Annual Income Tax Return in the Philippines – BIR Clarifies Attachment Requirements

The season of filing annual income tax requirements in the Philippines for many businesses is not over yet!

Companies are still in the process of filing their Annual Income Tax Return, or AITR, as well as the relevant attachments. This includes the Audited Financial Statement, or AFS.

The BIR has just released a new Advisory to provide clarification on the deadlines for filing the AITR and in particular, the required attachments to the AITR.

Here’s what you need to know about the most recent BIR Advisory!

Background to the New BIR Advisory

Companies in the Philippines that had a fiscal year ending on December 31, 2020, were required to file their Annual Income Tax Return on or before 15 April 2021.

Check out our Explainer on Audit Season in the Philippines for more information on this compliance requirement.

Earlier this month, the BIR confirmed that the deadline for the filing of the Annual Income Tax Return, or AITR, would not be extended. This confirmation came in response to the speculation that the AITR deadline would be extended as a result of the newly implemented community quarantine in April.

However, in response to the imposition of the community quarantine, the BIR did make provision to allow companies to file a tentative AITR by 15 April, 2021 and then submit a final or amended AITR by 15 May, 2021.

AITR Attachments and Requirements

The Annual Income Tax Return is just one document that has to be filed during Audit Season in the Philippines.

There are a number of other attachments that must be filed each year during the same period as the AITR. One of these documents is the Audited Financial Statement, or AFS.

This most recent BIR Advisory, dated 28 April 2021, confirms the requirements and guidelines for the submission of AITR attachments to the BIR.

What Does the BIR Advisory Clarify?

The BIR Advisory identifies a number of specific points to clarify the requirements when submitting the attachments to the AITR as well as the respective deadlines.

In particular, the BIR Advisory confirms that:

1. For companies that filed a tentative AITR before the deadline on April 15, 2021 – the filing of the Amended AITR must be completed on or before May 15, 2021. This was previously confirmed by the BIR in Memorandum Circular No. 46 of 2021.
2. The submission of all required attachments, including the Audited Financial Statement or AFS, to the electronically filed amended AITR, must be submitted on or before May 30, 2021. Attachments can be submitted physically to the local RDO in which the business is registered or through the use of the BIR Electronic Audited Financial Statement System, also known as the eAFS platform.
3. No penalties will be imposed on companies for non-submission of the attachments to an already filed AITR but which is later amended before May 15, 2021.
4. For any tentative AITRs that were filed electronically on or before April 15, 2021 and for which the required attachments have not yet been submitted, the attachments in relation to the amended return must be submitted on or before May 30, 2021
5. Taxpayers who already submitted attachments with their tentative AITR but who will be amending the AITR due to the correction of tax rates do not need to resubmit the same documents.
6. Any taxpayers that are amending their tentative AITR for reasons other than the correction of tax rates must submit the necessary documents on or before May 30, 2021. If, however, no changes resulted from the amendments in respect of the documents that were already submitted, it is not necessary to resubmit those documents with the amended AITR.

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