Submission of Certificate of Compensation Payment and Tax Withheld (BIR Form No. 2316) and Certified List of Employees Qualified for Substituted Filing of ITR

Revenue Memorandum Circular (RMC) No. 24-2019 was issued and approved by the Commissioner Internal Revenue (CIR) on February 14, 2019 to clarify and address certain issues on the submission of Certificate of Compensation Payment and Tax Withheld (BIR Form No. 2316) and Certified List of Employees Qualified for Substituted Filing of ITR arising from the amendments introduced by Revenue Regulations (RR) No. 11-2018 to the existing provisions of RR No. 2-98.

CLARIFICATIONS

I. Submission of BIR Form No.2316 (duplicate original copy) to BIR Office

The provisions of Section 12 under RR No. 11-2018, amending Section 2.83 .l of RR No. 2-98, did not amend the pertinent provisions of RR No. 2-2015. The provisions of Section 12 of RR No. 11-2018 prescribe the manner of distribution of duly accomplished three (3) copies of BIR Form No. 2316. On the other hand, the provisions of RR No. 2-2015 prescribe the manner of submission of the duplicate original copy of BIR Form No. 2316 to the BIR Office.

Hence, RR No. 11-2018 did not re-introduce the submission of the said form in physical or hard duplicate original copies by employers to the BIR Office, in so far as the concerned taxpayers duly registered under the Large Taxpayers (LT) Service, or other non-LT registered taxpayers who opted to submit thru the Digital Versatile Disk (DVD) prescribed under RR No. 2-2015.

The Universal Storage Bus (USB) memory stick or other similar storage devices may be used in the absence or unavailability of the DVDs provided that the scanned copies of the said forms shall be made in uneditable format.

II. Submission to BIR Office of Certified List of Employees Qualified for Substituted Filing of

ITR (Annex ..F" of RR No. 11-2018)

While Annex "F" of RR No. 1 1-201 8 prescribed the specific format for the preparation of the Certified List of Employees Qualified for Substituted Filing of ITR, it was observed that the table provided therein for the prescribed list is only applicable for employers with eighteen (18) or less employees. Accordingly, in case additional pages are attached to the certification in order to accommodate additional employees or a separate list is prepared as an attachment to the certification, a reference statement to the additional pages or attachment shall be clearly indicated

in the certification, with the signature of the certifying employer or its duly authorized representative likewise indicated at the bottom of all the pages which are attached to the certification.

Further, consistent to the administrative policy of ease of doing business, the submission of un-notarized certified list may be allowed by this Bureau provided that all the pages attached to the certification are duly signed by the certifying employer or its duly authorized representative.

Please refer https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/RMC%20Full%20Text%202019/RMC%20No%2024-2019.pdf of the full text of RMC No. 24-2019.

Extension of statutory deadlines and timelines for the filing and submission of any document and the payment of taxes pursuant to Section 4 (z) of RA No. 11469

The bureau has issued Revenue Regulations (RR) No. 11-2020 which amends Section 2 of RR No. 10-2020 relative to the extension of statutory deadlines and timelines for the filing and submission of any document and the payment of taxes pursuant to Section 4 (z) of Republic Act No. 11469, otherwise known as "Bayanihan to Heal As One Act" and  in consideration of the Enhance Quarantine Period (ECQ) until May 15, 2020.

The following statutory deadlines for the submission and/or filing of the following documents and/or returns, as well as the payment of the following taxes, are extended as follows:

Please refer https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202020/Revenue%20Regulations%20No%2011-2020.pdf of the full text of RR No. 11-20 dated April 29, 2020.

New Offline eBIRForms Package v7.6

In connection with the ease of doing business and filing of BIR Returns, the bureau recently updated the Offline eBIRForms Package from Offline eBIRForms Package v7.5 to Offline eBIRForms Package v7.6.

To download the Offline eBIRForms Package v7.6 click the link below:

http://ftp.pregi.net/bir/ebirforms_package_v7.6.zip

List of VAT-exempt Diabetes, High-Cholosterol and Hypertension Drugs Prescribed by FDA

In compliance with Joint Administrative Order (JAO) No. 2-2018 entitled "Implementing Guidelines on the Value-Added Tax (VAT) Exemption on the Sale of Drugs Prescribed for Diabetes, High-Cholesterol and Hypertension under Republic Act No. 8424 Otherwise Known as the National International Revenue Code of 1997, as Amended by Republic Act No. 10963", Revenue Memorandum Circular (RMC) No. 4-2019 has issued by the bureau publishing the full text of the letter from the Food and Drug Administration (FDA) containing the "List of VAT-exempt Diabetes, High-Cholosterol and Hypertension Drugs".

Please refer: https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/RMC%20Full%20Text%202019/Letter.pdf of the letter dated January 10, 2019 from Atty. Katherine M. Austria-Lock, OIC Center for Drug Regulation and Research, FDA. 

For the List of VAT-exempt Drugs Prescribed, please consider the links as follows:

1. https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/RMC%20Full%20Text%202019/Diabetes.pdf for the Sale of Drugs Prescribed for Diabetes;

2. https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/RMC%20Full%20Text%202019/High-Cholesterol.pdf for the Sale of Drugs Prescribed for High-Cholesterol and

3. https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/RMC%20Full%20Text%202019/Hypertension.pdf for the Sale of Drugs Prescribed for Hypertension.

Please refer: https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/RMC%20Full%20Text%202019/RMC%20No%204-2019.pdf of the full text of RMC No. 4-2019.

Application for Registration for Individuals Earning Compensation Income (BIR Form No. 1902)

In relation with Republic Act No. No. 10963, Revenue Regulations (RR) No. 1-2020 has issued by the bureau amending Section 8 of RR No. 11-2018 to read as follows:

"SECTION 8. Section 2.79.1 of RR No. 2-98, as amended, is hereby amended and shall read as follows:

SECTION 2.79.1. Application for Registration for Individuals Earning Compensation Income (BIR Form No. 1902). - The application for registration of employees shall be accomplished by both employer and employee relating to the following information and other requirements:

(A) Employee - xxx

(B) Employer - xxx

(C) Procedures for the filing of the Application for Registration (BIR Form No. 1902) and/or Application for Registration Information Update (BIR Formm No. 1905).

(1) All employers shall require their concerned employees to accomplish in triplicate the Application for Registration BIR Form 1902 (if the employee does not have existing TIN), distributed as follows:

(1.1) Original copy - RDO;

(1.2) Duplicate - employer; and

(1.3) Triplicate - employee

The said forms shall be accomplished and submitted based on the following manner:

(a) xxx

(b) In case of changes in the information data in the Application for Registration (BIR Form No. 1902) previously submitted by the employee to its current employer, such as changes in employment, multiple employment status and amount of compensation income, the employee should furnish his/her employer a copy of BIR Form No. 1905 duly stamped received by the RDO where the employee is registered. The employer shall then make the necessary adjustments on the withholding tax of the employee based on the new information;

(2) Registration and information updates of employees receiving purely compensation income shall follow the existing policies and procedures thereon."

Please refer: https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%202020/RR%20NO.%201-2020.pdf of the full text of RR No. 1-2020.

Top Withholding Agents Who Are Obliged to Remit 1% and 2% Creditable Withholding Taxes

As part of ease of doing business, the bureau has issued Revenue Memorandum Circular (RMC) No. 143-2019 dated December 16, 2019 for the clarifications on the inclusion of Taxpayers as Top Withholding Agents who are obliged to remit the 1% and 2% Creditable Withholding Taxes Pursuant to the Criteria of Revenue Regulations (RR) No. 7-2019.

It is clearly stated in the regulations that it should be observed in the revenue regulations (RR No. 12-94; RR No. 17-2003; RR No. 14-2008 and RR No. 6-2009) that the obligation to withhold and remit these CWTs to this Bureau is mandated only to those taxpayers whose business operations have a significant level of economic impact contributory to the collection of revenues. Under this perspective, more potential revenues can be detected and collected by this Bureau through the other stakeholders and business partners of these taxpayers. Based on this rationale that RR No. 7-2019 was issued in order to simplify the criteria for the selection of Top Withholding Agents (TWAs), which were introduced by RR No. 11-2018.

Further, in implementing the said Regulations and consistent to the policy of ease of doing business by ensuring that the list of TWAs only reflect taxpayers who are complaint to the prescribed criteria of RR No. 7-2019, Operations Memorandum (OM) Order No. 20-2019 was issued by the Deputy Commissioner for Operations Group to all Regional Director's and Revenue District Officers. The OM excludes the following taxpayers in the identification of TWAs although they have satisfied the prescribed criteria of the said RR:

a. National government agencies. government-owned controlled corporations. state

universities and colleges. and local government units:

b. Taxpayers who were included because of one-time  transactions (i.e. estate and donor's tax);

c. Individual taxpayers deriving income on commission basis such as but not limited to insurance agent, and real estate broker, subjext to verification of their duly-filed 2018 Quarterly Income Tax Returns (BIR Form No. 1701Q) in order to determine the regularity of their transactions. Accordingly, if the P12M criteria has been satisfied only in one (1) taxable quarter, the taxpayer shall not be qualified as TWA; and

d. Taxpayers who are tax exempt from payment of income taxes with no proprietary activities (i.e. foundations. non-stock. non-profit and tax exempt educational

institutions, religious and charitable institutions. etc.).

On the basis of the above discussions and clarifications, in cases of publication of TWAs in the newspaper of general circulation wherein certain taxpayers are included or not deleted in existing list of TWAs but do not satisfy the criteria of RR No. 7-2019, or if they may have satisfied the same but qualify as taxpayers enumerated in OM No. 20-2019 who should be excluded from the list of TWAs, these taxpayers cannot be compelled to withhold the 1% and 2% CWTs.

Please refer: https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/RMC%20Full%20Text%202019/RMC%20No.%20143-2019.pdf of the full text of RMC No. 143-2019.

New eBIRForms Package v7.5 is now available for download

As part of the ease of doing business in the nation, the bureau has announced the update of new eBIRForms Package from eBIRForms Package v7.4.2 to  eBIRForms Package v7.5  and to download click the link below:

New eBIRForms Package v7.5: http://ftp.pregi.net/bir/ebirforms_package_v7.5.zip

The new eBIRForms Package v7.5 was issued to upgrade and update other forms for the benefits of all who are using the platform in filing taxes with ease and convenience.

New Format for the Notice to the Public to be Exhibited at Place of Business

Taxpayers will get intrigued about the new regulations recently issued by the bureau and this is related to the New Format for the Notice to the Public to be Exhibited at Place of Business. Revenue Regulations (RR) No. 10-2019 is issued amending pertinent provision of RR No. 4-2000, as amended by RR No. 7-2005, By Providing  a New Format for the Notice to the Public to be Exhibited at Place of Business.

It stated in Section 2 of the regulations which refers to Exhibition of Notice at Place of Business with purpose as follows: 

For the purpose of improving revenue collection through enforcement of the legal, provision on the issuance of official receipt (OR)/soles invoice (SI) and to inform the public/buyers to require the seller to issue OR/SI, persons required by low to issue such receipts/invoices are hereby directed to post in their places of business, including branches and mobile stores, in such area conspicuous to the public, the below Notice to Issue Receipts/Invoices (NIRI):

These Regulations shall take effect after fifteen (15) days following publication in two (2) newspapers of general circulation.

Please refer https://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202019/RR%20No.%2010-2019.pdf of the full text of RR No. 10-2019.

Application for Registration of Professional (Individual) - Licensed (PRC, IBP) / In General

As part of the ease of doing business, especially, in the Application of Registration of Business Profession - Licensed (PRC, IBP) and In General, the bureau has updated the requirements and BIR Form No. 1901 (Application for Registration).

If you want to register, I suggest to visit the bureau's office and inquire the Authorized Person of the Bureau of Internal Revenue (BIR) within your jurisdiction for the Application for Registration of Professional (Individual) - Licensed (PRC,IBP) / In General.

After gathering information, you may consider the general procedures for the  Application for Registration of Professional (Individual) - Licensed (PRC, IBP) / In General as follows:

Step 1. Fill-up BIR Form No. 1901 (Application for Registration) https://www.bir.gov.ph/images/bir_files/taxpayers_service_programs_and_monitoring_1/1901%20Jan%202018%20ENCS%20V4_03.04.2019.pdf

1. PhilSys Number (PSN) - Refer this link: https://www.bir.gov.ph/images/bir_files/research_and_statistics/NSCB_PSIC%202009.pdf of the PSIC 2009 contains the Philippine Standard Industrial Classification Code.

2. Registering Office - Mark with an "X" if Head Office or otherwise Branch Office. ((No. 4)

3. Fill out with your Taxpayer Identification Number (TIN) if with existing TIN. Otherwise request BIR for the issuance of TIN. (No. 4)

4. Mark with an "X" of the Taxpayer Type (No. 6) - Professional - Licensed (PRC, IBP) or Professional - In General

5. Fill out your Taxpayer's Name ((No. 7)

5. Mark with an "X" of your Gender (No. 8)

6. Mark with an "X" of your Civil Status (No. 9)

7. Fill out your Date of Birth ((No. 10)

8. Fill out your Place of Birth (No. 11)

9. Fill out your Mother's Maiden Name (No. 12)

10. Fill out your Father's Name (No. 13)

11. Fill out your Citizenship or Other Citizenship (No. 14 or No. 15)

12. Fill out your Local Residence Address (No. 16)

13.  Fill out your Business Address (No. 17)

14. Fill out your  Identification Details (e. q. passport, government issued ID, company ID, etc.) - No. 21

15. Fill out your Preferred Contact Type (No. 22)

16. Fill out your Employment Status of Spouse No. 24) and others (if applicable)

17. Fill out your Primary/Secondary Industries (No. 35)

18. Fill out your Registration / Accreditation Number (No. 37A) & Others (if applicable)

19. Determine your applicable Tax Types (No. 39). To be filled up by BIR)

20. Fill Authority to Print Receipts and Invoices (No. 40) and others. Secure Receipts for Services and determine if you will register as VAT or Non-VAT

21. Fill out the other required information (if applicable).

Step 2. Attached the Documentary Requirements:

1. Any Identification issued by an authorized government body (e. g. Birth Certificate, passport, driver's license, Community Tax Certificate) that shows the name, address and birthdate of the applicant.

2. Photocopy of Professional Tax Receipt/Occupational Tax Receipt issued by the LGU.

3. Proof of Payment of Registration Fee (RF) (if with existing TIN or applicable after TIN issuance).

4. BIR Form No. 1906 (Select an Accredited Printer)

5. Final & clear sample of Principal Receipts/ Invoices

Step 3. Fill out BIR Form No. 1905 (Application for Registration Information Update/Correction/Cancellation) for the Registration of Books of Accounts (No. 10) of Manual of Books of Account (New sets of permanently bound books of accounts).

1. Fill out your Taxpayer Identification Number (TIN); RDO Code & Contact Number - No.1, No. 2 & No. 3, respectively.

2. Mark with an "X" Update of Books of Accounts (proceed to Number 10) - No. 6 Other Updates

3. Fill out the Required Books of Accounts (No. 10). I suggest to register Cash Receipts Book, Cash Disbursements Book, Ledger Book & Journal Book or General Journal Book.

4. Fill out the Declaration (No. 12).

Don't forget to inquire other information such as your Certification of Registration (COR) and other necessary documents needed for the exercise of your business profession.

Guidelines in the Processing and Issuance of Certificate of Tax Exemption of Non-Stock, Non-Profit Corporations

Revenue Memorandum Order (RMO) No. 38-2019 was issued by the bureau to clarify the Tax Exemption of Non-Stock, Non-Profit Corporations under Section 30 of the National Internal Revenue Code of 1997, as Amended.

Guidelines in the Processing and Issuance of Certificate of Tax Exemption of Non-Stock, Non-Profit Corporations:

A. Documentary Requirements. 

1. Original application letter for issuance of Tax Exemption Ruling. The letter shall cite the particular paragraph of Section 30 of the NIRC, as amended, under which the application for exemption/revalidation is being based; 

2. Certified true copy of the latest Articles of Incorporation (AOI) and By-Laws issued by the Securities and Exchange Commission (SEC). The AOI must expressly state the following provisions, to wit: 

i. It is a non-stock, non-profit corporation or association; 

ii. No part of the corporation or association's net income shall inure to the benefit of any private individual; 

iii. The trustees of the non-profit corporation or association do not receive any compensation or remuneration; and 

iv. In case of dissolution, its assets shall be distributed to one or more entities formed for the purpose/purposes similar to its own, or to the Philippine government for public purpose. 

3. Original Certification under Oath by an executive officer of the corporation or association as to: 

(i) full description of its past, present, and proposed activities, 

(ii) the sources and disposition of income, 

(iii) detailed description of all revenues which it seeks to be exempted from income tax, and 

(iv) amount of income, compensation, salaries or any emoluments paid by the corporation or association to its trustees, officers and other executive officers. 

4. Original Certification issued by the RDO where the corporation or association is registered, indicating the TIN of the corporation, and certifying that said corporation is not subject of any pending investigation, on-going audit, pending tax assessment, administrative protest, claim for refund or issuance of tax credit certificate, collection proceedings, or a judicial appeal; or if there be any, the Original Certification issued by the RDO on the status thereof; and 

5. Certified true copies of the Income Tax Returns or Annual Information Returns and Financial Statements of the corporation or association for the last three (3) years. 

B. Procedure. 

a. The request for CTE shall be filed with the RDO where the corporation is registered. The RDO or his designated Revenue Officer of the Day must preevaluate the corporation's submission using the checklist (Annex "A"). If there is incomplete submission of the documentary requirements, the applicant shall be notified thereof and the entire documents shall be returned to the applicant for his completion. 

b. Upon receipt of the complete documentary requirements (docket) in support of the application, the concerned RDO personnel shall pre-evaluate the same and shall determine whether or not the applicant qualifies as an exempt corporation or association under Section 30 of the NIRC, as amended. 

i. If based on the pre-evaluation, the RDO is of the position that the corporation or association is qualified, he shall prepare the CTE (Annex “B”), together with a memorandum stating the factual and legal basis for recommending the issuance of the CTE, and endorse the docket to the Office of the Regional Director. If the Regional Director concurs with the RDO's recommendation, he shall sign the CTE and issue the same to the requesting corporation. Otherwise, he shall return the docket to the RDO together with his findings/instructions. 

ii. If the RDO is of the position that the corporation or association does not qualify, he shall notify in writing the applicant of such findings, stating the factual and legal bases for the denial. The applicant may appeal the denial to the Regional Director within thirty (30) days from the date of receipt of the written notice of denial. If the application for tax exemption/re-validation is denied, the corporation or association shall be held liable for income tax and shall be accordingly assessed for deficiency taxes, inclusive of penalties and interest.

Please refer: https://www.bir.gov.ph/images/bir_files/internal_communications_3/Full%20Text%20of%20RMO%202019/RMO_No.%2038-2019.pdf