(NAR) VOL. 26 NO. 4/ OCTOBER - DECEMBER 2015
a. Register the business at the Revenue District Office (RDO) having jurisdiction over the principal place of business/head office (or residence in case of individuals), by accomplishing BIR Form 1901 (for individuals) or 1903 (for corporations or partnerships), and pay the registration fee to any Authorized Agent Bank (AAB) located within the RDO. A BIR Certificate of Registration shall be issued by the RDO, reflecting therein the tax types required of the concerned taxpayer for filing and payment, which shall be displayed conspicuously in the business establishment:
If the TNC, or any of its Partners, is already registered as engaged in business, either for goods and services, or practice of profession, it needs to file a registration update using BIR Form No. 1905. But if deriving income as an employee, there is a need to register using BIR Form 1901.
b. Secure the required Authority to Print (ATP) official receipts and register books of accounts for use in business, which may either be:Scenario One - Payment is Made to TNC and TNC pays its Partners.a. Manual books of accounts, booklets of receipts, accounting records or loose-leaf of such;The TNC shall register and obtain an ATP under the e-Invoicing System for the Official Receipts (ORs) issued to the passengers. Its Partners shall likewise follow in so far as the ORs they will issue to the TNC for the use or rental of the vehicle, if such is the case.
b. Computerized Accounting System (CAS) and/or its components including e-Invoicing System under Revenue Memorandum Order (RMO) No. 21-2000 as amended by RMO No. 29-02.
c. Issue registered official receipts, either manually or electronically, for every sale, barter, or exchange of service, Said official receipt shall conform to the information requirements prescribed under existing revenue issuances, and shall be prepared at least in duplicate, the original to be given to the passenger and the duplicate to be retained by the service provider as part of the latter’s accounting records;
The TNC shall issue an OR to the passenger/customer for the total amount of money received from the passenger/customer. If the TNC is a holder of a valid and current CPC, it shall issue a non-VAT OR to the passenger/customer. The TNC is liable for the 3% common carriers tax under Section 117 of the NIRC on its gross receipts. If the TNC is not a holder of a valid and current CPC, it shall issue a VAT OR to its passenger/customer and as a land transportation service contractors, shall be subject to the 12% VATScenario Two - Payment is Made to Partner and Partner pays TNC.
Upon receipt of payment by the Partner from the TNC, the Partner, to acknowledge receipt of the money payment from the TNC, shall issue an OR to the TNC for the amount received from the TNC. If the Partner is a holder of a valid and current CPC, it is a common carrier and it shall issue a non-VAT OR and shall be liable for the 3% common carrier tax under Section 117 of the NIRC on the gross amount received from the TNC. If the Partner is not a holder of a valid and current CPC, it is a land transportation service contractor, and should issue either a VAT OR, when it is a VAT-registered taxpayer or a non-VAT OR if it has not exceeded the threshold of P1,919,500.00 and has not opted for VAT registration.
The Partner shall issue an OR to the passenger/customer for the total amount of money received from the passenger/customer. If the Partner is a holder of a valid and current CPC, it shall issue a non-VAT OR to the passenger/customer. The Partner is liable for the 3% common carriers tax under Section 117 of the NIRC on its gross receipts. If the Partner is not a holder of a valid and current CPC, it is a land transportation service contractor, and should issue either a VAT OR, when it is a VAT- registered taxpayer or a non-VAT OR if it has not exceeded the threshold of P1,919,500.00 and has not opted for VAT registration.
Upon receipt of payment by the TNC from the Partner, the TNC to acknowledge receipt of the money payment from the Partner, shall issue an OR to the Partner for the amount received from the Partner. If the TNC is a holder of a valid and current CPC, it is a common carrier and it shall issue a non-VAT OR and shall be liable for the 3% common carrier tax under Section 117 of the NIRC on the gross amount received from the Partner. If the TNC is not a holder of a valid and current CPC, it is a service contractor, and should issue either a VAT OR, when it is a VAT- registered taxpayer, or a non-VAT OR if it has not exceeded the threshold of P1,919,500.00 and has not opted for VAT registration.
d. Withhold required creditable/expanded withholding tax, final tax, tax on compensation of employees, and other withholding taxes. Remit the same to the Bureau at the time or times required, and issue to the concerned payees the necessary Certificate of Tax Withheld. Payments made by TNCs to Partners, or payments made by Partners to TNCs, as the case maybe, are subject to creditable/expanded withholding tax;The existing tax laws and revenue issuances on the tax treatment of purchases (local or imported) and sale (local or international) of goods (tangible or intangible) or services shall be equally applied with no distinction on whether or not the marketing channel is the internet/digital media or the typical and customary physical medium.
e. File applicable tax returns on or before the due dates, pay correct internal revenue taxes, and submit information returns and other tax compliance reports such as the Summary List of Sales/Purchases (SLS/P) where applicable, Annual Alpha List of Payees, etc., at the time or times required by existing rules and regulations; and
f. Keep books of accounts and other business/accounting records within the time prescribed by law, and such shall be made available any time for inspection and verification by duly authorized Revenue Officer/s for the purpose of ascertaining compliance with tax rules and regulations.
a. The TNCs and Partners are reminded that payments made are not allowed as a deductible expense unless properly substantiated, evidenced by a valid OR, and for which withholding taxes have been properly withheld and remitted to the BIR.This Circular shall be given as wide a publicity as possible.
b. Credit card companies are reminded that payments made to TNCs and/or Partners should follow existing laws, rules and regulations including but not limited to the requirement of withholding taxes due thereon.
c. All payments received from a passenger/customer must be issued an OR
without need of demand for the issuance of the same.
d. Non-registration of a business, non-issuance of ORs and non-withholding of taxes among others are subject to both civil and criminal liabilities under the NIRC.