Special InTAX: February 2022 Issue 1 | Volume 4
InTAX is an official publication of R.G. Manabat & Co.'s Tax Group
InTAX is an official publication of R.G. Manabat & Co.'s Tax Group
Bureau of Internal Revenue
The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 21-2022, 9 December 2021, to provide workaround procedures and guidelines in relation to the claiming of input VAT on purchases or importations of capital goods provided in Section 110 of the National Internal Revenue Code of 1997 (Tax Code), which was amended by Republic Act (R.A.) No. 10963 (“Tax Reform for Acceleration or Inclusion” or the “TRAIN Law”).
The following workaround procedures and guidelines are prescribed in the meantime that the BIR Form Nos. 2550Q and 2550M pertaining to Quarterly Value-Added Tax (VAT) Declaration and Monthly VAT Declaration, respectively, are undergoing revisions to effect Section 110 of the Tax Code, as amended:
BIR FORM NO. |
AFFECTED FIELDS |
DESCRIPTION |
REMARKS |
2550M (v. February 2007) |
Schedule 3(A) |
Purchases/Importation of Capital Goods (Aggregate Amount Exceeds P1 Million) |
Instead of the actual useful life in terms of months, place number “1” under columns “E” and “F” and encode the input tax claimed from purchase/s of capital goods exceeding P1M in Column “G” |
2550Q (v. February 2007) |
Schedule 3(A) |
Purchases/Importation of Capital Goods (Aggregate Amount Exceeds P1 Million) |
Instead of the actual useful life in terms of months, place number “1” under columns “E” and “F” and encode the input tax claimed from purchase/s of capital goods exceeding P1M in Column “G” |
Under EFPS and eBIR Forms, the balance of input tax to be carried onto the succeeding period is computed automatically by these systems. Hence, for purposes of implementing the provisions in the Tax Code of 1997, as amended, that effective 1 January 2022, all input tax on purchases of capital goods shall already be allowed upon purchase/payment, and shall no longer be deferred, the taxpayer shall indicate Roman numeral “1” as the estimated useful and recognized useful life and encode the total input taxes claimed from purchase/s of capital goods exceeding P1M under Column “G” in order to show a nil amount of '"Balance of Input Tax to be Carried to Next Period" under Column “H” of the monthly and quarterly VAT returns.
Further, taxpayers with unutilized input VAT on capital goods purchased or imported prior to 1 January 2022 shall be allowed to amortize the same as scheduled until fully utilized. Hence, Schedule 3(B) shall still be filled out.
However, if the depreciable capital good is sold/transferred within the period of five (5) years or prior to the exhaustion of the amortizable input tax thereon, the entire unamortized input tax on the capital goods sold/transferred can be claimed as input tax credit during the month/quarter when the sale or transfer was made.
Attached is the full text of the issuance.
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