THE SEC ALLOWS FINANCING COMPANIES (FC), LENDING COMPANIES (LC), AND ACCREDITED MICROFINANCE NGOS (MF-NGO) A STAGGERED BOOKING OF PROVISION FOR CREDIT LOSSES FOR ANNUAL PERIOD ENDING ON OR AFTER DECEMBER 31, 2020 (TO CONSIDER THOSE WITH FISCAL YEAR-END) FOR A MAXIMUM PERIOD OF FIVE (5) YEARS USING STRAIGHT-LINE AMORTIZATION METHOD TO BE RECOGNIZED IN THE PROFIT OR LOSS.

• The SEC provides financial reporting relief for FCs, LCs, and accredited MG-NGOs.
• It allows a staggered booking of provision for credit losses for annual period ending on or after December 31, 2020 (to consider those with fiscal year-end) for a maximum period of five (5) years using straight-line amortization method to be recognized in the profit or loss.
• The said entities should prepare the audited financial statement in accordance with an industry-specific framework. SEC also prescribes the wordings to be provided.
• The said entities should also provide disclosure on the impact of the relief.
• For your easy reference, the Circular may be accessed (SEC Memorandum Circular No. 35, December 28, 2020).

THE SEC NOTIFIES THE PUBLIC OF ITS PAYMENT FACILITIES.

• For your easy reference, the Circular may be accessed (SEC Notice, 8 January 2021).

BUREAU OF INTERNAL REVENUE

BIR DEADLINES FROM JANUARY 18 TO 24, 2021 . A gentle reminder on the following deadlines, as may be applicable:

NET OPERATING LOSS FOR TAXABLE YEARS 2020 AND 2021 SHALL BE ALLOWED TO BE CARRIED OVER AS A DEDUCTION FOR THE NEXT FIVE (5) CONSECUTIVE TAXABLE YEARS IMMEDIATELY FOLLOWING THE YEAR OF SUCH LOSS; A FISCAL YEAR (FY) WILL FALL ON A PARTICULAR TAXABLE YEAR DEPENDING ON THE NUMBER OF MONTHS IT HAS ON THE TWO (2) YEARS INVOLVED; THOSE COMPANIES WITH FISCAL YEARS ENDING BEFORE JULY 31, 2020 AND FISCAL YEARS ENDING AFTER JUNE 30,2022 WHICH INCURRED NET OPERATING LOSS ARE ONLY ALLOWED TO CARRY-OVER THE LOSS FOR THE NEXT THREE (3) CONSECUTIVE TAXABLE YEARS.

• The BIR clarifies Revenue Regulations No. 25-2020 on the availment of NOLCO for taxpayers adopting fiscal year. The said Regulations, in conformity with the law, stated that, “unless otherwise disqualified from claiming the deduction, the business or enterprise which incurred net operating loss for taxable years 2020 and 2021 shall be allowed to carry over the same as a deduction from its gross income for the next five (5) consecutive taxable years immediately following the year of such loss.”
• Under existing revenue issuances, a fiscal year (FY) will fall on a particular taxable year depending on the number of months it has on the two (2) years involved. Thus, a FY ending on March 31, 2020 will fall on the taxable year 2019 since it has nine (9) months in 2019 and only three (3) months in2020. In the case of FY ending on June 30,2021, the beginning of which is July 1, 2020, it is considered as taxable year 2020 since it has more days in 2020 (184 days) than in 2021 (181 days).
• Based on the above, the following FY ending on the stated months are counted as:

• Those companies with fiscal years ending before July 31, 2020 and fiscal years ending after June 30,2022 which incurred net operating loss are only allowed to carry-over the loss as a deduction from its gross income for the next three (3) consecutive taxable years. They cannot avail of the extended period to carry-over the loss for another two (2) years.
• For your reference, a copy of the issuance may be accessed (Revenue Memorandum Circular No. 138-2020, December 22, 2020)

THE BIR PRESCRIBES THE GUIDELINES IN THE FILING OF TAX RETURNS, INCLUDING THE REQUIRED ATTACHMENTS, AND PAYMENT OF INTERNAL REVENUE TAXES.

• For your reference, a copy of the issuance may be accessed (Revenue Memorandum Circular No. 4-2021, January 8, 2021).

 TAXPAYERS INTENDING TO USE COMPUTERIZED ACCOUNTING SYSTEM (CAS), COMPUTERIZED BOOKS OF ACCOUNTS (CBA) AND/OR ITS COMPONENTS, INCLUDING THE ELECTRONIC STORAGE SYSTEM (ESS), MIDDLEWARE AND OTHER SIMILAR SYSTEMS (COLLECTIVELY KNOWN AS “SYSTEM”) SHALL NOT BE REQUIRED TO SECURE PERMIT TO USE (PTU), BUT SUBJECT TO POST-EVALUATION; BIR FORM 1900 IS NO LONGER REQUIRED.

• The BIR provides simplified policies on the application for registration of Computerized Accounting System, Computerized Books of Accounts and/or its components, including Electronic Storage System, middleware and other similar systems.
• It provides that all taxpayers intending to use CAS, CBA  and/or its Components, including the ESS, Middleware and Other Similar Systems shall not be required to secure PTU instead, shall be registered subject to the following policies:
  • Register the system by submitting the documentary requirements stated on the to the Revenue District Office (RDO) where the taxpayer is registered.
  • BIR Form No. 1900 – Application for Authority to Use Computerized Accounting System or Components thereof/Loose-Leaf Books of Accounts shall no longer be required for the submission of application for registration of the system.
  • The system shall comply with the standards set forth under the circular; otherwise, when discovered to have violated the said standards during post-evaluation or audit, the taxpayer-user shall be subject to penalties provided under RMO No. 7-2015 and other existing revenue issuances.
  • Upon submission of complete documentary requirements, an Acknowledgement Certificate (AC) shall be issued within three (3) working days from the receipt of the complete documents by the RDO where the taxpayer-user of the system is registered. Hence, Permit to Use CAS, CBA and/or Components shall no longer be required for the use and registration of the system upon approval of this circular.
  • System demonstration or pre-evaluation shall not be required prior to the use of the system. However, post-evaluation shall be conducted by the concerned RDO to determine compliance of the system registered with the BIR to the standards set forth in the circular.
  • All taxpayers with existing system shall NOT be required to apply for registration. The approved PTU previously issued by the BIR shall still be valid, except for the following circumstances:
    • PTU was revoked upon discovery of its non-compliance with existing revenue issuances during the conduct of authorized audit activity, Tax Compliance Verification Drive (TCVD) or Post-Evaluation.
    • Existence of major system enhancement or upgrade, which will require the filing of a new application for registration of the system
  • Taxpayer must submit a new application for registration in case of major system enhancement.
    • In case of any minor system enhancement, g., user interface modification, bug fixes, performance improvements, etc., the taxpayer must submit a written notification to their registered RDO/LT Office stating the specific minor enhancements on the system.
  • For your reference, a copy of the issuance may be accessed 

THE BIR ANNOUNCES THE AVAILABILITY OF THE ALPHALIST DATA ENTRY AND VALIDATION MODULE (VERSION 7.0) AND ITS UPDATED FILE STRUCTURES, STANDARD FILE NAMING CONVENTION AND JOB-AIDS.

• The enhanced version now includes the Alphalists for BIR Form Nos. 1600-PT, 1600- V.T, 1604-C, 1604-F, 1604-E, BlR Form No. 1621 (Quarterly Remittance Return of Tax Withheld on the Amount Withdrawn from Decedent’s Deposit Account).
• In addition, the generation process of the annual alphalists for 1604-E and 1604-F has been simplified under the Quarterly Alphalists of Payees, thus eliminating the need of manual re-encoding the information.

For your reference, a copy of the issuance may be accessed HERE. (Revenue Memorandum Circular No. 7-2021, January 8, 2021)