RR 12-2013 on Mandatory Withholding in Philippines

Bureau of Internal Revenue (BIR) issued Revenue Regulations No. 12-2013 dated July 12, 2013 (RR No. 12-2013) amending Section 2.85.5 of Revenue Regulations No. 2-98 (RR No.2-98), as amended, relative to the requirements for deductibility of certain income payments. Under RR No. 12-2013, no deduction shall be allowed on income payments if it is shown that the applicable withholding taxes required by  the rules had not been withheld. No deduction will also be allowed even if during tax assessment on deficiency withholding taxes for alleged failure to withhold, the taxpayer paid the withholding taxes. In effect RR No. 12-2013 makes it mandatory...

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RR No. 9-2013 on Tax Compromise Fee in Philippines

The Bureau of Internal Revenue (BIR) issued Revenue Regulations No. 9-2013 dated May 10, 2013 (RR No. 9-2013) amending Revenue Regulations No. 30-2002 (RR No. 30-2002) relative to the amount of compromise payment of deficiency internal revenue taxes. In the past under RR No. 30-2002, the rule was to apply for compromise of deficiency taxes under any of the following and upon approval, the compromise amount shall then be paid: Minimum amount of 40% of basic tax due based on doubtful validity; or Minimum amount of 10% of basic tax due based on financial incapacity. Under RR No. 9-2013, the compromise offer shall be paid by the taxpayer upon...

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BIR RR No. 1-2013 mandated EFPS of Government Agencies

REVENUE REGULATIONS NO. 1-2013 (RR No. 1-2013) issued on January 23, 2013 further expanded the coverage of taxpayers required to file tax returns and pay taxes through the Electronic Filing and Payment System (eFPS) to include National Government Agencies (NGAs) mandatorily required to use the Electronic Tax Remittance Advice (eTRA). Accordingly, the following taxpayers are already mandated to make use of the eFPS: a. Large Taxpayers duly notified by the Bureau of Internal Revenue (BIR); b. Top 20,000 Private Corporations duly notified by the BIR; c. Top 5,000 Individual Taxpayers duly notified by the BIR; d. Taxpayers who wishes...

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New Requirement for ALL VAT-registered taxpayers

Revenue Regulations No. 1-2012 dated December 14, 2012 and effective January 1, 2012 amended Section4.114-3 and (e)(7) of Revenue Regulations No. 16-2005 now requiring ALL VAT-registered taxpayers to submit the following:a. Quarterly Summary List of Sales, and,b. Quarterly Summary List of Purchases.The said summary list of sales and purchases shall be submitted through Compact Disk Reader (CDR). This is required to be submitted not later than 25th day of the month following the close of the quarter. Failure to file the same is subject to penalty of P1,000 for each such failure, unless such failure is due to reasonable cause and not to willful neglect. For the purpose, failure to report each buyer or supplier is a single act or omission punishable but not to exceed P25,000 for the taxable...

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Penalty for failure to segreggate VAT

Under Revenue Regulations No. 18-2011 dated September 21, 2011, VAT-registered taxpayers who shall fail to separate the value-added tax (VAT) component in the sales invoice (for goods), or official receipts (for services) shall be penalized upon conviction as follows:a. Fine of not less than P1,000 but not more than P50,000, and,b. Suffer imprisonment of not less than two (2) years but not more than ten (10) years.Comment:This is not actually a new requirement to separate the VAT component in the invoice or receipt for transparency purposes, but only to penalize those who do not comply the same. Problem may arise if the seller does not indicate the VAT passed on because if a VAT receipt/invoice is issued, it presupposes that a VAT is imposed so the tendency of the business buyer is to divide...

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Income Taxation of Proprietary Educational Institutions

For tax income tax purposes, educational institutions are classified as follows: Proprietary educational institution;Non-stock, non-profit educational institution; or,Government educational institution. In this Article, let us uncover how a proprietary educational institution is being subjected to income tax. Definition Under the Tax Code, 'proprietary educational institution' is any private school maintained and administered by private individuals or groups with an issued permit to operate from the Department of Education, Culture and Sports (DECS), or the Commission on Higher Education (CHED), or the Technical Education and Skills Development...

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BIR Tax Agent Practitioner (TAP) Accreditation

Tax practitioner/Agent – The following shall be deemed to be in tax practice and required to apply for accreditation those who are engaged in the regular preparation, certification, audit and filing of tax returns, information returns and other statements or reports required by the Code or Regulations; those who are engaged in the regular preparation requests for rulings, requests for reinvestigations, protests, requests for refunds or tax credit certificates, compromise settlement and/or abatement of tax liabilities, and other official papers and correspondence with the Bureau of Internal Revenue (BIR), and other similar related activities; orthose who regularly appears in meetings, conferences, or hearings before any office of the Bureau of Internal Revenue officially in behalf of the taxpayer...

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Change in Accounting Period under RR No. 3-11

Revenue Regulations No. 3-2011 dated March 7, 2011 - "Regulations Providing for Policies, Guidelines and Procedures on the Application for Change in Accounting Period under Section 46 of the National Internal Revenue Code (NIRC) of 1997, as amended"Under Section 46 of the Tax Code, as amended, it provides and hereunder quoted:SEC. 46. Change of Accounting Period. If a taxpayer, other than an individual, changes his accounting period from fiscal year to calendar year, from calendar year to fiscal year, or from one fiscal year to another, the net income shall, with the approval of the Commissioner, be computed on the basis of such new accounting...

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Overseas Communication Tax Under RR 11 - 2011

Revenue Regulations No. 11-2011 entitled "Revenue Regulations Defining Gross Receipts for Common Carrier's Tax for International Carriers pursuant to Section 118 of the Tax Code amending Section 10 of Revenue Regulations No. 15-2011" finally came up with a formal definition of Gross Receipts for International Carriers under Section 118 of the Tax Code as follows:"Gross receipts" shall include, but shall not be limited to, the total amount of money or its equivalent representing the contract or ticket prize, excess baggage fees, freight/cargo fees, mail fees, rental, penalties, deposit applied as payments, advance payments and other service charges...

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VAT on tax-free transfer under RR No. 10-2011

Revenue Regulations No. 10-2011 dated July 1, 2011 entitled "Amending Certain Provisions of Revenue Regulations No. 16-2005, as amended by Revenue Regulations No. 4-2007, Otherwise Known as the Consolidated Value Added Tax Regulations of 2005, as amended" finally settled the issue of VAT on tax-free transfers of real property used in trade or business of a taxpayer. Section 2 of RR No. 10-2011 reworded part of Section 4.106-8 of RR No. 16-05, as last amended by RR No. 4-07, as follows: "X x x However, the exchange of goods or properties including the real estate properties used in business or held for sale or for lease by the transferor, for...

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