Proper Tax Treatment of Passed-on Gross Receipts Tax

Revenue Memorandum Circular (RMC) No. 62-2016 has issued by the Bureau to clarify the Proper Tax Treatment of Passed-on Gross Receipts Tax under Sections 121 and 122 of the National Internal Revenue Code, as amended (Tax Code).

It was mentioned in the memorandum that all banks, non-bank financial intermediaries performing quasi-banking functions, financing companies and other financial intermediaries not performing quasi-banking functions doing business in the Philippines are directly liable for GRT pursuant to Sections 121 and 122 of the Tax Code.

"SEC. 121. Tax on Banks and Non-Bank Financial Intermediaries Performing Quasi-Banking Functions. - There ,shall be collected a tax on gross receipts derive from sources within the Philippines by all banks and non-bank financial intermediaries in accordance with the following schedule: xxx" 

"SEC. 122. Tax on Other Non-Bank Financial Intermediaries. - There shall be collected a tax of five percent (5%) on the gross receipts derived by other non-honk financial intermediaries doing business in the Philippines, from interest, commissions, discounts and all other items treated as gross income under this Code: xxx" 

The "passed-on" GRT should form part of the tax base upon which the GRT is based for gross receipts tax purposes, based on the definition of "gross receipts", that is based on "actual or constructive receipt" of income. Since banks, non-bank financial intermediaries, financing companies and other financial intermediaries not performing quasi-banking functions doing business in the Philippines are directly liable for GRT on gross receipts derived by them from business operations, the "passed-on" GRT shall be considered as receipt of gross income specified under Section 32(A) of the Tax Code.

Banks and non-bank financial intermediaries can claim the GRT paid as a deductible expense for income tax purposes pursuant to Section 34 (C) of the Tax Code subject to the actual remittance of the GRT as provided under Section 128 of the Tax Code. The "passed-on" GRT shall be considered as receipt of income as specified under Section 32 of the Tax Code.

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/RMC%20No%2062-2016.pdf of other concerns, illustration and full text of RMC No. 62-2016

Supplemental Rules on the Matter of Prescribing the Investigation of Parties in Transactions Involving the Transfer/Assignment/Sale of Properties

The bureau has issued Revenue Memorandum Order (RMO) No. 25-2016 as a supplement to the guidelines and procedure in the conduct of investigation on the capacity of a party/ies to acquire properties provided for in RMO No. 24-2016.

A paragraph shall be added to Section I Guidelines and Procedures (iii)(b) of Revenue Memorandum Order No. 24-2016, and said subsection shall now read as follow:

"b. Financial capacity of the buyer to acquire the Subject Property shall be determined during the application of CARs and TCLs.

If the buyer/trasferee is proven to have no financial capacity to acquire the Subject Property, the transaction is not a sale but a donation and donor's tax should be imposed and not capital gains tax, and a duly executed Deed of Donation shall be required.

However, if the seller/transferor/assignor is a corporation or is a stranger to the buyer/trasferee of the Subject Property, it shall be presumed that the buyer/trasferee/assignee have earned income that he/she/it did not declare and taxes due thereon where not paid. In addition to any tax due on the seller and it is proven that the buyer/transferee/assignee does not have any financial capacity to purchase the Subject Property, income taxes shall be assessed against the buyer/transferee/assignee on that amount of the consideration for which buyer/transferee/assignee on the amount of the consideration for which buyer/trasferee/assignee cannot show proof that he/she/it has the financial capacity for, on the taxable year when the sale/trasferer/assignment of the Subject Property occurred."

The RMO No. 25-2016 is dated June 12, 2016. This Order shall take effect immediately. 

SOURCE: http://www.bir.gov.ph/images/bir_files/internal_communications_3/Full%20Text%20of%20RMO%202016/RMO%20No.%2025-2016.pdf

How to Set-up User Name and Password with BIR Alphalist Data Entry System Version 5.1

Currently, the BIR has issued the Alphalist Data Entry System and Validation Module Version 5.1 for creation of Monthly Alphalist of Payees (MAP), Summary Alphalist of Withholding Tax (SAWT) and others for reporting and compliance with the bureau.

 

After you have downloaded the latest version in your PC desktop, laptop, USB or any other compatible devices, you can create a User Name and Password to log on to data entry as follows:

 

1. For new user, click the bir1604v51 Alphalist Data Entry System Bureau of Internal Revenue icon to open the Alphalist Data Entry Ver. 5.1. To log to data entry, type the default User Name: user and default Password: password

 

2. In the Main Menu of the Alphalist data Entry System, click Withholding Agent to update the Tax Payer's information and other details.

 

3. In Main Menu, click the Utilities to Set-up or Change User and Password. Under the Utility Setups, click Change User to set-up or change User Name and click Change Password to create new password.

 

In the Utility Setups, you can explore the Printer Setup, Change User, Delete User, Change Password, Add New User, Import Records, Purge and Archive and ReindexAll.

 

To download the Alphalist Data Entry and Validation Module Version 5.1, visit the blog post: http://philippinetaxtalk.blogspot.com/2016/01/alphalist-data-entry-and-validation.html and follow the instructions provided.

 

 

Availability of the Update of Exemption of Employees (UEE) Data Entry Module in Filing of the BIR Form No. 2305 and 2305 Batch File Validation Module

The Bureau has issued Revenue Memorandum Circular (RMC) No. 59-2015 in relation to RR 7-2012 to circularize the availability of Update of Exemption of Employees (UEE) (BIR Form No. 2305 - Certificate of Update of Exemption and of Employees and Employee's Information) Data Entry Module and 2305 Batch File Validation Module which shall be used for the following:

1. Updating of Employee's Additional Exemption for Dependents;

2. Change of Status; and

3. Execution of the "Waiver to Claim the Additional Exemption" by the husband ; or revocation of the previously executed "Waiver to Claim the Additional Exemption by the Husband"

UEE Data Entry Module - This is a data entry module where the employer inputs all the registration updates of exemptions of its employees one by one with validation before sending electronically to the BIR.

2305 Batch File Validation Module - This is a validation module of BIR Form 2305 for the CSV file generated by the employer using their own extract program.

The UEE Data Entry and 2305 Batch file Validation Module are available at http://www.bir.gov.ph/index.php/downloadables.html or click the following: 

Update of Exemption of Employees Data Entry Module: http://www.bir.gov.ph/images/bir_files/downloadables/BIRF2305/BIRF2305.accdb

2305 Batch File Validation Module (EXE) http://www.bir.gov.ph/images/bir_files/downloadables/BIRF2305/BIRF2305ValidationM.exe and (ZIP) http://www.bir.gov.ph/images/bir_files/downloadables/BIRF2305/BIRF2305ValidationM.zip

Job Aid - Batch Validation Module: http://www.bir.gov.ph/images/bir_files/downloadables/BIRF2305/job_aid_batch_entry_annex_b.pdf

Job Aid - Batch Data Entry Module: http://www.bir.gov.ph/images/bir_files/downloadables/BIRF2305/job_aid_data_entry_annex_a.pdf

SOURCE: http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMC%20No%2059-2015_copy_copy.pdf and http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/annexesA-F.pdf

How to Apply SSS Retirement Benefit

A member who is qualified to avail the SSS Retirement Benefit should consider the following:

1. Application Requirements

a. Retirement Claim Application

b. DDR Signature Card

c. DDR Savings Account form;

d. Certificate of Separation from last employer (if member is less than 65 years old) ;

e. Passbook or ATM Card (if pension);

A member must open a single savings account in the bank of his choice and submit to the SSS his savings account number and a photocopy of his passbook or ATM Card upon filing of his application. 

f. The original copy of the passbook must be presented for authentication purposes.

g. Certified true copies of birth or baptismal certificate of dependent children;

h. Certified of cessation of business or practice of profession (for self-employed members who are less than 65 years old);

i. Certified true copy of marriage certificate

j. Proofs of filiation for illegitimate dependent children

k. UMID or SSS biometrics ID card or two (2) other valid IDs, both with signature and at least one (1) with photo and date of birth.

* Other supporting documents may be requested by SSS depending on the evaluation of the claim

2. Filing Procedure

Applications for retirement benefit are filed at any SSS branch or representative office. 

SOURCE: https://www.sss.gov.ph/sss/appmanager/pages.jsp?page=retirementapplication

How To Increase Your Pag-IBIG Monthly Savings: Save More and Qualify for Higher Loan Amounts and Bigger Dividend Earnings

The savings of Pag-IBIG members is earning with 4% annual dividends and the bigger dividends means bigger savings for its members.

Besides,  the bigger savings with Pag-IBIG means that your maximum loanable amount is higher.

1. The Multi-Purpose Loan (MPL) Program aims to address the member’s immediate financial needs. The loan amount is based on the member-borrower’s total savings and length of membership with Pag-IBIG.* 

2. The Calamity Loan Program is open to members whose place of residence has been placed under a state of calamity after a natural disaster. The loan amount is 80% of the member-borrower’s total savings with Pag-IBIG.* * 

 - While the loan amount of the MPL will not be deducted from the Calamity loan and vice versa, the combined loan amount under both programs should not exceed 80% of the member’s total savings. 

3. The Housing Loan Program is a financial assistance for the purchase or construction of a residential unit. The maximum loan amount is P6 million. The member-borrower’s monthly savings with Pag-IBIG, together with his gross monthly income, the appraised value of the property, and his actual need, shall be considered when computing his approved loan value.

Here’s how to increase your monthly savings: 

1. For employed members, just inform your HR officer that you want to pay more than the minimum savings of P100 per month. Your HR may require you to sign a form pertaining to the increased monthly savings. 

2. For individual payors, like professionals, other OFW-members, businessmen, etc., just pay the higher monthly savings to Pag-IBIG. No need to fill out any form. Your increased savings will automatically be credited to your total savings. 

Where to pay: 

1. For employed members who pay their savings to Pag-IBIG thru salary deduction, their employers may remit their savings thru any of Pag-IBIG’s accredited collecting banks or over- the -counter at the nearest Pag-IBIG branch office. 

Employers may remit their employees membership savings at the following accredited collecting agents: - Union Bank (Pag-IBIG Hub) - BPI (BPI ExpressLink) - LANDBANK (wePayAccess) - BancNet (Pag-IBIG Net)** - Security Bank (Pag-IBIG Real Time Facility)** **By 3rd quarter 2013 

Note: Payment through these facilities requires enrollment. 

2. Individual payors may pay their savings using the following facilities:  

- VISA or MasterCard credit cards 

- Globe GCash 

- Bayad Center outlets 

- SM Business Centers, Save More and SM Hypermart

- Over-the-counter at the nearest Pag-IBIG branch office. 

For more information, you may also call our 24/7 hotline number 724-4244 or email us at publicaffairs@pagibigfund.gov.ph. 

SOURCE: http://www.pagibigfund.gov.ph/faqpdf/Save%20More%20with%20Pag-IBIG%20Fund%20Pop.pdf

Who Else Wants to Know about the SSS Retirement Benefit, Benefit Computation, Benefit Payment and Other Benefits?

A member is qualified to avail of this benefit if:

1. Member is 60 years old, separated from employment or ceased to be self-employed, and has paid at least 120 monthly contributions prior to the semester of retirement.

2. Member is 65 years old, whether employed or not, and has paid at least 120 monthly contributions prior to the semester of retirement.

3. Underground Mineworkers:

- Aged 55 years old and is an underground mineworker for at least 5 years (either continuous or accumulated) prior to the semester of retirement but whose actual date of retirement is not earlier than March 13, 1998; separated from employment or has ceased self-employment; and has paid at least 120 monthly contributions prior to the semester of retirement.

- Aged 60 years old, whether employed or not, and has paid at least 120 monthly contributions prior to the semester of retirement.

The SSS retirement benefit is a cash benefit either in monthly pension or lump sum paid to a member who can no longer work due to old age.

Two types of SSS retirement benefit:

1. Monthly pension - a lifetime cash benefit paid to a retiree who has paid at least 120 monthly contributions to the SSS prior to the semester of retirement.

2. Lumpsum amount - granted to a retiree who has not paid the required 120 monthly contributions. It is equal to the total contributions paid by the member and by the employer including interest.

Monthly Pension

Benefit Computation

The monthly pension depends on the member's paid contributions, his credited years of service (CYS), and the number of his dependent minor children that must not exceed five. The monthly pension will be the highest amount resulting from either one of these three pension formulae:

1. the sum of P300 plus 20 percent of the average monthly salary credit plus two percent of the average monthly salary credit for each credited year of service (CYS) in excess of ten years; or

2. forty (40) percent of the average monthly salary credit; or

3. P1,200, if the CYS is at least 10 but less than 20; or P2,400, if the CYS is 20 or more. 

The monthly pension is paid for not less than 60 months. 

A member who retires after age 60 with a total of 120 monthly contributions may be qualified to a monthly pension based on whichever is higher of the following:

- the monthly pension computed at the earliest time the member could have retired had been separated from employment or ceased to be self-employed plus all adjustments thereto; or

- the monthly pension computed at the time when the member actually retires.

A pensioner who retires more than once shall be entitled to the higher of:

- the monthly pension computed for the first retirement claim; or

- the re-computed monthly pension for the new claim

Dependents Allowance 

1. The legitimate, legitimated or legally adopted, and illegitimate children, conceived on or before the date of retirement of a retiree will each receive dependents' allowance equivalent to 10 percent of the member's monthly pension, or P250, whichever is higher.

2. Only five minor children, beginning from the youngest, are entitled to the dependents' allowance. No substitution is allowed.

3. If there are more than five dependents, the legitimate, legitimated or legally adopted children shall be preferred.

The dependents' allowance stops when the child reaches 21 years old, gets married, gets employed, or dies. However, the dependents' allowance is granted for life for children who are over 21 years old, if they are incapacitated and incapable of self-support due to physical or mental defect that is congenital or acquired during minority.

Benefit Payment

The retiree-member has the option to receive the first 18 months' pension paid out in lumpsum, but discounted at a preferential rate of interest to be determined by the SSS. The member shall start receiving his pension on the 19th month, and every month thereafter. This option for advance payment shall be exercised only when filing the first retirement claim. It is only the advanced pension payments that are discounted on the date of payment; the dependent's allowance and 13th month pension are excluded from the advanced 18-month pension amount.

The monthly pension is paid thru the member's designated bank thru which he wishes to receive his pension benefits under the "Mag-Impok sa Bangko" program. This became mandatory effective September 1,1993.

Upon approval of the claim, the SSS will send the member a notice voucher indicating when to withdraw the benefit from the bank.

Other Benefits 

1. The retiree is entitled to a 13th month pension payable every December.

2. All retiree pensioners prior to the effectivity of RA 7875 on March 4, 1995 are automatically considered members of PhilHealth and, along with their legal dependents, are entitled to PhilHealth hospitalization benefits. On the other hand, retirees effective March 4,1995 up to the present will be entitled to PhilHealth hospitalization benefits only if they have contributed 120 monthly Philhealth/Medicare contributions. The counting of 120 monthly contributions shall start in 1972, when the Medical Care Act of 1969 started implementation.

A copy of the DDR print-out indicating the type of claim is retirement in nature and the effectivity date of the pension, or in its absence, a copy of retiree-pensioner certification issued by SSS shall be required. They need to register under Philhealth for the issuance of a Philhealth ID card for non-paying members. 

IMPORTANT!

- Upon the death of a retiree pensioner, the primary beneficiaries shall be entitled to 100 percent of the monthly pension, and the dependents to the dependents' allowance.

- If the retiree pensioner dies within sixty (60) months from the start of the monthly pension and has no primary beneficiaries, the secondary beneficiaries shall be entitled to a lumpsum benefit equivalent to the total monthly pensions corresponding to the balance of the five-year guaranteed pension period, excluding the dependents' allowance. 

- In case the retiree-member who is less than 65 years old resumes employment or self-employment, the monthly pension shall be suspended and the member shall again be subjected to compulsory coverage. 

- If the retiree-member is 65 years old and older, he can resume employment or self-employment without prejudice to his monthly pension and without need for compulsory coverage.

SOURCE:https://www.sss.gov.ph/sss/appmanager/pages.jsppage=retirementpension; https://www.sss.gov.ph/sss/appmanager/pages.jsp?page=retirementqualifying

Additional Criteria in the Accreditation of Printers Engaged in Printing Services

The Bureau has issued Revenue Regulations No. 5-2016 amending Section 3 of Revenue Regulations No. 15-2012 Providing for Additional Criteria in the Accreditation of Printers Engaged in Printing Services of Official Receipts, Sales Invoices and Other Commercial Receipts and/or Invoices as follows:

Section 3 of RR No. 15-2012 - Policies and Guidelines 

xxx     xxx     xxx

2. To qualify for accreditation with the Bureau, the applicant-printer must comply with the criteria enumerated below:

xxx     xxx     xxx

j. The printer has no record of any pending criminal complaint filed by the BIR for tax evasion and other criminal offenses under the Tax Code, whether filed in court or in the Department of Justice (DOJ) or subject of final and executory judgment by court;

k. The printer has not been tagged in any BIR tax system as "Cannot Be Located (CBL) Taxpayer".

CBL shall refer to a status of a registered taxpayer whose whereabouts could not be located in the address given by him/it in the return filed or at the address registered/given by him/it to the BIR;

l. The Printer has not been tagged in any BIR tax system as "Inactive".

Inactive shall refer to a status of a registered taxpayer under any of the following:

i. A non-individual taxpayer that has notified the BIR district office of the temporary cessation of its business operations;

ii. A taxpayer that has stopped filing all its tax returns for the last two (2) years, which requires issuance of a notice of investigation;

iii. A newly registered taxpayer who fails to file the required tax returns/declarations due for the applicable initial quarter;

iv. A taxpayer that may be identified as such by the CIR in a separate revenue issuance.

xxx     xxx     xxx

22. Accreditation shall be valid for five (5) years from the date of issuance of the Certificate of Accreditation (Annex "A"). The Printer shall apply for renewal of accreditation within thirty (30) days prior to the expiration of the validity period.

Example:

Date of issuance:     June 30, 2016

Date of expiration:     June 30, 2021

Thus, the printer may apply for renewal starting May 31, 2021, and the last date shall be on June 29, 2021;

23. Only principal and supplementary receipts/invoices printed by a printer that was accorded official accreditation and consequently included in the BIR List of Accredited Printers shall be valid for purposes of claiming VAT; otherwise, such receipts/invoices shall be deemed spurious, thus shall not serve a valid claim for Input Tax by the buyer of goods and/or services.

SOURCE: http://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202016/RR%205-2016/RR%205-2016.pdf and http://www.bir.gov.ph/images/bir_files/old_files/pdf/66914RR%20No%2015-2012.pdf

Annex A: http://www.bir.gov.ph/images/bir_files/old_files/doc/66914Annex%20A.doc

Philippines-Germany tax treaty

The bureau has issued Revenue Memorandum Circular No. 15-2016 about the renegotiated Agreement between the Republic of the Philippines and the Federal Republic of Germany of the Avoidance of Double Taxation with Respect to Taxes on Income and on Capital ('Philippines-Germany tax treaty") has entered into forced on December 18, 2015.

The treaty shall have effect in respect of taxes covered by the said tax treaty, including taxes withheld at source, for any taxable period beginning on or before the first day of January 2016.

For this purpose the concerned German resident income earner or an authorized representative of the latter should file a duly accomplished BIR Form No. 1901 (Application for Relief from Double Taxation) together with the required documents specified at the back of the form, pursuant to Revenue Memorandum Order (RMO) No. 72-2010.

Source:http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/RMC%20No%2015-2016.pdf

eBIRForms Package v6.1 (New) Is Now Available

The BIR just issued the new version of eBIRForms Package from v6.0 to v6.1.

To download the Offline eBIRForms Package v6.1, just click the following link:

http://ftp.pregi.net/bir/ebirforms_package_v6.1.zip

The Electronic Bureau of Internal Revenue Forms (eBIRForms) was developed primarily to provide taxpayers with an alternative mode of preparing and filing tax returns that is easier and more convenient. The use of eBIRForms by taxpayers will improve the BIR's tax return data capture and storage thereby enhancing efficiency and accuracy in the filing of tax returns. Through the use of the downloadable eBIRForms Software Package (also known as the Offline Package), taxpayers and Accredited Tax Agents (ATAs) will be able to fill up tax returns offline and submit it to the BIR through the Online eBIRForms System.

Offline eBIRForms PackageThe Offline eBIRForms Package is a tax preparation software that allows taxpayers and ATAs to accomplish or fill up tax forms offline. Instead of the conventional manual process of filling up tax returns on pre-printed forms that is highly susceptible to human error, taxpayers/ATAs can directly encode data, validate, edit, save, delete, view, print and submit their tax returns. The package can do automatic computations and has the capability to validate information encoded by taxpayers/ATAs. After filling out the forms in this package, taxpayers/ATAs can submit it to the Online eBIRForms System.

To download the Offline eBIRForms Package v6.1 click here.

To download the new eBIRForms Package v6.3:

http://philippinetaxtalk.blogspot.com/2017/04/ebirforms-package-v63-new-version.html