REVENUE MEMORANDUM CIRCULAR NO. 59-2019 issued on June 7, 2019 publishes the full text of Joint Administrative Order (JAO) No. 1-2019 between the Cooperative Development Authority (CDA) and BIR entitled “Rules and Regulations Implementing Section 3 of Republic Act (RA) No. 10963 (TRAIN Law), in relation to Section 5(b) of R.A. No. 8424 of the National Internal Revenue Code (NIRC), as amended”.
All registered cooperatives shall file their tax returns and pay their tax liabilities, if any, on or before the deadline as provided under the NIRC, as amended, using the BIR’s electronic system for filing and payment of taxes.
For purposes of availing Income Tax-based incentives, only electronically filed tax returns shall be considered except when manual filing is allowed in accordance with BIR revenue issuances, in which case, the return manually filed must be duly stamped by the BIR.
Notwithstanding the manual filing, the registered cooperatives are still required to file electronically within thirty (30) days reckoned from the time the electronic filing/payment system is operational/available. The BIR and the CDA shall render assistance to the registered cooperatives in the electronic filing of tax returns.
All registered cooperatives which were issued a Certificate of Tax Exemption (CTE) and availed of tax incentives shall submit to the CDA the Annual Tax Incentives Report. The report shall be duly signed by the Chairman and/or the General Manager of the concerned registered cooperative, and submitted to the CDA in accordance with the schedule stated in the Circular.
The roles of the CDA, BIR, and the Department of Finance (DOF) are specified under the “Incentives Monitoring Mechanism” provision of the JAO.
Failure to comply with the reportorial requirements by a registered cooperative shall have the following effects:
First Offense – CTE shall be deemed revoked and registered cooperative shall be prohibited to avail of tax exemption for a period of one (1) year from the date of
Second Offense – CTE shall be deemed revoked and registered cooperative shall be prohibited to avail of tax exemption for a period of three (3) years from the date of revocation.
Third Offense – CTE shall be deemed revoked and registered cooperative shall be prohibited to avail of tax exemption for a period of three (5) years from the date of
Fourth Offense – CTE shall be deemed revoked and cooperative shall be prohibited from re-application.
Registered cooperatives shall be liable for the payment of taxes immediately upon revocation of the CTE, inclusive of surcharge, interest and compromise penalty. Upon payment of taxes, registered cooperatives can re-apply for the issuance of CTE which shall be effective only upon the lapse of the period of prohibition to avail of the tax exemption.
Pursuant to Art. 140, 6(b) and (f) of RA No. 9520, providing information, reports or other documents to the CDA which the person knows to be false or misleading, and failure to comply with an order or written instruction issued or given by the CDA are punishable by imprisonment of not less than (1) year nor more than five (5) years or a fine of not more than Fifty Thousand Pesos (P50,000.00) or both at the discretion of the court.
Any government official or employee who fails, without justifiable reason, to provide or furnish the required tax incentives report or other data or information within the prescribed period as required under the Order shall be penalized, after due process, by a fine equivalent to the official’s or employee’s basic salary for a period of one (1) month to six (6) months or by suspension from government service for not more than (1) year, or both, in addition to any
criminal and administrative penalties imposable under existing laws. The CDA, BIR and DOF shall endeavor within a period of three (3) years to automate their systems with a view to generating data and reports electronically. Information campaign and dissemination programs and activities shall be undertaken by the CDA and the BIR. Under the transitory provisions, the CDA shall submit to the BIR a Registered Cooperative Master List covering taxable year 2018 within thirty (30) days after the approval of the JAO and a Consolidated Annual Tax Incentives Report covering taxable year 2018 on or before September 30, 2019. The BIR shall submit to the DOF the said Tax Incentives Report on or before December 15, 2019.