Tuesday, January 3, 2012

BIR ONLINE REGISTRATION SYSTEM


The Bureau of Internal Revenue recently launced an Online system for
 the e-Registration of various Taxpayers services, TIN Issuance,
payment of registration fees and issuance of certifcate of registration.

To apply for your TIN
click this link

Reminder :
Securing more than one TIN is criminally punishable pursuant to the
provisions of the National Internal Revenue Code of 1997, as amended.
NOTE: Issuance of TIN is free of charge

 

37 comments:

  1. sir/madam can i ask if Events BSJ production is legal in b.i.r. 02072681

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  2. gud morning ! sir/madam can i ask, what is the application form for BIR , of a small business?

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  3. i am trying to contact RDO 43 to report a tax evasion case but all email address and phone in the site are not working and dont reply... please advise to where I can file the case... it will be around 5M tax evasion case.

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  4. Pls guide me what to do . I want to report an importer company and its supplier of imported items who are making economic savorage since 2008 up to present. Around 60Millions worth of importation for 2013 & 2014.

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  5. Good afternoon ma'am/sir-BIR website's admin. Wondering if I could ask a question thru this comment link. I am but a rookie in business and my prior profession/s are not in anyway related to it, so to say my apologies for my short comings. My question is that, do I have to fill-up and/or submit (be it on-line or walk-in) form 2551M though no transactions happened and/or recorded as the business is newly registered and tax clearance is still on process? Thank you very much and more power.

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  6. Guys this is only a blog. pls refer to their official website http://www.bir.gov.ph/ and trunkline 9817000, email contact_us@cctr.bir.gov.ph or drop by at their office
    BIR National Office Bldg., BIR Road, Diliman, Quezon City, Philippines. Goodluck!

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  7. TAX EVASION CASE INTENTIONALLY NOT FILED BY BIR THE LIAR COMMISSIONER KIM HENARES

    Golden Donuts, Inc. (GDI), the exclusive Philippine Franchisee of the global brand "Dunkin' Donuts", flagrantly perpetrated fraudulent acts or criminal tax violations that culminated to deficiency tax assessment amounting to P1.56 billion, including increments, for year 2007, discovered and documented by Othello Dalanon in his official capacity as former BIR Examiner.

    Dalanon personally reported GDI's omissions to Commissioner Henares and recommended to her the criminal prosecution for tax evasion under the much-vaunted "Run After Tax Evaders" program of the Bureau; but she intentionally did not pursue fraud case against the company because its secretary - Marixi Prieto who also happens to be the chairperson of the Philippine Daily Inquirer - is President Aquino's friend, according to Deputy Commissioner Estela Sales.

    Ms. Prieto talked to Henares and BIR Regional Director (now Assistant Commissioner of Internal Revenue) Nestor Valeroso, on different occasion, who both gave leniency to GDI.

    The aforesaid deficiency tax assessment obtained finality because GDI failed to file a VALID PROTEST against the Formal Letter of Demand and Assessment Notice (FAN).

    However, Henares intentionally did not collect it, purportedly because representatives of GDI complained to her that Dalanon's assessment was faulty. Thus, she ordered two (2) re-investigations.

    There is no LAW that authorizes the commissioner to order two (2) re-investigations of a FINAL, EXECUTORY and DEMANDABLE assessment.

    Once the deficiency tax assessment obtained finality, the right of the government to collect the deficiency tax becomes absolute; thus, precludes the taxpayer from questioning the correctness of the assessment and from raising any justification or defense that would pave the way for a re-investigation.

    She also claims that the authority to decide and declare finality of a certain assessment is a function vested by law upon the Commissioner of Internal Revenue.

    Her assertion does not find basis in LAW.

    It is the LAW that determines finality of a certain assessment as clearly provided under Revenue Regulations No. 12-99 as amended by Revenue Regulations No. 18-2013 which the commissioner herself promulgated, in relation to Section 228 of the 1997 National Internal Revenue Code (1997 Tax Code), as amended.

    Her claim that Dalanon's assessment was faulty is WRONG.

    In fact, she was not able to dispute Dalanon's assessment. What is very clear is that, while she sows fears among taxpayers, bullies private and government workers, marginal income earners, and insists on probing Supreme Court Justices; she fears, coddles and lawyers for Dunkin' Donuts' local seller – a big-time tax evader.

    Just to reiterate. The P1.56 billion tax deficit of Dunkin' Donuts' franchisee has become DUE and DEMANDABLE, thus, it already legally belongs to the FILIPINO people whom PRESIDENT AQUINO considers as his "bosses", and therefore, Henares is duty-bound to enforce collection thereof - but she refuses to.

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  8. GDI’s OMISSIONS THAT CULMINATED TO DEFICIENCY TAX ASSESSMENT AMOUNTING TO P1.56 BILLION, INCLUDING INCREMENTS, FOR YEAR 2007 – DOCUMENTED BY OTHELLO DALANON:

    1. GDI has two (2) sets of books of accounts – one was the duly-registered hardbound computer-generated books of accounts which were the bases of Dalanon’s assessment; and the other was the unregistered not-permanently-bound “manually-posted from original books of accounts”, records which GDI claims as the bases of its Trial Balance for Financial Statements and Income Tax Return purposes;

    2. It supplied false information on the tax return – the duly-registered books of accounts reflected a net income amounting to P135.2 million while the tax return showed a net loss of P44.9 million;

    3. It substantially under-declared sales on the tax return in two (2) instances:

    3.1 Sales per duly-registered books was P1.928 billion while the amount reflected on the tax return was P1.031 billion – a substantial discrepancy (under-declaration) amounting to P897 million;

    The SUPREME COURT ruled in the case of Paper Industries Corporation of the Philippines vs. Court of Appeals, et al., 250 SCRA 434 that “where the books of accounts reflected a sales or receipts higher than that reflected on the return, the books of accounts should prevail. This is so, because the books of accounts are kept by the taxpayer and are prepared under its control and supervision; and they reflected what may be deemed to be admissions against interest.”

    The representations made by GDI in the CD and duly-registered books submitted and presented by it to the Bureau for audit and examination amounted to admissions against its own interest which it cannot disown or change at its convenience of pleasure.

    3.2 Other independent relevant documents, such as, but not limited to: Franchise Agreement between Dunkin’ Donuts of America, Inc. and GDI, BIR returns, etc., further revealed that GDI’s sales topped P2.366 billion but recorded per duly-registered books was only P1.928 billion – a substantial unrecorded and consequently undeclared sales amounting to P438 million.

    The information contained in the aforesaid documents were utilized in further determining GDI’s sales on the basis of the provisions of Section 5(A) of the 1997 Tax Code.

    The method of validation used by Othello Dalanon was already upheld by the COURT OF TAX APPEALS in the case of Asia Coal Corporation vs. CIR (CTA Case No. 6803, February 13, 2008), that “the respondent may utilize any kind of document, x x x to determine the correct sales of the petitioner…”

    All the above enumerations are fraudulent acts or criminal tax violations covered by the RATE (Run After Tax Evaders) Program of the Bureau; but Henares intentionally did not pursue tax evasion case against the company.

    Henares, in her position paper submitted to the Office of the Ombudsman in connection with the formal complaint filed against her by Othello Dalanon, failed to dispute the above-enumerated irregularities perpetrated by GDI.

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  9. THE DEFICIENCY TAX ASSESSMENT AGAINST GDI OBTAINED FINALITY.

    The deficiency tax assessment against GDI amounting to P1.56 billion, including increments, for year 2007, obtained finality because GDI’s letter of protest against the Formal Letter of Demand and Assessment Notice (FAN) was INVALID.

    The alleged letter of protest of GDI merely states “protest against PAN adopted in toto”. It does not state the facts, the applicable law, rules and regulations, or jurisprudence on which its protest was based. It is neither a request for reconsideration nor reinvestigation.

    The rules on protesting an assessment is found in Section 3 subsection 3.1.5 of RR No. 12-99, as amended, that reads:

    “Disputed Assessment. – The taxpayer or his duly authorized representative may protest administratively against the aforesaid formal letter of demand and assessment notice within thirty (30) days from date of receipt thereof.

    x x x

    The taxpayer shall state the FACTS, the applicable LAW, RULES and REGULATIONS or JURISPRUDENCE on which his protest is based, otherwise, his protest shall be considered VOID and WITHOUT FORCE AND EFFECT.

    x x x

    If the taxpayer fails to file a VALID PROTEST against the formal letter of demand and assessment notice within thirty (30) days from date of receipt thereof, the assessment shall become FINAL, EXECUTORY and DEMANDABLE.”

    The said Regulations must be taken in relation to Section 228 of the 1997 Tax Code, as amended, which reads:

    “Protesting an assessment. – Such assessment may be protested administratively by filing a REQUEST FOR RECONSIDERATION or REINVESTIGATION within thirty (30) days from receipt of the assessment in such form and manner as may be prescribed by implementing rules and regulations. x x x otherwise, the assessment shall become FINAL.”

    Clearly, what the law demands is a VALID administrative protest against the formal letter of demand and assessment notice which required the taxpayer to comply with the following:

    (a) The protest must be through a REQUEST FOR RECONSIDERATION or REINVESTIGATION;

    (b) The protest must be in the form and manner as prescribed under RR No. 12-99, as amended, which provides that said protest must state the FACTS, the LAW, RULES and REGULATIONS, or JURISPRUDENCE on which the protest is based; and

    (c) Must be filed within thirty (30) days from receipt of the assessment.

    The COURT OF TAX APPEALS in the case of Allied Banking Corporation vs. Commissioner of Internal Revenue (CTA Case No. 4581, March 25, 1992, cited that, “[f]ailure to comply with any or all of these requirements results in the assessment against the taxpayer becoming final and unappealable.”

    ..continued below

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  10. The letter of protest should not just state “protest against PAN adopted in toto” because the administrative protest required to be filed as an answer to the formal letter of demand and assessment notice is distinct and not the same as the protest filed against the PAN.

    The COURT OF TAX APPEALS emphasized in the case of Security Bank Corporation vs. Commissioner of Internal Revenue (CTA Case No. 6564, November 8, 2006) and further accentuated in the case of Bank of the Philippine Islands vs. Commissioner of Internal Revenue (CTA Case No. 7397, April 9, 2008) that:

    “[A] protest to the preliminary assessment notice is not the same as the protest required to be filed as an answer to the final assessment notice. In fact, a preliminary assessment notice may or may not even be protested to by the taxpayer, and the fact of non-protest shall not in any way make the preliminary assessment notice final and unappealable. What is clear from Section 319-A of the Tax Code of 1977, as amended, is that failure on the part of the taxpayer to protest or reply to a preliminary assessment notice paves the way for the issuance of a final assessment notice. However, evident under said Section (now Section 228 of the 1997 Tax Code) is that failure on the part of the taxpayer to file a VALID administrative protest through a REQUEST FOR RECONSIDERATION or REINVESTIGATION on the final assessment notice, shall result in the finality of the said FAN.”

    The SUPREME COURT in the case of Allied Banking Corporation vs. Commissioner of Internal Revenue (G.R. no. 175097, February 5, 2010) heightened that:

    “It is the Formal Letter of Demand and Assessment Notice that must be administratively protested or disputed within 30 days, and not the PAN.”

    GDI, in its INVALID letter of protest against the FAN, likewise claimed that the assessments are null and void ab initio because it was allegedly issued in rampant violation of the due process requirements prescribed under Section 228 of the Tax Code as implemented by RR No. 12-99.

    GDI’s claim is not true. Records will show that the due process requirements were promptly observed. There were at least five (5) notices served to GDI either thru personal delivery or by mail before the formal letter of demand and assessment notice (FAN) was issued. In fact, it even contested the PAN as clearly admitted in GDI’s invalid letter of protest against the FAN.

    The COURT OF TAX APPEALS in the case of Bank of the Philippine Islands vs. Commissioner of Internal Revenue (CTA Case No. 7397, April 9, 2008), has had the occasion to say: “[W]hen the petitioner received the final assessment notice and duly protested the same, petitioner’s right to due process was properly protected and observed.”

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  11. Kim Henares, the incompetent and liar BIR Commissioner, promulgates tax rules and regulations that are in conflict with pre-existing law. Examples are: Revenue Regulations Nos. 6-2013 and 2-2014. The provisions of these Regulations have gone beyond the terms and provisions of Republic Act No. 8424 otherwise known as the 1997 National Internal Revenue Code, as amended.

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  12. hi! i just did an online registration for TIN for Professional. Can i Use already my TIN even if I was not able to pay the 500 registration fee yet?

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  13. Value-added Tax (VAT) on sale of real property – not a pre-requisite for application for Certificate Authorizing Registration (CAR)

    The VAT on sale of real property is not collected simultaneously upon filing of the applicable BIR returns as pre-requisite for the application for Certificate Authorizing Registration (CAR). There are no existing laws, rules and regulations that require the same. Moreover, the venue and time for filing of returns and payment or remittance of taxes for VAT, and Capital Gains Tax (CGT) or Expanded Withholding Tax (EWT) as the case may be, relative to sale of real property subject to VAT, do not fall within the same place, period or date on which or within which they are required to be filed and paid. The VAT returns and taxes thereon are filed with and paid to any Authorized Agent Banks (AABs) of the Revenue District Office (RDO) having territorial jurisdiction over the registered place of business of the seller/transferor; whereas, the CGT or EWT returns and taxes thereon are filed with and paid to any AABs of the Revenue District Office (RDO) having territorial jurisdiction over the place where the property being transferred is located, which processes the application for CAR and issuance thereof.

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  14. To: Commissioner Kim Henares,
    Good day po madam Commissioner. Ako po ay gustong makatulong po sa inyo at Pilipinas. Sana po ay manatiling sekreto po ang pangalan ko sa publiko at sa kompanya na e rereport ko sa inyo. Ako po ay dating nagtrabaho sa RUSI o Luzon Ramcycles Inc. nagbebenta po kami ng motorsiklo. Ang RUSI/Luzon Ramcycles Inc. ay nagpaparecieve ng RESIBO at INVOICE sa District Office ng BIR. Ang benta na Brand New na Motor, Down payment o Cash lang ang eni entry sa SALES JOURNAL. Yung mga benta na second hand na motor at mga payments ay hindi po ito eni entry sa SALES JOURNAL. Kahit gaano ka dami ang benta namin na second hand ay hindi po ito eni entry sa SALES JOURNAL at MILLIONS po ang koleksyon ng RUSI araw araw pero hindi ito eni entry sa SALES JOURNAL. Bumibili ang RUSI ng mga LUPA pero naka under VALUE po ito sa DEED of SALE para maliit lang ang mabayaran sa Capital Gains. Niloloko po ng RUSI ang BIR at ang Pilipinas. Directives po nila sa amin dati na kung may mag TAX MAPPING itago namin ang resibo sa mga PAYMENTS at RESIBO ng mga DOWN PAYMENT o CASH na benta na SECOND HAND. Kung mahuli po ng mga tauhan niyo ang mga resibo na hindi na entry sa SALES JOURNAL ay magpenalty po pero ang mga empleyado po ang magbabayad sa penalty ng BIR. Kawawa po ang mga empleyado ng RUSI. Sana bigyan niyo ito ng malaking ATTENTION ang kamaliang ito at paglabag sa batas ng Pilipinas. Kung mag inspection po kayo sa mga BRANCH po kayo dahil doon po ang mga supervisor na nagreresibi sa mga payments na hindi eni entry sa SALES JOURNAL.Sa PROBINSYA po kayo mag umpisa gaya ng BACOOR CAVITE, DASMARINAS CAVITE, MEYCAUYAN BULACAN, BALIWAG BULACAN, SAN FERNANDO PAMP., MABALACAT PAMP., CAPAS TARLAC, TARLAC TARLAC, GERONA TARLAC at marami pang BRANCH nila. LUZON, VISAYAS AT MINDANAO po ang RUSI. Sana itatago niyo ang pangalan ko, para narin po sa proteksyon ko sa pagrereport ko sa inyo. Kung magpa inspection po kayo sa RUSI yong mga tauhan po ninyo sa Head Office ang utusan niyo dahil kakilala at kaibigan pa ng mga Branch Manager ng RUSI ang mga District Head ng BIR kaya penalty lang ang ipapataw kung mahuli ang mga Resibo na hindi eni entry sa SALES JOURNAL. SALAMAT PO

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  15. To: Commissioner Kim Henares,
    Good day po madam Commissioner. Ako po ay gustong makatulong po sa inyo at Pilipinas. Sana po ay manatiling sekreto po ang pangalan ko sa publiko at sa kompanya na e rereport ko sa inyo. Ako po ay dating nagtrabaho sa RUSI o Luzon Ramcycles Inc. nagbebenta po kami ng motorsiklo. Ang RUSI/Luzon Ramcycles Inc. ay nagpaparecieve ng RESIBO at INVOICE sa District Office ng BIR. Ang benta na Brand New na Motor, Down payment o Cash lang ang eni entry sa SALES JOURNAL. Yung mga benta na second hand na motor at mga payments ay hindi po ito eni entry sa SALES JOURNAL. Kahit gaano ka dami ang benta namin na second hand ay hindi po ito eni entry sa SALES JOURNAL at MILLIONS po ang koleksyon ng RUSI araw araw pero hindi ito eni entry sa SALES JOURNAL. Bumibili ang RUSI ng mga LUPA pero naka under VALUE po ito sa DEED of SALE para maliit lang ang mabayaran sa Capital Gains. Niloloko po ng RUSI ang BIR at ang Pilipinas. Directives po nila sa amin dati na kung may mag TAX MAPPING itago namin ang resibo sa mga PAYMENTS at RESIBO ng mga DOWN PAYMENT o CASH na benta na SECOND HAND. Kung mahuli po ng mga tauhan niyo ang mga resibo na hindi na entry sa SALES JOURNAL ay magpenalty po pero ang mga empleyado po ang magbabayad sa penalty ng BIR. Kawawa po ang mga empleyado ng RUSI. Sana bigyan niyo ito ng malaking ATTENTION ang kamaliang ito at paglabag sa batas ng Pilipinas. Kung mag inspection po kayo sa mga BRANCH po kayo dahil doon po ang mga supervisor na nagreresibi sa mga payments na hindi eni entry sa SALES JOURNAL.Sa PROBINSYA po kayo mag umpisa gaya ng BACOOR CAVITE, DASMARINAS CAVITE, MEYCAUYAN BULACAN, BALIWAG BULACAN, SAN FERNANDO PAMP., MABALACAT PAMP., CAPAS TARLAC, TARLAC TARLAC, GERONA TARLAC at marami pang BRANCH nila. LUZON, VISAYAS AT MINDANAO po ang RUSI. Sana itatago niyo ang pangalan ko, para narin po sa proteksyon ko sa pagrereport ko sa inyo. Kung magpa inspection po kayo sa RUSI yong mga tauhan po ninyo sa Head Office ang utusan niyo dahil kakilala at kaibigan pa ng mga Branch Manager ng RUSI ang mga District Head ng BIR kaya penalty lang ang ipapataw kung mahuli ang mga Resibo na hindi eni entry sa SALES JOURNAL. SALAMAT PO

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  16. TAX ADVICE

    EFFECT OF FAILURE TO DEDUCT AND WITHHOLD TAX

    Pursuant to Revenue Regulations (RR) No. 02-98, as amended, in relation to Sections 57 and 79 of Republic Act No. 8424 otherwise known as the 1997 National Internal Revenue Code (1997 NIRC), as amended, all persons, natural or juridical, engaged in business, including government agencies as elucidated in Revenue Memorandum Order (RMO) No. 23-2014, are constituted as withholding agents; thus, they are duty-bound to deduct and withhold tax/es required to be withheld upon all payments for the salaries, wages and allowances of their employees, except wages of minimum wage earners (MWEs), and upon all income payments to their local/resident suppliers of goods and services; and payments to non-residents for the lease or use of property or property rights including the 12% VAT.

    Failure to deduct and withhold shall make them liable for the tax/es not withheld, including increments, as provided under Section 251 of the Code.

    In addition, the expense/s or income payment/s shall not be allowed as deduction from gross income pursuant to Section 34(K) of the same Code, which reads:

    “Additional requirements for deductibility of certain payments. – any amount paid or payable which is otherwise deductible from, or taken into account in computing, gross income or for which depreciation or amortization may be allowed under this Section, shall be allowed as a deduction only if it is shown that the tax required to be deducted and withheld therefrom has been paid to the BIR in accordance with this Section, Sections 58 and 81 of this Code.”

    “The purpose of this requirement is to [e]nsure the collection of the income tax on these payments which constitute income to the recipients thereof and, therefore, includible in their gross income (NIRC, Annotated, 2000 ed., De Leon, p. 292). Thus, when one engaged in trade or business makes payments that are deductible from his gross income for tax purposes it is not enough that he proves that such payments have been made. He must also show proof that he withheld the tax and remitted it to the BIR before he can deduct the same as business expense (NIRC, Annotated, De Leon, supra). [Systems and Encoding Corp. vs. CIR, CTA Case No. 6999 dated Dec. 16, 2008].

    Furthermore, the Supreme Court ruled in the case of Tutuban Properties, Inc. vs. CIR, CTA, Case No. 6570, Dec. 20, 2007, that “[t]he corporation is the government’s withholding agent. Hence, it is duty-bound to withhold taxes upon income payments subject to tax required to be withheld at the time such income payments are paid or payable, whichever is earlier in order to be considered as a deductible expense (Section 2.57.4 of RR No. 2-98). Since the expense was not subjected to withholding tax in the year it was accrued and claimed as expense, the same shall not be allowed as deduction from gross income.”

    RR No. 12-2013 also provides: “No deduction will also be allowed notwithstanding payments of withholding tax at the time of the audit investigation or reinvestigation/reconsideration in cases where no withholding tax was made in accordance with Secs. 57 and 58 of the Code”.

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  17. TAX ADVICE

    Value-added Tax (VAT) on sale of real property – not a pre-requisite for application for Certificate Authorizing Registration (CAR)

    The VAT on sale of real property is not collected simultaneously upon filing of the applicable BIR returns as pre-requisite for the application for Certificate Authorizing Registration (CAR). There are no existing laws, rules and regulations that require the same. Moreover, the venue and time for filing of returns and payment or remittance of taxes for VAT, and Capital Gains Tax (CGT) or Expanded Withholding Tax (EWT) as the case may be, relative to sale of real property subject to VAT, do not fall within the same place, period or date on which or within which they are required to be filed and paid. The VAT returns and taxes thereon are filed with and paid to any Authorized Agent Banks (AABs) of the Revenue District Office (RDO) having territorial jurisdiction over the registered place of business of the seller/transferor; whereas, the CGT or EWT returns and taxes thereon are filed with and paid to any AABs of the Revenue District Office (RDO) having territorial jurisdiction over the place where the property being transferred is located, which processes the application for CAR and issuance thereof.
    _________________

    Note:

    The present scheme of not requiring for the payment of VAT in situations where the fair market value exceeded the selling price of the real property being transferred, might result to non-collection of the rightful VAT; because the same might inadvertently not correctly reflected on the VAT return when the VAT-registered seller/transferor files the return on the date it is required to be filed, considering that the VAT return does not provide space specifically for transactions relative to sale of real property which would reflect the fair market value upon which the Output VAT shall be based.

    Although the BIR has already an existing monitoring scheme in verifying and collecting VAT on involuntary sale of real property, e.g., foreclosed real property mortgaged, under the circumstances which warrant the imposition of VAT which shall be paid by the VAT-registered mortgagor, given that the Revenue District Office (RDO), having territorial jurisdiction over the place of location of the real property subject of the foreclosure sale, is required to notify the Revenue District Office (RDO) having territorial jurisdiction over the place of the principal place of business of the VAT-registered mortgagor to collect the VAT, it may further employ a scheme or provide mechanism for the strict monitoring of VAT compliance of taxpayers, whether or not engaged in real estate business, which sell, transfer or dispose of real properties subject to VAT.

    It may also later on employ a scheme wherein the excess of the Output VAT based on the FMV over the Output VAT based on the gross selling price may be collected in advance, as a pre-requisite for the filing of the application for CAR, in cases where the fair market value of the real property being transferred is higher than the gross selling price stated in the sale document, to ensure the collection of VAT which could otherwise be lost or substantially reduced through unintentional errors; and also to improve government’s cash flow.

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  18. TAX ADVICE

    ASSIGNMENT OF RIGHTS OVER PROPERTY PURCHASED ON INSTALLMENT

    If upon completion of the payment of the purchase price of real property classified as ordinary asset (or capital asset), but before the execution of the Deed of Sale, the buyer decides to assign his right over the property to another person for a consideration, the assignment shall be considered a separate sale of real property and, therefore, subject to the creditable/expanded withholding tax (EWT) or final withholding of capital gains tax, as the case may be, which shall be withheld by the assignee of such property based on the consideration per Deed of Assignment or the fair market value of such property at the time of assignment, whichever is higher, and to the DST imposed under Sec. 196 using the same basis.[RR No. 17-03]

    It is to be clarified, however, that sale of interest in real property (real property purchased on installment covered by Contract to Sell which was sold by the original buyer before it was fully paid) shall be taxable on the part of the original buyer (now seller) based on the realized gain thereon which is measured by the difference between the agreed consideration and the amount actually paid by the said original buyer.[RR No. 17-03]

    Differing views arise in the matter of interpretation of the preceding provisions of Revenue Regulations No. 17-03, given that said Regulations did not clearly define as to the kind of tax shall the realized gain be subject to. Shall it be subject to capital gains tax or creditable/expanded withholding tax (EWT); or to the regular income tax?

    The Bureau of Internal Revenue, in its BIR Ruling No. [DA-(I-041) 819-09] dated December 22, 2009, clarified that the realized gain arising from the sale of rights over the property purchased on installment is not subject to the capital gains tax or creditable/expanded withholding tax, but to the regular income tax.

    It further clarified that the Deed of Assignment of Rights to be executed for the purpose is also not subject to the documentary stamp tax prescribed under Section 196 of the 1997 NIRC, as amended, but only to the P15.00 documentary stamp tax (strip stamp) imposed under Section 188 of the same Code.

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  19. When and where to file Capital Gains Tax Return and pay the tax on the sale of real property classified as capital asset.

    The Capital Gains Tax Return (BIR Form No. 1706) shall be filed and tax paid within thirty (30) days following each sale or other disposition; at the Authorized Agent Bank (AAB) of the Revenue District Office of the BIR having territorial jurisdiction of the place where the real property being transferred is located.[RR No. 08-98]

    In 2008, Revenue Regulations No. 004-08, dated February 19, 2008 which took effect on May 3, 2008, was promulgated effectively amending Revenue Regulations No. 08-98 in respect of the venue for the filing of CGT and DST returns and payment of taxes of real estate transactions of large taxpayers. The amendment provides that in cases where the seller/transferor is a large taxpayer, the venue for the filing of the CGT return and payment of CGT as well as the DST return and DST due thereon shall be with the AAB of the concerned LTS Office where said large taxpayer-seller/transferor is registered.

    However, in 2009, pursuant to Revenue Regulations No. 005-09 dated March 16, 2009, the venue for the filing of CGT and DST returns and payment of taxes on real estate transactions of large taxpayers, including securing of CAR/TCL was reverted to the jurisdiction of the concerned RDO where the real property being transferred is located.

    The above rule applies whether the seller/transferor thereof is a large taxpayer or a non-large taxpayer.

    The same rule applies in cases of taxable foreclosure sales.

    Sometimes, differing views arise in regard to the period within which to file the CGT return and pay the tax. Shall it be within thirty (30) days after the date of execution of the document of transfer or after the date of notarization of said instrument?

    Section 51(C)(2)(b) of the 1997 NIRC, as amended, provides that individuals subject to tax on capital gains from the sale or disposition of real property shall file a return within thirty (30) days following each sale or other disposition.

    It bears noting also that the guidelines and instructions reflected in BIR Form No. 1706 [CGT return] states that the return shall be filed within thirty (30) days following each sale, exchange or disposition of real property.

    Revenue Regulations Nos. 13-99, 14-00 and 17-03 provides that the date of sale or disposition refers to the date of notarization of the document evidencing the transfer of property.

    It may be noted that the law itself that provides for the period within which the capital gains tax return shall be filed and tax paid, did not explicitly define the term “date of sale or disposition”.

    It is settled by the Court of Tax Appeals in the case of Union Bank of the Philippines – Trust and Investment Division vs. Commissioner of Internal Revenue (CTA Case No. 6299, June 2, 2003) that the capital gains tax accrues from the time of the execution of the document of transfer. It follows that the capital gains tax return shall be filed and tax paid within thirty (30) days after the date of execution of the instrument of sale/transfer.

    The time of execution is not extended to the time of the notarization of the Deed of Sale. The subsequent act of the Notary Public merely attests to the authenticity of the signatures of the parties to a Deed of Sale but does not confer validity or completion of the contract (Union Bank of the Philippines – Trust and Investment Division vs. Commissioner of Internal Revenue, CTA Case No. 6299, June 2, 2003).

    The date of notarization shall be prima facie considered as the date of consummation of the contract of sale. This, however, presupposes a situation where only the date of notarization appears on the document. But where a date of execution appears, then the date shall prevail over the date of notarization. Ibid.

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  20. TAX ADVICE

    Gifts made by a corporation.

    The law taxes gifts made by an individual. Therefore, a gift made by a corporation is not taxable to the corporation, but treated as made by the individual stockholders in proportion to their shareholdings. (St. Stephen’s Assn. vs. Commissioner of Internal Revenue, CTA No. 173, May 23, 1959, aff’d. in 2 SCRA 465; Pirovano vs. Commissioner of Internal Revenue, CTA Nos. 347 and 375, Jan. 31, 1962). [NIRC by Jose Arañas]

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  21. TAX ADVICE

    Political or electoral contribution is not subject to gift tax. [RA No. 7166]

    Any contribution in cash or in kind to any candidate, political party or coalition of parties for campaign purposes shall be governed by the Election Code, as amended. [Sec. 99(C), 1997 NIRC, as amended].

    Income payments made by political parties and candidates of local and national elections of all their purchase of goods and services as campaign expenditures, and income payments made by individuals or juridical persons for their purchases of goods and services intended to be given as campaign contribution to political parties and candidates are subject to Creditable [Expanded] Withholding Tax at the rate of five percent (5%) [RR No. 10-2009]

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  22. TAX ADVICE
    Revenue Regulations (RR) No. 6-2013

    BIR Commissioner Kim Henares promulgated RR No. 6-2013 dated April 11, 2013 that took effect on May 14, 2013, amending certain provisions of RR No. 006-08 on the methodology in determining the Fair Market Value (FMV) of shares of stock not traded in the local stock exchange for internal revenue tax purposes.

    The aforesaid amending Regulations provide that in determining the FMV of unlisted shares, the real property, if any, of the issuing corporation shall be adjusted to its appraised value at the time of disposition of the unlisted shares of stock. That the appraised value of the real property shall be the higher of –

    (1) The FMV as determined by the Commissioner, or
    (2) The FMV as shown in the schedule of values fixed by the Provincial and City Assessors, or
    (3) The FMV as determined by Independent Appraiser.

    Section 6(E) of Republic Act (R.A.) No. 8424 otherwise known as the 1997 National Internal Revenue Code of the Philippines, as amended, provides:

    "Authority of the Commissioner to prescribe real property values. - The Commissioner is hereby authorized to divide the Philippines into different zones or areas and shall, upon consultation with COMPETENT APPRAISERS both from private and public sectors, determine the fair market value of real properties located in each zone or area. For purposes of computing any internal revenue tax, the value of the property shall be whichever is the higher of –

    (1) The fair market value as determined by the Commissioner; or
    (2) The fair market value as shown in the schedule of values of the Provincial and City Assessor."

    It may be noted that the above-quoted provisions of R.A. No. 8424, as amended, provide for only two (2) conditions in determining the FMV of real property. However, RR No. 6-2013 provides for three (3) circumstances in determining such FMV.

    The term "fair market value as determined by the Commissioner" as provided under Section 6(E) of the aforesaid Act is based on the zonal values of real properties commonly termed as "zonal valuation" which already includes the Independent Appraisers' appraisal, given that the different Sub-Technical Committees on Real Property Valuation (STCRPV) created pursuant to Department of Finance Order No. 6-2010 as circularized under Revenue Memorandum Circular (RMC) No. 027-10, relative to the establishment of zonal values of real properties situated within the jurisdiction of every Revenue District Offices, already includes REAL PROPERTY APPRAISERS/ REAL ESTATE PRACTITIONERS representing the private sectors as members.

    However, in RR No. 6-2013, the "independent appraisers' appraisal" is added as a separate condition in computing for the FMV of real property for purposes of determining the FMV of unlisted shares of stock.

    continued below please see RR 6-2013

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  23. TAX ADVICE
    RR 6-2013 continued

    The COURT OF TAX APPEALS in the case of Commissioner of Internal Revenue vs. Tikicraft Industries, Inc., et al., (CA-G.R. SP No. 24488, August 16, 1991) has had the occasion to say that:

    "There is no gainsaying that regulations are entitled to great respect from the courts especially if followed for some considerable period of time (Molina vs. Rafferty, 39 Phil. 169; People vs. Hernandez, 59 Phi. 272). While rules and regulations promulgated by the administrative authorities are entitled to great respect and weight from the courts, it is a well-ingrained through principle that the rules and regulations issued by administrative officials to implement a law in order to be valid must not go beyond the terms and provisions of the latter. Thus in the case of Juan vs. Musngi (155 SCRA), the Supreme Court held:

    "Article 7 of the Civil Code embodies the basic principle that administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws or the Constitution. In further amplification this court had consistently ruled that administrative regulations under legislative authority by a particular department must be in harmony with the provisions of the law, and should be for the purpose of carrying into effect its general provisions. By such regulation, of course, the law itself cannot be extended."

    "In fine, the power of the Secretary of Finance to promulgate rules and regulations, upon recommendation of the Commissioner of Internal Revenue, for the effective enforcement of internal revenue laws, is subject to the limitation that said rules and regulations should not be in conflict with the terms and provisions of a pre-existing law."

    In my layman's understanding, I feel that the provisions of RR No. 6-2013 have gone beyond the ambit of the Tax Code

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  24. TAX ADVICE

    Re: Optional Standard Deduction (OSD)

    Section 34(L) of Republic Act (RA) No. 8424 otherwise known as the 1997 National Internal Revenue Code (NIRC), as amended, reads:

    “Optional Standard Deduction (OSD). - In lieu of the deductions allowed under the preceding Subsections, an individual subject to tax under Section 24, other than a non-resident alien, may elect a standard deduction in an amount not exceeding forty percent (40%) of his gross sales or gross receipts, as the case maybe. In the case of a corporation subject to tax under Sections 27(A) and 28 (A)(1), it may elect a standard deduction in an amount not exceeding forty percent (40%) of its gross income as defined in Section 32 of this Code. Unless the taxpayer signifies in his return his intention to elect the optional standard deduction, he shall be considered as having availed himself of the deductions allowed in the preceding Subsections. Such election when made in the return shall be irrevocable for the taxable year for which the return is made: Provided, That an individual who is entitled to and claimed for the optional standard deduction shall not be required to submit with his tax return such financial statements otherwise required under this Code: Provided, further, That except when the Commissioner otherwise permits, the said individual shall keep such records pertaining to his gross sales or gross receipts, or the said corporation shall keep such records pertaining to his gross income as defined in Section 32 of this Code during the taxable year, as may be required by the rules and regulations promulgated by the Secretary of Finance, upon, recommendation of the Commissioner.”

    On January 24, 2014, the Bureau of Internal Revenue (BIR) promulgated Revenue Regulations No. 2-2014, which provides:

    “SECTION 5 – Mandatory Itemized Deductions.

    A. Corporations, partnerships and other non-individuals are mandated to use the itemized deductions in the following cases:

    1. Those exempt under the Tax Code, as amended [Section 30 and those exempted under Section 27(C)] and other special laws, with no other taxable income;
    2. Those with income subject to special/preferential tax rates; and
    3. Those with income subject to income tax rate under Section 27(A) and 28(A)(1) of the Tax Code, as amended, and also with income subject to special/preferential tax rates.

    Juridical entities whose taxable base is the gross revenue or receipts (e.g., non-resident foreign international carriers) are not entitled to the itemized deductions nor to the optional standard (OSD) under Section 34(L) of the Tax Code, as amended.

    B. Individual taxpayers who are not entitled to avail of the OSD and thus use only the itemized deduction method are as follows:

    1. Those exempt under the Tax Code, as amended, and other special laws with no other taxable income [e.g. Barangay Micro Business Enterprise (BMBE)];
    2. Those with income subject to special/preferential tax rates; and
    3. Those with income subject to income tax rate under Section 24 of the Tax Code, as amended, and also with income subject to special/preferential tax rates.

    In my layman’s understanding, I feel that the provisions of RR No. 2-2014 have also gone beyond the ambit of the Tax Code.

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  25. TAX ADVICE

    Invoices or receipts generated by CRM, POS and/or business machines are valid as long as the machines are duly-registered with the BIR. However, in case the purchaser is a VAT-registered entity and the concerned CRM/POS is not capable of showing the name, address and TIN of purchaser, a manually pre-printed and pre-numbered sales invoice or official receipt with approved ATP must be requested by the purchaser and must be issued by the seller; otherwise, the purchaser’s claim for input tax will be disallowed. [RR No. 11-2004]

    In case of the issuance of manual invoice/receipt, the CRM/POS-generated invoice or receipt should be attached to the duplicate manual invoice or receipt to avoid a double take-up of sales. Ibid

    Even if the purchaser is Non-VAT-registered, it should request a pre-printed and pre-numbered sales invoice or official receipt and must be issued by the seller, given that the prints on the machine-generated invoice or receipt normally would fade and cannot be preserved for a period of three (3) years within which the taxpayer is required to keep or preserve records or documents for purposes of supporting its claims for purchases/expenses reflected on the tax returns in the event of BIR tax audit/investigation.

    However, just be wary because establishments using CRM/POS machines might inadvertently issue a collection receipt instead of sales invoice or official receipt. Take note that a collection receipt, though allowed, cannot be used as valid support document for purchases or expenses claimed as deduction from gross income and not a valid support for input tax credit because it would not generate input tax.

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  26. TAX ADVICE

    Income tax for Filipino citizen residing in the Philippines.

    The Philippine statute on income taxation for Filipino citizen residing in the Philippines includes and subjects to income tax, all income derived from all sources within and without the Philippines. Consequently, if the income was derived from foreign country, it would be subjected to income tax twice – in the foreign country where the income was earned; and in the Philippines where the citizen resides. Thus, in order to mitigate the burdensome effect of international double taxation, the Philippine statute on income taxation allows tax credit for income tax paid to a foreign country.

    In the case of Congressman Emmanuel “Manny” Pacquiao who is a Filipino citizen residing in the Philippines, all his incomes derived from sources within the Philippines and from any foreign countries are taxable in the Philippines. However, tax/es paid or incurred to any foreign countries shall be credited against his income tax liability as provided under Section 34(C)(3)(a) of the 1997 Tax Code, as amended; subject to limitations on credit provided under Sections 34(C)(4)(a) and 34(C)(4)(b) of the same Code, whichever is applicable.

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  27. advice lang po kung pwedeng maiTAX MAP ang mga susunod na kumpanya
    WISEMAN'S BOOKS TRADING INC
    JOBAL ENTERPRISE
    CRONICA TRADING
    JED CONSTRUCTION
    ang lahat ng apat na kumpanya ay nagooperate gamit ang ibat ibang business address ngunit tumatakbo sa iisang address sa 171 Tandang Sora Street Quezon City. Paki check lang po kung tama ang kanilang pamamalakad sa kanilang mga kumpanya...salamat po

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  28. The CUstomer Service of BIR is soooo bad. The website is sooo slow its seems liketheir doingit on purpose para ma delayka talaga para magkaron ng fine. I tried using different computers na to no avail. I tried calling the number stated on the agreementpage, yungsumagot saking babae at around 1:20 to 1:37ish parang tamad na tamad tapos parang naiinis pa dahil hindi ko maintindihan yng sinasabi niya

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  29. Paki ayos na lang po yung Customer Service para po hindi ma stereo type na pag sinabing ay Government kasi kaya pangit service

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  30. Yung pag register sa website din pakiayos po. Sooobrang bagal pag register!!

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  31. sir/madam I cannot file my application for VAT monthly because I was ask to file on line. I ave attempted to register on line but the TIN NO and CODE does not exist. I have visited the district office and submitted intention to register on line but still I cannot resume my application. The TIN No I am using is the TIN NO issued by the gov. agency where I am employed. I used the same TIN NO when I applied for the printing of official receipts since I am practicing my profession as ARCHITECT.

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  32. sir/madam I cannot file my application for VAT monthly because I was ask to file on line. I ave attempted to register on line but the TIN NO and CODE does not exist. I have visited the district office and submitted intention to register on line but still I cannot resume my application. The TIN No I am using is the TIN NO issued by the gov. agency where I am employed. I used the same TIN NO when I applied for the printing of official receipts since I am practicing my profession as ARCHITECT.

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  33. What will be the steps and process for me to ba able to register / apply on line so that I can file my VAT monthly. I cannot pay the VAT TAX since the district Office does not allow manual. It has been 6 months I cannot pay my VAT tax because of this on line application / registration.

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  34. sira yung register link...help need ko pa naman agad

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  35. panu ko po malalaman ang tin # ko online?

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  36. This comment has been removed by the author.

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