Annual ITR due this April

In the Philippines, April is the month when days start to become warmer, signaling a full-on transition to hot summer months, and people aspire to laze by the beach with a cool drink in hand. However, for working Filipinos, April is also the time for filing and paying their annual Income Tax Returns (ITR) with their friendly neighborhood Revenue District Office and its Authorized Agent Bank (AAB) or via electronic filing through the Bureau of Internal Revenue’s (BIR) electronic filing and payment (eFPS) system.

In 2020, most of the country was under enhanced community quarantine, then the strictest level of cordon sanitaire measures implemented to help curtail the COVID-19 pandemic, which compelled the BIR to extend the deadline for filing and payment of the 2019 ITR to account for the mobility restrictions faced by taxpayers during that period.

In 2021, however, the BIR resolved to follow the usual deadline for the 2020 ITR filing due to the gradual easing of restrictions in the country. This year, the BIR did not announce an extension in the filing and payment of the 2021 ITR as most of the country is now under the most lenient level of health restrictions it has been in the past two years, which hopefully brings us a step closer to business as usual.

Filing annual ITR

For the BIR, it is indeed back to business as usual since the deadline for payment and filing of our 2021 ITR is on April 18, given that the annual April 15 deadline falls on Good Friday this year. Individuals earning purely compensation income and self-employed individuals, or mixed income earners must accomplish, file, and pay any taxes due on their BIR form 1700 and BIR form 1701, respectively.

Individual income taxpayers who receive pure compensation income from one employer during the taxable year and have had their income tax already correctly withheld by said employer need not file their own ITR as our Tax Code allows substituted filing thereof. The employers will fill out BIR form 2316, in triplicate, for employees covered by this rule and provide the employee and BIR a copy each.

Fortunately, all the BIR forms are available online on the agency’s official website for easy downloading. Taxpayers may also utilize eBIR forms, a tax preparation software, for ease in filling out the forms for submission to the BIR within the same system. The BIR eFPS is also available for income taxpayers qualified to use the program for easier tracking and submission of their forms. Lastly, for those not required to file by electronic means who opt to manually file their forms (e.g. BIR form 1700, Form 1701, and 1701), do not forget that these forms are to always be accomplished and filed in triplicates.

Annual reportorial requirements for corporate entities

Corporate taxpayers with fiscal year ending December 31, 2021 have also been advised about the schedule for filing of their Audited Financial Statements (AFS) and General Information Sheets (GIS). In Memorandum Circular 2-2022 (MC 2-2022), the Securities and Exchange Commission (SEC) circularized a number coding schedule based on the last numerical digit of a corporation’s SEC registration or license number, which corporate taxpayers must observe for filing their AFS. The SEC also emphasized its adoption of the use of the Electronic Filing and Submission Tool (eFAST) through which filing of the annual reports shall be done.

Filing of AFS

Under MC 2-2022, all corporations, including branch offices, representative offices, regional headquarters, and regional operating headquarters of foreign corporations, shall file their AFS through the eFAST following the SEC’s new number coding schedule. As such, corporate entities with SEC registration or license number ending in one and two are given from July 1 to 15 to file their AFS; entities with SEC registration or license number ending in three and four are given from July 16 to 31; those with SEC registration or license number ending in five and six are scheduled for August 1 to 15; entities with SEC registration or license number ending in seven and eight are given from Aug. 16 to 31; and those with SEC registration or license number ending in nine and 0 have from Sept. 1 to 15 to file.

It is important to note, however, that the SEC permits all corporate entities to file their AFS regardless of the last numerical digit of their registration or license number on or before the first day indicated in the given coding schedule. On the other hand, corporations that file late or after their scheduled due dates will be accommodated only from Sept. 16 onwards, subject to prescribed penalties computed from the date of the last day of its mandated filing schedule.

Filing of GIS

MC 2-2022 also reiterates the usual filing schedule of the GIS for corporate entities. As such, the GIS must be filed within 30 calendar days from the date the actual annual stockholders’ meeting (for stock corporations) or date of actual annual members’ meeting (for non-stock corporations) was held; or within 30 calendar days from the anniversary of the issuance of a foreign corporation’s SEC License.

Mode of filing

In order to provide additional protection to the SEC’s frontline service personnel against COVID -19, the agency will not accept submission of reports over-the-counter and/or through mail/courier via SENS. All corporations are now required to file the scanned or digital copies of their manually signed or digitally signed reports (AFS and GIS) through the eFAST Facility, following the number coding schedule for the AFS and the period for filing of the GIS. Other reports not available in the eFAST may be submitted through email to [email protected].

Should corporate entities encounter any problem in the enrollment and submission of AFS and GIS in the eFAST, they may reach out to any of the contact numbers provided in the SEC Contact Center webpage.

In view of the upcoming deadlines to submit such requirements to the relevant government agencies, we should all remember that the filing of annual tax income tax returns and annual reports like the AFS and GIS are required by law and must be diligently complied with sooner rather than later.

Milcah Hannah P. Unabia is a supervisor from the tax group of KPMG R.G. Manabat & Co. (RGM&Co.), the Philippine member firm of KPMG International.

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. The views and opinions expressed herein are those of the author and do not necessarily represent KPMG International or KPMG RGM&Co.

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