Prescribing the Procedure on the Receipt, Transmittal, and Processing of Value-Added Tax Returns Filed Thru the Banking System

February 26, 1988 REVENUE MEMORANDUM ORDER NO. 14-88 SUBJECT : Prescribing the Procedure on the Receipt, Transmittal, and Processing of Value-Added Tax Returns Filed Thru the Banking System TO : All Internal Revenue Officers, Bank Officials and Employees, and Others Concerned This Order is issued to achieve an effective system in the receipt, transmittal, and processing of Value-Added Tax (VAT) returns and payment of the tax due thereon thru the banks authorized to accept VAT payments as prescribed in Revenue Regulation No. 5-87. I. Place of Filing VAT Returns and Payment of the Tax A. Taxpayers subject to Value-Added Tax shall file their VAT returns in three (3) copies directly with the accredited bank. The banks shall accept VAT returns and payment due thereon only from taxpayers listed within their respective jurisdiction. B. However, the banks shall not accept the filing of the VAT returns and the tax due thereon under, the following circumstances 1. there is no cash payment involved; 2. the tax shall be paid in full by Tax Credit Certificate; 3. the taxpayer tenders only partial payment of the amount due; 4. an assessment notice or letter of demand was issued by the Bureau of Internal Revenue; and 5. the filing of the VAT return and payment of the tax due thereon is made beyond the due date. C. In case the VAT returns are not accepted by the Bank, the taxpayers shall file their VAT returns with the Revenue Collections Officer or Revenue District Officer concerned. acd II. Dates of Filing VAT Returns A. The dates of filing the quarterly VAT returns will depend upon the last digit of the registration numbers issued to VAT taxpayers, regardless of the accounting period adopted by them. Those whose VAT registration numbers end in 1, 2, 3, and 4 shall be Group A; 5, 6 and 7, Group B; and 8, 9 and 0, Group C. The taxable quarters of the respective groups shall be as follows: Group 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter A Jan. 1-Mar. 31 Apr. 1-June 30 July 1-Sept. 30 Oct. 1-Dec. 31 B Feb. 1-Apr. 30 May 1-July 31 Aug. 1-Oct. 31 Nov. 1-Jan. 31 C Mar. 1-May 31 June 1-Aug. 31 Sept. 1-Nov. 30 Dec. 1-Feb. 28/29 B. However, the period designated for the initial filing of VAT returns and payment of the tax due thereon shall be: Group Taxable Period Filing of Return/Payment Due A Jan. 1 to Mar. 31, 1988 On or before Apr. 20, 1988 B Jan. 1 to Apr. 30, 1988 On or before May 20,1988 C Jan. 1 to May 31, 1988 On or before June 20, 1988 III. Mode of Payment of VAT A. Value-added tax may be paid fully in cash, in check or by Tax Credit Certificate. B. However, if payment is by Tax Credit Certificate, the taxpayer shall present the same together with the VAT return to the Revenue District Officer concerned who shall, in turn, issue the corresponding Tax Debit Memo for the amount applied as payment of the tax. C. Accommodation checks and/or out-of-town checks are not acceptable as tax payments. IV. Duties and Responsibilities A. Accredited Bank Branch 1. Ascertain that the taxpayers filing the VAT returns fall under the same Revenue District as the bank branch; 2. Stamp "Received" on all copies of the VAT return; 3. Check the total amount due as shown in the return, and determine the mode of payment; 4. Accept VAT payment and issue the corresponding confirmation receipt only for case or check payment. Use separate booklet of confirmation receipt exclusively for VAT payment; 5. Do not issue confirmation receipt if the tax is to be paid by the Tax Credit Certificate. Issue two (2) Confirmation receipts if payments partly in check and partly in cash. 6. Indicate at the back of the check the confirmation receipt number, name, address and telephone number of the taxpayer if they are not clearly indicated in the check. 7. Segregate the copies of the confirmation receipt as follows: Original (white copy) Taxpayer's copy, to be attached to the original copy of the Tax Debit Memo, if any; and to the triplicate copy of the VAT return Duplicate (green copy) Auditor's copy, to be attached to the duplicate copy of the Tax Debit Memo, if any; and to the original copy of the VAT return Triplicate (blue copy) Revenue District Officer's copy to be attached to the duplicate copy of VAT return Quadruplicate (pink copy) to be attached to the original copy of the VAT return Quintuplicate (card copy) file copy Bank Branch 8. Release to the taxpayer the triplicate copy of the VAT return with the original copy of the confirmation receipt and original copy of the Tax Debit Memo. 9. Arrange the VAT returns according to the numerical sequence of the confirmation receipt issued for them. 10. Prepare the Batch Control Sheet (BCS) in six copies for each batch of returns. This is in lieu of the BIR Form No. 12.56. Fill up all applicable information required in the BCS. The names of the taxpayers shall be listed according to the numerical sequence of the serial number of the confirmation receipt. If a confirmation receipt is cancelled or is found missing from the booklet, the word "cancelled" or "missing" shall be indicated in place of the taxpayer's name in the BCS. All of the four (4) copies of the cancelled confirmation receipt shall be attached to the original copy of the BCS and the quintuplicate (card copy) shall be retained by the bank branch. 11. Transmit to the Head Office immediately by telex, radiogram, or by any means of fast communication the total amount of taxes collected during the day classified according to (a) Value-Added Tax and (b) Other taxes and the inclusive serial numbers of the confirmation receipt issued for each classification. 12. Distribute the copies of the BCS as follows: Original copy with the original copies of the VAT return and their attachments to Bank's Head Office, then to VAT Division thru BIR Unit, CB Complex Duplicate copy with the duplicate copies of the VAT return and their attachments to the Revenue District Officer concerned to be picked up by his representatives Triplicate copy without any attachments to Bank Head's Office, to BIR Accounting Division thru BIR Unit, CB Complex Quadruplicate copy without any attachment to Bank Head office, then to PO/CR Monitoring Division thru the BIR Unit, CB Complex Quintuplicate copy without any attachments to Bank's Head Office Sextuplicate copy without any attachment File, Bank Branch NOTE: Forward to the Head Office the BCS together with their attachments (VAT returns, confirmation receipts and Tax Debit Memos) immediately to insure their timely submission to the BIR Unit, CB Complex. B. Bank Head Office 1. Prepare the Consolidated Report of Daily Collection of Internal Revenue Taxes (BIR Form No. 12.55) identifying therein the inclusive serial numbers of the Confirmation Receipts and the corresponding amount of VAT payment received. 2. Distribute the copies of the report under BIR Form No. 12.55 according to Revenue Regulations No. 5-84 within three (3) days following the date of collection. 3. Number consecutively the BCS as the batches of VAT returns are received from the branches, starting from 001 for the first batch received in February to the last batch of returns received in January of the following year. 4. Prepare the Consolidated Abstract of Collections (BIR Form No. 12.57) and the Authority to Demand Deposit Account (BIR Form No. 12.57A) in six (6) copies and distribute the same according to Revenue Regulations No. 5-84 within eleven (11) days from the date of collection. 5. Forward to BIR Unit, CB Complex, the BCS and their attachments, and the reports under BIR Form No. 12.57 and 12.57A. 6. Notify the BIR Accounting Division in case error is discovered, including over or under remittance of revenue collections. C. BIR Unit, CB Complex 1. Stamp "Received" on all copies of the reports under BIR Form No. 12.55, 12.57, 12.57A, 12.60 and BCS. 2. Distribute the copies of the reports and documents received from the banks as prescribed under Paragraph IV(A) 7, 12 and (B) 2, 4 hereof. 3. Record in the logbook assigned for each bank the BCS number and the number of VAT returns contained in each BCS. 4. Ascertain any missing VAT returns and/or any attachments to the VAT returns and communicate immediately to the bank concerned of any discrepancy. D. BIR-Revenue Accounting Division 1. Receive copies of BCS and BIR Forms 12.57 and 12.57A from the PO/CR Monitoring Division, the daily report of VAT collections from the VAT Division and CB Credit Advice from the Central Bank. 2. Record VAT collections based on the Report of Daily Collections received from the VAT Division. 3. Reconcile VAT reports of collections under BIR Form 12.57 and 12.57A as against BCS and CB Credit Advice. 4. Prepare demand letter, for the signature of the Assistant Commissioner for Collection, as chairman, Committee on Collection Thru Banks, addressed to the bank concerned when the report under BIR Form No. 12.55 is delayed, and/or when there is under remittance, or when remittance of revenue collections is delayed. E. PO/CR Monitoring Division 1. Receive copies of the reports under BIR Form Nos. 12.55, 12.57, 12.57A, BCS and their attachments and transmit to VAT Division all BCS and their attachment on the very day they are received from BIR Unit, CB Complex. 2. Post to CR Control Register the Confirmation Receipts issued, and determine the receipts which are found missing or cancelled. 3. Prepare for the signature of the Chairman, Committee on Collection Thru Banks communication to the bank concerned to effect the publication of missing confirmation receipt, and refer the matter to Inspection Service for Investigation of the Case including the imposition of penalties for delayed transmission of VAT return, and BIR Form No. 12.60. cdt 4. Determine from the CR Control Register Confirmation Receipts which remained unissued for a period longer than six months from date of their requisition especially in cases where in the same booklet or receipts, one or more receipts remained unissued. casia 5. Communicate with the bank cases where BCS and their attachments are found missing. F. VAT Division 1. Receive the documents from BIR Unit, CB Complex; detach from the VAT returns the duplicate copy of CRs and forward to the Auditor; 2. Forward all cancelled CRs to PO/CR Monitoring Division; 3. Check the VAT Returns against the BCS; 4. Indicate file numbers of the VAT returns for control purposes; 5. Encode data from VAT return; 6. Generate computer totals of the different batches and match them with their respective BCS totals; Advise Revenue Accounting Division of any discrepancy discovered between them. 7. Generate in three (3) copies listing of confirmation receipts according to their numerical sequence, and forward one copy each to Revenue Accounting Division, PO/CR Monitoring Division and to the Auditor. 8. Transmit the BCS with the corresponding original copies of VAT returns to the Administrative Branch of the Regional Office concerned for safekeeping not later than 20 days after receipt of the same documents. 9. Send diskette/tape to RCC; 10. Receive the copies of the required listings with the diskette/tape from RCC; 11. Distribute the three (3) copies of Alphabetic Listing of VAT Returns as follows: Original Administrative Branch of the region concerned Duplicate RDO concerned Triplicate VAT Division 12. Transmit one (1) copy of the Quarterly District Alphabetic Listing of Non-Filers with three (3) copies of Reminder Letter to the RDO's concerned immediately upon receipt from RCC. 13. Receive and process claims for VAT refunds/credits including those from the VAT Units of Revenue District Offices/Assessment Branches. 14. Prepare a Tax Credit Certificate (TCC) Register and/or record on the TCC Register and/or record on the TCC No., date, name of taxpayer, TAN and amount. Submit a monthly list of TCCs issued to Receivable Account Division for monitoring and control purposes and to RDOs concerned as basis for the verification of the validity of the TCCs presented for the issuance of Tax Debit Memo. 15. Refer to the Revenue District Office through the Revenue Regional Office, discrepancies reported by Revenue Computer Center (RCC) or as disclosed in the application for VAT refund/credit. G. Revenue Computer Center 1. Receive from VAT Division the diskette/tape on VAT Returns filed. 2. Generate three (3) copies of Quarterly Alphabetic Listing of VAT Returns by RDO. cdt 3. Generate two (2) copies of the quarterly alphabetical list of non-filers by Revenue District Office with three (3) copies of reminder letters addressed to non-filers. 4. Forward the copies of the above listings to VAT Division with the diskette/tape. H. Revenue District Office 1. Receive from VAT Division two (2) copies of the list of non-filers of VAT returns, together with three (3) copies of the reminder letters. 2. Mail to non-filers of VAT returns the original copy of the reminder letter and again mail the duplicate copy 15 days after mailing the original letter should the taxpayers failed to respond to the original letter. 3. Submit to the Revenue Regional Director a list of non-filers who failed to respond to the two reminder letters 15 days after mailing the second reminder letter. 4. Conduct investigation of non-filers based on the Letter of Authority to Investigate issued by the Revenue Regional Director. 5. Prepare and issue Tax Debit Memo (TDM) in four (4) copies for taxpayers whose value-added tax payable shall be paid wholly or in part in Tax Credit Certificates. Original to be released to taxpayer Duplicate for attachment to VAT return upon filing Triplicate Disbursement Accounting Division Quadruplicate TCC docket 6. Affix RDO seal on the original and duplicate of the TDM. 7. Maintain and update subsidiary ledger for each taxpayer who were issued Tax Debit Memo. 8. Submit Quarterly Report of Tax Debit Memos issued to the Value-Added Tax Division. acd I. Administrative Branch of the Regional Office 1. Receive the batches of original copies of the VAT returns and the Alphabetical List of VAT filers from VAT Division. 2. File the VAT returns according to the sequence of their file numbers. V. Supervision and Control of Banks The banks authorized to accept VAT payments shall be under the control and supervision of the Committee on Collection Thru Banks, the Chairman of which is the Assistant Commissioner for Collection. VI. Effectivity This Order shall take effect immediately, and any Order or provisions thereof which are inconsistent herewith is deemed revoked or modified. casia (SGD.) BIENVENIDO A. TAN, JR. BIR Commissioner