Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief,...

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Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division

Transcript of Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief,...

Page 1: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

Orientation Seminar for Tax Agents and Practitioners

Susan D. Tusoy, cpa, mps

Asst. Chief, Assessment Division

Page 2: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

It is impossible to begin to learn that which one thinks one already knows.

- Epictetus

Page 3: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

REGISTRATION OF BOOKS OF ACCOUNTS

Page 4: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

Registration Procedures:1.Manual books of accounts previously

registered – whose pages are not yet fully exhausted

can still be used in the succeeding years without the need of re-registering or re-stamping

– the portions pertaining to a particular year should be properly labelled or marked by the taxpayer.

Registration of Manual Books of Accounts (RMC 82-2008)

Page 5: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

2. The registration of a new set of manual books of accounts shall only be at the time when the pages of the previously registered books have all been already exhausted.

• Not necessary to register new set of manual books of accounts each and every year.

Registration of Manual Books of Accounts (RMC 82-2008) cont...

Page 6: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

3. other deadlines

• Jan. 30 of the ff year (RMO 29-2002) applies only to computerized books of accounts and not to manual books of accounts

• The “15 days after the end of the calendar year” (RMC 13-82) refers to loose-leaf books of accounts and not to manual books of accounts

Registration of Manual Books of Accounts (RMC 82-2008) cont...

Page 7: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

4. Newly registered taxpayers shall present the Manual Books of Accounts before use to the RDOs where the place of business is located or concerned office under the Large Taxpayer Service for approval and registration.

Registration of Manual Books of Accounts (RMC 82-2008) cont...

Page 8: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

5. Subsidiary manual books of accounts to be used by taxpayers, in addition to the manual books of accounts, shall be registered before use, following the same rules.

6. TSS personnel has no authority to examine whether the previously registered books are complete and/or updated prior to its approval.

Registration of Manual Books of Accounts (RMC 82-2008) cont...

Page 9: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

The requirement of binding and stamping of computerized books of accounts and/or receipts and invoices are no longer necessary, provided that:

1. Soft copy of the CAS in text file format

shall be made available in the ff mode:– In CD-ROM (read only) properly labelled– Electronically archived information

In case the TP has no capability to submit in CD-ROM form, procedures under the manual system shall prevail

On CAS – (RMO 29-2002)

Page 10: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

On CAS – (RMO 29-2002) con’t...

2. A duly notarized certification in the form of an affidavait ascertaining/attesting the accuracy of the ff shall be submitted to the RDO within 30 days from the close of the taxable year:

– The number of receipts and invoice used during the year; and

– Soft copy in CD-ROM duly stamped “registered” and signed by authorized official or the archived books of accounts

Page 11: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

On Loose Leaf (RMC 13-82)

• TP should be required to bind the loose leaf forms within 15 days after the end of the taxable year

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Taxpayers’ Responsibility for Representations Made in their

Behalf by Their Tax Agents (RMC 82-2007)

Page 13: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

• The contents and representations of the tax returns and information statements remain the responsibility of the taxpayers in their capacity as the principals;

• The taxpayers are under strict obligation to check, verify, and validate the– Authenticity– Correctness and– Validity of the returns/information filed with the

BIR

Taxpayers’ Responsibility for Representations Made in their Behalf by Their Tax Agents (RMC 82-2007)

Page 14: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

• Any findings, errors, violations or infractions noted therein as a result of such verification and authentication procedures shall render both the taxpayer and his/its tax agent civilly, administratively and criminally liable, pursuant to existing rules and regulations.

Taxpayers’ Responsibility for Representations Made in their Behalf by Their Tax Agents (RMC 82-2007)

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• Since the Annual ITR is primarily the responsibility of the management of the taxpayer, this shall be accompanied by a Statement of Management’s Responsibility;

• All taxpayers required to file annual income tax return shall required to submit a Statement of Management’s Responsibility.

Submission of the Statement of Management Responsibility (RR 3-2010)

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SHOW CAUSE LETTER TO ERRING CPAs

Memo No. OPM No. 10-08-001

Page 17: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

Show Cause Letter to “Erring CPAs”

Memo No. OPM No. 10-08-001

-In its bid to improve tax compliance, the BIR has started writing “show cause letters” to CPAs who issued unqualified opinions in the audit reports of their clients’ F/S where there were validated and verified misstatements in said statements.

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Show Cause Letter to “Erring CPAs”

• While their responsibility is limited to that of expressing an opinion on the financial statements, the BIR believes that had they undertook the generally required audit procedures they could have easily uncovered probable big understatements.

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Show Cause Letter to “Erring CPAs”

• The CPAs concerned were given ten (10) days from receipt of the show cause letter to explain in writing the findings of the BIR.

• Erring CPAs may face suspension or revocation of their accreditation and possibly their license to practice.

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ANNUAL INVENTORY LIST

Revenue Memorandum Circular No. 2-84

Page 21: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

Annual Inventory List (RMC 2-84)

• Please be reminded on the submission of Annual Inventory List of stocks-in-trade, raw materials, goods in process, supplies and other goods– Quantity– Description– Unit cost– Total cost– Method of costing or valuing their inventory

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Annual Inventory List (RMC 2-84)

• Deadline– Beg. Inventory shall be submitted within 10

days after starting the business– Subsequent inventory list shall be submitted

not later than 30 days after the close of the calendar year or accounting period

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ADDITIONAL REQUIREMENTS IN THE PREPARATION AND SUBMISSION OF FINANCIAL

STATEMENTS

Revenue Regulations No. 15-2010

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Additional Requirements in the Preparation and Submission of F/S

• RR 15-2010 (amending RR 21-02)

• The notes of f/s shall include info on taxes, duties and license fees paid or accrued during the taxable year1. The amount of VAT Output tax and the

account title and amount/s upon which the same was based,

Page 25: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

Additional Requirements in the Preparation and Submission of F/S

2. The amount of VAT Input taxes claimed broken down into:

a. Beginning of the year

b. Current year’s domestic purchases/

payments– Goods for resale/manufacture or further processing– Goods other than for resale or manufacture– Capital goods subject to amortization– Capital goods not subject to amortization– Services lodged under cost of goods sold– Services lodged under other accounts

Page 26: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

Additional Requirements in the Preparation and Submission of F/S

c. Claims for tax credit/refund and other

adjustments; and

d. Balance at the end of the year.

3. The landed cost of imports/customs duties/ tariff fees

4.The amount of excise tax

5.DST on loan instruments, shares of stock, etc.

6.All taxes (local or nat’l) including real estate taxes, licence and permit fees accounts both under Cost of Sales and Opex accounts

Page 27: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

Additional Requirements in the Preparation and Submission of F/S

7. The amount of withholding taxes categorized into:

- Tax on compensation and benefits

- Creditable withholding taxes

- Final withholding taxes

8. Periods covered and amount/s of deficiency tax assessments, whether protested or not

9. Tax cases, and amounts involved, under preliminary investigation, litigation and/or prosecution in courts or bodies outside the BIR

Page 28: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

TAXABILITY OF AGRICULTURAL CONTRACT

GROWERS

Revenue Memorandum Circular No. 97-2010

Page 29: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

Taxability of Agricultural Contract Growers (RMC 97-2010)

• Toll processing services confirmed as VAT exempt pertain only services to clients from which growing of animals were contracted.

• Preparing and packaging hogs/chicken ready for delivery after producing or growing them can be said to be within the purview of agricultural contract growing.

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Taxability of Agricultural Contract Growers (RMC 97-2010)

• If such an activity is done independently of growing poultry, livestock, or other agricultural and marine food products, the same can be considered as VAT taxable services not covered by agricultural contract growing.

Page 31: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

GUIDELINES AND PROCEDURES IN THE

TREATMENT OF UNSERVED LNs, LAs and TVNs

Revenue Memorandum Circular No. 98-2010

Page 32: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

Unserved LNs, LAs, and TVNs (RMC 98-2010)

• Every effort shall be made to serve LNs, LAs, and TVNs

• ROs must obtain appropriate certifications from any two of the ff org./offices:– Barangay Office

– Municipal/City Gov’t. Business Permit/Licensing Office

– DTI

– SEC

– MERALCO

– PLDT

Page 33: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

Unserved LNs, LAs, and TVNs (RMC 98-2010)

• In the event that any two of the above offices certify that concerned TP does not appear in their records, the TP shall be given “Cannot be Located” (CBL) status in the records of the Bureau

• Names of TP shall be submitted to AITEID for publication– TP is given 15 days to communicate with the

Bureau

Page 34: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

Unserved LNs, LAs, and TVNs (RMC 98-2010)

• The concerned BIR office shall recommend the cancellation of registration and invoicing privileges

• The assessment for the tax due shall be made as follows:– In case of LNs, assess def. taxes based on

discrepancies per LN- In case of LAs/TVNs – assess def. tax based on best evidence

obtainable

*shall be posted in the BIR website

Page 35: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

Unserved LNs, LAs, and TVNs (RMC 98-2010)

• A list of TPs with CBL status whose registration and invoicing privileges have been recommended for cancellation shall be published in the BIR website and in 2 newspapers of general circulation– Purchases made from them shall not be allowed as

deduction for IT purposes– Input taxes from such TP shall be disallowed for VAT

purposes

*it shall not deter the BIR from pursuing legal remedies

Page 36: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

Electronic Filing and Payment System (eFPS)

Page 37: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

What is eFPS?

• eFPS stands for Electronic Filing and Payment System, and it refers to the system developed and maintained by the BIR for electronically filing tax returns, including attachments, if any, and paying taxes due thereon, specifically through the internet.

Page 38: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

What is e-Filing?

• e-Filing is the process of electronically filing returns including attachments, if any, specifically through the internet.

Page 39: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

What is e-Payment?

• e-Payment is the process of electronically paying a tax liability through the internet banking facilities of Authorized Agent Banks (AABs).

Page 40: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

What are its objectives?

• paperless tax filing • can pay their taxes online through the

convenience of an internet-banking

• taxpayers can file and pay for their taxes anytime, anywhere as long as he or she is using a computer with an internet connection.

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What are the benefits of the system?

• Convenient to use - it is quick and simple to use, as well as secure

• Interactive - information exchange is immediate and online

• Self-validating - errors are minimized • Fast - response or acknowledgment time is

quicker than manual filing

Page 42: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

What are the benefits of the system?• Readily available – it is available 24 / 7

including holidays• Secure - return and payment transactions are

more secure, as all data transmission is encrypted

• Cost effective - processing cost of returns and payments is minimized (e.g. receiving, pre-processing, encoding, error-handling and storage)

Page 43: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

Coverage

• Large Taxpayers• Volunteering Taxpayer• Top Twenty Thousand Companies• Top 5,000 Individual Taxpayers• Local Government Units• Bidder/s• Bank Borrower/s

Page 44: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

Coverage

• Stock Broker/s

• 10 Million Paid Up Capital

• CAS(Computerized Accounting System

• Volunteering Large & Non-Large Taxpayers registered with the Integrated Tax System and with e-mail account and internet access; and

• Volunteering BIR National Office employees

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REVENUE OFFICERS’ ACTIVITY REPORT

RMO 25-94

Page 46: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

RO’s Activity Report (RMO 25-94)

• Log Sheet must be properly accomplished and attached to docketName of Taxpayer :Period Covered of Audit:Letter of Authority No.:Date Issued

DATE ACTIVITYNO. OF HOURS

NAME AND DESIGNATION OF PERSON/S CONTACTED/TAP

ACCREDITATION NO.

Prepared by: Noted by:

REVENUE OFFICER'S ACTIVITY REPORT

Page 47: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

For more information

Visit our website at

www.bir.gov.ph

Page 48: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

You can download a copy of this presentation at:

www.susantusoy.weebly.com

Page 49: Orientation Seminar for Tax Agents and Practitioners Susan D. Tusoy, cpa, mps Asst. Chief, Assessment Division.

It's what you learn after you know it all that

counts.- John Wooden