Tax Advisory 2020-61: Revenue Memorandum Circular and Other Tax Updates

The Bureau of Internal Revenue (BIR) has recently released Revenue Memorandum Circular (RMC) and Revenue Memorandum Order (RMO). Below is the summary of each issuances:

 

SUBMISSION OF PHOTOCOPIES OF DOCUMENTS FOR CREDIT EXTENSIONS AND CREDIT RESTRUCTURING REMOVED

(RMC No. 72-2020 amending RMC No. 36-2020) 

The BIR move to remove the requirement of submission of photocopies of documents evidencing credit extension and credit restructurings granted by covered institutions during the enhanced community quarantine (ECQ). The amended paragraph now states that the hard copy of the summary listing shall be made under oath as to the completeness, truth and accuracy thereof by a duly authorized officer or representative of the taxpayer, and subject to post audit/verification by the BIR whether the summary list pertains to qualified loans only.

 

ADOPTING FAST-TRACK MEASURES DURING COVID-19 STATE OF CALAMITY

(RMC No. 71-2020) 

The BIR circularize Advisory No. 01, series of 2020, of the Anti-Red Tape Authority (ARTA) for the adoption of Fast-Track Measures During the COVID-19 State of Calamity. The purpose of the advisory is to advice the government agencies and local government units to fast track and simplify their respective procedures and documentary requirements in consistent with Republic Act (R.A.) No. 11032 (Ease of Doing Business) and 11469 (National Emergency Arising From COVID-19) and recent pronouncement of the President. According to the advisory, all Government Agencies may be guided by the following measures:

  1. Emergency Extensions
  2. Electronic Submissions and Approvals
  3. Suspension of Notarization Requirement for Documents to be Submitted, Unless Required by Law
  4. Reduction of Signatories and Requirements
  5. Whole-of-Government Approach
  6. Payments of Processing Fees
  7. Submission of Regulation to University of the Philippines (UP) – Office of the National Administrative Register (ONAR)

The objective of the advisory is aligned to the governments drive for a ZERO RED-TAPE Policy and to ensure unhampered delivery of government services to the Filipino people.

 

LIST OF EXPIRED TAX CREDIT CERTIFICATES

(RMC No. 70-2020) 

In connection with Revenue Regulations (RR) No. 14-2020 which talks about the cash conversion of unutilized tax credit certificate, the BIR released the List of Tax Credit Certificates (TCCs) that are already expired as of the effectivity of the said regulation on June 13, 2020. Thus, the circular is deemed as sufficient notice to the concerned taxpayer.

 

REVISED PROCEDURES ON THE CANCELLATION OF PTU, CRM, POS MACHINES, AND OTHER SIMILAR SALES MACHINES GENERATING RECEIPTS/INVOICES

(RMC No. 69-2020) 

In light of the Ease of Doing Business drive of the government through RA No. 11032, the BIR set a standard of procedure and documents for the cancellation of PTU,CRM, or POS Machine and further clarifies some portions of previously issued RMC No. 75-2018 dated June 18, 2018. Accordingly, the guidelines and procedures are as follows:

  1. The cancellation of the PTU CRM/POS machines shall be processed by the Revenue District Office/LT Office having jurisdiction over the taxpayer’s business address where the machine was registered.
  1. The taxpayer shall notify the concerned RDO/LT office, in writing, on their request for cancellation of the PTU within five (5) days from the date the machine was last used’/withdrawn from use stating the reason(s) for the cancellation and other information such as but not limited to the following:
  • Permit Number;
  • Machines Identification Number (MIN);
  • Type of Machine;
  • Machine serial number, brand/model;
  • Software name and/or version; and
  • Grand accumulated sales as of last day of use of the machine.
  1. The taxpayer shall submit the following documents as an attachment to the Letter or to assigned Revenue Officer at the time of machine inspection:
  • Copy the Z-Reading (for the POS machines)/audit tape (for CRM) showing the reset counter number and EOD/Z-Counter Reading as of last day of use of the machine(s);
  • Copy of the back-end report (for POS machines)/cash register sales book page (for CRM) as of last day of use of the machine(s);
  • Original copy of the PTU issued;
  • Original copy of the Decal;
  • Reprint copy of the last invoice/receipt generated as of the last day of use showing the serial number of such invoice/receipt;
  • Copy of the Z-Reading/End of-Day (EOD) Report or its equivalent showing that the sales machine was reset to zero or initialized;
  • For new/upgraded software (loaded in the same machine where the old software is installed): Copy of the Z-Reading/End-of-Day (EOD0 Report or its equivalent showing the initial reading of the newly installed software.
  1. Actual inspection of the CRM/POS shall be mandatory in case of its withdrawal from use or its transfer to another branch of the company. However, in case of modification/upgrading of the software being used, actual inspection of the machine may be dispensed with so as not to disrupt the normal business operation of the taxpayer under the following conditions:
  • New/upgraded software shall be set-up in the same hardware/machines where the old POS software are installed;
  • POS machines are with existing PTU issued through the Electronic Accreditation and Registration (eAccReg) System;
  • The new or upgraded software will be implemented/deployed/ rolledout nationwide or in branches/franchisees/ locate in different Revenue District Offices (RDOs); and
  • The changing/loading of the new/upgraded software in the POS machines will be implemented immediately after the close of the business hours.
  1. In case of withdrawal from the use or transfer of the CRM/POS to another branch of the taxpayer, the assigned Revenue Officer shall conduct an inspection of the machine hereof and perform the following:
  • Check the specifications and details of the said machine(s) as against the specifications indicated in the Letter of the taxpayer;
  • Request taxpayer to generate the Z-Reading as of the day of inspection and matched with the Z-Reading (as of last day of use) submitted by the taxpayer. The grand accumulated sales should be the same. This means that the taxpayer did not use the machine after the reported last day of use;
  • Request taxpayer to generate the back end report (for POS) of the machine as of the date of inspection and compare with the grand accumulated sales as reflected in the Z-Reading as of the last day of use of the machine; For CRM check the entries in the Cash Register Sales Book if updated (last entry should be the declared last day of use of the machine;
  • Initialize the resetting to zero of the machine;
  • Impose penalty for any violation pertaining to the use of CRM/POS machines that may be found during the inspection.
  1. Non-payment of the penalties at the time of the request for the cancellation of the PTU shall not be a ground for the non-issuance of the Cancellation Certificate.
  1. The assigned Revenue Officer shall submit a Memorandum Report on the result of the Inspection upon completion of the machine inspection and submission of the required documents by the taxpayer. Such report shall be approved by the Assistant Commissioner, LTS/RDO.
  1. Upon approval of the Memo Report of the assigned Revenue Officer, the Chief, Client Support Section of the RDO/Chief, LT concerned officer or its authorized staff, shall cancel the PTU and the MIN of the machine in the eAccReg system and generate the Cancellations Certificate.
  1. In compliance with the processing time in the Citizen’s Charter, the Cancellation Certificate must be issued within seven (7) days from receipt of the letter/request of the taxpayer by the concerned RDO/LT Office. In case when inspection of the machine was dispensed with, the Cancellation Certificate shall be issued to the taxpayer within three (3) working days from receipt of the complete requirements by the RDO/concerned LT Office.
  1. The concerned LT Office/RDO shall approve the application for PTU through the eAccReg within three (3) days from receipt of such application as mandated under the Citizen’s Charter of the BIR.
  1. In order to authorize the simultaneous registration eAccReg system of the new accredited software or upgraded software to be installed in the same machine with application for cancellation of the old software, the taxpayer shall secure approval in writing from the concerned LT Office/RDO to add a district prefix/suffix to the serial number of the sales machine to allow registration of the new software consisting of serial number of machine followed by prefix/suffix e.g., 123456A.

However, the policies, requirements and procedures in RMC No. 72-2018 apply only to machines found during Post-Evaluation to have requested for cancellation of PTU but have not been acted upon by the concerned LT office/RDO. Otherwise, the provisions on the cancellation of PTU on the new circular shall apply.

 

TAXPAYER AWARENESS PROGRAM (TAP)

(RMO NO. 24-2020 in connection with RMO No. 5-2020) 

The purpose of the order is to prescribe the guidelines in the reporting of accomplishments and evaluation of performance of Revenue District Offices relative to their implementation of the information dissemination activities under the TAP. The RDO will earns points on every TAP activity performed, which are the following:

  1. Conduct of seminars, briefings, dialogues, and fora
  2. Briefings for New Taxpayer Registrants
  3. TV, radio questing and interview
  4. Sending of speakers on BIR and tax-related matters to other government and private sector-initiated events
  5. Distribution of information materials
  6. Press release
  7. Display of streamers on BIR and tax-related matters
  8. Motorcade and Recoreda
  9. Conduct of tax quiz and other special events to promote tax awareness, and
  10. Implementation of new or innovative idea on tax information dissemination or delivery of taxpayer service

All the activity has an equivalent points and proper evidences, or documentation is required per activities.

 

ATRIG FOR NEW VAT EXEMPT DRUGS AND MEDICINES

(RMO No. 23-2020 in connection with RR No. 18-2020)

The Authority to Release Imported Goods (ATRIG) in the order discusses those VAT exempt on the sale and importation of prescription of drugs and medicines related to the following:

  1. Diabetes, high cholesterol, and hypertension beginning January 27, 2020; and
  2. Cancer, mental illness, tuberculosis, and kidney diseases beginning January 1, 2023

The ATRIG shall be issued on all importation of articles exempt from VAT pursuant to RMO No. 35-2002 which is currently being implemented by RDO No. 33 – Intramuros-Ermita-Malate under Revenue Region No. 6 – Manila. Accordingly, RDO No. 33 shall process application for ATRIG of drugs and medicines included in the “List of Approved Drugs and Medicines” issued by the Department of Health (DOH) for the following applicants:

  1. Manufacturers,
  2. Distributors, and
  3. Wholesaler and retailers

Finally, it was reiterated that the policies, guidelines, and procedures in RMO No. 35-2002 shall be strictly following and observed.

 

INTERNAL GUIDELINES ON HANDLING BIR-RELATED COMPLAINTS

(RMO No. 22-2020)

Ensuring that the complaints of the taxpayer are being handled and addressed in according to the rules, the BIR issued this new order to ensure proper handling of BIR-related complaints and concerns received through different channels of complaint system. It also defined update the BIR’s eComplaint System, define the duties and responsibilities of concerned BIR office and officials and set out the policies and guidelines in communicating the action taken of the concerned official and informing the taxpayer-complainant of the such action.

The Public Information and Education Division (PIED) of the BIR will be the recipient of all BIR-related complaints transmitted through the following channels:

  1. 8888 Citizen’s Complaint Center,
  2. Contact Center ng Bayan (CCB)
  1. Anti-Red Tape Authority (ARTA)
  1. Presidential Complaint Center (PCC)
  • Email address: pcc@malacanang.gov.ph
  • Telephone numbers: +63(2) -8736-8645/8603/8629/8621
  • Postal service: PCC official address at Bahay Ugnayan, J.P. Laurel Street Malacañang, Manila
  • Telefax number: +63(2) -8736-8621

 

Complaints are categorized on the following manner:

Each concerned office shall have a dedicated email for citizen’s complaint or concerns. The timeline of the of complaint is different when it coursed through ARTA which the concerned office must respond to the complainant within 24 hours from receipt of the complaint. If the complaints are course through different channels other than ARTA, the concerned office must acknowledge the receipt of the complaint within 23 hours and act within 72 hours.

If the complaint is insufficient, the BIR will request from the complaints details and other documents that may be needed to address the compliant within 3 working days. Otherwise, if the taxpayer fails to provide the same the complaint will be archived

Internal procedures and reporting requirements with the BIR were also discussed therein in the order for the taxpayer to know where their complaints are going to.

Please be guided accordingly.

Sincerely,

Tax Advisory Services

Attachments:

 

TAX ADVISORY

TAX ADVISORY 2020-60: Disclosure on RP Transaction, Additional VAT Exemption and other Tax Updates
TAX ADVISORY 2020-59: TCC to Cash, Online Filing of Required Attachment and other Tax Updates
TAX ADVISORY 2020-58: No More Extension of Deadlines, Manner of Acceptance and Payment of Tax Returns amid COVID-19.
TAX ADVISORY 2020-57: Amended Extension of Deadlines and other relevant issuances amid COVID-19 pandemic.
TAX ADVISORY 2020-56: Further Extension of Deadlines and Other relevant issuance amid COVID-19 pandemic.
TAX ADVISORY 2020-55: Extension of Certain Deadlines amid COVID-19 pandemic.