RMC 57-2013, UNUSED INPUT TAX, DISALLOWED EXPENSE
EMELINO T MAESTRO DISAGREES; 10-2-2013
ATTEND HIS TAX CONSULTING COURSE TO BE UPDATED
Whoever penned the BIR Ruling stated in Revenue Memorandum Circular No. 57-2013 is an amateur who pretends to be a professional.
Here its dispositive case, viz;
"It is noted, based on the above-cited provisions, that unutilized creditable input taxes attributable to zero-rated sales can only be recovered through the application for refund or tax credit. Nowhere in the Tax Code can we find a specific provision expressly providing for another mode of recovering unapplied input taxes, particularly your proposition that unapplied input taxes may be treated outright as deductible expense for income tax purposes. Thus, your proposition, that accumulated and unapplied input value-added tax (VAT) arising from Cekas’ purchase of goods and services after the expiration of the two (2) year prescriptive period may be expensed outright, is hereby denied for lack of legal basis.”
Under Revenue Regulations No. 16-2005, unused input taxes can be claimed as a deduction from gross income, viz;
"SEC. 4.114-2, Withholding of VAT on Government Money Payments and Payments to Non-Residents. – (a) The government or any of its political subdivisions, instrumentalities or agencies, including government-owned or controlled corporations (GOCCs) shall, before making payment on account of each purchase of goods and/or of services taxed at 10% VAT pursuant to Secs. 106 and 108 of the Tax Code, deduct and withhold a final VAT due at the rate of five percent (5%) of the gross payment thereof. The five percent (5%) final VAT withholding rate shall represent the net VAT payable of the seller. The remaining five percent (5%) effectively accounts for the standard input VAT for sales of goods or services to government or any of its political subdivisions, instrumentalities or agencies including GOCCs, in lieu of the actual input VAT directly attributable or ratably apportioned to such sales. Should actual input VAT exceed five percent (5%) of gross payments, the excess may form part of the sellers’ expense or cost. On the other hand, if actual input VAT is less than 5% of gross payment, the difference must be closed to expense or cost."
"RMO 4-2007. The five percent (5%) final VAT withholding rate shall represent the VAT payable of the seller. The remaining seven percent (7%) effectively accounts for the standard input VAT for sales of goods or services to government or any of its political subdivisions, instrumentalities or agencies including GOCCs in lieu of the actual input VAT directly attributable or ratably apportioned to such sales."
Input tax cannot exist without purchases/expenses. Therefore, the original source of input tax is an expense and to claim an input tax as an input tax relies on the shoulder of the taxpayer and not to the whims and caprice of any BIR officials (See VAT law in relation to Section 34, NIRC)
Finally, a creditable input tax partakes as a receivable to the Philippine Government, through the Bureau of Internal Revenue. If the same, at the option of the taxpayer, can no longer be claimed as a tax refund or credit, the taxpayer may consider it as a bad debt which is similar to uncollectible receivables from customers, clients and employees...
Erroneous and preposterous....
Without legal and factual legs to stand on ....
IMPORTANT EVENT....
YOU'RE INVITED@ SOFITEL LUXURY HOTEL /Oct 14-18, 2013
by Emelino T Maestro, Author and Resource Speaker
Managerial Accounting and Financial Accounting, according to many taxpayers who became the victims of BIR scalawags, are the sources of graft and corruption because they are incomprehensible and inadmissible as far as the BIR is concerned.
To stop the BIR's harassment, oppression and corruption, the law of the State is encouraging, if not commanding, the taxpaying public to use the TAX ACCOUNTING..
IMPORTANT NEWS...
Many taxpayers confirmed that the use of GAAP (now known as PFRS) created more tax troubles, penalties and problems to a taxpayer than TAX ACCOUNTING
Recently, The National Society of Accountants in the United States of America says, “The cost of preparing generally-accepted-accounting-
The Bureau of Internal Revenue's position between GAAP and TAX ACCOUNTING can be deciphered from "The recording and recognition of business transactions for financial accounting purposes, in a majority of situations, differ from the application of tax rules on the same transactions resulting to disparity of reports for financial accounting vis-a-vis tax accounting (RR 8-2007). In case of differences, the provisions of the Tax (accounting) Code shall prevail (RMC 22-2004). Therefore, it is the financial statements which is in conformity with the Tax (accounting) Code that should be attached in the filing of Income Tax Return (BIR Ruling No. M-111-2006)."
Tax Accounting has three (3) layers which would start with value added tax accounting, then would be followed by withholding tax accounting and would end with income tax accounting. All of them shall comprehensively tackle the three (3) important requirements of the Tax Code which the BIR expects you to be knowledgable of. They are document accounting, book-entry making and timely-and-correct report-filing.
SCHEDULE
Oct 14-18, 2013 - Retailers & Resellers
Nov 18-22, 2013 - Petroleum/Gasoline Stations
Dec 9-13, 2013 - PEZA-registered Corporations
Jan 27-31, 2014 - Online Businesses
Feb 10-14, 2014 - Real Estate Dealers & Agents
Mar 17-21, 2014 - Engineering & Construction
Apr 21-25, 2014 - Restaurants & Fast Food Chains
May 19-23, 2014 - Manpower & Recruitment
Jun 23-27, 2014 - Hospitals, Clinics & Laboratories
Jul 21-25, 2014 - Advertising & Entertainment Agencies
Aug 18-22, 2014 - Importers
Sep 22-28, 2014 - Brokers on Commission Basis
Oct 20-24, 2014 -Pawnshops & Money Changers
Nov 17-21, 2014 - Exporters
Dec 8-12, 2014 - Local Service Providers
WHO MUST ATTEND
1, Those who are currently employed so that he/she may increase his/her value in an organization thus his/her salary/wage
2, Those who are currently looking for an employer so that he/she may increase his/her marketability/chance to be hired and get his/her desired salary/wage
3, Those who may have an opportunity to receive an eLA so that he/she may have an opportunity to stop/avoid existing/potential BIR’s illegal acts/advances and harassment
VENUE
Sofitel Luxury Hotel, PICC Complex, Pasay City
INVESTMENT FEE
Regular rate -29,289 pesos
Early bird rate -14,289 pesos
WHERE TO GET TICKETS
SMTickets' Online and SM Cinema
For your convenience, please deposit your investment fee at Bank of the Philippine Island (any branch), Saving Account No. 9579-0638-47 under the name of EMELINO T MAESTRO then scan-email the BPI-validated deposit slip to KATAXPAYER@GMAIL.COM..
Call ETM Tax Agent Office, QC
921 6107
439 3918
0998 979 3922
0922 801 0922
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