Special InTAX: August 2022 Issue 2 | Volume 2

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

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Bureau of Internal Revenue


The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 120-2022, 18 August 2022, to prescribe additional guidelines and procedures on the manner of payment of penalty for violations incurred by Registered Business Enterprises (RBEs) in the Information Technology-Business Process Management (IT-BPM) sector on the conditions prescribed regarding work-from-home (WFH) arrangement for the period 1 April 2022 until 12 September 2022.


The salient points of the RMC are as follows:


Result Penalty
For a period of non-compliance of at least one day

Suspension of income tax incentives for the month when the violation took place

25%/20% regular income tax on the taxable income for the month, excluding any Net Operating Loss Carry Over (NOLCO)


The penalty shall be paid using BIR Form No. 0605 with details below on or before the due date prescribed for the filing and payment of the quarterly income tax, subject to adjustment upon the filing of the annual income tax return:



Form Field Tax Type ATC

605

Voluntary Payment, “Others”

Indicate in the field “Penalty pursuant to FIRB Res. No. 017-22"

IT

MC 200

The RBEs with violation shall continue to file their Quarterly Income Tax Return (QITR or BIR Form No. 1702Q) and Annual Income Tax Return (AITR or BIR Form No. 1702-EX for those with Income Tax Holiday and BIR Form No. 1702-MX for those enjoying the Gross Income Tax incentive or those with mixed transactions) and pay following their usual procedure of computation of the tax due as if no violation was committed.

An additional schedule for the computation of the penalty on the WFH arrangement must be attached to BIR Form No. 0605, to present the actual tax due. For the AITR, the information pertaining to allowable deductions pursuant to existing tax laws and regulations (i.e., Part VI-Schedule 1 for BIR Form No. 1702-EX and Part IV-Schedule 5 for BIR Form No. 1702-MX).

There are sample computations of penalty provided in the RMC, for reference.

Further guidelines and procedures for violations during the last quarter of taxpayers adopting the fiscal year of reporting are also provided in the RMC.

The RMC shall take effect immediately and remain in force until 12 September 2022 pursuant for FIRB Res. No.017-22.

Attached is the full text of the issuance.


RMC No. 120-2022

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