REVENUE MEMORANDUM CIRCULAR NO. 100-2017 issued on December 19, 2017 clarifies the sanctions for non-submission of Alphabetical List of Employees/Payees of income payments.

     In addition to the filing of remittance returns and payment of the taxes withheld, withholding agents are likewise required to submit to the BIR an Annual Information Return (BIR Form Nos. 1604E and 1604CE), together with the Alphabetical List of Employees/Payees. Such return is a no payment return, but contains, among others, information regarding the monthly remittance of taxes withheld and the summary of payees from whom taxes were withheld and already remitted to the BIR during the taxable year.

     With the filing of monthly remittance returns and payment of taxes withheld, the requirement for the deductibility of expenses which have been subjected to withholding tax were already complied. Thus, failure to file the Alphabetical List of Employees/Payees or failure to re-submit the complete and corrected alphabetical list after the validation process conducted by the BIR shall not result to the non-deductibility of the expenses considering that the taxes corresponding thereto were already withheld and remitted.

     A compromise penalty of One Thousand Pesos (P 1,000.00) shall be imposed for each failure to make, file or submit the said information return which aggregate amount to be imposed for such failures during the calendar year shall not exceed Twenty-Five Thousand Pesos (P 25,000.00), pursuant to Revenue Memorandum Order No. 7-2015. Payment of the compromises penalty shall, in no way, relieve the withholding agent from the submission of the required Alphabetical List or the complete or corrected Alphabetical List.