New BIR requirements for firms with inventories

INTERNAL Revenue Commissioner Kim Jacinto-Henares has issued Revenue Memorandum Circular 57-2015 prescribing new reporting requirements of companies maintaining inventories of stock-in-trade, raw materials, goods and other supplies to track these inventories which are used in computing a company’s net income

“This is in line with the bureau’s objective of implementing an expanded and improved landscape of accounting information reporting that seeks to provide reliable data and to maximize the quality and adequacy of such data for better monitoring and analysis,” the new circular said.

The new reporting requirements shall be in addition to the annual inventory list required to be reported to the Bureau of Internal Revenue (BIR) and should be submitted by September 30, 2015, and thereafter on every 30th day following the close of the taxable year.

“This circular aims to consistently apply the data requirements across different sectors with the peculiarity of the industry, where the taxpayers belong directing the volume of reporting. Hence, the additional reports or schedules to be submitted and filed with the annual inventory list shall cover companies maintaining inventory of stock-in-trade, raw materials, goods in process, supplies and other goods, such as manufacturing, wholesaling, distributing/retailing sectors, including real-estate dealers/developers, service companies, construction companies, building contractors, etc.,” the circular said.

“It bears stressing that the data/information contained in the said schedules/lists should be reconciled with the amount declared in the financial statements and annual income-tax returns,” it added.

The new requirements provide for a format specifically for companies in the industries of retail, manufacturing, real estate and construction, but shall also be applicable to other companies not in these industries but are also maintaining inventories in their businesses.

“The submission of the schedules and inventory list that does not conform with the herein prescribed format shall be deemed not received by the concerned office of the BIR and shall be considered as grounds for the imposition of penalties under the Tax Code, as amended,” the circular said.

The failure to submit the new reporting requirements will subject the taxpayers to penalties provided under Section 250 and 255 of the Tax Code.

Such penalties include a fine of not less than P10,000 and imprisonment of not less than one year but not
more than 10 years. 

source:  Business Mirror