One major change that the BIR has implemented last year is releasing the new BIR FORM No. 1709 which businesses have to comply with this year, so, here’s what you need to know about this new form:
What is BIR Form No. 1709?
Last July 08, 2020, the BIR has issued Revenue Regulation No. 19-2020 which provides information about the new BIR Form 1709 replacing Form No. 1702H.
The BIR Form No. 1709 or the Related Party Transaction (RPT) Form is to be filed to ensure that proper disclosures of related party transactions are made and that these transactions have been conducted at arm’s length so as to protect the tax base. An entity’s financial statements shall contain the disclosures necessary to draw attention to the possibility that its financial position and profit or loss may have been affected by the existence of related parties and by transactions and outstanding balances, including commitments, with such parties.
Who Shall File?
The RPT Form is to be completed by Philippine taxpayers with related party transactions (RPTs) regardless of the amount and volume of transactions. Individuals who are considered related parties of a reporting company are also required to submit the RPT Form in their individual capacities.
The related parties and related party transactions are:
When and Where to File?
The RPT Form is required to be attached only to the Annual Income Tax Return.
For manual filers, the RPT Form and its required attachments must be submitted together with the AITR and other required attachments at the Large Taxpayers (LT) Division/Revenue District Office (RDO) where the taxpayer is registered, on or before the statutory due date.
For eFPS filers, the hard copy of RPT Form and its required attachments must be submitted manually and stamped “Received’ at the LT Division/RDO where the taxpayer is registered, within fifteen (15) days from the statutory due date or actual date of electronic filing of the AITR, whichever comes later.
Procedure and Guidelines for Filing BIR Form No. 1709
Penalty for Non-Filing
A penalty of not less than One thousand pesos (P1,000) but not more than Twenty-five thousand pesos (P25,000) shall be imposed for failure to file the RPT Form and its attachments due to reasonable cause and not to willful neglect pursuant to Section 250 of the Tax Code, to wit:
“SEC. 250. Failure to File Certain Information Returns. – In the case of each failure to file an information return, statement or list, or keep any record, or supply any information required by this Code or by the Commissioner on the date prescribed therefor, unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall, upon notice and demand by the Commissioner, be paid by the person failing to file, keep or supply the same, One thousand pesos (P1,000) for each failure: Provided, however, that the aggregate amount to be imposed for all such failures during a calendar year shall not exceed Twenty-five thousand pesos (P25,000).”
If you need any help with preparing and filing this BIR Form or any other accounting or tax compliance tasks, F&Q is here to support you! Contact us today by emailing firstname.lastname@example.org.