BIR Rules on Bank Loan ITRs and FS Verification

BSP Circular No. 472 Series 2005 requires banks to obtain the latest Income Tax Return (ITR) and Financial Statements (FS) received by the Bureau of Internal Revenue (BIR) from credit applicants and co-makers (and related parties as applicable).
BIR Regulations No. 4-2005 provides a system for banks to ensure that credit applications involve tax compliant applicants, and that the submitted tax documents are authentic.
BIR Regulations No. 4-2005 provides a convenient and systematic way for tax compliant applicants to obtain the required documents and comply with the BSP circular’s submission requirements.

Electronic Filing and Payment System (EFPS) means the BIR internet-based system for paperless filing of tax returns, payment of taxes due, and submission of information such as Financial Statements, Balance Sheets, and Summary Lists of Sales and Purchases; it is available through the BIR Portal my.bir.gov.ph.
Latest Income Tax Return (ITR) means:
- For participants already with an Annual ITR: the ITR for the preceding Tax Year, whether based on a calendar year or fiscal year.
- For new establishments without annual ITRs yet: the ITR for the most recent quarter.
Financial Statements (FS) include the balance sheet, statement of income, statement of changes in equity, and statement of cash flows, together with all notes to the statements.
For 2005 onward, for taxpayers with total assets of more than 15 Million, only financial statements audited by external auditors accredited by the Securities and Exchange Commission (SEC) are acceptable.
The regulated credit participants include the borrower, co-maker, endorser, surety, and/or guarantor, if applicable.

Banks and financial institutions must require from the credit applicant the supporting tax documents and disclosures needed to assess creditworthiness and verify authenticity.
Credit applicants must submit a copy of the latest ITR of the borrower, co-maker, endorser, surety, and/or guarantor, if applicable, duly stamped as received by the BIR.
If the borrower is engaged in business, the applicant must submit a copy of the borrower’s latest financial statements as submitted for taxation purposes to the BIR, except as otherwise provided by law and other regulations.
Applicants must provide a waiver of confidentiality of client information and/or an authority of the bank to conduct random verification with the BIR to establish the authenticity of the submitted ITR and accompanying financial statements.
Banks must check and consider the consistency of the data/figures in the ITR and statements in evaluating the applicant’s financial capacity and creditworthiness.
Supporting EFPS and manual filing rules treat the tax return as duly stamped and received when the required filing systems and references are used.

Prospective credit applicants and co-makers are strongly advised to file their income and financial statement and other required information electronically using EFPS to facilitate the bank’s ITR and FS verification.
An EFPS-filed ITR can be downloaded from the BIR Portal by the applicant for submission/processing with the bank.
Banks must be able to verify the authenticity of the EFPS-filed ITR through the verification procedures provided for authentication.
Returns filed with Authorized Agent Banks (AABs) or through EFPS with corresponding reference number are deemed duly stamped and received by the BIR.

EFPS-generated or printed ITRs must be checked for authenticity either:
- by telephone to the BIR Contact Center Tel 981-8888, or
- through the BIR Portal.
For Non-EFPS tax returns, a copy of the tax return must be faxed to the BIR Contact Center, together with a covering letter requesting verification that includes:
- the name of the bank;
- the contact person;
- the bank’s telephone number and/or fax number;
- the applicant’s/co-maker’s name and TIN; and
- the applicant’s/co-maker’s telephone/fax numbers.
The BIR Contact Center handles verification to the Region/district concerned and responds to the requesting bank accordingly.

Supporting FS required to support loan applications must be presented to the Revenue District Office after filing and paying either through EFPS or manually through the AABs for stamping.
To verify the authenticity of FS presented to support loan applications, banks must fax an Authenticity Verification Request to the BIR Contact Center (Tel 981-8888) and attach the FS to be verified.
The fax authenticity request must contain:
- bank name;
- contact person;
- fax number;
- telephone number;
- name and TIN of credit applicant; and
- total revenues in the FS.

Applicants who file their ITR through EFPS obtain an EFPS-filed ITR that can be downloaded from the BIR Portal for bank verification.
Banks rely on BIR authentication processes—through the BIR Portal, BIR Contact Center telephone verification, or fax-based verification for non-EFPS returns—to establish authenticity.
FS supporting documents for loan applications proceed through the BIR stamping step with either EFPS-based or manual-AAB-based filing and payment workflows, and then undergo bank-initiated verification through the BIR Contact Center.