QuestionsQuestions (BIR REVENUE REGULATIONS NO. 15-2010)
RR 15-2010 is issued pursuant to Section 244 of the Tax Code of 1997, as amended, in relation to Section 6(H) of the Tax Code of 1997, which authorizes the Commissioner of Internal Revenue to prescribe additional procedural and/or documentary requirements related to the preparation and submission of financial statements accompanying tax returns.
RR 15-2010 amends certain provisions of Revenue Regulations No. 21-2002. Specifically, Section 2 of RR No. 21-2002, as amended, was further amended by inserting additional requirements in paragraph (e).
In addition to disclosures required by Philippine Financial Reporting Standards (and other conventions adopted), the Notes to Financial Statements must include detailed information on taxes, duties, and license fees paid or accrued during the taxable year, particularly enumerated items such as VAT, excise tax, DST, withholding taxes, and tax cases/assessments.
The Notes must include (1) the amount of VAT output tax declared during the year, including the account title and amounts based on it; and (2) if there are zero-rated and/or exempt sales/receipts, a statement to that effect and the legal basis. It must also include the VAT input taxes claimed, broken down by beginning balance, current year domestic purchases/payments (with specific categories), claims for tax credit/refund and other adjustments, and ending balance.
VAT input taxes claimed must be broken down into: (a) beginning of the year; (b) current year domestic purchases/payments for goods for resale/manufacture or further processing; goods other than for resale or manufacture; capital goods subject to amortization; capital goods not subject to amortization; services lodged under cost of goods sold; services lodged under other accounts; (c) claims for tax credit/refund and other adjustments; and (d) balance at the end of the year.
The Notes must disclose the landed cost of imports and the amount of customs duties and tariff fees paid or accrued thereon.
Excise tax/es must be classified per major product category (e.g., tobacco products, alcohol products, automobiles, minerals, oil and petroleum, etc.) and disclosed separately for (a) locally produced excisable items and (b) imported excisable items.
DST on loan instruments, shares of stock, and other transactions subject thereto must be disclosed.
It requires disclosure of all other taxes, local and national, including real estate taxes and license/permit fees, specifically “lodged under the Taxes and Licenses account” both under the Cost of Sales and Operating Expenses Accounts.
Withholding taxes must be disclosed and categorized into: (i) tax on compensation and benefits; (ii) creditable withholding tax/es; and (iii) final withholding tax/es.
The Notes must include periods covered and amounts of deficiency tax assessments, whether protested or not.
The Notes must disclose tax cases and the amounts involved under preliminary investigation, litigation, and/or prosecution in courts or bodies outside the BIR.
Section 6 of RR 21-02, as amended by RR 15-2010, includes a repealing clause: all existing rules, regulations, and other issuances or portions thereof inconsistent with RR 15-2010 are modified, repealed, or revoked, including the submission of a separate Schedule of Taxes and Licenses.
RR 15-2010 takes effect fifteen (15) days following complete publication in a newspaper of general circulation in the Philippines.
RR 15-2010 requires disclosure of taxes, duties, and license fees “paid or accrued” during the taxable year, meaning that even if cash payments have not yet been made, accruals recognized in the financial statements during the year must still be reflected in the required Notes disclosures.
Failure to provide the specified breakdown in the Notes may be considered non-compliance with the documentary requirements for financial statements accompanying tax returns, potentially exposing the taxpayer to additional scrutiny, possible deficiency/assessment triggers, or adverse findings during BIR review.