How to File BIR Form 1601-EQ in Philippines?

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By: Hergie Anne C. De Guzman, CPA After the filing of the monthly Expanded Withholding Tax (EWT) returns for the first two month of the quarter, taxpayers should also prepare for the quarterly filing of the BIR Form 1601-EQ covering the entire quarter or 3 months. The return is also known as the Quarterly Remittance Return of Creditable Income Taxes Withheld which was introduced last 2018 through RMC No. 27-2018 dated December 18, 2019. It is a declaration of the quarterly withheld taxes from each income payment subject to EWT.  What are the covered transactions? In order to know if a certain transaction is subject to EWT, we need to identify the nature of the expense. Common transactions subject to EWT with the applicable tax rates and Alphanumeric Tax Codes are as follows: Income Payment EWT Rate ATC Rent 5% WI100 – for individualWC100 – for non-individual Professional Fees 5%/10%/15%

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How to File BIR Form 1604-E in Philippines?

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By: Hergie Anne C. De Guzman, CPA The compliance for the filing of expanded withholding taxes does not end with the monthly and quarterly filings. At year end, an Annual Information Return of Creditable Income Taxes Withheld (Expanded)/Income Payments Exempt from Withholding Tax or the BIR Form 1604-E should be filed by the taxpayers.  What are the covered transactions for BIR Form 1604-E? Basically, the return is a summary of the expanded withholding taxes for the year, the amount of remittance made, including penalties, if any, and the date of remittance. It is only an information return, hence, no tax due is computed for this.  The information return covers the transactions relating to the expanded withholding taxes on certain income payments specified in Section 2.57.2 of Revenue Regulations (RR) No. 2-1998: Rental payments, professional fees, contractors, payments to regular suppliers, etc. reported in BIR Forms Nos. 0619-E and 1601-EQ; and, 

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Extended Deadline on Tax Amnesty on Delinquency

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The Bureau of Internal Revenue issued RR 4-2019 on April 5, 2019 allowing natural and juridical persons with internal revenue tax liabilities covering taxable year 2017 and prior years to avail  Tax Amnesty on Delinquencies within one year from the effectivity date of the regulation. The deadline for availment however, has been further extended by RR 15-2020 to December 31, 2020 or may be extended further if the circumstances warrant an extension such as in case of country-wide economic or health reasons. Who can avail the Tax Amnesty? Delinquent Accounts as of the effectivity of RR 4-2019 including those with application for compromise settlement either on the basis of doubtful validity of assessment or financial incapacity of the taxpayer. This is regardless of whether those were denied by or still pending with the Regional or National Evaluation Board on or before the effectivity of the regulation. It also includes the

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BIR RMC No. 79-2020: Filing of Returns and Payment of Taxes under MECQ

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Prepared by: Hergie Anne C. De Guzman, CPA Bureau of Internal Revenue (BIR) released Revenue Memorandum Circular (RMC) No. 79-2020 on August 6, 2020 setting guidelines for the filing of returns and payment of taxes during the Modified Enhanced Community Quarantine (MECQ) re-implemented for the period covering August 4 to 18, 2020. BIR further issued another RMC, RMC No. 80-2020, amending the covered RDOs. Who are covered? All taxpayers under the jurisdiction of the following Revenue District Offices (RDOs): RDO Nos. 24 to 34 and, RDO Nos. 38 to 57 Guidelines Out-of-district payments of tax returns are allowed. Filing and payment of  tax returns may be done in the Revenue Collection Officers (RCOs) of the nearest RDO, even in areas where there are Authorized Agent Banks (AABs).  Note:  In case of payment in RCOs,  Cash payment of taxes shall not exceed PhP20,000.00 Check payment of taxes shall have no limit. 

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RMC No. 76-2020: Clarifications on the Filing of BIR Form 1709

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By: Hergie Ann De Guzman The issuance of Revenue Regulations (RR) No. 19-2020 last month created clamor among taxpayers on how they will comply with the BIR Form 1709 or the Related Party Transaction (RPT) Form. To answer the questions of the taxpayers, BIR issued this RMC. Listed below are the highlight discussions in the RMC: Who will need to submit BIR Form 1709? All PH taxpayers, either individual or non-individual (including non-stock non-profit organizations for the activities conducted for profit) with related party transactions (RPTs) shall complete and submit BIR Form 1709. Effectivity of the reporting requirement Basically, BIR Form 1709 is a new attachment in the Annual Income Tax Returns of those with RPTs. The first set of taxpayers to comply with the new reporting are those taxpayers with fiscal year ended March 31, 2020. With this, the deadline for the submission of the RPT Form, together with

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BIR VAT Zero-rating in Section 108(B)(2), NIRC on Ph BPOs and service exporters

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By: Garry S. Pagaspas, CPA Philippine manpower is one great economic contributor and no wonder business process outsourcing (BPO) industry is performing well. Notably, a business process outsourcing in the Philippines can be owned 100% by foreign investors provided they export at least 60% of its output to clients/ customers outside Philippines or should they intend to register with Philippine Economic Zone Authority (PEZA) for non-fiscal and fiscal incentives such as income tax holiday (ITH) and/or 5% gross income taxation, they would need to export at least 70% of its output. This allowed foreign ownership explains why business process outsourcing entities in the Philippines could be registered with he Securities and Exchange Commission (SEC) under the Revised Corporation Code (RCC) in a number of legal entities fully owned or controlled by foreign investors, e.g. one-person corporation with foreign investor as single stockholder, Philippine subsidiary, Philippine branch, and regional operating headquarters

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Ways How to Keep Employees under the Labor Rules Amid Covid-19 In Philippines

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By: Deeryl Jade L. Bantilan As the Philippines continues to fight against the COVID-19 pandemic, many organizations and companies may not manage to survive and be forced to cease business operations due severe economic implications of COVID-19. While the government is launching programs and subsidies for these companies and businesses, the magnitude of the impact may have really hard times for them to recover. Accordingly, in this article, let me share insights on some ways to keep employees and business operations amid COVID-19 in Philippines through some labor cost saving devices under existing labor laws, rules, and regulations being implemented by the Department of Labor and Employment (DOLE) and other related agencies. Manpower Reduction The Labor Code of the Philippines recognizes employment dismissal, upon compliance with the substantive and procedural requirements, for authorized causes such as temporary retrenchment or lay-off, redundancy, or closure and cessation of business in order for

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BIR Revenue Regulations No. 19 – 2020:BIR Form No. 1709

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REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE                                                BUREAU OF INTERNAL REVENUE                                                                                                                                                                                               REVENUE REGULATIONS NO. 19-2020 dated July 8, 2020 SUBJECT:     New BIR Form No. 1709, Replacing Form No. 1702H, Series of 1992 TO:                 All Internal Revenue Officers and Others Concerned ______________________________________________________________________________ Section 1. Objective Pursuant to Sections 244 and 6(H) of the National Internal Revenue Code of 1997 (“NIRC”), as amended in relation to Section 50 thereof of which was implemented by Revenue Regulations (RR) No. 2-2013, this Revenue Regulations is issued to prescribe the use of the new BIR form No. 1709 or Information Return on Related Party Transactions (Domestic and/or Foreign) (Annex “A”), replacing for this purpose BIR Form 1702H – Information Return on Transactions with Related Foreign Persons, series of 1992. Section 2. Background Through the years, transactions around the world have become more complex and have been subject to abuse by taxpayers with intent to

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5 Advantages of Having Your Own Website as Professional Practitioner

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By: Cecile Maglunob, CPA In this modern world, almost everything is online and Covid-19 seems to highlight this fact as it shaken almost all types of professions globally. Here in the Philippines, many professional practitioners are still in adjustment phase of re-navigating their practice to adopt and survive on the paradigm shift brought by the pandemic. We ourselves are racing for changing our processes and procedures to ensure we keep our wheels running despite the abrupt changes to the business models of the current times. As we move forward in our practice, we feel the need for sharing the advantages of having your own professional website to create a more long -term path. The five points below are not absolute and were just based on our personal experiences as we personally manage our own website for our practice. 1. Global visibility of your profile Business cards for professionals is a

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RMC 60-2020: Registration and Tax Compliance of Online Sellers in Philippines

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By: Garry S. Pagaspas, CPA Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular No. 60-2020 (RMC No. 60-2020) dated June 1, 2020 entitled “Obligations of Persons Conducting Business transactions Through Any Forms of Electronic Media, and Notice to Unregistered Businesses.” Under RMC No. 60-2020 in Philippines gives due notice to all persons doing business and earning income in any manner or form, specifically those in the digital transactions through the use of any electronic platforms and media, and other digital means to register such business and comply with applicable tax regulations. For reference on registration, RMC No. 60-2020 in Philippines provides basic guidelines and all those online sellers in Philippines who will register their business activity and/ or update their registration status not later than July 31, 2020 ( further extended to September 30, 2020 by RMC 92-20), shall not be penalized for late registration. Within the same period

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