Tax Tweets

BIR Issuances

Acceptance of tax returns/payments of internal revenue taxes by Authorized Agent Banks (AABs) on April 5, 2025, and April 12, 2025, Saturdays and extension of banking hours up to 5:00PM for the period April 1-15, 2025

Bank Bulletin No. 2025-01
Issued on January 28, 2025

According to this bank bulletin, all AABs are advised to accept payments on April 5, 2025, and April 12, 2025, and to extend banking hours up to 5:00 P.M. for the period April 1-15, 2025.

All accepted income tax payments on April 5, 2025, and April 12, 2025, shall be reported in the Batch Control Sheet as collection for the following working day, April 7, 2025, and April 14, 2025, respectively.

The machine validation of the Annual Income Tax Return in the deposit slip for the tax payment received shall be on the date of the actual receipt of collection.

The RMC provides for the following summary:

The determination of whether an automobile is Hybrid or Purely Electric shall be reverted to the Department of Energy (DOE)

Revenue Regulations (RR) No. 1-2025
Issued on January 6, 2025

This issuance amends/revises the guidelines and procedures for the processing of the request for tax exemption of Hybrid or Purely Electric Vehicles, as laid down in Section 9 of RR No. 25-2003. This issuance reverts to DOE the determination of whether an automobile is Hybrid or Purely Electric.

Implementing the Tax Provisions of Republic Act No. 9267, otherwise known as “The Securitization Act of 2004”

RR No. 2-2025
Issued on January 8, 2025

The regulations provide that the sale or transfer of assets to the Special Purpose Entity (SPE) in accordance with the Securitization Plan shall be exempt from Value Added Tax (VAT) and Documentary Stamp Tax (DST). Also, transfer of assets by dation in payment by the obligor in favor of the oblige shall not be subject to capital gains tax.

The regulations further provide that the original issuance of Asset-Backed Securities (ABS) and other securities related solely to such securitization transactions shall be exempt from VAT, or any other taxes imposed in lieu thereof. However, it shall be subject to DST. Secondary trades and subsequent transfers of ABS shall be exempt from DST and VAT, or any other taxes imposed in lieu thereof.

On the other hand, the yield or income from the ABS shall be subject to twenty percent (20%) final withholding tax. However, the yield or income of investors from any low cost or socialized housing-related ABS shall be exempt from income tax.

Prescribing Policies and Guidelines for the Implementation of Republic Act No. 12023 or the VAT on Digital Services Law

RR No. 3-2025
Issued on January 17, 2025

The regulations provide for the imposition of 12% VAT on the gross sales derived by resident and nonresident Digital Service Provider (DSPs) from their sale or exchange of services in the Philippines. The phrase “sale or exchange of services” includes the supply or delivery of digital services by DSPs in the Philippines.

The resident VAT-registered DSP, whether or not its buyer is engaged in business, shall file the VAT return and pay the VAT due following the policies and procedures under Title III of the Tax Code and other existing laws, rules, and regulations. However, if the resident VAT-registered DSP is classified as an e-marketplace with nonresident participating merchant or seller, it shall also be liable for:

(i)      electronically filing the required remittance return; and

(ii)     withholding and remitting the 12% VAT due on the gross sales received by its nonresident participating merchant or seller relating to sale of digital services consumed or used in the Philippines within ten (10) days following the end of the month the withholding was made in accordance with Sections 108 (A) and 114 (C) of the Tax Code.

Resident shall register with the BIR following the policies and procedures under Section 236 of the Tax Code.

On the other hand, a nonresident DSP shall register with the BIR through the VAT on Digital Services (VDS) Portal. A Certificate of Registration containing the assigned Taxpayer Identification Number (TIN) and type of registration shall be issued, which shall be used in all its transactions pertaining to the supply or delivery of digital services consumed or used in the Philippines. Failure to register for VAT shall result in the suspension of business operations in the Philippines and imposition of penalties.

The regulations provide for the following requirements on filing of tax returns, and payment and remittance of VAT of nonresident DSPs:

	B2B Transaction	B2C Transaction
Type of Transaction	Business-to-Business Transactions	Business-to-Consumer Transactions
Meaning	Supply or delivery of digital services to natural or juridical persons engaged in business located in the Philippines, and the government of the Philippines or any of its political subdivisions, instrumentalities, or agencies, including government-owned and controlled corporations (“GOCCs”)	Supply or delivery of digital services to persons not engaged in business located in the Philippines.
Requirements on filing of tax returns and payment and remittance of VAT	The persons engaged in business, including the government of the Philippines or any of its political subdivisions, instrumentalities, or agencies, including government-owned GOCCs shall be liable for: 1. Electronically filing the required remittance return; and 2. Withholding and remitting 12% VAT due on purchases of digital services consumed or used in the Philippines within 10 days following the end of the month the withholding was made	The non-resident VAT-registered DSP shall be directly liable for: 1. Electronically filing the VAT return; and 2. Paying the VAT due thereon through simplified pay-only regime in the VDS Portal based on its gross sales relating to the sale of digital services consumed or used in the Philippines within 25 days following the close of each taxable quarter; nonresident VAT-registered DSPs may choose to pay the VAT due on a monthly basis if they seem so convenient. However, they are still required to file the quarterly tax return and pay the corresponding VAT liabilities.
Classified as an e-market place	if the nonresident DSP is classified as an e-marketplace, it shall also be liable for: 1. electronically filing the VAT return; and 2. paying the 12% VAT due on the gross sales received by its nonresident participating merchant or seller relating to sale of digital services consumed or used in the Philippines within twenty-five (25) days following the close of each taxable quarter in accordance with Sections 108 (B) of the Tax Code.
Registration Requirements	For your guidance, please take note of the following dates: February 1, 2025 – RR No. 3-2025 takes effect 15 days after publication in Official Gazette or the BIR’s website. April 2, 2025 – All nonresident DSPs are required to register or update their registration with the BIR within 60 days from effectivity of RR No. 3-2025. June 1, 2025 – All nonresident DSPs shall be subject to VAT after 120 days from effectivity of RR No. 3-2025.

 

Creation of Alphanumeric Tax Code (ATC) for VAT and Final Withholding VAT on Digital Services from Non-Resident Digital Service Provider

Revenue Memorandum Order (RMO) No. 13-2025
Issued on March 19, 2025

The following ATCs are created:

ATC	Description	Tax Rate	Legal Basis	BIR Form No.
VN010	Non-Resident Digital Service Provider	12%	RA No. 12023	2550-DS
WV080	Final Withholding VAT on Purchase of Digital Service consumed in the Philippines from non-resident digital service providers (Private Withholding Agent)	12%	RA No. 12023	1600-VT/2306
WV090	Final Withholding VAT on Purchase of Digital Service consumed in the Philippines from non-resident digital service providers (Government Withholding Agent)	12%	RA No. 12023	1600-VT/2306
WV100	Final Withholding VAT on the gross amount by resident e-marketplace to the non-resident sellers/merchants for the digital services sold/paid through their platform/facility	12%	RA No. 12023	1600-VT/2306

 

Regulation further amending the “De Minimis” benefits provisions of RR No. 2-98, as amended, increasing the Clothing Allowance pursuant to RA No. 11975, the Fiscal Year 2024 General Appropriations Act, and Employees Achievement Awards

RR No. 4-2025
Issued on January 30, 2025

This issuance further amended RR No. 2-1998 with respect to “De Minimis” benefits which are exempt from income tax on compensation as well as from fringe benefit tax.

It increased the tax exemption cap of Uniform and Clothing Allowance to the amount of P7,000 per annum. It also provided that employee’s achievement awards may be in the form of cash, gift certificate or any tangible personal property, with an annual monetary value not exceeding P10,000 received by the employee under an established written plan which does not discriminate in favor of highly paid employees.

Amending RR No. 2-1998 Relative to Withholding Tax Rates on Certain Income Payments Subject to Creditable Withholding Tax Pursuant to Section 57 of the Tax Code, as amended by RA No. 12066

RR No. 5-2025
Issued on February 27, 2025

This issuance further amended Section 2.57.2 of RR No. 2-1998 by revising the withholding tax rates and adjusting the basis of certain income payments, as follows:

Certain Income Payments made by Credit Card Companies	Remittances of Electronic Marketplace Operators and Digital Financial Services Providers to Merchants
On the gross amounts paid by any credit card company in the Philippines to any business entity whether a natural or juridical person, representing the sales of goods/services made by the aforesaid business entity to cardholders — One-half percent (1/2%)	On the gross remittances by e-marketplace operators and digital financial services providers to the sellers/merchants for the goods or services sold/paid through their platform/facility — One-half percent (1/2%)

 

Implementing the Amendments to Section 27, 28, and 34 of the Tax Code, as amended by RA No. 12066

RR No. 7-2025
Issued on February 27, 2025

The regulations prescribe the reduced rate of 20% for Registered Business Enterprises (RBEs) under Enhanced Deduction Regime (EDR) which shall apply starting November 28, 2024, and shall only cover the taxable income derived from registered projects or activities.

Input tax paid on local purchases attributable to VAT-exempt sales shall be deductible from the gross income of the taxpayer in accordance with Section 34(C)(8) of the Tax Code.

For RBEs who availed of the EDR and have already filed their annual income tax return covering calendar year 2024 or fiscal year ending on or before the effectivity of the regulations, the excess income tax payments from the reduction of tax rate from 25% to 20% may be carried forward to the succeeding taxable quarter/year.

Updated Procedures in the Resolution of Requests for Reconsideration on the Denial of Claims for Refund

RR No. 8-2025
Issued on February 27, 2025

The regulations cover request for reconsideration of the full or partial denial of a taxpayer-claimant’s claim for a refund of (1) creditable input taxes under Section 112(A) and (B) of the Tax Code; and (2) excise tax paid on petroleum products under Section 135-A of the Tax Code. This applies to refund applications filed on or after April 1, 2025.

The Regulations specify the following rules:

1. All requests for reconsideration on full or partial denial of a claim for refund should be limited to questions of law. Any issue/s relating to factual determination or appreciation should have been threshed out during the initial processing of the claim for refund and contained in the notice of full or partial denial. Consequently, any factual issue raised in the request for reconsideration shall no longer be entertained.
2. Only the documents previously attached to the taxpayer-claimant’s application for tax refund relevant to the issues raised may be submitted with the request for reconsideration. Introduction of new evidence/document, as well as questions of law already addressed in the Notice of Full or Partial Denial, shall not be allowed during the request for reconsideration.
3. The processing time to act on the taxpayer-claimant’s request for reconsideration shall be within fifteen (15) days from the date of actual receipt of the request for reconsideration by the concerned Processing Office, as provided for under Section 5 hereof. Consequently, failure to file with the Processing Office shall render the request for reconsideration invalid and shall not toll the running of the fifteen (15)-day period to file the request for reconsideration. Hence, the partial or full denial of the refund shall become final and executory after the lapse of such period.
4. No supplemental or amended appeal, or any other pleading of similar import, shall be allowed notwithstanding that the same is filed within the fifteen (15)-day prescribed period to file a request for reconsideration. Further, no second request for reconsideration shall be allowed. The filing of a second request for reconsideration shall not toll the running of the prescriptive period to file an appeal before the Court of Tax Appeals (CTA).
5. Failure to comply with any of these requirements regarding the period, form, or manner of filing shall constitute sufficient ground for the outright denial of the same.
6. The decision on the request for reconsideration shall be issued within the fifteen (15)-day processing period from actual receipt of the request by the Processing Office.
7. Upon timely filing of the request for reconsideration, the processing of the refund claim subject of the request for reconsideration, if granted, shall be made within twenty (20) days from the date the decision is issued.
8. Notwithstanding the filing of the request for reconsideration, the taxpayer-claimant may withdraw the same at any time before it is finally resolved, in which case, the full or partial denial shall stand as though no such request for reconsideration has been filed. The full or partial denial shall then be deemed final upon the lapse of the fifteen (15)-day period from the date of receipt by the taxpayer-claimant of the notice of full or partial denial of the claim for refund.
9. In case of full or partial denial of the request for reconsideration, or in case of inaction thereon by the CIR or his duly authorized representative, the taxpayer-claimant may appeal the full or partial denial of the request for reconsideration or the full or partial denial of the claim for refund in case of inaction on the request for reconsideration, to the CTA within thirty (30) days from receipt of the decision or from the lapse of the fifteen (15)-day period to decide thereon

Implementing Pertinent Provisions of Section 295(D) of the Tax Code, as Amended by Section 18 of RA No. 12066, particularly on the Treatment of Local Sales of Goods and/or Services by Registered Business Enterprises (RBEs)

RR No. 9-2025
Issued on February 27, 2025

The regulations seek to implement Section 295(D) of the Tax Code on the treatment of local sales of goods and/or services by RBEs which shall be subject to subject to 12% VAT, unless otherwise exempt or zero-rated.

	B2B Transaction	B2C Transaction
Type of Transaction	Buyer is engaged in Business-to-Business Transactions	Buyer is engaged in Business-to-Consumer Transactions
Meaning	Supply or delivery of goods or services to natural or juridical persons engaged in business located in the Philippines, and the government of the Philippines or any of its political subdivisions, instrumentalities, or agencies, including GOCCs	Buyer is not engaged in business.
Invoicing by the RBE-Seller and Payment of the Buyer	RBE-seller shall bill the transaction inclusive of the VAT, shown as a separate item in the invoice that will be tagged as “VAT on Local Sales.” Since the remittance of the corresponding VAT on local sales will be on the account of the buyer, this will not be included in the total amount due from the buyer. The buyer shall pay the purchase price to the RBE-seller, exclusive of VAT on local sales.	The seller shall bill the transaction inclusive of VAT, which is shown as a separate item in the invoice that will be tagged as “VAT on Local Sales.”
Liability to File and Pay VAT	The buyer of the goods or services shall be liable to pay and remit the corresponding VAT from the transaction.	The seller shall be responsible in remitting the VAT on local sales it charged to its buyers that are not engaged in business.
Manner of Filing and Payment	1. For purchase of goods from economic zones or freeport. — The filing and payment of the “VAT on B2B local sales by RBEs” shall be on a per transaction basis. In the meantime, BIR Form No. 0605 shall be utilized and shall be immediately transmitted to the RBE-seller, as part of the requirements prior to the release of goods from the economic zone or freeport. 2. For purchase of services from economic zones or freeport. — The filing and payment of the “VAT on B2B local sales by RBEs” shall be on a monthly basis. In the meantime, BIR Form No. 1600-VT shall be utilized and shall be filed on or before the tenth (10th) day of the month following the month in which the transaction transpired. The buyer shall issue withholding VAT certificate (BIR Form No. 2307) to the RBE-seller either on the aggregated quarterly VAT on local sales payments or upon demand of the RBE-seller.3. For purchases of goods and/or services from BOI-registered enterprises. — The filing and payment of the “VAT on B2B local sales by RBEs” shall be on a monthly basis. In the meantime, BIR Form No. 1600-VT shall be utilized and shall be filed on or before the tenth (10th) day of the month following the month in which the transaction transpired. The buyer shall issue BIR Form No. 2307 to the RBE-seller either on the aggregated quarterly VAT on local sales payments or upon demand of the RBE-seller.	1. Registered Activity of the RBE-Seller is under the 5% GIE/SCIT regime. — Until a new form is prescribed, the seller-RBE shall file BIR Form No. 0605 for the VAT on local sales paid by their buyers/consumers. This form shall be filed by the 10th day of the month following the transaction. For RBEs with other registered activity/ies that is/are not under the 5% GIE or SCIT regime, they shall be required to register as VAT. The local sales shall be reported under the gross sales subject to VAT in the quarterly VAT returns (BIR Form No. 2550Q). The VAT paid through BIR Form No. 0605 during the first two (2) months of the quarter shall be reflected as VAT credit in the BIR Form 2550Q. 2. Registered Activity of the RBE-Seller is under ITH/EDR or Regular Income Tax Rate. — Since this requires VAT registration, the RBE-seller shall file the corresponding quarterly VAT Return (QVR) for the local sales subject to VAT including the VAT on local sales

 

For VAT-registered buyers of RBEs, no input VAT shall be claimed until the corresponding VAT has been paid on the purchase from RBE-sellers. The same must be supported by the following:

A.     Sales Invoice issued by the RBE showing the amount of VAT on local sales; and

B.     Copy of the corresponding duly filed BIR Form No. 1600VT or BIR Form No. 0605, whichever is applicable.

On the other hand, for non-VAT registered buyers, VAT paid on purchases from RBEs shall form part of the cost or charged to expense account.

Transitory Provisions

a.     RBEs with remaining registered manual invoices that include the term “VAT/VAT Amount” in the breakdown of sales may be stamped with “VAT on Local Sales” upon issuance to buyers, until fully consumed, without the need for approval from the BIR. For subsequent applications for Authority to Print Invoices, the new layout should replace the term “VAT/VAT Amount” in the breakdown of sales with “VAT on Local Sales.”

b.     In cases where the invoices are Exempt/VAT-Exempt and do not include the term “VAT/VAT Amount,” such invoices may be stamped by the seller with “VAT on Local Sales” upon issuance to buyers, without the need for approval from the BIR. For subsequent applications for Authority to Print Invoices, the new layout shall include the term “VAT on Local Sales” in the said invoice.

c.     RBEs using registered Cash Register Machines/Point-of-Sales (CRM/POS), Computerized Accounting System (CAS), Computerized Books of Accounts with Accounting Records or other registered invoicing system/software shall reconfigure/rename their system by changing/renaming the term “VAT/VAT Amount” in the breakdown of sales with “VAT on Local Sales,” or adding the same in case the “VAT/VAT Amount” is not applicable, until December 31, 2025.

Amending the Pertinent Provisions of RR No. 16-2005 to Implement the VAT provisions under Sections 106, 108, 109, and 112 of the Tax Code, as amended by RA No. 12066

RR No. 10-2025
Issued on February 27, 2025

These regulations amended pertinent provisions of RR No. 16-2005 covering the following provisions of the Tax Code:

A.     VAT zero-rating under Section 106(A)(2) for sales of goods

The following sales by VAT-registered persons shall be subject to 0% VAT:

•     Export Sales which shall mean:

–     Sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported, paid for in acceptable foreign currency or its equivalent in goods or services, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);

–     Sale of raw materials or packaging materials to a non-resident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer’s goods and paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the BSP;

–     Sale of goods to an export-oriented enterprise. Export sales of the export-oriented enterprise should be at least seventy percent (70%) of the total annual production of the preceding taxable year. For this purpose, “total annual production” for goods, refers to the volume or sales value of production, manufactured and sold, including mark-up, by the export-oriented enterprise during taxable year; Such goods should be directly attributable to the export activity of the export-oriented enterprise. For this purpose, ‘directly attributable’ shall refer to goods that are incidental to and reasonably necessary for the export activity of the export-oriented enterprise;

–     Sale of goods, supplies, equipment, and fuel to persons engaged in international shipping or international air transport operations;

–     Sales to bonded manufacturing warehouses of export-oriented enterprises.

•     Sales to persons or entities whose exemption from direct and indirect taxes under special laws or international agreements to which the Philippines is a signatory effectively subjects such sales to zero-rate.

•     Sale of raw materials, inventories, supplies, equipment, packaging materials and goods, to RBEs qualified for VAT zero rating on their local purchases under Title XIII of the Tax Code

B.     VAT zero-rating under Section 108 (B) for sale of services

The following sales by VAT-registered persons shall be subject to 0% VAT:

•     Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the BSP;

•     Services other than processing, manufacturing or repacking rendered to a person engaged in business conducted outside the Philippines or to a non-resident person not engaged in business who is outside the Philippines when the services are performed, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the BSP;

•     Services rendered to persons or entities whose exemption from direct and indirect taxes under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate;

•     Services rendered to persons engaged in international shipping or air transport operations, including leases of property for use thereof;

•     Services performed for an export-oriented enterprise. Export sales of the export-oriented enterprise should be at least seventy percent (70%) of the total annual production of the preceding taxable year. For this purpose, “total annual production” for services refers to the value of services rendered by the export-oriented enterprise during the taxable year; Such services should be directly attributable to the export activity of the export-oriented enterprise. For this purpose, ‘directly attributable’ shall refer to services that are incidental to and reasonably necessary for the export activity of the export-oriented enterprise, including janitorial, security, financial, consultancy, marketing and promotion services, and services rendered for administrative operations such as human resources, legal and accounting;

•     Transport of passengers and cargo by domestic air or sea vessels from the Philippines to a foreign country. Gross sales of international air or shipping carriers doing business in the Philippines derived from transport of passengers and cargo from the Philippines to another country shall be exempt from VAT; however, they are still liable to a percentage tax of three percent (3%) based on their gross sales derived from transport of cargo from the Philippines to another country as provided for in Section 118 of the Tax Code;

•     Sale of power or fuel generated through renewable sources of energy such as, but not limited to, biomass, solar, wind, hydropower, geothermal and steam, ocean energy, and other emerging sources using technologies such as fuel cells and hydrogen fuels; Provided, however, that VAT zero-rating shall apply strictly to the sale of power or fuel generated through renewable sources of energy, and shall not extend to the sale of services related to the maintenance or operation of plants generating said power;

•     Services, including provision of basic infrastructure, utilities, and maintenance, repair and overhaul of equipment, rendered to qualified RBEs as defined under Title XIII of the Tax Code, that are directly attributable to the registered project or activity of the qualified RBE, including incidental expenses thereto.  Health maintenance organization (HMO) plans acquired by RBE for its employees who are directly involved in the operations of their registered projects or activities and forming part of their compensation package shall be considered as “directly attributable” in the registered project or activity of the qualified RBEs subject to the conditions provided under the existing laws, rules and regulations regarding the availment thereof. This excludes HMO coverage or benefits extended to family member/s or assigned beneficiary/ies of the employees

C.     VAT-exempt transactions under Sections 109(u) and 109(dd), as follows:

•     Importation of fuel, goods, and supplies used for international shipping or air transport operations. Said fuel, goods and supplies shall be used exclusively or shall pertain to the transport of goods and/or passenger from a port in the Philippines directly to a foreign port, or vice versa, without docking or stopping at any other port in the Philippines unless the docking or stopping at any other Philippine port is for the purpose of unloading passengers and/or cargoes that originated from abroad, or to load passengers and/or cargoes bound for abroad:;

•     Importation of goods by an export-oriented enterprise whose export sales is at least seventy percent (70%) of the total annual production or sales of the preceding taxable year: Provided, that such goods are directly attributable to the export activity of the export-oriented enterprise

D.     VAT refund/credit under Section 112(C)

•     The application should be filed within two (2) years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made;

•     A VAT-registered person whose registration has been cancelled due to retirement from or cessation of business, or due to changes in or cessation of status may, within two (2) years from the date of cancellation, apply for the issuance of tax credit certificate or cash refund for any unused input tax which he may use in payment of his other internal revenue taxes or apply for refund for any unused input tax; for purposes of dissolution or cessation of business, the date of cancellation is the date of the issuance of the BIR Tax Clearance.

•     The 90-day period to process and decide whether to deny or grant refund for creditable input tax shall start from the filing of the claim up to the release of the payment of the approved VAT refund: Provided that, the claim/application is considered to have been filed only upon submission of the duly-certified copies of invoices and other documents in support of the application as prescribed under pertinent revenue issuances.

•     The taxpayer shall have fifteen (15) days from receipt of the full or partial denial to file a request for reconsideration. The CIR or his duly authorized representative shall decide on the request for reconsideration within 15 days from receipt thereof. Failure to file a request for reconsideration within the 15-day period shall render the decision final.

•     In case of full or partial denial of the request for reconsideration, or failure on the part of the CIR to act on the application for refund or request for reconsideration within the periods prescribed above, the taxpayer affected may appeal with the CTA within thirty (30) days:

–     After expiration of the 90 days, in cases of inaction by the CIR;

–     From receipt of the decision denying the request for reconsideration; or

–     After lapse of the 15-day period to decide on the request for reconsideration, in cases of inaction by the CIR.

•     VAT refund claims shall be classified into low-, medium-, and high- risk, with the risk classification based on the amount of VAT refund claim, tax compliance history, frequency of filing vat refund claims, among others.

•     In case of disallowance by the COA, only the taxpayer shall] be liable for the disallowed amount without prejudice to any administrative liability on the part of any employee of the BIR who may be found to be grossly negligent in the grant of refund.

Implementing Secs. 237 and 237-A of the Tax Code, as Amended by RA No. 12066 (CREATE MORE Act) re: Mandatory Issuance of Electronic Invoices, Electronic Sales Reporting and Additional Allowable Deduction Related Thereto

RR No. 11-2025
Issued on February 27, 2025

A.     The following taxpayers are mandated to issue electronic invoices in a structured invoice data which can be easily extracted electronically from the invoice and can be readily transmitted to the BIR for electronic sales reporting:

1.     Taxpayers engaged in e-commerce or internet transactions;

2.     Taxpayers under the jurisdiction of the Large Taxpayers Service (LTS);

3.     Taxpayers classified as Large Taxpayers under EOPT Act and RR No. 8-2024;

4.     Taxpayers using Computerized Accounting System (CAS), and Computerized Books of Accounts (CBA) with Accounting Records (with electronic invoicing) and other invoicing software; and

5.     Upon the establishment by the BIR of a system capable of storing and processing the required data to be transmitted to it, the following taxpayers are mandated to issue electronic invoices:

i.     Taxpayers engaged in the export of goods and services pursuant to Secs. 106 and 108 of the Tax Code, subject to certain exceptions;

ii.    Registered Business Enterprises availing of Tax Incentives under Section 304(D) of the Tax Code, as amended, subject to certain exceptions;

iii.   Taxpayers using Point-of-Sales (POS) System; and

iv.    Other taxpayers as may be required by the Commissioner.

For those falling under items A (1) to (3), taxpayers have a period of 1 year from the effectivity of regulations or until March 14, 2026, to comply with the electronic invoicing requirements (issuance of electronic invoice).

B.     The following taxpayers shall be covered by the Electronic Sales Reporting System requirement:

1.     Taxpayers engaged in e-commerce or internet transactions, classified as Small, Medium and Large Taxpayers;

2.     Taxpayers under the jurisdiction of the LTS;

3.     Taxpayers classified as Large Taxpayers under EOPT Act and RR No. 8-2024;

4.     Taxpayers using CAS, and CBA with electronic invoicing and other invoicing software;

5.     Taxpayers engaged in the export of goods and services pursuant to Sections 106 and 108 of the Tax Code;

6.     Registered Business Enterprises availing of Tax Incentives under Section 304(D) of the Tax Code, as amended;

7.     Taxpayers using POS System; and

8.     Other taxpayers as may be required by the Commissioner.

Exemption: All taxpayers classified as Micro Taxpayers shall be exempted from the mandatory requirement to use and issue electronic invoice. However, this exemption does not preclude Micro Taxpayers who are already using electronic invoices, if any, or those who choose to voluntarily use them.

Additional Allowable Deductions for Taxpayers using Both Electronic Invoices and Electronic Sales Reporting System:

Taxpayer Classification	Allowed Additional Deductions from Taxable Income
Micro and Small Taxpayers	100% of the total cost for setting up an electronic sales reporting system
Medium and Large Taxpayers	50% of the total cost for setting up an electronic sales reporting system

 

Further amending Section 5 of RR No. 3-69, relative to the Due Process Requirement in the service of execution of summary remedies

RR No. 12-2025
Issued on March 6, 2025

The amendment to Section 5(a) provides the persons upon whom the service of the Warrant of Distraint and/or Levy (WDL) may be served for the following:

a.     Individual taxpayers – upon the taxpayer himself/herself, or authorized representative, or to a member of household of legal age with sufficient discretion, and shall require the same to acknowledge the receipt of the warrant

b.     Corporations – President, Vice President, Manager, Treasurer, or Comptroller or to any responsible person of the corporation who customarily receives correspondence

c.     In case the taxpayer (individual or corporation) refuses to receive the warrant or is absent from the given address – the warrant shall be constructively served by requiring two (2) credible witnesses who are not BIR employees preferably barangay officials, to sign in the acknowledgment portion of the warrant and require a copy of the ID as proof of witness and leave the duplicate copy of the warrant at the premises of the taxpayer; the warrant shall also be sent thru registered mail and/or electronic email to the taxpayer

The additional provision, Section 5(c), provides the service of warrants and notices in case taxpayer previously reported as CBL has resurfaced, either when the taxpayer personally appears before any BIR Office or when their whereabouts are known to the BIR. In such cases, the warrant and other served notices / correspondences shall be simultaneously served to the taxpayer or authorized representative.

Policies and guidelines in the reporting of Cannot be Located (CBL) Taxpayers and procedures in handling the cases pertaining thereto

RMO No. 4-2025
Issued on January 14, 2025

This memorandum is issued to:

–     define a Cannot Be Located (CBL) taxpayer;

–     identify the acceptable documents that will support the report of a revenue officer that a taxpayer is a CBL taxpayer;

–     identify concerned offices that shall be responsible for the approval of the List of CBL taxpayers and those responsible for its publication through the official BIR website;

–     provide the policies and procedures when published CBL taxpayers are found/located or have resurfaced;

–     provide guidelines in the issuance of tax deficiency assessments to CBL Taxpayers who have received a LOA prior to being tagged as CBL;

–     provide policies and procedures on reporting of dockets of CBL taxpayers with reported delinquent accounts; and

–     prescribe procedures for the tagging and un-tagging of the CBL status of these taxpayers

Circularizing EO No. 74 titled “Immediate Ban of Philippine Offshore Gaming, Internet Gaming, and Other Offshore Gaming Operations in the Philippines, and for other purposes”

Revenue Memorandum Circular (RMC) No. 02-2025
Issued on January 7, 2025

The issuance circularizes EO No. 74 titled “Immediate Ban of Philippine Offshore Gaming, Internet Gaming, and Other Offshore Gaming Operations in the Philippines, and for Other Purposes” for the information and guidance of all internal revenue officials, employees and others concerned.

The EO provides that all POGOs / Internet Gaming Licensees and other offshore gaming operations and other offshore gaming-related / auxiliary / ancillary services with issued licenses, permit or authorizations shall completely cease operations, including the winding up of their affairs, on December 31, 2024, or earlier.

Amending Certain Provisions of RMC Nos. 11-2024, 12-2024, 13-2024, and 19-2024, Provide Clarifications/Transitory Provisions and to align them with the provisions of RA No. 11976 (EOPT Act), its Implementing Rules and Regulations and other issuances

RMC No. 5-2025
Issued on January 16, 2025

This issuance is issued to update the following:

RMC No. 11-2024 — Clarifies the tax treatment of lease accounting by lessees under Philippine Financial Reporting Standard 16 in relation to Sections 34(A), 34(K), 106, 108, 179, 194 of the Tax Code, as amended, RR No. 19-86, as amended, and RR No. 02-98, as amended. The amendments are as follows:

•     The initial direct cost paid or incurred by the lessee in relation to the lease agreement shall be claimed as outright expenses in the year it was paid or incurred subject to substantiation requirements pursuant to Section 34(A)(l)(b) of the Tax Code of 1997, as amended. The same shall be subject to withholding tax pursuant to Section 9 of EOPT and Section 7 or RR No. 4-2024.

•     The amounts paid by the lessee for certain expenses, which are properly for the account of the lessor as indicated in the contractual agreement between the parties, shall be allowed as deductions during the year the same has been paid or accrued pursuant to Section 34 of the Tax Code of 1997, as amended, which shall be properly substantiated with invoices issued by the lessor in the name of the lessee. Thus, it will form part as gross sales of lessor and allowable as deduction on the part of the lessee.

•     The corresponding input VAT shall only be creditable to the lessee for the amount of rentals paid incurred/accrued, which shall be evidenced by a VAT Invoice pursuant to Section 110 in relation to Section 113 of the Tax Code, as amended.

RMC No. 12-2024 — Clarifies the treatment of foreign currency transactions for financial reporting and internal revenue tax purposes. The amendments/ clarifications are as follows:

•     In determining the date of transaction (which shall be used to determine the reportable amount of foreign currency transactions), the enactment of RA 11976 or EOPT Act shall be taken into consideration which provides the revised bases for the reportable amounts for VAT, OPT and withholding taxes, as follows:

◦    For VAT – gross sales as supported by a corresponding VAT invoices

◦    For Other Percentage Tax – gross quarterly sales depending on the type of transaction subject to the said taxes.

◦    For Excise:

•     Specific Tax – The excise taxes imposed based on weight or volume capacity or any other physical unit of measurement.

•     Ad valorem Tax – The excise tax shall be based on selling price or other specified value of goods before the removal/release of the excisable products;

For DST – value provided in the documents subject to stamp tax; and

For withholding taxes – value of the taxable income payment at the time it has become payable, accrued or recorded as an expense or asset, whichever is applicable, in the payor’s books, or at the issuance by the seller of the sales invoice or other adequate document to support such payable, whichever comes first.

•     The use of average rate for a period under Philippine Accounting Standards (PAS) 21 for Foreign Currency Transactions is not permitted for tax purposes. For tax purposes, foreign currency transactions shall be converted to Philippine Peso using only the spot rate of exchange on the date of transaction. For financial reporting purposes, PAS 21 allows a rate that approximates the actual rate at the date of the transaction.

•     Taxpayers are given freedom to choose the source of forex rates to be used that are deemed appropriate for their foreign currency transactions subject to certain conditions.

•     The practice of offsetting or netting of separate and distinct transactions, and the accounting and recording of the same and its related/incidental transactions (e.g., forex gains/losses) in the taxpayer’s books, is strictly prohibited for tax purposes.

•     The notarized sworn statement informing the concerned BIR offices of electing the use of forex rates other than BAP published rates shall be submitted within 30 days prior to the start of the taxable year.

RMC No. 13-2024 — Clarifies the treatment of retirement benefits expense for financial reporting and tax purposes. The clarifications are as follows:

•     The RMCs issued by the BIR to address the gaps between the PFRS and the Tax Code only cover the standards under the full PFRS. The PFRS for Small-Medium Enterprises (SMEs) and Small Entities were excluded from the coverage since certain standards adopted in the full PFRS are not applicable to PFRS for SMEs and Small Entities.

•     SMEs and/or Small Entities may avail of the provisions of RMC No. 13-2024 on an optional basis upon compliance with the required disclosure under PFRS.

•     In the absence of the actuarial valuation report for funding, the taxpayer cannot use the current service cost under the actuarial valuation report under PAS 19R as replacement of normal cost.

•     If the taxpayer contributed to the retirement fund before the date of filing of a Tax Qualified Plan but within the taxable period of the interim period between the date of filing and issuance of certificate of qualification, the taxpayer cannot claim the contribution up to normal cost as a deductible expense.

•     Employee covered by a retirement benefit plan but are determined (at the time of retirement) to be not qualified under the same retirement benefit plan, cannot be covered by RA No. 7641.

•     An employee who was not included in the retirement benefit plan of the company but qualified under RA No. 7641, is authorized to claim exempt benefit

RMC No. 19-2024 — Clarifies the tax treatment of interest expense paid or incurred on indebtedness in connection with the taxpayer’s profession, trade or business and other related matters. The amendments are as follows:

•     The requirement to withhold taxes in order to claim the interest expense as a deduction from the gross income was repealed under Section 5 of the EOPT Act, as implemented by Section 6 of RR No. 4-2024.

Clarifies certain issues pertaining to the mandatory requirements for tax credit or refund of excess/unutilized Creditable Withholding Taxes on income pursuant to Section 76(C), in relation to Sections 204(C) and 229 of the Tax Code

RMC No. 14-2025
Issued on February 19, 2025

This Circular clarifies and updates the mandatory requirements for tax credit or refund claims of excess/unutilized Creditable Withholding Taxes (CWT) under Section 76(C) of the Tax Code as follows:

1. Submitted copies of BIR Form No. 2307 (thru digital transmission or physical delivery) are acceptable if verified against the SAWT; original copies are not required.
2. A reproduction of the original copy of BIR Form No. 1606 is sufficient for real estate business taxpayer-claimants; the processing office is mandated to verify from the BIR database if the said return was filed by the claimant.
3. Section 76(C) of the Tax Code applies only to corporate claimants, while individual taxpayers can base their claims on Section 58(E) in relation to Section 204 of the Tax Code.
4. Individual taxpayers have new documentary requirements under Section 58(E) and Section 204 of the Tax Code. However, the general policies and guidelines in the mandatory documentary requirements in RMC No. 75-2024 and the procedures in the processing in RMO No. 25-2024 remain the same for both corporate and individual claimants.
5. Tax returns cannot be amended once a tax credit/refund claim is filed, or an Electronic Letter of Authority (eLA) is issued.

Amending certain provisions and procedures under RMO 25-2024 in the Processing of Tax Credit or Refund of Excess/Unutilized Creditable Withholding Taxes (CWT) on Income

RMO No. 8-2025
Issued on February 19, 2025

To realign inconsistencies on some provisions of RMO No. 25-2024 in relation to Section 76(C), Sections 204(C) and 229 of the Tax Code, the following amendments are hereby introduced.

I.     Verification of Proof of Payment of Withholding Taxes by Withholding Agents

For BIR Form No. 2307, it must be established that the corresponding withholding tax was declared and included in the Alphabetical List of Payees filed by the taxpayer-claimant’s respective withholding agents in the BIR Form No. 1604-E or 1601-EQ, whichever is applicable.

For BIR Form No. 1606, it must be established that the taxpayer engaged in real estate business claiming for the creditable taxes withheld had filed and remitted the taxes withheld to the government

II.    Request for Data/Documents by the Processing Office

The assigned ROs shall, within 30 days upon official receipt of the application for income tax credit/refund, request for the pertinent document/s from the appropriate BIR Office

The BIR office where the data/document/s is/are being requested shall furnish the requesting processing office the requested data/document/s within fifteen (15) days from receipt of such request.

III.   Amendments to Annexes “D.1” and “D.2” of RMO No. 25-2024 on the procedure in the verification of claims for income tax credit/refund

Processing of the claim shall proceed accordingly without awaiting the result of the checking of the RDO or LTAD/LTDO that has jurisdiction over the withholding agent. If found later that the withholding agent did not remit the taxes withheld, it is upon the RDO or LTAD/LTDO to enforce the collection of the said unremitted taxes withheld.

Regarding documents required to be attached to the docket, the following were added:

1.     For BIR Form No. 2307. – BIR Form No. 1604-E together with the Alphabetical List of Payees filed by the taxpayer-claimant’s respective withholding agents or results of verification from the RDO/LT-DPQAD having jurisdiction over the withholding agent or NODC/RDC/MOMD;

2.     For BIR Form No. 1606. – BIR Payment Certifications in accordance with the format prescribed under RMO No. 7-2016.

Availability of the Alphalist Data Entry and Validation Module Version 7.4

RMC No. 15-2025
Issued on February 25, 2025

The circular informed all taxpayers that the Alphalist Data Entry and Validation Module Version 7.4 is now available for use and can be downloaded from the BIR website. The 7.4 version comprises of the newly created alphanumeric tax codes and updated rates for transactions under the creditable and final withholding taxes.

Clarifying the proper tax treatment of joint ventures/consortiums formed for the purpose of undertaking construction projects under Section 22(B) of the Tax Code, in relation to RR Nos. 10-2012 and 14-2023, and the administrative requirements for all joint ventures/consortiums pursuant to Section 236 of the same code

RMC No. 21-2025
Issued on March 24, 2025

This circular provides that gross payments to joint ventures/consortium not taxable as a corporation are not subject to 2% creditable withholding tax. However, these are subject to 12% VAT, and consequently to the creditable withholding VAT pursuant to Section 114 of the TRAIN Law as implemented by Section 4-114-2(a) of RR No. 13-2018, as amended.

The co-venturer/member of a joint venture/consortium not taxable as a corporation shall each be responsible in reporting and paying the appropriate income taxes on their distributive share based on the net income as declared in the annual income tax return filed by the joint venture/consortium, and not on the actual distribution of the net income to the co-venturer/members of a joint venture/consortium. Such distributive share is subject to 15% creditable withholding tax under Section 57 of the Tax Code except if it falls under the Official Development Assistance Act of 1996.

Income payments made by the joint venturers or consortiums to their local / resident suppliers of goods and services other than those covered by other tax rates shall be subject to 1% (goods) or 2% (services).

Creation of Alphanumeric Tax Code (ATC) of Selected Revenue Source under RR No. 2-1998

RMO No. 9-2025
Issued on February 27, 2025

The following ATCs are created:

ATC	Description	Tax Rate	Legal Basis	BIR Form No.
WI559 WC559	Sale of Residential House and Lot and Other Residential Dwellings Individual Corporate	5%	RR No. 2-1998	1606/2307
WI560 WC560	Sale of Real Property Classified as Ordinary Assets of the Seller/Transferor Other than Sale of Residential House and Lot and Other Residential Dwellings Individual Corporate	6%	RR No. 2-1998	1606/2307

 

SEC Issuances

Joint Certification for Applications to Increase Capital Stock by way of Cash Infusion

SEC Notice
Issued on January 14, 2025

This notice announces that a new format for cover sheet and a Joint Certification shall be used by stock corporations for applications to increase authorized capital stock which involve increasing the number of shares only and the consideration for the issuance of shares is cash (in Philippine pesos) only, filed before the Financial Analysis and Audit Division of the Company Registration and Monitoring Department.

According to the SEC, the joint certification shall be submitted in lieu of the separate Certificate of Increase, Directors’ Certificate, Treasurer’s Affidavit, and Secretary’s Certificates on the List of Stockholders, Non-Existence of Intra-Corporate Dispute, and Waiver of Preemptive Rights.

Alternative mode for distributing and providing copies of the Notice of Meeting, Information Statement, and other Documents in connection with the holding of Annual Stockholders’ Meeting (“ASM”) and Special Stockholders’ Meeting (“SSM”) for the year 2025 of all Publicly Listed Companies, and other companies with registered securities under the supervision of Markets and Securities Regulation Department

SEC Notice
Issued on March 13, 2025

This notice provides that concerned companies that would hold its meeting for 2025 are allowed to notify their stockholders via the alternative mode of causing the publication of the Notice of Meeting in the business section of two (2) newspaper of general circulation, in print and online format, for two (2) consecutive days.

The last publication of the Notice of Meeting (print and on-line) should be made not later than twenty-one (21) days prior to the scheduled Meeting.

Tax Identification Number (TIN) Validation for eSECURE and eFAST

SEC Notice
Issued on March 13, 2025

This notice provides that starting March 17, 2025, the SEC will implement the TIN validation for the following online services:

• Electronic SEC Universal Registration Environment (eSECURE)

• Electronic Filling and Submission Tool (eFAST)

According to this notice, existing users of these online services will be required to validate their TINs, which may require updating of their records as follows:

• For eSECURE: updating the TIN

• For eFAST: updating the profile, including the TIN and birthdate

Grace Period for compliance with the Securities Registration requirement under SEC Memorandum Circular No. 12, series of 2024 or “SEC RENT”

SEC Notice
Issued on March 31, 2025

This notice provides that registration of securities by real estate developers and/or managers involved in the sale or offer for sale or distribution of investment contracts, certificates of participation or participation in profit-sharing agreements over rental pools agreements of real estate properties under the simplified registration statement provided under the Securing & Expanding Capital in Real Estate Non-Traditional Securities or “SEC RENT,” should be made on or before 30 September 2025, otherwise, the Commission shall impose corresponding penalties for non-compliance.

PDIC ISSUANCE

PDIC raises the Maximum Deposit Insurance Coverage to ₱1 million

Press Release 11-25
Issued on February 28, 2025

Effective March 15, 2025, the Maximum Deposit Insurance Coverage (MDIC) for deposits in banks will be doubled from ₱500,000 to ₱1 million, per depositor, per bank.

DOF ISSUANCE

Tax Amnesty on Real Property Taxes under RA 12001 or the “Real Property Valuation and Assessment Reform Act” (RPVARA)

DOF-BLGF Memorandum Circular No. 003-2025
Issued on January 6, 2025

Section 30 of RPVARA provides for a tax amnesty on real property taxes and special levies. In line with this, Section 56 of its Implementing Rules and Regulations is reiterated to guide the implementation of the tax amnesty as follows:

1. The tax amnesty applies to penalties, surcharges, and interest on all unpaid real property taxes, including those related to the Special Education Fund, Idle Land Tax, and other Special Levy Taxes incurred prior to the effectivity of the RPVARA on July 5, 2024.
2. The real property tax amnesty is available for a period of two (2) years following the effectivity of the RPVARA, or until July 5, 2026.
3. Delinquent real property owners may avail themselves of the tax amnesty through either a one-time payment or an installment payment.
4. The LGUs may issue an ordinance to determine the means and method of payment only. Non-issuance of such an ordinance shall not prevent the implementation of the grant of tax amnesty.
5. The tax amnesty does not apply to the following categories of real properties:

a)     Delinquent real properties which have been disposed of at public auction to satisfy the real property tax delinquencies;

b)     Real properties with tax delinquencies which are being paid pursuant to a compromise agreement; and

c)     Real properties subject of pending cases in court of real property tax delinquencies.