BIR Rules on ITR and FS Submission for Bank Loans

The regulations are issued pursuant to the directive in BSP Circular No. 472, series of 2005.
The regulations establish a system that enables banks to discharge their responsibilities under BSP Circular No. 472, series 2005, requiring tax-related documents from credit applicants and co-makers.
The regulations provide a simple and convenient method for tax-compliant applicants to obtain and submit the required documents for loan evaluation.
The regulations ensure the authenticity of ITR, financial statements, and other related documents submitted by credit applicants and co-makers.

Electronic Filing and Payment System (EFPS) is the internet-based BIR 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 through the BIR portal at my.bir.gov.ph.
Latest Income Tax Return (ITR) means:
- For taxpayers already with an Annual ITR, the ITR for the preceding Tax Year (whether calendar or fiscal year); and
- For new establishments without annual ITRs yet, the most recent quarter’s ITR.
Financial Statements (FS) include:
- The balance sheet,
- The statement of income,
- The statement of changes in equity, and
- The statement of cash flows,
- together with all notes to the statements.
Starting 2005, for taxpayers with total assets of more than 15 Million, only financial statements audited by external auditors accredited by the SEC are acceptable.

Banks and financial institutions must require credit applicants and co-makers to submit a copy of the latest ITR and, when applicable, related financial statements for loan evaluation.
The latest ITR must be submitted for the borrower, co-maker, endorser, surety, and/or guarantor, if applicable.
Where the borrower is engaged in business, banks must require the borrower’s latest financial statements as submitted for taxation purposes to the BIR, subject to the exception that copies are governed by law and other regulations.

Credit applicants and co-makers must provide, along with usual borrower information, the required tax and financial documents used to evaluate financial capacity and creditworthiness.
Applicants must submit a copy of the latest ITR for the relevant persons (borrower, co-maker, endorser, surety, and/or guarantor when applicable), duly stamped as received by the BIR.
Applicants must submit financial statements when the borrower is engaged in business, as submitted for taxation purposes to the BIR.
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 ITR and accompanying financial statements.

Banks must check and consider the consistency of the data/figures in the ITR and the accompanying financial statements.
The checked consistency must be used in evaluating the financial capacity and creditworthiness of credit applicants and co-makers.

Prospective credit applicants and co-makers are strongly advised to file their income, financial statement, and other required information electronically using EFPS to facilitate the bank’s verification under the circular.
An applicant may download a copy of the EFPS-filed ITR from the BIR portal, while the bank verifies authenticity through the verification procedures.
Returns filed with AABs or through EFPS with the corresponding reference number are deemed duly stamped and received by the BIR.

EFPS-generated or printed ITRs must be checked for authenticity:
- by calling the BIR Contact Center at 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 with a covering letter requesting verification.
The covering letter request must include:
- 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.

Supporting FS must be presented to a 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) attaching the FS to be verified.
The fax request must include:
- the bank name,
- contact person,
- fax number,
- telephone number,
- the name and TIN of the credit applicant, and
- the total revenues in the FS.

The regulations become effective 15 days after publication in any newspaper of general circulation.
The issuance is adopted on February 16, 2005.