REVENUE MEMORANDUM CIRCULAR NO. 92-2018 issued on November 5, 2018 clarifies the filing of tax returns of accredited Microfinance Non-Government Organizations (MF-NGOs).
Accredited MF-NGOs whose operation is purely microfinance that refers only to the lending activities and insurance commission, which are bundled and forming an integral part of the qualified lending activities of the MF-NGOs, shall declare the two percent (2%) tax on its gross receipts from microfinance operations using the following:
| Source of Income | Type of Tax | Tax Rate | Forms | Frequency |
|---|---|---|---|---|
| Purely microfinance operations | Income Tax | 2% | 1702Q 1702MX |
Quarterly Annually |
| Business Tax | Not applicable. The 2% tax on its gross receipts from microfinance operations is in lieu of all national taxes. | |||
Accredited MF-NGOs with income from non-microfinance activities shall file the following:
| Source of Income | Type of Tax | Tax Rate | Taxable Base | Forms | Frequency |
|---|---|---|---|---|---|
| All non-microfinance activities or all other income not generated from microfinance operations | Income Tax | 30% or 2% MCIT whichever is higher | Taxable Income | 1702Q 1702MX |
Quarterly Annually |
| Business Tax | 3% | Gross sales or receipts | 2551Q | Quarterly | |
| 12% | Gross sales or receipts | 2550M/2550Q | Monthly/Quarterly |
Accredited MF-NGOs with income from purely microfinance operations shall use the Alphanumeric Tax Code (ATC)-IC210 in the manual filing of Income Tax returns. In case the accredited MF-NGOs is enrolled in Electronic Filing and Payment System (eFPS) or using eBIRForms facility in filing the required Income Tax returns, the ATC-IC011 shall be used pending enhancement of the Income Tax return forms in the eBIRForms/eFPS.
Moreover, accredited MF-NGOs shall register/update the applicable tax/form types above, or cancel, if applicable, the previously registered Percentage Tax type using BIR Form No. 1905 to the Revenue District Office where they are registered.
Accredited MF-NGOs who filed and paid the two percent (2%) preferential tax rate using BIR Form Nos. 2551M/2551Q for the first (1st) to third (3rd) quarters of 2018 shall file its quarterly Income Tax Return (BIR Form No. 1702Q) for the 3rd Quarter of 2018 by declaring the cumulative gross receipts for the 1st to 3rd Quarters of 2018. Such gross receipts shall be reflected under the “Special Rate” column and compute the total 2% tax due thereon. The amount paid using BIR Form Nos. 2551M/2551Q for the 1st to 3rd Quarters of 2018 shall be reflected under tax credits/payments in item no. 31G field of BIR Form No. 1702Q.
Accordingly, accredited MF-NGOs with income from non-microfinance activities shall declare the cumulative gross receipts from such activities for the 1st to 3rd quarters of 2018 in the “Regular Rate” column of BIR Form No. 1702Q and compute the applicable tax due thereon.