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REVENUE MEMORANDUMCIRCULAR (RMC) 2012byNELSON M. ASPEDeputy CommissionerOperations Group12/10/20121

REVENUE MEMORANDUM CIRCULARNo. 22 - ations No. 5-201212/10/20122

RMC No. 22-2012(con’t.)1. All BIR Rulings issued prior to Jan. 1, 1998 are not to beused as precedent by any taxpayer as a basis to securerulings for themselves for current business transaction/s or insupport of their position against any assessment.2. All BIR Rulings issued prior to Jan. 1, 1998 are not to beused by any BIR action lawyer in issuing new rulings forrequest for rulings involving current business transaction/s.3. However, BIR Rulings issued prior to Jan. 1, 1998 remainsto be valid but only:a. to the taxpayer who was issued the ruling; andb. covering the specific transaction/s which is thesubject of the same ruling4. BIR Rulings issued prior to Jan. 1, 1998, shall remain valid asmentioned above, unless expressly notified of its revocation orunless the legal basis in law for such issuance has already beenrepealed / amended in the current Tax Code.12/10/20123

REVENUE MEMORANDUM CIRCULARNo. 23-2012Reiteration of the Responsibilitiesof the Officials and Employees ofGovernmentOfficesfortheWithholding of Applicable Taxes onCertain Income Payments and theImposition of Penalties for NonCompliance Thereof12/10/20124

REVENUE MEMORANDUM CIRCULARNo. 23-2012Reiteration of the Responsibilitiesof the Officials and Employees ofGovernmentOfficesfortheWithholding of Applicable Taxes onCertain Income Payments and theImposition of Penalties for NonCompliance Thereof12/10/20125

RMC No. 23-2012(con’t.)A. ACCOUNTABLE GOVERNMENT OFFICIALS /EMPLOYEESItem II(1) of Revenue Memorandum Order (RMO) No. 8-2003provides that the following government officials/employees arepersonally charged with the duty to correctly withhold taxes andtimely remit the same:“a. Local Government Units (LGUs):a.1 Provincesa.2 Citiesa.3 Municipalitiesa.4 Barangays12/10/2012- Governor, Provincial Treasurer andProvincial Accountant- Mayor, City Treasurer and CityAccountant- Mayor, Municipal Treasurer andMunicipal Accountant- Barangay Chairman and Brgy.Treasurer6

RMC No. 23-2012(con’t.)a. National Government Agencies (NGAs) - Heads ofOffices (officials holding the highest position) andChief Accountant/s or other person/s holding similarpositions in departments, bureaus, agencies,instrumentalities officially designated as such by thehead office.b. Government Owned or Controlled Corporations(GOCCs) – Heads of Offices (officials holding highestposition) and Chief Accountant/s or other person/sholding similar positions officially designated as suchby the head of office.12/10/20127

RMC No. 23-2012(con’t.)c. Other Government Offices - Heads of Offices (officialsholding the highest position) and Chief Accountant/s or otherperson/s holding similar positions officially designated as suchby the head of office.d. Government Offices with Decentralized AccountingSystem and/or Branches/Regional Offices/DistrictOffices Registered with their Respective Revenue DistrictOffices (RDOs) - Heads of such Offices/Regional or DistrictOffices/Other Offices (officials holding the highest position) andChief Accountant/s or other persons holding similar positionsofficially designated as such by the head of office. [Example :a) In case of BIR Regional Offices, it shall be the RegionalDirector and Chief, Finance Division and b) in the case ofDepEd, it shall be the Regional Director and Chief, Budget andFinance Division]”.12/10/20128

RMC No. 23-2012(con’t.)B. RESPONSIBILITIES OF THE GOVERNMENT OFFICIALS /EMPLOYEES AS WITHHOLDING AGENTS.The aforesaid government officials/employees have thefollowing duties and obligations as withholding agents:1. To register the government office as withholdingagent. The government officials/employees should ensurethat the government office is registered as withholdingagent with the BIR through their respective RDOs inconformity with the requirements under Section236(A) ofthe Tax Code of 1997 and the pertinent provisions ofRevenue Regulations (RR) No. 11-2008.12/10/20129

RMC No. 23-2012(con’t.)2. To require employees to submit the duly accomplishedApplication for Registration (BIR Form No. 1902) for newlyhired employees and the Certificate of Update ofExemption and of Employer’s and Employee’s Information(BIR Form No. 2305) for employees with change/s in theirexemption for the calendar year, within ten (1) days uponcommencement of employment or after the change inexemption pursuant to Section 2.79.1 of RR 2-98, asamended, and to submit the same within thirty (30) daysfrom receipt to the concerned RDO.12/10/201210

RMC No. 23-2012(con’t.)3. To withhold the correct amount of tax. Based on theoffice’s registration and where applicable, the governmentwithholding agent should withhold tax on compensation(WTC) [based on the exemption in the Application forRegistration (BIR Form No. 1902) or the Certificate ofUpdate of Exemption and of Employer’s and Employee’sInformation (BIR Form No. 2305) submitted by theemployee], on income payments subject to expandedwithholding tax (EWT) and final withholding tax (FWT) andon government money payment to VAT registered taxpayer(GVAT) and Non-VAT registered taxpayers subject topercentage tax (GPT) pursuant to Sections 80(A), 57 and114, all of the Tax Code.12/10/201211

RMC No. 23-2012(con’t.)4. To remit on time taxes withheld. The responsibleofficials and employees, as withholding agents, should seeto it that taxes withheld are accordingly remitted on orbefore their due dates using the prescribed monthly/quarterly withholding tax remittance returns, together withother attachments.5. To issue the corresponding certificates of taxeswithheld. Certificates corresponding to the taxes withheldfrom the income payments should be issued by thegovernment withholding agents to employees/payees on orbefore their due dates of issuance, whether the taxeswithheld are creditable or not.12/10/201212

RMC No. 23-2012(con’t.)6. To do the year-end adjustment. The governmentwithholding agent shall compute for the year-end adjustment of all its employees, every December of each year,and every time an employee will be separated from theemployment for the particular separated employee, toensure that taxes withheld from each employee isequivalent to his tax due. Deficiency in taxes withheld asagainst the tax due for the calendar year shall be deductedfrom the December salary while excess of taxes withheldover the tax due for the calendar year shall be refunded tothe concerned employee not later than January 25 of thefollowing year. In case of separation from employmentbefore December, the refund shall be given to theseparated employee upon payment of the lastcompensation during the year. Taxes refunded by the12/10/201213

RMC No. 23-2012(con’t.)employer-government agency can be deducted from theremittable amount of taxes withheld in the current monthin which the refund was made and in the succeedingmonths thereafter until the full amount refunded is fullyrecovered.7. To timely file with the BIR, the annual informationreturn and alphabetical lists of employees/payees,if applicable. The government officials/employees shouldensure that the Annual Information Return of IncomeTaxes Withheld on Compensation and Final WithholdingTaxes (BIR Form No. 1604-CF) and the required Alphabetical Lists of Employees/Payees and Annual InformationReturn of Creditable Income taxes Withheld (Expanded)/Income Payments Exempt from Withholding Tax (BIR FormNo. 1604-E) and the required Alphabetical List of Payeesare filed with their respective RDOs on or before January31 and March 1 of the following year, respectively.12/10/201214

RMC No. 23-2012(con’t.)C. Applicable Penalties for Specific Violations1. The following penalties (additions to the tax) are applicable tothe following violations involving all types of withholding taxes:VIOLATION1. Non-withholding oftax2. Under-withholdingof tax12/10/2012APPLICABLE/PENALTYADDITIONS TO THE TAXBASISa. Collection of theamount the withholding agent failedto withholdb. 20% interestSection 251, Tax Codea. Collection of theunderwithheld taxb. 20% interestSection 251, Tax CodeSection 249, Tax CodeSection 249, Tax Code15

RMC No. 23-2012VIOLATION3. Non-remittance oftax withheld4. Late remittance5. Failure to refundexcess taxes withheld (WTC NS TO THE TAXBASISa. Collection of theamount withheld butnot remittedSection 251, Tax Codeb. 20% interestSection 249, Tax Codea. 25% surchargeSection 248, Tax Codeb. 20% interestSection 275, Tax Codea. Collection of excesstax not refundedSection 252, Tax Codeb. Failure to do theyear-end adjustmentSection 275, Tax Code16

RMC No. 23-2012 (con’t.)D. Criminal Liabilities - Aside from the additions to the tax underTitle X, Chapter I of the Tax Code as enumerated above, criminalliabilities shall likewise be imposed for the violations under thefollowing provisions of the Code, as follows:1. Section 255. Failure to File Return, Supply Correct and AccurateInformation, Pay Tax, Withhold and Remit Tax and Refund ExcessTaxes Withheld on Compensation. - Any person required under thisCode or by rules and regulations promulgated thereunder to pay any tax,make a return, keep any record, or supply correct and accurateinformation, who willfully fails to pay such tax, make such return, keepkeep such record, or supply such correct and accurate information, orwithhold or remit taxes withheld or refund excess taxes withheld oncompensation, at the time or times required by law or rules andregulations shall, in addition to other penalties provided by law, uponconviction thereof, be punished by a fine of not less than Ten Thousandpesos (P10,000) and suffer imprisonment of not less than one (1) yearbut not more than ten (10) years.12/10/201217

RMC No. 23-2012(con’t.)2. Section256.PenalLiabilityofCorporations - Any corporation, associationor general co-partnership liable for any of theacts or omissions penalized under this Code,in addition to the penalties imposed hereinupon the responsible corporate officers,partners, or employees, shall, upon convictionfor each act or omission, be punished by afine of not less than Fifty thousand pesos(P50,000) but not more than One hundredthousand pesos (P100,000).12/10/201218

REVENUE MEMORANDUM CIRCULARNo. 29-2012Waiver of the Defense of Prescriptionunder the Statute of LimitationsA waiver of the statute of limitationsunder the Tax Code must conform strictly withthe provisions of Revenue MemorandumOrder No. 20-90 in order to be valid andbinding.12/10/201219

REVENUE MEMORANDUM CIRCULARNo. 32-2012Requests for tax exemption ofprivate contractors for socializedhousing projects under Section 20of Republic Act (R.A.) No. 7279 orthe“Urban Development andHousing Act of 1992”12/10/201220

RMC No. d housing” as follows:defines“(r) “Socialized housing” refers to housingprograms and projects covering houses andlots or homelots only undertaken by theGovernment or the private sector for theunderprivileged and homeless citizenswhich shall include sites and servicesdevelopment, long-term financing, liberalizedterms on interest payments, and such otherbenefits in accordance with the provisions ofthis Act;” (Underscoring supplied)12/10/201221

REVENUE MEMORANDUM CIRCULARNo. 34-2012Clarifying the Tax Implicationsof Integrating the DomesticPassenger Service Charge at thePoint of Sale of Airline Tickets12/10/201222

REVENUE MEMORANDUM CIRCULARNo. 35-2012Clarifying the Taxability ofClubs Organized and OperatedExclusivelyforPleasure,Recreation, and Other Non-ProfitPurposes12/10/201223

REVENUE MEMORANDUM CIRCULARNo. 36-2012Clarification on whether documentsmentioned in Section 199 of the TaxCode of 1997, as amended byRepublic Act (RA) No. 9243, aresubject to the documentary stamp taxof P15.00 as prescribed in Section 188of the said Code.12/10/201224

REVENUE MEMORANDUM CIRCULARNo. 37-2012Clarifying Section 11 of RevenueRegulations (RR) No. 06-08This Circular is issued to clarify Section 11 ofRR No. 06-08 or the “Consolidated RegulationsPrescribing the Rules on the Taxation of Sale,Barter, Exchange or Other Disposition of Sharesof Stock Held as Capital Assets.”12/10/201225

RMC No. 37-2012(con’t.)“SECTION 11. Effect of Non-Payment of Tax. - No sale,exchange, transfer or similar transaction intended to conveyownership of, or title to any share of stock shall beregistered in the books of the corporation unless thereceipts of payment of the tax herein imposed is filedwith and recorded by the stock transfer agent orsecretary of the corporation. It shall be the duty of theaforesaid persons to inform the BIR in case of non-paymentof tax.Any stock transfer agent or secretary of thecorporation or the stockbroker, who caused the registrationof transfer of ownership or title on any share of stock inviolation of the aforementioned requirements shall bepunished in accordance with the provisions of Title X,Chapters I and II of the Tax Code, as amended.” (Emphasissupplied)12/10/201226

REVENUE MEMORANDUM CIRCULARNo. 38-2012Questions and Answers FurtherClarifying the Provisions of RR No. 72010, as amended by RR No. 8-2010,Implementing the Tax PrivilegesProvisions of RA No. 9994, OtherwiseKnown as the“Expanded SeniorCitizens Act of 2010”12/10/201227

RMC No. 38-2012(con’t.)A. ON THE TWENTY PERCENT (20%) SENIORCITIZEN DISCOUNT ON THE SALE OF GOODSAND SERVICESThe 20% discount granted to Senior Citizens on the saleof goods and services provided under the Rules andRegulations implementing RA No. 9994 or the ExpandedSenior Citizens Act of 2010 are discount privileges subjectto the guidelines established by the Department of SocialWelfare and Development (DSWD). However, this Officedeemed it necessary to include in this Circular commo