Under Revenue Regulations 1-2014 (RR 1-2014), all employers are now required to submit a digital copy of the Alphabetical List of their employees and payees. Although the Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes (Form 1604-CF) and the Annual Information Return Of Creditable Income Taxes Withheld (Expanded)/Income Payments Exempt From Withholding Tax (Form 1604-E) are still going to be filed manually, their attachments or Alphalists should now be digital. This is an amendment of the earlier rule from Revenue Regulations 2-98 as further amended by Revenue Regulations 10-2008.
Here’s the 1998 rule from RR 2-98:
See.2.83.3. Requirement for income payees list. – In lieu of the manually prepared alphabetical list of employees and list of payee’s and income payments subject to creditable and final withholding taxes which are required to be attached as integral part of the Annual Return (Form No. 1604), the Withholding Agent may, at its option, submit computer-processed tapes or cassettes or diskettes, provided that the said list has been encoded in accordance with the formats prescribed by Form 1604.
The above rule was amended in 2008 by RR 10-2008:
Section 2.83.3 Requirement for list of payees – In addition to the manually prepared alphabetical list of employees and list of payees and income payments subject to creditable and final withholding taxes which are required to be attached as integral part of the Annual Information Returns (BIR Form No. 1604CF/ 1604E), Monthly Remittance Returns (BIR Form No. 1601C etc.), the withholding agent may submit soft copy in 3.5- inch floppy diskettes/CD or email: firstname.lastname@example.org, containing the said alphalists.
However, taxpayers, whose number of employees or income payees are ten (10) or more, are mandatorily required to submit the said lists in 3.5-inch floppy diskettes/CD or email: email@example.com using the existing CSV data file format, together with the manually prepared alphabetical list. In order to comply with this format, the withholding agents shall have the option to use any of the following:
1. Excel format provided under Revenue Regulations No. 7-2000, as amended, following the technical specifications required by the BIR;
2. Their own extract program that shall meet the technical specifications required by the BIR; or
3. Data Entry Module using Visual FoxPro that will be available upon request or by downloading from the BIR’s web site at http://www.bir.gov.ph with the corresponding job aid.
For those who would choose either option 1 or 2, such taxpayers shall use a validation module developed by the BIR, which can be downloaded from the BIR website.
In any case, the withholding agents are required to save the same to a secondary storage as back up for a period of three (3) years from submission of the diskette, as aforementioned, for future reference.
For withholding agents classified as large taxpayers and excise taxpayers falling within the jurisdiction of the Large Taxpayers Service and/or Large Taxpayers District Office, the Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes (BIR Form No. 1604-CF) and the Annual Information Return of Creditable Income Taxes Withheld (Expanded)/ Income Payments Exempt from Withholding Tax (BIR Form No. 1604-E) shall be submitted to the Large Taxpayers Assistance Division, Large Taxpayers District Offices or Excise Taxpayers Assistance Division, as the case may be. For other withholding agents, the aforesaid annual returns shall be submitted to their respective Revenue District Offices. BIR Form No. 1604-CF shall be submitted on or before January 31 of the succeeding year while BIR Form No. 1604-E shall be filed on or before March 1 of the following year. Only diskettes/CD/email: firstname.lastname@example.org readable and virus free files upon submission shall be considered as duly filed “Alphabetical List of Employees/ Payees” by the employer. Violation hereof, shall be a ground for the mandatory audit of violator’s income tax liabilities (including withholding tax). Diskettes/CDs must be uploaded by the abovementioned offices within fifteen (15) days from receipt.
The manually prepared (hard copy for below 10 employees/payees) alphabetical list of employee shall be filed in triplicate copies (two copies for the BIR) to be stamped “received” by the BIR-Large Taxpayers Assistance Division, Large Taxpayers District Office or the Excise Taxpayers Assistance Division, or the Revenue District Office where the payor/employer is registered as Withholding Agent. Manually filed alphalists must be encoded and uploaded by the abovementioned offices within thirty (30) days from receipt.
And now RR 1-2014 sets out the new rule:
Section 2.83.3 Requirement for list of payees – All withholding agents shall, regardless of the number of employees and payees, whether the employees/payees are exempt or not, submit an alphabetical list of employees and list of payees on income payments subject to creditable and final withholding taxes which are required to be attached as integral part of the Annual Information Returns (BIR Form No. 1604CF/1604E) and Monthly Remittance Returns (BIR Form No. 1601C, etc.), under the following modes:
(1) As attachment in the Electronic Filing and Payment System (eFPS);
(2) Through Electronic Submission using the BIR’s website address at email@example.com; and
(3) Through Electronic Mail (email) at dedicated BIR addresses using the prescribed CSV data file format, the details of which shall be issued in a separate revenue issuance.
In cases where any withholding agent does not have its own internet facility or unavailability of commercial establishments with internet connection within the location of the withholding agent, the alphalist prescribed herein may be electronically mailed (e-mail) thru the e-lounge facility of the nearest revenue district office or revenue region of the BIR.
The submission of the herein prescribed alphalist where the income payments and taxes withheld are lumped into one single amount (e.g. “Various employees”, “Various payees”, “PCD nominees”, “Others”, etc.) shall not be allowed. The submission thereof, including any alphalist that that does not conform with the prescribed format thereby resulting to the unsuccessful uploading into the BIR system shall be deemed not as received and shall not qualify as a deductible expense for income tax purposes.
Accordingly, the manual submission of the alphabetical lists containing less than ten (10) employees/payees by withholding agents under Annual Information Returns BIR Form No. 1604CF and BIR No. 1604E shall be immediately discontinued beginning January 31, 2014 and March 1, 2014, respectively, and every year thereafter.
On specific provisions of the submission of alphabetical list of employees/payees of income payments, here are the changes that took place:
Rule from RR 2-98
All withholding agents are required to submit a manual Alphabetical List.
Amended by RR 10-2008
General Rule – All withholding agents are required to submit manual and digital Alphabetical List.
Exception – If the withholding agent has below 10 number of employees, only manual Alphabetical List is required.
Amended further by RR 1-2014
All withholding agents are required to submit only a digital Alphabetical List.
Download Free Resources
BIR REVENUE REGULATIONS NO. 2-98 Full Text.pdf
BIR REVENUE REGULATIONS NO. 10-2008 With Annex A To F.pdf
BIR REVENUE REGULATIONS NO. 1-2014.pdf
BIR FORM 1604-CF With Alphabetical List.xlsx
BIR FORM 1604-E With Alphabetical List.xlsx
There’s a RMC issued to clarify things up: RMC 5-2014: BIR Clarifies The Provisions Of RR No. 1-2014 Pertaining To Submission Of Alphalist