REVENUE MEMORANDUM CIRCULAR NO. 29-2023 issued on March 10, 2023 clarifies the effect of publication of the list of taxpayers determined as Cannot Be Located (CBL) pursuant to existing guidelines and procedures under Revenue Memorandum Circular No. 98-2010.
              The Circular reiterates that the purpose of the publication of CBL taxpayers is to give due notice to the concerned taxpayers and to the public as well, who may, in one way or another, have knowledge on the whereabouts of the published names of taxpayers or have transactions with them. Those with information on the CBL taxpayers’ whereabouts can report to the BIR while those with business transactions with them shall be given precaution in their future transactions as there are tax consequences provided in the said Circular which is for their disadvantage. These include non-deductibility of purchases made with the CBL taxpayers, whether the purchase is related to cost of sales or operating expenses, for purposes of Income Tax computation and if the transaction is with Value-Added Tax component, the same cannot be claimed as input tax, unless the buyer can prove the existence of the supplier tagged as CBL by the BIR and the authenticity of purchases made. These tax consequences, however, shall apply on transactions made after the publication of the name of the CBL taxpayer.
               In addition, the publication of the names of CBL taxpayers is not a pre-requisite to suspend the running of the prescriptive period to assess under Section 203 of the Tax Code, as amended. Once the handling Revenue Officer has submitted a report that the taxpayer is a CBL and such report is supported by the required documents under existing policies, the suspension of the said prescriptive period already sets in and is tagged in the system as suspended.