REVENUE REGULATIONS NO. 7-2012 issued on April 2, 2012 amends the consolidated Revenue Regulations on primary registration, updates and cancellation, particularly on the following: a. Registration, updates and cancellation procedures; b. Venue, Forms & Documentary Requirements; c. Annual Registration Fee; d. Certification Fee; and e. Penalties for registration-related violations. The venue, forms and documentary requirements for the registration of each type of applicant-taxpayer are listed in Annex “A” of the Regulations. Application for Taxpayer Identification Number (TIN) with incomplete documentary requirements shall not be processed. The TIN, once assigned to a particular taxpayer, is non-transferable and there shall be no instance where two or several taxpayers are holders of the same TIN. Only one TIN shall be assigned to the taxpayer, regardless of variety of transactions e.g. employee who is at the same time engaged in business. Once assigned with a TIN, a taxpayer is precluded from applying for another TIN, except for banks with both Regular Banking Unit and with Foreign Currency Deposit Unit where each unit is assigned with different TINs. Any person who shall secure more than one TIN shall be subject to the penalty prescribed under Section 15 of the Regulations. The estate of a deceased person or a trust under an irrevocable trust agreement shall be issued a TIN separate and distinct from the TIN of the deceased person and/or trustee. Minors who are earning and/or who are under the circumstances prescribed under Executive Order (EO) No. 98, series of 1998 shall be supplied with TIN. Non-Resident Aliens Not Engaged in Trade or Business (NRANETB) or Non-Resident Foreign Corporations (NRFC) shall be issued TINs for purposes of withholding taxes on their income from sources within the Philippines. The withholding agent shall apply for the TIN in behalf of the NRANETB or NRFC prior to or at the time of the filing of their monthly Withholding Tax Return as applicant under EO 98, Series of 1998. Branches of identified Large Taxpayer shall be registered at the Large Taxpayers Service (LTS) where the Head Office (HO) is registered. All incorporators of corporations/associations (stock and non-stock), partners of partnerships and members of cooperatives must have TINs. While the application and issuance of TIN is generally made through the concerned BIR district office, the same, upon certain circumstances provided for by existing rules and regulations, may be obtained either through the e-REG facility in the BIR website, or through the Security and Exchange Commission or through other facilities/agencies as may be made available in the future. Applicants whose TINs have been secured through the e-REG facility shall complete their registration with the BIR district office (e.g. persons to engage in business/practice of profession), but shall no longer be required to fill out the forms for “Application for Registration”. Instead, a printout of the “System Confirmation Page” and the filled out on-line “BIR Form 1901”, which is the proof of e-TIN registration, shall be submitted to the concerned BIR district office, together with the prescribed documentary requirements. In the case of corporations/partnerships (including GOCCs), which upon registration with the SEC has already been assigned with a TIN, the “Application for Registration” (BIR Form 1903) shall be completed and submitted to the BIR district office which has jurisdiction over its principal place of business. The articles of incorporation, together with the SEC Registration Certificate where the TIN is indicated, as well as proof of authority given to its representative must be submitted to the concerned BIR district office during the completion of registration of its business. The submission of a Mayor’s Permit prior to registration is mandatory. Provided, however, that if it is still in process with the concerned Local Government Unit (LGU), a duly stamped “Received” application for Mayor’s Permit will temporarily suffice to qualify him/ her/ it for registration, provided, further that a duly approved permit shall be submitted within 30 calendar days from date of registration. Failure to submit the same shall subject the taxpayer to Tax Compliance Verification Drive/ocular inspection to be conducted by the BIR district office. Consequently, if upon validation it can be determined that the business is non-existent and fails to file regularly the tax returns/declarations for his/her/its registered tax types, the BIR district office shall observe the procedures on tagging of the taxpayer’s status as “Inactive”. Business taxpayers and those required to issue receipts, shall submit the following requirements to complete their registration: a. Application for Authority to Print (ATP) Receipts/Invoices; b. Registration of Manual Books of Accounts; or c. Application for Permit to use Computerized Accounting System (CAS) or components thereof, if applicable; d. Application for Permit to use Loose Leaf Accounting Records, if applicable; e. Application for Permit to use Cash Register Machine (CRM)/Point of Sales (POS) Machines, and the like, if applicable; f. Permit to Operate for taxpayers engaged in activities/transactions involving products subject to excise taxes. As a general rule, it shall be mandatory for the BIR district office to process and issue simultaneously the Certificate of Registration (COR), ATP and register the books of accounts of business taxpayers immediately after registration and upon complete submission of the requirements within the period prescribed under the existing process provided by the BIR Citizen’s Charter. The BIR district office must ensure that taxpayers will be issued their registration certificates/permits (COR, ATP, Books of Accounts) upon commencement of their business. Issuance of TIN Card for the first time shall be free of charge subject to the provisions of Section 15 of the Regulations. The same must be processed and released to the applicant within the same day upon submission to the BIR district office of complete documentary requirements after the cut-off period of 1:00 p.m. TIN Cards shall be automatically issued to registered taxpayers except those TINs issued under EO 98, series of 1998/ONETT wherein issuance of the TIN card is optional and only upon request to the BIR district office where the taxpayer is registered. For eREG applicants who are employees or those registered under EO 98 whose TIN are generated by Employers/Authorized Users, the “System Confirmation Page” and filled out online BIR Form 1902/BIR Form 1904T shall be presented to the concerned BIR district office for the issuance of the TIN card. The concerned BIR district office shall only issue the TIN card upon submission of the documents prescribed in Annex “A” of the Regulations The cost of processing of the initial TIN Card shall not be charged and collected from the applicant. Subsequent requests for the issuance of TIN Card due to loss or damage shall be charged with a fee amounting to P100.00, subject to change upon evaluation and approval of the Commissioner of Internal Revenue (CIR), to cover cost of reprinting. Applications for TIN Card of registered taxpayers can be made at any computerized BIR district office regardless of registered address of applicant. Individuals engaged in business or practice of profession and juridical entities, unless otherwise exempted, shall: a. Pay Annual Registration Fee (ARF), if applicable; b. Secure COR; c. Proceed to Secondary Registration; d. Get “Ask for Receipt” notice, if applicable; and e. Attend the taxpayer’s initial briefing to be conducted by the BIR district office for new registrants in order to apprise them of their rights and duties/responsibilities. In lieu of the briefing, the BIR district office may distribute information materials on registration to its new applicants in CD format to be developed by the Taxpayer Assistance Service. Every person subject to any internal revenue tax to be filed/paid periodically shall complete its registration with the BIR as follows: a. For self-employed individuals, estates and trusts, corporations and their branches, if any – on or before the commencement of business b. For corporations (Taxable or Non-taxable)/ONETT – before payment of any tax due c. For partnerships, associations, cooperatives, Government Agencies and Instrumentalities (GAIs) – before or upon filing of any applicable tax return, statement or declaration as required by the Code, as amended d. For employees or individuals who are registering with the BIR for the first time by reason of employment – within 10 days from date of employment e. For individuals required to secure TIN for their transactions with government agencies (applications under EO 98, series of 1998) – they shall apply for their TIN from any BIR district office (thru the eREG System) at any time before they complete their transaction with the government agency The COR shall only be issued to individuals engaged in business or practice of profession and to juridical persons (whether taxable or exempt) by the BIR district office concerned (i.e., BIR district office of HO/Branch/Facility) upon compliance with the requirements for registration. Issuance of COR, whether upon registration or upon update of taxpayer’s information, is not subject to payment of Certification Fee unless the taxpayer requested for a certified copy of said COR, in which case, the same shall be subject to the payment of Certification Fee. Employees, ONETT taxpayers, and/or persons who have secured a TIN under EO 98, series of 1998 with the BIR shall not be issued a COR. On the other hand, each HO and/or branch shall be issued with a COR within the period/time prescribed under the existing “BIR Citizens Charter”. Persons issued with COR shall post or exhibit his/its original COR and duly validated ARF Return at his/its principal place of business and at each branch and/or facility in a way that is clearly and easily visible to the public. An ARF in the amount of P 500.00 for every HO and/or branch shall be paid upon registration and every year thereafter on or before January 31. However, the following shall be exempt from the imposition of ARF: a. Cooperatives duly registered with the Cooperative Development Authority; b. Individual residents earning purely compensation income c. OCWs/OFWs; d. Marginal Income Earners; e. GAIs, in the discharge of their governmental functions; f. LGUs, in the discharge of their governmental functions; g. Tax exempt corporations such as those enumerated under Section 30 of the Code, as amended, in pursuance of tax-exempt activities; h. Non-stock/non-profit organizations not engaged in business; i. Persons subject to tax under one-time transactions; j. Persons registered under EO 98, series of 1998; and k. Facility/ies where no sales transactions occur. Any profit-oriented activity pursued by GAIs, LGUs and/or tax-exempt entity, which partakes the nature of an activity similar to those undertaken by those engaged in business shall be treated as an activity in pursuance of a business for which the payment of ARF must be imposed. The ARF shall likewise be paid in cases where parts of the activities or undertakings conducted in a facility of the business involve sales transactions regardless of the frequency of the occurrence thereof. The ARF shall be paid, in full amount, to an Authorized Agent Bank (AAB) located within the BIR district office or to the Revenue Collection Officer (RCO) or duly authorized Treasurer of the City or Municipality where each place of business or branch is registered, or thru the BIRaccredited payment facilities such as Electronic Filing and Payment System (EFPS) and G-Cash. Payment of ARF shall be made thru EFPS for taxpayers mandated to use EFPS such as Large Taxpayer, Top 20,000 Corporations, Top 5,000 Individuals, etc. for their respective HO and Branches. Registration occurring during the interim period of the initial year shall be imposed with the same full amount of P 500.00 as ARF. When any individual who has paid the ARF dies, and the same business is continued by the person or persons interested in his estate, those continuing the business should register as a separate entity reflecting in said registration that it is pursuing the business enterprise as heirs of the estate of the decedent. Accordingly, the person or persons interested in the estate should, within 30 days from the death of the decedent, submit to the concerned BIR district office inventories of goods or stocks at the time of death of the registered individual upon registration and the ARF should be paid. This requirement shall also be applicable in the case of transfer of ownership or change of name of the business establishment. Every person, who is required to register with the BIR under Section 4 of the Regulations, shall register each type of internal revenue tax for which he/it is obligated to file a return or pay taxes due thereon. Such person shall update the BIR for any changes in his/its registration information. Generally, registration of tax types by a business entity consists of but not limited to the following internal revenue taxes/fees: a. Income tax; b. Value-Added Tax (VAT) and/or Percentage Tax; c. Withholding tax on compensation; d. Creditable Withholding Tax at source on certain income payments; e. Final Withholding Tax on certain income payments; f. Documentary Stamp Tax; g. Excise tax; and h. Annual Registration Fee. The nature of the business to which the taxpayer belongs shall be taken into consideration in determining the type of taxes that must be registered. In order to avoid the generation of invalid “stop-filer” cases in the BIR’s database, only those tax types, which the taxpayer is expected to regularly/periodically file the return and/or pay the tax shall be registered. In case a taxpayer fails to update his tax types prior to filing/payment of a tax return, the duly authorized BIR personnel must register the corresponding tax type for the Tax Return to be filed/paid except for VAT and/or Percentage Taxes, which must be applied for by the taxpayer. The BIR personnel initiating the update in behalf of the taxpayer must inform him of such update, in writing, to give due notice on his obligation to subsequently file the return on a regular basis on or before the prescribed deadline for filing. The registration of Income Tax as a tax type does not automatically carry with it the registration of VAT and/or Percentage Tax as a covered/registered tax type. For marginal income earners, the activities of such individuals are considered principally for subsistence or livelihood. Moreover, they are not required to pay any ARF although they are required to register as taxpayers for being potential Income and Withholding Tax filers. For purposes of registration, they will be registered for the tax type Income Tax and Form Type 1701. Notwithstanding their exemption from business taxes and ARF, they are liable to pay Income Taxes similar to any other individual engaged in business or practice of profession, after applying the allowable deductions against their Gross Income/Sales/Receipts and personal/additional exemptions granted under the Tax Code. For those enjoying Income Tax holidays, or exemption from other taxes for a limited time, as granted pursuant to special laws, the type of taxes the taxpayer is exempt from paying on the account thereof, the effectivity and expiry date shall be indicated. However, upon expiration thereof, it shall be the duty of the taxpayer to update his/its registration and/or the BIR district office must be duly informed in writing. The rules in determining the proper tax type of a taxpayer (i.e., whether VAT or other Percentage Taxes) are specified in the Regulations. In case a registered person transfers his registered address to a new location, it shall be his duty to inform the BIR district office where he is registered of such fact by filing the prescribed BIR Form specifying therein the complete address where he intends to transfer. The guidelines relative to transfer of registration of non-business individuals, local employees and taxpayers engaged in business or practice of profession (individual/non-individual) are specified in the Regulations. The new BIR district office of the transferred taxpayer shall issue the COR immediately after the transfer of the taxpayer’s registration by the old BIR district office. The COR, Sales Invoice/Official Receipt (SI/OR) used in the old business location can still be used in the new business location without penalty, until a new COR and ATP is issued by the new BIR district office; provided that the taxpayer can show a copy of duly received update form filed with the old BIR district office; provided further that the taxpayer shall stamp the new address on the old SI/OR when the same is to be issued in the new business address. In cases all the SI/OR are consumed prior to the online transfer of its records in the BIR’s ITS database, the taxpayer shall still apply with the old BIR district office for an ATP for the new sets of receipts/invoices. The filing of tax returns and payment of taxes to the new BIR district office shall commence following the issuance of the new COR. The new BIR district office shall be responsible for notifying the taxpayer concerned that the transfer of registration has already been completed. Any person registered in accordance with Section 4(2) of the Regulations shall, whenever applicable, update his registration information with the BIR district office where he is registered using BIR Form/s prescribed by the BIR. The instances when a taxpayer must update his registration information include (but are not limited to) the following: a. A change in the nature of the business from sale of taxable goods and/or services to being VAT-exempt; b. A person whose transactions are exempt from VAT but voluntarily registered under the VAT system, and after the lapse of 3 years after his registration applies for cancellation of his VAT registration. However, the optional registration as a VAT taxpayer of a franchise grantee of radio and/or television broadcasting whose gross receipts for the preceding year did not exceed P 10,000,000.00 shall be irrevocable; c. A VAT-registered person whose gross sales or receipts for 3 consecutive years did not exceed the amount of P 1,919,500.00; Provided, That every 3 years thereafter, the amount therein stated shall be adjusted to its present value using the Consumer Price Index, as published by the National Statistics Office (NSO); Provided further, that such adjustment shall be published through Revenue Regulations to be issued not later than March 31 of each year. Upon updating his registration, the taxpayer shall become liable to the Percentage Tax imposed under Section 116 of the Code, as amended. A short period return for the remaining period that he was VAT-registered shall be filed within 25 days from the date of cancellation of his VAT registration as a tax type and at the same time register for Percentage Tax as his new tax type; and d. Any other changes/updates in registration information previously supplied, including cancellation or change in any tax types. The cancellation of business registration of an individual shall not automatically cancel his TIN. The TIN shall remain active subject to subsequent updates on his registration. In this case, the BIR district office shall end date the particular registered form/tax type of such taxpayer in the ITS database upon complete submission of the requirements for cancellation of business registration. If subsequently, such taxpayer engages in a taxable activity (e.g. employment or establishment of a new business), the concerned BIR district office shall make the necessary updates on the registration records of such taxpayer corresponding to his new activity. In the case of juridical entities, the BIR district office shall prepare a monthly list of nonindividual taxpayers filing for cancellation of business registration for submission to the Assistant Commissioner – Information Systems Operations Service, through the Revenue Data Centers (RDC), for purposes of tagging said taxpayers as “Inactive”. Once tagged as “Inactive”, such taxpayer shall no longer be included in the roster of active taxpayers under the concerned BIR district office. In the case of TIN issued to an estate of a decedent under ONETT, upon full payment of the Estate Tax by the heirs, administrator or executor, the issued TIN of the estate shall be tagged as “Inactive”. The tagging of said taxpayer as inactive shall be coursed through the RDC of concerned BIR district office. However, in case of additional properties discovered after payment of the Estate Tax, the TIN previously issued for such estate shall be updated to “Active” status in order to facilitate the filing of the amended Estate Tax Return and shall be cancelled upon full settlement of the tax liabilities of the estate. Registered taxpayers who failed to file any tax return for 2 consecutive years or more shall be tagged as “Inactive” and an investigation shall be initiated. As such, upon classification as Inactive, all CRM/POS Permits issued to them as well as any unused Official Receipts/Invoices for which a valid ATP has been previously granted, shall be deemed cancelled/invalidated as of date of tagging. Provided that the Inactive self-employed individual is not likewise employed, non-filing of tax return shall qualify him for tagging as Inactive. Where such taxpayer is also registered as an employee, he or she will not be tagged as Inactive but any unused Official Receipts/Invoices, for which a valid ATP has been previously granted for his or her business, shall be deemed cancelled/invalidated upon “end-dating” of its registered business tax types. The cancellation of registration may either pertain to cancellation of business registration and/or the assigned TIN. Application for TIN/Registration cancellation shall take place upon: a. Death of individual; b. Full settlement of the tax liabilities of the estate; c. Discovery of a taxpayer having multiple TINs; and d. Dissolution, merger or consolidation of juridical person. Any request for certification that may be requested by a taxpayer from the BIR district office where he is registered on matters relating to his registration shall be charged with a fee in an amount not exceeding P 100.00, in addition to the Documentary Stamp Tax imposed under Section 188 of the Code, as amended, subject to change upon approval of the CIR thru a subsequent issuance. The Certification Fee shall be collected on each set of documents regardless of the number of pages of such document. The following violations related to primary registration shall be penalized as follows: a. Failure to register (those who are found unregistered during TCVD – subject to the penalties under prevailing revenue issuances b. Late Registration (those who are voluntary registering, but beyond the prescribed period as indicated in these Regulations) – compromise penalty of P 1,000.00, in addition to the unpaid ARF and penalties due thereon for every year that the business is in operation. This provision shall not apply to application for TIN of employees c. Late payment of ARF – subject to 25% surcharge and 20% interest per annum and P 200.00 penalty d. Failure to register a branch or facility – subject to penalty of P 1,000.00 per unregistered branch or facility e. Acquisition of Multiple TINs – aside from the criminal liability that may be imposed, P 1,000.00 for every TIN acquired in excess of one f. Failure to and/or erroneous supply of information – P 1,000.00 for every error/omission, but not to exceed P 25,000.00 g. Any violation of the provisions of these Regulations shall be subject to penalties provided under Sections 254 and 275, and other pertinent provisions of the Code, as amended. Portions of the Regulations, which can be implemented immediately given the present capabilities of the BIR Registration System shall strictly be complied with upon the effectivity of the Regulations. Nevertheless, for provisions hereof, which can only be implemented as the enhancements are put in place in the registration database, transitory procedures shall be provided in a separate Revenue Memorandum Order to be issued for the purpose. Pending the issuance of transitory procedures, existing rules and procedures (status quo) shall be observed in the meantime.