RR No. 34-2020: Prescribes the guidelines and procedures on the submission of BIR Form No. 1709, Transfer Pricing Documentation and other supporting documents, amending pertinent provisions of Revenue Regulations (RR) Nos. 19-2020 and 21-2002, as amended by RR No. 15-2010

Key points

1. Who files the RPT Form. With the Annual Income Tax Return: Large Taxpayers, taxpayers with tax incentives (BOI-registered and economic zone enterprises, those with Income Tax Holiday or preferential rate), taxpayers with net operating losses in the current and immediately preceding two (2) consecutive years, and related parties transacting with them. Key management personnel no longer file, and their transactions need not be reported.
2. Short period returns. The RPT Form is still filed for short period returns, but compliance is mandatory only for short period returns filed in 2021 and later.
3. When TPD is mandatory. For the covered taxpayers: annual gross sales revenue above ₱ 150,000,000 and related party transactions above ₱ 90,000,000; or related party sales of tangible goods above ₱ 60,000,000, or services, interest, intangibles or other transactions above ₱ 15,000,000.00, in the taxable year. It is also mandatory if TPD was required the preceding taxable period for exceeding either test.
4. Computation of thresholds. Amounts received, receivable, paid or payable to related parties are counted, excluding compensation of key management personnel, dividends and branch profit remittances. Outstanding balances of loans and non-trade amounts are included. Transactions under an Advance Pricing Agreement need not be disclosed in the RPT Form but are counted.
5. Submission of TPD. TPDs and supporting documents under Section 6 of RR No. 19-2020 are no longer attached to the RPT Form. They are submitted within thirty (30) calendar days from receipt of a request under a Letter of Authority covering all internal revenue taxes, with a non-extendible 30 calendar days on meritorious grounds.
6. Others. Taxpayers not covered disclose in the Notes to the Financial Statements that they are not covered by the related party transaction requirements. The simplified BIR Form No. 1709 replaces the old form.

Who is affected

• Large Taxpayers
• Taxpayers enjoying tax incentives
• Taxpayers with net operating losses in the current and preceding two years
• Related parties transacting with those taxpayers

Deadlines and effectivity

• RPT Form filed with the Annual Income Tax Return
• Short period returns mandatory for those filed in 2021 and later
• TPD submitted within 30 calendar days from receipt of request