Revenue Regulations No 192011 Revenue Regulations No 62012 Revenue Regulations No 82012 Revenue Memorandum Circular No 232012 Presented by ROSANA P SAN VICENTE Chief Withholding Tax Division ID: 633932
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TOPIC OUTLINETaxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee RelationshipRevenue Regulations No. 19-2011Revenue Regulations No. 6-2012Revenue Regulations No. 8-2012Revenue Memorandum Circular No. 23-2012Presented by:ROSANA P. SAN VICENTEChief, Withholding Tax Division
July 23, 2012
1Slide2
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Registration Requirement
:
Section 236 of the Tax Code
–
“(A) Requirements.- Every person subject to any internal revenue tax shall register once with the appropriate Revenue District Officer:Within ten (10) days from the date of employment, orOn or before the commencement of business, orBefore payment of any tax due, orUpon filing of a return, statement or declarations as required in this Code.”
2Slide3
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Registration Requirement
:
BIR Form to be accomplished –
BIR Form 1901, to be submitted to the RDO having jurisdiction over the place where the service is being rendered, with the following attachments: > Birth Certificate or any document showing name, address and birth date of the individual; > Contract of Service /Job Order > Proof of payment of Annual Registration Fee of P500 [Sec. 236(B) of the Tax Code]
3Slide4
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Invoicing Requirement
:
Section 237 of the Tax Code
–
“Sec. 237. Issuance of Receipts or Sales or Commercial Invoices.- All persons subject to an internal revenue tax shall, for each sale or transfer of merchandise or for services rendered valued at Twenty-five pesos (25.00) or more, issue duly registered receipts or sales or commercial invoices, prepared at least in duplicate, showing the date of transaction, quantity, unit cost and description of merchandise or nature of service: Provided, however, That in the case of sales, receipts or transfers in the amount of One hundred pesos (100.00) or more, or regardless of amount, where the sale or transfer is made by a4Slide5
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Invoicing Requirement
:
cont
…
person liable to value-added tax to another person also liable to value-added tax; or where the receipt is issued to cover paymentmade as rentals, commissions, compensation or fees, receipts or invoices shall be issued which shall show the name, business style, if any, and address of the purchaser, customer or client; Provided, further, That where the purchaser is a VAT-registered person, in addition to the information herein required, the invoice or receipt shall further show the Taxpayer identification Number (TIN) of the purchaser.”
5Slide6
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Invoicing Requirement
:
cont
…
“The original of each receipt or invoice shall be issued to the purchaser, customer or client at the time the transaction is effected, who, if engaged in business or in the exercise of profession, shall keep and preserve the same in his place of business for a period of three (3) years from the close of the taxable year in which such invoice or receipt was issued, while the duplicate shall be kept and preserved by the issuer, also in his place of business, for a like period.” 6Slide7
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Invoicing Requirement
: SAMPLE OFFICIAL RECEIPT
7Slide8
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Invoicing Requirement
:
BIR Form to accomplish
BIR Form No. 1906 –Application for Authority to Print Receipts and Invoices, to be filed with the RDO where the individual is registered, with the following attachments: > Certificate of Registration > Proof of Payment of RF, current > Final and clear sample of Receipt/Invoice; > Previous ATP (for additional SI/OR to be printed);
> Last booklet printed (for additional SI/OR to be printed)
8Slide9
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Invoicing Requirement
:
Can the issuance of SI/OR be dispensed with
?
> Under Sec. 237, the Commissioner may, in meritorious cases, exempt any person subject to an internal revenue tax from the compliance with the issuance of SI/OR How? The individual shall apply for the “substituted issuance of OR” pursuant to the provisions of RR 14-2003.
9Slide10
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Invoicing Requirement
:
Sec. 2 of RR 14-2003
– inserting new provisions under RR 2-98, as amended –
“Sec. 5.128.
xxxxxF) Substituted Official Receipt. - For sellers of services whose gross receipts have been subjected to the withholding of the 3% percentage tax, they shall be exempted from the obligation of issuing duly registered non-VAT receipts covering their receipt of payments for services sold. In lieu thereof, the issued
“Certificate of Final Tax Withheld at Source” (BIR Form No. 2306
), for payee with just
one
payor
, or
“
Certificate
of Creditable Tax Withheld at Source” (BIR
Form No
. 2307)
, for payee with several
payors
, shall be constituted and
treated as
the
substituted official receipt
,
pursuant to the provisions of Section
237 of
the
Code”
10Slide11
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Invoicing Requirement
:
Sec. 3 of RR 14-2003
– inserting new provisions under RR 2-98, as amended –
“Sec. 9.245.
xxxxxF) Substituted Official Receipt. - For sellers of services whose gross receipts have been subjected to 12% final VAT, they shall be exempted from the obligation of issuing duly registered VAT official receipts covering their receipt of payments for services sold. In lieu thereof, the issued
“Certificate of Final Tax Withheld at Source” (BIR Form No. 2306), for payee with just
one
payor
, or
“
Certificate
of Creditable Tax Withheld at Source” (BIR
Form No
. 2307)
, for payee with several
payors
, shall be constituted and
treated as
the
substituted official receipt
,
pursuant to the provisions of Section
237 of
the
Code”
11Slide12
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Invoicing Requirement
:
Seller of services whose gross receipts were subjected to withholding of 3% percentage tax/12% VAT are
exempted
from issuing Non-VAT/VAT receipts. In lieu thereof, the following shall be constituted and treated as the substituted OR:
“Certificate of Final Tax Withheld at Source” (BIR Form No. 2306) - for payees with just one payor;
“Certificate of Creditable Tax Withheld at Source” (BIR Form
No
. 2307
) -
for
payees
with
several
payors
12Slide13
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Invoicing Requirement
:
How will the
payor
know that the payee will avail of the “substituted OR” option? Payee is required to submit to the withholding agent-payor a “Notice of Availment of the Option to Pay the Tax through the Withholding Process”, copy-furnished Revenue District Offices
having jurisdiction over the payor and the payee
13Slide14
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
BIR FORM NO.__________
Republic of the Philippines
Department of Finance
BUREAU OF INTERNAL REVENUE
Revenue Region No. ___
Revenue District Office No. _________________________________________________________________________________________________NOTICE OF AVAILMENT OF THE OPTION TO PAY THE TAXTHROUGH THE WITHHOLDING PROCESSDate __________________Name of Taxpayer ______________________________________________________Address ______________________________________________________________Taxpayer Identification Number __________________________________________Class of Profession or Calling ___________________________________________
CERTIFICATIONThis is to certify that I am availing of the option to pay my percentage tax/VAT through the withholding process pursuant to the provisions
of REVENUE
REGULATIONS NO. ____; that, in accordance with the said
Regulations and Revenue Regulations No. 2-98, as amended, gross receipts
on account
of my sale of goods/service shall be withheld at 3% Percentage Tax
or 10
% VAT, as the case may be, by the withholding agent-
payor
; that, such
tax withheld
shall be constituted as a final tax provided that my source of income
comes only from one
payor
, otherwise, the same shall be considered
creditable which
shall be applied against the total percentage taxes/VAT due for the
month when
such tax was withheld; and that, I have executed this Declaration
under penalty
of perjury, pursuant to the provisions of Section 267, National
Internal Revenue
Code of 1997.
____________________________
Taxpayer’s Name and Signature
14Slide15
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Invoicing Requirement
:
Withholding agent-
payor
is required to prepare BIR Form Nos. 2306 or 2307 in quadruplicate, to be distributed as follows: (Note: BIR Form 2306 must be signed by both
payor and payee)2306
2307
2 copies for the payee
1 copy to the
payor
1 copy to be attached by the
payor
to BIR Form 1600
2 copies for the payee
1 copy to the
payor
1 copy to be attached by the
payor
to BIR Form 1600
15Slide16
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Bookkeeping Requirement
:
“Sec. 232.
Keeping of Books of Accounts.-
(A) Corporations, Companies, Partnerships or Persons Required to Keep Books of Accounts.- All corporations, companies, partnerships or persons required by law to pay internal revenue taxes shall keep a journal and a ledger or their equivalents: Provided, however, That those whose quarterly sales, earnings, receipts, or output do not exceed Fifty thousand pesos (P50,000) shall keep and use simplified set of bookkeeping records duly authorized by the Secretary of Finance wherein all transactions and results of operations are shown and from which all taxes due the Government may 16Slide17
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Bookkeeping Requirement
:
r
eadily and accurately be ascertained and determined any time of the year:
Provided, further
, That corporations, companies, partnerships or persons whose quarterly sales, earnings, receipts or output exceed One hundred fifty thousand pesos (P150,000), shall have their books of accounts audited and examined yearly by independent Certified Public Accountants and their income tax returns accompanied with a duly accomplished Account Information Form (AIF) which shall contain, among others, information lifted from certified balance sheets, profit and loss statements, schedules listing income-producing properties and the corresponding income therefrom and other relevant statements.”17Slide18
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Bookkeeping Requirement
:
Registration of Books of Accounts
– included in BIR Form 1901, the registered books of accounts shall be used until all the pages are consumed. However, if the taxpayer wishes to use separate books of accounts for every calendar year, the registration thereof must be made on or before December 31 of each year.
Preservation of Books of Accounts - … shall be preserved for a period beginning from the last entry in each book until the last day prescribed by Section 203 within which the Commissioner is authorized to make assessment.18Slide19
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Filing of Required Tax Returns
:
Income Tax Return
–
BIR FormDue Dates
BIR Form No. 1701On
or before April 15 following the close of calendar year
BIR Form No. 1701Q
1
st
Quarter –On or before April 15 of
the current CY;
2
nd
Qtr
- on or before August 15 of the current year
3
rd
Qtr
– on or before November 15 of the current year
19Slide20
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Filing of Required Tax Returns
:
Percentage Tax Return
–
Value Added Tax Return -
BIR FormDue Dates
BIR Form No. 2551 M
Within twenty
days following the close of the month
BIR Form
Due Dates
BIR Form No. 2550 M
Within twenty
days following the close of the month
BIR Form No. 2550Q
Within twenty-five days following the close of the taxable
quarter
20Slide21
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Filing of Required Tax Returns
:
Option to Avail of the Substituted Filing of Percentage Tax Return/VAT return –
Who is qualified to avail?
Individual with only one
payorHow to avail of such option?Individual must file with the RDO where he/she is registered the following:1. Notice of Availment of the Option to Pay the Tax Through the Withholding Process”,;2. Notice of
Availment of the Substituted Filing of Percentage Tax Return
21Slide22
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
BIR
FORM NO.__________
Republic of the Philippines
Department of Finance
BUREAU OF INTERNAL REVENUE
Revenue Region No. ___Revenue District Office No. ___________________________________________________________________________________NOTICE OF AVAILMENT OF THE SUBSTITUTED FILING OFPERCENTAGE TAX RETURNDate __________________Name of Taxpayer ______________________________________________________Address ______________________________________________________________Taxpayer Identification Number __________________________________________Class of Profession or Calling/Business __________________________________
CERTIFICATIONThis is to certify that I am a NON-VAT registered person pursuant to the provisions
of REVENUE REGULATIONS NO. ____; that, in accordance with
the said
Regulations, I have availed of the “Optional Registration under the 3%
Final Percentage
Tax Withholding, in lieu of the 3% Creditable Percentage
Tax Withholding
” System, in order to be entitled to the privileges accorded by the
“Substituted Percentage Tax Return System” prescribed thereunder; that,
this Declaration
is sufficient authority of the Withholding Agent to withhold
3% Percentage
Tax from payments to me on my sale of goods and/or services, in lieu
of the
said 3% Creditable Percentage Tax Withholding; and that, I have executed
this Declaration
under penalty of perjury pursuant to the provisions of Section
267, National
Internal Revenue Code of 1997.
____________________________
Taxpayer’s Name and Signature
22Slide23
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
BIR FORM NO.__________
Republic of the Philippines
Department of Finance
BUREAU OF INTERNAL REVENUE
Revenue Region No. ___
Revenue District Office No. ___________________________________________________________________________NOTICE OF AVAILMENT OF THE SUBSTITUTED FILING OFVALUE-ADDED TAX RETURNDate __________________Name of Taxpayer _________________________________________________Address _________________________________________________________Taxpayer Identification Number _____________________________________Class of Profession or Calling/Business______________________________
CERTIFICATIONThis is to certify that I am a VAT-registered person pursuant to the provisions
of REVENUE REGULATIONS NO. ____; that, in accordance with
the said
Regulations, I have availed of the “Optional Registration under the
12% Final VAT
Withholding, in lieu of the
12%
Creditable VAT withholding,” in order to
be entitled
to the privileges accorded by the “Substituted VAT Return
System” prescribed
thereunder; that, this Declaration is sufficient authority of
the withholding
agent to withhold
12%
VAT from payments to me on my sale
of goods
and/or services; that, I have executed this Declaration under penalty
of perjury
pursuant to the provisions of Section 267, National Internal Revenue
Code of
1997.
____________________________
Taxpayer’s Name and Signature
23Slide24
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
SWORN
DECLARATION AND WAIVER OF THE PRIVILEGE TO CLAIM
INPUT TAX CREDITS UNDER SECTION 110 OF THE TAX CODE
In
accordance with the provisions of Sections 106 and 108 of the
National Internal Revenue Code of 1997, I hereby voluntarily depose and say: 1. That I am a VAT-registered seller of goods and/or service; 2. That I availed of the option to be taxed at 12% VAT; 3. That I hereby waive my right/privilege to claim input tax credits provided under Section 110 of the National Internal Revenue Code of 1997
that may be otherwise claimed against the output tax due on my sale of goods and/or services; and
4
. That this waiver shall be effective until cancelled through the
execution of
a notice
prepared
for the purpose
.
I
hereby declare under penalties of perjury that the foregoing
representations are
true and correct and the waiver of right/privilege is voluntarily and
knowingly made
in accordance with
the provisions
of the National Internal Revenue Code of 1997.
_______________________
Date and Name
of Taxpayer
24Slide25
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
BIR
FORM NO.__________
Republic of the Philippines
Department of Finance
BUREAU OF INTERNAL REVENUE
Revenue Region No. ___Revenue District Office No. ______________________________________________________________________________________NOTICE OF CANCELLATION OF AVAILMENT OF THE OPTION TO PAY THE TAXTHROUGH THE WITHHOLDING PROCESSDate __________________Name of Taxpayer ______________________________________________________Address _______________________________________________________________Taxpayer Identification Number __________________________________________Class of Profession or Calling/Business _____________________________________
CERTIFICATIONThis
is to certify that in accordance with the REVENUE
REGULATIONS NO
.____, I have availed of the “Option To Pay The Tax Through The
Withholding Process
”; that, I am hereby cancelling and withdrawing my said NOTICE
OF AVAILMENT
TO PAY THE TAX THROUGH THE
WITHHOLDING PROCESS
effective ___________________, 200__; and that, I have executed
this Declaration
under penalty of perjury, pursuant to the provisions of Section 267,
National Internal Revenue Code of 1997.
____________________________
Taxpayer’s Name and Signature
25Slide26
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
BIR FORM NO.__________
Republic of the Philippines
Department of Finance
BUREAU OF INTERNAL REVENUE
Revenue Region No. ___
Revenue District Office No. ___________________________________________________________________________NOTICE OF CANCELLATION OF AVAILMENT OFTHE SUBSTITUTED FILING OF PERCENTAGE TAX / VAT RETURNDate _______________Name of Taxpayer ______________________________________________________Address ______________________________________________________________Taxpayer Identification Number __________________________________________
Class of Profession or Calling/Business __________________________________Type of Registration [ ] VAT Taxpayer [ ] Non-VAT Taxpayer
CERTIFICATION
This is to certify that I am a Non-VAT/VAT -registered person pursuant
to the
provisions of REVENUE REGULATIONS NO. ____; that, in accordance
with the
said Regulations, I have availed of the “Optional Registration under the
3% final
Percentage Tax on the Sale of Goods and/or Service /10% final
VAT Withholding
on the Sale of Goods and/or Service” in order to be entitled to
the privileges
accorded by the “Substituted Filing of Percentage Tax/VAT
Return” prescribed
thereunder; that, I am hereby cancelling and withdrawing my
said NOTICE
OF AVAILMENT OF THE SUBSTITUTED FILING OF
PERCENTAGE TAX/VAT RETURN SYSTEM, effective
___________________, 200
__; and that, I have executed this Declaration under penalty of
perjury, pursuant
to the provisions of Section 267, National Internal Revenue Code of 1997.
____________________________
Taxpayer’s Name and Signature
26Slide27
Taxation of Individuals Engaged in Providing Services under a Service Contract with no Employer-Employee Relationship
Filing of Required Tax Returns
:
Notarized Sworn Declaration
–
To be prepared in three copies
(2 for the BIR & 1 for the TP, but shall be photocopied so that all his current income payors shall be provided with a copy);To be submitted to the Collection Division having jurisdiction over the RDO where the individual is registered;
To be submitted fifteen (15) days after the end of the month where the individual’s income reaches P720,000 or June 30 of each year, whichever comes earlier. (However, if after June 30, the individual’s income reaches P720,000, another sworn declaration must be submitted)
27Slide28
> Register with BIR using BIR Form 1901; > Pay Annual Registration Fee of P500;
> Keep Books of Accounts; > Issue Official Receipt for every receipt of income (not applicable to those who opted to pay PT/VAT through the withholding process); > File Required Tax Returns and information return;
> Submit required document as may be required in any future revenue issuance
SUMMARY OF THE TAX OBLIGATIONS OF INDIVIDUALS HIRED UNDER “CONTRACT OF SERVICE”
28Slide29
REQUIRE THE INDIVIDUAL TO REGISTER WITH THE BIR AS INDIVIDUAL ENGAGED IN BUSINESS OR PRACTICE OF PROFESSION, WHICHEVER IS APPROPRIATE
CERTIFICATE OF REGISTRATION (COR) OF THE INDIVIDUAL ISSUED BY THE BIR UPON HIS REGISTRATION
OFFICIAL RECEIPT
FOR EVERY PAYMENT OF INCOME/
BIR FORM 2306
DULY-SIGNED BY BOTH PAYOR AND PAYEE
COPY OF THE SWORN DECLARATION OF INCOME DULY RECEIVED BY THE BIR
WHAT THE HIRING AGENCY SHOULD REQUIRE FROM THE INDIVIDUALS HIRED UNDER THE “CONTRACT OF SERVICE”/ “JOB ORDER” SCHEME?
29Slide30
INDIVIDUALS HIRED UNDER “CONTRACT OF SERVICE”
APPLICABLE WITHHOLDING TAX
:
EWT PRESCRIBED UNDER SECTION 2.57.2 OF RR NO. 2-98
DEPENDS ON THE NATURE OF SERVICE RENDERED IF THE NATURE OF SERVICE IS NOT AMONG THE EXISTING ENUMERATIONS UNDER RR NO. 2-98, AS AMENDED, APPLY THE REQUIRED WITHHOLDING AS GOVERNMENT ENTITY UNDER SEC. 2.57.2 (N) OF RR NO. 2-98, AS AMENDED VAT OR PERCENTAGE TAX WITHHOLDING SHALL ALSO APPLY (REFER TO THE GOVERNMENT EXPENSE CHART)30Slide31
What are the objectives of RR 19-2011?To prescribe the use of new Income Tax Returns (Annual) Modify the provisions under RMC 57-2011 What are the new ITR forms?
BIR Form 1700BIR Form 1701BIR Form 1702
REVENUE REGULATIONS NO. 19-2011
31Slide32
REVENUE REGULATIONS NO.
19-201132
BEFORE (BIR Form No. 1700)
NOW (BIR Form No. 1700)
Marking of an “X” on all applicable boxes
Shading of all applicable circle
3 choices for ATC (II011; II 040; II041
2 choices for ATC
(II041; II011)
No question as to “joint filing”
With question as to “joint filing”
Information
can be provided either through script writing or print
All
i
nformation is required to be written in all capital letters on each box provided
No
question as to “gender”
With question as to “gender”
Email
address is not being asked
Space
is provided for the email address
Three digits for the branch code
Four digits for the branch codeSlide33
REVENUE REGULATIONS NO.
19-201133
BEFORE (BIR Form No. 1700)
NOW (BIR Form No. 1700)
For
the information on qualified dependent children,
there is no
question if mentally or physically incapacitated
For
the information on qualified dependent children,
there is
a question if mentally or physically incapacitated
Personal and additional exemption is lumped under one data field
Separate fields were provided for personal and additional exemption
No Part IV – the
return is composed of three (3) parts only.
With Part IV – Supplemental Information
No space provided for “new address” in
case the registered address is no longer the current address
Space is
provided for the “new address” of the taxpayer, in case the registered address is no longer the current addressSlide34
REVENUE REGULATIONS NO.
19-201134
What are the information required under Part IV
?
Gross Income/Receipts subjected to Final Withholding Tax on income
Gross Income/Receipts exempt from income tax
Under RMC 57-2011
, declaration of information required under Part IV of the tax return is optional for calendar year 2011 but for 2012 onwards, the disclosure of these information is mandatory.Under RR 19-2011
, it amended RMC 57-2011 wherein the filling-up of the fields provided under Part IV is made optional. However, in case information shall be provided, the same must be properly documented and/or substantiatedSlide35
REVENUE REGULATIONS NO.
19-201135
BEFORE (BIR Form No. 1701)
NOW (BIR Form No. 1701)
Marking of an “X” on all applicable boxes
Shading of all applicable circle
3 choices for ATC (II011; II 040; II041
2 choices for ATC
(II041; II011)
No question as to “joint filing”
With question as to “joint filing”
Information
can be provided either through script writing or print
All
i
nformation is required to be written in all capital letters on each box provided
No
question as to “gender”
With question as to “gender”
Email
address is not being asked
Space
is provided for the email address
Three digits for the branch code
Four digits for the branch codeSlide36
REVENUE REGULATIONS NO. 19-201136
BEFORE (BIR Form No. 1701)
NOW (BIR Form No. 1701)
For
the information on qualified dependent children,
there is no
question if mentally or physically incapacitated
For
the information on qualified dependent children, there is a question if mentally or physically incapacitated
Personal and additional exemption is lumped under one data field
Separate fields were provided for personal and additional exemption
Part III-Details of Payment
Part III-
Availment
of Tax Income Incentives/Exemptions
No Part IV – the
return is composed of three (3) parts only.
With additional parts (Part IV –IX)
IV- Details of Payment
V- Breakdown of Income
VI-Schedules
VII-Details
of Income Tax Incentives/Exemptions
VIII- Applicable to Estate and Trust
IX-
Supplemental Information Slide37
Amended the EWT rate applicable on the purchase of minerals, mineral products and quarry resources – Section 2.57.2 (T) of RR 2-98, as amended
REVENUE REGULATIONS NO. 6-2012
37
Before
Now
10%
5%
RR 7-2007RR 6-2012Slide38
Amended RR 5-2011 –
REVENUE REGULATIONS NO. 8-2012
38
RR 5-2011
RR 8-2011
Uniform and clothing allowance not exceeding P4,000 per annum
Uniform and clothing allowance not exceeding P5,000 per annumSlide39
Subject of this RMC - Reiteration of the responsibilities of employees and officials of government offices for the withholding of taxes on certain income payments subject to withholding taxes and the imposition of penalties for non-compliance thereofWhat are these responsibilities?
register;require employee to accomplish registration/update form;
withhold;
r
emit;
d
o the year-end adjustment (withhold deficiency tax or refund excess tax withheld);
Issue certificate of income paid and tax withheld (BIR Form 2316; 2306; 2307)file annual information return
REVENUE
MEMORANDUM CIRCULAR NO. 23-2012
39Slide40
Penalties for Non-Compliance:
REVENUE
MEMORANDUM CIRCULAR NO. 23-2012
40
Violation
Penalties
Legal BasisNon-withholding of required taxAmount of tax not withheldSec. 251, Tax Code
20% interest
Sec. 249, Tax
Code
Fine of not less than P10,000
and suffer imprisonment of not less than I year but nor more than 10 years, upon conviction
Sec. 255, Tax Code
Under-withholding of
tax
Amount of Under-withheld tax
Sec. 251, Tax Code
20% interest
Sec. 249, Tax
CodeSlide41
Penalties for Non-Compliance:
REVENUE
MEMORANDUM CIRCULAR NO. 23-2012
41
Violation
Penalties
Legal BasisNon-remittances of taxes withheldAmount of tax not remitted
Sec. 251, Tax Code
20% interest
Sec. 249, Tax
Code
Fine of not less than P10,000
and suffer imprisonment of not less than I year but nor more than 10 years, upon conviction
Sec. 255, Tax Code
Late remittance /Late filing of withholding tax returns
25% surcharge on the amount remitted late
Sec. 248, Tax Code
20% interest
Sec. 249, Tax CodeSlide42
Penalties for Non-Compliance:
REVENUE
MEMORANDUM CIRCULAR NO. 23-2012
42
Violation
Penalties
Legal BasisFailure to refund excess taxes withheld on compensationAmount of tax not refunded20% interest
Sec. 252, Tax CodeSec. 249, Tax Code
Fine of not less than P10,000
and suffer imprisonment of not less than 1 year but not more than 10 years, upon conviction
Sec. 255, Tax Code
Failure to file withholding tax return or certain information return
P1,000 for each failure but not to exceed P25,000 during a calendar year
Sec. 250, Tax Code
Fine of not less than P10,000
and suffer imprisonment of not less than 1 year but not more than 10 years, upon conviction
Sec. 255, Tax CodeSlide43
Penalties for Non-Compliance:
REVENUE
MEMORANDUM CIRCULAR NO. 23-2012
43
Violation
Penalties
Legal BasisFailure to supply correct and accurate informationFine of not less than P10,000 and suffer imprisonment of not less than 1 year but not more than 10 years, upon conviction
Sec. 255, Tax CodeViolations of withholding tax regulations committed by Public Officers charged with the duty to deduct and withhold any internal revenue tax and to remit the same
Penalty of not less than P5,000 but not more than P50,000 or suffer imprisonment of not less than 6 months and 1
day but not more than 2 years, or both, for each act or omission, upon conviction
Sec. 272, Tax CodeSlide44
Penalties for Non-Compliance:
REVENUE
MEMORANDUM CIRCULAR NO. 23-2012
44
Violation
Penalties
Legal BasisActs or omissions penalized under the Tax Code committed by any corporation, association or general co-partnershipFine of not less than P50,000 but not more than P100,000, for each act or omission, up
on convictionSec. 256, Tax CodeViolations of any provision of the Tax Code or any rule for which no specific penalty is provided
Penalty of P1,000 or suffer imprisonment of not more than 6 months, or both,
for each act or omission, upon conviction
Sec. 275, Tax CodeSlide45
ADDITIONS TO THE TAX45Slide46
ADDITIONS TO THE TAX46Slide47
CRIMINAL LIABILITIES47Slide48
CRIMINAL LIABILITIES48Slide49
Thank you49