IN line with Republic Act (RA) No. 10963, also known as the “Tax Reform for Acceleration and Inclusion (TRAIN)”, the Bureau of Internal Revenue (BIR) has circularized the revised withholding tax table through its Revenue Memorandum Circular (RMC) No. 105-2017.
Across a number of countries, the way internationally mobile employees are taxed is being shaken-up. This follows the G20/OECD-led Base Erosion and Profit Shifting (BEPS) Action Plan recommendations set out over a year ago.
The Electronic Filing and Payment System (eFPS) was developed to provide taxpayers with “top quality and convenient service through a much faster processing and immediate confirmation of filing of tax returns and payment of taxes due thereon.” The system allows the taxpayers to directly encode, submit their tax returns and pay their taxes online. Considering the convenience made by the eFPS, filing and payment can be done anytime and anywhere where Internet is accessible. In spite of such accessibility, taxpayers fall prey to the trifles of the due dates for filing and payment in case these falls on a holiday or on a weekend.
Two trillion pesos. This is the revenue collection target of the Bureau of Internal Revenue (BIR) for 2016 and much of this represents income tax collected via withholding tax. In 2014 alone, withholding taxes accounted for more or less 40% of total income tax collected by the government. Considering the significance of withholding tax to the government, each and every taxpayer engaged in trade or business in the Philippines is required to withhold on their income payments, unless specifically exempted.
We often hear the phrase: “Taxes are the lifeblood of the Government,” as the main reason why collecting them is essential. However, there are instances when this should give way to the taxpayer’s right to claim a tax refund or credit. One such instance is a claim for tax refund or tax credit on input Value-Added Tax (VAT) arising from VAT zero-rated export sales. A taxpayer claiming this type of tax credit or refund must present at least three types of documents.
In every relationship, the parties involved need to agree to achieve a harmonious relationship. The Bureau of Internal Revenue (BIR) and the taxpayer are no exception. An assessment has to be formally issued within three years from the due date or date filing of the tax return, whichever is later. In case the three-year period is not sufficient, the taxpayer and the BIR may agree in writing to extend the three-year period for assessment pursuant to Section 222 of the Tax Code. The taxpayer executes a Waiver of the Statute of Limitation which is accepted by the BIR.
Taxpayers may have finally been given two rays of hope by the Court of Tax Appeals when it comes to the applicability of deficiency and delinquency interest in tax assessments. Taxpayers under assessment are often faced with two types of interest under the Tax Code. The first, deficiency interest, is imposed on any deficiency tax due from the date prescribed for its payment until the full payment thereof. The second, delinquency interest, is imposed on the deficiency tax, or any surcharge or interest thereon on the due date appearing in the notice and demand of the BIR. Interest rates for both are at 20%.
The countdown has started and taxpayers have barely 4 days before the last day for filing the final adjustment return otherwise known as the Annual Income Tax Return for the taxable year ended December 31, 2015. Specifically, corporate taxpayers are required to file a final adjustment return covering the taxable income for the preceding calendar year on or before the 15th day of April and, likewise, to pay the income tax due thereon at the time the declaration or return is filed in accordance with the provisions of Section 76 and 77 of the National Internal Revenue Code of 1997 (Tax Code), as amended.
