Tax notes: Guidelines on change of accounting period

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Monday, April 4, 2011

WITH the issuance of Revenue Regulations (RR) No. 3-2011, the Bureau of Internal Revenue (BIR) issued the following guidelines and procedures on taxpayers’ application for a change in accounting period:

A. Documentary requirements

The following documents must be submitted upon filing of application for change in accounting period:


1. Letter request indicating the original and proposed new accounting period and the reason for the change addressed to the Revenue District Office (RDO) having jurisdiction over the taxpayer’s place of business;

2. Duly filled-up BIR Form No. 1905;

3. Certified true copy of the Securities and Exchange Commission (SEC) approved amended by-laws which shows the change in accounting period;

4. Sworn statement of non-forum shopping; and,

5. Sworn undertaking by a responsible officer of the taxpayer to file a separate final or adjustment return for the period between the close of the original accounting period and the date designated as the close of the new accounting period on or before the 15th day of the fourth month following the end of the period covered by the final/adjustment return.

B. Procedures for processing of application

The request for change in accounting period should be filed not less than 60 days prior to the beginning of the proposed new accounting method. Pre-evaluation process will begin at the RDO level to determine the completeness of the application and compliance with the prescribed guidelines before transmitting the complete documents within 5 days from its receipt to the Legal Division of the Revenue Region for evaluation.

After evaluation, the Legal Division will sign a Memorandum Indorsement for the regional director’s issuance of a Certificate Granting the Change in Accounting Period. If the application is in order, the regional director will issue the certificate approving the adoption of a new accounting period within 30 days from the date of receipt of the complete documentary requirements.

(Source: Punongbayan & Araullo)

Published in the Sun.Star Cebu newspaper on April 05, 2011.


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