Bureau of Internal Revenue Revenue Region No. 13 Cebu City June 15, 2012
Revenue Regulation No. 7-2012 AMENDED CONSOLIDATED REVENUE REGULATIONS on PRIMARY REGISTRATION, UPDATES, and CANCELLATION
Scope To amend, consolidate and update all existing revenue regulations relative to: 1. Registration, updates and cancellation procedures; 2. Venue, forms and documentary requirements; 3. Annual registration fee; 4. Certification fee; and 5. Penalties for registration-related violations.
Objectives 1. Revise and implement recent policies relative to primary registration. Amend provisions of Revenue Regulation No. 11-2008; and 2. Amend policies relative to the Transfer of registration records and TIN card issuance under Revenue Regulation No. 5-2010
Definition of terms Primary Registration - the process by which a person upon application and full compliance with the registration requirements is registered with the BIR.
Definition of terms Secondary Registration - the subsequent registration activities after the issuance of BIR Certificate of Registration.
Definition of terms Taxpayer Identification Number (TIN) - the system-generated reference index number issued and assigned by the BIR to each and every person registered in its database. Ex. 123-456-789-0001
Definition of terms Commencement of Business in the case of pursuit of business or practice of profession, it shall be reckoned: a. from the day when the first sale transaction ocurred; or b. within thirty (30) calendar days from the issuance of Mayor’s Permit/PTR by LGU, Certificate of Registration with SEC, whichever comes earlier.
Definition of terms Head Office (HO) - declared specfiic or identifiable principal place of business as stated in the Articles of Incorporation/Parntership/DTI Certificate of Registration.
Definition of terms For persons who conduct business in nomadic manner, such as: Peddlers; Tiangges Mobile store operators Common carriers/school bus operators without designated garages/terminals The head office shall be their place of residence.
Definition of terms Branch -a separate or distinct establishment where sales transactions are conducted independently from the HO.
Definition of terms Branches shall include: 1. Sales outlet situated in another location other than at the HO; 2. Facility with sales activity; 3. Real properties for lease including car parks with Admin Office.
Definition of terms Branches shall include: 4. For Public Transport Operators with more than one (1) franchise/Certificate of Public Convenience, regardless of the number of units; 5. Toll Way Company operating more than one “hi- way/road/expressway.
Definition of terms Branches shall include: 6. For National Government Agencies (NGAs) and its instrumentalities where the fund is not coming from the DBM; and 7. Other separate or distinct establishments which conduct sales transactions.
Definition of terms Branches shall include: Examples: Automated Vending Machines (AVM), Automated Ticket Dispensing Machines, Automated Teller Machines (ATMs) and the like.
Definition of terms Branches shall include: Branch and facility situated abroad of a domestic corporation or resident citizen shall be registered with the BIR district office having jurisdiction over the HO.
Definition of terms Facility - may include but not limited to place of production, showroom, warehouse, storage place, bus terminal, or real property for lease with no sales activity. These are not subject to Annual registration fee (ARF)
Definition of terms Administrative Office - an office where records of sales and/or cash collections are kept which can be registered either as HO or branch. When an Admin Office is located in a facility, the latter becomes a branch, therefore subject to ARF.
Definition of terms Principal or Main Employer - the employer to whom an employee renders his services most of his time, regardless of whom the employee receives a higher salary/pay.
Definition of terms Mixed Income Earner - a compensation income-earner who at the same time is engaged in business or practice of profession.
Definition of terms Marginal Income Earner - those individual whose business do not realize gross sales or receipts exceeding P100,000.00 in any 12- month period.
Definition of terms Updates - the process by which the information previously supplied during the Primary Registration process are changed or modified. Example: change of surname, exemption status
Definition of terms Transfer of Registration - the process of transmitting the records of a registered taxpayer from one BIR district office to another.
Definition of terms End dating - for purposes of preventing stop filer cases, refer to the process of indicating in the system the end of the taxable period or date of the last return period for a particular registered form type/tax type for which a return is required to be filed.
Definition of terms Stop Filer cases - refer to the system created case when a taxpayer fails to file a return for a required tax type for a taxable period which is required to be filed regularly.
Definition of terms Inactive A non-individual taxpayer that has notified the BIR district office of the temporary cessation of business operations.; A taxpayer that has stopped filing all its tax returns for the last two (2) years, which requires a notice of investigation.;
Definition of terms Inactive A newly registered taxpayer who fails to file the required tax returns/declarations due for the applicable initial quarter.; and A taxpayer that may be identified as such by the CIR in a separate revenue issuance.
Definition of terms Ceased/Dissolved - the status of the taxpayer who has completed the requirements for cancellation of registration prior to the termination of audit.
Policies on the Application andIssuance of TIN General Rules: 1. The TIN is non-transferable. There shall be no instance where two or several people are holders of the same TIN.; 2. Only one TIN shall be assigned to the taxpayer, regardless of variety of transactions.
Policies on the Application andIssuance of TIN General Rules: 3. The Estate of the deceased person or a Trust under an irrevocable trust agreement shall be issued a TIN separate and distinct from the TIN of the deceased person and/or trustee.; 4. Minors who are earning and/or under the circumstances of EO 98, shall be supplied with TIN.
Policies on the Application andIssuance of TIN General Rules: 5. Non-Resident Aliens Not Engaged in Trade or Business (NRANETB) or Non-Resident Foreign Corporations (NRFC) shall be issued TINs for purposes of withholding taxes on their income from sources within the Philippines.
Policies on the Application andIssuance of TIN General Rules: 6. Branches of identified Large Taxpayer shall be registered at the Large Taxpayers Service (LTS) where the HO is registered.; and 7. All incorporators of corporations/assoc., partners of partnerships and members of cooperatives must have TINs.
Policies on the Application andIssuance of TIN Persons who are required to or may secure TIN: 1. Every person subject to any national internal revenue tax, also persons subject to taxes under ONETT. 2. Any person, although exempt from the imposition of taxes, is nevertheless required to withhold taxes on income payments made to taxable individuals or entities.
Policies on the Application andIssuance of TIN Persons who are required to or may secure TIN: 3. Any person required to make, render or file a return, statement or other document whereby he is required to indicate his TIN in such return, statement or document filed with the BIR.; and 4. Any persons dealing will all government agencies and instrumentalities, are thereby required to incorporate their TIN in all forms, permits and other documents.
Policies on the Application andIssuance of TIN Registration of Business Taxpayers The submission of a Mayor’s Permit prior to registration is mandatory. If it’s still in process, a duly stamped “Received” application will temporarily suffice. Provided, further, that a duly approved permit shall be submitted within thirty (30) calendar days from the date of registration.
Policies on the Application andIssuance of TIN Issuance of TIN card It shall be free of charge. Cut-off time of issuance – 1:00 PM Lost/damaged cards – P100.00 fee for replacement
Prescribed Periods to CompletePrimary Registration 1. On or before commencement of business; 2. Before payment of any tax due; 3. Before or upon filing of any applicable tax return, statement or declaration as required by the Code; 4. Within ten (10) days from date of employment; and 5. Applications under EO 98
Certificate of Registration (COR) The COR shall only be issued to: Individuals engaged in business or practice of profession; and Juridical persons (taxable or exempt) by the BIR district office concerned. Except, employees, ONETT taxpayers and/or persons who have secured a TIN under EO 98.
Certificate of Registration (COR) In the case of facility, the same shall be issued a Certificate of Registration of Facility (BIR form 2303-F), prescribed in a separate RMO.
Annual Registration Fee (ARF) Exempt from the imposition of ARF: 1. Cooperatives duly registered with the CDA; 2. Individuals earning purely compensation income; 3. OCW/OFWs; 4. Marginal income earners; 5. GAI, in the discharge of their gov’tal functions; 6. LGUs, in the discharge of their gov’tal functions; 7. Tax exempt corporations, in pursuance of tax- exempt activities.
Annual Registration Fee (ARF) Exempt from the imposition of ARF: 8. Non-stock/non-profit organizations not engaged in business; 9. Persons subject to tax under ONETT; 10. Persons registered under EO 98; and 11. Facilities where no sales transactions occur.
Annual Registration Fee (ARF) If a warehouse or place of production is predominantly used for storage, warehouse or productions purposes, a single sales transaction consummated thereat is enough to warrant the imposition of the Annual Registration Fee (ARF).
Tax Types of a Business Entity 1. Income tax; 2. VAT and/or percentage tax; 3. Withholding tax on compensation; 4. Creditable withholding tax at source on certain income payments; 5. Final withholding tax on certain income payments; 6. Documentary stamp tax; 7. Excise tax; and 8. Annual registration fee
VAT Registration In general, any person who, in the course of trade or business, sells, barters, exchanges goods or properties, or engages in the sale of services subject to VAT imposed in Section 106 and 108 of the Code, shall register the VAT tax type.
Mandatory VAT Registration Gross sales or receipts, other than those that are exempt, have exceeded One Million Nine Hundred Nineteen Thousand Five Hundred Pesos (P1,919,500.00); or There are reasonable grounds to believe that the gross sales or receipts will exceed P1,919,500.00.
Mandatory VAT Registration If a person who becomes liable to VAT shall register with the BIR district office which has jurisdiction over his HO. If he fails, he shall be liable to pay the output tax, as if he were a VAT registered person, but without the benefit of input tax credits for the period in which he was not properly registered.
Non-VAT Registration 1. Those persons subject to other percentage taxes under Title V of the Code; 2. Those whose transactions are VAT-exempt; and 3. Marginal income earners
Non-VAT Registration 1. Those persons subject to other percentage taxes under Title V of the Code; 2. Those whose transactions are VAT-exempt; and 3. Marginal income earners
Optional VAT Registration 1. Any person who is VAT-exempt, the gross annual sales/receipts do not exceed P1,919,500.00 may elect to be VAT-registered.; 2. Any person who is VAT registered but enters into transactions which are exempt from VAT (mixed transactions) may opt that the VAT apply to his transactions which would have been exempt.; 3. Franchise grantees of radio and/or television broadcasting, the gross sales do not exceed P10,000,000.00. This option, once exercised, shall be irrevocable.
Optional VAT Registration Any person who elects to register under 1 and 2 of the previous slide, shall not be allowed to cancel his VAT registration for the next three (3) years.
Registration According to Tax Types Registration shall be with the HO only: 1. Income tax 2. VAT
Registration According to Tax Types Registration shall be with the HO and/or branches: 1. Percentage tax 2. Withholding tax on compensation 3. Creditable withholding tax 4. Final withholding tax 5. Documentary stamp tax 6. Excise tax
Registration According to Tax Types Registration with both Head Office and branches Annual Registration Fee
Transfer of Registration Transfer of Registration of Non-Business Individuals Taxpayers initially issued TINs for ONETT/EO 98, shall submit the proper Application Form to the BIR district office where he intends to establish his business address or new employer’s BIR district office or at the BIR district office of his residence, whichever is applicable.
Transfer of Registration of LocalEmployee Individuals Earning Purely Compensation Income In case of transfer due to change of employer, it shall be the responsibility of the new employer to notify his BIR district office by submitting the duly accomplished form of the employee.
Transfer of Registration of LocalEmployee Transfer of Employees of Transferring Employers Registration of employees should follow the BIR district office registration of their employers. A transfer of employer’s BIR district office carries with it the transfer of the registration of employees earning pure compensation income mainly from said employer.
Registered Employee who Intends toEngage in Business or Practice aProfession An individual who is registered as an employee in one BIR district office but subsequently applies for registration as a business taxpayer/professional in another BIR district office shall submit the proper form to the BIR district office having jurisdiction over his business address.
Transfer of Taxpayers Engaged inBusiness or Practice of Profession Branch/Facilities Request for transfer of registration of branch/facility shall be filed at the BIR district office where such branch/facility is registered.
Transfer of Taxpayers Engaged inBusiness or Practice of Profession Head Office (HO) As a general rule, transfer of HO from one BIR district office to another is discouraged. Only transfers by a HO to a bigger office or business establishment can be allowed.
Transfer of Taxpayers Engaged inBusiness or Practice of Profession Head Office (HO) The old BIR district office shall conduct an ocular inspection in the old business address before transferring the applicant’s registration data to the new BIR district office. The taxpayer requesting for transfer shall file the proper form to the old BIR district office.
Transfer of Taxpayers Engaged inBusiness or Practice of Profession Head Office (HO) A taxpayer requesting for transfer of his HO should not be allowed to transfer to a BIR district office where his previous RDO/ARDO is currently assigned. Strict adherence to this policy must be observed at all times.
Transfer of Taxpayers Engaged inBusiness or Practice of Profession Certificate of Registration (COR)/Authority to Print (ATP) The new BIR district office shall issue the COR immediately after the transfer of the taxpayer’s registration by the old BIR district office. The COR, Sales Invoice/Official Receipts (SI/OR) used in the old business location can still be used in the new business location without penalty, until a new COR and ATP is issued by the new BIR district office.
Transfer of Taxpayers Engaged inBusiness or Practice of Profession Filing of Tax Returns The filing of tax returns and payment of taxes to the new BIR district office shall commence following the issuance of the new COR.
Other Registration Updates Regular Updates: A change in nature of the business from sale of taxable goods and/or services to being VAT-exempt; A person whose transactions are exempt from VAT but voluntarily registered under the VAT system; A VAT registered person whose gross sales or receipts for three (3) consecutive years did not exceed the amount of P1,919,500.00. The person shall become liable to the percentage tax.
Other Registration Updates Regular Updates: Any other changes/updates in registration information previously supplied, including cancellation or change in tax types.
Cancellation of Registration Application for TIN/Registration cancellation shall take place upon: 1. Death of an individual 2. Full settlement of the tax liabilities of the estate 3. Discovery of a taxpayer having multiple TINs, and 4. Dissolution, merger or consolidation of juridical person
Certification Fee Any request for certification that may be requested by a taxpayer from the BIR district office where he is registered on matters relating to his registration shall be charged with a fee in an amount of One hundred pesos (P100.00), in addition to the documentary stamp tax imposed.
Penalty Provision 1. Failure to register (those who are found unregistered during TCVD – subject to the penalties under prevailing revenue issuances.; 2. Late registration (those who are voluntary registering, but beyond the prescribed period as indicated in these Regulations) – Compromise penalty of P1,000.00 in addition to the unpaid ARF and penalties due thereon.
Penalty Provision 3. Late payment of ARF – subject to 25% surcharge and 20% interest per annum and P200.00 penalty. 4. Failure to register a branch or facility – subject to penalty of P1,000.00 per unregistered branch or facility 5. Acquisition of multiple TINs – aside from the criminal liability that may be imposed, P1,000.00 for every TIN acquired in excess of one
Penalty Provision 7. Any violation of the provisions of these Regulations shall be subject to penalties provided in Sections 254 and 275, and other pertinent provisions of the Code, as amended.
Repealing Clause All existing rules, regulations and other issuances or portions thereof inconsistent with the provisions of these Regulations are hereby modified, repealed or revoked accordingly except those rules that would necessitate registration system enhancement when the modified rules shall take effect only upon availability of the enhanced system.
Thank You!BUREAU OF INTERNAL REVENUE Revenue Region No. 13 Cebu City June 15, 2012