6 February 2014
The Commissioner of Internal Revenue (“CIR”) has issued Revenue Memorandum Order (“RMO”) No. 9-2014 dated 6 February 2014 to set guidelines in the processing of requests for rulings filed with the BIR-Law and Legislative Division.
The salient portions of the RMO are as follows:
1. “Tax Rulings” are defined as factual and circumstantial official positions of the BIR on inquiries of taxpayers who request clarification on certain provisions of the Tax Code, other laws, or their implementation, usually for the purpose of seeking tax exemptions.
2. The RMO identifies the following as “No-Ruling Areas”: (i) matters declared as “No-Ruling Areas” in Revenue Bulletin No. 1-2003, as amended by Revenue Bulletin No. 2-2003; (ii) non-compliance with any of the requirements for the filing of a ruling as described in the RMO; (iii) tax planning advice and “approval” of tax planning arrangements; and (iv) matters that can be determined through another process (i.e. appeal).
The Law and Legislative Division will also not issue a ruling in response to a request if (i) the taxpayer has directed a similar inquiry to another office of the Bureau; (ii) the same issue involving the same taxpayer or a related taxpayer is pending in a case in litigation; or (iii) the same issue involving the same taxpayer is subject of a pending investigation, on-going audit, administrative protest, claim for refund or issuance of tax credit certificate.
3. A ruling will not be issued on alternative plans of proposed transactions or on supposed situations, otherwise referred to as “hypothetical questions” under Revenue Bulletin No. 1-2003.
4. The letter request must be a sworn statement and must contain certain required information and affirmations.
Unless otherwise provided, all letter requests must be addressed to the Chief of Law and Legislative Division, BIR National Office Building, BIR Road, Quezon City.
5. In addition to the specific documentary requirements provided under the applicable revenue issuances, the request must be accompanied by “Certified True Copies” of documents material to the transaction and by “Special Power of Attorney” or “Authorization” in case filed by a representative.
Only certified true copies, not originals, each labeled alphabetically and attached to the request, must be submitted.
6. Requests with incomplete and insufficient documents will be immediately denied and communicated to the party while those with complete documents shall be issued a ruling affirming or denying the request. The CIR shall be the signing authority unless delegated to another official of the Bureau.
7. For a ruling to be valid, a taxpayer must have fully and accurately described the transaction. Rulings requested by other taxpayers may only be used as “useful information” and not as precedents.
8. The BIR shall not also issue a ruling involving local taxes, customs duties or other taxes, fees and charges not within the powers of the Bureau to assess and collect.
This RMO is effective immediately.