quality assurane ulletin i de em er 2019 edition 1

QUALITY ASSURANCE BULLETIN I DECEMBER 2019 Edition 1


RECENT BUREAU OF INTERNAL REVENUE ISSUANCES

REVENUE REGULATION NO. 10-2019: Amends pertinent provision of RR No. 4-2000, as

amended by RR No. 7-2005, by providing a new format for the Notice to the Public to be

exhibited at place of business. (Published in Malaya Business Insight on December 3, 2019

and Manila Standard on December 13, 2019) .

REVENUE MEMORANDUM CIRCULAR NO. 134-2019: Announces the availability of the

Revised BIR Form No. 1702-EX (Annual Income Tax Return) January 2018 (ENCS) Version

2.

REVENUE MEMORANDUM CIRCULAR NO. 135-2019: Reiterates the prescribed

procedures in the availment of the Tax Amnesty on Delinquencies and additional clarification

on issues raised relative thereto.

REVENUE MEMORANDUM CIRCULAR NO. 136-2019: Circularizes the names of

taxpayers who are included or deleted from the List of Withholding Agents who qualify to the

criteria prescribed under Revenue Regulations No. 7-2019 for purposes of the 1% or 2%

Creditable Withholding Taxes on purchases of goods and services.

REVENUE MEMORANDUM CIRCULAR NO. 139-2019: Prescribes the use of the

enhanced BIR Form Nos. 1601-EQ and 1602Q January 2019 (ENCS).

REVENUE MEMORANDUM CIRCULAR NO. 143-2019: Clarifies the inclusion of taxpayers

as top Withholding Agents who are obliged to remit the 1% and 2% Creditable Withholding

Taxes pursuant to the criteria of Revenue Regulations No. 7-2019.


REVENUE REGULATION NO. 10-2019

Amends pertinent provision of RR No. 4-2000, as

amended by RR No. 7-2005, by providing a new format

for the Notice to the Public to be exhibited at place of

business. (Published in Malaya Business Insight on

December 3, 2019 and Manila Standard on December

13, 2019) .

Persons required by law to issue official

receipt/sales invoice are directed to post the said

Notice in their places of business, including

branches and mobile stores, in such area

conspicuous to the public.

REVENUE MEMORANDUM CIRCULAR NO.

134-2019

Announces the availability of the Revised BIR Form No.

1702-EX (Annual Income Tax Return) January 2018

(ENCS) Version 2.

Said form includes both the Optional

Standard Deduction and the itemized deductions

which are available to be claimed by General

Professional Partnerships.

The revised manual return is already

available in the BIR website (www.bir.gov.ph)

under the BIR Forms-Income Tax Return Section

and in the Offline Electronic Bureau of Internal

Revenue Forms (eBIRForms) Package v7.5.

However, the Form is not yet available in

the Electronic Filing and Payment System (eFPS).

Thus, eFPS filers shall use the Offline eBlRForms

Package v7.5 in filing the said return until

availability of the return is announced. BIR Form

No. 1702-RT (Annual Income Tax Return for

Corporations, Partnerships and Other

Non-Individual Taxpayers Subject Only to the

Regular Income Tax Rate) January 2018 (ENCS)

is also available in the Offline eBIRForms

Package v7.5.


135-2019

Reiterates the prescribed procedures in the

availment of the Tax Amnesty on Delinquencies and

additional clarification on issues raised relative

thereto.

Per Republic Act No. 11213, the Tax

Amnesty amount shall be based on the "basic tax

assessed" made by the Bureau of Internal

Revenue (BIR). This means that there should be

an assessment of tax due made by the BIR, which

should be final and executory, except in case of

unremitted tax withheld and those covered by a

pending criminal case.


Thus, a "stop-filer" case which merely

pertains to failure of the taxpayer to file the

required return is not qualified for Tax Amnesty in

the absence of tax assessment.

Tax Amnesty on Delinquencies can be

availed if there is no Final Assessment Notice/

Formal Letter of Demand/Final Decision on

Disputed Assessment that has become final and

executory if the tax liabilities fall under any of the

following instances:

a. The tax liabilities are related to the

pending criminal cases with the Department of

Justice/Prosecutor’s Office or the courts for tax

evasion and other criminal offenses under

Chapter II of Title X and Section 275 of the Tax

Code as amended; and

b. The tax liabilities pertain to unremitted

tax withheld by withholding agents. When a

criminal charge pertains to “failure to obey

summon”, the Legal Officer requires the Examiner

to issue an assessment based on best evidence

obtained. If an assessment has already been is-

sued as of April 24, 2019, whether final or not, the

basis of the Tax Amnesty would be the basic tax

per such document. Otherwise, the taxpayer could

not avail of the Tax Amnesty on Delinquency.

Those tax liabilities arising from failure to

pay in full and non-payment of the tax due

declared per tax return are not qualified for Tax

Amnesty unless, prior to April 24, 2019, a letter to

the withholding agent or preliminary collection

letter demanding remittance/payment of taxes

withheld but not remitted, as declared per return,

was sent by the BIR.

Under Revenue Regulations (RR) No.

4-2019, Preliminary Assessment Notice (PAN)/

Notice for Informal Conference (NIC) or equivalent

document is sufficient document of the taxpayer to

support the tax liabilities pertaining to unremitted

tax withheld. Equivalent document can be any of

the following, provided the same was issued on or

before April 24, 2019, and the taxable period

involved are 2017 and prior years:

a. Letter to the withholding agent

demanding remittance of the amount not remitted

based on the withholding tax returns filed;

b. Letter to the withholding agent

demanding the remittance of tax withheld based

on the Commission on Audit (COA) reports, for

those subject to COA audit; and

c. Preliminary Collection Letter demanding

the payment of tax withheld declared per returns

filed.

For the efficient and orderly

implementation of the Tax Amnesty Program, the

following procedures prescribed under Revenue

Memorandum Order No. 23-2019 must be strictly

complied with by all concerned:

a. Tax Amnesty Return (TAR) (BIR Form

No. 2118-DA) must be completely and accurately

accomplished and made under oath;

b. Acceptance Payment Form (APF) or

BIR Form 0621-DA must be duly endorsed by the

concerned BIR officials; and

c. Certificate of Tax Delinquencies, must

be issued and signed only by the authorized BIR

officer and not by the taxpayer who is availing of

the Tax Amnesty.

The immunity and privileges shall only

apply to the particular tax type and taxable period

as indicated in the TAR and paid under duly

approved APF. Consequently, tax liability/ies for

taxable period/s and/or tax type not included in the

Tax Amnesty application will not be cancelled.

The Notice of Issuance of Authority to

Cancel Assessment shall be issued by the BIR to

the taxpayer availing of the Tax Amnesty on

Delinquencies within fifteen (15) calendar days

from submission of the APF and TAR. Otherwise,

the stamped "received" duplicate copies of the

APF and TAR shall be deemed as sufficient proof

of availment.

Continuation..


BIR Revenue Officers are instructed to deal

only with taxpayers themselves or their tax agents

who are duly accredited with BIR. Taxpayers are

likewise advised to secure only the services of tax

agents included in the List of Accredited Tax

Agents as posted in the BIR Website, or the

services of bonafide tax lawyers, and to exercise

due diligence in securing their services since those

posing as accredited tax agents are providing

wrong information to the detriment of the

taxpayers.

REVENUE MEMORANDUM CIRCULAR NO. 136

-2019

Circularizes the names of taxpayers who are included

or deleted from the List of Withholding Agents who

qualify to the criteria prescribed under Revenue

Regulations No. 7-2019 for purposes of the 1% or 2%

Creditable Withholding Taxes on purchases of goods

and services.

The obligation to deduct and remit to the

BIR the said CWTs shall continue, commence or

cease, as the case may be, effective January 1,

2020. Any taxpayer who is not included in the

updated List of Withholding Agents is deemed to

have been excluded and, therefore, not required to

deduct and remit the 1% or 2% CWTs on its

purchase of goods and services.

The lists are posted at the BIR website

(www.bir.gov.ph).


139-2019

Prescribes the use of the enhanced BIR Form Nos.

1601-EQ and 1602Q January 2019 (ENCS).

a. 1601-EQ (Quarterly Remittance Return of

Creditable Income Taxes Withheld

[Expanded]) – revised due to some changes in

the rate of Creditable Withholding Tax on

MERALCO payments and interest income

derived from any other debt instruments not

within the coverage of deposit substitutes

pursuant to Revenue Regulation (RR) No.

12019; and

b. 1602Q (Quarterly Remittance Return of Final

Taxes Withheld on Interest Paid on Deposits

and Yield on Deposit Substitutes/Trusts/Etc.)

– revised due to the implementation of RR No.

8-2019 which prescribed the use of BIR Form

Nos. 0620 and 1621 in remitting the Tax

Withheld on the amount withdrawn from the

decedent’s deposit account.

The revised manual returns are already

available in the BIR website (www.bir.gov.ph)

under the BIR Forms-Payment/Remittance Forms

Section. However, the forms are not yet available

in the Electronic Filing and Payment System

(eFPS) and Electronic Bureau of Internal Revenue

Forms (eBIRForm). Thus, eFPS/eBIRForms filers

shall use the existing version of the

abovementioned forms in the eFPS and in the

Offline eBIRForms Package v7.5 in filing and

remitting taxes due thereon.

Manual filers shall download the PDF

version of the form, print and completely fill-out

the applicable fields, otherwise penalties under

Sec. 250 of the Tax Code, as amended, shall be

imposed.

Payment of the taxes due, if any, shall be made

thru:

a. Manual Payment

Authorized Agent Bank (AAB) located

within the territorial jurisdiction of the

Revenue District Office (RDO) where

the taxpayer is registered; or


In places where there are no AABs, the

return shall be filed and the tax due

shall be paid with the concerned

Revenue Collection Officer under the

jurisdiction of the RDO using the

Mobile Revenue Collection Officer

System facility.

b. Online Payment

Thru GCash Mobile Payment;

Landbank of the Philippines (LBP)

Linkbiz Portal, for taxpayers who have

ATM account with LBP and/or holders

of Bancnet ATM/Debit Card; or

Development Bank of the Philippines

Tax Online, for holders of VISA/Master

Credit Card and/or Bancnet ATM/Debit

Card.

.


143-2019

Clarifies the inclusion of taxpayers as top

Withholding Agents who are obliged to remit the

1% and 2% Creditable Withholding Taxes

pursuant to the criteria of Revenue Regulations

No. 7-2019.

In implementing RR No. 7-2019 and

consistent to the policy of Ease of Doing Business

by ensuring that the list of Top Withholding Agents

(TWAs) only reflect taxpayers who are compliant to

the prescribed criteria of said RR, Operations

Memorandum (OM) Order No. 202019 was issued,

which excludes the following taxpayers in the

identification of TWAs, although they have

satisfied the prescribed criteria of the said RR:

a. National government agencies,

government-owned or controlled corporations,

state universities and colleges. and local

government units;

b. Taxpayers who were included because

of one-time transactions (i.e. Estate and Donor’s

Tax);

c. Individual taxpayers deriving income

on commission basis such as but not limited to

insurance agent and real estate broker, subject

to verification of their duly-filed 2018 Quarterly

Income Tax Returns (BIR Form No. 1701Q) in

order to determine the regularity of their

transactions. Accordingly, if the ₱12M criteria

has been satisfied only in one (1) taxable

quarter, the taxpayer shall not be qualified as

TWA; and

d. Taxpayers who are tax exempt from

payment of Income Taxes with no proprietary

activities (i.e. foundations, non-stock, non-profit

and tax exempt educational institutions, religious

and charitable institutions, etc.).

On the basis of the above discussions

and clarifications, in cases of publication of

TWAs in the newspaper of general circulation

wherein certain taxpayers are included or not

deleted in the existing list of TWAs but do not

satisfy the criteria of RR No. 7-2019, or if they

may have satisfied the same but qualify as

taxpayers enumerated in OM No. 20-2019 who

should be excluded from the list of TWAs, these

taxpayers cannot be compelled to withhold the

1% and 2% CWTs.

Continuation..


This bulletin is a compilation of relevant issuances, rulings and memoranda from various government agencies to

enhance the technical skills of the professional staff of Paguio, Dumayas and Associates, CPAs and is not intended to

replace the original issuances of the related government agencies.

FLOYD C. PAGUIO

Managing Partner

[email protected]

[email protected]

AILEEN P. MELCHOR

Senior Tax Specialist

[email protected]

KEN JOHN B. ASADON

Tax Supervisor

Unit 3207 Cityland Pasong Tamo Condominium, Pasong Tamo St., Barangay Pio del Pilar, Makati City

Contact us at: 950-9853/950-9854

We are a team of Certified Public Accountants, who aim to be the

accounting firm of choice for business entities in terms of:

Audit and Assurance

Taxation

Business Process Outsourcing

Management Consultancy

[email protected]

GERRY B. MAHAWAN

Tax Specialist

ANGELINA S. ABILON

Tax Specialist

[email protected]

quality assurane ulletin i de em er 2019 edition 1

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