Late Filing and Out-of-District Filing of Tax Returns and Reports in Philippines

The Bureau of Internal Revenue (BIR) in the Philippines issued Revenue Regulation (RR) No. 6-2023, dated April 11, 2023, on June 13, 2023, entitled “Amending Certain Provisions of Revenue Regulations No. 13-2010 Regarding Late/Out-of-District Filing of Tax Returns”.

The BIR established and implemented more stringent policies and guidelines in the acceptance of late/out-of-district tax returns with the following:

• · Authorized Agent Banks (AABs);
• Revenue Collection Officers (RCOs);
• Revenue District Offices (RDOs);
• Large Taxpayers District Offices (LTDOs); or;
• Large Taxpayers Divisions (LT Divisions).

Let us look at how the BIR deals with the Late/Out-of-District filing and payment of tax returns.

I. Non-Acceptance of Out-of-District and Late Filing Returns

As a general rule, no AABs, RCOs, RDOs, LTDOs and LT Division in the Philippines shall accept Out-of-District Returns. As well as no acceptance of late filing of tax returns without imposition of applicable penalties such as Surcharge of 25% or 50% of basic tax due and Annual Interest of 12% under Sections 248 and 249 of National Internal Revenue Code (NIRC), and Compromise Penalty under Revenue Memorandum Order (RMO) No. 7-2015, respectively.

II. Exceptions

The following shall be considered as exceptions to the general rule on the non-acceptance of Out-of-District Returns:

a. Unintentional or erroneously accepted by AAB in a regular course of action. The AAB will transmit the accepted out-of-district tax returns within five (5) days to the proper offices (RDO/LTDO/LT Division) and shall impose 25% penalty of the tax due for wrong venue filing, unless authorized by the Commissioner of the Internal Revenue;

b. One-Time Transactions, such as Estate, Donor’s, Capital Gains and Documentary Stamp Taxes as provided under the relevant revenue issuances, shall continue to be observed; and,

c. There is a revenue issuance/bank bulletin that the taxpayer can file and pay tax due anywhere.

III. Late Filing of Tax Returns

Prior to the filing of Late Return, the AAB or RCO may accept a Late Return provided that it has been stamped “LATE FILING” or “LATE FILING, INCREMENTS NOT PAID” and shall include computation of the corresponding penalties.

With the above, these are my personal suggestions and reminders that taxpayers might want to consider for filing and payment of tax returns.

1. Mode of Filing and Payment

Under Revenue Memorandum Circular (RMC) No. 4-2021, the following prescribed guidelines must be observed:

a. eBIRForms Filers – file electronically the returns and pay the corresponding tax dues through AABs or RCOs under the jurisdiction of the concerned RDO where the taxpayer is registered and electronic payments through Gcash, Paymaya, and others.

b. eFPS Filers – file electronically the returns and pay the tax dues through eFPS-AAB where they are enrolled.

c. Manual Filers – file and pay tax returns through AABs or RCOs under the jurisdiction of the concerned RDO where the taxpayer is registered.

2. Deadlines

Below are some deadlines in filing and payment of the tax returns:

• BIR Form Nos. Deadlines Manual and eBIR Filers eFPS Filers
• 2000 (DST) Not later than the fifth (5th) day of the following month when the taxable document is made, signed, issued, accepted or transferred.
• 0605 (Annual Registration Fee) On or before January 31 of each year
• 0619E (Monthly EWT)/1601C
• (Monthly WTW)/0619F (MonthlyFWT) Every tenth (10th) day after the end of each month staggered filing based on the taxpayer’s industry
• 1601EQ (Quarterly EWT)/1601FQ
• (Quarterly FWT)/ 1603Q (FBT) Every last day of the month after the end of each taxable quarter
• 1604E (Annual EWT)/1604F (Annual FWT) On or before January 31 of each year
• 1604C (Annual WTW) On or before February 28 of each year
• 2551Q (Percentage Tax)/ 2550Q (VAT) Every 25th day after the taxable quarter
• 1701Q (Quarterly ITR for Individual Taxpayer) 45 days after the end of each taxable quarter
• 1702Q (Quarterly ITR for Non-Individual Taxpayer) 60 days after the end of each taxable quarter
• 1701/1701A/1702RT/1702EX/1702MX (Annual ITR) on or before the 15th day of the 4th month after the closing of the taxable year.

3. Statutory Penalties

In case of late filing and/or payment of returns, BIR may impose a penalty as follows:

a. Surcharge of 25% or 50% of the basic tax due under Section 248 of the Tax Code.

b. Interest of 12% on the unpaid amount of tax from the time it should have been paid until it is fully paid.

c. Compromise Penalty under RMO No. 7-2015 and amended.

Conclusion:

The responsibility when it comes to meeting deadlines, filing, and payment of tax returns in the proper BIR offices and e-payment channels falls on the shoulder of the taxpayer. Hence, it is important to properly note all the tax return deadlines and the respective RDO where the taxpayer is registered. So that taxpayers will not be wasting their hard-earned money paying such penalties.

By: Tax and Accounting Center Philippines

To provide a more taxpayer convenient manner of filing and payment of tax liabilities, electronic filing and payment system (EFPS) in the Philippines was introduced early in 2001 under Revenue Regulations No. 9-2001. The online tax payment system also fast tracked the availability of tax revenue for the Bureau of Internal Revenue (BIR) as payment is directly credited to the account of the government.

How does online system works?

Taxpayers intending to use online facility are required to enrol with the EFPS facility of the BIR. They are likewise required to maintain an online banking facility where the EFPS facility is integrated. Upon successful enrolment with both EFPS and online banking, the EFPS taxpayer will simply access the online facility, fill-out the tax return fields with required details and have it filed online. It is a two-step process and for control purposes, two persons normally operate – a staff for online filing, and an executive for online payment with access over online bank facility. Of course, it might be a bit risky to entrust online banking access to the staff so the superior ones does the online payment authorization. Upon successful online filing and payment, the system will generate a filing reference and payment confirmation as proof of successful tax payment. The system will likewise store EFPS files of tax returns files for future reference.

Benefits of online tax payment system

The online tax filing system is actually convenient for EFPS taxpayers. Here are some notable advantages:

1. No need for personal bank appearance to pay and file tax returns;
2. No need for manual stamping with the BIR office;
3. Beating the red light is not tight because final hour is until 10:00PM of the filing date as compared to the banking hours for payment (e.g. 3:00PM or 4:00PM for some banks);
4. Preparation of managers/cashiers checks for payment (or company check in some instances) is no longer needed as payment is attached to an online facility;
5. Tax returns are automated and no need for manual computation as some fields with mathematical computations automatically operates;
6. Filing can be done at your own pace and time based on an internet connection;
7. Drop downs for applicable fields such us on alphanumeric tax codes (ATC) are available and no deed to search for them manually; and,
8. Printing may be dispensed with because the system will store your filed returns that you may print later, although printing every after filing and payment is recommended;

As you can see above, filing and payment of tax return online is made easier, simplified, and convenient. We would expect that someday, online payment would open up for more facilities like paypal, credit card, and other modes for online merchants.

Who can avail of the online tax payment system in the Philippines?

The EFPS initially kicked off for large taxpayers with respect to some tax returns in the past but later developed. It has been made open to all taxpayers wishing to avail of the EFPS at their option, and almost all tax returns are now available for EFPS filing. However, certain taxpayers are mandated to file their tax returns via EFPS such as the following:

1. Large Tax Payers duly notified by the BIR
2. Top 20,000 Private Corporations duly notified by the BIR
3. Top 5,000 Individual Taxpayer duly notified by the BIR
4. Taxpayers who wishes to enter into a contract with government offices
5. Corporations with a paid- up Capital stock of Ten million pesos (₱ 10,000,000.00)
6. PEZA registered entities and those located within the special economic zones, and,
7. Government offices in so far as the remittance of withheld VAT and business tax is concerned (under Revenue Regulations No. 1-2013)

Private entities included above who are not registered in eFPS shall enroll following the procedures set forth in RMC 24-2001. Before enrollment  the RDOs concerned shall conduct briefing on the use of eFPS which all enrollees are required to attend as a pre-requisite to enrollment.

For more details and information, please refer to the link for frequently asked questions on electronic filing and payment (https://efps.bir.gov.ph/eFPSFAQ.html). We suggest you visit the BIR revenue district office of registration for your intended electronic filing and payment system in the Philippines. You can also visit the BIR link on how the EFPS facility developed based on the number of BIR issuances –  https://efps.bir.gov.ph/eFPSIssuancesAndRulingsPage.html.

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 please send mail at in**@************er.org.