Use of Invoices / Receipts Registered from VAT to Non-VAT

Who else wants to know the guidelines of the Use of Invoices / Receipts Registered from VAT to Non-VAT?

Revenue Regulations (RR) No. 13-2018 was issued by the bureau amending RR No. 13-2018 Particularly on the Use of Invoices / Receipts of Previously Registered VAT Taxpayers who are now Non-VAT Taxpayers Pursuant to Section 84 of Republic Act (RA) No. 10963, or the "Tax Reform for Acceleration and Inclusion (TRAIN) Law".

It is stated in these regulations to read as follows:

SECTION 2. AMENDED. - Section 13 of RR No. 13-2018 is hereby amended providing deadline on the use of stamped Non-VAT invoices/receipts to read as follows:

"SECTION 13. TRANSITORY PROVISIONS. - 

XXX           XXX          XXX

A number of unused invoices/receipts, as determined by the taxpayer with the approval of the appropriate BIR Office, may be allowed for use, provided the phrase "Non-VAT registered as of (dated of final application for updated of registration). Not valid for claim of input tax." shall be stamped on the face of each and every copy thereof, until new registered non-VAT invoices or receipts have been printed and received by the taxpayer or until August 31, 2018, whichever comes first. Upon receipt of newly-printed registered non-VAT invoices or receipts, the taxpayer shall submit, on the same day, a new inventory list of, and surrender for cancellation, all unused previously-stamp invoices/receipts.

Please refer: https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202018/RR%20No.%2019-2018.pdf of the full text of RR No. 13-2018.

Documentary Stamp Tax Rate Adjustment Under Republic Act No. 10963

Do you consider the importance of knowing the Documentary Stamp Tax (DST) Rate when doing transactions related to business? For me, it is necessary, to avoid circumstances that cause delays of the process of doing business. Besides, it's part for the growth and success of the business operations in the private and public business community.

Revenue Regulations (RR) No. 4- 2018 was issued by the bureau to implement the Documentary Stamp Tax Rate Adjustment Under Republic Act No. 10963, Otherwise Known as the "Tax Reform For Acceleration and Inclusion (TRAIN) Law" to read as follows: 

SEC. 2. NEW RATE OF DST ON ORIGINAL ISSUE OF SHARES OF STOCKS. - 

"SEC. 174. Stamp Tax on Original Issue of Shares of Stock - On every original issue. whether on organization. reorganization or for any lawful purpose, of shares of stock by any association, company. or corporation. there shall be collected a documentary stamp tax of two pesos (P2.00) on each Two hundred pesos (P200). or fractional part thereof. of the par value, of such shares of stock: Provided, That in the case of the original issue of shares of stock without par value. the amount of the documentary stamp tax herein prescribed shall be based upon the actual consideration for the issuance of such shares of stock: Provided, further, that in the case of stock dividends. on the actual value  presented by each share." 

The rate of DST on the original issue of shares has been increased from One peso (P1.00) to Two pesos (P2.00) on each Two hundred pesos (P200), or fractional part thereof, of the par value of such shares of stock.

SEC. 3. NEW RATE OF DST ON STAMP TAX ON SALES, AGREEMENTS TO SELL, MEMORANDA OF SALES, DELIVERIES OR TRANSFER OF SHARES OR CERTIFICATES OF STOCK. - 

"SEC' 175. Stamp Tax on Sales, Agreements to Sell, Memoranda of  Sales, Deliveries or Transfer of Shares or Certificates of Stock. - On all sales, or agreements to sell. or memoranda of sales. or deliveries or transfer of such securities by assignment in blank. or by delivery or by any paper or agreement. of memorandum or other evidences of transfer or sale whether entitling the holder in any manner to the benefit of such stock. or to secure the future payment of money, or for the future transfer of any stock, there shall be collected a documentary stamp tax of One peso and Fifty centavos (P1.50) on each Two hundred pesos (P200), or fractional part thereof. of tire par value of such stock: Provided. That only one tax shall be collected on each sale or transfer of stock from one person to another, regardless of whether or not a certificate of stock or obligation is issued. indorsed, or delivered in pursuance of such sale or transfer: and Provided, further. That in the case of stock without par value the amount of the documentary stamp tax herein prescribed shall be equivalent to Fifty percent of the documentary stamp tax paid upon the original issue of said stock." 

The rate of DST on sales, agreements to sell, rnemoranda of sales, deliveries or transfer of shares or certificates of stock has been increased from Seventy-five centavos (P0.75) to One peso and fifty centavos (P1.50) on each Two hundred pesos (P200), or fractional part thereof, of the par value of such stock. In case of stocks without par value, the DST shall be equivalent to Fifty, percent (50%) of the DST paid upon the original issue of said stock.

SEC. 4, NEW RATE OF DST ON CERTIFICATES OF PROFITS OR INTEREST IN PROPERTY OR ACCUMULATIONS. - 

"SEC. 177. Stamp Tax on Certificates of Profits or Interest in Property or Accumulations. - On all certificates of profits. or any certificate or memorandum showing interest in the property or accumulations of any association. company or corporation, and on all transfers of such certificates or memoranda. there shall be collected a documentary stamp tax of One peso (P1.00) on each Two hundred pesos, or fractional part thereof, of the face value of such certificates or memorandum." 

The rate of DST on the Certificates of Profits or Interest in Property or Accumulations has been increased from Fifty centavos (P0.50) to One pesos (P1.00) on each Two hundred pesos, or fractional part thereof, of the face value of such certificates or rnemorandum

SEC. 5. NEW RATE OF DST ON BANK CHECKS, DRAFTS, CERTIFICATES OF DEPOSIT NOT BEARING INTEREST, AND OTHER INSTRUMENTS. - 

"SEC. 178. Stamp Tax on Bank Checks, Drafts, Certificates of Deposit not Bearing Interest, and Other Instruments. - On each bank client. draft of certificate of deposit not drawing interest. or order for the payment of any sum of money drawn upon of issued by any bank, trust company. or any person or persons. companies or corporations. at sight or on demand, there shall be collected a documentary stamp tax of Three pesos (P3.00)." 

The rate of DST on bank checks, drafts, certificates of deposit not bearing interest, and other instruments has been increased from One peso and Fifty centavos (P1.50) to Three pesos (P3.00)." The rate of DST on bank ch drafts, certificates of deposit not bearing interest, attd other instruments has beerr increased fi"om One peso and Fifty centavos (P1.50) to Three pesos (P3.00)."

SEC. 6. NEW RATE OF DST ON ALL DEBT INSTRUMENTS. -

 "SEC. 179. Stamp Tax on ALL Debt Instruments. -

On every original issue of debt instruments. there shall be collected a documentary stamp tax of One peso and Fifty centavos (P1.50) otr each Two hundred pesos (P200.00). or fractional part threreof, of the issue price of any such debt instruments: Provided. that for such debt instruments with terms of less than one ( 1) year, the documentary stamp tax to be collected shall  be of a proportional amount in accordance with the ratio of its term in number of days to three hundred sixty-five (365) days: Provided, further. That only one documentary, stamp tax shall be imposed on either loan agreement. or promissory notes issued to secure such loan.

 xxx" 

The rate of DST on all debt instruments is increased from One peso (P1.00) to One

peso and Fifty centavos (P1.50) on each Two hundred pesos (P200.00), or fractional part

thereof, of the issue price of any such debt instruments.

SEC. 7. NEW RATE ON ALL BILLS OF EXCHANGE OR DRAFTS. -

"SEC. 180.Stamp Tax on All Bills Exchange or Drafts. - On all bills of exchange (between points within the Philippines) or drafts. there shall be collected a documentary stamp tax of Sixty, centavos (P0.60) on each Two hundred pesos (P200.00) or fractional part thereof, of the face value of any such bill of exchange or draft." The rate of DST on all bills of exchange or drafts has been increased from Thirty, centavos (P0.30) to Sixty centavos (P0.60) on each Two hundred pesos (P200.00) or fractional part thereof. of the face value of any such bill of exchange or draft.

SEC. 8. NEW RATE OF DST UPON ACCEPTANCE OF BILLS OF EXCHANGE AND OTHERS. -

"SEC. 181 . Stamp Tax Upon Acceptance o.f Bills of Exchange and Others. - Upon any acceptance of payment of any bill of exchange or order for the payment of money purporting to be drawn in a foreign country but payable in the Philippines, there shall be collected a documentary stamp tax of Sixty centavos (P0.60) on each Two hundred pesos (P200) or fractional part thereof, of the face value of any such bill of exchange, or order, of the Philippine equivalent of such value. if expressed in foreign currency."

The rate of DST on acceptance of bills of exchange and others all bills of exchange or drafts has been increased from Thirty centavos (P0.30) to Sixty centavos (P0.60) on each Two hundred pesos (P200.00) or fractional part thereof, of the I'ace value of any such bill of exchange or draft, or the Philippine equivalent of such value, if expressed in foreign currency.

SEC. 9. NEW RATE OF DST ON FOREIGN BILLS OF EXCHANGE AND LETTERS OF CREDIT. -

"SEC. 182. Stamp Tax on Foreign Bills of Exchange and Letters of Credit. - On all foreign bills of exchange and letter of credit (including orders. by telegraph or otherwise, for the payment of money issued by express or steamship companies or by any person or persons) drawn in but payable out of the Philippines in a set of three (3) or more according to the custom of merchants and bankers. there shall be collected a documentary stamp tax of Sixty centavos (P0.60) on each Two hundred pesos (P200). or fractional part thereof of the face value of any such bill of exchange or letter or credit,

or the Philippine equivalent of such face value in foreign currency."

The rate of DST on all bills of exchange or drafts has been increased from Thirty centavos (P0.30) to Sixty centavos (P0.60) on each Two Hundred of fractional thereof, of the face value of any such bill of exchange or letter of credit, or the Philippine equivalent of such face value, if expressed in foreign currency.

SEC. 10. NEW RATE OF DST ON LIFE INSURANCE POLICIES. - 

'SEC. 183. Stamp Tan on Life Insurance Policies - On all policies of insurance or other instruments by whatever name the same may be called, whereby any insurance shall be made or renewed upon any life or lives, there shall be collected a one-time documentary stamp tax at the following rates:

If the amount of it.insurance does not exceed P100,000      Exempt

If the amount of insurance exceeds 

     P100.000 but does not exceed P300,000     P20.00

If the amount of insurance exceeds

     P300,000 but does not exceed P500,000     P50.00

If the amount of insurance exceeds

     P500,000 but does not exceed P750,000     P100.00

If the amount of insurance exceeds

     P750,000 but does not exceed P1,000,000     P150

If the amount of insurance exceeds P1,000,000     P200.00"

The rates of DST on life insurance policies have been doubled.

SEC. 11. NEW RATE OF DST ON POLICIES OF ANNUITIES AND PRE-NEED PLANS. - 

"SEC. 186. Stamp Tax on Policies of Annuities and Pre-Need Plans. - On all policies of annuities, or other instruments by whatever name the same may be called, whereby an annuity may be made, transferred or redeemed, there shall be collected a documentary stamp tax of One peso (P1.00) on each Two hundred pesos (P200), or fractional part thereof, of the premium or contribution collected."

The rate of DST on annuities has been increased from Fifty centavos (P0.50) to One peso (P1.00) on each Two hundred pesos (P200), or fractional part thereof, of the premium or installment payment on contract price collected. Pre-need are now taxed at Forty centavos (P0.40) from the previous rate of Twenty centavos (P0.20).

SEC. 12. NEW RATE OF DST ON CERTIFICATES. -

"SEC. 188. Stamp Tax on Certificates. - On each certificate of damage or otherwise, and on every other person acting as such, and on each certificate issued by a notary public, and on each certificate of any description required by law or by rules or regulations of a public office, or which is issued for the purpose of giving information, or establishing prof of a fact, and not otherwise specified herein, there shall be collected a documentary stamp tax of  Thirty pesos (P30.00)."

The rate of DST on certificates has been increased from Fifteen pesos (P15.00) to Thirty pesos (P30.00).

SEC. 13. NEW RATE OF DST ON WAREHOUSE RECEIPTS. -

"SEC. 189. Stamp Tax on Warehouse Receipts. - On each warehouse receipt for property held in storage in a public or private warehouse or yard for any person other than proprietor of such warehouse or yard, there shall be collected a documentary stamp tax of Thirty pesos (P30.00); Provided, That no tax shall be collected on each warehouse receipt issued to any one person in any one calendar month covering property the value of which does not exceed Two hundred pesos (P200)."

The rate of DST on warehouse receipts has been increased from Fifteen pesos (P15.00) to Thirty pesos (P30.00).

SEC. 14. NEW RATE OF DST ON JAI--ALA-, HORSE RACE, TICKETS, LOTTO, OR OTHER AUTHORIZED NUMBERS GAMES. -

"SEC. 10. Stamp Tax on Jai-alai, Horse Race, Tickets, Lotto, or Other Authorized Number Games. - On each jai-alai, horse race ticket, lotto or other authorized numbers games, there shall be collected a documentary stamp tax of Twenty centavos (P0.20): Provided, That if the cost of the ticket exceed One peso (P1.00), an additional tax of Twenty centavos (P0.20) on every One peso (P1.00), or fractional part thereof, shall be collected."

The rate of DST on jai-alai, horse race, tickets, lotto, or other authorized number game has been increased from Ten centavos (P0.10) to Twenty centavos (P0.20); and if the cost of ticket exceeds One pesos (P1.00), the additional tax has been increased from Ten centavos (P0.10) to Twenty centavos (P0.20) on every One peso (P1.00), or fractional part thereof.

SEC. 15. NEW RATE OF DST ON BILLS LADING OR RECEIPTS - 

"SEC. 191. Stamp Tax on bills of Lading or Receipts. - On each set of bills of lading or receipts (except charter party) for any goods, merchandise, or effects shipped from one port, there shall be collected a documentary stamp tax of Two pesos (P2.00), if the value of such goods exceeds One hundred pesos (P100) and does not exceed One thousand pesos (P1,000); Twenty pesos (P20.00), if the value exceeds One thousand pesos (P1,000): Provided, however, That freight tickets covering goods, merchandise or effects carried as accompanied baggage of passengers on land and water carriers primarily engaged in the transportation of passengers are hereby exempt."

The rate of DST on each bill of lading or receipt has been increased from One pesos (P1.00) to Two pesos (P2.00), if the value of goods exceeds One hundred pesos (P100) and does not exceed One thousand pesos (P1,000); and the rate of DST has been increased from One thousand pesos (P1,000).

Modes of Payment of Internal Revenue Taxes Through AABs

Do you think taxpayers need to know the importance of Modes of Payment of Internal Revenue Taxes Through Authorized Agent Banks (AABs)? In this regard, the bureau has issued Revenue Regulations (RR) No. 16-2002 that refers the Modes of and Procedure of Internal Revenue Taxes Through Agent Banks Amending RR No. 4-97, as amended by RR No. 6-98.

The Modes of Payment of Internal Revenue Taxes Through AABs are stated in these regulations to read as follows:

SEC. 3. MODES OF PAYMENT TO AABs - Aside from the electronic payment system currently used by some taxpayers in paying their BIR taxes, the rest shall pay their tax liabilities through any of the following modes: a) over-the-counter cash payments; b) bank debit system; or c) check payment system.

a) "Over-the-counter cash payment" refers to payment of tax liabilities to authorized agent bank in the currencies (paper bills or coins) that are legal tender in the Philippines. The maximum amount allowed per tax payment shall not exceed ten thousand pesos (P10,000.00)

b) "Bank debit system" refers to the system whereby a taxpayer, through a bank debit memo/advice, authorizes withdrawals from his/its existing bank accounts for payment of tax liabilities.

The bank debit system mode is allowed only if the taxpayer has a bank account with the AAB branch where he/it intends to file and pay his/its tax return/form/declaration, provided said AAB branch is within the jurisdiction of the BIR Revenue District Office (RDO) / Large Taxpayers District Office (LTDO) where the tax payment is due and payable.

c) "Checks" refers to a bill of exchange or Order Instrument drawn on a bank payable on demand.

In the issuance and accomplishment of checks for the payment of internal revenue taxes, as illustrated below, the taxpayer shall indicate in the space provided for "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; and under the "ACCOUNT NAME" the taxpayer identification number (TIN).

(Below is a sample of a tax check payment where the drawee bank and presenting bank are different from each other.)

(Below is sample of check tax payment drawn from and presented to the same bank.)

The following checks are, however, not acceptable as check payments for internal revenue taxes:

1. Accommodation checks - checks issued or drawn by a party other than the taxpayer making the payment;

2. Second endorsed checks - checks issued to the taxpayer as payee who indorses the same as payment for taxes;

3. Stale checks - checks dated more than six (6) months prior to presentation to the authorized agent bank;

4. Postdated checks - checks dated a day or several days after the date of presentation to the authorized agent bank;

5. Unsigned checks - checks with no signature of the drawer;

6. Checks with alterations/erasures.

AABs accepting checks for the payment of BIR taxes and other charges must see to it that the check covers one tax type for one return period only. Moreover, AABs must strictly comply with the systems and procedures for the reception, processing, clearing and accounting of the checks to be prescribed under a separate regulation.

Second indorsement of checks which are payable to the Bureau of Internal Revenue or Commissioner of Internal revenue is absolutely prohibited.

Please refer https://www.bir.gov.ph/images/bir_files/old_files/pdf/2007rr16_02.pdf of the full text of RR No. 16-2002.

Reckoning Point for Valuation of Gifts Made in Property

May be taxpayers and other concerns will ask when is the action of calculating for valuation of gifts made in property?

The bureau recently issued Revenue Regulations (RR) No. 17-2018 amending RR No. 12-2018 Particularly Section 13 Thereof.

The amendment is stated in Section 2 of RR No. 17-2018 to read as follows:

"SECTION 13. VALUATION OF GIFTS MADE IN PROPERTY. - The valuation of gifts in the form of property shall follow the rules set forth in Section 5 of these regulations: Provided, That the reckoning point for valuation shall be the date when the donation is made."

Please refer: https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202018/RR%20No%2017-2018.pdf of the full text of RR No. 17-2018.