BIR Form 1709 and Transfer Pricing Documentation Submission in the Philippines
Revenue Regulation (RR) No. 19-2020 clarifies the submission of BIR form 1709 and all the required documents attached to it. Under the regulation, the new BIR form 1709 will be able to help BIR with transfer pricing risk assessment together with deciding whether or not an entity needs a thorough audit.
Who is covered by the BIR form 1709
There are several types of forms and documentary prerequisites that must be submitted in order for you to pay your taxes and run your business legally. Below are the taxpayers covered in the submission of BIR form 1709, together with the required attachments:
- Large taxpayers in the Philippines
- Taxpayers qualified for incentives, which include those who are receiving incentives from the Board of Investments (BOI), entities registered under PEZA or other economic zone incentive schemes, and establishments getting benefits from
- Income Tax Holidays (ITHs).
- Taxpayers who were unable to report net losses from the ongoing taxable year and the two previous years.
- A related party that has set foot in transactions with any taxpayers included in the categories mentioned above.
Transfer Pricing Documentation covered by BIR Form 1709
Upon submitting BIR form 1709, covered taxpayers must also supply the required information and documentation, such as a business overview or a functional profile of the business and industry.
In addition to that, under Revenue Regulation No. 19 of 2020, taxpayers are also required to provide transfer pricing documentation and other documentary prerequisites together with the BIR form 1709.
However, The transfer pricing documentation is only required for those taxpayers who meet the following standard:
- Taxpayers with yearly gross revenue for the applicable taxable period which exceeds ₱150,000,000 and the total of foreign and local related party transactions ₱90,000,000.
- The total value of sale goods must exceed ₱60,000,000 within the same tax year.
- The total value of service transactions, payment of interest, utilization of intangible goods, or other related party transactions must exceed ₱15,000,000 within the same tax year.
The submission of BIR 1709, including all required attachments, is relevant to business owners in order to operate legally. Failure to submit all required documents can result in a penalty of not less than ₱1,000 but not more than ₱25,000.
Streamline the Process of Submitting and Paying Your Taxes
Entrepreneurs must submit and pay their taxes annually to continue operating their businesses in the Philippines. The submission comes with paperwork such as forms and documentary prerequisites. If you find tax preparation exhausting, you may contact accounting firms to help you with tax filing procedures.
Confidently File and Submit Your Tax Documents
Filing documentary prerequisites for your annual taxes is an important process. Our team of experienced accountants can help you with your entity’s tax obligations.