Know Your Taxes May 2016

Your complete schedule of submission, filing, and payment of taxes for the whole month of May 2016:

PLEASE REMEMBER:

•  If you need assistance in the preparation and filing of your taxes, call us at 746 0121 or send us an email at Full Suite.

•  This information is gathered from the Bureau of Internal Revenue website and from the Know Your Taxes website.

•  The Bureau of Internal Revenue (BIR) now requires the use of their eBIRForms, for more information about the BIR’s new memorandum read our article: eBIRForms — Everything You Need to Know

Click to download Know Your Taxes Schedule – May 2016

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Guide to Philippine Taxation for Foreign Investors

The Philippines is often an attractive choice for foreigners who want to start an offshore business.

Although it may still fall behind its neighbors like China and Japan, the Southeast Asian country is steadily experiencing a fast economic growth.

Investment-grade ratings have also been given to the country, which stands as a proof of its progressiveeconomic liberalization. With its strategic location and booming economy, the Philippines proves to be one of your best options if you are planning to start a business in Asia.

However, starting a business in the Philippines as a foreigner is complicated. Among many other things like business registration in the Philippines, the country’s taxation is something that you need to have a clear understanding of if you want your business to succeed.

Here is a quick guide to the country’s general rules and restrictions about taxation.

Taxation in the Philippines

Tax Treaties

A tax treaty is a bilateral agreement between two countries made to resolve issues of double taxation and tax evasion. This means, if you are a resident of Country A, who is currently earning an income (whether active or passive) on Country B (in this case, Philippines), the existing agreement will prevent you from getting involved in the issues mentioned above.

Tax treaties also give you tax relief, which is a deduction on the amount of tax that you owe. This includes tax exemption and entitlement to preferential tax rates based on the type of income that you earn.

Under the tax treaties of the Philippines, foreigners are given preferential tax rates as they might still be required to pay taxes in their home country where they are considered as a resident taxpayer.

These are the types of income that may be subject to tax exemption or preferential tax rates:

1.  Preferential Tax Rates: Dividends, Interest, Royalties and Shipping and Air Transport.

2.  Tax Exempt: Income for personal services, teachers, researchers, artistes, athletes, students, trainees, directors fees, pensions, government service, gains from the sales of shares/alienation of property and independent personal services not rendered more than 183 days (depending on the provisions of the Double Taxation Agreement or DTA).

Note that tax relief is not automatic. As a rule, you are required to secure a BIR ruling to avail of a tax relief. The BIR ruling confirms that your transactions are eligible to preferential tax rates.

To secure a BIR ruling, you must file duly accomplished Tax Treaty Relief Application (TTRA) BIR forms 0901, along with the prescribed document attachments.

To see the complete list of countries in which the Philippines shares a tax treaty with, visit this site.

National Taxation

Philippine national taxes are divided into the following categories:

 1.  Corporate Income Tax

Resident foreign corporations (branches) are taxed on their net income from Philippine sources at the rate of 30 percent. A non-resident foreign corporation is accountable to a final withholding tax of its gross income (minus benefits and deductions) from Philippine sources at the rate of 30 percent.

A foreign business becomes a resident corporation when it is engaged in trade or business in the Philippines and is licensed by the Securities and Exchange Commission (SEC) to do so.

2.  Individual Income Tax

As a foreigner or a non-resident alien engaged in business in the Philippines, you will be taxed on your net income from the Philippines ranging from 5 percent to 32 percent. You will be considered as a non-resident alien engaged in business or trade if you have stayed in the country for more than 180 days during any calendar year.

3.  Withholding of Taxes

Your taxes as a non-resident alien and an owner of a foreign corporation are withheld at source.

4.  Fringe Benefits Tax

Fringe benefits tax refers to the benefits that you give to your employees supplementary to their salaries. This may come in the form of medical insurance, subsidized meals, house allowance, and the like. Fringe benefits tax is the tax imposed on these benefits.

In the Philippines, a final tax of 32 percent is imposed on the gross monetary value of the fringe benefits that you give to your employee. Fringe benefits tax, however, is not imposed when the fringe benefits are deemed necessary to the nature of your business.

5.  Business Taxes

The Philippines has a number of business taxes. Here are the main ones that you should take note of:

•  Value Added Tax (VAT) – Value Added Tax is a form of sales tax on consumption levied on the sale, barter, exchange, and lease of goods or properties and services in the Philippines and on the importation of the goods in the Philippines.

You are required to file VAT returns if the amount of your actual gross sales or receipts exceed one million nine hundred nineteen thousand five hundred pesos (PHP 1,919,500). You must file your monthly VAT declaration using BIR form 2550M.

•  Excise Tax – Excise tax is a tax imposed on the production, sale, or consumption of a commodity in a country. There are two types of excise tax which are namely: 

¤   Specific Tax – These are taxes imposed on goods based on their weight, volume capacity, or any other physical unit of measurement.

¤   Ad Valorem Tax – These are taxes imposed on goods based on their selling price or other specified value.

•  Percentage Tax – Percentage tax is a form of business tax imposed on entities/transactions that are VAT-exempt and engaged in certain industries (international air/shipping carriers doing business in the Philippines, franchise grantees, and persons/companies doing life insurance business are some of them).

•  Documentary Stamp Tax – This refers to the tax imposed on documents, instruments, loan agreements, and papers evidencing certain business transactions.

To efficiently keep track of the taxes you need to file, avail of a quality accounting services that could help you with your taxes.

Foreign Exchange Regulations

The Bangko Sentral ng Pilipinas (BSP) regulates foreign exchange transactions in the Philippines. They consistently amend their rules to maintain a safe financial system, and for the country to attract foreign investors to the local stock market.

1.   Purchase and Sale of Foreign Exchange

Foreign exchange can be bought in the Philippines for free. Residents and non-residents alike can purchase foreign exchange (FX) from authorized agent banks (AABs), their subsidiary/affiliate forex corporations (AAB-forex corps), and other non-bank entities operating as foreign exchange dealers/money changers subject to specific requirements.

2.  Foreign Trade Transactions

A wide range of merchandise can be imported into and exported from the Philippines, save for items that may impact health, safety, and national security.

Foreign exchange may be purchased by importers from AABs/AAB-forex corps as advance payment without BSP approval, but it is still subjected to documentary requirements. On a similar note, AABs and AAB-forex corps can also sell foreign exchange for import transactions under a certain BSP arrangement.

Without prior BSP approval but under the standard BSP arrangement, payments for export may also be made.

3.  Non-Trade Transactions

Non-trade transactions refer to foreign loans and foreign investments. Even without BSP approval, entities may sell foreign exchange to residents for payment of non-trade transactions. However, if the amount of foreign exchange exceeds $120,000, the purchaser will be required to present documentary requirements prescribed by the BSP.

Foreign Inward Investments

Registration of foreign investments with the BSP is optional. However, registration to BSP is mandatory when you need the foreign exchange to fund the repatriation of your capital and remit your profits and dividends.

 As a foreign investor, starting a business in the Philippines may prove to be quite of an ordeal at first. Know your taxes well to make your business flourish, and soon, you will realize how it is all worth it.

 

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Know Your Taxes April 2016

know-your-taxes-notice

•  PLEASE REMEMBER: the deadline of filing and payment for the annual income tax is on April 15th. Prepare and file early to avoid penalties.

•  If you need assistance in the preparation and filing of your Annual Income Tax Return, call us at 746 0121 or send us an email at info@full-suite.com

•  This information is gathered from the Bureau of Internal Revenue website and from the Know Your Taxes website.

•  The Bureau of Internal Revenue (BIR) now requires the use of their eBIRForms, for more information about the BIR’s new memorandum read our article: eBIRForms — Everything You Need to Know

Click to download YOUR COMPLETE SCHEDULE.

Tax, Bookkeping and Accounting Needs?

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Know Your Taxes March 2016

Know the schedule of submission, filing, and payment of taxes for the whole month of March 2016.

In the meantime, we would like to inform individuals/professionals/freelancers and business owners, that the deadline of filing and payment for the annual income tax is on April 15th. Please prepare and file early to avoid penalties.

If you need assistance in the preparation and filing of your Annual Income Tax Return, call us at 746 0121 or send us an email at Full Suite.

This information is gathered from the Bureau of Internal Revenue website and from the Know Your Taxes website.

The Bureau of Internal Revenue (BIR) now requires the use of their eBIRForms, for more information about the BIR’s new memorandum read our article: eBIRForms — Everything You Need to Know

Schedule of Submission, Filing, and Payment of Taxes

know-your-taxes-january-2015-week-1

1 Tuesday

SUBMISSION

•  Consolidated Return of All Transactions based on the Reconciled Data of Stockbrokers

•  Engagement Letters and Renewals or Subsequent Agreements for Financial Audit by Independent CPAs

•  Annual Alphabetical List of Taxpayers (Individual/Corporations) who were issued Provincial/City/Municipal/Barangay Permits to engage in business by LGUs

•  Annual Inventory List with required applicable schedules (hard & soft copies) of finished goods, work in process, raw materials, supplies and stock-in trade of taxpayers

•  Attachments to e-Filed 1702 RT, MX & EX

¤  Audited Financial Statements together w/ the Summary Alphalist of W/holding Agents of Income Payments Subjected to W/holding Tax (SAWT);

¤  Photocopy of the Certificate of Entitlement (CE) for Income Tax Holiday (ITH) issued by BOI/BOI-ARMM;

¤  Photocopy of the Certificate issued by PEZA;

¤  Statement of Management’s Responsibility.

e-SUBMISSION

•  Quarterly Summary Lists of Sales/Purchases by a Value Added Tax (VAT) registered taxpayers – eFPS

•  1604E Alphalist of Payees CY 2015

e-FILING/FILING

•  1604E Annual Information Return of Creditable Income Taxes Withheld (Expanded)/Income Payments Exempt from Withholding Tax-Manual (w acknowledgement receipt/successful validation message generated by the BIR System as proof of submission)

REGISTRATION

•  Computerized Books of Accounts & Other Accounting Records in CD-R, DVD –R or other optical media properly labeled with the information required under existing revenue issuances together with the affidavit attesting to the completeness, accuracy and appropriateness of the computerized accounting books/records

 

5 Saturday

SUBMISSION

•  Summary Report of Certifications Issued by the President of the National Home Mortgage Finance Corporation (RA 7279)

e-FILING/FILING & e-PAYMENT/PAYMENT

•  2000-Documentary Stamp Tax Declaration/Return

•  2000-OT Documentary Stamp Tax Declaration/Return (One-Time Transactions)

 

Know Your Taxes

8 Tuesday

SUBMISSION/e-SUBMISSION

•  Transcript sheets of the following, except for Tobacco Products & Regulated Materials, submission is w/in the 5th day of the Month after the end of the operation

¤  2.08-ORB (A-1)     2.43-ORB              31.18-ORB

¤  2.08-ORB                2.61-ORB               31.27-ORB

¤  2.11-ORB                  2.68-ORB              31.46-ORB

¤  2.14-ORB                  2.69-ORB              31.46-Auxiliary Register Book (L71/2)

¤  2.17-ORB                  2.69A-19-ORB     38.01-ORB

¤  2.17a-ORB                2.70-ORB              398 ORB

¤  2.20-ORB                 2.83-ORB              398-1 ORB

¤  2.36-ORB                 31.01ORB(L7)

•  Transcript sheets of ORB used by manufacturers/assemblers, importers and wholesalers of automobiles

e-SUBMISSION

•  Monthly e-Sales Report for all Taxpayers using CRM/POS with TIN ending in even number

 

10 Thursday

SUBMISSION

•  Transcript Sheets of 2222-ORB

•  List of Buyers of Sugar Together with a Copy of Certificate of Advance Payment of VAT Made by Each Buyer appearing in the List by a Sugar Cooperative

•  Information Return on Releases of Refined Sugar by the Proprietor or Operator of a Sugar Refinery or Mill

•  Monthly Report of DST Collection and Remitted by the Government Agency

•  Importer’s Notarized Liquidation Statement together with the required applicable attachments

e-SUBMISSION

•  Monthly e-Sales Report for all taxpayers using CRM/POS with TIN ending in odd number

e-FILING/FILING & e-PAYMENT/REMITTANCE

•  1600 together w/ the Monthly Alphalist of Payees (MAP)

•  1606

e-FILING & e-PAYMENT/REMITTANCE

•  Withholding Tax Remittance Return/s for 1600, 1601C, 1601E & 1601F with the Corresponding Electronic Tax Remittance Advice/s (eTRAs)-National Government Agencies

FILING & REMITTANCE

•  1601C & 1602- Non-eFPS

•  2200M Excise Tax Return for the amount of Excise Taxes collected from payment made to Sellers of Metallic Minerals

•  1601E & 1601F together with the Monthly Alphalist of Payees (MAP)- Non-eFPS

e-FILING & e-PAYMENT/REMITTANCE

•  1601E & 1601F together with the Monthly Alphalist of Payees (MAP)- National Government Agencies

DISTRIBUTION

•  2307- Certificate of Creditable Tax Withheld at Source (VAT/Percentage Tax)

•  2306 – Certificate of Final Tax Withheld at Source (VAT/Percentage Tax)

 

11 Friday

e-FILING

•  1601C & 1602-eFPS filers under Group E

•  1601E & 1601F together w/ the Monthly Alphalist of Payees (MAP)- eFPS filers under Group E

 

12 Saturday

e-FILING

•  1601C & 1602-eFPS filers under Group D

•  1601E & 1601F together w/ the Monthly Alphalist of Payees (MAP)- eFPS filers under Group D

 

Know Your Taxes

 

13 Sunday

e-FILING

•  1601C & 1602-eFPS filers under Group C

•  1601E & 1601F together w/ the Monthly Alphalist of Payees (MAP)- eFPS filers under Group C

 

14 Monday

e-FILING

•  1601C & 1602-eFPS filers under Group B

•  1601E & 1601F together w/ the Monthly Alphalist of Payees (MAP)- eFPS filers under Group B

 

15 Tuesday

REGISTRATION

•  Permanently Bound Computer – Generated/Loose Leaf Books of Accounts & other Accounting Records such as but not limited to Receipts & Invoices together w/ the affidavit/certificate under oath as to the type of books,no. of pages/leaves used & volume number during the TY

SUBMISSION

•  Monthly Summary Report/Schedule of Transfers of Titled and Untitled Properties by City or Municipal Assessors, RDs and LRAs

•  Summary List of blank OCTs/TCTs/CCTs issued to all RDs

e-SUBMISSION

•  Quarterly Summary List of Machines (CRM-POS) Sold by all machine distributors/dealers/vendors/suppliers

FILING & PAYMENT

•  1707A together with the applicable attachments by corporate taxpayers

•  1704 together with the applicable attachments

e-FILING/FILING & e-PAYMENT/PAYMENT

•  1702 RT, MX & EX by Corporations, Partnerships and Other Non-Individual Taxpayers together with the required applicable attachments

•  Audited Financial Statements together w/ the Summary Alphalist of W/holding Agents of Income Payments Subjected to W/holding Tax (SAWT);

•  Photocopy of the Certificate of Entitlement (CE) for Income Tax holiday (ITH) issued by the BOI/BOI-ARMM;

•  Photocopy of the Certificate issued by the PEZA;

•  Statement of Management’s Responsibility.

e-FILING

•  1601C & 1602-eFPS filers under Group A

•  1601E & 1601F together w/ the Monthly Alphalist of Payees (MAP) eFPS filers under Group A

e-PAYMENT

•  1601C, 1601E, 1601F & 1602

 

16 Wednesday

SUBMISSION

•  Consolidated Return of All Transactions based on the Reconciled Data of Stockbrokers

 

Know Your Taxes

 

20 Sunday

SUBMISSION

•  Monthly Report of Printer

e-FILING/FILING & e-PAYMENT/PAYMENT

•  2551Q – For transactions involving overseas dispatch,message or conversation originating from the Philippines and Amusement Taxes

FILING & PAYMENT

•  2550M & 2551M together with the required applicable attachments-Non-eFPS

e-FILING & e-PAYMENT

•  2550M & 2551M-National Government Agencies

e-FILING/FILING & e-PAYMENT/REMITTANCE

•  1600WP

DISTRIBUTION

•  2307 Certificate of Creditable Tax Withheld at Source (Income Tax)

 

21 Monday

e-FILING

•  2550M & 2551M together with the required applicable attachments- eFPS filers under Group E

 

22 Tuesday

e-FILING

•  2550M & 2551M together with the required applicable attachments- eFPS filers under Group D

 

23 Wednesday

e-FILING

•  2550M & 2551M together with the required applicable attachments-eFPS filers under Group C

 

24 Thursday

e-FILING

•  2550M & 2551M together with the required applicable attachments- eFPS filers under Group B

 

25 Friday

SUBMISSION

•  Quarterly Summary List of Sales/Purchases by a Value Added Tax (VAT) registered taxpayers – Non-eFPS

•  Sworn Statements of the Manufacturer’s & Importer’s Volume of Sales of each particular brand of Alcohol and Tobacco Products

e-FILING/FILING & e-PAYMENT/PAYMENT

•  2550Q together with the required applicable attachments – eFPS & Non-eFPS

e-FILING

•  2550M & 2551M together with the required applicable attachments- eFPS filers under Group A

e-PAYMENT

•  2550M & 2551M

 

30 Wednesday

REGISTRATION

•  Computerized Books of Accounts & Other Accounting Records in CD-R, DVD –R or other optical media properly labeled with the information required under existing revenue issuances together with affidavit attesting to the completeness, accuracy and appropriateness of the computerized accounting books/records

SUBMISSION

•  Annual Inventory List with required applicable schedules (hard & soft copies) of finished goods, work in process, raw materials, supplies and stock-in trade of taxpayers

•  Attachment to e-filed 1702 RT, MX & EX

¤  Audited Financial Statements together w/ the Summary Alphalist of W/holding Agents of Income Payments Subjected to W/holding Tax (SAWT);

¤  Photocopy of the Certificate of Entitlement (CE) for Income Tax holiday (ITH) issued by the BOI/BOI-ARMM;

¤  Photocopy of the Certificate issued by the PEZA;

¤  Statement of Management’s Responsibility.

e-SUBMISSION

•  Quarterly Summary Lists of Sales/Purchases by a Value Added Tax (VAT) registered taxpayers-eFPS FQ ending Feb. 29, 2016

 

31 Thursday

e-FILING/FILING & e-PAYMENT/PAYMENT

•  1702Q together with the required applicable attachments FQ ending Jan. 31, 2016

 

Taxation, Bookkeeping and Accounting Needs?

Request for a Quotation

 

Know Your Taxes February 2016

Know the schedule of submission, filing, and payment of taxes for the whole month of February 2016.

In the meantime, we would like to inform individuals/professionals/freelancers and business owners, that the deadline of filing and payment for the annual income tax is on April 15th. Please prepare and file early to avoid penalties.

If you need assistance in the preparation and filing of your Annual Income Tax Return, call us at 746 0121 or send us an email at Full Suite.

 

 

This information is gathered from the Bureau of Internal Revenue website and from the Know Your Taxes website.

The Bureau of Internal Revenue (BIR) now requires the use of their eBIRForms, for more information about the BIR’s new memorandum read our article: eBIRForms — Everything You Need to Know

 

Schedule of Submission, Filing, and Payment of Taxes

 

Know Your Taxes

 

1 Monday

SUBMISSION

•  Consolidated Return of All Transactions based on the Reconciled Data of Stockbrokers

•  Engagement Letters and Renewals or Subsequent Agreements for Financial Audit by Independent CPAs

 

5 Friday

SUBMISSION

•  Summary Report of Certifications Issued by the President of the National Home Mortgage Finance Corporation (RA 7279)

e-FILING/FILING & e-PAYMENT/PAYMENT

•  2000 – Documentary Stamp Tax Declaration/Return

•  2000-OT Documentary Stamp Tax Declaration/Return (One-Time Transactions)

 

Know Your Taxes

 

8 Monday

SUBMISSION/e-SUBMISSION

•  Transcript sheets of the following, except for Tobacco Products & Regulated Materials, submission is w/in the 5th day of the Month after the end of the operation.

•  2.08-ORB (A-1)     2.43-ORB     31.18-ORB

•  2.08-ORB               2.61-ORB     31.27-ORB

•  2.11-ORB                2.68-ORB     31.46-ORB

•  2.14-ORB               2.69-ORB     31.46-Auxiliary Register Book (L71/2)

•  2.17-ORB               2.69A-19-ORB     38.01-ORB

•  2.17a-ORB             2.70-ORB             398 ORB

•  2.20-ORB              2.83-ORB             398-1 ORB

•  2.36-ORB              31.01ORB(L7)

•  Transcript sheets of ORB used by manufacturers/assemblers, importers and wholesalers of automobiles

e-SUBMISSION

•  Monthly e-Sales Report for all Taxpayers using CRM/POS with TIN ending in even number

10 Wednesday

SUBMISSION

•  Transcript Sheets of 2222-ORB

•  List of Buyers of Sugar Together with a Copy of Certificate of Advance Payment of VAT Made by Each Buyer appearing in the List by a Sugar Cooperative

•  Information Return on Releases of Refined Sugar by the Proprietor or Operator of a Sugar Refinery or Mill

•  Monthly Report of DST Collection and Remitted by the Government Agency

e-SUBMISSION

•  Monthly e-Sales Report for all Taxpayers using CRM/POS with TIN ending in odd number

e-FILING/FILING & e-PAYMENT/REMITTANCE

•  1600 together w/ the Monthly Alphalist of Payees (MAP)

•  1606

e-FILING & e-PAYMENT/REMITTANCE

•  Withholding Tax Remittance Returns for 1600, 1601C, 1601E & 1601F with the Corresponding Electronic Tax Remittance Advice/s (eTRAs) by National Government Agencies

FILING & REMITTANCE

•  1601C & 1602 – Non-eFPS

•  2200M Excise Tax Return for the amount of Excise Taxes collected from payment made to Sellers of Metallic Minerals

•  1601E & 1601F together with the Monthly Alphalist of Payees (MAP) – Non-eFPS

e-FILING & e-PAYMENT/REMITTANCE

•  1601E & 1601F together with the Monthly Alphalist of Payees (MAP) – National Government Agencies

DISTRIBUTION

•  2307 – Certificate of Creditable Tax Withheld at Source (VAT/Percentage Tax)

•  2306 – Certificate of Final Tax Withheld at Source (VAT/Percentage Tax)

11 Thursday

e-FILING

•  1601C & 1602 – eFPS filers under Group E

•  1601E & 1601F together w/ the Monthly Alphalist of Payees (MAP) – eFPS filers under Group E

12 Friday

e-FILING

•  1601C & 1602 – eFPS filers under Group D

•  1601E & 1601F together w/ the Monthly Alphalist of Payees (MAP)- eFPS filers under Group D

13 Saturday

e-FILING

•  1601C & 1602 – eFPS filers under Group C

•  1601E & 1601F together w/ the Monthly Alphalist of Payees (MAP) – eFPS filers under Group C

 

Know Your Taxes

 

14 Sunday

e-FILING

•  1601C & 1602 – eFPS filers under Group B

•  1601E & 1601F together w/ the Monthly Alphalist of Payees (MAP) – eFPS filers under Group B

SUBMISSION

•  Certificate of Actual Total Amount of Employee’s Qualified PERA Contribution

 

15 Monday

REGISTRATION

•  Permanently Bound Computer – Generated/Loose Leaf Books of Accounts & other Accounting Records such as but not limited to Receipts & Invoices together w/ the affidavit/certificate under oath as to the type of books,no. of pages/leaves used & volume number during the TY

SUBMISSION

•  Monthly Summary Report/Schedule of Transfers of Titled and Untitled Properties by City or Municipal Assessors, RDS and LRAs

•  Summary List of blank OCTs/TCTs/CCTs issued to all RDs

e-SUBMISSION

•  Quarterly Summary List of Machines (CRM-POS) Sold by all machine distributors/dealers/vendors/suppliers

FILING & PAYMENT

•  1707A together with the applicable attachments by corporate taxpayers

•  1704 together with the applicable attachments

e-FILING/FILING & e-PAYMENT/PAYMENT

•  1702 RT, MX & EX by Corporations, Partnerships and other Non-Individual Taxpayers together w/ the required applicable attachments

¤ Audited Financial Statements together w/ the Summary Alphalist of W/holding Agents of Income Payments Subjected to W/holding Tax (SAWT);

¤ Photocopy of the Certificate of Entitlement (CE) for Income Tax holiday (ITH) issued by the BOI/BOI-ARMM;

¤ Photocopy of the Certificate issued by the PEZA;

¤ Statement of Management Responsibility.

e-FILING

•  1601C & 1602 – eFPS filers under Group A

•  1601E & 1601F together w/ the Monthly Alphalist of Payees (MAP) eFPS filers under Group A

e-PAYMENT

•  1601C,1601E,1601F & 1602

 

16 Tuesday

SUBMISSION

•  Consolidated Return of All Transactions Based on the Reconciled Data of Stockbrokers

 

20 Saturday

SUBMISSION

•  Monthly Report of Printer

e-FILING/FILING & e-PAYMENT/PAYMENT

•  2551Q – For transactions involving overseas dispatch,message or conversation originating from the Philippines and Amusement Taxes

FILING & PAYMENT

•  2550M & 2551M together with the required applicable attachments – Non-eFPS

e-FILING & e-PAYMENT

•  2550M & 2551M – National Government Agencies

e-FILING/FILING & e-PAYMENT/REMITTANCE

•  1600 WP

DISTRIBUTION

•  2307 Certificate of Creditable Tax Withheld at Source (Income Tax)

 

Know Your Taxes

 

21 Sunday

e-FILING

•  2550M & 2551M together with the required applicable attachments – eFPS filers under Group E

 

22 Monday

e-FILING

•  2550M & 2551M together with the required applicable attachments – eFPS filers under Group D

 

23 Tuesday

e-FILING

•  2550M & 2551M together with the required applicable attachments – eFPS filers under Group C

 

24 Wednesday

e-FILING

•  2550M & 2551M together with the required applicable attachments – eFPS filers under Group B

 

25 Thursday

SUBMISSION

•  Quarterly Summary List of Sales/Purchases by a VAT-Registered Taxpayers – Non-eFPS

•  Sworn Statements of the Manufacturer’s & Importer’s Volume of Sales of each particular brand of Alcohol and Tobacco Products

e-FILING/FILING & e-PAYMENT/PAYMENT

•  2550Q together with the required applicable attachments – eFPS & Non-eFPS

e-FILING

•  2550M & 2551M together with the required applicable attachments- eFPS filers under Group A

e-PAYMENT

•  2550M & 2551M

 

28 Sunday

SUBMISSION

•  Scanned copy of Form 2316 saved in DVD-R properly labelled together w/ Notarized Certification as to accuracy & correctness

 

29 Monday

e-FILING/FILING & e-PAYMENT/PAYMENT

•  1702Q together with the required applicbale attachments FQ ending December 31, 2015

Tax, Bookkeping and Accounting Needs?

Request for a Quotation

Know Your Taxes January 2016

Know the schedule of submission, filing, and payment of taxes for the whole month of January 2016.

In the meantime, we would like to remind business owners: sole proprietor businesses and corporations, that the deadline of business renewal is on January 20th. Please renew your business permits to avoid penalties.

For Individuals / Freelancers / Professionals, the deadline for payment of the BIR Annual Registration is on January 31st, please pay ahead of time.

Need help in renewing your business permit this coming January 2016? Sign Up to Full Suite’s Business Renewal Services for 2016 or Call us at 746 0121.

 

This information is gathered from the Bureau of Internal Revenue website and from the Know Your Taxes website.

The Bureau of Internal Revenue (BIR) now requires the use of their eBIRForms, for more information about the BIR’s new memorandum read our article: eBIRForms — Everything You Need to Know

 

Schedule of Submission, Filing, and Payment of Taxes

Know Your Taxes

 

1 Friday

SUBMISSION

•  Consolidated Return of All Transactions based on the Reconciled Data of Stockbrokers

•  Engagement Letters and Renewals or Subsequent Agreements for Financial Audit by Independent CPAs

 

5 Tuesday

SUBMISSION

•  Summary Report of Certification Issued by the President of the National Home Mortgage Finance Corporation (RA 7279)

e-FILING/FILING & e-PAYMENT/PAYMENT

•  2000 – Documentary Stamp Tax Declaration/Return

•  2000-OT- Documentary Stamp Tax Declaration/Return (One-Time Transactions)

 

8 Friday

SUBMISSION/e-SUBMISSION

•  Transcript sheets of the following, except for Tobacco Products & Regulated Materials, submission is w/in the 5th day of the Month after the end of the operation.

¤ 2.08-ORB (A-1)     2.43-ORB     31.18-ORB

¤ 2.08-ORB              2.61-ORB     31.27-ORB

¤ 2.11-ORB               2.68-ORB     31.46-ORB

¤ 2.14-ORB              2.69-ORB     31.46-Auxiliary Register Book (L71/2)

¤ 2.17-ORB              2.69A-19-ORB   38.01-ORB

¤ 2.17a-ORB            2.70-ORB            398 ORB

¤ 2.20-ORB             2.83-ORB            398-1ORB

¤ 2.36-ORB             31.01ORB(L7)

•  Transcript sheets of ORB used by manufacturers/assemblers, importers and wholesalers of automobiles

e-SUBMISSION

•  Monthly e-Sales Report for all Taxpayers using CRM/POS with TIN ending in even number

 

Know Your Taxes

 

10 Sunday

SUBMISSION

•  Transcript Sheets of 2222-ORB

•  List of Buyers of Sugar Together with a Copy of Certificate of Advance Payment of VAT Made by Each Buyer appearing in the List by a Sugar Cooperative

•  Information Return on Releases of Refined Sugar by the Proprietor or Operator of a Sugar Refinery or Mill

•  Monthly Report of DST Collection and Remitted by the Government Agency

•  Importer’s Notarized Liquidation Statement together with the required applicable attachments

e-SUBMISSION

•  Monthly e-Sales Report for all taxpayers using CRM/POS with TIN ending in odd number Month of December 2015

e-FILING/FILING & e-PAYMENT/REMITTANCE

•  1600 together w/ the Monthly Alphalist of Payees (MAP)

•  1606

e-FILING & e-PAYMENT/REMITTANCE

•  Withholding Tax Remittance Return for BIR Form 1600 with the Corresponding Electronic Tax Remittance Advice/s (eTRAs) – National Government Agencies

•  1603 – National Government Agencies CQ ending December 31, 2015

FILING & PAYMENT/REMITTANCE

•  2200M Excise Tax Return for the amount of Excise Taxes collected from payment made to Sellers of Metallic Minerals

•  1603 – Non-eFPS

DISTRIBUTION

•  2307- Certificate of Creditable Tax Withheld at Source (VAT/Percentage Tax)

•  2306 – Certificate of Final Tax Withheld at Source (VAT/Percentage Tax)

 

11 Monday

e-FILING

•  1601C & 1602 – eFPS filers under Group E

•  1601E & 1601F together w/ the Monthly Alphalist of Payees (MAP) – eFPS filers under Group E

 

12 Tuesday

e-FILING

•  1601C & 1602 – eFPS filers under Group D

•  1601E & 1601F together w/ the Monthly Alphalist of Payees (MAP)- eFPS filers under Group D

 

13 Wednesday

e-FILING

•  1601C & 1602 – eFPS filers under Group C

•  1601E & 1601F together w/ the Monthly Alphalist of Payees (MAP) – eFPS filers under Group C

 

14 Thursday

e-FILING

•  1601C & 1602 – eFPS filers under Group B

•  1601E & 1601F together w/ the Monthly Alphalist of Payees (MAP) – eFPS filers under Group B

 

15 Friday

REGISTRATION

•  Permanently Bound Computer – Generated/Loose Leaf Books of Accounts & other Accounting Records such as but not limited to Receipts & Invoices together w/ the affidavit/certificate under oath as to the type of books,no. of pages/leaves used & volume number during the

SUBMISSION

•  List of Medical Practitioners

•  Quarterly List (with monthly breakdown) of Contractors of Government Contracts entered into by the Provinces/Cities/ Municipalities/Barangays

•  Monthly Summary Report/Schedule of Transfers of Titled and Untitled Properties by City or Municipal Assessors, RDS and LRAs

•  Summary List of blank OCTs/TCTs/CCTs issued to all RDs

•  Copy of Quarterly Updates of Assessment Roll (list of existing Tax Declaration of Real Properties) from LGUs thru its Local Treasurer

e-SUBMISSION

•  Quarterly Summary List of Machines (CRM-POS) Sold by all machine distributors/dealers/vendors/suppliers

e-FILING & e-PAYMENT/REMITTANCE

•  Withholding Tax Remittance Return/s for 1601C, 1601E & 1601F with the Corresponding Electronic Tax Remittance Advice/s (eTRAs) -National Government Agencies

e-FILING/FILING & e-PAYMENT/PAYMENT

•  1702 RT, MX & EX by Corporations, Partnerships and Other Non-Individual Taxpayer together with the required applicable attachments

¤  Audited Financial Statements together w/ the Summary Alphalist of W/holding Agents of Income Payments Subjected to W/holding Tax (SAWT);

¤  Photocopy of the Certificate of Entitlement (CE) for Income Tax holiday (ITH) issued by the BOI/BOI-ARMM;

¤  Photocopy of the Certificate issued by the PEZA; and Statement of Management Responsibility

FILING & PAYMENT

•  1704 together with the required applicable attachments

•  2200M Excise Tax Return for Mineral Products

•  1602 – Non-eFPS

•  1707A together with the applicable attachments by corporate taxpayers

e-FILING & e-PAYMENT/REMITTANCE

•  1603 eFPS filers – except National Government Agencies

e-FILING

•  1601C & 1602 – eFPS filers under Group A

•  1601E & 1601F together w/ the Monthly Alphalist of Payees (MAP) -eFPS filers under Group A

FILING & REMITTANCE

•  1601C together with the required applicable attachments – Non-eFPS

•  Copy of the Certified Alphalist submitted to the nearest DOLE Regional/Provincial Office – Operations Division/Unit for MWEs receiving hazard pay for the Private Sector;

•  Justification for such payment of hazard pay as certified by DOLE for the Private Sector;

•  Copy of the Department of Budget and Management (DBM) circular/s or its equivalent as to who are allowed to receive hazard pay for the Public Sector.

•  1601E & 1601F together w/ the Monthly Alphalist of Payees (MAP) – Non-eFPS

e-PAYMENT

•  1601C, 1601E, 1601F & 1602

 

16 Saturday

SUBMISSION

•  Consolidated Return of All Transactions based on the Reconciled Data of Stockbrokers

 

Know Your Taxes

 

20 Wednesday

SUBMISSION

•  Quarterly Information on OCWs or OFWs Remittances which are Exempt from DST to be furnished by the local banks and non-bank money transfer agents

•  Monthly Report of Printer

e-FILING/FILING & e-PAYMENT/PAYMENT

•  2551Q – For transactions involving overseas dispatch,message or conversation originating from the Philippines and Amusement Taxes

FILING & PAYMENT

•  2550M & 2551M together w/ the required applicable attachments – Non-eFPS

e-FILING & e-PAYMENT

•  2550M & 2551M – National Government Agencies

e-FILING/FILING & e-PAYMENT/REMITTANCE

•  1600 WP Month of December 2015

DISTRIBUTION

•  2307 Certificate of Creditable Tax Withheld at Source (Income Tax)

 

21 Thursday

e-FILING

•  2550M & 2551M together w/ the required applicable attachments – eFPS filers under Group E

 

22 Friday

e-FILING

•  2550M & 2551M together w/ the required applicable attachments – eFPS filers under Group D

 

23 Saturday

e-FILING

•  2550M & 2551M together w/ the required applicable attachments – eFPS filers under Group C

 

Know Your Taxes

 

24 Sunday

e-FILING

•  2550M & 2551M together w/ the required applicable attachments – eFPS filers under Group B

 

25 Monday

SUBMISSION

•  Quarterly Summary List of Sales/Purchases by a VAT-Registered Taxpayers – Non-eFPS

•  Sworn Statements of the Manufacturer’s & Importer’s Volume of Sales of each particular brand of Alcohol and Tobacco Products

e-FILING/FILING & e-PAYMENT/PAYMENT

•  2550Q together w/ the required applicable attachments – eFPS, Non-eFPS, NGAs

e-FILING

•  2550M & 2551M together w/ the required applicable attachments – eFPS filers under Group A

e-PAYMENT

•  2550M & 2551M

REFUND

•  Excess Taxes Withheld on Compensation by Employer, whether Private or Government as a result of the Year-End Adjustment

 

29 Friday

e-FILING/FILING & e-PAYMENT/PAYMENT

•  1702Q together w/ the required applicable attachments

 

30 Saturday

REGISTRATION

•  Computerized Books of Accounts & Other Accounting Records in CD-R, DVD –R or other optical media properly labeled with the information required under existing revenue issuances together with affidavit attesting to the completeness, accuracy and appropriateness of the computerized accounting books/records

SUBMISSION

•  Inventory List with required applicable schedules (hard & soft copies) of finished goods, work in process, raw materials, supplies and stock-in trade of taxpayers

•  Attachments to e-Filed 1702 RT, MX & EX

¤ Audited Financial Statements together with the summary Alphalist of W/holding Agents of Income Payments Subjected to W/holding Tax (SAWT);

¤ Photocopy of the Certificate of Entitlement (CE) for Income Tax Holiday (ITH) issued by the BOI/BOI-ARMM;

¤ Photocopy of Certificate issued by PEZA;

¤ Statement of Management’s Responsibility.

•  Attachments to e-Filed 1601C

¤ Copy of the Certified Alphalist submitted to the nearest DOLE Regional/provincial Office-Operations Division/Unit for MWEs receiving hazard pay for the Private Sector;

¤ Justification for such payment of hazard pay as certified by DOLE for the Private Sector;

¤ Copy of the Department of Budget and Management (DBM) circular/s or its equivalent as to who are allowed to receive hazard pay for the Public Sector.

e-SUBMISSION

•  Quarterly Summary List of Sales/Purchases by a VAT Registered Taxpayers – eFPS

 

31 Sunday

SUBMISSION

•  Sworn Statement by every lessee, concessionaire, owner or operator of mines or quarry, processor of minerals, producers or manufacturer of mineral products

•  Sworn Declaration of motels and other similar establishments

•  Sworn Statement by Senior Citizens whose annual taxable income for the previous year does not exceed the poverty level as determined by the NEDA thru the NSCB

•  Sworn Certification from the International Carrier stating that there is no change in the Domestic laws of its Home Country granting Income Tax Exemption to Philippine Carriers (RA 10378), and its required applicable attachment – to be filed in International Tax Affairs Division (ITAD)

•  Annual Information by all Accredited Tax Agents/Practitioners to be submitted to RNAB/RRAB

•  Affidavit of Self-Employed Professionals (pertaining to: rates, manner of billings and factors on detecting service fee)

•  Annual Alphabetical List of Professionals/Persons who were issued Professional/Occupational Tax Receipt (PTR/OTR) by LGUs

•  Tenants profile of commercial establishments/leased buildings/spaces together with the required documents

•  List of Regular Suppliers of Goods and Services by the Top 5,000/20,000 Individual/Private Corporations including Large Taxpayers

e-FILING/FILING

•  1604CF together with the Alphabetical List of Employees/Payees – Manual (w/ acknowledgement receipt/successful validation message generated by the BIR System as proof of submission)

e-SUBMISSION/SUBMISSION

•  Alphabetical List of Employees/Payees CY 2015

e-PAYMENT/PAYMENT

•  0605 Annual Registration Fee (of all business establishments including self-employed professionals)

REGISTRATION

•  Official Appointment Books for Self-Employed Professionals CY 2016

DISTRIBUTION

•  2304 to all income receipients of payment not subject to withholding tax excluding compensation income

•  2306 to all income recipients including qualified employees whose purely compensation income & fringe benefits were subjected to Final Withholding Tax

•  2316 to all compensation income earners by their employers

Tax, Bookkeeping and Accounting Needs?

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BIR Form 2316: Everything You Need to Know

One of the most important forms all employees must know about is the BIR Form 2316. It is something you must receive every year as proof that taxes have been deducted from your income. Read on to learn more about it.

Have a 2316 Question? We Answered Them Here

What is BIR Form 2316?

The BIR Form 2316 is also called the Certificate of Compensation Payment or Income Tax Withheld.

The BIR defines compensation as either salaries, wages or other forms of remuneration given by an employer to an employee.

This is what the BIR Form 2316 looks like:

 
BIR Form 2316

 

What Is It for and Who Needs to File It?

This form is a certificate that must be accomplished and issued yearly by the Payor or Employer to each employee whose income is subjected to final tax declaration. The employer must indicate the total amount that was paid to the employee and the corresponding taxes withheld during the calendar year.

Should you have no other income from other employers, there will be no need for you to file an income tax return. The BIR Form 2316 is enough proof that your income has already been subjected to income tax. This is called substituted filing, wherein the employer files the income tax returns for the employee.

This form is normally requested as part of pre-employment requirements in order for your new employer to make sure that the correct deductions have been made by your previous employer.

When Is the BIR Form 2316 Issued?

The employer must issue the form to each employee on or before the 31st of January of the succeeding year in which payment was made. However, in case of termination of employment, it must be issued on the same day when the last payment of wages was made.

The BIR Form 2316 must be attached to the Annual Income Tax Return, which is the BIR Form 1700 for individuals receiving purely compensation income or BIR Form 1701 for individuals with mixed income.

 

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Tax Type 101: What are the Different Tax Types

Paying taxes is something inevitable wherever you live. Almost all transactions require the payment of taxes. In the Philippines, taxes are grouped into two basic types: National and Local.

What Are the Different Tax Types?

National taxes are the ones paid to the government through the Bureau of Internal Revenue (BIR). Our national taxation system is based on the National Internal Revenue Code of 1997 or the Republic Act No. 8424 also known as the Tax Reform Act of 1997, as amended. Import and export tariffs levied by the Bureau of Customs are also considered national taxes and duties but will not be discussed in this article.

Local taxes, on the other hand, are based on Republic Act 7160, otherwise known as the Local Government Code of 1991, as amended. These taxes and fees are imposed by the local government units in every province, city, municipality, and barangay, which are given the power to levy such taxes by the code.

National Taxes

Capital Gains Tax is tax imposed on the proceeds from sale, exchange, or other disposition of capital assets located in the Philippines. Examples of sold assets that are subject to capital gains tax include properties, stocks, pieces of jewelry, and other high-value goods.

Documentary Stamp Tax is imposed on documents, instruments, loan agreements, and papers that are used as evidence of acceptance, assignment, sale or transfer of obligation, rights, or property. Documentary stamps are usually found on deeds of sale and bank promissory notes, among others.

Donor’s Tax is levied on a donation or gift for the gratuitous transfer of property between two or more persons who are both still living at the time of transfer. Even relief goods sent for donation are charged this type of tax.

Estate Tax is required to be paid before an estate is transferred to the rightful beneficiary or heir of a deceased person. This is based on a graduated schedule of tax rate.

Excise tax is tax on goods produced for sale and subsequently sold within the country. It is considered an indirect tax which means the manufacturer is supposed to recover it by adding the amount to the selling price. Sin tax on tobacco and alcohol is an example of excise tax.

Income tax is imposed on all compensation and income received or earned from practice of profession, conduct of trade in business, and from properties.

Percentage tax is a business tax imposed on businesses not covered by Value Added Tax and where gross annual receipts for sale of good and services do not exceed Php750,000.

Value Added Tax or VAT is another kind of indirect tax that is passed on to the end consumer. It is a form of consumption tax making it the most common tax type because all final sales are almost always charged this tax.

Withholding tax on compensation is tax deducted from salaries of employees and it is the company’s responsibility to remit the same to the government. Other kinds of withholding tax are Expanded Withholding Tax, Final Withholding Tax, and Withholding Tax on Government Money Payments.

Local Taxes

Basic Real Property Tax is tax on real properties classed as follows: agricultural, commercial, industrial, residential, timberland, and mineral.

Franchise Tax is imposed by LGUs on business franchises at a rate not more than 50% of 1% of the gross annual receipts of the previous taxable year.

Business of Printing and Publication Tax is collected from any business that does printing or publication of printed materials such as books, cards, pamphlets, posters, or tarpaulins.

Professional Tax is collected from doctors, lawyers, engineers, and other professionals engaged in the exercise or practice of professions that require government examination or acquisition of license to practice.

Amusement Tax is tax on all forms of entertainment such as movies, concerts, and plays. This tax is usually already included in the ticket price.

Community Tax, more commonly called Cedula, is required from individuals from a base fee of Php5.00 and additional Php1.00 for every Php1,000 income.

Annual Fixed Tax for Delivery Trucks and Vans amounting to Php500 is collected by the LGU from trucks and vans which deliver goods such as beer, soda, and/or cigarettes.

Barangay Tax is subjected on sari-sari stores and retailers whose annual gross sales do not exceed Php50,000 and is accrued on the first day of January of each year.

Barangay Clearance is paid as a legal permission for particular individuals, hosts, or companies to conduct an event or start a business in a barangay.

 

 

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Do I Need to Pay Taxes for My Online Business?

Are you an online seller? Are you selling products or provide services via the Internet? If you answered yes to both questions, then you are the subject of the Bureau of Internal Revenue’s Revenue Memorandum Circular Number 55-2103.

Taxes for Online Businesses

When It All Began

The sale of goods and services through online channels has grown rapidly in the recent years. A lot of people have discovered the ease and convenience of buying in the comfort of their own home, office, or even Internet cafes. From big to small-sized enterprises, business owners realized the advantage of being online and now almost every kind of business sell their products or services in the world wide web.

Even those who do not have physical stores, are encouraged to sell online upon realizing this trend. Online retailing have become unstoppable may it be through virtual shopping malls, web stores, online market places, and most recently through social media like Instagram and Facebook. The rising trend of online businesses did not go unnoticed by the BIR in the tax bureau’s attempt to increase collections year after year. The BIR stands by the law that states all Filipinos earning income within the country are subject to pay corresponding taxes. The bureau adds that online business offering goods and services are no different from merchants with physical stores or offices, thus must be subjected to paying taxes.

Who Are Covered by This Guideline?

There are two types of business owners covered by the BIR’s RMC 55-2013:

1. Online retailers or online shop owners. Anyone who sells products and services online may it be through an e-commerce shop or virtual shop belongs to the category under online retailers. As long as the online store is analogous to a physical store where there is retail of products or services, the online shop must pay corresponding taxes for goods and services sold.

2. Online intermediary services providers. An intermediary liaises between two trading parties and receives commission for doing the job.

If you fall under one or both categories of an online business, you need to pay your taxes the same way a regular store owner pays his tax obligations for revenues generated by the sale of goods and services. Your obligations as a taxpayer include (in order):

1. Secure a Barangay Clearance.

2. Secure a Mayor’s Permit.

3. Register at the Revenue District Office (RDO) that has jurisdiction over the principal place of business or the head office, or in the case of individuals, the residential address. Accomplish the necessary forms and pay the registration fee at accredited banks within the RDO. The BIR through the RDO will then issue a Certificate of Registration (COR), which should be displayed at all times.

4. Secure the Authority to Print (ATP) invoices and register books of accounts, either manual books or computerized accounting system.

5. Issue manual or electronic receipts, whichever is applicable, for every sale, trade or barter or goods and services. The receipts should conform to the rules prescribed by the bureau and must be issued in duplicate at least, the original of which should be given to the buyer. The duplicate is retained for accounting purposes. A receipt or invoice is required to be issued for products or services amounting to PHP25.00 or more.

6. Withhold required creditable or expanded withholding taxes and remit the same to the BIR at the prescribed schedule.

7. File applicable tax returns on or before the due dates and pay the corresponding taxes.

8. Keep books of accounts updated. Books must be readily available for inspection and verification whenever the RDO deem it necessary to check for compliance.

Online selling is a game changer. It is proven to be more convenient for both seller and buyer than doing business at a physical store or office. It is also income generating thus subject to taxes too. It is the online business owner’s duty to issue receipts and file returns.

 

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How Can I Legally Reduce My Business Tax?

Taxes are the lifeblood of every governing body that has ever existed since time immemorial, and it’s safe to assume that it will be around far into the foreseeable future. Paying the correct amount of business taxes (no matter how high they may be) is a responsibility that every entrepreneur must shoulder if they wish their enterprise to prosper without the dreaded knock from the BIR.

But did you know that there are legitimate ways to lower your business tax bill that are well within the bounds of the law? And by “legitimate”, we mean that you won’t be labeled as a tax evader.

Legal Ways to Reduce Tax

There are two ways to reduce taxes: Tax Evasion and Tax Avoidance. While they both have the same objective, they are different in the sense that Tax Evasion is illegal while Tax Avoidance is legal.

What is Tax Evasion?

 Tax Evasion when a taxpayer employs illegal ways or outside the lawful means to reduce taxes or avoid paying taxes at all.  One element of tax evasion is that the taxpayer must have an accompanying state of mind that he is evading his taxes in bad faith or that he willfully, deliberately, and by no accident, evaded to pay his taxes.

What is Tax Avoidance?

Tax Avoidance is when a taxpayer tried to reduces his taxes within the means allowed by law. It is made in good faith and at arm’s length; otherwise it won’t be regarded as such.

Read more about Tax Evasion vs Tax Avoidance in Atty. James Biron’s blog post: Tax Evasions vs Tax Avoidance

How Can You Legally Reduce Business Taxes? How Is Tax Avoidance Done?

Now that you know that it is possible to reduce your business tax without being charged with tax evasion cases by BIR, here are a few ways of tax avoidance or ways to avoid paying excess taxes, the legal way:

 

1. Book Legitimate Business Expenses as Tax Deductions

Depending on the nature of your business, it’s possible to mix business and leisure while charging the latter as tax deductible expenses. If your business requires research and development, you can include a business mission in your next vacation trip and then charge the travel expenses to your business. Restaurant bills can be charged as representation expenses, so make sure that you collect your receipts when meeting with prospects or business partners to claim that deduction.

2. Bad Debt Expenses Can Be Written off from Your Books

For business owners with delinquent customers who don’t pay on time or fail to pay for more than a year, these account receivables can be considered as bad debt. Examine the fine print on your credit policy to determine if such accounts qualify.

 

3. Hire Family Members and Relatives

Your business can save on taxes this way because their salaries may be deducted from the taxable income.

4. Take Note of the Expanded Withholding Tax Rule to Avoid Double Taxation

Because of this rule, some of your customers are obligated to pay your income taxes on your behalf, which requires them to withhold a portion of their payment to you. To claim these against your income tax payables, you need to collect the BIR Form 2307 from your clients and present this to the BIR when you file your taxes.

 

5. Losses Due to Inventory Theft Are Tax Deductible

If the nature of your business involves keeping an inventory of commodities or merchandise, robberies or losses from obsolescence merit a tax deduction.

 

6. Find out If You’re a Barangay Micro-Business

Businesses with total assets of less than Php3 Million qualify as a Barangay Micro Business enterprise, where you may avail of benefits like a 100% income tax exemption, or even exemption from minimum wages or lower taxes if you live in certain locales.

 

7. Donations Are Tax Deductible

The tax deductible percentages will vary, based on certain guidelines: the full amount of your donations to accredited non-government organizations are tax-deductible, while tax deductibility of donations to non-accredited NGO’s will be limited to only 5% of the taxable income for corporations, and 10% for sole proprietorships.

As long as you keep a detailed account of your books, safeguard all of your receipts, always identify your expenses properly and know your tax code, you will find perfectly acceptable ways to keep your business tax expenses low and not be charged with tax evasion.

 

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