RMC No. 20-2025 — Clarification of certain policies, guidelines and procedures relative to the processing and issuance of Tax Clearance Certificate for Final Settlement of Government Contracts

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE

Brinain for Nation-building Quezon City PILIPINAS BAGONG

February 24, 2025

REVENUE MEMORANDUM CIRCULAR NO. 0 2 0 - 2 0 25

SUBJECT Clarification of Certain Policies, Guidelines and Procedures Relative to

Settlement of Government Contracts (TCFG) the Processing and Issuance of Tax Clearance Certificate for Final

TO All Revenue Officials, Employees and Other Concerned

relative to the processing and issuance of Tax Clearance Certificate for Final Settlement of This Circular is hereby issued to clarify certain policies, guidelines and procedures

Government Contracts (TCFG) pursuant to Revenue Memorandum Order (RMO) No. 2-2025.

as follows: Section III of RMO No. 2-2025 provides the coverage of requiring and issuing a TCFG

HH. COVERAGE

ESS ADMIN UNITME e MAR 2 0 2025 E t w 2o e UREAs gANterWeN REve an relation thereto, this Office clarifies that the TCFG shall be required and issued only 5 Government contracts for any procurement done through public bidding the TCFG: Government contracts for the procurement of goods, consulting services, and process pursuant to RA No. 9184 otherwise known as the "Government Procurement .Reform-Act ", as amended by RA No. 12009 shall be covered by infrastructure projects pursuunt to the scope and application as defined under RA No. 9184; and"

infrastructure projects done through public bidding process pursuant to RA No. 9184 otherwise known as the "Government Procurement Reform Act", as amended by RA No. i2009. Procurement involving small value purchases are not required to secure TCFG. for government contracts which involves the procurement of goods, consulting services, and

Pursuant to Section IV of RMO No. 2-2025, TCFG shall be defined as follows:

V DEFINITION'OF TERMS

For the purpose of this Order, the following words and/or phrases shall be defined us follows:

Page 1 of 2

1. "Tax Clearance Certificate for Final Settlement of Government Contracts government units which will be presented prior to the final settlement of the government {contracts io ensure complete and timely payment and and/or controlled corporations, government financial institutions and local remittance of taxes. (TCFG) " -- refers to the certificate to be secured by the contactor who have and agencies, including state universities and colleges, government-owned existing contracts with the government, its departments, bureaus, offices

of the government contracts with its suppliers on a per contract basis to ensure complete and timely payment and remittance of taxes. For example, taxpayer ABC has a contract with a government agency that underwent a public bidding process pursuant to RA NO. 9184 This Office clarifies that the TCFG shall be presented only prior to the final settlement

the 10th final settlement. Thus, no TCFG shall be required during the initial and partial payments for the said contract. involving ten (10) installment payments, the TCFG shall only be required and secured before

for General Purposes (TCGP) specifically for collection purposes shall no longer be required from the contractor. Business and Efficient Government Service Delivery Act of 2018, a Tax Clearance Certificate In strict compliance with Republic Act No. 11032 also known as Ease of Doing

All revenue issuances and BIR Rulings inconsistent herewith are hereby amended. modified or revoked accordingly.

give this circular as wide publicity as possible. All internal revenue officials, employees and others concerned are hereby enjoined to

S ROMEO D.LUMAGUI, JR.

anissioner of Internal Revenue

J-4

BUREAU OF INTFRN&L RFVENU e RECJRFS MuNaCEMtaT Fn

t Wd aow k J

MAR 2 0 2u25

wa en

ADMIN UNIT 1

Page 2 of 2