RMC No. 31-2019: Reiterates the tax compliance requirements of candidates, political parties/party list groups and campaign contributors

Key points

1. Registration. They register or update with the RDO having jurisdiction over their residence or head/principal office, following RMC No. 38-2018. Individual candidates register as Professional to get an Authority to Print Receipts/Invoices.
2. Candidates and parties must. Pay an Annual Registration Fee of Five Hundred Pesos (P500.00), register Non-VAT Official Receipts for every contribution (cash or in kind at Fair Market Value), and preserve records for three (3) years from the close of the taxable year of the election. Individual candidates not engaged in business need no Certificate of Registration.
3. Books. Political parties/party list groups register and keep books such as a Cash Receipts Journal and Cash Disbursements Book or equivalent. Individual candidates may use a simplified set that gives accurate information.
4. 5% withholding. Campaign expenditure payments, and purchases intended as campaign contributions, are subject to five percent (5%) Creditable Withholding Tax and a BIR Form No. 2307 issued to the payee. Remittance uses BIR Form No. 0619-E by the 10th day for the first two months of the quarter, and BIR Form No. 1601-EQ by the last day of the month after quarter end. BIR Form No. 1604-E with the COMELEC-stamped Statement of Contributions and Expenditures is due on or before March 1 following the election year.
5. Tax effects. Expenses not subjected to 5% CWT are not utilized campaign funds, so the full amount is unutilized campaign funds subject to Income Tax with no further deduction. Only contributions spent during the COMELEC campaign period are exempt from Donor’s Tax, and failure to file the Statement with COMELEC makes the entire amount subject to Income Tax.
6. After the election. 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 BIR Form No. 1601EQ deadline, and political parties/party list groups subsist unless they update their registration.

Who is affected

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

Deadlines and effectivity

• Statement of Contributions and Expenditures within 30 days after the election
• Form 1604-E and Statement on or before March 1 following the election year
• Candidate registration ends 10 days after the 1601EQ deadline