Reporting Your Losses due to Calamities

Damage done by Ondoy

Calamities brought about by typhoons, earthquakes, fires, or any other natural or unnatural disasters to which your business incurred losses should be reported to the BIR within 45 days.

Like the damage brought about by typhoon Ondoy and the recent typhoon Pedring that damage a lot of structures from homes to business. You need to report the damages. Photos of the damages and items that were lost.

REVENUE MEMORANDUM ORDER (RMO) No. 31-2009 gives the policies and guidelines governing the declaration of losses or destruction of business property resulting from an identifiable event of a sudden or unexpected, or unusual nature – otherwise known in taxation as “casualty losses.”

The RMO as issued stresses the need for business taxpayers to file with their respective BIR Offices a Sworn Declaration of Loss Arising from Casualty and other support documents deemed necessary to substantiate their proof of loss, within forty-five (45) days after the date of the event.

A revised format of the Sworn Declaration is included in the subject RMO and may be downloaded from the BIR Website at www.bir.gov.ph under Issuances and Rulings click 2009 series of RMO No. 31.

For losses brought about by the recent typhoons, Large Taxpayers (LTs) and Non-Large Taxpayers with business, a Sworn Declaration of Loss and other requirements deemed necessary to substantiate proof of loss(es) claimed shall be submitted within forty-five (45) days after the date of event causing the loss to their Revenue District Office (RDO) or LT Division/District Office where they are registered, as stated in Section 34(D) of the Tax Code and Revenue Regulations No. 12-77.

The Sworn Declaration of Loss shall state the following: nature of the event that gave rise to such loss(es) and the time of its occurrence; description and location of the damaged property(ies);items needed to compute the loss(es), such as a) cost or other basis of the property(ies); (b) depreciation allowed, if any c) value of the property (ies) before and after the event; d) cost of repair and lastly the amount of insurance or other compensation received or receivable.

Proof of the extent of loss(es) claimed whether due to casualty, robbery, theft or embezzlement have different requirements.

For casualty losses the documentary requirements includes photographs showing the extent of damage; the condition or value of the property after it was repaired, restored or replaced.

For those pertaining to robbery, theft or embezzlement a police and/or an insurance report should be attached to the Sworn Statement.

The said documents and requirements shall be verified by the concerned BIR office before the business taxpayer can actually claim deduction from his income tax.

The Commissioner has advised all the Taxpayer Service Units and BIR Personnel to advice and counsel all business taxpayers regarding the requirements in filing their claims of losses due to the recent typhoons.