Procedures in the Submission of Annual Tax Incentive Report Pursuant to the Joint Administrative Order No. 1, Series of 2019

July 5, 2019 CDA MEMORANDUM CIRCULAR NO. 006-19 TO : All Concerned SUBJECT : Procedures in the Submission of Annual Tax Incentive Report Pursuant to the Joint Administrative Order No. 1, Series of 2019 Section 3 of Republic Act (RA) No. 10963, otherwise known as the Tax Reform for Acceleration and Inclusion Law (TRAIN Law), requires the Cooperative Development Authority (CDA) to submit to the Bureau of Internal Revenue (BIR) a tax incentive report availed by cooperatives registered and enjoying incentives under RA No. 9520, which information shall be included in the database created under RA No. 10708, otherwise known as the Tax Incentives Management and Transparency Act (TIMTA). HTcADC It is the policy of the State to promote fiscal accountability and transparency in the grant and management of tax incentives by developing means to promptly measure the government's fiscal exposure on these grants and to enable the government to monitor, review and analyze the economic impact thereof, and thereby optimized the social benefits of such incentives. SECTION 1. Purpose . This Guidelines shall prescribe the procedures in the submission of Annual Tax Incentives Report by the cooperatives to the Authority pursuant to DOF-CDA-BIR Joint Administrative Order No. 1-2019. SECTION 2. Coverage . All types and categories of cooperatives registered with the CDA and were issued Certificate of Tax Exemption (CTE). SECTION 3. Procedure . The cooperative shall, in the preparation and submission of the Annual Tax Incentive Report, observe the following procedures: 1. Fill up the Annual Income Tax Incentive Report in the form prescribed under Annex "A" of DOF-CDA-BIR Joint Administrative Order No. 1-2019; 2. Print the report and have it signed by the Chairperson and/or General Manager; 3. Submit the hard copy of the required Tax Incentive Report to the CDA Extension Office having jurisdiction to the principal office of the cooperative; Cooperative Banks, Insurance Cooperatives, Electric Cooperatives and Tertiary Cooperatives which are national in scope shall submit to the CDA Central Office. Likewise, soft copy of the report shall be sent to the respective email address of the CDA Central Office/Extension Offices. Central Office/Extension Offices Email Address Central Office [emailprotected] MIMAROPA Extension Office [emailprotected] CAR Extension Office [emailprotected] CARAGA Extension Office [emailprotected] NCR-Manila Extension Office [emailprotected] Region I-Dagupan Extension Office [emailprotected] Region II-Tuguegarao Extension Office [emailprotected] Region III-Pampanga Extension Office [emailprotected] Region IV-Calamba Extension Office [emailprotected] Region V-Naga Extension Office [emailprotected] Region VI-Iloilo Extension Office [emailprotected] Region VII-Cebu Extension Office [emailprotected] Region VIII-Tacloban Extension Office [emailprotected] Region IX-Pagadian Extension Office [emailprotected] Region X-Cagayan de Oro Extension Office [emailprotected] Region XI-Davao Extension Office [emailprotected] Region XII-Kidapawan Extension Office [emailprotected] ARMM [emailprotected] SECTION 4. Date of Submission . The cooperative shall submit the filled-up Annual Income Tax Incentive Report (Annex "A") within the period prescribed below: Accounting Period Year Ending On Deadline of Cooperative Submission Calendar Year December 31 April 30 of the succeeding year Fiscal Year January-November 15 days from the deadline of filing of Annual Income Tax Return SECTION 5. Consolidation and Submission . The Extension Offices shall consolidate and submit the report within thirty (30) calendar days from the deadline of the cooperatives' submission to the CDA Central Office. CAIHTE The CDA Central Office shall consolidate the report of the Extension Offices and submit the same to the BIR within fifteen (15) days from the deadline of submission of the Extension Offices. SECTION 6. Penalty for Non-Compliance . Submission of the compliance requirements under Rule II, Section 5 of the Joint Administrative Order shall be a continuing requirement for the effectivity of the Certificate of Tax Exemption (CTE) of a registered cooperative. Failure of any registered cooperative issued with a Certificate of Tax Exemption (CTE) and availed of tax incentives to comply with the submission of the compliance requirements as required under Section 4 of this Guidelines shall be imposed of the following penalties: First Offense Certificate of Tax Exemption (CTE) shall be deemed revoked and registered cooperative shall be prohibited to avail of tax exemption for a period of 1 year from the date of revocation. Second Offense Certificate of Tax Exemption (CTE) shall be deemed revoked and registered cooperative shall be prohibited to avail of tax exemption for a period of 3 years from the date of revocation. Third Offense Certificate of Tax Exemption (CTE) shall be deemed revoked and registered cooperative shall be prohibited to avail of tax exemption for a period of 5 years from the date of revocation. Fourth Offense Certificate of Tax Exemption (CTE) shall be deemed revoked and registered cooperative shall be prohibited from re-application. Registered cooperatives shall be liable for the payment of taxes immediately upon revocation of the Certificate of Tax Exemption (CTE), inclusive of surcharge, interest and compromise penalty. Upon payment of taxes, registered cooperatives can re-apply for the issuance of CTE which shall be effective only upon the lapse of the period of prohibition to avail of the tax exemption. SECTION 7. Transitory Provisions . The cooperative shall submit to CDA the Annual Tax Incentives Report (Annex "A") covering taxable year 2018 on or before July 31, 2019. SECTION 8. Separability Clause . If any provision of this Guidelines is held to be unconstitutional, the other parts hereof shall continue to be in full force and effect. SECTION 9. Effectivity . This Memorandum Circular shall take effect fifteen (15) days after its publication in the Office of the National Administrative Register (ONAR). aScITE Approved pursuant to BOA Resolution No. 259, S-2019 dated June 18, 2019. For the Board of Administrators By: (SGD.) ORLANDO R. RAVANERA Chairman ANNEX A Cooperative Development Authority Annual Tax Incentives Report Income-Based Tax Incentives for Calendar/Fiscal Year _____ Name of Cooperative ______________________ Registered Address CDA Certificate of Registration Taxpayer Identification No. Type of Cooperative Category of Cooperative Business Activities GENERAL RESERVE FUND Transactions (members only or both members and non-members) No. Date MEMBERS ONLY MEMBERS/ NON-MEMBERS MANILA, NCR (MAIN OFFICE) 123456 000-000-000 ENGAGE IN LENDING 9,000,000 X 18,000,000 X 000-000-000 Certified By: AMOUNT OF SALES/RECEIPTS Tax Incentives Claimed (As declared by RC in the ITR) Net Sale/Services/Interest Income/Other Income Cost of Sales/Services Gross Revenue Expenses Net Surplus for Allocation Net Surplus for Distribution of ISCPR Income Tax Paid VAT Payment MEMBERS NON- MEMBERS TOTAL a b c=(a-b) d e=(c-d) f g h 1,000,000 100 0 100 50 50 1,000,000 1,000,000 2,000,000 500 100 400 Legend: d Expenses **Expenses = Net Sale/Service (a) Cost of Sales Services (b) ? Gross Revenue (c) e Net Surplus for Allocation Gross Revenue (c) Expenses (d) g Income Tax Paid Actual Income Tax Due/Paid for the year for taxable cooperatives h Vat Payments Actual VAT Paid for the Year for Vatable Cooperatives