Tax Alert No. 17 [Revenue Regulations (RR) No. 5-2023 dated 7 March 2023]

Amending Revenue Regulations No. 5-2021 on the Requirements in Availing the Income Tax Exemption of Foreign-Sourced Dividends Received by a Domestic Corporation

RR No. 5-2023 has been issued to amend certain provisions of RR No. 5-2021 relative to the requirements in availing income tax exemption of foreign-sourced dividends by a domestic corporation.

A domestic corporation availing of income tax exemption pursuant to Section 5 (A),(B) and (C) must comply with the following requirements:

1. Attach a “Sworn Statement” (Annex A) to the Annual Income Tax Return (AITR) for the taxable year in which the foreign-sourced dividends were received; and 
   
2. Attach a “Sworn Declaration” (Annex B) to the AITR for the year immediately following the year of receipt of the foreign-sourced dividends.
   

In case of partial or non-utilization of the foreign-sourced dividends, the domestic corporation shall pay the corresponding income tax due thereon, including penalties, by amending the AITR for the year of receipt of such dividends. In the event that the domestic corporation is barred from amending the return due to an existing audit, the income tax shall be paid using payment form (BIR Form No. 0605). 

You may access the full version of this Circular and the corresponding annexes through the BIR website.