Is it the start of something new?

TOP OF MIND - Angeline T. Anclote (The Philippine Star) - December 10, 2019 - 12:00am

The year is almost over and it will be another year since the passing of the Tax Reform for Acceleration and Inclusion (TRAIN) Law. Throughout this year, the government has been deliberating on other tax reforms; i.e., Corporate Income Tax and Incentives Rationalization Act (CITIRA) and Passive Income and Financial Intermediary Taxation Act (PIFITA). With all these tax reforms, the government envisions to correct deficiencies in the tax system to make it simpler, fairer, and more efficient.

To show its commitment to their vision of making the tax system simpler, fairer, and more efficient, various Revenue Memorandum Circulars (RMC) were issued by the Bureau of Internal Revenue (BIR) throughout the year. The onset is the issuance of various revised corporate tax returns by the BIR. 

It will soon be time to file different annual tax returns with 2019 about to end. With this, there are certain RMCs issued which could affect our annual tax filings. First, an RMC was issued by the BIR in January this year providing for the revised annual income tax returns for Corporations (i.e. BIR Form No. 1702-EX and BIR Form No. 1702RT) and another RMC in March was issued to provide the revised BIR Form No. 1702-MX. One can easily notice the decrease in number of pages from the old versions of these income tax returns. This is part of TRAIN’s implementation to set the maximum number of pages of tax returns to four pages only with the hope of making the taxpayer’s filings less complicated.

In July, another RMC was also issued to provide the revised BIR Form No. 1604-E. The new BIR Form No. 1604-E now requires taxpayers to identify whether it was recognized as a top withholding agent or not. Moreover, the summary of remittances of the new BIR Form No. 1604-E requires the total quarterly remittances per BIR Form No. 1601-EQ unlike the reporting of monthly remittances in the old version.

The same RMC also provides the separation of BIR Form No. 1604-C and BIR Form No. 1604-F from the consolidated BIR Form No. 1604-CF. The same changes mentioned in the new BIR Form No. 1604-E were also applicable to the new BIR Form No. 1604-C and BIR Form No. 1604-F. Aside from this, there were also changes made in the required schedules to be submitted.

For BIR Form No. 1604-F, there is an additional requirement to provide a schedule of “Alphalist for Other Payees Whose Income Payments are Exempt from Withholding Tax but Subject to Income Tax”. A new requirement is also needed to indicate the nature of the fringe benefit granted to employees.

With regards to BIR Form No. 1604-C, there will only be two Alphalists (i.e. Alphalist of Employees and Alphalist of Minimum Wage Earners) instead of the previous five Alphalists. With the new Alphalists, it will now be required to indicate the nationality of foreign employees, the employment status of all employees whether regular, casual, contractual / project-based, seasonal, probationary or apprentices / learners, period of employment with the present and previous employers, Tax Identification Number (TIN) of the former employer and reason of separation for employees whether terminated / resigned, transferred, retirement or due to death.

As of this writing, these new BIR forms are not yet available in the Electronic Filing and Payment System (eFPS) and Electronic Bureau of Internal Revenue Forms (eBIRForms). We are unsure when the separate revenue issuances announcing the availability of these revised tax returns will be released, but we can surmise that these forms are currently, being readied in time for their corresponding deadlines.

This holds true for the new BIR Form No. 1604-C and BIR Form No. 1604-F since a recent RMC issued this November announced the extension of the deadline for the submission of the said Alphalist required for the new tax returns from Jan. 31, 2020 to Feb. 28, 2020. The BIR affirms that they are currently enhancing the prescribed facility for accomplishing the “Alphalist of Employees / Payees From Whom Taxes Were Withheld” and that the extension was granted to provide all taxpayers sufficient time to prepare and submit the new prescribed BIR Form No. 1604-C and BIR Form No. 1604-F with its corresponding Alphalists. With this, it is expected that the new BIR Form No. 1604-C and BIR Form No. 1604-F will be released by the BIR for the taxpayers to use in time for the extended deadline.

The year is about to end, but the implementation of the TRAIN Law is far from over. As we expect more clarifications and issuances by the BIR, we anticipate that these will be the start of something new that all taxpayers should be prepared for.

Angeline T. Anclote is an assistant manager from the tax g;roup of KPMG R.G. Manabat & Co. (KPMG RGM&Co.), the Philippine member firm of KPMG International. KPMG RGM&Co. has been recognized as a Tier 1 tax practice and Tier 1 transfer pricing practice by the International Tax Review.

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity.

The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG International or KPMG RGM&Co. For comments or inquiries, please email or


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