RR No. 2-2014: Prescribes the new Income Tax forms

Summary

RR No. 2-2014 prescribes the new Income Tax forms for ITRs covering taxable year ended December 31, 2013 onward, and sets rules on rounding and on itemized deductions and the OSD.

Key points

1. New forms. The forms are BIR Form Nos. 1700, 1701, 1702-RT, 1702-EX and 1702-MX, all version June 2013. They cover compensation earners, self-employed individuals, estates and trusts, and corporations, partnerships and other non-individuals, depending on the form.
2. No centavos. Centavos are no longer entered in the ITR. Amounts of 49 centavos or less are dropped, and 50 centavos or more are rounded up to the next peso.
3. Non-individuals must itemize. Corporations, partnerships and other non-individuals must use itemized deductions if they are exempt under Section 30 or Section 27(C) or special laws with no other taxable income. The same applies if they have income under special or preferential rates, or income under Section 27(A) and 28(A)(1) together with special or preferential rate income.
4. Entities with no deductions or OSD. Juridical entities taxed on gross revenue or receipts, such as non-resident foreign international carriers, get neither itemized deductions nor the Optional Standard Deduction (OSD) under Section 34(L).
5. Individuals without the OSD. Individuals use only itemized deductions if they are exempt with no other taxable income (for example a Barangay Micro Business Enterprise). The same applies if they have income under special or preferential rates, or income under Section 24 together with special or preferential rate income.
6. Re-filing. Taxpayers who filed their 2013 ITRs on the old forms, manually or electronically, must re-file on the new forms once available.

Who is affected

• Taxpayers required to file ITRs under Section 51(A)(1)
• Taxpayers not required under Section 51(A)(2) who opted to file
• Corporations, partnerships and other non-individuals
• Individuals who cannot use the OSD

Deadlines and effectivity

• Applies to ITRs for taxable year ended December 31, 2013 and after
• Issued February 3, 2014

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