Question & AnswerQ&A (BIR REVENUE MEMORANDUM CIRCULAR NO. 76-91)
The applicable exchange rate is the average interbank reference rate for the taxable year when the income and deductions were earned and incurred, respectively. This rate is contained in the U.S. Dollar Rates of Selected Currencies from the Treasury Department of the Central Bank of the Philippines.
These amounts shall be converted to Philippine pesos using the average peso/dollar interbank reference rate during the taxable year when the income and deductions were earned and incurred. This rate is published in the Peso/Dollar Monthly Averages report by the Central Bank of the Philippines.
The prevailing peso/dollar interbank reference rate at the time the tax liability is actually paid shall be applied.
The tax liability amount in U.S. dollars should be converted to the other foreign currency using the prevailing exchange rate from the foreign post at the time of actual payment.
The deficiency tax in U.S. dollars is determined by deducting any previous income tax payments (also in U.S. dollars) from the income tax due per audit. This amount is then converted to Philippine pesos using the prevailing interbank reference rate at the time of assessment or preparation of the Transcript of Assessment.
From the Treasury Department of the Central Bank of the Philippines.
The Peso/Dollar Monthly Averages report issued by the Central Bank of the Philippines.
The International Tax Affairs Division shall furnish the appropriate reference rate to use.
The prevailing peso/dollar interbank reference rate is published daily in selected national newspapers for use at the time of payment.
They are amended or modified accordingly by this circular.