TAX AUDIT & INVESTIGATION/grace L. Y./Nov.

17-2011

TAX AUDIT & INVESTIGATION

Selection of Taxpayers

Pre-Assessment Notice (PAN)

communication issued by the Regional Assessment Division, or any other concerned BIR Office,
informing a Taxpayer who has been audited of the findings of the Revenue Officer, following the
review of these findings.
If the Taxpayer disagrees with the findings stated in the PAN, he shall then have fifteen (15) days
from his receipt of the PAN to file a written reply contesting the proposed assessment`
When PAN is not required
When the finding for any deficiency tax is the result of mathematical error in the
computation of the tax appearing on the face of the tax return filed by the taxpayer
When a discrepancy has been determined between the tax withheld and the amount
actually remitted by the withholding agent
When a taxpayer who opted to claim a refund or tax credit of excess creditable withholding
tax for a taxable period was determined to have carried over and automatically applied the
same amount claimed against the estimated tax liabilities for the taxable quarter or
quarters of the succeeding taxable year
When the excise tax due on excisable articles has not been paid
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

When an article locally purchased or imported by an exempt person, such as, but not limited
to, vehicles, capital equipment, machineries and spare parts, has been sold, traded or
transferred to non-exempt persons
Issuance of the formal assessment notice for the payment of the taxpayers deficiency
tax liability shall be sufficient

Letter of Notice (LN)

informs a taxpayer of a discrepancy of sales/purchases for a particular taxable period,
which discrepancy arises from a matching system of the BIR
gives the opportunity to the taxpayer to refute the discrepancy raised by the LN within the
allowed period
Submission of relevant documents to substantiate the reported amount of
sales/purchases
What if the taxpayer ignores LN?
-closure
-criminal actions
-audit and investigation

When does the audit process begin?

The audit process commences with the issuance of a Letter of Authority to a taxpayer who has
been selected for audit.

What is a Letter of Authority (LA)?

official document that empowers a Revenue Officer to examine and scrutinize a Taxpayers
books of accounts and other accounting records
for audit/investigation of taxpayers under the jurisdiction of National Office, shall be
issued and approved by the Commissioner of Internal Revenue, while, for taxpayers
under the jurisdiction of Regional Offices, it shall be issued by the Regional Director
carries a request of documentation

Should cover a taxable period not exceeding one taxable year and prohibits of issuing LOAs
covering audit of unverified prior years
specifies the tax types
RMC 56-2010- Mandatory issuance of electronic Letters of Authority (eLA)
RMO 44-2010 Electronic Issuance of Letters of Authority

!!!!! ANY MANUALLY-WRITTEN CHARACTER ( ALPHABETIC OR NUMERICAL), NOTATION OR
ERASURE SHALL RENDER ELECTRONIC LA INVALID

Features of an Electronic Letter of Authority

bear the name, designation and electronic signature of the approving BIR Official
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

serial number of the electronic LA which is system-generated

date of the LA which is reflected on the date it was printed
names of the Revenue Officers assigned to a particular case (the first name on the space
provided shall be the lead RO)
tax types and taxable period to be covered
basis for the audit (i.e. regular audit program, special audit)
notation stating that the taxpayer is requested to verify the validity of the LA with the
authorized BIR official at the address and contact information provided therein

Served When? Within 30 days from the date of issuance

Days to conduct audit: 120 days
Revalidation of LA
takes effect upon issuance of new LA; but it can be revalidated only
once for those issued by RDO or RRO
twice for those issued by the National Office

How many times can a taxpayer be subjected to examination and inspection for the same taxable
year?

Only once for a taxable year except in the following cases:

-When the commissioner determines that fraud, irregularities or mistakes were committed by
Taxpayer
-When the taxpayer himself requests a re-investigation or re-examination of his books of accounts

Documentation and Sub Poena Duces Tecum

After LOA , BIR RO will proceed with the requested documents enumerated in the attachment of
the LOA. Taxpayer is ought to present such documents for ROs findings.
Second Request
Final Notice
Sub Poena Duces Tecum
Criminal Prosecution

Best Evidence Obtainable/Best Evidence Approach

When a report required by law as a basis for the assessment of any internal revenue tax shall
not be forthcoming within the time fixed by laws or rules and regulations or when there is
reason to believe that any such report is false, incomplete or erroneous, the Commissioner
shall assess the proper tax on the best evidence obtainable (Section 6 (B) of the NIRC)
Revenue Memorandum Circular No. 23-2000
Existing revenue procedures on the assessment of deficiency internal revenue taxes based
on the Best Evidence Obtainable
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

"Best Evidence Obtainable" is justified when the following grounds are clearly established:
The reports or records requested from the taxpayer are not forthcoming, i.e. the records are
lost; the taxpayer refuses to submit such records; and the reports submitted are false,
incomplete or erroneous.
Rulings and jurisprudence
1. When an Assessment Based on Estimate is Valid.
"An assessment based on estimate is prima facie valid and lawful where it does not appear to have
been arrived at arbitrarily or capriciously. The burden of proof is upon the complaining party to
show clearly that the assessment is erroneous...". (Marcos vs. C.A., G.R. No. 120880, June 5, 1997)
2. 50% Rule, in the Absence of Receipts to Prove Actual
Amount of Expense Deduction
"if there is a showing that expenses have been incurred but the exact amount of the deduction
cannot be ascertained due to the absence of documentary evidence, it is the duty of the BIR to make
an estimate of the deduction that may be allowed in computing the income, bearing heavily against
the taxpayer whose exactitude is of his own making. That disallowance of 50% of the taxpayer's
claimed deduction is valid." (Zamora vs. CIR, G.R. No. L-15290, May 31, 1963)
3. BIR Ruling on Assessment Based on Estimate
"If no documents of any kind are available or presented by the taxpayer, a comparative
determination of reasonable business expenses incurred by other taxpayers undertaking similar
kind of business should be ascertained to arrive at a reasonable determination of the deductible
business expenses. Under this procedure, the gross profit and net profit ratios of other taxpayers
engaged in the same line of business may be used in estimating the taxpayer's gross profit from
sales and net taxable income." (BIR Ruling No. 031-94, January 31, 1994)
4. Net Worth Method of Investigation
Determination of the taxpayer's taxable net income through the net worth method of investigation
is valid. "The existence of properties appearing in the name of the taxpayer or in the name of his
dummies or friends, without the taxpayer being able to give a definite reasonable explanation for
their existence justifies the Court of Tax Appeals and this Court to resort to the inventory method of
assessment, such being necessary and at the same time just and equitable." (Yao vs. CIR,
G.R. No. L-11875, December 28, 1963)
5. Taxpayer's Accounting Records are not Understandable
"If the authorized bookkeeping system is not understandable to the fieldman of this bureau, the
taxpayer must necessarily have to explain such system. If notwithstanding such explanation the
fieldmen cannot understand its operations, they may disregard such bookkeeping records so kept
and resort to the best evidence available reflecting the operation of the taxpayer." (BIR Ruling No.
572-59, October 19, 1959)
6. In the Absence of Taxpayer's Books of Accounts, Records of the Pertinent Government
Agency on the Industry's Revenue may be Used
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

"The income tax return is the best evidence for purposes of the sales tax although it may be
admitted that the same may be of some help in determining the true and correct amount of the
sales tax due. This Office believes that the official determination of the value of production of each
class of fishpond made by the provincial treasurer and assessor of your province should be given
more credence in the absence of the books of accounts and sales tax returns of said owners and
operators." (BIR Ruling No. 245-69, May 17, 1960)
7. When Secondary Evidence Offered by the Taxpayer is
Admissible
"Where a taxpayer questions the correctness of an assessment against him and is apparently not
acting in bad faith or merely attempting to delay payment, but is deprived of the best means of
proving his contention because his books of account were lost by the BIR agent who examined
them, said taxpayer must be given an opportunity to prove by secondary evidence, that the
assessment is incorrect." (Santos vs. Nable G.R. No. L- 12-73. May 23,1961)

POINTERS AC 528 JULY 28, 2016 EXAM (PART 1):

POINTERS: AC 528 - July 31, 2016
1. Bookkeeping, Invoicing & Registration - 3 rules in bookkeeping for tax
purposes; basic books of accounts to maintain; rules on loose leaves
posting & use of computerized system; who applies for the ATP; invoicing -
principal invoices and supplementary receipts; the difference between the
current invoicing system and the old invoicing system; scope of issuance of
principal receipts/invoices (...issued to customers in the ordinary course of
business...); the purpose of the issuance of supplementary receipts or
commercial invoices; what do you display in the office or company
premises after business registration, after paying the annual reg fees?
2.) What is 1905, 1906, 1907, 1701, 1701Q, 1702Q, 1702, 2307, 2306,
2550M, 2550Q, 2551M, 2551Q,?
3.) What is an Excise Tax?
4.) Electronic Filing and Payment System
5.) Mandatory eFPS enrollment of certain taxpayers
6.) How can taxpayers e-file their tax returns?
7.) How can taxpayers e-pay their taxes?
8.) What is 1700?
9.) Documentary requirements of Form 1701 & 1702
10.) What is form 1704?
11.) VAT; who are required to file VAT returns 12.) Documentary
requirements of BIR form 2550M 13.) Documentary requirements of BIR
form 2550Q
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

14.) What is a RELIEF SYSTEM?

15.) required to submit Summary List of Sales
16.) required to submit Summary List of Purchases
17.) Penalties for failure to submit the Summary Lists
18.) Grounds for Suspension
19,) What is a Letter of Notice (LN)?
20.) When does the Audit Process begin (LA)?
21.) What is a Letter of Authority (LA)?
22.) What is a Prelim Assessment NOtice?
23.) Features of an Electronic Letter of Authority.
24.) LA: served when?; days to conduct audit? revalidation of LA
25.) What is Sub Poena Duces Tecum?
1.) Selection of Taxpayers
2.) Pre-Assessment Notice (PAN)
3.) What is Best Evidence Obtainable? When is it justified? What are the
rulins and jurisprudence?
4.) REMEDIES FOR THE COLLECTION OF DELINQUENT TAXES (WILL
BE INCLUDED IN PART 2) 4.)
1. Application Forms

BIR Form No. 1900 Application to Use Loose-Leaf / Computerized Books of

Accounts and/or Accounting Records

Description

This form is to be accomplished by all taxpayers who intend to

apply for authority to use either Loose-Leaf / Computerized
Books of Accounts and/or Accounting Records.

To be accomplished with the Revenue District Office (RDO)

having jurisdiction over the Head Office/or branch.

Filing Date

Before actual use of Loose-leaf / Computerized Books of

Accounts and / or Accounting Records.
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

BIR Form No. 1901 Application for Registration for Self-Employed and Mixed
Income Individuals, Estates/Trusts

Description

This form is to be accomplished by self-employed and mixed

income individuals, estates/trusts doing/just starting a business,
or opening a new branch for registration.

To be accomplished with the RDO having jurisdiction over the

head office or branch office.

Filing Date

On or before commencement of new business or before

payment of any tax due or before filing a return.

BIR Form No. 1902 Application for Registration For Individuals Earning Purely
Compensation Income, and Non-Resident Citizens / Resident
Alien Employee

Description

This form is to be accomplished by an old or new employee

whether resident citizen or non-resident citizens earning purely
compensation income.

To be accomplished with the RDO having jurisdiction over the

taxpayer's residence or place of employment.

Filing Date

Filed within ten (10) days from the date of employment, or

before the payment of any tax due or before filing of a return, or
declaration is required.
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

BIR Form No. 1903 Application for Registration for Corporations/ Partnerships
(Taxable/Non-Taxable)

Description

This form is to be accomplished by Corporations, Government

Owned or controlled corporations, Partnerships, Government
Agencies and Instrumentalities, (GAI's) and Local Government
Units (LGU's).

To be accomplished with the RDO having jurisdiction over the

principal place of business or branch/regional office.

Filing Date

On or before commencement of business or before payment of

any tax due/ before filing a return.

BIR Form No. 1904 Application for Registration for One-Time Taxpayer and Persons
Registering under E.O. 98 (Securing a TIN to be able to transact
with any Government Office)

Description

This form is to be accomplished by one-time taxpayer and

persons registering and applying for a TIN (E.O. 98).

To be accomplished with the RDO having jurisdiction over the

place where property is located for one time taxpayer; or place
of residence for applicants under E.O. 98.

Filing Date

Before payment of any tax due/before filing of return or before

the issuance of TIN under E.O.98.

BIR Form No. 1905 Application for Registration Information Update for Updating /
Cancellation of Registration / Cancellation of TIN / New Copy of
TIN card / New copy of Certificate of Registration

Description

This form is to be accomplished by all taxpayers who intend to

update/change any data or information, e.g. transfer of business
within the same RDO, change in registered activities, cancellation
of business registration due to closure of business or transfer to
other district, or replacement of lost TIN Card/ Certificate of
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

Registration.

To be accomplished with the RDO having jurisdiction over the

taxpayer, whether Head Office or branch.

Filing Date

Filed each time taxpayer needs to register the change in

registration such as but not limited to change in registered
activities, change in tax type details etc. except those changes to
be filed under Form 2305; replacement of lost TIN Card / lost
Certificate of Registration or cancellation or registration and/or
TIN.

BIR Form No. 1906 Application for Authority to Print Receipts and Invoices

Description

This form is to be accomplished by all taxpayers everytime

printing of receipts and invoices is needed.

To be accomplished with the RDO having jurisdiction over Head

Office or branch.

Filing Date

Filed each time taxpayer needs to print receipts and invoices.

BIR Form No. 1907 Application for Permit to Use Cash Register machines/Point-of-
Sale Machine

Description

This form is to be accomplished by all taxpayers who intend to

use Cash Register Machines in lieu of Official Receipts/ Invoices,
or Cash Register Machine used as cash depository; or Point-of-
Sale Machine in lieu of Official/ Invoices.

To be accomplished with the RDO having jurisdiction over the

Head Office or branch.

Filing Date

Filed each time taxpayer will use a new cash register machine
unit or point-of-sale machine unit.
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

BIR Form No. 1914 Application for Tax Credits/Refunds

Description

To be accomplished and filed by taxpayer applying for tax credits

or refunds

Filing Date

BIR Form No. 1915 Application for Tax Credit Certificate Utilization

Description

To be accomplished and filed by taxpayer applying for tax credits

certificate utilization.

Filing Date

BIR Form No. 1916 Tax Practitioner's Application for Accreditation (Individual)

Description

To be accomplished and filed by tax practitioners (individual)

applying for accreditation

Filing Date

BIR Form No. 1917 Tax Practitioner's Application for Accreditation

(Partnership/Corporation)

Description

To be accomplished and filed by tax practitioners

(partnership/corporation) applying for accreditation

Standard and Special BIR Forms

a. Income Tax Return

BIR Form No. Annual Income Tax Return for Individuals Earning Purely Compensation
1700 Income (Including Non-Business/Non-Profession Income)

Description

This return shall be filed by every resident citizen deriving compensation income
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

from all sources, or resident alien and non-resident citizen with respect to
compensation income from within the Philippines, except the following:

1. An individual whose gross compensation income does not exceed his total
personal and additional exemptions.

2. An individual with respect to pure compensation income, as defined in

Section 32(A)(1) derived from sources within the Philippines, the income tax on
which has been correctly withheld (tax due equals tax withheld) under the
provisions of Section 79 of the Code: Provided, that an individual deriving
compensation concurrently from two or more employers at any time during the
taxable year shall file an income tax return.

3. An individual whose income has been subjected to final withholding tax (alien
employee as well as Filipino employee occupying the same position as that of
the alien employee of regional or area headquarters and regional operating
headquarters of multinational companies, petroleum service contractors and
sub-contractors, and offshore banking units; non-resident alien not engaged in
trade or business).

4. A minimum wage earner or an individual who is exempt from income tax.

Filing Date

This return is filed on or before April 15 of each year covering income for the
preceding taxable year.

BIR Form No. Annual Income Tax Return for Self-Employed Individuals, Estates and Trusts
1701
Description

BIR Form No. 1701 shall be filed by individuals who are engaged in
trade/business or the practice of profession including those with mixed income
(i.e., those engaged in the trade/business or profession who are also earning
compensation income) in accordance with Sec. 51 of the Code, as amended. The
annual income tax return summarizes all the transactions covering the calendar
year of the taxpayer.

This return shall be filed by the following individuals regardless of amount of

gross income:

1. A resident citizen engaged in trade, business, or practice of profession within

 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

and without the Philippines.

2. A resident alien, non-resident citizen or non-resident alien individual engaged

in trade, business or practice of profession within the Philippines.

3. A trustee of a trust, guardian of a minor, executor/administrator of an estate,

or any person acting in any fiduciary capacity for any person, where such trust,
estate, minor, or person is engaged in trade or business.

4. An individual engaged in trade or business or in the exercise of their

profession and receiving compensation income as well.

Filing Date

This return is filed on or before April 15 of each year covering income for the
preceding taxable year.

BIR Form No. Quarterly Income Tax Return for Self-employed Individuals, Estates, and Trusts
1701Q (Including Those with both Business and Compensation Income)

Description

This return shall be filed in triplicate by the following individuals regardless of

amount of gross income:

1) A resident citizen engaged in trade, business, or practice of profession within

and without the Philippines.

2) A resident alien, non-resident citizen or non-resident alien individual engaged

in trade, business or practice of profession within the Philippines.

3) A trustee of a trust, guardian of a minor, executor/administrator of an estate,

or any person acting in any fiduciary capacity for any person, where such trust,
estate, minor, or person is engaged in trade or business.

Filing Date

1st qtr On or before April 15 of the current taxable year

2nd qtr On or before August 15 of the current taxable year
3rd qtr On or before November 15 of the current taxable year

BIR Form No. Annual Income Tax Return for Use ONLY by Corporation, Partnership and
1702-EX Other Non-Individual Taxpayer EXEMPT under the Tax Code, as Amended,
{Sec. 30 and those exempted in Sec. 27(C) and Other Special Laws, with NO
Other Taxable Income
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

Description

This return shall be filed by a Corporation, Partnership and Other Non-Individual

Taxpayer EXEMPT under the Tax Code, as amended [Sec. 30 and those
exempted in Sec. 27(C)] and other Special Laws WITH NO OTHER TAXABLE
INCOME such as but not limited to foundations, cooperatives, charitable
institutions, non-stock and non-profit educational institutions, General
Professional Partnership (GPP) etc.

Filing Date

This return is filed on or before the 15th day of the 4th month following the
close of the taxpayer's taxable year.

BIR Form No. Annual Income Tax Return for Corporation, Partnership and Other Non-
1702-MX Individual with MIXED Income Subject to Multiple Income Tax Rates or with
Income Subject to SPECIAL/PREFERENTIAL RATE

Description

This return shall be filed by every Corporation, Partnership and Other Non-
Individual Taxpayer with MIXED Income subject to MULTIPLE INCOME TAX
RATES or with income subject to SPECIAL/PREFERENTIAL RATE.

Filing Date

This return is filed, with or without payment, on or before the 15th day of the
4th month following the close of the taxpayer's taxable year.

BIR Form No. Annual Income Tax Return for Corporation, Partnership and Other Non-
1702-RT Individual Taxpayer Subject Only to REGULAR Income Tax Rate

Description

This return shall be filed by Corporation, Partnership and other Non-Individual

Taxpayer Subject Only to REGULAR Income Tax Rate of 30%. Every corporation,
partnership no matter how created or organized, joint stock companies, joint
accounts, associations (except foreign corporation not engaged in trade or
business in the Philippines and joint venture or consortium formed for the
purpose of undertaking construction projects or engaging in petroleum, coal,
geothermal and other energy operations), government-owned or controlled
corporations, agencies and instrumentalities shall render a true and accurate
income tax return in accordance with the provisions of the Tax Code.

Filing Date

This return is filed, with or without payment, on or before the 15th day of the
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

4th month following close of the taxpayer's taxable year.

BIR Form No. Quarterly Income Tax Return for Corporations, Partnerships and Other Non-
1702Q Individual Taxpayers

Description

This return is filed quarterly by every corporation, partnership, joint stock

companies, joint accounts, associations (except foreign corporation not engaged
in trade or business in the Philippines and joint venture or consortium formed
for the purpose of undertaking construction projects or engaging in petroleum,
coal, geothermal and other energy operations), government-owned or
controlled corporations, agencies and instrumentalities.

Filing Date

The corporate quarterly income tax return shall be filed with or without
payment within sixty (60) days following the close of each of the first three (3)
quarters of the taxable year whether calendar or fiscal year.

BIR Form No. Annual Income Information Return for Non-Resident Citizens / OCWs and
1703 Seamen (for foreign-sourced income)

Description

This information return is filed in triplicate by Non-resident citizens and

Overseas Contract Workers (OCWs), including qualified Filipino seamen, on
income derived from sources abroad.

An individual citizen of the Philippines who is working and deriving income from
abroad as an overseas worker is taxable only on income from sources within the
Philippines. Income from sources within the Philippines should be filed in either
Form 1700 or Form 1701.

Filing Date

This information return is filed not later than the April 15 of the year following
the taxable year in which the income was earned.

BIR Form No. Improperly Accumulated Earnings Tax Return

1704
Description

This form is to be filed by every domestic corporation classified as closely-held

corporation except banks and other non-bank financial intermediaries,
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

insurance companies, taxable partnerships, general professional partnerships,

non- taxable joint ventures and enterprises duly registered with the Philippine
Economic Zone Authority (PEZA) under R.A. 7916, and enterprises registered
pursuant to the Bases Conversion and Development Act of 1992 (R.A. 7227), and
other similar laws, shall render a true and accurate tax return in accordance
with the provision of the Tax code.

Filing Date

The return shall be filed within 15 days after the close of the year immediately
succeeding taxpayer's covered taxable year.

BIR Form No. Capital Gains Tax Return for Onerous Transfer of Real Property Classified as
1706 Capital Asset (both Taxable and Exempt)

Description

This return is filed by all persons (natural or juridical) whether resident or non-
resident, including Estates and Trusts, who sells, exchanges, or disposes of a real
property located in the Philippines classified as capital asset as defined under
Sec. 39 (A)(1) of RA 8424 for the purpose of securing a Tax Clearance Certificate
to effect transfer of ownership (title) of the property from the seller to the
buyer.

However, filing of the return is no longer required when the real property
transaction involves the following:

- it is not classified as a capital asset

- not located in the Philippines
- disposition is gratuitous
- disposition is pursuant to the Comprehensive Agrarian Reform

To be filed with the RDO having jurisdiction over the place where the property
being transferred is located.

Filing Date

- Filed within thirty (30) days following each sale, exchange or disposition of real
property

- In case of installment sale, the return shall be filed within thirty (30) days
following the receipt of the 1st downpayment and within thirty (30) days
following each subsequent installment payment

- One return is filed for every transfer document regardless of the number of
each property sold, exchanged or disposed of.
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

BIR Form No. Capital Gains Tax Return for Onerous Transfer of Shares of Stocks Not Traded
1707 Through the Local Stock Exchange

Description

This return is filed by a natural or juridical person, resident or non-resident, who

is not exempt under existing laws for the sale, barter, exchange or other
onerous disposition intended to transfer ownership of shares of stocks in
domestic corporation classified as capital assets, not traded through the local
stock exchange.

Filing Date

- Filed within thirty (30) days after each cash sale, barter, exchange or other
disposition of shares of stock not traded through the local stock exchange.

- In case of installment sale, the return shall be filed within thirty (30) days
following the receipt of the first down payment and within (30) days following
each subsequent installment payment.

BIR Form No. Annual Capital Gains Tax Return for Onerous Transfer of Shares of Stock Not
1707-A Traded Through the Local Stock Exchange

Description

This return is filed by every natural or juridical person, resident or non-resident,

who is not exempt under existing laws for sale, barter, exchange or other
disposition of shares of stock in a domestic corporation, classified as capital
assets, not traded through the local stock exchange.

Filing Date

- For individual taxpayers, this final consolidated return is filed on or before April
15 of each year covering all stock transactions of the preceding taxable year.

- For corporate taxpayers, this form is filed on or before the fifteenth (15th) day
of the fourth (4th) month following the close of the taxable year covering all
transactions of the preceding taxable year.

b. VAT

BIR Form No. 2550M Monthly Value-Added Tax Declaration

Download Description

(Zipped Excel) This return/declaration shall be filed in triplicate by the

TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

following taxpayers;

1. A VAT-registered person; and

2. A person required to register as a VAT taxpayer
but failed to register.

This return/declaration must be filed by the

aforementioned taxpayers for as long as the VAT
registration has not yet been cancelled, even if there is no
taxable transaction during the month or the aggregate
sales/receipts for any 12-month period did not exceed the
P1,500,000.00 threshold.

Filing Date

For Manual EFPS

A) Large and Not later than the In accordance with
Non-large 20th day the schedule set
Taxpayer following the forth in RR No. 26-
close of the 2002 as follows:
month.
Group A : Twenty
five (25) days
following end of the
month

Group B : Twenty
four (24) days
following end of the
month

Group C : Twenty
three (23) days
following end of the
month

Group D : Twenty
two (22) days
following end of the
month

Group E : Twenty
one (21) days
following end of the
month
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

BIR Form No. 2550Q Quarterly Value-Added Tax Return

Description

This return/declaration shall be filed in triplicate by the

following taxpayers;

1. A VAT-registered person; and

2. A person required to register as a VAT taxpayer
but failed to register.

This return/declaration must be filed by the

aforementioned taxpayers for as long as the VAT
registration has not yet been cancelled, even if there is no
taxable transaction during the month or the aggregate
sales/receipts for any 12-month period did not exceed the
P1,500,000.00 threshold.

Filing Date

This return is filed not later than the 25th day following
the close of each taxable quarter. The term "taxable
quarter" shall mean the quarter that is synchronized to
the income tax quarter of the taxpayer (i.e. Calendar
quarter of Fiscal Quarter)

BIR Form No. 2551M

Monthly Percentage Tax Return

Description

This return shall be filed in triplicate by the following:

1. Persons whose gross annual sales and/or receipt

do not exceed P1,500,000 and who are not VAT-
registered persons;
2. Domestic carriers and keepers of garages, except
owners of bancas and owners of animal-drawn
two wheeled vehicle;
3. Operators of international air and shipping
carriers doing business in the Philippines;
4. Franchise grantees of gas or water utilities;
5. Franchise grantees of radio and/or television
broadcasting companies whose gross annual
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

receipts of the preceding year do not exceed Ten

Million Pesos (P10,000,000.00) and did opt to
register as VAT taxpayers;
6. Banks, non-bank financial intermediaries and
finance companies;
7. Life insurance companies;and
8. Agent of foreign insurance companies.

Filing Date

For Manual EFPS

A) Large and Not later than the In accordance with
Non-large 20th day the schedule set
Taxpayer following the end forth in RR No. 26-
of each month. 2002 as follows:

Group A : Twenty
five (25) days
following end of the
month

Group B : Twenty
four (24) days
following end of the
month

Group C : Twenty
three (23) days
following end of the
month

Group D : Twenty
two (22) days
following end of the
month

Group E : Twenty
one (21) days
following end of the
month
BIR Form No. 2551Q Quarterly Percentage Tax Return

Description

This return shall be filed in triplicate by the following:

 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

1. Franchise grantees sending overseas dispatch,

messages or conversation from thePhilippines; and

2. Proprietor, lessees or operators of cockpits, cabarets,

night or day clubs, boxing exhibitions, professional
basketball games, jai-alai and racetracks.

Filing Date

The return shall be filed and the tax paid within twenty
(20) days after the end of each taxable quarter.

Excise Tax (BIR Form 1801 - Estate Tax Return)

BASIC CONCEPT:

Excise Tax is a tax on the production, sale or consumption of a commodity in a country.

APPLICABILITY:

On goods manufactured or produced in the Philippines for domestic sale or consumption or for
any other disposition; and
On goods imported.

TYPES OF EXCISE TAX:

Specific Tax refers to the excise tax imposed which is based on weight or volume capacity or
any other physical unit of measurement
Ad Valorem Tax refers to the excise tax which is based on selling price or other specified value
of the goods/articles

MANNER OF COMPUTATION:

Specific Tax = No. of Units/other measurements x Specific Tax Rate

Ad Valorem Tax = No. of Units/other measurements x Selling Price of any specific value per unit
x Ad Valorem Tax Rate

MAJOR CLASSIFICATION OF EXCISABLE ARTICLES AND RELATED CODAL SECTION:

1. Alcohol Products (Sections 141-143)

A .Distilled Spirits (Section 141)

b. Wines (Section 142)
c. Fermented Liquors (Section 143)
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

2. Tobacco Products (Sections 144-146)

a. Tobacco Products (Section 144)

b. Cigars & Cigarettes (Section 145)
c. Inspection Fee (Section 146)

3. Petroleum Products (Section 148)

4. Miscellaneous Articles (Section 149-150)

a. Automobiles (Section 149)

b. Non-essential Goods (Section 150)

5. Mineral Products (Sections 151)

PERSONS LIABLE TO EXCISE TAX:

In General:

a. On Domestic or Local Articles

Manufacturer
Producer
Owner/person having possession of articles removed from the place of production without the
payment of the tax

b. On Imported Articles

Importer
Owner
Person who is found in possession of articles which are exempt from excise taxes other than those
legally entitled to exemption

Others:

On Indigenous Petroleum

Local Sale, Barter or Transfer

o First buyer, purchaser or transferee
Exportation
o Owner, lessee, concessionaire or operator of the mining claim

TIME OF PAYMENT:

In General

On domestic products
 TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011

o Before removal from the place of production

On imported products
o Before release from the customs' custody
TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011
TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011