RMC No. 69-2017 — Clarifies the registration and compliance requirements of individuals under a Job Order or Service Contract Agreement with the Departments and Agencies of the Government, Instrumentalities, Local Government Units, State Colleges and Universities, including the Government-Owned and/or -Controlled Corporations and Government Financial Institutions Digest | Full Text | Annex A | Ann

BUREAU OF INTERNAL REVENUE REPUBLICOF THE PHILIPPINES DEPARTMENT OF FINANCE FA PERARE HICRDSMGTDISON AU 7 2017 C39PM

ILIPPI August 17.2017RECEIVE

REVENUE MEMORANDUM CIRCULAR NO.9-7/

SUBJECT Registration and Compliance Requirements of Individuals under a Job Order Government, Instrumentalities, Local Government Units (LGUs), State Colleges and Universities, including the Government-Owned and/or -Controlled Corporations (GOCCs), and Government Financial Institutions (GFIs) or Service Contract Agreement with the Departments and Agencies of the

TO All Internal Revenue Officials, Employees and Others Concerned

December 08, 2016 and clarify the registration and tax compliance requirements of individuals under a Job Order State Colleges and Universities, including the GOCCs and GFIs. or Service Contract Agreement with the Departments and Agencies of the Government, Instrumentalities, LGUs, This Circular is being issued to supplement Revenue Memorandum Circular No. 130-2016 dated

The following terms shall be defined as follows:

2. Licensed Professional - refers to those individuals engaged in the practice of professions or callings. 1.Professional - can either be Licensed Professional or Non-Licensed Professional. who render services for a fee, such as those enumerated under Section 2.57.2 (A)(1) of Revenue Regulations (RR) No. 2-98, as amended. 3. Non-Licensed Professional - otherwise known as Non-Professional, shall refer to those individuals

who are not identified under Section 2.57.2 (A)(1) of RR No. 2-98 and who are not registered with Philippines, etc., who render services or labor-only for a fee or under a contract of service. and regulated by the Professional Regulations Commission, Supreme Court, Integrated Bar of the

Order or Service Contract Agreement with the Departments and Agencies of the Government, Instrumentalities. LGUs, State Colleges and Universities, including the GOCCs and GFI: The following registration and compliance requirements are applicable only to individuals under a Job

A Professionals (Licensed/Non-Licensed) Hired under a Contract for Service or Job Order deriving gross

receipts of P100,000 and below in any 12-month period (Marginal Income Earner) and/or amount EOUIVALENT to Statutory Minimum Wage rates fixed by Department of Labor and Employment (DOLE) -Regional Tripartite Wage and Productivity Board (RTWPB)/National Wages and Productivity Commission (NWPC) from LONE PAYOR with no other source of income

Registration Requirements Registration with the Bureau using BIR Form No. 1901 for Taxpayer Identification Number (TIN) issuance with taxpayer type of Professional' or Professional - In General' with the following documentary requirements: a. Copy of service contract showing the amount of income payment:

b.Any identification issued by an authorized government body (e.g. Birth Certificate, passport. driver's license, Community Tax Certificate) that shows the name, address and birthdate of the

The Registration Officer shall add the words " - Job Order in business name field, e.g. "Juan Dela Cruz - Job Order. applicant;

3. 4 Exemption from the issuance of Certificate of Registration (COR): Exemption from the payment of Annual Registration Fee (ARF); Tax Type: Income Tax;

Bookkeeping and Invoicing Requirements 5.Exemption from the requirement of maintenance of Books of Accounts 4.Exemption from compliance with the issuance of registered receipts/invoices

Tax Compliance Requirements 6.Filing of Annual Income Tax ReturnBIR Form No.I701and payment.if applicable 7.Exemption from filing of Quarterly Income Tax ReturnBIR Form No.1701Q 8 Not subject to creditable withholding tax ratesand

Exemption from payment of business taxes i.e.VAT or any Percentage Tax

B. Professionals (Licensed/Non-Licensed) Hired under a Contract for Service or Job Order deriving gross receipts ABOVE P100.000 in any 12-month period and/or Statutory Minimum Wage rates fixed by DOLE-RTWPB/NWPCfrom LONE PAYOR with no other source of income

Registration Requirements Registration with the Bureau using BIR Form No.1901 for issuance of TIN specifying a taxpayer type of Professional'orProfessional-In General' with the following documentary requirements: a.Copy of service contract showing the amount of income payment b.Any identification issued by an authorized government body eg. Birth Certificate. passport. The Registration Officer shall add the words - Job Order in business name field,e.g.Juan Dela Cruz-Job Order the applicant: driver's license,Commuinity Tax Certificate that shows the nameaddress and birthdate of

2. Payment of Annual Registration Fee(RF 3 Tax Types:RF.Income TaxIT-1701VAT or Percentage Taxend-dared if the iaxpaver will

4 Exemption from the issuance of COR avail of substituted percentage tax/VAT return):

Bookkeeping and Invoicing Requirements 5. O Approval of Authority to Print (ATP for the issuance of registered principal receipts/invoices Registration and maintenance of Books of Accounts (except if qualified under thesubstituted (except if qualified under the substinutedreceipts);

receipts):

Tax Compliance Requirements 7.Filing and Payment of Annual Income Tax Return using BIR Form No.1701 8 Exemption from filing of Quarterly Income Tax Return (BIR Form No.170iQ. thus the

0 Exemption from attaching Financial Statements or Account Information Form to the filed Income Registration Officer shall end-date the 1701Q Form Type

11.Subject to withholding of Percentage Tax or VAT 10.Subject to creditable withholding tax rates of ten percent 10%fifteen percent15%for licensed 12. Filing and Payment of monthly and quarterly VAT or monthly Percentage Tax Returns professionals. whichever is applicable or two percent (2% expanded withholding tax, for non-licensed professionals under Revenue Regulations(RRNo.2-98.as amended Tax Return: filing of VAT return under RR No.14-2003:and/or Section 5.116A1 of RR No.2-98,as amendedor five percent 5%final VAT withholding rate under Section 4.114-2 of RR No.16-2005.as amendedor twelve percent 12%VAT The government agency-payor is required to withhold three percent(3%percentage tax under under Section 9.245A of RR No.2-98.as amended.if the payee will avail of the substituted

receiving income above the Statutory Minimum Wage rates per region/area of DOLE-NWPC,with only Substituted Percentage TaxVAT Return and Substituted Official Receipt one payor for the calendar year, may opt to avail of the substituted filing of Percentage/VAT return instead of filing monthly and quarterly returns(No tax types of Percentage Tax or VAT)and substituted issuance of official receipts: Professionals (Licensed/Non-Licensed Hired under Contract for Services or Job Order who are

SeSefion B oftis ccuar

13.Substituted Percentage Tax/VAT Return

(Annex A/B, which waiver and notice are copy-furnished the withholding agent-payor and the payee and shall remit the same to the appropriate collection agents of the Bureau. job order.with only one payor may opt to remit his percentage tax/VAT through the withholding and remittance of the same by the withholding agent-payor which option is manifested by filing the E and Notice of Availment on the Substituted Filing of Percentage Tax/VAT Return Revenue District Offices of both the payor and payee. The lone payor,upon receipt of the notice shall mandatorily withhold the 3% percentage tax or applicable VAT rate on income payment to the Waiver of the Privilege to Claim Input Tax CreditsAnnex Cfor VAT taxpayer only "Notice of Availment on the Option to Pay the Tax through the Withholding ProcessAnnex Pursuant to Revenue Regulations No.14-2003,Taxpayer-payee hired under contract of services or

percentage tax or 12% VAT by the lone payor, shall no longer be required to file the monthly the payor serves as the substituted percentage tax/VAT rerurn of the payee with lone payor provided both the payor and the payee is attached to the filed BIR Form No.1600. The duly filed or stamped ReceivedBIR Form 2306 shall serve the same purpose as the percentage tax/VAT return (BIR Form 2551M//2550M/2550Q) of the payee. percentage tax return (BIR Form No.2551M or the monthly VAT declarations (BIR Form No. 2550M and quarterly VAT returns BIR Form No.2550Q.The BIR Form No.I600 duly filed by that BIR Form No.2306Certificate of Final Tax Withheld at Source duly executed and signed by The Taxpayer-payee whose gross receipts have already been subjected to the withholding of 3%

If within the taxabie year, an additional client or customer comes in,the taxpayer-payee shall immediately file the Notice of Cancellation on the Availment of the Substituted filing of Returns" (Annex D).

14.Substituted Official Receipt services rendered.In lieu thereof,the issued BIR Form No.2306 (Certificate of Final Tax Withheld al Source, for the payee with just one payor shall be constituted and treated as the suhstituted Taxpayer/Professional (seller of service) hired under contract of services or job order whose gross receipts have been subjected to the withholding of 3% percentage tax or applicable final VAT rate, shall be exempted from the obligation of issuing duly registered principal receipt for payments of official receipt,pursuant to the provisions of Section 237 of NIRC.as amended

followed if the taxpayer shall not be engaged in business activities or practice of his profession to facilitate information using BIR Form No. 1905 and immediately file the Notice of Cancellation on the the end-dating of applicable tax types/form types. Contract of Services or Job Order shall duly inform his home RDO by updating his registration Availment of the Substituted filing of ReturnsAnnex D within ten 10 calendar days from the effectivity of separation from service Existing policies and procedures in the closure of business shall be In case of layoff during a taxable year,Professional (Licensed/Non-Licensed hired under the

C Professionals(Licensed/Non-Licensed) Hired under Contract for Services or Job Order with MULTIPLE PAYOR and/or other source of income

Registration Requirements 3.Tax Types:RF,Income Tax IT-1701/1701QVAT or Percentage Tax 2.Payment of Annual Registration FeeARF) Registration with the Bureau using BIR Form No.190I for the issuance of TIN and Certificate of Registration (CORspecifying a taxpayer type of Professional' or Professional-Licensed'with the following documentary requirements: aChecklist of requirements under Annex A1 of RMC No.137-2016 b.Additional requirement: Copy of service contract showing the amount of income payment

Bookkeeping and Invoicing Requirements 4 Registration and maintenance of Books of Accounts: 5 Approval of Authority to Print; 6. Issuance of registered principal receipts/invoices:

Tax Compliance Requirements 1 Filing and Payment of Quarterly Income Tax Return (BIR Form No. 1701Q) and Annual Income

Tax Return (BIR Form No. 1701); 8. 9. Subiect to creditable withholding tax rates of 10% or l5% for licensed professionals. whichever is applicable or two percent (2%) expanded withholding tax, for non-licensed professionals under RR No. 2-98, as amended : Subject to creditable withholding of Percentage Tax or VAT;

10. Filing and Payment of the monthly and quarterly VAT or monthly Percentage Tax Returns; 11. Quarterly submission of the Summary List of Sales and Summary List of Domestic Purchases for Section 5.116(A)(1) of Revenue Regulations (RR) No. 2-98, as amended; or five percent (5%) The government agency --payor is required to withhold three percent (3%) percentage tax under final VAT withholding rate under Section 4.114-2 of RR No. 16-2005, as amended; and/or

VAT taxpayers.

D. Summary

each type of taxpayers previously defined. Table below clearly described the details on the registration, filing and payment requirements for

Instrumentalities, LGUs, State Colleges and Universities, including Individuals under a Job Order or Service Contract Agreement with the Departments and Agencies of the Government the GOCCs and GFI Fitretitete Pet/lrar Brreatrrere lrri T10L0LE OLOLL 2046012040014L400 Withholding xpanded C 2 SS C Bus Obe Ke Tax UA Professionals deriving gross receipts of P100,000 rates from lone payor and below in any 12-month period and/or SMW Non-Licensed Professionals deriving gross X X X X A X A X X A 20

and/or SMW rates from lone payor Licensed Professionals deriving gross receipts receipts above P100,000 in any 12-month period V D X X 2 10% 15%

V

payor and/or other source of income *May avail of the substituted filing on Percentage Tax/VAT return and substituted official receipts. above P100,000 in any 12-month period and/or SMW rates from lone payor Professionals receiving income from multiple 12

All internal revenue officers and employees are hereby enjoined to give this Circular a wide publicity as All other issuances inconsistent herewith are hereby repealed or modified accordingly

possible.

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H2/mag Commissioner of Internal Revenue CAESAR R.DULAY 008953