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Issue 6, June 2013
TMAP MONITOR TMAP Extends Validity of Old Invoices and Receipts Issues Revenue Memorandum Circular No. 44-2013 The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular No. 44-2013 (RMC 44-2013) which extended the validity of unused/unissued principal and supplementary receipts/invoices printed prior to January 18, 2013, the effectivity date of Revenue Regulations No. 18-2012 (RR 18-2012), from June 30, 2013 to August 30, 2013.
January 18, 2013 shall no longer be valid. Failure to use the new sets of invoices/receipts required under RR 18-2012 shall be considered as non-issuance of invoices/receipts in violation of Section 264 of the National Internal Revenue Code. As such, transactions supported with non-compliant However, the original deadline for the application for invoices/receipts shall be deemed as not the printing of new principal and supplementary properly substantiated and may not be claimed receipts/invoices required under RR 18-2012 was as deductible items in the income tax returns. maintained at April 30, 2013 and therefore all While the extension until August 30, 2013 applications filed subsequent to this date shall be provides a welcome relief, taxpayers may still considered late and subject to penalties pursuant to struggle to meet the BIR’s requirements on the Section 275 of the National Internal Revenue Code. surrendering of unused/unissued principal and The April 30, 2013 deadline is based on Section 5 of RR 18-2012 which mandates that taxpayers shall apply for a new authority to print not later than 60 days prior to actual expiry date, but no later than June 30, 2013. The deadline and the related penalties for late filing were clarified through a memorandum issued by the Commissioner of Internal Revenue also on April 30, 2013. RMC 44-2013 further requires that all unused/unissued principal and supplementary receipts/invoices shall be surrendered to the appropriate Revenue District Office no later than 10 days after the date of printing stated in the new principal and supplementary receipts/invoices. The RMC defined the date of the new principal and supplementary receipts/invoices as the date of expiration of the validity period of the unused/unissued principal and supplementary receipts/invoices. After August 30, 2013, all unused/unissued principal and supplementary receipts/invoices printed prior to
supplementary receipts/invoices (at 10 days from authority to print date) considering that the delivery of the new sets of documents by the printers usually takes around twenty to thirty days from the issuance of authority to print. The Tax Management Association of the Philippines (TMAP), as well as other industry players and taxpayer groups, earlier filed with the BIR requests to extend the validity of unused invoices and receipts. TMAP, in particular, requested the BIR to extend the deadline to December 31, 2013 or, alternatively, allow the taxpayer to fully utilize the existing receipts and invoices until they are fully exhausted.
www.tmap.org.ph
Issue 6, June 2013
TMAP Holds Bingo Socials TMAP held its annual Bingo Socials last May 25, 2013 at the Zobel Dining Room, Makati Sports Club. This once-a-year event that started during the term of Past President Cris Guhit in 2009, allows members to kick back, relax and have fun while vying for the chance to win major and consolation prizes. TMAP board member Sherry Obiles-Baura won this year’s grand prize of P15,000 for the “blackout” game.
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TMAP Files Position Paper on RMC 89-2012 On May 29, 2013, TMAP filed its position paper on RMC 89-2012 re. “Clarifying the Tax Implications and Recording of Deposits/Advances Made by Clients of General Professional Partnerships for Expenses,” and the subsequently issued RMC 16-2013 re. “Clarifying the Tax Implications and Recording of Deposits/Advances for Expenses Received by Taxpayers not Covered by Revenue Memorandum Circular No. 89-2012.” TMAP noted in the position paper that the evident intent of RMCs 89-2012 and 16-2013 is the prevention of double deduction of expenses, a situation that arises when certain expenses are claimed as deductions by both the general professional partnership (GPP) and non-GPP taxpayers, on one hand, and their clients/customers, on the other hand. This being the case, TMAP noted the following in the position paper: 1. RMCs 89-2012 and 16-2013 are inconsistent with the accounting principles on revenue recognition. By their very nature, “deposits” or “advances” made by clients are not intended as professional fees or payment for services, but rather to cover necessary expenses to be incurred for providing the services. 2. On the liquidation of deposits and expenses where there are excess funds to be returned to the client, TMAP pointed out that the GPP should not recognize input VAT on the transaction since the return of funds is not an “income payment.” In the same way, the client should not recognize output VAT from such transaction as it is not selling goods or services. 3. Under the required recording procedures when the GPP advances expenses for and on behalf of the client, subject to reimbursement, there will be a temporary overstatement of service income which will have to be corrected when the GPP is
Issue 6, June 2013 reimbursed by the client. 4. In the case of non-GPP taxpayers, their receipt from the client of a deposit would be subject to creditable withholding tax (CWT) which goes against the nature of the CWT since the deposits/advances are not income in the hands of the non-GPP taxpayer. 5. RMC 16-2013 contradicts Rev. Regs. 16-2005 in the case of upfront payments made by the lessee other than in the nature of prepaid rent (e.g., loan, option money or security deposit). Advance payments of the lessee, other than as prepaid rent, do not constitute “gross rentals,” hence, not subject to VAT. 6. If, as a result of RMCs 89-2012 and 16-2013, advances/deposits are made to form part of gross receipts, this would result in unwarranted increases in local business tax which is based on gross sales or receipts.
About TMAP The Tax Management Association of the Philippines, Inc. is a non-stock corporation founded on October 22, 1981 established primarily to professionalize tax practice and provide a channel by which the private sector may actively participate in the drafting of tax laws, rules and regulations. At present, TMAP has over 100 members most of whom belong to, or act as consultants for, the top 1,000 corporations. The Association has been instrumental in the development and promotion of reforms in the country’s tax laws and in tax administration by actively participating in public hearings and submitting position papers in connection with the passage of revenue laws, rules and regulations. TMAP raises the level of professionalism and technical competence among its members by keeping them abreast of the latest tax rulings, regulations, issuances, decisions and policies through habitual seminars conducted by experts in government and in the private practice. The Association also conducts regular dialogues with pertinent government officials on policy issues affecting its members. TMAP has instilled and continues to instill among its members competence, professionalism and integrity in tax practice. TMAP believes that responsible tax practice is indispensable to the country’s economic growth and development. 3
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www.tmap.org.ph
Issue 6, June 2013
Objectives of TMAP TMAP was organized for the following purposes: 1. To promote the development of tax management as a field of study, specialization and practice by establishing programs and projects geared towards a professional degree and/or accreditation with the appropriate government institutions; to organize and/or sponsor academic courses, seminars, conferences or conventions on taxation; to issue publications and such other printed materials which will help the members in their professional growth; and to undertake activities which will develop rapport and cooperation among members; 2. To monitor proposed and pending tax legislation and policies for purposes of taking timely action for the benefit of corporate and individual members; 3. To evaluate and review the implementation of tax laws, ordinances and issuances as well as of tax jurisprudence in order to initiate necessary legislative and administrative changes for the benefit of the members and taxpayers in general; 4. To establish a data center for the compilation and analysis of tax laws, policies and jurisprudence to determine their overall impact on the businesses of the members and on private business in general; 5. To assist government planners in determining the appropriate tax directions and instituting improvements in the tax system; 6. To recommend tax reforms in general so as to assist towards the development and growth of the Philippine economy;
Happy birthday to the following TMAP members who are celebrating their respective birthdays in July! JULY 2 Fulvio Dawilan 3 Leonides Balmeo 5 Jocelyn Lajara-Lapira 6 Eranio Punsalan 10 Reynaldo Geronimo 11 Oscar Ventanilla 12 Redentor Caguioa 19 Remigio Iringan, Jr. 21 Shernan Balilo 21 Winnie Lardizabal-Morales 26 Christiane Alonzo 26 Joseph Deabanico 27 Louise Paula Ty 29 Mariano Celis II 30 Herminigildo Murakami
TMAP Publications Committee Leilah Yasmin E. Alpad Terence Conrad H. Bello Eleanor L. Roque
7. To coordinate and/or affiliate with other persons, associations or institutions, whether local or international, having objectives wholly or partly similar to those of the Association, with the view of advancing similar objectives; 8. To render advice and assistance to, conduct studies and researches on, or manage the activities, operations or transactions of individuals and corporations, pertaining to taxation; 9. To promote the highest ethical conduct in the field of taxation, in the discharge of the Association’s duties and responsibilities, and in all dealings with the government and its agents; and 10. To do any and all things necessary for the furtherance of the foregoing objectives.
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