RMC No. 56-2008: Clarifies the procedure on the handling of taxpayer’s application for cancellation of business registration and issues warning on the use of Official Receipts/Sales Invoices of dissolved businesses for purposes of claiming input taxes

Key points

1. When closure is granted. A “Notice of Closure or Cessation of Business” filed with the RDO where registered is granted on voluntary closure, dissolution of a partnership or corporation, merger or consolidation dissolving the absorbed entity, or death of an individual under a sole proprietorship.
2. Lists to submit. Upon filing, the taxpayer submits for evaluation a list of inventory of goods, supplies and capital goods, a list of unused Sales Invoices, Official Receipts and other accounting forms, and a list of certificates, permits and notices issued by the BIR.
3. Surrender of forms and documents. On effectivity of the closure, the taxpayer surrenders unused invoices, receipts and forms for destruction, and BIR-issued notices, permits and Certificate of Registration for cancellation. This is done at the RDO where registered or where the ATP was secured, and for a Head Office and branches, at the Head Office RDO.
4. Destruction and cancellation. BIR personnel destroy the forms in the taxpayer’s presence and return them with a directive to dispose of them properly. The taxpayer is warned of liability if the documents are later used as a source of spurious input taxes. Surrendered notices and permits are stamped “CANCELLED” and returned to the taxpayer.
5. RDO actions. On the effective date of closure, the RDO “end dates” all tax types of the taxpayer. The Head Office RDO informs the branch RDOs and submits a monthly report of closures to the Taxpayer Assistance Service, Attention: Chief, TSPMD, for a Revenue Memorandum Circular listing the taxpayers who ceased operations each month.

Who is affected

• Taxpayers closing or ceasing business
• Partnerships and corporations that dissolve
• Taxpayers using invoices or receipts of dissolved businesses to claim input taxes

Deadlines and effectivity

• Surrender of forms and documents on effectivity of closure
• RDO end-dates tax types on effective date of closure
• Head Office RDO reports closures monthly