11/29/2022

Senen Quizon
Tax Principal Scan the QR code to save
Deloitte Philippines
Tel: +63 2 8857 1569
Senen’s details to your
contacts
www.linkedin.com/in/senen-quizon-
82378384/
smquizon@deloitte.com

Recent significant issuances from DOF and BIR

TMAP, 29 November 2022

© 2022 Navarro Amper & Co. 1

Member firms and DTTL: Insert appropriate copyright Presentation title 2

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Agenda
1. Developments on Work From Home
(WFH) and VAT zero rating privilege of
Registered Business Enterprises (RBEs)
- Transfer of registration to BOI
- Computation of WFH penalty
- Entitlement to VAT zero-rating of
RBEs
2. Implementation of Electronic Invoicing
System (EIS)
3. Developments on tax assessment
4. Other tax developments
- Validity period of receipts/invoices
- Issuance of Notice to Issue
Receipts/Invoices (NIRI)
- Tax treatment of equity-based
compensation
- Mutual Agreement Procedures

© 2021 Navarro Amper & Co. CREATE in motion: 3

The Philippines’ path to accelerated economic recovery

Transfer of Information Technology-Business

Process Management (IT-BPM) sector RBEs to BOI
(FIRB Resolution No. 26-22, DTI MC 22-19 , PEZA MC 2022-070,
RMC Nos. 136 and 142-2022)

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Work from home (WFH) arrangement

Transfer of registration of IT-BPM RBEs to BOI

Extends the 70%/30% WFH arrangement from 13 September to 31 December

2022 and allowing the transfer of registration of existing RBEs in the IT-BPM sector
FIRB Resolution No.
to BOI until 31 December 2022.
026-22

Prescribes the guidelines and rules and procedures on the registration of RBEs in
the IT-BPM Sector with BOI to allow 100% work from home
DTI Memorandum
Circular No. 22-19

Provides additional guidelines on the transfer of registration of PEZA-registered

business entities (RBEs) in the IT-BPM to the Board of Investments (BOI). Sets 16
PEZA Memorandum December 2022 as deadline on the submission of application to PEZA of request
Circular No. 2022-70 for transfer to BOI.

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Transfer of registration from PEZA to BOI

Step-by-step actions
Secure the signed assessment
bill from BOI Infrastructure and BOI COR shall contain
Services Industries Service. the TIN, PSIC, expiration
Step 1 Registration fee is P2,250/ per of tax incentives of RBE
Submit application Step 2 project
form including
attachments (scanned PEZA to evaluate
Step 5
copy of COR and application and Step 4
once approved, (Post registration
registration/ Step 3
PEZA to furnish the requirement)
supplemental BOI to issue
agreement on or RBE with its Certificate of
RBE to pay the Submit list of all
before 16 December endorsement to BOI Registration (COR).
applicable fee to equipment and
through email at through email RBE should
BOI. Date in the other assets, and
itbpm.transfer@peza.gov.ph furnish PEZA of
Official Receipt = number of
BOI COR for
date of effectivity of annotation in employees under
registration with PEZA COR WFH (Annex 2)
BOI within 30 days
from issuance of
BOI COR

. PEZA to email BOI forwarding

PEZA to check compliance of RBE with its
reportorial requirement to determine whether its
compliant with the terms and conditions of its
registration and in good standing
the list of endorsed project of
RBE, request to register,
scanned copy of COR and RA,
and PEZA endorsement letter

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Request for transfer of registration to BOI

Documentary requirements

1. Accomplished Application Form (can be

downloaded in the PEZA website – Resources –
Downloads –Request to Register with BOI)

- Indicate applicable PSIC

- Application should be signed by the highest
official of RBE

2. Scanned copy of Certificate of Registration,

Registration Agreement, including Supplemental
Agreements
3. Notice of SCO approval /documents to verify
entitlement to incentives and inclusive periods
4. Copy of BIR Form 2303 for the TIN

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Transfer of IT-BPM RBEs to BOI

Current status (as of 22 November 2022)

o 1,502 IT BPM PEZA RBEs

o 200 + filed their application with PEZA
o 164 processed and issued certificate by the BOI

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Transfer of registration of IT-BPM RBEs to BOI

Impact to transferees IT-BPM RBEs and those retaining PEZA registration

For IT-BPM RBEs transferring to BOI What if the IT-BPM RBEs remains under PEZA?
1. IT-BPM RBEs transferring to BOI may implement 100% WFH 1. IT-BPM RBEs may only implement 70%-30% WFH until 31
without penalty. December 2022. No assurance that 70%-30% will be further
extended.
2. Transfer to BOI will not affect the entitlement of PEZA IT-
BPM entities to their existing fiscal and non-fiscal incentives. 2. WFH violation penalty may go beyond income tax penalty and
Both fiscal and non-fiscal will be subject to sunset provision may affect other tax and non-fiscal incentives in case of strict
per CREATE Law. implementation of penalty provision of CREATE Law.
Fiscal incentives include those under National Internal
Revenue Code and other laws. Non-fiscal incentives include
PEZA visa, automated importation, issuance of building
permits, etc.
3. PEZA shall continue to administer the incentives of RBEs.
PEZA to continue issue Certificate of Entitlement to Tax
Incentives (CETI), VAT zero-rating certificate, letters of
authority, and RBE should continue to submit reportorial
requirements to PEZA.

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WFH Penalty Computation

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WFH arrangement and penalty

PEZA MCs, BIR RMCs and FIRB Resolutions

70%/30%
100% 90%/10%
(01 April 2022 – 12 September 2022
WFH 20 March – 31 July 2020 (01 August 2020 – 31 March 2022)
(13 September 2022 – 31 December

WFH up to 90% of total revenues under PEZA MC 2020-040 and WFH up to 70% of total workforce from 01 April to 12
100% WFH under PEZA MC 2020-11 September 2022 under FIRB Resolution No. 17-22
2020-049 from 01 August 2020 up to 12 September 2021

WFH up to 90% of total workforce under FIRB Resolution No. 19- WFH up to 70% of total workforce from 13 September 2022
21 and PEZA MC 2021-049 from 13 September 2021 to 31 to 31 December 2022 under FIRB Resolution No. 2022-70
March 2022

WFH Suspension of IT incentive Suspension of fiscal and non-fiscal

Penalty (13 Sept 2021 – 31 March 2022 incentives (01 April – 12 Sept. 2022
Both RMC 23-and 39-2022 impose suspension of income FIRB Resolution 17-22 and PEZA MC 18-2022 imposes penalty
tax incentives for violating WFH under FIRB Resolution of suspension of fiscal and non-fiscal incentives on WFH
Nos. 19 and 23-2021 for month/s of non-compliance. violations

Under RMC 23- 2022, penalty should be paid by using BIR
Form 1702X for those with no existing transaction subject
to regular income tax while BIR Form 0605 for those with
existing transactions subject to regular income tax.
RMC 39-2022 – Use only BIR Form 0605 and pay penalty
within 30 days from due date for payment of income tax.
Under RMC 120-2022, penalty is suspension of income tax
incentives on month/s of non-compliance. RBE violating WFH
shall pay penalty based on regular income tax on or before due
date for filing and payment of quarterly income tax return,
subject to adjustment upon filing of annual income tax return. .

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WFH violations from 01 April to 12 September 2022 under FIRB Res. 017-22
Manner of computation and payment (RMC 120-2022)

SAMPLE COMPUTATION: Assuming RBE committed SCENARIO 1. RBE is under Income Tax Holiday (No
violation for the month of April 2022. income tax paid in the first two quarters)

Sales (21,000,000/6) 3,500,000

1st Quarter 2nd Quarter Total
Cost of Sales (13,200,000/6) (2,200,000)
Sales 9,000,000 12,000,000 21,000,000
Gross Income 1,300,000
Cost of Sales 6,000,000 7,200,000 13,200,000
Less: Deductions (4,500,000/6)
Gross 3,000,000 4,800,000 7,800,000
Income Taxable income for the month 550,000

Allowable 2,100,000 2,400,000 4,500,000 Tax Rate 25%

Deductions
Income Tax (Penalty) Due 137,500
Net Income 900,000 2,400,00 3,300,000
Quarterly Income Tax Paid -

Income Tax Penalty (Payable) 137,500

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WFH violations from 01 April to 12 September under FIRB Resolution No. 017-22
Manner of computation and payment (RMC 120-2022)

Scenario 2 – RBE is under 5% gross income tax. The Quarterly Income Tax Return shall be filed “as is” as shown below:

1st Quarter 2nd Quarter Total 1st QITR 2nd QITR

Gross Sales 9,000,000.00 P12,000,000.00

Sales 9,000,000 12,000,000 21,000,000 Less: Cost of Sales (6,000,000.00) (7,200,000.00)
Gross Income 3,000,000.00 4,800,000.00
Cost of Sales 6,000,000 7,200,000 13,200,000 Less: Deductions
Taxable Income 3,000,000.00 4,800,000.00
Add: Taxable Income
Gross 3,000,000 4,800,000 7,800,000 from previous quarter
Income
Total Taxable Income 3,000,000.00 3,000,000.00
Due 5% 5%
Allowable 2,100,000 2,400,000 4,500,000 Tax Rate
Deductions
Income Tax Due 150,000.00 390,000.00
Tax payment/s for the (150,000.00)
Net Income 900,000 2,400,00 3,300,000 previous quarter
Income tax payable 150,000.00 240,000.00

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WFH violations under FIRB Resolution No. 017-22

Manner of computation and payment (RMC 120-2022)

SAMPLE COMPUTATION UNDER SCENARIO 2: Assuming RBE is under 5% GIT committed violation for the month of April 2022.

1st Quarter 2nd Quarter Total Sales (21,000,000.00) 3,500,000.00

Cost of Sales (13,200,000/6) (2,200,000.00)

Sales 9,000,000 12,000,000 21,000,000

Gross Income 1,300,000.00
Less: Deductions (4,500,000/6) (750,000.00)
Cost of Sales 6,000,000 7,200,000 13,200,000

Taxable Income for the month 550,000.00

Gross 3,000,000 4,800,000 7,800,000 Tax Rate 25%
Income
Income Tax (Penalty) Due 137,500.00
Allowable 2,100,000 2,400,000 4,500,000 Quarterly Income Tax Paid (65,000.00)
Deductions (390,000/6)

Net Income 900,000 2,400,00 3,300,000 Income Tax (Penalty) payable 72,500.00

The income tax paid for the current quarter to be deducted from the income tax due to the
penalty shall be divided proportionally to the number of months with violation.

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WFH Penalty Computation

Reminders on payment of penalty using BIR Form 0605

1. The penalty shall be paid using BIR Form 0605 – Choose ”Others”, under “Voluntary Payment” and indicate the phrase
“Penalty Pursuant to FIRB Resolution No. 17-22). Tax type is “IT” and ATC is “MC 200”.
2. Penalty should be computed, and schedule of computation should be attached to BIR Form 0605.

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WFH Penalty Computation

Manner of computation for last quarter and transition rules (RMC 120-2022)

SAMPLE COMPUTATION UNDER RMC 39-2022: Assuming RBE

o If the violation happened during the last quarter of the fiscal year, the committed violation for the months of September, October,
penalty shall be computed based on the manner prescribed under November and December 2021
RMC No. 39-2022. RBE under ITH RBE under 5% GIT
- Under RMC 39-2022, the penalty should be paid 30 days after the Annual Net taxable 12,000,000.00 12,000,000
due date prescribed for payment of income tax. Income (NTI)
o For Fiscal quarter with months subject to penalty that have already Average monthly NTI 1,000,000 1,000,000
ended and with returns filed, RBE shall file and/or pay the penalty
within 10 days after issuance of the Circular (18 August 2022), that is, Multiply by number of X4 X4
29 August 2022 . Administrative penalty for late payment shall apply. months with violation
Taxable Income 4,000,000 4,000,000
Subject to regular X 25% X 25%
income tax
Multiply by regular 1,000,000 1,000,000
corporate income tax
rate
Less: Payments made 0.00 500,000 **
per AITR
Income tax still due 1,000,000 500,000
and payable

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Developments on VAT zero rating

of RBEs
(Revenue Memorandum Circular 137-2022)

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Entitlement to VAT zero rating of RBEs

CREATE IRR, RMC Nos 24, 36, 38 and PEZA MC 2022-011

CONDITIONS FOR ENTITLEMENT TO VAT ZERO RATING ON LOCAL PURCHASES

1. RBE should be a registered export enterprise (REE)
2. Local purchase of REE should be direct and exclusively used for the
registered project or activity and without which activity cannot be carried
out
3. REE should apply and submit to local suppliers all required documents and
supplier to secure from BIR VAT zero rating certificate

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BIR documentary requirements

RMC 24-2022

Registered Export Enterprise Local Suppliers

BIR
Prior to transaction, submit to 1. Application Form for VAT Zero Rate
local suppliers the following: 2. BIR Certificate of Registration (BIR Non- Large Taxpayers -
Form 2303) Audit Information, Tax
1. BIR Certificate of Registration 3. PEZA Certificate of Registration Exemption and
(BIR Form 2303) 4. PEZA VAT Zero-Rating Certificate Incentives Division
2. PEZA Certificate of Registration (PEZA-ERD Form No. 97-01) (AITEID)
3. PEZA VAT Zero-Rating 5. Prescribed Sworn Declaration; and
Certificate (PEZA-ERD Form 6. Other documents such as duly certified
97-01) copies of purchase order, job order or
4. Prescribed Sworn declaration Large Taxpayers -
service agreement, sales invoice
stating that the goods and/or LTAID 1 and 2 and
and/or official receipts, delivery
services being purchased will receipts, or similar documents to prove Large Taxpayers (LTDO)
be used directly and existence and legitimacy of
exclusively in the registered transaction.
project or activity.

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VAT treatment of HMO plans acquired by REEs

RMC 137-2022 (14 October 2022)

 Cost items under “other expenditures” considered as direct and exclusively used in the registered activity is not exclusive.
 HMOs acquired by Registered Export Enterprises for employees directly involved in the operations of registered project or
activity for health maintenance is considered direct and entitled to 0% VAT.
X HMO plans for employee’s dependents and for employees not directly involved in the operations of the registered projects
or activities are not entitled to 0% VAT.
 Submit HMO plan to suppliers as part of documents to be submitted to BIR.

HMO Plan
Name of REE: _____________________
TIN: _____________________________ Account Type: ____________________
Address: _________________________ Account Code: ____________________

Policy Name of Employee Department Position/ Transaction Period Contribution Contribution Total
No. where Job Type Covered allotted to allotted to
employee is Description employee dependents
First Middle Last Extension From To
assigned
Name Name Name

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VAT zero rating application procedures under RMO 07-2006

Renewal of VAT zero rating certificate

REMINDER TO APPLY FOR RENEWAL FOR BIR VAT ZERO-RATING FOR 2023

Section II.9 RMO 07-2006

The approved application shall be valid until 31 December of the year of application and renewable
every year thereafter. The application for renewal shall be filed or before the last working day of
the December of each year. For applications filed on or after the first working day of January,
effectivity date shall be reckoned on the date of its actual receipt.

NOTE: Audit Information, Tax Exemption & Incentives Division (AITEID) – Not yet accepting
applications for 2023 as of 25 November 2022.

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Implementation of Electronic
Invoicing System (EIS)
(Revenue Regulations No. 08 and 09-2022)

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Philippine electronic invoicing/receipting system EIS

Features and requirements

The Electronic Invoicing or Receipting System (EIS) is a system which requires taxpayers to issue
electronic receipts or sales or commercial invoices, in lieu of manual receipts or sales or commercial
invoices, and transmit/report sales data to the BIR electronically.

The issuance of electronic invoice is mandated under Section 237 while the transmittal of sales data is
required under Section 237 (A) of the Tax Code, as amended by TRAIN Law (RA 10963, effective 01
January 2018) .

Issue e-invoice/
e- receipt

CAS/
CRM-POS/ BIR Web facility
(Seller)
Buyer
Middleware
(e-invoice API)

Sales transmission
BIR

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Policy and guidelines on use of EIS

Revenue Regulations No. 08-2022 (30 June 2022; effective 16 July 2022)

Taxpayers required to
EIS requirements Process requirements Transmission Policies
use EIS

Electronic Invoicing/Receipting System (EIS)

Issuance of e-receipts/invoices Sales reporting shall be done

to customers/buyers
Exporters
Registration of CAS generating
Taxpayers engaged in e- e-receipts /e-invoices and/ or
commerce CRM/POS & certification of
sales data transmission system
Taxpayers under Large
Taxpayer Service Transmission of sales data
using Sales Data Transmission
System into EIS of the BIR
(excludes taxpayers in e-
commerce business)
Development of Sales Data
Transmission System based
on Standard Application
Programming Interface (API)
guidelines
Enrolment of Sales Data
Transmission System. BIR to
issue EIS certification (EIS
CERT Portal))
Submission of application
for issuance of Permit to
Transmit (PTT) to allowance
transmission of sales data
immediately on the day
following the PTT issuance
Transmission shall be done
real time or near real time
(should be done within 3
calendar days from date of
transaction
Scanned copy not required to
be transmitted to EIS
Encrypted sales data shall be
in JSON File Format
Penalty shall apply for delay
or late transmission to EIS

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Other EIS policies and guidelines

Revenue Regulations 08 and 09-2022

o Taxpayers using EIS shall not be required to submit Summary List of Sales.
Submission of Summary List of Purchases and Importations shall still be
required

o Taxpayers duly-authorized to use the EIS (through web-based format or API)

shall not be required to submit printed copies of invoices or receipts for their
sales.
o Sales and purchases data generated and verified through EIS, in lieu of hard
copies, are admissible subject to compliance with information/data
requirements. Purchases data validated in the EIS shall be allowed for
purposes of claiming input VAT and claiming deductible expenses for income
tax purposes.
o Original form or digital copies must be retained pursuant to existing
regulations, and these should be made available upon demand for verification
and validation of sales and purchases data generated through EIS or submitted
electronic forms of invoices and receipts.

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Philippine experience with electronic invoicing implementation

Experience with the 100 large taxpayers: The first wave

o 46 out of 100 large taxpayers have started transmitting sales data

46%
(as of 24 November 2022)
o 40.6 million e-invoices/receipts/sales data transmitted to EIS as of
24 November 2022
o Deferred roll out allowed but sworn undertaking when to submit
sales data required

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Experience with first 100 large taxpayers

Reasons for delay in implementation

Incomplete CAS System Development Issues

Insufficient time Testing Development Issues

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Philippine BIR electronic invoicing/receipting system (EIS)

What is next after the first 100 large taxpayers

SAMPLE BIR LETTER TO NEXT IDENTIFIED LT TAXPAYERS

On to the next phase of pilot implementation
o Target for pilot implementation: Large taxpayers
o BIR has sent invitation letters to next batch of large taxpayers (around 3,000)
Issuance of circular (RMC)
o Issue clarification on the deadline, implementation and coverage of EIS.
15 August 2022
Dear Valued Taxpayer.
Greetings! In line with our mandate from President Ferdinand
Marcos, Jr. to help our country’s economy recover from devastating
effect of the pandemic, and pursuant to BIR Commissioner Lilia
Catris Guillermo’s vision of a modern, efficient and digitalized system
of tax collection for taxpayers’ ease and convenience, we are
honored to announce the implementation of Revenue Regulations
No. 08-2022
xx x x x x xxx

In this regard, may we invite your company to start complying with

the electronic/receipting and sales reporting as mandated by the
NIRC, as amended by the TRAIN Act.

We welcome all questions you may have. To assist you, Ms. Ma.
Rosario O. Puno, Chief, Excise LT Regulatory Division is available to
discuss the details and mechanics of RR 08-2022.

Let’s work together to harness technology to power-up our

economic recovery and build a brighter future for all Filipinos.

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Philippine BIR electronic invoicing/receipting system (EIS)

What is next after the first 100 large taxpayers

FOLLOW UP BIR LETTER

Dear Valued Taxpayer.

Relative to the recently conducted EIS Webinar last September 14, Principal and Supplementary Estimated
2022, may we know your position if your company is willing to be Receipts and Invoices Number/Volume issued
part of the EIS pilot implementation. If affirmative, kindly submit a for Year 2019
Letter of Intent addressed to the Commissioner of Internal Revenue 1 Official Receipts
stating your commitment so that we can organize/coordinate a
meeting on the next steps of action to be taken. For your 2 Sales Invoice
letter/request, please send to einvoicing@bir.gov.ph, and include the
3 Debit Memo/Note
following in your email thread.
4 Credit Memo/Note
Likewise, we would like to request for information on the estimated
number/volume of the following principal and supplementary 5 Statement of Account/Billing
Statement
receipts and/or invoices issued by your Company for the taxable year
2019 to determine the estimated volume of transactions.

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Alternative mode of issuance of electronic invoices and receipts

EIS taxpayer portal

EIS CERT Portal

o EIS Taxpayer Portal – facility that enables taxpayers to
issue electronic invoices and electronic receipts to
clients/ customers and store the required sales data.
o BIR has not identified which among the taxpayers may
use EIS Taxpayer Portal in issuing electronic
invoice/receipts.
o Portal can be used to inquire on issued/transmitted e-
Invoice/receipts sales data including
corrections/adjustments made, search for the e-
receipts/e-invoices information by entering search
parameters, such as type of transaction, period,
customer, etc.
o Downloading of files for taxpayers to check the details of
e-receipts/e-invoices.
Facility to transmit sales data and request for
certification (request for EIS Permit to Transmit
or PTT and request for using the sandbox and
API testing).
Portal also provides the API Guide, development
guide for sending invoices and querying EIS, API
processing result, and samples that can users
can use as reference for actual system
development.
EIS Portal for Revenue Officers
Facility which revenue officers can use to
secure sales data, will be used for checking tax
compliance and assist them in tax assessment.

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Development on Tax Assessments

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Clarification on the service of letters of assessment

Revenue Memorandum Circular No. 82-2022 (30 June 2022)

Under Revenue Audit Memorandum Order (RAMO) No. 1-2000

Letter of authority must be served to the taxpayer within 30 days from its date of issue, otherwise, it becomes null and void
unless revalidated.
Revenue Memorandum Circular (RMC) 82-2020
o Clarifies that RAMO 1-2000 has already been amended by RAMO 1-2020
o Under RAMO 1-2020, no timeline for the service of letters of authority, hence even if the LOA is served beyond the 30-day
period, it shall remain valid and enforceable .
o RAMO 1-2020 requires that the audit process must be completed within a period of 180 days for Revenue District Office
(RDO) cases, and 240 days for Large Taxpayer cases from date of issuance. Non-observance of 180/240 days timeline is
considered a gross neglect of duty which will subject the revenue officer to administrative sanction.

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Lifting of suspension on field operations

RMC 115, 121, 127, and 148 -2022

RMC 77 -2022 RMC 115-2022 RMC 121-2022 RMC 127-2022 RMC 148-2022
(Effective 30 May 2022) (Effective 28 July 2022) (Issued on 22 August 2022) (Effective 07 September 2022) (Effective 22 November 2022)
Issued guidelines on lifting of
Suspends field suspension of filed audit
operations, field audit operations which will be on a per
and any form of business investigating office subject to Lifts suspension of all field
vitiation in execution of approval of the Commissioner of audit, field operations or any
Letters of authority Internal Revenue of the form of business visitations in
(LOAs) Memorandum of Request execution of LOAs or MOs.

Lifts suspension on issuance of

Suspends field Lifts suspension of Lifts suspension on all field
new LOAs and MOs.
operations, field audit issuance of MOs on the audit and operations covered by
and any form of business conduct of Tax MOs on conduct of
vitiation in execution of Compliance Verification enforcement activities such as
Mission Orders (MOs) Drive (TCVD) . ocular inspection, surveillance
activities, stock-taking activities
and implementation of
administrative sanction of
suspension and temporary
closure of business.

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Other tax developments

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Removal of validity period of

official receipts and invoices
(RR 06-2022 and RMC 123-2022)

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Validity period of receipts/invoices

RR 06-2022 as clarified by RMC 123-2022

SALIENT FEATURES:

Removes the five-year validity period on receipts/invoices:

“THIS INVOICE/RECEIPT SHALL BE VALID FOR FIVE YEARS FROM THE

DATE OF PERMIT TO USE/AUTHORITY TO PRINT”, and “VALID UNTIL
(MM/DD/YY) on manual receipts.

Coverage:

All manual receipts and invoices with authority to print (ATP), and
receipts and invoices generated by computerized accounting systems,
cash register machines (CRM) and point-of-sale (POS) machines.

Taxpayers who will apply for ATP for manual invoices and receipts,
permit to use (PTU) for computerized accounting system (CAS) and
components, and CRM/POS shall no longer be required to reflect the
validity period of the PTU and/or system generated receipts/invoices.

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Removal of validity period of receipts/invoices

Transition rules

Manually issued receipts/invoices Receipts/invoices generated from Cash

Register Machines (CRMs), Point-of-Sale
The validity date printed on the unused receipts or invoices (principal
or supplementary) shall be disregarded and may be used until fully
(POS) Machines, Computerized Accounting
exhausted. system (CAS) and other machines

Date of ATP
Date of Issue
On or before 16 July
2017
17 July 2017 onwards
Unused Receipts/Invoices All system-generated receipts with the phrase “This invoice
as of Expiry Date shall be valid for five (5) years from the date of permit to use”
and “valid until” on previously approved system/software with
“Valid until” as Can they still be issued?
indicated in PTU/AC shall be disregarded.
ATP/Receipts/
Invoices The system or software generating the receipts/invoices should
On or before 15 No be reconfigured until 31 December 2022.
July 2022
No need for BIR written notification since modification is
16 July 2022 Yes
onwards considered minor enhancement.

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Removal of 5-year validity period on receipts

Transitory provisions - Unused receipts/invoices

IMPACT AND ACTION POINTS

As issuer of receipts/invoices
1. Unused receipts with validity period on or before 15 July 2022 4. Taxpayers using CRM, POS and CAS should reconfigure their
should no longer be issued, and surrendered together with system to omit the validity period on its receipts/invoices on or
inventory listing to the RDO of head office or branch for before 31 December 2022.
destruction on or before the 10th day after the validity of
expired receipts/invoices.
Penalty: 20,000 for the first offense, and P50,000 for second
offense.
2. Unused/expired receipts/invoices with ATP expiring on or
after 16 July 2022 and onwards may still be issued until fully
exhausted.
3. Taxpayers using manual receipts should make an inventory of
their existing unused receipts/invoices to estimate when the
need to request for a new ATP should be made.
ATP should be applied not later than 60 days prior to
expiration.

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Removal of 5-year validity period on receipts

Transitory provisions - Unused receipts/invoices

As recipient of receipts/invoices
1. If invoice/receipt received by taxpayer has validity period on or
before 15 July 2022, this should be returned to suppliers and ask
for reissuance of valid receipt/invoice.
2. Taxpayer may use manually-issued Invoices/receipts with ATP
expiring on or after 16 July 2022 to substantiate claims for
expense deductions and input tax.
3. Receipts/invoices from CRM, POS, CAS and other machines with
expired ATP may be used as support for claiming expense
deduction and input tax. However, receipts/invoices covering
transactions starting 01 January 2023 should no longer contain
validity period.

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Issuance of Notice to Issue

Receipts/Invoices (NIRI)
(Revenue Memorandum Order 43-2022)

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Notice to Issue Receipts/Invoices (NIRI)

RMO 43-2022 (29 September 2022)

Ask for Receipt Notice to Issue

(valid until 30 June 2023) Receipts/Invoices (NIRI)

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Replacement of “Ask for Receipt” with NIRI

Staggered issuance of NIRI

Staggered issuance of NIRI by RDOs/Large Taxpayer Division based on 9-digit TIN

TIN Ending Month

1 and 2 Beginning 03 October 2022

3 and 4 Beginning 02 November 2022

5 and 6 Beginning 01 December 2022

7 and 8 Beginning 02 January 2023

9 and 0 Beginning 01 February 2023

Conditions for the release of the NIRI:

a. Surrender the old version;

b. Submit a board resolution with indication of purpose and name of the authorized
representative claiming the NIRI; and
c. Information update (particularly, the company email address) – Can be done
using BIR Form No. 1905 but should be through the BIR’s Online Registration and
Update System (ORUS) once it becomes available to taxpayers.

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Mutual Agreement Procedure (MAS)

Guidelines
(Revenue Regulations 10-2022)
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Guidelines and Procedures for requesting Mutual Agreement Procedure (MAP)

Revenue Regulations No. 10-2022 (04 July 2022)

Mutual Agreement Procedure (MAP) PROCEDURE

o MAP allows resolution of disputes arising from difference or
difficulties in interpretation or application of tax treaty through
mutual agreement.
o While the competent authority may resort to MAP, they are
not obliged to reach an agreement and resolve their tax
disputes.
o If there is tax assessment involved, the MAP request should
indicate its request for suspension of collection pursuant to the
Tax Code.
o MAP cannot proceed simultaneously with the determination of
judicial or other administrative proceedings.
1. Pre-filing consultation – prior to making formal MAP request,
BIR shall determine if issues may be resolved via MAP
2. Filing of formal MAP request – Filing of written request
containing information and documentation
3. Period to file MAP – MAP should be filed within the time limit
specified in the double tax agreement. MAP request may be
presented to the relevant competent authority within two or
three years from the first notification of the action resulting in
taxation.
4. Manner of submission - maybe filed manually or electronically
via encrypted mail. If documents are voluminous, the
documents shall be sent to designated address via registered
mail or courier.
5. Fees - Fees associated with negotiation or hiring of
independent experts shall be shouldered by party initiating
the MAP.

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Tax treatment of Equity-Based

Compensation
(Revenue Regulations No. 13-2022 and RMC 143-2022)

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Tax treatment of equity-based compensation

Revenue Regulations 13-2022 and RMC 143-2022

RMC 79-2014 RR 13-2022

(29 October 2022)

Withholding Tax on
Rank-and-file employees Compensation
Withholding Tax on Compensation

Fringe Benefit Tax

Supervisory and
Managerial employees

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Difference on tax treatment of equity-based compensation

RMC 79-2014 vs RR 13-2022/RMC 143-2022

Tax Treatment RMC 79-2014 RR 13-2022 and RMC 143-2022

Taxable Event/Base

Grant Capital gains tax shall apply if granted for a price (full No capital gains tax (with or without option price)
price of the option shall be considered capital gains). No DST
Option shall also be subject to Documentary Stamp Tax
(DST) based on par value.

Sale or transfer If with consideration - sale or transfer of option shall be If with consideration – sale or transfer shall be subject to CGT
subject to capital gains tax applicable to stocks not listed applicable to stocks not listed on the stock exchange based
on the stock exchange. If without consideration, subject on the difference between sales price and option price. If
also to CGT but the cost base of the option shall be zero. granted without price- the cost base shall be zero.

Transfer without consideration - the transfer shall be treated

Exercise Difference between the book value/fair market value,
whichever is higher, at the time of exercise and price fixed
on the grant date
as a donation subject to donor’s tax based on the FMV of the
option at the time of donation.
Difference between the book value/fair market value,
whichever is higher, at the time of exercise and price fixed on
the grant date.

DST shall be imposed upon actual issuance of shares of stock

to the employee grantee.

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Tax treatment of equity-based compensation

Reporting obligations

Grant of equity-based compensation Exercise of equity-based compensation

Employer-grantor shall submit to the RDO where it is
registered within 30 days from the grant of equity-based
compensation a statement under oath indicating the
following:
1. Terms and conditions of the stock option
2. Names, TINs, position of grantees
3. Book value, FMV, par value of the shares subject of the
option at the grant date
4. Exercise price, exercise date and/or period
5. Taxes paid on the grant, if any
6. Amount paid for the grant, if any
Employer-grantor shall file a report on or before the 10th day
of the month following the month of exercise stating the
following information:
1. Exercise date
2. Names, TINs, Positions of those who exercise the option
3. Book value, FMV, par value of the shares subject of the
option at the exercise date
4. Mode of settlement (i.e., cash or equity)
5. Taxes withheld on the exercise, if any
6. Fringe benefits tax paid

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Tax treatment of equity-based compensation

Compliance requirements

Equity-based compensation exercised prior to 29 October 2022 by Equity-based compensation exercised starting 29 October 2022 by
supervisory or managerial employees supervisory or managerial employees

1. BIR Form No. 1603Q (Quarterly FBT return) 1. BIR Form No. 1601C (Monthly Remittance Return of Income Taxes
Withheld)
a. On or before 31 October 2022 relating to equity-based 2. BIR Form No. 1604-C (Annual Information Return of Income Taxes
compensation exercised during the 3rd quarter of year 2022; Withheld on Compensation); and
and/or 3. BIR Form No. 2316 (Certificate of Compensation Payment /Tax
a. On or before January 31, 2023 relating to equity-based Withheld)
compensation exercised any time from October 1-28, 2022

2. BIR Form 1604-F (Annual Information Return on Income

Payments Subjected to Final Withholding Tax)
3. BIR Form No. 2306 (Certificate of Final Tax Withheld at Source)

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Questions?

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