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    Revenue Memorandum Circular No. 91-2012: Bureau of Internal Revenue

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    Henson Montalvo
    This document provides supplemental guidelines for invoicing and recording income payments for media advertising placements under a split payment arrangement. It outlines the accounting entries that taxpayers (advertisers, media entities, and advertising agencies) should make when an advertiser engages both a media supplier and advertising agency for a media placement totaling $100,000, with $85,000 paid to the supplier and $15,000 paid to the agency. The circular instructs concerned revenue officials to widely publicize the new guidelines.

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    Revenue Memorandum Circular No. 91-2012: Bureau of Internal Revenue

    Uploaded by

    Henson Montalvo
    59 views3 pages
    This document provides supplemental guidelines for invoicing and recording income payments for media advertising placements under a split payment arrangement. It outlines the accounting entries that taxpayers (advertisers, media entities, and advertising agencies) should make when an advertiser engages both a media supplier and advertising agency for a media placement totaling $100,000, with $85,000 paid to the supplier and $15,000 paid to the agency. The circular instructs concerned revenue officials to widely publicize the new guidelines.

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    This document provides supplemental guidelines for invoicing and recording income payments for media advertising placements under a split payment arrangement. It outlines the accounting entries that taxpayers (advertisers, media entities, and advertising agencies) should make when an advertiser engages both a media supplier and advertising agency for a media placement totaling $100,000, with $85,000 paid to the supplier and $15,000 paid to the agency. The circular instructs concerned revenue officials to widely publicize the new guidelines.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    59 views3 pages

    Revenue Memorandum Circular No. 91-2012: Bureau of Internal Revenue

    Uploaded by

    Henson Montalvo
    This document provides supplemental guidelines for invoicing and recording income payments for media advertising placements under a split payment arrangement. It outlines the accounting entries that taxpayers (advertisers, media entities, and advertising agencies) should make when an advertiser engages both a media supplier and advertising agency for a media placement totaling $100,000, with $85,000 paid to the supplier and $15,000 paid to the agency. The circular instructs concerned revenue officials to widely publicize the new guidelines.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    REPUBLIC OF THE PHILIPPINES

    DEPARTMENT OF FINANCE
    BUREAU OF INTERNAL REVENUE

    December 28, 2012

    REVENUE MEMORANDUM CIRCULAR NO. 91-2012

    Subject: Supplement to Revenue Memorandum Circular No. 63-2012 on Invoicing and


    Recording of Income Payments for Media Advertising Placements

    To: All Revenue Officials, Employees and Others Concerned

    This Circular is being issued to supplement the guidelines laid down in Revenue
    Memorandum Circular No. 63-2012 dated October 29, 2012 to cover invoicing and recording
    of income payments for media advertising placements under a split payment scheme or
    arrangement.

    Under a split payment arrangement, the advertiser may engage or contract directly
    with a media entity/supplier and an advertising agency for media advertising placements.
    As such, the income payments directly made by the advertiser to the media supplier and to
    the advertising agency is limited to the cost of the service provided by each entity (i.e. billing
    of the media supplier for the total cost of production and media placement and billing of
    advertising agency for commission/service fee).

    The following are the accounting entries to guide concerned taxpayers in their
    invoicing and recording of income payments and receipts in relation to media advertising
    placements.

    Assuming that the total cost of the advertiser for the total media advertisement is
    P100,000 comprised of P85,000 media entity/supplier billing and P15,000 advertising
    agency commissioner/service fee, inclusive of VAT:

    A. Accounting entries in the Books of Account of the Advertiser:

    Receipt of billing from media entity/supplier


    Debit Credit
    Advertising Expense P85,000
    Deferred Input VAT 10,200
    Accounts Payable – Media Entity/Supplier P95,200
    Payment to Media Entity/Supplier

    Debit Credit
    Accounts Payable – Media Entity/Supplier P95,000
    Creditable IT Withheld P 1,700
    Cash 93,500

    Receipt of Billing from Advertising Agency

    Debit Credit
    Service Expense P15,000
    Deferred Input VAT 1,800
    Accounts Payable – Advertising Agency P16,800

    Payment to Advertising Agency

    Debit Credit
    Accounts Payable – Advertising Agency P16,800
    Creditable IT Withheld P 300
    Cash 16,500

    B. Accounting Entries in the Books of Account of the Media Entity/Supplier

    Billing to Client/Advertiser for the Media Placement

    Debit Credit
    Accounts Receivable – Advertiser P95,200
    Income/Fees – Media Placement P85,000
    Deferred VAT Payable 10,200

    Receipt of Income Payment from Advertiser

    Debit Credit
    Cash P93,500
    Creditable Withholding Tax 1,700
    Accounts Receivable – Advertiser P95,200

    C. Accounting entries in the books of account of the Advertising Agency

    Billing to Client/Advertiser for the Commission/Service Fee

    Debit Credit
    Accounts Receivable – Advertiser P16,800
    Commission Income/Service Fees P15,000
    Deferred VAT Payable 1,800
    Receipt of Income Payment from Advertiser

    Debit Credit
    Cash P16,500
    Creditable IT Withheld 300
    Accounts Receivable – Advertiser P16,800

    All revenue officers and employees are hereby enjoined to give this Circular as wide
    a publicity as possible.

    (Original Signed)
    KIM S. JACINTO-HENARES
    Commissioner of Internal Revenue

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