Implementing the Tax Provisions of Republic Act No. 9267, Otherwise Known as “The Securitization Act of 2004”
Section 1 Objective – Pursuant to Section 244 of the National Internal Revenue Code of 1997, as amended (“Tax Code”), these Regulations are issued to implement the tax provisions of Sections 27 to 34 of Title IV of Republic Act (RA) No. 9267, otherwise known as “The Securitization Act of 2004.”
Section 2 Definition of Terms – When used in these Regulation the following terms shall have the following meaning:
Section 3. Tax Exemption of Transfer of Assets – The sale of Transfer of assets to the SPE, including sale of transfer of any and all security interest thereto, made in accordance with the Securitization Plan shall be exempted from value-added tax (VAT) and documentary stamp tax (DST), or any other taxes imposed in lieu thereof.
Moreover, pursuant to Section 28 of RA No. 9267, the transfer of assets by dation in payment (dacion en pago) by the obligor in favor of the obligee shall not be subject to capital gains tax as imposed under Section 27 (D)(5) of the Tax Code.
Section 4. Tax Exemption on the Issuance and Transfer of Securities. – The original issuance of ABS and other securities related to solely to such securitization transaction, such as, but not limited to, seller’s equity, subordinated debt instruments purchased by the originator, and other related forms of credit enhancement shall be exempt from VAT, or any other taxes imposed in lieu therefor, but shall be subject to DST.
Secondary trades and subsequent transfers of ABS, including all forms of credit enhancement in such instruments, shall be exempt from DST and VAT, or any other taxes imposed in lieu thereof.
Section 5 Tax Treatment of Income from ABS. – The yield or income from the ABS shall be subject to a twenty percent (20%) final withholding tax. However, the yield or income of investors from any low cost or socialized housing-related ABS shall be exempt from income tax.
Such yield or income must from the securitization of the mortgage and housing-related receivables of the government housing agencies. The low-cost socialized housing-related ABS must be certified as such by the Department of Human Settlements and Urban Development and the Department of Finance.
Further Amending Section 9 of Revenue Regulations No. 25-2003 Relative to the Documentary Requirements to be Submitted by Motor Vehicle Manufacturer/Assembler/Importer as Basis for the Bureau of Internal Revenue to Determine Whether the Automobiles Subject to Excise Tax Exemption are Hybrid or Purely Electric Vehicles pursuant to the Provisions of Republic Act No. 10963, Otherwise known as the “Tax Reform for Acceleration and Inclusion (TRAIN) Law”
Section 1 Scope – Pursuant to the provisions of Sections 244 and 245 of the National Internal Revenue Code of 1997 (NIRC), as amended, in relation to Section 84 of the Republic Act No. 10963, otherwise known as the “TRAIN LAW”, these Regulations are hereby promulgated to further amend Section 9 of Revenue Regulations (RR) No. 25-2003, as Natural Resources – Environment Management Bureau (DENR-EMB) to determine whether the automobiles subject to excise tax exemption are hybrid or purely electric vehicles pursuant to the provisions of TRAIN LAW.
Section 2 Purpose of Regulations – To amend/revise the guidelines and procedures for the processing of the request for tax exemption of Hybrid or Purely electric Vehicles. Currently, RR No. 25-2003, as amended by RR No. 24 -2018, assigns the determination of whether an automobile is Hybrid or Purely Electric to DENR – EMB by recognizing the Certificate of Conformity (COC) and Certificate of Non-Coverage (CONC) they issue as the basis for classification of automobiles by the Bureau of Internal Revenue (BIR). During the inter-agency consultation called by the Department of Finance with representatives from Department of Energy (DOE), DENR-EMB, and BIR, DOE proposed that the determination of whether an automobile is Hybrid or Purely Electric be reverted to the DOE as originally assigned by RR No. 5-2018.
Section 3 Further Amending Section 9 (E) of RR No. 25-2003 – Section 9 (E) of RR No. 25-2003, as amended, is further amended, is further amended to read as follows:
” Sec 9 – Tax-Exempt Removals of Automobiles – The following removals of locally manufactured/assembled or released of imported automobiles form the place of production or from customs custody, respectively, are exempt from the payment of the appropriate excise taxes, subject to certain conditions.
E. PURELY ELECTRIC VEHICLES SHALL BE EXEMPT FORM EXCISE TAS ON AUTOMOBILES. HYBRID VEHICLES SHALL BE SUBJECT TO FIFTY PERCENT (50%) OF THE APPLICABLE EXCISE TAX. PRIOR TO THE REMOVAL OF THE AUTOMOBILES FROM THE MANUFACTURING PLANT OR CUSTOMS CUSTODY, THE COMMISSIONER OF INTERNAL REVENUE (CIR) SHALL REFER TO THE ELECTRIC VEHICLE RECOGNITION LIST PUBLISHED BY THE DEPARTMENT OF ENERGY (DOE), WHICH CONTAINS THE INFORMATION AND CLASSIFICATION FOR BATTERY ELECTRIC VEHICLES (PURELY ELECTRIC VEHICLE/BEV), PLUG-IN HYBRID ELECTRIC VEHICLES (PHEV), AND HYBRID ELECTRIC VEHICLES (HEV).
THE BIR SHALL MAKE A DETERMINATION WHETHER THE AUTOMOBILE IS EXEMPT FROM EXCISE TAX OR SUBJECT TO 50% EXCISE TAX, RESPECTIVELY, ON THE BASIS OF THE DOE’S LIST OF RECOGNIZED ELECTRIC VEHICLES, PUBLISHED ON ITS WEBSITE, WITHOUT PREJUDICE TO THE BIR’S AUTHORITY TO CONDUCT ANY POST-VERIFICATION ASSESSMENT OF THE AUTOMOBILES.
FOR PURPOSES OF KEEPING UP TO DATE WITH THE LATEST PUBLICATIONS OF THE LIST OF RECOGNIZED ELECTRIC VEHICLES, THE DOE SHALL FURNISH THE BIR WITH A CERTIFIED TRUE COPY OF AN UPDATED LIST OF RECOGNIZED ELECTRIC VEHICLES.”
Clarifying the Provisions of Republic Act No. 11976, Otherwise Known as the “Ease of Paying Taxes Act”, Applicable to the Power Industry
This Revenue Memorandum Circular is issued in order to publish and clarify certain provisions of Revenue Regulations (RR) Nos. 3-2024 and 7-2024, implementing the National Revenue Code of 1997 (Tax Code), as amended by Republic Act (RA) No. 11976 or otherwise known as the “Ease of Paying Taxes (EOPT) Act”, affecting generation, transmission, and distribution companies, as well as electric cooperatives and retail electricity suppliers.
Clarification of Certain Policies and Procedures Relative to the Implementation of the Risk-based Approach in the Verification and Processing of Value-Added Tax (VAT) Refund Claims, as Introduced in Republic Act No. 11976, Otherwise Known as the “Ease of Paying Taxes Act”
This circular is being issued to clarify and address concerns in the risk-based approach verification and processing of VAT refund claims pursuant to Section 112 (A) of the National Internal Revenue Code of 1997 (Tax Code), as amended by Republic Act No. 11976 r the Ease of Paying Taxes (EOPT) Act, and as implemented by the Revenue Regulations (RR) No. 05-2024, and Revenue Memorandum Order (RMO) No. 23-2024, as amended by RMO No. 42-2024.
Example 2: The taxpayer-claimant submitted the following documents in support of its claim for VAT refund amounting to P 7,000,000.00:
Announcing the Availability of Update of Taxpayer Classification, and Resumption of Business Registration and Other Registration-Related Transactions in the Online Registration and Update System (ORUS)
Relative to the implementation of Revenue Regulations No. 8-2024 and Section 21(B) of the National Internal Revenue Code (NIRC) on the classification of taxpayers, this Circular is hereby issued to announce the availability of the Application for Update of Taxpayer Classification thru the “Update Information” functionality and the resumption of business registration and other registration-related transactions in the BIR Online Registration and Update System (ORUS) starting October 1, 2024 and October 10, 2024, respectively.
By: Garry Pagaspas, CPA
With the advent of advanced technology, sales of goods and services has been automated online worldwide through digitalization without much interaction among buyers and sellers. For buyers, this gave much advantage for being able to acquire goods and services from outside the country, while local suppliers are challenged for competition within and outside Philippines. On the other side, it made the government realized the seemingly inequality on taxation between local suppliers paying taxes on sales while giving undue advantage for non-resident suppliers deriving income through digital platform from Philippine buyers without paying taxes on them in Philippines. These inequalities paved way to the legislation of Republic Act No, 12023 – Value Added Tax (VAT) on Digital Services Law in Philippines (RA 12023 -VAT on Digital Services Philippines) that is aimed to level the playing field among digital service providers – local and foreign. By this present, let us share the basic features of Republic Act No, 12023 – Value Added Tax (VAT) on Digital Services Law in Philippines as follows:
1. Classified and defined digital services and digital services providers
RA 12023 -VAT on Digital Services Philippines now classified digital services as among those services subject to 12% value added tax in Philippines. By definition, “digital services” shall refer to any service supplied over the internet or other electronic network with the use of information technology and where the supply of the service is essentially automated. Digital services shall include online search engines; online marketplace or e-marketplace; cloud services; online media and advertising; online platforms; or digital goods. For the purpose and by implication, digital service providers would refer to those who supply digital services subject to 12% value added tax in Philippines and is further classified as resident or non-resident – those that has no physical presence in Philippines.
In a Press Release of the Department of Finance dated September 28, 2024, it cited among digital service providers some popular streaming services such as Netflix, Disney+, and online shopping sites such as Shein, Temu and Amazon who will now have to pay for VAT on their digital services that are consumed in Philippines.
2. Imposed 12% VAT on non-resident digital services providers consumed in Philippines
Under RA 12023 – VAT on Digital Services Philippines, digital service providers are liable for 12% value added tax on their supply of digital services – whether residents on non-residents. This seems plain and simple for resident digital service providers who have a registered local entity in Philippines while for non-residents, this seems totally new, if not challenging. Accordingly, non-resident digital services providers are now subject to 12% VAT under RA 12023 – VAT on Digital Services Philippines and the following special rules apply:
RA 12023 -VAT on Digital Services Philippines specifically provides that non-resident digital service providers are not allowed to claim creditable input VAT.
Notably, prior to RA 12023 -VAT on Digital Services Philippines, 12% VAT on services of non-residents normally apply to those services being rendered in the Philippines, regardless of whether they are regularly rendered in Philippines. Under RA 12023 -VAT on Digital Services Philippines, digital services of non-residents through their digital platforms are considered services performed in Philippines if such services are consumed in the Philippines.
3. Imposed further tax compliance obligations on non-resident digital services providers
RA 12023 -VAT on Digital Services Philippines requires the following tax compliance obligations upon non-resident digital services providers:
Notably, penalties would be imposed for non-compliance of the above by the digital service providers in Philippines.
4. VAT exemption on digital services in Philippines
While RA 12023 -VAT on Digital Services Philippines imposes 12% VAT on digital services consumed in Philippines, it nevertheless imposed the following exemptions:
5. Ph local buyers’ obligation to withhold VAT on payments to digital service providers
Considering the peculiarity of non-residents who do not have physical presence, RA 12023 -VAT on Digital Services Philippines imposed the following withholding tax obligations to local buyers in the Philippines:
Notably, the above are added withholding tax obligations imposed under RA 12023 -VAT on Digital Services Philippines while the rest of the withholding VAT rules would seem to remain in place such as 5% creditable VAT on government money payments to local VAT suppliers.
6. Funding for the development of creative industry in Philippines
Under RA 12023 -VAT on Digital Services Philippines 5% of incremental VAT revenues on digital services for the first five (5) years from effectivity of the law will be allocated and exclusive used for the development of creative industries in the Philippines.
7. Eyed to generate PhP80B to PhP145 B of revenues for 2025 to 2028.
As Sec of Finance puts it during its Press Release dated Sept. 28, 2024, RA 12023 – VAT on Digital Services Law in Philippine projects around PhP80B to PhP145B of VAT revenues for the period 2025 to 2028, depending on the compliance of digital services providers and related taxpayers.
8. Power to block digital services of non-residents in coordination with DICT through NTC
RA 12023 -VAT on Digital Services Philippines provides that the power of the Commissioner of Internal Revenue to suspend operations shall include the blocking of digital services performed or rendered in the Philippines by a digital service provider which shall be implemented by the Department of Information and Communications Technology (DICT) through the National Telecommunications Commission (NTC).
Disclaimer.
The above features are lifted from the author’s understanding and personal take of the provisions of RA 12023 -VAT on Digital Services Philippines summarized for better appreciation of its provisions. The author suggests reading through the provisions of RA 12023 -VAT on Digital Services Philippines and watch-out for the implementing rules to be issued soon for further details.
Author’s Profile:
Garry Pagaspas, CPA is a currently the Managing and Tax Partner of G. Pagaspas Partners & Co. CPAs (independent member firm of Allinial Global, 2nd largest accounting association worldwide based on International Accounting Bulletin’s 2023 released survey) based in Makati City with Global Outsourcing offices in Kalibo, Aklan. He is likewise the President at Tax and Accounting Center, Inc., the training and consulting company he founded in relation to his passion for teaching and helping out Ph entrepreneurs and foreign investors to Philippines.
Views in this article is personal to the author, not equivalent to a professional opinion and does not represent that of the organizations he is connected with. For your feedback or related concerns on staff leasing or employer of record in Philippines, you may send mail at info(@)taxactgcenter.ph (please exclude open and close parenthesis on the @ sign.
H. No. 4122
S. No. 2528
Republic of the Philippines
Congress of the Philippines
Metro Manila
Nineteenth Congress
Third Regular Session
Begun and held in Metro Manila, on Monday, the twenty-second day of July, two thousand twenty-four.
[Republic Act No. 12023]
AN ACT AMENDING SECTIONS 105, 108, 109, 110, 113, 114, 115, 128, 236, AND 288 AND ADDING NEW SECTIONS 108-A AND 108-B OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled;
SEC 1. Section 105 of the National Internal Revenue Code of 1997, as amended, is hereby amended to read as follows:
Sec. 105. Persons Liable. – Any person who, in the course of trade or business, sells, barters, exchanges, leases goods or properties, renders services, including digital services, and any person who imports goods shall be subject to the value-added tax imposed in Sections 106 to 108 of this Code. “The value-added tax is an indirect tax and the amount of tax may be shifted or passed on to the buyer, transferee or lessee of the goods, properties or services. This rule shall likewise apply to existing contracts of sale or lease of goods, properties or services at the time of the effectivity of Republic Act No. 7716. “The phrase ‘in the course of trade or business’ means the regular conduct or pursuit of a commercial or an economic activity, including transactions incidental thereto, by any person regardless of whether or not the person engaged therein is a nonstock, nonprofit private organization (irrespective of the disposition of its net income and whether or not it sells exclusively to members or their guests), or government entity. “The rule of regularity, to the contrary notwithstanding, services as defined in this Code rendered in the Philippines by nonresident foreign persons shall be considered as being rendered in the course of trade or business: Provided, That digital services delivered by nonresident digital service providers shall be considered performed or rendered in the Philippines if the digital services are consumed in the Philippines.”
Sec. 105. Persons Liable. – Any person who, in the course of trade or business, sells, barters, exchanges, leases goods or properties, renders services, including digital services, and any person who imports goods shall be subject to the value-added tax imposed in Sections 106 to 108 of this Code.
“The value-added tax is an indirect tax and the amount of tax may be shifted or passed on to the buyer, transferee or lessee of the goods, properties or services. This rule shall likewise apply to existing contracts of sale or lease of goods, properties or services at the time of the effectivity of Republic Act No. 7716.
“The phrase ‘in the course of trade or business’ means the regular conduct or pursuit of a commercial or an economic activity, including transactions incidental thereto, by any person regardless of whether or not the person engaged therein is a nonstock, nonprofit private organization (irrespective of the disposition of its net income and whether or not it sells exclusively to members or their guests), or government entity.
“The rule of regularity, to the contrary notwithstanding, services as defined in this Code rendered in the Philippines by nonresident foreign persons shall be considered as being rendered in the course of trade or business: Provided, That digital services delivered by nonresident digital service providers shall be considered performed or rendered in the Philippines if the digital services are consumed in the Philippines.”
SEC 2. Section 108 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows:
“Sec. 108. Value-added Tax on the Sale of Services, Including Digital Services, and the Use or Lease of Properties. – “(A) Rate and Base of Tax. – There shall be levied, assessed and collected, a value-added tax equivalent to twelve percent (12%) of the gross sales derived from the sale or exchange of services, including digital services, and the use or lease of properties. “The phrase ‘sale or exchange of services’ means the performance of all kinds of services in the Philippines for others for a fee, remuneration, or consideration, including those performed or rendered by construction and service contractors; stock, real estate, commercial, customs and immigration brokers; lessors of property, whether personal or real; warehousing services; lessors or distributors of cinematographic films; persons engaged in milling, processing, manufacturing, or repacking goods for others; proprietors, operators or keepers of hotels, motels, rest houses, pension houses, inns, resorts; proprietors or operators of restaurants, refreshment parlors, cafes and other eating places, including clubs and caterers; dealers in securities; lending investors; 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; sales of electricity by generation companies, transmission by any entity, and distribution companies, including electric cooperatives; services of franchise grantees of electric utilities, telephone and telegraph, radio and television broadcasting and all other franchise grantees except those under Section 119 of this Code, and non-life insurance companies (except their crop insurances), including surety, fidelity, indemnity and bonding companies; digital service providers,; and similar services regardless of whether or not the performance thereof calls for the exercise or use of the physical or mental faculties. The phrase ‘sale or exchange of services’ shall likewise include: “(1) x x x; “(2) x x x; “(3) x x x; “(4) x x x; “(5) x x x; “(6) x x x; “(7) The supply of digital services; “(8) The lease of motion picture films, films, tapes, and discs; and “(9) The lease or the use of or right to use radio, television, satellite transmission, and cable television time. “Lease of properties shall be subject to the tax herein imposed irrespective of the place where the contract of lease or licensing agreement was executed if the property is leased or used in the Philippines. “x x x.”
“Sec. 108. Value-added Tax on the Sale of Services, Including Digital Services, and the Use or Lease of Properties. –
“(A) Rate and Base of Tax. – There shall be levied, assessed and collected, a value-added tax equivalent to twelve percent (12%) of the gross sales derived from the sale or exchange of services, including digital services, and the use or lease of properties.
“The phrase ‘sale or exchange of services’ means the performance of all kinds of services in the Philippines for others for a fee, remuneration, or consideration, including those performed or rendered by construction and service contractors; stock, real estate, commercial, customs and immigration brokers; lessors of property, whether personal or real; warehousing services; lessors or distributors of cinematographic films; persons engaged in milling, processing, manufacturing, or repacking goods for others; proprietors, operators or keepers of hotels, motels, rest houses, pension houses, inns, resorts; proprietors or operators of restaurants, refreshment parlors, cafes and other eating places, including clubs and caterers; dealers in securities; lending investors; 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; sales of electricity by generation companies, transmission by any entity, and distribution companies, including electric cooperatives; services of franchise grantees of electric utilities, telephone and telegraph, radio and television broadcasting and all other franchise grantees except those under Section 119 of this Code, and non-life insurance companies (except their crop insurances), including surety, fidelity, indemnity and bonding companies; digital service providers,; and similar services regardless of whether or not the performance thereof calls for the exercise or use of the physical or mental faculties. The phrase ‘sale or exchange of services’ shall likewise include:
“(1) x x x;
“(2) x x x;
“(3) x x x;
“(4) x x x;
“(5) x x x;
“(6) x x x;
“(7) The supply of digital services;
“(8) The lease of motion picture films, films, tapes, and discs; and
“(9) The lease or the use of or right to use radio, television, satellite transmission, and cable television time.
“Lease of properties shall be subject to the tax herein imposed irrespective of the place where the contract of lease or licensing agreement was executed if the property is leased or used in the Philippines. “x x x.”
SEC. 3. A new section designated as Section 108-A under Chapter I, Title IV, of the National Internal Revenue Code of 1997, as amended, is hereby inserted to read as follows:
“Sec. 108-A. Liability of Persons Providing Digital Services. – The digital service provider, whether resident or nonresident, shall be liable for assessing, collecting, and remitting the value-added tax on the digital services consumed in the Philippines, subject to the provision on withholding of value-added tax on digital services under Section 114(D). “When used in this title: “(a) The term ‘digital service’ shall refer to any service that is supplied over the internet or other electronic network with the use of information technology and where the supply of the service is essentially automated. Digital service shall include: “(1) Online search engine; “(2) Online marketplace or e-marketplace; “(3) Cloud service; “(4) Online media and advertising; “(5) Online platform; or “(6) Digital goods. “(B) The term ‘digital service provider’ refers to a resident or nonresident supplier of digital services to a consumer who uses digital services subject to value-added tax in the Philippines. “(C) The term ‘nonresidential digital service provider’ means a digital service provider that has no physical presence in the Philippines.”
“Sec. 108-A. Liability of Persons Providing Digital Services. – The digital service provider, whether resident or nonresident, shall be liable for assessing, collecting, and remitting the value-added tax on the digital services consumed in the Philippines, subject to the provision on withholding of value-added tax on digital services under Section 114(D).
“When used in this title:
“(a) The term ‘digital service’ shall refer to any service that is supplied over the internet or other electronic network with the use of information technology and where the supply of the service is essentially automated. Digital service shall include:
“(1) Online search engine;
“(2) Online marketplace or e-marketplace;
“(3) Cloud service;
“(4) Online media and advertising;
“(5) Online platform; or
“(6) Digital goods.
“(B) The term ‘digital service provider’ refers to a resident or nonresident supplier of digital services to a consumer who uses digital services subject to value-added tax in the Philippines. “(C) The term ‘nonresidential digital service provider’ means a digital service provider that has no physical presence in the Philippines.”
SEC. 4. A new section designated as Section 108-B under Chapter I, Title IV, of the National Internal Revenue Code of 1997, as amended, is hereby inserted to read as follows:
“Sec. 108-B. Liability of a Nonresident Digital Service Provider to Withhold and Remit Value-Added Tax. – A nonresident digital service provider required to be registered for value-added tax (VAT) under Section 236 (F) of this Code shall be liable for the remittance of value-added tax on the digital services that are consumed in the Philippines if the consumers are non-VAT registered: Provided, That if the consumers are VAT-registered, the provision of Section 114(D) shall apply. Ïf a VAT-registered nonresident digital service provider is classified as an online marketplace or e-marketplace, it shall also be liable to remit the value-added tax on the transactions of nonresident sellers that go through its platform: Provided, That it controls key aspects of the supply and performs any of the following: “(a) It sets, either directly or indirectly, any of the terms and conditions under which the supply of goods is made; or “(b) It is involved in the ordering or delivery of goods, whether directly or indirectly.
“Sec. 108-B. Liability of a Nonresident Digital Service Provider to Withhold and Remit Value-Added Tax. – A nonresident digital service provider required to be registered for value-added tax (VAT) under Section 236 (F) of this Code shall be liable for the remittance of value-added tax on the digital services that are consumed in the Philippines if the consumers are non-VAT registered: Provided, That if the consumers are VAT-registered, the provision of Section 114(D) shall apply.
Ïf a VAT-registered nonresident digital service provider is classified as an online marketplace or e-marketplace, it shall also be liable to remit the value-added tax on the transactions of nonresident sellers that go through its platform: Provided, That it controls key aspects of the supply and performs any of the following:
“(a) It sets, either directly or indirectly, any of the terms and conditions under which the supply of goods is made; or
“(b) It is involved in the ordering or delivery of goods, whether directly or indirectly.
SEC. 5. Section 109 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows:
“Sec. 109. Except Transaction. – “The following transactions shall be exempt from the value-added tax: “(A) x x x “(B) x x x “(C) x x x “(D) x x x “(E) x x x “(F) x x x “(G) x x x “(H) Educational services, including online courses, online seminars, and online trainings, rendered by private educational institutions, duly accredited by the Department of Education (DepEd), the Commission on Higher Education (CHED), the Technical Education and Skills Development Authority (TESDA), and those rendered by government educational institutions; and sale of online subscription-based services to DepEd, CHED, TESDA, and educational institutions recognized by said government agencies; “(I) x x x “(J) x x x “(K) x x x “(L) x x x “(M) x x x “(N) x x x “(O) x x x “(P) x x x “(Q) x x x “(R) x x x “(S) x x x “(T) x x x “(U) x x x “(V) Services of bank, non-bank financial intermediaries performing quasi-banking functions, and other non-bank financial intermediaries, including those rendered through different digital platforms; “(W) x x x “(X) x x x “(Y) x x x “(Z) x x x “(AA) x x x “(BB) x x x “(CC) x x x.”
“Sec. 109. Except Transaction. –
“The following transactions shall be exempt from the value-added tax:
“(A) x x x
“(B) x x x
“(C) x x x
“(D) x x x
“(E) x x x
“(F) x x x
“(G) x x x
“(H) Educational services, including online courses, online seminars, and online trainings, rendered by private educational institutions, duly accredited by the Department of Education (DepEd), the Commission on Higher Education (CHED), the Technical Education and Skills Development Authority (TESDA), and those rendered by government educational institutions; and sale of online subscription-based services to DepEd, CHED, TESDA, and educational institutions recognized by said government agencies;
“(I) x x x
“(J) x x x
“(K) x x x
“(L) x x x
“(M) x x x
“(N) x x x
“(O) x x x
“(P) x x x
“(Q) x x x
“(R) x x x
“(S) x x x
“(T) x x x
“(U) x x x
“(V) Services of bank, non-bank financial intermediaries performing quasi-banking functions, and other non-bank financial intermediaries, including those rendered through different digital platforms;
“(W) x x x
“(X) x x x
“(Y) x x x
“(Z) x x x
“(AA) x x x
“(BB) x x x
“(CC) x x x.”
SEC. 6. Section 110 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows:
Sec. 110. Tax Credits. – “(A) Creditable Input Tax. – “(1) x x x “(2) The input tax on domestic purchase or importation of goods or properties by a VAT-registered person shall be creditable: “(a) To the purchaser upon consummation of sale and on importation of goods or properties; and “(b) To the importer upon payment of the value-added tax prior to the release of the goods from the custody of the Bureau of Customs. “Provided, That the input tax on goods purchased or imported in a calendar month for use in trade or business for which deduction for depreciation is allowed under this Code shall be spread evenly over the month of acquisition and the fifty-nine(59) succeeding months if the aggregate acquisition cost for such goods, excluding the VAT component thereof, exceeds One million pesos (P1,000,000): Provided, however, That if the estimated useful life of the capital good is less than five (5) years, as used for depreciation purposes, then the input VAT shall be spread over such a shorter period: Provided, further, That the amortization of the input VAT shall be allowed until December 31, 2021 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, finally, That in the case of purchase of services, lease r use of properties, the input tax shall be creditable to the purchaser, lessee or licensee upon payment of the compensation, rental, royalty or fee. “Notwithstanding the foregoing, nonresident digital service providers shall not be allowed to claim creditable input tax. “x x x.”
Sec. 110. Tax Credits. –
“(A) Creditable Input Tax. –
“(1) x x x
“(2) The input tax on domestic purchase or importation of goods or properties by a VAT-registered person shall be creditable:
“(a) To the purchaser upon consummation of sale and on importation of goods or properties; and
“(b) To the importer upon payment of the value-added tax prior to the release of the goods from the custody of the Bureau of Customs.
“Provided, That the input tax on goods purchased or imported in a calendar month for use in trade or business for which deduction for depreciation is allowed under this Code shall be spread evenly over the month of acquisition and the fifty-nine(59) succeeding months if the aggregate acquisition cost for such goods, excluding the VAT component thereof, exceeds One million pesos (P1,000,000): Provided, however, That if the estimated useful life of the capital good is less than five (5) years, as used for depreciation purposes, then the input VAT shall be spread over such a shorter period: Provided, further, That the amortization of the input VAT shall be allowed until December 31, 2021 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, finally, That in the case of purchase of services, lease r use of properties, the input tax shall be creditable to the purchaser, lessee or licensee upon payment of the compensation, rental, royalty or fee.
“Notwithstanding the foregoing, nonresident digital service providers shall not be allowed to claim creditable input tax.
“x x x.”
SEC. 7. Section 113 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows:
“Sec. 113. Invoicing and Accounting Requirements for VAT-Registered Persons. – “(A) Invoicing Requirement. – A VAT-registered person shall issue a VAT invoice for every sale, barter, exchange, or lease of goods or properties, and for every sale, barter, or exchange of services: Provided, That a digital sales or commercial invoice shall be issued for every sale, barter, or exchange of digital services made by a VAT-registered nonresident digital service provider. “(B) Information Contained in the VAT Invoice. – x x x “(1) x x x “(2) x x x “(3) x x x “(4) x x x “(5) The digital sales or commercial invoice issued by a VAT-registered nonresident digital service provider shall indicate the following information in lieu of the requirements under Section 113, Subsection (b), paragraph 1 to 4: “(a) Date of the transaction; “(b) Transaction reference number; “(c) Identification of the customer “(d) Brief description of the transaction; and “(e) The total amount with the indication that such amount includes the value-added tax: “Provided, That if the sale of digital services includes some services which are subject to VAT, and some that are VAT zero-rated, or VAT-exempt, the invoice shall clearly indicate the breakdown of the sale price by its taxable, VAT-exempt, and VAT zero-rated components: Provided, further, That the calculation of the value-added tax on each portion of the sale shall be shown on the invoice. “(C) Accounting Requirements – Notwithstanding the provisions of Section 233, all persons subject to the value-added tax under Section 106 and 108 shall, in addition to the regular accounting records required, maintain a subsidiary sales journal and subsidiary purchase journal on which the daily sales and purchases are recorded. The subsidiary journals shall contain such information as may be required by the Secretary of Finance: Provided, That this subsection shall not apply to VAT-registered nonresident digital service providers. “(D) x x x “(E) x x x
“Sec. 113. Invoicing and Accounting Requirements for VAT-Registered Persons. –
“(A) Invoicing Requirement. – A VAT-registered person shall issue a VAT invoice for every sale, barter, exchange, or lease of goods or properties, and for every sale, barter, or exchange of services: Provided, That a digital sales or commercial invoice shall be issued for every sale, barter, or exchange of digital services made by a VAT-registered nonresident digital service provider.
“(B) Information Contained in the VAT Invoice. – x x x
“(2) x x x
“(3) x x x
“(4) x x x
“(5) The digital sales or commercial invoice issued by a VAT-registered nonresident digital service provider shall indicate the following information in lieu of the requirements under Section 113, Subsection (b), paragraph 1 to 4:
“(a) Date of the transaction;
“(b) Transaction reference number;
“(c) Identification of the customer
“(d) Brief description of the transaction; and
“(e) The total amount with the indication that such amount includes the value-added tax:
“Provided, That if the sale of digital services includes some services which are subject to VAT, and some that are VAT zero-rated, or VAT-exempt, the invoice shall clearly indicate the breakdown of the sale price by its taxable, VAT-exempt, and VAT zero-rated components: Provided, further, That the calculation of the value-added tax on each portion of the sale shall be shown on the invoice.
“(C) Accounting Requirements – Notwithstanding the provisions of Section 233, all persons subject to the value-added tax under Section 106 and 108 shall, in addition to the regular accounting records required, maintain a subsidiary sales journal and subsidiary purchase journal on which the daily sales and purchases are recorded. The subsidiary journals shall contain such information as may be required by the Secretary of Finance: Provided, That this subsection shall not apply to VAT-registered nonresident digital service providers.
SEC. 8. Section 114 of the National Internal Revenue Code of the 1997, as amended, is hereby further amended to read as follows:
“Sec. 114. Return and Payment of Value-Added Tax. – “(A) In General. – x x x “(B) Where to Fil the Return and Pay the Tax. – x x x “(C) Withholding of Value-Added Tax. – The Government or any of its political subdivisions, instrumentalities or agencies, including government-owned or –controlled corporations (GOCCs) shall, before making payment on account of each purchase of goods and services which are subject to the value-added tax imposed in Sections 106 and 108 of this Code, deduct and withhold a final value-added tax at the rate of five percent (5%) of the gross payment thereof: Provided, That beginning January 1, 2021, the VAT withholding system under this subsection shall shift from final to a creditable system: Provided, further, That the payment for lease or use of properties or property rights to nonresident owners and payments for services to nonresident suppliers who are not registered under Section 236 shall be subject to twelve percent (12%) withholding tax at the time of payment: Provided, finally, That payments for purchases of goods and services arising from projects funded by Official Development Assistance (ODA) as defined under Republic Act No. 8182, otherwise known as the ‘Official Development Assistance Act of 1996” as amended, shall not be subject to the final withholding tax system as imposed in this subsection. For purposes of this section, the payor or person in control of the payment shall be considered as the withholding agent. “(D) Reverse Charge Mechanism in Digital Services. – A VAT-registered taxpayer shall be liable to withhold and remit the value-added tax due on its purchase of digital services consumed in the Philippines from nonresident digital service providers to the Bureau of Internal Revenue, within (10) days following the end of the month the withholding was made.”
“Sec. 114. Return and Payment of Value-Added Tax. –
“(A) In General. – x x x
“(B) Where to Fil the Return and Pay the Tax. – x x x
“(C) Withholding of Value-Added Tax. – The Government or any of its political subdivisions, instrumentalities or agencies, including government-owned or –controlled corporations (GOCCs) shall, before making payment on account of each purchase of goods and services which are subject to the value-added tax imposed in Sections 106 and 108 of this Code, deduct and withhold a final value-added tax at the rate of five percent (5%) of the gross payment thereof: Provided, That beginning January 1, 2021, the VAT withholding system under this subsection shall shift from final to a creditable system: Provided, further, That the payment for lease or use of properties or property rights to nonresident owners and payments for services to nonresident suppliers who are not registered under Section 236 shall be subject to twelve percent (12%) withholding tax at the time of payment: Provided, finally, That payments for purchases of goods and services arising from projects funded by Official Development Assistance (ODA) as defined under Republic Act No. 8182, otherwise known as the ‘Official Development Assistance Act of 1996” as amended, shall not be subject to the final withholding tax system as imposed in this subsection. For purposes of this section, the payor or person in control of the payment shall be considered as the withholding agent.
“(D) Reverse Charge Mechanism in Digital Services. – A VAT-registered taxpayer shall be liable to withhold and remit the value-added tax due on its purchase of digital services consumed in the Philippines from nonresident digital service providers to the Bureau of Internal Revenue, within (10) days following the end of the month the withholding was made.”
SEC. 9. Section 115 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows:
“Sec. 115. Power of the Commissioner to Suspend the Business Operations of a Taxpayer. – x x x “(a) x x x – “(1) x x x “(2) x x x “(3) x x x “(b) Failure of any Person to Register as Required under Section 236. “The temporary closure of the establishment shall be for the duration of not less than five (5) days and shall be lifted only upon compliance with whatever requirements prescribed by the Commissioner in the closure order, “The power of the Commissioner to suspend shall include the blocking of digital services performed or rendered in the Philippines by a digital service provider. This shall be implemented by the Department of Information and Communications Technology (DICT), through the National Telecommunications Commission (NTC).”
“Sec. 115. Power of the Commissioner to Suspend the Business Operations of a Taxpayer. – x x x
“(a) x x x –
“(b) Failure of any Person to Register as Required under Section 236.
“The temporary closure of the establishment shall be for the duration of not less than five (5) days and shall be lifted only upon compliance with whatever requirements prescribed by the Commissioner in the closure order,
“The power of the Commissioner to suspend shall include the blocking of digital services performed or rendered in the Philippines by a digital service provider. This shall be implemented by the Department of Information and Communications Technology (DICT), through the National Telecommunications Commission (NTC).”
SEC. 10. Section 128 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows:
“Sec. 128. Returns and Payment of Percentage Taxes. – “(A) Returns of Gross Sales or Earnings and Payment of Tax. – “(1) Persons Liable to Pay Percentage Taxes. – Every person subject to the percentage taxes imposed under this Title shall file, either electronically or manually, a quarterly return of the amount of the person’s gross sales or earnings and pay, either electronically or manually, to any authorized agent bank, Revenue District Office through Revenue Collection Officer or authorized tax software provider, the tax due thereon within twenty-five (25) days after the end of each taxable quarter: Provided, That the Secretary of Finance may, upon the recommendation of the Commissioner, require the withholding of percentage taxes imposed under this Title: Provided, further, That in the case of a person whose VAT registration is cancelled and who becomes liable to the tax imposed in Section 116 of this Code, the tax shall accrue from the date of cancellation and shall be paid in accordance with the provisions of this section. “(2) Person Retiring from Business. – Any person retiring from a business subject to percentage tax shall notify the nearest internal revenue officer, file, either electronically or manually, the person’s return and pay, either electronically or manually the tax due thereon within twenty (20) days after closing the business. “(3) Determination of Correct Sales. – When it is found that a person has failed to issue invoices, or when no return is filed, or when there is reason to believe that the books of accounts or other records do not correctly reflect the declarations made or to be made in a return required to be filed under the provisions of this Code, the Commissioner, after taking into account the sales or other taxable base of other persons engaged in similar businesses under similar situations or circumstances, or after considering other relevant information, may prescribe a minimum amount of such gross sales and taxable base and such amount so prescribed shall be prima facie correct for purposes of determining the internal revenue tax liabilities of such person. “(B) Where to File. – x x x”
“Sec. 128. Returns and Payment of Percentage Taxes. –
“(A) Returns of Gross Sales or Earnings and Payment of Tax. –
“(1) Persons Liable to Pay Percentage Taxes. – Every person subject to the percentage taxes imposed under this Title shall file, either electronically or manually, a quarterly return of the amount of the person’s gross sales or earnings and pay, either electronically or manually, to any authorized agent bank, Revenue District Office through Revenue Collection Officer or authorized tax software provider, the tax due thereon within twenty-five (25) days after the end of each taxable quarter: Provided, That the Secretary of Finance may, upon the recommendation of the Commissioner, require the withholding of percentage taxes imposed under this Title: Provided, further, That in the case of a person whose VAT registration is cancelled and who becomes liable to the tax imposed in Section 116 of this Code, the tax shall accrue from the date of cancellation and shall be paid in accordance with the provisions of this section.
“(2) Person Retiring from Business. – Any person retiring from a business subject to percentage tax shall notify the nearest internal revenue officer, file, either electronically or manually, the person’s return and pay, either electronically or manually the tax due thereon within twenty (20) days after closing the business.
“(3) Determination of Correct Sales. – When it is found that a person has failed to issue invoices, or when no return is filed, or when there is reason to believe that the books of accounts or other records do not correctly reflect the declarations made or to be made in a return required to be filed under the provisions of this Code, the Commissioner, after taking into account the sales or other taxable base of other persons engaged in similar businesses under similar situations or circumstances, or after considering other relevant information, may prescribe a minimum amount of such gross sales and taxable base and such amount so prescribed shall be prima facie correct for purposes of determining the internal revenue tax liabilities of such person.
“(B) Where to File. – x x x”
SEC. 11. Section 236 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows:
Sec. 236. Registration Requirements. – “(A) x x x “(B) x x x “(C) x x x “(D) x x x “(E) x x x “(F) Persons Required to Register for Value-Added Tax. – “(1) Any person who, in the course of trade or business, sells, barters, exchanges, or leases goods or properties, including those digital in nature, any person who renders services, including digital services, or engages in the sale or exchange of services, shall be liable to register, either electronically or manually, for value-added tax if: “(a) The person’s gross sales for the past twelve (12) months, other than those that are exempt under Section 109 (A) to (CC), have exceeded the threshold as provided in Section 109 (CC); or “(b) There are reasonable grounds to believe that the gross sales for the next twelve (12) months, other than those that are exempt under Section 109 (A) to (CC), will exceed the threshold as provided in Section 109 (CC): “Provided, That the BIR shall establish a simplified automated registration system for nonresident digital service providers, which shall be prescribed by the Secretary of Finance, upon the recommendation of the Commissioner. “x x x.”
Sec. 236. Registration Requirements. –
“(F) Persons Required to Register for Value-Added Tax. –
“(1) Any person who, in the course of trade or business, sells, barters, exchanges, or leases goods or properties, including those digital in nature, any person who renders services, including digital services, or engages in the sale or exchange of services, shall be liable to register, either electronically or manually, for value-added tax if:
“(a) The person’s gross sales for the past twelve (12) months, other than those that are exempt under Section 109 (A) to (CC), have exceeded the threshold as provided in Section 109 (CC); or
“(b) There are reasonable grounds to believe that the gross sales for the next twelve (12) months, other than those that are exempt under Section 109 (A) to (CC), will exceed the threshold as provided in Section 109 (CC):
“Provided, That the BIR shall establish a simplified automated registration system for nonresident digital service providers, which shall be prescribed by the Secretary of Finance, upon the recommendation of the Commissioner.
SEC. 12. Section 288 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows:
“Sec. 288. Disposition of Incremental Revenues. – x x x “(H) Incremental Revenues from the Value-added Tax on Digital Service Providers. – Five percent (5%) of the incremental revenue from the value-added tax on digital service providers under Section 108 shall be allocated to and used exclusively for the development of creative industries, as defined under Republic Act No. 11904, otherwise known as the “Philippine Creative Industries Development Act,” for five (5) years from the effectivity of this Act “Upon the lapse of the five (5) year period, all such incremental revenues shall accrue to the General Fund.”
“Sec. 288. Disposition of Incremental Revenues. – x x x
“(H) Incremental Revenues from the Value-added Tax on Digital Service Providers. – Five percent (5%) of the incremental revenue from the value-added tax on digital service providers under Section 108 shall be allocated to and used exclusively for the development of creative industries, as defined under Republic Act No. 11904, otherwise known as the “Philippine Creative Industries Development Act,” for five (5) years from the effectivity of this Act
“Upon the lapse of the five (5) year period, all such incremental revenues shall accrue to the General Fund.”
SEC. 13. Mode of Correspondence. – Any communication, notice, or summons to a nonresident digital service provider can be made via electronic mail messaging.
SEC. 14. Transitory Clause. – Nonresident digital service providers shall immediately be subject to value-added tax under this Act after one hundred twenty (120) days from the effectivity of the implementing rules and regulations.
SEC. 15. Implementing Rules and Regulations. – The Department of Finance (DOF), upon the recommendation of the BIR, and in coordination with the DICT and the NTC, and upon consultation with the stakeholders, shall issue rules and regulation for the effective implementation of this Act not later than ninety (90) days from the effectivity of this Act.
SEC. 16. Separability Clause. – Should any provision of this Act or any part thereof be declared invalid, the other provisions, so far as they are separable from the invalid ones, shall remain in force and effect.
SEC. 17. Repealing Clause. – All laws, decrees, orders, and issuances, or portions thereof, which are inconsistent with the provisions of this Act, are hereby repealed, amended, or modified accordingly.
Approved,
FRANCIS “CHIZ” G. ESCUDERO FERDINAND MARTIN G. ROMUALDEZ
President of the Senate Speaker of the House of Representatives
This Act, which is a consolidation of House Bill No. 4122 and Senate Bill No. 2528, was passed by the House of Representatives and the Senate of the Philippines on July 30, 2024, and July 29, 2024, respectively.
RENATO N. BANTUC JR. REGINALD S. VELASCO
Secretary of the Senate Secretary General, House of Representatives
Approved: October 02, 2024
Clarification on the Types of Checks Accepted for Payment for One-Time Transaction-Related Internal Revenue Taxes
This Circular is hereby issued to clarify the types of checks accepted in payment for One-Time Transaction (ONETT) – related internal revenue taxes, pursuant to Revenue Memorandum Order (RMO) No. 49-2018, as amended.
Section II of Revenue Memorandum Circular No. (RMC) No. 4- 2021 provides guidelines for payments of taxes through Authorized Revenue Collection Officers (RCOs), citing RMO No. 8-2009 as follows:
“4. The Issuance of RORs shall be limited to tax payments, in cash not exceeding the amount of twenty thousand pesos (Php 20,000.00) per return. However, there shall be no limit on the amount if payment is made thru checks.The following checks should be accepted in payment for internal revenue taxes:1. Manager’s or Cashier’s Checks;2. Checks drawn against a joint or multiple account for the purpose of tax payment of the personal tax liability of any of the members thereof provided that the name and TIN of the paying member/s shall be indicated on the back/face of the check;3. Checks drawn against the personal account of the owner of a single proprietorship in payment of the tax liability of his/her business;4. Checks drawn against the account of a single proprietorship in payment of the tax liability of the owner provided that the name and TIN of the owner are indicated at the face/back of the check;5. Checks issued by either of the spouses to pay their income tax liabilities.”
In relation thereto, this Office clarifies that for ONETT-related taxes, taxpayers may make payments over the counter using either cash or check at any Authorized Agents Banks (AABs) or RCOs. However, RCOs, can only accept cash payments up to twenty thousand pesos (P20,000.00). For payments by check, both AABs and RCOs are directed to accept only Manager’s or Cashier’s Check regardless of the amount to standardize the requirements and expedite the verification processes.
Prescribing Policies and Guidelines in the Mandatory Registrations of Persons Engaged in Business and Administrative Sanctions and Criminal Liabilities for Non-Registration
Section 1 Scope – Pursuant to the provisions of Sections 244 and 245 of the National Internal Revenue Code of 1997, as amended (Tax Code), these Regulations are hereby promulgated to prescribe guidelines, procedures, and requirements for the implementation of the mandatory registration of persons engaged in business, including brick-and-mortar stores and online trade or business pursuant to Sections 236(A) of the Tax Code and Republic Act No. 11967, otherwise known as the Internet Transactions Act of 2023.
Section 2 Background – Section 236(A) of the Tax Code, provides that every person subject to any internal revenue tax shall register once, either electronically or manually, with the Bureau of Internal Revenue (BIR):
Consequently, any person who is engaged in any trade or business in the Philippines and fails to register the same with the BIR shall be administratively and criminally liable for fines and penalties. Also, any person who willfully aid or abets in the commission of a crime penalized under the Tax Code or who causes the commission of any such offense by another shall be liable in the same manner as the principal pursuant to section 253 (b) of the Tax Code.
In case of associations, partnerships or corporations, the penalty shall be imposed on the partner, president, general manager, branch manager, treasurer, officer-in-charge, and employees responsible for the violation.
In addition, it has been observed that there have been proliferation of online businesses and activities in the Philippines. Hence, the Internet Transactions Act of 2023 was issued, which provides that in order to build trust in e-commerce and to protect and uphold the interest of consumers at all times, persons engaged in online trade or business shall observe and comply with the policies, laws and regulations in the countries where their goods and services are marketed, which necessarily includes, the registration of online trade or business with the BIR, filing of proper tax returns and payment or applicable internal revenue taxes.
Section 3 Coverage – These Regulations shall cover persons, whether natural or juridical, who are engaged in the following trade or business in the Philippines:
Section 4. Definition of Terms – In applying the provisions of these Regulations, the following terms shall be defined as follows:
Section 5. Registration – All persons covered by these Regulations shall register with the BIR following the guidelines set forth under the Tax Code and relevant revenue issuances. Failure to register shall be subject to administrative penalties and criminal liabilities provided hereunder. The following guidelines shall be adhered to:
Section 6. Posting of Certificate of Registration – All registered persons covered by these Regulations shall post or exhibit their original Certificate of Registration (COR)/Electronic Certificate of Registration (eCOR) at the place where the business is conducted and at each branch and/or facility in a way that is clearly and easily visible to the public. In case of a peddler or other persons not having a fixed place of business, the COR/eCOR shall be kept in the possession of the holder thereof at the place of the residence or at the head office’s address, if applicable, subject to production upon demand of any internal revenue officer.
Section 7. Posting of Proof Registration on Online Websites, E-Commerce or E-Marketplace Seller/Merchant’s Page and other Platforms. – All covered persons operating a business through a website, social media or any digital or electronic means, shall display conspicuously the electronic copy of the BIR COR/eCOR on their website, webpage, account, page, platform or application. The displayed proof of registration shall be (at all times) easily accessible and visible to buyers or customers visiting the seller or lessor’s webpage, account, page, platform or application.
Section 8. Suspension of Business Operations – The CIR or his/her duly authorized representative shall, upon verification that any covered person doing business in the Philippines but fails to register as required under these Regulations, has the authority to issue a Closure/Take Down Order to close the business operations of such covered persons engaged in business.
The closure of business operations under a duly approved Closure/Take Down Order shall not preclude the BIR from filing the appropriate charges, if evidence so warrants, against the person concerned, or in the case of corporate taxpayers, against the responsible officers of the corporation, under the Run After Tax Evaders (RATE) Program of the BIR.
Section 9. Duration of Closure/Take Down Order. – The Closure/Take Down Order shall not be less than five (5) days and shall be lifted only upon compliance with the requirements stated in Section 5 of these Regulations and as may be further prescribed by the CIR or his/her authorized representative/s in the Closure/Take Down Order.
Section 10. Lifting of the Closure/Take Down Order – The Closure/Take Down Order shall only be lifted if the BIR has validated that the violation/s stated in the Closure/Take Down Order have been rectified and the person has complied with all the requirements stated in Section 5 of these Regulations and as may be further prescribed by the CIR or his/her duly authorized representative/s following the procedure under the existing laws, rules and regulations.
Section 11. Responsibility of Lessors, Digital Platforms, including E-marketplaces. – Lessors, sub-lessors of commercial establishments/buildings/space, and operators of digital platform, including e-marketplace platforms, shall ensure that all their respective lessees and online sellers or merchants are duly registered with the BIR, with Taxpayer Identification Number, and duly compliant with the invoicing requirements and in accordance with Sections 236, 237 and 238 of the Tax Code.
Failure to enact, strictly enforce internal mechanisms or rules to prohibit lessees and online sellers or merchants without the required BIR COR/eCOR from further selling, posting, listing or offering goods, and/or services in their respective Brick-and-Mortar Stores, website, webpage, account, application, and digital platforms, including e-marketplaces, shall be constructed as an act of aiding or abetting in the offense.
The owners or sub-lessors of commercial establishments/building/spaces shall continue to submit its existing reportorial requirements under existing Revenue Regulations. Digital platforms, including e-marketplaces, shall submit any required information upon request from the CIR or his/her duly authorized representative.
Section 12. Reportorial Requirements – Reports on all Closure/Take Down Orders issued and/or executed and the lifting of Closure/Take Down Orders shall be submitted by all implementing offices of the Bureau on a regular basis to the CIR, or his/her duly authorized representative.
Section 13. Penalty – Any person found violating Section 236(A) in relation to the enumerated provisions of the Tax Code shall be liable as follows:
Section 14. Separability Clause – If any provision of these Regulations is declared invalid by a competent court, the remainder of these Regulations or any provisions not affected by such declaration of invalidity shall remain in force and effect.
Section 15. Repealing Clause – The provisions of any regulations, rulings or orders, or portions thereof which are inconsistent with the provisions of these Regulations are hereby revoked, repealed or amended accordingly.
Section 16. Effectivity Clause – These Regulations shall take effect fifteen (15) days after publication in the Official Gazette, Bureau’s official website or in any newspaper of general circulation, whichever comes earlier.
Clarification on Registration Procedures Pursuant to Revenue Regulations No. 7-2024, as amended by Revenue Regulations No. 11-2024
With the passage of Republic Act (RA) No. 11976, otherwise known as the “Ease of Paying Taxes (EOPT) Act”. this Circular is hereby issued to clarify (thru Question and Answer) registration-related procedures provided under Revenue Regulations (RR) No. 7-2024, as amended by RR No. 11-2024, in relation to RA No. 11976 or the EOPT Act.
New Sets of manual Books of Accounts are not required to be registered every year. However, taxpayers may have the option to use new sets of manual Books of Accounts yearly, which should be registered prior to its use.
Individual taxpayers not engaged in business (non-business) may file their application for transfer online through ORUS or manually at the new RDO having jurisdiction over the place of residence where they will transfer. However, if the said non-business taxpayer will subsequently apply for business registration, such application shall be files directly at the RDO having jurisdiction over the business address where his/her registration records will be transferred by the said RDO as well.
Taxpayers engaged in business who will request for transfer of registration shall file it at the current RDO where the taxpayer is registered. All open-cases/stop-filer cases shall be settled at the new RDO by submitting a Transfer Commitment Form, except for those who are subject to audit investigations. Thus, taxpayers with open-cases/stop-filer cases who are not subject to audit investigations shall be transferred to the new RDO within the prescribed period, together with the open-cases/stop-filer cases.
Transfer of registration of non-business taxpayers and those that are transferring business address within the same RDO shall be transferred immediately upon filing of application with complete documentary requirements.
Transfer of registration of business taxpayers to another RDO shall be done within five (5) days, for branches and facilities, and within ten (10) days, for head office.
However, this shall not preclude the Commissioner of Internal Revenue or his authorized representative from conducting audit in order to determine the tax liability of taxpayer as of closure of his/her/its business operations. Said tax liability needs to be settled prior to the issuance of tax clearance for business closure.
Live Webinar 1 & 2: BIR Tax Compliance for VAT Entity
Live Webinar: Value Added Tax: In and Out
Live Webinar: Returns and Reports Preparation under eBIR Forms and Online Submissions
Onsite Training: PEZA Registered Entities: Taxation and Basic Reports
Live Webinar on Ph Payroll Computations and Taxation
Live Webinar: Withholding Taxes, Subjects & Applications
Onsite Training: Basic Bookkeeping for Non-Accountants
Onsite Seminar: BIR Examination: Their Procedures and Our Defenses
Live Webinar: Winning BIR Tax Assessments Series: Process, Remedies & Writing Effective Protest
Onsite Training: Basic Business Accounting & BIR Compliance VAT Entity
Revenue Memorandum Circular No. 34-2025
Revenue Memorandum Circular No. 32-2025
Republic Act No. 12079
2025 Filing of Annual Financial Statements and General Information Sheet
Revenue Regulations No. 012-2025
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