BIR orders use of new forms for 2013 taxes

NEW FORMS for income tax filings covering last year should now be used, the Bureau of Internal Revenue (BIR) said.

Revenue Regulations (RR) 2-2014, dated Jan. 24 and published yesterday, “prescribe the use of revised income tax forms with bar codes... [and] reflect the changes in information required from said forms.”

“This will also enable the said forms to be read by an optical character reader for ease in scanning,” the issuance notes.

Redesigned were Form 1700, or the annual income tax return (ITR) for individuals earning purely compensation income, and Form 1701, or the ITR for self-employed individuals, estates, and trusts.

The tax bureau likewise prescribed the use of three separate ITRs by corporations, partnerships, and other non-individual taxpayers, depending on their income sources and exemptions.

These entities were previously required to file Form 1702.

Corporations, partnerships and other non-individual taxpayers subject only to the regular income tax rate will now need to use Form 1702-RT.

Those exempt from income taxes under the Tax Code and other special laws, or those with no taxable income, must file their returns using Form 1702-EX.

Lastly, firms with mixed income subject to multiple income tax rates or with income subject to special or preferential rates must use Form 1702-MX.

Also eliminated was the requirement for entering amounts up to the last centavo in ITRs. Instead, taxpayers can now round off these values to the nearest peso.

The issuance also specified the types of individuals or firms required to file itemized deductions such as expenses as ITR attachments,

The following kinds of individuals and corporations, partnerships and other non-individuals cannot avail of the optional standard deduction (OSD) method and are mandated to itemize their deductions:

• Those exempt under the Tax Code and other special laws, with no other taxable income;

• Those with income subject to special/preferential tax rates; and

• Those with income subject to regular income tax rate and to special/preferential tax rates.

“Juridical entities whose taxable base is the gross revenue or receipts (e.g., non-resident foreign national carriers) are not entitled to the itemized deductions nor to the optional standard deduction,” the issuance noted.

Under the law, taxpayers are allowed to either itemize their tax deduction claims, which means having to present invoices and receipts, to show these were indeed used for business purposes, or avail of the OSD.

The OSD rate, under Republic Act 9504, is 40%. For corporations, this is deducted from gross income while for self-employed individuals or professionals, it is subtracted from gross sales or receipts.

Taxpayers who filed using the old forms for their 2013 ITRs (manual and/or electronic) must re-file using the new format, the bureau said.

Individual taxpayers must file their ITRs on or before April 15. Non-individual taxpayers, meanwhile, need to submit the forms on or before the 15th day of the fourth month following the close of their respective taxable years.

The new BIR regulations take effect Feb. 20. -- Bettina Faye V. Roc

source:  Businessworld