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CM 111.2 - PAYMENT THROUGH SARO - COLLECTION REPORTING

The government agency-grantee applies for the issuance of a TSAC representing payment of applicable tax (e.g. VAT, excise tax, income tax, withholding tax, etc.). The appropriate returns/forms/declarations, together with the TSAC/TSDM, are filed on the corresponding due dates.

The revenue district (LTDPQAD/LTDO/RDO) having jurisdiction over the grantee’s principal office shall receive the returns, encode payment data into the CBR-ITS database for uploading by the RDC. The LTDPQAD/LTDO/RDO validates TEF collection and the preparation of collection reports integrating TEF payment made through SARO.

Securing the Tax Subsidy Availment Certificate (TSAC)

In accordance with RR No. 31-03 (AFPCES) and RR No. 12-06 (PNPSS), RR No. 6-2010 (PDIC), the government agency-grantee shall file an application, together with the purchase order and supplier’s invoice/official receipt with the RDO having jurisdiction over its principal office, for the issuance of the TSAC in the amount equivalent to the output VAT liability/excise tax of their suppliers. Upon receipt of the TSAC, the AFPCES/PNPSSS/PDIC and other grantees shall file the tax return/form/declaration and pay the tax due thereon using the TSAC.

Pursuant to RR No. 17-05, the VAT subsidy mechanism operates in a manner such that the VAT subsidy is extended to the primary contractors (secondary level), subcontractors and suppliers (tertiary level), sub-subcontractors and sub-suppliers (fourth level) to ensure that the VAT passed-on from the fourth level of sale to the government agency-grantee (BCDA) is covered by the VAT subsidy.

To avail of the VAT subsidy, the BCDA shall:

  1. Secure TSAC and the corresponding VSCs from the RDO having jurisdiction over its principal office;
  2. Receive the TSAC and the VSC from the RDO; and
  3. Release the TSAC and VSC to the primary contractor/consultant of BCDA.

The Primary Contractor/Consultant of BCDA shall:

  1. Receive the TSAC and VSC from BCDA;
  2. File tax return/form/declaration and pay the tax due using the VSC, if the TSAC/VSC is used as payment of their net VAT tax liability; or
  3. Distribute VSC/s to subcontractors/suppliers, if VSC is used as payment for input passed on by their subcontractors/suppliers.

The Subcontractors/suppliers shall:

  1. Receive the VSC from the primary contractor/consultant of BCDA;
  2. File the tax return/form/declaration and pay the tax due thereon using the VSC, if used as payment of their net VAT tax liability; or
  3. Present the VSC, together with the invoice billings of sub-subcontractors/sub-suppliers to LTDPQAD/LTDO/RDO, for the annotation of requested amount of SVSC in favor of the sub-contractors/suppliers; and
  4. Distribute the VSC to the sub-subcontractors/sub-suppliers, if used as payment for input passed on by their subcontractors/suppliers.

The Sub-subcontractors/Sub-suppliers shall:

  1. Receive the SVSC from the sub-contractors/suppliers; and
  2. File the tax returns/forms/declarations and ay the tax due thereon using the SVSC.

Filing of the Tax Return/Form/Declaration and Payment of the Tax Due

Upon filing of their respective VAT returns/declarations, the primary contractors, consultants, subcontractors, suppliers, sub-subcontractors and sub-suppliers shall use their VSCs or SVSCs, whichever is applicable, to pay their net VAT payable/liability.

The RDO having jurisdiction over the BCDA’s principal office shall issue a TSDM showing the amount of input VAT claimed, and the net VAT payable/liability shown on the VAT return/declaration. The TSDM shall be made in four (4) copies to be distributed as follows: original to the primary contractors/consultant/subcontractors/suppliers/sub-subcontractors/sub-suppliers; duplicate to the BCDA; triplicate to the Revenue Accounting Division; and quadruplicate (File copy – RDO).

Prior to the issuance of the TSACs and TSDMs, the issuing unit shall update its books to indicate the available balance for future utilization, after deducting the latest application for TSACs and TSDMs utilization for tax purposes.

A TSAC each shall also be issued by the BIR, in case of the subsidy on income tax, excise tax, and the withholding tax. A TSDM shall likewise be issued by the RDO having jurisdiction over BCDA’s principal office covering the income tax, excise tax and withholding tax.

e-Filing of the Tax Returns and Payment of Tax Due

The taxpayer shall e-file the pertinent tax return and may either e-pay using TSAC/TSDM payments only or e-pay with cash and TSAC/TSDM payments.

  1. For TSAC/TSDM payment only

The taxpayer shall submit to the LTDPQAD/LTDO/RDO on or before the deadline for e-payment, the following:

  • Print-out of the Filing Reference Number (FRN):
  • Corresponding tax return/form/declaration;
  • Original or the duplicate plus one (1) photocopy of the TSAC for AFPCES/PNPSS/PDIC transactions; and
  • One (1) photocopy of the TSDM for SCTEP transactions.
  1. For cash and TSAC/TSDM payment

The taxpayer shall e-pay and submit to the LTDPQAD/LTDO/RDO, on or before the deadline for e-payment, the following:

  • Print-out of the Filing Reference Number (FRN) and Confirmation Number (CN);
  • Corresponding tax return/form/declaration;
  • Original or the duplicate plus one (1) photocopy of the TSAC for AFPCES/PNPSS/PDIC transactions; and
  • One (1) photocopy of the TSDM for SCTEP transactions.

Issuance of the TSAC/VSC/SVSC

The LTDPQAD/LTDO/RDO shall:

  1. Receive the application for issuance of TSAC/VSC/SVSC and check the completeness of documents received;
  2. Record each availment of TSAC to determine and update balance of the released allotment for future utilization, after deducting the latest application for TSAC utilization;
  3. Issue TSAC and annotate requested amounts of VSCs/SVSCs;
  4. Release the TSAC/VSC/SVSCs to BCDA/primary contractors and contractors and consultants/ subcontractors/sub-suppliers; and
  5. Submit to RAD the Monthly Report of TSAC/TSDM Issued (Annex 100-1.22) (Refer to CM 207 Reconciliation of Collection through SARO of Chapter II of this Manual).

Upon filing of the tax return/form/declaration and payment of the tax due thereon, the LTDPQAD/LTDO/RDO shall:

  1. Receive, validate and check completeness of the documents received from the taxpayer;
  2. Encode TSAC/TSDM payment as “cash” using BCS number series “90001” in the CBR;
  3. Encode in Excel format the pertinent information for TSAC/TSDM monitoring;
  4. Prepare the monthly report of TSAC/TSDM payment (Annex 100-1.23);
  5. Submit the soft and hard copy of the report to the Assistant Commissioner (ACIR), LTS/Head Revenue Executive Assistant (HREA), LTS concerned (in the absence of ACIR, LTS) or the RDO;
  6. Submit a Quarterly Report of VSCs and SVSCs utilized and TSDMs released, together with copies thereof to the RAD within fifteen (15) days after the end of each quarter (Refer to CM 207 Reconciliation of Collection through SARO of Chapter II of the Manual); and
  7. File the documents and monitor TSAC/TSDM payments.

The RDC shall:

  1. Upload the payment data into the CBR-ITS database. Once uploaded and the payment data is tagged as “POSTED”, the collection data is automatically posted to the taxpayer’s ledger; and
  2. Generate the Consolidated Monthly Statistical Report of Revenue Collections (BIR Form No. 1209) and forward the same to concerned RDO for validation not later than the 10th day of the following month.

Preparation of the Monthly Collection Report

The LTDPQAD/LTDO/RDO concerned shall:

  1. Receive the system-generated collection report from the RDC not later than the 10th day of the following month;
  2. Validate the accuracy of the collection data pertaining to payments through the SAROs. In case any discrepancy noted, make the necessary adjustment thereon and/or request for data-fix, whichever is applicable; and
  3. Submit the validated BIR Form No. 1209 collection report to the Statistics Division thru the Regional Collection Division/LTS, copy furnished RAD, not later than the 15th day of the following month.

The Statistics Division/LTS shall:

  1. Receive the system-generated collection report from the RDC not later than the 10th day of the following month;
  2. Validate the accuracy of the collection data pertaining to payments through the SAROs. In case of any discrepancy noted, make the necessary adjustment thereon and/or request for data-fix, whichever is applicable; and
  3. Submit the validated BIR Form No. 1209 collection report to the Statistics Division thru the Regional Collection Division/LTS, copy furnished RAD, not later than the 15th day of the following month.

The Statistics Division/LTS shall:

  1. Receive the validated BIR Form No. 1209 from the RDOs/LTDPQAD/LTDOs;
  2. Review and consolidate the BIR Form No. 1209 collection reports; and
  3. Submit the consolidated report of collections to the Collection Service not later than the 20th day of the following month.