Tuesday, June 10, 2008 Tax notes: Delisting of large taxpayers
RECENTLY, a number of large taxpayers were transferred from the supervision of the Large Taxpayers Service (LTS) to the Regional Offices of the Bureau of Internal Revenue (BIR).
The purpose of the transfer was to bring down the load of the LTS at a manageable level in order to effectively monitor taxpayers’ tax compliance.
Taxpayers affected by the delisting from the LTS’ jurisdiction were sent letters notifying them of the Revenue District Office (RDO) to which they now belong to.
The BIR has issued an order to involve the National Investigation Division (NID) and Policy Cases Division (PCD) of its Enforcement Service in the audit and investigation of the said “delisted” large taxpayers. The deputy commissioner for the Legal and Inspection Group has been authorized to select the taxpayers that may be issued Letter of Authority (LOA) for the tax audit by NID and PCD of taxpayers’ tax liabilities for the year 2006. (Revenue Memorandum Order 16-2008, April 18, 2008)
The “delisted” large taxpayers, however, may continue to file their tax returns and pay their taxes through the Electronic Filing and Payment System (EFPS). Likewise, they continue to be classified as top 10,000 corporations for withholding tax purposes. (Revenue Memorandum Circular 38-2008, May 13, 2008)
A large taxpayer is a taxpayer who has been classified as such, and has been duly notified by the BIR Commissioner as having satisfied any or a combination of the following criteria:
1. Any taxpayer with total annual gross sales/receipts of P1 billion;
2. Any taxpayer with a total net worth at the close of each calendar or fiscal year of at least P300 million;
3. Any taxpayer with net value-added tax (VAT) paid or payable or percentage taxes of at least P100,000 per quarter;
4. Any taxpayer with annual income and withholding tax paid or payable of at least P1 million;
5. Any taxpayer with annual excise tax paid or payable of at least P1 million; or
6. Any taxpayer with aggregate annual documentary stamp taxes of at least P1 million. (Source: Punongbayan & Araullo)
