Revenue Regulations (RRs)
RR NO. 8-2018, issued on February 20, 2018, implements the amended provisions on Income Tax pursuant to RA No. 10963 (TRAIN Law). The Income Tax on the individual’s taxable income shall be computed based on the provided schedules, which are generally at a lower rate. Individuals earning income purely from self-employment and/or practice of profession of not more than 3 million shall have the option to avail of: (a) the provided graduated rates; or (b) the 8% tax on gross sales or receipts. Meanwhile, minimum wage earners shall be exempt from the payment of Income Tax based on their statutory minimum wage rates. [Digest]
RR NO. 9-2018, issued on February 26, 2018, prescribes the rules and regulations implementing the increase in the Stock Transfer Tax pursuant to RA No. 10963 (TRAIN Law). The Percentage Tax on the sale, barter or exchange of shares of stock listed and traded through the local stock exchange has been increased from ½ of 1% to 6/10 of 1%. Work-around filing and payment procedures shall be followed while BIR Form No. 2552 is being updated. [Digest]
Revenue Memorandum Orders (RMOs)
RMO NO. 9-2018, issued on February 6, 2018, creates and modifies the Alphanumeric Tax Code (ATC) of selected revenue source under RA No. 10963 (Tax Reform for Acceleration and Inclusion or TRAIN Law). New ATCs shall be used in the remittance of withholding tax on bank withdrawals and excise tax on cosmetic procedures. For documentary stamp tax (DST), only the description of the previous ATCs were modified. Previous ATCs shall still apply. [Digest]
Revenue Memorandum Circulars (RMCs)
RMC NO. 12-2018, issued on February 22, 2018, clarifies that the nature and extent of the power of the Commissioner of Internal Revenue (CIR) to obtain information under Sec. 5 of the NIRC of 1997, as amended, serves as an exception to both the Attorney-Client and Accountant-Client privilege. The privileged communication of attorney-client and accountant-client cannot be used to defeat the very purpose and objective of the Commissioner’s power to obtain information under Sec. 5 of the NIRC. [Digest]
Court of Tax Appeals Decisions
CTA CASE NO. 8829, issued on February 7, 2018, denies the respondent’s Motion for Reconsideration for lack of merit. A Preliminary Assessment Notice (PAN) and Final Assessment Notice (FAN) indicating a wrong address and therefore, were not duly received by the taxpayer, are considered null and void.
In the case, the taxpayer transferred its registered address from Makati City to Pasig City. Proper notices to the BIR for the change in address was done, as the new address was already reflected in the Integrated Tax System (ITS) of the BIR. However, the PAN and FAN still failed to indicate the new address of the taxpayer. Thus, the PAN and the FAN issued by respondent were not received by petitioner because both documents reflect the wrong address.
In the case, the taxpayer transferred its registered address from Makati City to Pasig City. Proper notices to the BIR for the change in address was done, as the new address was already reflected in the Integrated Tax System (ITS) of the BIR. However, the PAN and FAN still failed to indicate the new address of the taxpayer. Thus, the PAN and the FAN issued by respondent were not received by petitioner because both documents reflect the wrong address.
BIR Advisories
Filing of Percentage Tax and Withholding VAT Returns
February 8, 2018
Taxpayers subject to the percentage taxes shall file and pay the tax within twenty-five (25) days after the end of each taxable quarter. The following instructions must be observed:
1. All taxpayers subject to percentage tax pursuant to Section 116 of the Tax Code and those who will be subject thereto due to change of registration from VAT to Non-VAT, are required to pay the percentage tax on a quarterly basis using BIR Form No. 2551Q. There is no need to file and pay monthly percentage tax on their monthly gross receipts using BIR Form No. 2551M.
2. Taxpayers who are required to withhold Other Percentage Taxes and Value-added Tax shall continue to withhold and remit taxes on a monthly basis using BIR Form No. 1600 - Remittance Return of VAT and Other Percentage Taxes Withheld, considering that taxes withheld are held in trust for the government. Furthermore, BIR Form No. 1600 (Remittance Return of VAT and Other Percentage Taxes Withheld) shall still be used for VAT withheld on government money payments and payments to non-residents.
February 8, 2018
Taxpayers subject to the percentage taxes shall file and pay the tax within twenty-five (25) days after the end of each taxable quarter. The following instructions must be observed:
1. All taxpayers subject to percentage tax pursuant to Section 116 of the Tax Code and those who will be subject thereto due to change of registration from VAT to Non-VAT, are required to pay the percentage tax on a quarterly basis using BIR Form No. 2551Q. There is no need to file and pay monthly percentage tax on their monthly gross receipts using BIR Form No. 2551M.
2. Taxpayers who are required to withhold Other Percentage Taxes and Value-added Tax shall continue to withhold and remit taxes on a monthly basis using BIR Form No. 1600 - Remittance Return of VAT and Other Percentage Taxes Withheld, considering that taxes withheld are held in trust for the government. Furthermore, BIR Form No. 1600 (Remittance Return of VAT and Other Percentage Taxes Withheld) shall still be used for VAT withheld on government money payments and payments to non-residents.