RMC No. 48-2013: Issues tax compliance reminders to participants of the May 13, 2013 midterm elections

Key points

1. Income tax on leftover funds. A self-employed candidate declares unutilized, excess or unreported contributions and donations for the quarter ending June 30, 2013 by August 15, 2013 on BIR Form No. 1701Q, with no further deductions. A purely compensation earner declares them on BIR Form No. 1700 for taxable year 2013 by April 15, 2014. Other candidates file a short-period return for January 1, 2013 to May 13, 2013 on BIR Form No. 1700 by August 15, 2013. Political parties and party-list groups file BIR Form No. 1702Q for the quarter ending June 30, 2013 by August 29, 2013.
2. 5% creditable withholding tax. Under Section 2.57.2(X) of RR No. 2-98, payments by candidates and parties for goods and services as campaign expenditures, and payments by others for goods and services meant as campaign contributions, are subject to 5% CWT. It applies whether the funds are donations or the payor’s own funds. Covered items include media services, printing, talent fees and rentals.
3. Remittance and filing. Candidates, parties and other payors remit the 5% CWT by the 10th day of the following month on BIR Form No. 1601-E and attach the Monthly Alphalist of Payees. By March 1, 2014 they file BIR Form No. 1604E and the Statement of Contributions and Expenditures stamped “Received” by the Commission on Elections. Agents for the election period only file by August 12, 2013.
4. Expenses without the CWT. Expenses on which the 5% CWT was not deducted, remitted or reported are not considered utilized campaign funds.
5. Reminders under RMC No. 15-2013. Registration as special withholding agents ended June 12, 2013, but those in business or practice of profession, including parties and party-list groups, remain regular withholding agents. A report on use of BIR-issued Non-VAT official receipts, and surrender of unused ones, is due not later than August 15, 2013. Records must be kept until May 13, 2016.

Who is affected

• Individual candidates
• Political parties and party-list groups
• Payors of campaign expenditures and contributions

Deadlines and effectivity

• BIR Form No. 1701Q and short-period BIR Form No. 1700: August 15, 2013
• BIR Form No. 1702Q: August 29, 2013
• BIR Form No. 1700 for compensation earners: April 15, 2014
• BIR Form No. 1604E and Statement of Contributions and Expenditures: March 1, 2014 (August 12, 2013 for election-period-only agents)
• Keep records until May 13, 2016