Question & AnswerQ&A (BIR REGULATIONS NO. 4-2005)
They are required to submit the latest Income Tax Return (ITR) duly stamped as received by the BIR, and if engaged in business, their latest financial statements as submitted for taxation purposes to the BIR.
All bank borrowers, co-makers, endorsers, sureties, and/or guarantors who apply for credit must submit their latest ITR and financial statements if applicable.
Banks must obtain a statement of assets and liabilities, income and expenses, and a waiver of confidentiality or authority to verify the authenticity of the ITR and financial statements with the BIR.
Authenticity is verified through the BIR Contact Center by phone or fax, or via the BIR Portal for EFPS-filed returns, and banks must submit an Authenticity Verification Request for financial statements.
EFPS is an internet-based system of the BIR for paperless filing of tax returns, payment of taxes, and submission of related information such as financial statements.
For existing taxpayers, it refers to the ITR for the preceding tax year; for new establishments, it refers to the most recent quarter's ITR.
Borrowers must submit the balance sheet, statement of income, statement of changes in equity, statement of cash flows, and all notes to these statements.
Their financial statements must be audited by external auditors accredited by the SEC to be acceptable.
It authorizes the bank to conduct random verification with the BIR to establish the authenticity of the ITR and financial statements submitted.
They took effect fifteen (15) days after publication in any newspaper of general circulation following their adoption on February 16, 2005.