Relief Data Entry And Validation Module Version 2.3. (New)

For the development and updates of the RELIEF Data Entry and Validation Module of Sales of Clients and Purchases of Suppliers, the bureau has updated New Version as follows:

Relief Version 2.3

UPDATED RELIEF VERSION: to Download the RELIEF Version 2.3 just click this URL:

ZIP: https://www.bir.gov.ph/images/bir_files/downloadables/relief/BIRReliefv2.3.zip

Job Aid: https://www.bir.gov.ph/images/bir_files/old_files/zip/job_aid_relief.zip

BIR RELIEF  Data Entry and Validation Module is use to update Summary List of Sales, Purchases and Importation (SLSPI).

How To Compute Taxable Income And Tax Due For Individuals Earning Purely Compensation Income?

As part of the implementation of the Income Tax Provisions of Republic Act No. 10963, Otherwise Known as the "Tax Reform for Acceleration and Inclusion (TRAIN)" Act, the bureau has issued Revenue Regulations (RR) No. 8-2018 dated January 25, 2018. 

The implementation of Taxable income for compensation earners is one of the subject matter in these regulations.

In general, Compensation Income means all remuneration for services performed by an employee for his employer under an employer-employee relationship, unless specifically excluded by the Code.

The name by which the remuneration for services is designated is immaterial. Thus, salaries, wages, emoluments and honoraria, allowances, commissions (e.g. transportation, representation, entertainment and the like); fees including director's fees, if the director is, at the same time, an employee of the employer/corporation; taxable bonuses and fringe benefits, except those which are subject to the fringe benefits tax under Sec. 33 of the Code and the allowable "de minimis" benefits; taxable pensions and retirement pay; and other income of a similar nature constitute compensation income.

Compensation Income Earners - individuals whose source of income is purely derived from an employer-employee relationship.

Employee - an individual performing services under an employer-employee relationship. The term covers all employees, including officers and employees, whether elected or appointed, of the Government of the Philippines, or any political subdivision thereof or any agency or instrumentality.

Employer - any person for whom an individual performs or performed any service, whatever nature. under an employer-employee relationship. It is not necessary that services be continuing at the time the wages are paid in order that the status employer may exist. Thus, for purposes of withholding, a person for whom an individual has performed past services and from whom he is still receiving compensation is an "employer".

How to Compute the Taxable Income & Tax Due of Individuals Earning Purely Compensation Income?

Individuals earning purely compensation income shall be taxed based on the income tax rates prescribed under subsection (A) of RR No. 8-2018. 

Taxable income for compensation earners is the gross compensation income less nontaxable income/benefits such as but not limited to the Thirteenth (13th) month pay and other benefits (subject to limitations, see Section 6(G)(e) of these Regulations), de minimis benefits, and employee's share in the SSS, GSIS, PHIC, Pag-ibig contributions and union dues.

Tax Due of Individuals earning purely compensation income is based on the income tax rates prescribed under subsection (A) of RR No. 8-18. If the Taxable Income is Not Over P250,000.00, Tax Due is Nill or Zero.

If Taxable Income is P450,000.00, Income Tax Due is computed as follows:

Tax Due:
On P400,000.00                                                        P22,500.00
On Excess (P450,000.00 - P400,000.00) X 20%     P10,000.00
Income Tax Due                                                      P32,500.00

Husband and wife shall compute their individual income tax separately based on their respective taxable income; if any income cannot be definitely attributed to or identified as income exclusively earned or realized by either of the spouses, the same shall be divided equally between the spouses for the purpose of determining their respective taxable income. 

Minimum wage earners shall be exempt from the payment of income tax based on their statutory minimum wage rates. The holiday pay, overtime pay, night shift differential pay and hazard pay received by such earner are likewise exempt.

Please refer the link: https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202018/RR%20No.%208-2018.pdf of the full text of RR No. 8-2018.

Certain Expenses Allowed As Deduction Where No Withholding Tax Was Made

Did you know that the bureau has issued new Revenue Regulations (RR) No. 6 - 2018 revoking RR No. 12-2013 thereby Reinstating the Provisions of Section 2.58.5 of RR No. 14-2002, as Amended by RR No. 17-2003?

These regulations refers to the requirements for deductibility of certain expenses and such deduction will also be allowed in the following cases where no withholding of tax was made.

In Section 2 of this Regulation, stated the Requirements For Deductibility Of Certain Expenses as follows:

"Sec. 2.58.5. Requirements for Deductibility. - Any income payment which is otherwise deductible under the Cod shall be allowed as a deduction from the payor's gross income only if it is shown that the income tax required to be withheld has been paid to the Bureau in accordance with secs. 57 and 58 of the Code.

A deduction will also be allowed in the following cases where no withholding of tax was made: 

(A) The payee reported the income and pays the tax due thereon and the withholding agent pays the tax including the interest incident to the failure to withhold the tax, and surcharges, if applicable, at the time of the audit/investigation or reinvestigation/reconsideration. 

(B) The recipient/payee failed to report the income on the due date thereof. but the withholding agent/taxpayer pays the tax. including the interest incident to the failure to withhold the tax and surcharges" if applicable, at the time cf audit/investigation or reinvestigation/reconsideration.

(C) The withholding agent erroneously underwithheld the tax but pays the difference between the correct amount and the amount of tax withheld including the interest. incident to such error, and surcharges, if applicable, at the time of the audit investigation or reinvestigation/reconsideration.

Items of deduction representing return of capital such as those pertaining to purchases of raw materials forming part of finished product or purchases of goods for resale. shall be allowed as deductions upon withholding agent's payment of the basic withholding tax and penalties incident to non-withholding or underwithholding."

Please refer https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202018/RR%20No.%206-2018.pdf of the full text of RR No. 6-2018.

Change In The Creditable Withholding Tax Rate On Income Payments To Self-Employed Individuals Or Professionals

The following lncome Payments to Self-employed lndividuals or Professionals shall be subject to Eight Percent (8%): 

1. Professional fees, talent fees, commissions, etc. for services rendered by individuals; 

2. lncome distribution to beneficiaries of Estates and Trusts; 

3. lncome Payment to certain brokers and agents; 4. lncome Payments to partners of general professional partnership; 

5. Professionalfees paid to medical practitioners; and 6. Commission of independent and/or exclusive sales representatives, and marketing agents of companies.

Please refer of the full text of RMC No. 1-2018 https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2018/RMC%20No%201-2018.pdf

Procedures On The Use Of Withholding Tax Table On Compensation Income

To supplement Revenue Memorandum Circular (RMC) No. 105-2017 that was issued last December 28, 2017, the bureau has issued RMC No. 1-2018 dated January 4, 2018 to prescribes the Procedures on the use of Withholding Tax Table on Compensation Income with effective date of January 1, 2018 to December 31, 2022.

Steps in the Use of the Withholding Tax Table

Generally, every employer paying compensation to its employee/s shall deduct and withhold from such compensation a tax determined in accordance with the prescribed Revised Withholding Tax Tables, version 2 (Annex "A").

1. Determine the total amount of monetary and non-monetary compensation paid to an employee for the payroll period: monthly, semi-monthly, weekly or daily, as the case may be, segregating non-taxable benefits and mandatory contributions.

2. Use the appropriate table in Annex "A" for the applicable payroll period.

3. Determine the compensation range of the employee and apply the applicable tax rates prescribed thereon.

4. Compute the withholding tax due by adding the tax predetermined in the compensation range indicated on the column used and the tax on the excess of the total compensation over the minimum of the compensation range.

Sample Computations Using the Withholding Tax Tables

Example 1:

Example 2:

Example 3. 

Example 4.

 Please refer: https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2018/RMC%20No%201-2018.pdf of the full text of RMC No. 1-2018 and the Revised Withholding Tax Table 

Revised Withholding Tax Table On Compensation Pursuant to the Amendments To The NIRC of 1997 as Introduced by Republic Act No. 10963

The bureau recently published the Revenue Memorandum Circular (RMC) No. 105-2017 with regards to Revised Withholding Tax on Compensation Pursuant to the Amendments to the National Internal Revenue Revenue Code (NIRC) of 1997 as Introduced by Republic Act No. 10963, Other Known as the "Tax Reform for Acceleration and Inclusion (TRAIN) Law".

Republic Act No. 10963, otherwise known as the "Tax Reform for Acceleration and Inclusion  (TRAIN) Law" is effective on January 1, 2018 to December 31, 2022. In this regard, beginning January 1, 2018, every employer making compensation payments in their respective employees shall deduct and withhold from such compensation a tax determined in accordance with the Revised Withholding Tax Table attached in ANNEX "A".

Please refer: https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/RMC%20No%20105-2017.pdf of the full text of RMC No. 105-2017.

Schedule Of Collection Of Taxes And Remittances To The BTr During The 31st ASEAN Summit And Proclamation No. 331, s. 2017

The bureau recently issued BANK BULLETIN NO. 2017-15 advising all Authorized Agent Banks (AABs) to observe the schedule of collection of taxes and remittances to the BTr during the 31st ASEAN Summit and Proclamation No. 331, s. 2017, Declaring November 13, 14 and 15, 2017 as Special Non-working Days in the National Capital Region (NCR), Provinces of Bulacan and Pampanga.

With this, all Authorized Agent Banks (AABs) in the NCR, including the provinces of Bulacan and Pampanga are hereby advised to observe the following schedule of Collection of Taxes and Remittances to the Bureau of the Treasury (BTr), without the corresponding penalties:

Please refer: https://www.bir.gov.ph/images/bir_files/internal_communications_1/Advisory/bank%20bulletin%202017-15.pdf of the full text of Bank Bulletin No. 2017-15.

ePayment Channels of AABs

With the bureau's ePAY, taxpayers and practitioners who are avoiding hustles in paying their tax dues and liabilities could use the ePayment Channels of AABs.

The ePayment Channels accept tax payments through the use of either online, credit / debit / prepaid cards, and mobile payments.

Currently, the bureau has three (3) Available ePayment Gateways:

1. LandBank

2. Development Bank of the Philippines

3. Globe GCash

Please refer: https://www.bir.gov.ph/index.php/eservices/epay.html of the full text of the ePayment Channels of AABs.

BIR Privacy Policy

The bureau has implemented the Bureau of Internal Revenue Privacy Policy that applies to personal information in which they collect and process on all Bureau of Internal Revenue (BIR) forms, website and online services. 

Personal information refers to any information, whether recorded in material form or not, that will directly ascertain your identity. This includes your address and contact information.

Sensitive personal information is personal information that includes your age, date of birth, marital status, social security and other government identification numbers, financial information and tax returns.

WHAT PERSONAL INFORMATION WE COLLECT

We process and collect personal information for a lawful purpose connected with our functions and activities of administering the National Internal Revenue Code (NIRC) of 1997, as amended, and other existing tax laws. 

WHEN WE COLLECT PERSONAL INFORMATION

We collect personal information directly from you when you:

1. fill in a BIR form either online or in hard copy

2. register and use BIR online services

3. contact BIR by phone or other means 

We also collect personal information from third parties:

Take note that the NIRC of 1997, as amended, allows the Commissioner of Internal Revenue to collect personal information about a taxpayer from other people, entities and government offices subject to limitation provided for by existing laws. 

Third party information allows the BIR to ascertain the correctness of any returns, or in making a return when none has been made, or in determining the liability of any person for any internal revenue tax, or in collecting any such liability, or in evaluating tax compliance.

LIMITS ON USE AND DISCLOSURE OF YOUR PERSONAL INFORMATION

We only use and disclose personal information in connection with our lawful functions and activities of administering the NIRC of 1997, as amended, and other existing tax laws, and in accordance with existing legislations such as Republic Act (RA) No. 10173, or the Data Privacy Act of 2012, and RA No. 10021, or the Exchange of Information on Tax Matters Act of 2009.

The personal information we collect may be used to:

1. administer the NIRC of 1997, as amended, and other existing tax laws

2. update BIR database or records

3. provide to other government agencies which are entitled to the information under existing 

4. contact you, including sending you information electronically

HOW WE KEEP YOUR PERSONAL INFORMATION SECURE 

We respect your privacy and keep your information confidential unless we are lawfully required or allowed to disclose it or that you give your written consent to such disclosure. 

Under Section 270 of the NIRC of 1997, as amended, BIR personnel cannot divulge information collected from taxpayers concerning the latter’s business, income or estate, as well as the secrets, operation, style or work, or apparatus of any manufacturer or producer, or confidential information regarding the business of any taxpayer. There are, however, exceptions, namely:

1. disposition of income tax returns under Section 71 of the NIRC, as amended

2. disclosure of income tax returns under Section 26 of RA 6388 (Election Code) in case of an individual who files a certificate of candidacy and executes a waiver for the examination of his returns

3. information given by the BIR pursuant to a request by a foreign tax authority under an existing treaty pursuant to RA 10021 

The Data Privacy Act of 2012 clearly provides that personal data of an individual shall never be collected and processed without his or her consent, unless otherwise provided by law. 

We wish to emphasize that we have created and maintained a secure environment for the protection of your personal information and records. When we collect this information, it is kept safe and secure. We use reasonable security safeguards to protect information from loss, unauthorized access, use or disclosure.

Please refer: https://www.bir.gov.ph/index.php/privacy-policy.html of the full text Bureau of Internal Revenue Privacy Policy.

Promulgation and lmplementation of the People's Freedom of Information Manual of the BIR

The bureau has issued Revenue Memorandum Circular (RMC) No. 75-2017 for the promulgation and implementation of the People's Freedom of Information Manual of the Bureau of Internal Revenue (BIR) stated as follows: 

As a public service institution, the BIR is mandated to adopt and implement the constitutional policy of full public disclosure of its transactions involving public interest. subject to reasonable conditions prescribed by law. The BIR recognizes further the fundamental role of the right to a free and open exchange of information in democracy as a means to enhance transparency and accountability in government official acts, transactions, or decisions. 

In this regard, the BIR's Freedom of Information Manual ("Annex A') is hereby promulgated in order to promote said constitutional right and comply with the directive of Executive Order No 2 Series of 2016. Henceforth, to ensure the faithful compliance and observance of the BIR's Freedom of Information Manual everyone is directed to read and be familiar with its provisions. An electronic copy of this Manual shall be posted in the BIR website for reference. 

Click the following of the FOI Request Form.

Please refer https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2017/RMC%20No%2075-2007.pdf of the full text of RMC No. 752017.