File Your Annual Information Returns Right – Discussion on Alphalist

You must be trying to beat the deadline of filing for the Annual Information Returns (BIR Form No. 1604CF/1604E) and Monthly Remittance Returns (BIR Form No. 1601C).  Required attachment to these are alphabetical list of employees and list of payees on income payments subject to creditable and final withholding taxes.  What are the things you should consider?

The Bureau of Internal Revenue issued Revenue Regulations No. 1-2014, Amending the Provisions of Revenue Regulations (RR) No. 2-98, as Further Amended by RR No. 10-2008, Specifically on the Submission of Alphabetical List of Employees/Payees of Income Payments.  The main amendments are as follows:

  • All withholding agents shall, regardless of the number of employees and payees,  submit an alphabetical list of employees and list of payees
  • Submission shall be made thru (1) attachment in Electronic Filing and Payment System (EFPS); (2) Electronic Submission at esubmission@bir.gov.ph and; (3) Electronic Mail (email) at dedicated BIR addresses using the prescribed CSV data file format
  • In cases where withholding agent has no own internet facility, alphalists may be electronically mailed (e-mail) thru the e-lounge facility of the nearest revenue district office or revenue region of the BIR
  • Alphalist where income payments and taxes withheld are lumped into one single amount are not allowed
  • Alphalist that does not conform with the prescribed format shall be deemed not as received and shall not qualify as a deductible expense for income tax purposes

  • Manual submission of the alphabetical lists containing less than ten (10) employees/payees by withholding agents shall be immediately discontinued beginning January 31, 2014 and March 1, 2014 (BIR Form No. 1604CF and BIR No. 1604E, respectively)

The Amendments

The pertinent provisions of Section 2.83.3 of Revenue Regulations No. 10-2008 is hereby further amended and shall be read as follows:

Section 2.83.3 Requirement for list of payees – All withholding agents shall, regardless of the number of employees and payees, whether the employees/payees are exempt or not, submit an alphabetical list of employees and list of payees on income payments subject to creditable and final withholding taxes which are required to be attached as integral part of the Annual Information Returns (BIR Form No. 1604CF/1604E) and Monthly Remittance Returns (BIR Form No. 1601C, etc.), under the following modes:

(1)  As attachment in the Electronic Filing and Payment System (eFPS);

(2) Through Electronic Submission using the BIR’s website address at esubmission@bir.gov.ph; and

(3) Through Electronic Mail (email) at dedicated BIR addresses using the prescribed CSV data file format, the details of which shall be issued in a separate revenue issuance.”

“In cases where any withholding agent does not have its own internet facility or unavailability of commercial establishments with internet connection within the location of the withholding agent, the alphalist prescribed herein may be electronically mailed (e-mail) thru the e-lounge facility of the nearest revenue district office or revenue region of the BIR.”

“The submission of the herein prescribed alphalist where the income payments and taxes withheld are lumped into one single amount (e.g. “Various employees”, “Various payees”, “PCD nominees”, “Others”, etc.) shall not be allowed. The submission thereof, including any alphalist that that does not conform with the prescribed format thereby resulting to the unsuccessful uploading into the BIR system shall be deemed not as received and shall not qualify as a deductible expense for income tax purposes.”

“Accordingly, the manual submission of the alphabetical lists containing less than ten (10) employees/payees by withholding agents under Annual Information Returns BIR Form No. 1604CF and BIR No. 1604E shall be immediately discontinued beginning January 31, 2014 and March 1, 2014, respectively, and every year thereafter.”

The Old Provisions

Section 2.83.3 Requirement for list of payees – In addition to the manually prepared alphabetical list of employees and list of payees and income payments subject to creditable and final withholding taxes which are required to be attached as integral part of the Annual Information Returns (BIR Form No. 1604CF/ 1604E), Monthly Remittance Returns (BIR Form No. 1601C etc.), the withholding agent may submit soft copy in 3.5- inch floppy diskettes/CD or email: esubmission@bir.gov.ph, containing the said alphalists.

However, taxpayers, whose number of employees or income payees are ten (10) or more, are mandatorily required to submit the said lists in 3.5-inch floppy diskettes/CD or email: esubmission@bir.gov.ph using the existing CSV data file format, together with the manually prepared alphabetical list. In order to comply with this format, the withholding agents shall have the option to use any of the following:

  1. Excel format provided under Revenue Regulations No. 7-2000, as amended, following the technical specifications required by the BIR;
  2. Their own extract program that shall meet the technical specifications required by the BIR; or
  3. Data Entry Module using Visual FoxPro that will be available upon request or by downloading from the BIR’s web site at http://www.bir.gov.ph with the corresponding job aid.

For those who would choose either option 1 or 2, such taxpayers shall use a validation module developed by the BIR, which can be downloaded from the BIR website.

In any case, the withholding agents are required to save the same to a secondary storage as back up for a period of three (3) years from submission of the diskette, as aforementioned, for future reference.

For withholding agents classified as large taxpayers and excise taxpayers falling within the jurisdiction of the Large Taxpayers Service and/or Large Taxpayers District Office, the Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes (BIR Form No. 1604-CF) and the Annual Information Return of Creditable Income Taxes Withheld (Expanded)/ Income Payments Exempt from Withholding Tax (BIR Form No. 1604-E) shall be submitted to the Large Taxpayers Assistance Division, Large Taxpayers District Offices or Excise Taxpayers Assistance Division, as the case may be. For other withholding agents, the aforesaid annual returns shall be submitted to their respective Revenue District Offices. BIR Form No. 1604-CF shall be submitted on or before January 31 of the succeeding year while BIR Form No. 1604-E shall be filed on or before March 1 of the following year. Only diskettes/CD/email: esubmission@bir.gov.ph readable and virus free files upon submission shall be considered as duly filed “Alphabetical List of Employees/ Payees” by the employer. Violation hereof, shall be a ground for the mandatory audit of violator’s income tax liabilities (including withholding tax). Diskettes/CDs must be uploaded by the abovementioned offices within fifteen (15) days from receipt.

The manually prepared (hard copy for below 10 employees/payees) alphabetical list of employee shall be filed in triplicate copies (two copies for the BIR) to be stamped “received” by the BIR-Large Taxpayers Assistance Division, Large Taxpayers District Office or the Excise Taxpayers Assistance Division, or the Revenue District Office where the payor/employer is registered as Withholding Agent. Manually filed alphalists must be encoded and uploaded by the abovementioned offices within thirty (30) days from receipt.

Dowloads

Revenue Regulations No. 1-2014

Check your compliance.  Tell us what you think! :)

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Disclaimer: Opinions expressed in this article are that of the author and information provided are for general conceptual guidance for public information and are not substitute for expert advice. Contact support@philcpa.org for more information and if you want to avail professional services. Find us on Facebook!


Orlando Calundan is a CPA who has exposures in FS audit of entities in various industries such as real estate, food/restaurants, manufacturing, service organizations and BPOs, automotive, holding/investment companies and more. He also has exposure on internal audit engagements.


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