Tax Notes: EOPT is here: Revised rules on tax filing and payment and matters affecting the declaration of taxable income

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THE Bureau of Internal Revenue (BIR) has released a series of Revenue Regulations (RR) for the implementation of Republic Act 11976, otherwise known as the Ease of Paying Taxes Act (EOPT). This edition of Tax Notes discusses matters relating to the declaration of taxable income, highlighting the removal of withholding requirement and the definition of “payable” for withholding tax purposes covered under RR No. 4-2024, as posted by the BIR on April 12, 2024.

Mode of filing of tax returns and payment of taxes

Filing of tax returns will be done electronically on any of the available electronic platforms. Only in the event of the unavailability of electronic platforms will manual filing be allowed.

On the other hand, tax payments will either be made electronically in any of the available electronic platforms or manually to any Authorized Agent Banks and Revenue Collection Officers.

Hence, the civil penalty of 25 percent of the amount due in case of filing a tax return with an internal revenue officer other than those with whom the return is required to be filed (i.e., wrong venue filing) will no longer be imposed.

Removal of withholding requirement

as a requirement for deductibility of expense

The requirement that states a deduction is allowed only if it is shown that the tax required to be deducted and withheld therefrom has been paid is repealed. Hence, remittance of the withholding tax is no longer a requisite for deductibility of expense for income tax purposes.

Nevertheless, the obligation to withhold tax on certain income payments and remit the same remains.

Timing of withholding

The term “payable” refers to the date the obligation becomes due, demandable, and legally enforceable. As such, the timing of withholding is at the time an income payment is accrued or recorded as an expense or asset, whichever is applicable, in the payor’s books, or at the issuance by the seller of the sales invoice or other adequate document to support such payable, whichever comes first.

Effectivity

The removal of withholding requirement as a requirement for deductibility of expense was effective upon the effectivity of the EOPT Act, which was on Jan. 22, 2024.

The rest of the provisions stated in RR 4-2024 were effective on April 27, or 15 days from April 12, which was the date of posting on the BIR website.

Please be guided accordingly.

Source:

P&A Grant Thornton

Certified Public Accountants

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