As a young professional working and living away from my family, I look forward to December. Booking a flight, buying gifts, and planning a vacation give me a rush. December is also usually when I re-evaluate the goals I have set for myself, look back on the decisions I made, and assess whether I still get fulfillment from the things I do. However, this year was different. I have to remind myself that surviving difficult times is a success in itself, that taking a break does not necessarily mean abandoning your dreams. That it is fine to rest, keep the faith, and just strike later.
Just as this year changed our lives and forced us to recalibrate our mindsets, several regulations were also issued by the Bureau of Internal Revenue (BIR) to help taxpayers cope with the difficult times. Listed below are the deadlines that we need to look out for as they come due after getting extended.
RELATED PARTY TRANSACTIONS RETURN (BIR FORM 1709)
The first deadline for the submission of Information Return on Related Party Transactions (BIR Form 1709) and supporting documents as attachments to Annual Income Tax Return is on Dec. 29, 2020. This deadline is for companies with accounting periods ended Fiscal Year (FY) March 31, 2020 and April 30, 2020. Deadlines for submission by companies with periods ending on other than the above dates are as follows:
These deadlines were a further extension pursuant to Revenue Memorandum Circular (RMC) No. 98-2020 to give taxpayers ample time to prepare and file. This is considering that the effectivity of the submission requirement was only on July 25, 2020 pursuant to Revenue Regulations (RR) No. 19-2020.
As clarified in RMC No. 76-2020, BIR Form 1709 shall be manually filed at the Large Taxpayers (LT) Division/ Revenue District Office (RDO) where the taxpayer is registered. A penalty of between P1,000 and P25,000 will be imposed for failure to file BIR Form 1709 and its required attachments due to reasonable cause and not willful neglect. In case of repeated offenses, the maximum penalty of P25,000 will be imposed. If after receiving valid summons and the taxpayer still fails and neglects to produce the form and attachments, the responsible officer is liable for a fine of between P5,000 and P10,000 and imprisonment of between one and two years*.
FILING FOR VAT REFUND CLAIMS
The application for VAT (value-added tax) refund claims covering the quarter ended Sept. 30, 2018 will be due on Dec. 31, 2020. Deadlines for the application for VAT refund claims covering other taxable quarters are shown above.
Pursuant to RR No. 28-2020, areas with enforced Enhanced Community Quarantine (ECQ) or the Modified Enhanced Community Quarantine (MECQ) after Dec. 29, 2020 will be given an additional 30 days after the lifting of the ECQ or MECQ to apply for VAT refund claims. The 90-day period for processing of VAT refund claims is likewise suspended and will resume after 30 days from the lifting of ECQ or MECQ.
VOLUNTARY ASSESSMENT AND PAYMENT PROGRAM (VAPP)
To gain additional revenue to fund government expenditure during the pandemic, the BIR implemented VAPP for the 2018 calendar year and fiscal years ending between July 2018 and June 2019. The last day to avail of the program, which started on Sept. 21, 2020, is on Dec. 31, 2020**.
Covered taxpayers may either be individual or juridical entities, including estates and trusts which erroneously paid or failed to pay the covered taxes for the covered periods due to inadvertence or otherwise.
An availing taxpayer may file personally or through a courier service. Payments may be made in cash to any BIR Authorized Agent Bank (AAB) under the LT office/RDO having jurisdiction over the taxpayer, except for one-time transactions (ONETTs) involving the sale of property which must be filed or paid with AABs/Revenue Collection Officers (RCOs) under the RDO covering the location of the property.
AVAILMENT OF TAX AMNESTY ON DELINQUENCIES (TAD)
TAD can only be availed of until Dec, 31, 2020*** by those taxpayers with internal revenue liabilities for taxable year 2017 and prior years. Any person, whether natural or juridical, may avail of TAD.
The TAD will be considered fully complied with upon completion of all the steps provided in RR No. 15-2020 on or before Dec. 31, 2020. The December deadline is a further extension provided under RMC No. 61-2020 pursuant to Republic Act (RA) No. 11213 or the Bayanihan to Heal as One Act, which directed government offices to suspend deadlines for the duration of the community quarantine.
SUSPENSION OF BIR AUDIT AND FIELD OPERATIONS
Between Dec. 15, 2020 and Jan. 27, 2021, no field audit, field operations, or any form of business visitation in execution of Letters of Authority (LoAs)/Audit Notices or Mission Orders should be conducted. During this period, taxpayers may enjoy the holidays as no written orders to audit and/or investigate their internal revenue tax liabilities shall be served, unless of course to those that are enumerated in RMC No. 127-2020 who may still be subjected to audit.
Service of notices to avail of the TAD, Estate Tax Amnesty (ETA) and VAPP are not covered by the suspension. Also, taxpayers may still voluntarily pay their known deficiency taxes without the need to secure authority from concerned revenue officials.
It is important for taxpayers to note that after Jan. 27, 2021, BIR audit and field operations will resume and preparations during the suspension will come handy.
As we prepare ourselves for the holidays by closing our year with peace of mind for a fruitful upcoming year, it is the same for our dues and obligations to the government. Before we embark on merry making and making fond memories with our loved ones, it is best that we keep abreast of what is to come since after each ending comes a new beginning. May we have a fruitful 2021.
Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.
Paul Vinces C. Leorna is a senior in-charge of Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.
On Dec. 22, the BIR published RRs to extend deadlines and clarify issues as follows:
a. *BIR Form 1709: Preparation and submission of TPD is only required for taxpayers covered by the submission of BIR Form 1709 and who meet the threshold requirements as provided in RR No. 34-2020
b. **VAPP: Deadline to avail of the VAPP is extended to June 30, 2021. Taxpayers with a duly issued Certificate of Availment may not be audited for 2018 for the tax types covered by the availment. Hence, taxpayers who availed of the VAPP on withholding taxes will be allowed to claim deduction on the corresponding income payment pursuant to RR No. 6-2018
c. ***TAD: TAD can be availed of until June 30, 2021.