BIR Ruling [DA-365-06]

June 9, 2006 BIR RULING [DA-365-06] RR 6-2001; BIR Ruling No. DA-513-03 Link2Support 5th Floor TechnoPlaza One Bldg. Orchard Road Eastwood City Cyberpark Bagumbayan, Quezon City Attention: Mr. Charlie O. Guiao Assistant Accounting Manager Gentlemen : This refers to your letter dated February 20, 2006 requesting for opinion on the appropriateness of filing "no operations" return on the deadline, amending the return and remitting withholding taxes after one (1) or two (2) days. As represented, Link2Support is a call center that operates 24 hours daily. At present, it has around 1,000 employees. Because of the number of employees and the 24 hour shift, you do a lot of validation and computation for the night differential, night allowance, overtime, incentives, absences, tardiness, etc. Thus, your payroll computation is a tedious process. Due to the tedious process of validating and computing, your pay-out is scheduled every 10th day of each month which is the deadline for filing the return for taxes withheld on employees' compensation. To comply with the deadline, you file "no operation" return and just amend it and remit the actual taxes withheld from employees after one (1) or two (2) working days. DTcHaA In reply, please be informed that Section 2.81 of Revenue Regulations (RR) No. 2-98, as amended by RR No. 6-2001 provides, viz: "Sec. 2.81. FILING OF RETURN AND PAYMENT OF INCOME TAX WITHHELD ON COMPENSATION (FORM NO. 1601). Every person required to deduct and withhold the tax on compensation, including large taxpayers as determined by the Commissioner, shall make a return and pay such tax on or before the 10th day of the month following the month in which withholding was made to any authorized agent bank within the Revenue District Office (RDO) or in places where there are no agent banks, to the Revenue District Officer of the City or Municipality where the withholding agent/employer's legal residence or place of business or office is located; provided, however, that taxes withheld from the last compensation (December) for the calendar year shall be paid not later than January 15 of the succeeding year; Provided, however, that with respect to taxpayers, whether large or non-large, who availed of the EFPS, the deadline for electronically filing the aforesaid withholding tax return and paying the tax due thereon via the EFPS shall be five (5) days later than the deadlines set above. xxx xxx xxx" Except for those who availed of the electronic filing and payment system (EFPS), RR No. 6-2001 does not provide for any other exception to the required period for filing of various tax returns and payment of taxes due thereon. Accordingly, your practice of filing "no operations" return on the deadline, amending the return and remitting the withholding taxes after one (1) or two (2) days have no basis in, and is not sanctioned by, law. Please be guided accordingly. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered as null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service