Guidelines and Policies for the Monitoring of Service fees of Professionals

28 March 2014

The Commissioner of Internal Revenue (“CIR”) has issued Revenue Regulations (“RR”) No. 4-2014 dated 3 March 2014 for the purpose of monitoring fees charged by professionals, aid the BIR in conducting tax audit and boost revenue collection.

The salient provisions of the RR are as follows:

1. Self-employed professionals are required to:

  • Register and pay their annual registration fee (ARF) with the appropriate RDO/LTDO;
  • Submit an affidavit indicating the rates, the manner of billings and the factors considered in determining their service fees upon registration with the BIR, and every year thereafter, on or before 31 January of each year;
  • Register their books of accounts, official appointment books (containing the clients’ names and date/time of meeting), sales invoices, and official receipts before using them in any transaction; and

In cases when no professional fees are charged, to issue a BIR-registered receipt, duly acknowledged by the client, showing a discount of 100% as substantiation for the “pro-bono” service.

2. The submission of affidavit and the registration of books should be made by all existing and registered self-employed professionals within 30 days from the date of effectivity of these regulations.

3. Failure to comply shall be subject to the penalties provided for under the Tax Code.

The RR shall take effect after 15 days following publication in any newspaper of general circulation. It was published on 21 March 2014 in the Manila Bulletin.