Clarifications on the Sept. 30 deadline for enhanced inventory list
The enhanced inventory list prescribed in Revenue Memorandum Circular 57-2015 is due tomorrow, September 30. Please refer to our Tax Alert issued on September 18 for details.
In a forum organized by the BIR last September 25, the following issues were clarified:
Who are required to submit?
All taxpayers maintaining saleable inventories/inventories intended for sale are required to submit the enhanced inventory list even is there is zero balance of such inventories at the end of the year.
What should be included in the inventory list?
Only saleable inventories or inventories intended for sale shall be included in the inventory list. Office supplies, manufacturing supplies, parts and materials not forming part of the saleable inventories or inventories intended for sale shall not be included.
For retail and manufacturing industry, the amount to be reported under “unit price” shall be the cost of the saleable inventories, not the selling price.
For construction industry, the amount to be reported under “contract price” is inclusive of VAT.
Are taxpayers on fiscal year basis also required to submit on September 30?
Yes, taxpayers reporting on fiscal year basis which ended July 31, 2014 and thereafter, shall also file their enhanced inventory lists on September 30.
The rest shall file 30 days from fiscal year end.
Can the list be amended? Can you request for extension?
The inventory list may be amended and re-submitted before a Letter of Authority or Assessment Notice is received.
Request for extension indicating the reasons may be filed with the RDO.
Other action points
The inventory lists will be used in tax investigations. Therefore, ensure that the information are correct and consistent with the other reports and returns maintained or submitted by the company to the BIR.
Instead of requesting for an extension, choose to submit a list on September 30 and amend it later, if necessary. Approval of a request for extension is not guaranteed.
In some cases, two entities will be reporting the inventory (e.g., the consignor and the consignee). It is advisable to compare and reconcile the details with the other reporting entity. BIR may perform cross matching and discrepancies may trigger further investigation.
Posted in Tax Alerts.