Revenue Memorandum Circular No. 16-2024

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Extension of the Deadline for the Submission of Alphabetical List of Employees/Payees from whom taxes were withheld. The deadline of submission of the alphalist for the taxable year 2023 using the new version of the Alphalist Data Entry and Validation Module is hereby extended up to February 28, 2024. A separate tax advisory shall be posted on the website of the Bureau informing the availability of the updated version of the said module. For those taxpayers- employers who have employees availing 5% tax credit under the PERA Act of 2008 and who have not submitted their Alphalist for the year 2022, the deadline shall be thirty (30) days immediately after the date of posting a tax advisory on the BIR website announcing the availability of a separate revised data entry module. Originally published in GPP CPAs website.

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Revenue Memorandum Circular No. 3-2024

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This circularizes Republic Act (RA) No. 11976 (Ease of Paying Taxes [EOPT] Act), together with the Veto Message both signed by President Ferdinand R. Marcos Jr. on January 5, 2024. The following Sections of the National Internal Revenue Code (NIRC) were amended under the EOPT Act: The BIR shall develop an EOPT and digitalization roadmap that will provide for the programs and projects to be implemented to ensure ease of compliance of tax laws, rules and regulations, including but not limited to adoption of simplifies tax returns, streamlining of tax processes, reduction of tax or documentary requirements, and digitalization of BIR services as provided under Section 40 of the Act; Provided, That in developing this roadmap, the BIR shall prioritize taxpayers who are considered as micro and small taxpayers for purposes of the Act, in terms of streamlining tax procedures and documentary requirements according to taxpayer size and capacity to

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Veto Message of R.A. 11976

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MALACAÑAN PALACEMANILA 05 January 2024 THE HONORABLE SPEAKERand Members of the House of RepresentativesHouse of RepresentativesBatasan Hills, Quezon City Ladies and Gentlemen: In accordance with my firm commitment to modernize and increase the efficiency and effectiveness of tax administration and to strengthen taxpayer rights, I sign into law Republic Act No.11976, entitled “AN ACT INTRODUCING ADMINISTRATIVE TAX REFORMS, AMENDING SECTIONS 21, 22, 51, 57, 58, 76, 77, 81, 90, 91, 103, 106, 108, 109, 110, 112, 113, 114, 115, 116, 117, 118, 119, 120, 128, 200, 204, 229, 235, 256, 237, 238, 241, 242, 245, 248, AND 269; AND REPEALING SECTION 34 (K) OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES.” After the comprehensive amendments to tax policy introduced by the previous administration, we now focus our sights on tax administration with the passage of the Ease of Paying Taxes (EOPT) Act. Recognizing the

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Republic Act No. 11976 “Ease of Paying Taxes Act”

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AN ACT INTRODUCING ADMINISTRATIVE TAX REFORMS, AMENDING SECTIONS 21, 22, 51, 57, 58, 76, 77, 81, 90, 91, 103, 106, 108, 109, 110, 112, 113, 114, 115, 116, 117, 118, 119, 120, 128, 200, 104, 229, 235, 236, 237, 238, 241, 242, 245, 248, AND 269; AND REPEALING SECTION 34(K) OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES SECTION 1. Title – This Act shall be known as the “Ease of Paying Taxes Act”. SEC. 2. Declaration of Policy. – It is hereby declared the policy of the State: SEC. 3. Section 21 of the National Internal Revenue Code of 1997, as amended, is hereby amended to read as follows: ” SEC. 21. Sources of Revenue and Classification of Taxpayers. – Group Gross Sales Micro Less than Three million pesos (P3,000,000) Small Three million pesos (P3,000,000) to less than Twenty million pesos (P20,000,000) Medium

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13th month pay: A Basic Guide to the Mandatory Benefit in the Philippines 

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December, it is that time of the year again. Parols hanging from the balcony, Jose Mari Chan on everyone’s car radio and the most anticipated 13th month pays for employees in the Philippines. However, for employers with a large employee population, 13th-month pay can be complicated, strenuous, and sometimes even time-consuming. So, what is 13th month pay in the Philippines? Let us unpack that. Brief History of 13th month pay in the Philippines  Pursuant to Presidential Decree No. 851 (1975), employers in the private sector in the Philippines are required to pay 13th month pay to all employees receiving at least PhP1,000.00 a month basic salary, regardless of the nature of employment, who have rendered at least one month of service. The decree was originally imposed to “further protect the level of real wages from the ravage of worldwide inflation” and in the spirit of Christmas and New Year, employers

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Four (4) Features of PhP90,000 Tax Exempt 13th Month Pay and Other Benefits in Philippines

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“Happy Holidays!”, one of the most common expressions we heard every December in the Philippines as the Yuletide season is fast approaching. Employees in Philippines are inclined to expect to receive the 13th month pay, Christmas Bonus, and the likes. As they receive the last payslip during the year, the employees understand that employers withheld taxes as part of its obligation to the nation and to help to the coffers of the Philippine government. You might be wondering what are the tax implications of this benefits received from the employer, is it taxable and up to what extent? Under the withholding tax rules, 13th-month pay and other benefits are exempted from income tax, and hereunder quoted: “(B) Exemption from withholding tax on compensation. – The following income payments are exempted from the requirements of withholding tax on compensation but may be subject to income tax depending on the nature/sources of

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6 Reminders for 2023 Corporate Annual Income Tax Return (ITR) for Philippine BIR Filing

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In the Philippines, the “busy season” commences for taxpayers and practitioners in the field of accounting and taxation, as the year ends. During this season, they begin to prepare for the filing of year-end tax compliance requirements. One of the most common year-end tax compliance requirements in the Philippines is the filing of the Annual ITR. The Annual ITR determines the net taxable income from operations related to the pursuit of business activity during a given taxable year. But what do they need to consider during the preparation of the 2023 Annual ITR in the Philippines? Here are some points to consider in the preparation of 2023 Annual ITR in Philippines: I. Income Tax Rate – 20%/ 25% / 2% MCIT/ 5% GIT / ITH Republic Act (R.A.) No. 11534 otherwise known as Corporate Recovery for Tax Incentives and Enterprises (CREATE) Act, amending further the Tax Code of the Philippines,

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6 Reminders for 2023 Individual Income Tax Return (ITR) for Philippine BIR Filing

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As the Christmas holiday approaches in the Philippines, many of us are preparing for yearly traditions just like making wish lists, buying gifts, and even setting New Year’s resolutions for 2024. Taxpayers and practitioners in the field of accounting and taxation are also busy making their bucket list in preparation for filing in the year-end tax compliance requirements in the Philippines, specifically, the 2023 annual Income Tax Return (ITR) of an individual taxpayer. As paying income tax is one imposed by law, let us make sure we do not forget about this important task as we get ready for the upcoming holidays. Here are some points to consider in preparation for the 2023 Individual ITR in the Philippines for your tax liability relative to your trade or practice of profession. I. 15-32% Individual Income Tax Rate in the Philippines effective January 1, 2023 If you recall, Republic Act No. 10963,

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Preliminary Analytical Procedures: Where Philippines Audits Begin with Precision

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Imagine a company’s financial health as a complex puzzle, with each piece representing a number, detail, or financial decision. To ensure trust and precision in completing this intricate puzzle, we rely on the audit process in the Philippines — an indispensable safeguard of a company’s financial well-being. At its core lies the preliminary analytical procedures, which serve as the initial glimpse into this financial mystery. Analytical Procedures in the Philippines, outlined in Philippine Auditing Standards (PSA) 520, are akin to a financial auditor’s toolkit. It equips Philippines auditors to comprehend the company and its internal controls, evaluate potential errors, and uphold Philippines financial statement integrity. Simply put, Analytical Procedures involve a meticulous examination of numbers and patterns in a company’s financial statements in the Philippines. This procedure may be used during the planning, substantive test, or completion stages of the audit in the Philippines. These insights act as guideposts, ensuring

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Navigating the Maze: Management’s Role in External Audits In Philippines

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In the world of external audits in Philippines, the spotlight often shines brightly on auditors and their responsibilities. However, there is a significant player behind the scenes whose role is equally pivotal yet sometimes overlooked—the management of the company in Philippines being audited. In this article, we will explore on the extent of management’s involvement in ensuring the accuracy of audited financial statements in Philippines and examine the vital role that external auditors in Philippines play in preserving this accountability. The Power and Perils of Financial Statements in Philippines Financial statements in Philippines serves as a treasure trove of information, offering a snapshot of a company’s financial health. It wields considerable influence over the decisions of various stakeholders, including investors, creditors, government agencies and the public, in general. The accuracy of financial statements in Philippines is pivotal for making well-informed choices, underscoring their reliability as paramount. Financial Statements in Philippines

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