UPDATE ON BIR RULES AND REGULATIONS Presented by: CYNTHIA E. OMERES Revenue Officer RR No. 19, Assessment Division
Change in Accounting Period (Sec. 46 of NIRC, RR 3-2011 and RR 9-2011)
ANOTHER FISCAL YEAR CALENDAR YEAR FISCAL YEAR Coverage Original Accounting Period (Calendar Year / Fiscal Year) Taxpayer other than INDIVIDUAL Change accounting period to
Documentary Requirements: • Letter Request addressed to the RDO / LT Office having jurisdiction over the place of business of the taxpayer; • Duly filled-up BIR Form No. 1905; • Certified true copy of the SEC approved Amended By-Laws showing the change in accounting period;
Documentary Requirements: • Sworn certification of “non-forum shopping” stating that such request has not been filed or previously acted upon by the BIR-National Office, signed by the taxpayer or duly authorized representative; and • A sworn undertaking by a Responsible Officer of the Taxpayer. (Annex A of RR 3-2011)
When to file? • The request for approval of the change in accounting period should be filed at anytime not less than sixty (60) days prior to the beginning of the proposed new accounting period
Where to file? • To the BIR, Revenue District Office or Large Taxpayers Office having jurisdiction over the place of business of the taxpayer
Stamping of Income Tax Returns and Attachments (RMO 6-2010, RMO 13-2010 and RMO 13-2011)
Policies and Guidelines • The ITR shall be stamped “Received” on the space provided for in the three (3) copies of the returns; • Any tax return in excess of three (3) shall not be received;
Policies and Guidelines • The attachments to the ITR shall also be stamped “Received”; • The attached Financial Statements shall also be stamped “Received” but only the Audit Certificate, Balance Sheet and Income Statement;
Policies and Guidelines • In the case of Corporations, and other Juridical persons, an extra two (2) copies of the Audit Certificate, Balance Sheet and Income Statement shall be stamped “Received” for filing with the SEC.
VAT Reporting -Standard Format- (RMC 17-2011)
Notes to Financial Statement Add Your Title
Requirements of Lessors (RR 12-2011 and RR 15-2011)
Responsibility of Lessors • To Ensure that the person intending to lease their commercial spaces, buildings and establishments is a BIR-registered taxpayer, which should have the following: • TIN; • BIR Certificate of Registration; and • Duly registered receipts and invoices.
Reportorial Requirements • To submit the following information, under oath, in hard and soft copies: • Building / space layout of the entire area being leased with proper unit/space, address or reference; • Certified true copy of Contract of Lease per tenant; and • The Lessee Information Statement.
When to file? • Every 31st of January starting the current year (for tenants as of December 31st of the previous year) and 31st of July starting from the current year.
Penalty Clause • Failure to submit; • Submitted falsified information; and • Knowingly transact with not duly registered taxpayers. A penalty of not less that P 10,000.00 and Imprisonment of not less that one (1) year but not more that ten (10) years
Income Tax Returns -New Forms- (RMC 57-2011/RR 19-2011)
Policies and Guidelines • Income tax filing covering and starting with calendar year 2011, which are due for filing on or before April 15, 2012 the following revised forms are to be used: • BIR Form 1700 version November 2011 • BIR Form 1701 version November 2011 • BIR Form 1702 version November 2011
Policies and Guidelines • All juridical entities following fiscal year of reporting are required to use the new BIR Form 1702 starting with those covered by fiscal year ending January 31, 2012. • Disclosures on the Supplemental Information portion of BIR Form 1700 and 1701 will be “OPTIONAL” for calendar year 2011 and will be “MANDATORY” for calendar year 2012.
New Forms • BIR Form 1700 RMC-2011-57-1700 nov 2011.pdf • BIR Form 1701 RMC-2011-57-1701 nov 2011.pdf • BIR Form 1702 RMC-2011-57-1702 nov 2011.pdf
Statement of Management Responsibility (RR 3-2010)
Contents of Statement of Management Responsibility • The Management is responsible for the following: • Information and representations contained in the ITR and the attached FS; and • All other tax returns filed for the reporting period.
Contents of Statement of Management Responsibility • The Management affirms the following: • That attached FS and ITR are in accordance with the books and records; • That the ITR has been prepared in accordance with the provisions of the NIRC;
Contents of Statement of Management Responsibility • The Management affirms the following: • That any disparity of figures between the ITR and FS has been reported as reconciling items and maintained in the books; and • That all applicable tax returns has been filed and the taxes shown thereon has been paid.
Signatories to the Statement of Management Responsibility • Taxpayer or Both Spouses, in case of Individual. • In case of a Juridical entities: • President/Managing Partner • Chief Executive Officer or its equivalent • Chief Financial Officer or its equivalent • In case of a Foreign Corporation, the local manager shall be the signatory.
Preparation & Submission of Financial Statements Accompanying The Tax Returns (Sec. 6(H) & Sec. 244 of the NIRC; RR 21-2002; RR 7-2007; RR 8-2007)
Contents and Format of Financial Statements • Shall state the accounts therein in a very descriptive fashion; • The account titles must be specific and not control accounts; • Must conform to standards promulgated by the FRSC of the Philippines; • Must conform to the rules and requirements of regulatory agencies such as the SEC, BSP, IC and etc.
Coverage of FS • Balance Sheet • Income Statement / Profit & Loss Statement I. Sales/Revenues II. Cost of Goods Sold / Cost of Services III. Selling & Administrative Expenses IV. Financial Expenses (if any) V. Other Income VI. Other Expenses Note: Items I, IV, V & VI – should be fully explained in the Notes to the Financial Statements Items II & III – should be supported with schedules
Coverage of FS • Statement of Changes in Equity showing either: • All changes in equity • Changes in equity, other than those arising from transactions with equity holders acting in their capacity as equity holders • Statement of Cash Flow • Notes (comprising a summary of significant accounting policies & other explanatory notes) • Schedules attached to the afore-cited statements
maintain books & records, recording & presentation shall be done in a manner that it will be understood by the examiners/auditors of the BIR Financial Accounting Tax Accounting Mandatory Adoption of PFRS Reconcile
Responsibility of Taxpayer • To reflect in its books of accounts the adopted/accepted year-end adjusting entries; and • Be made available to the investigating officers of the BIR upon audit, the working papers prepared pertinent to the adjustments made.
Responsibility of External Auditor • To maintain and preserve copies of the audited and certified Financial Statements for a period of three (3) years from the due date of filing the ITR or the actual filing thereof whichever comes later.
Penal Provisions • Any independent CPAs who, in his capacity as external auditor, willfully falsifies any report or statement, shall be dealt with in accordance with Sec. 257 of the Tax Code, as amended, shall be subject to the applicable penalty provisions of RR 11-2006.