Thursday, January 30, 2014

Clarifications on the Provisions of Revenue Regulations No. 1-2014 with Regards to the Submission of Alphabetical List of Employees/Payees of Income Payments

The Commissioner of Internal Revenue just recently issued the Revenue Memorandum Circular No. 5-2014 to make it clear of the provisions of Revenue Regulations (RR) No. 1-2014 amending the provisions of RR No. 2-98, as further amended by RR No. 10-2008 more particularly the submission of alphabetical list of employees/payees on income payments as follows:

Question 1. What are the modes of submission of the alphabetical list of employees and the list of payees on income payments subject to creditable and final withholding taxes (alphalist) prescribed under RR No. 1-2014?

Answer. There are only three modes of submission of the alphalist according to RR No. 1-2014, which can be used by the taxpayer, at its option, in so far as applicable, namely:
a. As attachment in the Electronic Filing and Payment System (eFPS);
NOTE: The attachment of alphalist through the eFPS is temporarily disabled and a tax advisory shall be immediately issued through the BIR website as soon as the technical thereon are resolved.
b. Through Electronic Submission (eSubmission) using the BIR's website address at esubmission@bir.gov.ph; and
c. Through Electronic Mail (email) submission at dedicated BIR email addresses using the data entry module of the BIR.

However, for all taxpayers who are mandated to use the eFPS and the Inter-Active Forms (IAFs) System under existing revenue regulations, including those who voluntarily enrolled with the said systems, they are only allowed to use the mode of eSubmission in submitting their alphalists. Once the attachment facility of eFPS is already available the eFPS-users may opt to use either the eSubmission or the attachment facility of the eFPS in the submission of their alphalists.

For taxpayers who are neither eFPS-users nor IAF-enrolled users, they may avail the eSubmission facility or the email submission of alphalists. It is preferred, however, that the eSubmission facility for the filing of alphalists be availed of by the concerned taxpayers considering that the said submission facility is more convenient for both the taxpayers and the BIR because it requires no manual intervention by the concerned revenue district offices (RDOs).

Question 8. Are the Annual Information Returns (BIR Form No. 1604-CF and No. 1604-E) included in the submission of the alphalist through the different modes enumerated under RR No. 1-2014?

Answer. Except for taxpayers who are using the eFPS facility in the filing the Annual Information Returns, all other taxpayers are still required to prepare and submit the hard or physical copies thereof, together with the printed copy of the computer screen display of the acknowledgement/confirmation of the BIR's receipt of the alphalist, to the RDO where the concerned taxpayers are duly registered, considering that only the submission of alphalist through the three different modes (e.g., eFPS, eSubmission and email submission) is prescribed by the said regulations.

Question 9. What is the presumption on the maintenance by the taxpayer of an email account for purposes of submission of the alphalist?

Answer. Yes. Except for the Monthly Remittance Return for Compensation (BIR Form No. 1601-C) where the monthly list of recipients of compensation is not required to be attached to the said monthly remittance return, the submission of the alphalist of income payees, e.g., Monthly Alpahalist of Payees (MAP) and the Summary Alphalist of Withholding Taxes (SAWT) are likewise required to be filed/submitted to the concerned RDO through the applicable modes of submission prescribed under the said revenue regulations.

However, except for taxpayers who are using the eFPS facility in filing the Monthly Remittance Returns (BIR Form No. 1601-C, etc), as well as, the Income Tax Returns (quarterly and annual returns), Value-Added Tax Declarations/Returns (BIR Form No. 2551Q), all other taxpayers are still required to prepare and submit the hard or physical copies thereof and pay the corresponding withholding taxes due thereon, if any, together with the printed copy of the computer screen display of the acknowledgement/confirmation of the BIR's receipt of the monthly alphalist, to the Authorized Agent Bank (AAB) or RDO where the concerned taxpayers are duly registered, as the case may be.

Question 10. Are the Monthly Alphalist of Payees (MAP) and the Summary Alphalist of Withholding Taxes (SAWT) also covered by the different modes of submission prescribed under RR No. 1-2014?

Answer. Yes. Except for the Monthly Remittance Return for Compensation (BIR Form No. 1601-C) where the monthly list of recipients of compensation is not required to be attached to the said monthly remittance return, the submission of the alphalist of income payees, e.g., Monthly Alphalist of Payees (MAP) and the Summary Alphalist of Withholding Taxes (SAWT) are likewise required to be filed/submitted to the concerned RDO through the applicable modes of submission prescribed under the said revenue regulations.

However, except for taxpayers who are using the eFPS facility in filing the MOnthly Remittance Returns (BIR Form No. 1601-C, etc.), as well as, the Income Tax Returns (quarterly and annual returns), Value-Added Tax Declarations/Returns (BIR Form No. 2550M and No. 2550Q, Percentage Tax Returns (BIR Form Nos. 2551M and No. 2551Q), all other taxpayers are still required to prepare and submit the hard or physical copies thereof and pay the corresponding withholding taxes due thereon, if any, together with the printed copy of the computer screen display of the acknowledgement/confirmation of the BIR's receipt of the monthly alphalist, to the Authoized Agent Bank (AAB) or RDO where the concerned taxpayers are fuly registered, as the case may be.

Question 13. In cases where an alphalist is not successfully uploaded and considered not received by the BIR pursuant the provisions of RR No. 1-2014, what shall be the penalty to be imposed to the taxpayer who submitted an unsuccessfully uploaded alphalist?

Answer: Inasmuch as the said violation is considered as a failure to make/file/submit any return or supply correct information at the time or times required by law or regulations under Section 255 of the National Internal Revenue Code of 1997, as amended, the taxpayer is liable than one (1) year but not more than ten (10) years, or in lieu thereof, to pay the compromise penalty in the amount that corresponds to the taxpayer's gross annual sales, earnings or receipts, pursuant to the existing Revenue Memorandum Order on Schedule of Compromise Penalties.

However, in cases where the concerned BIR Office, after conducting the required validation processes, shall duly inform the taxpayer for non-compliance with any of the requirements prescribed in Question 12 of this Circular and require the re-submission of a correct alphalist, a separate penalty shall be imposed against the taxpayer for each incorrectly accomplished and submitted alphalist.



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