RMC No. 22-2022: Provides Tax Compliance Reminders for the May 9, 2022 National and Local Elections

Key points

1. Registration. Candidates, political parties/party list groups and campaign contributors register with the BIR under RR No. 8-2009, as amended by RR No. 7-2011. Individual candidates use BIR Form No. 1901 and a COMELEC Certificate of Candidacy, parties use Form 1903, individual contributors use Form 1904 under EO No. 98, and non-individual contributors use Form 1903. The Annual Registration Fee is ₱500, and individual candidates not engaged in business need no Certificate of Registration.
2. Books and receipts. Candidates and parties keep and register books such as a Cash Receipts Journal and Cash Disbursement Book, and individual candidates may use simplified records. They register Non-VAT Official Receipts for every contribution, in cash or in kind at Fair Market Value, buying BIR printed receipts or applying for an Authority to Print with Form 1906.
3. Income tax on campaign funds. Contributions used for campaign expenditures during the campaign period are not taxable income. Unutilized or excess funds, and donations used before the campaign period, are taxable: self-employed or professional candidates file Form 1701Q by August 15, compensation earners file Form 1700 by April 15 of the following year, and others file a short-period Form 1700 by August 15. Parties report as domestic corporations, and a failure to file the Statement of Contributions and Expenditures with COMELEC bars deductions.
4. Donor’s tax. Contributions reported to COMELEC are exempt from Donor’s Tax under Section 94(a) of Batas Pambansa Bilang 881 and Section 13 of RA No. 7166, but only if used during the campaign period. Corporate donations that violate Section 36(9) of the Corporation Code are subject to Donor’s Tax and cannot be deducted.
5. Withholding tax. Payments for campaign purchases, such as media, printing, talent fees and rentals, are subject to five percent (5%) Creditable Withholding Tax under RR No. 11-2018, reported on BIR Form 1601-EQ with the Quarterly Alphalist of Payees. Expenses not subjected to this 5% CWT are not treated as utilized campaign funds, and Form 1604-E and the COMELEC-stamped Statement of Contributions and Expenditures are due on or before March 1 following the election year.
6. Records, end of registration and penalties. Records are preserved under Section 235 in relation to Sections 203 and 222 of the NIRC, and the Statement goes to COMELEC and the RDO within thirty (30) days after the election. An individual’s candidate registration ends ten (10) days after the Form 1601-EQ deadline following election day, while parties remain registered unless they update. Violators face penalties under RMO No. 7-2015.

Who is affected

• Candidates
• Political parties and party list groups
• Campaign contributors

Deadlines and effectivity

• Statement of Contributions and Expenditures: within thirty (30) days after the election
• Form 1604-E and COMELEC-stamped Statement: on or before March 1 following the election year
• Unutilized funds (Form 1701Q or short-period Form 1700): on or before August 15
• Unutilized funds of compensation earners (Form 1700): on or before April 15 of the following year