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RMO No. 37-2024: Policies, Guidelines and Procedures in Classifying Business Taxpayers pursuant to Revenue Regulations No. 8-2024

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Summary

RMO No. 37-2024 prescribes policies, guidelines and procedures for classifying business taxpayers under RR No. 8-2024. It sets the size classes, the initial classification rules, and how taxpayers are reclassified.

Key points

  1. Classes by gross sales. Micro is gross sales for a taxable year below Three Million Pesos (₱3,000,000.00). Small is from ₱3,000,000.00 to below Twenty Million Pesos (₱20,000,000.00). Medium is from ₱20,000,000.00 to below One Billion Pesos (₱1,000,000,000.00). Large is ₱1,000,000,000.00 and above.
  2. Initial classification. Taxpayers registered in 2022 and earlier are classified by gross sales in their taxable year 2022 ITR. Those without a 2022 ITR, and those registered in 2023 and 2024 before April 27, 2024, start as MICRO, except VAT-registered taxpayers, who start as SMALL. Those registering after April 27, 2024 are classified by the declaration in BIR Form No. 1901 or 1903.
  3. Special cases. For mixed-income earners, only business income as defined in Section 2 of RR No. 8-2024 counts. Branches follow the classification of the Head Office.
  4. Taxpayer-initiated reclassification. Requests go through the Head Office via ORUS or manually to the home RDO. Requests from lower to higher classification are processed automatically for approval. Within 90 days after RR No. 8-2024 took effect (April 27 to July 26, 2024), proof of 2022 gross sales is submitted. After July 26, 2024, proof of gross sales for the last two (2) years is submitted.
  5. BIR-initiated reclassification. The DCIR-OG can start reclassification every two (2) years, based on latest filed ITRs or VAT returns. RDOs or LTS Divisions may recommend reclassification to the Regional Director or ACIR-LTS, who approves or disapproves it. The new class takes effect on the taxpayer’s receipt of notice, subject to the outcome of any pending audit or assessment that may significantly affect it.
  6. Limits on later requests. A taxpayer reclassified by the BIR cannot request reclassification in the same taxable year, unless there are verified meritorious reasons. Requests are filed before the Regional Director or ACIR-LTS, whose decision is final and unappealable.

Who is affected

  • Business taxpayers
  • Mixed-income earners (business income only)
  • Taxpayers with branches (follow Head Office)

Deadlines and effectivity

  • RR No. 8-2024 effective April 27, 2024
  • 90-day window: April 27, 2024 to July 26, 2024
  • National Office reclassification every two (2) years

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

Related issuances

CitesRR No. 8-2024

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.