THE BIR EXTENDS THE AVAILABILITY OF VOLUNTARY ASSESSMENT AND PAYMENT PROGRAM (VAPP) UNTIL JUNE 30, 2021; EFFECTS OF APPLICATION OF VAPP; GROUNDS AND EFFECT OF DENIAL/INVALIDITY OF VAPP APPLICATION.

 

THE BIR LIMITS THE TAXPAYERS REQUIRED TO FILE AND SUBMIT RELATED-PARTY TRANSACTION (RPT) FORM TO (A) LARGE TAXPAYERS, (B) TAXPAYERS ENJOYING TAX INCENTIVES,  (C) TAXPAYERS REPORTING NET OPERATING LOSSES FOR THE CURRENT TAXABLE YEAR AND THE IMMEDIATELY PRECEDING 2 CONSECUTIVE YEARS AND (C) A RELATED PARTY WITH TRANSACTION WITH THE FOREGOING; BIR ALSO SETS MATERIALITY THRESHOLDS FROM PHP15 MILLION TO PHP150 MILLION DEPENDING ON TRANSACTIONS; TRANSFER PRICING DOCUMENTATION NEED NOT BE ATTACHED TO THE RPT FORM BUT SHALL BE SUBMITTED WITHIN 30 DAYS UPON REQUEST ON AUDIT; OTHER MATTERS.

  1. Large Taxpayers;
  2. Taxpayers enjoying tax incentives, i.e.Board of Investments (BOI)-registered and economic zone enterprises, those enjoying Income Tax Holiday (ITH) or subject to preferential income tax rate;
  3. Taxpayers reporting net operating losses for the current taxable year and the immediately preceding two (2) consecutive taxable years; and
  4.  A related party, as defined under Section 3 of Revenue Regulations (RR) No. 19- 2020, which has transactions with (a), (b) or (c).

 

a. Taxpayers with Annual Gross Sales/Revenue for the subject taxable period If it exceeds P150,000,000.00*
Taxpayers with Total Amount of Related Party Transaction with foreign and domestic related parties If it exceeds P90,000,000.00*
b. RPT meeting the following threshold: sale of tangible goods If it exceeds P60,000,000 within the taxable year
RPT meeting the following threshold: service transaction, payment of interest, utilization of intangible goods or other related party transaction

 

If it exceeds P15,000,000 within the taxable year
c. If TPD is required to be prepared during the immediately preceding taxable period for exceeding (a) or (b) above.
*The following items are included in computing he threshold:

· Amounts received and/or receivable from related parties or paid and/or payable to related parties during the taxable year. Excluded: compensation paid to key management personnel, dividends, and branch profit remittances; and

· Outstanding balance of loans and non-trade amounts due from/to all related parties.

RPT covered by the Advance Pricing Agreement is no longer required to be disclosed in the RPT Form but shall be included in the computation of the RPT

 

 

 THE BIR PROVIDES THE REQUIREMENTS AND APPLICATION FORM IN PROCESSING THE TAX RESIDENCE CERTIFICATE; FAILURE TO SECURE TRC SHALL DISALLOW THE TAXPAYER FROM CLAIMING FOREIGN TAX CREDIT IN THE PHILIPPINES IN EXCESS OF THE TREATY BENEFIT.

A NON-RESIDENT FOREIGN CORPORATION (“NRFC”) MAY OPT TO AVAIL OF THE 15% REDUCED DIVIDEND RATE ON INTERCOMPANY DIVIDENDS PAID BY A DOMESTIC CORPORATION IRRESPECTIVE OF WHETHER DOUBLE TAX CONVENTION OR TAX TREATY EXISTS BETWEEN THE PHILIPPINES AND ITS COUNTRY OF RESIDENCE; IF THE TAXPAYER IS NOT ENTITLED TO THE REDUCED RATE UNDER THE TAX CODE, THE TREATY RATE SHALL AUTOMATICALLY BE APPLIED PROVIDED THAT THE NRFC IS ABLE TO PROVE ITS ENTITLEMENT TO THE BENEFITS PROVIDED UNDER THE TREATY; REQUIREMENTS.

THE BIR CONSOLIDATES AND UPDATES THE GUIDELINES AND PROCEDURES ON THE PROCESSING OF CLAIMS FOR VALUE-ADDED TAX CREDIT/REFUND, EXCEPT THOSE UNDER THE AUTHORITY AND JURISDICTION OF THE LEGAL GROUP.

Processing Office Amount of Claim Approving Revenue Official
VAT Credit Audit Division (VCAD) Not more than P50 Million Assistant Commissioner (ACIR)

Assessment Service

More than P50 Million up to P150 Million Deputy Commissioner

Operations Group

More than P150 Million Commissioner
Large Taxpayers Audit Division (LTAD) under Large Taxpayers Service (LTS) Regardless of amount ACIR -LTS
Revenue District Office Regardless of amount Regional Directo

For your reference, the regulation may be accessed HERE. (Revenue Memorandum Order No. 47-2020, December 23, 2020)