RMC No. 57-2015 — Provides additional guidelines on the submission of inventory list and other reporting requirements Digest | Full Text | Annexes A-C | Annex D

REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE Quezon City July 21, 2015 REVENUE MEMORANDUM CIRCULAR NO. 57-2015 SUBJECT : Submission of Inventory List and Other Reporting Requirements TO : All Internal Revenue Officers and Others Concerned BACKGROUND: Pursuant to Section 6 (H) of the Tax Code of 1997, as amended, the Commissioner may prescribe additional procedural or documentary requirements for tax administration and enforcement. This Circular is therefore issued to provide guidance on how financial accounting information, in addition to the annual inventory list required to be filed under Section 13 of Revenue Regulations No. V-1, should be reported to the Bureau. This is in line with the Bureau's objective of implementing an expanded and improved landscape of accounting information reporting that seeks to provide reliable data and to maximize the quality and adequacy of such data for better monitoring and analysis. SECTION 1. SCOPE AND COVERAGE This Circular aims to consistently apply the data requirements across different sectors with the peculiarity of the industry where the taxpayers belong directing the volume of reporting. Hence, the additional reports or schedules to be submitted and filed with the annual inventory list shall cover companies maintaining inventory of stock-in-trade, raw materials, goods in process, supplies and other goods such as manufacturing, wholesaling, distributing/retailing sectors including real estate dealers/developers, service companies, e.g., construction companies, building contractors, etc. It bears stressing that the data/information contained in the said schedules/lists should be reconciled with the amount declared in the financial statements and annual income tax returns. SECTION 2. PRESCRIBED FORMAT AND DEADLINE FOR SUBMISSION All taxpayers with tangible asset-rich balance sheets, often with at least half of their total assets in working capital assets, e.g., accounts receivable and inventory, shall submit, in addition to the annual inventory list, schedules/lists prescribed herein, in hard and soft copies, using the

format as shown in Annex "A" (for manufacturing / merchandising or retail company); Annexes "B" and "B-1" (for real estate company) and Annex "C" (for construction industry). Taxpayers not belonging to the above-described industries shall adopt the herein prescribed format that is applicable to their existing inventory. The soft copies of the inventory list including other applicable schedules shall be stored/saved in Digital Versatile Disk-Recordable (DVD-R) properly labeled and submitted, together with a notarized certification, as shown in Annex "D" hereof, duly signed by the authorized representative of the taxpayer certifying that the data/information contained in the DVD-R are true and correct. For initial filing using the herein prescribed format, the schedules and inventory list shall be submitted on or before September 30, 2015 covering ending inventory as of December 31, 2014, and thereafter every 30th day following the close of the taxable year (depending on the accounting period adopted by the taxpayer) as enunciated under Section 13 of Revenue Regulations No. V-1, otherwise known as the Bookkeeping Regulations, which provides for the filing of an annual inventory of stocks-in-trade, raw materials, goods in process, supplies and other goods not later than thirty (30) days following the close of the taxable year, to wit: "Sec. 13. Records of Inventories: - Persons required by law to pay internal revenue taxes on business shall keep, in addition to the other books and records prescribed in these regulations, a book of inventories, in which they shall record in detail the quantity, description, unit and total cost of every item in their stocks-in-trade, materials, supplies and other goods found in their premises, of their establishments as the time they start business and at the close of the calendar year or accounting period. The inventory at the beginning shall be made and submitted to the Commissioner of Internal Revenue, if the place of business is in Manila, or to the Deputy Provincial or City Treasurer, if in a municipality or city, within ten days after securing the privilege tax receipts or starting the business and the subsequent inventories not later than thirty days after the close of the calendar year or accounting period. This period may, in meritorious cases, be extended by the Commissioner of Internal Revenue." The inventory lists as well as other applicable schedules are to be submitted with the concerned Revenue District Office (RDO) where the non-large taxpayers are registered and with the Large Taxpayers Assistance Division (LTAD), Excise Large Taxpayers Regulatory Division (ELTRD), Large Taxpayers Division (LTD) Makati and Cebu, for taxpayers classified as large under the Large Taxpayers Service. The submission of the schedules and inventory list that does not conform with the herein prescribed format shall be deemed not received by the concerned office of the BIR and shall be considered as grounds for the imposition of penalties under the NIRC of 1997, as amended.

SECTION 3. PENALTIES Any violation of the provisions of the Circular shall be subject to the corresponding penalties under Section 250 and 255 of the National Internal Revenue Code (NIRC) of 1997, as amended. The same penalties were reiterated in Revenue Memorandum Order (RMO) No. 7-2015, with pertinent excerpts reproduced hereunder found on page 4 of Annex A, RMO No. 7-2015, to wit: TAX NATURE OF CRIMINAL AMOUNT OF COMPROMISE CODE VIOLATION PENALTY SEC IMPOSED One Thousand Pesos (P1,000) for each 250 Failure to make, information return, schedule, report, sworn file or submit statements, certification and other information document not made, filed or submitted, or returns, for each record not maintained. Provided, schedules, however, that the aggregate amount to be reports, sworn imposed for such failures during a calendar statements, year shall not exceed Twenty Five certifications Thousand Pesos (P25,000). and other documents, (except quarterly SLS/P/I, and the Annual Alpha List of Payees and/or the Annual Alpha List of Employees subjected to withholding taxes), or keep any record required by the Tax Code, as amended, or other existing rules and regulations.

255 Failure to Fine of not less If gross sales, earnings or receipts; or gross make/file/ than P10,000 estate or gift (based on the subject submit any and returns/information for filing/submission) return or supply imprisonment of Exceeds But does not Compromise correct not less than exceed is information at one (1) year but Pxxx P50,000 P 1,000 the time or not more than 50,000 100,000 3,000 times required ten (10) years. 100,000 500,000 5,000 by law or 500,000 5,000,000 10,000 regulation. 5,000,000 10,000,000 15,000 10,000,000 25,000,000 20,000 25,000,000 xxx 25,000 SECTION 4. EFFECTIVITY This Circular shall take effect immediately. All internal revenue officials, employees and other concerned are hereby enjoined to give this Circular as wide a publicity as possible. (Original Signed) KIM S. JACINTO-HENARES Commissioner of Internal Revenue D-