Professional Documents
Culture Documents
17-2011
When an article locally purchased or imported by an exempt person, such as, but not limited
to, vehicles, capital equipment, machineries and spare parts, has been sold, traded or
transferred to non-exempt persons
Issuance of the formal assessment notice for the payment of the taxpayers deficiency
tax liability shall be sufficient
The audit process commences with the issuance of a Letter of Authority to a taxpayer who has
been selected for audit.
Should cover a taxable period not exceeding one taxable year and prohibits of issuing LOAs
covering audit of unverified prior years
specifies the tax types
RMC 56-2010- Mandatory issuance of electronic Letters of Authority (eLA)
RMO 44-2010 Electronic Issuance of Letters of Authority
!!!!! ANY MANUALLY-WRITTEN CHARACTER ( ALPHABETIC OR NUMERICAL), NOTATION OR
ERASURE SHALL RENDER ELECTRONIC LA INVALID
How many times can a taxpayer be subjected to examination and inspection for the same taxable
year?
"Best Evidence Obtainable" is justified when the following grounds are clearly established:
The reports or records requested from the taxpayer are not forthcoming, i.e. the records are
lost; the taxpayer refuses to submit such records; and the reports submitted are false,
incomplete or erroneous.
Rulings and jurisprudence
1. When an Assessment Based on Estimate is Valid.
"An assessment based on estimate is prima facie valid and lawful where it does not appear to have
been arrived at arbitrarily or capriciously. The burden of proof is upon the complaining party to
show clearly that the assessment is erroneous...". (Marcos vs. C.A., G.R. No. 120880, June 5, 1997)
2. 50% Rule, in the Absence of Receipts to Prove Actual
Amount of Expense Deduction
"if there is a showing that expenses have been incurred but the exact amount of the deduction
cannot be ascertained due to the absence of documentary evidence, it is the duty of the BIR to make
an estimate of the deduction that may be allowed in computing the income, bearing heavily against
the taxpayer whose exactitude is of his own making. That disallowance of 50% of the taxpayer's
claimed deduction is valid." (Zamora vs. CIR, G.R. No. L-15290, May 31, 1963)
3. BIR Ruling on Assessment Based on Estimate
"If no documents of any kind are available or presented by the taxpayer, a comparative
determination of reasonable business expenses incurred by other taxpayers undertaking similar
kind of business should be ascertained to arrive at a reasonable determination of the deductible
business expenses. Under this procedure, the gross profit and net profit ratios of other taxpayers
engaged in the same line of business may be used in estimating the taxpayer's gross profit from
sales and net taxable income." (BIR Ruling No. 031-94, January 31, 1994)
4. Net Worth Method of Investigation
Determination of the taxpayer's taxable net income through the net worth method of investigation
is valid. "The existence of properties appearing in the name of the taxpayer or in the name of his
dummies or friends, without the taxpayer being able to give a definite reasonable explanation for
their existence justifies the Court of Tax Appeals and this Court to resort to the inventory method of
assessment, such being necessary and at the same time just and equitable." (Yao vs. CIR,
G.R. No. L-11875, December 28, 1963)
5. Taxpayer's Accounting Records are not Understandable
"If the authorized bookkeeping system is not understandable to the fieldman of this bureau, the
taxpayer must necessarily have to explain such system. If notwithstanding such explanation the
fieldmen cannot understand its operations, they may disregard such bookkeeping records so kept
and resort to the best evidence available reflecting the operation of the taxpayer." (BIR Ruling No.
572-59, October 19, 1959)
6. In the Absence of Taxpayer's Books of Accounts, Records of the Pertinent Government
Agency on the Industry's Revenue may be Used
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"The income tax return is the best evidence for purposes of the sales tax although it may be
admitted that the same may be of some help in determining the true and correct amount of the
sales tax due. This Office believes that the official determination of the value of production of each
class of fishpond made by the provincial treasurer and assessor of your province should be given
more credence in the absence of the books of accounts and sales tax returns of said owners and
operators." (BIR Ruling No. 245-69, May 17, 1960)
7. When Secondary Evidence Offered by the Taxpayer is
Admissible
"Where a taxpayer questions the correctness of an assessment against him and is apparently not
acting in bad faith or merely attempting to delay payment, but is deprived of the best means of
proving his contention because his books of account were lost by the BIR agent who examined
them, said taxpayer must be given an opportunity to prove by secondary evidence, that the
assessment is incorrect." (Santos vs. Nable G.R. No. L- 12-73. May 23,1961)
Description
Filing Date
BIR Form No. 1901 Application for Registration for Self-Employed and Mixed
Income Individuals, Estates/Trusts
Description
Filing Date
BIR Form No. 1902 Application for Registration For Individuals Earning Purely
Compensation Income, and Non-Resident Citizens / Resident
Alien Employee
Description
Filing Date
BIR Form No. 1903 Application for Registration for Corporations/ Partnerships
(Taxable/Non-Taxable)
Description
Filing Date
BIR Form No. 1904 Application for Registration for One-Time Taxpayer and Persons
Registering under E.O. 98 (Securing a TIN to be able to transact
with any Government Office)
Description
Filing Date
BIR Form No. 1905 Application for Registration Information Update for Updating /
Cancellation of Registration / Cancellation of TIN / New Copy of
TIN card / New copy of Certificate of Registration
Description
Registration.
Filing Date
BIR Form No. 1906 Application for Authority to Print Receipts and Invoices
Description
Filing Date
BIR Form No. 1907 Application for Permit to Use Cash Register machines/Point-of-
Sale Machine
Description
Filing Date
Filed each time taxpayer will use a new cash register machine
unit or point-of-sale machine unit.
TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011
Description
Filing Date
BIR Form No. 1915 Application for Tax Credit Certificate Utilization
Description
Filing Date
BIR Form No. 1916 Tax Practitioner's Application for Accreditation (Individual)
Description
Filing Date
Description
BIR Form No. Annual Income Tax Return for Individuals Earning Purely Compensation
1700 Income (Including Non-Business/Non-Profession Income)
Description
This return shall be filed by every resident citizen deriving compensation income
TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011
from all sources, or resident alien and non-resident citizen with respect to
compensation income from within the Philippines, except the following:
1. An individual whose gross compensation income does not exceed his total
personal and additional exemptions.
3. An individual whose income has been subjected to final withholding tax (alien
employee as well as Filipino employee occupying the same position as that of
the alien employee of regional or area headquarters and regional operating
headquarters of multinational companies, petroleum service contractors and
sub-contractors, and offshore banking units; non-resident alien not engaged in
trade or business).
Filing Date
This return is filed on or before April 15 of each year covering income for the
preceding taxable year.
BIR Form No. Annual Income Tax Return for Self-Employed Individuals, Estates and Trusts
1701
Description
BIR Form No. 1701 shall be filed by individuals who are engaged in
trade/business or the practice of profession including those with mixed income
(i.e., those engaged in the trade/business or profession who are also earning
compensation income) in accordance with Sec. 51 of the Code, as amended. The
annual income tax return summarizes all the transactions covering the calendar
year of the taxpayer.
Filing Date
This return is filed on or before April 15 of each year covering income for the
preceding taxable year.
BIR Form No. Quarterly Income Tax Return for Self-employed Individuals, Estates, and Trusts
1701Q (Including Those with both Business and Compensation Income)
Description
Filing Date
BIR Form No. Annual Income Tax Return for Use ONLY by Corporation, Partnership and
1702-EX Other Non-Individual Taxpayer 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
TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011
Description
Filing Date
This return is filed on or before the 15th day of the 4th month following the
close of the taxpayer's taxable year.
BIR Form No. Annual Income Tax Return for Corporation, Partnership and Other Non-
1702-MX Individual with MIXED Income Subject to Multiple Income Tax Rates or with
Income Subject to SPECIAL/PREFERENTIAL RATE
Description
This return shall be filed by every Corporation, Partnership and Other Non-
Individual Taxpayer with MIXED Income subject to MULTIPLE INCOME TAX
RATES or with income subject to SPECIAL/PREFERENTIAL RATE.
Filing Date
This return is filed, with or without payment, on or before the 15th day of the
4th month following the close of the taxpayer's taxable year.
BIR Form No. Annual Income Tax Return for Corporation, Partnership and Other Non-
1702-RT Individual Taxpayer Subject Only to REGULAR Income Tax Rate
Description
Filing Date
This return is filed, with or without payment, on or before the 15th day of the
TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011
BIR Form No. Quarterly Income Tax Return for Corporations, Partnerships and Other Non-
1702Q Individual Taxpayers
Description
Filing Date
The corporate quarterly income tax return shall be filed with or without
payment within sixty (60) days following the close of each of the first three (3)
quarters of the taxable year whether calendar or fiscal year.
BIR Form No. Annual Income Information Return for Non-Resident Citizens / OCWs and
1703 Seamen (for foreign-sourced income)
Description
An individual citizen of the Philippines who is working and deriving income from
abroad as an overseas worker is taxable only on income from sources within the
Philippines. Income from sources within the Philippines should be filed in either
Form 1700 or Form 1701.
Filing Date
This information return is filed not later than the April 15 of the year following
the taxable year in which the income was earned.
Filing Date
The return shall be filed within 15 days after the close of the year immediately
succeeding taxpayer's covered taxable year.
BIR Form No. Capital Gains Tax Return for Onerous Transfer of Real Property Classified as
1706 Capital Asset (both Taxable and Exempt)
Description
This return is filed by all persons (natural or juridical) whether resident or non-
resident, including Estates and Trusts, who sells, exchanges, or disposes of a real
property located in the Philippines classified as capital asset as defined under
Sec. 39 (A)(1) of RA 8424 for the purpose of securing a Tax Clearance Certificate
to effect transfer of ownership (title) of the property from the seller to the
buyer.
However, filing of the return is no longer required when the real property
transaction involves the following:
To be filed with the RDO having jurisdiction over the place where the property
being transferred is located.
Filing Date
- Filed within thirty (30) days following each sale, exchange or disposition of real
property
- In case of installment sale, the return shall be filed within thirty (30) days
following the receipt of the 1st downpayment and within thirty (30) days
following each subsequent installment payment
- One return is filed for every transfer document regardless of the number of
each property sold, exchanged or disposed of.
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BIR Form No. Capital Gains Tax Return for Onerous Transfer of Shares of Stocks Not Traded
1707 Through the Local Stock Exchange
Description
Filing Date
- Filed within thirty (30) days after each cash sale, barter, exchange or other
disposition of shares of stock not traded through the local stock exchange.
- In case of installment sale, the return shall be filed within thirty (30) days
following the receipt of the first down payment and within (30) days following
each subsequent installment payment.
BIR Form No. Annual Capital Gains Tax Return for Onerous Transfer of Shares of Stock Not
1707-A Traded Through the Local Stock Exchange
Description
Filing Date
- For individual taxpayers, this final consolidated return is filed on or before April
15 of each year covering all stock transactions of the preceding taxable year.
- For corporate taxpayers, this form is filed on or before the fifteenth (15th) day
of the fourth (4th) month following the close of the taxable year covering all
transactions of the preceding taxable year.
b. VAT
Download Description
following taxpayers;
Filing Date
Group B : Twenty
four (24) days
following end of the
month
Group C : Twenty
three (23) days
following end of the
month
Group D : Twenty
two (22) days
following end of the
month
Group E : Twenty
one (21) days
following end of the
month
TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011
Description
Filing Date
This return is filed not later than the 25th day following
the close of each taxable quarter. The term "taxable
quarter" shall mean the quarter that is synchronized to
the income tax quarter of the taxpayer (i.e. Calendar
quarter of Fiscal Quarter)
Description
Filing Date
Group A : Twenty
five (25) days
following end of the
month
Group B : Twenty
four (24) days
following end of the
month
Group C : Twenty
three (23) days
following end of the
month
Group D : Twenty
two (22) days
following end of the
month
Group E : Twenty
one (21) days
following end of the
month
BIR Form No. 2551Q Quarterly Percentage Tax Return
Description
Filing Date
The return shall be filed and the tax paid within twenty
(20) days after the end of each taxable quarter.
BASIC CONCEPT:
APPLICABILITY:
On goods manufactured or produced in the Philippines for domestic sale or consumption or for
any other disposition; and
On goods imported.
Specific Tax refers to the excise tax imposed which is based on weight or volume capacity or
any other physical unit of measurement
Ad Valorem Tax refers to the excise tax which is based on selling price or other specified value
of the goods/articles
MANNER OF COMPUTATION:
In General:
Manufacturer
Producer
Owner/person having possession of articles removed from the place of production without the
payment of the tax
b. On Imported Articles
Importer
Owner
Person who is found in possession of articles which are exempt from excise taxes other than those
legally entitled to exemption
Others:
On Indigenous Petroleum
TIME OF PAYMENT:
In General
On domestic products
TAX AUDIT & INVESTIGATION/grace L. Y./Nov. 17-2011