Question & AnswerQ&A (REVENUE MEMORANDUM CIRCULAR NO. 57-2015)
The primary purpose of Revenue Memorandum Circular No. 57-2015 is to provide guidance on the submission of inventory lists and additional financial accounting reports to the Bureau of Internal Revenue (BIR), aiming to enhance the quality and adequacy of accounting information for better tax administration and enforcement.
Section 6 (H) of the Tax Code of 1997, as amended, authorizes the Commissioner of Internal Revenue to prescribe additional procedural or documentary requirements for tax administration and enforcement.
The Circular covers companies maintaining inventories such as manufacturing, wholesaling, distributing, retailing sectors, real estate dealers/developers, and service companies like construction companies and building contractors.
The data and information contained in the submitted inventory lists and schedules must be reconciled with the amounts declared in the companies' financial statements and annual income tax returns.
Taxpayers should use the prescribed formats shown in the Annexes of the Circular (Annex aAa for manufacturing/merchandising or retail companies; Annexes aBa and aB-1a for real estate companies; and Annex aCa for construction industry). The submission must include hard and soft copies stored on a DVD-R, properly labeled, and accompanied by a notarized certification.
The initial filing using the prescribed format should be submitted on or before September 30, 2015, covering the ending inventory as of December 31, 2014.
Non-large taxpayers must submit to the Revenue District Office (RDO) where they are registered, while large taxpayers must submit to the Large Taxpayers Assistance Division (LTAD), Excise Large Taxpayers Regulatory Division (ELTRD), or Large Taxpayers Division (LTD) in Makati and Cebu.
Non-conforming submissions will be deemed as not received by the BIR and may lead to the imposition of penalties under the National Internal Revenue Code.
Under Section 250 of the National Internal Revenue Code, failure to submit required documents results in a fine of P1,000 for each failure, up to a maximum of P25,000 per calendar year. Under Section 255, failure to file or supply correct information can lead to a fine of not less than P10,000 and imprisonment of 1 to 10 years depending on the gravity of the violation.
The notarized certification serves as an official attestation by the authorized representative of the taxpayer that the data and information contained in the submitted inventory list and schedules are true and correct.