RMO No. 28-2007: Prescribes the guidelines and procedures in the transmittal and processing of the Annual Information Return on Income Taxes Withheld on Compensation and Final Withholding Taxes, Annual Information Return of Creditable Taxes Withheld-Expanded/Income Payments Exempt from Withholding Tax and monthly/quarterly/transactional remittance returns with the Monthly Alphalist of Payees and returns required to have Summary Alphalist of Withholding Agents of Income Payments Subjected to Tax Withheld at Source under Revenue Regulations No. 2-2006 and procedures in the extraction, matching, analysis, dissemination, utilization of payor/payees data including monitoring the extent of compliance of withholding agents and income recipients subject to Withholding Tax through the Tax Reconciliation System

Key points

1. Coverage. The Order covers annual information returns (BIR Form Nos. 1604-CF and 1604-E) encoded or uploaded for calendar year 2005 and after, and withholding tax returns and income recipients’ returns with attached MAP or SAWT beginning January 2006. Large taxpayer returns are processed by the LTS. Other returns are processed by the Withholding Tax Division during the pilot stage and by RDOs afterwards.
2. RDO handling. Computerized RDOs in Metro Manila no longer send original hard copies of the 2006 and later BIR Form Nos. 1604-CF, 1604-E and 1600 to the WTD. RDOs must encode or upload returns and alphalists into the ITS within 30 days for monthly, quarterly or transactional returns and 60 days for annual returns from receipt. They are to encourage e-submission.
3. Matching of income figures. The income figure from TRS matching is compared with the figure from the RELIEF System. The higher of the two is presumed the correct sales, revenue or income of the payee.
4. TRS Letter Notices. TRS-LN discrepancies are resolved by the LTS audit divisions for large taxpayers and by the WTD for regional taxpayers during the pilot stage. The PAN or FAN is signed by the DCIR-Operations Group after review by the ACIR-Collection Service.
5. Effect on amendment of returns. A TRS-LN is treated as a Letter of Authority for purposes of amending returns. Returns for the covered periods can no longer be amended, and no late compliance return may be filed if none was filed.
6. Payment and later audits. In the pilot phase, taxpayers pay the deficiency income tax plus the VAT and Percentage Taxes from the discrepancy. Payment does not bar a comprehensive audit, but it is credited against later assessments of discrepancies of the same nature for the same year.

Who is affected

• Withholding agents
• Income recipients with attached SAWT
• Large taxpayers
• Revenue District Offices

Deadlines and effectivity

• Annual information returns for calendar year 2005 and subsequent years
• Withholding tax returns beginning January 2006
• Encoding within 30 days (monthly, quarterly, transactional) or 60 days (annual) from receipt