REGISTRATION

REVENUE REGULATION NO. 7-2012

AMENDED CONSOLIDATED REVENUE

REGULATION ON PRIMARY REGISTRATION,
UPDATES AND CANCELLATION
DEFINITION OF TERMS
Primary Registration
The process by which a person, whether an individual, including
estates and trusts, or a corporation and other juridical entities, upon
application and full compliance with the registration requirements
prescribed in these Regulations, is registered with and consequently
included in the registration database of the Bureau of Internal
Revenue (BIR).

Two Scenarios may involve in Primary Registration:

1) TIN ISSUANCE AND REGISTRATION

2) PURELY TIN ISSUANCE
Secondary Registration
It shall pertain to subsequent registration activities after the issuance
of BIR Certificate of Registration (COR) relative to the printing and
issuance of official receipts/sales invoices; keeping/registering of books of
accounts and other accounting records; applying for certain accreditation
requirements and securing other applicable registration-related permits
Taxpayer Identification Number (TIN)
It shall pertain to the system-generated reference index number issued
and assigned by the BIR to each and every person registered in its
database.
“Filipino Overseas Contract Worker (OCW)/Overseas Filipino Worker
(OFW)” -
It refers to Filipino citizens employed in foreign countries, commonly
referred to as OFWs, who are physically present in a foreign country as a
consequence of their employment thereat.
Commencement of Business
In the case of pursuit of business or practice of profession, it shall
be reckoned from the day when the first sale transaction occurred or
within thirty (30) calendar days from the issuance of Mayor’s
Permit/Professional Tax Receipt (PTR) by LGU, or Certificate of
Registration issued by the Securities and Exchange Commission (SEC),
whichever comes earlier.

Head Office (HO)

It refers to the declared specific or identifiable principal place/head
office of business as stated in the Articles of Incorporation/Articles of
Partnership/Articles of Cooperation/DTI Certificate of Registration, as
the case may be, or, in the absence thereof, the place where the
complete books of accounts are kept.
Branch
A separate or distinct establishment or place of business where
sales transactions are conducted independently from the HO.
It shall also include the following:
i. Sales outlet or establishment situated in another location/address other than
at the HO;
ii. Facility with sales activity;
iii. Real properties for lease including car parks with Administrative Office shall be
considered as a branch
iv. For Public Transport Operators with more than one (1) franchise, each
additional franchise/Certificate of Public Convenience (CPC) which a
transportation operator owns or operates, regardless of the number of units
under each franchise/CPC shall be considered as a branch. For private
transport operators, the operator shall register each garage with administrative
office as a branch;
v. Toll Way Company operating more than one “hi-way/road/expressway", shall
register each succeeding “hi-way/road/expressway” as a branch.
vi. For National Government Agencies (NGAs) and its instrumentalities where the
source of fund is not coming from the Department of Budget and Management
(DBM) which requires the payment of other internal revenue taxes, a separate
branch code in the TIN shall be assigned for each fund.
vii. Other separate or distinct establishment/s which conduct sales transactions
independent of the HO.

Facility- may include but not limited to place of production,

showroom, warehouse, storage place, garage, bus terminal, or real
property for lease with no sales activity.

Administrative Office- shall refer to an office where records of

sales and/or cash collections are kept which can be registered either
as HO or branch.

Principal or Main employer- shall refer to the employer to whom

an employee renders his services for most of his time during the
taxable year.
Mixed Income Earner– shall refer to a compensation-earner who
at the same time is engaged in business or practice of profession.

Marginal Income Earner- shall refer to those individual whose

business do not realize gross sales or receipts exceeding P 100,000 in
any 12-month period.

Self-employed Individual– one who may either be a single

proprietor engaged in business or in the practice of his profession.

Updates– shall mean the process by which the information

previously supplied during the Primary Registration process are
changed or modified either upon the taxpayer’s or BIR’s initiative. It
shall include end dating the registered tax types of a business of an
individual on the occasion of such individual’s cancellation of his or
her business registration or during temporary non-operations.
Transfer of Registration – shall mean the process of transmitting
the records of a registered taxpayer from one BIR district office to
another where the new registered address falls under the jurisdiction
of a BIR district office other than where it is currently registered .

Cancellation - shall mean the process by which the information

pertaining to Primary Registration of a taxpayer is tagged as
“cancelled” but nevertheless remains as part of the BIR’s registration
database.

End dating – refer to the process of indicating in the system the end
of the taxable period or date of the last return period for a particular
registered form type/tax type for which a return is required to be
filed.
Stop Filer cases – shall refer to system created cases when a
taxpayer fails to file a return for a required tax type for a taxable
period which is required to be filed regularly.

Tagging – shall mean the process by which the business registration

information of a taxpayer is tagged as “Inactive” but nonetheless
remains part of the BIR’s registration database.

Inactive - shall refer to the status of the business of any of the

following:
a. A non-individual taxpayer that has notified the BIR district office of
the temporary cessation of its business operations;
b. A taxpayer that has stopped filing all its tax returns for the last two
(2) years, which requires issuance of a notice of investigation;
 c. A newly registered taxpayer who fails to file the
required tax returns/declarations due for the applicable
initial quarter;
d. A taxpayer that may be identified as such by the CIR
in a separate revenue issuance.

Ceased/Dissolved – shall refer to the status of a registered

taxpayer who has completed the requirements for cancellation of
registration prior to the termination of audit.
 POLICIES OF THE APPLICATION AND ISSUANCE
OF TAXPAYER IDENTIFICATION NUMBER (TIN)
1. GENERAL RULES IN THE APPLICATION AND
ISSUANCE OF TIN
a. The TIN, once assigned to a particular taxpayer, is
nontransferable and there shall be no instance where two or
several taxpayers are holders of the same TIN;
b. Only one TIN shall be assigned to the taxpayer, regardless of
variety of transactions. Any person who shall secure more than
one TIN shall subject to the penalty prescribed under Section
15 of these Regulations.
c. The Estate of a deceased person or a Trust under an
irrevocable trust agreement shall be issued a TIN separate and
distrint from the TIN of the deceased person and/or trustee.
d. Minors who are earning and/or who under the circumstances
prescribed under Executive Order (EO) No. 98, series of 1998 shall be
supplied with TIN;
e. Non-Resident Aliens Not Engaged in Trade of Business (NRANETB) or
Non-Resident Foreign Corporations (NRFC) shall be issued TINs for
purposes of withholding taxes on their income from sources within the
Philippines.
f. Branches of identified Large Taxpayer shall be registered at the Large
Taxpayers Service (LTS) where the Home Office (HO) is registered;
g. All incorporators of corporations/associations (stock and non-
stock),partners of partnerships and members of cooperatives must have
TINs.
 2. PERSONS WHO ARE REQUIRED TO OR MAY
SECURE TIN

a. Every person subject to any national internal revenue tax.

b. Any person who, although exempt from the imposition of the taxes
imposed under the Code, as amended, is nevertheless required to
withhold taxes on account of income payments made to taxable
individuals or entities;
c. Pursuant to Section 236(I) of the NIRC, as amended, any person
required under the authority of said Code, as amended, to make, render
or file a return, statement or other document, whereby he is required to
indicate his TIN in such return, statement or document filed with the
BIR for his proper identification for tax purposes, and which he shall
indicate in certain documents, such as, but not limited to the following:
• Sugar quedans, refined sugar release order or similar instruments to reflect the TIN
of the owner or seller of the sugar;
• Domestic bills of lading to reflect the TINs of the owner/s of the ships
and consignees of commercial value shipment;
• Documents to be registered with Registry of Deeds or Assessor’s
Office, to reflect the TINs of persons who are parties to the real
property transaction;
• Registration certificates of transportation equipment by land, sea or
air, to reflect the TINs of transport equipment owners; Documents to
be filed or registered with the SEC;
• Building construction permits to reflect the TINs of owners and
contractors of buildings and civil works;
• Application to open bank account or loan with banks, financial
institutions and other financial intermediaries;
• Application for Mayor’s Permit;
• Other documents such as the following;
1) Official receipts, invoices and vouchers required to be issued by
persons who are not engaged in business, non-government
organizations, including non-stock, non-profit organizations or
foundations;
2) Application for franchise from LTFRB, MARINA and other
government regulatory authorities;
3) Application for accreditation with the DepEd, CHED and other
agencies;
4) Application for Tax Exemption and registration as Donee
institution;
5) Application for Tax Clearance from internal tax liabilities;
6) Application for business or travel passport with the DFA or persons
who are gainfully employed.
7) Application for Community Tax Certificate with a LGU of persons
who are gainfully employed;
8 ) Bid forms for government contracts;
9) Such other documents similar to any of the above or as hereafter
are required.

d. Pursuant to EO 98, persons whether natural or juridical, dealing

with all government agencies and instrumentalities are thereby
required to incorporate their TIN.
3. SECURING OF TIN
Application and issuance of TIN can be made through:
 BIR district office
 e- Reg facility in BIR website – applicants shall complete their
registration with the BIR district office but shall no longer required
to fill out the forms for “Application for Registration”. Instead, a
printout of the “System Confirmation Page” and the filled out on-line
“BIR Form 1901” shall be submitted to the concerned BIR district
office.
 Securities and Exchange Commission (SEC)- the “Application for
Registration” (BIR Form 1903) shall be completed and submitted to
the BIR district office which has jurisdiction over its principal place
of business.
 Other facilities/agencies
 4. REGISTRATION OF BUSINESS TAXPAYER

The submission of a Mayor’s Permit prior to

registration is mandatory. Provided, however, that if it is
still in process with the concerned LGU, a duly stamped
“ Received” application for Mayor’s Permit will
temporarily suffice to qualify him/her/it for registration,
provided, further, that a duly approved permit shall be
submitted within thirty (30) calendar days from date of
registration.
 Business taxpayers and those required to issue receipts, shall
submit the following requirements to complete their registration:
1. Application for Authority to print (ATP) Receipts/ Invoices;
2. Registration of Manual Books of Accounts; or
3. Application for Permit to use Computerized Accounting
System(CAS) or components thereof, if applicable;
4. Application for Permit to use Loose Leaf Accounting Records, if
applicable;
5. Application for Permit to Use CRM/POS Machine, and the like,
if applicable;
6. Permit to Operate for taxpayers engaged in
activities/transactions involving products subject to excise
taxes.
 5. ISSUANCE OF TIN

Issuance of TIN Card for the first time shall be free of charge subject to
the provision of Section 15 of the Regulations. The same must be processed
and released to the applicant within the same day upon the submission to
the BIR district office of the complete documentary requirements as
prescribed in these Regulations after the cut-off of 1 p.m.
The TIN Card shall contain the following information:
• Serial number
• Registered Name of the applicant;
• TIN
• Address
• Birth date or date of Incorporation;
• Date of Issue
• Signature of the CIR
• Signature of the TIN owner or duly authorized representative
• A box shall be provided for picture(if individual)
The address to be indicated on the TIN cards shall be as follows:
 For Employees/ONETT/ Applicant under EO 98, series of 1998- the
residential address of the applicant.
 For the Individuals engaged in business/practice of profession
a. Head office (TIN with branch code 0000) – residential address of
the individual as found in the Integrated Tax System (ITS).
b. Branch- business address of registered branch as found in the ITS.
For Non-Individuals
a. Head Office- business address as found in the ITS
b. Branch- business address of registered branch as found in the ITS.
 REGISTRATION OF BUSINESS, EMPLOYMENT AND
OTHER UNDERTAKINGS
Individuals engaged in business or practice of profession and
juridical entities, unless otherwise exempted, shall:
1) Pay ARF, if applicable:
2) Secure COR;
3) Proceed to Secondary Registration;
4) Get “Ask for Receipt” notice, if applicable, and
5) Attend the taxpayer’s initial briefing to be conducted by the BIR
district office for new registrants in order to apprise them of their
rights and duties/responsibilities.
 PRESCRIBED PERIODS TO COMPLETE PRIMARY
REGISTRATION
Every person subject to any internal revenue tax to be filed/paid periodically
shall complete its registration with the BIR as follows:
I. On or before the commencement of business- Self-employed individuals,
estates and trusts, corporations and their branches, if any.
II. Before payment of any tax due- Corporations (Taxable or Non-taxable)/
ONETT
III. Before or upon filing of any applicable tax return, statement or declaration
as required by the Code, as amended- Partnerships, Associations,
Cooperatives, Government Agencies and Instrumentalities (GAIs)
IV. Within ten (10) days from date of employment- Employees
V. Application under EO 98, series of 1998- Individuals required to secure
TIN for their transactions with government agencies shall apply for their
TIN from any BIR district office at any time before they complete their
transaction with such government agency.
 CERTIFICATE OF REGISTRATION (COR)

1. Persons Entitled to the Issuance of COR

The COR shall only be issued to individuals engaged in business or
practice of profession and to juridical persons(whether taxable or
exempt) by the BIR district office concerned upon compliance with the
requirements for registration subject to the provisions of Section 4(4)
hereof.
2. Persons not Covered by the Issuance of COR
Employees, ONETT taxpayers and/or persons who have secured a
TIN under EO 98, series of 1998.
3. Information Contained in the COR - The COR shall contain
information pertinent but not limited to the following:
i. Name of the taxpayer
ii. Registered/Residence Address, whichever is applicable
iii. Business/Trade Name
iv. Taxpayer Type
v. RDO Code
vi. TIN including the Branch Code extension number
vii. Date of registration and generation/issuance of COR
viii. Particular Tax Types
ix. Particular Tax Incentives granted and the line of business for
which the tax incentive has been granted and the period covered
such tax incentive, if applicable
 x. Registration Certificate Number with the SEC, DTI, Cooperative
Development Authority (CDA), Board of Investment(BOI), Subic Bay
Metropolitan Authority (SBMA), Bases Conversion and Development
Authority (BCDA), or any other applicable government agency under
which the entity/association has accredited itself in order to avail of
certain tax incentives or preferential tax rates
xi. Line of Business and its Philippine Standard Industry Code (PSIC)
including the Philippine Central Product Classification(PCPC).
xii. Name of approving Revenue District Officer (RDO)
xiii. Date of signing /approval.
4. Issuance of COR to HO, Branch and Facility
Subject to the provisions of Section 4(4) hereof, each HO, and /or
branch shall be issued with COR within the period/time prescribed
under the existing “BIR Citizens Charter”. The taxpayer may opt to
request for delivery of his COR via courier subject to the payment of
fees to be prescribed in a separate RMO.
In case of a facility as defined in these Regulations, the same shall
be issued a Certificate of Registration of Facility (BIR Form 2303-F).
The policies on the issuance of the Form 2303-F shall be prescribed in
a separate RMO.
5. Posting of COR
Original COR and duly validated ARF Return at his/its principal
place of business and at each branch and/or facility in a way that is
clearly and easily visible to the public.
 ANNUAL REGISTRATION FEE (ARF)
An ARF in the amount of Five Hundred Pesos (P500.00) for every
HO and/or branch shall be paid upon registration and every year
thereafter on or before January 31.
However, the following shall be exempt from the imposition of ARF:
1. Cooperatives duly registers with the CDA
2. Individual residents earning purely compensation income
3. OCWs/OFWs
4. Marginal Income Earners
5. GAIs, in the discharge of their government functions
6. LGUS, in the discharge of their government functions
7. Tax exempt corporations
8. Non-stock/non-profit organizations not engaged in business
9. Persons subject to tax under one-time transactions
10. Persons registered under EO 98, series of 1998
11. Facility/ies where no sales transactions occur
The ARF shall be paid to an Authorized Agent Bank(AAB) located
within the BIR district office or to the Revenue Collection Officer(RCO)
or duly authorized Treasurer of the City or Municipality where each
place of business or branch is registered, or thru the BIR-accredited
payment facilities such as Electronic Filing and Payment System
(EFPS) and G-Cash.
The ARF shall be paid in full amount. Registration occurring during
the interim period of the initial year shall be imposed with the same
full amount of P 500.00 as ARF.
 REQUIREMENT FOR THE REGISTRATION OF
EACH TYPE OF INTERNAL REVENUE TAX
Registration of tax types by a business entity consists of but not limited to
the following internal revenue taxes/fees:

 Income Tax
 VAT and /or percentage tax
 Withholding tax on compensation
 Creditable withholding tax at source
Final withholding tax
 Documentary Stamp Tax
 Excise Tax
 Annual Registration Fee
 With respect to business entities with branch/es, the rules on
the registration of tax types as provided hereunder shall be observed:
1) Registration shall be with the HO only
i. Income Tax
ii. VAT
2) Registration with the HO and/or branches
iii. Percentage tax
iv. Withholding tax on compensation
v. Creditable withholding tax at source on certain income payments
vi. Final withholding tax on certain income payments
vii. Documentary stamp tax
viii. Excise tax
3) Registration with both Head Office and branches
ARF to be paid by the HO and by all branches as defined in
Section 3 (7) and (8) hereof.
 TRANSFER OF REGISTRATION
1. Transfer of Registration of NON-BUSINESS individuals
(EO 98, series of 1998 or ONETT)
2. Transfer of Registration of Local Employees
i. Individuals Earning Purely Compensation Income
ii. Transfer of Employees of Transferring Employers
iii. Registered Employee Who Intends to Engage in Business or
Practice of Profession
3. Transfer of Taxpayers Engaged in Business or Practice
of Profession (Individual / Non-Individual
 Branches / Facilities
 Head Office (HO)
The following policies are to be observed with respect to the transfer of
registration of HO:
1. As a general rule, transfer of HO from one BIR district office to
another is discouraged. Only transfers by a HO to a bigger Office
or Business Establishment/Store can be allowed.
2. A taxpayer requesting for transfer of his/her/its HO should not be
allowed to transfer to a BIR district office where his/her/its previous
RDO/ARDO is currently assigned.
3. The taxpayer requesting for transfer shall file the proper form to the old
BIR district office together with the prescribed attachments.
4. The new BIR district office shall be furnished by the taxpayer with a
copy of the update form duly received by the old BIR district office.
5. The transfer of HO shall be effective upon approval by the old BIR
district office which should not exceed the ten (10) working days
prescribed period from the date of complete submission of the
required documents.
6. The request for transfer shall be processed by the old BIR district office
based on the supporting documents submitted by the transferring taxpayer.
4. Certificate of Registration (COR)/Authority to Print (ATP) – The
new BIR district office shall issue the COR immediately after the transfer of
the taxpayer’s registration by the old BIR district office.
5. Filing of Tax Returns – The filing of tax returns and payment of taxes
to the new BIR district office shall commence following the issuance of the
new COR.
OTHER REGISTRATION UPDATES
• Regular Updates
• Conversion of taxpayer status from Active to Inactive
CANCELLATION OF REGISTRATION.
1. Death of individual;
2. Full settlement of the tax liabilities of the estate;
3. Discovery of a taxpayer having multiple TINs; and
4. Dissolution, merger or consolidation of juridical person.
 CERTIFICATION FEE

Any request for certification that may be requested by a

taxpayer from the BIR district office where he is registered on
matters relating to his registration shall be charged with a fee in
an amount not exceeding one hundred pesos (P100.00), in
addition to the documentary stamp tax imposed under Section
188 of the Code, as amended, subject to change upon approval of
the CIR thru a subsequent issuance.
BIR REGISTRATION FORMS
All existing BIR registration forms shall be enhanced and updated
with the view of simplifying the information fields and standardizing
the data/encoding format and/or abbreviations for easy and effective
upload to the Registration System Database.
PENALTY PROVISION.
The following violations related to primary registration shall be
penalized as follows:
1. Failure to register (those who are found unregistered during TCVD
– Subject to the penalties under prevailing revenue issuances;
2. Late Registration (those who are voluntary registering, but beyond
the prescribed period as indicated in these Regulations) – Compromise
penalty of P1,000.00, in addition to the unpaid ARF and penalties due
thereon for every year that the business is in operation
3. Late payment of ARF – Subject to 25% surcharge and 20%
interest per annum and P200.00 penalty;
4. Failure to register a branch or facility – Subject to penalty of
P1,000.00 per unregistered branch or facility (Section 258 of the
NIRC, as amended);
5. Acquisition of Multiple TINs – Aside from the criminal
liability that may be imposed, P1,000.00 for every TIN acquired in
excess of one;
6. Failure to and/or erroneous supply of information –
P1,000.00 for every error/omission, but not to exceed P25,000.00
(Section 255 of the NIRC, as amended); and
7. Any violation of the provisions of these Regulations shall be
subject to penalties provided in Sections 254 and 275, and other
pertinent provisions of the Code, as amended.
TAX COMPLIANCE VERIFICATION
DRIVE (TCVD)
REVENUE MEMORANDUM ORDER 9-2006

PRESCRIBING THE GUIDELINES AND PROCEDURES

IN THE CONDUCT OF TAX COMPLIANCE
VERIFICATION DRIVE (TCVD)
 DEFINITION OF TERMS
Host RDO – is the Revenue District Office that has jurisdiction over
the specific areas chosen for visitation.

Target Area – each Revenue District Office will survey their area of
responsibility to pinpoint places with high concentration of business
establishments where a large number appears to be un-registered or
with very low tax compliance.

Tax Mapping Kit – documents and tools that a Mobile RO should

be equipped with during TCVD and shall include the following:
a. Mobile device, if applicable;
b. “Ask for Receipt” poster;
c. BIR Registration Forms;
d. Revised Taxpayer’s Guide;
e. Apprehension Slips;
f. Revenue Regional Special Order (RRSO) listing the
participating authorized Revenue Officers;
g. Mission Order;
h. Taxpayer Information Sheet & Violations Checklist;
i. Tax Mapping Sticker; and
j. Other documents as may be required.
MROS (Mobile Revenue Officers System) – is a system aimed at
providing the Revenue Officers with a wireless mobile device equipped
with the facility to access the central database for recording and tracking
of findings on taxpayer’s compliance during the conduct of tax mapping
operation.

Manual TCVD - conventional way of conducting tax mapping operation

without the use of a mobile device.
 GUIDELINES AND PROCEDURES
MANUAL TAX COMPLIANCE VERIFICATION DRIVE (TCVD)

PREPARATION STAGE FOR TCVD CONDUCT

Regional Director (RD) shall:
1. Issue Revenue Region Special Order (RRSO), identifying all Group
Supervisors and Revenue Officers who will participate in the
conduct of visitation within specific areas identified by the host
RDO;
2. Issue a Mission Order authorizing specific Revenue Officers from
different RDOs within the Region who compose the Tax Mapping
Team to tax map the specified area on the specified date/time.
3. Set-up a Command Center which shall be the central base of the
Tax Mapping Teams.
• The Command Center shall be equipped with the following:
a. Set-up of computers with internet capability; and
b. Tax Mapping Kits
• Assign official(s) who shall man the Command Center preferably
from the Host RDO;
4. Conduct briefing, issue tax mapping kit and provide
sketch/relevant data on areas to be visited together with other
concerned officials.
Revenue District Office (RDO) shall:
1. Survey their area of responsibility to pin point places with high
concentration of business establishments where a large number of
taxpayers appear to be unregistered or with very low tax compliance;
2. Prepare a map of target areas within their district and divide them
into zones corresponding to the number of participating RDOs to which
a specified zone will be assigned to be tax mapped to be submitted to
the Regional Director for further evaluation
3. Gather data/information for evaluation of all taxable persons and
entities within the zone assigned.
Host Revenue District Office (Host RDO) shall:
1. Inform and coordinate with the media and Local Government Officials
including Local Chief of Police, concerning the operational activity that
will be undertaken in the area.
2. Coordinate and identify the Revenue Officers (RO) and Group
Supervisors (GS) who will participate in the conduct of visitation.
 ACTUAL TCVD CONDUCT
General Conduct
Revenue Officer (RO) shall:
Observe the following guidelines and procedures in the actual tax
mapping activities:
1. Good grooming.
2. Courtesy
3.Proper Identification.
4. Explain to the taxpayer the objectives of the Tax Mapping
Operations as clearly and concisely as possible.
5. Inform the taxpayer or officer-in-charge that he/she has been
authorized to conduct an inspection of the taxpayer’s premises to
evaluate their compliance with laws and regulation.
6. Politely but firmly decline taxpayer’s request not to report incidence
of non-compliance in exchange for something.
7. Inform the taxpayer of the consequences of any violations observed
in taxpayer’s establishment and cite the necessary provisions of law, if
necessary, to support the RO’s statement.
8. Commend the taxpayer and encourage him/her to continue in
faithfully complying with internal revenue laws if RO did not observe
any incidence of non-compliance in a particular establishment.
9. Before leaving the establishment, thank the taxpayer for his/her
time and encourage him/her to continue paying his/her taxes.
Group Supervisors shall:
a. Guide and supervise all Revenue Officers under his group;
and
b. Lead the team assigned to him and ensure that the team reports all
Tax Mapping Team shall:
a. Issue a “Reminder to All Business Establishments”.
b. Verify if the establishment is registered or not
c. Observe and verify if the establishment maintains duly authorized
Receipts or Sales/Commercial Invoices.
d. Verify if the use of CRM/POS/CAS is duly authorized and determine
if there are violations in the use of CRM/POS/CAS.
e. Verify if the establishment is maintaining duly authorized books of
accounts and recorded transactions are updated and note findings in
the TIS;
f. If warranted, issue an Apprehension Slip to the taxpayer for offenses
penalized relative to unauthorized use and issuance of receipt, sales
and commercial invoices and unauthorized use of CRM/POS/CAS.
In the apprehension of sales or commercial invoices and/or receipts
and books of accounts, the Tax Mapping Team shall:
1. Inform the taxpayer of the violation committed and basis for
apprehension;
2. Issue Apprehension Slip signed by the Revenue District Officer and
noted by the Group Supervisor;
3. Take physical possession of unauthorized books of accounts,
commercial invoices and/or receipts, invoice or receipt with material
discrepancies between original and duplicate copies, or identical sets of
invoices or receipts even if duly registered.
4. Issue Bureau Printed Receipts (BPR) to taxpayers who were found to
be using unregistered or unauthorized invoices or receipts including
those with unregistered or unauthorized CRM or POS.
In the apprehension of CRM/POS, the Tax Mapping team shall:
1. Inform the taxpayer of the violation committed and basis for
apprehension;
2. Issue Apprehension slip signed by the Revenue Officer and noted by
the Group Supervisor;
3. Seal the CRM/POS with tape to be witnessed and signed by the
taxpayer or taxpayer’s representative, the Revenue Officer and the
Group Supervisor or another Revenue Officer in the absence of the
Group Supervisor.
4. Bring apprehended CRM/POS to assigned vehicle for that purpose
for delivery to custodian in the office of the Regional Director .
g. List down all violations in Violations Checklist (Annex "G”) and
accomplish TIS in duplicate, one copy of each to be given to the
taxpayer who shall be required to acknowledge receipt thereof and
the other copy to be attached to the List of Taxpayers
Visited/Apprehended under Tax Mapping Operation (Annex “H”) to
be submitted to the Host RDO;
h. Before leaving the tax mapped establishment, the Tax Mapping
Team shall post a sticker as proof that the establishment has been
tax mapped with color coding scheme as follows:
1st Visit - Yellow
2nd Visit - Red
3rd Visit - Green
 POST TCVD CONDUCT
Tax Mapping Team shall:
Prepare and submit reports on the results of Tax Mapping
Operations together with TIS and Apprehension Slips attached
thereto, to the Taxpayer Service Section {TSS} of the Host RDO for
appropriate action;
Host RDO shall:
Taxpayer Service Section (TSS) shall:
a. Receive reports on the results of Tax Mapping Operations together
with TIS and Apprehension Slips from the Tax Mappings Teams who
conducted the operation;
b. Collate findings for basis of actions to be taken;
c. Forward those taxpayers who had been issued Violations Checklist
and/or Apprehension Slip to the Assessment Unit for evaluation;
d. Submit to the Taxpayer Assistance Unit (TAU) of the Regional Office
for review and consolidation the following reports:
• List of Taxpayers Visited/Apprehended under Tax Mapping
Operation ;
• List and Status of Unregistered Taxpayers Discovered thru Tax
Mapping Operation;
• List of Taxpayers Visited with Violation;
• Report of Collections from Tax Mapping Operation;
• List of Taxpayers’ Visited whose Cases were Filed in Court;
Assessment Unit shall:
a. Receive from the Taxpayer Service Section those taxpayers who have been
issued Violations Checklist and/or Apprehension Slips and evaluate
explanation thereof;
b. Forward to Revenue Officer concerned for issuance of Second Opportunity
Notice (SON), if necessary, after evaluation of those taxpayers who have been
issued Violations Checklists and/or Apprehension Slips;
c. Receive report of findings from Revenue Officers then forward the
docket/case to the Legal Division recommending that appropriate
civil/criminal action be initiated if taxpayer fails or refuses to respond to the
Last Opportunity Notice (LON).
Revenue Officer (RO) shall:
a. Prepare and serve Second Opportunity Notice (SON), if the taxpayer failed
to settle the penalty or to explain the reasons why no penalty should be
imposed, within five (5) days from the receipt of the letter;
b. In the event that the taxpayer fails or refuses to respond to the follow-up
letter (SON) or if as a result of preliminary conference it was determined that
the explanation of the taxpayer is without any factual or legal basis, prepare
and serve Last Opportunity Notice (LON) after the lapse of the five-day period
from the date the SON was served to the taxpayer;
c. Prepare and submit a report of findings, together with the whole docket of
the case and a copy of the letter bearing the acknowledgement of receipt by
the taxpayer concerned, to the Assessment Unit within one (1) day following
the date of service of LON.
Legal Division shall:
1. Receive docket/case of taxpayers from the Assessment Unit of the Host RDO
within two (2) days following the expiration of the five-day period granted to
the taxpayer together with the report of findings of the RO and a copy of the
letter bearing the acknowledgement of receipt by the taxpayer.
2. If the taxpayer pays, return the docket to the RDO within two (2) days for
evaluation and transmittal to the Regional Evaluation Committee (REC), if
proper;
3. If the taxpayer fails or refuses to pay the suggested compromise penalty:
a. Prepare Complaint based on the report of the Revenue Officer;
b. Forward the prepared Complaint to the Regional Director for his approval and
signature;
c. File the Complaint together with the whole docket of the case to the
Prosecutor’s Office;
Tax Assistance Unit shall:
1. Receive reports from Host RDOs regarding unusual events and incidents in
the conduct of TCVD that would require major policy decision;
2. Consolidate reports on number one (1) and submit to Taxpayer Assistance
Service (TAS) thru Taxpayer Service Programs & Monitoring Division
(TSPMD) for evaluation; and
3. Review, consolidate and submit to Taxpayer Assistance Service (TAS) thru
Taxpayer Service Programs and Monitoring Division (TSPMD) at
tspmd_tas@bir.gov.ph_x0000_ within 20 days after the end of the Tax
Mapping Operation the following reports:
4.
a. List of Taxpayers Visited/Apprehended under Tax Mapping Operation
b. List and Status of Unregistered Taxpayers Discovered thru Tax Mapping
Operation
c. List of Taxpayers Visited with Violation
d. Report of Collections from Tax Mapping Operation
e. List of Taxpayers’ Visited whose Cases were Filed in Court and
f. Summary of TCVD Report for the Month.
 TAX COMPLIANCE VERIFICATION DRIVE (TCVD)
THROUGH THE USE OF MOBILE REVENUE OFFICERS
SYSTEM (MROS)
1. Policies on the use of MROS
a. The Tax Mapping Team shall conduct Tax Compliance Verification
Drive through the aid of a mobile device;
b. The Tax Mapping Team shall be provided with one (1) mobile
device for every team which shall be the responsibility of the Group
Supervisor;
c. The mobile device shall serve as aid for the tax mapping team in
verifying taxpayer’s TIN (if registered in ITS) and encoding the results
of tax mapping details as well as other related information by
accessing the Taxpayers’ Information Sheet (TIS), Violations, Authority
to Print (ATP) & other modules available to RO.
d. The tax mapping team shall encode details of tax mapping through
the use of the mobile device, however they shall still be required to fill-
up Taxpayers’ Information Sheet (TIS) manually in duplicate to be
signed by the taxpayer/representative and the Revenue Officer/Group
Supervisor who conducted the tax mapping, duplicate copy to be given
to the taxpayer/representative.
e. The following are the available features of the Mobile Revenue
Officers System (MROS):
 E-mail
TIN Verification
Taxpayer Information Sheet (TIS)
Violations
Authority to Print
Cash Register Machine/Point of Sales (CRM/POS)
E-registration
Case Monitoring System (CMS)
Collection & Bank Reconciliation (CBR)
Reports
Other functionalities as may be available upon identification.
f. There shall be two modes of saving a TIS record using MROS:
Save Draft - keeps the record in the device (to the server of the
mobile device) to allow further editing;
Save and Commit - keeps the record by transmitting it directly to
the main TCVD server (National Office).
g. Only the Regional Directors, Assistant Commissioners, Deputy
Commissioners and Commissioner of Internal Revenue shall have the
access to edit committed TIS records;
h. ATP records shall follow existing procedures in the purging of
records in ITS;
i. Group Supervisors and Revenue Officers shall be given a maximum
of five (5) working days to encode the Taxpayer Information Sheet
(TIS)/Violations Checklist for all the establishments visited after a
Tax Mapping Operation;
j. For every TIS/Violations Checklist encoded for the day, ROs shall
ensure that all details have been filled up completely and accurately.
k. A Mobile Revenue Officers System (MROS) Memorandum for
corrections on previously encoded results of Tax Mapping Operation
shall be filled up by Group Supervisors/Revenue Officers addressed
to their respective Regional Directors copy furnished the office of the
Assistant Commissioner – Information Systems Development Service
for review and edit purposes;
l. All transactions made by the RO who logged in the BIR application
shall be his accountability.
m. ATP, CMS and CBR Modules shall be made available anytime
except when database batching occurs. The message “Database is
currently batching” shall be displayed during these times;
n. In the ATP verification module, the search parameters shall be as
follows:
RDC Codes
QCY . Starts with 4AU + 10 digit sequence number
RR7 Starts with 3AU + 10 digit sequence number
CEBU Starts with 2AU + 10 digit sequence number
MAKATI Starts with 9AU + 10 digit sequence number
MANILA Starts with 1AU + 10 digit sequence number
LTD Starts with 8AU + 10 digit sequence number
o. In case of technical difficulties or Over-the-Air (OTA) installations for
MROS, all mobile device users shall be notified through e-mail, the
server downtime (specifying the date, time and reason);
p. In the E-registration module, an e-mail shall be sent to the mobile
user indicating the successful or unsuccessful registrants after seeing
the message “Application is successfully submitted.”
q. The official standard format for permit numbers to be used for all
Cash Register Machine (CRM)/Point of Sale (POS) shall be MMYY-
RDO#-5 digit Sequential Number-Branch Code
r. Different access levels to various modules of the BIR application
shall be given to the Commissioner, Deputy Commissioners, Assistant
Commissioners, Directors, Assistant Directors, Revenue District
Officers, Assistant Revenue District Officers, Group Supervisors, and
Revenue Officers.
TAXPAYER SERVICE PROGRAMS AND
MONITORING DIVISION (TSPMD)
A. Receive reports from Tax Assistance Unit for possible enhancement
of procedures and for the following Key Performance Indicators (KPIs):
1. Actual Visited (registered)
Target Visited (registered)

2. New Registrants based on Tax Mapping

Unregistered Taxpayers based on Tax Mapping

3. Actual Collection from Tax Mapping

Estimated Collection from Penalties based on Tax Mapping
4. Number of Cases Filed in Court
Number of Taxpayers w/ Violation who did not Settle Corresponding
Penalties

5. Number of Taxpayers Encoded (TIS Module)

Actual No. of TP Visited

6. No. of Days (5 Days) Allotted to Encode All Taxpayers Visited

No. of Days Utilized to Encode Actual No. of Taxpayers Visited
B. Evaluate reports submitted by TAU of Region for monitoring of
KPIs.
C. Report to Management Committee (MANCOM) through Assistant
Commissioner – Taxpayer Assistance Service (ACIR-TAS) results of
KPIs.
COMPROMISE
PENALTIES
REVENUE MEMORANDUM ORDER NO. 7-2015

The Revised Consolidated Schedule of

Compromise Penalties for Violations of the
National Internal Revenue Code
Guidelines and Instructions:
1. The internal revenue officers concerned shall apply the
Revised Schedule of Compromise Penalties to ensure uniformity of
action.
2. Cases involving fraud shall be referred to the concerned
Division having jurisdiction over the case, for the institution of
the corresponding criminal action.
3. In no case shall the compromise penalty differ in amount
from those specified in the aforementioned Schedule, except
when duly approved by the Commissioner or concerned Deputy
Commissioner, or in proper cases, by the Regional Directors.
4. Although all amounts of compromise penalties incident to
violations shall be itemized in the assessment notice and/or
demand letter, the same should not form part of assessment
notice that reflects deficiency basic tax, surcharge and interest
but should appear in a separate assessment notice/demand
letter as the amount suggested to the taxpayer to pay in lieu
of criminal prosecution.
5. Since compromise penalties are only amounts suggested in
settlement of criminal liability, and may not therefore be
imposed or exacted on the taxpayer, the violation shall be
referred to the appropriate office for criminal action in the event
that a taxpayer refuses to pay the suggested compromise
penalty.
6. The schedule of compromise penalties herein prescribed shall
not prevent the Commissioner or his duly authorized
representative from accepting a compromise amount higher than
what is provided hereof. A compromise offer lower than the
prescribed amount may be accepted after approval by the
Commissioner of Internal Revenue or the concerned Deputy
Commissioner/ Assistant Commissioner/ Regional Director.”
(Annex A)
INVENTORY TAKING
REVENUE MEMORANDUM ORDER NO.
40-2009

Prescribing the Guidelines and Procedures

in the Observation of Inventory Taking
of Goods for Purposes of Determining the
2009 Ending Inventory
BACKGROUND

Inventories are major components in determining the

cost of goods sold and any inaccurate reporting of this
account will result to distortion of taxable income. Thus,
we need to ensure that taxpayers have accurately reported
their inventories as of the end of the taxpayers’ accounting
period. The best way to ensure that the inventories are
properly reported by taxpayers is for our Revenue Officers
(ROs) to be present during the conduct of the annual
inventory-taking.
Policies and Procedures:
1. RDO shall prepare a list of taxpayers whose peso value of
ending inventory is 50% or more of its declared sales for the
same year, except dealers of automobiles, excise taxpayers and
taxpayers maintaining fast-moving items/goods.
2. Upon receipt of the approved list from the Regional Director,
the Revenue District Officer shall immediately advise the
concerned taxpayer that representatives from the RDO having
jurisdiction of the place/premises where his inventory of goods for
sale or for use in business are kept must be present to observe
and witness the conduct of the annual inventory-taking.
3. In case there are places/premises where inventories of goods
are kept that are located outside the RDO having jurisdiction of
the head office, the Home RDO shall inform the RDO having
jurisdiction over the place/premises where inventories of goods are
kept of the scheduled inventory taking and request its
participation.
4. Mission Orders authorizing the ROs to witness the inventory-
taking shall be prepared by the Revenue District Officer for
signature of the Regional Director and to be distributed as
follows:
Original to the ROs assigned to witness the inventory taking
Duplicate to be furnished to the taxpayer
Triplicate to be duly acknowledged by the taxpayer or his

authorized representative
Quadruplicate file copy of the RDO

5. Depending on the size of inventory kept by the taxpayer, the

Revenue District Officer shall assign ROs from the Assessment
Section to observe and witness the conduct of annual inventory-
taking.
6. The ROs must perform the following:
 Obtain from the taxpayer a list of all accountable forms related
to inventories ;
Conduct immediate physical count of all accountable forms and
establish cutoff
 Verify the method of inventory valuation adopted by the taxpayer
and ascertain if it conforms to the acceptable valuation methods
prescribed under the 1997 NIRC, as amended;
Check if all books of inventories are registered with the BIR; and
Obtain from the taxpayer a copy of the inventory lists to be
used during the conduct of the inventory-taking.
7. The ROs shall observe and witness actual inventory taking
during the dates scheduled by the taxpayer, with particular
attention on inventories which are material in value.
After completion of each count of one inventory list, he shall
require the taxpayer’s representative to print his name or sign
on every page together with the date and time.
8. The ROs shall prepare and submit a report on the conduct
of inventory-taking within fifteen (15) days after the conclusion
of the inventory-taking activity to the Revenue District Officer.
The following information shall be stated in the report:
a. Specific location of the inventory
b. Duration of the inventory-taking
c. Profile of the taxpayer,
d. Valuation used by the taxpayer
e. Triplicate copy of the Mission Order
 f. A copy of the inventory list and supporting count sheets at
the time of the inventory-taking or physical count duly signed by
the taxpayer, his authorized representative or any responsible
company personnel and by the ROs

9. In cases where a RDO other than the Home RDO witnessed

the inventory-taking, the Revenue District Officer of the former
shall furnish the Home RDO with a copy of the report together
with all the attachments within five (5) days from the submission
of the report.

10. The Revenue District Officer shall prepare and submit the
List of Mission Orders Issued indicating therein the status on
each taxpayer to the Deputy Commissioner, Operations Group, copy
furnished the Regional Director and Assistant Commissioner,
Assessment Service.
RUN AFTER TAX EVADERS (RATE)
REVENUE MEMORANDUM ORDER NO. 24-2008

Policies and Guidelines for RATE Cases

 POLICIES
1. RATE cases filed with the Court of Tax Appeals (CTA) must, as much as
possible, be accompanied by an initial assessment.
2. Letters of Authority (L/A) for RATE cases to be investigated by the
National Investigation Division (NID) / Policy Cases Division (PCD) shall
be signed by the Deputy Commissioner for Legal & Inspection Group
(DCIR-LIG), while L/As for RATE cases in the Regional Office/s (RO) shall
be signed by the Regional Director.
3. Issuance of L/As shall cover only the taxable years where prima facie
evidence of fraud or violation of the provisions of the Tax Code (NIRC)
has been established.
4. For RATE cases, the NID and PCD of the National Office and Special
Investigation Division (SID) of the respective Regional Offices may
conduct a second examination or inspection of the taxpayer’s books of
accounts and other accounting records even if the regular audit
examination had been conducted thereon, subject to the provisions of
Section 235 of the Tax Code of 1997.
5. To avoid duplication of L/As and/or simultaneous investigation of the
same taxpayer covering the current taxable year, verification with the
Letter of Authority Monitoring System (LAMS) by the NID, PCD and SID is
hereby made mandatory.
6. The provisions of the LAMS relating to the encoding and status updating
of L/As issued by all BIR investigating offices shall be strictly enforced. Any
violation thereon shall subject the offender to the appropriate administrative
sanctions.
7. To speed up the development of RATE cases, the Revenue District Offices
shall act immediately on all requests made by NID, PCD or SID for
information or data needed to validate or build up a RATE case.

8. Except for RATE cases, priority shall be given to the audit examination
being conducted by BIR Offices having regular jurisdiction over taxpayers
included in the Bureau’s Taxpayer Account Management Program (TAMP).
However, upon discovery of any indication of fraud during the regular audit
examination, the said BIR Office shall immediately transmit the records of
9. RATE cases may be developed out of findings of infractions under the
Third Party Information Program.
CRITERIA
To qualify under the RATE Program, a case must conform to the
following conditions:
a. Cases representing violations under any of Sections 254, 255, 257
& 258 of the NIRC of 1997, including One-Time Transactions, etc.;
b. High-profile Taxpayers or taxpayers well-known within the
community, industry or sector to which the taxpayers belong; and
c. Estimated basic tax deficiency is at least One Million Pesos
(P1,000,000.00) per year and tax type, but priority should be given to tax
cases where the aggregate basic tax deficiencies for all tax types per
year is Fifty Million Pesos (P50,000,000.00) or more.
JURISDICTION
The NID and PCD shall conduct or undertake the investigation of RATE
cases in the National Office, while the SID of each Revenue Region shall
conduct or undertake the investigation of RATE cases in the regional offices.
PROCEDURE
National Investigation Division:
 The NID thru the Assistant Commissioner, or in his/her absence the
Head Revenue Executive Assistant of the Enforcement Service shall
recommend to the CIR or DCIR-LIG the issuance of the Letter of Authority
which shall automatically supersede all previously issued L/As.
 Thereafter, a copy of the L/A shall be immediately furnished the district
office, the Large Taxpayers Service and/or the SID of the Revenue Region
having jurisdiction over the taxpayer, who, upon receipt thereof, must
immediately transmit to the NID all the documents in their possession
relative thereto; and must withdraw and cancel any issued L/A.
 Reports on RATE cases recommended for criminal prosecution shall be
forwarded to the DCIR-LIG and the RATE Legal Writing and Appearance
Group (RATE-LWAG) or Special Prosecution Division for review of the
same before approval by the CIR of the filing of the complaint.
Special Investigation Division :

 The SID shall recommend to the Regional Director the issuance of

the L/A which shall automatically supersede all L/As previously
issued by the Revenue District Offices within the Revenue Region.

 Thereafter, a copy thereof shall be immediately furnished the district

office having jurisdiction over the taxpayer, who, upon receipt
thereof, must immediately transmit to the SID all the documents in
their possession relative thereto; and must withdraw and cancel any
issued L/A.

 Reports on RATE cases recommended for criminal prosecution shall

be forwarded to the Legal Division of the concerned Revenue Region.
Large Taxpayer Services (LTS)/Revenue District Offices (RDO)
 If in the conduct of the regular audit, the LTS/RDO determines
that there exist a prima facie evidence of fraud against the subject
taxpayer, formal investigation shall continue in order to develop the
RATE cases.
 RATE cases developed and recommended for criminal prosecution
by the LTS shall be forwarded to the DCIR-LIG and RATE-
LWAG/Special Prosecution Division while those developed by the
RDOs shall be forwarded to the Legal Division of the concerned
Revenue Region.
CIVIL FRAUD
In case the quantum of evidence gathered does not warrant a
criminal prosecution because it is not sufficient to prove the guilt of
the taxpayer beyond reasonable doubt but there exists clear and
convincing evidence that fraud has been committed, a corresponding
50% surcharge shall nevertheless be imposed.

ATTRIBUTION OF COLLECTION
All collections arising out of the investigation of RATE cases by
the NID and SID shall be attributed to the Revenue District Office or
Division having regular jurisdiction over the taxpayer.
OPLAN KANDADO
REVENUE MEMORANDUM ORDER NO. 3-2009

Amendment and Consolidation of the

Guidelines in the Conduct of Surveillance
and Stock-Taking Activities, and the
Implementation of the Administrative
Sanction of Suspension and Temporary
Closure of Business.
BACKGROUND

The BIR shall endeavor to intensify certain aspects of its

enforcement operations through “Oplan Kandado”, an
initiative involving the strengthening of the Bureau’s
imposition of prescribed administrative sanctions for
noncompliance with such essential requirements as: the
issuance of receipts, filing of returns, declaration of taxable
transactions, taxpayer registration, and paying the correct
amount of taxes as mandated by the norms / standards of
their particular industry or line of business.
DEFINITION OF TERMS

A non-compliant taxpayer is defined as a taxpayer who, as a result of

surveillance / stocktaking activities, has been found to have committed
violations, and who, notwithstanding the issuance of several notices of
violations, continues to refuse to comply with the requirements provided
under existing rules and regulations.
3 types of surveillance:
A. Covert Surveillance– the surreptitious and undercover watch on the
business operations of a person for a certain period before the conduct
of the inventory of business documents evidencing receipt of income
as well as movement of goods or rendition of services; or apprehension
/ seizure of the aforementioned business documents and properties
found to be the subject of violations of the provision of the NIRC, as
amended, and its implementing regulations.
2. Overt Surveillance– the type of surveillance which commences with
the inventory-taking of the business documents of the person under
surveillance followed by the actual observation and close monitoring of
the business activities of such person.

3. Short-Duration Surveillance (Tax Compliance Check)– the type of

surveillance wherein the business operations of the target taxpayer are
observed for purposes of detecting non-compliance with the Bureau’s
primary and secondary registration requirements.
The “Investigating Offices” participating in the
implementation of this Order shall include the following
Bureau offices:
• All Revenue District Offices
• All Special Investigation Divisions
• The National Investigation Division
• The Policy Cases Division
• The Large Taxpayers (LT) Audit and Investigation Divisions I
and II
• The LT Field Operations Division
• The LT District Offices
 GUIDELINES AND PROCEDURES

A. Surveillance Activities
1. Prelude to Surveillance
Before the actual surveillance, the Head of the Investigating Office /
Division must:
• Acquaint himself with the business organization and economic
activity of the subject of surveillance (SUBJECT), the location of the
stores and outlets, the accounting records used and such other
relevant information as may be available and / or necessary.
• Prepare the necessary MO for approval and signature of the
concerned Regional Director / ACIR, as the case may be.
• Brief the implementing officer on the acts to be performed in
compliance with the MOs.
2. Conduct of Surveillance
 At least two (2) implementing officers comprised of:
 Revenue Officers (ROs) (Assessment/Excise)
 Intelligence Officers (IOs)
Special Investigators (SIs)
 No surveillance activities shall be conducted nor apprehension
effected unless the same has been authorized by a mission order
issued in accordance with the provisions of this Order.
 Implementing officers conducting the surveillance must possess the
following qualities:
 Ordinary appearance
Ability to act naturally under all circumstances
Alertness
Resourcefulness
Keen observation and good memory; and,
Patience and endurance
Performance of Surveillance Activities
Covert Surveillance
a. Observe the business operations of the SUBJECT.
b. Take note of the suppliers and buyers, and volume of deliveries made to
any by the SUBJECT.
c. Observe and watch out for any unregistered cash register machines
(CRMs) being used.
d. Determine violations of internal revenue laws, rules and regulations
committed by the SUBJECT
e. Apprehend the taxpayer by issuing on the spot an Apprehension Slip (AS).
f. Report immediately to the Head of the Investigating Office / Division the
result of the apprehension not later than the following day from the issuance
of the AS.
Overt Surveillance
a. Inform the SUBJECT of the purpose and duties of the
implementing officer as stated in the MO.
b. Conduct an inventory of all unused sales invoices, official receipts
and such other documents used in the movement of goods.
c. List all the documents in the Surveillance Form (SF).
d. Seize unauthorized official receipts or invoices and accomplish the
AS in duplicate.
e. After all the unused official receipts / invoices are listed in the
Surveillance Form, sign the first and last receipts/ invoices in each
booklet stating therein the date and time when the inventory was
made.
f. For official receipts or invoices from partly used booklets, sign the
duplicate / file copy of the last invoice used.
g. Return all the official receipts to the SUBJECT or his authorized
representative and inform him that official receipts / invoices must be
issued chronologically.
h. Observe / monitor the daily sales in the stores or the daily
production and daily removal from or deliveries to the factories, from
the time they open to the time they close.
i. Summarize all the sales / official receipts at the end of each day for
the entire duration of the surveillance and enter the figures on the
space provided in the Surveillance Form.
Conduct of Surveillance for Taxpayers Using Cash Register
Machines (CRMs) and Point-of-Sale Machines (POSs)
a. Take an inventory of all CRMs and POSs, whether used for issuance
of invoices or for internal control purposes.
b. Verify whether the store / establishment using the CRM / POS has
maintained a Cash Register Sales Book or electronic journal identified
to each CRM / POS used.
c. Check the permits issued and the stickers attached to each CRM /
POS whether they tally with the brand and serial numbers of the
CRMs / POSs authorized to issue receipts.
d. Seize all unauthorized CRMs / POSs and accomplish the AS in
duplicate.
e. Read through the memory of the machine by using the "Z” keys.
Secure at least two (2) tapes for two (2) readings.
f. Sign the tape and indicate the date and time thereon before the
CRM / POS is put to use for the day, if possible.
g. Secure the machine tape showing the “Z” reading every end of the
day until the last day of the surveillance.
3. Analysis of Surveillance Results
• Extrapolate the data gathered from the surveillance by using the
following formulas:
To get the Average Daily Sales:

Total Sales During Surveillance

Total No. of Days Under Surveillance = Average Daily Sales (ADS)

To get the Average Quarterly Sales:

• Determine violations of internal revenue laws, rules and regulations of
the SUBJECT such as the usage of unregistered CRM / POS or
invoices / official receipts and non-issuance of invoices / official
receipts.

4. Action on Surveillance Results

If after the conclusion of the surveillance, there is a sufficient
ground for the closure of the establishment as provided for under
Section 115 of the NIRC, as amended, a recommendation shall be made
to effect such closure.
If the result of the surveillance made likewise indicates that the
taxpayer had not been, in fact, correctly reporting income for tax
purposes, and that the veracity of his accounting records is not
reliable, the Commissioner or Regional Director concerned shall issue a
Letter of Authority (LA) for the investigation of the taxpayer.
5. In order to avoid multiple surveillance activities being conducted
upon one taxpayer by several Offices of the Bureau and to clearly define
which Office shall conduct surveillance activities, the following rules
shall be observed:
a. From internal sources of Bureau-
Revenue District Office (RDO), Large Taxpayers Audit and
Investigation Division I (LTAID I), Large Taxpayers Audit and
Investigation Division II (LTAID II), or Large Taxpayers District Office
(LTDO) with respect to taxpayers falling under their respective
jurisdictions shall conduct the surveillance.
b. From confidential information filed by an informer or from other
external sources-
National Investigation Division (NID) and Policy Cases Division (PCD)
shall conduct the surveillance.
.
B. Suspension or Temporary Closure of Business.
a. Grounds
b. The following shall be the only grounds for suspension or
temporary closure of business:
(a) Failure to issue receipts or invoices by a VAT-registered or
registrable taxpayer;
(b) Failure to file a Value-Added Tax return;
(c) Understatement of taxable sales or receipts by 30% or more of the
correct amount thereof in the case of a VAT-registered or registrable
taxpayer; or,
(d) Failure to register.
Confrontational Requirements
For Regional Cases
The Regional Review Board shall be composed of the following revenue
officials:
Chairman : Regional Director
Members : Chief, Assessment Division
Chief, Legal Division
RDO having jurisdiction over the taxpayer
For National Office Cases
The National Office Review Board shall be composed of the following
revenue officials:
Chairman : Asst. Commissioners (ACIRs), ES /LTS
Members : Representative, Office of the Commissioner
Representative, Office of the Deputy Commissioner (Legal and
Inspection Group)
• The Commissioner of Internal Revenue shall serve as the Overall
Chairman of the Regional Office Review Boards and the National
Office Review Board.
• Upon the taxpayer’s submission of the explanation, or if none is
submitted on or before the deadline, the Review Board headed by the
Regional Director or the ACIR, Enforcement Service/LTS, shall
decide whether or not to terminate the case, or to pursue
administrative / criminal action against the taxpayer, as the case
may be.
• If a Review Board deems it necessary to pursue administrative or
criminal action against a non-compliant taxpayer, it shall cause the
preparation of a 5-Day VAT Compliance Notice (VCN), which shall
be issued in lieu of the 10-Day VCN, to expedite the resolution of the
case at hand. The 5-Day VCN shall be signed by the Chair of the
Review Board concerned.
Execution and Enforcement

1. In the event that a taxpayer

• Refuses, neglects or fails to submit within the prescribed period, a
response to a VCN;
• Submitted a response that was later found to be insufficient; or,
• Refuses, neglects or fails to comply with the terms of the 5-Day VCN
the Review Board concerned shall prepare a memorandum report
recommending the closure of the establishment, for the approval of the
Commissioner. Said report shall include the proposed Closure Order,
supported by the necessary documentation, for the approval and
signature of the Commissioner.
Closure Order:
Original : Taxpayer’s copy
2nd Copy : Office of the Commissioner
3rd Copy : Office of the Regional Director / ACIR concerned
4th Copy : Investigating Office
5th Copy : Investigating Officer (receiving copy)
2. The signed Closure Order shall be returned by the Office of the
Commissioner, together with all supporting documents, to the Review
Board concerned, for immediate service to the non-compliant
taxpayer.
3. The service of the Closure Order shall be accompanied by a copy of
the memorandum report of the Review Board concerned, duly
approved by the Commissioner, indicating therein the basis for the
Closure.
4. However, if in the interim the non-compliant taxpayer rectifies the
violation pursuant to Section VIII (Compliance by Taxpayer) hereof,
the Chair of the Review Board concerned shall desist from
implementing the Closure Order, and shall immediately
communicate such information to the Commissioner.
5. The execution of the Closure Order shall consist in the physical
closing of the doors or other means of ingress of the establishment,
and the sealing thereof, with the appropriate security devices
(padlocks, etc.) and the BIR’s official seal.
6. Where deemed necessary, the execution of the Closure Order shall
be carried out with the assistance of elements of the Philippine
National Police (PNP) or Barangay Officials in the locality, in
accordance with the Memorandum of Agreement between the Bureau
of Internal Revenue and the PNP or concerned Barangay Officials.
7. The implementation of the Closure Order and Temporary
Suspension for a particular taxpayer must be widely publicized
through press releases, press conferences and, when possible, the
televised coverage of the actual closure / suspension of business
operations of a non-compliant taxpayer.
8. All reports and documents signed by the Commissioner in relation to
the implementation of this Order shall not require the concurrence of
other BIR officials as mandated in previous issuances.
9. The closure and temporary suspension of business under a duly
approved Closure Order shall not preclude the Bureau from filing the
appropriate charges, if evidence so warrants, against the taxpayer
concerned; or in the case of corporate taxpayers, against the
responsible officers of the corporation, under the Run After Tax
Evaders (RATE) Program of the Bureau.
DURATION OF CLOSURE
1. The closure of a business establishment shall last for a period of
not less than five (5) days, and shall be in force until the
violation is rectified.
2. The Lifting of Closure Order shall be prepared in quintuplicate (five
[5] copies), to be distributed as follows:
Original : Taxpayer’s copy
2nd Copy : Office of the Commissioner
3rd Copy : Office of the Regional Director / ACIR concerned
4th Copy : Investigating Office
5th Copy : Investigating Officer (receiving copy)
3. In the event that the Commissioner approves a
recommendation for the lifting of a Closure Order, the signed
Lifting of Closure Order shall be returned by the Office of the
Commissioner, together with all supporting documents, to the
Review Board concerned, for immediate service to the non-
compliant taxpayer.
4. The service of the Lifting of Closure Order shall be
accompanied by a copy of the memorandum report of the
Review Board concerned, duly approved by the
Commissioner, indicating therein the basis for the lifting of
the sanction.
REPORTORIAL REQUIREMENTS
On Surveillance Activities
1. The Heads of the Investigating Offices / Divisions shall prepare
a Status Report on the Surveillance Activities within ten (10) days
after the close of each month.
2. The Regional Offices, the Enforcement Service and the Large
Taxpayers Service shall then submit consolidated Status Reports
following the same format prescribed for the Report, and submit the
same to the Office of the Commissioner, within fifteen (15) days
from the close of each month.
3. The Regional Directors, and the ACIRs of the Enforcement Service
and the Large Taxpayers Service shall prepare a List of Mission Orders
Issued and submit the same to the Office of the Commissioner on or
before the fifth day following the end of the month of issuance.
On Monthly Accomplishment Reports
All Review Boards shall submit, on or before the tenth (10) day of
the following month, these reports:
• Monthly Report on 5-Day VCNs Issued
• Monthly Report on Closure Orders Issued and Served
• Monthly Report on Lifting of Closure Orders Issued and Served
• Monthly Report on the “Oplan Kandado” Program

1. The Regional Review Boards shall submit their monthly

accomplishment reports to the Deputy Commissioner (Operations
Group), and to the Office of the Commissioner.
2. The National Office Review Board, however, shall submit its
monthly accomplishment report directly to the Office of the
Commissioner.
UNDER TRAIN LAW (RA
10963)
REVENUE MEMORANDUM ORDER NO. 19-2018

Revised Guidelines, Policies and Procedures in

Registering New Business Pursuant to RMO 6-2018
POLICIES AND GUIDELINES
• All new business registrants shall file an Application for Registration
with complete documentary requirements to the Revenue District
Office (RDO) having jurisdiction over the place of business or
residence of the taxpayer, and shall complete its registration with
the Bureau of Internal Revenue (BIR) at times required by law as
follows:
a. On or before the commencement of business; or
b. Before payment of any tax due; or
c. Before or upon filing of any applicable tax return, statement or
declaration.
• New business registrant may proceed to registration of books of
accounts after securing Certificate of Registration (COR) and
Authority to Print (ATP) within thirty (30) calendar days from the
date of business registration with the BIR.
• New business registrant with existing Taxpayer Identification
Number (TIN) issued by the BIR or secured thru the Department of
Trade and Industry’s - Philippine Business Registry (DTI-PBR) or
Securities and Exchange Commission (SEC) may pay the business
Registration Fee (RF) before going to the concerned RDO for
registration, thru any of the following:
a. Authorized Agent Banks (AABs)
b. ePayment channels of AABs
c. Mobile payment thru GCash.
• The RDO shall follow the “Single Window” Approach in receiving the
application for registration and in releasing of certificates and
permits in the same counter where the taxpayer submits the
application.
 “New Business Registrants Counter (NBRC)” –or special lane for
new business registrants shall be established in each RDO to be
manned by a “New Business Registrant Officer”.
New Business Registrant Officer shall:
• Manage the counter or special lane
• Receive the application for registration of new business registrants
• Assist the taxpayer
• Release the COR and ATP principal receipts/invoices
• Accept the payment of business RF and any applicable computed
tax or penalty on registration, and forward the payment to the RCO
who is assigned at the Client Support Section (CSS) area or within
the same area.
RCO- are authorized to process and issue the electronic Official
Receipt (eOR)/electronic Revenue Official Receipt (eROR) using Mobile
Revenue Collection Office System (MRCOS), or a manual OR/ROR, as
the case may be, for the payment of:
a) Registration Fee
b) Documentary Stamp Tax
c) Certification Fee
d) Penalty on late registration
• List of Accredited Printers of receipts/invoices shall be posted at a
conspicuous place in the CSS Area, including sample layouts of
principal receipts/invoices as reference to the new business
registrants.
• All Accredited Printers of receipts/invoices and/or its
agents/representatives shall not require a minimum number of
booklets for printing for its customers.
• The RDO shall ensure that the new business registrants shall be
issued their CORs and ATPs after compliance with the documentary
requirements and payment of RF.
• The RDO shall subject all newly-registered business taxpayers to
ocular inspection/Taxpayer Compliance Verification Drive (TCVD)
for purposes of verifying their business existence within thirty (30)
calendar days from the date of registration, and shall maintain a
separate log sheet for the new business registrants.
• The Assistant Revenue District Officer (ARDO) shall approve and sign
the COR and ATP pursuant to Revenue Administrative Order No. 5-
2017.
• The CSS Chief shall supervise and oversee the procedures in
implementing the “Single Window” Approach.
• The Queuing System shall include the prescribed frontline
services/names of transactions.
REVENUE MEMORANDUM CIRCULAR NO. 30-
2018

AMENDED DOCUMENTARY
REQUIREMENTS FOR NEW BUSINESS
REGISTRANTS
 The Books of Account for new business registrants shall be
registered by the taxpayer within thirty (30) calendar days from the
date of business registration.
In case of an authorized representative who will transact with the
BIR on behalf of the taxpayer, the following shall be required:
a. For Individual
• Special Power of Attorney (SPA); and
• Identification Card (ID) of the authorized person.
b. For Non-Individual
• Board Resolution indicating the name of the authorized
representative
• Secretary’s Certificate; and
• ID of the authorized person.
REVENUE MEMORANDUM ORDER NO. 22-2018

Revised Guidelines and Procedures in

the Conduct of Tax Compliance
Verification Drive (TCVD)
MANUAL TAX COMPLIANCE VERIFICATION DRIVE (TCVD)
Host Revenue District Office (Host RDO) shall:
1. Coordinate with the Local Government Officials and/or Local Chief
of Police concerning the operational activity that will be
undertaken in the area, and
2. Coordinate and identify the Revenue Officers (RO) and Group
Supervisors (GS) who will participate in the conduct of visitation,
including the date and time of operation, and forward the same to
the Regional Director for approval and signature "