AIRCARGO FORWARDERS OF THE PHILS., INC (AFPI ... - FAPAA

PHILIPPINES Country Report
Page 12 of 12
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REVENUE MEMORANDUM CIRCULAR (RMC) NO. 35-
2006 OTHERWISE KNOWN AS RMC FOR FREIGHT
FORWARDERS:
The approval of the Bureau of Internal Revenue of Revenue Memorandum
Circular (RMC) No. 35-2006 otherwise known as the RMC for Freight
Forwarders last June 25, 2006 by then BIR Commissioner Jose Mario Buñag,
Freight Forwarders are allowed to declare a presumptive 5% commission for
VAT & EWT purposes. This protects the Freight Forwarder in declaring its actual
income earned per shipment which will give way to forum shopping on the part of
the client if the ACTUAL income will be shown on its billings. The Freight
Forwarders are just required to submit a reconciliation report to the Bureau of
Internal Revenue declaring its actual income earned and will only be liable for
taxes due thereon. Documentation requirements were also clarified on the said
RMC for the protection of the Freight Forwarders and the clients.
This RMC greatly helped the Freight Forwarding Industry in the Philippines as
the cost of exporting/importing goods in the Philippines is now competitive in the
world market. With this new ruling, the Freight Forwarders and the
Shippers/Consignees are now properly guided thereby avoiding multiple taxation,
tax exposure & harassment and created an open business atmosphere that
encourages correct tax reporting & efficient tax collection.