Definition of Terms
- "Privilege-Store": Temporary stalls or outlets, not permanently fixed, located in malls, hospitals, streets, etc., selling goods/services briefly.
- "Exhibitor" or "Organizer": Primary lessee of the entire space, sub-leasing to privilege-store operators; if the owner directly leases, owner is the organizer.
- "Privilege-Store Operator": Person or entity sub-leasing from the organizer to sell goods/services during lease duration.
Obligations of Exhibitor/Organizer
- Must post exhibitor's Certificate of Registration prominently.
- Must withhold 5% expanded withholding tax on lease rentals to the real property owner and remit using BIR Form No. 1601E.
- Must notify the Revenue District Office (RDO) of participants and operation dates before opening.
- Must ensure privilege-store operators are registered with BIR and have paid withholding tax, advance income tax, and advance VAT or percentage tax before operation.
- Must monitor compliance and report violations to the Bureau of Internal Revenue; can revoke lease agreements for non-compliance.
Obligations of Privilege-Store Operators
- Must withhold 5% expanded withholding tax on rentals paid to the exhibitor/organizer and remit on prescribed dates.
- Must pay advance income tax and advance VAT or percentage tax monthly before operation period, regardless of registration status.
- Must register with RDO where principal business is located.
Imposition of Advance Payment of Taxes
- Business tax: P150 per day or P4,500 per month for VAT or percentage tax, based on LGU permission duration.
- Income tax: P50 per day or P1,500 per month.
- Commissioner of Internal Revenue may adjust rates based on business situations or taxpayer's justified request.
Credit for Advance Payment
- Advance payments are credited against actual tax liabilities for the period concerned.
- For non-VAT taxpayers (gross sales ≤ P550,000), advance payment credited against 3% percentage tax.
- For VAT taxpayers, advance payment credited against output tax including sales from all business locations.
- Advance income tax credited against quarterly and annual income tax returns.
Proof of Advance Payment
- Evidenced by validated BIR Form No. 0605 and Official Receipt/Deposit Slip from Authorized Agent Bank (AAB) or Revenue Collection Officer (RCO).
- Tax returns must include proof of advance payment or claims will be disallowed, and deficiency tax assessments made.
Implementation Guidelines
- RDOs monitor exhibitor/organizer compliance and validate participant lists.
- Mission Orders deploy RCOs/ROs for physical compliance checks and monitoring of advance tax payments.
- Advance payments are made monthly using BIR Form No. 0605 before operation starts.
- Weekly reports on non-compliance and advance payment details must be submitted by RCOs/ROs.
- RCOs/ROs identify unregistered sellers for RDO registration enforcement.
Penalty Clause
- Violations subject to penalties under Sections 254, 275, and other pertinent provisions of the NIRC.
Repealing Clause
- Previous inconsistent revenue issuances are repealed, modified, or amended.
Effectivity
- Effective 15 days after publication in a newspaper of general circulation in the Philippines.
This Regulation addresses tax collection challenges posed by "privilege-store" operations by mandating advance tax payments, withholding obligations, registration requirements, monitoring procedures, and enforcement mechanisms to ensure proper tax compliance and revenue generation for the government.