Revised Guidelines in the Filing of Certificate of Compensation Payment/Tax Withheld for Compensation Payment With or Without Tax Withheld (BIR Form 2316)

Corporations and other businesses that adopt the calendar year accounting period are expected to be busy with year-end statutory obligations. One of which is the filing of BIR Form 2316 to the Bureau of Internal Revenue (BIR) and the issuance of the duplicate copy to the employees.

What is BIR Form 2316?

 BIR Form 2316 summarizes the employee’s salaries, wages, and other forms of remuneration, indicating the total amount of compensation and the taxes withheld for the calendar year.

The employer must prepare the form in triplicate copies for every employee on record. The original copy should be filed to the BIR on behalf of the employees qualified for substituted filing.

In contrast, the duplicate copy should be issued to the employees on or before January 31 of the succeeding year. Moreover, the employer must retain the third copy for ten years.

In cases where an employee opts to file his Annual Income Tax Return (AITR) or is not qualified for substituted filing, he should attach the duplicate copy to the AITR.

Who are qualified for substituted filing?

 Under Revenue Regulations (RR) No.2-1998, as amended, the following conditions are required for substituted filing:

1. Taxpayers receiving compensation income only;

2. Taxpayers with only one employer in the Philippines for the calendar year;

3. Employees whose income taxes have been withheld by their employers correctly

If an employee meets these conditions, he must signify his intention for substituted filing by signing the declaration portion of the form. The duly signed BIR Form 2316 serves as the employee’s AITR. Filing the AITR is no longer required.

What is the new process in the submission of Form 2316 to BIR?

The employer must submit the BIR Form 2316 (duplicate copy), duly signed by the employer or its authorized representative and the employee to BIR on or before February 28 of the succeeding year.

According to RR 16-2021, BIR will only accept scanned copies of the said form using a Digital Versatile Disc Recordable (DVD-R). Taxpayers must also observe the file format, naming conventions, and manner of submission as cited in the RR.

For now, we are still hoping that before the deadline of submission, BIR will implement electronic filing too to avoid many taxpayers in BIR offices and make complying more convenient, safe, and efficient.

Is E-signature allowed for BIR Form 2316?

Yes, BIR allows the use of e-signature for BIR Form 2316. Per Revenue Memorandum Circular (RMC) No. 29-2021, the use of digital signatures on selected BIR forms, including BIR Form 2316, is accepted.

Moreover, for the taxable year 2020, the bureau allowed taxpayers to submit duplicate copies of BIR Form 2316 with the employer’s signature or its authorized representative only. I hope BIR will continue this initiative for the 2021 submission.

With the threat of the COVID 19 pandemic still within our midst, the country’s tax collector should continue to provide more avenues for the taxpayers to meet their statutory obligations. After all, when more taxpayers can file and pay their taxes diligently, it means more funds for the country.

Do you need help with your tax compliance? We at DJKA Accounting Services can help you take care of your accounting, bookkeeping, and tax compliance needs. Just send us an email at info@djkaaccounting.com for more inquiries.