Annex "A' H.No. 4135 5. No. 2226 Republic ofthe Bhilippines Congress of the Philippines Meteo Mansi | Nintoent Gongeess Second Regular Session a | ‘Begun and held in Metro Manila, on Monde day of July, two thousand twonty-three. [RepuBuic Act No. 11976) AN ACT INTRODUCING ADMINISTRATIVE TAX REFORMS, AMENDING SECTIONS 21, 22, 51, 66, 57, 58, 76, 77, 84, 90, 91, 108, 106, 108, 109, 110, 112, 113, 114, 115, 116, 117, 118, 119, 120, 128, 200, 204, 229, 235, 236, 237, 238, 241, 242, 249, 245, 248, AND 269; AND REPEALING SECTION 94(K) OF ‘THE NATIONAL INTERNALREVENUE CODF OF 1997, AS AMENDED, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Phillpines in Congress assembled: j SkcTION 1. Title, ~ ‘This Act shall be known as the ase of Paying Taxes Act”.2 ‘S20, 2. Declaration of Policy. ~ tis hereby declared the policy ofthe State: (@) To provide a healthy environment for the tax paying public that protects and safeguards taxpayer rights and welfare, aswell as ansures he fair treatment of ll taxpayers; (2) To modernize tax administration and improve its efficiensy and effectiveness by providing mechanisms that ‘encourage proper and easy compliance at the least cost and resources possible; (B) To update the taxation system, adopt best practices, and replace antiquated procedures; and (4) Toonact policies and procedures, which are appropriate todifferent types of taxpayers, ‘SEC. 8, Sostion 21 of the National Internal Revenue Code 0f 1997, as amended, is hereby amended tozead as follows: "SEC, 21. Sources of Revenue and Classification of Taxpayers. (0) The following taxes, fees and charges are doamed to be national internal revenue taxes: (Income tax; (@)Bstate and donor's taxes; (Value-added tax (@ Other percentage taxes; (Boise taxes; (@) Documentary stamp taxes; and a (7) Such other taxes as are orhereafter may ‘be imposed and collected by the Bureau ofInternal Rovenue. () Classification of Taxpayers. ~ For purposes of responsive tax administration, taxpayors shall bs classified as follows: GROUP GROSS SALES Mio Tavs than Thee million pesos (P8,000,000) | Snall “Theo million panes (3,000,000) toes than ‘Twenty million posos (20,000,000) Medien "Fwonty milion pesos (20,000,000) to lees than One billion (P1,000,000,000) Tan ‘One billion pevws (@1,000,000,000) and above SEC. 4. Section 22 of the National Internal Revenue Code of 1997, as amended, is hexeby futher amended to read as follows: “Spo, 22, Definitions, ~ When used in this Title: (516) The term ‘filing of return’ shall refer to the act of accomplishing and submitting the presevibed tax retum, electronically or manually,4 to the Bureau of internal Revenue, or through any authorized agont bank or authorized tax coftware provider, ae required under this Code or as prescribed under existing rulog and regulations. (LL) The term payment of tax or ‘remittance coftax’shallrefer tothe act of delivering the amount of tax due or withheld, either electronically or ‘manually, to the Bureat of Internal Revenue, or through any authorized agent bank or authorized tax software provider, as required under this Code or as prescribed under existing rules and regulations” S20. 6, Section 34(K) of the National Internal Revenue Cote of 1997, as amended, is repealed, and the succeeding paragraphis renumbered accordingly. ‘SEC. 8, Section 51 of the National Intornal Revenue ods of 1997, as amended, ishoreby further amended toread asfollowa: “Sec. 51. Individual Returns. — (A) Requirements,— ()Eseopt as provided in paragraph @) ofthis section, tho following individuals are required ‘tofile an income tax return: @) The following individuals shall not be required to le anincome taxzelura: () An individual citizen of the Philippines who is working and deriving income solely from abroad as an ‘Overseas Contract Workar’ as provided under Section 28(C) of this Code, or ‘Overseas Filipino Worker’ as defined under Section 8(G) of Republic Act No. 11641, otherwise ‘Known 28 Department of Migrant Workers Act’. B) Where to File, ~Bxcept in enses where the Commissioner otherwise permits, the return hall be filed with any authorized agent bank, Revenua District Office through Revenue Collection, Officer, or authorized tax software provider. (D) Hustand and Wije.~Manvied individuals, whether citizena, resident or nonresident aliens, -whodonot derive income purely om compensation, shall file either electronically or manually, axeburn, for the taxable year to include the income of both, spouses, but where it simpracticable for the spouses tofile one return, cach spouse may filen separate retum of income but the returns so filed shall be consolidated by the Bursauof Internal Revenue for purposes of verification for the taxable year. ‘S20, 7, Section 66 of the National Internal Revenue Code of 1997, as amended, is heveby further amendod toread as: “SEC. 56. Payment and Assessment of Income Taz for Individuals and Corporations. — (A) Payment of Tax. — - (1) In Gonoral, ~ Tho total amount of tax imposed by this Title shall be paid, eithor clectronically or manually, by the person subject therato atthe time the retutn is filed. Inthe caz0 of tramp vessels, the shipping agents and/or thehousbanding agents, and in their absence, the captains thereof are required to file the return horein provided and pay the tax dus thereon before their departure. Upon failure ofthe eaid agents or captains to file the return and pay the tax, the Bureauof Customs is hereby authorized tobold the vessel and prevent its departure until proof of aymentof che taxis presented ora suifciont bond is filed to answer forthe tax due. Suc. 8. Section 67 ofthe National Internal Revenue Code 0f 1907, as amended, is hereby further amended toread aa follows: “820, 67. Withholding of Tas at Soure.~ Wess @xxx (©) Taree Covenant Bonds.x2x ‘The Department of Finance shall review, least once every three (8) years, regulations and processes for the withholding of creditable tax under this Code, and direct the Bureau of Internal Revenue to amend rules and regulations for the ‘same, should it be found during the review that the existing rules, regulations, and processes for the withholding of creditable tax under this Code adversely and materially impact tho taxpayer: Provided, That micro taxpayers shall not be required to withhold taxes under Subsection (B) ofthis Section.” ‘Sec, 9, Section 58 of the National Internal Revenue Coae. 0f 1997, as amendad, ishereby further amended toread aa follb "Bsc, 58. Returns and Payment of Toxes Withheld at Source. — 10:3 wate ne” enor _ 1 (A) Quarterly Returnsand Paymentvof Taxes Withheld, ~ Taxes deducted and withheld under Section 57 by withholding agents shall bo covered, by a zetum and paid to, oither clectronically or manually, exeeptin cases where the Commissionor otherwise permits, any authorized agent bank, Revenue District Office through Revenue Collection Oificer, or authorized tax software provider. ®) xxx (©) Timing of Withholding Taxes. ~ Tha obligation to deduct and withhold the tax arisesat ‘the time the income has become payable. (D) Annuct Information Return. Xxx (©) Income of Recipient. —Income won which any creditable tax is required to be withhold at source under Section 87 shall be included in the retumnofitsrecipiont butthe excessof the amount. of tax so withheld over the tax due on his return shall be refunded to him subject to the provisions cof Section 204; ifehe incoma tax collected at eource isleasthan the tax due oahis return, the difference shall be paid in accordance with the provisions of Section 56. Claims for tax credit or refund of any creditable income tax which was deducted and withheld on income payments shall be given due course only when it is shown that the income .ymant has beon declared 3 part of tho gross income and the fact of withholding is established, Claims for tax credit of any creditable income tax deducted and withheld in a previous poriod can sill be ereditable in the subsequent calendar or fiscal year: Provided, That the eame had eon declared in the tax return where the corresponding income is reported.® 8 ‘Shc, 11, Section 77 of the National Internal Revenue Code Ao gene Paes ne eerie 01997, as amended, is hereby amended to read as fellows: of this Code and its implementing rules and rogulations aro horeby considered trust funds and shall be maintained in a separate account and not commingled with any other funds of the withholding agent. © Registration with Register of Deeds. — ‘S20, 10, Section 76 of the National Internal Revenue Code of 1997, as amonded, ishereby amended to read as follows: "Spe, 78. Final Adjustment Return. — In case the corporation is entitled toa tax credit or rofund of the excess income taxes paid loving the year, the excees amount shown om its nel adjustment zeturn may be carried over and ‘erodited against the estimated quarterly income tax liabilities for the taxable quarters of the succeeding taxable years. Once the option to carry over and apply tho aaid excess income tas paid against tha income tax du for the tasable uartorsof the succeeding taxable years hasbeen rade, such option shall be considered irrevocable for that taxable poriod and no application for cash rofund or issuance of tax credit certificate shall bo allowed therefor: Provided, That in ease the taxpayer eannotcarry over the oxcoss income tax eredit due to dissolution or cessation of businaaa, the taxpayer shall le an application for refund of any unutilized excess income tax credit, and the Bureau of Internal Revenue shall decide on the application and refund the excess taxes within ‘vo (2) years from the date of the dissolution ox cessation of business” JAN LO 2024 1023147 CORDA "S50, 77. Place and Time of Filing and Poyment of Quarterly Corporate Income Tax. — (A) Place of Filing. - Except as the Commissioner otherwise permits, the quarterly income tax declaration required in Section 75 and the final adjustment return required in Section 76 shall be fled, either electronically or manually, with any authocized agent bank, Revenue District Office through Revenue Collection Officer, for authorized tax coftware provider. (B) Time of Filing the Income Tax Returts ~ ‘The corporate quaxterly declaration shal! be filed, either electronically or manually, within sixty (60) daysfollowing the close ofeach ofthe firstthree (8) quarters of the taxable year. The final adjustment zeturn shall bo filed on or before the fifteznth (15°) day of April or onor before the fifteenth (154) day ‘of the fourth (4) month following the lose ofthe {iseal yeas, as the case may be (©) Time of Payment of the Incom Tax. ~ Tae incaxao tax due on the corporate quastenly eturrsand the nal adjustiaent income tax returns computed in accordance with Sections 78 and 76 chall be paid, eithor electronically or manually, at the time the declaration oretumn sled, in A manner proseibed by the Commissioner.” ‘SHC, 12, Section 81 of the National Internal Revenue Code (of 1997, as amended, isheroby amended toxead as follows:w 3. 81. Filing of Return and Payment of Toxes Withheld. —Except a3 the Commissioner otherwise permits, taxes deducted and ‘withheld by the employer on wages of employees: shall be covered by a return and paid, either lectronicelly or manually, to any author bank, Revenue District Office through Ret Collection Officer, or authorized tax aoftware provider. ‘The retura shell be filed and the payment made, either electronically or manually, within twenty-five (25) days from the close of each calendar quarter: Provided, however, That Commissioner may, with the approval of the Socretary of Finance, requize the employers to pay or deposit the taxes deductod and withhold at more frequent intervals, in eases where such requirement ia deomed necossaxy to protect the interestof the Government. ‘The taxes deducted and withheld by ‘employers shall be held in a epocfal fund in trust for the Government until the same are paid tothe u ‘SEC. 14, Section 91 of the National Internal Revenue Code of 1997, asamended, is hereby further amended to xead as follows: "See, 91. Payment of Tax. ~ (A) Time of Payment. ~ The estate tax imposed by Section 84 shall be paid, either electronically or manually, at the time the return, is filed by the executor, administrator, or the heirs @) Liabitity for Poyment.~ The estate tax imposed by Section 84 shall be paid, either electronically or manually, by the executor or ‘administrator before delivery to any beneficiary of Inia distributive share ofthe estate. Such beneficiary shall to the extent of hia distributive share of the estate, besubsidiarly liable for the payment of such portion of the estate tax as his distributive share ‘bears to the valuaof the total not estate said collecting officers.” ‘S5C.15, Section 108 of the National Internal Revenue Code of 1997, a3 amended, is hereby amended to read as follows: SBC, 18, Sectiox 90 ofthe National Internal Revenue Code 0f 1997, as ameniled,ishereby further amended to read as follows: “SEO. 103, Filing of Return and Payment of Tas. “S80, 90. Bstate Tox Returns, ~ 1 xxx xxx (8) Timeand Place of Filing and Pay ©) Place of Filing. -Excopt in casos whers the Commissioner otherwise permits, the return required under Subsection (A) shall be filed, either electronically or manually, with any authorized agent bank, Revenue District Office through Revenue Collection Offiesr, or authorized tax ‘software provider” Towa JAN 10 27% RDA ~The retwa of the donor zequired in this Section shall be filed, either electronically or manually, within thirty (@0) days after the date the gift is made, and the tax due thereon shall be paid, either electronically or manually, at the time of filing, ‘Excoptin cases where the Commissioner otherwise permits, theroturn shall be filed and the tax paid,e s either electronically or manually, toany authorized les Betunn Alouancee ond See teen! ban, Meveus Distr Office though so Sie Bare lots nd Sl iEpeueCiete Omea stone ule awa nds prope el Stivers : were granted by a VAT-registered person may be i deducied from the gross sales for the quarter in ‘SEC, 16. Section 106of the National Internal Revenue Code | which a zefund fa made or a credit memorandum 0f 1997, as amended, ie hereby further amended toread as follows: or refund is issued. Sales discount granted and indicated in the invoice atthe time of sale and the “EO, 106, Value-Added Taxon Sale of Goods grantof which does not depend upon the happening or Properties. of a future event may be excluded from the gross sales within the same quarter it was given. (A) Rete ond Base of Tax, ~ Thoce shall be levied, assessed and collected on every sale, (B) Authority of the Commissioner to barter or exchange of goods or properties, @ Determine the Appropriate Tex Base. — The value-added tax equivalent totivelve percent (1205) Commissioner shall, by rules and regulations of the gress sales of the goods or properties sald, prosovibed by the Secretary of Finance, determine bartered or exchanged, such tax to bo paid by the appropriate tax base in cases where a ler ox trensforor. transaction iadoomed asa, ator or axshango of ‘goods or properties under Subsection (B) hereof, or @xxx ‘where the gross sales is unreasonably lower than the actual market value." foxxx tc, 17, Section 108 ofthe National Internal Rene Code toxxx of 807 eaamented,ohershy farther teed tread as follows wax "S20, 108, Value-Added Tes on Sote of . Servzes ond Uae or Lanne of Propetian.~ Oxss (A) Reto and Bose of Tox. —Taere shell be Gees levied, atcosed and called, a valuoadded tax For the purposes of this Section, the term ‘gross aales’ means the total amount of money or iteequivalent valuoin money which the purchaser pays or is obligated to pay to the seller in consideration of the sale, barteror exchange ofthe goods or properties, excluding the value-added tax. ‘The excise tax, if ny, on such goods ar propertios shall form partofthe gross sales. equivalent to twelve percent (12%) of the gross sales derived from tha sala or exchange of sexviees, ineluding the use or lease of properties. xxx - Forpurposes of this Section, the term ‘gross sales’ means the total amount of money or its equivalon: representing the contract prica, compansation, service fee, rental or royalty, including the amount charged for materials“ supplicd with the serviess during the taxable quarter for the services performed for another person, which the purchaser pays oris obligated to pay to the sellorin consideration ofthe eale, barter, or exchange of services that has already beon rendored by the aellor and the uso or lease of properties that have alzeady been supplied by the seller, excluding valus-added tax and those amounts earmarked for payment to third (8) party or received as reimbursement for payment on behalf of another which do not redound to the benofit of the seller as provided under relavant laws, ralca or regulations: Provided, Phat forlongetorm contracts fora period ofore (1) year or more, tho invoice shall ‘bo issued on the month in which the service, or use or lease of propertios is rendered or supplied, (B) Transactions Subject to Zero Percent (0%) Rate,~ (© Sales Allowances and Sales Discounts. = The value of sorvices rendered for which allowances were granted by VAT-reyistaved person ray bo doductd from tho geoassalosfor the quarter invwhich arefundismadocr acreditmemorandum or refund is issued. Sales discount granted and indicated in the invoice athe time of ale and the grant ofwhich dove not dapend upon the happening ‘oft futuro event may be excluded from the gross salee within the same quarter itwas given.” ‘SEC. 18, Saction 109 ofths National Internal Revenue Code 01997, as amended, is hereby further amended to read as follows: "SRC, 108, Exempt Transactions. ~ ‘The following transactions shall be exempt from the value-added tax: ante ma JAN 94 JAN 10 Zi 16 (CO) Sale or lease of goods or propertios or the pexformance of services other than the transactions mentioned in the preceding paragraphs, the gross annual sales do not exesed. the amount of Three million pesos (P2,000,000): Provided, That the amount herein stated shall be adjusted to its prosont values using the consumer price index, as published by the Philippine Statistics Authority (PSA) every: ‘three (8) years ‘S8C. 19, Section 110 ofthe National Internal Rovere Code (0f 1997, as amended, is hereby fugther amended to read as follows: "SEC. 110, Tax Credits, (A) Greditable Input Tax.— @) Any input tax evidenced by aVAT invoice {squed in accordance with Section 113 hereofen tho following transactions shall be creditable against the output tax: (@) Purchase or importation of goods: () For sale; or i) For conversion into or intended to form part of a finished product for salo including packaging materials; or Gi) For use as supplies in the course of business; or Gv) For use as materials supplied in the eale of service; or () For use in trade or business16 (b) Purchase of services on which a ‘value-added tax has accrued, (D) Output VAT Credit on Uncollected Receivables. ~ A saller of goods or sorvices maz: deduct the output VAT pertaining to uncollected receivables from its output VAT on the next quater, after the lapse of the agreed upon poriod to pay: Provided, That the seller has fully paid the VAT on the transaction: Provided, further, That tae VAT component of the uneollocted receivables has not been claimed ae allowable deduction under Section 34(8) ofthis Code. Incase of recovery of uncollected receivables, the output VAT pertaining thereto shall be added. tegheoutput VAT ofthe taxpayer ding tho ped ofzecovery.” ‘$50, 20. Section 112 of tae National Internal Roveaue Code follows: of 1997, as amondod, isheraby further amended tozead a3 "BEC. 112. Refunds of Input Tax. (B) Cancellation of VAT Registration. ~ A person whose registration has beon cancelled due toretirement from or cessation of business, or due ‘to changes in or cessation of status under Section 106() of this Code may, within two) years from the date of cancellation, apply forthe issuance ofa tax crodit certificate or cash refund for any unused inpat tax which may be used in payment of his other internal revenue taxes or apply for rend for any unused input tax, 10: 87 eo AN 10 2005 aa 10 28 d Ww (C) Period within which the Refund of Input Taxes shall be Made. — In proper cases, the Commissioner shall grant a rofund for creditable {input taxos within ninety (90) days from the date of submission of invoices and othor documents in support ofthe application filed in accordance with Subsections (A) and (B) horeof: Provided, That for thie puxpose, the VAT refund claims shall be classified into low., medivus, and highriskeclaims, ‘with the risk classification based onamount of VAT refund claim, tax compliance history, frequency of fling VAT rofund claime, among others: Provided, farther, That medium- and high-risk claims shall bbe aubjoct to auditor other verification procoseos inaccerdance with the BuzeauofIntamnal Revemus's national audit program for the relevant year: Provided, finally, That should the Commissioner find that the grant of refuad ia aot proper, the Commissioner must stato in writing the legal ‘and factaal basia for the donial within the ninoty (0-day period. In ease of fll op for tax rofund, or the f Commissioner toct on tke application within the period preseribad above, ths taxpayer affected may, Within thirty (20) days from tho receipt of the decision denying Uhs claim or after the expiration of the ninety (00)-day peried, appeal the decision with the Court of Tax Appeals: Provided, however, ‘That failuro on the part of any official, agent, oF employee of the Barca oflinteraal Reveaue toact onthe application within She ninety (80-day period shall be punishable under Section 969cf this Code tial denial of the claim we on the part of the (D) Manner of Giving Refund. ~ Refisids shall be made upon warrants drawn by the Commissioner or by his duly authorized representative without the necessity of being countersignad by the Chairperson, Commission on ‘Audit, the provisions of the Administrative Codo ofa8 1087 to the contrary notwithstanding: Provided, ‘That refunds under this paragraph shall be subject topost audit by the Commission on Auditfollowing the risk-basod classification above-described: Provided, further, Thatin ease of disallowance by the Commission on Audit, only the taxpayer shall beliable for the disallowed amount without prejudice to any administrative liability on the part of any employee of the Bureau of Internal Revenue ‘whomay be found tobe grossly negligent in tho grant ofrefund.” ‘See. 21, Section 119 ofthe National Internal Revenue Code of 1997, as amended, is hereby amended to read as follows: “S80. 118. Invoicing and Accounting Requirements for VAT:Registered Persons. (A) Invoicing Requirement. ~ A VAT- registored person shall issue VAT invoice for avery sale, barter, exchange, or lease of goods oF properties, and for every sale, bartor or exchange of services, ®) Information Contoined in the VAT Invoice, ~ The following information shall be indicated in the VAT invoies: (2) A statement that the soller is a ‘VAT-registered person, followed by the seller's ‘Taxpayer Identification Number, (@) The total amount which the purchaser pays or is obligated to pay to the galley with the indication that such amount includes the value-added tax: Provided, Tha (@) The amount ofthe tax shall be shown as separate item in the invoice; ar Jo: JAN 10 2024 Cogpalo ox | 1 )ifthe sale isexempt from value-added tax, the term ‘VAT-exempt sale’ shall bo written of printed on the invoice; (Ifthe salo is aubject to z0x0 pezcont (0%) value-added tax, the term 'zero-rated sale’ shall be written or printed on the invoice; (@ If the sole involves goods, properties or services some of which are subject to and some of ‘which are VAT acro-rated or VAT-exempt, the invoice shall clearly indioats tha breakdown of ths sale prio between itataxablo, exampt and rero-rated components, and thecalculation ofthe valus-sdded tax on each portion of the sale shall be shown on the invoice: Provided, That the seller may issue separate invoices for the taxable, exempt, and szero-rated componentaof the sale, @xxx (@)In the case of sales in the amount of One thousand pesos (P1,000) or more where the sale or transfer is made to a VAT-rogistered person, the name, address and Taxpayer Identification Number of the purchaser, customer or client, Oxxx (D) Consequence of Issuing an Erroncous VAT Invoice, ~ (1) Ifa person who is not a VAT-rogistered person issues an invoice showing the person's ‘Taxpayer Identification Number, followed by the word VAT: () The issuer shall, in addition to any lability toother percentage taxes, be liable to:» @ The tax imposed in Section 108 or 108, without the benefit ofany inputtax credit; and Gi) A Bity percent (60%) surcharge under ‘Section 248(B) of this Code; (@) The VAT sholl, if tho other requisite {information required under Subsection B) hereof fs shown on the invoice, be recognized as an input tax credit to the purchaser under Section 110 of this Coda, (2) Ifa VAT-rogistored porson issues a VAT invoice fora VAT-exemp! transaction, but fala to Aisplay on the invoice the torm VAT-oxempt sale’ or clearly provide a breakdown of tho VATT-exempt sale ea provided for under paragraph ‘B(2)(a) herein, the issuer shall be liable to account for the tax imposed in Section 108 or 108 as if Section 109 did not apply, (8) If 2 VAT-registered person incwos a ‘VAT-invoice to another VAT-registered person with lacking information Subsection (B) hereof, the issuer shall be Viable for noncompliance with the invoicing requirement, however, the VAT shall atill be allowed tobe used as input tax eredit on tho part of the purchaser pursuant to Section 110 ofthis Code if the lacking information do not pertain to the amount of eales, amount of VAT, name and Taxpayer Identification Numbor of both the purchaser and issuer/seller, description of goods or nature of services, and the date of the transaction, SE0.22, ion 114 of tho National Internal Revenue Code ‘of 1997, as amended, is hozeby further amended toread as follows: 10:3,Am JAN 10 2074 king aa a “SEC. 114, Return and Payment of Value- Added Tas. — (A) In General, -Bvery person liable to pay ‘the value-added tax imposed under this Title shall file, either electronically or manually, a quarterly return of the amount of bis gress sales within ‘bwenty-five (25) days following the close of each taxable quarter prescribed for each taxpayer: Provided, however, That VAT-registered parsons ‘shall pay, either clectronically or manually, the value-added tax on a monthly basis: Provided, finaly, That beginning January 1, 2025, the fling and payment required under this Subsection shall bedone within twenty-five (25) days following the closo ofeach taxable quarter. (B) Where to File the Return and Pay the ‘Tox. Except aa the Commivsioner otherwise eset tease call fed wien ine paid, either electronically or manually, to any tithorid agent bank, Revenue District Offco through Revanue Collection Oificar, or authorized tax software provider. ‘S3C.29. Section 116 of the National Intzenal Revenue Code of 1997, as amended, ishoreby amended to read as follows: “SEC, 115. Power of the Commissioner to Suspend the Business Operations of a ‘Taxpayer. ~The Commissioner or his authorized representatives hereby empowered tosuspend the business oparations and temporarily close ‘business establishment of any person for any of {following violations:2 (@) In the case of @ VAT-registered Person. — (1) Failure to issue invoices; @) Failure to file a value-added tox rotuenas required under Section L14;0r (Understatement of taxable sales by this! percent (30%) or more of his correct taxablo sales for the taxable quarter, SEC. 24. Section 116 0f the National Internal Revenue Code 011997, as amended, ishercby further amoned to read aa follows: “Se0, 116. Tax on Persons Exempt from Value-Added Tax (VAT). ~ Any person whose sales areexempt under Sec! thé payment of not a VATwegistered person shall pay, either electronically or manually, a tax oquivalent to three percent (8%) of his gross quarterly sales: Provided, That cooperatives shall be oxompt from the three percent (3%) tax herein imposed: Provided, further, That effective July 1, 2020 tuntil June 30, 2023, the rates shall be one ppereont (1%).” SEC. 25, Section 117 of 0 National Internal Revenue Code 0f 1997, 28 amended, is horoby farther amended to read 23 follows: “26. 117. Percentage Tax on Domestic Carriers and Keepers of Garages. ~ Cars for rent or hire driven by the lessee; transportation contractors, including persons who transport passengers for hire, and othor domestic carriers by land for the transport of passengors except ownore a4 2s ofbancas and owners of animaldrawn two-wheeled vehicle), and keepers of garages cball pay a tax equivalent to three percent (396) of their quarterly: ‘grogs.ales, ‘The gross sales of common cerviors derived, from their incoming and outgoing freight shall not bo subjocted to tho local taxes imposed under Republic Act No. 7160, otherwise known as the Local Government Code of 1991.” ‘$30.26. Section 118 of the National Internal Revenue Code 01997, a8 amended, ishorcby further emonded to read as follows: “SEC. 118. Percentage Taxon International Carriers. — (A) Intornationalairearviors doing business {in tho Philippines on their rosa sales derived fom transport of cargo from the Philippines to another country aball pay ataxof threo percent (35) of theiz quarterly gross ales. ®) International shipping carviors doing business in the Philippines on their gros sales derived from transportof cargo from the Philippines to another country shall pay a tax equivalent to three percent (9) oftheir quarterly groas.ales.” SEC.27. Section 119 of the National Internal Revenue Code 0f 1997, as amended, isherehy further amended to road an follows: "80,119, Toon Franchises. Any provision of general or special law to the contrary notwithstanding, there shall be lovied, assessed and collected in respeettoall franchises on ratio andlor television broadcasting companies whosa annual {108s sales of the preceding year do not exo2ed Ten ullion pasos (P0,000,000), subject to Seetion 238 ofthis Code, a tax of three percent (3%) and on gasand water utilities, atax of two percent (286) onthe ‘gross ealoa dorived from the business covered by the law granting the franchise: Provided, however, ‘That radio and television broadcasting companies. referred to in this Section shall have an option to bbe vogistored as a valuo-added taxpayer and pay the tax duo thereon: Provided, further, That once the option is exercised, said option chall be irrevocable, 'S5¢.28, Section 120 of the National Internal Revenue Coda 01997, as ameniod, ishereby further amended to read aa follows: "Seo. 120. Tax on Overseas Dispatch, Message or Conversation Originating from the Philippines.— (A) Persons Liable, —Thare shall be collactod. upon every overszas dispatch, message oF conversation trans 1e Philippines by telephone, telegraph, televriter exchange, wireless and othor communication aquipmont service, atax, of ten percent (10%) on the amount billed for euch services, The tax imposed in thia Section aball be payable by tho person paying for the services rendezed and shall be paidto the person rondoring the services who is required tocollect and pay the tax within twenty (20) days after the end of each, quarter, () Fremptions. ~ Tho tax imposod by this Section shall not apply to: ) Government. ~ Amounts billed for messages transmitted by the Government of the—————-——__ Republic of the Philippines or any of its political") — subdivisions or instrumentalities; 25 (@) Diplomatic Services, ~ Amounts billed for ‘messages transmitted by any embassy and consular offices ofa foreign government; (8) International Organizotions.—Amownis billed for mossagos transmitted by a public international organization or any ofits agoncles hased in the Philippines. enjoying privileges, exemptionsand immunities which the Government of the Philippines ia committed to recognize pursuant to an international agreement; and (@ News Services. ~ Amounts billed for ‘messages from any newspaper, press association, ‘radio oF talovision newspaper, broadcasting agency, ‘or nowatickers services, to any other newspaper, ‘prose association, radio or television newspaper broadcasting agency, or newsticker earvica or toa bone fide correspondent, which meseagon doal exclusively with the collection of news tema for, or ‘the dissoniination of nows item through, public press, radio or television broadcasting or a newsticker sarvice furnishing a goneral news service similar to that ofthe publicppress.” ‘Sn0. 29. Section 128 of tho National Internal Reven’ of 1997, a3 amended, ishs 2 Cosi oby amended toread as follows: "SEC, 128, Returns and Payment of Porcentoge Taxes, ~ (A) Returns of Gross Sates or Barnings and Pesment of Tax. (1) Persons Liable to Pay Percentage Taxes. — Bvery person subject to the percentage taxes imposed under this Title shall file, either electronically or manually, a quarterly return of the amountof the person's gross sales, or earnings and pay, elthor electronically or manually, to any authorized agent bank, Revenue Distriet Office6 through Revenue Collection Officer, or authorized + taxeoftware provider, the tax due thereon within twenty-five (25) days after the end ofeach taxable quarter: Provided, That in the case of a person whose VAT registration is cancolled and who becomes liable to the tax imposed in Section 116 of this Code, the tax shall accrue from the date of ‘cancellation and shall be paid in accordance with the provisions of tia Section, @) Person Retiring from Business. ~ Any person retiring from a business subject to percantage tax shall notify the nearest internal revenue officer, file, either electronically or manually, the porson’s return and pay, either slectronically or manually, the tax due thereon within twenty (20) days after closing the business, (B) Where to File.— Except as the Commissioner otherwise permits, every person ligble to the percontage tax under this Title shall file, either electronically or manuslly, @ consolidated return for all branchea or places of ‘business with any authorized agent bank, Revenue District Oifice through Revenue Collection Officer, orauthorized tax software provider.” either electronically or manually, the tax in accordance with the rules and regulations to be prescribed by the Secretary of Finance, upon ‘recommendation of the Commissioner. (B) Time for Filing and Payment of the ‘Tass. ~ Except as provided by rules and regulations promulgated by the Secretary of Finance, upon recommendation of the Commissioner, the tax return prescribed in this Section ehall be filed, either electronically or manually, within ten (10) days after the close ofthe month when the taxable document waa made, signod, issued, accepted, or transferred, and the tax thereon shall be paid, cither electronically or manually, at the eame time the aforcaaid return ia filed. (©) Were to File, ~ Except in cases where ‘the Commissioner otherwise permits, the aforesaid tax return shall be filed, either electronically or manually, with and the tax due shall be paid either electronically or manually, through any authorized agent bank, Revenue District Office through Rovenue Collection Officer, or authorized tax software provider. inn ‘SBC. 31. Section 201 of the National Internal Revenue Code si edi En Tone Tere ts 01997, a2 amended, is hereby further amended to ead as fallow 01997, as amended, is hereby amended to read as fellows: (0-9 Br JAN 10 2074 “SEC. 200. Payment of Documentary ‘Stamp Tox. ~ ~ (A) Tn General. ~ ‘The provisions of Presidential Decree No. 1046 notwithstanding, any person liable to pay documentary stamp tax upon any document subject to tax under Title VIL of this Code shall file a tex return, | either electronically or manually, and pay, "SEO. 204. Authority of the Commissioner to Compromise, Abate and Reftnd or Credit Toxws.— ‘The Commissioner may~ - xxx (©) Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal revenuestamps when they are returned in good condition by the purchaser, and, in his discretion, redeem or change unused stamps that have been rendered ‘unfit for use and refund their value upon proof of destruction, No creditor refund of taxes or penaltios shall be allowed unlass the taxpayer lesin writing ‘with the Commissioner a claim for creditor refund within two @ years after the payment ofthe tax or penalty as provided under Section 229 of this Code: Provided, however, That a return filed showing an overpayment shall bo considared as a written claim for credit or refund: Provided, further, That ‘tho Commissioner eball process end decide the refund under this provision within one hundred eighty (180) days from date of submission of complete documents in supportofthe application filed: Provided, furthermore, That should the Commissionsr deny, ia fullorin part, the claim for refund, the Commissionar shall state tho legal andlor factual basis for the denial: Provided, That feiluze on tho part of any oficial, employee of the Bureau of Intornal Res process and decide on the application within the ‘one hundzed aighty (180)-day period shall be punishable under Section 289 of this Code. ATax Credit Centificate validly issued under the provision ofthis Code may be applied against any internal revenue tax, excluding withholding taxes, for which the taxpayer's direstly liable. Any request for conversion into refund of unulilized tex credite may be allovred, subject to the provisions of ‘Section 230 of this Code: Provided, That the original copy of the Tax Credit Certificate showing a creditable balance is surrendered to the appropriate ovenus officer for verification and cancellation: Provided, further, That in no caseshalla tax refund be givon resulting from availment of incontives granted pursuant to special lawe for which no actual payment was made, 4737 Ben JAN 10 217% ConDeva i of 1997, as amend 2 ‘SBC. 82, Section 229 of the National Internal Revenue Code ishoreby further amended toread as follows: “SEC. 229, Recovery of Tax Brroneously or Ilegally Collected, ~No suit or proceeding shall be in any court for the recovery of any national internal revenue tax hereafter alleged to hhave been exzoncously or illegally assessed or collected, or of any penalty claimed to have been, collected without authority, ofany sum alleged to have been excessively orin any manner wrongfully collected without authority, orof any sum alleged to have been excessively or in any manner ‘wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, orsum has been paid under protestor duress, Tnany case, no such suitor proceeding shall ‘here ia a full or pastial denial ofthe claim for refund or credit by the Commissioner or there is a failure on tho part of the Commissioner the one hundred eighty (180)-day period under Section 204 of this Code: Provided, however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the faco ofthe retura upon, which payment was made, euch payment appears clearly to have been erroneously paid. In case of full or paxtial denial of the claim for tax refund, or the failure on the part of the Commissionor to acta the applicstion within the poriod prescribed above, the taxpayer affected ziay, within thirty (30) day's from the receipt of the docision donying the claim or after the expiration JAN 10 207! CORDA o Revenue or any other agency of the Government, charged with the enforcement of the provisionsof this Code, who is guilty of any of the offenses herein. ‘below specified shall, upon conviction for each act or omission, be punished by 2 fine ofnot lees than Fifty thousan pesos (P50,000) but not more than ‘Ono hundred thousand peeos (P100,000) and aufier imprisonment of not less than ten (10) yeazs but not more than fifteen (15) yearsand shall likewise eulfor an additional penalty of perpetual Aisqualification to hold publicolfice, to vote, and to participate in any public election: @Deliterate failure toacton the application for refunds within the prescribed period provided under Section 112 and Section 204 ofthis Act. xxx! S20. 43, Digitelization of Bureau of Internat Revenue ‘Services.~ In order toimprove tho performance and efficiency in the dolivery of ite sorvices, the BIR shall adopt an integrated digitalization strategy by providing automated end-to-end eelutions for the benefit of taxpayers. For thia purpose, the BIR aboll: () Adopt an integrated and automated system for aepting and facilitating basis tax services euch as registration, Taxpayer ‘dontification Numbor isavance and validation, fling of returns, ‘submission of supporting documenta as attachments, and paymont, oftaxea.as well a fines, surcharges, or ponalties; () Immediately take measures to set up electronic and online systems that will make the meanaof exchanging data and information between offices, departments, eutiaorized agent banks and other pertinent units cecure, efficient, and seamless; (9 Streamline procedures by adopting automation and igitalizationof BIR cervices to minimize faceta face transactions, and tofaclitate efficient delivery of services to taxpayers; and a (@) Build up its technology capabilities, including the ‘creation of data centers, data repositories, basic messaging and electronic mal facilities, encryption systems and eyber-security systems, See. 44. Ease of Paying Toxes and Digitatization Roadmap. ~ The BIR shall develop an Enco of Paying Taxes OPT and digitalization roadmap that will provide for d programs and projects to be implemented to ensure ease of compliance of tar laws, rules and regulations, including but not limited to the adoption of simplified tax roturns, streamlining of taxprocosses, reduction of tax or documentary requirements, av Adigitalization of BIR sorvices as provided under Section 40 ci ths Act: Provided, That in developing this roadmap, the BIR. slvall prictitize taxpayers who azo considered as micro and eral! taxpayers for purposes of this Act in terms of streatalining tax procedures and decumentary requirements socording totaxpaye: size and capacity to comply: Provided, further, That the BIR shall ensure the accessibility of its various sorvices to differe taxpayers pasticularly micro and soll taxpayers e0.astoimprove taxcompliance, and enhance taxpayer convenience. ‘The BIR shall submit an annual reporton the OPT and tho digitalization roadmap to the Congressional Oversight Committee on the Comprehensive Tax Reform Program (COCCTRP) as provided under Section 200 of the NIRC, asamended, Suc. 45. Special Concessions for Certain Taxpayers, ~ ‘The following concoasions shall be made available to micro and small taxpayers for purposes cf this Act: (a) The Income Tax Return (ITR) required under Section 51 of the NIRC shall consist of a maximum of two (2) pages in paper form or electronic form; () A reduced rate often percent (10%) for civil penalties as provided under Section 248 ofthe NIRC, as amended;e ( A ity percent (60%) reduction on the interost rate imposed under Section 249 ofthe NIRC, ns.ame! (@) Aroduced fine of Five hundred pesos (P500) as penalty {for failure to file certain information returne as provided under Section 250 ofthe NIRC, as amended; and (@Areduced compromize penalty rato of at least ity percont (60%) for violations of Sections 113, 237, and 28 of the NIRC, assmended. S30. 48. Applicability of Data Privacy Principles. ~'The processing, recording, transmission and storage of all personal data under this Act ball be in accordance with Republic Act No. 10173, otherwise known as ths "Data Privacy Act of 2012", and othe: lawson disclosure of information to the public in adhorence to the principlee of teanaparency, legitimate purpose and propoctionality, S80. 47. Implementing Rules and Regulations.— Within ninoty (80) ealandar days from the offetivity of this Act, tho Secretary cf Finance, aftr dus consultation withthe Bureau Internal Revenue, and the private rector ehall promulgate the necestary ules and regulationa for its effective implomentation. Sr0. 48, Transitory Clouee. ~ Taxpayers are hereby given ‘six (@) months from the effectivity of the implomonting revenue rogulationa to comply with the amendments to Title TV oa the ‘Value-Added Tax and Title V on the Other Pereontage Taxes of the NIRC, as amended. S20, 49. Separability Clause.—Ifany provision of this Act is doclared unconstitutional, the remaining parts or provisions not affected thereby shall remain in full force and effect. Sto. 50, Repealing Clave. ~All lawa, decrees, executive orders, implementing rules and regulations, iasuances, oF any part thereofinconsistent with the provisions ofthis Actaredeemed repealed, amended or modified accordingly. 10:3) Ora JAN 10 2074 Corona ‘Sue. 51, Hifectivity, This Act hall take effect fifteen (15) ays.after its publication in the Official Gazette or ina newspaper of general circulation, Approved, AN MIGUELF.ZuBIRI GERDEvAND MARIN’ SMUALDEY President ofthe Senate Speaker of the House of Representatives ‘This Act, which is a consolidation of House Bill No. 41: ‘and Senate Bill No. 2224, was passed by the House of Representatives and the Senate of the Phi September 27, 2023. ReaiNaLo S, VeLasco Secretary General House of Representathves Approved: ‘JAN 0 5 2024 FERDINAND ett MARCOS IR. Presldgh of th Pili ‘Gilice of the Presid ALACARIANG RECORDS OFFICE CERTIFIER COPY W TTY, DBS! theese &, 1 NC, GARVIOA ECTOR IV Mh AUNT Tn W-& roy acts