Summary
RMC No. 74-2007 circularizes the unnumbered Memorandum dated November 12, 2007 on the “Table Audit of Pre-need Companies”, which sets the VAT taxable base for these companies.
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Key points
- VAT base. The taxable base of pre-need companies for VAT is gross receipts without any deduction. The contribution is equated to the recorded Reserve of insurance companies, life or non-life. Reserve is not deductible in determining taxable gross direct premium or writing.
- Basis in regulations. These tax treatments were already clarified and reiterated under RR No. 16-2005, as amended.
- Pre-audit and assessment. Revenue officials pre-audit the returns of pre-need companies to confirm they use the correct tax base. Companies found using an incorrect base are immediately issued an Assessment Notice.
Who is affected
- Pre-need companies
- Revenue officials who pre-audit their returns
Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.
Copies of BIR issuances are hosted here for reference. For the official version, check bir.gov.ph. Summaries by Tax Resources PH are not a substitute for the full text or professional advice.