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REVENUE REGULATIONS NO. 8-
2012 issued on May 11, 2012 further
amends Revenue Regulations (RR)
No. 2-98, as last amended by RR
Nos. 5-2008 and 5-2011, relative to
the De Minimis Benefit, uniform and
clothing allowance not exceeding P
5,000 per annum, which is exempt
from Income Tax on compensation as
well as from fringe benefit tax.

REVENUE MEMORANDUM ORDER
NO. 12-2012 issued on May 16, 2012
prescribes the guidelines and proce-
dures in the implementation of the
Electronic Sales (eSales) Reporting
as provided under Revenue Regula-
tions (RR) No. 5-2005, as amended,
by taxpayers using Cash Register
Machines (CRM), Point of Sales Ma-
chines (POS) and other invoice/
receipt generating machines, and for
other purpose. All taxpayers using
CRMs, POS machines and other in-
voice/receipt generating machines
enrolled in the eSales System, with or
without sales transaction, are re-
quired to submit monthly sales report
per machine to the BIR through the
eSales System. The monthly sales
report shall contain the following in-
formation:
a. Machine Identification Number
(MIN);
b. Month and year of sales being
reported;
c. If the same machine is being
used for sales that are subject to VAT
(including VAT
exempt sales), and for sales that are
subject to other Percentage Taxes,
the breakdown
of sales must be provided as follows:
i. VATable Sales (net of VAT);
ii. VAT Zero-rated Sales;
iii. VAT exempt Sales;
iv. Sales subject to other Percentage
Taxes;

NOTE: This breakdown of sales is
required only when the same ma-
chine is capable of segregation; oth-
erwise, the gross monthly sales per
machine shall be the total or sum of
the recorded sales.
d. Serial Number of the last In-
voice/Receipt or Transaction Num-
ber issued for the month being re-
ported. Such monthly sales report per
machine shall be submitted on or be-
fore the 8th day of the month (for tax-
payers whose last digit of the 9-digit
TIN is even number) and 10th day of
the month (for taxpayers whose last
digit of the 9-digit TIN is odd number)
following the sales period.
All taxpayers using CRMs, POS ma-
chines and other invoice/receipt gen-
erating machines are required to en-
roll their authorized user in the
eSales System in order to access the
said system. A duly notarized letter
from the President/owner or any
authorized officer of the company
(single proprietorship) indicating the
authorized user using the required
format shall be submitted to the
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Large Taxpayers Assistance Division,
Excise Taxpayers Regulatory Divi-
sion or Large Taxpayers District Of-
fice (LTDO)/Revenue District Office
(RDO) where taxpayer is registered
prior to enrollment in the eSales Sys-
tem. Enrollment can be done by ei-
ther the head office or the branch us-
ing the machines. Only one (1) user
for the head office and one for each
branch shall be allowed to enroll in
the eSales System. However, they
may request for additional user sub-
ject to the approval of the Head
of the concerned Large Taxpayers
Office/RDO considering the taxpay-
ers policy on who will be submitting
the monthly sales report.
All machines enrolled in the eSales
System, with or without sales trans-
actions, shall be reported until such
time that the permit to use and Ma-
chine Identification Number (MIN)
have been cancelled. These include
the following:
(i) machines with request for cancel-
lation of the permit to use and the
MIN but are still pending with the con-
cerned Large Taxpayers Service
(LTS) Office/RDO as of the time of
sales reporting;
(ii) machines that are not operational
and defective but permit to use has
not yet been cancelled; and
(iii)machines that were registered as
stand-by or back-up units.
Sales reporting can be done using
either the online encoding or file up-
load method. The file format required
for the monthly sales report using the
file upload method can be download-
ed from the BIR web using the
eSales System. In case the eSales
System is unavailable on the dead-
line of submission of the monthly
sales report, the taxpayer must sub-
mit the monthly sales report in soft
copy (CD format) using the pre-
scribed format to the concerned LTS
Office/RDO following the proce-
dures prescribed in Annex C of
the Order on or before the 3rd
day following the deadline. In case
of multiple submissions or amend-
ments of the monthly sales report,
the most recent submission shall
be considered as the final monthly
sales report.

Amendments of monthly sales report
for a particular month can be done up
to 3 times. However, machines
whose monthly sales report have
been amended more than 3 times for
the same sales period shall be sub-
ject for validation/inspection by the
concerned LTS Office/RDO, provided
that no electronic Letter of Authority
(eLA)/Letter Notice (LN) has been
issued covering the said particular
month. Otherwise, the incident re-
port must be consolidated with the
ongoing audit/investigation covered
by the eLA/LN.
For every submission of the monthly
sales report, the eSales System will
assign a Sales Report Number (SRN)
to acknowledge the receipt of such
report by BIR. Submission of monthly
sales report can be done up to 11:59
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pm on due date. However, for this
purpose, the time of the BIR shall be
considered the official time in deter-
mining whether the taxpayer submit-
ted within the deadline. In case the
deadline falls on a non-working
day, the next working day shall
automatically be considered the due
date.

The Information Systems Operations
Service Data Center (ISOS DC)/
concerned Revenue Data Center
(RDC) generate the reports speci-
fied in the Order every 15th of the
month for submission to the con-
cerned LTS Offices/RDOs. ISOS DC/
RDC shall handle technical issues
and concerns raised by the taxpay-
ers, while operational issues shall be
handled by the concerned LTS Of-
fice/RDO. The Systems Operations
Division-Information Systems Opera-
tions Service (SOD-ISOS) shall gen-
erate the following reports every 15th
of the month for submission to the
Assistant Commissioner-LTS/
Regional Director, copy furnished
the Deputy Commissioner, Opera-
tions Group:

a. Summary Report of Compliance
per RDO by Region as of _______,
20__ (Annex L)
b. Sales Matching Report (Annex
M), copy furnished the concerned
LTS Office/RDO
All existing CRMs, POS machines
and other invoice/receipt generating
machines without MIN shall be re-
quired to be registered through the
Electronic Accreditation and Registra-
tion (eAccReg) System. Upon gener-
ation of the new permit to use, the
manually issued/old permit to use
shall be deemed revoked. Hence,
the permit to use sticker previously
issued should be surrendered to the
concerned LTS Office/RDO, which
shall be replaced with a new permit to
use sticker indicating the new permit
to use number and MIN. Any taxpay-
er found to be still using the old per-
mit to use which has been cancelled/
revoked shall be subject to the appli-
cable penalty. Cancellation of permit
to use shall be allowed under the fol-
lowing circumstances:

a. Retirement of machines due to:
i. Closure of business
ii. Change of hardware
b. Transfer of ownership/place of
use:
i. From one taxpayer to another tax-
payer
ii. From one branch to another
branch except roving machines
iii. Due to merger of companies with
respect to the absorbed company
(ies)
c. Erroneous registration of machine
with respect to the following:
i. TIN
ii. Branch Code
iii. Classification of POS Machine
d. Change in software or major up-
grade of software

The request for cancellation of permit
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to use shall be submitted by the large
taxpayer to the LTS Office having ju-
risdiction over its registered address,
or to the RDO having jurisdiction over
the address where the machine is lo-
cated for non-large taxpayer. Inspec-
tion of the machines of a large tax-
payer shall be handled by the con-
cerned LTS Office except outside
Metro Manila or RDO having juris-
diction over the address where the
machines are located for a non-
large taxpayer. For LTDO-Cebu,
branches of its taxpayers located out-
side the Cebu area shall be handled
by the concerned LTS Office/RDO
having jurisdiction over the ad-
dress where the machines are locat-
ed.
The corresponding Certificate of
Cancellation shall be issued ac-
cordingly by the concerned LTS Of-
fice or RDO. In cases where the rea-
son for cancellation of the permit is
due to change of hardware, the
taxpayer is required to request for
a BIR representative from the con-
cerned LTS Office/RDO where tax-
payer is registered to witness the dis-
posal of the machines.
Taxpayers who will be found not sub-
mitting the required monthly sales re-
port for 3 consecutive months per
machine shall be subjected to the fol-
lowing sanctions in addition to the
penalty imposed under RR No. 5-
2005:
1st Offense Reminder Letter
2nd Offense Machine Inspection/
Post Evaluation
3rd Offense Revocation of Permit to
Use/Cancellation of MIN
Moreover, payment of penalty does
not relieve the taxpayer from the sub-
mission of the monthly sales report;
otherwise, the issuance and enforce-
ment of Subpoena Duces Tecum
shall be made in strict compliance
with the procedures enunciated in
Revenue Memorandum Order (RMO)
No. 88-2010 and other applicable
revenue issuances and Taxpayers
Compliance Verification Drive
(TCVD) under RMO No. 3-2009 and
to other enforcement measures that
may be undertaken to compel taxpay-
er to fully comply with the Order.
During the transition period, the fol-
lowing guidelines shall be followed in
cleaning-up and updating the regis-
tration database:
a. Taxpayers using CRMs, POS ma-
chines and other invoice/receipt gen-
erating machines which are not regis-
tered with the BIR shall apply for reg-
istration/permit to use using the
eAccReg System.
b. Taxpayers must apply for the
cancellation of the permit to use
issued by the concerned LTS Of-
fice/RDO for CRMs, POS ma-
chines and other invoice/receipt
generating machines which have
been registered but are not being
used or have been retired as of the
effectivity of the required sales report-
ing.
c. RDO shall continue to process all
pending applications for cancellation
of permit to use filed by the taxpayer
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prior to the roll-out of the eSales Sys-
tem.
d. The concerned LTS Office/RDO
shall use the Cancel MIN Module in
the eSales System to cancel all ma-
chines that were issued permit to use
CRM/POS prior to the effectivity of
RR No. 11-2004 and were issued
MIN under the eSales System, where
an approval for cancellation of such
permit to use has been granted by
the concerned LTS Office/RDO. Such
must be done within 5 working days
upon receipt of such
approval for cancellation by the con-
cerned LTS Office/RDO.
e. Taxpayer who are using
handheld devices for the purpose
of acknowledging payments/
collections but were issued permit to
use CRM/POS and MIN shall request
for their cancellation with the con-
cerned LTS Office/RDO that has ju-
risdiction over such taxpayer. The
taxpayer shall apply for a permit to
use Special Purpose Machine (SPM)
as a replacement for the cancelled
permit to use sales machine. Accord-
ingly, any report made in the eSales
System prior to the cancellation of
such permit to use and MIN shall be
amended immediately.
The Order shall take effect on Janu-
ary 2012. However, for non-large tax-
payers the initial reporting for the
months of January to June shall
be on July 8 or 10, 2012, which-
ever is applicable.

REVENUE MEMORANDUM ORDER
NO. 13-2012 issued on May 16, 2012
prescribes the revised guidelines and
procedures in handling Letter Notices
(LNs) generated through Third- Party
Information (TPI) data matching with
tax returns. The Order covers the In-
come, Value-Added and/or Percent-
age Tax liabilities of individual and
corporate taxpayers who are issued
LNs based on the Reconciliation of
Listing for Enforcement System
(RELIEF), Bureau of Customs (BOC)
and Tax Reconciliation System (TRS)
TPI data matching programs.

Taxpayers with discrepancy on their
income, sales and/or purchases
(domestic or imported) shall be noti-
fied of such findings through the issu-
ance of an LN RELIEF-BOC-TRS LN,
together with the Details of Taxpay-
ers Customers/Suppliers Records
(DTCSR) and/or Details of Importa-
tions with Return Information Match-
ing (DIRIM) and Details of Withhold-
ing Agents/Payors and Payees/
Income Recipients Records
(DWAPR), shall be generated based
on the parameters determined and
discrepancy threshold set by the
Commissioner of Internal Revenue
(CIR) and to be deployed via the LN
portal facility. The LNs for any given
taxable year shall be handled by the
investigating office having jurisdiction
over the taxpayer. If there is an on-
going audit/investigation pursuant to
an electronic Letter of Authority (eLA)
prior to LN assignment, the Revenue
Officer (RO) handling the eLA shall
also be assigned the LN. The said LN
shall not be considered closed but
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shall be consolidated with the eLA.
The TPI reflected in the LN shall be
properly utilized and the extent of uti-
lization shall be included in the report
of investigation by the RO. The policy
of non- closure of the eLA without the
resolution of the LN shall be strictly
enforced.

If an eLA is terminated before an LN
is issued, the investigating office shall
request the tax docket from the As-
sessment Division (AD) or Adminis-
trative Division (AdminD), as the case
may be, for non-large taxpayers, and
Records Division for large taxpayers
and shall ascertain whether the dis-
crepancies reflected in the LN are in
the report of investigation. If discrep-
ancies are not included, the RO shall
pursue action on the LN based on the
procedures specified in the Order. If
the discrepancies are considered, the
RO shall recommend cancellation of
the LN and the tax docket shall con-
tain the LN, photocopies of the Mem-
orandum Audit Report, Working Pa-
pers showing reconciliation undertak-
en, BIR Form 0500 Series and other
applicable documentary attachments.
The deficiency Income, Value-Added
and/or Percentage Taxes shall be
computed using the formulas pre-
scribed in the Computation Sheet at-
tached in the Order (Annexes C, C-
1, C-2, C-3 and C-4).
Taxpayer shall be entitled to abate-
ment of surcharge, interest and com-
promise penalty provided he/she/it
pays the basic deficiency tax(es)
within 30 days from receipt of the LN.
The payment of deficiency taxes shall
be made using Payment Form (BIR
Form No. 0611-A).

Any payment of tax liabilities beyond
the 30-day period shall be assessed
with the corresponding surcharge (if
applicable), interest and compromise
penalty. In both cases, an
Agreement Form shall be executed
by the taxpayer or his/her/its duly au-
thorized representative/tax agent indi-
cating therein the amount and date
when the deficiency tax(es) shall be
paid.

Installment payment shall be allowed
as settlement of the tax deficiencies
arising from LN in case the total tax
liabilities exceed P 500,000.00, for
non-large taxpayers, or P 10 Million,
for large taxpayers. In this case, a
written request for installment pay-
ment of the basic tax due plus incre-
ments using the Application for In-
stallment Payment must be accom-
plished. The corresponding interest
on the basic tax due per installment
shall be computed up to the date of
payment as shown in the application.
In case of default of any installment
payment, the remaining balance of
basic tax plus the increments shall
become due and demandable imme-
diately without prior notice to taxpay-
er.

The Revenue District Officer (RDO)/
Chief, LT Audit Division shall recom-
mend to the Regional Director (RD)/
Assistant Commissioner LTS (ACIR
-LTS) the issuance of an issue-
based eLA under certain situations as
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required under the Order. The settle-
ment and payment of the deficiency
tax(es) under an LN or issue-based
eLA shall not preclude the BIR from
issuing an eLA covering the compre-
hensive audit of a taxpayers tax lia-
bilities, if warranted. However, any
payment of deficiency tax(es) shall be
credited against any assessment that
may be made by the investigating of-
fice pursuant to an eLA provided the
discrepancies disclosed by said audit
are of the same nature as the dis-
crepancies reflected in the LN. The
taxpayer who fails to settle his/her/its
tax liabilities resulting from LN dis-
crepancy shall be issued any or a
combination of the following actions:

a) Issuance of eLA under certain situ-
ations and/or Preliminary Assess-
ment Notice (PAN)/Final Assessment
Notice (FAN) in accordance with the
provisions of Revenue Regulations
No. 12-99;

b) Recommend the imposition of ad-
ministrative sanction of suspension
and temporary closure business es-
tablishment in accordance with the
provisions of RMO No. 3-
2009 (Oplan Kandado), if the under-
declaration is 30% or more;

c) Issuance and enforcement of the
Subpoena Duces Tecum (SDT) in
strict compliance with procedure
enunciated in RMO No. 88-2010 and
other applicable pertinentrevenue is-
suances. After compliance with pro-
cedures on the issuance and enforce-
ment of the SDT, docket shall be en-
dorsed to the Office of the Regional
Director (ORD)/Office of Assistant
Commissioner LTS (OACIR-LTS),
through the AD/concerned OHREA-
LTS, for issuance of PAN/FAN in ac-
cordance with the provisions of Reve-
nue Memorandum Circular No. 23-
2000.

For LN originally assigned (with eLAs
[either the investigation is on-going or
terminated] or without eLAs issued)
or assumed (referred to another RO),
the RO assigned shall resolve the LN
discrepancy within 30 days from re-
ceipt of original assignment/referral.
The RD/ACIR-LTS shall direct the
ROs to act without delay on the reso-
lution of the LN discrepancy.

After the lapse of the 30-day period
and there is no resolution or action
taken, except when RO performs oth-
er necessary procedures as herein
required and/or recommends imposi-
tion of administrative sanction of sus-
pension and temporary closure of
business establishment under RMO
No. 3-2009 or recommends the issu-
ance and enforcement of SDT under
RMO No. 88- 2010 and other applica-
ble pertinent revenue issuances, the
RDO/Chief, LT Audit Division shall
submit the list of taxpayers/LNs and
the names of the ROs to the ORD/
OACIR-LTS for transmittal to the Of-
fice of the Commissioner of Internal
Revenue (OCIR).

The CIR shall refer the lists of the
taxpayers/LN to the Revalida Com-
mittee for appropriate action and the
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names of the erring ROs to Inspec-
tion Service for the issuance of a
Show-Cause Order. Appropriate
sanctions against erring ROs shall be
imposed, if warranted. Activities and
accomplishments of the investigating
offices relative to the Order shall be
monitored by the OCIR and the con-
cerned offices, i.e., Office of Deputy
Commissioner Operations Group,
Audit Information Tax Exemption and
Incentives Division (AITEID), etc.,
based on key performance indicator.
The procedures specified in the Or-
der shall be used in the resolution of
issues on 2009 and 2010 LNs issued
prior to the effectivity of this Order, if
applicable. The 2011 LNs shall use
RELIEF-BOC LN and TRS LN, to-
gether with DTCSR and/or DIRIM,
and DWAPR until such time that the
new template for the consolidated LN
(RELIEF-BOC-TRS LN) is in place. If
a taxpayer is issued RELIEF-BOC LN
and TRS LN, both LNs shall be han-
dled by one and the same RO.




REVE-
NUE MEMORANDUM CIRCULAR
NO. 21,2012 is-
sued on May 3, 2012 circulariz-
es the full text of Executive Order No.
68 entitled Monetization Program of
Outstanding Value- Added Tax
(VAT) Tax Credit Certificates
(TCCs).

A VAT TCC Monetization Program is
adopted in order to give qualified VAT
- registered taxpayers the cash equiv-
alent of their outstanding TCCs under
the following options:

a. Collect in advance from a trustee
bank a discounted cash value of their
TCCs; or

b. Collect the full cash value of the
TCCs upon certain maturity date, to
be determined by the Bureau of
Internal Revenue (BIR) or the Bu-
reau of Customs (BOC), as the case
may be, pursuant to the implementing
rules and regulations that will be is-
sued to implement this Executive Or-
der.

The VAT TCC Monetization Program
shall cover outstanding VAT TCCs
issued pursuant to Section 112 (A) of
RA 8424, as amended, and outstand-
ing VAT component of drawback
TCCs issued pursuant to Section 106
(e) of the TCCP, as amended.

The VAT TCC Monetization Program
will be spread over a five-year period
from 2012 to 2016. The funding re-
quirement for this purpose shall be
included in the National Expenditure
Program (NEP) for the said years.
The DOF shall direct the BIR and the
BOC to verify the outstanding VAT
TCCs and, subject to existing laws,
rules and regulations, perform the fol-
lowing functions:
i. Provide the confirmation letter of
the national government to
acknowledge that the outstanding
VAT TCCs constitute an obligation of
the Republic of the Philippines.
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ii. Favorably endorse to the national
government agency concerned or to
the Bangko Sentral ng Pilipinas
(BSP), as the case may be, the appli-
cation to secure the necessary fi-
nancial features required in the
issuance of investment certificates to
improve the net proceeds of the ben-
eficiaries.
iii. Make arrangements with trustee
bank on the requirements for the
opening of a special account; and
iv. Make available the facilities of
the Bureau of Treasury (BTr), includ-
ing, but not limited to, Registry of
Scripless Securities, the Automated
Debt Auction Processing System,
and such other facilities as may
be required for the auctioning pro-
cess in the implementation of the
VAT TCC Monetization Program.
The BIR or the BOC shall issue the
Notice of Payment Schedule to VAT
TCC holders upon verification of the
outstanding VAT TCCs. The DBM,
DOF, BIR and BOC shall jointly issue
the IRRs on the VAT TCC Monetiza-
tion Program.
Beginning 2012, the BIR and the
BOC shall no longer issue TCCs for
VAT refund, unless applied for by the
VAT taxpayer, pursuant to Section
112 (A) of RA 8424, as amended,
and Section 106(e) of the TCCP, as
amended.

REVENUE MEMORANDUM CIRCU-
LAR NO. 22-2012 issued on May 7,
2012 clarifies the implementation of
Revenue Regulations No. 5-2012, to
wit:
a. All BIR Rulings issued prior to Jan.
1, 1998 are not to be used as prece-
dent by any taxpayer as a basis to
secure rulings for themselves for cur-
rent business transaction/s or in sup-
port of their position against any as-
sessment.
b. All BIR Rulings issued prior to Jan.
1, 1998 are not to be used by any
BIR action lawyer in issuing new rul-
ings for request for rulings involving
current business transaction/s.
c. However, BIR Rulings issued prior
to Jan. 1, 1998 remains to be valid
but only:
i. to the taxpayer who was
issued the ruling; and
ii. Covering the specific
transaction/s which is the subject of
the same ruling.
d. BIR Rulings issued prior to Jan. 1,
1998 shall remain valid as mentioned
above, unless expressly notified of its
revocation or unless the legal basis in
law for such issuance has already
been repealed/amended in the cur-
rent Tax Code.


REVENUE MEMORANDUM CIRCU-
LAR NO. 24-2012 issued on May 21,
2012 clarifies the issue on the
maintenance of Official Register
Books (ORBs) on tax-paid petroleum
products stored on formerly bonded
storage facilities. Under previously
issued revenue issuances and per-
mits, certain storage facilities and/or
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terminals, including the blending facil-
ities located therein for the manufac-
ture of lubricating oils and greases
owned and operated by the oil com-
panies, were required to maintain
ORBs and to submit, on a regular ba-
sis, the transcripts sheets to the BIR.

However, subsequent issuance of
certain tax laws and Revenue Regu-
lations (RR) such as Republic Act No.
8424, imposing Excise Tax on the
major raw materials for lubricating
oils and grease effectively rendering
the said finished products no longer
subject to Excise Tax, as well as the
promulgation of RR No. 8- 2006, in-
troducing the Product Replenish-
ment scheme which effectively un-
bounded formerly bonded storage
facilities, seemed to have created the
impression that the maintenance of
ORB and submission of the tran-
scripts sheets While taxes on prod-
ucts stored in the facilities may have
been paid already, or is subject to P
0.00 rate, there is still a need to en-
sure that taxes on all products stored
within and handled by the facilities
are properly paid in order to pro-
tect the revenues due to the gov-
ernment. Considering that adminis-
trative requirements are duly pre-
scribed by revenue issuances and
permits and remained in effect, as no
revoking issuance has been issued,
continued compliance thereto should
be strictly observed by concerned
taxpayers.

Accordingly, the maintenance of
ORBs and submission of transcripts
sheets thereof is strictly enjoined
from the concerned oil companies.
Revenue officials and employees
tasked with the monitoring of these
facilities are likewise enjoined to re-
quire the submission of the ORBs
and the transcript sheets thereto on
the preceding three (3) years.


10
JLs Corner

Thou shalt not be a victim.
Thou shalt not be a perpe-
trator. Above all, thou
shalt not be a bystander.

Holocaust Museum, Washington, DC
V o l u m e I V I s s u e N o . 5 M A Y 2012
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