Pre-Condition of Latest Tax Returns for Government Contract Participation
- All persons/entities (local or foreign) must submit latest income tax and business tax returns with their proposal/bid.
- Tax returns must be stamped, received, and validated by BIR, with certain exceptions.
- Returns filed through Authorized Agent Banks (AABs) or Electronic Filing and Payment System (EFPS) with reference numbers are considered valid.
Requirement of Tax Clearance
- Tax Clearance from BIR is mandatory as part of the bid/offer submission.
- Tax Clearance certifies no outstanding final assessment or delinquent tax.
Summary List of Contracts and Payments by Government Entities
- Government entities must regularly submit names of private contractors and payment amounts to BIR.
- Submission is made through BIR Form 1600 via EFPS, including a detailed alphabetical list of payees for the reporting period.
Definitions
- EFPS: Internet-based system for paperless filing of tax returns and payments, accessible via BIR Portal.
- Latest Income Tax Return (ITR): For established entities, the ITR for the preceding tax year; for new entities, most recent quarterly ITR.
- Latest Business Tax Return: VAT or Percentage tax returns covering the past six months; if less than six months in operation, monthly returns filed to date.
- Tax Clearance: Certification issued by BIR's Collection Enforcement Division confirming no outstanding tax liabilities.
Mandatory EFPS Filing
- From April 1, 2005, all prospective government contractors must file income and business tax returns electronically via EFPS.
Acceptable Tax Return Submissions
- From May 1, 2005, only EFPS-filed tax returns are accepted for government procurement compliance.
- An interim period until April 30, 2005 allows non-EFPS returns provided authenticity is verified by the Revenue District Office.
Verification and Processing of Tax Returns
- EFPS generated returns are authenticated via BIR Contact Center or BIR Portal.
- Non-EFPS returns submitted during interim must be faxed to BIR with identifying information for authenticity check.
Tax Clearance Application and Verification
- Requests for Tax Clearance must be written and include taxpayer details, procuring agency info, and contact numbers.
- Applications addressed to the Collection Enforcement Division, BIR National Office.
- Procuring agencies must verify Tax Clearance authenticity via BIR Contact Center or Portal.
Effectivity
- These regulations took effect fifteen days after publication in a newspaper of general circulation from February 16, 2005.