Revenue Regulations 11-2013
Filing or Submission of Hard Copy of the Certificate of Compensation Payment/Tax Withheld (BIR Form 2316) Covering Employees who are Qualified for Substituted filing.
What is meant by Employees Qualified for Substituted filing?
These are the employees receiving purely compensation income from one employer for one taxable year whose tax due is equal to tax withheld and an individual-payee whose compensation income is subject to FWT (final withholding tax) .They shall no longer file an income tax return since BIR form No. 1604-CF shall be considered as a substituted return filed by the employer. The BIR Form No. 2316 duly certified by both employee and employer shall serve the same purpose as if the BIR Form No. 1700(Form use for those who are earning purely compensation income) had been filed.
The BIR FORM 2316 is NOW NEEDED TO SUBMIT TO THE BIR
- The BIR Form 2316 previously serves as a Certificate of Compensation Payment/Tax Withheld for the purposes of personal file of the employees covered by substituted filing, is not only limited as a proof of financial capacity whenever loan application, credit card application or for the purpose of availing tax credit in the employees home country.
- The employer-withholding agent requires to not only furnish the employee the original copy of BIR Form No. 2316 but also file/submit to the BIR the duplicate copy not later than February 28 following close of the calendar year.
What if I do not submit the BIR Form 2316 to the BIR?
You will have to pay P 1,000 for each failure of submission of the BIR Form 2316 but with a maximum threshold of up to P 25,000.00, provided however that failure is due to reasonable cause not to willful neglect.
What if I do not submit the BIR Form 2316 for two consecutive years?
TECHNICALLY the law says in the RR 11-2013:
“However, any employer/withholding agent, including the government or any of its political subdivisions and government owned and controlled corporations, who/which fails to comply with the above filing/submission of BIR Form 2316 within the time required by this Regulations for two consecutive years may be dealt with in accordance with Section 255 which provides in part that “ “Any person required under this Code or by rules and regulations promulgated thereunder to pay any tax, make any return, keep any record, or supply correct and accurate information, who wilfully fails to pay such tax, make such return, keep such record, or supply such correct and accurate information, or withhold or remit taxes withheld, or refundexcess taxes withheld on compensation, at the time or times required by law or rules and regulations shall, in addition to other penalties provided by law, upon conviction thereof, be punished by a fine of not less than Ten Thousand Pesos (P10,000.00) and suffer imprisonment of not less than one (1) year but not more than ten (10) years.”
(Don’t get intimidated by the law scroll down for alternative)
You will have to pay P 1,000 for each BIR Form No. 2316 not filed WITHOUT THE BENEFIT of maximum threshold amounting to P 25,000 as a compromise.
TIP: Just follow what is practical and convenient, I mean these are the rules but we have a mind for judgment right?
REMINDER: The employer-withholding agent and employees are required to retain copies of the duly signed BIR Form No. 2316 for a period of three (3) years as required under the Tax Code.