The May 2015 issue of the International Financial Law Review (IFLR) included an international briefing article by SyCipLaw partner Maria Jennifer Z. Barreto on “Electronic tax return controls.”

The Philippine Bureau of Internal Revenue (BIR) recently required the mandatory use of electronic tax return forms by the non-electronic Filing and Payment System (non-eFPS). The new requirement applies to filers covered by the relevant regulations for taxpayers for one-time transactions (such as sale of shares of stock not listed or traded at the stock exchange, or of real property, estate settlement, and donation).

Previously, a non-eFPS filer could choose to submit its tax returns manually at its revenue district office (RDO) using electronic tax return forms in the BIR’s eBIRForms offline packgage. This is no longer allowed under the amended regulations; a covered non-eFPS filer must now electronically submit and file all its tax returns using the eBIRForms facility.

In order to comply, a covered noneFPS filer would therefore need to complete the registration process at the BIR website. This entails the disclosure of various pieces of information regarding the taxpayer and the nomination of an email address for its tax filings.

Only a taxpayer with a verified application for registration may fill up an online tax return form and file such return electronically. To pay the tax, a taxpayer then needs to present a printout of the BIR’s acknowledgement of its electronic tax return filing.

Non-compliance with the BIR regulations will merit the imposition of penalties. These consist of a basic penalty of P1,000 ($22.50) for each return that a covered non-eFPS filer failed to file electronically, and civil penalties equivalent to 25% of the tax due to be paid for filing a return in a manner inconsistent with the regulations.

To avoid penalties, a covered taxpayer must therefore promptly accomplish the BIR’s online registration process to ensure that it is able to submit its returns electronically within the periods prescribed under relevant tax laws.