RMO No. 32-2004: Provides guidelines and enforcement measures to determine the correct tax liability of motels

Key points

1. Declaration under oath. Motels submit a Declaration under Oath of the number of motel rooms and room rates per class within 30 days from the issuance of the Order, or on or before January 31 in the succeeding years.
2. Occupancy rate condition. The occupancy rate reported each month must be equal to or greater than 1.5 or the average turnover for the whole year 2003, whichever is higher. Occupancy rate is gross sales declared in the VAT/Income Tax Return divided by the gross room rate for the month, which is the sum of rooms times rate per room per class, multiplied by the days in the month.
3. Basis of computation. The room numbers and rates come from the Declaration under Oath as verified correct by the Bureau.
4. Surveillance and enforcement. Motels that fail the conditions are subject to surveillance or other enforcement by the RDO, Large Taxpayers Service or Large Taxpayers District Office with jurisdiction, upon the Commissioner’s approval. This may include posting BIR personnel at the premises to determine the volume of transactions over a period.
5. Amended returns. Motels may amend their VAT and Income Tax Returns for January to June 2004 without penalties and interests. The amendment and tax payment must be made on or before July 15, 2004, and the amendments may only pertain to gross sales.

Who is affected

• Motels

Deadlines and effectivity

• Declaration: within 30 days from issuance, or on or before January 31 of succeeding years
• Amended January to June 2004 returns: on or before July 15, 2004