Implementing the Provisions of the Ease of Paying Taxes Act on the Filing of Tax Returns and Payment of Taxes and Other Matters Affecting the Declaration of Taxable Income

On 11 April 2024, the Bureau of Internal Revenue (“BIR”) issued Revenue Regulations (“RR”) No. 4-2024 which implements Republic Act No. 11976 otherwise known as “Ease of Paying Taxes Act”, on the Filing of Tax Returns and Payment of Taxes and Other Matters Affecting the Declaration of Taxable Income.

According to the RR, the filing of tax returns shall be done electronically on any of the available electronic platforms (e.g., BIR eFiling and Payment System/eBIRForms). However, in case of unavailability of the electronic platforms, manual filing of the returns may be allowed.

For tax payments, the same shall be made either electronically on any of the available electronic platforms or manually to any Authorized Agent Banks or Revenue Collection Officer.

Likewise, the civil penalty of 25% of the amount of tax due in case of wrong venue filing of tax returns shall no longer be imposed.

Removal of Additional Requirements for Deductibility of Certain Payments

Section 34 (K) of the National Internal Revenue Code, as amended (“NIRC”), which requires withholding of taxes as an additional requirement for deductibility of expenses from gross income is repealed. Previously, an expense would not be allowed as a deduction for income tax purposes if the taxpayer failed to show that the tax required to be deducted has been paid to the BIR following Sections 58 and 81 of the NIRC. Note however that this does not remove the withholding obligation of the payor.

Timing of Withholding

Moreover, Section 2.57.4 of RR No. 2-98, as amended, on withholding tax at source is amended. The obligation of the payor to deduct and withhold the tax arises at the time an income has become payable.