Statement of Management's Responsibility for Annual Income Tax Return

The CIR has issued Revenue Regulations (RR) No. 3-2010 to provide the rationale and guidelines for the submission of the Statement of Management Responsibility that shall accompany the financial statements that shall be submitted with the annual income tax return.

The contents and format of Statement of Management's responsibility are as follows:

(A) Since that Annual Income Tax Return is primarily the responsibility of the management of the taxpayer, this shall be accompanied by a statement of management's responsibility.

(B) All taxpayers required to file annual income tax return under the National Internal Revenue Code, as amended, shall be required to submit a statement of management's responsibility, as follows:

"STATEMENT OF MANAGEMENT'S RESPONSIBILITY

FOR ANNUAL INCOME TAX RETURN

The Management of (name of taxpayers) is responsible for all information and representations contained in the Annual Income Tax Return for the year ended (date). Management is likewise responsible for all information and representations contained in the financial statements accompanying the (Annual Income Tax Return or Annual Information Return) covering the same reporting period. Furthermore, the Management is responsible for all information and representations contained in all other tax returns filed for the reporting period, including, but not limited to the value added tax and/or percentage tax returns, withholding tax returns, documentary stamp tax returns, and any and all other tax returns.

In this regards, the Management affirms that the attached audited financial statements for the year ended (date) and the accompanying Annual Income Tax Return are in accordance with the books and records of (name of taxpayer), complete and correct in all material respects. Management likewise affirms that:

(a) the Annual Income Tax Return has been prepared in accordance with the provisions of the National Internal Revenue Code, as amended, and pertinent tax regulations and other issuances of the Department of Finance and the Bureau of Internal Revenue;

(b) any disparity of figures in the submitted reports arising from the preparation of financial statements pursuant to financial accounting standards and the preparation of the income tax return pursuant to tax accounting rules has been reported as reconciling items and maintained in the company's books and records in accordance with the requirements of Revenue Regulations No. 8-2007 and other relevant issuances;

(c) the (name of taxpayer) has filed all applicable tax returns, reports and statements required to be filed under Philippine tax laws for the reporting period, and all taxes and other impositions shown thereon to be due and payable have been paid for the reporting, except those contested in good faith.

Signature: ____________________________

(Name of the Individual Taxpayer/President/Managing Partner

Signature: ____________________________

(Name of the Chief Executive Officer or its equivalent)

Signature: ____________________________

(Name of the Chief Financial Officer or its equivalent)"

(C) Aside from Individual Taxpayers, President and Managing Partner, the Chief Executive Officer and the Chief Financial Officer or any officer performing similar functions regardless of their designation are also required to affix their signatories in the afore-mentioned Statement.

(D) In the case of a foreign corporation with branch office in the Philippines, the above Statement shall be signed by its local manager who is in charge of its operations.

Please refer https://www.bir.gov.ph/images/bir_files/old_files/pdf/49436RR%203-2010.pdf of the full text of RR No. 3-2010.

Guidelines in the Filing of the 2019 Income Tax Returns and Submission of Required Attachments

On March 17, 2020, the CIR has approved the Revenue Memorandum Circular (RMC) No. 25-2020 related to the guidelines in the filing and receiving of the 2019 Income Tax Returns.

Taxpayers who are enrolled in EFPS shall continue to settle the tax liabilities with the Authorized Agent Bank (AAB) where the taxpayer is enrolled, while for those who shall file their AITR through EBIRForm Facility, the following are the payment options:

1. Over-theCounter (OTC) payment through Authorized Agent Banks (AABs);

2. Revenue Collection Officers (RCOs) in areas where there is no AABs;

3. Electronic/Online payment:

a) Landbank of the Philippine's (LBP) Link.Ziz Portal (for taxpayers who have ATM account with LBP and/or for holders of Bancnet ATM/Debit/Prepaid Card and taxpayer utilizing PesoNet facility (depositor of RCBC & Robinsons Bank), refer to Annex "A"

b) Development of the Philippines' (DBP) Pay Tax Online (for holders of Visa/Mastercard Credit Card and/or Bancnet ATM/Debit Card), refer to Annex "B"

c) Union Bank Online Web and Mobile Payment Facility (for taxpayer who has an account with Union Bank of the Philippines), refer to Annex "C"

d) Mobile Payment (GCash/Paymaya), refer to Annex "D"

The filing of tax returns manually can still be done by those who are not mandated to file and pay electronically, if the AITRto be filed has tax due and payable. If there is no tax to be paid, the same are required to be filed through eBIRForm facilities.

Considering the limitations in the preparation of the AITR to be filed by concerned taxpayers due to the aforesaid lock-down, errors in the determination of their income taxes are possible. Hence, taxpayers, at any time, can amend their AITR filed, provided the concerned taxable period has not been the subject yet of an audit. An amendment that will result to additional income tax to be paid, can still be paid without the imposition of corresponding penalties if the same shall be done not later than June 15, 2020. Moreover, required attachments to the electronically filed AITR can be submitted to the Revenue District Office where the taxpayers is registered until June 15, 2020.

Please refer: https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMCs/2020%20RMCs/RMC%20No.%2025-2020_copy.pdf of the full text of RMC No. 25-2020.

Manner of Accepting Payment of Internal Revenue Taxes until June 14, 2020

The CIR has approved Revenue Memorandum Circular (RMC) No. 48-2020 dated May 22, 2020 related to the Manner of Accepting Payment of Internal Revenue Taxes until June 14, 2020.

It is stated in the Circular that will extend until June 14, 2020 the leniency in filing of returns and payment of taxes due as provided under RMC No. 43-2020 and to include payment of payment of Amnesty Tax. Hence, until June 14, 2020, concerned taxpayers may:

1. File the tax return and pay the internal revenue taxes at the nearest Authorized Agent Banks (AABs), notwithstanding RDO jurisdiction;

2. File the tax return and pay the corresponding tax due thereon to the concerned Revenue Collection Officers (RDOs) of the nearest Revenue District Office (RD), even in areas where there are AABs.

The Circular also mentioned, provided that payment of internal revenue taxes in cash should not exceed Twenty Thousand Pesos (P20,000.00), while those for check payment will have no limitation if the same is made with RDO in the district office until June 14, 2020. Provided further that all checks shall be made payable to Bureau of Internal Revenue (with or without "IFO Name and TIN of the taxpayer" written on the check as previously required) and that the name and branch of the receiving AAB may no longer be indicated therein.

Please refer: https://www.bir.gov.ph/images/bir_files/internal_communications_1/Advisory/posted%20while%20under%20quarantine%20march%202020/RMC%20No.%2048-2020.pdf RMC No. 48-2020 of the full text of RMC No. 48-2020.

Meaning of "Business Style" Being Required in the Official Receipts and Invoices

On May 21, 2019, the bureau published Revenue Memorandum Circular (RMC) No. 55-2019 that clarifies the meaning of "Business Style" Being Required in the Official Receipts and Invoices which is required to be indicated on the official receipts and invoices pursuant to Section 113(B) of the National International Revenue Code (NIRC), as amended; Section II(J) of Revenue Memorandum (RMO) No. 12-2013; Section 5 of Revenue Regulations (RR) No. 10-2015, as amended by RR No. 16-2018; and RMC No. 64-2015.

In the RMC, it is stated that the phrase "Business Style" refers to the business name registered with the concerned regulatory body used by the taxpayer other than its registered name or company name. For examples:

1) A corporation is registered under the corporate name of XYZ Entertainment Corporation. Based on its Certificate of Registration issued by Securities and Exchange Commission (SEC), the Corporation is operating under the business name of "Bozo the Clown." In this case, the business style is the business name which is "Bozo the Clown."

2) A single proprietor named Juanita M. Ricafrente registered a business name with the Department of Trade and Industry (DTI). Reflected in her DTI Certificate of Registration is the business name of "JMR Trading." Hence, the business style is 'JMR Trading."

Please refer: https://www.bir.gov.ph/images/bir_files/internal_communications_2/RMC%20No%2055-2019.pdf RMC No. 55-2019. 

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.