www.tmap.org.ph
March 2015 Issue
TMAP MONITOR Lingkod TMAP 2015 For the 8th year, TMAP continued its Lingkod TMAP project aimed at assisting taxpayers in the preparation and filing of annual income tax returns. Lingkod TMAP is a project in partnership with the BIR. On April 13, 14, and 15, 2015, TMAP members set up Help Desks in Revenue Regions 6 (Manila), 7 (Quezon City), and 8 (Makati). Volunteers from the Far Eastern University (FEU) joined TMAP members in Revenue Region No. 6 (Manila). TMAP and FEU volunteers informed taxpayers of the new process in filing their annual income tax returns and assisted taxpayers in accomplishing the returns and calculating tax liabilities. The 2014 annual tax return filing was particularly challenging with the release of Revenue Regulation 52015 which imposes a penalty of P1,000 per return and 25% of the tax due to be paid for failure of covered taxpayers to fully comply with the e-filing requirements. As early as March 31, 2015, TMAP formally requested the BIR to defer the full implementation of eBIRForm Requirement, or at the very least, make the e-filing requirements optional. During the week of tax return filing and in relation to the 2014 income tax filing, the BIR issued several Revenue Memorandum Circulars regarding the electronic BIR forms (eBIRForms) which
resulted in further confusion on whether returns should be filed manually using preprinted forms or offline eBIR forms, or electronically through the on-line eBIR form or the electronic filing and payment system. TMAP posted daily updates on its website on the changing requirements for the 2014 annual tax return filing and included in its website the facility to download the eBIR form package. Further, TMAP officers attended different TV and radio programs to clarify the new BIR filing and payment requirements and to address taxpayer concerns.
ASEAN Integration Discussion in March GMM TMAP’s theme for 2015 is on enhancement of national competitiveness, which is a critical factor for the country’s readiness towards a single ASEAN Economic Community targeted within the year. Part of this economic integration is the free flow of goods within the region. For the March GMM, TMAP invited Deputy Commissioner Agaton Teodoro Uvero to update the members on the recent efforts by the Bureau of Customs (BOC) for the ASEAN integration. (continued in page 3)
TMAP Conducts 2015 Tax Seminar
Members were updated on the developments in the Exchange of Information (EOI) agreements with other countries, which are targeted to deter international and offshore tax evasion. With EOI, countries can get information on identities, accounting records and documents, tax returns and reports, and bank information. In 2014, the BIR has included EOI in its list of priority programs. The EOI is also part of a broader multilateral agreement, the Mutual Administrative Assistance in Tax Matters (MAC), where Philippines became the 68th signatory in September 2014. Atty. Cabreros also discussed other transparency policies/projects such as the Foreign Account Transparency Compliance Act and automatic exchange of information.
TMAP conducted its first tax seminar for 2015 on March 25 at Hotel Intercontinental Makati to apprise members on Philippine tax developments and tax filing reminders and updates. Ms. Salina B. Marinduque, Chief of Large Taxpayers Assistance Division discussed tax filing reminders and updates. Relevant tax updates include: •
•
•
Revenue Regulation (RR) 2- 2015 – The RR outlines the procedures for the submission of scanned copies of BIR Form 2307 and 2316 in PDF format through DVD-R instead of hard copies, with notarized certification from the taxpayer’s authorized representative that the soft copies are the complete and exact copies of the original forms. RR 3-2015 – The RR circularizes the provision in Republic Act 10653 which increases the exclusion from gross income of 13th month pay and other benefits from P30,000 to P82,000 effective January 1, 2015. RR 5-2015 – The RR prescribes the penalties for non-compliant taxpayers mandated to use EFPS or eBIR forms at P1,000 per return and civil penalties equivalent to 25% of tax due, tantamount to wrong venue filing.
Atty. Marissa O. Cabreros, Assistant Commissioner of Legal Service shared the latest updates on tax treaties. Currently, the Philippines has 39 effective double taxation agreements (DTA) with other countries, with two new DTAs with Nigeria and Kuwait effective in 2014. The Philippines’ tax treaty policy is to update the Exchange of Information Article of the DTAs and to complete DTA network with ASEAN countries.
TMAP Asks BIR to Defer Full Implementation of eBIRForm Requirement In a letter dated March 30, 2015, TMAP requested the BIR to defer full implementation of new requirements mandating certain taxpayers to use the eBIRForm facility in electronically submitting and filing their tax returns. The new requirements are embodied in Revenue Regulations No. 5-2015, which the BIR issued on March 17, 2015. The following taxpayers are required to e-file their returns pursuant to the new rules: (1) accredited tax agents/practitioners and all their clienttaxpayers; (2) accredited printers of principal and supplementary receipts/invoices; (3) one-time transaction (ONETT) taxpayers; (4) those who shall file a “No Payment” return; (5) government-owned or –controlled corporations (GOCCs); (continued in page 3)
2
TMAP Co-signs Position Paper to Oppose SIR
to conduct an information campaign on their taxpayers and solicit feedback and comments from affected taxpayers.
TMAP, together with the Philippine Chamber of Commerce and Industry (PCCI), Employers Confederation of the Philippines, Financial Executives Institute of the Philippines , Management Association of the Philippines, Philippine Exporters Confederation, Inc., and Philippine Institute of Certified Public Accountants , filed a position paper with the Department of Finance and Bureau of Internal Revenue on March 27, 2015 to oppose the mandatory submission of Supplemental Information Return (SIR) as part of the annual income tax returns of individual taxpayers.
Finally, TMAP said that some taxpayers have encountered delays or technical issues enrolling into the eBIRFrom facility. These issues, according to TMAP, will have to be addressed by the BIR first before the new requirements can be fully and efficiently implemented.
The SIR requires information on passive income which are exempt or have been subjected to final withholding taxes, which includes interest income, dividends, prizes, sale of stocks or real property, among others.
TMAP thus requested that full implementation of the new requirements be deferred until after April 15, 2015, or that at the very least, make the e-filing requirements optional at this time, but with a gradual phase-in of full implementation.
ASEAN Integration Discussion in March GMM (continued)
The SIR was made optional for the taxable year 2013 with the issuance of RMC 9-2014. In the same RMC, the BIR made SIR mandatory for taxable year 2014 and onwards. The SIR imposes the same disclosure requirements as Revenue Regulation 2-2011 which was subsequently withdrawn after strong opposition from various sectors who cited violations of the Bank Secrecy law and right to privacy. Further, the same information can be generated by the BIR from the returns or reports filed by the taxpayers such as alphalists or capital gains tax returns. (continued in page 6)
TMAP Asks BIR to Defer Full Implementation of eBIRForm Requirement (continued) (6) local government units (LGUs), except barangays; (7)cooperatives registered with the National Electrification Administration and Local Water Utilities Administration (LWUA). TMAP conveyed concerns, however, that covered taxpayers may not have ample time to fully comply with the new requirements given that the regulations were issued less than a month before the April 15, 2015 taxfiling deadline. TMAP also cited the need for BIR personnel tasked to implement the new requirements to be given enough time
Through the existing ASEAN free trade agreements, most of the goods are already zero-rated. Another aspect of economic integration is on customs trade facilitation measures, which include streamlining of import/export procedures using best practices, establishing of the ASEAN Single Window, and signing of protocols, among others. The Philippines has been initially at the forefront of the National Single Window project, but it is currently lagging behind Malaysia, Indonesia, Thailand, and Singapore due to delays in implementing a unified IT infrastructure. The BOC aims to modernize and integrate its separate front-end and back-end systems to allow for contact free-processing of transactions and enhance transparency. (continued in page 4)
3
TMAP Welcomes New Members
TMAP inducted the following member firms and representatives during the March 2015 General Membership Meeting: Racquel Endaya-Concepcion - Assistant Vice President of HSBC Electronic Data Processing Phil, Inc. She is a CPA with over 15-year experience in the field of taxation, finance, accounting and auditing. She obtained her BS in Accountancy degree (cum laude) from the University of Batangas and graduated as University Valedictorian. She completed the De La Salle University’s MBA Program in 2000. Before joining HSBC Electronic Data Processing Inc., she joined various firms such as the SGV from 1994 to 2000. She left SGV then rejoined in 2003 until 2007 where she last held the position of Senior Director for Ernst & Young Phil. From 2007-2009 she also worked as Tax Manager for Pricewaterhouse Coopers Calgary (in Canada). Maricel Preciosa A. Dimayuga - Controller of Maynilad Water Services, Inc. She is a CPA who obtained her Business Administration and Accountancy degree from UP Diliman. She also completed the 9-month Pfizer-AIM Business Leadership Program in 2008 and graduated with Superior Performance Rating. Before joining Maynilad in March of 2013, she was a Tax Auditor at SGV from 1994 to 1998, Tax Specialist at Sea-Land Administrative Services Ltd, and held various positions in Pfizer where she stayed for 9 years, her last position being Accounting Manager. She also worked as Financial Controller at International SOS. Raymond A. Abrea – President of Abrea Consulting Group, Inc., which is engaged in the business of providing finance and tax advisory services for small and medium enterprises. He was previously with RDO 39 South Q.C.
of the BIR from 2009 to 2010. Mr. Abrea is a CPA and obtained his BS Accountancy degree from San Beda College and his MBA-Regis degree from the Ateneo Graduate School of Business. Mr. Abrea is also a member of the faculty of UAAP and Baliwag Polytechnic College. His work history includes acting as Chairman of the Department of Accountancy, College of Arts and Sciences of San Beda College, from 2005 to 2008 and as Branch Auditor of Maybank Phil. from 2004 to 2005. Among his awards is the Asia CEO Awards 2013 as one of the distinguished global young leaders. Atty. Joshua L. Castro - Assistant Vice President and Assistant Corporate Secretary of ANSCOR or A. Soriano Corporation, a holding company which was established in 1930, investing initially in Atlas Consolidated Mining and Dev. Corp., Phelps Dodge Philippines and Atlas Fertilizer Corporation. He graduated from UP Diliman with a Bachelor of Arts degree major in Political Science and then from the San Beda College of Law in 1999. He was previously a Director at SGV until 2005.
ASEAN Integration Discussion in March GMM (continued) Atty. Uvero cited the planned expansion of the super green lane initiative now being availed by top qualified importers. Under this initiative, qualified importers can avail of the special customs clearance facility that will allow advance processing and clearance of their importations, without physical inspection. Atty. Uvero emphasized that small and medium enterprises may face challenges with the ASEAN integration due to lack of awareness and access to information that will enable them to avail of the zerorated tariffs.
4
Lingkod TMAP 2015 Planning Activities
On-site Activities
TMAP meets with BIR Revenue Region 8 Officers
TMAP meets with Regional Director Araceli Francisco of Revenue Region 6 with FEU faculty representatives
TMAP’s courtesy call with BIR Regional Director Alfredo Misajon of Revenue Region 7
5
TMAP Co-signs Position Paper to Oppose SIR (continued) The SIR also imposes undue difficulty on individual taxpayers considering the nature and details that need to be reported which would entail requesting detailed bank statements, accounting for tax exempt income and summarizing all passive income activity. The additional reporting burden will not translate to any additional tax collections by the BIR and may even expose the taxpayers to penalties of perjury for any erroneous declarations. As a positive response to the position paper, the BIR issued RMC 13-2015 on March 31, 2015 which makes SIR disclosure optional for 2014.
About TMAP The Tax Management Association of the Philippines, Inc. (TMAP) 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. Contact us
Happy birthday to the following TMAP members who are celebrating their respective birthdays in March and April!
MARCH 2 3 4 4 5 9 11 16 20 21 25 26 26 30 31
CONSTANTINO, Ferdinand A. GO-BROZO, Maria Socorro JURADO-BENEDICTO, Rosario DEL ROSARIO, Ana Maria S. NAVARRO-CRUZ, Hannah BUĂ‘AG, Jose Mario LIM, Maria Lourdes P. HERNANDO, Ma. Josefina S. MEDALLA, Rolando Jr. V. ABELA, Walter Jr. L. Zialcita-Villapando, Madeline L. SY, Shennan A. MONSOD-TORMON, Menchie CRUZ, Mary Evangeline A. SEBASTIAN, Guillermo V.
APRIL 3 7 8 11 11
ORONEA, Maricris E. BAUTO, Ellen Gerance ONG, Juancho S. VILLEGAS, John Ezra U. RACHO, Rabiev Tomas M.
11 12 17 18 23 25 28
ODRA, Dennis GUTIERREZ, Hazel P. OBILES-BAURA, Sherry QUERIDO, Richard S. ZALES, Erwin P. MAMALATEO, Victorino C. GORRICETA, Mark S.
Unit 1904, Cityland Herrera Tower Corner V. A. Rufino & Valero Streets Salcedo Village, Makati City Tel. No. 840-2325 Fax No. 346-8104 Website: www.tmap.org.ph E-mail: tax_map@yahoo.com
6