Procedure for Processing Applications for Value-Added Tax Registration

August 27, 1987 REVENUE MEMORANDUM ORDER NO. 21-87 SUBJECT : Procedure for Processing Applications for Value-Added Tax Registration TO : All Internal Revenue Officers and Others Concerned This Revenue Memorandum Order prescribes guidelines for processing applications for registration of persons subject to the value-added tax as a basis for developing a BIR Master File for value-added taxpayers. cd A. DUTIES AND RESPONSIBILITIES 1. Revenue Computer Center a. Generate VAT registration numbers, which shall have a built-in "check digit" to facilitate validation of the number. b. Assign the registration numbers by block to each revenue district office according to potential registrants submitted. Transmit the assigned numbers to the VAT Division. c. Generate 3 copies of lists of VAT registered taxpayers, alphabetic and numeric, based on the diskettes received from the VAT Division. This listing shall be prepared according to revenue district office and must show the registered name of taxpayer, registration number, registered taxable activities, registered exempt activities, if any, type of business organization, number and street name, city or municipality in which the principal establishment and branches are located, and their corresponding telephone numbers. d. Transmit 3 copies of the lists, including the diskettes used, to the VAT Division within 7 working days after the receipt of the diskettes from the VAT Division. e. Update the lists based on reports on the status of registered persons forwarded by the VAT Division. casia 2. Revenue District Office a. Receive the application form and ascertain immediately if it has been properly accomplished. b. Stamp "Received" and date of receipt on the upper right hand corner and on the claim stub of the form. c. Record in the log book the application received by indicating the name of applicant and date of receipt. This log book shall be used exclusively for records of VAT registration. d. Give the claim stub to taxpayer and advise him to wait or return on the date indicated thereon for claiming the certificate of registration. e. Approve or disapprove the application for registration. If approved, check the box for "Approved" and indicate "VAT registration number," the "effective date of registration," and the "Quarter/Filing Code." If application is disapproved, check box for "Disapproved" and keep application on file. 1. The effective date of registration for persons first beginning business, persons becoming liable to the value-added tax and persons who may opt to register - Section 8(a) (1)(2) and (6) of Revenue Regulations No. ___ shall be the first day of the month following the month the application for registration has been approved. However, persons who will register up to December 31, 1987 shall have January 1, 1988 as their effective date of registration. 2. The Quarter/Filing Code is a system of staggering the period of filing the VAT return and payment of tax due. It is designed to prevent overcrowding of taxpayers at filing time. cd All VAT-registered persons shall be divided into tree groups to be known as groups A, B and C in accordance with the last digit of the VAT registration number. Those whose VAT registration number end in 1, 2, 3 and 4 shall be in 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: f. Issue "VAT" Registration Certificate" in duplicate for the VAT-registere d person's principal place of business. Give the original copy to the registered person an d keep the duplicate copy. Issue additional copies of the certificate (pink color) for every branch within or outside the district where the principal place of business is located. Keep the corresponding duplicate copy on file. g. Batch in 50's all approved applications and transmit all batches including the last batch which may contain less than fifty applications to the VAT Division on the following Monday of every week. h. Cancel registration upon written notice in duplicate BIR Form No. by the VAT-registered person, who shall in turn surrender his certificate of registration of his principal place of business and branches (except in mere transfer of location of business), transmit duplicate of notice to VAT Division and keep original on file. Update the VAT Master File accordingly. Registration may be cancelled for the following reasons: 1) The person has retired from business; 2) The person's business has become exempt in accordance with Section 6(b) of these Regulations; 3) Change in the nature of the business from sale of taxable goods and/or services to exempt sales and/or services; 4) Change of ownership, in the case of single proprietorship; 5) Dissolution of a partnership or corporation. 6) Merger or consolidation with respect to the dissolved corporation(s); 7) The person who has registered prior to planned business commencement fails to actually start his business; 8) The person whose transactions are exempt from value-added tax under Section 103(a), (b), (c) and (f) of the Tax Code who voluntarily registered under the VAT system, who, after the lapse of two years, applies for cancellation of his registration as such; 9) The VAT-registered person whose gross sales or receipt for two consecutive years did not exceed P200,000 per year; 10) The VAT-registered person whose gross sales or receipts did not exceed P200,000 during his first 12 months in business. casia 3. VAT Division 1. Receive approved application for registration from Revenue District Offices; and send follow-ups for late transmittals. 2. Transcribe all required data in accordance with RCC prescribed formats and transmit diskettes to the RCC. 3. Receive copies of VAT registers - one alphabetic and one numeric - per district from RCC and send immediately to corresponding revenue district office within three working days after receipt from RCC. 4. Instruct RDOs to update list on new registrations, cancellations and other changes. B. Effectivity. This Order shall take effect immediately. Regional Directors and Revenue District Officers are hereby enjoined to start registration of value-added taxpayers beginning September 1, 1987. (SGD.) VICTOR A. DEOFERIO, JR. Deputy Commissioner