Amending Revenue Regulations No. 12-93.

December 7, 1993 REVENUE REGULATIONS NO. 03-94 SUBJECT : Amending Revenue Regulations No. 12-93 TO : All Internal Revenue Officers and Others Concerned SECTION 1 . Scope and Objective . Pursuant to the provisions of Section 245 in relation to Section 4 of the National Internal Revenue Code (NIRC), as amended by Republic Act No. 7646, these regulations are hereby promulgated to amend and clarify certain provisions of Revenue Regulations No. 12-93, which implement said Act. SECTION 2 . The first two paragraphs of Subsection a. of Section 3 of Revenue Regulations No. 12-93 is hereby amended to read as follows: cdt "a. In General . "A Large Taxpayer shall inform the Commissioner of Internal Revenue of his choice of a maximum of five (5) banks from among the BIR-accredited banks wherein such taxpayer shall file all internal revenue tax returns, papers and statements and pay taxes due pursuant to the provisions of the NIRC. All internal revenue taxes to which a Large Taxpayer is liable, including deficiency taxes and increments, are covered by these regulations, except the following: "1. Documentary stamp taxes; "2. Value added tax (VAT) on the sale of refined sugar paid in advance by the owner/seller to the Bureau of Internal Revenue (BIR), thru the sugar refinery pursuant to Revenue Regulations No. 7-89; "3. Taxes withheld by government offices, a gencies and instrumentalities pursuant to Republic Act No. 1051 and Republic Act No. 7649 (filed under BIR Form No. 750AV); "4. Withholding taxes or other taxes or Large Taxpayers with branches/units outside Metro Manila paying/remitting taxes on a decentralized basis, who for technical or administrative constraints or other justifiable reasons have, upon prior approval of the Commissioner of Internal Revenue been duly exempted from the requirement of consolidated payment/remittance of taxes under Section 3 (b), (e) of (f) of Revenue Regulations, No. 12-93 pending resolution of said constraints; "5. Internal revenue taxes (i.e., creditable expanded withholding tax and documentary stamp tax) on real estate transactions; cdt "6. Internal revenue taxes (i.e., VAT and excise taxes) collected by the Bureau of Customs; and "7. Such other taxes as may be specified by the Commissioner in guidelines and procedures to be implemented. "Such taxes not included within the scope of these Regulations, i.e., taxes enumerated in Section 3 (a) (1) to (7) above, shall be paid at venues in accordance with existing laws and regulations applicable to non-Large Taxpayers. "Unless otherwise requested by the bank head office, filing of the tax returns and/or payment of taxes covered by these Regulations (i.e., taxes other than those enumerated in Sec. 2 (a) (1) to (7) above) shall be made at the bank's head office if the taxpayer's chosen bank has its head office within the jurisdiction of the revenue district office where the taxpayer has its principal place of business. Otherwise, filing and/or payment shall be made at bank branches of their duly selected banks which have been officially designated by bank head offices to receive returns, papers, statements and/or payments of Large Taxpayers. Provided, however , that payment at a bank head office or designated branch located outside said Revenue District may be allowed by the Commissioner of Internal Revenue in appropriate cases, such as but not limited to the following: "a. The direct debit system is adopted by the taxpayer pursuant to Revenue Regulations No. 14-93; "b. The bank chosen by the taxpayer does not have an accredited branch within the taxpayer's Revenue District, in which case, the taxpayer may pay at the head office or designated branch of such chosen banks authorized by the BIR to receive returns and/or payments from Large Taxpayers coming from the taxpayer's Revenue Districts; or "c. The taxpayer has so requested in writing from the Commissioner of Internal Revenue that it be allowed to file the tax returns and/or pay the tax at a bank head office or designated branch located outside taxpayer's Revenue District, which request has been duly approved by the Commissioner." SECTION 3 . Subsection b. or Section 3 of Revenue Regulations No. 12-93 is hereby amended to read as follows: "b. Withholding Tax Remittances . "1) Monthly and Quarterly Returns and Remittances. "Large Taxpayer withholding agents presently withholding taxes on a decentralized basis may continue to withhold taxes in said manner. However , the remittance returns (BIR Forms 1743-W and 1745) of said branches or offices shall be forwarded to the Head Office for filing and paying of the total taxes withheld by the Head Office and all its branches or offices. The Head Office shall prepare a covering transmittal (Annex A) of its withholding tax return and those of said branches/offices showing the following information: a) Month/quarter covered; b) Head Office and branch/offices names and addresses; and c) Kinds and amounts of taxes withheld and the Remittance Return used (BIR Form 1743-W or 1745). Remittance of such taxes withheld shall likewise be done by the head office and made only at any of their chosen accredited banks in accordance with these regulations and prescribed procedures: Provided, however , that head offices of Large Taxpayers filing returns of their branches/units in accordance with subsections (b), (e) or (f) of this section shall prepare separate covering transmittals for returns with payments involved and those without payments involved. "2. Annual Information Returns of Branches. "Annual Information Returns of Taxes Withheld (BIR Forms W-3, 1743-B, 1743-D and 1745-A) prepared by branches/offices of Large Taxpayers shall be submitted individually by said Large Taxpayer Withholding Agents to their respective Revenue District Offices." SECTION 4 . Subsection d. of Section 3 of Revenue Regulations No. 12-93 is hereby amended to read as follows: cd "d. Authority to Accept Payment (ATAP) for Excise Taxes . "Payments of Large Taxpayers as indicated in the corresponding ATAP's issued for excise taxes shall be made only at banks chosen by said taxpayers in accordance with these regulations. Such choice of banks shall be communicated in writing by the taxpayer to the ATAP Issuing Office concerned in accordance with Revenue Memorandum Order No. 1-93, as amended by Revenue Memorandum Order No. 18-93." cdt 5 . Subsection g. of Section 3 of Revenue Regulations No. 12-93 is hereby repealed. SECTION 6 . Subsection h. of Section 3 of Revenue Regulations No. 12-93 is hereby renamed as subsection g. and is amended to read as follows: "g. Use of Color-coded Taxpayer Identification Number (TIN) Labels by Large Taxpayers . "Color-coded pre-printed stick-on TIN labels shall be used and affixed by Large Taxpayers to the original of all their returns/ATAP's to facilitate identification of such documents. Said stick-on labels shall be distributed by the Large Taxpayers Division to Large Taxpayers." 7 . Section 4 of Revenue Regulations No. 12-93 is hereby amended to read as follows: "Sec. 4. Designation By Accredited Banks of Bank Branches to Receive Returns and/or Payments of Large Taxpayers . "In relation to Section 3 of these regulations, head offices of BIR-accredited banks shall designate and inform the Commissioner of particular branches located within the jurisdiction of revenue district offices wherein there are identified Large Taxpayers which shall receive returns and/or payments of such taxpayers. Branches to be designated shall be chosen only from bank branches accredited by the BIR to receive internal revenue tax returns and payments." 8 . The title of Section 5 of Revenue Regulations No. 12-93 is hereby amended to read as follows: "Sec. 5. Amendments to Criteria for Selection of Large Taxpayers and Venues for Filing Returns and Payment of Taxes . " SECTION 9 . Repealing Clause . All rules and regulations or parts thereof inconsistent with the provisions of these regulations are hereby amended accordingly. SECTION 10 . Effectivity . These regulations shall take effect fifteen (15) days after publication in the Official Gazette or newspaper of general circulation whichever comes first. ERNEST LEUNG Acting Secretary of Finance Recommending Approval: LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue PROPOSED AMENDMENTS TO REVENUE REGULATIONS NO. 12-93 [Nov. 1993] Section/Paragraph To Be Amended Nature of Amendment Rationale Section 3, 1. The scope of taxes to be paragraph a. covered by the Regulations was clarified. Taxes to be excluded are the following: a. Documentary stamp taxes; Payment of documentary stamp taxes, particularly loose stamps and those incidental to real property transactions, are difficult to monitor. Collections from this tax is not substantial in relation to overall collections (less than 5%) and exclusion of this tax from the monitoring shall not have a significant effect on data to be gathered. b. VAT on sale of refined It is impractical to sugar paid in advance by the change the venue for owner/seller to BIR thru the payment of this tax to sugar refinery. the taxpayer's head office in Metro Manila since payment of this tax prerequisite for withdrawal of the product from sugar refineries which are all outside Metro Manila c. Taxes withheld by gov't. Almost all government offices, agencies and instrumen- offices, agencies and talities pursuant to RA 1051 and instrumentalities have RA 7649 filed under BIR Form been excluded in the Nos. 750AV. initial list of Large Taxpayers to be moni- tored. These taxes are excluded in the since they are the taxes with- held exclusively by government entities. d. Withholding or other taxes A number of tax- of Large Taxpayers with branches payers, specifically /units outside Metro Manila paying those with branches /remitting taxes on a decentralized nationwide have signified basis, who for technical or problems in the trans- administrative constraints or mittal of returns of other justifiable causes have upon returns by provincial prior approval of the CIR been branches to the head duly exempted from the office in Metro Manila requirements of consolidated payment/remittance of taxes under Sec. 3(b), (e) or (f) of Rev. Reg. 12-93 pending resolution of said constraints. e. Internal revenue taxes, These taxes are i.e., creditable expanded with- generally not regularly holding tax and documentary paid by most taxpayers; stamp tax on real estate transactions. f. Internal revenue taxes collected by the Bureau of Customs. g. Other taxes as may be specified by the Commissioner. 2. Payment of taxes excluded This clarifies that usual from the scope is clarified to be NPCS procedures in the in accordance with existing laws filing and payment of and regulations presently taxes shall be followed applicable to non-Large for taxes excluded in the Taxpayers scope of the regulations. 3. The provisions in RR No. Allowing for payment 12-93 that the venue for at venues outside the payment should be strictly at taxpayer's preferences a bank head office or branch and convenience. within the taxpayer's Revenue District is relaxed by enumerating exceptions which may be allowed such as: a. The direct debit system Under RR 14-93, pay- is adopted pursuant to RR 14-93 ments amounting to P10,000.00 or more may be made by "debiting a taxpayer's bank account maintained with any of the BIR," which is pre- sumably regardless of such bank's location. b. The bank chosen by the taxpayer does not have an accredited branch within the taxpayer's Revenue District c. The taxpayer has so requested Section 3, 1. Clarification is made that This is necessary for paragraph b. separate transmittal sheets consistency with the shall be prepared by a head preparation by banks of office for returns of its separate Batch Control branches/units without payment Sheets for returns with involved and for those with payments and those payment involved. without payment. 2. Annual information returns Monitoring to be done of taxes withheld by branches/ by the Large Taxpayers offices of Large Taxpayers Division shall not extend shall be submitted to their to information returns, respective Rev. Dist. Offices. which are more appro- priately submitted to the RDO in accor- dance with existing procedure. Section 3, Clarification is made It is not clear in RR paragraph d. that the choice of banks 12-93 what choice of a Large Taxpayer shall be communicated shall be communicated to the ATAP-Issuing in writing by the taxpayer Office and who shall to the excise tax ATAP- make such Issuing Office, with additional communication. reference to Revenue Memorandum Order No. 18-93. Section 3, The subsection is repealed paragraph g. in view of the exclusion of internal revenue taxes on real property transactions from the scope of the Regulations. Section 3, Clarification is made that color- This shall facilitate paragraph h. coded stick-on labels shall monitoring of taxes be used in all returns/ATAPs paid by Large Taxpayers of Large Taxpayers. since returns for such taxes may be easily identified and segregated. Section 4 Clarification is made that branches This is necessary to be designated by bank head since not all branches offices to receive returns, papers, of BIR-accredited banks statements and/or payments of are authorized to receive Large Taxpayers shall be chosen returns and payments. only from among bank branches It is implied that a bank accredited by the BIR to receive that wants to designate internal revenue tax returns and a particular branch to payments. designate a particular to receive returns and payments of taxpayers in general (i.e., both Large and non-Large Taxpayers). Section 5 The title is revised to Modification of the reflect provisions for amending title is needed since criteria for selection of Large the text of the section Taxpayers as well as venue for discusses not only filing and payment of taxes amendment of criteria for selection of Large Taxpayers but also amendment of the venues for filing and payment.