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www.paguiodumayasassoc.com
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Contents
Recent BIR Issuances
1) Amending the provisions of RR No. 11-2018, Particularly Sections 2 and 14 Relative to
Withholding of Income Tax.
2) Revises the Policies, Guidelines and Procedures in Registering New Business Prescribed
Under Revenue Memorandum Order No. 6-2018.
3) Circularizes Memorandum No. 016-2018 Regarding the Impositions of Surcharge Interests and
Compromise Penalty for Filing of an Amended Tax Return.
4) Circularizes the Revised BIR Form No. 2551Q (Quarterly Percentage Tax Return).
5) Circularizes the New and Revised BIR Forms affected by the TRAIN Law.
6) Advises taxpayers to disregard the penalties computed by the Electronic Filing and Payment
System (eFPS) in BIR Form Nos. 1602 and 1603 of the eFPS.
SEC Recent Issuances/Decisions
1) SEC En Banc Case Opinion No. 04-15-371—Non-filing of AFS during years when a corporation
was not operating.
2) MC No. 08 s 2018—(1) Shareholder’s Approval on Any Change/s in the Company’s External
Auditor (2) Audit Committee Composed Entirely of Board Members.
3) MC No. 07 s 2018—Amendment to Rule 38.2.7 of the 2015 Implementing Rules and Regulation
of the Securities Regulation Code (SRC).
4) MC No. 06 s 2018—Adoption of New Accounting Standards and Amendments to Existing
Accounting Standards.
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The deadline for the submission of the Income Payor's Sworn Declaration to the BIR is on or before January 31 of each year, or fifteen days following the month when a new income recipient has submitted the payee's sworn declaration.
The deadline set by RR No. 14-2018 is for the current year (2018) due to the transitory stage of the newly passed law or the TRAIN Law.
Revenue Memorandum Order
No. 19-2018
Revises the Policies, Guidelines and Procedures in Registering New Business Prescribed Under Revenue Memorandum Order No. 6-2018.
All new business registrants shall file an Application for Registration with complete documentary requirements to the Revenue District Office (RDO) having jurisdiction over the place of business or residence of the taxpayer, and shall complete its registration with the Bureau of Internal Revenue (BIR) at times required by law as follows:
On or before the commencement of business; or
Before payment of any tax due; or
Before or upon filing of any applicable tax return, statement or declaration.
New business registrant may proceed to registration of books of accounts after securing Certificate of Registration (COR) and Authority to Print (ATP) within thirty (30) calendar days from the date of business registration with the BIR.
Revenue Regulations No. 14-2018
Amending the provisions of RR No. 11-2018, Particularly Sections 2 and 14 Relative to Withholding of Income Tax.
AMENDATORY PROVISIONS -
The provisions of Sections 2 and 14 of RR 11- 2018, are hereby amended as follows:
Still, the deadline for submission of the Income Payee's Sworn Declarations to the Income Payors should be on or before January 15 of each year, or at least prior to the initial payment of the professional fees/commissions/talent fees, etc.
RR No. 11-2018 RR No. 14-2018
(Amended Provisions) Section 2: AMENDATORY PROVISIONS Individual Payee: • If the gross income for the current year did not exceed Php 3, 000,000 -Five Percent (5%) • If the gross income is more than Php3,000,000 -Ten Percent (10%)
Individual Payee: • If the gross income for the current year did not exceed Php3,000,000 -Five Percent (5%) • If the gross income is more than Php3,000,000 or VAT Registered regardless of amount -Ten Percent (10%)
Section 4: TRANSITORY PROVISIONS Submission of "Income Payee's Sworn Declaration of Gross Receipts/Sales" together with a copy of the Certificate of Registration (COR) to his/her income payor/ withholding agent . –April 06, 2018
Submission of "Income Payee's Sworn Declaration of Gross Receipts/Sales" together with a copy of the Certificate of Registration (COR) to his/her income payor/ withholding agent. –April 20, 2018
Submission of Income Payor’s Sworn Declaration together with the list of payees who have submitted their Sworn Declaration -April 20, 2018;
Submission of Income Payor’s Sworn Declaration together with the list of payees who have submitted their Sworn Declaration -April 30, 2018;
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New business registrant with existing
Taxpayer Identification Number (TIN) issued
by the BIR or secured thru the Department of
Trade and Industry’s - Philippine Business
Registry (DTI-PBR) or Securities and
Exchange Commission (SEC) may pay the
business Registration Fee (RF) before going to
the concerned RDO for registration, thru any of
the following:
1) Authorized Agent Banks (AABs);
2) ePayment channels of AABs (e.g. use of
either online, debit/credit/prepaid card); and
3) Mobile payment thru GCash.
Suspended payment of RF (BIR Form
No. 0605) due to late uploading of the
pre- generated TIN from SEC or TIN
generated from DTI-PBR shall be requested by
the concerned RDO for data fix.
The RDO shall follow the “Single
Window” Approach in receiving the application
for registration and in releasing of certificates
and permits in the same counter where the
taxpayer submits the application.
A “New Business Registrants Counter
(NBRC)” or special lane for new business
registrants shall be established in each RDO to
be manned by a “New Business Registrant
Officer (NBRO)” designated by the Revenue
District Officer. The NBRO shall manage the
said counter or special lane, receive the
application for registration of new business
registrants, assist the taxpayer, release the
COR and ATP principal receipts/invoices and
shall exercise utmost courtesy to the new
business registrants at all times. There shall be
an Officer of the Day (OD) coming from the
Assessment Section and a Revenue Collection
Officer (RCO) from the Collection Section who
shall assist the NBRO in the processing of
application.
The Revenue District Officer shall
assign the NBRO or OD to determine ...
...applicable tax type, Philippine Standard Industrial Classification and Alphanumeric Tax Code by filling out the application form and compute other tax liabilities or penalty for late registration, if applicable. All new business registrants shall transact only at the NBRC manned by the NBRO.
The RDO may establish more than one NBRO to accommodate voluminous applications for registration of new business; provided, that the new business registrant shall only transact with and receive the certificates and permits in the same counter where the application was submitted.
The NBRO shall accept the payment of business RF and any applicable computed tax or penalty on registration, and forward the payment to the RCO who is assigned at the Client Support Section (CSS) area or within the same area.
The Revenue District Officer shall authorize the RCO to process and issue the electronic Official Receipt (eOR)/electronic Revenue Official Receipt (eROR) using Mobile Revenue Collection Office System (MRCOS), or a manual OR/ROR, as the case may be, for the payment of a) Registration Fee; b) Documentary Stamp Tax; c) Certification Fee; and d) Penalty on late registration.
For purposes of this Order, the pertinent provisions of RMO No. 4-2007 shall not apply and, therefore, the above payments shall only be made to the authorized RCO. In case of unavailability or malfunction of the MRCOS facility, the applicable provisions of RMO No. 8-2013 shall be strictly complied with for the issuance of the manual OR/ROR. An RCO shall be assigned in the CSS area or within the same area to process the payment using the MRCOS thru the Collection Officer Receipting Device (CORD) or web-based application in the desktop Personal Computer, as the case may be.
All new business registrants shall submit a final and clear sample layout of principal receipts/invoices upon submission of application for registration. However, ...
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if the new business registrants have no final
and clear sample layout of principal receipts/
invoice presented/submitted during their
application for registration, they can choose
from the sample layouts of principal receipts/
invoices available in the RDO. Such sample
shall be considered final and cannot be altered.
Taxpayers may use or change their own
desired format and layout of principal receipts/
invoices for the subsequent application of ATP.
A List of Accredited Printers of receipts/
invoices shall be posted at a conspicuous place
in the CSS Area, including sample layouts of
principal receipts/invoices as reference to the
new business registrants.
All Accredited Printers of receipts/
invoices and/or its agents/representatives shall
not require a minimum number of booklets for
printing for its customers. In case of violation of
this provision, the said printers shall be
subjected to the revocation of its accreditation
pursuant to Revenue Regulations No. 15-2012.
The RDO shall ensure that the new business
registrants shall be issued their CORs and
ATPs after compliance with the documentary
requirements and payment of RF.
The RDO shall subject all
newly-registered business taxpayers to ocular
inspection/Taxpayer Compliance Verification
Drive (TCVD) for purposes of verifying their
business existence within thirty (30) calendar
days from the date of registration, and shall
maintain a separate log sheet for the new
business registrants.
The Assistant Revenue District Officer
(ARDO) shall approve and sign the COR and
ATP pursuant to Revenue Administrative Order
No. 5-2017. In case of unavailability or official
absence of the ARDO, the Revenue District
Officer shall assume the authority to approve
and sign the said documents. Further, in the
absence of both officials, this authority may
be ...
...delegated by the Revenue District Officer
to the CSS Chief thru an office order or
memorandum.
The CSS Chief shall supervise and
oversee the procedures in implementing the
“Single Window” Approach. The Queuing
System shall include the prescribed frontline
services/names of transactions. The
Revenue District Officer may, if
circumstances require, have two (2) slots
customized in their Queuing System to
address their specific needs.
Revenue Memorandum Circular
No. 21-2018
Circularizes Memorandum No. 016-2018
Regarding the Impositions of Surcharge
Interests and Compromise Penalty for Filing
of an Amended Tax Return.
An interest of twenty percent (20%)
and penalty equivalent to twenty-five percent
(25%) of the amount due shall be imposed
on failure to file any return and pay the tax
due thereon on the date prescribed or failure
to pay the full or part of the amount of tax
shown on any return. Thus, in an
amendment of return where an additional tax
is due per amended return, 20% interest and
25% penalty shall be imposed based on the
additional tax to be paid per amended return.
Compromise penalties are only
amounts suggested by the BIR in settlement
of criminal liability for violations committed by
taxpayers, the payment of which is
consensual in nature, and may not therefore
be imposed or exacted on the taxpayer.
Thus, in the event that a taxpayer refuses to
pay the suggested compromise penalty, the
violation shall be referred to the appropriate
office for criminal action.
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Revenue Memorandum Circular
No. 26-2018
Circularizes the Revised BIR Form No.
2551Q (Quarterly Percentage Tax Return).
The revised BIR Form No. 26-2018Q (Quarterly Percentage Tax Return), is already available under the BIR Forms-VAT/Percentage Tax Returns section of the BIR website. ( www.bir.gov.ph )
The newly revised BIR Form No. 2551Q is not yet available in eBIRForms and in eFPS.
Thus, taxpayers shall file and/or pay through the following mode:
Manual Form
The newly-revised BIR Form No. 2551Q is already available under the BIR Forms- VAT/Percentage Tax Returns section of the BIR website (www.bir.gov.ph).
Manual filers shall download the PDF format of BIR Form No. 2551Q, print it and fill out the applicable items/fields.
Taxable amount to be indicated in the Quarterly Percentage Tax Return shall be the total gross sales/receipts for the quarter
Payment of the Percentage Tax due thereon shall be made thru:
Manual Payment-
Authorized Agent Bank (AAB) located within the territorial jurisdiction of the Revenue District Office (RDO) where the taxpayer is registered
In places where there are no AABs, the return shall be filed and the tax due shall be paid with the concerned Revenue Collection Officer (RCO), thru the Mobile.
Revenue Collection Officers System (MRCOS) facility, under the jurisdiction of the RDO.
Online Payment-
thru GCash Mobile Payment
Landbank of the Philippines, Linkbiz Portal, for taxpayers who have ATM account with LBP and/or holders of Bancnet ATM/Debit Card
DBP Tax Online, for holders of VISA/Master Credit Card and/or Bancnet ATM/Debit
5) In case manual filers paid the Percentage Taxes due for the first and second months of the quarter using BIR Form No. 2551M, taxpayer still needs to file the Quarterly Percentage Tax Return (BIR Form No. 2551Q) and indicate in the return the total gross sales/receipts for the quarter and the total payment made in the first two (2) month/s. The payment/s made shall be reflected in Item No. 17-Other Credit/Payment Made of the newly-revised BIR Form No. 2551Q.
6) If manual filers also paid the Percentage Tax due for the third month using BIR Form No. 2551M, taxpayer still needs to file the Quarterly Percentage Tax Return (BIR Form No. 2551Q) and indicate in the return the total gross sales/receipts for the quarter and the total payments made for the three (3) month/s in Item No. 17- Other Credit/Payment made of the newly-revised BIR Form No. 2551Q.
If the computation above resulted to a payable amount, the taxpayer shall pay the tax due thereon. If the result is no payment/overpayment, the existing procedure for “No Payment Return” shall be followed, which is to file thru the use of eBIRForms. Use the enhanced old BIR Form No. 2551Q in Offline eBIRForms Package v7 to file the ‘No Payment Return” and, as a work-around procedure, reflect the payment/s made in Item No. 20A-Creditable Percentage Tax Withheld per BIR Form No. 2307.
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Electronic Bureau of Internal Revenue
Forms (eBIRForms)
1) eBIRForms filers shall use the enhanced old BIR Form No. 2551Q in Offline eBIRForms Package v7, which contained all the Alphanumeric Tax Codes (ATCs) enumerated in BIR Form No. 2551M, in filing the return.
2) Taxable amount to be indicated in the Quarterly Percentage Tax Return shall be the total gross sales/receipts for the quarter.
3) In case eBIRForms filers already paid the Percentage Taxes for the first and/or second and/or third month of the quarter, as a work-around procedure, payment/s made are to be reflected in Item No. 20A-Creditable Percentage Tax Withheld per BIR Form No. 2307.
4) Payment of the Percentage Tax due thereon shall be made thru manual payment or online payment.
Electronic Filing and Payment System
(eFPS)
1) eFPS Filers shall use the enhanced old BIR Form No. 2551 in the system, which con-tained all the ATCs enumerated in BIR Form No. 2551M, in filing the return.
2) Taxable amount to be indicated in the Quarterly Percentage Return shall be the total gross sales/receipts for the quarter.
3) In case eFPS filers already paid the Percentage Taxes for the first and/or second and/or third month of the quarter, as a work-around procedure, payment/s made are to be reflected in Item No. 20A-Creditable Percentage Tax Withheld per BIR Form No. 2307.
4) After efiling, proceed to online payment by clicking the proceed to payment button and pay the Percentage Tax due.
Revenue Memorandum Circular No.
27-2018
issued on April 27, 2018circularizes and prescribes the use of the new and revised BIR Forms affected by the Tax Reform for Acceleration and Inclusion (TRAIN) Law, to wit:
BIR Form No.
BIR Form Name
Availability of the New/
Revised Return
1. 1601-EQ Quarterly Remittance Return of Creditable Income Taxes Withheld (Expanded)
Manual Return, eBIRForms, eFPS
2. 1601-FQ Quarterly Remittance Return of Final Income Taxes Withheld
Manual Return, eBIRForms, eFPS
3. 1602Q Quarterly Remittance Return of Final Taxes Withheld on Interest Paid on Deposits and Deposits Substitutes/Trusts/Etc.
Manual Return
4. 1603Q Quarterly Remittance Return of Final Income Taxes Withheld on Fringe Benefits Paid to Employees Other Than Rank-and-File
Manual Return
5. 1601-C Monthly Remittance Return of Income Taxes Withheld for Compensation.
Manual Return
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The new Manual Returns are already available
under the BIR Forms- Payment/Remittance
Form section of the BIR website
(www.bir.gov.ph), for downloading and
printing. Only the new BIR Form Nos. 1601-
EQ and 1601-FQ are available in the Offline
eBIRForms Package v7 and included in the
BIR’s Electronic Filing and Payment System
(eFPS).
The new tax returns shall be used in filing
and remitting the creditable/final Income Taxes
withheld for the quarter. The guidelines to be
followed under the manual and electronic (via
eBIRForms and eFPS) filing of said tax
returns are specified in the Circular.
Revenue Memorandum Circular No. 28-2018
Issued on April 30, 2018 advises taxpayers to
disregard the penalties computed by the
Electronic Filing and Payment System (eFPS)
in BIR Form Nos. 1602 (Monthly Remittance
Return of Final Income Taxes Withheld on
Interest Paid on Deposits and Yield on
Deposit Substitutes/Trusts/Etc.) and 1603
(Quarterly Remittance Return of Final
Income Taxes Withheld on Fringe Benefits
Paid to Employees Other than
Rank-and-File) of the eFPS, provided that the
payment shall be made on or before the
updated deadline under the Tax Reform for
Acceleration and Inclusion (TRAIN) Law.
The reason why eFPS is computing
the said penalties is that the deadline in the
eFPS is still being updated, to wit:
BIR Form No.
Old Deadline
Updated Dead-line under the TRAIN Law
1602 On or before
the 10th day of
the following month in which withholding is made
not later than the last day of the month following the close of the quarter during which withholding was made 1603 On or before
the 10th day
of the month following the calendar quarter in which the fringe benefits were granted.
Any filing and/or payment beyond
the deadline shall be subject to the
applicable penalties imposed/computed by
the eFPS from updated due date until
actually paid.
The reason why eFPS is computing
the said penalties is that the deadline in
the eFPS is still being updated, to wit:
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A
Adoption of New Accounting Standards
and Amendments to existing Accounting
Standards
Philippine
Financial
Reporting
Standard
(PFRS) 16,
Leases
is
(FRSC)
(IFRS) 15,
recognition
of PFRS 16 is
Disclosure
is
A
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To all Publicly-Listed Company
Subject
1) Shareholders approval any change/s in the company External Auditor
2) Audit Committee composed entirely board members
1)
2)
SEC En Banc Case No. 04-15-371
Non-filing of AFS during years when a corporation was not operating
D E C I S I O N
This is an Appeal from the Letter-Order of the COMPANY REGISTRATION AND MONITORING-DEPARTMENT (CRMD) dated 7 May 2014, directing CLA-RO MERCHANDISING CORPORATION (CLA-RO) to file its Annual Financial Statements for the years 2006 to 2014, despite the latter's explanation that it had already ceased all business operations since October 2005, otherwise it shall be liable for Fine, viz,
This refers to your Letter dated 21 April 2014 informing the Commission of [CLA-RO]'s cessation of business since 2006 and that the Commission has been consistently (and yearly] furnished the Affidavit of No Business Operations duly filed with the BIR.
Please be advised that [CLA-RO], despite its non-operation shall still comply with the annual submission of the financial statements within 120 days from end of fiscal year. Corresponding fines shall be assessed upon such non/late filing.
CLA-RO argued that "doing business" is condition sine qua non for the requirement of Annual Financial Reports under Section 141of the Corporation Code,
Sec. 141. Annual report of corporations. - Every corporation, domestic or foreign, lawfully doing business in the Philippines shall submit to the Securities and Exchange Commission an annual report of its operations, together with a financial statement of its assets and liabilities, certified by any independent certified public accountant in appropriate cases.
Because it admits to non-operation for those years, CLA-RO argues that it cannot be said to be "doing business" and therefore exempt from filing,
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CLA-RO, because of the world economic crisis, which also greatly affected the Philippines, retired its business in October 2005, with reservation to re-open business [at] some future, better time. After it retired its business, CLA-RO stopped all business activities, laid-off all employees, conducted no business transactions, and completely stopped its sales transactions. It has not done any pursuit of the purposes for which CLA-RO was organized.
Since it does not do any activity for which it was organized, CLA-RO is not doing business. CLARO is covered by the requirement to file the annual audited financial statements under Section 141 of the Corporation Code.
It is not logical or reasonable to require CLA-RO, which has suspended its operation and totally stopped business activities, to file yearly financial statements, audited by an independent certified public accountants.
On the other hand, the CRMD contends that:
Please do not be confused with the term "doing business" as mentioned in Section 141 of the Code as mere undertaking of commercial operations. It is worthwhile stressing that [the] term also connotes administrative operation of a corporation. As you even admitted, your corporation has submitted general information sheets to the Commission and maintains a President who oversees its affairs. Suffice [it] to say, while commercially dormant, it is still in operation.
Until a decree of revocation is issued by the Commission, insofar as the Commission is concerned, the corporation is still registered and operating, and therefore subject to the requirements of the Commission 6.
Upon perusal of the Commission's records/ the CLA-RO filed a 2016 General Information Sheet (GIS) and has evidently resumed operations.
On 5 February 2018, the En Banc issued an Order to Produce Documents, the dispositive portion of which reads:
WHEREFORE, appellant CLA-RO MERCHANDISING
CORPORATION is directed to submit to the En Banc within five (5) Days of receipt the following documents:
Affidavits of No Business Operations filed annually, with evidence of receipt by the BIR from 2006-2014 (total of 9 affidavits), and
Income Tax Returns filed annually, with evidence of receipt by the BIR from 2006-2014 (total of 9 tax returns).
On 19 February 2018, CLA-RO submitted its COMPLIANCE (in the form of a Letter dated 8 February 2018, signed by CLA-RO President Glicerio S. Ferrer, addressed to SEC General Counsel Camilo S. Correa), accompanied by (1) Affidavits of No Business Operations from 2006- 2014, and (2) Income Tax Returns from 2006-2014.
Hence, this Appeal.
In a SEC Opinion dated 2 January 1973, the Commission laid-down this policy, which is still relied upon today:
You are inquiring about the liability of a corporation xxx to the Securities and Exchange Commission, where that corporation has "ceased to operate xxx"
Any suspension of business operation xxx must be reported to the SEC by the corporation.
In order to exempt the corporation from filing its annual financial statements with this Commission, it should file in duplicate, an affidavit of its manager stating the fact of suspension of the corporate business and the cause thereof.
This is clearly the justification for the annually-filed Affidavit of No Business Operations that CLA-RO has been furnishing the Commission. Although this pol icy is based on the repealed Section 19 of the Corporation Law, it is not inconsistent with the phrase "lawfully doing business" found in the present Section 141 of the Corporation Code, which may be construed as a condition sine qua non for the requirement of Annual Financial Statements.
However, on 16 February 20 12, the Commission released Financial Reporting Bulletin (FRB) 005, which mandates that, "If (a company covered by SRC Rule 68 as amended) has had no ...
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operations for the last two (2) years, the income statement need not be included in the audited financial statements." SRC Rule 68 covers, among others, "stock corporations with paid-up capital of P50,000 or more." Thus, from 2012 onwards, even though exempt from filing the Income Statement, non -operating companies that are covered by SRC Rule 68 and FR B 005 must still file the annual Audited Financial Statements, containing its Balance Sheet.
In its AFS dated 31 December 2005, just before its non-operation, CLA-RO had Paid-up Capital in the amount of P900.000 and is thus covered by SRC Rule 68 and FRB 005.
WHEREFORE, premises considered, the En
Banc rules as follows:
For the years 2006-2011, since it was able to submit Affidavits of No Business Operations to the Commission in t h e years prior to the release of FRB 005, CLA-RO is exempted from the requirement to file annual financial statements.
For the years 2012-2014, however, CLA-RO is only exempted from submitting the Income Statement and must still submit its annual Audited Financial Statements, containing its Balance Sheet. This matter is referred to CRMD for purposes of computing the appropriate penalty, reckoned from the time of non-compliance up to the present.
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Tax Supervisor
Senior Tax Specialist
Managing Partner
Tax Specialist
FLOYD C. PAGUIO KEN JOHN B. ASADON
AILEEN P. MELCHOR AIRA IZA G. GALLEGOS
EDITORIAL BOARD Unit 3207 Cityland Pasong Tamo
Condominium, Pasong Tamo St.,
Barangay Pio del Pilar, Makati City
Telephone: (+632) 238-0505
Email:
Floyd C. Paguio:
Ken John B. Asadon:
Aileen P. Melchor
Aira Iza G. Gallegos:
We are a team of Certified Public Accountants,
who aim to be the accounting firm of choice for
business entities in terms of:
Audit and Assurance
Taxation
Business Process Outsourcing
Management Consultancy