Philippines: Year-end tax compliance reminders

The KPMG member firm in the Philippines prepared a January 2024 report reminding taxpayers of year-end tax compliance requirements with the Bureau of Internal Revenue (BIR):

• Prior to using any books of accounts, taxpayers are required to register their books with the BIR. Under Revenue Memorandum Circular (RMC) No. 3-2023, all books of accounts must be registered online with the BIR’s online registration and update system (ORUS), which requires taxpayers to set up an ORUS account. Existing business taxpayers are required to register their new set of manual books of accounts prior to the full consumption or prior to using up the pages of their previously registered books. New sets of manual books of accounts are not required to be registered every year but the taxpayers may opt to register yearly, provided that the new sets of manual books are registered before its use. Calendar year taxpayers using loose leaf books of accounts must register their books to the BIR on or before 15 January of each tax year. Calendar year taxpayers with registered computerized books of accounts are required to submit the soft copy of their books on or before 30 January after the end of each tax year.
• Another annual compliance matter is the submission of Annual Information Returns (i.e., BIR Form Nos. 1604-C, 1604-F, and 1604-E) and their related alphabetical lists (alphalist).
  
• Employers who have deducted withholding tax on compensation (WTC) from their employees must file the BIR Form No. 1604-C together with the alphalist of employees, while withholding agents who have subjected their income payments to final withholding tax (FWT) or fringe benefits tax must file BIR Form No. 1604-F together with the alphalist of payees/employees. Both BIR Form Nos. 1604-C and 1604-F must be filed on or before 31 January 2024. On the other hand, withholding agents who have deducted expanded withholding tax (EWT) on its income payments must file BIR Form No. 1604-E and submit the related alphalist of payees on or before 1 March 2024.
  
• For taxpayers utilizing the electronic filing and payment system (eFPS), the BIR announced in RMC No. 62-2023 the availability of BIR Form Nos. 1604-C, 1604-E and 1604-F in the eFPS. If the new forms are unavailable in the taxpayer’s eFPS account, RMC No. 18-2021 provides that eFPS filers must use the new version of subject forms in the latest offline eBIRForms package. This RMC is aligned with RMC No. 4-2021 which provides for the use of eBIRForms in case the newly created forms are not yet available in the eFPS but already available in the eBIRForms. Nonetheless, as RMC No. 18-2021 specifically covers annual information returns for the calendar year 2020, affected eFPS taxpayers need to watch for advisories from the BIR as to any recent workaround guidelines on the filing of the said forms. 
  
• Previously, all registered taxpayers doing business were required to file and pay an annual registration fee (ARF) amounting to Php500.00 for every head office branch and separate or distinct establishment or place of business on or before 31 January of every year. With the passage of Republic Act (RA) No. 11976 or the Ease of Paying Taxes Act into law, taxpayers are no longer required to file and pay an ARF. The BIR issued an advisory that it will cease to collect the ARF effective 22 January 2024. Taxpayers with existing BIR certificate of registration (COR) that includes an ARF remain valid. But taxpayers have the discretion to update or replace their COR at the Revenue District Office where they are registered on or before 31 December 2024.