RMO No. 16-2010: Prescribes the policies and guidelines in determining the output Value-Added Tax liabilities of motels and other similar establishments

Key points

1. Sworn Declaration. Motels file a Sworn Declaration with their registering Revenue District Office within 10 days from issuance of the Order, then every year on or before January 31.
2. OTAR and prescribed revenues. The RDO computes the prescribed revenues per month and prepares an Occupancy Turnover Analysis Report (OTAR) not later than the last day of February each year. The minimum turnover per day is a constant factor of 2 for peak months (January to February, April to June, and December) and 1.5 for the remaining months.
3. Notice and option to amend. The RDO notifies the motel of the proposed additional output tax for each month. The motel may amend its VAT Returns and pay the additional output tax within ten (10) days from receipt of the notice, and the amended returns must also cover gross sales or receipts from its other operations.
4. Mission Order and surveillance. If the motel does not amend, the RDO recommends a Mission Order for surveillance or other enforcement measures. These may include posting BIR personnel at the premises for not less than 10 days.
5. Oplan Kandado and RATE. If surveillance shows taxable gross sales understated by 30% or more of the correct taxable sales for the quarter, the motel is subject to the Oplan Kandado procedures in RMO No. 3-2009. Sanctions under Oplan Kandado do not stop the BIR from filing tax evasion charges under the Run After Tax Evaders (RATE) Program if evidence requires.

Who is affected

• Motels and similar establishments that regularly allow stays of less than 24 hours
• Revenue District Offices

Deadlines and effectivity

• Sworn Declaration: within 10 days from issuance, then each January 31
• OTAR completed: not later than the last day of February each year
• Payment after notice: within ten (10) days from receipt