Background File and Pay Anywhere The threshold for mandatory issuance of invoices is increased to

P 500, which shall be adjusted to its present value every 3 years

Republic Act (RA) No. 11976, otherwise known as the “Ease of Paying The EOPT Act now allows taxpayers to file their tax returns and pay
based on the Consumer Price Index, as published by the Philippine
Taxes (EOPT) Act”, was signed into law on January 5, 2024 by their taxes, either electronically or manually, with any Authorized
Statistics Authority (PSA).
President Ferdinand R. Marcos, Jr., together with his VETO message. Agent Bank, Revenue District Office (through its Revenue Collection
It was published in the Official Gazette on January 7, 2024 and took Officers), or Authorized Tax Software Provider. This gives taxpayers In case of failure of the VAT-registered person to provide complete
effect on January 22, 2024 or 15 days from its publication in the the flexibility in filing and paying their taxes anywhere without worries information in the invoice, the issuer shall be liable for non-
Official Gazette. of incurring administrative penalties for filing at the wrong venue. compliance. However, the VAT shall still be allowed to be used as
input tax credit on the part of the purchaser if the lacking information
The law aims to simplify tax filings, particularly for those classified
do not pertain to the following:
as Micro and Small Taxpayers, by introducing the file-and-pay
Ease of Registration a. Amount of sales;
anywhere system and allowing most of the tax processes to be done
b. Amount of VAT;
online. It also included the shift to an invoice system to improve the Registration facilities shall be made available to all taxpayers
c. Name and TIN of both the purchaser and issuer/seller;
registration process as well as to accelerate the processing of VAT including those not residing in the Philippines. The Annual
d. Description of goods or nature of services; and
refunds. The following are the significant amendments to the Tax Registration Fee of P 500 was also removed under the EOPT Act.
e. Date of the transaction.
Code brought about by the EOPT Act: This provides taxpayers engaged in business, especially Micro
and Small Taxpayers, with immediate financial relief by reducing
their administrative expenses. Furthermore, the registration of
Value-Added Tax (VAT)
Classification of Taxpayers taxpayers shall be cancelled or transferred upon the mere filing
of an application for cancellation/transfer with the RDO where the Under the EOPT Act, the rule on the VAT treatment of sales of goods
taxpayer is registered. and services is harmonized, thereby requiring the issuance of sales
Classification Threshold invoice for both. The VAT invoice is the sole supporting document
Micro Taxpayers With Gross Sales of less than P 3,000,000 required in declaring output taxes and claiming input taxes. In
addition, the “gross sales” shall now be the sole basis for the sale of
Small Taxpayers With Gross Sales of P 3,000,000 but less Deductions from Gross Income
goods or properties, sale of services, and use or lease of properties.
than P 20,000,000 The withholding of taxes as a requirement for deductibility expenses This will align the accrual basis of accounting for both Income Tax
Medium Taxpayers With Gross Sales of P 20,000,000 but (per Section 34(K) of the Tax Code) has been repealed. This means and VAT.
less than P 1,000,000,000 that non-withholding of taxes in certain payments will no longer be
The EOPT Act also mandates that the P 3,000,000 VAT threshold
Large Taxpayers With Gross Sales of P 1,000,000,000 and a ground for the disallowance of claims for deductible expenses.
shall be adjusted every 3 years based on the Consumer Price Index,
above as published by the PSA.

Simplified Timing of Withholding

Special Concessions for Micro Under the EOPT Act, the obligation to deduct and withhold the tax Risk-Based Classification of VAT Refund
and Small Taxpayers arises at the time the income has become payable. This eliminates VAT refund claims shall be classified into low-, medium-, and high-
Micro and Small Taxpayers shall enjoy the following special the need for the payor to consider when the obligation becomes due, risk based on the amount of VAT refund claim, tax compliance
concessions under the EOPT Act: demandable or legally enforceable. Instead, it focuses on the more history, and frequency of filing VAT refund claims, among others.
• Simplified Income Tax Return - two (2) pages straightforward concept of when the income has become payable. Medium- and high-risk claims shall be subject to audit and other
• Reduced rate of 10% for civil penalties under Section 248 of verification processes. Low-risk claims are not subject to audit and
the Tax Code, as amended other verification processes, which will result in faster resolution of
• 50% reduction on the interest imposed under Section 249 of Invoicing Requirements applications for refund of creditable input taxes.
the Tax Code, as amended Previously, taxpayers’ claim for deductions and VAT credit or
• Reduced fine of P 500 as penalty for failure to file certain refund have been disallowed for non-compliance with invoicing
information under Section 250 of the Tax Code, as amended requirements, particularly with the “business style.” Under the EOPT
• Reduced compromise penalty rate of 50% for violations of Act, “business style” has been removed as a mandatory information
Section 113, 237 and 238 of the Tax Code, as amended to be contained in the invoice.
Output VAT on Uncollected Receivables Other Changes in the Tax Code BUREAU of INTERNAL REVENUE

Output VAT pertaining to uncollected receivables may be deducted 1. Removal of “wrong venue” penalty in Sec. 248 of the Tax Code
on the next quarter after the lapse of the agreed upon period to 2. Codification of “filing of return” and “payment of tax”
pay, provided that the seller has fully paid the VAT on the transaction 3. Rules on claim for refund due to dissolution of business
and the VAT component of the uncollected receivables has not been
claimed as an allowable deduction. In case of recovery of uncollected
receivables, the output VAT pertaining thereto shall be added to the Digitalization of BIR Services
output VAT of the taxpayer during the period of recovery. In order to improve the performance and efficiency in the delivery
of its services, the BIR is mandated to adopt an integrated

Tax Refund of Erroneously Paid Taxes

digitalization strategy by providing automated end-to end solutions
for the benefit of taxpayers. Salient Features of
The Tax Code currently does not prescribe a period within which the
Commissioner must process and decide on claims for erroneously
EOPT and Digitalization Roadmap
Ease of
Paying Taxes
paid taxes. The amendment introduced by the EOPT Act fixes the
period to decide applications for refund of erroneously paid taxes to The BIR is mandated to develop an EOPT and Digitalization Roadmap
within 180 days from the submission of complete documents. This to ensure ease of compliance of tax laws, rules and regulations,
ensures that taxpayers’ claim for refund of erroneously paid taxes such as the adoption of simplified tax returns, streamlining of tax
are resolved immediately. processes, reduction of tax or documentary requirements, and
digitalization of BIR services.

Clarification on Certain Provisions

of the Tax Code Act
The EOPT Act institutionalizes existing policies in the Tax Code by (Republic Act No. 11976)
providing clear provisions on the following:
1. Filing of Returns by OFW - Exemption from filing of Income Tax
Returns for OFWs and OCWs on income solely derived from
abroad.
2. Authority to Print - A clear provision that the issuance of
Authority to Print (ATP) shall be free of charge.

Scan the QR code to know more about the EOPT Act

Preservation of Books of Accounts or access www.bir.gov.ph.
Period for preservation of taxpayer’s books of accounts and other
For queries/clarifications on the EOPT Act and
accounting records shall be for 5-years reckoned from the day its implementing Revenue Regulations,
following the deadline for filing a return, or if filed after the deadline, please e-mail eopt@bir.gov.ph.
from the date of the filing of the returns, for the taxable year when
the last entry was made in the books of accounts.

Publication of All Tax-Related Provisions

All tax-related information required to be published pursuant to Sa Tamang Buwis,
Pag-asenso‘y Mabilis
any law, rules, and regulations may be published electronically in
the Official Gazette, or the BIR’s official website. Thus, all matters
requiring publication relating to taxpayers may now be found at the birgovph birgovphl (02) 8538-3200
BIR website (www.bir.gov.ph).