RMC No. 23-2022: Suspends the Income Tax incentives granted to Registered Business Enterprises (RBEs) for violating the Work-From-Home (WFH) threshold as prescribed by the Fiscal Incentives Review Board

Key points

1. Suspension of incentives. Non-compliance with FIRB Resolution Nos. 19-21 and 23-21 suspends the income tax incentive on revenue for the months of non-compliance. The RBE pays income tax at the regular rate of twenty-five percent (25%) or twenty percent (20%) on taxable net income for those months.
2. Voluntary payment. RBEs with no existing transactions at the regular rate use BIR Form 1702-MX. RBEs with such transactions pay through BIR Form 0605 and attach the bank-validated copy to the Annual Income Tax Return. The tax is the net taxable income for the year divided by 12 months, multiplied by 25% or 20%.
3. Audit. An RBE that makes no voluntary payment, or an insufficient one, is audited under a Letter of Authority.
4. Meaning of total workforce. It means employees directly or indirectly engaged in the registered project or activity. Third-party contractors such as janitorial or security service contractors are excluded.
5. Reports to the BIR. The FIRB endorses the monthly reports (Annex A) from Investment Promotion Agencies on violations to the BIR Assessment Service, Attention: AITEID, or by email at aiteid_ies@bir.gov.ph.

Who is affected

• IT-BPM sector Registered Business Enterprises that violated the WFH threshold

Deadlines and effectivity

• Takes effect immediately until March 31, 2022, pursuant to FIRB Resolution No. 19-2021