SanTax Claus is in town

(Conclusion)

The ’Privilege –Store Operator‘ on the other hand, refers to the person or entity sub-leasing from the ’exhibitor‘ or ’organizer‘ a space upon which privilege stores are erected for the purpose of selling goods or services during the entire duration of the lease contract.

Some of the more significant points of the regulations pertain to the obligations of the Exhibitor, organizer and operator. Some of these are:

Exhibitor:

1. Post in a conspicuous place the Certificate of Registration (COR) of the Organizer. If not registered, then he must register with the BIR at least 15 days before the start of the privilege store’s activity and the same will be valid within the calendar year.

2. Deduct and Withhold the expanded withholding tax on lease payments to the lessor of real property at the rate of five percent of the gross amount (unless later amended). For those filing through the Electronic Filing and Payment System (EFPS), the regulations pertaining to EFPS shall apply. If the exhibitor or organizer is the owner of the leased property, this provision does not apply.

3. Inform the Revenue District Office (RDO) about the data pertaining to the participants of the event and the duration and location of the event.

4. Ensure the presentation of the TIN, the remittance of actual withholding tax liability and the advance Percentage Tax by the privilege store operator prior to the actual operation or to the start of the month to which the advance tax payment shall be applied.

The privilege store operator, on the other hand, is required to deduct and withhold the expanded withholding tax on rental payments for subleased spaces at the rate prescribed under RR 2-98, which is five percent of the gross amount, and pay advance percentage taxes to the BIR at the following amounts:

• P150 per day or P4,500 per month, if the privilege store is set up in an airconditioned area, and P100 per day or P3,000 per month if in a non-airconditioned area, located in a City or First Class Municipality.

• P75 per day or P2,500 per month if the store is set up in an airconditioned area, and P50 per day or P1,500 per month if in a non- airconditioned area, located in a municipality other than a First Class Municipality.

Such advance payment must be paid to the concerned Authorized Agent Banks (AAB) or RDO, in the absence of an AAB, on a monthly basis using BIR Form No. 0605 (Payment Form) on or before the first day on which the privilege store shall operate, and the first day of every month thereafter that it is in operation.

The primary objective of the SanTax Claus project is to improve tax awareness by encouraging the general public to habitually demand invoices for goods purchased and receipts for services. The project does not impose additional taxes as misunderstood by many. Thus, while the SanTax Claus project may be for this Christmas season only, the regulations as to the taxation of bazaars and tiangges are enforceable all year round. So, expect the BIR to continue monitoring bazaar activities way past the holiday season.

(Deanna Yvonne Geraldine A. Florendo is an Assistant Manager for Tax & Corporate Services of Manabat Sanagustin & Co., CPAs, a member firm of KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.

The views and opinions expressed herein are those of the authors and do not necessarily represent the views and opinions of KPMG in the Philippines. For comments or inquiries, please email [email protected])