Law Summary

1. Authority and Purpose

• Legal Principle: This regulation is promulgated under Section 244 of the Tax Code of 1997, in relation to Section 6 (H) of the same Code.
• Purpose: To amend certain provisions of Revenue Regulations No. 21-2002 regarding the procedural and documentary requirements for the preparation and submission of financial statements accompanying tax returns.

2. Amendments to Financial Statement Requirements

• Legal Principle: The amendments require additional disclosures in the Notes to Financial Statements.

• Key Definitions:

  • VAT Output Tax: The total value-added tax declared during the taxable year.
  • VAT Input Tax: The value-added tax claimed for various categories of purchases.

• Important Requirements:

  • Financial statements must include details on:
    • VAT output tax declared and the basis for it.
    • Breakdown of VAT input taxes by:
      • Beginning of the year balance.
      • Current year domestic purchases, specifying types of goods and services.
      • Claims for tax credit/refund and other adjustments.
      • Year-end balance.
    • Landed cost of imports and related customs duties.
    • Excise taxes classified by product categories.
    • Documentary stamp taxes on specific transactions.
    • Other local and national taxes, including real estate taxes and license fees.
    • Amounts of withholding taxes categorized by type.
    • Deficiency tax assessments and involved amounts, whether protested or not.
    • Tax cases under investigation or litigation.

• Bullet Points:

  • Disclose VAT output and input taxes.
  • Include customs duties and excise taxes in financial statements.
  • Report withholding taxes and deficiency tax assessments.
  • Provide information on pending tax cases.

3. Repealing Clause

• Legal Principle: The regulation includes a clause that revokes any inconsistent rules or regulations.
• Important Requirements:
  • All existing rules, regulations, or issuances inconsistent with the provisions of these regulations are modified, repealed, or revoked.
  • Includes the abolition of the requirement for a separate Schedule of Taxes and Licenses.

4. Effectivity Clause

• Legal Principle: Specifies when the regulations come into effect.
• Timeframe: These regulations will take effect 15 days after their complete publication in a newspaper of general circulation in the Philippines.

5. Recommendations and Adoption

• Legal Principle: Regulatory approval and adoption are completed by relevant authorities.
• Key Figures:
  • Adopted by: Cesar V. Purisima, Secretary of Finance.
  • Recommended by: Kim S. Jacinto-Henares, Commissioner of Internal Revenue.

Key Takeaways

• The BIR Revenue Regulations No. 15-2010 amends the documentary and procedural requirements for financial statements accompanying tax returns.
• Key disclosures now include a detailed breakdown of VAT, customs duties, excise taxes, and withholding taxes.
• The regulations repeal previous conflicting rules and take effect 15 days post-publication.
• Compliance with these new requirements is essential for accurate tax reporting and avoiding potential liabilities.