BIG CHANGES of BIR VAT Returns
Generally, VAT-registered taxpayers are required to file BIR Forms No. 2550M and 2550Q to comply with the filing and payment, if any, of VAT in the Philippines. However, on January 1, 2018, R.A. No. 10963, otherwise known as TRAIN Law, was passed into law which amends certain provisions of the 1997 National Internal Revenue Code, as amended.
One amendatory provision is the removal of the filing monthly of BIR Form No. 2550M effective January 1, 2023. Hence, on January 2023, the BIR issued RMC No. 5-2023 to inform the taxpaying public and others concerned that beginning January 1, 2023, VAT-registered taxpayers are no longer required to file BIR Form No. 2550M but should file instead Quarterly VAT Return using BIR Form No. 2550Q within twenty-five (25) days following the close of each taxable quarter. For some taxpayers, this new change in the filing of VAT returns is a sigh of relief, as filing monthly of VAT returns is consuming time and resources.
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Unexpectedly, on May 2023, the BIR issued RMC No. 52-2023 allowing the optional filing of this BIR Form No. 2550M without penalties. In the said memorandum, the BIR also said that if the taxpayers choose to file VAT returns monthly, VAT-registered taxpayers are still required to file BIR Form No. 2550Q and pay the corresponding VAT, if any. Further, certain administrative revenue issuances shall continue to apply regarding the optional filing of BIR Form No. 2550M. Thus, whether you file BIR Form No. 2550M monthly or not beginning January 1, 2023, you are still required to file BIR Form No. 2550Q quarterly and pay the VAT due/payable, if any.
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Availing of optional filing of VAT returns using BIR Form No. 2550M is troublesome.
First, filing tax returns consumes time and resources. If you will opt to file BIR Forms No. 2550M, you will need to spend time determining and reporting sales to compute VAT Output Tax. And do not forget your purchases as sources of your VAT Input Tax to compute your VAT Tax Due/Payable. Make sure to check your sales and purchase records regularly every month for the sake of filing this VAT return.
Second, you will need manpower, papers, internet, printer, and ink, among others, to file and print a hard copy of this VAT return BIR Form Form No. 2550M every month. Also, do not forget the retention period of 10 years of these VAT returns under RR 17-2013 issued by the BIR. Good luck!
Third, if with payment, you will have to use your hard-earned money to pay the monthly VAT payable, money that can be used in the operations of your business to give you more profits as much as possible.
Finally, while it is true that optional monthly filing of BIR Form No. 2550M has no corresponding penalties as clearly stated in the RMC 52-2023, this is not without consequences. Remember that this VAT return is signed under perjury which is punishable under the Revised Penal Code. In other words, possible jail time. Moreover, it must be in accordance with the provisions of the Tax Code, as amended. This means that any deviation from its provisions, including related BIR revenue issuances, will slap the taxpayers with severe penalties.
In conclusion, taxpayers will not benefit from the optional monthly filing of BIR Form No. 2550M. Worst, it may hurt back the taxpayers as explained earlier. So, do you still want to avail optional filing of BIR Form No. 2550M? It’s your decision!
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Learn more about How to VAT Bookkeeping
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