REVENUE REGULATIONS NO.

16-2003 issued on April 29, 2003 imposes advance

payment of Value-Added Tax (VAT) or Percentage Tax and of Income Tax on operators
of privilege stores (or tiangges), as well as prescribes the tax obligations of
organizers or exhibitors of space for the operation of privilege stores.
A fixed amount of VAT or Percentage Tax, as the case may be, of P 150 per day
(or P 4,500 per month) and Income Tax of P 50 per day (or P 1,500 per month), shall be
imposed and collected in advance on a monthly basis from privilege store operators
during the entire duration of their business operations. Provided, however, that if the
duration of operation of the privilege store is less than one month, then the advance
payment shall cover only said lesser period. Said advance payments shall be credited
against the actual business tax and income tax due from such persons for the taxable
period for which such payments were remitted to the Bureau.
On the part of the organizers or exhibitors, their obligations shall cover the
following: 1) deduction and withholding of the 5% Expanded Withholding Tax on lease
payments to the lessor of real property; 2) posting in a conspicuous place of their
Certificate of Registration (COR) issued by the BIR; 3) providing the Revenue District
Office (RDO) with the list of names, Taxpayer Identification Numbers and CORs of
persons/entities participating in the event and the specific dates and duration when such
operations shall be conducted; 4) ensuring registration with the BIR as well as the
remittance of actual withholding tax liabilities and advance tax payments by the
privilege store operators; and 5) reporting to the BIR of non-compliance by the
privilege store operators with their obligations and responsibilities.
In addition to their obligation to pay advance business tax and income tax,
privilege store operators are also required to deduct and withhold the 5% Expanded
Withholding Tax on rental payments made to exhibitor/organizer for sub-leased spaces.
The advance payment of business tax and of income tax shall be evidenced by the
duly validated copy of BIR Form No. 0605 and the Official Receipt/Deposit Slip issued
by the Authorized Agent Bank (AAB) or the Revenue Collection Officer (RCO), in the
absence of an AAB, of the RDO having jurisdiction over the place where the privilege
store operates.
For purposes of claiming the advance payments as credits against the actual taxes
due, the applicable tax returns to be filed must be accompanied by a duly filed Payment
Form (BIR Form No. 0605) and by Official Receipts/Deposit Slips issued by the AABs
or RCO, if applicable, which shall constitute as the proof for the advance payment of
taxes. Without such proof attached to the tax returns, any claim on account thereof shall
be disallowed and the assessment of deficiency taxes shall correspondingly be made.