Amendment on BIR withholding tax returns filing

Payors must file two annual returns:
- BIR Form No. 1604-E (Annual Information Return of Creditable Income Taxes Withheld/Income Payments Exempt from Withholding Tax) by March 1.
- BIR Form No. 1604-CF (Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes) by January 31.
These returns must be filed with the BIR Large Taxpayers Assistance Division, Large Taxpayers District Office, Excise Taxpayers Assistance Division, or Revenue District Office depending on registration.
Individual payees whose sole income is subjected to final withholding tax under Section 57(A) are exempted from filing income tax returns (Section 51(A)(2)(c)).
BIR Form No. 2306, duly signed by employer and employee, suffices as income tax documentation for various government and private uses.
The exemption includes aliens and Filipinos employed under special entities like regional operating headquarters and offshore banking units.

Employers must issue BIR Form No. 2316 to employees who had taxes withheld on compensation and fringe benefits by January 31 of the next year or upon employment termination.
Failure to issue this certificate can trigger a mandatory audit upon verified complaint.
Employees qualified for substituted filing together with employers shall sign a joint certification that the employer's BIR Form No. 1604-CF filing serves as the employee's income tax return.
Such employees are exempt from filing BIR Form No. 1700.
The joint certification serves as proof of income tax compliance for financial, government, and travel tax exemption purposes.

Withholding agents must submit manual alphabetical lists of employees and payees for annual information returns.
Taxpayers with ten or more employees/payees are required to submit these lists on 3.5-inch floppy diskettes using a prescribed CSV data file format.
Filing options include:
1. Excel format per Revenue Regulations No. 7-2000.
2. Custom extract programs meeting BIR specifications.
3. Visual Foxpro Data Entry Module downloadable from BIR website.
Validation modules are available for options 1 and 2.
Backups of the submitted diskette data must be kept for three years.
Large taxpayers and excise taxpayers must submit to specific BIR divisions; others submit to respective Revenue District Offices.
BIR Form No. 1604-CF deadline: January 31; Form No. 1604-E deadline: March 1.
Only readable diskettes are considered duly filed.
Violation subjects payors to mandatory audit.

Individuals earning only compensation income from a single employer in the Philippines, with tax due equal to tax withheld, are not required to file BIR Form No. 1700.
Employer's filing of BIR Form No. 1604-CF counts as the employee's substituted income tax return.
Exceptions requiring filing of BIR Form No. 1700 include: A. Income from multiple employers during the year. B. Incorrect tax withholding causing collectible/refundable taxes. C. Monthly gross income not exceeding Php 5,000 (or statutory minimum wage) with opted non-withholding. D. Additional non-business, non-professional income other than compensation. E. Spouse receiving income requiring filing under certain conditions. F. Non-resident aliens engaged in trade/business earning compensation or other income.
Married individuals required to file returns under other circumstances need file one joint return covering both spouses' income.

Substituted filing of returns for qualified employees is optional for taxable year 2001 (returns due April 15, 2002).
For 2001, joint certification between employer and employee must be executed by April 15, 2002.
From taxable year 2002 onwards, substituted filing is mandatory where applicable.
Annual joint certifications must be executed by January 31 with BIR Form No. 2316 and retained by both parties.

All prior rules and regulations inconsistent with these amendments are repealed or amended accordingly.

These regulations take effect immediately covering taxable year 2002 and onwards, subject to the transitory provisions and specific clauses noted.