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Application for vat zero rating bir - application for vat zero rating bir. New VAT zero-rating rules and requirements under CREATE
Those are general procedures and BIR could further enhance and apply such other necessary procedures to determine validity of the claim and proper substantiation. Upon denial or inaction of the BIR on the VAT refund or tax credit application BIR, the taxpayer may file an appeal with the Court of Tax Appeals within thirty 30 days from receipt of the resolution on denial or from the lapse of the days after submission of complete documentary requirements.
The following events with the CTA are relevant:. Process with the CTA may take for quite some time depending on the workload of the court, complexity of the case, and other related matters. Some would count for months from filing, or even years. In application for VAT refund, the taxpayer is in effect getting back the money it paid on VAT passed on by the suppliers.
Simply stated, taxpayer is getting back his money. However, to get it back, the following costs and expenses will have to be incurred:. In some cases, the applicant would have to pay more amounts for the deficiency taxes on tax assessment related to the application than the amount applied for refund. Accordingly, it is suggested that you make cost-benefit considerations in applying for Vat refunds or tax credit in the Philippines. The concept of VAT refund or tax credit in the Philippines could be easy to learn but the technicalities of actually filing could be frightening.
One false move could be an end to it so you may consider securing professional assistance of professionals equipped with technical knowledge on VAT refunds, and experience in dealing with tax authorities.
Planning and careful evaluation before filing of the application to VAT refund are best recommended to generate better results and avoid the negative and costly implications on the application. Garry is a Certified Public Accountant CPA and a law degree holder in tax practice for about ten 10 years now helping out taxpayers on tax compliance, tax savings, tax assessments, tax refunds, and other related professional tax services.
He is presently a frequent speaker of Tax and Accounting Center, Inc. Disclaimer : This article is for general conceptual guidance only and is not a substitute for an expert opinion. Mobile : Smart: Globe: Email : info taxacctgcenter.
Toggle navigation. Ilssa Ma. Tara T. This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. For questions and inquiries, feel free to send a message through social media or ph-fmmarkets kpmg. KPMG Personalization. Get the latest KPMG thought leadership directly to your individual personalized dashboard. December 1, November 20, October 9, February 4, December 20, Amends further RR No. December 19, June 24, May 17, May 3, July 21, Amends RMO No.
August 14, April 3, October 11, March 21, September 10, September 5, August 31, Enjoins the strict implementation of the penalty provisions for non-submission of Quarterly Summary Lists of Sales and Purchases.
April 30, July 23, February 28, October 21, May 24, Prescribing the guidelines and procedures in the implementation of RR No. December 11, March 29, November 5, Amends certain provisions of RMC Nos. Amends RMC No. October 24, Amends Question and Answer to No. March 2, Publishes the full text of Joint Circular No. December 2, June 27, June 17, January 25, November 23, September 3, August 22, Circularizes the full text of Executive Order No.
November 8, July 20, Clarifies the coverage of RMO No. July 13, Clarifies Revenue Memorandum Circular No. September 16, December 3, April 18, September 14, August 7, June 13, June 30, May 30, May 22, April 6, February 1, January 20, December 22, December 8, November 3, Attachments to the quarterly VAT return to be filed starting October 25, October 20, October 3, July 1, Clarification regarding the withholding of creditable Value-Added Tax by government offices for purchases of P1, September 23, Settlement of the Value-Added Tax liabilities of pawnshops for taxable years to October 8, December 18, July 2, March 18, Codal Reference.
General VAT Queries. Who are liable to register as VAT taxpayers? Any person who, in the course of trade or business, sells, barters or exchanges goods or properties or engages in the sale or exchange of services shall be liable to register if:. His gross sales or receipts for the past twelve 12 months, other than those that are exempt under Section A to U , have exceeded Three Million Pesos P3,, There are reasonable grounds to believe that his gross sales or receipts for the next twelve 12 months, other than those that are exempt under Section A to U , will exceed Three Million Pesos P3,, When is a new VAT taxpayer required to apply for registration and pay the registration fee?
Thereafter, taxpayers are required to pay the annual registration fee of five hundred pesos P What compliance activities should a VAT taxpayer, after registration as such, do promptly or periodically? The following compliance activities must be performed by a VAT-registered taxpayer:. Pay the annual registration fee of P The monthly VAT Declaration and the Quarterly VAT Return shall reflect the consolidated total for all the taxable lines of activity and all the establishments - head office and branches ;.
What is the liability of a taxpayer becoming liable to VAT and did not register as such? Any person who becomes liable to VAT and fails to register as such shall be liable to pay the output tax as if he is a VAT-registered person, but without the benefit of input tax credits for the period in which he was not properly registered. Who may opt to register as VAT and what will be his liability?
Any person who is VAT-exempt under Sec. Any person who is VAT-registered but enters into transactions which are exempt from VAT mixed transactions may opt that the VAT apply to his transactions which would have been exempt under Section of the Tax Code, as amended.
This option, once exercised, shall be irrevocable. Any person who elects to register under optional registration shall not be allowed to cancel his registration for the next three 3 years. The above-stated taxpayers may apply for VAT registration not later than ten 10 days before the beginning of the calendar quarter and shall pay the registration fee unless they have already paid at the beginning of the year. In any case, the Commissioner of Internal Revenue may, for administrative reason deny any application for registration.
Once registered as a VAT person, the taxpayer shall be liable to output tax and be entitled to input tax credit beginning on the first day of the month following registration. If he makes a written application and can demonstrate to the commissioner's satisfaction that his gross sales or receipts for the following twelve 12 months, other than those that are exempt under Section A to U , will not exceed Three Million Pesos P3,, If he has ceased to carry on his trade or business, and does not expect to recommence any trade or business within the next twelve 12 months.
When will the cancellation for registration be effective? The cancellation for registration will be effective from the first day of the following month the cancellation was approved. A VAT registered person shall issue :. A VAT invoice for every sale, barter or exchange of goods or properties; and. A VAT official receipt for every lease of goods or properties and for every sale, barter or exchange of services.
The amount of the tax shall be shown as a separate item in the invoice or receipt. Name of Seller. Description of the goods or properties or nature of the service. Purchase price plus the VAT, provided that. Authority to Print Receipt Number at the lower left corner of the invoice or receipt. The purchaser shall be entitled to claim an input tax credit on his purchase.
What is "output tax"? Output tax means the VAT due on the sale, lease or exchange of taxable goods or properties or services by any person registered or required to register under Section of the Tax Code. What is "input tax"? Input tax means the VAT due on or paid by a VAT-registered on importation of goods or local purchase of goods, properties or services, including lease or use of property in the course of his trade or business.
It shall also include the transitional input tax determined in accordance with Section of the Tax Code, presumptive input tax and deferred input tax from previous period. Does amortization of input VAT still allowable?
Yes , but is only allowed until December 31, after which taxpayers with unutilized input VAT on capital goods purchased or imported shall be allowed to apply the same as scheduled until fully utilized: Provided, That in the case of purchase of services, lease or use of properties, the input tax shall be creditable to the purchaser, lessee or licensee upon payment of the compensation, rental, royalty or fee.
What will be the basis of the date of cancellation? It is the date of issuance of tax clearance by the BIR, after full settlement of all tax liabilities relative to cessation of business or change of status of concerned taxpayer. What comprises "goods or properties"? The term "goods or properties" shall mean all tangible and intangible objects, which are capable of pecuniary estimation and shall include, among others:.
Real properties held primarily for sale to customers or held for lease in the ordinary course of trade or business;. The right or the privilege to use patent, copyright, design or model, plan, secret formula or process, goodwill, trademark, trade brand or other like property or right;. The right or privilege to use in the Philippines of any industrial, commercial or scientific equipment;. The right or the privilege to use motion picture films, films, tapes and discs; and. Radio, television, satellite transmission and cable television time.
What comprises "sale or exchange of services"? The term "sale or exchange of services" means the performance of all kinds of services in the Philippines for others for a fee, remuneration or consideration, whether in kind or in cash, including those performed or rendered by the following:.
Stock, real estate, commercial, customs and immigration brokers;. Persons engaged in milling, processing, manufacturing or repacking goods for others;. Proprietors, operators or keepers of hotels, motels, rest houses, pension houses, inns, resorts, theatres, and movie houses;.
Proprietors or operators of restaurants, refreshment parlors, cafes, and other eating places, including clubs and caterers;. Transportation contractors on their transport of goods or cargoes, including persons who transport goods or cargoes for hire and other domestic common carriers by land relative to their transport of goods or cargoes;.
Common carriers by air and sea relative to their transport of passengers, goods or cargoes from one place in the Philippines to another place in the Philippines;. Non-life insurance companies except their crop insurances , including surety, fidelity, indemnity and bonding companies; and. Similar services regardless of whether or not the performance thereof calls for the exercise of use of the physical or mental faculties.
The phrase "sale or exchange of services" shall likewise include:. The lease of use of or the right or privilege to use any copyright, patent, design or model, plan, secret formula or process, goodwill, trademark, trade brand or other like property or right;. The lease or the use of, or the right to use of any industrial, commercial or scientific equipment;. The supply of scientific, technical, industrial or commercial knowledge or information;. The supply of any assistance that is ancillary and subsidiary to and is furnished as a means of enabling the application or enjoyment of any such property, or right or any such knowledge or information;.
The supply of services by a nonresident person or his employee in connection with the use of property or rights belonging to, or the installation or operation of any brand, machinery or other apparatus purchased from such non-resident person;.
The supply of technical advice, assistance or services rendered in connection with technical management or administration of any scientific, industrial or commercial undertaking, venture, project or scheme;. The lease of motion picture films, films, tapes and discs; and. The lease or the use of or the right to use radio, television, satellite transmission and cable television time.
What is a zero-rated sale? It is a taxable transaction for VAT purposes, but shall not result in any output tax. However, the input tax on purchases of goods, properties or services, related to such zero-rated sales, shall be available as tax credit or refund in accordance with existing regulations.
What transactions are considered as zero-rated sales? Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas BSP ;. Services other than processing, manufacturing or repacking rendered to a person engaged in business conducted outside the Philippines or to a non-resident person engaged in business who is outside the Philippines when the services are performed, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas BSP ;.
Services rendered to persons engaged in international shipping or air transport operations, including leases of property for use thereof; Provided, that these services shall be exclusively for international shipping or air transport operations.
Transport of passengers and cargo by domestic air or sea carriers from the Philippines to a foreign country. Sale of power or fuel generated through renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal and steam, ocean energy, and other shipping sources using technologies such as fuel cells and hydrogen fuels; Provided, however that zero-rating shall apply strictly to the sale of power or fuel generated through renewable sources of energy, and shall not extend to the sale of services related to the maintenance or operation of plants generating said power.
The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported, paid in acceptable foreign currency or its equivalent in goods or services, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas BSP ;.
The sale of raw materials or packaging materials to a non-resident buyer for delivery to as a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods, paid for in acceptable foreign currency, and accounted for in accordance with the rules and regulations of the BSP;.
Transactions considered export sales under Executive Order No. Sale of goods or property to persons or entities who are tax-exempt under special laws or international agreements to which the Philippines is a signatory, such as, Asian Development Bank ADB , International Rice Research Institute IRRI , subject such sales to zero rate.
The sale of raw materials or packaging materials to a non-resident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods, paid for in acceptable foreign currency, and accounted for in accordance with the rules and regulations of the BSP;.
Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas BSP ; and.
What transactions are considered deemed sales? The following transactions are considered as deemed sales:. Transfer, use or consumption, not in the course of business, of goods or properties originally intended for sale or for use in the course of business.
Transfer of goods or properties not in the course of business can take place when VAT-registered person withdraws goods from his business for his personal use;. Shareholders or investors as share in the profits of the VAT-registered person; or. Consignment of goods if actual sale is not made within sixty 60 days following the date such goods were consigned.
Consigned goods returned by the consignee within the day period are not deemed sold;. Retirement from or cessation of business, with respect to all goods on hand, whether capital goods, stock-in-trade, supplies or materials as of the date of such retirement or cessation, whether or not the business is continued by the new owner or successor.
The following circumstances shall, among others, give rise to transactions "deemed sale";. Change of ownership of the business. There is a change in the ownership of the business when a single proprietorship incorporated; or the proprietor of a single proprietorship sells his entire business. Dissolution of a partnership and creation of a new partnership which takes over the business.
What is VAT-exempt sale? It is a sale of goods, properties or service and the use or lease of properties which is not subject to output tax and whereby the buyer is not allowed any tax credit or input tax related to such exempt sale. What are the VAT-exempt transactions? Sale or importation of agricultural and marine food products in their original state, livestock and poultry of a kind generally used as, or yielding or producing foods for human consumption; and breeding stock and genetic materials therefore;.
Sale or importation of fertilizers; seeds, seedlings and fingerlings; fish, prawn, livestock and poultry feeds, including ingredients, whether locally produced or imported, used in the manufacture of finished feeds except specialty feeds for race horses, fighting cocks, aquarium fish, zoo animals and other animals considered as pets ;. Importation of personal and household effects belonging to residents of the Philippines returning from abroad and non-resident citizens coming to resettle in the Philippines; Provided, that such goods are exempt from custom duties under the Tariff and Customs Code of the Philippines;.
Services subject to percentage tax under Title V of the Tax Code, as amended;. In all of the foregoing instances of exchange of property, prior Bureau of Internal Revenue confirmation or tax ruling shall not be required for purposes of availing the tax exemption.
If a taxpayer, after having complied with the terms and a conditions prescribed by the Commissioner, uses a particular method of valuing its inventory for any taxable year, then such method shall be used in all subsequent taxable years unless:. Income from Sources Within the Philippines. The remainder, if any, shall be treated in full as taxable income from sources within the Philippines. The remainder, if any, shall be treated in full as taxable income from sources without the Philippines.
Where items of gross income are separately allocated to sources within the Philippines, there shall be deducted for the purpose of computing the taxable income therefrom the expenses, losses and other deductions properly apportioned or allocated thereto and a ratable part of other expenses, losses or other deductions which cannot definitely be allocated to some items or classes of gross income.
The remainder, if any, shall be included in full as taxable income from sources within the Philippines. In the case of gross income derived from sources partly within and partly without the Philippines, the taxable income may first be computed by deducting the expenses, losses or other deductions apportioned or allocated thereto and a ratable part of any expense, loss or other deduction which cannot definitely be allocated to some items or classes of gross income; and the portion of such taxable income attributable to sources within the Philippines may be determined by processes or formulas of general apportionment prescribed by the Secretary of Finance.
Gains, profits and income from the sale of personal property produced in whole or in part by the taxpayer within and sold without the Philippines, or produced in whole or in part by the taxpayer without and sold within the Philippines, shall be treated as derived partly from sources within and partly from sources without the Philippines.
Gains, profits and income derived from the purchase of personal property within and its sale without the Philippines, or from the purchase of personal property without and its sale within the Philippines shall be treated as derived entirely form sources within the country in which sold: Provided, however, That gain from the sale of shares of stock in a domestic corporation shall be treated as derived entirely form sources within the Philippines regardless of where the said shares are sold.
The transfer by a nonresident alien or a foreign corporation to anyone of any share of stock issued by a domestic corporation shall not be effected or made in its book unless: 1 the transferor has filed with the Commissioner a bond conditioned upon the future payment by him of any income tax that may be due on the gains derived from such transfer, or 2 the Commissioner has certified that the taxes, if any, imposed in this Title and due on the gain realized from such sale or transfer have been paid.
It shall be the duty of the transferor and the corporation the shares of which are sold or transferred, to advise the transferee of this requirement. F Definitions.
General Rule. If the taxpayer's annual accounting period is other than a fiscal year, as defined in Section 22 Q , or if the taxpayer has no annual accounting period, or does not keep books, or if the taxpayer is an individual, the taxable income shall be computed on the basis of the calendar year.
Period in which Items of Gross Income Included. In the case of the death of a taxpayer, there shall be included in computing taxable income for the taxable period in which falls the date of his death, amounts accrued up to the date of his death if not otherwise properly includible in respect of such period or a prior period. Period for which Deductions and Credits Taken. In the case of the death of a taxpayer, there shall be allowed as deductions for the taxable period in which falls the date of his death, amounts accrued up to the date of his death if not otherwise properly allowable in respect of such period or a prior period.
Change of Accounting Period. If a taxpayer, other than an individual, changes his accounting period from fiscal year to calendar year, from calendar year to fiscal year, or from one fiscal year to another, the net income shall, with the approval of the Commissioner, be computed on the basis of such new accounting period, subject to the provisions of Section If the change is from calendar year to fiscal year, a separate final or adjustment return shall be made for the period between the close of the last calendar year for which return was made and the date designated as the close of the fiscal year.
If the change is from one fiscal year to another fiscal year, a separate final or adjustment return shall be made for the period between the close of the former fiscal year and the date designated as the close of the new fiscal year. Accounting for Long-term Contracts. As used herein, the term 'long-term contracts' means building, installation or construction contracts covering a period in excess of one 1 year.
Persons whose gross income is derived in whole or in part from such contracts shall report such income upon the basis of percentage of completion. The return should be accompanied by a return certificate of architects or engineers showing the percentage of completion during the taxable year of the entire work performed under contract. There should be deducted from such gross income all expenditures made during the taxable year on account of the contract, account being taken of the material and supplies on hand at the beginning and end of the taxable period for use in connection with the work under the contract but not yet so applied.
If upon completion of a contract, it is found that the taxable [net] income arising thereunder has not been clearly reflected for any year or years, the Commissioner may permit or require an amended return. A Sales of Dealers in Personal Property. As used in this Section, the term 'initial payments' means the payments received in cash or property other than evidences of indebtedness of the purchaser during the taxable period in which the sale or other disposition is made.
D Change from Accrual to Installment Basis. Allocation of Income and Deductions. B Total gross sales, receipts or income from compensation for services rendered, conduct of trade or business or the exercise of profession, except income subject to final tax as provided under this Code,. D Taxable income as defined in Section 31 of this Code; and.
E Income tax due and payable. B Where to File. D Husband and Wife. F Persons Under Disability. G Signature Presumed Correct. A Requirements. The income tax return shall consist of a maximum of four 4 pages in paper form or electronic form [ 58 ] , be filed by the president, vice-president or other principal officer, and shall be sworn to by such officer and by the treasurer or assistant treasurer, and shall only contain the following information:.
B Taxable Year of Corporation. The dissolving or reorganizing corporation shall, prior to the issuance by the Securities and Exchange Commission of the Certificate of Dissolution or Reorganization, as may be defined by rules and regulations prescribed by the Secretary of Finance, upon recommendation of the Commissioner, secure a certificate of tax clearance from the Bureau of Internal Revenue which certificate shall be submitted to the Securities and Exchange Commission.
Extension of Time to File Returns. Returns of Receivers, Trustees in Bankruptcy or Assignees. Returns of General Professional Partnerships.
Upon failure of the said agents or captains to file the return and pay the tax, the Bureau of Customs is hereby authorized to hold the vessel and prevent its departure until proof of payment of the tax is presented or a sufficient bond is filed to answer for the tax due.
In case the taxpayer elects and is qualified to report the gain by installments under Section 49 of this Code, the tax due from each installment payment shall be paid within 30 days from the receipt of such payments. No registration of any document transferring real property shall be effected by the Register of Deeds unless the Commissioner or his duly authorized representative has certified that such transfer has been reported, and the tax herein imposed, if any, has been paid.
B Assessment and Payment of Deficiency Tax. The tax or deficiency income tax so discovered shall be paid upon notice and demand from the Commissioner. As used in this Chapter, in respect of a tax imposed by this Title, the term ' deficiency ' means:. B Withholding of Creditable Tax at Source. C Tax-free Covenant Bonds. The Department of Finance shall review, at least once every three 3 years, regulations and processes for the withholding of creditable tax under this Code, and direct the Bureau of Internal Revenue to amend rules and regulations for the same, should it be found during the review that the existing rules, regulations, and processes for the withholding of creditable tax under this Code adversely and materially impact the taxpayer.
Returns and Payment of Taxes Withheld at Source. The taxes deducted and withheld by the withholding agent shall be held as a special fund in trust for the government until paid to the collecting officers. The return for final and creditable withholding taxes shall be filed and the payment made not later than the last day of the month following the close of the quarter during which withholding was made.
For final withholding taxes, the statement should be given to the payee on or before January 31 of the succeeding year. C Annual Information Return. In the case of final withholding taxes, the return shall be filed on or before January 31 of the succeeding year, and for creditable withholding taxes, not later than March 1 of the year following the year for which the annual report is being submitted. This return, if made and filed in accordance with the rules and regulations approved by the Secretary of Finance, upon recommendation of the Commissioner, shall be sufficient compliance with the requirements of Section 68 of this Title in respect to the income payments.
The Commissioner may, by rules and regulations, grant to any withholding agent a reasonable extension of time to furnish and submit the return required in this Subsection. D Income of Recipient. All taxes withheld pursuant to the provisions of this Code and its implementing rules and regulations are hereby considered trust funds and shall be maintained in a separate account and not commingled with any other funds of the withholding agent.
E Registration with Register of Deeds. The intent and purpose of the Title is that all gains, profits and income of a taxable class, as defined in this Title, shall be charged and assessed with the corresponding tax prescribed by this Title, and said tax shall be paid by the owners of such gains, profits and income, or the proper person having the receipt, custody, control or disposal of the same. For purposes of this Title, ownership of such gains, profits and income or liability to pay the tax shall be determined as of the year for which a return is required to be rendered.
A Application of Tax. B Exception. Taxable Income. A There shall be allowed as a deduction in computing the taxable income of the estate or trust the amount of the income of the estate or trust for the taxable year which is to be distributed currently by the fiduciary to the beneficiaries, and the amount of the income collected by a guardian of an infant which is to be held or distributed as the court may direct, but the amount so allowed as a deduction shall be included in computing the taxable income of the beneficiaries, whether distributed to them or not.
Any amount allowed as a deduction under this Subsection shall not be allowed as a deduction under Subsection B of this Section in the same or any succeeding taxable year. B In the case of income received by estates of deceased persons during the period of administration or settlement of the estate, and in the case of income which, in the discretion of the fiduciary, may be either distributed to the beneficiary or accumulated, there shall be allowed as an additional deduction in computing the taxable income of the estate or trust the amount of the income of the estate or trust for its taxable year, which is properly paid or credited during such year to any legatee, heir or beneficiary but the amount so allowed as a deduction shall be included in computing the taxable income of the legatee, heir or beneficiary.
C In the case of a trust administered in a foreign country, the deductions mentioned in Subsections A and B of this Section shall not be allowed: Provided, That the amount of any income included in the return of said trust shall not be included in computing the income of the beneficiaries.
Revocable trusts. A Where any part of the income of a trust 1 is, or in the discretion of the grantor or of any person not having a substantial adverse interest in the disposition of such part of the income may be held or accumulated for future distribution to the grantor, or 2 may, or in the discretion of the grantor or of any person not having a substantial adverse interest in the disposition of such part of the income, be distributed to the grantor, or 3 is, or in the discretion of the grantor or of any person not having a substantial adverse interest in the disposition of such part of the income may be applied to the payment of premiums upon policies of insurance on the life of the grantor, such part of the income of the trust shall be included in computing the taxable income of the grantor.
B As used in this Section, the term ' in the discretion of the grantor ' means in the discretion of the grantor, either alone or in conjunction with any person not having a substantial adverse interest in the disposition of the part of the income in question. Fiduciary Returns. Such fiduciary or person filing the return for him or it, shall take oath that he has sufficient knowledge of the affairs of such person, trust or estate to enable him to make such return and that the same is, to the best of his knowledge and belief, true and correct, and be subject to all the provisions of this Title which apply to individuals: Provided, That a return made by or for one or two or more joint fiduciaries filed in the province where such fiduciaries reside; under such rules and regulations as the Secretary of Finance, upon recommendation of the Commissioner, shall prescribe, shall be a sufficient compliance with the requirements of this Section.
Collection of Foreign Payments. Information at Source as to Income Payments. Return of Information of Brokers. Returns of Foreign Corporations. B Form and Contents of Return. Nothing in this Section shall be construed to require the divulging of privileged communications between attorney and client.
The Commissioner may, in each year, cause to be prepared and published in any newspaper the lists containing the names and addresses of persons who have filed income tax returns. Income tax returns of specific taxpayers subject of a request for exchange of information by a foreign tax authority pursuant to an international convention or agreement on tax matters to which the Philippines is a signatory or a party of, shall be open to inspection upon the order of the President of the Philippines, under rules and regulations as may be prescribed by the Secretary of Finance, upon recommendation of the Commissioner.
Distribution of Dividends or Assets by Corporations. A Definition of Dividends. Where a corporation distributes all of its assets in complete liquidation or dissolution, the gain realized or loss sustained by the stockholder, whether individual or corporate, is a taxable income or a deductible loss, as the case may be.
B Stock Dividend. However, if a corporation cancels or redeems stock issued as a dividend at such time and in such manner as to make the distribution and cancellation or redemption, in whole or in part, essentially equivalent to the distribution of a taxable dividend, the amount so distributed in redemption or cancellation of the stock shall be considered as taxable income to the extent that it represents a distribution of earnings or profits.
Declaration of Income Tax for Individuals. Nonresident Filipino citizens, with respect to income from without the Philippines, and nonresident aliens not engaged in trade or business in the Philippines, are not required to render a declaration of estimated income tax.
The declaration shall contain such pertinent information as the Secretary of Finance, upon recommendation of the Commissioner, may, by rules and regulations prescribe. An individual may make amendments of a declaration filed during the taxable year under the rules and regulations prescribed by the Secretary of Finance, upon recommendation of the Commissioner.
The first installment shall be paid at the time of the declaration and the second and third shall be paid on August 15 and November 15 of the current year, respectively. The fourth installment shall be paid on or before May 15 [ 67 ] of the following calendar year when the final adjusted income tax return is due to be filed.
C Definition of Estimated Tax. If, during the current taxable year, the taxpayer reasonable expects to pay a bigger income tax, he shall file an amended declaration during any interval of installment payment dates. The tax so computed shall be decreased by the amount of tax previously paid or assessed during the preceding quarters and shall be paid not later than sixty 60 days from the close of each of the first three 3 quarters of the taxable year, whether calendar or fiscal year.
If the sum of the quarterly tax payments made during the said taxable year is not equal to the total tax due on the entire taxable income of that year, the corporation shall either:.
C Be credited or refunded with the excess amount paid, as the case may be. In case the corporation is entitled to a tax credit or refund of the excess estimated quarterly income taxes paid, the excess amount shown on its final adjustment return may be carried over and credited against the estimated quarterly income tax liabilities for the taxable quarters of the suceeding taxable years.
Once the option to carry-over and apply the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable years has been made, such option shall be considered irrevocable for that taxable period and no application for cash refund or issuance of a tax credit certificate shall be allowed therefor.
A Place of Filing. The final adjustment return shall be filed on or before the fifteenth 15th day of April, or on or before the fifteenth 15th day of the fourth 4th month following the close of the fiscal year, as the case may be. C Time of Payment of the Income Tax. A Wages. B Payroll Period. C Employee. The term 'employee' also includes an officer of a corporation. D Employer. Income Tax Collected at Source.
A Requirement of Withholding. B Tax Paid by Recipient. Refunds and credits in cases of excessive withholding shall be granted under rules and regulations promulgated by the Secretary of Finance, upon recommendation of the Commissioner.
Any excess of the taxes withheld over the tax due from the taxpayer shall be returned or credited within three 3 months from the fifteenth 15th day of April. Refunds shall be made upon warrants drawn by the Commissioner or by his duly authorized representative without the necessity of counter-signature by the Chairman, Commission on Audit or the latter's duly authorized representative as an exception to the requirement prescribed by Section 49, Chapter 8, Subtitle B, Title 1 of Book V of Executive Order No.
D Withholding on Basis of Average Wages. E Nonresident Aliens. F Year-end Adjustment. The difference between the tax due from the employee for the entire year and the sum of taxes withheld from January to November shall either be withheld from his salary in December of the current calendar year or refunded to the employee not later than January 25 of the succeeding year. A Employer. If the employer fails to withhold and remit the correct amount of tax as required to be withheld under the provision of this Chapter, such tax shall be collected from the employer together with the penalties or additions to the tax otherwise applicable in respect to such failure to withhold and remit.
B Employee. On the other hand, excess taxes withheld made by the employer due to:. Filing of Return and Payment of Taxes Withheld. The return shall be filed and the payment made within twenty-five 25 days from the close of each calendar quarter: Provided, however, That the Commissioner may, with the approval of the Secretary of Finance, require the employers to pay or deposit the taxes deducted and withheld at more frequent intervals, in cases where such requirement is deemed necessary to protect the interest of the Government.
The taxes deducted and withheld by employers shall be held in a special fund in trust for the Government until the same are paid to the said collecting officers. Return and Payment in Case of Government Employees. The statement required to be furnished by this Section in respect of any wage shall contain such other information, and shall be furnished at such other time and in such form as the Secretary.
B Annual Information Returns. This return, if made and filed in accordance with rules and regulations promulgated by the Secretary of Finance, upon recommendation of the Commissioner, shall be sufficient compliance with the requirements of Section 68 of this Title in respect of such wages. C Extension of Time.
Rate of Estate Tax. Gross Estate. A Decedent's Interest. B Transfer in Contemplation of Death.
Application for vat zero rating bir - application for vat zero rating bir.On filing prior applications for VAT zero-rating of sales
The said advisory also informed the taxpaying public that they need to follow the existing guidelines and procedures for these applications to be processed, which refer to Revenue Memorandum Order RMO No. The Philippines adheres to the destination principle for VAT. Under this principle, goods and services are taxed only in the country where these are consumed. Therefore, exports are zero-rated, but imports are taxed.
Such practice makes the seller internationally competitive by allowing the refund or credit of input taxes that are attributable to export sales. RBEs are given full relief from VAT, with the goal of making the Philippines a prime location of internationally competitive economic zones. Looking back, RA No.
Thus, without an approved application for effective zero-rating, the transaction otherwise entitled to zero-rating shall be considered exempt.
Hence, it is important to understand that approval for VAT zero-rating is required only for effectively zero-rated transactions based on RMO No. At that time, effectively zero-rated transactions include:. Export sales under Executive Order No.
Sale of goods, supplies, equipment, and fuel to persons engaged in international shipping, or international air transport operations;. Sales to persons or entities whose exemption under special laws or international agreements, to which the Philippines is a signatory, effectively subjects such sales to zero-rate;. Services rendered to persons engaged in international shipping, or international air transport operations, including leases of property for use, and;.
Thus, RR No. To note, sales made to BoI-registered enterprises were already treated as subject to automatic zero-rating, hence no prior application was needed.
Moreover, RR also deleted the entire provision on the requirement of prior application for VAT zero-rating for all transactions. Others insisted that deleting the provision was an oversight in the drafting of the said regulations. What they perhaps failed to notice was that a change in the nature of the zero-rating of the sales to export processing zones from being effectively zero-rated, to automatic zero-rating, would actually mean that no prior application would be needed, since automatic zero-rating does not require prior application, unlike an effective zero-rating.
Given the landscape, could tax advisories have the same effect as BIR revenue regulations, which overturn RR ? Could it be treated like a Memorandum Circular issued merely for the internal administration of the BIR?
It also bears noting that as early as , the Supreme Court held that BIR regulations additionally requiring an approved prior application for effective zero-rating cannot prevail over the clear VAT nature of transactions as can be perused from the supporting documents.
The Supreme Court also held that the additional requirement grants unfettered discretion to officials or agents who, without fluid consideration, are bent on denying a valid application; and that administrative convenience cannot thwart legislative mandate. This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant.
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