For Filipinos, nothing quite prepares you for the challenge and responsibility that goes with paying taxes. To this end, the BIR is constantly coming up with improvements and innovations to make paying taxes a less tedious experience for taxpayers. One of these innovations is the Taxpayer Identification Number (TIN).

To better explain what a BIR TIN is, we can relate it to something that almost everyone is familiar of: the college student number. Everyone who has been to college will relate to being assigned a student number of random digits that identifies you as a student of a certain school. Also, in most cases, the student number is essential to fill up numerous school forms and applications during your student life.

In the same way, a TIN is issued by the Bureau of Internal Revenue (BIR) to every taxpayer and signifies that you are part of a responsible group of Filipinos that pay taxes (hopefully). And as every taxpayer knows, the TIN is indispensable in accomplishing numerous BIR forms and returns. And as a particular TIN identifies a particular taxpayer, each taxpayer is given one TIN that will last his entire lifetime.

When we say that every taxpayer is issued a TIN by the BIR, this also includes corporate taxpayers. Under Revenue Memorandum Order (RMO) No. 30-2005, the BIR and the Securities and Exchange Commission (SEC) have collaborated to facilitate the issuance of pre-generated TINs to corporations and partnerships as part of the registration process. Thus, newly-incorporated corporations will notice that their SEC Certificate of Registration (COR) will bear a pre-generated BIR TIN, to be used during the life of the corporation (corporate term).

But then, how long is a corporate term? Section 11 of the Philippine Corporation Code provides that a corporation shall exist for a period not exceeding 50 years from the incorporation date, unless dissolved or extended for a period not exceeding 50 years through an amendment of the Articles of Incorporation (AOI). Recently, the BIR issued Revenue Memorandum Circular (RMC) No. 41-2018, dated May 23, 2018, to clarify policies on the issuance of TINs to corporations that have reached the end of its corporate term.

We discuss below the salient points of RMC No. 41-2018:

A corporation who has been granted an extension of its corporate term by the SEC shall still use its old TIN. The corporation is however required to update its registration with the BIR (BIR Form No. 1905) and attach the newly issued SEC COR and amended AOI.

A corporation whose registration with the SEC has been revoked, or its corporate term has lapsed without being extended will cease to exist as a juridical entity to do business.

Although the SEC will allow the registration using the old corporate name, the corporation will be given a different TIN, considering that it is now a different legal entity from the previous one. And as it is now a different entity, the corporation will have to apply for BIR registration and secure BIR authority to print invoices/receipts following existing BIR procedure. The old TIN shall be used to apply forand process the winding up and liquidation of the old corporation, for which, a tax clearance will have to be secured from the BIR.

The RMC also provided for rules on TIN issuance in the case of mergers and consolidations. In a merger, two or more corporations combine into a single corporation and the surviving entity is one of the corporations. In a consolidation, two or more corporations combine into a single corporation, forming an entirely new corporation. In the case of mergers, the surviving corporation shall retain its TIN while the TIN of the merged corporation shall be cancelled. In the case of a consolidation, the new corporation will be issued a pre-generated TIN, while the TINs of the consolidated corporations shall be cancelled.

Manila Times Source

ATTY. PEACHES ARANAS

Managing Partner LMA LAW