The BIR has introduced optional filing and payment of monthly VAT returns using BIR Form No. 2550M for the first two months of the quarter. The Bureau clarified these new options for VAT filing and paying in their Revenue Memorandum Circular (RMC) 52-2023, released on May 10, 2023.
The memorandum is done following section 37 of the Tax Reform Acceleration and Inclusion (TRAIN) Law, which amends Section 114 (A) of the National Internal Revenue Code of 1997. Amendments to laws now state that beginning January 1, 2023, the filing and payment of VAT can now be done twenty-five (25) days following the close of each taxable quarter.
The updated provisions issued by the memorandum removed the mandate on the Monthly VAT Declaration (BIR Form. 2550M), meaning that VAT-registered taxpayers don’t need to file them, and instead can file or pay their requirements through the Quarterly VAT Return (BIR Form. 2550Q).
The RMC notes that some taxpayers request to use the Monthly Declaration form and that they be allowed to file and pay their VAT on a monthly basis. As such, both options for filing and paying their VAT requirements are accepted by the Bureau. However, those that choose to file their VAT returns monthly are still required to file the quarterly VAT return and pay the corresponding VAT liabilities as mandated through the Tax Code.
Guidelines for using the Monthly VAT Declaration (BIR Form. 2550M)
The memorandum clarifies that while the Philippine Tax Code has mandated the filing of VAT returns and payments of the corresponding VAT liabilities on a quarterly basis, taxpayers are still able to do the same on a monthly basis and still use the Monthly VAT Declaration (BIR Form. 2550M).
The RMC then states that the guidelines and procedures originally implemented in documents explaining the use of BIR Form No. 2550M, such as Revenue Regulation Numbers 16-2005, 6-2014, RMC 68-2005 and others, shall continue to apply.
The RMC concludes by explaining that any VAT-registered taxpayers who switch from a monthly basis tax payment (using BIR Form. 2550M) to a quarterly filing (using BIR Form. 2550Q) or vice versa, will not incur any penalties. However, the Bureau highlights that filing and payment of VAT through BIR Form No. 2550Q need to be submitted in the time stated by the Tax Code, which is twenty-five (25) days following the close of each taxable quarter. Furthermore, there are no more prescribed deadlines for the monthly filing and payment of VAT through BIR Form No. 2550M.