COOPERATIVES:

CATCHING THE
TRAIN
OUTLINE OF PRESENTATION

Overview of the Philippine Tax System

Focus on Cooperatives: Review of the Basics
Tax Exemptions for Cooperatives
RA 10708: the Tax Incentives Management and Transparency Act
Withholding Taxes
Other Tax Compliances and Reminders
Tax Investigation of Coops
Updates: Keeping, Maintaining and Registration of Books and the Enhanced
BIR Registration Forms
OVERVIEW:

Philippine
Taxation System
 PHILIPPINES TAXATION SYSTEM

Self – Pay as you Pay as you

Assessment Earn File
 Income Taxpayers

Kinds of Taxpayers
Compensation Business Owners/ Passive Income Exempt Income
According to
Source Income Earners Professionals Earners Earners

Individuals Individuals Individuals

WHO Individuals Corporations Corporations Corporations
Partnerships Partnerships Partnerships

WT on
How: PAYE Creditable Wtax Final W-Tax NA
Compensation

Tax due less

Tax Due less CWT=
How: PAYF Wtax Comp/ No No File File but no pay
Tax Payable
File-SF
On or before Remits on or On or before
Quarterly and
When April 15 of the ff before 10thday 15thday of the
Annually
year AEM 4thMo. AEY
 Business Taxpayers

Business Owners/
Professionals

Non-
VAT TP
VAT TP

12% 0% Exempt % TP
 VAT Taxpayers
VAT TP

12% 0%

Automatic Effectively
Sale to Govt Sale to Private
zero-rating zero-rating
 Non-VAT Taxpayers
a. agri/marine FP b.
Non VAT v. Seller P3M & <
fertilizers
c.d settling -personal effects
TP (109)
117 3% Common Carriers
e.f. percentage TP/ACG
118 3% Int’l Carriers
g.h. medical etc/eduservices Percentage
Exempt
TP 119 3%/2% Franchises
i.j. employees/RAH multi-N TP
k.L .int’l agree/agricoop (109) 116-127 120 10% Overseas Dispatch
m.n. credit/multipother 121 0-7% Banks and NBFI
Coop
o.p. export/real properties
122 1-5% Other NBFI
q.r.s leases/books,int’l C
123 5% Life Ins Premiums
t.u cargo V/fuel in’tl opera
v. w. banks, NBFI/SC/PWD 124 10% Agents Foreign Ins
v. Seller of G/S > 125 10-30% Amusement Tax
xP1,919,500
y Sec40 assn condo units
126 4-10% Tax on Winnings
z aa gold BSP/Medicines
bb Sales/Receipts P3M< 127 ½ of 1% S of S LSE
 Philippine Taxes
Taxes

Income Tax National Mayor’s permit

Local
Internal
Estate and Donor’s Taxes
revenue Taxes Sales Taxes

Value Added Tax Various fees

Other Percentage Taxes Real Property Taxes

Excise Tax
Documentary Stamp Taxes

Registration Fee

Miscellaneous Taxes
Legal References

Republic Acts
Revenue Regulations
RMCs/RMOs

BIR Rulings

CTA Decisions

Supreme Court Decisions

01
FOCUS on Cooperatives
• Review of the Basics
LEGAL STATUTES ON COOPS

(Cooperative Was amended

RA 6938 Code of the March 10, 1990 and
Philippines) renumbered

(The Philippine
February 17,
RA No. 9520 Cooperative
2009
Code of 2008)
JOINT RULES AND
REGULATIONS-
DOF, BIR AND CDA
 Kinds of Cooperatives under Articles 60
& 61 RA 9520
RMC 12-2010 • Those transacting with members only
-FEB 11, • Those transacting with members and of non-
2010 members with ARUNS of not more than
JOINT RR 10 M
FOR
• Those transacting with members and non-
ARTICLES
members with ARUNS of more than 10M
60, 61 & 144
RMC 12-2010 -
FEB 11, 2010
JOINT RR FOR
ARTICLES 60,
61 & 144 Article 60: Coops which
transacts with Members only.
 Article 61 (a)
RMC 12-2010 • Coops which transacts with
-FEB 11, Members and Non-Members with
2010 ARUNS of not more than P10M.
JOINT RR
FOR • Exempt from all national internal
ARTICLES revenue taxes as Coops in Art 60.
60, 61 & 144
 Article 61 (b)
RMC 12-2010 • Coops which transacts with
-FEB 11, 2010 Members and Non-Members with
JOINT RR ARUNS more than P10M.
FOR
ARTICLES • Exempt from all national internal revenue
60, 61 & 144 taxes as Coops in Art 60 with respect to
transactions with Members but subject to
NIRC Taxes with respect to transactions
with non-members.
 Section 7 of RMC 12-10
Exemption of Coops under Art 60
RMC 12-2010 - • Income tax
• VAT
FEB 11, 2010 • Percentage Tax
JOINT RR FOR • Donor’s Tax on donations to duly accredited
ARTICLES 60, charitable, research and educational
61 & 144 institutions re-investment to socio-economic
projects within the area of operation of the
Coop
• Excise tax for which it is directly liable
 DST provided the other party who is not exempt shall
be the one directly liable

RMC 12-2010 - Annual Registration fee of P500.00

FEB 11, 2010

JOINT RR FOR All taxes on transactions with insurance companies and
banks, including but not limited to 20% final tax on interest
ARTICLES 60, deposits and 7.5% final income taxon interest income
derived from a depository bank under the EFCDS
61 & 144
Electric coops shall be exempt from VAT on revenues on
systems loss and on revenues on distribution, supply,
metering and lifeline subsidy to their members .
TAXABILITY OF ALL COOPERATIVES,
REGARDLESS OF CLASSIFICATION
01 02
Capital gains from sale of DST on transactions of coops
shares of stocks and dealing with non members,
other disposition of real except transactions with
banks and insurance
property classified as companies, Provided that
capital assets; whenever one party to the
taxable document enjoys the
exemption from DST, the
other party who is not
exempt shall be the one
directly liable for DST;
03
VAT billed on purchases of
goods and services, except
VAT on the importation of
Agri coops of direct farm
inputs, machineries and
equipment, including spare
parts thereof, to be used
exclusively and directly in
the production of their
produce under Sec 109(L)
NIRC;
TAXABILITY OF ALL COOPERATIVES
REGARDLESS OF CLASSIFICATION

W-tax on compensation of employees;

Income and business taxes on unrelated income to the

main/principal business under its Articles of Cooperation;

All other taxes for which coops are directly liable and not
otherwise exempted by any law.
RMC 12-2010 -FEB 11, 2010
JOINT RR FOR ARTICLES 60, 61 & 144

Liabilities of Coops under Art 61B

• Income tax –on the amount allocated for interest on capital ; Provided
That the same tax is not consequently imposed on interest individually
received by the members. Tax base is net surplus arising from the business
transactions with non-members after deducting the amounts from the
statutory reserve funds
RMC 12-2010 -FEB 11, 2010
JOINT RR FOR ARTICLES 60, 61 & 144
Liabilities of Coops under Art 61B: VAT on transactions with non-
members, except:
Sales by agricoop to their members as well as non-members; importation of direct farm
inputs, machineries and equipment and spare parts directly used in the production or
processing of their produce.
Gross receipts from lending activities by credit or multi-purpose coops

Sales by non-agri, non-electric and non-credit coops, provided that the share capital
contributions of each member does not exceed P15,000, regardless of the aggregate capital
and net surplus ratably distributed among members.
 Section 9 Unrelated
Income of Coops

All income of cooperatives not related

RMC 12-2010 - to the main/ principal business/es
FEB 11, 2010 shall be subject to all appropriate taxes
under the NIRC.
JOINT RR FOR
ARTICLES 60, This is applicable to all types of
61 & 144 cooperatives whether dealing purely with
members or both members and non-
members.
 Sec 11. Taxability of Members/Share
Holders of Coops
All members of coops shall be liable to
RMC 12-2010 - pay NIRC taxes except for the following:
FEB 11, 2010 • Any tax and fee, including but not limited to
JOINT RR FOR final tax on members deposits or fixed
deposits (otherwise known as share capital)
ARTICLES 60, 61 with cooperatives and documentary tax on
& 144 transactions of members with the Coop; and
• Patronage Refund which includes all refunds,
returns or rebates of the net savings generated
from the operation of the coop.
Other Income of Coops
And Coop Members
INVESTMENT IN GOVERNMENT BONDS
BIR RULING 169-12

Though cooperatives are exempt from

certain taxes, nevertheless exemption
In view of the foregoing, the request
from final tax of the Coliling Farmer's
for exemption from final tax
Savings and Credit Cooperative's
relative to its investment in
investment in government bonds is not
government bonds is hereby
among those exemptions granted by
denied for lack of legal basis.
law as the investment is not related to
the cooperative's principal business.
• Circularized the decision of the Supreme RMC 47-2011
Court that the petitioner, Dumaguete DATED OCT 5,
Cathedral Credit Cooperative is not 2011
liable to pay the assessed deficiency
INTEREST ON
DEPOSITS OF
withholding taxes on interest
MEMBERS
income from the savings and time
deposits of its members.
 TAX
EXEMPTION
FOR COOPS
BACKGROUND

RMO 076-2010 (Prescribing the policies and Guidelines in the Issuance of

Certificate of Tax Exemption (CTE) of Cooperatives and the Monitoring
Thereof) requires, for the issuance of CTE, that cooperatives submit
o Original Copy of Certification under Oath of the List of Cooperative Members
with their respective Taxpayer Identification Number (TIN) and their
capital contributions, prepared by an authorized official of the Cooperative.
 BACKGROUND

The above requirement has been relaxed by Revenue

Memorandum Circular (RMC) No. 81-2010 which allowed, in lieu
thereof, the submission of Certified Photocopy of the List of
Cooperative Members with their Respective Capital
Contributions.

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PROCESS
FLOW
 Clarification on the Requirement of
Taxpayer Identification Number (TIN) for
Members of cooperatives Applying for
RMO 102-2016 Certificate of Tax Exemption (CTE)
under RMO No. 76-2010 and RMC No. 81-
2010.

3/12/2019
 • The TIN requirement is pursuant to Executive
Order (EO) No. 98, series of 1999, which
requires persons, whether natural or juridical,
BACKGROUND dealing with all government agencies and
instrumentalities, including government-owned
and/or controlled corporations (GOCCs), and
all local government units (LGUs), to
incorporate their TIN in all forms, permits,
licenses, clearances, official papers and
documents which they secure from said
government agencies, instrumentalities, GOCCs
and LGUs..

3/12/2019
 Processing & Issuance of CTE
• The concerned Revenue District
Offices (RDOs) shall allow the
CTE UPDATES processing and issuance/revalidation
of CTEs of qualified cooperatives
which do not have yet the TIN of
members, provided that they submit,
in lieu hereof, an original copy of
Certification under oath of the list of
cooperative members, with their full
name and capital contribution.
 CTE UPDATES

Processing & Issuance of

CTE
• Cooperatives shall file the application
for CTE using the duly accomplished
BIR Form 1945 (revised October
2016), and submit other
documentary requirements set forth
under Section 5 (A) or (B) of RMO
No. 76-2010, as the case may be.
DOCUMENTARY REQUIREMENTS
ORIGINAL RENEWAL

1. CTC of ACBL 1. CTC of COR with CDA

2. CTC of COR with CDA 2. Latest ACBL
3. CTC of CGS (COC) 3. Current CGS (COC)
4. CTC of COR with BIR 4. Latest FS
5. Original copy of certification under oath
the list of cooperative members with their
capital contributions prepared
by authorized officer of the cooperative.

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 Processing & Issuance of CTE
• The concerned RDOs shall not deny, or put on hold
CTE UPDATES the processing and issuance of the CTE solely on the
basis of the non-submission of the TIN of the
cooperative members. It is clarified, however, that
cooperatives, which have been granted with CTE are
still required to complete and submit to the concerned
RDO the required TINs of their members within six
(6) months from the issuance of the CTE.

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PROCESSING & ISSUANCE OF TIN
• a person who is not employed or engaged in business
or practice of profession, may apply for a TIN by filing
the duly accomplished BIR Form 1904, together with a
photocopy of any identification issued by an authorized
government body (“eg. birth certificate, vote's ID,
community tax certificate or cedula, passport, driver's
license, etc.) which shows the name, address and
birthdate of the person.
PROCESSING &
ISSUANCE OF TIN
to assist its members in securing TIN, the
cooperative, with proper authorization
from the members, may apply for the
issuance of TIN in behalf of its members,
by collating the duly accomplished BIR
Form 1904 of the members and valid
identifications in support thereof, which
shall be submitted to the concerned
RDO for the processing and issuance of
the TIN.
3/12/2019
 • non-submission by the cooperatives
of the members’ TIN requirement
REVOCATION within six (6) months from the
OF CTE issuance of the CTE shall be a ground
for the revocation of the CTE, in
addition to those set forth under
Section B of RMO No. 76-2010

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SECTION 8. • Pursuant to Section 14 of the Joint
VALIDITY Rules and Regulations, the Certificate
OF THE CTE of Tax Exemption shall be valid for a
period of five (5) years from the date
of issue or date of effectivity, unless
sooner revoked or cancelled.
CTE HOLDERS:
DON’T GET
FRAMED!
 Attach the following
documents to your ITR

Certified True Copy of the current and effective Certificate of

Good Standing from CDA;
CTE Original Copy of certificate under oath by the Chairperson/General

HOLDERS Manager stating the following:

• the type/category of cooperative and the principal
activities/business transactions it is engaged in both members and
non-members, whichever is applicable;
• the amount of the accumulated reserves as of the year end
concerned;-
• the amount of net surplus for the year; and
• that at least 25% of the net surplus is returned to the members in
the form of interest on share capital and/or patronage refund.

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CTE HOLDERS Attach the following documents
to your ITR
Original Copy of yearly summary of records of transactions clearly showing which
transactions correspond to members or in case the cooperative deals with members
and non-members, yearly summary of records of transactions clearly showing which
transactions correspond to members and non-members; and
Certified Photocopy of the list of Cooperative Members with their Respective Capital
Contributions submitted by the cooperatives in obtaining their Certificate of
Confirmation of New Registration and Certificate of Good Standing with the
Cooperative Development Authority(CDA). (as amended by RMC No. 8l-2010)
FAILURE of the cooperatives to comply with the above requirements shall be a
ground for cancellation/revocation of the Certificate of Tax Exemption.

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 Concerned withholding
agents shall require all
individuals and entities
claiming such entity to
provide a copy of a valid,
current and subsisting
PRESENTATION TEC or ruling.
OF TEC
RMC 8-2014
The TEC or ruling must
explicitly recognize the
grant of tax exemption, as
well as the corresponding
tax exemption from
imposition of withholding
tax.
REVOCATION OF
TAX EXEMPTION
 Some cooperatives that have been granted
tax incentives or exemptions have taken
advantage of their favored tax treatment.
Abuse and irregularities that may arise
include extending the tax exemption
RMC 64-2009 – entitlement to non-qualified activities.

NOV 25, 2009

REVOCATION Example: Davao Contractors
Development Cooperative
OF TAX (DACODECO) which was discovered
EXEMPTION not complying the conditions as a tax
exempt credit cooperative after its
registration..
RMC 64-2009 – EXCERPTS FROM LETTER BY BIR TO DACODECO
NOV 25, 2009 Please be informed that based on the investigation conducted
REVOCATION by our BIR RDO pursuant to LA No. 47574 dated 24 May 2007,
OF TAX it was discovered that the conditions for which you have been
EXEMPTION granted a tax exemption by this Office had not been kept.
While you originally registered as a credit cooperative,
you later caused your articles to be amended to enable
your organization to be engaged in engineering
construction and manpower services and in the
distribution of construction materials to local
government units (LGUs), including the City
Government of Davao, which are non-members of
DACODECO
 • EXCERPTS FROM LETTER BY BIR TO DACODECO
Your total revenues in 2005 alone, arising from your
RMC 64-2009 – construction business, had already reached 169.5 Million
NOV 25, 2009 Pesos. Such activities, which are basically profit-
REVOCATION oriented similar to a taxable partner-ship or
OF TAX corporation engaged in construction, no longer
EXEMPTION serve the objectives and purpose of a cooperative,
and are therefore subject to the regular taxes
imposed under the Tax Code.
 EXCERPTS FROM LETTER
BY BIR TO DACODECO
• It was likewise discovered based
RMC 64-2009 – on your 2005 FSs that you have
NOV 25, 2009 no construction equipment and
REVOCATION assets. The fact that your
OF TAX construction services are being
EXEMPTION undertaken by sub-contractors is
indicative of lack of self-reliance.
 EXCERPTS FROM LETTER BY BIR TO
DADECO
• DACODECO amended its articles to include a
business of being engaged in engineering
construction, manpower service and distribution
RMC 64-2009 – of construction materials. Thereafter,
NOV 25, 2009 DACODECO engaged in said businesses by
REVOCATION transacting with non-members of DACODECO.
OF TAX These transactions are basically profit oriented,
and does not anymore serve the objectives and
EXEMPTION
purpose of a cooperative. As a result, the
Commissioner of Internal Revenue revoked
its tax exemption status.
JOINT DOF-DTI AO 1-2016 JUNE 23, 2016

Rules and Regulations to

Implement RA 10708 (Tax
Incentives Management &
Transparency Act)
DEFINITION
OF TERMS
Investment Promotion
Agencies (IPAs)

government entities created by law, executive o

rder, decree or other issuance, in charge pr
omoting investments, administering tax and
nontax incentives, and/or overseeing the oper
ations of the different economic zones and fre
eports in accordance with their respective char
ters.
DEFINITION OF
TERMS
Registered Business
Entity (RBE)

any individual, partnership or

corporation, Philippine branch of a
foreign corporation or other entity
incorporated and or organized
under Philippine Laws and
registered with an IPA.
DEFINITION
OF TERMS
Tax Incentives

Fiscal incentives such as those which come

in the form of Income Tax Holiday,
exemptions, deductions, credit and
exclusions from the tax base as provided by
law to RBEs.
DEFINITION
OF TERMS
Annual Tax Incentive
Report of RBE

The report of the RBE to its respective

IPA containing complete information
on income-based tax incentives,VAT
incentives, duty exemptions, deductions
from the tax base and other info
required under these rules.
ANNUAL TAX INCENTIVE REPORT

ANNEX A.1 ANNEX A.2

POLICY Section 5 (b) of R.A. 10963 Power of the
FRAMEWORK Commissioner
“xxx
Provided, that the Cooperative Development Auth
ority shall submit to the Bureau of Internal
Revenue a tax incentive report, which shall include
information on the income tax, value
added tax, and other tax incentives availed of by co
operatives registered and enjoying incentives under
Republic Act No. 6938, as amended.
POLICY
FRAMEWORK Section 5 (b) of R.A. 10963
Provided, further, that the information submitted
by the Cooperative Development Authority to
the Bureau of Internal Revenue shall be included
in the database created under RA 10708
otherwise known as “The Tax Incentive
Management and Transparency Act (TIMTA)”
RESPONSIBILITIES
OF THE RBE
File income tax returns and pay
tax liabilities on or before the
deadline as provided under the
NIRC through the Electronic
Filing and Payment System
(eFPS).
File with the respective IPAs
an Annual Tax Incentives
Report within 30 days from
deadline for filing of Final
Adjustment Return.
RESPONSIBILITY OF THE
IPAS
Submit to the BIR the following:
• Master list of all RBEs, whether
granted incentives or not;
• Consolidated Annual Tax
Incentives Report on income-
based tax incentives;
• Consolidated Annual Tax
Incentives Report on VAT
incentives and duty exemptions
 REGISTERED FAILURE TO 1ST VIOLATION –
BUSINESS ENTITY COMPLY WITH
FILING AND
PAYMENT OF A
FINE AMOUNTING
PENAL
REPORT TO P100,000.00 PROVISIONS

2ND VIOLATION – 3RD VIOLATION –

PAYMENT OF A CANCELLATION
FINE AMOUNTING OF REGISTRATION
TO P500,000.00
WITHHOLDING
TAXES
WITHHOLDING
TAXES ON
COMPENSATION
 Restructures the personal income tax
schedule, with separate schedules for
compensation income earners (CIEs),

HIGHLIGHTS OF
REPUBLIC ACT Exempts from the tax the first
PhP250,000 annual taxable income of
NO. 10963 ON taxpayers
COMPENSATION
Retains the non-taxability of mandatory
contributions such as those made to the
Government Service Insurance System,
Social Security System, PhilHealth, Pag-IBIG
Fund and union dues
 Retains the exemption from the tax of de
minimis benefits

HIGHLIGHTS OF
REPUBLIC ACT Increases the amount of tax-exempt benefits ceiling of
NO. 10963 ON 13th month pay and other benefits from PhP82,000
COMPENSATION to PhP90,000; deletes the previous provision for the
ceiling to be adjusted every three (3) years to its
present value using the CPI as published by the
Philippine Statistics Authority (PSA)
WITHHOLDING ON COMPENSATION

Means all remuneration for

services performed by an
employee for his employer
Compensation defined under an employee-employer
relationship unless exempted
by the NIRC and other
pertinent laws.
 • Gross compensation income–all
remuneration for services performed by an
employee for his employer under an
WHAT TO employer-employee relationship
CONSIDER IN • Non-taxable gross compensation
COMPUTING income items:
W-TAX ON
COMPENSATION • Exclusions from gross income
Section32(B)NIRC
• Payroll period
• Withholding tax table per payroll period
 • All remuneration for services
performed by an employee for his
GROSS employer, including the cash value
COMPENSATION
INCOME of all remuneration paid in any
medium other than cash.
[Section78(A), Tax Code]
 • Remuneration received as an incident of
employment (RA 7641, those with approved private
retirement plan, Social Security Act of 1954, as
amended, GSIS Act of 1937, as amended, etc.
EXEMPTIONS
FROM • Remuneration paid to agricultural labor
WITHHOLDING • Remuneration paid to domestic services
TAX ON • Remuneration paid to casual labor not in the
COMPENSATION course of an employer's trade or business
• Compensation for services by a citizen or resident
of the Philippines for a foreign government or
International organization.
EXEMPTIONS FROM WITHHOLDING TAX ON
COMPENSATION
• Damages (actual, moral, exemplary and nominal)
• Life insurance
• Amounts received by the insured as return of premium
• Compensation for injuries or sickness
• Income exempt under treaty
• 13th month pay and other benefits
• GSIS, SSS, Philhealth and other contributions (employee’s share only)
EXEMPTIONS FROM WITHHOLDING TAX ON
COMPENSATION

Compensation income of minimum

wage earners (MWEs) who works
Compensation income in the public
with the private sector and being paid
sector with compensation income of
the Statutory Minimum Wage (SMW)
not more than SMW in the non
as fixed by the Regional Tripartite
agricultural sector as fixed by the
Wage and Productivity Board
RTWPB/NWPC, applicable to the
(RTWPB)?National Wages Productivity
place he/she is assigned.
Commission (NWPC), applicable to
the place he/she is assigned;
REQUIREMENTS OF WITHHOLDING

• Every employer must withhold from compensation paid an amount

computed in accordance with regulations.
• No withholding of tax shall be required on SMW of MWEs in the
private/public sector including
• Holiday pay
• Overtime pay
• Night shift differential
• Hazard pay
13 TH MONTH
• Gross benefits received by officials and
PAY & OTHER
employees of public and private
BENEFITS
entities: provided, however, That the
SECTION
total exclusion shall not exceed Ninety
32(B)(7)(E) OF
Thousand Pesos.
TRAIN
 • Sec. 2.78.1 (A) (3)

WITHHOLDING • xxxxxxxxx

ON DE MINIMIS • All other benefits given by employers which

BENEFITS (RR 5- are not included in the enumeration shall not
be considered as "de minimis" benefits, and
2011) hence, shall be subject to income tax as well
as withholding tax on compensation income.
 • Monetized unused vacation leave credits of private
employees not exceeding 10 days during the year;
• Monetized value of vacation and sick leave credits paid
to government officials and employees;
• Medical cash allowance to dependents of employees
not exceeding P750.00 per employee per semester or
DE MINIMIS
P125.00/month;
BENEFITS
• Rice subsidy -P1,500.00 or one sack of 50 kg.
(RR 5-2011) rice/month amounting to not more than P1,500.00;
• Uniform & clothing allowance -Not exceeding
P4,000.00 per annum ;
 • Laundry allowance not exceeding P300.00/month
• Actual medical assistance, e.g. medical allowance
to cover medical and healthcare needs, annual medical
executive check-up, maternity assistance and outing
consultations, not exceeding P10,000p.a.
• Employee Achievement awards –for length of
DE MINIMIS
service or safety achievement which must be in the
BENEFITS form of a personal tangible property other cash or
(RR 5-2011) gift certificate with an annual monetary value not
exceeding P10,000.00 received by the employee
under an established written plan which does not
indiscriminate in favor of highly paid employees;
 • Section 2. Section 2.78.1 (A) (3) of RR 2-98, as last amended
by RR 8-2012, is hereby further amended to read as follows:
• Sec 2.78.1 Withholding Tax on Compensation Income
(A). . .
(3) Facilities and privileges or relatively small value
-xxx xxx xxx
DE MINIMIS (k) Benefits received by an employee by virtue of a collective
BENEFITS bargaining agreement (CBA) and productivity incentive schemes
provided that the total annual monetary value received from
(RR 1-2015) both CBA and productivity incentive schemes combined do not
exceed ten thousand pesos (Php 10,000.00) per employee per
taxable year;
• xxx xxx xxx”
 Step 1. Determine the total amount of monetary and non-monetary
compensation paid to an employee for the payroll period: monthly,
semimonthly, weekly or daily, as the case may be, segregating non-
taxable benefits and mandatory contributions.

STEPS IN THE Step 2. Use the appropriate table below for the applicable payroll
period.
USE OF THE
WITHHOLDING
TAX TABLE Step 3. Determine the compensation range of the employee and
apply the applicable tax rates prescribed thereon.

Step 4. Compute the withholding tax due by adding the tax

predetermined in the compensation range indicated on the column
used and the tax on the excess of the total compensation over the
minimum of the compensation range.
ANNUALIZED WITHHOLDING TAX
MANDATORY YEAR END ADJUSTMENT
YEAR END ADJUSTMENT

On or before the end of the calendar year and prior to the payment of the
compensation for LAST PAYROLL PERIOD, the employer shall determine
the sum of the taxable regular and supplementary compensation paid to
each employee for the whole year and must ensure that the
TAX DUE = TAX WITHHELD
 Section 79(H), Tax Code,
Section 2.79(B)(5)(b), RR 2-98,
as amended by RR 10-2008

ANNUALIZED STEP 1-Determine the taxable

WITHHOLDING regular and Supplementary
TAX compensation paid to the employee
for the ENTIRE CALENDAR YEAR;
(YEAR-END-
ADJUSTMENT)
STEP 2-If the employee has previous
employment/s within the year, ADD the
amount of taxable regular and
supplementary compensation paid to the
employee by the previous employer ;
 STEP 3 -Deduct the amount of premium payments on Health
and or Hospitalization Insurance of employees who have
presented evidence that they paid the same during the taxable
year.

ANNUALIZED
WITHHOLDING
TAX
(YEAR-END- NOTE:The deductible amount shall not exceed P
ADJUSTMENT) 2,400/annum or P 200/month whichever is lower and the
total family gross income does not exceed P 250,000 for
the calendar year.The employee is required to furnish
employer with copies of policy contract and proof of
payments before the employer does the year-end
adjustment.
 Compute Determine

Compute the amount Determine the

ANNUALIZED of tax on the deficiency or excess,
WITHHOLDING difference arrived at if any, of the tax
in Step 3. computed in Step 4
TAX over the cumulative
(YEAR-END- tax already deducted
ADJUSTMENT) and withheld since
the beginning of the
current calendar year.
YEAR-END ADJUSTMENT -FORMULA

GROSS COMPENSATION INCOME (previous + present employer) Px x x x

LESS: Non-Taxable/Exempt compensation Income
a. 13th month pay, and other benefits 90,000
b. Other non taxable benefits xx
c. SSS, GSIS, Philhealth, HDMF and
union dues (ES share only) ___xx xxxxxx
TAXABLE COMPENSATION INCOME xxxx
YEAR-END ADJUSTMENT -FORMULA
TAXABLE COMPENSATION INCOME
TAX DUE (graduated rate)
TAX WITHHELD (Jan – Nov/termination date
• COLLECTIBLE Tax due > tax withheld
• REFUNDABLE Tax due < tax withheld
• BREAK EVEN Tax due = tax withheld
Px x x x
xxxx
xxxx
Collect before payment of last salary
Refund before Jan 25 ff yr/payment last salary
No more withholding for December salary
 When to
What to use submit
1604CF +
alphalists
on or before ANNUAL
Jan 31 ff year
INFORMATION
RETURN
Where to submit
RDO/LTDO/LTAD Retention 3
• Email: years in a
esubmission secondary
@bir.gov.ph
storage
EMPLOYER’S CERTIFICATE OF COMPENSATION
PAYMENT/TAX WITHHELD (FOR COMPENSATION PAYMENT WITH OR
WITHOUT TAX WITHHELD)
• What to Issue BIR Form No. 2316
• Who to Issue Employer
• When to Issue - on or before Jan 31 of the succeeding CY
- on the day od last payment of compensation, if terminated
• Number of copies three (3) copies
• Signed by both employer and employee (under the penalty of perjury)
Note: An extra copy shall be furnished by the employee certified by him to his NEW
employer in case of transfer of employment within the taxable year.
 CERTIFIED LIST
BIR FORM OF Employees
2316 QUALIFIED
for On or
DUPLICATE SUBSTITUTED Before
COPY - FILING OF February
EMPLOYEE ANNUAL 28
INCOME TAX
RETURN
 EMPLOYER TO SUBMIT LIST
OF EMPLOYEE QUALIFIED
FOR SUBSTITUTED
FILING(DULY NOTARIZED)
A

“F”

On or Before February 28
 EMPLOYEES WITH EMPLOYEES WITH TAX DUE NOT
NOT
MULTIPLE MIXED
EMPLOYERS FOR THE EQUAL TO TAX
INCOME(EMPLOYE WITHHELD.
YEAR.
E & BUSINESS).
QUALIFIED
UNDER
SUBTITUTED
FILIND AND
MUST FILE BIR
EMPLOYEE
WHOSE
EMPLOYEE
WHOSE
EMPLOYEE AND
SPOUSE WHERE TAX
DUE IS NOT EQUAL
FORM NO. 1700
SPOUSE IS SPOUSE IS IN TO TAX WITHHELD
ENGAGED IN PRACTICE OF BY THEIR
RESPECTIVE
BUSINESS. PROFESSION. EMPLOYEES.
REFUND BY
EMPLOYERS
TO
EMPLOYEES
ON EXCESS
WTAX
DUE JANUARY 20 EXCESS TAX WITHHELD ON
COMPENSATION BY
EMPLOYEES WHETHER
PRIVATE OR GOVERNMENT
AS A RESULT OF YEAR END
ADJUSTMENT.
 EXPANDED
WITHHOLDING TAX
EXPANDED WITHHOLDING TAX

Rentals – Real
Prof Fees rendered by Professional fees, talent Property/Personal >
individuals (RR 11-18) fees (juridical, RR 11-18) 10,000 (RR 14-02)
5%/10% 10%/15%
5%

TAMP/TWAs (RR 11-14/RR

Contractors 11-18)
• Local supplier of goods
(RR 30-03) 1%
2% • Local supplier of services
2%
 PROFESSIONAL
INCOME PAYMENTS
SUBJECT TO FEES
CREDITABLE
WITHHOLDING TAX
( TO A CITIZEN OR
INDIVIDUAL not to EXCEED 5%
RESIDENT ALIEN) 3M
more than 3M 10%
NON INDIVIDUAL not to EXCEED 10%
720K
more than 720K 15%
 Not later than JANUARY 15 of
must submit to all the Payors each year or at least before
of the PF/Commission/TF payment.

Sworn declaration of his/her gross

receipts/sales(Annex B-1)together
with a copy of Certificate of
Registration).

INDIVIDUAL’S GROSS INCOME DOES

NOT EXCEED 3M-5%
10% SHALL BE APPLIED IN FOLLOWING CASES:

The PAYEE FAILED to provide the income payor withholding agent of such declaration or

The income payment EXCEEDS ₱3M despite receiving a sworn declaration for the
income payee.

In the case of individual payees with ONLY ONE PAYOR “Annex B-2” sworn declaration
shall be accomplished and submitted together with a copy of COR to the lone income
payor.
 A
N
N
E
X
“B-1”
 A
N
N
E
X
“B-2”
INCOME PAYORS WITHHOLDING AGENTS SHALL SUBSEQUENTLY
EXECUTE A SWORN DECLARATION (ANNEX C)

Payee’s sworn
declaration (Annex
B1, B2,B3).
Together with the LIST
OF PAYEES and
NUMBER OF PAYEES
who have:
With the accompanying
copies of the COR.
SUBMIT original copy to BIR
RDO where registered on or
before January 31 of each year or
15 days following the month
when a NEW income recipient
has submitted payee’s Sworn
Declaration.
 A
N
N
E
X
“C”
CONTRACTORS

1. General Engineering Contractors

2. General Building Contractors
3. Specialty Contractors
4. Other Contractors –
f. printers, bookbinders,
lithographers. Publishers
g. messengerial, janitorial,
detective, security
h. advertising, credit, collection,
other b. agencies
 (M) Income payment made by the top
twenty thousand (20,000) private
corporations to their local/resident
supplier of goods and local/resident
TAMP (RR 11-14) supplier of services.

(W) Income payments made by the top

five thousand (5,000) individual
taxpayers to their local/resident
suppliers of goods and local/resident
suppliers of services
 List of TWAs

TOP
WITHHOLDING Regular suppliers – 6 times
AGENTS regardless of amount

Single purchase of more

than Php 10K
 Expanded Withholding Tax
Manual Filing/eBIRForm EFPS Attachments
BIR 10th day ff month of 11th – EFPS Group E
FORM withholding (first 2 months 12th – EFPS Group D
0619E of the quarter) 13th - EFPS Group C
15th – EFPS Group B

BIR Not later than the last day following the close of the quarter Quarterly
FORM during which withholding was made Alphalist of
1601EQ Payees (QAP)
email
 Returns and Payment of Taxes Withheld
BIR at Source
DESCRIPTION
FORM
1601EQ Creditable Withholding Tax Not later than the last
1602Q Final Tax on Interest on Bank Deposits day of the month
following the close of the
1603Q Final Tax on Fringe Benefits
quarter during which the
1601FQ All Other Final Taxes withholding was made.
Quarterly Alphabetical List of Payees
• Name of Income Payee
• TIN
• Amount of Income Paid segregated per month with total for the month
• All income payments prescribed as subject to withholding tax whether actually
subjected or not subjected (due to exemption)
ZERO REMITTANCE

• Withholding agents with

zero remittance are still
required to file BIR Form
Nos. 1601-C, 0619E and
0619F for the month.
DISTRIBUTION
OF UPON REQUEST OF THE
ON OR BEFORE THE
CERTIFICATES 20TH DAY OF THE
PAYEE, HOWEVER,THE
PAYOR MUST FURNISH
BIR FORM 2307 MONTH FOLLOWING
THE CLOSE OF THE
SUCH STATEMENT TO
THE PAYEE
TQ. SIMULTANEOUSLY WITH
THE INCOME PAYMENT.
ANNUAL INFORMATION RETURN

• BIR Form 1604 E to be filed together with attachments on or

before March 1 of the following year
 OTHER TAX
COMPLIANCE
REMINDERS
OTHER BIR COMPLIANCE REMINDERS

• Posting requirements
• Filing and payment
• ARF
• ITR
• VAT/Percentage
 Certificate of
Registration (COR)
RR 7-2012, Sec 7
ROAD TO OPEN
CASES
ONCE YOU START FILING A CERTAIN TAX TYPE,
INTENTIONAL OR UNINTENTIONAL,YOU WOULD NEED TO
REGULARLY FILE THIS WITH OR WITHOUT TRANSACTION.
THIS WILL BE CAPTURED BY THE BIR SYSTEM AND YOUR
TAX TYPE WILL BE AUTOMATICALLY UPDATED..

• LESSON: BE CAREFUL IN FILING RETURNS.

ELSE SUFFER THE PENALTIES.
“Ask for Receipt” Poster
RR 7-2012, Sec 7
 Keeping of Books
Section 232, TRAIN
All corporations, companies, partnerships or
persons required by law to pay internal revenue
taxes shall keep and use relevant and appropriate
set of bookkeeping records duly authorized by the
Secretary of Finance.

those whose gross annual sales, earnings,

receipts or outputs exceed Php 3M shall have their
books of accounts audited and examined yearly by
independent CPAs. . .
Filing of Returns
Era Gone By
WAYS TO FILE
RETURNS
▪ eFile and ePay through
eFPS
▪ eFile eBIRForms and
ePay
▪ eFile eBIRForms and
Manual Pay
▪ Manual File eBIRForms;
Manual Pay
Income Tax
 BIR FORM FREQUENCY DUE DATE EFPS
ATTACHMENT

1702 RT
EX ANNUAL April 15 ff Audited FS
MX year calendar SMR
INCOME 15th day of the SAWT
TAX 4th month ff
EQQ(Fiscal)

1702Q QUARTERLY 60 days ff the SAWT

close of each
quarters
 Income Tax
Mode of Filing Where to File & Pay Required Attachments
Where to Submit When to Submit
With payment Electronically file using Within 15 days from
eBIRForm Package eBIRForm Package and the deadline of filing or
pay to any: date of efiling
• AAB whichever comes later
• RCO AAB
RDO

Without payment Electronically file using RDO Within 15 days from

eBIRForm Package the deadline of filing or
date of efiling
whichever comes later
 Generally in three (3) copies. For
cooperatives & juridical persons, there shall be
stamped “RECEIVED” in at least two extra
copies of the AFS for filing with the SEC/CDA
INCOME TAX
RECEIVING &
STAMPING
The attached AFS to the ITR shall be stamped
received on:
Statement of Statement of Statement of
Audit
Financial Income and/or Management
Certificate
Position its equivalent Responsibility
OTHER REPORTS

Monthly eSales
Motels and
Report of all TPs
Inventory Lists Similar
using
Establishments
CRM/POS/CAS

Hospitals and
Lessors
Clinics/HMOs
INVENTORY LISTS
(ASSET RICH TPS)

INVENTORY LIST DUE JANUARY 30-

FG, WIP, RM, STOCKS IN TRADE HARD COPY AND
SOFT COPY + SWORN
MONTHLY ESALES REPORT OF ALL TPS USING
CRM/POS/CAS
TIN ending
Even number 8 th ff month
Odd number 10 th ff month
 SWORN DECLARATION
MOTELS AND of Motels and other similar
establishments Tax Year
SIMILAR ending December 31.
ESTABLISHMENTS

Due January 31
SENIOR CITIZEN
SWORN STATEMENT by senior citizen
whose taxable income for the previous
year does not exceed the poverty level
as determined by the NEDA thru the
NCSB with Tax Year-December 31.

*Due January 31
HOSPITALS AND CLINICS/HMOS

QUARTERLY LIST OF *DUE 15TH AFTER EOQ

MEDICAL PRACTITIONERS
LESSORS
Building Space layout of
Tenants profile including the entire area being
the following document as leased with proper
of December 31. unit/space address or
reference.

Lessee info statement

Certified true copy of • -1st sem July 31
contract of lease per • -2nd sem January 31
tenant following year
 01 02
TOP TAXPAYERS List of regular suppliers of
Top 20,000 Private goods and Services.
Corporation,Top 5,000 • *1st sem – July 31
individuals • * 2nd sem – January 31 following
year

LARGE TAXPAYERS
 MANUAL/e EFPS ATTACHMENT
BIR FORM

2550M 20th day of ff 20th day ff month Applicable

month 21st EFPS GROUP E statements
22nd EFPS GROUP D
23rd EFPS GROUP C
VALUE 24th EFPS GROUP B
ADDED 25th EFPS GROUP A
TAX

2550Q 25th day of SLS

following the SLP
close each SLI
calendar (email &
QUARTER submission of
nonEFPS-25
EFPS-30)
 PERCENTAGE TAX

BIR FORM DEADLINE NOTE:

2551Q 25TH day after EO Availed 8% option
end of each TQ to file QITR (not
required to file
2551Q)
TAX INVESTIGATION
OF COOPS
 RA 10963 TRAIN LAW
Power of the Commissioner to make
assessments notwithstanding any law
requiring prior authorization of any
government agency or instrumentality
 ASSESSMENT CYCLE

TP BIR BIR BIR

FILES ISSUES DOES ISSUES
ITR LA AUDIT NIC

Period pres- 3 years from 120 days +

cribed by law filing of return 120 days

BIR TP BIR
TP FILES
PROTEST ISSUES FILES ISSUES
FAN/DL REPLY PAN

30 days from 15 days from

date of receipt date of receipt

TP FILES BIR TP CTA

SUPPL DENIES FILES RENDERS
PROTEST PROTEST APPEAL DECISION

60 days from 180 days from 30 days from receipt of

filing of protest filing of protest denial of or inaction on
protest
 Deleted the provision on the Notice of Informal
Conference, replacing Sec3.1.1 of RR12-99 as follows
• Section3.1.1Preliminary Notice of Assessment

RR 18-2013, NOV (PAN)

• If after review and evaluation by the Commissioner
28, 2013 or his duly authorized representative, as the case
maybe, it is determined that there exists sufficient
basis to assess the taxpayer for any deficiency tax,
the said office shall issue a PAN for the proposed
assessment, showing the facts and the law on
which the proposed assessment is based
RR 7-2018

• Section3 of RR12-99, as amended by RR No.13-18, is hereby

amended by adding Section 3.1.1providing for the preparation of a
Notice of Informal Conference
RR 7-2018

• The Revenue Officer (RO) who audited the taxpayer’s records shall,
among others, state in his report whether or not the taxpayer agrees with
his findings that the taxpayer is liable for deficiency tax or taxes. If the
taxpayer is not amenable, based on the said Officer’s submitted report of
investigation, the taxpayer shall be informed, in writing, by the Revenue
District Office (RDOof the discrepancy or discrepancies in the taxpayer’s
payment of his internal revenue taxes, for the purpose of “Informal
Conference”
RR 7-2018

• The Informal Conference shall, in no case, extend beyond thirty (30) days
from receipt of the notice for informal conference. If it is found that the
taxpayer is still liable for deficiency tax or taxes after presenting his side,
and the taxpayer is not amenable, the RDO or the Chief, SID of the
Revenue Regional Office, or the Chief of Division in the National Office,
as the case may be, shall endorse the case within seven (7) days from the
conclusion of the Informal Conference to the Assessment Division of the
Revenue Regional Office or to the Commissioner or his duly authorized
representative for issuance of a deficiency tax assessment
 • If the taxpayer fails to respond within 15 days
from date of receipt of the PAN, he shall be
RR 18-2013, considered in default, in which case, a Formal
Letter of Demand and Final Assessment Notice
NOV 28, 2013
(FLD/FAN) shall be issued calling for payment
of the taxpayer’s deficiency tax liability, inclusive
of the applicable penalties.
• If the taxpayer, within 15 days from date of
receipt of PAN, responds that he/it disagrees
with the findings of deficiency tax or taxes, an
FLD/FAN shall be issued within 15 days from
filing/submission of the taxpayer’s response,
calling for payment of the taxpayer’s deficiency
tax liability, inclusive of the applicable penalties.
RR 18-2013, Nov 28, 2013

Sec 3.1.4. Disputed Assessment.– The taxpayer or his auth agent or tax agent
may protest administratively against the FLD/FAN within 30 days from date of
receipt thereof. The taxpayer may file a written request for reconsideration or
reinvestigation.
• Request for reconsideration – refers to a plea of re-evaluation of an assessment
on the basis of existing records without need of additional evidence. It may involve
both question of fact or of law, or both.
• Request for reinvestigation – refers to a plea of re-evaluation of an assessment
on the basis of newly discovered or additional evidence that a taxpayer intends to
present in the reinvestigation. It may involve both question of fact or of law, or both.
RR 18-2013, Nov 28, 2013
• The taxpayer shall state in his protest (i) the nature of protest – whether reconsideration or
reinvestigation; (ii) date of assessment notice; and (iii) the applicable law, rules and regulations, or
jurisprudence on which his protest is based; otherwise, his protest shall be considered void and
without force and effect.
• If there are several issues in the FLD/FAN but the taxpayer disputes only some of the issues, the
assessment attributable to undisputed issues shall become final, executory and demandable, and
the taxpayer shall be required to pay the deficiency taxes attributable thereto, and a collection
letter shall be issued calling for the payment thereof plus penalties.
 Prior to the issuance of the PAN, the taxpayer
maybe allowed to make voluntary payments of
probable deficiency taxes and penalties

ASSESSMENT
PROCESS
RMC11-2014 An FLD/FAN issued reiterating the immediate
payment of deficiency taxes and penalties previously
made in the PAN is a denial of the response to the
PAN. A final demand letter for payment of
delinquent taxes may be considered a decision on a
disputed assessment (Commissioner of Internal
Revenue vs. Isabela Cultural Corporation; G.R.
No.135210; July11,2001). This includes a disputed
PAN.
 • Prior to the issuance of the PAN,
ASSESSMENT
the Taxpayer is allowed to make
PROCESS
voluntary payments of probable
RMC11-2014
deficiency taxes and penalties.
ASSESSMENT PROCESS
RMC11-2014

So long as the parties are given the opportunity to explain their

side, the requirements of due process are satisfactorily complied
with.

An FDL/FAN issued beyond fifteen (15) days from

filing/submission of the taxpayer’s response to the PAN shall be
valid, provided that, it is issued within the period of limitation to
assess internal revenue taxes
 • The non-observance of the fifteen(15)-
day period, however, shall constitute an
ASSESSMENT administrative infraction and the
PROCESS revenue officers who caused the delay
RMC11-2014 shall be subject to administrative
sanctions as provided for by law and
pertinent revenue issuances.
 • RR 12-99, as amended by RR18-2013,
provides that for requests for reinvestigation,
ASSESSMENT the taxpayer shall submit all relevant
PROCESS supporting documents in support of his
RMC11-2014 protest within sixty (60) days from date of
filing of his letter of protest, otherwise, the
assessment shall become final.”
 • The term “the assessment shall become
final” means that the failure of the
ASSESSMENT taxpayer who requested for a
PROCESS reinvestigation to submit all relevant

RMC11-2014 supporting documents within the sixty

(60)-day period shall render the FLD/FAN
“final” by operation of law.
ASSESSMENT • The notice (PAN/FLD/FAN/FDDA)
PROCESS shall first be served to the taxpayer’s
RMC11-2014
registered address before the same
may be served to the taxpayer’s known
address, or in the alternative, maybe
served to the taxpayer’s registered
address and known address
simultaneously.
UPDATES

• Enhanced BIR Registration

Forms RMC 27-2019
• Keeping, maintenance and
registration of books of
accounts (RMC 29-2019)
 1901 – Application for Registration for Self Employed, Mixed
Income Individuals, etc

1902 – Application for Registration for Individuals Earning

Purely compensation Income

ENHANCED BIR 1903 – Application for Registration of Corporation, Partnerships

Including Government Agencies and Instrumentalities, LGUs,
REGISTRATION Cooperatives and Associations

FORMS 1904 – Application for Registration for ONETT & Person Registering
Under EO 98
RMC 27-2019
DATED FEB 26, 1905 – Application for Registration Information
Update/Correction/Cancellation
2019
1906 – Application for Authority to Print Receipts and
Invoices
KEEPING,
MAINTAINING • Sec 232 of the NIRC as amended by RA 10963
AND (TRAIN Law) in relation to RA 11032 (Ease of
REGISTRATION Doing Business and Efficient Government Service
OF BOOKS OF Delivery Act of 2018

ACCOUNTS • Keeping and maintaining of books of accounts

• Registration deadline of books of accounts
(RMC 29-2019, FEB
22, 2019)
 • Books of accounts are relevant and
appropriate of bookkeeping records duly
KEEPING, authorized by the Secretary of Finance
MAINTAINING wherein all transactions and results of
AND operations are shown and from which all
REGISTRATION taxes due the Government may readily and
OF BOOKS OF accurately be ascertained and determined at
ACCOUNTS (RMC any time of the year.
29-2019, FEB 22, • Manual books of accounts
2019) • Loose leaf books of accounts (with permit to use)
• Computerized books of accounts (with permit to use)
 MAINTENANCE

• Books of accounts shall be kept at all times in

KEEPING, the place of business of the taxpayer. Such
MAINTAINING books and registers, together with records,
AND vouchers, and other supporting papers and
REGISTRATION documents prescribed by the Bureau of
OF BOOKS OF Internal Revenue (BIR), kept by taxpayers shall
ACCOUNTS (RMC be preserved intact, unaltered and
29-2019, FEB 22, unmutilated. Keeping of two or more sets of
2019) records or books of accounts is prohibited.
All entries in the Manual Books of
Accounts shall be handwritten.
Printouts of the accounting
records pasted/glued/inserted
onto pages/sheets of the
registered Manual Bound Books
of’ Accounts are prohibited and
subject to penalty pursuant to
existing revenue issuances.
 manual books of accounts shall be registered
before the deadline for filing of the first quarterly
income tax return or the annual income tax
return whichever conies earlier.

REGISTRATION Loose leaf books of accounts/invoices/receipts and other

accounting records shall be permanently bound and
OF BOOKS OF presented for registration together with a sworn statement
attesting to the correctness of the entries made, and the
ACCOUNTS number of all invoices, receipts. books of accounts used for
the period covered to the RDO where the Head Office or
Branch is duly registered on oi before "15 days after the end
of each taxable year" or "within 15 days from the closure of
business operations" whichever comes earlier unless
extended by the Commissioner or his duly authorized
representative, upon request of the taxpayer before the lapse
of said period.
 • Computerized Books of Accounts and other accounting
REGISTRATION records in electronic format shall be submitted and
OF BOOKS OF registered to the RDO where the Head Office or
ACCOUNTS Branch is duly registered within thirty (30) days from
the close of each taxable year or "within 30 days from
the closure of business operations" whichever comes
earlier, unless extended by the Commissioner or his
duly authorized representative, upon request of the
taxpayers before the lapse of said period.
EXAMINATION OF
BOOKS OF ACCOUNTS

• Corporations, companies,
partnerships or persons whose
gross annual sales, earning,
receipts or output exceed Three
million pesos (Php3,000,000),
shall have their books of
accounts audited and examined
yearly by independent Certified
Public Accountants.
RETENTION PERIOD
All taxpayers are required to preserve their
books of accounts, including subsidiary books
and other accounting records, far a period of
ten (10) years reckoned from the day
following the deadline in filing a return, or if
filed after the deadline, from the date of the
filing of the return, for the taxable year when
the last entry was made in the books of
accounts:
Provided that. within the first five (5) years
reckoned from above dates the taxpayer shall
retain hardcopies of the books of accounts,
including subsidiary books and other
accounting records. Thereafter, the taxpayer
may retain only an electronic copy of the
hardcopy (paper) of the books of accounts,
subsidiary hooks and other accounting
records in an electronic storage system which
is compliant with the requirements set forth
under Section 2-A, of RR No. 5-2014.
REFERENCES
DR. ESTELITA C. AGUIRRE COOPERATIVE EXEMPTION AND TAXABILITY, FEB. 27, 2015
JAKO

CONTACT NOS. 0917- EMAIL AD:

796-4583/0928-554-7015 JAKOCONSULTING@GMA
IL.COM