Deferment of Implementation on eFiling of Withholding Tax BIR Form No. 1600, 1601-C, 1601-E, 1601-F, 1602, 1603 and 1606 to Prioritize the Electronic filing of the Annual Income Tax Return

Revenue Memorandum Circular No. 15-2015 was issued by the BIR to informed the public for the Deferment of Implementation on eFiling of Identified Withholding Tax Forms to prioritize the electronic filing of the annual Income Tax Return due on April 15, 2015.

The electronic filing of the forms listed below shall be temporarily deferred in so far as those due on or before April 15, 2015:

1. BIR Form No. 1600 - Monthly Remittance Return of Value-Added Tax and Other Percentage Taxes Withheld

2. BIR form No. 1601-C - Monthly Remittance Return of Income Taxes Withheld on Compensation

3. BIR Form No. 1601-E - Monthly Remittance Return of Creditable Income Taxes Withheld (Expanded)

4. BIR Form No. 1601-F - Monthly Remittance Return of Final Income Taxes Withheld

5. BIR Form No. 1602 - Monthly Remittance Return of Final Income Taxes Withheld on Interest Paid on Deposits and Yield on Deposits Substitutes?Trusts/Etc.

6. BIR Form No. 1603 - Quarterly Remittance Return of Final Income Taxes Withheld on Fringe Benefits Paid to Employees Other than Rank and file

7. BIR Form No. 1606 - Withholding Tax Remittance Return for Onerous Transfer of Real Property Other than Capital Asset (Including Taxable and Exempt)

The mentioned returns may be filed manually, on or before its due date as previously specified, thru the use of the regular printed forms or the offline eBIRForms, and tax payments made to the concerned Authorized Agent banks (AABs). But, for no payment returns the same may be filed in the concerned RDOs provided the receipt of the returns shall be acknowledged thru the Mobile Revenue Collection Officers System (MRCOS).

The returns filed manually shall be re-filed electronically after April 15, 2015 but not beyond April 30, 2015.

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMC%20No%2015-2015.pdf of the full text of RMC No. 15-2015

Steps In Filing Income Tax Return For TY 2014 Using the Online eBIRForms System With No Payment or With Payment

The Bureau of Internal Revenue just issued Revenue Memorandum Circular No. 14-2015 to provide guidelines in the filing, receiving and processing, using the ELECTRONIC PLATFORM OF BIR for 2014 ITRs (BIR Form Nos. 1700, 1701, 1702-RT, 1702-EX and 1702-MX) version under Revenue Regulations No. 2-2014, as well as define policies for the filing of ITRs which are due on or before April 15, 2015. 

This circular does not cover taxpayers who are not mandated to use eFPS/eBIRForms as stated in RMC 12-2015 such as the Senior Citizen (SC) or Persons with Disabilities (PWD) filing for their own return; employees deriving purely compensation income and the income tax of which has been withheld correctly showing tax due is equal to the tax withheld whether single or multiple employers (with two or more employers concurrently and successively at anytime during the taxable year and employees qualified for substituted filing under RR 2-98 Sec. 2.83.4, as amended, but opted to file for an Income Tax Return (ITR) and are filing for purposes of promotion (PNP/AFP), loans, scholarship, foreign travel requirements, etc. but they are encouraged to use offline eBIRforms for ease and conveniece in the preparation, validation computation rules and efficiently check for completeness and correctness of taxpayer input. 

This circular does not also cover those who have not opted to file electronically, and thus, the existing procedures on manual filing shall apply.

The following are the steps in filing Income Tax Return for Taxable Year 2014 using the Online eBIRForm System (Annex C)  with No Payment or with Payment: (RMC No. 14-2015)

1. Download and install the Offline eBIRForms Package v4.7.07 http://ftp.pregi.net/bir/ebirforms_package_v4.7.07_ITRv2013.zip (Go to www.bir.gov.ph, then click eServices and click eBIRForms under Offline eBIRForm Package).

2. Accomplish ITR

3. Validate ITR

4. Select "Final Copy"

5. Select "Submit" (Click No if not submit to eFPS)

6. System automatically sends email to *.bir.gov.ph and taxpayer receives email notification. (make sure that have you an email account)

7. Print email notification

8. Print ITR, Attach email notification and Pay manually

9. Submit to RDO where registered the following: 1. Printed ITR 2. Email Notofication 3. Required attachments (within 15 days after e-Filing)

10. END

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_1/rmc_no_14-2015.pdf and http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMC%20No%2012-2015.pdf of the full text of RMC No. 14-2015 and RMC No. 12-2015.

Secrets of Tax Minimization: How To Reduce Tax Legally and Ethically

Tax Avoidance or Tax Minimization is the available to cover escaped accomplished by legal procedure which may be contrary to the intent of the tax law's sponsors but nevertheless do not violate the law.

The following are suggestions on how to reduce tax legally and ethically:

1. Effective Tax Management - To maximize Tax Benefits we have to do the following:

a. To optimize Tax Deductions, 

b. To minimize Taxable Income

c. To avail all Tax Incentives

d. To avail Tax Remedies under code

e. To comply all the requirements of the Bureau of Internal Revenue

2. Master the National Internal Revenue Code (NIRC) and be updated with regards to Revenue Regulations, Circulars and Orders.

a. Know the tax rules

b. Know how the rules

c. Maintain a high level of tax compliance

d. Know you rights and remedies

e. Know the rules and process the assessment

f. Know best practices of handling assessment

g. Study and define your strategy

h. Consider favorable settlement such as amnesty, abatement and compromise settlement

3. Make A Tax Planning and Strategies in Your Business

4. Make an Investment On Passive Income (Interest Income From Banks, Inter-Corporate Dividends Other Income Subject To Final Tax and Others)

5. Attend Seminars for Continuing Professional Education (CPE)

6. Ask help to Tax Consultant.

Manny Pacquiao Ranks No. 1 of the Top Individual Taxpayers for Taxable Year 2013 Based on Regular Income Taxes Paid to the Government of the Philippines

Did you know that Emmanuel "Manny" D. Pacquiao Ranks No. 1 among of the Top 500 Individual Taxpayers for Taxable Year 2013 with Regular Income Taxes paid to the Government of the Philippines.?

The Bureau of Internal Revenue just announced the Top Individual Taxpayers for Taxable Year 2013 based on Regular Income Taxes paid to the Government of the Philippines as of November 24 2014.

Emmanuel "Manny" D. Pacquiao paid Regular Income Taxes of  Php168,841,863 to the Government of the Philippines.

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_1/Advisory/TOP_500_Individual_arranged%20by%20rank_copy.pdf of the complete list of the Top Individual Taxpayers for Taxable Year 2013.

Interest Income from Long-Term Deposit or Investment Is Exempted From Income Tax With Certain Conditions

Revenue Memorandum Circular No. 7-2015 was issued by the Bureau of Internal Revenue to state again the Tax Treatment of Interest Income Derived from Long-Term Deposits or Investments Certificates as Described in Revenue Regulations No. 14-2012 and Clarified in Revenue Memorandum Circular Nos. 77-2012 and 81-2012.

In order for the interest income from long-term deposit or investment in the form of savings, common or individual trust funds, deposit substitutes, investment management accounts and other investments evidenced by certificates in such form prescribed by the Bangko Sentral ng Pilipinas (BSP) to be exempted from income tax, the following characteristics/conditions must be present:

1. The depositor or investor is an individual citizen (resident or non-resident) or resident alien or non-resident alien engaged in trade or business in the Philippines;

2. The long-term deposits or investment must be in the form of savings, common or individual trust funds, deposit substitutes, investment management accounts and other investments evidences by certificates in such form prescribed by the Bangko Sentral ng Pilipinas (BSP);

3. The long-term deposits or investments must be in the form of savings, common or individual trust funds, deposit substitutes, investment management accounts and other investments evidenced by certificates in such form prescribed by the Bangko Sentral ng Pilipinas (BSP);

4.The long-term deposits or investments must be issued by banks only and not by other entities or individuals;

5. The long-term deposits or investments must have a maturity period of not less than five (5) years;

6. The long-term deposits or investment must be in denominations of Ten Thousand Pesos (P10,000) and other denominations as may be prescribed by the BSP;

7. The long-term deposit or investment should not be terminated by the original investor before the fifth (5th) year, otherwise they shall be subjected to the graduated rates of 5%, 12% or 20% on interest income earnings; and

8. Except those specifically exempted by law or regulations, any other income such as gains from trading, foreign exchange gain shall not be covered by income tax exemption.

Provided, that for interest income derived by individuals investing in common or individuals trust finds or investment management accounts to be exempted from income tax, the following additional characteristics/conditions must ALL be present:

1. The investment of the individual investor in the common or individual trust fund or investment management account must be actually held/management by the bank for the named individual at leat five (5) years without interruption. The term "bank" referred to herein are banks duly licensed as such by the Bangko Sentral ng Pilipinas;

2. The underlying investments of the common or individual trust account or investment management accounts must comply with the requirements of Section 22(FF) of the NIRC of 1997, as amended, as well as the requirements mentioned above;

3. The common or individual trust account or investment management account must hold on to such underlying investment in continuous and uninterrupted period for at least five (5) years.

In case of pre-termination, transfer or negotiation of said long-term deposit or investment by the depositor or investor before the fifth (5th) year, the interest income shall be subjected to the following graduated rates of Final Withholding Tax(FWT) on the entire income and shall be deducted and withheld by the depository bank from the proceeds of the long-term deposit or investment certificate based on the remaining maturity thereof as follows:

Four (4) years to less than five (5) years - 5%;

Three (3) years to less than for (4) years - 12%; and

Less than three (3) years - 20%.

For nonresident alien not engaged in trade or business in the Philippines, interest income received from long-term deposit or investment shall be subject to a Final Withholding Tax (FWT) at the rate of twenty five percent (25%) pursuant to Section 25 (B) of the NIRC of 1997, as amended.

For nonresident foreign corporation, interest income received from long-term deposit or investment shall be subject to a Final Withholding Tax (FWT) at the rate of thirty percent (30%) pursuant to Section 28 (B) (1) of the NIRC of 1997, as amended. However, interest income from long-term deposit or investment shall be subject to regular income at the rate of thirty percent (30%) if received by a domestic corporation and resident foreign corporation pursuant to Sections 27 (A) and 28 (A) (1) of the NIRC of 1997, as amended.

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_2/RMC%20No%207-2015.pdf to see the illustrations and the full text of RMC No. 7-2015.

Imposition of Penalties for Failure to File Returns Under the Electronic Systems of the BIR by Taxpayers Mandatorily Covered by eFPS or eBIRForms

The BIR has issued Revenue Regulations No. 5-2015 to amend Section 3 paragraph 2 of RR No. 6-2014 as follows:

2. Non-eFPS filers, covered by Section 4 herein, shall mandatorily use the eBIR Forms facility in electronically submitting and filing all their tax returns.

All taxpayers, under existing , who are mandatorily covered to file their returns using eFPS or eBIRForms, who fail to do so, shall be imposed a penalty of One Thousand Pesos (P1,000) per return to Section 250 of the NIRC of 1997, as amended.

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202015/RR%205-2015/RR%205-2015.pdf of the full text of Revenue Regulations No. 5-2015.

Republic Act No. 10653: Increase of the Total Amount of Exclusion to P82,000.00 for 13th Month Pay and Other Benefits from Gross Income under RR No. 3-2015

Recently, the Bureau of Internal Revenue finally issued the Revenue Regulations No. 3-2015 implementing the Provisions of Republic Act No. 10653. "An act Adjusting the 13th Month Pay and Other Benefits Ceiling Excluded from the Computation of Gross Income for Purposes of Income Taxation.

Amending the provision on Revenue Regulations No. 2-98 - The amount of Thirty Thousand Pesos (P30,000.00), specifically referring to the total amount of 13th month pay and other benefits as one of the exclusions from gross compensation income received by an employee prescribed under the pertinent provisions, including the example computations of revenue Regulations (RR) No. 2-98, as amended, is hereby increased to "Eighty Two Thousand Pesos (P82,000.00)", pursuant to the provisions of RA No. 10653.

The amount of P82,000.00 shall ONLY apply to the 13th month pay and other benefits prescribed under the provisions of section 2.78.1.(B)(11) of RR No. employee under an employer-employee relationship, such as basic salary and other allowances. It must be emphasized that this exclusion from gross income is not applicable to self-employed individuals and income generated from business.

The amount of P82,000.00 shall apply to the 13th month pay and other benefits paid or accrued beginning January 1, 2015.

Please refer http://www.bir.gov.ph/images/bir_files/internal_communications_1/Full%20Text%20RR%202015/RR%20No%20%203-2015.pdf of the full text of Revenue Regulations No. 3-2015.

Checklist and Notice on the Submission of Audited Financial Statements (AFS) at SEC during 2015

Have you read yet about the notice issued by Securities and Exchange Commission (SEC) about the checklist and notice on the submission of Audited Financial Statements (AFS) this year 2015?

It was stated in the notice that no pre-screening shall be done on the General Information Sheet (GIS) and Audited Financial Statements (AFS) submitted at the Central Receiving UNIT (CRU), ERMD.

But, the form and contents of reports shall be subject to review by the Commission which may impose fines and/or penalties for verified violation of existing laws, SEC rules and regulations.

All filers should ensure that the reports submitted is complete.

Checklist for Components of Financial Statements For Stock Corporations:

1. Four (4) copies including Original set

2. Cover Sheet

3. Original BIR / bank stamp "RECEIVED" on: Auditor's Report, Balance Sheet/Statement of Financial Position and Income Statement.

4. BOA registration number of external auditor with expiration date.

5. Statement of Management's Responsibility (SMR) over the Financial Statements signed by ALL of the of the ff: President/Chief Executive Office, Chairman of the Board, Treasurer/Chief Finance Officer and Officer/s holding positions equivalent to the aforementioned as may be authorized in the By-Laws

6. Auditor's Report originally signed

7. Balance Sheet/Statement of Financial Position

8. Income Statement

9. Cash Flow Statement

10. Statement of Changes in Equity

11. Notes to Financial Statements

12. Supplemental written statement of External Auditor on the number of stockholders

13. Soft copy of General Form for Financial Statements (GFFS) or Special Form for Financial Statements (SFFS)

Please refer http://www.sec.gov.ph/docs_home/NOTICE-Checklist.pdf of the full text of the checklist and notice. 

SEC Disclaimer With regards to EMGOLDEX Philippines

The Securities and Exchange Commission (SEC) issued a disclaimer that the Commission has received information about the proliferation of bogus SEC public advisories concerning EMGOLDEX Philippines that bear the SEC logo or appear to have been issued by the Commission or signed by any of its officials.

With this, the public is warned that all other purported public advisories regarding EMGOLDEX that allegedly carry the name of SEC or any of its officials are unauthorized, fictitious and  fabricated, especially if these are not found or posted in sec.gov.ph.

The Commission reiterates its official Advisory, that per existing records, EMGOLDEX Philippines is not a registered corporation or partnership in the Philippines and not also licensed or authorized to solicit investments from the public in the Philippines. Without prior license or permit from SEC is strictly prohibited by law and may be penalized by imprisonment and/or fine whether the investment offering is made through the internet or in a commercial or public place.

Please refer http://www.sec.gov.ph/docs_home/SEC_DISCLAIMER(EMGOLDEX%20PHILIPPINES).pdf of the full text SEC disclaimer (EMGOLDEX PHILIPPINES)

SEC Warned the Public Concerning the Investment Taking Activities by ONE LIGHTNING CORPORATION and Its Related Affiliates

The Securities and Exchange Commission (SEC) recently issued an advisory to the warned the public concerning the investment taking activities being undertaken by ONE LIGHTING CORPORATION and its related affiliates. ONE LIGHTING CORPORATION has not been issued by the Commission a secondary license to publicly offer or sell securities and not to solicit investment from the public.

It is stated in the advisory that as part of its modus operandi, the said Company  invites people to invest in its cosmetics and healthcare products by promising huge returns on their investment through what it claims is a revolutionary compensation plan that the Company provides to its distributors which consists of sharing 70% of the Company's profits to investors.

Please refer http://www.sec.gov.ph/docs_home/2015Advisory_One_Lightning_Corp.pdf of the full text of the SEC Advisory.