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RMC No. 86-2016: Publishes the full text of the DOF-DTI Joint Administrative Order No. 1-2016 re: rules and regulations to implement RA No. 10708 (The Tax Incentives Management and Transparency Act)

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Summary

RMC No. 86-2016 publishes the full text of DOF-DTI Joint Administrative Order No. 1-2016, the rules implementing RA No. 10708, the Tax Incentives Management and Transparency Act (TIMTA).

Key points

  1. Electronic filing and payment. Registered Business Entities (RBEs) file returns and pay liabilities by the NIRC deadline using the BIR’s electronic system. Investment Promotion Agencies (IPAs) consider only electronically filed returns for income-based tax incentives where required by applicable rules.
  2. System unavailable. If the electronic system is unavailable, shown by a BIR written advice, RBEs file or pay manually by the statutory deadline, and IPAs accept BIR-stamped returns. After the BIR’s written advice that the system is available, RBEs electronically file the manually filed returns within fifteen (15) days.
  3. RBE and IPA reports. RBEs file an Annual Tax Incentives Report with their IPA within thirty (30) days from the statutory deadline for the Final Adjustment Return and payment. IPA heads send the BIR a master list of all RBEs within thirty (30) days after approval of the rules, updated within thirty (30) days after each calendar year closes. They also send consolidated reports on income-based incentives and on VAT incentives and duty exemptions, due June 14 of the following year for calendar-year and January-November fiscal-year RBEs.
  4. Reports to NEDA. IPA heads submit an Aggregate Annual Tax Incentives Report to the NEDA Secretariat, due August 14 of the following year for the same accounting periods. Other data, such as aggregate incentives claimed, go to NEDA within nine (9) months after the statutory deadline for cost-benefit analysis.
  5. BIR submissions to DOF. On or before September 15 each year, the BIR submits to the DOF the tax incentives of RBEs per their filed annual returns, without RBE names or other identifiers per Section 270 of the NIRC. Within ninety (90) days after the period to assess lapses, the BIR updates the report and submits it to the DOF and NEDA Secretariat.
  6. Penalties. An RBE that fails the filing and reporting requirements, or fails to show proof of electronic filing to its IPA, pays P 100,000.00 for the first violation and P 500,000.00 for the second. The third violation brings cancellation of registration. Failure to show proof is not a ground to suspend ITH or other income-based incentives when it is not the RBE’s fault.

Who is affected

  • Registered Business Entities (RBEs)
  • Investment Promotion Agencies (IPAs)
  • BIR, DOF, NEDA Secretariat

Deadlines and effectivity

  • Manual returns filed electronically within fifteen (15) days of the BIR advice
  • Annual Tax Incentives Report to IPA: within thirty (30) days from the Final Adjustment Return deadline
  • First reports for taxable year 2015: RBE to IPA September 15, 2016; IPA to BIR and NEDA November 15, 2016; BIR to DOF January 15, 2017; IPA to NEDA other data March 15, 2017

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

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.