RR No. 17-2010: Consolidates the regulations implementing RA No. 7646, which authorizes the Commissioner of Internal Revenue to prescribe the place for payment of internal revenue taxes by large taxpayers, and prescribes the coverage and criteria for determining large taxpayers

Summary

RR No. 17-2010 consolidates the regulations implementing Republic Act No. 7646 on the place of payment of internal revenue taxes by large taxpayers, and sets the coverage and criteria for classifying large taxpayers.

Key points

1. Who is a Large Taxpayer. A Large Taxpayer is a taxpayer, wherever located, that the CIR has classified and notified in writing as meeting any or a combination of the criteria. Additional taxpayers may be selected, and those classified stay covered unless the CIR notifies them in writing of delisting.
2. Automatic candidates. Automatic candidates include all branches of a taxpayer under the Large Taxpayers Service, surviving companies in a merger, corporations with authorized capitalization of at least P 300 Million, multi-national enterprises with at least P 300 Million, publicly-listed corporations, and universal, commercial and foreign banks. Taxpayers with at least P 100 Million authorized capitalization in banks, insurance, telecommunication, utilities, petroleum, tobacco and alcohol, and metallic mineral producers, are also included.
3. Tax payment criteria. These include net VAT of at least P 200,000.00 per quarter, annual excise tax or income tax of at least P 1 Million, annual withholding tax of at least P 1 Million, percentage taxes of at least P 200,000.00 per quarter, and aggregate annual documentary stamp taxes of at least P 1 Million. The basis is the preceding year.
4. Financial criteria. These include gross sales/receipts of at least P 1 Billion for the preceding year, net worth of at least P 300 Million, gross purchases of at least P 800 Million for the preceding year, and being listed among top corporate taxpayers published by the SEC.
5. Filing and systems duties. Large Taxpayers are mandatorily covered by EFPS, and withholding tax remittances and information returns of the Head Office and branches go in a consolidated return. Existing LTs must maintain an accredited Computerized Accounting System by 31 December 2010, and newly-identified LTs within six (6) months after written notice.
6. System unavailability and review. If the CIR declares the system unavailable during filing deadlines, returns are accepted manually or over-the-counter by EFPS-AABs and must be e-filed within 15 days from the manual filing once the system is online. The CIR may recommend amendments to the criteria to the Secretary of Finance every three (3) years.

Who is affected

• Large Taxpayers
• Banks
• Corporations meeting the capitalization, tax payment or financial criteria

Deadlines and effectivity

• CAS accreditation for existing LTs: by 31 December 2010
• CAS for newly-identified LTs: within six (6) months after notice
• Newly notified LTs covered effective 1 January 2011
• E-filing after manual filing: within 15 days

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