This is a publication about developments in Philippine taxation. The contents usually include latest Republic Acts, Bureau of Internal Revenue issuances, Customs regulations, Court decisions, BSP circulars, SEC circulars, Department of Justice opinions and Executive Orders relevant to Tax practice.
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PAS 36 and PFRS 16: Assessing retail stores for impairment after the adoption of PFRS 16
How should leased retail stores be tested for impairment after the adoption of PFRS 16?
A lessee applies PAS 36 to determine whether the right-of-use (ROU) asset is impaired and to account for any impairment loss identified. At the end of each reporting period, the entity assesses whether there is any indication that the asset might be impaired. If any such indication exists, the entity estimates the asset’s recoverable amount.
If the recoverable amount for the individual asset cannot be estimated, the recoverable amount of the cash-generating unit (CGU) to which the asset belongs is determined. This means that the recoverable amount is estimated for the smallest group of assets that generate cash inflows that are largely independent of those from other assets or groups of assets. This principle should be applied when assessing the ROU asset for each lease. Generally, we would expect for retailers that each store will be a separate CGU.
In most cases, each leased retail store will comprise a ROU asset, as well as property, plant and equipment which has been added to the leased retail store, such as a building shell or leasehold improvements. It is unlikely that any one of these assets could generate cash inflows independently from the others. Therefore, the combined store assets should be assessed for impairment as one CGU, along with an allocation of assets (such as corporate assets) that are indirectly attributable, on a reasonable and consistent basis (where such an allocation can be made), to the CGU).
The assets (and liabilities, where appropriate) attributed to each CGU should be consistent with the estimated future cash flows that are identified for calculating the recoverable amount. In determining the store’s recoverable amount using a value in use (ViU) model, all future cash inflows and outflows associated with the store are included, as well as a reasonable and consistent allocation (where such an allocation can be made) of central overheads.
- Generally, ROU assets and related lease liabilities will be considered in a PAS 36 ViU model. The CGU assets tested against ViU include the ROU assets and exclude the lease liabilities. The expected cash flow model will:
- include the right of use asset in the carrying amount of the CGU;
- exclude the lease liability from the carrying amount of the CGU because it relates to financing;
- exclude the lease payments included in the lease liability in the ViU calculation;
- use a pre-tax discount rate (typically estimated with reference to a post-tax weighted average cost of capital (WACC) discount rate) that should reflect a market assessment of capital structure rather than the entity’s own structure;
- include cash outflows to replace leased assets at the end of the lease term which are essential to the ongoing operation of the CGU (that is, the RoU asset being tested for impairment only reflects the existing lease, so the most practical way to incorporate replacement is via a future capital expenditure cash outflow); and
- include cash outflows for expected future variable rents and short-term and low value leases that are not included in the lease liability.
Projected future cash flows are discounted at a pre-tax rate that reflects both current market assessments of the time value of money and the risks specific to the asset/CGU for which the future cash flow estimates have not been adjusted. The WACC should reflect a market assessment of an adequate capital structure, represented by the respective peer group companies, not the entity’s own capital structure. Lease liabilities would be expected to be considered as an additional debt-like element of the capital structure, in addition to existing debt and equity.
Because the WACC needs to reflect the peer group’s capital structure, retailers should take care to identify an appropriate peer group. In particular, the peer group should reflect companies which have a similar mix of freehold and leasehold properties in the store portfolio.
If historical lease liabilities under PFRS 16 are not available, it might be necessary to derive an estimate of the historical capital structure (for example, based on PAS 17 operating lease commitment note disclosures) which can then be refined going forward, as capital structure data becomes increasingly available after adoption of PFRS 16.
As outlined above, the ViU model under PFRS 16 accounting is constructed with different data-points compared to a model under PAS 17 accounting. There are a variety of changes such as:
- the inclusion of the ROU asset in the CGU;
- ViU cash outflows decreasing as operating lease cash flows are being excluded unless they relate to variable lease payments;
- ViU cash outflows increasing as replacement lease cash payments would be included where the lease term is shorter than the model life; and
- the discount rate could reduce as more debt elements are introduced.
The overall result on headroom would be impacted by the magnitude of each one of the changing factors. It may therefore be the case that PFRS 16 causes a reduction in headroom if the reduction in ViU-discounted cash flows is lower than the increase in CGU assets being tested.
Accounting implications of coronavirus
At a glance
The emergence and spread of the coronavirus in early 2020 have affected business and economic activity in the Philippines and elsewhere. Entities should consider the accounting implications of these developments.
In our view, the development and spread of the virus subsequent to 31 December 2019 is a non-adjusting event
What is the issue?
Should coronavirus be accounted for as an adjusting or non-adjusting event?
PAS 10 defines an adjusting event as an event that provides evidence of conditions that existed at the reporting date. A non-adjusting event indicates conditions that arose after the reporting date.
The situation at 31 December 2019 was that a limited number of cases of an unknown virus had been reported to the World Health Organisation. There was no explicit evidence of human-to-human transmission at that date. These are the conditions that existed at 31 December. The subsequent spread of the virus and its identification as a new coronavirus does not provide additional evidence about the situation that existed at
31 December 2019, and it is therefore a non-adjusting event.
Management should ensure that the measurement of assets and liabilities reflects only the conditions that existed at the reporting date. Subsequent developments should not be reflected in the measurement of, for example:
- expected credit losses under PFRS 9, ‘Financial instruments’;
- the impairment of tangible and intangible assets under PAS 36, ‘Impairment of non-financial assets’;
- the net realizable value of inventory under PAS 2, ‘Inventories’;
- deferred tax assets in accordance with PAS 12, 'Income taxes'; or
- any asset or liability measured at fair value.
The spread of the coronavirus is a non-adjusting event. However, events after the reporting date sometimes provide additional information about the uncertainties that existed at the reporting date. Judgement might be required in some situations – for example, the bankruptcy of a customer subsequent to the reporting date might reflect existing issues beyond the spread of the coronavirus.
Going concern
PAS 10 states that the financial statements should not be prepared on a going concern basis where events after the reporting date indicate that the going concern assumption is no longer appropriate. This guidance applies even if those events would otherwise be non-adjusting. Entities should therefore consider whether developments subsequent to the reporting date have any implications for the going concern assumption.
Disclosure
Non-adjusting events do not result in adjustment to the financial statements, but they do require disclosure if material. This disclosure should be transparent and specific to the entity, and it should include the nature of the event and an estimate of its financial effect. Entities should consider disclosing the impact of developments after the reporting date on the carrying amount of assets and liabilities (for example, the need to impair assets or remeasure fair values), or the impact on revenue or on borrowing covenants.
Taxes, compliance matters, assessments, and refunds
Alternative remedy
A local business tax assessment protested and paid may be sought for refund
A taxpayer facing a local business tax (LBT) assessment issued by the local treasurer may protest such assessment, and either appeal the assessment in court, or pay the tax and subsequently seek a refund. Therefore, a taxpayer who protested and paid an LBT assessment is not precluded from subsequently filing an action for refund or credit of LBT.
(G.R. No. 233556, promulgated 11 September 2019)
Unnecessary compromise
Validity of BIR denial of an application for compromise settlement
Several months after the taxpayer protested the FLD, the BIR proceeded to collect the deficiency tax assessment. The taxpayer responded by applying for a compromise settlement which the BIR denied.
The denial was appealed by the taxpayer to the CTA. However, before tackling the denial of the compromise settlement, the CTA first reviewed the validity of the tax assessment. After finding that there was no prior Letter of Authority, it declared that the tax assessment was void. Accordingly, the CTA not only annulled, reversed and set aside the denial of the application for compromise settlement, but also cancelled the FLD and Warrant of Distraint and Levy issued by the BIR.
(CTA Case No. 9704, promulgated 29 January 2020)
Final decision
When a Preliminary Collection Letter is considered a final decision
Following its timely protest of the FAN/FLD, the taxpayer received from the Revenue District Office a Preliminary Collection Letter (PCL) expressly requesting the payment of deficiency taxes with a warning that failure to do so would constrain it to enforce collection through the administrative summary remedies provided by law.
According to the CTA, such wording in the PCL clearly reveals the BIR’s rejection of the taxpayer's administrative protest. Apparently, the CTA treated the PCL as a final decision. Therefore, the taxpayer should have appealed the PCL to the Commissioner of Internal Revenue or the CTA within thirty (30) days from receipt thereof.
(CTA EB No. 1902, promulgated 15 January 2020)
Essential elements
When sales of renewable energy developers qualify for the VAT zero-rate
According to the CTA, the essential elements for the grant of VAT zero-rating under Section 15(g) of the Renewable Energy Act of 2008 vis-à-vis the EPIRA Law, its implementing rules and regulations, and RR No. 16-2005 are as follows:
- The seller is a renewable energy developer of renewable energy facilities.
- It sells fuel or power generated from renewable sources of energy such as wind.
- The seller is a "generation company", i.e., a person or entity authorized by the Energy Regulatory Commission (ERC) to operate facilities used in the generation of electricity.
- Such authority is embodied in a Certificate of Compliance issued by the ERC which must be secured before the actual commercial operations of the generation facility.
(CTA Case No. 9516, promulgated 3 January 2020)
Double date
Validity of assessment notice with two different due dates
A FAN must demand the payment of taxes within a specific period. In this relation, the Supreme Court has ruled that a FAN with no due date for payment negates the BIR’s demand for payment, hence, is void.
On the other hand, a FAN which contains two different dates on the “Due Date” portion of the assessment notice leaves the taxpayer in a quandary as to when payment should be made. Similar to having no due date, the CTA held that having two different due dates negates the BIR’s demand for payment. Therefore, the FAN is void.
(CTA Case No. 9296, promulgated 2 January 2020)
No appeal
CTA jurisdiction over redemption of delinquent properties
Regional Trial Court (RTC) decisions, resolutions or orders may be appealed to the CTA if they involve local tax cases such as the following:
- Validity of real property tax (RPT) assessments
- Protest of assessments
- Disputed assessments, surcharges or penalties
- Validity of tax ordinances
- Claims for tax refund or tax credit
- Claims for tax exemption
- Actions to collect the tax due
- Prescription of assessments
Actions to restrain RPT collection may also be treated as local tax cases since, in ruling as to whether or not to restrain collection, the RTC must first rule on the propriety of the assessment.
However, cases involving the redemption of delinquent properties sold due to non-payment of RPT are not classified as "local tax cases". Although a local tax issue may be involved in such cases, there is no indication that the taxpayer seeks nullification of the assessment issued against it. Hence, these cases cannot be appealed to the CTA.
(CTA AC No. 205, promulgated 14 January 2020)
Automatic review
CTA has jurisdiction to rule on issues not raised by the parties
In a tax assessment case, the Supreme Court upheld the jurisdiction of the CTA to rule on the authority of revenue officers to conduct the audit and to recommend the issuance of deficiency tax assessments, despite such issue not being raised by the taxpayer at any point during the CTA proceedings.
Said jurisdiction is based on Section 1, Rule 14 of the Revised Rules of the CTA (related issues necessary to achieve an orderly disposition of the case) and Section 7 of Republic Act No. 1125 (other matters arising under the Tax Code).
(GR Nos. 249883-84, Resolution dated 27 January 2020)
Process of deduction
Expenses deductible for purposes of computing the 5% gross income tax
For purposes of computing the 5% gross income tax, a PEZA-registered manufacturer may deduct the following from its gross income earned:
- Indirect labor expenses related to the welfare retirement fund.
- Labor expenses may be direct or indirect since Section 4, Rule XX of the Implementing Rules and Regulations of Republic Act No. 7916 does not distinguish.
- Photocopying charges of work orders and other forms used for production and planning purposes; and supplies used for quality control procedures of products being manufactured.
These are deductible as "Supplies" under Revenue Regulations No. 11-2005.
(CTA EB No. 1831, promulgated 12 February 2020)
Pay first
Contesting a real property tax assessment based on exemption therefrom
A Provincial Treasurer issued Notices of Delinquency to the National Food Authority (NFA) demanding payment of real property taxes (RPT). The NFA raised the matter to the regional trial court and questioned the authority of the province to impose RPT given NFA is a government instrumentality exempt from RPT.
According to the CTA, the NFA should have first complied with the requirement of payment under protest and the rule of exhaustion of administrative remedies. A claim of RPT exemption does not actually question the assessor's authority to assess and collect such taxes. It questions the reasonableness or correctness of the assessment, which is a question of fact that should be resolved at the very first instance by the Local Board of Assessment Appeals.
(CTA AC Case No. 192, promulgated 3 February 2020)
Tax clearance
Claim for input VAT refund due to closure
A taxpayer applied for the refund of excess and unutilized input VAT on account of the cancellation of VAT registration resulting from its closure of business operations. The CTA denied the claim because the taxpayer was not able to prove that it had no internal revenue tax liabilities. According to the CTA, the taxpayer should have presented a Certificate of Tax Clearance showing that it had settled all its tax obligations.
(CTA Case No. 9536, promulgated 22 January 2020)
Spontaneous review
Resolution of matters of record and public importance that were not raised
The Supreme Court has held that, generally, appeals can only raise questions of law or fact that were raised in the lower court and are within the issued framed by the parties. However, the rule admits of exceptions such as when:
- in the interest of justice, there are matters of record having some bearing on the issue submitted, which the parties failed to raise, or the lower court ignored; or
- there are questions involving matters of public importance.
In this light, the CTA held that the validity of waivers is a matter of both record and public importance; hence, may be resolved by the CTA even if not questioned by the taxpayer.
(CTA Case No. 9000, promulgated 24 February 2020)
Premature decision
Issuance of the FDDA within the period to submit supporting documents
On 9 November 2015, the taxpayer filed its protest to the FAN/FLD requesting reinvestigation of the tax case. Accordingly, the taxpayer had sixty (60) days or until 8 January 2016 to submit relevant supporting documents. However, the Commissioner of Internal Revenue (CIR) issued a Final Decision on Disputed Assessment (FDDA) on 9 December 2015.
According to the CTA, the issuance of an FDDA within the 60-day period given to the taxpayer to submit supporting documents violates the right of the taxpayer to due process; hence, renders the deficiency tax assessments null and void. The CTA cited a case where the Supreme Court ruled that part of the administrative due process requirement is the recognition by the BIR that the taxpayer has the right to present evidence and, thus, should be allowed to submit comments or arguments at each stage of the assessment process.
(CTA Case No. 9246, promulgated 16 January 2020)
Compensatory interest
Legal interest on judgment award is not subject to withholding tax
The Supreme Court rendered a judgment award with legal interest in favor of an individual. The Land Bank of the Philippines paid the judgment award and legal interest but subjected said interest to the final withholding tax (FWT) applicable to interest/yield from bank deposits/deposit substitutes. Subsequently, the individual applied for a refund of the FWT.
There are two types of interest imposed on a judgment award:
- Monetary interest which is compensation fixed by the parties for the use or forbearance of money; and
- Compensatory interest which is imposed by law or by the courts as penalty or indemnity for damages.
The CTA held that legal interest imposed on the judgment award constitutes compensatory interest which is not subject to FWT. Since legal interest imposed by the courts on a judgment award in favor of a party litigant is a form of penalty or indemnity for damages, it is not considered as taxable income. Accordingly, the CTA granted the claim for FWT refund.
(CTA Case No. 9498, promulgated 19 February 2020)
BIR REIT implementation
Amending the implementing regulations of the Real Estate Investment Trust Act
The BIR amended RR No. 13-2011, implementing the Real Estate Investment Trust (REIT) Act of 2009. The amendments include the following:
- The minimum public ownership requirement was decreased from 40% to 1/3 of the outstanding capital stock.
- A Reinvestment Plan was included in the registration requirements and is defined in Section 3(w) of RR No. 13-2011, as amended.
- The DST on the sale or transfer of shares of stocks with par value was adjusted from PH₱0.375 to
PH₱ 0.75 for each PH₱200. - The DST on the sale or transfer of shares of stocks without par value was adjusted from 12.5% to 50% of the DST upon original issuance.
- The DST on the assignment of mortgage or pledge were adjusted from:
- PH₱10 to PH₱20 when the amount secured does not exceed PH₱5,000
- PH₱5 to PH₱10 on each PH₱5,000 in excess of PH₱5,000.
- The requirement to place in escrow 50% of the DST on the sale or transfer of real property was removed.
- The transfer of property to a REIT in exchange for its shares is now exempt from VAT pursuant to Section 109(X) of the Tax Code.
- In order to avail of the DST incentive, the following, among others, should also be submitted:
- For unlisted REITs, an Affidavit of Undertaking that the REIT shall be listed within two years from the date of its initial availment of the incentive
- Two copies of the Reinvestment Plan duly received by the BIR.
- The requirement to place in escrow the income tax pertaining to dividends declared and deducted prior to attaining minimum ownership of 67% was removed.
- From the year of its listing, at the latest and thereafter, the REIT shall maintain its status as a public company and shall comply with its submitted Reinvestment Plan. Otherwise, the dividend payments shall not be allowed as deductions from taxable income.
- In order to qualify for the tax incentives, the REIT must comply with its Reinvestment Plan, as certified by the SEC. The Certification from the SEC that the REIT is compliant with its Reinvestment Plan must be submitted by the REIT as an attachment to its annual ITR and AFS on or before April 15 (or on the 15th day of the fourth month following the close of the fiscal year).
(Revenue Regulations No. 3-2020, published 30 January 2020)
Employee registration
Amending Revenue Regulations No. 11-2018 regarding employee registration
The BIR amended Section 8 of Revenue Regulations (RR) No. 11-2018. RR 11-2018 amended RR No. 2-1998 to implement the provisions of Republic Act No. 10963, otherwise known as the TRAIN law.
The amendments to RR No. 11-2018 include the following:
· All employers shall require their employees to accomplish in triplicate the Application for Registration (BIR Form No. 1902) distributed to the RDO, employer and employee.
· In case of changes in the information in the Application for Registration (BIR Form No. 1902) previously submitted by the employee to its current employer, the employee should furnish his/her employer a copy of BIR Form No. 1905 duly stamped by the RDO where the employee is registered.
(Revenue Regulations No. 1-2020, published 10 January 2020)
State of Calamity
Suspending the deadlines for the filing and payment of tax returns in Batangas
In light of the declaration placing the Province of Batangas under a State of Calamity, the Commissioner of Internal Revenue (CIR) suspended the deadlines, for the month of January, for the filing and payment of tax returns by taxpayers within the jurisdictions of Revenue District Office No. 58 (Batangas City, West Batangas) and No. 59 (Lipa City, East Batangas). Accordingly, penalties for late filing and payments of tax returns will not be imposed until the further advice from the CIR to resume regular operations.
(Revenue Memorandum Circular No. 7-2020, issued 23 January 2020)
Highlander wages
Increase of minimum wages of workers in the Cordillera Administrative Region
The Regional Tripartite Wages and Productivity Board – Cordillera Administrative Region (CAR) issued Wage Order No. RB-CAR-20 increasing the daily minimum wage rates to the following amounts:
Area |
New Daily Minimum Wage Rates For All Sectors and Industries in the CAR |
Baguio City and La Trinidad, Benguet Tabuk City, Kalinga |
PH₱340 (Basic) + PH₱10 (COLA) = PH₱350 |
Other Areas in the Region |
PH₱330 (Basic) + PH₱10 (COLA) = PH₱340 |
The above minimum daily wage rates take effect fifteen (15) days after publication of the subject Wage Order in a local newspaper of general circulation in the CAR.
(Revenue Memorandum Circular No. 5-2020, issued 22 January 2020)
Change in form
Revision of BIR Form Nos. 1702Q
BIR Form No. 1702Q (Quarterly Income Tax Return for Corporations, Partnerships and Other Non-Individual Taxpayers) has been revised in light of the TRAIN law.
The revised manual return is already available in the BIR website. However, it is not yet available in the Electronic Filing and Payment System (eFPS) and Electronic Bureau of Internal Revenue Forms (eBIRForms). Accordingly, eFPS and eBIRForm taxpayers shall continue using the existing versions in the eFPS and eBIRForms Package v7.5, respectively, in filing and remitting taxes due thereon.
(Revenue Memorandum Circular No. 3-2020, issued 3 January 2020)
Petroleum inventory
Requiring all gasoline stations to submit a sworn declaration of inventory
In preparation for the field-testing aspect of the Fuel Marking Program, all gasoline stations in the Philippines are required to submit a sworn declaration of inventory identified per branch as of 31 December 2019 specifying the volume and type of petroleum products, namely, diesel, gasoline and kerosene.
The sworn declaration should be submitted on or before 15 January 2020 to the RDO/Large Taxpayers Division where the principal place of business is registered.
(Revenue Memorandum Circular Nos. 6-2020 and 2-2020, issued 22 & 3 January 2020)
Change of name
Renaming Revenue District No. 4
The Commissioner of Internal Revenue renamed Revenue District Office No. 4 from “Calasiao, West Pangasinan” to “Calasiao, Central Pangasinan”.
(Revenue Administrative Order No. 1-2020, dated 9 January 2020)
Pending applications
Suspending the issuance of Permits to Use CAS/CBA and/or Components thereof
The Commissioner of Internal Revenue suspended the issuance of Permits to Use (PTUs) CAS/CBA and/or Components thereof under RMO No. 21-2000.
Accordingly, all taxpayers with pending applications for said PTUs that were filed with the NAB and assigned to the TWG for evaluation shall be allowed to use such CAS/CBA and/or components thereof in the absence of the required PTU. However, the following must be submitted:
- A duly accomplished and notarized Sworn Statement (see Annex “A” of RMC No. 10-2020) with attachments executed and signed by the taxpayer’s authorized representative;
- Sample print copy of system-generated Principal and Supplementary Receipts/Invoices; and
- Sample print copy of system-generated Books of Accounts.
The following should be noted:
- In the absence of the required PTU, an “Acknowledgement Certificate” shall be prepared and issued by the TWG Secretariat of the concerned RDO/LT Office. This Certificate must be issued within three (3) working days from the receipt of the abovementioned requirements with a Control Number, which shall be indicated or reflected on the face of the principal and/or supplementary receipts/invoices to be generated from the systems in order to authorize the use of such receipts/invoices.
- In case the taxpayer opted to maintain Loose-leaf Books of Accounts, the application therefor shall be continuously processed by the RDO having jurisdiction.
- All CAS, CBA, and/or Components thereof used without the required PTU shall be subject to post-evaluation to check compliance with existing revenue issuances. Such evaluation may be done simultaneous with the audit of the books of accounts and other accounting records of the taxpayer pursuant to a Letter of Authority.
- All pending applications for PTU CAS/CBA, and/or Components thereof that have undergone system demonstration are covered under RMC No. 10-2020.
- In case of any system enhancement/modification and/or upgrade of CAS/CBA and/or Components thereof and if such will result in the change of version number and/or systems release, the taxpayer shall inform in writing the TWG Secretariat of the concerned RDO/LT Office.
(Revenue Memorandum Circular No. 10-2020, issued 6 February 2020)
Amended Q&As
Clarifying certain issues regarding the tax amnesty on delinquencies
The Commissioner of Internal Revenue (CIR) amended the following provisions of RR No. 14-2019, which implements the amnesty on tax delinquencies under Republic Act No. 11213:
- Q22 / A22
Q22: Will the tax liabilities covered by the FAN/FLD or FDDA, which was timely protested or disputed, but such protest to the FAN/FLD or appeal to the FDDA, as the case may be, was withdrawn on or before 23 April 2020 be considered delinquent account qualified for tax amnesty?
A22: Yes, if the protest or appeal was withdrawn at any time on or before 23 April 2020, and thus, the tax liabilities reverted back to being delinquent on or before 24 April 2019 (refer to next Q&A), provided that the delinquent account pertains to taxable year 2017 and prior years.
- Q23 / A23
Q23: In relation to Q22, what is the effect of the withdrawal of protest/appeal to the FAN/FLD/FDDA?
A23: Upon the withdrawal of the protest or appeal to the FAN/FLD or FDDA, respectively, the effect is that as if no protest or appeal was filed, and therefore, the assessment contained therein became final and executory, thereby delinquent, upon the lapse of the thirty (30)-day period, reckoned from receipt of such FAN/FLD or FDDA, within which to file a protest or appeal, as the case may be. In such case, the FAN/FLD or FDDA, whose protest or appeals was subsequently withdrawn, should have been received at the latest, on 25 March 2019, to be considered delinquent on or before 24 April 2019.
- Q29 / A29
Q29: Can a taxpayer be considered lo have fully complied with the requirements of RR No. 1-2019 if the tax amnesty amount was paid on the last day of the one-year availment period but failed to file the TAR on the same date?
A29: No. Section 5(C) of RR No. 1-2019 provides that availment of tax amnesty on delinquencies shall be considered fully complied with upon the completion of the enumerated steps, which includes the filing/submission of the TAR with complete documentary requirements to the concerned office within the one-year availment period. However, to give every opportunity to delinquent taxpayers who have secured the Certificate of Tax Delinquencies/Tax Liabilities and endorsement of the Acceptance Payment Form but have paid the amnesty tax due on 23 April 2020, the last day of the availment period, an extended period of 30 days shall be given for the submission of the complete documentary requirements
. - Q40 / A40 (new provision)
Q40: What are the instances wherein the protest lo the FAN/FLD or appeal to the FDDA will be considered invalid, making the assessment final and executory and therefore delinquent?
A40: The following instances are considered invalid making the assessment final and executory:
- The protest to FAN/FLD was filed beyond 30 days from receipt of the FAN/FLD;
- The appeal to FDDA was filed beyond 30 days from receipt of the FDDA;
- The protest to FAN/FLD was not filed with the duly authorized representative of the CIR who signed the FAN/FLD;
- The appeal of the FDDA was not filed with the Office of the CIR;
- The protest/appeal failed to state the applicable law, rules and regulations or jurisprudence on which it is based; and
- The request for reinvestigation did not specify the newly discovered or additional evidence which the taxpayer intends to present as required in a valid protest.
An invalid protest or appeal does not toll the running of the 30-day prescriptive period to file such protest or appeal. Accordingly, the assessment becomes executory upon the lapse of such 30-day prescriptive period, reckoned from receipt of the FAN/FLD or FDDA.
(Revenue Memorandum Circular No. 11-2020, issued 6 February 2020)
Cooperative effort
Audit policies and guidelines for the audit of cooperatives
The Tax Code authorizes the Commissioner of Internal Revenue (CIR) to conduct a tax audit and assess taxes notwithstanding any law requiring the prior authorization of any government agency or instrumentality. Hence, according to the CIR, prior authorization from the Cooperative Development Authority is no longer required before the BIR may conduct a tax audit of a cooperative.
In this light, the CIR issued audit policies and guidelines that shall cover the issuance of electronic Letters of Authority for the audit of cooperatives for taxable year 2018 and onwards. Among others, the guidelines provide that cooperatives which transacts business with members and non-members whose accumulated reserves and undivided net savings are more the PHP10m shall be prioritized for tax audit.
(Revenue Memorandum Order No. 7-2020, issued 18 February 2020)
Code change
Omitting pawnshops from Alphanumeric Tax Code (ATC) VB102
The BIR has modified ATC VB102 as follows:
Existing (per ATC Handbook) |
Modified / New |
BIR Form No. |
|
ATC |
Description |
Description |
|
VB102 |
Lending Investors / Dealer in Securities / Pawnshops / Pre-Need Co |
Lending Investors / Dealer in Securities / Pre-Need Co |
2550M/ 2550Q |
(Revenue Memorandum Order No. 6-2020, issued 6 February 2020)
Change in forms
Availability of revised BIR Form Nos. 1600-VT 1600-PT and 2552
The following forms have been revised:
- BIR Form No. 1600-VT (Monthly Remittance Return of VAT Withheld);
- BIR Form No. 1600-PT (Monthly Remittance Return of Other Percentage Taxes Withheld)
- BIR Form No. 2552 (Percentage Tax Return For Transactions Involving Shares of Stock Listed and Traded Through the Local Stock Exchange or Through Initial and/or Secondary Public Offering)
The revised manual returns are already available in the BIR website. However, they are not yet available in the Electronic Filing and Payment System (eFPS) and Electronic Bureau of Internal Revenue Forms (eBIRForms). Accordingly, eFPS and eBIRForm taxpayers shall continue using the existing versions in the eFPS and eBIRForms Package v7.5, respectively, in filing and remitting taxes due thereon.
(Revenue Memorandum Circular Nos. 13 and 12-2020, issued 7 February 2020)
Volcanic effect
Suspension of tax filing and payment deadlines in Batangas
In light of the declared State of Calamity in Batangas Province, the Commissioner of Internal Revenue (CIR) suspended the deadlines for the filing and payment of tax returns covering the month of January. Accordingly, AABs are advised to accept tax payments from taxpayers under the jurisdiction of RDO Nos. 58 and 59 without imposing penalties until an advisory is issued by the CIR to resume regular operations.
(Bank Bulletin No. 1-2020, dated 14 January 2020)
Golden rules
Implementing rules and regulations for Republic Act No. 11256
The Secretary of Finance promulgated the implementing rules and regulations (IRR) for Republic Act No. 11256, otherwise known as “An Act to Strengthen the Country’s Gross International Reserves.” The IRR provides for the following:
- Definition of “Accredited Traders”, “Registered Small-Scale Miners” (SSMs) and “Small-Scale Mining Contract”
- Income tax and excise tax exemption of sale of gold by registered SSMs and accredited traders to the BSP, and by registered SSMs to accredited traders for eventual sale to the BSP
- Requirement for SSMs and accredited traders to obtain Tax Identification Numbers
- BSP Certification as basis for tax exemptions and non-withholding/collection of taxes
- Issuance of Acknowledgment of Gold Delivery and Sale by registered SSMs to accredited traders with respect to the eventual sale of gold to the BSP
- Monthly report containing the details of sales transactions to be submitted by the BSP to the BIR
- SSMs and traders have one year (which may be extended for up to a maximum of three years) from the effectivity of the IRR to comply with the registration and accreditation requirements
- Issuance of temporary certifications to SSMs and traders
(Revenue Regulations No. 4-2020, published 20 February 2020)
BSP exemptions
Clarifying the taxability of the Bangko Sentral ng Pilipinas (BSP)
The Commissioner of Internal Revenue clarified the taxation of BSP income in light of its tax exemption under RA No. 11211.
Income derived by the BSP from the exercise of its governmental functions as provided under RR No.
2-2020 are exempt from all national taxes. All other income shall be considered proprietary income subject to all national taxes.
The BSP is exempt from income tax with respect to the following income that are considered as derived from the exercise of governmental functions:
- Interest income;
- Income derived from sale of BSP-owned and -acquired properties;
- Fees and commissions;
- Penalties;
- Miscellaneous income;
- Gain on fluctuation, trading gains, and premium received/(paid) on call/put options; and
- All other income derived by BSP relative to its governmental functions.
However, the BSP is subject to income tax on the following which are considered as derived from the exercise of proprietary functions:
- Income from sale of Printed Securities, and BSP forms;
- Sale of scrap items;
- Parking fees collected for use of parking areas by BSP tenants;
- Income from sale of commemorative medals, demonetized commemorative notes and coins, and demonetized notes and coins;
- Sale of corporate gifts and other souvenir items, excluding printed publications;
- Rental income arising from the rental of vault space by Presidential Commission on Good Governance;
- Rental collected/earned for the use of BSP-owned and -acquired properties and facilities therein;
- Realized profits from assets sold other than income derived from sale of BSP-owned and -acquired properties;
- Income from sale of shredded records, and car stickers, security pass and other identification paraphernalia issued;
- Income from sale thru bidding/auction of scrap and waste materials;
- Net gain from sale thru bidding/auction of unserviceable furniture and equipment; and
- Other similar income derived by the BSP not categorically defined under RMC No. 14-2020.
With respect to value-added tax, as provided under RMC No. 65-2008, the BSP is exempt from business taxes on revenues and receipts derived from the exercise of essential governmental functions.
Pursuant to Section 199(L) of the Tax Code, all contracts, deeds, documents and transactions related to the conduct of business entered into by the BSP which require payment of DST shall be exempt therefrom.
The tax exemptions granted under RA No. 11211 took effect on 6 March 2019.
(Revenue Memorandum Circular No. 14-2020, issued 24 February 2020)
New eBIRForms
Release of Offline eBIRForms Package Version 7.6
The new Offline eBIRForms Package Version 7.6 is already available for download from www.bir.gov.ph and www.knowyourtaxes.ph. It includes the January 2018 (ENCS) version of BIR Form Nos. 1700v2018; and 1702MXv2018.
Field validation and automated computation on BIR Form No. 1701 is already implemented in this new Offline eBIRForms Package.
(Revenue Memorandum Circular No. 16-2020, issued 27 February 2020)
RDO changes
Redefining the jurisdictions of and renaming Revenue District Offices (RDOs)
Effective 1 January 2020, the jurisdiction over the Municipalities of Balingasag and Claveria are transferred from RDO No. 98 – Cagayan de Oro City to RDO No. 97 – Gingoog City.
Further, RDO No. 4 – Calasiao, West Pangasinan has been renamed as RDO No. 4 – Calasiao, Central Pangasinan.
(Revenue Administrative Order Nos. 2 and 1-2020, dated 2 March 2020 and 9 January 2020)
COVID-19 related articles
Tax calendar
Extended due dates for tax returns, their attachments and other filings with the BIR
In light of the Enhanced Community Quarantine (ECQ) until 15 May 2020, the Commissioner extended the due dates for filing/payment or submission of the following:
BIR Form / Return |
Original deadline |
Extended deadline |
|
|
VAT refund (for quarter ending 31 March 2018) |
31 March |
30 May or 30 days from date of lifting of the quarantine, whichever comes later |
|
|
VAT refund (for quarter ending 30 April 2018) |
30 April |
14 June or 30 days from date of lifting of the quarantine, whichever comes later |
|
|
VAT refund (for quarter ending May 2018) |
31 May |
30 June or 30 days from date of lifting of the quarantine, whichever comes later |
|
|
ONETT (1606, 1706, 1707, 1800 and 1801) |
Deadline falls within emergency period starting 16 March |
30 days from date of lifting of the quarantine |
|
|
eFiling/Filing & ePayment/Payment of 1600WP (for Feb) |
20 March |
19 May |
|
|
eFiling/Filing & ePayment/Payment of 1600WP (for March) |
20 April |
4 June |
|
|
eFiling/Filing & ePayment/Payment of 1600WP (for April) |
20 May |
19 June |
|
|
|
|
|
|
|
2550M for non-eFPS filers (for Feb) |
20 March |
19 May |
|
|
2550M for non-eFPS filers (for March) |
20 April |
4 June |
|
|
2550M for non-eFPS filers (for April) |
20 May |
19 June |
|
|
|
|
|
|
|
21 March |
20 May |
|
||
eFiling of 2550M for eFPS filers under Group D (for Feb) |
22 March |
21 May |
|
|
eFiling of 2550M for eFPS filers under Group C (for Feb) |
23 March |
22 May |
|
|
eFiling of 2550M for eFPS filers under Group B (for Feb) |
24 March |
23 May |
|
|
eFiling and ePayment of 2550M for eFPS filers under Group A (for Feb) |
25 March |
24 May |
|
|
ePayment of 2550M for Groups B, C, D and E (for Feb) |
25 March |
24 May |
|
|
|
|
|
|
|
eFiling of 2550M for eFPS filers under Group E (for March) |
21 April |
5 June |
|
|
eFiling of 2550M for eFPS filers under Group D (for March) |
22 April |
6 June |
|
|
eFiling of 2550M for eFPS filers under Group C (for March) |
23 April |
7 June |
|
|
eFiling of 2550M for eFPS filers under Group B (for March) |
24 April |
8 June |
|
|
eFiling and ePayment of 2550M for eFPS filers under Group A (for March) |
25 April |
9 June |
|
|
ePayment of 2550M for Groups B, C, D and E (for March) |
25 April |
9 June |
|
|
|
|
|
|
|
eFiling of 2550M for eFPS filers under Group E (for April) |
21 May |
20 June |
|
|
eFiling of 2550M for eFPS filers under Group D (for April)
|
22 May |
21 June |
|
|
eFiling of 2550M for eFPS filers under Group C (for April)
|
23 May |
22 June |
|
|
eFiling of 2550M for eFPS filers under Group B (for April)
|
24 May |
23 June |
|
|
eFiling and ePayment of 2550M for eFPS filers under Group A (for April)
|
25 May |
24 June |
|
|
ePayment of 2550M for Groups B, C, D and E (for April) |
25 May |
25 June |
|
|
|
|
|
|
|
eFiling/Filing & ePayment/Payment of 2550Q (for Fiscal Quarter [FQ] ending 29 Feb) |
25 March |
24 May |
|
|
eFiling/Filing & ePayment/Payment of 2550Q (for FQ ending 31 March) |
25 April |
9 June |
|
|
eFiling/Filing & ePayment/Payment of 2550Q (for FQ ending 30 April) |
25 May |
24 June |
|
|
|
|
|
|
|
Submission of Quarterly Summary List of Sales and Purchases (SLSPs) by non-eFPS filers (for FQ ending 29 Feb) |
25 March |
24 May |
|
|
Submission of Quarterly SLSPs by non-eFPS filers (for FQ ending 31 Mar) |
25 April |
9 June |
|
|
Submission of Quarterly SLSPs by non-eFPS filers (for FQ ending 31 Mar) |
25 May |
24 June |
|
|
|
|
|
|
|
Submission of Sworn Statement of Manufacturer’s or Importer’s Volume of Sales of Each Particular Brand of Alcohol, Tobacco Products and Sweetened Beverages (for FQ ending 29 Feb) |
25 March |
24 May |
|
|
Submission of Sworn Statement of Manufacturer’s or Importer’s Volume of Sales of Each Particular Brand of Alcohol, Tobacco Products and Sweetened Beverages (for FQ ending 31 March) |
25 April |
9 June |
|
|
Submission of Sworn Statement of Manufacturer’s or Importer’s Volume of Sales of Each Particular Brand of Alcohol, Tobacco Products and Sweetened Beverages (for FQ ending 30 April) |
25 May |
24 June |
|
|
|
|
|
|
|
Registration of computerized books of accounts (CBA) and Other Accounting Records in electronic format (for FQ ending 29 Feb) |
30 March |
29 May |
|
|
Registration of CBA and Other Accounting Records in electronic format (for FQ ending 31 March) |
30 April |
14 June |
|
|
Registration of CBA and Other Accounting Records in electronic format (for FQ ending 30 April) |
30 May |
29 June |
|
|
|
|
|
|
|
Submission of hard copies of Financial Statements and Scanned Copies of 2307 to eFiled 1702-RT/MX/EX (for Fiscal Year [FY] ending 30 Nov 2019) |
30 March |
29 May |
|
|
Submission of hard copies of Financial Statements and Scanned Copies of 2307 to eFiled 1702-RT/MX/EX (for calendar year [CY] 2019) |
30 April |
30 June |
|
|
Submission of hard copies of Financial Statements and Scanned Copies of 2307 to eFiled 1702-RT/MX/EX (for FY ending 31 Jan 2020) |
30 May |
15 July |
|
|
Submission of hard copies of Financial Statements and Scanned Copies of 2307 to eFiled 1702-RT/MX/EX (for FY ending 29 Feb 2020) |
30 June |
30 July |
|
|
|
|
|
|
|
2019 Inventory List (FY ending 29 Feb) |
30 March |
29 May |
|
|
2019 Inventory List (FY ending 31 March) |
30 April |
14 June |
|
|
2019 Inventory List (FY ending 30 April) |
30 May |
29 June |
|
|
|
|
|
|
|
eSubmission of Quarterly SLSPs by eFPS filers (for FQ ending 29 Feb) |
30 March |
29 May |
|
|
eSubmission of Quarterly SLSPs by eFPS filers (for FQ ending 31 March) |
30 April |
14 June |
|
|
eSubmission of Quarterly SLSPs by eFPS filers (for FQ ending 30 April) |
30 May |
29 June |
|
|
|
|
|
|
|
eFiling/Filing & ePayment/Payment of 1702Q & Summary Alphalist of Withholding Tax at Source (SAWT) (for FQ ending 31 Jan)
|
31 March |
30 May |
|
|
Submission of soft copies of 2307 in a |
15 April |
14 June |
|
|
eFiling/Filing & ePayment/Payment of 1702Q & SAWT (for FQ ending 29 Feb) |
29 April |
13 June |
|
|
Submission of soft copies of 2307 in a DVD-R and sworn declarations as attachments to the eFiled 1702Q (for FQ ending 29 Feb) |
15 May |
14 June |
|
|
eFiling/Filing & ePayment/Payment of 1702Q & SAWT (for Q1 ending 29 March)
|
30 May |
29 June |
|
|
|
|
|
|
|
Filing of 1604-CF |
31 March |
30 May |
|
|
Filing of 1604-E with alphalist |
31 March |
30 May |
|
|
Submission of 2316 |
31 March |
30 May |
|
|
|
|
|
|
|
eFiling/Filing & ePayment/Payment of 2000 and 2000-OT (for March) |
5 April |
4 June |
|
|
eFiling/Filing & ePayment/Payment of 2000 and 2000-OT (for April) |
5 May |
4 June |
|
|
|
|
|
|
|
eSubmission of Monthly eSales Report of all Taxpayers using Cash Register Machine (CRM)/Point-of-Sale Machine (POS) with Tax Identification Number (TIN) ending in even numbers (for March) |
8 April |
7 June |
|
|
eSubmission of Monthly eSales Report of all Taxpayers using CRM/POS with TIN ending in even numbers (for April) |
8 May |
7 June |
|
|
eSubmission of Monthly eSales Report of all Taxpayers using CRM/POS with TIN ending in odd numbers (for March) |
10 April |
9 June |
|
|
eSubmission of Monthly eSales Report of all Taxpayers using CRM/POS with TIN ending in odd numbers (for April) |
10 May |
9 June |
|
|
|
|
|
|
|
Filing & Payment of 2200M (for March) |
10 April |
9 June |
|
|
Filing & Payment of 2200M (for April) |
10 May |
9 June |
|
|
|
|
|
|
|
eFiling/Filing & ePayment/Payment of 1600 with monthly alphalist and 1606 (for March)
|
10 April |
9 June |
|
|
eFiling/Filing & ePayment/Payment of 1600 with monthly alphalist and 1606 (for April) |
10 May |
9 June |
|
|
eFiling/Filing & ePayment/Payment of 1600 (for March) |
10 April |
9 June |
|
|
eFiling/Filing & ePayment/Payment of 1600 (for April) |
10 May |
9 June |
|
|
|
|
|
|
|
Filing & Payment of 1601-C by non-eFPS filers (for March) |
10 April |
9 June |
|
|
Filing & Payment of 1601-C by non-eFPS filers (for April) |
10 May |
9 June |
|
|
|
|
|
|
|
eFiling of 1601-C for eFPS filers under Group E (for March) |
11 April |
10 June |
|
|
eFiling of 1601-C for eFPS filers under Group D (for March) |
12 April |
11 June |
|
|
eFiling of 1601-C for eFPS filers under Group C (for March) |
13 April |
12 June |
|
|
eFiling of 1601-C for eFPS filers under Group B (for March) |
14 April |
13 June |
|
|
eFiling of 1601-C for eFPS filers under Group A (for March) |
15 April |
14 June |
|
|
ePayment of 1601-C for Groups B, C, D and E (for March) |
15 April |
14 June |
|
|
|
|
|
|
|
eFiling of 1601-C for eFPS filers under Group E (for April) |
11 May |
10 June |
|
|
eFiling of 1601-C for eFPS filers under Group D (for April) |
12 May |
11 June |
|
|
eFiling of 1601-C for eFPS filers under Group C (for April) |
13 May |
12 June |
|
|
eFiling of 1601-C for eFPS filers under Group B (for April) |
14 May |
13 June |
|
|
eFiling of 1601-C for eFPS filers under Group A (for April) |
15 May |
14 June |
|
|
ePayment of 1601-C for Groups B, C, D and E (for April) |
15 May |
14 June |
|
|
|
|
|
|
|
eFiling/Filing & ePayment/Payment of 1700, 1701 and 1701A (for CY ending 31 Dec 2019) |
15 April |
14 June |
|
|
Submission of attachments to eFiled 1700, 1701 and 1701A (for CY ending 31 Dec 2019) |
Manually filed with the ITR or 15 days from eFiling |
30 June |
|
|
|
|
|
|
|
eFiling/Filing & ePayment/Payment of 1702-RT/MX/EX (for CY ending 31 Dec 2019) |
15 April |
14 June |
|
|
eFiling/Filing & ePayment/Payment of 1702-RT/MX/EX (for FY ending 31 Jan 2020) |
15 May |
14 June |
|
|
eFiling/Filing & ePayment/Payment of 1702-RT/MX/EX (for FY ending 29 Feb 2020) |
15 June |
15 July |
|
|
|
|
|
|
|
eSubmission of Quarterly Summary List of Machines (CRM-POS) sold by all Machine Distributors/ Dealers/ Vendors/ Suppliers (for FQ ending 31 March) |
15 April |
14 June |
|
|
eSubmission of Quarterly Summary List of Machines (CRM-POS) sold by all Machine Distributors/ Dealers/Vendors/
|
15 May |
14 June |
|
|
|
|
|
|
|
Registration of Bound Loose-Leaf Books of Accounts / Invoices / Receipts & Other Accounting Records (for FY ending 31 March) |
15 April |
14 June |
|
|
Registration of Bound Loose-Leaf Books of Accounts / Invoices / Receipts & Other Accounting Records (for FY ending 30 April) |
15 May |
14 June |
|
|
|
|
|
|
|
Submission of List of Medical Practitioners (for calendar quarter [CQ] ending 31 March) |
15 April |
14 June |
|
|
|
|
|
|
|
Letter-Answer to Notice of Informal Conference |
Within the period starting 16 March and within the 30-day period from date of lifting of the ECQ |
30 days from the date of lifting of the quarantine |
|
|
Response to the Preliminary Assessment Notice |
|
|||
Protest Letter to Final Assessment Notice (FAN) / Formal Letter of Demand (FLD) |
|
|||
Submission of supporting documents for request for reinvestigation of audit cases with FAN/FLD |
|
|||
Appeal / Request for Reconsideration to the Commissioner of Internal Revenue on the Final Decision on Disputed Assessment |
|
|||
Other similar letters and correspondences with due dates |
|
|||
Suspension of running of the Statute of Limitations under Sections 203, 222 and 223 of the Tax Code |
Before expiration of the Statute of Limitations |
60 days after the date of lifting of the quarantine |
|
|
|
|
|
|
|
Certificate of Residence for Tax Treaty Relief Forms (CORTT) Forms in relation to final withholding taxes (FWT) on dividend, interest and royalty income of nonresidents for February paid in March |
within 30 days after the payment of FWT due |
30 days from the date of lifting of the quarantine |
|
|
CORTT Forms in relation to FWT on dividend, interest and royalty income of nonresidents for March paid in April |
|
|||
CORTT Forms in relation to FWT on dividend, interest and royalty income of nonresidents for April paid in May |
|
|||
|
|
|
|
|
eFiling/Filing & ePayment/Payment of 2551Q - In General (for quarter ending 31 March 2020) |
25 April |
9 June |
|
|
eFiling/Filing & ePayment/Payment of 2551Q - In General (for quarter ending 30 April 2020) |
25 May |
24 June |
|
|
eFiling/Filing & ePayment/Payment of 2551Q – Overseas Communications Tax (for quarter ending 31 March 2020) |
20 April |
4 June |
|
|
eFiling/Filing & ePayment/Payment of 2551Q - Overseas Communications Tax (for quarter ending 30 April 2020) |
20 May |
19 June |
|
|
eFiling/Filing & ePayment/Payment of 2551Q – Amusement Taxes (for quarter ending 31 March 2020) |
20 April |
4 June |
|
|
eFiling/Filing & ePayment/Payment of 2551Q - Amusement Taxes (for quarter ending 30 April 2020) |
20 May |
19 June |
|
|
|
|
|
|
|
0619-E & 1619-F for non-EFPS filers (for March) |
10 April |
9 June |
|
|
0619-E & 1619-F for non-EFPS filers (for April) |
10 May |
9 June |
|
|
|
|
|
|
|
eFiling of 0619-E & 1619-F for eFPS filers under Group E (for March) |
11 April |
10 June |
|
|
eFiling of 0619-E & 1619-F for eFPS filers under Group D (for March) |
12 April |
11 June |
|
|
eFiling of 0619-E & 1619-F for eFPS filers under Group C (for March) |
13 April |
12 June |
|
|
eFiling of 0619-E & 1619-F for eFPS filers under Group B (for March) |
14 April |
13 June |
|
|
eFiling and ePayment of 0619-E & 1619-F for eFPS filers under Group A (for March) |
15 April |
14 June |
|
|
ePayment of 0619-E & 1619- for Groups B, C, D and E (for March) |
15 April |
14 June |
|
|
|
|
|
|
|
eFiling of 0619-E & 1619-F for eFPS filers under Group E (for April) |
11 May |
10 June |
|
|
eFiling of 0619-E & 1619-F for eFPS filers under Group D (for April) |
12 May |
11 June |
|
|
eFiling of 0619-E & 1619-F for eFPS filers under Group C (for April) |
13 May |
12 June |
|
|
eFiling of 0619-E & 1619-F for eFPS filers under Group B (for April) |
14 May |
13 June |
|
|
eFiling and ePayment of 0619-E & 1619-F for eFPS filers under Group A (for April) |
15 May |
14 June |
|
|
ePayment of 0619-E & 1619-F for Groups B, C, D and E (for April) |
15 May |
14 June |
|
|
|
|
|
|
|
eFiling/Filing & ePayment/Payment of 0620 (for March) |
10 April |
9 June |
|
|
eFiling/Filing & ePayment/Payment of 0620 (for April) |
10 May |
9 June |
|
|
|
|
|
|
|
eFiling/Filing & ePayment/Payment of 1601EQ, 1601FQ, 1603Q and 1602Q (for quarter ending 31 March 2020) |
30 April |
14 June |
|
|
Submission of alphabetical list of payees as attachment to 1601EQ and 1601FQ (for quarter ending 31 March 2020) |
30 April |
14 June |
|
|
|
|
|
|
|
Application for refund or credit of taxes erroneously or illegally received or penalties imposed without authority under Section 204(C) of the Tax Code from 17 March 2018 to |
2 years after the payment of tax or penalty |
14 June |
|
|
Application for refund or credit of taxes erroneously or illegally received or penalties imposed without authority under Section 204(C) of the Tax Code from 1 May 2018 to |
30 June |
|
||
|
|
|
|
|
Availment of tax amnesty on delinquencies (2118 DA) |
23 April |
22 June |
|
|
|
|
|
|
|
Filing & Payment of 1701-A (For CY ending 31 Dec 2019) |
15 April |
14 June |
|
|
Filing & Payment of 1701-A (For FY ending 31 Jan 2020) |
15 May |
14 June |
|
|
|
|
|
|
|
eFiling/Filing & ePayment/Payment of 1704 (For FY ending 31 March) |
15 April |
14 June |
|
|
eFiling/Filing & ePayment/Payment of 1704 (For FY ending 30 April) |
15 May |
14 June |
|
|
|
|
|
|
|
Quarterly eFiling/Filing & ePayment/Payment of 1621 (for quarter ending 31 March) |
30 April |
14 June |
|
|
|
|
|
|
|
Filing of 1701-Q (for Q1 ending 31 March) |
15 May |
14 June |
|
|
|
|
|
|
|
eFiling/Filing & ePayment/Payment of 2552 |
Within 5 banking days from collection |
30 days from date of lifting of the quarantine |
|
|
|
|
|
|
|
eFiling/Filing & ePayment/Payment of 2553 |
Designated due date under special law |
30 days from date of lifting of the quarantine |
|
|
|
|
|
|
|
eFiling/Filing & ePayment/Payment of 2200-A, 2200-AN, 2200-P, 2200-T & 2200-S (every removal) |
Before removal of excisable products from place of production |
Before removal of excisable products from place of production |
||
|
|
|
|
|
Filings and submissions of other reportorial requirements omitted from the foregoing
|
within the period of emergency starting |
30 days from date of lifting of the quarantine |
|
|
The following should be noted:
- The extended due dates shall apply throughout the Philippines.
- If the new due date falls on a holiday or non-working day, the submission or filing shall be made on the next working day.
- The term “quarantine” as used above shall mean any announcement by the National Government resulting in limited operations and mobility, including, but not limited to, community quarantine, enhanced community quarantine, modified community quarantine and general community quarantine.
- For VAT refund claims, the 90-day period of BIR processing for those that are currently being evaluated and for those that may be received between 16 March to 14 April is suspended. The counting of the number of processing days shall resume after the lifting of the community quarantine.
- If case of another quarantine extension, the above extended due dates shall be further extended by 15 calendar days.
- Taxpayers who file tax returns within the original deadlines or prior to the extended deadlines can amend on or before the extended due without penalties for late filing in case additional taxes are paid in the amended tax returns.
If the amended return instead results in a tax overpayment, the taxpayer may carry over the overpayment as a credit against future taxes due for the same tax type.
(Revenue Regulations Nos. 11, 10, 7 and 5-2020 and Revenue Memorandum Circular Nos. 39, 38, 33, 32, 31, 30, 29, 28, 27, 26, 25 and 17-2020)
Wage subsidy
Implementing the Small Business Wage Subsidy Program
The BIR disseminated Joint Memorandum Circular No. 1-2020 which contains the Guidelines for the Small Business Wage Subsidy (SBWS) Program. The guidelines provide for the following:
- Under the SBWS Program, eligible employees of small businesses shall be granted a wage subsidy between PH₱5,000 to PH₱8,000 based on the regional minimum wage.
- An eligible employer pertains to a small business which:
- is not in the BIR list of Large Taxpayers;
- belongs to the non-essential industry and forced to stop operations, or to the quasi-essential industry and allowed to operate a skeleton force;
- is registered with the BIR and tax-compliant for the past three years up to January 2020; and
- is registered with the SSS and has paid its contributions for the past three years up to January 2020.
- The BIR is responsible for pre-qualifying small businesses based on the above eligibility requirements.
- An employee who satisfies all the following is eligible for the SBWS:
- Must be an employee of an eligible small business;
- Must be employed and active as of 1 March 2020 but unable to work due to the ECQ;
- o Did not get paid by the employer for at least two weeks during the temporary closure or suspension of work;
- o Under any employment status (e.g., regular, probationary, regular seasonal, project-based, fixed-term); and
- · The following employees are disqualified:
- o Those working from home or part of the skeleton force
- o Those on leave for the entire duration of the ECQ or other forms thereof
- o Recipients of SSS unemployment benefits and/or have unsettled or in-process SSS final claims
- Employees who received subsidies under the COVID-19 Adjustment Measures Program (CAMP) and other similar programs may be eligible for the SBWS. However, the second tranche of the SBWS shall be net of the amount received under the said programs.
- The following additional conditions should also be met:
- Eligible employers must maintain the employment status of all eligible employee beneficiaries before the ECQ and other forms thereof and throughout the SBWS period; and
- Employees cannot resign during the ECQ and other forms thereof.
- Applications will be completed by the employer on behalf of their employees and filed with the SSS. The employer shall certify that the employee met all eligibility requirements and none of the disqualifications.
The SSS will only be accepting applications from
16 April 2020 to 8 May 2020.
(Revenue Memorandum Circular No. 45-2020, issued 30 April 2020)
Foreign missions
Temporary copies of VAT Certificates (VCs) and VAT Identification Cards (VICs)
In light of the ECQ and pursuant to the recommendation of the Department of Foreign Affairs (DFA), the BIR granted the temporary issuance of electronic copies of VCs and VICs to newly accredited personnel of Resident Foreign Missions (RFMs) qualified for point-of-sale VAT exemption, and to RFMs, RFM personnel and their dependents who will apply for renewal of expired VCs and VICs.
The following should be noted:
- The electronic VCs and VICs shall be valid until
30 August 2020 and should be renewed within 30 calendar days from the date of lifting of the ECQ. - Concerned RFM personnel and dependents should present to business establishments the electronic VCs and VICs and DFA-issued electronic copy of Certification of Accreditation or valid DFA Protocol ID.
- On the other hand, RFMs (through their duly authorized representatives) should present the VC, an identification card, and Special Power of Attorney or authorization letter.
(Revenue Memorandum Circular No. 44-2020, issued 17 April 2020)
Paying up
Acceptance of tax payments during the ECQ
In light of the ECQ extension, taxpayers may pay their taxes as follows:
- Pay taxes at the nearest authorized agent banks (AABs) notwithstanding RDO jurisdiction; or
- File and pay taxes to the concerned Revenue Collection Officers (RCOs) of the nearest Revenue District Office, even in areas where there are AABs.
For payments to RCOs, cash payments should not exceed PH₱20,000. Check payments have no limit as to amount and should be made payable to the BIR. The name of the receiving AAB branch may no longer be indicated.
(Revenue Memorandum Circular No. 43-2020, issued 17 April 2020)
2019 ITRs
Guidelines in the filing and payment of 2019 annual income tax returns (ITRs)
Taxpayers who will file manually or using the Offline eBIRForms Package or are enrolled in the Electronic Filing and Payment System (eFPS) shall file and pay in accordance with the guidelines set forth in Annex “A” of RMC No. 42-2020.
(Revenue Memorandum Circular No. 42-2020, issued 17 April 2020)
eDST payments
Allowing the use of the Constructive Stamping/Receipt System (CS/RS)
All electronic DST (eDST) System users-taxpayers are allowed to use the CS/RS on taxable documents provided that the payments as deposits in the eDST System shall not be applied to the taxable documents.
Within 30 days from the DST return filing and payment deadline, a list of taxable documents and corresponding DST subjected to the constructive affixture shall be submitted to the concerned revenue district office or Large Taxpayers Service division.
(BIR Tax Advisory, dated 23 March 2020)
Vaping effects
Tax compliance requirements in relation to heated tobacco and vapor products
All taxpayers affected by the administrative requirements under RA No. 11346 which imposes excise taxes on heated tobacco products and vapor products should comply with the following:
- Amend BIR registration to include the tax type “EXCISE TAX”;
- Secure a Permit to Engage in Business as Manufacturer, Importer, or Dealer/Trader of Heated Tobacco Products and Vapor Products from the Excise Large Taxpayers Regulatory Division (ELTRD);
- Assign an Assessment Number to be provided by the ELTRD;
- In case of importation, secure a Permit to Import and an Authority to Release Imported Goods from ELTRD and pay the excise tax using BIR Form No. 2200-T;
- Request for Internal Revenue Strip Stamps to include Heated Tobacco Products and Vapor Products;
- Register New and Existing Brands of Tobacco Products;
- For manufacturers, fill up the prescribed Excise Taxpayer’s Removal Declaration for all removals; and
- Maintain Official Registry Books and other forms or records that may be prescribed.
(Revenue Memorandum Circular No. 24-2020, issued 6 March 2020)
Splitting form
Amending BIR guidelines in the implementation of the PERA Act of 2008
The BIR amended Revenue Memorandum Order No. 28-2017, which prescribes the guidelines and procedures in the implementation of the Personal Equity and Retirement Account (PERA) Act of 2008 (RA No. 9505).
Specifically, BIR Form No. 2339 was amended into two separate forms, namely:
- Annex E-1(a) for Employee without Qualified Employer’s Contribution; and
- Annex E-1(b) for Employee with Qualified Employer’s Contribution
(Revenue Memorandum Order No. 11-2020, issued 20 April 2020)
Wage hikes
Increase of minimum wages of workers in Regions III, VII and XII
The Regional Tripartite Wages and Productivity Boards of SOCCSKSARGEN (Region XII) have respectively issued Wage Orders increasing the daily minimum wage rates as follows:
- Region XII - Wage Order No. RB XII-21
Sector / Industry |
Current |
New (upon effectivity of Wage Order No. RB XII-21) |
New (effective 1 May 2020) |
Non-Agriculture |
PH₱311 |
PH₱326 |
PH₱336 |
Agriculture/ |
PH₱290 |
PH₱305 |
PH₱315 |
- Region III - Wage Order No. RB III-22
Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac & Zambales |
||
Sector / Industry |
Current |
New Minimum |
Non-Agriculture |
|
|
Employing 10 or more workers |
PH₱400 |
PH₱420 |
Employing less than 10 workers |
PH₱393 |
PH₱413 |
Agriculture |
|
|
Plantation |
PH₱370 |
PH₱390 |
Non-plantation |
PH₱354 |
PH₱374 |
Retail Service |
|
|
Employing 10 or more workers |
PH₱389 |
PH₱409 |
Employing less than 10 workers |
PH₱375 |
PH₱395 |
Aurora |
||
Sector / Industry |
Current |
New Minimum |
Non-Agriculture |
PH₱349 |
PH₱369 |
Agriculture |
|
|
Plantation |
PH₱334 |
PH₱354 |
Non-plantation |
PH₱322 |
PH₱342 |
Retail Service |
PH₱284 |
PH₱304 |
- Region VII - Wage Order No. RO VII-22
Area |
New Rates |
||
Non-Agriculture |
Agriculture |
Employing less than 10 workers |
|
Class A |
PH₱404 |
PH₱394 |
PH₱394 |
Class B |
|
|
|
Bogo & Toledo |
PH₱366 |
PH₱361 |
PH₱361 |
Bohol & Negros Oriental Cities |
|||
Class C |
|
|
|
Cebu Municipalities except Compostela, Consolacion, Cordova, Lilloan, Minglanilla & San Fernando |
PH₱356 |
PH₱351 |
PH₱351 |
Bohol & Negros Oriental Municipalities |
|||
Siquijor, Bantayan & Camotes Islands Municipalities |
|||
- Region VII - Wage Order No. BARMM-01
Maguindanao, Lanao del Sur, Basilan, Sulu, Tawi-Tawi, Marawi and Lamitan |
||
Sector / Industry |
Current |
New |
Non-Agriculture |
PH₱280 |
PH₱300 |
Agriculture |
|
|
Plantation |
PH₱270 |
PH₱290 |
Non-plantation |
||
Cotabato City and 63 Barangays in North Cotabato |
||
Sector / Industry |
Current |
New |
Non-Agriculture |
PH₱311 |
PH₱325 |
Agriculture |
|
|
Plantation |
PH₱290 |
PH₱300 |
Non-plantation |
||
The above minimum daily wages rate take effect 15 days after publication of the subject Wage Orders in a newspaper of general circulation in the respective regions.
(Revenue Memorandum Circular Nos. 22, 21, 20 and 19-2020, issued 4 March 2020)
Field audits
Conduct of tax audits and field work during the ECQ
Revenue Officers shall observe the following guidelines during the ECQ:
- They shall continue to work on their assigned cases based on documents previously submitted by the taxpayer and other information available within the BIR.
- For non-prescribing cases, which lack documentary requirements and require audit continuation, the period to submit the report of investigation shall be extended by 30 days.
- Field audit and other field operations shall not be conducted. Personal service of electronic Letters of Authority, Notice of Informal Conference, Discrepancy Notices or Mission Orders are temporarily prohibited.
- Documents shall be received by the BIR without delay and without verbal discussion.
(Operations Memorandum No. 20-2020, dated 17 March 2020)
Bank instructions
Acceptance of payments by eFPS filers and check payments by any taxpayer
During the ECQ, all authorized agent banks (AABs) are advised to:
- Accept over-the-counter filings and payments of returns by eFPS filers, with or without the printed copy of the pop-up message screenshot as proof of unsuccessful eFiling; and
- Accept check payments from any taxpayer even without the name of the receiving AAB Branch indicated in the check, provided that all check payments are made payable to the BIR.
(Bank Bulletin No. 4-2020, dated 15 April 2020)
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