Before entering a new contract or a continuing contract with the Government, its Department, Agencies and Instrumentalities, one of the requirements is to submit a Tax Clearance Certificate (TCC) from the Bureau of Internal Revenue (BIR) to prove full and timely payment of taxes, and compliance with tax laws.
Under the BIR Revenue Memorandum Order (RMO) 46-2018, all prospective government bidders (individuals, partnerships, corporations, cooperatives, associations, whether taxable or non-taxable), except Non-Resident Foreign Corporation (NRFC), Non-Resident Alien Not Engaged in Trade or Business (NRA-NETB) and large taxpayers, are required to secure first the Tax Compliance Verification Sheet (TCVS) from the Collection Section of the Revenue District Office (RDO) where the taxpayer-applicant is currently and duly registered. Before the issuance of TCVS and TCC, all of the following criteria must be satisfied first;
- No unpaid annual registration fee (ARF).
- No open valid cases “stop-filer”.
- For those with previously issued TCC for Bidding Purposes, they must be a regular user of the BIR’s Electronic Filing and Payment System (eFPS) from the time of enrollment up to the time of filing of the renewal of TCC. For new applicants, submission of the latest income tax and business tax returns not filed and paid through the Bureau’s eFPS shall suffice.
- Not tagged as “Cannot Be Located (CBL)” taxpayer.
- No Accounts Receivable/Delinquent. However, applicants with delinquent accounts may still be issued TCC for bidding purposes, provided the tax liabilities involved were the subject of a pending application/s for compromise settlement and/or abatement of penalties pursuant to Section 204 of the Tax Code. Provided that the applicant has fully paid the amount offered for payment upon filing of the application for compromise settlement or abatement of penalties.
- No pending criminal information filed in any court of competent jurisdiction arising from any tax or tax-related cases.
All applications for the issuance of TCC shall be manually filed at the Bureau. The TCC for bidding purposes shall be processed and released within two (2) working days from the receipt of the application with complete documentary requirements which are listed below:
- For Local Applicants (Individual and Non-individual) and Branch Office of an Individual/Corporation:
- TCVS together with appropriate supporting documents, if applicable, issued by the concerned RDO with a validity period of ninety (90 days) from the date of issuance. TCVS is not applicable for taxpayer-applicant under the jurisdiction of the Large Taxpayers Service;
- Two (2) pieces of loose documentary stamp tax;
- Certification fee with payment confirmation or Revenue Official Receipt issued for such payment in case of unavailability of the eFPS;
- Authorization Letter originally signed by the Authorized Representative/applicant himself with photocopies of government-issued Identification Card;
- Copy of original unexpired Tax Clearance for Bidding Purposes – in case of renewal application.
- For Non-Resident Foreign Corporation (NRFC)/Non-Resident Alien Not Engaged in Trade or Business (NRA-NETB):
- Two (2) pieces of loose documentary stamp tax;
- Original unexpired Tax Clearance for Bidding Purposes, for renewal;
- Copy of BIR Form No. 1904 received by RDO No. 39- South Quezon City;
- Unexpired and certified true copy of Non-Registration Certificate issued by Securities and Exchange Commission for NRFC or Department of Trade and Industry for NRA-NETB;
- Authorization letter originally signed by the Authorized Representative/applicant himself with photocopies of valid I.D. Card
- Official Receipt of the Certification fee.
Once the Tax Clearance has been issued it shall have a validity period of one (1) year from the date of issuance. Tax clearance may be revoked based on any of the following grounds:
- The application for Compromise Settlement and Abatement of penalties have been disapproved.
- The taxpayer-applicant was found to have submitted spurious documents as attachments to his/her/its application.
- The taxpayer-applicant was found to be non-compliant with the prescribed criteria.
- The taxpayer-applicant had made misrepresentation to the government procuring agency or to the Tax Clearance-issuing office.
Through the decentralization of processing of Tax Clearance applications for bidding purposes, it is more efficient and timely for the taxpayers. More bidders would have a chance to participate and ensure competitive bidding for government projects. Competitive bidding will allow the government to get the most qualified bidders.
