SALIENT FEATURES OF

EASE OF PAYING TAXES ACT

 MAIN OBJECTIVES

Modernize tax administration

Improve tax compliance at least cost and

resources

Establish policies and procedures that are

appropriate to distinct class of taxpayers
 REVENUE ISSUANCES ISSUED
January 8, 2024

• Tax Advisory: Exemption from filing and payment of ARF

effective January 22, 2024

January 10, 2024

• RMC No. 3-2024 - Circularizes RA No. 11976 (Ease of Paying

Taxes Act) and the Veto Message of President Ferdinand R.
Marcos Jr.

January 24, 2024

• RMC No. 14-2024 - Ceases the payment of Annual Registration

Fee pursuant to Republic Act No. 11976 (Ease of Paying Taxes
Act)
 REVENUE ISSUANCES ISSUED

REVENUE Income and Withholding (RR No. 4-2024)

REGULATIONS
Classification of Taxpayers (RR No. 8-2024)

VAT and Percentage Taxes (RR No. 3-2024)

Registration and Invoicing (RR No. 7-2024)

Refund (RR No. 5-2024)

Penalties (RR No. 6-2024)

Publication (RR No. 2-2024)

 Effectivity of Revenue Regulations

Revenue •March 19, 2024

Regulations •Published in Manila Bulletin
(RR) No. 2-2024 March 4, 2024

•April 27, 2024

RR Nos. 3-2024
•Published in the BIR
to 8-2024
website
 PRESIDENTIAL VETO
The President vetoed Section 8 of the Act, which exempts
micro-enterprises from the obligation to withhold taxes
under Section 57(b) of the Tax Code, to wit:
SEC. 8. Section 57 of the National Internal Revenue Code of 1997,
as amended, is hereby further amended to read as follows:
“SEC. 57. Withholding of Tax at Source. –
xxx
The Department of Finance shall review, at least once every three (3)
years, regulations and processes for the withholding of creditable tax
under this Code, and direct the Bureau of Internal Revenue to amend
rules and regulations for the same, should it be found during the
review that the existing rules, regulations, and processes for the
withholding of creditable tax under this Code adversely and materially
impact the taxpayer: Provided, That micro taxpayers shall not be
required to withhold taxes under Subsection (B) of this Section.”
 PRESIDENTIAL VETO
The President, in his veto message, provide the
following explanation for his decision, to wit:

“The withholding tax system provides the benefit of

collecting the seller’s income taxes in advance. It also
serves as an audit trail that mitigates under declaration
of sales and income and underpayment of the
corresponding value-added tax (VAT).

If not vetoed, removing the withholding tax requirement

for micro taxpayers will likely result in an
understatement of tax obligations, negatively affecting
the cash flow of the government.”
 CLASSIFICATION OF TAXPAYERS
(REVENUE REGULATIONS NO. 8-2024)

MICRO SMALL MEDIUM LARGE

•Taxable • Taxable • Taxable •Taxable

person person person person
whose whose whose whose
gross sales gross sales gross sales gross sales
for a for a for a for a
taxable taxable taxable taxable
year is less year is 3M year is year is 1B
than 3M Pesos to 20M to Pesos and
Pesos less than less than above
20M Pesos 1B Pesos
 CLASSIFICATION OF TAXPAYERS

 How shall taxpayers be initially classified? Based on

its declaration in the Registration Forms starting from
the year they registered

 Revised Application for Registration Forms are now

available (Annex ”A” to “C” of RMC No. 53-2024)
 TRANSITORY PROVISION

 Taxpayers registered in 2022 and prior years – gross

sales for taxable year 2022

 Taxpayers registered in 2022 and prior years but

without any submitted information on their gross
sales for taxable year 2022 – MICRO

 Taxpayers registered in 2023 or in 2024 before the

April 27, 2024 – MICRO except VAT-registered
taxpayers who shall be classified as SMALL
 BENEFITS OF MICRO AND SMALL TAXPAYERS
BASIS Taxpayer’s in General Micro and Small
Taxpayers
Income Tax Return Sec. 51 Maximum of 4 pages Maximum of 2 pages
(ITR) Form
Penalty Rate for Sec. 248 25% or 50% 10% or 50%
Civil Penalties
Interest Rate Sec. 249 12% 6%
Double the legal interest (50% reduction on the
for loans or forbearance of interest rate)
money
Fine Sec. 250 Php 1,000 per failure Php 500 per failure
Compromise Secs. 113, Compromise Penalty under 50% reduction
Penalty 237, and BIR RMO No. 19-2007, as
238 amended by RMO No. 7-
2015 for Section 238
 EASE OF REGISTRATION OF TAXPAYERS

In case of transfer
Updating,
of registration, if In case of
including transfer
Removal of the Availability of transferring cancellation of
and cancellation,
requirement to registration taxpayer is registration, the
of registration
pay Annual facilities to all subject of an BIR is not
status may be
Registration Fee taxpayers, audit precluded from
done either
of P500 on or including those investigation, the conducting an
electronically or
before January 31 not residing in the RDO that initiated audit to
manually by mere
of every year country the audit must determine any tax
filing of update of
continue the liability
registration status
same
 “Filing of
return” shall
Quarterly
be done Withholding Tax
electronically. Return (Sec. 58)
However, in
case of Corporate Withholding Tax
unavailability Income Tax on Compensation
Returns (Sec. 77) Return (Sec. 81) Renders
of electronic the
platforms, FILE-AND-
“wrong
manual filing PAY venue” or
may be ANYWHERE ”out-of-
allowed district”
Individual Tax Estate Tax Return
Returns (Sec. 51) (Sec. 90) filing of
“Tax tax return
payments” inapplicab
either Donor’s Tax
Return (Sec. 103) le
electronically
or manually
 REPEAL OF SECTION 34(K) OF THE TAX CODE, AS AMENDED ON THE ADDITIONAL
REQUIREMENTS FOR DEDUCTIBILITY OF CERTAIN PAYMENTS

SEC. 34 Effect of repeal:

• Proof of payment of • allowable deductions

the tax to be from gross income
deducted or withheld, which are subject to
before such is creditable withholding
considered deductible tax (CWT) shall be
allowed as deductions
even if the same have
not been subjected to
CWT, provided that
other requirements
for their deductibility
have been satisfied.
 SIMPLIFIED TIMING OF WITHHOLDING

PRE-EOPT EOPT

• The obligation of the • The obligation to deduct

payor to deduct and and withhold taxes
withhold the tax arises at the time the
arises “at the time an income has become
payable
income payment is
paid or payable, or the
income payment
accrued or recorded
as an expense or
asset, whichever is
applicable, in the
payor’s books,
whichever comes first
 CLAIMS FOR TAX CREDIT OR REFUND OF
CREDITABLE WITHHOLDING TAX
Claims for tax credit or refund of any creditable income tax which
was deducted and withheld on income payment shall now be
processed if:
(1)The income payment has been declared as part of the gross
income, and
(2)The fact of withholding is established

Claims for tax credit of any creditable income tax deducted and
withheld in a previous period can still be creditable in the
subsequent calendar or fiscal year: PROVIDED, that the same had
been declared in the tax return where the corresponding income is
reported.
 VAT PROVISIONS
VAT Pre-EOPT EOPT
VAT on Sale of Goods 12% of the gross 12% of the gross sales
or Properties selling price or gross of the goods or
(Section 106 of the Tax value in money of the properties sold,
Code) goods or properties bartered, or
sold, bartered, or exchanged
exchanged
VAT on Sale of 12% of gross receipts 12% of the gross sales
Services and Use or derived from the sale derived from the sale
Lease of Properties or exchange of or exchange of
(Section 108 of the Tax services, including the services, including the
Code) use or lease of use or lease of
properties properties
 GROSS SALES

VAT on Sale of Goods or VAT on Sale of Services and

Properties Use or Lease of Properties
(Section 106 of the Tax Code) (Section 108 of the Tax Code)
Total amount of money or its equivalent
representing the contract price,
compensation, service fee, rental, or
Total amount of money or its royalty, including the amount charged for
equivalent value in money materials supplied with the services during
the taxable quarter for the services
which the purchaser pays or is rendered or performed for another person.
obligated to pay to the seller in
consideration of the sale, This excludes amounts earmarked for
barter, or exchange of goods payment to third party or received as
or properties. reimbursement for payment on behalf of
another which do not redound to the
benefit of the seller as provided under
relevant laws, rules, or regulations.
ALLOWANCES AND ADJUSTMENTS TO SELLERS OF SERVICES OR LESSORS
OF PROPERTIES, AND SELLER OF GOODS OR PROPERTIES

New Section 108(C) of the Tax Code

The value of services rendered for which allowances are

granted by a VAT-registered person may be deducted from
the gross sales for the quarter the refund is made, or the
credit memorandum or refund is issued. Sales discount
granted and indicated in the invoice at the time of sale,
the grant of which does not depend upon the happening
of a future event, may be excluded from the gross sales
within the same quarter it was given.
 VAT PROVISIONS

Adjustment of the Threshold

The three million pesos (P3,000,000.00) threshold will

be adjusted every three years based on the consumer
price index, as published by the PSA.
 OUTPUT VAT CREDIT

Output VAT pertaining to uncollected receivables

may be deducted on the next quarter after the
lapse of the agreed upon period to pay provided
that the seller has fully paid the VAT on the
transaction and the VAT component of the
uncollected receivables has not been claimed as
an allowable deduction.
 RISK-BASED CLASSIFICATION OF VAT REFUND

Classification of VAT- Classification shall be

Refund Claims based on the following:

Low-Risk Amount of VAT refund claim

Medium-Risk Tax compliance history

Frequency of filing VAT refund

High-Risk claims

Medium- and high-risk claims shall be subject to audit or other verification

processes in accordance with the BIR’s National Audit Program.
 INVOICING REQUIREMENTS

VAT- • Issue sales or commercial invoices regardless of the MANDATORY

Registered amount of sale and transfer of merchandise or for INVOICING
Person services rendered REQUIREMENTS

Name

• The transaction amount was increased from P100 to P500 for TIN

the mandatory issuance of sales or commercial invoices;

Date of Transaction
• Regardless of the transaction amount, sales or commercial
invoices must be issued when the buyer so requires; Quantity
Non VAT-
Registered • If the transaction amount is below the P500 threshold, one
(1) invoice will be issued by the seller for the aggregate sales Unit Cost
Person amount of at least P500 at the end of the day; and
• The P500 transaction amount shall be adjusted to its present Description of
merchandise or
value using the CPI, as published by the PSA, every three (3) nature of service
year
 INVOICING REQUIREMENTS
“Business style” is no longer required to be indicated in VAT invoices

In cases where erroneous VAT invoices are issued, the following shall apply:
• The VAT-registered issuer of an invoice for a VAT-exempt transaction shall be
liable to account for the tax imposed in Section 106 or Section 108 as if Section
109 did not apply in case a breakdown of the VAT-exempt sale under Section
113(B)(2)(d) was not clearly provided;

• The VAT-registered issuer of an invoice lacking information required under

Section 113(B) shall be liable for non-compliance; and

• The purchaser who is issued an invoice with lacking information shall be allowed
to claim the input tax credit pursuant to Section 110, provided that the issued
invoice still shows the (1) amount of sales, (2) amount of VAT, (3) names, and
taxpayer identification number (TIN) of both the purchaser and issuer/seller, (4)
description of goods or nature of services, and (5) the date of transaction.
 TAX REFUND OF ERRONEOUSLY PAID TAXES
The Tax Code currently does not prescribe a period within
which the Commissioner must process and decide on claims
for erroneously paid taxes.

The amendment introduced by EOPT fixes the period to

decide applications for refund of erroneously paid taxes to
within 180 days from the submission of complete
documents.

This ensures that taxpayers’ claim for refund of erroneously

paid taxes are resolved immediately.
 CLARIFIED CERTAIN PROVISIONS

Exemption of Filipinos working and deriving

income solely from abroad as ‘overseas contract
workers’ or ‘overseas Filipino workers’ from filing
individual income tax returns

A clear provision that the issuance of Authority to

Print shall be free of charge.
 PRESERVATION OF BOOKS OF ACCOUNTS

Period for preservation of taxpayer’s books of

accounts and other accounting records shall be for 5-
years reckoned from the day following the deadline
for filing a return, or if filed after the deadline, from
the date of the filing of the returns, for the taxable
year when the last entry was made in the books of
accounts.
PUBLICATION OF ALL TAX RELATED PROVISIONS

All tax related information required to

published pursuant to any law, rules, and
regulations shall be published
electronically in the Official Gazette, or
the BIR’s official website.

Thus, all matters requiring publication

relating to taxpayers may now be found at
the BIR website.
 DIGITALIZATION OF BIR SERVICES

In order to improve the performance and

efficiency in the delivery of its services, the
BIR is mandated to adopt an integrated
digitalization strategy by providing
automated end-to end solutions for the
benefit of taxpayers.
- The End -

Thank you!!