RMC No. 92-2018: Clarifies the filing of tax returns of accredited Microfinance Non-Government Organizations

Key points

1. Purely microfinance operations. The 2% tax on gross receipts is declared as income tax using BIR Form Nos. 1702Q (quarterly) and 1702MX (annually). Business tax does not apply, since the 2% tax is in lieu of all national taxes.
2. MF-NGOs with other income. Non-microfinance income is taxed at 30% or the 2% MCIT, whichever is higher, on the 1702Q and 1702MX. Business tax on that income is 3% percentage tax (Form 2551Q) if non-VAT, or 12% VAT (Form 2550M/2550Q) if VAT-registered.
3. ATC to use. ATC-IC210 is used for manual filing of income tax returns on microfinance income. Those on eFPS or eBIRForms use ATC-IC011 pending enhancement of the forms.
4. Registration update. MF-NGOs register or update the applicable tax and form types, or cancel the previously registered Percentage Tax type, using BIR Form No. 1905 at their Revenue District Office.
5. 2018 quarterly return treatment. MF-NGOs that paid the 2% tax on Forms 2551M/2551Q for the 1st to 3rd quarters of 2018 report the cumulative gross receipts in the 3rd Quarter 1702Q under the Special Rate column. Those payments go in item no. 31G as tax credits. Non-microfinance gross receipts for the same quarters go under the Regular Rate column.

Who is affected

• Accredited MF-NGOs
• MF-NGOs with non-microfinance income

Deadlines and effectivity

• 3rd Quarter 2018 1702Q covers cumulative 1st to 3rd quarter 2018 gross receipts