Policies and Procedures for the Identification of Top Withholding Agents of Revenue District Offices Pursuant to the New Criteria Prescribed under Revenue Regulations No. 7-2019

September 25, 2019 OPERATIONS MEMORANDUM NO. 020-19 TO : All Concerned Regional Directors ATTENTION : All Concerned Revenue District Officers SUBJECT : Policies and Procedures for the Identification of Top Withholding Agents of Revenue District Offices Pursuant to the New Criteria Prescribed under Revenue Regulations No. 7-2019 Pending the issuance of an appropriate revenue issuance for the implementation of Revenue Regulations (RR) No. 7-2019 prescribing the new criteria for the identification of Top Withholding Agents (TWAs), and to conform with the mandate of ease of doing business by ensuring that the list of TWAs only reflect taxpayers who are compliant to the prescribed criteria, the following policies and procedures shall be strictly complied with for purposes of publishing a new list of TWAs pursuant to the criteria prescribed by the said RR: HTcADC 1. The new list of TWAs shall refer to those taxpayers whose gross sales/receipts, gross purchases or claimed deductible itemized expenses, as the case may be, amounting to TWELVE MILLION PESOS (P12,000,000.00) or more as declared in their duly-filed 2018 Annual Income Tax Returns (BIR Form Nos. 1701 and 1702). Accordingly, those top withholding agents under the existing list of TWAs who shall qualify under the above criteria of RR No. 7-2019 shall remain as such and therefore the newspaper publication requirement shall no longer be necessary since their names were already included in the previously published lists as TWAs. 2. The concerned RDOs shall identify taxpayers under their jurisdiction who shall qualify as TWAs according to the above-prescribed criteria. These qualified taxpayers shall be included in the list of taxpayers for inclusion as TWAs which shall be subsequently published in the newspaper of general circulation. 3. Those existing TWAs who did not qualify to the new prescribed criteria, including those enumerated below notwithstanding their satisfaction to the new criteria, shall be included in the list for deletion which shall likewise be published in the newspaper of general circulation. a. National government agencies, government-owned or controlled corporations, state universities and colleges, and local government units; b. Taxpayers who were included because of one-time transactions ( i.e. , estate and donor's tax); c. Individual taxpayers deriving income on commission basis such as but not limited to insurance agent, and real estate broker, subject to verification of their duly-filed 2018 Quarterly Income Tax Returns (BIR Form No. 1701Q) in order to determine the regularity of their transactions. Accordingly, if the P12M criteria has been satisfied only in one (1) taxable quarter, the taxpayer shall not be qualified as TWA; and d. Taxpayers who are tax exempt from payment of income taxes with no proprietary activities ( i.e. , foundations, non-stock, non-profit and tax exempt educational institutions, religious and charitable institutions, etc.). 4. The RDOs shall prepare in two (2) separate lists for inclusion and deletion according to the format below and forward the same to the Chief, Collection Division of their Revenue Region, Attention: Chief, Withholding Tax Payable Section (WTPS), on or before October 15, 2019. aScITE LIST OF TAXPAYERS FOR (INCLUSION OR DELETION, as the case may be) IN THE LIST OF TOP WITHHOLDING AGENTS (TWAs) Revenue District Office No. __________ Complete Name of Taxpayer Complete Address TIN Amount Declared in the 2008 Income Tax Return Remarks (Reason for Deletion Other than those Not Qualified the P12M Requirement) Gross Sales/Receipts Gross Purchases Claimed Deductible Itemized Expenses Individual 1. 2. Non-Individual 1. 2. Prepared by: ________________ Noted by: ____________________ Revenue District Officer 5. The Chief, WTPS shall review the RDO-prepared lists for inclusion and deletion, and coordinate with the concerned RDO to ensure the completeness and correctness of the information reflected in the said list. Subsequently, the list shall be consolidated following the format below: CONSOLIDATED LIST OF TAXPAYERS FOR (INCLUSION OR DELETION, as the case may be) IN THE LIST OF TOP WITHHOLDING AGENTS (TWAs) Revenue Region No. ______ Complete Name of Taxpayer Complete Address TIN Amount Declared in the 2008 Income Tax Return Remarks (Reason for Deletion Other than those Not Qualified the P12M Requirement) Gross Sales/Receipts Gross Purchases Claimed Deductible Itemized Expenses Individual Revenue District Office No. _________ 1. 2. Revenue District Office No. _________ 1. 2. Non-Individual Revenue District Office No. _________ 1. 2. Revenue District Office No. _________ 1. 2. _________________________ Chief, Withholding Tax Payable Section _______________________ Chief, Collection Division _________________ Regional Director 6. The duly approved consolidated lists shall be submitted to the ACIR, Collection Service, Attention: The Chief, MOMD, on or before October 30, 2019. Failure to submit the consolidated lists of taxpayers for inclusion and deletion on the deadline shall result in the retention of the validity and qualification of existing withholding agents under the jurisdiction of the concerned RDOs. HEITAD 7. In case of a taxpayer who is still qualified as TWA in the RDO as reflected in the published lists but who has already transferred to or actually registered in another RDO, the said taxpayer shall remain as TWA in the RDO where it is duly registered. For strict compliance. (SGD.) ARNEL SD. GUBALLA Deputy Commissioner Operations Group