DEPARTMENT OF FINANCE
The Department of Finance (DoF) issued Revenue Regulations (RR) No. 16-2018, 30 April 2018, which amended RR No. 10-2015 as amended by RR Nos. 12-2015, 14-2015 and 06-2016 relative to the use of non-thermal paper for all Cash Register Machines (CRMs)/Point of Sales (POS) Machines and other invoice/receipt generating machine or software.
All taxpayers using CRM/POS machines or other invoice/receipt generating machine/software shall have the option to use the type of paper depending on their business requirements, subject to the retention and prevention of accounting records for a period within which the Commissioner of Internal Revenue (CIR) is authorized to make an assessment and collection of taxes as provided under the 1997 National Internal Revenue Code of the Philippines, as amended (Tax Code).
The tape receipt to be issued by the seller should show all the required information as enumerated in the RR. Further, buyers or customers who need proof of payment to be able to claim an expense (for income tax purposes) or input tax (for VAT purposes) may return the issued tape receipt to the seller and request for the issuance of a manual invoice/receipt. The seller should issue the manual invoice/receipt when so requested by the buyer or customer.
Sales generated from CRM/POS machines where tape receipts issued where replaced by manual invoice/receipt shall be deducted from the sales to be reported in the eSALES system of the BIR, which deduction shall be reflected as an adjustment in the CRM Sales Book/Back end report. The said sales shall still be included, but separately indicated, in the Summary List of Sales (SLS) required to be submitted by VAT registered taxpayers.
BUREAU OF INTERNAL REVENUE
The Bureau of Internal Revenue (BIR) issued the following:
Revenue Memorandum Circular (RMC) No. 43-2018, 18 May 2018, regarding the creation of fast lane for all One-Time Transactions (ONETT) Involving Simple Transaction.
There will be a fast lane that will cater to individuals or corporations filing Capital Gains Tax or Donor's Tax Returns with only one (1) Deed of Sale/Exchange/Donation involving one (1) to three (3) properties. These transactions shall be processed and the corresponding Electronic Certificate Authorizing Registration (eCARs) released within three (3) working days upon submission of complete documentary requirements.
The ONETT under the fast lane shall be processed by the Group Supervisor of the Assessment Section assigned as Officer of the Day and approved by the Assistant Revenue District Officer/ Revenue District Officer (RDO). The submission of the complete documentary requirements should include a Certificate from the Bank signed by the Cashier and countersigned by the Manager with bank seal that will be secured by the taxpayer immediately after payment for cash transaction from the Authorized Agent Bank (AAB).
RMC No. 42-2018, 25 May 2018, suspends the use of the Update of Exemption of Employees (UEE) Data Entry Module in filing of the BIR Form No. 2305 (Certificate of Update and Exemption and of Employer’s and Employee’s Information) and 2305 Batch File Validation Module.
The suspension is pursuant to the Tax Reform for Acceleration and Inclusion (TRAIN) Law, effective 01 January 2018, where taxpayers with dependents are no longer required to update their additional exemptions by filing the BIR Form No. 2305. Change of civil status and employee’s information shall now be done manually using BIR Form No. 1905 (Application for Registration Information Update).
RMC No. 41-2018, 23 May 2018, in relation to Revenue Memorandum Order (RMO) No. 30-2005, to clarify the policies on the issuance of Tax Identification Number (TIN) to corporations that reached its corporate life stated in its Articles of Incorporation. Pursuant to Section 11 of the Corporation Code of the Philippines. The BIR clarifies that the following policies be adopted:
- A corporation of partnership whose corporate life has been extended by the Securities and Exchange Commission (SEC), prior to the expiration of its corporate life, shall not be issued a new TIN. However, it is mandated to update its BIR registration record by submitting BIR Form No. 1905, attaching a copy of its newly issued SEC Certificate of Registration (COR) and Amended Articles of Incorporation having the same name as a proof of its corporate life extension.
- A corporation that has been issued a second or new SEC COR to correct typographical errors in its old SEC COR shall not be issued a new TIN. However, it is required to update its registration with its respective RDO.
- A corporation or partnership whose SEC registration has been revoked or its corporate life has expired shall cease to exist as a juridical entity to do business.
- While the SEC allows the re-registration of expired corporation using the same corporate name as reflected in the SEC COR, such corporation is separate and distinct from the expired corporation, having a new SEC Registration number and new pre-generated TIN.
- The pre-generated TIN issued by SEC to the newly registered corporation using the name of the expired corporation shall be confirmed by the BIR using BIR Form No. 1903 for the issuance of BIR COR and application for Authority to Print principal/supplementary invoices/receipts, simultaneous with the application for cancellation of the old TIN of the expired corporation.
- The new TIN of the corporation shall be used in all of its future transactions with the BIR.
- The TIN of the corporation or partnership which ceased to exist as a juridical person due to the expiration of its corporate life shall be used by the said corporation in the process of liquidation/winding up its business and shall be cancelled upon the issuance of clearance by the BIR.
- In case the expired corporation is classified as a Large Taxpayer (LT), such registration shall be carried over by the newly registered corporation that assumed the business name and operations of the expired corporation. Hence, the registration will have to be made with the LT Division where the old corporation is registered.
- In merger of corporations, the surviving corporation shall retain its TIN while the TIN of the merged corporation shall be cancelled following the existing procedures in the cancellation of registration. In the consolidation of corporations, a new TIN shall be issued to the new corporation and the TINs of the consolidated corporations shall be cancelled following the existing procedures in the cancellation of registration.
RMC No. 39-2018, 08 May 2018, to emphasize that goods or properties originally intended for sale or use in business, including capital goods, disposed of or existing as of the date of change in or cessation of status of a taxpayer from VAT to Non-VAT are subject to VAT under Section 106(C) of the Tax Code, as amended, as implemented by Section 4.106-8 of RR No. 16-2005. Hence, taxpayers are required to file the quarterly VAT return covering the period when the change of status transpired and pay the corresponding VAT due thereon.
RMC No 36-2018, 07 May 2018, amends RMC No. 55-2016 to extend the Validity Date on the Certificate of Accreditation Issued to Developers/Dealers/Suppliers/Vendors/Pseudo-Suppliers of CRM, POS Machines and/or Other Sales Machine/Receipting Software. The said RMC was issued to extend the validity of all valid Certificate of Accreditation of all developers/dealers/suppliers/vendors/pseudo-suppliers of CRM, POS, and/or other Sales Machine/Receipting Software. The pertinent provisions are as follows:
a. All valid Certificate of Accreditation issued on or before 31 July 2015 shall be valid until 31 July 2020; and
b. All valid Certificate of Accreditation issued on 01 August 2015 onwards shall follow the five-year validity period based on the actual date of issuance.
Further, the said RMC provides that both primary and supplementary invoices/receipts must reflect the corresponding date of issuance and validity period of accreditation as provided above.
RMC No. 34-2018, 17 May 2018, to advise that the Convention between the government of Philippines and Sri Lanka for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income has entered into force on 14 March 2018.
The Convention shall have effect on the income sourced in the Philippines by nonresidents beginning 01 January 2019 pursuant to Paragraph 2, Article 29 (Entry of Force) of the said Convention.
Tax Treaty Relief Applications (TTRA) invoking the Philippines-Sri Lanka Double Taxation Agreement should be filed with and addressed to the International Tax Affairs Division (ITAD) at Room No. 811, BIR, National Office Building, Diliman, Quezon City Philippines. The concerned Sri Lankan resident and income earner, or his duly authorized representative, should file a duly accomplished Application for Relief from Double Taxation (BIR Form No. 0901) or Certificate of Residence for Tax Treaty Relief (CORTT Form), whichever is applicable, together with the required documents, pursuant to RMO Nos. 72-2010 and 08-2017, respectively. RMC No. 33-2018, 17 May 2018, to advise that the Renegotiated Convention between the government of Philippines and Thailand for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income has entered into force on 05 March 2018.
The Renegotiated Convention shall have effect on the income sourced in the Philippines by nonresidents beginning 01 January 2019 pursuant to Paragraph 2, Article 28 (Entry of Force) of the said Renegotiated Convention.
TTRA invoking the Philippines-Thailand Double Taxation Convention should be filed with and addressed to the ITAD at Room No. 811, BIR, National Office Building, Diliman, Quezon City Philippines. The concerned Thai resident and income earner, or his duly authorized representative, should file a duly accomplished BIR Form No. 0901 or CORTT Form, whichever is applicable, together with the required documents, pursuant to RMO Nos. 72-2010 and 08-2017, respectively.
RMC No. 30-2018, 03 May 2018, amends the Documentary Requirements for New Business Registrants specifically Annexes A1 to A3 of RMC No. 93-2016 removing the Books of Accounts (BOA) as a requirement in securing a COR and Authority to Print (ATP). The salient changes involves the following:
- BOA for new business registrants shall be registered within 30 days from the date of registration.
- Failure to register within the prescribed period shall be subject to the penalties pursuant to existing revenue issuances
- For authorized representatives of individuals, they need to present a Special Power of Attorney and Identification Card (ID) of the authorized person.
- For authorized representatives of non-individuals, they need to present a Board Resolution indicating the name of the authorized representative, a secretary's certificate and ID of the authorized person.
RMO No. 24-2018, 24 February 2018, to define the policies and procedures in the use of social media by the BIR, define the roles and responsibilities of concerned BIR offices in the maintenance and regulation of the social media sites of the BIR, provide additional platform in tax information dissemination to increase taxpayer awareness on tax processes, procedures, programs, policies, and provisions of the Tax Code, as amended, and improve delivery of taxpayer services and compliance through information dissemination and education.
RMO No 20-2018, 19 March 2018, provides the revised guidelines, policies and procedures in processing the request for conversion of Tax Credit Certificate (TCCs) into cash refund. The important provisions of the RMO are the following:
- Generally, all requests for cash conversion shall be filed with the office that originally processed or investigated the claim for issuance of TCC. Note that the original copy of the TCC must be surrendered as part of the supporting documents.
- Exceptions: (i) it shall be filed with the Tax Audit and Review Division (TARD) when the claims were filed with the RDO subjected to the further review and approval of the concerned revenue officers; (ii) revalidated TCCs shall be filed with the Miscellaneous Operations Monitoring Division (MOMD) of the Collection Service (CS)
- The revenue officials which recomend approval/disapproval are: VAT Credit Audit Division (VCAD); Deputy Commissioner (DCIR) - Operations Group (OG) and Commissioner of Internal Revenue (CIR); Large Taxpayer/s - Audit Division (LTADs) or Large Taxpayers Divisions (LTDs), Appellate Division; TARD MOMS.
- if the taxpayer-claimant has a verified Outstanding Tax Liability (OTL) according to MOMD, durin gthe process of the request or prior to final approval of the refund by the Accounting Division (AccD), he may use the TC for payment of the OTL, if applicable. In the latter case, the CS shall manually cancel the original TCC upon issuances of the Tax Debit Memo (TDM)
- No cash conversion when the TCC issued as a result of the availment of incentives granted pursuant to special laws for which no actual payment was made and when previously assigned or transferred TCC prior to RR No. 14-2011.
- TCCs issued and which remained unutilized after 5 years from issuance shall not be allowed to be converted unless revalidated before the end of the 5th year.
- All request for cash conversion of TCCs shall be verified by the ACIR-CS and ACIR-FS for funding purposes. But the verification does not include examination of validity and correctness of supporting documents.
- DCIR-OG shall approve/disapprove the recommendations for each conversion of TCCS prior to the submission to the Financial Service for processing of payment.
- The policies and procedures prescribed in RMO No. 38-2014 shall be observed, as amended by RMC Nos. 89-2017 and 17-2018.
- The documents to be submitted by the taxpayer-claimant shall include a letter request and original copies of the TCCs, Secretary Certificate/SPA, if applicable, Board Resolution approving appointment of representative and any government issued ID.
- The concerned office shall attach to the docket for cash conversion all the documents submitted by the taxpayer-claimant, certificate of authenticity and validity of TCC, certification on OTL of the taxpayer-claimant, certification on the status of pending cases, certification from the AHRMD, that the TCC is not included in the list of cancelled or lost TCC. It is also required for them to submit a duly signed disbursement voucher and budget utilization requires and status forms and a duly approved memorandum report.
- The procedure shall begin with the VCAD/LTADs/Appellate Division/RDOs/TARD/MOMD where the receiving of the letter, initial review and evaluation of records, preparation of certificate of authenticity and validity of TCCs as well as the memorandum report recommending approval/disapproval for conversion, which shall forward the entire docket to the recommending revenue officials.
- The next step is with the AS/CS/LTS/Office fo the RD which shall review the docket pertaining to the request and forward it to the MOMD.
- Then the MOMD shall check the completeness of the documents and acknowledge the same if found complete. Otherwise it shall request the Accounts Receivable Monitoring Division (ARMD), Large Taxpayers Collection Enforcement Division (LT-CED), RDO and Collection Division of the concerned Regional Office, to verify the existence of tax liabilities and issue a certification of OTL.
- If the taxpayer-claimant has an existing OTL involving withholding taxes it should be settled before the application can proceed. If it is with a pending compromise settlement/abatement, such processing of application for cash conversion shall be held in abeyance until the application for compromise/abatement is approved.
- For taxpayer-claimant with OTL upon verification of the AccD prior to final approval of the refund, the AccD shall: receive the entire docket, verify/confirm the findings and perform the necessary courses of action.
- MOMD shall review and evaluate the documents and certifications submitted by the concerned issuing offices. It shall verify the accuracy of the outstanding balance of the TCC applied for cash conversion and prepare a memorandum report bearing on the recommendation of the ACIR-CS for approval/disapproval by the DCIR-OG on the conversion of the TCC to case refund. In case of denial, the reasons for disapproval shall be stated. It shall then forward the docket on the approved applications to the Finance Service for processing of payment in accordance to RMO No. 38-2014.
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