How to File BIR Form 1709?

By: Hergie Ann De Guzman, CPA

With the release of the Revenue Regulations No. 19-2020, prescribing the use of the BIR Form 1709 or the Information Return on Transactions with Related Party, taxpayers are now faced with an additional report to their list of annual compliance requirements.

To guide you with the filing of the said return, we have summarized below the details needed which may help you with filling-out the return.

How to File?

The following details are needed in filing the BIR Form 1709:

  1. Accounting Year-end (Calendar or Fiscal)
  2. Year ended – the reporting year (e.g. 2020)
  3. Number of Sheets Attached – number of pages of the attachments
  • Part I – Background Information
    • Tax Identification Number (TIN)
    • RDO Code
    • Taxpayer’s Name
    • Registered Address
    • Contact Number
    • Email Address
  • Part II – Summary of Related Party Transactions

A. Foreign Related Party Transactions

ParticularsRemarks Required Attachments
Nature of Transaction/
Related Account Name		This may include, but not limited to the following:
a. purchases or sales of goods (finished or unfinished); 
b. purchases or sales of property and other assets;
c. rendering or receiving of services;
d. leases;
e. transfers of research and development;
f. transfers under license agreements;
g. transfers under finance arrangements (including loans and equity contributions in cash or in kind);
h. provision of guarantees or collateral;
i. commitments to do something if a particular event occurs or does not occur in the future, including executory contracts; and,
j. settlement of liabilities on behalf of the entity or by the entity on behalf of that related party.		Transfer Pricing Documentation (TPD)
Foreign Related PartyName of the related party-same
AddressAddress of the related party-same
TINTIN of the related party-same
Availed of the Treaty Benefits?Select “Yes” if treaty benefits are availed, otherwise, select “No”.-same
Applicable Treaty RateIf you answered “Yes” in the above, indicate the treaty rate availed.-same
Amount of Income/ExpenseAmount of Income/Expense earned or incurred under the related party transaction-same
Tax Withheld on Income Payments to Related PartyAmount of tax withheld by the taxpayer in the income of the related partyWithholding tax returns and proofs of payment of taxes withheld
Tax Withheld by the Related PartyAmount of tax withheld by the related party in the taxpayer’s incomeProof of payment of foreign taxes or ruling issued by the authority of the foreign related party 

B. Domestic Related Party Transaction

Particulars Remarks Required Attachments
Nature of Transaction/Related Account Name*Same as above mentioned transactionsCTCs of the contracts and/or proof of transaction

TPD
Domestic Related PartyName of the related party-same
AddressAddress of the related party-same
TINTIN of the related party-same
Amount of Income/ExpenseAmount of Income/Expense earned or incurred under the related party transaction-same
Tax Withheld on Income Payments to Related PartyAmount of tax withheld by the taxpayer in the income of the related partyWithholding tax returns and proofs of payment of taxes withheld
Tax Withheld by the Related PartyAmount of tax withheld by the related party in the taxpayer’s incomeWithholding tax returns and proofs of payment of taxes withheld

  • Part III – Details of Related Party Transactions per Category

This portion provides the detail of the related party transactions based on the category of whom the taxpayer has transacted.  These are applicable for entities with:

a. Parent

b. Entities with Joint Control or Significant Influence over the Entity

c. Entities with Subsidiaries

d. Entities with Associates

e. Entities with Joint Ventures in which the Entity is a Joint Venturer

f. Other Related Parties

ParticularsRemarksRequired Attachments

Name of Company
Name of the related partyn/a
AddressAddress of related partyn/a
Nature of Transaction*Same as above mentioned transactions



CTCs of the contracts and/or proof of transaction
TPD
Amount/VolumeAmount/volume of transaction-same
Outstanding BalanceBalance as of reporting period, if payment was made on installment basis-same
TermsTerms of contract/agreement (e.g. interest or non-interest bearing)-same
ConditionsConditions of contract/agreement (e.g. secured or unsecured)-same
Provisions for Doubtful AccountsAmount of the Doubtful Accounts in relation to the outstanding balancen/a
Expense RecognizedAmount of expense recognized during the period in relation to the Doubtful Accountsn/a

g. With Key Management Personnel of the Entity or its Parent

Persons having authority and responsibility for planning, directing and controlling activities 

ParticularsRemarksRequired Attachments
Name of PersonnePersonnel transacted withn/a
AddressAddress of the related partyn/a
Short-term Employee Benefitsn/a
Post-employment BenefitsAmount of post-employment benefits (e.g. pension) received by the key personneln/a
Other Long-term BenefitsAmount of other long term benefits received by the key personneln/a
Termination BenefitsAmount received upon voluntary or involuntary termination of employmentn/a
Share-based PaymentsAmount received as compensation in the form of shares of stocksn/a
OthersOther payments received by the key personneln/a

  • Part IV-Other Information
ParticularsRemarksRequired Attachments
Business Overview of the ultimate parent compan



a.Profile of the multinational group in which the taxpayers belong
b. Name, address, legal status and country of tax residence of each related parties
c. Ownership 		n/a
Functional Profile of the taxpayera. Description of business of taxpayer
b. Description of business of the related parties
c. Industry		n/a
Change in the functional profile of the taxpayerIf there is change, you need to provide details.n/a
Change in the ownership structure of the taxpayerIf there is change, you need to provide details.n/a
Business restructuring during the year or at the last 5 yearsIf there is restructuring, you need to provide details.n/a
Tax Treaty Relief ApplicationIf there is pending application, you need to provide details.n/a
Advance Pricing Agreement (APA)If there is an APA with related parties, attach the copy of the APA.

Note: APA is an agreement entered into between the taxpayer and the BIR to determine in advance an appropriate set of criteria to ascertain the transfer prices of controlled transactions over a fixed period of time. 		CTC of APA

Mode of Filing

Currently, the return is filed manually, unless another revenue issuance is released mandating its electronic filing. The return can be downloaded from the BIR website.

Deadline of Filing

As an Income Tax Return (ITR) attachment, the original deadline is within 15 days from the statutory deadline of the annual ITR filing. However, the BIR has extended the deadline in Revenue Memorandum Circular No. 98-2020.

Updates

Revenue Regulations No. 001-2025

Revenue Regulations No. 18- 2024

REPUBLIC ACT NO. 12066 – CREATE MORE ACT

Revenue Memorandum Circular No. 116-2024

Revenue Memorandum Circular No. 115-2024

Revenue Memorandum Circular No. 113-2024

8 Features of Republic Act No. 12023 – VAT on Digital Services Law Philippines
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