Tax Notes: EOPT is here: Updates on preservation of book of accounts; changes in taxpayer registration

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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, or the Ease of Paying Taxes (EOPT) Act. This edition of Tax Notes discusses matters relating to the preservation of the book of accounts and changes in taxpayer registration, covered under Sections 4 and 5 of RR 7-2024.

Preservation of books of accounts

All books of accounts and other accounting records of taxpayers shall be preserved for a period of five years from the day following the deadline for filing a return, or if filed after the deadline, from the date of the filing of the return, for the taxable year when the last entry was made in the books of accounts.

For manual or loose-leaf books of accounts, preservation shall be in hard copies, while for computerized books, preservation shall be in electronic copies.

However, if the taxpayer has any pending protest or claim for tax credit/refund of taxes and the books and records concerned are material to the case, the taxpayer is required to preserve the books of accounts and other accounting records until the case is finally resolved, even beyond the prescribed five-year retention period.

For audited records and certified financial statements of the taxpayer, the independent certified public accountant (CPA) has the responsibility to maintain and preserve electronic copies of the audited and certified financial statements, including the audit working papers, for a period of five years from the due date of filing the annual income tax return or the actual date of filing thereof, whichever comes later.

Examination and inspection

Examination and inspection of the book of accounts and other accounting records shall be made only once in a taxable year by internal revenue officers, except for the following cases:

(a) Fraud, irregularity, or mistakes, as determined by the Commissioner;

(b) The taxpayer requests reinvestigation;

(c) Verification of compliance with withholding tax laws and regulations;

(d) Verification of capital gains tax liabilities; and

(e) In the exercise of the Commissioner’s power under Section 5(B) of the Tax Code.

For the book of accounts of tax-exempt organizations or grantees of tax incentives, examination shall be conducted by the BIR for purposes of ensuring compliance with the conditions under which they have been granted tax exemptions or tax incentives, and their tax liability, if any.

Examination and inspection of the books of accounts and other accounting records shall be done in the taxpayer’s office or place of business or in the office of the BIR.

Manner and Time of Registration

Every person subject to any internal revenue tax shall register, either electronically or manually, with the Revenue District Office (RDO) as follows:

* For self-employed individuals, estates and trusts, corporations, and their branches - on or before the commencement of business.

* For corporations (Taxable or Non-taxable)/ One Time Transaction (Onett) - before payment of any tax due.

* For corporations, partnerships, associations, cooperatives, Government Agencies, and Instrumentalities (GAIs) - before or upon filing any applicable tax return, statement, or declaration.

* For newly hired employees with no existing tax identification number (TIN) - Within 10 days from date of employment for Employees.

* For individuals required to secure TIN for transactions with government agencies - application under Executive Order 98, series of 1999.

Place of Registration

Taxpayers shall be registered either electronically or manually with the appropriate RDO. In case of system downtime, technical issues or errors, manual applications for registration shall be processed at the concerned BIR offices.

Registration of Business Taxpayers

All persons engaged in business or practice of profession, self-employed and professionals not under employer-employee relationship, juridical entities, online sellers/merchants including those engaged in providing digital goods and services, unless otherwise exempt, shall:

1.Register and secure their BIR Certificate of Registration

2.Comply with the invoicing requirements:

a.For manual issuance of invoice – secure Authority to Print (ATP) or BIR Printed Invoice

b.For computer-aided issuance – secure Permit to use loose leaf invoice and ATP

c.For Computerized Accounting System (CAS) – secure Acknowledgement Certificate

3.Comply with bookkeeping requirements

a.For manual – register books of accounts

b.For loose-leaf and CAS – register books of accounts within the prescribed period

4.Secure “Notice to Issue Invoices”

5.Attend the taxpayer’s initial briefing conducted by the respective RDOs on the rights and obligations of newly registered businesses

Registration of business name

Each Business Name used, including the “store name” for any online store or e-commerce platform, shall be registered with the BIR and shall be reflected in the BIR Certificate of Registration. It should also be registered with the Securities and Exchange Commission (SEC) or Department of Trade and Industry (DTI), as evidenced by a valid DTI Certificate of Business Name Registration or SEC Certificate of Registration or Articles of Incorporation or Partnership.

BIR business registration date

The BIR Business Registration shall be reckoned from the date when the taxpayer registered its business and/or Business Name as reflected in the BIR Certificate of Registration.

Issuance of certificate of registration

Each head office, branch, and facility shall be issued a Certificate of Registration or Electronic Certificate of Registration within the period/time prescribed in the BIR Citizen’s Charter upon submission of complete documentary requirements.

Employees, Onett taxpayers, individuals who have secured a TIN under EO 98, and/or non-business taxpayers, non-business Estate, and Trust shall not be issued a Certificate of Registration.

A P30 Documentary Stamp Tax (loose DST) shall be paid upon issuance of the BIR Certificate of Registration or Electronic Certificate of Registration.

Posting of Certificate of Registration

Original COR/Electronic Certificate of Registration (eCOR) shall be posted at the place where the business is conducted and at each branch and/or facility in a way that is clearly and easily visible to the public. In case of a peddler or other personsappli not having a fixed place of business, the COR/eCOR shall be kept in the possession of the holder thereof, at the place of residence, or at the Head Office’s address.

Online businesses, sellers or merchants, and service providers operating a business through a website, social media, or any digital or electronic means, shall display an electronic copy of the BIR Certificate of Registration on their website, seller/merchant’s account or profile pages of the e-commerce platform or mobile application.

Registration and cancellation of registration of Internal Revenue Tax

The taxpayer must register each type of internal revenue tax for which such person is obligated; file a return, pay the tax due either electronically or manually, and update such registration of any changes. For cancellation of registration, such can be done through mere filing, either electronically or manually, of an application for registration information update.

Effectivity

These provisions took effect 15 days following their publication in the Official Gazette or the BIR official website, whichever came first. The BIR website posted the Revenue Regulation on April 12, 2024.

Please be guided accordingly.

Source:

P&A Grant Thornton

Certified Public Accountants

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