RR 4-2024: Amendments on Filing and Paying Taxes

Republic Act (RA) No. 11976 Ease of Paying Taxes, approved last January 2024, amended the tax code to make it simpler and easier for taxpayers to comply with their tax obligations.

Revenue Regulations (RR) No. 4-2024, released and published on the Bureau of Internal Revenue (BIR) website last April 11, 2024, implements these amendments. It is effective fifteen days after publication.

In this article, I will share the changes and implementation of the tax law made by RR 4-2024.

To download the full document of RR 4-2024, click here.

1. Manner of Filing and Paying Tax Return according to RR 4-2024

RR 4-2024 and EOPT reiterated the following with regards to the manner of filing and paying tax return:

a. Electronic filing and payment of tax return

Based on RR 4-2024, file the tax return electronically in any available electronic platforms such as the following:

• eFPS, or Electronic Filing and Payment System, is a web-based platform of the BIR to file and pay taxes. Certain taxpayers are mandatory to file via eFPS. If you are on the mandatory list, you must file your tax returns in EFPS.

• eBIRForms, or Electronic BIR Forms, is a desktop software of the BIR where you can file your tax returns. However, it does not have the facility to accept payment, as such, payments can be either online via ePAY services or physically in AABs.

• ATSP, or Authorized Tax Software Provider, is a third-party software which provides tax filing solutions evaluated and certified by BIR.

Taxpayers can pay any tax due electronically thru the following platforms:

• eFPS AABs, or known as EFPS Accredited Authorized Banks (AABs). These AABs can link taxpayer’s bank account to its eFPS account. When using eFPS, taxpayers can file and pay their tax return through eFPS platform.

• ePAY Services, or Electronic Payment System of AABs, such as Myeg, LinkBiz, PesoNet, Upay, etc.

• Manual payment via AABs or RCOs. The AABs and RCOs will only accept payment if the tax return has already been electronically filed unless there is a BIR advisory allowing manual filing.

b. Manual filing and payment of tax return

Manual filing of tax return is the act of printing the BIR Form and manual handwritten or typewritten the details in the BIR form.

On the other hand, manual payment of tax return is physical payment in BIR offices via Regional Collection Officers (RCO) or via AABs.

Prior to 2015, this was the only way to file and pay taxes outside EFPS. But when eBIRForm launched in 2015, manual filing arises in the following circumstances:

• If electronic filing via electronically platforms stated above are not available, and
• There is a BIR advisory to file and pay manually.

If you plan to manually pay in BIR RCO, they only accept cash payment up to P20,000 and check payment regardless of amount.

c. Filing and payment of tax return in any RDO

EOPT and RR 4-2024 now allow taxpayers to file and pay the tax return in any Regional District Office (RDO) regardless of area.

This now makes it easier and flexible to pay taxes physically in any Accredited Authorized Banks (AABs) regardless of RDO. Unlike in the past where you can only pay tax physically in AABs of your RDO.

d. Joint filing of income tax for spouses

RR 4-2024 and EOPT emphasizes joint filing of income tax return of spouses, who are both self-employed, whether engaged in doing business or practice of profession. Unless it is impractical to do so, such as those spouses with different RDOs.

2. Removal of penalty on “filing in the wrong venue”

Filing in the wrong venue happens if for example it is mandatory to file eFPS but still choose to file manually or electronically outside of eFPS facility without any BIR advisory. If this happens prior to the passing of EOPT and RR 4-2024, the BIR will impose a penalty.

RR 4-2024 and EOPT Law repealed and removed this “filing in the wrong venue” penalty.

3. Individuals not required to file income tax return

In summary, the following are exempt from filing income tax return:

a. Purely employed individual who meets all the following criteria:

• Employed with only one employer for the taxable year.
• Qualified and included in the Certified List of Employees Qualified for Substituted Filing of Income Tax Return of the respective employer and duly received by the BIR.
• The amount of withholding tax deducted from the employee’s compensation is correctly computed and remitted to the BIR.

b. Individual whose sole income is covered by final withholding tax

c. Individual that is Filipino citizen with sole income deriving from abroad as Overseas Contract Worker (OCW) or Overseas Filipino Worker (OFW)

4. Removal of the additional requirement of deductibility of expenses under Section 34K of the tax code

EOPT Law and RR 4-2024 now removes the requirement of withholding tax for the deductibility of the expenses for income tax purposes.

However, the rule on withholding tax on the applicable expense will still be due and collected.

5. Amended timing of withholding tax

The withholding tax arises at the time of the sale is due and demandable.

On the part of the payor, withholding tax applies when the expense or asset is:

• recorded and accrued in the books, or
• with issuance of the seller’s invoice

6. Refund of excess creditable withholding tax

RR 4-2024 emphasized that any creditable withholding tax received by the taxpayer from its customer can be a tax credit in its income tax return.

Furthermore, any excess creditable withholding tax will be refunded according to the rules of Section 204 of the tax code.

This last item of RR 4-2024 was a bit confusing for me because it has been known in the past that any excess creditable withholding tax can be refunded. Adding it in RR 4-2024 is probably just to give emphasis the refund option.

I hope this article has been helpful for you. Please share it with anyone you think can benefit from reading this article.