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The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Under BIR Revenue Regulations No. 017-2024, all persons who have existing contracts with the government shall secure from an updated tax clearance from the BIR certifying that they have no outstanding tax liabilities and that they have duly filed the latest income and business tax returns and paid the corresponding taxes due thereon. Failure to comply with this requirement entitles the government to suspend the final settlement for any goods or services, including infrastructure projects, delivered by the contractor.
The Bureau of Internal Revenue (BIR) issued Revenue Regulations No. 017-2024 prescribing the presentation of BIR tax clearance prior to the final settlement of government contracts.
All persons, natural or juridical, local or foreign, who have existing contracts with the government, its departments, bureaus, offices and agencies, including state universities and colleges, government-owned and/or controlled corporations, government financial institutions and local government units for the supply of goods and services, including infrastructure projects, shall secure from the BIR an updated tax clearance certifying that they have no outstanding tax liabilities and that they have duly filed the latest income and business tax returns and paid the corresponding taxes due thereon. Such tax clearance shall be presented by the contractor to the concerned departments, bureaus, offices and agencies, including state universities and colleges, government-owned and/or controlled corporations, government financial institutions and local government units prior to the final settlement of the contract it entered into with them.
Failure to secure and present the prescribed BIR tax clearance shall entitle the government to suspend the final settlement for any goods or services, including infrastructure projects, delivered by the contractor.
The amount of final settlement on the contract for any goods and services, including infrastructure projects, delivered by the contractor which was suspended by the government due to the failure to present the BIR tax clearance prescribed by these Regulations, including the retention money required pursuant to the provisions of R.A. No. 9184 and its implementing regulations, shall be subject to tax lien as may be warranted in favor of the government to satisfy the contractor’s outstanding tax liabilities. The existing guidelines and procedures governing distraint and garnishment shall be applied accordingly.
Any violation of Revenue Regulations No. 017-2024 shall be subject to the corresponding penalties under the pertinent provisions of the NIRC of 1997, as amended, and applicable regulations issued by the BIR.
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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 0917-5772207/ 09778050020.
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