What is BIR Form 2316?
BIR Form 2316 is often confused as the Income Tax Return (ITR) for Individuals. It is not. BIR Form 2316 is just a statement of compensation paid to and taxes withheld from employees. RR No. 11-2018 refers to it as “Certificate of Compensation Payment and Tax Withheld” or just “Certificate” in its succeeding paragraph.
When is it due?
Every employer is srequired to furnish BIR Form 2316 to every employee on or before January 31 of the succeeding calendar year, whether their compensation were subjected to withholding tax or not. If employment is terminated before the close of such calendar year, on the day on which the last payment of compensation is made.
How many copies?
The employer shall prepare BIR Form No. 2316 in triplicate, which shall be distributed as follows:
(1) Original – Employee’s copy;
(2) Duplicate – BIR’s copy; and
(3) Triplicate – Employer’s copy which shall be retained for a period of ten (10) years.
Unless an employee is qualified for substituted filing of ITR, original and duplicate copies of BIR Form 2316 shall be given to the employee to serve as proof of compensation received and tax credit, and the other copy shall be retained by the employer. The original and duplicate copies shall form part of the employee’s Income Tax Return to be filed on or before April 15 of the following year.
What information are to be indicated in BIR Form 2316?
RR No. 11-2018 has identified the following information to be indicated on the BIR Form 2316
a. Name and address of the employee;
b. Employee’s Taxpayer Identification Number (TIN);
c. Name and Address of the Employer;
d. Employer’s TIN;
e. The sum of compensation paid, including the non-taxable benefits;
f. The amount of statutory minimum wage received if employee is MWE;
g. Overtime pay, holiday pay, night shift differential pay, and hazard pay received if employee is MWE;
h. The amount of tax due, if any; and
i. The amount of tax withheld, if any.
The new regulation removed the following from the list: date of birth, telephone number, marital status and name of qualified dependents. Looks like this is because of the elimination of personal and additional exemptions under TRAIN LAW (i.e. no more P25,000 deduction per dependent up to four).
What’s interesting though is that the current version of BIR Form 2316 which is version July 2008 ENCS still asks for these details. Makes you wonder if BIR has plans of updating the Certificate – just before the deadline. Nonetheless, the new regulation is enough to let us know that we don’t have to fill out everything in the current form.
Who should sign the Certificate?
The Certificate must be signed by both the employer/employer’s authorized officer and the employee. It shall contain a written declaration that it is made under the penalties of perjury.
There is another signature portion on the BIR Form 2316. And sometimes, when we see portions for signature, we just sign on them. Well, don’t – not yet! The other portion is to be accomplished under substituted filing of ITR only. You might want to review on that since RR 11-2018 added some details about substituted filing.
What about the substituted filing (of ITR)?
That is quite a lengthy discussion so I have written another post about substituted filing of ITR. But with regards to BIR Form 2316, employees qualified for substituted filing of ITR shall signify his intention to avail of such by affixing their signatures in the three copies of BIR Form 2316 and returning the signed copies to the employer for signature. Employers go crazy about this, so I think it is important to note that it is the responsibility of the employees to signify their intention to avail of substituted filing of ITR.
The employer then shall give back to the employee qualified for substituted filing of ITR the original copy while the duplicate copy shall be submitted by the employer to the concerned BIR office not later than February 28 of the succeeding year.
The forms shall be accompanied with Certified List of Employees Qualified for Substituted Filing of ITR, reflecting the amount of income payment, the tax due and tax withheld. This list shall be stamped “Received” by the concerned BIR office, which shall be tantamount to the substituted filing of ITR by the qualified employees.
In the event that the employee will need his/her Certificate (BIR Form No. 2316) stamped “Received”, he/she shall request the concerned BIR office to have the Certificate stamped “Received” accompanied with the submission of the employer’s certification that he/she was included in the list submitted by such employer to the BIR.
What if employers fail to comply?
Failure of the employer to furnish the employee of the Certificate of Compensation and Tax Withheld shall be a ground for the mandatory audit of payor’s all internal revenue tax liabilities upon verified complaint.
Any employer who fails to comply with the above filing/submission of BIR Form 2316 within the time required may be held liable under Section 250 of the Tax Code, as amended, for each failure. That is one thousand pesos (1,000) 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). Note that even after paying penalties, violating taxpayer shall still be required to submit the required documents.
If employer fails to comply for two consecutive years, that’s another thing. One may be held liable under Section 255 of the Tax Code and be subject to fine of not less than Ten thousand pesos (P10,000) and suffer imprisonment of not less than one (1) year but not more than ten (10) years.