RR No. 16-2003: Imposes advance payment of Value-Added Tax or Percentage Tax and of Income Tax on operators of “privilege stores” (or “tiangges”), as well as prescribes the tax obligations of organizers or exhibitors of space for the operation of “privilege stores”

Key points

1. Advance tax amounts. Operators pay VAT or Percentage Tax of P 150 per day (or P 4,500 per month) and Income Tax of P 50 per day (or P 1,500 per month), collected monthly in advance. If operation lasts less than one month, the payment covers only that shorter period.
2. Credit against actual taxes. The advance payments are credited against the actual business tax and income tax due for the period. The return must carry a filed BIR Form No. 0605 and the Official Receipts/Deposit Slips as proof, or the claim is disallowed and deficiency taxes are assessed.
3. Duties of organizers or exhibitors. They withhold 5% Expanded Withholding Tax on lease payments to the lessor and post their Certificate of Registration in a conspicuous place. They give the RDO a list of participants with names, TINs and CORs, plus the dates and duration of operations. They also ensure registration, withholding remittances and advance payments by operators, and report operators who do not comply.
4. Operators also withhold. Operators must deduct and withhold 5% Expanded Withholding Tax on rent paid to the exhibitor or organizer for sub-leased spaces.
5. Proof of payment. Advance payment is evidenced by a validated BIR Form No. 0605 and the Official Receipt/Deposit Slip from the Authorized Agent Bank, or from the Revenue Collection Officer of the RDO if there is no AAB.

Who is affected

• Operators of “privilege stores” (“tiangges”)
• Organizers or exhibitors of space for privilege stores