QuestionsQuestions (Republic Act No. 8496)
RA No. 11976 is the “Ease of Paying Taxes Act.” It declares the State’s policy to protect taxpayer rights, modernize tax administration to encourage proper and easy compliance at least cost, update the taxation system by replacing antiquated procedures, and enact policies suitable to different types of taxpayers.
It classifies taxpayers by gross sales: Micro (less than P3,000,000), Small (P3,000,000 to < P20,000,000), Medium (P20,000,000 to < P1,000,000,000), and Large (P1,000,000,000 and above).
“Filing of return” is accomplishing and submitting the prescribed tax return electronically or manually to the BIR or through authorized agent banks/authorized tax software providers. “Payment of tax” (or remittance) is delivering the amount of tax due/withheld—electronically or manually—to the BIR or through authorized agent banks/authorized tax software providers.
RA 11976 expressly repeals Section 34(k) of the NIRC and renumbers the succeeding paragraph; the practical significance is that whatever tax rule previously contained in Section 34(k) is removed/ceased to apply under the NIRC.
An individual citizen of the Philippines who is working and deriving income solely from abroad as an “Overseas Contract Worker” under Section 23(C) of the NIRC, or as an “Overseas Filipino Worker” under Republic Act No. 11641.
Except when the Commissioner permits otherwise, the return may be filed with any authorized agent bank, Revenue District Office through a Revenue Collection Officer, or an authorized tax software provider.
They must file a return for the taxable year including both spouses’ income. If it is impracticable for them to file one return, each spouse may file separate returns, but the BIR consolidates them for verification.
The total income tax due must be paid—electronically or manually—at the time the return is filed.
Micro taxpayers shall not be required to withhold taxes under Subsection (b) of Section 57.
The obligation arises at the time the income has become payable.
Yes. All taxes withheld pursuant to the NIRC and its implementing rules are trust funds and must be maintained in a separate account and not commingled with other funds.
Quarterly declarations and the final adjustment return may be filed electronically or manually with authorized agent banks, or with the Revenue District Office through Revenue Collection Officer, or via authorized tax software. The quarterly declaration is due within 60 days after the close of each of the first three quarters; final adjustment return by 15 April (calendar year) or within 15 days after the 4th month following the fiscal year end. Payment is at the time the declaration/return is filed.
Within 25 days from the close of each calendar quarter, to either authorized agent banks, Revenue District Office through a Revenue Collection Officer, or authorized tax software provider.
The Commissioner may, with approval of the Secretary of Finance, require employees/tax remitters to pay or deposit withheld taxes more frequently if deemed necessary to protect the Government’s interest.
RA 11976 confirms that VAT-registered persons pay monthly VAT, while the filing/payment rules in the amended text also address quarterly returns/within 25 days after the close of the taxable quarter, including a clarification beginning January 1, 2023.
A VAT-registered person may cancel VAT registration if: (1) they apply in writing/electronically and demonstrate to the Commissioner’s satisfaction that their gross sales for the next 12 months (excluding exempt sales under Section 109(A) to (CC)) will not exceed the VAT threshold; or (2) they have ceased trading/business and do not expect to recommence within the next 12 months. The cancellation is effective from the first day of the following month.