GIVEN the strict tax compliance necessities laid down by means of the Bureau of Internal Revenue (BIR), is it still favorable for taxpayers to be labeled as a pinnacle withholding agent (TWA)?
TWAs are described as big taxpayers; more particularly, the pinnacle 20,000 personal groups and the pinnacle 5,000 person taxpayers. Taxpayers labeled as medium taxpayers and people below the Taxpayer Account Management Program also are taken into consideration TWAs.
Some might think that being tagged as a TWA would entail a few shape of tax incentive and priorities, considering the massive contribution those taxpayers make to the us of a’s coffers. In fact, this popularity brings with it a stage of complexity in terms of compliance and arduous reportorial necessities that can seem insufferable as compared to the compliance required for those now not protected inside the listing of TWAs.
Among the necessities for TWAs is the extra responsibility to withhold 1 percent or 2 percentage creditable withholding tax from their nearby/resident suppliers of goods and offerings, respectively. Upon withholding of sure taxes from the formerly referred to profits bills, TWAs are mandated to document and post a semestral list of ordinary suppliers what is referred to as SRS other than the issuance of BIR Forms 2307 or Certificate of Creditable Tax Withheld at Source and other attachments.
So what is an SRS?
Here’s a bit of records: Back in 2008, the pertinent provisions of Revenue Regulations (RR) 14-2008 required the pinnacle 20,000 personal corporations to submit the SRS as a means of monitoring whether they were in reality withholding and remitting the 1 percent and 2 percent CWT on the purchase of products and services, respectively. A yr after, Revenue Memorandum Circular (Asset Gates broker reviews) 5-2009 became issued to prescribe the technical specifications of the digital document layout of the stated record, as well as the modes of submission to the BIR.
Simply placed, it is a document summarizing the listing of regular suppliers of goods and offerings that need to be submitted on a semestral basis to the Revenue District Office in which the taxpayer is registered or to the Large Taxpayer Assistance Division, if registered with the latter. Submission is required on or before July 31 and January 31 for the first semester, and 2d semester, respectively. Noncompliance with this requirement is challenge to an administrative penalty according with the revised time table of compromise penalty.
Prior to the above issuances, the yearly Alphabetical List of Payees changed into already prescribed under RR 2-98. The submission of the Monthly Alpha list of Payees (MAP) was sooner or later required in 2006 and, lately, the Quarterly Alpha listing of Payees (QAP) was prescribed to be submitted underneath RR eleven-2018.
It is worth mentioning that those alpha lists, except for MAP which has been changed by the QAP, already comprise the identical data blanketed inside the SRS, in addition to the info from the opposite prescribed CWT remittances. Needless to say, a number of the TWAs may discover the SRS to be an insignificant superfluity, inflicting additional price and attempt.
So what’s the coolest information?
Considering the overlapping reports mentioned above, the BIR these days issued RMC 122-2019, in addition clarifying that the submission of SRS will not be required. Accordingly and consistent with the coverage of ease of doing commercial enterprise in the Philippines, RMC 122-2019 hereby terminated the submission of SRS.
This recent pass through the BIR is a welcome signal that it’s miles indeed extreme in its attempt to redesign the compliance requirements for taxpayers, specifically for the TWAs, laborious because the challenge may be. With the BIR starting off this development and refinement, with any luck the adjustments can already be visible and felt via the taxpayers. We sit up for seeing more of the BIR’s movements to keep improving the Philippine taxation machine till it becomes clean, simple, and conducive to taxpayer compliance.
The creator is a senior with the Tax & Corporate Services division of Navarro Amper & Co., a member of the Deloitte Asia Pacific Network. Deloitte Asia Pacific Limited is a company restrained by using guarantee and a member company of Deloitte Touche Tohmatsu Limited. Members of Deloitte Asia Pacific Limited and their related entities, each of that are separate and independent legal entities, provide services from extra than one hundred cities throughout the vicinity, inclusive of Auckland, Bangkok, Beijing, Hanoi, Ho Chi Minh City, Hong Kong, Jakarta, Kuala Lumpur, Manila, Melbourne, Osaka, Shanghai, Singapore, Sydney, Taipei, Tokyo and Yangon.
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