Processing of Business Registration Applications

November 4, 1985 REVENUE MEMORANDUM ORDER NO. 30-85 SUBJECT : Processing of Business Registration Applications TO : All Internal Revenue Officers and Others Concerned To ensure that all persons desiring to engage in business as well as all persons already engaged therein are properly registered for purposes of establishing and maintaining sales tax accounts with the Bureau of Internal Revenue, the following procedures for the processing of business registration applications are hereby prescribed: SECTION 1. Scope . This Order shall comprehend all applications for registration of business (B.I.R. Form No. 2529D-2) filed pursuant to Revenue Regulations No. 11-85 dated October 31, 1985 by persons desiring to engage in business as well as those already engaged therein. SECTION 2. Responsibility of the Revenue District Officer . To achieve the objectives of Revenue Regulations No. 11-85, it shall be the responsibility of the Revenue District Officer: a) To inform the applicant of the nature of and reason for the application for business registration; b) To appraise the applicant that his application and the accompanying registration and credit information sheet shall be held strictly confidential and shall be used only for internal revenue tax purposes; c) On the basis of the declaration of the applicant, to set the dates and frequencies for filing sales tax return and the payment of the taxes due, to determine the amount of security to be posted or the guaranty to be required in lieu thereof; d) To ensure that the application forms are signed and filed personally by the applicant or his duly authorized representative; that additional information needed may be secured right at the time of filing, and that the applicant can be properly advised as to the filing and tax payment dates and the security or guaranty that may be required; and e) To assign personnel, preferably examiners, to process the applications, interview applicants and prepare the Business Registration Certificate to be issued to the applicant. SECTION 3. Steps to be Taken in the Processing of Applications . The examiner or personnel assigned to process applications for business registration shall take the following steps: a) Upon receipt of the application together with the Registration and Credit Information Sheet, to record such application in the permanent Business Registration log book; b) To see to it that except for those spaces expressly marked "DO NOT FILL-UP", all questionnaires are properly answered or filled-up; c) To make sure that the Registration and Credit Information Sheet has been properly accomplished and has been signed by the taxpayer applicant himself or his duly authorized representative, paying more emphasis to the following items: cd i Items Reason (1) Real estate owned For collection enforcement and setting of the security to be posted. (2) Estimated monthly (i) For determination whether business expenses taxpayer is already registered as withholding agent (ii) For determination of declaration of projected sales and possible measurement of income. (3) Estimated monthly (i) For determination of security sales to be posted and (ii) For assignment of filing and payment period. d) In determining the amount of security to be posted in proper cases, to make certain that the security deposit does not exceed the equivalent of tax payment corresponding to one payment period. To illustrate: Projected or estimated quarterly sales P150,000 Case A - Taxpayer is subject to tax ======= on second sale: Monthly tax due (150,000 3 x 3% P 1,500 3 months tax due (1,500 x 3) P 4,500 Case B - Taxpayer is liable to tax on a quarterly basis such as a manufacturer: Quarterly tax due (150,000 x 20%) P 30,000 Less: Estimated tax credits (30,000 x 70%) P 21,000 Quarterly tax due P 9,000 Monthly tax due (9,000) P 3,000 In Case A the amount to be posted shall not be less than P1,500 but not more than P4,500. In the case of the manufacturer in Case B, the amount to be posted shall not be less than P3,000 nor more than P9,000. e) To consider and adopt the date of filing sales tax return prescribed by the Tax Code. Thus: acd (1) Importer, manufacturer, producer on or before 20th day after the close of each quarter. (2) Wholesaler and retailer on or before the 10th day after the close of each month. In determining the date for filing returns, the following rules shall be adopted: (1) As a general rule, all manufacturers, producers, importers, or millers shall be assigned a quarterly basis for reporting sales, either on a calendar or fiscal quarter basis, depending upon their accounting period. (2) In the case of persons subject to tax on second sales, they shall be assigned a monthly basis for reporting sales. However, if the estimated monthly taxable sale will yield a monthly tax due of less than P50.00, then such taxpayer shall be assigned a quarterly basis for reporting sales. To illustrate: Estimated monthly sales P5,000 Detailed as follows: Sales subject to graduated tax (acquired from another dealer) P3,500 Sales subject to tax on second sale (acquired from a manufacturer, producer, importer or wholesaler) P1,500 P5,000 ====== In the above example, The estimated monthly sale is P5,000 The estimated taxable sale is P1,500 The estimated tax due on second sale is (P1,500 x 3%) P 45 In this case, the person subject to second sale shall be assigned a quarterly basis for reporting sale. SECTION 4. Issuance of the Business Registration Certificate . Thereafter, the processing examiner shall cause the preparation of the Business Registration Certificate (BRC) (B.I.R. Form No. 2529D-3) for the signature of the Revenue District Officer. The examiner shall see to it that the following information are properly typed at the appropriate box provided for in said Business Registration Certificate (B.R.C.): acd 1) Name of Taxpayer 2) Business Address 3) Taxpayer Business Account Number 4) Type of Business and Principal Product 5) Date of Filing Returns 6) Date of Payment of Tax Before issuing the Business Registration Certificate (BRC) to the taxpayer-applicant, the processing examiner shall record all pertinent data required in the Registry Book. Thereafter, he can distribute the various copies of the certificate as follows: Original to be given to the applicant-taxpayer, together with the duplicate copies of his applications and information and credit forms. Duplicate to be forwarded to the RISSI for establishing taxpayer account. Triplicate to be retained by the Revenue District Office, together with a copy of the application and information and credit forms as permanent file. SECTION 5. Effectivity. This Revenue Memorandum Order shall take effect immediately. (SGD.) RUBEN B. ANCHETA Acting Commissioner