Objective and declared policy
- The regulations require taxpayers engaged in business to register with the Bureau of Internal Revenue (BIR), consistent with the National Internal Revenue Code of 1997, as amended (Section 1).
- The regulations expressly cover commercial lessors and their tenants, requiring that lessors transact only with BIR-registered taxpayers (Section 1).
- The regulations are designed to ensure owners or sub-lessors submit essential information to the BIR and to impose sanctions that ensure compliance (Section 1).
Scope: who must comply
- Owners or sub-lessors of commercial establishments/buildings/spaces must ensure the intended lessee is a BIR-registered taxpayer (Section 2).
- Tenants that conduct commercial activities in leased spaces are within the regulatory coverage because their registration profile is reported by the owners or sub-lessors (Sections 1 and 2).
- The reportorial obligation applies to commercial establishments/buildings/spaces that are leased or rented out to persons doing business therein (Section 2).
- The report is submitted to the BIR Revenue District Office (RDO) where the commercial establishments/buildings/spaces are located (Section 2).
Core definition of a BIR-registered taxpayer
- A BIR-registered taxpayer must have a Tax Identification Number (TIN), a BIR Certificate of Registration, and duly registered receipts, sales or commercial invoices in compliance with Section 236, Section 237, and Section 238 of the Tax Code (Section 2).
- Owners or sub-lessors must deal only with taxpayers that meet this BIR-registration profile (Section 2).
Owners’ reportorial duties and required filings
- Owners or sub-lessors must submit, under oath, the required information in hard and soft copies to the proper BIR RDO (Section 2).
- Owners or sub-lessors must submit the report:
- On January 31 starting from the current year for tenants as of December 31 of the previous year, and
- On July 31 starting from the current year for tenants as of June 30 of the current year (Section 2).
- Owners or sub-lessors must submit the following:
- A building/space layout of the entire area leased with proper unit/space address or reference;
- A Certified True Copy of the Contract of Lease per tenant; and
- A Lessee Information Statement in the prescribed format (Section 2).
- Lessee Information Statement formats are required in Excel format, with a printed copy and a soft copy stored in a CD-R (Section 2).
Lessee Information Statement: content requirements
- For Initial Filing, the Lessee Information Statement must include:
- Name of Owner/Lessor and TIN;
- Address;
- Tenant’s Profile as of June 30, [year] or Dec 31, [year];
- Location of Building/Space for Commercial Lease;
- For each tenant: Location, Name of Tenant, Total Leased Area, Monthly Rental, Start of lease (mm/dd/yyyy), and Duration/Period of Lease;
- BIR Registration Profile for each tenant including Floor/Unit No., Tax Identification No. (TIN), Authority to Print # for OR’s/Invoices, and POS/CRM Permit (including the POS/CRM note for dispensing receipts) (Section 2).
- For Subsequent filing, the Lessee Information Statement structure must include:
- New Tenants entries; and
- Terminated Tenants entries with Date lease ended (mm/dd/yyyy), along with Location, Name of Tenant, Tax Identification Number (TIN), Total Leased Area, and Floor/Unit No. (Section 2).
BIR monitoring, validation, and information flow
- The BIR Revenue District Office (RDO) where the leased commercial establishment/building/space is located must monitor compliance with the regulations (Section 3).
- Lessors may seek assistance from the same RDO to verify the correctness of the submitted TIN of their tenants (Section 3).
- Upon receipt of the reportorial requirements, the RDO must validate the tenant registration profile using the BIR’s Integrated Tax System (ITS) database (Section 3).
- The RDO where the report is received must forward the report to the RDO where the owner or sub-lessor is registered, and that receiving RDO must maintain its own database for future audit and investigation activities (Section 3).
Penalties for non-compliance and false reporting
- Failure to comply with the Tax Code administrative duties—registration, issuance of receipts/sales/commercial invoices, and securing permits for authority to print—subjects the responsible person to criminal sanction or penalty under the Tax Code (Section 4).
- Owners or sub-lessors who fail to submit the required reports, willfully submit false or falsified information, or knowingly transact with taxpayers not duly registered with the BIR are subject to the penalty provided under Section 255 of the Tax Code (Section 4).
- Under Section 255, a person who willfully fails to pay tax, make required returns, keep records, supply correct and accurate information, or willfully fails to withhold/remit withheld taxes or refund excess taxes withheld on compensation at the time required by law or rules and regulations is punished, upon conviction, by:
- A fine of not less than PHP 10,000, and
- Imprisonment of not less than 1 year but not more than 10 years (Section 255 as quoted in Section 4).
- Under Section 267, declarations, returns, and other statements required under the Tax Code must contain a written statement made under the penalties of perjury in lieu of an oath.
- Under Section 267, any person who willfully files a declaration/return/statement with information not true and correct as to every material matter is subject, upon conviction, to the penalties prescribed for perjury under the Revised Penal Code (Section 267 as quoted in Section 4).
Transitory filing for initial tenant profiles
- The first tenant profile filing must cover tenants as of July 31, 2011 (Section 5).
- Owners and sub-lessors must comply by submitting the required documents on or before September 1, 2011 (Section 5).
- The initial submission must include:
- Building/space layout with proper unit/space address or reference;
- Certified True Copy of the Contract of Lease per tenant; and
- Lessee Information Statement in the prescribed Excel format with printed copy and soft copy stored in a CD-R, under oath (Section 5).
- The initial Lessee Information Statement must present the Tenant’s Profile as of July 31, 2011 and must include the required fields for the BIR Registration Profile, including Tax Identification No. (TIN) and Authority to Print # for OR’s/Invoices, and POS/CRM Permit (Section 5).
Repeal and effectivity
- Inconsistent regulations and other issuances, or portions thereof, are repealed, amended, or modified accordingly (Section 6).
- The regulations take effect after 15 days following publication in a newspaper of general circulation (Section 7).