As the year 2021 draws to a close, the so-called “busy season” also begins. During this season, taxpayers and accountants begin to prepare for the filing of year-end tax compliance requirements. One of the common annual year-end tax compliance requirements is the BIR Form No. 2316, or the Certificates of Compensation Payment and Tax Withheld.
The BIR Form No. 2316 is accomplished and filed by employers for each employee from whom taxes are withheld. Such BIR form shall be prepared in triplicate and shall be distributed as follows: the original copy is the employee’s copy, the duplicate for BIR’s copy, and the third copy for the employer. The BIR Form No. 2316 shall be issued to the employees on or before January 31 of the succeeding calendar year, or on the day on which the last payment of compensation is made if the employment is terminated before the close of such calendar year. It is important to note that the BIR Form No. 2316 must be signed by both the employer and the employee.
Employees who are purely compensation income-earners from only one employer for the calendar year and whose income tax has been withheld correctly by said employer are qualified for substituted filing and do not need to file an annual Income Tax Returns (ITR) separately. To signify their intention to avail of the substituted filing of ITR, qualified employees for substitute filing must affix their signature in the said BIR form. Once all the copies are duly signed, the employer must submit the duplicate of the BIR Form No. 2316 to the BIR, together with the Certified List of Employees Qualified for Substitute Filing of ITR reflecting the amount of income payments, the tax due, and the tax withheld. These shall be submitted to the BIR not later than February of the succeeding year. Further, such list must be stamped “Received” by the BIR, which is tantamount to the substituted filing of ITRs by the qualified employees.
However, due to the current COVID-19 pandemic happening, the BIR has released various issuances which allows flexibility on the submission of these year-end statutory requirements for tax compliance and reporting.
One of these is the recently issued Revenue Regulations (RR) No. 16-2021, which provides that the employers may submit only the scanned copies of the duplicates of BIR Form No. 2316 stored in Digital Versatile Disc Recordable (DVD-R) using the file format and naming conventions prescribed for the available modes or submission facilities of the BIR. This is in line with the efforts of the Bureau to adapt to the potentially long-term effects of the COVID-19 pandemic with their operations.
As you may recall, the BIR also allowed the submission of duplicates of BIR Form No. 2316 for the taxable year 2020 without the signature of the employee. However, they must be duly signed by the authorized representative of the employer.
In addition to this, the BIR also issued Revenue Memorandum Circular (RMC) No. 29-2021 on 29 February 2021 to allow the use of electronic signatures on certain BIR forms, including the BIR Form No. 2316.
While there are still instances where the taxpayers are required to physically go to BIR offices for the submission of these year-end tax compliance requirements, the above system changes can be a step towards helping taxpayers comply with their obligations without risking their safety and health. Perhaps in the coming months, the BIR might even launch another electronic channel for the submission of these year-end tax compliance requirements. We can always expect the BIR to continue finding opportunities to leverage alternative means to comply with taxpayers’ compliance requirements in the midst of this pandemic.
Judith Resuello is a Supervisor from the Tax Group of KPMG R.G. Manabat & Co. (RGM&Co.), the Philippine member firm of KPMG International.
This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. The views and opinions expressed herein are those of the author and do not necessarily represent KPMG International or KPMG RGM&Co.
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