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RMC No. 20-2022: Provides guidance on the filing of Requests for Confirmation, Tax Treaty Relief Applications and Tax Sparing Applications

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Summary

RMC No. 20-2022 gives guidance on filing Requests for Confirmation (RFC), Tax Treaty Relief Applications (TTRA) and tax sparing applications, to reduce repeat filings with the International Tax Affairs Division (ITAD).

Key points

  1. No repeat filing. Taxpayers holding a Certificate of Entitlement to Treaty Benefit (COE) that covers future income payments no longer file an RFC or TTRA for each similar payment to the same nonresident. The payor follows the requisites in the COE, such as requiring a Tax Residency Certificate for the relevant year before paying if the COE names tax residency as a requisite. The same applies to the Certificate of Entitlement to the Reduced Dividend Rate for tax sparing.
  2. When to file anew. A new RFC, TTRA or tax sparing application is filed only if any requisite stated in the certificate is absent.
  3. During tax audit. The income payor presents the COE and proof that its requisites are met. The tax auditor checks authenticity and may ask ITAD for help in case of doubt.
  4. Types of income still filed regularly. Business profits, income from services (dependent or independent), capital gains, teachers’ income and other non-recurring income still require RFCs or TTRAs under RMO No. 14-2021, as amended by RMC No. 77-2021.
  5. Annual update for long-term service contracts. The taxpayer submits only the nonresident’s Tax Residency Certificate for the relevant year and a sworn certification (Annex A) on the services, place of performance, individuals who rendered them and their duration of stay. Other items, where applicable, are passport copies or a Bureau of Immigration certification, a certificate of completion, invoices and bank payment documents.

Who is affected

  • Income payors and withholding agents
  • Nonresident income payees
  • Tax auditors

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.

Related issuances

CitesRMC No. 77-2021RMO No. 14-2021

Copies of BIR issuances are hosted here for reference. For the official version, check bir.gov.ph. Summaries by Tax Resources PH are not a substitute for the full text or professional advice.