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EXCISE TAX ON REMOVAL OF SWEETENED BEVERAGES PRODUCTS FOR EXPORT (Revenue Regulations No. 10-2021, June 17, 2021)

June 24, 2021

EXCISE TAX ON REMOVAL OF SWEETENED BEVERAGES PRODUCTS FOR EXPORT (Revenue Regulations No. 10-2021, June 17, 2021)

  • The BIR amends pertinent provisions of Section 10 under RR No. 20-2018 relative to the outright exemption granted to the exportation of Sweetened Beverages products.
  • Manufacturer shall pay the excise tax on every removal from the place of production.
  • After payment of tax, manufacturers at its option may file a claim for excise tax credit/refund; or avail of a claim for product replenishment scheme, subject to terms and conditions:
    • Permit shall be per shipment secured from the BIR Office before the product is removed from the place of production;
    • Removed products shall be directly transported, loaded aboard the international shipping vessel or carrier, and shipped directly to the foreign country of destination without returning to the Philippines;
    • Proof of exportation shall be submitted within 30 days from the date of actual date of exportation, subject to one time maximum 30-day extension to submit documents for meritorious reasons;
    • “Exported from the Philippines” is printed on each label that is attached/affixed on the primary container in a recognizable and readable manner.
Effect of failure to submit proof of exportation within the prescribed period
  • Non-exportation of the particular article subjected to applicable taxes, inclusive of penalties;
  • Subsequent issuance of export permits shall not be allowed, unless the assessed tax due on unliquidated export and penalties have been paid;
  • Proof of payment shall accompany subsequent application permit.

 

CLARIFICATIONS ON  TAX TREATY RELIEF APPLICATION/REQUEST FOR CONFIRMATION (RMC No. 77-2021, June 15,2021)

 

The BIR clarifies certain provisions of Revenue Memorandum Order No. 14-2021 related to tax treaty relief application/request for confirmation.

 

 

Who may avail of treaty benefits
  • Natural or juridical persons
  • Residents of one or both of the contracting states
    • Non-resident income recipient should submit a Tax Residency Certificate (TRC) duly issued by the tax authority of the country of residence for purposes of establishing fact of residency in a contracting state
Failure to submit TRC Non-resident’s claim shall be denied.
Where to apply International Tax Affairs Division
 

When provisions of the applicable treaty shall be applied
  • When nonresident submitted to the income payor
    • TRC; and
    • Appropriate BIR Form 0901
  • Prior to the payment of income
  • Provided that all conditions for the availment have been present
 

Mandatory requirement to file a Request for Confirmation (RFC)
  • To be filed by the withholding agent/income payor, domestic or foreign (for nonresident income payor-withholding agent, it is mandatory to appoint a authorized representative in the Philippines)
  • To confirm that the tax treatment of such income is proper
  • Income payor may authorize the nonresident or any other person to file such request for an on its behalf, provided that the latter is required with special power of attorney.
 

Deadlines

 

  

Capital Gains
  • At any time after the transaction
  • But shall not be later than the last day of the 4th month following the taxable year when the income is paid or when the transaction is consummated
 

Other types of income
  • At any time after the close of the taxable year
  • But not later than the last day of the 4th month following the close of such taxable year when the income is paid or becomes payable, or when the expense/asset is accrued or recorded in the books, whichever comes first
Consolidated request for confirmation per nonresident income recipient Case folder shall be pre-arranged per type of income following the sequence of documents in the list of requirements.
 

Number of TRC in case of multiple income for the year
  • 1 original and authenticated TRC to be submitted to each income payor/withholding agent per year.
  • Alternatively, a certified true copy of the original may be submitted to other payors if the original copy is no longer available, with a notation as to whom the original copy was previously submitted.
  • Same rule applies to the following:
    • Proof of establishment or incorporation
    • Certificate of Non-registration or License to Do Business in PH by SEC
    • Certificate of Business Registration/Presence by DTI
When regular rate was applied instead of treaty rate Nonresident or authorized representative, should file a TTRA with complete documentary requirements and a claim for refund at any time after the payment of the withholding tax
 

When annual updating is/not mandatory

  

In case of long term contracts involving payment of interest and royalties and other types of income where condition for entitlement to treaty benefits is not dependent on time threshold

 

  

  • Not mandatory.
  • BIR will issue a one-time Certificate of Entitlement to Treaty Benefit (COE) that is presumably valid for the whole duration of the contract as long as there is no relevant and significant change in the facts or circumstances on which the ruling is based; new request for confirmation to be filed in case of material changes in the facts or circumstances.

 
In case of long term contracts where the existence of permanent establishment is dependent on the time threshold

 
  • Annual updating is mandatory;
  • COE is limited to a particular period of engagement.
 

Proof that income is not effectively connected with  permanent establishment of the nonresident foreign enterprise
  • AFS of the foreign enterprise; if not available, sworn certification signed by the principal officer of the PE, containing material facts that may lead the BIR to believe that the income is not effectively connected with the PE and that the PE is not material to the realization of such income.
  • ITAD may also require AFS of the PE if the same is already available
 

Proof that interest on loan or debt-claims is arm’s length in case of related parties debtor and creditor
  • Transfer pricing documentation of the nonresident creditor;
  •  If unavailable, transfer pricing policy for intercompany loans or any equivalent transfer pricing study
 

Audited interim FS for capital gains transactions
  • Not mandatory; only preferred for purposes of computing the real property interest of the issuing domestic corporation at the time of the transaction.
  • Alternative documents:
    • Unaudited interim FS; and
    • Lapsing schedule as of the date of transfer or alienation of the property
No automatic denial for failure to file the RFC within the prescribed period Denials will purely be based on the merits of the case; only penalty for late filing shall be imposed
Extension of time within which to submit additional documents Not exceeding 30 days
 

Pending TTRAs within Notice to Submit Additional Documents
  • Final Notice to Submit Additional Documents shall be issued within 3 months period to comply
  • Archived applications: Final Notice will no longer be issued but taxpayer is given 4 months to comply
COE instead of usual BIR ruling COE will still contain the material facts of the case and a ruling confirming entitlement to treaty benefit
No TTRA or CORTT Form filed for income payments in 2020 and prior years Withholding agent has until the last working day of this year to file the RFC with complete requirements

 
AFS as requirement for dividends AFS as of the taxable year immediately preceding the date of declaration, which was duly filed with the BIR and SEC

Show More

EXCISE TAX ON REMOVAL OF SWEETENED BEVERAGES PRODUCTS FOR EXPORT (Revenue Regulations No. 10-2021, June 17, 2021)

  • The BIR amends pertinent provisions of Section 10 under RR No. 20-2018 relative to the outright exemption granted to the exportation of Sweetened Beverages products.
  • Manufacturer shall pay the excise tax on every removal from the place of production.
  • After payment of tax, manufacturers at its option may file a claim for excise tax credit/refund; or avail of a claim for product replenishment scheme, subject to terms and conditions:
    • Permit shall be per shipment secured from the BIR Office before the product is removed from the place of production;
    • Removed products shall be directly transported, loaded aboard the international shipping vessel or carrier, and shipped directly to the foreign country of destination without returning to the Philippines;
    • Proof of exportation shall be submitted within 30 days from the date of actual date of exportation, subject to one time maximum 30-day extension to submit documents for meritorious reasons;
    • “Exported from the Philippines” is printed on each label that is attached/affixed on the primary container in a recognizable and readable manner.
Effect of failure to submit proof of exportation within the prescribed period
  • Non-exportation of the particular article subjected to applicable taxes, inclusive of penalties;
  • Subsequent issuance of export permits shall not be allowed, unless the assessed tax due on unliquidated export and penalties have been paid;
  • Proof of payment shall accompany subsequent application permit.

 

CLARIFICATIONS ON  TAX TREATY RELIEF APPLICATION/REQUEST FOR CONFIRMATION (RMC No. 77-2021, June 15,2021)

 

The BIR clarifies certain provisions of Revenue Memorandum Order No. 14-2021 related to tax treaty relief application/request for confirmation.

 

 

Who may avail of treaty benefits
  • Natural or juridical persons
  • Residents of one or both of the contracting states
    • Non-resident income recipient should submit a Tax Residency Certificate (TRC) duly issued by the tax authority of the country of residence for purposes of establishing fact of residency in a contracting state
Failure to submit TRC Non-resident’s claim shall be denied.
Where to apply International Tax Affairs Division
 

When provisions of the applicable treaty shall be applied
  • When nonresident submitted to the income payor
    • TRC; and
    • Appropriate BIR Form 0901
  • Prior to the payment of income
  • Provided that all conditions for the availment have been present
 

Mandatory requirement to file a Request for Confirmation (RFC)
  • To be filed by the withholding agent/income payor, domestic or foreign (for nonresident income payor-withholding agent, it is mandatory to appoint a authorized representative in the Philippines)
  • To confirm that the tax treatment of such income is proper
  • Income payor may authorize the nonresident or any other person to file such request for an on its behalf, provided that the latter is required with special power of attorney.
 

Deadlines

 

  

Capital Gains
  • At any time after the transaction
  • But shall not be later than the last day of the 4th month following the taxable year when the income is paid or when the transaction is consummated
 

Other types of income
  • At any time after the close of the taxable year
  • But not later than the last day of the 4th month following the close of such taxable year when the income is paid or becomes payable, or when the expense/asset is accrued or recorded in the books, whichever comes first
Consolidated request for confirmation per nonresident income recipient Case folder shall be pre-arranged per type of income following the sequence of documents in the list of requirements.
 

Number of TRC in case of multiple income for the year
  • 1 original and authenticated TRC to be submitted to each income payor/withholding agent per year.
  • Alternatively, a certified true copy of the original may be submitted to other payors if the original copy is no longer available, with a notation as to whom the original copy was previously submitted.
  • Same rule applies to the following:
    • Proof of establishment or incorporation
    • Certificate of Non-registration or License to Do Business in PH by SEC
    • Certificate of Business Registration/Presence by DTI
When regular rate was applied instead of treaty rate Nonresident or authorized representative, should file a TTRA with complete documentary requirements and a claim for refund at any time after the payment of the withholding tax
 

When annual updating is/not mandatory

  

In case of long term contracts involving payment of interest and royalties and other types of income where condition for entitlement to treaty benefits is not dependent on time threshold

 

  

  • Not mandatory.
  • BIR will issue a one-time Certificate of Entitlement to Treaty Benefit (COE) that is presumably valid for the whole duration of the contract as long as there is no relevant and significant change in the facts or circumstances on which the ruling is based; new request for confirmation to be filed in case of material changes in the facts or circumstances.

 
In case of long term contracts where the existence of permanent establishment is dependent on the time threshold

 
  • Annual updating is mandatory;
  • COE is limited to a particular period of engagement.
 

Proof that income is not effectively connected with  permanent establishment of the nonresident foreign enterprise
  • AFS of the foreign enterprise; if not available, sworn certification signed by the principal officer of the PE, containing material facts that may lead the BIR to believe that the income is not effectively connected with the PE and that the PE is not material to the realization of such income.
  • ITAD may also require AFS of the PE if the same is already available
 

Proof that interest on loan or debt-claims is arm’s length in case of related parties debtor and creditor
  • Transfer pricing documentation of the nonresident creditor;
  •  If unavailable, transfer pricing policy for intercompany loans or any equivalent transfer pricing study
 

Audited interim FS for capital gains transactions
  • Not mandatory; only preferred for purposes of computing the real property interest of the issuing domestic corporation at the time of the transaction.
  • Alternative documents:
    • Unaudited interim FS; and
    • Lapsing schedule as of the date of transfer or alienation of the property
No automatic denial for failure to file the RFC within the prescribed period Denials will purely be based on the merits of the case; only penalty for late filing shall be imposed
Extension of time within which to submit additional documents Not exceeding 30 days
 

Pending TTRAs within Notice to Submit Additional Documents
  • Final Notice to Submit Additional Documents shall be issued within 3 months period to comply
  • Archived applications: Final Notice will no longer be issued but taxpayer is given 4 months to comply
COE instead of usual BIR ruling COE will still contain the material facts of the case and a ruling confirming entitlement to treaty benefit
No TTRA or CORTT Form filed for income payments in 2020 and prior years Withholding agent has until the last working day of this year to file the RFC with complete requirements

 
AFS as requirement for dividends AFS as of the taxable year immediately preceding the date of declaration, which was duly filed with the BIR and SEC
Show More

SALE OF HOUSE AND LOT AND OTHER RESIDENTIAL DWELLINGS IS EXEMPT FROM VAT FOR SELLING PRICE NOT EXCEEDING P3,199,200.00 DESPITE THE TRAIN LAW; AUTHORITY TO RELEASE IMPORTED GOODS SHALL NO LONGER BE ISSUED FOR COVID-19 EQUIPMENT.

June 14, 2021

 

 Transaction  Amendments
  • Sale of house and lot and other residential dwellings
 Exempt from VAT for selling price not exceeding P3,199,200.00
  • Release of the following imported items:
    • Capital equipment, its spare parts and raw materials, necessary for the production of personal protective equipment components such as coveralls, gown, surgical cap, surgical mask, n-95 mask, scrub suits, goggles and face shield, double or surgical gloves, dedicated shoes and  covers, for COVID-19 prevention
    • All drugs, vaccines, and medical devices specifically prescribed and directly used for the treatment of COVID-19; and
    • Drugs for the treatment of COVID-19 approved by the Food and Drug Administration (FDA) for use in clinical trials, including raw materials directly necessary for the production of such drugs.
 The importation shall not be subject to the issuance of the Authority to Release Imported Goods (ATRIG) under Revenue Memorandum Order No. 35-2002
Overpayment of taxes as result of decrease of tax rate from 3% to 1% Percentage taxpayers who have overpaid taxes as a result of the decrease of tax rate from 3% to 1% starting July 1, 2020 until the effectivity of RR No. 4-2021 are allowed for a tax refund in the event that:

  • The taxpayer shifted from Non-VAT to VAT-registered status; or
  •  The taxpayer has opted to avail of the 8% income tax rate at the beginning of TY 2021

 

TRANSACTIONS NOW SUBJECT TO VAT: SALE OF RAW MATERIALS TO NONRESIDENT BUYER, RAW MATERIALS OR PACKAGING MATERIALS TO EXPORT ORIENTED ENTERPRISE AND SALES UNDER EXECUTIVE ORDER NO. 226, PROCESSING, MANUFACTURING OR REPACKAGING GOODS FOR PERSONS DOING BUSINESS OUTSIDE THE PHILIPPINES.

 

The BIR amends certain provisions of RR No. 16-2005, as amended by RR No. 13-2018 and as further amended by RR No. 26-2018, to implement the imposition of 12% VAT on transactions covered under Section 106 (A)(2)(a) subparagraphs (3), (4), and (5), and Section 108(B) subparagraphs (1) and (5) of the NIRC of 1997, as amended by RA No. 10963 (TRAIN Law) (RR No. 9-2021, June 11, 2021)

 

Transactions that are now subject to 12%
Transactions considered as export sales:

 
  • Sale of raw materials or packaging materials to a non-resident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods and paid for in acceptable foreign currency, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)
  • Sale of raw materials or packaging materials to export-oriented enterprise whose export sales exceed seventy percent (70%) of total annual production
  • Those considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special law
The sale of sale of services and use or lease of properties

 
  • Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)
  • Services performed by subcontractors and/or contractors in processing, converting or manufacturing goods for an enterprise whose export sales exceed 70% of the total annual production

 

BIR RULINGS

Sale executed by landowners in favor of the municipal government to be used for socialized housing project (449 housing units) under the National Housing Authority Yolanda Permanent Housing Program is not subject to creditable withholding tax/capital gains tax and VAT but subject to documentary stamp tax based on actual consideration of the property. Certificate Authorizing Registration is required to be issued. A lien on the titles of the land shall be annotated to the effect that the same are to be applied or are being applied to a socialized housing project. (Certificate of Tax Exemption No. PSH-006-21 January 18, 2021; see also Certificate of Tax Exemption No. PSH-007-21, January 18, 2021 and Certificate of Tax Exemption No. JV-009-21, January 27, 2021, Certificate of Tax Exemption No. NSH-011-21, February 2, 2021)

When  assets are abandoned or discarded because the continued use is no longer beneficial to the business, the related loss may be claimed as deduction. The remaining book value of the property which had become obsolete and which will eventually be dismantled shall be allowed as deduction for income tax purposes when the facility is demolished. However, while obsolescence is, by nature, allowed as a deduction, the determination of the factual case leading to the determination of whether or not there is obsolescence is a factual issue beyond the jurisdiction of a ruling to confirm (BIR Ruling No. OT-008-21, January 21, 2021)

The BIR cannot issue a determinative ruling on a matter if the issue is still subject of an on-going audit/administrative protest, which is considered a “Non-Ruling Area” (BIR Ruling No. OT-010-21, February 1, 2021)

Show More

 

 Transaction  Amendments
  • Sale of house and lot and other residential dwellings
 Exempt from VAT for selling price not exceeding P3,199,200.00
  • Release of the following imported items:
    • Capital equipment, its spare parts and raw materials, necessary for the production of personal protective equipment components such as coveralls, gown, surgical cap, surgical mask, n-95 mask, scrub suits, goggles and face shield, double or surgical gloves, dedicated shoes and  covers, for COVID-19 prevention
    • All drugs, vaccines, and medical devices specifically prescribed and directly used for the treatment of COVID-19; and
    • Drugs for the treatment of COVID-19 approved by the Food and Drug Administration (FDA) for use in clinical trials, including raw materials directly necessary for the production of such drugs.
 The importation shall not be subject to the issuance of the Authority to Release Imported Goods (ATRIG) under Revenue Memorandum Order No. 35-2002
Overpayment of taxes as result of decrease of tax rate from 3% to 1% Percentage taxpayers who have overpaid taxes as a result of the decrease of tax rate from 3% to 1% starting July 1, 2020 until the effectivity of RR No. 4-2021 are allowed for a tax refund in the event that:

  • The taxpayer shifted from Non-VAT to VAT-registered status; or
  •  The taxpayer has opted to avail of the 8% income tax rate at the beginning of TY 2021

 

TRANSACTIONS NOW SUBJECT TO VAT: SALE OF RAW MATERIALS TO NONRESIDENT BUYER, RAW MATERIALS OR PACKAGING MATERIALS TO EXPORT ORIENTED ENTERPRISE AND SALES UNDER EXECUTIVE ORDER NO. 226, PROCESSING, MANUFACTURING OR REPACKAGING GOODS FOR PERSONS DOING BUSINESS OUTSIDE THE PHILIPPINES.

 

The BIR amends certain provisions of RR No. 16-2005, as amended by RR No. 13-2018 and as further amended by RR No. 26-2018, to implement the imposition of 12% VAT on transactions covered under Section 106 (A)(2)(a) subparagraphs (3), (4), and (5), and Section 108(B) subparagraphs (1) and (5) of the NIRC of 1997, as amended by RA No. 10963 (TRAIN Law) (RR No. 9-2021, June 11, 2021)

 

Transactions that are now subject to 12%
Transactions considered as export sales:

 
  • Sale of raw materials or packaging materials to a non-resident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer’s goods and paid for in acceptable foreign currency, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)
  • Sale of raw materials or packaging materials to export-oriented enterprise whose export sales exceed seventy percent (70%) of total annual production
  • Those considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special law
The sale of sale of services and use or lease of properties

 
  • Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)
  • Services performed by subcontractors and/or contractors in processing, converting or manufacturing goods for an enterprise whose export sales exceed 70% of the total annual production

 

BIR RULINGS

Sale executed by landowners in favor of the municipal government to be used for socialized housing project (449 housing units) under the National Housing Authority Yolanda Permanent Housing Program is not subject to creditable withholding tax/capital gains tax and VAT but subject to documentary stamp tax based on actual consideration of the property. Certificate Authorizing Registration is required to be issued. A lien on the titles of the land shall be annotated to the effect that the same are to be applied or are being applied to a socialized housing project. (Certificate of Tax Exemption No. PSH-006-21 January 18, 2021; see also Certificate of Tax Exemption No. PSH-007-21, January 18, 2021 and Certificate of Tax Exemption No. JV-009-21, January 27, 2021, Certificate of Tax Exemption No. NSH-011-21, February 2, 2021)

When  assets are abandoned or discarded because the continued use is no longer beneficial to the business, the related loss may be claimed as deduction. The remaining book value of the property which had become obsolete and which will eventually be dismantled shall be allowed as deduction for income tax purposes when the facility is demolished. However, while obsolescence is, by nature, allowed as a deduction, the determination of the factual case leading to the determination of whether or not there is obsolescence is a factual issue beyond the jurisdiction of a ruling to confirm (BIR Ruling No. OT-008-21, January 21, 2021)

The BIR cannot issue a determinative ruling on a matter if the issue is still subject of an on-going audit/administrative protest, which is considered a “Non-Ruling Area” (BIR Ruling No. OT-010-21, February 1, 2021)

Show More

THE SEC EXTENDS THE DEADLINE TO SUBMIT MANDATORY DECLARATIONS UNDER BENEFICIAL OWNERSHIP GUIDELINES TO JULY 31, 2021 (SEC Notice, May 28, 2021)

June 1, 2021

SECURITIES AND EXCHANGE COMMISSION

 

THE SEC EXTENDS THE DEADLINE TO SUBMIT MANDATORY DECLARATIONS UNDER BENEFICIAL OWNERSHIP GUIDELINES TO JULY 31, 2021 (SEC Notice, May 28, 2021)

 

BUREAU OF INTERNAL REVENUE

 

QUARTERLY RETURNS TO BE USED TO REFLECT NEW RATES UNDER CREATE LAW

 

  • The BIR prescribes the guidelines in the filing of Quarterly Percentage Tax Return (BIR Form No. 2551Q) starting on the quarter ending July 31, 2020

 

 

BIR Form No. 1702Q January 2018
  • Available in EFPS
  • Reduced rate per CREATE Act is included.
  • EFPS files may also use 1702Q using Offline e-BIR Forms Package v.7.9.1, but shall proceed to payment using the eFPS facility. (RMC No. 68-2021, May 26, 2021)
 

BIR Form No. 1702Qv2008C
  • 2008 version shall be used for eBIR Forms
  • 2018 version is not yet available
  • Version is available in eBIR Forms Package v.9.1
  • Payment may be made either manually or online

 

  •  Revenue Memorandum Circular  66-2021, May 24, 2021 and Revenue Memorandum Circular  68-2021, May 26, 2021

 

CLARIFICATIONS ON REDUCTION OF PERCENTAGE TAX FROM 3% TO 1%

 

  • The BIR clarifies the issues relative to the temporary reduction of Percentage Tax rate imposed under Section 116 of the NIRC of 1997, as amended by Section 13 of RA No. 11534 (CREATE Act)

 

Points for clarification Treatment
Decrease of percentage tax rate from 3% to 1%

(July 1, 2020 to June 30, 2023)

 Applies to:

  • Corporate taxpayers and Self-employed individuals and professionals; and
  • Whose gross sales or receipts do not exceed P3 Million

Exception: Cooperatives and self-employed individuals and professionals availing 8% income tax rate
Non-VAT registered taxpayers who used 3% for Q3 and Q4 of 2020 to effectivity of IRR (RR 40-2021 April 8, 2021) implementing percentage tax
  • They need to amend their percentage tax using the 1% rate to reflect the overpaid tax.
  • Overpaid tax to be carried over the succeeding period will not be subject to penalty

 

 In case 2551Q Form only provides refund:

  • In case of manual filing - Don’t mark “to be refunded” or “to be issued TCC” but write “To be Carried Over”

In case of eFPS and eBIR Forms:

  • Option “to be Issued Tax Credit Certificate” shall be marked as a workaround procedure
  • Presumption: taxpayer will carry over
  • If refund is applicable, file BIR From 1914 (Application for tax credit/refund)

 
Refund for overpaid tax
  • Refund is not allowed because the intention is to carry-over the overpaid percentage tax.
  • Exception:
    • Taxpayer shifted from Non-VAT to VAT-registered status; or
    • Taxpayer has opted to avail of 8% income tax rate at the beginning of 2021
Taxpayer inadvertently marked refund or issuance of TCC but intends carry over
  • Presumption: Overpaid amount will be carried over.
  • Once carried-forward, the option is automatically superseded.
Carry-over without amendment of return to any quarter/s starting 2020 Carry-over will still be allowed.
Individual taxpayer under a job order or service agreement with the government under substituted filing
  • The government agency will avail of the refund.
  • Individuals shall issue an authorization and surrender the BIR Form 2306 to the government agency.
  • Government agencies shall amend the previously filed returns including the Alphalists but the reduction or resulting overpayment shall only be to the extent of the amount to be refunded.
Taxpayer claimed as deduction under taxes and licenses in 2020 ITR the overpaid percentage tax Carry-over or refund shall no longer be allowed.
Adjustment in the audited financial statements AFS need not be amended, but overpayment shall be reflected as a reconciling item in the amended ITR.

 

(Revenue Memorandum Circular  67-2021, May 24, 2021)

 

Show More

SECURITIES AND EXCHANGE COMMISSION

 

THE SEC EXTENDS THE DEADLINE TO SUBMIT MANDATORY DECLARATIONS UNDER BENEFICIAL OWNERSHIP GUIDELINES TO JULY 31, 2021 (SEC Notice, May 28, 2021)

 

BUREAU OF INTERNAL REVENUE

 

QUARTERLY RETURNS TO BE USED TO REFLECT NEW RATES UNDER CREATE LAW

 

  • The BIR prescribes the guidelines in the filing of Quarterly Percentage Tax Return (BIR Form No. 2551Q) starting on the quarter ending July 31, 2020

 

 

BIR Form No. 1702Q January 2018
  • Available in EFPS
  • Reduced rate per CREATE Act is included.
  • EFPS files may also use 1702Q using Offline e-BIR Forms Package v.7.9.1, but shall proceed to payment using the eFPS facility. (RMC No. 68-2021, May 26, 2021)
 

BIR Form No. 1702Qv2008C
  • 2008 version shall be used for eBIR Forms
  • 2018 version is not yet available
  • Version is available in eBIR Forms Package v.9.1
  • Payment may be made either manually or online

 

  •  Revenue Memorandum Circular  66-2021, May 24, 2021 and Revenue Memorandum Circular  68-2021, May 26, 2021

 

CLARIFICATIONS ON REDUCTION OF PERCENTAGE TAX FROM 3% TO 1%

 

  • The BIR clarifies the issues relative to the temporary reduction of Percentage Tax rate imposed under Section 116 of the NIRC of 1997, as amended by Section 13 of RA No. 11534 (CREATE Act)

 

Points for clarification Treatment
Decrease of percentage tax rate from 3% to 1%

(July 1, 2020 to June 30, 2023)

 Applies to:

  • Corporate taxpayers and Self-employed individuals and professionals; and
  • Whose gross sales or receipts do not exceed P3 Million

Exception: Cooperatives and self-employed individuals and professionals availing 8% income tax rate
Non-VAT registered taxpayers who used 3% for Q3 and Q4 of 2020 to effectivity of IRR (RR 40-2021 April 8, 2021) implementing percentage tax
  • They need to amend their percentage tax using the 1% rate to reflect the overpaid tax.
  • Overpaid tax to be carried over the succeeding period will not be subject to penalty

 

 In case 2551Q Form only provides refund:

  • In case of manual filing – Don’t mark “to be refunded” or “to be issued TCC” but write “To be Carried Over”

In case of eFPS and eBIR Forms:

  • Option “to be Issued Tax Credit Certificate” shall be marked as a workaround procedure
  • Presumption: taxpayer will carry over
  • If refund is applicable, file BIR From 1914 (Application for tax credit/refund)

 
Refund for overpaid tax
  • Refund is not allowed because the intention is to carry-over the overpaid percentage tax.
  • Exception:
    • Taxpayer shifted from Non-VAT to VAT-registered status; or
    • Taxpayer has opted to avail of 8% income tax rate at the beginning of 2021
Taxpayer inadvertently marked refund or issuance of TCC but intends carry over
  • Presumption: Overpaid amount will be carried over.
  • Once carried-forward, the option is automatically superseded.
Carry-over without amendment of return to any quarter/s starting 2020 Carry-over will still be allowed.
Individual taxpayer under a job order or service agreement with the government under substituted filing
  • The government agency will avail of the refund.
  • Individuals shall issue an authorization and surrender the BIR Form 2306 to the government agency.
  • Government agencies shall amend the previously filed returns including the Alphalists but the reduction or resulting overpayment shall only be to the extent of the amount to be refunded.
Taxpayer claimed as deduction under taxes and licenses in 2020 ITR the overpaid percentage tax Carry-over or refund shall no longer be allowed.
Adjustment in the audited financial statements AFS need not be amended, but overpayment shall be reflected as a reconciling item in the amended ITR.

 

(Revenue Memorandum Circular  67-2021, May 24, 2021)

 

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SALE OF HOUSE AND LOT AND OTHER RESIDENTIAL DWELLINGS IS EXEMPT FROM VAT FOR SELLING PRICE NOT EXCEEDING P3,199,200.00 DESPITE THE TRAIN LAW; AUTHORITY TO RELEASE IMPORTED GOODS SHALL NO LONGER BE ISSUED FOR COVID-19 EQUIPMENT.

June 14, 2021

The BIR amended certain provisions of RR No. 4-2021, which implemented the VAT and Percentage Tax provisions under RA No. 11534 (CREATE Act) (Revenue Regulations No. 8-2021, June 11, 2021)    Transaction  Amendments Sale of house and lot and other residential dwellings Exempt from VAT for selling price not exceeding P3,199,200.00 Release

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