Executive Briefing

on the New EOPT Act

and Upcoming
CREATE MORE Bill
15 January 2024

The SGV Purpose

Nurture leaders and enable businesses for a better Philippines. #SGVforABetterPhilippines
About the Speaker

Atty. Fabian Delos Santos is the Firm’s Head of Tax Services. He is also a Global Compliance
Reporting (GCR), Private Client Services (PCS) and Business Tax Services (BTS) Partner of
SGV & Co. He is a CPA Lawyer and has been in the tax practice for more than 30 years. He led
the tax practice in the various SGV Branch Offices in Davao, Cebu, General Santos, Cagayan de
Oro, etc.

He provides tax, corporate and business advisory services to numerous clients and
successfully structured transactions of companies in diverse industries.

Fabian graduated from New Era University with a degree of BS Business Administration major
Fabian K. in Accountancy and placed 6th in the 1989 CPA Board Exam. He completed his Bachelor of
Laws from San Beda College Manila. He completed the Leading Professional Service Firms
Delos Santos Program and a graduate of the Advanced Management Program from Harvard Business
Partner, Head of Tax Services
School.

He is a Tax Committee Member of Makati Business Club, Management Association of the

Philippines and Philippine Chamber of Commerce and Industry, Member of Tax Management
Association of the Philippines and Philippine Institute of Certified Public Accountants (PICPA),
Board of Trustee of Philippines-Korea Economic Council (PHILKOREC), Board of Trustee of
Harvard Business School Club of the Philippines, and President of Rotary Club of Makati Paseo
de Roxas.

Page 1 #SGVforABetterPhilippines
Republic Act No. 11976
Ease of Paying
Taxes Act

#SGVforABetterPhilippines
Timeline

JAN. JAN. JAN.

5
2024
7
2024
22 2024

15 days after its complete publication

Signed into law by the Publication in the Official Effectivity of the act
President Gazette or in a newspaper
of general circulation

#SGVforABetterPhilippines
Declaration of policy

To modernize tax administration and improve its

To provide a healthy environment for the tax paying efficiency and effectiveness by providing mechanism that
public that protects and safeguards taxpayer rights and encourage proper and easy compliance at the least cost
welfare, and assures the fair treatment of all taxpayers and resources possible

To update the taxation system, adopt best practices, Enact policies and procedures, which are appropriate to
and replace antiquated procedures different types of taxpayers

#SGVforABetterPhilippines
Classification of taxpayers
New provision

Group Gross Sales

VETOED
Micro Less than 3M Pesos Micro taxpayers
*Shall not be required to withhold taxes

3M Pesos to less than

Small
20M Pesos

20MPesos to less than

Medium
1B Pesos

Large 1B Pesos and above

#SGVforABetterPhilippines
Special concessions for micro and small taxpayers

ITR in two pages, in

paper or electronic A reduced compromise
form penalty rate of at least
50%

10% for Civil Penalties

vs. penalty equivalent to 25% of the amount due

P500
instead of P1,000 for each failure to file an
information return, statement or list, or keep
any record, or supply any information required
50% reduction on the
interest rate

#SGVforABetterPhilippines
Filing of return, payment/remittance of tax

Current rules EOPT Law

AAB/RDO
Principal place of business

File and pay anywhere

Surcharge on wrong venue

#SGVforABetterPhilippines
Repeal of Section 34 (K) of the NIRC 1997

Any amount paid or payable which is

otherwise deductible in computing
gross income shall be allowed as a
deduction only if it is shown that the
tax required to be deducted and
withheld therefrom has been paid.

#SGVforABetterPhilippines
Timing of withholding taxes

Current rules EOPT law

• Paid Arises at the time

• Payable
• Accrued Income has become
payable
Whichever comes first

Claims for tax credit of any creditable income tax

withheld in a previous period - Can still be
creditable in the subsequent CY / FY

Provided, declared in the tax return where the

corresponding income is reported.

#SGVforABetterPhilippines
Taxes withheld at source

Current rules EOPT law

In case of excess income taxes paid during the year:

• Apply for cash refund / issuance of tax credit certificate

• Option to carry-over (Irrevocable) – Apply the excess against the income tax
due of succeeding quarters

In case taxpayer cannot carry-over due to

dissolution/cessation of business:
Apply for refund of
unutilized excess
income tax credit
► BIR shall decide on the application and refund the
excess taxes within two years from date of
dissolution/cessation

#SGVforABetterPhilippines
VAT base of sale of services

Current rules EOPT law

Gross Gross
receipts sales

12% VAT upon payment 12% VAT upon sale

(VAT official receipt) (VAT invoice)

#SGVforABetterPhilippines
Invoicing requirements

Current rules EOPT law

Goods Services Goods Services

Sales invoice Official receipt Sales invoice

#SGVforABetterPhilippines
Output VAT on uncollected receivable
New provision

Lapse of agreed
12% Subsequent
Uncollected Receivable
period to pay recovery

Seller may deduct the output Added to output VAT during

VAT on uncollected receivable period of recovery
from next quarter’s output
VAT, provided:

► Fully paid the VAT on the transaction

► VAT component not claimed as
allowable deduction

#SGVforABetterPhilippines
VAT refund claims risk classification
New provision

Classification

High-risk claim Subject to audit or other verification

processes based on BIR’s National
Audit Program
Medium-risk claim

Low-risk claim
Amount of VAT refund claim
Tax compliance history
Frequency of filing VAT refund
claims
*Basis is not exclusive

#SGVforABetterPhilippines
Refund of input tax

Filing of application* for *submission of invoices and other

refund documents in support of the application

Grant of refund is Grant of refund is not proper Inaction by the CIR (lapse
proper (Full/partial denial) of 90 days from date of
filing the application)

CIR must state in

writing the legal and
End factual basis for the
denial within the 90-
day period

In case of disallowance by COA during post-

audit, only the taxpayer shall be liable for
the disallowed amount
File an appeal with the
CTA within 30 days from
Any employee of the BIR who may be receipt of denial
found to be grossly negligent in the grant or after expiration of 90-
of refund shall be subject to administrative day period in case of
liability inaction

#SGVforABetterPhilippines
Consequences of issuing erroneous VAT invoice

New provision

VAT-reg. person Issuer shall be liable for non-compliance with invoicing

requirements
Issues VAT invoice with
lacking information
Input tax credit by the Purchaser shall be allowed, provided,
lacking information do not pertain to:

► Amount of sales, VAT

► Name and TIN of purchaser/issuer
VAT-reg. person ► Description of goods / nature of services
► Date of transaction

#SGVforABetterPhilippines
Credit/refund of erroneously paid taxes/penalties imposed without authority
(Sections 204 and 229)
Filing of application* for credit/refund
Grant of credit/refund is
proper
End
Claim for credit/refund with the CIR
must be filed within two years after
payment of the tax or penalty
*submission of complete documents in
with the BIR support of the application
Grant of credit/refund is not proper Inaction by the CIR (lapse
(Full/partial denial) of 180 days from date of
filing the application)
CIR shall state the
legal and/or factual Failure on the part of any
basis for the denial official, agent, or employee
of the BIR to process and
decide on the application
within 180-day period shall
be punishable under
Section 269 (Violations
committed by government
enforcement officers)
File an appeal with the
CTA within 30 days from
receipt of denial or after
expiration of 180-day
period in case of inaction
#SGVforABetterPhilippines
Other provisions

P500
annual Business
style
registration fee

Sales invoice

#SGVforABetterPhilippines
Other provisions

P500
+ Every three years**
ATP VAT
P100
Five invoice

years* Free of
charge If the sales amount per transaction is below the
threshold, Seller will issue one invoice for the
aggregate sales amount of at least P500.00 at
the end of the day.

Preservation of books
Printing of sales/ Threshold for issuance of
of accounts and other
accounting records commercial invoices sales/commercial Invoices
*Reckoned from the day following the deadline in filing a return, or if filed after the deadline, from the date of the filing of the return, for the taxable year
when the last entry was made in the books of accounts
**Using the CPI

#SGVforABetterPhilippines
Other provisions

Implementing Rules and Regulations

JAN. JAN. APRIL

7
2024
22
2024
21 2024

15 days after its complete publication within 90 days from the effectivity of the act

Publication in the Official Effectivity of the act Promulgation of the necessary

Gazette or in a newspaper rules and regulations by the
of general circulation Secretary of Finance
Taxpayers are given six months from the
effectivity of the IRR to comply with VAT and
Other Percentage Taxes amendments

#SGVforABetterPhilippines
Page 21 #SGVforABetterPhilippines
SGV | Building a better working world
SGV is the largest professional services firm in
the Philippines. In everything we do, we nurture
leaders and enable businesses for a better
Philippines. This Purpose is our aspirational
reason for being that ignites positive change and
inclusive growth.
Our insights and quality services help empower
businesses and the economy, while
simultaneously nurturing our people and
strengthening our communities. Working across
assurance, tax, strategy and transactions, and
consulting services, SGV teams ask better
questions to find new answers for the complex
issues facing our world today.
SGV & Co. is a member firm of Ernst & Young Global Limited. EY refers
to the global organization, and may refer to one or more, of the
member firms of Ernst & Young Global Limited, each of which is a
separate legal entity. Ernst & Young Global Limited, a UK company
limited by guarantee, does not provide services to clients.
EY exists to build a better working world, helping to create long-term
value for clients, people and society and build trust in the capital
markets. Enabled by data and technology, diverse EY teams in over
150 countries provide trust through assurance and help clients grow,
transform and operate.
Information about how EY collects and uses personal data and a
description of the rights individuals have under data protection
legislation are available via ey.com/privacy. For more information
about our organization, please visit ey.com/ph.
© 2024 SyCip Gorres Velayo & Co.
All Rights Reserved.
APAC No. 10001186
ED None
UEN 198905395E
This material has been prepared for general informational purposes only and is
not intended to be relied upon as accounting, tax or other professional advice.
Please refer to your advisors for specific advice.
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