIR registration system.
5. PPs/PLGs shall be tagged as “Political Party” under the special code in the BIR registration system.
6. Individual campaign contributors shall be registered under Executive Order No. 98 as taxpayer type with the RDO having jurisdiction over his place of residence. Non-individual campaign contributors shall be registered with the RDO having jurisdiction over its principal place of business/head office.
7. All candidates and PPs/PLGs shall pay Php 500 Annual Registration Fee and be issued a Certificate of Registration (COR). COR is no longer required to be issued for individual candidates who are not engaged in business.
8. All candidates and PPs/PLGs shall keep books and other accounting records and shall also register Non-VAT Official Receipts to be issued for every contribution received.
9. Individual candidates may opt to use a simplified set of bookkeeping records.
10. To be considered exempt from the income tax, campaign contributions must have been utilized to cover candidate’s expenditures for his/her campaign during the campaign period.
11. Unutilized funds, as well as donations utilized before the campaign period, shall be considered subject to income tax.
12. Contributions to any candidates, PPs/PLGs, duly reported to Commission on Elections (COMELEC), are exempt from Donor’s tax.
13. Donations made by corporations in violation of the Revised Corporation Code are subject to donor’s tax and may not be deducted as political contributions.
14. Income payments made by political candidates and PPs/PLGs on their purchases of goods and services as campaign expenditures, and income payments made by individuals or juridical persons for their purchases of goods and services intended to be given as campaign contribution to political parties and candidates shall be subject to 5% creditable withholding tax (CWT).
15. Expenses that were not subjected to the 5% CWT are not considered utilized campaign funds.
16. Accounting records and all pertinent documents shall be preserved.
17. Every candidate and Treasurer of the PPs/PLGs shall submit Statement of Contributions and expenditures to COMELEC and RDO where they are registered within 30 days after the election.
18. Failure to register and comply with the requirements of the BR will be subject to penalties.
BIR CLARIFIES THE CLAIM OF INPUT VAT ON PURCHASES OR IMPORTATION OF CAPITAL GOODS UNDER TRAIN LAW
FEBRUARY 21, 2022
Revenue Memorandum Circular (RMC) No. 21-2022 prescribes new workaround procedures and guidelines in relation to the claiming of input VAT on purchases or importations of capital goods provided in Section 110 of the 1997 Tax Code, as amended by Republic Act No. 10963 (“Tax Reform for Acceleration and Inclusion” or the “TRAIN Law”).
Highlights include the following:
1. Effective January 1, 2022, all input tax on purchases of capital goods shall already be allowed upon purchase/payment, and shall no longer be deferred;
2. Taxpayers with unutilized input VAT on capital goods purchased or imported prior said date shall be allowed to amortize such until fully utilized;
3. If depreciable capital good is sold/transferred prior to the exhaustion of the amortizable input tax, the entire unamortized portion can be claimed as input tax credit during the month/quarter when the sale or transfer was made;
4. In relation to No. 1, in filling up BIR Form 2550M/Q, Schedule 3(A), instead of the actual useful life in terms of months, place number “1” under columns “E” and “F” and encode the input tax claimed from purchase/s of capital goods exceeding Php 1M in Column “G”.
BIR FURTHER CLARIFIES THE GUIDELINES ON THE FILING OF REQUESTS FOR CONFIRMATION & TAX TREATY APPLICATIONS
FEBRUARY 17, 2022
Revenue Memorandum Circular (RMC) No. 20-2022 prescribes guidance on the filing of Requests for Confirmation (RFCs), Tax Treaty Relief Applications (TTRAs), and Tax Sparing Applications.
Highlights include:
1. Taxpayers who were already issued with Certificate of Entitlement (COE) shall no longer file an RFC or TTRA every time an income of similar nature is paid to the same nonresident.
2. In applying the confirmed treaty benefit to future income payments, the income payor or withholding agent shall always be guided by the requisites mentioned in the COE.
3. The same shall also apply to the COE to the Reduced Dividend Rate issued by the BIR for tax sparing applications.
4. A new RFC, TTRA, or Tax Sparing Application shall only be filed if any of the requisites mentioned in the certificate is absent.
5. During a tax audit, the income payor shall submit or present a copy of the duly issued COE and proof of satisfaction of the requisites cited therein. On the other hand, the BIR examiner shall ensure the authenticity of the submitted documents.
6. For business profits, income from services (dependent or independent), capital gains, income derived by teachers, and such other income from non-recurring transactions, the RFCs or TTRAs shall still be filed following the procedures and requirements prescribed in Revenue Memorandum Order No. 14-2021, as amended by RMC No. 77- 2021.
7. As regards the annual updating that is required for a long-term contract of services, the taxpayer shall only submit certain documents in relation to the update.
BIR CLARIFIES SECTION 40(C)(2) OF THE TAX CODE, AS AMENDED BY CREATE, ON TAX-FREE EXCHANGES
FEBRUARY 4, 2022
Revenue Memorandum Circular (RMC) No. 19-2022 provides clarification and guidance on tax-free exchange of properties under Section 40(C)(2) of the Tax Code of 1997, as amended by Republic Act No. 11534 (CREATE Law). Specifically, the Bureau clarifies the mandate to issue a Certificate Authorizing Registration (CAR) without prior BIR confirmation or tax ruling on the tax-free exchanges of properties, as well as the proper valuation of the subsequently transferred properties and shares of stocks to facilitate the imposition of proper taxes on such transfer. Likewise, it is now optional on the part of the taxpayer to request a ruling to clarify legal issues that may affect the transactions.
It may be recalled that Under Section 40(C)(2) of the 1997 Tax Code, as amended by CREATE, reorganization and transfer of property to a controlled corporation are tax-free exchanges of properties. Reorganizations include mergers or consolidations, acquisition of controlled corporation, acquisition of all or substantially all of properties of another corporation, recapitalization, and re-incorporation.
Highlights include:
1. The pro-forma entries for the exchanges and the valuation of the following: (1) substituted basis of the stock or securities received by the transferor in exchange for shares, (2) substituted basis of the property in the hands of the transferee exchanged for shares, and the (3) original basis of the property to be transferred;
2. The basis for determining gain or loss on the subsequent sale or disposition of properties;
3. The requirements set forth for proper monitoring of the substituted basis of properties;
4. Exemption from Capital Gains Tax, Creditable Withholding Tax, Income Tax, Donor’s Tax, Value Added Tax, and Documentary Stamp Tax on conveyances of real properties and subsequent transfers of shares of stocks; and
5. The venue for the issuance of CAR, and the conduct of a post-audit of said transactions to determine the taxability thereof.
BIR CLARIFIES THE SCOPE & COVERAGE OF THE EXTENSION OF DEADLINES UNDER RR NO. 1-2022
JANUARY 31, 2022
Revenue Memorandum Circular (RMC) No. 16-2022 clarifies the scope and coverage of the extension of deadlines granted under Revenue Regulations (RR) No. 1-2022, particularly Section 2, items (1) and (3) thereof, to wit:
1. The extension of submission of all required documents shall pertain to the submission of, but not limited to, inventory lists, Alphalists, and tax and information returns, among others. Item 1 also includes registration of books of accounts.
2. The extension of 30 days for the filing of VAT refund claims also applies in case of claims wherein the applicant is a registered taxpayer in the area declared as Alert Level 1 or 2 provided that the venue of filing is under Alert Level 3 or higher. Particularly, this is applicable to claims filed in the VAT Credit Audit Division (VCAD) at the National Office for direct exporters who are registered in various RDO jurisdictions.
Said extension shall begin to run after the lapse of the prescribed period for VAT refund processing. However, in view of the declaration of Alert Level 3 in NCR, the processing of VAT claims shall be extended until April 13, 2022.
3. The extension of deadlines also applies to Large Taxpayer Offices of the BIR classified under Alert Level 3 or higher for the month of January 2022.
BIR EXTENDS THE DEADLINE OF FILING FOR TAXPAYERS UNDER COVID ALERT LEVEL 3 OR HIGHER
JANUARY 27, 2022
Revenue Regulations (RR) No. 1-2022 extends the deadline of the following activities falling due during the month of January 2022, for thirty (30) calendar days from due date covering all taxpayers within the jurisdiction of Revenue Regions, and Revenue District Offices (RDOs) under Alert Level 3 or higher:
1. Filing of tax returns and/or payment of taxes due thereon;
2. Filing of replies, documents, and the like in relation to an on-going BIR audit;
3. Filing of application for tax refund, and processing of such;
4. Issuance of assessments and warrants to enforce collection of deficiency taxes.
The RR shall take effect immediately.
BIR CIRCULARIZES R.A. 11635 ON TAXABILITY OF PROPRIETARY EDUCATIONAL INSTITUTION & HOSPITAL
JANUARY 24, 2022
Revenue Memorandum Circular No. 13-2022 circularizes Republic Act (R.A.) No. 11635, titled “An Act Amending Section 27(B) of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes” providing clarity on the wording in the Tax Code itself. Prior to the amendment, the 1997 Tax Code provides that “Proprietary educational institutions and hospitals which are nonprofit shall pay a tax of ten percent (10%) on their taxable income…”
As amended by RA No. 11635, Section 27(B) of the Tax Code now reads as follows:
“Hospitals which are nonprofit and proprietary educational institutions shall pay a tax of ten percent (10%) on their taxable income . . .” Thus, the nonprofit qualification only applies to hospitals and not to proprietary educational institutions.
BIR CIRCULARIZES R.A. 11595 OTHERWISE KNOWN AS RETAIL TRADE LIBERALIZATION ACT OF 2000, AS AMENDED
JANUARY 24, 2022
Revenue Memorandum Circular No. 11-2022 circularizes Republic Act No. 11595, titled “An Act Amending Republic Act No. 8762, Otherwise Known as the ‘Retail Trade Liberalization Act of 2000’, by Lowering the Required Paid-Up Capital for Foreign Retail Enterprises, and for Other Purposes”.
Highlights include:
1. Reduction in the minimum paid-up capital requirements. All foreign-owned retail enterprises must now only have a minimum paid-up capital of at least Php 25 million (USD 500,000).
2. Certification of pre-qualification is no longer required.
3. Reduction in minimum investment required for each store for foreign-owned retail trade enterprises from USD 830,000 per store to Php 10 million (USD 200,000).
4. Retail enterprises with foreign ownership of more than eighty percent (80%) are no longer required to offer a minimum of thirty percent (30%) of their equity to the public through any stock exchange in the Philippines within eight (8) years from start of operations.
5. Preferential use of Filipino labor.
6. Promotion of locally manufactured products.
BIR ISSUES TAX ADVISORY ON FILING OF 2021 ANNUAL INFORMATION RETURNS
JANUARY 19, 2022
The BIR has issued a Tax Advisory that users who are mandated to file through the Electronic Filing and Payment System (eFPS) shall still use the old forms available in filing the 2021 Annual Information Return of Income Taxes Withheld on Compensation (BIR Form No. 1604-C); Annual Information Return of Income Payments Subjected to Final Withholding Taxes (BIR Form No. 1604-F); and Annual Information Return of Creditable Income Taxes Withheld (Expanded)/Income Payments Exempt from Withholding Tax (BIR Form No. 1604-E). In case of unavailability of the system, eFPS filers shall use the new forms in the Offline eBIRForms Package.
The RR shall take effect immediately.
BIR CLARIFIES THE IMPOSITION OF DST ON TRANSFER OF SHARES OF STOCKS PURSUANT TO DONATION & SETTLEMENT OF ESTATE
JANUARY 18, 2022
Revenue Memorandum Circular (RMC) No. 6-2022 clarifies the imposition of Documentary Stamp Tax (DST) on sales, agreements to sell, memoranda of sales, deliveries, or transfer of shares of stocks. DST, as an excise tax, is levied on the following transfers of shares of stock pursuant to Section 75 of the 1997 Tax Code, as amended:
1. Transfer pursuant to a deed of donation;
2. Transfer pursuant to a will in a judicial settlement of estate; and
3. Transfer in case of a judicial settlement and extrajudicial settlement of estate (both without a will), wherein the heir/s specifically waive/s his or his share over the inheritance-the waived or renounced shares of stock to be transferred to another heir/s shall be subject to DST.
BIR ISSUES TAX ADVISORY THAT BIR FORM 2316 OF EMPLOYEES QUALIFIED FOR SUBSTITUTED FILING SHALL STILL BE ACCEPTED BY THE BIR EVEN WITHOUT EMPLOYEE SIGNATURE
JANUARY 17, 2022
The BIR has issued a Tax Advisory that submitted copies of the Certificate of Compensation Payment/Tax Withheld for Compensation Payment With or Without Tax Withheld (BIR Form 2316) bearing no signature of the employee are still acceptable, provided that such are duly signed by the authorized representative of the taxpayer-employer pursuant to Revenue Memorandum Circular (RMC) No. 18-2021.
BIR CLARIFIES THE SEPARATE PRESENTATION OF COMPROMISE PENALTY IN ASSESSMENT NOTICES
JANUARY 14, 2022
Revenue Memorandum Circular (RMC) No. 3-2022 clarifies the preparation of assessment notices for compromise penalty in the issuance of tax assessment. For uniformity, the preparation of assessment notices such as Preliminary Assessment Notice and Formal Letter of Demand shall now be composed of two parts-Part I containing the deficiency basic tax and civil penalties, and Part II for the assessed compromise penalty relative to violations noted during the conduct of audit. The preparation of the Payment Form (BIR Form 0605) for each part of the assessment notices shall likewise be done separately.
BIR ISSUES BANK BULLETIN ON THE ACCEPTANCE OF RETURNS & PAYMENTS FROM TAXPAYERS UNDER ALERT LEVEL 3 & HIGHER LEVELS
JANUARY 10, 2022
Bank Bulletin No. 2022-02 directs all Authorized Agent Banks (AABs) to accept tax returns and corresponding payments due thereon from taxpayers registered under areas classified and those that are yet to be classified under Alert Level 3 and higher levels, regardless of the Revenue District Office (RDO) jurisdiction. The existing procedures on the processing of out-of-district tax returns and payment of taxes shall be followed. The directive is effective immediately until the Alert Level 3 and higher levels have been lifted and shall supersede Bank Bulletin No. 2022-01.
BANK BULLETIN ALLOWING OUT-OF-DISTRICT FILING DUE TO COVID ALERT LEVEL 3 DECLARATION
JANUARY 5, 2022
Bank Bulletin No. 2022-01 allows out-of-district filing and payment of tax returns, effective immediately until the Alert Level 3 has been lifted. The BIR has directed all Authorized Agent Banks (AABs) to:
a. Accept payments from taxpayers under RDOs in the areas placed under Alert Level 3, including out-of-district returns;
b. Accept check payments even without the name of the receiving AAB branch indicated in the check so long as all check tax payments are made payable to the BIR;
c. Accept all out-of-district returns with check payments even if said checks have different collecting AAB branch name if the payment is made through the same AAB. Taxpayers shall indicate the AAB branch that received the payment at the back of the check.
BIR TAX ADVISORY ON FILING & PAYMENT AVENUES UNDER COVID ALERT LEVEL 3 DECLARATION
JANUARY 5, 2022
The BIR has issued a Tax Advisory that taxpayers residing in areas affected by the Alert Level 3 classification may file returns and pay corresponding taxes due thereon at the nearest Authorized Agent Banks (AAB) or to the authorized Revenue Collection Officers (RCOs), regardless of Revenue District Office jurisdiction. Payment of internal revenue taxes to the RCOs can be in cash or in check regardless of the amount, so long as all checks shall be made payable to the BIR. Taxpayers may likewise file returns through the eBIR Forms System and pay taxes through the Lank Bank of the Philippines (LBP) Link.Biz Portal; Development Bank of the Philippines’ (DBP) Pay Tax Online; Union Bank of the Philippines (UBP) Online/The Portal; and through Gcash, PayMaya and MyEG. Furthermore, no penalty shall be imposed for the wrong venue filing of returns and payment of taxes.
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BIR RELAXES THE TAX DEADLINES FOR TYPHOON ODETTE-STRICKEN AREAS
DECEMBER 31, 2021
Revenue Regulations (RR) No. 22-2021 extends the deadline for the filing of tax returns as well as the payment of the corresponding taxes, including submission of certain documents; the filing of application for tax refund, including claim for VAT refund; the processing of VAT refund; and the statutory period for the issuance of Assessment Notices and Warrants of Distraint and Levy to provide ample time for taxpayers and BIR offices affected by the onslaught of typhoon Odette. If the extended due dates fall on a holiday or non-working holiday, the related submission and/or filing shall be made on the next working day. Furthermore, affected taxpayers may file returns and pay taxes due thereon at the nearest Authorized Agent Banks (AAB) or to the BIR Revenue Collection Officer (RCO), regardless of Revenue District Office jurisdiction. Likewise, those who are mandated to use the eFPS and eBIRForms are temporarily allowed to manually file their tax returns within the indicated period, and no penalty shall be imposed for wrong venue filing of returns and payment of taxes. In cases where access to internet is made available, affected taxpayers are encouraged to file and pay through online avenues as provided in the regulations.
BANK BULLETIN ALLOWING OUT-OF-DISTRICT FILING DUE TO TYPHOON ODETTE
DECEMBER 31, 2021
Bank Bulletin No. 2021-26 directs all Authorized Agent Banks (AABs) to accept all tax returns as well as payments falling due within the period from December 20 to 31, 2021. Payments shall be accepted within thirty (30) days from the due date from taxpayers residing in areas affected by typhoon Odette without corresponding penalties. All AABs are likewise advised to accept all payments from taxpayers for the stated period even if they are outside the jurisdiction of the RDO where they are registered, accept check payments from any TP even without the name of receiving AAB branch indicated in the check payable to the BIR, and accept all out-of-district returns with payments from TPs paying thru check even if said checks have different collecting AAB branch name, provided that the name of the AAB branch that actually received the payment shall be indicated at the back of the check.
BIR PROVIDES WORK-AROUND PROCEDURES FOR THE TAX FILING OF OFFSHORE GAMING TAX
DECEMBER 28, 2021
Revenue Memorandum Circular (RMC) No. 128-2021 provides the work-around procedures for the filing of returns and payment of offshore gaming tax. Specifically, the circular prescribes the form to be used, deadline to submit, and procedures to observe in the preparation, filing, and payment of tax returns.
BIR ANNOUNCES THE AVAILABILITY OF INSTAPAY VIA UPAY FACILITY OF THE UNIONBANK FOR THE PAYMENT OF REVENUE TAXES
DECEMBER 21, 2021
Revenue Memorandum Circular (RMC) No. 126-2021 circularizes the availability of InstaPay via the UPAY facility of the UnionBank of the Philippines (UBP) for the payment of internal revenue taxes.
BIR ANNOUNCES THE AVAILABILITY OF OTHER ONLINE PAYMENT FACILITIES FOR ONETT TRANSACTIONS
DECEMBER 16, 2021
Revenue Memorandum Circular (RMC) No. 125-2021 circularizes the availability of the following online payment facilities for One-Time Transactions (ONETT):
1. Land Bank of the Philippines' (LBP) Link.Biz Portal
2. Development Bank of the Philippines (DBP) pay Tax online
3. Union Bank online Web and Mobile Payment Facility
BIR CLARIFIES THE TAX TREATMENT OF INTERNATIONAL PASSENGER SERVICE CHARGES TO TICKET
DECEMBER 14, 2021
Revenue Memorandum Circular (RMC) No. 122-2021 standardizes the tax treatment of integrating the Domestic Passenger Service Charge (DSPC) and International Passenger Service Charge (ISPC), commonly referred to as terminal fees, into airline tickets at the point of sale.
The provisions of RMC No. 34-2012 shall also govern the invoicing and recording of integrated IPSC in the books of airline companies and airport authorities. Applying the guidelines laid down in the said RMC, the following are the rules for IPSC collected by Airline Company for Airport Authority:
a. Collection of IPSC from passengers
The Domestic Airline Companies shall collect the IPSC from passengers and shall include the IPSC in the Official Receipt (OR) to be issued by the Airline Company to the passenger. The VATable and VAT-exempt components of IPSC shall be separately reflected in the OR. The share of the Airport Authority in the IPSC should be shown in the Airline Company's OR as part of receipts subject to VAT, while the Aviation Security Fee and other fees (P.D. 1957) should be reflected as VAT-exempt. Lastly, the VAT component of the IPSC should be included in the total VAT.
However, for International Airline Companies, the collected IPSC from the passengers shall likewise be reflected in its OR. The share of the Airport Authority, Aviation Fee, and other fees (P.D. 1957) should be reflected as VAT-exempt.
b. Remittance of IPSC by Airline Company to Airport Authority
The IPSC collected by the Airline Company shall be paid to the Airport Authority, which in turn, shall issue an OR to the Airline Company. The OR shall indicate the full amount of the IPSC.
c. Payment of Service Fees by Airport Authority to Airline Company
Payment of service fees by Airport Authority to Airline Company shall be governed by the rules on government money payments and be subject to Creditable Withholding VAT (CVAT) at the rate of 5% and Creditable Withholding Tax (CWT) of 2% of gross payments. The Airline Company shall issue a VAT OR to acknowledge receipt of the service fees from the Airport Authority.
However, payment of service fees by Airport Authority to international Airline Company shall be treated as other income subject to Corporate Income Tax.
Section 6 of Revenue Regulations (RR) No. 15-2013 to the contrary notwithstanding, International Carriers exempt under Section 109 of the Tax Code shall be allowed to register for VAT purposes in relation to IPSC, being unrelated to the transport of passengers and cargo.
Moreover, the collection of taxes on IPSC specified under the RMC should be treated independently from the Gross Philippines Billings (GPB) Tax and the 3% Common Carrier's Tax, as the GPB refers to the amount of gross revenue derived from the carriage of persons, excess baggage, cargo, and mail originating from the Philippines in a continuous and uninterrupted flight, while the Percentage Tax on International Carriers in Section 118 pertains to gross receipts derived from the transport of cargo from the Philippines to another.
Considering that the IPSC is a service charge for services performed within the Philippines, then justifiably, it should be treated independently from the taxes imposed on the mentioned revenue from the carriage of persons, excess baggage, cargo, and mail originating from the Philippines. Should the airline company opt to remit the IPSC to the Airport Authority net of the Service Fees charged, the same rules as above shall apply. However, to comply with the withholding requirements, the tax to be withheld on the service fees, whether CVAT, CWT, or Final Withholding Tax, shall be paid back to the Airport Authority for remittance to the BIR.
BIR CLARIFIES THE TAXABILITY OF INTEREST PAID BY COOPERATIVES TO MEMBER'S DEPOSIT OR FIXED DEPOSITS OR SHARE CAPITAL
DECEMBER 14, 2021
Revenue Memorandum Circular (RMC) No. 121-2021 clarifies the taxability of interest paid by cooperatives to its member's deposit or fixed deposits (otherwise known as share capital). Member's deposit refers to savings and time deposits of both regular and associate members while share capital refers to members’ paid-up capital. Based on Section 11 of RMC No. 12-2010, members of the cooperative are not liable to pay any tax and fee on the interest earned on member's deposits and fixed deposits. Hence, cooperatives are also not liable to withhold tax on the aforesaid interest payments to members.
BIR AMENDS THE VAT ZERO-RATING PRIVILEGES FOR REGISTERED BUSINESS ENTERPRISES
DECEMBER 7, 2021
Revenue Regulations (RR) No. 21-2021 amends certain provisions of RR 16-2005, as amended by RR No.’s 4-2007, 13-2018, 26-2018, and 9-2021 to implement the provisions of CREATE Law on VAT zero-rating for Registered Business Enterprises (RBEs). Specifically, the regulations provide the following highlights and additional guidance on the VAT zero-rating of local purchases of goods and services by RBEs enjoying incentives.
a. Enjoyment on VAT zero-rating on local purchases shall be coterminous with the income tax incentives of RBEs.
b. Zero-rating for existing registered ecozone export and freeport zones enterprises are qualified for VAT zero-rating until the expiration of the transitory period.
c. VAT zero-rating on local purchases of goods and services by RBEs applies only to goods and services that are “directly and exclusively used for the registered project or activity” and without which the registered project or activity cannot be carried out.
d. Expanded coverage of goods and services that qualify under the phrase “directly and exclusively used.” For goods, it refers to the sale of raw materials, inventories, supplies, equipment, packaging materials, and goods to a registered export enterprise. For services, it refers to the sale of services, including the provision of basic infrastructure, utilities, and maintenance, repair, and overhaul of equipment.
e. VAT zero-rating on local purchases shall be subject to the endorsement of the concerned Investment Promotions Agency (IPA), in addition to the documentary requirements of the BIR.
f. The regulations cover transactions entered during the third quarter of taxable year 2021 and onwards.
BIR ISSUES THE IRR ON POGO TAX
DECEMBER 1, 2021
Revenue Regulations (RR) No. 20-2021 implements the Republic Act (R.A.) No. 11590 or the Act Taxing Philippine Offshore Gaming Operations (POGOs).
Highlights:
1. In lieu of all other internal revenue taxes and local taxes, Offshore Gaming Licensees (OGLs), whether Philippine-based or Foreign-based, shall be subject to a gaming tax equivalent to five percent (5%) of the Gross Gaming Revenue/Receipts (GGR) or 5% of the agreed predetermined minimum monthly revenue from gaming operations, whichever is higher.
2. The gaming tax shall be directly remitted to the BIR not later than the 20th day following the end of each month.
3. The income from non-gaming operations shall be subject to regular income tax of 25% of the taxable income.
a. Philippine-based – sources within and outside the Philippines
b. Foreign-based – within the Philippines
4. The non-gaming revenues of all OGLs shall be subject to VAT or Percentage tax, whichever is applicable.
5. Accredited Service Providers (ASPs) shall pay an income tax rate of 25% imposed upon the taxable income.
a. Organized within the Philippines – sources within and outside the Philippines
b. Organized outside the Philippines – sources within the Philippines
6. Sale of goods and/or services by VAT-registered persons or service providers to OGLs subject to gaming tax shall be subject to zero percent (0%) VAT rate if used in gaming operations.
7. ASPs shall withhold and remit the applicable withholding tax for their purchases of goods and services.
8. Foreign nationals who are employed and assigned in the Philippines by an OGL or its ASP shall have a Tax Identification Number (TIN) and pay a final withholding tax (FWT) of 25% on their gross income.
9. Minimum FWT due for any taxable month from said persons shall not be lower than Php 12,000.
10. Any income earned from all other sources within the Philippines by a foreign employee shall be subject to the income tax.
11. Newly established POGO entities shall submit to the BIR a Summary List of Status Update on Foreign Nationals Employed Form (Annex A) and its attachments not later than the 20th day of the succeeding month.
12. POGO entities shall regularly update the list of their foreign employees not later than the 20th day after the close of each month.
13. Each POGO Licensing Authority shall furnish the BIR not later than the 20th day after the close of each month the following:
a. Status Report on OGLs Form (Annex B)
b. List of Foreign Nationals with Issued Gaming Employment License Forms (Annex C).
14. The BIR shall secure the list of foreign nationals employed by POGO entities from:
a. Department of Labor and Employment – who secured Alien Employment Permits
b. Bureau of Immigration – who secured Provisional Working Permits and/or 9(g) visas.
15. Penalties imposed:
a. Fraudulent acts
• Incremental penalties
b. Erring entities
• Closure orders
c. Failure to withhold and remit FWT
• Governed by the Tax Code
• Deportation, be barred from re-entering the Philippines
d. Employment of an alien without a TIN
• Php 20,000 for every alien without such TIN
• Revocation of licenses obtained by POGO entities
e. Failure to Submit Annex A
• Penalties under the Tax Code
f. Failure to provide true and correct address
• Considered as having failed to register with the BIR
g. Other penalties
16. Disposition of revenues from gaming tax on OGLs:
a. 60% - implementation of Universal Health Care Act
b. 20% - Health Facilities Enhancement Program
c. 20% - attainment of the Sustainable Development Goals
17. All existing POGO entities shall submit to the BIR, on or before December 20, 2021, the Annex A and its attachments covering their foreign employees from January 1, 2021 to November 30, 2021.
18. All POGO entities shall use the appropriate Alphanumeric Tax Code for the remittance of their gaming tax and/or FWT, whichever is applicable.
19. A separate revenue issuance for the guidelines and procedures for tax filing and remittances shall be issued pending the availability of the eFPS to POGO entities.
20. A POGO entity enjoying incentives prior to the effectivity of R.A. No. 11534 shall continue to enjoy said incentives until the expiration of the transitory period or the expiration of the license, whichever comes earlier.
BIR CLARIFIES THE MANNER OF SUBMISSION OF BIR FORMS 2307 & 2316
NOVEMBER 24, 2021
Revenue Memorandum Circular (RMC) No. 117-2021 clarifies the manner of submission of BIR Form No’s. 2307 and 2316. The Circular clarifies that submission of the Certificates in DVD-R is not discontinued, but instead offers other modes or submission facilities, such as the electronic Audited Financial Statement (eAFS) System. Moreover, for the added convenience of the taxpaying public, the USB memory stick or other similar storage devices may be used for the submission of BIR Form No. 2307. Likewise, these devices, modes, and facilities may be availed for the submission of BIR Form Nos. 2304 and 2306.
BIR UPDATES THE LIST OF VAT-EXEMPT COVID-19 PRODUCTS
NOVEMBER 19, 2021
Revenue Memorandum Circular (RMC) No. 115-2021 publishes additions to the list of VAT-exempt drugs, vaccines and medical devices that are prescribed and directly used for COVID-19 treatment as endorsed by DOH. It supplements RMC No. 81-2021, which has become the controlling list of VAT-exempt COVID-19 products under Section 109 of the Tax Code.
BIR ON MONITORING & VERIFICATION OF THE TAX COMPLIANCE OF ONLINE SELLERS & SOCIAL MEDIA INFLUENCERS
OCTOBER 29, 2021
Revenue Memorandum Order (RMO) No. 29-2021, issued on October 29, 2021, directs BIR offices to monitor and verify the tax compliance of online merchants, social media influencers, and other businesses operating in digital platforms. Highlights include the creation of special tax force, verification of voluntary declarations by taxpayers through an exchange of information mechanism, issuance of Letter of Authority, and reporting requirements.
BIR ISSUES NEW VERSION OF e-BIR FORMS
OCTOBER 21, 2021
Revenue Memorandum Circular (RMC) No. 111-2021 circularizes the availability of Offline Electronic Bureau of Internal Revenue Forms (eBIRForms) Package Version 7.9.2. The updated package now includes the following January 2018 version:
● BIR Form No. 2552
● BIR Form No. 1600-VT
● BIR Form No. 1600-PT
● BIR Form No. 1707
● BIR Form No. 2200-C
BIR TAX ADVISORY ON EXTENDED TAX FILING
SEPTEMBER 9, 2021
Consistent with Revenue Memorandum Circular No. 91-2021, the BIR has advised that the filing of tax returns, and payment of taxes as well as submission of reports/attachments falling within the Enhanced Community Quarantine (ECQ) and/or Modified Enhanced Community Quarantine (MECQ) shall be extended by fifteen (15) calendar days from the lifting of ECQ and/or MECQ.
BIR CLARIFIES ISSUES RELATIVE TO THE VAT EXEMPTION OF CERTAIN MEDICINES & OTHER MEDICAL DEVICES FOR COVID-19
SEPTEMBER 1, 2021
Revenue Memorandum Circular (RMC) No. 99-2021, issued on September 1, 2021, clarifies issues relative to the VAT exemption of certain medicines and other medical devices for Covid-19 under Sections 109(1)(AA) and 109(1)(BB)(ii) of the 1997 Tax Code, as amended by Republic Act (R.A.) Nos. 10963 (TRAIN Law), 11467, and 11534 (CREATE Law).
Highlights include:
1. VAT exemption of medicines for diabetes, high cholesterol, hypertension, cancer, mental illness, tuberculosis, kidney diseases, drugs, and vaccines prescribed and directly used for COVID-19 treatment, and medical devices directly used for COVID-19 treatment shall take effect on the date of publication by the Food and Drug Administration of the consolidated list of VAT-exempt products, which was on June 17, 2021.
2. VAT exemption is exclusive only to the medicines and medical devices for COVID-19 with the corresponding dosage strength, dosage form, and route of administration in the consolidated list of VAT-Exempt Products.
3. Consolidated list of VAT-Exempt Products circularized through RMC No. 81-2021 should be the reference in determining whether a certain medicine or medical device is VAT-exempt or not.
4. Input VAT directly attributable to goods now classified as VAT-exempt may be allowed as part of cost. Likewise, for input VAT not attributed to VAT-exempt goods, only a ratable portion thereof shall be charged to cost.
5. Revenue Regulations (RR) No. 4-2021 is not to be confused with RR No. 18-2020 as the latter was anchored under R.A. Nos. 10963 and 11467, while the former was issued to implement the provisions of R.A. No. 11534.
6. When the VAT on the imported drugs or medicines has been claimed as an input tax credit in the monthly and quarterly VAT returns, a refund cannot be allowed.
BIR CLARIFIES THE IMPOSITION OF PENALTY ON FAILURE TO TRANSMIT SALES DATA
AUGUST 31, 2021
Operations Memorandum No. 50-2021 clarifies the proper penalty to be imposed for failure to transmit sales reports and other information generated by Cash Register Machines (CRMs) and Point-of-Sales (POS) Machines and/or any machine sales-generating receipt/invoice registered with the BIR.
Highlights include:
1. The penalty under Revenue Regulations (RR) No. 5-2005 shall be imposed for failure to transmit sales report and other information generated by CRMs and POS machines and/or any machine sales-generating receipt/invoice registered with the BIR, and not under Section 264-A of the 1997 Tax Code, as amended, as provided under Revenue Memorandum Circular (RMC) No. 72-2018. The penalty under Section 264-A of the same Code shall not be imposed until the BIR has established the “Bureau’s electronic sales reporting system” as provided under Section 237-A of the same Code.
2. Under RR No. 5-2005, any violation shall be considered as sufficient grounds for revocation of the taxpayer’s Permit to Use (PTU) CRM/POS machine and shall subject the concerned taxpayer to the penalty provided under Section 250 of the 1997 Tax Code, as amended. For this purpose, failure to submit a sales report per machine shall constitute one failure.
3. Additional penalty is imposed under Revenue Memorandum Order (RMO) No. 12-2012. Taxpayers who will be found not submitting the required monthly sales report for three (3) consecutive months per machine shall be subjected to the following sanctions in addition to the penalty imposed under RR No. 05-2005:
Offense Consequence
1st Reminder Letter
2nd Machine Inspection/Post Evaluation
3rd Revocation of PTU
4. Violations of Section 250 of the 1997 Tax Code, as amended, may be subject to compromise penalty under Annex “A” of RMO No. 7-2015.
BIR CLARIFIES THE TAXATION OF SOCIAL MEDIA INFLUENCERS
AUGUST 16, 2021
Revenue Memorandum Circular (RMC) No. 97-2021 clarifies the tax obligations of social media influencers, individuals, or corporations, in relation to any income received by them.
Highlights include the following:
1. The term social media influencers include all taxpayers, individuals, or corporations, receiving income, in cash or in kind, from any social media sites and platforms in exchange for services performed.
2. Unless exempted pursuant to the provisions of the 1997 Tax Code, as amended, social media influencers shall be liable to Income Tax and Percentage or Value-Added Tax.
3. Social media influencers other than corporations and partnerships are classified for tax purposes as self-employed individuals or persons engaged in trade or business as sole proprietors, and therefore, their income is generally considered business income.
4. Social media influencers whose gross sales or gross receipts and other non-operating income do not exceed the VAT threshold of Php 3,000,000 shall have the option to avail of the 8%.
5. Social media influencers shall withhold required creditable/expanded withholding tax, final tax on compensation of employees, and other withholding taxes, if applicable.
BIR CLARIFIES THAT PARTIAL RENUNCIATION OF SHARE FROM INHERITANCE IS SUBJECT TO DONOR’S TAX
AUGUST 10, 2021
Revenue Memorandum Circular (RMC) No. 94-2021 clarifies that general renunciation of an heir of his share from inheritance is not subject to tax. However, in case of partial renunciation wherein the heir who partially renounces his share will receive a share lower than the value of what should have been his rightful share, the difference between the supposed share and the share received, as a result of partial renunciation, is subject to donor’s tax.
BIR EXTENDS THE DEADLINE OF FILING OF POSITION PAPERS, PROTESTS, DOCUMENTS & OTHER SIMILAR LETTERS & CORRESPONDENCES & FILING OF THE VAT REFUND FOR TAXPAYERS COVERED BY ECQ & MECQ DECLARATION
AUGUST 9, 2021
Revenue Memorandum Circular (RMC) No. 92-2021 extends the deadline for filing of position papers, protests, and documents, in relation to the ongoing Bureau of Internal Revenue (BIR) audit and VAT refund applications falling due under the declaration of Enhanced Community Quarantine (ECQ) and Modified ECQ (MECQ) in the National Capital Region (NCR) and other areas of the country.
Face to face meetings of BIR officials and employees with taxpayers and/or their authorized representatives in the areas covered are deferred and rescheduled until the lifting of ECQ and/or MECQ.
BIR SUSPENDS THE RUNNING OF THE STATUTE OF LIMITATIONS ON ASSESSMENTS & COLLECTIONS OF TAXES IN AREAS UNDER ECQ & MECQ
AUGUST 9, 2021
Revenue Memorandum Circular (RMC) No. 93-2021 suspends the running of Statute of Limitations for assessment and collection of deficiency taxes in affected areas under ECQ and/or MECQ, and for sixty (60) days thereafter. The same will also apply in case of any future declarations of ECQ and/or MECQ by the government.
BIR ISSUES IRR ON THE EXTENDED AVAILMENT PERIOD OF ESTATE TAX AMNESTY UNTIL JUNE 14, 2023 & AMENDS THE PREVIOUS PROCESSES OF AVAILMENT
AUGUST 4, 2021
Revenue Regulations (RR) No. 17-2021 provides for the Implementing Rules and Regulations (IRR) on the extension of the availment period of Estate Tax Amnesty until June 14, 2023, pursuant to Republic Act (R.A.) No. 11569, amending R.A. 11213. Likewise, it amends certain processes of availment of estate tax amnesty pursuant to RR No. 6-2019.
Highlights of the amendment are as follows:
a. Failure to submit the Estate Tax Amnesty Return (ETAR) and Acceptance Payment Form (APF) with proof of payment, together with the complete documentary requirements, to the concerned RDO until June 14, 2023, is tantamount to non-availment of the Estate Tax Amnesty.
b. Within five (5) working days from the receipt of ETAR, APF, and other required documents, the concerned RDO shall endorse the APF for payment with the Authorized Agent Banks (AABs) or Revenue Collection Officers (RCOs). Only these duly endorsed APF shall be presented to and received by the AAB or RCO.
c. Proof of settlement of the estate, whether judicial or extra-judicial, is not required in filing of the ETAR if it is not yet available at the time of filing. No electronic Certificate Authorizing Registration (eCAR) shall be issued unless such proof is presented and submitted to the concerned RDO.
d. One eCAR shall be issued per real property until such time that the eCAR system is already capable of generating one (1) eCAR for all properties covered by a single transaction.
e. eCAR shall only be issued upon submission of the proof of estate settlement. If these documents include properties not indicated in the filed ETAR, the properties shall be excluded from the eCAR, unless additional estate tax amnesty payment shall be made within the amnesty period. Otherwise, the additional estate tax to be paid for the additional properties indicated in the Extra Judicial Settlement or Court Order shall be subject to applicable estate tax rate including interests and penalties.
BIR AMENDS THE MANNER OF SUBMISSION OF BIR FORMS 2307 & 2316
AUGUST 4, 2021
Revenue Regulations (RR) No. 16- 2021 amends the manner of submission of Certificate of Creditable Tax Withheld at Source (BIR Form 2307) and Certificate of Compensation Payment (BIR Form 2316) to the Bureau of Internal Revenue (BIR). Only scanned copies shall be accepted regardless of whether or not registered with the Large Taxpayers Services (LTS).
BIR EXTENDS THE DEADLINE OF FILING OF RETURNS FOR TAXPAYERS UNDER ECQ & MECQ
AUGUST 4, 2021
Revenue Memorandum Circular (RMC) No. 91-2021 extends the tax filing and payment deadlines falling within the Enhanced Community Quarantine (ECQ) and Modified Enhanced Community Quarantine (MECQ) period. Specifically, the tax deadlines for the period August 6, 2021 to August 20, 2021 are extended for fifteen (15) calendar days from August 20, 2021.
BIR DEFERS THE IMPLEMENTATION OF RR NO. 9-2021 WHICH IMPOSED THE 12% VAT ON TRANSACTIONS PREVIOUSLY SUBJECTED TO 0% VAT UNDER TRAIN LAW
JULY 28, 2021
Revenue Regulations (RR) No. 15-2021 defers the implementation of RR No. 9-2021 which imposed the 12% VAT on transactions previously subjected to 0% VAT such as sale of goods or properties and sale of services and use of lease of properties under Section 106 (A) (2) (a) (3), (4), and (5) and Section 108 (B) (1) and (5) of the 1997 Tax Code, as amended. The deferment is in consideration of the continuing pandemic and the impact to the export industry.
BIR SUSPENDS THE REQUIREMENT FOR PROPRIETARY EDUCATIONAL INSTITUTIONS TO BE NON-PROFIT TO BE ENTITLED TO 1% INCOME TAX UNDER CREATE LAW
JULY 28, 2021
Revenue Regulations (RR) No. 14-2021 suspends the requirement for proprietary educational institutions to be non-profit to be entitled to 1% income tax under RR No. 5-2021. It may be recalled that RR No. 5-2021, which implements the provisions of CREATE Law, provides that a proprietary educational institution must be non-profit to avail the 1% transitory income tax. The move to defer is in consideration of the thrust of the government to ease the burden of taxation of proprietary educational institutions during the pandemic.
BIR CIRCULARIZES THE NEW LIST OF TOP WITHHOLDING AGENTS & THOSE FOR DELETION FROM THE EXISTING LIST EFFECTIVE AUGUST 1, 2021
JULY 16, 2021
Revenue Memorandum Circular (RMC) No. 88-2021 circularizes the lists of withholding agents required to deduct and remit the 1% or 2% Creditable Withholding Tax (CWT) for purchase of goods and services under Revenue Regulations No. 31-2020. The obligation to deduct and remit the 1% and 2% CWT shall continue, commence, or cease, effective August 1, 2021. Any taxpayer not found in the published list of TWA is deemed excluded.
BIR CIRCULARIZES THE IRR ON INCENTIVES PROVISIONS OF CREATE LAW
JULY 12, 2021
Revenue Memorandum Circular (RMC) No. 83-2021 circularizes the Implementing Rules and Regulations (IRR) on the Tax Incentives Provisions granted under Republic Act (R.A.) No. 11534, otherwise known as the “Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.”
BIR CLARIFIES THAT SCREENSHOT IN LIEU OF ACKNOWLEDGMENT E-MAIL ON eAFS WILL SUFFICE
JULY 7, 2021
Revenue Memorandum Circular (RMC) No. 82-2021 provides that in lieu of the confirmation/acknowledgement email on scanned copies of documents uploaded to eAFS, copies of screenshots from the said system clearly showing the details contained in each screenshot, illustrated in the Circular, are now considered sufficient proof of BIR submission.
BIR DELEGATES TO LEGAL SERVICE ASSISTANT COMMISSIONER THE APPROVAL OF CERTAIN REQUESTS/MATTERS
JULY 7, 2021
Revenue Delegation Authority Order (RDAO) No. 3-2021 delegates to the Legal Service Assistant Commissioner the authority to act, approve, or sign requests or matters involving:
1. Extension of time to file estate tax returns;
2. Extension of time to pay estate tax due;
3. Extension of time to submit photocopies of the TCT/CCT/Shares of Stock that bears the annotation of substituted basis of the real properties/shares of stock transferred/received pursuant to Section 40(C)(2) of the 1997 Tax Code, as amended, as duly certified by the Registry of Deeds/Corporate Secretary;
4. Matters declared as “No-Ruling Areas”; and
5. Non-compliance with any of the requirements under Revenue Memorandum Order (RMO) No. 9-2014.
BIR RELEASES THE LIST OF VAT-EXEMPT MEDICAL PRODUCTS PURSUANT TO THE CREATE LAW
JULY 6, 2021
Revenue Memorandum Circular (RMC) No. 81-2021 circularizes the list of Value-Added Tax (VAT)-exempt medical products pursuant to Republic Act (R.A.) No. 11534, otherwise known as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.
It may be recalled that under the CREATE Law, the following sale or importation activities are exempt from VAT:
a. Beginning January 1, 2020-drugs for diabetes, high cholesterol, and hypertension
b. Beginning January 1, 2021-drugs for cancer, mental illness, tuberculosis, and kidney diseases
c. Beginning January 1, 2021, until December 31, 2023-drugs, vaccines, and medical devices used for COVID-19 treatment
BIR FURTHER SUSPENDS THE STATUTE OF LIMITATIONS DUE TO THE IMPLEMENTATION OF ECQ & MECQ ON SELECTED AREAS
JUNE 29, 2021
Revenue Memorandum Circular (RMC) 80-2021 provides further clarification on the suspension of the Statute of Limitations on assessment and collection of taxes due to the declaration of Enhanced Community Quarantine (ECQ) and Modified Enhanced Community Quarantine (MECQ) in Metro Manila, Bulacan, Cavite, Laguna, and Rizal (NCR Plus), and other applicable areas. The suspension provides the Bureau additional days, equivalent to the period under ECQ and MECQ, plus 60 days after lifting of such, to issue Assessment Notices, Warrants of Distraint and/or Levy, Warrants of Garnishment, and to enforce collection of deficiency taxes against taxpayers covered by aforementioned quarantine declaration. The computation follows after the extended due dates circularized by RMC No. 136-2020.
BIR PRESCRIBES THE TEMPLATE FOR SWORN DECLARATION TO BE EXECUTED BY REGISTERED BUSINESS ENTERPRISE
JUNE 30, 2022
Revenue Memorandum Circular (RMC) No. 84-2022 prescribes the template of Sworn Declaration to be executed by the duly Registered Business Enterprise (RBE), stating that the goods and/or services being purchased shall be used directly and exclusively in the registered project or activity. The sworn declaration shall be provided to the RBE’s supplier before the sale transaction to avail of the VAT zero-rate incentives.
BIR REMOVES THE FIVE-YEAR VALIDITY PERIOD ON RECEIPTS/INVOICES
JUNE 30, 2022
Revenue Regulations (RR) No. 6-2022 removes the five-year validity period on receipts/invoices. The removal is aligned with the Republic Act (R.A). No. 11032, otherwise known as the “Ease of Doing Business and Efficient Government Service Delivery Act of 2018.”
Highlights include the following:
1. The removal shall cover taxpayers who will apply for the following:
a. Authority to Print (ATP) Official Receipts (ORs), Sales Invoices (SIs), and Other Commercial Invoices (CIs)
b. Registration of Computerized Accounting System (CAS)/Component of CAS
c. Permit to Use (PTU) Cash Register Machines (CRMs) and Point-of-Sale (POS) machines based
2. All PTUs to be issued shall be valid unless revoked by the BIR on grounds which shall include, but are not limited to, the following:
a. Tampering of sales data/integrity of the data and/or software specification/features to alter/avoid the recording of a sale transaction;
b. Any major repair, upgrades, integration, and modification/alteration without prior notification and approval by the BIR;
c. Any violation of the policies and procedures for registration and related issuances.
3. The phrases "THIS INVOICE/RECEIPT SHALL BE VALID FOR 5 YEARS FROM THE DATE OF PERMIT TO USE/ATP" and "Valid Until", as previously required by prior regulations, shall be omitted or disregarded. Thus, the validity date on existing and unused receipts/invoices shall be disregarded, and such may still be issued until fully exhausted unless revoked by the BIR.
4. Subsequent printing of manual receipts/invoices must not reflect these phrases and shall no longer adopt the five-year validity.
BIR ISSUES IRR ON ESTATE TAX EXEMPTION OF TRANSFERS MADE BY A VETERAN IN FAVOR OF PHILIPPINE VETERANS BANK
JUNE 20, 2022
Revenue Regulations (RR) No. 5-2022 implements the Estate Tax exemption under Republic Act (RA) No. 11597, otherwise known as “Revised Charter of the Philippine Veterans Bank.” All transfers through succession or donation mortis causa, made by a veteran of his shares of stock with the Philippine Veterans Bank are exempted from Estate Tax, provided that the same was made in favor of the veteran's widow, orphan, or compulsory heir as determined by existing laws. A tax clearance must be secured with the Revenue District Office, where the estate of the decedent is registered, before any transfer of shares is registered in the books of the Philippine Veterans Bank.
BIR CLARIFIES THE TAX TREATMENTS & OBLIGATIONS OF THE DIFFERENT CLASSIFICATIONS OF EDUCATIONAL INSTITUTIONS
JUNE 9, 2022
Revenue Memorandum Circular (RMC) No. 78-2022, issued on clarifies the Income Tax treatment and tax obligations of the different classifications of educational institutions.
Highlights include:
I. Income Tax Treatment
a. Proprietary Educational Institution
• The income of a proprietary educational institution, as well as Non-Stock, Non-Profit (NSNP) educational institutions whose net income or assets accrue/inure to or benefit any member or specific person, is subject to 10% (now 1% from July 1, 2020, until June 30, 2023).
• If unrelated income exceeds 50% of the total gross income, the Regular Corporate Income Tax (RCIT) rate shall be applied to the entire income.
b. Government Educational Institution (GEI)
• If the GEI’s Charter expressly provides that it is exempt from taxes, then the GEI is exempt from applicable taxes. However, if GEI’s Charter does not explicitly provide that it is exempt from tax, then Section 30 (I) of the 1997 Tax Code, as amended, shall govern its claim of tax exemption.
c. Non-stock and Non-profit Educational Institutions (NSNP)
• All revenues and assets used directly and exclusively for educational purposes shall be exempt from taxes and duties.
II. Tax Treatment of Contributions or Gifts/Donations to Educational Institutions
a. Deduction from gross income of donor subject to the following ceiling based on the donor’s taxable income: (1) 10%-individual (2) 5%-corporation) or (3) full deductibility if the conditions under Section 34(H)(2)(c) of the 1997 Tax Code, as amended are complied.
b. Exemption from Donor’s Tax subject to the condition that the donee institution shall not use more than 30% of said gifts/donations for administration purposes.
III. Withholding Tax Obligations
a. Withhold on income payments such as compensation and purchases of goods and services
b. NSNP educational institutions shall not be subject to any Creditable or Final Withholding Tax (CWT/FWT) on their revenues and assets used actually, directly, and exclusively for educational purposes subject to the presentation of Certificate of Tax Exemption (CTE) or exemption rulings, and Securities and Exchange Commission (SEC) registration. Newly organized NSNP educational institutions must secure their CTE within three (3) months from the issuance of their Certificate of Registration with the SEC.
c. Proprietary educational institutions, including NSNP educational institutions, which are subject to preferential Income Tax of 10% (now 1% until June 30, 2023), are subject to CWT/FWT. The CWT on the income payments to these institutions should not be more than the statutory income tax rate imposed on proprietary educational institutions under Section 27(B) of the Tax Code (i.e., 1%).
IV. Compliance Requirements
a. Register with the BIR
b. Secure Authority to Print Receipts/Invoices
c. Register Books of Accounts and update registration information
d. Issue receipts/invoices
e. File tax returns
f. Secure Certificate of Income Tax Exemption
BIR DELEGATES THE SIGNING & APPROVAL OF THE CERTIFICATE OF TAX EXEMPTION ON SEPARATION PAY FOR LARGE TAXPAYERS' SERVICE
JUNE 7, 2022
Revenue Delegation Authority Order (RDAO) No. 4-2022 delegates to the Assistant Commissioner (ACIR) of the Large Taxpayers' Service (LTS) or, in his/her absence, to the concerned Head Revenue Executive Assistant (HREA), the authority to sign and approve Certificate of Tax Exemption (CTE) from Income Tax and from Withholding Tax for separation benefits received by officials and employees on account of their separation from employment due to death, sickness or other disability processed at the LTS.
BIR CIRCULARIZES THE NEW LIST OF TOP WITHHOLDING AGENTS & THOSE FOR DELETION FROM THE EXISTING LIST
JUNE 6, 2022
Revenue Memorandum Circular (RMC) No. 80-2022 circularizes the additional List of Top Withholding Agents (TWAs) required to deduct and remit either the 1% or 2% Creditable Withholding Tax (CWT) from the income payments to their suppliers of goods and services, respectively, pursuant to Revenue Regulations (RR) No. 31-2020, including the List of TWAs for deletion from the existing list. The obligation to deduct and remit to the BIR shall continue, commence, or cease, as the case may be, effective July 1, 2022. Any taxpayer not found in any of the published List of TWAs is deemed excluded and therefore, not required to deduct and remit the 1% or 2% CWT under the abovementioned RR.
BIR SUSPENDS ALL FIELD AUDITS, COVERED BY LOA/MO, EFFECTIVE MAY 30, 2022
MAY 30, 2022
Revenue Memorandum Circular (RMC) No. 77-2022, issued on May 30, 2022, suspends all field audits of the BIR covered by Letters of Authority (LOAs)/Mission Orders (MOs) relative to examinations of taxpayer's books of account and accounting records. As such, no field audits, field operations, or any forms of business visitation in the execution of LOAs/MOs should be conducted, nor any new LOAs/MOs be further issued, except in the following cases:
lnvestigation of cases prescribing on or before October 31,2022
Processing and verification of estate tax returns, donor's tax returns, capital gains tax returns, and withholding tax returns on the sale of real properties or shares of stocks together with the documentary stamp tax returns related thereto
Examination and/or verification of internal revenue tax liabilities of taxpayers retiring from business
Audit of National Government Agencies (NGAs), Local Government Units (LGUs), and Government-Owned and Controlled Corporations (GOCCs) including subsidiaries and affiliates
Other matters/concerns where deadlines have been imposed or under the orders of the Commissioner of lnternal Revenue
BIR SUSPENDS ALL FIELD AUDITS, COVERED BY SPECIAL ORDERS, OPERATIONS MEMORANDA & OTHER SIMILAR DIRECTIVES OF SPECIAL TASK FORCE, EFFECTIVE MAY 30, 2022
MAY 30, 2022
Revenue Memorandum Circular (RMC) No. 76-2022, issued on May 30, 2022, suspends all field audits covered by Revenue Special Orders (RSOs), Operation Memoranda (OM), and other similar orders or directives of Special Task Force, relative to examinations of taxpayers' books of account and accounting records effective May 30, 2022. As such, no field audits, field operations, or any forms of business visitation in the execution of Letters of Authority/Audit Notices (LOAs) or Mission Orders (MOs) should be conducted by the said Task Forces.
BIR ISSUES IRR ON TAX TREATMENT OF IMPORTATION OF PETROLEUM PRODUCTS IN FREEPORT & ECOZONE
MAY 26, 2022
Revenue Regulations (RR) No. 4-2022 implements Sections 295(F), as amended by Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE Law), on the Tax Treatment of the Importation of Petroleum and Petroleum Products into, and subsequent transfer, transport, and/or withdrawal through and from Freeport Zones and Economic Zones.
Highlights include:
a. The proper tax administration and treatment of all petroleum products entered and/or imported into Philippine Freeport Zones or Economic Zones;
b. The strict monitoring process of the movement of all petroleum and petroleum products within the aforementioned Zones and the subsequent transfer, transport and/or withdrawal of the same therefrom; and
c. The guidelines on the refund of Value-Added Tax (VAT) and Excise Taxes paid for transactions statutorily zero-rated or exempt therefrom.
BIR CIRCULARIZES THE JOINT GUIDELINES ON THE BENEFITS & PRIVILEGES OF THE SENIOR CITIZENS & PERSONS WITH DISABILITIES ON THEIR ONLINE PURCHASES & PHONE CALLS/SMS
MAY 18, 2022
Revenue Memorandum Circular No. 71-2022 circularizes the Joint Memorandum Circular No. 1-2022 entitled “Guidelines on the Provision of the Mandatory Statutory Benefits and Privileges of the Senior Citizens and Persons with Disabilities on their Purchases Through Online (E-Commerce) and Phone Call/SMS."
Highlights include:
1. A Senior Citizen (SC) or a Person with Disability (PWD) shall be entitled to the 20% discount and 12% Value-Added Tax (VAT) exemption of their purchase of goods and services; and a 5% special discount for basic necessities and prime commodities for their exclusive use and enjoyment.
2. In the purchase of goods and services which are the subject of promotional discount, the SC or the PWD can avail of the establishment’s offered discount or the 20% discount with VAT exemption or the 5% special discount, whichever is higher/more favorable and applicable.
3. In cases wherein the buyer or customer is both SC and PWD, he shall be entitled only to a single 20% discount, with VAT exemption, or 5% special discount, whichever is applicable under his valid SC ID or PWD ID.
4. Drugs identified as “essential” and “not essential” shall be considered “Basic Necessities” and “Prime Commodities”, respectively. However, for purposes of determining the rightful statutory discount, the SC or PWD shall be granted a flat discount of 20%.
5. The total amount of offline and online purchases of SCs and PWDs per calendar week shall not exceed the amount of Php 1,300 without carry-over of the unused amount, unless otherwise increased, provided that the purchase of medicine shall no longer be limited by the Php 1,300 ceiling.
6. The SC must present his SC Identification Card (ID) issued by the Office of the Senior Citizens Affairs (OSCA) in the city or municipality where the senior citizen resides, or any government-issued ID, which reflects the name, picture, date of birth, and nationality of the senior citizen.
7. The PWD must present the PWD ID issued by the Persons with Disability Affairs Office (PDAO) or the City/Municipal Social Welfare and Development Office (C/MSWDO) of the place where the person with a disability resides, or the NCDA.
8. If a purchaser is both an SC and a PWD, the purchaser shall only be allowed to avail of either the discount for SCs or PWDs, and he shall present the relevant ID.
9. If the purchaser is a child with a disability, the parents have the full authority to purchase the product for their child and must only present the ID as required.
10. On the purchase of group meals, the basis of the 20% discount shall be on the amount corresponding to the combination of the most expensive and biggest single-serving meal with a beverage served in a quick-service restaurant, which is deemed flexible and is adjusted accordingly by food establishments to estimate a single food purchase for an individual SC and PWD.
11. For purchases made through the internet or online platform, the SC or PWD must declare to the online platform/merchant that he is an SC or a PWD, before placing the order.
12. Upon delivery of the goods/orders or performance of the service purchased through the online platform, the SC or the PWD or his duly authorized representative shall present the original copy of the SC or the PWD proof of entitlement which was attached during the confirmation of his orders, together with the authorization letter, if applicable; otherwise, the full amount of the goods/orders or services will be charged.
13. The same rules apply to purchases made through the telephone or mobile phone calls.
14. The business establishments shall have the right to act on any abuse, misrepresentations, falsification, or any other acts contrary to law on the availment of the SC or PWD discount by blocking or suspending the account or name of the erring person.
15. Any individual or business establishment who fails or refuses to observe the statutory discount afforded to SCs and PWDs may be held liable for the penalties provided by law.
BIR PRESCRIBES THE POLICIES, GUIDELINES & PROCEDURES IN THE REVALIDATION OF TAX CREDIT CERTIFICATE
APRIL 29, 2022
Revenue Memorandum Order (RMO) No. 26-2022, issued on April 29, 2022, prescribes the policies, guidelines, and procedures in the application for revalidation of Tax Credit Certificates (TCC).
Highlights include the following:
a. Documentary requirements as well the BIR offices that will handle the application.
b. All applications for TCC revalidation shall be submitted any time before the expiration of the validity period of the original TCC. A new TCC will be issued reflecting its unutilized amount or creditable balance.
c. Issued TCCs that remain unutilized after five (5) years from the date of issue, unless an application for revalidation has been filed before the end of the fifth (5th) year, shall be considered invalid. It shall not be allowed for use as payment of any internal revenue tax liability, and the unutilized Certificate shall revert to the general fund of the government.
d. The revalidated TCC shall be valid for five (5) years from the date of its issue.
e. No revalidated TCC shall be issued unless the BIR has certified that the taxpayer-TCC holder has no outstanding tax liability which refers to an assessment that is already final and executory pursuant to Section 5(d) of Revenue Regulations No. 5-2000. The processing of an application for revalidation that was held in abeyance due to the existence of outstanding tax liability and valid open-stop filer cases shall be settled with the concerned RDO within two (2) years from the date of application for TCC revalidation. Non-settlement of the outstanding tax liability or valid open cases shall result in the denial of the taxpayer’s applications for TCC revalidation.
BIR ANNOUNCES THE AVAILABILITY OF CENTRAL BUSINESS PORTAL FOR ONLINE REGISTRATION OF ALL TYPES OF CORPORATIONS, PARTNERSHIPS & SOLE PROPRIETORS
APRIL 28, 2022
Revenue Memorandum Circular No. 61-2022 announces the availability of Central Business Portal (CBP) for online registration of all types of corporations, partnerships, and sole proprietors in view of the expansion of the portal to include the Department of Trade and Industry (DTI) and additional Local Government Units (LGUs) in the online processing of business registration. The CBP is an online platform that aims to streamline and to integrate the business registration processes of the Securities and Exchange Commission (SEC), DTI, Bureau of Internal Revenue (BIR), Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), Home Development Mutual Fund (HDMF), and selected LGUs in Metro Manila. The CBP was developed in compliance with the provisions of Republic Act (R.A.) No. 11032, or the "Ease of Doing Business and Efficient Government Service Delivery Act of 2018", to establish a central system to receive applications and capture application data involving business-related transactions.
BIR PRESCRIBES A STANDARD FORMAT FOR NUMBERING TAX ASSESSMENT NOTICES
APRIL 27, 2022
Revenue Memorandum Order (RMO) No. 23-2022 prescribes the standard format for the numbering of deficiency tax assessment notices. Highlights include the proper numbering, sequencing, and indexing for proper monitoring. Likewise, decisions on disputed assessments, whether whole or partial acceptance or denial, will be communicated to the taxpayer through the issuance of a Final Decision on Disputed Assessment (FDDA) bearing the amended deficiency tax assessment. Whenever a replacement electronic Letter of Authority (eLA) is issued due to reassignment of the case to another Revenue Officer/Group Supervisor, the applicable letter of demand/assessment notice shall now bear the recent LA Serial Number and Audit Case Number.
BIR CLARIFIES THE FILING & PAYMENT OF FRANCHISE TAX RETURN FOR PAGCOR LICENSEES
APRIL 22, 2022
Revenue Memorandum Circular (RMC) No. 52-2022 clarifies the filing and payment date of the franchise tax and its corresponding return for Philippine Amusement and Gaming Corporation (PAGCOR) Licensees.
It may be recalled that under RMC No. 32-2022, the BIR has clarified that the 5% franchise tax is directly payable to the BIR, and that the Licensee shall remit the franchise tax to the BIR using BIR Form 2553 indicating the Alphanumeric Tax Code (ATC) OT 010.
As further clarified, the said BIR Form shall be filed and the corresponding franchise tax shall be paid within 25 days after the end of each taxable quarter.
BIR PARTLY AMENDS RMC 24-2022 TO ALIGN WITH THE PROVISIONS OF CREATE LAW
APRIL 20, 2022
Revenue Memorandum Circular (RMC) No. 49-2022 amends pertinent portion of the Q & A in RMC No. 24-2022 to align them with the provisions of Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law and its Implementing Rules and Regulations (IRR).
Highlights include:
a. Work-around procedures, as a result of the deferment of Revenue Regulations (RR) No. 9-2021 related to the imposition of 12% VAT on certain transactions previously subjected to 0% VAT, also applies to other affected taxpayers and not limited to sales to registered export enterprises and domestic market enterprises (DMEs) within Ecozones and Freeport Zones.
b. Qualifications on the entitlements of registered non-export locators (prior to CREATE Law) or domestic market enterprises (DMEs as introduced in CREATE Law) located in Ecozones and Freeport Zones shall be dependent on their date of registration, whether prior to or during the effectivity of the CREATE Law.
c. Work-around procedures for existing registered export enterprises transitioning from Income Tax Holiday (ITH) to 5% Special Corporate Income Tax (SCIT) but remained as VAT-registered.
d. Clarifications on prior approval from the BIR by local suppliers of goods and services of registered export enterprises in order to qualify for VAT zero-rating.
BIR DISPENSES THE REQUIREMENT OF AFS FOR CDA-REGISTERED ENTITIES WITH GROSS SALES OR RECEIPTS OF LESS THAN PHP 3 MILLION FOR RENEWAL OF CERTIFICATE OF TAX EXEMPTION
APRIL 20, 2022
Revenue Memorandum Circular (RMC) No. 48-2022 clarifies that cooperatives registered under the Cooperative Development Authority (CDA) whose gross annual sales, receipts, or earnings do not exceed the threshold of Php 3 Million shall not be required to submit an Audited Financial Statements (AFS) for renewal of Certificate of Tax Exemption (CTE) purposes.
It may be recalled that the Tax Reform for Acceleration and Inclusion (TRAIN) Law amends Section 232 of the 1997 Tax Code specifically on the requirement of keeping books of accounts audited and examined by independent Certified Public Accountant (CPA) for taxpayers whose gross annual sales, receipts, or earnings do not exceed Php 3 Million.
BIR CLARIFIES THE DEADLINE OF SUBMISSION OF ATTACHMENTS TO THE 2021 ANNUAL INCOME TAX RETURN
APRIL 18, 2022
Revenue Memorandum Circular (RMC) No. 46-2022 clarifies that the deadline of the submission of attachments to the 2021 Annual Income Tax Return (AITR) is on or before May 31, 2022, whether the electronically filed AITR is an original or an amended return. The submission shall be made either manually to the BIR office where the taxpayer is registered, or electronically via the Electronic Audited Financial Statements (eAFS) System.
APRIL 12, 2022
APRIL 12, 2022
BIR CLARIFIES THE DEADLINE FOR THE FILING OF ANNUAL ITR & NON-IMPOSITION OF SURCHARGE ON AMENDED RETURNS
APRIL 12, 2022
Revenue Memorandum Circular (RMC) No. 42-2022 clarifies the deadline for the filing of Annual Income Tax Return (AITR), guidelines in the manner of filing and payment thereof, and non-imposition of surcharge on amended returns.
Highlights include:
a. The deadline for the filing of Calendar Year 2021 AITR is on or before April 18, 2022, since April 15, 2022 falls on a non-working holiday.
b. Amendments may be filed on or before May 16, 2022, without the imposition of penalties. Any overpayment of taxes paid, as a result of the amendment, may be carried over as tax credit against the same tax type in the succeeding period, or file for a refund.
c. Electronic signature shall be deemed equivalent to an actual signature or “wet signature” for filing purposes.
d. Attachments to the AITR that are required to be electronically filed/amended must be submitted on or before May 31, 2022, to the BIR where the taxpayer is registered or through Electronic Audited Financial Statements (eAFS) facility.
BIR ISSUES IRR ON TAXATION OF PROPRIETARY EDUCATIONAL INSTITUTIONS AND NON-PROFIT HOSPITALS
APRIL 8, 2022
Revenue Regulations (RR) No. 3-2022, issued on April 8, 2022, implements the provisions of the Republic Act (R.A.) No. 11635 or the Act Amending Section 27 (B) of the National Internal Revenue Code (NIRC) of 1997, as amended, on the income taxation of proprietary educational institutions and hospitals that are non-profit.
Highlights include:
a. The following institutions shall be covered by the preferential 10% corporate income tax rate; provided, however, that beginning July 1, 2020 until June 30, 2023, the rate of 1% shall apply:
Proprietary educational institutions
Hospitals that are non-profit
Non-stock, non-profit educational institutions whose net income or assets accrue/inure to or benefit any member or a specific person
b. The 25% regular corporate income tax rate shall be imposed on the entire taxable income of the institutions mentioned above, if their gross income from unrelated trade, business or other activity exceeds 50% of the total gross income they derived from all sources.
c. Non-stock, non-profit educational institutions shall be subject to the rate of 25% regular corporate income tax on the portion of its revenues or assets not used actually, directly, and exclusively for educational purposes.
BIR CLARIFIES THE GUIDELINES ON THE USE OF eAFS SYSTEM & e-SIGNATURES
APRIL 6, 2022
Revenue Memorandum Circular (RMC) No. 40-2022 provides clarifications and guidelines on the use of the Electronic Audited Financial Statement (eAFS) System as well as the use of electronic signature on all tax returns, attachments, and documents required to be submitted along with the Annual Income Tax Returns (AITR). The submission of eFiled AITR and its attachments to the eAFS is applicable to any taxable year, whether fiscal or calendar year. The existing procedures for the submission of filed AITR and its attachments to the eAFS system shall be observed. Likewise, the use of electronic signature applies to all tax returns, attachments, and documents required to submit AITR and returns.
BIR CLARIFIES THE GUIDELINES ON THE PAYMENT OF PENALTY FOR RBEs VIOLATING THE WFH GUIDELINES PRESCRIBED BY FIRB
APRIL 6, 2022
Revenue Memorandum Circular (RMC) No. 39-2022 clarifies the manner of payment of penalties by Registered Business Enterprises (RBEs) under the Information Technology-Business Process Management (IT-BPM) Sector for violations of the conditions prescribed under the Work-from-Home (WFH) Arrangement pursuant to Fiscal Incentives Review Board (FIRB) Resolution Nos. 19-21 and 23-21.
Highlights include:
1. RBE shall be liable for payment of regular income tax of either 25% or 20%, whichever is applicable, corresponding to the months of violation of WFH conditions.
2. RBE with no transactions subject to regular income tax can voluntarily pay the penalty using BIR Form No. 0605 by choosing the radio button pertaining to 'Others', under 'Voluntary Payment' and indicate in the field provided the phrase "Penalty" pursuant to FIRB Resolution No. 19-2021". The tax type code shall still be "IT" and the ATC to be indicated is "MC 200". Penalties should be settled within 30 days after the due date prescribed for the payment of income tax.
3. RBE shall continue to file its AITR using BIR Form No. 1702-EX for those with Income Tax Holiday Incentive and BIR Form No. 1702-MX for those enjoying Gross Income Tax Incentive or those with mixed transactions.
BIR FURTHER CLARIFIES THE AVAILMENT PERIOD OF VAT ZERO-RATING INCENTIVES OF EXISTING REEs UNDER IPAs
APRIL 6, 2022
Revenue Memorandum Circular (RMC) No. 38-2022 clarifies the transitory provisions for the non-income related tax incentives, specifically the VAT zero-rating on purchases of Registered Export Enterprises (REEs) under Investment Promotion Agencies (IPAs.)
It may be recalled that pursuant to CREATE Act and its implementing rules and regulations, REEs shall be entitled to VAT zero-rating on local purchases that are directly attributable to and exclusively used in the registered project or activity.
Highlights include:
1. All existing REEs prior to CREATE that will continue to avail of their existing income tax incentives may continue to enjoy the Value-Added Tax (VAT) zero-rating on local purchases that are directly attributable to and exclusively used in the registered project or activity until the expiration of the transitory period, as follows:
a. REEs enjoying only an Income Tax Holiday (ITH)-until the remaining period of the ITH.
b. REEs granted an ITH and/or 5% tax on gross income earned-until the expiration of the ten (10) year limit.
2. If the income tax incentive of an REE has already expired prior to CREATE, VAT zero-rating on local purchases could no longer be availed since the extent for the availment of VAT zero-rating on local purchases is anchored on the transitory provision above.
APRIL 6, 2022
BIR PRESCRIBES A UNIFORM TEMPLATE FOR VAT ZERO PERCENT CERTIFICATION ISSUED BY IPA
APRIL 6, 2022
Revenue Memorandum Circular (RMC) No. 36-2022 prescribes the format of Value-Added Tax (VAT) zero-rating certification issued by Investment Promotion Agencies (IPAs) to the duly Registered Export Enterprises (REEs). The format includes the registered activity, entitlement to tax incentives, applicable goods and services, and template. All IPAs are required to submit a master list of all REEs which have been issued the said certification to the Audit Information Tax Exemption Incentives Division (AITEID).
BIR CIRCULARIZES THE NEW BIR FORM 2316
MARCH 31, 2022
Revenue Memorandum Circular (RMC) No. 34-2022 circularizes the availability of revised BIR Form No. 2316 (Certificate of Compensation Payment/Tax Withheld for Compensation Payment With or Without Tax Withheld) September 2021 ENCS. The new form incorporates the additional line for the 5% tax credit under Personal Equity and Retirement Account (PERA) Act of 2008.
BIR CLARIFIES THE TAXABILITY OF PAGCOR, ITS CONTRACTEES & LICENSEES
MARCH 29, 2022
Revenue Memorandum Circular (RMC) No. 32-2022 clarifies the tax treatment of the Philippine Gaming Corporation (PAGCOR), its Contractees and Licensees.
Highlights of the circular are as follows:
1. PAGCOR's income from its operations and licensing of gambling casinos, and other similar recreation or amusement places are subject to the 5% Franchise Tax, in lieu of all taxes, pursuant to Presidential Decree (P.D.) No 1869.
2. Income from "other related operations/services" shall be subject to regular corporate income tax, VAT, and other applicable taxes under the 1997 Tax Code, as amended.
3. Contractees and licensees shall be exempt from the payment of corporate income tax realized from the operation of casinos upon payment of the 5% Franchise Tax since the law is clear that said exemption inures and extends to their benefit.
4. For value-added tax (VAT) purposes, the tax exemption of PAGCOR extends only to those individuals or entities that have contracted with PAGCOR (PAGCOR Contractees and not Licensees) in connection with PAGCOR's gaming operations.
5. For Licensees that are in Ecozones/Freeports,
Their income realized from other related services/operations shall be subject to the tax regime applicable to said Licensees, that is, 5% Gross Income Tax (GIT) or Income Tax Holiday (ITH), as the case may be. If they are under 5% GIT, they are exempt from Regular Corporate Income Tax (RCIT) and value-added tax (VAT). On the other hand, if they are under ITH, then they are also exempt from RCIT but subject to VAT.
On their income realized from related services/operations which are not covered with their registered activity or activities with the concerned Investment Promotion Agencies (IPA), the same shall be subject to RCIT, VAT, and other applicable taxes under the 1997 Tax Code, as amended.
Their income from gaming operations shall not be subject to the GIT, ITH, or RCIT but remains subject to the 5% Franchise Tax.
6. Gaming operations revenues of PAGCOR Contractees shall be exempt from RCIT upon payment of the 5% Franchise. However, the goods they provided and/or services performed to PAGCOR in relation to such gaming operations are subject to 0% VAT.
7. The license/regulatory fees paid by Licensees to PAGCOR are different and distinct from the 5% Franchise Tax payable to the BIR.
MARCH 22, 2022
BIR REQUIRES ATTACHMENT OF CETI IN THE ANNUAL ITR TO BE FILED BY RBE
MARCH 16, 2022
Revenue Memorandum Circular (RMC) No. 28-2022 requires Registered Business Enterprises (RBEs) under Investment Promotion Agency (IPA) to apply for a Certificate of Entitlement to Tax Incentives (CETI) with their respective IPA, to submit and to attach the same in the Annual Income Tax Return (AITR) to avail of the Income Tax Holiday (ITH) or preferential rate granted under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.
BIR CLARIFIES THE TAXABILITY OF e-SABONG
MARCH 11, 2022
Revenue Memorandum Circular (RMC) No. 25-2022 clarifies the taxability of electronic sabong (e-Sabong) operations as regulated by the Philippine Amusement and Gaming Corporation (PAGCOR).
Highlights include:
1. The gaming income from e-Sabong Operation by an e-Sabong Operator(eSO) shall be subject to a 5% Franchise Tax in lieu of all internal revenue taxes except value-added tax (VAT), or percentage tax, depending on the threshold. This is separate and distinct from the 5% franchise tax due from PAGCOR arising from the licensing and regulatory fees that PAGCOR receives from the e-Sabong Operator. The Franchise Tax shall be remitted by the e-Sabong Operator directly to the BIR.
2. The following shall be subject to regular income tax, VAT or percentage tax depending on the threshold, withholding tax, and other taxes since these are not derived from the e-Sabong license issued by PAGCOR:
a. Service income and other income
b. Commission income-eSO shall withhold and remit the corresponding creditable withholding taxes (CWT) (5%/10% for individual payees and 10%/15% for non-individual payees) due for the account of the Master Agent/Agent or Promoter/Coordinator.
c. The income received by the cockpit owner/operator-eSO shall be subject to withholding tax of 5% CWT due for the account of the cockpit owner/operator.
d. Income received by a Third Party Offsite-Cockpit Betting Station (OCBS) Host from the OCBS-eSO shall subject to withholding tax of 2% due for the account of the Third Party OCBS Host.
e. Income received by a Third-Party Game Cock Owner-eSO shall subject to withholding tax of 2% CWT due for the account of the Third-Party Gamecock Owner.
f. Other income derived or received by any person or entity in relation to the operation of e-sabong not included in the above-mentioned enumeration shall be subject to appropriate taxes, including but not limited to final withholding taxes and the like, under the 1997 Tax Code, as amended.
BIR CLARIFIES ISSUES RELATIVE TO RR 21-2021 IMPLEMENTING THE VAT ZERO-RATING AMENDMENTS INTRODUCED UNDER CREATE LAW
MARCH 9, 2022
Revenue Memorandum Circular (RMC) No. 24-2022 clarifies certain issues relative to Revenue Regulations (RR) No. 21-2021 implementing the amendments to the Value-Added Tax (VAT) zero-rating provisions under Sections 106 and 108 of the 1997 Tax Code in relation to the amendments introduced under CREATE Law, specifically on the effectivity of the VAT treatment of transactions by Registered Business Enterprises (RBEs) and the transitory provision of the said revenue regulations.
Highlights include:
a. "Cross Border Doctrine" as applied to Ecozones or Freeport Zones has been rendered ineffectual and inoperative for VAT purposes with the passage of CREATE Act because of the following:
Passage of CREATE Law expressly provides that only those goods and services that are directly and exclusively used in the registered project or activity of RBEs shall qualify as VAT 0% local purchases
The setting of parameters for the availment of VAT zero-rating on local purchases of registered export enterprises, regardless of the location under CREATE Law
Issuance of RR No. 21-2021, amending Sections 4.106-5(b) and of RR No. 16- 2005, as amended, to harmonize the VAT zero-rate provisions of the Tax Code, as amended by TRAIN and CREATE Laws, which now provide that the effectively zero-rated sales shall only apply to sales of goods and services rendered to persons or entities who have direct and indirect tax exemption granted pursuant to special laws or international agreements to which the Philippines is a signatory.
b. "Direct and exclusive use" in the registered project or activity pertains to raw materials, supplies, equipment, goods, packaging material, services, including the provision of basic infrastructure, utilities, and maintenance, repair and overhaul of equipment, and other expenditures directly attributable to the registered project or activity without which the registered project or activity cannot be carried out. Thus, costs incurred for administrative purposes will be excluded. For purchases that cannot be clearly identified, the registered export enterprise concerned should adopt a method to best allocate between the cost of sales and administrative expenses. Otherwise, it will be subject to 12% VAT.
c. Presentation of BIR Certificate of Registration (BIR Form 2303), Certificate of Registration and VAT Certification issued by the concerned IPA, and a Sworn Declaration that the goods and/or services being purchased will be used directly and exclusively in the registered project shall be presented by RBEs to the supplier. Then, the supplier should seek prior approval from the BIR before applying the VAT zero-rating. The absence of these requisites may result in the disallowance of the VAT zero-rated sale of the supplier.
d. Work-around procedures and options for the sale of goods and services where the VAT has already been billed and/or collected during the effectivity of RR No. 9-2021 from July 1, 2021, to July 27, 2021.
e. The sale of VAT-registered suppliers to registered export enterprises enjoying fiscal incentives under the CREATE Act shall be treated as VAT zero-rated. However, it shall only apply to goods and/or services directly and exclusively used in the registered project or activity of said registered export enterprise, for a maximum period of 17 years from the date of registration, unless otherwise extended under the Strategic Investment Priority Plan (SIPP). Enjoyment of VAT and duty incentives is reckoned from the registered export enterprise's date of registration and throughout the period as indicated in its Certificate of Registration.
f. RBEs, categorized as Domestic Market Enterprises (DMEs), are not entitled to VAT zero-rating on local purchases. The sale of goods or services to a registered DME shall be subject to VAT at 12%.
g. DME, under the 5% Gross Income Tax (GIT) or Special Corporate Income Tax (SCIT) regime, registered as a VAT exempt entity, shall treat its revenues as VAT exempt. The VAT passed on to it by its VAT-registered local suppliers shall form part of its cost or expenses.
h. The proper treatment for those who qualified for zero-rating or VAT-exempt rules, on sale made by registered export enterprise/DME to another registered export enterprise.
i. Incentives of non-RBE exporters shall be limited only to VAT at zero rates on the direct export sale of goods or services pursuant to Sections 106(A)(2)(a)(1) and 108(B)(2) of the Tax Code, as amended.
j. VAT treatments on the sale, transfer, or disposition of the imported capital equipment, raw materials, spare parts, or accessories.
k. Sales to enterprises covered by special laws, such as renewable energy developers under RA No. 9513 (Renewable Energy Act of 2008, International Rice Research Institute (IRRI), Asian Development Bank (ADB), etc., are still subject to VAT at zero percent rate (0%).
l. Sales to existing registered export enterprises located inside Ecozones or Freeport zones shall also be qualified for VAT zero-rating until the expiration of the transitory period, or the remaining period of their incentives, as specified in Rule 18 of the CREATE IRR. However, it shall only apply to goods and/or services directly and exclusively used in the registered project or activity of a registered export enterprise.
m. Sale of goods or services to existing registered non-export enterprises located inside the Ecozones or Freeport Zones shall be subject to VAT at 12%.
n. Sales by VAT-registered sellers to export enterprises registered with the Board of Investments (BOI) and IPAs other than the Philippine Economic Zone Authority (PEZA) or Freeports are also subject to zero-rated VAT but shall only apply to goods and/or services directly and exclusively used in the registered project or activity of the registered export enterprise until the expiration of the transitory period or the remaining period of their incentives as specified in Rule 18 of the CREATE IRR.
o. REE with multiple incentives regime shall remain VAT registered until the expiration of the ITH for all its registered activities, and all its activities are covered by the 5% GIT or SCIT regime. REE shall report the sales under the 5% GIT or SCIT regime as VAT exempt, while the sales under the ITH shall be reported in the VAT return as 0% VAT.
p. REE that has already completed its ITH and is already under the 5% GIT or SCIT regime but remained as a VAT-registered entity is required within two (2) months from the expiration of its ITH to change its registration status from a VAT-registered entity to non-VAT. REE enjoying GIT or SCIT regime but are still VAT-registered at the time the CREATE Law took effect are required within two (2) months from the effectivity of the Circular to change its registration status.
BIR CLARIFIES THE SUSPENSION OF INCOME TAX INCENTIVES GRANTED TO ALL IT-BPM RBEs FOR VIOLATION OF WFH THRESHOLD AS PRESCRIBED BY FIRB
MARCH 9, 2022
Revenue Memorandum Circular (RMC) No. 23-2022 suspends the Income Tax incentives granted to all Registered Business Enterprises (RBEs) of the Information Technology-Business Process Management (IT-BPM) sector that violated the work-from-home (WFH) threshold as prescribed by the Fiscal Incentives Review Board (FIRB).
It may be recalled that the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law has introduced temporary measures to cushion the impact of Covid-19. One of the measures as implemented by FIRB is the issuance of FIRB Resolution Nos. 19-2021 and 23-2021, allowing RBEs in the IT-BPM sector to continue with the WFH arrangement until March 31, 2022, subject to the conditions provided in the said resolutions.
Highlights include:
a. Non-compliance with all the conditions prescribed under FIRB Resolution Nos. 19-21 and 23-21 shall be met with the suspension of the Income Tax incentive on the revenue corresponding to the months of non-compliance. Consequently, RBE shall pay the Income Tax using the regular rate of 25% or 20% based on the taxable net income corresponding to the months the RBE has violated.
b. For RBEs with no existing transactions subject to the regular Income Tax rate, BIR Form 1702-MX shall be used for the voluntary payment of the Income Tax due on the months with the reported violation. Otherwise, BIR Form 0605 shall be used if they have existing transactions subject to the regular income tax rates.
c. In the absence or insufficiency of voluntary payment, RBE shall be subjected to an audit pursuant to a Letter of Authority (LOA) and based on the Investment Promotion Agencies monthly report as submitted to the FIRB and endorsed to the BIR.
d. "Total Workforce" shall refer to the total employees that are directly or indirectly engaged in the registered project or activity of the RBE, but excludes third-party contractors, if any, such as service contractors rendering janitorial or security services and other similar services.
BIR CLARIFIES TAX COMPLIANCE OBLIGATIONS IN LINE WITH THE UPCOMING NATIONAL AND LOCAL ELECTIONS
FEBRUARY 21, 2022
Revenue Memorandum Circular (RMC) No. 22-2022 reminds everyone, particularly those who are running as candidates or participating in any other manner in the May 9, 2022 National and Local Elections, of their obligations.
Highlights:
1. All candidates, political parties (PPs)/party-list groups (PLGs), and campaign contributors are required to register with the BIR, issue official receipts and withhold taxes.
2. It shall be the duty of every candidate and PPs/PLGs upon the filing of the certificate of candidacy to update their registration with the BIR.
3. The registration shall be made with the Revenue District Office (RDO) having jurisdiction over the political subdivision where the candidate is seeking election, or at the RDO having jurisdiction over their principal residence or registered head/principal office address.
4. Individual candidates shall be registered as “Professional – In General” and tagged as “Politician” under the special code in the BIR registration system.
5. PPs/PLGs shall be tagged as “Political Party” under the special code in the BIR registration system.
6. Individual campaign contributors shall be registered under Executive Order No. 98 as taxpayer type with the RDO having jurisdiction over his place of residence. Non-individual campaign contributors shall be registered with the RDO having jurisdiction over its principal place of business/head office.
7. All candidates and PPs/PLGs shall pay Php 500 Annual Registration Fee and be issued a Certificate of Registration (COR). COR is no longer required to be issued for individual candidates who are not engaged in business.
8. All candidates and PPs/PLGs shall keep books and other accounting records and shall also register Non-VAT Official Receipts to be issued for every contribution received.
9. Individual candidates may opt to use a simplified set of bookkeeping records.
10. To be considered exempt from the income tax, campaign contributions must have been utilized to cover candidate’s expenditures for his/her campaign during the campaign period.
11. Unutilized funds, as well as donations utilized before the campaign period, shall be considered subject to income tax.
12. Contributions to any candidates, PPs/PLGs, duly reported to Commission on Elections (COMELEC), are exempt from Donor’s tax.
13. Donations made by corporations in violation of the Revised Corporation Code are subject to donor’s tax and may not be deducted as political contributions.
14. Income payments made by political candidates and PPs/PLGs on their purchases of goods and services as campaign expenditures, and income payments made by individuals or juridical persons for their purchases of goods and services intended to be given as campaign contribution to political parties and candidates shall be subject to 5% creditable withholding tax (CWT).
15. Expenses that were not subjected to the 5% CWT are not considered utilized campaign funds.
16. Accounting records and all pertinent documents shall be preserved.
17. Every candidate and Treasurer of the PPs/PLGs shall submit Statement of Contributions and expenditures to COMELEC and RDO where they are registered within 30 days after the election.
18. Failure to register and comply with the requirements of the BR will be subject to penalties.
BIR CLARIFIES THE CLAIM OF INPUT VAT ON PURCHASES OR IMPORTATION OF CAPITAL GOODS UNDER TRAIN LAW
FEBRUARY 21, 2022
Revenue Memorandum Circular (RMC) No. 21-2022 prescribes new workaround procedures and guidelines in relation to the claiming of input VAT on purchases or importations of capital goods provided in Section 110 of the 1997 Tax Code, as amended by Republic Act No. 10963 (“Tax Reform for Acceleration and Inclusion” or the “TRAIN Law”).
Highlights include the following:
1. Effective January 1, 2022, all input tax on purchases of capital goods shall already be allowed upon purchase/payment, and shall no longer be deferred;
2. Taxpayers with unutilized input VAT on capital goods purchased or imported prior said date shall be allowed to amortize such until fully utilized;
3. If depreciable capital good is sold/transferred prior to the exhaustion of the amortizable input tax, the entire unamortized portion can be claimed as input tax credit during the month/quarter when the sale or transfer was made;
4. In relation to No. 1, in filling up BIR Form 2550M/Q, Schedule 3(A), instead of the actual useful life in terms of months, place number “1” under columns “E” and “F” and encode the input tax claimed from purchase/s of capital goods exceeding Php 1M in Column “G”.
BIR FURTHER CLARIFIES THE GUIDELINES ON THE FILING OF REQUESTS FOR CONFIRMATION & TAX TREATY APPLICATIONS
FEBRUARY 17, 2022
Revenue Memorandum Circular (RMC) No. 20-2022 prescribes guidance on the filing of Requests for Confirmation (RFCs), Tax Treaty Relief Applications (TTRAs), and Tax Sparing Applications.
Highlights include:
1. Taxpayers who were already issued with Certificate of Entitlement (COE) shall no longer file an RFC or TTRA every time an income of similar nature is paid to the same nonresident.
2. In applying the confirmed treaty benefit to future income payments, the income payor or withholding agent shall always be guided by the requisites mentioned in the COE.
3. The same shall also apply to the COE to the Reduced Dividend Rate issued by the BIR for tax sparing applications.
4. A new RFC, TTRA, or Tax Sparing Application shall only be filed if any of the requisites mentioned in the certificate is absent.
5. During a tax audit, the income payor shall submit or present a copy of the duly issued COE and proof of satisfaction of the requisites cited therein. On the other hand, the BIR examiner shall ensure the authenticity of the submitted documents.
6. For business profits, income from services (dependent or independent), capital gains, income derived by teachers, and such other income from non-recurring transactions, the RFCs or TTRAs shall still be filed following the procedures and requirements prescribed in Revenue Memorandum Order No. 14-2021, as amended by RMC No. 77- 2021.
7. As regards the annual updating that is required for a long-term contract of services, the taxpayer shall only submit certain documents in relation to the update.
BIR CLARIFIES SECTION 40(C)(2) OF THE TAX CODE, AS AMENDED BY CREATE, ON TAX-FREE EXCHANGES
FEBRUARY 4, 2022
Revenue Memorandum Circular (RMC) No. 19-2022 provides clarification and guidance on tax-free exchange of properties under Section 40(C)(2) of the Tax Code of 1997, as amended by Republic Act No. 11534 (CREATE Law). Specifically, the Bureau clarifies the mandate to issue a Certificate Authorizing Registration (CAR) without prior BIR confirmation or tax ruling on the tax-free exchanges of properties, as well as the proper valuation of the subsequently transferred properties and shares of stocks to facilitate the imposition of proper taxes on such transfer. Likewise, it is now optional on the part of the taxpayer to request a ruling to clarify legal issues that may affect the transactions.
It may be recalled that Under Section 40(C)(2) of the 1997 Tax Code, as amended by CREATE, reorganization and transfer of property to a controlled corporation are tax-free exchanges of properties. Reorganizations include mergers or consolidations, acquisition of controlled corporation, acquisition of all or substantially all of properties of another corporation, recapitalization, and re-incorporation.
Highlights include:
1. The pro-forma entries for the exchanges and the valuation of the following: (1) substituted basis of the stock or securities received by the transferor in exchange for shares, (2) substituted basis of the property in the hands of the transferee exchanged for shares, and the (3) original basis of the property to be transferred;
2. The basis for determining gain or loss on the subsequent sale or disposition of properties;
3. The requirements set forth for proper monitoring of the substituted basis of properties;
4. Exemption from Capital Gains Tax, Creditable Withholding Tax, Income Tax, Donor’s Tax, Value Added Tax, and Documentary Stamp Tax on conveyances of real properties and subsequent transfers of shares of stocks; and
5. The venue for the issuance of CAR, and the conduct of a post-audit of said transactions to determine the taxability thereof.
BIR CLARIFIES THE SCOPE & COVERAGE OF THE EXTENSION OF DEADLINES UNDER RR NO. 1-2022
JANUARY 31, 2022
Revenue Memorandum Circular (RMC) No. 16-2022 clarifies the scope and coverage of the extension of deadlines granted under Revenue Regulations (RR) No. 1-2022, particularly Section 2, items (1) and (3) thereof, to wit:
1. The extension of submission of all required documents shall pertain to the submission of, but not limited to, inventory lists, Alphalists, and tax and information returns, among others. Item 1 also includes registration of books of accounts.
2. The extension of 30 days for the filing of VAT refund claims also applies in case of claims wherein the applicant is a registered taxpayer in the area declared as Alert Level 1 or 2 provided that the venue of filing is under Alert Level 3 or higher. Particularly, this is applicable to claims filed in the VAT Credit Audit Division (VCAD) at the National Office for direct exporters who are registered in various RDO jurisdictions.
Said extension shall begin to run after the lapse of the prescribed period for VAT refund processing. However, in view of the declaration of Alert Level 3 in NCR, the processing of VAT claims shall be extended until April 13, 2022.
3. The extension of deadlines also applies to Large Taxpayer Offices of the BIR classified under Alert Level 3 or higher for the month of January 2022.
BIR EXTENDS THE DEADLINE OF FILING FOR TAXPAYERS UNDER COVID ALERT LEVEL 3 OR HIGHER
JANUARY 27, 2022
Revenue Regulations (RR) No. 1-2022 extends the deadline of the following activities falling due during the month of January 2022, for thirty (30) calendar days from due date covering all taxpayers within the jurisdiction of Revenue Regions, and Revenue District Offices (RDOs) under Alert Level 3 or higher:
1. Filing of tax returns and/or payment of taxes due thereon;
2. Filing of replies, documents, and the like in relation to an on-going BIR audit;
3. Filing of application for tax refund, and processing of such;
4. Issuance of assessments and warrants to enforce collection of deficiency taxes.
The RR shall take effect immediately.
BIR CIRCULARIZES R.A. 11635 ON TAXABILITY OF PROPRIETARY EDUCATIONAL INSTITUTION & HOSPITAL
JANUARY 24, 2022
Revenue Memorandum Circular No. 13-2022 circularizes Republic Act (R.A.) No. 11635, titled “An Act Amending Section 27(B) of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes” providing clarity on the wording in the Tax Code itself. Prior to the amendment, the 1997 Tax Code provides that “Proprietary educational institutions and hospitals which are nonprofit shall pay a tax of ten percent (10%) on their taxable income…”
As amended by RA No. 11635, Section 27(B) of the Tax Code now reads as follows:
“Hospitals which are nonprofit and proprietary educational institutions shall pay a tax of ten percent (10%) on their taxable income . . .” Thus, the nonprofit qualification only applies to hospitals and not to proprietary educational institutions.
BIR CIRCULARIZES R.A. 11595 OTHERWISE KNOWN AS RETAIL TRADE LIBERALIZATION ACT OF 2000, AS AMENDED
JANUARY 24, 2022
Revenue Memorandum Circular No. 11-2022 circularizes Republic Act No. 11595, titled “An Act Amending Republic Act No. 8762, Otherwise Known as the ‘Retail Trade Liberalization Act of 2000’, by Lowering the Required Paid-Up Capital for Foreign Retail Enterprises, and for Other Purposes”.
Highlights include:
1. Reduction in the minimum paid-up capital requirements. All foreign-owned retail enterprises must now only have a minimum paid-up capital of at least Php 25 million (USD 500,000).
2. Certification of pre-qualification is no longer required.
3. Reduction in minimum investment required for each store for foreign-owned retail trade enterprises from USD 830,000 per store to Php 10 million (USD 200,000).
4. Retail enterprises with foreign ownership of more than eighty percent (80%) are no longer required to offer a minimum of thirty percent (30%) of their equity to the public through any stock exchange in the Philippines within eight (8) years from start of operations.
5. Preferential use of Filipino labor.
6. Promotion of locally manufactured products.
BIR ISSUES TAX ADVISORY ON FILING OF 2021 ANNUAL INFORMATION RETURNS
JANUARY 19, 2022
The BIR has issued a Tax Advisory that users who are mandated to file through the Electronic Filing and Payment System (eFPS) shall still use the old forms available in filing the 2021 Annual Information Return of Income Taxes Withheld on Compensation (BIR Form No. 1604-C); Annual Information Return of Income Payments Subjected to Final Withholding Taxes (BIR Form No. 1604-F); and Annual Information Return of Creditable Income Taxes Withheld (Expanded)/Income Payments Exempt from Withholding Tax (BIR Form No. 1604-E). In case of unavailability of the system, eFPS filers shall use the new forms in the Offline eBIRForms Package.
The RR shall take effect immediately.
BIR CLARIFIES THE IMPOSITION OF DST ON TRANSFER OF SHARES OF STOCKS PURSUANT TO DONATION & SETTLEMENT OF ESTATE
JANUARY 18, 2022
Revenue Memorandum Circular (RMC) No. 6-2022 clarifies the imposition of Documentary Stamp Tax (DST) on sales, agreements to sell, memoranda of sales, deliveries, or transfer of shares of stocks. DST, as an excise tax, is levied on the following transfers of shares of stock pursuant to Section 75 of the 1997 Tax Code, as amended:
1. Transfer pursuant to a deed of donation;
2. Transfer pursuant to a will in a judicial settlement of estate; and
3. Transfer in case of a judicial settlement and extrajudicial settlement of estate (both without a will), wherein the heir/s specifically waive/s his or his share over the inheritance-the waived or renounced shares of stock to be transferred to another heir/s shall be subject to DST.
BIR ISSUES TAX ADVISORY THAT BIR FORM 2316 OF EMPLOYEES QUALIFIED FOR SUBSTITUTED FILING SHALL STILL BE ACCEPTED BY THE BIR EVEN WITHOUT EMPLOYEE SIGNATURE
JANUARY 17, 2022
The BIR has issued a Tax Advisory that submitted copies of the Certificate of Compensation Payment/Tax Withheld for Compensation Payment With or Without Tax Withheld (BIR Form 2316) bearing no signature of the employee are still acceptable, provided that such are duly signed by the authorized representative of the taxpayer-employer pursuant to Revenue Memorandum Circular (RMC) No. 18-2021.
BIR CLARIFIES THE SEPARATE PRESENTATION OF COMPROMISE PENALTY IN ASSESSMENT NOTICES
JANUARY 14, 2022
Revenue Memorandum Circular (RMC) No. 3-2022 clarifies the preparation of assessment notices for compromise penalty in the issuance of tax assessment. For uniformity, the preparation of assessment notices such as Preliminary Assessment Notice and Formal Letter of Demand shall now be composed of two parts-Part I containing the deficiency basic tax and civil penalties, and Part II for the assessed compromise penalty relative to violations noted during the conduct of audit. The preparation of the Payment Form (BIR Form 0605) for each part of the assessment notices shall likewise be done separately.
BIR ISSUES BANK BULLETIN ON THE ACCEPTANCE OF RETURNS & PAYMENTS FROM TAXPAYERS UNDER ALERT LEVEL 3 & HIGHER LEVELS
JANUARY 10, 2022
Bank Bulletin No. 2022-02 directs all Authorized Agent Banks (AABs) to accept tax returns and corresponding payments due thereon from taxpayers registered under areas classified and those that are yet to be classified under Alert Level 3 and higher levels, regardless of the Revenue District Office (RDO) jurisdiction. The existing procedures on the processing of out-of-district tax returns and payment of taxes shall be followed. The directive is effective immediately until the Alert Level 3 and higher levels have been lifted and shall supersede Bank Bulletin No. 2022-01.
BANK BULLETIN ALLOWING OUT-OF-DISTRICT FILING DUE TO COVID ALERT LEVEL 3 DECLARATION
JANUARY 5, 2022
Bank Bulletin No. 2022-01 allows out-of-district filing and payment of tax returns, effective immediately until the Alert Level 3 has been lifted. The BIR has directed all Authorized Agent Banks (AABs) to:
a. Accept payments from taxpayers under RDOs in the areas placed under Alert Level 3, including out-of-district returns;
b. Accept check payments even without the name of the receiving AAB branch indicated in the check so long as all check tax payments are made payable to the BIR;
c. Accept all out-of-district returns with check payments even if said checks have different collecting AAB branch name if the payment is made through the same AAB. Taxpayers shall indicate the AAB branch that received the payment at the back of the check.
BIR TAX ADVISORY ON FILING & PAYMENT AVENUES UNDER COVID ALERT LEVEL 3 DECLARATION
JANUARY 5, 2022
The BIR has issued a Tax Advisory that taxpayers residing in areas affected by the Alert Level 3 classification may file returns and pay corresponding taxes due thereon at the nearest Authorized Agent Banks (AAB) or to the authorized Revenue Collection Officers (RCOs), regardless of Revenue District Office jurisdiction. Payment of internal revenue taxes to the RCOs can be in cash or in check regardless of the amount, so long as all checks shall be made payable to the BIR. Taxpayers may likewise file returns through the eBIR Forms System and pay taxes through the Lank Bank of the Philippines (LBP) Link.Biz Portal; Development Bank of the Philippines’ (DBP) Pay Tax Online; Union Bank of the Philippines (UBP) Online/The Portal; and through Gcash, PayMaya and MyEG. Furthermore, no penalty shall be imposed for the wrong venue filing of returns and payment of taxes.
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BIR RELAXES THE TAX DEADLINES FOR TYPHOON ODETTE-STRICKEN AREAS
DECEMBER 31, 2021
Revenue Regulations (RR) No. 22-2021 extends the deadline for the filing of tax returns as well as the payment of the corresponding taxes, including submission of certain documents; the filing of application for tax refund, including claim for VAT refund; the processing of VAT refund; and the statutory period for the issuance of Assessment Notices and Warrants of Distraint and Levy to provide ample time for taxpayers and BIR offices affected by the onslaught of typhoon Odette. If the extended due dates fall on a holiday or non-working holiday, the related submission and/or filing shall be made on the next working day. Furthermore, affected taxpayers may file returns and pay taxes due thereon at the nearest Authorized Agent Banks (AAB) or to the BIR Revenue Collection Officer (RCO), regardless of Revenue District Office jurisdiction. Likewise, those who are mandated to use the eFPS and eBIRForms are temporarily allowed to manually file their tax returns within the indicated period, and no penalty shall be imposed for wrong venue filing of returns and payment of taxes. In cases where access to internet is made available, affected taxpayers are encouraged to file and pay through online avenues as provided in the regulations.
BANK BULLETIN ALLOWING OUT-OF-DISTRICT FILING DUE TO TYPHOON ODETTE
DECEMBER 31, 2021
Bank Bulletin No. 2021-26 directs all Authorized Agent Banks (AABs) to accept all tax returns as well as payments falling due within the period from December 20 to 31, 2021. Payments shall be accepted within thirty (30) days from the due date from taxpayers residing in areas affected by typhoon Odette without corresponding penalties. All AABs are likewise advised to accept all payments from taxpayers for the stated period even if they are outside the jurisdiction of the RDO where they are registered, accept check payments from any TP even without the name of receiving AAB branch indicated in the check payable to the BIR, and accept all out-of-district returns with payments from TPs paying thru check even if said checks have different collecting AAB branch name, provided that the name of the AAB branch that actually received the payment shall be indicated at the back of the check.
BIR PROVIDES WORK-AROUND PROCEDURES FOR THE TAX FILING OF OFFSHORE GAMING TAX
DECEMBER 28, 2021
Revenue Memorandum Circular (RMC) No. 128-2021 provides the work-around procedures for the filing of returns and payment of offshore gaming tax. Specifically, the circular prescribes the form to be used, deadline to submit, and procedures to observe in the preparation, filing, and payment of tax returns.
BIR ANNOUNCES THE AVAILABILITY OF INSTAPAY VIA UPAY FACILITY OF THE UNIONBANK FOR THE PAYMENT OF REVENUE TAXES
DECEMBER 21, 2021
Revenue Memorandum Circular (RMC) No. 126-2021 circularizes the availability of InstaPay via the UPAY facility of the UnionBank of the Philippines (UBP) for the payment of internal revenue taxes.
BIR ANNOUNCES THE AVAILABILITY OF OTHER ONLINE PAYMENT FACILITIES FOR ONETT TRANSACTIONS
DECEMBER 16, 2021
Revenue Memorandum Circular (RMC) No. 125-2021 circularizes the availability of the following online payment facilities for One-Time Transactions (ONETT):
1. Land Bank of the Philippines' (LBP) Link.Biz Portal
2. Development Bank of the Philippines (DBP) pay Tax online
3. Union Bank online Web and Mobile Payment Facility
BIR CLARIFIES THE TAX TREATMENT OF INTERNATIONAL PASSENGER SERVICE CHARGES TO TICKET
DECEMBER 14, 2021
Revenue Memorandum Circular (RMC) No. 122-2021 standardizes the tax treatment of integrating the Domestic Passenger Service Charge (DSPC) and International Passenger Service Charge (ISPC), commonly referred to as terminal fees, into airline tickets at the point of sale.
The provisions of RMC No. 34-2012 shall also govern the invoicing and recording of integrated IPSC in the books of airline companies and airport authorities. Applying the guidelines laid down in the said RMC, the following are the rules for IPSC collected by Airline Company for Airport Authority:
a. Collection of IPSC from passengers
The Domestic Airline Companies shall collect the IPSC from passengers and shall include the IPSC in the Official Receipt (OR) to be issued by the Airline Company to the passenger. The VATable and VAT-exempt components of IPSC shall be separately reflected in the OR. The share of the Airport Authority in the IPSC should be shown in the Airline Company's OR as part of receipts subject to VAT, while the Aviation Security Fee and other fees (P.D. 1957) should be reflected as VAT-exempt. Lastly, the VAT component of the IPSC should be included in the total VAT.
However, for International Airline Companies, the collected IPSC from the passengers shall likewise be reflected in its OR. The share of the Airport Authority, Aviation Fee, and other fees (P.D. 1957) should be reflected as VAT-exempt.
b. Remittance of IPSC by Airline Company to Airport Authority
The IPSC collected by the Airline Company shall be paid to the Airport Authority, which in turn, shall issue an OR to the Airline Company. The OR shall indicate the full amount of the IPSC.
c. Payment of Service Fees by Airport Authority to Airline Company
Payment of service fees by Airport Authority to Airline Company shall be governed by the rules on government money payments and be subject to Creditable Withholding VAT (CVAT) at the rate of 5% and Creditable Withholding Tax (CWT) of 2% of gross payments. The Airline Company shall issue a VAT OR to acknowledge receipt of the service fees from the Airport Authority.
However, payment of service fees by Airport Authority to international Airline Company shall be treated as other income subject to Corporate Income Tax.
Section 6 of Revenue Regulations (RR) No. 15-2013 to the contrary notwithstanding, International Carriers exempt under Section 109 of the Tax Code shall be allowed to register for VAT purposes in relation to IPSC, being unrelated to the transport of passengers and cargo.
Moreover, the collection of taxes on IPSC specified under the RMC should be treated independently from the Gross Philippines Billings (GPB) Tax and the 3% Common Carrier's Tax, as the GPB refers to the amount of gross revenue derived from the carriage of persons, excess baggage, cargo, and mail originating from the Philippines in a continuous and uninterrupted flight, while the Percentage Tax on International Carriers in Section 118 pertains to gross receipts derived from the transport of cargo from the Philippines to another.
Considering that the IPSC is a service charge for services performed within the Philippines, then justifiably, it should be treated independently from the taxes imposed on the mentioned revenue from the carriage of persons, excess baggage, cargo, and mail originating from the Philippines. Should the airline company opt to remit the IPSC to the Airport Authority net of the Service Fees charged, the same rules as above shall apply. However, to comply with the withholding requirements, the tax to be withheld on the service fees, whether CVAT, CWT, or Final Withholding Tax, shall be paid back to the Airport Authority for remittance to the BIR.
BIR CLARIFIES THE TAXABILITY OF INTEREST PAID BY COOPERATIVES TO MEMBER'S DEPOSIT OR FIXED DEPOSITS OR SHARE CAPITAL
DECEMBER 14, 2021
Revenue Memorandum Circular (RMC) No. 121-2021 clarifies the taxability of interest paid by cooperatives to its member's deposit or fixed deposits (otherwise known as share capital). Member's deposit refers to savings and time deposits of both regular and associate members while share capital refers to members’ paid-up capital. Based on Section 11 of RMC No. 12-2010, members of the cooperative are not liable to pay any tax and fee on the interest earned on member's deposits and fixed deposits. Hence, cooperatives are also not liable to withhold tax on the aforesaid interest payments to members.
BIR AMENDS THE VAT ZERO-RATING PRIVILEGES FOR REGISTERED BUSINESS ENTERPRISES
DECEMBER 7, 2021
Revenue Regulations (RR) No. 21-2021 amends certain provisions of RR 16-2005, as amended by RR No.’s 4-2007, 13-2018, 26-2018, and 9-2021 to implement the provisions of CREATE Law on VAT zero-rating for Registered Business Enterprises (RBEs). Specifically, the regulations provide the following highlights and additional guidance on the VAT zero-rating of local purchases of goods and services by RBEs enjoying incentives.
a. Enjoyment on VAT zero-rating on local purchases shall be coterminous with the income tax incentives of RBEs.
b. Zero-rating for existing registered ecozone export and freeport zones enterprises are qualified for VAT zero-rating until the expiration of the transitory period.
c. VAT zero-rating on local purchases of goods and services by RBEs applies only to goods and services that are “directly and exclusively used for the registered project or activity” and without which the registered project or activity cannot be carried out.
d. Expanded coverage of goods and services that qualify under the phrase “directly and exclusively used.” For goods, it refers to the sale of raw materials, inventories, supplies, equipment, packaging materials, and goods to a registered export enterprise. For services, it refers to the sale of services, including the provision of basic infrastructure, utilities, and maintenance, repair, and overhaul of equipment.
e. VAT zero-rating on local purchases shall be subject to the endorsement of the concerned Investment Promotions Agency (IPA), in addition to the documentary requirements of the BIR.
f. The regulations cover transactions entered during the third quarter of taxable year 2021 and onwards.
BIR ISSUES THE IRR ON POGO TAX
DECEMBER 1, 2021
Revenue Regulations (RR) No. 20-2021 implements the Republic Act (R.A.) No. 11590 or the Act Taxing Philippine Offshore Gaming Operations (POGOs).
Highlights:
1. In lieu of all other internal revenue taxes and local taxes, Offshore Gaming Licensees (OGLs), whether Philippine-based or Foreign-based, shall be subject to a gaming tax equivalent to five percent (5%) of the Gross Gaming Revenue/Receipts (GGR) or 5% of the agreed predetermined minimum monthly revenue from gaming operations, whichever is higher.
2. The gaming tax shall be directly remitted to the BIR not later than the 20th day following the end of each month.
3. The income from non-gaming operations shall be subject to regular income tax of 25% of the taxable income.
a. Philippine-based – sources within and outside the Philippines
b. Foreign-based – within the Philippines
4. The non-gaming revenues of all OGLs shall be subject to VAT or Percentage tax, whichever is applicable.
5. Accredited Service Providers (ASPs) shall pay an income tax rate of 25% imposed upon the taxable income.
a. Organized within the Philippines – sources within and outside the Philippines
b. Organized outside the Philippines – sources within the Philippines
6. Sale of goods and/or services by VAT-registered persons or service providers to OGLs subject to gaming tax shall be subject to zero percent (0%) VAT rate if used in gaming operations.
7. ASPs shall withhold and remit the applicable withholding tax for their purchases of goods and services.
8. Foreign nationals who are employed and assigned in the Philippines by an OGL or its ASP shall have a Tax Identification Number (TIN) and pay a final withholding tax (FWT) of 25% on their gross income.
9. Minimum FWT due for any taxable month from said persons shall not be lower than Php 12,000.
10. Any income earned from all other sources within the Philippines by a foreign employee shall be subject to the income tax.
11. Newly established POGO entities shall submit to the BIR a Summary List of Status Update on Foreign Nationals Employed Form (Annex A) and its attachments not later than the 20th day of the succeeding month.
12. POGO entities shall regularly update the list of their foreign employees not later than the 20th day after the close of each month.
13. Each POGO Licensing Authority shall furnish the BIR not later than the 20th day after the close of each month the following:
a. Status Report on OGLs Form (Annex B)
b. List of Foreign Nationals with Issued Gaming Employment License Forms (Annex C).
14. The BIR shall secure the list of foreign nationals employed by POGO entities from:
a. Department of Labor and Employment – who secured Alien Employment Permits
b. Bureau of Immigration – who secured Provisional Working Permits and/or 9(g) visas.
15. Penalties imposed:
a. Fraudulent acts
• Incremental penalties
b. Erring entities
• Closure orders
c. Failure to withhold and remit FWT
• Governed by the Tax Code
• Deportation, be barred from re-entering the Philippines
d. Employment of an alien without a TIN
• Php 20,000 for every alien without such TIN
• Revocation of licenses obtained by POGO entities
e. Failure to Submit Annex A
• Penalties under the Tax Code
f. Failure to provide true and correct address
• Considered as having failed to register with the BIR
g. Other penalties
16. Disposition of revenues from gaming tax on OGLs:
a. 60% - implementation of Universal Health Care Act
b. 20% - Health Facilities Enhancement Program
c. 20% - attainment of the Sustainable Development Goals
17. All existing POGO entities shall submit to the BIR, on or before December 20, 2021, the Annex A and its attachments covering their foreign employees from January 1, 2021 to November 30, 2021.
18. All POGO entities shall use the appropriate Alphanumeric Tax Code for the remittance of their gaming tax and/or FWT, whichever is applicable.
19. A separate revenue issuance for the guidelines and procedures for tax filing and remittances shall be issued pending the availability of the eFPS to POGO entities.
20. A POGO entity enjoying incentives prior to the effectivity of R.A. No. 11534 shall continue to enjoy said incentives until the expiration of the transitory period or the expiration of the license, whichever comes earlier.
BIR CLARIFIES THE MANNER OF SUBMISSION OF BIR FORMS 2307 & 2316
NOVEMBER 24, 2021
Revenue Memorandum Circular (RMC) No. 117-2021 clarifies the manner of submission of BIR Form No’s. 2307 and 2316. The Circular clarifies that submission of the Certificates in DVD-R is not discontinued, but instead offers other modes or submission facilities, such as the electronic Audited Financial Statement (eAFS) System. Moreover, for the added convenience of the taxpaying public, the USB memory stick or other similar storage devices may be used for the submission of BIR Form No. 2307. Likewise, these devices, modes, and facilities may be availed for the submission of BIR Form Nos. 2304 and 2306.
BIR UPDATES THE LIST OF VAT-EXEMPT COVID-19 PRODUCTS
NOVEMBER 19, 2021
Revenue Memorandum Circular (RMC) No. 115-2021 publishes additions to the list of VAT-exempt drugs, vaccines and medical devices that are prescribed and directly used for COVID-19 treatment as endorsed by DOH. It supplements RMC No. 81-2021, which has become the controlling list of VAT-exempt COVID-19 products under Section 109 of the Tax Code.
BIR ON MONITORING & VERIFICATION OF THE TAX COMPLIANCE OF ONLINE SELLERS & SOCIAL MEDIA INFLUENCERS
OCTOBER 29, 2021
Revenue Memorandum Order (RMO) No. 29-2021, issued on October 29, 2021, directs BIR offices to monitor and verify the tax compliance of online merchants, social media influencers, and other businesses operating in digital platforms. Highlights include the creation of special tax force, verification of voluntary declarations by taxpayers through an exchange of information mechanism, issuance of Letter of Authority, and reporting requirements.
BIR ISSUES NEW VERSION OF e-BIR FORMS
OCTOBER 21, 2021
Revenue Memorandum Circular (RMC) No. 111-2021 circularizes the availability of Offline Electronic Bureau of Internal Revenue Forms (eBIRForms) Package Version 7.9.2. The updated package now includes the following January 2018 version:
● BIR Form No. 2552
● BIR Form No. 1600-VT
● BIR Form No. 1600-PT
● BIR Form No. 1707
● BIR Form No. 2200-C
BIR TAX ADVISORY ON EXTENDED TAX FILING
SEPTEMBER 9, 2021
Consistent with Revenue Memorandum Circular No. 91-2021, the BIR has advised that the filing of tax returns, and payment of taxes as well as submission of reports/attachments falling within the Enhanced Community Quarantine (ECQ) and/or Modified Enhanced Community Quarantine (MECQ) shall be extended by fifteen (15) calendar days from the lifting of ECQ and/or MECQ.
BIR CLARIFIES ISSUES RELATIVE TO THE VAT EXEMPTION OF CERTAIN MEDICINES & OTHER MEDICAL DEVICES FOR COVID-19
SEPTEMBER 1, 2021
Revenue Memorandum Circular (RMC) No. 99-2021, issued on September 1, 2021, clarifies issues relative to the VAT exemption of certain medicines and other medical devices for Covid-19 under Sections 109(1)(AA) and 109(1)(BB)(ii) of the 1997 Tax Code, as amended by Republic Act (R.A.) Nos. 10963 (TRAIN Law), 11467, and 11534 (CREATE Law).
Highlights include:
1. VAT exemption of medicines for diabetes, high cholesterol, hypertension, cancer, mental illness, tuberculosis, kidney diseases, drugs, and vaccines prescribed and directly used for COVID-19 treatment, and medical devices directly used for COVID-19 treatment shall take effect on the date of publication by the Food and Drug Administration of the consolidated list of VAT-exempt products, which was on June 17, 2021.
2. VAT exemption is exclusive only to the medicines and medical devices for COVID-19 with the corresponding dosage strength, dosage form, and route of administration in the consolidated list of VAT-Exempt Products.
3. Consolidated list of VAT-Exempt Products circularized through RMC No. 81-2021 should be the reference in determining whether a certain medicine or medical device is VAT-exempt or not.
4. Input VAT directly attributable to goods now classified as VAT-exempt may be allowed as part of cost. Likewise, for input VAT not attributed to VAT-exempt goods, only a ratable portion thereof shall be charged to cost.
5. Revenue Regulations (RR) No. 4-2021 is not to be confused with RR No. 18-2020 as the latter was anchored under R.A. Nos. 10963 and 11467, while the former was issued to implement the provisions of R.A. No. 11534.
6. When the VAT on the imported drugs or medicines has been claimed as an input tax credit in the monthly and quarterly VAT returns, a refund cannot be allowed.
BIR CLARIFIES THE IMPOSITION OF PENALTY ON FAILURE TO TRANSMIT SALES DATA
AUGUST 31, 2021
Operations Memorandum No. 50-2021 clarifies the proper penalty to be imposed for failure to transmit sales reports and other information generated by Cash Register Machines (CRMs) and Point-of-Sales (POS) Machines and/or any machine sales-generating receipt/invoice registered with the BIR.
Highlights include:
1. The penalty under Revenue Regulations (RR) No. 5-2005 shall be imposed for failure to transmit sales report and other information generated by CRMs and POS machines and/or any machine sales-generating receipt/invoice registered with the BIR, and not under Section 264-A of the 1997 Tax Code, as amended, as provided under Revenue Memorandum Circular (RMC) No. 72-2018. The penalty under Section 264-A of the same Code shall not be imposed until the BIR has established the “Bureau’s electronic sales reporting system” as provided under Section 237-A of the same Code.
2. Under RR No. 5-2005, any violation shall be considered as sufficient grounds for revocation of the taxpayer’s Permit to Use (PTU) CRM/POS machine and shall subject the concerned taxpayer to the penalty provided under Section 250 of the 1997 Tax Code, as amended. For this purpose, failure to submit a sales report per machine shall constitute one failure.
3. Additional penalty is imposed under Revenue Memorandum Order (RMO) No. 12-2012. Taxpayers who will be found not submitting the required monthly sales report for three (3) consecutive months per machine shall be subjected to the following sanctions in addition to the penalty imposed under RR No. 05-2005:
Offense Consequence
1st Reminder Letter
2nd Machine Inspection/Post Evaluation
3rd Revocation of PTU
4. Violations of Section 250 of the 1997 Tax Code, as amended, may be subject to compromise penalty under Annex “A” of RMO No. 7-2015.
BIR CLARIFIES THE TAXATION OF SOCIAL MEDIA INFLUENCERS
AUGUST 16, 2021
Revenue Memorandum Circular (RMC) No. 97-2021 clarifies the tax obligations of social media influencers, individuals, or corporations, in relation to any income received by them.
Highlights include the following:
1. The term social media influencers include all taxpayers, individuals, or corporations, receiving income, in cash or in kind, from any social media sites and platforms in exchange for services performed.
2. Unless exempted pursuant to the provisions of the 1997 Tax Code, as amended, social media influencers shall be liable to Income Tax and Percentage or Value-Added Tax.
3. Social media influencers other than corporations and partnerships are classified for tax purposes as self-employed individuals or persons engaged in trade or business as sole proprietors, and therefore, their income is generally considered business income.
4. Social media influencers whose gross sales or gross receipts and other non-operating income do not exceed the VAT threshold of Php 3,000,000 shall have the option to avail of the 8%.
5. Social media influencers shall withhold required creditable/expanded withholding tax, final tax on compensation of employees, and other withholding taxes, if applicable.
BIR CLARIFIES THAT PARTIAL RENUNCIATION OF SHARE FROM INHERITANCE IS SUBJECT TO THE DONOR’S TAX
AUGUST 10, 2021
Revenue Memorandum Circular (RMC) No. 94-2021 clarifies that the general renunciation of an heir of his share from inheritance is not taxable. However, in the case of partial renunciation, wherein the heir who partially renounces his share will receive a share lower than the value of what should have been his rightful share, the difference between the supposed share and the share received, as a result of partial renunciation is subject to donor’s tax.
BIR EXTENDS THE DEADLINE FOR THE FILING OF POSITION PAPERS, PROTESTS, DOCUMENTS & OTHER SIMILAR LETTERS & CORRESPONDENCES & FILING OF THE VAT REFUND FOR TAXPAYERS COVERED BY ECQ & MECQ DECLARATION
AUGUST 9, 2021
Revenue Memorandum Circular (RMC) No. 92-2021 extends the deadline for filing position papers, protests, and documents, in relation to the ongoing Bureau of Internal Revenue (BIR) audit and VAT refund applications falling due under the declaration of Enhanced Community Quarantine (ECQ) and Modified ECQ (MECQ) in the National Capital Region (NCR) and other areas of the country.
Face-to-face meetings of BIR officials and employees with taxpayers and/or their authorized representatives in the areas covered are deferred and rescheduled until the lifting of ECQ and/or MECQ.
BIR SUSPENDS THE RUNNING OF THE STATUTE OF LIMITATIONS ON ASSESSMENTS & COLLECTIONS OF TAXES IN AREAS UNDER ECQ & MECQ
AUGUST 9, 2021
Revenue Memorandum Circular (RMC) No. 93-2021 suspends the running of Statute of Limitations for assessment and collection of deficiency taxes in affected areas under ECQ and MECQ for sixty (60) days. The same will also apply in case of any future declarations of ECQ and/or MECQ by the government.
BIR ISSUES IRR ON THE EXTENDED AVAILMENT PERIOD OF ESTATE TAX AMNESTY UNTIL JUNE 14, 2023 & AMENDS THE PREVIOUS PROCESSES OF AVAILMENT
AUGUST 4, 2021
Revenue Regulations (RR) No. 17-2021 provides for the Implementing Rules and Regulations (IRR) on the extension of the availment period of Estate Tax Amnesty until June 14, 2023, under Republic Act (R.A.) No. 11569, amending R.A. 11213. Likewise, it amends certain processes of availment of estate tax amnesty pursuant to RR No. 6-2019.
Highlights of the amendment are as follows:
a. Failure to submit the Estate Tax Amnesty Return (ETAR) and Acceptance Payment Form (APF) with proof of payment, together with the complete documentary requirements, to the concerned RDO until June 14, 2023, is equivalent to non-availment of the Estate Tax Amnesty.
b. Within five (5) working days from the receipt of ETAR, APF, and other required documents, the concerned RDO shall endorse the APF for payment to the Authorized Agent Banks (AABs) or Revenue Collection Officers (RCOs). Only those duly endorsed APF shall be presented to and received by the AAB or RCO.
c. Proof of settlement of the estate, whether judicial or extrajudicial, is not required in the filing of the ETAR if it is not yet available at the time of filing. No electronic Certificate Authorizing Registration (eCAR) shall be issued unless such proof is presented and submitted to the concerned RDO.
d. One eCAR shall be issued per real property until such time that the eCAR system is already capable of generating one (1) eCAR for all properties covered by a single transaction.
e. eCAR shall only be issued upon submission of proof of estate settlement. If these documents include properties not indicated in the filed ETAR, the properties shall be excluded from the eCAR, unless additional estate tax amnesty payment shall be made within the amnesty period. Otherwise, the additional estate tax to be paid for the additional properties indicated in the Extra Judicial Settlement or Court Order shall be subject to the applicable estate tax rate, including interests and penalties.
BIR AMENDS THE MANNER OF SUBMISSION OF BIR FORMS 2307 & 2316
AUGUST 4, 2021
Revenue Regulations (RR) No. 16-2021 amends the manner of submission of the Certificate of Creditable Tax Withheld at Source (BIR Form 2307) and Certificate of Compensation Payment (BIR Form 2316) to the Bureau of Internal Revenue (BIR). Only scanned copies shall be accepted regardless of whether or not registered with the Large Taxpayers Services (LTS).
BIR EXTENDS THE DEADLINE OF FILING OF RETURNS FOR TAXPAYERS UNDER ECQ & MECQ
AUGUST 4, 2021
Revenue Memorandum Circular (RMC) No. 91-2021 extends the tax filing and payment deadlines falling within the Enhanced Community Quarantine (ECQ) and Modified Enhanced Community Quarantine (MECQ) period. Specifically, the tax deadlines for the period August 6, 2021 to August 20, 2021 are extended for fifteen (15) calendar days from August 20, 2021.
BIR DEFERS THE IMPLEMENTATION OF RR NO. 9-2021, WHICH IMPOSED THE 12% VAT ON TRANSACTIONS PREVIOUSLY SUBJECTED TO 0% VAT UNDER TRAIN LAW
JULY 28, 2021
Revenue Regulations (RR) No. 15-2021, issued on July 28, 2021, defers the implementation of RR No. 9-2021 which imposed the 12% Value-Added Tax (VAT) on transactions previously subjected to 0% VAT, such as the sale of goods or properties, sale of services, and use or lease of properties under Section 106 (A) (2) (a) (3), (4), and (5) and Section 108 (B) (1) and (5) of the 1997 Tax Code, as amended. The deferment is in consideration of the continuing pandemic and the impact on the export industry.
BIR CIRCULARIZES THE NEW LIST OF TOP WITHHOLDING AGENTS & THOSE FOR DELETION FROM THE EXISTING LIST EFFECTIVE AUGUST 1, 2021
JULY 16, 2021
Revenue Memorandum Circular (RMC) No. 88-2021 circularizes the lists of withholding agents required to deduct and remit the 1% or 2% Creditable Withholding Tax (CWT) for the purchase of goods and services under Revenue Regulations No. 31-2020. The obligation to deduct and remit the 1% and 2% CWT shall continue, commence, or cease, effective August 1, 2021. Any taxpayer not found in the published list of TWA is deemed excluded.
BIR CIRCULARIZES THE IRR ON INCENTIVES PROVISIONS OF CREATE LAW
JULY 12, 2021
Revenue Memorandum Circular (RMC) No. 83-2021 circularizes the Implementing Rules and Regulations (IRR) on the Tax Incentives Provisions granted under Republic Act (R.A.) No. 11534, otherwise known as the “Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.”
BIR CLARIFIES THAT SCREENSHOT IN LIEU OF ACKNOWLEDGMENT E-MAIL ON eAFS WILL SUFFICE
JULY 7, 2021
Revenue Memorandum Circular (RMC) No. 82-2021 provides that in lieu of the confirmation/acknowledgment email on scanned copies of documents uploaded to eAFS, copies of screenshots from the said system clearly showing the details contained in each screenshot, as illustrated in the Circular, are now considered sufficient proof of BIR submission.
BIR DELEGATES TO THE LEGAL SERVICE ASSISTANT COMMISSIONER THE APPROVAL OF CERTAIN REQUESTS/MATTERS
JULY 7, 2021
Revenue Delegation Authority Order (RDAO) No. 3-2021 delegates to the Legal Service Assistant Commissioner the authority to act, approve, or sign requests or matters involving:
1. Extension of time to file estate tax returns;
2. Extension of time to pay the estate tax due;
3. Extension of time to submit photocopies of the TCT/CCT/Shares of Stock that bear the annotation of the substituted basis of the real properties/shares of stock transferred/received pursuant to Section 40(C)(2) of the 1997 Tax Code, as amended, as duly certified by the Registry of Deeds/Corporate Secretary;
4. Matters declared as “No-Ruling Areas”; and
5. Non-compliance with any of the requirements under Revenue Memorandum Order (RMO) No. 9-2014.
BIR RELEASES THE LIST OF VAT-EXEMPT MEDICAL PRODUCTS PURSUANT TO THE CREATE LAW
JULY 6, 2021
Revenue Memorandum Circular (RMC) No. 81-2021 circularizes the list of Value-Added Tax (VAT)-exempt medical products pursuant to Republic Act (R.A.) No. 11534, otherwise known as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.
It may be recalled that under the CREATE Law, the following sales or importation activities are exempt from VAT:
a. Beginning January 1, 2020-drugs for diabetes, high cholesterol, and hypertension
b. Beginning January 1, 2021-drugs for cancer, mental illness, tuberculosis, and kidney diseases
c. Beginning January 1, 2021 until December 31, 2023-drugs, vaccines, and medical devices used for COVID-19 treatment
BIR FURTHER SUSPENDS THE STATUTE OF LIMITATIONS DUE TO THE IMPLEMENTATION OF ECQ & MECQ IN SELECTED AREAS
JUNE 29, 2021
Revenue Memorandum Circular (RMC) 80-2021 provides further clarification on the suspension of the Statute of Limitations on assessment and collection of taxes due to the declaration of Enhanced Community Quarantine (ECQ) and Modified Enhanced Community Quarantine (MECQ) in Metro Manila, Bulacan, Cavite, Laguna, and Rizal (NCR Plus), and other applicable areas. The suspension provides the Bureau additional days, equivalent to the period under ECQ and MECQ, plus 60 days after the lifting of such, to issue Assessment Notices, Warrants of Distraint and/or Levy, Warrants of Garnishment, and to enforce the collection of deficiency taxes against taxpayers covered by the aforementioned quarantine declaration. The computation follows after the extended due dates circularized by RMC No. 136-2020.
BIR ISSUES A TAX ADVISORY THAT VAT ZERO-RATING APPLICATION OF THE SALE OF GOODS & SERVICES TO RBEs SHALL NO LONGER BE ACCEPTED & PROCESSED
JUNE 26, 2021
The BIR has announced that the filing of an application for Value-Added Tax (VAT) zero-rating on the sale of goods and services to Registered Business Enterprises (RBEs), which were granted incentives by Investment Promotion Agencies (IPAs) shall no longer be accepted and processed starting June 28, 2021, due to the effectivity of Revenue Regulations (RR) No. 9-2021. Applications filed before the effectivity of RR No. 9-2021 shall, however, be processed but shall only be effective until June 27, 2021, if approved. Lastly, for applications that have already been approved, the effectivity shall only be until June 27, 2021, or the effective date stated in the approved applications, whichever is earlier.
BIR IMPLEMENTS THE PENALTY PROVISIONS OF THE TRAIN LAW
JUNE 23, 2021
Revenue Regulations (RR) No. 13-2021 implements the penalty provisions of Sections 76, 77, 78, 79, and 80 of Republic Act No. 10963, otherwise known as the Tax Reform for Acceleration and Inclusion (TRAIN) Law. It may be recalled that under the TRAIN Law, the following violations shall be imposed with civil penalties and/or imprisonment:
1. Willful attempt to evade or defeat any tax imposed under the Tax Code
2. Violations related to the printing of receipts or invoices
3. Failure to transmit sales data to the Bureau’s electronic sales reporting system
4. Purchasing, using, possessing, selling or offering to sell, installing, transferring, updating, upgrading, keeping or maintaining sales suppression devices
5. Selling, trading, delivering, distributing, or transporting unmarked fuel in a commercial quantity held for domestic use
6. Causing the removal of the official fuel marking agent from marked fuel, and the adulteration or dilution of fuel intended for sale to the domestic market, or knowing possession, storage, transfer, or offer for sale of fuel obtained as a result of such removal, adulteration or dilution
7. Inserting, placing, adding, or attaching through any overt or covert act, whatever quantity of any unmarked fuel, counterfeit additive or chemical in the person, house, effects, inventory, or in the immediate vicinity of an innocent individual for the purpose of implicating, incriminating, or imputing the commission of any violation of offenses related to fuel marking
8. Making, selling, using, or possessing fuel markers without express authority
9. Making, importing, selling, using, or possessing counterfeit fuel markers
10. Causing another person or entity to commit any of the acts in numbers 8 or 9
11. Causing the sale, distribution, supply, or transport of legitimately imported, in-transit, manufactured or procured controlled precursors and essential chemicals, in diluted, mixtures or in concentrated form, to any person penalized in numbers 5, 6, 8, 9, and 10, including but not limited to packaging, repackaging, labeling, relabeling or concealment of such transaction through fraud, destruction of documents, fraudulent use of permits, misdeclaration, use of front companies or mail fraud
BIR AMENDS CERTAIN PROVISIONS ON THE IMPOSITION OF EXCISE TAX ON REMOVAL OF SWEETENED BEVERAGES PRODUCTS FOR EXPORT
JUNE 17, 2021
Revenue Regulations (RR) No. 10-2021 amends certain provisions of RR No. 20-2018. It provides that the removal of sweetened beverages products intended for export shall be subject to the payment of excise tax by the manufacturer due on every removal thereof from the place of production. After the payment of tax, the manufacturer, at his option, may file a claim for excise tax credit/refund or avail of a claim for a product replenishment scheme, subject to the following terms and conditions:
a. A permit shall be per shipment secured from the BIR Office where the manufacturer is registered or required to be registered as an excise taxpayer before the product is removed from the place of production.
b. The products removed from the place of production shall be directly transported, loaded aboard the international shipping vessel or carrier, and shipped directly to the foreign country of destination without returning to the Philippines.
c. Proof of exportation shall be submitted within thirty (30) days from the actual date of exportation.
d. The prescribed phrase "EXPORTED FROM THE PHILIPPINES" is printed on each label.
BIR CLARIFIES CERTAIN PROVISIONS OF RMO NO. 14-2021 ON NEW POLICIES & GUIDELINES ON SECURING OF TTRA
JUNE 15, 2021
Revenue Memorandum Circular (RMC) No. 77-2021 clarifies certain provisions of Revenue Memorandum Order (RMO) No. 14-2021 relative to the new policies and guidelines in securing a Tax Treaty Ruling Application (TTRA).
Highlights include:
1. Only natural or juridical persons, who are residents of one or both of the Contracting States, may avail of treaty benefits.
2. Failure to submit the Tax Residency Certificate (TRC) duly issued by a competent authority of the treaty partner would result in the denial of the non-resident’s claim.
3. Denial based on the issue of residency will not contravene the pronouncement of the Supreme Court in the case of Deutsche Bank AG Manila Branch vs. Commissioner of Internal Revenue (G.R. No. 188550, August 19, 2013). The issue, in that case, was premised on the non-resident's failure to file a TTRA within the 15-day period prescribed under RMO No. 1-2000.
4. Rulings involving the application and interpretation of tax treaties should originate from the International Tax Affairs Division (ITAD).
5. If the non-resident submitted to the income payor a TRC and the appropriate BIR Form No. 0901 before the payment of income, the income payor may apply the provisions of the applicable treaty; provided that all the conditions for the availment, other than residency, have been satisfied. Otherwise, the regular rates imposed under the Tax Code should be applied.
6. The withholding agent is required to file a Request for Confirmation (RFC) if the non-resident's income was not subjected to tax in the Philippines under the relevant tax treaty.
7. If the treaty rate was applied to the non-resident's income, the income payor, domestic or foreign, should be the one to file the RFC with the ITAD. The income payor is not prevented however from authorizing the non-resident or any other person to file such a request for and on its behalf, provided that the latter is equipped with a Special Power of Attorney (SPA).
8. RFC with complete documentary requirements shall be filed by the withholding agent, domestic or foreign, on or before the dates prescribed below:
a. Capital gains-at any time after the transaction but shall not be later than the last day of the fourth (4th) month following the close of the taxable year when the income is paid or when the transaction is consummated.
b. Other types of income-at any time after the close of the taxable year but not later than the last day of the fourth (4th) month following the close of such taxable year when the income is paid or becomes payable, or when the expense/asset is accrued or recorded in the books, whichever comes first.
9. One consolidated RFC per non-resident income recipient shall be filed, regardless of the number and type of income payments made during the year.
10. One original and authenticated TRC shall be submitted to each income payor per year. Alternatively, a certified true copy of the original may be submitted to other payors of income if the original copy is no longer available, with a notation as to whom the original copy was previously submitted.
11. The same rule applies to the proof of establishment or incorporation, Certificate of Non-registration or License to Do Business in the Philippines duly issued by the Securities and Exchange Commission, and the Certificate of Business Registration/Presence duly issued by the Department of Trade and Industry.
12. The non-resident, or its authorized representative, should file a TTRA with complete documentary requirements and a claim for refund at any time after the payment of the withholding tax if the regular rate under the Tax Code was applied to the income instead of the treaty rates.
13. Annual updating of long-term contracts is not mandatory.
14. Applications with incomplete documents will no longer be accepted.
15. All filers, other than the nonresident income recipient or withholding agent, are required to present a notarized SPA when applying with ITAD.
16. The foreign enterprise may submit the Audited Financial Statements (AFS) of the permanent establishment (PE) to prove that the income is not effectively connected with its PE in the Philippines.
17. The best proof of arm's length transfer prices for controlled transactions is the Transfer Pricing Documentation (TPD) of the non-resident creditor.
18. The BIR prefers the Audited Interim FS when computing the real property interest of the issuing domestic corporation at the time of the transaction.
19. There will be no automatic denial for the failure of the filer to file RFC within the prescribed period.
20. In meritorious cases, the non-resident or withholding agent may be granted an extension within which to submit the required documents, but in no case shall it exceed thirty (30) days.
21. All taxpayers with pending TTRAs will still receive a "Final Notice to Submit Additional Documents" despite receiving notice before the effectivity of the new RMO and will be given three (3) months from receipt to submit the required documents.
22. If the RFC or TTRA is approved, the BIR will issue a Certificate of Entitlement to Treaty Benefit (COE) instead of the usual BIR Ruling.
23. If income payments in 2020 and prior years with no TTRA or Certificate of Residence for Tax Treaty Relief (CORTT) Form filed were subjected to treaty rates, the withholding agent has until the last working day of 2021 to file an RFC with complete documentary requirements.
24. A certified true copy of AFS as of the taxable year immediately preceding the declaration date, which was duly filed with the BIR and SEC, must accompany each RFC or TTRA for dividends.
25. TRC issued by the tax authority of the US confirming that all the trust beneficiaries are residents of that state would suffice.
BIR CLARIFIES & CORRECTS THE EARLIER ILLUSTRATION ON TAX OF ROHQ & PROPRIETARY EDUCATIONAL INSTITUTIONS UNDER CREATE
JUNE 15, 2021
Revenue Memorandum Circular (RMC) No. 76-2021 clarifies the earlier illustration for Proprietary Educational Institution and Regional Operating Headquarters (ROHQ) under Revenue Regulations (RR) No. 5-2021. The income tax due and the gross income were inadvertently written to be in the amount of Php 1,000,000 and Php 558,500,000 instead of the correct amount of Php 100,000 and Php 58,500,000, respectively. It likewise clarifies that the 1% income tax rate for Proprietary Educational Institutions and the 1% Minimum Corporate Income Tax for ROHQ shall be imposed only for the period July 1, 2020 until June 30, 2023, and January 1, 2022 to June 30, 2023, respectively.
BIR IMPLEMENTS THE CHANGES ON TRANSACTIONS PREVIOUSLY TAXED AT 0% VAT & NOW SUBJECT TO 12% VAT PURSUANT TO THE TRAIN LAW
JUNE 11, 2021
Revenue Regulations (RR) No. 9-2021 implements the changes on the transactions previously taxed at 0% Value-Added Tax (VAT) and now subject to 12% VAT pursuant to Republic Act (R.A.) No. 10963, otherwise known as the “TRAIN Law.”
The BIR has pronounced the satisfaction of conditions set by the TRAIN Law. The conditions are as follows:
a. The successful establishment and implementation of an enhanced VAT refund system that grants refunds of creditable input tax within 90 days from the filing of the VAT refund application; and
b. All pending VAT refund claims as of December 31, 2017, shall be fully paid in cash by December 31, 2019.
With the satisfaction of the conditions above, the TRAIN Law provides that the transactions enumerated below are now subject to the 12% VAT and no longer qualified for 0% VAT:
a. Sale of raw materials or packaging materials to a nonresident buyer for delivery to a resident local export-oriented enterprise to be used in the manufacturing, processing, packing, or repacking in the Philippines of the said buyer's goods and paid for in an acceptable foreign currency;
b. Sale of raw materials or packaging materials to an export-oriented enterprise whose export sales exceed 70% of total annual production;
c. Those considered export sales under Executive Order (EO) No. 226, otherwise known as the “Omnibus Investment Code of 1987” and other special laws;
d. Processing, manufacturing, or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency; and
e. Services performed by subcontractors and/or contractors in processing, converting, or manufacturing goods for an enterprise whose export sales exceed seventy percent (70%) of total annual production.
BIR AMENDS RR NO. 4-2021 ON THE SALE OF REAL PROPERTY & PERCENTAGE TAX UNDER CREATE
JUNE 11, 2021
Revenue Regulations (RR) No. 8-2021 amends certain provisions of RR No. 4-2021 regarding the Value-Added Tax (VAT)-exempt threshold on the sale of real property and percentage tax provisions under Republic Act (R.A.) No. 11534, otherwise known as “CREATE Law.”
Highlights include:
a. Under the TRAIN Law, beginning January 1, 2021, VAT exemption on the sale of real properties shall only apply to the following: (a) sale of real properties not primarily held for sale to customers or held for lease in the ordinary course of trade or business; (b) sale of real property utilized for socialized housing; (c) sale of house and lot and other residential dwellings with a selling price of not more than Php 2,000,000 as adjusted to Php 3,199,200 in 2011 using 2010 Consumer Price Index.
b. Importation of certain goods to fight COVID-19 shall not be subject to the requirement of the issuance of Authority to Release Imported Goods (ATRIG).
c. Refund of overpaid percentage tax, as a result of the decrease of the tax rate from 3% to 1% starting July 1, 2020, until the effectivity of RR No. 4-2021, will be allowed for taxpayers who shifted from non-VAT to VAT-registered status or taxpayers who opted to avail the 8% income tax rate at the beginning of Taxable Year 2021.
BIR CLARIFIES ISSUES RELATIVE TO THE TEMPORARY REDUCTION OF PERCENTAGE TAX RATE UNDER CREATE LAW
MAY 24, 2021
Revenue Memorandum Circular (RMC) No. 67-2021 clarifies certain issues relative to the temporary reduction of Percentage Tax rate under CREATE Law.
Highlights include:
a. Section 116 of the Tax Code applies to both corporate taxpayers and self-employed individuals and professionals whose gross sales or receipts do not exceed the Php 3 Million threshold, except for cooperatives and self-employed individuals and professionals availing of the 8% income tax rate.
b. The reduced 1% Percentage Tax rate covers persons exempt from Value-Added Tax (VAT) under Section 109(1)(CC) of the 1997 Tax Code, as amended, and who are not VAT-registered persons because they have not reached the Php 3 Million VAT threshold.
c. Taxpayers who filed their 3rd and 4th quarter Percentage Tax Returns (PTR) for 2020 and those who may have filed their 1st Quarter PTR for 2021 using the 3% rate are required to amend their duly filed PTRs using the 1% rate to reflect the overpaid taxes.
d. Amendment of PTRs is not subject to penalty for affected taxpayers which/who will carry over the overpaid Percentage Tax.
e. Taxpayer is already precluded from claiming a tax refund for the overpayment.
f. Percentage taxpayers who have overpaid taxes because of reduced tax rate are allowed for a tax refund if:
1. The taxpayer shifted from non-VAT to VAT-registered; or
2. The taxpayer has opted to avail the 8% income tax rate at the beginning of Taxable Year (TY) 2021.
g. For manual filers who shall carry over the overpaid amount, write the phrase “To be Carried Over” on the return.
h. For eFPS and eBIRForms filers, the option “To be Issued Tax Credit Certificate” shall be marked as a workaround procedure to proceed with the electronic filing.
i. If the percentage taxpayers will carry over the overpayment but has inadvertently marked either the tax refund or issuance of Tax Credit Certificate box on the return, the Bureau will presume that the overpaid amount will be carried over. Once the overpayment has been carried forward, the option initially chosen shall be automatically superseded.
j. Amended PTRs showing the overpayment shall be the basis for the carry-over.
k. Withholding agent/government agency shall be responsible for refunding the overpaid taxes of individuals under the Job Order or Service Contract Agreement, who availed of substituted filing on Percentage Tax. Individual contractors claiming for the refund shall issue authorization and shall surrender the Certificates of Withholding of Percentage Tax (BIR Form No. 2306) to the withholding agent/government agency. The withholding agent/government agency shall carry over the over-remitted taxes to the next succeeding quarter/s attaching thereto the authorization and the Certificate (BIR Form 2306) from the payee.
For Percentage Taxpayers who are not under substituted filing, the overpayment shall be carried forward to the succeeding quarter/s assuming that the Percentage Taxpayer has not shifted from non-VAT to VAT registration status or did not avail of the 8% income tax rate.
l. Government, its instrumentalities, LGUs, SUCs, GOCCs, and GFIs shall amend the previously filed returns, including the respective Alphalists, if any, but the reduction or resulting overpayment shall only be to the extent of the amount to be refunded.
m. Existing revenue issuances on Percentage Tax prior to the CREATE Law are automatically repealed.
n. If the whole amount of 3% Percentage Tax has been claimed as a deductible expense for purposes of computing the income tax due, the taxpayer shall no longer be allowed to carry over or apply for a tax refund/tax credit certificate of the alleged overpaid Percentage Tax.
BIR RELEASES THE AVAILABILITY OF BIR FORM NOS. 1702Q JANUARY 2018 (ENCS) IN THE ELECTRONIC FILING & PAYMENT SYSTEM (eFPS) & 1701Qv2008C IN THE ELECTRONIC BIR FORMS (eBIRFORMS)
MAY 24, 2021
Revenue Memorandum Circular (RMC) No. 66-2021 circularizes the availability of the following versions of BIR Form No. 1702Q in relation to the implementation of CREATE Law.
1. BIR Form No. 1702Q January 2018 (ENCS) is now available in eFPS, incorporating the reduced rates pursuant to CREATE Law.
2. BIR Form No. 1702Qv2008C January 2018 version is not yet available; However, the 2008 version has been modified.
3. Non-individual eFPS and eBIRForms users may now file and pay their Quarterly Income Tax Return using the eFPS facility or Offline eBIRForms Package v7.9.1, respectively.
BIR PRESCRIBES THE GUIDELINES IN THE FILING OF QUARTERLY PERCENTAGE TAX RETURN STARTING ON THE QUARTER ENDING JULY 31, 2020, AS A RESULT OF THE IMPLEMENTATION OF CREATE LAW
MAY 24, 2021
Revenue Memorandum Circular (RMC) No. 65-2021 prescribes the guidelines in the filing of Quarterly Percentage Tax Return/BIR Form No. 2551Q as a result of the implementation of CREATE Law on transitory reduction of percentage tax from 3% down to 1%.
BIR CLARIFIES CERTAIN PROVISIONS OF RR NO. 5-2021 RELATIVE TO THE IMPLEMENTING RULES & REGULATIONS OF CREATE LAW ON CORPORATE INCOME TAX
MAY 17, 2021
Revenue Memorandum Circular (RMC) No. 62-2021 clarifies certain provisions of RR No. 5-2021 relative to corporate income taxation.
Highlights include:
1. Total assets of not more than Php 100M, exclusive of the land as one of the conditions to qualify for the reduced corporate income tax rate of 20%, should be net of depreciation and allowance for bad debts, if any.
2. If the cost of the land's acquisition is reflected in the Financial Statements, that cost shall be excluded in determining the total assets; Otherwise, the fair market value of the land shall be excluded in the computation.
3. The value of the land, which shall be excluded, is limited to that land where the business entity's office or plant and equipment is situated during the taxable year. Land being held primarily for sale or held for investment purposes should not be excluded in the determination of the business entity's total assets.
4. For land, if only a portion of the floor area of the building is devoted to the entity's office and the rest of the usable floor areas are on a lease, the land excluded in the total assets would only be the percentage of the floor area devoted to the entity's office multiplied with the total value of the land.
5. If the business is a banana plantation or lease, the value of the land which shall be excluded is limited to that land where the business entity's office or plant and equipment is situated during the taxable year.
6. Private educational institutions distributing dividends to shareholders are taxable at 25% or 20% Regular Corporate Income Tax, whichever is applicable.
7. CREATE law did not prescribe a new tax treatment for proprietary educational institution and private hospital; it merely reduced the tax rate.
8. Taxable income under Section 5 of RR No. 5-2021 pertains to unutilized dividends.
9. Tax treatment for dividends received by Domestic Corporation from a Resident Foreign Corporation will depend on the sources of income of the Resident Foreign Corporation, whether within the Philippines or not.
10. The reckoning date of the determination that it is the corporation's fourth (4th) year of operation is the fourth (4th) taxable year immediately following the year in which such corporation commenced its business operations.
11. The CREATE Law provides no distinction as to which type of industry can claim the additional allowable deduction of 1/2 of the value of labor training expenses; however, the prescribed requirements must be complied.
BIR TAX ADVISORY ON FILING & PAYMENT OF FINAL TAX UNDER CREATE LAW
APRIL 29, 2021
The BIR has issued a Tax Advisory that the corresponding adjustments to the Quarterly Remittance Return of Final Income Taxes Withheld (BIR Form No. 1601-FQ) in eBIRForms Package v7.9 cannot be completed in time for the coming deadline for its filing and payment of the tax on April 30, 2021. Thus, all mandated users of eBIRForms, whose nature of income was affected by such amendments brought about by CREATE Law, shall use Payment Form No. 0605 in paying the final tax due.
BIR TAX ADVISORY ON THE FILING OF AMENDED ITR & REQUIRED ATTACHMENTS
APRIL 28, 2021
The BIR has issued a Tax Advisory on the following areas of concern relative to the filing of the amended ITR and required attachments:
a. Amendment of Annual Income Tax Return (ITR), covering the year ended December 31, 2020, shall be filed on or before May 15, 2021.
b. Submission of required attachments to electronically filed amended Annual ITR shall be submitted on or before May 30, 2021, to the RDO where the taxpayer is registered or through the Electronic Audited Financial Statements (eAFS) system.
c. No penalty shall be imposed for non-submission of attachments to earlier filed ITR but later amended on or before May 15, 2021.
d. Taxpayers who electronically filed a tentative ITR on or before April 15, 2021, without the attachment, are given until May 30, 2021, to submit the required attachments to the amended ITR.
e. Taxpayers who electronically filed the tentative ITR with the attachment on or before April 15, 2021, but later decide to amend as a result of the correction of tax rates used, need not resubmit the same documents. If the reason is other than the correction of tax rates, and it has resulted in revisions of previously submitted documents, attachments shall be submitted on or before May 30, 2021.
BIR CIRCULARIZES THE UPDATED LIST OF BIR FORMS & AVAILABLE PLATFORMS
APRIL 27, 2021
Revenue Memorandum Circular (RMC) 55-2021 circularizes the updated list of BIR Forms and available platforms to access.
BIR CLARIFIES CERTAIN PROVISIONS OF RR NO. 34-2020 ON THE SUBMISSION OF BIR FORM 1709 & TPD
APRIL 27, 2021
Revenue Memorandum Circular (RMC) No. 54-2021 clarifies certain provisions of Revenue Regulations (RR) No. 34-2020 regarding the submission of BIR Form No. 1709 (RPT Form) and the preparation of Transfer Pricing Documentation (TPD). The circular clarifies the following: (1) who are required to accomplish and file a Related-Party Transactions (RPT) Form; (2) whether tax-exempt corporations are required to file an RPT Form; (3) materiality threshold for reportable RPT; and (4) required attachments when filing the RPT Form. As clarified, a taxpayer is required to file an RPT Form if the following conditions are present: (1) taxpayer is required to file an Annual Income Tax Return (AITR); (2) taxpayer has transactions with a domestic or foreign related party during the covered taxable period; and (3) taxpayer falls under any of the categories enumerated in Section 2 of Revenue Regulations (RR) No. 34-2020. Also, tax-exempt corporations are required to file only if they fall under Sections 2(a), 2(c), or 2(d) of RR No. 34-2020. Likewise, the materiality thresholds are only relevant in determining those who are required to prepare a TPD. Further, the TPD and other supporting documents shall no longer be attached to the RPT Form but shall instead be made available during future audits, citing the last paragraph of RR No. 34-2020.
BIR TAX ADVISORY ON THE FILING OF AMENDED ITR & REQUIRED ATTACHMENTS
APRIL 18, 2021
The BIR has issued a Tax Advisory on the following areas of concerns relative to the filing of the amended ITR and required attachments:
a. Amendment of Annual ITR covering the year ended December 31, 2020 shall be filed on or before May 15, 2021.
b. Required attachments to electronically filed amended Annual ITR shall be submitted on or before May 30, 2021, to the RDO where the taxpayer is registered or through the use of Electronic Audited Financial Statements (eAFS) system.
c. No penalty shall be imposed for non-submission of attachments to earlier filed ITR but later amended on or before May 15, 2021.
d. Taxpayers who electronically filed tentative ITR on or before April 15, 2021, without the attachment, are given until May 30, 2021 to submit the required attachments to the amended ITR.
e. Taxpayers who electronically filed the tentative ITR with the attachment on or before April 15, 2021, but later decide to amend as a result of the correction of tax rates used, need not resubmit the same documents. If the reason is other than the correction of tax rates, and it has resulted in revisions of previously submitted documents, attachments shall be submitted on or before May 30, 2021.
BIR TAX ADVISORY ON THE FILING OF AITR & AMENDMENTS
APRIL 18, 2021
The BIR has advised that the Annual ITR filed on or before the set deadline may be amended not later than May 15, 2021, without the imposition of penalties in case of additional payment. For overpayment of taxes as a result of early filing and payment, taxpayer may opt to refund or carry over as credit in the succeeding period. The required attachments must be submitted within fifteen (15) days from the deadline of the filing or date of filing, whichever comes later. If the taxpayer subsequently filed the amended returns on the prescribed date, attachments shall likewise be submitted within 15 days from the date of the filing of amended returns or not later than May 30, 2021.
BIR PRESCRIBES ADDITIONAL GUIDELINES ON PERA
APRIL 14, 2021
Revenue Regulation (RR) No. 6-2021 prescribes the submission of mandatory annual and quarterly reports and an alphabetical list of Personal Equity and Retirement Account (PERA) contributors. The PERA-Tax Credit Certificate (TCC), which represents 5% of the total amount of qualified PERA contributions made in a year, must be filed online through the PERASys by the PERA Administrator within sixty (60) days from the close of the calendar year. The said certificate shall be used for the payment of income tax liabilities of qualified employees, self-employed contributors, as well as qualified overseas Filipino contributors. The regulations also prescribe the corresponding penalties for early withdrawal of the PERA contribution.
BIR CLARIFIES THE RUNNING OF THE STATUTE OF LIMITATIONS DURING ECQ
APRIL 14, 2021
Revenue Memorandum Circular (RMC) No. 52-2021 clarifies that the running of the Statute of Limitations on the assessment and collection enforcement shall be suspended sixty (60) days after lifting of the Enhanced Community Quarantine (ECQ). This means that all prescribing assessments, issuances, and service of assessments notices are suspended in areas under ECQ for the meantime.
BIR TAX ADVISORY ON THE FILING OF AITR & AMENDMENTS
APRIL 14, 2021
In an Advisory, the BIR advised the public that the Annual Income Tax Returns (ITR) filed on or before the set deadline may be amended not later than May 15, 2021, without the imposition of penalties in case of additional payment. For overpayment of taxes due to the early filing and payment, a taxpayer may opt to refund the taxes or carry over as credits in the succeeding period. The required attachments must be submitted within fifteen (15) days from the deadline of the filing or date of filing, whichever comes later. If the taxpayer subsequently filed the amended returns on the prescribed date, attachments shall likewise be submitted within 15 days from the date of the filing of amended returns or not later than May 30, 2021.
BIR ISSUES IRR IMPLEMENTING THE TAX INCENTIVE PROVISIONS OF COVID-19 VACCINATION PROGRAM ACT OF 2021
APRIL 8, 2021
Revenue Regulations (RR) No. 1-2021, issued on April 8, 2021, implements the tax incentives and fee privileges exempting the government or any of its political subdivisions, as well as private entities from Customs Duties, Value-Added Tax (VAT), Excise Tax, Donor’s Tax, and other fees for the procurement, importation, donation, storage, transport, deployment, and administration of the COVID-19 vaccines under Republic Act (R.A.) No. 11525, otherwise known as the “COVID-19 Vaccination Program Act of 2021.” The regulations discuss the covered activities and entities, guidelines, procedures, and requirements for the availment, extent of incentives, and work-around procedures on refund of VAT, excise tax, and donor’s tax paid from January 1, 2021.
BIR ISSUES IRR OF INCOME TAX PROVISIONS OF CREATE LAW
APRIL 8, 2021
Revenue Regulations (RR) Nos. 2-2021 and 5-2021 implements the amendments introduced by the Corporate Rehabilitation and Tax Incentives for Enterprises (CREATE) Law on income tax.
Highlights include:
1. The term corporation, for income tax purposes, now includes a one-person corporation.
2. The new Income Tax rates applicable to the regular taxable income of corporations.
3. The new Income Tax rates applicable to certain passive income of individuals and corporations.
4. Conditions for tax-exempt foreign-sourced dividends
a. Reinvestment in the business operations of the domestic corporation within the next taxable year
b. Reinvestment should be for working capital requirements, capital expenditures, dividend payments, investment in domestic subsidiaries, and infrastructure projects
c. 20% holding of a foreign corporation uninterruptedly for a minimum of two (2) years at the time of the dividend’s distribution or continuously during the entire existence of the foreign corporation which is still in its inception of the operation
d. Foreign-sourced dividends shall be considered as taxable income in the year of actual receipt or remittance, subject to corresponding penalties, absent compliance of a-c above
e. Submission of a Sworn Statement to the BIR within thirty (30) calendar days from the actual receipt of the remitted dividends. A Sworn Statement should contain the attestation of the attendant circumstances on receipt of dividends with a commitment of compliance imposed for tax-exempt dividends
f. Submission of Audited Financial Statements (AFS) with the Independent Auditor’s Sworn Certification containing an affirmation of the attendant circumstances on receipt of dividends as well as compliance imposed for tax-exempt dividends
g. Submission of Annual Income Tax Returns (ITR) and Sworn Certification by Independent Auditor immediately following taxable year, attesting the utilization or non-utilization of dividends
h. Foreign tax credits on dividends are not allowed to be deducted.
5. Non-imposition of Improperly Accumulated Earnings Tax starting April 11, 2021. The exemption shall apply to the entire taxable year for all fiscal years/taxable years ending after April 11, 2021.
6. Additional deductions equivalent to ½ of the value of labor training expenses incurred for skills development of enterprise-based trainees enrolled in public schools or institutions and duly covered by apprenticeship agreement, provided, that the enterprise shall secure a proper certification from the Department of Education (DepEd), Technical Education and Skills Development Authority (TESDA), or Commission on Higher Education (CHED) and that such deduction shall not exceed 10% of direct labor wage.
7. Deductible interest expense shall be allowed net of a reduction rate of 20% from the previous 33% effective July 1, 2020. For other domestic corporations meeting the threshold for a 20% income tax rate, the deduction will be 0% since there is no difference in the income tax rate on the taxable income with the tax rate applied to the interest income subjected to final tax.
8. BIR confirmation or tax ruling shall not be required on a tax-free exchange or disposition of properties in consideration of corporate restructuring pursuant to re-organization, subject to the condition that the transferor gains control, and the stocks issued for services shall not be considered as issued in return of the property. Certificate Authorizing Registration (CAR) by the Revenue District Office (RDO) where the property is located, in case of real properties, or to the RDO where the business is registered, in case of shares of stocks, shall be issued subject to the BIR post-transaction audit.
9. Simplification of interest arbitrage computation as a result of the reduction of the rate from 33% to 20%
10. Simplification of transitory rates on corporate income tax as a result of the retroactive application of reduced rates
11. Taxpayers who have already filed their Income Tax Returns (ITR) for the Taxable Year 2020 (the calendar year 2020, fiscal year ended July 31, 2020, to the fiscal year ended February 28, 2021) may amend their ITR using the transitory rates provided in the matrix. Any resulting excess/overpayment can be claimed for a refund or Tax Credit Certificate, or carried over to the next taxable year, at the taxpayers' option.
BIR ISSUES IRR ON VAT & PERCENTAGE TAX PROVISIONS OF CREATE LAW
APRIL 8, 2021
Revenue Regulations No. 4-2021 implements the provisions on VAT and Percentage Tax under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.
Highlights include:
1. VAT exempt sale of residential lot valued at ₱1.5 Million and below, or house and lot and other residential dwellings valued at ₱2.5 Million and below, as adjusted in 2011 using the 2010 Consumer Price Index values.
Provided, that beginning of January 1, 2021, the VAT exemption shall only apply to the sale of real properties not primarily held for the sale to customers or held for lease in the ordinary course of trade or business; sale of real property utilized for socialized housing as defined by Republic Act (R.A.) No. 7279, as amended; and, sale of house and lot, and other residential dwellings with a selling price of not more than Php 2 Million, as adjusted in 2011 using the 2010 Consumer Price Index values: Provided, further, that every three (3) years thereafter, the amounts stated herein shall be adjusted to its present value using the Consumer Price Index as published by the Philippine Statistics Authority (PSA).
2. VAT exempt sale, importation, printing, or publication of books, and any newspaper, magazine, journal, review bulletin, or any such educational reading material covered by the United Nations Educational, Scientific, and Cultural Organization (UNESCO) Agreement on the importation of educational, scientific, and cultural materials, including the digital or electronic format. Provided that the materials are not devoted principally to the publication of paid advertisements and are subject to the compliance requirements of the National Book Development Board pursuant to R.A. No. 8047.
3. VAT exempt sale or importation of prescription drugs and medicines for:
a. Diabetes, high cholesterol, and hypertension beginning January 1, 2020; and
b. Cancer, mental illness, tuberculosis, and kidney diseases beginning January 1, 2021.
4. VAT exempt sale or importation of the following COVID prevention items, beginning January 1, 2021, to December 31, 2023:
a. Capital equipment, its spare parts, and raw materials that are necessary for the production of personal protective equipment (PPE) components such as coveralls, gowns, surgical caps, surgical masks, n-95 masks, scrub suits, goggles, and face shields, double or surgical gloves, dedicated shoes, and shoe covers, subject to separate guidelines as may be imposed by the Department of Trade and Industry (DTI) on the local availability determination.
b. All drugs, vaccines, and medical devices specifically prescribed and directly used for the treatment of COVID-19 are subject of separate guidelines as may be imposed by the Department of Health (DOH) on the listing of qualified prescription drugs and medical devices.
c. Drugs for the treatment of COVID-19 approved by the Food and Drug Administration (FDA) for use in clinical trials, including raw materials directly necessary for the production of such drugs, subject to the submission to separate guidelines as may be imposed by the DOH.
5. Reduced percentage tax from 3% to 1% effective July 1, 2020, until June 30, 2023, for VAT-exempt and not VAT-registered persons.
6. A VAT-registered taxpayer who opted to register as non-VAT as a result of additional VAT-exempt provisions shall be subject to transitory provisions on invoicing such as the submission of an inventory list of unused invoices/receipts for cancellation. Subject to the approval of the BIR, taxpayers may opt to use a few pre-approved invoices/receipts until August 31, 2021, with a duly stamped “Not valid for claim of input tax” until new registered non-VAT invoices/receipts have been received or until August 31, 2021.
7. The taxpayer shall treat the resulting excess taxes paid due to the inclusion in the items exempt from VAT or adjustment in Percentage Tax rates in the following manner:
a. Unutilized VAT paid on local purchases and importation may be carried over to the succeeding taxable quarter/s or be charged as part of the cost.
Input VAT, which is directly attributable to goods now classified as VAT exempt, may be allowed as part of cost. For input VAT that cannot be attributed to goods now classified as VAT-exempt, only a ratable portion thereof shall be charged to the cost.
b. Excess Percentage Tax payments may be carried forward to the succeeding taxable quarter/s by reflecting the excess Percentage Tax payment under Line 17 of the Quarterly Percentage Tax Return (BIR Form No. 2551Q), “Other Tax Credit/Payment,” specifying therein as “Carry-Over Excess Percentage Taxes Paid from Previous Quarter/s”.
c. Excess/unutilized input taxes, as a result of the change of status from VAT to Non-VAT registration, may be subject to refund or the issuance of a Tax Credit Certificate (TCC), at the option of the taxpayer.
BIR PRESCRIBES THE PROCEDURE ON THE SUBMISSION OF TAX-RELATED & PERTINENT INFORMATION & ASSOCIATED LIABILITY ON IMPROPER DISCLOSURE PURSUANT TO CREATE LAW
APRIL 8, 2021
Revenue Regulations (RR) No. 3-2021 prescribes the rules and regulations to implement Section 3 of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law. Pursuant to Section 20 (B) of the 1997 Tax Code, as amended by CREATE, the Secretary of Finance may order the Commissioner of Internal Revenue (CIR) to furnish the Department of Finance (DOF) with such specifically identified information related to entities receiving incentives under Title Xlll of the Tax Code of 1997, as amended, with justification clearly stated therefor. A request for tax-related and pertinent information of entities receiving incentives shall be made upon the authority of the Secretary of Finance and shall be addressed to the CIR, subject to internal guidelines covering scope limitations, purpose, and rules on confidentiality.
BIR ISSUES A BANK BULLETIN ON SUPPLEMENTAL PROCEDURES FOR THE ACCEPTANCE OF TAX RETURNS & PAYMENTS DUE FALLING FROM MARCH 21, 2021, TO APRIL 30, 2021
APRIL 8, 2021
Bank Bulletin No. 2021-07 provides for the supplemental procedures for the acceptance of tax returns and payments falling due within March 22, 2021, to April 30, 2021. All Authorized Agent Banks (AABs) are advised to accept all payments from taxpayers for the stated period even if they are outside the jurisdiction of the Revenue District Office (RDO) where they are registered, accept check payments from any taxpayer even without the name of the receiving AAB Branch indicated on the check payable to the BIR, and accept all out-of-district returns with payments from taxpayers paying through check, even if the said checks have different collecting AAB.
BIR ADVISES INDIVIDUAL eFPS USERS FILING THEIR ANNUAL ITR TO USE OFFLINE eBIRFORMS PACKAGE V7.9 IN THE ABSENCE OF UPDATED eFPS 1701 & 1701A
APRIL 8, 2021
In an Advisory, the BIR has advised individual taxpayers who are eFPS users to use the latest version of Offline eBIRFORMS Package in filing their Annual ITR in the absence of updated version of BIR Forms 1701 and 1701A in eFPS. Payments can be done manually (over the bank teller) or using online payment platforms accredited by the BIR.
BIR CLARIFIES THAT APRIL 15, 2021 DEADLINE STAYS BUT TAXPAYERS MAY AMEND UNTIL MAY 15, 2021, WITHOUT ANY PENALTIES
APRIL 6, 2021
Revenue Memorandum Circular (RMC) No. 46-2021 clarifies that the deadline for submission of the Annual Income Tax Return (ITR) for the taxable year ended December 31, 2020, is not extended, hence, the deadline remains to be on April 15, 2021. However, taxpayers may file tentative returns and amend the same on or before May 15, 2021, without any penalties. Overpayments may be carried over as credits against the tax due for the same tax type in the succeeding period, or taxpayers may file a refund. The electronic signature shall be equivalent to the actual signature or “wet signature” for filing purposes. Taxpayers may also opt to use the facility of Electronic Audited Financial Statements (eAFS) as an option for hard copy submission of electronically filed tax returns and required attachments.
BIR EXTENDS THE DEADLINE FOR THE SUBMISSION OF BIR POSITION PAPER & OTHER CORRESPONDENCES DUE TO ECQ
APRIL 5, 2021
Revenue Memorandum Circular (RMC) No. 45-2021 extends the deadline for the filing of the position paper, supporting documents, and other similar letters and correspondences falling due on April 5, 2021, and during the Enhanced Community Quarantine (ECQ) period. The extended deadline for the submission of documents in relation to the first, second, and final notice is ten (10) days from the lifting of the ECQ. Further, the extended deadline for the submission of documents in response to Subpoena Duces Tecum and submission of reply and supporting documents in response to a Preliminary Assessment Notice (PAN) is 15 days from the lifting of the ECQ. Lastly, the extended deadline for the submission of reply and supporting documents in response to a Notice of Discrepancy (NOD) and a Final Assessment Notice/Formal Letter of Demand (FAN/FLD), transmittal letter and supporting documents in relation to a Request for Reinvestigation, Request for Reconsideration to the Commissioner of Internal Revenue (CIR) on Final Decision Disputed Assessment (FDDA), other similar letters and correspondences, and the filing of a Value-Added Tax (VAT) refund with VCAD, is 30 days from the lifting of the ECQ.
The extension is, however, only for taxpayers with Revenue District Offices (RDOs) in NCR Plus areas and other registered taxpayers outside NCR Plus who have transactions with any BIR office within NCR Plus.
BIR AMENDS THE MANNER OF SUBMISSION OF BIR FORM 1709 TO INCLUDE SUBMISSION VIA eAFS SYSTEM
MARCH 31, 2021
Revenue Memorandum Circular (RMC) No. 44-2021 amends pertinent provisions of RMC No. 76-2020 to include submission of BIR Form No. 1709 through the eAFS System. The circular discusses the manner of filing BIR Form 1709 and the deadline for submission of the RPT Form and its attachments covering the following: (1) manual filers who opt to submit manually; (2) electronic filers who opt to submit manually; and (3) taxpayers who opt to submit electronically through the eAFS System.
BIR PRESCRIBES THE FILE NAMING CONVENTIONS OF THE SCANNED FILES TO BE UPLOADED IN eAFS
MARCH 31, 2021
Revenue Memorandum Circular (RMC) No. 43-2021 circularizes the revised guidelines on the use of Electronic Audited Financial Statements (eAFS) in the submission of the Annual Income Tax Returns and its required attachments, such as the Audited Financial Statements, applicable BIR Forms 1709, 2307, 2306, 2304, 2316, 1606, proof of prior year’s tax credits, foreign and other credits, Tax Debit Memo, proof of tax payment and the return previously filed if amended, Summary of Alphalist of Withholding Taxes (SAWT), and proof of electronic submission. Specifically, the circular prescribes the file naming conventions of the scanned files as uploaded in the eAFS.
BIR STREAMLINES THE PROCEDURES & DOCUMENTS FOR THE AVAILMENT OF TAX TREATY BENEFITS
MARCH 31, 2021
Revenue Memorandum Order (RMO) No. 14-2021 sets out the new guidelines and procedures for availing of tax treaty relief.
Highlights include:
1. Withholding agent may rely on the BIR Form No. 0901, Tax Residency Certificate (TRC), duly issued by the foreign tax authority, and the relevant provisions of the applicable tax treaty submitted by the nonresident taxpayer on whether to apply for a reduced rate or exemption from withholding at source on the income derived by a nonresident taxpayer from all sources within the Philippines.
2. When treaty rates have been applied, the withholding agent shall file with the International Tax Affairs Division (ITAD) a Request for Confirmation. On the other hand, if regular rates have been imposed, the nonresident taxpayer shall file with ITAD a Tax Treaty Relief Application (TTRA).
3. The filing of a Request of Confirmation shall be any time after the payment of withholding tax but not later than the last day of the fourth (4th) month following the close of each taxable year. The filing of TTRA shall be any time after the receipt of income if the nonresident taxpayer opts to invoke and prove his entitlement to treaty benefit.
4. In the event that the BIR determines that the withholding rate applied is lower than the appropriate rate, the BIR will issue a ruling denying the Request for Confirmation or TTRA. Consequently, the withholding agent shall pay the deficiency tax and penalties. On the other hand, in the event that the BIR determines that the withholding rate applied is proper or higher than the appropriate rate, the BIR will issue a certificate confirming entitlement to treaty benefits.
5. Generally, one TTRA or Request for Confirmation shall be filed for each transaction, except for long-term contracts.
6. New TTRAs shall be processed within four (4) months from the submission of complete documents or as soon as practicable, provided that the ITAD has addressed all its backlogs.
BIR EXTENDS THE FILING FOR VAT REFUND CLAIMS
MARCH 22, 2021
Revenue Memorandum Circular (RMC) 39-2021 extends the deadline for the filing of VAT refund claims for those whose current deadline falls on March 31, 2021. Also, the 90-day period for processing of refund claims is suspended due to the temporary closure of the VAT Credit Audit Division (VCAD) until March 28, 2021.
BIR CIRCULARIZES THE GUIDELINES ON THE SHIFT FROM FINAL TO CREDITABLE SYSTEM ON WITHHOLDING ON GOVERNMENT MONEY PAYMENTS PURSUANT TO TRAIN LAW
MARCH 5, 2021
Revenue Memorandum Circular (RMC) No. 36-2021 prescribes the guidelines on the shift from final to creditable withholding of Value-Added Tax (VAT) on Government Money Payments, which shall be effective starting January 1, 2021, pursuant to the Tax Reform for Acceleration and Inclusion (TRAIN) Law. As a result of the shift, lines 20B and 23B of BIR Forms 2550M and 2550Q, respectively, as well as Schedule 4 on both forms, need not be filled out anymore. Creditable VAT withheld shall be reflected on line 23C for BIR Form 2550M, line 26D for BIR Form 2550Q, and Schedule 8 of respective forms. Consequently, the government party involved shall now be required to use BIR Form 1600-VT for the manual filing and monthly remittance of the amount withheld. The government is required to issue BIR Form 2307 in replacement of BIR Form 2306, as the former shall be used by VAT taxpayers in claiming VAT credit in their VAT declarations.
BIR CIRCULARIZES THE AVAILABILITY OF THE ENHANCED BIR FORM 1601-FQ SEPTEMBER 2020 (ENCS)
MARCH 2, 2021
Revenue Memorandum Circular (RMC) No. 35-2021 circularizes the availability of the enhanced BIR Form 1601-FQ September 2020 (ENCS). The enhanced version contains the inclusion of additional countries having contracted tax treaties with the Philippines, namely: Mexico, Qatar, Sri Lanka, and Turkey. The revised manual return is now available on the BIR website. eFPS filers shall use the enhanced BIR Form 1601-FQ January 2018 (ENCS), while eBIRForms filers shall use the manual returns.
BIR CIRCULARIZES THE UPDATED LIST OF ACCREDITED MICROFINANCE NGO
MARCH 2, 2021
Revenue Memorandum Circular (RMC) No. 31-2021 circularizes the updated list of Microfinance NGOs accredited by the Microfinance NGO Regulatory Council.
BIR ALLOWS e-SIGNATURE FOR CERTAIN BIR FORMS
FEBRUARY 26, 2021
Revenue Memorandum Circular (RMC) No. 29-2021 circularizes the policies and guidelines in allowing the use of electronic signature on BIR Forms 2304, 2306, 2307, and 2316. The e-signature serves as the functional equivalent of a manual signature on said Forms. In case the withholding agent opts to use e-signature, approval of the BIR is no longer necessary. The withholding agent shall make sure that the forms with e-Signature shall only be issued once. In case of re-issuance or if the payee requested another copy of the forms after giving the original copy, the re-issued forms should contain a "RE-PRINT" watermark in Cambria font and font size of 144 to avoid double take up of tax credits.
BIR CIRCULARIZES THE ADDITIONAL PERA UITF
FEBRUARY 24, 2021
Revenue Memorandum Circular (RMC) No. 25-2021, issued on February 24, 2021, circularizes the additional PERA Unit Investment Trust Fund (UITF) duly approved by the Bangko Sentral ng Pilipinas (BSP).
BIR ROLLS OUT THE NATIONWIDE IMPLEMENTATION OF ONLINE APPLICATION FOR eTCBP/TCVC
FEBRUARY 24, 2021
Revenue Memorandum Circular (RMC) No. 24-2021, issued on February 24, 2021, circularizes the nationwide implementation of the online application for Tax Clearance for Bidding Purposes and Tax Compliance Verification Certificate (eTCBP/TCVC) through the Bureau’s Official Electronic Mail Address.
BIR CIRCULARIZES THE 2021 PRIORITY PROGRAMS
FEBRUARY 18, 2021
Revenue Memorandum Circular (RMC) No. 23-2021, issued on February 18, 2021, prescribes the Calendar Year 2021 BIR Priority Programs and Projects. Among the priority programs, in addition to the yearly programs of Run After Tax Evaders (RATE) Program, Oplan Kandado, broadening of the tax base and intensified audit, include innovating the taxpayer experience and BIR service process such as automation of preparation and issuance of BIR Form 2307, streamlining of withholding tax rates, re-architecture and enhancement of Electronic Documentary Stamp (eDST) System, Online Registration and Update System (ORUS), TIN Verifier Mobile Application, Integrated Contact Center Solution and Chatbot, development of eFiling System, eAppointment, Information and Communications Technology (ICT) Solutions for Improved Taxpayers Services-Availment of Commercial Data Center, the roll-out of Digital Workplace such as integration and segmentation, and optimization of Internal Revenue Integrated System (IRIS) and Cloud Computing Provisioning of all DX System-Driven Projects.
BIR PRESCRIBES THE SUBMISSION OF SUMMARY LISTING OF PRE-EXISTING LOANS COVERED BY DST EXEMPTION UNDER BAYANIHAN LAW
FEBRUARY 18, 2021
Revenue Memorandum Circular (RMC) No. 22-2021, issued on February 18, 2021, prescribes the submission by all covered institutions of a Summary Listing of All Pre-Existing Loans as of the effectivity date of Republic Act (R.A.) No. 11494, otherwise known as “Bayanihan to Recover as One Act,” in hard and soft copies based on the prescribed format provided in this RMC. Failure to comply will result in the imposition of the corresponding administrative penalties as well as the additional Documentary Stamp Tax (DST) due against the covered institutions.
BIR PROVIDES THE NEW GUIDELINES ON THE DENIAL OF COMPROMISE SETTLEMENT & APPROVAL OF TERMINATION & CLEARANCE OF BIR ASSESSMENT
FEBRUARY 17, 2021
Revenue Memorandum Order (RMO) No. 8-2021, issued on February 17, 2021, provides new policies and procedures for the issuance of the Notice of Denial (NOD) of Application for Compromise Settlement at the level of the Regional Office as well as the issuance of Authority to Cancel Assessment (ATCA) and Certificate of Approval (CA) for applications duly approved by the National Evaluation Board (NEB).
All denials on applications for compromise settlement that resulted from the deliberations conducted by the Regional Evaluation Board that involves a basic tax of ₱ 500,000 and below, shall be signed by the Regional Director, while denied cases involving more than ₱ 500,000 basic tax shall be signed by the Commissioner of Internal Revenue. On applications for compromise settlement duly approved by the NEB, including cases subject to Judicial Compromise Agreement (JCA), the same shall be signed by the Assistant Commissioner of the Collection Service, except those involving large taxpayers’ cases, which shall be signed by the Assistant Commissioner of the Large Taxpayers Service. The entire docket of the case as well as the signed approval shall then be transmitted back to the concerned office having jurisdiction thereto, who shall then prepare the corresponding Notice of Lifting on whatever collection enforcement notices as previously issued.
All ATCAs on applications for compromise settlement duly approved by the NEB shall be signed by the concerned Regional Director or the Assistant Commissioner where the case originated.
BIR CLARIFIES THE FILING OF BIR FORMS 1604-CF & 1604-E
FEBRUARY 2, 2021
Revenue Memorandum Circular (RMC) No. 18-2021 circularizes the clarifications on the filing of BIR Forms 1604-CF and 1604-E. For copies of BIR Form 2316, the same shall be accepted even without the signature of the employee provided that the certificates are duly signed by the authorized representative of the taxpayer-employer. Moreover, taxpayers who already filed their tax returns thru the Electronic Filing and Payment System (eFPS) and offline eBIRForms package need not submit hard copies to the concerned Revenue District Office.
BIR SIMPLIFIES THE PROCESS ON SECURING PERMIT TO USE CAS/CBA
FEBRUARY 1, 2021
Revenue Memorandum Order (RMO) No. 9-2021 simplifies the procedures and requirements for those taxpayers who wish to apply for a Permit to Use a Computerized Accounting System (CAS) and Computerized Books of Accounts (CBA). Taxpayers with pending applications for Permit to Use CAS, CBA, and/or its Components, which were filed with the National Accreditation Board (NAB) and are pending with the NAB before the issuance of RMO No. 9-2021 shall be processed under RMC No. 10-2020. All applications filed thereafter shall be processed following the provisions stated in this RMO.
BIR PRESCRIBES THE FORMAT OF THE LIST OF RECIPIENTS WHO RECEIVED TAX-EXEMPT BENEFITS UNDER THE BAYANIHAN LAW
JANUARY 28, 2021
Revenue Memorandum Circular (RMC) No. 16-2021 prescribes the guidelines in the submission of the list of recipients of income exempt from income tax pursuant to Bayanihan Act as implemented under Revenue Regulations (RR) No. 29-2020. Pursuant to RR No. 29-2020, all employers required to submit the Alphabetical List of Employees/Payees are required to submit a one-time list of recipients of income relative to income payments exempt from income tax per Bayanihan Act. The circular prescribes the format or template to be used for the required list to be submitted on before January 31, 2021. In addition to the one-time list, the employer shall also submit a quarterly report pertaining to employees who received retirement benefits exempted from income tax but were later re-employed by them or their related parties during the succeeding twelve-month period from the date of retirement. The submission of this quarterly report shall be done thirty (30) days from the close of all calendar quarters of 2021.
BIR ANNOUNCES THE AVAILABILITY OF CENTRAL BUSINESS PORTAL
JANUARY 27, 2021
Revenue Memorandum Circular (RMC) No. 15-2021 announces the availability of the Central Business Portal (CBP), an online system that serves as a central system to receive applications and captures application data involving business-related transactions, and a platform that will promote the use of the electronic payment systems for the Securities and Exchange Commission (SEC), Bureau of Internal Revenue (BIR), Social Security System (SSS), Philippine Health Insurance Corporation (PhilHealth), and Home Development Mutual Fund (PAG-IBIG). It will be available to the following domestic corporations:
1. Corporations with two (2) to four (4) incorporators
2. Regular corporations whose incorporators are juridical entities and/or the capital structure is not covered by the 25%-25% rule
3. One Person Corporation (OPC)
BIR ANNOUNCES THE AVAILABILITY OF THE BIR MOBILE TIN VERIFIER APPLICATION
JANUARY 27, 2021
Revenue Memorandum Circular (RMC) No. 13-2021 announces the availability of the BIR Mobile TIN Verifier Application, a service channel for taxpayers to send online TIN validation and TIN inquiry using their mobile phones with a real-time response from the concerned BIR office.
BIR EXTENDS THE DEADLINE FOR THE ALPHALIST SUBMISSION
JANUARY 26, 2021
Revenue Memorandum Circular (RMC) No. 17-2021 extends the deadline for the filing of the Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes (BIR Forms 1604-C and 1604-F) from January 31, 2021, to February 28, 2021.
BIR CLARIFIES THE EFFECTIVITY OF RMO NO. 47-2020, WHICH IMPOSED NEW DOCUMENTARY REQUIREMENTS FOR THE PROCESSING OF VAT REFUND
JANUARY 12, 2021
Revenue Memorandum Circular (RMC) No. 14-2021 clarifies the effectivity date of Revenue Memorandum Order (RMO) No. 47-2020, which imposed new documentary requirements for the processing of Value-Added Tax (VAT) refund claims pursuant to Section 112 of the 1997 Tax Code, as amended. As clarified, RMO No. 47-2020 shall commence on January 19, 2021, or after the effectivity period reckoned from the date of submission of the issuance to the University of the Philippines Law Center (UPLC). Thus, the following shall be observed:
1. VAT refund claims filed prior to January 19, 2021, shall be filed, and processed following the guidelines and procedures set forth in RMC No. 47-2019 and RMO No. 25-2019
2. VAT refund claims filed on or after January 19, 2021, shall be filed and processed in accordance with RMO No. 47-2020.
BIR CLARIFIES THE EFFECTIVITY OF RMO NO. 47-2020, WHICH IMPOSED NEW DOCUMENTARY REQUIREMENTS FOR THE PROCESSING OF VAT REFUND
JANUARY 12, 2021
Revenue Memorandum Circular (RMC) No. 14-2021 clarifies the effectivity date of Revenue Memorandum Order (RMO) No. 47-2020, which imposed new documentary requirements for the processing of Value-Added Tax (VAT) refund claims pursuant to Section 112 of the 1997 Tax Code, as amended. As clarified, RMO No. 47-2020 shall commence on January 19, 2021, or after the effectivity period reckoned from the date of submission of the issuance to University of the Philippines Law Center (UPLC). Thus, the following shall be observed:
1. VAT refund claims filed prior January 19, 2021, shall be filed and processed following the guidelines and procedures set forth in RMC No. 47-2019 and RMO No. 25-2019
2. VAT refund claims filed on or after January 19, 2021, shall be filed and processed in accordance with RMO No. 47-2020.
BIR CLARIFIES THE GUIDELINES ON THE UTILIZATION OF THE 5% TAX CREDIT UNDER PERA
DECEMBER 23, 2020
Revenue Memorandum Circular (RMC) No. 139-2020 prescribes the guidelines on the utilization of the 5% tax credit prescribed under the Republic Act (R.A.) No. 9505 (PERA Act of 2008).
BIR CLARIFIES THE 5-YEAR NOLCO ENTITLEMENT OF FISCAL TAXPAYERS UNDER BAYANIHAN 2
DECEMBER 23, 2020
Revenue Memorandum Circular (RMC) No. 138-2020 further clarifies the provisions of Revenue Regulations (RR) No. 25-2020, which implements the BAYANIHAN provisions on the extended benefits of Net Operating Loss Carry-Over (NOLCO) for five (5) years from the original period of three (3) years. Specifically, it clarifies the reckoning point on where to start and end of the benefits for those taxpayers adhering to the iscal accounting period.
It may be recalled that Bayanihan to Recover as One Act (BAYANIHAN 2) extends the NOLCO from three (3) years to five (5) years covering taxable years 2020 and 2021, regardless of the taxpayer whether adhering to the calendar or fiscal accounting period.
BIR AMENDS THE GUIDELINES ON THE RPT DISCLOSURE FORM (BIR FORM NO. 1709) & THE TPD
DECEMBER 21, 2020
Revenue Regulations (RR) No. 34-2020 amends the guidelines and procedures on the submission of the new BIR Form No. 1709, TPD, and other supporting documents in relation to the previously issued RR Nos. 19-2020, to streamline the requirements.
Highlights include:
a. The following are required to file and submit BIR Form No. 1709, together with the Annual Income Tax Returns (AITR):
1. Large Taxpayers
2. Taxpayers enjoying tax incentives
3. Taxpayers reporting net operating losses for the current taxable year and the immediately preceding two (2) consecutive taxable years
4. Related Party
b. For related-party, Key Management Personnel (KMP) shall no longer be required to file and submit the form, nor shall there be any requirement to report any transaction between KMP and the reporting entity/parent company of the latter in the form.
c. The form is also a required attachment for short-period returns filed in 2021 and subsequent years.
d. The preparation and submission of TPDs shall be mandatory for taxpayers enumerated above who meet the following materiality thresholds:
1. Annual gross sales/revenue for the subject taxable period exceeding ₱150 Million, and the total amount of related party transactions with foreign and domestic related parties exceeds ₱90 Million
2. Related party transactions meeting the following materiality threshold:
i. If involving the sale of tangible goods in the aggregate amount exceeding ₱60 Million within the taxable year;
ii. If involving service transaction, payment of interest, utilization of intangible goods or other related party transaction in the aggregate amount exceeding ₱15 Million within the taxable year; or
iii. If TPD was required to be prepared during the immediately preceding taxable period for exceeding either (i) or (ii) above.
e. The TPDs and other supporting documents shall no longer be attached to the RPT Form but shall be submitted upon request in relation to a regular tax audit.
f. Taxpayers who are not covered are required to disclose in the Notes to the Financial Statements that they are not covered by the requirements and procedures for related party transactions provided under this RR.
g. A simplified version of the form shall be issued.
h. The amendments were issued as part of the BIR’s compliance with the Ease of Doing Business and Efficient Government Service Delivery Act of 2018.
BIR EXTENDS THE PERIOD TO AVAIL OF THE VAPP
DECEMBER 21, 2020
Revenue Regulations (RR) No. 33-2020 amends RR No. 21-2020 specifically on the deadline for availing of VAPP, which is originally set until December 31, 2020. The regulation extends the period of availment until June 30, 2021, unless further extended by the Secretary of Finance. The regulations provide that no denial of application or invalidation of a previously issued Certificate of Availment shall be valid unless the taxpayer is formally notified. The taxpayer has a right to appeal in case of denial or invalidation of application within 30 days from the receipt of notice of denial.
BIR EXTENDS THE PERIOD TO AVAIL OF THE TAX AMNESTY ON DELINQUENCY
DECEMBER 21, 2020
Revenue Regulations (RR) No. 32-2020 amends RR No. 4-2019 pursuant to Section 4(tt) of Republic Act (R.A.) No. 11494, otherwise known as “Bayanihan to Recover As One Act,” allowing the moving of statutory deadlines for the filing and submission of documents, including the payment of taxes, as required by law in order to ease the burden on individuals under community quarantine. RR No. 32-2020 now provides the extension of the availment of the Tax Amnesty on Delinquency until June 30, 2021, from the last extended deadline on December 31, 2020.
BIR AMENDS THE CRITERIA FOR IDENTIFYING THE TWAs
DECEMBER 18, 2020
Revenue Regulations (RR) No. 31-2020, issued on December 18, 2020, further amends RR No. 11-2018, as previously amended by RR No. 7-2019, specifically on the criteria for identifying the Top Withholding Agents (TWAs).
TWAs shall now refer to those taxpayers whose gross sales/receipts or gross purchases during the preceding taxable year fall under the minimum thresholds determined according to the existing group classifications of the Revenue District Offices (RDOs) where the taxpayers are duly registered, as follows:
a. Groups A & B-gross sales/receipts or gross purchases of at least Php 12 Million
b. Groups C, D & E-gross sales/receipts or gross purchases of at least Php 5 Million
Prior to RR No. 31-2020, TWAs are those taxpayers whose sales/receipts or gross purchases or claimed deductible itemized expenses amounted to Php 12 Million during the preceding taxable year, without any further group classification of RDOs where taxpayers are duly registered.
BIR ALLOWS THE MANUAL TAX FILING OF NATIONAL GOVERNMENT AGENCIES AFFECTED BY TYPHOON ROLLY IN THE BICOL REGION
DECEMBER 11, 2020
Revenue Memorandum Circular (RMC) No. 134-2020 allows the manual filing and payment of tax returns, without penalties and sanctions, of National Government Agencies (NGAs) in areas affected by Typhoon Rolly in Bicol Region that are mandated users of Electronic Filing and Payment System (eFPS) and Electronic Tax Remittance Advice (eTRA) as a mode of payment. However, NGAs should re-file the manually filed tax returns through eFPS within 24 hours immediately after the restoration of the power supply and telecommunications internet connectivity.
BIR ALLOWS THE MANUAL TAX FILING OF EFPS TAXPAYERS AFFECTED BY TYPHOONS ROLLY & ULYSSES
DECEMBER 11, 2020
Revenue Memorandum Circular (RMC) No. 133-2020 allows the manual filing and payment of tax returns during the unavailability of the Electronic Filing and Payment System (eFPS) due to typhoons Rolly and Ulysses. Concerned taxpayers are given an extension of 15 days for deadlines falling between November 15 and 30, 2020, to file returns and pay the corresponding taxes due thereon without the imposition of corresponding penalties.
BIR CIRCULARIZES THE POLICY ON ONLINE VIRTUAL MEETINGS
DECEMBER 10, 2020
Revenue Memorandum Circular (RMC) No. 130-2020, issued on December 10, 2020, provides the policies and guidelines in the conduct of online meetings/conferences with taxpayers.
Highlights include:
1. All online meetings and conferences with the taxpayer or representative shall be hosted by the BIR.
2. In sending invitations, revenue officials and employees shall only use the prescribed BIR e-mail address (@name.surname@bir.gov.ph).
3. All meetings and conferences must be pre-approved in writing by the concerned Division Chief for National Office, Regional Director for Regional Offices, or Revenue District Officer for Revenue District Offices.
4. To represent the taxpayer, all representatives shall have a duly notarized Special Power of Attorney.
BIR SUSPENDS AUDIT EFFECTIVE DECEMBER 15, 2020
DECEMBER 4, 2020
Revenue Memorandum Circular (RMC) No. 127-2020 circularizes the pronouncements of the BIR that all field audits relative to the examinations and verifications of the taxpayers' books of accounts and records and other transactions are suspended from December 15, 2020, to January 7, 2021. Thus, any form of business visitations in relation to the service of Letter of Authority, Audit Notices, and Mission Orders should not be conducted, except in a number of cases and situations enumerated in the circular. However, the service of notices to avail the Tax Amnesty on Delinquencies, Estate Tax Amnesty, and Voluntary Assessment and Payment Program should still be effected. Hence, taxpayers may pay voluntarily their known deficiency taxes without the need to secure authority from the concerned Revenue Officials.
BIR CIRCULARIZES THE AVAILABILITY OF THE NEW EFPS VERSION OF BIR FORM 1601-C
NOVEMBER 27, 2020
Revenue Memorandum Circular (RMC) No. 125-2020 announces the availability of BIR Form No. 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) January 2018 (ENCS) in the Electronic Filing and Payment System (eFPS). eFPS filers shall use the said form in filing and remittance of taxes withheld on compensation in accordance with the business industry grouping set forth in Revenue Regulations (RR) No. 26-2002.
BIR CLARIFIES CERTAIN ISSUES & CONCERNS RAISED BY THE COOPERATIVE SECTOR
NOVEMBER 26, 2020
Revenue Memorandum Circular (RMC) No. 124-2020 clarifies certain provisions of Revenue Memorandum Order (RMO) No. 76-2010 in relation to the Joint Rules and Regulations implementing Articles 60, 61, and 144 of the Philippine Cooperative Code of 2008 and other revenue issuances affecting the cooperative sector.
Highlights include:
1. Requirements for securing a Certificate of Tax Exemption (CTE)
2. Obligations of cooperatives with duly issued CTE
3. Taxation of interest earned from savings and time deposit accounts of member of the cooperative engaged in lending
4. Documentary Stamp Tax (DST) on transactions between the cooperative and its members
5. Criteria for a cooperative to be selected for audit
6. Courses of action in case a cooperative receives tax assessment notices from the BIR
THE BIR & THE LRA SHARE RECORDS TO IMPROVE TAX ASSESSMENTS & COLLECTIONS
NOVEMBER 23, 2020
Revenue Memorandum Circular (RMC) No. 123-2020 circularizes the full text of the Memorandum of Agreement (MOA) between the Bureau of Internal Revenue (BIR) and the Land Registration Authority (LRA) on sharing of records in aid of improving tax assessments and collections. The agreement allows LRA to share with BIR the personal data of registered property owners. The BIR can also share personal data of taxpayers with the LRA, which the latter can use to validate tax declarations. The BIR and the LRA shall implement appropriate security measures to ensure protection of the personal information of data subjects, including the policy for retention, destruction, and disposal of records.
BIR CLARIFIES THE LIST OF VAT-EXEMPT DRUGS PURSUANT TO THE CLARIFICATION RAISED BY FDA
NOVEMBER 23, 2020
Revenue Memorandum Circular (RMC) No. 122-2020, issued on November 23, 2020, circularizes the letter from the Food and Drug Administration (FDA) regarding the clarification on the List of Value-Added Tax (VAT)-Exempt Drugs under the Joint Administrative Order (A.O.) No. 2-2018. In the letter, FDA Director clarifies certain drug products included in the lists initially provided by the FDA that were circulated through RMC No. 62-2020 and No. 101-2020, which is based on the International Non-Proprietary Name (INN) or generic name of the drug products that include salt forms.
BIR CIRCULARIZES ONLINE APPLICATION FOR TAX CLEARANCE FOR GOVERNMENT BIDDING
NOVEMBER 17, 2020
Revenue Memorandum Circular (RMC) No. 121-2020, issued on November 17, 2020, circularizes the availability of the online application for Tax Clearance for Bidding Purposes and Tax Compliance Verification Certificate (eTCBP/TCVC). The circular details the policies, documentary requirements, and the procedures in the application. In case of denial of the application, the taxpayer-applicant shall be required to re-apply for TCBP/ICVC, re-submit the application together with the complete the documentary requirements, and comply with the prescribed criteria. TCBP and TCVC has a validity of one (1) year and 90 days validity, respectively, from the date of the issuance, unless sooner revoked for valid reasons.
BIR CIRCULARIZES CUSTOMIZED INFORMATION ON BUSINESS SET-UP & TAX COMPLIANCE OF VARIOUS CLASSIFICATIONS OF TAXPAYERS
NOVEMBER 16, 2020
Revenue Memorandum Circular (RMC) 131-2020 circularizes the flyers for professionals, corporations, and online sellers which aim to provide stakeholders with customized information based on the taxpayers’ classification.
BIR CLARIFIES TAX EXEMPT PROVISIONS OF RETIREMENT UNDER BAYANIHAN LAW 2
NOVEMBER 9, 2020
Revenue Memorandum Circular (RMC) No. 120-2020 clarifies the exemption from income tax of the retirement benefits received by employees from June 5, 2020, to December 31, 2020, pursuant to Bayanihan to Recover as One Act (Bayanihan 2), as implemented under Revenue Regulations (RR) No. 29-2020. As clarified, only the amount received and covered by the registered retirement plan will be exempt from income tax, provided that the retirement and its receipt are within the covered period (i.e., June 5, 2020, to December 31, 2020). The amount that is in excess of the retirement plan shall be taxable.
RR No. 29-2020 requires the submission of the list of recipients of retirement benefits and other income payments exempt from income tax paid by employers from June 5 to December 31, 2020.
BIR CIRCULARIZES THE AVAILABILITY OF THE 7.7. VERSION OF OFFLINE E-BIR FORMS
NOVEMBER 6, 2020
Revenue Memorandum Circular (RMC) No. 118-2020 circularizes the availability of the new offline electronic BIR Form Package. The new version includes the January 2018 version of BIR Forms 1604-C, 1604-F, and 1604-E.
BIR IMPLEMENTS BAYANIHAN 2 PROVISIONS ON ADDITIONAL SOURCES OF COVID-RELIEF FUNDS COMING FROM GAMING REVENUES
OCTOBER 30, 2020
Revenue Regulations (RR) No. 30-2020 prescribes the rules and regulations to implement Section 11(f) and (g) of Republic Act (R.A.) No. 11494 otherwise known as “Bayanihan 2.” It reiterates the liability of offshore gaming licensees, gaming operators, gaming agent, service providers and gaming support on the following taxes derived from gaming and non-gaming operations, which are likewise additional sources of COVID-19 funding, to wit:
a. 5% franchise tax imposed on the gross bets or turnovers, or the agreed pre-determined minimum monthly revenues from gaming operations earned, whichever is higher.
b. Income tax, Value-Added Tax (VAT), and other applicable taxes imposed on income from non-gaming operations earned.
Philippine Amusement and Gaming Corporation (PAGCOR) and/or the company awarded or chosen as its third-party intermediary/audit platform are directed to furnish the BIR with information related to gross bets or turnover earned, minimum guarantee fee or the minimum amount of regulatory fees paid, and other relevant data, such as list of licensees and accredited service providers, number of foreign nationals employed, among others.
Non-payment, underpayment and/or payment of taxes computed not in accordance with the prevailing official exchange rate at the time of payment shall be considered fraudulent acts and subject to incremental penalties. Likewise, the BIR shall implement closure order against entities which fail to pay the taxes due and such erring entities shall cease to operate. After two years or upon determination that the threat of COVID-19 has been contained or abated, whichever comes first, the revenues derived from franchise taxes on gross bets or turnovers and income from non-gaming operation, shall continue to be collected and shall accrue to the General Fund of the Government.
BIR CIRCULARIZES THE AVAILABILITY OF EFPS VERSION OF EXCISE TAX RETURNS ON SWEETENED BEVERAGES
OCTOBER 20, 2020
Revenue Memorandum Circular (RMC) No. 114-2020 circularizes the availability of eFPS version of BIR Form 2200-S on the Excise Tax Returns on Sweetened Beverages.
BIR CLARIFIES THE EFFECTIVITY DATE OF THE R.A. NO. 11467 AMENDING CERTAIN PROVISIONS OF THE 1997 TAX CODE
OCTOBER 19, 2020
Revenue Memorandum Circular (RMC) No. 113-2020 further clarifies the effectivity date of R.A. No. 11467, which amends certain provisions of the 1997 Tax Code on certain VAT-exempt transactions and transactions subject to excise tax, as circularized under RMC No. 65-2020.
The Act was published on the website of the Official Gazette on January 23, 2020 and was later published in printed form on the Official Gazette’s February 10, 2020 issue. RMC No. 65-2020 circularized the provision of the Act which provides that it shall take effect immediately after its complete publication in a newspaper of general circulation or on January 27, 2020.
In this regard, RMC No. 98-2020 clarifies that the Act was made effective upon its complete publication on the website of the official Gazette, thus, became effective beginning January 23, 2020. There is neither a law nor any doctrinal court decision expressly stating that online publication of a statute by the Official Gazette is invalid. The Secretary of the Department of Justice explained that what is important is the “fact” of publication by the official publisher of the government serving constructive notice to the public that the law has been duly enacted.
BIR CLARIFIES WORK-AROUND PROCEDURES ON ENLISTING & DELISTING OF LT
OCTOBER 16, 2020
Revenue Memorandum Circular (RMC) No. 112-2020 clarifies the suspension of enlisting/delisting of Large Taxpayer (LT) to January 1, 2021.
Highlights include:
a. All transactions of affected taxpayers, both Head Office/s and all branches, shall be handled by the Revenue District Offices (RDOs) or LT Service (LTS) where they are registered prior to July 1, 2020.
b. All Certificates of Registration issued on or after July 1, 2020, to the affected LTs shall be valid and may be posted at the principal place of business.
c. Principal and supplementary receipts/invoices based on duly approved Authority to Print (ATP) issued on or after July 1, 2020, shall remain valid.
BIR ISSUES CLARIFICATIONS ON THE AVAILMENT OF VAPP
OCTOBER 15, 2020
Revenue Memorandum Circular (RMC) No. 111-2020 clarifies certain issues relative to the Voluntary Assessment and Payment Program (VAPP) pursuant to Revenue Regulations (RR) No. 21-2020.
BIR IMPLEMENTS THE PROVISIONS OF BAYANIHAN 2 ON TAX EXEMPTION OF CERTAIN PAYMENTS
OCTOBER 15, 2020
Revenue Regulations (RR) No. 29-2020 implements the provisions of Republic Act (R.A.) No. 11494, otherwise known as the “Bayanihan to Recover as One Act” on the tax exemption of certain income payments.
The following are exempt from withholding tax and shall be excluded from gross income:
a. Retirement benefits received from June 5, 2020, to December 31, 2020, by officials and employees of private firms, provided that such is in accordance with a retirement benefit plan duly registered with the BIR. However, re-employment within the succeeding 12-month period shall be construed as non-retirement and the retirement benefits previously received shall be taxed accordingly.
b. COVID-19 Special Risk Allowance received by health worker, either private or public.
c. Actual Hazard Duty Pay given to Human Resources for Health or persons temporarily hired to complement or supplement the current health workforce.
d. Compensation paid to public or private health workers who have contracted COVID-19 in the line of duty, amounting to: (1) PHP 1,000,000 in case of death; or (2) Php 100,000 in case of severe or critical sickness; or (3) PHP 15,000 in case of mild or moderate sickness.
BIR ISSUES REGULATIONS ON THE TAX INCENTIVES FOR THE MANUFACTURE OR IMPORTATION OF CERTAIN COVID-19 EQUIPMENT, SUPPLIES, OR GOODS
OCTOBER 15, 2020
Revenue Regulations (RR) No. 28-2020 implements Section 4(cc) and Section 18 of Republic Act (R.A.) No. 11494, otherwise known as the “Bayanihan to Recover As One Act” which provides that the importation of goods identified as critical products, essential goods, equipment, or supplies needed to contain and mitigate COVID-19 shall be exempt from Value-Added Tax (VAT), excise tax, and other fees. However, for the purpose of claiming tax exemption, taxpayer claiming such exemption must present a certification from the Department of Trade and Industry (DTI) that the equipment and supplies being imported are not locally available or of insufficient quality and preference. The grant of such exemption shall be in effect from June 25, 2020, to December 19, 2020. Likewise, inputs, raw materials, and equipment necessary for the manufacture of essential goods of medical grade related to containment and mitigation of COVID-19, whether locally-sourced or imported by a registered manufacturer, shall likewise be exempt from VAT provided that such manufacturer has a License to Operate issued by the Food and Drug Administration-Department of Health (FDA-DOH), and a Sworn Declaration that the items bought by such manufacturer shall be used to manufacture the essential goods to contain and mitigate COVID-19.
BIR SUSPENDS THE FILING OF THE 90-DAY PROCESSING OF VAT REFUND CLAIMS
OCTOBER 6, 2020
Revenue Regulations (RR) No. 27-2020 implements Section 4(tt) of R.A. No. 11494, otherwise known as the “Bayanihan to Recover As One Act” which prescribes the extension of the deadline of filing of VAT refund claims whose prescription falls during the effectivity of the law or until the next adjournment of the 18th Congress on December 19, 2020. It can be recalled that under Section 112 of the 1997 Tax Code, as amended, a taxpayer may file a claim for a refund of input taxes attributable to zero-rated or effectively zero-rated sales within two (2) years after the close of the taxable quarter when the sales were made.
The 90-day processing of VAT refund claims is likewise suspended during the effectivity the law. In areas where Enhanced Community Quarantine (ECQ) and Modified Enhanced Community Quarantine (MECQ) is in force even after the effectivity of the law, the deadline of the filing and suspension of processing shall be extended for an additional period of 30 days after the lifting of the ECQ or MECQ.
BIR CLARIFIES THE PROPER MODES OF SERVICE OF THE LOA
OCTOBER 6, 2020
Revenue Memorandum Circular (RMC) No. 110-2020 clarifies the proper modes of service of the Letter of Authority (LOA) in the light of many instances in which the taxpayer or his duly authorized representative cannot be found in the registered address. Specifically, it clarifies the detailed procedures and guidelines on how the personal, substituted, and mail services shall be undertaken.
BIR CIRCULARIZES THE AVAILABILITY OF VAPP APPLICATION & PAYMENT FORMS
OCTOBER 6, 2020
Revenue Memorandum Circular (RMC) No. 108-2020 circularizes the availability of the Voluntary Assessment and Payment Program (VAPP) and Payment Forms (i.e., BIR Form 2119, 0622, respectively). These forms can now be accessed in the BIR website under the BIR Forms Section. However, these forms are not yet available under eFPS and eBIRForms. Payment through BIR electronic payment channels such as G-Cash and PayMaya is not yet allowed.
BIR ISSUES ATC FOR VAPP
OCTOBER 6, 2020
Revenue Memorandum Order (RMO) No. 34-2020 provides for the creation of Alphanumeric Tax Code (ATC) for Voluntary Assessment and Payment Program (VAPP) availment.
BIR ISSUES IRR ON THE 60-DAY MORATORIUM UNDER BAYANIHAN 2
SEPTEMBER 30, 2020
Revenue Regulations (RR) No. 24-2020 implements Section 4 (uu) of Republic Act (R.A.) No. 11494, otherwise known as the “Bayanihan to Recover as One Act.” Section 44 (uu) of the law mandates lenders under the supervision of the Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), and the Cooperative Development Authority (CDA), including the Government Service Insurance System (GSIS), the Social Security System (SSS), and the Home Development Mutual Fund (Pag-IBIG) to provide for a one-time 60-day grace period on loans falling due on or before December 31, 2020. Further, it provides for the exemption from additional Documentary Stamp Tax (DST) on loan term extensions or restructuring.
BIR ISSUES IRR ON THE REPEAL OF OPT ON SALE OR EXCHANGE OF STOCK THROUGH IPO UNDER BAYANIHAN 2
SEPTEMBER 30, 2020
Revenue Regulations (RR) No. 23-2020 implements Section 6 of Republic Act (R.A.) No. 11494, otherwise known as the “Bayanihan to Recover as One Act” which repeals Section 127(B) of the 1997 Tax Code, as amended, imposing Percentage Tax on sale, exchange, or other disposition, through Initial Public Offering (IPO), of shares of stock in closely held corporations. Under the law, sale, exchange, or other disposition of shares of stock of closely held corporations, through IPO, shall no longer be subject to Percentage Taxes imposed in Section 127(B) of the Tax Code, as amended, upon the effectivity of R.A. No. 11494
BIR INSTRUCTS BANKS TO ALLOW THE FILING & PAYMENT OF PENALTIES OF DIGITAL TAXPAYERS
SEPTEMBER 25, 2020
Bank Bulletin No. 2020-15 instructs all Authorized Agent Bank (AAB) to allow the filing and payment of taxpayers engaged in digital transactions (digital taxpayers as previously defined in RMC No. 60-2020) without the imposition of penalties. Upon filing and payment, the digital taxpayers are required to attach their Certificate of Registration (COR).
BIR AMENDS THE POLICIES ON RESPONDING TO NOTICE OF DISCREPANCY ASSESSMENT
SEPTEMBER 16, 2020
Revenue Regulations (RR) No. 22-2020 amends RR No. 7-2020, which provides the issuance of a Notice of Discrepancy (NoD) as part of the due process requirement pursuant to RR No. 2-1998.
Under the new rules, the discussion of discrepancy shall in no case extend beyond 30 days from receipt of the NoD. In case of partial or total disagreement of the taxpayer on the proposed assessment, the district office shall endorse the tax docket to the Revenue Regional Office within ten (10) days from the conclusion of the discussion for the issuance of the Preliminary Assessment Notice.
BIR EXTENDS THE FILING DEADLINES OF THE SUBMISSION OF BIR FORM 1709 OR THE INFORMATION RETURN ON RELATED PARTY TRANSACTION
SEPTEMBER 15, 2020
Revenue Memorandum Circular (RMC) No. 98-2020 extends the deadline of the submission of BIR Form 1709 or the Information Return on Related Party Transaction (RPT) in consideration of the adverse effect of COVID-19. This is part of the Bureau’s relief measures and to give taxpayers ample time to accomplish and submit the required documents.
It may be recalled that under Revenue Regulations (RR) No. 19-2020, the Bureau required that BIR Form 1709 should be a part of the attachments in the submission of the Annual Income Tax Returns beginning those with ending period of March 31, 2020.
BIR CLARIFIES THE TAXABILITY OF EARNINGS OF ALIEN INDIVIDUALS TRAPPED IN THE PHILIPPINES AS A RESULT OF COVID-19 RESTRICTIONS
AUGUST 17, 2020
Revenue Memorandum Circular (RMC) No. 83-2020 clarifies the taxability of earnings of alien individuals trapped in the Philippines and the unintended creation of Permanent Establishment (PE) during the pandemic.
Highlights include:
1. Employment income will not be subject to tax in the Philippines if the following conditions concur:
a. The employee has not been present in the Philippines for more than 183 days in aggregate in the year of income.
b. His remuneration is paid to him by, or on behalf of an employer that is not a resident of the Philippines; and
c. His remuneration is not deductible against the profits of a permanent establishment which the foreign employer has in the Philippines.
2. Conversely, the Philippines may tax the employment income of a non-resident alien only if any of the following three tests is met:
a. The employee is present for more than 183 days in the Philippines.
b. The employer is a resident of the Philippines; or
c. A non-resident employer has a permanent establishment in the Philippines which bears the remuneration.
3. When an individual is prevented from leaving the Philippines because of travel restriction imposed by the government due to the pandemic, the individual will not be regarded as being present in the Philippines for tax residence purposes.
4. For permanent establishment to exist, there must be a place of business with some degree of permanency, and where business is carried on at a particular location that is at the disposal of the enterprise for that purpose. Thus, working from home would not create a permanent establishment of the foreign enterprise in the Philippines because the conduct of business activities lacks a certain degree of permanency, and the home office is not at the disposal of the foreign enterprise. However, if the home office is used on a continuous basis for carrying on the business activities of the foreign enterprise, even after the pandemic, the home office may be considered to be at the disposal of the enterprise.
BIR AMENDS THE FAIR VALUE COMPUTATION OF TAXATION OF ORDINARY SHARES OF STOCKS
AUGUST 17, 2020
Revenue Regulations (RR) No. 20-2020 amends the taxation rules on sale, barter, exchange, or other disposition of ordinary shares of stocks or stocks which are not listed and traded in the Local Stock Exchange. The book value of the common shares of stock or the liquidation value of the preferred shares of stock need not be adjusted to include any appraisal surplus from any property of the corporation not reflected or included in the latest Audited Financial Statements (AFS) in order to determine the Fair Market Value (FMV) of the shares of stock. The latest AFS shall be sufficient in determining the FMV of the shares of stock.
It may be recalled that that in RR No. 6-2008, the BIR required the appraisal value of the property contained in the AFS for the purpose of sale or disposition of shares of stocks.
BIR ROLLS OUT THE 10-YEAR DIGITAL TRANSFORMATION ROADMAP
AUGUST 13, 2020
Revenue Memorandum Order (RMO) No. 27-2020 rolls out the BIR Digital Transformation (DX) Roadmap to adapt to the fast-evolving digital economy and improve the efficiency on revenue collection. The roadmap is anchored on three (3) principles, namely: (1) adopting a people-first approach; (2) instituting a process perspective; and (3) embracing digital technology.
Considerations in the setting of roadmap include:
1. Elevate taxpayers’ experience and innovate the BIR processes.
2. Enhance efficiency on BIR internal processes.
3. Reformulating BIR policies and the Tax Code to enable DX in BIR
4. Adopt digital technology in BIR.
Roadmap is set to be implemented in two (2) phases:
Phase 1 (2020-2023) aims to enhance the taxpayers' knowledge in digital transactions, ease taxpayers’ access to the latest tax information, and use the taxpayers’ data to understand the taxpayers’ behavior. It also aims to fasten registration, filing, and payment for all taxpayers, as well as giving them 24/7 access to the BIR.
Phase 2 (2024-2030) aims to create a solid platform digital economy transaction, continue to improve through adapting the latest digital technology, offer customized services to the taxpayer, and collection, audit, and enforcement using the data gathered.
BIR PRESCRIBES THE USE OF THE REVISED EXCHANGE OF INFORMATION WORKING MANUAL
AUGUST 11, 2020
Revenue Memorandum Order (RMO) No. 26-2020 prescribes the use of the Revised Exchange of Information (EOI) Working Manual by the International Tax Affairs Division (ITAD) and by concerned BIR officers in relation to the assessment and collection enforcement of taxes involved under EOI tax treaty provision. The streamline processes are now aligned with the recommendation of the Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) and consistent with the Ease of Doing Business and Efficient Government Service Delivery Act of 2018.
BIR CLARIFIES THAT eAFS ALSO APPLIES TO FISCAL YEAR ACCOUNTING PERIOD TAXPAYERS
AUGUST 11, 2020
Revenue Memorandum Circular (RMC) No. 82-2020 prescribes the guidelines on the use of Electronic Audited Financial Statements (eAFS) system for the submission of attachments to the Annual and Quarterly Income Tax Returns for taxpayers with fiscal year accounting period. All concerned taxpayers availing the facilities of eAFS shall scan the required documents and comply with the prescribed procedures discussed in the circular.
BIR CLARIFIES WHAT IS MEANT BY ECQ UNDER RMC NO. 74-2020
JULY 30, 2020
Revenue Memorandum Circular (RMC) No. 77-2020 clarifies that the ECQ referred to under RMC No. 74-2020 means Enhanced Community Quarantine and not Extreme Community Quarantine.
BIR CLARIFIES ISSUES ON THE ACCOMPLISHMENT OF BIR FORM 1709 & THE REQUIRED ATTACHMENTS
JULY 29, 2020
Revenue Memorandum Circular (RMC) No. 76-2020 clarifies certain issues regarding the submission of Information Return on Transactions with Related Party (BIR Form 1709) and the required attachments to the Annual Income Tax Returns (ITR) pursuant to Revenue Regulations (RR) No. 19-2020.
Highlights include:
a. Purpose is to aid the BIR in the evaluation of transfer pricing risk assessment in preparation for thorough audit and the BIR compliance on inter-country exchange of information.
b. Covered taxpayers include taxpayers with Related-Party Transactions (RPT), regardless of amount and volume of transactions. Non-stock, non-profit entities engaged in business and with RPT are also covered. Compliance starts with taxpayers with fiscal year ending March 31, 2020, and onwards citing the effectivity of the regulations last July 25, 2020. Taxpayers with fiscal year ending March 31, 2020, regardless of whether they have already submitted the Annual ITR on or before July 15, 2020, are given until September 30, 2020 to submit.
c. Deadline and manner of filing.
d. Transactions to be disclosed including pending Tax Treaty Ruling Application (TTRA) filed.
e. Required attachments such as the Transfer Pricing Documentation used by taxpayer as basis of setting arm’s length pricing, whether prepared by parent company or the other transacting related party, contracts and agreements, proof of taxes paid in a foreign country, should there be any;
f. Penalties for non-compliance.
BIR EXTENDS THE DEADLINE OF REGISTRATION OF BUSINESS ENGAGED IN DIGITAL TRANSACTIONS
JULY 29, 2020
Revenue Memorandum Circular (RMC) No. 75-2020 circularizes the extension of deadline for business registration of those engaged in digital business identified under RMC No. 60-2020, with no penalty imposition, from July 31, 2020, to August 31, 2020. It may be recalled that under RMC No. 60-2020, the BIR encouraged all taxpayers under the said RMC to register with the Bureau. This RMC also clarified that those identified taxpayers in the RMC who are not complying with registration requirements and failed to declare correct tax due, shall be penalized.
BIR AMENDS THE PROPER RDO TO PROCESS ATRIG FOR VAT EXEMPTION OF IMPORTED PRESCRIPTION DRUGS & MEDICINES
JULY 29, 2020
Revenue Memorandum Order (RMO) No. 25-2020 amends certain provisions of RMO No. 23-2020 relative to the offices that will process and issue Authority to Release Imported Goods (ATRIG) for Value-Added Tax (VAT) Exemption on the importation of prescription drugs and medicines. For VAT purposes, the ATRIG shall be issued on all importations of articles exempt from VAT at the Revenue District Office (RDO) having jurisdiction over the port of entry. For consistency in the issuance of ATRIG for VAT-exempt transactions, the RDO having jurisdiction over the port of entry shall process the application for ATRIG by the manufacturers, distributors, wholesalers, and retailers of drugs and medicines included in the “list of approved drugs and medicines” issued by the Department of Health.
BIR CLARIFIES THE SUSPENSION OF THE RUNNING OF THE PERIOD OF STATUTE OF LIMITATIONS
JULY 22, 2020
Revenue Memorandum Circular (RMC) No. 74-2020 clarifies that the running of Statute of Limitations on the assessment and collection enforcement shall be suspended starting March 16, 2020, until the lifting of the Enhanced Community Quarantine (ECQ) and for 60 days thereafter. This means that all prescribing assessments, issuances, and service of assessments notices are suspended, for the mean time, on areas under ECQ.
The definition of ECQ is further clarified in reference to RMC No. 77-2020.
Under the previous RMC No. 34-2020, the running of the Statute of Limitations is until 60 days after the lifting of the state of national emergency and applies nationwide.
BIR REMOVES THE SUBMISSION OF PHOTOCOPIES OF DOCUMENTARY REQUIREMENTS EVIDENCING QUALIFIED LOANS NOT SUBJECT TO DST UNDER ECQ
JULY 17, 2020
Revenue Memorandum Circular (RMC) No. 72-2020 amends RMC No. 36-2020 which provides that there shall be no additional Documentary Stamp Tax (DST) to be imposed on credit extension and credit restructuring on qualified loans starting the first day of the Enhanced Community Quarantine (March 17, 2020), subject to the evaluation of the BIR. RMC No. 72-2020 now removes the submission of photocopies of documentary requirements evidencing qualified loans under RMC 26-2020. Covered institutions must submit within sixty (60) days from the lifting of ECQ, a copy of summary listing of all pre-existing loans, pledges, and other instruments as of March 17, 2020, which were granted extension of payment and/or maturity periods, with the prescribed BIR format.
BIR CIRCULARIZES THE ANTI-RED TAPE ADVISORY TO SPEED UP DELIVERY OF GOVERNMENT SERVICES
JULY 17, 2020
Revenue Memorandum Circular (RMC) No. 71-2020 circularizes the Anti-Red Tape Authority Advisory No. 1 Series of 2020 for the adoption of fast-track measures in all government agencies during the COVID-19 state of calamity. To speed up the delivery of government services, all government agencies may be guided by the measures provided such as, but not limited to, granting extension of the validity of permits that are expiring within the period of State of National Emergency, consider electronic submission and approvals, suspension of the notarization requirement for documents to be submitted unless required by law, and employing an online payment scheme or outsourced payment center collections.
BIR CIRCULARIZES THE LIST OF EXPIRED TCC
JULY 17, 2020
Revenue Memorandum Circular (RMC) No. 70-2020 circularizes the list of expired Tax Credit Certificate (TCC) in compliance with the transitory provisions of Revenue Regulations (RR) No. 14-2020.
BIR CLARIFIES THE ISSUANCE OF ATRIG FOR VAT EXEMPTION OF SALE & IMPORTATION OF PRESCRIPTION DRUGS & MEDICINES
JULY 15, 2020
Revenue Memorandum Order (RMO) No. 23-2020 clarifies the issuance of Authority to Import Goods (ATRIG) for Value-Added Tax (VAT) exemption of the sale and importation of prescription drugs and medicines with the following effectivity dates:
a. Diabetes, high cholesterol, and hypertension beginning January 27, 2020
b. Cancer, mental illness, tuberculosis, and kidney diseases beginning January 1, 2023
Revenue District Office (RDO) No. 33-Intramuros-Ermita-Malate of Revenue Region No. 6-Manila shall process the application of ATRIG, for consistency and uniformity.
BIR UPDATES THE POLICIES & GUIDELINES ON THE TAX REPORTING OF DESTRUCTED INVENTORIES & ASSETS
JULY 10, 2020
Revenue Memorandum Order (RMO) No. 21-2020 updates the policies, guidelines, and procedures for the inspection or supervision of the destruction/disposal and determination of deductible expense pertaining to the inventory of goods/assets which have been declared as waste or obsolete due to the spoilage, deterioration, obsolescence, expiration, or other causes rendering the same unfit for sale or for use in the production.
The RMO now allows third-party to witness the destruction, subject to the approval of the BIR.
Highlights include:
1. Prior application shall be filed with the prescribed forms, pertinent documents, and annexes attached to the RMO.
2. Timeline of application and response of the BIR
3. Manner of witnessing, if BIR-initiated or third-party who may be the external auditor or any nominated person of the taxpayer with BIR accreditation and subject to the approval of the BIR.
4. Timeline on the completion and scheduling
5. Proper valuation of the inventory or assets disposed/destructed.
6. Supporting document on the deductibility of losses with prescribed forms and annexes attached to the RMO.
7. BIR post audit guidelines, reporting, and procedures to be followed by the BIR before, during, and after the destruction.
BIR CIRCULARIZES THE GUIDELINES IN THE FILING & SUBMISSION OF THE REVISED SALN
JULY 9, 2020
Revenue Memorandum Circular (RMC) No. 68-2020 circularizes the guidelines in the filing and submission of the revised Statement of Assets, Liabilities, and Networth (SALN) form for the year 2020 pursuant to the Civil Service Commission (CSC) Memorandum Circular No. 13 Series of 2020.
BIR PRESCRIBES THE USE OF THE INFORMATION RETURN ON RELATED-PARTY TRANSACTIONS
JULY 8, 2020
Revenue Regulations (RR) No. 19-2020 prescribes the use of Information Return on Related Party Transactions or the BIR Form 1709 to ensure the proper disclosures of related party transactions as well as observance of arm’s length principle to protect the tax base.
The underlying reason for this new requirement is the effective implementation of the Philippine Accounting Standards (PAS) No. 24, Related Party Disclosures, for tax purposes. Under this PAS, an entity's financial statements shall contain the disclosures necessary to draw attention to the possibility that its financial position and profit or loss may have been affected by the existence of related parties and by transactions and outstanding balances, including commitments, with such parties.
Highlights include:
a. Circumstances to be considered in the determination whether a person or entity is a related party such as control, influence, management, family relationship, equity and ownership, and transactional relationships.
b. Required related party disclosures on the financial statements, either by a reporting entity or a related party, to provide an understanding of the potential effect of the relationship on the financial statements.
c. Procedures and guidelines on how to fill-up BIR Form 1709, as well as the required attachments.
BIR AMENDS THE IRR ON VAT EXEMPTION OF SALE & IMPORTATION OF PRESCRIPTION DRUGS & MEDICINES UNDER THE TRAIN LAW
JULY 8, 2020
Revenue Regulations (RR) No. 18-2020 amends pertinent provisions on the Value-Added Tax (VAT) exemption of sale and importation of prescription drugs and medicines under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
The following transactions shall be exempt from VAT:
a. Sale or importation of prescription drugs and medicines for diabetes, high cholesterol, and hypertension beginning January 1, 2020
b. Cancer, mental illness, tuberculosis, and kidney diseases beginning January 1, 2023
The VAT exemption shall only apply to sale or importation by the manufacturers, distributors, wholesalers, and retailers of drugs and medicines included in the "list of approved drugs and medicines" issued by the Department of Health (DOH) for this purpose.
BUS OPERATOR & ITS RESPONSIBLE OFFICER CONVICTED
JULY 7, 2020
After more than ten (10) years, Court of Tax Appeals (CTA) found a bus operator and its responsible officer guilty beyond reasonable doubt for violation of the 1997 Tax Code covering the taxable years 1998 to 2004. The CTA held that all the pieces of evidence presented by the Prosecution from different government agencies such as the Bureau of Internal Revenue (BIR), Securities and Exchange Commission (SEC), Land Transportation Regulatory Board (LTFRB), and Land Transportation Office (LTO) show that the taxpayer conducted business contrary to the claim of its officer that the operations began only in 2005. Further, the CTA held that the taxpayer had knowledge of the obligation to file the returns but failed to comply. Both the bus operator and its responsible officer were convicted and ordered to pay fine of Php 100,000 and Php 50,000 respectively. In addition, the officer will likewise suffer straight penalty of imprisonment for one (1) year.
BIR FURTHER SUSPENDS THE DUES DATES IN THE APPLICATION TO PROCESS VAT REFUND
JUNE 25, 2020
Revenue Regulations No. 16-2020 further suspends the due dates in the application to process Value-Added Tax (VAT) refund claim for taxable quarters affected by the declaration of the national state of emergency. Considering all the due dates will fall due at the same time, it will be difficult for the BIR to handle influx of claims. To address this and ease the burden for taxpayer-claimant, the filing of claims for VAT refund for the following taxable quarters shall be until the specified due dates:
a. Calendar quarter ending March 31, 2018-July 15, 2020
b. Fiscal quarter ending April 30, 2018-July 31, 2020
c. Fiscal quarter ending May 31, 2018-August 15, 2020
d. Calendar quarter ending June 30, 2018-August 31, 2020
Said due dates apply to those areas declared in a General Community Quarantine (GCQ) state. For areas under Enhanced Community Quarantine (ECQ) or Moderate Enhanced Community Quarantine (MECQ), deadline shall be 30 days from lifting of ECQ/MECQ state or the above stated deadline, whichever comes later.
The 90-day period of processing VAT refund claims shall be suspended in areas where the ECQ or MECQ is still in force.
BIR CIRCULARIZES THE LIST OF PRESCRIPTION DRUGS & MEDICINES FOR DIABETES, HIGH-CHOLESTEROL & HYPERTENSION EXEMPT FROM VAT BEGINNING JANUARY 27, 2020
JUNE 23, 2020
Revenue Memorandum Circular (RMC) No. 62-2020 circularizes the “List of Prescription Drugs and Medicines for Diabetes, High-Cholesterol, and Hypertension Exempt from the Value-Added Tax (VAT) Beginning January 27, 2020” provided by the Food and Drug Administration of the Department of Health.
BIR FURTHER EXTENDS THE DEADLINE FOR TAX AMNESTY ON DELINQUENCIES
JUNE 19, 2020
Revenue Regulations (RR) No. 15-2020 further extends the availment of the tax amnesty on delinquencies until December 31, 2020. The extension intends to give taxpayers ample time to settle their tax delinquencies while allowing the BIR to increase its collection from this new tax amnesty program. The regulations likewise provide deadlines for BIR offices to process the documentary requirements needed to avail of the tax amnesty. The Certificate of Delinquencies/Tax Liabilities must be issued or denied with legal and factual basis within three (3) working days from the submission date of the request. In addition, the completed amnesty application and return must be endorsed for payment by the BIR within one (1) working day from complete submission. This streamlining process ensures the BIR’s prompt processing of tax amnesty applications.
BIR CIRCULARIZES THE EXTENDED DEADLINE FOR THE AVAILMENT OF TAX AMNESTY ON DELINQUENCIES
JUNE 15, 2020
Revenue Memorandum Circular (RMC) No. 61-2020 circularizes the extended deadline for the availment of tax amnesty on delinquencies from June 22, 2020, to December 31, 2020.
BIR CLARIFIES THE OBLIGATIONS OF PERSONS CONDUCTING BUSINESS TRANSACTIONS THROUGH ANY FORMS OF ELECTRONIC MEDIA
JUNE 10, 2020
Revenue Memorandum Circular (RMC) No. 60-2020 circularizes the notice of the BIR that all persons conducting digital business transactions, such as but not limited to sellers/merchants and their partners in payment gateway, delivery channels, internet service providers and other facilitators, are required to register with the BIR on or before July 31, 2020. Otherwise, the corresponding penalty will be imposed. Past transactions are encouraged to be declared and paid with the corresponding tax without the penalty if paid on or before July 31, 2020. Compliance includes issuance of official receipts or sales invoice, maintenance of registered books of accounts and accounting records, withholding of tax, and filing the corresponding tax returns and payment on time.
BIR REITERATES RESPONSIBILITIES OF AAB TO ACCEPT AITR UNTIL JUNE 15, 2020
JUNE 10, 2020
Bank Bulletin No. 2020-08 directs Authorized Agent Banks (AABs) to accept Annual Income Tax Returns (AITR) for the calendar year 2019 until June 15, 2020, Monday, since June 14, 2020, falls on a weekend, to extend banking hours until 5:00 p.m. and to accept the tax payments from taxpayers who are already within the bank’s premises by the close of the said extended banking hour.
BIR CIRCULARIZES THE UPDATED LIST OF ACCREDITED MICROFINANCE NGOs
JUNE 9, 2020
Revenue Memorandum Circular (RMC) No. 58-2020 circularizes the Updated List of Microfinance Non-Government Organizations (NGOs) accredited by Microfinance NGO Regulatory Council (MNRC) as of May 26, 2020. Under the Implementing Rules and Regulations of the Republic Act No. 10693 (Microfinance NGO Act), a Certificate of Accreditation shall be valid for a period of three (3) years from the date of issuance, unless earlier revoked by the MNRC.
BIR RESUMES ENFORCEMENT ACTIVITIES THAT WERE RESTRICTED UNDER ECQ
JUNE 8, 2020
BIR Operations Memorandum No. 27-2020, issued on June 8, 2020, directs all concerned revenue officials and employees to resume enforcement activities that were restricted under the Enhanced Community Quarantine (ECQ). Enforcement activities include field audit and service of Letters of Authority, assessment notices, and Subpoena Duces Tecum.
BIR UPDATES INTERNAL PROCEDURES RELATIVE TO THE ACCEPTANCE OF PROPERTY DONATIONS IN FAVOR OF THE BIR
JUNE 3, 2020
Revenue Memorandum Order (RMO) No. 15-2020 updates the procedures in the acceptance of property donations to the BIR pursuant to Revenue Delegation Authority Order (RDAO) No. 4-2010, as amended by RDAO No. 4-2019. Upon receipt of communication from the donor signifying its desire to donate a property to the BIR, the user or intended beneficiary, through the Assistant Commissioner or the Regional Director concerned shall follow the procedures in the acceptance of property donations specified in the RMO. The signatory to the Deed of Donation for Real Properties, and other assets above Php 12 Million should be the Commissioner of Internal Revenue. Otherwise, the signatory thereon is the concerned Deputy Commissioner.
BIR AMENDS THE PROCEDURES ON CASH CONVERSION OF TCC
MAY 28, 2020
Revenue Regulations (RR) No. 14-2020 amends pertinent provisions on cash conversion of unutilized Tax Credit Certificate (TCC) under RR No. 5-2000. Any TCC, which remains unutilized for more than one (1) year at any given interval of time during its validity, shall be converted into cash with prior written notice by the BIR, subject to the availability of funds and in accordance with the procedural requirements that will be issued by the BIR for this purpose.
BIR PROVIDES AN ADDITIONAL PAYMENT CHANNEL FOR INTERNAL REVENUE TAX
MAY 28, 2020
Revenue Memorandum Circular (RMC) No. 54-2020 introduces PayMaya as an additional channel of payment of internal revenue taxes.
BIR AMENDS THE GUIDELINES FOR THE AVAILMENT OF SBWS
MAY 27, 2020
Revenue Memorandum Circular (RMC) No. 53-2020 circularizes the amendment to the joint memorandum of the Department of Finance (DOF), Bureau of Internal Revenue (BIR), and Social Security System (SSS) on the guidelines for the availment of Small Business Wages Subsidy (SBWS) Measure.
Relevant amendments include:
a. Expanded coverage of small business employers who may be allowed to complete the application of the program subject to eligibility requirements and availability of funds.
b. Refund procedures should there be any excess subsidy granted.
c. Authority and limitation of the Secretary of Finance to extend payout periods.
BIR CLARIFIES THE FILING OF WITHDRAWAL OF PROTEST ON ASSESSMENT NOTICE FOR PURPOSES OF AVAILMENT OF THE EXTENDED TAX AMNESTY ON DELINQUENCIES
MAY 27, 2020
Revenue Memorandum Circular (RMC) No. 52-2020 clarifies the filing of withdrawal of protest on assessment notices for purposes of availment of tax amnesty. The withdrawal can now be filed through dedicated e-mail address as provided in the circular. The scanned copy of first page of the BIR-received protest letter and duly signed by the taxpayer or his authorized representative is required.
BIR CIRCULARIZES THE PRESIDENTIAL ISSUANCE WHICH ELIMINATES OVERREGULATION TO PROMOTE EFFICIENCY
MAY 27, 2020
Revenue Memorandum Circular (RMC) No. 51-2020 circularizes the Administrative Order No. 23, which prescribes the elimination of overregulation to promote efficiency of government processes, and the Executive Order (E.O) No. 105 which prescribes the creation of a national task force to prevent the entry of animal-borne diseases, contain and control the transmission thereof, and address issues relating thereto.
BIR CONFIRMS THE TAX INCENTIVES OF DUAL TRAINING SYSTEM & VOCATIONAL EDUCATION
MAY 27, 2020
Revenue Memorandum Circular (RMC) No. 50-2020 circularizes the tax incentives granted under Republic Act (R.A.) No. 7686, or An Act to Strengthen Manpower Education and Training in the Philippines, by institutionalizing the Dual Training System and Vocational Education.
BIR PROVIDES ADDITIONAL OPTIONS IN THE ACCEPTANCE & FILING OF 2019 ANNUAL ITR & ATTACHMENTS
MAY 22, 2020
Revenue Memorandum Circular (RMC) No. 49-2020 provides additional options in the acceptance and filing of 2019 Annual Income Tax Returns (ITR) and required attachments. Taxpayers shall now have the option to submit through Revenue Collection Officers (RCOs) or through online Electronic Audited Financial statements (eAFS) of the BIR.
Specific guidelines are as follows:
a. Submission through RCOs
1. RCOs may accept the required attachments to the Annual ITR notwithstanding the Revenue District Office (RDO) having jurisdiction over the taxpayer. Out-of-district filings of ITR and attachments shall be forwarded to the concerned RDOs.
2. ITRs with payments made thru online shall be stamped received by RCOs together with the page of Balance Sheet, Income Statement, and Audit Certificate if applicable.
3. Only two (2) extra copies of AFS will be stamped for corporate filers for SEC submission compliance.
4. For ITRs filed electronically, RCOs shall only accept, and stamp “received” the copies of filing reference number generated from eFPS/e-mail confirmation from the BIR.
b. Submission through eAFS
1. Online filing may be accessed through the BIR webpage www.bir.gov.ph.
2. Taxpayer must scan the documents and save them into PDF files.
3. Required attachments will be grouped into three (3) document files.
4. eAFS portal will issue a system generated Transaction Reference Number and e-mail to the system user, which shall serve as proof of submission in lieu of the manual “Received” stamping.
BIR CLARIFIES THE MANNER OF FILING & ACCEPTANCE OF PAYMENT OF ANNUAL ITR WITH EXTENDED DUE DATE UNTIL JUNE 14, 2020
MAY 22, 2020
Revenue Memorandum Circular (RMC) No. 48-2020 clarifies the manner of filing and acceptance of payment of annual income tax due on or before June 14, 2020, relative to the Annual Income Tax Returns (ITR) filing for the year ended December 31, 2019.
Highlights include the following:
a. Taxpayers are allowed to file and pay their taxes at the nearest Authorized Agent Banks (AABs), regardless of the Revenue District Office (RDO) jurisdiction.
b. Cash payments to Revenue Collection Officers (RCOs) of the nearest Revenue District Office (RDO), even in areas where there are AABs are allowed up to Php 20,000.
c. Revenue Collection Officers (RCOs) may accept check payments without any limitation as to amount, provided that checks are made payable to the Bureau of Internal Revenue (with or without “IFO Name and TIN of the taxpayer” written on the check, as previously required). Likewise, the name and branch of the receiving AAB are dispensed.
BIR AMENDS CERTAIN PROVISIONS RELATIVE TO THE EXTENSION OF DEADLINE ON THE SUBMISSION & FILING OF RETURNS
MAY 21, 2020
Revenue Regulations (RR) No. 12-2020 amends RR No. 10-2020, as amended by RR 11-2020, relative to the extension of deadline on the submission and filing of returns and documents pursuant to the “Bayanihan to Heal as One Act.” It may be recalled that under RR 11-2020, as further clarified in RMC No. 42-2020, 43-2020, and 44-2020, the regulations further extend the deadline for the filing and payment of tax returns and other BIR submissions in relation to the May 15 extension of the ECQ period. A 30-day extension for those returns and submissions falling due in the month of May 2020 was provided and the relaxed rules in the acceptance of tax payments during the Enhanced Community Quarantine (ECQ) period. RR 12-2020 now provides that the extension of due dates shall be made applicable throughout the Philippines. If the new extended due dates fall on a holiday or non-working day, then the submission shall be made on the next working day. Likewise, the defined extended due dates under Section 2 of RR No. 11-2020 shall remain in effect regardless of any extension or modification of quarantine.
BIR CLARIFIES INVOICING COMPLIANCE REQUIREMENTS DURING ECQ
MAY 11, 2020
Revenue Memorandum Circular (RMC) No. 47-2020 circularizes the guidelines on temporary measures on invoicing compliance to be adopted by taxpayers during the Enhanced Community Quarantine (ECQ).
Highlights include:
a. The circular addresses difficulty of taxpayers complying with invoicing compliance due to inaccessibility or unavailability of approved receipts/invoices during ECQ, because of reasons such as expired Authority to Print (ATP), closure of business establishments, unavailability of postal services, and other business limitations.
b. Taxpayers may opt to use any of the following:
1. BIR Printed Receipts/Invoices (BPR/BPI).
2. Scanned Copy of Receipt/Invoice with ATP electronically transmitted to the customer.
3. Computer-aided Receipt/Invoice in excel format not covered by an ATP and electronically transmitted to the customer.
4. Supplementary Receipts/Invoices in lieu of Principal Receipts/Invoices (i.e., Delivery Receipts, Acknowledgment Receipts)
5. Receipt/Invoice using the existing Computerized Accounting System (CAS) or its components with approved PTU or Acknowledgement Certificate sent electronically or via e-mail to the customer; and
6. Receipt/Invoice generated from a newly developed receipting/invoicing software or CAS or its Components without duly approved PTU or Acknowledgment Certificate, which was used to temporarily generate/issue the receipts/invoices and sent electronically to the customer.
c. Any taxpayer who adopted the above work-around procedures shall comply with the following requirements:
1. Send a formal letter informing the BIR of the work-around procedure being implemented. The letter shall be sent via electronic email to designated e-mail addresses as provided in the circular, within three (3) days from the effectivity of the circular.
2. Once the ECQ is lifted, taxpayer should issue the duly authorized receipts/invoices to the customers to cover all transactions for which temporary receipts/invoices were issued. The duly authorized receipts/invoices shall bear the actual date of the transaction.
3. Taxpayer to submit the “Summary of Temporary Receipts/Invoices Issued” pursuant to Annex A of the circular to the respective BIR offices within 90 days from the date of lifting of ECQ.
d. Taxpayers who have access to the receipts/invoices shall not be covered under this circular.
BIR CLARIFIES THE NEED FOR TAX CLEARANCE BEFORE POGO CAN RESUME OPERATIONS
MAY 7, 2020
Revenue Memorandum Circular (RMC) No. 46-2020, issued on May 7, 2020, circularizes the guidelines and requirements for Philippine Offshore Gaming Operators (POGO) Licensees and Service Providers to apply for a BIR Clearance in connection with the resumption of operations. An application letter for the issuance of a BIR Clearance must be submitted to the BIR POGO Task Force via e-mail to pogo.taskforce@bir.gov.ph. The Letter should specify the company name, Tax Identification Number (TIN), business address, authorized representative, and their contact details, plus the monthly regulatory fees paid to the Philippine Amusement and Gaming Corporation (PAGCOR) in prior years. Failure to comply with the conditions as well as submission of falsified or fraudulent documents shall result in the denial of the issuance of a BIR Clearance for resumption of operations.
BIR AMENDS RR NO. 10-2020 PROVIDING NEW DEADLINES ON VARIOUS TAX FILING COMPLIANCE REQUIREMENTS
APRIL 30, 2020
Revenue Regulations (RR) No. 11-2020 amends certain provisions of Revenue Regulations (RR) No. 10-2020, particularly on the extension of deadlines to submit, file and/or pay necessary documents in consideration of the extension of the Enhanced Community Quarantine (ECQ) period until May 15, 2020. The regulations provide new deadlines on various tax filing compliance requirements.
BIR UPDATES THE FORMAT OF CERTIFICATE OF ENTITLEMENT TO 5% TAX CREDIT IN RELATION TO PERA ACT OF 2008
APRIL 20, 2020
Revenue Memorandum Order (RMO) No. 11-2020 amends certain provisions of RMO No. 28-17 relative to the format of Certificate of Entitlement to 5% Tax Credit for Employee Contributor (BIR Form No. 2339) prescribed in relation to the implementation of the Republic Act (R.A.) No. 9505, otherwise known as “Personal Equity Retirement Account (PERA) Act of 2008.” In compliance with the Data Privacy Act of 2012, the form is amended into two separate forms for the Employee without Qualified Employer’s Contribution and the Employee with Qualified Employer’s Contribution.
BIR PRESCRIBES THE ISSUANCE OF TEMPORARY ELECTRONIC COPIES OF VAT CERTIFICATES & VAT IDENTIFICATION CARDS FOR RESIDENT FOREIGN MISSIONS
APRIL 17, 2020
Revenue Memorandum Circular (RMC) No. 44-2020 circularizes the guidelines in addressing the concerns of Resident Foreign Missions (RFMs) regarding the issuance of VAT Certificates (VCs) and VAT Identification Cards (VICs). As recommended by the DFA-OP, the BIR shall temporarily issue electronic copies of VCs and VICs, which shall remain valid only until August 30, 2020. The issued electronic copies shall be renewed within 30 days from the lifting of the Enhanced Community Quarantine (ECQ) following the same requirements and procedures set forth in Revenue Memorandum Order (RMO) No. 10-2019.
BIR CIRCULARIZES THE GUIDELINES ON THE ACCEPTANCE OF PAYMENT OF TAX UNDER ECQ
APRIL 17, 2020
Revenue Memorandum Circular (RMC) No. 43-2020 circularizes the guidelines on the acceptance of payment by the BIR even during the Enhanced Community Quarantine (ECQ) period. Taxpayers may pay at (1) the nearest Authorized Agent Banks (AAB) notwithstanding Revenue District Office (RDO) jurisdiction; and (2) to the concerned Revenue Collection Officer of the nearest RDO. However, payment in cash should not exceed Php 20,000, while those for check payment will have no limitation provided all checks should be made payable to the BIR and not to the AAB.
BIR CIRCULARIZES THE GUIDELINES IN THE FILING OF 2019 ANNUAL ITR
APRIL 17, 2020
Revenue Memorandum Circular (RMC) No. 42-2020 circularizes the guidelines in the filing and payment of 2019 Income Tax Returns (ITR).
BIR AMENDS RR NO. 7-2020 PROVIDING NEW DEADLINES ON VARIOUS TAX FILING COMPLIANCE REQUIREMENTS
APRIL 14, 2020
Revenue Regulations (RR) No. 10-2020 amends certain provisions on recently issued circulars particularly on the extension of deadlines to submit, file and/or pay the necessary documents and/or taxes required under the Tax Code such as, but not limited to, Value-Added Tax (VAT) refunds, One-Time Transaction (ONETT), and monthly/quarterly/annual filing of required returns. If the Enhanced Community Quarantine (ECQ) period will be further extended, the filing of the returns and payment of the corresponding taxes due thereon and submission of reports and attachments falling within the enhanced extended period shall be extended for 30 calendar days from the lifting of the Enhanced Community Quarantine (ECQ).
BIR EXTENDS THE APPLICATION FOR RENEWAL & APPLICATION OF ATP
APRIL 8, 2020
Revenue Memorandum Circular (RMC) No. 41-2020 extends the time of the application for renewal and application of Authority to Print (ATP) receipts/invoices until May 13, 2020, or for 30 calendar days after the lifting of Enhanced Community Quarantine (ECQ), whichever comes later. The circular now allows the use of receipts/invoices which expiration date falls within the ECQ period. However, the said receipts/invoices must be stamped with “Emergency Extension for Use until May 13, 2020.”
BIR FURTHER EXTENDS THE DEADLINE TO SUBMIT POSITION PAPER ON BIR ASSESSMENT, RUNNING OF PERIOD OF PRESCRIPTIONS & FILING OF TAX RETURNS
APRIL 8, 2020
Revenue Memorandum Circular (RMC) No. 39-2020 further extends the deadline of submission and/or filing and payment of certain documents and/or tax returns considering the extended Enhanced Community Quarantine (ECQ).
Extended deadlines include the following:
a. Filing of position paper in reply to BIR assessments-30 days from the date of lifting of ECQ.
b. Suspension of running of Limitations/Prescriptions-60 days after the lifting of ECQ.
c. Filing of Quarterly Percentage Tax Return (BIR Form 2550Q)-extended until May 25, 2020.
BIR FURTHER EXTENDS THE DEADLINE TO AVAIL TAX AMNESTY ON DELINQUENCIES UNTIL JUNE 8, 2020
APRIL 8, 2020
Revenue Memorandum Circular (RMC) No. 38-2020 further extends the deadline of availment of the Tax Amnesty on Delinquencies until June 8, 2020, due to extension of Enhanced Community Quarantine (ECQ) until April 30, 2020.
BIR ISSUES IMPLEMENTING RULES & REGULATIONS ON THE GRANT OF FURTHER BENEFITS ON DONATIONS DURING ECQ
APRIL 7, 2020
Revenue Regulations (RR) No. 9-2020 implements the tax-exempt provisions of Republic Act (R.A.) No. 11469, otherwise known as the “Bayanihan to Heal as One Act” specifically granting further benefits on donations during the period of ECQ.
Highlights include:
a. Allows full deductibility of specific donations/gifts when given for the sole and exclusive purpose of combatting COVID 19 during the period of state of national emergency.
b. Donees may be national government or any entity created by any of its agencies (including public hospitals) which is not conducted for profit, or to any political subdivision of the said government, including fully owned government corporations, and accredited non-stock, non-profit educational and/or charitable, religious, cultural or social welfare corporation, institution, foundation, Non-Government Organizations (NGO), trust or philanthropic organization and/or research institution or organization.
c. The above donation enjoys full deductibility regardless if covered by the National Economic Development Authority (NEDA)’s annual priority plan.
d. Previous BIR documentary requirement of Notice of Donation is dispensed but supporting documents such as the Deed of Donation and Certificate of Donation/BIR Form 2322 should be submitted to the respective Revenue District Office (RDO) within 60 days from the lifting of Enhanced Community Quarantine (ECQ), except in the case of foreign donations.
e. Donations shall not be treated as transaction deemed sale subject to Value-Added Tax (VAT), and the corresponding input tax arising from the said donations shall be fully creditable against output VAT.
BIR ISSUES IRR ON 30-DAY GRACE PERIOD FOR LOAN PAYMENT UNDER ECQ
APRIL 2, 2020
Revenue Regulations (RR) No. 8-2020 directs all banks, quasi-banks, financing companies, lending companies, and other public and private institutions to implement a minimum of 30-day grace period for loan payments falling due within Enhanced Community Quarantine (ECQ) period without incurring interests, penalties, fees, or other charges. Borrowers with loans that fall due within the ECQ period are also spared from paying Documentary Stamp Tax (DST) because of the relief granted.
BIR EXTENDS DEADLINES FOR FILING & PAYMENT OF TAX RETURNS UNDER ECQ
MARCH 30, 2020
Revenue Regulations (RR) No. 7-2020 circularizes the extensions of filing and payment of various documents and returns with upcoming due dates falling under Enhanced Community Quarantine (ECQ), for a month.
BIR SUSPENDS THE RUNNING OF THE PERIOD OF STATUTE OF LIMITATIONS
MARCH 30, 2020
Revenue Memorandum Circular (RMC) No. 34-2020 clarifies the running of the prescriptive period on the right of the BIR to assess and collect. The circular suspends the running of Statute of Limitations in the assessment and collection of taxes, set forth under the 1997 Tax Code, for sixty (60) days due to the Enhanced Community Quarantine (ECQ). This means that prescribing assessments are halt and suspended and the running of prescriptive period to assess and collect will be reinstated after sixty (60) days from the lifting of the declaration of ECQ.
BIR ISSUES IRR ON TAX EXEMPTION PROVISIONS OF BAYANIHAN TO HEAL AS ONE ACT
MARCH 27, 2020
Revenue Regulations (RR) No. 6-2020 implements the tax exemption provisions of Section 4 (o) of Republic Act (R.A.) No. 11469, otherwise known as the “Bayanihan to Heal as One Act.”
Highlights include:
a. Exemption from Value-Added Tax (VAT), excise tax, and other fees of imported items which are critical and needed as part of healthcare equipment and supplies, including materials needed to make them, and are all intended to combat COVID-19 public health emergency.
b. Imported items shall be released from the Bureau of Customs (BOC) without the need of an Authority to Release Imported Goods (ATRIG).
c. Donations of these imported articles to or for the use of the National Government or any non-profit entity created by any of its agencies, or any of its political subdivision are exempt from donor's tax and subject to the ordinary rules of deductibility.
The regulation contains the list of items as well as the procedural guidelines on the part of the importing manufacturer to avail the tax exemption.
BIR EXTENDS THE DEADLINE FOR THE AVAILMENT OF TAX AMNESTY ON DELINQUENCY
MARCH 24, 2020
Revenue Memorandum Circular (RMC) No. 33-2020 extends the deadline for the availment of Tax Amnesty on Delinquencies from April 23, 2020, to May 23, 2020, due to the implementation of the Enhanced Community Quarantine (ECQ).
BIR EXTENDS THE DEADLINE FOR CORTT FORM SUBMISSION
MARCH 23, 2020
Revenue Memorandum Circular (RMC) No. 32-2020 extends the deadline for the filing of Certificate of Residence for Tax Treaty Relief (CORTT) Forms for Final Withholding Taxes (FWT) on dividends, interests, and royalties that were paid on or before March 10, 2020, from April 13, 2020, to April 30, 2020. The circular aims to give relief to taxpayers affected by the Enhanced Community Quarantine (ECQ).
BIR EXTENDS THE DEADLINE FOR THE SUBMISSION OF BIR POSITION PAPER & OTHER CORRESPONDENCES
MARCH 23, 2020
Revenue Memorandum Circular (RMC) No. 31-2020 extends the deadline for the filing of position paper and supporting documents in response to the BIR assessment. The 30-day extension is applicable only to taxpayers whose response is required to be submitted within the duration of the Enhanced Community Quarantine (ECQ).
BIR FURTHER CLARIFIES THE EXTENDED DEADLINE IN FILING OF RETURNS IN THE LIGHT OF COVID-19
MARCH 23, 2020
Revenue Memorandum Circular (RMC) No. 30-2020 addresses the confusion arising from the previous issuance of RMC No. 28-2020 and 29-2020 in relation to the extended deadlines for the filing of tax returns. As further clarified, the filing and submission of other reportorial requirements such as the required Audited Financial Statements, which were omitted but with due dates falling within the Enhanced Community Quarantine (ECQ), shall also be extended by 30 calendar days. However, if the ECQ period will be extended, the filing and payment of tax returns and submission of reports and attachments falling within the extended period will also be further extended by 30 calendar days.
BIR ISSUES BANK BULLETIN ALLOWING OUT-OF-DISTRICT FILING OF BIR RETURNS
MARCH 23, 2020
Bank Bulletin No. 2020-03 allows out-of-district filing of BIR returns in relation to the previous circulars (i.e., Revenue Memorandum Circular No. 28, 29, and 30-2020) on the extended deadline for filing and payment of tax returns. The BIR has directed all Authorized Agent Banks (AABs) to:
a. Accept payment of Annual Income Tax Returns until May 15, 2020, without imposition of penalties.
b. Accept payment of other BIR returns within 30 days from their respective due dates, without imposition of penalties.
c. Accept tax payment even if out-of-district BIR returns without imposition of penalties for wrong filing venue.
BIR EXTENDS THE DEADLINE FOR THE AVAILMENT OF THE TAX AMNESTY ON DELINQUENCY
MARCH 23, 2020
Revenue Regulations (RR) No. 5-2020 amends the implementing rules and regulations of Tax Amnesty on Delinquency, specifically on the deadline of availment which is originally set until April 23, 2020. The regulations provide that the same may be extended if circumstances warrant an extension such as in the case of country-wide economic or health reasons. The regulation has yet to provide any definite period to avail.
BIR EXTENDS THE DEADLINE FOR THE APPLICATION OF INPUT VAT REFUND
MARCH 18, 2020
Revenue Memorandum Circular (RMC) No. 27-2020 extends the deadline for the filing of application for Value-Added Tax (VAT) refund covering the quarter ending March 31, 2018, until April 30, 2020, from its original deadline of March 31, 2020. Likewise, the ninety (90)-day processing period of VAT refund claims that are being evaluated is suspended. The counting of the number of processing days shall resume after the lifting of the “community quarantine” issued by the President.
BIR PRESCRIBES THE USE OF OLD BIR FORMS 1604-CF & 1604-E
FEBRUARY 28, 2020
Revenue Memorandum Circular (RMC) No. 18-2020 allows the use of the old BIR Forms 1604CF and 1604E instead of the online filing given the present limitations of eFPS and eBIRForms. Alphalist of these returns shall be submitted through the existing Alphalist Data Entry and Validation Module Version 6.1. As further clarified, there is no need to re-submit even if enhanced version of the module will be issued soon.
BIR FURTHER EXTENDS THE DEADLINE FOR THE SUBMISSION OF BIR FORMS 1604CF, 2316 & 1604E
FEBRUARY 28, 2020
Revenue Memorandum Circular (RMC) No. 17-2020 further extends the deadline for the submission of BIR Forms 1604CF and 2316 from February 28, 2020, to March 31, 2020, along with BIR Form 1604E from the original schedule of March 1, 2020.
BIR CIRCULARIZES THE AVAILABILITY OF eBIRFORMS PACKAGE VERSION 7.6
FEBRUARY 27, 2020
Revenue Memorandum Circular (RMC) No. 16-2020 disseminates the availability of Offline eBIRForms Package Version 7.6 which now includes January 2018 version of BIR Forms 1700 and 1702MX. In addition, field validation and automated computation of BIR Form 1701 is already in place.
BIR PRESCRIBES THE MANNER ON HOW TAXPAYERS SHALL BE INFORMED ON THE PROCEDURES IN RESPONDING TO THE ISSUANCE OF DEFICIENCY TAX ASSESSMENT
FEBRUARY 27, 2020
Revenue Memorandum Circular (RMC) No. 15-2020 prescribes the manner on how the taxpayer shall be informed of the procedures in responding to the issuance of deficiency tax assessment.
BIR PRESCRIBES THE POLICIES & GUIDELINES IN THE AUDIT OF COOPERATIVES
FEBRUARY 18, 2020
Revenue Memorandum Order (RMO) No. 7-2020 directs the priority audit of cooperatives for 2018. With the enactment of Tax Reform for Acceleration and Inclusion (TRAIN) Law, there is no more need for the endorsement of the Cooperative Development Authority (CDA) before the BIR conducts tax audit.
BIR ISSUES BANK BULLETIN ON THE ACCEPTANCE OF BIR FORMS 1600VT & 1600PT
FEBRUARY 17, 2020
In Bank Bulletin No. 2020-06, the BIR instructs Authorized Agent Banks (AABs) to accept the revised BIR Forms 1600VT (Monthly Remittance Return of VAT Withheld) and 1600PT (Monthly Remittance Return of Other Percentage Tax Withheld) in relation to the changes brought about by Tax Reform for Acceleration and Inclusion (TRAIN) Law and in reference to the previous circular issued.
BIR DELEGATES TO THE ASSISTANT COMMISSIONER OF LEGAL SERVICE AUTHORITY TO APPROVE TTRA
FEBRUARY 7, 2020
Revenue Delegation Authority Order (RDAO) No. 1-2020 delegates to the Assistant Commissioner of Legal Service the authority to approve and/or sign all compliance check report for Tax Treaty Relief Application (TTRA) on dividends, interest, and royalties under Revenue Memorandum Order (RMO) No. 8-2017 in line with the implementation of the Republic Act (R.A.) No. 11032, otherwise known as the Ease of Doing Business and Efficient Government Service Delivery Act of 2018.
BIR FURTHER CLARIFIES ISSUES ON TAX AMNESTY ON DELINQUENCIES
FEBRUARY 6, 2020
Revenue Memorandum Circular (RMC) No. 11-2020 clarifies certain issues on the availment of tax amnesty on delinquencies. As clarified, taxpayers can withdraw their protest letter/appeal filed on or before April 23, 2020, to qualify for the availment of tax amnesty, subject to the documentary requirements as discussed in the circular. The circular is intended to entice more taxpayers to avail the time-bound tax amnesty on delinquencies.
BIR SUSPENDS THE REQUIREMENT OF PERMIT-TO-USE COMPUTERIZED ACCOUNTING SYSTEM
FEBRUARY 6, 2020
Revenue Memorandum Circular (RMC) No. 10-2020 suspends the requirement of Permit-To-Use (PTU) on Computerized Accounting System (CAS) and Computerized Books of Accounts (CBA) and allows their use subject to compliance requirements, as detailed in the circular.
BIR IMPLEMENTS THE TAX EXEMPTION PROVISIONS OF THE NEW CENTRAL BANK ACT
JANUARY 15, 2020
Revenue Regulations (RR) No. 2-2020 implements the tax exemption provisions of the Republic Act No. 11211, otherwise known as The New Central Bank Act. This is intended to exempt the Bangko Sentral ng Pilipinas (BSP) from all internal revenue taxes on income derived from its governmental functions.
BIR AMENDS THE MANNER OF APPLICATION & UPDATE OF EMPLOYEE REGISTRATION
JANUARY 9, 2020
Revenue Regulations (RR) No. 1-2020 provides for the new guidelines and procedures in the filing of Application for Registration (BIR Form 1902) and Update on Registration (BIR Form 1905). The employer shall transmit all copies of the completely filled-out Application for Registration and Information Update to the concerned BIR office having jurisdiction over the employer on or before the last day of the month of receipt from the employee, which shall be received and stamped in three (3) copies by the Revenue District Office (RDO) or his duly authorized representative. However, in case of changes to the previously submitted BIR Form 1902, the employee should furnish his employer a copy of BIR Form 1905 duly stamped received by the RDO where the employer is registered.
BIR REQUIRES ALL GASOLINE STATIONS TO SUBMIT A SWORN DECLARATION OF INVENTORY OF DIESEL, GASOLINE & KEROSENE AS OF DECEMBER 31, 2019
JANUARY 2, 2020
Revenue Memorandum Circular (RMC) 2-2020 mandates all Revenue District Offices (RDO) to require all gasoline stations to submit a Sworn Declaration of Inventory of Diesel, Gasoline, and Kerosene as of December 31, 2019, on or before January 15, 2020.
BIR REITERATES THE PROPER EXECUTION OF WAIVERS OF THE DEFENSE OF PRESCRIPTION
DECEMBER 20, 2019
Revenue Memorandum Circular (RMC) No. 141-2019 reiterates salient points on the execution of Waiver of the Defense of Prescription in relation to the earlier issuance of the BIR in Revenue Memorandum Order (RMO) No. 14-2016 to protect the interest of the government against taxpayers assailing invalidity after execution.
Highlights of emphases raised by the BIR include:
a. Execution is a unilateral and voluntary undertaking on the part of the taxpayer, therefore, binding upon execution.
b. Waiver need not indicate the type of taxes covered as well as the amounts.
c. Delegation of authority to representative in writing and duly notarized is dispensed.
d. Taxpayer cannot later assail the invalidity due to wrongful delegation of authority.
e. It is the duty of taxpayer to submit the Waiver prior to the expiration of the period to assess or collect, as the case may be.
f. Revenue District Officer (RDO) or Group Supervisor designated in the Letter of Authority or Memorandum of Assignment, in addition to the previously authorized officials, can now accept the Waiver.
g. Date of acceptance of the BIR officer is no longer required.
h. Taxpayer is duty-bound to retain its own copy of Waiver executed.
i. No strict format is now required.
BIR ENHANCES BIR FORM 1601-EQ & 1602Q
DECEMBER 18, 2019
Revenue Memorandum Circular (RMC) No. 139-2019 circularizes the availability of the Enhanced Version of BIR Forms 1601-EQ and 1602Q, January 2019 version. The forms are already available on the BIR website under the BIR Forms-Payment/Remittance Forms Downloadable Section but not under eFPS and eBIRForms platforms, thus, eFPS/eBIRForms filers are still allowed to use the old version.
BIR CIRCULARIZES ADDITIONAL LIST OF TAXPAYERS INCLUDED & DELISTED AS TOP WITHHOLDING AGENTS
DECEMBER 16, 2019
Revenue Memorandum Circular (RMC) No. 136-2019 circularizes the additional list of taxpayers included in the Top Withholding Agents required to withhold 1% on local purchase of goods and 2% on local purchase of services from regular suppliers, effective January 1, 2020. The list also contains those taxpayers delisted/excluded from the obligation to withhold. The lists are in addition to the previously published lists last October 8, 2018, and March 18, 2019.
It may be recalled that the withholding tax provisions of Tax Reform for Acceleration and Inclusion (TRAIN) Law, as implemented in Revenue Regulations (RR) 11-2018, provide for the semestral list of publication of Top Withholding Agents for inclusion and deletion.
BIR REITERATES THE PRESCRIBED PROCEDURES IN THE AVAILMENT OF THE TAX AMNESTY ON DELINQUENCIES
DECEMBER 11, 2019
Revenue Memorandum Circular (RMC) No. 135-2019 reiterates the prescribed procedures in the availment of the Tax Amnesty on Delinquencies and provides further clarifications to settle all doubts in relation to the implementation.
Highlights include:
a. Stop filer case or case involving non-filing of tax return is not qualified for tax amnesty.
b. Tax liabilities arising from non-payment in full and non-payment of tax due declared per tax returns are not qualified for tax amnesty unless the BIR has already sent a Collection Letter on or before April 24, 2019
c. BIR officers should only deal with taxpayers themselves or duly accredited tax agents and bona fide lawyers.
BIR CIRCULARIZES THE AVAILABILITY OF THE REVISED BIR FORM 1702-EX
DECEMBER 5, 2019
Revenue Memorandum Circular (RMC) No. 134-2019 circularizes the availability of the Revised BIR Form 1702-EX (Annual Income Tax Return for Exempt Entities/Transactions) January 2018 Version 2, under eBIRForms Package v7.5. The form is not yet available under eFPS, hence, eFPS filers shall use the Offline eBIRForms Package v7.5 in filing the return.
BIR PROVIDES A NEW FORMAT FOR THE NOTICE TO THE PUBLIC
DECEMBER 2, 2019
Revenue Regulations (RR) No. 10-2019 provides a new format for the Notice to the Public to be exhibited at the place of business. The change in the format is brought about by the drive of the BIR to improve collection through enforcement of the issuance of Official Receipt (OR)/Sales Invoice (SI) and to inform the public/buyers to require the seller to issue OR/SI.
BIR EXTENDS THE VALIDITY OF THE USE OF OLD VERSION OF WITHHOLDING TAX FORMS PENDING RECONFIGURATION OF THE COMPUTERIZED ACCOUNTING SYSTEM
NOVEMBER 26, 2019
Revenue Memorandum Circular (RMC) No. 126-2019 extends the validity of the use of the old version (i.e., September 2005) BIR Forms 2306, 2307, and 2316 for transactions covering until December 31, 2019, by withholding agents using a Computerized Accounting System (CAS) pending reconfiguration of CAS, which shall not be beyond December 31, 2019.
BIR EXTENDS THE DEADLINE OF SUBMISSION OF BIR FORM 1604C & BIR FORM 1604F
NOVEMBER 26, 2019
Revenue Memorandum Circular (RMC) No. 124-2019 extends the deadline of submission of the Annual Alphabetical List of Employees/BIR Form 1604C and Annual Information Return of Final Withholding Taxes/BIR Form 1604F.
BIR CIRCULARIZES THE 2020 BIR PRIORITY PROGRAMS & PROJECTS
NOVEMBER 22, 2019
Revenue Memorandum Circular (RMC) No. 123-2019 circularizes the 2020 BIR Priority Programs and Projects to meet the collection target and BIR adherence to Ease of Doing Business.
BIR TERMINATES THE SUBMISSION OF THE SEMESTRAL LIST OF REGULAR SUPPLIERS
NOVEMBER 22, 2019
Revenue Memorandum Circular (RMC) No. 122-2019 clarifies that the submission of the Summary List of Regular Suppliers (SRS) by Top 20,000 Private Corporations shall no longer be required and terminated in the light of the introduction of the new data entry module of Quarterly Alphabetical List of Payees (QAP) under Tax Reform for Acceleration and Inclusion (TRAIN) Law, which contains the same information of SRS.
BIR ALLOWS THE USE OF ELECTRONIC FORMAT OF CERTAIN BIR FORMS
NOVEMBER 21, 2019
Revenue Memorandum Circular (RMC) No. 121-2019 allows the use of the following BIR Forms/Certificates in electronic format, as per various requests received by the BIR from taxpayers:
a. BIR Form 2306/Certificate of Final Tax Withheld at Source
b. BIR Form 2307/Certificate of Creditable Tax Withheld at Source
c. BIR Form 2316/Certificate of Compensation Payment/Tax Withheld
The BIR allows the use of electronic format subject to the following conditions:
a. BIR certificates should be in the latest version officially approved by the BIR.
b. BIR certificates should be signed by the taxpayer of his duly authorized representative.
c. BIR certificates should be duly signed by both parties involved.
BIR AMENDS THE USE OF BIR PRINTED RECEIPTS/INVOICES
NOVEMBER 6, 2019
Revenue Memorandum Circular (RMC) No. 117-2019 clarifies the use of BIR Printed Receipt/Invoice (BPR/BPI) in lieu of principal receipts/invoices of the new business registrants. As clarified, the Authority to Print (ATP) for supplementary receipts/invoices is required, if the new business registrants shall use supplementary receipts/invoices. New business registrants may also use their own principal receipts/invoices with an ATP issued during the registration in case BPR/BPI shall not be used. It may be recalled that in the previous issuance, the BIR allowed newly registered businesses, as an option, to use BPR/BPI for 15 days pending any BIR-registered official receipts/invoices.
BIR CLARIFIES THE TAX TREATMENT OF ALIEN INDIVIDUALS EMPLOYED IN RHQ/ROHQ, OFFSHORE BANKING UNITS, PETROLEUM SERVICE CONTRACTORS & SUBCONTRACTORS
NOVEMBER 6, 2019
Revenue Memorandum Circular (RMC) No. 116-2019 clarifies that the income of the alien individuals employed in the Philippines by Regional or Area Headquarters and Regional Operating Headquarters (RHQ/ROHQ) of Multinational Companies, Offshore Banking Units, Petroleum Service Contractors and Subcontractors shall now be taxed as income of regular employees of locally established entities and, therefore, subject to the same administrative requirements of local employees such as the substituted filing, issuance of BIR Form 2316, and inclusion in the monthly and year-end alphabetical list of employees. Those employees under the Secondment Agreement will still be subject to the same administrative requirements, except for substituted filing and, therefore, they are now required to file their own individual Income Tax Returns.
BIR ISSUES GUIDELINES & PROCEDURES FOR THE ISSUANCE OF THE TAX RESIDENCY CERTIFICATE
OCTOBER 22, 2019
Revenue Memorandum Order (RMO) No. 51-2019 provides the guidelines and procedures for the processing and issuance of the Tax Residency Certificate for Philippine residents deriving income from sources outside the Philippines/Contracting States and intending to avail the preferential tax treatment under the effective tax treaties of the Philippines.
BIR EXTENDS THE VALIDITY PERIOD OF CERTIFICATES OF ACCREDITATION & PERMITS TO USE
OCTOBER 15, 2019
Revenue Memorandum Circular (RMC) No. 107-2019 further extends the validity period of the Certificates of Accreditation and Permits to Use (PTUs) issued to developers/dealers/suppliers-vendors/pseudo-supplier of Cash Register Machine (CRM), Point-of-Sale (POS), machines and other sales machines/receipting software.
All primary and supplementary receipts/invoices must reflect the “Effectivity Date” as “Date Issued” and the phrase “Valid Until” based on the provisions stated in the Circular and in relation to the compliance requirements of Revenue Regulations (RR) No. 16-2018.
BIR CLARIFIES THE PROPER TAX TREATMENT OF MATERNITY LEAVE BENEFITS
OCTOBER 9, 2019
Revenue Memorandum Circular (RMC) No. 105-2019 clarifies the proper tax treatment of Maternity Leave Benefits under the Republic Act (R.A.) No. 11210, otherwise known as the "105-Day Expanded Maternity Leave Law." The circular clarifies that the salary differential is exempt from income tax and withholding tax aligned with the provisions of Revenue Regulations (RR) No. 2-98, which provides tax exemption on payment of benefits under the Social Security System (SSS) Law.