Republic of the Philippines Department of Finance BUREAU OF INTERNAL REVENUE REVENUE REGION 2 Cordillera Administrative Region BIR Updates Applicable to Gov’t. Agencies/Offices/GOCCs /LGUs Atty. Eduardo T. Bajador Regional Director February 7, 2013 RR 18-2012 October 22, 2012 Regulations in the Processing of Authority to Print (ATP) Official Receipts, Sales Invoices, and Other Commercial Invoices using the On-line ATP System and Providing for the Additional Requirements in the Printing Thereof RR 18-2012 October 22, 2012 Highlights: When a public corporation or a local government unit acts in its proprietary character, it is regarded as having the rights and obligations of a private corporation. (Government Proprietary Function) For Gov’t. entities to be taxable, the ff requisites must concur: 1) the gov’t entity concerned must not be performing as essential government function; and 2) it must be engaged in similar business, industry, or activity as performed by other ordinary taxable corporations. All income realized from or received in the exercise of its proprietary functions shall be subject to income tax and business taxes in the same manner as other private corporations similarly situated. RR 18-2012 October 22, 2012 Policies and Guidelines - All persons, whether private or government, who are engaged in business shall secure/apply from the BIR an Authority to Print principal and supplementary receipts/invoices. National Government Agencies (NGAs), Government Owned and Controlled Corporation (GOCCs) and Local Government Units (LGUs) engaged in proprietary functions shall apply for ATP in the printing of their principal and supplementary receipts/invoices. RR 18-2012 October 22, 2012 - For newly registered taxpayers, the ATP shall be secured simultaneously with the Certificate of Registration (COR) - The taxpayer-applicant shall apply for an ATP and submit the required documents , using the On-line ATP System. - As a general rule, all applications for ATP of the Head Office (HO) and all its branches shall be done on-line. RR 18-2012 October 22, 2012 There shall be one application for ATP per establishment (HO or Branch) which shall be filed with RDO/LT Office concerned where the HO is registered. The approved ATP shall be valid only upon full usage of the inclusive serial numbers of principal and supplementary receipts/invoices reflected in such ATP or five (5) years from issuance of the same, whichever comes first. - Only BIR Accredited Printers shall have the exclusive authority to print principal and supplementary receipts/invoices. RR 18-2012 October 22, 2012 Transitory Provision All unused /unissued principal and supplementary receipts/invoices printed prior to the effectively of these Regulations, shall be valid until June 30, 2013. A taxpayer with expiring ATP for its invoices/receipts (principal and supplementary) shall apply for a new ATP not later than Sixty (60) days prior to actual expiry date. All unused/unissued principal/supplementary receipts/invoices shall be surrendered to the RDO where the taxpayer is registered on or beofre the 10th day after the validity peiord of the expired recipts/invoices for destruction. An inventory listing of the same shall also be submitted. RR 15-2012 December 3, 2012 Regulations on the Accreditation of Printers as a prerequisite to their Printing Services of Official Receipts, Sales Invoices and Other Commercial Receipts and/or Invoices RR 15-2012 December 3, 2012 Policies and Guidelines - the application for accreditation of printers shall be in the form a Sworn Statement duly executed by the applicant-printer. - all printers registered as engage in the business of printing principal and supplementary invoices/receipts shall be required to undergo the accreditation process. - all applications for accreditation of printers shall be submitted using the Online System of Accreditation of Printers - a list of all duly-accredited printers per RDO shall be posted and regularly updated at the BIR website (www.bir.gov.ph) for ready reference by the public. RR 15-2012 December 3, 2012 Policies and Guidelines – continue… only BIR Accredited Printers shall have authority to print principal and supplementary receipts/invoices the exclusive A taxpayer may file a petition for revocation of the printer’s Certificate of Accreditation in meritorious cases. - discovery of printing of spurious Ors/Sis shall be a ground for immediate revocation of Certificate of Accreditation/disaccreditation of the accredited printers. The discovery thereof shall be a cause of immediate business closure under “OPLAN KANDADO” and the filing of a criminal case against t he accredited printers. RR 15-2012 December 3, 2012 Policies and Guidelines – continue… - The Certificate of Accreditation shall be subject for revocation if the following findings have been discovered: a. Tampered Certificate of Accreditation b. Any misrepresentation on the Sworn Statement submitted by the printer c. Valid stop filer cases against printer for the last three (3) months of operation. d. Unsettled delinquent accounts against printer for the last three (3) months e. Requiring a minimum number of booklets from their client/customer f. Failure to submit reports as required g. Any violation(s) of the accredited printer on the policies and procedures RR 15-2012 December 3, 2012 Effectivity Clause: Effective once the online system for Accreditation of Printers becomes available upon release of a Revenue Issuance announcing its availability. RMC 68-2012 November 5, 2012 Condonation of Tax Liabilities of Local Water Districts (RA No. 10026) RMC 68-2012 November 5, 2012 Republic Act (R.A.) No. 10026 “All unpaid taxes or any portion thereof due from a local water district for the period starting August 13, 1996 until the effectivity date of this Act are hereby condoned by the government subject to the following conditions: 1) that the BIR, after careful review of the financial statements of a water district applying for condonation of taxes due, established its finanial incapacity, after providing for its amaintenance and operating expenses, debt servicing and reserved fund, to meet such obligations for the period stated herein. RMC 68-2012 November 5, 2012 Republic Act (R.A.) No. 10026 continue…. 2) that the water district availing of such condonation shall submit to Congress of the Philippines a program of internal reforms, duly certified by the local water utilities administration, that would bring about its economic and financial viability. NOTE: The condonation is not automatic and that a local water district must meet certain requirements before it can avail of the tax incentives. RMC 68-2012 November 5, 2012 APPLICATION The applicant must file with the Technical working Committee on abatement through the Assistant Commissioner – Collection Services stating the requirements prescribed under RMC 68-2012. PRESCRIPTION All applications for condonation must be filed on or before April 30, 2013. No application for condonation may be processed after the said date. RR 1-2013 January 23, 2013 Further Expands 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) RR 1-2013 January 23, 2013 ISSUANCE OF A NOTIFICATION LETTER The Bureau of Internal Revenue (BIR) shall issue a Notification Letter to all National Government Agencies, including their branches and extension offices located nationwide which have their own disbursement functions, to inform them that they are mandated to use the eFPS in filing the required returns and in paying the taxes due thereon. RR 1-2013 January 23, 2013 RESPONSIBILITY OF THE NATIONAL GOVERNMENT AGENCY’S The Head Office of the concerned NGA shall be responsible in providing the BIR with the list of all its branches/field or extension offcies located nationwide which have their own disbursement functions, with information as to their respective business addresses, agency codes and taxpayer identification numbers (TINs). RR 1-2013 January 23, 2013 ENROLLMENT FOR SYSTEM USAGE All NGAs notified are required to enroll first with the BIR’s eFPS facility and they shall be required to submit to the Revenue District Office where they are registered the names of two (2) authorized officers designated to file the required tax returns pursuant to Section 52 (A) of the Tax code (e.g. Head of Office and chief Accountant/Disbursement Officer). RR 1-2013 January 23, 2013 RETURNS COVERED BY ENROLLMENT NGAs mandated to file electronically thru the issuance of the Notification Letter shall file their tax returns via the eFPS, whether or not payment shall make use of eTRA. TIME OF FILING OF RETURNS AND PAYMENT OF TAX DUE Usually add five days on the due dates of manual filing of returns. For complete list of deadlines please refer to RR 1-2013 and RMC 23-2012 available on our website (www.bir.gov.ph). RMC 23-2012 February 14, 2012 Reiteration of the Officials and Employees of government Offices for the Withholding of applicable taxes on certain Income Payments and the Imposition of Penalties for Non-Compliance Thereof HISTORY EXECUTIVE ORDER N0 651 February 16, 1981 REQUIRING GOVERNMENT OFFICES, AGENCIES AND INSTRUMENTALITIES TO COMPLY STRICTLY WITH THE LAWS AND REGULATIONS ON WITHHOLDING OF TAXES EXECUTIVE ORDER N0. 651 ”directing all ministries, bureaus, offices, agencies and instrumentalities of the Philippines and provincial, city or municipal governments, as well as Government Owned and Controlled Corporations to comply strictly with the requirement for withholding and remittance of internal revenue taxes imposed by the NIRC.” “every ministry, agency, office, or instrumentality shall submit to the Bureau of Internal Revenue the name and position of the employee or officer charged with the duty to withhold and remit taxes, not later than sixty (60) days from the issuance of this Order and any change of designation thereafter shall be reported within ten (10) days from the date thereof.” “any employee or officer of any government office or agency, charged with the duty to withhold and remit internal revenue taxes within the time prescribe, is personally liable to surcharges and interests arising from delinquencies in withholding and remittance of taxes, in addition to a fine of not less than 5,000 pesos and an imprisonment of not less than one year nor more than two years.” WHO ARE THE RESPONSIBLE GOVERNMENT OFFICIALS (RMO 8-2003 – March 3, 2003) 1) Local Government Units: a) Provinces - Governor, Provincial Treasurer and Provincial Accountant b) Cities - Mayor, City Treasurer and City Accountant c) Municipalities - Mayor, Municipal Treasurer and Municipal Accountant d) Barangays - Barangay Captain and Barangay Treasurer WHO ARE THE RESPONSIBLE GOVERNMENT OFFICIALS (RMO 8-2003 – March 3, 2003) 2) National Government Agencies – Heads of Offices ( officials holding the highest position) and Chief accountants or other persons holding similar positions in departments, bureaus, agencies and instrumentalities officially designated as such by the head office. 3) Government Owned or Controlled Corporation (GOCC) – Heads of Offices (officials holding the highest position) and chief accountants or other person holding similar positions officially designated as such by the head of office. 4) Other Government Offices – Heads of Offices (official holding the highest position) and chief Accountants or other persons holding similar positions officially designated as such by the head of office. WHO ARE THE RESPONSIBLE GOVERNMENT OFFICIALS (RMO 8-2003 – March 3, 2003) 5) Government Offices with Decentralized accounting System and/or Branches/Regional Offices/District Offices Registered with their respective Revenue district Offices Heads of such Offices/Regional/District Offices (officials holding the highest position) and Chief Accountants or other persons holding similar positions officially designated as such by the head of office. (example: a) in case of BIR Regional Offices, it shall be the Regional Director and Chief, Finance Division and b) in case of DECS, the Regional Director and Chief, Budget & Finance Division). RESPONSIBILTY OF AGENCIES/OFFICES/GOCC’s/LGU’s (Memorandum – ACIR Collection Service July 22,2004) We are all directed to: - identify and submit an updated name of personnel charged with the duty to deduct, withhold and remit taxes withheld on Compensation, Expanded, Final and Gov’t Money Payments (GMP) on Percentage and Value added Tax including Franchise Tax. - submit the names of the incumbents of such positions to the Commissioner of Internal Revenue thru the Revenue District Office within thirty (30) days from receipt of such notification. Any change of such incumbents shall be reported, and names of the replacement submitted within ten (10) days from such change or replacement. Note: The designated official shall be personally liable for the additions to the tax prescribed in Chapter 1, Title X of the National Internal Revenue Code, as amended, for violations of withholding tax laws and regulations. RESPONSIBILTY OF AGENCIES/OFFICES/GOCC’s/LGU’s (Memorandum – ACIR Collection Service July 22,2004) ANNEX “B-1” REGISTRATION OF OFFICIAL DESIGNATED AS WITHHOLDING AGENTS FOR THE GOVERNMENT PURSUANT TO EXECUTIVE ORDER NO. 651 ANNEX “B-1” REGISTRATION OF OFFICIAL DESIGNATED AS WITHHOLDING AGENTS FOR THE GOVERNMENT PURSUANT TO EXECUTIVE ORDER NO. 651 ____________ Date The Commissioner Bureau of Internal Revenue National Office Bldg., Diliman Quezon City ATTENTION: The Revenue District Officer Revenue District Office No. 55 San Pablo City Gentleman: In compliance with Executive Order No. 651, as implemented by Revenue Regulations No. 1-87, as amended by Revenue Regulation Nos. and 10-97, we are submitting the names of officials designated as withholding agents who are charged with the duty to withhold and remit taxes for: _____________________________________ ______________________________ (NAME OF GOVERNMENT OFFICE) (ADDRESS) NAME OF WITHHOLDING AGENT Name: __________________________________ Address: __________________________________ TIN: ___________________________________________ POSITION A. B. Name: __________________________________ Address: __________________________________ TIN: ___________________________________________ DATE OF DESIGNATION: ________________________________ Head of Agency Mayor Governor Chief, Accountant City Treasurer Municipal Treasurer Provincial Treasurer Barangay Captain Barangay Treasurer MONTH DAY YEAR These officials are personally liable for the additions to the tax prescribed in Chapter 1, Title X of the National Internal Revenue Code as amended. Very truly yours, __________________________________ SIGNATURE OVER PRINTED NAME ______________________ Position Responsibilities of the Government Officials/Employees as Withholding Agents (RMC 23-2012) 1. To register the government Office as withholding agent 2. To require employees to submit the duly accomplished Application for Registration (BIR Form 1902) for newly hired employees and BIR Form 2305 for updates within ten (10) days upon commencement of employment or after the change in exemption. 3. To withhold the correct amount of Tax 4. To remit on time taxes with held. Responsibilities of the Government Officials/Employees as Withholding Agents (RMC 23-2012) 5. To issue the corresponding certificates of taxes withheld 6. To do the year-end adjustment 7. To timely file with the BIR, the annual information return and alphabetical lists of employees/payees, if applicable. Responsibilities of the Government Officials/Employees as Withholding Agents (RMC 23-2012) PENALTIES 1. Additions to the Tax – Interest, surcharges, compromise penalties (Sec. 251, 249, 248, 252, 275) CRIMINAL LIABILITIES Sec. 255, 256, 272 and 275 of NIRC RR 5-2012 April 2, 2012 Binding Effect of Rulings Issued Prior to Tax Reform Act of 1997 RR 5-2012 April 2, 2012 COVERAGE - All rulings issued prior to January 1, 1998 will no longer have any binding effect. Consequently , these rulings cannot be invoked as basis for any current business transaction/s. Neither can these rulings be used as basis for securing legal tax opinions/rulings. REPEALING CLAUSE - All existing rules and regulations or parts thereof which are inconsistent with the provisions of these Regulations are hereby amended , repealed or revoked accordingly. RMC 22-2012 Clarification on the Implementation of RR 5-2012 RMC 22-2012 April 2, 2012 1. All BIR Rulings issued prior to Jan 1, 1998 are not to be used as precedent by any taxpayer as a basis to secure rulings for themselves for current business transaction/s or in support of their position against any assessment. 2. All BIR rulings issued prior to Jan 1, 1998 are not to be used by any BIR action lawyer in issuing new rulings for request for rulings involving current business transaction/s. RMC 22-2012 April 2, 2012 3. However, BIR Rulings issued prior to Jan 1, 1998 remains to be valid but only: a. To the taxpayer who was issued the ruling; and b. Covering the specific transaction/s which is the subject of the same ruling 4. BIR Rulings issued prior to Jan 1, 1998, shall remain valid as mentioned above, unless expressly notified of its revocation or unless the legal basis in law for such issuance has already been repealed/amended in the current Tax Code.