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COOPERATIVES

:
Tax Compliance & Exemptions
CACODEC
Trece Martires
November 28, 2007

AIT

“Learning through Quality Training”

Why are Coops special?

Coops are special because
government wants to foster them as practical vehicles in promoting selfreliance and harnessing people towards attainment of economic development and justice.
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“Learning through Quality Training”

Obstacles along the way
• Ambiguous provisions of Revenue issuances affecting Coops; • Varying interpretations of COOP Code provisions vis-à-vis the Tax Code; • • Deficiency Tax Assessments issued by BIR against Coops; Lack of a unified stand among Coops on how certain contentious issues.
AIT

“Learning through Quality Training”

Objectives of seminar
• To review the tax exemption provisions of the Cooperative Code vis-à-vis the Tax Code and other BIR issuances; To clarify Coop problem areas and issues; and To review Coop compliance requirements.

• •

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“Learning through Quality Training”

Income Taxpayers Classification COOPs classified as:
1. Individuals receiving compensation income; 2. Business and professional income earners 2.1 individuals 2.2 corporations/associations 3. Passive Income Earners COOPs 4. Exempt Income Earners COOPs
Note: COOPs with taxable income are also classified under No. 2.
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“Learning through Quality Training”

Major groupings:

Business Taxpayers Classification COOPs classified as
Electric COOPs

1. VAT TAXPAYERS 1.1 12% VAT taxpayers 1.2 0% VAT taxpayers

2. NON-VAT TAXPAYERS Other COOPs 2.2 Percentage taxpayers 2.3 Exempt taxpayers (from VAT/%Tax)

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“Learning through Quality Training”

Presentation Outline 1) Exemptions of Coops 2) Taxes due from Coops 3) Taxability of Members. Employees. and Directors of Coops 4) Tax Compliance of Coops AIT “Learning through Quality Training” .

Section 109 (L). (M).(N) of the National Internal Revenue Code (amended by RA 9337) 3. Sections 133 and 234 of the Local Government Code of 1991 AIT “Learning through Quality Training” .LEGAL BASES OF EXEMPTIONS 1. Articles 61 and 62 of the Cooperative Code of the Philippines (RA 6938) 2.

INTRODUCTION TO TAXATION AIT “Learning through Quality Training” .

TAXING TO THE MAX? WHY? IS IT A MATTER OF NATIONAL SURVIVAL? AIT “Learning through Quality Training” .

Income of GOCCS Taxes Borrowings Revenues Debt Servicing Social services Administration INFRA Services Services AIT “Learning through Quality Training” .

EXISTING TAXES NATIONAL  Income tax  Estate tax  Donors tax  VAT  Other percentage tax  Excise tax  Documentary stamp tax AIT “Learning through Quality Training” .

LOCAL Business tax is a tax on trade or commercial activity regularly engaged in as a means of livelihood or with a view to profit Fee is a charge fixed by law or ordinance for the regulation or inspection of a business. AIT “Learning through Quality Training” .

AIT “Learning through Quality Training” . Realty tax is a direct tax on the ownership of lands and buildings and other improvements thereon not specifically exempted and is payable regardless of whether the property is used or not. rent or fees against persons or property.Charges refer to pecuniary liability.

WHO IMPOSES WHAT TAXES? Provincial Government  Transfer tax  Printing and publication  Sand. gravel and other quarry  Professional tax  Franchise fee  Amusement tax  Real property tax  Delivery truck tax AIT “Learning through Quality Training” .

Municipal  Fees  Community tax  Business tax  Charges AIT “Learning through Quality Training” .

non signs and outdoor advertisement fee  charges AIT “Learning through Quality Training” . signboard.Barangay  Barangay clearance fee  Billboards.

EXEMPTIONS OF COOPERATIVES AIT “Learning through Quality Training” .

TAX EXEMPTIONS OF COOPs Category: Transacting with Members only Exemption: seven (7) kinds of Internal Revenue Taxes Period of Exemption: Continuing (no 10-year limit) (RR 20-001 amending RMC 48-91) AIT “Learning through Quality Training” .

TAX EXEMPTIONS OF Coops Category: Transacting w/ members & non-members w/ P10M Reserves & < Exemptions: same as Coops dealing w/ members only Period of Exemption: same as Coops dealing members only (BIR Ruling ECCP-003-2006 dated March 30. 2006) (RR 20-001 amending RMC 48-91) AIT “Learning through Quality Training” .

2006) AIT “Learning through Quality Training” .TAX EXEMPTIONS of COOPs Category: Transacting w/ Members and nonmembers w/ over P10M Reserves Internal Revenue Taxes: Exempt on transactions with members and non-members within ten years. provided that at least 25% of the net income of the Coop is returned to the members. to be taxed on business with nonmembers (BIR Ruling ECCP 003-2006 dated March 30. Period of Tax Exemption: After 10 years.

00 AIT “Learning through Quality Training” . Excise tax under Title VI of the NIRC. 4. 5. VAT under Sec 109. 6. Registration fee of P500.Exemptions of COOPs (NIRC) Internal Revenue Taxes 1. 3. NIRC except Electric Coops . DST (the party who is not exempt pays). Income tax on income from operations. Donor’s tax to duly accredited charitable/ research/educational inst &reinvestment to socio-eco projects w/in the area of COOPs. 3% percentage tax under Sec 116 of NIRC. 7. 2.

6938. Real Property Tax on all real properties owned by duly registered cooperatives under RA 6938. Taxes.Exemptions of COOPs (LGC of 1991) 1. (Sec 133) 2. fees on Coops registered under Republic Act No. (Sec 234) CDA Memo Circular 93-005 BLGF Memo Circular 02-97 AIT “Learning through Quality Training” .

Section 109 (L) does not make any distinction between the two AIT “Learning through Quality Training” .Sales by Agricultural Coops Exempt from VAT under Section 109 (L) Conditions: 1. duly registered with CDA 2. in good standing with CDA Noted: Agri-food products exempt from VAT but agri nonfood is now vatable.

Importation of Agri Coops Exempted from VAT: • importation of direct inputs • importation of machineries and equipment. including spare parts to be used directly and exclusively in the production and/or processing of their produce (Section 109L of the NIRC) AIT “Learning through Quality Training” .

Gross Receipts of Credit/Multi-Purpose Coops Exempt from VAT under Section 109 (M) Conditions: 1. duly registered with CDA 2. in good standing with CDA Note: RA 9337 deleted the phrase “whose lending operation is limited to members”. Impact: Coops exempt on transactions even for non-members. AIT “Learning through Quality Training” .

duly registered with CDA 2. non-credit Coops Exempt from VAT under Section 109 (n) Conditions: 1. 2006) AIT “Learning through Quality Training” . in good standing with CDA 3.000. non-agri. (BIR Ruling DA-029-06 dated February 2.Sales by non-elec. share capital contribution of each member does not exceed P15.

Exemption from EWT Coops that are exempt from income tax are consequently exempt from Expanded Withholding Tax. 2006 “Learning through Quality Training” AIT . (BIR Ruling DA-029-06 dated February 2. they are not exempt from withholding and remitting the tax on their payment for goods and services that are subject to Expanded Withholding Tax. As Withholding Tax Agent however.

2006 ) AIT “Learning through Quality Training” .Exemption from VAT on Importation of machinery and Equipment Conditions for exemption • directly needed in operation of Coop’s primary purpose • complies with the requirements of DOF-CDA Circular 1-90 (BIR Ruling DA-029-06 dated Feb 2.

Exemption from DST on Member’s share certificate Coop member’s contribution. (BIR Ruling DA-591-2006 dated October 5. is not subject to DST imposed under Section 174 of the NIRC. 2006) AIT “Learning through Quality Training” . being entirely different in nature and in substance from corporate shares of stocks.

2006 AIT “Learning through Quality Training” .Gross Receipt of Electric Coops Income Tax : NEA-registered .Subject to 12 % (BIR Ruling DA-384-2005 dated September 7.Exempt w/in 30 years CDA-registered dealing w/ members – Exempt dealing w/ non-members – Exempt w/in 10 years on business with non-members Value-Added Tax : NEA and CDA registered . 2005) (BIR Ruling DA-108-2006 dated March 14.

TAXES DUE FROM COOPERATIVES AIT “Learning through Quality Training” .

3.5% FT on interest income on $ deposits CGT on real properties/shares of stocks DST on transactions COOPs dealing with non-members whose accumulated reserves and undivided net savings > P10M 5. VAT on purchases of goods and services “Learning through Quality Training” AIT . 20% FT on interest income on Peso deposits 7. 4. 2.COOPs regardless of classification shall be subject to: 1.

000 net gain (BIR Ruling ECCP-003-2006) AIT “Learning through Quality Training” .000 net gain 10% on the excess over P100. On sale of shares of stocks: 5% on first P100.Sale or exchanges of Real Property and Shares of stocks On sale of RP-capital assets: 6%CGT +1.5% DST on selling price or fair market value whichever is higher.

Business Activities of the Coops Other Not listed in the Articles of Cooperation. whether dealing with members or both members and non-members. AIT “Learning through Quality Training” . • Income of Coops not related to the main/ principal business. subject to all taxes under the Tax Code of 1997. • Applicable to all Coops.

The COOPs are exempt only on their own transactions (i. DA 029-06) AIT “Learning through Quality Training” .e.Purchase of goods and services of COOPs All COOPs are liable to pay VAT on their purchase of goods and services because said tax is an indirect tax which can be passed on or shifted to the buyer. not purchases) (BIR Ruling 008-01. sales.

Interest on bank deposits of COOPs All COOPs are liable to pay 20% FT on Peso deposits and 7. interest on bank deposits of Cooperative Employees’ Retirement Plan is exempt from FT.5% on Dollar deposits. (BIR Ruling 008-01.) However. 2006) AIT “Learning through Quality Training” . etc. DA 029-06. (BIR Ruling DA 259 dated April 12.

12% VAT on Electric COOPs All electric COOPs. 2005. AIT “Learning through Quality Training” . VAT exemption repealed by RA 9337 effective November 1. whether CDA or NEA-registered are liable to pay the 12% Value Added Tax.

Employees and Directors of COOPERATIVES AIT “Learning through Quality Training” .TAXABILITY of Members.

The exemption of the cooperatives does not extend to the individual members. 2006) AIT “Learning through Quality Training” . (BIR Ruling ECCP-003-2006 dated March 30.

2005) AIT “Learning through Quality Training” . dated March 9.Net Surplus distributed to members (Patronage Refunds) • Not Subject to Income Tax • Not subject to VAT • No need to declare in ITR (BIR Ruling DA 075-05.

2005) AIT “Learning through Quality Training” .Net Surplus Distributed to Members (Interest on member’s share capital) • Subject to Income Tax • Not Subject to Withholding Tax • Not subject to VAT • To be declared in Income Tax Return (BIR Ruling DA 075-05. dated March 9.

(BIR Ruling DA-591-2006 dated October 5. 2006) AIT “Learning through Quality Training” .Interest on deposits Considered as income subject to income tax. Include in other taxable income in the income tax return.

Dumaguete Cathedral Credit Coop vs CIR . CTA case no. The Tax Code of 1997 imposes the final withholding tax on interest from any currency bank deposit and yield or any other monetary benefit from deposit substitutes and from trust funds and “similar arrangements”. 2/6/07   The CA held that cooperatives are liable to withhold the 20% final withholding tax on interest income of savings and time deposits of its members. AIT “Learning through Quality Training” . CTA held that savings and time deposits made to cooperative fall under the phrase “similar arrangements” as provided for under the Tax Code. 6827.

Advances of Owner-members Considered as Payables. (BIR Ruling DA 029-2006. 2006) AIT “Learning through Quality Training” . Not subject to income tax. dated Feb 02. Not Income of the Owner-Members.

4) AIT “Learning through Quality Training” .Compensation Income Working for just one cooperative-employer with annual compensation income: • • • • Subject to income tax Subject to withholding tax Need not file income tax return Substituted filing applies • BIR Form 2316 serves as substituted return Provided income tax due = tax withheld (RR 2-98. Sec 2.83.

if SF) • Employee need to sign waiver for withholding if he wants to be under SF. (RR 2-1998 and RR 1-2006) AIT “Learning through Quality Training” .000 or less per month) or minimum wage.000 (P5.Compensation Income Annual compensation income of P60. whichever is higher: • Not Subject to withholding tax • Subject to income tax • Substituted filing (SF) does not apply (can be waived) • Need to file income tax return (need not.

In case of married individual where one spouse received compensation income exceeding P60. 2. regardless of amount: 1. Sec.Compensation Income Required to file.4) “Learning through Quality Training” . Deriving income from both compensation and business/profession 3. Deriving compensation from two or more employer 2.83. If income tax withheld is not equal tax due AIT (RR 2-98.000 5. Deriving compensation while spouse has income from business/profession 4.

4.00/employee per semester or P125/month. 2. Medical cash allowance to dependents of employees .P3.P750.Compensation Income De Minimis Benefits (Not taxable) 1. Rice subsidy .P10. Laundry allowance not exceeding P300/month. 5. Actual yearly medical benefits . Uniform and clothing allowance . Section 1) “Learning through Quality Training” .P1. 3.000/month or one sack of 50-kg rice/month worth P1.000/year. AIT (RR 10-2000.000.000/year.

books. Xmas/Major anniversary celebrations – P5. 9. fruits.000/year. 7. 8. or other similar items (for illness.not exceeding 10 days /year. marriage.000/year.). AIT “Learning through Quality Training” .Compensation Income De Minimis Benefits (Not taxable) 6. Flowers.25% of basic minimum wage. and 10. Daily meal allowance for overtime work . Employees achievement awards . etc.P10. Monetized unused vacation leave credits . birth of a baby.

13th month pay 14th month pay Mid-year bonus X’mas bonus Productivity incentives Loyalty award (RR 8-2000 dated August 21.000 and below 1. 2. 4. 5. 2000) AIT “Learning through Quality Training” . 6. 3.Compensation Income Not Taxable: aggregate of P30.

Director’s Fees If the director is an employee of the coop: considered as compensation income If the director is not an employee of the coop: treated as professional income subject to creditable withholding tax. AIT “Learning through Quality Training” .

EXPANDED SENIOR CITIZENS (SC) ACT (RR 4-2006 as amended by RR 1-2007) AIT “Learning through Quality Training” .

Gross compensation is within poverty level as determined by NEDA per year (P60.not subject to income tax AIT “Learning through Quality Training” .000 and below) .000)subject to income tax 2.Compensation income of a SC 1. Gross compensation above the poverty level as determined by NEDA per year (over P60.

000 and below) – not subject to income tax AIT “Learning through Quality Training” .000)subject to income tax 2.Business Income of a SC 1. Gross Business Income above the poverty level as determined by NEDA per year (over P60. Gross Business Income is within poverty level as determined by NEDA per year (P60.

Mixed Income of a SC Annual Taxable Income of a SC refers to the annual gross compensation. The same rule in the previous slides applies. AIT “Learning through Quality Training” . business and other income received by the SC during the taxable year from all sources as defined in Sec. 31 of NIRC of 1997.

File for tax exemption with the RDO where the SC resides.Submit his/her OSCA ID.Requirements for exemption of SC 1. AIT “Learning through Quality Training” . and 3. 2. File an annual information return.

The benefactor must register the SC as his dependent with the RDO where both reside. AIT “Learning through Quality Training” .Benefits of a benefactor of of a SC A taxpayer-benefactor of a SC is considered as Head of Family. provided that: 1. The SC must be living with & dependent upon his benefactor for his chief support. The SC’s income does not exceed poverty level. and 3. 2.

Benefit of having a SC-employe An employer of a SC is entitled to additional deductions from their gross income equal 15% of the total amount of the salaries and wages paid. AIT “Learning through Quality Training” . and 2. The employment shall be continuous for for a period of at least six (6) months. The annual taxable income of the SC does not exceed the poverty level set by NEDA. provided that: 1.

Senior Citizens Privileges (RR 1-2007) Deleted the TIN requirement under Sec 8(5) of RR 4-2006 in order that establishments may claim the sales discount as deductions from gross income AIT “Learning through Quality Training” .

clarifying that the basis of the VAT is the selling price net of the 20% discount. AIT “Learning through Quality Training” .Senior Citizens Privileges (RR 1-2007) Added Section 10 to RR 4-2006.

00 20.60 P 89.00 9.60 AIT “Learning through Quality Training” .Basis of Computation of VAT on sale to Senior Citizens Amount of sale (without VAT) Less: 20% sales discount Vatable sale Plus: 12% VAT (based on P80) Total amount to be paid by SC P100.00 P 80.

TAX COMPLIANCE REQUIREMENTS OF OF COOPERATIVES AIT “Learning through Quality Training” .

3. WITH CDA 2. WITH LGU WITH BIR AIT “Learning through Quality Training” .REGISTRATION OF COOPERATIVES 1.

When to register more than once? 1. Establishment of place of production 4. Engaging in different business activity AIT “Learning through Quality Training” . Establishment of a storage place 3. Establishment of a new branch 2.

The Coop’s head office. Sales Invoices and Official Receipts 5. branch or facility 2. Type of tax the Coop is required to pay 3. Books of accounts 4.What to register with BIR? 1. Register as a Withholding Tax Agent AIT “Learning through Quality Training” .

2. AIT “Learning through Quality Training” . The Coop will be subject to penalty for failure to register under RMO 9-2006. The Coop cannot print Invoices and official receipts and that will mean more penalties. The Coop’s request for CTE cannot be processed.Effect of failure to register with BIR 1. and 3.

Submit application for CTE to the Legal Division. B. Certified true copy of: a. Attach the ff documents to the letter: 1.CERTIFICATE OF TAX EXEMPTION Procedure in securing a CTE: A. RO through the RDO having jurisdiction over the principal place of business of the Coop. Original copy of Cert of Good Standing AIT “Learning through Quality Training” . Art of Cooperation and By Laws b. Cert of Registration with CDA 2.

Amount of accumulated reserve fund and undivided net savings. d. List of members and share contribution of each member. 4. c. Latest FS duly audited by an independent CPA AIT “Learning through Quality Training” . At least 25% of the NS is returned to members in the form of interest and/or patronage refund. Cert under oath by Chairperson/Manager a. Whether the Coop is dealing with members or w/ both members/non-members.CERTIFICATE OF TAX EXEMPTION 3. b.

date of approval of the Coop’s Registration Certificate. Note: With application filed – exemption applies Without application – ROs assess Coops (BIR Ruling ECCP-003-06 dated March 30. 1999. 2006) AIT “Learning through Quality Training” . It was ruled that effective date of tax exemption is from August 11. in 2005 it reapplied for exemption but never received communication from BIR.Effect of Coop’s failure to secure a CTE A Coop filed for request for CTE in 1999 but was not acted upon by the BIR.

CERTIFICATE OF Good Standing A very important document: *needed in securing CTE *requirement for VAT exemption AIT “Learning through Quality Training” .

2. Certification fee of Php200. Certification of no pending case with CDA. and 8. 5. 6. 4.CERTIFICATE OF Good Standing Requirements: 1. Certification under oath re SCA requirements. Application letter signed by chairman or reps. AR together with audited FS. 3. 7. Information sheet duly accomplished. Minutes of latest general assembly. Copy of Bond of accountable officer.00 Note: New COOPs are exempt from 1-6 AIT “Learning through Quality Training” .

Annual Information Return File Annual Information Return Not required to File Income tax Return Use Form 1702 version (Exempt portion) (BIR Ruling DA 029-2006 dated Feb 02. 2006) AIT “Learning through Quality Training” .

sources and disposition of income Attach Copy of the letter of exemption/ruling Attach Original Certificate of Good Standing. Art of Cooperation.Annual Information Return To be submitted on or before 15th day of the 4th month after EOY Attach Profit and Loss Statement/Balance Sheet Certificate that there has been no change in the ByLaws. AIT “Learning through Quality Training” . activities.

dated Feb 02.Books of Accounts and other Records Subject to audit periodically by BIR Revenue Officers (BIR Ruling DA 029-2006. 2006) AIT “Learning through Quality Training” .

Accreditation of Tax Practitioners AIT “Learning through Quality Training” .

financial statements. request for ruling. official correspondence and other statements) filed in behalf of a taxpayer.Accreditation of Tax Practitioners (RR 11-2006) requires that certain official statements (returns. protests. reports. be signed or certified to by BIR accredited persons. AIT “Learning through Quality Training” .

7 . AIT “Learning through Quality Training” .2007 Additional procedural and/or Documentary requirements in connection with the preparation and submission of financial statements accompanying the Tax Returns.REVENUE REGULATIONS NO.

IC and CDA.Contents and Format of Financial Statements to be Attached to the Annual Income Tax Return or Information Return The account titles to be used must be specific and not control accounts which must be completely enumerated in the financial statements must conform to the basic framework of the financial reporting standards promulgated by the Financial Reporting Standards Council (FRSC) of the Philippines which are the generally accepted accounting principles in the Philippines which include the Philippine Accounting Standards and the Philippine Financial Reporting Standards and the refinements introduced thereon in respect to the different industries as well as to the rules and requirements of regulatory agencies that have supervision over them such as SEC. BSP. AIT “Learning through Quality Training” .

the following: 1.4. Selling and Administrative Expenses 4. Cost of Sales/Services 3. 5 and 6 should be fully explained in the Notes to Financial Statements. Other Expenses (Note: Items 1. Other income 6. if any. items 2 and 3 should be supported by schedules) AIT “Learning through Quality Training” . Financial expenses.The Profit and Loss Statement shall show separately by segment with breakdown of the specific accounts. 5. Sales/Revenues 2.

Notes comprising a summary of significant accounting policies & other explanatory notes 6. Statement of Cash Flows 5. Balance sheet 2.COVERAGE: The Financial statements shall be composed of the following 1. Statement of Changes in Equity 4. Statement of Income 3. Schedules AIT “Learning through Quality Training” .

COOPs as Withholding Tax Agents What are to be withheld? 1) Withholding tax on compensation 2) Expanded Withholding tax on certain income payments 3) Final Withholding tax on certain passive income 4) Fringe Benefit Tax AIT “Learning through Quality Training” .

you remit to BIR: 1) Withholding tax on compensation (10th day after EOM using 1601C) 2) Expanded Withholding tax on certain income payments (10th day after EOM using 1601E) 3) Final Withholding tax on certain passive income (10th day after EOM using 1601F) 4) Fringe Benefit Tax (25th day after the end of the quarter) AIT “Learning through Quality Training” .Withholding Tax After withholding.

39-2007 Clarifying the income tax and VAT Treatment of agency fees/gross receipts of security agencies including the withholding of taxes due thereon. AIT “Learning through Quality Training” .Revenue Memorandum Circular No.

Withholding tax compliance Contract Price  The agency fee  The security guard’s salaries AIT “Learning through Quality Training” .

With respect to the portion of the Contract price representing the amount segregated and earmarked as salaries of the security guards. the security agency shall be the one responsible for the withholding of the tax on compensation income.Withholding tax compliance Insofar as the agency fee is concerned. AIT “Learning through Quality Training” . the Client is constituted as the withholding agent of the EWT.

on or before January 31 of the year following the year of withholding. a notarized certification indicating the names of the guards employed by the client. the amount of their salaries and the amount of tax withheld from each. AIT “Learning through Quality Training” . the Security Agency must furnish its client. their respective TINs.Withholding tax compliance However in order to comply with the requirement for deductibility. This certification together with the covering receipt must be kept on the file by the Client as substantiation for the claim of the expense.

attach: MAP – Monthly alpha list of payees COOP gives the payee Form 2307 (certificate of creditable income tax withheld) Payee-income earner attach the Form 2307 to the SAWT and the ITR. SAWT – Summary alpha list of withholding agents of income payments subjected to withholding tax AIT “Learning through Quality Training” .Withholding Tax For remittances of expanded withholding tax.

Withholding Tax How to file the MAP BY COOPs:/SAWT: 1) Hard copies – 10 or less payees/WAs 2) Floppy Diskette – over 10 payees/Was 3) E-filing – for taxpayers under EFPS SAWT is filed in the same manner ONLY BY COOPs that are subject to income tax in cases where certain income were subjected to Expanded Withholding Tax. AIT “Learning through Quality Training” .

COOP files the annual information return BIR Form 1604-CF. COOP withholds and remits correct income tax from employees 2. if qualified for substituted filing. AIT “Learning through Quality Training” . 3.COOP employees Need not file income tax return. Note: 1. COOP issues BIR Form 2316 to employee as the substituted return.

employee receives income from just one employer 3.COOP employees Conditions for substituted filing: 1. the employee’s spouse also complies with the above AIT “Learning through Quality Training” . employee receives compensation income. the amount tax withheld equals tax due 4. regardless of amount during the year 2.

RMO 19-2007 Consolidated Revised Schedules of Compromise penalties for violations of the NIRC AIT “Learning through Quality Training” .

Common Violations of Cooperatives  Failure to Register Compromise is P 2.000 to 20. AIT “Learning through Quality Training” .000 depending upon the location of the cooperative.

000 AIT “Learning through Quality Training” . 0605) No Certificate of Registration Displayed Failure to display the poster “Ask for BIR receipt” or “Notice to the public to demand receipts/invoice” Compromise for each violation of the above is P 1.Common Violations of Cooperatives    Failure to pay and display the annual registration fee (BIR Form No.

000 based on the annual gross sales.Common Violations of Cooperatives  Failure to keep/preserve records required by law or regulations Compromise is P 200 to P 50. earnings or receipt AIT “Learning through Quality Training” .

P 2. receipts or earnings. file/submit any return or supply correct information at the time or times required by law or regulation. AIT “Learning through Quality Training” .Common Violations of Cooperatives  Failure to make.000 based on gross sales.000 to P 25.

Common Violations of Cooperatives  Failure to withhold or remit withheld taxes at the time or times required by law or regulations P 200 to P 25.000 based on the amount of tax not withheld or remitted AIT “Learning through Quality Training” .

Common Violations of Cooperatives  Failure to have books of accounts audited and have the financial statements attached to the income tax return certified by an independent CPA duly accredited by the BIR. AIT “Learning through Quality Training” .000 based on gross sales. receipts or earnings.000 to P 25. P 2.

Updates: REPUBLIC ACT NO. 9480 AN ACT ENHANCING REVENUE ADMINISTRATION AND COLLECTION GRANTING AN AMNESTY ON ALL UNPAID INTERNAL REVENUE TAXES IMPOSED BY THE NATIONAL GOVERNMENT FOR TAXABLE YEAR 2005 AND PRIOR YEARS AIT “Learning through Quality Training” .

29-07 (August 15. 2007) Rules and Regulations to Implement Republic Act No.Department Order No. 9480 AIT “Learning through Quality Training” .

Who may Avail of Tax Amnesty      Individuals. Cooperatives and tax exempt entities that have become taxable as of December 31. Estates and trusts. 2005. whether resident or nonresident citizens. Corporations. Other juridical entities including partnerships AIT “Learning through Quality Training” .

Exceptions:    Withholding agents with respect to their withholding tax liabilities Those with pending cases falling under the jurisdiction of the PCGG Those with pending cases involving unexplained or unlawfully acquired wealth revenue or income under the Anti Graft and Corrupt Practices Act AIT “Learning through Quality Training” .

Exceptions…con’t

Those with pending cases filed in court involving violation of the Anti-Money Laundering Law; Those with pending criminal cases filed in court or in the Department of Justice for tax evasion and other criminal offenses under Chapter II of Title X of the national Internal Revenue Code of 1997, as amended

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Exceptions…con’t

Those with pending criminal cases filed in court for felonies of frauds, illegal exactions and transactions, and malversation of public funds and property under Chapters III and IV of Title of the Revised Penal Code; and Tax cases subject of final and executory judgment by courts.

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“Learning through Quality Training”

COMPLIANCE TESTING

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“Learning through Quality Training”

GAME K N B? Duly registered with CDA? AIT “Learning through Quality Training” .CAVITE.

DEAL OR NO DEAL ? Certificate of Good Standing AIT “Learning through Quality Training” .

R U IN OR OUT? Registration with BIR • TIN • Registration Certificate • Books of Accounts • Commercial Invoices • Withholding taxes • Annual information form (1702 AIF) • Posting requirements AIT “Learning through Quality Training” .

WANNA PUSH YOUR LUCK? Certificate of Tax Exemption AIT “Learning through Quality Training” .

com AIT “Learning through Quality Training” .End of Presentation Thank you!!! Johnny T. Agustin 077-781-2359 0919-3806-408 agustincpa@yahoo.