ACYTAXN: Compliance Requirements

Entities Required to File an Income Tax Return

Include the following:

1) Individuals

a) Resident citizen;

b) Nonresident citizen on his income derived from sources within the Philippines;

c) Resident alien on income derived from sources within the Philippines;

d) Nonresident alien engaged in trade or business or exercise of profession in the Philippines;

2) Corporations (including business partnerships)

a) Domestic corporation;

b) Resident foreign corporation on income derived from sources within the Philippines;

3) Estates and trusts

4) General professional partnerships

Individuals Required to File an Income Tax Return

Include the following:

1) Individuals deriving compensation from two or more employers concurrently or successively at anytime during the taxable year;

2) Employees deriving compensation income, regardless of the amount, whether from a single or several employers during the calendar year, the income tax of which has not been withheld correctly (i.e., tax due is not equal to the tax withheld) resulting to collectible or refundable return.

3) Individuals deriving other non-business, non-profession-related income in addition to compensation income not otherwise subject to final tax;

4) Individuals receiving purely compensation income from a single employer, although the income tax of which has been correctly withheld, but whose spouse is required to file income tax return (see 1 to 3 above);

5) Non-resident alien engaged in trade or business in the Philippines deriving purely compensation income, or compensation income and other non-business, non-profession-related income.

Entities Not Required to File an Income Tax Return

Include the following:

1) Individuals

a) An individual whose gross income does not exceed P250,000

b) Individual taxpayer receiving purely compensation income, regardless of amount, from only one employer in the Philippines for the calendar year, the income tax of which has been withheld correctly by the said employer;

c) An individual whose sole income has been subjected to final withholding tax;

d) A minimum wage earner as defined under Section 22 (HH) or an individual who is exempt from income tax pursuant to the provision of the Tax Code and other laws, general or special;

e) An individual citizen of the Philippines who is working and deriving income solely from abroad as an "Overseas Contract Worker", as provided under Section 23 (C) of the Tax Code, or "Overseas Filipino Worker" as defined under Section 3 (G) of R.A. No. 11641, otherwise known as "Department of Migrant Workers Act".

2) Nonresident foreign corporations;

3) Estates and trusts where the gross income does not exceed P250,000

Filing of Return

It refers to the act of accomplishing and submitting the prescribed tax return, electronically or manually, to the Bureau of Internal Revenue (BIR), or through any authorized agent bank (AAB) or authorized tax software provider (ATSP), for specific tax returns as approved by BIR.

Payment of Tax or Remittance of Tax

It refers to the act of delivering the amount of tax due or withheld, either electronically or manually, to the BIR, or through any AAB or ATSP, for specific tax returns as approved by BIR.

Place of Filing of Income Tax Return

Except in cases where the Commissioner otherwise permits, the return shall be filed with:

1. Any authorized agent bank,

2. Revenue District Office through Revenue Collection Officer, or

3. Authorized tax software provider.

Authorized Agent Bank

It refers to financial institutions that are accredited to collect the payment of internal revenue taxes on BIR's behalf.

Revenue Collection Officers

Refer to the BIR officers tasked to accept payments from taxpayers under limitations and remit the tax collected within the prescribed period.

Authorized Tax Software Provider

It refers to an individual or organization whose business is to render electronic tax filing and/or tax payment services to taxpayer-clients by offering third-party solutions tested and certified by BIR, that is, an electronic tax returns filing and/or payment solution

Time of Payment of Income Tax

Income tax shall be paid by the person subject to tax at the time the return is filed.

Installment Payment of Tax of Taxpayers Other than Corporations

When the tax due is in excess of Php 2,000 the taxpayer other than a corporation may elect to pay the tax in two (2) equal installments:

1) First installment is paid at the time the return is filed;

2) The second installment is paid on or before October 15 following the close of the calendar year.

True

(True or False) Non-eFPS filers specifically Accredited Tax Agents/Practitioners, Accredited Printers of Principal and Supplementary Receipts/Invoices and One-Time Transaction (ONETT) taxpayers shall mandatorily use the eBIRForms in filing all of their tax returns. They may opt to submit their tax returns manually using the eBIRForms Offline Package at their respective RDOs or electronically through the use of the Online eBIRForms System. The ATAs who are preparing and filing tax returns in behalf of their clients are likewise mandated to use the eBIRForms.

Mandatory Coverage

Only those non-eFPS filers are covered by the Regulations:

1) Accredited Tax Agents/Practitioners and all its client-taxpayers;

2). Accredited Printers of Principal and Supplementary Receipts/Invoices;

3) One-Time Transaction (ONETT) taxpayers;

4). Those who shall file a "No Payment" Return;

5) Government-Owned or -Controlled Corporations (GOCCs);

6) Local Government Units (LGUs), except barangays; and

7) Cooperatives registered with National Electrification Administration (NEA) and Local Water Utilities Administration (LWUA)

E-BIR Forms

Is an application covering thirty-six (36) BIR Forms comprised of Income Tax Returns; Excise Tax Forms; VAT Forms; Withholding Tax Forms; Documentary Stamp Tax Forms; Percentage Tax Forms; ONETT Forms and Payment Form

Return of Husband and Wife

Include the following:

1) Married individuals, whether citizens, resident or nonresident aliens, who do not derive income purely from compensation, shall file a return for the taxable year to include income of both spouses, but where it is impracticable for the spouses to file one return, each spouse may file a separate return of income but the returns so filed shall be consolidated by the BIR for purposes of verification for the taxable year.

2) In case of married individuals who are still required to file returns under existing provisions of the law, i.e., in those instances not covered by substituted filing of returns, only one return for the taxable year shall be filed by either spouse to cover the income of the spouses, which return shall be signed by husband and wife unless it is physically impossible to do so, in which case signature of one of the spouses would suffice. (RR No. 3-2002)

Return of Parents to Include Income of Children

The income of unmarried minors derived from property received from a living parent shall be included in the return of parent, except:

1) when the donor's tax has been paid on such property, or

2) when the transfer of such property is exempt from donor's tax.

Persons Under Disability

If the taxpayer is unable to make his own return, the return may be made:

1) By his duly authorized agent or representative; or

2) By the guardian; or

3) Other person charged with the care of his person or property.

Notes:

a) The principal and his representative or guardian shall assume the responsibility of making the return and incurring penalties provided for erroneous, false or fraudulent returns.

b) The authority of the agent or representative shall be attached to the return.

True

(True or False) The fact that an individual's name is signed to a filed return shall be prima facie evidence for all purposes that the return was actually signed by him.

On or Before May 15

The deadline of an individual 1st quarter tax return.

On or Before August 15

The deadline of an individual 2nd quarter tax return.

On or Before November 15

The deadline of an individual 3rd quarter tax return.

April 15 of the Succeeding Year

The deadline of an individual annual tax return.

On or Before the 60th Day Following the Close of the Quarter

The deadline for the corporations' quarterly tax return.

On or Before the 15th Day of the 4th Month Following the Close of the Taxable Year

The deadline for the corporations' annual tax return.

Electronic Filing and Payment System (EFPS)

Refers to the system developed and maintained by the BIR for electronically filing tax returns, including attachments, if any, and paying taxes due thereon, specifically through the internet.

Filing Reference Number

Refers to the control number issued by the EFPS to acknowledge that a tax return, including attachments, has been successfully filed electronically. This shall serve as evidence of filing and the date of filing of the return.

Confirmation Number

Refers to the control number issued by authorized agent bank (AAB) to the taxpayer and BIR to acknowledge that the taxpayer's account has been successfully debited electronically in payment of his tax liability. This shall serve as evidence of the fact of payment of the taxpayer's liability to the extent of the amount reflected in the Confirmation Number, and the date of payment by the taxpayer.

Acknowledgement Number

Refers to the control number issued by the AAB to the BIR to confirm that tax payment has been credited to the account of the government or recognized as revenue (internal revenue tax collection) by the Bureau of Treasury.

E-FPS Authorized Agent Banks

Refers to a BIR authorized agent bank (AAB) that has passed the accreditation criteria for EFPS AAB such as being an internet-ready bank, indorsed by Bureau of Treasury for EFPS accreditation, certified by the Information Systems Group of the BIR that the applicant bank's system is acceptable and compatible with the EFPS of the BIR.

Entities Required to File and Pay Electronically

Include the following:

1) Large Taxpayers

2) Non-Large Taxpayers

a) Volunteering 200 or more Non-Large Taxpayers

b) Top 20,0000 private corporations (starting April, 2009)

3) Other Taxpayers:

a) Corporations with paid-up capital of P10,000,000 and above

b) Corporation with complete computerized system

c) Taxpayers joining public bidding pursuant to E.O. No. 398 as implemented by RR 3-2005

d) Taxpayers belonging to Top 5,000 individual taxpayers

e) Licensed local contractors under Philippine Contractors Accreditation Board (PCAB)

4) Enterprises enjoying fiscal incentives granted by other government agencies such as those registered with:

a) Philippine Economic Zone Authority (PEZA);

b) Board of Investments (BOI);

c) Various zone authorities;

d) Cagayan Special Economic Zone Authority;

e) Export Development Council;

f) Tourism Infrastructure and Enterprise Zone Authority; and

g) PHIVIDEC Industrial Authority

5) National Government Agencies (NGAs) mandatorily required to use Electronic Tax Remittance Advice (eTRA)

6) Taxpayer Account Management Program (TAMP) - taxpayers, whether individual or juridical entities that have been identified by Revenue District Office (RDO) based on selection criteria pursuant to existing revenue issuances.

7) Accredited Importers with Importer Clearance Certificates (BIR-ICCs) and Customs Broker Clearance Certificates (BIR-BCCs) - all importers and custom brokers (individuals, partnerships, corporations, cooperatives, associations, [whether taxable or non-taxable]), unless otherwise exempted, who/which secured accreditation from the BIR following existing revenue issuances, including prospective importer required to secure the said BIR-ICC and BIR-BCC.

Enrollment for System Usage

Identified taxpayers that would like to avail of the EFPS and/or required to file certain tax returns via the EFPS shall enroll in the EFPS in accordance with the provisions of applicable regulations, circulars and orders. For juridical entities or artificial persons, enrollment shall be made by the officers required by law to file the returns.

For Domestic Corporation: President, Vice-President or other principal officers

For Partnerships: Managing Partner

For Joint Ventures: Managing Head

For Resident Foreign Corporation: Country Manager

Time and Place of Payment - Large Taxpayers

Large Taxpayers who will e-pay shall enroll with any EFPS AAB authorized to serve them and who are capable to accept e-payments. E-payments shall be made within the day the return was electronically filed following the "pay-as-you-file" principle. Unless otherwise notified by the Commissioner of Internal Revenue (CIR), for all returns that will be filed starting August 1, 2002, e-payment of the taxes due thereon thru EFPS shall become mandatory. (RR No. 9-2002)

Time and Place of Payment - Non-Large Taxpayers

For Non-Large Taxpayers who intend to e-pay, electronic payment shall be made through the internet banking facilities of any AAB. The volunteering two hundred (200) or more Non-Large Taxpayers previously identified by the BIR to have availed of the option to file their return under EFPS shall nevertheless continue to file their returns under such method. (RR No. 10-2007) However, upon their receipt of a notification letter duly signed by the Commissioner of Internal Revenue, it becomes mandatory for them, including their branches located in the computerized revenue district offices, to file their returns and pay their taxes thru EFPS. (RR No. 10-2007)

The filing of the return ahead of the payment of the tax due thereon is still in accordance with "pay-as-you-file" principle as long as the payment of the tax is made on or before the due date of the applicable tax.

Confirmation of Receipts of Returns or Documents and Payment of Taxes - e-Filing and e-Payment

The return is deemed filed, on the date appearing in, and after a Filing Reference Number is generated and issued to the taxpayer via the EFPS.

The tax due thereon is deemed paid after a Confirmation Number is issued to the taxpayer and to the BIR by the AAB. In addition, an Acknowledgment Number shall be issued by the AAB to the BIR to confirm that the tax payment has been credited to the account of the government or recognized as revenue (internal revenue tax collection) by the Bureau of Treasury. (RR No. 9-2002)

Confirmation of Receipts of Returns or Documents and Payment of Taxes - e-Filing and Manual Payment

The return is deemed filed, on the date appearing in, and after a Filing Reference Number is issued to the taxpayer via EFPS. The print-out of the Filing Reference Number shall be presented to the AABs for manual payment of the tax due thereon. The payment thereof is received upon validation of the document containing the Filing Reference Number generated by the EFPS and the issuance of an Official Receipt by the AAB.

Date of Receipt of Return

The receipt of return occurs at the time it enters the e-FPS and shall be evidenced by the date indicated in the Filing Reference Number.

Electronic Signature

Gives the following presumptions:

a. That the electronic signature is the signature of the individual taxpayer, or in the case of a corporate taxpayer, the signature singly and collectively, of both the authorized corporate officer/s that are required by the Tax Code or appropriate regulations to file and swear to the truth and correctness of such return and who are certified as such officers by the corporate secretary in a document submitted to the BIR; and

b. That the electronic signature was affixed by the above-mentioned taxpayer or persons with the intention of signing, approving, and swearing to the truth and correctness of such return.

True

(True or False) The electronic copies of the returns in their original format e-filed by a taxpayer can be accessed by him/it via the EFPS for a period of two (2) months from filing thereof. After this period, a taxpayer may secure a certification from the BIR containing the information supplied by him in the return which he/it filed via the EFPS.

Time and Place of Filing Audited Financial Statements

The paper copy of the audited financial statements shall be filed within fifteen (15) days from the date of filing of BIR Form No. 1702. The taxpayer is required to file four (4) copies of the audited financial statements (FS). The audited FS shall be filed with the LTS or the LTDO as the case may be, in the case of Large Taxpayers, and with their respective Revenue District Offices, in the case of Non-Large Taxpayers.

Different Modes of Payment

1) Payment through Authorized Agent Bank (AAB)

(a) Over-the-counter cash payment - Maximum amount per tax payment not to exceed P10,000.00

(b) Bank debit system - taxpayer has bank account with AAB

(c) Checks - indicate "PAY TO THE ORDER OF:

1) Presenting/collecting bank or the bank where the payment is to be coursed and

2) FAO (for account of) Bureau or Internal Revenue as payee; and

3) Under the "ACCOUNT NAME" of the taxpayer identification number (TIN)

Notes: i. Accommodation checks, second endorsed checks, stale checks, postdated checks, unsigned checks and checks with alterations/erasures are not acceptable.

ii. Checks to cover one tax type for one return period only

2) Payment through Tax Debit Memo (TDM) (not acceptable as payments for withholding taxes, fringe benefit tax, and for taxes, fees and charges collected under special schemes or procedures or programs of the Government or BIR)

3) Payment through E-Payment System

4) Payment directly to the BIR

5) Payment through creditable withholding taxes

6) Credit card

7) Debit card

8) Prepaid card