InTAX: July 2023 Issue 1 | Volume 1

Bureau of Internal Revenue

The Bureau of Internal Revenue issued the following:

Revenue Memorandum Order (RMO) No. 23-2023, dated 23 June 2023, to provide for the mandatory requirements and guidelines, policies and procedures in the processing of claims for Value-Added Tax (VAT) Credit/Refund except those under the authority and jurisdiction of the Legal Group.

Pertinent provisions of the RMO are as follows:

1. General Policies – all offices concerned shall prioritize the processing of VAT credit/refund claims under Section 112 of the Tax Code, as amended, over other claims not requiring the immediate issuance of Tax Credit Certificates (TCCs)/refund checks, among others.
2. Procedures are as follows:

a. Check listing and Pre-verification Procedures

b. Verification of Claims for VAT Refund filed under Section 112 (A) of the Tax Code, as amended

c. Verification of Claims for VAT Credit filed under Section 112 (B) of the Tax Code, as amended

d. Verification of Claims for VAT Credit/Refund filed under Sections 204 (C) and 229 of the Tax Code, as amended, for the Recovery of Input Tax Erroneously or Illegally Collected

e. The Revenue Officer (RO) shall prepare a memorandum report recommending the approval or denial of the claim for VAT credit/refund for review and preliminary approval of the Group Supervisor (GS) and head of the processing office

f. Review of Reports and Dockets

g. Approval of the Report

h. Processing and Issuance of the TCC/Refund Check

i. Transmittal of Docket of Approved Claim on Importation

j. Transmittal of dockets for approve claims shall be done by the accounting division in the National Office/Finance Division in the Regional Office.

3. Reporting

The RMO supersedes RMO No. 47-2020 and all other revenue issuances or portions thereof that are inconsistent here with are hereby amended, modified or revoked accordingly.

The RMO shall take effect for VAT refund/credit claims that will be filed starting 01 July 2023.

Revenue Memorandum Circular (RMC) No. 63-2023, dated 31 May 2023, to provide for the revocation of BIR Ruling Nos. 038-2001 and 046-1995.

Clark Development Corporation (CDC), while performing functions that are proprietary in nature, is classified as an Investment Promotion Agency (IPA) as defined and contemplated under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, its implementing rules and regulations (IRR) and other related rules and regulations. Therefore, CDC cannot avail of the fiscal and non-fiscal incentives which are exclusively granted to Registered Business Enterprises (RBEs).

RMC No. 69-2023, dated 20 June 2023, to provide for the reversion of rates of percentage tax, minimum corporate income tax and regular corporate income tax on proprietary educational institutions and not for profit hospitals, pursuant to Republic Act No. 11534, otherwise known as the CREATE Act.

The RMC provides that pursuant to Section 6,7 and 13 of the CREATE as implemented by Revenue Regulations (RR) Nos. 4-2021, 5-2021, and 8-2021 and as clarified by RMC Nos. 65-2021 and 67-2021 shall be effective on 01 July 2023.

Tax Type	Reverted Tax Rates	Taxpayer Concerned
Percentage Tax	3% of gross quarterly sales or receipt of taxpayers	Corporations, self-employed individuals and professionals whose gross sales or gross receipts are not exceeding the PHP3Million threshold, except of cooperatives and self-employed individuals availing of the 8% income tax rate
Minimum Corporate Income Tax	2% based on gross income	Domestic and resident foreign corporations, including offshore banking units and regional operating headquarters
Regular corporate income tax	10%	Proprietary educational institutions and hospitals which are non-profit

The RMC provides for the sample computation of relevant taxes for taxable year 2023.

RMC No. 70-2023, dated 22 June 2023, to circularize the list of withholding agents required to deduct and remit the 1% or 2% Creditable Withholding Tax (CWT) for purchase of goods and services under RR No. 31-2020.

The list of additional withholding agents is posted in the BIR Website at www.bir.gov.ph.

The obligation to deduct and remit to the BIR the 1% and 2% CWT shall commence or cease, as the case may be, effective 01 July 2023. Any taxpayer not found in the published list of Top Withholding Agents (TWAs) is not required to deduct and remit the 1% or 2% CWT under the said RR.

RMC No. 71-2023, dated 23 June 2023, to provide for the streamlined guidelines and mandatory requirements for claims of VAT Credit/Refund except for those under the authority and jurisdiction of the Legal Group.

Pertinent provisions are as follows:

1. Timeframe to process and grant claims for VAT refund is ninety (90) days from date of submission of official receipts or invoices and other documentation in support of the application filed in accordance with Sections 112 (A) and (B) of the Tax Code, as amended, up to the release of the payment for approved amount of the refund.
2. List of processing offices that will receive the application for VAT Credit/Refund Claims
3. VAT refund claim filed beyond the 2-year prescriptive period shall be accepted. However, the processing office shall recommend outright denial fo the claim.
4. List of documents to be submitted by the taxpayer-claimant upon filing of the application for VAT credit/refund. 

The RMC shall take effect for VAT refund/credit claims that will be filed starting 01 July 2023.

All revenue issuances and BIR rulings inconsistent herewith are hereby considered amended, modified or revoked accordingly.

RMC No. 74-2023, dated 05 July 2023, to prescribe the sworn statement and sworn declaration to be submitted relative to the compliance requirements in availing the income tax exemption of foreign-sourced dividends received by domestic corporation.

RR No. 05-2023 prescribed standard templates for the “Sworn Statement” and “Sworn Declaration” that shall be submitted by the domestic corporate as attached to the Annual Income Tax Return (AITR) pertaining to the taxable year when the dividend is received and to the AITR for the immediately succeeding taxable year respectively. However, said RR only includes dividend income received from a single source.

The RMC provides for the standard templates in case the domestic corporation received multiple foreign-sourced dividends qualified for the income tax exemption.

RMC No. 75-2023, dated 05 July 2023, to extend the deadline for the replacement of ask for receipt notice (ARN) with notice to issue receipt/invoice (NIRI) under RMO No. 43-2022.

RR No. 10-2019 and RMO No. 43-2022 provides that all business taxpayers are mandated to exhibit at their place of business the new BIR Notice to the Public or NIRI. The BIR informed the taxpayers to replace their old ARN with the new NIRI until 30 June 2023.

The RMC extend the deadline of securing the new NIRI on or before 30 September 2023.

Business taxpayers who failed to renew on or before 30 September 2023 shall be imposed a penalty of a fine of not more than Php1,000.00 pursuant to Section 275 of the Tax Code, as amended.

Securities and Exchange Commission

The Securities and Exchange Commission (SEC) issued SEC Memorandum Circular (MC) No. 09 series of 2023, dated 27 June 2023, to provide for the extension of the deadline for amnesty applications under SEC MC No. 02, series of 2023 and streamlining of the application process.

The deadline for the amnesty applications under MC no. 02 and 06 is until 30 September 2023 (Section 3).

Pertinent provisions of the MC that amended the previous circulars are as follows:

1. Prescribed amnesty rates under MC no. 02 are retained (Section 1)
2. Procedures to streamline the amnesty applications provide the following (Section 2): 

a. Unified Amnesty Application Form in lieu of the notarized Expression of Interest

b. Removal of Undertaking for Latest Due AFS submission

c. Turnaround time for release of Confirmation of Payment (COP) shall be within fifteen (15) working days from the date of complete submission of reportorial requirements by the applicant

d. Complete submission of Reportorial Requirements is until 30 September 2023. 

e. Refund of overpayment of amnesty fees shall not be accommodated except in highly meritorious cases.

3.  Updated scale of fines and penalties for the covered reportorial requirements shall be implemented on 01 October 2023. 

The MC is effective immediately upon completion of publication in a newspaper of general circulation.

(R.G.Manabat & Co. Notes: Not yet published as of date.)

Please click on the links for the full text of the issuances: RMC No. 75-2023, RMC No. 74-2023, RMC No. 74-2023 Annex A, RMC No. 74-2023 Annex B, RMC No. 71-2023, RMC No. 71-2023 Annex A.1, RMC No. 71-2023 Annex A.1.1, RMC No. 71-2023 Annex A.1.2-A.1.7, RMC No. 71-2023 Annex A.2, RMC No. 71-2023 Annex A.3, RMC No. 70-2023, RMC No. 69-2023, RMC No. 63-2023, SEC Memorandum Circular (MC) No. 09 series of 2023, Annex A.1 Checklist Under 112A New, A.1.1 Taxpayers Attestations, Annex A.2 Checklist Under 112B, Annex A.3 Checklist Under 229, Annex B Delinquency Verification Certificate 1 Corrected, Annex C.1, Annex C.2, Annex C.3, Annex D.1, Annex D.2, Annex D.3, Annex E, Annex F, Annex G, Annex H.1, Annex H.2, Annex H.3, Annex I Authority to Issue VAT Refund, Annex J.1 VAT Refund Notice Local Purchases 1 Corrected, Annex J.2 VAT Refund Notice Local Purchases and Importations 1 Corrected, Annex K Covering Sheet, Annexes A.1.2 to A.1.7 Schedules Corrected, Annexes L M N and O — Reports, and RMO No. 23-2023.