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New BIR Rule: Disclose Other Income....

creativehaven · 16 · 6105


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on: Apr 01, 2014, 10:23 AM

Source: Inquirer
Read here:

in Brief: "The new Bureau of Internal Revenue (BIR) Annual Income Tax Returns (BIR Forms 1700, 1701, 1702-RT, 1702-MX and 1702-EX) require taxpayers to disclose supplemental information on their other incomes.
However, under the BIR’s Revenue Memorandum Circular No. 9-2014, which took effect last Feb. 11, the requirement is optional for individual taxpayers but mandatory for corporate or non-individual taxpayers for income tax filing covering calendar year 2013, which is due this coming April 15.
It will be mandatory for individual taxpayers for income tax filing starting calendar year 2014.
Supplemental information on their other income include income subjected to final tax, such as the following:
Prizes and winnings
Fringe benefits
Compensation subjected to the 15-percent preferential rate (applicable to those employed by regional or area headquarters and regional operating headquarters of multinational companies, offshore banking units  and petroleum service contractors and subcontractors)
Capital gains from the sale of stocks not traded in the stock exchange and from the sale of real properties
It also requires the disclosure of items excluded from gross income under Section 32(B) of the Tax Code, such as the following:
Proceeds of life insurance policy
Return of premium
Retirement benefits
Property received through donation and inheritance
Stock transactions done through the Philippine Stock Exchange" etc...

nakakainit ng ulo...parang double taxation na mangyayari ah.... ano opinion niyo guys?


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Reply #1 on: Apr 01, 2014, 10:44 AM
disclosing is OK... i'm afraid of the double taxation that may happen for stock dividends and bank interest income.  tax withheld na ang mga iyon, kaya dapat wala ng additional tax burden after disclosing


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Reply #2 on: Apr 05, 2014, 10:20 AM
AFAIK walang addl tax for the other income under bank deposits, stocks trading, dividends, bonds, etc. Final tax ang applicable duon.

Why does BIR require these info in our ITR? Tamad sila at inefficient.
BIR wants to know your total income but won't work for it.
Gusto spoon feed mo sa kanila.
Di ba, BIR has a record of all these income reports anyway, kasi the withholding agent file their reports and pay BIR for these items.
Typical govt agency.


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Reply #3 on: Aug 04, 2014, 02:07 PM
This is very alarming news, I wasn't even aware about this BIR regulation...


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Reply #4 on: Aug 04, 2014, 02:33 PM
hasle ito since need mo pa icompute mga capital gain na natanggap mo.
glad i don't work in PH anymore. ;)


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Reply #5 on: Aug 04, 2014, 04:54 PM
Its the new Philippines guys!! Lets just hope our tax money is put into good use. Anyways unless we get really big or very flashy in our own little town, I don't think this things would be a problem. Keep a low profile hehehehe!


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Reply #6 on: Aug 11, 2014, 04:21 PM
Hi guys,

Have you heard about BIR Revenue Regulation 1-2014 that requires all withholding agents to submit an alphalist of payees of income payments subject to creditable and final withholding taxes?

From my understanding, bank deposits are not covered by this regulation due to the Bank Secrecy Law. However, Corporate bonds, stocks, promissory notes, etc. are covered by this regulation.

Does anyone have any idea if your banks are already implementing this regulation?

Thanks in advance.


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Reply #7 on: Aug 11, 2014, 05:18 PM
That was the subject of the Inquirer article I shared above...

BIR rule seen to trigger capital flight
Groups claim submission of taxpayers’ list contrary to law

Nine of the country’s most influential business groups—including the entire banking and capital market industry—have warned of capital flight arising from a new Bureau of Internal Revenue (BIR) regulation requiring the submission of an alphabetical list (alphalist) of payees of income payments subject to withholding taxes.

Apart from being “prejudicial” to investors and infringing on the right to privacy, a seven-page position paper drawn up by the business sectors dated July 21 and sent to the BIR last week said the alphalist regulation was in violation of the principle of uniformity of taxation and existing legal requirements, was “impossible” to comply with and would “not serve any useful purpose.”

Instead, the groups warned that the selldown on preferred shares has started, resulting in P2.12 billion in net foreign selling in the first semester even when the overall market had posted a net foreign buying of P45.67 billion for the period. The paper reported that while the total market capitalization of the local stock market had grown by 11.9 percent so far this year, the market capitalization of preferred shares had retreated by 3.12 percent.

“The behavior exhibited by the market is a clear message that investors would rather dispose of preferred shares and forgo the coupon payments rather than being subjected to the alphalist requirement of the BIR,” the paper said.

Calling for the revocation of the BIR ruling along with a subsequent circular from the Securities and Exchange Commission, the following institutions signed the position paper through their top officials: Bankers Association of the Philippines; Employers Confederation of the Philippines; Federation of Filipino-Chinese Chambers of Commerce and Industry Inc.; Fund Managers Association of the Philippines; Investment Houses Association of the Philippines; Philippine Association of Securities Brokers and Dealers Inc.; Philippine Chamber of Commerce and Industry; the Philippine Stock Exchange; and the Trust Officers Association of the Philippines.

BIR Revenue Regulation 1-2014 requires all withholding agents to submit an alphalist of payees of income payments subject to creditable and final withholding taxes. It also prohibits the lumping into a single amount and account of various income payments and taxes withheld.

As applied to dividend income payments by listed companies to their investors, it also prohibited listed companies from naming PCD Nominee Corp.—the entity holding the title to all “uncertificated” shares traded in the stock market—as the payee of dividends. This was interpreted by some listed companies, through their transfer agents, to require the disclosure of the names, addresses and tax identification numbers (TINs) of the investors.

The groups warned that these regulations, which were issued without the benefit of prior consultations with industry practitioners, were already resulting in either forced retention of dividends or imposition of excessive withholding tax dividend payments, both of which were contrary to law.

The paper said these regulations were issued in violation of existing legal requirements, citing the Administrative Code of 1987, which provided that an agency, as far as practicable, must publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule.

It also argued that the right to privacy was paramount. They said that brokers and custodians in the equities market, for instance, had a duty of confidentiality to their clients. For custodian banks, this duty is outlined in their custody agreements with clients while for brokers, this duty is set out in client agreements as well as in the rules (Section 8 Article V) of the Capital Market Integrity Corp.

The groups also reminded the BIR that disclosure by mutual funds and banks of the identities of their clients would be in violation of the Bank Secrecy law.


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Reply #8 on: Aug 11, 2014, 05:53 PM
Don't panic. . . It's organic!


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Reply #9 on: Aug 12, 2014, 08:12 AM
Don't panic. . . It's organic!


BPI Trading has sent out emails informing clients of this rule.
Let's wait and see.
Will someone file a case against this? TRO?


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Reply #10 on: Aug 15, 2014, 10:36 PM
not to alarm anyone but i was talking to a bank manager and one of his clients already got a LETTER NOTICE from BIR National Office regarding this alphalist thing... the client had investment in stocks that were giving cash dividend and after a few weeks after the dividend payout the LN from BIR came asking him to explain why he has X amount of money invested in this stock... poor guy cannot explain...

oh well, tuwid na daan.


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Reply #11 on: Aug 18, 2014, 11:32 AM
Kasama ba dito ang Mutual Funds at UITF?


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Reply #12 on: Aug 20, 2014, 10:51 AM

BPI Trading has sent out emails informing clients of this rule.
Let's wait and see.
Will someone file a case against this? TRO?

I haven't receive any email from BPI Trade.
Can we get summary of transactions from BPITrade?

I'm currently working, and our HR does the tax filing.  I don't know yet the process when I have to fill up this new form for additional income.
This will be kind of awkward when HR realizes, there are other income outside work.  :D


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Reply #13 on: Aug 21, 2014, 01:32 AM
BIR is using technicality to siphon personal information by saying they didn't break the bank secrecy law because they were not asking for the account balance/amount deposited but merely the interest paid to clients from all forms of banking investment.

This is clearly a ploy to reveal how much you have over your bank because If you studied investment mathematics there is a formula wherein you need only know the information on interest paid, time/term & rate and the principal will be revealed and that's the kind of information they're asking from banks.

Interestingly, there is this article from daxim lucas that talks about this BIR regulation:

Capital market overhang

Don’t look now, but the strict interpretation by the Bureau of Internal Revenue (BIR) of the so-called “alphalist” regulation is giving some very big companies trouble at the capital markets.

Take Globe Telecom, for example. The Ayala-controlled telco recently raised P10 billion through a sale of preferred shares, which will be listed on Friday. Normally, preferred shares sell like hot cake. But Biz Buzz learned that, of the shares allocated to the Philippine Stock Exchange, only 47 percent were taken up. The rest had to revert to the underwriters who had to use their own financial muscle or network of clients to make sure the quasi-equity issue would be sold.

Then there was last week’s bond issue of real estate developer Century Properties Group. Considering that the issue was worth only P3 billion, selling the debt instrument should have been a breeze. But once more, underwriters had to work doubly hard to make sure that the bonds were sold. To make sure the issue was fully sold, bankers had to offer a premium for the bonds. The firm will now have to pay between 159 basis points and 178 basis points higher than comparable issues.

SM Prime is also set to raise P25 billion in bonds to take advantage of the low interest rate regime. One underwriter was confident that they’d have no problem with enticing investors, but added: “We’ll just have to work harder.” Daxim L. Lucas




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Reply #14 on: Aug 22, 2014, 02:13 AM
yes, as per query with a bank

Kasama ba dito ang Mutual Funds at UITF?


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