GUIDANCE ON THE FILING OF REQUEST FOR CONFIRMATION, TAX TREATY RELIEF APPLICATIONS AND TAX SPARING APPLICATIONS (Revenue Memorandum Circular No. 20-2022, February 17, 2022)
- Taxpayers already issued with Certificate of Entitlement to Treaty Benefit (“COE”), with the tenor thereof allowing the ruling to be applied to subsequent or future income payments, shall no longer need to file a Request for Confirmation (“RFC”) or Tax Treaty Relief Application (“TTRA”) every time an income of a similar nature is paid to the same non-resident.
- In applying the confirmed treaty benefit to future income payments, the income payor or withholding agent shall always be guided by the requisites mentioned in the COE. Thus, if the COE mentions tax residency as a requisite for continuous enjoyment of the treaty benefit, the income payor must require the non-resident to submit first a Tax Residency Certificate (“TRC”) for such relevant year before making any payments.
- The same rule applies to the Certificate of Entitlement to the Reduced Dividend Rate for tax sparing applications.
- A new RFC, TTRA or tax sparing application shall only be filed if any of the requisites mentioned in the certificate is absent.
- During tax audits, the income payor shall submit or present a copy of the duly issued COE and proof of satisfaction of the requisites cited therein.
- Regular Filing of RFCs and TTRAs
- For business profits, income from services, capital gains, income derived by teachers, and such other income from non-recurring transactions, the RFCs or TTRAs shall still be filed following the procedures and requirements under RMO No. 14-2021, as amended by RMC No. 77-2021
- For the annual updating of long-term contract of services, taxpayer shall only submit the following:
- TRC of the non-resident for the relevant year;
- Sworn Certification stating services provided by the foreign enterprise, place of performance of such services, individuals who rendered the services on behalf of the foreign enterprise (positions, designations, and professional background), duration of stay in the Philippines.
- Certified true copy of their passports or a certification duly issued by the Bureau of Immigration stating their dates of arrival and departure from the Philippines;
- Certificate of Completion of the project duly signed by the income recipient and duly accepted by the domestic income payor, if applicable;
- Invoice(s) duly issued by the income recipient in accordance with the invoicing requirements of the country of residence, if applicable; and
Bank documents/certificate of deposit/telegraphic transfer/telex/money transfer evidencing the payment/remittance of income, if applicable.
