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REVENUE REGULATIONS NO. 8-2012 issued on May 11, 2012 further amends Revenue Regulations (RR) No. 2-98, as last amended by RR Nos. 5-2008 and 5-2011, relative to the De Minimis Benefit, uniform and clothing allowance not exceeding P 5,000 per annum, which is exempt from Income Tax on compensation as well as from fringe benefit tax.

REVENUE MEMORANDUM ORDER NO. 12-2012 issued on May 16, 2012 prescribes the guidelines and proce-dures in the implementation of the Electronic Sales (eSales) Reporting as provided under Revenue Regula-tions (RR) No. 5-2005, as amended, by taxpayers using Cash Register Machines (CRM), Point of Sales Ma-chines (POS) and other invoice/receipt generating machines, and for other purpose. All taxpayers using CRMs, POS machines and other in-voice/receipt generating machines enrolled in the eSales System, with or without sales transaction, are re-quired to submit monthly sales report per machine to the BIR through the eSales System. The monthly sales report shall contain the following in-formation:

a. Machine Identification Number (MIN);

b. Month and year of sales being reported;

c. If the same machine is being used for sales that are subject to VAT (including VAT

exempt sales), and for sales that are subject to other Percentage Taxes, the breakdown

of sales must be provided as follows:

i. VATable Sales (net of VAT);

ii. VAT Zero-rated Sales;

iii. VAT exempt Sales;

iv. Sales subject to other Percentage Taxes;

NOTE: This breakdown of sales is required only when the same ma-chine is capable of segregation; oth-erwise, the gross monthly sales per machine shall be the total or sum of the recorded sales.

d. Serial Number of the last In-voice/Receipt or Transaction Num-ber issued for the month being re-ported. Such monthly sales report per machine shall be submitted on or be-fore the 8th day of the month (for tax-payers whose last digit of the 9-digit TIN is even number) and 10th day of the month (for taxpayers whose last digit of the 9-digit TIN is odd number) following the sales period.

All taxpayers using CRMs, POS ma-chines and other invoice/receipt gen-erating machines are required to en-roll their authorized user in the eSales System in order to access the said system. A duly notarized letter from the President/owner or any authorized officer of the company (single proprietorship) indicating the authorized user using the required format shall be submitted to the

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Large Taxpayers Assistance Division, Excise Taxpayers Regulatory Divi-sion or Large Taxpayers District Of-fice (LTDO)/Revenue District Office (RDO) where taxpayer is registered prior to enrollment in the eSales Sys-tem. Enrollment can be done by ei-ther the head office or the branch us-ing the machines. Only one (1) user for the head office and one for each branch shall be allowed to enroll in the eSales System. However, they may request for additional user sub-ject to the approval of the Head of the concerned Large Taxpayers Office/RDO considering the taxpay-ers policy on who will be submitting the monthly sales report.

All machines enrolled in the eSales System, with or without sales trans-actions, shall be reported until such time that the permit to use and Ma-chine Identification Number (MIN) have been cancelled. These include the following:

(i) machines with request for cancel-lation of the permit to use and the MIN but are still pending with the con-cerned Large Taxpayers Service (LTS) Office/RDO as of the time of sales reporting;

(ii) machines that are not operational and defective but permit to use has not yet been cancelled; and

(iii)machines that were registered as stand-by or back-up units.

Sales reporting can be done using either the online encoding or file up-load method. The file format required for the monthly sales report using the

file upload method can be download-ed from the BIR web using the eSales System. In case the eSales System is unavailable on the dead-line of submission of the monthly sales report, the taxpayer must sub-mit the monthly sales report in soft copy (CD format) using the pre-scribed format to the concerned LTS Office/RDO following the proce-dures prescribed in Annex C of the Order on or before the 3rd day following the deadline. In case of multiple submissions or amend-ments of the monthly sales report, the most recent submission shall be considered as the final monthly sales report.

Amendments of monthly sales report for a particular month can be done up to 3 times. However, machines whose monthly sales report have been amended more than 3 times for the same sales period shall be sub-ject for validation/inspection by the concerned LTS Office/RDO, provided that no electronic Letter of Authority (eLA)/Letter Notice (LN) has been issued covering the said particular month. Otherwise, the incident re-port must be consolidated with the ongoing audit/investigation covered by the eLA/LN.

For every submission of the monthly sales report, the eSales System will assign a Sales Report Number (SRN) to acknowledge the receipt of such report by BIR. Submission of monthly sales report can be done up to 11:59

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pm on due date. However, for this purpose, the time of the BIR shall be considered the official time in deter-mining whether the taxpayer submit-ted within the deadline. In case the deadline falls on a non-working day, the next working day shall automatically be considered the due date.

The Information Systems Operations Service Data Center (ISOS DC)/concerned Revenue Data Center (RDC) generate the reports speci-fied in the Order every 15th of the month for submission to the con-cerned LTS Offices/RDOs. ISOS DC/RDC shall handle technical issues and concerns raised by the taxpay-ers, while operational issues shall be handled by the concerned LTS Of-fice/RDO. The Systems Operations Division-Information Systems Opera-tions Service (SOD-ISOS) shall gen-erate the following reports every 15th of the month for submission to the Assistant Commissioner-LTS/Regional Director, copy furnished the Deputy Commissioner, Opera-tions Group:

a. Summary Report of Compliance per RDO by Region as of _______, 20__ (Annex L)

b. Sales Matching Report (Annex M), copy furnished the concerned LTS Office/RDO

All existing CRMs, POS machines and other invoice/receipt generating

machines without MIN shall be re-quired to be registered through the Electronic Accreditation and Registra-tion (eAccReg) System. Upon gener-ation of the new permit to use, the manually issued/old permit to use shall be deemed revoked. Hence, the permit to use sticker previously issued should be surrendered to the concerned LTS Office/RDO, which shall be replaced with a new permit to use sticker indicating the new permit to use number and MIN. Any taxpay-er found to be still using the old per-mit to use which has been cancelled/revoked shall be subject to the appli-cable penalty. Cancellation of permit to use shall be allowed under the fol-lowing circumstances:

a. Retirement of machines due to: i. Closure of business ii. Change of hardware b. Transfer of ownership/place of use: i. From one taxpayer to another tax-payer ii. From one branch to another branch except roving machines iii. Due to merger of companies with respect to the absorbed company(ies) c. Erroneous registration of machine with respect to the following: i. TIN ii. Branch Code iii. Classification of POS Machine d. Change in software or major up-grade of software The request for cancellation of permit

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to use shall be submitted by the large taxpayer to the LTS Office having ju-risdiction over its registered address, or to the RDO having jurisdiction over the address where the machine is lo-cated for non-large taxpayer. Inspec-tion of the machines of a large tax-payer shall be handled by the con-cerned LTS Office except outside Metro Manila or RDO having juris-diction over the address where the machines are located for a non-large taxpayer. For LTDO-Cebu, branches of its taxpayers located out-side the Cebu area shall be handled by the concerned LTS Office/RDO having jurisdiction over the ad-dress where the machines are locat-ed.

The corresponding Certificate of Cancellation shall be issued ac-cordingly by the concerned LTS Of-fice or RDO. In cases where the rea-son for cancellation of the permit is due to change of hardware, the taxpayer is required to request for a BIR representative from the con-cerned LTS Office/RDO where tax-payer is registered to witness the dis-posal of the machines.

Taxpayers who will be found not sub-mitting the required monthly sales re-port for 3 consecutive months per machine shall be subjected to the fol-lowing sanctions in addition to the penalty imposed under RR No. 5-2005:

1st Offense Reminder Letter

2nd Offense Machine Inspection/Post Evaluation

3rd Offense Revocation of Permit to Use/Cancellation of MIN

Moreover, payment of penalty does not relieve the taxpayer from the sub-mission of the monthly sales report; otherwise, the issuance and enforce-ment of Subpoena Duces Tecum shall be made in strict compliance with the procedures enunciated in Revenue Memorandum Order (RMO) No. 88-2010 and other applicable revenue issuances and Taxpayers Compliance Verification Drive (TCVD) under RMO No. 3-2009 and to other enforcement measures that may be undertaken to compel taxpay-er to fully comply with the Order.

During the transition period, the fol-lowing guidelines shall be followed in cleaning-up and updating the regis-tration database:

a. Taxpayers using CRMs, POS ma-chines and other invoice/receipt gen-erating machines which are not regis-tered with the BIR shall apply for reg-istration/permit to use using the eAccReg System.

b. Taxpayers must apply for the cancellation of the permit to use issued by the concerned LTS Of-fice/RDO for CRMs, POS ma-chines and other invoice/receipt generating machines which have been registered but are not being used or have been retired as of the effectivity of the required sales report-ing.

c. RDO shall continue to process all pending applications for cancellation of permit to use filed by the taxpayer

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prior to the roll-out of the eSales Sys-tem.

d. The concerned LTS Office/RDO shall use the Cancel MIN Module in the eSales System to cancel all ma-chines that were issued permit to use CRM/POS prior to the effectivity of RR No. 11-2004 and were issued MIN under the eSales System, where an approval for cancellation of such permit to use has been granted by the concerned LTS Office/RDO. Such must be done within 5 working days upon receipt of such

approval for cancellation by the con-cerned LTS Office/RDO.

e. Taxpayer who are using handheld devices for the purpose of acknowledging payments/collections but were issued permit to use CRM/POS and MIN shall request for their cancellation with the con-cerned LTS Office/RDO that has ju-risdiction over such taxpayer. The taxpayer shall apply for a permit to use Special Purpose Machine (SPM) as a replacement for the cancelled permit to use sales machine. Accord-ingly, any report made in the eSales System prior to the cancellation of such permit to use and MIN shall be amended immediately.

The Order shall take effect on Janu-ary 2012. However, for non-large tax-payers the initial reporting for the months of January to June shall be on July 8 or 10, 2012, which-ever is applicable.

REVENUE MEMORANDUM ORDER

NO. 13-2012 issued on May 16, 2012 prescribes the revised guidelines and procedures in handling Letter Notices (LNs) generated through Third- Party Information (TPI) data matching with tax returns. The Order covers the In-come, Value-Added and/or Percent-age Tax liabilities of individual and corporate taxpayers who are issued LNs based on the Reconciliation of Listing for Enforcement System (RELIEF), Bureau of Customs (BOC) and Tax Reconciliation System (TRS) TPI data matching programs. Taxpayers with discrepancy on their income, sales and/or purchases (domestic or imported) shall be noti-fied of such findings through the issu-ance of an LN RELIEF-BOC-TRS LN, together with the Details of Taxpay-ers Customers/Suppliers Records (DTCSR) and/or Details of Importa-tions with Return Information Match-ing (DIRIM) and Details of Withhold-ing Agents/Payors and Payees/Income Recipients Records (DWAPR), shall be generated based on the parameters determined and discrepancy threshold set by the Commissioner of Internal Revenue (CIR) and to be deployed via the LN portal facility. The LNs for any given taxable year shall be handled by the investigating office having jurisdiction over the taxpayer. If there is an on-going audit/investigation pursuant to an electronic Letter of Authority (eLA) prior to LN assignment, the Revenue Officer (RO) handling the eLA shall also be assigned the LN. The said LN shall not be considered closed but

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shall be consolidated with the eLA. The TPI reflected in the LN shall be properly utilized and the extent of uti-lization shall be included in the report of investigation by the RO. The policy of non- closure of the eLA without the resolution of the LN shall be strictly enforced. If an eLA is terminated before an LN is issued, the investigating office shall request the tax docket from the As-sessment Division (AD) or Adminis-trative Division (AdminD), as the case may be, for non-large taxpayers, and Records Division for large taxpayers and shall ascertain whether the dis-crepancies reflected in the LN are in the report of investigation. If discrep-ancies are not included, the RO shall pursue action on the LN based on the procedures specified in the Order. If the discrepancies are considered, the RO shall recommend cancellation of the LN and the tax docket shall con-tain the LN, photocopies of the Mem-orandum Audit Report, Working Pa-pers showing reconciliation undertak-en, BIR Form 0500 Series and other applicable documentary attachments. The deficiency Income, Value-Added and/or Percentage Taxes shall be computed using the formulas pre-scribed in the Computation Sheet at-tached in the Order (Annexes C, C-1, C-2, C-3 and C-4). Taxpayer shall be entitled to abate-ment of surcharge, interest and com-promise penalty provided he/she/it pays the basic deficiency tax(es) within 30 days from receipt of the LN. The payment of deficiency taxes shall

be made using Payment Form (BIR Form No. 0611-A). Any payment of tax liabilities beyond the 30-day period shall be assessed with the corresponding surcharge (if applicable), interest and compromise penalty. In both cases, an Agreement Form shall be executed by the taxpayer or his/her/its duly au-thorized representative/tax agent indi-cating therein the amount and date when the deficiency tax(es) shall be paid. Installment payment shall be allowed as settlement of the tax deficiencies arising from LN in case the total tax liabilities exceed P 500,000.00, for non-large taxpayers, or P 10 Million, for large taxpayers. In this case, a written request for installment pay-ment of the basic tax due plus incre-ments using the Application for In-stallment Payment must be accom-plished. The corresponding interest on the basic tax due per installment shall be computed up to the date of payment as shown in the application. In case of default of any installment payment, the remaining balance of basic tax plus the increments shall become due and demandable imme-diately without prior notice to taxpay-er. The Revenue District Officer (RDO)/Chief, LT Audit Division shall recom-mend to the Regional Director (RD)/Assistant Commissioner LTS (ACIR-LTS) the issuance of an issue- based eLA under certain situations as

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required under the Order. The settle-ment and payment of the deficiency tax(es) under an LN or issue-based eLA shall not preclude the BIR from issuing an eLA covering the compre-hensive audit of a taxpayers tax lia-bilities, if warranted. However, any payment of deficiency tax(es) shall be credited against any assessment that may be made by the investigating of-fice pursuant to an eLA provided the discrepancies disclosed by said audit are of the same nature as the dis-crepancies reflected in the LN. The taxpayer who fails to settle his/her/its tax liabilities resulting from LN dis-crepancy shall be issued any or a combination of the following actions: a) Issuance of eLA under certain situ-ations and/or Preliminary Assess-ment Notice (PAN)/Final Assessment Notice (FAN) in accordance with the provisions of Revenue Regulations No. 12-99; b) Recommend the imposition of ad-ministrative sanction of suspension and temporary closure business es-tablishment in accordance with the provisions of RMO No. 3- 2009 (Oplan Kandado), if the under-declaration is 30% or more; c) Issuance and enforcement of the Subpoena Duces Tecum (SDT) in strict compliance with procedure enunciated in RMO No. 88-2010 and other applicable pertinentrevenue is-suances. After compliance with pro-cedures on the issuance and enforce-ment of the SDT, docket shall be en-

dorsed to the Office of the Regional Director (ORD)/Office of Assistant Commissioner LTS (OACIR-LTS), through the AD/concerned OHREA-LTS, for issuance of PAN/FAN in ac-cordance with the provisions of Reve-nue Memorandum Circular No. 23-2000. For LN originally assigned (with eLAs [either the investigation is on-going or terminated] or without eLAs issued) or assumed (referred to another RO), the RO assigned shall resolve the LN discrepancy within 30 days from re-ceipt of original assignment/referral. The RD/ACIR-LTS shall direct the ROs to act without delay on the reso-lution of the LN discrepancy. After the lapse of the 30-day period and there is no resolution or action taken, except when RO performs oth-er necessary procedures as herein required and/or recommends imposi-tion of administrative sanction of sus-pension and temporary closure of business establishment under RMO No. 3-2009 or recommends the issu-ance and enforcement of SDT under RMO No. 88- 2010 and other applica-ble pertinent revenue issuances, the RDO/Chief, LT Audit Division shall submit the list of taxpayers/LNs and the names of the ROs to the ORD/OACIR-LTS for transmittal to the Of-fice of the Commissioner of Internal Revenue (OCIR). The CIR shall refer the lists of the taxpayers/LN to the Revalida Com-mittee for appropriate action and the

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names of the erring ROs to Inspec-tion Service for the issuance of a Show-Cause Order. Appropriate sanctions against erring ROs shall be imposed, if warranted. Activities and accomplishments of the investigating offices relative to the Order shall be monitored by the OCIR and the con-cerned offices, i.e., Office of Deputy Commissioner Operations Group, Audit Information Tax Exemption and Incentives Division (AITEID), etc., based on key performance indicator. The procedures specified in the Or-der shall be used in the resolution of issues on 2009 and 2010 LNs issued prior to the effectivity of this Order, if applicable. The 2011 LNs shall use RELIEF-BOC LN and TRS LN, to-gether with DTCSR and/or DIRIM, and DWAPR until such time that the new template for the consolidated LN (RELIEF-BOC-TRS LN) is in place. If a taxpayer is issued RELIEF-BOC LN and TRS LN, both LNs shall be han-dled by one and the same RO. REVE-NUE MEMORANDUM CIRCULAR NO. 21,2012 is-sued on May 3, 2012 circulariz-es the full text of Executive Order No. 68 entitled Monetization Program of Outstanding Value- Added Tax (VAT) Tax Credit Certificates (TCCs). A VAT TCC Monetization Program is adopted in order to give qualified VAT

- registered taxpayers the cash equiv-alent of their outstanding TCCs under the following options: a. Collect in advance from a trustee bank a discounted cash value of their TCCs; or b. Collect the full cash value of the TCCs upon certain maturity date, to be determined by the Bureau of Internal Revenue (BIR) or the Bu-reau of Customs (BOC), as the case may be, pursuant to the implementing rules and regulations that will be is-sued to implement this Executive Or-der. The VAT TCC Monetization Program shall cover outstanding VAT TCCs issued pursuant to Section 112 (A) of RA 8424, as amended, and outstand-ing VAT component of drawback TCCs issued pursuant to Section 106 (e) of the TCCP, as amended. The VAT TCC Monetization Program will be spread over a five-year period from 2012 to 2016. The funding re-quirement for this purpose shall be included in the National Expenditure Program (NEP) for the said years. The DOF shall direct the BIR and the BOC to verify the outstanding VAT TCCs and, subject to existing laws, rules and regulations, perform the fol-lowing functions: i. Provide the confirmation letter of the national government to acknowledge that the outstanding VAT TCCs constitute an obligation of the Republic of the Philippines.

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ii. Favorably endorse to the national government agency concerned or to the Bangko Sentral ng Pilipinas (BSP), as the case may be, the appli-cation to secure the necessary fi-nancial features required in the issuance of investment certificates to improve the net proceeds of the ben-eficiaries. iii. Make arrangements with trustee bank on the requirements for the opening of a special account; and iv. Make available the facilities of the Bureau of Treasury (BTr), includ-ing, but not limited to, Registry of Scripless Securities, the Automated Debt Auction Processing System, and such other facilities as may be required for the auctioning pro-cess in the implementation of the VAT TCC Monetization Program. The BIR or the BOC shall issue the Notice of Payment Schedule to VAT TCC holders upon verification of the outstanding VAT TCCs. The DBM, DOF, BIR and BOC shall jointly issue the IRRs on the VAT TCC Monetiza-tion Program. Beginning 2012, the BIR and the BOC shall no longer issue TCCs for VAT refund, unless applied for by the VAT taxpayer, pursuant to Section 112 (A) of RA 8424, as amended, and Section 106(e) of the TCCP, as amended.

REVENUE MEMORANDUM CIRCU-LAR NO. 22-2012 issued on May 7, 2012 clarifies the implementation of Revenue Regulations No. 5-2012, to wit:

a. All BIR Rulings issued prior to Jan. 1, 1998 are not to be used as prece-dent by any taxpayer as a basis to secure rulings for themselves for cur-rent business transaction/s or in sup-port of their position against any as-sessment.

b. All BIR Rulings issued prior to Jan. 1, 1998 are not to be used by any BIR action lawyer in issuing new rul-ings for request for rulings involving current business transaction/s.

c. However, BIR Rulings issued prior to Jan. 1, 1998 remains to be valid but only:

i. to the taxpayer who was issued the ruling; and

ii. Covering the specific transaction/s which is the subject of the same ruling.

d. BIR Rulings issued prior to Jan. 1, 1998 shall remain valid as mentioned above, unless expressly notified of its revocation or unless the legal basis in law for such issuance has already been repealed/amended in the cur-rent Tax Code.

REVENUE MEMORANDUM CIRCU-LAR NO. 24-2012 issued on May 21, 2012 clarifies the issue on the maintenance of Official Register Books (ORBs) on tax-paid petroleum products stored on formerly bonded storage facilities. Under previously issued revenue issuances and per-mits, certain storage facilities and/or

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terminals, including the blending facil-ities located therein for the manufac-ture of lubricating oils and greases owned and operated by the oil com-panies, were required to maintain ORBs and to submit, on a regular ba-sis, the transcripts sheets to the BIR.

However, subsequent issuance of certain tax laws and Revenue Regu-lations (RR) such as Republic Act No. 8424, imposing Excise Tax on the major raw materials for lubricating oils and grease effectively rendering the said finished products no longer subject to Excise Tax, as well as the promulgation of RR No. 8- 2006, in-troducing the Product Replenish-ment scheme which effectively un-bounded formerly bonded storage facilities, seemed to have created the impression that the maintenance of ORB and submission of the tran-scripts sheets While taxes on prod-ucts stored in the facilities may have been paid already, or is subject to P 0.00 rate, there is still a need to en-sure that taxes on all products stored within and handled by the facilities are properly paid in order to pro-tect the revenues due to the gov-ernment. Considering that adminis-trative requirements are duly pre-scribed by revenue issuances and permits and remained in effect, as no revoking issuance has been issued, continued compliance thereto should be strictly observed by concerned taxpayers.

Accordingly, the maintenance of ORBs and submission of transcripts sheets thereof is strictly enjoined from the concerned oil companies. Revenue officials and employees tasked with the monitoring of these facilities are likewise enjoined to re-quire the submission of the ORBs and the transcript sheets thereto on the preceding three (3) years.

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Thou shalt not be a victim.

Thou shalt not be a perpe-

trator. Above all, thou

shalt not be a bystander.

Holocaust Museum, Washington, DC

V o l u m e I V I s s u e N o . 5 M A Y 2012

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