Electronic Alphalist of Employees and Payees in Philippines

By: Garry S. Pagaspas

In another effort to enhance tax compliance in the Philippines, the Bureau of Internal Revenue (BIR) issued Revenue Regulations No. 1-2014 dated December 17, 2013 on submission of alphabetical list or alphalist of employees and list of payees on income payments subject to withholding taxes in the Philippines.

Amendment to Revenue Regulations No. 2-98

Revenue Regulations No. 1-2014 (RR No. 1-2014) was issued to amend Revenue Regulations No. 2-98, as last amended by Revenue Regulations No. 10-2008 on submission of alphabetical list or alphalist of employees and list of payees on income payments subject to withholding taxes in the Philippines. Specifically, RR No. 1-2014 amended Section 2.83.3 of Revenue Regulations No. 2-98 on requirements for the list of payees.

Mandatory Electronic Submission 

Under RR No. 1-2014, all withholding agents (regardless of the number of employees and payees, and whether employees or payees are exempt or not) are required to attach an alphabetical list or alphalist as an integral part of the following tax returns

• BIR Form No. 1604-CF or annual information return on compensation and final withholding taxes;
• BIR Form No. 1604-E or annual information return on expanded withholding tax;
• BIR Form No. 1601-E or monthly remittance return on expanded withholding tax;
• BIR Form No. 1601-C or monthly remittance return on withholding tax on compensation;
• BIR Form No. 1601-F or monthly remittance return on final withholding tax

Submission of alphalist of employees or alphalist of payees in the Philippines shall be made under the following modes:

• As an attachment in the electronic filing and payment system (EFPS)
• Through electronic submission using the BIR website address at es*********@*****ov.ph, and
• Through electronic mail (email) at dedicated BIR address using prescribed CSV data file format, the details of which shall be issued in separate revenue issuance.

In case the taxpayer does not have own internet facility or unavailability of commercial establishments with internet connection within the location, the taxpayer may make use of the electronic mail through the e-lounge of the BIR.

Mandatory requirement for tax expense deduction

Submission of alphalist of employees and alphalist of payees in the Philippines that does not conform with the prescribed format resulting to the unsuccessful uploading into the BIR system shall be deemed as not received and shall not qualify as a deductible expense for income tax purposes. Submission of alphalist with income payments lumped into one single amount such as “various employees”, “various payees”,  “PCD payees”, or “Others” are not allowed and deemed as non-compliance.

Effectivity of electronic submission in the Philippines

Manual submission of alphabetical list with less than 10 payees or employees under Revenue Regulations No. 2-98, as amended by Revenue regulations No. 10-2008 for annual information returns or BIR Form No. 1604-CF and BIR Form No. 1604-E shall be discontinued beginning January 31, 2014 and March 1, 2014, respectively, and every year thereafter. RR No. 1-2014 is to take effect within fifteen (15) days from publication. It was published last January 13, 2014 with Manila bulletin.

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, financial statements audit, and other related professional accounting services. He is presently a frequent speaker of Tax and Accounting Center, Inc. and you may send him mail at garry.pagaspas(@)taxacctgcenter.org.

Disclaimer: This article is for general conceptual guidance only and is not a substitute for an expert opinion. Please consult your preferred tax and/or legal consultant for the specific details applicable to your circumstances. For comments, you may also please send mail at info(@)taxacctgcenter.org, or you may post a question at Tax and Accounting Center Forum and participate therein.