Remedies: TaxAdmin-PowerRemedy

REPUBLIC OF THE PHILIPPINES
DEPARTMENT OF FINANCE
BUREAU OF INTERNAL REVENUE
Quezon City
April 2, 2012
Revenue Regulations No. 5-2012
Subject : Binding effect of rulings issued prior to Tax Reform Act of 1997
To : All Internal Revenue Officers and Others Concerned
Section 1. Background - Republic Act No. 8424, or The Tax Reform Act of 1997
(hereinafter referred to as the Tax Code of 1997), which was approved on December 11,
1997 has put in place the last phase of the comprehensive reform package on tax laws
which took effect on January 1, 1998. Pursuant to Section 244, in relation to Section 4 of
the Tax Code of 1997, these Regulations are being promulgated to establish the policy on
the binding effect of rulings issued prior to the effectivity of the Tax Code of 1997 on
January 1, 1998.
Section 2. Coverage. All rulings issued prior to January 1, 1998 will no longer have
any binding effect. Consequently, these rulings cannot be invoked as basis for any current
business transaction/s. Neither can these rulings be used as basis for securing legal tax
opinions/rulings.
Section 3. Repealing Clause. All existing rules and regulations or parts thereof
which are inconsistent with the provisions of these Regulations are hereby amended,
repealed or revoked accordingly.
Section 4. Effectivity Clause. These Regulations shall take effect immediately.
(Original Signed)
CESAR V. PURISIMA
Secretary of Finance
Recommending Approval:
(Original Signed)
KIM S. JACINTO-HENARES
Commissioner of Internal Revenue
November 26, 2008
REVENUE REGULATIONS NO. 14-2008
Subject: Amending Further Section 2.57.2(M) of Revenue Regulations No. 2-98,

as Amended, Increasing the Coverage of Withholding Tax Agents
Required to Withhold 1% from Regular Suppliers of Goods and 2%
from Regular Suppliers of Services from the Top 10,000 Private
Corporations to Top 20,000 Private Corporations
To: All Internal Revenue Officers and Others Concerned
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SECTION 1. SCOPE. - Pursuant to the provisions of Section 244 of the Tax

Code of 1997, as amended, in relation to Section 57(B) thereof, these Regulations are
hereby promulgated to further amend Section 2.57.2(M) of Revenue Regulations No. 2-
98, as amended, increasing the coverage of withholding tax agents who are required to
withhold 1% from the regular suppliers of goods and 2% from the regular suppliers of
services from the top ten thousand (10,000) private corporations to top twenty (20,000)
private corporations.
SEC. 2. AMENDMENT. - Section 2.57.2(M) of Revenue Regulations 2-98, as

amended, is hereby further amended to read as follows:
Sec. 2.57. Withholding of Tax at Source.
Sec. 2.57.2. Income payment subject to creditable withholding tax and rates
prescribed thereon. Except as herein otherwise provided, there shall be withheld a
creditable income tax at the rates herein specified for each class of payee from the
following items of income payments to persons residing in the Philippines.
x x x xxx xxx
(M) Income payments made by the top twenty thousand (20,000) private
corporations to their local/resident supplier of goods and local/resident supplier of
services other than those covered by other rates of withholding tax. Income payments
made by any of the top twenty thousand (20,000) private corporations, as determined
by the Commissioner, to their local/resident supplier of goods and local/resident supplier
of services, including non-resident alien engaged in trade or business in the Philippines
Supplier of goods - - One percent (1%)

Supplier of services Two percent (2%)
Top twenty thousand (20,000) private corporations shall include a corporate
taxpayer who has been determined and notified by the Bureau of Internal Revenue (BIR)
as having satisfied any of the following criteria:
(a) Classified and duly notified by the Commissioner as a large taxpayer under
Revenue Regulations No. 1-98, as amended, or belonging to the top five
thousand (5,000) private corporations under RR 12-94, or to the top ten
thousand (10,000) private corporations under RR 17-2003, unless
previously de-classified as such or had already ceased business
operations (automatic inclusion);
(b) Any taxpayer with net VAT paid or payable for the preceding year of at least
P100,000;
(c) Any taxpayer with annual income tax paid or payable for the preceding year
of at least P200,000;
(d) Any taxpayer with percentage taxes for the preceding year of at least
P100,000;
(e) Any taxpayer whose gross sales for the preceding year is over P10,000,000;
(f) Any taxpayer whose gross purchases for the preceding year is over
P5,000,000.
The term goods pertains to tangible personal property. It does not include
intangible personal property, as well as real property.
The term local/resident suppliers of goods pertains to a supplier from whom

any of the top twenty thousand (20,000) private corporations, as determined by the
Commissioner, regularly makes its purchases of goods. As a general rule, this term
does not include a casual purchase of goods, that is, purchase made from a non-regular
supplier and oftentimes involving a single purchase. However, a single purchase which
involves Ten thousand pesos (P10,000.00) or more shall be subject to a withholding tax.
The term regular suppliers refers to suppliers who are engaged in business or exercise
of profession/calling with whom the taxpayer-buyer has transacted at least six (6)
transactions, regardless of amount per transaction, either in the previous year or current
year. The same rules apply to local/resident supplier of services other than those
covered by separate rates of withholding tax.
A corporation shall not be considered a withholding agent for purposes of this

Section, unless such corporation has been determined and duly notified in writing by the
Commissioner that it has been selected as one of the top twenty thousand (20,000)
private corporations.
Any corporation which has been duly classified and notified as large taxpayer
by the Commissioner pursuant to RR 1-98, as amended, shall be automatically
considered one of the top twenty thousand (20,000) private corporations, provided,
however, that its authority as a withholding agent shall be effective only upon receipt of
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written notice from the Commissioner that it has been classified as a large taxpayer, as
well as one of the top twenty thousand (20,000) private corporations, for purposes of
these regulations.
Any corporation shall remain a withholding agent for purposes of these

regulations, unless the Commissioner notifies it in writing that it shall cease to be one.
The following, however, are some of the reasons that a taxpayer shall automatically
cease to be a withholding agent, and therefore no prior written notice, for purposes of
these regulations, is required, to wit:
(a) closure/cessation of business/dissolution (for taxpayer with notice of

dissolution given to the BIR);
(b) merger/consolidation (for dissolved or absorbed corporation);
(c) any other form of business combination wherein by operation of law a

corporate taxpayer loses its juridical personality.
The withholding agent shall submit on a semestral basis a list of its regular
suppliers of goods and/or services to the Large Taxpayers Assistance Division/Large
Taxpayers District Office in the case of large taxpayers duly notified as such pursuant to
RR 1-98, as amended, or Revenue District Office (RDO) having jurisdiction over the
withholding agents principal place of business on or before July 31 and January 31 of
each year.
A government-owned or -controlled corporation previously classified as one of

the top five thousand (5,000) corporations under RR 12-94, as amended, shall cease to
be a withholding agent or included in the top twenty thousand (20,000) private
corporations for purposes of these regulations but rather shall be treated as one under
the succeeding sub-section (N) since it is already withholding 1% or 2% of the amount
paid for the purchase of goods/services from local/resident suppliers.
The Commissioner of Internal Revenue may recommend to the Secretary of

Finance the amendment/modification to any or all of the criteria in the determination and
selection of taxpayers forming part of the top twenty thousand (20,000) private
corporations after considering such factors as inflation, volume of business, and similar
factors. Provided, however, that the Commissioner is empowered to conduct periodic
review as to the number of taxpayers who ceased to qualify under the category of top
twenty thousand (20,000) private corporations for purposes of delisting them or
excluding them from the list and to identify taxpayers to be added to the list of top
twenty (20,000) private corporations.
All taxpayers previously included in the list of top 5,000 private corporations
under RR 12-94, as amended, and those who qualified as top ten thousand (10,000)
private corporations under RR 17-2003 shall continue to withhold one percent (1%)
for supplier of goods and 2% for supplier of services upon the effectivity of these
Regulations, unless any of the following situations occur: (a) the Commissioner
communicates in writing that they have ceased to qualify as taxpayers includible in the
list of top twenty thousand (20,000) private corporations, or (b) those officially
identified to have ceased business operations, or undergone any of the business
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combinations wherein by operation of law the juridical personality of said taxpayers
ceased.
SEC. 3. REPEALING CLAUSE. All existing rules and regulations or parts

thereof which are inconsistent with the provisions of these regulations are hereby
modified, amended, revoked or repealed accordingly.
SEC. 4. EFFECTIVITY These regulations shall take effect fifteen (15) days
following publication in a newspaper of general circulation.
(Original Signed)
MARGARITO B. TEVES
RECOMMENDING APPROVAL:
(Original Signed)
SIXTO S. ESQUIVIAS IV
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Quezon City
October 11, 2002
Subject : Modes of and Procedure for the Payment of Internal Revenue Taxes
Through Authorized Agent Banks Amending Revenue Regulations
No. 4-97, as amended by Revenue Regulations No. 6-98
To : All Internal Revenue Officers, Authorized Agent Banks, and Others

Concerned
______________________________________________________________________________________
SECTION 1. SCOPE Pursuant to Section 244 of the National Internal

Revenue Code of 1997 (CODE) in relation to Sections 8, 12, 56, 58, 81, 103,
114, 128, 130, 200 and 245, all of the same Code, these Regulations are hereby
promulgated to amend Revenue Regulations No. 4-97, as amended by Revenue
Regulations No. 6-98, on the provisions relative to acceptable modes of payment
of internal revenue taxes coursed through authorized agent banks (AABs), the
recording of such payments and issuance of validated BIR-prescribed deposit
slips which likewise serve as acknowledgement receipts for payments of taxes
deposited by taxpayers for BTR-BIR account, and the control mechanisms to
deter and detect the diversion of tax payments.
SEC. 2. RECORDING OF BIR TAX PAYMENTS BY THE AABs
A) All internal revenue taxes collected through authorized agent banks

(AABs) shall be credited to the demand deposit accounts opened and maintained
by the Bureau of Treasury (BTr) for BIR in the head offices of AABs;
B) Head offices of AABs shall assign and maintain a separate general

ledger account for said BTr demand deposit accounts;
C) Using the online tellering system, the bank tellers shall immediately
post the BIR tax payments they collect by crediting the BTr demand deposit
accounts in the head offices of the AABs, instead of recording them as mere
payables to BTr at the end of each banking day in the AABs backrooms.
D) In filing a tax declaration and making payment to an AAB, a tax payer
must accomplish and submit a BIR-prescribed deposit slip which AABs must
design, print and make available in all participating branches. The deposit slip
must in addition to those needed by the bank, provide for the following
information:
Transaction Date
Name of Taxpayer
TIN
BTR-BIR Account Number
Account Name which must be BTR-BIR
Name of Drawee Bank
Check Number
Bank Debit Advice Number (for debit system payments)
Amount
E) The bank teller shall machine validate the BIR-prescribed deposit slip
accomplished by the taxpayer as evidence that the BIR tax payment was
deposited to the account of the BTr. Said deposit slip shall be accomplished and
issued in triplicate copies, distributed as follows: original (taxpayers copy),
duplicate (AABs copy) and triplicate (to be attached to the tax return.
Additionally, the AAB receiving the tax return/payment form shall also machine
validate and stamp mark the word Received on the return/payment form as
proof of filing the return/payment form and payment of the tax by the taxpayer.
The machine validation on the return/payment form shall reflect the date of
payment, amount paid and transaction code, the name of the bank, branch code,
tellers code and tellers initials.
F) Before 12:00 NN of the following banking day, the head offices of the
AABs shall provide to BTR/BIR the daily total amount of BIR taxes they collected.
G) After receipt of payment but not later than 24 hours thereafter, the AAB
branch shall encode into the LBDE System and transmit to the concerned BIR
Data Center, the below data and copy furnish the AAB head office.
1. Date of the transaction;

2. Name of the taxpayer;
3. Taxpayer Identification Number (TIN) of the taxpayer;
4. Tax type which is being paid for;
5. Return period for the tax type being paid for;
6. Amount of tax paid;
7. Name of the drawee bank and check number, for tax payments
through checks;
SEC. 3. MODES OF PAYMENT TO AABs Aside from the
electronic payment system currently used by some taxpayers in paying
their BIR taxes, the rest shall pay their tax liabilities through any of the
following modes: a) over-the-counter cash payments; b) bank debit
system; or c) check payment system.
a) Over-the-counter cash payment refers to payment of tax liabilities to

authorized agent bank in the currencies (paper bills or coins) that are legal tender
in the Philippines. The maximum amount allowed per tax payment shall not
exceed ten thousand pesos (P10,000.00)
b) Bank debit system refers to the system whereby a taxpayer, through a

bank debit memo/advice, authorizes withdrawals from his/its existing bank
accounts for payment of tax liabilities.
The bank debit system mode is allowed only if the taxpayer has a bank
account with the AAB branch where he/it intends to file and pay his/its tax
return/form/declaration, provided said AAB branch is within the jurisdiction of the
BIR Revenue District Office (RDO) / Large Taxpayers District Office (LTDO)
where the tax payment is due and payable.
c) Checks refers to a bill of exchange or Order Instrument drawn on a

bank payable on demand.
In the issuance and accomplishment of checks for the payment of internal

revenue taxes, as illustrated below, the taxpayer shall indicate in the space
provided for PAY TO THE ORDER OF the following data: (1) presenting/collecting
bank or the bank where the payment is to be coursed and (2) FAO (For the
Account Of) Bureau of Internal Revenue as payee; and under the ACCOUNT
NAME the taxpayer identification number (TIN).
(Below is a sample of a tax check payment where the drawee bank and
presenting bank are different from each other.)
ACCOUNT No. ACCOUNT NAME Check No. R/T No.

000-249-15522-6 JUAN DELA CRUZ 0765695 01028
TIN: 012--345678-000
-
SEPT. 16, 2002
DOCUMENTARY STAMPS PAID
PAY TO THE LANDBANK BATASAN

ORDER OF FAO BUREAU OF INTERNAL REVENUE P 1,000,000.00
PESOS ONE MILLION ONLY
RCBC
RIZAL COMMERCIAL
BANKING CORPORATION (Signed)
A VOC Company
LEGASPI VILLAGE BRANCH JUAN DELA CRUZ
SALCEDO ST. LEGASPI VIL. MAKATI
O76569501028007=:000249155226
(Below is sample of a check tax payment drawn from and presented to the same
bank.)
ACCOUNT No. ACCOUNT NAME Check No. R/T No.

000-249-15522-6 JUAN DELA CRUZ 0765696 01028
TIN: 012-345678-000
SEPT. 16, 2002

PAY TO THE RCBC Legazpi Village
DOCUMENTARY STAMPS PAID
FAO BUREAU OF INTERNAL REVENUE P 1,000,000.00

ORDER OF
PESOS ONE MILLION ONLY
RCBC
RIZAL COMMERCIAL
BANKING CORPORATION
A VOC Company (Signed)
LEGASPI VILLAGE BRANCH
SALCEDO ST. LEGASPI VIL. MAKATI JUAN DELA CRUZ
O76569601028007=:000249155226
The following checks are, however, not acceptable as check payments for
internal revenue taxes:
1 Accommodation checks checks issued or drawn by a party

other than the taxpayer making the payment;
2 Second endorsed checks checks issued to the taxpayer as
payee who indorses the same as payment for taxes;
3 Stale checks checks dated more than six (6) months prior
to presentation to the authorized agent bank;
4 Postdated checks checks dated a day or several days
after the date of presentation to the authorized agent bank;
5 Unsigned checks checks with no signature of the drawer;
6 Checks with alterations/erasures.
AABs accepting checks for the payment of BIR taxes and other charges
must see to it that the check covers one tax type for one return period only.
Moreover, AABs must strictly comply with the systems and procedures for the
reception, processing, clearing and accounting of the checks to be prescribed
under a separate regulation.
Second indorsement of checks which are payable to the Bureau of

Internal Revenue or Commissioner of Internal Revenue is absolutely prohibited.
SEC. 4. TAX RETURNS PARTLY PAID THRU TAX DEBIT MEMOS
(TDMs) AABs are mandated to accept tax returns/payment forms partly paid
thru any of the modes of payment mentioned in Section 3 hereof and partly thru
TDMs duly and validly issued by the BIR. Before accepting the BIR tax return/
payment form partly paid thru tax debit memo, the AAB shall insure that the
number of the TDM is indicated in the BIR tax return/ payment form in the same
manner that the check number/drawee bank and bank debit advice number are
indicated in the tax return/payment form paid thru check or bank debit system,
respectively. A photocopy of the tax credit certificate (TCC), front and back
page, which was the source of the TDM, together with a copy of the TDM, must
be required from the taxpayer and attached to the BIR tax return/payment form.
TDMs are, however, not acceptable as payments for withholding taxes,

including Fringe Benefit Tax (clarified and implemented under RR No. 2-98, as
amended, and RR No. 3-98), and for taxes, fees and charges collected under
special schemes / procedures / programs of the Government / BIR as discussed
and elucidated in a separate revenue regulation. AABs shall see to it that this
restriction is strictly observed in the BIR tax returns/ payment forms they receive.
SEC. 5. ENROLLMENT OF TAXPAYERS WITH AUTHORIZED AGENT

BANK NOT REQUIRED Taxpayers are not required to enroll with any AAB
where they intend to file tax returns/payment forms and/or pay internal revenue
taxes. Taxpayers may file tax returns/payment forms and pay internal revenue
taxes with any AAB of the appropriate BIR office (Revenue District Office (RDO),
Large Taxpayers District Office (LTDO), or Large Taxpayers Service, etc.,
whichever is applicable) where they are required to file the particular
return/payment form.
SEC. 6. RESPONSIBILITY AND PRIVILEGE OF TAXPAYERS

Taxpayers shall see to it that their tax returns/payment forms with payment are
filed with and internal revenue taxes paid to legitimate AABs of the BIR.
Nonetheless, they may confirm their tax payments with their home RDO / LTDO
or LTDO / RDO where they are required to file tax returns/payment form and pay
internal revenue taxes.
SEC. 7. ADDITIONAL LIABILITIES/RESPONSIBILITIES OF AUTHO-

RIZED AGENT BANKs (AABs).
(a) Any diversion, non-remittance or under-remittance of the taxes

collected by AABs through fault or negligence of the bank accepting such
payment as well as the diversion of any payment for BIR taxes using the facilities
of the bank through fault or negligence of any of the banks personnel shall
subject the bank to civil and criminal liabilities provided for under Sections 248
and 275 of the Tax Code, as amended, and other existing laws, rules and
regulations. AABs shall be liable to the BIR for double the amount of taxes
diverted and unremitted, plus the increments and penalties prescribed by the Tax
Code, as amended, but the total penalties imposed may be reduced on
meritorious grounds subject to the approval of the majority of the members of the
Management Committee (MANCOM) of the BIR, composed of the Commissioner
of Internal Revenue and the four (4) Deputy Commissioners, where the
Commissioner of Internal Revenue votes for such reduction.
(b) The reports of AABs to be submitted to BTr/BIR (under Sec. 2) of

all the tax payments collected shall be in accordance with the forms prescribed
by BIR.
(c) The requirements prescribed in these regulations shall be included

in the accreditation criteria to be mentioned in the Memorandum of Agreement to
be signed by and among the BTR, BIR and the AAB for compliance by all AABs.
SEC. 8. REPEALING CLAUSE All rules and regulations or portions

thereof inconsistent with the provisions of these regulations are hereby modified,
amended or repealed accordingly.
SEC. 9. EFFECTIVITY These regulations shall take effect fifteen days

from date of publication in the Official Gazette or any newspaper of general
circulation. However, to provide sufficient time for AABs to make available to all
participating branches the deposit slip required under Section 2-D, the effectivity
date of the switch-over from the current acknowledgment slip shall be fifteen
days from the effectivity of this Revenue Regulation.
(Original Signed)
JOSE ISIDRO N. CAMACHO
(Original Signed)
GUILLERMO L. PARAYNO, JR.
REVENUE MEMORANDUM CIRCULAR NO. 22-2012
SUBJECT: Clarification on the implementation of Revenue Regulations No. 5 - 2012
TO : All Revenue Officials, Employees and Others Concerned
This Circular is issued to clarify the implementation and proper interpretation of

Revenue Regulations No. 5 2012, to wit:
1. All BIR Rulings issued prior to Jan 1, 1998 are not to be used as precedent by
any taxpayer as a basis to secure rulings for themselves for current business
transaction/s or in support of their position against any assessment.
2. All BIR Rulings issued prior to Jan 1, 1998 are not to be used by any BIR
action lawyer in issuing new rulings for request for rulings involving current
business transaction/s.
3. However, BIR Rulings issued prior to Jan 1, 1998 remains to be valid but
only:
a. to the taxpayer who was issued the ruling; and

b. covering the specific transaction/s which is the subject of the
same ruling
4. 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 current Tax
Code.
All concerned revenue officials and employees are hereby enjoined to give this
Circular as wide a publicity as possible.
(Original Signed)
K
Date: October 06, 2010
SUBJECT : Exchange of Information Regulations
TO : All Internal Revenue Officers and Others Concerned
Pursuant to the provisions of Section 244 in relation to Section 4 of the National Internal
Revenue Code of 1997 (Tax Code of 1997), as amended, these Regulations are hereby
promulgated to provide the necessary guidelines to enable the Bureau of Internal Revenue (BIR)
to respond to a request for exchange of information pursuant to an existing international
convention or agreement on tax matters and to implement Republic Act No. 10021 entitled An
Act to Allow the Exchange of Information by the Bureau of Internal Revenue on Tax Matters
Pursuant to Internationally-Agreed Tax Standards, Amending Sections 6 (F), 71 and 270 of the
National Internal Revenue Code of 1997, as Amended, and for Other Purposes.
SECTION 1. Definitions. - As used in these Regulations, the following terms shall be defined
as follows:
A) Financial Institutions shall refer to both private and government financial

institutions. It shall include but is not limited to banks, non-bank financial
intermediaries performing quasi-banking functions, and other non-bank financial
intermediaries including financing companies.
B) Foreign Tax Authority shall refer to the tax authority or tax administration of the
requesting State under the tax treaty or convention to which the Philippines is a
signatory or a party of.
C) Income Tax Returns shall refer to all Income Tax Forms issued/prescribed by the
BIR including attachments thereto, written statements or other documents designed to
be supplemental to and part of the said returns.
D) Inspection shall not only refer to opening to examination of income tax returns of
specific taxpayers subject of a request for exchange of information by a foreign tax
authority but also furnishing the latter certified copies of such income tax returns, if
included in the request.
E) International Agreements or Agreement on Tax Matters shall only refer to Tax

Information Exchange Agreements (TIEAs) which may be negotiated between the
Philippines and other Contracting States or jurisdictions.
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F) International Convention or Tax Treaty shall only refer to the Double Taxation
Convention (DTCs) or Double Taxation Agreements (DTAs) negotiated between the
Philippines and other Contracting States or jurisdictions for the avoidance of double
taxation and the prevention of fiscal evasion with respect to taxes on income.
SECTION 2. Authority of the Commissioner of Internal Revenue to Obtain Information

Including Information on Bank Deposits and Other Related Information Held by Financial
Institutions. - Any general or special law notwithstanding, pursuant to Section 3 of Republic Act
No. 10021, or to the powers granted to the Commissioner by the Tax Code of 1997, as amended,
and for the purpose of complying with the provisions on exchange of information contained in
international conventions or agreements on tax matters, the Commissioner is authorized to obtain
any information, including but not limited to bank deposits and other related information held by
financial institutions, as may be required to respond to a request pursuant to an international
convention or agreement on tax matters to which the Philippines is a signatory or a party to.
SECTION 3. Bureau of Internal Revenue (BIR) not Precluded from Using the Information
Requested by a Foreign Tax Authority. Once information is gathered pursuant to a request
for exchange of information under an international convention or agreement on tax matters, the
BIR is likewise authorized to use, for tax assessment, verification, audit and enforcement
purposes, any such information obtained from financial institutions.
SECTION 4. Authority of the Commissioner of Internal Revenue to Supply Information

which is at His Disposal. For the purpose of exchanging information pursuant to an
international convention or agreement on tax matters, the Commissioner of Internal Revenue is
hereby designated as the competent authority. Any such exchange of information shall not
constitute an unlawful divulgence of information under the Tax Code of 1997, as amended.
SECTION 5. Foreign Tax Authority May be Allowed to Examine Income Tax Returns of
Taxpayers in the Philippines. - Income tax returns of specific taxpayers subject of a request for
exchange of information by a foreign tax authority pursuant to an international convention or
agreement on tax matters shall be open to inspection upon the order of the President of the
Philippines, under rules and regulations as may be prescribed by the Secretary of Finance, upon
recommendation of the Commissioner.
SECTION 6. Obligation to Maintain Confidentiality. - Any information received by a

foreign tax authority from the BIR pursuant to an international convention or agreement on tax
matters shall be treated by the authority as absolutely confidential in nature in the same manner
as information obtained by the latter under its laws and regulations, and shall be disclosed only
to persons or authorities, including courts and administrative bodies, involved in the assessment
or collection of, the enforcement or prosecution in respect of, or the determination of appeals in
relation to, the taxes covered by such conventions or agreements.
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SECTION 7. Contents of the Requests. - In order for the BIR to promptly act upon a request,
the following should be clearly stated in the request:
a) The identity of the person under examination or investigation;

b) A statement of the information being sought including its nature and the form in
which the said foreign tax authority prefers to receive the information from the
Commissioner;
c) The tax purpose for which the information is being sought;
d) Grounds for believing that the information requested is held in the Philippines or is in
the possession or control of a person within the jurisdiction of the Philippines;
e) To the extent known, the name and address of any person believed to be in possession
of the requested information;
f) A statement that the request is in conformity with the law and administrative practices
of the said foreign tax authority, such that if the requested information was within the
jurisdiction of the said foreign tax authority then it would be able to obtain the
information under its laws or in the normal course of administrative practice and that
it is in conformity with an international convention or agreement on tax matters;
g) A statement that the requesting foreign tax authority is also allowed under its
domestic laws to exchange or furnish the information subject of the request; and
h) A statement that the requesting foreign tax authority has exhausted all means
available in its own territory to obtain the information, except those that would give
rise to disproportionate difficulties.
SECTION 8. Processing of Requests. - All requests for information pursuant to an international

convention or agreement on tax matters shall be coursed through the International Tax Affairs
Division (ITAD) of the BIR. Under no circumstances shall a revenue official or employee
communicate directly to the competent authority or foreign tax authority on matters pertaining to
the request without prior approval of the Commissioner.
Compliance with all the requirements for a valid request stated in the preceding section
shall be verified by ITAD. Should a request be received by another office, said request shall
immediately be forwarded to ITAD for processing.
After evaluation by the ITAD, the Commissioner shall inform in writing the financial
institution concerned of the request for exchange of information. The financial institution has
fifteen (15) days from receipt of the Commissioners notice to provide the information specified
therein. In the event that it is unable to provide the information, it should state in writing the
reasons for failure to do so, and should it needs additional time within which to submit the
information, it should request for extension which should not be more than thirty (30) days from
receipt of the original notice.
The Commissioner shall respond as promptly as possible to the request. To ensure a

prompt response, the Commissioner shall confirm receipt of a request in writing to the requesting
foreign tax authority and shall notify the latter of deficiencies in the request, if any, within sixty
(60) days from receipt of the request.
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If the Commissioner is unable to obtain and provide the information within ninety (90)
days from receipt of the request, including if he encounters obstacles in furnishing the
information or if he refuses to furnish the information, he shall immediately inform the
requesting foreign tax authority of the same, explaining the nature of the obstacles encountered
or the reasons for his refusal.
SECTION 9. Willful Refusal to Supply Information. Any officer, owner, agent, manager,
director or officer-in-charge of a financial institution within the purview of these Regulations
who, being required in writing by the Commissioner, willfully refuses to supply the required
information shall be punished by a fine of not less than Fifty Thousand Pesos (P50,000) but not
more than One Hundred Thousand Pesos (P100,000), or suffer imprisonment of not less than two
(2) years but not more than five (5) years, or both.
SECTION 10. Notice to Taxpayers. A taxpayer shall be duly notified in writing by the
Commissioner that a foreign tax authority is requesting for exchange of information held by
financial institutions pursuant to an international convention or agreement on tax matters, within
sixty (60) days from receipt of the said request.
SECTION 11. Repealing Clause. All existing rules, regulations and other issuances or
portions thereof inconsistent with the provisions hereof are hereby modified, repealed or revoked
accordingly.
SECTION 12. Effectivity Clause. These Regulations shall take effect after fifteen (15) days
following complete publication in a newspaper of general circulation.
(Original Signed)
CESAR V. PURISIMA
(Original Signed)
4
Quezon City
June 15, 2006
REVENUE REGULATIONS NO. 11 - 2006
SUBJECT : Consolidated Regulations on the Accreditation of Tax

Practitioners/Agents As A Prerequisite to Their Practice or
Representation Before the Bureau of Internal Revenue and
Further Simplifying and Superseding Revenue Regulations No.
15-99.

_______________________________________________________________________
Pursuant to Section 244 of the Tax Code of 1997, as last amended by Republic
Act No. 9337, these Regulations are hereby promulgated to implement the provisions of
Section 6(G) of the same Tax Code authorizing the Commissioner of Internal Revenue to
accredit and register tax agents with respect to their tax practice and representation before
the BIR and to further prescribe the following:
A. The creation of the Revenue National Accreditation Board in the National

Office and the Revenue Regional Accreditation Board in each Revenue
Region and to define the functions and composition of said Boards;
B. The guidelines and procedures to be observed in the accreditation and

suspension of tax practitioners recognized to practice before the Bureau of
Internal Revenue; and
C. The duties, restrictions and norms of conduct relating to such practice.
SECTION 1. Objective To prescribe administrative mechanisms in the accreditation

and registration of tax agents and practitioners, thereby bestowing them official
recognition relative to their tax practice/representation before the BIR, and setting the
minimum standards therefor.
SECTION 2. Definition of Terms
a. BOA shall refer to the Board of Accountancy under the Professional

Regulations Commission (PRC).
b. SEC shall refer to the Securities and Exchange Commission.

c. Revenue National Accreditation Board (RNAB) As first constituted under
Revenue Regulations (RR) No. 15-99, RNAB refers to the body in the BIR
National Office constituted to accredit tax practitioners/agents who are
regularly engaged in making representation for or on behalf of a client/s
before any BIR Office. It is composed of an Assistant Commissioner from
either the Operations Group, Legal & Inspection Group or Large Taxpayers
Service chosen by the Commissioner of Internal Revenue as Chairman, one
(1) representative from the private sector to be chosen by the Commissioner
of Internal Revenue from the nominees submitted by the Philippine Chamber
of Commerce and Industry (PCCI), or by the Philippine Institute of Certified
Public Accountants (PICPA), or by the Tax Management Association of the
Philippines (TMAP); and three (3) senior internal revenue officials in the
National Office with the rank of at least Division Chief, coming from the
aforementioned Group/Service, to be designated by the Commissioner. This
Board reviews and approves/disapproves the recommendation of the RRAB
of every BIR Regional Office.
d. Revenue Regional Accreditation Board (RRAB) Also constituted under RR

15-99, the RRAB is the body in the BIR Regional Office constituted to
accredit tax practitioners/agents who are regularly engaged in making
representation for or on behalf of a client/s before any BIR Office. It is
composed of the BIR Assistant Regional Director as Chairman, one (1)
representative from the private sector to be chosen by the Commissioner of
Internal Revenue from the nominees of the local PICPA chapter; and three
(3) senior internal revenue officials in the Regional Office with the rank of
Assistant Division Chief or higher to be designated by the Commissioner. In
the absence of the Assistant Regional Director, the Regional Director shall
act as the Chairman. This Board submits its recommendation to the RNAB
of the BIR National Office.
e. Tax Practitioners/Agents Those who are engaged in the regular preparation,

certification, audit and filing of tax returns, information returns or other
statements or reports required by the Code or Regulations; those who are
engaged in the regular preparation of requests for ruling, petitions for
reinvestigation, protests, requests for refund or tax credit certificates,
compromise settlement and/or abatement of tax liabilities and other official
papers and correspondence with the Bureau of Internal Revenue, and other
similar or related activities; or those who regularly appear in meetings,
conferences, and hearings before any office of the Bureau of Internal Revenue
officially on behalf of a taxpayer or client in all matters relating to a client's
rights, privileges, or liabilities under laws or regulations administered by the
Bureau of Internal Revenue, shall be deemed to be engaged in tax practice and
are required to apply for accreditation.
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SECTION 3. The Accreditation Boards
A. Powers and Functions - It shall be the duty of the Accreditation Boards to act upon
all applications to practice before the Bureau of Internal Revenue, to institute and
provide for the conduct of accreditation, suspension or dis-accreditation proceedings
and to perform such other duties as are necessary or appropriate to carry out their
functions as prescribed by the Secretary of Finance. Provided, however, that any
action or decision of the Revenue Regional Accreditation Board (RRAB) shall only
become final upon affirmation by the Revenue National Accreditation Board
(RNAB) and/or by the Commissioner.
B. Jurisdiction - The RRAB and RNAB shall have jurisdiction over and shall require
accreditation with the BIR of the following persons:
a) Individual tax practitioners engaged in private practice who are Certified

Public Accountants (CPAs); CPA-Lawyers who issue/sign auditor's
certificates or otherwise perform functions exclusively pertaining to a
CPA; and individuals other than CPAs who meet the qualifications
prescribed in these Regulations;
b) Partners of a General Professional Partnership (GPP) engaged in the

practice of taxation, accountancy, and/or auditing; their duly authorized
officers or representatives who regularly appear or otherwise engage in tax
practice before the BIR.
c) General Professional Partnership engaged in the practice of taxation,

accountancy and auditing who regularly appears or otherwise engaged in
tax practice before the BIR.
d) Officers or duly authorized representatives of incorporated business

entities engaged in accounting, auditing or tax consultancy services.
Individual applicants, GPPs and partners of GPPs who were already accredited
with the BOA and SEC shall no longer be required to undergo the various processes for
accreditation under these Regulations but shall automatically be accredited and issued a
BIR Certificate of Accreditation upon payment of the processing fee.
B.1. Exceptions. The following individuals are allowed to appear and practice before
the BIR without undergoing accreditation proceedings:
a) Individual-taxpayers acting on their own behalf, provided they present

satisfactory identification;
b) Members of the Philippine Bar not suffering from suspension/disbarment.

However, they may at their option, apply for accreditation;
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c) Other individuals presenting satisfactory proof of identification or
authority in any one of the following circumstances of limited practice or
special appearances:
(i) An individual representing a member of his or her

immediate family;
(ii) A regular full-time employee representing an individual

employer;
(iii) A bona fide officer or a regular full-time employee in

representation of his employer-corporation, association or
organized group;
(iv) A trustee, receiver, guardian, administrator, executor or

regular full-time employee in representation of a trust,
receivership, guardianship or estate;
(v) An officer or a regular employee of a government unit,

agency, or instrumentality representing said unit, agency or
instrumentality in the course of his or her official duties.
C. Term of Office of the Chairmen and Members of the RNAB and RRAB The
Chairmen and members of either Board shall serve for a maximum term of three (3)
years from the date of their nomination. Thereafter, the Commissioner of Internal
Revenue shall reconstitute the same through a Revenue Special Order for that
purpose with the end view that no chairman or member of either Board shall serve
therein for a term in excess of three consecutive years. Provided, however, that any
vacancy occurring prior to the end of said term shall be filled up by any qualified
senior officer as may be assigned by the Commissioner.
SECTION 4. Minimum Qualifications of Applicants - In general, the grant of

accreditation shall be based on the applicant's professional competence, integrity and
moral fitness. Along these lines, the following minimum qualifications are hereby
prescribed:
A. For Individual Tax Agents (other than a member of the Philippine Bar):
1. He must be a Certified Public Accountant (CPA) with current professional

license from the Professional Regulations Commission (PRC);
2. If he is not a Certified Public Accountant, he must have obtained at least a

degree in Law, Juris Doctor (JD) or its equivalent, or a Bachelor's degree
in Arts, Commerce, or Business Administration with at least eighteen (18)
units in accounting and/or taxation in a college or university recognized by
the Department of Education, Culture and Sports (DECS)/Department
of Education (DepEd)/Commission on Higher Education (CHED) or in a
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foreign school of known repute or one duly recognized by its government.
In addition, he must be able to demonstrate or present convincing proof of
special competence in tax matters or tax practice, e.g., previously acquired
experience; at least eighteen (18) credit hours of special training, seminars,
short-term courses, etc., in taxation obtained not more than one (1) year
prior to the application for accreditation, subject to evaluation and
approval by the Board;
3. He must be of good moral character as certified to under oath by at least

two (2) disinterested persons who are either members of the Philippine
Bar or Certified Public Accountants in good standing;
4. He must not have been charged with and convicted by final judgment of a
crime involving moral turpitude, or found guilty of any act or omission
penalized under the Tax Code, or found guilty of aiding or abetting or
causing the commission of any such offense by another; and
5. He must be a citizen of the Philippines.
B. For General Professional Partnerships In cases of GPPs engaged in the exercise of

professional accountancy, auditing or tax consultancy services (other than general
professional partnerships engaged in the practice of law), the application for
accreditation filed by the partners and/or the duly authorized officers and
representatives thereof shall conform with the following:
1. The partners and duly authorized officers or representatives thereof must

meet all the qualifications of an individual tax agent as prescribed in
Section 4(A) hereof. In lieu of the submission of documents or proof
thereof, said qualifications may be certified to under oath by the managing
partner of the firm; and
2. The partnership is one registered with the Securities and Exchange

Commission.
C. In the case of incorporated entities engaged in accounting and tax consultancy other
than general professional partnerships:
1. The firm must be registered with the Securities & Exchange Commission;
and
2. The applicant-officers or duly authorized representatives thereof must meet all

the qualifications of an individual as prescribed under Section 4(A) hereof.
5
SECTION 5. Accreditation Procedures -
A. Where to File - All applicants shall accomplish their application for accreditation in
the form to be prescribed by the Commissioner of Internal Revenue. The duly-
accomplished application form shall be submitted, together with all documentary
requirements prescribed in Item (B)(1) or (2) of this Section, whichever is applicable
with the RRAB of the place where the individual applicant or general professional
partnership has his/its residence or principal place of business.
Individual applicants and GPPs who are duly accredited by the BOA and
SEC, however, shall submit their duly accomplished application form together with
the documentary requirements prescribed in item (B)(3) of this Section with the
RNAB.
B. Documentary Requirements - Applicants shall submit, together with their duly

accomplished application forms, the following documents:
1. For Individual Applicants:
a. Certificate of registration and current license with the Professional

Regulations Commission, if a CPA;
b. Certificate of membership with PICPA or ACCPA, if a CPA;
c. Certificate of Good Moral Character issued by two (2)

disinterested persons, who are either member of the Bar or
Certified Public Accountant in good standing; and
d. If non-CPA, certified copy of transcript of records from the

university or college showing compliance with the required units
in accounting or taxation as prescribed in Section 4(A)(2) hereof;
or in lieu thereof, proof of special competence in tax matters or tax
practice, e.g., previously acquired experience; at least eighteen (18)
credit hours of special training, seminars, short courses, etc., in
taxation, obtained not more than one (1) year prior to the
application for accreditation, for the appreciation and approval by
the concerned Board.
2. For Partners, Directors, Officers or duly authorized representatives of

General Professional Partnerships and incorporated entities engaged in
accounting and tax consultancy:
a. Certificate of good moral character issued by two (2) disinterested

persons who may either be member of the Bar or Certified Public
Accountant in good standing;
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b. Other applicable requirements for an individual applicant, or in
lieu thereof, certification under oath by the managing partner(s)
that the applicant acting for the firm possesses all the qualifications
prescribed under Section 4(A) of these Regulations.
c. For those Partners, Directors, Officers or duly authorized

representatives of General Professional Partnerships duly
registered with the SEC, in addition to the above documentary
requirements, a certification from the BOA if the said Partner,
Director, Officer or duly authorized representative is a CPA.
Provided, however, that the requirements under letters a, b, and c
of Section 5(B)(1) hereof need not be submitted if the Professional
Partnership can submit a certified true copy of its SEC Certificate
of Accreditation as well as the SEC Certificates of Accreditation
and BOA Certificates of Registration of all the partners, officers
and representatives of the Professional Partnership of CPAs.
d. List of all current partners, directors, officers, associates or

representatives duly authorized by the GPP to act on its behalf in
representing its client before the BIR.
3. For Individuals and GPPs accredited by BOA and SEC:
a. Certified true copy of BOA Certificate of Registration.
b. Certified true copy of SEC Certificate of Accreditation.
C. Processing Fee - Each applicant shall pay a non-refundable processing fee of Five
hundred pesos (P500.00) upon filing of his application for accreditation. If the
applicant is a general professional partnership, the fee shall be paid by each partner
and authorized representative thereof. In the case of incorporated entities engaged in
accounting and tax consultancy services, the fee shall be paid by each of the applicant
officers or designated representatives thereof.
D. Additional Requirements - Accredited tax agents shall likewise be required to

submit the following documents as an attachment to the initial filing of reports,
protests, request for ruling, official correspondence and other statements, papers or
documents filed on behalf of a particular taxpayer as proof of their authority to
represent the concerned taxpayer:
a. Copy of current Engagement Letter with clients.
b. Special Power of Attorney executed by the client authorizing the

practitioner to represent him before the BIR.
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SECTION 6. Processing of Application for Accreditation -
A. The RRAB shall act upon all applications for accreditation by verifying the
qualifications of an applicant, and the completeness of the required documentation.
B. If an application is determined to be complete, that is, all necessary supporting

documentations have been submitted, and the applicant's qualifications found to be in
conformity with the provisions of Section 4 of these Regulations, the application shall
be stamped "RECEIVED" bearing the date the completed application was received by
the RRAB. Thereafter, the RRAB shall, within thirty (30) days from receipt thereof,
evaluate the application and forward its recommendation thereon to the RNAB.
C. The RNAB shall act upon all applications for accreditation recommended to it by the
RRAB. In all cases, the RNAB shall have the exclusive authority to
approve/disapprove applications for accreditation which shall be acted upon within
thirty (30) days from receipt of the recommendation of the RRAB.
D. Application for accreditation of practitioners who are duly accredited by the BOA and
SEC, as evidenced by a copy of the BOA Certificate of Registration and SEC
Certificate of Accreditation shall, upon payment of the processing fee, be
automatically issued a BIR Certificate of Accreditation by the RNAB.
E. Applicants whose applications for accreditation have been approved by the RNAB
shall be issued a Certificate of Accreditation signed by its Chairman. Such Certificate
shall be valid for a period of three (3) years from the date of issue, unless sooner
revoked for cause. For purposes of easy identification, the Commissioner of Internal
Revenue shall issue an identification card to each accredited tax agent or practitioner.
F. Application for accreditation which has been disapproved by the RRAB shall be
appealable to the RNAB. Any application disapproved by the RNAB may be
appealed to the Commissioner. An adverse decision by the Commissioner may be
appealed to the Secretary of Finance, who shall rule on the appeal within sixty (60)
days from receipt of such appeal. Failure of the Secretary of Finance to rule on the
appeal within the prescribed period shall be deemed as approval of the application for
accreditation of the appellant.
G. The resignation, retirement, death or incapacity of any partner of a general

professional partnership who has been accredited by the RNAB shall not result in the
cancellation of the partnership's accreditation but only that of the concerned partner's
accreditation. The partnership, however, must notify the RNAB, and the RRAB
having jurisdiction over the partnership's principal place of business, of such
occurrence and shall surrender to the RNAB the concerned partner's Certificate of
Registration or Identification Card for cancellation.
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SECTION 7. Acceptable Norms of Conduct of a Tax Practitioner - The following
norms of conduct are hereby defined as a guide for the observance of tax practitioners.
Willful or reckless violation of any of them may be subject of disciplinary action before
the Boards:
A. No tax practitioner shall represent conflicting interests in his practice before the
Bureau of Internal Revenue, except by express consent of all directly interested
parties after full disclosure has been made.
B. The practitioner must make inquiry as to all relevant facts of the tax case, be satisfied
that the material facts are accurately and completely described, and assure that any
representation contains no falsehood.
C. The practitioner must relate the law to the actual facts and, when addressing issues
based on future assumptions, must clearly identify what facts are assumed.
D. The practitioner must ascertain that all material tax issues have been fairly addressed
and fully considered.
E. Where possible, the practitioner must provide an opinion consonant with existing laws
and regulations. He shall not present as true those matters or issues which he knows
to have been voided, superseded or otherwise invalidated.
F. The practitioner advising a client on matters of tax liability must inform the client of
the penalties which may likely apply to him in case of failure or omission to pay the
tax in relation to the position advised, prepared or reported.
G. The practitioner advising a client on tax matters must make reasonable inquiries if the
information as furnished appears to be incorrect, inconsistent or incomplete and to the
extent possible, examine the proof or relevant documents in support of his client's
representations.
SECTION 8. Suspension or Cancellation of Certificate of Accreditation -
A. Causes for Suspension, Cancellation or Revocation - The accreditation certificate may

be suspended, cancelled or revoked as the case may be, upon petition by a taxpayer or
by the PICPA or by the TMAP and other similar professional organization, or upon
petition by any internal revenue officer, or upon motu propio action by the RRAB or
RNAB, after due notice and hearing set for the purpose, based on any of the
following grounds:
1. Conviction of any criminal offense under the National Internal Revenue

Code, or of any offense involving dishonesty, or breach of trust;
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2. Giving false or misleading information, or participating in any way in the
giving of false or misleading information to the Bureau of Internal
Revenue or to any officer or employee thereof, in connection with any
matter pending before them, knowing such information to be false or
misleading;
3. The use of false or misleading representations with intent to deceive a

client or prospective client in order to procure employment, or
representing that he can ably obtain special consideration or action from
the Bureau of Internal Revenue or officer or employee thereof by
improper or unlawful means;
4. Willfully failing to make a tax return in violation of the NIRC, or evading,

attempting to evade, or participating in any way in evading or attempting
to evade any national internal revenue tax or payment thereof;
5. Knowingly counseling or suggesting to a client or prospective client of an

illegal plan to evade taxes or payment thereof, or concealing assets to
evade taxes or payment thereof;
6. Misappropriating or failing to remit, funds received from a client for the

purpose of payment of taxes;
7. Directly or indirectly attempting to influence, or offering or agreeing to

attempt to influence the official action of any officer or employee of the
BIR by the use of threats, false accusations, duress or coercion, or by
offering any special inducement or promise of advantage or by bestowing
any gift, favor or thing of substantial value;
8. Disbarment or suspension from the practice as an attorney or as a certified

public accountant;
9. Contemptuous conduct in connection with practice before the BIR,

including use of abusive language, making false accusations and
statements, knowing them to be false, or circulating or publishing
malicious or libelous matter;
10. Giving a false opinion, knowingly, recklessly or through gross

incompetence, including an opinion which is intentionally or recklessly
misleading, or a pattern of providing incompetent opinions on questions
arising under the Tax Code. False opinion includes those which reflect or
result from a known misstatement of fact or law from an assertion of a
position known to be unwarranted under existing laws or regulations; from
advising or assisting in conduct known to be illegal or fraudulent; from
concealment of matters required by law or regulations to be revealed. For
purposes of this paragraph, "reckless conduct" is a highly unreasonable
10
omission or misrepresentation involving an extreme departure from the
standards of ordinary care that a practitioner should observe under the
circumstances. A pattern of conduct is a factor that will be taken into
account in determining whether a practitioner acted knowingly, recklessly,
or through gross incompetence;
11. Upon administrative finding by the concerned Board that the holder of an
accreditation certificate has committed any of the following offenses
penalized under the Tax Code of 1997:
a. Willfully falsifying any report or statement bearing on any

examination or audit, or rendering a report, including exhibits,
statements, schedules or other forms of accountancy work which
have not been verified by him personally or under his supervision
or by a member of his firm or by a member of his staff in
accordance with generally accepted accounting and auditing
practices;
b. Certifying financial statements containing essential misstatements

of facts or omission of which he has personal knowledge with
respect to the transactions, taxable income, deduction and
exemption of his client;
c. Signing and certifying financial statements without conducting an

actual audit;
d. Assisting/Aiding any taxpayer in the use of

accounting/bookkeeping records for internal revenue purposes not
in conformity with the requirements prescribed in the Tax Code or
rules and regulations promulgated thereunder;
e. Knowingly making any false entry or entering any false or

fictitious name in the books of accounts or records of a taxpayer;
f. Aiding or keeping in behalf of a taxpayer two or more sets of such

records or books of accounts;
g. Willfully attempting in any manner to evade or defeat any tax

imposed under the Tax Code;
h. Willfully using fake or falsified Revenue Official Receipts

(RORs), Letters of Authority (LAs), Certificates Authorizing
Registration (CARs), Tax Credit Certificates (TCCs), Tax Debit
Memoranda (TDMs) and other accountable forms of the Bureau of
Internal Revenue;
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i. Corrupting/Bribing or attempting to corrupt/bribe any internal
revenue official or employee through any of the modes of
corruption as defined by the Anti-Graft and Corrupt Practices Act;
j. Such other acts or omissions similar to the foregoing, including all

other offenses punishable under the Tax Code or other laws.
B. Filing of Petitions for Disaccreditation/Suspension -
1. A Petition for Disaccreditation/Suspension of an Accredited Tax Agent

may be filed with the RRAB having jurisdiction over the residence or
principal place of business of the accredited tax agent against whom the
Petition is being filed.
2. All Petitions must be filed together with appropriate documents to support

the premises upon which the Petition is anchored.
3. Petitions filed by PICPA, TMAP or any other similar professional or non-

governmental organization must be signed by the incumbent President of
the organization concerned.
4. Petitions found to have been filed by fictitious persons or organizations,

upon verification by the RRAB concerned, shall be dismissed for lack of
factual or legal bases.
C. Administrative Proceedings -
1. No Accredited Tax Agent shall be suspended or disaccredited without a

prior hearing set for the purpose.
2. The RRAB with whom a Petition for Disaccreditation/Suspension was

filed shall conduct hearing(s) on such Petition, to allow both the Petitioner
and the Accredited Tax Agent concerned to present their side of the case.
3. In the conduct of hearings, a quorum is sufficient to convene the RRAB.

All such proceedings shall be presided over by the Assistant Regional
Director, in his capacity as Chairman, or in his absence, by the designated
Vice-Chairman of the RRAB.
4. Upon termination of the hearing, the RRAB shall submit the entire docket
of the proceedings for a Petition for Disaccreditation/Suspension, together
with its recommendation thereon, to the RNAB, for final action.
5. The disaccreditation or suspension of an Accredited Tax Agent must be

reached by a majority vote of the members of the RNAB present and
voting.
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6. In cases of disaccreditation or suspension, the RNAB shall issue to the
Tax Agent concerned a Notice of Disaccreditation/Suspension signed by
its Chairman. A copy of such Notice shall be sent to the Petitioner.
7. In the event that a Petition for Disaccreditation/Suspension is not upheld,

the RNAB shall inform both parties of such decision, in an official
communication signed by its Chairman.
D. Appeal -
1. In the event that accreditation previously granted to a Tax Agent is

cancelled, suspended or revoked, the applicant or Tax Agent concerned
may appeal such disaccreditation/suspension to the Commissioner of
Internal Revenue within fifteen (15) days from the date of receipt of the
official notice of denial or Notice of Disaccreditation/Suspension.
2. The decision of the Commissioner of Internal Revenue shall be

immediately executory.
3. The decision of the Commissioner of Internal Revenue may, in turn, be

appealed by the applicant/Tax Agent concerned to the Secretary of
Finance, through a Petition for Reconsideration, within fifteen (15) days
from the date of receipt of such decision.
4. The Secretary of Finance shall act on a Petition for Reconsideration within

sixty (60) days from the date of filing of such Petition. In the event that the
Secretary of Finance should be unable to act on such Petition within the
specified period, the decision of the Commissioner shall be deemed
sustained.
SECTION 9. Effects of Accreditation - Only those Tax Agents/Practitioners, Partners

or Officers of General Professional Partnerships, or Officers or Directors of corporate
entities engaged in tax practice who have been issued Certificate of Accreditation or ID
card shall be allowed to represent a taxpayer or transact business with the Bureau of
Internal Revenue in representation of a taxpayer for the purpose(s) defined in these
Regulations. The BIR can refuse to transact official business with tax practitioners who
are not accredited before it and shall require that certain official statements such as
returns, financial statements, reports, protests, requests for ruling, official correspondence
and other statements, papers or documents filed on behalf of a taxpayer be signed or
certified to by accredited persons which shall bear the following information below the
signature of the latter:
A. For Individuals (CPA's, Members of GPPs, and others)
a. 1. Taxpayer Identification Number (TIN); and
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a. 2. Certificate of Accreditation Number, Date of Issuance, and Date of
Expiry.
B. For members of the Philippine Bar:
b. 1. Taxpayer Identification Number (TIN); and
b. 2. Attorney's Roll number or Accreditation Number, if any.
None of the provisions of these Regulations shall be construed to authorize non-

CPAs who are granted accredited tax agent status by virtue of these Regulations to sign
the financial statements Auditors Certificate even if the same were for BIR purposes
only.
All accredited Tax Agents/Practitioners shall be included in a Master List of

Accredited Tax Agents/Practitioners which shall be kept up-to-date by the RNAB.
SECTION 10. Effectivity - These Regulations which supersede Revenue Regulations

No. 15-99 shall take effect after fifteen (15) days following publication in a newspaper of
general circulation.
(Original Signed)
MARGARITO B. TEVES
(Original Signed)
JOSE MARIO C. BUAG
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Quezon City
February 24, 2010
SUBJECT : Amending Revenue Regulations No. 11-2006 on the Accreditation of

Tax Practitioners/Agents As A Prerequisite to Their Practice or
Representation Before the Bureau of Internal Revenue
Pursuant to the provisions of Sections 6(G), 244 and 275 of the National Internal Revenue
Code of 1997, as amended, these Regulations are hereby promulgated to amend portions of
Revenue Regulations No. 11-2006 pertaining to the accreditation procedures of tax
practitioners/agents.
Section 1. OBJECTIVES These Regulations are being issued to (1) prescribe additional
guidelines in the accreditation of tax agents and practitioners (TAPs) to shorten the processing
time; (2) ensure the continuing professional education and training of TAPs from duly
accredited service providers; (3) implement a transparent and accessible database of accredited,
suspended and delisted TAPs; (4) require the annual submission of schedule of services provided
by the TAPs; (5) specify specific penalties and sanctions for violation of the provisions of these
Regulations; and, (6) prescribe the payment of the annual registration fee for each TAP.
Section 2. Definition of Terms Paragraphs c and d of Section 2 of RR No. 11-2006 is hereby

amended to read as follows:
SECTION 2. Definition of Terms
xxx xxx xxx
c. Revenue National Accreditation Board (RNAB) As first constituted under
Revenue Regulations (RR) No. 15-99, RNAB refers to the body in the BIR National
Office constituted to accredit tax practitioners/agents who are regularly engaged in
making representation for or on behalf of a client/s before any BIR Office. It is
composed of an Assistant Commissioner from either the Operations Group, Legal and
Inspection Group or Large Taxpayers Service chosen by the Commissioner of Internal
Revenue as Chairman, one (1) representative from the private sector to be chosen by the
Commissioner of Internal Revenue from the nominees submitted by the Philippine
Chamber of Commerce and Industry (PCCI), or by the Philippine Institute of Certified
Public Accountants (PICPA), or by the Tax Management Association of the Philippines
1
(TMAP); and three (3) senior internal revenue officials in the National Office with the
rank of at least Division Chief, coming from the aforementioned Group/Service, to be
designated by the Commissioner. This Board shall have original and exclusive authority
to accept applications for accreditation of TAPs belonging to General Professional
Partnerships (GPPs) or incorporated entities engaged in accounting and tax consultancy
provided that the number of practicing TAPs belonging to said GPP or incorporated
entity shall exceed ten (10).
d. Revenue Regional Accreditation Board (RRAB) Also constituted under RR 15-
99, the RRAB is the body in the BIR Regional Office constituted to accredit tax
practitioners/agents who are regularly engaged in making representation for or on behalf
of a client/s before any BIR Office. It is composed of the BIR Assistant Regional
Director as Chairman, one (1) representative from the private sector to be chosen by the
Commissioner of Internal Revenue from the nominees of the local PICPA chapter; and
three (3) senior internal revenue officials in the Regional Office with the rank of
Assistant Division Chief or higher to be designated by the Commissioner. In the absence
of the Assistant Regional Director, the Regional Director shall act as the Chairman. This
Board shall have original and exclusive authority to accept applications for accreditation
of individual TAPs and those belonging to GPPs or incorporated entities engaged in
accounting and tax consultancy provided that the number of practicing TAPs belonging
to such GPP or incorporated entity does not exceed ten (10).
Section 3. The Accreditation Boards Section 3 of RR No. 11-2006 is hereby amended to

read as follows:
SECTION 3. The Accreditation Boards
A. Powers and Functions It shall be the duty of the Accreditation Boards to act upon
all applications to practice before the Bureau of Internal Revenue, to institute and
provide for the conduct of accreditation, suspension or dis-accreditation proceedings
and to perform such other duties as are necessary or appropriate to carry out their
functions as prescribed by the Secretary of Finance, Provided, that any action or
decision of the RRAB and RNAB shall be final and appealable only to the
Commissioner.
B. Jurisdiction The RRAB and RNAB shall have jurisdiction over and shall require
accreditation with the BIR of the following persons:
xxx xxx xxx
d) xxx xxx xxx

Individual applicants, GPPs and partners of GPPs who were already accredited with
the BOA and SEC shall similarly be required to undergo the various processes for
accreditation under these Regulations and shall no longer be automatically
accredited and issued a BIR Certificate of Accreditation.
2
B.1 Exceptions. xxx xxx
C. Term of Office of the Chairmen and Members of the RNAB and RRAB - xxx
Section 4. MINIMUM QUALIFICATION OF APPLICANTS.- Section 4 of RR No. 11-

2006 is hereby amended to read as follows:
SECTION 4. Minimum Qualifications of Applicants x x x
A. For Individual Tax Agents:
1. xxx xxx xxx
6. He must have completed the minimum number of hours of continuing

professional education (CPE) from BIR-accredited CPE providers for each
year he practices with the BIR.
Section 5. ACCREDITATION PROCEDURES. Section 5 of RR No. 11-2006 is hereby

amended to read as follows:
A. Where to File - All applicants shall file their application for accreditation in the
form to be prescribed by the Commissioner of Internal Revenue. The duly
accomplished application form shall be submitted together with all documentary
requirements prescribed in item B(1) or (2) of this Section , with the RRAB or
RNAB of the place where the individual applicant or general professional
partnership has his/its principal residence or place of business, whichever is
applicable.
B. Documentary Requirements Applicants shall submit, together with their duly
xxx xxx xxx
d. Proof of special competence in tax matters or tax practice, to wit:

d.1 Certificate of Employment (i.e. meaningful experience in tax
related work;
d.2 Written certification of continuing professional education
(CPE) units from BIR-accredited CPE providers, with
complete details on the course, dates and number of CPE
hours taken by the TAP. For this purpose, the BIR shall
3
prescribe the guidelines for the accreditation of and
conduct of training by the CPE providers;
Pending the issuance of the guidelines by the BIR for the
accreditation of CPE providers, the applicant shall only
comply with the requirements prescribed in (a) to (c) and
(d.1).
e. A written undertaking under oath to preserve working papers
within the period prescribed under Section 235 of the NIRC of
1997, as amended, and making them available to the Bureaus
authorized representative/s when required or directed to do so.
2. For Partners, Directors, Officers or duly authorized representatives of

General Professional Partnerships and incorporated entities engaged in
accounting and tax consultancy:
xxx xxx xxx

c. For those Partners, Directors, Officers or duly authorized
representatives of General Professional Partnerships duly
registered with the SEC, in addition to the above documentary
requirements, a certification from the BOA if the said Partner,
Director, Officer or duly authorized representative is a CPA.
d. xxx xxx xxx
e. A written undertaking under oath by the managing
partner/director that the firm/entity shall fully cooperate with the
Bureau by preserving its working papers within the period
prescribed under Section 235 of the NIRC of 1997, as amended,
and making them available to the Bureaus authorized
representative/s when required or directed to do so.
C. Processing fee. Each applicant shall pay a non-refundable fee of One Thousand
Pesos (P1,000) upon his filing of application for accreditation. If the applicant is
a general professional partnership, the fee shall be paid for each partner/s and any
other authorized representative/s thereof. In the case of incorporated entities
engaged in the accounting and tax consultancy services, the fee shall be paid by
each of the applicant officer/s or designated representative/s thereof.
D. Additional Requirements - xxx xxx xxx
E. Submission of annual information - All accredited TAPs shall submit to the
RRAB/RNAB on or before the last day of payment of annual registration fee, the
following:
a. A list of the engagements dealing with any of the BIR Offices for the prior
4
year; and
b. A list of the CPE hours earned by the accredited tax agents/practitioners
for the previous year.
Section 6. PROCESSING OF APPLICATION FOR ACCREDITATION. Section 6 of

RR No 11-2006 is hereby amended to read as follows:
A. The RRAB shall process the application/s and issue the certificate/s of accreditation of
individuals, GPPs and incorporated entities with TAPs of 10 or less persons, while the
RNAB shall process the application/s and approve the certificate/s of accreditation for
individuals, GPPs and incorporated entities with TAPs of 11 or more persons. In cases
where the individuals, GPPs and incorporated entities had previously accredited 10 or
less TAPs and shall subsequently apply for accreditation of additional TAPs exceeding
the 10 person threshold, said application shall be filed with the RNAB which shall
process the application/s and issue the certification/s of accreditation.
B. The RRAB and RNAB shall act upon all applications for accreditation by verifying the
qualifications of an applicant, and the completeness of the required documentation. If an
application is determined to be complete, that is, all necessary supporting documentations
have been submitted, and the applicant's qualifications found to be in conformity with the
provisions of Section 4 of these Regulations, the application shall be stamped
"RECEIVED" bearing the date the completed application was received by the
RRAB/RNAB.
C. In all cases, the RRAB/RNAB shall have the exclusive authority to approve/disapprove
applications for accreditation falling within their respective jurisdiction which shall be
acted upon within thirty (30) days from receipt of the complete application.
D. Applicants whose applications for accreditation have been approved by the RRAB/RNAB
shall be issued a Certificate of Accreditation signed by their respective Chairman. Such
Certificate shall be valid for a period of three (3) years from the date of issue, unless
sooner revoked for cause. For purposes of easy identification, the Commissioner of
Internal Revenue shall issue an identification card to each accredited tax agent or
practitioner.
E. Application for accreditation which has been disapproved by the RRAB/RNAB may be
appealed to the Commissioner. An adverse decision by the Commissioner may be
appealed to the Secretary of Finance, who shall rule on the appeal within sixty (60) days
from receipt of such appeal. Failure of the Secretary of Finance to rule on the appeal
within the prescribed period shall be deemed as approval of the application for
accreditation of the appellant.
F. The resignation, retirement, death or incapacity of any partner of a general professional

partnership who has been accredited by the RNAB/RNAB shall not result in the
cancellation of the partnership's accreditation but only that of the concerned partner's
5
accreditation. The partnership, however, must notify the RNAB, or the RRAB having
jurisdiction over the partnership's principal place of business, of such occurrence and
shall surrender to the RNAB/RRAB the concerned partner's Certificate of Registration or
Identification Card for cancellation.
Section 7. Suspension or Cancellation of Certificate of Accreditation. Paragraphs A, B,

and C of Section 8 of RR 11-2006 is hereby amended to read as follows:
SECTION 8. Suspension or Cancellation of Certificate of Accreditation

A. Causes for Suspension, Cancellation or Revocation x x x
1. xxx xxx xxx
10. Giving a false opinion, knowingly, recklessly or through gross incompetence,

including an opinion which is intentionally or recklessly misleading, or a
pattern of providing incompetent opinions on questions arising under the Tax
Code. False opinion includes those which reflect or result from a known
misstatement of fact or law; from an assertion of a position known to be
unwarranted under existing laws or regulations; from advising or assisting in
conduct known to be illegal or fraudulent; from concealment of matters
required by law or regulations to be revealed. For purposes of this paragraph,
"reckless conduct" is a highly unreasonable omission or misrepresentation
involving an extreme departure from the standards of ordinary care that a
practitioner should observe under the circumstances arising from non-
compliance by the taxpayer-client with existing provisions of the Tax Code, its
rules and regulations, including financial accounting standards and tax
accounting rules. Reckless conduct on the part of the tax
agent/practitioner shall be presumed when there is substantial
underdeclaration of client-taxpayers taxable sales, receipts or income, or a
substantial overstatement of its deductions as defined under Section 248 of the
NIRC as amended, and such discrepancy is discovered by the Bureau in the
conduct of its enforcement activities. A pattern of conduct is a factor that will
be taken into account in determining whether a practitioner acted knowingly,
recklessly, or through gross incompetence;
11. Failure to comply with the completion of the CPE; and
12. Consistent failure to indicate the BIR accreditation number in the documents
filed with the BIR.
B. Filing of Petitions for Disaccreditation/Suspension
1. A Petition for Disaccreditation/Suspension of an Accredited Tax Agent may be

filed with the RRAB or RNAB having jurisdiction over the residence or principal
6
place of business of the accredited tax agent against whom the Petition is being
filed.
2. xxx xxx xxx
3. xxx xxx xxx
4. Petitions found to have been filed by fictitious persons or organizations, upon
verification by the RRAB or RNAB concerned, shall be dismissed for lack of
factual or legal bases.
C. Administrative Proceedings
1. xxx xxx xxx.

2. The RRAB or RNAB with whom a Petition for Disaccreditation/Suspension was
filed shall conduct hearing(s) on such Petition, to allow both the Petitioner and the
Accredited Tax Agent concerned to present their side of the case.
3. In the conduct of hearings, a quorum is sufficient to convene the RRAB or RNAB.
4. Upon termination of the hearing, the RRAB or RNAB shall decide by a majority
vote of the members present and voting, whether to grant or deny the Petition.
5. In cases of disaccreditation or suspension, the RRAB or RNAB shall issue to the
Tax Agent concerned a Notice of Disaccreditation/Suspension signed by its
Chairman. A copy of such Notice shall be sent to the Petitioner.
6. In the event that a Petition for Disaccreditation/Suspension is denied, the RRAB
or RNAB shall inform both parties of such decision, in an official communication
signed by its Chairman.
D. Appeal
xxx xxx
Section 8. Effects of Accreditation. Section 9 of RR No. 11-2006 is hereby amended to read

as follows:
SECTION 9. Effects of Accreditation - Only those Tax Agents/Practitioners,

Partners or Officers of General Professional Partnerships, or Officers or Directors of
corporate entities engaged in tax practice who have been issued Certificate of
Accreditation or ID card shall be allowed to represent a taxpayer or transact business with
the Bureau of Internal Revenue in representation of a taxpayer for the purpose(s) defined
in these Regulations. The BIR can refuse to transact official business with tax
practitioners who are not accredited before it and shall require that certain official
statements such as returns, financial statements, reports, protests, requests for ruling,
official correspondence and other statements, papers or documents filed on behalf of a
7
taxpayer be signed or certified to by accredited persons which shall bear the following
information below the signature of the latter:
A. For individuals (CPAs Members of GPPs, and other)
a.1 Taxpayer Identification Number (TIN); and
a.2 Certification of Accreditation Number; Date of Issuance, and Date of

Expiry
B. For members of the Philippine Bar:
a.1 Taxpayer Identification Number (TIN);
a.2 Attorneys Roll Number; and
a.3 Mandatory Continuing Legal Education (MCLE) Compliance Number.
None of the provisions of these Regulations shall be construed to authorize non-

CPAs who are granted accredited tax agent status by virtue of these Regulations to sign
the financial statements Auditors Certificate even if the same were for BIR purposes
only.
All accredited Tax Agents/Practitioners shall be included in a Master List of

Accredited Tax Agents/Practitioners which shall be kept up-to-date by the RNAB. The
RNAB shall likewise keep an up-to-date Master List of all suspended/ disaccredited Tax
Agents/Practitioners. This Master List shall be posted in the BIR website and/or shall be
published in a newspaper of general circulation in order that this list shall be readily
available for reference by the public.
Section 9. Renewal of Accreditation Section 10 of RR No. 10-2006 is hereby amended to

read as follows:
SECTION 10. Renewal of Accreditation. Within 60 days prior to the expiration of

the accreditation, Tax Agents/Practitioners as defined under Section 2(e) hereof may
apply for renewal of their accreditation.
Section 10. Registration. A new section entitled Section 11 on the registration shall be
inserted to read as follows:
Section 11. Registration of Tax Agents and Practitioners. - All accredited TAPs,
whether engaged in individual practice, or belonging to GPPs or incorporated entities
engaged in accounting and tax consultancy, including lawyers engaged in tax practice
before the BIR, shall pay the registration fee of Five Hundred Pesos (P500.00) in the
8
Revenue District Office (RDO) having jurisdiction over the principal place of business of
the individual practitioner, GPP or incorporated entity on or before January 31 of each
year.
Section 11. Transitory Provisions. - A new section entitled Section 12 on the transitory
provisions shall be inserted to read as follows:
Section 12. Transitory Provisions. - All currently accredited TAPs, whether engaged in
individual practice, or belonging to GPPs or incorporated entities engaged in accounting
and tax consultancy, including lawyers engaged in tax practice before the BIR, shall pay
the registration fee of Five Hundred Pesos (P500.00) not later than March 15, 2010.
TAPs who have previously been accredited but whose accreditation has expired, or those
TAPs who have not filed their applications but have been practicing with the BIR are
required to file their application for accreditation not later than March 15, 2010.
Section 12. Sanctions. - A new section entitled Section 13 on sanctions shall be inserted to read
as follows:
Section 13. Sanctions. Any TAP who violates any provision of Revenue Regulations
No. 11-2006 or this Regulation shall, upon conviction for each act or omission, be
punished by a fine of One Thousand Pesos (P1,000.00) or suffer imprisonment of not
more than six (6) months, or both.
Section 13. Repealing Clause. All rules and regulation or any part thereof inconsistent with
the provisions of these Regulations are hereby amended or repealed accordingly.
Section 14. Effectivity. - These Regulations shall take effect fifteen (15) days after publication
in the official gazette or in a newspaper of general circulation.
(Original Signed)
MARGARITO B. TEVES
JOEL L. TAN-TORRES
9
November 25, 2010
SUBJECT: Amending Pertinent Provisions of Revenue Regulations Nos. 11-2006 and 4-2010 on
the Accreditation of Tax Practitioners/Agents As a Prerequisite to Their Practice and
Representation Before the Bureau of Internal Revenue
Pursuant to the provisions of Section 244 and 275 of the National Internal Revenue Code of
1997 (NIRC), as amended, these Regulations are hereby promulgated to implement the provisions of
Section 6(G) of the NIRC authorizing the Commissioner of Internal Revenue to accredit and register
tax agents with respect to their tax practice and representations before the BIR and to further amend
portions of Revenue Regulations Nos. 11-2006 and 4-2010.
Section 1. Objectives. - These Regulations are hereby issued to amend policies on the composition
of the Revenue National Accreditation Board (RNAB) and the Revenue Regional Accreditation Board
(RRAB); on the approval process from the action or decision of the RRAB or RNAB; on the
requirements of continuing professional education (CPE) in taxation; on accreditation procedures;
and, on the procedures and documentary requirements for renewal of accreditation.
The BIR is the tax authority primarily tasked to fully inform the public on the latest and
current issuances by conducting tax updates, briefings and seminars nationwide. The private sector
likewise assists in providing the opportunity for the continuing education of tax practitioners and
agents, subject to the appreciation of the Accreditation Board.
Section 2. Definitions of Terms - Paragraph c and d of Section 2 of RR No. 11-2006, as amended

by RR No. 4-2010 is hereby amended to read as follows:
"SECTION 2. Definition of Terms -
xxx xxx xxx
(c) Revenue National Accreditation Board (RNAB) - As first constituted under Revenue
Regulations (RR) No. 15-99, RNAB refers to the body in the BIR National Office
constituted to accredit tax practitioners/agents who are regularly engaged in making
representation for or on behalf of a client/s before any BIR Office. It is composed of a
Deputy Commissioner from either the Operations Group or Legal and Inspection Group
chosen by the Commissioner of Internal Revenue (CIR) as Chairman, one (1)
representative from the private sector to be chosen by the CIR from the nominees
submitted by the Philippine Chamber of Commerce and Industry (PCCI), or by the
Philippine Institute of Certified Public Accountants (PICPA), or by the Tax Management
Association of the Philippines (TMAP); and three (3) senior internal revenue officials in
the National Office with a rank of at least Assistant Commissioner, coming from the
aforementioned Group, to be designated by the Commissioner.
xxx xxx xxx
(d) Revenue Regional Accreditation Board (RRAB) - Also constituted under RR No. 15-99,
the RRAB is the body in the BIR Regional Office constituted to accredit tax
practitioners/agents who are regularly engaged in making representation for or on behalf
of a client/s before any BIR Office. It is composed of the BIR Assistant Regional Director
as Chairman, one (1) representative from the private sector to be chosen by the CIR from
1
the nominees of the local PICPA chapter, and three (3) senior internal revenue officials in
the Regional Office with a rank of Division Chief to be designated by the Commissioner.
In absence of the Assistant Regional Director, the Regional Director shall act as
chairman.
xxx xxx xxx"
Section 3. The Accreditation Boards - Section 3 of RR No. 11-2006, as amended by RR No. 4-

"Section 3. The Accreditation Boards
A. Powers and Functions. - It shall be the duty of the Accreditation Boards to act upon all
applications to practice before the Bureau of Internal Revenue, to institute and provide for the
conduct of accreditation, suspension or dis-accreditation proceedings and to perform such
other duties as are necessary or appropriate to carry out their functions as prescribed by the
Secretary of Finance. Provided, that any action or decision of the RRAB and RNAB shall be
appealable to the Commissioner. Any adverse decision by the Commissioner may be
appealed to the Secretary of Finance, who shall rule on the appeal within sixty (60) days from
receipt of such appeal. Failure of the Secretary of Finance to rule on the appeal within the
prescribed period shall be deemed an affirmation of the decision of the Commissioner
denying the accreditation.
B. Jurisdiction- xxx xxx xxx

C. Term of Office of the Chairmen and Members of the RNAB and RRAB - xxx xxx"
Section 4. Minimum Qualification of Applicants - Section 4 of RR 11-2006, as amended by RR

No. 4-2010 is hereby amended to read as follows:
"Section 4. Minimum Qualifications of Applicants - xxx xxx
A. For Individual Tax Agents (other than a member of the Philippine Bar)
1. He must be a Certified Public Accountant (CPA) of good standing with current

professional license from the Professional Regulations Commission (PRC)
xxx xxx xxx

xxx xxx xxx
6. He must have completed at least six (6) hours per year or a total of eighteen (18) hours
for the three years of continuing professional education (CPE) in taxation from
trainings/seminars conducted by the BIR (e.g. Revenue Regions, Revenue District
Offices, etc.) or from private institutions (e.g. tax/auditing firms, educational or training
institutions, professional organizations, etc.) where the number of training hours earned
are printed on the certificates and obtained not more than a year prior to the
application/renewal for accreditation."
Section 5. Accreditation Procedures - Section 5 of RR No. 11-2006, as amended by RR No. 4-

"Section 5. Accreditation Procedures -
A. Where to File - xxx xxx xxx
B. Documentary Requirements - Applicants shall submit, together with their duly

2
a. Certificate of Registration with the Board of Accountancy (BOA) and current

license with the Professional Regulations Commission, if a CPA, or Attorney's Roll
Number and Mandatory Continuing Legal Education (MCLE) Compliance
Number, if a Lawyer;
b. Certificate of Membership in Good Standing with his/her/its PICPA Chapter or

ACCPA (for CPAs) or Integrated Bar of the Philippines (for lawyers);
c. Certificate of Good Moral Character issued by two (2) disinterested persons, who
are either member of the BAR or CPA in good standing;
d. If not a Certified Public Accountant:
d.1 Certified copy of transcript of records from the university or college showing
compliance with at least eighteen (18) units in accounting or taxation as
prescribed in Section 4(A)(2).
d.2 Written certification of continuing professional education (CPE) units of at
least six (6) hours per year or a total of eighteen (18) hours for the three
years in taxation conducted by the BIR (e.g. Revenue Regions, Revenue
District Offices, etc.) or from private institutions (e.g. tax/auditing firms,
educational or training institutions, professional organizations, etc.), where
the number of training hours earned are printed on the certificates and
obtained not more than a year prior to the application/renewal for
accreditation.
e. A written undertaking under oath to preserve working papers within the period
prescribed under Section 235 of the NIRC of 1997, as amended, and making
them available to the Bureau's authorized representative/s when required or
directed to do so.
C. Processing Fee- xxx xxx xxx
D. Additional Requirements- xxx xxx xxx

E. Submission of Annual Information - xxx xxx xxx
xxx xxx xxx"
Section 6. Effects of Accreditation - Section 9 of RR No. 11-2006 is hereby amended to read as

follows:
"Section 9. Effects of Accreditation - Only those Tax Agents/ Practitioners, Partners or
Officers of General Professional Partnerships, or Officers or Directors of Corporate entities engaged
in tax practice who have been issued certificate of Accreditation or ID card shall be allowed to
represent a taxpayer or transact business with the Bureau of Internal revenue in representation of a
taxpayer for the purposed(s) defined in these regulations. The Commissioner or his authorized
representative shall only consider as valid document/attachments to tax returns, information returns
or other statements or reports required by the Code or Regulations, the financial statements
prepared, signed and certified by duly accredited tax practitioners. The BIR can refuse to transact
official business with tax practitioners who are not accredited before it and shall require that certain
official statements such as returns, financial statements, reports, protests, requests for ruling, official
correspondence and other statements, paper or documents filed on behalf of a taxpayer be signed or
certified to by accredited persons which shall bear the following information below the signature of the
latter.
3
A. For individual's (CPA's, members of GPPs, and others)
a.1 Tax Identification Number (TIN); and
a.2 BIR Accreditation Number, Date of Issue, and Date of Expiry
B. For members of the Philippine Bar (Lawyers)

b.1 Tax identification Number (TIN);
b.2 Attorney's Roll Number;
b.3 Mandatory Continuing Legal Education (MCLE) Compliance Number; and
b.4 BIR Accreditation Number, Date of Issue, and Date of Expiry
xxx xxx xxx"
Section 7. Renewal of Accreditation- Section 10 of RR No. 10-206 is hereby amended to read as

follows:
"Section 10. Renewal of Accreditation - Within sixty (60) days prior to the expiration of the
accreditation, Tax Agents/Practitioners as defined under Section 2(e) hereof may apply for renewal of
their accreditation.
In addition to the requirements provided under Section 4, submit the certified true copies of
the following documents:
A. PRC ID for CPAs /Integrated bar of the Philippines (IBP) ID for lawyers;
B. Current Certificate of Registration with the Board of Accountancy (BOA)/ IBP;
C. Current Professional Tax Receipt (PTR) for individuals or Business Permit/Municipal License
for non-individuals issued by the local government where registered;
D. Certificate of Membership in Good Standing with his/her/its PICPA Chapter or ACCPA (for
CPAs) or Integrated Bar of the Philippines (for lawyers);
E. Certificate of Training at least six (6) hours per year or a total of eighteen (18) hours for the
three (3) years of continuing professional education (CPE) in taxation from trainings/seminars
conducted by the BIR (e.g. Revenue Regions, RDOs, etc.) or from private institutions (e.g.
tax/auditing firms, educational or training institutions, professional organizations, etc.) where
the number of training hours earned are printed on the certificates and obtained not more
than a year prior to the renewal for accreditation;
F. Expired Certificate of Accreditation issued by the BIR;
G. Annual Registration Fee of P500 per year (current year and past three years);
H. Alphalist of Taxpayers Audited for the past three (3) years showing the Registered Name,
TIN, engagement period, Letter of Authority (LOA)/Tax Verification Number (TVN), if any;
I. Sworn Statement that the individual/partnership/firm has observed the conditions and
provisions prescribed on accreditation with affixed documentary stamp tax;
J. Income Tax Return (ITR) of the previous two (2) years.
The RNAB/RRAB shall make a random review of the financial statements audited by the
accredited external auditor and their compliance with the above. Non-compliance with any of the
provisions on accreditation shall be a ground for the revocation / cancellation of his/her/its
accreditation.
An external auditor whose accreditation has been cancelled may re-apply for accreditation
after two years. Provided, that no further re-accreditation shall be granted after two (2) cancellations.
In the re-application, the procedures and requirements for renewal shall be observed."
Section 8. Repealing Clause. All rules and regulation or any part thereof inconsistent with the
provisions of these Regulations are hereby amended or repealed accordingly. The Accreditation of
CPE providers and events are no longer required as embodied under RMO No. 39-2010, including
the cost of processing for the Confirmation Certificate of CPE Units Earned. Only the curriculum of
taxation events/seminars to be conducted will be submitted to the RNAB.
4
Section 9. Effectivity. The Regulations shall take effect fifteen (15) days after publication in the
official gazette or in a newspaper of general circulation.
(Original Signed)
CESAR V. PURISIMA
(Original Signed)
A
mag
rr accreditation
5
Quezon City
Date: February 18, 2013
REVENUE MEMORANDUM ORDER NO. 2-2013
SUBJECT : Prescribing the Policies, Guidelines and Procedures in Processing

Specific Requests for Information Pursuant to the Exchange of
Information Provision of Philippine Tax Treaties, in relation to
Republic Act No. 10021, as implemented by Revenue Regulations No.
10-2010.
I. BACKGROUND
In the last decade, the world has witnessed a growth in volume and complexity of
cross-border commercial and financial transactions. With the liberalization and
globalization of economies, however, innovative tax practices by taxpayers that have
access to international markets have also emerged alongside an increase in international
tax evasion. The harmful effects of some of these practices, e.g. abusive transfer pricing
and capital flight, have resulted in significant losses of tax revenues for governments. To
confront the challenges presented by globalization, many jurisdictions have emphasized
the need for more effective exchange of tax information between national tax authorities.
In response to this changing fiscal environment, the Philippine Government

enacted, on March 5, 2010, Republic Act (RA) No. 10021 otherwise known as the
Exchange of Information Act of 2010 which ensures that information held by our banks
and financial institutions can be made available to foreign tax authorities, upon request, in
accordance with the terms of our Double Taxation Agreements (DTAs) and Tax
Information Exchange Agreements (TIEAs) 1 hereafter referred to as Exchange of
Information or EOI arrangements. This development solidifies the Philippines
commitment to comply with internationally-agreed standards on tax transparency and
effective exchange of tax information. At the same time, it impacts the manner in which
the Bureau handles requests for information exchange pursuant to the relevant treaty
provisions.
To ensure that the exchange of information mechanism with our 37 tax treaty
partners remains effective in this new environment, the procedures on specific exchange of
information (or exchange of information on request),2 which were last amended in 1997,
1
The Philippines is planning to enter into negotiations for TIEAs but has not yet signed any such
agreements.
2
Refers to a situation where the competent authority of one country asks for particular information from
the competent authority of another contracting party.
1
are being updated - to reflect the foregoing changes in the global economy and the
Philippine legal system.
II. POLICY
It is the policy of the Bureau of Internal Revenue to cooperate with foreign tax
authorities in combating international tax evasion and other criminal tax offenses and to
address tax concerns that affect international trade and investment by fully utilizing the
mechanism of exchange of information. To this end, the Bureau shall adopt procedures on
specific exchange of information that: 1) Allow for effective information exchange with
other jurisdictions with which we have EOI arrangements; 2) Ensure the confidentiality of
information received under such arrangements; and 3) Safeguard the rights of taxpayers
and third parties.
III. OBJECTIVES
In order to carry-out this stated policy, this Order :
1. Identifies the scope of exchange of information on request, the subjects

covered and the limitations to exchange information;
2. Prescribes the standard procedures to be followed in handling a request
for information made to, or received from, a foreign tax authority
pursuant to an EOI arrangement; and
3. Prescribes the forms to be used in requesting information from foreign
tax authorities, banks and financial institutions and other holders of
taxpayer information, and the forms to be used in responding to
requests for information from foreign tax authorities pursuant to an EOI
arrangement.
IV. COMPETENT AUTHORITY
The competent authority acts as a contact point for the competent authorities of
treaty partners for EOI purposes.
Exchange of information can only take place between competent authorities or

their authorized representatives. This ensures that the rules applicable to exchange of
information (and in particular the confidentiality of information exchanged) are respected
and consistently applied. Bypassing the competent authorities constitutes a breach of tax
confidentiality which is expressly prohibited by Section 270 of the National Internal
Revenue Code (NIRC) and by the terms of our DTAs and TIEAs.
Our DTAs generally provide that the Secretary of Finance or his authorized
representative(s) are the competent authorities for the Philippines. The DTAs with
Bahrain, Bangladesh, Czech Republic, Sweden and United Arab Emirates provide that the
competent authority is the Secretary of Finance or the Commissioner of Internal
Revenue. The DTA with the United States indicates that the competent authority is the
Secretary of Finance or his delegate.
2
Section 4 of Revenue Regulations 10-2010 expressly designates the Commissioner
of Internal Revenue (Commissioner) as the Philippine competent authority for EOI
purposes.
V. SCOPE AND COVERAGE OF EXCHANGE OF INFORMATION
Exchange of information covers any information that is necessary or foreseeably

relevant to the administration or enforcement of the domestic laws of the contracting
parties concerning income taxes and other taxes covered by the terms of our EOI
arrangements. It includes information for cases that involve tax evasion and other criminal
tax offenses but is not limited to such cases.
A request for information can include any or all of the following items but not
limited to:
1. The fiscal residence of an individual or a company;

2. The tax status of a legal entity;
3. The nature of income in the source country;
4. The income and expenses shown on a tax return;
5. Business records (for instance to determine the amount of commissions paid to a
company of another State);
6. Formation documents of an entity and documents about subsequent changes of
shareholders/partners;
7. Name and address of the entity at the time of formation and all subsequent name
and address changes;
8. Number of entities residing at the same address as the requested entity;
9. Names and addresses of the directors, managers, and other employees of a
company for the relevant years, evidence (contracts and bank statements) of their
remuneration, social security-payments and information about their occupation
with regard to any other entities;
10. Banking records;
11. Accounting records and financial statements;
12. Copies of invoices, commercial contracts, etc.; and
13. The price paid for goods in a transaction between independent companies in both
States.3
It must be stressed, however, that the scope of exchange of information is not

limited to taxpayer-specific information but also includes information related to tax
administration and compliance improvement, such as statistics, information about a
particular industry, tax evasion trends, administrative interpretations and practices,4 laws,
court decisions, official publications and other subjects.
Time periods during which tax situations may be examined vary from country to
country, and the beginning of the tax year does not always coincide with the calendar year.
Where there is a significant time lag between the time the information is supplied and the
year to which the information relates, a statute of limitations issue may arise. The question
3
Par. 26, Module 1, OECD Manual of Exchange of Information
4
Par. 27, Module 1, OECD Manual of Exchange of Information
3
of whether use of the information is time barred has to be determined by reference to the
statute of limitations rules of the country where the information is to be used.5
VI. LIMITATIONS TO EXCHANGE OF INFORMATION
The obligation to exchange information is mandatory and is not limited to

information contained in the tax files held by the Bureau. When a request is received from
a treaty partner, the Bureau will have to take action to obtain the information requested, if
it is not available on its files. It cannot rely solely on the information in its possession.
However, the Bureau is not bound to go beyond its own internal laws and administrative
practice in putting information at the disposal of the requesting state.
Thus, the Commissioner can order the obtention of information, and even summon,
examine and take the testimony of a person to acquire the information requested since
these acts are authorized under Section 5 of the National Internal Revenue Code (NIRC).
In addition, the Commissioner can inquire into bank deposit accounts pursuant to Section
6(F) of the NIRC, as amended by RA 10021. Moreover, the income tax return/s of specific
taxpayer/s subject of a request of a treaty partner may be open to inspection upon the order
of the President.
There are instances, however, where the obligation to exchange information is

lifted and a request for information can be declined, viz:
1. Information that the requesting party would not be able to obtain under similar
circumstances under its own laws or administrative practice;
2. Information relating to years not covered by DTAs or taxes not covered;
3. Disclosure of information requested would be contrary to public policy. Public
policy generally refers to the vital interests of a country, for instance where
information requested relates to a state secret, the disclosure of which would be
contrary to the vital interests of the requested State. A case of public policy
might also arise, for example, where a tax investigation in another country was
motivated by racial or political persecution.
4. Information relating to the administration or enforcement of a provision of the tax
laws which discriminates against a national of the requested party (i.e.,
Philippines) as compared with a national of the applicant party in the same
circumstances; and
5. Information subject to legal privilege; that is confidential communications between
attorneys or other admitted legal representatives in their role as such and their
clients to the extent that the communications are protected from disclosure under
domestic law.
5
Par. 30, supra
4
VII. PROCEDURES
A. Responding to a Request for Information
The international standard for processing requests for information is ninety (90)
days from receipt for a request by the tax authority. However, this period may be extended
where difficulties in obtaining and providing information are encountered. In order to
respond promptly to requests from tax treaty partners, the following procedures are hereby
adopted:
Receipt, Evaluation and Acknowledgment of Requests
1. All requests for information from foreign tax authorities received shall be coursed
through and processed by the International Tax Affairs Division (ITAD). Should a
request for information be received by another office, it should immediately be
transmitted to the Chief, ITAD.
2. Upon receipt, ITAD shall assign a reference number to the request for
identification of cases and refer it to the Exchange of Information (EOI) Section.
3. The EOI Section shall evaluate and verify the sufficiency of the request. Requests
for bank information shall be verified against the checklist of requirements
attached to this RMO as Template 1.
4. ITAD shall prepare the acknowledgment letter to the requesting tax authority to be
signed by the Commissioner or his/her duly authorized representative within seven
(7) days from receipt of the request. The standard format attached to this RMO as
Templates 2 and 3 may be used for acknowledging receipt of requests.
4.1. If a request is found to be sufficient, and the information cannot readily

be provided by ITAD, the Commissioner or his/her duly authorized
representative will send letters to the appropriate information holders (e.g.,
government or BIR offices, banks, or financial institutions) requesting the
relevant information. (Refer to Templates 4, 5 and 6).
4.2. If a request is considered to be insufficient, the requesting tax authority

will be asked in the acknowledgment letter to clarify the request or to furnish
additional documents or information as required to allow a response to be
made.
4.3. Where there is ground to refuse or decline a request, the requesting tax
authority will be informed in the acknowledgment letter of the grounds for
such refusal.
Gathering of Information by BIR Offices
5. If a request for taxpayer information is forwarded to another office within the

Bureau that office should act on the request within sixty (60) days from the date of
5
the request. The information request may already be at the disposal of the
requested BIR office or it may require information gathering measures.
6. If access to a taxpayers records is required to obtain the information requested by

the foreign tax authority, the concerned Revenue District Officer/Chief of the
Division shall issue an Access to Records/Request for Information (for Exchange
of Information Purposes- Template 7) to the taxpayer or entity concerned and
serve the same within seven (7) days from date of issuance. Revenue officers
should, as much as possible, secure records requested within thirty (30) days from
date of service to the taxpayers.
7. Once obtained, the information requested should immediately be forwarded to the

Chief, ITAD (Attention: EOI Section) using the Feedback Sheet attached as
Template 8 to this RMO.
8. The Feedback Sheet shall also be used if the action/information requested cannot
be provided by the Revenue District Officer/Chief of the Division at the end of the
60-day period.
A revenue official or employee shall under no circumstances communicate

directly to the requesting foreign tax authority (or a representative thereof) on matters
pertaining to the latters request for information without prior approval of the
Commissioner.
Issuance of Subpoena Duces Tecum to Officers of Banks and Financial Institutions
9. If a bank or financial institution is requested to provide information but does not

reply to a request for that information within the period specified in the request, or
provides incomplete information, the Commissioner or his/her duly authorized
representative, upon request of ITAD, shall issue a subpoena duces tecum (SDT)
against the said bank or financial institution pursuant to existing revenue issuances,
copy furnished the Bangko Sentral ng Pilipinas.
Should the officer, owner, agent, manager, director or officer-in-charge of such

bank or financial institution fail to comply with the subpoena duces tecum (SDT),
ITAD shall refer the case to the Prosecution Division for the filing of appropriate
criminal actions against such person (i.e., for violation of Sections 6 and Section
266 of the NIRC and RA 10021).
Sending of Information to the Requesting Tax Treaty Partner
10. Upon receipt of information from the appropriate offices, banks, or financial
institutions, ITAD shall prepare a transmittal of the information to the requesting
foreign tax authority to be signed by the Commissioner or his/her duly authorized
representative. (Template 9) Documents transmitted shall be stamped with a
note that the information contained therein is solely for the use of the requesting
foreign tax authority pursuant to an existing income tax treaty or agreement on tax
matters.
6
11. If the information requested cannot be obtained or exchanged within 90 days, the
Commissioner or his/her duly authorized representative shall inform the requesting
foreign tax authority of the obstacles encountered in obtaining the information and
the reasons for the failure to provide the information. (Refer to Template 10)
Notice to Taxpayer
12. With respect to request for information held by a bank or a financial institution
and requested by a foreign tax authority, the Commissioner or his/her duly
authorized representative shall, within sixty (60) days from receipt of all requested
information, send a notice to the taxpayer concerned (Template 11) that he/it is
or was subject of a request for information by the foreign tax authority.
This Bureau shall not be at default of this provision should it fail to inform the
taxpayer by reason that his or its address is not known to or is not supplied to the
Bureau, when he or it cannot be located in the address registered/given by him to
the Bureau, or that the notice was not sent to the current address of the taxpayer but
to that only known or supplied to the Bureau.
B. Making a Request for Information to a Tax Treaty Partner
The following shall be observed when making a request for information to our tax
treaty partners6:
1. All requests for information by different offices of this Bureau (e.g., Regional
Offices, Revenue District Offices [RDOs], Large Taxpayers Service, Large
Taxpayers District Offices [LTDOs], National Investigation Division) shall be
coordinated with ITAD.
A revenue official or employee shall, under no circumstances, communicate

directly to the requested foreign tax authority (or a representative thereof) on
matters pertaining to this Bureaus request for information without prior approval
of the Commissioner.
Form of Request
2. A request shall be contained in a Memorandum (Template 12) together with all

necessary documents. The request should be drafted in a simple and clear manner.
Any additional information that may facilitate the request (e.g., taxpayers date of
birth, middle or maiden name, foreign address), the type and required form of
document (e.g., if authentication is required) and timeline for the request should be
indicated.
3. The requesting office shall secure the approval of the supervising Regional
Director or Assistant Commissioner on the Memorandum.
6
See List of Tax Treaty Partners
7
4. The request, together with necessary documents, shall be forwarded to the
Assistant Commissioner (Legal Service), who will forward the same to Chief,
ITAD for evaluation.
ITAD shall prepare the acknowledgement letters to the concerned office of the
Bureau confirming receipt of request for information.
Sending of Request to Tax Treaty Partners
5. If the request meets all the requirements, ITAD shall prepare the request letter to
be signed by the Commissioner or his/her duly authorized representative addressed
to the competent authority of the requested foreign tax authority. (Template 13
with attachments).
Receipt and Transmittal of Information
6. Upon receipt of information from the requested foreign tax authority, ITAD shall
prepare and send a letter to the said tax authority to be signed by the Commissioner
or his/her duly authorized representative to acknowledge the information given.
(Template 14)
7. The Chief, ITAD shall also cause the transmittal of the information to the
requesting BIR office signed by the Commissioner or his/her duly authorized
representative. (Template 15)
VIII. CONFIDENTIALITY
All taxpayer information obtained pursuant to this Order are confidential and may
only be disclosed in accordance with Philippine law (e.g., Section 270 of the NIRC).
Confidentiality obligations are also imposed under our EOI arrangements which generally
follow the rules of the OECD Model Tax Convention or Model TIEA. Moreover, the
provisions cover not only information received in response to a request, but also
information contained in competent authority letters, including the letter requesting
information.
Generally, the Exchange of Information article in our DTAs provides that any
information received shall be treated by the Bureau as secret in the same manner as
information obtained under the domestic laws of the Philippines and shall be disclosed
only to persons or authorities (including courts and administrative bodies) concerned with
the assessment or collection of, the enforcement or prosecution in respect of, or the
determination of appeals in relation to taxes on income. Such persons or authorities shall
use the information only for such purposes, but they may disclose the information in
public court proceedings or in judicial decisions. However, some of the Philippines
DTAs, e.g., those with Canada and Singapore, have even more restrictive confidentiality
provisions. Accordingly, any disclosure of taxpayer information received under an EOI
arrangement, outside of the Bureau, must be in accordance with the terms of the relevant
EOI arrangement and shall only be allowed after sign-off by the Commissioner or his/her
duly authorized representative for this purpose.
8
IX. FINAL PROVISIONS
The gathering of information by this Bureau for a foreign tax authority pursuant to
the latters request does not constitute an actual investigation of this Bureau on the subject
taxpayer or taxpayers nor authorizes the Bureau to issue corresponding Letters of
Authority on the request, unless warranted.
However, information supplied by a bank or a financial institution to the Bureau

may be used by it in its own assessment, verification, audit, and enforcement of the
taxpayer whose account and his or its transactions are now made known to the Bureau.
Likewise, the Bureau shall not be precluded from carrying out subsequent investigations
on taxpayers whose transactions with foreign taxpayers were subject of examination by
foreign tax authorities.
X. REPEALING CLAUSE
All issuances or portions thereof not consistent with the provisions of this Order
are hereby repealed or amended accordingly.
XI. EFFECTIVITY
This Order takes effect immediately.
(Original Signed)
9
April 17, 2013
SUBJECT: Revised Guidelines and Procedures in the Issuance and

Enforcement of Subpoenas Duces Tecum and the Prosecution of
Cases for Non-Compliance Therewith
I. BACKGROUND
Section 5 of the National Internal Revenue Code of 1997 (NIRC), as

amended, vests the Commissioner of Internal Revenue with authority to obtain
information, summon and examine, as well as take testimony of persons in
ascertaining the correctness of any return or in determining the liability of any
person for any internal revenue tax, or in collecting any such liability, or simply in
evaluating tax compliance.
This Order is issued to further delineate and update the procedure for the
issuance and enforcement of Subpoenas Duces Tecum (SDTs) to ensure full
implementation of Sections 5, 14, 266 and related provisions of the NIRC, as
amended.
II. FORM
BIR Form No. 0713 shall be used in the SDTs to be issued. Every SDT to
be issued shall have a serial number in accordance with paragraph "III.3.9"
hereof. A sample copy of BIR Form No. 0713 is hereto attached as Annex "A".
III. GUIDELINES AND PROCEDURES
3.1 This Order shall cover the following persons/entities enumerated

under Section 5 of the NIRC, as amended, to wit:
a. Person liable for tax or required to file a return or any officer or

employee of such person, or any person having possession,
1
custody, or care of the books of accounts and other accounting
records containing entries relating to the business of the person
liable for tax;
b. Any person other than the person whose internal revenue tax
liability is subject to audit or investigation, or from any office or
officer of the national and local governments, government
agencies and instrumentalities, including the Bangko Sentral ng
Pilipinas and government-owned or controlled corporations
(GOCCs);
3.2 The Head of the Revenue District Office/Large Taxpayers Audit

Division/Large Taxpayers District Office/National Investigation
Division/Special Investigation Division concerned or any other
officer duly delegated by the Commissioner (e.g., Head of the Letter
Notice Task Force) shall make a written notice to any of the persons
enumerated above to provide information or the pertinent books of
accounts, accounting records and particular or specific documents.
The duplicate copy of this written notice, duly

acknowledged/received by the persons being served or their
authorized representatives shall form part of the docket of the case.
3.3 In case the information or records requested are not furnished

within the period prescribed in the written notice, or when the
information or records submitted are incomplete, the concerned
revenue officer conducting a verification or investigation (covered
by a Memorandum Order, Mission Order, Letter of Authority, Tax
Verification Notice or Letter Notice) shall request for the issuance
of SDT through a Memorandum Report, stating therein the relevant
facts, specifying the particular documents or records not made
available to him and the taxpayer liable or the third party/office
concerned.
3.4 The issuance of SDT shall be requested from the following:
a. Assistant Commissioner, Enforcement and Advocacy Service,

through the Prosecution Division for the National Office;
b. Assistant Commissioner, Large Taxpayers Service, through the

Prosecution Division for taxpayers under the jurisdiction of the
Large Taxpayers Service, including LTDOs;
2
c. Revenue Regional Directors, through the Legal Divisions for
the Regional Offices;
d. Any other officer duly delegated by the Commissioner.
The records of the case shall be attached to the

Memorandum Report.
3.5 The Prosecution Division at the National Office, the Legal Divisions
at the Regional Offices, or any other officer duly delegated by the
Commissioner, as the case may be, shall evaluate the request
within two (2) working days from receipt, and on the basis thereof,
undertake either of the following courses of action:
a. Return the case to its origin for further documentation or action;
b. Prepare the corresponding SDT in three copies for signature of

the Assistant Commissioner, Enforcement and Advocacy
Service; Assistant Commissioner, Large Taxpayers Service;
Revenue Regional Director; or any other officer duly delegated
by the Commissioner, as the case may be, the distribution of
which shall be as follows:
Original - to be served to the taxpayer

Duplicate - attached to the docket of the case
Triplicate - action lawyer file
3.6 In case the request for issuance of SDT is found to be meritorious,

the SDT shall be issued to the person liable for tax or required to
file a return, or should the information or records be in the
possession of a third party or office, then in that partys name,
requiring the concerned person to appear and submit before the
signatory of the SDT the mandated information/documents at an
appointed time, date and place.
The time to be indicated in the SDT shall be during regular

business hours or from eight oclock in the morning and five oclock
in the afternoon during the work week, excluding holidays. The
venue shall be in the BIR office of the signatory of the SDT.
a. In case of corporations, partnerships or associations, the SDT

shall be issued to the partner, president, general manager,
3
branch manager, treasurer, registered officer-in-charge,
employee/s or other persons responsible for the custody of the
books of accounts and other accounting records mandated to
be submitted or information mandated to be provided.
To ascertain the names of the incumbent of the aforesaid

positions, the concerned revenue officers may access, among
others, the latest General Information Sheet filed by the
corporation with the Securities and Exchange Commission.
b. If the concerned party is the national and local government,

government agencies and instrumentalities, including the
Bangko Sentral ng Pilipinas and government-owned or
controlled corporations (GOCCs), the SDT shall be issued to the
head of such office, agency, instrumentality, political subdivision
or GOCC. If the head shall comply through a representative, the
latter shall present the SDT, written authorization letter from the
head, and sufficient proof of identification.
3.7 The date of issuance of the SDT shall be the date when it was
officially signed.
3.8 The compliance date for the submission of books of accounts and
other accounting records shall be set on the fourteenth (14th) day
from date of issuance of the SDT.
3.9 The Prosecution Division at the National Office, the Legal Divisions
at the Regional Offices, or any other officer duly delegated by the
Commissioner, as the case may be, shall provide a corresponding
serial number for each SDT issued, to be placed on the upper right
portion of the SDT. The following format shall be used:
(Office Code - Year of Issuance - Series Number,

which shall begin from 01 for the first SDT, to be
followed by the corresponding digit in numerical order
for subsequent SDTs issued.)
The Office Codes prescribed under existing issuances shall be

followed.
3.10 The service of the SDT shall be effected by the revenue officers
assigned to investigate the case. However, such service may be
4
made by any other internal revenue officer authorized for the
purpose.
3.11 The Assistant Commissioner, Enforcement and Advocacy Service;

Assistant Commissioner, Large Taxpayers Service; Revenue
Regional Director; or any other office duly delegated by the
Commissioner, as the case may be, shall transmit the signed SDT
to the requesting office which shall effect its service in accordance
with the Rules provided hereunder.
3.12 The duly issued SDT shall be served within three (3) working days
from receipt by the concerned revenue officers.
3.13 The SDT shall be served through personal service by delivering

personally a copy of the SDT to the party at his registered or known
address or wherever he may be found. A known address shall
mean a place other than the registered address where business
activities of the party are conducted or his place of residence.
a. In case personal service is not practicable, the SDT shall be

served by substituted service or by mail.
b. Substituted service can be resorted to when the party is not

present at the registered or known address under the following
circumstances:
i. The SDT may be left at the partys registered address, with

his clerk or with a person having charge thereof.
ii. If the known address is a place where business activities of

the party are conducted, the SDT may be left with his clerk
or with a person having charge thereof.
iii. If the known address is the place of residence, substituted

service can be made by leaving the copy with a person of
legal age residing therein.
iv. If no person is found in the partys registered or known

address, the revenue officers concerned shall bring a
barangay official and two (2) disinterested witnesses to the
address so that they may personally observe and attest to
such absence. The SDT shall then be given to said barangay
official. Such facts shall be contained in the bottom portion
of the SDT, as well as the names, official position and
signatures of the witnesses.
5
v. Should the party be found at his registered or known address
or any other place but refuse to receive the SDT, the revenue
officers concerned shall bring a barangay official and two (2)
disinterested witnesses in the presence of the party so that
they may personally observe and attest to such act of
refusal. The SDT shall then be given to said barangay
official. Such facts shall be contained in the bottom portion
of the SDT, as well as the names, official position and
signatures of the witnesses.
vi. Disinterested witnesses refers to persons of legal age

other than employees of the Bureau of Internal Revenue.
c. Service by mail is done by sending a copy of the SDT by

registered mail to the registered or known address of the party
with instruction to the Postmaster to return the mail to the sender
after ten (10) days, if undelivered. A copy of the SDT may also
be sent through reputable professional courier service. If no
registry or reputable professional courier service is available in
the locality of the addressee, service may be done by ordinary
mail.
3.14 The server shall accomplish the bottom portion of the SDT. He shall
also make a written report under oath before a Notary Public or any
person authorized to administer oath under Section 14 of the NIRC,
as amended, setting forth the manner, place and date of service,
the name of the person/barangay official/professional courier
service company who received the same and such other relevant
information. The registry receipt issued by the post office or the
official receipt issued by the professional courier company
containing sufficiently identifiable details of the transaction shall
constitute sufficient proof of mailing and shall be attached to the
case docket.
3.15 The Head of the Office which issued the SDT shall maintain a record
of the date of personal service or service by mail, identifying therein
in adequate detail, the mode of service of the summons.
6
IV. ENFORCEMENT OF THE SDT
4.1 The concerned revenue officers are required to be present during

the appointed time, date and place set for the presentation of the
books of accounts and other accounting records in order to check
if the records presented are the complete records being required as
stated in the SDT. Non-compliance therewith shall subject violators
to administrative liability.
4.2 Upon verification by the concerned revenue officers that the records
presented are substantially complete, the documents presented
shall be consolidated with the records of the case and shall be
referred back to the appropriate office for continuation of the
investigation. The concerned revenue officer shall submit a written
report to the issuing office that the documents/records indicated in
the SDT have been submitted or that there was either no
submission or that the documents presented were so incomplete.
4.3 In case there is no submission or incomplete presentation of the

required books of accounts and other accounting records, the
action lawyer assigned to the case shall request the concerned
revenue officers for a conference. This shall be scheduled on the
fifth (5th) working day from the date set for compliance with the SDT.
The revenue officers shall work jointly with the action lawyer in
documenting/gathering evidence/s for the criminal prosecution of
the individual who disobeyed the SDT.
4.4 Payment of the administrative penalty shall not excuse the

taxpayer/person summoned from complying with the SDT.
V. INSTITUTION OF CRIMINAL ACTION FOR FAILURE TO OBEY SDT
5.1 Within seven (7) working days from conference mentioned in

Paragraph IV.4.3 above, the action lawyer shall prepare a Letter-
Complaint addressed to the Office of the Prosecutor,
recommending the criminal prosecution of the individual taxpayer
or third party; or the responsible officer/s or partner/s (in case the
taxpayer or third party is a corporation, partnership, association,
or office); who disobeyed the SDT for violation of Section 266
(Failure to Obey Summons) of the NIRC, as amended, together
with the Complaint-Affidavit and its supporting evidentiary
documents, properly marked. If the taxpayer concerned is a
corporation, an association or a general co-partnership, the
sanctions mandated under Section 256 (Penal Liabilities of
7
Corporations) of the NIRC, as amended, shall likewise be imposed
and invoked in the filing of a criminal case. The Letter-Complaint,
together with the Complaint-Affidavit and its attachments, shall then
be routed to the appropriate office/s for review and signature of the
concerned revenue official/s.
5.2 In the preparation of the Complaint-Affidavit, the revenue officers,

as the persons who have personal knowledge of the non-
compliance with the SDT shall be the complainants.
5.3 In the preparation of the Letter-Complaint to the Office of the

Prosecutor, the Regional Director for SDTs issued by the Revenue
Regions and the Deputy Commissioner for Legal and Inspection
Group for SDTs issued by the Enforcement and Advocacy Service
and the Large Taxpayers Service, shall be the signatories in
consonance with Revenue Delegated Authority Order No. 2-2007.
5.4 Upon return of the duly signed Letter-Complaint, together with the
Complaint- Affidavit and its attachments to the originating office, it
shall then be immediately filed with the Office of the Prosecutor that
has jurisdiction over the case.
VI. NON-WITHDRAWAL OF CASES
The person summoned shall be accorded full notice and opportunity to

comply with the SDT as detailed herein. Once the Complaint-Affidavit has been
filed for violation of Section 266 (Failure to Obey Summons) of the NIRC, as
amended, no prosecuting officer of the Bureau shall cause the withdrawal or
dismissal of the case, notwithstanding the subsequent submission of documents
indicated in the SDT.
VII. REPEALING CLAUSE
All issuances and/or portions thereof inconsistent with this Order are
hereby revoked, modified or amended accordingly.
VIII. EFFECTIVITY
This Order shall take effect immediately.
(Original Signed)
8
September 6, 1999
SUBJECT : Implementing the Provisions of the National Internal Revenue

Code of 1997 Governing the Rules on Assessment of National
Internal Revenue Taxes, Civil Penalties and Interest and the
Extra
judicial Settlement of a Taxpayer's Criminal Violation of the
Code
through Payment of a Suggested Compromise Penalty.
TO : All Internal Revenue Officers and Others Concerned.
SECTION 1. Scope. - Pursuant to the provisions of Section 244, in relation to

Section 245 of the National Internal Revenue Code of 1997, these Regulations are
hereby promulgated to implement the provisions of Sections 6, 7, 204. 228, 247, 248
and 249 on assessment of national internal revenue taxes, fees and charges and to
provide the rules governing the extra-judicial settlement of a taxpayer's criminal
violation of the said Code or any of its implementing Regulations through payment of
a suggested compromise penalty.
SECTION 2. General Principles.
2.1 The surcharge and/or interest herein prescribed shall apply to all taxes, fees
and charges imposed under the Code which shall be collected at the same time, in the
same manner, and as part of the tax.
2.2 In case the tax due from the taxpayer is paid on a partial or installment basis,
the interest on the deficiency tax or on the delinquency tax liability of the taxpayer
shall be imposed from due date of the tax until full payment thereof The interest shall
be computed based on the diminishing balance of the tax, inclusive of interests.
SECTION 3. Due process requirement in the issuance of a deficiency tax
assessment.
3.1 Mode of procedures in the issuance of a deficiency tax assessment:
12
3.1.1 Notice for informal conference. - The Revenue Officer who audited the
taxpayer's records shall, among others, state in his report whether or not the taxpayer
agrees with his findings that the taxpayer is liable for deficiency tax or taxes. If the
taxpayer is not amenable, based on the said Officer's submitted report of
investigation, the taxpayer shall be informed, in writing, by the Revenue District
Office or by the Special Investigation Division, as the case may be (in the case
Revenue Regional Offices) or by the Chief of Division concerned (in the case of the
BIR National Office) of the discrepancy or discrepancies in the taxpayer's payment of
his internal revenue taxes, for the purpose of "Informal Conference," in order to afford
the taxpayer with an opportunity to present his side of the case. If the taxpayer fails to
respond within fifteen (15) days from date of receipt of the notice for informal
conference, he shall be considered in default, in which case, the Revenue District
Officer or the Chief of the Special Investigation Division of the Revenue Regional
Office, or the Chief of Division in the National Office, as the case may be, shall
endorse the case with the least possible delay to the Assessment Division of the
Revenue Regional Office or to the Commissioner or his duly authorized representive,
as the case may be, for appropriate review and issuance of a deficiency tax
assessment, if warranted.
3.1.2 Preliminary Assessment Notice (PAN). - If after review and evaluation by
the Assessment Division or by the Commissioner or his duly authorized
representative, as the case may be, it is determined that there exists sufficient basis to
assess the taxpayer for any deficiency tax or taxes, the said Office shall issue to the
taxpayer, at least by registered mail, a Preliminary Assessment Notice (PAN) for the
proposed assessment, showing in detail, the facts and the law, rules and regulations.
or jurisprudence on which the proposed assessment is based (see illustration in
ANNEX A hereof). If the taxpayer fails to respond within fifteen (15) days from date
of receipt of the PAN, he shall be considered in default, in which case, a formal letter
of demand and assessment notice shall be caused to be issued by the said Office,
calling for payment of the taxpayer's deficiency tax liability, inclusive of the
applicable penalties.
3.1.3 Exceptions to Prior Notice of the Assessment. - The notice for informal
conference and the preliminary assessment notice shall not be required in any of the
following cases, in which case, issuance of the formal assessment notice for the
payment of the taxpayer's deficiency tax liability shall be sufficient:
(i) When the finding for any deficiency tax is the result of mathematical error in
the computation of the tax appearing on the face of the tax return filed by the
taxpayer; or
(ii) When a discrepancy has been determined between the tax withheld and the
12
amount actually remitted by the withholding agent; or
(iii) When a taxpayer who opted to claim a refund or tax credit of excess
creditable withholding tax for a taxable period was determined to have carried over
and automatically applied the same amount claimed against the estimated tax
liabilities for the taxable quarter or quarters of the succeeding taxable year; or
(iv) When the excise tax due on excisable articles has not been paid; or
(v) When an article locally purchased or imported by an exempt person, such as,
but not limited to. vehicles. capital equipment, machineries and spare parts, has been
sold, traded or transferred to non-exempt persons.
3.1.4 Formal Letter of Demand and Assessment Notice. - The formal letter of
demand and assessment notice shall be issued by the Commissioner or his duly
authorized representative. The letter of demand calling for payment of the taxpayer's
deficiency tax or taxes shall state the facts, the law, rules and regulations, or
jurisprudence on which the assessment is based, otherwise, the formal letter of
demand and assessment notice shag be void (see illustration in ANNEX B hereof).
The same shall be sent to the taxpayer only by registered mail or by personal delivery.
If sent by personal delivery, the taxpayer or his duly authorized representative shall
acknowledge receipt thereof in the duplicate copy of the letter of demand, showing
the following: (a) His name; (b) signature; (c) designation and authority to act for and
in behalf of the taxpayer, if acknowledged received by a person other than the
taxpayer himself; and (d) date of receipt thereof.
3.1.5 Disputed Assessment. - The taxpayer or his duly authorized representative
may protest administratively against the aforesaid formal letter of demand and
assessment notice within thirty (30) days from date of receipt thereof. If there are
several issues involved in the formal letter of demand and assessment notice but the
taxpayer only disputes or protests against the validity of some of the issues raised, the
taxpayer shall be required to pay the deficiency tax or taxes attributable to the
undisputed issues, in which case, a collection letter shall be issued to the taxpayer
calling for payment of the said deficiency tax, inclusive of the applicable surcharge
and/or interest. No action shall be taken on the taxpayer's disputed issues until the
taxpayer has paid the deficiency tax or taxes attributable to the said undisputed issues.
The prescriptive period for assessment or collection of the tax or taxes attributable to
the disputed issues shall be suspended.
The taxpayer shall state the facts, the applicable law, rules and regulations. or
jurisprudence on which his protest is based, otherwise, his protest shall be considered
void and without force and effect. If there are several issues involved in the disputed
assessment and the taxpayer fails to state the facts, the applicable law, rules and
regulations, or jurisprudence in support of his protest against some of the several
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issues on which the assessment is based, the same shall be considered undisputed
issue or issues, in which case, the taxpayer shall be required to pay the corresponding
deficiency tax or taxes attributable thereto.
The taxpayer shall submit the required documents in Support of his protest within
sixty (60) days from date of filing of his letter of protest, otherwise, the assessment
shall become final, executory and demandable. The phrase "submit the required
docurnents" includes submission or presentation of the pertinent documents for
scrutiny and evaluation by the Revenue Officer conducting the audit. The said
Revenue Officer shall state this fact in his report of investigation.
If the taxpayer fails to file a valid protest against the formal letter of demand and
assessment notice within dirty (30) days from date of receipt therof, the assessment
shall become final, executory and demandable.
If the protest is denied, in whole or in put, by the Commissioner, the taxpayer may
appeal to the Court of Tax Appeals within thirty (30) days from date of receipt of the
said decision, otherwise, the assessment shall become final, executory and
demandable.
In general, if the protest is denied, in whole. or in part, by the Commissioner or
his duly authorized representative, the taxpayer may appeal to the Court of Tax
Appeals within thirty (30) days from date of receipt of the said decision, otherwise,
the assessment shall become final, executory and demandable: Provided, however,
that if the taxpayer elevates his protest to the Commissioner within thirty (30) days
from date of receipt of the final decision of the Commissioner's duly authorized
representative, the latter's decision shall not be considered final, executory and
demandable, in which case, the protest shall be decided by the Commissioner.
If the Commissioner or his duly authorized representative fails to act on the
taxpayer's protest within one hundred eighty (180) days from date of submission, by
the taxpayer, of the required documents in support of his protest, the taxpayer may
appeal to the Court of Tax Appeals within thirty (30) days from the lapse of the said
180-day period, otherwise, the assessment shall become final, executory and
demandable.
3.1.6 Administrative Decision on a Disputed Assessment. - The decision of the
Commissioner or his duly authorized representative shall (a) state the facts, the
applicable law, rules and regulations, or jurisprudence on which such decision is
based, otherwise, the decision shall be void (see illustration in ANNEX C hereof), in
which case, the same shall not be considered a decision on a disputed assessment; and
(b) that the same is his final decision.
3.1.7 Constructive Service. - If the notice to the taxpayer herein required is served
12
by registered mail, and no response is received from the taxpayer within the
prescribed period from date of the posting thereof in the mail, the same shall be
considered actually or constructively received by the taxpayer. If the same is
personally served on the taxpayer or his duly authorized representative who, however,
refused to acknowledge receipt thereof, the same shall be constructively served on the
taxpayer. Constructive service thereof shall be considered effected by leaving the
same in the premises of the taxpayer and this fact of constructive service is attested to,
witnessed and signed by at least two (2) revenue officers other than the revenue
officer who constructively served the same. The revenue officer who constructively
served the same shall make a written report of this matter which shall form part of the
docket of this case (see illustration in ANNEX D hereof).
SECTION 4. Civil Penalties:
4.1 Twenty-Five Percent (25%) Surcharge. - There shall be imposed, in addition
to the basic tax required to be paid, a penalty equivalent to twenty-five percent (25%)
thereof, in any the following cases:
4.1.1 Failure to file any return and pay the tax due thereon as required under the
provisions of this Code or rules and regulations on the date prescribed; or
4.1.2 Unless otherwise authorized by the Commissioner, filing a return with an
internal revenue officer other than those with whom the return is required to be filed;
or
4.1.3 Failure to pay the deficiency tax within the time prescribed for its payment
in the notice of assessment; or
4.1.4 Failure to pay the full or part of the amount of tax shown on any return
required to be filed under the provisions of this Code or rules and regulations, or the
full amount of tax due for which no return is required to be filed, on or before the date
prescribed for its payment.
4.2 Fifty Percent (50%) Surcharge:
4.2.1 In case of willful neglect to file the return within the period prescribed by
the Code, or in case a false or fraudulent return is willfully made, the penalty to be
imposed shall be fifty percent (50%) of the tax or of the deficiency tax, in case any
payment has been made on the basis of such return before the discovery of the falsity
or fraud: Provided, That a substantial underdeclaration of taxable sales, receipts or
income, or a substantial overstatement of deductions, as determined by the
Commissioner or his duly authorized representative, shall constitute prima facie
evidence of a false or fraudulent return: Provided; further, That failure to report sales,
receipts or income in an amount exceeding thirty percent (30%) of that declared per
12
return, and a claim of deductions in an amount exceeding thirty percent (30%) of
actual deductions, shall render the taxpayer liable for substantial underdeclaration of
sales, receipts or income or for overstatement of deductions, as mentioned herein:
Provided, further, that the term "willful neglect to the the return within the period
prescribed by the Code" shall not apply in case the unpayer, without notice from the
Commissioner or his authorized representative, voluntarily files the said return, in
which case, only 25% surcharge shall be imposed for late filing and late payment of
the tax in lieu of the above 50% surcharge. Conversely, the 50% surcharge shall be
imposed in case the taxpayer files the return only after prior notice in writing from the
Commissioner or his duly authorized representative.
4.2.2 Section 6 (A) of the Code provides that any tax return filed by a taxpayer
"may be modified, changed or amended" by the taxpayer "within three (3) years from
date of such filing" provided, however, that "no notice for audit or investigation of
such return, statement or declaration has, in the meantime, been actually served upon
the taxpayer." Thus, if upon investigation, it is determined that the taxpayer's
originally filed tax return is false or fraudulent, such taxpayer shall remain liable to
the 50% civil penalty regardless that the taxpayer has filed his amended tax return, if
the said amended tax return, however, has been filed only after issuance of the Letter
of Authority for the investigation of the taxpayer's tax return or such amendment has
been made in the course of the said investigation.
SECTION 5. Mode of Procedures in Computing for the Tax and/or
Applicable Surcharge. - Shown hereunder are illustrative cases for the computation
and assessment of the tax, inclusive of surcharge (if applicable) and interest
5.1 Late filling and late payment of the tax. - Illustration: Income tax return for
the calendar year 1998 was due for filing on April 15, 1999 but the taxpayer
voluntarily filed his tax return, without notice from the BDR, only on June 30, 1999.
The tax due per return amounts to P100,000. In this case, the taxpayer shall be liable
for delinquency penalties consisting of 25% surcharge, plus 20% interest per annum,
computed from due date of the tax until date of payment, computed as follows:
Calendar Year 1998
Income tax due per return P100,000.00
Add: 25% surcharge for late filing and late
payment (P100,000.00 times 25%) P 25,000.00
20% int. p.a. from 4-15-99 to 6-30-99
(P100,000.00 times .0415524) P 4.155.24 P 29,155.24
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Total amount due (excluding suggested compromise for
late filing and late payment of the tax)
P129,155.24
Only one 25% surcharge shall be imposed for late filing of the return and late
payment of the tax.
5.2 The tax return is filed on time but filed through an Internal revenue officer
other than with whom the return is required to be filed. Illustration: The taxpayer's
1998 income tax return is required to be filed through the authorized agent bank under
the jurisdiction of RDO East Makati. But without prior authorization from the BIR,
the taxpayer filed his tax return and paid the tax through the authorized agent bank
under the jurisdiction of RDO Davao City. Tax due and paid per return is
P100,000.00.
Calendar Year 1998
Income tax due per return P100,000.00
Add: 25% surcharge P 25,000.00
Total amount due P125,000.00
Less: Amount paid P100,000.00
Amount still due P 25,000.00
5.3 Late filing and late payment due to taxpayer's willful neglect. Illustration:
The taxpayer did not file his income tax return for the calendar year 1997 which was
due for filing on April 15, 1998. He was notified by the BIR of his failure to file the
tax return, for which reason, he filed his tax roturn and paid the tax, only after the said
notice, on June 30, 1999. The tax due per return is P100,000.00.
Calendar Year 1997
Income tax due per return
P100,000.00
Add: 50% surcharge for willful neglect to
file the return and late payment of the tax
(P 100,000 times 50%) P50,000.00
20% int. p.a. fr. 4-15-98 to 6-30-99
12
(P100,000.00 times.2415524) P24,155,24 P
74,155.24
Total amount due (excluding suggested compromise
for late filing and late payment of the tax)
P174,155.24
5.4 Penalty or penalties for deficiency tax. - As a rule, no surcharge is imposed
on deficiency tax and on the basic tax. However, if the amount due inclusive of
penalties is not paid on or before the due date stated on the demand letter, the
corresponding surcharge shall be imposed.
Illustration No. 1: Taxpayer filed on time his income tax return for calendar year
1997 and paid P100,000.00 on April 15, 1998. Upon pre-audit of his return, it was
disclosed that he erroneously computed the tax due. The correct amount of tax due is
P 120,000.00. The taxpayer is assessed for deficiency income tax in a letter of
demand and assessment notice issued on June- 30, 1999.
Calendar Year 1997
Tax due per pro-audit P120,000.00
Less: Amount assessed and paid per tax return filed P100,000.00
Deficiency income tax P 20,000.00
Add. 20% int p.a. from 4-15-98 to 6-30-99
(P20,000.00 times .2415524) P 4,831.05
Amount still due P 24,831.05
Illustration No. 2: ABC CORPORATION filed its income tax return for calendar
year 1997 and paid on time its income tax shown thereunder, amounting to P 100,000.
Said taxpayer was investigates upon verification of its accounting records, it was
disclosed that its deduction, from grow income, of representation expenses in the
amount of P200,000.00 did not mad all the statutory requisites for deductibility. The
corporation was duly notified of the said discrepancy through a Preliminary
Assessment Notice. Based on the 35% income tax rate on corporations applicable in
the year 1997, the income tax due after investigation amounts to P170,000.00. After
deduction of income tax paid per return filed, the basic deficiency income tax
amounts to P70,000, excluding penalties. Failing to protest on time against the
preliminary assessment notice, a formal letter of demand and assessment notice was
issued on May 31, 1999, requiring payment of the assessment not later than June 30,
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1999.
Calendar Year 1997
Income tax due per investigation P170,000.00
Less: Income tax paid per return P100,000.00
Deficiency income tax P 70,000.00
Add: 20% int. p.a. fr. 4-15-98 to 6-30-99 (P70,000 times .2415524) P 16,908.67
Total amount still due P 86,908.67
Illustration No. 3: XYZ CORPORATION filed its income tax return for calendar
year 1997 with a net taxable income of P500,000.00. At the applicable income tax
rate of 35% for the year 1997, its income tax amounted to P175,000.00. However,
upon investigation, it was disclosed that its -income tax return was false or fraudulent
because it did not report a taxable income amounting to another P500,000.00. On its
net income of P1,000,000.00, per investigation, the income tax due is P350,000.00.
Deducting its payment per return filed, the deficiency, excluding penalties, amounted
to P175,000.00. It was duly informed of this finding through a Preliminary
Assessment Notice. Failing to protest on time against the preliminary assessment
notice, a formal letter of demand and assessment notice was issued on May 31, 1999
calling for payment of the deficiency income tax on or before June 30, 1999.
In this case, said corporation is liable for the civil penalties of 50% surcharge for
having filed a false or fraudulent return, plus 20% interest per annum on the
deficiency, computed as follows:
Calendar Year 1997
Income tax due per investigation P350,000.00
Less: Income tax paid per return P175,000.00
Deficiency income tax P175,000.00
Add: 50% surcharge for filing a fraudulent or false
return (P 175,000.00 times 50%) P 87,500.00
20% int. p.a. fr. 4-15-98 to 6-30-99
(P 175,000.00 times .2415524) P 42,271.67 P129,771.67
Total amount due P304,771.67
12
5.5 Late payment of a deficiency tax assessed. - In general, the deficiency tax
assessed shall be paid by the taxpayer within the time prescribed in the notice and
demand, otherwise, such taxpayer shall be liable for the civil penalties incident to late
payment.
Illustration: Based on the above Illustration No. 3, Scenario 4, that the calendar
year 1997 deficiency income tax assessment against XYZ CORPORATION, in the
amount of P30.4,771.67, is not paid by June 30,1999, the deadline for payment of the
assessment, and assuming further that this assessment has already become final and
collectible. In this case, such corporation shall be considered late in payment of the
said assessment. Assuming, further, that the corporation pays its tax assessment only
by July 31, 1999, the civil penalties for late payment shall be computed as follows:
Calendar Year 1997
Total deficiency income tax assessed on May 31, 1999
P304,771.67
Add: 25% surcharge for late payment
(P304,771.67 times 25%) P76,192.92
20% interest p.a. from 7-1-99 to
7-31-99(P304,771.67 times.0166667) P 5,079.54 P
81,272.46
Total amount due (excluding suggested compromise
penalty for late payment)
P386,044.13
5.6 Computation of 20% interest per annum in case of partial or installment
payment of a tax liability. - Illustration No. 1: In case extended payment of the tax
is duly authorized. - DEF CORPORATION, due to financial incapacity, requested
that it be allowed to pay its income tax liability per retrun for calendar year 1998, in
the amount of P1,000,000.00, in four (4) monthly installments, starting April 15,
1999. Its request has been duly approved pursuant to Sec. 53 of the Tax Code.
In this case, no 25% surcharge shall be imposed for late payment of the tax since
its deadline for payment has been duly extended. However, 20% interest per annum
for the extended payment shall be imposed, computed based on the diminishing
balance of the "unpaid amount", pursuant to the provisions of Section 249 (D) of the
Code.
12
No 25% surcharge on extended payment shall be imposed provided, however, that
the taxpayer's request for extension of the period within which to pay is made on or
before the deadline prescribed for payment of the tax due. Conversely, if such request
is made after the deadline prescribed for payment, the taxpayer shall already be
treated late in payment, in which case, the 25% surcharge shall be imposed, even if
payment of the delinquency be allowed in partial amortization.
Example:
Calendar Year 1998
Income tax due per return P1,000,000.00
Less: 1st installment of the tax on or before 4-15-99 P
250,000.00
Balance as of 4-15-99 P 750,000.00
Add: 20% int. p.a. from 4-15-99 to 5-15-99
P750,000.00 times .0166667) P 12,500.03
Amount due on 5-15-99 P 762,500.03
Less: 2nd installment on 5-15-99 (P250,000.00 plus
P12,500.03 interest) P 262,500.03
Balance as of 5-15-99 P 500,000.00
Add: 20% int. p.a. from 5-15-99 to 6-15-99
(P500,000.00 times .0166667) P 8,333.35
Amount due on 6- 15-99 P 508,333.35
Less: 3rd installment on 6-15-99 (P250,000.00 plus
P8,333.35 interest) P 258,333.35
Balance as of 6-15-99 P 250,000.00
Add: 20% int. p.a. from 6-15-99 to 7-15-99
(P250,000.00 times .0166667) P 4,166.68
4th and final installment on 7-15-99 P 254,166.68
Illustration No. 2: Computation of tax delinquency in case of partial payment
12
of the tax due without prior BIR authorization for extended payment.
Example: GHI CORPORATION did not file its final adjustment income tax
return for the calendar year 1998 which was due on April 15, 1999. The BIR informed
the corporation of its failure to file its said tax return and required that it file the same,
inclusive of the 25% surcharge and 20% interest per Annum penalties incident to the
said omission. On May 15, 1999 it advised that its income tax due for the said year
amounts to P1,000,000.00 but, however, due to its adverse financial condition at the
moment, it will be unable to pay the entire amount, inclusive of the delinquency
penalties. Hence, on May 15, 1999, it made a partial payment of P400,000.00.
Assuming that the BIR demanded payment of the unpaid balance of its tax obligation
payable by June 15, 1999, the unpaid balance of the corporation's delinquent income
tax shall be computed as follows:
Calendar Year 1998
Income tax due per return
P1,000,000.00
Add: 25% surcharge for late filing and late payment P250,000.00
20% interest per annum from 4-15-99
to 5-15-99 (P 1,000,000.00 times .0166667) P 16,666.70
P 266,666.70
Amount due as of 5-15-99 P
1,266,666.70
Less: Partial payment on 5-15-99
P 400,000.00
Balance as of 5-15-99
P 866,666.70
Add: 20% interest per annum from 5-15-99
to 6-15-99 (P866,666.70 times .0166667)
P 14,444.47
Amount still due (exclusive of the suggested compromise
penalty for late filing and late payment
P 811,111.17
If the said taxpayer falls to pay the amount of P811,111.17 by June 15, 1999, no
further 25% surcharge for late payment of the tax shall be imposed. Instead, only the
12
20% interest per annum shall be imposed against the taxpayer against the taxpayer,
computed from due date thereof (i.e., June 15, 1999) until paid. If said taxpayer pays
the same on partial payment basis, the 20% interest per annum shall be computed on
the diminishing balance thereof, pursuant to the procedures in the preceding
Illustration No. 1, Section 6.6 hereof
SECTION 6. Suggested Compromise Penalty in Extra-judicial Settlement of
a Taxpayer's Criminal Violation. - Section 204 of the Tax Code of 1997 provides
that "All criminal violations may he compromised except. (a) those already filed in
court, or (b) these involving fraud. " This means that, in general, the taxpayer's
criminal liability arising from his violation of the pertinent provision of the Code may
be settled extrajudicially instead of the BIR instituting against the taxpayer a criminal
action in Court. A compromise in extra-judicial settlement of the taxpayer's criminal
liability for his violation is consensual in character, hence, may not be imposed on the
taxpayer without his consent. Hence, the BIR may only suggest settlement of the
taxpayer's liability through a compromise.
The extra-judicial settlement of the taxpayer's criminal liability and the amount of
the suggested compromise penalty shall conform with the schedule of compromise
penalties provided under Revenue Memorandum Order No. 1-90 or as hereafter
revised.
SECTION 7. Repealing Clause. - Any revenue issuance which is inconsistent
herewith shall be considered repealed, amended, or modified accordingly.
SECTION 8. Effectivity:
8.1 General Rule. - In general, the provisions of these Regulations shall be
effective beginning January 1, 1998 pursuant to the provisions of Section 8 of R.A.
No. 8424, otherwise known as the National Internal Revenue Code of 1997.
8.2 Computation of Surcharge and Interest on Deficiency Tax Assessment. -
Any deficiency tax assessment issued beginning January 1, 1998 shall be governed by
the rules prescribed in these Regulations.
8.3 Other Provisions. - Any provision of these Regulations not otherwise
specifically provided in the National Internal Revenue Code of 1997 shall take effect
fifteen (15) days after publication in any newspaper of general circulation.
EDGARDO B. ESPIRITU
12
BEETHOVEN L. RUALO
ANNEX"A"
Preliminary Assessment Notice
ABC Corporation
123 Makati Avenue
Makati City
TIN. 000-000-000-000
Gentlemen:
Please be informed that after investigation there has been found due from you
deficiency income tax for calendar year 1997, as shown hereunder:
Assessment No.______
Taxable income per return
P1,000,000.00
Add: Discrepancies per investigation
1. Undeclared rental income P200,000.00
2. Non-deductible interest expenses 300,000.00
3. Undocumented representation expenses 150,000.00
4. Non-deductible bad debt expense 250,009.00
900.000.00
Taxable income per investigation P
1,900,000.00
Income tax due thereon (35%)
P665,000.00
Less: Income tax paid per return
350,000.00
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Balance
P315,000.00
Add: 50% surcharge for filing of fraudulent return P157,500.00
20% interest per annum from 4-15-96 to 3-15-98 63,000.00
220,500.00
TOTAL AMOUNT DUE P
535,500.00
*Please note that the interest and the total amount due will have to be adjusted if
paid beyond 3-15-98
The complete details covering the aforementioned discrepancies established
during the investigation of this case are shown in the accompanying ANNEX A- I of
this letter of demand.
The 50% surcharge has been imposed pursuant to the provisions of Section
248(B) of the National Internal Revenue Code, as amended by R.A. No. 8424, which
took effect on January 1, 1998, in view of your failure to report for income tax
purposes your aforementioned rental income. Such omission renders your income tax
return filed for the taxable calendar year 1997 as a false or fraudulent return.
The 20% interest per annum has been imposed pursuant to the provisions of
Section 249(B) of the said Code.
Pursuant to the provisions of Section 228 of the National Internal Revenue Code
of 1997 and its implementing Revenue Regulations, you are hereby given the
opportunity to present in writing your side of the case within fifteen (15) days from
receipt hereof. If we fail to hear from you within the said period, you shall be
considered in default, in which case, a formal letter of demand and assessment notice
shall be issued by this Office calling for payment of your aforesaid deficiency income
tax, inclusive of the aforementioned civil penalty and interest.
We hope that you will give this matter your preferential attention,
Very truly
yours,
ANNEX A-1
ABC CORPORATION
12
123 Makati Avenue
Makati City
TIN: 000-000-000-000
DETAILS OF DISCREPANCIES
Assessment No. __________
1. Undeclared rental income (P200,000.00). - Verification disclosed that you
derived this rental income from the 'lease of your building to XYZ CORPORATION
during the tax year 1997 but the same, without any legal justification, was neither
recorded in your books of accounts nor declared in your income tax return, thereby
resulting to the understatement of your reported taxable income for the said tax year.
2. Non-deductible interest expense (P300,000.00). - Verification disclosed that
this interest expense, claimed as deduction from your gross income for the tax year
1997, was actually incurred in connection with your loan from Mr. JUAN CASTRO.
It was, however, further disclosed that Mr. Castro owns and controls 60% of your
outstanding capital stock. Hence. this interest expense is not a valid deduction from
your gross income, pursuant to Section 34(B)(2), in relation to Section 36(B)(2) of the
National Internal Revenue Code which provides that no deduction shall be allowed in
respect of interest expense incurred between an individual and a corporation more
than fifty percent (50%) in value of the outstanding stock of which is owned, directly
or indirectly, by or for such individual.
3. Undocumented representation expenses (P50,000.00). - Verification disclosed
that this item of deduction from your gross income for the tax year 1997 is in fact
unsubstantiated with any documentary evidence, hence, disallowed in audit.
4. Non-deductible bad debt expense (P250,000.00). - Verification disclosed that
this item of deduction from your gross income for the tax year 1997 was, in fact, a
mere provision for estimated uncollectible accounts from your customers as of the
end of the said year. Under Section 34(E) of the said Code, a mere provision for
estimated uncollectible accounts is not allowable deduction from gross income. In
general; for bad debts to be deductible, the following statutory requisites must have
been complied with:
4.1 That, the debts due from your debtor or debtors must have been ascertained
actually worthless as of the end of the taxable year; and
4.2 That, the same have been actually charged or written-off in your books of
accounts as of the end of the said taxable year.
12
4.2 That, the said accounts receivable have actually been charged off or
written-off the books of accounts as of the end of the taxable year.
The records of this case disclosed that you have not introduced any evidence to
overthrow the validity of our said findings.
It is requested that your aforesaid deficiency income tax liability be paid
immediately upon receipt hereof, inclusive of penalties incident to delinquency. This
is our final decision. If you disagree, you may appeal this final decision with the Court
of Tax Appeals within thirty (30) days from date of receipt hereof, otherwise our said
deficiency income tax assessment shall become final, executory and demandable.
Very truly
yours,
ANNEX "B"
FORMAL LETTER OF DEMAND
ABC Corporation
123 Makati Avenue
Makati City
TIN: 000-000-000-000
Gentlemen:
Please be informed that after investigation there has been found due from you
deficiency income tax for calendar year 1997, as shown hereunder:
Assessment No._______
Taxable income per return
P1,000,000.00
Add: Discrepancies per investigation
1. Undeclared rental income P200,000.00
2. Non-deductible interest expenses 300,000.00
3. Undocumented representation expenses 150,000.00
4. Non-deductible bad debt expense 250,000.00
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900,000.00
Taxable income per investigation P
1,900,000.00
Income tax due thereon (35%) P
665,000.00
Less: Income tax paid per return
350,000.00
Balance
P315,000.00
Add: 50% surcharge for filing of fraudulent return P157,500.00
20% interest per annum from 4-15-96 to 3-15-98 63,000.00
220,500.00
TOTAL AMOUNT DUE
P535,500.00
*Please note that the interest and the total amount due will have to be adjusted if
paid beyond 3-15-98
The complete details covering the aforementioned discrepancies established
during the investigation of this case are shown in the accompanying SCHEDULE I of
this letter of demand,
The 50% surcharge has been imposed pursuant to the provisions of Section
248(B) of the National Internal Revenue Code, as amended by R.A. No. 8424, which
took effect on January 1, 1998, in view of your failure to report for income tax
purposes your aforementioned rental income. Such omission renders your income tax
return filed for the taxable calendar year 1997 as a false or fraudulent return.
The 20% interest per annum has been imposed pursuant to the provisions of
Section 249(B) of the said Code.
In view thereof, you are requested to pay your aforesaid deficiency income tax
liability through the duly authorized agent bank in which you are enrolled within the
time shown in the enclosed assessment notice.
Very truly
yours,
12
ANNEX"C"
ABC Corporation
123 Makati Avenue
Makati City
TIN: 000-000-000-000
FINAL DECISION ON DISPUTED ASSESSMENT
Gentlemen:
Referring to your letter dated May 15, 1999, please be informed that your
protest against our calendar year 1997 deficiency income tax assessment in the
amount of P535,500.00, the subject matter of our covering letter of demand dated
March 15, 1999, is hereby denied for lack of factual and legal basis. The aforesaid
assessment is premised on the following:
1. Undeclared rental income (P200,000.00). - Verification disclosed that you
derived income from the least of your building to XYZ Corporation during the year
1997 but this was not recorded in your books of accounts and also not reported in
your income tax return.
2. Non-deductible interest expense deduction (P300,000.00). - Verification
disclosed that this interest expenses was incurred in connection with your loan from
MR. JUAN CASTRO. It was also disclosed that Mr. Castro owns 60% of the
outstanding stock of ABC Corporation. Hence the said interest expense is
non-deductible in computing ABC Corporation's taxable income pursuant to Section
34(B)(2)(a), in relation to Section 36(B)(2) of the NIRC, that interest paid on a loan
transaction between an individual and a corporation more that fifty percent (50%) in
value of the outstanding stock of which is owned, directly or indirectly, by or for such
individual shall be deductible from gross income for income tax purposes.
3. Undocumented representation expenses (P150,000.00). - Verification disclosed
that the veracity of this item of deduction has not been established, hence, disallowed
as a deduction from gross income.
4. Non-deductible bad debt expense (P250,000.00). - Verification disclosed that
this was a mere provision for estimated collectible accounts as of the end of the year
1997. Under Section 34(E), NIRC, a mere provision for estimated uncollectible
accounts is not deductible from gross income. To be deductible, two requisites must
be met:
12
4.1 That, the debts due from your debtor/s (accounts receivable) have been
ascertained actually worthless as of the end of the taxable year; and
4.2 That, the said accounts receivable have actually been charged off or
written-off the books of accounts as of the end of the taxable year.
The records of this case disclosed that you have not introduced any evidence to
overthrow the validity of our said findings.
It is requested that your aforesaid deficiency income tax liability be paid
immediately upon receipt hereof, inclusive of penalties incident to delinquency. This
is our final decision. If you disagree, you may appeal this final decision with the Court
of Tax Appeals within thirty (30) days from date of receipt hereof, otherwise our said
deficiency income tax assessment shall become final, executory and demandable.
Very truly yours,
ANNEX D
CONSTRUCTIVE SERVICE OF NOTICE/S
MEMORANDUM FOR:
The Commissioner/Regional Director
Thru Channel
SUBJECT:
Name of Taxpayer: ______________________
Address: ______________________
T.I.N.: ______________________
Kind of Taxes: ______________________
Amount: ______________________
This is to report that I/We personally served on the subject taxpayer at the above
given address on ______________1999, the formal letter of demand and assessment
notice, dated _____________, 1999, calling for payment of his/its above stated tax
liability. However, the taxpayer refused to acknowledge receipt thereof. I/We also
tried to serve the same on ______________________________________the
taxpayer's duly authorized representative, but the latter likewise refused to
12
acknowledge receipt thereof.
Due to the foregoing, the said formal letter of demand and assessment notice were
constructively delivered by leaving the same conspicuously at the taxpayer's
residence/place of business at _______________________________
on_________________, 1999.
________________________
Revenue Officer
_________________________
____________________________
Name and Signature of Witness Name and signature of
Witness
_________________________
___________________________
Designation Designation
12
22 January 2009
REVENUE MEMORANDUM ORDER No. 5-2009
SUBJECT : Prescribing the Policies and Guidelines in the Issuance of Letters

of Authority by the Various Investigating Offices of the Bureau of
Internal Revenue
I. BACKGROUND
The power to authorize the examination of any taxpayer, and the assessment of the
correct amount of tax due, is vested in the Commissioner of Internal Revenue in accordance
with the provisions of Section 6 of the National Internal Revenue Code of 1997, as amended
(hereinafter referred to as the Tax Code), to wit:
SEC. 6. Power of the Commissioner to Make Assessments and

Prescribe Additional Requirements for Tax Administration and
Enforcement.
(A) Examination of Returns and Determination of Tax Due. After a

return has been filed as required under the provisions of this Code, the
Commissioner or his authorized representative may authorize the
examination of any taxpayer and the assessment of the correct amount of
tax: Provided, however, That failure to file a return shall not prevent the
Commissioner from authorizing the examination of any taxpayer.
While the Commissioner is allowed to delegate such power to his authorized

representative, such delegation has, in certain instances, given rise to the issuance of
duplicate or multiple Letters of Authority (LAs) by more than one (1) Investigating Office of
the Bureau of Internal Revenue (BIR) to the same taxpayer, for the same taxable period.
Such occurrences have therefore resulted in unwarranted confusion on the part of

the taxpayers, and the unproductive utilization of much-needed resources on the part of the
BIR. In this regard, and in order to forestall the undue increase of the taxpayers burden of
compliance in the course of a tax investigation, as well as enhance the effectiveness of the
BIRs audit and investigation efforts, it is imperative that the issuance of multiple LAs be
avoided, and that conflicts of jurisdiction between Investigating Offices be resolved in as
expeditious a manner as possible.
This Order is being issued, therefore, to prescribe the policies and guidelines to be
observed in determining the Investigating Office that shall have jurisdiction over the audit /
examination of taxpayers, and in the resolution of conflicts of jurisdiction in on-going tax
investigations.
II. POLICIES AND GUIDELINES
A. General Rules
1. It shall be the general rule that the Investigating Office

a) Where the taxpayer is registered; or
b) Which has specific jurisdiction over a taxpayer,
shall exercise primary jurisdiction over the conduct of an audit /
investigation into the tax liabilities of the taxpayer for a given taxable
period.
2. For purposes of this Order, the following Investigating Offices shall

exercise primary jurisdiction in the conduct of audits / investigations,
relative to Item A (1) of this Section:
For the Regional Offices:
The Revenue District Offices for taxpayers registered in the

various Revenue Districts
For the Large Taxpayers Service (LTS):
The Large Taxpayers (LT) Audit and Investigation Division I

(LTAID-I) for Regular Large Taxpayers
The LT Audit and Investigation Division II (LTAID-II) for

Excise Taxpayers
The LT District Office (LTDO) Makati
The LT District Office Cebu
B. Exceptions to the General Rule on Primary Jurisdiction
1. The exception to the general rule on primary jurisdiction shall pertain

directly to:
a) Cases where there is prima facie evidence of tax fraud; or,
b) Cases falling under the Run After Tax Evaders (RATE) Program.
2. In either instance, jurisdiction to conduct the appropriate audit /
investigation shall rest with:
The National Investigation Division (NID); or
The Regional Special Investigation Divisions (SIDs).
C. Determination of Prima Facie Evidence of Tax Fraud
1. In the event that, following the conduct of prescribed preliminary

investigation procedures, the NID / SID believes that prima facie
evidence of tax fraud exists, it shall submit the case, together with a
memorandum stating the justifications for the conduct of an audit /
investigation for tax fraud (and the documentary evidence to support
the allegation of fraud), through the Assistant Commissioner (ACIR),
Enforcement Service (ES), to the Deputy Commissioner (DCIR) of
the Legal and Inspection Group (LIG), for evaluation.
1.1. Upon promulgation of this Order, the National Office Tax

Fraud Committee reconstituted under Revenue Special Order
No. 5-2008 (dated January 8, 2008) shall be considered as
dissolved, and the determination of prima facie evidence of
fraud shall henceforth be undertaken by the DCIR-LIG.
2. If, upon careful evaluation of the merits of a case, the DCIR-LIG

should determine that prima facie evidence of fraud exists, he shall
submit the report of the NID / SID, bearing his signature
recommending approval of the same, to the Commissioner, for final
evaluation.
2.1. Each report must contain the following segment, where the
Commissioner may indicate his decision:
APPROVED / DISAPPROVED
(Signature Over Printed Name)

3. In the event that the Commissioner should approve the conduct of

an audit / investigation of a taxpayer by the NID / SID, the report
bearing the Commissioners signature of approval, together with its
supporting documents, shall be returned by the Office of the
Commissioner to the Office of the DCIR-LIG, for transmittal to the
Enforcement Service, for preparation of the appropriate LA and
notification of the concerned Investigating Office which has primary
jurisdiction over the taxpayer.
3.1. Upon receipt of the report that has been duly approved by
the Commissioner, the ACIR ES shall inform the Regional
Office having jurisdiction over the Investigating Office
concerned / ACIR Large Taxpayers Service, using the pro
forma notification provided in Annex A hereof, that:
The case shall be considered as a tax fraud case to be

investigated by the NID / SID; and
Any LA issued by the Investigating Office to the

concerned taxpayer for the same taxable period shall be
deemed automatically cancelled.
A copy of the report approved by the Commissioner shall be

attached to such notification.
3.2. In the event that the Investigating Office should determine

that an LA has been issued to the taxpayer for the same
taxable period, the same shall be considered as automatically
cancelled and invalid, and the Head of the Investigating
Office shall, upon receipt of the notification from the ACIR-
ES, immediately direct the Revenue Officers concerned to
cease all activities on the case.
3.2.1. In the event that no LA has yet been issued to the

taxpayer for the aforesaid taxable period, the Revenue
District Office (RDO) is hereby advised that it is
precluded from issuing an LA for the taxpayer,
covering the said taxable period.
3.3. Within five (5) days from its receipt of the notification from
the ACIR-ES, the Investigating Office shall also:
Inform the taxpayer of the change of jurisdiction in the

audit / investigation of the case, through the issuance of a
Notice of Change of Jurisdiction (Annex B);
Transmit the entire docket of the case to the NID / SID;
Furnish the Enforcement Service with a copy of the

Notice of Change of Jurisdiction that has been duly
received by the concerned taxpayer.
3.4. Upon receipt of the copy of the Notice of Change of

Jurisdiction that was received by the taxpayer, the ACIR-ES
shall prepare the appropriate LA mandating the audit /
investigation of the taxpayer by the NID / SID, for the
signature of the DCIR-LIG.
4. In the event that the Commissioner should not approve the conduct
of a tax fraud investigation by the NID / SID against a particular
taxpayer, the report, together with all supporting documents, shall be
returned to the Office of the DCIR-LIG, for transmittal of the
documentary evidence gathered by the NID / SID to the appropriate
Investigating Office, in accordance with the general rule on primary
jurisdiction stated in Item A(1) of this Section.
D. Resolution of Existing Conflicts of Jurisdiction
1. All issues concerning duplicate or multiple LAs issued to a single

taxpayer for a particular taxable period prior to the promulgation of
this Order shall be immediately elevated by the Offices that issued
the LAs to the Office of the Commissioner, for review and
evaluation.
1.1. Each case must be supported by a memorandum report

prepared by the concerned Investigating Office and by the
NID / SID, stating the justifications for the retention of
jurisdiction thereat.
2. Each memorandum report must contain the following segment,

where the Commissioner may indicate his decision in the case:
APPROVED / DISAPPROVED
(Signature Over Printed Name)

3. The decision of the Commissioner in a particular case shall be

conveyed to the concerned Offices by the Office of the
Commissioner, through the pro forma notification provided in Annex
C, and the Head of the Office that shall give up jurisdiction of a
particular audit / examination shall immediately direct the Revenue
Officers concerned to cease all activities on the case, and shall, within
five (5) days from its receipt of the notification of the decision of the
Commissioner:
Inform the taxpayer of the change of jurisdiction in the audit /

investigation, through the issuance of a Notice of Transfer of
Jurisdiction (Annex D); and
Transmit the entire docket of the case to the Office that shall
assume jurisdiction of the audit / investigation, for integration
with their records of the case.
4. In all instances, the decision of the Commissioner shall be final and

executory.
E. Crediting of Internal Revenue Collections

from Audits / Investigations
1. All internal revenue collections generated from tax fraud / RATE

investigations conducted by the NID / SIDs shall be credited to the
Revenue District Office / LT Division or District Office having
primary jurisdiction over the taxpayers concerned.
III. REPEALING CLAUSE
Any provision of any Order and / or pertinent revenue issuance(s) that is

inconsistent with this Order is hereby revoked, modified or amended accordingly.
IV. EFFECTIVITY
(Original Signed)
SIXTO S. ESQUIVIAS IV
A-
Quezon City
August 11, 2010
SUBJECT: Guidelines on the Issuance of Electronic Letters of Authority, Tax

Verification Notices, and Memoranda of Assignment
TO : All Internal Revenue Officers, Officials and Others Concerned
I. Background
Under RMO No. 62-2010, the manual issuance of Letters of Authority (LAs) for all
investigating offices under the Regional Offices, the Large Taxpayer Service (LTS), the
Enforcement Service (ES), and the various Task Forces and Special Teams authorized by
the Commissioner of Internal Revenue has been discontinued. This Order paved the way
for the issuance of electronic LAs (eLAs) through the Letter of Authority Monitoring
System (LAMS). In the said RMO, the issuance of Tax Verification Notices (TVNs) has
likewise been stopped, and instead, eLAs were supposed to be issued for cases to be
covered by TVNs under the 2010 Audit Program.
Revenue Memorandum Circular (RMC) No. 61-2010 has been issued suspending
temporarily the issuance of eLAs. Only the Commissioner was allowed to manually
issue and sign LAs. Likewise, the issuance of manual TVNs for One-Time Transaction
(ONETT) cases subject to estate tax, donors tax, and transfers of properties subject to
capital gains tax (CGT)/creditable withholding tax (CWT) and documentary stamp tax
(DST) related thereto was prescribed. RMC No. 56-2010, which disseminated the most
recent policies on the audit of all internal revenue for liabilities for the year 2009, was
revoked under RMC No. 61-2010. Further, RMO No. 64-2010 was issued to address
security features of the eLA forms.
II. Objectives
1. To supersede RMC No. 61-2010 and amend certain provisions of RMO No. 62-
2010, as amended by RMO No. 64-2010, specifically, on the issuance of eLAs,
TVNs, and Memoranda of Assignment (MOA);
2. To replace manual LAs (BIR Form No. 1965) and prescribe the use of eLAs (BIR
Form No. 1966) for audit/investigation purposes, including verification of claims
for tax credit/refund, taxpayers retiring from business and taxpayers undergoing
corporate reorganization, as prescribed under RMO No. 62-2010, as amended;
and
3. To provide guidelines on the issuance of TVNs and MOA, as well as the reporting
requirements for ONETT cases.
III. Policies and Guidelines
1. BIR Form No. 1966, which will be used in printing the eLA under the LAMS,
shall be requisitioned from the Accountable Forms Division (AFD) by the
following approving revenue officials:
Investigating Office Approving Official
Revenue District Office Regional Director

LTS Audit Divisions Assistant Commissioner-LTS
National Investigation Division
and Special Investigation Division Commissioner
2. Only the Commissioner has system access to override eLAs issued for purposes
of replacing regular eLAs into NID or SID eLAs for Run After Tax Evaders
(RATE) purposes. The Deputy Commissioner for Legal and Inspection Group
shall be given query access to the LAMS for purposes of determining if a regular
eLA has already been issued to a taxpayer intended to be covered by the RATE
program.
3. The AFD shall not issue BIR Form No. 1966 to the authorized revenue official
unless all unused manual LAs (BIR Form No. 1965) issued to his office,
including offices/divisions under his jurisdiction, are surrendered and accounted
for as mandated under RMO No. 62-2010, as amended, and RMC No. 61-2010.
4. Starting August 16, 2010, only eLAs printed on BIR Form No. 1966 shall be
issued by the Bureau for the audit/investigation of tax liabilities, except estate tax
cases.
5. TVNs shall be issued for estate tax cases, irrespective of the amount of gross
estate, until December 31, 2010.
6. All LAs, whether manual or electronic, issued from March 1, 2010 covering cases
for 2009 and other taxable years, as well as LAs issued by the Commissioner
pursuant to RMC No. 61-2010, shall be retrieved and replaced with the new eLA
form (BIR Form No. 1966).
7. All revenue officers ordered to conduct investigation/audit through manually

issued LAs prior to July 1, 2010 should continue the conduct of
audit/investigation, subject to the retrieval and replacement of LAs as mandated
under Item No. III 6 of this Order.
8. Manual serially-numbered MOA shall be issued for the following cases:

8.1 Reassignment for the continuation of the audit/investigation of a case to
another RO due to resignation/retirement/transfer of the original RO;
2
8.2 Assignment to the original RO of returned cases by the reviewing office and
reassignment to another RO of returned cases in case of
resignation/retirement/transfer of the original RO;
8.3 Reassignment to another RO due to referral of the case to another
investigating office (e.g., cases referred to SID by the RDO);
8.4 ONETT cases (Capital gains tax/creditable withholding tax and documentary
stamp tax involving transfers of real property or shares of stock and donors
tax); and
8.5 Protested cases/cases for reinvestigation.
9. TVNs/MOA/Referral Memos issued for the period March 1, 2010 up to the

present should all be retrieved and converted to the appropriate documents to be
issued under this Order (e.g. LAs issued for estate should be converted to TVN,
TVN issued for Donation or other ONETT transactions should be converted to
MOA). The replacement eLA/TVNs/MOA should bear the current date but
should refer to the investigation authority that preceded it, and have such
cancelled document as an attachment. Though currently dated, the replacement
eLA/TVN/MOA will thus be deemed as issued at the same date with the
preceding document and will not nullify the investigation or proceedings
conducted under the authority of the previously issued document.
10. The time frame to submit the report of the case shall likewise be from the date of
the previously issued authorizing document, if applicable. Report of
investigation/verification of cases pursuant to this order shall be submitted by the
Revenue Officer within the following prescribed numbers of calendar days:
Cases covered by eLAs

other than VAT claims
For refund/credit - 180 days
Estate tax cases covered by TVNs - 60 days
Cases covered by eLAs on VAT claims - 60 days from

submission of
complete documents
MOA on ONETT cases - 5 days from

submission of
complete
documents
MOA on protested cases/ - 60 days from

cases for reinvestigation submission of
complete documents
in cases of request for
reinvestigation;
3
60 days from date of
MOA in case of
request for
reconsideration
11. Taxpayers should not entertain audit/investigation using TVNs or MOAs for
taxable year 2009 unless for the specified cases in the preceding paragraphs.
12. The following policies and procedures in the verification, review of tax returns
and issuance of Certificate Authorizing Registration (CAR) prescribed under
RMO No. 15-2003 shall be observed for ONETT cases covered by TVNs and
MOA.
12.1 The Checklist of Documentary Requirements and ONETT Computation
Sheet prescribed in Annexes A to A 8 and Annexes B to B4, respectively,
under RMO No. 15-2003 shall be accomplished by the Revenue Officer (RO),
instead of the Revenue Officers Audit Report (BIR Form No. 0500 Series),
However, the RO shall follow reporting requirements under existing issuances
for the audit of other tax liabilities of the decedent.
12.2 The CARs for ONETT, including estate tax cases, shall be issued by the
Revenue District Officer after verification of the tax liabilities, prior to review
by the Assessment Division, notwithstanding the pending investigation of the
other internal revenue tax liabilities of the estate, if any. Nonetheless, audit of
other tax liabilities shall be pursued relentlessly by the concerned
investigating office. In addition, the CAR may be issued on the deed of sale
of property belonging to an estate where the correct amounts of both the estate
tax and the taxes on the sale (CGT/CWT and DST) have been paid, and a
CAR has already been issued for the transfer of the property of the estate,
even if no title has been issued yet to the heirs of the decedent.
12.3 The review of ONETT cases shall be conducted by the Assessment
Division in accordance with the policies set forth in Item Nos. II.26 and 27 of
RMO No. 15-2003.
IV. Repealing Clause
All revenue issuances or portions thereof, which are inconsistent herewith, are
hereby repealed accordingly.
V. Effectivity
(Original Signed)
4
11 June 2010
REVENUE MEMORANDUM ORDER No. 55-2010
SUBJECT: Revision in the Procedures on the Issuance of Letters of Authority
TO: All Internal Revenue Officers and Others Concerned
In observance of the decision of the Court of Tax Appeals in CTA Case No. 7093 (dated 22
February 2006), which upheld the provisions of Revenue Memorandum Circular No. 40-2003
relative to the treatment of the Letter Notice (LN) as a notice of audit or investigation in the
absence of evident error or clear abuse of discretion, and in order to expedite the processing of LN
cases, the issuance of Notices of Informal Conference may immediately commence, even without
the prior issuance of Letters of Authority (LA), as required in certain situations, as prescribed in the
existing Revenue Memorandum Orders (RMOs) on the LN System.
This Order amends the pertinent provisions of RMO No. 7-2010, all previous RMOs
concerning the Tax Reconciliation System (RMO No. 28-2007, as amended by RMO No. 4-2008); the
RELIEF / SLSP System (RMO No. 30-2003, as amended by RMO Nos. 42-2003, 24-2004, 32-2005, 32-
2007 and 36-2008); and the Third-Party Matching BOC Data Program (RMO No. 34-2004, as
amended by RMO Nos. 46-2004, 32-2005 and 32-2007), and all other relevant issuances.
(Original Signed)
JOEL L. TAN-TORRES
A-
July 3, 2003
REVENUE MEMORANDUM CIRCULAR NO. 40-2003
SUBJECT: Effect of the Issuance and Receipt of Letter Notice to the Taxpayers
Right to Amend its Tax Returns as Provided under Section 6 of the
National Internal Revenue Code
For the information and guidance of all internal revenue officers and others
concerned, please refer to the attached copy of the memorandum of Deputy
Commissioner Jose Mario C. Buag of the Legal and Inspection Group dated June 9,
2003 clarifying the following issue:
Whether or not the Letter Notice (LN) being served by the Bureau upon taxpayers
who were found to have under-declared their sales or purchases through the Third Party
Information Program can be considered a notice of audit or investigation which would in
effect disqualify the taxpayers concerned from amending any return which is the subject
of such audit or investigation.
The Deputy Commissioner for Legal and Inspection Group opines and I quote:
LN being served by the Bureau upon taxpayers who were found to have under-
declared their sales or purchases through the Third Party Information Program can be
considered a notice of audit or investigation which would in effect disqualify the
taxpayers concerned from amending any return which is the subject of such audit or
investigation.
Please be guided accordingly.
(Original Signed)
GUILLERMO L. PARAYNO, JR.
Commissioner

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REPUBLIC OF THE PHILIPPINES

Revenue Regulations No. 5-2012

To : All Internal Revenue Officers and Others Concerned

Section 4. Effectivity Clause. These Regulations shall take effect immediately.

November 26, 2008

REVENUE REGULATIONS NO. 14-2008

Subject: Amending Further Section 2.57.2(M) of Revenue Regulations No. 2-98,

To: All Internal Revenue Officers and Others Concerned

SECTION 1. SCOPE. - Pursuant to the provisions of Section 244 of the Tax

SEC. 2. AMENDMENT. - Section 2.57.2(M) of Revenue Regulations 2-98, as

Sec. 2.57. Withholding of Tax at Source.

Supplier of goods - - One percent (1%)

The term local/resident suppliers of goods pertains to a supplier from whom

A corporation shall not be considered a withholding agent for purposes of this

Any corporation shall remain a withholding agent for purposes of these

(a) closure/cessation of business/dissolution (for taxpayer with notice of

(b) merger/consolidation (for dissolved or absorbed corporation);

(c) any other form of business combination wherein by operation of law a

A government-owned or -controlled corporation previously classified as one of

The Commissioner of Internal Revenue may recommend to the Secretary of

SEC. 3. REPEALING CLAUSE. All existing rules and regulations or parts

REPUBLIC OF THE PHILIPPINES

October 11, 2002

REVENUE REGULATIONS NO. 16-2002

To : All Internal Revenue Officers, Authorized Agent Banks, and Others

SECTION 1. SCOPE Pursuant to Section 244 of the National Internal

SEC. 2. RECORDING OF BIR TAX PAYMENTS BY THE AABs

A) All internal revenue taxes collected through authorized agent banks

B) Head offices of AABs shall assign and maintain a separate general

1. Date of the transaction;

a) Over-the-counter cash payment refers to payment of tax liabilities to

b) Bank debit system refers to the system whereby a taxpayer, through a

c) Checks refers to a bill of exchange or Order Instrument drawn on a

In the issuance and accomplishment of checks for the payment of internal

ACCOUNT No. ACCOUNT NAME Check No. R/T No.

PAY TO THE LANDBANK BATASAN

PESOS ONE MILLION ONLY

ACCOUNT No. ACCOUNT NAME Check No. R/T No.

SEPT. 16, 2002

FAO BUREAU OF INTERNAL REVENUE P 1,000,000.00

PESOS ONE MILLION ONLY

1 Accommodation checks checks issued or drawn by a party

Second indorsement of checks which are payable to the Bureau of

TDMs are, however, not acceptable as payments for withholding taxes,

SEC. 5. ENROLLMENT OF TAXPAYERS WITH AUTHORIZED AGENT

SEC. 6. RESPONSIBILITY AND PRIVILEGE OF TAXPAYERS

SEC. 7. ADDITIONAL LIABILITIES/RESPONSIBILITIES OF AUTHO-

(a) Any diversion, non-remittance or under-remittance of the taxes

(b) The reports of AABs to be submitted to BTr/BIR (under Sec. 2) of

(c) The requirements prescribed in these regulations shall be included

SEC. 8. REPEALING CLAUSE All rules and regulations or portions

SEC. 9. EFFECTIVITY These regulations shall take effect fifteen days

REVENUE MEMORANDUM CIRCULAR NO. 22-2012

SUBJECT: Clarification on the implementation of Revenue Regulations No. 5 - 2012

TO : All Revenue Officials, Employees and Others Concerned

This Circular is issued to clarify the implementation and proper interpretation of

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

Date: October 06, 2010

REVENUE REGULATIONS NO. 10-2010

SUBJECT : Exchange of Information Regulations

TO : All Internal Revenue Officers and Others Concerned

A) Financial Institutions shall refer to both private and government financial

E) International Agreements or Agreement on Tax Matters shall only refer to Tax

SECTION 2. Authority of the Commissioner of Internal Revenue to Obtain Information