Revised BIR Form No. 2551Q (Quarterly Percentage Tax Return)

Revenue Memorandum Circular (RMC) No. 26-2018 is a circular issued by the bureau to prescribe the revised BIR Form No. 2551Q (Quarterly Percentage Tax Return) in line with the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

Taxpayer shall file and/or pay through the following mode:

A. Manual Form – 
1. The newly revised BIR Form No. 2551Q [refers to the new quarterly percentage tax return which was revised and affected by the implementation of the TRAIN Law and with revision date of January 2018 (ENCS)] is already available under the BIR Forms-VAT/Percentage Tax Returns section of the BIR website (www.bir.gov.ph). 

2. Manual filers shall download the PDF format of BIR Form No. 2551Q and print it then fill out the applicable items/fields. 

3. Taxable amount to be indicated in the quarterly percentage tax return shall be the total gross sales/receipts forthe quarter (i.e., January to March, April to June, etc.) 

4. Payment of the percentage tax due thereon shall be made thru: 

a. Manual Payment:

> Authorized Agent Bank (AAB) located within the territorial jurisdiction of the Revenue District Office (RDO) where the taxpayer is registered 

> In places where there are no AABs, the return shall be filed and the tax due shall be paid with the concerned Revenue Collection Officer (RCO), thru the MRCOS facility, under the jurisdiction of the RDO. 

b. Online Payment:

> thru GCash Mobile Payment

> Landbank of the Philippines (LBP) Linkbiz Portal, for taxpayers who have ATM account with LBP and/or holders of Bancnet ATM/Debit Card

>DBP Tax Online, for holders of VISA/Master Credit Card and/or Bancnet ATM/Debit 

5. In case manual filers paid the percentage taxes due for the first and second months of the quarter using BIR Form No. 2551M, taxpayer still needs to file the quarterly percentage tax return (BIR Form No. 2551Q) and indicate in the return the total gross sales/receipts for the quarter and the total payment made in the first two (2) month/s. The payment/s made shall be reflected in Item No. 17-Other Credit/Payment Made of the newly revised BIR Form No. 2551Q. 

6. If manual filers also paid the percentage tax due for the third month using BIR Form No. 2551M, taxpayer still needs to file the quarterly percentage tax return (BIR Form No. 2551Q) and indicate in the return the total gross sales/receipts for the quarter and the total payments made for the three (3) month/s in Item No. 17-Other Credit/Payment made of the newly revised BIR Form No. 2551Q. 

If the computation above resulted to a payable, taxpayer shall pay the tax due thereon per number four (4) above of this RMC. If the result is no payment/overpayment, follow the existing procedure for “No Payment Return” which is to file thru the use of eBIRForms. Use the enhanced old BIR Form No. 2551Q [refers to the existing quarterly percentage tax return in eBIRForms and eFPS with revision date of February 2002 (ENCS)] in Offline eBIRForms Package v7 to file the ‘No Payment Return” and, as a work around procedure, reflect the payment/s made in Item No. 20A-Creditable Percentage Tax Withheld per BIR Form No. 2307. 

B. Electronic Bureau of Internal Revenue Forms (eBIRForms) 

1. The newly revised BIR Form No. 2551Q is not yet available in eBIRForms. 

2. eBIRForms filers shall use the enhanced old BIR Form No. 2551Q in Offline eBIRForms Package v7, which contained all the alphanumeric tax codes (ATCs) enumerated in BIR Form No. 2551M (i.e. PT010, PT040, PT041, PT120, PT130, etc.), in filing the return. 

3. Taxable amount to be indicated in the quarterly percentage tax return shall be the total gross sales/receipts for the quarter. 

4. In case eBIRForms filers already paid the percentage taxes for the first and/or second and/or third month of the quarter, as a work around procedure, payment/s made are to be reflected in Item No. 20A-Creditable Percentage Tax Withheld per BIR Form No. 2307. 

5. Payment of the percentage tax due thereon shall be made thru: 

a. Manual Payment:

> Authorized Agent Bank (AAB) located within the territorial jurisdiction of the Revenue District Office (RDO) where the taxpayer is registered 

> In places where there are no AABs, the return shall be filed and the tax due shall be paid with the concerned Revenue Collection Officer (RCO), thru the MRCOS facility, under the jurisdiction of the RDO. 

b. Online Payment:

> thru GCash Mobile Payment 

>Landbank of the Philippines (LBP) Linkbiz Portal, for taxpayers who have ATM account with LBP and/or holders of Bancnet ATM/Debit Card 

> DBP Tax Online, for holders of VISA/Master Credit Card and/or Bancnet ATM/Debit 

C. Electronic Filing and Payment System (eFPS) - 

1. The newly revised BIR Form No. 2551Q is not yet available in eFPS. 

2. eFPS Filers shall use the enhanced old BIR Form No. 2551in the system which contained all the alphanumeric tax codes (ATCs) enumerated in BIR Form No. 2551M (i.e. PT010, PT040, PT041, PT120, PT130, etc.) in filing the return. 

3. Taxable amount to be indicated in the quarterly percentage return shall be the total gross sales/receipts for the quarter. 

4. In case eFPS filers already paid the percentage taxes for the first and/or second and/or third month of the quarter, as a work around procedure, payment/s made are to be reflected in Item No. 20A-Creditable Percentage Tax Withheld per BIR Form No. 2307. 5. After efiling, proceed to online payment by clicking the proceed to payment button and pay the percentage tax due. All concerned are hereby enjoined to give this Circular as wide

Please refer: https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2018/RMC%2026-2018/RMC%2026-2018.pdf of the full text of RMC No. 26-2018; https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2018/2551Q%20Jan%202018%20ENCS%20final.pdf of the Revised BIR Form No. 2551Q (Quarterly Percentage Tax Return) Manual Form and https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2018/RMC%2026-2018/2551Q_guidelines.pdf Guidelines.

Download Offline eBIRForms Package v7

Did you know that the bureau need to update the system of eBIRForms to comply with the new revenue regulations, laws, circulars and reliable electronic filing system in the PH?

With this, the government agency recently published its eBIRForms Package v7 (New) to update eBIRForms Package 6.4

To download the Offline eBIRForms Package v7, please click: http://ftp.pregi.net/bir/ebirforms_package_v7.zip or visit https://www.bir.gov.ph/

To download the Offline eBIRForms Package v7.1, please click: http://ftp.pregi.net/bir/ebirforms_package_v7.zip or visit https://www.bir.gov.ph/ or read http://philippinetaxtalk.blogspot.com/2018/04/download-offline-ebirforms-package-v7.html

eBIRForms Package v6.4 (New)

The bureau has issued its new eBIRForms Package v6.4 to update eBIRForms Package v6.3.

After downloading the new eBIRForms Package, I'm expecting of the updates of the new rates of Professional Fees under BIR 1601E (EXPANDED) and 3% Percentage Tax Rate in BIR 2551Q (Quarterly Percentage Tax Return) and others but there's no updates yet of the new package.

May be this update is in preparation of the Filing and Payment of Annual Income Tax Return of the Taxable Year 2017.

To download the eBIRForms Package v6.4, please click or refer the following link:

http://ftp.pregi.net/bir/ebirforms_package_v6.4.zip

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.