Summary
RR No. 17-2024 prescribes that contractors present a BIR tax clearance before the final settlement of their government contracts.
Key points
- Who must secure a clearance. Natural or juridical persons, local or foreign, with existing contracts with government bodies for goods and services, including infrastructure projects, must secure an updated BIR tax clearance. The government bodies include departments, bureaus, offices, agencies, SUCs, GOCCs, GFIs and LGUs.
- What the clearance certifies. It certifies no outstanding tax liabilities and that the latest income and business tax returns were filed and the taxes due paid. The contractor presents it to the concerned government body before final settlement of the contract.
- Effect of failure. Without the clearance, the government body may suspend final settlement for goods or services delivered.
- Tax lien on suspended amounts. The suspended final settlement, including retention money required under RA No. 9184 and its implementing regulations, is subject to tax lien as warranted. This is to satisfy the contractor’s outstanding tax liabilities, applying the existing guidelines on distraint and garnishment.
- Penalties. Violations carry the corresponding penalties under the NIRC of 1997, as amended, and applicable BIR regulations.
Who is affected
- Persons with existing contracts with the government, its bodies, SUCs, GOCCs, GFIs and LGUs for goods, services, or infrastructure
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.