Global City, 08 March 2011 – In what was considered as a deft and very considerate turn-around, taxpayers today welcomed the decision of the Bureau of Internal Revenue (BIR) to allow the filing of the Annual Information Return (AIR) or BIR Form No. 1705 on an optional basis, at least for taxable year 2010.
The BIR through Commissioner Kim S. Jacinto-Henares said that it will issue another Revenue Regulations to effect the said decision which was announced during the Large Taxpayers Service 2011 Tax Campaign Kick-off Program at the NBC Tent, Fort Bonifacio, Global City.
Henares said, “We are allowing the filing of the AIR on a voluntary basis for taxable year 2010. This will give affected taxpayers time to acquaint themselves with this new requirement and see how they can best effectively comply with the same. This will also allow the BIR to monitor its implementation on a pilot basis and make the necessary adjustments where needed.”
She added, “Starting taxable year 2011, the filing of the AIR will be mandatory.”
She disclosed that RR 2-2011 was issued precisely to address two (2) issues: 1) The non-inclusion in the list of top individual taxpayers of famous and wealthy personalities, many of whom earn income which are either subject to final withholding tax or exempt from tax; and 2) The impending government requirement of Income Tax Returns as basis for the granting of loans, licenses, franchises, and the like.
Under RR 2-2011, individuals, estates and trusts required by law to file an Income Tax Return (ITR) should file the said tax return together with the AIR. The AIR shall include income subjected to final withholding tax and exclusions from gross income.
Individuals who are not required to file a tax return or those qualified for substituted filing may, however, file a tax return for loan, travel and other purposes in which case they should also file the AIR.
Others not required to file an ITR but are required under the regulations to file an AIR only are: 1) pure compensation income earners whose annual taxable income derived from within the Philippines exceeds P500,000.00 tax and on which income the correct income tax has been correctly withheld; 2) individuals, estates and trusts whose sole income has been subjected to final withholding tax in excess of P125,000.00 annually, whether remitted or not to the BIR; and 3) individuals whose sole income is exempt where the aggregate amount exceeds P500,000.00 annually.
Pure compensation income earners who derive income from two or more employers are required to file an ITR together with the AIR.
The deadline for filing is April 15 each year for those filing the ITR (BIR Form No. 1700 or 1701) as well as the AIR and May 15 each year for those filing the AIR only. Those filing their returns electronically shall, in the meantime, submit in hard copies the e-filed ITR and the AIR within ten (10) days from the filing of the electronic return until such time that electronic filing of the AIR becomes available.