Feb 12, 2014

New (!) BIR Rules for Filing Income Taxes for the Year 2013, Due April 15, 2014

(This image just felt so right.)
Oh, yes, the Bureau of Internal Revenue (BIR) powers-that-be have done it again.

On January 24, 2014, the Department of Finance and the BIR issued this Revenue Regulation 2-2014 that says income tax for 2013 must be filed using the new 2013 edition tax forms released just recently (because when I downloaded it in late January, it was still the 2011 version).

In other words, if you had tried to be a good citizen and filed your taxes early (like I did), then sorry, good citizen, you'll just have to do the effing paperwork and visit your RDO to file your taxes again!

(Yes, I am humungously pissed. Does it show? Good.)

Thank goodness BMBEs like me are exempted from income tax, and according to the Tax Code of the Philippines, Chapter IX, Sec. 51.A.2.d, "An individual who is exempt from income tax pursuant to the provisions of this Code and other laws, general or special" is not required to file his/her ITR.

So I guess I'll just skip filing an ITR this year.

But I wanted an ITR in case I apply for a loan. The ITR, after all, is the main reason why I registered in the first place. Oh well, here's hoping I won't need an ITR in 2014.

Anyway, I am not writing to rant (even though I already did that). For your guidance, fellow tax payers, here is the full text of the BIR's latest notorious new regulation -- one of so many in very recent years.

Oh, and my annotations in red.

- - - - -

REPUBLIC OF THE PHILIPPINES

DEPARTMENT OF FINANCE
BUREAU OF INTERNAL REVENUE
REVENUE REGULATIONS No. 2-2014

January 24, 2014

SUBJECT : New Income Tax Forms
TO : All Revenue Officials, Employees, and Others Concerned

SECTION 1 - Objective.

These Revenue Regulations are issued to prescribe the new BIR forms that will be used for income tax returns (ITRs) filing covering and starting the taxable year ended December 31, 2013.

SECTION 2 - Scope.

Pursuant to Section 244, in relation to Sections 6(H), 51(A)(1) and 51(A)(2) of the National Internal Revenue Code of 1997 (Tax Code), as amended, these Regulations are issued to prescribe the use of revised income tax forms with bar codes, and to reflect the changes in information required from said forms. This will also enable the said forms to be read by an optical character reader (OCR) for ease in scanning.

SECTION 3 - Filing of New ITR Forms. (Click on the links to find the new downloadable BIR forms.)

All taxpayers required to file their ITRs under Section 51(A)(1) of the Tax Code and those not required to file under Section 51(A)(2) but who opted to do so, covering and starting taxable year ended December 31, 2013 shall use the applicable forms as follows:

  1. BIR Form No. 1700 version June 2013 (Annual Income Tax Return for Individuals Earning Purely Compensation Income);
  2. BIR Form No. 1701 version June 2013 (Annual Income Tax Return for Self-Employed Individuals, Estates and Trusts);
  3. BIR Form No. 1702-RT version June 2013 (Annual Income Tax Return for Corporations, Partnerships and Other Non-Individual Taxpayers Subject Only to the REGULAR Income Tax Rate);
  4. BIR Form No. 1702-EX version June 2013 (Annual Income Tax Return for Use Only by Corporations, Partnerships and Other Non-Individual Taxpayers EXEMPT Under the Tax Code, as amended, [Sec. 30 and those exempted in Sec. 27(C)] and Other Special Laws, with NO Other Taxable Income); and
  5. BIR Form No. 1702-MX version June 2013 (Annual Income Tax Return for Corporations, Partnerships and Other Non-Individuals with Mixed Income Subject to Multiple Income Tax Rates or with Income Subject to Special/Preferential Rate)


SECTION 4 - Rounding Off to the Nearest Peso in the ITR.

The requirement for entering centavos in the ITR has been eliminated. If the amount of centavos is 49 or less, drop down the centavos (e.g., P 100.49 = P 100.00). If the amount is 50 centavos or more, round up to the next peso (e.g., P 100.50 = P101.00). (Note: In the new form, the spaces for centavos were simply omitted, so instead of writing "101.00," you would simply write "101.")

SECTION 5 - Mandatory Itemized Deductions.

A. Corporations, partnerships and other non-individuals are mandated to use the itemized deductions in the following cases:
  1. Those exempt under the Tax Code, as amended [Section 30 and those exempted under Section 27(C)] and other special laws, with no other taxable income; 
  2. Those with income subject to special/preferential tax rates; and 
  3. Those with income subject to income tax rate under Section 27(A) and 28(A)(1) of the Tax Code, as amended, and also with income subject to special/preferential tax rates. Juridical entities whose taxable base is the gross revenue or receipts (e.g., non-resident foreign international carriers) are not entitled to the itemized deductions nor to the optional standard deduction (OSD) under Section 34(L) of the Tax Code, as amended.

B. Individual taxpayers who are not entitled to avail of the OSD and thus use only the itemized deduction method are as follows:
  1. (BMBEs, take note!) Those exempt under the Tax Code, as amended, and other special laws with no other taxable income [e.g. Barangay Micro Business Enterprise (BMBE)]; 
  2. Those with income subject to special/preferential tax rates; and 
  3. Those with income subject to income tax rate under Section 24 of the Tax Code, as amended, and also with income subject to special/preferential tax rates.

SECTION 6 - Transitory Provisions. (Oh, here comes my favorite part.)

Taxpayers who filed using old forms for their 2013 ITRs (manual and/or electronic) must re-file using the new income tax forms upon their availability. (Re-file. Of course. We business owners really have nothing better to do. We're a non-busy lot, after all.)

SECTION 7 - Repealing Clause.

All existing regulations and other issuances or portions thereof which are inconsistent with the provisions of these Regulations are hereby repealed, amended, or modified accordingly. (Yes, supreme leader.)

SECTION 8 - Effectivity.

These Regulations shall take effect starting the taxable year ended December 31, 2013 and after fifteen (15) days following publication in two (2) newspapers of general circulation.

("Starting the taxable year ended December 13, 2013"? So you mean, like, January 2013? 

Wow. And to think, this was only signed in January 2014 and published on newspapers on February 6, 2014. Wowwwwww. 

Pardon my ignorance, but is this really how these regulations are supposed to work -- take effect now, sign and inform the public a year later?)

(Original Signed)
CESAR V. PURISIMA
Secretary of Finance

Recommending approval

(Original Signed)
KIM S. JACINTO-HENARES
Commissioner of Internal Revenue

Click on the link to download the original text of REVENUE REGULATIONS No. 2-2014.

The Nanay Notebook is written by Blessie Adlaon, a work-at-home and homeschooling mom of four. Check out our About page to know more about this blog's author and our policies on advertising, press releases, and reposting.

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