RR No. 3-2005: Prescribes the rules and regulations implementing EO No. 398 and requiring timely and complete payment of taxes as a pre-condition for entering into and as a continuing obligation in contracts with government

Summary

RR No. 3-2005 implements Executive Order (EO) No. 398, which requires timely and complete payment of taxes as a pre-condition for entering into, and a continuing obligation in, contracts with government.

Key points

1. Tax returns with bids. Anyone seeking to contract with government for goods and services must submit with the proposal or bid a copy of the latest income tax and business tax returns. The returns must be stamped and received by the BIR and validated with tax payments. Returns filed with Authorized Agent Banks or through eFPS with reference numbers are deemed stamped and received.
2. Tax Clearance. A Tax Clearance from the BIR, attesting that the taxpayer has no outstanding Final Assessment Notice and/or delinquent account, is also required for the bid to be accepted for evaluation. It is requested in writing from the Chief, Collection Enforcement Division, BIR National Office, and the procuring entity verifies its authenticity.
3. eFPS filing. Effective April 1, 2005, prospective participants in government procurement must file income and business tax returns and other required information electronically using the eFPS. Effective May 1, 2005, only returns filed through eFPS are accepted.
4. Interim procedure. Until April 30, 2005, non-eFPS tax returns and payment documents may still be submitted to procuring entities. They must first be presented to the RDO with jurisdiction for an authenticity check and stamping.
5. Verification. eFPS returns are checked through the BIR Contact Center or the BIR Portal. Non-eFPS returns are verified by faxing a copy to the BIR Contact Center with a covering letter naming the procuring agency and the responsible procurement officer.

Who is affected

• Persons seeking to contract with government for goods and services
• Procuring government entities

Deadlines and effectivity

• April 1, 2005: electronic filing through eFPS required
• April 30, 2005: last day for interim non-eFPS submission
• May 1, 2005: only eFPS-filed returns accepted

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